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A Public Service Message from the American Income Life Insurance Co.Waco, TexasBernard Rapoport, Chairman of the Board and Chief Executive Officer A Buyout Plan for El Salvador by John Silber, President, Boston University This proposal, originally published in the Letters to the Editor section of the Wall Street Journal, is reprinted with permission. Dr. Silber served on the Kissinger commission on Central America. The Journal’s May 15 editorial, “A Program for Duarte,” is a welcome island of sanity in press comment on El Salvador. The Journal is on target in its criticisms of the failures of land reform in El Salvador and it correctly identifies uncompensated landowners, many of them far from rich, as a major source of right-wing violence. Two outcomes are desperately needed if the landreform program is to close the gap between rich and poor in the context of peace. The campesinos must be given clear title to the landholdings set aside for them under the law. Without clear titles they own nothing. And the former landowners must receive fair compensation for their land. Without compensation, they will continue to energize the appalling violence on the right. The U.S. is qualified by its wealth and its history to provide a solution to both problems. In 1862, Abraham Lincoln, facing a revolt by slaveowners who had taken up arms rather than accept the remotest risk of losing their property rights in human beings, proposed that the government offer to buy every slave in the country at the market price, after which they would be liberated. The proposal failed; some in Congress refused to entertain the idea that there could be a property right in human beings even briefly for the purpose of abolishing the right. Others found Lincoln’s plan too expensive, and proceeded to fight a war that was far more so, in blood as well as gold: nearly a million lives and ten times the cost of Lincoln’s plan. I have proposed a funding mechanism for the Salvadoran reform along the following lines: Landowners would be compensated for their holdings in El Salvador government bonds, carrying a dividend of perhaps 10%, guaranteed for 20 years by the U.S. The cash raised with the bonds would be used for the construction of bridges, roads, water and sewer systems, and schools, all desperately needed by El Salvador. Landowners wishing to hold the bonds to maturity would be compensated by El Salvador, if possible, or by the U.S., if necessary, at 100 cents on the dollar. Landowners wishing to sell them immediately would be compensated at some lower rate, perhaps 50 cents on the dollar, by funds provided by the U.S. The cost to the U.S. of such a program would be somewhere between $500 million and $900 million a tiny fraction of the cost of the war that will be forced on Central America if the Leninist rebels triumph in El Salvador and the Sandinistas consolidate their hold on Nicaragua. Central America has a fire in its kitchen the rebellion in El Salvador. The U.S. has a fire extinguisher in the form of a rescue operation for Salvadoran land reform. We should use it before the house burns down. American Income Life Insurance Company EXECUTIVE OFFICES: P.O. BOX 208, WACO, TEXAS 76703, 817-772.3050 BERNARD RAPOPORT Chairman of the Board and Chief Executive Officer 26 SEPTEMBER 28, 1984