of monthly income rather than a fixed rate of return. He was most encouraging to us about this. Senator McGOVERN. Thank you very much, Mr. Miller. Mr. MILLER. Thank you, sir. Senator McGOVERN. I believe that completes our list of witnesses, but the hearing record will remain open until Friday noon for any additional statements. (Whereupon, at 4:30 p.m., the committee adjourned.) (Additional statements filed for the record are as follows:) STATEMENT FILED BY HON. JACOB K. JAVITS, A U.S. SENATOR FROM THE STATE OF NEW YORK I appreciate this opportunity to submit a statement in support of my bill, S. 1498, which would amend section 304 (a) of the Agricultural Trade Development and Assistance Act of 1954 to (1) provide for the use of title I of the act for "alternative marketing and purchasing opportunities" to assist friendly nations to be independent of trade with the Soviet bloc and (2) add areas and nations dominated or controlled by the Communist regime in China to the countries from which the United States would seek to assist friendly nations to be independent in their trade. This bill is designed to strength U.S. policies to lessen the dependence of nonCommunist countries trading with the Soviet block. Experience clearly indicates that Soviet bloc trade with developing nations is designed to disrupt the rational movement of trade between the industrialized West and the new nations seeking economic development. Opportunities for such disruptive operations are ever present. While we are assured by the Departments of Agriculture and State that considerable use is made of title I, Public Law 480 authority to assist friendly nations to be independent of trade with the Soviet bloc through the sale of surplus agricultural commodities for local currency, we must constantly press for new methods which would make the use of this authority more effective. The present language in section 304 (a) states only that the President shall exercise the authority contained in title I of this act to assist such friendly nations to be independent of trade with the U.S.S.R. or its satellites without specifically stating how such assistance may be carried out. The Departments of Agriculture and State object to the first provision on the ground that the addition of the proposed language would raise practical difficulties in that it may give rise to the belief in friendly countries that the United States is about to embark on a major campaign of preemptive buying of commodities throughout the world by the use of title I proceeds. I believe this problem could be avoided by deleting the words "provisions for" on line 6 of S. 1498 and substituting therefore the words "assistance toward planning for." Such language would make the intention of the United States entirely clear: it would stand ready to assist friendly nations to be independent of trade with the Communist bloc of nations by assisting them to find alternative markets for products they may be compelled to dispose of in the Communist bloc. If a developing nation runs into trouble with any Communist-bloc or Communist-blocdominated nation, because it is taking a pro-Western position, such a provision in the act would make it possible for the United States to assist such countries to find markets for their products in Western Europe, in the United States or elsewhere in the free world through such means as the provision of market information, marketing experts and possibly the use of credit. Also, I urge the committee to give favorable consideration to the inclusion of the provision which would add areas dominated or controlled by Communist China to section 304 (a) of the act. The inclusion of this provision in the act has the favorable support of both the Departments of Agriculture and State as they consider this change as useful and desirable and entirely consistent with U.S. policy. STATEMENT FILED BY WALTER A. HASTY, JR., ASSISTANT DIRECTOR, Mr. Chairman, members of the committee, I sincerely appreciate this opportunity to appear before you today on behalf of the more than 750,000 family farm members of National Farmers Union. On behalf of these members who are truly farmers, I urge your support of a 5-year extension of titles I and II of Public Law 480. You, Mr. Chairman, along with the members of your committee are due a vote of thanks by farmers and city people alike for the contribution you have made to the utilization of our abundant food and fiber. The positive concept of using our food abundance as a weapon for peace in a hungry world as contrasted with the concept of a surplus disposal operation has stimulated many significant accomplishments. We are very pleased that the President and the Secretary of Agriculture have made it clear that they view agricultural abundance as a national blessing and they have and continue to use this abundance under the food for peace program in a positive manner. The program has operated on a substantial basis since 1954 but the short-term extension of the law has severely limited our ability to plan ahead. We have not been able, therefore, to use food and fiber to the extent that we believe