THE MUTUAL SECURITY ACT OF 1960

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP91-00965R000300200001-5
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 68
• Document Creation Date: December 15, 2016
• Document Release Date: August 27, 2003
• Sequence Number: 1
• Publication Date: April 22, 1960
• Content Type: REPORT

Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
Calendar No. 1319
86TH CONGRESS I
2d Session 1
REPORT
No. 1286
THE MUTUAL SECURITY ACT OF 1960
REPORT
OF THE
COMMITTEE ON FOREIGN RELATIONS
UNITED STATES SENATE
S. 3058
APRIL, 22, 1960.-Ordered to be printed
Filed under authority of the order of the Senate of April 20, 1960
UNITED STATES
GOVERNMENT PRINTING OFFICE
WASHINGTON : 1960
Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
 Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
COMMITTEE ON FOREIGN RELATIONS
J. W. FULBRIGHT, Arkansas, Chairman
THEODORE FRANCIS GREEN,' Rhodelsland
JOHN SPARKMAN, Alabama
HUBERT H. I-IUMPHREY, Minnesota
MIKE MANSFIELD, Montana
WAYNE MORSE, Oregon
RUSSELL B. LONG, Louisiana
JOHN F. KENNEDY, Massachusetts
ALBERT GORE, Tennessee
FRANK J. LAUSCHE, Ohio
FRANK CIIURCII, Idaho
ALEXANDER WILEY, Wisconsin
BOURKE B. HICKENLOOPER, Iowa
GEORGE D. AIKEN, Vermont
HOMER E. CAPEHART, Indiana
FRANK CARLSON, Kansas
JOHN J. WILLIAMS, Delaware
CARL MARCY, Chi'f Of Staff
DARRELL ST. CLAIRE, Clerk
Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
 Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
CONTENTS
Page
1. Main purpose of the bill________________________________________
1
2. What the bill provides__________________________________________
2
3. Background and committee action_______________________________
3
4. Military assistance (ch.I)---------------------------------------
5
5. Defense support (sec. 201(a))------------------------------------
6
6. Conditions of military assistance and defense support (sec. 201 (b) and
(c))--------------------------------------------------------
8
7. Development Loan Fund (sec. 202) ------------------------------
8
8. Technical cooperation (see. 203)_________________________________
12
(see. 203(a))___________________________
A. Bilateral programs
12
,
B. United Nations (sec. 203(b)(1))___________________________
C. Organization of American States (sec. 203(b)(2))____________
13
D. Study of Point 4 Youth Corps (sec. 203(c))________________
14
9. Special assistance (sec. 204(a))___________________________________
14
10. Other programs------------------------------------------------
15
A. United Nations Emergency Force (sec. 204(b)) -------------
B. Surplus agricultural commodities (sec. 204(c)) --------------
16,
C. Perlin (sec.204(d))--------------------------------------
16'
D. Indus Basin development (sec. 204(e))---------------------
16;
E. United Nations High Commissioner for Refugees (sec. 204(f)
(1)) --------------------------
18
F. Escapees (sec.204(f)(2))---------------------------------
18
G. United Nations Children's Fund (sec. 204(g))_______________
19
H. Palestine refugees (see. 204(h))___________________________
20
I. Ocean freight (sec. 204(i))________________________________
21
J. Administrative expenses (sec. 204(j))______________________
22
K. Atoms for peace (sec. 204(k))_____________________________
22
11.
Contingency fund (ch.II)---------------------------------------
23
12.
General and administrative provisions____________________________
24
A. Cultural monuments of upper Nile (sec. 401(a))_____________
24
B. Repeal of authority regarding machine tools (see. 401(b)) _ _ _ _
24
C. Use of barter proceeds (sec. 401(c))_______________________
24
D. Notice to legislative committees (sec. 401(d)) ---------------
24
E. Pay of employees in local currency (sec. 401(o))-------------
24
F. Employment of personnel (sec. 401(f))_____________________
27
G. Reports (see. 401(g)) --------------- ---- - ---------
28
H. Contracts for personal services abroad (sec. 401(h)) ---------
28
1. Construction or acquisition of facilities abroad (sec. 401(i))___
29
13. Technical amendments (ch. V)___________________________________
29
14. Amendments to other laws______________________________________
30
A. Use of '.Public Law 480 foreign currency (sec. 601(a)) --------
30
B. Grants of commodities for economic development (sec. 601(b))-
30
C. Freight charges to landlocl-od countries (sec. 601(c))_________
31
D. Repeal of international health funds (sec. 602)______________
31
E. Food and Agriculture Organization (sec. 603)_______________
32
F. South Pacific Commission (sec. 604)_______________________
32
G. Assistance for foreign students (sec. 605)___________________
32
15. Study of foreign economic activities (sec. 606)_____________________
33
Changes in existing law_____________________________________________
34.
Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
 Approved For F gleese 2Q9$/.10/16,,:} CIA, ROP9,1-00965R0003002Q,0001-5
86T3K(`(?QRs SENATE
d session
THE MUTUAL SECURITY ACT 'OF 1960
Calendar No. 1319
J t . PORT
~To
APRIL 22, 1960.-Ordered to be printed
Mr: FULBRIGHT, from the Co mmittee on Foreign Relations,,-,
submitted the following
REPORT
[To accompany S. 3058]
The Committee on Foreign Relations, having had under considera-
tion the bill (S. 3058), to amend further the Mutual Security, Act of
1954,.as amended, and for other purposes, reports it favorably with
an amendment in the nature of a, substitute and recommends: that
it be passed by the Senate:
1. MAIN PURPOSE OF THE BILL
The main purpose of the bill is to authorize appropriations for
those portions of the mutual security program which remain on an
annual, basis. These are principally defense support, technical
cooperation, special assistance, and the President's contingency fund.
For these :and a number of smaller programs, the bill authorizes total
appropriations for fiscal year 1961 of not to exceed $1,425,500,000.
Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
 Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
2 THE MUTUAL SECURITY ACT OF 1960
2. WHAT THE BILL PROVIDES
The bill authorizes the following appropriations, as compared with
the administration request and the action of the House:
De#9ri?@ supYfSSrt- - -------------?----?^---_------?----
Bilateral technical cooperation------------ -------------
U.N.technical cooperat.ion_____________________________
OAS technical cooperation______________________________
Special assistance---------------------------------------
U.N. High Commissioner for Rfuugees__________________
Escapees ------------------------------------------------ U.N. Children's Fund__________________________________
Palestine refugees --_----__?----------------?-----------
Ocean freight----- _____?--_..._.._._._ ._..-_.-.?__
IOAadministration---------------- __________..__.___
Atoms for peace --_---_?--_-------------
______________
Contingency fund_ ________ -
Administration
request
House bill
Senate com-
mittee bill
$724, 000, 000
$676, 000, 000
000
72
000
$700, 000,000
000
000
172
172,000,000
,
,
1
,
,
33,000,000.
33,000,000
33,000,000
1,500,000
1,600,000
1,500,000
268.500,000
256,000,000
260,000,000
1, 500,000
1, 600, 000
1,100,000
3, 500, 000
3, 500, 000
3, 500, 000
12, 000, 000
12, 000, 000
12, 000, 000
, 500,000
18
18, 600, 000
3 22,000, COO
2,000,000
2,000,000
2,000,000
40,000.000
40,000,000
40,000,000
,400,000
3
3, 400, 000
3, 400, 000
175, 000,000
100,000,000
175, 000, 000
Total_____________________________________________
1, 464, 900, 000
1, 318, 400, 000
1,426, 500,000
I Unobligated funds of approximately $6,500,000 which the administration: and House bills would have
made available for use in 1981 are to revert to the Treasury.
In addition, the bill contains these major provisions:
1. Military assistance, other than training, for Latin America is
limited to $55 million, a ceiling $2 million below the program proposed
by the administration (sec. 101(a) ).
2. Recognition is given to the importance of free economic institu-
tions and the stimulation of private investment in housing in rapidly
developing countries, and the-sense of Congress is expressed that the
Development Loan Fund should assist savings and loan type institu-
tions and guarantee private U.S. capital available for housing invest-
ments in Latin America (sec. 202).
3. The President is directed to arrange for a study of the advisa-
bility of establishing a Point 4 Youth Corps (sec. 203(c)).
4. Not less than $'175 million of the 1961 funds; other than for the
DLF,, are earmarked for the export of surplus agricultural commodi-
ties (sec. 204(c)).
5. Authority is provided to use funds for the Indus Basin develop-
ment, under the supervision of the International Bank for Recon-
struction and, Development in accordance with the Bank's standards
and. procedures rather than those provided by the Mutual Security
Act or other U.S. laws (sec. 204(e)).
6. The provision earmarking 10 percent of Palestine refugee funds
for repatriation or resettlement is.repealed. After January 1, 1961,
U.S. contributions to the U.N. Relief and Works Agency cannot be
used for programs of relief which heretofore have been administered
on the basis of ration cards except for refugees whose need and eligi-
bility for relief has been certified after July 1, 1960. The President
is directed to send to Congress next year specific recommendations for
the progressive repatriation and resettlement of refugees and for
reducing U.S. contributions to UNRWA (sec. 204(h)).
7. Authority is provided, subject to the later approval of Congress,
to participate to a limited extent in an internationally financed
program to preserve the great cultural monuments which would
otherwise be flooded in upper Nile Basin as a result of construction
of the Aswan Dam (sec. 401(a)).
Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
 Approved For R % j1/1 181&hQAAPPy1- Q~65R000300280001-5
8. Authority is given to chiefs of diplomatic, missions to govern the
extent to, which employees of the Government and of Government
contractors, shall receive their pay and allowances abroad in local
currencies (sec. 401(e)) .
9. Title II of the Agricultural Trade Development and Assistance
Act (Public Law 480) is amended so as to authorize grants of surplus
agricultural. commodities for economic development. as well as for
relief (sec. 601(b)).
10. The ceiling of $3 million on. U.S. annual contributions to the
United Nations Food and. Agriculture Organization is repealed (sec.
603), and the ceiling of $75,000 on contributions to the South Pacific
Commissioln is increased to $100,000, (sec. 604).
11. The, President is directed to have a study made of the functions
and coordination of agencies engaged in foreign economic activities
"with a view to simplifying and rationalizing the formulation and
implementation of United States; foreign economic policies" (sec, 606).
12. Authority is provided for matching grants of not more than
$1 million a year in the aggregate to colleges and universities to aid
programs of counseling, orientation, and, English language training
for foreign students (see. 605).
3. BACKGROUND AND COMMITTEE ACTION
The President requested this legislation in a message to Congress
February. 16 (H,. Doc. 343), and a bill (S. 3058) incorporating the
President's proposals was introduced by Senator Fulbright by request
February 18. The Committee. on Foreign Relations held hearings
from March 22 to April 5 in the course of which it received the views of
the Secretary of State. and other officials charged with, the policy-
making and administrative aspects of the.program as well as, the views
of 19 private citizens and one Senator who requested to be heard.
The committee considered the bill and all amendments which had
been introduced in. executive session beginning April 6 and on April
20 voted to report it favorably to the. Senate as amended.
Because of the action of the Congress last year in authorizing
military assistance and Development Loan Fund appropriations on a
multiyear basis, S. 3058 is more restricted in scope than has been
the case with mutual security bills in, prior years. Except for special
authority regarding use of funds for development of the Indus Basin
in south Asia, and a 'new policy statement favoring loans and guaran-
tees fqr;housing, the bill contains little that is new.
'The illustrative, program presented by the administration reflects
a greater concentration of effort in nonmilitary assistance for countries,
specifically, India, Pakistan, and Taiwan, where conditions are par-
ticularly favorable for a burst of economic growth. The concentration
of effort is directly related to demonstrated practice or clear current
intention of'aided countries progressively to devote their own resources
to development and to move toward the most effective economic
and social policies.
The. policy involved here is welcome. It is,, in essence,. a policy of
exerting, the greatest effort at the points where the greatest results
may to expected. It indicates greater maturity and sophistication,
in the approach to foreign aid and represents at least some shift away
from the. scattershot approach which has been at the root of many,
criticisms of the program.
Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
 Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
4 THE MUTUAL SECURITY ACT OF 196:0
The committee calls attention, however, to the fact that several
other countries, notably in Latin America, are in the same position'as
India, Pakistan, and Taiwan in that additional increments of capital
would lead to a great deal more development. The committee hopes
that the shift in emphasis to countries with better prospects for
growth will not be confined to Asia and that the lending institutions
of the U.S. Government, as well as of international agencies,- --will give
particular attention to the needs of those Latin American countries
which are likewise ready for the economic takeoff.
The administration's illustrative program this year also includes
a special assistance fund of $20 million for sub-Saharan Africa, an
area urgently demanding the higher priority thus accorded it. The
economic problems here are totally different from those in,. say,
India, and any significant economic development must be preceded by
a long period of improvement in education and health. As the
committee understand it, this is also the view of the administration
and the purpose of the programs proposed for Africa: Although
included under the special assistance category of aid, this fund will
be used mainly for particularly intensive assistance of a technical
cooperation type.
The committee continues to be impressed with the fact that there
is no reasonable alternative to the mutual security program as an
instrument of U.S. foreign policy. The only alternative presented by
any of the witnesses at the committee's hearings was higher defense
spending at home. The committee does not comment here on the
adequacy of the administration's defense budget; but whatever the
needs of our national defense may be, meeting those needs will do
nothing to promote our political and economic interests in Asia,
Africa, and Latin America. A stronger Strategic Air Command will
not deter or inhibit Communist subversion; nor would it provide any
effective defense against the failure of the efforts of the peoples of
Asia, Africa, and Latin America to establish reasonably free and viable
economies and political systems. Over the long run, the' accomplish-
ment of these purposes is equally as essential to the United States as is
the deterrence of Soviet military aggression, and it is to this end that
the mutual security program is directed.
In assessing this program, one is struck with a paradox. It has
been supported strongly since its inception by every President, every
Secretary of State, every Secretary of Defense, every Chairman of
the Joint Chiefs of Staff, and every Congress. It has likewise been
endorsed by most of the private citizens groups that have thoroughly
studied it, by countless advisory committees, and by most of the
major private business, labor, farm, and other civic groups. Indeed,`
there is an impressive body of thoughtful reports which calls for an,
even larger program. All of this would seem to indicate overwhelming
public support; yet there is unmistakable evidence that the program
is misunderstood and disliked by large numbers of the American
people.
A part of the explanation for this paradox undoubtedly lies in faulty
administration of the program. Over the years, criticism has been
based increasingly on mistakes in administration rather than on the
fundamental policy issues involved. Given the circumstances in
which the program has been developed and carried out, it is not sur-
prising that such mistakes have been" made. In the beginning, there
Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
 Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
THE MUTUAL SECURITY ACT OF 1960
was no body of national experience on which to draw, no corps of
well-traiiced personnel ready at hand. Except for a handful of mis-
sionaries.-and businessmen, the American people as a whole were rank
amateurs at this business as recently as 12 years ago. This is the
kind of gap: which cannot be closed in a decade, or perhaps even in a
generation.
Further., the. task involved here is perhaps the most difficult adminis-
trative job of our times. Since the end of the Marshall plan when the
emphasis shifted to underdeveloped areas, we have been engaged in
what is essentially an effort to build institutions in alien cultures,
many of which are set in difficult physical environments. Large
sums. of money and a sense of urgency have increased the probability
of mistakes, and it.should not be a cause for wonder that mistakes
have in fact been made. So far, however, we have managed to sum-
monthe requisite combination of faith and persistence to avoid making
the worst mistake of all, which would be to quit trying.
And progress has been made. There is evidence, as cited, of
a more mature, sophisticated approach on the part of the adminis-
tration. We have learned from our mistakes, albeit perhaps not
as rapidly. as would be desirable.
The committee is, increasingly convinced that the key to a mutual
security program which will be effective abroad as well as popularly
supported at home lies in the caliber and skills of the people who
administer it, at home and especially abroad. There has been marked
improvement in this area, but more remains to be done. It is par-
ticularly important that the agencies concerned give more attention
to their long-term personnel needs and especially to the proper training
and orientation. of personnel-and their wives-destined for foreign
service.
In the meantime, nothing is to be gained, and a great deal is to be
lost, by abandoning or emasculating the enterprise.
4. MILITARY ASSISTANCE (CH. I)
This chapter places. a ceiling of $55 million a year, beginning in
fiscal year 1961, on the value of programs of military equipment and
materials for Latin: America. It replaces a ceiling in the current law,
which applied to fiscal year 1960 only, and which set a limit equal to
the level ~of fiscal year 1959 obligations and reservations. Because
different things are included in the present and proposed ceilings, the
two are not comparable. The ceiling proposed by the committee,
however,,: will result in a reduction of $2 million from the amount of
equipmen't and materials proposed for Latin America in the adminis-
tration's illustrative program.
The committee would have been disposed to make an even larger
reduction except for the fact that $45 million of the total is accounted
for by programs in two countries to carry out prior commitments.
The committee continues to be concerned over armaments in Latin
America and hopes that progress can be made in the coming year
toward a regional arms limitation agreement, as proposed by the
Presidents of Chile and Peru.
The $55 million ceiling in the bill includes equipment and materials,
whether, new or excess and whether furnished on a grant or credit
basis with military assistance funds. It does not include military
S. Rept. 128.6,96-2-L2
Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
 Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
6 THE MUTUAL SECURITY ACT U$' 1960
training or sales financed with service appropriations. The committee
felt that such sales should be treated separately from grants or credits
and that some flexibility should be left with the administration. It
hopes, however, that the administration will use this flexibility with
restraint and discretion and that cash sales anywhere in the area will
be carefully scrutinized. It particularly approves the policy of no
sales in the Caribbean, and it hopes that forceful representations can
be made to our European allies to support this policy.
In exempting military training from. the ceiling, the committee
was motivated by the feeling that such. training has useful political
as well asmilitary results. Particularly for junior and middle grade
officers, a course in one of the U.S. service schools provides a beneficial
exposure to American institutions and results in better understanding
of American attitudes and policies.
The committee reiterates its view that the military assistance
program to Latin America, including training, should be carried out
so far as possible with emphasis on the performance of economically
useful civil functions by the military. Section 105(b)(5) of the
Mutual Security Act provides that "to the extent feasible and con-
sistent with the other purposes of this chapter [i.e., military assistance],
administrators of the military assistance program shall encourage
the use of foreign military forces in underdeveloped countries in the
construction of public works and other activities helpful to economic
development." This implies training in engineering and assistance
for military engineering units. Something has already been done
along this line, and the committee hopes that more progress can be
made, not only in Latin America but also in other less developed
countries. The kind of work involved is primarily construction of
such things as roads, harbors, bridges, and airfields roughly similar
to some of the things done by the Army Corps of Engineers in the
United States.
5. DEFENSE SUPPORT (SEC. 201(a))
The bill authorizes appropriations of not to exceed $700 million for
defense support for fiscal 1961, compared to $724 million in the
administration request. For fiscal 1960, $751 million was authorized
and $695 million appropriated. This appropriation is supporting a,.--
1960 program of $765.7 million, the difference being accounted for by
drawing upon other available funds. The program proposed by the
committee for 1961, therefore, represents a reduction of $65.7 million
from the 1960 program.
Defense support programs are planned for 12 countries in 1961-
Spain, Greece, Iran, Pakistan, Turkey, Cambodia, China (Taiwan),
Korea, Laos, the Philippines, Thailand, and Vietnam. Each of these
countries also receives military assistance. In eight of them, the
administration proposed reductions in defense support for 1061; in
three of them, increases; and in one, the same level.
All of these countries have received defense support in the past,
and the reasons which make a continuation of the program necessary
'in 1961 are essentially the same reasons that have made the program
necessary in the past. Spain is the site of important U.S. air and
naval bases. Greece and Turkey are two of the poorest and most
...
strategically located of the NATO countries. Iran is at the center.,_
of the Central Treaty Organization, subject to constant harassment
Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
 Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
THE MUTUAL SECURITY ACT OF 1960 7
from the Soviet Union, and quite incapable of making, unaided, the
economic and military effort deemed necessary to preserve its inde-
pendence. Pakistan is a member of both CENTO and SEATO.
Its relations with India have undergone marked improvement, par-
ticularly as regards the Indus Basin dispute, and the time seems ripe
to make an extra effort to push the country across the threshold of
economic growth. Cambodia is the scene of active competition be-
tween American and other free world aid programs on the one hand,
and Soviet and Chinese Communist programs on the other. Taiwan
lives under the constant threat of Chinese Communist aggression,
but has nonetheless made quite remarkable economic progress and
the signs are propitious that an extra effort here would pay more
than proportional dividends. Korea remains a troubled divided land,
living under a tenuous armistice. Laos has a long common border
with Communist China and North Vietnam and severe internal
security problems which are at all manageable only because of outside
assistance. The Philippines is a member of SEATO and the site of
important U.S. bases. Thailand is likewise a key member of SEATO
and an important stabilizing influence in southeast Asia. Vietnam
remains divided and struggling to attain viability.
In each of these countries, there is the common characteristic that
the withdrawal of American assistance would have far-reaching
adverse economic and political consequences.
In the illustrative program of $724 million submitted by the
administration, $61.2 million was proposed for carrying out specific
projects, $637.8 million for financing the import of commodities, and
$25 million for cash transactions. Half the project assistance was for
the fields of transportation and industry and mining. The nonproject
assistance was to finance the import of $273.6 million worth of raw
materials and fuels, $161 million of machinery and equipment, $141.3
million of agricultural commodities, and $62 million of other goods.
These figures will have to be adjusted to reflect congressional action.
As reflected in the hearings (p. 328-329, 331, and 336-337), the
committee was gravely concerned over the situation in Korea prior to
the most recent and serious outbreak of rioting. Although, as stated,
the committee sees no presently acceptable alternative to continuing
the aid program in Korea, the recent events in that country raise a
question, which is of wider application, as to the long-term effectiveness
of an aid program conducted in the absence of an atmosphere
of expanding basic freedoms.
In regard to the aid program itself in Korea, the committee is some-
what disturbed by the fact that it continues to be administered in
accordance with procedures which were in effect during the Korean
war and which differ from those applying to other defense support
programs. This is done under the provisions of section 131(d) of the
Mutual Security Act which authorizes defense support to Korea
without regard to certain statutory requirements applicable elsewhere.
This authority has been used principally to make special arrangements
regarding Korean counterpart funds and to use defense support funds
to finance ocean freight costs for voluntary agency relief shipments to
Korea.
It seems to the committee that the special circumstances justifyin
these procedures no longer exist and the committee has been gratiile
to note that the administration has already begun negotiations
Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
 Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
8 THE 1itAiA SECURITY `ACT 0F' 1'9'6'0'
toward revising the counterpart arrangements and other procedures in
Korea to conform with the normal statutory requirements. It
expects that this will have been done by next year, at which time con-
sideration should be given to repealing section 131(d).
6. CONDITIONS OF MILITARY ASSISTANCE AND DEFENSE SUPPORT
(SEC. 201(b) AND (C))
These subsections amend sections 141 and 142(a) of the act so as to
exempt military training from the conditions applicable to other
types of military assistance and to defense support.
These conditions, which are spelled out in sections 141 and -142,
include, among others, that the recipient country agree to-
make, consistent with its political and economic stability,
the full contribution permitted by its manpower, resources,
facilities, and general economic condition to the development
and maintenance of its own defensive strength and the
defensive strength of the free world-
and to-
take all reasonable measures which may be needed to
develop its defense capacities.
There are some countries which are reluctant to agree to these,
as well as to some of the other points required, and which do. not want
military equipment assistance from the United States but which
would like to send some. of their military officers to the United States
or the Canal Zone for training. Inasmuch as training is the only
assistance involved in these cases, it seems to the committee unreason-
able to require the same type of agreement as is required for military
equipment or for defense support. Indeed, it seems to the committee
in our national interest to encourage the training of limited numbers of
officers from these countries in the United States.
The amendments to the law proposed here will make the conditions
applicable only to defense support, military equipment, and materials
thereby making training possible without the same kind of forma
agreement that is now required.
7. DEVELOPMENT LOAN FUND (SEC. 202)
This section makes a series of amendments regarding the Develop-
ment Loan Fund, the net effect of which is to give more emphasis
to use of the Fund to stimulate free economic institutions and.to aid
agriculture and housing.
