tune of about 20 percent, in the financing of this type of industrialization. I do not want to see us entirely absent.

I want, in other words, to demonstrate that the door is open for these people for a profitable relationship with the West, which will permit them to move their economy along and develop their country just as well as they could do through relationships with the East.

REPAYMENT OF LOANS

I am not talking about grant aid. I am talking about loans which they would be expected to repay, and to repay in dollars.

Senator SYMINGTON. If you say liberal terms, though, then the first question is, how are you going to make them pay back?

Mr. KENNAN. You have this problem with any foreign country to whom you make loans. But I think they will pay back if they possibly can. I do not see any disposition on their part to duck out of this sort of thing.

WHY HELP A COMMUNIST COUNTRY SUCCEED?

Senator CAPEHART. First, I want to say this: I think your answers have been very refreshing in that you have been very frank, and I like that. I am kind of direct myself.

But let me ask you this question for my own information and maybe for the committee's. Why do you want to help a Communist country to succeed? By giving them these loans you are talking about, and building up their economy, is that the way to kill communism in the world? Is that the way to meet it?

I am not asking this as a facetious question; it has always bothered me.

Mr. KENNAN. It is a good question.

Senator CAPEHART. Why do we want to do anything that will help them succeed and make their system work if they are out to destroy us and, therefore, the stronger they become, industrially and otherwise, the quicker they will be able to do it? Is that a fair question?

Mr. KENNAN. It is a perfectly fair question, sir.

Senator CAPEHART. It bothers me and worries me.

Mr. KENNAN. My answer to it would be this: They are an evolving country. The direction of the evolution is away from the Stalinist typical Communist-type of controls, to something different.

Second, I have not found any evidences in Yugoslavia, I am happy to say, that they are out to destroy us. I do not think they are conducting any subversive activities in this country. I think they are willing to let well enough alone in that respect.

Now, their system is not our system. But I would violently resent anybody coming in here from their side and trying to tell us what sort of an internal system we ought to have in this country.

SIGNIFICANT DIFFERENCES WITH RUSSIANS

Senator CAPEHART. You are going on the premise that they are not Communists like Moscow, and that someday might get com

pletely away from this system they have and have a private enterprise system?

Mr. KENNAN. I do not think they will have a system resembling ours, but I think they already have a system which is very significantly different from that of Russia and the other countries to the east, so different that the Russians refused to approve it. One of the great bases of differences between the Yugoslavs and the Russians today is that the Russians refuse to say it is socialism.

The CHAIRMAN. It is revisionism.

Mr. KENNAN. It is revisionism. And so long as they are that way, behave themselves properly in their relations with us and do not interfere in our own internal affairs, I am prepared to let them have any system that they find suitable there.

Senator CAPEHART. I do not quarrel with that, providing they are not getting ready and preparing to destroy us. That is the big question mark in my mind, and always has been.

I think Russia has said she will destroy us, and that is her intention. Now you distinguish between Yugoslavian communism and Russian communism.

Mr. KENNAN. This is correct. I do not want to be misunderstood in this.

YUGOSLAVS MAKE OWN DECISIONS

Senator CAPEHART. You have the same feeling toward Poland and Czechoslovakia?

Mr. KENNAN. No. Poland and Czechoslovakia are still-well, Czechoslovakia entirely, and Poland extensively-under Soviet control. They are not free to run their own affairs.

Now, this is one thing I can say about the Yugoslavs with the greatest of definiteness. They do not take orders from Moscow. They make their own decisions.

I do not agree with all those decisions. I do not agree with all their positions. I have had more bitter political arguments in the months I have been in Yugoslavia than I ever had in any other country, partly because of the disagreements, partly because these are people with whom you can argue.

I like this about them. You can take them on; you can say what you don't like, and they will reply.

I also do not want to gild the lily, and I do not want to persuade you that this is a bunch of nice people in our view. The Yugoslavs are pretty tough. They are a tough political regime, and their views, especially at the top, differ from ours very extensively.

That is why I say I do not want to see us giving them any form of unequal aid any longer than we have to. I hope that within 3 or 4 years there won't be anything like this.

PROVISION OF PLANES AND TRAINING

The CHAIRMAN. I would like to clear up one matter that surprised me, and that is, if I understand it, this program which has caused a great deal of talk domestically, and especially down in Texas, with large indignation meetings over jet planes and the training of pilots. You say that you had nothing whatever to do with advice on this; that this was set up and started before your

regime, and you have not been consulted as to whether it is wise to continue it or not; is this true?

Mr. KENNAN. This is correct. We have not even been kept informed.

The CHAIRMAN. You have not even been kept informed. Is this strictly under the direction of the Defense Department?

Mr. KENNAN. It is my understanding it is, sir.

The CHAIRMAN. And it is done without our Ambassador's approval?

Mr. KENNAN. I think that today I would be consulted if a new arrangement of this sort originated at this time. But this came into existence before I became Ambassador.

WITNESS WOULD APPROVE OF PROGRAM

The CHAIRMAN. Is it a fair question to ask you-I do not know whether it is fair to push you and I do not know what the administration's views are-if they asked your opinion today whether this should be continued or not, would you approve it?

Maybe you ought not to answer if you do not want to be pushed into this thing.

Mr. KENNAN. My answer would be if the equipment is obsolescent equipment, if there is no question of national security or classification involved, if it does not involve any secret information or anything that we would not want to have given to another government, and if they paid dollars on the barrelhead for it, I would say sell it to them. If you don't sell it to them, they are going to get it anyway somewhere if they are willing to pay that much money; there is usually someone else.

WAS PREDECESSOR CONSULTED?

Senator CAPEHART. Who was the predecessor Ambassador?
Mr. KENNAN. Carl Rankin was my predecessor.

