be closed and that no solution can be found for the problem now being considered by the administration. But I present this only to bring to this group what you are already aware of that, unfortunately, it isn't always a question of black and white. What we are trying to do is to find a solution to this problem which will, at one and the same time, give our own people the opportunity to develop their economies, as they should, and will recognize the problems of other people in our economy and also of our friends and potential friends abroad.

In addition to trade, Latin America needs capital. And in this connection may I say that there is often a tendency to reach a snap conclusion which is probably wrong. You will read in the papers, you may hear from radio commentators, or from others who are speaking from the public platform, the suggestion that, at a time when we are appropriating huge sums of money and making grants to Europe and Asia, we ought to increase the appropriations for Latin America. And it is true that the amount of money appropriated for Latin America, in terms of grants, is very, very small. But, first, I would emphasize that, so far as capital is concerned, Latin America's greatest source for capital is not from government funds, either from this Government or from their own governments but is from private investment.

Take this ten-year period in which we have seen this tremendous economic development for Latin America. For every dollar in Government funds invested in the economy of Latin America, four dollars from private funds have been invested.

Now, how do you get private capital to come to this area? The answer is that political stability is needed and policies adopted by the individual Governments which will encourage private investment. And as you move through just the areas we traveled through, you can see the evidences of that investment once those policies are adopted. Mexico City today is a boom city. Managua, Nicaragua, is a boom city. San Juan, in Puerto Rico, is also a boom city. In each of these countries policies have been adopted which have encouraged and attracted private capital. Assuming those policies are continued in the future, I think great additional sources of private capital, from within the country and from without, are bound to follow and are bound to be tapped.

But there is, of course, a place for Government capital. And, in this connection, we have made the basic policy decision that the best way we can help our friends in Latin America is not through grants but through loans. And the loans can come from two sources: (1) the World Bank, which generally makes loans to Governments for capital development, and (2) the Export-Import Bank, a United States enterprise which can make loans to Governments for development of roads and power projects, etc., and which also has the authority to make loans to individual operations, corporations, and the like.

I think that we can all be encouraged by the fact that the Export-Import Bank is substantially stepping up its program of loans for Latin America

so as to bring adequate capital into those countries to supplement the private capital already available.

I will digress for just a moment from the problem of providing capital for the development of these areas to mention one project in which direct Government grant on the part of the United States, it seems to me, is justified. The Inter-American Highway, which runs from the Texas border to Panama, has received strong support from the President in a message sent to the Congress, in which he asked that $75 million approximately be appropriated over the next three years to finish that highway. It would provide an all-weather road running from the Texas border and the California border to Panama.

I can imagine that many of your friends at home might raise a question: "Why should we appropriate $75 million for a highway in other countries?" And the answers are various. First of all, there is a moral obligation. For approximately 20 years, at least, and maybe even longer than that, this highway has been a moral commitment of the United States. We contribute $2; the country through which the highway passes contributes $1.

In the second place, there is nothing which can be more effective in developing the economies of these countries than to finish the highway to the Panamanian border. For example, the largest dollar income that Mexico has today comes from the 400,000 American tourists who go there every year. And once the highway is completed to Panama, this tourist trade, of course, will increase substantially.

But even more basic than that, once the highway is completed, areas which have been inaccessible will be opened up. Rich agricultural lands will become available for development. The effect on the economy, as you can see, will be substantial.

And then, of course, politically, countries like Nicaragua and Costa Rica, which ought to be friends, whose people potentially are friends, will be brought together through better communications.

And, militarily, you may remember that our Joint Chiefs thought so highly of the necessity of having overland communications to Panama during the last World War that we spent millions of dollars on a military road which was never completed. And, certainly, having a road available to the Panama Canal will be good insurance in the event that we do become involved in World War III, with consequent submarine warfare.

I use the highway only as an example of the type of policy this Government is following with regard to Latin America and why American dollars, spent in other countries, can bring back dividends which are far greater than the appropriations made.

I would like to add just one word with regard to the general problem of communism in Latin America. We saw the situation in Guatemala a few months ago, and we were frightened, as we should have been, because a Communist beachhead in Guatemala-and it existed there for ten years was a constant thorn in our side. If the sore had spread over

other countries, it could have been extremely detrimental to the best interests of the United States and the other nations among the American Republics. But I can say I think with safety-that the Guatemalan Government today, under Castillo-Armas, is on the way to success in developing Guatemala's resources and in doing what the Communists were unable to do in ten years.

