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Mr. Chairman, I appreciate the opportunity to appear before this distinguished committee in its deliberations of H.R. 10710, "The Trade Reform Act of 1973."

I voted with the majority of the House of Representatives when it passed the bill last December 19th (272-140). Prior to that final passage, I voted for the Freedom of Emigration Amendment to Title IV. This was a critical amendment. It would have the effect of cutting off further U.S. Government credits to finance American exports to the Soviet Union. And it would deny the Soviet Union the most favored nation status it seeks on behalf of its export to this country, unless Soviet leaders allowed free emigration of their citizens.

Through all of the latest Moscow-originated public relations talk, handshaking, smiling phototgraphs, and carefully-gauged communiques, one chilling fact penetrates loud and clear:

Henry Kissinger has returned without agreement on that all important second stage of nuclear strategic arms limitations (SALT II).

It is my understanding that, in diplomacy, as in law, a quid pro quo is basic to any sincere relationship.

I suggest that, for all of the talk of improved relationship with the Soviet Union, I find little indication that the Soviet leaders are giving us anything but ominous threats covered but thinly with a bit of double talk here and there.

With all the window dressing ripped away, this is the "something" that we can expect to receive from them in return for the ever-broadening range of concessions, subsidies—even gifts—that they continue to receive from us.

There is, therefore, an urgent need for us to separate the hard, cold facts of "detente" from the deadly euphoria of "detente.”

It is my purpose, today, to call this Committee's attention to what I consider the most ominous symptom of the total “detene" syndrome: The manner in which U.S. and British computer technology, together with other U.S. technology, continues to make its massive contribution to the continued buildup of an ever-more-sophisticated and deadly Soviet war machine.

For example: We know that U.S. and British computer technology has enabled the Soviet leaders to advance development of their feared MIRVS from two to four years.

This bill, with its Freedom of Emigration Amendment, will have the effect of, at least, slowing down this dangerous outflow of our most advanced technology into the ever-growing Soviet war machine.

Lenin boasted : "When the moment comes for the hanging of capitalism, the capitalists will bid for the hemp."

As a consequence of White House-demanded Congressional relaxation of export controls in behalf of the Soviet Union, all too many U.S. corporations have stumbled over themselves in their unwitting eagerness to prove correct Lenin's ominous prophecy.

This is no credit to the long-range intelligence of corporate leaders. It is even lesser credit to the leaders of our Government who, lulled by their own rhetoric about "detente," have lost contact with the realities of communism, its ways and wiles, and its ultimate goal : World domination.

These leaders have ignored, certainly, the definition of "detente" given, last September, by Soviet Communist Party Chairman Leonid Brezhnev to his Politburo and to East European Communist Party leaders.

As summarized by U.S. Defense and State Department officials the Brezhnev definition is this:

"To the Soviet Union, the policy of accommodation does represent a tactical policy shift. Over the next 15 or so years, the Soviet Union intends to puruse accords with the West and at the same time build up its own economic and military strength.

"At the end of this period, in about the middle nineteen-eighties, the strength of the Soviet bloc will have increased to the point at which the Soviet Union, instead of relying on accords, could establish an independent, superior position in its dealings with the West."

Actually, there was nothing new about the Brezhnev thesis. From the beginning, Soviet Leaders have often changed tactics; but only as a temporary means toward achievement of their ultimate goal.

That, at least in 1968, Dr. Henry Kissinger appeared to understand these basic Marxist-Leninist tenents and tactics was suggested by certain of the statements which he set forth.

Only last Tuesday, a Washington Star-News analysis reminded us of this 1968 Kissinger quotation :

“There have been at least five periods of peaceful coexistence since the Bolshevik seizure of power, one in each decade of the Soviet state. Each was hailed in the West as ushering in a new era of reconciliation and as signify. ing the long-awaited final change in Soviet purposes.

"Each ended abruptly with a new period of intransigence, which was generally ascribed to a victory of Soviet hardliners rather than to the dynamics of the system."

Referring to Dr. Kissinger's latest mission to Moscow, the Star-Neros analysis added this observation :

"Secretary of State Henry A. Kissinger's scene-setting mission is surrounded with the diplomatic trappings of great events in the making and major achievements within reach. But the signs are abundant that the current stage of the U.S.-Soviet detente is reaching the end of a phase, and that the current 'era of reconciliation' is nearing the natural close."

