GOVERNMENT MENTS---------------------

Storage 1 1975

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ry hearing s K* r,OMS> o. ate un iv kr bi t. b e f o r e a

SUBCOMMITTEE OF THE

COMMITTEE ON APPROPRIATIONS 

HOUSE OF REP RESENT ATIV ES

NIN ETY-FO UR TH CONG RESS

FIRS T SESSION

SUBCOMMITTEE ON FO REIGN OPERATIONS AND RELA TED AGENCIES

OTTO E. PASSMAN, Louisiana, Chairman

CLARENCE D. LONG, Maryland 

J. EDWARD ROUSH, Indiana 

DAVID R. OBEY, Wisconsin 

TOM BEVILL, Alabama 

BILL CHAPPELL, Florida 

EDWARD I. KOCH, New York

GARNER E. SHRIVER, Kansas 

SILVIO O. CONTE, Massachusetts 

LAWRENCE COUGHLIN, Pennsylvania

JOS EPH D. EARLY, M assachusetts

Donald E. Richboubg, Staff A ta itt an t

PART 3

Budge t Amendment fo r Milita ry Ass istance to Cambodia

Inc rea sed Auth orization for Isr ael, P ortuga l, and Por tuguese 

Colonies in Africa

Printed for the use of the Committee on Appropriations

FOREIGN ASS IST ANC E AND RELATED AGENCIE S

APPR OPRIA TIONS FOR 1975

H E A R I N G S

BEFORE A

SUBCOMMITTEE OF THE 

COMMITTEE ON APPROPRIATIONS 

HOUSE OF REP RESENT ATIV ES

NINETY-FOURTH CONGRESS

FIR ST SESSION

SUB COMM ITTEE ON FOR EIGN O PERATIO NS AND R EL AT ED AG ENCIE S

OTTO E. PASSMAN. Louisiana , Chairman

CL AR EN CE D. LON G, M ar yl an d 

J . ED WAR D RO US H, In dia na 

DA VID R. OBE Y, W isco ns in 

TOM BE VIL L, Alabam a 

B IL L CH APP ELL , Flo ri da 

ED WAR D I. KO CH , New York 

JO SE PH D. EA RL Y, M ass ac huse tt s

GA RN ER E. SH RIV ER, K an sa s 

SI LVIO O. CO NT E, M as sa ch us et ts 

LA W RE NC E CO UG HL IN , Pen ns yl va ni a

Donald E . Rich bourg, S ta ff A s s is ta n t

PART 3

Budget Amendment for Military Assistance to Cambodia 

Increased Authorization for Israel, Portugal, and Portuguese 

Colonies in Africa

Printed for the use of the Committee on Appropriations

47-299

U.S . GO VE RNME NT PR IN TI NG OF FICE 

WAS HING TO N : 1975
COM MIT TE E ON A PPRO PRIA TIO N S

GE OR GE H. MA HO N, Te xa s, C hair m an

JA M IE L. W HIT TEN , Miss iss ippi 

ROBER T L. F. SI K ES , Flo rida 

OT TO E. PA SSMA N, Lou isiana 

JO E L. EVIN S, Te nness ee 

ED W AR D P. BOLAN D, M as sa ch us et ts 

W IL LIA M H. NA TC HE R, Ken tu ck y 

DANIE L J. FLO OD, Pen nsy lv an ia 

TOM ST EED , Ok lah om a 

GE OR GE E. SH IP LEY , Il lin oi s 

JO HN M. SLA CK , W es t V irgi ni a 

JO H N J. FL YN T, J r., Ge orgia 

NE AL SM IT H , Iowa 

RO BER T N. GIAIMO , Con ne ct icut 

JO SE PH P. ADD ABBO, New York 

JO HN J. McF AL L, Cal ifor ni a 

ED WAR D J. PA TT EN , New Je rs ey 

CL AR EN CE D. LON G, M ar yl an d 

SIDN EY R. YA TE S. Illin oi s 

BOB CA SE Y, Te xas 

FR ANK E. EV AN S, Co lor ado

DA VI D R. OBE Y, W isc on sin

ED WAR D R. ROY BAL, Cal ifor ni a

LO UIS ST OK ES , Ohio

J. ED W AR D RO US H, In dia na

GUNN Mc KAY, U ta h

TOM BEVIL L, Alabam a

B IL L CHA PP ELL, J r., Flo ri da

B IL L D. BU RL ISON , Miss ou ri

B IL L A LE XA ND ER , A rk an sa s

ED WAR D I. KOCH, New York

YV ON NE BR ATH W AIT E BU RK E, C al if orn ia 

JO H N P. MU RT HA , Pen nsy lv an ia 

BO B TR AXLE R, Michiga n 

RO BE RT DUNCAN, Orego n 

JO SE P H D. EA RL Y, M as sa ch us et ts

MAX BA UC US, M on tana

EL FO RD A. CE DER BE RG , Michig an 

RO BE RT II. M IC HEL , Il linois 

SILV IO O. CO NT E, M as sa ch us et ts 

GA RN ER E. SH RIV ER, K an sa s 

JO SE PH M. Mc DA DE , Pen ns yl va ni a 

MA RK AN DR EW S, N or th D ak ot a 

BU RT L. TA LC OT T, C al if orn ia 

JA CK ED WAR DS , Alaba ma 

RO BE RT C. MCEW EN, New York 

JO HN T. MY ER S, In dia na 

J. KEN NET H RO BI NS ON , V irgi ni a 

CL AR EN CE E. M IL LE R, Oh io 

LA WRE NC E CO UG HL IN , Pen ns yl va ni a 

C. W. B IL L YOUNG , Flo ri da 

JA CK F . KE MP, New Y ork 

W IL LI AM L. AR MS TRON G, Co lor ado 

RA LP H S. RE GU LA . Oh io 

CL AIR W. BU RG EN ER , C al if or ni a

Ke it h F. Mai nla nd, Clerk an d S ta ff D irec to r

Gordon E. Casey

Nic hola s G. Cavarocchi

Geor ge E . E vans

Rob er t B. F oster

J oh n M. Garrity

Lind a Gregory

Aub rey A. Gun ne ls

Charl es G. H ardin

F. Mic h a el H ugo

T ho mas J . Kingf ield

Rob er t L . K ni se ly

E dward E . L ombard

Ric ha rd N. Malow

Sta ff A ss is tan ts

Amer ico S. Micon i

Dem ps ey B. Miz el le

F re de ri ck Moh rman

E ni d Morr ison

P et er J . Murph y. J r. 

H enry A. Ne il , J r. 

Rob er t C. Nicho la s III 

Byron S. Niels on

J oh n G. Ost ha us

F re de ri ck F. Pflu ger

J ohn G. P la sh al

E dw in F. P ow ers

Sam ue l R . P res ton

Donald E . Rich bourg

E arl C. Silsb y

G. H om er Skarin

C. Wil li am Sm it h

Charl es W. Snodgrass

H un te r L. Spillan

Beverly T hie rw ec hte r

P au l E . T ho ms on

George A. Urian

Der ek J. Vander S chaaf

Mic h a el S. W’ein berger

E ug en e B. Wil hel m

J. David W ills on

Survey s and I nve stigations

C. R. And erson, C hie f

D avid B. Schm id t, D ir ecto r

De n n is F . Creedo n, F ir s t A s s is ta n t

Marion S. Ram ey, Seco nd A s s is ta n t

Not e.— Thi s Su rvey s an d In vest ig ati ons su pe rv is or y st af f is su pp lemen ted by se lec ted 

per so nnel bo rro we d on a re im bu rs ab le ba sis fo r var yin g le ngth s of tim e fro m va riou s 

ag en ci es to staf f up spe cific st udie s an d in ve st ig at io ns . Th e cu rr e n t av er ag e an nu al fu ll ­

tim e pe rs on ne l eq ui va le nt i s ap pr ox im at el y 42.

(n)
Ill

Barbara L. Cham bers

Gerard J. Chouinard

P aul V. F armer

Dianne F rum

Sandra A. Gilbert

P atricia A. Kemp

Marcia L. Matts

Adm inist ra tiv e Support

F rances Mat

Genevieve A. Mealy

Lawrence C. Miller

Dale M. Shulaw

Michael S levin

Austin G. Smi th

Chr istine Stockman

Ann M. Stull

Betty L ou T aylor

Rand olph T homas

Gemma M. Weibl inge r

Toni Will iam s

*
‘.'i' i><; i Y r i . ii r

t .1; : £>

.(■•1 11 7 15 T

i. 'i ta

T R t: ! l J . .p

..,
FOREIGN ASSISTANCE AND RELATED AGENCIES APPROPRIATIONS 

FOR 1975

M o n d a y , F e b r u a r y 3, 19 75 .

B U D G E T A M E N D M E N T F O R M I L I T A R Y A S S I S T A N C E T O 

C A M B O D I A

W IT N E S S E S

HO N. C A R LY LE E. M A W . U N D ER SE C R E T A R Y OF STATE FO R SE CU ­

R IT Y A SSIS TA N CE

HO N. P H IL IP C. H A B IB , A SSIS TA N T SE C R E T A R Y OF STA TE FO R 

EAST A S IA N A N D P A C IF IC A F F A IR S

LT . GEN . H. M. F IS H , U.S. A IR FO RC E, D IR EC TO R , D E F E N SE SE CUR IT Y A SSIS TA N C E AGENCY

HON . JO H N E. M U R P H Y , D EPU T Y A D M IN IS T R A T O R . A GENCY FO R 

IN T E R N A T IO N A L D EV ELO PM EN T

E R IC H F. VON M ARBOD, P R IN C IP A L D E P U T Y A SSIS TA N T SE C R E ­

T A R Y OF D E F E N S E (C O M PTRO LLER )

RO BERT H. M IL L E R , D EPU T Y A SSIS T A N T SE C R E T A R Y OF ST A T E 

FO R EAST A S IA N A N D P A C IF IC A F F A IR S

B E N JA M IN FO RM A N , A SSIS TA N T G E N E R A L CO UNS EL FO R IN T E R ­

N A TIO N A L A F F A IR S , D E PA R T M E N T OF D E F E N S E

LT . GE N. E U G E N E F. T IG H E , JR ., U.S. A IR FO RCE, D E PU T Y D IR E C ­

TO R, D E F E N SE IN T E L L IG E N C E AGENCY

M A J. GE N. JO H N R. D. CLE LA ND, JR ., U.S. A R M Y , V IC E D IR EC T O R 

FO R O PER A TIO N S, O F F IC E OF T H E JO IN T C H IE F S OF ST A FF

DO UG LA S J. S M IT H , SP E C IA L A SSIS T A N T TO T H E D IR EC TO R , D E ­

FE N SE SE C U R IT Y A SSIS TA N CE A GENCY

FR A N C IS X. NEL SO N, D IR EC T O R A TE FO R SE C U R IT Y A SSIS TA N CE 

O PERA TIO N S, D E F E N S E SE C U R IT Y A SSIS TA N C E AGEN CY

LL OYD M. R IV E S , B U R E A U OF EAST A S IA N A N D P A C IF IC A F F A IR S , 

D E PA R TM EN T OF ST A T E

JA M E S H. M IC H E L, O F F IC E OF T H E LEG A L A D V IS E R , D E PA R T M E N T 

OF ST ATE

M r. P a s s m a n . T h e c o m m it te e w il l co m e t o o rd e r .

T w a n t to w e lc o m e th e n ew m e m b e rs to th i s su b c o m m it te e . M r. 

J o s e p h T). E a r l y o f M a s s a c h u s e tts , o u r g o o d f r ie n d E d w a r d K o c h 

f r o m N e w Y o rk , a n d M r . D a v id R . O b e y o f W is c o n s in ; I a m g la d to 

h a v e v o u o n t h e s u b c o m m it te e .

A ll th e o th e r s h a v e s e rv e d o n th i s c o m m it te e in p r i o r y e a r s b u t 

I w a n t t o w elc o m e e a c h m e m b e r to t h is s u b c o m m itt e e .

GEN ERAL OBSERVATIONS

S in c e th is is t h e fir s t m e e tin g o f th e s u b c o m m itt e e th is y e a r. T m ig h t 

m a k e a fe w o b s e r v a tio n s f o r th e re c o rd . W e a r e p r e s e n tly c o n s id e r in g 

th e fi sc al y e a r 1 97 5 f o r e ig n a s s is ta n c e a p p r o p r ia t io n b il l.

A s y o u m a y k n o w , th e f o r e ig n a id p r o g r a m h a s b e e n o p e r a tin g o n a 

c o n tin u in g re s o lu ti o n a n d it h a s b e e n fu n d e d f o r 8 m o n th s th r o u g h 

F e b r u a r y 28 b y t h i s m e th o d o f o p e ra tio n . S o it is s a f e to sa y t h a t th is 

is th e u n fin is h e d b u s in e s s o f th e la s t C o n g re ss .

( D
2

Of course all the hearings will be open, unless the committee by 

majority vote should determine that we should close the hearings.

It has been the policy of this subcommittee to hold its hearings in 

the afternoon, preferably at 1 o'clock or 2 o'clock. By holding our 

hearings in the afternoon, it gives the committee members an opportunity to attend hearings of the other subcommittees in the mornings.

Occasionally we may have to make an exception and have some 

hearings in the morning.

PROCEDURE FOR QU ESTIO NING

Under the rules of the caucus and the committee, each member of 

this subcommittee may consume 5 minutes in the beginning, until 

we have yielded to every member around the table. Aft er that is 

completed, each member of the subcommittee my take all the time he 

feels is necessary to interrogate the witnesses.

I apply the same rules to myself as I do to the other members of 

the committee.

Afte r I have consumed my 5 minutes, I yield to the ranking minority member. Then I go back to my left, and we alternate until each 

member of the subcommittee has had an opportunity to ask their 

questions.

INT RO DU CTION OF WITNESSES

Members of the committee, this afternoon we shall hear the witnesses who will testify on the budget amendment for military assistance to Cambodia.

We have, as witnesses, the Honorable Carlyle E. Maw, Under Secretary of State for Security Assistance; the Honorable Philip C. 

Habib, Assistant Secretary of State for East Asia and Pacific Affairs; 

Lt. Gen. H. M. Fish, Director of the Defense Security Assistance 

Agency; and of course the Honorable John E. Murphy, Deputy Administrator. Agency for Internationa l Development; and other supportin g witnesses. We will insert certain tabular material in the record 

at this point.
[The m ate ria l follo ws :]

CAMBODIA MIL ITARY ASSISTANCE PROGRAM, FISCAL YEAR 1975 

(Dollar amounts in thousands]

In itia l 

request 

to Congress 

in CPD

(1)

Program 

based on 

current 

ceiling 1

(2)

Proposed 

revised 

program 1

(3)

Col. 

(3)—(2 )

(4)

Proposed

augmented

program

(5)

Col. 

(5)—(3)

(6 )

To tal.............................................. $390, 000 $256, 977 $275, 000 $18, 023 $497, 0C0 $222, 000

Aircraft ( inc ludin g spares)........... ......... 7. 963 2,195 3, 901 1,706 6,161 2, 260

Ships (inclu din g spares)____________ 4, 504 2, 421 3,142 721 5, 842 2, 700

Vehicles and weapons (including

sp ar es )............................................. . 8, 505 4,067 5,192 1,125 15, 306 10,114

Am munitio n____________ . .. ___ 299, 010 163, 591 173,177 9, 586 344, 509 171,332

Communication equipment (inc lud ing

spares)_______________ ________ 1,259 636 1,136 500 2, 796 1,660

Other equipment and sup plies_______ 26, 373 17,184 20, 534 3, 350 28,396 7, 862

Construction______________________ 385 343 343 .. 573 230

Repair and rehabilitation of equ ipment. 8, 157 9,221 10,173 952 11,015 842

Supply operations............ ............. ....... 3

 27, 500 51,000 51,000 .. 76, 000 25, 000

Tr aining _________________________ 4. 767 4, 578 4, 661 83 4,661 ..

Technical assistance and special services........................................ . ............. 1,577 1,741 1,741 . 1,741 ..

Quantity in un its:

C-123 cargo aircraft...........

UH-1H helicopter..........

O-1A observation aircraft.

Assault c ra ft .......................

Landing cr aft......................

Armored personnel carrier 

Armored mortar c arr ie r. ..

Trucks.................................

Carbines and rif le s............

Machineguns.......................

Mortars............ ...................

Howitzers, 105-mm............

Recoilless rifles , 106-mm .. 

Military bridges..................

........... 1 1 ........................ 1 .......................

8 ......................................................................................................................

........... 8 8 ........................ 8 .......................

.................................................................................. 4 4

2 17 1 7 ................... 25 8

............. 8 8 58 50

1 1 1 7 6

24 ...................................................................... 634 634

1,000 2,003 2,445 442 7,617 5,167

125 160 518 358 1,050 532

.................................................................................. 183 183

26 2 2 ....................... 2 .......................

........... 8 8 ....................... 28 20

10 1 0 ....................... 13 3

• Provides for required inclusion of admin istratio n ($3,100,000), excess defense articles from overseas sources ($617,000), 

and redistributable MAP property ($14,305,000) under ceilin g.

3

 Assumes relief from requirement to include adminis tration, excess defense articles from overseas sources and redistributable MAP property.

3

 Included in general costs in CPD.

CAMBODIA MAP REDISTRIBUTABLE PROPERTY, FISCAL YEAR 1975 

(Dollar amounts in thousands]

Description Quantity Value 1

Total.................................................................................................................................................................. $14,305

T-28D tra ine r aircraft.................................................. 3 338

O 1 A observation aircraft............................................... 3 18

Aircr aft eng ines.............................................................................................................................. 33 409

T ru c k s .. ....................................................................... 10 11

Carbines........................................................................................................................................... 4,403 169

Rifles.................................................................................................................................... 1,101 78

Machineguns.......................................... 22 37

60-mm mo rtars................................................................................................................................ 23 6

81-mm m or ta rs ...................................................................... 101 227

4.2-inch m or ta rs ............................................................................................................ —............ 4 29

Other weapons................................................................................................................................. 60 10

Am mu nition .................................................................................................t

............................................................. 12,755

Comm unications equipment and spare parts....................................................................................................... .. 47

Other equipment and s up plie s. ........................................................................................................ ............. .. 171

1

 Actual value but not less than % acquisition cost.
4

CAM BODIA — DOD OV ERS EAS EX CES S DE FENS E AR TI CLE S, FI SC A L YE AR 1975 

[In thou sand s of dollars]

Description Quantity Value

To tal ........................

C-12 3K cargo aircra ft___

O-1 A observation aircra ft. 

Landing craft mechanized

Machine g un s_____ _____

Military bridge s_________

____ 617

1 359

8 48

8 187

100 11

10 12

1

 Actua l value but not less than % acquisition cost.

Mr. Passman. Gentlemen, who would like to testify first ?

Mr. Maw. Mr. Chairman and members of the committee :

May I suggest first we than k you for the opportunity to be with 

you today?

Our first witness will be Ambassador Habib.

Mr. Passman. Thank you very much.

PU RPO SE OF H EA RIN G

Before you start, Mr. Ambassador, may we state for the record 

that you are here to justify a budget amendment of $222 million for 

military assistance to Cambodia. This is in addition to what the witnesses previously justified for Cambodia for fiscal 1975; is that 

correct ?

Mr. Habib. That is correct, sir.

Mr. P assman. Mr. Secretary, we would be very happy to hear from 

you at this time.

Mr. Habib. Thank you.

Mr. Chairman, gentlemen, with your approval I will read a statement, and General Fish will also have a statement.

Mr. P assman. It is the policy of this committee that each member 

of the subcommittee have a copy of the prepared statement in advance 

of the time that the witnesses testify. That makes it possible, unless the 

committee should decide otherwise, for the witnesses to insert their 

statements in the record and then summarize it. I t will be your option 

as to how you would like to handle it, sir.

Mr. H abib. I have a brief statement and I would like to read it into 

the record.

Mr. Passman. You may proceed.

General Statement

Mr. II abib. Mr. Chairman, gentlemen, in both Vietnam and Cambodia there has been a recent significant escalation of military action 

by Communist forces. This has placed new and severe strains on the 

resources of the governments of those countries, and has rendered the 

assistance we provide to them inadequate to meet its intended 

objectives.

The President has therefore asked Congress to make available additional funds for military aid to Vietnam and Cambodia, and to remove impediments to the use of funds already appropriated to provide 

essential food aid to Cambodia.
The Vietnam supplemental, a Defense appro priation, will be for ­

mally considered on another occasion. The auth ority to increase food 

aid for Cambodia does not require any additional appropriation.

CAMBODIAN PROBLEM

My testimony today, therefore, is primarily in support of our re­ quest for appropriations for military aid for Cambodia. But in my remarks this afternoon, I will attempt to address the problem of Cambodia in the broader context of our overall Indochina policy.

PARIS AGREE MENT

Two years ago we concluded an agreement in Paris which we hoped would end the war in Vietnam, and pave the way for settlements in Laos and Cambodia. The Pa ris Agreement was the end result of a long and tortuous negotiating process. In its final form, the agreement was one which we felt honored the sacrifices and respected the sense of justice of both sides. I t implied a rejection of absolutes, an acceptance of restraint, an acknowledgement of limitations—as must any accord. 

From the standpoint of the United States, the agreement in large measure met what had been our purpose throughout the long history of our efforts in Vie tnam: It ended our direct military involvement there and established a formula through which the people of South Vietnam could determine their political future, without outside 

interference. Things have not worked out as we had hoped. Only in Laos have the contending parties moved from military confrontation to political competition. In Vietnam, a fter a period of relative quiescence, warfare again rages and the structure created by the agreement for working toward a political settlement is endangered. In Cambodia, there has been no amelioration of the conflict, and the military balance in that country is gravely threatened. I cannot profess surprise at these de­ velopments. The Par is Agreement contained no self-enforcing mech­ anisms. For that agreement to be effective, and to achieve its pur­ pose, both sides were required to act in accordance with the principles 

of restraint, compromise, and minimal good faith which must underlie the resolution of any indecisive conflict. Those qualities have been conspicuously absent from Hanoi’s approach. In Cambodia also, a negotiated settlement demands tha t both sides accept the impera­ tives of compromise. The Cambodian Communists have instead sought 

military victory. While its focus was on Vietnam, the Paris Agreement also contained provisions relating to Laos and ('ambodia. The signatories were enjoined to respect the sovereignty and territorial integrity of those countries, and all foreign troops were to have been withdrawn. South Vietnam and the United States have abided bv those strictures. Hanoi has not. North Vietnam continues to use the territory of Ijaos to send forces and war material to South Vietnam and continues to station troops in remote areas of that country. North Vietnam uses the ter­ rito ry of Cambodia to support its m ilitary operations in South Viet­ nam. In addition. Hanoi gives material assistance and battlefield advice to Communist forces operating against the Cambodian 

Government.
6

SIT UA TIO N IN CAMBODIA

Let me now turn specifically to the situation in Cambodia. The conflict in Cambodia is complex, and its origins are widely misunderstood. 

Sihanouk was deposed in 1970 by a government which he himself 

had formed less than a year before. That action was ratified bv a National Assembly whose members Sihanouk had personally selected. 

The United States played no role in the matter. Our total presence 

in Cambodia at tha t time consisted of two diplomatic officers and 

th ree military attaches. Several days after those events. North Vietnamese forces attacked Cambodian Government outposts in the 

eastern region of the country. Armed hostilities in Cambodia date 

from those attacks. Under North Vietnamese auspices, insurgent 

forces were formed and joined the fray.

Warfare has since been unremitting, and often intense. The human 

and material cost has been high. The economic life of Cambodia has 

been shattered. What was once a rich agricultural country, producing 

consistent rice surpluses, is now heavily dependent on outside assistance for even the most basic necessities. Perhaps as many as 1.5 million 

people—over a fifth of the total population—have become refugees. 

Thousands of Cambodians—soldiers and civilians—have lost their 

lives.

Cambodia’s battle against an externally supported insurgent movement has been intensified still furth er in recent weeks. On January 1. 

Communist forces launched a new offensive, stepping up attacks in the 

area near Phnom Penh and against several provincial capitals, and 

making strong efforts to cut the vital Mekong supply corridor. Total 

casualties for both sides are runn ing at least 1.000 a day—killed, 

wounded, or missing—and more than 60,000 new refugees have been 

created. The already stricken economic life of the country is further 

ravaged.

Cambodian Government forces have fought remarkably well, in the 

face of difficult odds. In little more than 4 years, a small and largely 

ceremonial army has grown into a sizeable and increasingly effective 

fighting force. In this connection, I have seen a number of recent press 

articles alleging waste of ammunition by Cambodian forces. They require comment. While this was partly true a year ago—as noted by the 

inspector general for foreign assistance in a recent report—that report also notes tha t steps have been taken to improve ammunition conservation. Because of those efforts, Cambodian forces are undoubtedly 

making better use of their ammunition this year than last. But combat 

intensity remains the primary determinant of ammunition expenditure—and the Communists have raised the intensity markedly since 

Jan uar y 1. I would also add tha t it is misleading to compare the ammunition expenditures of defending forces with those of insurgents. 

As in Vietnam. Communist forces—having no population centers or 

fixed positions to defend—are able to mass forces at times and places 

of their choosing: this allows them economies unavailable to widely 

dispersed defenders.

In Cambodia, even more than in Vietnam, the material resources 

the nation must have for its defense are strained to the limit. I f South 

Vietnam faces a harsh choice in allocating diminishing defense re-
sources, it is not inaccurate to say that Cambodia has no choice. If it 

is to avoid collapse and chaos, and if there is to be anv prospect for a 

compromise solution, additional aid must be provided without delay. 

U .S . OBJE CTI VE I N CA MB OD IA

Our objective in Cambodia is to restore peace and to allow the Cam­ bodian people an opportunity to decide freely the political future of their country. It has never been our belief, o r a premise of our policy toward Cambodia, tha t the conflict would end in conclusive military victory by Cambodian Government forces. Nor, however, should it end in military victory by the Communists. We believe the only logi­ cal and fair solution is one involving negotiations and a compromise settlement. The Cambodian Government has repeatedly called for talks with the opposing side, without preconditions. We have fully sup­ ported these proposals, as well as the resolution, sponsored by Cam­ bodia’s Southeast Asian neighbors and adopted in the last session of the United Nations General Assembly, calling for early negotiations. The Communists, however, have been adamantly opposed to a nego­ tiated settlement. Th eir attitude is unlikely to change unless and until they conclude t hat military victory is not possible. The first impera­ tive, therefore, and the aim of our military assistance to the Cam­ bodian Government, is to preserve a military balance and thereby to 

promote negotiations.

REST RIC TI ONS ON AS SI ST ANCE

Present restrictions on our military and economic assistance to Cambodia, contained in the 1974 amendment to the Foreign Assistance* Act, make it impossible to accomplish tha t goal. The administration originally requested $390 million in military aid for this fiscal year. The $200 million in military aid authorized for this fiscal year was expended during the past 6 months, on the basis of continuing resolu­ tion authority, in response to significantly intensified Communist offensive actions. Since th e beginning of the latest Communist offen­ sive on Janu ary 1, ammunition expenditures have gone higher, of necessity, and even the $75 million drawdown of Defense Department stocks authorized for th is emergency situation will not meet the needs. In addition to this stringent situation with respect to military supplies, Cambodia also faces an impending severe rice shortage.

PRESID EN TI AL RE QU ES T

Therefore, to meet minimum requirements for the survival of the Khmer Republic, President Ford has asked the Congress to do three 

things : (1) To eliminate the existing $200 million ceiling on military assistance for Cambodia. (2) To authorize and appropriate $222 million in military aid. in addition to a ppropriating the $200 million currently authorized. Our original request to the Congress for military assistance to Cambodia during the current fiscal year, $390 million, was an amount we re­ garded then as the minimum needed. With unexpectedly increased Communist pressures—and in view of the sharp rise in the cost of
8

ammun ition —the l arge st sin gle item in the prog ram—$222 million in 

ad ditio na l fun ds is now cle arly req uired. Tha t am ount, plu s the $200 

million in aid fun ds and the $75 millio n in DO D draw down alread y 

autho riz ed, will br ing total m ilitar y assistance fo r the ye ar to a level 

general ly com parable to ou r or iginal estimates of the need and our 

original request to t he Congre ss.

(3) To eliminate the $377 millio n ceiling on our overa ll aid to 

Cambodia—o r at least to exem pt Pu blic Law 480 food from th at 

ceiling. Th is is nece ssary to enable us to pro vid e vital commod ities— 

mostly food—as soon as possible. Th e inab ility to use fund s alread y 

included in the USD A ap pr op riat io n will cause a break in the food 

supp ly pip eline b eginn ing in Ju ne unless pro cur em ent action is begun 

by late March. New au th or ity the refore is need ed urgently. We 

an tic ipa te, as we have th ro ug ho ut the year in appeara nces before 

you, th at between $73 m illi on an d $100 m illion in ad ditio na l rice and 

whe at will have to be prov ide d to Cam bodia this fiscal yea r. Economic 

collapse—a nd even s tarv ation— may otherwise re sult.

CONCLU SI ON

Mr. Ch airme n, gentlem en : W e wish, as do you, to see an earl y end to 

the suffe rin g of the Ca mb odian peop le and to the destr uctio n of th ei r 

cou ntry. The o nly e quitable wav in which this can be accomplished is to 

str en gthe n conditions which will pe rm it a negotiated solution to tak e 

place. Tt is f or this purpose that ad dit ion al mili tary as sistance a nd economic assistance autho rity fo r C ambod ia is an ur ge nt necessity .

Th is request—an d the one we are subm itting sepa rately for Vi etnam —does not repres ent the be ginn ing of a new and open-en ded commitment fo r the U nited S tat es. No r does it reflect any c hange in policy 

on the pa rt of the Un ited Sta tes . The ad dit ion al f un ds and auth orities 

which we a re asking the C ongre ss t o make a vai lab le fo r C ambod ia are 

vital ly needed, for the reasons I have set fo rth, in su pp or t of a policy 

which has in large measure proven a pp ro pr iate to th e difficult circ umstan ces o f Ind ochin a. Tha t policy, borne out in the record of our 

actions, is one of steady d isengagem ent—in a manner d esigne d to pr event new uphea val s in In do ch ina, new instab ility in th e Ea st Asia 

region, and renew ed con tention am ong the ma jor powers.

Camb odia cannot be c onsidere d sep ara tel y fro m Vietn am and Laos, 

and the whole of Ind ochin a cannot be isolated fro m larg er world 

issues. The consequences of a d ecision to with hold vitally need ed a ssistance to Cam bodia would exten d beyond the confines of Indo china—- 

and they would be inim ical to the bro ad sweep of o ur int ere sts in t his 

small an d interd ependent world. Such a decision would am ount to a 

conscious act to ab andon a small country to a forc ible Communist take ­

over, an action witho ut pre cedent in our his tor y. Th e am ounts we are 

req uesting fo r Cam bodia are no t large when me asu red again st the 

sacrifices we and the people of Ind ochin a hav e alread y made. They 

are, how eve r, vital to the resto ratio n of conditio ns w hic h can lead to 

peace in Cam bodia.

Mr. P assman. We will ins ert M r. Hab ib ’s biog raph y in the record at 

this po int .

[The biog raph y follow s:]
Biogkapiiy of JIr. P h il ip C. H ab ib, Ass ista nt Secretary of State for E ast

Asi an an d P ac ific Affairs

P h il ip C har le s H ab ib of C ali fo rn ia w as sw or n in to da y as A ss is ta nt Sec re ta ry 

of S ta te fo r E ast Asian and Pac ific Affa irs , succ ee ding R ob er t S. In ge rs ol l who 

is now D ep ut y Sec re ta ry of Sta te . A car ee r For ei gn Se rvice Officer, Mr. H ab ib 

had ser ve d sin ce 1971 as A m bas sa dor to K orea .

Mr. H ab ib was bo rn on F eb ru ary 25, 1920 in Brook lyn, N.Y., an d gra duate d 

in 1942 fr om th e U ni ve rs ity of Id aho. In 1952 he rece iv ed a Ph . D. de gr ee from 

th e U ni ver si ty o f C al ifor ni a.

Mr. H ab ib se rv ed in th e U.S. Arm y duri ng W or ld W ar II. H e became a 

Tea ch in g Res ea rc h A ss is ta nt a t th e U ni ve rs ity of C al if orn ia in 1947. He was 

ap po in te d a Fo re ig n Se rvice Officer i n 1949 a nd a ss ig ne d to t he A mer ican Em ba ssy 

a t O ttaw a as an Ec on om ic Officer. H e se rv ed a t th e Em ba ss y in W ellin gton , 

N.Z., from 1951 th ro ug h 1954, and in th e D epar tm en t 195 5-57 . He su bs eq ue nt ly 

se rv ed as Pol itic al Officer a t P o rt of Sp ain , and in 15)60-61 se rv ed as th e Officerin -C ha rg e fo r Und er-D ev elo pe d A re as in th e Office of th e U nder Sec re ta ry 's 

Sp ec ial A ss is ta nt fo r Com m un ist Ec on om ic A ffa irs .

Fro m 196 2-65 he was Cou ns elor fo r Pol itic al A ffai rs a t Seoul . li e was as sign ed 

to Sa igon from 1965 to 1967, w her e he se rv ed a s P olitica l Officer w ith th e 

pe rs on al ra n k of m in is te r. H e w as D ep ut y A ss is ta nt Sec re ta ry fo r E ast Asia n 

an d Pa cific Affairs fro m 1967 to 1969, an d from 1968 to 1971 w as Se nior Adv iso r 

to th e U ni te d S ta te s D el eg at io n a t th e P ari s m ee tin gs on Vietnam .

Mr. H ab ib is m ar ried to th e fo rm er M ar jo rie W. Sl ig ht am . Th ey ha ve tw o 

dau ghte rs , Phyll is and Su sa n.

Mr. P assman. Thank you very much. Mr. Secretary.

Mr. Habib. Thank you, Mr. Chairman.

Mr. P assman. Would you care, Mr. Maw to make a statement ?

Mr. Maw. No.

Mr. Passman. Shall we move to General Fish ?

Mr. Maw. I suggest we now move to General Fish's statement.

Mr. P assman. General Fish, I believe tha t you are the Director of 

the Defense Security Assistance Agency?

General F ish. Yes, Mr. Chairman, that is right.

Mr. Passman. So Cambodia would come under your department ?

General F isii. Yes, sir.

Mr. P assman. Do you have a statement you would like to make to 

the committee?

General F ish. I do, Mr. Chairman.

Mr. P assman. You may proceed in your own way, sir.

General Statement

General Fish. Mr. C hairman and members of the committee, I a ppreciate this opportunity to appear before you to discuss the urgent 

need for additional military assistance for Cambodia.

My colleague, Assistant Secretary Habib, has already addressed 

our objectives in Cambodia and the results of the lack of sufficient 

aid to the Cambodian Government. Let me review briefly the military 

situation.

M IL IT A R Y SIT U A T IO N IN CA MB OD IA

in January 1973, the Khm er Communists mounted their first serious milita ry effort. Their goal was the interdiction of all surface lines 

to strangle Phnom Penh economically and force the fall of the government. T hat year the Communists committed 6,000-7.000 troops along 

the lower Mekong. They occupied portions of the river bank astride 

the strategic narrows controlling a sizable segment of the river southeast of Phnom Penh. These successes were short lived. Thwarted by
10

logistical inadequacies, command and control problems, and U.S. air 

support, the Khmer Comunists soon drew back. While retaining the 

ability to periodically capture terrain, isolate Khmer army positions, and harass river convoys, they failed in achieving their fundamental 

goal of forcing the collapse of the government. During the second dry-season offensive the Communists gained in 

strength, corrected some of their more glaring deficiencies, and modi­ fied their tactics. The enemy continued to build their logistical bases 

without hindrance from U.S. air. But their efforts to defeat the Cam­ bodian Armed Forces and to topple the government were unsuccessful. This year's dry-season offensive started on Janu ary 1 with coordinated attacks in several sectors around Phnom Penh and along the length of the Mekong River. During the initial stages of this offensive, the Communists seized a number of isolated outposts and weakly cle- fended villages around the perimeter of Phnom Penh. However, criti­ cal areas held and the Communists were unable to penetrate the city's main defenses or to register fur the r significant gains. By exploiting its superior firepower and mobility and the support of the Cambodian air force, the Khmer Armed Forces were able to recapture most of the territo ry lost earlier and secure the capital. I n the process the Commu­ nists suffered casualties of about 8,000 men. The Communists are using sophisticated mines, artillery, rockets, and mortar-type munitions in increasing amounts. The availability of these Chinese- and Sovietsupplied weapons allows the Khmer Communists to mount a signif­ icant challenge against convoys on the Mekong, as well as daily rocket 

attacks against civilian population centers. Initially, the government did not have sufficient forces with which to defend simultaneously Phnom Penh and reinforce isolated outposts along the Mekong. By conducting determined and coordinated attacks against Phnom Penh’s defenses which forced the commitment of forces to the capital’s security, the insurgents were able to overrun a number 

of these isolated garrisons, and gain control of long stretches of the 

river between Phnom Penh and the South Vietnam border. In consolidating th eir tactical gains. Communist forces have dug in 

troops and heavy weapons to attack convoys which must run this gauntlet. Estimates are tha t the enemy has some 41 battalions committed to interdicting the Mekong, a clear indication of the importance the Communists attach to severing this critical supply line to Phnom 

Penh. Once the government was able to stabilize the situation around the 

capital, it redirected major elements of its forces from around Phnom *

Penh to operations to clear the Mekong River. Reinforcements and additional supplies were rushed to Neak Luong, an important government control point on the Mekong River 35 miles southeast of the capital, which was under heavy attack. Riverine forces were com- a

miffed in a number of amphibious operations to seize critical vantage points along the river captured earlier by enemy forces. In conjunction with the movement of supply ships and barges during the past week the government has committed a large part of its army, navy, and air force in breaking the enemy’s grip on the Mekong. This task is not expected to be easy and will extract a costly price in men, am­ munition. and materiel, but the task will be accomplished, given U.S. 

logistic support. Ships are now getting through.
11

At the same time Communist initiatives have also been directed at 

the provincial capitals of Kompong Cham and Siem Reap. Such 

actions do not signify a serious threat to these enclaves but are an effort 

to exploit vulnerabilities created by the current preoccupation of government units, to prevent government reinforcement in other areas, 

and generally to keep government forces off balance.

PROGNOSIS

Overall, the military prognosis for Cambodia is promising. As a 

fighting force, the Cambodian Armed Forces have given a good account of themselves. While the situation on the Mekong is extremely 

serious, the Cambodian Armed Forces appear capable of dealing with 

it, if given adequate logistic support. This is presently the most pressing weakness of the Cambodian Armed Forces. They are continually 

operating on a thin margin of logistic support. For instance, during the 

last few weeks enemy pressure has caused ammunition to be expended 

at an extremely high rate with a corresponding drawdown of incountry stocks. As of February 1 the Cambodian Armed Forces in 

Phnom Penh had only a limited supply of ammunition. Similarly, 

rice and fuel have been reduced to dangerously low levels. In essence 

they must depend on outside support for survival and this is where 

U.S. assistance enters into the strategic equation. To avoid the collapse and chaos mentioned by Ambassador Habib, the V.S. has to 

provide this logistic support.

During the last few years the Cambodian Armed Forces have undergone vast improvement and although numerous weaknesses still remain. the outlook remains hopeful. Cambodia now fields a relatively 

modern, lightlv equipped army, a well-trained a ir force with effective 

combat aircraft and a modest lift capability, and an aggressive navy, 

consisting primarily of small riverine craft. Improved as they may be, 

however, the Cambodian Armed Forces have increasingly had to rely 

on the superiority of its U.S. provided firepower and logistical system 

to offset Communist advantages of surprise and aggressiveness.

u .s . ROLE

Which brings me to the U.S. role in Cambodia. Since military assistance was begun again in 1970, support has been limited both in what 

the United States can do and in the number of personnel with which 

the tasks can be accomplished. U.S. support has been logistical and 

of that, most has been in the form of combat consumables—ammunition and fuel. In essence the Cambodian Government has been provided 

the means required to defend themselves initially against experienced 

North Vietnamese and Viet Cong forces, and presently against determined Khmer Communists, still advised and equipped by the 

North Vietnamese.

M A P ASSETS AVAILABLE

The military assistance balance sheet as of 1 February is as follows:

Fiscal year 1975 authorization to date, $275 million. That includes 

the drawdown authority.

Obligations and charges under the continuing resolution against the 

fiscal year 1975 authorization, including the drawdown authority, is 

$260 million. Therefore, the fiscal year 1975 remaining is $15 million.
12

To recap then, the assets available to the Cambodians for the remainder of the year are the remaining authority of $15 million, a delivery pipeline of $42 million, and in-country stocks of about $29 

million, fo r a total of $86 million.

Costs at the current rate of intensive combat are averaging about $1.5 

million daily, of which about $1.3 million is for ammunition. The remainder is for such items as spare parts, fuel, and medical supplies.

If combat activity continues at this rate, Cambodia will start to run out 

of essential ammunition and other supplies completely in late March or 

early April. There will be no stock in country or in the pipeline to 

sustain operations.

The President has requested $222 million in additional military 

assistance for Cambodia to provide essential military supplies, 

prim arily ammunition, that are needed to permit the Cambodians 

to maintain their ability to defend themselves. There is no cheaper *

or more viable alternative available. We do not seek to build up or 

re-equip Cambodian Armed Forces; we seek only to keep them alive 

and fighting through the remainder of this fiscal year.

The request is composed of two basic elements. Ninety percent will 

be used for ammunition, POL , spare parts and other supplies needed 

to continue essential combat operations. The remaining 10 percent will 

be used to replace the most critical combat losses of equipment and 

provide items that are essential to maintaining supply lines. I will 

submit to the Committee a document which will detail how these funds 

are to be spent.

CONCLUSION

There is, I believe, only one conclusion to be drawn from the facts 

and figures. The arithmetic is as inescapable as the problem which confronts us. ITow we act upon that conclusion will determine the fate 

of Cambodia. Unless additional resources are made available, we 

shall be unable to provide the support tha t beleaguered nation must 

have to stave oft’ a Communist military takeover. Without the funds 

we are requesting, we can only watch the inevitable course of events 

which I believe it is in the national interest of the United States to 

prevent. Both that interest and the cause of world peace would be 

ill served by the withdrawal of U.S. support because such withdrawal 

would not only lead to the loss of Cambodia, but also to the even 

more important loss of confidence on the part of other allied and 

friendly nations in the validity of the U.S. commitment to international security. Such an outcome is clearly inconsistent with our own 

security and the foreign policy th rough which the United States seeks »

to obtain some of its most basic national objectives.

Mr. Chairman, gentlemen of the committee, tha t concludes my prepared statement. Again, I thank you for this opportunity to appear 

before you. **

Mr. P assman. We will insert the biography of General Fish in the 

record at this point.

[The biography follows:]

Biography of Lt. Gen. Howard M. F is h. USAF

General Fis h was born in Melrose, Minn., on August 1. 1923, and was grad uated from St. Cloud Cath edra l High School, St. Cloud, Minn., in Jun e 1941. He 

entered the Army Air Force in 1942 and served as an aerial gunner at Tyndall
Field, Fla. He entered advanced navigator traini ng at Monroe, La., in 

November 1943, and received his navigator rat ing and commission as a second 

lieu tenant in the Army Air Corps in July 1944. During World War II, from October 1944, he served as a navigator in the European Theater of Operations on a B-17 airc ra ft crew with the 419tli Bombardment Squadron, 301st Bombardm ent Group in Italy. He wag shot down over Vienna, Austria, in Feb rua ry 1945, and spent the rem aind er of the 

war as a prisoner of war in Germany. In November 1945 he attended a studen t nav igator refres her course at Ellington Field, Tex., and at Fairfield-Suisun Air Base, Calif. In Febru­ ary 1946 he was assigned as assis tant sta tistical control officer, Chanute Field. Ill., and in April 1946 he was transf err ed to Orlando, Fla., for statistical 

control indoctrination training. General Fish returned to Germ any in July 1946, serving first in Berlin, at Tempelhof Air Base, and later in Wiesbaden as a sta tistic al control officer. 

He also flew in the Berlin airlift. He returned to the United Sta tes in July 1949, and traine d as a navigator- bombardier at Mather Air Forc e Base, Calif. In April 1950 he was assigned 

to the 84th Bombardment Squadron at Langley Air Force Base, Va. During the Korean war, in Ju ly 1950, he was tra nsfer red to the 162d Tactical Reconnaissance Squadron, which was immediately sent to Korea where he flew 63 combat missions. General Fish lat er served as a navigator on the crew of the commanding general, Eig hth Army in Korea. In March 1951 he was assigned as Chief, Program Analysis Section, 374th Troop Ca rrie r Wing, Fa r Eas tern Air 

Forces. He returned to Langley Air Forc e Base in June 1951 to tra in replacement combat crews for B-26 airc ra ft units in Korea. Ini tially he served as a squadron nav igator in the 4400th Combat Crew Training Group and later as a squadron 

executive officer and group dir ector of operations a nd training. In Janu ary 1954 General Fis h attended the Air Command and Staff College, Maxwell Air Force Base, Ala. He retu rned to Langley Air Force Base as executive 

officer for the 405th Fighter Bomber Wing. In June 1956 he ente red the University of Chicago and gradua ted in August 1957 with a master’s degree in business adm inistration. He became a member of 

the business scholarship fraternity, Beta Gamma Sigma. He was tr ansfe rred to Europe in October 1957, serving first as wing comptroller for the 60tli Troop Ca rrier Wing at Druex Air Base, France, and then as comptroller, 7310th Air Base Wing. Rliein-Main Air Base, Germany. In July 1960 he entered the Armed Forces Staff College at Norfolk, Va.. and in Janu ary 1961 he was assigned as dire ctor of d ata autom ation, and lat er as assist­ an t deputy chief of staff, comptroller, Headq uarters E ast ern Tr anspo rt Air Force, 

McQuire Air Force Base, N.J. In August 1963 he entered the Air War College, Maxwell Air Force Base, Ala., and while there, received a master’s degree in intern ati onal affairs from the George W ashington University . In J uly 1964 he was assigned as a plans a nd pro­ gram s officer in the dir ectora te of plans, Headq uar ters U.S. Air Force. Washing­ ton, D.C. He was named assis tant f or analysis to the deputy director of plans for 

force development in December 1967.

In March 1969 he was named dire ctor of tactica l analysis, 7th Air Force, Tan 

Son Nhu t Airfield, Republic of Vietnam.

General Fish returned to He adquarters U.S. Air Force in July 1970 as the depu ty director of doctrine, concepts and objectives, deputy chie f of staff, plans and operations. He was appointed Deputy Director of the Budget, Office of the Comptroller, in Feb rua ry 1971 and became Directo r of the Budget in October 

1973.

On August 1, 1974, General Fis h assumed the dua l-ha tted title of Director. Defense Security Assistance Agency, and Deputy Assistant Secretary of Defense (In ter natio nal Security Affairs) for Security Assistance.

His milita ry decorations and awards include the Legion of Merit with one oak lea f cluster. Distinguished Flying Cross w ith one oak lea f cluster, Air Medal with fou r oak leaf clusters, Air Force Commendation Medal, and the Purp le Heart. He holds a master naviga tor rating.

General Fish is marrie d to the former Jam ie Ka therin Tom of Corpus Christi Tex. They have one son, Howard Math Fish.

He was promoted to the gra de of lieu tena nt general effective October 4 1974 with d ate of ran k October 3,1974.
14

Mr. P assman. I shall ask the clerk to keep time. When I have consumed 5 minutes, call it to my attention so that I may yield to the 

other members.

IN DO CH IN A COSTS

General Fish, as we think of Indochina, I guess we are thinking 

of Laos, Cambodia, and Vietnam; is th at correct?

General F ish. Yes,sir; I would say that th at is true.

Mr. P assman. I f we go back to the record, we find th at our intervention in Indochina economically, and I may say militarily, started 

under President Truman. I think tha t under President Truman we 

spent $1,300 million in Indochina. Tha t was $800 million in economic 

assistance and $500 million in military assistance.

Then if we look at the gran d total over a period of 20-odd years, we %

have put over $150 billion of our resources in Indochina, plus 58,000 

lives and I believe some 308,000 casualties.

Where do we stop and is there a justification for continuing this 

type of aid? We are going to be responsible, but we want more than 

just a request. We want something rather conclusive that this won't go 

on and on and on into the future.

Repeating, if I may, over $150 billion of our resources has been put 

into this one area.

Would you like to comment on that, Mr. Secretary ?

Mr. Maw. Mr. Chairman and members of the committee, I am afraid 

it is bevond our power to foresee the end of the Communist pressure 

in Southeast Asia. We hope and believe th at in Cambodia, if we will 

help the Khmer Republic stay alive, that our efforts and the efforts 

of others to bring about a political settlement will be successful.

At the moment what we are hoping is to enable these people to 

get through the current dry season, and not to force them to give 

up at this point. We believe and hope tha t there is the possibility 

of a political settlement in Cambodia. Jus t when is not for us to 

determine. It takes two sides to make a settlement.

Mr. Passman. Thank you, Mr. Secretary.

DEPEND ENCE ON U. S. ASSISTA NCE

In November 1973 when Mr. Rush was testifying on behalf of 

emergency aid for Cambodia he said: “I would say this: We are sure 

without supplying this $200 million from some source Cambodia 

does not have a chance because they have no bullets to shoot. If we *

give it to them they have, we hope”—restating—“we hope, at least a 

50-50 chance to survive; 50-50 means simply this: no one can be 

certain about the outcome of a war of this type.”

As I say, we want to be completely factual. This is serious busi- -

ness. A few individuals meeting at the White House won’t solve your 

problems. Policy is one thing but convincing a committee that this 

is not going to go on and on is something else.

Are you familiar. General Fish, with this testimony of 1973 ?

General Fish. Only in general, sir. I was not in my present duties 

at the time, but I have reviewed it.
Mr. Passman. If it was only a 50-50 cliance then, and tha t was 

questionable, what would be the odds at this time tha t putting addi­ tional funds in Cambodia would bring the desired results?

Mr. Habib. Could I address the question, please, Mr. Chairman ?

Mr. Passman. Please do, Mr. Secretary.

Mr. H abib. Mr. Chairman, the question you are asking boils down in my mind to th is : Is the United States prepared to supply the re­ sources necessary to a people and to a nation prepared to defend 

themselves ? To be answered properly the question must take into account what is it tha t those people have demonstrated of the desire to defend them­ selves? What is it tha t the United States has given them a right to believe th at they can expect from us, whether or not they use the ma­ teriel we provide properly in defense of themselves, and whether if we continue to provide that material they will continue to defend 

themselves. I submit th at the record to date is th at they not only wish to defend themselves, they have demonstrated tha t they are prepared to give 

their lives in defending themselves. One can go back historically, but just take the recent offensive with which we are dealing now, which has led to this request from the President to the Congress. Since the beginning of this year, since the first of January when the current offensive took place, Cambodian casualties on the side of the Government of the Khmer Republic—- military casualties—have been running at an average weekly rate of 

over 800 dead.

Mr. P assman. I am sorry, Mr. Secretary. My 5 minutes are up and 

I am going to abide by the rules.

Mr. Habib. May I complete my sentence ?

Mr. Passman. Yes, go ahead.

Mr. H abib. I am sorry if I take too much of your time.

Mr. P assman. I must respect the rules of the committee.

Mr. H abib. I don’t want to take too much of your time.

Mr. Passman. It is not my time. You have already used it.

Please proceed.

Mr. Habib. What I am trying to demonstrate is that the capacity of these people to resist is proven. The relationship to that desire to defend themselves is proven. The only thing that remains to be demon­ strated is whether or not the United States is prepared to continue to provide the resources for these people to defend themselves.

Mr. P assman. Prov idin g we are able to do so you mean?

Mr. Habib. Provided we are able and willing to do so. That is a 

choice that the Congress has.

CONT INUE D ASSISTANCE QUESTIONED

Mr. P assman. We might be willing but a fter all we have gone pretty 

far afield. A the expense of being repetitious. $150 billion of our re­ sources has been put into this one small area along with some 58,000 lives and 308,000 casualties and it doesn't seem to be improving. It 

looks like it is deteriora ting very rapidly.
16

We understand that the fiscal year 1976 budget was presented to the

Congress today. Outlays will amount to $350 billion, with a deficit of 

some $55 billion. You see on the record tha t the deficit is going to be 

$52 billion but that is based on the unified budget. We bring it down 

to $52 billion only by taking all the surpluses in the trust accounts such 

as social security and railroad retirement. If you leave these trust 

funds out, you are approaching $55 billion and we are in a deepening 

recession.

In light of this situation, I am of the opinion that you are going to 

have to do an awful lot of justifying this year, if we are going to continue pouring billions of dollars into an area where the chances are 

not even 50-50 for survival.

T will return later.

Mr. Shriver?

SUPPLEMENTAL AUTHORIZATION REQUEST

Mr. Siiriver. Thank you, Mr. Chairman.

This amount that you are requesting is not yet authorized; is that 

right?

Mr. II arib. That is correct, sir.

Mr. Shriver. What is the status and the outlook for that authorizing 

legislation?

Mr. H abib. As I understand it, the legislation will be presented this 

week. The Presidential request is, however, before the Congress, and I 

think it is on the basis of the Presidential request th at the chairman 

requested this presentation on our behalf.

Mr. Siiriver. Before the authorization?

Mr. Habib. Yes, sir.

Am T correct, Mr. Chairman?

Mr. Passman. If the gentleman will yield ?

We sat here last year and waited until December 10 before the authorizing committee ever b rought out an authorization bill. It didn't 

clear conference until December 18. I don’t know when you will ever 

get an authorization bill on this request, but I know we are going to 

have to finish this foreign aid bill and move along to the next foreign 

aid bill.

AI D PROVIDED BY O TH ER CO UN TR IES

Mr. S iiriver. W ould you tell us which other nations are contributing to th e defense of Cambodia, and the dollar amounts?

Mr. Habib. If I may turn, for a moment, sir-----

Mr. Siiriver. Are you going to submit it ?

Mr. H abib. There are so many statistics available between the black 

covers that tha t would probably be best. The principal economic assistance to Cambodia is covered under what is called the ESF , the Ex ­

change Support Fund. In calendar year 1974—these are done on a 

calendar year basis—Japan provided $7 million to that fund. The 

United Kingdom provided $500,000 to that fund. Thailand provided 

8250.000 to that fund. New Zealand provided $142,000 to the fund. 

Malaysia provided $10,000 to the fund. The United States provided
17

$11,870,000 to tha t fund. Cambodia provided $4,106,000 to that fund. 

The total of the fund is $23,856,000, of which the third country total, 

tha t is neither the United States nor Cambodia, amounts to $7,880,000.

In addition to tha t, under the Exchange S uppo rt Fund, assistance is 

also provided through bilateral funds made available directly between 

third countries and Cambodia.

I would submit the entire thing for the record, but let me just give 

you an example of what is involved in that. Bilateral assistance from 

France to Cambodia for education, agriculture and advisory services 

came to $1,150,000. This is in addition to the $7 million I spoke of 

earlier. From Jap an, $1,300,000 was in the form of a gra nt of rice, 

4.800 metric tons. They also provided something less than $100,000 in 

ambulances and prefabricated housing, and of course there are scholarships and other technical assistance, the dollar amount of which is 

not stipulated.

In addition the United Kingdom provides another almost $300,000 

to the ES F tha t I spoke of earlier. You can go on down the list.

In addition, of course, the United Nations agencies have been pr oviding economic assistance to Cambodia. The International Committee of the Bed Cross has provided almost $100,000. U.N. agencies in 

total have been providing $7,800,000 in health and humanitarian 

assistance.

Mr. Shriver. Why don’t you put that in the record ?

Mr. H abib. I think we will put the whole table in the record. Prob ­

ably that will be just as well. I wanted to give you some idea of the 

sweep of tha t kind of assistance coming forward. None of this is 

military assistance, all in the economic sphere.

fThe table follows:]

OTH ER DONOR ECONOM IC AND HU MA NIT AR IAN ASS IS TA NCE IN CAM BOD IA 

A. EXC HAN GE SU PP OR T FUND 

[In millions of dollars]

Calendar year—

1972 1973 1974

Japa n...... .........................

Aus tra lia...... .....................

United King dom ...............

Th aila nd___ x...................

New Zea land.....................

M al ays ia .. .......................

United States....................

Cam bod ia..........................

Total......................

Third-countr y total

5.50 0 7.00 0 7.000

1.000 1.00 0 . . .

.52 2 .51 4 .47 8

.25 0 .25 0 .25 0

.12 0 .12 0 .14 2

. 100 .100 .01 0

12. 500 17. 500 11.870

15. 000 8.60 6 4.10 6

34. 492 35.000 23. 856

(6. 992) (8. 89 4) (7. 880)
18

OTHER DONOR ECONOMIC AND HUMANITARIAN ASSISTANCE IN CAMBODIA 

B. OTHER ASSISTANCE 

[In millions of dollars)

Amoun t Purpose

Calendar year 1973:

Bila teral:

France...................... ................................. 1.150

Japan.......................................................... 1.300

.09 7

(*)

United Kingdo m....................................... .29 7

Israel............... .05 2

Australia ____________ ( ')

Thailand.......................................... (')

New Zealand..... ............ (*j

Switze rland..................................... .280

Ita ly..................................................... .060

Sin ga por e. .............................................. (*)

Internation al organizations:

ICRC and related agencies..................... 0.280

U.N. agencies........ ................................... 7.800

For education, agricultural and public sector advisory 

services. The bulk of this sum is accounted for by 

the provision of French teachers to lycees and 

universities.

4,800 MT rice grant.

Ambulances and prefabricated housing.

Scholarships for study in Japan, dollar amount and 

number unknown.

Grant for dis tribution and use of fertilizers plus 8 

scholarships to the United Kingdom.

Advisory services of 2 agronomists.

12 scholarships.

3 scholarships.

Food and medical supp lies plus 10 scholarships. 

Medical supplies.

Refugee relief.

16 scholarships.

Humanitarian assistance.

Health and humanitarian assistance. Much of this 

money is given for activities of a long-term nature 

and expenditures during calendar year 1973 are 

unclear.

Estimated calendar year 1973 to ta l. . 15.34

Calendar year:

Bilateral’ . . . .................................................... (’ )

Internatio nal Organizations: Asian

Internatio nal Organizations: Asian Chris- .094

tian Service.

2 medical teams plus other assistance to refugees as 

needed.

Total calendar year 1974 (additional .094

inputs not known at this tim e).

1 Not available.

2

 Indonesia promised technical assistance for the ESF and Austra lia has provided an unkn own amount of assistance. 

• Unknown.

AID AND ARMS AVAILABLE TO COMMUNISTS

Mr. S iiriver. Do you have an estimate as to how much assistance, 

military or otherwise, has been given to the Communists ?

Mr. I Iabib. It is very difficult to break these figures out.

Mr. Siiriver. Do you have an estimate ?

Mr. II abib. No, sir; not precisely. I would put it to you this way: 

The flow of resources to Cambodia comes thriugh Hanoi basically. The 

flow of resources into Hanoi, principally from the Soviet Union and 

China, with some coming from the Eastern European countries, is 

then sort of carved up. Some of it goes down to South Vietnam, some 

of it goes to Cambodia.

The resources available, however, cannot be broken down as to 

amounts or dollars. In the first place, the methodology fo r determining it is not tha t precise.

As best one can tell—and this is what you would call a battlefield 

view—the Communist forces in Cambodia during this campaign have 

prepflsitioned and supplied the ir resources unstintingly. There doesn't 

seem to be any limitation on the amount of ammunition they have
19

been firing to date. It all comes down the trai l. It is all stoc kpiled, 

and it is all used somewhere f orward.

I can’t give you an accu rate figu re how much the Camb odian Com ­

munists got in do lla r terms , because obviously the Comm unists don’t 

hold he arings like this. Nobod y has to testify to where the fund s go. 

Nob ody has to publicize th e figures in th e m anner that we do.

Mr. S hriver. I t hi nk I ha ve t ak en up my time.

Mr. P assman. Th an k you, Mr. Shriv er.

Mr. S hriver. Tha nk you, Mr. Secre tary.

LIMITED AL LIE D AID TO CAMBODIA

Mr. P assman. T he figures you just rea d into this rec ord co ncerning 

th ird- co un try aid to C am bodia , the members in th is room could almo st 

pu t up wh at you listed there . I t is sim ply pe an uts comp are d to what 

we hav e given.

Mr. H abib. It is a very sm all fractio n.

Mr. P assman. Th e figures you rea d off t here, the chances are some of 

the sma ll ban ks are ca pitaliz ed fo r more th an t h at; isn’t t hat rig ht ?

Mr. I I abib. The figure fo r Cambodia doe sn’t ap proa ch that.

Mr. P assman. It is a sm all am oun t.

Mr. I Iabib. Yes, s ir ; it is a fracti on .

Mr. P assman. Mr. Long?

jus tification for continued expenditures questioned

Mr. Long. Mr. Se cretary, th is question of South east Asia has occup ied my entire 12 years in Congress. D ur in g my firs t 2 yea rs on 

the Arm ed Se rvices C om mittee we were to ld the adm inist ratio n needed 

ju st a lit tle while lo ng er; th at thing s were go ing to get be tte r; t hat the 

lig ht was at the end o f th e tu nn el.

My amend ment of May 1973, now law, was the firs t to expli citly 

forbid th e use of funds for com bat op era tions in So uth east Asia. W hen 

we pu lle d out our tro ops, it was with a com mitment to continu e to 

su pp ly the means fo r the Vietnamese and the Camb odian s to carry on 

wi th the ir own defense. De spite many close p red ict ions th e V ietnamese 

and th e Cam bod ians hav e h eld up r em ark ably well. I th in k we will all 

concede th at.

Nevertheless, they are s till on the defensive, w ith no observa ble pro spect o f de feating the Com mu nists, and we h ave to ask ourselves, where 

do we go from here ?

I am conscious of the huge inpu t of blood and tre asure the Un ited 

States ha s pu t into So uthe ast Asia. My own son foug ht the re. We 

spen t a ye ar of gr ea t an xiety while he was fig hting there. He was 

wou nded twice. I hate to see th is effort com pletely lost, and yet what 

is ou r sta ke left in So uthe ast Asia th at justifies the continued flow o f 

arm s and food af te r so ma ny years ? Th at is one question I wan t to 

ask you.

W ha t are the pro spects fo r the end of all this, th at gives us any 

be tte r reason for hop* th an wh at you people were able to give me 12 

ye ars ago when I asked these questions before the Arme d Serv ices 

Comm ittee ?
20

QU ES TI ON OF C O N TIN U ED U-S . SU PP OR T

Do you see the American people continuing to support the war? 

This year we may get it throu gh, but will we do it next year and the 

year afte r?