These amendments are a result of a feeling on the part of the com-
mittee that the purposes of the Development Loan Fund have been
too narrowly construed and that the Fund has limited itself too se-
verely to projects which would directly contribute to the development
of economic resources or to the increase of productive capacities.
This interpretation tends to ignore one of the biggest needs of under-
developed countries-name l , the lack of the kinds of economic in-
stitutions which have playedsuch an important role in the growth of
the United States. Examples are savings and loan associations,
stock 'exchanges, and agricultural cooperatives.
Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
 Approved For Release 2003/10/16 : CIA-RDP91t 00965R00030O.gOO01-5
THE MUTUAL C RITY ACT O 9$0,
In order.-to emphasize this point, two of.the amendments made ,by
section 202 of the bill insert.the phrase "free economic institutions"
at appropriate places in the act's description of the DLF's purposes,
and the criteria for DLF loans. The DLF's purposes, in section 201'
V theact, are amended to include assistance for the efforts, of free,
peoples to-develop "free economic institutions" as well as to develop
"their economic resources." The criteria which the Fund is directed
to take into account in its operations (sec. 202(b) of the act) are
broadened to include whether the activity gives reasonable promise.of,
contributing to the development of "free economic institutions", as.
well as to whether it gives reasonable promise of contributing to the
development of "economic resources or to the increase.of produptivc,,
capacities."
The Fund's purposes are also amended in two other respects. First,,
it- is made clear that these purposes embrace agricultural as well as?
industrial. development. Although the law as it now stands obviously
encompasses agriculture as well as industry, the context, especially
when taken in conjunction with the criteria for DLF loans in section
202(b), affords a basis for the argument that the congressional intent
is primarily directed toward industry. The amendment is designed
to bring about a more balanced approach as between agriculture and
indus try.
As a matter of fact, capital, both public and private, is much more
readily; available for industrial than for agricultural projects. This
has resulted in a relative neglect of the agricultural sector. The DLF
is an appropriate institution to overcome this neglect and give agri-
culture the attention it deserves.
Maldistribution and misuse of land and the desire for land .reform,
are almost universal characteristics of underdeveloped countries.
History provides. niany unhappy, examples, some of them recent and
nearby, of the chaotic channels into which this. legitimate desire can
turn when it is frustrated for too long. There are therefore compel-
ling political, as well as economic and social, reasons for the United
States to do what it can to help bring about needed rural reforms
while there is yet time to forestall development of such situations.
Fortunately, there are many governments throughout the world, in-
eluding several in Latin America, which are responsiveto the demand
for land reform and which are taking steps to meet it-in afair and
responsible way. These governments need all the, 491p they can gget,
and it is-in our national interest to help them to the extent feasible.
Second, a new statement is added recognizing the importance of-
the development of free economic institutions and the stimu-
lation of private investment, local as well as foreign, -in the
field of housing-
in rapidly developing countries. The statement also expresses the.
sense of Congress that-
consistent with the other purposes of this title [i.e., the De-
velopment Loan Fund], special consideration should be given
to loans and guarantees to stimulateactivities in this field.
This amendment is related to a new section 207 which the bill adds
to the act and which relates to housing projects in Latin American
countries. This new section expresses the sense of Congress that the
Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
 Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
10 THE MUTUAL SECURITY ACT OF 1960
DLF should assist in the development in Latin America "of self-
liquidating pilot housing projects designed to provide experience in
countries at various sta es of economic development by participating
with such countries in (1) providing capital for the establishment of,
or for assistance in the establishment of, savings and loan type
institutions in such countries; and (2) guaranteeing private U.S.
capital available for investment in Latin American countries" for these
purposes. The purposes are to stimulate private homeownership,
encourage the development of free financial institutions, and assist in
the development of a stable economy.
In considering these amendments, the committee noted that they
add no new authority to the DLF. The committee also took note of
fears that the amendments could lead to vast new programs with no
end in sight. In this connection, it should be pointed out that the
amendment to the statement of purposes of DLF refers to "rapidly
developing" and not to "underdeveloped" countries. The problem
which the committee is attempting to reach does not occur in acute
form in extremely primitive or underdeveloped countries, which are
primarily agricultural in nature. It occurs, rather, in a country
which has reached a certain level of development characterized by
rapid industrialization and urbanization with attendant overcrowding
of cities and shortages of social infrastructure-housing, health
facilities, schools, etc.
It should also be pointed out that the new section on housing
projects in Latin American countries refers to "self-liquidating pilot
housing projects." After experience has been gained in a limited
number of pilot projects, the scope and duration of the program can
then be determined. Two types of projects are contemplated by this
section. One would be a loan of seed capital to help establish savings
and loan institutions. Another would be the use of the DLF's
guarantee authority to guarantee loans made by private U.S. institu-
tions to Latin American government agencies which in turn would
reloan the money for housing mortgages in a program roughly anal-
ogous to the Federal Housing Administration's mortgage-insurance
activities in the United States. In making loans and guarantees for
housing projects, the DLF should take all appropriate steps to see
to it that the money is reloaned at reasonable rates of interest and
that the sales prices of the housing involved are sufficiently low to
be within reach of at least the middle or lower middle class.
It is anticipated that both dollars and foreign currencies could
appropriately be used for the purposes envisaged in these amendments.
Aside from the DLF's own resources, some foreign currencies are
available under title I of Public Law 480.
Finally, section 202 of the bill makes a. technical amendment to sec-
tion 205(a) of the Mutual Security Act of 1954, as amended. That
section of the act, which deals with the management, powers, and au-
thorities of the Development Loan Fund, makes the Under Secretary
of State for Economic Affairs Chairman of the Fund's Board of
Directors.
Last year, however, Congress reorganized the top management of
the. State Department so as to provide that, instead of an Under
;Secretary and an Under. Secretary for Economic Affairs, there would
be an Under Secretary and an additional. office to be entitled as desig-
Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
 Approved For Release 2003/10/16 : CIA-RDP91-00965R00030020001-5
T H E ; MUTU;AIo S CURITY , ACT. OF 19 6 0
nated by the President, either Under Secretary for Political Affairs or
Under Secretary for Economic Affairs. This additional office has
been designated as'Under Secretary for Political Affairs, so that the
office of Under Secretary for Economic Affairs does not now exist.
Further Public Law 86-117, approved July 30, 1959, provided that-
any * * * law vesting authority in the "Under Secretary of
State for Economic Affairs," or any other reference with re-
spect thereto, is hereby amended to vest such authority in the
Secretary of State.
The amendment made by the bill is thus consequent upon prior
action of Congress, and provides that the Secretary of State, rather
than the Under Secretary for Economic Affairs, shall be Chairman of
the DLF's Board of Directors. This is a change of form rather than
substance, because the Secretary has designated the Under Secretary
to serve as Chairman of the DLF Board.
. One further comment should be made about DLF's lending policies.
Although the committee is not recommending any change in the law,
the committee suggests that consideration be given by DLF to mak-
ing greater use of its authority to make loans to meet the local cur-
rency costs of projects the dollar costs of which are financed by the
Export-Impgrt,l3ank, the International Bank for Reconstruction and
Development, or some other: institution. The IBRD will not cover
local costs and the. Export-Import Bank is reluctant-properly so, in
the.committee's opinion-to do so. The considerations which moti-
vate the IBRD and the Export-Import Bank in this connection do
not apply to the DLF, which has always been conceived as a supple-
mentary source of capital. The covering of local currency costs is a
proper exercise of this supplementary role.
Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
 Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
12 THE MUTUAL SECURITY ACT OF 1960
8. TECHNICAL COOPERATION (SEC. 203)
A. BILATERAL PROGRAMS (SEC. 203(A))
This section authorizes appropriation of not to exceed $172 million
for bilateral technical cooperation programs in fiscal 1961. For fiscal
1960, $179.5 million was authorized and $150 million appropriated.
The illustrative program for 1961 shows the following breakdown
Europe:
Spain---------------------
1,000
Far East:
Cambodia----------------
2, 700
Yugoslavia---------------
3,000
China (Taiwan) -----------
2,400
Africa:
Indonesia----------------
7,500
Ethiopia-----------------
5,000
Japan--------------------
1,300
Ghana-------------------
1,200
Korea____________________
7,500
Guinea -------------------
1,000
Laos---------------------
1,800
Liberia---- -------------------
2, 600
Philippines --------------
3,000
Libya____________________
2,500
Thailand-----------------
4,300
Morocco-----------------
1,000
Vietnam ----------------
4,800
Nigeria ------------------
2, 100
Regional and undistributed-
700
Somalia ------------------
1,300
Latin America:
Sudan -------------------
3,300
Argentina----------------
1,130
Tunisia ------------------
2,200
Bolivia------
2, 550
Central and East Africa-_--
855
Brazil--------------------
7,500
Other West Africa ---------
1, 200
British Guiana ------------
430
Regional and undistributed-
45
British Honduras ----------
150
Near East and South Asia:
Chile --------------------
2,895
Afghanistan --------------
4,500
Colombia________________
2, 100
Ceylon--_ -------------------
1,700
Costa Rica---------------
1,290
Greece-------------------
650
Cuba--------------------
350
India ---------------------
8,900
Dominican Republic-------
280
Iran--.-------------------
5,400
Ecuador -------------------
2,300,
Iraq---------------------
1,000
El SaIvador_______________ -1, 2QQ
Israel --------------------
1,100
Guatemala --------------'L, 900
Jordan -------------------
1,750
Haiti--------------------
2,745
Lebanon -----------------
800
Honduras----------------
1,550
Nepal--------------------
1,700
Mexico-------------------
720
Pakistan ------------------
7,000
Nicaragua----------------
800
Turkey -------------------
4,400
Panama------------------
1,610
United Arab Republic- - - - _
1, 800'
Paraguay-----------------
1,800
Central Treaty Organiza-
Peru---------------------
21 MG
tion------------------- 400
Surinam .-----__-_ ___
-415
Regional and undistributed- 3, 600
West Indies and eastern
Caribbean- -------------- 1,335
Regional and undistributed- 1, 250
In addition, interregional expenses are expected to amount to
$23.5 million.
This program will provide for approximately 4,700 U.S. technicians
and 9,900 foreign trainees. Greatest emphasis, as in past years, will
be placed on projects in agriculture and education, but projects will
also be carried out in industry and mining, public administration,
health and sanitation, transportation, labor, community development,
social welfare, housing, and other fields.
The committee is persuaded that over the long term technical
cooperation is one of the most effective foreign programs the United
States has undertaken. Since it was put on a worldwide basis in the
Act for International Development in 1950, the program has shown
a steady, and on the whole sound, growth. The authorization recom-
mended for 1961 will permit a continuation of this growth.
Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
 Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
THE MUTUAL SECURITY ACT OF 1960 13
B. UNITED NATIONS (SEC. 203(b)(1))
This section authorizes contributions of $33 million to the United
Nations expanded program of technical assistance and the related
U.N. special fund in fiscal 1961. For the current year, $30 million
was authorized and appropriated. The contribution is made subject
to the limitation in existing law that it cannot exceed 40 percent of
the total.
The U.N. technical assistance program was instituted in 1950 and
has grown from a level of $20 million, of which the United States
contributed 60 percent, to a current level of $36 million, of which the
United States contributes 40 percent.
The special fund was established in 1958 as a result of U.S. initiative
during the 1957 session of the General Assembly. It is designed to
complement the technical assistance program by providing basic
surveys, research, and training. In calendar 1959, its first full year
of operation, the fund received contributions of $25.8 million. Con-
tributions of $38.8 million are anticipated for 1960. The United
States contributes 40 percent.
It is hoped that the two programs together will reach a level of
$100 million a year in the not-too-distant future. The combined pro-
grams in 1960 are estimated at $75 million, and in 1961 at $82.5
million, of which the United States will contribute $33 million and
other governments $49.5 million.
U.N. technical assistance and related activities have been an effec-
tive complement of U.S. bilateral programs. U.S. participation in
the U.N. programs is a demonstration of support for the United
Nations. Further, in some cases, a multilateral approach offers the
best means of accomplishing specific objectives.
C. ORGANIZATION OF AMERICAN STATES (SEC. 203(b) (2))
This section authorizes contributions of not to exceed $1.5 million
to the technical cooperation program of the Organization of American
States in fiscal .1961. This is the same amount that has been author-
ized annually for several years. The current appropriation is $1.2
million plus reappropriation of $300,000 in unobligated fiscal 1959
funds. The U.S. contribution is made subject to administration
policy that it will not exceed 70 percent of the total.
