Full text of Reuss Proposal to Let Dollar Float Has Great Merit

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A
18148

CONGRESSIONAL RECORD— SENATE

A. No, IJbaven't. The Secretary of the Army
comes into the picture only after the current
review by General Connor, the 3rd Army
Commander, Is completed and then the two
intervening court reviews are completed—
the Court of Military Review and the Court
of Military Appeals. The first review 1b man­
datory, the second one depends as one of the
parties’ appealing to the civilian court, the
Court of Military Appeals. And only after
those three intermediate reviews are com­
pleted does the option arise of going to the
Secretary of the Army with respect to sen­
tencing.
Q, So you probably won’t get to do It then
before you leave In June?
A. Oh, no, th a t’B'quite clear.
Q. Mr. Secretary, the defense lawyers at
Fort Meade yesterday charged th a t your de­
cision* with regard to Oenerala Koster and
Young were prejudicial in the case of Colonel
Henderson. Can you comment on that, sir?
A, No* I don’t think I should—I’ve con­
sistently taken the position th a t I shouldn't
comment on the My Lai cose at all for good
legal reasons, and I think it's safer to adhere
to that.
q . Then you presume that it waa not pre­
judicial or th a t it did not indicate command
influence?
A. That’s right.
q . To go back to yo\\r first answer—you
said the wisdom of our entry Into Vietnam
eould not now be assessed. Could I ask you,
in the light of your long Borvioo and the
turmoil here at homo and the long drawn
out nature of the war, If you now have any
doubts about our entry into Vietnam?
A. Yen, I think I would, tout as 1 Hay, I'm
not myself “-I haven't vouched a personal
final ootfoluMan, l think If It turns out wo
achieve our objective—and I think thero Is
a good chance that we still can—namely, that
they stand on their own feet with a viable
and stable government th at ean defend It­
self, andthen if domestically wa recover from
our discouragement and current divisive altnation, then I think on balance It may turn
to have been the wlap thing to do, I think
we’re going through today a critical period
where we are ah a nation discouraged by our
experience in Vietnam, discouraged toy the
other problems of our society aa a whole—
drugs, for example, and the polarlaatlun
among the raoea, If this were to result,in a
return to an Isolationist policy or a neolaolatloniat policy, If this were to result In
significant unilateral reductions of force in
Burope, whloh in turn caused the Germans
to accommodate w ith’the Soviets and vmdermlne the possibility whloh looks so promlsIng-today with the potential entry of Europe
in the Common Market—the potential of de­
veloping stronger ooheaiveness among the
Western European countries and a greater
power to contribute to their own defense.
If that were all undermined by a revulsion
with respect to our experience in Vietnam,
then I think surely it would have been an
unwise thing to have done.
I hope and think th at we’re mature enough
not to let th at come about and to distinguish
between Asia and Western Europe. I think
myself the Nixon policy, it is clear, means in
ABla a greater reliance on allied manpower,
but I think it also Is clear th a t it means
Western Europe la still the center of focus
of our international policy and th a t stabil­
ity in Western Europe is absolutely essential
to the kind of free world that we know, and
that we will make the sacrifices th a t are,
neoessary to maintain the force levels, to
maintain stability, and to buy the time.
These foroe levels in my view buy time for
Western Europe to develop these political
institutions whioh you see growing right be­
fore your eyes, the Common Market being
the most im portant one. Then as those in­
stitutions develop, the tremendous resources
of Western Europd—which are greater than
the resources of all the Warsaw Pact put