IIow long are we going to c arry this on out of pure humanity from 

the standpoint of the Cambodian people, who are very lovable people? I have been there, and I have great compassion for them. We 

took the war to them. We have a responsibility, and yet I don t see 

the American people continuing to support this thing forever. Therefore, if eventually we will get out, why not now ?

Mr. H abib. Mr. Congressman, that is a very wise statement and I 

would like to answer it as best I can.

First of all, no one is coming to you today and telling you we see 

the ligh t at the end of the tunnel. I have never used that expression 

myself and I don’t intend to use it today. T will say to you this, in all 

honesty: If you don't provide them the resources they cannot defend 

themselves and they will go down.

Xow the administration has made the determination tha t the resources are necessary. It is up to the Congress in its wisdom to decide 

whether or not it will appropriate the money.

In my opinion the choice is clear in Cambodia. It is as clear as night 

from day. If you don't provide the resources, they are going to go 

down.

Xow the question is, as you recognized yourself, what stake do we 

have in it? You recognized also, however, that we had led them to 

believe that we would sustain them.

U .S . C O M M IT M E N T

The commitment of the United States to sustaining people who 

are prepared to defend themselves goes far beyond Cambodia. The 

commitment of the United State s to people that we will sustain you, 

if you are prepared to defend yourselves is implicit in every mutual 

security treaty, in every obligation that we have to countries all over 

the world.

If you look at Asia and you start at the arc of the north, and you 

go around and you tick off where you have a mutual security treaty, 

and then to those countries and ask their leaders what they think 

of the U.S. commitment, you will find very often, as I have found, 

that they look to what happens in Southeast Asia as an indication 

of U.S. willingness to provide the wherewithal that goes with the 

commitment.

GUAM DOCTRINE

When we enunciated the Guam doctrine we told people like the 

Cambodians ‘‘If you fight for yourselves, we will help you.*’ We 

have the same problem in Israel. We have the same problem in other 

parts of the world. Fundamentally, we have the same problem in almost any country, in every country with which we have a mutual 

security treaty.
21

NEED FOR RESOURCES

Some of them are better able to defend themselves with their own 

resources. These people have no resources to defend themselves. If 

they are going to go down, it is because we don't provide the resources. 

It won’t be because they are not willing to fight.

The question then in the end comes down to: Are you willing to 

let them go down without providing them something that we have 

given them every indication over the years that we would continue 

to provide them ?

IIOW LONG CONT INUE SUPPORT

Mr. Long. I recognize what you say is true. If we don’t help them 

now, they may go down; but you haven’t raised the question of how 

long we are going to carry on letting those people suffer casualties 

of many thousands a month, and in the end to possibly draw out.

If we don’t have the staying power for this war. are we doing the 

kind thing by keeping this poor patient alive and suffering a little 

longer ?

Mr. Habib. The answer doesn’t lie in our hands alone. The answer 

lies in part in the hands of Hanoi and the people who support it. 

IIow long are they willing to go on providing the resources necessary 

to do what they are trying to do?

Mr. Long. Forever, I am afraid.

Mr. Habib. I am not so sure of tha t, sir. I am not so sure. The 

answer also lies in the hands of the people of Cambodia, and South 

Vietnam also, whether or not they are prepared to continue to defend 

themselves.

I argue tha t in both cases we know tha t they are prepared to 

continue to defend themselves, and we have all the evidence that the 

other side is prepared to carry the fight.

However, the answer really in the end comes when can you get 

back to the peaceful settlement tha t was envisaged in the Paris 

Agreement, and I would submit—T don’t want to take any more time, 

Mr. Chairman—that the answer to the problem in Indochina as a 

while, not simply in Cambodia, is a cessation of hostilities and a 

return to what is provided for in the Paris Agreement.

COMPROMISE SETTLEMENT

The people of Phnom Penh have no objection to sitting down and 

talking about a compromise settlement. They say it every day. They 

would welcome that opportunity, but the fellow on the other side 

isn’t prepared to.

Mr. Passman. I don’t mean to cut you off, bu t we do have certain 

rules and I know the committee members are going to insist that we 

abide by them. When we return later, you can elaborate in great detail.

Mr. Habib. I apologize, Mr. Chairman. It is just that the questions 

are worthy of a thoro ugh answer, and I don’t like to give short syllabic 

answers to such a question.

Mr. Passman. I know. We will be coming back to you later and then 

you can elaborate at length.

Mr. ITabib. I apologize again.
22

Mr. P assman. You owe no apologies.

Mr. Coughlin?

Mr. Coughlin. Thank you, Mr. Chairman.

STRATEGIC VALU ES OF CAMBODIA

Mr. Ambassador, I guess we have gone around this question some but 

J still don't think we have gotten the answer to it.

As I look at the map behind you, I have a very difficult time u nderstanding what the strategic value of Cambodia is to the United States.

Do we import any oil or minerals from there?

Mr. H abib. No ; the United States doesn't look upon our activity in 

tha t area as something we get some profit out of, Mr. Congressman. 

Indochina, as a whole, has been conceived of as a strategic position 

in Asia historically for about as long as you can thin k of. In the im- *

mediate postwar period, you will recall the concern that was expressed 

at tha t time for the maintenance of our position in that part of the 

world.

Mr. Coughlin. Wha t is it ?

Mr. H abib. Strategically located with respect to the channel, to the 

lines of communication in Asia. It is strategically located with respect 

to the general obligation-----

Mr. Coughlin. Cambodia is ?

Mr. U \bib. Cambodia by itself is only part of the area. You can’t 

just look upon it in isolation. That is why in my statement I tried not 

to just deal with the problem of Cambodia. If you look upon Cambodia 

just in isolation, you might say the same thin g about Laos. You might 

say the same thing about Belgium for tha t matter. Is Belgium in and 

of itself strategic or is it only a p art of an area ?

U .S . IN TER EST J U S T IF Y IN G F U R T H ER AID

Consequently, you can't justify your interest in the area simply on 

the basis of one country as against the others. You can’t justify it alone 

on the basis of geographical location. What we have tried to do is 

to------

Mr. Coughlin. What can you justify it on ?

Mr. Habib. In terms of o ur total posture in the area, our total approach to the question of stability and peace in the area, to a total 

question of the kind of commitments we have made to individual countries within the area. Then I think you begin to approach a degree of 

justification from the standp oint of the interest of the United States. -

Because in the end, if you can’t justify it from the standpoint of the 

interest of the United States it doesn’t have a justification for the expenditure of our resources.

We look upon Cambodia as part of Indochina. We look upon Indo- *

china as part of Asia. We look upon our whole approach to our association with countries of this region as part of our total global policy. It 

is not a question o f isolating it from our global policy. It is not a 

question of isolating our commitment from our other commitments.

It's the only way 1 know how to answer tha t question.
RICE PRODUCTION

There isn't anything in Cambodia that we need in tlie way of resources. The only thing they produce in any large amount is rice. I know a place in the South where they can outproduce them in rice any 

day of the week.

Air. P assman. I believe you are talking about Louisiana.

EFFECT OF AID CUTOFF

Air. Coughlin. In your prepared statement, you indicated that a 

decision to abandon Cambodia and permit a Communist takeover 

would be without precedent in our history.

Air. Habib. Yes.

Air. Coughlin. Our policy then is to prevent a Communist takeover 

anyplace in the world.

Air. H abib. No, sir. I didn't say that. I said the abandonment of the 

kind of commitment th at we have placed would be without precedent. To let that country go down without precedent, yes, sir. If the Congress in its wisdom makes a conscious decision not to provide the resources tha t are necessary to sustain the defense of Cambodia, Cambodia will go down. That will be the first time in our history that we have ever not provided the resources in a circumstance like this to somebody who is prepared to defend themselves. The Congress can in its wisdom make tha t decision. I do not challenge th at. But at least it ought to be 

clear that unless they get the resources, they will go down. AVhat goes down and how it goes down is another question. There, I think you have got to ask the Cambodians. The Cambodians, who were described as a very gentle people—ami that is a very accurate description of them, for every Cambodian I ever met is gentle—how they can go on killing themselves the way they do makes you wonder. 

They are all gentle.

OBJECTIVE OF U.S. AID

The question is what are they defending themselves against ? And why did we originate our support for them? Fundam entally and basically the war in Indochina has been one between those who have opposed Hanoi and those who have been on Hanoi's side trying to extend power and auth ority through the use of military force. No matter how you p aint’the war in Indochina, that is what it has been all about. No matter what you want to call it. there are contending forces, for better or for worse, that the United States has committed itself to one side in that contention. I submit, and that is why I made tha t statement, tha t if you withdraw support, that side to which we 

commited ourselves cannot sustain itself.

Air. Coughlin. Thank you. Air. Chairman.

national security policy

Air. Passman. I believe that beginning with the Truman administration. followed by the Eisenhower administration, the Kennedy administration, the Johnson administration, the Nixon administration, and now the Ford administration several trouble spots: namely. Korea. Cambodia. South A’ietnam, and Israel are all considered in
24

the identic al catego ry policywis e as fa r as our na tio na l sec urity is 

concern ed, is th at tru e ?

Mr. H abib. I would agree with th at sta tem ent, yes, sir.

Mr. P assman. Th an k you very much.

Mr. H abib. As a general princ ipl e I would agree with th at stat emen t; yes.

Mr. P assman. Th an k you very m uch.

Mr. H abib. As a gen era l princ iple I would agree with that.

Mr. R oush. Th an k you. Mr. C hairm an.

M U TU A L SE CURI TY TR EA TI ES

Mr. Secre tary. T find it very difficult to follow y ou whe n you a tte mpt 

to ju st ify th at t his en deavor is in the best int ere sts of the Un ited State s 

at a tim e when we are un de r such domestic bu dg etary restraints and 

constra int s.

I he ard you mentio n a mom ent ago th at we wou ld be letti ng down 

those, cou ntries with which we do hav e mu tua l security tre ati es and 

th at it is in the best, int erests of th is cou ntr y that we no t let th em down. 

Wou ld vou tell us ju st w hic h cou ntri es you are re fe rrin g to?

Mr. H abib. Yes, sir. T do n’t, th in k th at there is any question but 

th at , thr ou gh ou t Asia. Indo ch ina is looked u pon as a t est o f the A me rican com mitmen t to w hat we set out to do. We have a mu tua l sec uri ty 

tr ea ty with Ja pa n. W e h ave a mu tua l security trea ty wi th th e Philip ­

pine s. We have a mu tua l security trea ty with the Re public of China . 

We have the AN ZU S Tre at y wi th Aus tra lia and New Zealand. We 

hav e th e residu al oblig ations of the SE ATO Tre aty, which includes 

Th a ilan d. I am no t speakin g of any ot her ob ligations we have elsewh ere 

in the. world.

Let me jus t tak e Asia pe r se. I have yet to ta lk to a resp onsible 

Asian lea der who does not look upon the ma nner in whi ch we resolve 

ou r role and o ur sacrifices in South eas t Asia as directly b earin g upon 

th ei r own view of the relatio ns hip between Am erican com mitmen ts 

to th ei r own country and the pos sibility of t he ir own fu ture s ituation. 

Tha t inter relat ion ship is ve ry clear in th ei r m inds.

U .S . FOREIG N AFF AIR S ROLE

Now, one can arg ue why is it the United St ates ' res ponsibility? 

Som ehow or oth er, over the se decades th at the ch air ma n has spoken 

of. the Un ite d State s ha s assumed the deg ree of res ponsibility th at 

goes with its nation hood an d its pow er and its attit ud e tow ard the 

rest of th e world.

T am j us t as c ogn izant as any one else of o ur own need s and our own 

requirements. Bu t I ha pp en , because of my pro fession, to be equally 

cogniza nt of the role of ou r forei gn aff airs and ou r forei gn inte rests 

in o ur total policy requ ireme nts.

I am argu in g in th is case th at we hav e deve loped a series o f commitme nts a rou nd Asia and ar ou nd the world th at are influenced by wha t 

happ ens in So uth eas t Asia.
25

AID FROM OTHER ASIAN COUNTRIES

Mr. Rousii. I don’t see the other countries of Asia rushing to the 

aid of Cambodia and depleting their resources and their tax dollars. 

You mentioned Japan. Japa n surely would be in a good position to 

assist in this endeavor i f they were called upon to do so. New Zealand 

and Korea, I don’t see them rushing in. Why is it tha t this whole 

burden must be borne by the United States and placed on the backs 

of our taxpayers at a time when we can’t even build sewage plants 

within our own congressional districts and we can't take care of the 

needs of our elderly people and our poor people ?

Mr. Habib. I have no answer for you, if you want to ask me why 

they don't put up more. I would hope th at they would. They have at 

times in the past. I would remind you tha t at one stage there were 

» two and a half Korean divisions in South Vietnam.

Mr. R oush. This is Cambodia. This isn’t Vietnam.

Mr. Habib. In the case of Cambodia there have been economic funds 

coming forth inadequately, fractionally compared to us. They haven't 

v accepted the responsibility that we have accepted, I am sorry to say.

Tha t is a fact. But does that change our responsibility any less ?

Mr. Roush. Nor should it make it any more.

Mr. Habib. Sir, I wish it didn’t exist. But we took on the responsibility. I am not arguing that we don’t have one. I am arguing that if 

we have one, there is only one way of exercising it. If you want to 

abandon the responsibility, there is onlv one way of doiim it, tha t is 

pulling out.

When we negotiated the Paris Agreement we thought we had found 

the solution to do it in a more peaceful manner.

CAMBODIA AND THE PARIS AGREEMENT

Mr. Roush. Cambodia wasn’t a party to the P aris Agreement.

Mr. H abib. Cambodia is covered under the Paris Agreement.

Mr. R ousii. But Cambodia was not a party to the Pa ris Agreement.

Mr. Habib. But it ’s covered under the Paris Agreement. North Vietnam engaged itself not to do certain things in Cambodia, which it has 

been doing.

Mr. Rousii. Mv time is up, Mr. Chairman.

Mr. Passman. Thank you.

Mr. Obey?

U.S. DISENGAGEMENT

fk

Mr. Obey. Mr. Secretary, you indicated in your statement that one 

of our goals is to preserve the m ilitary balance and thereby to promote 

negotiations.

» Air. Habib. Hopefully.

Air. Obey. You also indicated a little later that our policy had 

always been one of steady disengagement. How are we supposed to 

take those statements in ligh t of the statement bv General Fish that 

the Cambodian armed forces have increasingly had to rely on superiority of U.S. provided fire power? That doesn’t spell disengagement 

to me.

Air. H abib. I will explain it to you as best I can. I would like to come 

back to the agreement because the agreement is relevant.
26

The resupply of forces and the supply of forces, the contending 

forces in Cambodia, is a two-track affair. Some of it comes to the Communists and some of it comes to the government. The degree of supply 

on the other side, the forces to support it, and the use to which those 

forces have been put have led to a general escalation in the level of 

conflict. If you escalate the level of conflict you require more resources. 

INCREASED RELIA NCE ON V.S. FIREPOWER

Mr. Obey. I understand tha t, but we have only 5 minutes. I would 

like some short specific answers on that question. How do you define 

the Cambodians increasingly relying upon the superiority of U.S. 

provided firepower with the assertion that our policy has been to 

gradually disengage ?

Mr. H abib. Our policy has been to disengage the United States. We 

have disengaged the United States. Our policy was to disengage in 

Cambodia. We have not been able to.

IM PL ICAT IO N OF LONG-RANG E CO MM ITME NT S

Mr. Obey. Let me ask you another question. You say, “We have no 

open-ended commitment.” Yet you asserted that the question is simply, 

in your words, “Whether the United States is willing to continue to 

provide the resources necessary.” That sounds to me like you are implying we have one heck of a long-range commitment.

Mr. H abib. No. I would think that if one could bring about the kind 

of negotiated settlement that we thought we had achieved in the Paris 

Agreement, or to bring about the implementation of the Agreement, 

you wouldn’t need another military dollar going into the area, technically speaking.

Mr. Obey. Fine, but tha t is a hope and we have been going for 12 

years on hope. General Fish said that, “We only seek to keep them alive 

and fighting through the remainder of this fiscal year.”

Mr. H abib. With these funds, he meant.

Mr. Obey. I think the question everybody has in his mind is what 

about the next year and the next and the next.

Mr. Habib. I think he meant with the funds being requested for this 

fiscal year. As you know, there is a presentation that came forward 

today.

Mr. Obey. Maybe it ought to be open ended, but my point is you 

ought to be honest with them.

Mr. Habib. I am trying to be honest, Mr. Congressman.

Mr. Obey. But it seems to me when it’s asserted we don’t have an 

open ended commitment tha t is not being honest with the American 

people.

commitment not open ended

Mr. Habib. The commitment is not open ended if one can bring 

about the reestablishment of some measure of nonwar in the area—if 

you want to call it peace.

Mr. Obey. In the name of heaven, how long is th at commitment to 

last?
Mr. Habib. Nobody honestly can tell you in Cambodia. Can you tell 

me how long the enemy of the Cambodians, not mine any longer, will 

go on?

Mr. Obey. Absolutely not. That is precisely my problem.

Mr. Habib. Th at is exactly the nature of the problem.

Mr. Obey. Mr. Secretary, I understand your situation. But if I could 

draw an analogy, it seems to me like we have a big gallon of milk here 

which has turned sour and you have got somebody hoping that if we 

add a few drops of sweet milk to it through an eyedropper each day 

that through some magical formula it’s going to turn the sour milk 

sweet. I just don’t think it is.

Mr. H abib. I don’t thi nk anybody has tried to say that. You notice 

I have been very careful not to make false promises as to what can 

be done with the resources available. I think we have tried to be 

absolutely frank with the committee as to what the nature of the 

problem is and what the requirements are. The committee in its wisdom 

will decide. If there are any facts tha t are not clear, I will try to 

clear them up. But judgments as to what is going to happen at 

some indefinite time in the future, we are incapable of making them.

china

Mr. Obey. Let me ask you one last question about the same thing 

Mr. Coughlin asked you. You indicated that, “Such a decision would 

amount to a conscious act to abandon a small country to a forcible 

Communist takeover, an action without precedent in our history.” 

IIow do you reconcile tha t with the history of China ?

Mr. Habib. We didn’t have the same commitment.

Mr. Obey. LIow many years have we supported Chiang Kai-shek 

in China against the Japanese and then against Mao?

Mr. Habib. Remember what happened. You had a complete military 

defeat and they retreated to the island. We have sustained them and 

supported them in that regard ever since under the mutual security 

trea ty—a mutual security treaty which was negotiated, if I recall 

correctly, in 1954.

Mr. Obey. T think tha t when you compare Taiwan to mainland 

China it is really stretchin g a rubber band.

Mr. Habib. It was lost momentarily. At the present time most of 

Cambodia is in the hands of the-----

OUT COM E OF MILIT AR Y STRUGGLE

Mr. Obey. Isn ’t Cambodia really going to be lost militarily no 

matter what we do. eventually?

Mr. Habib. No, I don’t thin k so. I do not believe so.

Mr. Obey. Isn ’t tha t what is going to happen ?

Mr. Habib. I do not believe so, not necessarily.

Mr. Obey. Provided we are willing to keep an open ended commitment in time.

Mr. H abib. Provided they are willing to keep on fighting. It ’s their 

choice in the final analysis, not ours.

Mr. Obey. We have heard those words for a long time.
28

Mr. II abib. But it is their choice in the final analysis.

Mr. Obey. It’s not their choice as to whether we continue to shell 

out all these resources.

Mr. H abib. Tha t is our choice, but it’s their choice whether they are 

prepared to go on fighting. It ’s our choice whether we are prepared 

to supply them the resources.

Mr. Passman. Mr. Bevill ?

Mr. Habib. I t’s a terrible situation.

Mr. Bevill. Thank you, Mr. Chairman.

VALUE OF NEG OTIATE D SETTLEME NT

Mr. Secretary, expanding a little further there, you made it very 

clear you are not tryin g to show the light at the end of the tunnel 

because nobody knows what is going to happen. That is really what it *

boils down to. isn’t it?

Mr. Habib. Th at is correct.

Mr. Bevill. But Cambodia is seeking, and we are seeking to help 

them, to get a negotiated settlement. *

Mr. Habib. Yes, sir.

Mr. Bevill. That is the goal, is that right?

Mr. Habib. Yes, sir. That is the stated goal of their government and 

we have supported tha t stated goal.

Mr. Bevill. When they get that negotiated settlement, what good 

is it?

Mr. Habib. I don’t know the form of it and I don’t know how it will 

come about. But in any event, it will be one which will see an end to 

the killing. T hat would be the first objective of a negotiated settlement.

Air. Bevill. Ju st like the one in South Vietnam ?

Mr. Habib. Hopefully like that one, as far as (he killing is concerned. I would rather compare it to the one in Laos. They don’t go on 

killing themselves any longer up there.

DOES NEGOTIATED SE'E TLEM ENT SOLVE THE PROBLEM

Mr. Bevill. Ho you know of any instance where we have ever had a 

negotiated settlement with the Communists that it ever solved the 

problem ?

Mr. Habib. There is one going on now. Whether it solves it or not, 

at least there is no longer any shooting involved. The cease-fire is holding in Laos. That was a negotiated cease-fire.

Mr. Bevill. How long ago? »

Mr. Habib. It was negotiated in much the wav tha t the present 

jieople are. suggesting to the Khmer Communists th at they negotiate 

now. That is between the parties concerned themselves. It has now been 

in effect for less than 2 years. "

Mr. Bevill. Actually, what you are recommending is th at we continue appropriating billions of dollars of resources here in the hope 

tha t some day we may get a negotiated settlement in the hopes th at 

some da v the negotiated settlement might hold water.

Mr. Habib. Xo, sir. I am suggesting that-----

Mr. Bevtll. And in the hopes that this country in the meantime 

doesn’t fold up quickly in carrying out this program ?
29

Mr. H abib. No. I th in k we are sug gesting so me thi ng qu ite a bit less 

th an t hat as fa r as C am bodia pa rticul arly is con cerned.

NOT S E E K IN G M IL IT A RY VIC TORY

As f ar as C ambod ia is concern ed, we are request ing severa l hu nd red 

mi llio n d ollars, n ot a billion do llars. We are expectin g a nd ho pin g that 

with th at th at they can d efen d themselves sufficiently to hold th eir own. 

Th ere is not going to be a m ili ta ry vic tor y in Camb odia un de r thes e 

circumstances.

Air. B evill. You are no t seeking it ?

Mr. H abib. No; we a re no t seek ing it, an d ne ith er a re the y.

CO M PR OM ISE NE GO TIAT ED SET TL EM EN T SO UGHT

If one will examin e th ei r statem ent s, th ei r sta tem ents make it 

quite cle ar th at wh at they seek is a ne go tia ted settleme nt. W ha t this 

Pr es id en t of the Un ite d St ates has sta ted as our objective in Cambod ia is a comprom ise ne go tia ted settlem ent. Those were his word s, 

k,A com promise peaceful settlem ent.” T he words were c arefully chosen. 

They were not int ended to pro mo te a m ili ta ry vic tor y in Cam bodia. 

An ybody who wants to prom ote a mili tary victo ry in Cam bodia is 

mad, in my opinion.

Mr. Bevill. You a re not seeking t ha t? You are s eek ing a neg otiated 

peace se ttle ment ?

Mr. H abib. Yes, sir.

Mr. Bevill. T hen you hope th at th at will h old ?

Mr. II abib. Yes, sir.

Mr. Bevill. That is r eally the goal, i sn't it ?

Mr. H abib. Yes, sir.

Mr. Bevill. T ha t is all you ho pe to get ?

Mr. H abib. Yes, sir. P u t in simple terms, th at is precise ly it. It 's 

very accu rately sta ted .

Mr. Bevill. Th at is the o nly light at the e nd o f the tunnel th at you 

could give us ?

Mr. H abib. If one likes to use th at co mparis on. I gav e t hat one up a 

long tim e ago. Th at is wh at everyone would con sider, inc lud ing the 

pre sen t gove rnm ent in Cam bodia , as a suc cessful outco me, a reasonable 

outcome.

Mr. Bevill. T ha t w ould be our victory, th e m ost we could expect ?

Mr. H abib. I t would be a reasonable outcome, yes, s ir.

OTH ER NATI ONS IN TE R E ST

Mr. Bevill. Would you tell me how ma ny othe r cou ntries of the 

150 countr ies on the E art h are inte rested in th is area of the wor ld? 

I mean, int ere ste d eno ugh like we are in tryin g to pre ser ve this and 

tryi ng to accom plish th is missio n ?

Mr. H abib. T her e are diffe ren t ways of expre ssing that. I suppose 

th at the ones who hav e the most intere st are the ones closest. For 

exa mple, I know t ha t the Th ais are very much int ere ste d and the y do 

pro vid e, in addit ion to di rect resources, a gr ea t deal in the way of 

facilities to the Cambodians.

Mr. Bevill. How much are the Thais put ting into it ?

47 -2 99 — 75------3
30

Mr. Habib. In dollar terms?

Mr. Bevill. Yes.

Mr. Habib. I read a figure a while ago. The dollar terms are a quarter 

of a million dollars. But remember they do other things.

Air. Bevii.l. What other countries are helping?

Mr. II abib. I guess you weren’t here when I read th at in the record.

Mr. Bevill. I missed that.

Mr. Habib. I read it all in the record a while ago. We will submit 

it forth e record again. There are several. But it’s a fractional portion 

of what we are providing. You should know that.

[The information follows:]

OTHER DONOR ECONOMIC AND HUMANITARIAN ASSISTANCE IN CAMBODIA 

A. EXCHANGE SUPPORT FUND 

[In millions of dollars)

*

Calendar y e a r1972 1973 1974 4

Japan.............................

Australia ........................

United Kingdom...........

Thailand........................

New Zealand................

Malaysia......................

United States................

Cambodia____ ____

To ta l..................

3d country total.

5.500 7.000 7.000

1.000 1.000 . . . .

.522 .514 .478

.250 .250 .250

.120 .120 .142

.100 .100 .010

12. 500 17, 500 11.870

15.000 8,606 4.106

34.492 35.000 23.856

(6.992 ) (8.894 ) (7.880 )

B. OTHER ASSISTANCE 

[In millions of dollars)

Amount Purpose

Calendar year 1973:

Bilate ral:

France........................................................ 1.150

Japan......................................................... 1.300

.097

( ')

United Kingdom............... ........................ 297

Israel.........................................................

Australia ____ __________ ____ ______

Thaila nd........ .........................................

New Zealand__________ ___________

Sw itzerland______ ____ ___________

Ita ly............................................................

Singapore..................................................

Internatio nal organizations:

ICRC and related agencies__________

U.N. agencies............................................

52

( ')

(>)

60

(')

.280

7.800

For education, agricultural and public sector advisory 

services. The bulk of t his sum is accounted for by th e 

provision of French teachers to lycees and universities.

4,800 MT rice grant.

Ambulances and prefabricated housing.

Scholarships for study in Japan, dollar amount and 

num ber unknown.

Grant for dis trib ution and use of fertilizers plus 8 

scholarships to the United Kingdom.

Advisory services of 2 agronomists.

12 scholarships.

3 scholarships.

Food and medical supp lies plus 10 scholarships.

Medical supplies.

Refugee relief.

16 scholarships.

Humanitarian assistance.

Health and humanitarian assistance. Much of this 

money is given for ac tivities of a long term nature and 

expenditures during calendar year 1973 are unclear.

Estimated calendar year 1973 t o ta l. . +1 5. 30 0

Calendar year 1974:

Bilatera l 2........................................................ (s;

Internatio nal organizations: Asian Christian . 094

Service.

2 medical teams plus oth er assistance to refugees as 

needed.

Total calendar year 1974 (ad ditional in- .094

puts not known at this tim e).

1

 Not available.

’ Indonesia promised technical assistance or the ESF and Australia has provided an unknown amount of assistance. 

»lln k" 0W -
31

CAN PEACEF UL. SETTLE ME NT BE REACHE D

Air. Habib. 1 would like to cofne back to something you said because 

I think you put your finger on the nub of it, as to whether or not you 

can get a peaceful settlement in Cambodia. The answer at this stage 

does not lie in the hands of the people in Phnom Penh because they 

have made it very clear they are prepared to talk about just tha t without any prior conditions whatsoever.

The people who oppose them refuse in any way to consider anythin g short of the conflict that now wages.

Mr. Bevill. If you get to a negotiated settlement, from past experience they will keep the negotiating settlements so long as it is to their 

advantage to do so. Isn’t tha t true ?

4 Mr. Habib. I think that is a fair statement. I think that is being

realistic.

Mr. Bevill. That is all I have. Mr. Chairman.

Mr. Passman. Thank you, Mr. Bevill.

S' Mr. Chappell ?

COMM ENDA TIO N OF MR . IIABB

Mr. Chappell. Air. Secretary, let me commend you on a very fine 

statement and a very for thrigh t approach. I think this is one of the 

most forthrig ht approaches I have seen before this committee since 

I have been a member of it.

Air. Bevill. A’erv good.

Air. Ciiappell. I want to commend you on it.

Air. Habib. Thank you.

CAMBODIAN OBJECT IVE S

Air. Ciiappell. Sometimes we lose sight of what people may be 

fighting for in other par ts of the world. Would you elaborate a 

minute? AVliat are the people of Cambodia fighting for?

Air. Habib. I think tha t will give me a chance to say something I 

would like to say to you. I look at it a different way. About 2 weeks 

ago, I asked our intelligence community people to come up for me with 

a description of what would happen to the Cambodians and why is it 

that they resist if Cambodia were to come under the domination of 

the Khmer Communists.

Generally speaking, they fear the North Vietnamese and they fear 

the hand of the North ATetnamese behind the Khmer Communists. 

They realize the role that Hanoi chooses and hopes to play in the 

area. They have historically resisted North Vietnamese incursions.

Second. I think tha t thei r recognition of the q uality of life and the 

character of life under the Communists, with which they have some 

experience now, is such that they do not wish to live that way. In ­

evitably, when they get a chance they do not go toward the Communist 

side.

Let's give an example of what it is they fear behind the Communist 

lines. The Cambodians happen to be a very religious people. Buddism 

has a role in their natura l life. They know what happens to Buddhists 

behind the Communist lines. They know what happens to the monks, 

the pagodas, and the free exercise of authority.
32

The Cambodian happens to be a small peasant landholder. They 

know what happens to small peasant landholdings behind the Communist lines. They are put into communes. That is what happens to 

them, and they resist that.

They know about the regimentation of life beyond anything tha t 

they suffer under the rather easygoing approach tha t they arc historically used to. And they resist that.

They are quite aware of the methods, the techniques, and the practices tha t have been the history of the last 2 years in those areas of 

Cambodia that are Communist dominated. You don't have to convince 

the Cambodian th at he doesn't want it. He is already convinced. His 

problem is how does he resist it.

One could go on and paint the hypothetical picture of what would 

happen in the event tha t it goes down, and the Khmer Communists 

take over the country, in whatever stark terms that you wish. But it's 

only a hypothetical picture. But it isn't so hypothetical to the people 

who have had that experience, from everything we hear from them. 

T II B CO M M U N IS T E X PER IE N C E

Mr. C happell. What type of experience are you ta lkin g about?

Mr. Habib. T am talking about the experience of Cambodians who 

know what goes on behind Communist lines.

Mr. Chappell. What is that? Give us an example. Sometimes we 

forget.

Mr. H abib. For example, the Khmer Communists believe that Buddhist monks are an unproductive element of society and they don’t 

allow them to have contemplation. Under the old tradition, a man 

spent a certain part of his life in contemplation. They don't approve 

of th at. They don't allow it. That is clearly known to the Cambodians 

who are, as I say, devout Buddhists. They put the monks to work. 

They break up the landholding. They don't, allow people to maintain 

the ir land rights.

CAMBODIAN CULTURAL VALUES

Mr. Chappell. W hat you are saying is t hat everything which we 

apparently stand for in this country, these people-----

Mr. Habib. There is a lot more we stand for that isn’t quite known 

to them. They haven't got our culture. But within their own cultural 

confines, within their own cultural limits, these are the things they 

understand. They understand religion, they understand land, they 

understand family, and they understand personal freedom. These 

things the Cambodians can understand just as well as any American 

can understand.

Mr. Chappell. Those things are in line with their type of 

philosophy?

Mr. H abib. Yes, sir.

Mr. Chappell. Eve ryth ing they are afra id of is exactly to the 

contrary ?

Mr. Habib. Their experience has been to the contrary.

Mr. C happell. The question we get down to is whether we are willing to help a nation we have already promised to help, protect the 

things which we would be so very much interested in fighting for on 

our own soil. Is that not true ?
33

Mr. II abtb. I have hesitated to put it in those terms, but I wouldn’t 

disagree with anything you have said.

Mr. Chappell. My time is up, Mr. Chairman.

Mr. P assman. Mr. Koch ?

CATEGORY OP U.S. COMM ITMENTS

Mr. Koch. Mr. Secretary, I would like to develop this aspect of the 

dialog. I am distressed that you place in the same category every country to which you think we have a commitment. You mentioned Australia, Japan, New Zealand, and Israel. You didn’t mention, but I 

think you include, Western European democracies that are a p art of 

NATO. You draw no distinction between these countries, a t least you 

didn’t in your discussion with us. My own feeling, however, is tha t 

there is a distinction between invasion externally, and revolution 

within a country.

GREEK ANALOGY

I don’t want to talk about Cambodia for a moment. I want to take 

you to Greece and use i t as an analogy. I remember when the Greek 

junta overthrew what was considered to be a democratic government 

in Greece. I was very distressed with that. As badly as I feel, I didn’t 

consider it our responsibility to support the Greek democratic government with arms or men to overcome a revolution which I deplored.

REVOLUTION IN GREECE

Do von think we should have gone in and prevented that junta from 

engaging in its successful revolution?

Mr. Habib. Did the junta receive its first assistance from a Bulgarian force or a Communist force tha t came down across the border, 

knocked off all the outposts, cleaned up all the supply lines, brought 

down all the material?

Mr. Kocii. The answer is, it did not.

Mr. H abib. And also brought down all the Greeks that were in B ulgaria or some other country ?

Mr. Kocii. The answer is no ?

Mr. Habib. The answer is no. That is the precise difference in 

Cambodia.

U.S. INVOLVEMENT IN REVOLUTIONS

Mr. Koch. I want to pursue that with you. You are saying now 

that if a revoluation takes place within a country and it isn’t supported by an outside force, then you do not support our involvement 

on either side. Is that a fair statement?

Mr. Habib. Generally speaking, that has been our policy. But it 

depends.

Mr. Koch. It has some exceptions ?

Mr. II abtb. I would say, generally speaking, that has been our 

policy. I don’t like to overgeneralize. I want to remind you of one 

thing. We didn’t have a direct mutual security obligation with 

Cambodia.

Mr. Kocii. Wait a minute. You are not talking about the-----

Mr. Habib. No: I am trying to sustain a certain point of your 

argument.
34

U.S. INTERCESSION

Mr. Kocii. Mr. Secretary, your statement that we had commitments 

all over the world wasn't resting simply on a treaty alliance tha t said 

we have to assist a country under certain circumstances?

Mr. I Iabih. That is correct. We have no treaty alliance with Israel, 

for example.

Mr. Koch. I want to pursue a little further this question of when 

we should become involved. If I understand it correctly, if there is 

no outside assistance to a domestic revolution, we stay out of it. Is 

that true?

Mr. Habib. Generally speaking.

Mr. Kocii. Then you are saying if there is outside assistance to a 

domestic revolution, we have an obligation to come to the aid of such 

countries around the world to do what is necessary to make certain 

tha t the democratic government continues to exist. Is that a fair 

statement?

Mr. Habib. No; tha t is not.

Mr. Kocii. What is it then ?

Mr. H abib. That depends upon the historical relationship or treaty 

relationship which we may have. In certain places we have a treaty 

relationship which imposes an obligation on us to do something.

KIIM ER COMMUNISTS

Mr. Koch. Tn Cambodia could we have a treaty relationship which 

provides anywhere in its four corners that where there is a revolution 

we become involved ? You have already described that force that is 

engaged in the battle as the Cambodian Government and the Khmer 

Communists, and I assume that when you use the words “Khmer 

Communists'’ you are talking about Cambodians who happen to be 

Communists. Is tha t a fair statement ?

Mr. H abib. Go back to the origin. Yes; that is correct. But there is 

always a hut.

Mr. Koch. Let’s hear the hut,

Mr. H abib. The hut is very simple. Fi rst of all. they are sustained 

and supported in country bv North Vietnamese troops.

Air. Koch. I understand.

ORIGIN OF CAMBODIAN CONFLICT

Mr. Habib. And their origin, the origin of the conflict when we began 

our involvement. Because you want to go back to what originated our 

commitment.

Mr. Koch. T understand that. T have only another minute,

Mr. H artr. That is all right. We will come back to it because it’s an 

interesting question. I am not tryin g to dodge you.

COMMUNIST THREAT

Mr. Koch. I am not accusing you of that. You have been very f orthright and T am try ing to explore the question. My own feeling is that 

T happen to be very opposed to the Communists for a whole host of 

reasons. This is just a fraction. They are destructive. They are ulti-
35

ma tely engaged in the destr uctio n, mo rally, econom ically, and every 

way, of the people. Once th e people fal l behin d th at Iron Cu rtain— 

using the old phras eol ogy— it's over for them . I am very ups et about 

Czechoslovakia. Ye t I would n ot have interv ened th ere . It d id n’t make 

any sense for us rea lly, as up se t as I was at th at time.

EFF ECT OF IN V O LV EM EN T ON U N IT E D ST AT ES

Simila rly , I have c oncluded t hat the wa r i n Cambodia is a civil war 

supp orted by an outside force in terms of arm s bu t no t in terms of 

men.

That civil wa r an d—I am talk in g abo ut the whole of Ind ochina— 

has caused more da ma ge to this country th an an yt hi ng else we have 

eve r been involve d in, no t on ly in terms of tre asure an d blood but in 

4 ter ms of the mo ral fiber to stan d up anyplace else. Do n’t you agre e

with th at ?

Mr. H abib. Do you wa nt to arg ue wh eth er we sho uld have ever 

go tte n int o t his in t he first pla ce ?

v Mr. K och. No ; I do n’t wan t to arg ue wh eth er we should con tinu e

with so me thing tha t is goi ng dow n th e drain, ha s no end, and ha s caused 

us all conside rable anguish an d loss. You an d I prob ab ly agree it 

sho uld n ever have ta ke n pla ce in the first in stance.

Mr. I I abib. W ha t I th in k we should addre ss and wha t we need to 

addre ss is the reality of the moment as fa r as wh at is req uir ed and 

wha t is ha pp en ing in Camb odia. The histo ric al origi ns of the war in 

Indo ch ina can be debated with ou t end. I would suggest th at in the 

conside ration of the req uest befor e the com mittee now th at one must 

con sider the circum stance s an d the consequences ra th er than the historical origin s. I might agree with ev erything you said but I don’t 

think it would change my rec ommenda tion to the committee.

Mr. Koch. Than k you.

Mr. P assman. Than k you ve ry much. Mr. E ar ly ?

QUEST IO N OF M A IN T A IN IN G ST ATU S QU O

Mr. E arly. Mr. Se cretary, the Pr esiden t in his message states, 

“Re grettably, the re has been no pro gress in Ca mb odia.” li e says the 

Camb odian Government Force s, given adequ ate assista nce , can hold 

th ei r own.

La st year. Secre tar y of Defense Schle sin ger before th is committee 

sta ted we are not eng age d in de fend ing the s tatus quo. Bu t all o f y ou r 

#

com ments make it seem to me th at you are s ellin g the status quo.

Mr. I I abib. I would hop e th at one could ree sta blish the mili tary 

equil ibr ium of the situation so th at the othe r side will finally and 

cle arly recognize th at the value of the use of forc e in these circum- 

, stan ces is not w orth it.

M IL IT A R Y VI CT OR Y NO T PO SS IB LE

Mr. E arly. Un til th at tim e, y ou say we can have no m ili ta ry vic tory. 

Mr. ITabtb. Xo. I do n’t th in k military vic tor y is possible. I don’t 

th in k it's possible to conceive of a military v ict ory in C am bodia u nd er 

the p resent circums tanc es.
36

Mr. Early. So you are saying, Mr. Secretary, keep the status quo 

until we negotiate.

Mr. Habib. Agreed. And don’t give the other fellow a chance to win 

a military victory and subject the country to it. You have got to 

look at the obverse side of the coin as well.

Mr. Early. That is contrary to Secretary of Defense Schlesinger’s 

testimony.

Mr. Habib. T don’t thin k so. T don’t think I contradicted him. If 

I have. T stand on what I said.

Mr. Early. His comment said-----

Mr. Habib. T don’t care whether T contradicted him or not. but T assume T haven’t. In my view. I will state it again, military victory in 

Cambodia under present circumstances is not possible for the Government in Cambodia. They themselves have recognized that. They 

don’t call for military victory. They call for a negotiated settlement 

without prior condition. They are prepared to sit down at any time. 

MEANING OF STATUS QUO

Mr. E arly. W ouldn’t the simpler answer have been. Mr. Secretary, 

yes. vou believe in the status quo?

Mr. H abib. I don’t know what you mean by the status quo. Xo: I 

do not. if you mean the status quo is a situation in which they go 

on killing themselves. I am not for that. I am for ending that in the 

process of negotiation.

Mr. E arly. You mean they need this money to do th at ?

Mr. Habib. Yes. T would like the Mekong River to be open so the 

supplies can get up there.

Mr. Early. So you can say we are killing more of them.

Mr. H abib. I would put it this wav, the other fellow will not come 

to the negotiation and he will not agree th at the status quo is worth 

negotiating unless he doesn’t see the possibility of earlv military victor v. What sustains the Khmer Communists is the vision of an earlv 

military victory which they will achieve bv virtue of the pipeline 

being turned off for the government in Phnom Penh.

PARIS AGREEMENT NOT SUSTAINED

Mr. Early. Mr. Secretary, you stated we have no negotiated settlements with the Communists outside of Laos. Xow you suggest 

that we take the same course of action to break the Paris peace talks, 

which vou insinuate they broke first.

Mr. Habib. No: no.

Mr. Early. If we are going to do that, how are we ever going to 

negotiate a settlement ?

Mr. ITabtb. I thin k we have negotiated a settlement. It’s not being 

implemented. I think th e P aris agreement contains within it the terms 

of settlement of the war in Indochina in such a manner that we considered it equitable at the time and that all who signed it considered 

it equitable at the time. It has not been implemented. It has not been 

sustained.

UNITE D STATES NOT FIGHTING

Mr. E arly. How can we just continue fighting? Do you th ink that 

we have a negotiated settlement ?
Mr. Habib. I am glad to say, sir, tha t we are no longer fighting. 

We have reached the stage now where the people who are most concerned are willing to do the fighting themselves.

Mr. Early. We are fighting with American dollars, as far as $222 

million is concerned. They are fighting with our money.

PRO VIS ION S OF PAR IS AGREE MENT

Mr. I Iabib. If you will recall one of the things the P aris agreement 

provided for was that we would get our forces out. We got them out.

Mr. Early. And didn’t it also say we wouldn't send any more 

ammunition ?

Mr. Habib. Xo, sir. It said we wouldn’t send any more munitions 

except on a 1-for-l replacement basis. It also said there would be a 

cease-fire.

Mr. Early. You don't think this increased $222 million is a, violation 

of the Paris peace talks ?

Mr. I Iabib. Let me put it simply to you. The Par is agreements provided certain things that the North Vietnamese would do. They can't 

simply disregard their obligations and then expect the other fellow 

to sit defenseless. 1 would submit, do we then have an obligation of 

not doing anything while the other fellow does what he wishes?

AC III EV IN G SE TT LE ME NT

Mr. E arly. Then how do we achieve a settlement, Mr. Secretary ?

Mr. II abib. You have to implement it.

Mr. Early. If I rob your house, are you going to rob mine?

Mr. H abib. Xo.

Mr. Early. I think th at is what you are saying.

Mr. I Iabib. Xo. I suggest if you come into my house to rob it and I 

am in my house, I would hope my neighbor helfis me like he did the 

last time or like he said he would help me.

CONCERN OVER U.S. SHA RE OF SUP POR T

Mr. Early. Two members of this committee have suggested that 

other nations were involved; to what degree were they participating? 

In the tabulations of last y ear’s testimony it shows th at when we were 

projecting $275 million as the U.S. share, tha t th at was roughly 20 

times greater than the aggregate of the other 15 nations at Avar.

Mr. Habib. There is no question of it, sir.

Mr. E arly. Now you are saying tha t is not enough for the United 

States, tha t we are going to lose face if we don’t increase our aggregate another 30 percent roughly.

Mr. Habib. I didn’t say Ave Avere going to lose face, Mr. Congressman. I don't use expressions like that. The United States stands for 

something and the United States has certain commitments and obligations and people will react to the manner in Avhich we conduct ourselves. I don't use catch phrases like losing face or lights at the end 

of the tunnel or t urn ing a corner. I stopped that a long time ago. I 

never approved the use of those phrases.
38

NECESS IT Y FO R AD DITION AL RE SO UR CES

I would like to describe the situation in very explicit terms so the 

committee can make its decision. It is a fact tha t without the provision 

of additional resources to the Government of Cambodia it cannot defend itself against the enemy it faces.

Mr. Early So you are saying we will feed a bottomless pit 

continuously.

Mr. H abib. I will not call it a bottomless pit. I am saying in order 

to reestablish the military situation to such a stage to which it might 

be sensible for the other side to realize tha t a peaceful approach is 

better than war, you have first got to give them the capacity to defend 

themselves.

Mr. E arly. I f they don't negotiate, if they continue to fight, if they 

continue to participate, we do the same.

Mr. ITabib. That is a fair conclusion. You cannot force somebody 

to negotiate a settlement if he is unwilling to do so. The North Vietnamese once did negotiate a settlement, and then they didn't implement it. They implemented part of it and we implemented our share 

of it.

PARIS AG REE M EN T VI OL AT IO NS

Look back at the Paris Agreement once again. I say to you I had 

something to do with it. I spent some time on that. As a matter of fact, 

this young lady used to take our words at the Paris Peace Talks when 

we were there. It's coincidental. She was one of our reporters at the 

peace talks.

Look back at the agreement. I tell you you will find in the agreement 

nil that is necessary for peace in Indochina, if it will be imnlemented. 

1 would say this, th at if von examine the history of violations of the 

Paris Agreement, the blame for the situation in Indochina today 

does not fall on the United States.

Mr. E arly. Mr. Secretary, if it is true, which I expect it is. th at 

they have made the fii-st violation, don't we have any other recourse 

than to pick up arms as they pick up arms?

use of arms

Mr. Habib. It is not up to us to determine about picking up arms. 

It's up to the South Vietnamese.

Mr. Early. You don't use cliches or phrases, but this money is 

arms no matter how you want to look at it.

Mr. Habib. All righ t, is it up to us to deny those arms to a people 

prepared to defend themselves ?

Mr. E arly. Is it up to us ?

Mr. ITabib. Is it up to us to deny them? They have no other place 

to get them. Let's be realistic here. Thev are not going to get them 

from anybody else, whereas the North Vietnamese have no difficulty 

getting them from the Russians, the Chinese and the Eastern 

Europeans.

Mr. E arly. And us, based on the testimony. They used some of our 

arms.

Mr. Habib. No. There is very little of that. They don't do that 

anymore. With these outfits they want AK-47's. They don't want 

M -l’s. And they get them.
Mr. Passman. Thank you, Mr. Early. Thank you, Mr. Secretary. I only chair the committee, we have 10 other members of this committee and each one will make up his own mind subsequently as to what we should or should not do with respect 

to this request.

FUNDS C EIL IN G

It is most interesting tha t under the Conte amendment you have a ceiling on aid to Cambodia. I believe the grand total was $275 m il­ lion in military aid and $177 million in economic aid. That $275 million would of course include this $75 million draw-down.

TW O A M EN D M EN T RE QU ES TS

So what you actually are confronted with is two amendments to the authorization bill—one, your request for $222 million for addi­ tional military assistance applicable to fiscal 1975 and the other is to get the ceiling raised so that if you had the appro priation you could 

spend it. Is that what you are confronted with ?

Mr. Habib. The military request is $222 million, with the ceiling 

lifted on the economic side. The economic aid is $177 million.

Mr. Passman. But you have to get the ceiling lifted ?

Mr. Habib. Y es, sir.

Mr. Passman. So we are actually looking at a dual request.

Mr. Habib. Yes, sir.

Mr. Passman. T wo of them go before the Authorizing Committee 

and one before the Appropriations Committee. The ceiling request 

does not require an appropriation action, as you know.

TREATIE S DIFFER

Let me admit quickly and readily that I am not an expert in for­ eign policy. But it is my understanding that almost every treaty we have around the world is a bit different, whether it’s in Israel or whether it’s in Cambodia or whether it's some place else. Practically 

every one is drawn di fferently, is it not ?

Mr. Habib. The mutual security treaties have some differences to 

them, yes, sir.

Mr. Passman. That is the point I am trying to make.

Mr. Habib. There is one thing that is applicable to all of them. That is that they are implemented with the advice and consent of Congress.

NEED FOR SOVEREIGN INDO CH IN A

Mr. P assman. That we understand. But if I read the record cor­ rectly, going back to the administration of tha t great President ITarry Truman, he said it is a must that we have a sovereign Indochina. Based upon that, the Congress subsequently appro priated for Indochina $1.3 billion. The same policy was continued under President Eisenhower. President Kennedy, President Johnson. President Nixon, and President Ford. Have I made a statement of fact ?

Mr. Habtb. Yes. sir, to my knowledge.
40

PURPOSE OF TREATIE S

Mr. Passman. If I understand, regardless of any difference in the 

treaties whether it may be Israel or whether it may be Cambodia 

or whether it may be Vietnam, the whole purpose is to help sovereign 

nations defend themselves and to ward off the yoke of Communism. Is 

tha t about the way it is ?

Mr. Habib. Not all the obligations are related to Communism or 

Communist power.

COMMITM ENTS TO ISRAEL

I would say, for example, in the case of whatever commitments we 

have to Israel, I don't think the question of Communism enters into 

that.

Mr. I ’assman. Since you mentioned Israel, it ’s a foregone conclusion a

that the Russians are tr yin g to have a very strong hand, are they not. 

in financing those who would oppose the free and great State of Israel ?

Mr. Habib. That is my understanding. I am not an expert on the 

Middle East. 9

wiiat is rr.s. foreign policy

Mr. P assman. I am tryin g to find out what our foreign policy is. Ts 

it to help people who want to help themselves?

Mr. TT AI5TB. Y e s.

Mr. P assman. That has l>een one of the strongest pillars of our foreign policy for the last quarter of a century. It has been in effect for 

25 vears.

Mr. TT abib. Yes, sir.

IN DO CH IN A MU ST BE SAVED

Mr. P assman. T< was really created mainly under that great President, Ha rry Truman, and there has been no difference in that policy 

following the five Presidents. All of the Secretaries of State during 

tha t time and all of our great military leaders during t ha t time took 

the same position, did they not. that Indochina must be saved?

Mr. TTabib. They have.

Mr. P assman. Tf we are going to have several different foreign 

policies, we would never get anywhere in effect where there is communism or some other ism to help free people of sovereign nations to 

help themselves. Tt is that simple.

Mr. H abib. That is correct. «

Mr. P assman. That is what we are trying to show for the record.

Right, wrong, or indifferent, we must look at the fact that under these 

six Presidents that we have actually put $150 billion of our resources 

in Indochina, plus some 58,000 lives and 308.000 casualties.

SURVIVAL OF CAMBODIA AND SOUTH VI ET NA M

I could support the policy if there is a chance to save tha t part of 

the world but if it’s a foregone conclusion it's going down the drain, 

then possibly we shouldn't dissipate anv more of our resources there.

What do you see, Mr. Secretary, in Cambodia? "We have been told 

time and time again, if not in this committee we have read it in the
41

papers, that if we permit Cambodia to go down the drain then of course 

tha t would greatly, greatly diminish the chances of South Vietnam to 

survive. Is that true or not ?

Mr. Habib. It would have a negative effect on the ability of South 

Vietnam.

Mr. Passman. How strong an effect?

Air. II abib. At the present time the North Vietnamese use those 

parts of Cambodia which they wish anyhow in their a ttack on South 

Vietnam. The Cambodian border areas are in the hands of the North 

Vietnamese. They use them. They are part of their supply line into 

South Vietnam. I f it goes or not, that won't change.

The only thing tha t could possibly change it is if in one way or another you got a settlement in Cambodia and the Cambodians told the 

North Vietnamese to leave, which is not foreseeable.

CH AN CE S OF SURVIVAL

Mr. Passman. I think tha t Congressman Long made a very good 

statement. Personally, I feel th at way. But somewhere along the way, 

Air. Secretary, we are going to have to look at more than just a request for additional funds. I believe the Congress will demand that 

we show that there is some chance of helping these people win their 

freedom and survive. AVhen we go back to 1973 and they said the 

chance of Cambodian survival is only 50-50, it was not very encouraging. AVould you care today to say how we stand, whether there is 

more of a chance for them to survive ?

Air. I Iabib. I will put it 100 percent to zero, that if you don't supply 

them the money they won’t survive. But that is the decision that you 

have been asked to address. If they are provided the funds, it is the 

general judgment t hat they will be able to maintain their current hold 

over the basic population centers and to hold off the enemy force. 

Whether it’s 50-50 or 00-40, t hat is a kind of decision which, very 

frankly, I don’t make judgments on.

Air. P assman. Where can we get the information ?

Air. Habib. You can’t get an answer like that.

Air. Passman. W hat if it’s only 3 chances out of 100 they are going 

to survive, would that justify the continuation of the program? We 

are going to have to find w hat chance of survival they have. With our 

aid are they going to fold ?

Air. H abib. No, that is not our view. And that is not the view of the 

people on the ground.

SIT UA TION COMPARED TO 19 73

Air. P assman. Do you th ink we are in better shape in that area with 

respect to the Cambodians’ chance to survive than when the statement was made in 1973 that there is only a 50-50 chance ?

Air. II abib. They were in very bad shape at tha t time in 1973. With 

the exception of the situation along the Mekong, which I would hope 

they would be able to clean up, I would say tha t they are not any 

worse off now than they were then. Is tha t correct? Time is the general judgment.

Air. P assman. General Tighe?
42

General Tighe. That is approximately correct, Mr. Secretary. They 

are in about the same position.

Mr. Passman. As Mr. Early said, status quo. You don't see where 

they made any progress?

Mr. Habib. Not basically.

Mr. P assman. I want to tha nk you for being forthright. That is the 

one thing that is concerning t his Committee.

U.N . RESOLUTION

Mr. ITabib. Tf I could take a minute, Mr. Chairman, I want to add 

one thing I said to Mr. Ea rly because he raised a very important point 

when we talked about negotiations and where they get you. I failed 

to mention earlier on th at general call that was made by a majority 

vote in the UN this past fall calling upon the parties to negotiate and 

calling upon the Secretary General to try to bring the parties together 

to negotiate. The people in Phnom Penh are quite willing but the 

other side has not given any indication whatsoever of being willing 

to respond to that call as yet. The very fact that tha t call was made and the resolution was promoted, not only by the United States but it was put forth by a whole 

range of Asian countries, is indication that anybody who looks at the 

problem reasonably and logically comes out with the same conclusion 

that T tried to impress upon the committee a while ago, that a negotiated settlement is the only wav out of it, even though you always suspect whether or not the other fellow will abide by the negotiation once 

he signs on the dotted line.

Mr. P assman. Mr. Secretary, T have known you a long time and of 

course you are forthright. T will never mislead the witnesses or the members of this subcommittee. T don’t, know if I am in a position to challenge the wisdom of 

Ha rry Truman, Dwight Eisenhower. John Kennedy, Lyndon Joh nson. Richard Nixon, and J erry Ford and all of the Secretaries of State. 

I just don’t have all the information that was and is available to them. 

So T must proceed on this basis.

On the other hand, you finally reach a point where, if there is no 

progress being made and it looks like we are continuing to dissipate 

our resources, then of course I am going to have to re-evaluate my 

position.

ENE MY REFUSAL TO NEGOTIATE

You say in your statement that. “The Cambodian Government has 

repeatedly called for talks with the opposing side without 

preconditions.” The other side up to this time has not agreed to meet and talk to

them. Is that correct?

Mr. H abib. They have r efus ed to.

Mr. P assman. Would it follow if vou weakened the.Cambodian 

Government by denying additional military and economic assistance

then, of course, the chances of their meeting would be even less ?

Mr. H abib. I t wou ld become inc rea sin gly remote. You are ab solu tely 

right.
43

ADD IT IO NA L FUNDS

Mr. Passman. This request for the additional $222 million is an 

addition, isn't it?

.Mr. IIabib. Yes.

A M O U N T OBLIG ATED

Mr. Passman. Could you or some of your supporting witnesses tell 

the committee how much you have obligated to Cambodia on the 

military side and also what is the economic amount that you have 

obiigated under the continuing resolution ?

Air. II abib. Yes, th at is why we brought the experts. General Fish 

will give you the figures on the military side and Mr. Murphy of ATI) 

can give you the figures on the economic side.

Mr. Passman. As long as they are in the record for the committee 

to see before we mark this bill up.

Mr. Murphy. Out of the $177 million available for economic and 

Public Law 480 assistance under current authority, we have already 

obligated $175.5 million.

Mr. Passman. If you could tell us how much you have obligated 

for the military, tha t would be helpful at this time.

General F ish. Sir, we have obligated $260 million.

Mr. Passman. Out of a possible $275 million ?

General F ish. Yes.

R E M A IN IN G IN P IP E L IN E

Mr. Passman. The next question is what is the pipeline as of a recent 

time ?

General Fish. I have those figures here. Mr. Chairman, we have 

$42 million for delivery pipeline, and then there is $29 million in 

country stocks.

Mr. P assman. Of the tremendous amount we have given you in the 

past, you mean your pipeline is down to $42 million ?

General F isii. Yes, sir.

Mr. Passman. You have drained it that dry ?

General Fish. Yes, sir. $42 million is what remains in the pipeline.

Mr. Passman. As of what date ?

General F ish. As of the first of February.

UN OB LIGA TE D FU N D S

Mr. Passman. And at this time you have no further funds to 

obligate ?

General Fish. We have $15 million.

Mr. Passman. So you have $57 million. As we look at the expenditures for the first 7 months of fiscal 1975, then your pipeline is good 

for how many days ?

General Fish. We are calculating now—and of course you have 

to recognize these are rough figures—with the present level of violence out there it will take about $1.5 million a day.

Mr. Passman. So you have about a 60-day supply ?

General Fish. I think your 60-day figure is about right.
44

DELIVERY TIME

Mr. P assman. How long does it take to get deliveries after you place 

the orders?

General Fish. It can be quite fast in some things and take much 

longer in others.

Mr. I ’assman. What is the leadtime ?

General F irii. For ammunition, it's about 30 days.

Mr. P assman. So it ’s either do or don’t?

recap of available assets

General Frsir. Yes. sir. Tha t is right. I would like to correct your 

figure. J ust to give it once again so that all the committee members 

have it firmly in their minds, we have about $15 million unobligated, 

$42 million in the pipeline, and then we estimate about $29 million in 

country stocks tha t are already into the country. Tha t is about $8(5 

million.

Mr. Passman. Wouldn’t the $29 million be considered in the 

pipeline ?

General Fish. Xo.

Mr. P assman. It's yet to be used?

General F ish. It could be viewed either way.

Mr. P assman. It really doesn't make any difference?

General F isii. Those are the assets available in toto.

Mr. P assman. That is $8(5 million ?

General F ish. Yes.

Mr. P assman. And you are expending at a rate of $1.5 million a day ?'

General Fisii. Yes.

Mr. P assman. So GO days would be about right?

General F ish. Right.

PROCUREMENT LEADTIME

Mr. P assman. Do you mean to tell me that you can place the order 

for military equipment and have it procured and get it shipped in 30 

da vs ?

General Fisti. Xo, sir. Mr. Xelson, do you want to address that?

Mr. Xelson. Yes, sir.

Mr. P assman. We are only trying to find out what position you 

are in.

General Fisii. The th ing is tha t we must obligate the funds for the 

munitions when the order is issued. We don’t have to fund the entire 

procurement leadtime, since it’s out of stock.

Mr. P assman. Xevertheless, it's in the United States so that it has 

to be shipped to Cambodia.

General F ish. Some of it is in depots overseas.

Mr. P assman. You are privileged to use th at stock off the shelves 

and you replace it?

General F ish. Yes.

Mr. P assman. You have no more drawdown.

General F isii. Actually, th at is the $15 million tha t I spoke to.

Mr. P assman. I am talkin g about limits here. This is all? There is 

ao additional drawdown ?

General F isii. That is right. The limit is exhausted.
45

EXPE N D IT U R E OF SU PPL E M E N T A L FU NDS

Mr. P assman. Will all of the $222 million that you are requesting 

be expended in fiscal 1975 if the Congress approves it ?

General Fish. Yes, sir.

Mr. Passman. Or only part of it ?

General Fish. I t would. It would be our intent and a requirement 

to obligate it within that time. The combat situation as projected 

would require tha t amount.

AVAIL A BIL IT Y OF EX CE SS E Q U IP M E N T

Mr. P assman. General Fish, of the excess equipment, do you have 

any of that available for your program ?

General F isi i. We have some excess equipment, that we have under 

the rules th at were passed by the Congress, that are charged against the ceiling. In fact, specifically, we have charged some $617,000 in 

excess equipment against the legislated ceiling.

Mr. P assman. That is a rehabilitation cost ?

General F ish. No, sir. That is actual value, but not less than onethird of acquisition cost.

OU TC OM E IF SU PPLEM EN TA L RE QU ES T IS DEN IE D

Mr. P assman. I want to address this question to General Fish and 

also to the Secretary. What will happen if the Congress should just 

say, “No; we are not going to approve your request” ?

General Fish. In the first instance, of course, we would be unable to obligate any more past the $15 million tha t I mentioned. Then, of course, the deliveries would continue to the extent that the material 

was in the pipeline. Obviously, the people on the scene, the Cambodians themselves, would then have to take a look at their situation. I can't, sitting here, 

accurately forecast how they would judge the ir situation.

Mr. P assman. Who would judge what ?

General Fish. The Cambodians on the scene, the Government of 

Cambodia Armed Forces. They may restrict the expenditure so it 

might last a few more days than w hat we have indicated.

Mr. P assman. You are talking about days, not of weeks or months ?

General F ish. Th at is right.

Mr. Passman. Let’s be realistic about this. I t is very serious business.

General F ish. That is right.

Mr. Passman. I am only speaking for myself. This would be a repudiation of the policy of Mr. Truman, Mr. Eisenhower, Mr. Kennedy, 

Mr. Johnson, Mr. Nixon, and Air. Ford, would it not?