- Contributions from other governments in the OAS have been
slowly increasing, so that it has been possible to increase the U.S.
contribution, within the 70 percent ceiling, from $1.1 million in
calendar 1955 to $1.3 million in calendar 1959. The committee deems
it useful to authorize $1.5 million as an incentive to other countries
to contribute more.
The OAS technical assistance program consists entirely of a number
of regional training projects in fields related to economic development
and social welfare. The largest of these projects (there were a total
of 14 in 1959) are in technical education for the improvement of agri-
culture and rural life, the Pan American Aftosa Center, the Inter-
American Rural Normal School for training rural schoolteachers,
the Inter-American Training Center for Economic and Financial
Statistics, and training in the planning and administration of social
welfare programs.
S. Rept. 1286,86-2-3
Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
 Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
14 THE MUTUAL SECURITY ACT OF. 1960
D. STUDY OF. POINT 4 YOUTH CORPS (SEC. 203(C))
This subsection adds a new section 307(b) to the act, directing the
President to arrangefor a nongovernmental research_group, university,
or foundation to study "the advisability and practicability of a. pro=
gram, to be known as the point 4 youth corps, under which young U.S.
citizens would be trained and serve abroad in programs of technical
cooperation." The bill authorizes use of not more than $10,000 in
technical cooperation funds to help pay for the study.
This section is the result of the committee's consideration of S. 2908
by the late Senator Neuberger which likewise provided for such a study
and specified its scope in some detail. The committee felt it advisable
to leave the scope of the study completely open in the law. The
committee expects, however, that the study would include these
points, among others: the types of projects in which members of such
a corps might be used and how such projects should be carried out;
the manner in which interested private American organizations
might cooperate in these projects; the relationship, if any, which
should exist between service in the point 4 youth corps and in the
Armed Forces; the optimum size of the youth corps and the manner
of its administration; its personnel regulations, selection methods,
and criteria, and methods of orientation and training; and how it could
most usefully supplement existing programs of technical cooperation.
The committee emphasizes that it is only a study which is involved
here. The conclusions of the study can be considered on their merits
when the study is completed.
8. SPECIAL ASSISTANCE (SEC. 204(a))
This section authorizes appropriation of not to exceed $260 million
for special assistance in fiscal 1961. The administration had requested
$268.5 million. The current year authorization is $247.5 million, of
which $245 million was appropriated.
Special assistance is proposed for 22 countries and territories (includ-
ing West Berlin) and for a variety of regional, worldwide, and multi-
lateral programs. These include a special program for Africa, a con-
tribution to the U.N. Emergency Force in the Middle East, aid to
American schools abroad, malaria eradication, the community water
supply program, and the investment incentive program. Countries
and territories for which special assistance is proposed are Berlin,
Yugoslavia, Ethiopia, Somalia, Sudan, Libya, Morocco, Tunisia,
Afghanistan, Israel, Jordan, Nepal, United Arab Republic, Yemen,
Burma, Indonesia, Bolivia, Brazil, Guatemala, Haiti, Paraguay, and
the West Indies and eastern Caribbean.
Out of this long list, however, six countries-Morocco, Jordan,
Tunisia, Libya, Bolivia, and Afghanistan-account for slightly more
than 80 percent of the total which is programed on a country basis.
Special assistance is economic aid designed to accomplish a variety
of objectives. It includes such diverse activities as equipping and
training an engineer construction unit for road and bridge construction
in Paraguay, supplying substantial budgetary support for the Govern-
ment of Jordan, and contributing to the continued availability of an
American airbase in Libya. It may take the form of cash grants, of
commodity imports, or of assistance to specific economic projects.
Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
 Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
THE MUTUAL SECURITY ACT O 1960
In every case, however, it is directly related to accomplishment of a
specific objective of U.S. foreign policy and provides aid which could
not normally be furnished under other categories of the mutual
security program.
The major new element in special assistance as proposed for 1961
is a special program for Africa which will be used in the newly inde-
pendent states and territories rapidly approaching independence south
of the Sahara. This program can be particularly useful in attacking
problems of education and training in which some progress must be
made as a prerequisite to significant economic development. The
committee welcomes this evidence of growing attention to the needs of
Africa and expresses the hope that the program will be administered
in such a way as to encourage greater regional integration.
Indeed, if special assistance had not included programs such as
this one and such as malaria eradication and other health programs,
aid to American schools, and the community water supply program,
the committee would have been disposed to make a deeper cut in the
authorization. The committee finds some of the individual country
programs excessive. It expects that reductions will be made here and
not at the expense of sub-Saharan Africa and the nonregional health
and related welfare programs.
10. OTHER PROGRAMS
A. UNITED NATIONS EMERGENCY FORCE (SEC. 204(b))
This section extends through fiscal 1961 the authority already con-
tained in section 401 of the act, applicable to fiscal 1960, for the Presi-
dent to use special assistance funds for voluntary contributions to the
United Nations Emergency Force in the Middle East.
UNEF played an important role in settling the 1956 Middle East
crisis and has subsequently exerted a significant influence for peace in
that area. Its 5,000 officers and men, from seven small and middle
powers, are still. stationed in the Gaza strip and at the entrance to the
Gulf of Aqaba.
The Force's budget for calendar year 1960 is $20 million, which is
met in part through assessments of U.N. members according to the
regular assessment scale for the U.N. budget. Inasmuch as the total
U.N. budget, other than UNEF, is only $60 million, this results in a
substantial addition to the assessments and has been found particu-
larly burdensome by some of the smaller, poorer members. Because
of their very great interest in maintaining peace in the area, the
United States and the United Kingdom have made voluntary contri-
butions to UNEF over and above their assessments, and these con-
tributions are used to reduce the assessments of U.N. members least
able topa
In calendy.ar year 1957, the United States contributed $12.9 million.
over and above its assessment toward a UNEF budget of $30 million.
In 1958, it contributed nothing and in 1959, $3.5 million out of fiscal
1960 funds. It is proposed to contribute $3.2 million in calendar
1960 out of fiscal 1961 funds. This contribution, plus the U.S. assess-
ment of $6.5 million, will mean a U.S. payment of 48.5 percent, of
UNEF's budget.
Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
 Approy,9d For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
THE MUTUAL SECURITY ACT OF 1960
B. SURPLUS AGRICULTURAL COMMODITIES (SEC. 204(c))
This section extends to fiscal 1961 the requirement which has been
in section 402 of the act for several years that at least $175 million
of mutual security funds (other than the Development Loan Fund)
be used to finance the export of surplus agricultural commodities.
Under existing law, this requirement may be met either through
grants or through sale for foreign currencies.
It must be candidly pointed out that this provision may prove
ineffective and that the President's special authority may be used to
waive the requirement to some extent. Disposals pursuant to the
requirement of section 402 have steadily declined from $445 million
in fiscal 1955 to $188 million in 1959. It is doubtful that they will
greatly exceed $140 million in 1960, and may be even less in 1961.
This situation arises from a number of factors. The total funds
available out of which to meet the requirement have declined and
the relative importance of nonagricultural commodities has increased.
The Agricultural Trade Development and Assistance Act (Public
Law 480) has provided an alternative source of agricultural imports
for many countries. The growth of currency convertibility has de-
creased the inter tive of West European countries to engage in tri-
angular transact'ons under Ni hich the proceeds from surplus conn.modity
sales in one country are used to finance purchases in that country for
the benefit of another country. Finally, the application of the 50-50
shipping clause to sales under section 402 means that the cost of the
commodities to the recipient country is increased and where currency
is convertible, this also reduces the incentive to buy.
It is currently estimated that mutual security funds to the extent
of $104.5 million can be used to meet the section 402 requirement in
fiscal 1961. The commodities involved are cotton ($52.7 ir..illion),
fats and oils ($20.4 million), dairy products ($9.5 million), bread
grains ($9 million), eggs and soybean meal ($7.8 million), and coarse
grains ($5.1 million).
C. BERLIN (SEC. 204(d))
This section authorizes use of not more than $6,750,000 of special
assistance funds in fiscal 1961 "in order to meet the responsibilities
or objectives of the United States in Germany, including West Berlin."
For the current fiscal year, $7,500,00( of special assistance .funds
were authorized for this purpose and $6,750,000 actually programmed.
A portion of the funds authorized for use in 1961 will finance the
sales of surplus agricultural commodities to the Federal Republic of
Germany with the resultant marks contributed toward construction
of the Berlin Medical Center. This is a joint project of the United
States, the Federal Republic, and the city of West Berlin.
Continued evidence of American interest in West Berlin is especially
important at this time in view of Soviet threats against the city.
D. INDUS BASIN DEVELOPMENT (SEC. 204(e))
This section adds a new section 404 to the act, the main purpose fo
which is to authorize use of mutual security funds for development of
the Indus basin under the supervision of the International Bank for
Reconstruction and Development without regard to the requirements
of the Mutual Security Act and the Mutual Security Appropriation
Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
 Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
THE MUTUAL SECURITY ACT OF 1960 17
Act regarding cost estimates and feasibility studies. In effect, the
section would substitute the IBRD's requirements concerning com-
pletion of. plans. and cost estimates. and determination of feasibility
for those of . U.S. laws. The section would also enable the President
to waive the 50-50 shipping provision. An introductory statement.
"welcomes the progress made" toward a cooperative program for
development of the Indus basin and "affirms the willingness of the
United States * * * to participate in this significant undertaking."
As a result of patient negotiations carried on since 1952 under the
auspices of the IBRD, the Indus waters dispute, which has long em-
bittered relations between India and Pakistan and has at times brought
the two countries to the verge of open warfare, appears well on the
way to settlement. The dispute arose because partition of the sub-
continent in 1947 left the upstream portions of the Indus system,
embracing six rivers, in Indian hands and the downstream portions in
Pakistani hands. The rivers involved have historically been used
extensively for irrigation and are vital to the agricultural life of both
countries.
An ambitious plan advanced by the IBRD has now been agreed to
in principle by India and Pakistan and awaits only conclusion of a
water treaty between the two countries for the beginning of the long
and expensive task of implementation. Under the IBRD plan, the
waters of the three eastern rivers in the system will go to India and the
areas in Pakistan formerly irrigated from these rivers will get water
brought by canals from the three western rivers. The plan also pro-
vides for hydroelectric installations, storage areas, and drainage im-
provements.
The plan is estimated to cost slightly more than a billion dollars,
take 1.0 years to complete, and result in the largest irrigation system
in the world. It will make a substantial contribution to the economic
development of both India and Pakistan. Equally important, it will
remove one of the sorest points in relations between those countries
and contribute significantly to political stability in South Asia.
The IBRD plan contemplates joint financing by the two countries
directly involved and the IBRD itself plus the United States, United
Kingdom, Germany, Canada, Australia, and New Zealand. It is
proposed that the U.S. contribution take the form of both dollars
and rupees in both loans and grants. For the first year, assuming that
the Indo-Pakistani treaty is concluded in 1969 and construction begins
in fiscal 1961, approximately $13.6 million in foreign exchange and
rupees equivalent to $22 million will be required. In all, over the
10-year period, the United States will provide $177 million in grants,
$103 million in loans, and rupee loans and grants equivalent to $235
million.
It is proposed that the whole enterprise be carried out by an Indus
basin development fund under the auspices of the IBRD. Under
the circumstances of this large multilateral undertaking, it seems en-
tirely appropriate for the U.S. funds involved to be spent according to
IBRD, rather than American, standards. The IBRD has established
an excellent record for making sound loans and insisting on high
performance, and there need be no fear that money under its care will
be loosely or wastefully used.
e- Under the multilateral this
the U.S. mon
contributed to the Indus Fund will not besubject t to a 0-50 U.S
Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
 Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
18 THE MT TTJAL SECURITY ACT OF 1960
shipping restriction. This is entirely appropriate in view of the mul-
tilateral character of the project and the fact that the other contribut-
ing nations are also foregoing any preferential strings on their con-
tributions. At the same time the committee expects that the 50-50
shipping provision will be waived only if or to the extent that compen-
sating increases cannot practicably be made over a period of time in
other mutual security shipments carried on American vessels to this
or other regions. The bill also provides (sec. 401(d) below) that
notice must be given to legislative committees when the 50-50 pro-
vision is waived.
