In Africa, about 40% of the proposed $92 million Development Loan program will be for regional and multidonor infrastructure and agricultural projects. Almost all of the remainder will finance industrial raw materials, infrastructure projects in transport and agriculture, and assistance to development banks in the ten development emphasis countries.

The $438 million authorization requested for Alliance for Progress Development Loans would support a FY 1970 program of $483 million. $340 million is for Brazil, Colombia and Chile; another $31 million is for contributions to InterAmerican Organizations and other regional programs.

The proposed Alliance lending program will be heavily focused on the key priority areas of education and private industrial and agricultural productivity in each of the major recipients.

Of the total funds proposed for Development Loans, including Alliance loans, $424 million is planned to help increase agricultural production. Over half of that is for imports of U.S. fertilizer. Most of the remainder is for imports of U.S. goods needed for industry-overwhelmingly for materials needed for production by privately owned businesses in the developing nations.

Supporting assistance

Supporting Assistance helps countries maintain political or economic stability, primarily in situations where vital U.S. security interests are involved. The $515 million authorization request for FY 1970 would fund a program of $578 million. Most of this amount-$511 million-is for Vietnam ($440 million), Laos ($36 million) and Thailand ($35 million). Of the balance, nearly $20 million will support the U.N. peacekeeping force in Cyprus and the UNRWA program for Middle East refugees.

Other requests

The remaining authorization requests are:

$40 million for the Contingency Fund,

$13 million for American School and Hospitals Abroad,

$7.5 million for grants for the Indus Basin Development Fund, and
$54.3 million for A.I.D. Administrative Expenses.

Mr. Chairman, we believe, and we hope you agree, that the $2.2 billion authorization requested by the President for economic assistance is the minimum contribution required to help fashion a better and more peaceful world for all mankind and for the yet unborn children who will bear the consequences of our decisions.

CRITICISM OF MILITARY ASSISTANCE PROGRAM

The CHAIRMAN. Mr. Secretary, and Dr. Hannah, I am sure you are not unaware of the fact that a great many people recently have been questioning the overall policy of our country, and with special emphasis, I think, upon our aid which is supporting military regimes in many parts of the world.

We had testimony the other day in the subcommittee on Latin America to this effect and it was seriously questioned whether or not it is in the interests of this country to continue the military assistance program. So I think with that as the background, some of our questions maybe should be more searching than usual. The question is what is the role, as you mentioned yourself, what is the proper role of this country, and whether or not in trying to be helpful, since we have had to deal, or we thought we had to deal, with existing regimes in the respective countries, our aid has had the effect of preventing any normal change that might come about in many countries that still have more or less feudal social and political institutions. This is a dilemma that is certainly not attributed to you but it is a question that is in the minds of many of us, and has been brought out in other hearings.

INTEREST RATES ON DEVELOPMENT LOANS

There are a few specific cases that I would like to raise. For example, the present difficulty with interest rates. The interest rate on the development loans for the 10-year grace period is 2 percent and 3 percent thereafter. As you know, the prime rate in this country is now 811⁄2 and there was talk in the morning paper of it going higher. This raises a very serious problem. Don't you agree, Mr. Secretary? Secretary ROGERS. Yes, I think it does.

The CHAIRMAN. When this program began, the interest rates in this country hovered around 3 percent, 32, or 4 percent. Now it is 82, and going higher.

Secretary ROGERS. It makes the loans a little softer, there is no doubt about that. But I do not think it affects the basic premise of our assistance.

The CHAIRMAN. You do not think that is sufficiently important assuming the program is in our interest?

IS SUPPORT OF MILITARY REGIME IN OUR INTEREST?

Do you have anything to say about my first comment as to whether or not it really is in our interest to go about the world propping up regimes of various kinds whether they be civilian or not-in many cases military regimes? We have the most recent case of the colonels in Greece. We have given substantial assistance to them. We support military regimes in many places in South America. Is this really in the interests of ourselves and of those countries? I think this is a very serious question.

Secretary ROGERS. Mr. Chairman, I think you point out the dilemma. The dilemma is if we assist countries in improving their standard of living, improving their educational opportunities, and so forth, we do, in effect, I suppose, give some support to the government in office. But that certainly is not the purpose of the aid, and

The CHAIRMAN. Well, I know that.

