could not give it to a public agency; I am speaking in general terms of the legislation. I think certainly that this country-you said Ghana has not, but some countries have-I would say that in countries where publicly owned and publicly managed institutions of this sort exist, that they should be given priority in the distribution. That is all. I would not exclude the others.

Senator GRUENING. Would you like your testimony to go into the record as you read it, or would you like it to go as you have submitted it in writing?

Mr. LOWELL. Well, I think that the two are very similar. I did abbreviate as I offered it here, but I think it might well stand in its full

text.

Senator GRUENING. Well, your full testimony will be inserted in the record at this point.

Mr. LOWELL. Thank you.

(The full text of the statement of Mr. Lowell follows:)

STATEMENT OF C. STANLEY LOWELL, ASSOCIATE DIRECTOR, PROTESTANTS AND OTHER AMERICANS UNITED FOR SEPARATION OF CHURCH AND STATE, CONCERNING BILLS PROVIDING FOR THE DONATION OF FOREIGN EXCESS PROPERTY TO NONPROFIT OR TAX-SUPPORTED MEDICAL INSTITUTIONS, HOSPITALS, CLINICS, HEALTH CENTERS, SCHOOLS, COLLEGES AND UNIVERSITIES ABROAD

We are quick to concede, Mr. Chairman, that the existence of a vast amount of surplus military equipment and property abroad presents the Government with unprecedented and complex problems in regard to the distribution of these items for their continued use. We concede, further, that the proposal to distribute these items not only to State-sponsored and controlled institutions, but also to those of sectarian groups is one which has imposing arguments on both sides. It is only after long consideration that we have felt it necessary to make a precautionary appearance in regard to this particular principle in the proposed legislation. While there are two sides to the proposal for including missionary groups as recipients, we feel that the preponderance of evidence and reason may well be found on the negative side.

If this property is made available to missionary groups-hospitals, schools, and other institutions-it will certainly be accepted by them and much of it will no doubt be put to good use. The members of this committee and church officials must not forget, however, how the entire missionary cause has suffered in decades past because of its alleged association with western states. Again and again, the effectiveness of missionary work has been blunted or destroyed by the charge that the missionaries were serving the interest of western imperialism. There has been very little truth to these charges, but their effectiveness in crippling missionary operations has been all out of proportion to the minimal truth. We stress the importance of this matter because the legislation here proposed gives preference to American organizations. We feel that missionary groups will be deeply involved.

The rising tide of nationalism in Africa and Asia, and scarcely less in South America, has accentuated the difficulties of missionary programs. In order to cope with these problems they are now accelerating a process of transferring control of church enterprises to nationals of the countries in which they exist. This step has been taken by so many missionary boards in so many areas, Mr. Chairman, that we may describe it as one of the basic policies of the foreign missionary movement today. At least so far as the Protestant missionary activity is concerned, such a program seems to be general. Now what we have to weigh is the effect of these donations of surplus military equipment to the missionary schools and hospitals. Will this tend to recreate the very image we are trying to efface? To equip these missionary institutions with these materials and properties may well suggest a tie between the U.S. military and the missionary enterprise which will not work to the advantage of either.

It is our feeling that the missionary enterprise of the churches abroad might be more effectively pursued if it did not rely at all on the Government, but only upon such donations as it can receive from individuals both in the countries involved and in the United States. We are suggesting, perhaps, that the

enterprise may be better received and more effective if it is not too big. Its operations must not rival those of the state. Missionary work should never try to become the loaf, but only the leaven in the loaf. To strengthen and widen its program with equipment supplied by the U.S. Government may seem to provide a short-term advantage, but in the long run may impede rather than accelerate. There are other features of our foreign aid program which offer parallels to these proposals. One of them is the surplus commodities distribution via church agencies. We do believe, Mr. Chairman, that serious doubts as to the wisdom of this program have been raised by its operation to this point. We understand that the program is supposed to be audited by CIA, but that it never has been audited because there is no appropriation for the purpose. Despite the lavish praise of the surplus commodities program which has been seeded into the secular and church press, our own misgivings have steadily grown. The "Christian Century," a prominent Protestant publication, published in its issue of June 18, 1958, a careful analysis of the church administered relief program on Formosa. This is the program carried out under Public Law 480, title 3. According to the findings of the "Century" this program, largely financed by the American taxpayer, has been used for shameless proselyting programs on Formosa. For example, Roman Catholic churches were built on Formosa in places where there were no Roman Catholic people, and they were built to serve as distribution centers for these commodities. The commodities were frankly used as come-ons to win converts and as bribes to keep the faithful faithful. The U.S. Government in its official survey was sharp in its criticism. The "Century" comments that the Secretary of Agriculture, Ezra Taft Benson, was "deeply disturbed" at the use of U.S. surplus goods to make converts.