E. UNITED NATIONS HIGH COMMISSIONER FOR REFUGEES (SEC. 204(f)(1))
This subsection amends section 405 of the act so as to authorize
not to exceed $1.1 million for fiscal year 1961 as the U.S. contribution
to the United Nations High Commissioner's program for refugees who
are objects of international responsibility under the High Commis-
sioner's mandate.
This is the same amount as was authorized and appropriated last
year and is $400,000 less than the administration's request of $1.5
million for 1961. The committee looks with disfavor upon proposals
to increase presumably temporary programs of this nature.
It is expected that the refugee camps in Europe should be virtually
closed by the end of this year and that the High Commissioner's
program for 1961 will concentrate on rehabilitation and resettlement
of out-of-camp refugees and on providing them with international
legal and political protection. The committee noted, however, that
a substantial proportion of the proposed U.S. contribution was in-
tended for the benefit of refugees from Algeria in Morocco and Tunisia,
and of European and Jewish refugees from the Near East, mainly in
France and Italy. The administration's illustrative program con-.
templated $800,000 for Soviet orbit refugees, $600,000 for Algerian
refugees, and $100,000 for refugees of European and Jewish origin from,
the Near East. The Algerian refugees are primarily the responsibility
of France. The French Government has been willing to meet this
responsibility, but has been deterred from doing so by a dispute as to
whether the refugees are French citizens. This question seems
irrelevant to a French program of helping the refugees.
Under administrative policy, the U.S. contribution to the U.N.
High Commissioner for Refugees will not exceed one-third of the total
cash contributions. In addition, the United States. is supplying surplus,
agricultural commodities under the authority of titles II and III of
the Agricultural Trade Development and Assistance Act (Public Law
480) at the rate of about $10 million a year.
The authorization recommended by the committee will allow some
assistance to all categories of refugees in the administration's program,
but the total U.S. contribution will not exceed the current year's level.
F. ESCAPEES (SEC. 204(f)(2))
This subsection amends section 405(d)of the. act by authorizing for
fiscal year 1961 an appropriation of not to exceed $3.5 million for the
continuation of activities benefitting selected escapees from countries
of the Soviet orbit. For the current-year, $5.2 million was authorized
and $4,632,000 appropriated.
Approved For Release 2003/10/16 CIA-RDP91-00965R000300200001-5
 Approved For Rej 9prL1 R Pb J 7.$905R0003002 001-5
Working largely through contracts with voluntary relief agencies;
the U.S. escapee program provides such services as counseling on
resettlement and job opportunities; vocational and language training;
health facilities; and financial help in the costs of resettling. Since
this program was established in 1952 as a wholly U.S.-sponsored
effort to help escapees from Communist areas, it has actually extended
assistance in varying degrees to more than 460,000 persons in Europe,
the Near East, and the Far East.
Based on the present rate of escape, it is anticipated that during
calendar 1961 about 7,700 new escapees (more than half of them from
Yugoslavia) will be registered. This number will be in addition to
the 6,800 remaining from previous years who are of priority interest
to the United States. A caseload reduction of 9,300 is estimated
during 1961, so that only 5,200 will be left at the end of the year.
Of the funds authorized in this bill, it is expected that $2.3 million
will be used in Europe and the Near East, $1 million in the Far East,
and $200,000 in Washington. In the Far East, top priority is given to
the rehabilitation of leadership elements, professional and intellectual
people. In view of the mass problem in Hong Kong, emigration out
of that area on any significant scale is thought not to be feasible.
However, continuing efforts will be made to integrate selected refugees
in Hong Kong where added emphasis is being given in the coming
year's program to. medical facilities and attention to youth.
This unilateral program undertaken by the United States to supple-
ment the other refugee programs is a definite boon to the prestige of
this country and an effective counter to Communist propaganda
claims that the free world's interest in capative peoples is waning.
G. UNITED NATIONS CHILDREN'S FUND (SEC. 204(g))
This subsection amends section 406 of the act so as to authorize
not more than $ 12 million to be appropriated for the United Nations
Children's Fund for fiscal 1961. This is the same amount as that
authorized and appropriated in last year's mutual security legislation.
However, the U.S. contribution for 1961 represents 46 percent of the
worldwide UNICEF program as compared to 48 percent in 1960.
Originally established in 1946 to care for children in war-devastated
areas, the emphasis of UNICEF's program since 1950 has been on
elevating health, nutritional and social welfare standards in under-
developed areas-where the populations are commonly disease-
ridden and undernourished-through maternal and child care activi-
ties. The means provided by UNICEF include medical equipment;
insecticides, vaccines and antibiotics; powdered milk; and dairy and
food processing equipment.
The Children's Fund is currently participating in 371 programs in
104 countries and territories.` Each' beneficiary country has to pro-
vide for its own program a contribution equivalent to the UNICEF
assistance which it is receiving.' Some governments actually put up,
usually in local supplies, three to. four times what they get from the
Children's Fund.
Since the inception of the program, it is estimated that more than
55 million children and expectant and nursing mothers have come
under the care of UNICEF. The disease control and nutrition prof-
ects have contributed materially to raising the productive potential
Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
 Approved For Release ?A93/At0%1 UkI F~f~? OpRMR000300200001-5
20 of the assisted populations. This, in turn, provides the human
resource base without which technical assistance and economic de-
velopment programs cannot be successful.
H. PALESTINE REFUGEES (SEC. 204(b))
This subsection makes several important changes in section 407
of the act, which relates to Palestine refugees in the Near East and to
U.S. contributions to the United Nations Relief and Works Agency.
The bill authorizes an appropriation for 1961 of $22 million and
repeals the proviso in existing law earmaking 10 percent of the funds
for repatriation or resettlement. The funds which have accumulated
unspent under this proviso, amounting to $6,250,000 over the last
2 years, will revert to the Treasury, as will an estimated $250,000 in
other unobligated funds in the Palestine refugee account.
Last year, there was authorized and appropriated $25 million for
contributions to UNRWA, but with the proviso reserving 10 percent
for repatriation or resettlement. The administration this year re-
quested an authorization of $18.5 million together with authority to
use the funds accumulated under the proviso for relief as well as for.
resettlement or repatriation. This, plus the carryover of other un-
obligated funds which the committee disapproved, would have made
a total of $25 million available in 1961. The net effect of the com-
mittee's action, therefore, is to reduce the administration's request
by $3 million.
The bill also attaches an important new condition to the use of
U.S. contributions. After January 1, 1961, these cannot be used for
programs of relief which heretofore have been administered on the
basis of ration cards except for refugees whose need and eligibility for
relief have been certified after July 1, 1960. The purpose of this
provision is to insure that every refugee who is entitled to a ration
card has one and that persons not entitled to them do not have them.
The committee has had many disturbing reports of black market
operations in ration cards among Palestine refugees as well as of the
denial of cards to persons who should have them. It is disinclined
to tolerate this situation any longer, and it urges the State Depart-
ment to press UNRWA to take vigorous corrective action.
Finally, the bill directs that the President include in his recom-
mendations to Congress for fiscal 1962 mutual security programs-
specific recommendations with respect to a program for the
progressive repatriation and resettlement of refugees and for
reducing U.S. contributions-
to UNRWA.
These actions taken together-a reduction in funds, a tightening
of conditions, and a directive to produce a specific program reflect
the committee's growing impatience with the temporizing attitude
of all concerned with this tragic and intolerable situation-primarily
Israel and the Arab States, but also the State Department and the
United Nations. The parties concerned have been on clear notice
at least since 1952 that the committee would not continue indefinitely
to approve U.S. relief contributions. In that year, the committee
stated:
Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
 Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
THE MUTUAL -SECURITY -ACT OF 1960 21
The United States cannot be expected to continue indefi-
nitely relief programs of this type without an end in sight
(S. Rept. 1490, 82d Cong., pp. 45-46).
Similar statements have been made with dreary and virtually
annual repetition in the committee's subsequent reports. The com-
mittee has likewise repeatedly expressed its willingness to give the
most sympathetic consideration to proposals for capital assistance to
carry out resettlement or repatriation` projects. It even, for 2 years,
earmarked funds for this purpose, all to no avail.
Since 1949, the United States has contributed a total of approxi-
mately $200 million to UNRWA. The only other substantial con-
tributor has been the United Kingdom. If these same funds could
have been spent on proluctive investments in the area, the refugees
would long since have all been self-supporting, and a source of great
political friction would have been removed. Instead, the funds have
been doled out for relief, and the problem is worse than it was.
All of this is primarily and directly attributable to the intransigence
of Israel. and the Arab States. The committee is tired of hearing
arguments that one side is more to blame than the other. It is tired
of the United States assuming a major share of the responsibility for
ameliorating the consequences of the irresponsibility of others. What
is needed is less false political pride and more genuine political states-
manship, less sterile quarreling over the past and more constructive
attitudes for the future.
I. OCEAN FREIGHT (SEC. 204(i))
Amending section 409(c) of the act, this subsection authorizes for
fiscal 1961 an appropriation not to exceed $2 million to defray the
cost of ocean freight for relief supplies sent to needy persons abroad
under the auspices of approved U.S. voluntary nonprofit agencies.
The bill also amends the substantive provisions of section 409 so
as to authorize payment of overland freight charges to designated
points of entry in landlocked nations-as for example, Bolivia and
Laos. This remedies an oversight in the existing law. It seems
unwarranted to discriminate in payment of international freight
charges on relief goods as between nations which have seaports and
those which do not. A corresponding amendment is made by section
601(c) of the bill (see below) to section 203 of Public Law 480.
The goods donated by the American people are primarily f-od,
clothing, medical and hospital supplies, school supplies, handtools for
trade and agriculture and other self-help items. As few cash con-
tributions are received, these gifts could not be delivered overseas
without the cooperation of the Government in financing the freight
charges.
The goods are accorded duty-free entry into the country of destina-
tion, and the host government will continue to bear any further costs
for transportation within the country to the ultimate point of dis-
tribution. American field representatives of the various voluntary
agencies supervise the local distribution of the goods and insure that
the local people know the origin of the gifts.
Supplies to be moved in fiscal 1961 are estimated at a total value
of $47 million and will cost the Government an anticipated $2 million
S. Rept1286, 86-2-4
Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
 Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
22 THE MUTUAL SECURITY ACT OF11880
in ocean freight. Nearly 30 voluntary organizations will be participat-
ing in the program. These groups also channel through their overseas
distribution centers surplus agricultural commodities for which ocean
freight charges are funded under authority of title II of Public Law 480.
As tangible expressions of the charitable spirit of the American
public, these people-to-people gifts continue to show needy persons in
other lands that individual Americans, through private and volun-
tary means, want to help them.
J. ADMINISTRATIVE EXPENSES (SEC. 204(J))
Paragraph 1 of this subsection amends section 411(b) of the act so
as to authorize appropriation of not to exceed $40 million to cover
costs of administering nonmilitary assistance (except the Develop-
ment Loan Fund) and certain functions under the Agricultural Trade
Development and. Assistance Act (Public Law 480).
Paragraph 2 makes a technical amendment in section 411(c) of the
act so as to authorize appropriations "for expenses of" the State
Department under the Mutua Security and Battle Acts, instead of
appropriations directly to the Department. This change conforms
to appropriation language under which all mutual security appropria-
tions are made to the President. In existing law, the appropriation
authorized by section 411(c) is a continuing one of such amounts
as may be necessary."
The funds authorized in section 411(b) are, to be used by the Inter-
national Cooperation Administration in Washington and 65 overseas
locations in administering the economic, technical, and. other assist-
ance programs for which that agency is responsible. The proposed
authorization is an increase of $500,000 over the amount authorized
and $2 million over the amount appropriated last year. The increase
is accounted for primarily by the opening of new overseas posts,
especially in Africa, periodic pay increases, and the costs of the
Federal employees health insurance program. These new costs will
be partially offset by a reduction in the costs of missions in Europe.
The committee also expects that in the coming year ICA will strive
for continued improvement in the caliber of its employees. More
intensive language training and other employee development activi-
ties, as well as added flexibility in competing for competent personnel
on the U.S. labor market, are among the program goals.
K. ATOMS FOR PEACE (SEC. 204(k))
Section 419(a) of the act is amended by this subsection so as to
authorize appropriation of not to exceed $3.4 million for the fiscal
1961 atoms-for-peace program. For the current year, $6.5 million
was authorized and $1.5 million appropriated.