General Fish. I couldn’t disagree with anything you say.

appeals to other nations

Mr. P assman. General Fish, as some of the witnesses have brough t 

out earlier, we have a lot of wealthy nations in the world tha t are s up­ posed to subscribe to the same policy and philosophy th at we do. Have 

we appealed to these nations to help out in this program ?

47 -2 99 — 75-------4
4G

General Fish. Sir. I thin k tha t is proper for Secretary Habib to 

answer.

Mr. Passman. What is the answer, Mr. Secretary ?

Mr. II abib. We have, Mr. Chairman, privately and publicly. Even 

more importantly, the Cambodians themselves have appealed. They 

have gone and asked and in some cases they have gotten these frac ­

tional amounts tha t I spoke of a while ago.

Mr. P assman. I s it lack of confidence in Cambodia’s abilities or is 

it a fact that experience shows if they don’t put it up we will, or a 

combination of both ?

BAC K OF CO MM ITME NT

Mr. ITabib. I think it is probably a lack of commitment, and a bit 

of feeling that afte r all we will take care of it.

Mr. Passman. I see. *

Mr. ITabib. I think there is a certain element of that, to speak very 

honestly.

ROLE OF JA PA N

Air. Passman. Jap an is having some problems but they are waxing 

fat with wealth. They have a very strong economy, and they will return no doubt with certain adjustments. They actually have more to 

gain by saving Indochina than we do, do they not?

Mr. H abib. I wouldn’t say more. I would say they have a very real 

interest.

Mr. Passman. They are closer to the scene, aren ’t they?

Mr. Habib. They have a very real interest.

Mr. P assman. Jap an is closer ?

Mr. Habib. They also have a commitment from us which I would 

imagine they would want to keep thinking about. It is the umbrella 

tha t provides their security.

UNPOPULAR POSITION

Mr. P assman. If we break one commitment, we may have to break 

others. I have to take that position and it is not going to be very 

popular.

Mr. ITabib. I have heard others say that.

Mr. P assman. Are we making any real effort to get other nations 

to help out?

Mr. Habib. They have been spoken to and you have gotten these 

modest amounts.

BUDGET DE FIC IT

Mr. Passman. Mr. Secretary, I don't believe it is just policy that 

we can look at today. I th ink we have to look at this tremendous deficit 

tha t the President announced. It is closer to $55 billion if we exclude 

the trust fund accounts. I think the interest on the public debt is now 

approaching $40 billion.

IMPORTANCE OF ECONOMIC AID

Isn ’t economic aid as important to Cambodia as military aid?
Mr. Habib. I made tha t contention in my opening statement. You are 'absolutely right. The requirement for economic assistance is as important given the nature of the society there and what has happened 

to it. It is basically right now food.

Mr. Passman. The lifting of the ceilings requested would almost in 

its entirety be devoted to the provision of food ; am I correct ?

.Mr. Murphy. That is correct.

KOREA

.Mr. P assman. You know it has been my privilege to chair this com­ mittee. for some 21 years. I have been out to the Fa r East many, many times. I find some of our recipients of aid are very appreciative. As I look at Korea, those people are determined to reciprocate as far as* possible regarding our generosity of the past, and they are spending a 

lot of money in this country. Korea wanted to purchase 210,000 tons of rice for cash with no gov­ ernment. financing whatsoever and I encouraged this purchase from our country. They purchased that rice from our country and paid $8 more per ton for the rice in the United States than if they had bought it from 

Thailand. Of course, U.S. rice is a better quality.

SELL ING AMERICAN COM MODITIES ABROAD

Is there anything particula rly wrong with a member of Congress going abroad and encouraging cash business, if it is available?

Mr. IIabib. Mr. Chairm an, you take a bureaucrat like me and tr y to 

get. him to judge a Congressman ?

Mr. P assman. No, no, don’t judge me, but is there anything wrong?

Mr. Habib. We are used to being judged by Congress, not judging.

Mr. P aassman. Is there anything wrong with selling American 

commodities for cash ?

Mr. II abib. No, sir, the promotion of American exports is as much an interest of the Congress as it is of the bureaucracy like myself. As you 

know, I used to-----

Mr. Passman. You are being just a little bit evasive.

Mr. I Iabib. I am ducking all over the place, I will admit it.

Mr. P assman. You are for selling U.S. commodities yourself.

Mr. Habib. I am for promoting American exports, and I have been 

for a longtime.

Mr. Passman. There is a man by the name of Mr. Leggett in this 

room also interested in selling rice.

Mr. Habib. I didn't see him. He comes from another great rice growing area.

Mr. Passman. I personally don’t believe it is wrong.

ADD ITIONAL AID

Mr. P assman. Have you or do you plan to provide Cambodia with military assistance from any other source other than the MAP pro­ gram, excess equipment, or the drawdown a utho rity during fiscal year
48

General F ish. Yes. In addition to the MAP program, excess equipment, and drawdown authority, we are providing $1.6 million for 

• military pay and allowances of U.S. military equipment delivery 

team personnel in Cambodia, $1 million for military pay and allowances of U.S. personnel engaged in maintaining the U.S. aircraft being 

used by Bird Air Co., and $14.3 million of redistributable MAP property no longer required by other MAP recipients. These amounts are 

not charged to the MAP appropriation but are charged against the 

legislative ceiling for Cambodia.

US E OF F U N D S

Mr. Passman. Could you tell the committee what the money thus 

far obligated in fiscal year 1975 for military assistance to Cambodia 

has been used for in detail ?

General F isii. Yes. sir.

[The information follows:]

Fisca l year 1975 Cambodia military assistance program as of Feb. 1,1975

T o ta l ___________________________________________________________$259, 557

A ir cra ft (i nc lu di ng sp a re s)________________________________________ 2.19 5

Ship s (i n clu d in g s p a r e s ) _____________________________________________ 2.4 21

Ve hicle s and we apon s (inc lu di ng sp a re s)___________________________ 4,04 0

Ammun iti on ______________________________________________________ 149, 16S

Com m un ication eq uipm en t an d su pp lies -------------------------------------------- 636

O th er eq ui pm en t an d su pp lies _____________________________________ 17, 290

Con stru ct io n ______________________________________________________ 343

R epair a nd re hab ilitat io n of e quip m en t--------------------------------------------- 8, 269

Supply o p e ra ti o n s_____________________________________________________ 51. 000

T r a in in g __________________________________________________________ 4. 578

Tec hn ic al ass is ta nce _______________________________________________ 1. 701

A dm in is tr at iv e (M ED TD C) c o sts 1__________________________________ 1,701

R ed is tr ib uta ble M AP m a te ri e l1_____________________________________ (1, 305)

Ove rsea s ex ce ss de fens e a rti c le s 1___________________________________ (51 1)

1

 Chargeable to Cambodia ceiling, but not to MAP appropriation .

MIL IT AR Y SIT UA TIO N

Mr. P assman. What is the present military situation in Cambodia? 

Does it appear this country can survive the Communist onslaught?

General Fish. The enemy dry season offensive which began on 

Jan uar y 1, 1975. has for the most p art been contained in the sectors 

around Phnom Penh. However, government forces have been unable 

to gain the upper hand and some army units, particularly the 7th Division manning the city's northwest sector have been hard pressed.

From footholds near the city insurgent gunners have launched 

almost daily attacks by firing against Phnom Penh and Pochentong 

Airfield. The continuous enemy pressure could precipitate an exodus 

of foreigners from the capital.

The enemy has achieved significant success in a major effort to interdict the Mekong River. Estimates are that as many as 41 battalions are committed to severing this vital supply route. Isolated 

outposts have been overrun, because government forces have been 

unable to conduct defensive operations around Phnom Pen h and simultaneously protect Mekong positions. As a result, Communist forces
49

Lave dug in troops and heavy weapons to form an almost continuous 

gauntlet along the Mekong and have caused serious losses to government convoy operations.

Despite heavy losses, government forces have given a good account 

in battle. They have succeeded in holding the Communists at bay 

around Phnom Penh, inflicting losses to the enemy in excess of 8,000 

troops. However, government forces have been unsuccessful in attempts 

thus far to clear and secure the banks of the Mekong and continuous 

fighting and losses have weakened some of the major units. In addition, government offensive thrusts have been limited because of the 

efforts required to defend Phnom Penh. Steps are being taken to 

obtain replacements for units especially hard pressed. To survive 

the Communist onslaught, government forces will have to be reconstituted quickly and redeploy for operations along the Mekong. 

Logistic support is essential, especially the continued supply of adequate stocks of ammunition.

OBLIG ATION ’ OF ALL FU N D S

Air. P assman. When will the present funds for military assistance 

for Cambodia run out?

General F ish. W ithin the next few days all funds will be obligated. 

Essential requirements can only then be met from the pipeline and if 

unexpected requirements arise, such as a need to increase contract airlift, deobligations of on-order stocks will be necessary. However, the 

capability is quite limited to obtain significant financing for emergency 

airlift requirements by deobligating funds now applied against stocks 

on order.

U .S . PE RSO N N EL

Air. Passman. How many and what type of U.S. personnel are located in Cambodia ?

General Fish. The official U.S. presence in Cambodia is limited by 

law to 200 persons. The following U.S. personnel were physically 

present as of 8 Jan uary 1975:

Defen se att ach e__________________________________________________________

M ar in e se cu rity g u ard s____________________________________________________

M ilitar y eq ui pm en t de live ry te am _________________________________________

Con tin ge nc y co m m un ic at io ns_____________________________________________

USA ID . Pol /M il. A dm in is tr ati on_________________________________________

C ontr ac to r pe rs on ne l______________________________________________________

C iv ilia n di re ct h ir e_______________________________________________________

IS

14

67

5

24

8

60

19 6

P IP E L IN E

Air. Passman. AVhat is the undelivered amount in the pipeline 

presently credited to Cambodia?

General Fish. Sir. we have $42 million in the delivery pipeline for 

Cambodia.

NO C O M M IT M EN T TO CA MB OD IA

Mr. Passman. Does the United States have a formal trea ty with 

Cambodia or any legal commitment to provide aid?

Air. Habib. The Un ited States has no formal treaty with Cambodia 

or anv legal commitment to provide aid of any sort.
50

I’EA CE X EC i< >TI AT I () X S

Mr. P assman. Ar e any peace negotiations in th e works at the 

mom ent ?

Mr. H abib. There are no peace neg otiations un derw ay at the moment. Th e Cam bod ians them selves have tri ed fo r veal's and con tinu e 

to try to enter into ne go tia tio ns with their oppon ents. Th ey have received no thing bu t rebuffs. Our own efforts have, to da te, been equally 

unsuccessful despite our su pp or t fo r the Khm er a tte mpts, the U XG A 

resolu tion, and certa in conta cts we have had. We are , nevertheless, 

active ly and ur ge ntly co ntinuing ou r efforts to ge t neg otiations 

underw ay.

OU TL AY S

Mr. P assman. General Fi sh , I sha re my colleag ue’s c oncern on thi s 

que stio n. For the benefit of the comm ittee, would you expla in more 

fully just wha t is mea nt by the statem ent th at the proposa l will not 

increase 1975 outlays .

Gen eral Fish. Yes, sir. As backgro und, the req uir em ents fo r Vi etnam are financed with fu nd s ap prop ria ted un de r th e tit le “M ilitar y 

Ass ista nce, South Vie tnamese Forces*’; those fo r Cam bod ia under 

the title “M ilitar y Assistan ce. ” By law, the pro ced ure in ob lig ati ng 

these fun ds is to plac e or de rs fo r ma teriels—p rim ar ily ammunition 

an d PO L—on the mili tary departm ents, ob lig ating “M ilitary Assistance. South Vietnamese Forces*’ funds o r “M ilitary A ssistance ’* funds, 

as ap prop ria te. Th e m ilitar y depa rtm en ts fu rn ish materiel out of 

neare st ava ilab le stocks. Th e fund s obligate d fo r materi el ord ere d 

are pa id to the m ili tary d ep artm en ts’ app ro pr iatio ns w hich o rig inall y 

financed the materi el where they are tre ated as colle ctions. Net U.S . 

Governm ent outlay s ar e no t immediately affected by these tra nsa ctions. 

Lat er , as the military de pa rtm en ts pro cur e rep lacem ent items, the 

m ili ta ry de pa rtm en t procurem en t ap prop ria tio ns will mak e outlays 

in pa vments to contracto rs. At t his po int, net U .S. Govern ment outlay s 

will be increas ed: how ever, since the outlays g enera lly l ag obligatio ns 

by several mon ths, or s ome times longer, the supplem ent fun ds should 

not re sult in outlays pr io r to Ju ne 30,1975.

Mr. P assman. This budget ame ndm ent will also req uir e an au thor ization, will it not ?

General Fis h. Yes, si r: it will.

IA N D CO NT RO L

Mr. P assman. W ha t perce nta ge of the la nd area an d p eople in C ambod ia are u nder the c ontrol or influence of the Comm unist forces?

Mr. H abib. I t is not possible to give prec ise figu res of lan d and 

people in Cam bodia un de r the control or influence of the Com munist 

forces. Our best estimates are th at some 80 perce nt of the lan d and 

35 to 40 percent of the po pu lat ion is not un de r Governm ent control. 

We pu t it thi s way since there are large sectoi-s of t he country which 

are occupied by ne ith er side. It is to be noted th at there are co nsider ­

able are as alo ng t he en tire len gth o f th e Camb odian S ou th Vietnamese 

bo rd er which are occupied and con trol led by the N or th Vietnamese an d 

Vietcong .
51

NEED FOR INC REA SE

Mr. P assman. Th e o rig in al bu dget requ est fo r m ili ta ry assistanc e to 

Camb odia in fiscal ye ar i975 was $36*2,500,000; bu t if you co nsider th e 

$200 million t hat h as been obligated in M AP alr eady , the $75 m illion 

in dra wd ow n au th or ity , an d the $222 mi llion bu dg et a mendm ent, th e 

new revised total fo r m ilitar y assistance comes to $497 million. W hy 

are you ask ing fo r th is $135 millio n increase above the or iginal 

req uest ?

General Fish. The fiscal year 1975 a dm in istra tio n request for Ca mbod ia as o utline d in the congres sion al presen tatio n document includes 

$362,500,000 M AP an d $27,500,000 s up ply opera tio ns, for a total pr ogr am of $390 million.

Proje cte d a mm unition costs were $299,010,0000. Sinc e th e ad min istratio n requ est was su bm itted , the ammu nition costs h ave been revised to 

$345,514,000 and is alm ost 80 percen t of the presen tly proposed $497 

mi llio n prog ram (ex clud ing supply op erations ). Th is increase of 

$46,500,000 res ults fro m both ris ing costs and sli gh tly high er total 

con sum ption in fiscal yea r 1975.

Th e hea vy impact of inflation is fu rt her rev ealed in the fac t th at 

su pp ly operation s or ig in ally estima ted at $27,500,000 now account fo r 

$51 millio n of the cu rren tly fun ded sm aller program s. Assuming 

av ailability of the ad ditio na l $222 millio n, total supp ly opera tio ns 

fo r fiscal yea r 1975 are estimate d at $76 millio n, an increase of $49,- 

500,000 over the origi nal estimate of $27,500,000.

In sum mary, the revised ammu nition and su pp ly opera tions costs 

am ount to an incr ease of $96 million and acc ount for most of the 

increa se above the original request of $390 mi llio n fo r military assis tance fo r Ca mbo dia.

REPL EN IS HM EN T OF DRAWDOWN

Mr. P assman. In fiscal ye ar 1974, you used $250,000,000 in dra wd ow n 

au th or ity un der section 506 for military assista nce to Cam bodia. Do 

you eve r p lan to ask fo r a sup pleme ntal to rep len ish t he d efense stocks 

used in this d raw down ?

Also, by not replen ish ing these stocks, does th at have the effect of 

de priving our own def ense forces of need ed equip me nt?

Gener al Fish. Xo, we do not pla n to ask fo r a sup ple me nta l to 

rep len ish the defense stoc ks used in this draw down . We are req ues tin g t he $250 million used in fiscal year 1974 drawd ow n au thor ity in the 

fiscal year 1976 bu dget which has been del ive red to the Congress. 

Whe n Congress ap pr op riat es thi s $250 millio n, the mili tary dep ar tme nts will be reimb ursed.

corruption

Mr. P assman. I s th er e stil l wides pre ad co rru ption in Cam bodia 

an d expla in what is be ing done to insure U.S . fund s are not being dive rte d from i nte nded uses ?

Also, w hat typ e of co ntr ols do we have ov er U.S. fun ds ?

Mr. H abib. Not u niq uely, c orrupti on does exist in Cam bodia. Much 

is e nde mic an d low level, inv olv ing m ino r th ef t, pilfe rage , s hakedown 

of s mall me rch ants by soldie rs, and the like. Th ere have also been re-
52

poits of corruption at higher levels, one of the most widely alleged 

being the example of so-called phantom soldiers; that is, soldiers for 

whom military commanders received funding allocations but who do 

not actually exist.

The GKR. with strong U.S. encouragement, has introduced measures to curtail all forms of corruption, to make it less profitable and 

more difficult and to stiffen penalties for it. These measures include:

—A central military payrolling system designed to help eliminate 

the possibility of fund ing allocations fo r nonexistent troops.

—The institution of frequent devaluations of the exchange rate in 

pace with the rate of inflation (the politically difficult step virtually eliminates the incentive for collusion between importers and 

suppliers to over- and under-invoice commodity procurement).

—A major budgetary improvement program in order to achieve 

greater control over military expenditures.

—The arrest of officials allegedly implicated in the diversion of 

aviation gasoline.

—Successive decreases in military payroll strength levels.

The above measures deal principally with internal corruption associated with local currency, not directly associated with the commodities financed by U.S. aid. Rega rding these commodities, a strict system of program monitoring and controls is in effect.

With respect to the second p art of the question, measures instituted 

to insure that U.S. funds are not diverted from their intended use 

include the following:

—Supplying no funds, only commodities and services, for the bulk 

of the program.

—Maintenance of a realistic exchange rate which minimizes incentives for collusion in the allocation of scarce foreign exchange.

—For the exchange support fund, hiring of an ES F manager, an 

independent auditing firm (Price Waterhouse), and an independent import verification firm (Societe Generale de Surveillance). 

Also, maintaining a list of commodities ineligible for importation with ESF funds.

—For the Cambodia commodity import program, the following 

safeguards are u sed:

(a) Approval of commodity eligibility by AID /W prio r to 

financing.

(5) Approval of price for most commodities by detailed price review by AID /W prior to financing. Commodities not receiving a prior 

review are subject to a post audit.

(c) Arrival accounting in order to reconcile receipts against original shipments.

(</) Frequent AID audits concentrated in sensitive commodity 

areas.

(c) Selective end-use checks.

(/) Systematic screening of all letters of credit allowing AID intervention in any transactions suspected of irregularities.

—For the refugee program, a deliberate decision was made to grant 

dollar funds required directly to registered United States and 

international voluntarv agencies, rath er than through local 

government channels. Program monitoring is accomplished by 

the voluntary agencies under the review of the USA ID refugee 

office and is subject to ATD's auditing and review.
53

—End use audits of AID and Public Law 480 financed commodities by AID auditors. —Inspections by the inspector general of foreign assistance and by 

the General Accounting Office. A recent review of USD A’s rice receipts cited a loss rate for rice 

of about 1 percent—a very low rate for an operation with long supply lines through enemy territory.

USE OF AM M UNIT IO N

Mr. Passman. Could the Cambodian’s economize in the use of the 

defensive supplies provided by the United States, such as ammunition, to a greater degree ?

General Fisii. Significant economies have been efi'ected, in spite.of 

the fact that Cambodia is an underdeveloped country, engaged in a desperate struggle for survival. In late September 1974, a meaningful 

ammunition management system was established.

Mr. Passman. How does their ammunition expenditure rate compare to the South Vietnamese and U nited States when we operated in 

Vietnam ?

General Fish. The expenditure rate per weapon is higher th an the 

expenditure rate per weapon for South Vietnamese forces but the 

intensity of combat in relation to the relative size of the forces involved is greater in Cambodia. As compared with U.S. forces, the 

Cambodian expenditure rate is h igher for small arms but lower for 

artillery and mortars.

Mr. Passman. Do th ey waste a great deal of ammunition ?

General F ish. While Cambodia has made significant progress in its 

ammunition management system, it is probable tha t under the present 

desperate circumstances the Cambodian forces are not achieving maximum effectiveness in the use of ammunition. The reasons vary but 

include the fact t ha t much fighting is ta king place in isolated enclaves 

where it is difficult to exercise careful centralized control.

PEA CE PO SSIBILI TIES

Mr. Passman. What proof do we have tha t continued fighting will 

produce peace negotiations since it has not worked so far?

Mr. I Iabib. We have no proof th at continued fighting will produce 

peace negotiations. However, it is obvious tha t cessation of U.S. assistance would not produce negotiations but merely the collapse and 

destruction of the legitimate government of Cambodia. We do believe 

tha t continued U.S. aid provided to enable the Cambodian Govern* 

ment to defend itself will eventually convince the insurgents that they 

cannot win and must negotiate.

u .s . SU PP LIES

Mr. Passman. How do you propose to get the U.S. supplies to 

Phnom Penh in light of the latest problems facing the river convoys?

General Fish. Efforts will continue to be made to keep the Mekong 

open. Also, some critical items will be moved by contract airlift.

Mr. Passman. How much U.S. supplies have been destroyed before 

reaching the Cambodians?
54

General F ish. Since August 1973, approximately 1,256 tons of ammunition have been lost.

Mr. Passman. What roles are U.S. personnel, civilian and military, 

presently engaged in or on behalf of Cambodia and is the U.S. military conducting reconnaissance flights or any other military related 

activity in or over or from off the shores of Southeast Asia?

If so, please indicate the specific areas and indicate if this could be 

considered a violation of present U.S. law.

Mr. Habib. U.S. personnel concerned with Cambodia perform a 

variety of tasks, some normal Embassy functions and others specifically connected with military and economic assistance to Cambodia.

The civilians are career Foreign Service and AID personnel. The military are attaches and members of the military equipment delivery 

team. There are no advisors in Cambodia.

(а) The United States does conduct unarmed reconnaissance flights. *■

(б) The flights are conducted over both Cambodia and South 

Vietnam.

(c) This is not a violation of U.S. law. On August 3, 1973, the 

Department of Defense issued a press release in which were given 

permissible and prohibited activities in, over or off the shores of Cambodia. Among the permissible activities were unarmed reconnaissance 

flights for the purpose of getting intelligence.

On August 3. 1973, in comments to the press after an appearance 

in Congress. Admiral Moorer, Chairman of the Join t Chiefs of Staff, 

expressed the view that unarmed reconnaissance could be conducted 

over Cambodia because it was not a combat activity and. in view of our 

ongoing MAP program in the country, there was a need to know what 

the enemy was doing.

On August 16. 1973. Major General James. Deputy Assistant Secretar y of Defense—Public Affairs—mentioned that some unarmed reconnaissance flights were being flown over Cambodia. This was again reiterated by Mr. Friedheim on June 4,1974, when the question was raised 

again at another news briefing.

Mr. Passman. Mr. Shriver?

ST UD Y OF FU TU RE REQUIR EM ENTS

Mr. Shriver. Thank you, Mr. Chairman.

During the hearings last June Mr. Vest told us there was a study 

in progress at that time regarding Cambodia’s military assistance requirements for the next 5 years, and tha t a copy of the study would be 

furnished to the committee.

Was that ever done ? Did we ever get it ?

Mr. H abib. I am sorry, sir, I will have to ask my staff. I wasn’t here. 

I only took this job last fall.

Oh. yes. the Secretary I think, provided the Congress a letter, a 

confidential letter, a classified letter, setting forth his projections into 

the future. That should be available to the committee, but that 

was-----

Mr. Shriver. You couldn’t tell us what the contents were.

Mr. Habib. I shouldn't in open session, sir.
55

U.S. ADVISERS

Mr. Shriver. I)o we have any I .S. advisers now in Cambodia?

Mr. I Iabib. No, sir.

V.S. CREDIBILITY

Mr. Shriver. The Preside nt’s message to Congress on this request 

and the one for Vietnam, and your statements here today, stress the 

need to uphold the credibility of the United States and other friendly 

countries which might be faced with similar aggression.

The argument seems to be that if we don't come through on agreements to furnish the arms for these countries to defend themselves, 

we can't be counted on in other conflicts.

Would vou go the next step and relate this to the situation in the 

Middle East?

Mr. Habib. I think what the President and the Secretary have always had in mind when they have made those statements is that it is 

globally applicable,yes, sir.

Mr. S hriver. So would the same thing, for instance relate to Israel ?

Mr. Habib. Yes, sir, I think they have had that in mind. That is my 

understanding, th at it is globally applicable.

IN FL ATI ON FACTORS

Mr. Siiriver. How much of this request is necessary because of 

inflation ?

Mr. H abib. Do you have any estimate on that, General ?

General Fish. Yes, sir, about 30 percent. We do have some figures 

on the inflation factors th at are involved. They are on the order of 30 

percent for ammunition. Transportation has been about 40 percent. 

You know we are required also to charge administrative costs against 

the ceiling, so U.S. personnel pay has also been inflated bv about 6 percent, and all other inflation about 10 percent. The big items are the 

ammunition and the transportation , and th at is 30 percent and 40 percent, so in real terms we are not buying as much in dollar value comparison with former years.

FUEL SUPPLIES

Mr. S hriver. One of the items which was mentioned was oil. Where 

do you get that ?

General Fish. It is all offshore, sir, not from the United States, 

Singapore primarily.

AMERICANS MISSING IN ACTION

Mr. Siiriver. Many of us in the Congress, and over the country I 

am sure, are concerned about the thousands of families with loved ones 

who are still classified as missing in action in Southeast. Asia.

Mr. ITabib. Yes, sir.

Mr. Siiriver. I presume there is still no cooperation coming from 

Hanoi.

Mr. Habib. No. Con trary to the terms of the agreement, they have 

refused to provide us with the information which they contracted to 

provide us with regard to the missing in action. This is, of course,
56

something which the Congress has expressed a great deal of interest 

in and the administration has pursued through every avenue, and will 

continue to pursue until w e get a proper accounting of those men.

Mr. Shriver. And if South Vietnam and Cambodia w ere allowed to 

fall to military pressure from Hanoi, how would you judge our chances 

of ever finding out anyth ing about those men f

Mr. H aiuh. I would consider them diminished. Insofar as the agreement is not observed they are increasingly diminished, the chances are.

CORRUPTION

Mr. Shriver. We keep hearing from some constituents who are 

opposed to our involvement in Southeast Asia that the government 

in South Vietnam is corrupt, a dictatorship. I think inasmuch as Cambodia is related to this situation, that maybe there should be something 

specific in the record relative to corruption tha t may exist either in 

Cambodia or in South Vietnam.

Mr. Habib. Mr. Congressman, again in all frankness, and in an 

attempt to be completely forthcoming with this committee, it would 

not be my intention to tell the committee and to tell you that there 

isn't any corruption or there isn’t any diversion, but I would say this: 

tha t in my experience and knowledge of the area, neither the corru ption nor the diversion has ever taken away in any way from the 

continued and reaffirmed desire of the people involved not to accept 

the domination of those who may have been opposing them.

Now I can't put a figure on corruption. I can’t put a figure on 

diversion. My guess is it is probably less than we fe ar and an awful 

lot more than we would desire.

U.N . RESOLUTION ON NEGOTIATIONS

Mr. Shriver. The United Nations General Assembly passed a resolution calling for early negotiations among the Cambodians. What 

has been the effect of that resolution ?

Mr. ITabib. The UNGA resolution calling for early negotiations 

among Cambodians and requesting the Secretary General to use his 

good offices has produced the following results to date. The PRC permanent representative in New’ York called the resolution a “scrap of 

paper’’ at the end of the debate. President Lon Nol of Cambodia 

immediately welcomed the resolution and invited the Secretary General to visit Phnom Penh and to go anywhere he wished in the Government-controlled areas. Sihanouk, in turn , rejected the idea of the 

Secretary General’s visit to Peking, if he should go to Phnom Penh. 

The Secretary General has initiated some preliminary contacts, but 

has stated tha t he would not do anvthing unless he was asked to by 

both sides. The United States voted for and has expressed full support for the resolution. Although the effect of the resolution has. as 

yet. lieen inconclusive, we consider it helpful as a possible step toward 

a solution and because, fo r the first time, the U.N. is directly involved 

in search of peace in Indochina.
57

FOOD AID

Mr. Shriver. Would you describe further the need for additional 

food assistance to Cambodia ? How much are you talking about? Tha t 

is up to the authorizing committee, is it not ?

Air. Habib. Cambodia’s agricultural production, largely rice, is now 

less than one-third of prewar levels, changing the country's status 

from that of a rice exporter to a massive rice importer and making her 

dependent on the United States for two-thirds of her rice supply and 

for other critical imports needed for survival. The absolute minimum 

level of U.S. rice imports required this year is 314,000 tons. Under 

the current obligational ceiling, we have been able to purchase only 

211,000 tons. This is sufficient to carry Cambodia only through June 

even at sharply reduced distribution levels. This leaves the GKR w ithout rice in July 1975. There are no other rice resources available to 

the GKR for the Ju ly to December period. Othe r donors cannot fill 

the gap. Cambodian domestic production will remain insufficient, and 

1975 U.S.-crop rice cannot arrive in Cambodia until late November 

or December. Thus, additional ceiling relief for food purchases, including a t least 103,000 tons from the current U.S. rice crop and 34,000 

tons of wheat, must be provided now to avert supply gaps and provide 

a minimum 1-month reserve of rice in the critical July-December period. Cambodia has received no wheat or wheat flour imports since 

early calendar year 1974. This commodity is needed as a food supplement to its rice requirements. In view of the essential obligations required for military assistance and IP R costs, the balance of the $377 

million ceiling leaves no room for the purchase of the additional title I 

rice and wheat to fill these needs.

Economic and Public Law 480 aid are interrelated. Because of immediate rice needs, we already have used $15.5 million of auth ority 

under the Cambodia economic aid/Public Law 480 $177 million portion of the ceiling for Public Law 480 rice purchases th at were made 

at the expense of AID-funded commodity import funds. Lifting the 

ceiling, or exempting food aid from it, will permit the purchase of 

the additional rice (at least 103,000 tons) and wheat (up to 34.000 

tons) to meet the essential food requirement of the Khmer population, 

and also permit the $15.5 million in AID funds “impounded” by the 

present ceiling to be used for other critically needed goods such as petroleum, machinery, and raw materials as well as to provide funds to 

support freight movement costs.

R EQ U IR EM EN TS UNDER T H E FA RIS ACCORDS

Mr. Siiriver. Mr. Ilab ib, you commented in your statement about 

who is and who is not abiding by the Pa ris accords. I don't think many 

Americans, or their representatives in Congress, know just what was 

required from each of the parties in those accords. You have mentioned several violations by Hanoi, but would you provide for the 

record a more detailed listing of those requirements and what has happened since the sign ing of the agreement ? I would hope this would be 

presented in such a way which would be useful and understandable to 

us and to our constituents.

Air. H abib. Following is a list of the major violations of the Paris
58

agr eem ent bv North Vietn am and the Pro vision al Re volut ion ary Govern me nt (V ie tc on g) :

Th e No rth Vietnam ese have sent more th an 170.000 troops into the 

So uth, res ultin g in a bu ild up of th eir main force army in the South 

from about 160.000 at th e tim e of the agre ement to abo ut 230.000 now, 

despite the tens of th ou sand s of casualt ies th ey have suffered in the contin ue d fig hting and th e ro tatio n of some of th ei r tro op s back to the 

No rth . Moreover, the rate of t hi s infiltra tio n has esc alated in the pa st 

few mon ths. The most recent developm ent in this rega rd is the movement of the N orth Vietn am ese A rm y’s 968th D ivision, which had been 

op erating in sou the rn Laos fo r several yea rs, int o the Ce ntr al H ig hland s of Sou th Vietnam du ring December and Ja nu ar y. Since the 

ea rlier inf iltrat ion h ad been in regimental or sma ller size units and as 

rep lacements, the movement of the 968th ma rks the first time since the 

agreem ent tha t an enti re division h as ente red the S outh as a unit.

Th e No rth Vie tnames e have sent vast amounts of arm am ent and 

mili tary sup plie s into the South , well in excess of th e one-for-one 

rep lacement level pe rm itted by the agre eme nt. Consequently , th e n um ­

ber o f th eir arm ore d vehicles has tr ip le d; th ei r field ar tiller y str en gth 

has increased more th an 50 pe rce nt: th ei r an tiai rc ra ft artil lery 

str en gth has more than do ub led : and th ei r arm am ent stoc kpiles have 

grown to the point th at th ey could sus tain an offensive on the scale 

of 1972 fo r over a year with ou t fu rthe r replen ishment.

Tn Laos, Cam bodia, and the delim itarized zone, the No rth Vi etn amese have improve d th ei r m ili ta ry logistics systems and base are as: 

and they clearly co ntin ue t o m ake use of Lao s. C ambod ia, a nd the D MZ 

to c ar ry out t he ir aggression ag ain st Sou th Vie tnam.

Th e PR G has refuse d to dep loy its personnel to the joint team s 

which under th e agreement w ere to oversee the cease-fire.

Both North Vietnam an d the PR G have refused to pa y their pr escribed sha re of the expenses o f the In tern atio na l Commission of Con ­

tro l and Sup ervisio n.

Th e Com munists have, no t only failed to coopera te in resolving the 

sta tus of American and ot he r personnel missin g in action, they have 

active ly obstruc ted United St ates and South Vietnamese efforts to do 

so—in December 1973. fo r exajn ple . the y a mbu shed an u narm ed U nited 

State s-S outh Vietnam ese team sea rch ing fo r the bodies of missing 

Am eric ans, res ultin g in th e death of one American and one South 

Vietnam ese. Moreover, since Ju ne 1974. the No rth Vietnam ese and 

PR G have brok en off all negotia tio ns on M IA ’s bv refusin g to meet 

with United State s and So uth Vietnam ese r epres entat ives in the fou rpar ty jo int military team.

The PR G in Ma y 1974, bro ke off all negotiations with the South 

Vie tnamese Gover nment —th e political negotiations in Pa ris and the 

tw o- pa rty joint m ili ta ry commission talks in Saigon —which were 

manda ted by the agreem ent . T he Gove rnm ent has r epeated ly called f or 

unconditio nal resum ption of these neg otiations, hut the other side has 

answered these calls with dem and s fo r the Go vernme nt’s overthrow 

as a pre con dition f or any rene wed ta lks.

Th e N orth Vietna mes e have rejected ou t o f ha nd specific South V ietnamese offers to begin the direct No rth -Sou th negotia tio ns called for 

in the agre ement.
59

The PRG lias rejected several specific proposals by the South Vietnamese Government to hold the internationally supervised elections 

specified in the agreement.

At the time the agreement was signed, the Communists were conducting a large-scale offensive to seize as much t erritory and population as possible before the cease-fire could take effect. Although the 

level of fighting was subsequently reduced as they refitted and reinforced their units and built up their armament and supplies, the 

Communist forces never ceased to maintain considerable military 

pressure, and as the months passed they began to escalate this pressure 

substantially. In November 1973, for example, they launched a division-size offensive in Quang I)uc province which brought about the 

heaviest concentrated fighting of the postagreement period up to tha t 

time. Also in late 1973 and the first part of 1974 they attacked and 

seized several South Vietnamese base camps in remote border areas, 

such as Tong Le Chan in western m ilitary region 3. They escalated the 

pressure still further in the summer and fall of 1974 with several 

regional offensives, most notable among which were multidivision 

thru sts in the Ben Cat area northwest of Saigon and in the Thuong 

Due area southwest of Danang. And in early December they launched 

their most serious attacks thus far, seizing the entire Province of 

Phuoc Long (including its capital, Song Be—the first Province capital 

to fall since Quang Tri was captured in the 1972 offensive), and bringing the level of casualties and destruction back up to what it was before 

the agreement. The North Vietnamese have now overrun 11 district 

capitals, all of which were indisputably under the control of the South 

Vietnamese Government at the time of the agreement. Our intelligence 

indicates tha t the Communists intend to intensify their attacks even 

furthe r in the coming months.

SUCCESS IN LAOS

Mr. Shriver. The only place where negotiations have appeared to 

work in Laos. I wonder why that is—why they could get together in 

tha t very poor country when none of their neighbors seem to be able 

to do it. I suppose it is desire on both pa rts to do it, but I don't know 

how you can create that desire. Would you comment ?

Mr. H abib. As you have said, the only place where negotiations and 

an effective cease-fire have worked is Laos. We believe that this is due 

partly to the circumstances in Laos, which so much differed from those 

in Vietnam and Cambodia, F irst, there was the King whom both sides 

have always recognized. Then, there has been the fact that the Prime 

Minister is acceptable and respected by both sides. Throughout the 

fighting of the past few years, it was also noteworthy that there was 

always a representative o f the Path et Lao in Vientiane itself. As you 

note, there was. of course, a desire for peace on both sides, but that is 

something which is har d to create, especially with Hanoi and 

with the Khmer Communists. Finally, we believe tha t willingness 

and desire of the supporters of both sides to see peace restored in Laos 

had a definite effect. S imilar resolve in Cambodia and South Vietnam 

do not. regrettably, yet seem to be shared bv the supporters of the 

opposition forces in those nations.
60

MIL IT ARY AID FR OM C H IN A AN D RU SSIA

Mr. Siiriyer. General Fi sh , you mentio n Chinese and Sovie t-supplied wea pons bein g used by the ins urg ents in Cam bod ia. I thou gh t 

we ha d so rt of an infor ma l un de rstand ing with Ch ina and Soviet 

Un ion th at restra in t in su pp lyin g such weapons w ould be ma int ain ed 

to keep the ho stilities from in terfer in g with ou r efforts to ward detente. 

Ha ve they sh arply increased th ei r military aid to Ha noi and oth er 

forces in South eas t Asi a? Giv e some figures on th at if yo u have them.

Gener al Fis ii. There is no inform al un de rst an ding with either China 

or the Sovie t U nion which would restr ain the supp ly of weapons from 

thes e countries to the i nsurgents in Cambodia. W ith resp ect to q ua ntitie s of m ili ta ry aid Hanoi o r forces in S outhe ast Asia m ay be receiv ing 

fro m Ch ina or th e Soviet Un ion , we cannot spe ak in prec ise terms because ou r knowledge about th e exact qu antities of m ili ta ry supplies 

and equ ipm ent are inco mplete. Neverthless, it is possible to deduce a 

meaning ful military aid com parison by looking at th e tre nd s of the 

military s itu ati on in South V iet nam and Cam bodia. We know empiricall y th at Sov iet and Chin ese m ili ta ry aid to No rth Vietn am is ade ­

quate to allow Ha noi to c ar ry ou t mili tary actions in So uth Vietnam 

and Camb odia at about wh atev er scope and intensity it desires.

NE ED FOR SU C H A LAR GE IN CR EA SE

Mr. Siiriver. A cco rding to yo ur figures, Cam bodia will run out of 

esse ntia l am mu nition and othe r sup plies com pletely in lat e March or 

early A pril. T ha t is, th ey will use up th e $86 millio n wo rth o f supp lies 

th at th ey now have ava ilable in a period of about 2 months. Yet you 

are req uesting $222 millio n fo r am mu nition and sup plies fo r the follow ing 3 mon ths. Tha t wou ld ap pe ar to repres ent a substan tia l increase in the rat e of use—a t lea st th at is the way it looks on pap er. 

Using yo ur estima te of $1.5 mi llio n used daily , it wou ld seem the y 

could get alo ng un til Ju ne 30—th e end of the 1975 fiscal year—with 

abo ut $135 millio n—$1.5 million tim es the 90 day s fro m Apr il 1 

throug h Ju ne 30. W ould you ex plain this?

Gener al Fish. In additio n to the $1.5 million needed fo r daily 

am mu nit ion and fuel costs, it is necessary to reestabl ish a 30-d ay stockpile of ammu nition and fuel in Phnom Pe nh , to pay tran sp or tatio n 

costs, and to provide a small qu an tit y of addit ion al equip me nt needed 

to cle ar the Mekong riv erb anks a nd replace combat losses. These a dd itio nal factors increase the cost fro m $135 millio n to $222 millio n for 

the rem ain de r o f fiscal ye ar 1975.

Mr. Shriver. W hen is the ne xt rainy season in Cam bod ia?

Gener al Fish. It will b egin next Mav or June.

Mr. P assman. Th an k you, M r. Sh riv er.

Mr. Long?

AP PR OP RI AT ED T H U S FA R

Mr. Long. Mr. Secre tary, you say th at we have giv en how much , 

ap pr op riated $700 million so f ar th is year?

Mr. H abib. That is the m ilitar y b udget f or So uth V ietn am .

Mr. Long. And how much f or Cambodia?

Mr. H abib. Cambodia so far on the mili tary side?

Mr. Long. Yes.

Mr. H abib. In clu ding th e draw do wn a utho rit y, i t is $275 million.
61

UTIL IZ A TIO N RATE

Mr. Long. You say tha t has all been used up, and that if we do not 

give these extra appropriations, all the shot and shell will have been 

used up, and they will be virtually without arms to carry oil the fighting between now and the beginning of the next fiscal year: is that 

righ t ?

Mr. Habib. Xo, sir, that is not quite what was said. I think what 

General Fish was saying was if you account for pipeline and time at 

some point you could reach-----

Mr. Long. Except for another 30 or 40 days.

Mr. H abib. It depends on the rate of utilization, as he also pointed 

out. whether or not there would be adjustments in the rate of utilization, whether it is a few days one way or the other.

Mr. P assman. Didn't you say 60 days at the present rate?

Mr. Habib. Sixty.

Mr. Long. Sixty days, and we have 5 months left between now and 

the beginning of the next fiscal year. You said if we don't give you this money, then you will be left, the 

Cambodians will be left virtually without arms for the last 3 months of 

this fiscal year, right ?

Mr. Habjb. It could reach that stage, yes, sir; at the rates of utilization projected, yes, sir.

CO NS ER VA TION OF SU PPLIE S

Mr. Long. Is it possible that they can string out. fire fewer shots?

M r. Hap,ib. They have done so. They have been running it out, as they 

say. and they are firing much fewer shots in the very interests of conserving it, but there comes a limit to what you can conserve when you 

are under attack.

Mr. Long. I s there any chance they can string that out ?

Mr. Habib. Not substantially.

Mi-. Long. So they can carry through.

Mr. Habib. Not sufficiently substantially to maintain-----

Mr. Long. You say there is no chance at all.

Mr. II abib. Xot to maintain their lines, no, sir.

M r. Long. Would you say it is a virtual certainty then if we d on't 

give them this money that they will run completely out of the ability 

to defend themselves for the last 3 months of this year ?

General Fisii. That would be our judgment.

ADVICE GIVEN CAMBODIANS

Mr. Long. Tha t would be your judgment. Tell me what advice 

did the U.S. Ambassador and defense attache in Cambodia render to the Cambodians so they would not run out of m ilitary assistance items 

which Congress had authorized for this fiscal year? In other words, 

why did we fail to make them parcel out the ir shot and shell so it 

would carry througho ut the whole year?

Mr. I Iabib. The Cambodians were well aware of the limits placed 

upon the appropriatio n bv Congress. Our people made them aware 

of it, and it was clear as to what could be bought with what was 

provided.

47- 29 9— 75------ 5
62

Mr. Long. Were they allowed to believe that they might get a 

supplemental appropriation ?

Mr. H abib. No, sir.

Mr. Long. I know tha t in Congress it was said, “Don’t worry too 

much about that cut. We will probably vote them some extra money 

somewhere along the line.’’

Mr. Habib. No, sir. The rate of expenditure has been enforced by 

the ra te of conflict.

CONTROL OF AM MUN ITIO N

Mr. Long. So you say that they have no control really over how 

much ammunition they use.

Mr. Habib. Not as long as they try to hold on. Fo r example, when 

you t ry to open the river up, opening the river requires an expenditure of ammunition. I f they want to open the river, and they have to, 

they have to expend the ammunition. At the same time there have 

been some substantial reductions in use, and I think you have some 

figures on that, haven’t you, General ?

General F ish. Yes, sir. I would like to make a couple of quick comments and ask Mr. Habib to enlarge on them.

When it became clear that the funding level, as the dialog continued 

in the Congress, was going to be tight, very stringent measures were 

put into effect, and they were effective. Ammunition expenditures were 

reduced to about 270 short tons pe r way, but since the 1st of January, 

with the increased level of violence that the Ambassador has referred 

to, it has reached 570 short tons per day.

Last week, with the much heavier pressure, it reached 700 tons per 

day.

AM M UNIT IO N USE FORECAST

Our forecasts would say that, owing to the cyclical nature of this 

war, with the weather controlling some of the activity, May and June 

would be at a lower level of violence, in spite of what the enemy would 

like to do. A lower level would be forced upon them.

Mr. Long. Because of the bad weather ?

General Fish. Yes; so we see it tapering off. A reasonably good 

figure would probably be on the order of 450 short tons a day in May 

with a still further reduction in June. Our estimates and our requests 

have taken those figures into account.

Mr. von Marbod, do you have something to add?

Mr. von Marbod. Dr. Long, as you know, our request for fiscal 1975 

for military assistance to Cambodia totaled $390 million. The Conte 

amendment which was enacted during the month of December reduced 

to a total of $275 million the amount we could provide to that country. 

No encouragement was offered the Cambodians. The timespan since 

the ceiling was placed on military assistance to Cambodia is relatively 

short.

Mr. Habib. I might add also if I could, sir. tha t the offensive in 

Cambodia really began on the 1st of January. It has only been running just a bit over a month.
63

WASTE OF AM MUN IT IO N

Air. Long. You are aware that the Inspector General of the State

Department did report that the Cambodian Armed Forces were wasting ammunition ?

Air. Habib. He also reported, I believe, tha t they had corrected 

some of the abuses which he felt were necessary to be corrected.

Air. Long. When 1 was in Phnom Penh a year ago August, I was 

told that they just are shot and shell happy. They just love to shoot 

their guns off. It makes them feel better, feel more cheerful.

Air. Habib. Feel safer.

ABUSES CORRECTED

Air. Long. Yes.

Has there been any evidence or documentation to show that the 

situation has improved since the inspector general reported this waste ?

Air. Habib. Yes. sir. I had a conversation with the inspector general 

just last week. On a further checkup they discovered substantial 

improvement along the lines that they, themselves, had recommended 

in their previous inspection.

BASIS FOR SU PP LE ME NT AL ESTIM AT ES

Air. Long. Does the estimate of your appropriations supplemental 

request here reflect the idea of what the Cambodians need in view 

of these suggestions for less waste in the use of ammunition ?

Air. Habib. As I understand it, and I will let General Fish speak 

to that, these estimates were based upon a calculation of sort of 

minimal requirements; am I correct?

General Fish. Yes, sir.

Air. Habib. The earlier figures thrown around were a lot higher.

General F isii. We d id—we made an estimate of what we considered 

to be a level that would allow an improved position rather than just 

one th at would keep the situation under control. It would allow the 

Government forces to distinctly improve their situation. We rejected 

that.

Air. Habib. From wha t it is at the moment?

General I ish. e rejected that for as the Secretary said-----

Air. Long. Arou didn’t want to see them improve their position ?

Air. II abib. It is not that. The amounts are so great, our basic 

purpose is not, to gain military victory which we would think is an 

ephemeral objective a t the moment. Our basic position is to stabilize 

the military situation so hopefully one can get a negotiated settlement. 

CAMBODIAN SENSE OF URGENCY

Air. Long. Admiral Aloorer, when he presented the 1975 fiscal aid 

request to this committee, noted tha t the Cambodian forces “still lack 

a sense of urgency in dealing with the enemy treats.”

What evidence can you provide to indicate tha t the above statement is valid or invalid at the present time?

Air. H abib. I would suppose one would take the casualty rates since 

the first of the year which would indicate they have a new sense of 

urgency. They have been fighting quite a battle. "

Air. Long. You think casualty rates are a reflection of urgency?
64

Air. Habib. Are an indication of willingness to fight, yes, sir. They 

are the best indication I know of as to the level of conflict.

Air. Long. I t would be in this country. W hether it would be in Cambodia, I don’t know.

Mr. Habib. I think it is there also. The description of what it takes 

to run a convoy up the river, in terms of preparation, landings along 

the bank of the river, running the convoy, supporting it, pu tting down 

the Marines and what-have-vou to go in to clean the guns, the description of it would lead me to believe—and I have read the descriptions 

very carefully—would lead me to believe they have met your criteria 

in that regard.

MI LITA RY ADVISERS

Air. Long. What advice have we given the Cambodians to increase 

their military effectiveness ?

Air. Habib. We don't advise the Cambodians on how to increase their 

military effectiveness. In many ways these people know how to fight. 

They have had a lot of experience. We don't have any advisers with 

them. AVe do have, as you know, the Embassy which, with its small 

military team that supervises the movement, the delivery of the goods 

supplied under the military assistance program, but we have not been 

providing military advice to them. They know how to fight.

Air. I aing. Of coui’se they are fighting with our resources.

Air. Habib. Yes, sir.

Air. Long. That does make a difference.

Air. II abib. We are enjoined by an act of Congress from giving them 

advice.

Air. Long. Are military leaders ever, say. flown over to Thailand or 

Saigon to talk and confer with our own military people?

Air. Habib. Yes; I think so.

Air. von AIarbod. AAre do conduct training in Thailand for the Khmer 

Army and Air Forces.

Air. Long. That is what I am talking about.

Air. Habib. I think there is that general kind of exchange.

Air. Long. I don't care whether they get the advice on Cambodian 

soil or somewhere else.

Air. Habib. I took it you meant advice with the Cambodian forces.

Air. I jOng. I f they were getting t hat advice somewhere this might 

be a factor. I just wondered whether it has been effective at all in our 

trying to counsel them.

Air. Habib. Have we somebody to give the details of that? I think 

you deserve a detailed answer.

General Fish. AAre have General Cleland from the Joint Staff who 

can help us, but the air force specifically has markedly improved its 

effectiveness during this last year. I will ask General Cleland to address that.

I)o you have any comments?

General Cleland. Good to see you again, sir.

I was running equipment delivery to the GKR when you were in 

Cambodia.

Air. Long. I thought you looked familiar.

General Cleland. To answer your question, we do not advise in country, sir. AVe do provide training to the Cambodians outside of country. 

Tiie classic example is the Cambodian Air Force. It started as a royal
flying club, and to be in the Camb odian Air Fo rce you had to he a 

member of th e roy al fam ily . In ad dit ion , un til Au gu st 1973, t he U.S . 

A ir Forc e was employed in cou ntry . So the A ir Force was not call ed 

upon. How ever, in the past ye ar the Cambodian Air Fo rce un der the le adership of a new and dynami c com mander, has developed to the point 

where they can and do pro vide the close ai r su pp ort which used to 

be furn ish ed by the I ’.S . Air Force.

By thi s I mea n they are pu tti ng bombs in fron t of the Cambodian 

grou nd forces whe re the Cam bod ian g roun d forces ask for them. They 

are prov idi ng the esc ort for the convoys, which in 1973. when the 

convoys were mo ving up and down t he riv er, t he U.S . Air For ce had 

previo usly prov ided. Th ey are doing th is wi th the T-28, a po st- W orld W ar 11 trai ne r 

ai rc ra ft, a nd the old C-4 7’s, wi th a 5 0-calib er m acliinegu n in the door. 

Th ey have mad e rema rka ble impro vem ent , sir , due to trai ni ng ou tside of country, and th e rea lly ga lla nt lea dersh ip of the new comma nder o f the Khm er A ir Force.

EFFE< TI VEX ESS OF ARTILLERY

Mr. Long. I ha ve h ea rd report s tha t a rtille ry , the way it is used th ere , 

really doesn’t kill anybody. It mostly just lands in the jungle, and the 

same goes with most of the airc ra ft bom bing. If you wa nt to kill 

any bod y, you rea lly hav e to do it wi th rifle lire and hand-to -hand 

combat. Wo uld you m ake any comment on t ha t. w he ther th e typ e of wa rfa re 

th at is b eing conduc ted over there is rea lly effective at all ?

Gener al Cleland. Yes, sir. The ar tille ry is qu ite effective, and has 

gr ea tly improved since the tim e when you wer e in Cam bodia. Th ey 

have establis hed fire contr ol, which was pr ac tic ally non existent 2^2 years ago. Th ey have done thi s them selves. I f I mi gh t dig ress fo r a 

mom ent, they sen t th ei r art illery men to Tha ila nd to be t rained by th e 

Un ite d State s and by th e Thai. Th is cad re cam e back, and they in 

tu rn tra ined the Khm er artil lery batteries. At the same time we w ere 

pr ov iding addit ion al tub es to make up f or the lack o f U .S. air sup po rt.

Th ey (lid this all on th ei r own. Th ey have effec tive a rti lle ry , which 

is a dju ste d by fo rw ar d observers.

PHANTOM ARMY

Mr. L ong. W ha t can you tell us about the gh os t pay rolls?

Mr. H abib. The ph an tom army?

Mr. L ong. I t is rumored th at we were pr ov iding large sums of 

money on the basis of a—phantom army is a good word fo r it. Our 

moneys go out to the lea de rs’ pockets —the ge ne rals and so on—b ut 

the numb er of people who are actua lly f igh tin g may be not more t ha n 

hal f or 60 p ercent of the number s o f soldiers we have been pa ying fo r.

W ha t can you tell us abou t this business of th e phantom payro ll ?

Gen eral Fish. T his, of course, a gain is add res sed by Mr. Constante, 

the IG for the St ate De pa rtm ent. One of his reco mm end atio ns was 

th at a cen tralized pa y system be established to have bette r con trols.

Mr. L ong. li as th at been establishe d ?
66

General Fish. I t lias. To say there are no phantoms left would be 

something that I couldn't positively demonstrate, but the information we have is tha t the problem has been greatly reduced.

You know those soldiers are not paid out of this appropriation 

though. They are paid out of the aid, I believe, economic and 

supporting-----

CAM BOD IAN MILITA RY PAYROLL

Mr. Long. I am not quite clear about th at, just how they are paid.

Mr. N elson. It is generated out of economic aid.

Mr. H abib. The funds go into the budget and the budget is used to 

pay them.

This is Mr. Murphy from A ID.

Mr. Murphy. We finance imports. Dr. Long, that are needed to 

keep the economy turning. These are purchased, brought into the 

country bv commercial importers, who pay for them in local currency, 

and pay the government the local currency. The local currency in tu rn 

is used by the government to support-----

Mr. Long. Are these grants or concession loans?

Mr. Mvrpiiy. Grants.

Mr. Long. So we basically give the government a substantial amount 

of stuff which they sell and use that money to pay their troops; is 

that right?

Mr. Mi ri’iiy. Yes.

Mr. Long. That gives us a pretty loose control over how they use 

the money, doesn’t it?

Mr. Murphy. As the General said. Dr. Long, there is a centralized 

pa v system that has lieen established.

Mr. Long. ITow do we know? In fact you have already indicated 

that you can’t control all of the things, but how would we be able to 

say tha t we have cleaned up much or all of this phantom army 

business ?

Mr. Murphy. That is something the General knows better than I.

U.S. CI TI ZE NS IN CAMBODIA

General Fish. T think the answer to tha t question. Dr. Long, is 

that to the extent that we can create a judgment with the number of 

people that are allowed in country, you know the total U.S. citizens 

allowed is 200. and we watch that head count very, very carefully. 

With the IG from the State Department and his recommendations, 

which have been implemented, we lielieve that the problem has been 

greatly reduced, and to the degree that spot-checks have been able to 

be made-----

Mr. Long. ITow do you make these spot-checks?

General Fish. Again it is the matter of the delivery teams and the 

personnel that are in country. What they can observe.

Mr. I jOng. Can you get signed receipts from the people who get the 

pay ?

General Fish. I have discussed it with the IG from the State 

Department, and he was of the opinion that phantoms are markedly 

decreasing. He was the one, of course, who defined the problem in 

the first place.
67

PAYROLL PADDING NOW MINO R PROBLEM

Mr. H abib. His general judgment is that there still exists some discrepancies in payroll, but these are now relatively minor and they are 

often the result of assignment rather th an deliberately set. One thin g 

I should tell the committee is that we have often reminded the Khmer 

leadership in Phnom Penh of the concern we have tha t this problem 

be resolved. The strong concern that the Congress has shown in this 

matter has also been emphasized frequently to the Khmer leadership. 

We think now they have the political will to resolve the payroll padding problem. We know tha t they have made it clear tha t this is to be 

eliminated, and we enforce the efforts all along.

I think it is fair to say tha t the Inspector General is better satisfied 

than he was. Whether it is completely eliminated, nobody is ever prepared to quite go tha t far, but he does believe that it is of a minor 

magnitude now compared to what it was before.

Mr. L ong. Maybe I would have to take another trip out there.

Mr. Habib. We will look forward to that.

CAM BOD IAN MILIT AR Y DEPENDENTS

Mr. Long. At the time I was there we felt it was a very bad problem. Incidentally, 1 went out and talked to some of the women whose 

husbands were in the armed services who were killed. You know the 

women and the kids follow the troops right into battle. They live right 

in the barracks. They have little curtains drawn up. They have their 

little cooking things. It is a very pathetic business. If the husband 

gets killed, the kids and the wife are left out there.

I talked to a woman whose husband was killed. She is left with 

(wo children. She never has a chance to marry again. She is left without resources of any kind. She cried a little. It was very heartbreaking. 

There was no feeling that anybody was worried about taking care of 

these people as human beings, and the thought tha t there were 

phantom payrolls with people making money on them sent me back 

with a considerable feeling of indignation.

Mr. Habib. It rankles as it should.

Mr. von Marbod. O ur investigators found that part of the “pha ntom” payroll was being used to support the orphans and the dependents of the men carried on the roll. That by no means justifies the 

fact-----

Mr. L ong. You don’t find any women and orphans saying so.

REFUGE E CAM PS

Mr. Habib. You will find them in the refugee camps where we try 

to take care of them.

Mr. Long. I was out in the refugee camps.

Mr. H abib. Fortunately we still have many of the American voluntary agencies who are supporting those people as best we can.

Mr. Long. Phnom Penh is full of orphan kids who are out shining 

shoes, hustling any way they can make a dollar. Somehow they get 

along.

I have one or two more questions.
68

RUSSIAN SUPPORT

You said, didn’t you. th at the Soviet Union continues to be a supporte r of arms to the North Vietnamese?

Mr. Habib. Yes, sir. and the People’s Republic of China as well.

Mr. Long. Who are fighting in in Cambodia ?

Mr. Habib. Yes, sir.

Mr. Long. And as long, of course, as the Soviets continue to support 

the Red Khmers and the North Vietnamese, that puts a burden on us 

to help out the Cambodians economically with ammunition and 

equipment ?

Mr. Habib. It sustains the war.

Mr. Long. Do you think we can really justify a policy like that when 

we are providing all kinds of cheap wheat and loans to the Soviet 

Union—subsidized loans to buy truck factories, computers, and otherwise help the Soviet Union economically—which must, of course, improve their ability to turn around and in one way or another divert 

resources to continue this war in Southeast Asia ?

Aren’t we really sort of fighting one hand with the other?

UNITED STATES PURS UING TOTAL POLICY

Mr. Habib. We are pursuing a total policy with both China and 

Russia, and I think in the examination of that total policy, you have 

to presume to make a judgment on any particular aspect of it. Because they are supplying arms to Hanoi. I would not think per se that 

that means that we shouldn’t have other relations with them or pursue 

other policies. We could use that in effect to attempt to persuade them.

Mr. Long. I understand you are not in charge of all aspects of foreign policy.

Mr. Habib. Thank you, sir.

Mr. Long. B ut doesn’t it fill you with a certain amount of exasperation to think that we don’t use our proposed gifts or loans to the 

Soviet Union as an instrum ent of bargaining power to get them to 

stop supporting the North Vietnamese and the Red Khmers?

Mr. H abib. T think in terms of our total pursuit of policies with the 

Soviets and the Chinese, we have not neglected that aspect of it.

Mr. Long. What fru it has it borne when they are still giving Indochina much more supp ort than we, apparently, are able to give-----

Mr. Habib. Insufficient fruit. T would say. It hasn't been sufficient 

to get them to turn it off. They also endorse the Paris agreement.

Mr. Long. Who is “they” ?

Mr. TTabib. China and the Soviet Union.

Mr. Long. That leads me to another question.

HOLDING POLICY

You are proposing to give enough resources to Cambodia to hold 

the line and not for them to go on the offensive in any way. You are 

setting a modest goal of just holding out. let’s say, for the rest of the 

fiscal year, living from day to day, waiting for negotiation. That is 

our great hope.

Mr. Habib. That is their objective.

Mr. Long. That is our objective.
69

Mr. Habib. That is their objective.

Mr. Long. Whose objective?

Mr. Habib. The people in Phnom Penh, the Khmer Government. 

That is their objective.

Mr. Long. If yon were the Communists, Hanoi ami the Soviet I nion which is helping them and all the others, and knew that policy, and we are an open society, people can read these minutes here, and so on, 

would yon go to the negotiating table ?

Mr. Habib. Not until the military situation has been restabilized. 

Then I might have to th ink about it again. Do I want to go throu gh all this again the next dry season? 

QU ES TION OF CO MMU NI ST PRESSURE

Mr. Long. Wouldn’t you say if they are not going to do anything to try to beat us—and all they are trying to do is hold on and on and on— why shouldn't we just keep up the pressure in the hopes tha t someone will just finally give up altogether? Everyone knows that this war just soil of barely scrapes through from one fiscal year—and parts of 

fiscal years—to others.

Mr. Habib. But they, too. have to.

Mr. Long. If you were the Communists, wouldn’t you say, ‘‘Let s 

keep up the pressure” ?

ACCOMMODATION NECESSARY

Mr. Habib. You know your people were saying tha t in 1973 when the Paris agreement was signed. Why did they come and negotiate •then and sign the agreement ? You say they might have signed it be­ cause they d idn't intend to live up to it. I don’t think it is necessarily as simple a judgment as that. I think that one must presume some logical approach to end results in this situation, and our opinion is, and the general opinion is, that the end of the war is not possible by simple military victory, that it has to involve some kind of accommo­ dation, adjustment, negotiation, compromise, call it what you will. 

public OP IN IO N

Mr. Long. If I were a Communist I would feel pretty darned encour­ aged at this point. I would say, ‘‘The end of the war looks to me to be fairly close, not more than a year or so away, by virtue of the exhaustion of the American public opinion.’’

Mr. Habib. You are presuming then that there will not be any funds provided. If th at is the case, then they are not going to negotiate, you 

are absolutely right.

Mr. Long. T think it is clear to everybody in the country tha t it is 

touch and go righ t now in Congress.

Mr. Habib. Th at is why we are here.

Mr. Long. And if not this year, next year. Why shouldn't the Com­ munists hold on and put on the pressure? Why should they go for 

negotiation?

