U. S. EMPLOYEES OVERSEAS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP86T00268R000900020009-4
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 122
• Document Creation Date: January 4, 2017
• Document Release Date: August 22, 2013
• Sequence Number: 9
• Publication Date: May 12, 1958
• Content Type: MEMO

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e -57
EXECUTIVE OFFICE OF THE PRESIDENT
NATIONAL SECURITY COUNCIL
WASHINGTON
May 121 1958
MEMORANDUM FOR THE NATIONAL SECURITY COUNCIL
eotia
SUBJECT: U. S. Employees Overseas
REFERENCES: A. NSC Action No. 1752
B, Memo for NSC from Executive Secretary,
same subject, dated April 18, 1958
C. NSC Action No, 1900
By NSC Action No. 1900-b, the National Security Council noted
comments by the President relative to the Operations Co-
ordinating Board Report on the subject (transmitted by the
reference memorandum of April 18, 1958), and directed that
these comments be transmitted to the Executive Officer,"OCB,
for circulation to all holders of the OCB Report. This action
was approved by the President on April 25, 1958.
Accordingly the attached OCE Report en the subject, con-
taining as a "Foreword" the above-mentioned comments by the
President, is transmitted herewith for the information of the
Council, as a substitute for the Report which was transmitted
by the reference memorandum of April 18,
It is requested that all copies of the enclosure to the -
April 18 memorandum be destroyed by burning, in accordanc
with security regulations.
4
STAT
JAMES S. LAY;JR.
Executive Secrete
cc: The Secretary of the Treasury
The Attorney General
The Directors Bureau of the Budget
The Chairman, Joint Chiefs of Staff
The Director of Central Intelligence
SQWET
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123
UNITED STATES EMPLOYEES OVERSEAS
AN OPERATIONS COORDINATING BOARD REPORT SUBMITTED
TO THE NATIONAL SECURITY COUNCIL APRIL 1958
CONFIDENTIAL
Volume e
U.S. AGENCIES' PRACTICES
AND PRIVATE ENTERPRISE
PRACTICES
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" VOLUME I. CONFIDENTIAL
TABLE OF CONTENTS
Foreword - Statement by the President Ii
Terminology Iii
I. Intro4ction 1
U. Agency Reports of Measures Taken to Hold to a Minimum
the Number of U.S. Citizens Employed Overseas by the
U.S. Government or its Contractors 4
A. Defense 4
B. State 3
C. USIA 10
D. ICA 12
E. Other Agencies 18
The Relationship with the Nash Report 19
IV. General World-wide Administrative Practices and Policies
to Improve Foreign Attitudes Toward U.S. Personnel
Overseas 25
Introductory Remarks 25
A. Personnel Factors 28
B. Use of Land 43
C. Impact on Local Economy 45
D. Jurisdiction 56
E. U.S. Vehicles -- Private Automobiles
and Government Vehicles 59
F. Communi4 Relations 64
G. Summary of Private Industry's Practices 73
V. Conclusions and Recommended Actions to Improve Foreign
Attitudes Toward U.S. Citizen Pei-sonnel Overseas 75
A. Conclusions 75
B. Recommendations 79
ANNEX (Unclassified)
General Practices and Policies of Private American
? Enterprise Operating Aborad ? 1
Foreword 1.
A. Personnel Factors 4
B. Dependents 18
C. Physical Facilities 22
D. Local Community Relations 26
Supplement 27
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FOREWORD
STATEMENT BY THE PRESIDENT
The Report on "United States Employees Overseas"
was noted and discussed by, the National Security Council
on April 24, 1958, at which time the President made the
following comment with respect to the Report: \
"Whereas the situation varies from country to
country, an over-all study such as this OCB
Report can be extremely valuable (I) in pulling
together in one place all of the current and
constructive work which is being done, and
(2) in providing a basis from which we can
move ahead and make further improvements.
"The importance of building up good personal
relations between foreign nationals and Americans
who live and work overseas can't be overestimated.
"Although all of us should be particularly con-
cerned with this problem, the Chief of Mission
in each country has a special responsibility to
make certain that there is coordinated follow-up
on this thorough, comprehensive Report."
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Terminology
. In the sense of this report the terms "employees" and
"personnerare synonymous, denoting both civilian and military
personnel employed by the U. S. Government in an overseas
assigtunent.
The term "at post" is used to mean presence in a
working status at any Department of State activity, U. S.
Information Agency or International Cooperation Administration
mission, or Department of Defense installation abroad.
The term "overseas" is used to mean foreign countries ,
and areas, but not U. S. territories.
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SECTION I.
INTRODUCTION
Purpose and Scope of the Report
This report has been prepared in response to a National
Security Council action of July 1957. It is concerned with two
principal subjects: (1) a review of measures taken by each
agency to hold to a minimum the number of U.S. citizens
employed overseas by the U.S. Government or its contractors,
and (2) a review of administrative policies and practices
having a bearing on foreign attitudes toward U.S. personnel
overseas. Particular studies have been made with respect
to 19 countries identified by the Operations Coordinating
Board as potential "trouble spots."
The report is made up of two volumes. Volume I, entitled
"U.S. Agencies' Practices," sets forth (a) the actions of U.S.
agencies to keep to a minimum the number of U.S. personnel
stationed abroad, (b) the relationships between this OCB report
and the report to the President by the late Mr. Frank C. Nash*
concerned with U.S. military bases overseas, (c) a detailed
exposition of existing U.S. administrative practices and policies
designed to improve foreign attitudes toward U.S. personnel
overseas, (d) a statement of conclusions and recommendations
on these administrative practices and policies, and (e) a sum-
mary of the related policies and practices of American private
enterprise having overseas operations, which are further
detailed in the Annex to Volume I.
Volume II, entitled "Country Studies," contains detailed
information on each of 19 countries designated by OCB as
potential "trouble spots." This study on each country is
organized into three parts: (a) a background statement,
(b) a report on the number of U.S. personnel by category with
explanations of any prospective increases or decreases. and
(c) an inventory of problems causing friction and some repre-
sentative practices being followed to eliminate or reduce these
*Limited distribution of this report is in process.
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frictions. A statistical summary of U.S. personnel stationed in
the designated countries as of July 1, 1957 and their estimated
strength in those countries as of June 30, 1958 is included as
an Annex to Volume II.
This report does not include consideration of specific
political or program isimes which affect local attitude6 toward
the United States nor does it deal with the level of personnel
required in a particular country to carry out the U.S. pro-
grams. These matters were excluded from the study by agree-
ment within the OCB on October 23, 1957.
Methodology
The agencies which participated in the working group and
submitted formal reports are the Department of Defense, the
Department of State, the U.S. Information Agency, and the
International Cooperation Administration. In identifying the
sources of friction and the administrative techniques developed
to avoid them, a working group reviewed all of the reports
submitted by American embassies to the Department of State
in response to Counselor MacArthur's letters to Chiefs of
Mission of December 1956, as well as the corresponding
reports submitted at approximately the same time by American
military commanders overseas to the Secretary of Defense.
In September 1957 the "desk officers" of the Department of
State were asked to prepare background statements for the
designated countries summarizing and updating the submissions
from the Chiefs of Mission to ensure that the country studies
would reflect the current facts. A further review of these back-
ground statements was made by the "desk officers" of State,
US/A, and ICA on January 15, 1958, for the same purpose.
The "background statements" were not intended to be "country
papers" as in the normal context of the latter term.
Action of the Operations Coordinating Board, April 9, 1958:
1. Noted that each U.S. Government agency having U.S.
citizen personnel stationed or residing in foreign countries
will report to the OCB on a standard basis the number of U.S.
citizen personnel by category, as of March 31, noting major
or unusual increases or decreases in the number of
such personnel between the dates of the annual reports, and
further noted that the first of these reports will be presented
to the Board not later than July 1.
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Z. Reviewed and noted agency actions being taken to keep
U.S. citizen personnel to a minimum and special actions taken
in connection with countries identified by OCB as potential
"trouble spots."
3. Concurred in the conclusions and recommendations
in the report and agreed that the responsible agencies repre-
sented on the Board having U.S. citizen personnel overseas ?
will carry out the recommendations as specifically assigned
to them for implementation or generally as they apply to them
overseas, noting that the recommendations involving new
legislative proposals will be submitted for coordination
through the Bureau of the Budget in accordance with existing
procedures.
4. Agreed that the Board will review in approximately
one year the degree to which the recommendations have been
carried out and to consider new situations that have arisen.
5. Noted that the Special Assistant for Security Opera-
tions Coordination will brief the National Security Council on
the conclusions and recommendations in the report.
6. Agreed that Volume I of the report would be revised
to make it possible to reduce the classification from Secret
to Confidential.
7. Agreed further that the report would be distributed as
follows, plus any additional distribution deemed appropriate
by the agencies concerned or the Executive Officer:
a. The report will be transmitted for the information
of the National Security Council.
h. The report will be transmitted formally by the
Executive Officer to the heads of all government agencies
having personnel overseas and to the Chairman of the
Civil Service Commission.
c. The report will be made available by each agency
as appropriate to its personnel in Washington and to
overseas posts.
d. The report will be referred to the appropriate OCB
working groups for use in the development or revision of
Operations Plans; and in the development of OC13 Reports
to the NSC.
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SECTION: II
AGENCY REPORTS OF MEASURES TAKEN TO HOLD TO
A MINIMUM THE NUMBER OF U.S. CITIZENS EMPLOYED
OVERSEAS BY THE U.S. GOVERNMENT OR ITS CONTRACTORS.
A. Department of Defense
1. Mititary Personnel
In accordance with Presidential directives and NSC
actions designed to hold to a minimum the number a U.S.
agency personnel in foreign countries, the Secretary of
Defense has directed certain actions to reduce the number
of U.S. nationals sponsored by the Defense Department
overseas.
(al The original target of a 12% reduction by the
end of FY 1958 in the total personnel assigned to
MAAGIs and Missions based on March 31, 1957
strengths will be exceeded, the projected result
being a world-wide personnel reduction cf 15.2%
by June 30, 1958.
(b) A 12% reduction by the end of FY 1958 has been
directed in personnel in major component and joint
headquarters overseas based on December 31, 1956
strengths. One exception is NATO Headquarters
which will take an 8% reduction. As of April 1, 1958,
.the phased reduction was well ahead of schedule and
will be completed by June 30, 1958.
(c) An audit has been made of the necessity for
U.S. military and civilian employees in Japan
associated with support type and administrative
duties, to provide a basis for similar action in
other overseas areas.
(d) A reduction of approximately 40% of the mili-
tary personnel strength of U.S. forces in Japan has
been directed, effective June 30, 1958. Approxi-
mately 50% of this reduction will be accomplished
by absorbing the reduction of Armed Forces personnel
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ceilings for end FY 1958. The remainder of this
reduction is being effected by redeployment to
Korea, Olcinawa, Hawaii, the U.S. and Europe.
(e) All overseas commands are controlled by
manpower ceilings on their military and civilian
personnel, established by departmental head-
quarters on the basis of missions, programs and
workloads. Programmed reductions have been made,
stemming from a decrease in total authorized mili-
tary and civilian strengths.
(f) A continuing effort is made to reduce overhead
in overseas areas by cross-servicing within Services.
among Services and among all governmental agencies
abroad.
(g) A continuing review is made of the level of per-
sonnel requirements as a result of management and
inspection surveys, etc., with the objective of reducing
manning levels to the essential minimum: e.g., a
recent Department of Defense manpower audit of Japan
(See para. (c) ) recommended certain personnel reduc-
tions and is now being reviewed: Army surveys made in
Germany during FY 1957 resulted in a directed redut-
don of appronimately 1500 personnel; the Naval Inspec-
tor General's recommendations during 1956 included a
reduction of over 200 employees in Italy; and an Air
Force Manpower Working Group, established to assist
major commands in meeting reduced manpower ceilings?
made recommendations which were aopted as of
December 17, 1957, and which have resulted in the
reduction of 3,118 military and 712 civilian spaces with-
in the U.S. Air Forces in Europe (USAFE) area, and
3,486 military and 669 civilian spaces within the
Pacific Air Force (PACAP) area.
(h) A review of the Attache System is made period.-
ically to insure that the systems operate with the mini-
mum of manpower. An over-all personnel reduction of
11% was made during the period 1953-1955. The June
1957 Services' review of the Attache System directed
by the Department of Defense concluded that the systems
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were operating with a minimum of manpower and no
further reductions would be made.
(i) The maximum utilization of indigenous civilians
in lieu of U.S. nationals has been directed within the
limits of security, availability and such military con-
siderations as the need for mobility, combat readi-
ness, etc. Indigenous employees currently number
over 300,000.
2. Civilian Personnel
Actions and policies listed under paragraph I. apply to
U.S. civilian employees of the Department of Defense
with the exception of the action noted in subparagraph (d)
relative to Japan, where a reduction of 17% is being
effected.
3. Dependents
In compliance with Presidential directives and NSC
actions, policies applicable to dependents accompanying
their sponsors overseas have been under continual study
by the Department of Defense, and are presently being
reviewed by a Defense Ad Hoc Committee on the Movement
of Dependents. The following policies are currently in
effect:
(a) Dependents of military and civilian personnel
are authorized overseas travel only when stipulated
conditions are met. These conditions include housing,
community facilities, local political considerations
and qualifications of the sponsor.
(b) Dependent travel to overseas areas on a space
available basis has been eliminated for dependents of
military personnel who do not meet the criteria which
authorize dependents to move overseas at government
expense.
(c) To further deter the entry of unauthorized depend-
ents into overseas areas, Department of Defense policy
requires that sponsors be advised that they must be
prepared to furnish commercial passage for the return
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of such dependents who enter the overseas area after
June 6, 1957. The effect of this policy is limited by the
fact that, as U. S. citizens, such personnel who can ade-
quately suppert themselves have the same right to move
abroad as that possessed by any other U. S. citizen.
(d) In order to minimize the overseas movement of depen-
dents, shorter overseas tours have been authorized for
individuals who do not move their dependents overseas.
1'0
. .
(e) Certain Air Force Wings, Nasal Vessels; Naval Air
Squadrons and Marine Corps Fleet Marine perces serve
overseas on short period assignments.. 'Stich asiSignm- ents
neither require nor authorize the overseat unOvement of
dependents.
1. Summary
The following Department of Defense programs, currently
in operation, comply with Presidential directives and NSC actions
designed to minimize the number of U. S. citizen personnel
stationed abroad:
(a) The wo,r1d-wide reduction of U. 3. personnel in MAAG's
and Missions, although certain MAAG's show an increase
because of modification of mission.
(b) The World-wide reducticn of U. S. peruonnel in major
subordinate headquarters.
(c) Continuing manpower surveys and audits to reduce the
number of U. S. personnel employed overseas.
(d) The maximum utilization of indigenous civilian employees
in lieu of? U. S. nationals in the Services' overseas operations.
(e) The continuing review of criteria for dependent travel to
overseas areas.
'Within presently assigned missions, the programs and policies
of the Department of Defense in reducing the number of U. S.
citizens abroad are considered generally effective. However,
based on the final assessment of the results of the manpower audit
in Japan, one purpose of which was to establish a pattern for
such actions elsewhere, the Department plans to conduct similar
audits in other overseas areas. ?
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B. Department of State
1, Special Factors to be Recognized
It must be recognized that the Department of State per-
forms a variety of functions for other U. S. Government agen-
cies having an interest. in foreign operations. The Department
is reimbursed by such agencies for the salaries of the
employees required to perform the requested service. Thus
the Department does not solely control the number of em-
ployees it must have abroad. The number of employeee s
financed by reimbursement sources is determined by the H
amount and types of reporting and other serviees required:.
and paid for by other agencies of the Government.' ?
2. Ceiling Controls
An over-all ceiling control governs the number of domestic
and foreign employees of the Department of State. This total
number of employees is then translated into authorizations or
salary allotments to the domestic offices and posts abroad as
the respective number of positions which top management con-
siders justified.
In Fiscal Year 1958 the Department established a dual
control over the number of employees authorized for the
Foreign Service. The Assistant Secretary for Administration
issued a position limitation which accompanied a previously-
existing dollar limitation on funds for personal services.
These position and dollar controls apply to total geographic
areas, each under the jurisdiction of a Regional Bureau, and,
in turn, become position authorizations for the individual posts.
Shifts in strength from one post to another may be made by
the Regional Bureau so long as the total position and dollar
limitation is not exceeded. Requests for increases in excess
of the total limitation must be approved by the Department's
Office of Budget and require the same detailed justification
as in the preparation of the Department's annual appropria-
tion request to the Congress.
3. Hiring Controls
Since May 1957 the Department has exercised strict
review over the hiring of additional personnel for duty either
in the United States or abroad. In accordance with the
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wishes of the President, these controls were established as
the personal responsibility Of the Secretary (administered by
the Deputy Under Secretary for Administration). The prin-
cipal features of the Department's policy are: (a) The em-
ployment of clerical personnel has been restiicted to a rate
equivalent to the attrition of Foreign Service and Depart-
mental clerical employees. (b) Appointment of Foreign
Service officers of Class 3 has been limited essentially to
attrition from Foreign Service officer positions and has re-
quired the personal approval of the Deputy Under Secretary
for Administration before the Office of Personnel is per-
mitted to enter a new class of such officers on duty. (c) All
other officer-level recruitment has been frozen until a deter- ?
mination could be made in each individual case that the vacancy
to be filled is within the funded position ceiling of the request-
ing office. The Office of Personnel is then required to deter-
mine whether any officer on the rolls -of the Department is
available and qualified to fill the position. Only in cases
where a qualified officer is unavailable for reassignment is
recruitment from outside the Department authorized, and theit
only with the specific approval of the Deputy Under Secretary
for Administration.
4. Results in Designated Countries
The data for the countries in Volume II reflect a net in-
crease of 6 for the Department during the full course of
Fiscal Year 1958, including additional positions required to
perform services requested of the Department by other agen-
cies of the Government. The strength figures and the pro-
jections to June 30, 1958, have been reviewed and approved
by the budget officers of the Department's Regional Bureaus.
5. Appraisal of Effectiveness
The procedures reported herein are considered effec-
tive in respect to both the President's directive, transmitted
through the National Security Council, to hold overseas
employment to an operational minimum, as well as the
President's other directive stressing the need for strict con-
trols over the hiring of personnel.
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6. Other Steps Which Have Been Taken
The Inspector General of the Foreign Service Inspection
Corps has been directed to give particular attention in sub-
sequent inspections to the size of the American staffs in the
Department's missions in the designated countries.
C. United States Information Agency
1. Direct Hire
Agency policy is to assign Americans to overseas posi-
tionp for the following purposes:
? , (a) Policy formulation and review of output.
(b) Representation.
(c) Supervision of all activities.
(d) Security.
(e) Performance of technical or professional services
not locally available.
?
The Agency is committed to provide specified information
and cultural services for other U.S. Government organizations
represented abroad, i.e. , Department of State, International
Cooperation Administration, and Department of Defense.
The Agency relies heavily on the judgment of the Chiefs
of the Diplomatic Missions in arriving at decisions on
matters of program and personnel levels.
The Department of State provides administrative support
services for Agency overseas operations.
Employment ceilings are established by the Agency
Director or his Deputy for each geographic area and overseas
extensions of broadcasting and press activities.
The Deputy Director, as Employment Control Officer,
or the Assistant Director (Administration) must approve, on
an individual basis, the employment of all new overseas
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personnel with the exception of secretaries and Junior Officer
Trainees whose categories are controlled through estab-
lished quotas.
Foreign nationals and foreign contractors are utilized
in lieu of Americans whereVer possible.
? ? .The. Assistant ,Direeters.for the foni 'geographic areas ?
and?their Deputies, through frequent field.trips9 conduct on...
the-Spot, critical analyses to determine minizturprograrn, and
personnel reqtaternents in each of the countrieci?Cvithin their
? respective areas and takenetion? to adjtii3t einployrnent ceilings
accordingly.
American ornplOyment is being 'reduced in eleven of the 19.
countries designated "trouble spots.", tiers:mass Of ?One or two
Americans are planned for five-Countriciii N'Ariiiie no 'Change is
planned for three others.
? 2. Contract Hire
As %normal practice, the Agoney does not hire American
personnel for overseas assignments on a contract basis.
American personnel are normally assigned to the Foreign
Service as a part of the Agency's regular American personnel
complement. Except for Foreign Service employees. MIS
Missions are staffed almost exclusively with indigenous per-
sonnel. In an isolated instance, as in the English teaching
program. the Agency may contract with an American organi-
zation to provide specific overseas services for which the
contractor employs American personnel. This is done only
when required skills are not available otherwise and when the
service to be provided under contract is temporary and not
conducive to the employment of regular Agency personnel.
In support of the Binational Center Program, the Agency
issues grants to American personnel for service in foreign
countries. These grants are used to the greatest extent in
Latin American countries. They are subject to budgetary
limitation, agreement by the host government, and approval
of the need by the Area Assistant Director.
3. Dependents
The Agency is guided by the Foreign Service Travel
Regulations in determining the eligibility of dependents to
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travel overseas at government expense. These regulations
are included in the Department of State Foreign Service
Manual, Part III, Section 180,
D. International Cooperation Administration
I. Factors Affecting ICAls Overseas Employment
To put this report in its proper perspective, it is signif-
icant to note that ICAls total overseas complement of U.S.
citizen employees direct hire and contractor Mrd and
their .dependents averages less than 1.2% of the estimated
total of all U.S. nationals overseas. On July 1, 1957, ICA
had a total of 3,618 U.S. citizen direct hire employees
stationed overseas in over 60 countries. In addition, ICA*.
funded contractors had 1,635 17.8. Citizen employees abroad.
