FOREIGN ASSISTANCE ACT OF 1961 REPORT OF THE COMMITTEE ON FOREIGN RELATIONS UNITED STATES SENATE ON S. 1983

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• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP66B00403R000400010003-2
• Release Decision: RIFPUB
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• Document Page Count: 129
• Document Creation Date: December 16, 2016
• Document Release Date: January 24, 2005
• Sequence Number: 3
• Publication Date: July 24, 1961
• Content Type: REGULATION

LEGISLATIVE COUNSEL
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Ualeiidar IVO,
87TH CONGRESS I
let Session
SENATE
REPORT
No. 612
FOREIGN ASSISTANCE ACT OF 1961
REPORT
OF THE
COMMITTEE ON FOREIGN RELATIONS
UNITED STATES SENATE
ON
S. 1983
JULY 24, 1961.?Ordered to be printed
U.S. GOVERNMENT PRINTING OFFICE
72746 WASHINGTON : 1961
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COMMITTEE ON FOREIGN RELATIONS,
J. W. FULBRIGHT, Arkansas, Chairman
JOHN SPARKMAN, Alabama
HUBERT II. HUMPHREY, Minnesota
MIKE MANSFIELD, Montana
WAYNE MORSE, Oregon
RUSSELL B. LONG, Louisiana
ALBERT GORE, Tennessee
FRANK J. LAUSCHE, Ohio
FRANK CHURCH, Idaho
STUART SYMINGTON, Missouri
THOMAS J. DODD, Connecticut
ALEXANDER WILEY, Wisconsin
BOURKE B. HICKENLOOPER, Iowa
GEORGE D. AIKEN, Vermont
ITOMER E. CAPETIART, Indiana
FRANK CARLSON, Kansas
JOHN 3, WILLIAMS, Delaware
CARL MARCY, Chief of Staff
DARRELL ST. CLAIRE, Clerk
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CONTENTS
Page
1. Main purpose of the bill
1
2. What the bill provides
2
3. Committee action
3
4. Committee comments
4
5. Provisions of the bill:
Part I:
Chapter 1. Statement of policy
7
Chapter 2. Development assistance
8
Title I. Development Loan Fund
8
Title II. Development grants
12
Title III. Investment guarantees
14
Title IV. Surveys of investment opportunities
17
Title V. Development research
18
Chapter 3. International organizations and programs
19
Chapter 4. Supporting assistance
21
Chapter 5. Contingency fund
23
Part II:
Chapter 1. Statement of policy
24
Chapter 2. Military assistance
24
Part III:
Chapter 1. General provisions
27
A. Free enterprise and private participation (sec. 601)
27
B. Small business (sec. 602)
28
C. Shipping on U.S. vessels (sec. 603)
28
D. Procurement (sec. 604)
29
E. Retention and use of items (sec. 605)
29
F. Patents and technical information (sec. 606)
30
G. Furnishing of services and commodities (sec. 607) _
30
H. Advance acquisition of property (sec. 608)
30
I. Special accounts
31
J. Transfer between accounts (sec. 610)
31
K. Completion of plans and cost estimates (sec. 611)
32
L. Use of foreign currencies (sec. 612)
32
M. Accounting, valuation, reporting, and auditing of
foreign currencies (sec. 613)
32
N. Special authorities (sec. 614)
33
0. Contract authority (see. 615)
34
P. Availability of funds (see 616)
34
Q. Termination of assistance (sec. 617)
34
R. Economic assistance to Latin America (sec. 618)
34
S. Assistance to newly independent nations (sec. 619) _ _ _
35
Chapter 2. Administrative provisions
35
A. Exercise of functions (sec. 621)
36
B. Secretaries of State and Defense (sec. 622-623)
37
C. Statutory officers (sec. 624)
37
D. Employment of personnel (sec. 625)
38
E. Experts, consultants, and retired officers (sec. 626)
40
F. Detail of personnel to foreign governments and inter-
national organizations (sec. 627-630)
40
G. Missions and staffs abroad (sec. 631)
41
H. Allocation and reimbursement among agencies (sec,
632)
41
I. Waivers of certain laws (sec. 633)
43
J. Reports and information (sec. 634)
43
K. General authorities (sec. 635)
44
L. Provisions on uses of funds (sec. 636)
45
M. Administrative expenses (sec. 637)
48
,LII
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IV CONTE-WM
5. Provisions of the bill?Continued
Part III?Continued PASO
Chapter 3. Miscellaneous provisions 49
A. Effective date (sec. 641) 49
It. Statutes repealed (sec. 642) 49
C. Saving provisions (sec. 643) 51
D. Definitions (see. 644) 51
E. Unexpended balances (sec. 645) .52
F. Construction (sec. 646) 53
Part IV: Amendments to Other Laws:
A. Federal Property and Administrative Services Act of 1949
(sec. 7011 53
11. Mutual 1 )L4,1-ise Assistance Control Act of 1951 (sec. 702)__ 53
C. Agricultural Trade Development and Assistance Act of
1954 (sec. 7(13) 53
1). .Joint resolution to promote peace and stability in the
Middle East (sec. 704) 54
E. International Health Research Act of 19(10 (sec. 705) 54
F. Act to provide for assistance in the development of Latin
America (see. 706) 54
C. Improper currency transactions abroad (see. 707) 54
6. Changes in existing law 55
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87TH CONGRESS
1st Session
SENATE
Calendar No. 584
REPORT
No. 612
FOREIGN ASSISTANCE ACT OF 1961
JULY 24, 1961.?Ordered to be printed
Mr. FULBRIGHT, from the Committee on Foreign Relations, submitted
the following
REPORT
[To accompany S. 1983]
The Committee on Foreign Relations, having had under considera-
tion the bill (S. 1983), the Foreign Assistance Act of 1961, reports the
bill favorably with amendments and recommends that, as amended,
it be passed by the Senate.
1. MAIN PURPOSE OF THE BILL
The main purpose of the bill is to give vigor, purpose, and new
direction to the foreign aid program. Thus, the stress of the program
is shifted to development loans repayable on manageable terms and
conditions but in dollars. Long-term financing becomes available to
the new aid agency, a simpler structure which will include the Devel-
opment Loan Fund and the International Cooperation Administra-
tion. Less emphasis is placed on and fewer funds are granted to
direct support programs. Self-help and long-term development plan-
ning are now the chief criteria against which the bulk of economic aid
is programed.
Funds for categories of economic and technical assistance other than
the contingency fund, are authorized to be made available until
expended. The same is true of military assistance. This means that
unused funds in these categories are carried over into another fiscal
year instead of automatically returning to the Treasury. The bill,
in short, stresses orderly economic growth and gives continuity to the
programs that will encourage and sustain much of this growth.
1
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FOREIGN ASSISTANCE ACT OF 1961
2. WHAT THE BILL PROVIDES
The following table shows the appropriations authorized by the bill
for fiscal year 1962, plus 5-year borrowing authority, and compares
these figures with the amounts requested by the administration.
[In millions]
Administra-
lion request
Committee
authorization
Development grants
Investment surveys
Development research
International organizations
8380.0
5.0
20.0
153. 5
$350.0
5.0
(I)
153.5
Supporting assistance
M1.0
450.0
Contingency fund
5481.0
3181.0
Military assistance
1, tt85. 0
2 1, 803. 0
Administrative expenses
51.0
51.0
Total
3,575 5
3,139. 6
liorrowing authority
MO. 0
1,187.0
Loan repayments
287. 0
Total
1, 187. 0
1, 187. 0
Grand total
4,702.54,
32f1 5
1 Authority to spend funds available for pt. 1.
'The committee imposed a $55,000,000 ceiling on military a.ssIstancv to be furnished to Latin America.
A sum equal to the amount by which the ceiling reduces the military program planned for Latin America
this year will be transferred to the funds made available for development grants In [list area.
In addition, the bill contains these major provisions:
(1) It repeals and supersedes the Mutual Security Act of 1954, as
amended.
(2) It authorizes funds that will remain available until expended
for development grants, supporting assistance, investment surveys,
international organizations and programs, and military assistance that
will remain available until expended. The primary purpose of pro-
viding this kind of authority is to discourage the practice of hastily
obligating funds near the end of the fiscal year in order to pliwe aid
administrators in a stronger position to seek further appropriations.
(3) The development loan program is given long-term financing
with authority to borrow up to $1.187 billion from the Treasury in
fiscal year 1962 and $1.9 billion in each of the following 4 fiscal years.
(4) The military assistance program is given a 2-year authorization
at the level of $1.8 billion a. year.
(5) The President is authorized to draw on up to $200 million of
existing Department of Defense stocks for the military assistance
prograt n
(6) The sum of $5 million is authorized for the purpose of encour-
aging surveys of investment opportunities by private interests (title
1V). This is a, new authorization.
(7) Authority is provided to carry out programs of development
research into various problems of economic and social development
(title V). This is a new authorization.
(S) Technical cooperation programs are continued, but within the
framework of a new category, development grants, which will erlpha-
size the development of human resources and the institutions neces-
sary to social and economic development.
(9) Authority is provided to continue issuing investment guaranties
up to $1 billion total face value. Also, in special situations the
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FOREIGN ASSISTANCE ACT OF 1961
President may issue guaranties against a portion of loss due to any
risks not otherwise insurable. The authority for guaranteeing risks
of this character is limited to $100 million.
(10) The aid program is reorganized. A new aid agency will
be established within the Department of State. The International
Cooperation Administration is eliminated, and the Development Loan
Fund in a new form is to become a part of the new agency. Provision
is also made for improved administrative and personnel practices.
(11) There is provided a $5 million revolving fund for the procure-
ment of excess Government property that can be utilized by the aid
program.
3. COMMITTEE ACTION
On March 22, the President delivered to the Congress a special
message on foreign aid, and on May 26 Senator Fulbright introduced,
by request, the administration bill (S. 1983), which was transmitted
in a communication from the President and incorporates his proposals.
The committee formally opened hearings on the bill on May 31
with the appearance of Secretary of State Dean Rusk, who also met
with the committee in executive session at the conclusion of the
hearings. In all, the committee held 15 days of hearings, in both
public and executive session. These have been published in two parts,
with security information deleted, and are available to Members of
the Senate and the general public.
Following Secretary Rusk, the committee heard testimony from,
among other administration witnesses, Secretary of the Treasury
Douglas Dillon; Secretary of Defense Robert S. McNamara; the
Chairman of the Joint Chiefs of Staff, General Lyman Lemnitzer;
the U.S. Representative to the United Nations, Adlai Stevenson; the
Under Secretary of State for Economic Affairs, George Ball; and
Assistant Secretary of Defense for International Security Affairs
Paul Nitze. Mr. Henry Labouisse, Director of both the International
Cooperation Administration and the President's Foreign Aid Task
Force, and Frank M. Coffin, Managing Director of the Development
Loan Fund, testified, and were available to the committee throughout
the course of the hearings. Other members of the President's
Foreign Aid Task Force and representatives from the Departments of
State and Defense also testified.
In addition to the executive branch witnesses, the committee had
testimony from Senator Everett M. Dirksen, of Illinois, and from a
number of public witnesses. These includei representatives of the
International Chamber of Commerce, the U.S. Chamber of Commerce,
the National Council of Churches of Christ, the Citizens Foreign
Aid Committee, the AFL?CIO, the American Farm Bureau Associa-
tion, Americans for Democratic Action, the National Association of
Home Builders, the League of Women Voters, the National Congress
of Parents and Teachers, the Citizens Committee for UNICEF, the
International Economic Policy Association, the Committee for a
Democratic Spain, the Women's International League for Peace and
Freedom, the Friends Committee on National Legislation, the Coop-
erative League of the U.S.A., the General Board of Christian Social
Concerns of the Methodist Church, the Board of Missions of the
Methodist Church, and the Council for Christian Social Action of the
United Church of Christ. As in past years, the nongovernmental
testimony was predominantly favorable to the program.
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4 FOREIGN ASSISTANCE ACT OF 1961
The committee was especially concerned with making certain that
the needs of Latin American countries are fairly reflected in this bill.
Information furnished by the executive branch indicates that, subject
to congressional appropriations, roughly $300 million in economic
assistance authorized by this bill are expected to be used in Latin
America. In addition, about $350 million of funds available for the
social development program for Latin America are expected to be
used for fiscal year 1962. To these amounts there must be added
from the Export-Import Bank loans and activities under the food for
peace program. Thus, there is expected to be used in Latin America
for fiscal 1962 in excess of $1 billion,
On June 26 the committee began marking up the bill in executive
session. During this meeting and subsequent meetings on June 28,
July 6, 7, 10, 13, 14, 17, 18, 19, 20, and 21, the committee went over
the bill section by section and also gave careful consideration to each
amendment which had been proposed by any Member of the Senate.
On July 24, the committee voted 13 to 4 to report the bill favorably
as amended.
4. COMMITTEE COMMENTS
The committee believes, no less than the President, that the United
States must plan for and contribute generously toward a decade of
development. Foreign aid is both an unavoidable responsibility and
a central instrument of our foreign policy. It is dictated by the hard
logic of the cold war and by a moral responsibility resulting from
poverty, hunger, disease, ignorance, feudalism, strife, revolution,
chronic instability, and life without hope.
Foreign aid has entered a new phase. The major powers of West ern
Europe, themselves the most prominent beneficiaries of external assist-
ance, have elected to make important contributions to the develop-
ment of the southern continents. A primary purpose of the Organiza-
tion for Economic Cooperation and Development is to coordinate the
assistance programs of the Western Powers and Japan. The develop-
ment problems of some countries are already being tackled on a multi-
lateral basis. The aid-to-India and aid-to-Pakist nil programs are
examples. In short, the pattern for the future of foreign aid is being
laid down now: and 1961 should be regarded by future historians as
the transitional year in which the United States, Japan, and West
Europe joined their efforts to narrow the dangerously widening gap
between the rich societies and the poor.
This does not mean that, the aid responsibilities of the United States
will lighten. It means instead that the other capital exporting
nations of the non-Communist world are prepared to make propor-
tionately similar contributions. Together with. the United States,
these countries possess the greatest financial, scientific, and techno-
logical resources in the world. However, time is the impartial but
controlling element in the struggle between the rival power blocs.
And the essence of the West's responsibility is to use Its resources
imaginatively and generously as time moves a swiftly changing world
into an uncertain future.
The foreign aid program is many things to many different- Ameri-
cans. And something may be said in defense of several different
points of view. To some, the program is a continuing burden.
That is true in the sense that some $80 billion has been loaned or
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granted to other countries in the past 15 years (or about 1J percent
of our gross national product in this period). To others, foreign aid,
on balance, has been a failure. And it is true that in some countries?
Korea and Laos are examples?an enormous amount of money has
been spent with something less than success.
But to many thoughtful citizens, foreign aid represents the only
means of alining this country and its allies with the forces that are
shaping the world that lies ahead. It may be that in a few countries
our aid programs have created problems instead of disposing of them;
that some societies have not been helped by aid, only propped up.
But as the Secretary of State recently observed, "History does not
reveal its alternatives." Without American aid, many countries that
today are independent might have been transformed into Communist
puppet states. And the opportunity to assist poor but independent
societies toward productive and compatible ends still remains before us.
The history of foreign aid is brief. Some members of this committee,
along with other Senators, have had intimate acquaintance with the
aid programs from the beginning. They were able to measure the
funds programed for the Marshall plan against the scope of Europe's
problems. Since then, they have studied aid programs on the ground
all over the world, issued reports of their findings, and authorized
comprehensive studies of the problems of development. Against the
background of that experience, the committee members can offer some
useful observations on the record of American foreign aid.
First, the temptation to compare the results of the Marshall plan
with other programs must be avoided. Basically, Western Europe
needed only capital to regain economic health. Experience, estab-
lished institutions, and residual technology did the rest. Elsewhere
in the world, especially in the underdeveloped southern continents,
these factors are absent. There, the successes of our programs
are far less visible and hence more difficult to evaluate. There, the
growth process is slow. Yet thanks largely to the aid programs, there
has been measurable progress in these areas. Improved agriculture,
budding institutions, accruals of technical skills, more efficient use of
capital and other resources, low-cost housing, infrastructure develop-
ment?these are the slowly materializing benefits in many countries
of American aid. More basically, aid programs in some countries
have kept economic growth and human consumption levels in reason-
able balance with population increase. That is not an obvious
accomplishment, but it is an accomplishment of obvious importance.
At present levels of population growth in some countries, it is difficult
to see how this accomplishment can be maintained through the next
decade.
It can be truthfully said that the aid program has been indispen-
sable. But it can also be said that it has fallen short of the millions
of words that have been uttered in its behalf. To some extent, this
was inevitable. Hope usually tends to exceed feasible expectation.
Moreover, foreign aid is new to human endeavor, with no earlier
history from which to draw conclusions. Yet with that said, it must
be added that several of our aid programs have accomplished less than
might reasonably have been expected. The failure to separate long-
range objectives from immediate problems has diluted the impact of
the program in many countries. In others?Korea again is a promi-
nent example?the need to maintain a large, well-equipped army has
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hobbled development programs. In short, the future?sometimes of
necessity?has been neglected for the present.
Our brief experience shows that foreign aid is everywhere a difficult,
and complex undertaking. In Asia, Africa, and Latin America, old
and traditional social structures are breaking down. This is a dy-
namic but disruptive process. Established institutions are being
swept away, often before new ones are ready to replace them. Gen-
eral illiteracy is a barrier to progress in many countries. Surpluses
of unskilled labor generate strong pressures in sonic of these. Another
source of instability is the frustration of persons who have received
higher education, but cannot find a place in society for which education
qualifies them. Thus, the slow pace of economic growth has the
parallel consequence of stifling social development, as well. And the
disaffection of this essentially urban element often spills over into the
countryside and gives expression to the discontent of peasants living
on the thin edge of subsistence.
Economics have stifled growth in a great many countries. The
per capita income in these societies scarcely keeps pace with population
increase, and in some cases lags behind. Capital formation is held
down in many societies by consumption levels, which while low by
North American standards, are out of proportion to gross national
product. In order to appease elements of instability, the leaders of
these countries have felt compelled to set living standards above the
ability of their economies to support them. The result is inflation,
which often produces compensatory boosts in interest rates alai; are
already oppressively high. Black marketeers and usurers flourish in
such a climate. Laud reform becomes meaningless, because of the
inability of poor beneficiaries to borrow money for seed, equipment,
and so forth on manageab:e terms. The social consequences of this
vicious dilemma are predictably disruptive.
Another problem is the extreme dependence of several of the poorer
countries upon the world demand for the raw materials that they
export. A fluctuation in the price of a single product can cripple
promising development programs. A partial solution would be reduc-
ing the dependence of some countries on exports of single commodities
and also developing their processing and manufacturing capabilities
to produce locally sonic goods which are now imported. The problem
is finding the capital to finance such facilities, to say nothing of trained
people to manage them.
These are some of the hard problems with which we try to cope
through our foreign aid program. The committee believes that the
lessons of the past must be applied to the aid programs that lie ahead.
It must first of all be clear that no amount of aid can materially un-
prove a society whose leadership is not strongly committed to economic
and social development. Foreign aid, if provided under the wrong cir-
cumstances, can itself be a disruptive force. The primary respon-
sibility for growth and development is not on the aid donor, but on
the recipient government. A donor country can provide the addi-
tional human and capital resources, but should do so only when the
regimes in question have brought their domestic policies into line
with the needs and legitimate purposes of their peoples.
Second, programs must be clearly related to the long-range goals
of a recipient country as defined within a general economic and social
development plan. Heretofore, our programs have been too heavily
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FOREIGN ASSISTANCE ACT OF 1961
influenced by military considerations, by "impact" projects, by
temporary and sometimes illusory political urgencies.
Third, the United States must be able to make long-term commit-
ments to societies that have embarked on genuine economic and
social reform. To deny this flexibility would amount to crippling the
proposed program and perpetuating some of the serious deficiencies
of past programs. An administration official recently stated the
problem quite succintly:
We know in our hearts that we are in the world for keeps,
yet we are still tackling 20-year problems with 5-year plans,
staffed with 2-year personnel working with 1-year appropria-
tions. It's simply not good enough.
The committee, having tried unsuccessfully to incorporate borrow-
ing authority in past legislation, sympathizes with this point of view.
The committee believes that the bill before the Senate reflects an
understanding of past mistakes and future requirements. The most
glaring of these past mistakes has been a weakness in administering
the aid programs. This bill seeks to give the aid program new direction,
spirit, and purpose, while retaining the most productive features of
the existing legislation. Tho committee hopes that a multilateral
approach can receive greater emphasis with respect to newly inde-
pendent countries, especially those in Africa. In the interest of
stability, some other elements of current programs are carried over,
but will be phased out in subsequent legislation. In short, the bill
before the Senate gives foreign aid the necessary but moderate shift
in direction in this transitional year of 1961.
5. PROVISIONS OF THE BILL
PART I
CHAPTER 1. STATEMENT OF POLICY
Section 101 declares that part I may be called the Act for Inter-
national Development of 1961. This act supersedes the nonmilitary
provisions of the Mutual Security Act of 1954, as amended.
A. STATEMENT OF POLICY
Section 102 sets forth a statement of policy that is comparable to
that contained in the existing law. However, some new points are
added. The principle of continuity is stressed. Economic aid is to
be based upon long-range plans which are related to the social as
well as economic aspects of development. Aid programs will be
responsive to the efforts of peoples to help themselves. The emphasis
of the program will be placed on long-range development assistance.
Such assistance will be complemented by the furnishing of
surplus agricultural commodities under other acts. The effective-
ness of aid programs will be sharpened by research designed to improve
existing techniques. As a matter of policy, assistance will be pro-
vided in some areas for the purpose of promoting stability. It is
also the policy of the United States to contribute to programs con-
ductekby the United Nations and other international organizations
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FOREIGN ASSISTANCE ACP OF 1961
which are directed toward economic, social, and scientific progress,
as well as the relief of human distreSS.
Carried over from the policy statement ill the existing law is a
reaffirmation of the principle that world peace and the survival of
free institutions in the United States can best be assured by preserving
human dignity and expanding freedom. To this end, it is observed
that the rnited States has in the past assisted other societies hi their
efforts to improve living conditions and fulfill the aspirations of their
peoples. Congress declares that the United States must "renew the
spirit which lay behind these past efforts," thus demonstrating that
economic growth and democracy can go hand in hand; and that, an
enlarged comnumity of free, stable, and self-reliant nations can reduce
world tensions and insecurity.
Congress also declares that the United States "supports the prin-
ciples of increased economic cooperation and trade among nations,
freedom of the press, information and religion, freedom of navigation
in international waterways, and recognition of the right of all private
persons to travel and pursue their lawful activities without dis-
crimination as to race or religion. In the administration of all parts
of this act these principles shall be supported in such a way as to
avoid taking sides in any controversy between countries baying
friendly relations with the United States while urging both sides to
adjudicate the issues involved by means of procedures available to
the parties."
Finally, Congress urges that all other countries able to contribute
join in it common undertaking to meet the goals contained within this
st at emetic.
CHAPTER 2. DEVELOPMENT ASSISTANCE
TITLE I--DEVELOPMENT LOAN FUND
These subsections effect a major change in the terms and conditions
of development loans and the method of financing them. Whereas
most of the loans negotiated by the Development Loan Fund have
been repayable in local currency, all loans extended under the new
authority must be repaid in dollars. Interest rates as low as 1 percent
are contemplated, and some loans will probably be interest free.
Terms of repayment up to 50 years will be permitted, in some cases
with no repayment of principal for initial periods of up to 10 years.
The aid agency will have flexibility in establishing terms and condi-
tions that will reflect the capacity of the recipient country to service
its debts.
The committee approves the shift from local currency to dollar
repayment. Despite the obvious advantages of the so-called soft-loan
procedure, it is a source of difficulty and occasional misunderstanding.
For practical purposes, a large proportion of soft loans really amount
to grants. The currencies used for repayment normally cannot be
spent outside the country of issue. It is also true that accumulations
by the United States of steadily growing balances of these currencies
can create problems and further misunderstandings with host govern-
ments. Moreover, the uses to which these currencies can be put in
many of the countries of issue are severely limited.
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FOREIGN ASSISTANCE ACT OF 1961 9
The President is directed to establish a successor Development
Loan Fund from which funds will be made available to finance develop-
ment loans.
In financing the new development loan program, the President is
authorized to borrow from the Treasury $1.187 billion in fiscal year
1962 and up to $1.9 billion in each of the next 4 fiscal years. The
unused portion of the maximum allowed for one fiscal year will be-
come available for use in any subsequent year of the note issuing
period. Thus, the full amount authorized by section 202 will be
$8.787 billion.
The President is directed to take into account six considerations
before extending loans:
(1) whether financing could be obtained in whole or in
part from other free-world sources on reasonable terms, (2)
the economic and technical soundness of the activity to be
financed, (3) whether the activity gives reasonable promise
of contributing to the development of economic resources or
to the increase of productive capacities in furtherance of the
purposes of this title, (4) the consistency of the activity with,
and its relationship to, other development activities being
undertaken or planned, and its contribution to realizable
long-range objectives, (5) the extent to which the recipient
country is showing a responsiveness to the vital economic,
political, and social concerns of its people, and demonstrating
a clear determination to take effective self-help measures,
and (6) the possible effects upon the U.S. economy with
special reference to areas of substantial labor surplus, of the
loan involved. Loans shall be made under this title only
upon a finding of reasonable prospects of repayment.
These are comparable to the criteria applied to Development Loan
Fund activities in the existing legislation.
Funds available for development lending may not be decreased by
the authority of section 610, which allows the President to transfer
10 percent of the funds of one aid category into another category,
provided the transfer does not increase the amount available in the
latter category by more than 20 percent. Nor can the provisions of
title I be waived by the authority of section 614(a), which allows the
President to furnish assistance of up to $250 million without regard to
the requirements of this bill and related legislation.
The bill makes available for the purposes of this title the dollar
assets of the Development Loan Fund which remain unused and un-
committed for loans repayable in foreign currencies as of the date of
the Fund's abolition. The President is directed to submit to the
Congress a final report of the operations and condition of the Develop-
ment Loan Fund as of that date. The President is also directed to
establish an interagency Development Loan Committee which shall,
under his direction, establish standards and criteria for lending opera-
tions. The Committee shall consist of officials of such U.S. Govern-
ment agencies as the President may determine, provided that each
appointee has been confirmed by the Senate. An Office of the
Development Loan Fund will provide staff assistance to the Develop-
ment Loan Committee, as well as performing such other functions as
the President prescribes.
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FOREIGN ASSISTANCE Acr OF 1961
The committee believes that the long-term borrowing authority
sought by the President is the most important part of this legislation.
It is not i
a new proposal nor is the Treasury borrowing procedure an
unfamiliar one n our Government. The Senate attempted to give the
Development Loan Fund this authority when the organization was
created m 1957. The committee made a second unsuccessful effort
in 1959. And the best recommendation for the borrowing procedure
is the excellent record compiled by the agencies and programs that
have been financed, in part or in whole, by this method. The list
includes:
Reconstruction Finance Corporation.
Commodity Credit Corporation.
Defense Production Act of 1950.
Export-Import Bank of Washington.
Federal Deposit Insurance Corporation.
Farmers Home Administration.
St. Lawrence Seaway Development Corporation.
Federal home loan banks.
Federal National Mortgage Association.
Housing and Home Finance Administration.
Federal Savings and Loan Insurance Fund.
Rural Electrification Administration,
Federal Ship Mortgage Insurance Fund.
Federal Civil Defense Act of 1950.
Small Business Administration.
Informational Media Guaranty Fund.
Veterans direct loan program.
Investment guaranty program.
Panama Canal.
Virgin Islands Corporation.
District of Columbia.
Helium Act, as amended.
Area Redevelopment Act of 1961.
Tennessee Valley Authority.
The activities of these organizations have been useful and beneficial
to the people of the United States and, in many cases, to others. They
have contributed to our stability and our own economic growth with
a minimum of waste and inefficiency. Moreover, it is quite clear that
Congress, in adopting this procedure, does not give the Executive a
free hand. The legislative controls remain. The aid agency, .
accordance with provisions of the Government Corporation Control
Act, annually must present to the Appropriations Committees of
Congress the budget program for its proposed lending operations for
the coming year, and obtain from Congress authority to obligate funds
to carry out this program. As with appropriations, the amounts to
be borrowed must be included each year in the Federal budget as
new obligations] authority. Congress, if it chooses, can limit the
funds that otherwise would be available for use; consistent with legis-
lative practice in the case of other Government agencies having
borrowing authority, it is anticipated that this would be done only
i
in unusual circumstances. The Executive s also required _to submit
quarterly reports on lending operations to Congress. an
annual presentation covering all development lending operations will
be made available to the authorizing committees of Congress.
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FOREIGN ASSISTANCE ACT OF 1961 11
There may be concern that some loans executed under the develop-
ment lending' program will be poor risk ventures. Section 201(5)
states that "loans shall be made * * * only upon a finding of reason--
able prospects of repayment." Moreover, the record of other lending
programs offers reassurance on this point. As of December 31, 1960,
foreign loans disbursed under mutual security and related legislation
have amounted to nearly $3 billion. There have been no defaults
or delinquencies on these transactions. However, in the case of three
countries who received loans under the mutual security program,
there have been deferrals of payments of principal and interest for a
specified period. As for the Development Loan Fund, while there
have been delays in payments on some loans, none of the DLF bor-
rowers has defaulted on loan repayment.
Since beginning its activities in 1934, the Export-Import Bank has
authorized loans and credits totaling about $11.4 billion (as of Decem-
ber 31, 1960). During this period, the Bank has written off losses
of less than three one-hundredths of 1 percent of this total. In
addition, the prospects for repayments on loans to three countries?
Bolivia, Cuba, and Haiti?are doubtful. However, even if the entire
$100 million total of these loans were deemed irretrievable, maximum
losses would be only nine-tenths of 1 percent of the Export?Import
Bank's total authorizations.
The effect of the borrowing authority proposed in this bill would be
to bring development lending operations more closely into line with
established banking and business procedures. It will remove the
temptation to force the hasty conclusion of loans near the end of the
fiscal year so that the aid agency will be in a better position to ask
Congress for another large appropriation. The Act for International
Development is built on the premise that aid programs should be
related to a country's growth process based on a broad development
plan. We can scarcely expect the poorer countries to commit them-
selves to comprehensive development plans in the absence of reasonable
assurances that foreign exchange requirements will be met and that
programs undertaken will be supported through completion. The
element of continuity is essential to all growth, including economic.
It is the element common to all of the aid programs of the Soviet
Union. In the past year, Soviet long-term economic grants and
credits amounted to nearly $1.2 billion. The following statements
are contained in an evaluation of Communist bloc aid prepared bythe
executive branch:
On the whole, it would appear that the aid of the Com-
munist bloc countries has been negotiated and administered
with skill, speed, and sensitivity. * * * The increasing in-
fluence of Communist bloc aid is felt in key economic sectors
of some countries. * * * Assistance from the bloc countries
has consisted mostly of long-term advance commitments of
specific amounts of aid with actual projects and terms of
repayment negotiated latex. * * * The total effect of the
bloc aid effort, together with evidences of achievement by
the bloc countries at home, is to enhance the image ',re-
sented by the Communist bloc and increase the attractive-
ness of the Communist model to countries groping for a
method of rapid economic and social improvement.
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12 FOREIGN ASSISTANCE ACT OF 1961
The committee agrees with this evaluation. Several members have
observed at first hand the scope and effects of Soviet aid in certain
key countries. Nearly two-thirds of the Soviet grants and credits
have been concentrated in three countries?India, Indonesia, and the
United Arab Republic. And it has been, on balance, an impressive
performance. The aid program reflected in this bill also emphasizes
a concentration of effort. It is planned to program about three-
fourths of the funds available for development lending in India,
Pakistan, and Brazil. These are large, populous countries (each
with an extremely high rate of population increase which threatens
the success of their development efforts). They possess great signifi-
cance, both regionally and internationally. Their prest4.-:e and
influence is on the rise. They are committed to realistic development
plans. The United States and its allies can play the pivotal role in
assisting these nations in their effort to reach the stage of self-sustaining
growth.
The authority in this bill is permissive. It does not mean that
the Executive will begin to export. $1.9 billion annually in loans.
The needs for such sums exist, but the absorptive capacities of most
developing countries are not yet equal to their needs. The rate of
growth in these countries cannot be precisely determined. As the
problems vary from country to country, so does the cycle of growth.
In a few cases, the need for growth capital is immediate; others inay
be 2, 3 or 4 years away from the point at which large amounts of
capital can he effectivelyutilized. The authority contained ui tins
bill will enable the aid agency to commit adequate sums at the critical
turtling points.
Based on past performance, the committee believes that this
long-terM borrowing authority will promote efficiency, economy, and
above all, durable economic growth. It will give direction and mo-
mentum to the entire aid effort. And it should, at least, balance
whatever advantage the Soviet Union may be gaining as a result of
the flexibility and continuity of its own aid program.
TITLE TI-DEVELOPMENT GRANTS
The bill authorizes !VISO million in development grants. It is pro-
posed to add to that amount unobligated balances currently estimated
at approximately Si 5 million, thus providing this program with a
total of $395 'no funds would be available until expended.
This category of aid includes the technical assistance program con-
tained in the existing legislation, plus special programs now authorized
sepa rat ely.
Development grants will finance the growth of institutions that
form the base for economic development and progress. They will be
used to raise educational, technical, managerial, and professional
levels of certain societies. They will supplement social reform pro-
grams. They will be used to assist ill the creation of comprehensive
development plans. In sonic countries, these grants will contribute
to the development of the basic physical facilities that modern so-
cieties all require.
Development grant activities will .be financed jointly by the United
States and the host government, with the latter bearing a substantial,
if not the major, burden of the program. As with development Mans,
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FOREIGN ASSISTANCE ACT OF 1961 13
these activities must meet other stria criteria. The bill directs the
President to?
take into account (1) whether the activity gives reasonable
promise of contributing to the development of educational
or other institutions and programs directed toward social
progress, (2) the consistency of the activity with, and its
relationship to, other development activities being under-
taken or planned, and its contribution to realizable long-
range development objectives, (3) the economic and tech-
nical soundness of the activity to be financed, and (4) the
extent to which the recipient country is showing a responsive-
ness to the vital economic, political, and social concerns of
its people, and demonstrating a clear willingness to take
effective self-help measures and to pay a fair share of: the
costs of programs under this title.
It is the committee's understanding that the term "social progress,"
as used in this section, covers the improvement of living standards
within relatively poor but aspirant societies, and the development of
those institutions that will give hope and purpose to the lives of the
peoples who comprise such societies. More specifically, education,
health, farmer cooperatives, and public administration are examples
of areas of concern that are basic to social progress.
Education and development of human resources through such means
as technical cooperation programs will be emphasized in those counties
which are in the earlier stages of economic development. The furnish-
ing of capital facilities for purposes other than these shall be given a
lower priority until the requisite knowledge and skills have been
developed.
The co mittee believes that this is a minimum program. Of the
$395 million allotted to development grants, about $259 million
represents continuing costs of existing programs. The balance will be
used to finance new activities. Agricultural extension services is one
example. In some countries?Iran is one?extensive land reform will
be meaningless unless it is tieo to agricultural extension programs.
In such societies, the landlord provides seed, credit, beasts of burden,
counsel, the cost of equipment maintenance and other essential
services. When he disappears, the function he performed must be
transferred to new institutions, such as agricultural cooperatives and
extension services. The development grant program will encourage
and support the growth of such services.
Another critical need in most of the newly independent countries is
competent public administration. A society is unlikely to progress
very far in the absence of effective and orderly government. An
efficient tax structure, sound banking system, and sensible fiscal and
monetary policies are the bard but necessary attributes of a govern-
ment determined to move its people across centuries of time in a few
short years. Development grants will help to establish and sustain
vital public institutions.
Perhaps the strongest drag on the progress of less developed societies
is the burden or illiteracy and untrained manpower. The levels of
technical, managerial, and vocational proficiency in such societies are
generally low, and difficult to raise. Raising them, however, is one of
the purposes of the development grant program. Contracts with
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14 FOREIGN ASSISTANCE ACT OF 1961
American universities and private consultants engaged in technical
training operations will be financed from the development, grant
program.
Contracts with private research groups who are helping to
strengthen a country's planning organization will also be financed
out of development grants. Health and sanitation programs, com-
munity development, housing, transportation, and oilier related
activities also fall under this program.
The committee approves the proposal to finance the development
grant program with appropriations that remain available until ex-
pended. The creation of viable political, economic, and social insti-
tutions is the work of many years. The cost of such activities is low
when compared with the cost of financing a multiyear economic
growth program. But the cost in time and patience is high, and the
potential benefits cannot be measured in dollars. Cultivating these
institutions is somewhat like-r
bowing delicate species of plants. They
are sensitive and fragile, and they frequently defy all of the wisdom
of the experts. As with projects financed with development loans,
these institutions require continuity if they are to grow.
Section 213 under this title provides authority to promote the
peaceful uses of atomic energy outside the United States. A separate
appropriation is not required; the money will conic out of funds
available for the development grant program. Atoms for peace
began as principally a reactor program. As of the end of fiscal year
1961, 23 reactors had been approved, of which 8 are presently in
operation. The U.S. share of the cost of any research reactor made
available to another government under this section shall not exceed
$350,000. The intention is to shift the emphasis of this program by
providing laboratory, field, and teaching equipment. The use of
consultants will expand. Program requirements for fiscal year 1962
will bear an estimated cost of $2 million.
Section 214 under this title authorizes assistance to schools, libraries,
and hospitals outside the United States that have been founded or
sponsored by American citizens. The President may use funds avail-
able for the development, grant program to help support the schools
and libraries. Foreign currencies owned by the United States may
also be used to assist these schools and libraries, and also the Aiqerican
hospitals abroad.
Section 215 authorizes payment of the costs of transporting volun-
tary relief supplies from U.S. ports to ports of entry in distressed
countries. Other than the American Red Cross the voluntary agencies
shipping such supplies must be registered with and approved 'by the
Advisory Committee on Voluntary Foreign Aid. Arrangements are
to be made with the receiving nation for free entry of such shipments
and for the payment by that nation of the internal shipping costs.
TITLE III?INVESTMENT GI: kNTIES
Title Ill continues and broadens somewhat the President's authority
to make guaranties of certain investments up to a face amount of
$ t . t billion. It also consolidates guaranty authorities which under the
existing legislation are assigned to ICA and the Development Loan
Fund. The purpose of this title is to expand the role of private enter-
prise in furthering.the economic growth of less-developed countries
/Ind areas.
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FOREIGN ASSISTANCE ACT OF 1961
Section 221 enumerates the specified risks against which guaranties
,can be made. These include inconvertibility of earnings or profits
and capital, loss of investment due to confiscation or expropriation,
and losses due to war. Guaranties may be issued to a citizen of the
United States or any corporation, partnership, or other association
created under the law of the United States or of any State or territory,
n d substantially beneficially owned by citizens of the United States.
Authority of up to $100 million in face amount is also available to
guaranty both equity and loan investments against unspecified risks.
These are called all-risk guaranties. The executive branch testified
that "this authority is to be considered and administered as an experi-
mental provision. It is designed to be responsive to unusual situa-
tions where special protection against risk is required in order to create
an environment in which private investment can play its full role."
An all-risk guaranty may not exceed 75 percent of possible loss.
It is limited in amount to $10 million. It must emphasize economic
development projects clearly related to social improvement in the
country concerned. The committee, in approving this authority,
expects that it will be used to encourage the development of small
independent business enterprises, credit unions, cooperatives, low-cost
housing projects and other similar activities.
No guaranty of an equity investment issued under this broader
."all-risk" authority will provide protection against loss resulting from
fraud or misconduct in the management of an enterprise, or from
normally insurable risks.
It is often difficult to attract equity investment into the less-devel-
oped countries, owing to the instability and strong nationalism, that
prevail in many of them. But these, of course, are the countries most
in need of such investment. Thus, a guaranty against loss of invest-
ment from an unspecified cause may sometimes be called for. Under
the new authoritity, such guaranties would be provided on a "share the
loss" basis. In the event the investment is lost, a prior agreement
would determine the proportion of the loss to be financed by the aid
agency and by the investor respectively. Although limited to offering
protection against not more than 75 percent of any possible loss, the
executive branch expects that, in most cases, not more than 50 per-
cent of such losses would become the Government's responsibility.