Mr. Habib. It is a real problem.
70

U.S. TAX DOLLARS

Mr. L ong. If it were your money, would you keep pouring it down 

tho drain?

Mr. Habib. It is my money, a small portion of it. I feel it too. believe 

me, as much as anybody. It is my money.

Mr. Long. I know that sounds good.

Mr. Habib. No; it is.

Mr. Long. I haven't found very many people in the high circles, or 

even the lower circles of our Government, that spend Government 

money as if it were their own.

Mr. H abib. I am as conscious of the importance of precaution over 

the spending of the taxpayer’s money as it is possible humanly to be, 

certainly no less conscious than anyone in the Congress, Mr. 

Congressman.

Mr. Long. That would read well in any newspaper.

Mr. II abib. Th at is right. I hope it does too. I hope it does.

Mr. Long. I think I have completed my questions.

Mr. Habib. I, as a bureaucrat, am not any more spendthrift than 

anybody else is.

Air. Passman. Thank you, I)r. Long.

Congressman Ottinger, Congressman Leggett and Congressman 

Moffett are with us.

Alter the witnesses have finished their testimony, we will then hear 

from our colleagues in the Congress.

Mr. Conte?

Mr. Conte. Thank you, Mr. Chairman.

At the outset, Mr. Chairman, I want to welcome Secretary IIabib 

to the committee. I have known him for a good many years, and he is 

one of the finest of our career men in the State Department with one of 

the most illustrious careers of any State Department official.

197 5 OU TL AY S W IL L NO T BE IN CR EA SE D

Mr. Secretary, when the President sent up his message he said, “ I 

ask the Congress to consider a proposed supplemental.” He wanted 

$300 million for military assistance to the South Vietnamese forces 

and a budget amendment for additional authorizing legislation for 

$222 million for military assistance for Cambodia in fiscal year 1975. 

I don't understand his statement that “these proposals will not increase 1975 outlays.”

Is it the intent of the administration not to spend any of this money 

in 1975 ?

Mr. Habib. Would you please explain that to the Congressman?

General Fish. First of all, it is primarily ammunition. Under the 

rules that the Congress has made, we have to charge it as we order it 

delivered. We put on the M AP orders to provide the ammunition and 

the fuel to Cambodia. However, the replacement action that will really 

result in replacing the inventory and result in an outlay, that takes 

niore time, so it will be past the fiscal year before the actual outlay 

for increased production to replace this ammunition occurs.

Mr. Conte. The outlay will occur in the following year ?

Mr. Habib. That is correct.

Mr. Conte. But you are actually giving them the material now. is 

tha t right ?
71

Mr. Habib. We will place orders and we have to have the obligation authority to be able to place the orders, but the actual payment 

of the expenditure, the outlay to pay somebody for doing this, that 

is four or five months. It will be some time before the money actually 

starts flowing on an outlay basis, although we need the authority now 

to outlay it.

Mr. Conte. It is just like my buying a new car and postponing the 

payment of that car for 12 months.

General F ish. If it was a matter of you ordering a new car and you 

had to commit yourself now, you won’t pay for it until it has actually 

been produced.

We have a lot of ammunition that will be delivered to Cambodia. 

But the production order to replace it will be placed and the actual 

outlay will take place as progress payments are made for the products 

as they come from some manufacturers.

Mr. Conte. I understand.

population and area controlled by government

Mr. Conte. Mr. Secretary, how much of Cambodia is actually under 

the control of the Lon Xol regime? W hat percentage of the population and land area ?

Mr. Habib. The best estimate we have of the percentage of population is that 60 to 70 percent of the population is within the control 

of the Government of the Republic of Cambodia. In terms of ter ritory, I don’t know whether anybody has run a planimeter over the 

ground. As you know, basically the government controls Phnom Penh, 

the area around it, encalves around major cities, certain areas up 

around the rice-growing area, around Battambang and the rest of it 

is either no man's land or land well within the control of the Khmer.

All of the area in the Northeast and all of the area along the border 

is not government-controlled. They can't get into it even.

M I L I T A R Y A I D S IN C E 1 9 7 0

Mr. Conte. General, how much military assistance, have you given 

Cambodia since 1970? And how much assistance of other types?

General Fish. I would have to provide that for the record, sir. for 

accuracy. If I may, I will do that.

[The information follows:]

Militar y Assistance Provided Cambodia During Period 1970 Thru 1974

As of June 30. 1974. we have provided to Cambodia $753 million in m ateriel and 

services and $61.3 million in excess defense article s at acqu isition costs.

[In m illions of dollars]

Fiscal y ear:

19 70..

1971..

1972..

1973..

1974..

Total

Grant Excess

4.9 0.4

109.9 12.2

123.6 16.7

174.5 21.5

340.1 10.5

753.0 61 .3
EC ONOM IC AID SIN CE 19 70

Mr. Habib. We will give you the economic figures also.

[The information follows:]

CAMBODIA— U.S. ECONOMIC ASSISTANCE BY FISCAL YEAR

Fiscal y e a r1975 (pro1970 1971 1972 1973 1974 jecte d)

CIP...................................

Exchange support fun d.

Hum anitarian..................

Technical s u p p o rt .. .. ..

AID to ta l.............

Public Law 480 program

Grand total..........

70.0 136.5 45.0

20.5

54,4

18.3

64.9

13.1

1.2 * 21. 3 ’ 20.0

.6 .6 1.2 2.0

(None) 70.0 37.1 67.3 95.2 100.0

_ (None) 6.8 20.6 25.8 182.5 ” 150.0

. (None) 76.8 57.7 93.1 277.7 250 .0

1

 Includes cash grant of $20,000,000.

3

 Includes $17,200,000 in local currency generation under CIP.

» Includes $10,000,000 in local currency generation under CIP.

< Includes amounts programmed for rice and wheat.

5

 Includes USDA-paid freight ($10,000,000 estim ated).

E N E M Y IN C EN TIV E TO NE GOTI ATE

Mr. Conte. You stated in your remarks. Mr. Secretary, that “It has 

never been our expectation that the conflict would end in a conclusive military victory by Cambodia Government forces.'' Will you tell 

us please what incentive there is for the insurgent forces to negotiate 

a settlement when the other side has no intention of winning?

Mr. Habib. Congressman Long posed the same problem. I am afraid 

I have got to give you the same answer. The answer is the judgment 

as to the willingness and will of the Communists to continue the 

struggle, while they recognize that their opponents may not be able to 

win. they are in doubt as to whether they will be able to win. At some 

point, just as it has been before in this extended conflict, people have 

to make decisions as to whether to seek tlieir objectives by other 

means.

In the case of Cambodia, the government in Phnom Penh has offered 

the other means, the other means being through a negotiated compromise settlement.

The U.X. is on record as favoring it and also willing to facilitate 

it. The United States, through our President, has made it clear that 

our policy calls for a peaceful compromise settlement. At what point 

the other side is prepared to take up that offer is indefinable.

I would say this, as Congressman Long himself pointed out. it is 

not possible that thev will see it clear to take up that option as long 

as they see the possibility of an early total victory.

stalemate

Mr. Conte. H ow about the other side of the coin, that by preserving 

the military balance in Cambodia, they continue the present stalemate.

Mr. Habib. Xo. I thin k that as far as the government in Phnom 

Penh is concerned, they have made it very clear they are willing to 

seek a compromise settlement. They have stated it again and again
73

pub licly. The y have called upon the othe r side to meet with them un ­ de r any circ umstance s, wi tho ut any pr io r conditio ns, to just disc uss how th at may come abo ut. Obviously, the fir st orde r of busines s in any such eff ort w ould hopeful ly be a cease-fire so the y can sto p ki lli ng 

each other.

CO NT IN UI NG ASS ISTANCE

Mr. Conte. H ow long do you th in k we sho uld give assistan ce to 

Cam bod ia?

Mr. H abib. I t's h ard to tell wh at is going to happ en when ha lf the 

equ atio n is no t un de r yo ur con trol. I th in k one has to follow the princ ipl e, the pr in ci pl e I wou ld enuncia te an d the same principle th at we have pu rsue d now fo r man y years —th at whe n people are prep ared to defen d them selv es in such circ umstance s, the Uni ted 

States has been will in g an d sho uld con tinue to be willing to prov ide 

the resources fo r them to defend them selves.

IIO W MUCH AID NE XT YEAR

Mr. Conte. In th at case, if th is th in g continues and we give you 

wh at you are a sking fo r here, t hi s will ge t you th roug h this year, and assum ing there isn ’t a negotiated set tle me nt ne xt year, how mu ch 

assistan ce do you th in k we sho uld give Camb odia next year?

Mr. H abib. T he ad minist ratio n has subm itted its b udget req ues t as 

of tod ay, I th ink. The figure is the re. The answ er is I would hop e th at yo ur assump tio n th at we cannot move to a negotia ted settle­ me nt is not a corre ct assumptio n. I f y ou r ass um ption is inc orr ect, we could ru n dow n the cost of th e th in g v ery quickly. I wou ld hope th at we wou ld then do wha t we have done in othe r places in such ci r­ cumstances, an d th at is help reb uild. So there m ight lie st ill a requ ire ­ me nt for fun ds bu t now her e ne ar the mag nitude now exp ressed no r 

certa inly none fo r m ilitar y purposes.

PROPOSAL TO PROVIDE MORE FOOD

Mr. Conte. You ar e ask ing fo r the elimi natio n of the ove rall ceiling on Camb odian ai d which I int rodu ced in orde r to prov ide mo re 

food u nder Pu blic La w 480 program s ?

Mr. H abib. That is correc t.

Mr. Conte. H ow m uch food do yo u p ropose to send to th at c ou ntr y ?

Mr. H abib. Ab ou t $70 million a dd ition al. Am I c orrect, J oh n?

Mr. Murpiiy. Ye s; th e precise numb er is 314,000 ton s of rice and 

34,000 tons of wheat . We have now pro vid ed fo r 211,000 tons of rice. So we need the differe nce, 103,000 tons. W e hav en ’t provid ed any whea t 

yet.

Air. Conte. W hy do n’t you then come in here before the Fo reign 

Af fai rs Com mittee an d ju st ask fo r an increase in the cei ling by the 

am ount of foo d a ssistance ?

Mr. Murphy. We are d oin g th at.

Mr. H abib. We are doing tha t. Tha t is pa rt of the pro position .

PUBLIC LAW 48 0 COMMODITIES

Mr. Cont e. But yo u are a sking f or an incre ase in m ilitary as sistance 

also?
74

Mr. Habib. Yes. The military and economic are separate. The increase in the ceiling applies in terms to allow us to provide the Public 

Law 480 commodities necessary to feed the population. The amount 

tha t has been provided within the ceiling is insufficient to feed the 

population.

Mr. Murphy. But we need no additional authority, Mr. Conte. The 

authority present under Public Law 480, plus the authorized $100 million appropriation for economic aid, will adequately take care of our 

needs. The problem is we have now used $92^ million under Public 

Law 480 and a half million of the dollar appropriation. We are a t the 

ceiling. We still have the l*nblic Law 480 authortiy but we can’t use 

it. So all we are asking under this on the economic side is you simply 

tako t hat $177 million ceiling oif so that we can use a uthority that is 

presently in our hands under Public Law 480.

Mr. Passman. That cleared it up. You needed no additional money 

for economic aid. You only wanted the ceiling lifted to proceed ?

Mr. II abib. That is right.

FOOD REACHES TH E PEO PLE

Mr. Conte. I know that Mr. Long asked you some questions in this 

regard, but are you convinced tha t this Public Law 480 food actually 

gets down to the people ?

Mr. Habib. Yes, sir; we are. The areas in which it goes are fairly 

limited. The great bulk of it is consumed in Phnom Penh and in the 

city enclaves to which it goes. It has to be fed to them. They can't 

live without it.

RECONNAIS SANC E FL IG HT S

Mr. Conte. Mr. Secretary, it has been reported in the newspapers 

tha t American pilots are flying reconnaissance missions over Cambodia and other parts of Indochina. If this is so, what happens if one 

of these planes is shot down ?

Mr. Habib. That has not happened, sir. I don’t know.

Mr. Conte. General, do you want to answer that? Ho we get into 

another Gulf of Tonkin situation ?

Mr. Habib. I wouldn’t think so.

General Fisii. We would hope not. If one of them were shot down, 

our reaction would depend upon the actual circumstances. For example, Khmer Armed Forces in the area might be in the best position 

to pick up survivors. I can’t foresee anything like th at you referred to 

as the Gulf of Tonkin. The will of the Congress is clear. I say I think 

the will of the Congress is clear how they wish us to operate, and we 

would operate in accordance with that.

Mr. Conte. Thank you. General.

RIVER BLOCKADE

As I understand the situation, the access to Phnom Penh for food 

supplies is largely through the convoys through the Mekong River.

General F ish. Yes.

Mr. Conte. The insurgents largely control the river. Won’t that 

control increase, General, as the river levels drop during the dry 

season ?
75

General Fish. Certainly that is one of the things that makes it easier 

for the Communists to choke the river supplies off for limited periods, 

because there is a narrower channel, a narrower passage. That is what 

is going on rig ht now, because we arc in the midst of the dry season. 

This is why they make the attempt at this time. I t has been possible 

in spite of this to get convoys up the river, even as recently as over the 

weekend. I t’s apparent tha t the Khmer Government forces have been 

able to cope with the situation although, as I stated in my statement, 

this is at considerable cost of men and ammunition and materiel.

Mr. Conte. If you close off the river, how do you get that food supply into the capital ?

General Fisii. We don’t think they will be able to close it off. Of 

course, this is a judgment. We think the Khmer government forces 

have demonstrated a capability and combined knowledge, Army, Navy, 

and Air Force, to get th e river opened up for periods necessary to get 

1 he convoys upstream.

DEPENDENCY OX U.6. FOOD

Mr. Conte. I want to ask Mr. Murphy for what portion of their food 

is Cambodia dependent upon the United States and how long do you 

figure this will continue? "Would it not be accurate to say tha t the 

Cambodian economy will continue in a shattered state as long as we 

have this military stalemate ?

Mr. Murpiiy. At the present time Cambodian production of rice, 

Mr. Conte, is down to one-third what was prewar level. Cambodia, you 

know, historically was a rice exporter. The war and the p ligh t of the 

refugees who are a fraid to plant into the cities has cut the rice down 

to one-third. So presumably, with exception of the small quantity that 

was given by Ja pan , a few thousand tons, we are making up the twothird s difference. That is what the 314,000 tons is. That 314,000 tons 

is required to carry us through November because the first possible 

convoy that, could arrive there from fiscal year 1970 funds would probably be late November or early December.

Mr. Conte. Of this year ?

Mr. Murphy. Of this year. So we have to provide in this fiscal year 

for about a 120-day lead time between the time we sign the agreement 

with the country and the time the rice is off-loaded under the best of 

circumstances. That is assuming no difficulties with the convoys.

PURCHASE OF AM MU NIT ION

Mr. Conte. General, you say that the major Cambodian military 

need is for ammunition. Why didn’t you, and why don’t you now, 

spend your entire military assistance budget on ammunition?

General F ish. Sir, at the present time we only have $15 million left. 

So even though we have spent the entire remainder, in fact we will 

spend about 90 percent of it on ammunition, that would not carry us 

through the period.

Mr. Conte. $15 million would not?

General Fisii. That is correct.

Mr. Conte. How many rounds of ammunition would tha t buy?

Mr. vox Marbod. Th at would buy roughly 7,000 short tons of ground 

ammunition.
76

Mr. Conte. How ma ny roun ds ?

Mr. vox Marbod. I can give you a table prov iding th at inf orma tion.

I can also give you a breako ut by class o f am mu nition . The big items 

for Cambodia are 60-millime ter mortar s. 105 -millimeter how itzers 

and small arm s amm unitio n.

Mr. Conte. Get th at f or the record, please.

[The in for ma tio n fo llo ws:]

M U N IT IO N S IT EM S

Base d on current prices and recent usage in Cambodia, $15 million would 

buy approximately : 22,900,000 rounds of small arms ammunition ; 193.000 mortar 

rou nds ; 686,000 grenades; 119,000 artillery shells; 6,100 m ines; 12,300 rockets;

2,500 bom bs; and, 5,400 flares.

NATURE OF CAMBODIAN CO MMI TM EN T k

Mr. Conti:. I have one or two more questions, Mr. Ch airma n. Will 

you tel l us. Mr. Secre tar y, exactly what the na ture of ou r com mitme nt in Cam bodia is? In othe r word s, is it a trea ty , an executive *

agreem ent , or is it some thi ng else tha t com mits us to Cam bodian 

assistan ce?

Mr. H abib. W e don't hav e a mu tua l security trea ty with Cambodia.

I th in k the Secre tary defined the com mitment in th e most rea listic 

terms when he said, I th in k not long ago, th at when the y took up 

arm s to resist wh at was ha pp en ing to them, we hel ped them and we 

said we would help them and we, continued to help them . It 's a 

deriv ative, in effect, of ou r pa rti cipa tio n in the area. But no less an 

oblig ati on thereby.

REFU GEE AS SIST AN CE

Mr. Conte. I s any of th is aid going to assist the refu gees? I would 

like to know how ma ny refugees the re are and wh at s ort of pro gra m 

or arr angeme nts there a re fo r th e refugees?

Mr. Murp hy. A very subs tan tia l am ount of the economic aid is 

fo r refugees. Mr. Conte, in two ways. We hav e a prog ram which is 

direct in which we are gi ving support to a numb er of volun tary 

agencies, such as CA RE , Lu th er an World Relief , Catho lic Relief 

Service s, U.X.. and so forth.

Th en pa rt of it is indir ect, because t hey are able to get some of the 

local cur rencies tha t are gen erate d by the co mmodity im po rt pro gra m. 

Bu t we have $20 million ou t of our $100 million ap prop riation th at 

has been autho rized th at is specific ally and dire ctl y labeled for refugee 

assistance.

Mr. H abib. I would like to rea d into the record a full rep ort . I th ink 

the refugee situatio n is worth the concern and attention of the committee. Could I read some thi ng into the rec ord as we antic ipa te it ? I 

wou ld like to rea d some thing on the refu gee s in Cam bodia.

REPORT ON CAMBODIAN REFUGEES

It is estimated th at there are almo st H/o millio n wa r disp laced pe rsons in Camb odia: 520,000 reg istere d in Phnom Pe nh , 670,000 in the 

{uovinces. and 245.000 not registere d. Of thi s nu mber, only abo ut 53.975
z z

are in government camps and centers. The remainder are on their own 

or living with friends and relatives. An estimated 533,950 persons are 

receiving assistance in the form of food, shelter, clothing, et cetera, 

from the government of the Khmer Republic, voluntary agencies or 

international organizations. AID provided in fiscal year 1974 approximately $3.9 million through 

voluntary organizations, you know, the Catholic Relief and CARE, 

World Vision, and Interna tional Committee of the Red Cross. In addition, in local currency the equivalent of $16.3 million was generated by 

the commodity import program and this has already been made available to these organizations and to a newly established semiautonomous 

Cambodian foundation for resettlement and development activity.

For fiscal year 1975, $‘20 million is proposed for dollar and local 

currency costs of seven direct hired technicians, resettlement equipment and materials, relief services, food and additional grants to voluntary and international agencies.

It's interesting to note tha t as of Jan uar y 20, we estimate that 

60,000 new refugees have been created by the c urrent offensive which 

began on the first of Janua ry. The offensive has not only generated new 

refugees, but it also, badly set back refugee crop programs. That is. the 

refugees were planting the ir own crops. It forced them out of those 

crop areas and it throws an additional burden on the need for imported 

Public Law 480 rice.

Mr. Conte. Thank you. Mr. Chairman.

Mr. P assman. Thank you very much, Mr. Conte.

QU ESTIO N OF LEGAL CO MMITMEN T

Mr. Conte mentioned something about our legal commitments to 

Cambodia. If we do not provide the appropriation we have not violated a legal commitment, have we ?

Mr. II aiub. That is correct, sir, anywhere we have treaty commitments. All treaty commitments are based upon, as you know, the consent and the appropriation by Congress.

Mr. P assman. I want to get that in the record.

Mr. I Iabib. That is correct, sir.

Mr. P assman. I f we should deny all funds, we have violated no legal 

commitments?

Mr. H abib. That is correct.

Mr. Roush. I was going to try to avoid any argumentative questions.

Mr. I Iabib. They are fun.

Mr. Roush. But this response prompts perhaps at least a statement 

on my part, in that a while ago. during your testimony and durin g the 

time I was questioning you. you pointed to those nations, particularly 

those in the Pacific with which we do have mutual security agreements, 

as being those nations th at would perhaps lose confidence in us because 

we would no longer keep our word if we hacked off from Cambodia.

I am grateful to the Chairman for pointing out tha t we have no 

legal obligation to Cambodia in that regard. I can’t for the life of 

me see how. that being the case, that it serves the best interests of 

this country to spend all of this money. However, the questions I have 

from now on, Mr. Secretary, are factual.

47-299—75------ 6
78

U.S . M IL IT A RY AS SI ST AN CE BE GU N

1 would like to go back and ask questions which will, I think, 

prompt short answers. When was it we first provided military assistance to Cambodia ? Wh at fiscal year was it ?

Mr. Habib. There were two periods, I think. In the current period, 

I think 1970.

Mr. Roush. That was the fiscal year 1970 ?

Mr. Habib. Fiscal year 1970, yes, sir.

General Fisii. $8.2*million in 1970.

AM OU NT PROVIDED IN FISCAL YEAR 19 74

Mr. Roush. What did we provide in fiscal year 1974?

General Fisii. $374 million. Fiscal year 1974, my figures here show 

$374 million.

MILITA RY AID IN FISCAL YEAR 1975

Mr. Rousii. We are proposing, if we should meet your request, to 

provide for fiscal year 1975 a total of $499 million in military assistance. is that correct?

General Fish. $497 million is my figure, sir. $275 million plus the 

$222 million that is now being discussed before the committee.

ECONOM IC AID IN FISCAL YEAR 1975

Mr. Roush. All right. I have $222 million plus $200 million, plus 

$75 million. You are correct. Then this year, if we should meet the 

authorization as far as domestic aid is concerned, through Public 

Law 480 funds we would provide $77 million. Is th at correct? Is that 

the authorization ceiling for that ?

Mr. Habib. Xo, sir.

Mr. Murphy. We have used $921/2 million under Public Law 480 

and we need another $73 million. So that would be $156 million.

Mr. Roush. How much under economic assistance ?

Mr. Murphy. $100 million.

TOTAL AID TO CAMBODIA IN FIS CAL YEAR 3 9 75

Mr. R oush. We are providing somewhere between $675 million and 

$700 million then in total aid to Cambodia for fiscal year 1975, is tha t 

correct ?

General Fish. I make it $762.5 million.

FISCAL YEAR 3 976 REQUIRE MENTS

Mr. Habib. I think your figures are in the ballpark.

Mr. Rousii. What are you asking for, for fiscal 1976? I know this 

isn't before us right now, but I should think it would be a logical 

follow-on here. What are you asking for fiscal year 1976 by way of 

military assistance for Cambodia? I haven’t had a chance to read my 

budget. They just delivered it to my office.

General F ish. I t’s $425 million.

Mr. Roush. Is that just military assistance?

General F ish. Yes, sir.
79

Mr. Roush. What are you asking by way of economic assistance?

Mr. Murphy. The division of economic assistance for Indochina at 

the moment as between countries has not been figured out yet, Mr. 

Roush.

QU ES TIO N OF ADD ITIO NAL REQUEST S

Mr. Roush. Can we lie satisfied, Mr. Secretary, in general that you 

will not be coming in for another supplemental for fiscal y ear 1976 

insofar as military assistance is concerned ?

General F ish. I would say it would not be our intention. Of course, 

to what degree you can forecast the future and the policies that the 

Congress and the executive branch want to follow ?

Mr. Habib. The amount requested is on the assumption of the requirement for the year, Mr. Congressman.

SIZ E OF CAMBODIAN ARMED FORCES

Mr. Roush. General, a few questions concerning the military. What 

is the size of the government forces fighting or under arms in Cambodia ?

General F isii. About 222,000. Is tha t correct, General Cleland ?

General Cleland. That is including territorials.

Mi-. Habib. Break it down for them. Give them the figures for regular forces and territorials.

General Cleland. Fo r the regular combat forces, aliout 41,000. For 

the territorial forces, about 81,000.

Mr. Rousii. You will have to pardon me, General, but what is the 

distinction between the regulars and the territorial forces ?

General Cleland. Sir, the regular forces are maneuver units. They 

are as close as you could get to our regular establishment. The t er ritorials live in their home area and are more like militia.

Mr. Roush. Go ahead.

General Cleland. In addition, there are the headquarters and support forces of about 75,000, a 10,000-man air force, and a 15,000-man 

navy.

number of insurgents

Mr. Roush. Wh at are the number of troops, General, that the insurgents have under arms ?

General Fish. General Tighe can answer that best.

General Tigiie. The number at the present time is estimated to be 

around 60,000.

Mr. Roush. They are giving the 222,000 a hard time.

General Tigiie. Yes, sir. tha t is a large body of insurgents.

Mr. Rousii. You say it ’s a large body of insurgents, General.

General Tigiie. Yes, the regular combat portion is very large.

General Cleland. Looking at regular combat forces you have quite 

a discrepancy.

NO RT H VIET NA ME SE FORCES IN CAMBODIA

Mr. Rousii. How many, if any, North Vietnamese troops are in 

Cambodia ? Are they actively engaged in combat ?

General Tighe. We estimate there are less tha n 2,000 North Viet-
80

namese actually engaged in combat. There are, however, somewhere 

around 2,000 to 3,000 North Vietnamese who are involved in logistics 

activities inside the country.

Mr. Rousii. I s that in addition to the 2,000 engaged in combat ? 

General Tigiie. Yes, sir. In addition to that number, there is a substan tial additional number up to some 20,000 VC out of South Vietnam 

working inside Cambodia in the logistics and support fields.

U. S. MIL IT AR Y PER SONNEL IN CAMBODIA

Mr. Roush. How many U.S. troops do we have in Cambodia? I 

understand the limitation.

General Fish. None.

Mr. Rousii. We have a few with the Embassy, don’t we?

Mr. II abib. We have no troops per se.

Mr. R ousii. People who belong to the Armed Forces then?

Mr. II abib. General Fish, will you give the breakdown of the military personnel in Cambodia?

General F isii. 113 people in military uniform. I t varies from day to 

day in order to stay within the ceiling. But these are the ones concerned 

with the logistics, the delivery team activity. 113 military is a good 

average.

General Cleland. There is also the military attache’s office.

General Fish. Including the military guards at the Embassy also.

Mr. Rousii. One said plus and one said including.

General Cleland. The Marine Guard is included in the 113.

CI VI LI AN MILITA RY ADVISERS

Mr. Rousit. Do we have any civilian military advisers? 

General Fish. No advisers of any sort.

MO VEME NT OF SU PPLIE S

Mr. Roush. I just thought I would ask. How do we get our supplies 

into Cambodia?

General Fish. Mainly throu gh the convoys up the Mekong River. 

Some limited amounts come in by air.

Mr. Rousii. I s tha t which comes in by air in planes controlled by 

Cambodian forces?

General Fish. I would like to have Mr. von Marbod comment.

CONTRACT AIR CARRIER

Mr. von Marbod. At the present time we have a contract with Bird 

Air, Inc., of the State of Washington. They provide five crews to supply Phnom Penh by air and to a ir drop rice and other materials into 

Cambodia. We provide them five C-130 aircraft and they fly approximately 10 to 12 sorties a day.

Mr. Rousii. A t any time are any of these planes piloted by U.S. 

Armed Forces pilots?

Mr. von Marbod. They are not. We discontinued tha t some months
81

ago. We have no current plans to reintroduce United States Air Force 

military crewed flights, either in an air-land or air-drop role.

Mr. Conte. W ill the gentleman from Indiana yield?

Mr. Roush. Yes, sir, certainly.

TY PE OF CONTRACT AND COST

Mr. Conte. Could you tell us what kind of a contract that is with 

Bird? "What is it costing the Government ?

Mr. von Marbod. The total cost for that contract this fiscal year 

is currently about $1.8 million.

Mr. Conte. How much are we paying per trip?

Mr. von Marbod. I would have to provide tha t information for the 

record, Mr. Conte.

[The information follows:] 1

BIRD AIR CO STS

The t er m s of t he c ontr act iden tif ied a c ost of .$450 p er ho ur . Rased on ex pe rien ce 

to t his da te, th e aver ag e fo r eacli roun d tr ip h as been 2.3 ho urs. This wo uld equat e 

to a pa ym en t of appro xim at el y $1,035 to B ir d A ir i>er tr ip .

BACKGROU ND OF AIR CARRIER

Mr. Conte. Also provide for the record some background on the 

Bird Co.

Mr. von Marbod. Yes, sir: T will do that.

[The information follows:]

Bird Air Co.

The Bird Air Co. is a di vi sion of B ird & Sons, Inc., a W as hi ng to n S ta te co rpo ra tion w ith gen er al olfices in Oak land , Ca lif . On Sep tem be r 27, 1974, th e 

D ep ar tm en t of th e A ir Forc e an no un ce d th e aw ard in g of a $1.76 mi llion le tt er 

contr act to B ird A ir Co. fo r a ir li ft s up po rt o f th e U.S. m il it ary a ss is ta nce p ro gr am 

to Ca mb od ia.

Pr ev io us ly, th e B ir d & Son Co. ha d a contr act w ith U SA ID /L ao s to pr ov id e 

six je t Itan ge r he lico pt er s to su pp or t th e U SA II) re fu ge e and hum anit ari an pro ­

gra m s in Laos. How ev er, th is ac tion is no t re la te d to tlie a ir li ft su pport of 

Cam bo dia.

MATER IAL IN PI PELIN E

Mr. Conte. Thank you. You said we only had $15 million remaining 

for ammunition. Yet, by your own statement you say the delivery 

pipeline is $42 million and in-country stock is $20 million.

General F ish. S ir, as I understood your earlier question, it was how 

much money was left that we could spend for ammunition. That is. the 

$15 million is all we have left. The rest has already been spent. But the 

things are in the pipeline getting there. This is tlie value of the pipeline.

Mr. Conte. On top of the $15 million, you have $12 million in the 

pipeline.

General Fisii. Tha t is right. It’s the value of the material in the 

pipeline.

Mr. Conte. And then $29 million in-country stock ?

General F isii. Of things in country. That is the value of it.

Mr. Conte. But it hasn’t been fired or anything? It’s still there ?

General F isii. That is right.
$ 8 6 M IL L IO N IN A M M U N IT IO N

Mr. Conte. Actually, to set the record straight, you have about $86 

million here in ammunition.

General Fish. Yes, sir. We have discussed that, and that is right. 

That is what they are going to have to run on.

Mr. Conte. So when we change that record, when I ask you how 

many rounds of ammunition $15 million would buy, I would like to 

know what $86 million would buy.

General F isii. Yes, sir. Roughly the answer in short tons would be 

about $2,350 a short ton. So that is the arithmetic of it.

Mr. Conte. When you are talking about tons I think of gravel or 

something. Give it to me in rounds.

^General F ish. We will. 

fThe information follows:]

M u n it io n s I te m s

Based on current prices and recent usage in Cambodia. $86 million of military 

assistance would buy approximately the following munitions item s: 131.300,- 

000 rounds of small arms ammunition, 1,108,000 rounds of mo rta r ammunition, 

3.033.000 grenades, 685,000 artillery shells, 35,518 mines, 70,300 rockets, 14,400 

bombs, and 31,000 flares.

A M M U N IT IO N SU PPLY R E M A IN IN G

Mr. Passman. T believe you stated categorically for the record 

earlier th at under the present rate of expenditure you have only a 60- 

day supply.

General F ish. Yes, sir. T tried not to make it categorical.

Mr. Passman. I thought so. I thought you said at the present rate 

of expenditures.

General F ish. Yes, sir.

Mr. Passman. Then everything would be gone in 60 days.

General F ish. Right.

Mr. P assman. Tf they drag it out. they will have to use less.

General F ish. That is right.

Mr. P assman. And they can only drag it out up to the 60 days.

Mr. Obey. Mr. Habib, it’s getting late. T think Mr. Roush has asked 

most of the specific questions that T have been interested in. Let me 

ask you a couple of general questions.

primary goal is negotiated settlement

Tn response to Mr. Early earlier, you indicated tha t your primary 

goal is a negotiated settlement. Right ?

Mr. ITabib. Yes, sir.

Mr. Obey. You implied tha t in the absence of any negotiated settlement that it was the policy of the United States to continue supplying money to Cambodia.

Mr. TTabib. Yes, sir.

M IL IT A R Y defeat TN C H IN A

Mr. Obey. Tf there is no negotiated settlement, then you say the d ifference between “abandoning” Cambodia and the difference between
83

what happened in China is simply that there was a military defeat 

which occurred in China. Is that right ?

Mr. Habib. I suppose if I said th at, to talk about the difference between two such circumstances which occurred at two different times 

in history, it’s not a question one answers by saying yes. That is right. 

I could say yes, tha t is right; but, on the other hand. I could spend 

some time with you pointing out the differences that there are in the 

circumstances in the situations in our own involvement, in our own 

expectations. In a way, yes; in a way, no.

Mr. Obey. In defending your original statement—that it was without precedent for us to abandon—your words were. “Such a decision 

would amount to a conscious act to abandon a small country to a 

forcible Communist takeover, an action without precedent in our history .” When I asked about China you indicated tha t-----

* Mr. H abib. That I didn't consider that a conscious act of abandoning. No; I did not.

Mr. Obey. Your reason for tha t is tha t it was a military defeat ?

Mr. Habib. And also our relationship with the people involved went

* on. It went on in a different form, but it went on.

XO OPEN-ENDED COMMITM ENT

Mr. Obey. At the bottom line let me simply ask this, I know you said 

there is no openended commitment. To me it seems that is the only 

question we have to ask. You have indicated that there is no openended 

commitment on the part of the United States. You defend that statement by saying that we hope we can get a settlement.

Mr. Habib. By virtue of the law, there can be no openended commitment. The Congress must appropriate the funds each year. There 

can be no openended commitment. The United States never makes 

openended commitments.

Air. Obey. Of course tha t is true. If I go home and justify to my farmel's and everybody else in rural Wisconsin why we have to continue to 

shell it out, they are going to want to know for how long and they are 

going to want to know whether we do have a definite policy to end our 

involvement soon. And if the other side isn’t nice enough to come to 

the table, it just seems to me tha t what you are saying is that, in the 

event there is no negotiated settlement, we are just going to go on and 

on and on.

CONSEQUENCE OF DEADLINE

Mr. Habib. Mr. Congressman, if you set a deadline of 1 year or 2 

yeais or 3 years, then I think you get back to (he circumstances that 

Congressman Long said a while ago—they will never come to the table. 

„ Mr. Obey. I understand it. That is why I feel if we are going (o cut

this money off it would lie silly to give you some money now and say 

no more come the next fiscal year.

Mr. H abib. That is if you have decided that you are prepared to see 

it go.

Mr. Obey. Right.

Mr. H abib. That is a determination for which we have tried to point 

out to you what the consequences are. I think you understand that.
LOSS OF CAMBODIA

Mr. Obey. I understand. Again I want to quote the same statement 

I did before, tha t General Fish indicated that, “Cambodian armed 

forces have increasingly had to rely on the superiority of L.S.-provided firepower and logistical systems to offset Communist advantages 

of supplies and aggressiveness.”

In the. end, assuming that there is no increase in the annual dollar 

commitment on the part of this country to Cambodia, and assuming 

for the moment th at there would not be reached a negotiated settlement, in the end doesn’t what we have been told about the military 

situation imply tha t they will probably go down anyway ?

Mr. H abib. Are you also assuming tha t the other side will maintain 

the level of conflict at the existing level ?

Mr. Obey. I am not assuming anything.

Mr. Habib. But you have to assume that. If the other side maintained the present level of activity, your presumption is correct, and if 

we do not put the resources into it, your assumption is correct.

HOPE FOR NEGOTIATED SETTLEMENT

Mr. Obey. I t seems to me the only question we have to ask is how 

much confidence we have in the hopes that there may be a negotiated 

settlement in the not too distant future. Isn’t that really the only 

question we have to decide ?

Mr. Habib. That is one side of the coin. On the other side of the coin 

you also have to consider the question as to whether or not you are unprepared to provide those resources which they would require to defend 

themselves. There is that side of the coin also. They go together.

Mr. Obey. I for one have absolutely no confidence that a negotiated 

settlement would he forthcoming. I really think that it is a mighty 

weak reed for us to lean on.

Mr. Habib. Let me sav very strongly I do not agree with that statement. I base my disagreement, upon an understanding of the circumstances of negotiations and what might be involved far beyond 

what I can discuss in this session.

Mr. Obey. I understand that. But that is no different than anything 

we have heard liefore.

Mr. IT abtb. It is quite a bit different.

Mr. Obey. W ith all due respect, sir: I don’t think so. What I am 

concerned alxiut. is what Mr. Koch indicated earlier. I see mv district 

turning isolationist every day. I come from a State which is in the old 

La Follette tradition.

Mr. Habib. I remembfer it very well.

Mr. Obey. La Follette was one of the few people who voted against 

our getting involved in Wo rld Wa r I. We have had that tradition in 

the State of Wisconsin ever since.

SLAVISH ADHERENCE TO COMMITMENT

What bothers me very much is the implication which Mr. Koch 

raised. I think that my constituents—and I think the same is true for 

the rest of the country—are losing their abilitv to differentiate. "What 

I am afraid of is that if we follow the logic of one statement made by
85

the chairma n, fo r ins tan ce, when he said th at , to ref use these do lla rs 

now would be a rep ud iatio n of the polic ies of Presi dents Tr um an , 

Eisenh ower. Kennedy . Johnson, Nixon, a nd Fo rd , and when both you 

and Gen eral Fish have ind icated in the words of Gener al Fis h:

Su ch w ithdra w al wou ld no t only lead to th e los s of Ca mb od ia hut al so to th e 

even mo re im port ant loss o f confiden ce on th e p a rt of oth er allied and fr ie ndly 

nat io ns in th e val id it y of U.S. co mm itm en ts to in te rn ati onal se cu rity .

I am concern ed th at if no t only ou r allies bu t our own people feel 

th at we are pu ttin g slavis h adh erence to com mitments ahe ad of consid era tio n o f the w isdom t hrou gh wh ich we both mak e and review those 

com mitmen ts, that we are goi ng to have ju st th at . A A e are g oin g to have 

a return to the nob ody but us philosophy th at we had in th e 1920's 

and 1930's and which led to AA’orld AA’ar II .

SEN SE OF URG EN CY

I realize this is more of a speech th an a que stio n, bu t I can un de rsta nd the sense of urgency you feel in ask ing fo r these fun ds. Bu t I 

feel jus t as dee ply and 1 have a concern which is every bit as serious, 

th at if we contin ue this, just based on the slim reed th at there may be 

somewhere down the line anoth er negotiated settleme nt, which as Mr. 

Bevill earlier point ed out might or mi gh t not be more successful th an 

the last one in A’ietnam , th at our people are not going to su pp ort the 

kin ds of comm itments we ought to make.

Q UEST IO N OF AM ER IC AN W IL L IN G N ESS

I talked to four or five gro ups last week end and asked each one of 

the m if we went to war in Europ e tom orrow, would the y be willing 

to send troops and they sa id no. I th in k th at tha t is a very serious s itua ­

tion and I think every da y th at this con tinu es contr ibu tes to that.

Mr. II abir. Mr. Congressman, I could n't agree more with almost 

ev erythin g you said . 1 also am concerned, and I think the Un ite d 

St ates policy has reflected the concern over th is wi thdraw al menta lity which has been growing in this co untry.

None of us who have an ything to do with the foreign policy respo nsibilitie s of the Un ite d State s can have an ythi ng but the same 

sort of concern th at you have expressed with respec t to the wi lling ­

ness of the Am erican people to supp ort the kin d of foreign policy, 

the kin ds of com mitment s that we hav e dev eloped in the intere sts of 

a stable and p eaceful wo rld .

It 's a much bigg er question than Cam bod ia. I agree with you in 

th at re gard.

U .S . R ESPO N SIB IL IT IE S

Bu t I would say th is, th at vou and I and others like us who have 

the res ponsibility to exercise the au th or ity given to us in these fields 

hav e to take int o accoun t the to talit y of the pro blem and then explain it to our peop le. I think, for example, th at it can be exp lain ed 

to our people th at we have responsi bilitie s in the world. I know 

very well the di stur bi ng effect th at the last 10 years have had with 

respec t to the dev elo pm ent of the kin d of forei gn policy th at we 

were used to or we were looking forw ard to as well. But t ha t doesn't 

den y the va lid ity of the arg um ent. An d it doe sn't den y the req uirements of th e im me dia te situ ati on.
86

LACK OF ASSURANCE

It would seem to me th at I could solve my difficulty in persu ading 

you if I would say to you. “M r. Congressman, I swear to you th at 

tom orrow I can produce an agr eem ent and we would ge t a peaceful 

settlem ent. I can’t say th at , in all honesty. Bu t I can say this to you 

in all hon esty , th at it can be done, th at it will no t be done in the face of 

mili tary weakness, th at it will only be done in the face of the kin ds 

of mili tary circumstance s th at move people to a comprom ise 

settlem ent.

I he elem ents in flic sit ua tio n over which we have some influence— 

our own policy, the policy o f ou r allie s—have moved in th at direction 

alread y. 'Che elements of the s itu ation over which we do not have c ontrol have not reached th at conclusion yet. T think th at the y can be 

bro ught to tha t conclusion. I have reason to believe the y can be brought 

to th at conclusion.

If T could give you bla nket assu rance of the sort th at you ask from 

me, I would give it to you. But I can’t in all hon esty g ive it to you. so 

I hesi tat e to do that.

Mr. O bey. I un derst and tha t.

Mr. H abib. We had a perio d when people would make prom ises 

ra th er easily about these kin ds of circumstances. I am very cautiou s 

and v ery care ful not to do th at with you.

Mr. Obey. Tn liglit of the past histor y of thi s whole problem , I wish 

I could say th at tha t assura nce is enough f or m e. But it isn ’t.

Mr. H abib. I realize th at.

CAMBODIA AND UNIT ED STATES NA TIO NA L INTE RE ST

Mr. Obey. T think the re is a very good reason why the American 

public has lost its ability to d iffe ren tiate. I think it’s because their po licymakers have lost an ab ili ty to differentiate.

Fo r the life of me I do not see why Cambodia is conside red central 

to o ur own national intere sts. T don’t even see where othe r cou ntries in 

th at are a see our involvement in th at area as cen tral to th eir own 

natio nal inte rest.

Mr. H abib. When you pu t the matter in absolute terms , cen tral to 

ou r inter est, quite o bviously I hav e no response for it. Obviously, Cambod ia in and of itself is not central to our natio nal intere st. Ou r na ­

tional intere st is construc ted of a whole series of elem ents, whether 

it ’s Cambodia, wh eth er it ’s V iet nam, wh eth er i t’s NAT O, whether it ’s 

our policy in the Mid dle Eas t. Cambodia, among the influences bearing up on American policy to da y, is not the central issue.

Bu t in looking u pon our responsi bilitie s with respec t to Cambodia, 

the com mitments we h ave made, the o bligations we ha ve assumed, the 

conditio ns which we hav e set fo rth fo r the Camb odians in respect to 

our readin ess to assist the m, whe n I look at the whole complex of it. 

T can see w here Camb odia fits as one piece in the complex o f Am eric an 

forei gn policy interests. But to a rgu e th at it ’s c entral to t he interests, 

1 would n eve r arg ue th at in fr on t o f this committee.

Mr. Obey. I can see where ev ery co untry on th at m ap fits somewhere.

Mr. H abib. That is correct.

Mr. Obey. Because we h ap pe n to be a piece of the same geo graphy .
87

WORLD INT ERDEPEND ENCE

Mr. Habib. T hat is correct. The interdependence of the world at the 

moment and the relationship of the United States per se, the role the 

United States has played in the world, the role the United States has 

played in its attempt to bring about some kind of stability and rational 

peace and equilibrium in this area as well as elsewhere is well known 

to you. W hat I am asking you to do is not abandon a piece of it. I am 

not. asking you to change your concept of the whole policy.

Mr. Obey. All I am suggesting is that the pieces that you are insistent on hanging on to are making it more difficult for us to have an 

effect in other places which are of greater interest to us.

Mr. H abib. And I am saying to you tha t if you let the pieces go it 

will have an effect in the other areas which are of interest to us, of 

possibly greater interest to us, also.

Mr. Obey. The logic of that is simply tha t we have to continue the 

same old involvement everywhere, without discrimination.

Mr. Habib. It's not the same old policy, Mr. Congressman. T think 

the idea that what we are pursuing in Cambodia is the same old 

policy is not accurate.

WITNESS COMMENDED

Mr. Obey. Mr. Secretary, can I just ask you one question. Are you 

a lawyer?

Mr. Habib. No, sir. T never took a law course in my life. I am not 

a political scientist either. T never took a course in political science.

Mr. Obey. I am nor a lawyer either, but let me suggest you probably ought to be one because you make the best defense of a bad case 

I have seen in a long time.

Mr. Habib. Thank von. T take that as a high compliment.

Mr. P assman. Mr. Coughlin ?

TOTAL COST OF AID TO CAMBODIA

Mr. Coughlin. So T am sure T have the figure straight, the total 

aid to Cambodia for the year was $762 million. Is tha t everything, 

lock, stock, and barrel, all the faucets, as the chairman would say?

General F istt. Th at’s roughly what we added up to.

Mr. Habib. That is on the assumption that we get what has been 

asked for from the Congress in the current request.

Mr. Coughlin. That is everything?

Mr. Habib. As best as can be told. You had better hedge, yes, sir.

General Fisti. We will check for the record.

Mr. Habib. To our full knowledge, ves, sir.

Mr Coughlin. That amounts to about $100 for every man. woman, 

and child in Cambodia.

Mr. ITabib. War is one expensive business, as we have learned. As 

the chairman himself stated earlier, it’s something like $150 billion 

in Tndochina since World Wa r IT. .

Mr. Coughltn. Don't they earn only about $90 per capita?

Mr. H abib. As somebody once suggested, if we took the budget and 

divided it up to so many dollars per person, you could give every man. 

woman and child a* thousand dollars, which is more than they have
88

seen in their lives. It 's the trag ed y of the situatio n, bu t tha t doesn't 

change the natur e of the sit ua tio n. You are rig ht.

Mr. 1 ’assmax. Would the gentlem an y ield i

Mr. C oughlin. Yes. sir.

Mr. P assman. You had be tte r check your respo nse to these q uestions 

befo re you make it a positive s tatem ent, because you do have a p ipeline 

in th e a id prog ram and tha t will have to be adde d to th is total. You h ad 

be tte r hav e a look at the ot he r spigots because you do have oth er 

pro gra ms.

Mr. H abib. T hat is why I hed ged a bit. Tha nk you. Xo one knows 

bow t o add bette r tha n you do. 1 know that.

Mr. P assman. I do know you have a p ipeline an d yo u w ant to make it 

all inclusive. Is that fai r en oug h ?

Mr. H abib. We will check the figures because as I sai d, T am not 

tryin g to dodge. T am just tr yin g to make sure we do n't mislead.

Mr. Coughlin. It has been sta ted in the testim ony here th at every 

sing le penn y of the $762 millio n was vital to Camb odia's survival, so 

we are talking abou t an all-o r-n oth ing pro position . $762 million or 

no thi ng.

Mr. H abib. Xo. Par t of the amo unt th at is included in th at $762 

million has already been ap pr op riated by the Con gress—pardon me— 

has alre ady been a uth orized . Some o f it has not yet been ap prop ria ted. 

Some o f it has been ap pr op ria ted.

Mr. Conte. On the con tin uing resolution.

Mr. H abib. Yes. Some of it has been ap prop riated and some of it 

has not been.

Mr. Coughlin. I t’s eith er $762 million or n othing in ter ms of Cambodia 's survival. Th at is t he decision th at we are faced with ?

Mr. H abib. I would pu t it in anoth er way. I wou ld say th at the 

marg inal amount is the supp lem en tar y amo unt. Th e supplem entary 

amoun t is necessary given th e presen t level of expenditures .

Mr. P assman. Will my collea gue yiel d a gain ?

C O N T IN U IN G RE SO LU TI ON

For the benefit of the new mem bers, under the c on tin uin g resolutio n 

actua lly you have obligated or can obligate up to tw o-third s of the 

funds fo r the y ear or 8 m onths. So when we mark th is bill up subsequently, we would be really conside rin g only 4 mo nth s out of 12, 

because we have given the m the au thor ity to obligate funds for 8 

mon ths.

COST TO TA XP AY ER

Mr. Coug iilin. I un de rstand th at . Mr. Ch airma n.

W ha t I am tryi ng to get at is what is it going to cost the Am erican 

taxp ay er fo r the year to su pp or t Cam bodia.

Mr. H abib. Yes.

Mr. Coug hlin. Th e to tal figure.

Mr. II abib. W e will check the figure and see th at the acc ura te figure 

is in the rec ord. **

Mr. Coughlin. M r. Ch airm an , it's late . Tha t's all I hav e.

Air. P assman. Tha nk you very much.

Mr. Koch ?

Mr. K och. Xo questions.

Mr. P assman. Mr. E ar ly ?
89

AM OU NT ORIGIN ALL Y REQUESTED

Mr. E arly. Mr. Secretary, your original authorization was for $275 

million. You are now asking this committee to increase that 80 percent, 

another $222 million.

Mr. Habib. No, sir. I think you would have to go back to the original 

request, if you want to go to what the administration proposed. I think I would ask Mr. von Marbod or General Fish to give you that.

General Fish. $390 million was the original request.

Mr. E arly. You are getting conservative. You are asking this committee to increase your original request over 30 percent.

Mr. Habib. By virtue of both the increased level of consumption 

and the increased costs, yes, sir.

Mr. Early. And you say it's not a bottomless pit. Let me ask a 

question of General Fish.

REV IEW OF COST FIGURES

General, you are requesting that this committee allow Cambodia to increase their militarv force or their military use of ammunition almost 50 percent over what they have used during the first 7 months. 

Is tha t true?

General Fish. Let me see. I will check that figure for you. We are asking for $171.3 million for ammunition, and our initial request to 

Congress was $299 million for ammunition.

Mr. E arly. Using that sheet, the second column, based on the cur­ rent ceiling, $256 million which the other chart shows you have spent, you show that von used $163 million worth of ammunition through 

7 months. Is tha t correct ?

General Fish. Yes, sir.

Mr. E arly. Taking the difference in column 5 of $344 million, you are asking us to use $181 million for the remaining 5 months for 

ammunition.

General F ish. I think that I should put those figures in perspective, 

Mr. Congressman. The point here is tha t we are now in the dry season. The offense started the 1st of January. It's just as with all statistics, von have to seasonally adjust them. And the straight line 

rate would mislead anybody who would read the record. Additionally we have called down some of the supplies that were in-country, and we won't in this proposal propose that they run com- petelv dry at the end of the fiscal year. There will have to be a stock to carry on into the next fiscal year, and it's at the modest level that has been maintained in the past. You can't do the straight-line 

calculation.

Mr. Early. Using your figures, these balances, what you have 

actually spent to date, with your remaining authority, the delivery in the pipeline and the in-country stock, you said roughly we had GO 

da vs?

General Fish. Yes. sir.

Mr. E arly. Using tha t, that would get ns through to February 2 

or to the beginning of February. You are still tellin g us that you are going to escalate the amount of ammunition that you are going to use 

over the next 5 months over the previous 7 months.
90

General Fish. You are reading that $171 million as ammunition 

we are going to use.

Mr. E arly. I am not using the $171 million, sir. I am using column 

5, which would be the aggregate of your already appropriated $275 

million plus your request of $222 million, or $497 million, and you are 

asking for $344 million for ammunition in that column.

General F isii. That is correct, sir.

Mr. Early. That is over column 2, $163 million, that is an $181 

million increase?

General Fish. Yes, sir.

Mr. Early. Therefore you are saying that over the first 7 months 

you have been spending at a rate of $37 million. You are now asking 

us to go to a rate of almost $49 million. You are escalating the amount 

of ammunition you want to use.

General Fisii. No, that is the amount we are going to buy but not 

necessarily use.

Mr. Nelson. There are two factors here. I am Frank Nelson, on the 

general's staff here.

First of all, there is a big change in the cycle between the wet and 

the dry season. We are going to use more ammunition even with conservation.

Second----

WET AND DRY SEASONS

Mr. Early. Would you explain the wet and dry season ?

Mr. Nelson. All right, sir. I would rather tur n to General Cleland, 

who spent 2 years over there.

Mr. Habib. This is fairly simple. The current campaign started on 

the 1st of January.

Mr. Early. Ts that the wet season ?

Mr. Habib. Tt happens to be the middle of the dry season. The drv 

season in Cambodia begins about the end of November and goes until 

about the month of May. The current campaign began the 1st of Ja nuary. That is not to say there was not fighting going on between Ju ly 

1 and Ja nua ry 1.

There was, but it was at a somewhat, a substantially, lower level 

than the level that has been going on since the offensive began, and 

it's a substantially lower level than what is anticipated between now 

and the rest of the dry season, because there is every indication that 

the Khmer Communists intend to maintain the level of activity at 

this high level, or even increase it.

question of escalation

Mr. E arly. Mr. Secretary, you are asking this Congress to approve 

$497 million for military aid to Cambodia for 1975.

Mr. Habib. That's correct.

FIS CA L YEAR 19 76 ESTI3LATES

Mr. E arly. You remarked to Congressman Obey tha t the President has requested $425 million for fiscal 1976. Is this indicative of 

de-escalation ?
91

Mr. Habib. The request for 1976 is based upon a certain assumption 

of requirements for a given level of activity in 1976. You make these 

estimates as best you can.

Mr. Early. I didn’t follow that at all.

Air. H abib. The request for fiscal year 1976 is made on the basis of 

the best assumptions tha t you can as to what will be required and the 

price levels.

Mr. Early. You were pretty specific in your comments that we would 

lose entirely if you d idn’t get the $222 million. You are very general 

when we speak of the $425 million for fiscal year 1976.

Mr. H abib. T ha t’s correct. If you can get the $222 million through 

and end up this fiscal year with the kind of position tha t that would 

produce, the request for next year is at the level of $425 million.

Mr. Early. So President Ford is de-escalating?

Mr. Habib. He is reducing the amount that is being requested of 

the Congress in the next fiscal year as compared to the total amount 

requested for this fiscal year, that is correct.

Mr. Early. Mr. Secretary, is your department supporting tha t ?

Mr. Habib. Yes, sir.

Mr. E arly. You are asking us to increase with the suggestion that, 

we are going to decrease for fiscal year 1976 ?

Mr. II abib. Tha t is the arithmetic of the request; yes, sir.

Mr. Early. I t’s strange arithmetic.

Mr. Conte. Will the gentleman yield there?

Mr. Early. Yes, Air. Conte.

cost increase

Mr. Conte. In fiscal year 1975 you asked fo r $362.5 million for the 

military and now you are bumping that up to $497 million ?

General Fish. No, sir. We asked for, in effect, $390 million. When we 

give the country amount, this does not include the charges for packaging, crating, handling, and transportation, which are carried in a 

worldwide account. Bu t we do allocate to the country program the 

value of such services as actually spent for the country d uring the fiscal year; so in the total there is an additional amount for supply 

operations, as we call it. F or Cambodia, the request is on two lines, the 

country line and the supply operations line, and tha t totals $390 

million.

Air. Conte. Take $390 million. You are still asking for $497 million?

Air. Habib. Y'es. sir. That was addressed earlier.

Air. Conte. $100 million more than you originally came up here for?

General Fish. That's correct, a higher level.

Air. Habib. An increase in cost.

Air. Conte. Air. Ea rly asked about the 1976 amount. That could 

bump up to-----

best estimate of requirements

Air. TTabtb. You are presupposing there will be a requirement for 

a supplemental in 1976.1 think nobody can operate on that assumption. 

If we had thought there was going to be a requirement for a higher 

amount in 1976, the presumption would be the people who work up 

these figures would have included it in the 1976 request. I don’t think 

it's strange arithmetic a t all. Air. Early. T think what it amounts to is
92

the best estimate as to what is required to main tai n a ce rta in level of 

supply.

Mr. E arly. Mr. Secre tar y, what we are talk in g abo ut, not assu min g 

a supplem ent from $425 millio n to reach $497 millio n, if we app rov e 

this figure, but what Mr. Obey was talk ing abo ut, th at sooner or later 

we have go t to tell the public the trut h. By this assum ption you are 

going to request $497 million fo r C ambodia in the bu dg et t hat was su bmitted at 12 o'clock tod ay by the Pre sid ent, which says with inflation 

and all we are only going to spe nd $425 m illion fo r fiscal 1976.

Mr. H abib. Tha t is n ot wh at he said in my un de rst an ding of what 

he is doing. H e is request ing th e Congress to ap pr op riate $425 million .

TRU TH

Air. E arly. He is te lling the Congress th at be doe sn't need as much 

money as he h ad in his $497 m illion request. Can you say we are tellin g 

the public the tr uth ?

Mr. Habib. T certain ly believe the President would not intentionally 

mislead the public on any item s of this sort. Ne ith er would anybody 

who works up the figures. T could assume a sit ua tio n if you want in 

which we would n't need more th an $100 or $200 millio n of th at and 

von would n't need th e $25 million eith er.

At r. E arly. W ou ldn 't you call that lyi ng to the public?

Mr. H abib. No, 1 would no t. I said I could assum e b ut I d on't.

Mr. E arly. B ut if you did ?

Mr. H abib. But I do n’t assume t hat level.

Mr. E arly. If you did assume th at , would that be lying to the 

pub lic ?

Mr. ITabib. Sir, let me ius t give you an exam ple. I don't consider 

anv of it lying to the public. Let me just give you an example which 

T thin k illustra tes the whole thing.

Air. E arly. Before you get away from th at. Air. Se cre tar y, you have 

to tell me about th at assum ption. You said th at if you assum ed you 

told the public von onlv needed $100 m illion in the bu dg et which was

Air. E arly. W ou ldn ’t you call th at lying to the public?

FIG URES AR E BE ST PO SS IB LE

Air. H abib. Alav I give you the example th at T want to and you 

will see exactly wha t I mean. When we came u p for 1975, the estim ate 

of wh at was requ ired fo r Ea os was $100 m illion. Tha t was before the 

cease-fire and before we kne w what the level of req uir em ents was 

rea lly goi ng to be. The Congress has imposed a cedin g of $30 million 

af te r the cease-fire, and we do no t intend to ask for, an d we do not 

need, a supplemental fo r Lao s.

The reason I cite th at exam ple is if all depend s upo n the level of 

conflict. I t all dep end s on the level of utilizatio n of the resources. 

W ha t the administ ratio n ha s to do when if pre sen ts its bud get fo r 

1976 is to give you the best possible figures it can as to w ha t it think s 

is necessary to be ap pr op riated fo r the fiscal year which has not yet 

begun.

Air. E arly. You are sayin g t hat in the fiscal sense th e Presiden t says 

we are going to reduce aid by $70 m illion in Cam bod ia?
93

Mr. H abib. The net result of all the calculations that went into that was that we should ask the Congress for $425 million to cover the requirements for Cambodia in fiscal year 1976; yes, sir.

Mr. E arly. Which is a $70 million reduction?

Mr. Habib. The arithmetic is precisely correct. Th at’s correct.

REDUCED FISC AL YEAR 1976 RE QU IREM EN T

Mr. E arly. You think you need $497 million in 1975, but you only 

think you need $425 million in 1976 ?

Mr. H abib. Let me go at it this way, if I could, if it explains it any better. I thought th at today we tried to point out the requirements and the manner in which the supplemental that we are considering will be used. When the hearing comes up for the use of the funds for fiscal year 1976, the presumption will be that those responsible must justify the entire amount. Wh at you are saying to me is how do you know 

what we are going to use ?

CREDIBILITY

Air. Early. We have to establish credibility with the people.

Air. Habib. The credibility can only be established if we are con­ sistent in our calculations, and the calculations must be based upon the best possible judgment of what is going to be needed. It ’s easier to judge what is going to be needed over the next 4 or 5 months than it is to judge what is going to be needed over the next 16 months. I might 

point that out to you also.

SOURCE OF INFO RM AT ION

Air. Early. General Fish, you said in your opening statement that you recognize an improvement in the Cambodian Army. You say t ha t you see improvements in getting the ammunition to our ally. Wh at are your sources for tha t? From everything I have read through the two statements and in last year’s hearings where they said we had no worry about Phnom Penh, we had no worry of losing the war; there are inconsistencies. The information then was inaccurate. What is your 

source ? We have no advisers over the re; is that true ?

General Fish. Th at’s correct.

Air. Early. Can you tell this committee how you can substantiate the increased efficiency of the Cambodian Army, how you recognize that there is not a misuse of ammunition, as was suggested in the hearings of last year ?

General Fish. We do have an attache’s office there. They do make reports. They are on the scene. They are not advisers. But as attache offices all over the world do, they a ttempt to keep us advised on what 

is occurring in the area.

Air. Early. Wh at is the number of personnel in th at office?

General Fish. About 25.

Air. Early. Are they restricted to the Embassy or do they have a 

free wheel anywhere they go ?

General F ish. I don't know what you mean by “free wheel.” They 

are not restricted to the Embassy.

Air. E arly. But is this the same Embassy that states that the p han ­

tom army isn’t there any more ?

47-29 9— 7! •7
94

Ge neral Fis h. I don ’t believe th e Em bas sy researche d th at . Th e IG 

of the St ate De partm ent, Mr. Constan te, was the in dividu al who reE

orted it in detail, an d also ha s fu rthe r reco mmended to the Camodian Govern me nt c orrective mea sure s. Th ose measures have been pu t 

into effect an d the judg men t now is th at the y hav e been effective in 

red ucing the degree o f ph an tom s on the rolls.

Mr. P assman. Tha nk you ve ry much, Air. Ear ly . I wan t to commen d th e new mem bers o f th is subcomm ittee f or making a very grea t 

contrib ution to the hea rings.

AN NU AL BUDGET REQUEST

Th is is a c omplic ated bill. Th e bu dget request th at reache s the Congress us ua lly in Ja nuar y of eac h year is only an est imate, and in 

thou sand s of cases, even in ou r dom estic prog ram s the y have to come 

back fo r a sup ple me nta l ap pr op riat io n, m any time s 20, 30, or 40 p er ­

cen t over the ori gin al estimates, so this is par fo r the course. You 

adv anc e yo ur best estima tes. I f it’s insufficient and c ha ng ing conditions 

war ra nt ma kin g a supp lem en tar y request, you mak e th at request bu t 

you leave it up to the C ong ress t o determ ine wh eth er or n ot y ou made 

a good case. Is th at correct ?

Air. H abib. That has been our pra ctice, Air. Chairm an.