Of the direct hire employees, 2,859 were engaged in technical
activities, mainly on the Technical Cooperation Program.
The remainder were administrative employees who provided'
executive direction, programming, fiscal, control and admin-
istrative services logistical support ? for the technical
personnel. In the countries designated by the Operations
Coordinating Board for this study (omitting Afghanistan) ICAis
employment as of July 1, 1957, totalled 20772 U.S. citizen
dirsct hire and contractor employees. As of December 31, 1957
the corresponding figure was 3,170.
More than 85% of the employees serving ICA abroad are
connected with the Technical Cooperation Program. Activities
under this program have been steadily increasing in the past
few years, particularly in the newly developing countries.
Thus, unless the magnitude of the Technical Cooperation Pro-
gram is materially reduced by Congressional action, there will
continue to be increases in ICA staff in some of the countries
covered by this report. Succeeding parts of this report detail
the factors affecting ICA staffing levels overseas, and the con-
trol mechanisms the Agency uses to hold such staffing to the
minimum practicablo levels.
ICArs programs for technical cooperation and other economic
assistance are presented to Congress on a country-by-country
basis each year, showing the types of proposed programs and
projects to be undertaken, together with estimates of the num-
bers and types of personnel (administrative and program, direct
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hire and contract hire) judged necessary to carry out the
program in each country. When Congress approves the
size and composition of the annual Mutual Security Program,
ICA endeavors to carry out the activities encompassed with-
in the country programs consistent with the Congressional
Intent, to the extent the external political situation permits.
The Technical Cooperation Program, which is the
most.widely supported form of U.S. foreign assistance,
seeks by demonstration and training to transfer our techni-
cal skills and knowledge to the citizens of newly developing
countries. But technical skills and knowledge come packaged
in people -- teaching requires teachers. In the Technical
Cooperation Program, the teachers are technicians, -- U.S.
employees on the rolls of ICA and hired direct:3r by ICA .or
from some other participating U.S. agency such as the
Public Health Service. All project activities of ICA, and
particularly Technical Cooperation projects which utilize ?
approximately 35% of ICA technicians abroad, require the
stationing of U.S. nationals abroad both as technicians to
work on projects and as support personnel. Almost all of
these technicians are serving abroad at the specific request
of the cooperating countries concerned; and these countries
make significant contributions in funds, personnel and other
resources to make Technical Cooperation programs effective.
The demand for U.S. technicians in the Technical Co-
operation Program has been slowly but steadily increasing
as greater emphasis is placed upon this type of foreign
assistance and as the program is expanded to the newly
developing countries where the need for technical help is
most acute. Analysis of ICA programs over the past several
years shows that the countries in which on-going programs
have been expanded, as well as those in which new programs
have been undertaken, tend to be the newly developing nations.
These of course are the countries which stand most in need
of the managerial and technical skills essential to their eco-
nomic and political development. Needless to say, helping
to overcome these deficiencies in human resources is ono ?
of the, primary objectives of the Technical Cooperation Pro-
gram. But to effect any large scale reduction in the number-
of such ICA technicians abroad there would have to be a pro-
portionate reduction in the size and scope of the Technical
Cooperation Program.
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In more concrete terms, the newly developing countries
do not have enough economists, engineers, public health
experts, agriculturists, or educators to plan, supervise and
carry out projects in those fields of activity where develop-
ment is most needed. Such scarcities of professional and
technical experts make necessary relatively larger numbers
of ICA staff as technicians. Moreover, in many of these
countries it is impracticable to rely on the host country for
support activities such as property protection or motor pool
operations, nor can such essential services be obtained by
contract. /n short, it simply requires more staff to carry
on ICA activities in countries which are just beginning their
development programs than it does in countries which have
a long history and demonstrated competence,in economic
development.
Thus, the changing nature of ICA programs and the in-
creasing emphasis of our activities in the newly developing
nations of the workl inevitably will zeosult in increased ICA
staff in some countries. This does not mean, of course.
that ICA controls over overseas employment are inadequate
or ineffective.
2. Direct Hire Controls
Control of MA's direct hire employment overseas is
maintained by several coordinated administrative mechanisms,
within the general framework of the broad monetary and policy
controls exercised by Congress. ICA maintains continuous
and strict control over the number of its direct hire U.S.
citizens employed in all foreign areas, through the device of
a "Staffing Pattern Personnel Roster," issued monthly and
listing each specific direct hire U.S. position approved for
/CATE; overseas missions. Each staffing pattern lists only
such positions as may be accommodated within the "position
ceiling" previously determined by ICA headquarters for each
of its regional areas, after intensive program, technical and
management review of program needs. The position ceiling
for a region cannot be exceeded -- in terms of new positions
being requested because of new or revised program operations
in a specific mission -- unless the regional office makes the
position ceiling available by offsetting decreases in other
missions.
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ICA has taken action, by policy directive and changes of
procedure, to reduce the number of projects and concentrate
its effort on fewer, more significant project s within each
country program. Further, a recent policy directive requires
that a firm terminal data for each project be negotiated and
approved at the time the project is being initiated. These two
measures -- program concentration and limiting project
duration -- also tend to keep to a minimum the number of
technicians required in our overseas operation, aside from
any external reduction in the size of the ICA program.
An additional measure to control employment of U.S.'
citizens overseas is the agency's long standing policy of
utilizing to the maximum extent possible host country nationals
or "locals" for performance of service type operations. In
FY 1959, it is planned to make greater use of "third country"
technicians wherever the nature of the ICA program permits-
and the climate for acceptability of such technicians is favor-
able. Some success along those lines has already been had
with the use of Philippine and Indian technicians in some of the
Southeast Asia countries. To the extent it is feasible to use
an increasing number of third country technicians in our over-
seas programs, there will of course be some decreases in the
need for U.S. technicians.
At least two other factors are important as controlsinpon
the levels of ICA's total employment and thus upon its over-
seas employment. The first factor is the limitations placed
by Congress on the agency's administrative expense funds.
The effect of such limitations over the last several years has
been to widen the gap between the number of technical program
funded personnel and the administrative funded complement.
This has required that the administrative employment in ICA's
overseas posts be strictly controlled in some cases to the
point where essential administrative services, such as field
audit of fiscal transactions, have had to be curtailed. The
second factor, which on a long-term basis should gradually
reduce our overseas employment, is the underlying require-
ment throughout the Technical Cooperation Program to turn
over to the host country the institutions, projects, etc.,
requiring U.S. technicians just as soon as host country per-
sonnel can possibly assume their operation. Agency policy
directives, and all emphasis in annual program and project
reviews, stress that Technical Cooperation is not to be a
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? self-perpetuating operation, even though in the aggregate
there is always additional demand from the cooperating coun-
tries for technical cooperation assistance.
Effectiveness of all of these direct hire control mechaniam0
is scrutinized periodically at the missions through our regular
evaluation, internal audit, and inspection operations, as well
as being reviewed periodically by executive staff whenever
they visit field installations.
3. Contract Hire
ICA maintains control of contract hire employment under
its auspices by requiring each of its contractors to submit as
part of their proposals, a manpower budget detailing the num-
bers, salaries, summary position descriptions, and other data
on the personnel the contractor proposes to utilize to accomplish
the contract. These data are considered in the negotiation of
the contract and agreements are reached on the personnel com-
plement the contractor will employ and be reimbursed for.
Contract hire is usually utilized where capital or construction-
type projects are required as part of development assistance
programs, or where the nature of the technical assistance is
such that ICA or other U.S. agencies cannot furnish the kinds
of technical specialties required. In either case, ICA is
mainly interested in the end-product service, and generally
relies on the contractor's technical judgment of the numbers
and kinds of personnel he will need to achieve the objective
of the contract.
4. DepetIdento
As a general policy, ICA permits and encourages the travel
abroad of dependents with its direct hire employees except --
female clerical staff. The only usual limitations are the non-
availability of family housing, such as obtained until recently
in Korea, in which case a shorter tour of duty is sometimes
arranged. However, ICA does not encourage travel abroad of
dependents of its contractor employees unless, to obtain essen-
tial technical skills, it is necessary to allow the contract techni-
cians' dependents to accompany them. In such cases, dependents'
travel is normally approved only where the tour of duty is for
more than one year.
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To avoid sending additional U. C. citizen employees over-
seas, and within practicable limitations, ICA permits utili-
zation of employable dependents of its employees as local
staff in its overseas operations missions. While ICA does
not at present have accurate statistics on the number of depend-
ents of its overseas employees, a special survey as of April 30,
1957 showed there were 3,845 dependents in the 19 countries
designated "trouble spots."
5. Summary
ICA has positive programs currently in operation to corn-
ply with the stated intent of the NSC action to hold to a mini-
mum the number of U.S. citizens employed in foreign arean
by the U.S. Government. Besides the mechanisms detailed
above in this report, action is being taken to accomplish this-
objective by the assignment of specific total employment cell-
Ings for each of the countries, expressed in maximum numbers
of employees to be permitted on the payroll as of Juno 30, 1958
and June 30, 1959.
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E. Other Agencies
Other agencies, such at, Department of Justice;
Department of Commerce; Department of Health, Education
and Welfare; Department of Agriculture; Department of
Treasury; Department of Interior; Atomic Energy Com-
mission; American Battle Monuments Commission; Office
of the Comptroller General of the U.S.; and Veterans
Administration, have U.S. pernonnel overs.eas. All use
some means of control to limit numbers of U.S. citizens
abroad. Since the total number: of persons involved is
so small as to have little bearing on the over-all problem
with which this report is concerned, detailed listing of
their individual actions was not warranted.
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SECTION III.
RELATIONSHIP WITH THE NASH REPORT*
This report on "U.S. Employees Overseas" is concerned
generally with the "human" factors involved in the American
presence overseas, and more specifically with the practices
developed to improve foreign attitudes toward Americans
individually and collectively. The report to the President,
entitled "United States Overseas Bases," recently concluded
by the late Mr. Frank C. Nash,* also examines generally
the questions involved with American presence overseas in the
same 19 countries and in other areas but from the standpoint of
the problems of U.S. military bases and overseas concentrations
of U.S. troops.
Perforce, there is some overlapping in the tvio studies.
notably in the subjects: Personnel Factors, Jurisdiction
Local Economy, and Troop-Community Relations. Although
most of the Nash Report is devoted naturally to politico-military
matters, the author recognized the importance of psychological
factors in all dealings with the indigenous populations among
whom U.S. overseas personnel are obliged to live. For example.
the Nash Report states:
? . There are. . . many problems involved in the daily
operations. . . which have an important bearing on the
stability of the program and on its ability to withstand
mounting pressures and strains. These problems vary in
intensity between countries and regions, but, to one extent
or another, they are common to most of our haft? operations.
Our attitudes and actions with respect to them'cala become
either a positive contribution to our relations with the
particular country or a burden on, and detriment to, those
relations. Cumulatively these attitudes and actions can
spell the Guano orCallan? of our base program."
Differences in conclusions and recommendations, as between
the present study and the Nash Report, are of degree only. Those
*Limited distribution of this report is in process.
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responsible for this study made their own analysis of material
at hand, some of which is of more recent date than that available
to Mr. Nash, before reading the Nash Report, Dt spit of this
totally independent examination of the problem, there are no
contradictory findings.
Areas of common interest between this study and the Nash
Report are as follows:
Numbers of Personnel
Mr. Nash recognized the desirability of keeping personnel
to a minimum, criticizing demands that personnel ceilings be
lifted when personnel requirements do not dictate.
Selection of U.S. Citizens
Mr. Nash accented the importance of the right key officials
overseas. "Because members of a command, at all levels,
reflect the attitudes of their commanders, the careful selection
and indoctrination of these senior officers becomes a matter
of critical necessity. ? . It is mandatory that (U.S. military
commanders) be selected for key overseas commands who are
not only qualified on professional military grounds but are also
able to adapt themselves imaginatively to the peculiar respon-
sibilities and demands of operations in areas where scrupulous
attention to the customs and political sensibilities of the host
country is indispensable for the successful maintenance of the
U.S. military presence." He also called attention to the "need
in U.S. diplomatic missions overseas for foreign service
personnel who are experienced in the handling of base matters
and who understand the military problems involved."
Jurisdiction
Mr. Nash believed that Status of Forces Agreements should
be given wide publicity, so that the implementation of them would
come as no surprise. Mr. Nash states: "Jurisdiction arrange-
ments should be unclassified. . . The executive branch should
be prepared to release promptly detailed summaries of the facts `)
in important cases tried in foreign courts. . . The-Outcome of
U.S. courts-martial should be properly publicized in (the) host
country. ? ." He felt that "The United States should eXplore
methods for defining the concept and application of 'performance
of duty' where the host country refuses to accept the certificate
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of the military commander." He said, "There should be machinery
for a prompt and fair decision by negotiation or by some impartial
body." He wanted "prompt settlement of claims" under such agree-
ments, "in a manner consistent with local practices and customs."
And he thought that in all cases "the United States must be pre-
pared to assure to allied troops here, in principle, whatever it
asks of its allies in regard to American troops," particularly
since allied troops here are few in number.
? Indoctrination and Language Training
Mr. Nash believed that "a program of general indoctrination
and language training for U.S. military personnel and dependents
should be continued and expanded," and he added that "at least
one senior U.S. officer on each major installation should be
thoroughly conversant in the language of the receiving state."
Even a smattering of language knowledge would be worthwhile,
he thought, for "it would add materially to the general accep-
tance of the U.S. presence abroad if all commanding officers
could acquire facility in at least a few phrases of the host
country's language. . ." He said that "the authorities of
host countries and local leaders should be encouraged to
participate to the maximum extent," and he wanted to see "joint
boards and committees established at the national and local
levels." Elsewhere in the text he wrote: "It is strongly recom-
mended that this excellent move (to establish a training school
for key U.S. MAAG officers) be expanded to encompass U.S.
unit and installation commanders, their deputies, legal and
public information officers, and comptroller and other key
personnel," and he thought that indoctrination should include
current U.S. policies and the political, economic, and military
conditions in the host country.
Use of Local Personnel
On this point, these recommendations give the gist of Mr.
Nash's thinking: "Military authorities of the host country should
be encouraged to take over (certain) U.S. functions." The
United States should make "maximum use of indigenous skills,
products, personnel and contractors. . While it is recognized
that it is easier. . . to use U.S. agencies and contractors. . .
it is recommended. . . that, where there is adequate technical
ability and know-how in a given country, this capability be used ?
to the maximum extent, provided prices are competitive. . .
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In the hiring of indigenous personnel, it should be established
U.S. policy to apply strictly to the host government's labor laws
and regulations, including applicable social security regulations...
Case studies should be made by local commands and U.S. em-
bassies... to make sure that U.S. forces are matching...benefits."
He further suggested that cooperation with local non-Communist
labor organizations might in some cases help to meet security
requirements in the hiring of local personnel.
U.S. Vehicles
On the use of the American automobile, Mr. Nash's recom-
mendations were as follows: "All civilian type official vehicles
(should) be painted inconspicuously and provided with unobtru-
sive markings and licenses," and "cars owned by individual
members of the U.S. forces should bear the same type of license
plates as other motor vehicles in the host country." On the
matter of special privileges on gasoline, he had the following
suggestions: "Added arrangements be made to assure payment
by U.S. personnel for their fair share of road upkeep used by
their private vehicles," that "members of U.S. forces not be
required otherwise to pay gasoline taxes," and that "gasoline
dispensing facilities be located wholly within U.S. installations,
or in inconspicuous places used solely by U.S. personnel."
Shopping Facilities
Concerning Px's and commissaries, Mr. Nash felt that
"while members of the U.S. forces should not be forgiven taxes
on their local purchases, they should be permitted to purchase
through tax-free post exchanges and commissaries reasonable
quantities of those items...essential to their comfort and...
locally unobtainable in desired quantities and at reasonable
prices." He added that "local produce should not be stocked
(in such shopping facilities) wherever its sale would be in
active competition with local merchants." And he wanted U.S.
sales facilities to be "in inconspicuous places."
Troop-Community Relations
"No area in our overseas base program is snore vital to
the retention of foreign support for U.S. policies than the con-
tinuance of good relations between members of the U.S. forces
overseas and local populations." He urged participation by
U.S. personnel in local sports events, in church and religious
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programs, and in cultural manifestations. He recommended
"use of temporarily idle military equipment and machinery to
benefit local communities" and hoped that we would "expand our
community improvement programs," including emergency
relief.
Observance of Local Customs, Laws, and Mores
Under this general theme Mr. Nash made a special point
o&the importance of full recognition of host country sovereignty.
He liked the idea of flying the flags of both countries, or of all
countries in cases of multilateral arrangements, and he pleaded
for "serious consideration...for general application of the
development and use of regional defense organization uniform
insignia...; and vehicle and vessel markings, in addition to
normal U.S. insignia and markings." He thought it would be
"well to consider identifying installations used by U.S. forces
with a designation of the appropriate defense regional organiza-
tion." Then he wanted all signs and public bulletins in the
language of the host country as well as in our own, and host
responsibility for all external security installations used by U.S.
forces.
Developing Identification of Interest
He devoted attention to what he called "improving the sense
of identification of interest"--the concept of "mutuality." He
said it was "essential. .to emphasize the collective defense
basis for U.S. activities, the fact that our military presence
results from the wholly voluntary invitation of the host govern-
ments (thus constituting a manifestation rather than a derogation
of national sovereignty), and the fact that the terms of our base
arraogements are markedly different from those which formerly
e:cisted between local governments and colonial powers. The
common interest aspects of the U.S. base program should be
emphasized wherever possible." He thought that "military forces
of the host country should on all practicable occasions be in-
vited to participate in joint planning and in joint exercises and
maneuvers" which "should be given maximum local publicity."
"Facilities should, if possible, be used jointly," and host forces
"should also be encouraged to make use of any U.S. facilities
not in use." He wanted to "build installations for joint U.S.-host
country use as local evidence of the mutual nature of the U.S.
security program." He cautioned against "calling.. .attention to
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sensitive U.S. operations in which foreign forces do not share."
"The development of a local stake in our continued presence
can do much," he said, "to assure the welcome of U.S. forces,"
and he thought we ought to cooperate with local authorities...
to minimize any adverse economic impact of U.S. forces,"
particularly in inflationary areas and in the field of housing.
With a view to assisting all this he wrote: "It is evident that
a continuing and effective public information program is essen-
tial."
* * * * * * * *
In summary, nothing in this present study, with the excep-
tion of Jurisdiction and Px's, is to be considered as either
over-all concurrence with the Nash Report or as taking issue
with any part of it. The report is cited here because of the
close relationship of the two studies, both in time and in
subject matter.
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SECTION IV
GENERAL WORLD-WIDE ADMINISTRATIVE PRACTICES AND
POLICIES TO IMPROVE FOREIGN ATTITUDES TOWARD U.S.
PERSONNEL OVERSEAS
INTRODUCTORY REMARKS
In making this study, detailed examination was made of
the practices of the agencies having the preponderance of U.S.
citizens overseas; i. e. Department of Defense, Department
of State, U.S. *Information Agency, and International Cooper-
ation Administration. All agencies having U.S. citizens
stationed in any of the designated countries, however, were
asked to comment on their problems and their administrative
practices bearing on the improvement of foreign attitudes
toward U.S. citizen employees. Formal responses were re-
ceived from Department of Justice, Department of Commerce,
Atomic Energy Commission, Veterans Administration, and
General Services Administration. Their, administrative prac-
tices follow or are similar to those of State, USIA, and ICA
? and there were no observations in their reports which were in
conflict With these of the four agencies principally concerned.
The participating age:idea have identified the broad
categories of administrative practices which have been fol-
lowed to make the U.S. presence as acceptable as possible
in host nations. Six main areas emerge as a useful means of
? cataloguing these practices:
(A) Personnel Factors , Employees and Dependents.
The proper Selection and orientation of personnel designed to
serve abroad are of particular importance in creating and main-
taining the goodwill of receiving countries. Some training in
the language of the country to which the American is assigned
?is both practical and desirable. Other personnel factors dis-
cussed are tour of duty and rotation policies, the role of
supervision and inspection as a means of maintaining goodwill,
the hazards of overseas service and health and medical
benefits for overseas personnel, and problems of dependents'
education abroad,
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(B) Use of Lan? The taking of land for use in
constructing installations overseas has been a frequent
source of popular irritation. Methods now being used
and proposed to reduea this friction.are. discussed.
(C) 'Impect on Lace! Economy, The infusion of .
large American spending into a local economy 0.. either
the direct spending of American personnel and their .de-
pendents or U. S. ?government spending for building and
maintenance...- has a direct impact on the eeonomic ineti?ey:
tutions of the' host nation. ? Economic privileges frequently' ..
enjoyed by Americani overseas, such ae eaten. to PICts
and commissaries, can be both beneficial and objectionable,
to, the various host egUntries. Hogging of Americans over.
seas likewise can be a serious, problem in our relations
with the citizens of the host, country. The labor impact
of the II, S. 'government? s 'hiring of local employees,
eometimes removing surplus labor from the?eatmomyand
easing the burden of unemployment, other times contribu-
ting to an existing Shortage of skilled Workers -is is also
discussed in this section. Included as well are the lesser
problems of recreation facilities for overseas personnel,
their hiring of domestic servants, . and Currency regulations ?
and arrangements:
(D) Jurisdiction. The fourth of the broad problem
areas concerns jurisdiction over those U.S. personnel
who violate the civil or criminal laws of the host country.
