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os -3- am] - which I set forth repistedly in 1941, 1942 and 1943 only to tia it called, "globaloney", "TVA's on the Danube", "Milk for Hotenttots", and "Wallace's Inter- national Milk Route". In April of 1947 speaking to 150 members of the French Chamber of Deputies I advocated the expenditure of $5 billion a year for ten years through the UN for the purpose of building up the devastated and backward areas. This idea was denounced as fantastically expensive and impractical. Yet today we in the USA are spending for defense 10 times as much annually as I advocated spending for con- struction, At the moment we have no other alternative but it is still not too late to start gradually on the program which I began to advocate more than ten years ago. Each member nation could agree to reduce its arms budget by one per cent and to use that one per cent through the UN to halt misery in those parts of the world where the farms are 80 small and poor and the techniques are so backward and the capital is so limited that it is impossible for a family to earn more than $100 a year even by working 1 hours a day seven days a week. In the present state of world affairs Russia and her satellites would probably refuse to come along. Nevertheless she should be given the opportunity to accept or refuse. If it is impossible to work the plan through the UN the US should apply the following plan by herself. I can assure you that $1 spent in this way will do more to preserve capitalism in the USA than $10 spent for armaments. In brief the heart of the plan is as follows:- Have the Food and Agriculture Organization of the UN empowered to enter into contracts with the crowded and under-developed nations of the world to set up a system of supervised loans to small farmers. This is a type of program which has been used successfully by Nelson Rockefeller's American International Association in Venezuela and Brazil. Contracts were made with the Venezuelan and Brazillian govern- ments under which the American International Association stood the cost of the super- vision and trained local supervising personnel while the local banks furnished the money for the loans, Heretofore the local banks had refused loans to the farm people at the bottom of the pile because there was no supervision by competent technicians, Now the banks have found that loans supervised by AIA technicians are their safest loans. Moreover in areas where Communism was making inroads because of hopeless misery, the technique of supervised loans completely changed the picture in one year. New techniques and capital at reasonable rates of interest have increased productivity by 50 per cent in one year, In some communities the profit has been increased five- gold. Repayments on loans have begun before they were due and there is every indica- tion that 95 per cent of the loans will be repaid. This checks with the experience .. we had in the Farm Security Administration when I was Secretary of Agriculture. Back in the Thirties we would loan typically $500 to enable a man to rent a farm and acquire the necessary tools, seed and fertilizers, Typically the loan supervisor would service 150 to 200 farmers, Usually a lady trained in home economics would service the same families, helping them with suggestions as to how to can 100 quarts of fruits and vegetables for each member of the household. These were families which wanted to farm but which were on relief because of the depression of the early Thirties, The technique of hooking technological supervision with the necessary credit worked wonders. Ninety per cent of the loans were paid off in spite of the fact that the fundamental criterion was helping human beings who were dow and out to start helping themselves again. In other words we were not making what would normally be called bankable loans. However the clients did know that we expected the loans to be paid off and on the whole they did a remarkable job of returning the money with interest to the federal treasury. Some of the top men who administered that program are now with Nelson Rockefeller and are finding that the same methods which worked in the USA also work in Venezuela and Brazil and that they will undoubt- edly work any place in the world where there are families who want to farm but are short on both capital and technique. There is no more constructive way to use American capital abroad than through a program of supervised loans to small farmers in the crowded and under-developed areas of the world. Frankly I would advocate that the money for the principal of the loans come from local banks so far as possible. Let the UN or the USA as the case may be, pay the cost of supervision and furnish about half of the supervisory personnel. The two outstanding ohstacles to the program EDSSE LEON EPL TEA SM AS BRN TE IE CNIS CREAN STIR EMS EE SETS LS TA AS NOT RENEE APT ED TT VE EATEN WES TS ERE IEEE RSS TT” wo a ee ee ee ves pane tee ee rag a reer e meetings ee” Spee meg Renee 8 eI SY RG ge ea a ToT Tre 7 - - - *