together, greater in population, greater in
Gross National Product—those great re­
sources then can be effectively used in their
own defense. And then our TJ.S. burden will
be lessened, but It won’t be lessened if we
don’t stay the course and have the patience.
If we unilaterally move now to withdraw,
we’ll undermine this hope; and there’s a real
danger th at the Germans will turn east as
they have so often in their history.
Q. Do I understand you to say th at the
German Ost Polltlk is Inconsistent with a
Strong Common Market?
A. No, I don’t. In fact, the Ost Polltlk 1b,
as Helmudt Schmidt has made so clear, de­
pendent on a strong NATO. .The building of
bridges in the proper way from a strong Ger­
many to Russia Is made possible only by a
strong NATO. That’s what I understand
Ost Polltlk is. But If we unilaterally with­
draw, then we force the Germans into ac­
commodation with the Soviets, sort of a
Finlandlzation of Germany; and th at’s
something entirely different from what they
now contemplate by OBt Polltlk.
Q. Mr. Resor, again back to the figures.
You said that you need the draft extension
two years if you are not going to run 100,000
men short of the minimum number the
Army will have on board. What la th at num ­
ber from whloh you would be 100,000 short?
A, I t’s certainly no more than 000,000
and even at an Army as low as 000,000 you
would still be at least 100,000 short, I think
ftotually It’s a figure lower than that. I
think It's a flguro around 870,000, and you
would be 100,000 short of th a t figure,
That’s the end of FY 7a figure?
tC 78. Now, this Is not a—we haven’t set
the 73 budget yet, and so this is Just look­
ing at the impact, of a no-two-year exten»Mon, trying to got a range of what the
impact would be, Now, of course, you would
have a very serlous-~moro serious—impact
on the Reserve Components, They would
go down a couple of hundred thousand below
their currently mandated manpower level.
Q. Mr, Secretary, would you say th at over­
all in future our country might be better
off if our Army did not get involved In an­
other Asian land war?
A. Yea. Well, I don’t think, again, I think
It’s trrribly unwise to generalise for long
periods in the future, but I think certainly
one would say th at we wov;ld weigh much
more carefully the use of ground troops in
Asia because, I think, we see more clearly
today the coats of it, We Bee more clearly
the difficulties of limited war; but I think
one of the things that was done right In the
Vietnam War, and was done right In the
Korean War was that It was a limited use of
power for a limited objective, whloh of oourse
turned out successfully in Korea. Korea is, I
think, something we can be very proud of,
the result of our efTort there, because today
Korea’s Gross National Produot expands at
10 per cent a year. It has a strong ground
force capable dt'defending themselves against
the North Koreans alone, and in South Viet­
nam we learned from the Korean War and we
continued the polloy of a limited applica­
tion of military power, I think the days of
all-out war are gone, and I think it's clear
th at our policymakers have aooepted that
conclusion, of course, because of the prob­
lems of nuclear weapons.
Q. Has Vietnam shown, Mr. Secretary, that
our Army possibly oannot win a conclusive
victory against jungle guerrillas?
A. No. I think vlotory is an ambiguous term
whloh oauses, I think, a lot of confusion if
applied to the Vietnam scene. I think you
have to keep firmly in mind what our ob­
jectives are. Our objectives are th at the Gov­
ernment of South Vietnam shall be viable
and be able to stand on its own feet, and I
think we have1the potential to aohieve that
objective. I don't think, a s,I indicated the
other day, th at it's by any . means assured;
but I think th at we have a;;]good chance of

June k, 1971

achieving that. We will have done it, if we
do, by this total strategy of the military,
the economic, and the political together;
and that it what I think we’ve learned from
the Vietnam War—a better understanding of
how to deal with guerrilla attacks and in­
surgency.
Q. But does it seem practical to eradicate
a guerrilla force?
A. What we’ve learned Is th at you have to
first f u r n l B h relative security for most of
the population. T hat’s what’s going on in
the Delta today under General Trung, who is
as fine a military leader as there is, as we
have In our Army. He has set up fire bases
throughout all the enemy based areas, and
he’s going to provide relative security in the
Delta. That doesn’t mean you’re not going
to have some terrorism, and that will con­
tinue, and continue for a long time; but if
you have relative security, then you control
the population, and the guerrilla movement
no longer can replace its losses. And grad­
ually over time it will be able to be handled
by the police power of the state more and
the military less.
Q, Aren’t you saying, sir, that It’s Impos­
sible for one side to fight a limited war? We
say we’re fighting a limited war but they’re
not, they’re fighting all out.
A. I’m talking limited in the sense of we’re
not using our total military power, namely
for example, our nuclear power. We’ve never
bombed cities, and I think quite wisely so,
Thank you very much,
After coordination with Mr. Kester, Dep
ASA(M&RA), LTC Smith contacted Fred
Hoffman, AP Pentagon Correspondent at 1210
hours, aa May 71 and provided the following
Information regarding his question on costs
for a volunteer force:
•’The Gates Commission underestimated
the number of accessions required—under­
estimated by approximately 36,000 the num­
ber of true volunteers (partly because they
did not have the benefit of the experience
gained from the lottery system ); and did not
differentiate for oombat skilled and non­
combat skilled personnel,
“Our accessions plus the number of true
volunteers, computed by the Gates Commis­
sion formula, indicate th a t the cost for FY
73 will be In the neighborhood of 7.5 billion
dollars—although this too Is still a very im­
precise figure—instead of the 3,7 billion dol­
lars estimated by the Gates Commission,”

REUS8 PROPOSAL TO LET DOLLAR
FLOAT HAS GREAT MERIT
Mr. PROXMIRE, Mr. President, there
is no Member of Congress who sur­
passes Congressman Hknry Reuss of
Wlsoonsin in his knowledge of interna­
tional financial and eoonomlo affairs.
Time and again he has proposed innova­
tive and constructive ideas which the
highly conservative international bank­
ing community has originally opposed,
but which in the end they have adopted—
usually without giving Congressman
Rsuss the great credit he deserves.
Now, once again, he has made an inno­
vative and constructive proposal. And
once again the Treasury and the inter­
national financial community has poohpoohed the idea. But Congressman Rkuss
is right and they are wrong. I predict
that in the not too distant future they
will accept his proposal.
Congressman Rxuss has introduced a
resolution to let the dollar float in the
international currency markets. At the
present time its price is pegged. Unlike
other commodities—and money is a com­
modity—Its price is fixed arbitrarily.
But a floating dollar would introduce