The arrangements pertaining to jurisdiction are generally
established in the granting of diplomatic privileges and
immunities or in status of forces or other bi-lateral
agreements.
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(E) U.S. Vehicles. The impact on host countries of
large numbers of American-built and operated vehiales has
been of such magnitude as to warrant discussion in a
separate section.
'(F) Community Relations. Practices designed to improve
community relations between overseas personnel and the local
population are discussed in terms of press relations, cultural
presentations, athletic competitions, and participation in
civic and charitable programs. Observance of local customs
and mores and settlements of death benefits and claims are
also discussed as practices bearing on improvement of commu-
nity relations.
Finally, this section includes a summary of administrative
practices followed by American private enterprises having
operations overseas. The detailed statement of these prac-
tices, prepared by the Office of Private Cooperation, U.S.
Information Agency, is included as the Annex to Volume I
of this report.
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A. PERSONNEL FACTORS
1. Selection of Personnel
Civilian Agencies. The Department of State, USIA, and
ICA recruit on a centralized basis, assessing candidates'
probable adaptability to life abroad through detailed back-
ground investigations, examination processes and panel
interviews. In addition to the educational and experience
qualifications, attention is given to personality factors.
Foreign Service officer personnel of the Department of
State are appointed as a result of a nation-wide, highly com-
petitive written and oral examination process, substantiated
by a full field background investigation. Although the
appointment of Foreign Service Reserve Officers in the
Department of State at the present time is limited, when
such appointments are required, the panel interview is
used in conjunction with the background investigation to
determine both the candidate's professional qualifications
and his probable adaptability to life abroad.
Lacking career service legislation with provision for a
nation-wide written and oral examining process for select-
ing junior officers, USIA stresses the use of a full back-
ground investigation and an extensive oral interview in
judging the professional and personality qualifications of
candidates. ICA, having a variety of highly specialized
technical positions to fill, is required upon occaFion to
make compromises between the technical qualifications of a
candidate and personality attributes which would be prefer-
able. In such circumstances, assuming the candidate's
technical qualifications are superior, the decision on his
adaptability must be made in light of the necessity to fill
a program position resulting from a bilateral agreement
with host countries.
In the case of married candidates, the three agencies
are interested as well in background information on the
candidate's wife, who is recognized as an important poten-
tial member of the American community abroad. Clerical
personnel are required to be single and without dependents
at the time of appointment for overseas assignment.
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The Department of State conducts medical examinations
for 'overseas personnel of the three agencies. Where in-
dicated to be appropriate, the medical examination in-
cludes a psychiatric interview as an additional screening
mechanism to minimize the possibility of sending abroad
a candidate who will not adapt himself to life in the host
country.
? The policies of the three agencies provide that
? dependents may accompany their principals to the post of
assignment at government expense. In the.,Foi?cigh Service,
traditionally, service abroad has been perforrned by the
"family unit." Wives play a particularly. in-portant con-
tributory role in representing the United States abroad.
? Defense Agencies. All military personnel -- career-
ists, non-regulars and Selective Service inductees alike --
serve their proportionate share of foreign duty. For
certain types of foreign duty, which involve official con-
tact with nationals of the host country, careful and exact
selection of personnel is made. Such assignments include
duty as an Attache and the Military Assistance Advisory
Groups in certain military missions and with international
staffs. Factors considered in the selection of these per-
sonnel include tact, diplomacy, personal reputation and
habits, initiative, discretion, adaptability, motivation,
language qualifications, technical training and family
situation. Consideration is also given to the qualifications
of the wives of such persons. For example, the suitability
of an officer's wife for the type of life that Attache duty in-
volves is considered in the selection of Attaches and, within
legal and fund limitations, the wives of Attache's designate
are trained in the customs, background, culture and language
of the country to which their husbands are accredited.
In the assignment of personnel to troop units overseas,
strength and skill requirements and the' necessity to make
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equitable distribution of foreign service among all qualified
personnel preclude the application of such a high degree of
selectivity. Caro is exercised, however, to restrict the
overseas assignment of military personnel whose records
indicate that they would be undesirable representatives of the
United States.
As a rule, dependents of key personnel are expected to
accompany their sponsors overseas and to participate in
local activities and functions. Dependents of other military
personnel -- officers, and enlisted personnel of grade E-4
with 4 years of service and above are permitted to accom-
pany their principals except where relatively short tours of
-duty exist, or where conditions of climate, lack of hoiising,
military operations or other factors are adverse to dependents
living abroad.
The large numbers required to man major troop duty
stations overseas create a considerable impact on the host
country, but the country reaction appears to be conditioned
more by the quality of the personnel than by the numbers.
Civilian employees for overseas duty are selected for
their technical qualifications and for personal characteristics
?
such as loyalty, adaptability, integrity and sobriety. A survey
made in 1951 to determine the best techniques for selecting
qualified personnel for overseas positions showed that those
persons who were in the Federal service at the time of that
selection for overseas assignment did significantly better
than those who were not. Hence, personnel are recruited
insofar as possible from among Service employees who have
established their competence and qualification for overeeas
assignment. In all cases checks are made with supervisors,
previous employers, educational institutions and the police. -
Overseas commands permit dependents to accompany their
civilian sponsors when housing is available and the political
climate and military situation are favorable. Insofar as
possible, special attention is given to the adaptability of the
employee's family and to his ability in the language of the
country to which he will be assigned. All Services limit the
recruitment and transfer of U.S. civilian personnel for over-
seas duty by making maximum use of qualified persons avail-
able locally overseas.
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2. Orientation and Indoctrination
Civilian Agencies. Clerical appointees of the three
agencies receive orientation training in Washington prior to
departure for duty abroad. These courses include general
area briefing, lectures and discussion on foreign attitudes
toward the United States, requisite behaviour abroad, inter-
cultural communications, current American scene and Ameri-
can foreign policies. Clerical appointees of the Department
of State and USIA, in addition, serve from three to nine
months in Washington as an additional testing period.
The officer personnel of the three agencies all receive
indoctrination training. The length of his training varies from
2-1/2 to 12 weeks (i.e., 2-1/2 weeks in ICA, 8 weeks in USIA,
and 12 weeks in State). In the case of ICA, such orientation
is also available to its contract and participating agency per-
sonnel but attendance is not mandatory. The training of newly
appointed junior Foreign Service officers also includes language
training;
In nearly every instance newly assigned officers and
clerks of the three agencies are mot at the airport or dock
in their country of assignment by representatives of the
agencies. Shortly after arrival at post, briefing interviews
are scheduled with key officials, giving the new arrival de-
tailed information regarding housing, local customs, local
mores and situations to be avoided in the local community. In
addition to these measures uniformly conducted at each
agency's post or mission, a recent survey by the Foreign
Service Institute disclosed that in 6 of the 19 designated coun-
tries the civilian agencies have joint, formally organized
orientation programs. Civilian personnel (and dependents in
most cases) of 10 U.S. agencies, the military attaches, and
MAAG personnel have been and are represented at these
formal orientation programs in Afghanistan, France, Germanys
Italy, Turkey, and Viet-Nam.
Within the limitations of the available classroom space,
security restrictions, and without cost to the government,
wives of personnel of the three agencies are permitted and
encouraged to participate in the indoctrination courses prior
.tto departure abroad for their first assignment. This orier4an
tiOn training is supplemented upon arrival by similar training
at may of the posts abroad.
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Defense Agencies. The orientation and indoctrination
programs of the Military Forces are applied selectively
according to the nature of the mission to be performed over-
seas a from the intensive training of key personnel to the
troop briefings of enlisted men in a replacement unit. For
example, the orientation of persons assigned to missions,
advisory groups, international staffs and Attache offices in-
eludes COurstia ,of instruction in a, foreign language, public
relations, local customs, country research, community rota-
tions, security practices, international agreements and area
background. Opportunity is afforded for talks with area-
experienced personnel and for correspondence with counter-
parts serving in the country concerned. Effort is made to
stagger senior personnel changes to insure continuity 1of
operations and preserye at all times a hard core of experienced
? personnel. with an understanding of customs of each concerned
country. .
Worthy. tf notels? a special orientation and training course
for key Military Assistance Advisory Group personnel -- field
. grade offie.eri.and, above which was recently approved by the
Secretary cif:Defense. -Personnel reductions, new weapons
and increased .emphasis on the military-politico-economic
role of the .IYI-A.A.Gs. have placed, additional demands upon the
Group. The 3 si 4 week course is designed to improve their
competence in administering the Milita:ry Assistance Program.
Approximately. 3 6 months before departure for overseas
assignment, these officers will participate in a self-study
program, including off-duty language training.
Troop-briefings through talks, films and Service
pamphlets 0... are given troops prior to departure from home
stations and upon arrival:overseas. They cover the avail-
ability and type. of housing, educational facilities, recreational
facilitiel? local customs, climate, the cost and standards of
living,. the importance of harmonious relations with native .
perscinnel, 'currency regulations; etc. The President's letter
to military personnel assigned,overseas, and DOD publications
such as "Pocket Guide" pamphlets on the history, language
customs, laws and mores of.a country, are distributed.
Service publications which are made available include such
pamphlets ath:,"Serving Your Country Overseas," "International
Communism,". "The Country in Which You Serve." Distribu-
tion of such material, initiated in 1942, has become standard
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practice among all Services. The orientation and indoctrination
of military personnel is continued throughout the individual's
tour of duty overseas.
Formal training courses, conferences, briefings and printed
material provide information for prospective overseas civilian
employees regarding the country to which assigned, the employ-
ment conditions, facilities, and the responsibilities for advancing
good will in foreign lands. One of the reading papers is a
"Statement of Living and Working Conditions" prepared for the
overseas post. It contains such information as the following:
(a) the employee's responsibility as a representative of the
American way of life; (b) significant differences between the laws
of the area and those of the United States, law enforcement, and
protection afforded by courts of the area; and (c) a statement that
the employee and his dependents are are required to respect, and
may be subject to, the laws of the area where they reside. Addi-
tional training and guidance is provided through station reports
and correspondence with the personnel whom the candidates are
replacing at overseas stations.
Within legal and monetary limits, wives of Attaches are
trained in the customs, background, culture and language of the
country to which their husbands are assigned.
Courses to assist families in establishing residence in
foreign coungries and to emphasize the obligation of the families
to develop and maintain good community relations during their
overseas residence are conducted at bases of departure for
dependents scheduled for overseas travel. These efforts are
supplemented with a battery of pamphleti and brochures for in-
dividual consumption. Further indoctrination and orientation of
families of Defense personnel is administered by overseas corn-
mander s through films, slides and lectures.
3. Language Training
, Civilian Agencies.
The Department of State has an in-
tensive program to improve the language qualifications of Foreign
Service officers. All junior Foreign Service officers must
qualify in at least one modern foreign language before they will
be found eligible for promotion. Newly appointed Foreign
Service officers of Class G who have not passed the language
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examination in connection with their appointment are required
to take intensive language instruction at the Foreign Service
Institute prior to their assignment abroad. All overseas em-
ployees of USIA and ICA are encouraged to acquire at least a
modest vocabulary in the local language and to avail themselves
of formal language instruction facilities where they exist at the
post of assignment. All three agencies have programs of assign-
ing selected officer personnel to extended language training at
appropriate times in their careers/ Both ICA and USIA are
providing for language training ovOr a broader base.
Foreign Service Institute reports as of September 30, 1957,
showed a world-wide enrollment of 2,260 U: S. personnel and
dependents in field language training programs being conducted
by the civilian agencies, exclusive of the attendance at FSI's
field schools of language training. This enrollment included
1,939 personnel and 321 dependents covering 12 agencies in-
cluding the military services.
As in the case of orientation training, wives are encouraged
on the same basis to participate in language training at those
posts abrOad Which have formal language training facilities Or
to obtain private tutelage in the local language.
Defense Agencies. noth mandatory and voluntary language
courses are utilized in training personnel for overseas duty,
depending upon the individual assigned mission.
Language training is mandatory for those who will work
closely with host government personnel, such as persons assigned
to Attache duty, MAAGs, missions, international staffs, intelli-
gence functions and other liaison duties. Where available,
qualified personnel already having basic language ability are
selected for such assignments. Where such personnel are not
available, selectees may be trained at the Army or Navy
Language School, in a 200-hour commercial course in the
Viashington, D. C. , area, or in a. special language course over.
seas, among others.
As far as funds will permit, off-duty language training is
made available in overseas theaters on a voluntary basis. Until
recently in the European theater, many military personnel were
required to take the native language courses during duty time, but
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reduction-in-force and budgetary limitations have resulted in
the discontinuance of this program. The value of off-duty study
through USAFI language courses, Army Education Centers and
civilian agencies is emphasized.
Civilian employees are given on-duty language training in
overseas areas on an "as needed" basis, within fund limitations.
Facilities of Army Education Centers are available to civilian
personnel at no charge, on a space available basis, and study of
the language of the country is encouraged.
Dependents of both military and civilian personnel are
eligible for voluntary, Service-conducted, native langauge classes
on a space available basis. ?
In Europe, until recently, a mandatory native language
program was included in the dependent school curriculum of
both elementary and secondary grades. Due to reduction-in-force
and budgetary limitations, the program was discontinued in the
elementary schools. This action caused many unfavorable com-
ments in the European press. The reestablishment of such
courses in Service-operated schools in Europe has been strongly
urged.
4. Tour of Duty and Rotation Policies
Civilian Agencies. The Foreign Service, being a career
service administered on a world-wide availability basis, recog-
nizes in its tour of duty policy (a) the needs of the post as
reflected by the position to be filled, and (b) the needs of the
individual officer for development in related fields of activities
of the Foreign Service. The tour of duty policy of USIA is
designed to provide a sufficient period of service in a given area
of the world for the officer to develop the personal contacts which
are essential to the effective performance of his mission. The
tour of duty policy of ICA, on the other hand, is generally
directed to provide the necessary technical skills required by
the particular Country program. To the extent practicable, the
policies of the three agencies also endeavor to provide a reason-
able sharing of hardship posts, interspersed with assignments
which will provide relief from rigorous climate or other adverse
conditions. ICA's economic assistance programs are carried out
in some 60 economicallY under-developed countries, primarily
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hardship posts. In many cases this limits the ability of ICA
to provide relief from adverse conditions by reassignment
of its employees.
Collectively these service needs preclude the adoption of a
policy of short tours of duty under which the dependents of
officer personnel would be encouraged to remain in the United
States for the duration of a particular ashignment. In the
Department of State the concept of the Foreign Service family
Wait aerving abroad, in itself, precludes separation of the
officer from his faniily except in emergency situations.
Defense Agencies. It is the general policy that insofar
as possible acceptable patterns of American living will be en-
joyed by military personnel and their dependents wherever
they may serve; that efforts will be made to minimize periods
of forced separation and adverse effects of overseas service;
and that decisions to move dependents overseas will be based
on the standards of living and general desirability of the area,
the political climate in the country concerned, the probability
of potential enemy attack and the possible adverse effect that
the presence of dependents might have on a unit's mission,
operations, readiness or combat capability.
Overseas tours are generally established at the maximum
duration with due consideration for the health, morale and
career development of the individual. Other factors in deter-
mining the length of tours are existing medical, housing and
educational facilities, and isolation of the duty station. While
the standard overseas tour for military personnel accompanied
by dependents in a desirable overseas location is 36 months,
tours of duty vary from 12 to 36 months depending upon the
desirability of the area, with a provision for voluntary exten-
sion up to a total of 48 months overseas duty. Consideration
is given to a reasonable sharing of service in both desirable
and undesirable areas.
DOD policy also provides that: tours of duty, to the maxi-
mum practicable extent, will be of uniform duration for per-
sonnel of all Services in a country or area; and that personnel
serving overseas without their authorized dependents will be
permitted a differential in the length of their required overseas
service if the separation is due either to military conditions or
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to the sponsor's decision not to move his dependents overseas.
Standardized tours of duty for civilian employees require a
maximum overseas tour of 24 months. Shorter tours are
authorized for certain occupational categories and for geo-
graphical areas where living conditions warrant a shorter tour.
There is no fixed rotation policy for civilian eniployees;
however, administrative reemployment rights were established
several years ago for civilian employees of the Services and,
increasingly, employees are moving from State-side to overseas
posts, with return to State-side.
Statutory reemployment rights are desirable, giving the
overseas employee the right to return to the position held imme-
diately before overseas assignment, or to a position of like
seniority and pay.
5. Supervision and Inspection
Civilian Agencies. In addition to the normal responsibili-
ties of supervisory officers at the post, supervision and inspec-
tion activities of the three agencies are directed from the
Washington headquarters. These consist of (a) a fully documented
record of field performance; (b) frequent inspection visits from the
headquarter s' organization by agency officials reviewing the
effectiveness of program operations and personnel performance;
and (c) periodic reviews by inspection and audit teams.
The efficiency rating systems of the three agencies give.par-
ticular attention to the personal qualifications of officers and
clerks se.rving abroad. The record of performance includes such
elements of adaptability as tact, character, conduct, attitude,
relationships with foreign nationals (including foreign national
employees), emotional stability, and other factors pertinent to
representing the United States abroad. These data are carefully
considered by selection and assignment boards in Washington.
In addition, other reports on personnel are submitted to the
Department of State by the Foreign Service Inspection Corps as
well as by the Department's security officers and to ICA and USIA
by comparable organizational units in those agencies. Where ad-
verse information is reCeived indicating failure of an employee or
his family to adapt to life abroad, the agency concerned moves
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promptly to re-assign or terminate the employee, as appro-
priate.
Defense Agencies. Supervision and inspection of military
personnel is a normal function of military command. In addi-
tion to the supervision provided at each command level, inspec-
tions are conducted by appropriate elements of the Military
Departments and the Office of the Secretary of Defense. For
example, the Inspector General of the Army, Navy, Air Force
and Marine Corps respectively conduct periodic inspections
covering matters relating to personnel, including a review of
morale facilities in the area and disciplinary problems which
indicate, among other things, problems arising from Contact
with foreign nationals. Corrective action is taken as soon as
problems are identified, In the case of key personnel overseas,
supervision is effected by staff visits from their Departmental
supervisors in Washington.
Inspection and ?Valuation of civilian personnel management
programs is a continuing responsibility of commands at all levels.
Spetial attention is given to review of the recruitment, selection
and orientation functions at installations selecting personnel
Lot duty outside the ytjMted States and at oversea installations
where personnel are hired locally.
Supervisory development is an active program within the
Departments. It is designed to insure that all supervisors, regards
less of job title or citizenship, are equipped to' administer human
and material resources under their jurisdiction with economy
and efficiency. Courses are held for all supervisors citizen,
nonscitizen ot indigenous.
6. Nealth and Medical 13enefits (U.S. Employees and Locals)
Civilian Agencies. American employees of the three agencies
are covered under medical programs administered under the
provisions of the Foreign Service Act of 1945, as amended. These
programs include physical examinations, immunizations, treat-
ments, travel expenses to the nearest suitable medical facility,
and medical supplies which may be purchased by officers and em-
ployees for their personal use or the use of their dependents.
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Dependents of officers and employees of the three agencies
receive examination, immunizations, and may purchase medical
supplies. They do not now receive treatment or travel and
transportation at government expense to suitable hospital
facilities. The medical program provides examinations for
local employees as well as voluntary immunization programs,
but no medical coverage is provided to dependents of local em-
ployees.
in many areas of the world unhealthful conditions, climate,
personal risks resulting from violence, etc. , have required that
an appropriate incentive be provided for service in such areas.
To offset these conditions a structure of post differential allowances
is administered by the Department of State. While the post
differential program has no direct relationship to the improve-
ment of foreign attitudes towards U. S. citizen personnel over-
seas, the Department of State recognizes the need to avoid '
.offending the local pOpulalion by the publication of the term
"hardship" in connection with the host country.
Defense Agencies. Military personnel on duty overseas
entitled by law to full medical care at medical facilities of the
Services. Authorized dependents of military personnel, also,
are entitled to medical care, but it is limited to diagnosis,
treatment of acute medical conditions, surgical conditions,
contagious diseases, immunization, and maternity and infant ,
care. The provision, from Government stocks, of items such
as hearing aids and spectacles is authorized at invoice cost to
the Government where adequate civilian stocks are not available.
Civilian employees of the Department of Defense are author-
ized to receive treatment for on-the-job illness, injury and
dental conditions requiring emergency attention. For other
than emergency treatment, such personnel assigned overseas
are "furnished medical care subject to the availability of
facilities only in the absence .of 'adequate civilian medical
facilities as determined by the appropriate major commander."
Dental care is limited to emergencies, dental treatment for the
relief of pain or acute septic conditions, or for dental conditions
associated with serious illness requiring hospitalization.
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7. Educational Facilities
Civilian Agencies. Agencies pay educational allowances to
U.S. citizen employees in foreign areas who are faced with
unusual expenses in schooling of their.children in grades one
through twelve. The large majority of children of Foreign
Service personnel, as well as USIA and ICA personnel, attend
local schools at the posts of assignment where teaching is in
English. A substantial number of children, however, do attend
foreign language schools, and with apparently satisfactory
results. The Defense Department maintains a separate system
of U. S. tax-supported schools administered comparably to U.S.
public schools. Less than one-fifth of the Foreign Service
children are able to attend these schools. ICA is proposing
legislation which would permit use of Mutual Security Funds to
construct school buildings in those countries where ICA is unable
to lease facilities for the establishment of a school to meet the
needs of employees' dependents.