CON CLU DIN G REM ARKS

Air. P assman. As th is gr an d old gen tlem an. Dr . Han na h, used to 

say: “M r. Ch airma n, vou are wa sting time. Th ere is an askin g pric e 

an d a t ak in g price. W ha t we a re sub mitting toda y is t he askin g price.

We will get aro und to the t ak in g price subsequen tly.”

Oh. how many times I have re pe ate d th at for the record.

Air. Cont e. It ’s illu str ative an d ins tru ctive, Air. C hairm an.

Air. P assman. Oh. yes.

In th is en tir e aid prog ram it ha s alw ays been an ill us trativ e pro ­

gram based on th eir best judg me nt. You hav e th e ri ght to tran sf er 

in a nd ou t of the AI D pro gram as such.

I know th at the mem bers of th is subcom mittee are go ing to weig h 

very ca refully the testim ony y ou have presented to this committee. As 

I s aid e arlie r, I am only one me mb er of t his subcommittee. I have my 

ideas and these people hav e theirs. As is often said when two men 

are in busines s and the y alw ays get alon g, one is oft en unnecessary.

AVe need to hav e thes e different opinions bu t we are go ing to be as 

considerate as we can be. *

I might say for the com mittee there is a possibility th at Secre tary 

Ki ssing er w ill ap pe ar be fore th e committee. I do n’t h esi tat e to say for 

th e record, ha ving a few lea ders dow n at the W hite House won ’t get 

you very mu ch money. And I m ig ht sav they are very fine leaders. *

He re is where you had better m ake y ou r case, a nd o f co urse th e Sen ate 

side, too, i f you will p ardo n me f or saying tha t.

Air. H abib. We will re po rt your view to him. Air. C hairm an.

Air. P assman. I am no t go ing to comm it suic ide i f he doesn’t come, 

bu t he is being invited anyw ay. Thi s concludes the he arings on the 

bu dg et amend me nt for Camb odia. You hav e been fo rt hri ght an d you 

have answered these questions.
95

Mr. Habib. We thank you for your courtesy, Mr. Chairman, and for 

your very interesting discussion with the members of the committee. 

We are ready to come back at any time on any subject you wish.

Mr. Passman. If Mr. Kissinger can add anything to what has been 

said today he had better say it. T hat concludes these hearings.

Statements of Members of Congress

We will now receive statements from Members of Congress on the 

Cambodia aid request.

If you don’t mind we will follow the seniority system. I believe 

tha t would put Mr. Leggett first, then Mr. Ottinger, and then Mr. 

Motfett.

Without objection, I should like to insert in the record a statement 

by Congresswoman Abzug of New Nork.

[The statement follows:]

Statement of Hon. Bella S. Abzug

Mr. Chair man, I am gra tef ul for this opp ortu nity to comment on the administratio n’s request for $222 millio n in supp lementa l mi lita ry aid to Cambodia. 

This request, in my opinion, ignores the sta ted will of Congress and of the 

American people. I hope th at the Congress will sta nd firm in opposing it, as 

well as the req uest for $300 million more for South Vietnam.

The United States has alread y spen t $150 billion on the wars in Indo chin a—• 

dol lars th at migh t have helped to stave off the recession at home. For fiscal 

year 1975, the app rop riation for Cambodia alone was $275 million, af te r the 

conference committ ee gra nte d $75 million in draw down aut hor ity which the 

House had not auth orized. Now th at money, which was to last until June , is 

alm ost gone, and the adm ini str ati on is back asking for more. Thi s new request 

would bring our mi litary aid alone to $497 million for Cambodia.

Ju st before recess, the Congress auth oriz ed a ceiling of $200 million on militar y aid to Cambodia, plus an oth er $177 millio n in economic aid. Now th e President asks th at th at ceilin g be lifted so th at commodities may be supplie d under 

the food for peace program. In the las t few yea rs the Congress has studied th at 

program thoroughly and lea rne d how such money is converted into local currencies and pu t to milita ry use also. And by various stra tegems the admi nis tra ­

tion is able to get aro und the se amounts. Congress was told of food for peace 

allocati ons of $30 million fo r Cambodia in fiscal year 1974, but the ad mi nis tra ­

tion actuall y sent $192.2 million. I hope the re will be no lift ing of the congression al ceiling until we hav e found a mechanism th at per mit s food to go dire ctly 

to the needy refugees instea d of to the rul er and his gene rals.

About 85 perce nt of our mi litary aid to Cambodia goes to supply ammunition. 

Many eye witne sses have reporte d in our ma jor pap ers th at this amm unition 

is used wastefully—a t the ra te of 600 tons a day. Apparen tly the Cambodians 

pr efer shooting at rand om ra th er tha n engaging their troops. I suggest th at 

thi s may be due to a reluctanc e to kill fellow Cambodians. In a recen t press 

repo rt, an American officer complained th at the soldie rs pref erre d to shoot into 

a fish pond. On Ja nu ar y 24, the Wash ington Pos t repo rted th at barges car ryi ng 

amm unition to Phnom Penh were stopped pa rtly because their crews refused 

to go. It seems obvious th at the re is no gre at enth usia sm for the war among th e 

citize ns.

There is also no int erna tio na l agreement atte mp ting to divide Cambodia. Le ft 

to themselves, the ins urg ent s and the Lon Nol regime will be forced to nego tiate. 

The people can only benefit—some 300 Cambodians are being killed or wound ed 

every single day. Thi s is an increase of cas ualties since the congressionally 

imposed bombing cutoff of August 1973—and it is being carried on with our 

tax dollars. Pre side nt Ford has said th at America's objective is “a negotia ted 

peace ” b ut Lon Nol will nev er negot iate as long as American money keeps flowing into his coffers.

Th at money amou nts, incid entally, to about $1.6 million per day. What could 

we do with that money in the United Sta tes ? Why are we using it to kill Cambod ians? And why are we getting more deeply involved every day in this new* 

secret war in Camb odia?
I am de ep ly concern ed by th e re p o rt s of ou r in cr ea si ng par ti cip ati on, an d by 

th e risk s it pos es, in vi ol atio n of th e co ng ress iona l ba n again st m il it ary inv olve ­

men t in In do ch in a. To a t le as t six ap pro pri ati on bills th e Con gress has at ta ched 

a pr ov ision which st at es in ess en ce th a t “* * * no fu nd s her et ofo re or here aft er 

appro pri ate d m ay be ob liga ted or ex pe nd ed to fin ance th e invo lv em en t of U.S. 

m il it ary fo rc es in hos tilities in or ov er or from off th e sh or es of N or th Viet na m, 

S outh Vietn am , La os, or Ca mbo dia, un le ss specifically auth ori ze d h ere aft er by 

th e C on gress.” Yet fo r m an y mon ths, Amer ican pil ots in American pl an es ha ve be en fu rn is hin g re co nn ai ss an ce in fo rm at io n to th e Lo n Nol go ve rnmen t. Th e ad m in is tr ati on 

cl ai m s th a t th is is no t a viol atio n of th e law be cause it does no t co nst it ute dir ec t 

m il it ary in vo lv em en t.

We also tr a in Ca mbo dian pi lo ts a t Udo rn A ir Ras e in T hai la nd : an d from 

T hai la nd. U.S. C-1 30 Her cu les tr an sp o rt s, pilo ted by civi lian s, ha ve bee n flying 

ab out 10 fli gh ts a da y into Phn om P en h an d ai rd ro pp in g su pp lie s to Nea k Luong. 

Acc ording to th e New York Ti mes , Ja n u a ry 16, a so-call ed civi l contr ac to r in 

T hail and w as giv en seve ral A ir Forc e pl an es w ith th e in sign ia pain te d ou t. Th e 

pilo ts, so-call ed civi lia ns , are m os tly “re tu rn ed” U.S. A ir Fo rc e officers.

W or st o f all, ou r m ilitar y ad vis ers are direc ting th e w ar , under th e di re ctio n 

of th e U.S . Amba ssad or, ac co rd in g to a re po rt of th e Hou se For ei gn Affa irs 

Co mmitt ee . In th e W as hi ng to n Pos t, Ju n e 6, 1974, Phi llip A. McCombs st ate s th a t 

A m ba ss ad or Jo hn De an is “even ord er in g specific big m il it ary op er at io ns.”

Thi s is ob viou sly a da ng er ou s ga m e which is be ing pl ay ed w ithout th e kn ow led ge or co ns en t of th e American pe op le. Rec en tly a U.S. cr ew m an in a civi lia n 

air li n er ca rr yin g Gov ernm en t re in fo rc em en ts w as wou nd ed . If American liv es 

are lost, th e adm in is trat io n m ig ht well pr ov id e ar m ed es co rts fo r th eir tr an spo rts. th en “p ro te ct iv e” st ri kes on an ti -a ir cra ft po sitio ns . Th e next step could 

be em erge nc y tro op la nd in gs or bomb ing s. Sec re ta ry Sc hl es in ge r st ate d on 

Jan u ary 14 th a t “C ong res s * * * m ig ht well au th ori ze th e us e of Amer ican force,” 

in In do ch in a. I believe th e Sec re ta ry is m is ta ke n in hi s as se ss m en t of th e Con ­

gr es s an d th e public. I do no t be lie ve that, we will ev er ag ai n fa ll in to th e tr ap 

of be lie ving th a t en dless fu nds an d en dl es s ki llin g will solve an yt hi ng in 

In do ch in a.

And w hat American in te re st co uld po ss ibly be serv ed by co nt in uin g th is risk ?

Aro un d th e wo rld , th e U ni te d S ta te s is now st ri vin g fo r dete nte w ith Com ­

m unis t co un tr ie s— ye t th es e few mill io n Asia ns in In do ch in a re m ain, su pposedly. our enem ies . Why are w e so fie rcely in te nt upon ki llin g them , while m ak ­

in g fr ie nds w ith Ch ina an d R uss ia and ev er y oth er Com m un ist co untr y ex ce pt 

Cub a? It is. we are tol d, a “com m itm en t.” In fa ct , it is a co m m itm en t fr om one gover nm en t gr ou p to an ot he r, no t fr om peop le to peo ple. Amer ican s were ne ve r 

as ke d w het her th ey w an ted to m ak e su ch a co mmitm en t. Th ey ve he men tly ex ­

pr es se d th e ir revu lsion to th e se cre t bo mb ing of Ca mbo dia in 1972. wh en they 

fin all y le ar ned of it. And w hat A m er ic an har bor s h ate fo r an y Cam bo dian ?

Ye t, Amer ican s are be ing as ke d to sa crifi ce to ke ep th is w ar going . Mr. Fo rd 

lia s ac tu ally aske d fo r a cu t of $123 mill ion in ca nc er re se ar ch , an d a $445.4- 

mill ion cut fo r he al th re se ar ch and service s. W hile un em pl oy men t lin es grow 

long er, w hi le our olde r ci tize ns an d our po or st ru gg le ju st to ke ep ali ve , we are 

as ke d to sen d $222 m illion m ore to L on Nol f or a mm un iti on . W hy ?

To do les s, we ar e tol d, wou ld dest ro y our “c re di bi lity .” O th er co un trie s wo uld 

no t be lie ve th a t Am erican pr ot ec tion ca n be re lie d up on . Perh aps it is tim e th a t 

thos e na m el es s “o th er c ount ri es ”— m os tly dic ta to rs w ith c orr upt regi mes —s ta rt ed 

re ly in g on them se lves in st ea d of on A m er ic an p ro tectio n.

The re is a pr in cipl e whic h sh ou ld ap ply to all American a id : Do es th e co un try 

in qu es tion pra ct ic e som e fo rm of de m oc ra tic go ve rn m en t? Or. is it re pr es sing 

it s citize ns ? Does it serve th e re al in te re st of th e Amer ican peop le— no t th e 

m ult in ati onal co rp or atio ns —to give aid ? U nd er t he se co nd iti on s th e Lo n Nol gov ­

er nm en t wou ld n ot q ua lif y.

In ad dit io n to opposin g th is su pp le m en ta l re qu es t, I am suffi cien tly co nc erne d 

ab ou t th e si tu ati on in In do ch in a th a t, w ith 27 cospon sors. I ha ve in trod uc ed a 

re so lu tion of inqu iry. Hou se Res ol ut io n 1229, dir ec ting th e S ecr et ar y of Defen se 

to su pp ly fu rt h e r in fo rm at io n on th e exte nt of o ur invo lvem en t th er e. I ha ve also 

in tr od uce d in th e 94th Co ng ress H .R . 16S. wh ich ca lls fo r to ta l te rm in at io n of 

fu nd in g or m ilitar y inv olve men t o f an y kin d in In do ch in a.
97

I be lie ve th a t th ere will be no pe ac e in th is p a rt of th e w or ld —an d no ea se 

fo r th e co nscie nc e of Amer ican s— u n ti l we ha ve en de d th es e us eles s, da ng er ou s 

ex pl oi ts o nce a nd for all.

Mr. P assman. Mr. Leggett, we will be very happy to hear from you 

at this time.

Statement of Hon. Robert L. Leggett, a Representative in Congress

F rom tiie Stateof California

Mr. Leggett. Thank you very much, Mr. Chairman.

I have a prepared statement. I ask that the statement with the enclosures be inserted in the record at this point.

Mr. P assman. With out objection, it will be inserted in the record 

at this point.

[The statement follows:]

Sta teme nt of I Ion. R obert L. Leggett

Mr. C ha irm an , T de ep ly appre cia te th e op po rtunity to appear be fo re you r 

su bc om m itte e to da y on tWe su bje ct of in cr ea se d m il it ary ai d to Ca mb od ia.

I am opposed to se nd in g on e mor e U.S. dollar fo r w ar in In do ch in a in th is 

fiscal ye ar . We ha ve al re ady m ad e our det er m in at io ns in Con gress as to w hat 

we th ought ou gh t to be sp en t fo r th es e pu rp o ses; in th e ca se of Ca mb od ia, th e 

$275 mill ion ce iling is less th an 1 mo nth old , and I pe rs onal ly feel th a t it is 

ex trem el y pr es um pt io us of th e adm in is tr ati on to ke ep us under a co nt in ue d 

bo m ba rd m en t of such re ques ts as th ey ha ve sin ce th e ce asefire .

H av in g told yo u th a t I am op po sed to ap pr ov in g th is re qu es t, le t me give yo u 

my reas on s. By co nt in ui ng to sh ow er mon ey on th e w ar m akin g m ac hi ne s we ha ve cre at ed 

in In do ch in a, we en co ur ag e a pro fl ia te styl e of w arf are th a t is ex pe ns ive, but 

no t ve ry eff ective. Acc ording to th e Cam bo dian m ilitar y, co ns um ptio n ol' am ­

m un itio n is even hi gh er now th a n it was a t th e hei ght of la st year's dry season 

de sp ite supp os ed au st eri ty m ea su re s. Pic tu re s re tu rn ed to us by ne ws me n show 

Cam bo di an so ld iers ad van ci ng th ro ugh em pty fields em pt yi ng clip aft e r cli p o f 

M-16 am m un itio n ah ea d of th em , an d be ing co ve red by in ce ss an t art il le ry and 

ta nk fire. Thi s blind fire is nec es sa ry be ca us e th e K hm er Ro ug e do n’t giv e aw ay 

th eir po sition s by un ne ce ss ar y fir ing, an d Ca mbo dian so ld ie rs appar en tly wou ld 

ra th e r sh oo t a t no th in g th an look fo r so m ethi ng to sh oo t at . C ontr ast th a t w ith 

th e ex pe rien ce of ou r ow n Am er ic an Rev olution, whe re th e pr ou d bo as t of 

th e C on tine nt al so ld ier w as “o ne shot, one m an .” If it is tr u e th a t ne ce ss ity is 

th e m oth er of in ve nt ion, th en I belie ve it is tim e we sta rt e d ex po rtin g a lo t 

m or e in ve nt iv en es s and a lo t fe w er do lla rs. If th e Cam bo di an s fee l they hav e 

so m et hi ng w or th figh tin g fo r, th ey wi ll find a way to fig ht i t ; if th ey don 't, 

th ey won ’t.

Ther e is also th e qu es tion of whe re th is ne ve r-en di ng flow of do llar s co mes 

from . The Pre si dent's re qu es t, he te lls us, is vit al to “t he su rv iv al of th e K hm er 

Rep ub lic .” Yet one da y a fte r he su bm itted th is re que st fo r $222 mi llion , he 

su bm itte d a li st of prop os ed re sc ission s an d d efe rr als fo r ag ri cu lt u ra l pro gra m s 

to ta li ng ov er $265 mill ion. A li st in g of th es e prop os ed do mes tic cu ts in clu d e:

i f W inns

A gricu ltura l Ext en si on Ser vi ce _________________________________________ $3. 2

R EA P ________________________________________________________________ 156

W ate r ba nk pro gra m _________________________________________________ 22. 4

F ore st ry ince nt ives p ro gra m ___________________________________________ 25

F a rm e r’s home ad m in is tr ati o n _________________________________________ 7. 25 AS CS ________________________________________________________________ 2 2 .9

A gr ic ultura l m ar ket in g se rv ic e_______________________________________ 2. O

F o re st se rv ic e________________________________________________________ 26. 3

T o t a l ---------------------------------------------------------------------------------------- 265. 0 5
98

In effect, then, we are being told that Cambodia has a greater claim on $222 

millio n tha n American agr iculture. I do not agree with this assessment of national priorities, I do not believe the House will agree with thi s assessment, 

and I hope that this committee will speak for us by not recommending passage 

of this proposal.

Ju st bow imp ortant is this aid to Cambodia? The Pre sident's message says 

th at it is vital that we make this money available immediately; yet in this 

same request he assu res us th at the proposal “will not increase 1975 outlays”, 

so the money is not needed for at lea st 5 months. General Sosthene Fernandez, 

comm ander in chief of the Cambodia Armed Forces, has said that Cambodia 

could probably survive if we did not app ropriate one more dime. Thus, it appea rs th at the only urgency here is to involve the 94th Congress in Indochina 

the same way the 93d, 92d, 91st, and other Congresses were involved. It has 

been said of the elephant th at it never forgets anythin g and i t never learns anything. While that is app arently tru e of this Republican adm inistration. I hope 

th at the Democratic Congress will show itse lf to be sm arter tha n that.

The Preside nt has said th at these dollars represe nt “minim al resources” to 

Camb odi a; yet by every acco unt the Cambodian Army is better equipped tha n 

their opponents. He speaks of “adequate assistance” to Cambodia, but no ceiling is in sight. Las t Thursday, Lieuten ant General Graham, in testim ony before the Defense Appropriations Subcommittee, gave his views that the only 

meaningful comparison of our aid to th at given to the other side was whether 

we were giving them “enough to do the job.” This incredibly subjective view, 

if it is in fact the adminis tration’s view, cond emn^ the American tax pay er 

to eternal payments on an e ternal war. The U.S. Arms Control and Disarmament 

Agency reports that since 1964 we have sent $387 million in direc t arms aid 

to Cambodia, while the Soviet Union and China combined have sent only $22 

million; in other words, for the last 10 yea rs we have outspent the other 

side almo st 18 to 1. In that perio d, both Cambodian sides have received a total 

of $488 million, 88 perce nt of which was supplied by the United State s. We will 

be sending to Cambodia more than fou r times the amount we sent to Laos 

in the last year received military aid from the Defense Dep artm ent if we approve thi s supplemental re qu es t; thi s is simply too much money at a time when 

we are sorely pressed at home. Mr. Chairman, ha rd times ar e upon ns : we 

can no longer aflFord open-ended commitments to open-ended wars abroad. I

urge you no t to consider this m at te r favorably.
TABLE II I. WORLD ARMS TRADE-RECIPIENT COUNTRIES BY MAJOR SUPPLIERS, CUMULATIVE 1964-73 

[Million current dollars]

United Soviet 

Total States Union

People’s Federal

United Czechoslo- Republic Republic

France Kingdom vokia of China Poland Canada of Germany All others

AFRICA

Nige r............................................ .

Nigeria..........................................

Rw anda..................................... .

Senegal........................................ .

Sierra Leone.................................

Somalia.........................................

South Africa................................ .

Southern Rhodesia.......................

Sudan........................................... .

Swaziland.................... ...............

Tanzania ................................... .

Togo...............................................

Tunis ia..........................................

Uganda................... ......................

Upper Volta..................................

Zaire.............................................

Zam ria...........................................

77

327

93

81

5

39

23

4

,86

53

EAST ASIA 

Total...................................... 17, 837

11 30

1 ..........................

1 69 . . . .

24 . . .

3 63 . . . .

1 2 . . . .

25 . . .

1 8 . . . .

49 . . .

6 1 . . . .

13, 261 2, 858

208

30 38

176

1

1,118 295

Bu rma....................................

Cambodia...............................

China, People’s Republic of.

China, Republic o f................

Indonesia...............................

Ja p a n .. .. ..............................

Korea, No rth.........................

Korea, Republic of................

Laos........................................

M ala ysia .............................

Mongolia________________

Philip pin es............................

Singapore..............................

Thailand ................................

Vietnam, N o rth ...................

Vietnam, Republic of............

,57

438

42

387 13

1,069

429

674

805

2, 625 

686 

263

1,066

91

673

2,624

685

34

144

615'

102

24

190

3

159

1

25

235 

122 

456 

3, 030 

6,948

232

42

437

6,948

2, 090 915
CAMBODIA

[U.S. fiscal years, millions of dollars]

U.S. overseas loans and gr an ts - obligations and loan authorizations

Mutual

Postwar Marshall Security 

relief Plan Act 

period period period

Total

FAA

period

1974 1975 1962-73

Total RepayTotal less

loans ments repayand and ments

grants interest and

1946-73 1946-73 interest

Foreign Assistance Act period

Program 1946-48 1949-52 1953-61 1962-65 1966 1967 1968 1969 1970 1971 1972 1973

Economic assistance ' —T otal.............. 219.9 57.5 (’ ) C ) ( ’ ) C ) (*) 76.8 57.6 93.1 275.5 177 285.0 481.4 10.6 470.8

19.9 25.8 _________ .......... 45.7 45.7 10.6 35.1

Grants............................................. 219.9 57.5 C ) ( ’ ) C ) (*) C ) 76.8 37.7 6 7 .3 ____ ____ _____ 239.3 435.8 .. 435.8

(a ) AID and predecessor agen cie s... 217.6 57.5 . . 70.0 37.1 6 7 .3 .............................. 231.9 426.0 . 426.0

Grants................................. (’ ) (’ ) 217.6 57.5 .. 70.0 37.1 67.3 . . .............. .......... 231.9 426.0 .. 426.0

Security supporting assistance. (’ ) (’ ) (203.6) (3 2. 9) ( - ) ( - ) ( - ) ( - ) ( - ) (7 0. 0) (37.1) ( 6 7 .3 ) .............. .......... (207 .3) (3 95.9 )..

(b ) Food for Peace (PL 483).............. 2.3 (*) C ) (*) (*) (*) (*) 6.8 20.5 2 5 .8 ............................. 53.1 55.4 10.6 44.8

Title 1—T otal................................ 6.8 20.5 25.8 _________ _____ 53.1 2 53.1 10.6 42.5

t—‘ 

8

Repayable in U.S. 

dollars— Loans_______

Payable in foreign 

currency— Planned for

country use.................. .

Total sales agreements, including

U.S. uses.............. .

Title II —T ot al..........................

Emergency relief, economic development & 

world food ...................

Voluntary relief agencies.

( - )

2.3

( - )

(* )

( ? i ( - )

( • )

( - )

(*)

19.9 25.8 ................ ............. 45.7 45.7 10.6 35.1

6.8 .6 .. ............ 7.4 7.4 .. 7.4

( 8 5 ) ( 7 ) ( - ) .................- ......... (9 -2 ) (9 .2 ) ( - ) ( 9 2 )

(*) 0 ) ( • ) ------------------------ (’ ) 2.4 . 2.4

2 3 ............................................................................................................... 2.4 ............... 2.4

(» ) " " ( « ) .........C ) ......... C ) C ) C ) (» ) C ) C ) < * ) ............................... <*> <»>............... C>

(c ) Other economic assistance.
Cam bo d ia

|U.S. fiscal years, millions of dollars]

Program

U.S. overseas loans and grants—obligations and loan authorizations

Mutual

Postwar Marshall Security 

relief Plan Act 

period period period

Foreign Assistance Act period

1946 48 1949-52 1953-61 1962-65 1966 1967 1968 1969 1970 1971 1972 1973

Repayments

Total

Total loans repayFAA and and ments

period grants interest and

1975 1962-73 1946-73 1946-73 inte rest

Peace Corps.......................................................................................................................................................................................................................................................................................................................

II. Military assistance— Total 67.6 23.6 ............................................................. 8.3 184.0 187.2 138.0 381.3 275 541.1 608.7 .........— 608.7

Grants.................................................. ................. . 67.6 23.6 ................ ................................ ............ 8.3 184.6 187.2 1 3 8 .6 . .. ........................ 541.1 608.7 .............. 608.7

(a ) MAP grants............... ...............................(b ) Credit sales under FMS.......................

.............. 64.7 22.2 ............................................................. 8.2 175.3 180.0 132.2 .................. .......... 517.9 582.5 . ............ 582.5

(c ) Military assistance service,

funded (MASF) grants.........................

(d ) Transfers from excess stocks.................. ............... 2.9 1.4 .. .1 8.7 5.2 5 . 8 .............................. 21.2 24.2 . ............ 24.2

(e ) Other grants............ ................................. 2.0 . ............. 2.0 2.0 . ............ 2.0

II I. Total economic and military assistance.......................................................... .............. 287.5 81.1 C ) (*) <•> C ) 8.3 260.8 244.8 231.1 658.8 452 826.1 1,090.1 10.6 1,079.5

Loans............................ ............................................................................................................................................................................ 19-9 25.8

Gran ts......................................................................... 287.5 81.1 (♦ ) (* ) ( • ) (*) 8.3 260.8 224.9 205.3

45.7 45.7 10.6 35.1

780.4 1,044.5 ...............1,044.5

Other U.S. Government loans and

grants........................................................................................................................................................................................................................................................................................................................................- ...........

(a ) Export-Import Bank loans........................................................................................................................................................................................................................................................................................................

(b ) All othe r......................................................................................................................................................................................................................................................................................................................................

1 Official Development Assistance (ODA)— Official concessional aid for development purposes.

2 Includes $44,000,000 in grants under 104(c), Public Law 480.

’ No programs prior to fiscal year 1955.

Note: Excludes aid to Indochina prior to pa rtition; these data appear on the page for "I n d o ch in a - 

Un dis tribu ted."
Program

I. Economic assistance >— 

Tot al...................................

Loans..

Grants.

(a ) A.I. D. and predecessor 

agencies >.......... .........

Lo an s. .............................

Grants..............................

Secu rity supporting assistance ........................

(b ) Food for Peace (P .L . 

480)..............................

VIE TNAM

[U.S. fiscal years, millions of dollars]

U.S. overseas loans and grants— obligations and loan authorizations

Post­ Mar­ Mutual

war shall security

relief plan act

period period period

1946- 1949- 1953-

48 52 61

Foreign Assistance Act period

61 1962-65 1966 1967 1968 1969 1970 1971 1972 1973 1974

97 .3 ............................................................................................................. 59.2 179.0

Total

FAA

period

1962-73

Total

loans

and

grants

1946-73

Repayments

and

interest

1946-73

Total

less

repayments

and

interest

5,1 15.1 6, 298.1 228.6 6,0 69 .5

238 .2 330 .3 228. 6 101.7

4, 876. 9 5, 967. 8 5,9 67 .8

1, 466. 6 658.1 593. 5 494. 4 398 .2 314. 2 365. 9 387.7 386. 8 313 .4 .............................. 3,912 . 2 5, 016. 8 89. 4 4, 927.4

(’ )

<3)

(’ )

(’ ) 91.9 .......................- ....................................................................................................................................................................... 86.7 89.4 - 2 . 7 (’ ) 1,3 74 .7 658 .1 593 .5 494. 4 398 .2 314 .2 365 .9 387 .7 38 6.8 313 .4 .............................. 3,91 2.2 4,9 30. 1 ............... 4,9 30. 1 h-»

(•) (1 ,3 94 .2 ) (6 22 .2 ) (5 83 .1 ) (4 89 .8 ) (3 91 .8 ) (2 99 .1 ) (3 61 .0 ) (3 83 .9 ) (3 85 .2 ) (3 12.3 ).............. . ........... . (3 ,8 28 .4 ) (4 ,8 7 1 .8 ).................................. 3

78 .3 193 .5 143. 0 73 .7 138 .5 99 .4 110. 8 188. 0 67 .8 188. 3 .............................. 1,2 03 .0 1,2 81 .3 139 .2 1,1 42.1

Tit le I— To ta l................................................ 16.4 126. 2 93 .2 73 .3 96 .6 60. 8 75.6 164.9 62 .5 179.0

Repayable in U.S.

do llars—Loa ns.......................................................................................................................................... ............... ......... 59 .2 179. 0

Payable in foreign

c u r r e n c y —

Planned for

country use........................................ 16.4 126 .2 98 .2 73 .3 96 .6 60. 8 75.6 164 .9 Total sales 

agreements

U.S. us es "8 ................................ (2 2 .2 ) (1 40 .2 ) (1 13 .7 ) (1 38.7 ) (1 22 .9 ) (7 7 .6 ) (1 03 .1 ) (2 06 .0 )

.................................. 61 .9 67 .3 44 .8 .4 41 .9 38 .6 35 .2 23.1

937. 1 <9 93 .5 139. 2 814 .3

238 .2 238 .2 138. 6 99.6

3.3 698 .9 71 5.3 .6 714. 7

Titl e II—T ot al.

E aergency re *ief 

econo ical 

velopmsnt, 

world food..........

Voluntary relief 

aga ncic s..............

? . l ) 9. 3 (9 06 .9 ) (9 06.9 ) ( - ) (9 06 .9 ) 26 5.9 327 .8 327. 8

. 7 51.7 38.6 ............... 41.7 38.2 35 .2 23.1

61 .2 15.6 6.2 .4 .2 . 4 ..............................

4. 8

.5

7. 6

1.7

240 .9

25.0

241.6

86 .2

241. 6

86.2
Program

Post- Mar- Mutual - war shall securityrelief plan act

period period period

1946- 1949- 1953-

48 52 61 1

U.S. overseas loans and grants—obligations and loan authorizations 

Foreign Assistance Act period

1966 1967 1968 1S69 1970 1971 1972 1973 1974 1975

Total

less Total RepayTotal loans ments repayFAA and and ments

period grants in terest and

1962-73 1946-73 1946-73 inte rest

(c) Other economic assistance...........................

Peace Corps........................................................................................................................................................................................................................................................................................................................

Other...................................................................................................................................................... .............................................................................................................................................................................

II. Military as sistan ce -Total.................................. 526.3 955.4 875.1 1, 208.5 1,1 53.2 1, 71 0.8 1,7 27.6 1,895.0 2,39 8.5 2,16 8.3 946.0 700 14,092.4 14,618.7 .............. 14,618.7

Credits or loans.............

Grants.............................

(a) MAP grants.....................

(b ) Credit sales under FMS.

(c) Military assistance service, funded (MASF) 

grants..........................

(d ) Transfers from excess

stocks..........................

(e) Other grants...................

II I. Total economic and military 

assistance..........................

Loans..............................

Grants.............................

Other U.S. Government loans 

and grants................................

5 2 6 ? 3 '' '9 5 5 '4 '' ~ 8 7 '5 ? i' t2 b 8 ? '5 '' ti5 1 2 'i ji 6 ? 8 'i ,'7 2 7 .'6 'i ,'8 9 5 .'6 '2 '3 9 8 .'5 '2 ,'i 6 8 .'3 '" " ." " " " " .'i 4 ,'0 9 2 ? 4 '' i4 ,'6 i8 .7 'L l...........14,618.7

508.8 870.8 94. 1 ............................................................................................................................................. 964.9 1,473.8 ............... 1,4 73.8

......... 34.0 767 .5 1,203.51,054.5 1,60 8.2 1,684.1 1,8 74.5 2,15 9.5 2,14 4.0 .............................. 12, 529.8 12, 529.817.5 50.6 13.5 5.0 98.7 102.6 35.0 12.5 15.9 24.3 ............................... 358.1 375.5

......................................................................................... 8.5 8. 0 223.1 .............................................. 239.6 239.6

12,529.8

375.5239.6

2,07 1.2 1,8 07.0 1,611.6 1,7 76.6 1,689.9 2,12 4.3 2, 20 4.3 2,470.7 2,8 53.1 2,67 0.0 1,6 01.1 1,274.9 19,207.5 20,916.8 228.6 20,688.2

97.3 . .................................- ......................... 59.2 179.0 ............................... 238.2 330.3 228.6 101.7

1,973.9 1,807.6 1,611.6 1,776.6 1,689.9 2, 12 4.3 2,20 4.3 2,470.7 2,793.9 2, 491. 0 .............................. 18, 969. 3 20, 586. 5 ............... 20, 586. 5

(a ) Export-Import bank

loans...................................................................................................................................................

_ (b ) All other .........................................................................................................................................

•Less than $50,000.

Note: Excludes aid to Indochina prio r to pa rtition; these data appear on the page for "Indochina-* 

Undistributed.”

» Official Development Assistance (ODA)— Official concessional ?td for development purposes.

2 Excludes reimbursements by the Department of Defense for grants, as follows, in millions of 

dollars: fiscal year 1967, $43.2; fiscal year 1968, $34.6; fiscal year 1969, $34.7; fiscal year 1970; 

$54.5; fiscal year 1971; $67.3; fiscal year 1972, $28.3; and fiscal year 1973; $75.1.

3 No programs prior to fiscal year 1954.

* Includes $900.4 million in grants for common defense under Section 104(c), PL 480.
Ford Reveals $349 Billion Budget Total

(By Peter Millus)

Pre sident Ford said yesterd ay th at he will send to Congress Monday a $349 

billion budget for the coming fiscal year, a spending plan he noted comes to almost 

$1 billion a day. Th e budget would incre ase total Federal spending about $35 billion or 11 perce nt over this fiscal year’s estima ted outlays, with most of that increase attribu ted to inflation. Without the likely inflation rat e the cost of government 

would not grow much since the President reiter ate d that he will propose no big 

spending programs. Even with out such programs, the Preside nt told reporters, the projected deficit 

fo r fiscal 1976, which will st art July 1, is $52 billion, a record for time of peace— 

and that projection assumes th at Congress will go along w ith $17 billion in spendin g l imitations and reductions Mr. F ord is proposing. Those limitations include such things as a 5 percent ceiling on this summer’s 

scheduled cost-of-living increase in social secu rity benefits, which otherwise will 

rise a n estim ated 9 percent. Congress has already indicate d it will not go along with this. If it balks at a ll 

the cost-cutting recomm endations he has made, the President said, the deficit 

will rise to nearly $70 billion. The Presiden t spoke a t the st ar t of a budget briefing for repo rters in the Sta te 

Department auditorium. Such briefings are held every year, with the understanding tha t nothing from e ither the budget or the briefing will be published or broadca st until the budget is actually sent to Congress. This time, however, the White 

House perm itted use of the Presi dent’s comments in defense of the budget.

Mr. Ford noted he was the first Preside nt to app ear a t a budget briefing since 

Harry S. Trum an on Ja nu ary 19, 1952. The budget that year, he said, had jumped 

to $85 billion, a sum then described as astronomical, and Truman called it “the 

biggest headache I have ever had.”

“Harr y,” Mr. Ford said, “I hope you left some aspirin for me.”

The budget and the likely deficit have presented Mr. F ord with both a political 

an d an economic problem. T he political problem is that, like other members of his 

party , he has spent most of his caree r deploring deficit spending, and now finds he 

is forced to recommend it. Next year’s deficit will be on top of an estim ated $32 

billion to $34 billion this fiscal year, also a record for peacetime.

The economic problem is to recommend a big enough deficit to stimulate the 

economy out of the recession, yet not so big a s to create future inflation.

Artillery Use Is I ssue I n Vietnam

(By Philip A. McCombs)

Saigon. Feb ruary 1—During a 1-week period in January , South Vietnamese 

government forces fired 13 times as much artillery ammunition as the Communists, 

according to reliable sources.

The ratio varied in differen t p ar ts of th e country. In the northern qu art er and 

in the populous Mekong Delta, the ratio was 10-1. In the imp ortant provinces 

aro und Saigon, the government fired 15 times as much art illery as the Communists during that week, and in the Central H ighlands 18 times as much.

These figures are not unusual in Vietnam, and most a nalysts here agree that the 

government, in defending broad are as of the country aga inst what are often hitand-run gue rrilla tactics of the Communists, must expend more ammunition 

than the attackers.

But how much more amm unition they need to expend is a subject of debate.

The experts differ sharply, with some saying a 20-to-l advantage in men, ammun ition and weapons, would be appropriate for a wa r like this. Others say th at 

the South Vietnamese have been so spoiled by American extrava gan ce that they 

need no more ammunition than they have, and could probably get along on less.

Opinions of military exper ts also vary on the importance of the $300 million 

in emregency military aid th at the Ford adm inistration is seeking for South 

Vietnam for the current fiscal year.

“The $300 million is important but not vital ,” said one analyst. “What will 

be vital is the app ropriation for next year.”
105

In th is vie w, ne xt year's m ust be a t le ast $700 mill ion, th e sa m e am ou nt th a t 

Co ng ress has so fa r appro pri ate d in m ilitar y aid fo r th is fis cal yea r, if Saigoi* 

is to avo id p ossib le m il it ary d is ast ers .

W itho ut th e $300 mill ion su pp le m en t, ac co rd in g to th is an aly st , Sa igon 's fo rc es ’ 

will be st ra in ed to find en ou gh am m uni tion from A pr il th ro ugh Ju ne— th e la st 

q u a rt e r of fis cal 1975— but will co ntinue to be ab le to fig ht effecti ve ly.

A no th er vie w is th a t Saigo n’s fo rc es will be sign ifi ca nt ly ha m per ed w ithou t 

th e $300 mill ion su pp le m en t. In th is mo re dir e vie w, Saigo n’s fo rc es will be 

ab le to su rv iv e, bu t th e net effect will be to prol on g th e co nflic t w ith sh ar p in ­

cr ea se s in gov er nm en t c as ual ties .

A g re a t de al de pe nd s on N ort h Vietnam es e in te ntions. Most analy st s h ere 

ex pe ct th a t th e cu rr en t lim it ed offen siv e will co nt in ue an d in te nsi fy duri ng 

1975. If it sh ou ld in te nsi fy gre atl y, as som e be lie ve it will, an am m unit io n 

sq ue ez e could be com e pr on ou nc ed .

Si nc e th e fa ll of Ph uo cl on g Pr ov in ce to th e Com m un ists ea rl y th is m on th , 

figh tin g ar ound th e co un tr y h as les sened, an d yes te rd ay th e go ve rnmen t a n ­

no un ce d th a t th e nu m be r of m il it ary inci de nt s, 71, is th e le ast sin ce De cemb er 4.

B u t analy st s say th is is m er ely a lull in th e Com m un ist lim ited offensive. 

Ev en go ve rn m en t officia ls sa y th ey ex pe ct th a t se ver al mor e d is tr ic t an d evenpr ov in ce cap ital s w ill fa ll to th e Com m un ists duri ng th e next half ye ars.

R ep orts re ac hi ng Sa igon fr om Giang hia, th e capit al of Qua ng du c Pr ov in ce in 

th e lo wer Cen tral H ig hl an ds , sa y th e m os t ci vilia ns ha ve alr eady been evacuate d 

in a nti cip ati on of C om m un ist as sa ults.

Man y ci vi lian s ha ve al so fled th e T ay ni nl i Pro vi nc e ca pit al, 55 mile s n o rt h ­

w es t of Saigo n. O th er im p o rt an t ar eas no t fa r from Sa igon ap pear th re at en ed .

I f th e lev el of figh tin g co nt in ue s a t th e sa m e in te nsi ty as duri ng th e past se vera l mon ths, exper ts sa y th a t by Ju ne th e go ver nm en t’s stoc ks of gr ou nd am ­

m un itio n will be 25 p er cent below the re qui re d minim um .

T hi s minim um is de fin ed as enou gh am m un itio n in si de So uth Vietnam to 

figh t w ithout re su pp ly fr om ab ro ad fo r fit) da ys a t in te nsi ve lev els com par ab le 

to th e 1972 sp ring offensive, pl us 30 mo re day s a t a mor e m od er ate, no rm al le ve l 

of fig hti ng .

T his is co ns id er ed a lo w er lim it be ca us e re su pp ly fr om th e U ni te d S ta te s is 

sa id to ta ke a m in im um of 60 da ys once auth ori zati on is ob tained .

T hu s while th ere ap p ears to be en ou gh am m un itio n now , a cri ti cal sh o rt ag e 

co uld develop qu ickl y sh ou ld th e fig htin g in te ns if y ov er a lon g pe riod and no 

su pp le m en ta l ai d be gra n te d by Co ngres s.

The Co mmun ist s, on th e oth er ha nd , are sa id to ha ve stoc kp ile d en ou gh am ­

m un itio n in side Sou th V ie tn am to su pp ly in te ns iv e figh tin g on th e sp ring , 1972, 

lev el fo r a y ear a nd a h a lf w ith ou t out si de res up ply.

The Com m un ists a re sa id to ha ve abou t 406 art il le ry pie ces in side Sou th V ie tna m, an d th e go ve rn m en t to ha ve thre e or f our tim es t h a t ma ny .

Ev en if th e go ver nm en t fires only de fens ively, it will tend to fir e mor e th a n 

th e Com mun ist s, th e expert s say.

“You ha d S06 in ci den ts in the de lta in a re ce nt wee k,” sa id on e analy st . “I f 

th e go ve rn m en t fir es a few roun ds of art il le ry in h alf of these, yo u' ve go t ait 

en or m ou s ex pendit ure ri g h t th er e. ”

A few Com m un ist so ld ie rs fir ing th eir rif les a t an ou tp os t a t ni gh t m ig ht e li c it 

go ve rn m en t art il le ry fire . Since th e go ve rn m en t is de fe nd in g hundre ds of o u tpo sts , the nu m be r o f art il le ry ro un ds fi red mou nt s qu ick ly.

Th e 13 to 1 go ve rn m en t art il le ry ex pe nditure duri ng 1 week in Ja n u a ry is 

hi gher th an th e 9 to 1 f or th e la st q u art er of 1974 or th e 7 to 1 ra ti o in th e q u a rte r 

be fore th at.

D ur in g th e fi rs t q u a rt e r of 1974, ho wev er, th e go ve rn m en t fired 17 tim es w h a t 

th e Com m un ists fir ed , and duri ng th e sec ond q u a rt e r 15 tim es as muc h, re li a b le 

fig ures sho w.

F or 1974 as a who le, th e go ve rn m en t fired 12 t im es as mu ch as th e C om m unis ts , 

co mpa re d to 17 tim es as mu ch in 1973. The so ur ce s th a t dis clo sed th e sta ti sti c s’ 

as ke d th a t th e actu a l nu m be r of ro un ds fir ed fo r th es e var io us pe riod s not be 

reve aled .

In ge ne ra l, ho wev er, th e go ve rn m en t fired so m ew ha t les s th an 5 mill io n ro unds 

ea ch y ear duri ng 1973 an d 1974 while th e Com m un ists a re said to h av e fired in th e 

ra nge of a q u a rt e r mi llion to h alf a mill ion ro un ds .

Th e actu al ra ti o may tend to sh ow go ve rn m en t firep ow er as less th an it actu ­

ally is, be ca us e th e go ve rn m en t fig ures in cl ud e only ro un ds fir ed fr om la rg e 

art il le ry piec es w hile th e Com m un ist fig ures also in clud e m o rt ar ro un ds .
106

A study of the ratios .and government casua lty figures a ppe ars to show a d irect 

relatio nship between lower government artillery fire and higher casualties.

For example, the weekly ave rage of government soldiers killed in action during 

the first qu art er of 1974 was 236, when the artillery fire rat io was 7 to 1. The 

figures for the other three quarters , in sequence, ar e: 304 dead, with a 15 to 1 

ratio : 389 at 7 to 1, and 344 at 9 to 1.

Mr. Leggett. I a pp recia te th at t he ho ur is l ate a nd I believe th e new 

rules o f th e House req uires me to summarize.

I have great respect fo r the prev ious witness, Phi l Habib . I have 

kno wn him in Korea. I ha ve tal ked to him in P ar is. W e have a common 

vie wp oin t on a large numb er of things, bu t with resp ect to thi s s upple ­

me nta l we have views which are diam etr ica lly opposed . Normally I 

th in k you can say on some of these program s you have g ot an ask ing 

price and a nego tia tin g price, as you have ind icated . T think, very 

fran kl y, th at the lim ita tio n th at has been put on Cam bodia should 

hol d. T say that fo r a nu mbe r of reasons.

No. 1. the y have got an $85 m illion pipeline.

No. 2. this country is going broke.

I do n't need to tell you abo ut this lit tle red . white, and blue document th at came out tod ay. I t c arr ies w ith it a $ 52-billion deficit. That 

presum es th at the Con gress will enact leg islation red ucing pay ments 

to indiv iduals on the or de r of $17 billion, about which George Mahon 

said tod ay, “N o way.”

I t assumes th at we will steal the $3 billio n su rplus which is mentioned in here as surplus in the tr ust fun ds, so t hat w e h ave a budget 

here which is. in general figures, $73 billio n out of balance. T hat ’s 

fo r the next fiscal yea r. F o r th e cu rre nt fiscal year I believe we are 

ta lk in g about a budget deficit of som eth ing like $35 to $40 billion, 

an d we are swiping $7 billion fro m the trus t funds. Believe me, as 

fa r as I am conc erned th at is into lerable. I th in k th at we hav e g ot to 

cut do wn e very plac e aroun d the block.

I find it extrem ely inc ongru ous th at on pr ac tic ally the very day 

th at the Presiden t would ask us fo r $22*2 millio n fo r Cam bodia, th at 

he wou ld offer us a lis t of red uct ion s fo r ag ricu ltu re to talin g $265 

millio n because he says we ca n’t afford it.

I th in k we have to figure ou t what ou r pr iorit ies are. I f you will 

look at the chart th at I have go t at the end of mv testim onv . this is 

pr ep ar ed not bv my office: it ’s bv the Ar ms Control and Di sarm ame nt Agency, whi ch is fu ll of people fro m the Penta gon. W ha t th at 

shows, if you look at page 68 o f the Arms Control and Disar ma me nt 

Ag ency’s repo rt, is th at fo r Eas t Asia fo r the period 1964 to 1973, 

which is all of this are a, Bu rm a, Cambodia, a t ota l has been spent for 

arms o f $17.8 billion.

O f th at tot al, the United State s has spe nt $13.2 b illion, th e Soviet 

Un ion has spe nt $2.8 b illion . Fran ce $4 million , the Un ite d Kingdom 

$176 million , the Comm unist Chinese $1.1 millio n, and Germany $15 

million. I ju st th in k we have assumed abo ut as much a role in th is 

general a rea as we ou ght to assume.

If you com pare the amou nt th at we ha ve spent w ith the S oviet Unio n 

an d Chinese, th ei r total is about $4 billion, so we have spent to date 

3 to 1 wh at the y have sp en t in th is are a, a little be tte r than 3 to 1, 

$13 billion to about $4 billion.

I do n’t th ink we shou ld increase these am ounts.
107

If you look at the next pag e, th a t’s y ou r Camb odia wor ksh eet. In 

the per iod fro m 1962 to 1965 we sp en t $81 million . That is economic 

and military. In 1966 we did n’t s pend a dim e. Siha no uk was in power. 

In 1967 we di dn ’t spend a dim e. In 1968 we di dn't spend a dime. In 

1969 we did n't spend a dime. In 1970 we practic ally did n’t spe nd a 

dime, $8.3 m illion, and then fo r some reason w hen we wi thdrew fro m 

Cam bod ia, why, Sih anouk was k ind of thrown o ut the re, a nd we mad e 

some kind o f a com mitment t hat's man ufactured by the St ate Dep ar tment, if y ou rea d the letter t h at we have got f rom the D ep artm en t of 

Sta te.

The y s ay t h a t:

Because the Cambodians played such a useful role in helping us disengage our 

forces from Vietnam, first by permitting the disruption of the Cambodian Communist sanctuaries and also by occupying the attentions of the better part of four 

Vietnamese Communist infan try divisions for 2 years.

I say if you believe in th at , you have go t to believe th at the funn y 

papers are true, because t h at j us t d id n’t ha ppen. Th ere were never fou r 

divisio ns th at were occupied wi th the Cam bod ians. It ju st n eve r ha ppened. Th en wh at we proc eed ed to do was to s pen d in 1971, includ ing 

Pu blic Law 480, a to tal of m ilitar y and economic aid , $260 million a nd 

in 1972, $244 million, a nd th en $231 millio n in 1973 and th at is when we 

star ted our peace wi th ho no r and we got out of Vie tna m.

But t he n wh at did we do in C ambod ia? In fiscal ye ar 1974 the total 

am ount th at we spent was $656 million . So we dec ided to tone th at 

dow n wi th the lim ita tio ns fo r the c ur rent fiscal year. We set a lim ita ­

tio n then of $177 million fo r economic, $275 millio n for military, a 

total expe nd itu re o f $453 millio n, which sti ll am ounts to about 10 p er ­

cen t of all of the money we spend in reve nue shari ng . So now we 

wa nt to aug me nt th is fig ure of $452 mi llio n on the basis of a case 

th at may have been ar tf ully pre sen ted to you. Bu t I think it was an 

ineffective case. We wan t to aug me nt th at by $222 millio n to br ing it 

up to $676 mil lion fo r the cu rre nt fiscal ye ar. W e want to give them an 

ad ditio na l $70 mi llion of rice, which, of cours e, as you know, is like 

cash out in th at are a, wh ich bring s it up to $746 m illion.

Th ey have got, they ad mit at the presen t tim e, $42 millio n in the 

pip eline. God kno ws how much pip eline money they s pen t up to Fe bru ar y 1. So th at gives us a total annu al prog ram of $788 millio n. I 

wou ld say th at they prob ably spent $100 millio n of pip eline money. 

So we get alm ost up to the billion do lla r level fo r this lit tle co un try 

of Cam bodia.

On the ne xt she et we have the Vietn am figures. Of course, th at 

shows you in the last colu mn there on the right af te r we h ave pu lle d 

out of the re we sp en t in fiscal ye ar 1974, $1.6 billio n total prog ram. 

The tot al am ount fo r 1975, before we give the m anv ad ditio na l $300 

million which has been requ ested, is $1.27 billion. How th at is pulling the plug on th e Vietnamese by no t gi ving them any more, I ju st 

don't un de rst an d.

If you look at the next page, I have tw o thi ng s ther e. No. 1 is a cop y 

of yester day's Po st th at ind icates t he $349 billion budget ou r co un try 

is face d wit h. Th en on the righ t of th at is th at lit tle art icl e en tit le d 

“A rtille ry Use Is Iss ue in V ietnam.”

Tha t artic le e xp lai ns, pa rtic ul ar ly o ver in the second page:

The Communists are said to have in Vietnam about 400 artillery pieces inside 

South Vietnam and in the government they have three or four times tha t many.
IOS

So it’s 3 or 4 to 1 that they are outnumbered as far as artillery in 

South Vietnam.

“Even if the government fires only defensively it will tend to fire 

more than the Communists,” the experts sav. “You had 800 incidents 

in the Delta in a recent week.” said one analyst. If the government fires 

a few rounds of artillery in behalf of these, you have got an enormous 

expenditure right th ere:

A few Com m un ist so ld iers firin g th e ir rifle s a t an ou tp os t a t ni gh t m ig ht elicit 

go ve rn m en t a rt il le ry fire. Sin ce the g ov er nm en t is de fe nd in g hun dre ds of o ut po sts, 

th e n um be r o f a rt il le ry r ou nd s fired m ou nt s qu ick ly.

The 13 to 1 go ve rn m en t art il le ry expendit ure du ring 1 week in Ja n u ary is 

hig her th an th e 9 to 10 fo r th e la st q u a rt e r of 1974 or th e 7 to 1 ra ti on in th e 

q u a rt e r b efor e th a t.

D ur in g th e fi rs t qu art er of 1974, ho wev er , th e go ve rnmen t fir ed 17 tim es w hat 

th e Com m un ists fired, an d du ring th e second quart er 15 tim es as mu ch, re liab le 

fig ures show. F o r 1974 as a wh ole th e Gov er nm en t fired 12 tim es as muc h as the 

Com m un ists co m pa re d to 17 times a s muc h in 1973.

They continue:

In ge ne ra l, ho wev er, th e go ve rn m en t fire d so m ew ha t less th an 5 mill ion ro un ds 

ea ch yea r duri ng 1973 an d 1974. while th e Co mmun ist s are sa id to ha ve fired in 

th e ran ge o f a q u art er o f a mi llion t o a h a lf m illion r ou nd s.

Those figures, while they refer to Vietnam, are clearly applicable to 

Cambodia. It’s the reason we are in this situ ation: we have trained 

these people. Unfortunately, we would have been much better if they 

had trained themselves, where we have got this fierce tail for the 

small amount of tooth. T have been over there and camped out with 

the troops in Khok Tie. T wasn't shelled at all but all we heard was 

massive amounts of artillery being lobbed out by our side.

That is the way we fight. When we hear a rustling in the thicket, 

we pepper it with $500 worth of ammunition because that little rustling 

might produce a mortar round or something like that.

There is a secret to ending all this. It doesn’t mean you have to 

knuckle under the Communists. We have to do the same thing we did in 

Laos. W hat is the secret there? Why do we have peace there? It's very 

simple. You have a thing there called a coalition government.

Is Mr. Thieu ready for a coalition government ? Like hell. No t one 

iota will he give as fa r as any kind of a compromise in that regard. 

Will Lon Xol form a coalition government, even though we have this 

tremendous occupation of 90 percent of the countryside by his adversaries? Like hell.

I say that unless we are prepared to make a commitment right now 

and spend a half billion dollars to $1 billion for Cambodia and $1 billion to $2 billion for Vietnam for the indefinite future, having exactly 

nothing in mind except the perpetuation of these little governments 

out there T think it's time to set up a phaseout program.

If this committee doesn’t do it, what is going to happen is this : We 

are going to take this to the Democratic Caucus and I think we can get 

support for it. We are going to say we are going to terminate our total 

involvement in this subject area of Indochina over the next few years. 

Instead of $700 million it’s going to be substantially less. That is what 

I call a reasonable program.

T don't know what the revolutionaries who come in here want. I 

would say perhaps $500 million. $300 million. $200 million, and then 

maybe $100 million and restrict everything else to reconstruction.
109

We mu st come up with a pr og ra m like th at; Phi l ITabib ai n’t, because his commitment is to the Lon Nol gover nm ent . His commitment 

is to the Th ieu g ove rnm ent.

I am n ot one who criticizes e ith er of those go vernments. T do n’t know 

fir sth an d wh eth er they are ba d or good. Bu t I do know th at the y are 

playing a chess game whe re they can’t win the wav they are pla yin g. 

Wh en you are fig hting an enemy where you are shoo tin g 17 tim es 

as much am mu nition as he is shooting, vou have t o play a no ther game. 

Unless the So uth Vie tnamese an d Cam bod ians are p repa red to inv ade 

No rth Vietn am , and then have them pla y the game in reverse up 

the re, and I by no mea ns reco mmend th at , I say we ca n't affo rd to 

have th em pl ay thi s game this way .

Al l of these numb ers you ge t on casual ties I th in k you can forget 

because we know ove r in th e Arme d Services Comm ittee that, there 

is prob ably a 65-perc ent ex aggeratio n factor associated wi th them . 

Wo alle ged ly killed all of th e Vie tcong y ears ago. Th ere jus t a in ’t th at 

ma ny Vie tcong the re. So now the y have come up wi th North Vietnamese. You do n’t find an y V ietc ong these days.

I th in k th at we just, c an ’t be myopic abo ut th is l itt le c ountry. Th ere 

are a lot of peop le who say, “I know people over there and we c an 't 

let the m go down the dra in .” He ll, I know Ital ia ns and I tell you 

the coun try of It al y is go ing down the dr ai n and Brita in is going 

dow n the drain. W ha t are we doing about th at ? We are no t doing a 

damn thin g.

I th in k we can become myo pic about eve ry sin gle lit tle country in 

the wor ld. We can wor ry abo ut the Bi afrans . We can wo rry about 

th e hu ng er in every sin gle country in A frica an d we can spend $10(1 

billio n tryin g to solve it. We can become myopic about every dicta to rs hi p in So uth Am eri ca and tr y to tra ns fo rm them into our wav 

of life , bu t I do n’t th in k we can do it. I th in k we’ve got to reco gnize 

wha t we can do and recognize wha t we ca n’t do. W ha t we ca n' t do 

is give these peo ple at th is poi nt $222 million. I f we hav e mis led them by 

allow ing the m to pr og ra m for 7 or 8 mo nth s a t th e $400 or $500 m illion 

ra te when they kne w th at we were going to cut, when we told them 

we were going to cut an d when the am endm ent s are on file t hat they 

were cu tti ng las t sum me r, the n I th in k the y are ju st going to have 

to learn somethin g.

Then to come in in t he face o f th at cu t and t o ask for $400-something 

million for next y ea r lead s me t o belie ve th at th is a dm inist ratio n ju st 

has no ap prec iatio n whatsoev er as to w ha t the int entions o f this Congres s are a nd to w ha t ou r p rio rit ies are.

I would hop e t hat we d on’t get i nto a tu g of w ar session. I hop e th at 

we sto p th is r ig ht here on this c ommittee an d not ta ke it to the floor.

I tell you, the Dep artm en t of Defense lost its cre dib ility when they 

brou gh t up the supplem ental last yea r. W ha t hap pened ? Th ey got 

no thing because th at sup pleme ntal was conceived in con fusion. I t 

was not an ur ge nt sup ple me nta l. As a res ult, they ju st d id n’t get wh at 

the y wanted.

I yield bac k t he balanc e o f m y time.

Mr. Coxte. M av I ask one question ?

Mr. P assman. Yes. M r. Conte.

Mr. Coxte. In other wor ds. Bob. as I un de rst an d you, wh at you 

would adv oca te is tha t we keep the $200 million ceiling.

47-299—75---- 8
Mr. Leggett. I think it ’s critica l th at we keep th at. I f we don ’t sav 

wh at we mean and m ean wha t we say. I th in k we are c onfus ing every 

co un try th at r elates to t he U ni ted States.

Mr. P assman. Th an k you, Mr. Leggett. May I ass ure you, and 

thro ug h you your co lleag ues, t hat you’re on a n em ine nt basis an d th at 

this com mittee always welcomes th e views o f o ur fellow colleagues. We 

may no t always agree on philosophy, bu t we are alw ays glad t o have 

the in form ation and counsel of ou r colleagues.

One of our old colleag ues return ed to Congres s th is yea r. That is 

Dick Otti ng er from New Yo rk. Dick , we are so ha pp y th at you could 

find tim e to a pp ear before t he com mittee and fu rn ish y ou r view s on th e 

request f or Cam bodia.

Statement of H on. Richard L. Ottinger, a Representative in Congress F rom th e State of New York

Mr. Ottinger. I wa nt to th an k you very muc h. Mr. Ch airma n, fo r 

aff ordin g this op po rtu ni ty to me. I recognize th at you hav e been si tting here all day an d th at th e ho ur is late. I would like to enter my 

prep ared sta tem ent into the rec ord and to expand upon some of the 

po ints th ere in.

[T he state me nt fo llo ws:]

Testimony of Hon. Richard L. Ottinger

Mr. Chairman, I apprecia te your granting me the opportunity to appeal* before your subcommittee today to present my views with regard to increasing 

U.S. m ilitary assistance to Cambodia.

I appear before this subcommittee to pose two questions to my colleagues in 

the Congress, with regard to the adminis tration’s request for $222 million in 

military assistance to the government in Phnom Penh.

First, why does the Congress continue to disregard the consensus of the 

American people, which believes th at U.S. involvement in Cambodia is wrong, 

both legally and morally? And, second, why does the Congress seem so willing 

to disregard its own edicts reg ard ing our direct and indirec t involvement in the 

war in Cambodia? In either in stan ce, we in Congress are acting in an irrespons ible maner. denying the manda te of the people, and ignoring wh at is in the 

best in terest of the United State s.

The adm inistration argument th at financial assistance to the Lon Nol regime 

does not represen t “indirect” combat activity in Cambodia is Machiavellian 

sophistry. Economic and military assistance from the United States is the only 

prop which keeps th at regime in power and maintains the conflict in Cambodia. 

U.S. financial assistance is dir ectly responsible for the war. and to deceive ourselves otherwise is to ignore the horrid reality of th at war. The adm inistration 

request runs counter to the Pa ris peace agreement and the specific prohibitions 

of acts and resolutions by the Congress.

The Congress has alre ady made its decision about the continuation of aid 

to Cambodia, and it is time th at the adm inistra tion recognize th at fact. This 

request is illegal, and I intend to oppose it and any other attem pt to provide 

assistance for the continua tion of the wa r in Indochina.

Mr. Ottinger. I will be ve ry bri ef. I mu st say th at T found the 

whole discussion here q uite mys tif ying . T d on 't con sider myself as un ­

reasonable. I believe I am a con scie ntio us an d th ou gh tful Am erican’ 

tryin g to look out for the best int ere sts of this country.

From my point of view, it seems to me th at the com mitment th at 

the Un ite d Sta tes mad e, in en terin g the Pa ris agree me nt, was th at 

we were going to get o u t: th at we were going to end ou r m ili tary com ­

mitm en t and all our m ili ta ry ac tiv ity in Cam bodia.
Ill

For us to continue military activity, and to have the administration and, the Department of Defense come here and indicate quite early they are up to their eyeballs in m ilitary activities rig ht now in Cam­ bodia, seems to me to be a clear break of faith with the American 

people and a breach of law. As I see it, in section 307 of the second supplementary Appropria­ tions Act of 1973, there was a specific legal prohibition against the se of Federal funds “to support directly or indirectly to supp ort combat activities in or over or off the shores of Cambodia.” T hat apparently has been violated right along. It mystifies me. It must mystify the 

American people. The continuing Appropriations Act of 1974 again said, “None of the funds herein appropriated under this act may be expended to support directly or indirectly, combat activities in or over or off the shores of Cambodia.” I think the people had a right to expect that this provision, 

too, would be carried out. For the administration to come here and say tha t if Congress stops these funds we are going to be responsible for the loss of lives in Cam­ bodia seems to me distinctly improper and unfair. What is continuing to cause the loss of life in Cambodia is our continued illegal support of military activity there. It is not going to stop until we stop. I think the likelihood is very g reat th at even if the Lon Nol Government fails and even if the Communists take over, there will be considerably less loss of life than there will be if we continue to perpetuate military ac­ tivity. But at any rate, the issue has already been decided, and the ad­ ministration has no rig ht to flout the law. This is a very disturbing aspect of the situation, and the committee should not put itself in the position of condoning the administration’s illegal activity. The admin istration also made the broader decision or at least an­ nounced the decision to the American people, th at the United States wasn’t going to be the policemen of the world any longer, that the United States wasn’t going to continue to take responsibility, nor were we able to take responsibility, for the political situation in all the far- flung places of the Earth. I thin k this is one place where the line has to l>e drawn. I don’t feel tha t I am being unreasonable in advocating an end to militar y aid to Cambodia. Rath er, I am forwarding, as I see it. the best interests of the American people in not s upporting an­ other cent for military activity in Southeast Asia—not winddown over 3 years, b ut a complete cutoff. We have had enough of military activity in Southeast Asia, far more than enough. I will be glad to support moneys to reconstruct an area which the United States helped to destroy, but not 1 more cent for killing people in Southeast Asia. My most sincere view is that this is in the 

best interests of the United States.