June 1>, 1971

CONGRESSIONAL RECORD — SENATE
The U.S., i$e adfTsd, ought to compensate
foreign central binks for any loss in the*
value of the doll/jr reserves as of June 1,
provided they &vom gold and other dealings
th at could frustrate the ‘'unilateral" action
he recommends.

18149

sons, half were deferred and only 28 ever
served in Vietnam. One was wounded—only
one.
For comparison, let us look at figures from
a single minority group. Forty-five per cent
of Mexican-Americans eligible for the draft
are drafted, while only 19 per cent of Anglos
eligible for the draft are drafted. As a result,
the former ethnic group, which constitutes 1
only 5 per cent of the American population
makes up 20 per cent of the casualties In
Vietnam.
E. James Liebermah, from whom comes
much of the argument presented here ("War
and the Family,” Modern Medicine, April 10,
1971) calls this attrition "genasthenia" (race
weakening) to bring home the concept of sys­
tematic, albeit unwitting, attenuation of
ethnic group B tr e n g th . As he states, "This
group who are hurting the m ost—and griev­
ing the most—cannot be heard above the
regimental drums, the blaring television, the
Congressional oratory” and are living in
poverty and deprivation—tho tragic version
of a silent majority.
To me, such examples constitute a cogent
argument against the present military draft
system.

