Mr. BELL. It would, sir, and I apologize for not highlighting that. That was in my statement, as you suggest. We are asking for that only in relation to Vietnam, and only for the special reason that we are necessarily building up our mission staff and, therefore, the administrative support for that mission staff, to a very large amount. We are not exactly sure how much we are going to need, and we are not sure how long we are going to need it and, therefore, with the Budget Bureau's concurrence, we are asking for this special and unusual arrangement, so that we can handle the administrative costs of the expanded Vietnam program to the amount of $1,400,000, which is the present estimate, from supporting assistance funds. That is, I think, what underlies it, Senator. Senator CARLSON. Is this definitely tied down to Vietnam? Mr. BELL. Yes, sir; only for the costs in Vietnam and those in Washington to backstop the Vietnam effort directly. It is quite tightly related, thoroughly limited to that purpose. Senator CARLSON. Your supplemental request this morning also includes the Dominican Republic and other areas. Mr. BELL. Yes, sir; but this particular proposal does not. It would be limited to Vietnam. Senator CARLSON. I will say very frankly that I would be very cautious about voting for an open-end authorization for administrative expenses, but I assume you have made a case and made a study of it. Mr. BELL. Right. Senator CARLSON. I did read in the press this morning, or within the last few days, that plans are being made to hire thousands of Vietnamese and place them on the rolls, as, I assume, good missionaries for improving the political and economic situation. I just wondered if you had that in mind when you come up with this open-end authorization. Mr. BELL. No, sir; the people you refer to, I assume, are the teams of persons who will be hired by, and members of, the Vietnamese Government-not the U.S. Government-who will work in the village as part of the so-called rural construction or pacification effort. There will be a number of thousands of such persons but they will be like any other members of the Vietnamese Government establishment. They will not be our employees. Senator CARLSON. Not paid from U.S. funds? Mr. BELL. Well, we may support their training or otherwise supply materials for them but they will not be U.S. Government employees. They will be Government of Vietnam employees, provincial government employees. CONTINGENCY FUND Senator CARLSON. I noticed the President in his message to the Congress on the full-year authorization requested only $70 million in contingency funds. Now, if we grant this authority to use regular aid funds for administrative expenses, isn't it reasonable that that could take care of an increase in contingency funds? Mr. BELL. Well, the administrative expenses, Senator, are nowhere near the scale of these totals. Of the $315 million of additional sup porting assistance that are requested-in the submission that is before you-only $1.4 million is the estimated additional administrative costs for the Vietnam operation that we would like to pay from those supporting assistance funds, and none of them would be available for use in the Dominican Republic or anywhere else. It is only a special and limited Vietnam authority we are asking for. Senator CARLSON. I notice in the Foreign Assistance Act of 1965 Congress did vote $54,240,000 for administrative expenses. Mr. BELL. That is right, yes, sir. That was not an increase over the previous year or at least no substantial or significant increase. It is because of the pressure of the greatly enlarged staff that we have to hire and support in Vietnam, that our administrative costs both there and here have risen in the amount I have indicated. It is hard to predict exactly how far it will go, and it is certainly hard to tell how long we will need it. But they are identified jobs related solely to Vietnam, and we do regard this, as I am sure you would, as a very unusual arrangement and not a precedent. Senator CARLSON. I have a very high regard for you, Mr. Bell, and while you say $1.4 million if we authorize this, it could easily be $2.5 million if required. Mr. BELL. Well, this is our estimate as to what we think we will need. We were burned last summer by underestimating the costs in Vietnam and we think we have made a generous estimate here. Furthermore, sir, as you will note in the section-by-section analysis of the draft bill that is before you, we could not use any of the supporting assistance funds for administrative purposes except under a Presidential determination. As you know, the President in all circumstances is very tight on personnel and administrative costs. So that is a special and additional safeguard that the committee can consider. REQUEST FOR THE DOMINICAN REPUBLIC Senator CARLSON. I would like to get into the Dominican Republic for a moment. I notice you are requesting funds of $37 million. What are we going to use that for? Mr. BELL. The $37 million figure, sir, is the amount we have al ready committed from this year's contingency fund. We are asking for $25 million more in this new request that is before you. The funds are being used as budget support, that is to pay part of the costs of the Dominican Government current expenses and capital expenses. With the difficulties that arose down there last spring, the revenues of the Dominican Government dropped almost to zero. They have been recovering slowly. We have been bridging the gap between what we regard as their essential expenditures and their revenues. That gap has been becoming smaller. Last month, January, the gap is estimated at about $32 million. We hope that the gap will vanish altogether before too long. But over this past few months. it has been substantial, and the amount of money that has been put into the Dominican Republic has necessarily been large for this purpose. In addition, we have a more normal AID operation in the Dominican Republic for technical cooperation, technical assistance projects, and for a few capital-type development projects-irrigation, highways, and so on-which are intended to help improve the permanent economic situation of that country. But the bulk of the money has necessarily gone to straight budget support during this emergency period. Senator CARLSON. Are these funds used to pay, for instance, the police department and the civilian operations of the Government in Santo Domingo? Mr. BELL. We have made a contribution to the budget of the