ourselves of our liberty and do without some things. Well, if our allies won't, then they can do without some of our foreign aid, as far as I am concerned.

Senator FULBRIGHT. Could I say to the Senator, that the countries involved in supplying wheat are not recipients of our aid, though they were. That is illustrated by the French. They are now less inclined to go along with our policies than any one of the major nations, and yet they were one of the largest recipients of our aid. I regret this, but I don't know what can be done about it.

The CHAIRMAN. You talked about Western Germany. Did you read where our former Chief of Staff said we could withdraw four of the five divisions we have in Western Germany. Suppose we did it. Our allies would scream bloody murder if they had to fill the place over there of those four divisions we might bring home. Yet we still sit by and say, you can have a currency now that is as good as ours, built up with our money and then trade with Russia when we can't trade with Russia. I will say we have plenty of ways to put the pressure on allies if they are going to stand firm with us. If not, let's see who is with us and who is against us, because again, the Bible says: "He who is not for me is against me. Now that is as simple as

Senator DOUGLAS. The Bible also says, "He who is not against us is with us."

[Laughter.]

The CHAIRMAN. That was not in my King James version.
I recognize the Senator from Texas.

Senator TOWER. Mr. Chairman, I would just like to say that I am glad that the radio and television media have discovered that this is a very important question we are deliberating. I only wish they had discovered it yesterday when the proponents of this measure were testifying.

I would like to thank my good friend and distinguished colleague from the State of Arkansas for a very closely reasoned and well-stated thesis. I will say it is somewhat more academic than political in character and should the people of Texas return me to the college classroom in 1966, I shall make it required reading for all of my students, because I think it is a very important contribution to the dialog currently raging over the whole question of our posture, hard or soft, toward the Soviet Union in the cold war.

I would question my learned friend-and I know I do so with great hazard because he has one of the finest intellects in the Congress—I would question his contention that the ideological struggle is irrelevant or that actually we are not really involved too much in ideological struggle, that it has little relevance in the East-West confrontation. It would appear to me that the whole genius and dynamic behind the Communist drive over the past 40 years has been their ideological goals and objectives, to which they address themselves, which they conceive justify any means that they adopt toward that end. Certainly the Marxian interpretation of history, the projected goal of the establishment of the anarchist synthesis, society with all of the trappings of capitalism withering away, makes it necessary that they destroy any capitalist competition because they cannot exist side by side with capitalist countries. I think that the ideological aspect of this thing is not to be underrated at all and certainly is not easily divorced from the political aspects of the East-West struggle.

I would question the contention that Henry George was of very little influence except perhaps in Denmark. While my friend from Arkansas was studying with the Tories at Oxford, I studied with the sergeant major of the labor movement in the London School of Economics and it was thought there that Henry George had a very profound effect on the thinking of labor leaders in Great Britian.

I think that the Senator fails to address himself to the issue in the cold war that we are considering here and that is whether or not we will extend credit to the Soviet Union.

gress.

Senator Mundt stated in his testimony that while he disapproved the wheat deal, his resolution was not aimed at stopping the deal but simply at stopping the extension of American credit for that purpose. Now, I think that the whole basis of his argument was that we cannot rely on the Soviet Union to pay us back; that indeed they are a bad credit risk. Historically the Export-Import Bank has not extended credit to Communist countries, and so this does represent a major policy reversal, one that should command the attention of the ConIt is one that should be subjected to the action of the Congress. Now in the distinguished Senator's testimony, he said that the Export-Import Bank has never guaranteed a financial transaction with U.S.S.R., but it has, since its creation in 1934, been legally empowered to do so. I wonder if that is not in conflict with the provision of the law that existed up until 1961? The act stated that: "The Export-Import Bank in Washington is further authorized," to the amount specified, to provide insurance "against the risks of loss of or damage to tangible personal property of U.S. origin which is exported from the United States in commercial intercourse and is located in any friendly foreign country."