A further weakness of the commodities distribution on Formosa has been the confusion between Protestant and Catholic administrations. A theoretical "50-50 division" of the responsibility did not work out because each group was scrambling to get the cards of its own members. One official at food distribution headquarters commented: "We have begun to wonder if distribution under Government auspicies may not be better in situations where large-scale relief programs are required." There are instances, not only of Roman Catholic but of Protestant abuses of the surplus commodities program involving its use for the pursuit of purely sectarian advantage. Experience of this kind is not reassuring.

Indeed, Mr. Chairman, so widespread have been the reports of the abuses connected with the distribution of surplus commodities through sectarian groups that they certainly invite a full-fledged investigation. We understand that none has been made. We should like to recommend that this be done.

Another practical difficulty which has been encountered in the sectarian donation of surplus commodities is a rivalry between the church and the state. It is well known that there was bitter strife over a long period between the Government and the church in Poland over the distribution program there. Both coveted the "prestige" that was associated with the control of the distribution. Commodities deteriorated while this protocol dispute went on.

Another program which offers some parallels with what is proposed here is that of the ICA. Certain features of this program have also come under criticism because of church pressures in regard to awards. For instance in Bolivia the Muyrina project which was awarded to a religious order, the Salesian Brothers, to the disregard of what has been widely claimed to be a superior bid by another religious group. While one must be cautious in his assessment of a situation like this, there does appear to be some ground for a belief that the successful bidder for the $1,600,000 property achieved success by exerting political influence on the Government which made the final determination in the matter. The property has now been turned over to this order and it will enjoy complete control regardless of its ability to live up to the terms of its bid. The prospects of church pressures on the state in connection with the donable property appear to be considerable. It also seems evident that in many situations where a state church exists, this church will receive not only the lion's share but perhaps 100 percent of the donations. We see a counterpart of this in the surplus commodities program where one church has a monopoly on the donations in certain countries. It is, of course, truthfully contended that this church is the largest church and the best equipped to be a donor. Still, the fair play involved in arrangements of this kind may be suspect.

We should like to state for the record that we also have serious reservations in regard to proposals which have been or will shortly be made to allow military

surplus to be used in payment for labor in countries abroad. The labor would be for labor in the nature of public works. There may be a loose interpretation of public works against which we should guard. In Ireland, for example, all schools are sectarian. In Spain all high schools are owned by religious orders. It is conceivable that "public works" unless rigorously defined might be construed as including construction of institutions.

Specifically, Mr. Chairman, we should like to recommend that this legislation give first preference in the distribution to institutions which are publicly owned and operated. We believe that such a preferential rating for public institutions would tend to bring these procedures more into harmony with domestic policy. Under the first amendment to the Federal Constitution and the constitutions and statutes of 48 of our 50 States, tax funds are denied to churches and their institutions. There have been certain "health and welfare" grants to church institutions, to be sure, but they have been with the possible exception of the Hill-Burton Act, minor and peripheral. We have, generally speaking, held the money line against any general appropriations for church institutions. We believe that this policy has been wise. We believe that we should be extremely cautious about enactments which might create precedents that could later be cited as a basis for a departure from this tradition here in the States. A major factor in the felicitous development of church enterprises in this country has been the plan of voluntarism for their support. The resources of the state derived through taxation have not been available for the building up of oppresive clerical institutions as has so frequently been the case in other lands. Being on their own financially, our churches have had to learn to be close to their people and to count on their support. This has made for a virility in

our church program which has been the envy of others.

It has been argued that to exclude church enterprises from tax support is "discrimination" against the churches. In a sense this is true. Proposals we have made in regard to this legislation would tend to discourage church-related and -controlled institutions as donees of the military surplus. State-operated organizations would be encouraged and even private secular groups might come ahead of sectarian groups. Yet the "discrimination" thus practiced is simply a logical extension of the principle of separation of church and state which has been such a fortunate feature of American policy. To strengthen and further abroad what we proscribe at home will not aid our national aims. To enhance the image of a state church what may well develop from the operation of this legislation is a further identification of our foreign policy with the idea of a union of state and church. This, we believe, should be avoided.

Senator GRUENING. Have you any suggestions or has your organization any suggestions as to amendments to this bill that would carry out what you advocated?

Mr. LOWELL. Yes. I would suggest an amendment which wouldnow, there is a feature in this legislation-I do not recall the exact words, but it would tend to give priority to those groups which are either directly or indirectly operated from the United States. I would say that, correspondingly, preference could be given as donees to groups which were publicly owned and managed in the countries involved; that is, where the distribution is to take place.

Senator GRUENING. In other words, on page 3 of the bill, section 405 (c), you would like to have an insertion "preference given to publicly sponsored organizations"?

Mr. LOWELL. Yes.

Senator GRUENING. Where possible?

Mr. LOWELL. Publicly owned and managed.

Senator GRUENING. Publicly owned and managed.