into the present-day international money
mechanism the automatic adjustments
reflecting the genuine economic condi­
tions in the world. If U.S. prices are too
high, if the economy is sated with infla-r
tion, then a floating dollar would adjust
those prices internationally to their real
TRIBUTE TCI- AUDIE MURPHY
market price. That would help stimulate
our exports, when prices are too high;
Mr. TOWER. r. President, on Friday,
bring in dollars from abroad, and help May 28, a tragicj airplane accident took
to make economic adjustments long over­ the life of one f America’s most disdue.
tinguished soldi' s. Audie Murphy was
Congressman R euss is right. It is only 20 years ild when his heroism
amazing to me that his obviously correct stunned Americi and gave each of us a
proposal is opposed by the Treasury. For sense of pride fc t he was ours. During
the only substitute for it is a controlled World War II,
war of unprecedented
market and a controlled price which bravery, Lieuten jnt Murphy became our
otherwise highly conservative bankers most decoratecji erviceman. In and of
shun.
themselves theki decorations had little
What they appear to want is competi­ meaning—a pie
of metal, a scrap of
tion for others* but controlled prices for cloth. He gave
ost of them away to
themselves.
children. It Is th fact that each of these
I commend the Reuss position to the medals represen some heroic act, a risk
Congress and the country. I ask unani­ of life and safet: that gives meaning to
mous consent that a short article from the fact that Ain e Murphy was our most
G e o r g e M a r g o l ib , M .D ,
the Wall Street Journal reporting it and decorated hero. e was our bravest hero,
Hanovkji. N.H., M a y 17, 1071.
the opposition to it be printed at this Of 235 men in hi; original company, only
point in the Record.
he and a suppl; sergeant survived the
There being no objection, the article struggle from Iti ly to southern Prance. j.
THE SOLAR ENERQY
\vafc ordered to be printed in the R ecord,
ALTERNATIVE
It is Audie Mi ii‘phy'3 selfless courage ! ,
as follows:
that serves as ai nsplration to all Amer- , Mr. HATFIELD. Mr. President, we all
RttPHEaiSNTATtvrc Rkuhs Would List Dollak leans, young fi d old. The altruistic ; recognize the fact that th iB country is
"F loat" Down; Resolution Sbhn At ­ willingness to li f down one’s own life
| facing a grave energy crisis. A rising
tracting Little I ntbhubt
for his comrhdtj is man's most noble I population with increasing power needs
WA8HINGTQN.4-A resolution calling for the trait, Lieutenant] urphy exhibited that j must have onorgy supplied in a mannei;
Nixon admin istration to let tho doll nr "float"
I which will not leavo us with a serioulfe
down in international curronoy markets was trait from Casab incft to Franco,
I take particull r pride in the fact that 1 damaged environment.
. I
introduced by Hop. Henry Reuss, but drew
Audio Murphy w i from my home State, ! Among the alternatives which must bo
an instant Treasury rebut tal,
The proposal by tho Wisconsin Democrat, He was born nj ar Kingston in Hunt j considered to meet long-range power
who heads tho Initornatlonal exchange unit County. Tox. He ontrlbuted enormously i noods is solar energy. Certainly, more
of the Ooiwrfmstonal Joint Economic Com­ to tho Texas hei tape of courage which ! rosources must bo dlroctod toward remittee, is similar to the views of a number has found its \v| ,y from the Alamo to ! soarch and development of this nonpol­
of European financial authorities who con­ ,Khe Sanh. Wo. s all not forget him.
luting form of energy.
tend the dollar Is overvalued and should pti
The International Solar Energy So­
allowed to drift moderately lower.
ciety reoontly held a conference at tho
Howevor, thoro has been little thought
ANOTHER SILENT MAJORITY
NASA-Goddard Space Flight center near
about aueh matters in Congress generally,
Mr, MoGOVEl . Mr. President, a New Washington. I ask unanimous consent
analysts say, and they figure the resolution
will attract little interest. A Treasury spokes­ Hampshire doot r has written to the i that the keynote address of Dr. Manfred
man said emphatically th at Mr. Reuss’s pro­ editor of the Ne^ York Times concem- I Altman, of the University of Pennsy^
posal "Is certainly not the position of the ing the inequitie* of the draft. Of par- ! vania, be printed in the R ecord,
U.S. government” noting that Secretary ticular concern re his remarks which
There being no objection, the speech
John B, aonnally made clear last week in a indicate that c t rtaln minority groups j was ordered to be printed in the Record,
speech in Munich th at "we aren't going to
are contributing heir sons to the Armed | as follows:
devalue" the dollar.
A d d r e s s b y D a. M a n f r e d A l t m a n
At present, the dollar is held to a fixed Forces in far grei tr measure than would j
A keynote speakor is to be a fighter. He
value by the Treasury's practice of paying be required by thj ilr share of the Nation’s
| la to set the tone for a meeting not unlike
out gold at the official price of $36 an ounce population.
I ask unanimoj is consent that the let- ‘ the football^ coach who inspires hiB team
to foreign central banks wishing to turn in
excess dollars. "Only by closing the gold win­ ter from Dr. Ge< ge Margolis be printed to go out and conquer.
Unfortunately there is also another kind
dow," Mr. Reuss argued, oan the dollar "And in the R ecord.
a new and sounder relationship" with the
There bing no objection, the letter to of keynote speaker—namely the one. who
comes not to praise Caesar, but to bury him!
Japanese yen and other undervalued curren­ the editor was o:
dered to be printed in
cies, thus avoiding "deterioration of our trad­
Some of my remarks may suggest the lat'
iter, but please believe me when I tell you
ing position and a return to trade autarchy," the R ecord, as If >Uqws:
The dollar Is no longer b o far out of line
against a number of other ourrencies, Mr.
Reuss noted, with Germany, Holland and
Canada currently allowing their ourrencies
to float up in exchange markets, and with
Austria and Switzerland recently having set
higher fixed parities for their currencies.
But Japan, he said, oah still "flood our
markets" with its goods | and, thus, goad
Amerloan business and labor into seeking
import ourbs th at "could te the end of free
trade." Talk of the dollar going down in
value, Mr. Reuss suggested!, "may vory well"
prompt the Japanese central bank to follow
the German example and ;iot the yen float
up and the dollar down in!Japan’s exohange
markets. "Thla would be a good thing for
the U.S., for the world monetary system,
and in the end for Japan, too," ho said.
CXVII- -114.1—Part 14




A nother

Iil e n t M a j o r it y

Tq the Editor:

As Congress coi slders extension of the
military draft it
imperative th at it review its extraordii tfily, vulnerable position.
Over one mlllio: Americans have had a
close family membi • either killed or seriously
wounded in Vietns[. n, But it must be reoognlzed that the risl s arte not shared equally
across the populatij $n. The bereaved families
overrepresent the great" American underclass, consisting of ess privileged whites and
all but the vory. x )per crust of nonwhites.
Two statistics drlv home this point.
First, let us look ^t Congross itself. A Cong r e B s lo n a l Quarter / survey (February 13,
1070) found th at »nly 3V6 per cent of the
Congressmen had s ns or grandsons who saw
combat in Vietna l. Of 234 draft-eligible

| that I really mean to be the former—Just
; bo a little patient with me.
^
Not very long ago one of my friends told
: me the following story,
'
His little daughter had juBt received many
beautiful Xmas toyB —
Must share with little visitor,
Beat him up.
i
Why?
Refused to share her toyB,
In some ways this little story reminds me 1
of solar energy proponents and the public
at large. They refuse to take us seriously and
will not play w ith our toys—Why?
I am first of all reminded of a conver- •
sation I had with a gentleman who is pretty
high up the ladder in an Electrio UtUity
which shall remain nameless. We talked
about the aerospace industry and ito poten-