ECONOMIC ISSUES IN MILITARY ASSISTANCE MONDAY, JANUARY 18, 1971 CONGRESS OF THE UNITED STATES, OF THE JOINT ECONOMIC COMMITTEE, Washington, D.C. The Subcommittee on Economy in Government met, pursuant to recess, at 10:05 a.m., in room S-407, the Capitol, Hon. William Proxmire (chairman of the subcommittee) presiding. Present: Senators Proxmire and Symington; and Representative Conable. Also present: John R. Stark, executive director; Richard F. Kaufman, economist; and George D. Krumbhaar, Walter B. Laessig, and Leslie J. Barr, economists for the minority. OPENING STATEMENT OF CHAIRMAN PROXMIRE Chairman PROXMIRE. The subcommittee will come to order. First I have an announcement about tomorrow's hearing. Under Secretary of State John N. Irwin was scheduled to be our leadoff witness. Over the weekend, he was dispatched to the Middle East by President Nixon and will, therefore, be unable to testify. We will reschedule Mr. Irwin's appearance soon after his return to the United States. There will thus be no hearing tomorrow. Originally, we had invited Secretary of Defense Melvin Laird to testify on January 6. Secretary Laird explained that he could not appear because he was being dispatched to Vietnam during the week that we wanted him. This coincidence is getting to be quite extraordinary. On January 6, I had asked the spokesman for the Pentagon, Deputy Assistant Secretary Armistead I. Selden, to provide certain information about foreign military assistance which he could not supply during his oral testimony. I had asked him to tell us the value of the personal and real property given to Vietnam since 1965. A document was submitted to the Committee purporting to answer this question. I am sorry to say that it does not. The submission of Mr. Selden is entirely unresponsive on this matter. I had also asked Mr. Selden to confirm or deny the allegation that Soviet aircraft have been able to land on bases in Turkey constructed with U.S. military assistance funds en route to the United Arab Republic. A document was also tendered to the committee purporting to answer this question. It does not. The Pentagon has been unresponsive on this matter, too. I am informed that the information re quested is contained in another document classified secret "because it contains the substance of conversations between Turkish officials and our Ambassador relating to this matter." This answer is completely unacceptable to me. Why shouldn't the American people know whether or not U.S. funds are being used to facilitate Soviet aircraft? Frankly, it is my impression that the Defense Department itself does not know the answer to the question I asked on January 6. It does not know whether Soviet aircraft are able to use Turkish bases or bases in other countries which U.S. military aid funds have helped construct. I could well understand the difficulty, and perhaps the impossibility of monitoring the numerous facilities that this country has helped build and maintain in other nations throughout the world. The fact is, in my opinion, that it is not possible to control the use of all of these foreign bases. And this fact underlines the overall difficulty of controlling foreign military assistance. We hope to learn more about the controllability factor in military aid this morning. Our witness is Mr. Chester Bowles, the former Under Secretary of State and the former Ambassador to India, and I might say that Mr. Bowles, as Ambassador to India, was a most unusual and remarkable Ambassador. He, I think, set a new kind of style and brought to India a kind of a broad sympathy and understanding and he took part in the life of the Indians, as no Ambassador I know of did, and so did his remarkable family. The word "statesman" is bandied about quite easily these days. There are few people, in my opinion, who are entitled to be considered statesmen in the true sense of the word. Mr. Bowles, in my judgment, is one of those few. He has shown wisdom, skill, and humanity in conducting State affairs and treating public issues. Mr. Bowles, you have submitted a prepared statement and you may proceed in any way that you wish. Representative CONABLE. Mr. Chairman, before you proceed, I would like to subscribe to and applaud your statement about Ambassador Bowles. I would like to ask, however, before we get into the Ambassador's testimony, if you feel the trip of the Secretary of Defense to Southeast Asia or the trip of Under Secretary Irwin to the Middle East are not legitimate trips, but are trumped up to keep them from testifying? Chairman PROXMIRE. Of course, they are legitimate trips. Representative CONABLE. Why did you refer to the "extraordinary" coincidence of these officials' trips coming at this time? Chairman PROXMIRE. It is a coincidence we asked two witnesses to appear and it just happens on the days we