Than k you very much.

Mr. Passman. As I mentioned to Boh Leggett, we are always glad to have Members of Congress appear before this subcommittee and share with us their views. Certainly when we consider this request, all 

members’ views will be taken into account. I want to commend our new member here. Congressman Moffett. He poems to take an active interest in knowing what is going on before the subcommittee. It certainly indicates that you are looking at what
112

your people back home sent you here to look at. We are very happy 

to have you here. Any statement you wish to make, we will be glad 

to hear from you at this time.

Statement of ITon. Anthony T oby Moffett, a Representative in

Congress F rom th e State of Connecticut

Mr. Moffett. Thank you, Mr. Chairman.

I would like mv prepared statement to be taken as part of the record. 

Mr. P assman. Without objection, it will be inserted in the record. 

[The statement follows:]

Test imon y by U.S . Repr ese ntative T oby' Moff ett

Mr . Cha irm an , I ap pre ci at e y our gra nti ng me th is oppo rt un ity to pre se nt my 

view s h er e toda y.

The issu e be fore yo ur su bc om m itte e is of par am ount im po rtan ce — no t only 

fo r w or ld se cu rity , but fo r th e fu tu re re la tion sh ip be tw ee n Co ng ress an d th e 

P re si den t, an d fo r the curr ent cri si s in confiden ce th a t pe rv ad es th e pu blic’s a tti tu d e to w ar d th e Gov ernm en t.

Alm os t 5 ye ar s ago, Mr. C hai rm an , on April 30, 1970, I lik e so man y American s, 

w at ch ed w ith sho ck as P re si dent Ni xo n co mmitted ou r N ation to m ilitar y in te rve nt io n in Ca mb od ia— in te rv enti on of a mo re m as sive n atu re th an was st at ed 

by the Pre si den t or im ag ined by th e pu blic a t th a t tim e.

I resign ed my job a t th e D epar tm en t of H ea lth, Edu ca tion , an d W el fa re ov er 

th a t iss ue . To me, ou r so-call ed in cu rs io n was de stin ed to do no th in g bu t hel p 

in te nsi fy a civ il w ar a nd d ev ast ate a once-peaceful. onc e bea utifu l na tio n.

On ly re ce nt ly ha ve we become aw are of th e tr u e sco pe of American inv olve ­

m en t in Ca mb od ia— th e pre se nc e of U.S . m il it ary ad vi so rs, th e sa tu ra ti on 

bo mbing th a t th e adm in is tr ati on tr ie d to hi de fro m th e eyes of th e wo rld, an d 

th e ta lk of a possi ble Am er ic an a ir li ft to Ph no m Pe nh . Now. in th e wak e of 

mor e th an 700,000 de ad or in ju re d Cam bo dian s an d th e tr ansf orm ati on of oneh a lf of th e enti re po pu la tion in to ho meless refuge es, it is tim e fo r people of 

co nscien ce ev er yw he re to op po se a ne w roun d of i nt er ven tion . It is bo th sh oc king 

an d de pr es sing to watch P re si d en t For d an d Mr. K issing er proc ee d in th e same 

mo ld as th e Nix on adm in is tr ati on, us in g th e same dis cr ed ited ar gu m en ts, th e 

sa m e pre ss ure s on Co ng res s, an d th e sa m e pu blic pr opag an da tech ni qu es th a t 

we'v e bee n su bj ec ted to fo r m or e th an a decade.

On ce ag ain, we hea r th e d ir e pr ed ic tion s of des tr uct io n th a t wi ll re su lt if 

we do not co nt in ue our in vo lv em en t in Sou th ea st As ia. W e ha ve been tol d th a t 

Con gres s will ha ve to sh oul der th e bl am e if th e Cam bo di an in su rg en ts suc cee d. 

Su re ly , Mr. Cha irm an , th e la st 10 years ha ve ta ught us th e ri sk s of attem pting 

to win a m ilitar y victor y in a la nd th a t has alr ea dy su ffered beyo nd all belief. 

R eg ar dl es s of th e re la tivel y sm al l siz e of Ca mbo dia, it h as bec ome appar en t 

th a t th e United Sta te s ca nno t— inde ed , th a t it sh ou ld no t— att em p t to im po se 

it s will on th e peo ple of Cam bo di a, or of an y oth er na tio n.

Be yo nd th e moral an d hum an e re as on s fo r op po sin g ad dit io nal ai d to Ca mbo dia, Mr. Cha irm an , th ere a re im pe llin g econ om ic ones, too .

As yo u kno w, my are a of th e co un try— New E ng la nd —i s co nf ro nt ed w ith 

ex ce pt io na lly severe econ om ic har dsh ip s. We fa ce a ri si ng un em ploy men t ra te , 

so ar in g uti li ty ch arge s, and th e dir e th re a t of redu ce d fuel avai la bility com ­

bi ne d w ith exhorb itan t pr ic e hi ke s. Th e peop le h it th e hard est of course, are 

th os e on fixed incom es— th e el de rly, th e sick, and th os e on un em ploy men t.

My const ituen ts in C on ne ct ic ut ’s Six th D is tr ic t w rite me da ily ab ou t th eir 

econ om ic bu rden s. An d ye t, w e a re now be ing as ke d to pr ov id e .$522 mi llio n 

of our ta x mo ney to pr op up co rr upt Asian dic ta to rs . At th e same tim e, we 

a re as ke d to ap prov e th e D epart m ent of A gricu lture 's pl an to ra is e food st am p 

prices. W e’re being as ke d to ap pro ve new en ergy ta xes an d th e re su ltant hig he r 

pr ic es fo r fue l, food , fe rt iliz er , and oth er pet ro le um -r el ia nt pr od uc ts, an d ye t 

th e ad m in is tr ati on ex pe cts us to bea r th e ad ditio nal bu rd en of su pp or tin g 

Thie u and Lon Nol, wh o deny ba sic liber ties to th e ir ow n peop le. Mr. Cha irm an , 

w he re are th e pri orities of th is adm in is tr ati on? Can they re al ly be so blind to 

th e b la ta n t co nt ra di ct io ns of cu tb ac ks an d sp en di ng m or at ori um s fo r the poo r, 

th e elde rly, an d th e infir m in th is Nati on , while si m ul ta ne ou sly pr ov id ing mo re
113

millions of dollars for those who cooperate with the Indochinese r uling generals? There is no mystery as to why i>eople are distrusted, confused, and angered about their Government. After all, they have been victims of a torre nt of Government-sanctioned, prepackaged lies about the events in Southeast Asia— 

and they know’ it. In the tradi tion of the Nixons, the Westmorelands, and the Rostows, our cur­ rent leaders in the executive branch expect us to swallow’ the same old cant about how the leaders in Southeast Asia will c arry on to victory if only we give them a little more aid. a little more arms, a litt le more ammunition. And again, we hear the same old cliches about the domino theory. Mr. Chairman, if the domino theory is at w ork in Southeast Asia, it is at work in reverse. We provide the generals with guns, bullets, and money, but we save our most valuable weapon for the insurgents. We give them their psychological ammunition by our very presence there, thus intensifying their support among the people an d their will to win. Mr. Chairman, many of us would like this to be a “new Congress” in more th an a temporal sense. We campaigned las t fall on the theme tha t Congress must re­ assert its autho rity and responsibility to oversee the actions of the executive branch, to scrutinize Federal programs, and to cut wasteful spending and termi­ nate programs tha t are not achieving thei r stated purposes. No program is more deserving of termination, no fund request more deserving of denial, than the Cambodian aid request. And no congressional action could be more fiscally responsible nor more pat riotic and in th e intere st of self-determina­ tion th an flatly saying “no” to the a dmin istration’s request. Mr. Chairman, I come here today in the same constructive spirit I tried to reflect w’lien I opposed our Cambodia intervention in 1970. I can only hope that these few words will contribute tow’ard a decision on your part, and on the par t of my other colleagues in this body, to reassert our congressional responsibility, and to finally bring to a halt our tragically misguided efforts in Cambodia and 

the rest of Southeast Asia.

Mr. Moffett. Mr. Chairman, let me thank you for the dispatch and 

openness with which you treated my request. I am most appreciative 

of that.

Mr. P assman. Thank you.

Mr. Moffett. I am grateful also for the presence of the gentleman 

from Massachusetts, Mr. Conte, whose district borders on mine and 

whom I have come to respect a great deal in this area of concern as 

well as others. I am here today more than anything else to voice my objections to 

an outmoded foreign policy, one which has been based on lies, misrepresentations, and fantasies. I did it 5 vears ago in resigning a posi­ tion at the Department of Health, Education, and Welfare afte r President Nixon’s so-called incursion, or announcement of his incursion, into Cambodia. I am here again in that same constructive spirit.

T don’t have a great deal to add to what Mr. Leggett and Mr. 

Ottinger said or what Mr. Obey said earlier, except to reiterate some­ thing tha t I feel is happening in my district which is probably not 

unique. I am holding office hours in places like delicatessens, laundro­ mats. and so forth. I am in touch with people there. There is no question but th at people are ang ry about the requests for increased aid and 

angry about aid in general to Southeast Asia. A fellow came up to me w ho had left Germany as Hitler was about to take over, and he said with sorrow in his face, “I came to this country in the 1930’s because we refused to stand behind dictators and w*e went out to fight them, and now I see that we appear to rush to stand 

up behind corrupt dictators.” I am not implying that all the virtue in this situation is on the other 

side. Don’t misunderstand me. But there is no question that we are 

involving ourselves in a civil war there, tha t we continue to involve 

ourselves in a civil war, tha t we continue to be the major facto r in
114

sustaining military activity, and that we continue to be on the side 

of the more repressive factions in the countries. I t’s time to put an end 

to that.

I think you also know from your appearance before the new member group that there is a tremendous interest in oversight, in looking 

at the executive branch. I know, Mr. Chairman, tha t you and the 

members of your committee share th at concern for a tough scrutiny of 

what the executive branch is doing. There could be no more important 

issue. Mr. Chairman, than the one before your committee, through 

which you can demonstrate tha t this is a new Congress in more than 

a temporal sense.

I would only urge that you pick up on the spirit tha t I am sure 

you sensed in those new member meetings, and tha t you not fall prey, 

as the administration T think is hoping that you and your committee 

will, to the imminent possibility tha t the Congress will be blamed as 

the Lon Nol government and the government of General Thieu go 

under.

I would rather that we look upon this as an opportunity to take 

credit, Mr. Chairman, for forging a new direction in our foreign 

policy. Tha t can only come with a decision to give not hundreds of 

millions, not millions, not thousands, bu t not 1 penny more for aid to 

Southeast Asia.

T thank you verv much for having me here.

Mr. Passman. Thank you very much. Congressman Moffett. T want 

to repeat what I have previously said to Mr. Ottinger and Bob Leggett. It’s a great benefit to members of this committee to have the 

views of our colleagues. My dear old late mother made a statement 

one time that I subscribed to, and I hope you do. She said. “Otto, 

there are three sides to all issues—your side, my side, and the right 

side.” I think what we are looking for is the right side. By working 

together we will find the right side. I know th at you want me to be 

responsible.

Of course. I am going to look at both sides of th e coin. I am going 

to listen to all the witnesses, and in the final analysis I will have to 

recommend what I th ink is proper. Wh at t ha t will be I do not know. 

But I can assure you that this is your committee. You are Members 

of Congress. You have the righ t to take me out or leave me in. I do 

want to be responsible. You wouldn’t want me to be otherwise. Maybe 

I will disagree with you, but I will not do so violently. We will disagree, but maybe we will disagree without being disagreeable.

I do want to thank you for your comments. Rest assured that when 

we mark up this bill, they will certainly be considered. Any other time 

that you want to appear before this subcommittee and express yourself on any item that we handle, you will always be welcome, and we 

can always find the time.

Air. Moffett. Thank you verv much.

Mr. Conte. Mr. Chairm an, let me also join you in welcoming Mr. 

Aloffett. Air. Leggett, and Air. Ottinger.

As ATr. Aloffett said, we are neighbors. We have adjoining districts, 

mine in Alassachusetts and his in Connecticut. I am well aware of his 

fine work on behalf of the consumer interests. I know he is going to 

be a verv valuable Arember of Congress, and I am looking forward to 

working with him.
115

Mr. P assman. C er ta in ly I sh ar e thos e se nt im en ts bec ause th is is 

ve ry well in di ca te d by hi s presenc e h ere.

I w an t all of you to coine ba ck as of ten as yo u th in k yo u ca n ma ke 

a c on trib ut io n. T he committee is ad jo ur ne d.

T uesday, F ebruary 4, 1975.

IN C R E A SE D A U TH O R IZ A TIO N FO R IS R A E L, PORTUGAL,

A N D PO R T U G U E SE COLONIE S IN A FR IC A

WITNESSES

HON. JOHN E. MURPHY, DEPUTY ADMINISTRATOR, AGENCY FOR

INTERNATIONAL DEVELOPMENT

* HON. ALFRED L. ATHERTON, JR., ASSISTANT SECRETARY, BUREAU

OF NEAR EASTERN AND SOUTH ASIAN AFFAIRS, DEPARTMENT

OF STATE

HON. JAMES G. LOWENSTEIN, DEPUTY ASSISTANT SECRETARY,

* BUREAU OF EUROPEAN AFFAIRS, DEPARTMENT OF STATE 

ALFRED D. W HIT E, DEPUTY ASSISTANT ADMINISTRATOR, BUREAU

FOR NEAR EAST AND SOUTH ASIA, AGENCY FOR INT ERN ATIONAL DEVELOPMENT

ANDREW WESTWOOD, ASSISTANT DIRECTOR FOR LEGISLATIVE

PROGRAMS, OFFICE OF LEGISLATIVE AFFAIRS, AGENCY FOR IN ­

TERNATIONAL DEVELOPMENT

SHERIDA N BRINLEY, LEGISLATIVE PROGRAMS COORDINATION

STAFF. OFFICE OF LEGISLATIVE AFF AIR S 

ELI BIZIC, OFFICE OF ISR AELI AFFAIRS, DEPARTMENT OF STATE 

EDWARD ROWELL, OFFICE OF IBER IAN AFF AIR S, DEPARTMENT

OF STATE

M r. P ass man. T he comm itee w ill co me t o o rd er .

W e sh all co ns ider th is m or ni ng th e increa se in tw o ite ms pr ov id ed 

fo r in th e F ore ig n Assistanc e Act, 1974. na mely, th e $25 m ill io n fo r 

P ort ugal an d Por tu gu es e Co lon ies in A fr ic a th a t wa s ad de d by th e 

Con gress w ith ou t a bu dg et requ est from th e ad m in is tr at io n an d th e 

increa sed am ou nt fo r Is ra el , wh ich wa s increa se d from $50 m ill ion in 

th e bu dg et requ est to $324,500,000 in th e au th ori zi ng legislation.

Su bseq ue nt to th e he ar in gs , we were to ld th a t th e ad m in is tr at io n 

em brac ed bo th o f t he se amou nts. Is th at co rrec t ?

Mr . M urp hy. Ye s, it is, M r. C ha irm an .

* Mr. P ass ma n. Lot me say as fa r as I am co nc ern ed th at I su pport 

th e increa sed am ou nt fo r Is ra el . It is a sm all na tio n st ru ggli ng fo r 

su rv iv al. I f I re ad h is to ry cor rectly , i t was t h a t gr ea t Pre si den t IT ar ry 

T ru m an wh o reco gn ized Is ra el 10 m in ut es a ft e r th ey de clar ed th eir

» inde pe nd en ce. So we ha ve a re sp on sibi lity th er e th at few pe op le

rec ogniz e. The y ha ve ha d th eir prob lems al m os t since th ey becam e a 

na tio n.

I th in k th e st at is tics will show th at th e ir per ca pi ta in de bt ed ne ss 

ou tside th e con fin es of Is ra el is th e hi gh es t in th e wo rld . I qu es tio n 

w he th er y ou wi ll find in reco rd ed his to ry an y pe op le wh o ha ve mad e 

a gre at er sacrifi ce to pr ot ec t th eir nat io n an d to see th a t it su rv iv es 

th an the I sr ae lis.

I believe y ou d id ans wer in the affir mati ve on bo th o f m y stat em en ts, 

M r. M ur ph y.

M r. Mu rph y. Th at is co rrec t, M r. Cha irm an .
116

Mr. P assman. Of course you know my feeling is long standing. I 

hare never singled out Israel as the only nation I feel we should give 

aid to because the policy statements made by practically every witness 

appearing before this committee indicate tha t U.S. aid applies to 

many nations throughout the world fighting for survival.

I would want the record to show that also.

Xow, it has been customary in the past that where there has been a 

substantial increase in funds there would be an amendment to the 

budget request sent up.

It would be very helpful if you could prevail upon the Director of 

the Budget to amend the budget request for Israel and Portugal.

I again make that request because the administration as you said 

has embraced those increases. Upon tha t basis I think we should have 

an amended budget request.

I believe you are working on that, are you not ?

Mr. Murphy. Yes, we are.

Mr. Passman. I would appreciate that.

We are considering unfinished business of the 93d Congress. We 

will be handling two bills, the one that we are considering this morning 

or part of it which should have been on the statute books as of Jun e 30, 

1974, but the lateness of the authorization bill did not give us sufficient 

time to handle the bill last year. So what we are actually doing is considering unfinished business of the 93d Congress.

After we dispose of this bill we will immediately come right back 

into session and start our hearings on the foreign aid bill for fiscal 

1976.

Xow we have this morning as witnesses the Honorable John E. 

Murphy, Deputy Administrator, Agency for Internationa l Development; the Honorable Alfred L. Atherton, Jr. , Assistant Secretary, 

Bureau of Near Eastern and South Asian Affairs, Department of 

State: th e Honorable James G. Lowenstein, Deputy Assistant Secretary . Bureau of European Affairs, Department of State; and other 

witnesses.

I would assume, Mr. Murphy, that you would like to make a statement at this time.

We will be happy to hear from you.

General Statement

Mr. Murphy. Thank you. Mr. Chairman.

Mr. Chairman and members of the committee, I appreciate this opportunity to appear before your subcommittee to testify on behalf of 

several portions of the Foreign Assistance Act of 1961, as amended, 

which were not fully covered in hearings last year. In particular, I will 

cover economic assistance for Portu gal and its overseas territories, and 

the increased sums for Israel. The issues involve a wide range of both 

political and economic matters. I am accompanied by Assistant Secretary Atherton and Deputy A ssistant Secretary Lowenstein of the Department of State who will be able to discuss and elaborate on these 

programs.

PORTUGAL AN D OVERSEAS TERRITO RIES

Portugal has undergone significant internal changes during the past 

year which are of great importance to U.S. foreign policy. The simul-
117

taneous political liberalization at home and rapid decolonization of Portugal’s African territorie s have created substantial political and economic strains. The new government also is developing economic policies to fulfill its pledge to create equity for the lower strata of Portuguese society. Elections for a constituent assembly are expected to take place in April—the first free elections in nearly half a century. We endorse these goals of our strategically located NATO ally. Our help is needed now d urin g this most difficult transition period. We support the prompt and forthcoming congressional initiatives in authorizing $5 million in gra nt funds and $20 million in loan funds for Portugal and the overseas territories which have recently or will soon achieve independence. We ask the Congress to appropriate the 

total amount authorized. A technical team is now in Lisbon discussing program priorities and projects with the Portuguese on an urgent basis. Several measures have already been announced under presently existing authorities, including the availability of up to $20 million in housing investment guaranties. In recent talks in Lisbon, the Portuguese have said they are interested in financing for detailed project studies in areas such as agriculture and tran sportation, help in establishing integrated com­ munity health services and short-term technical consultants and training in specialized development fields. Ambassador Carlucci also is consulting with the Portuguese on appropriate aid for the African territories. Mozambique, which be­ comes independent June 25,1975, face a difficult transition amid major economic difficulties. Mozambique has already requested U.S. assist­ ance, and a technical team will arrive shortly to examine the needs. There has been serious disorganization of the economy over the past several years. The turmoil has hampered investment, both local and foreign, and has left Mozambique with foreign exchange reserves vir­ tually exhausted, acute balance of payments of problems and pressing 

food shortages.

ISRAEL

Last spring the administration requested $50 million in economic as­ sistance to Israel. Since we formulated the request, significant changes have taken place in Israel’s balance of payments situation. Isra el’s foreign exchange reserves have fallen by over $800 million due to sharp ly rising import prices and the internal economic pressures resulting from the heavy defense burden tha t must still be carried. Foreign exchange reserves now stand at about $1 billion, which is barely enough to pay for 2 months of military and civilian imports, or roughly 4 to 5 months of civilian imports alone. Israel's balanre-of- payments deficit has worsened. This deficit has grown by over 40 percent to an estimated $3.5 billion. Reacting to these pressures, Israel introduced drastic austerity measures. There has been a substantial devaluation. Taxes and cus­ tom duties have been increased, to lead to increased prices for a broad spectrum of consumer and essential goods in order to restrict con­ sumption and raise revenues. Compulsory and voluntary war loans have been established. On a per capita basis, some 63 percent of national income now goes for taxes. This is believed to be the highest 

per capita tax burden in the world.
118

Congress increased the administration’s request to $324.5 million for 

economic assistance to Israel in the Foreign Assistance Act passed last 

December. When this increase was introduced, Secretary Kissinger 

said the increase will help Isra el to maintain financial equilibrium. 

To help meet urgent import needs, A ID has developed a $150 million commodity import gra nt covering such essential needs as chemicals, medical supplies, plastics, rubber products, paper products, textile yarns, and transp ortation equipment. The use of remaining funds 

covered by the authorization to help strengthen the Israeli economy 

is now being explored.

in an aside I should emphasize tha t these imports are all from

the United States.

It was clearly apparent before the authorization bill was voted 

tha t a substantial increase over our original request was warranted. 

Although we cannot project exactly what Israel's economic position 

will be by midyear, th e Israeli economy has been under great pressure 

this year. The amount Congress has authorized is needed and we are 

confident that the funds will be put to good use. We therefore support appropriation of the fu ll amount.

We, of course, continue to support appropria tion of the full package requested for the Middle East Arab countries.

Mr. P assman. Thank you, Mr. Murphy.

PROTOTYPE DESALTING PLANT

There is one item that has been carried on the books for many, 

many years. That is the desalting plan t appropriation of $20 million 

for Israel. I believe tha t has remained dormant for 5 or 6 years 

but it has not been deobligated. Is there some reason to continue it 

indefinitely when there is no prospect for it being spent ?

Mr. Murphy. We still have hope that the technical difficulties can 

be overcome and tha t this project can go forward.

We are working on that and we expect tha t something can he 

worked out. When the join t Israel-United States Commission meets 

in the near future, there is likely to be an announcement of our willingness to pursue desalting efforts.

Mr. Passman. It is a dorm ant account tha t has been carried for 

many years.

Mr. Murphy. Yes, sir.

RESCISSIONS AND DEFERRALS

Mr. Passman. Can you tell the committee the total amount of your 

rescissions for all aid programs throughout the world specifically?

Mr. Murphy. Item bv item. Mr. Chairman, on Indochina-----

Mr. Passman. I am not talk ing about deobligations. I am talking 

about purely cancellations because of no need for the funds or because it did not have a high prior ity. Do you know of any?

Mr. Murphy. I would have to search the record.

Mr. P assman. None has been presented to the Congress.

Mr. Murphy. That, is correct.

Mr. P assman. IIow about deferrals officially presented to the 

Congress?
119

Mr. Murphy. There have been some but I would have to search the 

record. I could not read them off one by one.

Mr. Passman. Do you know of any other than the $20 million desalting plant? Mr. MuRpnY. You mean for the desalination project ?

Mr. P assman. Yes.

Mr. Murphy. We have had a history of some loans that have taken 

an inordinate amount of time to execute.

Mr. P assman. But there have been no rescissions or deferrals.

Mr. Murphy. No, sir, there have not.

Mr. P assman. Thank you for your very frank answer.

ASSISTANCE TO ISRAEL

Of course, I am in support of an increased amount over the budget 

request for Israel. Will most of it be spent for U.S. commodities? Mr. MuRrHY. The first $150 million will be and some additional 

amount will also, but until we sit down and actually have a chance to program the amount out with the Israelis when the final decision of Congress is made known, I cannot, of course, give you a precise figure. 

But it would be my expectation that the majority of the money will 

be used for that purpose.

ASSISTANCE TO EGYPT

Mr. P assman. I notice th at you make it all inclusive with respect to 

the amount authorized bv the Congress for fix' Middle East. I believe under the continuing resolution you are able to move at the rate of $150 

mil 1 ion for Egypt ?

Mr. Murphy. Yes, sir.

Mr. Passman. Have you obligated any part of that ?

Mr. Murphy. No, sir. W e expect within a few days to sign the first 

loan which also will be for commodity imports from the United States 

and will amount to $80 million. In addition with respect to the projects in the Suez area we have two 

th at are pretty well along but they have not yet been signed.

Mr. P assman. Of course, the administration supports the entire authorization of $250 million.

Mr. Murphy. For E gy pt ; yes, sir.

Mr. Passman. Under the amount for Israel, what has been the total 

amount obligated thus far?

Mr. Murphy. $150 million, the full amount allowed under the continuing resolution.

MIDDLE EAST SPECIAL REQUIREMENTS FUND

Mr. P assman. Now with respect to the $100 million authorized for 

the special requirements funds for the Middle East. I notice in the paper where you contemplate obligating $25 million to Syria.

How far has that advanced ?

Mr. Murphy. We have engaged in initial talks with the Syrians, Mr. 

Chairman. We have suggested or tentatively agreed on a program which would include $20 million worth of imports from the U nited States fo r agri-
120

cultural products, machinery, tools, perhaps some insecticides, and 

things like that.

Mr. Passman. Any fertiliz er ?

Mr. Murphy. I don't believe it will be a major item.

Mr. Passman. This has not been finalized.

Mr. Murphy. No, sir, but we have sent notification to the Congress 

including one to you, sir, of our intent to proceed with the obligation.

Mr. Passman. But it is on a tentative basis and nothing has been 

finalized?

Mr. Murpiiy. That is correct.

Mr. Passman. We are getting along in this fiscal year. When we 

handle this bill you will have only about 4 months to go.

Mr. Murphy. That is right.

That puts a premium on our having no year funds for this special 

account.

Mr. Passman. Of course, the Congress has never looked with too 

much favor on no year funds. I am not too sure they will this year. 

Of course, that decision will be made by the committee.

Operating on a 1 year basis has been very satisfactory in the past, 

has it not ?

Mr. Murpiiy. Yes, sir.

Mr. Passman. I believe the administration over the years has alsoasked for us to take off the 1 year limitation and asked us to open it 

up at both ends. I expect you to make that request. It is par for the 

course.

Mr. Murpiiy. This is aai unusual situation.

Mr. Passman. I believe you have said this in the past. All these 

things are unusual. I yield to Mr. Shriver.

SECURITY ASSISTANCE FOR ISRAEL

Mr. Shriver. Relative to Israel, what was the final breakdown of the 

$2.2 billion package to that country last year ?

You did not have the figures in regard to how much was grant 

money and how much was loan money when we had our hearings.

Mr. Murphy. The precise figure was $2,182.7 million. Of that $1.5 

billion was grant, repaym ent of tha t was waived. So the difference 

of $682.7 million was loan.

Mr. Obey. Could you repeat that ?

Mr. Murphy. The whole statement ?

Mr. Obey. The last sentence.

Mr. Murphy. $682.7 million of the approximately $2.2 billion was 

loan and $1.5 billion was grant.

Mr. Shriver. What is the difference then ?

Mr. Murphy. It was all for military sales, Mr. Shriver.

Mr. Shriver. Does tha t add up then ?

Mr. Murphy. Yes. The $1.5 billion grant and $682.7 million loan 

adds to the total of $2,182.7 million.

Mr. Shriver. Really, we don’t have very much information in your 

statement as to how this additional money is to be used.

Portugal’s importance

You stress the strategic location of Portugal to our own national 

interests. What are those national interests ?
121

Mr. Murphy. Of course, as you know Portuga l is a member of 

NATO and, therefore, aligned with the United States in security arrangements for both the benefit of Europe and the United States.

Mr. Shriver. II ow much have we given to them in prior years?

Mr. Murphy. Over the years for Portugal, I have the totals here, 

economic assistance, our loans and grants have totaled $159.9 million and military assistance, $344.8 million, the grand total, $504.7 million.

Mr. Shriver. But nothing much lately.

Mr. Murphy. No, Mr. Shriver.

Mr. Conte. Will you yield ?

Mr. Shriver. Yes.

Mr. Conte. Most of that was for base rights, is t hat correct?

Mr. Murpiiy. That certainly was a consideration.

SOVIET REQUEST FOR BASE RIGH TS IN PORTUGAL

Mr. S iiriver. W hat is the latest you have with regard to the reports 

that the Soviet Union has requested similar base rights from the new 

Portuguese Government ?

Mr. Murphy. 1 would like Mr. Lowenstein to answer that if I may, 

Mr. Shriver.

Mr. Lowenstein. Congressman, the Portuguese Government has denied the reports in the press tha t the Soviet Government has requested 

rights for their fishing fleet to call. As I say, they have denied those press reports and we have no independent information to indicate whether the press reports are correct. 

But those reports did not refer to military base rights, but to rights for 

the fishing fleet.

Mr. Shriver. It has extended further than that in the reports we 

have read in the press.

Mr. Lowenstein. Some newspapers have speculated further but I 

think the original press report was about a request for fishing rights.

The Government's denial responded to tha t point.

U.S. IN TE RE ST S AND PORTUGUESE COL ONIES IN AFRICA

Mr. Siiriver. W hat do you consider our national interests in connection with Mozambique and the colonies you mentioned in your statement ?

Mr. Murphy. We believe firmly that a peaceful world is going to 

depend on the hope in all of the developing countries for reasonable

* development.

Mozambique is another less developed country in Africa or will be 

on Ju ne 25 when it achieves its independence. Our interest there will 

parallel our interest for other countries in Africa such as Ghana,

• and Liberia.

Mr. Shriver. We have not been extending aid to those former 

colonies ?

Air. Murpiiy. No, sir, nor in this fiscal year is it likely th at we could 

extend any directly to Mozambique because as I said earlier it would 

not even be independent until June 25. So anything we do for Mozambique will have to be done through 

Portugal.
122

ASSISTAN CE TO THE COLONIES

Mr. S hriver. Do you know of other countries th at are extending aid 

to those colonies?

Mr. Murphy. No.

I think we have reason to believe, however, that there will be oth er 

countries that might be willing to extend aid.

Mr. Shriver. Such as?

Mr. Murphy. Such as perhaps Russia. Small amounts have come 

from Norway and other Scandinavian countries and agreements have 

been signed with Romania, Bulgaria, and Eas t Germany.

Mr. Conte. Will you yield?

Mr. Shriver. Yes.

Air. Conte. There has been aid to Mozambique and Angola from 

China and Romania and some of the socialist countries. They have 

given a lot of arms to Mozambique.

Mr. Shriver. Thank you, Mr. Chairman.

Mr. P assman. Air. Long?

ASSISTAN CE TO ISRAEL AND ARAB NEIGH BOR S

Air. Long. The authorized request for Israel for security-supporting 

assistance and for foreign military credit sales comes to about $625 

million; is that correct?

It is $324.5 for security-supporting assistance and $300 million for 

the foreign military credit sales program, roughly two-thirds of a 

billion.

Air. AIurpiiy. Yes, sir.

Air. Long. Now I would like to find out i"ust what the United States 

and other countries are giving to Egypt, Syria, and Jordan.

I would like to ask you whether these figures are correct.

Fo r fiscal year 1973, grants of U.S. military and economic aid—for 

Egy pt, $250 million; Syria, $100 million; Jordan, $178 million—coming to $528 million for those three countries.

Air. AIurpiiy. Yes, sir. but I would like to emphasize that there is no 

military assistance for Egy pt. The $250 million for Egypt is solely for 

economic assistance.

Air. Long. I said economic and military. I do not draw too fine a 

distinction because I think when we help them economically we liberate resources which they can use for military purposes.

Air. AIurpiiy. Correct.

Air. Long. US. Public Law 480, food aid, $78 million for Egypt 

and Syria together. Then the Arab oil producers have pledged to these 

three countries—$500 million for Syria, $500 million for Egypt, and 

$60 million for Jordan—coming to $1,160 million.

Now, the total of these three types of aid to these three countries 

bordering Israel tha t they are getting from the United States and 

Arab oil producers—and, incidentally, tha t is kind of our money, too, 

in a way—comes to $1% billion. Tha t is roughly three times what 

Israel is getting from us.

Is that correct ?

Air. AIurpiiy. That is righ t, sir.
123

Mr. Long. Now. in addition to this, isn’t it true tha t the Soviet 

Government has given very large resupplies of arms to Egypt and 

Syria since the October war?

Mr. Murpiiy. Certainly to Syria.

Mr. Long. I understand Eg ypt is not getting very much at this 

time but she did get very large resupplies immediately after the Yorn 

Kip pur wa r; is that not true?

Mr. Murphy. Yes, sir; tha t is my understanding.

Mr. Long. In addition to this, Syria is getting aid for the Euphrate s 

Dam from the Soviet Union as well as for other economic projects.

NIr. Murphy. That is correct.

Mr. Long. So three times as much aid has gone to these three Arab 

countries from the United States and other sources as we are proposing 

to give here to Israel; isn't tha t correct ?

Mr. Murphy. Yes. sir.

Air. Long. Wouldn’t you agree tha t this aid to Israel has to be 

viewed in that context?

Air. Murphy. Secretary Atherton, would you like to respond to that ?

Air. Atherton. I will be glad to.

I thin k we always look a t the needs of each of these countries, of 

course, first of all in terms of the requirements of the country and 

how we might help. But in regard particularly to the aid to Israel, 

we certainly do keep in mind the fact th at it has really no other source 

of assistance than the U nited States whereas these other countries do.

We certainly take into account this fact in our economic assistance 

programs for Israel.

Air. Long. I compiled some data earlier last year which I would 

like to p ut in the record again, which shows tha t over the 6 years since 

the 1967 war we have given 2i/£ times as much aid to the Arab countries in explicit economic aid, military aid, and invisible aid in terms 

of our tax credits to the corporations which pay royalties into the 

Arab treasuries as we gave to Israel in the same period. Thus, the 

frequent charge tha t we are giving too much to Israel, tha t Israel is 

a client state of the United States, has certainly been vastly exaggerated and has to be viewed in this perspective.

[The information follo ws:]

Summary table comparison of U.S. assistance and Russian assistance to Arab

nations, 1968-73, and of U.S. assistance to Israel, 1968-73

[I n mill ions o f dollar s]

A. U.S. assistanc e to A rab n at io ns :

1. U.S. arms supplies, economic aid. and U.S. sha re of mu ltilateral

aid (28 percent) , fiscal yea r 1968-fiscal ye ar 1973 (table 1 )___ 1, 927

2. U.S. “invisible foreign aid” to Arabs—tax credits for Arab

roya lties (table I I ) _____________________________________ 7,025

Total. U.S. assistance to Arab s_________________________ 8, 952

B. Soviet assistance to Arab nations :

1. Soviet arms supp lies—no t including Soviet arms resupply during

and after Yorn Kippur war (tab le I I I ) ____________________ 2. 603

2. Soviet economic a id—with estimated figure for 1973 (tab le V )__ 1,104

Total, Soviet assistance to Arabs_______________________ 3,707
124

Summ ary table comparison of U.S. assistance and Russia n assistance to Arab

nations, 1968-73, and of U.S. assistance to Israel, 1968-73—Continued

C. Comparison of United States and Soviet assistance to Arabs, 1968-73:

U.S. assistan ce to Arabs, $8,952, over Soviet aid to Arabs, $3,707— 2. 4

Thus, total U.S. a ssistanc e to Arab s (1968-73) was 2.4 times tota l

Russian assistance to the Arabs over the same period.

D. Total, U.S. direct and private assistanc e to Israel, 1968-73 (tab le IV) :

U.S. private assistance______________________________________ 1. 807. 5

U.S. private funds_________________________________________ 2, 000. 0

Total to Isr ael_________________________________________ 3, 807. 5

1. U.S. plus Soviet assistance to Arabs (1968-73) =$12,659 million.

2. Thus, U.S. plus Soviet assista nce to the Arabs (1968-73) was more than 

thr ee times tota l U.S. assistance to Israel over the same period.

3. U.S. assistance to the Arabs was more tha n twice U.S. assistance to Israel 

in the period between the last two M ideast wars (1968-73).

TABLE l. -U .S . ARMS SUPPLIES, U.S. ECONOMIC AID, ANO MULTILATERAL AID TO 11 ARAB NATIONS, FISCAL 

YEARS 1968-73 *

[Figures in millions of dollars]

Country Arms

Economic

aid

Share of 

multilate ral 

aid

Total

direct

assistance

Jordan ...................................................... _________ _____ $370.5 $73.8 $12.3 $453.6

Saudi Arab ia___________ ___________ .............. .............. 302.7 25.4 1.3 329.4

Libya.................... ..................................... _______ _______ 65.2 4.3 1.2 70.7

Morocco......... . .......................................... ............................. 39.4 315.3 70.4 425.1

Tunisia........................................................ ____ ____ _____ 17.7 272.5 51.5 341.7

Sy ria .............. .......................................................................... 3.7 1.0 11.8 16.5

Ira q................ ............................................ ............................. 1.8 1.5 38.6 41.9

Ku wa it.................................. . ................... ______ ________ 1.2 0 .5 1.7

Egypt--................ ...................................... ............................. .7 104.6 36.3 141.6

Algeria______________ ____ ________ ________ ______ .1 42.4 14.7 57.2

Sudan......................................................... ............................. .1 26.8 17.4 44.3

To tal................................................ .............. .............. 803.1 867.6 256.0 1,926.7

1

 Multilateral aid figures are from fiscal years 1968-72 with figures for the World Bank/IDA thro ugh fiscal year 1973.

Note: Iran is not included in these figures because although it is a Moslem state it is a non-Arab state and did not 

particip ate in the recent Mideast conflict. It should be noted, however, that Iran has maintained a hard-line policy on oil 

prices and supply. Lebanon is not included as it has not been a particip ant in the most recent conflicts.

Sources: (1) U.S. arms supp lies: (a) "U.S. Overseas Loans and Grants,” July 1, 1945-June 30, 1972; AID publication 

(May 1973); fo r security supporting assistance and military assistance (MA P) funds, fiscal years 1S68-72. (b) "M ilita ry 

Assistance and Foreign Milita ry Sales Facts." May 1973, Department of Defense; for fiscal years 1968-72 deliveries of 

governm ent-to-government cash and cred it arms sales; pp. 21-22. (c) Congressional Liaison, Department of Defense; 

for commercial arms sales deliveries, fiscal years 1968-73 and fiscal year 1973 foreign military sales (FMS) deliveries, 

(d ) "Senate Hearings on Foreign Assistance and Related Programs Appropriations, fiscal year 1974,” pt. II, pp. 1333— 

1386; for military assistance program (MAP) funds and sec urity supp orting assistance funds for fiscal year 1973. (2) U.S. 

economic aid : (a) "U.S. Overseas Loans and Grants, July 1, 1945-June 30, 1972," cited in (lX a ); for all figures through 

fiscal year 1972. (b ) “ Senate Hearings . . . fiscal yea r 197 4," cited in (l) (d ); for economic aid for fiscal year 1973. (3) 

Multilateral aid (U.S. share) (a) "U.S. Overseas Loans and gra nt s, . . . ” cited in (l) (a ); pp. 177-196, fo r fiscal year 1968— 

72. ( b) "W orld Bank/IDA Annual Report, 1973,” fo r World Bank/IDA fiscal year 1973 figures, (c) “ Senate Hearings. . . 

Fiscal Year 197 4," cited in ( l) (d ), p t 2, p. 1435; for U.S. share in World Bank/IDA.

Table II.— Estimate of foreign tax credits claimed by U.S. oil companies fo r Arab

oil royalties to Libya, Iraq, Ku wa it, and to Saudi Arabia (1968-78)

1. Foreign tax credits claimed by U.S. oil companies for oil roya lties to 4 Arab 

countries in 1968:

Libya ____________________________________________________

Ira q _____________________________________________________

Kuwait __________________________________________________

Saud i A ra bia ______________________________________________

Millions

$262. 37 

14. 97 

182. 01 

443. 54

Tot al _____________________________________________________ 1 902. 89

1

 S9O3.000.000 is 56 percent of total foreign tax credits claimed in 1968 by U.S. oil 

companies ($1,609,360,000).
2. Estima te of foreign tax credits claim ed by U.S. oil companies for royalties to four Arab countries above—1968-73: (a) Take 1968 figure of $903,000,000; 

(b) take 56 percent of total foreign tax credits claimed by U.S. oil com­ panies, 1969-71 (total figures from IRS ) ; (c) use 1971 figure for 1972-73; 

and (d) thus tota l— ' ' Ji i l l m i m

196S (56 percent of $1.609)---------------------------------------------------------$.903 1969 (56 percent of $1.779)------------------------------------------------------- .996 1970 ( 56 percent of $1.820)------------------------------------------------------- 1.019 1971 (56 percent of $2.444)------------------------------------------------------- 1.369 1972 _______________________________________________________ 1- 369

1973 ________________________________________________________ 1-369

Total _____________________________________________________7.025

S o u rc e: “ T ax at io n of In co me of M ultin at io nal C o rp o ra ti o n s: Th e Cas e of the U.S. Pet ro le um In d u str y ,” Gl enn P. Je nkin s an d Bri an D. W righ t, H arv ard U ni ve rs ity, Ja n u ­

ar y 1974, an un pu bl ishe d m an usc ript.

TA X CR ED ITS A S FO RE IGN AID

1. U.S. t ax credits for royalties paid to Arab governments have enabled Ameri­ can oil companies to continue high levels of investme nt in the Aral) oil state s. This investment has led to higher levels of production, and wtili gre ate r reliance by the West on Middle Ea st oil, has greatly increased Arab oil revenues. A differe nt U.S. tax policy would have encouraged more development of domes­ tic resources and would have averted increased dependenece on imported oil.

2. In fact, it is probable that the United States encouraged these massive in­ vestments in Arab oil countries by helping the Arabs write appro priate tax laws. 3. These U.S. tax cred its for royalties paid to Arab governments divert dollars from the U.S. Treasury to Arab trea suries through American oil companies There is no incentive for American firms to resist Arab royalty increases, as an incre ase in royalties may help shield from U.S. tax es the companies’ other foreign operations.

A. II O W FI GU RE OF TO TA L R U SS IA N AR MS SU P P L IE S TO ARAB N A TIO N S, 1 9 6 8 - 7 3 , 

W A S ARR IVED AT

Table I lf .— Russian arms supplies to Arab nations 1968-73

1. From table II I of ACDA report, obtained proportion of tota l arm s imports 

(1961-71) by each country th at were supplied by Russia : Perce nt

Egypt—$2,080,000,000 Russian arms out of $2,197,000,600 tota l arm s. . 90 Syr ia—$388,000,000 Russ ian arms out of $443,000,000 to tal arm s_____ 88 Iraq —$632,000,000 R ussian arms out of $760,000,000 total arm s_____ 83 Libya*—$60,000,000 Rus sian arms of $210,000,000 tota l arm s_______ 29 Morocco—$10,000,000 Ru ssia n arms out of total arms of $125,000,000-_ 8 Algeria—$286,000,000 Russian arms out of $311,000,000 to tal a rm s___ 92 Sudan—$63,000,000 Russian arms out of $136,000,000 total arm s_____ 46 Jor dan—No Rus sian arm s out of $289,000,000 total arms__________ Sandia Arabia—No Russia n arms out of $322,000,000 tota l arm s___ Tunisia—No Russian arm s out of $46,000,000 total arms__________ Kuw ait—No Rus sian arm s out of $46,000,000 tota l arms__________

So urce : U.S. Ar ms C ont ro l and Disar m am en t Agency re port , “ Th e In te rn ati o n al T ra n s­ fe r of Con ve ntio na l A rm s.” (a re p o rt to th e Co ng ress p u rs u an t to sec. 302 of th e For ei gn R el at io ns A uth ori za tion Ac t of 1972 (P ub lic La w 9 2 -3 5 2 )) , Sep te m be r 1973.
126

2. From Table II in ACDA rei>ort, took total arms imports from 196S-71 anil 

divided by 4 to obtain annual average of arms impo rts by country. Then m ultiplied country annual ave rage by 6 to estimate tota l arm s Imports to each country for 1968-73 from all supplies. Finally, multiplie d estim ated tota l arms 

impo rts (1968-73) for each country by proportion of tota l arms flows to each 

country from 1961-71 th at were Russian to obtain estimated tota l Russian 

arms flow (1968-73) to Arab countries :

M ill io ns

Egy pt ----------------------------------------------------------------------------------

I r a q ______________________________________________________

S y ria _____________________________________________________

Libya _____________________________________________________

Algeria ____________________________________________________

Morocco___________________________________________________

Sudan _____________________________________________________

375

324

77

94

4

50

Total ___________________________________________________ 2,603

Table IV.— U.S. arms supplies, U.S. economic aid. multila tera l aid, and private

fun ds to Israel, 1968-73 1

M ill io ns

A. U.S. direct contributions to Israel, 1968-73 :

U.S. arms supplies (prio r to the Tom Kippur w ar) ___________ 81,352. 6

U.S. economic aid________________________________________ 420. 5

U.S. share of m ultilate ral aid (28 perce nt) 2___________________ 34. 4

T o ta l--------------------------------------------------------------------------- 1. 807. 5

B. Bond purchases and p riv ate contributions by U.S. citizens to Israel,

1968 -73: 3 Israeli bond purchases by U.S. citizens 1968-73_______ 1. 294. 0

Pri vate contributions by U.S. citizens to Israel, 1968-72

(UJA) _________________________________________________ 706.0

Tota l bond p urchases and priv ate contributions______________ 2, 000. 0

C. Total U.S. direct and private assistance to Israel, 196S-73 :

U.S. direct assista nce _____________________________________ ], 807. 5

U.S. priv ate funds________________________________________ 2. 000. 0

Total to Israel_________________________________________ 3. 807. 5

1

 F ig ure s fo r U.S. ar m s su pp lies , eco nom ic aid, an d m u lt il ate ra l aid fro m World B a n k / 

ID A ar e fo r fisc al ye ar s 19 68 -7 3.

2

 T ota l m u lt ilate ra l ai d to Is ra el, 19 68 -7 3 eq ua ls $12 2,7 00,00 0.

3

 F ig ure s fo r bond purc has es are fo r ca le nd ar ye ar s 19 68 -7 3. Fig ure s fo r pri vate co ntr ib u ti o n s ar e fo r 19 68 -7 2 an d are de rive d from a to ta l of $1 ,05 3,0 00 ,00 0 in co nt ri bu tion s 

fo r pri vat e grou ps of Je w s in 26 co un trie s. Ac co rd ing to th e U nited Je w ish Ap peal, Is ra el 

has received ro ug hly tw o-t hir ds of t h is to ta l, or $ 70 6,0 00,00 0.

So urce s fo r A : Same a s th os e ci te d fo r ta bl e I.

So urce s fo r B : (1) F or Isra e li bo nd pu rc ha se s, Is ra el Bo nd Office, New York C it y ; 

(2 ) F o r pri vat e co ntr ib ut io ns , U ni te d Je w ish App ea l (U JA ), New Yo rk City.
127

Table V.—Sov ie t ec on om ic aid to Ar ab co un tries, 196 8-73

M ill io ns

Alger ia ________________________________________________________________ $189

Morocco 44

Sud an _________________________________________________________________ 42

E g y p t__________________________________________________________________ 19ft

Ir aq ___________________________________________________________________ 36 5

Syri a __________________________________________________________________ 84

K uw ait ________________________________________________________________ 0

L ib y a __________________________________________________________________ 9

Sa ud i A ra bia ___________________________________________________________ 9

Jo rd an _________________________________________________________________ 9

T unis ia ________________________________________________________________ 0

T ota l (1 96 8- 72 )__________________________________________________ 920

E st im ate d 1973 So viet econom ic a id -------------------------------------------------------- ’+1 84

T ota l So viet econom ic ai d to A ra bs , 1968- 73______________________ 1,1 04

1

 197 3 So vi et econom ic ai d to A ra bs w as es tim at ed by di vi di ng to ta l So vi et eco nomic aid to Arabs , 19 68 -7 2 by 5 to obta in annual av erag e. The annual av er ag e ($18 4,00 0,00 0) was ad de d to th e 19 68 -7 2 to ta l to obta in to ta l R us sian econ om ic ai d to Ara bs , 196S -73.

S o urc e: “C om mun ist S ta te s an d D ev elop ing Cou nt ries : Aid an d T ra de in 19 72,” S ta te 

D ep ar tm en t, Bur ea u of In te llig en ce an d Res ea rc h, ta ble 2.

U.S. Ass is ta nc e to th e Arabs, 190 8-73

I. S u m m a ry of th e D ata

A. INTRODUCTION

U.S. fo re ig n policy in th e Middle E ast has no t bee n w hat it ap pea re d to he. As 

th e figu re s th a t I am pre se nting to you wi ll show , th e U ni ted S ta te s prov ided 

more as si st an ce to th e A ra b arm s bu ild up th a t pr ec ed ed th e Octob er 1973 Yorn 

K ip pur w ar th an di d th e R uss ia ns, ge ne ra lly th ought to be th e pr in ci pal A ra b 

su pport er .

Tak in g th e 11 A ra b countr ie s th a t par ti cip ate d in som e way in th e Yorn K ip pur 

w ar (J ord an, Sau di A ra bi a, Lib ya , Morocco, T unis ia , Sy ria, Ir aq, K uw ai t. Eg yp t, 

Algeria, an d th e S udan), on e fin ds th a t from 196S to 1973 (p ri o r to th e Yorn 

K ip pur w ar) to ta l U.S . ass is ta nce to th e A ra bs was 2.4 tim es to ta l R uss ia n 

ass is ta nce to the Ara bs ov er th e sa m e period.

B. DIRECT U.S. CONTR IBUTIONS TO THE ARAB ARM S BUILDUP— 1 9 6 8 -7 3 . TOTAL DIRECT 

CO NTRIB UTIONS = $1 ,9 2 7 MILLION (TABL E I)

1. U.S . ar m s su pp lie s (s ee ta bl e I )

Fro m fiscal y ear 1968 to fis ca l yea r 1973, U.S . ar m s su pp lies to Ara b co untr ie s 

to ta le d $803 million. In cl uded ar e fig ures fo r th e m il it ary ass is ta nce an d se cu ri ty 

su ppo rt in g as si st ance pro gra m s an d fig ures fo r de live ries of ar m s sales.

2. U.S. bilatera l ec on om ic ai d to the Ara bs (tab le I)

Fro m fiscal y ear 1968 to fiscal year 1973, U.S. b il ate ra l eco nomic ai d to th e 

A ra bs am ou nt ed to $868 mill ion. Thi s econ om ic ass is ta nce ca me from A ID pr ogr am s, th e foo d fo r pe ac e pr og ra m. E xport -I m port B an k loan s, an d oth er official 

loan s.

3. U.S. sh ar e o f m ultil ate ra l ai d to the A ra bs (tab le I)

Tot al m ult il ate ra l aid to th e A ra bs from fiscal y ear 1968 to fisc al y ear 1973 

w as $914 mi llion . Mos t o f th is ai d ca me fro m th e W or ld Ban k an d th e In te rn a ­

tiona l Dev elop men t A ss oc ia tio n (I D A ) in which th e U.S . sh are was 28 pe rc en t. 

The re fo re , th e U.S . sh a re o f m u lt il ate ra l aid to th e A ra bs was es tim at ed to be 

$256 mi llio n, or 28 per cent of th e to ta l.

C. INVISIBL E U.S. FOR EIGN AID TO ARAB COU NTR IES— TAX CREDITS CLAIMED BY 

AME RICAN OIL CO MP AN IES ON ARAB OIL ROYA LTIES, 1 9 0 8 -7 3 ( SEE TABLE I I )

1. Tota l ta x cre dit s claimed by U.S . oil co mpa ni es on ro yal ties to A ra b oil 

pr od uc er s from 1968 to 1973 are est im at ed to hav e been $7,925 billion .
128

1 his $7 billi on es tim at e is pr ob ab ly low. Fir st . A ra b oil pr od uc tion ha s jum pe d 

sh ar pl y sinc e 1908. Th us. 50 per ce nt , as th e es tim at ed p a rt of to ta l foreign ta x 

cre dit s claimed by American oil co mpa ni es th a t go to A ra b oil pr od uc er s, ma y 

well lie low. Second , both oil pr ic es an d the ta ke pe r ba rr el by A ra b go ve rn m en ts 

ha ve ju m pe d co ns iderab ly sin ce 1971. The re fo re , fo re ig n fa x cre dit s cla im ed by 

Amer ican oil co mp an ies fo r A ra b ro ya ltie s in 1972 an d 1973 sh ou ld be su bst antial ly hi gh er th an th e 1971 level. How ev er, the 1971 lev el of fax cre dit s was used 

to e st im at e “inv isib le foreig n aid ” to th e Arabs f or 1972 a nd 1973.

Que sti on . Are the F.S. ta x cre d it s fo r Arab oil ro yal ties “i nv isib le fo re ign 

ai d ' or sim ply p art of a hig her pr ic e per b ar re l wh ich tin* United S ta te s is will ing 

to pa y fo r Ara b oil ?

Re spon se. 'I h e I .8. sy stem of do llar -f or -d ol la r ta x cr ed its fo r ro ya ltie s pa id 

to A ra b go ve rn m en ts ha s en ab le d American oil co mpa nies to co nt in ue high 

lev els of in ve stm en t in th e A ra b oil st at es . Thi s in ve st m en t has led to hi gh er 

lev els of p ro du ct io n an d. with g re a te r re lian ce by th e W est on .Middle E ast oil, ha s 

gre atl y in cr ea se d Arab oil reve nu es .

A di ff er en t 1 .S. ta x policy wou ld ha ve en co ur ag ed more de ve lopm en t of 

do mes tic reso ur ce s an d wo uld hav e aver te d in cr ea se d de pe nd en ce on im po rted 

oil.

In fa ct , it is possibl e th at th e U ni te d Sta te s en co ur ag ed th es e mas sive in ve st ­

m en ts in Arab oil co un trie s by he lp in g th e A ra bs w rite appro pri ate ta x law s.

The se F.S . ta x cr ed its fo r ro yalt ie s pai d to Arab go ve rn m en ts div er t do llar s 

from th e F.S. T re as ury to Arab tr easu ri es thro ug h th e American oil co mp anies . 

Ther e is no in ce nt ive fo r A m er ic an fir ms to re si st Ara b ro yal ty increa ses. In 

fa ct , an in cr ea se in ro ya ltie s m ay he lp shield from U.S. ta xes oth er fo re ign 

op er at io ns of the co mp anies , su ch as refining an d sh ip pi ng —fo r yea rs to come.

I). RU SSIAN ASS IST AN CE TO ARAB NA TIO NS FROM 1 9 6 8 -7 3 (SE E TABLES II I AND V)

1. R us si an ar m s su pp lie s to A ra bs (s ee tab ic I I I)

Fr om 1968 to 1937, R us si an arm s su pp lies to th e Ara bs were est im at ed to ha ve 

been 82.6 bil lion, no t in cl ud in g th e So viet resu pp ly of Ara b ar m ie s du ring an d 

aft e r th e Yorn K ip pu r war.

Thi s .$2.6 bil lio n es tim at e is pro bab ly low, fo r it us es (he annual av er ag e of 

arm s im po rts fro m 1968 to 1973 as a ba se fo r est im at in g to ta l R us sian ar m s 

im po rts from 1968 to 1973. H ow ev er , R uss ia n ar m s su pp lie s in cr ea se d su bst antial ly in 1972 an d 1973 as th e A ra bs p re pare d fo r th e Octo be r 1973 w ar .

2. Russ ia n aid to th e A ra bs (s ee ta bl e V)

R us si an ec onom ic aid to th e A ra bs from 1968 to 1973 c am e to $1.1 bil lio n. Am ong 

th e fo ur la rg es t re ci pi en ts (1 96 8- 72 ) wer e Eg yp t, Sy ria, an d Ir aq , th e th re e 

m aj or Ara b be llig er en ts in t he Octob er 1973 w ar .

3. Tot al F.S . as sistan ce to th e A ra bs co mpa red to to ta l R us si an as sistan ce to th e

Ara bs (sec s um m ar y tabl e)

T ota l F.S . as si st an ce to th e A ra bs 1968-73. w as $8.95 billion . Tota l R us sian 

as si st ance ov er th e same pe riod w as $3.7 billion . Thu s, to ta l U.S. as si st an ce to 

th e A ra bs w as 2.4 tim es t ota l R uss ia n a ss ista nc e.

E. U.S. ECONOMIC AID TO TH E SOVIET UN ION, 1 9 7 2 -7 3

1. The fig ure of to ta l U.S. ass is ta nce to th e A ra bs of $8.95 billi on does no t eve n 

in clud e $1.1 bil lio n in va riou s fo rm s of econo mic ai d which th e U ni ted Sta te s ha s 

prov id ed to the So vie t Un ion o ve r th e l ast 2 y ea rs :

(а ) Thre e hu nd re d an d si xt ee n mill ion dol la rs in E xport -I m port Ban k loan s 

w ith as so ci at ed p ri vat e fin ancin g.

(б ) Seven hu nd re d an d fif ty mill io n dol la rs in Co mm od ity C re dit Cor po ra tio n 

lo an s ov er 3 y ear s (J uly 1 97 2- Ju ly 1 97 5).

I. E. 2. The Soviet economy has been starved for decades in order to build up a 

vast milita ry machine. Therefore, this $1.1 billion in U.S. economic aid enabled 

the Soviets to avoid shifting resources from militar y expe nditures to agriculture 

and industrial development and thus enabled the Soviets to give more aid to the 

Arabs th an would otherwise have been possible.

II . Pro po sed Act io ns

In general, we must reth ink American foreign policy, especially in the Middle 

East. We must weigh the effects of our actions toward other countries, such as 

the Soviet Union, on ou r Middle E as t policies.
129

We m us t re vi se o ur t ax polici es, as th ey a ffe ct oil.

(a ) F ir st . I am ca llin g fo r an In te rn ati onal Con ferenc e to Lim it M ilitar y 

A ssistanc e an d Arm s Sa les , es pe ci al ly to the Middle Eas t. 1 ha ve in trod uc ed a 

re so lu tion in th e Ho use under th e te rm s of which th e U ni te d S ta te s wo uld ca ll 

su ch a co nferen ce an d wou ld us e al l it s influ ence to se cu re ag re em en t by ar m s 

ex port er s to a su bst anti al re duct io n or ar m s sh ip m en ts, arm s aid an d m ilitar y 

tr ain in g t o th e Midd le Eas t.

Why is su ch a ctio n ne ed ed ?

Bec au se th e oil reve nu es pou ri ng in to Arab co untr ie s are cre ati ng an ex plos ive 

si tu at io n. Eur op ea n na tion s, su ch as B rita in an d Fra nc e, are la ggin g tin* Arabs 

to b art er ar m s fo r oil. R us sia is alw ays will ing to sel l ar m s. Thu s, th e Midd le E as t 

ar m s ra ce w ill a cc eler ate.

Th e hig her th e pr ic e of oil. th e more val ua bl e are th e un ta pped oil supp lie s, 

an d th e more in se cu re th es e A ra b co un trie s w ill become. Co nfl ict may eru pt 

am on g th e Ara b co unt ri es the m se lv es .

Fin al ly , anoth er Middle E ast c on fli ct ma y ig ni te W or ld W ar III.

W hat pr es su re can we bri ng to bea r? We ca n w ith ho ld fu rth e r eco nomic co nce ss ions to th e So viet Union—g ra in sales, lo an s fo r tr uck fa ct ories , su pp ly of 

co m pu te r tec hn olog y, et cete ra—unti l th e So viets a re w ill in g to he lp us calm 

tens io ns in th e world, es pe ci ally in the M idd le E as t.

(&) The sec ond th in g we m ust do is to ch an ge our ta x po lic ies in re gar d to 

oil to st op enc ou ra gi ng U .S. in ves tm en t c ap ital to go a br oa d.

I ha ve in trod uc ed a bil l to el im in at e U.S. ta x cre dit s fo r oil ro yal ties pai d by 

American Arm s to fo re ig n go ve rn m en ts, th us en di ng th e m ajo r so ur ce of our 

ass is ta nce to th e A ra bs an d pr ov id in g an in ce nt iv e fo r oil co mpa ni es to develop 

do mes tic e ne rgy reso ur ce s.

In Octo be r 1973, I in tr oduce d a re so lu tion ca llin g fo r long -term so lu tion s to 

our en ergy prob lem by in cr ea se d do mes tic explo ra tion an d de ve lopm en t of a lt e rnati ve en ergy s ource s.

U.S. Gove rnm ent R oi.e ix E st ab lish in g “I nv isibl e F oreign Aid”

“I n fa ct wh en Sau di A ra bia in it ia te d an inc om e ta x th ey rece ived co ns id er ab le 

he lp in d ra ft in g of th e ta x le gi sl at io n from th e Am er ic an Gov ernm en t so th a t 

th e ta x co uld be used by A m er ic an linn s as ta x cr ed its, th us in it ia ll y tr an sf err in g 

ta x re ve nu e from th e U.S. T re asu ry to th e Sau di A ra bia n Gov ernm en t ra th e r 

th an in cr ea sing the t o ta l ta x bur de n of th e oil co mpa nies ." 1

Mr. L ong. I believe I ha ve used ti p my time.

Mr. P assman. May I make t his state me nt ?

Of cours e, the Arab States or the three St ates you named, Sv ria. 

Jo rd an , and Egy pt , are ge tting some aid from Iiu ssi a, substan tial aid 

fro m the Ar ab State s, and aid from the U nited State s, whereas Tsrael 

has no other aid source th an from the Un ite d State s. Ts th at a s tatem ent 

of fact ?