And there are evidences that the Export-Import Bank has not considered Soviet bloc countries to be friendly countries. I wonder, too, if this is a sound transaction, why it cannot be financed through commercial banks without the intervention of the Export-Import Bank. It would seem to me perhaps there is a grave doubt as to whether or not the Soviet Union is a good credit risk. I am aware that there are other countries that owe us money, but when the Export-Import Bank does business in these countries, it ordinarily does so with private commercial establishments who do have good credit ratings and good credit experience. We are dealing here directly with the Government of the Soviet Union because there are no private commercial establishments in the Soviet Union to carry on this business and they have a very, very poor credit rating indeed.

Senator FULBRIGHT. On the credit angle, as I stated, my information is that in their dealings with other countries, they have been considered a good credit risk. We have no record with them, it is quite

true.

The Senator says historically he questions the assertion that they have the authority. I will call to the Senator's attention, Senate Document No. 85, 83d Congress, which was presented by the former chairman of this committee, Senator Capehart, entitled "Legislative History of the Export-Import Bank of Washington." On page 2 of that, I would like to read one paragraph which I had in mind.

I quote that was from this committee when he was chairman of this committee:

Perhaps the primary reason for the establishment of the Bank— that is, the Export-Import Bank—

was the anticipated need for the financing of future trade with the Union of Soviet Socialist Republics. With the U.S. recognition of the Soviet regime, it was expected trade would develop, requiring financing which private capital could not supply. *** The Board of Trustees, however, took the position that such credits should not be provided in the absence of the settlement of Soviet debts to the United States.

Senator TOWER. I think that should be Board policy.

Senator FULBRIGHT. Well, I take it that first sentence means that this was one of the objectives of the establishment of the Bank. However, that may be, I don't think that is particularly significant as to whether or not we should engage in the wheat deal. If it is only based upon the question of their likelihood of repayment, that is quite another matter and I wouldn't feel qualified to go into it. We do know that institutions of other countries similar to the Export-Import Bank in Canada, Germany, and in the Netherlands, have done exactly what is being requested of this Bank. Again, that is not conclusive on whether we should do it or not. That is why I come back again to the question of political policy-the long-term political policy that we are to follow with regard to this great empire. And I don't know that I can say more than I already have about ideology. I regard ideology as merely a tool of a great empire. Every empire, during an expansion period always has slogans or ideologies, if you like, which may or may not be useful in furthering its aims. But the main and most important element is the power of that empire, how forceful it is, the resources it may have to bring to bear against the free world. That, it seems to me, is the crux of the struggle between us. I have no fear of their ideology as such. I think the very fact that they have come here to buy wheat, among many other reasons, indicates the inadequacy of their ideology. I don't think there are many illusions among peoples of the world that communism is a great system of government which is the wave of the future. I don't think it is making headway on that basis. What headway Russia makes, if any, is on its ability to bring power to bear, usually naked power, upon their neighbors and through other countries. They haven't been very successful in converting anyone to the Communist ideology, to my knowledge.

Senator TOWER. Will the Senator yield for a question at that point?
The CHAIRMAN. Excuse me for interrupting you.
Off the record.

(Discussion off the record.)

Senator FULBRIGHT. I think it has very limited appeal as an ideology. The activity such as you describe in Venezuela, is terroristic influence. The actual appeal of communism as an ideology is practically limited to the most ignorant and deprived people. That is the way I view it. I don't see that it is making much headway although great efforts have been made ever since 1917 to do so. I don't see that it has made much headway as an ideology. It is becoming obsolete as an ideology and I don't think that it will ever have much effect.

I believe that the Russians themselves are discarding it gradually without saying so. This is one of the important elements in their conflict with the Chinese. The Chinese are newer converts than the Russians. The Russians through experience have found that communism doesn't work. The Chinese haven't found it out yet but they are beginning to. That is part of it and then the Russians are gradually leaving the old doctrine.

That doesn't mean that they are accepting our view. They are not becoming democratic, but there are many other ways to organize a society than just these two.

Mr. De Gaulle apparently, according to a very responsible account in the morning papers, also has his doubts about our system or his former system as being adaptable and useful under present conditions. We don't accept that, but I don't think we are going to fall out completely with France because she doesn't believe or can't make a twoparty or multiple-party system work. We are going to go along and accept this view. We are not dogmatic, I hope, to the extent that everybody has to have exactly the same system we have.