Nineteen research reactors, at a cost oif $350,000 each, have already
been furnished (or are in the process of being furnished) to various
countries under this program. During fiscal 1961 only one additional
request for a reactor grant is anticipated. Equipment provided
under the program will be primarily laboratory, teaching and field
supplies to improve training in basic and applied nuclear science:
The scholarship program is administered by the National Academy
of Sciences under contract to ICA, and for the coming year 100
Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
 Approved For Ref 03/10/16: CIA-RDP91-00965R000300200001-5
UAL _SECUAITY, ACT OF 10,,&0 23
.scholarship grants are contemplated to train foreign nationals in
atomic science in the United States.
. The breakdown of the program budget for 1961 is as follows:
foreign research reactor, $350,000; equipment grants, $1,250,000;
symposia and surveys (to help countries plan their programs),
$350,000; contributions to the budget of the International Atomic
Energy Agency, $750,000; scholarship programs, $700,000. There
are also related activities to the extent of about $566,000 in ICA's
country technical assistance program which are not included under
the atoms-for-peace provision.
By instructing friendly countries, especially those who cannot by
themselves afford such programs, in the peaceful uses of atomic
energy consistent with their respective resources; the United States
is exporting its scientific and engineering know-how for the long-range
benefit of recipient countries. This program has added weight in an
era when Soviet technological achievements challenge American
scientific prestige.
11. CONTINGENCY FUND (CII. III)
Section 301 of the bill authorizes appropriation of not to exceed
$175 million for fiscal 1961 under section 451(b) of the act, which
Provides the President with special authority and a contingency fund.
For fiscal 1960, $155 million was authorized: and appropriated.
This fund has traditionally been provided in the mutual security
program in order to give administrative flexibility in meeting require-
ments which at the time of congressional action are either entirely
unforeseen or foreseen so tentatively as not to justify firm program-
in gg: It is thus inherently impossible to predict in advance how much
will be needed in the fund.
On the basis of experience, the amount recommended seems to be
reasonable. In fiscal 1959, out of a fund of $155 million, all but
$183,000 was used. Two-thirds of the way through fiscal 1960,
approximately three-quarters of afund of $155 million had been used.
Among the major uses to which the fund has been put in recent
years have been additional assistance to Taiwan to meet the crisis in
the Taiwan Straits, additional assistance to several countries in the
Middle East to meet the crisis in that area stemming from the Iraqi
revolution and the Lebanese disturbances, and relief work in the
wake of it variety of natural disasters around the globe. The fund
also makes it possible for this Government to act quickly to take
advantage of developments where it is in the interest of the United
States to help a country seeking to reduce its dependence on Sino-
Soviet aid. The continent of Africa is in such fa, state of political
flux that no one can clearly predict the full requirements of the
mutual security program there.
None" of the contingency fund can be used to supplement the
Development Loan Fund. With respect to $100 million of the con-
tingency fund, the President may waive the requirements of the
Mutual Security Act and related acts upon a specific finding by the
President that such a waiver "is important to the security of the
United States," but not more than $30 million may be used in this
manner in any one country in, any. fiscal year.
Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
 Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
24 THE MUTUAL SECURITY ACT OF 1960
Because of the inherent unpredictability of demands upon the
contingency fund, it seems to the committee prudent to err, if at all,
on the side of providing too much rather than of providing too little.
If the contingencies do not arise, the fund will not be used. If they
do arise, the President should be in a position to meet them.
12. GENERAL AND ADMINISTRATIVE PROVISIONS
A. CULTURAL MONUMENTS OF THE UPPER NILE (SEC. 401(a))
This adds a new subsection 502(c) to the act authorizing, under
certain conditions, U.S. participation in an internationally financed
program to preserve the great cultural monuments of the upper Nile.
These are located in an area which will be flooded by the Aswan Dam,
and unless immediate steps are taken to remove or protect them,
they will be lost forever within a period of 5 years.
Under the terms of the amendment, U.S. participation in this work
must be: (1) as part of an internationally financed program; (2)
predicated upon a finding by the President that it would promote the
foreign policy of the United States; (3) subject to the approval of
Congress; (4) limited to one-third of the total contributions to the
program; and (5) limited to U.S.-owned currencies of the country
where the work is being carried out which have accrued under the
Mutual Security Act or the Agricultural Trade Development and
Assistance Act (Public Law 480). This means that the U.S. con-
tribution will be in form of either Sudanese or United Arab Republic
currency.
The committee received testimony (hearings, pp. 575-586) indicat-
ing considerable international interest in. mounting an organized effort
to preserve these great monuments. The planning is as yet not suffi-
ciently advanced to pass on its soundness or on the desirability of
U.S. Government participation. The amendment is simply a con-
gressional expression of sympathy with the objective. If a firm plan
is subsequently developed and the President recommends U.S. par-
ticipation, the program in question will have to be approved by the
Congress.
B. REPEAL OF AUTHORITY REGARDING MACHINE TOOLS (SEC. 401(b))
This section repeals section 504(d) of the act, which authorized use
of up to $2.5 million of the contingency fund in 1960 to make avail-
able machine tools and other industrial equipment to foreign small
business concerns in underdeveloped countries.
The section was rendered ineffective by a provision in the fiscal
1960 appropriation act, but it would expire in any event at the end
of the current fiscal year. Further, general authority exists for this
kind of program in other sections of the act, notably those dealing
with defense support and special assistance. This authority should
be used to encourage and facilitate the growth of small business
abroad.
C. USE OF BARTER PROCEEDS (SEC. 401(C))
This section amends section 505 (a) of the act, which relates to loan
assistance and sales, so as to clear up an ambiguity concerning the
use of commodities, equipment, and materials received as repayment
Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
 Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
for assistance. The amendment provides that such materials may
be reused for assistance authorized by the act, other than for the
Development Loan Fund, in accordance with the applicable provisions
of the act.
The law now authorizes assistance on a grant, sale, loan, or barter
basis. Foreign currencies received in cash payments for assistance
may; be used for the same purposes for which the dollars providing
the assistance which generated the currencies were appropriated.
Foreign currencies received in repayment for assistance furnished on
a loan basis are used for the exchange of persons program and are
sold by the Treasury to Government agencies for payment of their
expenses abroad, with any currencies excess to U.S. Government
needs being credited to the Development Loan Fund in amounts as
may be specified in appropriation acts.
The ambiguity arises in connection with commodities, equipment,
or materials received by the United States in return for assistance
furnished on a barter basis. As the existing law has been interpreted
by the agencies administering it, these materials cannot be further
used. The amendment will make possible an arrangement whereby,
for example, the United States may furnish one type of military
equipment to a European. country in return for a second type of
military equipment and this second type could then be furnished a
second country. As the law is now interpreted, this transaction can
be accomplished only if the United States sells its military equip-
ment for a foreign currency and uses the currency to buy, the second
type of equipment.
The proposed -amendment will simplify these procedures consid-
erably. The committee, understands it is intended for use mainly
in Europe.
D. NOTICE TO LEGISLATIVE COMMITTEES (SEC. 401(d))
This subsection inserts new wording in section 513 of the act so
as to require that notification be given to the Foreign Relations
Committee, and the Speaker of the House when any determination
is made under authority of the new section 404 (Indus basin develop-
ment) to waive the 50-50 shipping requirement in section 901(b)
of the Merchant Marine Act of 1936, as amended.
This is the requirement that at least 50 percent of the gross tonnage
of ocean shipments moving under the aegis of the United States be
carried on U.S.-flag commercial vessels.
By stating that this provision may be disregarded when the Presi-
dent determines that the 50-50 shipping requirement cannot be met,
the new section 404 leaves more latitude for executive action. There-
fore it is thought to be additionally necessary for the executive
branch to inform the Congress when a departure from the shipping
procedures contained in the Merchant Marine Act is made under
authority of the new section on the Indus basin development.
E. PAY OF EMPLOYEES IN LOCAL CURRENCY (SEC. 401(e))
This section adds a new section 523(d) to the act authorizing am-
bassadors to regulate the extent to which officers and employees of
Government agencies and contractors abroad may receive their pay
Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
 Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
and allowances abroad in dollars or ' in local currency. The regula-
tions may be issued by the Chief of the U.S. diplomatic mission in a
country whenever he determines that "the achievement of United
States foreign policy objectives there requires it."
The amendment affects only pay and allowances received and to be
used abroad. It does not affect any portion of an individual's pay
which the individual may choose to have deposited to his credit or
paid to a dependent in the United States. It does not, therefore,
:affect the right of an employee to receive dollars; it affects only his
privilege of receiving them abroad and then only in limited circum-
stances.
This amendment was occasioned by the scandalous black market
currency activities of large numbers of American officers (including
colonels) and servicemen in Turkey. Before these activities were
broken up by the Turkish authorities (not, significantly, by the U.S.
authorities), thousands of dollars had been made illicitly on the cur-
rency black market. The repercussions have been adverse to the
attainment of U.S. policy objectives in Turkey and have blackened
the reputation of the U.S. Armed Forces everywhere.
The committee is aware of the almost irresistible temptation to
engage in black-market currency operations whenever there is a sub-
stantial difference between the official or legal rate and the free or
black-market rate, as existed. in Turkey in 1957-59. The committee
would have thought, however, that the Armed Forces would have
had enough experience in these situations to have been able to deal
with them more effectively.
The committee is greatly disappointed by the performance of the
Department of Defense in the Turkish case, and not least by the fact
that of the 71 uniformed personnel who were questioned by military
investigators, 21 pleaded the military equivalent of the fifth amend-
ment and 37 admitted having acquired lira illegally. These 71 were
all stationed in Izmir, and there were indications that the situation
might have been equally bad throughout Turkey. American military
authorities failed to take proper steps to prevent the black-market
currency ring from developing in Turkey. They then failed to take
sufficiently vigorous action against many of the participants in the
ring. Finally and worst of all, they tried to hush up the whole affair
and were uncooperative with the committee's efforts to get to the
bottom of the matter.
When the Turkish authorities finally broke up the ring and put
some American servicemen in jail, there were press reports, apparently
inspired in part by unauthorized American military sources, that the
servicemen in question were being subjected to medieval tortures and
otherwise having their rights trampled upon. The committee's im-
pression is that these reports were exaggerated. The press reports also
left the impression that American authorities were doing nothing to
protect the rights of the servicemen who were arrested. This impres-
sion was erroneous so far as the committee has been able to ascertain.
It adds fuel, however, to the complaints of many people in the United
States-some well-meaning but poorly informed-that the NATO
Status of Forces Treaty is an iniquitous instrument to take away the
rights of American servicemen abroad.
What bothers the committee most about this whole affair is the wide-
spread attitude it discloses that Americans generally, and American
Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
 Approved For Rel e APJWAV/Ipciigl#y-RWTPaipqll~,RO0030020~r1 -5
military personnel in particular, are, or' should be, above the law when
they are away from home. The committee has commented heretofore
on the importance of careful selection and indoctrination of military
personnel selected for overseas service. These comments have appar-
ently fallen on sterile ground in the Pentagon. But the committee
is deadly serious; it is not disposed to regard blackmarketing as a
game in which one gets rich if he wins and gets transferred if he is
caught.
Inasmuch as the military appears incapable of maintaining proper
discipline among its personnel, the amendment contained in the new
section 523(d) will authorize the American Ambassador to take steps
to reduce the supply of dollars available and thereby reduce the
possibility, if not the temptation, of exchanging dollars on the black
market. It is not expected that there will be frequent occasions for
the use of this authority. General free world economic recovery is
gradually reducing the, number of countries in which a currency black
market exists. Moreover, the exercise of this authority, although
vested in the: Ambassador, would not be carried out by him on his
own responsibility but on instructions from the Department of State
after appropriate interagency consultation within the Government.
The committee is strongly of the opinion, however, that authority
such as is here proposed is necessary if a handful of really ugly
Americans is not to jeopardize the painstaking accomplishments of
thousands of others.
F. EMPLOYMENT OF PERSONNEL (SEC. 401(f))
Paragraph 1 of this subsection amends section 527(b) of the act
so as to increase by six the number of persons who may be compensated
at rates from $12,700 to $17;500 a year and without regard to the
provisions of the Classification Act. This will have the effect of
creating six additional supergrade positions within the various adminis-
trative agencies connected with the Mutual. Security Program. The
persons filling these positions will all be employed in the United
States. Under existing law, there is authority to compensate 70
persons without regard to the Classification Act, and of these 45 may
be compensated at supergrade rates. The bill increases these figures
to 76 and 51, respectively.