Furthermore, the executive branch intends to charge a substantial
fee on all-risk guaranties, and in some cases may require a portion of
the profits of the investments to be used for the benefit of the country
concerned.
It is also contemplated that private U.S. loans, as distinguished
from equity investment, will continue to be eligible for all-risk guar-
anties. As in the case of equity investment, not more than 75 percent
of any given loan could be guaranteed in this fashion.
Eligibility for all-risk guaranties?either in the case of equity invest-
ment or loans?will be determined by whether the President regards
such activities as "important to the furtherance of the purposes of
this title." In short, the priority attached both to the project and
the area will have to be high. In most cases, the all-risk guaranties
will represent alternatives to government-to-government transactions.
The guaranty program authorized under this title carries a number
of conditions. For instance, guaranties can only be issued in countries
with which the President has agreed to institute a program. Each
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16 FOREIGN ASSISTANCE ACP OF 1 6 I
project must be approved by the President. Guaranties may not
extend beyond .20 years from the date of issuance. They may not
exceed the original dollar value of the investment in a project, plus
earnings thereon. The President is directed to make suitable arrange-
ments for property turned over to the United States and claims to
which the Lmted States is subrogated as a consequence of guaranty
payments.
Section 222 requires that a fee shall be charged for each guaranty
in an amount to be determined by the President. It permits reduc-
tion of fees on outstanding guaranties if and when fee schedules are
reduced for guaranties of the same type. Under existing authority
fees charged for specified risk guaranties are limited to 1 percent. per
annum for inconvertibility guaranties and to 4 percent per annum for
expropriation and war risk guaranties. However, these limitations
are not, really relevant., since the fees charged have in recerl years
been one-half percent per annum for each of the three coverages
authorized. The new legislation provides authority to vary amounts
in accordance with experience. It is contemplated that the presen1.
practice of charging one-half percent per year for the specifed risk
coverages will be continued, though consideration may be given to
varying fees in varying circumstances. Fee charges for all-risk guar-
anties will also be varied according to the circumstances of each case.
Income from fees will continue to by available for meeting claims
under guaranties, and will also be available for meeting such manage-
ment and custodial costs as may arise when property is turned over
to the United States.
To date, the U.S. Government has never paid a claim on a guaranty
issued under this program. A fund of $6.9 million represents the
accumulation of fees charged for the guaranties. The direct adminis-
trative costs of the ICA program for calendar year 1960 amounted to
$162,800.
In computing the total face amount of guaranties outstanding at .any
one time for the purposes of the $1 billion ceiling, all outstanding
guaranties (other than informational media guaranties) issued under
previous authorities shall be included. Such claims against t 1e GOV-
eminent that may arise may be paid out of amounts specifically
reserved for this purpose, from fees, from proceeds of assets turned
over to the Government, if any, and from the proceeds of notes issued
under prior legislation.
All guaranties (other than informational media guaranties) may be
treated RS obligations only to the extent of their probable ultimate
net cost. Funds available for the payment of claims shall corstitute
it single reserve, except in the cases of guaranties issued prior to July 1,
1956, or under Development Loan Fund authority. Funds obligated
for guaranties in these two categories shall not, except with the consent
of the investor, be reduced and become part of the single reserve.
The explanation for this is that guaranties issued prior to July 1,
1956, have been treated as obligations up to 100 percent of their face
amount, while guaranties issued under DIY authority are supported
by a reserve of 50 percent, of face amount All other guaranties have
been issued on the basis of "probable ultimate net. cost." 'Pnis has
produced a reserve amounting to 25 percent of the face amount .of
outstanding guaranties. The intention is to continue this practice
and also to shift the I/LF and pre-1956 guaranties to a 25 percent
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FOREIGN ASSISTANCE ACT OF 1961 17
obligation basis, to the extent that owners of the relevant guaranty
contracts agree to this. This shift would not affect the value of these
guaranties, but it could free up to $27 million for other guaranties.
The term "investment," as used in this title, includes?
any contribution of capital commodities, services, patents,
processes, or techniques in the form of (1) a loan or loans to
an approved project, (2) the purchase of a share of owner-
ship in any such project, (3) participation in royalties, earn-
ings, or profits of any such project, and (4) the furnishing of
capital commodities and related services pursuant to a con-
tract providing for payment in whole or in part after the end
of the fiscal year in which the guaranty of such investment
is made.
Under the new legislation, the guarantee program will continue
to be administered under broad criteria, while the authority of the
Executive to issue guaranties is expanded. The committee approves
of giving this program some additional vigor and momentum. Private
investment in the less developed countries has remained well below its
potential, and the requirements for public assistance have been
correspondingly heavier. It is clear that private investors require
encouragement in the form of it program that will relieve them of
part of the burden of risk. The committee heard testimony that
fresh U.S. direct investment in Latin America was in excess of $300
million during 1958 and close to $400 million for 1959. But during
1960 such investment amounted to only $100_million. The reasons
for this decline are multiple, but there is little doubt that the ex-
propriations in Cuba were a strongly unsettling influence.
TITLE IV-SUFVEYS OF INVESTMENT OPPORTUNITIES
This title authorizes a fund of $5 million to finance up to 50 percent
of the cost of investment surveys and studies in less developed areas.
The funds shall remain available until expended.
Each survey must be approved by the President. However, sur-
veys of opportunities in the so-called extractive fields are specifically
prohibited. This would exclude surveys regarding sources of oil, gas,
and ores, along with studies aimed at determining the feasibility of
mining and other extraction operations. In the event a person or
company making a survey determines within a specified time not to
proceed further with the project studied, the report and supporting
material developed by the survey will become the property of the
U.S. Government. The term "person," as used here?
means a citizen of the United States or any corporation,
partnership, or other association created under the law of
the United States or of any State or territory and substan-
tially owned by United States citizens * * *
Feasibility studies can be contracted for by private industry under
the authority of both the present and the new legislation. However,
title IV provides specific authority and separate funds to help sup-
port surveys designed to encourage private U.S. investment in the
less developed countries. Previously, such surveys have been con-
tracted only to organizations that could not benefit directly because
they were excluded from consideration for whatever contracts might
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result from their exploratory efforts. Furthermore, with few excep-
tions, public bidding procedures have determined the awarding of
survey contracts. This has prevented the Government, from re-
sponding to the initiative of a private concern interested in making
a feasibility survey in a less developed area, provided some Govern-
ment support were available to minimize the uncertainties of the
venture.
TITLE V-DEVELOPMENT RESEARCH
This title represents a new program designed to contribute the re-
sults of systematic investigation to the improvement and the direction
of economic aid programs. The President is authorized to use funds
available for part I for the purposes of this title.
In his special message on foreign aid of March 22,1961, the President
proposed?
it program of research, development., and scientific evaluation
to increase the effectiveness of our aid effort.
The program authorized by this title is largely the product of recom-
mendations put forward by the President's Scientific Advisory Com-
mittee. It is contemplated as a modest program, to be conducted on
an experimental basis and involving an expediture of not more than
$20 million and possibly less. It represents an effort to minimize the
difficulties inherent in economic and social development. In the south-
ern continents, where the major portion of aid funds is programed, con-
ditions are vastly different from those in our own country. Climate,
soils, diseases, traditions, and social patterns all pose problems that
can frustrate development programs.
A good deal of research being undertaken in this country by the
foundations and universities is relevant to the problems in the less
developed societies. One of the major purposes of the development
research program is to relate this research more directly to specific
problems. First, needs and requirements must be identified and given
priorities. In some countries, the primary need is the development of
people. Educational and training techniques normally used in the
West may be irrelevant to problems that arise. from mass illiteracy,
absence of basic skills, and divergent cultural and social patterns.
Thus, technical assistance programs will have the intended effect in a
given country only if they are designed to cope with the problems
peculiar to that country. The hope is that. our research programs may
discover more appropriate educational and training techniques.
In some countries, the main problem is finding a way to harness
the resources of the country to its development plan. The technical
problems may involve agriculture, mining, power, industry:, and
public administration. The techniques and methods suitable for
tackling one country's combination of technical problems may not
be applicable to another's. Again, it is hoped that research programs
will find some answers for specialized situations.
It is contemplated that most of the activities under this program
will serve the purpose of improving the capability of less developed
countries to analyze their own problems. The committee heard
testimony that,?
In the end it is they who will have to deal with their own
technical, economic, and social problems. One of the most
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critical bottlenecks is the very limited number of people in
the underdeveloped countries capable of analyzing their own
problems systematically. Wherever possible research should
be carried on jointly by people and institutions with research
experience in the United States and Europe and by analysts
in the underdeveloped countries themselves.
Another big need is a better understanding of the interrelationships
among economic, political and social changes.
The program should encourage the research community to under-
take more projects that are relevant to the problems of the societies
we are seeking to assist. And it should serve as a clearinghouse in
which research activities can be evaluated and related to these
societies.
The committee, in approving this program, was mindful that
research and development occupies an important role in private
enterprise and in Government operations. More than 9 percent of
the Federal budget is spent on research and development. It would
seem highly advisable to expose the complicated and difficult problems
of the less developed areas to the formidable talents of the American
research community.
CHAPTER 3. INTERNATIONAL ORGANIZATIONS AND PROGRAMS
The bill authorizes appropriations of $153.5 million for the support
of international organizations and programs. The funds will remain
available until expended. Such contributions are presently made
under a number of sections of the Mutual Security Act. The authority
in the bill is limited to voluntary contributions (assessed contributions
are charged to Department of State appropriations) made on a grant
basis.
Of the funds appropriated under this section, in the fiscal year 1962
the following amounts may be used for the following respective
purposes:
(1) Not to exceed $40 million for contributions to the United
Nations Expanded Program of Technical Assistance and the United
Nations Special Fund.
(2) Not to exceed $12 million for contributions to the United
Nations International Children's Fund.
(3) Not to exceed $13,350,000 for contributions to the United
Nations Relief and Works Agency for Palestine Refugees in the Near
East.
(4) Not to exceed $62 million for contributions to the programs of
the United Nations in the Congo.
(5) Not to exceed $1,800,000 for contributions to the budget of the
United Nations Emergency Force.
(6) Not to exceed $3,400,000 for contributions to the malaria
eradication, water supply, and medical research programs of the
World Health Organization.
(7) Not to exceed $750,000 for contributions to the International
Atomic Energy Agency.
(8) Not to exceed $16,900,000 for contributions to the Indus Waters
Development Fund.
(9) Not to exceed $1,800,000 for contributions to the science pro-.
gram of the North Atlantic Treaty Organization.
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(10) Not to exceed $1,500,000 for contributions to the technical
cooperation program of the Organization of American States.
The bill preserves the existinz requiremmt that total U.S. contribu-
tions to the United Nations Expanded Programa of Technical Assist-
ance and the United Nations Special Fund for a calendar year may not
exceed 40 percent of the total contributions of all governments for
that purpose.
Also preserved is the requirement that the President, in determin-
ing the advisability of continued support of the Palestine refugee pro-
gram, "shall take into account (1) whether Israel and th.e. Arab host
governMents are taking steps toward the resettlement and repatria-
tion of such refugees, and (2) the extent and success of efforts by the
Agency and the Arab host governments to rectify the Palestine refu-
gee relief rolls."
Testimony before the committee indicated that in the past year the
United Nations Relief and Works Agency (UNRWA) has made some
progress in rectifying refugee rolls. The committee appreciates the
very sensitive and difficult nature of this undertaking, but hopes and
expects that UNRWA will continue its efforts to reduce the dimen-
sions of the problem. The Executive was unable to report any
progress toward it settlement of the refugee question. However,
fresh efforts are being made to bring the principal disputing elements
face to face with this cruel and frustrating problem. The general
outlines of a possible solution are perceived by a growing number of
interested people. The committee believes that, pending a sAtle-
ment, the United States must continue to support this program.
Funds in the amount of $13.35 million have been authorized for the
Palestine refugee program, in addition to $4.85 million that will be
carried over from the fiscal year 1961 appropriation. In an effort to
hold the dollar component to a minimum, the administration hopes
to pay a portion of the U.S. contribution under Public Law 480.
The United States is a member of the consortium that is film:icing
the development of the Indus Basin. Besides contributing substan-
tially to the economic growth of India and Pakistan, this project
removes one of the two important differences between India. and
Pakistan, and thus contributes to political stability in south Asia.
The project, which anticipates the world's largest irrigation system,
is supported by Australia, Canada, Germany, New Zealand, and the
United Kingdom, along with the World Bank, the United States and
India and Pakistan themselves. It is proposed to contribute $16:9
million as the U.S. share of the costs of the project in 1962 under this
section.
The largest sum authorized by this chapter is $62 million in
support of the U. N. operation in the Congo. Of this amount, $35
million is for economic assistance, and $27 million to help support the
U.N. military operations. The committee approves of this program.
The presence of the United Nations in the Congo has probably pre-
vented a conflict that, could have broadened into a dangerous inter-
national struggle. Moreover, there remains in the Congo a strong
potential for chaos and conflict. The single stabilizing element is the
United Nations' presence. It provides the order which is essential
to the efforts being made by Congolese leaders to settle their differ-
ences and develop a viable political system.
The next largest sum authorized by this chapter is $40 million to
the United Nations technical assistance program, which was created
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FOREIGN ASSISTANCE ACT OF 1961 21
in 1950, and the Special Fund which began operations in 1959.
Under the former program (ETAP), technical experts and fellowships
are offered to less developed countries, along with demonstration
supplies and equipment. Such assistance is programed through spe-
cialized agencies of the United Nations, or the U.N. itself. The pro-
gram is designed to help countries help themselves. It is financed by
voluntary contributions from some 80 governments.
The Special Fund is the product of U.S. initiative. It finances
preinvestment projects, usually of a long-term nature, that are basic
to economic development. These include surveys of power, soil, and
mineral resources, and the establishment of training centers that will
harness the unskilled labor resources of a country to its economic
development plans. It is felt that, wherever possible, these projects
should be carried out on a regional instead of a country basis.
A combined annual goal of $150 million has been set for the tech-
nical assistance program and the Special Fund. It is recommended
that the U.S. contribution comprise 40 percent of total contributions.
Pledges from other governments are expected to amount to approxi-
mately $60 million, calling for a U.S. contribution of $40 million. If
pledges from other governments exceed this amount, thus calling for
a larger U.S. contribution, the additional funds would be secured
from contingency funds authorized in this bill.
It is planned to contribute $12 million to the U.N. Children's Fund,
which is the same amount made available for this purpose for the past
3 years. The administration reported that pledges and contributions
from 97 other governments have increased regularly in recent years,
enabling the UNICEF program to expand and also allowing the United
States to decrease the percentage of its contribution. In 1952, the
U.S. share of the contributions and pledges to this program stood
at 72 percent. For 1962, the U.S. share represents 44 percent of the
total.
CHAPTER 4. SUPPORTING ASSISTANCE
The bill authorizes appropriations of $450 million for supporting
assistance to be used beginning in fiscal year 1962. It is proposed to
add to that, amount unobligated balances currently estimated at $50
million, thus providing this program with a total of $500 million.
The funds will remain available until expended.
Supporting assistance joins together in a single category those
programs which, in the existing legislation, have been labeled "defense
support," and some of the principal programs that are presently
known as special assistance. In effect, the supporting assistance
program will supersede these two categories and perform most of
their principal functions.
In general, defense support has consisted primarily of nonprojeet
aid given to countries carrying a necessarily heavy military burden.
Special assistance has consisted mainly of budgetary and other non-
project assistance given to countries like Jordan, which would face
economic collapse in the absence of such assistance.
In fiscal year 1961, the United States supplied $1.1 billion for
defense support and special assistance purposes to 37 countries.
For fiscal year 1962, the executive branch requested $581 million in
new authority for the supporting assistance program, an appreciable
reduction in the amount programed for comparable purposes in fiscal
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FOREIGN ASSISTANCE ACT OF 1961
year 1961; moreover,. 15 countries have been eliminated from the
ranks of those receiving this essentially unproductive kind of aid.
The committee is encouraged by the atypical tendency of the support-
ing assistance program, but hopes to find even more encouragement
next year. On that point, an official of the executive branch told the
committee that this year's program would be the last for seven
countries; that seven others should be phased out "within a few
years." The witness added that?
in eight countries, we do not now see any prospect for termi-
nating supporting assistance over the next few years, though
we shall keep these situations under constant review.
Supporting assistance programs are planned for 22 countries; in
14 of these, the program contemplated is less than the defense support
and/or special assistance obligated in fiscal year 1961. About tlu'ee-
fourths of the funds available for the program will be concentrated hi
seven countries. Most of these are on the rim of the Sino-Soviet
empire. They include Greece, Turkey, Pakistan, Korea, and Viet-
nam. These countries all carry the burden of larger military establish-
meats. than they can support. These military forces are considered
essential to their security. As such, they are essential elements in
our forward strategy, which is aimed at containing the spread of
communism.
The executive branch expects to phase out the supporting assistance
program in two of the countries named above after fiscal year 1962.
This will be possible as a result of the economic progress these societies
are making.
Although supporting assistance is largely grant aid, section 401
authorizes the President "to furnish assistance on such terms and
conditions as he may determine * * b." It is fair to say that apart
of the assistance provided under this authority will be in loans repay-
able in foreign currencies.
Most of the countries receiving the largest grants of supporting
assistance are members of security alliances. Turkey and Greece are,
of course, NATO members. Turkey, Pakistan, and Iran are joined
together in CENTO, while Pakistan and Thailand are in SEATO.
Certain oilier countries?all of them desperately poor and most of
them misgoverned?would probably collapse economically, if not politi-
cally, if they were deprived of supporting assistance. The committee
believes that in a few cases?a total collapse would not by itself
add to the misery and deprivation of the great majority of the people
concerned. But in removing the prop from under such a society
there is the danger of exchanging one kind of despotism for another.
This is the reasoning that traditionally has been used to justify
certain direct support programs. The committee believes that the
argument continues to possess validity, but that it cannot be applied
categorically or accepted uncritically. Henceforth, individual cases
must be studied on their merits. It. does not follow as the night
the day that the vacuum created by the departure of some despotisms
will be filled by communism. And for the United States to be com?
mitted over time stretch of time to defending an essentially indefensible
status quo would amount to injustice, political error, and waste of
the tax-payer's money.
Some members were especially concerned. with the size of the pro-
gram in Korea, where roughly $4ji billion m economic and military
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FOREIGN ASSISTANCE ACT OF 1961 23
assistance has been spent over the years. Nearly $3 billion of this
has been defense support, a program now covered by supporting
assistance. The results of this investment have been discouraging,
to put the case mildly.. Admittedly, Korea remains an independent
,country, which has been the primary objective of the program.
However, there is some feeling that Korea's security requirements
might be satisfied with a less expensive program.
The committee recognizes the fact that this is a transitional year,
and that the new administration has not had sufficient opportunity
to examine some of the more questionable direct support programs
,on their merits. However, the executive branch is on notice that
these cases will be exhaustively reviewed by the committee next year;
and that new arguments may be required to justify some of them.
CHAPTER 5, CONTINGENCY FUND
Section 451 authorizes an appropriation of not to exceed $300 mil-
lion for a contingency fund to be used by the President for economic
purposes that he determines to be important to the national interest.
Congress will be kept currently informed of the use of funds available
-under this section.
The contingency fund is an essential part of the aid program, and
has been provided annually. It is used to meet important but unfore-
seen problems as they arise. Last year, the authorization bill for the
mutual security program provided a contingency fund of $150 million.
This was increased to $250 million, as a result of the Congo crisis, the
,earthquake in Chile, and increased Communist pressure in certain
areas. Finally, the President transferred to the contingency fund an
additional $35 million out of military assistance funds, thus bringing
the total amount to $285 million. This sum was nearly exhausted at
the end of the fiscal year.
Contingency funds were also used last year to provide grants to 15
newly independent African States. They were used to support efforts
of the new Governments of Turkey and Korea to introduce economic
reforms and stabilization programs. Other purposes included support
for the Indus Basin development plan, an increase in the U.S.
contribution to the United Nations technical assistance program and
Special Fund, and relief of acute economic crises in Guatemala,
Haiti, Honduras, and Panama. Natural disasters, including the
earthquake in Chile, floods in the Philippines, and typhoons in East
Pakistan, also called for extraordinary assistance to help meet relief
and rehabilitation costs.
In all parts of the world, the Sino-Soviet bloc is applying pressure
against independent societies. Whatever their ideological disagree-
ments, the Communist powers are united on the policy of encouraging
strife and rebellion in the less developed societies that they do not
control. Many persons believe that we are entering a period of multi-
ple crises. Instead of concentrating on one trouble spot?Berlin, for
example?there is the danger that Mr. Khrushchev will "give the
whole tree a shake just to see what falls." In any case, we can expect
more, not less, instability in the days that lie ahead. For that reason,
the committee recommends approval of a contingency fund in the
amount authorized by this chapter.
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FOREIGN ASSISTANCE ACT OF 1961
PART II
CHAPTER 1. STATEMENT OE POLICY
Section 501 declares that this part may be called the "International
Peace and Security Act of 1901." It will supersede the military
assistance provisions of the Mutual Security Art.
In section 502, the Congress reaffirms the policy of the United
States to achieve international peace and security through the United
Nations. The threat to world peace posed by international com-
munism is recognized, and Congress restates its belief that "the
security of the Unitecl States is strengthened by the security of other
free and independent countries." It is, therefore, the policy of the
United States
to furnish to such countries cooperative military assistance
of a kind and in an amount reasonably designed to help them
provide for their own security against such aggression and
for the security of international organizations of which they
may be members.
CHAPTER 2. MILITARY ASSISTANCE
This chapter provides a 2-year authorization for military assistance
programs. The sum of $1.8 billion is authorized to be appropriated
for use beginning in each of the fiscal WM'S 1962 and 190, and the
funds shall remain available until expended.
Military assistance may be furnished on such .terms and conditions
as the President may determine, and to any country, subject to con-
ditMns of eligibility, or international organization, the support of
which the President finds to be in the national interest.
Assistance may be provided in a variety of ways. Defense articles
or services acquirN1 from any source may be provided by loan, lease,
sale, exchange? grant, or any other means. Contributions may be
made to multilatend progrants designed to develop defense infra-
structure. Financial assistance essential to the purposes or the bill
may be provided, including expenses incident to U.S. participation in
regional or collective defense organizations, and military budget.
support (either directly, or indirectly by generating local currencies).
Meinbers of the Armed Forces and employees of the Departin,mt of
Defense may he available for this program, but only to serve in On ad-
visors- capacity or to perform other duties of a noncombatant nature.
The President. is directed to establish procedures for programing
and budgeting that will bring military assistance into direct competi-
tion for financial support. with other activities of the Defense Depart-
ment. The purpose of this provision is to make certain that funds
spent on military assistance serve as important a purpose as funds
spent for the U.S. Military Establishment.
Section 505 specifies that military assistance to any country shall
be furnished only for internal security; for legitimate self-defense; for
participation in regional or collective security arrangements consistent
with the United Nations Charter; for participation in collective meas-
ures sponsored by the United Nations and designed to maintain or
restore peace and stability. This subsection also recommends that
military assistance programs encourage to the greatest possible extent
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the participation by military forces of less-developed countries in pro-
grams designed to foster economic development.
Section 506 provides that before becoming eligible to receive defense
articles on a grant basis, a country must agree that it will not, without
the consent of the President: (1) permit any use of such articles by
anyone not an officer, employee, or agent of that country; (2) transfer,
or permit any officer, employee, or agent of that country to transfer
such articles by gift, sale, or otherwise; (3) use or permit the use of
?such articles for purposes other than those for which furnished.
A recipient country must also have agreed to maintain the security
of articles in a manner consistent with the security protection afforded
to such articles by the U.S. Government. Also to the extent required
by the President, the recipient country must agree to permit observa-
tion and review by U.S. officials, and also make available the necessary
relevant information to these officials. When defense articles are no
longer needed for the purposes for which furnished, they will be
returned to the U.S. Government, unless the President agrees to some
"other disposition."
As further conditions of eligibility, the recipient country must agree
to?
(1) join in promoting international understanding and
good will, and maintaining world peace; (2) take such action
as may be mutually agreed upon to eliminate causes of inter-
national tension; (3) fulfill the military obligations, if any,
which it has assumed under multilateral or bilateral agree-
ments or treaties to which the United States is a party;
(4) make, consistent with its political and economic stability,
the full contribution permitted by its manpower, resources,
facilities, and general economic condition to the development
and maintenance of its own defensive strength; and (5) take
all reasonable measures which may be needed to develop its
defense capacities.
Section 507 provides that defense articles from the stocks of the
Department of Defense, plus defense services, may be sold for dollars
to countries and international organizations. This authority has been
in the law for several years and does not involve the use of funds that
are available for use under this part. Payments may be made in
advance or on terms of credit up to 3 years. The President is author-
ized to enter into contracts for procuring defense articles and services
for sale without charging any appropriation or contract authority,
provided the purchasing country provides a "dependable undertaking"
to pay in advance amounts sufficient to meet all payments, including
damages for breach of contract.
Section 508 provides that dollar repayments for military assistance
supplied on cash or credit terms shall be credited to the current appli-
cable appropriation, and can be used until expended, but only for the
purpose of furnishing additional military assistance on such terms.
This provision covers dollar proceeds derived from the sale of foreign
currency repayments. It authorizes the use of foreign currency
repayments for the purposes of this part.
Section 509 provides that defense articles and services transferred
to the U.S. Government as payment for assistance furnished under
this part may be used to carry out this part. It also authorizes the
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FOREIGN ASSISTANCE ACT OF 1961
disposal or transfer of such items to any U.S. Government agency for
stockpiling. Any reimbursements received as a result of such trans-
fers shall be credited to the account funding the assistance that was
exchanged for the items concerned, or to any other appropriation, fund,.
or Section
currently available for the same general purpose.
Section 510 provides that, the President can order supplie.3 from
existing stocks of the Department of Defense, as well as defense serv-
ices, to be furnished for military assistance purposes, provided he first
determines that the use of such supplies and services is "vital to the
security of the United States." The authorization is limited in
amount to $200 million annually, and it provides for "prompt notice
of action taken" to the appropriate conmuttees of Congress.
This subsection also provides that the Department of Defense is to.
be reimbursed from subsequent, appropriations for military assistance;.
that the Department, in anticipation of such reimbursements, may
incur obligations in amounts equivalent to the value of the orders.
The purpose of this special authority is to enable the President to
meet contingencies that arise from the unpredictable events tint; occur
from time to time in this uncertain and changing period of history.
Indeed, this entire part reflects the need for additional flexibility
meeting increased Communist, pressure.
Section 511 retains a $55 million ceiling on grant military equipment
to Latin America, and further stipulates that, unless the President
determines otherwise, internal security requirements shall not be the
basis for any military assistance to Latin American countries. A
sum equal to the amount by which the ceiling reduces the grant equip-
ment program planned for Latin America this year will be transferred
to the funds made available for development grants in that area.
It is contemplated that 22 percent of this year's military_program
will be spent in Europe, as opposed to 33 percent last year. The sums
involved will cover the U.S. contribution to the NATO infrastructure-
program, as well as European country programs which are limited
almost exclusively to projects begun in earlier years. The propor-
tionately smaller share for the European area does not indicate a
downgrading of the importance of NATO; instead, it reflects tho rising
capabilities of many European nations to meet their own military
requirements.
More than half of the proposed program will cover the costs of.
maintaining forces in being and fixed charges. About 40 percent will.
be used to provide modernized and improved weapons for areas subject_
to the most, immediate pressure. The thrust of the program is in
those countries which face the threat, of internal aggression, direct
external aggression, or both, as in the case of some nations contiguous,
to the Sino-Soviet empire. While the problem is especially severe in
the Far East, elsewhere in Asia, Africa, and Latin America the tempo.
of Communist activity is quickening, the weight of Communist pres-
sure growing. The, threat is presented in various forms. In one
country, it may be Communist, guerrillas terrorizing peasants, killing
local officials and destroying public facilities. In another country,
rioting, strikes and preplanned incidents designed to provoke violence-
are the more suitable techniques. In other countries, the technique
has not vet clearly emerged, but the clandestine buildup of Communist.
arms is proceeding at a. brisk rate.
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The authority in this military program reflects a need for the addi-
tional flexibility that will enable countries whose security is menaced
to meet the problem in whatever form it appears.
PART III
CIIAPTER 1. GENERAL PROVISIONS
This chapter of the bill contains general provisions similar to those,
which have been in past foreign aid legislation relating to private.
enterprise (especially small business); shipping; procurement; the-
use and disposition of commodities, foreign currencies, and other
items; patents and technical information; transfer of funds between
accounts; the completion of plans and cost estimates; contract
authority; availability of funds; and termination of assistance. Tho
chapter also contains (in sec. 614) special authority, as has been
provided in the past, for the President to waive legal requirement&
respecting assistance of $250 million and provides him with $50,
million in unvouchered funds. The principal new provision is found
in section 608, which authorizes the use of $5 million in development
grant money for the advance acquisition of Government-owned excess.
property. These are explained in more detail below.
A. FREE ENTERPRISE AND PRIVATE PARTICIPATION (SEC. 601)
This section is a rewrite of language which has been in foreign aid
legislation for many years. In the policy statement in subsection
(a), Congress recognizes "the vital role of free enterprise in achieving
rising levels of production and standards of living essential to economic
progress and development." In regard to other countries generally,
it is declared to be the policy of the United States to encourage the
efforts of those countries "to increase the flow of international trade,
to foster private initiative and competition, to discourage monopo-
listic practices, to improve the technical efficiency of their industry,
agriculture, and commerce, and to strengthen free labor unions."
In regard to less developed countries specifically, it is declared to
be the policy of the United States to encourage the contribution of
American enterprise toward the economic strength of those countries
through private trade and investment and the exchange of ideas and
technical information. It is specifically provided that private trade
channels are to be used to the maximum extent practicable in carrying
out programs under the act.
The President is directed (in subsec. (b)) to "make arrangements
to find, and draw the attention of private enterprise to, opportunities
for investment and development in less-developed countries and
areas." This provision should be read in conjunction with part I,
chapter 2, title IV which authorizes more active participation by the
Government in surveys of investment opportunities (see above).
Subsection (b) of section 601 also carries forward existing provisions
of law directing the President to accelerate a program of negotiating
commercial and tax treaties, to seek compliance with such treaties,
and to take all reasonable measures to assist U.S. citizens in obtaining
just compensation for losses suffered as a result of treaty violations
by other countries.
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It Ls to be noted that two provisions of existing law (currently
found in sec. 413(c) and (d) of the Mutual Security Act) are not
reenacted by the pending bill. These provisions require annual studies
of the role of private enterprise and a single study of the role of other
industrialized countries, in carrying out the purposes of the net. The
latter study has been made, and the provision calling for it is therefore
obsolete. The role of private enterprise is under continuous review,
and the committee sees no particular virtue in requiring annual, sep-
unite studies, particularly in view of the inclusion in this bill of title IV
(surveys of investment opportunities) and title V (development
re-
search) of chapter 2 of part I.
B. SHALL BUSINESS (SEC. 602)
This section continues the special attention which has long been
given to ,American small business in carrying out the foreign aid pro-
gram. It provides that American suppliers, especially small inde-
pendent- enterprises, are to be informed as far in advance as possible
of purchases to be financed with foreign aid funds. Further, pros-
pective purchasers in countries receiving assistance are to be informed
of goods and services produced by small independent business in the
United States. Filially, the President is directed to provide for
"additional services" to give small business better opportunities to
participate in providing goods and services under the act.
This section also carries forward the provision of existing law creat-
ing an Office of Small Business, headed by a Special Assistant for
Small Business, to promote small business opportunities; and it like-
wise provides, as does the present law, for tire Secretary of Defense to
give special attention to small business in administering the military
assistance program.
C. SHIPPING ON U.S. VESSELS (SEC. 603)
This section is the same as section 509 of the Mutual Security Act.
It exempts from the 50-50 shipping requirement the transportation
between foreign countries of goods purchased with foreign currencies
acquired under the bill and under Public Law 480 (the Agricultural
Trade Development and Assistance Act). This exemption is neces-
sary in cases in which, for example. surplus agricultural commodities
have been sold to a country in Western Europe for that country's
currency which has then been used to buy goods for use in the aid pro-
gram in a third country. Such triangular transactions could not be
carried out if the 50- -50 shipping provision applied. It is to be noted,
however, that the 50- -50 provision will continue to apply to other
shipments of commodities which the United States procures or directly
arranges for the other country to procure, except to shipments of fresh
fruits and their products, which have long been exempt, and to certain
shipments in connection with the Indus Basin development plan,
which have also been hitherto exempt. fir the latter ease section 303
requires that compensating allowances be made in other shipments.
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FOREIGN ASSISTANCE ACT OF 1961 29
D. PROCUREMENT (SEC. 604)
This section has been tightened somewhat compared to existing
law in its provisions relating to offshore procurement.
Subsection (a) authorizes the use of funds for offshore procurement
only if the President determines that the advantages of such procure-
ment will not be outweighed by adverse economic effects in the United
States. It also provides that no commodities shall be purchased
outside the United States at a price equal to, or higher than, the market
price prevailing in the United States, adjusted for differences in
quality, cost of transportation, and terms of payment.
Subsection (b) deals with commodity procurement generally,
whether in the United States or abroad. It prohibits the bulk
purchase of commodities at prices higher than the prevailing market
price in the United States, adjusted for differences in transportation
costs, quality, and terms of payment. The pending bill does not
carry forward the present law's exemption of the purchase of raw
cotton in bales.
Subsection (c) requires that insofar as practicable surplus agri-
cultural commodities to be furnished on a grant basis must be bought
only in the United States except to the extent that they are not avail-
able here in sufficient quantities to meet emergency requirements.
E. RETENTION AND USE OF ITEMS (SEC. 605)
Subsection (a) makes .provision for cases which May arise when
changing circumstances make it inadvisable to furnish goods which
have already been procured for use in the aid program. Whenever
the President determines such a course will serve the best interests
of the United States, such goods may be retained by the procuring
agency or transferred on a reimbursable basis to another agency.
They may be either used or disposed of by the agency in question;
and when necessary to prevent spoilage or wastage or to conserve their
usefulness, the disposal may be without regard to provisions of law
relating to the disposition of Government property.
Funds realized from such disposal (or, in the case of transfers,
funds accruing from interagency reimbursements) are to revert to the
appropriation account from which the goods were procured in the first
instance or to the amount currently available for such procurement.
The corresponding provision of the present law (sec. '511(b) of the
Mutual Security Act) provides that goods shall be handled in this
manner whenever called for by concurrent resolution as well as when-
ever a Presidential determination is made. The provision for the
concurrent resolution method is not carried forward, it has never
been used, and section 617 of the bill provides that any assistance can
be terminated by concurrent resolution.
Subsection (b) provides that commodities received by the United
States as payment in kind for assistance furnished under the bill may
themselves be used to provide assistance to other countries. This
subsection, which is similar to a provision in section 505(a) of the
Mutual Security Act, makes possible arrangements whereby, for ex-
ample' the United States may furnish a European country with one
kind of commodity in return for a second kind which, in turn, is then'
furnished to another country.
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80 FOREIGN ASSISTANCE ACT OF 1961
F. PATENTS AND TECHNICAL INFORMATION (SEC. 606)
This section is a. rewrite and simplification, without substantial
change, of a provision which has been in the law for many years as
section 506 of the Mutual Security Act, It. is designed to meet those
cases in which patents or information protected by proprietary rights
are disclosed by the U.S. Government in connection with furnishing
assistance under the bill.
In such cases, the aggrieved party may sue the United States either
in the Federal court, in the district where he resides or in the Court
of Claims within a period of 6 -years. Provision is also made in sub-
section (b) for out of court settlements.
G. FURNISHING OF SERVICES AND COMMODITIES (SEC. 607)
This section authorizes Government agencies to furnish services
and commodities on a reimbursable basis to nations, international
organizations, and voluntary nonprofit relief agencies, whenever the
President determines that this would further the purposes of part I
of the bill, relating to international development. Except for volun-
tary agencies, similar authority has been in the law for several years
(sec. 535(b) of the Mutual Security Act). The committee feels that
the addition of voluntary agencies provides a potentially useful tool
to the foreign aid program, without cost to the Government.
H. ADVANCE ACQUISITION OF PROPERTY (SEC. 608)
This section introduces a new element into the foreign aid program.
It authorizes establishment of a $5 million revolving fund, from de-
velopment grant appropriations, to be used to acquire in advance of
known needs excess Government property for future use in the eco-
nomic aid program. The authority would also apply to advance ac-
quisition of other property, but the intention is that this would be
used to acquire only such other items as might be necessary to com-
plement excess property. As the property is used to furnish assist-
ance, the $5 million revolving fund will be replenished from the
appropriation applicable to the particular purpose of the assistance,
i.e., development loans, development grants, supporting assistance,
etc. Excess property acquired under this authority may also be
furnished on a reimbursable basis to the nations, international or-
ginizations and voluntary agencies covered by section 607. And such
reimbursement may also be used to replenish the fund.
The commit:hee has long been of the opinion that ways should be
found to make use of the vast quantities of excess property owned
by the Federal Government. Two years ago the committee wrote
into the Mutual Security Act a provision authorizing the use of up
to $2.5 million of the contingency fund to make available machine
tools and other industrial equipment to foreign small business con-
cerns in underdeveloped countries. This provision was rendered
ineffective by language in a subsequent appropriations act, but one of
the uses of the authority which the coimnittee had in mind was to
make it easier for small business abroad to acquire surplus machine
tools owned by the United States, principally the Department of
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FOREIGN ASSISTANCE ACT OF
Defense, which are obsolete by American standards but which could
make a substantial contribution to industrial growth in under-
developed countries. A similar program would be assisted under
section 608 of the pending bill.
The provision now proposed would further the transfer of a Feat
variety of property in addition to machine tools. Except for minor,
incidental items which would be acquired from private suppliers, the
property involved is as much a burden as it is an asset to the Federal
Government which cannot realistically expect ever to make significant
use of it or to recapture more than a fraction of its original cost.
Section 608 of the pending bill would assist in putting at least a part
of this property to productive use.
I. SPECIAL ACCOUNTS
A considerable portion of the grant economic assistance funds wilt
be used to finance commodity imports and other forms of nonproject
assistance. The commodities are financed with dollars, and are nor-
mally sold through private channels for the local currency of the
recipient country. Under section 142(b) of the existing legislation,
the local currency proceeds aro deposited in a special counterpart fund
which is also used for purposes agreed upon by the United States and
the host government. This section was amended to become permis-
sive instead of mandatory. The committee agrees with the executive
that in some cases these local currency funds can be used more effec-
tively within the framework of a given country's overall development.
plan and in accordance with the stated self-help criteria. The problem
arising from the mandatory procedure is that some countries may use
counterpart funds for jointly accepted purposes, while using other
larger amounts for purposes that are sometimes inconsistent with
longrun economic objectives. The intent of this bill is to relate all
of a country's resources, not just aid funds and counterpart to the
achievement of these objectives. Furthermore, in many cases the
special fund requirement has created friction in that it has seemed to
compel some governments to take measures that they would have
taken anyway.
J. TRANSFER BETWEEN ACCOUNTS (SEC. 610)
This is the standard transferability section which has been part of
foreign aid legislation for many years. It provides that, whenever
the President determines it to be necessary for the purposes of the
act, up to 10 percent of the funds made available for any provision
of the act may be transferred to any other provision except that the
latter provision may not be increased by more than 20 percent.
This provision in the past has proved to be valuable in meeting
changing circumstances and changing program needs. It is to be
noted that, although this authority can be used to augment funds
for development loans, it cannot be used to decrease them. (See
Sec. 201(b) above.) Further, under section 634(d) (see below), the
President is required to notify promptly the Senate Appropriations
and Foreign Relations Committees and the Speaker of the House of
any transfers.
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K. COMPLETION or PLANS AND COST ESTIMATES (SEC. GA)
This section is based on the provision of existing law found in
section 517 of the Mutual Security Act. It provides that, with
respect to development loans, development grants, and supporting
assistance, funds in excess of $100,000 cannot be obligated until
engineering, financial, and other plans necessary to carry out the
project in question have been completed and there is a reasonably
firm estimate of the cost of the project to the United States. In the
case of water or related land resource construction projects, the plans
must include a computation of benefits and costs made insofar as
practicable in accordance with Budget Bureau procedures for such
projects in the United States.