Senator CAPEHART. Do you think he was consulted when this idea was originated?

Mr. KENNAN. I do not know. I rather doubt it because I think this was handled as a matter of sales of military equipment, over here, under the rules laid down at that time.

Mr. SPARKMAN. That was handled in 1956 and 1957, too. Rankin was not there.

The CHAIRMAN. Riddleberger.

Mr. KENNAN. No, up to 1956 and 1957 we used to give these people military equipment. In 1957 Tito came along and said he did not want it any more as a gift. If he took any more he wanted to pay for it.

A LOT OF NONSENSE

Mr. SYMINGTON. May I make a comment on that?

That is just a lot of nonsense, because what happens is-I do not mean, of course, what he said. What happens is that the military gets over $2 billion, and then they get what they say is the price for it, depreciated, you see, and they make whatever the foreign re

lations aspect of it, State or MAAG, or Mr. Bundy's 4 I do not know who does it, I am trying to find out-they make them pay full price for what this man paid for his planes. He says he did not want them given to them; he wanted to pay for them. He paid less for them than 1 percent of the original cost.

Mr. KENNAN. That is our fault, not his.

Senator SYMINGTON. Yes.

Following the chairman's question, you say you would rather see them get them from us than get them from anywhere else. I noticed everywhere throughout the Middle East the Soviets have covered all our friends like an umbrella with better airplanes.

We give them the F-86's. They protest, and we say it is a fine plane. The same day that I am in a country where we say it is a fine plane, and any fool knows it is not, the defense of why we did it was because it was an obsolete airplane-the Prime Minister, showed me the Times clipping.

So everybody is cheating everybody; nobody is being sincere about it. The only thing is, as an ambassador said to me this afternoon, "What's the use of our being friends with you when the people who are not your friends, what I would call pro-Soviet neutralists, get a better deal than we do?"

TRADE, NOT MILITARY EQUIPMENT, IS IMPORTANT

Mr. KENNAN. Well, I cannot give you any answer to that question. I do not see why they should myself, and I would not defend that. As a matter of fact, personally, as Ambassador out there, it is not important to me that we sell them this equipment.

If it is going to create the confusion and doubts in the minds of our own people as to the soundness of what we are doing, I would much rather skip it and tell the Yugoslavs, "You go and get it from somebody else, if you want to get it.

I do feel strongly, Senator, if I may add this, though, that outside of the field of military equipment, we ought to give them the facilities, perfectly normal facilities, for foreign trade with this country. That is, if they come into our market, have money to buy normal American goods in the normal way, we ought to let them buy them, and if they want to sell here, we ought to let them sell. This has nothing to do with aid or anything else.

Senator HUMPHREY. Don't we do that?

Mr. KENNAN. We generally have done it, but it is my understanding that there was some confusion about this after the Belgrade Conference. There is always a question of licensing for certain types of trade, and this has been sticky and difficult.

PACT WITH GREECE AND TURKEY

Senator AIKEN. Is the mutual defense pact that Yugoslavia has with Greece and Turkey still in existence?

Mr. KENNAN. It is on the books nominally, but the Yugoslavs say it is a dead letter, and nobody really cares about it very much except, perhaps, the Greeks. I think the Turks and the Yugoslavs would like to see it lapse.

William P. Bundy, Deputy Assistant Secretary of Defense for International Security Affairs.

Senator AIKEN. You would call it a temporary expedient at the time it was entered into?

Mr. KENNAN. Yes; and it does not mean much, if anything today. Nobody wants to take the responsibility for denouncing it, but it just does not mean anything.

This is a thing that often happens to international pacts. They just outlive their usefulness, and they become dead letters. Senator AIKEN. Like some of ours may be.

Mr. KENNAN. Yes.

ARMS GEARED TO AMERICAN AMMUNITION

Senator AIKEN. We were told 3 or 4 years ago that most of the Yugoslav arms were geared to American ammunition. Is that still true, that they use American ammunition, and that Russian ammunition would not fit these arms?

Mr. KENNAN. I would not want to risk a statement as to how much of it is. I would risk a statement that most of it is. That is why I said it is better for us to sell it to them than other people, simply because they have to come to us for spare parts then, and in some instances for ammunition and that sort of thing.

RUSSIANS ARE OLD-FASHIONED IMPERIALISTS

The CHAIRMAN. Pursuing the question the Senator from Indiana asked you I do not know anybody who is better qualified to expatiate on this aspect of it-it has bothered me a good deal, because this comes up all the time as to the nature of our attitude toward the Communist countries.

You have said that you see no reason why we should not trade with Yugoslavia, in fact, even if it were more Communist that it is. You distinguish between them and the Russians.

Is this because you do not subscribe to the idea that this is a great moral crusade? This is the old-fashioned imperialism disguised, perhaps, to some extent by the ideology that the Russians promote. As far as you are concerned, Yugoslavia should be permitted to have its kind of government so long as it is not endeavoring to attack or undermine us or any of our friends. Is that correct? Mr. KENNAN. This is correct, Senator Fulbright.

The CHAIRMAN. You regard this as not a great moral crusade but as just another form of imperialism, and what we really object to about Russia is not so much her communism as her avowed intention to destroy us, that is?

Mr. KENNAN. Absolutely true.

The CHAIRMAN. This is an important distinction, it seems to me.

NO RIGHT TO INTERFERE

Mr. KENNAN. I do not think we have any right to try to tell the Russians or anyone else in the world what form of economy or social system they ought to have because we would not want anybody else telling us that here, and we have to see that that goes both ways. But we would have, we do have, a legitimate complaint when people try to interfere with our life here.

The CHAIRMAN. Or our friends, as a concommitant of that.