In most of the schools used by the dependents of personnel
of the Department of State, USIA, and ICA, the American children
mingle with local children and often with children of other
nationalities. Schools that are organized abroad primarily for
American children have encountered, with a few notable ex-
ceptions, no objection on the part of local authorities. Indeed
many of these schools have been welcomed as a means of meet-
ing over-crowding in the local public school system, but children
attending "American only" schools such as those operated by
the Department of Defense undoubtedly have less opportunity
to learn foreign customs and habits from their classmates. On
the other hand, children educated at "American" schools tend
to maintain their ties with the United States mare closely than
do their colleagues who attend local schools.
Americans on indirect hire, such as those working for firms
under contract to.the U. S. Government, are generally afforded
opportunities to utilize existing local educational facilities for
their children or are given some form of compensation to offset
the cost of schooling abroad.
Defense Agencies. Local school facilities in foreign coun-
tries are used whenever suitable instruction is offered in the
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English language and when use does not overburden the atiail-
able facility. Educational serviccsfor the majority 6f minor
dependents of both military and civilian personnel are pro.:
vided in Service-operated schools, using facilities available
for leasing or facilities constructed on base.
Schools for dependent children must meet the standards of
accreditation agencies in the United States to qualify children
for re-entry into American public schools when their sponsors
return home or when they seek admission to college. It is,
therefore, frequently necessary to establish American schools
staffed with American teachers (who constitute an important
segment of the Departmental civilian employee population in
overseas areas) even when European schools are available. In
such instances, local teachers are usually hired to teach the
native languages when their qualifications are comparable with
those required of State-side teachers. (The majority of the
school's clerical and custodial personnel are also indigenous).
Policy provides for the admission of citizens of other nations
to United States operated schools where there is no objection
from host countries and when the local commander, with the
approval of the major area commander, determines that it will
serve the best interests of the United States and will not require
enlargement of existing facilities and services.
The dependents' school program includes sponsored visits
of American pupils to native schools and corresponding visits
of native school children to American schools. The program also
includes joint social and cultural activities, play and social
hours, and the presentation of dramatic plays and skits. Such
activities are commonly planned by the school student council.
In conjunction .with their program of studies, the schools
tale classes of students to visit cultural centers, farms and
businesses, and places of historical interest in the area of the
school.
Both school and base libraries also provide rewarding Con-
tacts with foreign peoples and their cultures. Indigenous per-
sonnel work in U. S. libraries, and are supervised by U.S.
librarians, thereby learning American library prOCedures.
U.S. librarians also establish contacts with foreign librarians.
by mutual visits, attendance at library meetings, and by loan
of library materials. Excess periodicals and other publications
are distributed to local native educational institutions, including
libraries.
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In isolated areas where the number of students is insuffi-
cient to establish a school, the Military Departments provide
the Calvert System of Home Instruction for Grades 1 through 9
and extension courses of the University of Nebraska for Grades
10 through It inclusive.
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(
B. USE OF LAND
Defense Agencies. The acquisition, management and
disposal by the Military Departments of all real properties
located in foreign countriea is governed by international
law and agreements, the applicable provisions of U. S.
law, the applicable provisions of thcal law, and implement-
ing governmental policies. Such real estate operation
overseas must also give consideration to local laws,,
local customs, control ovOr real estate exercised by
local governmental agencies, and other factors that may
affect policies and procedures.
Defense policies provide: that care be taken to insure
that the least disruption possible is caused local populations
by real estate activities; that maximum use be made of
local governmental agencies in the handling of real estate
matters with their own nationals; that the number of indi-
viduals of the Armed Services dealing with local govern-
mental officials in overseas commands be kept to the mini-
mum, and frequent changes in personnel be avoided; that,
wherever practicable, a single office be assigned the
responsibility for conducting real estate operations for all
Services in a specified Locality; and that close liaison be
maintained among the Services to insure the most effec-
tive handling of real estate matters and the best use of
the real estate.
Some duplication of requirements among the Services
and a tendency to maximize operational needs have neces-
sitated closer coordination and review of individual pro-
grams. Careful check is made to insure that the bases
and facilities programmed by each Service are essential
to the implementation of the strategic guidance and joint
plans approved by the Joint Chiefs of Staff. In cases
where more than one Service has a requirement for the
same type facilities, e.g., ports, airfields and communi-
cations facilities, such facilities must be designed, when
possible, to accommodate similar or related require-
ments of other Services in the same area. Wherever
feasible, the 13. S. Forces use land and faciltieo Jointly
with the host nation,
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Procedures, in general, are as follows:
Each Military Service coordinates its foreign base
requirements (which are based on JCS plans) with other
Military Services in the area and submits its require-
ments annually to the Joint Chiefs of Staff.
The combined current United States Base Require-.
ments Overseas (USBRO) is approved by the Joint Chiefs
of Staff.
? On the basis of approved USBRO, the individual
Services submit their requirements to the Department
of Defense, and plans and positions pertaining to the
negotiation of agreements with foreign governments for
military facilities and operating rights are established.
The Secretary of Defense requests the Department
of State to take action, with such Department of Defense
assistance as is required, to obtain the necessary rights
from the host country.
Under bilateral agreements, land is generally made
available by the host government without cost to the
United States Forces. Where possible, local personnel
are permitted to cultivate the land under U. S. control
as in the cases of antenna installations located on lands
where several thousand acres may be under cultivation.?
In the disposal of foreign excess real property, the using
Service coordinates its plans with other Military Depart-
ments, for determination of their requirements. When it
has been determined that property is excess, disposal is
made as promptly as possible in accordance with appli-
cable laws, treaties or agreements, and in conformance
with the foreign policy of the United States.
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C. IMPACT ON LOCAL ECONOMY
I. Shopping_ Privileges
Civilian Agencies. Generally, where military post
exchange facilities exist, access is granted to personnel
of the civilian agencies and their dependents. Field
reports indicate a resentment by local nationals in some
countries to (a) the sale of imported "luxury" items not
otherwise available to the local population rad (b) the
competition which these shopping facilities offer to local
merchants0 in one instance a recommendation was
noted that a new location should be selected for the PX
or commissary facility which would minimize the con-
spicuous use of such facility by American personnel.
With relation to foodstuffs and related sundries, the
Foreign Service Act of 1946, as amended, provides
authority for the establishment and maintenance of emer-
gency commissaries or mess services abroad as well as
authorization to assist in the establishment and mainte-
nance of privately-operated commissaries and mess
services. Experience in making mess facilities available
to local employees of the U. S. agencies abroad has
been generally satisfactory, but only in limited instances
and for a limited number of items can locals be permitted
tb use the commissaries, since the commissary opera-
tion entails "duty-free" commodities which, under various
exemptions from imposition of customs duties, can only
be used by Americans. The need for the continuation of
such facilities is recognized both by private American
business for its own operations abroad and by U. S. Gov-
ernment agencies. Measures to avoid appearances of
conspicuous consumption, or to curtail black market
activities and related undesirable aspects of the mainte-
nance of commissary and PX privileges can best be
developed and implemented by the principal officers at
post. Ample authority exists for disciplinary action to
be taken against American or local employees of any of
the three agencies for reported black market activities.
Defense Agencies. As a citizen of a prosperous and
highly industrialized civilization, the American citizen
enjoys a standard of living and is used to a way of life
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which is far different from that of many of the countries
in which he serves. His pay, emoluments and immuni-
ties set him apart from the indigenous population and ,
are often a cause of friction with them.
Tho Exchange Service recognizes a dual responsi-
bility in all overseas areas of maintaining high morale
for its patrons while, at the same time, functioning to
create the least possible disturbance to the local econo-
mies of the host countries. In this connection, every
effort is made to employ local people, make local con-
cession contracts, and to refrain from captive local
procurement of scarce merchandise. Continuous
efforts are made to adjust pricing of resale items and
services in such a way as to meet customer acceptance
and local community approval. As a result of this
practice good relationships with local peoples have
existed for the most part.
Procurement of merchandise is made throughout
the open market without favoritism. Exchanges may pro-
cure from either local foreign markets or from sources
in the United Ctates. With the agreement of the host coun-
try, overseas commanders may extend the purchase and
service privileges to all categories of personnel whose
mission is deemed to be in the interest of the command.
As in the United States, local problems over types
of merchandise on sale arise from time to time and are
resolved locally.
2. Housing
Civilian Agencies. Competition of American
employees of the three agencies with local nationals of
the host countries for scarce housing is unavoidable in
many posts abroad. The basic policy provides for the
use of government housing, if available, or the private
leasing of housing with a quarters allowance. The
policy allows American employees to obtain housing
which most nearly approximates U. C. standards of
health, comfort, safety, and security. Where necessary,
some housing is leased under arrangements which per-
mit suitable renovation to bring the hbusing to an
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' CA.ME1DILNTIELL
acceptable standard. The reactions of local nationals
vary widely with respect to the housing obtained by
American personnel. Where the scarcity of housing is
a Ensure? of irritation, programs adopted at the post
provide the only effective means of minim-Thing the
problem.
Defense Agencies. Almost without exception, foreign
countries where U. S. troops are stationed are char-
acterized by a shortage of housing for their own popula-
tion. The use of local private housing by large numbers
of U. S. personnel tends to raise housing prices and to
withdraw the best of the available housing from the local
populace, This is among the most important of the
problems which affect the attitude of foreign citizens
toward U. S. personnel.
As a primary measure in the correction of this prob-
lem, the Department of Defense constructs, leases, or
otherwise acquires family housing for use of military
personnel in foreign countries. Since housing, in spite of-
its acknowledged importance, cannot compete for appropri-
ated funds with urgently required operational facilities,
it has developed naturally that housing is constructed or
acquired largely to the extent that this can be done without
the use of appropriated funds.
The Surplus Commodity Housing Program, which
authorizes the construction of housing from funds obtained
in agricultural commodity sales, has already produced
2.300 units of housing which are now occupied by U. S.
personnel in the United Kingdom and Japan. An additional
5,200 units are now under contract in Spain, France, and
Japan, and more than 7,000 additional units in 9 countries
(including Italy, Spain, France, Morocco, Iceland, and
the Philippines) are planned for construction in FY 1959.
The Rental Guarantee Program, under which the
Department of Defense executes .a guarantee of income
for privately built, privately financed housing, has pro-
duced 4,800 units of housing in France and 700 units in
Morocco.
In spite of the important progress achieved to date,
there remain important deficits of housing in almost all
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LUNE 11.)Z1TE1/14.?
foreign countries. It is estimated that the total of these
deficits is approximately 70t 000 units.
In the construction of housing in foreign countries,
the Department of Defense makes every effort to pro-
mote the integration of U. S. families with the local
population and to minimize the apparent differences
between U. S. housing and local housing. To this end,
as well as for reasons of economy, housing in foreign
countries is usually constructed on a slightly more
austere standard than in the United States. Every effort
is also made to avoid the appearance of a "tittle America"
effect. While at the same time the interior layout and
equipment conform to American standards, it is also
true, of coursp, that in certain cases, where necessary
as a military requirement or where justified for the
physical safety of U. S. personnel, housing is built with-
in the installation boundaries.
Housing in many areas is required on an extensive
and urgent basis in order to avoid family separations and
thereby overcome one of the most important problems
confronting the U. S. Government in retaining personnel
in the military services. Through current programs
important progress is being made in meeting the large
deficit of housing in foreign countries. "Little America"
communities are considered undesirable because they
tend to isolate military dependents from the local popula-
tion and are avoided insofar as possible through careful
planning and design.
3. Employment of Local Personnel
Civilian Agencies. The policies of the three agencies
provide that, consistent with security requirements, maxi-
mum use be made of foreign national employees. The pro-
grams governing local personnel administration are
coordinated by the Department of State and are adminis-
tered in accordance with the provisions of the Foreign
Service Act of 1946, as amended.
Compensation systems are based on prevailing salary
rates and practices of the area in which the post is located.
Governing policy prohibits discriminatory practices
against local employees. Local holidays are granted in
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11.1 F-.11 S LZIJ-I
accordance with the national customs of the host country.
The program includes a leave system as well as pro-
vision for a retirement system.
The maximum use of local personnel by MA is an
inherent characteristic of their assistance program
which is directed toward the development in the host
country of a store of technical skills which can be used
for the improvement of agriculture, health, industry,
education, and governmental processes. In addition,
ICA plans to increase substantially the use by contract
of "third country" nationals possessing the requisite
? skills and language capabilities, as technicians in pro-
grain operations, particularly in those of the designated
countries where the number of Americans is the over-
riding problem.
Defense Agencies. Department of Defense policy
requires that positions overseas be filled by local recruit-
ment except for those positions which must be filled by
United States citizens for security reasons or because the
necessary skill cannot be obtained locally. This has the
obviously desirous effect of reducing the need for im-
porting workers and it reduces the possibility of friction
with the host country.
Present policies and practices encourage the develop-
ment and training of local personnel for higher skills and
supervisory jobs. Local laws and customs are followed
in the employment and administration of local national
personnel to the extent that such laws and customs are com-
patible with management needs and with governing United
States law and regulation.
The U. S. Forces strive to be good employers. Every
effort is made to provide safe working conditions.
Employees are kept informed through station papers in
their own language and are permitted to form their own
welfare and recreation associations. Some excellent
training programs are provided. Amenities such as rest
rooms, lunch rooms, showers, lockers, etc., are pro-
vided in varying degrees in each country, depending on
local custom, budget considerations, and physical facili-
ties prevailing. Surveys of employee opinion have re-
sulted in improvement of these facilities.
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Employees are hired under two systems, referred
to as "indirect hire" and "direct hire." Under the
"indirect hire" system, agreements are concluded,with
the host government whereby that government, or an
agent of the government, is in fact the actual employer
and employees are assigned to the United States Forces
on a reimbursable basis. Thus the personnel programs
are in compliance with local laws and customs. Un der
the "direct hire" system the U. S. Force 3 are the actual
employers and, except when required by treaty to observe
host country legislation, must comply with certain laws
governing the employment of personnel by U. S. agencies
which were designed for application to U. S. citizen
employees.
The determination as to which system to use depends
on a variety of factors such as differences in local law
and custom, desires of local government, number of
employees and period of time for which they will be re-
quired, effect on local labor market and others.
The Department of Defense, during the post-war
period, has become a major employer of local personnel
in many foreign areas, and its personnel policies and
practices have become the subject of considerable local
and even national interest. There is general agreement
that, under these circumstances, it would be to the advan-
tage of the U. S. Government in its relations with foreign
countries and their citizens to be able to observe local
laws and customs more fully. Because of the lack of
permissive legislation there are many areas in which it
is not possible to do this.
4. Recreational Facilities
Civilian Agencies. Generally, officers and employees
are expected to provide for their own recreational needs.
In certain posts, where such facilities are non-existent in
the local communities, programs have been developed by
the American community to provide some facilities.
Where the number of employees is small, the Department
of State requested appropriations to construct swimming
pools, tennis courts, etc? or provide other recommended
facilities and equipment. Where the local community
does not offer recrelttional facilities, those supplied by
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the U. S. Government cannot normally be opened for
general use by the local nationals, but in some instances
limited access is made available on a guest basis to
local employees, under policies approved by the Chief
of Mission. Denial of such facilities to local. employees
has been reported by USIA as'a source of irritation in
some areas.
Defense Agencies. Facilities are constructed to
meet minimum requirements only, with the following
criteria constituting the major determining factors:
availability of existing facilities at nearby installations
and civil communities; whether the installation is
permanent or temporary; essentiality of a particular
facility as dictated by the nature of the mission; cli-
matic and topographical conditions; and implications
with respect to morale.
The general policy in this area is to provide facili-
ties comparable to thrise found in a typical American
community, in order to assure that personnel do not
overburden local recreation resources to the detriment
of indigenous peoples. Carels taken to make sure that
recreation activities do not compete with foreign com-
mercial enterprises and that no form of public recrea-
tion is subsidized:
Efforts are made to share recreation services with
recreation leaders and groups in local foreign communi-
ties. For example, coaches! ani officials' clinics are
held annually covering the sports in which American
servicemen have the greatest interdst, I. e., football,
basketball, baseball, boxing and softball. Although these
clinics are intended primarily for the benefit of Service
personnel and their dependents, attendance by foreign
national leaders of sports organizations is encouraged.
5. Domestic Servants
Civilian Agencies. No formal agency jurisdiction
is exercised over the employment of domestic servants
?by personnel of the three agencies. Local domestic
employees aro paid by their employers in accordance
with prevailing rates and practices in the local labor
market. Quarters, uniforms and other perquisites
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generally follow the local practice. In some areas, the
competition for competent domestic employees is a source
of friction with the local population, which can be minimized
only through measures developed at the post.
Defense Agencies. In many locations overseas, the
employment of domestic servants is more r..1 a necessity
than a Luxury, especially when economy housing, charac-
terized by lack of modern conveniences, is utilized. Pay,
quarters and uniforms follow prevailing rates and prac-
tices of the local labor market, In some commands and
installations, security clearances are required.
The importance of the proper utilization of dornestic
servants cannot be overstated. It frequently develops
that actual military-local community relationships are
more directly shaped through these day-to-day contacts
than through any other seemingly more dramatic activity.
6. Currency Regulations
Civilian Agencies. Personnel of the three agencies
are governed by the same regulations regarding currency
conversion.
A review of the agencies! recent experience of disci-
plinary actions for non-compliance with these regulations
indicates that the regulations are realistic and explicit,
and there is general compliance with them. Nothwithstand-
ins, Americans are presented opportunities for profit in
situations where the currency exchange rates officially
established by the countries, and to which our regulations
are geared, are artificial and unrealistic in relation to -
the common market rate of exchange. It should be recog-
nized, however, that the exchange rate frequently imposes
a hardship on personnel who must purchase their local
currency requirements at the official rate of exchange.
In summary, violations of local currency regulations
carry appropriate penalties. Where violations occur they
are less a source of irritation to the local populace than
an affront to the local government and its control processes.
Defense Agencies, U. S. Armed Forces personnel
are required at all, times to comply with U. S. military
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foreign currency regulations and with the currency con- ?
trot regulations of the government of the country in which '
they aro stationed.
Currently, the countries of Afghanistan, Ethiopia,
Greece, Indonesia, /ran, Saudi Arabia, Spain, Taiwan
(Repubtic of China), Thailand, Turkey and Viet-Nam
are U. C. dollar areas. In those areas U. So Armed
Forces personnel are paid their basic pay and allow-
ances in U. S. currency or by U. S. Treasury check.
Such personnel, who might need foreign currency for
use in the local economy, may acclubo the currency of
the country in which they are located by exchanging their
U. S. dollar holdings for foreign currency at U. S.
Armed Forces finance offices, U. S. Embassy finance
offices, Glass B Agent offices, or at local t:sts.blish.
ments or institutions that have been authorized by local
governments and approved by the local U. S. commander
to engage in e;:change transactions for authorized per-
sonnel. These foreign currencies are sold by the finance
office and other authorized exchange sources at the rate
at which acquired, which is usually the official rate
between tho U. C. dollar and the foreign currency con-
cerned, or at a rate other than the official rate which
has been approved by the local government.
Currently, the countries of France, Germany,
Iceland, Italy, Japan, Korea, Libya, Morocco and the
Philippine Islands are military payment certificate areas.
In these areas U. S. Armed ;forces personnel are paid
their basic pay and allowances in these certificates,
which is the only medium of exchange that may be used
in Plc.'s, commissary stores, officers' and non-com-
missioned officers' clubs and other Service activities.
The certificates cannot be used in the local economy and
have no legal value while in the hands of unauthorized
individuala, U. S. Armed Forces personnel who need
foreign currency for use in the local economy may
acquire such currency by exchanging their certificates
into the currency of the country in which they are sta-
tioned at any U. S. military finance office, Class 13
Agent office and banking facility located on U. S. installa-
tions.
It is believed that current practices and regulations
in "dollar areas" are effective, and need not be changed
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now or in the foreseeable future. In C.pain some diffi-
culty exists clue to a wide margin between the rate at
which U. S. personnel may legally acquire pesetas and
the more favorable open market rate. However, the
United States is now taking action in an attempt to ob-
tain a more favorable exchange rate for U. S. Armed
Forces personnel.
Present military payment certificate practices arc
not entirely effective. In some areas local governments
have not made it illegal for their nationals to possess
the certificates, or if possession is illegal the local
government does not take positive action to apprehend
and prosecute the unauthorized possessors. Consequently,
the certificates are channeled by a few U. S. personnel
into unauthorized hands and into the black market. Black
market dealers then sell the certificates at a substantial
discount rate to a few U. S. personnel in exchange for
PX and commissary items, or for U. C. dollars that
some U. S. personnel illegally have in their possession
In an MPC area.
The military departments, with the concurrence
of the Departments of State and Treasury, are attempting
to discontinue the use of military payment certificates
in those areas where the host country will allow such
discontinuance. In those areas where the host country
Will not allow the discontinuance of the certificates, it
is hoped that the country concerned will, in the future,
more vigorously assist U. S. authorities in preventing
the certificates from being acquired by unauthorized
individuals, including black marketeers.
In some foreign areas where U. S. personnel are
stationed, there exists a more favorable open market
exchange rate not legally available to such personnel,
in contrast to the legal exchange rate that must be utili-
zed by them. These legal exchange rates are set by
country-to-country agreements, letters of understanding,
technical annexes, etc. Due to political and economic
reasons, both from the standpoint of the United States
and the foreign governments, the revision of legal ex-
change rates is most difficult.