In cases in which the proposed aid requires legislative action within
the recipient country, obligations in excess of $100,000 are prohibited
unless such legislative action "may reasonably be anticipated to be
completed in time to permit the orderly accomplishment of tile pur-
poses" of the aid.
These requirements do not, however, apply to assistance furnished
for the purpose of preparing plans.
Finally, it is provided in subsection (c) that contracts for construc-
tion outside the United States made in connection with projects sub-
ject to these requirements are to be made on a competitive basis to the
maximum extent practicable.
L. USE OF FOREIGN CURRENCIES (SEC. 612)
This section provides that foreign currencies received as a result of
economic aid programs are first to be used for-payment of U.S. Govern-
ment expenses abroad, with an equivalent charge against thc dollar
appropriation of the spending agency. First call upon these curren-
cies is given to educational and cultural exchange activities. Foreign
currencies which are excess to the Government's foreign expenses
are made available for further use in economic aid programs.
This section does not apply to foreign currencies which may be
received as a result of payment of a loss on an investment guaranty
(see sec. 222(d) above) or to foreign currencies received from the dis-
posal of surplus agricultural commodities, either under section 402 of
the Mutual Security Act or Public Law 4S0.
This is generally similar to authority currently found in section 505
of the Mutual Security Act. It enables aid dollars to do a kind of
double duty, and it helps to prevent sterile accumulations of foreign
currencies.
M. ACCOUNTING, VALUATION, REPORTING, AND AUDITING OF FOREIGN
CURRENCIES (SEC. 613)
This section establishes new rules and criteria for accounting and
reporting procedures regarding foreign currencies owed to or owned
by the United States.
First, it puts in the Secretary of the Treasury the responsibility for
these functions and authorizes him to issue regulations in these
respects binding upon all agencies of the Government.
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FOREIGN ASSISTANCE ACT OF 1961 33
Second, it gives the Secretary of the Treasury sole authority to
establish the exchange rates at which all foreign currencies or cradits
are to be used by all Government agencies.
Third, it requires each agency to report to the Secretary of the
Treasury an inventory as of June 30, 1961, showing all foreign cur-
rencies on hand The Secretary of the Treasury is to prepare a
consolidated report for the Congress. Thereafter semiannual reports
are to be required.
Finally, the Comptroller General is instructed to audit the first
report and is authorized to audit subsequent reports as he deems
desirable.
This section results from a growing dissatisfaction within the com-
mittee regarding the, accounting methods used for foreign currencies
and a growing feeling of frustration in dealinc, with reports on the
value of these currencies owned by the United States. The com-
mittee hopes that these new provisions will help to clarify the situation.
N. SPECIAL AUTHORITIES (SEC. 614)
This section contains three kinds of special authorities for the
President, all of them analogous to authorities now found in sections
403 and 451 of the Mutual Security Act.
Subsection (a) provides that the President may authorize the
furnishing of assistance of $250 million a year without regard to the
requirements of this bill, the Battle Act, or any act appropriating,
funds for use under this bill or amendments thereto. Within the
specified limit of $250 million, this authority applies to funds made
available for use under this bill as well as to Department of Defense
funds which may be used under authority of section 510 (see above).
The President has had similar authority, in regard to similar amounts
in the past.
Subsection (b) provides that supporting assistance funds, as avail-
able and necessary, may be used "to meet the responsibilities or
objectives of the United States in Germany, including West Berlin,"
whenever the President determines it to be important to the national
interest and without regard to any law which the President determines'
should be disregarded. Heretofore the President has had such au-
thority, albeit within a stated monetary limit ($6,750,000 in fiscal
1961). No such limit is imposed in the pending bill, because neither
the administration nor the committee can suggest an appropriate
ceiling. In one set of circumstances, the requirements of West Berlin
will be very small; in another, they could be very large. In any
event, it seems to the committee important that these requirements
be met and that the President have sufficient authority to do so
swiftly and effectively.
Subsection (c) provides that up to $50 million of the funds made
available under the act may be used by the President on an un-
vouchered basis. Similar authority with regard to similar amounts
has been available for several years. It has been rarely used.
Past foreign-aid legislation has contained a limitation of $30 million
on the funds which may be allocated to any one country under the
President's special authorities. That limitation is not carried for-
ward in the pending bill.
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34 FOREIGN ASSISTANCE ACT OF 1961
It is important to note that section 614 of the bill does not increase
the funds provided. The section simply authorizes the waiver of
statutory requirements with respect to the expenditure of specified
portions of those funds.
0. CONTRACT AUTHORITY (SEC. 616)
This section is identical with section 515 of the Mutual Security
Act. It simply provides that appropriation acts may contain
authority to make contracts, within the amounts authorized to be
appropriated, creating obligations in advance of appropriations.
P. AVAILABILITY OF FUNDS (SEC. 616)
This section is also similar to the existing law (sec. 507 of the
Mutual Security Act). It states that, except as otherwise provided,
funds shall be available to carry out the act as authorized and appro-
priated each year.
Thus, it is made clear that funds for development grants, supporting
assistance, the contingency fund and similar programs must be
authorized, as well as appropriated, annually. This section does not,
of course, affect the long-term borrowing authority contained in
section 202(a) and the 2-year authorization for military assistance
appropriations in section 504. Neither does it affect the availability
of appropriations without fiscal year limitation, where such are
authorized.
Q. TERMINATION OF ASSISTANCE (SEC. 617)
Subsection (a) simply provides that unless terminated sooner by the
President, assistance under any provision of the act may be ter-
minated by a concurrent resolution of Congress. Funds will remain
available for up to a year to provide for orderly liquidation of such
programs.
Subsection (b) in effect reenacts section 503(b) of the Mutual
Security Act of 1954. It provides that the President, unless ho deter-
mines it to be inconsistent with the national interest, shall suspend
assistance to country which has nationalized or expropriated Ameri-
can property and has failed to take appropriate steps within 6 months
to discharge its obligations under international law.
R. ECONOMIC ASSISTANCE TO LATIN AMERICA (SEC. 618)
This section provides that development loans and development
grants furnished to Latin America shall be in accordance with the
principles:of the Act of Bogota. This act, which was-signed September
13, 1960, by. 19 of the 21 American Republics (the 2 exceptions being
Cuba and the Dominican Republic) sets up the framework for the
broad program of social reform and economic progress which underlies
the alliance for progress. It provides for such things as land and
tax reform, agricultural credit institutions, and the improvement of
housing and community facilities, educational systems and training
facilities, and public health. It provides, in short, for the kinds of
institutional changes which, in the opinion of the committee, are
indispensable for sustained economic growth in Latin America. The
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FOREIGN ASSISTANCE ACT OF 1961 35
committee does not believe that outside assistance to Latin America
would be effective in the absence of such changes, and hence it has
added to the bill the requirement of section 618.
S. ASSISTANCE TO NEWLY INDEPENDENT NATIONS (SEC. 619)
This section provides that, to the maximum extent appropriate in
the circumstances of each case, economic assistance to newly inde-
pendent countries shall be furnished through multilateral organiza-
tions or in accordance with multilateral plans on a fair and equitable
basis with due regard to self-help.
The purpose of this section is to prevent, insofar as possible, the
United States from assuming continuing and increasing obligations
through bilateral arrangements with the rapidly emerging new
countries of the world. The committee agrees that these countries
need help and should have help. But it also believes that this is not,
and should not be, the sole or oven the major responsibility of the
United States. Bilateral arrangements do not necessarily provide the
most effective means of extending help and of accomplishing U.S.
objectives. The other developed nations of the world, particularly
the members of the Development Assistance Group, also have a
responsibility and an interest in seeing the new countries make a
success of their ventures into statehood.
The section is deliberately written in broad terms so that it applies
to assistance furnished either through multilateral organizations, such
as the United Nations or its specialized agencies, or in accordance
with multilateral plans, such as might be agreed to by the OECD or,
possibly, by some new economic grouping of African nations. It is
the intent of the committee that the contributions of other nations
be in reasonable proportion to their responsibility and capacity and
that the recipient countries should, in all cases, take vigorous and
affirmative measures to help themselves and to make the most effective
use of the aid they receive.
One multilateral vehicle through which assistance to newly inde-
pendent countries might be offered is the recently created Inter-
national Development Association, an affiliate of the International
Bank for Reconstruction and Development,
PART III
CHAPTER 2. ADMINISTRATIVE PROVISIONS
This chapter effects a major revision in the organization of the aid
program. It also contains provisions designed to improve adminis-
tration and personnel performance, including provision for the selec-
tion out of personnel not meeting adequate performance criteria, and
standard provisions on interagency relationships, bookkeeping opera-
tions, and uses of funds.
The reorganization contemplated by this chapter will result in the
abolition of the International Cooperation Administration and the
creation of a new agency which will have responsibility for non-
military aid functions. The new agency will be headed by a person
with the rank of an Under Secretary and will also have two persons
with the rank of Deputy Under Secretary and nine with the rank of
Assistant Secretary. The Development Loan Fund will continue to
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36 FOREIGN ASSISTANCE ACP OF 1901
be a separate fund in the new agency and lending activities will have
special staff assigned under the supervision of one of the two senior
officials having Deputy Under Secretary rank. The Development
Loan Fund, though it will no longer be tiseparate Government corpo-
ration, will continue to operate in accordance .with the principles of
the Government Corporation (:'ont rot Act.
A. EXERCISE OF FUNCTIONS (SEC. 821)
UltittlatO authority in the act is legally vested in the President, as
.the head of the executive branch and the officer constitutionally re-
sponsible for the conduct of the Nation's foreign policy. Inasmuch as
the President obviously cannot exercise all of these functions person-
ally, section 621(a) authorizes hint to exercise them through an'
agency or officer of the Government. Furthermore, such au officer
or the ,head of such an agency may promulgate rules and regulations
regarding these functions. The functions may be delegated and
delegated within an agency.
Subsections (b) through (e) are designed to provide for the orderly
transfer of economic aid functions from ICA and the old DM,' to the
new agency. 1CA, as well as DLF in its present corporate form, are
to continue in existence for 60 dwt7s.; after the effective date ol the act,
unless sooner abolished by the President. This provision is neces-
sary because section 612(a)(2) of the bill (see below) repeals most of
the Mutual Security Act of 1954, including the portions creatin!, these
agencies aml they would therefore automatically cease to exist on the
effective date of the bill unless provision were made to the contrary.
Their continuance for a maximum period of _60 days will give the
President opportunity to issue the necessary Executive orders creat-
ing the new agency and to provide for an orderly transfer of functions,
personnel, records, and property.
Subsection (c) requires the President to designate an officer to
receive the presently existing corporate assets and liabilities of the
Development Loan Fund and to serve as the person to be sued in
the event of default in the fulfillment of the obligations of the Fund.
This is a technical provision necesstitated by the change in the DLF's
corporate Status.
Subsection ((A) provides for the transfer of the property and per-
sonnel of ft 'A to ant officer or head of an agency carrying out economic
assistance. rthier both subsections (c ) and (d t ail personnel of tine
exiting w,eneies will automatically shift to the new arzency,
Subsection (e) provides for a similar transfer of the Export-Import
Bank's assets and liabilities growing out of the so-called Cooley
amendment. loans made by the Bank under section 104(e) of Public
Law 480. This provision of Public Law 480 makes available for loans
to private business abroad up to 25 percent. of the foreign currencies
received in sales of surplus agricultural commodities. Under the
existing provisions of Public Law 481), these loans are made through
the Export-Import Bank, but section 70:1 of this bill (see below)
amends Public Law 480 to provide that the loans will be made by
such agency as the President may direct instead of by the hxporl,-
Import Bank. The provision for a transfer in section 621(e) will
make it possible to divest the Export-Import Bank of the task of
administering Cooley loans which have already been made.
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FOREIGN' ASSISTANCE ACT OF 1981 37
B. SECRETARIES OF STATE AND DEFENSE (SECS. 622-623)
These sections are essentially the same as sections 523 and 524 of
the Mutual Security Act of 1954.
The first deals with the prerogatives and responsibilities of the
Secretary of State and ambassadors. The second deals with the
Secretary of Defense.
These sections make clear that, under the President, the Secretary
of State has responsibility for the continuous supervision and general
direction of the assistance programs and that ambassadors abroad
are responsible for coordination of aid activities in the countries to
which they are assigned. The Secretary of State is also clearly given
the responsibility for determining whether there shall be a military
assistance program for a country and the value thereof.
The Secretary of Defense in section 623 is given primary responsi-
bility for the content of military assistance programs (once the size
of those programs has been determined by the Secretary of State) and
for the administration of those programs, including the establishment
of priorities in procurement and delivery.
C. STATUTORY OFFICERS (SEC. 624)
This section provides for the top administrators and policymaking
officials of the new agency. There will be 12 of them to be appointed
by and with the advice and consent of the Senate. One will have the
rank of Under Secretary, two the rank of Deputy Under Secretary,
and nine the rank of Assistant -Secretary. Their salaries will be not
in excess of those authorized for other officials of the same rank, but,
within this limitation, may be fixed by the President. The President
is also authorized to designate their titles and to fix the order of
succession of those below the rank of Under Secretary in the event
of absence, death, resignation, or disability.
One of the officials with the rank of Deputy Under Secretary is to
have general supervision over the Development Loan Fund, and one
of -those with the rank of Assistant Secretary is to be head of the
Office of the Development Loan Fund:
To. facilitate an orderly transfer, this section also provides that
officials may serve in any of these new position.s without- further
Senate confirmation if they are currently serving in comparable
positions which are subject to Senate confirmation but which are
abolished by the bill. The committee intends this provision to mean
that officials presently in office may be transferred laterally but may
not be promoted to a rank higher than that now held relative to other
positions, without reconfirmation by the Senate. Further these
officials may continue to hold their present offices for a period of not
to exceed 60 days following the effective date of this bill. This
provision is similar to that in section 621(b) (see above) for con-
tinning the existing agencies for 60 days pending creation of the
new agency.
. There are now eight officials in the nonmilitary aid program
subject to Senate confirmation, but of somewhat lesser rank and salary
than is provided by section 624. The major criticisms of the aid
program have resulted not so much from the policy of furnishing aid
as from mistaken judgments and administrative ineptness in carrying
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out the policy. On the other hand, there have been complaints from
within the executive branch about the difficulty of securing competent
personnel. The committee expects the additional authority provided
in section 624 to be used to improve the administrative capacity of the
new agency.
D. EMPLOYMENT OF PERSONNEL (SEC. 626)
This section, which is in general similar to provisions of existing law,
provides basic authority for the employment of personnel to carry
out the act. With exceptions to be noted below, personnel employed
in the [Anted States will come under the generally applicable civil
service laws; for employees outside the 'United States, the provisions
of the Foreign Service Act may be used.
Subsection (a) contains. general authority for the employment of
such personnel as the President deems necessary.
Subsection (b) authorizes supergrade positions in the new agency
to administer economic assistance and in the Department of State
as the agency coordinating economic and military assistance. It
provides that not more than 85 persons may be appointed, com-
pensated, or removed without regard to the provisions of any law.
Of these 85, up to 60 may be paid more than the salary provided for
grade 15 by the Classification Act of 1949 ($15,030 a year); and of
these 60, up to 10 may be paid as much as $19,000 a year. A proviso
gives reinstatement rights to persons appointed to these excepted
positions from regular civil service or Foreign Service jobs.
Subsection (c) authorizes supergrade positions for the military
assistance program in the United States. Twelve persons in this
program may be compensated at rates higher than those provided for
grade 15 and of these, 3 may be paid up to $19,000 a year.
Taken together, subsections (b) and (c) provide for 72 persons who
may be compensated at rates higher than that for grade 15, of whom
13 may be paid up to $19,000. The comparable figures in the present
law are 45 and 15, respectively. It is to be noted in this connection,
however, that section 624 of the bill (see above) authorizes 12 statutory
officers at salaries of from $20,000 to $22,500 a year. Under existing
law, there are 14 statutory officers, not, all of whom are subject to
Senate confirmation, at somewhat lower salaries.
It is also to be noted that the biJi in subsection (b) provides for 85
persons to be "appointed, compensated, or removed without regard
to the provisions of any law." The existing law (sec. 527(b) of the
Mutual Security Act) provides for -70 persons to be "compensated
without regard to the provisions of the Classification Act of 1949, as
amended." This broader authority to waive any law, and to appoint
or remove as well as to compensate, applies only to the economic
assistance program and to coordination of economic and military
assistance. It does not apply to the 12 supergrades provided for the
military assistance program in subsection (c).
Subsection (d) of section 625 deals with personnel outside the
United States. Paragraph (1) provides that persons so employed,
including employees of Government agencies assigned to the programabroad, are to be paid at, rates provided by the Foreign Service Act
for the Foreign Service Reserve and Staff (not Foreign Service officers)
and are to receive allowances and benefits under the terms of the
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39
Foreign Service Act. Persons assigned from other Government
agencies under these provisions are given reinstatement rights, except
as may be specified otherwise by the President in cases when their
assignments are for longer than 30 months. Personnel employed to
serve abroad under this paragraph also come under the provisions of
section 1005 of the Foreign Service Act, which prohibits political tests
and discrimination on account of race, creed, or color. Policymaking
officials are specifically exempt from the prohibition on political tests,
however. These provisions are comparable to existing law.
Paragraph (2) of subsection (d) authorizes the use of the provisions
of the Foreign Service Act generally to carry out the program abroad.
An exception is made to authorize initial assignments in the United
States for as long as 4 years of persons employed under this paragraph
pursuant to the provisions of the Foreign Service Act.
Subsection (e) provides a selection-out process for personnel em-
ployed abroad analogous to the selection-out process now provided
for Foreign Service officers. The subsection authorizes the President
to prescribe performance standards for such personnel. Regardless
of other laws, but subject to an appropriate administrative appeal,
the President may separate employees who fail to meet those stand-
ards. Provision is made for severance benefits at the rate of 1 month's
salary for each year of service up to a maximum of a year's salary.
The appellate procedure should provide a mechanism for appeal to
an authority not involved in the original decision, but provision should
be made to assure quick disposition of the appeal. The committee
welcomes the initiative of the administration in proposing this provi-
sion, which should result in improved performance and better
administration.
Subsection (f) is designed to meet a technical difficulty raised by
the Comptroller General who has ruled that funds for services of
Government employees cannot be obligated except on a month-to-
month basis. In the present state of the law and the Comptroller
General's rulings, a project agreement with a foreign country can
obligate funds for materials for the life of the project, but it can obli-
gate funds for the services of Government employees only for a month
at a time. The language of subsection (f) will make it possible to
obligate funds for the total cost of the project and will greatly sim-
plify administration.
Subsection (g) applies to personnel in the aid program the prin-
ciples regarding foreign language competence set forth in section 578
of the Foreign Service Act. This section provides for designation of
every position abroad whose incumbent should have a useful knowl-
edge of the country's common language. The Secretary of State is
directed to establish appropriate standards Of language competence
for aid personnel, which should be both adequate and realistic. The
committee is tired of hearing of aid program personnel who may be
technically qualified but who are unwilling to make the effort neces-
sary to be able to communicate with the people they are supposed to
be trying to help.
Subsection (h) reenacts the effect of section 527(e) of the Mutual
Security Act of 1954 which provides that U.S. officers and employees
performing aid functions may not accept any compensation or other
benefit from any foreign country.
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40 FOREIGN ASSISTANCE ACT OF 1901
B. EXPERTS, CONSULTANTS, AND RETIRED OFFICERS (SEC. 626)
"This section, which is generally similar to existing law (secs. 530
-and 532 of the Mutual Security Act), provides for the use of experts,
consultants, and retired officers in the foreign aid program.
Subsection (a) authorizes the employment of experts, consultants,
and organizations of experts and consultants. Individuals so em-
ployed may be paid up to $75 a day plus travel expenses as author-
izea by the etandardized Government travel regulations. Employ-
ment under this subsection may be renewed annually, but this author-
ity is limited to 10 persons as experts and consultants, to contracts
with 10 retired military officers with specialized research and develop-
ment experience, and to contracts with 5 retired military officers with
specialized experience of a broad politicomilitary nature. There is no
limit on the number of organizations of experts and consultants with
which contracts may be renewed.
Subsection (b) exempts individuals serving as experts or consultants
from the conflict-of-interest laws. except to the extent that those laws
prohibit an individual from receiving compensation in connection
with any particular matter in which he was directly involved in
Government service. It is further provided that service as ar expert
or consultant is not to be considered as employment for the purposes
of laws limiting the reemployment of retired officers or employees,
or governing the simultaneous receipt of compensation and retired
pay or annuities.
Subsection (c) authorizes the employment of retired officers, but
does not waive other provisions of law concerning, the simultaneous
receipt of salsries and retirement pay.
Subsection (d) authorizes the employment of persons of outstand-
ing experience and ability without compensation in accordance with
die applicable provisions of the Defense Production Act of 1950.
The committee does not intend the authority of this section to
be used as a device for providing continuing employment of an
individual. Tim executive branch is expected to report to thecom-
mittee periodically on experts and consultants employed, including in
the report an estimate or the duration of their employment and a
statement of their qualifications, together with evidence of their
corn potence.
F. DETAIL OF PERSONNEL TO FOREIGN GOVERNMENTS AND
INTERNATIONAL ORGANIZATIONS (SECS. 627-630)
These four sections continue authority now found in seetioss 528
and 529 of the Mutual Security Act.
Section 627 authorizes the assignment of U.S. Government, em-
ployees to positions in foreign governments where this does not
involve their taking an oath of allegiance to another government or
accepting compensation or other benefits from it.
Section 625 provides similar authority for the assignment of U.S.
Government, employees to international organizations.
These sections make it possible to place technical advisers in
foreign governments receiving assistance under the program as well
as in such international organizations as SEATO and the OECD.
Section 629 -provides that persons so assigned to foreign govern-
ments or to international organizations are. to continue to be consid-
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FOREIGN ASSISTANCE ACT OF 1 9 6 L 41
ered as U.S. Government -employees and are to be paid by their
parent U.S. Government agency. They are likewise authorized to
receive allowances_ and benefits from their parent agency, and, under.
Presidential regulations, representation allowances similar to those
allowed under the Foreign Service Act. In the past, representation
allowances have been available only for employees assigned to inter-
national organizations. Under section 629(b), they would be avail-
able also for employees assigned to foreign governments. This sub-.
section likewise continues authority to provide representation allow-,
ances to personnel assigned to U.S. missions or staffs abroad under
section 631 of the bill (see below).
Section 630 spells out the terms under which personnel may be
detailed or assigned to foreign governments or international organiza-
tions. This may be done:
(1) Without reimbursement.
(2) With reimbursement in whole or in part, in dollars or foreign
currencies. Funds received as reimbursements are to be credited to
the appropriation from which the salary or expenses of the detailed
employee are paid.
(3) Upon agreement by the foreign government or international
organization to niake available funds, property, or services for specified
uses in the foreign aid program.
(4) Upon receipt by the 'United States of a credit to be applied
against its share or the expenses of an international organization.
G. MISSIONS AND STAFFS ABROAD (SEC. 631)
This section provides authority, similar to that now found in section
526 of the Mutual Security Act, for the maintenance of special missions,
and staffs abroad an.d..for the appointment and compensation of the
chiefs and deputy chiefs of those missions and staffs.
This authority has been used in the past to establish U.S. operations
missions (USOM's) concerned with carrying out nonmilitary assist-
ance. The chief and his deputy, as is now the case, are to be appointed?
by the President and may be removed ,by the President in his dis-
cretion. The chief of a mission may be paid, as the President may
determine, at any of the rates provided for the Foreign Service Re-
serve arid Staff (maximum of $19,650 a year) or at the rates provided:
under the Foreign Service Act for chiefs of mission, class 3 or 4 (maxi-
mum, $22,500 a year). The chief of a mission is also. authorized to:
receive the allowances provided for Foreign Service officers receiving:
comparable salaries. The same provisions are in existing law.
H. ALLOCATION AND REIMBURSEMENT AMONG AGENCIES (SEC. 632)
This section contains provisions analogous to those in the existing
law (secs. 505 and 522 of the Mutual Security Act) regarding what
are essentially bookkeeping transactions among Government agencies.
Subsection (a) authorizes the President to allocate or transfer to
any agency any part of the funds available under the bill. This
complements the authority given the President in section 621(a) (see
above) to exercise any of his functions under the bill through any
Government agency.
Subsection (b) provides that the services or facilities of any Govern-
ment agency may be Used in carrying out the program at the direction
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42 FOREIGN ASSISTANCE Acr OF 1061
of the President or with the consent, of the head of the agency con-
cerned. Under the same conditions, any Government agency may
supply commodities or defense articles for use in the program. Funds
allocated to any agency for these purposes are to be kept in separate
accounts.
Subsection (c) deals with goods or services procured from Govern-
ment agencies in connection with economic assistance. Reimburse-
ment, when required, is to be made from economic assistance funds
and may be either at replacement cost, at actual cost if required by
law, or at any other legal price agreed to by the owning or disposing
agency. The amount of the reimbursement is to be credited to the
current applicable appropriation from which replacements of similar
goods or services niay be procured. however, if the owning agency
determines that replace.ment is not necessary, the reimbursement is
to be deposited into the Treasury as miscellaneous receipts.
Subsection (d) deals with goods and services procured from Govern-
ment agencies in connection with military assistance. Reimburse-
ment, in this case, is to be in an amount equal to the value of the
.assistance furnished (other than the salaries of members of the Armed
Forces) plus expenses incidental to furnishing it. The reimbursement
is to be credited to the current applicable appropriation of the furnish-
ing agency. This section is designed mainly to cover transactions
,within the Department of Defense. IL does not apply to sales under
section 507 or to actions pursuant to the President's special authority
under section 510. (See above.)
Subsection (e) authorizes the actions necessary to furnish assistance
through normal commercial channels. It provides that, subject to
terms and conditions approved by the Secretary of the Treasury,
bank accounts putt' be established against which letters of commitment
may be issued and from which withdrawals may be made by recipient.
countries upon the presentation of appropriate documentation. Funds
thus expended are to be accounted for on standard documentation
required for Governmeot expenditures, but the Comptroller General
is authorized to approve other regulations for accounting for funds
spent in offshore procurement.
Subsection (1) provides that loans made by the Export-Import Bank
with foreign aid program funds are not to be counted in determining
the total of the Bank's loans and guaranties for purposes of the limi-
tation imposed on those loans and guaranties by the Export-Import
Bank Act. This is an appropriate exemption, inasmuch as the Bank
does not use its own resources in making these loans but rather acts
simply as an agent, for the foreign aid program.
Subsection (g) provides that initially any economic assistance
appropriation may by charged with the expenses of any economic
assistance program, but that at the end of the fiscal veer a rectification
of accounts is to be made with the expenses finally charged to the
proper appropriation unless the complexities of segregating expenses
and identifying the proper appropriation are too great. This will
make it possible, for example, for the initial costs of a particular
activity to be charged to either development grants or supporting
assistance, with the proper distribution of charges against both
appropriations to be made at the end of the fiscal year. This final
distribution need not be exact, however. For example, a single appro-
priation may be charged with the salary and expenses of a technician
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FOREIGN ASSISTANCE ACT OF 1961 43
who spends part of his time working on a technical assistance project
funded from development grants and part of his time working on
other projects funded from supporting assistance.
L WAIVERS OF CERTAIN LAWS (SEC. 633)
This section provides authority (now found in secs. 107 and 533 of
the Mutual Security Act) to waive certain laws in carrying out the
foreign assistance program.
Subsection (a) authorizes the President, whenever he determines
it to be in furtherance of the purposes of the bill, to waive such laws
as he may specify (other than the Renegotiation Act) relating to
Government contracts and expenditures.
Subsection (b) authorizes a waiver of such provisions as the Presi-
dent may specify of the Neutrality Act.
Subsection (c) authorizes the assignment of Defense Department
personnel to any civil office to carry out the bill, notwithstanding
statutory provisions to the contrary.
All of the laws which may be waived under this section were passed
to meet situations which are not applicable to the foreign assistance
program. It was found necessary to waive these laws early in the
history of the program, and an attempt to apply these laws to the
program would greatly increase the difficulties and complexities of
carrying out the program successfully.
J. REPORTS AND INFORMATION (SEC.WM)
This section brings together in one place, with minor changes, pro-
visions now found in many sections of the Mutual Security Act and
related appropriation acts.
Subsection (a) requires annual reports to Congress as long as funds
under the bill remain available for obligation.
Subsection (b) requires that there be made public in these reports,
as well as in response to requests from Members of Congress or in-
quiries from the public, all information concerning operations under
the bill not considered by the President to be "incompatible with the
public interest." The corresponding phrase in the present law (sec.
550 of the Mutual Security Act) is "incompatible with the security
of the United States."
Subsection (c) provides that information relating to economic assist-
ance must be furnished to the General Accounting Office and to con-
gressional committees within 35 days after requested. Otherwise,
unless the President certifies that he has forbidden the furnishing of
the information, and tells why, funds cannot be used in the country,
or with respect to the project or activity, in connection with which
the information was requested.
Subsection (d) provides for special annual reports to the Speaker
of the House and the Appropriations and Foreign Relations Com-
mittees of the Senate. These are to include all actions, with a justifi-
cation therefor, which resulted in substantial changes in the nature,
extent, or recipients of assistance as compared with the program pre-
sented to Congress. There are specifically to be included actions
resulting in obligations or reservations greater by 50 percent than the
obligations or reservations proposed for an activity in the congres-
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44 FOREIGN ASSISTANCE ACT OF 1961
sional presentation. This section also requires prompt notification of
the same committees of any determinations waiving the 50-50 ship-
ping provision with regard to the Indus Basin development, trans-
ferring funds between accounts, waiving the requirements of the act
under the President's special authority in section 014(a), or using
supporting assistance funds to meet U.S. objectives or responsibilities
in Germany including West. Berlin.
It may be noted that the present law requires au or these reports
under this subsection to lw made promptly, whereas under the bill tl c
reports on program changes need be made only annually. The bill
likewise drops the requirement of tile present law (see. 513 of the
Nfutnal Security Act) that the Senate Armed Services Committee
be notified when program changes involve military assistance.
K. GENERAL AUTHORITIES (BEC. 630
This section provides a series of authorities necessary to carry out
the foreign an! program. Nlost of these authorities are aheady in
the law in one place or another.
Subsection (ii) provides that except as otherwise specified, assist-
aiwe may be furnished on any terms thought to be best suited to
accomplishing the purposes of the program. This naturally includes
grants or any sort of credit. It also includes payment in foreign cur-
rencies or in kind. The broad authority of this subsection does not,
extend to development loans which are specifically required to bc
repayable in dollars (sets sec. 201 above). This authority is n?.essary
with respect to development grants, supporting assistance, and mili-
tary assistance in order to provide maximum flexibility in working
out 'ATMS of repayment so RS tO avoid putting the whole program on
a grant basis. In this connection, if is to be noted that the bill speci-
fies that assistance is to emphasize loans rather than grants whenever
possible.
Subsection lb) authorizes the President, except as otherwise specifi-
cally provided, to deal. Nvith any individual or entity in carrying out
the program.
The committee understands that the new aid agency plans to make
the fullest practicable use of the services of expert. technical personnel
of existing international organizations such as the IBRD and the IMP.
Such personnel can lw of considerahle assistance in investigating
and developirur the details of self-help measures such as the fiscal and
monetary reforms. auxiliary tax laws, and so forth, which ought to
be undertaken by recipient countries as an essential condition of our
long-term assistance.
The commit tee believes that the greatest practicable use should be
made under this section of the services. and facilities of voluntary
agencies.
Subsection (c) authorizes the President to accept and use donations
in connection with the program,
Subsection (di authorizes payment of the cost of health and accident
insurance for foreign participants in technical assistance activities
while such participants are absent front their homes: This authority
is DOW found in section 5:17(b) of the Mutual Security Act: Tho in-
surance provided costs an averaep of $35 per year per participant, or
a total in fiscal 1961 of $240,000.
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Subsection (e) provides for the admission to the United States of
foreign participants as nonimmigrants under the Immigration and
Nationality Act under conditions to be prescribed by the Secretary
of State and the Attorney General. Similar authority now exists with
respect to persons brought to the United States under the Smiths
Mundt Act, but not with respect to persons brought here under the
foreign aid program..
Subsection (f) provides authorities generally similar to those now
vested in the DLF in connection with making loans. The President
may issue letters of credit and letters of -commitment, collect or com-
promise obligations, acquire and dispose of property (except equity
security), and?subject to the laws applying to Government corpora-
tions?determine the manner in which loan expenditures shall be paid.
Paragraph (5) of subsection (f) provides that lending operations are
to be accounted for in accordance with the Government Corporation
Control Act and are to be audited by the General Accounting Office.
Subsection (g) provides that contracts involving funds for develop-
ment grants, development research, or military assistance may extend
for 5 years, subject to future congressional action. This is an enlarge-
ment of the present law, which provides that technical assistance con-
tracts may extend for 3 years (sec. 307(a), Mutual Security Act).
Subsection (h) provides for the settlement or arbitration of claims
arising from the investment guaranty program, on such terms and
conditions as the President may direct. This authority may be par-
ticularly useful in the event that claims based upon disputed facts
arise under the broadened investment guaranties provided by this bill.
Subsection (i) exempts operations under the bill from the Johnson
Act (18 U.S.C. 955), which prohibits American citizens from making
loans to countries in default of their obligations to the U.S. Govern-
ment. Without this exemption, private business would be prohibited
from participating in the program in some countries, despite the em-
phasis which the bill puts on private participation. (See sec. 601
above.)
L. PROVISIONS ON USES OF FUNDS (SEC. 636)
This section specifies at length and in detail some of the uses to
which foreign aid and related funds may be put. Most of these are,
now in existing law, and most of them are necessary either because of
Comptroller General rulings or because of the specific requirements of
other laws.
Subsection (a) deals with economic assistance and other specified
funds. - Paragraph (1.) authorizes the rent of buildings and, of space
in buildings in the United States and the repair, alteration, and im-
provement of leased properties. The present law (sec. 537(a)(1) of
the Mutual Security Act) is limited to authorizing payment of rents
in the District of Columbia. The broader authority here provided
would make possible the acquisition of warehouse space on the east
and 'west coasts in connection with the proposed program. for the
advance acquisition of excess property. (See sec. 608 above.) .
Paragraph (2) authorizes the payment of expenses of attendance at
meetings concerned with the foreign aid. program. It iS Identical to
section 537(a) (2) of the Mutual-Security Act. .
:Paragraph (3) authorizes contracting with individuals for personal
services ,abroad, but provides that such individuals arc not to be
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FOREIGN ASSISTANCE ACT OF 1961
considered U.S. Government employees for the purposes of the civil
service or other laws. This is similar to, but more narrowly defined
than, section 537(a)(3) of the Mutual Security Act.
Paragraph (4) authorizes the purchase, maintenance, operation,
and hire of aircraft, but provides that aircraft for administrative
purposes may be purchased only as specifically provided by law.
This is identical to section 537(a)(4) of the Mutual Security Act.
Paragraph (5) authorizes the purchase and hire of passenger motor
vehicles, but with several limitations. Except as now be otherwise
provided by. law, passenger ears for administrative purposes outside
the United States may be purchased for replacement only. The cost
of a ear for a mission chief abroad cannot exceed $3,500, arid passenger
cars for use in the United States may be purchased only as specifically
provided by law. Special provision is made for a car for the head of
the new aid agency. This paragraph is similar to section 537(a)(5) of
the Mutual Security Act.
Paragraph (6) authorizes entertainment expenses of $25,000 a. year
worldwide. The present law (sec. 537(a)(6) of the Mutual Security
Act) limits the authorization to $15,000 for entertainment in the
United States. This is in addition to representation allowances
which may be provided under sections 625(d)(2), 629(b), and 631(b).
(See above.)
Paragraph (7) authorizes exchange of funds and loss by exchange.
It is identical to section 537(a)(7) of the Mutual Security Act.
Paragraph (8) authorizes confidential expenditures of $50,000 a year
and is identical to section 537(a)(8) of the Mutual Security Act.
Paragraph (9) authorizes insurance of official motor vehicles and
aircraft abroad. Existing law (sec. 537(a)(9) of the Mutual Security
Act) limits this authority to motor vehicles.
Paragraph (10) authorizes the rent or lease abroad for up to 10
years of offices, buildings, grounds, and living quarters. It also
authorizes expenses for furnishing, maintaining, and improving such
facilities, including those which are made available to the United
States on a basis other than rent or purchase. Lease payments may
be made in advance. The existing law (sec. 537(a)(10) of the Mutual
Security Act) does not contain this authority for advance payments
or the 10-year limitation on leases; neither does it contemplate the
use of buildings other than those owned or rented, for example, those
which may be made available by the country receiving aid.
Paragraph (11) authorizes expenses incident to the death of persons
and dependents who die away from home while participating in the
economic assistance program. This authority includes the costs of
caring for and disposing of the remains of such persons, including pre-
paring and transporting the remains to the persons' former homes.
In the case of foreign participants, transport to a place of burial other
than the former home is also authorized. This latter provisionis the
only new authority compared to what is now provided by section
537 (a)(11) of the Mutual Security Act.
Paragraph (12) authorizes purchase of uniforms and is identical to
section 537(a) (12) of the Mutual Security Act.
Paragraph (13) authorizes payment of per diem hying allowances to
foreign participants away from their homes in countries other than the
United States at rates not exceeding those provided by the.standard-
ized Government travel regulations. It is identical to section 537(a)
(13) of the Mutual Security Act.
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FOREIGN ASSISTANCE ACT OF 19611 47
? Paragraph (14) authorizes use of economic assistance and certain
other specified funds in accordance with authorities of the Foreign
Service Act, not otherwise provided for. This is a catchall provision,
similar to section 537 (a) (14) of the Mutual Security Act.
Paragraph (15) authorizes purchase of ice and drinking water for
use outside the United States and is similar to section 537 (a) (15) of
the Mutual Security Act.
Paragraph (16) authorizes payment for the services of commissioned
officers of the Coast and Geodetic Survey. It also authorizes the
Survey to appoint up to 20 officers in addition to those otherwise
authorized. Similar authority is provided by section 537 (a) (16) of
the Mutual Security Act which also authorizes an additional 20
officers of the Public Health Service. This latter authority is not
carried forward, because the Department of Health, Education, and
Welfare is now considered to have adequate authority to provide these
public health officers.
Paragraph (17) authorizes payment of foreign travel expenses,
including the costs of transporting personal effects and household
goods, and the expenses of transporting and/or storing automobiles.
The paragraph is designed especially to meet situations when the travel
or transportation begins in one fiscal year and is completed in another.
It is generally similar to existing law (sec. 537(a) (17) of the Mutual
Security Act). The committee expects this authority to be used to
provide transportation at reasonable rates.
Subsection (b) authorizes both economic and military assistance
funds to be used for personal compensation, allowances, and travel;
and for printing and binding without regard to any other law. This
means primarily the law requiring all printing to be done by the
Government Printing Office, a procedure which is not always prac-
ticable. Tho subsection also provides that such laws as may be neces-
sary may be waived in connection with expenditures abroad for
supplies, services, and other administrative and operating expenses,
other than compensation of personnel. This subsection is sub-
stantially identical to section 411(d) of the Mutual Security Act.
Subsection (c) authorizes up to $4 million a year to be used for the
construction or other acquisition abroad of living quarters, office space,
supporting facilities, schools, dormitories, boarding facilities, and hos-
pitals for use by U.S. Government employees and their dependents.
These funds may also be used to equip, staff, operate, and maintain
schools and hospitals under this provision. All of this may be done
without regard to any other law. Section 537(c) of the Mutual
Security Act now provides authority to use up to $27,750,000 of
Korean assistance funds for comparable facilities in Korea, and up to
$4,250,000 of other funds for comparable facilities elsewhere, but the
only law which is waived is section 406(a) of Public Law 85-241 which
deals with military construction. The authority given here is to use
funds available under the bill (other than those for development loans).
This subsection does not authorize additional funds.
Subsection (d) makes available up to $1.5 million of the funds
available under the bill (other than for development loans) for use in
any fiscal year to provide assistance to schools abroad in lieu of
acquiring or building schools under the authority of subsection (c).