Mr. M ur piiy. Tha t is corr ect. In fac t, Egy pt is also ge tti ng substa ntial aid fro m Tran.

Mr. P assman. Of course, Ir an is not an Ar ab State . But the y do 

have aid com ing in fro m many different sources, possibly some we 

have no know ledg e of . whereas as f ar as 1 know there is no aid available 

fo r Tsrael o ther than f rom th e 1 ’nite d States.

Mr. M urphy. Th at is corre ct.

Mr. P assman. Mr. Con te?

AS SIST AN CE TO PO RT UG AL

Mr. Conte. T he Fo reign Assistance Act au tho riz ed $25 millio n fo r 

Po rtu ga l. Did Po rtug al request these fu nds?

Mr. M urphy. T thi nk maybe Mr. Lowenstein should ans wer th at.

1

 From “U ni te d S ta te s T ax at io n an d th e In ce nt iv e To De velop Fo re ig n P ri m ary E ner gy Re so urce s.’’ Gl en n P. W at ki ns . H ar var d U ni ve rs ity, pr ep ar ed fo r Fo rd Fou nd at io n en er gv pro je ct . .Tnlv 1973. np. 35-3 6 (c itin g .1. E. H art sh orn , “P oli tics an d W orld Oil Eco no m ic s,” 

Pra eg er , 1967. pp. 198-2 00).
130

It is my impression that they did.

Mr. I jOwexsteix. Congressman, the Portuguese President and F oreign Minister, in meetings with American officials, did request American assistance without mentioning specific amounts.

Mr. Coxte. I see about $1 million accounted for in your justification. 

What about the other $24 million, can you give me a breakdown?

Mr. Lowexsteix. The aid experts who have been in Portugal since 

mid-January consulting with the Portuguese Government have come 

up with a number of tentative proposals. The proposals include a $500,- 

000 grant for technical consultants and training, a $1 million loan for 

feasibility studies to speed preparation of projects suitable for international financing and a $5 million multisector development loan.

Ambassador Carlucci reported bv telephone last nig ht (February 3) 

to the Department tha t a number of other proposals totaling several 

million more are under discussion hut he cannot send them into the 

Department until there is prelim inary agreement within the Por tuguese Government on them.

DROUGHT IX GUINEA-BISSAU

Mr. Coxte. T recently attended a conference of Africans and Americans in Kinshasa held by the Carnegie and Ford Foundations, and T 

met there the new Ambassador to the United Nations and the United 

States from Guinea-Bissau, as well as representatives from some of 

Portugal's African colonies. They were very upset about the terrible 

drought they have. They would like to have some corn flour, sugar, 

milk, vegetable oil. and trucks which have a total value of $5 million. 

T certainly would appreciate it if you would look into this.

I know some of the other Congressmen who were there were quite 

impressed. These colonies are really in had shape, with starvation and 

all. Il seems like the type of program that would ho very, very helpful 

to Cape Verde in p articular and very good for the United States, to 

get off on the right foot with these new. independent colonies.

RELATIOXSIIIP OF PORTUGAL TO ITS AFRICAN COLOXIES

What is vour analysis of the relationship between Portug al and these 

Afrk ■an colonies: Angola. Mozambique, Guinea-Bissau ?

Is Portugal helping them ?

Mr. Lowexsteix. I t is our impression tha t Portugal is trying to disengage itself while still try ing to maintain good will and good 

relations.

Mr. Coxte. T think we need something for the record. I think it 

is very, very important tha t we have good relations with these 

countries.

P'Fhe information follows:]

Portugal’s Rela tion s Wit h I ts African Territories and th e Rest of Africa

The Po rtu gu ese and th e va rio us Af ric an na tio na lis t groups ha ve rea che d ind ependen ce agree me nts for each of th e form er Po rtu gu ese colonial are as. GuineaBissa u became ind epe nde nt Septe mb er 10. 1974. Moz ambique is to become ind ependent Ju ne 25. 1975. Un til th at tim e it is bein g ruled by a tran sitio na l govern-
131

men t th a t is on e- th ird Por tu gu es e an d tw o- tliird s Mozam biq ue nati onali st (F R E - 

LIM O). The Ca pe Verd e Is la nds an d th e isla nd s of Sa o To me and Princ ip e will 

ga in inde pe nd en ce Ju ly 5 an d 12, re sp ec tiv ely. Fin al ly , Ang ola will be a se para te na tion as of No ve mbe r 11, 1975, be ing go ve rned in th e m ea nt im e by a tr a n sitiona l a dm in is tr ati on t h a t is th re e-f ourt hs na tion al is t. In view of th e speedy de co lo ni za tion effo rt an d th e re sp on sibl e m an ner in wh ich P ort ugal ha s been tr yin g to c arr y it out. Port ugues e re la ti ons w ith th e 

re st of A fric a ha ve im prov ed m ar ke dly sin ce April 1974. Se ne ga l, Congo (B ra z­ zav ille ), an d Ga bon ha ve re est ab lish ed di pl om at ic re la ti ons w ith Por tu gal , 

Za ire , th e Iv or y Co ast, an d a num ber of ot he r A fr ic an co un tr ie s hav e opened 

frie nd ly co mm un ications w ith Port ugal. Th e n ati onali st grou ps in M oz am biqu e an d An go la are no w part ic ip ati ng di re ct ly w ith Port uga l in th e m ai nte nan ce of pu blic or de r. P o rt u g al’s ef fo rts to 

ass ure an or de rly tr an si ti o n ha ve in cl ud ed som e econ om ic su pport bo th to pre ­

ve nt an y su ffer in g du e to pre vi ou s eco nomic dis lo ca tion s an d to tr y to di s­ co ur ag e an y un du e ex od us of sk ille d pe rson s. P ort ugal has co nt in ue d fin an cia l su pp or t to th e Ca pe Verd e Is la nds (n or m al ly about $40 mill ion per y ear) , bu t 

th is is un like ly to co nt in ue a ft e r th e is la nd s ar e in de pe nd en t. P ort ugal also ha s 

mad e some em ergency tr an sfe rs to Mo zamb iqu e be ca us e of cri ti cal fo re ig n 

ex ch an ge sh or ta ge s th er e.

Mr. Conte. As you know better than I , there is tremendous mineral 

wealth in Angola and Mozambique. We are having enough trouble now with the’Arabs and if they form cartels on copper and zinc we are 

going to be in serious trouble. Our Secretary of State seems only to be interested in China and the 

Soviet ITnion and the Middle East and to hell with Africa.

We try to explain tha t we have problems economically at home, but I think if we are going to make our dollars count this is a place 

we ought to be concentrating on at this time.

I will have further questions later.

Could I have a report later on Cape Verde?

Mr. Lowenstein. Yes, sir.

[The information follows:]

T h e S it u a tio n in t h e Cape Verde I sl ands

The Ca pe Verd e Is la n d s su ff er fro m per en nia l dro ught- re la te d pro blem s. As 

on e of P ort ugal 's ov er se as te rr it o ri es th e is la nds ha ve rece iv ed su bst anti al balan ce of pa ym en ts an d oth er as si st an ce from th e Metropo le. Por tu gu es e ai d is ex pe ct ed to drop sh ar ply a fte r th e Ca pe Verde Is la nds becom e in de pe nd en t 

Ju ly 5. 1975, but flow s d uri ng th e first h a lf of th e year are co nt in ui ng a t th e ir 

nor m al ra te . The pre se nt si tu ati on in th e is la nd s is es pe ci ally dif fic ult. Acc ording to th e Port ug ue se High Com m ission er fo r th e is la nd s, Alm eida D ’Eca , su pp lie s of milk , 

su ga r, an d co rn wer e alm ost ex ha ust ed in ear ly F eb ru ary 1975, an d be an su p­ pl ie s may ru n ou t by mid -M ar ch . Une mploy men t has gr ow n. Por tu gu es e dr ou gh tre li ef ef fo rts incl ud e su bsi diz in g th e sa la ri es of 60.000 w or ke rs, su bs idizin g food 

pr izes , an d do na tion s of food an d med icines to th os e who ca nnot bu y them .

The re are clo se ti es be tw ee n th e in h ab it an ts of th e Ca pe Verd e Is la nds an d 

m an y people of th e U nited State s. Som e Por tu gue se off icia ls co nc erne d w ith 

th e Ca pe Ve rdes ha ve su gg es te d th a t th e is la nds’ ne w go ve rn m en t w ill w ant 

U.S . help. AID is pre pare d to co ns ider a re qu es t fo r econom ic as si st an ce , but as of th is date it has re ce iv ed no su ch re qu es t from th e tr an si ti o n al gov er nm en t of th e island s.

Mr. Passman. Mr. Roush?

STA TEM EN T AN D JU ST IF IC A T IO N S

Mr. Rousii. Mr. Chairman. T did not receive an advance copy of 

this testimony.

When did you deliver vour testimony, Mr. Murphy?

Mr. Murphy. Late yesterday afternoon, sir.
132

Mr. Roush. Howlonghave you been with AID?

Mr. Murphy. On this tou rsince Mav 1.1974.

Mr. I ’assman. If the gentleman will yield, I think you should correct the record.

You were with A11) for many years prior to that.

Mr. Murphy. Yes.sir. I said on this last tour.

M r. Roush. How do you expect people like me to. in good conscience, 

vote for such requests, which T will not vote for. but how will you expect me to when you come with a presentation which I did not have 

in my hand until 1 arrived at the committee room for which you did 

not give any backup information except what was solicited by the 

questions, particularly of Mr. Conte, this morning. How do you 

expect us to do our work if we don't have this information in advance ? 

I cannot understand it. Mr. Murohv.

Mr. Murphy. T apologize, Mr. Roush. T did everything T could to 

get the statement up on F rid ay but this is an extremely delicate diplomatic situation and it required the personal attention of the Secretary 

of State.

T am not in a position to control the time and the movements of 

t he Secretary of State.

T was not empowered to deliver this statement until he saw precisely what words I was going to use.

Mr. Roush. T appreciate the position you are in. However. T do not 

find anything in this statement which is informative, nor do T see 

the sensitivity of it. 1 suppose there must be some.

Mr. Murphy. If T may turn to the detailed part of vour question, 

Mr. Roush, T agree the statement does not go into detail. The reasons 

are. I think, perfectly valid. The Congress increased the amount 

of the administration's request for aid to Israel. We welcomed the 

increase but we obviously have been unable to sit down and talk 

with the Israelis in any detail until we have a final outcome of the 

decision of the Congress which this committee will have a big bearing on. We cannot seriously talk to them in details without knowing 

that the money is going to be available.

'Fhe same is true in Portu gal. We are talking on a very iffy basis. 

These things came very late in 1974.

Mr. Roush. But you are asking us in effect to write a blank check. 

Bet me point out a simple example.

I sit on another subcommittee. For example, we handle the 

budget for Veterans' Administration. They come in and they justify 

every penny, whether it is f or a hospital in F ort Wavne. Tnd.. or the 

number of employees in a hospital in Houston, it doesn't make any 

difference. They have to justify every penny of that.

We come in here and you are asking us to appropriate millions with 

what T consider totally inadequate justification.

The chairman asked you about rescissions.

There is not a single rescission in any foreign aid program. Yet I 

have to go back home to mv little town and tell people that this has 

happened when in fact the President has asked for a rescission of HillBurton funds upon which my town was counting in order to provide 

health services to their people.

It may sound provincial to you. but it certainly is not to a person 

like myself who has to make these judgments.
133

It is very, very difficult. 1 know 1 have taken my time, Mr. ( hairman.

Mr. Passman. Would you yield ?

Mr. Rousii. Certainly.

CONGRESSIONAL ACTIO NS ON BUDGET REQ UES T

Mr. Passman. 1 think you have made a very, very excellent statement. 1 certainly hope that in the future we may get these statements at least 24 hours in advance of the hearings. The administration re­ quested $50 million for supporting assistance to Israel and submitted 

justifications for the $50 million. Subsequently the Congress took it in its own hands to authorize $324 million. That happened just a little over a month ago. The Congress authorized you to get moving and to come up with a program 

for $324 million and it gave you very little time to do it.

I believe that should be in the record. Of course, Portugal was not in it at all. Put the Congress said our 

wisdom regarding the need is superior to yours and therefore we put 

it in. I know the gentleman would like to have that in the record. In this one instance there is one reason for your not having detail, 

because this is a vehicle of the Congress and not the administration. But I think the gentleman has made an excellent statement. M e should, 

as fa r as possible, have this detail and have the statements at least 24 

hours in advance.

Mr. Murphy. 1 agree in principle, very much, Air. Chairman.

Mr. Passman. Thank you.

Mr. Coughlin ?

Mr. Coughlin. Thank you.

FIS CA L YEAR 19 7 3 PROGRAM FOR ISRAEL

I share some of Mr. Roush’s dismay at the general difficulty of tlie 

statement. Pe rhaps this has been covered before but I cannot determine 

what the overall aid program to Israel is. Could you elaborate on this point? Has that been covered in the 

record ? Mr. MuRriiY. The request is $324,500,000 for economic assistance. 

Then on top of tha t there is military assistance requested for military 

sales for $300 million.

Mr. Conte. Credit sales ?

Mr. Murpiiy. Tha t is right. Then an addition to Public Law 480 program plan of $9.3 million. And we would expect to enter into a housing investment guarantee of 

$25 million. That is not appropriated funds.

Mr. Conte. Of the $300 million credit sales there, the first $100 million is forgiven ?

Mr. Murpiiy. Tha t is correct. It includes a forgiveness of $100 m illion on the sale.

Mr. Coughlin. The final figure was $25 million for what?

Mr. Murphy. Housing investment guaranties.

Mr. Coughlin. TTow about the aid, $25 million ?

Mr. Murpiiy. That is part of the $324.5 million. That is the first 

transaction.
134

Mr. Coughlin. This is a 1-year program, is tha t right ?

Mr. Murphy. That is correct.

Mr. Coughlin. And that is the total program proposed at this time?

Mr. Murphy. That is correct for fiscal 1975.

Air. Coughlin. And there are no further military aid over and above 

the $300 million for fiscal 1975 ?

Mr. Murphy. That is correct.

Mr. Coughlin. Xo gra nt aid except for the $100 million of forgiveness.

Mr. Murphy. On the $300 million sales, $100 million would be grant 

and $200 million would be loan.

P IP E L IN E FOR ISRA EL

Mr. Passman. Would you place in the recoord at this point the 

amount tha t is in the pipeline both economic aid and especially military aid for Israel? It is my understanding that you have about one 

billion and a half of military assistance in the pipeline, isn’t that 

correct ?

Mr. Murphy. I don't remember, but I will be glad to place those 

numbers in the record.

[The information follows:]

Economic and military pipelines

Unexpended balances (pipelines) as of Dec. 31,1974 :

Security supporting assistance__________________________ 0

Military assistance___________________________________ $1,148, 270, 255

PROGRAM FOR PORTUGAL

Mr. Coughlin. The program tha t you propose for Portugal of $25 

million, is that for both Por tug al and its overseas territories or is that 

just for Portugal itself?

’ Air. Mu rphy. The title of the appropriation is P ortugal and overseas colonies.

Mr. Coughlin. What overseas colonies does that include?

Mr. Murphy. It includes both the present and former colonies— 

Mozambique, Angola, the islands of Sao Tome and Principe, the Cape 

A erde Islands, and Guinea-Bissau.

As Mr. Conte pointed out, Guinea Bissau has already achieved 

its independence. Mozambique will achieve its independence on June 

25. The date for independence of Angola is November 11,1975.

Mr. Coughlin. Those are three colonies we are talkin g about.

Mr. Murphy. That is correct.

Mr. C 'ougiilin. Thank you, Mr. Chairman.

Mr. Passman. Air. Obey?

LACK OF JU ST IF IC ATI ON

Air. Obey. I would like to reemphasize what Air. Roush said. I think 

it is kind of ironic, I just came from breakfast this morning at the 

State Department where the question of better congressional-executive 

relations was discussed.

It seems to me that the most fundamental thin g which can be done 

on that end to achieve a better understanding on this end of your 

problems is to get us inform ation earlier than this.
135

I am frankly insulted by the idea that especially as a new member of 

this subcommittee 1 am supposed to review a four or live page statement or whatever it is and on the basis of th at, especially not having 

had i t earlier so I could review it and do some checking myself, determine how I am to vote.

Mr. Murphy. I understand and I apologize again.

Mr. Obey. I think we are entitled to more specificity in terms of 

where the money is going to go.

I know serving on Labor-H EW with Mr. Shriver and Mr. Conte 

tha t if justifications came in from NIE which were this vague they 

would be laughed out of the room as they were a year ago.

Mr. Murpiiy. Mr. Obey, if I may, I would like to say that as the 

chairman indicated, our formal practice is to supply very very considerable detail for the Executive request. But the Executive request 

was upped in both these instances.

Mr. Obey. I understand, but tha t is an authorization and I feel no 

obligation to vote for the authorized amount in the absence of any

• detailed information from the administration.

Mr. Murpiiy. I understand. 1 hope you also appreciate tha t when 

we get, an authorization in December, tha t an awful short time has 

elapsed for us to talk specifics with the countries involved.

Mr. Obey. But I take it you are asking us to support the authorized 

amount for Israel and Portugal.

Mr. Murphy. I am.

Mr. Obey. II ow can I justify tha t without knowing where it is 

going to go ?

Mr. Murphy. I t will be our practice continually as we plan to use 

this money, Mr. Obey, to keep the committees, both the Appropria ­

tions committees and authorization committees, advised in advance 

of our plans, of the precise details.

We are required to do this under section 114 of the Appropriations 

Act and we want to do it in the spirit that you just indicated earlier 

of a desire for congressional consultation.

ASSISTANC E TO PORTUGAL

Mr. Obey. Let me ask you a specific question on Portugal. Do you 

have any funds in the 1976 budget for Portugal.

Air. Murphy. No, sir; we do not specifically at the moment.

Mr. Obey. My question is this : It would seem to me that this has 

. been rushed into to such a degree on Portugal that we really do not

know very much about what we are doing right now. Other than the 

diplomatic problem that you would have if this money were not voted 

after they were told there is an authorization, what justification is

* there for app ropriating the full amount at this time? Can you really 

use practically, more than 10 or 15 million ?

Mr. Murpiiy. Yes. sir. As far as the political justification for the 

money. I would like to turn again to Mr. Lowenstein from the State 

Department who can tell you what this really intends to accomplish.

Mr. Lowenstein. We are trying to support the moderate elements 

in a very fluid, confusing, and uncertain situation.

Mr. Murpiiy. There are elections coming up in April. The Communist elements in Portugal at the moment are the best organized. We are
136

doing the best we can to try to indicate an interest of the West in 

supporting the liberals.

Mr. Obey. That is mv point. Aside from that general question you 

speak of you don't really have any plans for the entire $25 million; 

do you ?

T am not blaming you for it, but I am just trying to get the facts 

on the record.

Mr. Murphy. That is right.

Mr. Shriver. Mr. Carlucci has not been there very long; has he ?

Air. Murphy. He arrived on Janu ary 18.

Mr. Shriver. Tie is a good administrator.

Air. Murphy. Very good.

Mr. Shriver. He will be verv helpful to you.

Mr. Lowexsteix. He could not complete the talks with the Penta* 

gon in time to submit the pro jects at this time.

Mr. Obey. T am sure I have taken my 5 minutes, Mr. Chairman.

Mr. P assman. Thank you, Mr. Obey.

Air. Bevill?

Mr. Bevill. Mr. Murphy, you are the Deputy Administrator of 

AID. right?

Mr. Murphy. Yes. sir.

Mr. Bevill. Who is the Administrator?

Mr. Murphy. Daniel Parker.

Mr. Bevilil. Mr. Parker could not be here today ?

Mr. Murphy. Xo, sir.

REQU EST FOR PORTUGAL

Mr. Bevill. But this is an emergency, this request.

Mr. Murphy. This is a very vital item, both of these items.

Mr. Bevill. I would like to join what has been said here. I think 

this statement questions the intelligence of this commission.

What you have testified here as I understand it and I have been 

listening, you have testified and the testimony that was added by 

Mr. Lowenstein there, I believe they suggested they wanted some help, 

no amount requested, just suggested they wanted to have some help. 

So AID said, “All right, we will give you $5 million and loan you 

$20 million and this money is for Mozambique and some other colonies.” This is a summary of vour testimony if I am reading it right 

here.

Mr. Murphy. Mr. Bevill. you left out one verv important item and 

that is that the Congress in its wisdom decided to authorize the appropriation of $25 million for this purpose, for Portugal and its present and former territories in Africa.

Mr. Bevill. So your philosophy is that when the Congress authorizes money you are supposed to come up here and get it.

Mr. Murphy. We have a request from the Portuguese for help. We 

have an indication from the Congress that they th ink it is in the U.S. 

interest to give that help. ,

We are involved in negotiations with the Portuguese as to how we 

can effectively use the money to accomplish the purposes we have 

spelled out here this morning.
137

USE OF $2 3 MILLION

Mr. Bevill, Let me see what the purposes are. 1 am looking here ami 

cannot find it. 1 see housing investment guarantees up to $20 million.

Mr. Murphy. That has nothin g to do with the present request.

Mr. Bevill. What is this $25 million going to be spent for?

Mr. Murphy. 1 will go over it again, sir. At the moment the discussions have indicated that a half million dollars would be used for 

grants, for technical consultants and training. Examples of the types 

of things they are talking about is establishment of integrated community health services-----

Mr. Bevill. How much for established integrated community health 

services ?

Mr. Murphy. There are no dollar amounts. The overall sum-----

Air. Bevill. Could be $1 million and could be $20,000.

Mr. Murphy. They are talk ing about using a half million for technical consultants anti training.

There are a series of items they are looking at now.

Mr. Bevill. But you do not know how much it is going to be and you 

do not have any plan on how much to spend on each project.

Mr. Murpiiy. No, sir.

M r. Bevill. No breakdown ?

Mr. Murpiiy. No, sir.

Mr. Bevill. We just need $25 million.

Mr. Murpiiy. We believe the $25 million authorized by the Congress 

could be effectively used.

Mr. Bevill. What is the reason for tying this to the Israeli request ?

Mr. Murpiiy. It is not tied to the Israeli request. I t happens to be 

another item authorized by the Congress but did not appear in the 

President's budget request last year. The Israeli request was increased substantially over the President's budget request.

We are trying to make a record; we hope a convincing record.

Mr. Bevill. We on the Appropriations Committee don't even hear 

the testimony that is presented to the authorizing committee. What is 

authorized is one thing and what is appropriated is another. You are 

very much aware of that.

Mr. Passman. Will the gentleman yield ?

Mr. Bevill. Yes. sir.

Mr. P assman. Do you know of any instances where the administration did not request funds but the Congress subsequently put funds 

in and you said you didn't need them and were not going to ask that 

the authorization be permitted ?

Mr. Murpiiy. In the foreign aid program ?

Mr. Passman. Yes.

Mr. Murphy. No ; I know of no such instance.

Mr. Passman. Thank you.

Mr. Bevill. Taking tha t a step further, you do not know of any 

instance where you all have been appropriated more money than you 

could use ? You never send any money back to the Treasury, do you ?

Mr. Murpiiy. Not intentionally.

We had some instances where we failed to get something obligated at 

a particu lar time.

Mr. Bevill. Where you slipped up.

Mr. I jOng. An honest answer.
138

DAT ES FOR T E R M IN A T IO N OF AS SIST AN CE

Mr. Bevill. S peaking of the Pr es id en t’s bu dget, in th is room jus t a 

few months ago Secre tary Kissin ge r tol d us th at in th is budget this 

time, and T h aven’t ha d a chance to see it —mavbe you can answer this 

question—t ha t he wo uld pu t a ta rg et d ate on all these countrie s th at we 

have been a iding all these years.

Do you know w hethe r tha t is in th ere th is time or not ?

T was at M r. Roy A sh’s me eti ng ye sterda y mo rni ng when he brought 

the bu dget over here , but T ha ve n’t read it yet.

Mr. Mur ph y. O f course not. Tn fac t the detaile d bu dget pre sen tation 

ha sn ’t 1>een preo ared yet fo r the Congress. Mr. Bev ill.

Mr. Bevill. Are you all aw are o f th at ?

Mr. Murptiy. We are very mu ch aware of th at interc hange, and we 

ha vp it in min d : ves. sir.

Mr. Bevtll. You do have it in mind?

Mr. Murphy. Yes. sir.

Mr. Bevill. You a re going to give us a ta rg et date on each c oun try?

Mr. Mur phy. On each co un try ?

Mr. B evill. Yes. sir. on each c ountry. If you will rea d th at . tha t was 

the question and his response was he thou gh t th at was a fa ir request.

Mr. Mur ph y. I do remember the in tercha nge. T will look it up again.

Mr. Bevtll. Yes: T wish von wou ld, because we w ant to know when 

we are going to get throug h he lpin g these countrie s and when they 

are go in g to be able to help them selv es. There m ust be some goal in the 

ye-iv 2000 or something, you kn ow.

Mr. M ur ph y. I see.

Mr. RmupL. W ou ld von c heck th at ?

Arr. AfprRpjjv. Yes. sir . T will.

Mr. Bevtll. Tha nk yo u,M r. Ch air ma n.

Mr. P asratan. Tha nk you. M r. Bev ill.

Mr. Ko ch ?

Mr. K och. Tha nk you, Air. C ha irm an .

SY R IA N JE W S

Mr. Secre tar y, about a ve ar or more ago a comm ission cha ired by 

form er Gen eral Lucius Clay pr ep ar ed a repo rt on the actions of the 

Sy ria n G ove rnm ent wi th resp ect to Sy ria n Jew s.

As you mav recall, the repo rt ind ica ted tha t the Sy ria n Gov ernm ent 

had enacted laws which were com par abl e to the Nu rem berg laws of 

Nazi Ge rm any—laws which confined Sy ria n Jews in a ghe tto, prohibit ed them from pa rti ci pa tion in certain pro fessions, and caused 

them severe brutality .

As a res ult of th at repo rt, the Congress, in its las t autho riz ati on, 

placed res tricti on s of a very general na ture on moneys th at might go 

to S vria.

■Would you tell u s basica lly wha t those re str ict ions are. as vou understa nd the m, and what we are do ing to fu rthe r the goal of Congress 

with res nect to these lim ita tio ns , since there is an au tho riz ation and 

ap pr op riatio n requested fo r S yr ia ?

Mr. A therton. Are you d ire ctin g this question to me, M r. Congressman ?

Mr. K och. Yes.
139

Mr. Atherton. As I understand it. the provision of the legislation 

which was passed this year is th at it is the sense of Congress provision 

that assistance should not he extended under this act to countries 

which place restrictions on the emigration of persons from their 

countries.

In the committee's report, Syria was cited as an example of what was 

meant under this provision of legislation.

T would say first that the administration is tak ing very seriously this 

sense of Congress.

Second, it is a situation th at we have been aware of for some time, 

and have been concerned about for some time, and have been in 

diplomatic dealings with the Syrian Government trying to find ways 

to ameliorate the situation.

T think, because of the delicate stage of our Middle East negotiations at the present time, and these involve a verv important role for 

Syria in the peacemaking process, that it is a delicate subject for me 

to try to get into detail about on the record.

Mr. Koch. T appreciate tha t and I don't want to press you. but if 

I may. I would like to ask some general questions. Tf you find that my 

questions bear upon sensitive material, then don't hesitate to indicate 

tha t and I woirt press you on it. I am quite concerned because as I 

understand it, there are about 4.500 Syrian Jews who are now barred 

from leaving Syria. Their lives are in great danger. They would like 

to leave Syria but they continue to be denied th at opportunity. T know 

the Secretary has attempted to alleviate this problem on a number of 

occasions in the past. I)o you know whether, as a result of our intercession—their plight been eased to any degree ?

Mr. Atherton. Our impression is, as a general statement, tha t there 

has been some amelioration in the condition of life of the Jewish community in Syria.

MIDDLE EAST SPECIAL REQUIREMENTS FUND

Mr. Koctt. As I understand it, it is a $25 million approp riation that 

is requested at this point. Is that correct ?

Mr. Atherton. It is the $25 million that has been appropriated 

under the continuing resolution under the special requirements fund. 

M e are developing programs with Syria for the expenditure of that, 

and the appropria te committees of Congress, of course, have been 

notified of the programs we have in mind.

Mr. K° c h * What I am driving at is whether the appropriation request is $25 million. Is tha t right, or am I wrong on that ?

Mr. Atherton. Xo.

Mr. Murphy. The appropriation request is $100 million for Middle 

East special requirements.

Mr. Kocii. But for Syria ?

Mr. Murphy. $25 million is now being programed for Syria.

Mr. P \ssman. Would the gentleman yield ?

Mr. Kocii. Yes, sir.

Mr. Passman. You may or may not at a subsequent date program 

more. The $100 million is unattached.

Mr. Murpiiy. That is true.
140

AM OUNT S FOR SYRIA

Mr. Passman. You can give it all to Syria or you could stop at 

$25 million.

Mr. Murphy. That is correct.

Mr. Passman. Thank you.

Mr. Koch. I)o I understand then that if this committee votes the 

appropriation of $100 million, some of us might be thinking that 

Syria is restricted to $25 million when in fact you could give $100 

million to Syria. Is that correct ?

Mr. Atherton. Certainly I should say I think that we are contemplating, at least in discussing with the Syrian Government, additional 

programs out of that total of $100 million, of which only $25 million 

have so far been appropriated and earmarked for programs in Syria, 

but our intention certainly would be that there would be additional 

programs for Syria in this fiscal year.

Mr. Keen . So if I were to vote this appropriation, I would in fact 

be authorizing you to provide $100 million to Syria even though 

at this moment you have indicated that you actually engaged in a 

curtailed appropriation, from your point of view, to $25 million. Is 

that a fair statement ?

Mr. Atherton. There is one point I think that needs to be noted. 

Under the special requirements fund we are required to present to the 

Congress any programs we intend to implement using funds from 

that^fund. and they have to rest for 30 days with the Congress before we can conclude an agreement with the country concerned.

My understanding is that during that period the Congress can disapprove the use of the moneys for that purpose.

Mr. Kocn. So if you desired to allocate to Syria the balance of $75 

million, which is not now specifically earmarked, you would first have 

to present your program to the Congress. We would then have an opportunity to reject it. Is that a fai r statement ?

Mr. Atherton. That is correct.

Mr. Obey. Could I ask a question, Mr. Chairman, just as a naive 

new member?

Mr. P assman. Yes.

REFOR TS TO TH E CONGRESS

Mr. Obey. Maybe I am confused on this, but von have indicated that 

this information comes up to the Congress and it may or mav not approve. Exactly where does th at come? Does it just come to the chairman of the subcommittee or does it come to all members ?

Mr. Passman. Would the gentleman yield ?

This committee has had a policy ever since I have been chairman, 

ever since this law has been in effect, that when these requests come 

down addressed to the chairmen of the respective committees they are 

immediately sent to this office, turned over to the clerk, and he is instructed to make them available to any member of this subcommittee. 

Every letter even though it is addressed to me is immediately sent to 

this committtee room and the file is available.

There are certainly no secrets withheld by the chairman of the 

subcommittee.

Mr. Obey. Are we notified when those come down ?
141

M r. P assman. No.

Mr. Obey. Will we be notified ?

Mr. P assman. They are too num ero us and there are too m an y l ett ers 

to make a notifi cation each tim e. We ju st m ake them a vailable h ere.

T am glad this came up so I can inform the mem bers of th e sub ­

com mittee of th is procedure. Al wa ys come in an d ask the clerk to 

show you if you want to, on a weekly basis or eve ry 2 weeks, any 

lette rs we hav e received fro m the ATT) agency no tif yi ng us of these 

obligations.

Mr. Obey. W ith all due res pect, Mr. Ch air man, it would ju st seem 

to me in the absence of any policy of notification th at is autom atic, T 

do n't wa nt to have to be send ing my staff people here every week to 

check on th at . Tt wou ld seem Mr. Ko ch’s po int is correct. Whil e in 

fac t there ma y be a technical re po rtin g to the Con gress in f ac t t here is 

very li ttl e rep ortin g.

Mr. P assman. Und er the leg islati on they hav e disch arg ed thendutie s when you no tif y the respec tive com mittees and subcommittees, 

and T sha ll make them avail able. We are prote cte d fo r sec urity. We 

will have a special file here an d you can come see them at any time, 

within 24 ho urs after T receive them , in this office. How eve r, the agency 

has dis charg ed its full res po ns ibility un de r the law when they no tif y 

the chairm an, bu t they will be made ava ilable any time you want them.

Mr. Murphy. Tn th is pa rtic ul ar inst ance, if T may , Mr. Obey, we 

have a difference. Tn th is pa rtic ul ar instance, unlike the proced ure 

which the chair ma n outlined whi ch we follow un de r section 114 of the 

App ro pr iatio n Act. we hav e a specific req uir em ent to sub mit to the 

Congress, as diffe ren tia ted fro m the com mittee's, any pro posals for 

the use o f the M iddle E as t special requirement fund.

In those instances th e notifi cation w ould be add ressed to the Sp eaker 

of the 1 louse, and it will be referre d to the Fo reign Af fai rs Com mittee 

as well as to the App ro pr iatio ns Comm ittee fo r action. Th is is the 

special Middle Ea st special req uir em ent fund , and a special pro vision 

of law.

Air. K or n. T th in k m y tim e has expired .

Mr. P assman. W ould you yield, before T go to Air. Ea rly?

Mr. K och. Of course.

IL LUST RATI VE BU DG ET RE QU ES T

Mr. Passman. T his is a s tra ng e pac kag e th at we look at every year, 

gentlem en. W ith a few exceptions, it is all on th e illus tra tiv e basis. 

Und er the basic leg islati on you could ask for fund s fo r a hospital in 

Guate ma la and build a sum mer res ort in Morocco and be within the 

law. I think we g ot an affirmative ans wer, so w ith few exceptions, this 

is p resented on an illu stra tiv e basis.

You say “W e th in k we need this money fo r th is projec t.” but you 

have the rig ht to tr an sf er it to an othe r pr oj ec t: is th at correc t?

Mr. Mur piiy. T hat has been the pra ctice. We are tig hten ing up on 

th at . M r. Ch airm an , v ery much.

Mr. P assman. We a re tig hten ing it up. but we stil l have a lot o f slack 

there.

Mr. Murphy. Ri gh t.

47 -2 99— 75 ------ 10
142

Mr. Passman. And we are in hopes t ha t maybe by the time we get 

around to fiscal 1976 it will be a little tighter. I think the time is overdue to have more control because the last count th at I had, we had over 

4,000 projects and subprojects still going on in 100 nations of the world 

of different brands and types of foreign aid. We may get around to a 

line item bill.

Thank you, Mr. Koch.

Mr. Bevill. Mr. Chairman, if I may ask on that, could you write a 

line item bill on this $25 million? Really I am curious.

Mr. Passman. We could put certain restrictions on it. As it is now, 

you may subsequently see fit to provide additional money for Syria, 

and you may not.

Mr. Murphy. That is right.

Mr. P assman. You can spend it wherever you need it in that area ; 

can you not?

Mr. Murphy. That is correct.

Mr. Passman. You have to come to Congress for approval.

Mr. Murphy. Yes. sir.

Mr. Passman. T don’t know of many times that Congress has objected and when they did T don’t know th at you have paid too much 

attention to them. We hope you will sta rt paying more attention to 

the desires of Congress.

Mr. Murphy. Mr. Chairman, we hang on your every word.

Mr. Passman. Mr. Ea rly?

LACK OP DETAILED JUST IFIC ATIONS

Mr. Early. Mr. Murphy, not to belabor a point, but in the State 

legislature tha t T was involved in, when a request came in with a 

lacking backup material it was usually because it was of a very low 

priority.

A re we to feel this is a very low priority ?

Mr. Murphy. Quite to the contrary, Mr. Early. Unlike the State 

legislature and the State of Massachusetts, the foreign aid program 

is dealing with a host of foreign governments. There are a lot of 

diplomatic considerations, political considerations as well as economic 

considerations involved.

What Mr. Roush pointed out about the Veterans’ Administration 

a little while ago. T thoroughly sympathize with his point, because it 

is very easy for the Veterans’ Administration, operating within the 

United States, without these problems in international relations, to 

work out in detail very refined budgets for presentation to the 

Congress.

We normally do tha t in advance, when we are going to present a 

request to the Congress for specific sums, but in this particular instance, both the additional amount for Israel, and the total amount 

for Portugal and the colonies was added by the Congress in its wisdom. 

Both additions have the full support of the administration, but in 

neither case in the absence of an appropriation can we sit down and 

seriously discuss in detail with the countries in question what our 

plans are, without working in the international environment.
143

LATENESS OF PROPOSAL FOR PORTUGAL

Mr. E arly. In that environment, Mr. Murphy, it would appear to 

me, following up on Mr. Conte’s question, that building up good will 

in P ortg ual at this time of turmoil appears to be for public relations resources. We would have more credibility if we were funding it in the 

1976 budget. Here we are funding something in February tha t is going to terminate Jun e 30, and we are try ing to P.R. for elections which I under­ stand are going to be held in March and April. It would ap pear to me 

that the request should be in the 1976 budget and not now.

Mr. Murphy. The request for the three colonies or former colonies 

that Congressman Conte spoke about will appear in the 1976 budget as 

well.

Mr. E arly. I thought I heard you say there was no money in the 

1976 budget.

Mr. Murphy. I said there was not yet money in the 1976 budget for 

Portugal but there is money in the proposed 1976 budget for the three African colonies and we will be appearing before this committee with 

detailed statements of how we would propose to use th at money. In fact, tha t is the reason why the technical team is now in Mozambique talking with the government, so that when we come here in March. April, or May, whenever the schedule permits, we will have 

for you specifics that we can talk from.

Mr. Early. Why. Mr. Murphy, wouldn't it be in our best interests 

for Portugal’s money to be in 1976 too?

Mr. Murphy. That would not help us in March or April of this year, 

Mr. Early.

Mr. E arly. Do you really feel that you can expend this $25 million 

in 3 months when you can’t even tell us what you are going to use it 

for?

Mr. Murphy. We don’t have to expend it, Mr. Early. We simply 

have to show th at the United States is interested and ready to provide the assistance. The impact that comes from that act is what is im portant in the first instance. Of course it is important to spend the money wisely and usefully 

and for the benefit of Portugal and. to the extent possible, for the colonies, but the initia l impact that is desired here is an impact in 

Portugal.

Mr. Early. Wouldn’t you have to expend this money before June 30 ?

Mr. Murphy. We would have to obligate it. sir, but we would not 

have to spend it. The expenditures undoubtedly will run into fiscal 

year 1976.

PORTUG UESE AID TO CAMBODIA

Mr. E arly. I read yesterday t ha t Portgual was one of the countries 

that participated with the United States in aid to Cambodia.

Mr. Murphy. Th at is correct.

Mr. Early. Do you know what kind of aid Portgual gave to 

Cambodia, or in what amount? Are you going to give the economic 

aid from the United States just to P ortugal ?

Mr. Murphy. Portugal is no longer in the position of a contributing 

or a donor nation.
144

Mr. E arly. H ave t hey with draw n?

Mr. Mur ph y. Yes, sir. Th ey hav e. Th ey hav e chang ed th ei r sta tus 

in the dev elopm ent assistance com mittee from a donor na tio n to a r ecip ien t na tio n, bu t I don’t have th e detai ls on wh at t hey di d in Cambodia. I know it was fo r hu m an ita ria n purposes. My impre ssion was 

it was a small am ount of money, bu t I wou ld be glad to inse rt it in 

the record a t th is po int.

Mr. E arly. Would you please?

Mr. Mur phy. Yes.

[The information follow s:]

Portuguese Aid to Cambodia During 1974

Portugal contributed 61 Swiss francs to the Indochina Operational Group of 

the International Committee of the Red Cross (ICRC) for its humanitarian programs in Indochina, including Cambodia.

Mr. E arly I have no fu rther question s.

USES OF FU ND S REQ UESTED FOR ISRA EL

Mr. P assman. Tha nk you, Mr. E ar ly .

Th e ad minist ratio n subm itte d to the Con gress a bud get request of 

$50 millio n fo r s up po rti ng assista nce to Isra el a nd you h ad a sho pping 

lis t attach ed to the $50 million . Subse quent ly, late in Dec emb er if I 

rem ember correctly, the Congress reached an agreeme nt on an au ­

thorization bill fo r $324,500,000 f or Isr ael. You ju st h aven’t h ad time 

to work w ith Isr ael and develop a shop ping list fo r the e ntire am ount, 

have you ?

Mr. Mur piiy. No, sir; we ha ve not.

Mr. P assmax. That is ju st the wa y it is.

Now yo u a re g oin g to need time to be able to come u p with a shoppin g 

list.

I notice in y ou r news release fro m the Office o f Publi c Affairs, y ou 

made this general sta tem ent re ga rd in g Is ra el:

This grant will be made available to Israel in the form of credits for the purchase of chemical products, agricultural products, pharmaceuticals, textile, 

medical, structura l, computer hardw are, manufacturing machinery, electrical 

transmission equipment, trucks, medical equipment and other goods.

Th is is a general statem ent b ut the detail as to what q ua ntity of each 

will have to be worked out subsequentl y: is th at correc t?

Mr. Mur ph y. That is co rrect.

Mr. P assman. So the $324.5 m illi on could be an over- or u nd erestimate. Y ou hav e to wait for the de tai l.

Mr. Mur piiy. Yes.

Mr. P assman. Let ’s just be rea listic . You are going to hav e to go 

back and tr y to comp ile a sh op ping list between now and Ju ne 30 in 

orde r to obligate this money. Is th at a fa ir state me nt ?

Mr. Mur ph y. Yes, sir.

Mr. P assman. Th an k you very muc h.

SOVIET REFUGEES

You have an oth er item th at we haven't touched and th at is the 

Sovie t refuge es. I thi nk t he re is in the origi nal au thorization bill $40 

million.
Mr. Murphy. Tha t is anoth er bill, Mr. Chairman.

Air. Passman. I know tha t it is.

Air. AIurphy. Yes.

Air. Passman. I t lias nothing to do with this item.

Air. AIukpiiy. No, sir.

Air. P assman. But nevertheless there have been a lot of changes that have taken place since we dropped the curtain on our hearings last year. Briefly what is the status of the Soviet refugees, those being permitted to go to Israel and those going to other p arts of the world ? What is your division and what is your total obligation?

Air. AIurphy. The amount, Air. Chairman, according to my records, is $10 million, and of course tha t is made available to the State Department, the Bureau of Refugee and Aligration Affairs.

Air. P assman. W hat is t he amount?

Air. AIurphy. $10 million.

Air. P assman. That is in the continuing resolution?

Air. AIurphy. No. That was in the basic authorization act; was it 

not?You are right, it was the continuing resolution.

Air. P assman. $40 million is in the authorization, $10 million in 

the continuing resolution.

Air. AIurphy. You are right.

Mr. Passman. How much of the $10 million have you been able to 

obligate?

Air. AIurphy. On Jan uary 27, Air. Chairman, all $10 million was obligated, and. I believe that the $10 million has been disbursed.

Air. P assman. Please put some additional inform ation in the record 

concerning the Soviet refugee movements.

[The information follo ws:]

R efu gee E mig ration F rom T h e Soviet U nion

The repudiatio n of the tra de bill by the Soviet Union does not seem to have stopped the d eparture of Soviet refugees who have been issued exit perm its to go to Israel. During the month of January 1975, the number leaving the Soviet Union was 1,430, of which 530 opted for rese ttlement in countries other tha n Israel. This compares with 1,378 in December 1974, of which 511 decided to go to 

oth er countries. The number of refugees th at have le ft the Soviet Union over the last 4 years is 

as follow s:

Total

Destination

Israel

United

States

Other

countries

1971................. ..................... ............ . _______ 14,320 14,100 200 20

1972................................................... ........................ . ........... 32,130 31,600 500 30

1973................................ ............. . ................................ 35,200 33. 500 1,500 200

1974.................................................. ................................ 21,650 16, 850 4,100 700

Air. Passman. Air. Bevill ?

Air. Bevhl. Yes, sir. Is there possibilities of just continuing these hearings until they can get the information we would need so th at we 

could intelligently pass upon this?

Air. P assman. Tha t is a good question. I t is uncertain just at this time how many refugees will be permitted out of the Soviet Union.
146

Mr. Bevill. M r. Ch air ma n, I am no t ta lk in g abo ut the refugees. I 

am tal ki ng abo ut th e $25 million of th is money here.

Mr. P assman. On P or tuga l ?

Mr. Bevill. Yes.

Mr. P assman. I wa nt to get arou nd to th at , and then I am going 

to yield.

ASS ISTANCE TO PORTUGAL

I th in k we ha ve a m eeting of the minds on a s ho pp ing list fo r Israel. 

I t hi nk yo u sho uld g et busy becau se you know the fee ling in th e Congress about th is item. If we may re tu rn to Po rtu ga l. If I remember 

correctly, fo r ma ny, many ye ars Po rtu ga l decline d to acc ept any 

economic aid othe r th an the re nt on the bases in the Azo res; is that 

corre ct ?

Mr. Mur phy. My impressio n is th e same as yours, M r. C hairm an.

Mr. P assman. W ill you sta te fo r the record why we are ge tting 

bac k into Por tu ga l af te r they declined any type of aid for many 

years?

I kno w there have been some changes in th at c ountr y, bu t could you 

sta te specific ally why it is nec essary now to ge t bac k int o Po rtu ga l 

wi th an a id pr og ram ?

Mr. Mur phy. I will hav e to tu rn to Mr. Lowenstein on th at , Mr. 

Ch air ma n.

Mr. E arly. Mr. Ch airma n, w ill you yiel d?

Mr. P assman. Yes; I yield.

Mr. E arly. Did n’t we he ar an ea rli er com ment th at Po rtug al received $159.9 millio n in economic a id a nd $344 million i n m ili ta ry aid ?

Mr. P assman. Maybe in the cu ltur al field, litt le dribblin gs.

Mr. Conte. A half billion d ollar s is d rib bling ?

Mr. P assman. T his is fo r th e bas e rig hts . I am ta lk in g about your 

actua l p rogram oth er than base right s.

Mr. Bevill. They were a lit tle v ague abo ut it.

Mr. Conte. I asked th at questio n.

Air. P assman. I missed it, Air. Conte. I am sorry. I t hi nk I m ade a 

sta tem ent of fact because I follow ed th is f or year s, th at as fa r as ou trigh t economic aid as we th ou gh t of it there was no t any. We paid 

rent on th ose U.S. bases.

What is your statement on that ?

PO LIT ICAL AND ECO NOMIC SIT UA TION IN PORTUGAL

Air. Lowenstein. Air. Ch air man , as you know , the re is a c ompletely 

different po litica l and economic situ atio n in Por tu ga l now com pared 

to the las t 50 years. Po rtug al ha d lived un de r wh at was a con servativ e di ctator sh ip which ha d no desir e to see the public edu cated, and 

which was tr yin g to mak e sure th at many7 of the norm al dem ocratic 

processes were suppres sed.

Th e sit ua tio n now is very diffe rent and very uncertain. Th e constitu en t asse mbly elections are sch edu led for Apr il. The Com munists 

have su ggested th at these elections be p ostpon ed ind efin itely, pro bab ly 

because they f nel th at the ir votin g st re ng th is slipping . Other rad ica l 

le ftist grou ps have begun to use violence in an attempt to intim idate 

the dem ocr atic political pa rties.

If I might ju st sav a word about th e economic sit ua tio n th at has 

arisen since th is change in Portugal 's government, une mp loy me nt
147

rose r ap id ly in th e Second Half of 1974, an d we believe will c ontinue to» 

rise in 1975 as the arm ed forces sh rink —and the y are sh rink in g because the y are pu lling back fro m th e colonies an d com ing back to 

the hom eland where the y are demo bilized. West ern Eu ro pe 's eco nom y 

is no lon ger able to absorb wo rke rs fro m Po rtug al because of the 

contr actio n of t he W est Eu rope an economies due t o high er oil prices. 

Th e politi cal uncerta int ies which 1 tal ke d about before ha ve caused 

forei gn vendors to with draw no rm al su pp lie r cre dits, and liq uidity 

problems i n Po rtug al are pu sh ing ma ny bas ically sound busin esses to 

the b rink of bank ruptcy .

Infla tio n in 1974 ran at about 30 per cent toward the end of the 

year. To urism is down sh ar pl y, par tl y because of nervousness about 

the politica l sit ua tio n, but main ly fo r the same reas on tou rism has 

> been d own ev erywhere—in flation an d the high cost of tr av el as a result

of hig h oil prices.

All of thes e th ing s, we think, add up to a s itu ation in whi ch Po rtu ga l 

is r eally a t a v ery im po rta nt crossroads. Th e Se cretary of St ate th in ks

* so and the Presiden t thinks so, t h at it is v ery im po rtan t to give wha teve r su pp or t we can quick ly to the mo derate elements by aidi ng 

Po rtug al , and th at if we do n't do so soon, it may be too late.

Mr. Ch airm an , th at in br ief is why we th in k th at there is such a 

dr as tic ally different situation toda y com pared to th at which obtained 

rea lly since S alazar took pow er befor e W orld W ar 11.

I m ight a dd that I thi nk some o f the Am erican aid to Po rtug al that, 

was pre vio usly mentioned goes back to the M arsh all Pla n aid days, 

doesn 't i t ?

AID TO PORTUGAL IN PRIOR YEARS

Mr. Murphy. A lot was be fore 1961.

Mr. L owenste in. The imm edi ate po stw ar a id program .

Mr. P assman. L et's go to the record because we wa nt to keen the 

rec ord str aigh t.

I was in Po rtug al an d they ind ica ted very str on gly they did not 

wa nt t o accept any economic aid. If we look at the rec ord , in 1962 all 

th e way th roug h to 1973, there was no t a nick el of economic aid of 

an y k in d; is that co rre ct ?

Mr. Lowenstein. Th at is correc t,

Mr. P assman. T he to ta l amo unt over all the ye ars when we picked 

it up is only $17.5 million: is tha t c orr ect ?

Mr. Lowenstein. And I believe most of th at was given in the 

« perio d 1950-51.

Mr. P assman. That is correct.

I wanted the rec ord to show th at you ha d a lon g lapse there of 

many, many ye ars when the y wo uldn 't even con sider any type of

* technical aid. Let th at be as it may . Th e rec ord spe aks fo r itself.

In all prob ab ility in fiscal 1976 you 'will be askin g fo r aid fo r fo ur 

nat ion s, Po rtug al an d th e t hre e colonies which will become nations.

Mr. Murphy. A s I said earlier. Mr. Ch airm an I am aware of a reouest fo r the three colonies in 1976. Th ere is no t yet a form al req uest 

fo r P ortuga l.

Mr. P assman. I th in k we h ad be tte r cross th at bridg e when we ge t 

to it,

Mr. Mur pii y. Th at is righ t.

Mr. P assman. I do n’t th in k th is is the plac e to mak e the rec ord,
148

but you are thinking of colonies today but you will be thinking of 

nations when you come before the committee.

Mr. Murphy. In 1976, yes, sir.

Mr. Passman. And only time will determine whether or not you 

will have an additional requirement for Portugal.

Mr. Murpiiy. That is correct.

USE OF FU ND S FOR PORTUGAL

Mr. Passman. A t this time you don’t actually know whether you 

can utilize the $25 million if you had it, do you ?

Mr. Murpiiy. We are confident, Mr. Chairman, that we can use 

the $25 million for good purposes in P ortugal and the colonies.

Mr. Passman. Do you have a shopping list ?

Mr. Murphy. Yes, sir.

Mr. Passman. Where this committee may have some knowledge of 

what it is going to be spent fo r ?

Mr. Murpiiy. Yes, sir, but it is extremely tentative. It is under 

discussion and I would want to emphasize that, Mr. Chairman, because it is subject to change and negotiation.

Mr. Passman. Mr. Murphy, we have serious problems in this country. We have a deepening recession, and in all probability we could 

be facing a deficit of some $70 billion. There are a lot of projects in 

this country that are going to be pu t on the shelf. A ou are of course 

familiar with the rescissions and deferrals on U.S. programs. We will 

have a meeting this afternoon on it. It is going into billions of dollars. I don't know just how this Congress is going to feel about these 

increased requests for foreign aid. We do hope th at you will take into 

account that you couldn't get 30 cents for any project in the I nited 

States on the weak testimony you have presented today for Portugal. 

You have no shopping list. You just believe th at you may have some 

requirement for it.

Could you place in the record as quickly as possible as much information as you can showing where you think you will utilize the $25 

million?

Mr. Murphy. Yes, sir, we will do that.

[The information follows:]

I llu str ative Lis t—$25 Mil li on P rogram for P ortugal and th e African

Terr itor ies

The following is ilu str ati ve of the proposed program for Portugal and the 

African territo ries based on th e best information to date . We will, of course, 

provide the Congress with d etailed project descriptions before actually obligating 

funds.

G ra nt s:

Technical consultants and tra ining--------------------------------------- $500, 000

Technical assistance rel ate d to housing--------------------------------- 250, 000

Activities in the fields of agriculture and integrated rural development; health centers; ta x collection ; education al materials; and public and business adm inistration (breakdown to

be determ ined)________________________________________ 3,250.000

African territo ries (uses to be determined )--------------------------- 1,000,000

Lo an s:

Feasibility studies-------------------------------------------------------------- 1. 000, 000

Low-cost housing_________________________________________ 8, 250. 000

Municipal w ater and sewerage---------------------------------------------- 6, 750, 000

African territori es (uses to be identified)------------------------------ 4, 000, 000
149

Mr. P assman. I know you are going to be fair with us. If you don't 

have a requirement for it, just level with us.

Mr. Murphy. Right.

Mr. Passman. You do have a requirement but you don't know for 

what.

Mr. Muepiiy. Yes.

Mr. P assman. Am I being fair?

Mr. Murphy. We are certain tha t we can use $25 million effectively.

Mr. Passman. I know, but for what, Mr. Murphy?

Mr. Murphy. We are in the process of discussing it, Mr. Chairman.

Mr. P assman. Could you give us some general idea at this time what 

it is going to be for ?

Mr. Murphy. Yes, sir.

Mr. P assman. Name a couple of items.

Mr. Murphy. The first item is for technical consultants and training.

Mr. Passman. ITow much ?

Mr. Murpiiy. A half million dollars.

Mr. P assman. What kind of technical consultants?

Mr. Murphy. We are talking to them about a project in community 

health services. Another possibility is an agricultu ral cooperative; a 

third is a gricultural research.

Mr. P assman. Are you negotiating with the Portugal people, Mr. 

Murphy, or is this some one-sided list?

Mr. Murphy. We are talk ing very intimately with the Portuguese 

Government.

Mr. P assman. How much ?

Mr. Murphy. That was a half million dollars.

Mr. Passman. The next ?

Mr. Murphy. The next item is $1 million for a loan for some feasibility studies for projects tha t need to have studies done.

Mr. P assman. Again technical aid field?

Mr. Murpiiy. Right, technical assistance.

Mr. P assman. What else ?

Mr. Murpiiy. To help qu alify these loans for W orld Bank financing 

and so forth.

Mr. P assman. To establish whether they would be eligible for a 

World Bank loan?

Mr. Murphy. Yes, sir.

Mr. Passman. Couldn't the World Bank make that decision with 

their technicians?

Mr. Murphy. Normallv. Mr. Chairman, before they make a loan, 

they have to have a feasibility study showing that. It. has to be submitted by the Government to show that the project is, in fact, practical.

Mr. P assman. The World Bank has their own team of experts, do 

they not?

Mr. Murphy. But they don't do the feasibility’ studies.

M r

. ^Gssman. The next. You are up to $1.5 million.

Mr. Murpiiy. We are also talking about a multisector development 

loan.

Air. P assman. Tha t hasn't been finalized and you don't know for 

what purpose yet ?

Mr. Murphy. No, sir.
150

Mr. P assman. You are ju st talk in g ab out m aking a loan .

Mr. Murpiiy. Let me giv e you some ad ditio na l specifics insofar 

as 1 can. We think pa rt of th at wou ld be fo r in tegr ated com munity 

he alth services. A pa rt m ig ht be assistance to th ei r Audio -Visual 

M ate ria ls In stitu te, and par t might be combined wi th our hou sing 

inv est me nt guara nte e f or some low-income housin g.

Mr. P assman. All this is very tentative .

Mr. Murp iiy. It is all very t entat ive.

Mr. P assman. And we are ge tti ng close to th e end of th is fiscal year. 

Yo u ha ve accounte d for $5.5 million. How about the rest ?

Mr. Murpiiy. The mult ise cto r loan. Mr. Ch air ma n, the amount has 

n6t been determ ined. Tha t could be any where fro m $5 to $15 or $20 

millio n.

Mr. P assman. And it could be $3 million.

Mr. Mt •rpiiy. It could be several loans: yes, sir.

Mr. P assman. You see how un certain it is.

Mr. Conte. Will you y ield th ere , Mr. Chairm an ?

Mr. P assman. Yes. I yield.

Mr. Conte. T ha t $324 millio n for Isr ael, is it any firm er than this 

assista nce fo r P ortug al ?

Mr. Murpiiy. No, sir.

PRESEN T SIT U A TIO N IN PO RT UG AL

Mr. Conte. One is s hu ttle diplom acy th at we are using to get peace 

in the Mid dle E as t, and the othe r is t he critical situation in Po rtu ga l 

tod ay. Th e Com munists are about to tak e over. Th ey have got Com ­

mu nis ts in th eir Pa rli am en t. They have been thrown out of NA TO 

nu cle ar planning .

I have jus t come bac k fro m a conference in Af rica. You should 

ta lk to Mr. Yo ung or Jo hn Anderson or some of the other Members 

who were w ith me. The s itu ation in Mozam bique and Ango la is critical. 

Th ey are looking to channel this money throug h Po rtug al and help 

tho se c ountries get on th ei r feet.

Mr. P assman. M r. Conte. T appre cia te yo ur c on tribu tio n. We made 

it ab un da ntly c lear a littl e ea rli er t ha t they have no shoppin g list f or 

the $324.5 million to Isr ae l. You arc going to tr y to esta blish a shopping list. We s oft-pedaled th at.

The reason I am asking thes e questions about Po rtug al is we are 

going to have to have some inform ation to pass th is bill. Conceivably, 

we c ould move on fa ith, but it is a questio n of g ettin g the bill throug h 

the Cong ress. T think you are going to have to mak e a case. The o nly 

wa y you are going to be able to make a case is to show for th e record 

th at you do have a serious sit ua tio n over the re, and here is where the 

money is going to be spent.

Mr. Murpiiy. B ight.

Mr. P assman. The type of i nfo rm ati on von fu rnish mav satisf y me, 

bu t I don’t know about 434 Membe rs of this Hou se. Th ey may be 

ra th er exacting on where th e money is going to be spe nt. Tha t is the 

pu rpose of ask ing these que stio ns, and I think you understand.

Mr. Murphy. I un de rst an d.

Mr. P assman. We need to mak e a record.
151

USE OF FU ND S

Could you tell the committee in detail what these funds will be used 

for?

Mr. Murphy. Not completely, since detailed discussions are still underway in Lisbon on this point. However, we have already arrived at agreement with the Portuguese Government to finance short-term consultant services in a variety of development fields to assist them with 

their development plans and programs. This would include experts in such fields as health administration, production of educational materials, transportation planning, grain shortage and marketing, et 

cetera. Likewise, we have agreed to provide training and consultation 

in the United States for Portuguese specialists in similar fields.

> We have agreed to make a loan to the Portuguese Government to

finance feasibility studies for several projects they are developing 

for external financing. We are now discussing projects in health—community health 

» clinics—the production of educational materials, agricu lture develop­ ment, low-cost housing, and water and sewerage facilities, and possible 

allocations to the colonies, but we have not yet arrived at a definitive list. An early allocation probably will be made to the housing sector to 

be mixed with the recently announced housing investment guaranty money which will be provided at commercial rates. Discussions are well enough along that we fully hope to authorize the $10 million contained 

in the continuing resolution by the end of February.

PORT UGAL AN D PORT UGUESE COLONIES

Mr. P assman. Will most of the funds be used in the development of 

the former Portuguese colonies in Africa, and which colonies are 

involved in this development effort ?

Mr. Murpiiy. No; we expect most of the funds will be used for 

development projects in Portugal. We have discussed with the Portu ­

guese Government the possible use of a portion of these funds in its 

colonies. Remember most of the African countries concerned, especially Mozambique which is very hard pressed, have not yet officially received their independence. Therefore, the Portuguese Government must be involved in the discussions. We are waiting for a final response 

from the Portuguese Government on this question, so it is imnossible 

to nfive a detailed breakdown of the amounts or recipients involved.

The other colonies or former colonies are Guinea Bissau, once Angola. It is unlikely that they will receive aid in fiscal year 1975.

AID TO PORTU GAL

Mr. Passman. ITow much of this assistance would go to Portugal 

and for what use and would this be the total U.S. aid planned for 

Portugal in fiscal year 1975 ?

Mr. Murphy. We expect that the bulk of the money will go to Po rtugal but, as indicated above, we cannot at this time give an exact 

breakdown between allocations to Portugal and to the former terri ­

tories gaining independence.

Assistance to date this fiscal year includes up to $200,000 from exist­ ing education and cultural exchange programs and the recently an-
152

nounc ed $20 million housing inv est me nt gu aran ty. Oth er th an thes e 

activitie s, th e prop osed fu nd in g rep res ent s to ta l U.S. economic assistance p lan ned in fiscal ye ar 1975.

OBLIGATION OF CON TINUIN G RESOLUTION FUNDS

Mr. P assman. A s y ou kno w, we pro vid ed $10 mi llio n fo r this purpose in th e conti nu ing res olu tion. Cou ld you tel l the com mittee how 

mu ch of th is has actua lly been obligated an d lis t th e detai led pr ogram s ?

Mr. Mur phy. None of th e fu nd s ha s been obligated. Th e conti nuing 

res olu tio n was only passed in late December an d Am bassa dor Carlucci ar rive d in Lisbon o nly sev era l weeks ago. Ex tensive discussion s 

hav e been held on the pr og ram ing of the money an d we expect to be 

able to autho riz e the full am ou nt con tained in th e continuing resolutio n by the end of F eb ruary.

ADMINISTRATION SUPPORT

Mr. P assman. Does the admin istra tio n sup po rt this prog ram ?

Mr. Murp hy. Th e ad min istra tio n welcomed the in iti at ive tak en 

by Con gress to include assistance to Po rtug al and th e Portu guese 

colonies in Africa ga ining ind epende nce. I t str on gly supp orts the 

prog ram. We welcome the pr og ra m because we wa nt to dem onstra te 

ou r su pp or t f or Por tu ga l’s tran si tion to democracy.