possible as a tool for promoting economic growth and development in the many areas of the world where it is badly needed. A 5-year extension is desirable, we believe, because programs can be planned further in advance and commodities moved in a more orderly manner. It will help the underdeveloped countries because they can plan ahead and make much more judicious use of the commodities to feed their population and the foreign currencies generated for economic projects. We further believe it is more practicable for the United States and foreign countries to make plans over a longer period of time so that more extensive use can also be made of transportation, storage and distribution facilities. We believe most of all that the merits of the program based on its past accomplishments warrants this 5-year extension. We, therefore, urge you to give this proposal favorable consideration. In closing, Mr. Chairman, I want to thank the committee for the leadership that you have given to what has come to be fondly referred to, as the best known food label in the world, "Food for Peace." STATEMENT FILED BY KEN KENDRICK, EXECUTIVE VICE PRESIDENT, Mr. Chairman, I am pleased to have this opportunity to appear before the committee in behalf of the extension of titles I and II of the Agricultural Trade Development and Assistance Act of 1954. Public Law 480 has been a success by almost any yardstick by which it is measured. It has reduced surpluses of agricultural commodities, and strengthened farm income. It has been a stimulus to business and the U.S. economy. It has produced thousands of jobs on farms, in export firms, in processing plants, and businesses all over the country that serve farm communities. The matter of the extension of Public Law 480 is of vital importance, not only to the economy of the United States, but also for economic as well as social and political development of nations with whom we trade. Not to extend the life of Public Law 480, or to phase it out too rapidly would be denying many nations the opportunity to grow and develop that we gave to Italy, Spain, Germany, Japan, and others when they so desperately needed help. These nations have become some of our strongest allies, as well as our best dollar customers. The economy of the United States in general, and agriculture in particular, is becoming more and more dependent upon foreign trade. Public Law 480 was responsible to a large degree for the rapid postwar recovery of many nations. It is just as necessary at this time to fill the needs of the many emerging nations throughout the world. American wheat producers have practiced considerable restraint in the planting and production of wheat during the past several years, and without the use of Public Law 480, our wheat surpluses would have undoubtedly reached unmanageable proportions, thereby causing unduly low returns to wheat producers, and adversely affecting many other segments of our economy. We must have a market for the things we produce. A great many of our markets have been developed through this instrument. Failure to extend Public Law 480 at this time would be disastrous to our agriculture, our balance of pay ments, and to millions of people throughout the world upon whom we depend and who depend upon us. The National Association of Wheat Growers feels that it is imperative to extend Public Law 480 for the following reasons: 1. To continue to boost the expansion of markets for our agricultural products, and by so doing, maintain a sound and healthy American agricultural economy as well as assist in our balance of payments. 2. Strengthen the economy of less developed countries and provide them with the incentive to resist aggression. 3. Create good will for the United States from the countries we are helping to feed and aid them in approaching economic stability. 4. Showing uncommitted countries that free U.S. agriculture is more efficient than regimented Communist agriculture. American agriculture cannot stand still. We cannot reverse the forces of efficiency and technology that have developed in agriculture in recent years without serious injury to our entire economy. The fact is that American agriculture simply has the ability to produce more than the market will take, in spite of the fact that many commodities have made substantial reductions in the acreage sown in recent years. Public Law 480 has served agriculture and the Nation The National Association of Wheat Growers recommends well the past 10 years. its extension. Hon. ALLEN J. ELLENDER, WASHINGTON, D.C., August 12, 1964. Chairman, Senate Committee on Agriculture and Forestry, DEAR SENATOR ELLENDER: Since the inception of the Agricultural Trade Development and Assistance Act of 1954, the National Cotton Council has supported the legislation as a temporary means of disposing of current agricultural surpluses and as a basis for aiding friendly countries which do not have sufficient dollars to finance their import requirements of cotton. The delegate body of the council passed the following resolutions with respect to Public Law 480 at the council's last annual meeting in Biloxi, Miss., January 