This authority, which has no counterpart in existing legislation, is
especially needed in Africa.
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Subsection (e) provides authority for paying the costs of training
American citizens engaged in the foreign aid program at State, local,
or private institutions. This subsection is substantially identical to
section 537(e) of the Mutual Security Act. It includes authority,
which the committee hopes will be used, to provide training in the
techniques of organizing and operating credit- unions, cooperatives,
and similar institutions.
Subsection (f) authorizes the use of development grant funds for
nonadministrative expenses in connection with development, loans,
disposal of surplus agricultural conunodities under Public Law 480,
and functions under the act to provide for assistance in the develop-
ment of Latin America and in the reconstruction of Chile. This
authority is designed to pay for technical experts and other expenses
not included in the administrative budget to assist in the effective
utilization of assistance.
Subsection (g) deals with the uses of funds made available for
military assistance.
Para7raph (I) authorizes the use of these funds for administrative,
extraordinary, and Operating expenses. Section 103(b) of the
Security Act now provides authority to use military assistance hinds
for alfitiinistrative and operating, expenses. rilie addition of the word
"extraordinary" is designed to allow the military assistance program
to provide limited spending money for foreign military trainees who
Collie to 'HIV United States so that those il'ailleCS May acquire a greater
exposure to American culture. There are more than 20.000 of these
trainees and other military visitors a year. The committee has
inserted a limitation of $300,000 and expects a report after 6 months
OIL how the finals have been used.
Parrw.rapli (2) authorizes the reimbursement of actual expenses of
military officers lissirned fla tour directors ill connection with ori-mita-
tion visits of foreign military personnel.. This provision has no-
counterpart in existing law, hut tine committee feels it is necessary in
order to provide a proper reception for foreign military personnel
without imposing an undue hardship on American officers.
-Paragraph (3) authorizes the maintenance, repair, alteration, and
furnishing of U.S.-owned facilities for the training of foreign military
personnel, without regard to other provisions of law. This is designed
to make it possible for the United States to provide facilities for an
Inter-American Defense College should such an institution materialize.
M. ADMINISTRATIVE EXPENSES (SEC. 637)
This section authorize-3 appropriations of $51 million for adminis-
trative expenses for the agency in charge of economic assistance. It
is proposed to add to that amount unohligated balances currently
estimated to be $1 million, thus providing $52 million for adminis-
trative expenses. This authorization is for the administrative ex-
penses of programs well in excess of $3 billion (including functions
under Public Law 480 and the special Latin American program), and
IS somewhat less than 2 percent of the value of the programs to be
dininistered.
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FOREIGN ASSISTANCE ACT OF 1961, 49
PART III
CHAPTER 3. MISCELLANEOUS PROVISIONS
A. EFFECTIVE DATE (SEC. 641)
The section provides that the bill shall be effective as of the date
of its enactment and may be cited as the "Foreign Assistance Act
of 1961." It also provides that the foreign assistance program shall
be identified appropriately overseas as American Aid.
B. STATUTES REPEALED (SEC. 642)
This section repeals earlier foreign aid legislation and reorganiza-
tion plans replaced by this bill.
Subsection (a) spells out what is repealed. This is:
(1) Reorganization Plan No. 7 of 1953, which provided for the
organization of the Foreign Operations Administration and from
which much of the authority for the international Cooperation
Administration is derived. This is replaced by the organizational
structure provided in sections 621 and 624 of the bill.
(2) The Mutual Security Act of 1954, as amended, which is the
basic foreign aid legislation. Certain sections of this act, however,
are specifically continued in force. These are:
Section 143, which provides conditions for assistance to Yugoslavia.
Section 402, which earmarked $175 million of foreign aid funds in
fiscal 1961 for financing the export and sale for foreign currencies or
the grant of surplus agricultural commodities. Although this provi-
sion, which applied only to fiscal 1961 is obsolete, the section also
contains authority for the subsequent use of the foreign currencies
received for surplus commodities, as well as a statement that such
commodities available for transfer abroad under any act may also
be made available to the maximum extent practicable to eligible
domestic recipients or to needy persons in the United States.
Section 405(a), which authorizes U.S. membership in the Inter-
governmental Committee for European Migration and appropriation
for the expenses incident thereto.
Section 405(c), which authorizes appropriations for fiscal 1961 for
contributions to the program of the U.N. High Commissioner for
Refugees.
Section 405(d), which authorizes appropriations for the fiscal year
1961 for the escapee program.
Section 408, which authorizes U.S. participation in NATO and ap-
propriations for expenses incident thereto.
Section 414, which provides permanent authority for the control of
exports and imports of arms, ammunition, and implements of war.
Section 417, which authorizes disposition of the unencumbered
balance of Irish pounds remaining from the Irish counterpart account
accumulated during the European recovery program.
Section 502(a), which provides authority for the use of foreign
currency accruing under the provisions of section 550 of the Mutual
Security Act of 1951, as amended, which provided for the sale of
surplus agricultural commodities for foreign currency.
Section 502(b), which authorizes the use of foreign currency ,by
congressional committees.
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50 FOREIGN ASSISTANCE Act' OF 1961
Section 514, which requires, upon request from the Secretary of
State, reservation of foreign currencies for international educational
exchange activities.
Section 523(d), which is amended. (See sec. 707 below.)
Section 533A, which provides for the Office of the Inspector General
and Comptroller and prescribes its functions. In leaving this section
in the law, the comnuttee intends that this Office, which has recently
fallen into disuse, should be reinvigorated without relieving either
the new aid agency or the Department of Defense of the obligation
of conducting their own investigations and evaluations.
Section 536, which authorizes U.S. participation in the Joint Com-
mission on Rural Reconstruction in China.
Section 552, which prohibits assistance to Cuba unless the President
determines it to be in the national and hemispheric interest of the
United States.
Oilier statutes repealed are:
(3) Section 12 of the Mutual Security Act of 1955 which declares
that the Communist regime should not be recognized to represent
China in the United Nations. This statement has subsequently been
reiterated.
(4) Sections 12, 13, and 14 of the Mutual -Security Act of 1956.
Section 12 authorizes peaceful atomic energy research reactor projects
which have subsequently been carried out, thereby rendering the
section obsolete. Section 13 recommended the transfer of up to $11
million of fiscal year 1957 mutual security funds to the Department of
State for international educational exchange activities, and is also
obsolete. Section 14 expressed the sense of Congress that in the
preparation of the mutual security program the President should take
affirmatively into account, the desirability of promoting the economic
development of underdeveloped countries. Phis provision also has
served its purpose.
(5) Section 503 of the Mutual Security Act of 1958, which ex-
pressed the sense of Congress that the President should seek to
strengthen cooperation in the Western hemisphere by encouraging
joint programs of technical and economic development. This pro-
vision has largely been met by the Act of Bogota and implementing
legislation.
(6) Section 108 of the Mutual Security Appropriation Act, 1959,
which authorizes not to exceed 50 percent of the foreign currencies
generated by sales of surplus agricultural commodities under section
402 to be used in accordance with the provisions of that section.
(7) Section 501(a), Chapter VI, and sections 702 and 703 of the
Mutual Security Act of 1959. Section 501(a) is a policy statement
to the effect that it, is the policy of the United States to accelerate its
efforts to encourage and support international health programs.
Chapter VI provided for a study, which has since been made, of the
feasibility of a Center for Cultural and Technical Interchange between
East and West. Section 702 authorized appropriations for expenses
incident to the annual meeting of the NATO Parliamentarians' Con-
ference in Washington in 1959. Section 703 authorized the use of
$10 million of Mutual Security funds in connection with the world
Refugee Year, which has since passed.
(8) Section 604 and chapter VIII of the Mutual Security Act of
1960. Section 604 directed a study of the functions of, and the degree
of coordination among, agencies engaged in foreign economic activities.
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FOREIGN ASSISTANCE ACT OF 19611 51
The study has been made, and its results are partially apparent in this
bill. Chapter VIII authorized a study of the feasibility of a hemi-
sphere center for cultural and technical interchange.
Subsections (b) and (c) of section 642 are in effect saving provisions.
They transfer to this bill the references in law to acts or provisions of
acts which are repealed, and they provide that the repeal of these acts
shall not affect amendments to other acts contained in such acts.
C. SAVING PROVISIONS (SEC. 643)
This section is designed to preserve continuity in the foreign aid
program during the period of transition from prior legislation to the
pending bill.
Subsection (a) provides that, except as otherwise specified in the
bill, all actions taken under legislation repealed by the bill will continue
in effect until modified by appropriate authority.
Subsection (b) provides that wherever provisions of the bill establish
conditions for the use of authority or funds, compliance with sub-
stantially similar conditions in repealed acts will suffice. This provi-
sion will make it unnecessary to renegotiate numerous executive agree-
ments relating to the foreign aid program.
Subsection (c) provides that funds made available pursuant to the
Mutual Security Act of 1954, as amended, shall continue available
unless otherwise provided by law.
Subsection (d) is a special provision relating to the Peace Corps.
This agency was created under authority of the Mutual Security Act,
which is repealed by this bill; and without a provision such as is con-
tained in subsection (d), the Peace Corps would automatically expire
with the enactment of this bill. Subsection (d) preserves the Peace
Corps in status quo until the enactment of permanent Peace Corps
legislation or the adjournment of this session of Congress, whichever
is earlier. Thus, if Congress adjourns without enacting Peace Corps
legislation, the corps is dead in any event.
D. DEFINITIONS (SEC. 644)
This section defines 13 terms used throughout the bill.
(a) "Agency of the United States Government" is to include "any
agency, department, board, wholly or partly owned corporation,
instrumentality, commission, or establishment' of the Government.
(b) "Armed Forces" means the Army, Navy, Air Force, Marine
Corps, and Coast Guard.
(c) "Commodity" means "any material, article, supply, goods, or
equipment used for the purposes of furnishing nonmilitary assistance."
(d) "Defense article" means?
(1) any weapon, weapons system, munition, aircraft,
vessel, boat, or other implement of war;
(2) any property, installation, commodity, material, equip-
ment, supply, or goods used for the purposes of furnishing
military assistance;
(3) any machinery, facility, tool, material, supply, or other
item necessary for the manufacture, production, processing,
repair, servicing, storage, construction, transportation, oper-
ation, or use of any article listed * * *; or
(4) any component or part of any article listed * * *.
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52 FOREIGN ASSISTANCE ACT OF 19 81
It is specifically provided that "defense article" shall not mean
merchant vessels or sourer material, byproduct material, special
nuclear material, or atomic weapons as defined by the Atomic Energy
Act.
(e) "Defense information" is to include "any document, writing,
sketch, photograph, plan, model, specification, design, prototype, or
other recorded or oral information relating to any defense article or
defense service." But it does not include restricted data and formerly
restricted data under the terms of the Atomic Energy Act.
(f) "Defense senservice''means "any service, test, inspection, repair,
training, training aid, publication, or technical or other assistance."
This includes limited quantities of defense articles for test, evaluation,
or standardization, as well as defense information.
(g) "Excess defense articles" means defense articles owned by the
United States in excess of the mobilization reserve.
(h) "Function" means "any duty, obligation, power, authority,
responsibility, right, privilege, discretion, or activity."
(i) "Mobilization reserve" means the defense articles determined
to be required, in accordance with Presidential regulations, to support
mobilization of the Armed Forces in the event of war or national
emergency.
(j) "Officer or employee" means members of the Armed Forces
and civilian personnel of the U.S. Government.
(k) "Services" means "any service, repair, training of personnel,
or technical or other assistance or information used for the purpose of
furnishing nonmilitary assistance."
(1) "Surplus agricultural commodity" is defined to mean?
any agricultural commodity or product thereof, class, kind,
type, or other specification thereof, produced in the United
States, either publicly or privately owned, which is in excess
of domestic requirements, adequate carryover, and antici-
pated exports for United States dollars, as determined by
the Secretary of Agriculture.
(in) "Value" is given two definitions, &pending on whether it
refers to excess or nonexcess defense articles. With respect to excess
defense articles, it means, "the gross cost incurred by .the United
States Government in repairing, rehabilitating, or modifying such
articles." With respect to nonexcess defense articles, it means "the
price obtaining for transfers of such articles between the Armed
Forces" or, where such transfers do not take place, "the groEs.cost
to the United States Government adjusted as appropriate for condition
and market value."
These definitions do not differ in substance from those in existing
law, though they have been clarified in some respects.
E. UNEXPENDED BAJ,ANCES (tiEC. 645)
This has become a standard section in foreign aid legislation author-
izing, the continued availability of unexpended balances. In this
ease it applies to funds made available under the Mutual Se,airity
Act of 195=1, which is repealed by this bill. These balances may be
consolidated with each other and with appropriations for the seine
general purposes under this bill.
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1'. CONSTRUCTION (SEC. 646)
This section is a standard separability provision to the effect that
the invalidity of any provision of the act or of its application to any
persons or circumstances shall not affect the remainder of the act or
the applicability of such provision to other persons or circumstances.
PART IV. AMENDMENTS TO OTHER LAWS
A. FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949
(SEC. 701)
This section amends section 203 of the Federal Property and Admin-
istrative Services Act of 1949, as amended, which deals with the
disposal of surplus property. A new subsection (p) would be added
to section 203 authorizing foreign currency to be accepted in the
disposal of surplus property. The purpose of this amendment is to
make it easier for private business in underdeveloped areas to acquire
surplus property in cases in which private businesses could pay for
the property in foreign currency but not in dollars. This is consistent
with the emphasis in the bill on encouraging the growth of .free enter-
prise in underdeveloped countries, although the amendment is not
limited to sales to private business.
B. MUTUAL DEFENSE ASSISTANCE CONTROL ACT OF 1951 (SEC. 702)
Section 702 of the bill amends the Mutual Defense Assistance
Control Act (the Battle Act) so as to authorize appropriation to the
Department of State of funds necessary for administering the act.
This amendment is effected by striking out the existing section 305
of the Battle Act and inserting appropriate authorizing language.
Section 305 of the Battle Act as it now reads repeals certain other
provisions of law, which have not been in effect for several years.
In order to preserve this repealing action, section 702(b) of the bill
provides that it shall continue in effect. This is a technical change
without substantive effect.
C. AGRICULTURAL TRADE DEVELOPMENT AND ASSISTANCE ACT OF 1954
(SEC. 703)
Section 104(e) of the Agricultural Trade Development and Assist-
ance Act of 1954 (Public Law 480) now makes available up to 25
percent of the foreign currencies received from sales of surplus agricul-
tural commodities under title I of that law for loans to private business
abroad. These loans, under the terms of the misting law, are made
by the Export-Import Bank. Under the amendment made by sec-
tion 703 of the bill, these loans will be made by "such agency as the
President shall direct"; so that it could be the Export-Import Bank
or some other agency. The agency contemplated to make these loans
is the new aid agency.
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54 FOREIGN ASSISTANCE ACT OF 1081
D. JOINT RESOLUTION TO PROMOTE PEACE AND STABILITY IN THE
MIDDLE EAST (SEC. 704)
This joint resolution, which was passed in 1957 to meet an emer-
gency situation in the Middle East, requires reports from the President
to Congress in the months of January and July of each year.
Although it is considered advisable to retain some of the authority
of this resolution, this authority is now infrequently exercised. The
amendment made section 704 will require the President to report
to Congress "whenever appropriate" instead of in January and July.
By "whenever appropriate," the committee means whenever he uses
the authority of the joint resolution or takes action under it,
E. INTERNATIONAL HEALTH RESEARCH ACT OF 1960 (SEC. 7051
This section amends the International Health Research Act of 1960
to authorize the President to delegate his authority under that act to
any officer or head of agency as he deems appropriate, as well as to
the Secretary of Health, Education, and Welfare. Experience has
demonstrated that in some instances it may be more appropriate for
functions under this act to be carried out by an agency (e.g., the new
aid agency) other than the Department of Health, Education, and
Welfare.
F. ACT TO PROVIDE FOR ASSISTANCE TN THE DEVELOPMENT OF LATIN
AMERICA (SEC. 706)
When Congress passed the Act for Latin American Development
and Chilean Reconstruction last year it inadvertently omitted basic
authority similar to that provided in part III of this bill. The amend-
ment made by section 700 corrects this legislative oversight by per-
mitting the use of such funds pursuant to such provisions of the
foreign aid bill as the President determines to be necessary.
G. IMPROPER CURRENCY TRANSACTIONS ABROAD (SEC. 707)
Last year the committee inserted, and the Congress approved,
section 523(d) of the Mutual Security Act providing that, whenever
the President determined that the achievement of United States
foreign policy objectives in a given country so required, he could direct
the. Ambassador there to issue regulations applicable to members of
the Armed Forces, to U.S. Government. officers and employees, and
to U.S. Government contractors and their employees, governing the
extent to which their pay and allowances received and to be used in
that country should be paid in local currency.
This provision was motivated by a glaring scandal involving Air
Force personnel in black-market currency operations in Turkey. Al-
though no further scandals have come to light., the conumttee is not
satisfied that the concern which it expressed a year ago has been taken
sufficiently to heart by the executive branch. No regulations have
been issued under the authority of section 523(d). The committee
has therefore narrowed the criteria to be observed. Instead of pro-
viding that these regulations may be issued--
whenever the President determines that the achievement of
U.S. foreign policy objectives in a given country requires
it?
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FOREIGN ASSISTANCE ACT OF 1961
the new language provides that they may be issued?
whenever the President determines that prevention of im-
proper currency transactions in a given country requires it.
The committee expects a report within a reasonable time on action
taken under this section.
6. CHANGES IN EXISTING LAW
In compliance with subsection 4 of rule XXIX of the Standing
Rules of the Senate, changes in existing law made by the bill, as
reported, are shown as follows (existing law proposed to be omitted
is enclosed in black brackets, new matter is printed in italic, existing
law in which no change is proposed is shown in roman):
REORGANIZATION PLAN NO. 7 OF 1953
(Prepared by the President and transmitted to the Senate and House of Repre-
sentatives in Congress assembled, June 1, 1953, pursuant to the provisions of
the Reorganization Act of 1949, approved June 20, 1949, as amended. Effective
August 1, 1953)
[FOREIGN OPERATIONS ADMINISTRATION
[SECTION 1. Establishment of Foreign Operations Administration.
(a) There is hereby established a new agency which shall be known as
the Foreign Operations Administration, hereinafter referred to as the
"Administration."
[(b) There shall be at the head of the Administration a Director of
the Foreign Operations Administration, hereinafter referred to as the
"Director." The Director shall be appointed by the President by and
with the advice and consent of the Senate and shall receive compensa-
tion at the rate of $22,500 a year. The Secretary of State shall advise
with the President concerning the appointment and tenure of the
Director.
[(c) There shall be in the Administration a Deputy Director of the
Foreign Operations Administration, who shall be appointed by the
President by and with the advice and consent of the Senate, and who
shall receive compensation at the rate of $15,000 a year. The Deputy
Director shall perform such functions as the Director shall from time
to time designate, and shall act as Director during the absence or
disability of the Director or in the event of a vacancy in the office of
Director.
[(d) There are hereby established in the Administration six new
offices with such title or titles as the Director shall from time to time
determine. Appointment thereto shall be by the President, by and
with the advice and consent of the Senate. The compensation for
each of two of the said offices shall be at the rate of $16,000 a year and
the compensation for each of the other four offices shall be at the rate
of $15,000 a year. The persons appointed to the said new offices shall
perform such functions as the Director shall from time to time desig-
nate, and are authorized to act as Director, as the Director may des-
ignate, during the absence or disability of the Director and the
Deputy Director or in the event of vacancies in the offices of Director
and. Deputy Director.
(SEC. 2. Transfer of functions to the Director. There are hereby
transferred to the Director:
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[(a) All functions vested by the Mutual Security Act of 1951, as
amended, or by any other statute in the Director for Mutual Security
provided for in section 501 of that Act, or in the Mutual Security
Agency created by that Act, or in any official or office of that Agency,
including the functions of the Director for Mutual Security as a
member of the National Security Council.
[(b) All functions vested by the Mutual Defense Assistance Control
Act of 1951 in the Administrator created by that Act.
[(c) The functions vested by section 6 of the Yugoslav Emergency
Relief Assistanee Act of 1950 in the Secretary of State.
(Sac. 3. Institute of Inter-American Affairs. The Institute of Inter-
American Affairs, together with its functions, is hereby transferred
to the Administration. All functions vested by the Institute of Inter-
American Affairs Act. in the Secretary of State are hereby transferred
to the Director. Functions with respect. to serving as employees of
the said Institute or as members of the hoard of directors th,reof,
including eligibility, as the case may be, to be detailed as such em-
ployees or to serve as such members, are hereby transferred from the
officials and employees of the Departinent of State to the officials and
employees of the Administration. The Institute shall be adminis-
tered subject to the direction and control of the Director.
[Sac. 4. National Advisory Council. The Director shall be a 111e111-
her of the National Advisory Council on International Monetary and
Financial Problems (22 U.S.C. 2S6b).
[Sec. 5. Performance of functions transferred to the Director. The
Director IllftV from time to time make such provisions as he shall deem
appropriate authorizing the performance by another officer or by any
employee or organizational entity, of the Administration, of any
function of the Director, except the function of being a member of the
National Security Council and the function of being a member of the
National Advisory Council on International Alonetary and Finsncial
Problems.
[Sac. 6. Transfer of functions to the President. All functions vested
in the Secretary of State by the Limited Nations Palestine Refugee
Aid Act of 1950 are hereby transferred to the President.
[Sec. 7. Incidental transfers. (a) Personnel, property, records, and
unexpended balances of appropriations, allocations, and in other funds,
employed, used, held, available, or to be made available in connection
with functions transferred or vested by this reorganization plan shall
be transferred, at such time or times as the Director of the Bureau of
the Budget. shall direct, as follows:
[(1) So much of those relating to functions transferred to or vested
in the Director or the Administration as the Director of the Bureau of
the Budget shall determine shall be transferred to the Admmistrstion.
[(2) Those of the Institute of inter-American Affairs shall be trans-
ferred along with the Institute.
[(3) So much of those relating to the functions transferred by sec-
tion 6 hereof as the Director of the Bureau of the Budget shall deter-
mine shall be transferred to the agency or agencies of the Government
to which the President delegates the said functions.
[(b) Such further measures and dispositions as the Director of tho
Bureau of the Budget shall deem to be necessary in order to effectuate
the transfers provided for in subsection (a) of this section shall be
carried out in such manner as he shall direct and by such agencies as
he shall designate.
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FOREIGN ASSISTANCE ACT OF 1961 57,
(SEC. 8. Abolitions. (a) There are hereby abolished:
[(1) The offices of Director for Mutual Security and Deputy
Director for Mutual Security, provided for in sections 501 and 504,
respectively, of the Mutual Security Act of 1951, as amended (includ-
ing the organization in the Executive Office of the President known
as the Office of the Director for Mutual Security).
[(2) The Mutual Security Agency.
[(3) The title of Administrator provided for in the Mutual Defense
Assistance Control Act.
[(4) The four positions provided for in section 406(e) of the Mutual
Defense Assistance Act of 1949, as amended.
[(5) The offices I of Administrator and Deputy Administrator for
Technical Cooperation, provided for in section 413(a) of the Act for
International Development, as amended, together with the functions
vested in the Administrator by the said section 413(a), as amended.
[(6) The offices of the Special Representative in Europe and
Deputy Special Representative in Europe, provided for in section
504(a) of the Mutual Security Act of 1951, as amended. The abolition
of the said offices of Representatives, and Deputy Representative shall
become effective on September 1, 1953 (unless a later date is required
by the provisions of section 6(a) of the Reorganization Act of 1949,
as amended).
[(b) The Director shall wind up any outstanding affairs of the
aforesaid abolished agencies and offices not otherwise provided for in
this reorganization plan.
[SEC. 9. Interim provisions. The President may authorize the
persons who, immediately prior to the effective date of this reorgani-
zation plan hold offices or occupy positions abolished by section 8
hereof to hold offices and occupy positions under section 1 hereof
until the latter offices and positions are filled pursuant to the provi-
sions of the said section 1 or by recess appointment, as the case may
be, but in no event for any period extending more than 60 days after
the said effective date, as follows:
[(a) The Director and Deputy Director for Mutual Security as the
Director and Deputy Director of the Foreign Operations Adminis-
tration, respectively.
[(b) The Administrator for Technical Cooperation and the person
occupying the senior position provided for in section 406(e) of the
Mutual Defense Assistance Act of 1949, as amended, to serve in the
two senior positions created by section 1(d) thereof.
[(c) The Deputy Administrator for Technical Cooperation and the
persons occupying the three positions provided for in section 406(e)
of the Mutual Defense Assistance Act of 1949, as amended, to serve in
the four positions created by section 1(d) hereof which have compen-
sation at the rate of $15,000 a year.]
MUTUAL SECURITY ACT OF 1954, AS AMENDED
AN . ACT To promote the security and foreign policy of the United States by
furnishing assistance to friendly nations, and for other purposes.
Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled, [That this Act may be cited
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as the "Mutual Security Act of 1954." This Act is divided into
chapters and titles, according to the following table of contents:
[TABLE OF CONTENTS
E[Chapter I?Alri.rrAsy AssisrAscz
Chapter II?ECONOMIC ASSISTANCE
Titie I?DEFENSE SUPPORT
TWO II?DEVELOPMENT LOAN FUND
TitIO III?TECHNICAL COOPERATION
(Title IV?SPECIAL ASSISTANCE AND OTHER PROGRAMS
E[Chapter III?CoN-rmoEscY FUND
Chapter IV?GENERAL AND ADMINISTRATIVE PROVISIONS
[SEC. 2. STATEMENT OF POLICY.--(a) It is the BUM of the Congress
i
that peace n the world increasingly depends on wider recognition both
in principle and practice, of the dignity and interdependence of men;
and that the survival of free institutions in the United States can best
be assured in a world wide atmosphere of expanded freedom.
[(b) Tlunugh programs of assistance authorized by this Act and
its predecessors, the United States has helped thwart Communists in-
timidation in many countries of the world, has helped Europe recover
from the wounds of World War H, has supported defensive military
preparations of nations alerted by Communist aggression, and has
soundly begun to help peoples of economically underdeveloped areas
to develop their resources and improve their living standards.
[(c) Programs authorized by this Act continue to serve the follow-
ing principal purposes:
[(1) The Congress recognizes the basic identity of interest
which exists between the people of the United States and the
peoples of other lands who are striving to establish and develop
politically independent and economically viable units, and to
produce more goods and services, and to improve ways of living
by methods which reflect the popular will, and to realize aspira-
tions for justice, for education, and for dignity and respect as in-
dividual human beings, and to establish responsible governments
which will cooperate with other like-minded governments. The
Congress declares it to be a primary objective and need of the
United States, and one consistent with its tradition and ideals to
share these strivings by providing assistance, with due regard for
our other obligations, to peoples willing to work energetically
toward these ends.
[(2) The Congress recognizes that the peace of the world and
the security of the United States are endangered so long as inter-
national communism and the nations it controls continue by
threat of military action, by the use of economic pressure, mid by
internal subversion, or other means to attempt to bring under
their domination peoples now free and independent and contmue
to deny the rights of freedom and self-government to peoples and
nations once free but now subject to such domination. The Con-
gress declares it to be the policy of the United States to continue
so long as such danger to the peace of the world and to the security
of the United States persists, to make available to other free
nations and peoples upon request assistance of such nature and
in such amounts as the United States deems advisable compatible
with its own stability, strength, and other obligations, and as
may be needed and effectively used by such free nations and
peoples to help them maintain their freedom.
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FOREIGN ASSISTANCE ACT OF 1961, 59
[(d) It is the sense of the Congress that inasmuch as?
[(1) the United States, through mutual security programs, has
made substantial contributions to the economic recovery and
rehabilitation of the nations of Western Europe; and
[(2) due in part to those programs, it has been possible for such
nations to achieve complete economic recovery and to regain their
military strength; and
[(3) certain other friendly nations of the world remain in need
of assistance in order that they may defend themselves against
aggression and contribute to the security of the free world;
those nations which have been assisted in their recovery should, in
the future, share with the United States to a greater extent the finan-
cial burden of providing aid to those countries which are still in need
of assistance of the type provided under this Act.
[(e) It is the sense of the Congress that assistance provided under
this Act shall be administered so as to assist other peoples in their
efforts to achieve self-government or independence under circum-
stances which will enable them to assume an equal station among the
free nations of the world and to fulfill their responsibilities for self-
government or independence. To this end, assistance shall be rendered
where appropriate and feasible in such a way as to promote the
emergence of political units which are economically viable, either alone
or in cooperation with neighboring units.
[(f) It is the sense of the Congress that inasmuch as?
[(1) the United States favors freedom of navigation in interna-
tional waterways and economic cooperation between nations;
and
[(2) the purposes of this Act are negated and the peace of the
world is endangered when nations which receive assistance under
this Act wage economic warfare against other nations assisted
under this Act, including such procedures as boycotts, blockades,
and the restriction of the use of international waterways;
assistance under this Act and the Agricultural Trade Development and
Assistance Act of 1954, as amended, shall be administered to give
effect to these principles, and, in all negotiations between the United
States and any foreign state arising as a result of funds appropriated
under this Act or arising under the Agricultural Trade Development
and Assistance Act of 1954, as amended, these principles shall be
applied, as the President may determine, and he shall report on
measures taken by the Administration to insure their application.
[CHAPTER I?MILITARY ASSISTANCE
[SEC. 101. PURPOSE OF CHAPTER.?The Congress of the United
States reaffirms the policy of the United States to achieve interna-
tional peace and security through the United Nations so that armed
force shall not be used except in the common defense. The Congress
hereby finds that the efforts of the United States and other nations
to promote peace and security require additional measures of support
based upon the principle of continuous and effective self-help and
mutual aid. It is the purpose of this chapter to authorize measures
in the common defense, including the furnishing of military assist-
ance to friendly nations and international organizations in order to
promote the foreign policy, security, and general welfare of the
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60 FOREIGN' ASSISTANCE ACT OF 1961
United States and to facilitate the effective participation of such
nations in arrangements for individual and collective self-defense. In
furnishing such military assistance, it remains the policy of the
United States to continue to exert maximum efforts to achieve uni-
versal control of weapons of mass destruction and universal regula-
tion and reduction of armaments, including armed forces, ender
adequate safeguards to protect complying nations against violation
ami evasion.
[The Congress reaffirms its previous expressions favoring the crea-
tion by the free peoples of the Far East and the Pacific of a joint
organization, consistent with the Charter of the United Nations, to
establish a program of self-help and mutual cooperation designed to
develop their economic and social well-being, to safeguard basic rights
and liberties and to protect their security and independence.
[The Congress hereby reiterates its opposition to the seating in the
United Nations or the Communist. China regime as the representative
of China. In the event of the seating of representatives of the Chinese
regime in the Security Council or General Assembly of the United
Nations, the President is requested to inform the Congress insofar as
is compatible with the requirements of national security, of the impli-
cations of this action upon the foreign policy of the United States
and our foreign relationships, including that created by membership
in the United Nations, together with any recommendations which he
niay have with respect to the matter.
ESEC. 102. GENERAL AUTH0RITY.?Mili1RrY assistance may be fur-
nished under this chapter on a grant or loan basis and upon such
other appropriate terms as may be agreed upon, by the procurement
from any source and the transfer to eligible nations and international
organizations of equipment, materials, and services or by the provi-
sion of any service, includins, the assignment or detail of members
of the Armed Forces and oilier personnel of the Department of De-
fense solely to assist in an advisory capacity or to perform other
duties of a non-combatant nature, including military training or
advice.
[SEc. 103. AUTHORIZATION.?(mi) There is hereby authorized to be
appropriated to the President for use beginning in the fiscal year
1960 to carry out the purposes of this chapter not to exceed $1,400,-
000,000, which shall remain available until expended. Programs of
military assistance subsequent to the fiscal year 1960 program shall
be budgeted so as to come into competition for financial support with
other activities and programs of the Department of Defense. There
is hereby authorized to be appropriated to time President for the fiscal
years 1961 and 1962 such sums as may be necessary from time to time
to carry out the purposes of this chapter, which sums shall remain
available until expended.
[(b) Funds made available pursuant to subsection (a) of this section
shall be available for the administrative and operating esxpenses of
carrying out the purpose of this chapter including expenses incident
to United States participation in international security organizations.
[(e) When appropriations made pursuant to subsection (a) of this
section are used to furnish military assistance on terms of repayment
within ten years or earlier such assistance may be furnished, notwith-
standing sections 105, 141, and 142, to nations eligible to purchase
military equipment, materials, and services under section 106. When
appropriations made pursuant to this section are used to furnish mili-
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tary assistance on terms of repayment within three years or earlier,
dollar repayments, including dollar proceeds derived from the sale
of foreign currency received hereunder to any United States Govern-
ment agency or program, may be credited to the current applicable
appropriation and shall be available until expended for the purposes
of military assistance on terms of repayment, and, notwithstanding
section 1415 of the Supplemental Appropriation Act, 1953, or any
other provision of law relating to the use of foreign currencies or
other receipts accruing to the United States, repayments in foreign
currency may be used for the purposes of this chapter: Provided, That
the authority in this sentence shall apply to repayments from not to
exceed $175,000,000 of the appropriations used for such assistance.
[(d) The value of programs of equipment and materials for Ameri-
can Republics, pursuant to any authority contained in this chapter
other than section 106, in any fiscal year beginning with the fiscal
year 1961, shall not exceed $55,000,000. For the purposes of this sub-
section' the value of nonexcess equipment and materials shall be as
defined in section 545(h) of this Act, and the value of excess equip-
ment and materials (as excess is defined in section 545(e) of this
Act) shall mean the acquisition cost to the Armed Forces of the
United States of such equipment and materials.
(SEC. 104. INFRASTRUCTURE.--(a) The President is authorized to
make contributions to infrastructure programs of the North Atlantic
Treaty Organization, in accordance with agreements made between
the member nations, out of funds made available pursuant to this
section, or section 103, or chapter IX of the Supplemental Appropri-
ation Act, 1953, of amounts totaling not more than $1,000,000,000,
less amounts already contributed for such purpose. Such contribu-
tions by the United States shall not exceed its proportionate share, as
heretofore agreed upon, of the expenses of such programs.
[(b) When the President determines that it is in the interest of the
security of the United States to participate in programs for the acqui-
sition or construction of facilities in foreign nations for collective
defense other than programs of the North Atlantic Treaty Organiza-
tion, he may use for such purpose funds made available under section
103 or local currencies made available under section 402 in amounts
totaling not more than $50,000,000.
[(c) Notwithstanding section 501 of this Act, no funds other than
those referred to in subsections (a) and (b) of this section rnay be
expended for the purposes of this section. No funds shall be expended
under this section for rental or purchase of land or for payment of
taxes.
(SEC: 105. CONDITIONS APPLICABLE TO MILITARY ASSISTANCE.?
(a) Military assistance may be furnished under this chapter to any
nation whose increased ability to defend itself the President shall have
determined to be important to the security of the United States and
which is otherwise eligible to receive such assistance. Equipment
and materials furnished under this chapter shall be made available
solely to maintain the internal security and legitimate self-defense of
the recipient nation, or to permit it to participate in the defense of its
area or in collective security arrangements and measures consistent
with the Charter of the United Nations. The President shall be satis-
fied that such equipment and materials will not be used to undertae
any act of aggression against any nation.
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62 FOREIGN ASSISTANCE ACT OF 1961
[(b) In addition to the authority and limitations contained in the
preceding subsection, the following provisions shall apply to particular
areas:
[(1) The Congress welcomes the recent progress in European
cooperation and reaffirms its belief in the necessity of further
efforts toward political federation, military integration, and eco-
nomic unification as a means of building strength, establishing
security, and preserving peace in the North Atlantic area. In
order to provide further encouragement to such efforts, the Con-
gress believes it essential that this Act should be so administered
as to support concrete measures to promote greater political fed-
eration, military integration, and economic unification in Europe,
including coordinated production and procurement programs
participated in by the members of the North Atlantic Treaty
Organization to the greatest extent possible with respect to
military equipment and materials to be utilized for the defense
of the North Atlantic area.
[(2) Military assistance furnished to any nation in the Near
East and Africa to permit it to participate in the defense of its
area shall be furnished only in accordance with plans and ar-
rangements which shall have been found by the President to
require the recipient nation to take an important part therein.
E(3) In furnishing military assistance in Asia, the President
shall give the fullest assistance, as far RS possible directly, to the
free peoples in that area, including the Associated States of Cam-
bodia, Laos, and Vietnam, in their creation of a joint organiza-
tion, consistent with the Charter of the United Nations, to estab-
lish a program of self-help and mutual cooperation designed to
develop their economic and social well-being, to safeguard basic
rights and liberties, and to protect their security and inde-
pendence.
[(4) Military equipment and materials may be furnished to
the other American Republics only in furtherance of missions
directly relating to the common defense of the Western Hemi-
sphere which are found by the President to be important to the
security of the United States. The President annually shall
review such findings and shall determine whether military as-
sistance is necessary. Internal security requirements shall not,
unless the President determines otherwise, be the basis for
military assistance programs to American Republics.
((5) To the extent feasible and consistent with the other pur-
poses of this chapter, administrators of the military assistance
program shall encourage the use of foreign military forces in
underdeveloped countries in the construction of public works and
other activities helpful to economic development..
[Sc. 100. SALE OF MILITARY EQUIPMENT, MATERIALS, ANDS.:.;ERV-
ICE&--(a) The President may, in order to carry out the. purpose of
this chapter, sell or enter into contracts (without requirement for
charge to any appropriation or contract authorization) for the pro-
curement for sale of equipment., materials, or services to any nation or
international organization: Provided, That prior to the transfer of
any such equipment, materials, or services to any nation which has
not signed an agreement under section 142 of this Act or joined with
the United States in a regional collective defense arrangement, the
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FOREIGN ASSISTANCE ACT OF 1961 63
President shall have received commitments satisfactory to him. that
such equipment, materials, or services are required for and will .be
used by such nation solely to maintain its internal security, its legiti-
mate self-defense, or to permit it to participate in the defense of the
area of which it is a part, or in collective security arrangements and
measures consistent with the Charter of the United Nations, and that
it will not undertake any act of aggression against any other state.
[(b) Whenever equipment or materials are sold from the stocks of
or services are rendered by any United States Government agency. to
any nation or international organization as provided in subsection
(a), such nation or international organization shall first make avail-
able the fair value, as determined by the President, of such equipment,
materials, or services before delivery or, when the President determines
it to be in the best interests of the United States, within sixty days
thereafter or, as determined by the President, within a reasonable pe-
riod not to exceed three years. The fair value for the purpose of
this subsection shall not be less than the value as defined in subsection
(h) of section 545: Provided, That with respect to excess equipment
or materials the fair value may not be determined to be less than (i)
the minimum value specified in that subsection plus the scrap value,
or (ii) the market value, if ascertainable, whichever is the greater.
Before a contract for new production is entered into, or rehabilitation
work is undertaken, such nation or international organization shall
(A) provide the United States with a dependable undertaking to pay
the full amount of such contract or the cost of such rehabilitation
which will assure the United States against any loss on the contract or
rehabilitation work, and (B) shall make funds available in such
amounts and at such times as may be necessary to meet the payments
required by the contract or the rehabilitation work in advance of the
time such payments are due, in addition to the estimated amount of
any damages and costs that may accrue from the cancellation of such
contract or rehabilitation work.
[(c) Sections 105, 141, and 142 shall not apply with respect to
assistance furnished under this section.
[SEC. 107. WAIVERS OF LAW.?(a) The President may perform any
of the functions authorized under this chapter without regard to (1)
the provisions of title 10, United States Code, section 7307(a), and
(2) such provisions as he may specify of the joint resolution of Novem-
ber 4, 1939 (54 Stat. 4), as amended.
[(b) Notwithstanding the provisions of title 10, United States
Code, sections 3544(b) and 8544(b), personnel of the Department of
Defense may be assigned or detailed to any civil office for the purpose
of enabling the President to furnish assistance under this Act.]