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%/VIII: /LILLIS ?.J
In some geographical areas, while exchange rates
for all government-connected personnel are uniform,
these are in many caset unrealistic. Bjr being forced
to make conversion at negotiated rates of exchange,
U. S. Government employees, in contrast to other
Americans abroad and indigerions personnel, suffer
unreasonable financial loss, which in some cases is ?
rather severe.
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D. JURISDICTION
Diplomatic Privileges and Immunities
Civilian Agencies. As the result of vastly increased
activities of the U. S. Government abroad the number of
American citizen employees having diplomatic status, pri-
vileges, and immunities has increased substantially over
the past ten years. In addition to the privileges and
immunities accorded to U. S. diplomats by international
law and the comity of nations, a series of bilateral agree-
ments have been evolved which in themselves provide for
immunities and privileges for personnel who do not possess
diplomatic titles.
The Department of state is making every effort to
keep to a minimum the number of representatives of
civilian agencies who have been granted diplomatic titles,
since the number of Americans abroad having diplomatic
status and thereby enjoying immunities has become an
increasingly prominent source of irritation to the host
governments but not necessarily to the local populace. The
USIA and ICA are cognizant of this problem and are en-
deavoring to cooperate with the Department in holding re-
quests for titles for their staffs to a necessary minimum.
Defense Agencies. Prior to the stationing of large
military forces in foreign countries, the majority of U. S.
governmental employees abroad were in connection with
diplomatic missions and enjoyed a kind of diplomatic
privilege stemming from the broad concept of the "Am-
bassador's Suite." The present military forces abroad,
however, have raised a very delicate issue of the exercise
of criminal jurisdiction over large numbers of servicemen.
and their dependents by the friendly countries in which our
?
forces are stationed in peacetime -- obviously not on a
diplomatic mission.
? Basically, the question is whether an American soldier
? charged with a crime against a local citizen of an allied land,
should be tried by, U. S. court-martial or by the local courts.
The U. S. desires to maintain disciplinary control of its own
troops, to insure the standards of American military justice
established by the Congress. On the other hand, the exer-
cise of criminal jurisdiction is considered by the local country
to be, fundamental to its soVereignty.
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The problem has been 'handled generally by agreements
(e.g. , the NATO Status of Forces Agreement) which provide
generally that the primary right to exercise jurisdiction rests
with the U. S. Military Forces when only U. S. personnel or
property are involved, or when the offense grows out of an
act done in the performance of duty. In other cases, the local
courts have the primary right to exercise jurisdiction. Pro
visionis made for waivers of jurisdiction in cases of par-
ticular importance and, inipractice, the host countries do
waive, in varying degree, their primary right to exercise
jurisdiction.
In a few countries' the U. S. has had exclusive jurisdiction
but some of these (specifically Japan and Greece) have re-
quested and been granted status similar to the NATO countries.
In other countries existing agreements are technically less
favorable to the U. S. than the NATO SOF (largely British
leased bases, where no particular operating difficulties have
been ancountered) and in still others (the Azores, Saudi Arabia)
no special status is accorded the serviceman away from his
immediate area of assignment.
The attitude of some members of Congress and the public
is opposed to any exercise of foreign jurisdiction over U. S.
servicemen. The issue lends itself to emotionalism, and pro-
ponents of the so-called "constitutional right" of a soldier to
be tried by a U. S. court overlook or discount the basic sound-
ness of and military necessity for most existing jurisdiction
agreements. The DOD position firmly opposeS any denunciation
of existing status arrangements and any attempt -- legislative
or policy -- to insist upon exclusive U. S. jurisdiction in
countries which seek an agreement for concurrent jurisdiction.
Relationships with Local Law Enforcement Agencies
Civilian Agencies. A principal responsibility of U. S.
diplomatic missions and consulntes abroad is the protection.
of U. S. citizens. In carrying out these responsibilities the
embassies and consulates have traditionally established close
and continuing contacts with local police authorities. Embassy
personnel are experienced in the handling of cases of violation
of local laws by American citizens, and generally this has not
been a substantial problem area for the three agencies. As
one of its program responsibilities ICA has been assisting in
the establishment of better law enforcement units in certain
foreign countries.
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Defense Agencies. Close liaison with local law en-
forcement agencies characterizes the operations of military,
legal and police personnel. Joint patrols (military and
local civilian) of off-base areas frequented by military
personnel, the creation of joint disciplinary control boards
or councils, and aggressive military command action to
educate servicemen to local codes of behavior minimize the
friction which might be anticipated in areas of over-lapping
interest.
The locally established procedures and relationships are
. considered effective and satisfactory.
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E. U.S. VEHICLES -- PRIVATE AUTOMOBILES AND GOV-
ERNMENT VEHICLES
Civilian Agencies. To the degree that means?of
transportatinn are pertinent to this study, the problem
is essentially that of the employee's private automobile
and the government vehicles of the three agencies. The
general policy of the three agencies permits officers
and employees to ship a personal automobile to their
post of assignment at government expense.
Reports from the field repeatedly identify the
American private automobile as a significant sburce
of irritation and friction. These complaints arise from
(a) the size of American automobiles in relation to the
narrow streets and inadequate parking facilities, and
(b) their greater consumption of gasoline compared to
smaller foreign cars, which gives rise to an impres-
sion of ostentatious waste. More prominent than
either of these as a source of friction are the careless
driving and the accidents in which such vehicles are
involved, and failure to make prompt settlement for
damages or deaths when caused by U.S. employees.
Individual Americans usually carry liability
insurance for their own protection. It is required by
some countries as a condition for issuance of an import
permit. Some American insurors do not make prompt
settlements of claims, however, thereby constituting
an additional source of irritation.
With regard to official vehicles, where the agency
settles a claim under the Tort Claims Act (rather than
through insurance purchased to cover third party claims)
the three agencies have a common policy. This policy
permits settlement by principal officers when the claim
is not in excess of $1, 000. Claims in excess of $1, 000,
however, must be referred to Washington for settle-
ment.
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Finally, in certain parts of the world the sale of
American automobiles prior to the departure of the
employee from the area has resulted in excessive
profits. In this latter area, the three agencies are
studying a possible policy statement defining a "fair
price" for American vehicles and restricting the
sales of such vehicles in foreign countries to such
price.
Defense Agencies. In accordance with existing
agreements, and unless prohibited by the overseas
commander because of local conditions, military per-
sonnel eligible by grade (E-4 with four years service
and above) to transport their dependents and household
goods overseas are generally permitted to ship, duty-
free, one privately owned vehicle at Government expense,
and to purchase tax-free gasoline in most foreign
communities where U.S. troops are stationed. There
is no legislation for transporting the privately owned
vehicles of civilian personnel. Shipment of such vehicles
must be at the employees own expense. The agreements
with host countries vary in detail, but generally result
In conditions for U.S. personnel which are more advan-
tageous than those enjoyed by local residents.
This is a source of irritation to the local populace
which is further aggravated by the size, speed, power
and number of American cars in communities built for
and accustomed to only a relatively few, small-sized '
vehicles. In many countries special markings or license
plates are used on U.S. vehicles -- official and privately
owned ? to facilitate their recognition by U.S. military
police or to differentiate them from vehicles licensed,
taxed, and operated wholly under local laws. This
practice further emphasizes their presence. Friction
is caused also by the lack of adequate insurance coverage
on the part of some U.S. drivers.
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Special transportation requirements, normally
limited to recreation and morale purposes, are met
through negotiation with local governmental and
transportation agencies. At a number of Attache
posts and some of the MAAG duty. stations, official
transportation is authorized for, domicile-to-office
tripe due to inadequacy, of localtransportation. In
certain underdeveloped countries where local
civilian transportation is virtually non-existent and
especially where there are severe restrictions and
limitations on the. importation of private automobiles,
,utilization of government vehicles for carrying ?
dependent children to school,. making comthissary
runs, and recreational trips is authorized.
, All overseas commands have instituted ex-
tensive e.ampaigns to improve the conduct of American
driven. These include: careful indoctrination in
local driving conditions and laws, driver proficiency
tests, remedial driving classes, safety inspections,
special traffic courts, and the assessment of severe
penalties to offenders. Although these efforts have
resulted in improved driving practice by U.S. per-
sonnel, there is little prospect that the U.S. auto-
mobile will cease to be a source of friction in the
foreseeable future.
Possible Solutions for the Problein,
?
' There are two major problems concerning the
motor vehicles of Americans abroad, both public
and private. The first pertains to the number of
large and seemingly ostentatious American vehicles,
and the second concerns the operation of those
vehicles.
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Among possible measures to alleviate the first
problem are:
1. Adjustment of allowance scales to
reimburse employees for losses
occasioned by the sale of a vehicle
on departure for foreign assignment
in lieu of shipment of the vehicle;
2. Establishment of rental-motor pools;
3. Restriction on the number of cars shipped
from the U.S. at Government expense;
and
. Encouraging the purchase of small,
locally available automobiles.
It is recognized that legislation might be necessary to
accomplish some of the abets measures.
TO alleviate the second problem, the agencies
having Overseas operations need to adopt uniform
standards and practices covering, ? among other things,
the following:
1. Mandatory motor vehicles inspections to
insure mechanical safety;
2. Mandatory adequate liability insurance
coverage or demonstration of financial
responsibility for possible claims
which might arise from the operation
of such vehicles;
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3. Mandatory education programs at the
poste on local traffic laws and practices,
including driver qualification tests,
conducted by the post, prior to per-
mission to drive;
4. Restriction on operation of privately
owned motor vehicles abroad by
minors;
S. Curtailment of the use of special mark-
ings and license plates which emphasize
U.S. private ownership of an automobile
(where not in conflict with local laws or
diplomatic agreements);
6. Painting U.S. official sedane, where
practicable, in inconspicuous commer-
cial color;
7. Revocation of permission to operate
motor vehicles for employees involved
in drunken driving or accidents causing
death, bodily injury, or major property
damage; and
8. Improvement of procedures to provide
for prompt payment of death benefits
and damage claims.
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F. COMMUNITY RELATIONS
1. Community Advisory Councils
Community
A relatively recent development has been the establishment of A
advisory councils. These groups, cooperating with the civilian com-
munity, discuss local problems and plan joint activities. The mem-
bership usually includes local officials and prominent citizens, with
the chairmanship alternating between U.S. and host country repre-
sentatives on a regular schedule. These councils have been of ines-
timable value in assisting to create and maintain a favorable atmos-
phere for the forwarding of U.S. objectives.
This aspect of overseas life is considered to be of the utmost
importance to the accomplishment of the assigned missions. Gener-
ally speaking, every opportunity to improve local community relations
is exploited, with only those limitations imposed by host governments
or tactical or logistical considerations permitted to intervene.
2. Relationships with Local Press and Radio
Civilian Agencies. USIS offices have the responsibility of serving
all U. S. Government activities in foreign countries in the dissemin-
ation of news and information to local press and radio. In Countries
where there are major American bases or American armed forces,
the Public Information Officers of the military establishment and the
Public Affairs Officers of USIS working with the Ambassador and the
"country team" maintain liaison and coordinate releases made to
local press and radio.
USIS Information, Press, and Radio Officers maintain daily con-
tact with representatives of the local press and radio. They serve as
a central releasing agency and are looked to as the sources of American
press releases, statements, radio stories, etc., in the country.
The effectiveness of these operations is in proportion to the
degree of cooperation which exists between the various U. S. Govern-
ment activities in each country. Rather than constituting a source
of friction, the press and public relations activities serve effectively
id explain the presence and functions of American personnel in the
host country, thereby offsetting the effects of other reported instances
of failure to adjust to life in the host country.
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Defense Agencies. All overseas commands and installations
recognize that a favorable press is of vital importance to the accom-
plishment of their missions. Commanders personally, as well as
their public information staff, devote whatever attention in necessary
to gaining and maintaining as close a relationship with the local press,
radio and television as conditions render desirable. In this regard,
public information personnel promote friendly personal relations
with the local mass media representatives, press tours of U. S.
bases are intermittantly conducted upon request or when new equipment
of interest is received or new facilities constructed, radio and tele-
vision programs and guest appearances are exchanged, and joint use
of each others' facilities fostered whenever practicable and security',
permits.
As a universal practice, this process of continuous collaboration
with local communications media is effective and is limited primarily
by the number and quality of public information personnel who can
be assigned.
? 3. Cultural Presentations
Defense Agencies. The Service Band is one of the most univers-
ally appreciated purveyors of good will. It is general practice for
service bands to make regular, scheduled concert tours throughout
host countries. In addition, requests to play at local festivals and
community events are honored whenever possible, even if only a small
representative musical group can be furnished. The performance of
local folk songs and national airs is particularly well received.
Besides the organized bands and orchestras, many persons with
musical talent have formed instrumental and voice groups for parti-
cipation in local cultural activities. Those with theatrical, literary
or other artistic talent have similarly formed groups which make
presentations to the local community. Individuals have also joined
local associations of this nature.
? All these practices create favorable impressions by demonstrating
American capacity and interest in the cultural arts as well as a desire
to contribute to and learn from the cultural accomplishments of the
community. The inter-play of U.S. and host country skills in these
fields and the personal associations formed thereby aid materially in
promoting strong ties.
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4. Athletic Competition
Defense Agencies. Sports competition between American and
indigenous teams is recognized as another important link in the
activities of the U.S. community promoting better understanding
and establishing closer ties with the host country, particularly the
local community. Teams in a wide variety of sports at all command
levels engage in international, national and local competition. At
the local level, this activity is especially rewarding in fostering
friendship s.
Athletic endeavors in which there are mutual interest and
reasonably comparable proficiency, such as tennis, wrestling, track
and judo, are readily scheduled. Sports which are recognized as
national games, such as soccer or cycling in most European coun-
tries, or baseball or basketball in the U. S. are more difficult to
develop competition in, but well worth the effort in local acceptance.
The interest and industry shown by U.S. athletes in developing pro-
ficiency in the popular local sports are as significant in many ways
as the efforts made to learn the native language. Engaging local
coaches to aid in these enterprises is a general practice and is
enthusiastically received.
Similarly, tutelage of indigenous teams in sports in which the
United States holds a wide margin of proficiency is promoted when-
ever possible. This is also well received. For example, in many
countries "little leagues" have been organized with both indigenous
and U.S. teams. Volunteers devote many hours to coaching the local
youngsters and through these children make valuable associations
with their parents. Sharing of athletic equipment and facilities further
advances the feeling of mutual effort.
Besides the general and vigorously pursued practice of sports
competition between troop units and bases and the local community,
many ships while visiting ports throughout the world (many of which
are remote from established U.S. overseas communities) engage in
whatever athletic competition can be arranged, thereby_ contributing
materially to U.S.-host country rapport.
5. Participation in Local Civic and Charitable Organizations and
Events
Civilian Agencies. Participation in local charity and civic acti-
vities is an established tradition in the Foreign Service in which per-
sonnel of USIA and ICA participate. In some areas of the world local
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customs and mores do not invite the participation of representatives
of any other goverrnient in local activities. The reports frpm field
posts where such activities are permitted by local custom, uniformly
endorse these activities as important to the "blending-in" of the
American community into the life of the local community. Reports
have indicated, however, that the most effective results have been
obtained when such efforts have been directed toward participation
in a'few selected?activities. This field Offers an excellent opportunity
for the wives of American officers and employees to play a significant
role in representing the United. States abroad, under the leadership of
the wife of a senior embassy official.
Defense Agencies. It is the basic policy of all 'overseas command-
ers to assist local communities in carrying out spccial civic, charit-
able and improvement projects within the limitations of time, oppor-
tunity, and the feasibility.of the particular project. Special emphasis
is placed on types of assistance and cooperation which will be of
timely help when trouble strikes.
A not uncommon situation is one in which a military base has
heavy construction equipment not available in the community. ? Such
equipment may be needed to level a field for soccer matches, for
example. The field is to be used by both the base personnel and the
local citizens. Commanders frequently lend their equipment for such
Projects. Another form of assistance provided the community con.
sista of lending a needed utility to enable it to oveicome some natural
disaster such as, for example, a coal shortage or a fire in the local
community.
Few days of the year are without some festive occasion within the
countries represented by U.S. overseas commands. Each town and
village has its own traditional observances. If there is a military
base nearby, the village authorities almost invariably invite the
Americans to take part, and it is basic policy to make a special effort
to respond favorably to each invitation.
In the broad area of charity, American generosity is particularly
impressive. Both individual and group acts of charity are continuous
and are spontaneous as weU as planned. They range, for example,
from the donation of a wheel chair to a local cripple to the entire
financial support of an orphanage or hospital. They represent one
of the surest ways of favorably influencing foreign attitudes.
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The chief measure of the effectiveness of such activities is the
reaction of the local press, community loaders, and those citizens
and agencies directly affected by the gestures of friendliness and
cooperation. Almost without exception such reactions are favorable
and widespread.
6. Observance of Local Customs and Mores
Civilian Agencies. Upon arrival at the post the officers and
employees of the three agencies are fully briefed on the importance
of strict observance of local customs and mores. The agencies take
prompt action in any instance of employees' failure to adhere to local
customs and mores.
Field reports and agency records of tort claim payments support
the conclusion that the American's automobile and driving habits
constitute the greatest problem in the observance of local laws in the
foreign countries. Measures to improve drivers' caution and to
restrict the usage of private civilian automobiles ? while carried on
at nearly every post -- vary widely in local effectiveness. However,
each agency has taken prompt and appropriatedisciplinary action
where cases of repeated violations or flagrant disregard of safe
driving rules by Americans or U.S.-employed locals have been
reported.
In the total experience of the three agencies, therefore, failure
to observe or adjust to local customs, laws, and mores is not a source
of unusual irritation, except as to payment of resultant insurance
claims and tort claims as explained above.
Defense Agencies. The many thousands of individual Americans
who constitute the military family overseas come from as varied
backgrounds as our country provides. Only a relatively 'few are fully
prepared for their parts as guests in a foreign land. The effort to
prepare U.S. personnel for adjustment to the many differences
between their culture and the cultures of foreign lands is a prodigious
undertaking.
Previous remarks concerning orientation, language training,
jurisdiction and the U.S. automobile indicate what efforts are being
made in these fields. The personal attention of the Commander and
his supervisory staff is given to ensuring that all personnel are not
only fully aware of the local customs and mores but also observe them
scrupulously, whenever feasible.
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7. Payment of Death Benefits or Other Claims Involving Persons
Killed or Injured by U. S. Personnel
? Civilian Agencies. As indicated earlier in this paper, a major
source of friction has been the failure of individuals or their insur-
ers to make prompt settlements of disability or death claims result-
ing from the operation of private American automobiles. In past
years a source of similar difficulty stemmed from the cumbersome
procedures under which the United States Government had to obtain
requisite approvals and funds for the prompt settlement of claims
arising abroad against it. Special legislation extending Tort Claims
Act coverage to claims arising abroad has materially improved this
situation by making possible a delegation of authority to agencies'
principal officers overseas to settle tort claims in the amount of
$1,000 or fess without reference to their headquarters organization
in Washington. Claims in excess of $1,000 for damage caused by
government-owned vehicles are still subject to lengthy settlement
processes which include Congressional approval or appropriations
for the purpose.
Local employees injured or killed in connection with their official
duties are eligible for appropriate benefits under employee compensa-
tion statutes of the United States Government. The three agencies
file such claims promptly and assist the employees or their survivors
in the filing processes. In the Orient the "ex gratia" payment for
accidental death or injury is a local custom but no appropriated funds
for such payments exist per se. The three agencies do have funds
which, if necessary, could be utilized for making such payments,
where recommended by the principal officer abroad. In some areas,
such payments are made from non-appropriated funds derived from
commissary operations or other community enterprises.
In summary, the failure of U. S. Government processes to permit
prompt settlement of claims has been a significant cause of irritation
in the past. These procedures have been substantially simplified by
legislative action, and the record of settlement of claims has been
materially improved.
Defense Agencies. Tho Foreign Claims Act provides for the
claims for property losses, damage, personal injury and death caused
by the noncombat activities of the various services. It is world-wide
in application except when it has been superseded, in part, by inter-
national agreements, such as NATO SOFA. The Act provides for the
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payment of claims generated. by military personnel and civilian
employees of the Service, whether or not the acts giving rise to the
claim are within the scope of employment of the individual. As a
matter of policy, the claims generated by foreign national employees
of the various services are paid only when such acts are within the
scope of employment.
Where agreements patterned on the NATO SOF Agreement apply,
death benefits and other claim payments are made by the host country,
where the claim arose out of the performance of official duty. An
implementing statute authorizes U.S. authorities to reimburse foreign'
governments for the agreed share of the payment, usually on a 75-25
percent basis. In non-scope cases, claims are referred with the re-
commendations of the host state authorities to U.S. claims authorities
for action under the Foreign Claims Act and a possible payment.
Pursuant to the Department of Defense directives, the Armed Services
are given different areas of responsibility in foreign countries. The
Air Force has been assigned exclusive claims responsibility in Canada,
Denmark, Greece, Iceland, Luxembourg, The Netherlands, Norway,
Turkey, and the United Kingdom. The Army has similar responsibility
in Belgium, France and Japan. Also the Army has supervision over
claims in Germany and Austria. The Navy has responsibility in Italy
and Portugal.
In countries where the agreements are not patterned on the NATO
SOF Agreement, such as Afghanistan, Ethiopia, Indonesia, Iran, Korea,
Libya, Morocco, Philippines, Saudi Arabia, Spain, Republic of China,
Thailand and Viet-Nam, exclusive claims jurisdiction has not been
assigned to any one Service. In some of these countries, executive-
type agreements have been made which provide merely that claims
will be settled in accordance with U.S. law, or similar language that
makes U.S. claims statutes applicable rather than NATO-type settle-
ment procedures. Accordingly, the Armed Services provide claims
services in these countries, as in others where there is no specified
agreement on claims, through foreign claims commissions as needed.