asked them to appear they are both overseas. As a matter of fact, Mr. Irwin, we expected him to be here until the last minute. It was at the last minute they told us he was to take this trip. Representative CONABLE. There has been a recent development out there relating to oil, has there not? Chairman PROXMIRE. I am sure the statements by the Administration are sincere and honest, but I say it is an interesting and extraordinary coincidence. Representative CONABLE. I think these gentlemen are both im portant people and have business of their own to transact beyond appearing at a Joint Economic Committee hearing during the hiatus of the Congress. Chairman PROXMIRE. I think that is right. I think Congressman Conable, one of the most able of Congressmen, is unusually sensitive and defensive. Representative CONABLE. I am defensive because you said this was a remarkable coincidence. Chairman PROXMIRE. It was just a coincidence. Representative CONABLE. Well, your use of words, sir, indicates a lurking partisan intent, I am afraid. [Laughter.] Chairman PROXMIRE. I just hope the Republicans don't feel this guilty. [Laughter.] Representative CONABLE. If we are feeling guilty, sir, it is only because of the extreme steps you are taking to try to help us feel guilty in this respect. Chairman PROXMIRE. I'm always happy to help Republicans feel guilty. Representative CONABLE. I understand, but I would like to point out to the Senator that he has already been elected for another 6year term. Chairman PROXMIRE. I am sure you will have no trouble getting elected and re-elected from everything I have heard of in your area, Congressman Conable, and I wish you success Representative CONABLE. Thank you for your support. Chairman PROXMIRE (continuing). In your great effort to reform the Republican Party. It is a tough one. Representative CONABLE. It is not nearly as tough as it might be if I were in the other party, or the other body. Chairman PROXMIRE. Mr. Bowles, you go right ahead. STATEMENT OF CHESTER BOWLES, FORMER UNDER SECRETARY OF STATE AND FORMER AMBASSADOR TO INDIA Mr. BOWLES. Thank you very much, Mr. Chairman. I am very pleased to be here. I think these hearings of yours are extremely wise and well-timed. We don't know nearly enough about these programs. The precise figures are hard to find. I don't know what they are. I have been involved in the State Department, also abroad, for a long time and I really frankly do not know what the story is on these figures. You get all kinds of different guesses and estimates and figures on different bases. I think the most important thing you could do would be to really dig out these figures and put them on the table and get an agreement on what they are. I thought I could be most helpful perhaps if I could talk in somewhat broader terms than previous witnesses about some of the situations we have become involved in through military aid. Then I would like to conclude with some comments on our foreign policy in Asia, which has been strongly shaped by these military assistance programs. I will deal largely with Asia because our biggest programs have been in Asia, and I know Asia best, but we also have similar problems in Africa and Latin America which are very serious. The distribution of military assistance, of course, should be closely related to our foreign policy objectives. It can't be separated from them. The usual pattern, however, has been that a partial military commitment is made to a given country which has then led to a greater and still greater commitment. Eventually the commitment becomes one that few would have supported in the first place if they had foreseen the political consequences. Finally, when it becomes apparent that it doesn't make sense, we try to pull back, but by that time our clients, whom we were supposed to control, start controlling us. There are all kinds of pressures brought to bear on us to stick with a program even though it is obviously not making sense; we get emotionally involved-people of both parties, I might say, get involved emotionally-our stake in the outcome becomes bigger and bigger and it is hard to get back to a rational position, very hard. Of course, one of the biggest aid programs of all has been NATO, which, I think, by and large has worked very well. Large sums were spent and they were spent well, spent by expert people, good managers who knew what they were doing. You can criticize NATO, but by and large it has been a very able program. In contrast to this. our support of China in the 1940's was inept. We spent huge sums of money there without any thought of the basic reforms required in building a new China. As a result, much of our equipment wound up in the hands of Mao Tse-tung's Communist Chinese. The arms which the Chinese attacked us with in Korea in 1953 were in part American