27 to 18, 1964: (a) That the council reiterate its belief that, in view of the continuing critical imbalance of foreign payments, U.S. foreign aid programs, especially Public Law 480, should be examined critically and, to the maximum extent possible, assistance to foreign countries should be extended through self-liquidating dollar credits, as in most cases exports for foreign currencies do not help our balanceof-payments situation to any significant degree. (b) That the council reaffirm its previous decisions to stimulate exports of U.S. cotton * * * by supporting the use of a reasonable amount of Government funds for *** market development programs abroad in accordance with current provisions of law. (c) That the council call attention to the fact that shipments of cotton under Public Law 480 are frequently processed in third countries, and urge that as large an amount as possible of such processing be carried out in the United States. The council considers that Cotton Council International's programs to promote the consumption of cotton and cotton products in foreign countries have been highly effective. These programs have been, and are being, undertaken in collaboration with the U.S. Department of Agriculture pursuant to a provision of Public Law 480. We hope that the cooperative cotton market development programs abroad can be continued. In view of this, we urge that the market development provisions of Public Law 480 be continued without impairment. Furthermore, the council considers that it would benefit the U.S. textile industry and the U.S. economy if as large an amount as possible of Public Law 480 cotton which is approved for processing outside a recipient country was authorized for processing in the United States. Consequently, we hope that the Public Law 480 program can be designed or administered to accomplish this worthy objective. We respectfully request that this letter be included in the records of your committee, so that our views will be known by the other members of your committee. Favorable consideration of our position would be greatly appreciated. Sincerely, CARL C. CAMPBELL, Assistant Director, Foreign Trade Division, National Cotton Council of America. Hon. ALLEN J. ELLENDER, WASHINGTON, D.C., AUGUST 12, 1964. Chairman, Committee on Agriculture and Forestry, U.S. Senate, Washington, D.C. DEAR SENATOR ELLENDER: Public Law 480 has, since 1958, included a special provision, applicable only to cotton products, which effectively prevents U.S. textile mills from participating in the processing of 480 cotton. That provision reads as follows: "Provided, That that portion of the sales price of such products which is financed as a sale for foreign currency under title I of the Act shall be limited to the estimated portion of the sales price of such products attributable to the raw cotton content of such products." The result has been that low-wage countries-chiefly Japan-have received all of the business resulting from third-country processing of 480 cotton. In fiscal 1963, for example, 155,000 bales of 480 cotton were involved in triangular processing deals. Recipient countries were Vietnam, Indonesia, and Burma, with Japan processing 115,000 of the 155,000 bales. We urge that the language discriminatory against the U.S. textile industry be stricken in the Public Law 480 renewal authority now before your committee. We further request that U.S. processing be made mandatory in the future. This would create many additional jobs in the American textile industry. Respectfully, R. BUFORD BRANDIS, Foreign Trade Director, American Textile Manufacturers Institute. AUGUST 11, 1964. Hon. ALLEN J. ELLENDER, Chairman, Committee on Agriculture and Forestry, DEAR MR. CHAIRMAN: The American Maritime Association, representing owners and operators of American-flag vessels which rely heavily upon cargo financed under Public Law 480 for their survival, opposes legislation contemplated under paragraphs (2) and (6) (u) of S. 2687. Paragraph (2) of S. 2687 would amend section 102 of Public Law 480 by adding the following: "The Commodity Credit Corporation shall finance freight charges under this section only to the extent that such charges are higher (than would otherwise be the case) by reason of a requirement that the commodities be transported in United States-flag vessels." Under the terms of this provision, the financing of ocean freight by the Commodity Credit Corporation would be restricted to the amount of the differential between U.S.- and foreign-flag rates. This would require the purchasing country to pay for ocean freight services in dollars, at least up to the world market rate, since services must be paid for in usable currency. The result of this may very well be a reduction of agricultural sales, since some purchasing nations may be unable to pay hard currencies for ocean transportation. Certainly if this occurs the objective of Public Law 480 would be blunted, with both the agricultural and shipping segments of our economy suffering huge losses. The loss of agricultural cargoes by the U.S. merchant marine would deprive it of vital cargoes necessary for its survival. S. 2687 would also amend section 104 of the existing law by adding the following: (u) For the sale for dollars to privately owned U.S.