SEC. 108. TRANSFERS OF MILITARY EQUIPMENT TO JAPAN.?* * *
(Repealed-1957)
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64 FOREIGN ASSISTANCE ACT OF 1961
CHAPTER 2?SOUTHEAST ASIA AND THE WESTERN PACIFIC, AND
DIRECT FORCES SUPPORT.?* * * (Repealed-1957)
[CHAPTER II?ECONOMIC ASSISTANCE
[TITLE I?DEFENSE SUPPORT
[SEC. 131. GENERAL AIITHORITY.?(a) The President is hereby
authorized to furnish, to nations and organizations eligible to receive
military assistance under chapter I, or to nations which have joined
with the United States in a regional collective defense arrangement,
commodities, services, and financial and other assistance specifically
designed to sustain and increase military effort: Provided, That either
all documents, papers, communications, audits, reviews, findings, rec-
ommendations, reports and other material which relate to operations
or activities under this title are furnished to the General Accounting
Office and to any committee of the Congress, or any duly authorized
subcommittee thereof, charged with considering legislation, appropri-
ations, or expenditures under this title, upon request of the General
Accounting Office or such committee or subcommittee as the ease may
be, or the President certifies that he has forbidden the information to
be furnished pursuant to such request and gives his reasons for doing
so. In furnishing such assistance, the President may provide for the
procurement and transfer from any source of any commodity or serv-
ice (including processing, storing, transporting, marine insurance, and
repairing) or any technical information and assistance.
[(b) There is hereby authorized to be appropriated to the Presi-
dent for use beginning in the fiscal year 1961 to carry out the purposes
of this section not to exceed $675,000,000, which shall remain avail-
able until expended.
[(c) In providing assistance in the procurement of commodities in
the United States, United States dollars shall be made available for
marine insurance on such commodities where such insurance is placed
on a competitive basis in accordance with normal trade practice pre-
vailing prior to the outbreak of World War II: Provided, That in the
event a participating country, by statute, decree, rule, or regulation,
discriminates against any marine insurance company authorized to do
business in any State or the United States, then commodities purchased
with funds provided hereunder and destined for such country shall be
insured in the United States against marine risk with a company or
companies authorized to do a marine insurance business in any State
of the United States.
[(d) To the extent necessary to accomplish the purposes of this
section in Korea (1) assistance may be furnished under this section
without regard to the other provisions of this title or chapter I and
(2) the authority provided in section 307 may be exercised in lurnish-
ing assistance under subsection ta) of this section; and funds available
under this section may be used for payment of ocean freight charges
on shipments for relief and rehabilitation in Korea without regard to
section 409 of this Act.]
SEC. 132.
--OREAN PROGRAM.?* * * (Repealed-195
IC 7)
[SEC. 141. CONDITIONS OF ELIMEILITY FOR ASSISTANCE.--n3 RS-
sistance shall be furnished under this title or chapter I to any nation
or organization unless the President shall have found that furnishing
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FOREIGN ASSISTANCE ACT OF ti
such assistance will strengthen the security of the United States and
promote world peace. No defense support or military equipment and
materials shall be furnished to a nation unless it shall have agreed
to the provisions required by section 142, and such additional provi-
sions as the President deems necessary to effectuate the policies and
provisions of this title or chapter I and to safeguard the interests of
the United States.
(SEC. 142. AGREEMENTS.?(a) No defense support Or military
equipment and materials shall be furnished to any nation under
chapter I or under this title unless such nation shall have agreed to?
[(1) join in promoting international understanding and good
will, and maintaining world peace;
[(2) take such action as may be mutually agreed upon to elim-
inate causes of international tension;
[(3) fulfill the military obligations, if any, which it has as-
sumed under multilateral or bilateral agreements or treaties to
which the United States is a party;
[(4) make, consistent with its political and economic stability,
the full contribution permitted by its manpower, resources, fa-
cilities, and general economic condition to the development and
maintenance of its own defensive strength and the defensive
strength of the free world.;
? [(5) take all reasonable measures which may be needed to
develop its defense capacities;
[(6) take appropriate steps to insure the effective utilization of
the assistance furnished under this title in furtherance of the
policies and purposes of chapter I or of this title;
[(7) impose appropriate restrictions against transfer of title to
or possession of any equipment and materials, information, or
services furnished under chapter I without the consent of the
President;
[(8) maintain the security of any article, service, or informa-
tion furnished under chapter I;
[(9) furnish equipment and materials, services, or other assist-
ance consistent with the Charter of the United Nations, to the
United States or to and among other nations to further the policies
and purposes of chapter I;
[(10) permit continuous observation and review by United
States representatives of programs of assistance authorized under
chapter I or under this title, including the utilization of any such
assistance and provide the United States with full and complete
information with respect to these matters, as the President may
require.
[(b) In cases where any commodity is to be furnished on a grant
basis under this title under arrangements which will result in the
accrual of proceeds to the recipient nation from the import or sale
thereof, such assistance shall not be furnished unless the recipient
nation shall have agreed to establish a Special Account, and
[(i) deposit in the Special Account, under such terms and con-
ditions as may be agreed upon, currency of the recipient nation
in amounts equal to such proceeds;
[(ii) make available to the United States such portion of the
Special Account as may be determined by the President to be
necessary for the requirements of the United States: Provided,
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That such portion shall not be less than 10 per centum in the case
of any country to which such minimum requirement has been ap-
plicable under any Act repealed by this Act ; and
[(iii) utilize the remainder of the Special Account for programs
agreed to by the United States to carry out the purposes for winch
new funds authorized hy this Act would themselves be available:
Proeided, That it' amounts in such remainder exceed the require-
ments of such programs, the recipient nation may utilize such
excess amounts for other purposes agreed to by the United States
winch are consistent with the foreign policy of the United States:
Proeided further, That such utilization of such excess amounts in
all Special Accounts shall not exceed the equivalent. of $4,000,000 :
Peorided farther, That whenever funds from such Special Account
are 11S;(.11 [PC II Callnlry to 111)1ke 1.01Ins, nil funds received in repay-
ment of such loans prior to termination of assistance to such
country shall be reused only for such purposes as shall have been
agreed to between the country and the Government of the United
States.
Any unencumbered balances of funds which remain in the Account
upon termination of assistance to such nation under this Act shall be
disposed of for such purposes as may, subject to approval by the Act or
joint resolution of the Congress, be. agreed to between such country
and the Government of the United States.]
SEC. 143. ASSISTANCE TO YcoosuAvr.4..?In furnishing assistance
to Yugoslavia, the President shall continuously assure himself (1)
that Yugoslavia continues to maintain its independence, (2) that
Yugoslavia is not participating in any policy or program for the
Communist conquest of the word, and (3) that the furnishing of such
assistance is in the interest of the national security of the United
States. The President shall keep the Foreign Relations Commit-
tee and the Appropriations Committee of the Senate and the Speaker
of the House of Representatives fully and constantly informed of any
assistance furnished to Yugoslavia under this Act.
[Six. 144. SouTnEAsT ASIA.?Assistance under this title or chapter
I shall be made available subject to the provisions of sections 141
and 142, except that (1) in the case of assistance to the Associated
States of Cambodia, Laos, and Vietnam, and (2) in the case of assist-
ance (not to exceed in the aggregate 10 per centum of the amount
appropriated pursuant, to section 121, excluding unexpended balances
of prior appropriations) to other nations in the area of southeast
Asia, the President may waive specific provisions of section 142 to the
extent he may deem necessary in the national interest to carry out
the purposes of this Act. The President or such officer as he may
designate shall report each instance of such waiver to the Foreign
Relations, Appropriations, and Armed Services Committees of .the
Senate and the Speaker of the House of Representatives within thirty
days.
[TITLE II?DEVELOPMENT LOAN FUND
[SEC. 201. DECLARATION OF PURPOSE.?The Congress of the United
States recognizes that the progress of free peoples in their efforts to
further their economic development, and thus to strengthen their free-
dom, is important to the security and general welfare of the United
States. The Congress further recognizes the necessity in some cases of
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FOREIGN ASSISTANCE ACT OF 1961. 67
assistance to such people if they are to succeed in these efforts. The
Congress accordingly reaffirms that it is the policy of the United States,
and declares it to be the purpose of this title, to strengthen friendly
foreign countries by encouraging the development of their economies
through a competitive free enterprise system; to minimize or elimi-
nate barriers to the flow of private investment capital and interna-
tional trade; to facilitate the creation of a climax favorable to the in-
vestment of private capital; and to assist, on a basis of self-help and
mutual cooperation, the efforts of free peoples to develop their eco-
nomic resources and free economic institutions and to increase their
productive capabilities in agriculture as well as in industry. The
Congress recognizes that the accomplishment of the purposes of this
title in rapidly developing countries requires the development of free
economic institutions and the stimulation of private investment, local
as well as foreign, in the field of housing. It is the sense of the Con-
()Tess that, consistent with the other purposes of this title, special
consideration should be given to loans and guarantees to stimulate
activities in this field.
[SEC. 202. GENERAL AUTHORITY,?(a) To carry out the purpose of
this title, there is hereby created as an agency of the United States of
America, subject to the direction and supervision of the President, a
body corporate to be known as the "Development Loan Fund" (here-
inafter referred to in this title as the "Fund") which shall have suc-
cession in its corporate name. The Fund shall have its principal office
in the District of Columbia and shall be deemed, for purposes of venue
in civil actions, to be a resident thereof. It may establish offices in
such other place or places as it may deem necessary or appropriate.
[(b) The Fund is hereby authorized to make loans, credits, or guar-
anties, or to engage in other financing operations or transactions (not
to include grants or direct purchases of equity securities), to or with
such nations, organizations, persons or other entities, and on such
terms and conditions, as it may determine, taking into account (1)
whether financing could be obtained in whole or in part from other
free world sources on reasonable terms, (2) the economic and technical
soundness of the activity to be financed, (3) whether the activity
gives reasonable promise of contributing to the development of eco-
nomic resources or free economic institutions or to the increase of
productive capacities in furtherance of the purposes of this title, and
(4) the possible adverse effects upon the economy of the United
States, with special reference to areas of substantial labor surplus, of
the activity and the financing operation or transaction involved.
Loans shall be made by the Fund only on the basis of firm commit-
ments by the borrowers to make repayment and upon a finding that
there are reasonable prospects of such repayment. The Fund in its
operations shall recognize that development loan assistance will be
most effective in those countries which show a responsiveness to the
vital long-term economic, political, and social concerns of their people,
demonstrate a clear willingness to take effective self-help measures,
and effectively demonstrate that such assistance is consistent with,
and makes a contribution to, workable long-term economic develop-
ment objectives. The Fund shall be administered so as to support
and encourage private investment and other private participation
furthering the purposes of this title, and it shall be administered so
as not to compete with private investment capital, the Export-Import
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FOREIGN ASSISTANCE ACT OF 1961
Bank or the International Bank for Reconstruction and Development.
The provisions of section 955 of title 18 of the United States Code
shall not, apply to prevent, any person, including any individual, part-
nership, corporation, or association, from acting for or participating
with the Fund in any operation or transaction, or from acquiring any
i
obbgation issued n connection with any operation or transaction, en-
gaged in by the Fund. The authority of section 451(a) of this
Act may .not be used to waive the requirements of this title or of the
Mutual Defense Assistance Control Act of 1951 with respect to this
title, nor may the authority of section 501 of this Act be used to
increase or decrease the funds available under this title. No guar-
anties of equity investment against normal business-type risks shall be
made available under this subsection nor shall the fractional reserve
maintained by the Development Loan Fund for any guaranty made
pursuant to this section be less in any case than 50 per centum of the
contractual liability of the Development Loan Fund under such guar-
anty, and the total contractual liability of time Developmeht Loan
Fund under all of such guaranties shall not., at any one time, exceed
$100,000,000. The President's semi-annual reports to the Congress
on operations under this Act, as provided for in section 534 of this
Act, shall include detailed information on the implementation of this
title.
[(c) The Fund shall not allocate, reserve, earmark, commit, or
otherwise set aside, funds aggregating in excess of $50,000 for use in
any country under this title unless (1) an application for such funds
has been received for use in such country together with sufficient in-
formation and assurances to indicate reasonably that the funds will
be used in an exconomically and technically sound manner, or (2) the
President determines with respect to each such allocation, reservation,
earmarking, conunitment, or set-aside that it is in the national interest
to use such funds pursuant to multilateral plans.
(SEC. 203. (1
?APITALIZATION.?TherC is hereby authorized to be ap-
propriated to the President at any time after enactment of the Mutual
Security Act of 1959 without fiscal year limitation for advances to the
Fund after June 30, 1959, not to exceed $1,800,000,000 of which not
to exceed $700,000,000 may be advanced prior to July 1, 1960, and not
to exceed an additional $1,100,000,000 may be advanced prior to July
1, 1961.
[Sue. 204. FISCAL FIWVISIONS.?(a) All receipts from activities or
transactions under this title shall be credited to the Fund and, not-
withstanding section 1415 of the Supplemental Appropriation Act,
1953, or any other provision of law relating to time use of foreign
currencies or other receipts accruing to the United States, shall be
available for use for purposes of this title.
[(b) The Fund is authorized to incur, in accordance with the pro-
visions of this title, obligations in amounts which may not at any
time exceed the assets of the Fund. The term "assets of the Fund"
as used in this section shall mean the amount of liquid assets of the
Fund at any given time including any amount of capitalization nuale
available pursuant to section 203 of this Act which has not been
advanced to the Fund as of such time. The assets of the Fund
shall be available without fiscal year limitation for any obligations or
expenditures in connection with the performance of functions under
this title.
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[(c) The Fund shall be deemed to be a wholly owned Government
corporation and shall accordingly be subject to the applicable pro-
provisions of the Government Corporation Control Act, as amended.
[SEc. 205. MANAGEMENT, POWERS AND ATJTHORITIES.?(a) The
management of the Fund shall be vested in a Board of Directors
(hereinafter referred to in this title as the "Board") consisting of the
Secretary of State, who shall be Chairman, the Director of the In-
ternational Cooperation Administration, the Chairman of the Board
of Directors of the Export-Import Bank, the Managing Director of
the Fund, and the United States Executive Director on the Interna-
tional Bank for Reconstruction and Development. The Board shall
carry out its functions subject to the foreign policy guidance of the
Secretary of State. The Board shall act by a majority vote partici-
pated in by a quorum; and three members of the Board shall constitute
a quorum. Subject to the foregoing sentence, vacancies in the mem-
bership of the Board shall not affect its power to act. The Board
shall meet for organization purposes when and where called by the
Chairman. The Board may, in addition to taking any other necessary
or appropriate actions in connection with the management of the
Fund, adopt, amend, and repeal bylaws governing the conduct of its
business and the performance of the authorities, powers, and func-
tions of the Fund and its officers and employees. The members of
the Board shall receive no compensation for their services on the
Board but may be paid actual travel expenses and per diem in lieu
of subsistence under the Standardized Government Travel Regula-
tions in connection with travel or absence from their homes or regular
places of business for purposes of business of the Fund.
[(b) There shall be a Managing Director of the Fund who shall
be the chief executive officer of the Fund, who shall be appointed by
the President of the United States by and with the advice and consent
of the Senate, and whose compensation shall be at a rate of $20,000
a year. There shall also be a Deputy Managing Director of the Fund,
whose compensation shall be at a rate not in excess of $19,000 a year,
and four other officers of the Fund, whose titles shall be determined
by the Board and whose compensation shall be at a rate not in excess
of $18,000 per year. Appointment to the offices provided for in the
preceding sentence shall be by the Board. The Managing Director,
in his capacity as chief executive officer of the Fund, the Deputy
Managing Director and the other officers of the Fund shall perform
such functions as the Board may designate and shall be subject to the
supervision and direction of the Board. During the absence or dis-
ability of the Managing Director or in the event of a vacancy in the
office of Managing Director, the Deputy Managing Director shall act
as Managing Director, or, if the Deputy Managing Director is also
absent or disabled or the office of Deputy Managing Director is vacant,
such other officer as the Board may designate shall act as Managing
Director. The offices provided for in this subsection shall be in ad-
dition to positions otherwise authorized by law.
((c) The Fund, in addition to other powers and authorities vested
in or delegated or assigned to the Fund or its officers or the Board,
may: enter into, perform, and modify contracts, leases, agreements,
or other transactions, on such terms as it may deem appropriate,
with any agency or instrumentality of the United States, with any
foreign government or foreign government agency, or with any per-
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SOD, partnership, association, corporation, organization, or other en-
tity, public or private, singly or in combination; accept and use gifts
or donations of services, funds, or property (real, personal or mixed,
tangible or intangible); contract for the services of attorneys; deter-
mine the character of and necessity for obligations and expenditures
of the Fund, and the manner in which they shall be incurred, allowed,
and paid, subject to provisions of law specifically applicable to
Government corporations; acquire and dispose of, upon such terms
and conditions and for such consideration as the Fund shall deter-
mine to be reasonable, through purchase, exchange, discount, redis-
count, public or private sale, negotiation, assignment, exercise of
option or conversion rights, or otherwise, for cash or credit, with or
Without endorsement or guaranty, any property, real, personal, mixed,
tangible or intangible, including, but not limited to, mortgages, bonds.
debentures (including convertible debentures), liens, pledges, and
other collateral or security, contracts, claims, currencies, notes, drafts,
cheeks, bills of exchange, acceptance includinl, bankers' acceptances,
cable transfers and all other evidences of indebtedness or ownership
(provided that equity securities may not be directly purclan-ed al-
though such securities may be acquired by other means such as by
exercise of conversion rights or through enforcement of liens, pledges
or otherwise to satisfy a previously incurred indebtedness), and guar-
antee payment, against any instrument above specified; issue letters
of credit and letters of commitment; collect or compromise any obli-
gations assigned to or held by, and an legal or equitable rights
accruing to, the Fund, and, as the Fund may determine, refer any
such obligations or rights to the Attorney General for suit or collec-
tion; adopt, alter and use it corporate seal which shall be judicially
noticed; require bonds for the faithful performance of the duties of
its officers, attorneys, agents and employees and pay the premiums
thereon; sue and be sued in its corporate name (provided that no
attachment, injunction, garnishment, or similar process, 'nestle or
final, shall be issued against the Fund or any officer thereof, including
the Board or any member thereof, in Ins official capacity or against
property or funds owned or held by the Fund or any such officer in his
official capacity); exercise, in the payment of debts out of bankrupt,
insolvent or decedent's estates, the priority of the Government of the
United States; purchase one passenger motor -vehicle for use in the
United States and replace such vehicle front time to time as necessary;
use tile United States mails in the same manner and tinder the same
conditions as the executive departments of the Federal Government;
and otherwise take any and all actions determined by the Fund to
be necessary or desirable in making, carrying out, servicing, com-
promising, liquidating, or otherwise dealing with or realizing on any
transaction or operation, or in carrying out any function. Nothing
herein shall be construed to exempt the Fund or its operations from
the application of sections 507(b) and 2679 of title 28, United States
Code or of section 367 of the Revised Statutes (5 U.S.C. 316), or to
authorize the Fund to borrow any funds from any source without
the express legislative permission of the Congress.
[(d) The Fund shall contribute, from the respective appropriation
or fund used for payment of salaries, pay or compensation, to the civil
service retirement BAld disability fund, a sum as provided by section
4(a) of the Civil Service Retirement Act, as amended (5 U.S.C.
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2254a), except that such sum shall be determined by applying to the
total basic salaries (as defined in that Act) paid to the employees of
the Fund covered by that Act, the per centum rate determined an-
nually by the Civil Service Commission to be the excess of the total
normal cost per centum rate of the civil service retirement system over
the employee deduction rate specified in said section 4(a). The Fund
shall also contribute at least quarterly from such appropriation or
fund, to the employees' compensation fund, the amount determined
by the Secretary of Labor to be the full cost of benefits and other
payments made from such fund on account of injuries and deaths of its
employees which may hereafter occur. The Fund shall also pay into
the Treasury as miscellaneous receipts that portion of the cost of
administration of the respective funds attributable to its employees,
as determined by the Civil Service Commission and the Secretary of
Labor.
[(e) The assets of the Development Loan Fund on the date of
enactment of the Mutual Security Act of 1958 shall be transferred as
of such date to the body corporate created by section 202(a) of this
Act. In addition, records, personnel, and property of the Interna-
tional Cooperation Administration may, as agreed by the Managing
Director and the Director of the International Cooperation Admin-
istration or as determined by the President, be transferred to the
Fund. Obligations and liabilities incurred against, and rights estab-
lished or acquired for the benefit of or with respect to, the Develop-
ment Loan Fund during the period between August 14, 1957, and the
date of enactment of the Mutual Security Act of 1958 are hereby
transferred to, and accepted and assumed by, the body corporate cre-
ated by section 202(a) of this Act. A person serving as Manager of
the Development Loan Fund as of the date of enactment of the Mu-
tual Security Act of 1958 shall not, by reason of the enactment of that,
Act, require reappointment in order to serve in the office of Managing
Director provided for in section 205(b) of this Act.
ESEc. 206. NATIONAL ADVISORY COUNCIL.?The fund shall be ad-
ministered subject to the applicable provisions of section 4 of the
Bretton Woods Agreements Act (22 U.S.C. 286b) with respect to the
functions of the National Advisory Council on International Monetary
and Financial Problems,
[TITLE III?TECHNICAL COOPERATION
[SEC. 301. DECLARATION OF PURPOSE.?It is the policy of the
United States and the purpose of this title to aid the efforts of the
peoples of economically underdeveloped areas to develop their
resources and improve their working and living conditions by en-
couraging the exchange of technical knowledge and skills and the flow
of investment capital to countries which provide conditions under
which such technical assistance and capital can effectively and con-
structively contribute to raising standards of living, creating new
sources of wealth, increasing productivity and expanding purchasing
power.
[SEC. 302. GENERAL AUTIIORITY AND DEFINITION.?The President
is authorized to furnish assistance in accordance with the provisions
of this title through bilateral technical cooperation programs. As
used in this title, the term "technical cooperation programs" means
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programs for the international interchange of technical knowledge
and skills designed to contribute primarily to the balanced and inte-
grated development of the economic resources and productive ca-
pacities of economically underdeveloped areas. Such activities shall
be limited to economic, engineering, medical, educational, labor, agri-
cultural, forestry, fishery, mineral, and fiscal surveys, demonstration,
training and similar projects that serve the purpose of promoting the
development of economic resources, productive capacities, and trade
of economically underdeveloped areas, and training in public admin-
istration. The term "technical cooperation programs" does not in-
clude such activities authorized by the United States Information
and Educational Exchange Act of 1948 (62 Stat. 6) as are not pri-
marily related to economic development, nor activities undertaken
now or hereafter pursuant to the International Aviation Facilities
Act (62 Stat. 450), nor activities undertaken now or hereafter in
the administration of areas occupied by the United States armed
Forces.
[SEc. 303. PREREQUISITES TO ASSISTANCE.--Assistance shall be
made available under section 302 of this Act only where the President
determines that the nation being assisted?
[(a) pays a fair share of the cost of the program;
[(b) provides all necessary information concerning such pro-
gram and gives the program full publicity;
[(c) seeks to the maximum extent possible full coordination
and integration of technical cooperation programs being carried
on in that nation;
[(d) endeavors to make effective use of the results of the pro-
gram; and
[(e) cooperates with other nations participating in the program
in the mutual exchange of technical knowledge and skills.
[SEc. 304. AUTHORIZATION.?There is hereby authorized to be ap-
propriated to the President to remain available until expended not to
exceed $172,000,000 for use beginning in the fiscal year 1961 to carry
out the purposes of this title.
[SEc. 305. LIMITATION ON USE OF FUNDS.----FUTIC1S made tiveilable
under section 304 may be expended to furnish assistance in tbc: form
of equipment or commodities only where necessary for instruction or
demonstration purposes.
[SEc. 306. MULTILATERAL TECHNICAL COOPERATION AND RELATED
Pitoua.A.ms.---As one MMUS of accomplishing the purposes of this
title and this Act, the. United States is authorized to participate in
multilateral technical cooperation and related programs carried on
by the United Nations, the Organization of American States, their
related organizations, and other international organizations, wherever
practicable. There is hereby authorized to be appropriated to carry
out the purpose of this section, in addition to the amounts authorized
by section 304, not to exceed--
[(a) $33,000,000 for the fiscal year 1961 for contributions to the
United Nations Expanded Program of Technical Assistance and such
related fund as may hereafter be established: Provided, .that, not-
withstanding the limitation of 33.33 per centum contained in the. Mu-
tual Security Appropriation Act, 1957, the United States contribution
for such purpose may constitute for the calendar year 1958 as much
as but not to exceed 45 per centum of the total amount contributed for
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FOREIGN ASSISTANCE ACT OF 1961
such purpose and for succeeding calendar years not to exceed 40 per
centum of the total amount contributed for such purpose (including
assessed and audited local costs) for each such year.
((b) $1,500,000 for the fiscal year 1961 for contributions to the
technical cooperation program of the Organization of American
States.
[SEC. 307. ADVANCES AND GRANTS; CONTRACTS.?(a) The Presi-
dent may make advances and grants-in-aid of technical cooperation
programs to any person, corporation, or other body of persons or to
any foreign government agency. The President may make and per-
form contracts and agreements in respect to technical cooperation
programs on behalf of the United States Government with any person,
corporation, or other body of persons however designated, whether
within or without the United States, or with any foreign government
or foreign government agency. A contract or agreement which entails
commitments for the expenditure of funds appropriated pursuant
to this title may, subject to any future action of the Congress, extend
at any time for not more than three years.
[(b) The President shall arrange for a nongovernmental research
group, university, or foundation to study the advisability and prac-
ticability of a program, to be known as the Point Four Youth Corps,
under which young United States citizens would be trained and serve
abroad in programs of technical cooperation. Not to exceed $10,000
from funds made available pursuant to section 304 of this Act may be
used to help defray the expenses of such a study.]
SEC. 308 INTERNATIONAL DEVELOPMENT ADVISORY BOARD.? * "
(Repealed-1960)
[TITLE IV?SPEC1AL ASSISTANCE AND OTHER PROGRAMS
[SEC. 400. SPECIAL ASSISTANCE.?(a) There is hereby authorized
to be appropriated to the President for the fiscal year 1961 not to
exceed $256,000,000 for use on such terms and conditions as he may
specify for assistance designed to maintain or promote political or
economic stability.
[(b) For the purpose of promoting economic development in Latin
America there is hereby authorized to be appropriated to the Presi-
dent not to exceed $25,000,000, which shall remain available until
expended, and in the utilization of such sum preference shall be given
to (A) projects or programs that will clearly contribute to promoting
health, education, and sanitation in the area as a whole or among a
group or groups of countries of the area, (B) joint health, education,
and sanitation assistance programs undertaken by members of the
Organization of American States, and (C) such land resettlement
programs as will contribute to the resettlement of foreign and native
migrants in the area as a whole, or in any country of the area, for
the purpose of advancing economic development and agricultural and
industrial productivity: Provided, That assistance under this sentence
shall emphasize loans rather than grants wherever possible, and not
less than 90 per centum of the funds made available for assistance
under this subsection shall be available only for furnishing assistance
on terms of repayment in accordance with the provisions of section
505.
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74 FOREIGN ASSISTANCE ACT OF 1961
[(c) The President is authorized to use not to exceed $20,000,000
of funds appropriated pursuant to subsection (a) of this section for
assistance, on such terms and conditions its he may specify, to schools
and libraries abroad, founded or sponsored by citizens of the United
States, and serving as study and demonstration centers for ideas and
? - -
practices of the United States, notwithstanding any other Act author-
izing assistance of this kind. Further, in addition to the authority
contained in this subsection, it is the sense of Congress that the Presi-
dent should make a special and particular effort to utilize foreign
currencies accruing under title I of the Agricultural Trade Develop-
ment and Assistance Act. of 1951, as amended, and notwithstanding
the provisions of Public Law 213, Eighty-second Congress, the
President is authorized to utilize foreign currencies accruing to the
United States under this or any other Act, for the purposes of this
subsection and for hospitals abroad clesined to serve as centers for
medical treatment, education and research, founded or sponsorM by
citizens of the United States.
[Sec. 401. 1 'NITED NATIONS EMERGENCY FORCE.- -The Congress of
the United States, recognizing the important contribution of the
United Nations Emergency Force to international peace and security,
declares it to be the policy of the United States and the purpose of this
section to support the United Nations Emergency Force. The -Presi-
dent is hereby authorized to use during the fiscal year 1961 funds
made available pursuant to section 400(a) of this Act for conliribu-
tions on a voluntary basis to the budget of the United Nations Emer-
gency Force.1
SEC. 402. EARMARKING OF FUNDS.- --Of the funds authorized to be
made available in the fiscal year 1061 pursuant to this Act (other
than funds made available pursuant. to title ID, not less than
$175,000,000 shall be used to finance the export and sale for k-reign
currencies or the grant of surplus agricultural commodities or prod-
ucts thereof produced in the -United States, in addition to surplus
agricultural commodities or products transferred pursuant to the
Agricultural Trade Development and Assistance Act of 1954, and
in accordance with the standards as to pricing and the use of pri-
vate trade channels expressed in section 101 of said Act. Foreign
currency proceeds accruing from such sides shall be used for the pur-
poses of this Act and with particular emphasis on the purposes of sec-
tion 104 of the Agricultural Trade Development and Assistancr2 Act
of 1954 which are in harmony with the purposes of this Act. Not-
withstanding section 1-115 of the Supplemental ,k.ppropriation Act,
1953, or any other provision of law, the President may use or enter
into agreements with friendly nations or organizations of nations to
use for such purposes the foreign currencies which accrue to the
United States under this section. Surplus food commodift?s or
products thereof made available for transfer under this Act (or any
other Act) as a grant or as a sale for foreign currencies may also be
made available to the maximum extent practicable to eligible domestic
recipients pursuant to section 416 of the Agricultural Act of 1919, as
amended (7 U.S.C. 1431), or to needy persons within the United
States pursuant to clause (2) of section 32 of the Act of August 24,
1935, as amended (7 U.S.C. 612c), Section 416 of the Agricultural
Act of 1949, as amended (7 U.S.C. 1431), is amended by inserting
"whether in private stocks or" after "commodities" the first time that
word appears.
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FOREIGN ASSISTANCE ACT OF 1961 75
ESEc. 403. RESPONSIBILITIES IN GERMANY.?The President is
hereby authorized to use during the fiscal year 1961 not to exceed
$6,750,000 of the funds made available pursuant to section 400(a)
of this Act in order to meet the responsibilities or objectives of the
United States in Germany, including West Berlin. In carrying out
this section, the President may also use currency which has been or
i
may be deposited in the GARIOA (Government and Relief n Occu-
pied Areas) Special Account, including that part of the German cur-
rency now or hereafter deposited under the bilateral agreement of
December 15, 1949, between the United States and the Federal Re-
public of Germany (or any supplementary or succeeding agreement)
which, upon approval by the President, shall be deposited in the
GARIOA Special Account under the terms of article V of that agree-
ment. The President may use the funds available for the purposes of
this section on such terms and conditions as he may specify, and with-
out regard to any provision of law which he determines must be dis-
regarded.]
[SEC. 404. INDUS BASIN DEVELOPMENT.?The Congress of the
United States welcomes the progress made through the good offices of
the International Bank for Reconstruction and Development toward
the development of the Indus Basin through a program of coopera-
tion among south Asian and other nations of the free world in order
to promote economic growth and political stability in south Asia, and
affirms the willingness of the United S(ates, pursuant to authorities
contained in this and other Acts, to participate in this significant
undertaking. In the event that funds appropriated pursuant to this
Act are made available to be used by or under the supervision of the
International Bank for Reconstruction and Development in further-
ance of the foregoing purposes, such funds may be used in accordance
with requirements, standards, or procedures established by the Bank
concerning completion of plans and cost estimates and determination
of feasibility, rather than with requirements, standards, or procedures
concerning such matters set forth in this or other Acts; and such funds
may also be used without regard to the provisions of section 901(b) of
the Merchant Marine Act of 1936, as amended (46 U.S.C. 1241),
whenever the President determines that such provisions cannot be
fully satisfied without seriously impeding or preventing accomplish-
ment of such purposes: Provided, That compensating allowances are
made in the administration of other programs to the same or other
areas to which the requirements of said section 901(b) are applicable.]
SEC. 405. MIGRANTS, REFUGEES, AND ESCAPEES.?(a) The Presi-
dent is hereby authorized to continue membership for the United
States on the Intergovernmental Committee for European Migration
in accordance with. its constitution approved in Venice, Italy, on
October 19, 1953. For the purpose of assisting in the movement of
migrants, there is hereby authorized to be appropriated such amounts
as may be necessary from time to time for the payment by the United
States or its contributions to the Committee and all necessary sal-
aries and expenses incident to United States participation in the
Committee.
[(b) Of the funds made available under this Act, not more than
$800,000 may be used by the President to facilitate the migration to
the other American. Republics of persons resident in that portion of
the Ryukyu Island Archipelago under United States control.]
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(c) There is hereby authorized to be appropriated for the fiscal
year 1961. not to exceed $1,300,000 for contributions to the program
of the United Nations High Commissioner for Refugees for assistance
to refugees under his inundate.
(d) There is hereby authorized to be appropriated to the Presi-
dent for the fiscal year 1961 not to exceed $3,500,000 for continuation
of activities, including care, training, and resettlement, which have
been undertaken for selected escapees under section 451 of this Act.
[SEc. 406. CHILDREN'S WELFARE.?There is hereby authorized
to be appropriated not to exceed $12,000,000 for the fiscal year 1961
for contributions to the United Nations Children's Fund.
ESEc. 407. PALESTINE REFUGEES IN THE NEAR EAST.?There is
hereby authorized to be appropriated to the President for the fiscal
year 1961 not to exceed S16,500,000 to be used to make contributions
to the United Nations Relief and Works Agency for Palestine Refugees
in the Near East. In determining whether or not to continue fur-
nishing assistance for Palestine refugees in the Near East, the Presi-
dent shall take into account whether Israel and the Arab host govern-
ments are taking steps toward the resettlement and repatriation of
such refugees. It. is the sense of the Congress that the earliest possi-
ble rectification shouhl be made of the Palestine refugee rolls in order
to assure that only bona fide refugees whose need and eligibility for
relief have been certified shall receive aid from the Agency and that
the President in determining whether or not to make United States
contributions to the Agency should take into consideration the. ex-
tent and success of efforts by the Agency and the host governments
to rectify such relief rolls. The President. shall include in his rec-
ommendations to the Congress for fiscal year 1962 programs under
this Act IL report concerning the progress made toward the rectifica-
tion of the relief rolls as well as toward the repatriation and resettle-
ment of the refugees by the governments directly concerned. When-
ever the President shall determine that it would more effectively con-
tribute to the relief, repatriation, and resettlement of Palestine refugees
in the Near East he may expend any part of the funds made available
pursuant to this section through any other agency he may designate.]
SEC. 408. NORTH ATLANTIC TREATY ORGANIZATION.?(a) In order
to provide for United States participation in the North Atlantic
Treaty Organization, there is hereby authorized to be appropriated
such amounts as may be necessary from time to time for the payment
by the United States of its share of the expenses of the Organization
and all necessary salaries and expenses of the United States permanent
representative to the Organization, of such persons as may be ap-
pointed to represent the United States in the subsidiary bodies of the
Organization or in any multilateral organization which participates
in achieving the aims of the North Atlantic Treaty, and of their
appropriate staffs, and the expenses of participation in meetings of
such organizations, including salaries, expenses, and allowances of
personnel and dependents as authorized by the Foreign Service Act
of 1946, as amended (22 U.S.C. 801), anti allowances and expenses
as provided in section 6 of the Act of July 30, 1946 (22 U.S.C. 287r).
(b) The United States permanent representative to the North
Atlantic Treaty Organization shall be appointed by the President by
and with the advice and consent of the Senate and shall hold office
at the pleasure of the President. Such representative shall have the
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rank and status of ambassador extraordinary and plenipotentiary and
shall be a chief of mission, class 1, within the meaning of the Foreign
Service Act of 1946, as amended (22 U.S.C. 801).
(c) Persons detailed to the international staff of the North Atlantic
Treaty Organization in accordance with section 529 of this Act who
are appointed as Foreign Service Reserve Officers may serve for periods
of more than five years notwithstanding the limitation in section
522 of the Foreign Service Act of 1946, as amended (22 U.S.C. 922.)
[SEC. 409. OCEAN FREIGHT CHARGES.?(a) In order to further the
efficient use of United States volUntary contributions for relief and
rehabilitation in nations and areas eligible for assistance under this
Act, the President may pay ocean freight charges from United States
ports to designated ports of entry of such nations and areas, or, in
the case of such nations and areas which are landlocked, trans-
portation charges from the United States ports to designated points
of entry in such nations and areas, on shipments by United States
voluntary nonprofit relief agencies registered with and approved by
the Advisory Committee on Voluntary Foreign Aid and shipments by
the American Red Cross.
[(b) Where practicable the President shall make arrangements with
the receiving nation for free entry of such shipments and for the
making available by that nation of local currencies for the purpose
of defraying the transportation cost of such shipments from the port
of entry of the receiving nation to the designated shipping point of
the consignee.
[(c) There is hereby authorized to be appropriated to the Presi-
dent for the fiscal year 1961 not to exceed $2,000,000 to carry out
the purposes of this section.
[(d) In addition, any funds made available under this Act may
be used, in amounts determined by the President, to pay ocean freight
charges on shipments of surplus agricultural commodities, including
commodities made available pursuant to any Act for the disposal
abroad of United States agricultural surpluses.]
SEC. 410. CONTROL ACT EXPENSES.?* * * (Repealed-1959)
(SEC. 411. ADMINISTRATIVE AND OTHER EXPENSES.?(a) Whenever
possible, the expenses of administration of this Act shall be paid for in
the currency of the nation where the expense is incurred.
[(b) There is hereby authorized to be appropriated to the Presi-
dent for the fiscal year 1961 not to exceed $40,000,000 for neces-
sary administrative expenses incident to carrying out the provisions
of this Act (other than chapter I and title II of chapter II and func-
tions under the Agricultural Trade Development and Assistance
Act of 1954, as amended (7 U.S.C. 1691 and the following) per-
formed by any agency or officer administering nonmilitary assistance.
[(c) There are authorized to be appropriated for expenses of
the Department of State such amounts as may be necessary from
time to time for administrative expenses which are incurred for func-
tions of the Department under this Act or for normal functions of
the Department which relate to functions under this Act, and for
expenses of carrying out the objectives of the Mutual Defense As=i,t-
ance Control Act of 1951 (22 U.S.C. 1611): Provided, That, in addi-
tion, funds made available for carrying out chapter I of this Act shall
be available for carrying out the objectives of the Mutual Defense
72746-61-6
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78 FOREIGN ASSISTANCE ACT OF 1961
Assistance Control Act of 1951 in such amounts as the President may
direct.
[(d) Funds made available for the purposes of this Act may be
used for compensation, allowances, and travel of personnel, including
Foreicrn Service personnel whose services are utilized primarily for
the purposes of this Act, and without regard to the provisions of any
other law, for printing and binding, and for expenditures outside
the l-nited States for the, procurement of supplies and services and for
other administrative and operating purposes (other than compensa-
tion of personneli without regard to such laws and regulations gov-
erning the obligation and expenditure of Government funds as may
be necessary to accomplish the purposes of this Act.]
SEc. 412. CHINESE AND KOREAN STUDENTS.?* * * (Repealed-
1957)
SEc. 412. PRESIDENT'S SPECIAL EDUCATION AND TRAINING FUND.?
* * * (Repealed-1960)
[SEC. 413. ENCOCRA OEMENT OF FREE ENTERPRISE AND PRIVATE
PARTICIPATION.?(a) The Congress recognizes the vital role of free
enterprise in achieving rising revels of production and standards of
living essential to the economic progress and defensive strength of the
free world. Accordingly, it is declared to be the policy of the United
States to encourage the efforts of other free nations to increase the
flow of international trade, to foster private initiative and competi-
tion, to discourage monopolistic practices, to improve the tecimical
efficiency of their industry, agriculture and commerce, and to strength-
en free labor unions; and to encourage the contribution of United
States enterprise toward economic strength of other free nations,
through private trade and investment abroad, private participation in
the programs carried out under this Act (including the use of private
trade channels to the maximum extent practicable in carrying out such
programs), and exchange of ideas and technical information on the
mat ters covered by this section.
[(b) In order to encourage and facilitate participation by private
enterprise to the maximum extent practicable in achieving any of the
purposes of Lids Act, the President?