Claims procedures are generally effective. Recent inspection
trips by Army, Navy and Air Force claims authorities in Europe and
the Far East have given evidence that relations with host countries
are generally satisfactory from a claims standpoint.
The purpose of the various claims statutes and regulations is to
maintain friendly relations with foreign countries by the prompt
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settlement of meritorious claims. Additional statutory authority
which would permit the partial payment of claims up to the adminis-
trative limit prior to referral of large claims for Congressional
action would greatly facilitate relief to injured parties and improve
relations with foreign countries. The legislation (H. R. 9022) is now
pending in the 85th Congress.
8. Representational and Hospitable Activities
Civilian Agencies. It is difficult to dissociate formal represent-
ational activities from the participation of the American community
in local community activities which are discussed elsewhere in this ?
paper. Effective formal representational and hospitality activities
have been a traditional aspect of diplomacy which is well understood
by the principal officers of the agencies. The understanding of
American objectives abroad and the acceptance of Americans in the
host country can be further improved by expansion of such activities.
The agencies share a common concern for the lack of adequate funds
to defray the cost of formal representational activities, since such?
lack of funds results in a considerable financial burden upon individual
officers. There is, however, no indication from field reports that
the limitation on funds for formal represeniational activities is in
itself a significant source of irritation in the host country.
Defense Agencies. It is a basic policy of the U.S. Armed Forces
to help the local citizens of communities adjacent to Armed Forces'
installations to understand the place of these installations in their
national and community life.
For example, at least once a year on .Armed Forces Day the
entire local community near each of the USAFE bases is invited to
visit the installation. These occasions usually have much of the
informal flavor of a country fair. Often entire families visit the air
bases for an all-day, activity-packed program. In the morning, at a
typical open house, visitors tour the base and look at the display of
aircraft which has been set up on the flight line. Often a flying
exhibition of model airplanes is arranged for the children and youth.
On occasion a fire-fighting demonstration is given. In the afternoon
there is usually an air show or at least a flyby of the unit's aircraft.
Sports and athletic events and musical presentations are usually
included in the day's activities.
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In addition to the open house and air show, which are used to
explain the USAFE mission and its means of fulfilling that mission
to the masses of the host population, special briefings and repre-
sentational activities are provided for members of the local press
and community leaders.
Comparable to the above-stated upArt policy is the policy of
other overseas commands, with variations in activities and methods
in terms of the hospitality and representational feasibilities of each
locale. In general, local officials and prominent citizens are formally
entertained whenever appropriate and all invitations of this nature
from the local community are speedily honored. In addition, all ranks
are urged to participate on an individual basis. Many valued friend-
ships, with attendant priceless understanding, have been cultivated
in this way.
The effectivenetis of such activities cannotbe measured Oject-
ively. The Armed Forces, however, persist in the conviction that
the host population should be taken into confidence whenever Consider-
ations of military security 'allow.
Without questionicontinuing aggressive emphasis should be
placed on all types of activities which will enable foreign peoples
to understand more clearly the place and capacity of the Armed
Forces in.their community and national life.
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UNCLASSIFIED
? G. SUMMARY STATEMENT OF PRIVATE INDUSTRY'S PRACTICES
In view of the close association between American business
concerns operating abroad and the American missions in the same
countries, it is only natural that their administrative practices
concerning the adjustments to overseas life and the improvement
of foreign attitudes toward U.S. citizens would roughly parallel
those of the U. S. Government agencies. As part of this study a
comparative survey was made of the typical practices of represen-
tative American private industry and business concerns. The ,
Annex to Volume I of this report comprises a detailed report of
these practices.
In summary, it was found that private enterprise, being gen-
erally less bound by restricting regulations than are the govern-
ment agencies, has greater variety in ito administrative practices
and in some fields pushes its activities further than does Govern-
ment. Private enterprise American employees overseas are usually
less numerous, by comparison with local employees, than in the
case of Government. They are also more nearly limited to spethal-
lats. American industry operating abroad seeks to turn all pos-
sible jobs over to local personnel and to this end does more in the
training of locals.
In general, the tour of duty is longer in private enterprise
than in Government, especially in the executive and highly special-
ized categories, under the theory that such employees cannot reach
maximum efficiency in less than two to three years of service in
the foreign country. On the social welfare side, private enter-
prise local employees in many cases have greater privileges than
do those employed by the U.S. Government. They are also given
greater consideration in the furnishing of recreational facilities
and of educational opportunities. More orientation is generally
given to the American employee serving abroad than to his "official"
colleague, both before he leaves the U.S. and after arrival in the
foreign country.
American companies operating abroad attach great importance
to recreation and housing facilities for their American and local
employees. They tend to encourage maximum local participation,
either through membership or ownership, in such facilities, they
appreciate fully the value of local community relations and con-
tribute time, money, and active participation in activities tending
to identify American and local interests.
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The following administrative practices, proven of use by
American concerns operating abroad, merit special considera-
tion by the U.S. Government In its overseas programs:
I. Use of documentary films in orientation courses for
American employees and their dependents, In many cases, such
films could be borrowed from the American firdts. The series
of NATO countries is another source.
2. Instruction in English for promising local employees at
employer's expense and on employer's time.
3. Training of local employees for supervisory work and
for training of other local employees.
4. Longer tours of duty for executives and highly specialized
personnel.
5. Group life insurance to local employees. This might go
a long way in satisfying their longing for security.
6. Housing built at American expense for American or local
employee occupancy but managed and/or owned by foreign country
or local private enterprise.
7. Provision of recreational facilities for local employees.
8. Equal privileges for local employees in commissaries.
9. Local concessions for commissaries and other special
stores.
10, Greater civic responsibility a.nd participation.
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SECTION V.
CONCLUSIONS AND RECOMMENDED ACTIONS TO IMPROVE
FOREIGN ATTITUDES TOWARD U.S. CITIZEN PERSONNEL
OVERSEAS. ?
A. CONCLUSIONS
Adjustment to life overseas.
? 1. Americans who serve their Government abroad must
recognize that neither the political power of the United States,
its technological capabilities, nor its generosity will of
themselves, separately or in combination, cause them to be
liked ar, Americans in all parts of the world or even in
"friendly" countries. The mantle of world leadership is
not easily worn. Therefore, U.S. employees serving abroad
must be assisted by every practicable means to make the
personnel adjustments required by life overseas in these
times.
Factors causing antipathy toward Americans overseas.
2. Foreign citizens' concern over the presence of
Americana in their countries is stimulated by the substan-
tially better standard of living to which the American is
accustomed. The answer is obviously not to lower Anierican
standards of living in order simply to mitigate this concern.
But a superior attitude is galling to foreign citizens,
particularly, when it is accompanied by ostentatious display
of personal property or exaggerated consumption. They
show natural antipathy toward the stationing of "foreign"
troops in their countries and resent jurisdictional arrange-
ments for the trial, in breaches of local law. of U.S. citizens
without diplomatic status. Despite a basis in bilateral agree-
ments for such jurisdictional arrangements, they are somei.
times viewed as "extraterritoriality." Finally, in some
countries, popular attitudes toward Americans reflect an
over-riding fear of involvement in nuclear warfare.
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Faeors affecting concept of mutual benefit between foreigners
sand Athericans.
3. The acceptance by the man-in-the-street of the U.S.
presence is conditioned by aspects directly beneficial to him-
programs which have checked or eradicated disease, pro-
vided school lunches for his children, or provided employ-
ment for him or his neighbors. There is evidence of his
concern lest these programs be reduced or terminated,
since they patently affect his own immediate well-being.
Outside these material considerations, his attitude toward
the presence of all Americans depends primarily on the ex-
tent to which individual Americans demonstrate common
courtesy and good manners, participate in community
affairs, and exhibit a sense of responsibility in the discreet
use of their personal property, particularly their automo-
biles. Problems implied here are especially complicated
for military personnel. Their presence is often hard to
demonstrate as mutually advantageous, for generally it
is only in certain strata of society and government circles
that the U.S. military role is recognized as essential to
the concept of collective security.
Selection, orientation and assignment need greater attention.
4. treater attention needs to be given to the selection
of Americans to be sent abroad. Particular emphasis should
be placed on the processes of selection to determine adapta-
bilities and basic motivations on the part of the individual
for service overseas. These processes require considera-
tion of factors in the environment of the proposed country
of assignment, as well as of the attributes of the employee
himself, which might affect his usefulness. Likewise,
additional attention should be given to the orientation and
indoctrination of selectees and of their families before
assignment. The importance of having an understanding
of the language, cultural background, customs and mores
of the country to which the employee is being assigned
cannot be over-emphasized.
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?
Techniques utilized by military commanders to minimize
friction.
5. Practical considerations and the sheer numbers of
people involved limit the armed services' conduCting
effective screening of all their personnel for adaptability
to life abroad before their assignment. Despite such ;
limitations, the predominant weight of the evidence is that
the military commanders, as members of the country
teams, are alert to sources of difficulty and in most
situations have developed effective techniques for explain-
ing the presence of U.S. troops and minimizing the liken-
hood of incidents which can result in friction. The limita-
tions on screening of their personnel have been compensated
by (a) orientation programs; (b) enforcement of firm disd-
pline; (c) participation in humanitarian activities to relieve
citizens of the host country of personal suffering and hard-
ships; and (d) effective programs of public relations.
Criminal jurisdiction --a major adverse factor.
6. The dat-a on criminal jurisdiction reviewed in connec-
tion with this study, as well as that available to the late
Mr. Frank C. Nash (as reflected in his Report), warrant
the conclusion that the matter of jurisdiction over person-
nel of the Armed Forces is a major factor affecting the
attitude of the peoples of the host country toward the U.S.
presence. The problems arising over those arrangements
or the lack of public understanding of them in the host
country and in the United States have been magnified by
widespread adverse publicity in recent prominent cases.
In view, however, of the recent National Security Council
action on the Nash Report recommendations pertaining to
criminal jurisdiction, no recommendations are submitted
in this report.
Administrative practices need continuous attention.
, 7. All of the agencies' administrative practices bear-
ing on foreign attitudes need across-the-board and continuing
emphasis at all levels, both in agency headquarters and in
American missions and commands abroad. Incidents result-
ing from failure to observe established effective practices
are costly to American prestige and take on exaggerated
proportions in the foreign mind. This is not to say that
the record to date is not good nor that it is not being con-
stantly improved.
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Americans overseas are guests and must act accordingly.
8. In the final analysis the avoidance of friction with
the people of the host countries demands constant attention,
effective leadership, and an intelligent approach built on
the broadest possible understanding cif the history, culture,
and mores of the country. The over-riding need is to instill
in all Americans serving their government abroad an under-
standing of the fact that they are essentially guests of the
host country and, as guests, are obligated to display normal
good manners, to follow a reasonable standard of moral
conduct, and to avoid acting superior to their hosts.
4
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. B. RECOMMENDATIONS
The following recommendations apply to those areas
of our administrative practices in which improvements
are needed. Accordingly, it is recommended:
Selection Processes
fr
That all agencies strengthen their prpcesses of
selecting personnel for overseas service.
This recommendation would have 'partic? ular' appli-
cation to exercising within the 'limits of practicality
the same care in the selection and assignment of
their supporting staffs as in used in making the
senior U.S. civilian and military appointments.
The recommendation is particularly important
in the choice of military officers who will be
commanding installations employing sizeable
numbers of local nationals or otherwise having
a significant impact on the local economy.
2. That the Department of Defense continue to place special
emphasis on screening from overseas service enlisted
personnel who would be undesirable representatives of
the United States. ,
" 3. That all agencies adopt appropriate 'testing techniques
to identifya_ad...2.22nianie potential adaptability of
candidates for overseas employment and, if pratti-
cable, their spouses to life overseas.
The agencies have made only liniited use of the test-
ing techniques jointly developed in 1952 for deter-
mining such adaptability. While not infallible,
these tests have shown a substantial degree of
validity. All agencies should take advantage of
these existing testing methods ,?or develop or
adapt other testing techniques particularly fitting
their needs.
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4. That the testing techniques adopted be appraised after
a reasonable trial period.
The importance of this recommendation rests in
the opportunity thereby afforded to determine whether
formal testing techniques will in fact provide a better
identification of (a) the attitude of candidates toward
citizens of other countries; (b) their actual motivation
for service abroad; and (c) their potential adapta-
bility to life overseas.
5. That career civilian personnel who lave positions in the
continental United States to accept overseas assignments
should have effective re-employment rights so as to
avoid their being penalized by virtue of having accepted
positions abroad.
The Department of Defense reports that greater job
security for career civilian employees who are
encouraged to leave positions in the continental
United States and accept positions abroad would
facilitate recruiting well-qualified personnel for
overseas assignment. At present, instances arise
v.Ilerein employees who leave positions in the con-
tinental United States to accept overseas assign-
ments may not be assured of re-employment in
the position they left or one of like seniority, status
and pay.
Orientation and Indoctrination
6. That all agencies immediately reappraise and streng-
then their orientation and indoctrination policies and
programs both at home and abroad as follows:
a. Agency heads 'should insure that their orientation
and indoctrination policies and programs provide
all newly assigned personnel and their adult
dependents (including contractors' employees)
adequate indoctrination on their role as represen-
tative Americans.
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b. Agency programs should provide uniform suggested
standards of conduct, as well as cultural and
political background and other pertinent information.
c. Training should be of sufficient duration and intensity
to convey the importance of these matters and a basic
understanding of the problems.
d. Jointly prepared inter-agency post reports and other
briefing materials should be kept current and mean-
ingful.
7. That all agencies provide continuing or refresher orien-
tation for their personnel abroad.
Overseas personnel need to be reminded periodically
that they represent the United States abroad and are
expected to maintain a high standard of personal con-
duct and of respect for local peoples and the laws and
customs of the host country. Such personnel need
to be kept abreast of potential difficulties in their
personal relationships with nationals of the host
country.
8. That all reasonable effort be made to provide orienta-
tion for adult dependents of new employees prior to their
departure for duty overseas and that each agency, pur-
suant to this objective, review the adequacy of such
orientation programs as now exist.
This recommendation emphasizes the importance
of orientation which may be given in the United States
and be followed by further training at the post of
duty abroad. In assessing the adequacy of their
present programs, the civilian agencies should
consider whether additional funds or legislative
authority may be necessary to permit desirable
strengthening of these programs. The Department
of Defense procedures provide for orientation of
dependents at the ports of embarkation. No addi-
tional costs are involved. Consideration should be
given by all agencies to the joint use of Department
of Defense facilities at the ports of embarkation
for the orientation of the dependents of civilian
agency personnel.
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9. That all agencies utilize:fully the opiortunities to brief
high government OffitiaIs and their escort officers
prior to their departure for foreiln countries.
10. That all agencies expand the use of joint orientation
programs and facilities wherever practicable.
Language Training
U. That the agencies concerned with language training,
strengthen their facilities for such training, particu-
larly "at post," and take the necessary stps to permit
such training to be made availablai to all their U.S.
employees and their adult dependents.
12. That, where practicable, the local language be included
In the curricula of "American schools" operated by U.S:
Government agencies, particularly where the local
language is French, German or Spanish.
The recommendations (11 and 12) concerning language
training have a dual purpose; (a) to develop linguis-
tic fluency for selected personnel specializing in a
particular area or country with a view particularly
to needs in the Communist orbit, Asia and Africa;
and (b) to demonstrate the interest of the individual
American in the people and culture of the host coun-
try. Where the so-called "exotic" languages are
spoken, fluency is not expected and indeed is not
necessary for the great majority of officials and
their dependents. The psychological benefits that
derive, however, from the very fact of study by
officials and their dependents are of profound sig-
nificance. Many of these peoples have recently
emerged from colonial status. They regard study
of their language by American officials as a recog-
nition of their importance as independent peoples.
Local Economy - Employment of Local Personnel
13. That the provision of authority for the Department of
Defense (and other agencies to the extent determined
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to be appropriate) to administer local personnel in
accordance with local customs and practices he
agreed upon in principle., ?
Significant numbers of non-U.S. citizen personnel
aroused by U.S. agencies in their overseas opera-
tions. However, when these personnel are hired
afi regular employees of the Government they are
subject to some U.S. laws which were designed
for application to U.S. citizen personnel. In some
situations, principally,pertaining to the needs of
the Department of Defence, these are inappropriate
for application to aliens employed overseas. To
avoid application of U.S. laws such as the Civil
Service Retirement Act, the oath of office, the non
strike affidavit, and others to native or indigenous
personnel it sometimes becomes necessary to enter
into indirect hire arrangements which may not be
completely satisfactory. Under the circumstances
it would be advantageous and desirable for the
Departmerfi of Defense and other agencies, when
needed, to have the necessary authorities to admin-
ister alien personnel in accordance with local laws,
'customs, and practices.
No conclusions have been reached in this matter with
regard to agencies other than the Department of
Defense. Further, it is recognized that there may
be serious foreign policy or other questions raised
by extending the proposed authorization to other
agencies. Among the potential problems is the
possibility of continuing pressures by other govern-
ments for all U.S. agencies to participate in their
employment and compensation systems where ;it may
not be in the interest 61 the U.S. government to do so.
Thus, this recommendation is a statement of princi-
ple and the above-cited considerations would be
weighed in the normal legislative review process
within the Executive Branch.
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? Local Economy -- Shopping Privileges
14. That agencies 'having responsibility for PX and commis-
sary facilities review their governing policies and
exercise their existing authority in order to ensure that
(a) items stocked be limited to those which are peculiar
to U.S. buying habits and are either wholly unavail-
able in local markets or aro excessively expensive or
in critically short supply and that (b) wherever pos-
sible; the sales facilities be located in inconspicuous
places.
This recommendation from the report by Mr. Nash
coincides with the findings in this report, Relative-
ly minor but numerous problems arise in connec-
tion with PX and commissary privileges from the
fact that in an effort to approach as nearly as
possible the American standard of living for U.S.
employees overseas, it is necessary to make
available cnrtain commodities which are generally
not available in the local market. While the pro-
vision of PX and commissary privileges does
sometimes involve "conspicuous consumption"
and a degree of competition with the local market,
the retention of these privileges for U.S. employees
-overseas is considered essential.
'Housing
15. That in any future programs of overseas housing con-
struction or acquisition, the desirability of integrating
U.S. personnel into the local community be weighed
carefully against the economic and security factors
favoring concentrated U.S. housing communities.
There has been considerable criticism of so-called
"Little Americas" in various host countries. But
minimizing growth of such communities is a complex
question oftentimes dictated by local political as
well as economic conditions.
Some of the factors to be considered in determining
the need for these communities are:
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a. The complications of multiple housing facilities;
b. Land acquisition problems;
c. Cost of dispersal effort;
d. Availability of local utilities and resources;
e. Health, sanitation, and security considerations;
f. Local transportation requirements for U.S.
personnel; and
g. Lessening the competition for scarce housing.
16. That the agencies responsible for overseas housing
place increased emphasis on locating housing for
U.S. personnel having representational and/or-report-
responsibilities outside exclusively-U.S. housing
units.
Motor Vehicles
17. That the Operations Coordinating Board establish an
inter-agency ad hoc committee comprised of informed
officers from State, Defense, USIA, and ICA and chaired,
by the Defense representative, to develop and present
to the OCB guides for adoption by all agencies to allev-
iate the problems created by automobiles, both official
and those privately owned by U.S. employees overseas.
(Detailed information and suggested courses of action
and inquiry on this subject are recorded at Page 56
of Volume I of the report.)
Diseosal of Personal Property
18. That the Operations Coordinating Board establish an
inter-agency ad hoc committee comprised of informed
officers of State, Defense, USIA and ICA, and chaired
by the State representative, to develop and present to
the OCB guides for use in developing uniform regula-
tions for a particular foreign country relative to the
disposal by U.S. employees of their personal property.
This recommendation applies to a most difficult and
complex area of personal activity which has not been
systematically reviewed by all agencies concerned.
In developing guides the ad hoc committee should
consider, among other things, mea:ns to ensure
?
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that sales or disposal of personal property be made
(a) in accordance with the laws and regulations of
the host country, (b) in a manner which will not
bring discredit on the United States or reflect
unfavorably on the individual concerned or the
organization to which he is attached, and (c) under
regulations which, to the extent permitted by local
law, will apply uniformly to all U.S. personnel in
each country. The guides will be sent to the Chief
of each U.S. diplomatic mission for his use in
developing jointly with representatives of other
agencies having personnel in the country the
uniform regulations appropriate for that country.
Other Administrative Techniques
Community Activities Committees
19. That the principal agencies having overseas respons-
ibilities consider establishing formal community
relations committees at each overseas post.
Reports indicate that such committees or councils
have made substantial contributions to the estab-
lishment or maintenance of good local community
relations. The most successful of these committees
have included representatives of all civilian agencies,
military commands, and private American enterprise
having activities in the area, as well as appropriate
participation by host country representatives.
Greater Use of Dependents
20. That all agencies make greater use of employable depen-
dents already at post, wherever practicable.
This recommendation is intended to utilize fully
the skills of U.S. citizens already abroad and there-
by to minimize the number of others who would have
to be sent. The adoption of such a policy, which
should probably be tested in selected countries,
involves at least the following considerations:
(a) an employee and dependent "team" in a small
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Li-MIN 111-11.2
office would not normally be desirable and even in
a large installation, caro must be taken in the
assignment of a dependent; and (b) in future
instances it would be desirable to complete any
necessary investigative or security procedures
regarding employable dependents prior to their
going overseas.
