To Keep Hope Alive

Underlying Capitol Hill's revolt against foreign aid is widespread misunderstanding about what the term means. Lumped together as "foreign aid" are several quite different kinds of assistance--and none of them is the kind of aid first given in 1948 under the Marshall Plan. Undertaken to help Western Europe recover from its World War II battering, the Marshall Plan had done its work by the early 1950s and was replaced by an aid program basically designed to support the U.S.'s system of military alliances. Of the $3.8 billion total for foreign aid this year, about $3.2 billion goes to provide military equipment and "defense support" for U.S. allies. But the notion persists that foreign aid is still largely, or even mainly, economic--a sort of international dole.

Last week Secretary of State John Foster Dulles cut through the confusion with a plan to put foreign aid on a more sensible basis. To the Senate's Special Committee to Study the Foreign Aid Program, Dulles outlined a new Administration aid policy with two major points:

P: All appropriations for foreign military weapons, as well as for aid calculated to ease the defense-cost burden of military allies should henceforth be part of the Defense Department budget. (But the economic portion of military aid will still be administered by the International Cooperation Administration.)

P: Future economic-development aid should be offered as easy-term loans rather than as grants, and should be financed out of a revolving fund that Congress would replenish as needed (estimated first-year need: about $500 million). Such a fund, argued Dulles, could "accomplish more with less expenditure" than the present rigid system of year-by-year, country-by-country appropriations.

Dulles' outline left many a gap and blank to be filled in. One gap was soon pointed out by Export-Import Bank President Samuel C. Waugh. Would the fund's easy terms undermine the businesslike hard loans that both the Export-Import Bank and World Bank are trying to make the basis for sound international development? "Soft" loans, Waugh told the Senate committee, could "imperil the status of any loans made on a strictly banking basis." Also missing from the plan was any proposal for legislation to encourage private investment abroad.

But the plan was a welcome, if long overdue, beginning. Under Dulles' redefinition, the arguments over foreign aid could now take on some semblance of reality, i.e., defense aid could be explained as such, and economic-development aid examined and defended for its own value.

Asked Georgia's Senator Richard B. Russell, one of Capitol Hill's most outspoken critics of foreign aid: "Just what is the objective, the ultimate objective, of this economic program which you outline?"

Dulles. To keep alive in these countries the hope and belief that they can lift up their economies without accepting the Communist alternative.

Russell. But where are you going to stop it, Mr. Secretary? Is there any time that you can see that you can ever stop it, short of bringing the recipient countries up to our own level?

Dulles. Yes, sir, I do foresee such a time. I believe that as conditions become politically more stable, and as the governments of these newly freed countries become more stable, more dependable, that more and more [development capital will be provided] by private capital. I cannot tell you how rapidly that process will work or when the day will come, but I do not consider by any means that this is an endless task.

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