Mr. Chairman, I don't wish to take up the time of the committee. I am more than willing to vacate this seat. I only came here

The CHAIRMAN. I don't know if the distinguished Senator from Texas has finished and we want the same privilege extended to all of the Members.

Senator TOWER. Mr. Chairman, to the interest of time, and in deference to the Acting Secretary of State, who has been waiting for a long time

The CHAIRMAN. With all due deference, he is our top Cabinet officer.

Senator FULBRIGHT. I have another committee meeting. I am more than willing to give up this seat. I would hope the chairman didn't think I was trying to prolong this hearing.

The CHAIRMAN. Not at all. [Laughter.]

I realize there were some questions the Senator didn't enjoy, maybe. Senator FULBRIGHT. No, I think the Senator is quite wrong. I don't know what questions he is referring to. I thought this discussion was most useful and I particularly appreciate the comments from the Senator from Illinois.

The CHAIRMAN. That is fine.

Senator PROXMIRE. Mr. Chairman, is it understood that the distinguished chairman of the Foreign Relations Committee will be back before this committee?

The CHAIRMAN. I hope he will. I can't control him, we are all equal in the Senate.

Senator PROXMIRE. This is a very provocative and helpful statement.

The CHAIRMAN. This is a very important statement.
Senator FULBRIGHT. I appreciate that compliment.

The CHAIRMAN. As you told me at lunch yesterday, this is a very very vital bill for the whole Nation and it is important for the Nation to understand what is involved and to line up one way or the other. Senator FULBRIGHT. I think it is one of the most important issues that has come before the Senate since I have been here. The same ele

ment was involved in the test ban treaty but not on as clearcut a basis as is involved in this particular bill. This has brought it down to a pinpoint and I think if we make the wrong decision in this case, it could have disastrous effects over many years in the future.

The CHAIRMAN. Will the Senator indicate when it would suit himwe would normally convene again at 2:30-would the Senator, would it be convenient to be here then?

Senator FULBRIGHT. Unfortunately-I would love to do it but I have to go to a conference on that late lamented foreign aid bill with the House at 3 o'clock. You know how the House is, I would be a little bit reluctant to tell them that I can't come, that I canceled it. The CHAIRMAN. Will the Senator remain? Secretary Ball's statement is quite short.

Senator FULBRIGHT. I doubt if you would release him that quickly. I will wait if the Senator wishes, I will wait a few minutes.

The CHAIRMAN. If you will wait a few minutes, we will see. They are so anxious to hear your testimony, I hate to say that you could leave.

Senator JAVITS. Mr. Chairman, may I suggest most respectfully that the questioning of Secretary Ball begin with the members who would now have an opportunity to question Senator Fulbright? The CHAIRMAN. I will be glad to accept that suggestion. Mr. Secretary, we are honored and pleased to have you.

STATEMENT OF HON. GEORGE W. BALL, ACTING SECRETARY OF STATE

Secretary BALL. I returned from overseas last night and on the plane I prepared a very short statement which addresses itself only to the more specific aspects of the problem. I recognize that there are larger implications. I shall, of course, be happy to discuss with the committee any aspects of the problem which it is interested in.

I appear this morning to present the views of the Department of State with regard to S. 2310. It is our view that this proposed legislation would not be in the national interest.

The bill as drafted would prohibit the Export-Import Bank or any agency of this Government from guaranteeing the payment of any obligation incurred by a Communist country or from extending credit to any such country in connection with the purchase of any American product.

To understand the consequences of this proposed legislation, one must examine the purposes served by the Export-Import Bank. The Bank has a central objective-to assist U.S. producers to sell their goods on foreign markets of the world. Selling goods for export is a highly competitive business, and every major Western industrialized country provides some governmental financial mechanism to facilitate such sales.

The Export-Import Bank has two principal methods of operation. First, it makes loans to foreign purchasers to finance the purchase of U.S. goods.

Second, it makes it possible for U.S. exporters to finance commercial sales by guaranteeing the short-term credits normally involved in such transactions. In practice short-term loans are made by com