It is most significant that this observation was written on the same day that the news wires were carrying glowing accounts from Moscow of how the American Secretary of State and Soviet Communist Party Chairman Brezhnev had publicly vowed that their so-called "detente" was "irreversible."

Much less reported was the infinitely more significant statement by Mr. Brezhnev that the "alternative" to detente “is war."

Unfortunately, just as this so-called "detente" is on Mr. Brezhnev's terms, so would be the “alternatives." It would be his "war."

One of Communism's oldest, most basic tenents is that the Communist Party must never engage in so-called "adventurism"; that is, a Communist power must never start a war without advance assurance of victory. Like his prede cessors, Mr. Brezhnev continues to build for the day when his unleasing of Soviet military might against us will enjoy such advance assurance.

Unfortunately, laymen-in government, the media, the public continue to think of military power in the traditional terms of guns, and planes, and tanks, and ships, and bombs—including nuclear bombs. We fail to appreciate that the very heart of latter 20th Century weaponry is the computer.

Told that U.S. computers are being sold to the Soviet Union, most Americans feel no alarm. But they should.

The computer is not simply a calculating machine. It is an entire system. Big operational structures such as missile forces, require computers; so do ships, airplanes, missiles and space vehicles.

Until recently, direct export of U.S. computers was restricted by export control regulations. Even so, the origin of today's Soviet systems can be traced to the United States. Following World War Two, the Soviet Union received computers almost entirely from West European plants of IBM.

The earliest American computer sale to the Soviet Union that can be traced was a Model 802 National-Elliott sold in 1959 by Elliott Automation, Ltd., of the l'nited Kingdom. National-Elliott is a General Electric subsidiary.

In 1966, Standard Cables and Telegraph, Ltd. installed a Standard 715 instrument landing system at Moscow's D. Sheremetyeva Airport. Standard Cables was then a subsidiary of ITT.

In 1968, a second-generation Control Data Corporation 1604 System was installed at the Dubna Soviet Nuclear Facility near Moscow.

In 1972, Control Data sold the Soviet l’nion a third-generation CDC 6200 system computer.

For these systems, Control Data's operating statement has improved by about $3 million in sales over the past three years. And the Soviet l'nion has gained 15 years in computer technology.

As 1969 ended, it was estimated that Western computer sales to all of Communist Europe and the U.S.S.R. were running at $40 million per annum. In great part, three came from American subsidiaries.

In 18 months during 1964-65, Elliott Automation delivered five Model 503 computers to the U.S.S.R. The Elliott 503 ranged in price from $179,000 to more than $1 million, depending on its size.

By the end of 1969, General Electric-Elliott Automation sales to Communist countries were four times greater than in 1968.

This market accounted for one-third of General Electric-Elliott's computer exports. Other G.E. machines, including a Model 400 made in France by Compagnie des Machines Bull, were also sold to the U.S.S.R.

Livetti-General Electirc of Milan, Italy, also has been a major U.S.S.R. supplier of G.E. computers.

In 1967, Olivetti delivered $2.4 million worth of data processing systems to the U.S.S.R. This was in addition to Model 400 and Model 115 machines already sold.

In 1967, English Electric sold the U.S.S.R, its System Four Machine with microcircuits. This machine incorporated RCA patents. It was similar to the RCA Spectra 70 series.

Over the years, the U.S.S.R.'s largest single supplier of computers has been International Computers and Tabulation, Ltd. of the United Kingdom. The latter also licenses RCA technology. It has supplied at least 27 of 33 large computers to the Soviet Union.

In November, 1969, five of the firm's 1900 series computers valued at $12 million, went to the U.S.S.R.: These were large, high-speed uints with integrated circuits. Without question, they were well in advance of anything the Soviets were able to manufacture in the computer field; even by copying previously-imported technology.

These machines are capable of solving military and space problems. But, being machines, they cannot distinguish between military and civilian problems. There is no way that a Western firm or government can prevent Soviet use of computers for military work.