This increase reflects the need for more competent top-level per-
sonnel to coordinate and administer the increasingly complex aid pro-
gram. Such top-flight people can be recruited and retained only
through the prospect of higher salaries. Qualified Foreign Service
officers will be used when available, but the new authority is considered
essential in order to draw in and keep outside people.
Last year Congress approved an increase of 10 supergrade positions.
At that time certain needs were not foreseen and the 10 additional
positions had to be apportioned ' so as to cover more offices than
9riginally intended, specifically assignments to the new office of the
Inspector General and Comptroller. Thus, the needs of ICA and
Defense were unmet. In addition, needs in the Development Loan
Fund are included in this year's request. The various agencies con-
nected with the aid program submitted a combined estimate of 16
necessary new positions, and the administration requested 8. The
committee recommends 6. The Under Secretary of State will decide
which of the 16 recommended positions are of highest priority.
Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
 Appxoved For Reles,j1rlAR;4P1 5R000300200001-5
G Paragraph 2 of this subsection amends section 527(c) of the act,
dealing with personnel employed outside the United States, in two
respects: First, authority to employ or assign personnel outside
the United States is vested in the President instead of in the Director
of ICA, as formerly. This change will make this section conform with
the rest of the act, which vests authority in the President. Second,
Foreign Service Reserve officers are made eligible for in-class promotion
in accordance with regulations prescribed by the President. By this
change, reserve officers may be promoted on a more equitable basis
depending upon the date of their entrance into, or reassignment in,
the Reserve Corps, instead of upon the fixed date stipulated in the
Foreign Service Act. Under the Foreign Service Act, promotion
would occur on July 1 for an officer who had been in a given class for
at least 9 months. This meant that an officer lacking 1 day or more of
the requisite 9 months would have to wait until the following July 1
for promotion. Under authority of the new proviso, Reserve officers
employed abroad under the Mutual Security Act may be promoted
on the anniversary dates of their appointment or assignment, or of
their most recent in-class promotion.
. Paragraph 3 makes a technical amendment in section 527(d) which
now authorizes the Secretary of State, at the request of the Director,
o the
to appoint alien employees abroad. The phrase "at the request contingent
Director" is deleted so that the Secretary's authority is not on the request of a subordinate.
G. REPORTS (SEC. 401(g))
This subsection amends section 534 (a) of the act so as to require a
report on operations of the Mutual Security Program to be made to
Congress covering each fiscal year instead of every 6 months.
These reports cover in detail all activities carried on under the act
with the exception of certain security information which the President
deems should be withheld in the national interest. Annual, instead of
semiannual, reports will serve the same purpose and reduce the burden
on both Congress and the executive branch.
H. CONTRACTS FOR PERSONAL SERVICES ABROAD (SEC. 401(h))
This subsection amends 537(a)(3) of the act so as to clarify the
basis upon which the International Cooperation Administration con-
tracts with individuals to furnish certain services abroad subject to
administrative and policy supervision and guidance by the ICA
mission.
The Civil Service Commission has viewed the relationship estab-
lished by such ICA contracts as one of employer to employee. The
bill makes it clear that these individuals shall not be regarded as
employees of the United States for the purpose of any law adminis-
tered by the Civil Service Commission; i.e., they will not enjoy, the
status of civil service employees with the accompanying benefits and
rights provided under the statutes governing such employees.
The new wording also makes this section applicable to individuals
whether Americans or foreign nationals, instead of just to aliens as in
the present legislation. The contractual. services involved range. from
professional technical advice to foreign governments to custodial and
housekeeping services for ICA missions. .
Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
 Approved For Release 2003/10/16 : CIA-RDP91-009658000300200001-5
THE MUTUAL SECURITY ACT OF 1060
I. CONSTRUCTION OR ACQUISITION OF FACILITIES ABROAD (SEC. 401(i))
This subsection amends section 537(c) of the act so as to raise from
$2.75 million to $4.25 million the ceiling on the amount of funds avail-
able in foreign countries excluding Korea for the construction or acqui-
sition of essential living quarters, office space, and other supporting
facilities for use by personnel engaged in carrying out activities under
the Mutual Security Program.
The increase is largely made necessary by expansion of the aid pro-
gram in Africa, where rural housing and offices are scarce; by the need
to establish or assist schools for the children of oversea mission per-
sonnel, also in Africa; and by movement of the capital of Pakistan
from Karachi to Rawalpindi. A portion of the funds will also be used
for housing and offices in Yemen.
The newly created nations of western Africa south of the Sahara
require considerably expanded ICA missions. Since rural housing in
Africa is entirely inadequate, and office buildings nonexistent, the new
ICA missions must start from scratch to provide living and working
quarters for American personnel. The ICA envisions a regional group-
ing of technicians in tropical Africa so that there can be a cooperative
use of these experts by the countries in the area, all of whose needs
are similar. The sites have not yet been selected, but three complexes
(comprising housing, office, warehouse, and maintenance shop) will
be built in upcountry locations to service the entire area at a cost of
$575,000.
The dearth of adequate educational facilities for American families
is a serious barrier to staffing missions abroad with competent person-
nel. An ICA survey indicates there is a 25-percent yearly turnover
in oversea staff. Deficiency in educational facilities for children of
American personnel is the reason most frequently given for resigna-
tions. A serious effort is being made to remedy this situation, and it is
expected that the proposed program for school construction and
equipment in Africa will be an inducement to American oversea
personnel to stay on the job. The proposed program for next year
includes $400,000 for this purpose.
The transfer of the Pakistani capital from Karachi to Rawalpindi
will necessitate new buildings for the U.S. mission in that country.
Since Pakistan is not an industrial nation, much of the construction
materials and building equipment will have to be imported. Im-
ported materials and equipment are expected to cost about $400,000.
Another $600,000 will be funded in local currency to complete the
overall cost estimate of $1 million for the building program in Pakistan.
The facilities constructed or financed under this authority will have
residual value to the United States or to the host government when the
aid program terminates. All such facilities represent a long-term-15
to 20 years at the minimum-useful investment.
13. TECHNICAL AMENDMENTS (CH. V)
The series of technical amendments made in this chapter simply
strike out, in six sections of the act, references to the "continental"
United States or the "continental limits of the" United States so that
references to the United States will reflect the fact that it now embraces
States beyond its continental limits.
S. Rept. 1280, 86--2-5
Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
 Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
30 THE MUTUAL SECURITY ACT OF 1960
14. AMENDMENTS TO OTHER LAWS
A. USE OF PUBLIC LAW 480 FOREIGN CURRENCY (SEC. 601(a))
This section makes a technical amendment in section 104 of Public
Law 480, which relates to use of foreign currencies, so as to remove a
restriction resulting from the interaction of two amendments added
to the law last year in regard to use of foreign currencies for health and
education.
Subsections (k), (p), and (r) of section 104 of Public Law 480
authorize the use for purposes of health and education, among others,
of foreign currencies accruing from the sale of surplus agricultural
commodities under title I of that law. A proviso to subsection (k)
makes foreign currencies available for the purposes of that subsection
only in such amounts as may be specified in appropriation acts. A
similar proviso is applicable to subsection (p), and currencies under
subsection (r) are limited to the equivalent of $2.5 million a year.
The uses contemplated by these subsections embrace both uses for
the benefit of the United States (e.g., collection and translation of
scientific and technological information) and uses for the benefit of
the foreign country (e.g., support of educational development).
This latter category of uses is also embraced under subsections (e)
and (g) which make foreign currency available, without appropriation
requirement, for purposes of economic development. However, a
final proviso to section 104 forbids allocation of foreign currencies
"under any provision of this Act after June 30, 1960, for the purposes
specified in subsections (k), (p), and (r)" except as specified in appro-
priation acts. The effect of this last proviso is to make it impossible
to use foreign currencies for purposes of economic development
through health and education under subsections (e) and (g) except as
the currencies maybe appropriated. Since none of the other uses under
subsections (e) and (g) are thus restricted, the proviso curtails rather
drastically the work that can be carried on in these two fields which
are basic to economic development.
The amendment made by the bill would repeal the pertinent part
of the proviso in question so that foreign currencies could be used for
health and education programs related to economic development
without appropriation, but could not be used for such programs which
primarily benefit the United States or are unrelated to economic
development. This is consistent with the Budget Bureau report to
the Senate Committee on Appropriations on "Control Over the Use of
Foreign Currencies," which distinguishes between "U.S. use" and
"country use" currency with respect to application of appropriation
controls.
B. GRANTS OF COMMODITIES FOR ECONOMIC DEVELOPMENT (SEC. 601(b))
Title II of Public Law 480, the Agricultural Trade Development
and Assistance Act, deals with famine relief and other assistance.
In its present form it authorizes grant assistance to friendly peoples to
meet famine or other "urgent or extraordinary relief requirements."
The amendment to this title made by section 601.(b) of the bill would
add the purpose of promoting economic development in under-
developed areas as one of the aims for which grant assistance could
be furnished.
Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
 Approved For Release 2003/10/1 ? ,,I,I-; PR~-99RR5R00030029?001-5
THE MUTUAL SE UR
The amendment would make it possible to furnish surplus agricul-
tural commodities, on a grant basis, for purposes of economic develop-
ment in underdeveloped countries where famine or other emergency
situations do not exist. It is contemplated that this authority would
be mainly used in Africa and South Asia. The new authority
would make it possible for example, for commodities to be furnished
on a grant basis to a country which has a bad unemployment problem
and which could use the commodities to pay wages, in kind, to people
working on road maintenance or construction or on other public
works. The same result can be accomplished in many cases, rather
more awkwardly, under authority now existing in title I of Public Law
480, under which surplus commodities can be sold for foreign currency
which in turn can be lent or granted back to a country for similar uses.
Under the procedure which the amendment will authorize, the United
States can avoid the problems attendant upon large accumulations of
foreign currencies. It will also have the effect of enabling Public
Law 480 to be used, to some extent, to supplement funds for defense
support and special assistance, but it cannot, of course, be used as a
substitute for dollar programs.
It should be borne in mind in this connection, however, that this
new authority will be subject to the overall limitation of $300 million
a year on the value of commodities which can be furnished under
title II of Public Law 480. Furthermore, the overall authority of
this title expires December 31, 1961.
C. FREIGILC CHARGES TO LANDLOCKED COUNTRIES (SEC. 601(0))
This subsection amends section 203 of Public Law 480 to authorize
payment of overland freight charges on relief shipments to landlocked
countries.
This amendment corresponds to that made in section 409 of the
Mutual Security Act by section 204(1) of this bill (see above).
D. REPEAL OF INTERNATIONAL HEALTH FUNDS (SEC. 602)
This section repeals section 501(b) of the Mutual Security Act of
1959, which makes available $2 million from the contingency fund for
international health work.
A prohibition against use of these funds for this purpose is con-
tained in the appropriation act. The repeal loaves undisturbed the
statement of policy in section 501 (a) of the act of 1959 that the United
States should--
accelerate its efforts to encourage and support international
cooperation in programs directed toward the conquest of
diseases and other health deficiencies.
Under other authority in the act-specifically that for defense sup-
port, technical cooperation, and special assistance, as well as the
Development Loan Fund-there is ample provision to carry on work
of this kind.
Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
 Appr ved For Rel TasEe 220003/10/16: CIA-RDP9o 00 965R000300200001-5
TUAL SECURITY ACT F 1960
E. FOOD AND AGRICULTURE ORGANIZATION (SEC. 603)
This section repeals the absolute limitation of $3 million on U.S.
annual contributions to the United Nations Food and Agriculture
Organization, but leaves intact the relative limitation of 33.33 percent.
Under the present law, which contains both an absolute and a
relative ceiling, the United States cannot meet its obligations to FAO
if that organization's budget rises above $9 million a year. There is
every prospect that such a rise will take place at the next FAO meeting
in the autumn of 1961. If the United States is to participate actively
and effectively in the budgetary planning which will go on prior to
that meeting, it seems wise to act now to remove the dollar ceiling
on the U.S. contribution.
The FAO's budget, like that of most other specialized organizations
of the United Nations, has grown gradually over the years. In part
this has been a reflection of a larger program and an expanded work-
load. In part it has been a reflection of higher costs generally.