POsitive Approach
21. That the principal agencies having overseas respons-
ibilities strengthen their existing administrative prac-
tices' designed to improve foreign attitudes toward the
U.S. presence through: (a) increasing the emphasis
on activities which will convey to the citizens of the
host country a sense of mutual benefit from the U.S.
presence; and (b) promoting field coordinated imple-
mentation of these activities of the U.S. agencies
under the direction of the Chief of Mission.
The agencies' present administrative practices
might properly be characterized as largely "defen-
sive" in nature in that they are aimed primarily at
the U.S. personnel themselves. While this is essen-
tial, it is equally important that, in the conduct of
those administrative practices, no opportunity be
lost to foster in the host country the concept of
mutuality of interest. The strengthening of the
administrative practices should embrace the full
range of actions discussed or recommended in this
report and should be accomplished through a blend-
ing of the broad program perspective of headquarters
personnel with the detailed knowledge of those "on
the scene."
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UNCLASSIFIED ?
ANNEX TO VOLUME I
General Practices and Policies
Of Private American Enterprise
Operating Abroad
(Prepared by the
Office of Private Cooperation
United States Information Agency)
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ANNMC: TO VOLUME I
General Practices and Policies of Private American
Enterprise Operating Abroad
Foreword:
United States business and industry have a tremendous
stake in foreign attitudes toward the United States. The opinions
the publics of other countries hold on the U. S. economic system.
local American investments and commercial and political re-
lations between America and themselves determine the success
or failure of private American enterprise in the market places
of the wcirld.
According to a recent survey by Fortune, private American
investment overseas at present amounts to a market value of
$36, 5 billion. This huge capital sum represents the confidence
of more than 2, 500 U. S. companies engaged in operating over
7, 000 foreign business ventures in production, services and
merchandizing. More than four million Americans are directly
dependent on the exchanges of goods amd materials related to this
foreign investment of private American wealth.
In order to protect these investments and keep foreign
markets open to American trade, American business fully realizes
it is just not enough to produce and sell its goods abroad. It
must also produce good will and persuade foreign publics and
their governments that their individual and their national econo-
mies benefit through the industrial and commercial cooperation
of American business. Thus American companies operating abroad
seek in all possible ways to identify themselves with the interests
and welfare of local publics and to demonstrate that they are
responsible partners in the economic, social, and cultural pro-
gress of the host countries. The many exemplary policies and
practices American business and industry have applied to their
foreign operations have been major contributing factors to the
growth of American prestige in the world and national prosperity
at home.
Basic to good business abroad is the personal conduct of
America's business representatives. They represent their
country as well as their company and their behavior with foreign
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business men and other opinion moulders in the countries to
which they are assigned is an important influence both in
political and commercial relations. Accordingly, American
business selects its foreign representatives with care.
It would seem that a very large corps of American
personnel must be engaged in conducting the multifarious
activities related to so large an investment. This is not the
case. The investment responsibility imposed on these repre-
sentatives is grossly disproportionate to their number.
Census records indicate there are around 186, 000 American-
citizen heads of families resident overseas. This number does
not include members of the Armed Forces and their citizen
civilian employees but does include U. S. citizens employed
by Department of Defense contractors engaged in constructing
bases and military installations. It also includes transient
business men, retired Americans living abroad, missionaries
and an appreciable number of tourists. Owing to the indef-
initeness of the records it is reasonable to assume that not more
than 100, 000 Americans are actually resident representatives
of American business in countries throughout the world. At
this figure, 15 Americans are the average for each of the 7, 000
American business operations overseas. In the Latin American
countries alone, where nearly one-quarter of the total of U. S.
private overseas investment is concentrated, there are not more
than 30, 000 resident American representatives of U. S. firms of
all kinds. Thus American employment for foreign service is
highly selective and is largely limited to top-level personnel--
executives, engineers, production and marketing specialists.
Except for the management personnel who direct foreign
operations, the American industrial employees who are sent
overseas are assigned first to put the operation in motion and
thereafter to train native personnel in the administrative,
technical and production procedures. When local employees have
demonstrated their ability to carry on the operations in keeping
with American standards the American employees, in most
instances are returned home. Such assignments of Americans
vary greatly as to length of time. The degree of industrial
progress and the educational level of the individual countries
are the determinants.
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In highly developed countries, such as those in Europe.
American investment is directed principally to autonomous
subsidiaries or affiliates of the American company. There is
little need in these countries for American personnel except
for the development of new processes, research or special
services.
In tewly industrializing countries, such as the larger of
the Latin American countries, American business has
demonstrated that teams of competent administrators and
skilled operators can, in a relatively short period, train local
working forces to a degree of proficiency that practically
eliminates the need for American personnel. A recent survey
in Mexico vividlywpints up this fact. The 46 American
companies surveyed employ 53,000 workers. Only 800, or
1.5 percent of this total, are Americans. Zome of these
companies employ no American citizens in any capacity.
A larger mining company employing more than 13,000 have
fewer than 200 IL S. citizens on its local payroll and of the
1900 employees in the Sears Roebuck operation in Mexico only
19 are U. S. citizens -- a ratio of 100 to 1.
In under-developed countries where new American
industrial operations must necessarily start from scratch,
much larger forces of American personnel are required for
construction, operation and training and for a longer time.
Over-all, it is the policy of American business to utilize
the services of as few American personnel as possible in over-
seas operations, wherever they may be undertaken. This policy
should have a significant bearing on any effort to evaluate the
personnel practices of American business and industry overseas.
While it is recognized that the American employee is an
important reflection of his company in the foreign conimunity,
his impact on public opinion is relatively inconsequential to the
impact made by the company itself. If the company's policies
toward government, the public and the native labor force
are good, the American employee is welcomed by society as
an instrument of good. If the policies are bad he is shunned
as a device of evil. Thus the attitude of native labor is a
significantly important factor in the shaping of public opinion
on the company, a fact that American business knows full well. ? ?
It will be seen in the following case histories that American com-
panies operating abroad devote a large part of their time, money
and energy in building the best possible relations between
management and native personnel.
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? A- Personnel Factors
A-1 Selection of U. S. Citizens as Representatives in Foreign Country
The selection of personnel to represent American
companies overseas follows no fixed or rigid pattern. The
same common sense that controls the choice of domestic
personnel is applied to the sales, technical and managerial
personnel selected for overseas assignment. In the case of
new employees the same tests for aptitude, specialized
knowledge, initiative and character are employed. However,
in respect to foreign assignees special interest is shown in
physical condition, domestic relations and social adaptability.
The position most personnel managers take is that if a per-
son can meet the company's high qualifications for domestic
employment, he is good enough to work for it overseas. In
making foreign assignments, consideration is given, of course,
to the language-learning ability of the individual and to? the
political, ethnic and racial factors that may condition his
social acceptance in the country in which he Will work.
The American employee assigned to work overseas is in
almost every instance a specialist, whether he is in the manage-
ment, marketing, production or construction field, or in the
collateral areas of medicine, public health or education. His
company expects him to be able to supervise others in his
specialty and to train them to the degree of responsibility he
- himself has attained. If these qualities of leadership have not
been demonstrated already, it is customary for the company to
ascertain them through qualifying tests.
A-2 Orientation and Indoctrination -- Stateside and in the Field
Stateside, most American companies give major emphasis
in their indoctrination programs for employees going overseas
to intensive instruction in the marketing or technical
characteristics of the country of assignment so as to fit the
employee to the specific job he is expected to perform. The
foreign assignee also receives comprehensive briefings on the
company's operational history, the commercial geography, the
standard of living and climate and housing conditions in the
foreign country. These are given by other employees and
executives who have served in the country and are experienced
in its economy and its social complexes. Generally the
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assignee id shown documentary movies depicting the country,
and he is urged to study up on the country at his local library
and chamber of commerce. He and his family are encouraged to
take a course in the language of the country. In many instances ?
such language training is provided at company expens e.
In industrial employment for foreign service, indoctrination,
for the moat part, is directed to the job. Rarely are the social
and cultural features of the country covered by industrial
employers. However, this does not hold for companies engaged
in meeting and serving the public, such as communications,
transportation, travel and finance companies which have an
important stake in good public relations. These companies
make a concentrated effort to educate their foreign assignees
in the social and cultural environments of the countries in which
they will work. As an example, Trans-World Airways System
has invested a large part of company training funds in a series
of documentary movies depicting the people and the. countries
of their worldwide service. These demonstrate how employees--
stewardesses, hostesses, pilots, transportation managers,
traffic men, etc. -- should conduct themSelves with the various
publics.
The California Texas Oil Company also uses films to fam-
iliarize its employees, domestic and foreign, with the
commercial, cultural and topographical and geographical
features of the 67 countries in which it operates. These films
not only stimulate a community of interest among employees.
bat, through public screenings, have a very important value
in creating international understanding among peoples of many
nations. So authentic are the reflections of the countries they
picture, four of the first five films t hat Caltex produced have
been adopted as official government films by the countries in
which they were made.
American personnel serving abroad as well as foreign
national employees in nearly all countries are kept informed on
company policies, new scientific and technical developments,
details of training programs and news of other overseas
operations by industrial external house-organs. Almost every
American company having foreign investments publishes a
company magazine. Great importance is attached to it as an
employee orientation and training device and as a personalized
means of giving overseas employees a running account on new
products, management, sales and service, distribution,
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management?labor relations, public relations, advertising
and community relations activities at home office and overseas.
Many companies publish or sponsor the publication of
behavior guides or personnel manuals designed to give the
American employee going abroad a basic message on good
conduct in his cultural and social relations overseas. One
such boolrlet, "What Should I Know When I Travel Abroad," has
had a distribution of more than a million copies by its various
company sponsors. Among the companies participating in
this orientation program were the National City Bank of New
York, the Radio Corporation of America, Westinghouse
International Electric and Republic Steel. Many companies
produce their own booklets. These are editorially slanted to
company interests and mark the importance of contributing
to the company's international reputation.
A-3 Language Training
Training in the language of the country of assignment is
an essential part of the special studies in universities and
technical institutes that many of the large American companies
provide for young executives they intend to send abroad. However,
such language study, far from the scene of its eventual applica-
tion, is generally regarded as only a beginning. Major companies,
almost without exception, provide for field courses for employees
after their arrival on the foreign posts. Such instruction is
offered in company in-plant courses, privately-tutored classes,
enrollment in local colleges, adult education groups or, whe\re
available, binational cultural centers, to whose support the
American business community contributes.
Local employees, particularly those in supervisory,
clerical, ananagerial and executive positions, who work
continuously in contact with American executive personnel, are
urged to take courses in English at company expense. Many
companies conduct such courses on their own initiative, others
rely on conpany-financed enrollment in private classes or
English courses. coluducted by binational centers or American
friendship groups,.
A-4 Supervision and Inspection
Supervision and inspection of the work of local employees
in operations abroad vary in degree according to the nature of
the business, method of company operation and the educational
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level of the individual country. American subsidiaries in
industrially sophisticated countries -- most of the countries
of Europe, a few of the Latin American countries (Mexico,
Brazil, Venezuela and Argentina), some British common-
wealths and, in the Far East, Japan and the Philippines
are invested with a high degree of autonomy. Thus super-
vision and inspection conform to established operating
procedures of the business, local labor relations and
national customs. Except for training in newly developed
techniques of the parent company, such subsidiaries require
no direction by American management below the top
executive level.
American employees assigned to overseas plants of
offices almost invariably are subject to the same super-
vision and inspection in their work as local employees
engaged in similar work. Moral and social behavior of
American employees overseas, while not supervised, is
of vital concern to American companies. They guard their
reputation as good citizens as zealously as they guard
the quality of their products. They are quick to correct
any employee actions that are offensive to local social
codes or that reflect discredit on the company.
Universally, American business operating abroad
seek to develop qualities of leadership and job expertness
in local employees in order that they may take over the
training of other locals and supervision and inspection
of their regular work. American companies engaged
in mining, oil exploration and extraction, and agriculture
must of necessity use American technical and production
specialists in the initial phases of their operations in
countries of low economic and educational development.
As a typical example, Firestone Tire and Rubber Company
in Liberia uses American agricultural specialists to
supervise planting and harvesting of rubber trees in the
90,000 acres the company cultivates; machinists and
automotive engineers in the operation, maintenance and
supervision of equipment. American medical and
nursing specialists in company hospitals, transportation
and shipping experts, in fact in all operations involving
important investments which would be jeopardized by
inexperienced handling.
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American oil and mining companies require large staffs
of American specialists in exploration, chemical research,
communications and transportation facilities in most of
their foreign operations, particularly those in South East
Asia and the Middle East where skilled labor is not available.
The Henry J. Kaiser Company, for instance has more
than 8,000 engineers and experts in its field forces out on
jobs in every section of the globe. These Americans
operate under the supervision and inspection of American
managerial personnel. Similarly the mining companies,
such as Kennecott, Anaconda, and Cerro de Pasco, employ
American experts for the technical and scientific require-
ments of the mining and smelting operations and divisional
supervisors to direct native labor. It is standard practice
of American companies to use American employees only
so long as is necessary to train local nationals to replace
? them. However, in connection with professional and
? scientific fields many years of tutelage are often required
-to brit g native abilities to a trustworthy level. Once locals
are fully trained in their work, they are given free rein over
the supervision and inspection of native employees under
their jurisdiction.
A-5 Tour of Duty and Rotation Policies
? American business observes no fixed standards of
practice as to the length of time American employees
remain on their jobs overseas. Policies vary from
company to company and from job to job within com-
panies. Primary considerations governing tours of duty
are individual job performance; climatic, social and
living conditions; physical fitness, domestic situations,
and, as often is the case, the employee's own wiehes.
It is customary for most major companies to rotate top
executives between American and foreign plants to get
a fresh point of view in behalf of the business and the
individual.
Except for special interests or specific purposes such
as attach to technical and scientific personnel, American
companies do not follow the system of rotation from post
to post practiced by the Foreign Service of the U. S.
Government. Business inclines to the opinion that
executives and specialist personnel assigned to long term
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1
duty abroad do not reach full effectiveness in a foreign
country until they have lived there two or three years.
Consequently, moving an employee from one country to
anct:',er and subjecting him to a new language and new
patterns of economic conditions and industrial methods
is generally considered a disservice to company efficiency
and a hardship on the individual and his family.
The policy of permitting American employees to
return to the U. S. on home leave or visits at company
expense is honored by nearly all American companies.
The length of the visit depends on the importance of the
job, the need for instruction in new products or pro-
duction techniques, new merchandising methods, and
potential application of field experience to home-office
planning. In addition many companies adjust on-job time
requirements at foreign offices or plants to the rigors of
climate or substandard living conditions. In high altitude
cities such as Mexico City, Caracas, Quito, Bogota, etc.,
for example, some American companies send their employees
to lower-level or sea-level resorts for a month or two each
summer. In some American mining and oil exploration
camps located in jungles and other uninhabited areas
American operators avoid " stir craze" by giving American
employees paid vacations and trips to the nearest cities.
Trans-Arabian Pipeline (Tapline) and the Arabian
American Oil Company give free air transportation to
Mediterranean resorts for American executive and technical
employees in their Near East installations as a respite
from the enervating summer heat.
A-6 Use of Local Personnel -- Employment Policies, Types
of Work, Differential in Pay Statue Amenities or Facilities
There are no basic norms influencing American
business attitudes toward employment of local personnel
in overseas operations. The criteria of selection of
domestic employees -- education; aptitude, initiative,
health and attitude -- generally apply overseas as they do
at home. The various strata of the working force--
executive, technical, sales, white collar and laboring
classes -- must be individually considered in respect to
income level, national customs, local labor laws and
practices governing employment, and on the ability,
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1J IN LA Latz);-mr.tr,i)
country by country, of local labor forces on all levels to
respond productively to advanced methods of scientific
and technical procedures. Obviously employment
practices by Firestone in Liberia applying to an un-
lettered and primitive labor force, differ vastly from
those of Sears-Roebuck in Mexico with its median
skilled labor and General Motors in Germany with its
highly techncial labor resources.
Wage factors are variable in relation'to the foregoing
considerations. The general practice is to follow the
going rate of the various labor levels of the particular
country, in most cases offering a slightly higher wage
than normal.
Native employees in executive and managerial positions
generally reach the salary brackets of their local American
counterparts. Remuneration of professional and technical
personnel is a relative constant between natives and
Americans in keeping with length of service and job re-
sponsibilities. Wages for skilled workers are generally
equal to the local market or slightly above and for un-
skilled workers (almost entirely native in American
foreign operations) are consistent with the market.
In keeping with the desire of all American companies to
integrate themselves quickly into the local economies no
as to avoid identification as an alien, hence potentially
exploitive, enterprise, American personnel are replaced
by the local personnel they have trained as soon as they
attain job competence. In all areas of the world native
workers, and in the majoriVy of cases, native management
and research personnel, have demonstrated an
ability to absorb training and acquire the necessary
know-how as .well as Americans have done at home.
The American industrial employment experience in
Latin America is fairly typical of the experience of
American business around the world. In the Argentine,,
for instance, several companies established by
Americans are now run entirely by locals. Other firms
employ Argentines in all executive levels and there are
many instances in which not a single American is
employed in American-established plants or businesses.
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Among the companies employing only a few Americans
are the Ford Motor Company, Coca Cola, Pal, All
America Cables and Radio, Parker Pen, Grant Advertis-
ing, Sandoz, American Express, Kodak; Eveready,
Braniff Airways, General Motors, and Singer. These
companies apply this employment policy in their other
operations throughout the world.
Another progressive policy of American firms,
pertinent to this subject, is that of employing women
in clerical work and training women as skilled workers,
often in contradiction to local custom which confines
women to the home. Again in the case of Argentina the
growing force of skilled women, by virtue of their ability
to perform certain types of work better than men, are
making an important contribution to the country's
progress in business and industry while increasing their
companies' productivity. Through such local employment.
American industry has added directly approximately
75,000 jobs to the Argentina economy. Indirectly,
through the stimulation by American investment of
subsidiary business and industry, thousands of other
jobs have been created.
In addition to their adherence to standard American
management-labor practices of fixed hours, safe and
healthy working conditions. American companies in the
great majority of their overseas operations offer their
employees such additional and often uncommon benefits
as group life insurance, incentive bonuses, product
discounts, and educational, medical, social and re-
creational facilities which augment their wages and
raise them above the local employment scales.
A recent survey of U. S. companies in Mexico
discloses that these benefits in some instances exceed
those granted to workers in the U. S. Same specific
examples:
Three of 46 respondent companies reported they r
provide housing or grant housing loans to employees;
19 offer low.-cost meals and 31 operate sports and social
programs.
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? ?
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A chewing gum company grants 8,1/2 days' holiday
above the legal minimum. Its retirement plan for men
after 20 years of service and women after 15 years
provides for 20 days' pay for each year of service. An auto
manufacturer gives its employees a 12-day bonus each
Christmas.
An airline pays 60% of its employees' life insurance,
a cotton processor 66 2/3%, a retailer puts 5% of profits
into an employees' fund. Some contribute to employees'
saving funds and several pay their employees' share of
social security in addition to their own. Employee
medical benefits of one kind or another are the general
rule of the U. S. companies. An office-equipment
manufacturer operates three in-plant infirmaries with
two doctors and three nurses; an auto company employs
two doctors and two nurses full time, pays for medical
subscriptions and medical bills of 80% of its personnel
and raises to 100% the social security allowance for the
first 90 days of illness. Several companies pay full
wages during employees' incapacitation.
Health and hospital services and facilities are also
supported in many countries by American comps. riles.
Esso (Standard Oil Company, New Jersey) provides
health and welfare programs in its various foreign
installations. As an example, for its operations in the
north of Argentina, Esso staffs a medical organization
of five full time physicians, 18 graduate nurses; 2
technicians and 27 medical assistants to carry on the
work of five dispensaries and out-patient service.
Collateral to the health program, Esso provides housing,
potable water, sewage systems, garbage disposal and
control of food-handlers to insure protection to their
employees, their families and local residents of com-
munities contiguous to its installations in undeveloped
districts.
The medical and health program Stanvac conducts for
its employees is an extensive one. In providing complete
medical facilities for all refining and producing employees
and their families in Indonesia alone -- some SO, 000
persons -- the company operates 12 clinics, three hospitals
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with a capacity of 250 beds and medical staff numbering
250, consisting of 15 doctors, 36 graduate nurses and a
complement of pharmacists, laboratory and x-ray
technicians, dressers, midwives and other assistants.
Employing the same principle, that efficient
operations are commensurate to the health of the labor
force, the Cerro de Pasco Corporation, an American
mining enterprise in Peru, operates a chain of nine ,
hospitals with 300 beds and employe 19 !ddctors to look
after the health of its 18,000 workers ilia their fami-
lies. , v
, ?
United Fruit similarly is concerned with the physical
and mental health of its employees and their families. It
operates thirteen major hospitals, over 100 dispensaries,
outpatient nursing service and preventive medicine
research laboratories as essential elements of company-
employee relations, serving not only the 34, 000 employees
in the company's operating area but somet'ung like four
times this number in employee-family members and
local residents not connected with the company.
A-7 Foreign Employee Training Programs
The overseas training programs undertaken by
American companies in their foreign plants are
directed principally to the inculcation of advanced
mechanical and technical skills and American
techniques of management and supervision. Train-
ing programs are geared to local economic and social
conditions and are contingent on indigenous labor
resources. Where well developed working forces are
readily available, training is largely intramural and
consists of instruction on company manavment procedures,
research activities, production and distribution system,
and marketing techniques.