In 1970–71, came the ultimate insult:

The Soviets indicated that if International Computers, Ltd. of Great Britain was allowed to sell two big, fast, highly-sophisticated 1906A computers, American scientists would be allowed to participate in further research at the Serpukhov Institute of High Energy Physics. The key equipment at Serpukhov, including the bubble chamber, had come from the West.

The Soviets gave "ironclad” guarantees not to use these new British (RCA) 1906A computers for military research. Personal intervention by President Nixon forced a relaxation of U.S. opposition to the British sale. But, gentlemen, Mr. Nixon has not yet indicated how he proposes to prevent the Soviets from using the 1906A for military purposes against us.

Business Week of April 28, 1973, published word that the Soviet Union had contracted for an IBM third-generation 370 computer system. The price: A reported $10 million.

According to the Washington Post of July 6, 1973, and the Wall Street Journal of August 8, 1973, James Binger, Chairman, Honeywell Incorporated, Minneapolis, told a Moscow news conference his firm had begun negotiation with the Soviet government on two contracts involving several million dollars.

During a recent aviation-space industries exhibition, Soviet interests were noted. U.S. companies at the exhibition included : Westinghouse Electric Corporation, Bendix Corporation, Collins Radio Company, Texas Instruments, Inc., Boeing Corporation, United Aircraft Corporation. Lockheed Aircraft Corporation, Raytheon Corporation.

0.8. News and World Report of January 28, 1974, said International Business Machines and the Univac Division of Sperry-Rand were competing in two areas for contracts for two data systems for Soviet aviation.

Red Star, the official organ of the Soviet Army used the Remington-Rand Univac computer to illustrate an article on Soviet computers with captions translated into the Russian language.

In Science magazine of February 8, 1974, Mr. Wade B. Holland, Editor, Rand Corporation's Soviet Cybernetics Review, stated :

"There are no rigid standards. Getting a license to export depends on how much weight you can throw or whether your timing is right, like if Nixon has just made a visit to Moscow."

Even as I am worried about the export of computer technology to the Soviet war machine, I am worried about export of precision grinding machines for manufacture of precision miniature ball bearings.

Ball bearings are an integral part of many weapons systems; there is no substitute. The entire Soviet ball bearing production capability is of Western origin. All Soviet tanks, all Soviet military vehicles, run on ball bearings manufactured on Western equipment or on copies of Western equipment.

All Soviet missles, all Soviet related systems—including guidance systems, have bearings manufactured on Western equipment-or on Soviet duplicates of Western equipment.

Bryant Chucking Grinding Company, Springfield, Vermont, has been a major supplier of ball bearings processing equipment to the Soviet Union.

In the 1930s, when the U.S. Government and corporations were providing massive infusions of industrial technology into the Soviet Union, Bryant shipped 32.2% of its output to the U.S.S.R. In 1934, Bryant shipped 55.3% of its output to the U.S.S.R.

In 1959, under the then slightly relaxed restrictions commensurate with Khrushchev-decreed "peaceful coexistence," Bryant was able to sell 46 Centalign B machines to the U.S.S.R. In 1960, the U.S.S.R. placed an order for 45 similar Bryant machines. The U.S. Department of Commerce indicated willingness to grant Bryant an export license. Bryant accepted the order. It was not filled, however, because of Defense Department objections that the machines would be used for production of bearings utilized in strategic components for Soviet military end items.

The Bryant-Commerce Department effort to export the Bryant machinery resulted in an investigation by the U.S. Senate Subcommittee on Internal Security. The Subcommittee's report stated :

"We are now concerned ... the decision to grant the license was a grave error."

Yet, in 1972, the Commerce and State Departments approved Bryant's export to the Soviet Union of 164 precision grinding machines of a new-generation so sophisticated as to be able to manufacture miniature ball bearings to tolerances of 25th millionth of an inch.

If this, in itself, is not a bit chilling to those who recognize the importance of such precision equipment in the hands of the Soviet Union permit me to add the information that while, in that manner, the Soviet's war machine gained 164 of these machines; while the United States, reportedly has never owned more than 77 of them.

Recent reports about agreements signed by General Dynamics Corporation with the Soviet State Committee for Science and Technology are also disturbing. The five-year agreement for scientific and technological cooperation covers such defense-related fields as ships and shipbuilding, telecommunications equipment, asbestos mining and processing, commercial and special purpose aircraft, computer-operated microfilm equipment, and navigations and water buoys.