Mr. LOWELL. Organizations, yes; yes, sir.

Senator GRUENING. Thank you very much. It will certainly be considered by the committee.

Now, I think that concludes the testimony of witnesses who wanted to testify on S. 2725 and S. 2732. Now we have a number of witnesses

who want to testify on S. 3154, and we have Max Kampelman, counsel for the American Association of Surplus Property Importers.

TESTIMONY ON S. 3154

Mr. KAMPELMAN. Thank you, Mr. Chairman.

Senator GRUENING. Mr. Kampelman, have you a written statement? Mr. KAMPELMAN. I do, Mr. Chairman. I would propose, since it is a lengthy statement, that I omit portions of it, with the understanding that

Senator GRUENING. That will be very agreeable, I think. Your full statement will be introduced into the record as presented; but if you will be kind enough, in the interest of saving time, to summarize and hit the high spots, and give us an idea what your basic thoughts are.

STATEMENT OF MAX KAMPELMAN, COUNSEL, AMERICAN

ASSOCIATION OF SURPLUS PROPERTY IMPORTERS

Mr. KAMPELMAN. Yes; I will eliminate portions of the testimony with that in mind, Mr. Chairman.

Our association, Mr. Chairman, is a newly organized group, and we came into being primarily to defend our members against an interpretation of a Federal statute by the Department of Commerce which, in our judgment, threatens the business survival of our members.

Senator GRUENING. Well, tell me, what is your organization?

Mr. KAMPELMAN. The American Association of Surplus Property Importers.

Senator GRUENING. You import property from other countries to the United States?

Mr. KAMPELMAN. We import foreign excess property, which is that property sold by our Defense Department and its agencies abroad as surplus. We purchase that property under sealed bid and by auction, and we then import it into the United States. We also purchase similar property here in the United States when it is sold at domestic depots.

Senator GRUENING. And what do you do with the property that you purchase in the United States? You do not export that, do you? Mr. KAMPELMAN. On occasion, that property is exported, as my testimony will indicate. On other occasions, we will sell it here in the United States; frequently, we manufacture it; on occasion, we repair it; on other occasions, we sell it as is, depending upon the condition of the item.

Senator GRUENING. How many surplus property importers are there in your association?

Mr. KAMPELMAN. It is difficult to know how many there actually

are.

There are in our association about 25 or 30 importers. On the other hand, there are more than 5,000 dealers in surplus items, which include items that are imported. They are represented also by the National Auto and Truck Wreckers Association, as well as by other surplus organizations, and we are authorized to indicate their support for the bill as well.

Senator GRUENING. Are there surplus property importers who are not members of your American association?

Mr. KAMPELMAN. I would assume there are.

Senator GRUENING. But perhaps not many; most of them are members?

Mr. KAMPELMAN. Yes, they are.

Senator GRUENING. And you have about 35?

Mr. KAMPELMAN. Yes, about that.

Senator GRUENING. Well, apparently the importation and disposal of truck surplus property is a major business, is it not?

Mr. KAMPELMAN. It is a major business. Many, many thousands of people are employed in connection with that business. These members of our association might, in the vernacular, perhaps be called wholesalers rather than retailers. And stemming from them would be many dealers in community after community whose business activity relates to surplus, and they belong to their own associations there.

Senator GRUENING. Have you any idea in round numbers what the annual value of the surplus property that was handled by your association would be?

Mr. KAMPELMAN. I could give you the figure that was mentioned by the Department of Defense as to the total amount at acquisition cost of surplus property which was sold abroad, but not necessarily sold to our members. And that figure that has been used is about $350 million.

We are told, in the course of evidence before the House committee on this subject, that about 20 percent of that total is purchased by American business people abroad, which would mean, let us say, $35 million to $40 million. We are also told that, of that amount, perhaps half would be returned to the United States, and that some American purchasers do not desire to return it here if they have customers abroad.

Senator GRUENING. I take it that most of the surplus property that arrives in the United States originates with our Military Establish

ment overseas.

Mr. KAMPELMAN. That is correct, sir.

Senator GRUENING. And what are the principal articles? Is it automotive equipment?

Mr. KAMPELMAN. A great deal of it is automotive equipment. This automotive equipment takes two forms. It would take the form of the vehicles themselves; but an important item is spare parts for the vehicles, and it is difficult for me to know which is really the more important. The spare parts are very essential items.

În addition to the automotive equipment, construction equipment is sold abroad. And then there are soft goods-shoes and the like. Senator GRUENING. Clothing?

Mr. KAMPELMAN. Clothing, yes, and the like.

Senator GRUENING. Now, does your association act as a unit in bidding?

Mr. KAMPELMAN. No, it does not.

Senator GRUENING. Individual importers go to various places, various depots, and make these sealed bids, is that it?

Mr. KAMPELMAN. Yes. It is a highly competitive business.