Native executive material is frequently cultivated
in all areas through scholarship grants to local and U. S.
universities and technical institutes, on-the-job study
courses on the scene or in the U. S. parent company and
other foreign subsidiaries, local plant tours for students
and apprentice training on company time. This
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instruction follows the training practices of industrial
companies in the U. S. and for the same purpose...-. to
develop industriouei competent and loyal employees.
In newly developing countries and in still-primitive
countries just emerging from colonial status, American
industry perforce has instituted training and educational
programs in great depth. Often such instruction reaches ,
outside the plant well into the heart of the conininnity,
concerning itself with collateral industrial production
and commercial and financial operations, and such non-
industrial subjects as agriculture, road building,
sanitation, hygiene, child care and domeatic science, all
for the benefit of company workers and their families.
In the aggregate virtually every type of American
industry and agriculture -- from production to marketing....
is covered in the foreign training programs of U. S.
business. A few examples from the case histories of some
of America's most experienced overseas operators should serve
serve to outline the dimensions of American industrial
training programs abroad.
In respect to in-plant technical training the follow-
ing examples are typical of the foreign programs of the
.American industries these companies represent.
' The International Petroleum Company, a subsidiary
of the Standard Oil Company (New Jersey), carries on
? a large scale technical program for its 5,500 employees
in Peru directed to modern techniques and methodology
in drilling, lubrication, refinery operation, refinery
instruments, metering, pumping and welding practices,
electrical maintenance, warehousing, principles of
management-labor relations and plant housekeeping.
? The Cerro de Pasco Corporation, an American
mining and refining operation in Peru, has for more
than half a century given professional training to
qualified native employees in its labor force of over
le, 000 in mining, metallurgy, geology and hydroelectrics.
It also offers training in crafts, management and, for
the benefit of local employee welfare and the Peruvian
economy, supports education in the medical, public health
and veterinary fields.
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The Gillette Company, manufacturer of razors and
blades, trains foreign employees in high precision
machine work, quality Control procedures and metallurgy,
in its ten foreign manufacturing subsidiaries.
The American and Foreign Power Company gives
technical courses for line crews, subterranean cable
workers, meter crews, and boiler operators for the
company's utility and service operations in eleven
Latin American countries.
General Motors Corporation, throughout its world-
wide operations, trains repairmen and distributor
salesmen in plant schools and mobile instruction units.
Strong emphasis is given to autio-visualaid graphics
instruction and much of the company's training
material is used for basic training in automotive
operation and maintenance in foreign school systems.
The International Division of General Electric
Company, which has affiliates in most of the major
nations of the world and distributors in all free world
marketing areas, has operated in the U. S. parent
company a program of engineering training for foreign
graduate students for more than 60 years. Many of the
graduates of the General Electric-sponsored courses
have been employed by G. E. affiliates on their return
to their home countries and others have been assisted in
finding employment in governments, universities, public
utilities and electrical product or facilities users. The
operating characteristics of electrical machinery, design,
development, manufacturing, product testing and service
are covered in the company's one year course.
The foreign training program of the Standard Vacuum
Oil Company at its Indonesian installations is typical of
its programs in other areas and is representative of the
training given by other American oil companies, such
as Arabian American Oil Company in Saudi Arabia,
California Texas Oil Company at Bahrain Island,
Creole Oil Company in Venezuela. Stanvac Is training
activity, for which all Indonesian employees are
eligible, includes basic technical courses, English
instruction for native employees and reading and writing
for illiterate workers. The company training staff
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coordinates the trainini of employees abroad, the
Issuance of scholarships in Indonesia and abroad, and
administers a program of internships for university
and technical school students in the company's Indonesian
plants. Classroom, library, lecture-hall and laboratory
facilities are provided and all modern audio-visual aids are
utilized. In addition to the courses specifically related
to the essential skills of oil drilling and refining, Stanvac
conducts an accounting school accommodating around
450 students.
Academic and trade schools are maintained in
Liberia by Firestone Rubber Company for plantation
employees and their families. An important part of the
company's regular school program is vocational training
for office personnel.
? A recent survey in Latin America conducted by the
National Planning Association resulted in the surprising
disclosure that Be of 110 U. S. firms with branches or
subsidiaries in Latin America has brought Latin Americans
to the U. S. for training during the years 1950-1955.
Collectively, U. S. companies grant hundreds of scholar-
ships each year in operations throughout the world to
enable foreign employees and students to further their
education at local and U. S. universities and home office
technical training programs. The diversity of such
technical education is shown by a random sampling of
scores of examples. One sees a lubricant processor
sending workers to the U. S. and the Netherlands for
advanced training; a mining company sending metallurgists
regularly to Canada for technical education, a retailer
sending employees to the U. S. for a year of managerial
training and a plastics company providing two years of
training in the U. S. for foreign personnel.
Dealer and Distributor Training
The dissemination of knowledge on products and
production methods by American companies goes far
beyond the walls of their overseas plants. In fact the
plant is only the starting point for a broad program of
education and information to further the utility of the
company's products, equipments or services, and
to develop local collateral production and distribution
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resources essential to the company's marketing process.
The sharing of knowledge on production, maintenance and
merchandise techniques is an essential ingredient of
American business integration into foreign national
economies.
Heavy emphasis has been givento such programs by
U. S. companies operating in Latin America and in less
advanced areas of the world. The F. W. Woolworth
Company in Cuba and Sears Roebuck in Mexico, Colombia,
and Venezuela offer two of marry instances in which
American companies share information and experience to
enlarge retail markets. They have introduced in-
novations-in retail merchandising -- sanitary packaging
and food dispensing, window and counter displays, new
techniques of customer relations -- that have stimulated
supporting enterprise and developed new commercial
standards in the communities they serve.
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B - Dependents
3-1 Orientation and Indoctrination
Very little is done by American companies, prior to
the assignment of an American employee overseas, to
orient or indoctrinate or even interest his wife or other
dependents in the historical, social and cultural life of
the foreign country. This is left_ almost entirely to the
employee, assisted to a degree by company publications
carrying articles on the foreign community and its
domestic life. Some instruction on hygiene and Lalth
conditions in underdeveloped countries, particularly
countries in tropical areas, is given to wives and
dependents when they receive their pre-departure
inoculations.
While little is done for dependents prior to depart-
ture, once the employee and family have reached the
overseas post a real effort is made to assimilate them
into the foreign community. On being settled by the
company, the wife is invited to join various domestic
and cultural clubs conducted by wives of other American
employees. As guest of these groups the newcomer is
instructed by members on the living conditions,
domestic problems and practices, schooling for
children and social and recreational activities of the
community. In many foreign cities, the major cities
of Brazil, for instance, newly arriving American
women are greeted in the "welcome wagon" manner
so common to U. S. communities and thus are
oriented from the start in the life of the country.
B-2 Language Training
Unlike European women living in other countries,
American women abroad generally show little interest
or aptitude in learning the native language. A majority
are content to limit their associations to other
Americans and rarely show progress in the language
beyond learning the few shopping and household words
required for management of their homes. Language
instruction is readily available to the few who wish to
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learn, however, often at company expense, in adult
education programs, binational cultural centers and
"American colony" sponsored classes. American
women employees (numbering only a minor fraction
of the American male employees), contrary to the
attitude of employees' wives, regard proficiency in
the local language as a sine qua non of their job
responsibilities and consequently give it serious
study. American companies provide language
instruction to their American personnel as an
integral part of their overseas training programs.
?
13-3 Transportation, Housing, Welfare Services, Education
of Minors, etc.
Transportation of American employees.to overseas
posts is always at company expense and when length of
assicnment justifies it, transportation of their familes
and personal and household effects is also borne by the
company.
Passage is first class, by ship or airplane, and
constitutes an important expense to the company. In
many cases the cost of transportation determines the
relative value to the American company of sending
U. S. employees overseas to train foreign eimployees
or bringing foreign employees to the U. S. for train-
ing. Many of the larger companies follow the latter
course in regard to upper-level foreign personnel on
the premise that it is more economical and effective
for the company and more rewarding to the foreign
employee in that it gives him a better understanding
of the American free enterprise system and a feeling
of intimate membership in the company family. It is
noteworthy that the U. S.-trained foreign employee
has a significant public relations value to his company
and American business in general. By acquiring a
first hand knowledge of the American way of life and
imparting this knowledge to his countrymen, he helps
to insure America's good public and political relations
with his home country.
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Housing. of Americans abroad is at company expense
one way or another, either in company-constructed and
maintained housing developments in underdeveloped
countries or where acute shortages exist or through
housing allowances in metropolitan cities of industrialized
nations. Housing allowances are based on salary grades
and are comparable to those granted by the U. S. Govern-
ment to its foreign service personnel. Exploration,
extractive and refining industries and agricultural pro-
duction enterprises operating large inStallatiOnS in
underdeveloped countries have been constrainen'to
provide housing not only for American personnel but
for native as well. Such construction forithe, most part
has been in the nature of complete villages:requiring.
water supply, electricity, fuel, sewerage, 'schools,
dispensaries, commissaries and recreational
facilitie 5.
Welfare services are a built-in component of
management-personnel relations in nearly all American
business and industrial operations overseas. The health
and contentment of the American employee and his family
are as important to the company as to the employee. In
terms of transportation and maintenance he represents
an important investment to his company; consequently
special efforts are made to insure his physical health
and the health of his dependents with good medical
services, instruction in local hygiene and the best of
sanitary working conditions. Group health insurance,
in-plant dispensaries and nursing facilities and safety
programs in the plant community are standard bene-
fits. Equally strong efforts are directed to the mental
health of the American employee and his dependents.
These are reflected in company recreational, social
and cultural programs and in women and youth
activities of American business community organ-
izations which the company helps to support.
Education of the children of American employees,
except in underdeveloped areas where company schools
are operated or educational facilities are company-
subsidized, is left to the responsibility of the
employees. When the American employee's foreign
assignment is limited to a year or two his school-age
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children are often left in stateside boarding schools.
Children who accompany their parents abroad are
generally sent to private American or English
schools in countries whose educational systems are
below American standards. The American schools
are usually financed through tuition fees. In many
instances these are supplemented by contributions
of the local American companies. In rural areas
where American companies maintain schools for
the children of native employees, the American
children get their schooling along with the native
children. There is little mixing of American and
native children in education. However, social
mixing is encouraged as an important aspect of
community relations and many sports, recreational
and cultural activities are sponsored by American
companies to stimulate friendship between American
and native young people.
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C - Phnical. Facilities
C-1 Housing - Comparative Standards of Living, Con-
centration, Location and Types of Housing, Rentals,
Owner ship
? As noted in the foregoing subject on American
employee dependents, housing of American employees
in metropolitan areas is a matter of personal selection;
in remote and inaccessible areas housing is provided
by the company with quality according to salary levels
of the employees, American or native, either on a
rental or long term installment payment ownership
plan. Characteristic of company practices in the
latter case is the housing program of the Standard
Vacuum Oil Company at its installations in Indonesia.
At one of its refineries. Stanvac employs 9,800 un-
skilled and semi-skilled Indonesian workers. Of this
number about 2, 500 are housed by the company while
the remainder live in native villages or nearby urban
centers. Employees at any wage level who do not
occupy company quarters receive a housing allownace
of 13 percent of their basic pay. American, Dutch
and high-level Indonesian employees living on company
sites occupy houses comparable in quality to those of
suburban developments in U. S. factory communities.
One Stanvac development, occupied mainly by middle-
income bracket Indonesian employees, consists of
362 new duplex and four-unit concrete houses situated
on well-kept streets. Starting from unfilled and
ungraded swampland the company built an entire
community, complete with public utilities, schools
and shopping center.
Such housing and community service programs
which, in many instances, have included roadbuilding,
communications and transportation facilities, shipping
installations, and even the constructicn of churches,
have invariably been undertaken out of necessity to
proviide the requisites of employment and industrial
operations. Such community development requires a
delicate sense of balance in the companies' country
relationships and, as conditions permit, they
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endeavor to relieve themselves of such extraneous
responsibilities by turning them over to local and
national governments or native entrepreneurs. They
feel that company paternalism is not only uneconomic
but tends to increase employee dependence and
stultify the local community's social initiative. Also
in many countries (Guatemala, Colombia, Peru, for
example) experience has shown that the community
leadership such patronage entails is more likely to
generate political antagonism or bureaucratic
cupidity sufficiently strong as to imperil the
company's operations and investment than create
the public confidence it seeks and deserves.
C-2 Recreation Facilities
Wherever American:business operates American
emplcyees enjoy the same recreational facilities they
are accustomed to haye,atlhome. Recreational, social
and cultural benefits are ,so coinmon to American
employee-relations that' company-family identity would
be lost without theni; ?TI?;e?foreign subsidiary like its
American parent cOmpanY carries out activities to
amuse the leisure 9f all its 'employees?company
. library, motion picture Programs, adult education
and hobby groups, baseball, swimming, gdf, , tennis
and basketball teams. Where company facilities are
lacking, arrangements are made with other companies
to share their facilities or with local clubs for employee
use. Executive-level native employees and office
workers generally are extended the club privileges
given to American employees. In addition the
American business cornmunity and binational
cultural centers have sports and recreation pro-
grams and support international golf, tennis and
country clubs to which American employees and
their dependents are welcome.
In keeping with foreign national recreation and
sport's interests, American companies provide equip-
ment and programs for the native working force and
their families. In company communities such as those
of the oil extraction; rubber, sugar, and mining
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A program ofmedical research started early in the
Firestone operation culminated in 1952 with the creation
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of the Liberian Institute of the American Foundation of Tropical
Medicine, now a world center in the research of tropical diseases.
Also Firestone established the country's first trans-
oceanic communications system and constructed a hydroelectric
power plant to provide essential public services for which the
government had neither experience nor funds. Since the start
of the Firestone operation in 1926, Liberian exports have multi-
plied over tWenty times; 30,000 employees have steady wages
from the yield of 90,000 acres of rubber trees, and collateral
business and industry have found commensurate growth under
the direction of technically-trained Liberians educated in
Firestone schools.
The Liberian operation is typical of the economic integra-
tion that Firestone practices in its world-wide production and
distribution system. The company maintains plants in.Canada,
Venezuela, England, New Zealand, South Africa, India, Germany,
Argentina, Brazil, Switzerland, Sweden and Spain.
Another example of the partnership of American investment
with foreign countries is that of the United Fruit Company and
the Central American nations in which the company has been
operating for 57 years, originally in the production of bananas
and more recently in sugar, chocolate, manila hemp and palm
oil. Starting with unexplored jungle, United Fruit has built
many communities and caused cities to grow around the pro-
duction and commerce it has created. Like so many other
American companies operating in underdeveloped areas, the
company has had to assume many of the obligations of govern-
ment while eschewing the role of government. It has provided
a large percentage of the facilities of commerce and the instru-
ments of social well-being, building railroads, dock-sites,
power-plants, commissaries, living quarters, hospitals, schools
and churches and nearly all the other accessories of a decent
standard of living.
Another noteworthy company-country working relationship
with many of the same problems has been developed by the
Staudard Vacuum Cil Company and the Republic of Indonesia.
This also is based on mutual good will and cooperation in
utilizing American private investment to promote profitable
enterprise and nurture the growth of the national economy. The
company has constructed 775 miles of roads, pipelines, docks,
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dirports (two of which are used by the Government airline),
telephone systems, electric power systems, company communi-
ties, schools and hospitals, at no cost to the government and all
available to the public, and has contributed to the maintenance
of public roads and bridges. These Otanvac works have made
agricultural development possible. They have helped to create
community-supporting businesses and have opened new outlets
for native raw materials, fc,r new building ruld manufacturers.
Technological development
The sharing of scientific and technical knowledge, American
business has found, pays big dividends in every market. It
helps build local industry, expands the demand for American
products, contributes to national progress in many tangible ways
and provides pools of technological know-how to speed the
growth of American foreign enterprise.
In one way or another almost every American company
operating abroad contributes knowledge and skills to all levels
of the local working force -- from the professional scientist
and post-graduate specialist down through mechanics and opera-
tors to unskilled labor. The many ways in which the individual
American companies spur technological advances in other coun-
tries are marked by the commercial experiences of Anderson
Clayton and Company, a large cotton and coffee processor opera-
ting in five Latin American countries. The company's improved
methods of cotton ginning, introduced in Brazil, have raised the
standards Of ginning for the entire country; a company designed
cotton-lint press has doubled the number of bales of cotton that
previously could be loaded on a railway car -- a long step forward
in the distribution of this important national commodity; its
system of warehouses for export cotton has added greatly to the
industry's progress. In the Brazilian vegetable oil industry
Anderson Clayton's new techniques to remove solids and improve
bleaching and deodorizing techniques have expanded export
markets for Brazil's high quality oil and thereby have raised an
infant industry to a major position in the country's economy.
As part of its selling program the company gives store demon-
strations in cookery, dietetics and nutrition and distributes
recipe books on a broad scale.
In Latin America, International Harvester Company, seek-
ing to correct human inefficiencies which seriously obstructed
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the mechanization of agriculture throughout South America,
Introduced a broad gauge training program to train local
teachers who in turn would train tisers and employees of the.
company's distributors. During 1951-54, 300 schools for
operators and maintenance men trained nearly 15,000 persons
in simple, graphic and technically well-organized courses on
agricultural machinery. International Harvester diffuses its
technical knowledge throughout the world with a continuous flow
of catalogs, booklets, and manuals in the languages of the many
countries in which the company has subsidiaries.
Similarly operating throughout the world, Singer Sewing
Machine Company carries its sewing lessons and homecraft
training and cottage industry programs from metropolitan
centers to the farthermost jungles.
The Dupont: Company employs expert agronomists to give
technical information on agricultural chemicals and soil con-
ditioning while selling the insecticides and fungicides it pro-
duces in Peru and other Latin American countries.
On the financial side of knowledge-sharing, a Brazilian
underwriting house whose capital was largely subscribed by the
Chase Manhattan Bank of New York, serves as a demonstration
center for the organization of capital markets along U. S.
banking lines and services new enterprises and investors alike.
The foreign subsidiaries of major American pharmaceutical
manufacturing companies carry on knowledge-sharing and local
research programs for medical practitioners and students not
only to expand their markets but to create reserves of scienti-
fic personnel on which to draw for company employment.
The giants of American industry n the leading manufacturers
of automotive, agricultural, construction and electrical machin-
ery and products and the big processors of oil, steel, chemicals
and pharmaceuticals have created foundations with large capital
reserves for the explicit purpose of cultivating knowledge for the
benefit of mankind. Funds are made available to American
universities overseas and to foreign colleges and technical insti-
tutes for special studies and research. Foreign students by the
hundreds are brought to the U. 5, for advanced study under
scholarships granted by these foundations. The knowledge for-
eigners gain in new processes in American science and industry
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adds materially to the progress of their native countries when
they return home and put it in practice.
American business menIs groups in cities throughout the
world frequently subsidize research programs on technical
and scientific problems in local universities such as is custom-
arily done in the U. S. by trade associations and industrial
organizations.
In underdeveloped areas, locally operating American
business and industry have provided e:ctensive educational facia-
ties-essential to economic progress. A classic example is the
Pan-American School of Agriculture in Honduras which offers
a three-year course of practical training in all phases of tropical
agriculture to qualified young Latin Americans. The school
represents an investment by United Fruit of more than $5 million
and an annual supporting fund of nearly $350 thousand.
?
Public Relaiions
In keeping with local investment and marketing values,
American companies direct their institutional advertising in
many countries to the building of closer ties with local business
and the public and in promoting a better understanding of the
American private enterprise system.
All the media of public communication are used to this end ...-
films, lectures, company publications, radio and television
programs, news and feature services to Local publications. In-
Brazil, for instance, radio and television news and feature pro-
grams are sponsored by Coca Cola, General Electric, Esso,
Bendii: and American and Foreign Power, all bearing on U. S.
and Brazilian economic and cultural affinities. Motion picture
programs are regularly presented by Ford, General Electric,
the New York Port Authority, and International Harvester, among
others. Many of the larger U. S. firms sponsor hospitality pro-
grams for important local figures and foreign visitors. Airlines
-- Pan American and Braniff t?-? and shipping lines -- Moore-
McCormack and Delta ? promote two-way tourism between
Brazil and the U.,S. by publicizing respective attractions and
spon'soring exchanges of persons.
The American buainess community works collectively for
national identification by contributing generously to cultural
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interests, often initiating and maintaining youth organizations,
sports clubs, labor social clubs and women group activition?
One finds such diverse activities as a soft ball league organized
and subsidized by American business men in Madras, a country-
wide 4-H club movement and junior baseball leagues sponsored
by North Americans Ln Iviexico; symphonic orchestras, art
exhibits, underprivileged children's summer camps, national
commemorative festivals of all kinds in all parts of the world
supported by American business groups. One also sees such
cultural endeavors by individual American companies as Creole
Oil sending an exhibit of the works of Venezuela's leading artist
on tour of the U. S., and publishing books on the avifauna of
Venezuela; United Fruit Company reconstructing the ancient
Maya sites in Guatemala as a national monument, and Aramco
contributing to archeological research in the Bible Land.
It is by such overseas investment in plant and labor, by
such dispersion of scientific processes and technical skills,
by such integration into the economies of other countries and by
such application of management-personnel principles as this
report has indicated that American business and its overseas
representatives demonstrate throughout the world the power
of private enterprise to create the social capital so necessary to
international understanding and cooperation.
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CONF
CONFIDENTIAL
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