-flag commercial vessels for use in paying port fees, unloading, lightering, and other necessary expenses in foreign ports in connection with the carrying of cargo under this act and section 9 of the act of September 6, 1958. Traditionally the ordering and utilization of services necessary in the performance of ship delivery functions abroad is subject to the control of the shipowner, whether he be American or foreign. Should the proposed legislation be enacted the moneys to be paid abroad for these services would be in local foreign currency. As a result there is a strong possibility that the control over the above-mentioned services would pass to the provider of the service rather than to the ship operator. Longshore service, berthing privileges, and the use of specialized equipment in foreign ports is now paid for in convertible currency. Should American-flag vessels be forced to pay for these services in inconvertible foreign currency while foreign-flag vessels continue to pay in hard, convertible currency it is quite likely that U.S.-flag vessels will end up being serviced last. In view of the fact that many of the ports where title I Public Law 480 cargo is being discharged are often congested and subject to many delays, the effect on U.S.-flag vessels would be disastrous. Should such delays occur higher costs will result. American-flag vessels would then be forced to pass these added costs on in the form of higher freight rates. In view of the problems which would ultimately arise should sections (2) and (6)(u) of S. 2687 be enacted, the American Maritime Association urges the Senate Committee on Agriculture and Forestry to reject the aforementioned sections in their consideration of S. 2687. The American Maritime Association requests that its views be incorporated in the hearing record. RAY R. MURDOCK, Legislative Director, American Maritime Association. STATEMENT FILED BY C. EDWARD BEHRE, POLICY COMMITTEE, My name is C. Edward Behre, 2 Gahent Road, Alexandria, Va. I am appear. ing as a member of the Policy Committee of the Friends Committee on National Legislation to support the revision and extension of Public Law 480 (the Agricultural Trade Development and Assistance Act of 1954). This testimony has been prepared in cooperation with E. Raymond Wilson, executive secretary emeritus of the FCNL, who had expected to testify had the hearings been held last week as originally scheduled. The Committee on Agriculture is well aware that the Friends Committee on National Legislation does not claim to speak for all Quakers in the United States. Nevertheless, the Friends Committee is widely representative of Friends in this country, and, on the question of maximum use of our agricultural abundance for humanitarian purposes throughout the world, Friends are as nearly united as they are on anything. The FCNL supported the general purposes of this legislation even before Public Law 480 was enacted 10 years ago. On various occasions it has worked strenuously for various amendments which have broadened the application of this act. We now wish to make five proposals for making this law more clearly and effectively an instrument of foreign policy for the promotion of human welfare and world peace. I. RESTATE THE PURPOSE Originally this law was directed almost exclusively toward the relief of American agriculture by disposal of agricultural surplus. In recent years the concept of food for peace has been increasingly emphasized. However, the purpose of using our agricultural abundance as an instrument of foreign policy for the promotion of human welfare and world peace can be stated more clearly and without equivocation. May we suggest that the title and section 2 be amended to read somewhat as follows (proposed preamble for Public Law 480): "An act to use American food and fiber to improve foreign relations of the United States, to relieve human hunger and to promote economic and social development throughout the world, to expand international trade, and for other purposes. "Be it enacted, etc. "SEC. 2. It is hereby declared to be the policy of Congress to expand international trade among the United States and other nations; to facilitate the convertibility of currency; to promote the national welfare and the economic stability of American agriculture by making maximum use of American agricultural abundance for the relief of human hunger and the promotion of adequate nutrition, for economic and social development, and for expansion of economic agricultural production in other countries, including its use in furthering the efforts and programs toward these ends of the United Nations, its specialized agencies and affiliated organizations; to purchase strategic materials; to pay U.S. obligations abroad; and to foster in other ways the foreign policy of the United States." In similar vein, we suggest that the justification for the humanitarian donation provisions of title III should be on a more statesmanlike basis than the |