weapons taken away from Chiang Kai-shek's forces. What worries me is we learned few lessons from all of this, and we still make the same mistakes. Vietnam, of course, is a prime example. When the Japanese surrendered in August 1945, the French set out to secure their colonial position in Indochina. FDR was always very clear on this, to never let the French or the Dutch back into Asia. We discussed this on several occasions. Once I asked him, "How about the British?" He said, "The British are sensible people; they will get out on their own accord and they will eventually get out of India. But the French and Dutch, never; they will stay there as long as they can." Of course, after Roosevelt's death most of this was forgotten, even when the French shelled the city of Haiphong in November 1946, killing thousands of civilians. Our first big mistake was a military "deal," which I think, was one of the most unfortunate deals in American diplomatic history. In the late 1940's, we desperately needed forces from Francesome 12 divisions to bolster up our NATO defenses in Europe. German troops were not then available. The French said, "We cannot possibly supply these unless you will help us out of the IndoChinese situation; we need your help there, and hope you will subsidize us with equipment in Indochina." By 1949, the Communist Chinese had taken over Mainland China, and the pressure on Vietnam became greater. Now, of course, the French insisted they needed our support, not for colonial purposes but for other purposes, to block communism and in their words, "Pro tect French property" (phrases calculated to salve American consciences and to win American support). We agreed to what I believe was a very cynical deal. By 1951, the French forces in Vietnam totaled 140,000 professional soldiers, supported by 150,000 French-trained Vietnamese. Yet this force was unable to hold the Viet Minh in check. The claims were quite different. I was there in 1952, and everywhere I went during that period I heard optimistic comments about their ability to handle the Communists. Our embassy in Saigon, was confident of it. Everybody you talked to was confident of it. The Communists were on the run everywhere, and we were about to win. Now, at that time there were 38,000 French dead, including 11,000 officers. U.S. military aid to France was 2.5 times as great as our entire worldwide point four program, and equal to our Marshall plan contribution to France itself. An average of one 10,000-ton freighter was arriving with U.S. military equipment every day. On February 4, 1954, just 2 months before the collapse of the French military stronghold at Dienbienphu which spelled defeat for their entire effort, Adm. Arthur W. Radford, Chairman of the Joint Chiefs of Staff, was quoted in the New York Times as testifying before the House Foreign Affairs Committee that: The development of a broad strategy in concept by the French and Vietnamese commanders in Indochina, supported by the United States financial and military assistance, should insure within a very few months a favorable turn in the course of the war *** Communist prospects of achieving any decisive immediate successes are nonexistent. In any event, after the Geneva Agreement was signed, there was some hope for stability. But President Diem failed to hold elections or to make needed reforms leading Ho Chi Minh to begin a new wave of terrorism against the Diem government. Diem promptly sought our assistance. This was another turning point. Now, in February 1961, when I was Under Secretary of State, I felt very strongly that our support of Diem was going nowhere, and I tried to get consideration for a neutralized Southeast Asia, expanding the 1954 Geneva Accord on Laos to embrace the whole area. This proposal got nowhere. Instead Walt Rostow was sent to Vietnam in October 1961 with Max Taylor. They came back with a report that we ought to move in and help directly. Their recommendation included helicopters, B-26's, military advisers and training experts and the introduction of American ground troops, with the possibility that as many as six full divisions might ultimately be required. Now, some of us worked very hard against this and we failed. The President decided on sending more military advisers but did not take the rest of the program at that time. But in this period, you could see the precarious balance on foreign policy between the State Department and Pentagon was being turned upside down and more and more the Pentagon was moving into the political questions and making decisions. I have often wondered what Kennedy would have done if he had lived. My guess was he would not have gotten us into the mess which developed. Although I can't prove it-it is perhaps a more sympathetic emotional hope-there is some evidence. He said to Walter |