[(1) shall make arrangements to find and draw the attention of
private enterprise to opportunities for investment and develop-
ment in other free nations;
[(2) shall accelerate a program of negotiating treaties for com-
merce and trade, including tax treaties, which shall include pro-
visions to encourage and facilitate the flow of private investment
to, and its equitable treatment in, nations participating in pro-
grams under this Act ?
[(3) shall, consistent with the security and best interests of the
United States, seek compliance by other countries or a dependent
area of any country with all treaties for commerce and track_ and
taxes and shall tale all reasonable measures under this A4 or
other authority to secure compliance therewith and to assist
United States citizens in obtaining just compensation for losses
sustained by them or payments exacted from them as a result of
measures taken or imposed by any country or dependent area
thereof in violation of any such treaty; and
[(4) may make, through an agency responsible for adminis-
tering nonmilitary assistance under this Act, until June 30,
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1967, under rules and regulations prescribed by him, guaranties
to any person of investments in connection with projects, in-
cluding expansion, modernization or development of existing
enterprises, in any nation with whial. the United States has agreed
to institute the guaranty program: Provided, That?
[(A) such projects shall be approved by the President as
furthering the development of the economic resources and.
productive capacities of economically underdeveloped areas
or, in the case of guaranties issued prior to January 1, 1960,
on the basis of applications submitted prior to July 1, 1959,
any of the purposes of this Act, and by the nation concerned;
[(B) the guaranty to any person shall be limited to assur-
ing any or all of the following:
[(i) the transfer into United States dollars of other
currencies, or credits in such currencies, received by such
person as earnings or profits from the approved project,
as repayment or return of the investment therein, in
whole or in part, or as compensation for the sale or dis-
position of all or any part thereof;
[(ii) the compensation in United States dollars for
loss of all or any part of the investment in the approved
project which shall be found by the President to have
been lost to such person by reason of expropriation or
confiscation by action of the government of a foreign na-
tion or by reason of war;
[(C) when any payment is made to any person pursuant
to a guaranty as hereinbefore described, the currency, credits,
assets, or investment on account of which such payment is
made shall become the prOperty of the United States Govern-
ment, and the United States Government shall be subrogated
to any right, title, claim or cause of action existing in con-
nection therewith;
[(D) the guaranty to any person shall not exceed the
amount of dollars invested in the project by such person with
the approval of the President plus actual earnings or profits
on said project to the extent provided by such guaranty, and
shall be limited to a term not exceeding twenty years from the
date of issuance;
[(E) a fee shall be charged in an amount not exceeding 1
per centum per annum of the amount of each guaranty under
clause (i) of subparagraph (B), and not exceeding 4 per
centum of the amount of each guaranty under clause (ii) of
such subparagraph, and all fees collected hereunder shall be
available for expenditure in discharge of liabilities under
guaranties made under this section until such time as all
such liabilities have been discharged or have expired, or
until all such fees have been expended in accordance with
the provisions of this section: Provided, That in the event
the fee to be charged for a type of guaranty is reduced, fees
to be paid under existing contracts for the same type of guar-
anty may be similarly reduced;
[(F) the President is authorized to issue guaranties up to
a total face value of $1,000,000,000 exclusive of informa-
tional media guaranties heretofore and hereafter issued pur-
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FOREIGN ASSISTANCE ACT OF 1951
suant to section 1011 of the Act of January 27, 1948, as
amended (22 U.S.C. 1442), and section 111(b)(3) of the
Economic Cooperation Act of 1948, as amended (22 U.S.C.
1509(b)(3)): Provided, That any funds allocated to a guar-
anty and remaining after all liability of the United States
assumed in connection therewith has been released, dis-
charged, or otherwise terminated, and funds realized after
June. 30, 1955, from the sale of currencies or other assets
acquired pursuant to subparagraph (C), shall be available
for allocation to other guaranties, and the foregoing limita-
tion shall be increased to the extent that such funds become
available. Any payments made to discharge liabilities
under guaranties issued under this paragraph shall be paid
out of fees collected under subparagraph (E) as long as such
fees are available, and thereafter shall be paid out of funds
realized from the sale of currencies or other assets acquired
pursuant to subparagraph (C) and notes which have been
issued under authority of paragraph 111 (C)(2) of the Eco-
nomic Cooperation Act of 1948, as amended, and authorized
to be issued under this paragraph by the Director of the
International Cooperation Administration or such other offi-
cer as the President may designate, when necessary to
discharge liabilities under any such guaranty: Provided,
That all guaranties issued after June 30, 1956, pursuant to
this paragraph shall be considered for the purposes of sec-
tions 3679 (31 U.S.C. 665) and 3732 (41 U.S.C. 11) of the
Revised Statutes, as amended, as obligations only to the
extent of the probable ultimate net cost to the United States
of such guaranties; and the President shall, in the submis-
sion to the Congress of the reports required by section 534
of this Act, include information on the operation of this para-
graph: Provided further, That at all times funds shall be
allocated to all outstanding guaranties issued prior to July 1,
1956, exclusive of informational media guaranties issued pur-
suant to section 1011 of the Act of January 27, 1948, as
amended (22 U.S.C. 1442), and section 111(b)(3) of the
Economic Cooperation Act of 1948, as amended, equal to
the sum of the face value of said guaranties. For the pur-
pose of this paragraph the Director of the Interna6ona1
Cooperation Administration or such other officer as the Presi-
dent may designate is authorized to issue notes (in addi-
tion to the notes heretofore issued pursuant to paragraph
111(c)(2) of the Economic Cooperation Act of 1948, as
amen(led) in an amount not to exceed $37,500,000,. and on the
same terms and conditions applicable to notes issued pur-
suant to said paragraph 111(c)(2);
[(G) the guaranty program authorized by this paragraph
shall be used to the maximum practicable extent and shall be
administered under broad criteria so as to facilitate and
increase the participation of private enterprise in furthering
the development of the economic resources and productive
capacities of economically underdeveloped areas or, in the
case of guaranties issued prior to January 1, 1960, OIL the
basis of applications submitted prior to July 1, 1959, any of
the purposes of this Act;
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FOREIGN ASSISTANCE ACT OF 19611
[(II) as used in this paragraph?
[(i) the term "person" means a citizen of the United
States or any corporation, partnership, or other associa-
tion created under the law of the United States or of
any State or Territory and substantially beneficially
owned by citizens of the United States, and
((II) the term "investment" includes any contribution
of capital goods, materials, equipment, services, patents,
processes, or techniques by any person in the form of (1)
a loan or loans to an approved project, (2) the purchase
of a share of ownership in any such project, (3) par-
ticipation in royalties, earnings, or profits of any such
items
and
and (4) the furnishing of capital goods
and related services pursuant to a contract providing for
payment in whole or in part after the end of the fiscal
year in which the guaranty of such investment is made.
[(c) Under the direction of the President, the Departments of
State and Commerce and such other agencies of the Government as
the President shall deem appropriate, in cooperation to the fullest
extent practicable with private enterprise concerned with interna-
tional trade, foreign investment, and business operations in foreign
countries, shall conduct annual studies to keep the data up to date
of the ways and means in which the role of private sector of the
national economy c;In be more effectively utilized and protected in
carrying out the purposes of this Act, so as to promote the foreign
policy of the United States, to stabilize and to expand its economy
and to prevent adverse effects, with special reference to areas of sub-
stantial labor surplus, and to the net position of the United States in
its balance of trade with the rest of the world. Such studies shall
include specific recommendations for such legislative and administra-
tive action as may be necessary to expand the role of private enterprise
in advancing the foreign policy objectives of the United States.
[(d) Under the direction of the President, the Department of
State and such other agencies of the Government as the President
shall deem appropriate shall conduct a study of methods by which
the United States and other nations including those which are parties
to regional agreements for economic cooperation to which the United
States is a party, or any of them, might best together formulate and
effectuate programs of assistance to strengthen the economies of free
nations so as to advance the principal purposes of this Act, as stated
in section 2 thereof.]
SEC. 414. MTJNITIONS CONTROL.?(a) The President is authorized
to control, in furtherance of world peace and the security and foreign
policy of the United States, the export and import of arms, ammuni-
tion, and implements of war, including technical data relating thereto,
other than by a United States Government agency. The President is
authorized to designate those articles which shall be considered as
arms, ammunition, and implements of war, including technical data
relating thereto, for the purposes of this section.
(b) As prescribed in regulations issued under this section, every
person who engages in the business of manufacturing, exporting, or
importing any arms, ammunition, or implements of war, including
technical data relating thereto, designated by the President under
subsection (a) shall register with the United States Government
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1961
agency charged with the administration of this section, and, in addi-
tion, shall pay a registration fee which shall be prescribed by such
regulations. Such regulations shall prohibit the return to the United
States for sale in the United States (other than for the Armed Forces
of the United States and its allies) of any military firearms or ammu-
nition of United States manufacture furnished to foreign governments
by the United States under this Act or any other foreign assistance
program of the United States, whether or not advanced in value or
improved in condition in a foreign country. This prohibition shall
not extend to similar firearms that have been so substantially trans-
formed as to become, in effect, articles of foreign manufacture.
(c) Any person who willfully violates any provision of this section
or any rule or regulation issued under this section, or who willfully,
in a registration or license application, makes any untrue statement
of a material fact or omits to state a material fact required to be stated
therein or necessary to make the statements therein not misleading,
swill upon conviction he lined not more titan $25,000 or imprisoned
not II101'0 than two years, or both.
ESEv. 415. AssisTAxc u; TO INTERNATIONAL ORGANIZATI
Whenever it will assist in achieving purposes declared in this Act, the
President is authorized to use funds available under sections 131 and
403 in order to furnish assistance, including by transfer of funds,
directly to the North Atlantic Treaty Organization and the Organiza-
tion for European Economic Cooperation, for a strategic stockpile of
foodstuffs and other supplies, or for other purposes.
ESEc. 416. FACILITATION AND ENCOURAGEMENT Tam:En?The
President, through such officer or commission as he may designate,
shall facilitate and encourage, without cost to the United States except
for administration expenses, the promotion and development of travel
by citizens of the United States to and within countries receiving as-
sistance under this Act and travel by citizens of such countries to the
United States. To this end, under the direction of the President, the
Departments of State and Commerce, the agency primarily responsible
for administering nonmilitary assistance under this Act and such
other agencies of the Government as the President shall deem appro-
priate, in cooperation to the fullest extent practicable with private
enterprise concerned with international travel, shall conduct a study
of barriers to international travel and ways and means of pron:oting
developing, encouraging, and facilitating such travel in the mutual
interests of the United States and countries assisted under this Act.]
SEC. 417. leisn CniwrEaPAirr.---Pursinint to section 11504(6)
of the Economic Cooperation Act of 1948, as amended, the disposition
within Ireland of the unencumbered balance, in the amount of approx-
imately 6,000,000 Irish pounds, of the special account of Irish funds
established under article IV of the Economic Cooperation Agreement
between the United States of America and Ireland, dated June 28,
1948, for the purposes of- -
(1) scholarship exchange between the United states and Ire-
land;
(2) other programs and projects (including the establishment
of an Agricultural Institute) to improve and develop the agricul-
tural production and marketing potential of Ireland and to in-
crease the production and efficiency of Irish industry;
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(3) development programs and projects in aid of the foregoing
objectives, is hereby approved, as provided in the agreement be-
tween the Government of the 'United States of America and the
Government of Ireland, dated June 17, 1954.
SEC. 418. PRESIDENT'S FUND FOR ASIAN ECONOMIC DEVELOP-
MENT.?* * * (Repealed-1956)
SEC. 419. WORLD HEALTH ORGANIZATION.?* * (Repealed-
1957)
[SEC. 419. ATOMS FOR PEACE.?(a) The President is hereby
authorized to furnish from funds made available pursuant to this
section, in addition to other funds available for such purposes, and on
such terms and conditions as he may specify, assistance designed to
promote the peaceful uses of atomic energy abroad. There is hereby
authorized to be appropriated to the President for the fiscal year
1961 not to exceed $3,400,000 to carry out the purposes of this section.
E(b) The United States share of the cost of any research reactor
made available to another government under this section shall not
exceed $350,000.
[(c) In carrying out the purposes of this section, the appropriate
United States departments and agencies shall give full and continuous
publicity through the press, radio, and all other available mediums,
so as to inform the peoples of the participating countries regarding
the assistance, including its purpose, source, and character, furnished
by the United States. Such portions of any research reactor furnished
under this section as may be appropriately die-stamped or labeled as
a product of the United States shall be so stamped or labeled.
[SEc. 420. MALARIA ERADICATION.?The Congress of the United
States, recognizing that the disease of malaria, because of its wide-
spread prevalence, debilitating effects, and heavy toll in human life,
constitutes a major deterrent to the efforts of many peoples to develop
their economy resources and productive capacities and to improve
their living conditions, and further recognizing that it now appears
technically feasible to eradicate this disease, declares it to be the policy
of the United States and the purpose of this section to assist other
peoples in their efforts to eradicate malaria. The President is hereby
authorized to use funds made available under this Act (other than
chapter I and title II of chapter II) to furnish to such nations, organi-
zations, persons or other entities as he may determine, and on such
terms and conditions as he may specify, financial and other assistance
to carry out the purpose of this section: Provided, That this section
shall not affect the authority of the Development Loan Fund to make
loans for such purpose, so long as such loans are made in accordance
with the provisions of title II of chapter II.]
SEC. 421. FOOD AND AGRICULTURE ORGANIZATION.?* * * (Re-
pealed-1957)
[SEc. 421. LOANS TO SMALL FARMERS.?It is the policy of the
United States and the purpose of this section to strengthen the econ-
omies of underdeveloped nations, and in nations where the economy is
essentially rural or based on small villages, to provide assistance de-
signed to improve agricultural methods and techniques, to stimulate
and encourage the development of local programs of self-help and
mutual cooperation, particularly through loans of foreign currencies
for associations of operators of small farms, formed for the purpose
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84 FOREIGN ASSISTANCE ACT OF 1991
of joint action designed to increase or diversify agricultural produc-
tivity. The maximum unpaid balance of loans made to any associa-
tion under this section may not exceed $25,000 at, any one time; and
the aggregate unpaid balance of all loans made under this section may
not exceed $10,000,000 at any one time.
[CnApTua. HI?CONTINGENCY FUND
[Sm. 451. PRESIDENT'S SPECIAL AUTHORITY AND CONTINGENCY
FUND.?(a) Of the funds made available for use under this Act,
not to exceed $150,000,000, in addition to the funds authorized for
use under this subsection by subsection (h) of this section, may be
used in any fiscal year, without regard to the requirements of this
Act or any other Act for which funds are authorized by this Act or
any Act appropriating funds for use under this Act, in furtherance
of any of the purposes of such Acts, when the President determines
that such use is important to the security of the United Saites.
Not to exceed $100,000,000 of the funds available under this subsec-
tion may be expended for any selected persons who are residing in
or escapees from the Soviet Union, Poland, Czechoslovakia, Hungary,
Rumania, Bulgaria, Albania, Lithuania, Latvia, and Estonia, or
the Communist-dominated or Communist-occupied areas of Germany,
or any Communist-dominated or Communist-occupied areas of Asia
and any other countries absorbed by the Soviet Union, either to form
such persons into elements of the military forces supporting the North
Atlantic Treaty Organization or for other purposes when the Presi-
dent determines that such assistance will contribute to the defense of
the North Atlantic area or to the security of the United States.
Certification by the President that he has expended amounts under
tins Act not in excess of $50,000,000, and that it is inadvisable to
specify the nature of such expenditures, shall be deemed a sufficient
voucher for such amounts. Not more than $30,000,000 of the funds
available under this subsection may be allocated to any one nation in
any fiscal year.
[(I)) There is hereby authorized to be appropriated to the Presi-
dent for the fiscal year 1961 not to exceed $150,000,000 for assistance
authorized by this Act, other than by title IT of chapter II, in accord-
ance with the provisions of this Act applicable to the furnishing of
such assistance. $100,000,000 of the funds authorized to be appro-
priated pursuant to this subsection for any fiscal year may be used in
such year in accordance with the provisions of subsection (a) of this
section.
[(c) It is the purpose of this Act to advance the cause of freedom.
The Congress joins with the President of the 'United States in pro-
claiming the hope that the peoples who have been subjected to the
captivity of Communist despotism shall again enjoy the right or self-
determination within a rrairework which will sustain the peace; that
they shall again have the right to choose the form of government under
which they will live, and that sovereign rights of self-governmerr, shall
he restored to them all in accordance with the pledge of the Atlantic
Charter. Funds available under subsection (a) of this section may
be used for programs of information, relief, exchange of persons,
education, and resettlement, to encourage the hopes and aspirations of
peoples who have been enslaved by communism.
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FOREIGN ASSISTANCE ACT OF 19611
[CHAPTER 1V?GENERAL AND ADMINISTRATIVE PROVISIONS
[SEC. 501. TRANSFERABILITY OF FUNDS.?Whenever the President
determines it to be necessary for the purposes of this Act, not to exceed
10 per centum of the funds made available pursuant to any provision
of this Act may be transferred to and consolidated with the funds
made available pursuant to any other provisions of this Act, and
may be used for any of the purposes for which such funds may be used,
except that the total in the provision for the benefit of which the trans-
fer is made shall not be increased by more than 20 per centum of the
amount made available for such provision pursuant to this Act.]
SEC 502. USE OF FOREIGN CURRENCY.?(a) Notwithstanding Sec-
tion 1415 of the Supplemental Appropriation Act, 1953, or any other
provision of law, proceeds of sales made under section 550 of the
Mutual Security Act of 1951, as amended, shall remain available and
shall be used for any purposes of this Act, giving particular regard to
the following purposes?
(1) for providing military assistance to nations or mutual
defense organizations eligible to receive assistance under this Act;
(2) for purchase of goods or services in friendly nations;
(3) for loans, under applicable provisions of this Act, to in-
crease production of goods or services, including strategic mate-
rials, needed in any nation with which an agreement was nego-
tiated, or in other friendly nations, with the authority to use
currencies received in repayment for the purposes stated in this
section or for deposit to the general account of the Treasury of
the United States;
(4) for developing new markets on a mutually beneficial
basis;
(5) for grants-in-aid to increase production for domestic needs
in friendly countries; and
(6) for purchasing materials for United States stockpiles.
(b) Notwithstanding section 1415 of the Supplemental Appropria-
tion Act, 1953, or any other provision of law, local currencies owned
by the United States shall be made available to appropriate commit-
tees of the Congress engaged in carrying out their duties under section
136 of the Legislative Reorganization Act of 1946, as amended, and
to the Joint Committee on Atomic Energy and the Joint Economic
Committee and the Select Committees on Small Business of the
Senate and House of Representatives for their local currency expenses:
Provided, That each member or employee of any such committee
shall make, to the chairman of such committee in accordance with
regulations prescribed by such committee, an itemized report showing
the amounts and dollar equivalent values of each such foreign currency
expended and the amounts of dollar expenditures made from appro-
priated funds in connection with travel outside the United States,
together with the purposes of the expenditure, including lodging,
meals, transportation, and other purposes. Within the first sixty
days that Congress is in session in each calendar year, the chairman
of each such committee shall prepare a consolidated report showing the
total itemized expenditures during the preceding calendar year of the
committee and each subcommittee thereof, and of each member and
employee of such committee or subcommittee, and shall foward such
consolidated report to the Committee on House Administration of
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86 FOREIGN ASSISTANCE ACT OF 1961
the Muse of Representatives (if the committee be a committee of
the lfouse of Representatk-es or a joint committee whose funds are
disbursed by the Clerk of the House) or to the Committee on Appro-
priations of the Senate of the committee be a Senate committee or a
joint committee whose funds are disbursed by the Secretary of the
Senate). Each such report, submitted by each committee shall be
published in the.Congressional Record within ten legislative days after
receipt by the Committee on I rouse Administration of the House or
the Committee on Appropriations of the Senate.
[(el It is the sense or the Congress that prompt and careful con-
sidera hon should be given to participation by the United States in an
internationally financed program which would utilize foreign cur-
rencies available to the I7nited States to preserve the great cultural
monuments of the rimer Nile. Accordingly, the President is re-
quested to submit to the Cong,ress on or before March 1, 19N, his
recommendations concerning such a program.]
[SEc. 503. TERMINATION OF ASSISTANCE.?(a) If the President
determines that the furnishing of assistance to any nation under any
provision of this Act--
[(1) is no longer consistent with the national interest or secu-
rity or the foreign policy of the United States: or
[(2.) would no longer contribute effectively to the purposes
for which such assistance is furnished: or
[(tit is no longer consistent. with the obligations and responsi-
bilities of the United States under the (lather of the United
\Tat ions,
he shall terminate all or part of any assistance furnished pursuant to
this Act. If the President determines that amiv nation which is re-
ceiving assistance under chapter I of this Act is not making its full
contribution to its own defense or to the defense of the area of which
it is a part. he shall terminate all or part of such assistance. Assist-
ance to any nation under any provision of this Act may, unless sooner
terminated by tile President, be terminated by concurrent resolLtion.
Funds made available under this Act shall remain available for twelve
months from the date of termination under this section for the neces-
sary expenses of liquidating assistance programs.
Ulo In anv case in which the President determines that a nation
has hereafter nationalized or expropriated the property of any person
as defined in section 41:i tbi and has failed within six months of such
nationalization or expropriation to take steps determined by the Pres-
ident to be appropriate to discharge its obligations under international
law toward such person. the President shall, unless he determines it to
be inconsistent with the national interest. suspend assistance under
this Act to such nation until he is satisfied that appropriate steps are
bein, taken.
[(c) The President shall include in his recommendations to the Con-
gress for the fiscal year 1961 programs under this Act a specific plan
for each country receiving bilateral 0-rant assistance in the categories
P., ?
of defense support or special assistance whereby, wherever practicable,
such grant assistance shall be progressively reduced and terminated.
[SEc. 504. SMALL BUSINESS. ?(a) Insofar as practicable and to the
maximum extent consistent with the accomplishment of the purposes
of this Act, the President shall assist American small business to
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FOREIGN ASSISTANCE ACT OF 19611 87
participate equitably in the furnishing of commodities and services
financed with funds authorized under chapter II of this Act?
[(1) by causing to be made available to suppliers in the United
States and particularly to small independent enterprises, infor-
mation, as far in advance as possible, with respect to purchases
proposed to be financed with such funds,
E(2) by causing to be made available to prospective purchasers
in the nations receiving assistance under this Act information as
to commodities and services produced by small independent
enterprises in the United States, and
[(3) by providing for additional services to give small business
better opportunities to participate in the furnishing of commodi-
ties and services financed with such funds.
[(b) There shall be an Office of Small Business, headed by a Special
Assistant for Small Business, in such United States Government
agency as the President may direct, to assist in carrying out the pro-
visions of subsection (a) of this section.
[(c) The Secretary of Defense shall assure that there is made avail-
able to suppliers in the United States, and particularly to small inde-
pendent enterprises information with respect to purchases made by
the Department of Defense pursuant to chapter I, such information to
be furnished as far in advance as possible.]
(d) * * * (Repealed-1960)
[SEC. 505. LOAN ASSISTANCE AND SALES.?(a) Except as other-
wise specifically provided in this Act, assistance under this Act
may be furnished on a grant basis or on such terms, including, cash,
credit, or other terms of repayment (including repayment in foreign
currencies or by transfer to the United States of materials required for
stockpiling or other purposes) as may be determined to be best suited
to the achievement of the purposes of this Act and shall emphasize
loans rather than grants wherever possible. Commodities, equipment,
and materials transferred to the United States as repayment may be
used for assistance authorized by this Act, other than title II of
chapter II, in accordance with the provisions of this Act applicable
to the furnishing of such assistance. Whenever commodities, equip-
ment, materials, or services are sold for foreign currencies the Presi-
dent, notwithstanding section 1415 of the Supplemental Appro-
priation Act, 1953, or any other provision of law, may use or enter
into arrangements with friendly nations or organizations of nations to
use such currencies for the purposes for which the funds providing
the commodities, equipment, materials, or services which generated
the currencies were appropriated.
[(b) Funds for the purpose of furnishing assistance on terms of
repayment may be allocated to the Export-Import Bank of Wash-
ington, which may, notwithstanding the provisions of the Export-
Import Bank Act of 1945 (59 Stat. 526), as amended, make and
administer the credit on such terms. Credits made by the Export-
Import Bank of Washington with funds so allocated to it shall not be
considered in determining whether the Bank has outstanding at any
one time loans and guaranties to the extent of the limitation imposed
by section 7 of the Export-Import Bank Act of 1945 (59 Stat. 529), as
amended. United States dollars received in repayment of principal
and payment of interest on any loan made under this section shall be
deposited in miscellaneous receipts of the Treasury. Foreign cur-
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FOREIGN ASSISTANCE ACT OF 1961
rencies received in repayment of principal and payment of interest
on any such loan which are in excess of the requirements as deter-
mined from time to time by the Secretary of State for purposes au-
thorized in section 32(b)(2) of the Surplus Property Act of 1944, as
amended (50 App. U.S.C. 1641 (b)), may be sold by the Secretary of
the. Treasury to United States Government agencies for payment of
their obligations abroad and the United States dollars received as re-
imbursement shall also be deposited into miscellaneous receipts of the
Treasury. Foreign currencies so received which are in excess of the
requirements of the United States in the payment of its obligations
abroad, as such requirements may be determined from time to time
by the President, shall be credited to and be available for the author-
ized purposes of the Development Loan Fund in such amounts as may
be specified from time to time in appropriation Acts. Amounts re-
ceived in repayment of principal and interest, on any credits made
under paragraph 111(c)(2) of the Economic Cooperation Act of
1948, as amended, shall be deposited into miscellaneous receipts of
the Treasury, except that, to the extent required for such purpose,
amounts received in repayment of principal and interest on any credits
made out of funds realized from the sale of notes heretofore author-
ized to be issued for the purpose of financing assistance on a credit
basis under paragraph 111(c)(2) of the Economic Cooperation Act
of 1948, as amended, shall be deposited into the Treasury for the pur-
pose of the retirement of such notes.
[Sic. 506. PATENTS AND TECHNICAL INFORMATION.?(a) As used
in this section?
[(1) the term "invention" means an inventory or discovery
covered by a patent issued by the United States; and
[(2) the term "information" means information originated by
or peculiarly within the knowledge of the owner thereof and
those in privity with him, which is not available to the public
and is subject to protection as property under recognized legal
principles.
[(b) Whenever, in connection with the furnishing of any assistance
in furtherance of the purposes of this Act?
[(1) use within the United States, without authorization by
the owner, shall be made of an invention; or
[(2) damage to the owner shall result from the disclosure of
information by reason of acts of the United States or its officers
or employees,
the exclusive remedy of the owner of such invention or information
shall be by suit against the United States in the Court of Claims or m
the District Court of the United States for the district in which such
owner is a resident for reasonable and entire compensation for un-
authorized use or disclosure. In any such suit the United States may
avail itself of any and all defenses, general or special, that might be
pleaded by any defendant in a like action.
[(c) Before such suit against the United States has been instituted,
the head of the appropriate United States Government agency, which
has furnished any assistance in furtherance of the purposes of this
Act, is authorized and empowered to enter into an agreement with the
claimant, in full-settlement and compromise of any claim against the
United States hereunder.
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FOREIGN ASSISTANCE ACT OF 19611 89
[(d) The provisions of the last sentence of section 1498 of title 28
of the United States Code shall apply to inventions and information
covered by this section.
[(e) Except as otherwise provided by law, no recovery shall be had
for any infringement of a patent committed more than six years prior
to the filing of the complaint or counterclaim for infringement in the
action, except that the period between the date of receipt by the
Government of a written claim under subsection (c) above for com-
pensation for infringement of a patent and the date of mailing by the
Government of a notice to the claimant that his claim has been denied
shall not be counted as part of the six years, unless suit is brought
before the last-mentioned date.
[SEc. 507. AVAILABILITY OF FUNDS.?Except as otherwise provided
in this Act, funds shall be available to carry out the provisions of this
Act (other than sections 414 and 416) as authorized and appropriated
to the President each fiscal year.
[SEc. 508. LIMITATION ON FUNDS FOR PROPAGANDA.?None of the
funds herein authorized to be appropriated nor any counterpart funds
shall be used to pay for personal services or printing, or for other
expenses of the dissemination within the United States of general
propaganda in support of the mutual security program, or to pay
the travel or other expenses outside the United States of any citizen
or group of citizens of the United States for the purpose of publicizing
such program within the United States.
[SEC. 509. SHIPPING ON UNITED STATES VESSELS.?The ocean
transportation between foreign countries of commodities, materials,
and equipment procured out of local currency funds made available
or derived from funds made available under this Act or the Agricul-
tural Trade Development and Assistance Act of 1954, as amended
(7 U.S.C. 1691 and the following), shall not be governed by the
provisions of section 901(b) of the Merchant Marine Act of 1936,
or any other law relating to the ocean transportation of commodities,
materials, and equipment on United States flag vessels. Sales of
fresh fruit and the products thereof under this Act shall be exempt
from the requirements of the cargo preference laws (Public Resolution
17, Seventy-third Congress, and section 901(b) of the Merchant
Marine Act, 1936, as amended).
[SEc. 510. PURCHASE OF COMMODITIES.?No funds made available
under title I of chapter II of this Act shall be used for the purchase in
bulk of any commodities at prices higher than the market price pre-
vailing in the United States at the time of purchase adjusted for dif-
ferences in the cost of transportation to destination, quality, and
terms of payment. A bulk purchase within the meaning of this
section does not include the purchase of raw cotton in bales. Funds
made available under title I or II of chapter II of this Act may be used
for the procurement of commodities outside the United States unless
the President determines that such procurement will result in adverse
effects upon the economy of the United States, with special reference to
any areas of labor surplus, or upon the industrial mobilization base or
to the net position of the United States in its balance of trade with the
rest of the world, which outweigh the economic advantages to the
United States of less costly procurement abroad. In providing for the
procurement of any surplus agricultural commodity for transfer by
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grant under this Act to any recipient nation in accordance with the re-
quirements of such nation, the President shall, insofar as practicable
and where in furtherance of the purposes of this Act, authorize the pro-
curement of such surplus agricultural commodity only within the
-United States except to the extent that any such surplus agricultural
commodity is not available in the United States in sufficient quantities
to supply the requirements of the nations receiving assistance under
this Act.
[SEC. 511. RETENTION AND RETURN OF EQUIPMENT.?(a) No equip-
ment or materials may be transferred under chapter I or title I of
chapter II out of military stocks if the Secretary of Defense, after con-
sultation with the Joint. Chiefs of Staff, determines that such transfer
would be detrimental to the national security of the United States, or
that such equipment or materials are needed by the reserve compo-
nents of the Armed Forces to meet their training requirements.
[(h) Any equipment, materials, or commodities procured to carry
out this Act shall be retained by, or, upon reimbursement, transferred
to and for the use of, such United States Government agency as the
President may determine in lieu of being disposed of to a foreign na-
tion or international organization whenever in the judgment oF the
President the best interests of the United States will be served thereby,
or whenever such retention is called for by concurrent resolution. Any
commodities so retained may be disposed of without regard to pro-
visions of law relating to the disposal of Government-owned property,
when necessary to prevent spoilage or wastage of such commodities or
to conserve the usefulness thereof. Funds realized from any such dis-
posal or transfer shall revert, to the respective appropriation or ap-
propriations out of which funds were expended for the procurement of
such equipment, materials, or commodities or to appropriations cur-
rently available for such procurement.
[(c) The President shall make appropriate arrangements with each
nation receiving equipment or materials on a grant basis under
chapter I for the return to the United States (1) for salvage or scrap,
or (2) for such other disposition as the President shall deem to be in
the interest of mutual security, of any such equipment or materials
which are no longer required for the purposes for which originally
made available.
[SEC. 512. PENAL PnovisioN.?Whoever offers Or gives to anyone
who is or in the preceding two years has been an employee or officer
of the United States any commission, payment, or gift, in connection
with the procurement Of equipment, materials, commodities, or serv-
ices under this Act in connection with which procurement said officer,
employee, former officer or former employee is or was employed or
performed duty or took any action during such employment, and
whoever, being or having been an employee or officer of the United
States in the preceding two years, solicits, accepts, or offers to accept.
any commission, payment, or gift in connection with the procurement
of equipment, materials, commodities, or services under this Act in
connection with which procurement said officer, employee, former of-
ficer or former employee is or was employed or performed duty or
took any action during such employment, shall upon conviction there-
of be subject to a fine not to exceed $10,000 or imprisonment for not to
exceed three years, or both: Provided, That this section shall not
apply to persons appointed pursuant to sections 308 or 530(a) of
this Act.
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(SEC. 513. NOTICE TO LEGISLATIVE COMMITTEES.?When any trans-
fer is made under section 501, or any other action is taken under this
Act which will result in furnishing assistance of a kind, for a purpose,
or to an area, substantially different from that included in the presen-
tation to the Congress during its consideration of this Act or Acts
appropriating funds pursuant to authorizations contained in this Act
or which will result in expenditures greater by 50 per centum or more
than the proposed expenditures included in such presentation for the
program concerned, the President or such officer as he may designate
shall promptly notify the Committee on Foreign Relations and, when
military assistance is involved, the Committee on Armed Services of
the Senate, and the Speaker of the House of Representatives, stating
the justification for such changes. Notice shall also be given to the
Committee on Foreign Relations of the Senate and the Speaker of the
House of Representatives of any determination under the first sen-
tence of section 451 (except with respect to unvouchered funds) and
under the last clause of the second sentence of section 404, and copies
of any certification as to loyalty under section 531 shall be filed with
them.]
SEC. 514. INTERNATIONAL EDUCATIONAL EXCHANGE ACTIVITIES.?
Foreign currencies or credits owed to or owned by the United States,
where arising from this Act or otherwise, shall, upon a request from
the Secretary of State certifying that such funds are required for the
purpose of international educational exchange activities under pro-
grams authorized by section 32(b)(2) of the Surplus Property Act
of 1944, as amended, be reserved by the Secretary of the Treasury
for sale to the Department of State for such activities on the basis of
the dollar value at the time of the reservation.
(SEC. 515. AUTHORIZATION FOR GRANT OF CONTRACT AUTHORITY.?
Provisions in this Act authorizing the appropriation of funds shall
be construed to authorize the granting in any appropriation Act of
authority to enter into contracts, within the amounts so authorized
to be appropriated, creating obligations in advance of appropriations.
(SEC. 516. PROHIBITION AGAINST DEBT RETIREMENT.?NODO of the
funds made available under this Act nor any of the counterpart funds
generated as a result of assistance under this Act or any other Act
shall be used to make payments on account of the principal or interest
on any debt of any foreign government or on any loan made to such
government by any other foreign government; nor shall any of these
funds be expended for any purpose for which funds have been with-
drawn by any recipient country to make payment on such debts:
Promded, That to the extent that funds have been borrowed by any
foreign government in order to make a deposit of counterpart and
such deposit is in excess of the amount that would be required to be
deposited pursuant to the formula prescribed by section 142(b) of
this Act, such counterpart may be used in such country for any agreed
purpose consistent with the provisions of this Act.
(SEC. 517. COMPLETION OF PLANS AND COST ESTIMATES.?(a) After
June 30, 1958, no agreement or grant which constitutes an obliga-
tion of the United States in excess of $100,000 under section 1311 of
the Supplemental Appropriation Act, 1955, shall be made for any
assistance authorized under title I, II, or III (except section 306) of
chapter II, or section 400(a)?
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92 FOREIGN ASSISTANCE ACT OF 1961
[(1) if such agreement or grant requires substantive technical
or financial planning, until engineering, financial, and other plans
necessary to carry out such assistance, and a reasonably firm esti-
mate of the cost to the United States of providing such assistance,
have been completed; and
[(2) if such agreement or grant requires legislative action with-
in the recipient country, unless such legislative action may reason-
ably be anticipated to be completed within one year from the date
the agreement or grant is made.
This section shall not apply to any assistance furnished for th.e sole
purpose of preparation of engineering, financial, and other plans. To
the maximum extent practicable, all contracts for construction outside
the United States made in connection with any agreement or grant
subject to-this section, except any agreement for assistance authorized
under title II of chapter II, shall be made on a competitive basis.
[(b) Plans required under this section for any water or related
land resource construction project or program shall include a computa-
tion of benefits and costs made insofar as practicable in accordance
with the procedures set forth in Circular A-47 of the Bureau of the
Budget with respect to such computations.
[SEC. 521. DELEGATION OF AUTHORITY BY THE PRESIDENT.-(1) Ex-
cept as provided in subsection (b) and section 413 (b) (4), the Presi-
dent may exercise any power or authority conferred on him by this
Act through such agency or officer of the United States as he shall
direct, and the head of such agency or such officer may from time to
tune promulgate such rules and regulations as may be necessary and
proper to carry out functions under this Act and may delegate au-
thority to perform any of such functions to his subordinates acting
under his direction.
[(b) After June 30, 1955, the President shall exercise the powers
conferred upon him under title III of chapter II of this Act through
the Secretary of State.
[(c) The President shall continue to exercise the powers conferred
on him under title I of chapter II, relating to defense support, only
through the Secretary of State and his subordinates.
[SEc. 522 . ALLOCATION AND REIMBURSEMENT AMONG AGENCIES.-
(a) The President may allocate or transfer to any United States
Government. agency any part of any funds available for carrying out
the purposes of this Act, including any advance to the United States
by any nation or international organization for the procurement
of equipment or materials or services. Such funds shall be available
for obligation and expenditure for the purposes for which authorized,
in accordance with authority granted in this Act. or under authority
governing the activities of the Government agencies to which such
funds are allocated or transferred. Funds allocated to the Depart-
ment of Defense shall be governed as to reimbursement by the pro-
cedures of subsection (c) of this section.
[(b) Any officer of the United States performing functions under
this Act may utilize the services and facilities of, or procure commodi-
ties from, any United States Government agency as the President
shall direct, or with the consent of the head of such agency, and funds
allocated pursuant to this subsection to any such agency may be estab-
lished in separate appropriation accounts on the books of the Treasury.
The Administrator of General Services is authorized to maintain in a
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FOREIGN ASKSTANCE ACT OF I 9611 93
separate consolidated account, which shall be free from fiscal year
limitations, payments received by the General Services Administration
for administrative surcharges in connection with procurement services
performed by the General Services Administration in furtherance
of the purposes of this Act. Such payments shall be in amounts
mutually acceptable to the General Services Administration and the
United States Government agency which finances the procurement,
and these amounts shall be available for administrative expenses in-
curred by the General Services Administration in performing such
procurement services.
[(c) Reimbursement shall be made to any United States Govern-
ment agency, from funds available to carry out chapter I of this Act,
for any assistance furnished under that chapter from, by, or through
such agency. Such reimbursement shall be in an amount equal to the
value (as defined in section 545) of the equipment and materials, serv-
ices (other than salaries of members of the Armed Forces of the
United States), or other assistance furnished, plus expenses arising
from or incident to operations under that chapter. The amount of
any such reimbursement shall be credited as reimbursable receipts to
current applicable appropriations, funds, or accounts of such agency
and shall be available for, and under the authority applicable to, the pur-
poses for which such appropriations, funds, or accounts are authorized
to be used, including the procurement of equipment and materials or
services, required by such agency, in the same general category as those
furnished by it, or authorized to be procured by it and expenses arising
from and incident to such procurement.
[(d) In the case of any commodity, service, or facility procured
from any United States Government agency under any provision of
this Act other than chapter I, reimbursement or payment shall be made
to such agency from funds available to carry out such provision. Such
reimbursement or payment shall be at replacement cost, or, if required
by law, at actual cost, or at any other price authorized by law and
agreed to by owning or disposal agency. The amount of any such
reimbursement or payment shall be credited to current applicable
appropriations, funds, or accounts from which there may be procured
replacements of similar commodities, services, or facilities, except that
where such appropriations, funds, or accounts are not reimbursable
except by reason of this subsection, and when the owning agency de-
termines that such replacement is not necessary, any funds received in
payment therefor shall be covered into the Treasury as miscellaneous
receipts.