Secretary ROGERS. I think in the long run that people in the countries that receive the assistance will come to appreciate the spirit in which our assistance is given.

The CHAIRMAN. This is a difference of opinion. This is where there is a difference of opinion, and when we look at our relations around the world, there is a feeling in some circles that the respect toward this country or affection or whatever you want to call it, has not been very satisfactory recently. It has never been at a lower level in a sense.

Countries that have long been our friends question our wisdom. I do not mean to leave the impression that all of this dissatisfaction is attributable to aid, but aid is part of the overall program.

TRAINING FOREIGN MILITARY PERSONNEL

I want to raise a question of interest to me. The Defense Department plans to spend $41 million in training about 10,000 foreign military men next year. Most of these men will be trained in the United States, some in our colleges. In contrast, the budget for the State Department's Educational and Cultural Affairs Bureau next year is only a $35 million request, divided among some 47 different countries. In the

last 20 years, 196,000 foreign military men were brought tothe United States for training.

In contrast to that, during a similar period only 90,000 civilians, less than half, have been brought to this country under the educational exchange program.

Do you think this is a fair indication of the national interest in these two programs? Does this reflect our Nation's sense of priorities of what is important?

Secretary ROGERS. No; I do not and, of course, there are a lot of other expenditures made in the educational and cultural field that are not reflected in our budget in the State Department. But I support your thesis that we should have more money for educational and cultural affairs particularly in the State Department, and I would hope next year we could even increase our budget for that purpose.

The CHAIRMAN. That is a hope of next year. I see no reason now why, in view of our experience with these military regimes, that you seem to feel that this is in our interest and we propose to continue it at a relatively high level. I am afraid I cannot agree with that and I do not know what the committee will think of it.

news,

APPROPRIATION FOR SPANISH BASES AGREEMENT

Now, with regard to a more specific case recently very much in the and about which this committee has had some communication with you, is the base agreement with Spain. Do you consider that in the base extension agreement which you signed just recently with the Spanish Foreign Minister, that the Congress is obligated in any way to authorize the military aid to pay for that agreement?

Secretary ROGERS. No. We made it clear to the Spanish Government that anything that we signed by way of an agreement required appropriations from the Congress before it could be carried out. So there is no doubt in anybody's mind on that subject.

The CHAIRMAN. Do you think that the integrity of this country is in any way impaired if we do not provide that money?

Secretary ROGERS. The integrity of the country?

The CHAIRMAN. Yes; are we morally committed, in other words? If we turn the appropriation request down, is it as if it were ab initio without any obligations?

I wrote to you, if you will recall, and suggested that if you were going to have an agreement, it should be in the form of a treaty in which this Congress, under our Constitution approves it and, therefore, we would be obligated, I think, to implement it. I, and other Members of this body, as you know, suggested that we thought there was no need for this base extension, that it had outrun its usefulness. I do not need to go over all the argument, but the administration decided to go ahead with this agreement in any case.

Secretary ROGERS. Yes.

The CHAIRMAN. Now, as in the past, they made the argument that we are committed, leaving us in all honesty, unable to back out of such an agreement.

I was just asking what was your position today, what do you think our position would be, if we refused to appropriate the $50 million? Secretary ROGERS. I do not think the integrity of the country would be affected. We made it clear to the Spanish Government that that

agreement could only be implemented, carried out, if the Congress appropriated the necessary money. I might be a little embarrassed myself, but it would not affect the integrity of the country in any sense of the word.

I might say, Mr. Chairman, in your letter you indicated to me you hoped that we would either do this in the form of a treaty or that we would include the request for the appropriation in the military assistance program as distinguished from the defense budget, and we did that, because I do think this committee should have a chance to consider it.

The CHAIRMAN. Mr. Secretary, I thought the letter conveyed that if you did it, it ought to be in the form of a treaty, particularly because of the implications arising from General Wheeler's statement with regard to our presence there. Didn't I make that plain? I thought it would be preferable to be in treaty form.

Secretary ROGERS. You made it plain you hoped we would have it a treaty, but that if we did not have it in a treaty we would have it by military assistance.

