Part 10 (1/2)
Congressman A. S. J. Carnahan (Democrat, Missouri) floor manager for the Foreign Aid Bill, rose to explain Section 6, which established the Development Loan Fund, saying:
”The United States, in order to provide effective a.s.sistance [to all underdeveloped countries of the world] ... must have available a substantial fund upon which it can draw. The fund must be large enough so that all of the underdeveloped nations of the free world will feel that they will have an opportunity to partic.i.p.ate in it.
”We cannot wisely say that we should make a small amount available the first year and see how things work out. If we are able to offer a.s.sistance only to the select few, we will inevitably antagonize many other countries whose future friends.h.i.+p and cooperation will be important to us ... in addition to an initial authorization of an appropriation of $500 million, the bill includes authorization for borrowing from the Treasury $500 million beginning in fiscal 1959, and an additional $500 million beginning in fiscal 1960.”
Thus, Congressman Carnahan, arguing for foreign aid, outlined some of the absurd fallacies of foreign aid: namely, if we give foreign aid at all, we must provide enough so that every foreign government in the world will always be able to get all it wants. We can exercise no choice in whom we give or lend our money to. If we give only ”to the select few” we offend all others.
Congressman H. R. Gross (Republican, Iowa) asked a question:
”What interest rate will be charged upon the loans that are to be made?”
Congressman Carnahan:
”The legislation does not designate the interest rate.”
Mr. Gross:
”What will be the length of the loan to be made?”
Mr. Carnahan:
”The legislation does not designate the length of the loans. The rules for the loans, which will determine the interest rates, the length of time the loans will run, the size of the installment repayments, and other administrative details, will be taken care of by the Executive Department.”
Congressman John L. Pilcher (Democrat, Georgia) made the point that the manager of the Development Loan Fund, appointed by the President, could lend money to:
”any foreign government or foreign government agency, to any corporation, any individual or any group of persons.”
Congressman Carnahan:
”That is correct.”
Congressman Pilcher:
”In other words, it would be possible for an individual to borrow $1 million or $5 million to set up some business in some foreign country, if the manager so agreed; is that correct?”
Congressman Carnahan:
”If they met the criteria set up for loans.”
Congressman Pilcher:
”The manager ... has the authority to collect or compromise any obligation in this fund. In other words, he can make a loan this month and if he so desires he can turn around and compromise it or cancel it next month which is a straight out grant in the disguise of a soft-loan program.”
Congressman Porter Hardy, Jr. (Democrat, Virginia) said:
”The manager of the Fund has almost unlimited authority to do anything he pleases.”
Congressman Barratt O'Hara (Democrat, Illinois), trying to quiet fears that this bill was granting unlimited, uncontrollable power to some appointed manager, said that the blank-check grant of authority was not really being made to the fund manager at all. The power was being given to the President of the United States, and the manager would merely ”perform such functions with respect to this t.i.tle as the President may direct.”