[(e) In furnishing assistance under this Act and in making surplus
agricultural commodities available under section 402 accounts may
be established on the books of any United State Government agency
or on terms and conditions approved by the Secretary of the Treasury,
in banking institutions in the United States, against which (i) letters
of commitment may be issued which shall constitute obligations
of the United States, and moneys due or to become due under such
letters of commitment shall be assignable under the Assignment of
Claims Act of 1940, as amended, and (ii) withdrawals may be made
by recipient nations or agencies, organizations or persons upon pres-
entation of contracts, invoices, or other appropriate documentation.
Expenditure of funds which have been made available through ac-
counts so established shall be accounted for on standard documen-
72746 -61-
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94 FOREIGN ASSISTANCE kur OF 1981
tation required for expenditure of Government funds: Provided, That
such. expenditures for commodities or services procured outside the
continental limits of the United States may be accounted for ex-
clusively on such certification as may be prescribed in regulations
approved by the Comptroller General of the United States.
[(f) Any. appropriation made to carry out the provisions of this
Act may initially be charged, within the limits of available funds, to
finance expenses for which funds are available in other appropriations
made under this Act: Provided, That as of the end of the same fiscal
year such expenses shall be finally charged to applicable appropria-
tions with proper credit to the appropriations initially utilized for
financing purposes.
[Sic. 523. COORDINATION WITH FOREIGN POLICY.?(11) Nothing
contained in this Act shall be construed to infringe upon the powers
or functions of the Secretary of State.
((b) The President shall prescribe appropriate procedures to assure
coordination among representatives of the United States Government
in each country, under the leadership of the Chief of the United States
Diplomatic Mission. The chief of the diplomatic mission shall
make sure that recommendations of such representatives pertaining
to military assistance are coordinated with political and economic
considerations, and his comments shall accompany such recommenda-
tions if he so desires.
[(c) Under the direction of the President, the Secretary of State
shall be responsible for the continuous supervision and if,eneral direc-
tion of the assistance programs authorized by this Act, including but
not limited to determining whether there shall be a military assistance
program for a country and the value thereof, to the end that such pro-
grams are effectively integrated both at home and abroad and the
foreign policy of the United States is best served thereby.]
(d) Whenever the President determines that the [achievement of
United States foreign policy objectives] prevention of improper cur-
rency transactions in a given country requires it, he may direct the
chief of the United States diplomatic mission there to issue regulations
applicable to members of the Armed Forces and officers and employees
of the United States Government, and to contractors with the 1 nited
States Government- and their employees governing the extent to which
their pay and allowances received and to be used in that counw,L shall
be paid in local currency. Notwithstanding any other law, I lilted
States Government agencies are authorized and directed to comply
with such regulations.
(SEC. 524. THE SECRETARY OF DEFENSE.?(a) In the Case of aid
under chapter I of this Act, the Secretary of Defense shall have pri-
mary responsibility for?
[(1) the determination of military end-item requirements;
[(2) the procurement of military equipment in a manner which
permits its integration with service programs;
E(3) the supervision of end-item use by the recipient countries;
(4) the supervision of the training of foreign military per-
sonnel;
[(5) the movement and delivery of military end-items; and
[(6) within the Department of Defense, the performance of
any other functions with respect to the furnishing of military
assistance.
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[(b) The establishment of priorities in the procurement, delivery
and allocation of military equipment shall be determined by the
Secretary of Defense.
[SEC. 525. FOREIGN OPERATIONS ADMINISTRATION.?The President
may transfer to any agency or officer of the United States, and may
modify or abolish, any function, office, or entity of the Foreign Opera-
tions Administration (including any function, office or entity thereof
transferred to any other agency) or any officer or employee thereof,
and may transfer such personnel, property, records, and funds as may
be necessary incident thereto: Provided, That such authority conferred
by this sentence shall be exercised in accordance with applicable laws
and regulations relating to the Civil Service and Veterans Preference.
[SEc. 526. MISSIONS AND STAFFS ABROAD.?The President may
maintain special missions or staffs abroad in such nations and for
such periods of time as may be necessary to carry out this Act. Such
special mission or staff shall be under the direction of a chief. Tho
chief and his deputy shall be appointed by the President and may,
notwithstanding any other law, be removed by the President at his
discretion. The chief shall be entitled to receive (1) in cases ap-
proved by the President, the same compensation and allowances as a
chief of mission, class 3, or a chief of mission, class 4, within the
meaning of the Foreign Service Act of 1946 (22 U.S.C. 801), or (2)
compensation and allowances in accordance with section 527(c) of this
Act, as the President shall determine to be appropriate. If a For-
eign Service Officer shall be appointed by the President to a position
under this section, the period of his service in such capacity shall
be considered as constituting an assignment for duty within the mean-
ing of section 571 of the Foreign Service Act of 1946, as amended,
and such person shall not, by virtue of his acceptance of such an as-
signment, lose his status as a Foreign Service Officer.
(SEC. 527. EMPLOYMENT OF PERSONNEL.?(a) Any United States
Government agency performing functions under this Act is author-
ized to employ such personnel as the President deems necessary to
carry out the provisions and purposes of this Act.
[(b) Of the personnel employed in the United States on programs
authorized by this Act, not to exceed seventy may be compensated
without regard to the provisions of the Classification Act of 1949, as
amended, of whom not to exceed forty-five may be compensated
at rates higher than those provided for grade 15 of the general sched-
ule established by the Classification Act of 1949, as amended, and of
these, not to exceed fifteen may be compensated at a rate in excess of
the highest rate provided for grades of such general schedule but not
in excess of $19,000 per annum. Such positions shall be in addition
to those authorized by law to be filled by Presidential appointment,
and in addition to the number authorized by section 505 of the Classi-
fication Act of 1949, as amended. One of the offices established by
section 1(d) of Reorganization Plan Numbered 7 of 1953 may not-
withstanding the provisions of any other law be compensated at a
rate not in excess of $20,000 per annum.
[(c) For the purpose of performing functions under this Act out-
side the United States, the President may?
[(1) employ or assign persons, or authorize the employment or
assignment of officers or employees of other United States Gov-
ernment agencies, who shall receive compensation at any of the
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rates provided for the Foreign Service Reserve and Staff by the
Foreign Service Act of 1946, fIS amended (22 U.S.C. 801), together
with allowances and benefits established thereunder, including,
in all cases, post differentials prescribed under section 433 of
the Foreign Service Act., and persons so employed or assigned
shall be entitled, except, to the extent that the President may
specify otherwise in cases in which the period of the employment
or assignment exceeds thirty months, to the same benefits as are
provided by section 528 of the Foreign Service Act for persons
appointed to the Foreign Service Reserve and, except for policy-
making officials, the provisions of section 1005 of the Foreign
Service Act shall apply in the case of such persons; and
[(2) utilize such authority, including authority to appoin; and
assign personnel for the duration of operations under this Act,
contained in the Foreign Service Act of 1946, as amended (22
U.S.C. 801), as the President deems necessary to carry out func-
tions under this Act. Such provisions of the Foreign Service
Act as the President deems appropriate shall apply to personnel
appointed or assigned under this paragraph, including, in all
cases, the provisions of sections 443 and 528 of that Act: Pro-
vided, however, That the President may by regulation make ex-
ceptions to the application of section 528 in cases in which the
period of the appointment or assignment exceeds thirty months:
Provided further, That Foreign Service Reserve officers ap-
pointed or assigned pursuant to this paragraph shall receive in-
class promotions in accordance with such regulations as the Presi-
dent may prescribe.
Ed) For the purpose of performing functions under this Act out-
side the United States. the Secretary of State may appoint for the
duration of operations under this Act alien clerks and employees in
accordance with applicable provisions of the Foreign Service Act of
1946, as amended (22 801).
((e) Notwithstanding the provisions of title 10, United States
Code, section 712, or any oilier law containing similar authority,
officers and employees of the United States performing functions
under this Act shall not accept from any foreign nation any compen-
sation or other benefits. Arrangements may he imule by the Pres:den t
with such nations for reimbursement to the United States or other
sharing of the cost of performing such functions.
ESEc. 528. DETAIL OP PERSONNEL TO FOREIGN GOVERNMENTS.--
(a) Whenever the President deterniines it to be consistent with and in
furtherance of the purposes of this Act, the head of any United States
Government agency is authorized to detail or assign. any officer or
employee of his agency to any office or position to winch DO compen-
sation is attached with any foreign government or foreign govern-
ment agency: Proi4cird, That such acceptance of office shall in no
case involve the taking of an oath of allegiance to another government.
[(b) Any such officer or employee, while so assigned or detailed,
shall be considered, for the purpose of preserving his privileges, rights,
seniority, and other benefits as such, an officer or employee of the Gov-
ernment of the United States and of the Government agency from
which assigned or detailed, and he shall continue to receive compensa-
tion, allowances, and benefits from fui ds available to that agency or
made available to that agency out of funds authorized under this Act.
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[SEC. 529. DETAIL OF PERSONNEL TO INTERNATIONAL ORGANI-
ZATIONS.?(a) Whenever the President determines it to be consistent
with and in furtherance of the purposes of this Act, the head of any
United States Government agency is authorized to detail, assign, or
otherwise make available to any international organization any officer
or employee of his agency to serve with or as a member of the interna-
tional staff of such organization, or to render any technical, scientific
or professional advice or service to or in cooperation with such or-
ganization.
[(b) Any such officer or employee, while so assigned or detailed,
shall be considered, for the purpose of preserving his allowances, privi-
leges, rights, seniority and other benefits as such, an officer or em-
ployee of the Government of the United States and of the Govern-
ment agency from which detailed or assigned, and he shall continue
to receive compensation, allowances, and benefits from funds available
to that agency or made available to that agency out of funds author-
ized under this Act. He may also receive, under such regulations as
the President may prescribe, representation allowances similar to
those allowed under section 901 of the Foreign Service Act of 1946,
as amended (22 U.S.C. 801). The authorization of such allowances
and other benefits and the payment thereof out of any appropriations
available therefor shall be considered as meeting all the requirements
of section 1765 of the Revised Statutes.
[(c) Details or assignments may be made under this section?
[(1) without reimbursement to the United States by the inter-
national organization;
[(2) upon agreement by the international organization to reim-
burse the United States for compensation, travel expenses, and
allowances, or any part thereof payable to such officer or em-
ployee during the period of assignment or detail in accordance
with subsection (b) of this section; and such reimbursement shall
be credited to the appropriation, fund, or account utilized for pay-
ing such compensation, travel expenses, or allowances, or to the
appropriation, fund, or account currently available for such
purposes;
[(3) upon an advance of funds, property, or services to the
United States accepted with the approval of the President for
specified uses in furtherance of the purposes of this Act; and
funds so advanced may be established as a separate fund in the
Treasury of the United States, to be available for the specified
uses, and to be used for reimbursement of appropriations or direct
expenditure subject to the provisions of this Act, any unexpended
balance of such account to be returned to the international organi-
zation; or
[(4) subject to the receipt by the United States of a credit to be
applied against the payment by the United States of its share of
the expenses of the international organization to which the officer
or employee is detailed, such credit to be based upon the compen-
sation, travel expenses and allowances, or any part thereof, pay-
able to such officer or employee during the period of assignment or
detail in accordance with subsection (b) of this section.
[Snc. 530. EXPERTS AND CONSULTANTS OR ORGANIZATIONS THERE-
OF.?(a) Experts and consultants or organizations thereof, as author-
ized by section 15 of the Act of August 2, 1946 (5 U.S.C. 55a), may be
72740-61---8
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98 FOREIGN ASSISTANCE ACT OF 1961
employed by any United States Government agency for the perform-
ance of functions under this Act, and individuals so employed may
be compensated at rates not in excess of $75 per diem, and while away
from their homes or regular places of business, they may be paid ac-
tual travel expenses and per diem in lieu of subsistence and other ex-
penses at a. rate not to exceed $10 or at. the applicable rate prescribed in
the Standardized Government, Travel Regulations, as amended from
time to time, whichever is higher, while so employed within the
United States and at the applicable rate prescribed in the Standard-
ized Government, Travel Regulations (Foreign Areas), while so em-
ployed outside the United States: Provided, That contracts for
such employment with such organizations may be renewed annually.
[(I)) Persons of outstanding experience and ability may be employed
without compensation by any United States Government agency for
the performance of functions under this Act iii accordance with the
provisions of section 710(b) of the Defense Production Act of 1950,
as amended (50 U.S.C. App. 2160), and regulations issued there-
under
[Six. 531. SECURITY CLEARANCE,?TIP standards and procedures
set forth in Executive Order Numbered 10450, as amended or supple-
mented, shall apply to the employment under this Act by any agency
administering nonmilitary assistance of any citizen or resident of the
United States.
[SEC. 532. EXEMPTION OF PERSONNEL FROM CERTAIN FEDERAL
LAws.?(a) Service of an individual as a. member of the Board estab-
lished pursuant. 10 section 308 of this ..ket or as an expert or consultant
under section 530(a) shall not be considered as service or emplopnent
bringing such individual within the provisions of title 18, U.S.C.,
section 281, 283 or 284, or of section 190 of the Revised Statutes (5
U.S.C. 99), or of any other Federal law imposing restrictions, require-
ments or penalties in relation to the employment of persons, the
performance of services, or the payment or receipt of compensation
in connection with any claim, proceeding, or matter involving the
United States, except insofar as such provisions of law may prohibit
any such individual from receiving compensation in respect of any
particular matter in which such individual was directly ins,-olved in
the performance of such service; nor shall such service be considered
as employment or holding of office or position bringing such individual
within the provisions of section 6 of the Act of May 22, 1920, as
amended (5 U.S.C. 715), section 212 of the Act of u n e 30, 1932,
as amended (5 U.S.C. 59a), or any other Federal law limiting the
reemployment of retired officers or employees or governing the simul-
taneous receipt of compensation and retired pay or annuities. Con-
tracts for the employment of retired military personnel with specialized
i
research and development experience, not to exceed ten n number,
as experts or consultants under section 530(a), may be renewed
annually, notwithstanding section 15 of the Act of August 2, 1946
(5 U.S.C. 55a).
[(b) Notwithstanding section 2 of the Act of July 31, 1894 (5 U.S.C.
62), which prohibits certain retired officers from holding certain office,
any retired officer of any of the services mentioned in the Career
Compensation Act of 1949 may hold any office or appointment under
this Act or the Mutual Defense Assistance Control Act of 1951, but
the compensation of any such retired officer shall be subject to the,
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FOREIGN ASSISTANCE ACT OF 1 9 6 1, 99
provisions of the Act of June 30, 1932 (5 U.S.C. 59a), which does not
permit retired pay to be added to the compensation received as a
civilian officer
[SEC. 533. WAIVERS OF CERTAIN FEDERAL LAWS.?Whenever the
President determines it to be in furtherance of purposes declared in
this Act, the functions authorized under this Act may be performed
without regard to such provisions of law (other than the Renegotia-
tion Act of 1951, as amended) regulating the making, performance,
amendment, or modification of contracts and the expenditure of
Government funds as the President may specify.]
SEC. 533A. INSPECTOR GENERAL AND COMPTROLLER.?(a) There
is hereby established in the Department of State an office to be known
as the "Office of the Inspector General and Comptroller", which shall
be headed by an officer designated as the "Inspector General and
Comptroller", whose salary shall be fixed at the annual rate of $19,000,
and who shall be appointed by the Secretary of State and be responsi-
ble to an Under Secretary of State designated for such purpose by the
Secretary of State. In addition, there shall be a Deputy Inspector
General and Comptroller, whose salary shall not exceed the maximum
rate provided under the General Schedule of the Classification Act of
1949, as amended, and such other personnel as may be required to
carry out the functions vested in the Inspector General and Comp-
troller by or pursuant to this section.
(b) There are hereby transferred to the Inspector General and
Comptroller all functions, powers, and duties of the Office of Evalua-
tion of the International Cooperation Administration, and so much of
the functions, powers, and duties of the Office of Personnel Security
and Integrity as relate to investigations of improper activities in
connection with programs under the International Cooperation
Administration.
(c) The Inspector General and Comptroller shall have the follow-
ing duties, in addition to those duties transferred to him under sub-
section (b) of this section:
(1) Establishing or reviewing and approving a system of fi-
nancial controls over programs of assistance authorized by this
Act to insure compliance with applicable laws and regulations;
(2) Advising and consulting with the Secretary of Defense
or his delegate with respect to the controls, standards, and pro-
cedures established or approved under this section insofar as
such controls, standards, and procedures relate to assistance fur-
nished under chapter I of this Act;
(3) Establishing or reviewing and approving policies and
standards providing for extensive internal audits of programs of
assistance authorized by this Act;
(4) Reviewing and approving internal audit programs under
this section, and coordinating such programs with the appropriate
officials of other Government departments in order to insure
maximum audit coverage and to avoid duplication of effort;
(5) Reviewing audit findings and recommendations of operat-
hig agencies and the action taken thereon, and making recom-
mendations with respect thereto to the Under Secretary of State
and other appropriate officials;
(6) Conducting or requiring the conduct of such special audits
as in his judgment may be required in individual cases, and of
inspections with respect to end-item use in foreign countries;
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100 FOREIGN ASSISTANCE ACT OF 1961
(7) Establishing or reviewing, and approving tt system of fi-
nancial and statistical reporting with respect to all programs of
assistance authorized by this Act;
(s) Advising the Under Secretary of State and other appro-
priate officials on fiscal and budgetary aspects of proposed pro-
grams of assistance authorized by this Act;
(9) 'oordinating and cooperating with the General Account-
ing Office in carrying out his duties, to the extent that such duties
are within areas of responsibility of the General Accounting
Office; and.
001 Carrying, out such other duties as may be vested in him
by the Under Secretary of State.
(d) Expenses of the Office of the Inspector General and Comp-
troller with respect to programs under this Act shall be charged to
the appropriations made to carry out such programs: Provided,
That all documents, papers, communications, audits, reviews, findings,
recommendations, reports, and other material which relate 1.o the
operation or activities of the Office of Inspector General and Comp-
troller shall be furnished to the General Accounting Office and to
any committee of the Congress, or any duly authorized subcommittee
thereof, charged with considering legislation or appropriation for, or
exnenditures of, such Office, upon request of the General Accounting
Office or such committee or subcommittee as the case may he.
[SEc. 534. REronTs.--(a) The President, from time to time while
funds appropriated for the purpose of this Act continue to be available
for obligation, shall transmit to the Congress reports covering each
fiscal year of operations, in furtherance of the purposes of this Act,
except information the disclosure of which he deems incompatible with
the security of the United States. Reports provided for under this
section shall be transmitted to the Secretary of the Senate or th.3 Clerk
of the House of Representatives, as the case may be, if the Seaate or
the House of Representatives, as the case may be, is not in session.
Such reports shall include detailed information on the implementation
of sections 504, 202, 400, 416, 413(b), and 418 of this Art.
[(b) All documents, papers, communications, audits, reviews, find-
ings, recommendations, reports, and other material which relate to
the operation or activities of the International Cooperation Adminis-
tration shall be furnished to the General Accounting Office and to any
committee of the Congress, or any duly authorized subcommittee
thereof, charged with considering legislation or appropria,Con for.
or expenditures of, such Administration, upon request of the Genera!
Accounting Office or such committee or subcommittee as the rase
may be.
[Sec. 535. CoOpEltAlloN WITH NATIoxs AND INTERNATI(,NAL On-
GANIZATIONS.?(a) The President is authorized to request die coop-
eration of or the use of tile services and fa(7ilities of the United
Nations, its organs anti specialized agencies, or other international
organizations, in carrying out the purposes of this Act, and may mak2,
payments by advancements or reimbursements, for such purposes, out
of funds made available for the purposes of this Act, as may lie nocel--
sarv therefor, to the extent that special compensation is re-
quired for such :-,ervices and facilities: Pro,,;,/c,l, That nothing in this
Seell011 shall be construed to authorize the delegation to any interna-
tional or foreign organization or agency of authority to decide the
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FOREIGN ASSISTANCE ACT OF 1961 101
method of furnishing assistance under this Act to any country or
the amount thereof.
[(b) Whenever the President determines it to be consistent with
and in furtherance of the purposes and within the limitations of
this Act, United States Government agencies, on request of interna-
tional organizations, are authorized to furnish supplies, materials, and
services, and on request of free nations, are authorized to furnish
nonmilitary supplies, materials, and services, to such organizations
and nations on an advance of funds or reimbursement basis. Such
advances, or reimbursements which are received under this subsection
within one hundred and eighty days after the close of the fiscal year
in which such supplies, materials, and services are delivered, may be
credited to the current applicable appropriation or fund of the agency
concerned and shall be available for the purposes for which such ap-
propriations and funds are authorized to be used.]
SEC. 536. JOINT COMMISSION ON RURAL RECONSTRUCTION IN
CHINA.?The President is authorized to continue to participate in the
Joint Commission on Rural Reconstruction in China and to appoint
citizens of the United States to the Commission.
(SEC. 537. PROVISIONS ON USES OF UNDS.?(a) Appropriations
for the purposes of this Act (except for Chapter I), allocations to
any United States Government agency, from other appropriations,
for functions directly related to the purposes of this Act, and funds
made available for other purposes to any agency administering non-
military assistance, shall be available for:
((1) rents in the District of Columbia;
[(2) expenses of attendance at meetings concerned with the
purposes of such appropriations, including (notwithstanding the
provisions of section 9 of the Act of March 4, 1909 (31 U.S.C.
673)) expenses in connection with meetings of persons whose em-
ployment is authorized by section 530 of this Act;
[(3) contracting with individuals for personal services abroad:
Provided, That such individuals shall not be regarded as employ-
ees of the United States for the purpose of any law administered
by the Civil Service Commission;
[(4) purchase, maintenance, operation, and hire of aircraft:
Provided, That aircraft for administrative purposes may be pur-
chased only as specifically provided for in an appropriation or
other Act;
[(5) purchase and hire of passenger motor vehicles: Provided,
That, except as may otherwise be provided in an appropriation or
other Act, passenger motor vehicles abroad for administrative
purposes may be purchased for replacement only and such ve-
hicles may be exchanged or sold and replaced by an equal number
of such vehicles and the cost, including exchange allowance, of
each such replacement shall not exceed $3,500 in the case of an
automobile for the chief of any special mission or staff abroad
established under section 526 of this Act: Provided further, That
passenger motor vehicles may be purchased for use in the United
States only as may be specifically provided in an appropriation
or other Act;
[(6) entertainment within the United States (not to exceed
$15,000 in any fiscal year except as may otherwise be provided in
an appropriation or other Act);
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[(7) exchange of funds without regard to section 3651 of the
Revised Statutes (31 U.S.C. 543), and loss by exchange;
[(8) expenditures (not to exceed $50,000 in any fiscal year
except as may otherwise be provided in an appropriation or other
Act). of a confidential character other than entertainment:
Pronded, That a certificate of the amount of each such expendi-
ture, the nature of which it is considered inadvisable to specify,
shall be made by an officer administering nonmilitary assistance,
or such person as he may designate, and every such certificate
shall be deemed a sufficient voucher for the amount therein speci-
fied;
[(9) insurance of official motor vehicles in foreign countries;
[(10) rental or lease outside the United States of offices,
buildings, grounds, and living quarters to house personnel; main-
tenance, furnishings necessary repairs, improvements, and altera-
tions to properties owned or rented by the United States Govern-
ment abroad; and costs of fuel, water and utilities for such
properties;
[(II) actual expenses of preparing and transporting to their
former homes in the United States or elsewhere, and of care and
disposition of, the remains of persons or members of the families
of persons who may (lie while such persons are away from their
homes participating in activities carried out with funds covered
by this subsection (a);
[(12) purchase of uniforms;
[(13) payment of per diem in lieu of subsistence to foreign par-
ticipants engaged in any program of furnishing technical in-
formation and assistance, while such participants are away from
their homes in countries other than the United States, at rates
not in excess of those prescribed by the Standardized Government
Travel Regulations, notwithstanding any other provision of law;
[(14) expenses authorized by the Foreign Service Act of 1946,
as amended (22 U.S.C. 801 and the following), not otherwise
provided for;
[(15) ice and drinking water for use abroad;
[(16) services of commissioned officers of the Public Health
Service and of the Coast and Geodetic Survey, and for the pur-
poses of providing such services the Public Health Service may
appoint not to exceed twenty officers in the regular corps to grades
above that of senior assistant, but not above that of director, as
otherwise authorized in accordance with section 711 of the Act
of July 1, 1944, as amended (42 U.S.C. 211a), arid the Coast and
Geodetic Survey may appoint for such purposes not to exceed
twenty commissioned officers in addition to those otherwise
authorized;
[(17) expenses in connection with travel of personnel outside
the United States, including travel expenses of dependents (in-
cluding expenses during necessary stopovers while engaged in such
travel) and transportation of personal effects, household goods,
and. automobiles of such personnel when any part of such travel
or transportation begins in one fiscal year pursuant to travel
orders issued in that fiscal year, notwithstanding the fact that such
travel or transportation may not be completed during that same
fiscal year, and cost of transporting to and from a place of storage,
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and the cost of storing, the furniture and household and personal
effects of any employee (i) for not to exceed three months after
first arrival at a new post, (ii) when an employee is assigned to a
post to which he cannot take, or at which he is unable to use, his
furniture and household and personal effects, (iii) when such stor-
age would avoidlthe cost of transporting such furniture and effects
from one location to another, (iv) when he is temporarily absent
from his post under orders, or (v) when through no fault of the
employee storage costs are incurred on such furniture and effects
(including automobiles) in connection with authorized travel,
under such regulations as an officer administering nonmilitary
assistance, or such person as he may designate, may prescribe;
[(18) payment of unusual expenses incident to the operation
and maintenance of official residences for chiefs of special missions
or staffs serving in accordance with section 526 of this Act.
[(b) United States Government agencies are authorized to pay the
,cost of health and accident insurance for foreign participants in any
exchange-of-persons program or any program of furnishing technical
information and assistance administered by any such agency while
such participants are en route or absent from their homes for purposes
of participation in any such program.
[(c) Notwithstanding the provisions of section 406(a) of Public
Law 85-241, not to exceed $27,750,000 of the funds available for
assistance in Korea under this Act may be used by the President to
construct or otherwise acquire essential living quarters, office space,
and supporting facilities in Korea for use by personnel carrying out
activities under this Act, and not to exceed $4,250,000 of funds made
available for assistance in other countries under this Act may be used
(in addition to funds available for such use under other authorities
in this Act) for construction or acquisition of such facilities for such
.purposes elsewhere.
[(d) Funds made available under section 400(a) may be used
Thr expenses (other than those provided for under section 411(b) of
this Act) to assist in carrying out functions under the Agricultural
Trade Development and Assistance Act of 1954, as amended (7 U.S.C.
1691 and the following), delegated or assigned to any agency or officer
,administering nonmilitary assistance.
[(e) Funds available under this Act may be used to pay costs of
training United States citizen personnel employed or assigned pur-
suant to section 527(0(2) of this Act (through interchange or other-
wise) at any State or local unit of government, public or private non-
profit institution, trade, labor, agricultural, or scientific association
or organization, or commercial firm; and the provisions of Public
Law 918, Eighty-fourth Congress, may be used to carry out the
foregoing authority notwithstanding that interchange of personnel
may not be involved or that the training may not take place at the
institutions specified in that Act. Such training shall not be con-
sidered employment or holding of office under title 5, United States
Code, section 62 and any payments or contributions in connection
therewith may, as deemed appropriate by the head of the United
States Government agency authorizing such training, be made by
private or public sources and be accepted by any trainee, or may be
accepted by and credited to the current applicable appropriation of
such agency: Provided, however, That any such payments to an
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104 FOREIGN ASSISTANCE ACT OF 1951
employee in the nature of compensation shall be in lieu of or in reduc-
tion of compensation received from the Government of the United
States.
E(f) During the annual presentation to the Congress of requests
for authorizations and appropriations under this Act, there shall be
submitted a detailed report on the assistance to be furnished, country-
by-country, under title I of chapter II, and under section 40000, of
this Act.. The report with respect to each country shall contain a clear
and detailed explanation of the proposed level of aid for such coun-
try, and shall include a listing of all significant factors considered,
and the methods used, in determining the level of aid for such country;
the reason for including each such factor and an explanation of the
manner in which each of such factors is related to the specific dollar
figure which constitutes the proposed level of aid for each such coun-
try. In addition, with respect to assistance proposed to be furnished
under title I of chapter II of this Act, the report shall contain a clear
and detailed explanation on a country-by-country basis of the deter-
mination of the particular level of forces to be supported by the pro-
posed request for authorization and appropriation for military assist-
ance, the factors considered and methods used in arriving at each
country determination, and where the level of forces supported by
military assistance differs from the total level of forces maintained
in any such country, an explanation, in detail, of the reason for the
difference in such level of forces.
[SEc. 541. EFFECTIVE DATE.?This Act shall take effect on the
date of its enactment.
[SEC. 542. STATUTES REPEALED.?(a) There are hereby repealed?
[(1) an Act to provide for assistance to Greece and Turkey,
approved May 22, 1947, as amended;
[(2) the joint resolution to provide for relief assistance to the
people of countries devastated by war, approved May 31, 1947, as
amended;
[(3) the Foreign Aid Act of 1947;
[(4) the Foreign Assistance Act of 1948, as amended, includ-
ing the Economic Cooperation Act of 1948, as amended, the
International Children's Emergency Fund Assistance Act of
1948, as amended, the Greek-Turkish Assistance Act of 1948,
and the China Aid Act of 1948, as amended;
E(5) the Mutual Defense Assistance Act of 1949, as amended;
(6) the Foreign Economic Assistance Act of 1950, as amended;
including the Economic Cooperation Act of 1950, the China Area
Aid Act of 1950, as amended, the United Nations Palestine
Refugee Aid Act of 1950, and the Act for International Develop-
ment, as amended;
[(7) the Far Eastern Economic Assistance Act of 1950, as.
amended;
[(8) the 'Yugoslav Emergency Relief Assistance Act of 1950;
[(9) the Mutual Security Act of 1951, as amended;
COM the Mutual Security Act, of 1952;
[(11) the Mutual Security Act of 1953;
[(12) section 12 of the joint resolution of Congress approved
November 4, 1939 (54 Stat. 10; 22 U.S.C. 452);
[(13) section 4 of the Act of March 3. 1925 (50 Stat. 887; 50'
U.S.C. 165); and
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[(14) section 968 of title 18, United States Code.
[(b) References in other Acts to the Acts listed in subsection (a)
shall hereafter be considered to be references to the appropriate provi-
sions of this Act.
[(c) The repeal of the Acts listed in subsection (a) shall not be
deemed to affect amendments contained in such Acts to acts not named
in subsection (a).
ESEc. 543. SAVING ROVISIONS.? (a) Except as may be expressly
provided to the contrary in this Act, all determinations, authorizations,
regulations, orders, contracts, agreements, and other actions issued,
undertaken or entered into under authority of any provision of law
repealed by section 542 shall continue in full force and effect until
modified by appropriate authority.
[(b) Where provisions of this Act establish conditions which must
be complied with before use may be made of authority contained in
or funds authorized by this Act, compliance with substantially similar
conditions under Acts named in section 542 shall be deemed to con-
stitute compliance with the conditions established by this Act.
[(c) No person in the service or employment of the United States
or otherwise performing functions under an Act repealed by section 542
or under section 408 shall be required to be reappointed or reemployed
by reason of the entry into force of this Act, except that appointments
made pursuant to section 110(a) (2) of the Economic Cooperation Act
of 1948, as amended, shall be converted to appointments under section
527(c) of this Act.
[(d) Funds appropriated pursuant to provisions of this Act repealed
subsequent to the time such funds are appropriated shall remain avail-
able for their original purposes in accordance with the provisions of
law originally applicable thereto. References in any Act to provisions
of this Act repealed or stricken out by the Mutual Security Act of 1957
or subsequent Acts are hereby stricken out; and references in any Act
to provisions of this Act redesignated by the Mutual Security Act of
1957 or subsequent Acts are hereby amended to refer to the new
designations.
ESEc. 544. AMENDMENTS TO OTHER LAWS.--(a) Section 1 of Public
Law 283, Eighty-first Congress, is repealed. The Institute of Inter-
American Affairs, created pursuant to Public Law 369, Eightieth Con-
gress (22 U.S.C. 281), shall have succession until June 30, 1960, and
may make contracts for periods not to exceed five years: Provided,
That any contract extending beyond June 30, 1960, shall be made
subject to termination by the said Institute upon notice: And provided
further, That the said Institute shall, on and after July 1, 1954, be
subject to the applicable provisions of the Budget and Accounting
Act, 1921, as amended (31 U.S.C. 1), in lieu of the provisions of the
Government Corporation Control Act, as amended (31 U.S.C. 841).
[SEC. 545. DEFINITIONS.?For the purposes of this Act?
[(a) The term "commodity" includes any commodity, material,
article, supply, or goods.
[(b) The term "surplus agricultural commodity" means any agri-
cultural commodity or product thereof, class, kind, type, or other
specification thereof, produced in the United States either publicly or
privately owned, which is in excess of domestic requirements, adequate
carryover, and anticipated exports for dollars, as determined by the
Secretary of Agriculture.
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106 FOREIGN ASSISTANCE ACT OF 1981
((c) The terms "equipment" and "materials" shall mean any arms
ammunition, or implements of war, or any other type of material,
article, raw material, facility, tool, machine, supply or item that would
further the purpose of chapter I, or any component or part thereof,
used or required for use in connection therewith, or required in or
for the manufacture, production, processing, storage, transportation,
repair or rehabilitation of any equipment or materials, but shall not
include merchant vessels.
[(d) The term "mobilization reserve" as used with respect to any
equipment or materials, means the quantity of such equipment or
materials determined by the Secretary of Defense under regulations
prescribed by the President to be required to support mobilization
of the Armed Forces of the United States in the event of war or
national emergency until such time as adequate additional quantities
of such equipment or materials can be procured.
[(e) The term "excess" as used with respect to any equipment or
materials, means the quantity of such equipment or materials owned
by the United States which is in excess of the mobilization reserve of
such equipment or materials.
[(1) The term "services" shall include any service, repair, training
of personnel, or technical or other assistance or information necessary
to effectuate the purposes of this Act.
[(g) The term "Armed Forces of the United States" shall include
any component of the Army of the United States, of the United States
Navy, of the United States Marine Corps, of the Air Force of the
United States, of the United States Coast Guard, and the Reserve
components thereof.
Eh) The term "value" means--
El) with respect to any excess equipment or materials fur-
nished under chapter I the gross cost of repairinK, rehabilitating,
or modifying such equipment or materials prior to being so
furnished;
[(2) with respect to any nonexcess equipment or materials
furnished under chapter I which are taken from the mobiliza-
tion reserve (other than equipment or materials referred to in
paragraph (3) of this subsection), the actual or the projected
(computed as accurately as practicable) cost of procuring for the
mobilization reserve an equal quantity of such equipment or
materials or an equivalent quantity of equipment or materials.of
the same general typo but deemed to be more desirable for in-
clusion in the mobilization reserve than the equipment or mate-
rials furnished;
[(3) with respect to any nonexcess equipment or materials
furnished under chapter I which are taken from tha mobilization
reserve but with respect to which the Secretary of Defense has
certified that it is not necessary fully to replace such equipment
or materials in the mobilization reserve, the gross cost to the
United States of such equipment and materials or its replacement
cost, whichever the Secretary of Defense may specify; and
[(4) with respect to any equipment or materials furnished
under chapter I which are procured for the purpose of being
so furnished, the gross cost to the United States of such equip-
ment and materials.
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FOREIGN ASSISTANCE ACT OF 1961 107
In determining the gross cost incurred by any agency in repairing,
rehabilitating, or modifying any excess equipment furnished under
chapter I, all parts, accessories, or other materials used in the course
of repair, rehabilitation, or modification shall be priced in accordance
with the current standard pricing policies of such agency. For the
purpose of this subsection, the gross cost of any ec uipment or materials
taken from the mobilization reserve means eit-aer the actual gross
cost to the United States of that particular equipment or materials or
the estimated gross cost to the United States of that particular equip-
ment or materials obtained by multiplying the number of units of such
particular equipment or materials by the average gross cost of each
unit of that equipment and materials owned by the furnishing agency.
Notwithstanding the foregoing provisions of this subsection (h) and
for the purpose of establishing a more equitable pricing system for
transactions between the military departments and the Mutual De-.
fense Assistance Program, the Secretary of Defense shall prescribe at
the earliest practicable date' through appropriate pricing regulations
of uniform applicability, that the term value" (except in the case of
excess equipment or material) shall mean?
[(1) the price of equipment or materials obtaining for similar
transactions between the Armed Forces of the United States; or
[(2) where there are no similar transactions within the meaning
of paragraph (1), the gross cost to the United States adjusted as
appropriate for condition and market value.
Li) the term "United States Government agency" means any
department, agency, board, wholly or partly owned corporation, or
instrumentality, commission, or establishment of the United States
Government.
[(j) The term "agency administering nonmilitary assistance" shall
refer to the Development Loan Fund and any agency to which au-
thorities and functions under title I, title III, or title IV of chapter
II or under chapter III of this Act are delegated or assigned pursuant
to authority contained in sections 521 and 525 of this Act.
[(k) The term "officer administering nonmilitary assistance" shall
refer to the Board of Directors of the Development Loan Fund and
any officer to whom authorities and functions under title I, title III,
or title IV of chapter II or under chapter III of this Act are delegated
or assigned pursuant to authority contained in sections 521 and 525
of this Act.
[SEC. 546. CONSTRUCTION.?(a) If any provision of this Act or the
application of any provision to any circumstances or persons shall be
held invalid, the validity of the remainder of the Act and applicability
of such provision to other circumstances or persons shall not be affected
thereby.
[(b) Nothing in this Act shall alter, amend, revoke, repeal, or other-
wise affect the provisions of the Atomic Energy Act of 1954, as
amended (42 U.S.C. 2011).
((c) Nothing in this Act is intended nor shall it be construed as an
expressed or implied commitment to provide any specific assistance,
whether of funds, commodities, or services, to any nation or nations,
or to any international organization.]
SEC. 547. REDUCTION OP AUTHORIZATIONS.? * * * (Repealed-
1957)
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[SEc. 548. UNEXPENDED BALANCES. Unexpended balances of
funds made available under authority of this Act are hereby authorized
to. be continued available for the general purposes for which appro-
priated, and may be consolidated with appropriations made available
beginning in fiscal year 1957 for the same general purposes under the
authority of this Act.]
SEC. 549. SPECIAL PROVISIONS ON AVAILABILITY OF FUNDS.? * * *
(Repealed --1959)
[SEC. 550. INFORMATION PoLtcY.?The President shall, in the re-
ports required by section 534, or in response to requests from Members
of the Congress or inquiries from the public, make public all informa-
tion concerning the mutual security program not deemed by him to
be incompatible with the security of the United Stales.
[Sac. 551. LIMITATION ON THE USE OF THE PRESIDENT'S SPECIAL
A.UTHORITY. The authority contained in sections 403, 451, and 501 of
this Act. shall not be used to augment appropriations made pursuant
to sections 103(b), 408, 411(b), and 411(c) or used otherwise to Entine()
activities which normally would be financed from appropriations for
administrative expenses: Provided, however, That the aforementioned
authority may be used during the fiscal year 1961 to finance activities
which normally would be financed from appropriations made pur-
suant to sections 411(b) and 411(c) of this Act.]
SEC. 552. ASSISTANCE TO CUBA.- -No assistance shall be furnished
under this Act to Cuba after the date of enactment of the Mutual
Security Act of 1960 unless the President determines that such assis-
tance is in the national and hemispheric interest of the United States.
SECTION 12 OF TIIE MUTUAL SECURITY ACT OF 1955
AN ACT To amend the Mutual Security Act of 1954, and for other purooses.
Be it enacted by the Senate and //02/.36 of Representatives o.f the
United States of America in Congress assembled, That this Act may be
cited as the "Mutual Security Act of 1955".
[SF.c. 12. It is hereby declared to be the continuing sense of the Con-
gress that the Communist regime in China has not demonstrated its
willingness to fulfill the obligations contained in the Charter of the
United Nations and should not be recognized to represent China in
the United Nations.]
SECTIONS 12, 13, AND 14 OF THE MUTUAL SECURITY ACT
OF 1956
AN ACT To amend further the Mutual Security Act of 1954, as amended.
Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled, That this Act may be cited
as the "Mutual Security Act of 1956".