Dominican Government, which, in essence, is a contribution to all the things they are doing, police, teachers, public works officials, and all the rest; yes, sir. Senator CARLSON. Is there any evidence that we may some day be relieved of that burden? Mr. BELL. Oh, yes; the gap between the Government expenditures and receipts has been narrowing, and we expect it to be eliminated altogether. We are not sure how quickly that can be done. The Dominican Republic, as I am sure you know, sir, is a very sick economy. The legacy of 30 years of Trujillo was a very badly shattered economic situation, and it is not-it could not be under any circumstances a strong and self-supporting economy in the near future. On top of that basic problem came the special emergency of last spring. So that I would be misleading the committee if I gave you the impression that the economic problems of the Dominican Republic will be solved quickly. The temporary and emergency budget support we have been providing over the last several months is already declining and will be reduced very substantially in the near future. But the underlying economic problems of that country remain very serious. Senator CARLSON. I have read-and that's all I know about thisthat we spent $200 million for military, economic, and civilian aid in the Dominican Republic in the last year. Would that be somewhere near an accurate figure? Mr. BELL. You mean in the calendar year 1965? It could be, Senator. Senator CARLSON. I read it and that is the reason I wondered. It is probably not your figure. Mr. BELL. The economic assistance would be approximately $100 million, since April 24, 1965. The military, the costs of having our military troops there I just don't know. Senator CARLSON. If you could get that figure for the record, I would appreciate it. The CHAIRMAN. The Senator's time is up, I believe, Senator Gore. Mr. BELL. Excuse me, Mr. Chairman. I am advised that the economic and military costs together are closer to $135 million than the $200 million. Nevertheless, this is the order of magnitude. (The figures referred to follow :) U.S. assistance commitments to the Dominican Republic, calendar year 1965 Expenses of U.S. military forces in the Dominican Republic over and above the amount normally required for their maintenance_‒‒‒‒‒‒‒ 30, 000, 000 Senator CARLSON. That is all, Mr. Chairman. The CHAIRMAN. Senator Gore? VIETNAMESE RICE IMPORTS Senator GORE. Mr. Bell, it would appear from evidence presented by you and adduced during this hearing that it shows very clearly that this conflict in Vietnam is surely as much political, economic, and social as military, if not far more so. One thing that would illustrate that is that you appear this morning making an urgent request for large amounts of money to accomplish many purposes, one of which is to import rice into Vietnam. Mr. BELL. That is right, sir. Senator GORE. Traditionally, Vietnam has been one of the major rice surplus producing countries in the world; is that true? Mr. BELL. Yes-well, I don't know about the word "major." It certainly has been a rice exporter; yes, sir. Senator GORE. Well, sometimes the Mekong Delta is referred to as the rice basket of Asia. Whether that is a correct description, I don't know. In any event, how much are you asking for to finance the importation of rice? Mr. BELL. About $21 million, Senator. Senator GORE. What percentage of this rice will be consumed in Saigon ? Mr. BELL. We will import the rice for the commercial market in South Vietnam and for government distribution to the refugees. The refugees, very few of them, are in the Saigon area. They are mostly up along the coast, in the northern and central provinces. I don't know that I can answer the question as to where we expect it to be consumed. Mr. POATS. The breakdown, I will have to check for the recordas I recall my memory is about 35,000 tons up country and about 20,000 tons in Saigon per month. Mr. BELL. Regular consumption. Mr. POATS. Regular consumption from Government stocks. (The following figures were supplied for the record:) DISTRIBUTION OF RICE IMPORTED UNDER AID FINANCING Consumption in the rice deficit areas over and above that produced locally within those areas is estimated at 57,000 M/T per month or 684,000 M/T for 1966. The monthly figure can be broken down as follows: Saigon/Cholon--- M/T 15,000 Total______ 29, 000 8,000 5, 000 57,000 In 1965 approximately 420,000 M/T of rice were shipped from the Mekong Delta to the market in Saigon, and from there distributed through commercial channels to the rest of the deficit provinces. It is estimated that the 1966 harvest will be of approximately the same size as the 1965 harvest. Public Law 480 (title I) and AID-financed imports supplement rice shipments from the delta. In addition to the difference between delta surpluses and deficit area requirements, imports are being used to build up security stockpiles in Saigon and provincial capital cities. Senator GORE. From a reading of Secretary McNamara's letter and your previous testimony, it would appear that the city of Saigon would face starvation except for our aid, is that correct? Mr. POATS. Senator, I think the Government could obviously solve its rice problems by withholding rice from the deficit area up north and take care of Saigon. But if it is to take care of this problem in an equitable way, then Saigon would certainly be suffering if it did not have aid. Senator GORE. I don't raise this point, Mr. Chairman, as an indication of my opposition to this request. Obviously this is a very costly operation, and a very dangerous one, but it would appear that the Vietcong have been discouragingly successful in stopping the rice of the Mekong Delta from going into the hands of the Government in Saigon. Mr. BELL. There have been two effects of Vietcong action, Senator: One is to prevent planting or cultivation or fertilization of substantial areas, so that the rice harvest is less than it otherwise would be; and the second is the interruption of transportation routes, and the seizure of large amounts of rice directly for use by the Vietcong-the buildup of their stocks, for the use of the larger number of troops that have been brought down from North Vietnam and so on. So that both because production has decreased in parts of the normally agricultural surplus areas because of the direct effects of the war, and because the Vietcong have seized substantial parts of the rice output, and have interrupted transportation to Saigon and other |