Also upsetting is Fairchild Corporation's agreement with Communist Poland for sale of U.S. integrated circuit technology used extensively in modern weapons systems and in third-generation computers.

The February, 1974 issue of Armed Forces Journal International reports this: The Soviets are asking major U.S. aerospace firms (Boeing, Lockheed, McDonald-Douglas) to sell them, on a major scale, the manufacturing technology and managerial expertise to build wide-bodied commercial jet liners.

Development of the Kama River truck factory will undoubtedly contribute further to Soviet military capability. Quite obviously any truck ean haul troops and ammunition to the front as easily as it can transport corn from the field.

In the Soviet view, the competition between Communism and U.S.-based non-Communism for scientific and technological superiority relates especially to direct military power. For there, as Soviet leaders have always seen it, rests the key to their ultimate goal of world domination. It follows, therefore, that strengthening the Soviet armed forces must forever have first call on all scientific-technological resources and capabilities.

Because, again and again, Soviet scientific-technological resource capabilities have ranged from inadequate to dismal failure. U.S.-based superior resources have been tapped. As they have been, so shall they continue to be

unless the Congress of the United States shuts off the supply of this which, like the U.S. scrap metal of the 1930s, must one-day find its end result in a Soviet-inflicted nuclear Pearl Harbor.

I respectfully commend this problem to the attention of this Committee. I do so with great concern. I do so in the hope that serious consideration be given to badly-needed legislation to bring an end to what should never have been started : Provision to the Soviet Union and other Communist countries of anything which, by any stretch of the imagination, could possibly be used for military purposes against us.

Mr. Chairman, again, I thank you for this opportunity. I thank the Committee for its attention. I request, most sincerely, serious consideration to the facts which I have set forth, and to my plea for sanity in the name of U.S. freedom.

Congress of the United States, House of Representatives,

Washington, D.C., April 3, 1974. Hox. BOB PACKWOOD, Senate Office Building, Washington, D.C.

DEAR SENATOR PACKWOOD : During my April 1st appearance before the Senate Finance Committee, a question arose regarding the financing of our trade with the USSR.

In responding to the question, I stressed that credits being extended to the Soviet Union by the U.S. Export-Import Bank are not granted on terms and conditions equally applicable to all countries.

Export-Import Bank President William J. Casey had testified that the Soviets had not been required to submit financial data that would be required of a normal borrower.

It should also be pointed out that the United States is allowing far more generous terms in its credits to the Soviets than are any of the European countries. The Export-Import Bank interest rate charged to the Soviet Union is 6%. Analogous European financial institutions have been charging at least two to three percent more.

In my response to the question regarding absolute Soviet secrecy and refusal to disclose basic financial data I mentioned the June 30th Business Week interview with Soviet Deputy Trade Minister Vladimir S. Alkhimov in which he expressed Soviet policy regarding disclosure of Soviet reserves and other financial information. I have enclosed a copy of this revealing interview for your consideration. Sincerely yours,


Member of Congress,

Fourth District-Georgia. Enclosure.

From Business Week, June 30, 1973

Before the summit, Soviet Deputy Trade Minister Vladimir S. Alkhimov spent more than a month in the U.S. talking with businessmen and officials. In the following interview with BUSINESS WEEK, he discussed Soviet industrial projects and financing of U.S.-Soviet trade.

Question. What will the agreement with Occidental Petroleum to build a fertilizer complex mean for American business?

Alkhimov. There will be contracts for many American companies. This is a very big project. There will be pipelines from the Volga River to bring ammonia to the Baltic Sea, and another pipeline to Odessa on the Black Sea to receive Occidental's superphosphoric acid. We can produce ammonia and urea competitively, but we need superphosphates. (Occidental Chairman Armand] Hammer has the superphosphates, of course, which is a key part of the project. But we will need a great deal of equipment.

What is the status of the proposed liquefied natural gas joint ventures?

As you know, Hammer and (Chairman Howard] Boyd of El Paso Natural Gas Co. have signed a letter of intent with us, and we will go ahead and investigate the feasibility of the Yakutsk project. Nothing has been signed yet for

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