We wa nt to lend stron g en coura geme nt to the non-Co mm unist po litical pa rti es, to signal o ur interest an d m ora l sup po rt to th em . P or tu ga l’s 

non-C om mu nist leade rs h ave a sked f or d ire ct U.S. assista nce f or th eir 

cou ntry.

The economic assistan ce wh ich th e Congress ha s au thorized a nd a ppr op riat ed is a clear dem on str ation of IL S. su pp ort. We will program 

th at assistance so as to help Port ugal ta p m aj or sources of intern atio nal f ina nci ng as quickly as possible , an d to help—in so fa r as we can— 

to restore investor and business confidence so th at economic deter ior atio n ca n bo arr ested.

FISCAL YEAR 19 75 OBLIGATIONS AND EXPENDITURES

Mr. P assman. Do you feel you can effectively obligate the $25 m illion in fiscal vear 1975? Also,'how m uch will ac tua lly be expended in 

fiscal year 1975?

Mr. Murphy. P or tu ga l’s n eed and th at of its African colonies for 

fund s is fa r in excess of $25 million and its ab ili ty to ad mi nis ter and 

imple me nt pro gra ms u lti matelv identif ied is v ery good. Th ere fore, we 

do not foresee any p roblem s w ith ob lig ating $25 m illion in fiscal ye ar 

1975 fo r activities which cou ld be ca rri ed o ut in a reason able manne r. 

Some po rti on of the tec hnical consult ants an d services grant, and the 

feasibility studies loan pr ob ab ly wou ld be spent in fiscal ye ar 1975. 

altho ug h the bulk of the money would be spe nt in fiscal ye ar 1976. I f 

housing is selected fo r early im ple me nta tio n, some fu nd s mi gh t possibly be spent in fiscal yea r 1975.

ISRAEL ASSISTANCE BREAKDOWN

Mr. P assman. C ould you giv e the committee a detailed breakd own 

of wha t th e $324,500,000 will be used f or?
153

Mr. Murphy. Of this amount $150 million lias already been obli­ gated for the commodity import program, and we are developing the necessary details for further expanding this program. We expect that the commodity import program will be the largest portion and will be somewhere between $200 million and the full appropriation. As for the balance of the appropriation, if any, we are exploring the possi­ bility of providing this as a cash gra nt to help offset the Israeli bal- ance-of-payments deficit and reduce the drain on Isra el’s limited foreign exchange reserves.

AD MINISTRA TIO N SUP POR T FOR INCR EAS ED ASS ISTANCE TO ISRAEL

Mr. Passman. Poes the administration fully support this increased amount for supporting assistance for Israel and if so, why didn’t you 

send up a budget amendment?

Mr. Murphy. Yes: the adm inistration supports the increased amount for Israel as well as the full amount requested for the Middle East Arab countries. As I indicated in my prepared statement, we believe Israel’s present economic situation warrants the increased amount. We have submitted a budget amendment and it is in process now.

FIS CA L YEA R 197 5 OBLIGATION S

Mr. P assman. How much have you obligated for supporting assistance to Israel as of today for fiscal year 1975?

Mr. Murphy. $150 million has been obligated thus far. The full amount was used to finance a commodity import program, with the 

commodities coming from the United States.

OBLIGATION AND EX PEND ITU RES RATES

Mr. Passman. P o you feel you can effectively obligate the balance 

of the increased funds for Israel in the remaining months of fiscal year 1975 and how much will actually be expended in fiscal year 1975?

Mr. Murphy. Yes we do. As for expenditures, tha t would depend on how the $324.5 million was utilized. We expect that at least $225 million to $250 million would be expended before the end of the fiscal 

year.

OTHER SUPPOR TIN G ASSISTAN CE PROGRAMS

Mr. P assman. I f $250 million for Egypt and $324,500,000 for Israel is earmarked out of supporting assistance funds for fiscal year 1975. that would leave $85,500,000 in new obligational authority for all other supporting assistance programs. Could you tell the committee what 

other programs are involved ?

Mr. Murphy. Yes, sir. In addition to Israel and Egypt, other sup­ porting assistance programs are Jorda n. Malta, Spain, and support of the U.X. forces in Cyprus. Supporting assistance is also used to fund 

a portion of the agency’s support, or overhead, costs.

RED UCT ION IN SUPPOR TIN G ASS ISTANCE AU TH OR IZA TIO N TOTAL

Mr. P assman. If the amount for security supporting assistance is reduced below the authorization amount and the earmarking for Israel and E gypt is retained, then we would in effect be cuttin g the funds for 

Jordan, would we not ?
154

Mr. Murphy. Well, in this situation we certainly would need to cut 

somewhere. The combined programs in Jordan, Malta, Spain, the 

Cyprus U.S. forces, and the supporting assistance overhead costs are 

budgeted at $97,500,000, so even without a reduction in the authorization amount, with the earmarking of $574,500,000 for Israel and Egypt 

we still would need to cut these programs by about $12 million to stay 

within the $85,500,000 figure.

INCREASED FUND ING FOR ISRAEL IN SECURITY SUPPORTING ASSISTANCE

Mr. P assman. Do you feel the programs in supportin g assistance for 

Jordan , Malta, Spain and the U.N. Forces in Cyprus are as impor tan t as the programs for Israel and Eg ypt ?

Mr. Murphy. I t is, of course, difficult to place relative degrees of 

importance on supporting assistance countries. Our assistance to <

Isra el and Egypt is critic al to our overall efforts to help to bring 

about peace in the Middle East. These programs are, therefore, absolutely necessary. The same is true of our assistance to Jordan. The 

other programs mentioned—Malta, Spain and U.N. Forces in Cy- «

prus—have strong justifications also which have been spelled out 

previously and should be examined independently on their own 

merits.

TOTAL FISCAL YEAR 197 5 SECURITY SUPPORTING ASSISTANCE OBLIGATIONS 

TO DATE

Mr. Passman. What are the total obligations as of today for all of 

the security supporting assistance items for fiscal year 1975 ?

Mr. Murphy. Total obligations to date for all of the security supporting assistance items for fiscal year 1975 are as follows:

Near E ast and South Asia :

Egypt:

Loa n______________________________________________ _________

Gra nt ____________________________________________ $12, 326, 000

Jo rd an :

Loan ______________________________________________ _________

Grant -------------------------------------------------------------------- 45,000,000

Malta :

Loan ______________________________________________ _________

G ra n t--------------------------------------------------------------------- 9, 500, 000

Is ra el:

Loan ______________________________________________

G ra n t--------------------------------------------------------------------- 150, 000. 000

Total ------------------------------------------------------------------ 216,826.000

Ea st Asia Bu reau :

Ph ilippine s:

L oan ______________________________________________

G ra n t--------------------------------------------------------------------- 104. 000

Multilateral prog rams:

United Nations Forces in Cy prus:

L oan ______________________________________________

G ra n t--------------------------------------------------------------------- 4. R00, 000

Operating expenses_________________________________________ 1, 200. 000

(

Grand to ta l1_________________________________________ 222. 930. 000

1

 Does not include Indochina po stw ar reconstruction.
155

MIDDLE EAST SPEC IAL REQU IREM EN TS FU ND

Mr. P assman. During the regu lar fiscal year 1975 hearings, we were 

told tha t at tha t time you really did not have any firm plans on the use 

of the Middle East special requirements fund. Have your plans materialized now? If so, please tell the committee in detail what these 

funds will now be used for and what countries will receive these funds?

Mr. Murphy. We plan to use the $25 million provided under the 

continuing resolution authority for development activities in Syria 

in the following areas:

Agricultu ral inputs and production loan—$20 million.—"We plan to 

provide a. concessional A ll ) loan to cover essential imports from the 

United States, such as tractors, farm trucks, irrigation equipment, 

seed, pesticides, and other agricultural machinery and related inputs 

needed for Syria’s agricultural development program.

Technical services and feasibility studies—$4 million.—This project 

is designed to provide technical advisory services, short-term training 

visits to the United States, and feasibility and preinvestment studies 

in priority development areas. Some of the specific assistance activities 

will be in the fields of animal husbandry, irrigation, cereal production, 

mechanization of agriculture, land reclamation, use o f pesticides, fertilizer, saline soil technology, industrial processing of agricultural 

outputs, and plant disease control.

General participant training—$1 million.—AID plans to finance 

the graduate level train ing in the United States of Syrian students in 

key technical and management areas. This training will be in such 

fields as engineering, medicine, petroleum technology, chemistry, crop 

production, irrigation, geology, banking, and finance.

The balance of the special requirements fund will be used for 

UNRW A to assist Palestinian refugees in accord with the $6 million 

earmarking in the authorization legislation and fo r additional projects 

in Syria. A project review team has just completed a survey of development needs in Syria and is now completing its report. It is expected that the team ’s recommendations will include additional assistance for needed agric ultura l inputs and production commodities as 

well as technical assistance and some capital projects in land technology, land reclamation, plant disease control, irrigation, animal 

husbandry, and fodder production. These projects will be furthe r 

defined in continuing discussions with the Syrian Government and 

through the use of feasibility and engineering studies.

FIS CA L YEAR 1 97 3 SA LOAN AND GRA NT LEVELS

Mr. Passman. Will all the supporting assistance funds be provided 

to the various countries in fiscal year 1975 on a grant basis ?

Mr. Murfiiy. No, sir, some of these funds will be provided on a loan 

basis. $80 million in loan funding is budgeted for the Egypt commod> 

itv import program, and $10 million is budgeted for two agricultural 

development loan programs in Jordan, each for $5 million. One is a 

30 village resettlement project in the Jordan Valley, and the other is 

for an agricultu ral sector Ioan. There may. of course, be additional 

loans but we are unable to specify at this time.
156

ECONOMIC SITUATION IN ISRAEL

Mr. P assman. What is the present economic, situation in Israel ?

Mr. Murpiiy. Israel is undergoing heavy inflation and its balance of 

payments situation has deteriorated considerably due to rapidly increasing import costs and internal economic pressures stemming from 

the heavy defense outlays. The Government of Israel has imposed 

drastic austerity measures on the economy, but these can only be 

pushed so far.

Israel's foreign debt

Mr. P assman. Is Israel having difficulty keeping up with the repayments on this eternal debt at the present time?

Mr. Murphy, Israel's foreign debt, which was already among the 

world’s highest measured on a per capita basis, increased 20 percent 

during the last, year to over $6 billion, or $1,800 per capita. Israel is 

having an increasingly difficult time keeping up with this burden. 

Repayments were $712 million in 1973, and estimated at nearly $900 

million in 1974. I'he. Israeli Government proiects an increase to about 

$1 billion in 1975. The levels of debt servicing come at a time when 

import costs are increasing while foreign exchange availabilities are 

decreasing.

Mr. P assman. I yield to Mr. Koch.

Mr. Kocir. I appreciate that.

Israel’s use of atd funds

I would just, like to clarify one matter, because so much has been 

made of the fact that vou don't have a detailed statement with respect 

to the $324 million. You did tell us, did you not, that Israel's trade 

deficit is over $3 billion. Isn't that right?

Mr. Murphy. Yes, sir.

Mr. Kocir. And it has that tax deficit with a tax rate of 54 percent. 

Fifty-fou r cents of every dollar goes into taxes in Israel. Is that right?

Mr. Murpiiy. Yes, sir.

Mr. K octi. With your information what could vou tell us Israel 

bought in the United States in the last fiscal year with the money that 

was made available from AIT) ? Can you give us some facts on tha t ?

Mr. Murphy. I can insert it in the record.

> r

r. P assman. Insert it in the record, if you will.

[The information follows:]

Com m odit ie s P ur ch ase d by I sr ae l U xi

Chemical products 

Agricultural products 

Agricu ltural implements 

Pharm aceutic als 

Textiles

Metal products 

Str uctural steel 

Computer ha rdw are

A detailed breakdown by prod uct an( 

table.

er CIP Agreement ix F iscal Year 1974

Manufacturing machinery 

Electrical equipment 

Trucks

Medical eouipment 

Pap er products 

Chemical products 

Other goods

expenditure is provided in the attached
PROGRAM ASSISTANCE, COMMODITY EXPENDITURE ANALYSIS BY AGREEMENT FROM JULY 1, 1973, TO JUNE 30, 1974— ISRAEL AGREEMENT NO. 27 1-K6 03

Comm.Code U.S. source

0116010

1210015

25110003323000

5333240

541994058110355811071

5811091

5812006

5812046

581991059951106119660

65166296517633

6522915

652293065229356522976

Agreement to ta l.................

Beef livers, fresh or fro zen..........

Tobacco burley LF unstemmed... 

Total................................... .

Paper, waste and old paper........

Distillate fuel o il s .. .......................

Interior oil-type paints, etc.........

Pharmaceutical goods, nec......... .Polyester including dia llyl phthal

Syn resin metl lam sheets_____

Polyester film, strips, and..........

Polyeth resin, high density____

Polym r & co syn resn exc a uh...

Sht & lam of artfcl rsn, pis.........

Total...................................

Corn starch_________________

Lea, nec, exc rough cr crust........Nylon fil yrn ex hi ten nec_____Ray reg fil yrn thrn nt te xt_____

To tal...................................

Cot sheeting nec blchd etc _____

Cotton denim s.............................

Cot yrn-d yed shrtngs nec.............

Brd wvn fab nec blchd etc..........

Total...................................

6535261

6638160

6744320

6840110

Wv fab bl nec spn p-e ste r. ..........Asbest mfrs ex frctn mat n e c ... .

Stainless st sheets, ho t-rid ...........

Alum and alum al extr ing and bi

Current period Cumulative

Offshore Expenditure Tons Expenditure Tons

$16, 777, 285.26 ............ $50, 000, 000. 00 

0.00 271,798. 95 0 271,798. 95 0

.00 322, 010.19 0 322, 010.19 0

.00 593, 809.14 0 593, 809.14 0

.00 5, 988. 90 20 5, 988.90 20.00 376, 955. 96 0 376, 955. 96 0

.00 50,161.50 0 50,161.50 0.00 1,109. 00 0 1,109. 00 0

.00 527, 547. 24 0 527, 547. 24 0

.00 1,154, 388. 46 0 1, 154, 388. 46 0

.00 523,701.89 0 523, 701.89 0

.00 1, 153, 500. 39 0 1,153, 500. 39 0.00 528, 929.11 0 528. 929. 11 0

.00 1,393, 586.82 0 1,393, 588.82 0

.00 5,281,653.91 0 5, 281,653,91 0

.00 23, 698.03 0 23, 698.03 0

.00 47,145.13 0 47,145.13 0

.00 263, 261.20 0 263, 261.20 0

.00 6, 661.43 0 6,661.43 0.00 269,922.63 0 269,922.63 0

.00 18, 444.39 0 18, 444. 39 0

.00 6,5 34.35 3 6, 534.35 3

.00 336, 287. 70 0 336, 287.70 0

.00 21,896.13 4 21, 896.13 4

.00 383,162. 57 7 383,162.57 7

.00 9,6 00.00 3 9,5 00.00 3

.00 17,860.00 4 17, 860.00 4

.00 5,081.92 0 5, 081.92 0

.00 409,936. 30 0 409,938. 30 0

Or

-1
PROGRAM ASSISTANCE, COMMODITY EXPENDITURE ANALYSIS BY AGREEMENT FRCM JULY 1, 1973, TO JUNE 30, 1974— ISRAEL AGREEMENT NO. 271-K-602 —Continued

Comm.Code U.S. source

69110156911080G9222306923200

6341120 

6942200635235063812436383110

71110307111C63

7115020

7115037

7122015

7125041

7125060

7125068712508071420507149209

7149216

7149218

Fabr struc tural iron an ste e l. .. Pref and port bldgs of 1 and S_ . 

Total...................................

Sh gun nec, ing bxs etc, a l.........

Comp gas cyl of aluminum.........

To tal...................................

Nails, tacks, etc, nec, I. S...........

Bolts, nuts, etc, of cop per...........

T otal...................................

Hand tools, and parts nec...........

Buildr hr-lwr etc bas mtl nec.... 

Pole lin e etc hrdwre I dr st........

W tr tb pw rb lr 100001-400000.. 

Steam gen powr boilr pts ne c... 

Dsl engns nec, ov 200 to 500....Gas engs, nec, UN 6 BHP...........

Total................................. .

Field forage harvesters...............

Cntr offhwy whltrac max 300HP. 

Trackla ying tractors, under 60.. 

Tracklaying tractor 200 & O V .. .Tracklaying tractors, used..........

Total...................................

Cash regstr wth calc dev new . 

Str DV (X RD AC) el cmp & PI 

Pts and acces F BSC elctr comp 

Pts and acc F computer rld t MS. 

Total................................. .

Offshore

Current period Cumulative

Expenditure Tons Expenditure Tons

.00 241 .322.00 0 241,322.00 0

.00 6,9 00.00 10 6,900.00 10

.00 248, 222.00 10 248, 222.00 10

. . .00 1,235, 694.03 0 1,235,694.00 0

.00 6,984,374. 82 0 6,984,974.82 0

.00 8, 220,668.82 0 8, 220,668.82 0

.00 6, 858.70 0 6,858.70 0.03 5,5 53.00 0 5, 550.00 0

.00 12, 438. 70 0 12,408.70 0

.00 543,140.95 0 543,140.95 0

.00 26,694. 48 0 26,694. 48 0

.00 953,017.26 0 953,017.26 0

.00 778,814.36 0 778,814. 36 0

.00 447, 183.51 0 447,183. 51 0.00 22, 515.16 6 22, 515.16 6

.00 71,094.73 25 71,094.73 25

.00 1,319,607.76 31 1,319,607.76 31

.00 15,803. 50 5 15, 803.50 5

.00 863, 554.70 0 863, 554. /0 0

.00 164, 227. 50 47 164, 227. 50 47

.00 401,528.75 0 401, 528. 75 0

.00 418, 852. 04 0 418,852.04 0

.00 1,863,966.49 52 1,863,966.49 52

.00 33,978. 00 0 33,978. 00 0

.00 279, 142.95 0 279,142.95 0

.00 1,044,141. 59 0 1,044,141. 59 0.00 16, 920 00 0 16, 920. 00 0

.00 1,374,182.54 0 1, 374,182. 54 0

&
7151014 D rillg machs nes $1,000 and O V ..

7151086 Thr ea ding mach $1,000 and over.

Tota l..........................................

7171325 Pts, etc F fb r mach ex e xtr d ..........

7171530 Wash meh etc , co mmrcl N c o in ...

T ota l.........................................

7184248 Attc h nec fo r mntng on tr e tr ..........

7185155 Mach fo r mkn g ce men t p ro de ts ... 7185160 Mach fo r w rk ng m in rl p ro d e ts .. . 

7185220 Gls-w or king mach, nec, and p ts ..

Tota l..........................................

7191520 C entr if re frig unit open-t yp............

7191973 Ind proc vessls nec, pts ne c..........7192126 Cntfgl pu mp SS -S S- FM und 3in._ 7192328 Ce ntr ex tra ctor s & comm u n d r... 

7193112 Sh uv Idrs 4 wh dr 1 - 1- 1/2C YD. . .

7193142 Pts, att ac h nec Idg etc mch s_____7195420 Jigs and fixtu re s.................................

7196221 Food cang etc mach, ne c.................7198095 Meh and mech ap l, nec, pts n ec..

Tota l.........................................

7221056 Dsl-e ng AC gen sts 50-250 K W .. .7221063 Ge ne rator sets, ne c...........................7221084 Tra ns form ers, ne c........ .....................

7221090 Coils, tran s etc, pts, el em p............7222024 Trns m tr and gen cntrl eq, p ts . . .7222036 DC m tr s tr tr s and entetrs, a ll. . . ! .7222066 Connectors, nec..................................

7222068 Cur nt ca rryn g w irng dves n e c ..”7222074 Resistors, fixed, w ire-w ound.........7222076 Resistors, va rble wire- wou nd . . . .

7222080 Resistors, nec.......................................

7222089 Relays, nec; and pa rts, nec............

Tota l.........................................

7249240 Pa systems , speaker, am p, m ic .. . 7249905 Tra nsm it and pw r am p, ex brodst 

7249935 Comm eq uip nec, and parts, ne c. 7249961 Rad and fV pts and accesrs, nec. 7249965 Intercom m eq uip ex cept w ir e . . . .7249975 Electr search app ar and ra d a r.. ..

Total.

.0 0 25 2,042.69 0 25 2,042.69 0

.0 0 561,2 24. 24 0 56 1,22 4. 24 0

.0 0 81 3,266.93 0 813,266. 93 0

.0 0 63 6,501.74 0 636, 501. 74 0

.0 0 27, 760. 00 0 27, 760. 00 0

.0 0 66 4,261.74 0 664, 261. 74 0

.0 0 16,600. 00 10 16 ,600 .00 ” 10

.0 0 40, 000. 00 10 40, 00 0.00 10.0 0 414, 94 9.23 0 414, 949. 23 0

.0 0 6, 290. 53 0 6, 290. 53 0

.0 0 477, 839. 76 20 477, 839. 76 20.0 0 281,385. 94 0 281, 3 85 .94 0.0 0 79, 444. 00 8 79. 444. 00 8

.0 0 10, 281. 06 0 10, 281. 06 0

.0 0 11 ,363 .72 0 11,36 3. 72 0

.0 0 908, 85 4.10 0 908, 85 4.10 0

.0 0 484, 063. 50 0 484, 063. 50 0.0 0 5, 880. 00 2 5, 880. 00 2

.0 0 399, 463. 37 0 399, 463. 37 0

.0 0 554, 635. 43 0 554, 63 5.43 0

.0 0 2, 735, 37 1.12 10 2, 735, 37 1.12 10

.0 0 247, 503. 41 0 247, 503.4 1 0

.0 0 9, 700. 00 0 9, 700. 00 0

.0 0 20, 361.86 0 20, 361. 86 0

.0 0 207, 838. 26 0 207, 838. 26 0

.0 0 529, 286. 00 0 529, 286. 00 0

.c o 7, 6 31.70 0 7, 631.70 0

.0 0 218, 606. 53 0 218, 606. 53 0

.0 0 800, 499. 75 0 800, 499. 75 0.0 0 1, 400. 80 0 1, 400. 80 0.0 0 9, 422. 34 0 9, 4 22 .34 0

.0 0 22 ,095. 43 0 22, 095. 43 0

.0 0 2,08 0, 92 3.43 0 2,0 80,9 23.4 3 0

.0 0 72 063 15 0 72 06 3.15 0

.0 0 472' 623 79 0 472' 623. 79 0

.0 0 473 695 78 0 473i 695. 78 0.0 0 176 345 31 0 176' 345. 31 0. 00 1 01 O' 679 ?3 0 1 010 529 23 0

.0 0 979; 415. 53 0 ' 979; 415. 53 0

.0 0 3,1 84,6 72.7 9 0 3,1 84,6 72.7 9 0

159
PROGRAM ASSIS TANC E, CO MM OD ITY EXPENDITU RE AN AL YS IS BY AGR EEMENT FROM JULY 1, 1973, TO JUN E 30, 1 9 7 4 -ISR AEL AGREEMENT NO. 27 1-K -6 03 — Co ntinued

Com m.

Code U.S. source

7291255

7293051

7293058

7295100

7295202

7295205

7295220

7295236

7295266

7299540

7299910

7299930

7320206

7320220

7320224

7320252

7320254

7320320

7328920

7333010

7349230

8121040

8613910

8617125

8617150

8519110

8619330

8619734

8929320

8995230

8999390

Parts, nec, fo r storage bait...............

Tran sis tors, s ilic o n .............................

Semicon re d and re d ass mbls------

Electric ity su pp ly mete rs ...................

Oscillo scopes ......................................

Wa veform an alyz ing in str ne c.........

Test in str fo r ele cir and m u t..........

Ele qty in din str nonre c nec ..............

Phy prop test etc, in str ele -----------

Capacitors , ne c.....................................

Signal gen er ator s.................................

Elec appa ratus nec and pts n e c ... 

Tota l...........................................

Truc ks unas gas 6,000 lb and u n .. 

Tru ks asm gas 16,001 -19,500 lb . .. 

Tru ks asm gas 19,501 to 26,000 lb. 

Truc ks asm dsl ov er 33,000 l b . . . .

Tru ks unas dsl ov er 33,000 lb ........

Truc ks and traile rs , off-h iw ay.........

Pts and acc, nec, whi tr acto rs ____

T o ta l..........................................

Tru ck traile rs and parts, ne c.........

Pts and access, nec fo r A /C .L ____

Ce nt heat app nec and pts ne c___

Se arch lig hts and spotlig hts ............

De nta l equ ip m ent n e c ...................

Med su rg etc and vet in st n e c ....

A ircra ft flig h t in strum ents ..............

Dr aw inst etc not fo r autu s.............

Ind in st fo r meas flo w e tc .............

T ota l.........................................

A dvertisin g printe d m a tte r______

Sto ds and sim ila r artic le s...............

Man ufac tured ar tic les, ne c.............

T ota l.........................................

Agr ee men t to ta l....................

Cur re nt pe rio d Cu mulative

Offshore Exp en diture Tons Exp en diture Tons

.0 0 242, 40 8.60 0 242, 408.60 0

.0 0 1, 440. 00 0 1,40 0.00 0

.0 0 18, 35 8.17 0 18,385. 17 0

.0 0 42, 244. 38 0 42, 244. 38 0

.0 0 8, 334. 53 0 8, 334. 53 0

.0 0 5, 488. 26 0 5, 488. 26 0

.0 0 3, 465. 00 0 3, 465. 00 0

.0 0 20, 236. 89 0 20, 236. 89 0

.0 0 432, 978.93 0 432, 987. 93 0

.0 0 139, 800. 50 0 139, 800. 50 0

.0 0 9, 689. 70 0 9, 689. 70 0

.0 0 11,80 9. 85 0 11,80 9. 85 0

.0 0 93 6,28 1.81 0 93 6,281.81 0

.0 0 2,9 57,8 18.1 2 169 2,9 57,8 18.1 2 169

.0 0 44, 559. 36 18 44, 559. 36 18

.0 0 22, 089. 20 9 22, 089. 20 9

.0 0 3, 3 51 ,592 .01 30 3,3 51, 592 .0 1 30

.0 0 1,977, 88 5.33 187 1,977, 885. 33 187

.0 0 38,129. 00 16 38,129. 00 16

.0 0 16, 778.98 3 16, 778. 98 3

. 00 8,4 08,8 52.0 0 432 8,4 08,8 52.0 0 432

.0 0 780, 010. 50 0 780, 010. 50 0

.0 0 1,1 49, 288. 73 0 1,149, 288. 73 0

.0 0 26, 302. 50 0 26, 302. 50 0

.1 0 686, 579. 99 0 686, 579. 99 0

.0 0 7, 510. 00 0 7,5 10. 00 0

.0 0 12,12 5. 82 0 12,125. 82 0

.0 0 882, 847. 32 0 882, 847. 32 0

.0 0 1,2 60. 50 0 1, 260. 50 0

.0 0 8, 400. 00 0 8, 400. 00 0

.0 0 1, 598, 724.63 0 1,5 98, 724.63 0

.0 0 43, 70 4.00 2 43, 704.00 2

. 00 7,8 48.9 0 0 7,8 48.9 0 0

.0 0 4,7 78,6 31.9 6 0 4,7 78,6 31.9 6 0

. 00 4, 786, 48 0.86 0 4, 786, 48 0.86 0

............................ 49, 723,876. 79 ____ 49, 723,876. 79 ............
161

Mr. Murphy. I didn’t bring that with me.

Mr. K och. Wouldn’t the ir purchases be machinery, food stocks, and the various items that Israel needs to import on an economic basis for its domestic economy? And aren’t most of these bought here in the 

United States with those moneys ?

Mr. Murphy. All of it wras bought in the United States.

Mr. Kocii. All of it ?

Mr. Murphy. Yes, sir. It would cover what you have described.

Mr. Kocii. From various parts of this country ?

Mr. Murphy. Yes, sir.

Mr. P assman. That is a great contribution to the hearings, but I still say tha t I had a very pertinent request, and tha t is to complete your shopping list, because I don’t know what the feeling of the House is going to be and I think we should show’ where th e money is going 

to be spent. As Mr. Conte said, it is a very serious situation in Portugal, but nevertheless regardless of how serious it may be we should have more information on what the money is going to be spent for.

You don’t disagree, do you ?

Mr. Murphy. Mr. Chairman, we will give you everything tha t we possibly can, as long as you understand tha t some of it is in a very 

tentative discussion stage.

Mr. Passman. And the economic situation in Portugal may be extremely bad.

Mr. Murphy. Th at is righ t.

Mr. P assman. As far as I am concerned, there may be instances, like 

in Israel, where you have to go directly to budget support.

Mr. Murphy. There may be.

Mr. P assman. Yes, Mr. Secretary ?

SU PPOR TING ASS ISTANCE FOR ISRA EL

Mr. Atherton. T would like to elaborate a little bit in response to the Congressman's question with respect to Israel because I think there is one point that has not been brought out in this hearing and 

I think it is important to bring it out. As I understand it, the basic concept behind security supporting assistance in particular we should keep in mind particularly countries that are bearing an extraordinary defense burden. I don’t think any­ one can question that this is the case with regard to Israel where 40 percent of the national budget goes fo r defense, 30 percent of GXP is defense related, and in 1974 defense imports alone amounted to 

$1.8 billion. We have in the past considered this basicallv as a budget supp ort program to help compensate for the heavy defense expenditures tha t 

Israel bears. Having said tha t, we have always. I think, had a very good experience in terms of Israeli use of these funds. The programs that have been worked out, such as the commodity import program, have been good programs. They have been well managed programs. Our experience has always been that the money has been well spent. It has been spent in this country, but I thin k w e ought to keep in mind the basic consideration tha t these are require47-29 9— 71 12
162

merits of an extra ordinary nature because of the extraordinary defense requirements which are a result of the unfinished conflict in 

the Middle East.

Israel’s debt repaym ent

Mr. Passman. You understand we want to complete this shopping 

list. I can't read the minds of the majority of the 435 Members of 

Congress but we should make a good case in every area where you 

have requests for funds. I think we should state for the record tha t 

Israel is up to date on all of its loans. They haven’t defaulted, as f ar 

as I know, on one repayment on any of their loans; is that correct?

Mr. Murphy. That is correct, sir.

Mr. P assman. Air. Conte?

Mr. Conte. The only point I was trying to make, Mr. Chairman, <

is th at last year when we had requests for $2.2 billion for Israel, we 

voted $1.7 billion. I was for the $2.2 billion and you and I worked it 

out and we got the $2.2 billion, so I happen to be very practical about 

this, but I don't want to set the two types of ground rules here. <

I can see that Portugal has no constituency, and I sort of get that 

feeling here as we progress today.

Africa gets the smallest percentage of foreign aid of anyplace in 

the world.

I am sorry tha t Secretary of State Kissinger isn’t here. I think he 

should bo here, not only to tell us in a closed session how his shuttle 

diplomacy is going out there in the Middle East, but why we have 

to give $25 million to Syria, and where this fits in in trying to bring 

peace to tha t troubled part of the world. I thin k it is very important 

that we have this. It is unfortunate he isn’t here.

I also would like him here to ta lk alxmt this money to Portugal. I 

happened to be apprised o f that situation. I understand that Portugal 

no longer is in the Europea n group discussion on NATO nuclear 

strate gy; is that ri&ht, Air. Secretary ?

Mr. Lowenstetn. They did not participate in the last Nuclear P lan ­

ning Group meeting.

ROLE OF AZORES BASES

Mr. Conte. W hat is our situation now with regards to refueling in 

the Azores? When we had secret sessions here in regards to the airlift 

to Israel, we saved them at th at time. I f we had n’t moved in there with 

the C-5A’s they would have gone under. We stopped in the Azores to 

refuel. ,

I understand the A rabs tried to buy our base rights for $50 million.

These are the things th at we ought to be discussing here today.

Tell them about Angola and Mozambique. The great liberals are on 

the floor of the House making speeches, the Democratic study group, r

about the colonization of Angola and Mozambique.

Noav they have independence and they need money badlv down there.

Why don't you speak about these things ?

PROPOSALS FOR US IN G $25 MILT JO N FOR PORTUGAL

Mr. Lowenstein. We couldn't do nearly as good a job as you have 

done, Congressman.
163

Let mo also talk about the shopping list problem. The money for Portugal was authorized in December by the Congress. Ambassador •Carlucci had to stay in Washington until early Jan uary because he had some hearings he had to complete in connection with his old job. He got to Libson on the 17th, I think. We held the technical team until he got out there. We felt there was no point in. the ir being there u ntil 

the new Ambassador arrived. The technical team got out there on the 20tli of January, so they have had 12 days now, or 13 days, to consult with Ambassador Car­ lucci, to consult with the Portuguese Government, and to decide what projects they are going to recommend jointly. Tha t is why we don’t have specific information on the projects, but we will have, within a 

couple of weeks.

j I don't see how it could have been done any more quickly.

Mr. P assman. You understand, Mr. Secretary, that we have had to 

postpone a lot of projects ?

Mr. Lowenstein. Of course I do.

> Mr. Passman. We are canceling out prio r appropriations. I don't

know what we are confronted with. I thin k we are going to have to make the case tha t we are only asking the Congress to pass a 4 month's bill because two-thirds of the year will have elapsed under the con­ tinu ing resolution. I am thoroughly convinced that we had better 

make a good case.

ASSISTANCE TO ISRAEL

With respect to Israel the gentleman from Massachusetts always supported Israel. Here is what transpired last year. We had just reported out the defense bill from full committee and had cut it $3 billion. Several days thereafter we were going to mark up the foreign aid bill and I thought it was best to provide $1.7 billion to 

feel this thing out. By the time we reached the full committee, the atmosphere had cleared a little and I offered the amendment to put the other $500 

million back in. As I say, I have always tried to be just as considerate as pos­ sible, and I think as far as possible this year we are going to have 

to establish a shopping list even though it is tentative. If much of this money is going to be for budgetary support let’s put it on the record so that when these questions are asked we will 

have good answers for them.

t

It may well be that you would have to transfer additional funds over to Israel. I don't know. I know I want to lie responsible and I think every member of this committee wants to be responsible. I wonder if we can take a break for lunch. I am going to ask Mr.

y Long to preside this afternoon.

Mr. Conte. Why can't we finish this now ?

Mr. Passman. We may finish if it is agreeable.

Mr. Roush. I have no other questions.

FOREIGN MILITARY CREDIT SALES

Mr. L ong. On the foreign military credit sales program, in which $300 million is earmarked for Israel. $100 million is a grant. I believe, but the other $200 million could be DOD-guaranteed loans from com-
164

mercial banks at a fairly high interest rate (10-12 percent). Is that 

correct ?

Mr. Murphy. Dr. Long, yon have ns at a disadvantage because there 

is no one here from the Pentagon that administers this foreign 

military sales program, and I really don't believe we are competent 

to testify on this.

Israel’s debt burden"

Mr. Long. Can you tell me then what the debt burden of Israel is 

at the present time? I do think that is relevant to the request that 

you have. They have a large debt burden, do they not?

Mr. Atherton". I have some figures on th at, Mr. Congressman.

For 1973 and forecasted for 1974, and then the estimated actual 

burden for 1974, the first figure, Israel’s foreign debt in 1973 was 

$5,093 million. The forecasted figure for 1974, I presume this 

means forecasted in the Israeli budget, $5,700 million.

Mr. Long. You are talking about the total debt, actual debt?

Mr. Long. I am talking about their principal and interest 

repayments.

Mr. Atherton. Again the information T have on that indicates that 

the annual debt services payments, including interest, have risen from 

$712 million in 1973 to nearly $900 million in 1974, and are expected 

to pass the $1 billion mark in 1975.

Mr. Long. So tha t of the resources that we are making available to 

Israel, much more than that is in fact absorbed for debt service tha t 

Israel has to maintain on its external debts.

Mr. Atherton. Of course I thin k one has to clarify that what we 

provide is onlv a part of Israel’s total capital imports. There are the 

private transfers which are substantial. The figure T have in round 

figures, capital imports of roughly $3 billion phis earnings from export 

have helped Israel to maintain its credit worthiness.

Mr. Long. These are investments made in Israel ?

Mr. Atherton. Contributions to a large extent, sale of Israeli bonds 

and contributions to United Jewish Appeal.

Mr. Long. What is that ? I wasn’t aware th at it was tha t large a sum 

of money. I would be surprise d if tha t were a major pa rt of Israel’s 

capital imports.

Mr. Atherton, I don’t have the totals here on either of those sources 

of capital, but it is not inconsiderable. T do have it.

Let’s take 1973. Israeli bonds, $502 million. Forecast for 1974 is 

down, and I think this is understandable.

Mr. Long. They are paying interest on those bonds, are they not?

Mr. Atherton. Oh, yes.

Mr. Long. What I want to discover is to what degree the resources 

that we give or loan Israel will be offset by debt-service payments. I 

am not talking about profit-seeking investments being made in Israel, 

but bonds that were issued for th eir past needs, on which they have to 

pa v interest, as well as any loans that are made.

Mr. MurphT. Amortization of loans.

Mr. Long. Of the kind that I just mentioned here in this DODguaranteed loan. Israel does operate under a staggering burden of external debt service, does it not?

Mr. Murphy. Yes, sir.
165

Mr. Long. Their debt service is absorbing a very large p art of w hatever we are able to make available to them.

Air. Murphy. We will develop a table, Dr. Long, and insert it in the 

record with your permission at this point.

Air. Long. I would appreciate that.

That is all I have to ask, Air. Chairman.

[The information follows:]

ISRAELI EXTERNAL DEBT STATEMENT1

[Millions of U.S. dollars]

Repayments by ye ar2 Principal Intere st

1975 ............ ............. .............. $329.5 $130.4

1976 .............. ................... .........

............................ 351.7 106.8

-1977 ............ ................. ......... ............ ................... 327.4 90.1

1978 .................. . ....................... 369.9 79.3

1

 Total external debt as of Dec. 31,1973, $5,100,033,033. Tota I estimated external debt as of Dec. 31,1974, $6,300,000,000 

(no data available on repayments of borrowings in 1974).

2 No data available beyond 1978.

Source: IMF report: Israel— Recent Economic Developments, dated July 8,1974.

NA TION AL DEBT

Air. P assman. I think possibly we should state for the record that our true public debt is $2 trillion, when you include our statutory obligations. Interest on our public debt is, in all probability, going to 

approach $40 billion in fiscal 1970.

Air. Long. AVould the chairman yield on that?

Air. Passman. Yes; I yield.

Air. L ong. I think a distinction has to be made between an internal and external debt. AVe are fortunate at least th at most of our debt is an internal debt, so that although money is paid out by the Government, it is paid to Americans, and therefore results in income to Americans who are able in fact to pay taxes on that to the Government, whereas virtually all of the Israeli debt is an external debt. E xternal debts con­ stitute a terrible burden on countries. Very few countries have ever succeeded, I believe, in paying oil completely a very large external 

debt. I think that ought to be made clear.

Air. P assman. It hasn’t lessened my enthusiasm to help our friends, 

but I think we should occasionally point out for the record just how 

tremendous our public debt and public obligations are. I think we should also show for the record that whatever we give in foreign aid in fiscal 1975 and fiscal 1976 has to be borrowed, 

doesn't it ?

Air. AIurphy. It depends on how you look at the budget, Air. 

Chairman, but certainly a good part of our total Federal budget is 

financed from borrowed money.

Air. P assman. Foreign aid is something that comes a fter we have 

provided funds to the regular U.S. agencies, so it has to be said it 

falls in the category of borrowed money. I want to be fair about this but I think certainly we ought to say something about the problems of borrowing in America.

Air. Coughlin, any more questions?

Air. Coughlin. Yes, Air. Chairman.
166

AZORES BASES

I would like to get back to the question that Mr. Conte raised 

about the use of the Azores, and whether we still have our base rights 

in the Azores, and whether or not they were vital to supplying Israel in 

the last go-around over there.

I think this is a very critical question.

Mr. Lowexstein. Yes, Congressman, they were vital last time. I 

should point out that the Portuguese authorities have declared their 

intention to remain in NATO so tha t the base situation remains u nchanged from that which has prevailed so far.

It is our feeling tha t if we don't support Portugal now, tha t if 

things go the wrong way in Portugal, there won’t be a question of 

future NATO relationships and possible base agreements.

Mr. Cougtilix. And was this base vital to our resupply of Israel ?

Mr. Athertox. It was an essential pa rt of the resupply, Congressman. I think there is no question about that.

Mr. Coughlix. So that if that were denied us, any future situation 

such as that in Israel, we would have real difficulty getting supplies 

there on time.

Are there alternatives to these bases?

Mr. Athertox. T his was the best available under the circumstances 

at tha t time. The question of whether or not a resupply of the kind 

we had in 1973 could be done without the use of those bases is one 

I don't feel competent to address. T would want to consult my Department of Defense colleagues, but I am quite certain tha t it would be 

a much more difficult job and certainlv a much more costly job. 

Whether it would be impossible is a question I am not really prepared 

to answer.

Mr. Coxte. Will you yield there?

The Greeks wouldn't let ns land there, would they, the last time?

Mr. Attiertox. No; we. didn’t.

Mr. Coxte. This was th e only place that we could refuel.

Mr. Coughlix. The Spanish wouldn't ?

Mr. Coxte. Spain wouldn't let us land.

Mr. Athertox. What I am not sure that I can recall without checking the record was where else we made specific requests.

Mr. Coxte. We heard behind closed doors, Mr. Chairman, that was 

a very, very serious time, that that was the only place we could refuel.

Mr. Coughltx. If it is not possible to discuss th at at this time I 

think it should be discussed at another time.

Mr. Passwax. I thin k possibly these questions which are raised 

should nossiblv have answers.

Could you do research and mavbe furnish a letter on it?

Mr. Athertox. I think, ohviouslv. it is a very serious question and 

I would like to undertake to see what we can provide.

Mr. P asswax. Are we in a classified area ?

Mr. Athertox. Yes.

Mr. Passmax. I think we should insist that Mr. Kissinger come down 

tom orrow.

Mr. Athertox. Mr. Chairman, could we undertake to provide vou 

a lette r on this? I think we would probably want to make it a classified 

letter.
167

Mr. Passman. Is that acceptable to you ?

Mr. Coughlin. Yes.

Mr. Atherton. To give you fully the information you are asking for.

Mr. Passman. You can give us a classified letter on it.

[The letter was supplied to the committee.]

Mr. Coughlin. Thank you, Mr. Chairman.

Mr. Passman. Mr. Obey ?

Mr. Obey. Let me ju st ask a couple of questions, and let me start 

by statin g a couple of thoughts.

I happen to think that it is probably a p retty good idea to provide 

some aid to Portugal. I happen to think i t is probably a pretty good 

idea to provide some aid to Israel, but anybody who knows anything 

about me knows that I value procedure every b it as much as substance 

on the committee and anyplace else.

> There are a few things that bother me about procedure here and

maybe it is just because I am a new guv on the block on th is subcommittee and I don’t understand things fully.

Let me ask some dumb questions anrwav.

BU DG ET amendment for requests

Has the administration sent up a specific budget amendment in 

support, if the administration is in support of these funds?

Mr. Murphy. It has not yet done so.

Mr. Obey. Will it ?

Mr. Murphy. Tt is in the works, Mr. Obey.

Mr. Obey. Will we get one ?

Mr. Murphy. It is my expectation that you will get one, yes.

Mr. Obey. Because if I can speak very frankly, I have wondered 

and I know some other people have, whether in fact there will be one 

because I think there is the assumption in some qu arters that because 

of the emotion and because of the political punch tha t the Israel 

money has that it could probably be pushed through Congress without 

an amended budget request.

This is just one Member who, in the absence of any specific budget 

request, would have no intention of voting for money for Israel, for 

Portugal, or anybody else. I think it is very important in terms of procedure, iust in practical terms. I am a practical politician. I know th at 

one of the arguments the next 2 years is going to be how much of a 

budget buster the Congress is. I am not goingto vote for money in this 

case so that when the net pluses and minuses are totaled up a couple of 

t months from now that this is just one of those items where we are

listed as being above the budget when in fact the administration is 

specifically in support of both the items.

Mr. Murphy. You need not have any concern on th at because these 

1 requests, when thev come to the Congress, will still leave the action

of the Congress below what the administration requested for foreign 

aid.

Mr. Obey. I understand that.

Mr. Murphy. So there are offsetting reductions.

Mr. Obey. I understand. I am looking at the total package.

T just want it clear if there is in fa ct any doubt anywhere about t he 

intention to send u p an amended budget request th at I am not going 

to vote for anything unless there is one.
168

IMPORTANCE OF BUDGET AMENDMEN T

Mr. Passman. Will the gentleman yield at tha t point ?

Mr. Obey. Yes, sir.

Mr. Passman. I have been in touch with the administration and I 

have mentioned this to them several times regarding the importance 

of sending down an amended budget request.

I want the members of the committee to understand that we are 

holding these hearings only because the continuing resolution is going 

to run out and we are going to have to move this bill. I think it is vital, 

Mr. Murphy, and Mr. Secretary, tha t you get this information back 

to Mr. Ash or to the President and Mr. Kissinger and just state th at 

there is some question as to whether or not you can get this approved 

unless you have an amended budget request.

I do not think you made a valid point tha t this increase will be 

offset.

We have to deal specifically with the items under consideration. 

There has been no budget request for the increased amount for Israel 

or for Portugal.

Will vou get that message through to them ?

Mr. AIurptty. Yes.

Mr. Passman. Thank you for yielding.

USE OF FUNDS FOR ISRAEL

Mr. Obey. Again on procedure, you indicated earlier that about $150 

million and some additional amount, you said $150 million in the case 

of Israel will be committed now for commodity imports.

A little while later you said the majority will be used for commodity 

imports.

I take it that there will be at least some money in the funding for 

Israel which will be in the form of direct budget support ?

Mr. Murpiiy. I expect th at will probably be so. Mr. Obey.

BUDGET SUPPORT QUESTIONED

Mr. Obey. Having had no experience on the subcommittee, but being 

personally somewhat offended by that procedure. T know there have 

been some precedents for this. I understand you did th at with Jordan, 

for instance.

Mr. Munnur. Yes. sir.

Mr. Obey. Fo r how long ?

Mr. Murptty. Fo r many years.

Mr. Obey. Are we doing it for anvbody else right now ?

Mr. Murpiiy. None tha t T can think of.

Mr. Obey. Why is it a good idea? How do I defend tha t to my 

taxpayer?

Air. Murphy. As Hr. Long brought out very forcefully, the Israeli 

Government is laboring under a tremendous burden.

Mr. Obey. I understand that but it still begs the question.

Mr. Murphy. It is carry ing a defense load which is 40 percent of 

the ir taxes.
Mr. Obey. That means the money could be used for payin g the salaries of government people.

Mr. Murphy. And some of the military.

Mr. Obey. My point is tha t I am fully confident th at they need tlie money, but I think that my taxpayers have a right to know specifically 

where that money goes. I do not feel very comfortable even though I know the position Israel is in in this country and all of its supporters, and I happen to be one of them, but as I said, procedure is very important to me. It is not a partisan question at all, I understand that. It just seems to me tha t it is a very questionable budget practice. I wonder if we are not doing it for anybody else why we should do it for Israel. Why can’t we, and the people we represent, be told where that money 

is supposed to go before it is committed.

NE ED FOR GREATER DETAIL

Mr. Murpiiy. Well, you can be and you will be.

Mr. Obey. But not before we vote on it.

Mr. Murpiiy. No, we need the approp riation before we can talk with 

the Israelis about precisely what to do with it.

Mr. Obey. If they do not have an idea of where they want it, at least 

to give us some tentative idea-----

Mr. Murpiiy. I am sure they have ideas on where they want it. We are conducting discussions with them. When the discussions are final­ ized wo will have a pattern and in fact we are required to send it up to 

you.

Mr. Obey. But afte r the vote.

Mr. Murpiiy. But----- . . .

Mr. Obey. I have never voted for foreign aid in my life. I want to. If anybody ever told me I would vote against foreign aid, I would have said that they were crazy. But the fact is that it is very difficult to justify especially in a district like mine which is poor, rural, and 

older than average. It is very difficult to justify non-specific requests. I don’t care if it is for Israel or anybody else. I would like to hear some specific inform a­ tion as to why this type of program is necessary fo r Israel when it is 

not for anybody else.

Mr. Murpiiy. I will defer to the Secretary but I thin k we have a 

very peculiar situation with Israel. That is the basic reason. Secretary 

Atherton, would you expand on that, please ?

Israel's need for assistance

Mr. Atherton. I in part answered it when I pointed out the extra ordinary defense burdens tha t Israel carries and the recognition of security supporting assistance is to help countries whose resources are strained by extraordina ry defense expenditures. The situation tha t Israel is in. I think, is unique in terms of its political position in the area, in terms of its debt burden. Therefore, I 

think one has to find unique ways of dealing with it.
170

There is no question in my mind that budget support for Israel goes 

to good use even though one cannot identify the precise expenditure 

of each dollar of ours that goes to the Israeli budget.

Mr. Obey. If you are to sustain in this country support on the part 

of the general public for foreign aid in general they have to think t hat 

we know what we are doing, tha t we know in fairly specific terms 

where that money is going.

It doesn’t help us to gain support to say, look. Israel is in trouble and 

we have to give them money, but we cannot tell you where they are 

going to spend it before we provide the authorization to expend it.

NEED FOR “ SH OP PING LIST ”

Mr. P assman. If the gentleman will yield, I think I can make a 

contribution at this point.

I don’t want to contradict Mr. Murphy, but to set the record straight 

you do have an illustrative program at the beginning of each year and 

you ask for a? amount of dollars for either development loans or supporting assistance. You have what I refer to as a shopping list; 

correct ?

Mr. Murphy. Yes, sir.

Mr. P assman. We should have that shopping list. I brought tha t up 

earlier that von got caught short and you had to complete your shopping list. I knew it was quite irregular for this subcommittee to be 

considering a request when there is no budget request for it.

I mentioned this to you two or three times on the telephone. But 

tim° is running out for us. We have no alternative.

Mr. Obey. Let me make it perfectlv clear again, if T can use Mr. 

Nixon's words, T would intend, if this were the only item we were 

looking at and assuming we had a budget request, I would intend to 

vote fo r Ihe amount of money which is specified for specific purposes 

and no more. I just don’t feel that I am in a defensible position in 

trying to persuade mv own constituents that this is a sensible way for 

this Government to do business.

Let me ask just one other question.

Mr. Murphy. May I sav that we will do our best to spread on the 

record the most specific information that we can give you on how we 

would propose to use this full amount of money.

I also would like to set vour mind at ease on one other point. Tf and 

when we determine tha t it is necessary to engage in what is called 

budget support, I would like to assure you that this is not just a blank 

check, that we talk with the Government about the specific areas of the 

budget tha t the funds will be used for and it is not just anything that 

they want.

NEED FOR BUDGET SUP POR T

Mr. Obey. But my question is more basic.

My question is whether in fact we have any business for Israel or 

any other country in the world to supply basic budget support. I 

question that very seriously.

Mr. Murphy. We have done this over the past years for a number 

of countries.

Mr. Obey. I understand that.
171

Mr. Murphy. In Korea we could not keep those men on the line 

’without budgetary support. We had to support the military budget.

Mr. Obey. I understand we have done it in the past but tha t still 

does not persuade me tha t that is a responsible th ing to do. Just one 

other question. Again it may seem naive to some but you said of the military credit sale item of $300 million, $100 million will be forgiven.

Mr. Murphy. That is correct, pursuant to the action of Congress in 

the authorization act.

CO N FU SI O N IN TER M IN OLO GY

Mr. Obey. I understand the role that Congress has played in this 

but let me just ask a naive question: Why should we not simply admit 

tha t that $100 million is just a gift ?

k Mr. Murphy. We are.

We. are not trying to conceal it in any way. It is a grant of $100 

million for military supplies, pure and simple. We are not trying 

. to in any way cover it up.

It just happened to be that the amount was requested unde r the 

foreign military sales item. The Congress decided tha t $100 million 

of that shall be a gra nt for Israel. There is no secret about it whatsoever.

Mr. Obey. I understand there is no secret about it, but there is, as 

1 understand, a difference in terminology if nothing else.

Mr. Murphy. There clearly is.

Tf this has caused confusion, I'm sorry.

Air. Obey. I t is not a question of causing confusion. When anybody 

wants to object to the whole blessed foreign aid program, I hear these 

cracks about all this subterfuge tha t is going on out here. I am not 

suggesting it is subterfuge, but I am suggesting it allows some other 

people to say it is.

I think it damages our credibility. I don’t understand the necessity 

of it.

Mr. Murphy. All I can say is we wish we could inform every Member of both Houses, have the opportunity to do so as we do the four 

committees t hat we appear before. But that is not the way Congress 

operates.

'When you have a large body of the House and Senate who do not 

particip ate in the hearings and cannot know the details clearly you 

are going to have misunderstandings on their p art as to what certain 

parts of the bill do or do not do.

• Incidentally, this is also true with the American public. As you

know, we are stopped by law from having any kind of an information 

program to inform the American public about the foreign aid pro ­

gram. So your constituents and the constituents of other Members

’ have misconstrued ideas of what is going on in the aid program.

We would love to be able to clear it all up.

Mr. Obey. Th at is not my precise point, but I have taken enough 

time.

Mr. Passman. Thank von, Mr. Obev.

It would have been far mo re desirable and understandable. even 

though I am supporting the $300 million credit sales fo r Israel, had 

the 100 million in grant aid been in the MAP program because tha t
172

is the category it should have fallen in because it is gra nt military 

assistance, is it not ?

Mr. Murphy. That would certainly eliminate the kind of confusion 

Mr. Obey talks about.

Mr. P assman. That is right. But since it is not, we have to take 

the vehicle we have and work with it. Mr. Koch ?

u.s. support for Israel

Mr. Kocir. Am I correct th at it is a matter of U.S. policy which has 

been expressed by the President and the Congress that it is in the national interest of the United States to support Israel and to make 

certain tha t it can defend itself militarily? Is that a fair statement?

Mr. Atiiertox. I think that is a very fair statement, Air. 

Congressman.

Mr. Koch. Having taken that position, we have undertaken to assist 

Israel economicallv and militarily to achieve this. Is tha t fair?

Mr. A tiierton. Yes, sir.

Mr. Koch. In some cases with respect to other countries we have 

given them arms totally without charge.

Mr. Murphy. Yes, sir.

Mr. Kocit. Many countries.

Mr. MuRpnY. Yes, sir.

Mr. K och. We have not required them to reimburse us a t all.

Mr. Murphy. Correct.

Mr. Koch. Isn't it a fact, however, that with respect to the arms 

provided Israel over the years th at a vast amount of those arms have 

been paid for, whether by long-term loans or short-term sales, but in 

fact paid for?

Mr. Atherton. I think over th e years tha t is correct.

CRITERIA FOR ASSISTING ISRAEL

Mr. Koctt. In determining how you would assist a country, you 

could decide that we would not grant any economic assistance: but 

tha t we would provide arms with no requirement for reimbursement. 

Tha t is one way of handling it; isn 't that so ?

Mr. Atherton. Yes.

Mr. K och. Didn ’t you tell us tha t Israel is compelled to spend 40 

percent of its total budget on arms in order to maintain itself militarily?

Mr. A therton. Forty percent for total defense expenditures.

Mr. Koch. And if that 40 percent were given outright by the 

United States—I ’m talking about the military hardware and isn't it 

a fact that it would not be necessary to have the economic assistance 

tha t we are talking about today?

Mr. Atherton. I think that is clearly tru e. For ty percent would be 

something in the neighborhood over $1 billion.

IP ’. K octt. So we have decided insteed of that to require that Tsrael 

pay back the military aid and we will assist them economically in 

grants and long-term loans. Isn’t that a fact?

Mr. Atherton. Yes: in general I think that is correct. There is a 

balance between the two.
173

Mr. Koch. This is c urrent policy. There has been a decision made 

that it is in the interest of the United States to do that. Is tha t not 

so?

Mr. Atherton. Yes.

Mr. Conte. When Secretary Kissinger came up here he said they 

forgave $1,500 million in military aid. That was supposed to be repaid 

and we washed it out last year.

Mr. Passman. Tha t is correct. I t was $1 ^ billion last year and only 

$700 million was for repayment.

Thank you.

Gentlemen, there have been some tense moments as we tried to pin 

down your shopping list. You have heard some of the members express themselves. You better finish your shopping list. Tell these 

people we want an amended budget request. If we do not get it, you 

■* may not get any money and if you cannot give it to us, will you give

us a letter stating why. T hat is the end of the hearing. The committee 

fc is adjourned.

I

I N D E X

Page

Budget amendment for military assistance to Cambodia--------------------- 1

Additional funds__________________________________________ 43, 45, 47

Amm unition_________________________________________ 53,62, 63, 75, 82

Appropriations to date---------------------------- 60

Assistanc e provided, 1970-74___________________________________71, 72

Authorizing legislation-------------------------------------------------------------- 16

Basis for supplemental estim ate s------------------------------------------------ 64

Bird Air Co.. Inc--------------------------------------------------------------------- 80, 81

Cambodian objectives-------------------------------------- 31

Consequences of failu re to obtain supplemental fun ds--------------- ------- 45

Conservation of supplies-------------------------------------------------------- — _ 61

Corruption________________________________________________ 51, 65-67

Dependence on U.S. ass istance----------------------------------------------------14, 38

Effect of aid cutoff----------------------------- ------------------------------------- 23

Estimates fiscal year 1976---------------------------------------------------------- 90

Expenditure of supp leme ntal fun ds--------------------------------------------- 45

Food aid__________________________________________________ 57, 73-75

Fuel supplies--------------------------------------------------------------------------- 55

Fu ture requ irem ents----------------------------------------------------------------- 54

History of U.S. assista nce to Ca mb odia.,------------------------------------ 78

Indochina costs----------------------------------------------------------------------- 14

Land control_________________________________________________ 50

L aos_______________________________________________________ 59

Legal commitment____________________________________________ 77

MIA’S______________________________________________________ 55

Military advisers--------------------------------------------------------------------- 64

Military situation in Cambodia-------------------------------------------------- 48

Movement of supplies-------------------------------------------------------------- 80

Mutual security tre aties----------------------------------------------------------- 24

National intere sts____________________________________________ 86

Negotiated settlem ent___________________ 28, 29, 31, 36, 42, 50, 68, 72, 82, 84

North Vietnamese Forc es_______________________________________ 79

Objective of U.S. aid _________________________________________ 23

Obligated funds, fiscal ye ar 1975------------------------------------------------- 48

Obligated funds under continuing resolution--------------------------------- 43, 44

Obligation of all fun ds------------------------------------------------------------ 49

Other donor ass ista nce--------------------------------------------- 16-18, 25,29-30. 46

Paris Agreement violati ons_____________________________________ 57

Procurement leadtim e_________________________________________ 44

Public Law 480 comm odities____________________________________ 73

Refugee assis tanc e___________________________________________ 76

Replenishment of drawdo wn____________________________________ 51

Russian support----------------------------------------------------------------------- 68

Size of Cambodian Armed Forces_______________________________ 79

Stateme nt of Hon. Anthony Toby Moffett________________________ 412

Stateme nt of Hon. Bella S. Abzug_____________________________ 95

Statement of Hon. Robert L. Leggett___________________________ 97

Stateme nt of the Assistant Secretary of Sta te for Ea st Asian and

Pacific Affairs______________________________________________ 4

Stateme nt of the Director, Defense Security Assistanc e Agency_____ 9

Strategic value of Cambodia____________________________ ______ 22

Survival of Cambodia_________________________________________ 41. 42

Total aid to Cambodia, fiscal year 1975__________________________ 87

Unobligated fun ds________________________________________ 43. 44, 49

U.S. commitment_____________________________________________ ’ 29

(175)
176

Page

Budget amendment for military assistance to Cambodia—Continued

U.S. military personnel_______________________________________ SO

U.S. personnel in Cambodia___________________________________ 49

U.S. supplies_________________________________________________ 53

Use of fiscal year 1975 funds---------------------------------------------------- 48

Utilization rate_______________________________________________ 61

Increased authorization for Isr ae l, Portugal, and Portuguese colonies in

A fr ic a _______________________________________________________ 115

Is ra el:

Adm inistration support for increased assista nce ----------------------- 153

Budget amendment_______________________________________ 167

Budget support------------------------------------------------------------------ 170

Commodities ____________________________________________ 119

Commodity expenditu re ana lysis------------------------------------------157-160

Congressional action s on budget request--------------------------------- 133

Debt repayment________________________________________ 162, 164

Detailed breakdown of fun ds----------------------------------------------- 152

Economic situatio n_______________________________________ 156

Fiscal year 1975 program---------------------------------------------------- 133

Foreign debt_____________________________________________ 156

Foreign military cre dit sales----------------------------------------------- 163

Ju stific ati on s______________________________________ 134, 137, 142

Need for assista nce ------------------------------------------------------------ 169

Obligation and expenditure ra te------------------------------------------ 153

Obligations, fiscal yea r 1975------------------------------------------------- 153

Pi pe lin e_________________________________________________ 134

Russian assistance to Arab countries------------------------------------ 122

Security assistance----------------------------------------------------- 120, 122,154

Soviet refugees------------------------------------------------------------------ 144

Termination dates for assista nce --------- '-------------------------------- 138

U.S. assistance to Arab cou ntries------------------------------------------ 122

U.S. policy_______________________________________________ 172

Use of funds____________________________________________ 144, 150

Justifications _______________________________________ 131, 134, 137, 142

Middle E ast special requirements fu nd--------------------------------- 119, 139,155

Por tugal a nd Po rtuguese colonies in A frica :

Assistance to the colonies---------------------------------------------------- 122

Authorization ------------------------------------------------------------------ 129

Azores bases____________________________________________ 162, 166

Cape Verdes Islands----------------------------------------------------------- 131

Drou ght in Guinea-Bissau---------------------------------------------------- 130

Obligation of continuing resolution fun ds-------------------------------- 152

Obligations a nd expenditures, fiscal year 1975-------------------------- 152

Political and economic sit uatio n------------------------------------------146, 150

Portuguese a id to Cambodia------------------------------------------------- 143

Prio r-year aid--------------------------------------------------------- --— - — _ 147

Program proposed___________________________ 134, 135, 136, 137, 146

Relationship between Portugal and colonies---------------------------- 130

Termination dates for assista nce ------------------------------------------- 138

Timing of proposal------------------------------------------------------------ 143

U.S. intere sts____________________________________________ 121

Use of fun ds--------------------------------------------------------------------148, 151

Rescissions and defer ral s------------------.--------------------------------------- 118

Reports to the Congress------------------------------------------------------------ 140

Security supporting as sistan ce :

Fiscal year 1975 loan and gra nt levels------------------------------------- 155

Fiscal year 1975 obligations------------------------------------------------- 154

Soviet refugees_______________________________________________ 144

Statem ent of the Deputy Adm inistrator, Agency for Int ern ationa l 

Development ------------------------------------------------------------------ 116

Syrian Jews.

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