I don't believe there has ever been a Government in history which promised more to the people and did less than the Communist government in ten years. And you just can't imagine the hatred that the people of Guatemala have for the Communists until you have traveled there. That was due to the atrocities. It was due to the way they sacked the Treasury. It was due to the fact that they promised hospitals and schools and highways and the like, and then instead of using the funds for the stated purposes, they frequently put the funds in their own pockets.

The new Government, given proper support by the United States-and it is in our best interests to do so will do more in two years to bring economic progress to Guatemala than the Communists were able to do in ten years. And I don't believe that the free world has a greater stake any place than in Guatemala-because here is the only country in the world in which we can make a direct comparison of what a Communist government can do to solve the social problems of a people in an underdeveloped country with what a free government can do.

I think we're going to win on this issue, and I believe that this Government is certainly justified in supporting the Guatemalan Government in every way that it possibly can.

Finally, this last word. I trust that every Governor here, when he has the opportunity, will travel in Latin America. I sensed as I traveled through those countries that, more important than dollars, more important than treaties, our friends in Latin America simply want some attention paid them.

I can also tell you that as we traveled through these countries, we found a great reservoir of friendship for the United States. These people like the United States. They like the American people. And if you go halfway, or even a little less than halfway, you will find this affection for our people coming out.

And so I urge that if, in the great responsibilities you have in your own positions, you can travel in this area, you do so. It will be very good for international relations; it will be good for our own country; and it will be a rewarding experience for those of you who can make the trip, because, as I intimated at the outset, there is no question of the importance of Asia, Europe, and all other parts of the world to the United States in this period of a great world struggle. But if you were to select one area of the world which is indispensable to the future of the United States, this is that area. All that we need to do to assure their continued friendship, their continued cooperation, is to give them the feeling that they aren't taken for granted, that we consider them just as important as any other nation in the

world or any other area in the world, and that we wish to work with them in developing the economies of their countries and in developing the political and the economic stability which will mean progress for their people in the years to come.

THE VICE PRESIDENT. Gentlemen, our next participant in the program is a former Governor and one who has many of the problems of a Governor in his present position. You all know him very well but before presenting him, I would like to apologize for having to leave. I'm often asked what the duties of a Vice President are, and sometimes I wonderbut in any event, I know that one of them is to go out and meet the visiting VIP's when they come in at the airport.

We are expecting the Prime Minister of Thailand. He will be in at 10:30 out at National Airport. And, having visited Thailand two years ago, I'm looking forward to seeing Prime Minister Pibulsonggran. I'm not so sure that is the right way to pronounce it, but that is as close as I can get. And consequently I will have to leave at this time.

It has been a pleasure to participate in the program up to this time. I'm looking forward to seeing all of you this evening. Governor Adams will now tell you what comes next on the program and will make whatever remarks he thinks are appropriate.

Thank you very much.

Remarks of Harold E. Stassen, Special Assistant to the President and Director, Foreign Operations Administration

Governor Peterson and Governors, I am delighted to have the opportunity of meeting with you this morning. I can proceed with my presentation, and when the Secretary of State arrives, we can interrupt. Then if you have questions you can swing back into those later.

In the beginning of a brief discussion this morning of the Mutual Security program around the world, I'd like to make this personal reference. When I began this type of responsibility, it was in succession to a gentleman who was then leaving public office, but who now is back with you in the capacity of one of your fellow Governors. I'll never forget the fact that on, I think it was November 20th of '52, the moment the radio announced that the President had asked me to take this particular field of work, I got a phone call from Averell Harriman, who invited me to come down right away and begin to get briefed and ready for the transition. He could not have been more helpful during that period from the appointment to the inauguration, and the manner in which he aided in that transition was of tremendous assistance in carrying on this program which, of course, from its very beginning has had strong bipartisan support and which involves fundamentally the security of our country. The day he left, just to remind me that it was a bipartisan program, he left a little head of a donkey on my desk for me to pick up as I arrived. And, Averell, it is still there along with an elephant. I salute you this morning.

We are talking about a program which is fundamental and, as the President said just last week, indispensable to the total security and economic policy of the United States. It is also a program that is called more names than any other program in which our Government engages. You are, of course, familiar with them--The Global Give-away; the Super Santa Claus; the Dollars Down the Drain; the Operation Rat Hole, etc. And the Communists usually call it Crumbs from the Capitalist Table, or Insidious Imperialism. That is the colorful background for the work in which our country has been engaged since the beginning of the Greek-Turkey program and on down to the present and now projected in a Fiscal '56 program by President Eisenhower.

Through this accumulation of experience we are reaching a stage where we can take some pretty hard looks at what is happening and also project it in relationship to current and future problems.