The CHAIRMAN. I cannot force you to do it by treaty. All I have is a vote. But in any case you believe we are entirely free to exercise our judgment as to whether or not we should put up the $50 million? Secretary RoGers. Yes.

AID TO SPAIN IN SPITE OF TRADE WITH CUBA

The CHAIRMAN. One other point. Section 620 (a) (3) of the bill prohibits aid to any country which continues to trade with Cuba. I understand that Spain had trade of $62 million with Cuba last year. How can military aid to Spain be justified in view of that provision?

Secretary ROGERS. Mr. Chairman, as you know, we have not amended the budget to include the Spanish appropriations. We will do that and we will be prepared to discuss that at a later day, but that is not included in our appropriation request at the present time. The CHAIRMAN. What are you going to do about section 620 (a) (3) ? Are you going to ask that it be repealed?

Secretary ROGERS. Well, as I say, I would like to discuss it at the time we amend the budget to include the request for the Spanish bases. The CHAIRMAN. It may be time that you do repeal it and that we try to normalize our relations with Cuba, and if the administration wishes to do that and recommends it, we certainly will give it most serious consideration. But as long as that is the policy and it applies to everyone else, why should you make an exception for Spain?

Secretary ROGERS. We are prepared to discuss that when we discuss the appropriations for the Spanish bases.

TREATY WITH THAILAND

The CHAIRMAN. Now, there is one other case, and then I will desist to allow my confreres to ask questions. I want to ask you, because it has implications that involve the AID program very much, about the agreement which was discussed in the press on the 11th by Mr. McCloskey, one of the State Department's spokesmen, the agreement with Thailand. It is in some ways apparently quite similar to the

Spanish one, involving a considerable amount of money if what we do know about it is correct, considerably more money than for Spain.

Are you going to make available to the committee a copy of that agreement, the one referred to by Mr. McCloskey and also Mr. Kittikachorn in the interview the other day?

Secretary ROGERS. Mr. Chairman, we will make available to the committee every document we have, but I do not want to leave the impression that we have any commitment to Thailand other than the one that is represented by the SEATO Treaty. Now these other documents that you have reference to, as I understand it, were contingency plans that were discussed and worked on in 1964 or 1965. There is no doubt we will make available all the documents that we have on this subject. The CHAIRMAN. Maybe it is the Pentagon that has it because actually the one I have reference to was signed in the final analysis by General Stilwell, not by you or your predecessor.

Secretary ROGERS. Stillwell?

The CHAIRMAN. Stilwell, the younger General Stilwell, the son, I guess it is the son, of the old general who was in World War II. Secretary ROGERS. Yes.

The CHAIRMAN. Maybe you do not have it, but if you do not, can you procure it for us?

Secretary ROGERS. Yes. I am sure I can. But, Mr. Chairman, there is no doubt in anyone's mind that the General has not or anyone else in the military has not any authority to make any agreements with another country on military commitments.

The CHAIRMAN. I do not think he has authority but they undertake to do it anyway. I do not believe under proper constitutional proce dure in an undertaking of that consequence that a General does have authority. And I do not think the Secretary of State has authority to do it without the concurrence of the Senate. The agreement ought to be in the form of a treaty or at least a joint resolution, it seems to me. This is what we have been arguing about.

FULL TEXT OF THAILAND DOCUMENT REQUESTED

Now, you say he does not have the authority. What we are interested in at this point is, did they really sign an agreement which undertakes to supply a large number of forces in case of certain contingencies, which I do not believe, if I understand it, is in accord with SEATO? You are assuming the very point at question. This is why we want to see it ourselves and have an opportunity to make up our own minds whether it is in accord with SEATO. All we have, as you know, is not the agreement, but a description of the agreement, which was obtained in the course of our staff's work, and I think we ought to have the full text of the document and make up our minds ourselves as to whether it is in accord with SEATO.

You know there has been a great difference of opinion as to whether our obligations in Vietnam were in accord with SEATO. There have been honest differences of opinion. At the barest minimum, it seems to me, the committee is entitled to have whatever has been signed by either the representative of the State Department or the Defense Department. It seems a little strange to me that this was not at least signed by the Secretary of State.