(FOREIGN RESEARCH REA.CTOR PROJECTS
[SEC. 12. (a) As one means of furthering peaceful uses. of atomic
energy on an international basis, there is hereby authorized to be
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FOREIGN ASSISTANCE ACT OF 1961 109
appropriated to the President for the fiscal year 1957 not to exceed
$5,950,000 for use by the President, on such terms and conditions as
he may specify, for research reactor projects undertaken or authorized
by foreign governments which shall have entered into agreements for
cooperation with the Government of the United States concerning the
peaceful uses of atomic energy.
[(b) Nothing in this section shall alter, amend, revoke, repeal, or
otherwise affect the provisions of the Atomic Energy Act of 1954.
[(c) The United States share of the cost of any reactor made avail-
able to another government or to other governments under this section
shall not exceed $350,000.
[(d) In carrying out the purposes of this section, the appropriate
United States departments and agencies shall give full and continuous
publicity through the press, radio, and all other available media, so
as to inform the peoples of the participating countries regarding the
assistance, including its purpose, source, and character, furnished by
the United States. Such portions of the equipment furnished under
this section as may be appropriately die-stamped as a product of the
United States shall be so stamped.
[SEc. 13. It is the sense of Congress that not to exceed $11,000,000
of the funds made available pursuant to the Mutual Security Act of
1954, as amended, for the fiscal year 1957 be transferred, in the discre-
tion of the President, to the Department of State to carry out inter-
national educational exchange activities. Such amount is authorized
to be transferred to and consolidated with funds made available to
the Department of State for the fiscal year 1957 for the activities
authorized by the United States Information and Educational Ex-
change Act of 1948, as amended (22 U.S.C. 1431-1479), and by section
32(b) (2) of the Surplus Property Act of 1944, as amended (50 U.S.C.
App. 1641(b)). The amount transferred pursuant to this section shall
be in addition to funds otherwise appropriated for such activities, and
not to exceed $500,000 of the amount so transferred may be used for
administrative expenses.
[SEc. 14. It is the sense of Congress that in the preparation of the
mutual security program, the President should take fully into account
the desirability of affirmatively promoting the economic development
of under-developed countries, both as a means of effectively counter-
acting the increased political and economic emphasis of Soviet foreign
policy and as a means of promoting fundamental American foreign
policy objectives of political and economic self-determination and
independence.]
SECTION 503 OF THE MUTUAL SECURITY ACT OF 1958
AN ACT To amend further the Mutual Security Act of 1954, as amended, and
for other purposes.
Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled, That this Act may be cited
as the "Mutual Security Act of 1958".
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[COOPERATION IN WESTERN HEMISPHERE
[SEC. 503. It is the sense of the Congress that, in view of the friendly
relationships and mutual interests which exist between the United
States and the other nations of the Western Hemisphere, the President
should, pursuant to the provisions of the Mutual Security Act of 1954,
as amended, and other applicable legislation, seek to strengthen co-
operation in the Western Hemisphere to the maximum extent by en-
couraging joint programs of technical and economic development.]
SECTION 108 OF THE MUTUAL SECURITY APPROPRIATION
ACT, 1959
AN ACT Making appropriations for Mutual Security for the fiscal year ending
June 30, 1959, and for other purposes.
Be it enacted by the Senate and Howse of Representatives of the United
States of America in Congress assembled, That, the following sums are
appropriated, out of any money in the Treasury not otherwise ap-
propriated, for the fiscal year ending June 30, 1959, namely:
MUTUAL SECURITY
rSEC. 108. Not to exceed 50 per centum of the foreign currencies
heretofore generated in any country under section 402 of th,-.! Mutual
Security Act of 1954, as amended, may, notwithstanding prior pro-
visions of law, hereafter be used in accordance with the provisions of
that section: Provided, That quarterly reports of the use of foreign
currencies pursuant to this section shall be submitted to the Commit-
tees on Appropriations of the Senate and House of Representatives.]
This Act may be cited as the "Mutual Security Appropration Act,
1959".
SECTION 501(a), CIIAPTER VI, AND SECTIONS 702 AND 703
OF THE MUTUAL SECURITY ACT OF 1959, AS AMENDED
AN ACT To amend further the Mutual security Act of 1954, as amended, a:ad
for other purposes.
Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled, That this Act may be cited
as the "Mutual Security Act of 1959".
CHAPTER V?INTERNATIONAL COOPERATION IN HEALTH; COLOMBO
PLAN COUNCIL FOR TECHNICAL COOPERATION
INTERNATIONAL COOPERATION IN HEALTH
ESEc. 501. (a) The Congress of the United States recognizes that
large areas of the world are being ravaged by diseases and other health
deficiencies which are causing widespread suffering, debility, and
death, and are seriously deterring the efforts of peoples in such areas
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to develop their resources and productive capacities and to improve
their living conditions. The Congress also recognizes that inter-
national efforts are needed to assist sueh peoples in bringing diseases
and other health deficiencies under control., in preventing their spread
or reappearance, and in eliminating their basic causes. Accordingly,
the Congress affirms that it is the policy of the United States to acceler-
ate its efforts to encourage and support international cooperation
in programs directed toward the conquest of diseases and other health
deficiencies.]
COLOMBO PLAN COUNCIL FOR TECHNICAL COOPERATION
SEC. 502. To enable the United States to maintain membership in
the Colombo Plan Council for Technical Cooperation, there is hereby
authorized to be appropriated from time to time to the Department
of State such sums as may be necessary for the payment by the United
States of its share of the expenses of the Colombo Plan Council for
Technical Cooperation.
[CHAPTER VI-CENTER FOR CULTURAL AND TECHNICAL INTERCHANGE
BETWEEN EAST AND WEST
(STATEMENT OF PURPOSE
[SEC. 601. The purpose of this chapter is to promote better relations
and understanding between the United States and the nations of Asia
and the Pacific (hereinafter referred to as "the East") through coop-
erative study and research, by establishing in Hawaii a Center for
Cultural and. Technical Interchange Between East and West, either
as a branch of an existing institution of higher learning or as a sepa-
rate institution, where scholars and students, in various fields from the
nations of the East and the Western World may meet, study, exchange
ideas and views, and conduct other activities primarily in support of
the objectives of the United States Information and Educational
Exchange Act of 1948, as amended, and title III of chapter II of the
Mutual Security Act of 1954 and other Acts promoting the interna-
tional educational, cultural, and related activities of the United States.
[ESTABLISHMENT OF CENTER
[SEC. 602. In order to carry out the purposes of this chapter the
Secretary of State (hereinafter referred to as Secretary), after con-
sultation with appropriate public and private authorities, shall on
or before January 3, 1960, prepare and submit to the Congress a plan
and program for?
[(1) the establishment and operation in Hawaii of an educa-
tional institution to be known as the Center for Cultural and
Technical Interchange Between East and West through arrange-
ments to be made with public, educational, or other nonprofit
institutions;
((2) grants, fellowships, and other payments to outstanding
scholars and authorities from the nations of the East and Western
World as may be necessary to attract such scholars and authorities
to the Center;
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FOREIGN ASSISTANCE ACT OF 1061
((3) grants, scholarships, and other payments to qualified can-
didates from the nations of the East and West as may be necessary
to enable such students to engage in study at the Center; and
[(4) making the facilities of the Center available for study to
other qualified persons on reasonable basis.
[AUTHORIZATION OF APPROPRIATIONS
[SEC. 603. There are authorized to be appropriated, to remain avail-
able until expended, such amounts as may be necessary to carry out
the provisions of this chapter.]
CHAPTER VII?AMENDMENTS TO OTHER LAWS AND MISCELLANEOUS
PROVISIONS
AMENDMENTS TO OTHER LAWS
SEC. 701. * * *
[EXPENSES OF ANNUAL MEETING OF NORTH ATLANTIC TREATY
PARLIAMENTARY CONFERENCE
FEc.702. There is authorized to be appropriated the sum of $100,000
for the purpose of defraying the expenses incident to the annual meet-
ing of the North Atlantic Treaty Parliamentary Conference for the
year 1959, to be held in Washington, District of Columbia. Funds
appropriated pursuant to this authorization shall be disbursed on
vouchers jointly approved by the chairmen of the Senate and House
delegations to the Conference, and such approval shall be final and
conclusive upon the accounting officers in the auditing of accounts
incident to the annual meeting.
[UNITED STATES PARTICIPATION IN WORLD REFUGEE YE k R
[Sm. 703. Of the funds appropriated pursuant to section 451(b) of
the Mutual Security Act of 1954, as amended, the sum of $10,000,000
shall be available for United States participation in World Refugee
Year. Such sum shall be available for allocation by the President for
assistance, either directly or through intergovernmental organizations
or agencies, to the various refugee groups, and shall be used primarily
in furtherance of permanent solutions of the problems of such groups
and in alleviating their urgent emergency needs.]
SECTION 604 AND CHAPTER VIII OF THE MUTUAL SECURITY
ACT OF 1960
AN ACT To amend further the Mutual Security Act of 1954, as amended, and for
other purposes.
Reit enacted by the Senate and House of Representatives of the United
States of America in Congress assembled, That this Act may be cited
as the "Mutual ..:eettrity Art of 1960".
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FOREIGN ASSISTANCE ACT OF 1961 113
CHAPTER V1-AMENDMENTS TO OTHER LAWS
[SEC. 604. The President shall have a study made of the functions
of, and the degree of coordination among, agencies engaged in foreign
economic activities, including the Department of State, the Interna-
tional Cooperation Administration, the Development Loan Fund, the
Export-Import Bank, and the Department of Agriculture, with a view
to providing the most effective means for the formulation and imple-
mentation of the United States foreign economic policies. The Pres-
ident shall include in his presentation to the Congress of the fiscal
year 1962 mutual security program his findings and recommendations
resulting from such study.]
CHAPTER VII-CENTER FOR CULTURAL AND TECHNICAL INTERCHANGE
BETWEEN EAST AND WEST
[CHAPTER VIII-HEMISPHERE CENTER FOR CULTURAL AND
TECHNICAL INTERCHANGE
[STATEMENT OF PURPOSE
[SEC. 801. The purpose of this chapter is to promote better relations
and understanding between the United States and the other nations
of the Western Hemisphere (hereinafter referred to as "the Hemi-
sphere") through cooperative study and research, by establishing in
Puerto Rico a Hemispheric Center for Cultural and Technical Inter-
change, either as a branch of an existing institution of higher learning
or as a separate institution, where scholars and students, in various
fields from the nations of the Hemisphere may meet, study, exchange
ideas and views, and conduct other activities primarily in support of
the objectives of the United States Information and Educational Ex-
change Act of 1948, as amended, and title III of chapter II of the
Mutual Security Act of 1954 and other Acts promoting the inter-
national educational, cultural, and related activities of the United
States.
[ESTABLISHMENT OF CENTER
[SEC. 802. In order to carry out the purposes of this chapter the Sec-
retary of State (hereinafter referred to as "Secretary"), after con-
sultation with appropriate public and private authorities, may, on or
before January 3, 1961, prepare and submit to the Congress a plan and
program for?
[(1) the establishment and operation in Puerto Rico of an edu-
cational institution to be known as the Hemispheric Center for
Cultural and Technical Interchange through arrangements to
be made with public, educational, or other nonprofit institutions;
[(2) grants, fellowships, and other payments to outstanding
scholars and authorities from the nations of the Hemisphere as
may be necessary to attract such scholars and authorities to the
Center;
[(3) grants, scholarships, and other payments to qualified can-
didates from the nations of the Hemisphere as may be necessary to
enable such students to engage in study at the Center; and
72746-61-9
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[(4) making the facilities of the Center available for study to
other qualified persons on reasonable basis.]
SECTION 305 OF THE MUTUAL DEFENSE ASSISTANCE
CONTROL ACT OF 1951
AN ACT To provide for the control by the United States and cooperating foreign
nations of exports to any nation or combination of nations threatening the
security of the United States, including the Union of Soviet Socialist Republics
and all countries under its domination, and for other purposes.
Be it enacted by the Senate and House of Representatives of the United
States of America in, Congress assembled, That this Act may be cited
as the "Mutual Defense Assistance Control Act of 1951".
TITLE I?WAR MATERIALS
a
TITLE III?GENERAL PROVISIONS
SEC. 301. All other nations (those not receiving United States mili-
tary, economic, or financial assistance) shall be invited by the Presi-
dent to cooperate jointly in a group or groups or on an individual
basis in controlling the export of the commodities referred to in title
I and title II of this Act to any nation or combination of nations
threatening the security of the United States, including the Union
of Soviet Socialist Republics and all countries under its domination.
a a a a
[SEc. 305. Subsection (d) of section 117 of the Foreign Assistance
Act of 1948 (Public Law 472, Eightieth Congress), as amended, and
subsection (a) of section 1302 of the Third Supplemental Appropria-
tion Act, 1951 (Public Law 45, 82d Congress), are repealed.]
SEG'. 805. There is hereby authorized to be appropriated to the De-
partment of State such sums as may be necessary from time to time to
carry out the objectives of this Act.
SECTION 104(e) OF THE AGRICULTURAL TRADE DEVELOP-
MENT AND ASSISTANCE ACT OF 1954, AS AMENDED
AN ACT To increase the consumption of United States agricultural commodities
in foreign countries, to improve the foreign relations of the United States,
and for other purposes.
Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled, That this Act may be cited
as the "Agricultural Trade Development and Assistance Act of 1954".
a a ?
TITLE I?SALES FOR FOREIGN CURRENCY
* a * a * * *
SEC. 104. Notwithstanding section 1415 of the Supplemental Ap-?
propriation Act, 1953, or any other provision of law, the President
may use or enter into agreements with friendly nations or organize.-
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FOREIGN ASSISTANCE ACT OF 1961
tions of nations to use the foreign currencies which accrue under this
title for one or more of the following purposes:
(e) For promoting balanced economic development and trade
among nations, for which purposes not more than 25 per centum of
the currencies received pursuant to each such agreement shall be avail-
able through and under the procedures established by. [the Export-
Import Bank] such agency as the President shall direct for loans mutu-
ally agreeable to said [bank] agency and the country with which the
agreement is made to United States business firms and branches,
subsidiaries, or affiliates of such firms for business development and
trade expansion in such countries and for loans to domestic or foreign
firms for the establishment of facilities for aiding in the utilization,
distribution, or otherwise increasing the consumption of, and markets
for,
United States agricultural products: Provided, however, That no
such loans shall be made for the manufacture of any products to be
exported to the United States in competition with products produced
in the United States or for the manufacture or production of any
.commodity to be marketed in competition with United States agricul-
tural commodities or the products thereof. Foreign currencies may
be accepted in repayment of such loans.
SECTION 5 OF THE MIDDLE EAST RESOLUTION
JOINT RESOLUTION To promote peace and stability in the Middle East.
Resolved by the Senate and House of Representatives of the United
States of America in Congress assembled, That the President be and
hereby is authorized to cooperate with and assist any nation or group
of nations in the general area of the Middle East desiring such as-
sistance in the development of economic strength dedicated to the
maintenance of national independence.
SEC. 5. The President shall [within the months of January and July
of each year] whenever appropriate report to the Congress his action
hereunder.
SEC. 6. This joint resolution shall expire when the President shall
determine that the peace and security of the nations in the general
area of the Middle East are reasonably assured by international condi-
tions created by action of the United Nations or otherwise except
that it may be terminated earlier by a concurrent resolution of the two
Houses of Congress.
SECTION 5(f) OF THE INTERNATIONAL HEALTH RESEARCH
ACT OF 1960
JOINT RESOLUTION To establish a National Institute for International Health
and Medical Research, to provide for international cooperation in health
research, research training, and research planning, and for other purposes.
Whereas it is recognized that disease and disability are the common
enemies of all nations and peoples, and that the means, methods,
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and techniques for combating and abating the ravages of disease
and disability and for improving the health and health standards of
man should be sought and shared, without regard to national bound-
aries and divisions; and
Whereas advances in combating and abating disease and in the posi-
tive promotion of human health can be stimulated by supporting
and encouraging cooperation among scientists, research workers,
and teachers on an international basis, with consequent benefit to
the health of our people and of all peoples; and
Whereas there already exist tested means for international cooperation
in matters relating to health, including the World Health Organiza-
tion, the Pan American Health Organization, and the Unitid Na-
tions Children's Fund (UNICEF), with which the United States
is identified and associated, and it is highly desirable that the United
States establish domestic machinery for the maximum mobilization
of its health research resources, the more efficiently to cooperate with
and support the research, research-training and research-planning
endeavors of such international organizations: Therefore be it
Resolved by the Senate and House of Representatives of the United
States of America in Congress assembled,
SHORT TITLE
Spicriox 1. This joint resolution may be cited as the "International
Health Research Act of 1960".
? ? ?
AUTHORITY OF PRESIDENT
SEC. 5. (a) It is the sense of Congress that the President should
use his authority under the Constitution and laws of the United States
to accomplish the purposes of section 2 of this joint resolution and
in accomplishing such purposes (1) use to the fullest extent prac-
ticable foreign currencies or credits available for utilization by the
United States, (2) enter into agreements to use foreign currencies
and credits available to other nations for use with the agreement of
the United States, and (3) use any other foreign currencies and
credits which may be made available by participating foreign coun-
tries.
? ?
(f) The President may delegate any authority vested in him by this
section to the Secretary of Health, Education, and Welfare. The
Secretary may from time to time issue such regulations as may be
necessary to carry out any authority which is delegated to him under
this section, and may delegate performance of any such authority to
the Surgeon General of the Public Health Service, the Director of the
Office of Vocational Rehabilitation, the Chief of the Children's Bureau
or other subordinates acting under his direction. The President may
delegate any authority vestrd in him by this section to such other officer
or head of agency of the United States Government as he deems appro-
priate.
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LATIN AMERICA AND CHILE DEVELOPMENT AND RECON-
STRUCTION ASSISTANCE
AN ACT To provide for assistance in the development of Latin America and
in the reconstruction of Chile, and for other purposes.
Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled,
STATEMENT OF POLICY
SEC. 1. (a) It is the sense of the Congress that?
(1) the historic, economic, political, and geographic relation-
ships among the American Republics are unique and of special
significance and, as appropriate, should be so recognized in future
legislation;
(2) although governmental forms differ among the American
Republics, the peoples of all the Americas are dedicated to the
creation and maintenance of governments which will promote in-
dividual freedom;
(3) the interests of the American Republics are so interrelated
that sound social and economic progress in each is of importance
to all and that lack of it in any American Republic may have
serious repercussions in others;
(4) for the peoples of Latin America to continue to progress
within the framework of our common heritage of democratic
ideals, there is a compelling need for the achievement of social
and economic advance adequate to meet the legitimate aspirations
of the individual citizens of the countries of Latin America for
a better way of life;
(5) there is a need for a plan of hemispheric development, open
to all American Republics which cooperate in such plan, based
upon a strong production effort, the expansion of foreign trade,
the creation and maintenance of internal financial stability, the
growth of free economic and social institutions, and the develop-
ment of economic cooperation, including all possible steps to es-
tablish and maintain equitable rates of exchange and to bring
about the progressive elimination of trade barriers;
(6) mindful of the advantages which the United States has
enjoyed through the existence of a large domestic market with
no internal trade barriers, and believing that similar advantages
can accrue to all countries, it is the hope of the people of the
United States that all American Republics will jointly exert sus-
tained common efforts which will speedily achieve that economic
cooperation in the Western Hemisphere which is essential for
lasting peace and prosperity; and
(7) accordingly, it is declared to be the policy of the people of
the United States to sustain and strengthen principles of indi-
vidual liberty, free institutions, private enterprise, and genuine
i
independence n the Western Hemisphere through cooperation
with all American Republics which participate in a joint de-
velopment program based upon self-help and mutual efforts.
(b) In order to carry forward the above policy, the Congress
hereby?
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(1) urges the President through our constitutional processes
to develop cooperative programs on a bilateral. or multilateral
basis which will set forth specific plans Of Ilet1011 cle,S.11;11Cti
foster economic progress and improvements in the welfare and
level of living. of all the peoples of the American Republics on
the basis of joint aid, mutual effort, and coramon sacrifice;
(2) proposes the development or workable procedures to ex-
p.and hemispheric trade .and to moderate extreme price floctike..-
tions in commodities which are of exceptional importance in the
economies of the American Republics, and encourages the devel-
opment of regional economic cooperation among the American
Republics;
(3) supports the development of a more accurate and sympa-
thetic understanding among the peoples of the American Repub-
lics through a greater interchange of persons, ideas, techniques,
and educational, scientific, and cultural achievements;
(4) supports the strengthening of free democratic trade unions
to raise standards of living through improved management-labor
relations;
(5) favors the progressive development of common standards
with respect to the rights and the responsibilities of private in-
vestment which flows across national boundaries within the
Western Hemisphere;
(6) supports the consolidation of the public institutions. and
agencies of inter-American cooperation, insofar as feasible, within
the structure of the Organization of American States and the
strengtheting of the personnel resources and authority. of the
Organization in order that it may play a role of increasing im-
portance in all aspects of hemispheric. cooperation; and
(7) declares that it is prepared to give careful and sympathetic
consideration to programs which the President may develop for
the purpose of promoting these policies.
AUTHORIZATION
SEC. 2. In order to carry out the purposes of section 1 of this Act,
there is hereby authorized to be appropriated to the President not to
exceed $500,000,000, which shall remain available until expended, and
which the President may use, subject to such further legislative pro-
visions as may be enacted, in addition to other funds available for such
purposes, on such ternis and conditions as he may specify: Provided,
That none of the funds made available pursuant to this section shall
be used to furnish assistance to any country in Latin America being
subjected to economic or diplomatic sanctions by the Organization of
American States. The Secretary of State shall keep the Committee
on Foreign Relations of the Senate and the Committee on Foreign
Affairs of the House currently informed about plans and programs
for the utilization of such funds.
SPECIAL AUTHORIZATION FOR CIIILEA.N RECONSTRUCTION
SEC. 3. There is hereby authorized to be appropriated to the Presi-
dent not to exceed $100,000,000, which shell remain available until
expended, for use, in addition to other funds available for such pur-
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FOREIGN ASSISTANCE ACT OF 1961
poses, in the reconstruction and rehabilitation of Chile on such terms
and conditions as the President may specify.
SEC. 4. Section 551 of the Mutual Security Act of 1954, as amended,
which relates to limitation on the use of the President's special au-
thority, is amended by inserting before the period ": Provided, how-.
ever, That the aforementioned authority may be used during the fiscal
year 1961 to finance activities which normally would be financed from
appropriations made pursuant to sections 411(b) and 411(c) of this
Act".
GENERAL PROVISION
SEC. 4. Funds appropriated under sections 2 and 8 of this Act may be
used for assistance under this Act pursuant to such provisions applicable
to the furnishing of such assistance contained in any successor Act to the
Mutual Security Act of 1954, as amended, as the President determines
to be necessary to carry out the purposes for which such funds are appro-
priated.
SECTION 203 OF THE FEDERAL PROPERTY AND ADMIN-
ISTRATIVE SERVICES ACT OF 1949
DISPOSAL OF SURPLUS PROPERTY
SEC. 203. (a) Except as otherwise provided in this section, the Ad-
ministrator shall have supervision and direction over the disposition
of surplus property. Such property shall be disposed of to such ex-
tent, at such times, in such areas, by such agencies, at such terms and
conditions, and in such manner, as may be prescribed in or pursuant
to this Act.
(b) The care and handling of surplus property, pending its dis-
position, and the disposal of surplus property, may be performed by
the General Services Administration or, when so determined by the
Administrator, by the executive agency in possession thereof or by
any other executive agency consenting thereto.
(c) Any executive agency designated or authorized by the Admin-
istrator to dispose of surplus property may do so by sale, exchange,
lease, permit, or transfer, for cash, credit, or other property, with or
without warranty, and upon such other terms and conditions as the
Administrator deems proper, and it may execute such documents for
the transfer of title or other interest in property and take such other
action as it deems necessary or proper to dispose of such property
under the provisions of this title.
(d) A deed, bill of sale, lease, or other instrument executed by or on
behalf of any executive agency purporting to transfer title or any
other interest in surplus property under this title shall be conclusive
evidence of compliance with the provisions of this title insofar as con-
cerns title or other interest of any bona fide grantee or transferee for
value and without notice of lack of such compliance.
(e)(1) All disposals or contracts for disposal of surplus property
(other than by abandonment, destruction, donation, or through con-
tract brokers) made or authorized by the Administrator shall be made
after publicly advertising for bids, under regulations prescribed by
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ACT OF 1961
the Administrator, except as provided in paragraphs (3) and (5) of
this subsection.
(2) Whenever public advertising for bids is required under para-
graph (1) of this subsection?
(A) the advertisement for bids shall be made at such time
previous to the disposal or contract, through such methods, and
on such .terms and conditions as shall permit that full and free
competition which is consistent with the value and nature of the
property involved;
(B) all bids shall be publicly disclosed at the time and place
stated in 1 he advertisement;
(C) award shall be made with reasonable promptness by notice
to the responsible bidder whose bid, conforming to the invitation
for bids, will he most advantageous to the Government, prico
and other factors considered: Provided, That all bids may be
rejected when it is in the public interest to do so.
(3) Disposals and contracts for disposal may be negotiated, under
regulations prescribed by the Administrator, without regard to para-
graphs (1) and (2) of this subsection but subject to obtaining such
competition as is feasible under the circumstances, if?
(A) necessary in the public interest during the period of a
national emergency declared by the President or the Congress,
with respect to a particular lot or lots of personal property or,
for a period not exceeding three months, with respect to a specifi-
cally described category or categories of personal property as
determined by the Administrator;
(B) the public health, safety, or national security will thereby
be promoted by a particular disposal of personal property;
(C) public exigency will not admit of the delay incident to
advertising certain personal property;
(D) the personal property involved is of a nature and quantity
which, if disposed of under paragraphs (1) and (2) of tins subsec-
tion, would cause such an impact on an industry or industries as
adversely to affect the national economy, and the estimated fair
market value of such property and other satisfactory ternis of
disposal can be obtained by negotiation;
(E) the estimated fair market value of the property involved
does not exceed $1,000;
(F) bid prices after advertising therefor are not reasonable
(either as to all or some part of the property) or have not been
independently arrived at in open competition;
(G) with respect to real property only, the character .or con-
dition of the property or unusual circumstances make it imprac-
tical to advertise publicly for competitive bids and the fair market
value of the property and other satisfactory terms of disposal can
be obtained by negotiation;
(II) the disposal will be to States, Territories, possessions,
political subdivisions thereof, or tax-supported agencies therein,
and the estimated fair market value of the property and other
satisfactory terms of disposal are obtained by negotiations;
(I) otherwise authorized by this Act or other law.
(4) Disposals and contracts for disposal of surplus real and related
personal property through contract realty brokers employed by the
Administrator shall be made in the manner followed in similar corn-
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FOREIGN ASSISTANCE ACT OF 1961
mercial transactions under such regulations as may be prescribed by
the Administrator: Provided, That such regulations shall require that
wide public notice of availability of the property for disposal be given
by the brokers.
(5) Negotiated sales of personal property at fixed prices may be
made by the Administrator either directly or through the use of dis-
posal contractors without regard to the limitations set forth in para-
graphs (1) and (2) of this subsection: Provided, That such sales shall
be publicized to the extent consistent with the value and nature of the
property involved, that the prices established shall reflect the esti-
mated fair market value thereof, and that such sales shall be limited to
those categories of personal property as to which the Administrator
determines that such method of disposal will best serve the interests
of the Government.
(6) Except as otherwise provided by this paragraph, an explanatory
statement of the circumstances of each disposal by negotiation of any
real or personal property having a fair market value in excess of $1,000
shall be prepared. Each such statement shall be transmitted to the
appropriate committees of the Congress in advance of such disposal,
and a copy thereof shall be preserved in the files of the executive agency
making such disposal. No such statement need be transmitted to any
such committee with respect to any disposal of personal property made
under paragraph (5) at a fixed price, or to property disposals author-
ized by any other provision of law to be made without advertising.
(7) Section 3709, Revised Statutes, as amended (41 U.S.C. 5),
shall not apply to disposals or contracts for disposal made under this
subsection.
(f) Subject to regulations of the Administrator, any executive
agency may authorize any contractor with such agency or subcon-
tractor thereunder to retain or dispose of any contractor inventory.
(g) The Administrator, in formulating policies with respect to the
disposal of surplus agricultural commodities, surplus foods processed
from agricultural commodities, and surplus cotton or woolen goods,
shall consult with the Secretary of Agriculture. Such policies shall be
so formulated as to prevent surplus agricultural commodities, or
surplus food processed from agricultural commodities, from being
dumped on the market in a disorderly manner and disrupting the
market prices for agricultural commodities.
(h) Whenever the Secretary of Agriculture determines such action
to be required to assist him in carrying out his responsibilities with
respect to price support or stabilization, the Administrator shall trans-
fer without charge to the Department of Agriculture any surplus
agricultural commodities, foods, or cotton or woolen goods to be dis-
posed of. Receipts resulting from disposal by the Department of Agri-
culture under this subsection shall be deposited pursuant to any au-
thority available to the Secretary of Agriculture, except that net
proceeds of any sale of surplus property so transferred shall be cred-
ited pursuant to section 204(b), when applicable. Surplus farm
commodities so transferred shall not be sold, other than for export, in
quantities in excess of, or at prices less than, those applicable with
respect to sales of such commodities by the Commodity Credit
Corporation.
(i) The United States Maritime Commission shall dispose of sur-
plus vessels of one thousand five hundred gross tons or more which the
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FOREIGN ASSISTANCE ACT OF 19 61
Commission determines to be merchant vessels or capable of conversion
to merchant use, and such vessels shall be disposed of only in ac-
cordance with the provisions of the Merchant Marine Act, 1936, as
amended, and other laws authorizing the sale of such vessels.
(j)(1) Under such regulations as he may prescribe, the Admin-
istrator is authorized in his discretion to donate without cost (except.
for costs of care and handling) for use in any State for purposes of
education, public health, or civil defense, or for research for any such
purpose, any .equipment, materials, books, or other supplies (includ-
ing those capitalized in a working capital or similar fund) under the
control of any executive agency- which shall have been determined to
be surplus property and which shall have been determined under para-
graph (2), (3), or (4) of this subsection to be usable and necessary
for any such purpose. In determining whether property is to be
donated under this subsection, no distinction shall be made between
property capitalized in a working-capital fund established under sec-
tion 405 of the National Security Act of 1947, as amended, or any
similar fund, and any other property. .N o such property shall be
transferred for use within any State except to the State agency desig-
nated under State law for the purpose of distributing, in conformity
with the provisions of this subsection, all property allocated under this
subsection for use within such State.
(2) In the case of surplus property under the control of the De-
partment of Defense, the Secretary of Defense shall determine whether
such property is usable and necessary for educational activities which
are of special interest to the armed services, such as maritime acade-
mies or military, naval, Air Force, or Coast Guard preparatory schools.
If such Secretary shall determine that such property is usable and
necessary for such purposes, he shall allocate it for transfer by the
Administrator to the appropriate State agency for distribution to such
educational activities. If -he shall determine that such property is
not usable and necessary for such purposes, it may be disposed of in
accordance with paragraph (3) or paragraph (4) of this subsection.
(3) Determination whether such surplus property (except surplus
property allocated in conformity with paragraph (2) of thi3 sub-
section) is usable and necessary for purposes of education or public
health, or for research for any such purpose, in any State shall be
made by the Secretary of Health, Education, and Welfare, who shall
allocate such property on the basis of needs and utilization for trans-
fer by the Administrator to such State agency for distribution to (A)
tax-supported medical institutions, hospitals, clinics, health centers,
school systems, schools, colleges, and universities, and (B) other non-
profit medical institutions, hospitals, clinics, health centers, schools,
colleges, and universities which are exempt from taxation under sec-
tion 501(c)(3) of the Internal Revenue Code of 1954. No such prop-
erty shall be transferred to any State agency until the Secretary
of Health, Education, and Welfare has received, from such State
agency, a certification that such property is usable and needed for
educational or public health purposes in the State, and until the Sec-
retary has determined that such State agency has conformed to mini-
mum standards of operation prescribed by the Secretary for the
disposal of surplus property.
(4) Determination whether such surplus property (except surplus
property allocated in conformity with paragraph (2) of tins subsee-
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FOREIGN ASsthrANRAAPPO?
tion) is usable and necessary for civil defense purposes, including
research, in any State shall be made by the Federal Civil Defense
Administrator, who shall allocate such property on the basis of need
and utilization for transfer by the Administrator of General Services
to such State agency for distribution to civil defense organizations
of such State, or political subdivisions and instrumentalities thereof,
which are established pursuant to State law. No such property shall
be transferred until the Federal Civil Defense Administrator has
received from such State agency a certification that such property is
usable and needed for civil defense purposes in the State, and until
the Federal Civil Defense Administrator has determined that such
State agency has conformed to minimum standards of operation pre-
scribed by the Federal Civil Defense Administrator for the disposal
of surplus property. The provisions of sections 201(b), 401(c), 401(e),
and 405 of the Federal Civil Defense Act of 1950, as amended, shall
apply to the performance by the Federal Civil Defense Administrator
of his responsibilities under this section.
(5) The Secretary of Health, Education, and Welfare and the
Federal Civil Defense Administrator may impose reasonable terms,
conditions, reservations, and restrictions upon the use of any single
item of personal property donated under paragraph (3) or paragraph
(4), respectively, of this subsection which has an acquisition cost of
$2,500 or more.
(6) The term "State", as used in this subsection' includes the
District of Columbia, the Commonwealth of Puerto Rico, and the
Territories and possessions of the United States.
(k)(1) Under such regulations as he may prescribe, the Adminis-
trator is authorized, in his discretion, to assign to the Secretary of
Health, Education, and Welfare for disposal such surplus real prop-
erty, including buildings, fixtures, and equipment situated thereon,
as is recommended by the Secretary of Health, Education, and Wel-,
fare as being needed for school, classroom, or other educational use,
or for use in the protection of public health, including research.
(A) Subject to the disapproval of the Administrator within
thirty days after notice to him by the Secretary of Health, Educa-
tion, and Welfare of a proposed transfer of property for school,
classroom, or other educational use, the Secretary of Health,
Education, and Welfare, through such officers or employees of the
Department of Health, Education, and Welfare as he may desig-
nate, may sell or lease such real property, including buildings,
fixtures, and equipment situated thereon for educational pur-
poses to the States and their political subdivisions and instrumen-
talities, and tax-supported educational institutions and to other
nonprofit educational institutions which have been held exempt
from taxation under section 101(6) of the Internal Revenue Code.
(B) Subject to the disapproval of the Administrator within
thirty days after notice to him by the Secretary of Health, Edu-
cation, and Welfare of a proposed transfer of property for public-
health use, the Secretary of Health, Education, and Welfare,
through such officers or employees of the Department of Health,
Education, and Welfare as he may designate, may sell or lease
such real property for public-health purposes, including research,
to the States and their political subdivisions and instrumental-
ities, and to tax-supported medical institutions, and to hospitals
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FOREIGN ASSISTANCE ACT OF 1 9(11
or other similar institutions not operated for profit winch have
been held exempt from taxation under section 101(6) of tlic
Internal Revenue Code.
n) In fixing the sale or lease value or property to be disposed
of under subparagraph (A) and subparagraph (13) of this para-
graph, the Seeretary of Health. Education. and Welfare shall
take into eonsideration any benefit which has accrued or may
accrue to the 17nited States from the use of such propert v bv any
such St at e, political subdivision, instrumentality, or institn lion.
(I)) "States" as used in this subsection includes the District of
Columbia, the Commonwealth of Puerto Rico, and the territories
and possessions of the United States.
(2) Subject to the disapproval of the Administrator within thirty
days after notice to him of any action to be taken under this sub-
section--
(A.) The Secretary of ITealth, Education. and Welfare,
through such officers or employees of the Department of Health,
Education. and Welfare as he may designate, in the case of prop-
erty transferred pursuant to the Surplus Property Act of 1944,
as amended, and pursuant to this Act, to States, political subdivi-
sions. and instrumentalities thereof, and tax-supported and other
nonprofit educational institutions, for school, classroom, or other
educational use;
(B) the Secretary of Health, Education, and Welfare,
through such officer or employees of the Department of Health,
Education, and Welfare as he may designate, in the ease of prop-
erty transferred pursuant to the Surplus Property Act of 1944,
as amended, and pursuant to tills Act, to States political subdi-
visions and instrumentalities thereof, tax-supported medical
insi itutions, and to hospitals and other similar institutions not
operated for profit, for use in the protection of public health
(including research);
(() the Secretary of the Interior, in the case of property trans-
ferred pursuant to the Surplus Property Act of 1944, as amended,
and pursuant to this Act, to States, political subdivisions, and
instrumentalities thereof, and municipalities for use as a public
park. public recreational area, or historic monument for the bene-
fit of the public;
(D) the Secretary of Defense, in the case of property trans-
ferred pursuant to the Surplus Property Act of 1944, as amended,
to States, political subdivisions, and tax-supported instrumentali-
ties thereof for use in the training and maintenance of civilian
components of the armed forces.
(E) the Federal Civil Defense Administrator, in the case of
property transferred pursuant to this Act to civil defense organ-
izations of the States or political subdivisions or instrumentalities
thereof which are established by or pursuant to State law,
is authorized and directed?
(i) to determine and enforce compliance with the terms, condi-
tions, reservations, and restrictions contained in any instrument
by which such transfer was made;
(ii) to reform, correct, or amend any such instrument by the
execution of a corrective, reformative, or amendatory instrument
where necessary to correct such instrument or to conform such
transfer to the requirements of applicable law; and
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FOREIGN ASSISTANCE ACT OF 1961
(iii) to (1) grant releases from any of the terms, conditions,
reservations, and restrictions contained in, and (II) convey, quit-
claim, or release to the transferee or other eligible user any right
or interest reserved to the United States by, any instrument by
which such transfer was made, if he determines that the property
so transferred no longer serves the purpose for which it was
transferred, or that such release, conveyance, or quitclaim deed
will not prevent accomplishment of the purpose for which such
property was so transferred: Provided, That any such release,
conveyance, or quitclaim deed may be granted on, or made sub-
ject to, such terms and conditions as he shall deem necessary to
protect or advance the interests of the United States.
(1) Under such regulations as he may prescribe, the Administrator
is authorized in his discretion to donate to the American National Red
Cross, for charitable purposes, such property, which was processed,
produced, or donated by the American National Red Cross, as shall
have been determined to be surplus property.
(m) The Administrator is authorized to take possession of aban-
doned and other unclaimed property on premises owned or leased by
the Government, to determine when title thereto vested in the United
States, and to utilize, transfer or otherwise dispose of such property.
Former owners of such property upon proper claim filed within three
years from the date of vesting of title in the United States shall be
paid the proceeds realized from the disposition of such property or,
if the property is used or transferred, the fair value therefor as of
the time title was vested in the United States as determined by the
Administrator, less in either case the costs incident to the care and
handling of such property as determined by the Administrator.
(n) For the purpose of carrying into effect the provisions of sub-
sections (j) and (k), the Secretary of Health, Education, and Welfare,
the Federal Civil Defense Administrator, and the head of any Federal
agency designated by either such officer, are authorized to enter into
cooperative agreements with State surplus property distribution agen-
cies designated in conformity with paragraph (1) of subsection (j).
Such cooperative agreements may provide for utilization by such
Federal agency, without payment or reimbursement, of the property,
facilities, personnel, and services of the State agency in carrying out
any such program, and for making available to such State agency,
without payment or reimbu.sement, property, facilities, personnel, or
services of such Federal agency in connection with such utilization.
(o) The Secretary of Health, Education, and Welfare shall submit,
during each calendar quarter, a report to the Senate (or to the Secre-
tary of the Senate if the Senate is not in session) and to the House
of Representatives (or to the Clerk of such House if it is not in session)
showing the acquisition cost of all personal property donated under
subsection (j) and of all real property disposed of -under subsection
(k) during the preceding calendar quarter to, or for distribution to,
educational or public health institutions in each State, Territory, and
possession. The first report under this subsection shall be made with
respect to property donated or disposed of during the first calendar
quarter which begins after the enactment of this subsection.
(p) In disposing of surplus property, the Administrator is authorized
to accept payments in foreign currency, under regulations prescribed by
the Administrator.
0
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