In any event, it seems to the committee unwise to hobble U.S.
participation in FAO--and to attempt to hobble the organization
itself.---by a ceiling on U.S. budgetary contributions expressed in both
absolute and percentage terms. The limitation of 33.33 percent is
quite sufficient to protect the U.S. interest and to insure that future
growth in FAO's budget is thoroughly considered and shared by all
members.
F. SOUTH PACIFIC COMMISSION (SEC. 604)
This section increases from $75,000 to $100,000 a year the limitation
on U.S. contributions to the South Pacific Commission.
The members of this Commission, besides the United States, are
Australia, France, the Netherlands, New Zealand, and the United
Kingdom. The purpose of the Commission is-
to encourage and strengthen international cooperation in
promoting the economic and social welfare and advance-
ment of the non-self-governing territories in the South
Pacific.
The Commission has its headquarters at Noumea, New Caledonia,
and carries on work in the fields of health, education, fisheries, and
agriculture in the 17 dependent territories of the South Pacific,
including American Samoa, Guam, and the Trust Territory of the
Pacific Islands. Its budget presently amounts to $560,000 a year,
of which the United States now contributes 12.5 percent.
The increase in the limitation onJU.S. contributions would enable
an enlargement of the Commission's work. In view of the very
modest scope of the Commission's activities to date, the committee
believes that such an enlargement can be justified.
G. ASSISTANCE FOR FOREIGN STUDENTS (SEC. 605)
This section amends the U.S. Information and Educational Ex-
change (Smith-Mundt) Act so as to authorize limited grants to
colleges and universities to help them with programs of counseling
and orientation for foreign students. The schools concerned will
have to match the Federal grants with their own funds. No school
Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
 Approved For Release 2003/10/16 : CIA-RDP91-00965R0003002pd0001-5
THE MUTUAL SECURITY ACT OF 1960
can receive more than $100 per foreign student, and the total for the
country can not exceed $1 million per year.
This amendment is designed to meet a situation which was brought
to the committee's attention by officials of the University of Pennsyl-
vania after consultation with other universities with enrollments of
more than 300 foreign students. With the exception of one or two
extraordinarily well endowed institutions, all of these universities are
having great difficulty in providing adequate counseling, orientation,
and other extracurricular services for those of their foreign students
who are not under Government sponsorship. These comprise the
bulk of the foreign students. Of the 50,000 foreign students in the
United States, at least 40 percent are here entirely on their own
resources. Five percent are on U.S. Government grants, an equal
number on foreign government grants, and the balance on a com-
bination of private or government grants combined with their own
resources.
Adequate services of the type envisaged in this amendment are
already available for government-sponsored students and for those
in institutions with relatively small foreign student enrollments. The
problem arises in large institutions in metropolitan areas with large
numbers of foreign students. Because of the difficulty of adjusting
to life in this kind of an environment, many of these students are
receiving an unfavorable impression of the United States, though.
most of them are quite satisfied with their academic training.
Under the provisions of the bill, a university with a problem in
this area would prepare a specific program for dealing with it and
submit the program to the Department of State which, if it found the
program satisfactory, would then be authorized to match the uni-
versity's funds up to a maximum of $100 per student per year. It is
anticipated that few universities would receive more than $25,000 or
$30,000 a year in this fashion, but it is thought that these relatively
small sums might well mean the difference between doing a good job
and a poor job for the foreign student. It should also be emphasized
that no part of these funds is to be paid to the student; they are all
to be paid to the university for programs to help the student.
15. STUDY OF FOREIGN ECONOMIC ACTIVITIES (SEC. 606)
This section requires that the President-
have a study made of the functions of, and the degree of co-
ordination among, agencies engaged in foreign economic
activities, including the Department of State, the Inter-
national Cooperation Administration, the Development Loan
Fund, the Export-Import Bank, and the Department of
Agriculture, with a view to simplifying and rationalizing the
formulation and implementation of United States foreign
economic policies.
The findings and recommendations resulting from this study are to
be included in the President's presentation to Congress of the fiscal
1962 mutual security program.
Although interdepartmental coordination of foreign economic activ-
ities has improved somewhat in recent years, the agencies involved
and the activities themselves are so disparate as to pose a continuing
Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
 Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
34 THE MUTUAL SECURITY ACT OF 1960
problem. It is well for a fresh study o:f this problem to be made at
intervals.
Moreover, the fiscal 1962 mutual security program will be presented
to Congress by a new President. It will. probably be helpful for him,
whoever he may be, to have available the results of a study such as
is proposed here.
Among the aspects of the problem of greatest concern to the com-
mittee are how to insure that the process of coordination does not
become so painstaking as to lead to paralysis, and how to insure that
it results in a policy which adequately reflects the overall national
interest rather than a collection of parochial interests.
CHANGES IN EXISTING LAW
In compliance with subsection 4 of rule XXIX of the Standing
Rules of the Senate, changes in existing law made by the bill, as re-
ported, are shown as follows- (existing law proposed to be omitted is
enclosed in black brackets, new matter is printed in italic, existing law
in which no change is proposed is shown in roman) :
MUTUAL SECURITY ACT OF 1954, AS AMENDED
SEC. 103. AUTHORIZATIONS.--(a) There is hereby authorized to be
appropriated to the President for use beginning in the fiscal year 1960
to carry out the purposes of this chapter not to exceed $1,400,000,000,
which shall remain available until expended. Programs of military
assistance subsequent to the fiscal year 1960 program shall be budgeted
so as to come into competition for financial support with other activi-
ties and programs of the Department of Defense. There is hereby
authorized to be appropriated to the President for the fiscal years 1961
and 1962 such sums as may be necessary from time to time to carry
out the purposes of this chapter, which sums shall remain available
until expended.
(b) Funds made available pursuant to subsection (a) of this section
shall be available for the administrative and operating expenses of
carrying out the purpose of this chapter including expenses incident
to United States participation in international security organizations.
(c) When appropriations made pursuant to subsection (a) of this
section are used to furnish military assistance on terms of repayment
within ten years or earlier such assistance may be furnished, notwith-
standing sections 105, 141, and 142, to nations eligible to purchase
military equipment, materials, and services under section 106. When
appropriations made pursuant to this section are used to furnish mili-
tary assistance on terms of repayment within three years or earlier,
dollar repayments, including dollar proceeds derived from the sale of
foreign currency received hereunder to any United States Government
agency or program, may be credited to the current applicable appro-
priation and shall be available until expended for the purposes of
military assistance on terms of repayment, and, notwithstanding sec-
tion 1415 of the Supplemental Appropriation Act, 1953, or any other
provision of law relating to the use of foreign currencies or other
receipts accruing to the United States, repayments in foreign currency
may be used for the purposes of this chapter: Provided, That the
Approved For Release 2003/10/16 CIA-RDP91-00965R000300200001-5
 Approved For Release 2003/10/16 : CIA-RDP91-00965R0003002Q0001-5
THE MUTUAL SECURITY ACT. OF 1960
authority in this sentence shall apply to repayments from not to exceed
$175,000,000 of the appropriations used for such assistance.
(d) The value of programs of equipment and materials for American
Republics, pursuant to any authority contained in this chapter other than
section 106, in any fiscal year beginning with the fiscal year 1961, shall
not exceed $55,000,000. For the purposes of this subsection, the value
of nonexcess equipment and materials shall be as defined in section
545(h) of this Act, and the value of excess equipment and materials (as
excess is defined in section 545(h) of this Act) shall mean the acquisition
cost to the Armed Forces of the United States of such equipment and
materials.
SEC. 105. CONDITIONS APPLICABLE TO MILITARY ASSISTANCE.-(a)
Military assistance may be furnished under this chapter to any nation
whose increased ability to defend itself the President shall have
determined to be important to the security of the United States and
which is otherwise eligible to receive such assistance. Equipment
and materials furnished under this chapter shall be made available
solely to maintain the internal security and legitimate self-defense
of the recipient nation, or to permit it to participate in the defense of
its area or in collective security arrangements and measures con-
sistent with the Charter of the United Nations. The President shall
be satisfied that such equipment and materials will not be used to
undertake any act of aggression against any nation.
(b) In addition to the authority and limitations contained in the
preceding subsection, the following provisions shall apply to particular
areas:
(1) The Congress welcomes the recent progress in European
cooperation and reaffirms its belief in the necessity of further
efforts toward political federation, military integration, and
economic unification as a means of building strength, establish-
ing security, and preserving peace in the North Atlantic area.
In order to provide further encouragement to such efforts, the
Congress believes it essential that this Act should be so admin-
istered as to support concrete measures to promote greater
political federation, military integration, and economic unifica-
tion in Europe, including coordinated production and procure-
ment programs participated in by the members of the North
Atlantic Treaty Organization to the greatest extent possible with
respect to military equipment and materials to be utilized for
the defense of the North Atlantic area.
(2) Military assistance furnished to any nation in the Near
East and Africa to permit it to participate in the defense of its
area shall be furnished only in accordance with plans and arrange-
ments which shall have been found by the President to require
the recipient nation to take an important part therein.
(3) In furnishing military assistance in Asia, the President
shall give the fullest assistance, as far as possible directly, to the
free peoples in that area, including the Associated States of
Cambodia, Laos, and Vietnam, in their creation of a joint organ-
ization, consistent with the Charter of the United Nations, to
establish a program of self-help and mutual cooperation designed
to develop their economic and social well-being, to safeguard
Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
 Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
~36 THE MUTUAL SECURITY ACT OF 1060
basic rights and liberties, and to protect their security and
independence.
(4) Military equipment and materials may be furnished to the
other American Republics only in furtherance of missions directly
relating to the common defense of the Western Hemisphere which
are found by the President to be important to the security of the
United States. The President annually shall review such find-
ings and shall determine whether military assistance is necessary.
Internal security requirements shall not, unless the President
determines otherwise, be the basis for military assistance pro-
grams to American Republics. [The aggregate amount of funds
which may be obligated or reserved during the fiscal year 1960
for furnishing military assistance to American Republics shall not
exceed the aggregate amount of funds obligated or reserved for
such purpose during the fiscal year 1959.]
(5) To the extent feasible and consistent with the other pur-
poses of this chapter, administrators of the military assistance
program shall encourage the use of foreign military forces in
underdeveloped countries in the construction of public works and
other activities helpful to economic development.
SEC. 131. GENERAL AUTHORITY.-(a) The President is hereby
authorized to furnish, to nations and organizations eligible to receive
military assistance under Chapter I, or to nations which have joined
with the United States in a regional collective defense arrangement,
commodities, services, and financial and other assistance specifically
designed to sustain and increase military effort. In furnishing such
assistance, the President may provide for the procurement and
transfer from any source of any commodity or service (including
processing, storing, transporting, marine insurance, and repairing) or
any technical information and assistance.
There is hereby authorized to be a pro printed to the President for
use beginning in the fiscal year [19601 1961 to carry out the purposes
of this section not to exceed [$751,000,000] $700,000,000, which shall
remain available until expended.
(c) In providing assistance in the procurement of commodities in the
United States, United States dollars shall be made available for marine
insurance on such commodities where such insurance is placed on a
competitive basis in accordance with normal trade practice prevailing
prior to the outbreak of World War II: Provided, That in the event a
participating country, by statute, decree, rule, or regulation, discrimi-
na tes against any marine insurance company authorized to do business
in any State of the United States, then commodities purchased with
funds provided hereunder and destined for such country shall be
insured in the United States against marine risk with a company or
companies authorized to do a marine insurance business in any State
of the United States.
(d) To the extent necessary to accomplish the purposes of this
section in Korea (1) assistance may be furnished under this section
without regard to the other provisions of this title or chapter I and (2)
the authority provided in section 307 may be exercised in furnishing
assistance under subsection (a) of this section; and funds available
under this section may be used for payment of ocean freight charges
Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
 Approved For Re Vq%/i(Jj Wf-R ~F-00965R00030023Q001-5
on shipments for relief and rehabilitation in Korea without regard to
section 409 of this Act.
SEC. 141. CONDITIONS OF ELIGIBILITY FOR ASSISTANCE.-No assist-
ance shall - be furnished' ,under this title or chapter I to any nation or
organization unless the President shall have found that furnishing
such assistance will strengthen the security of the United States and
promote world peace. [No such assistance] No defense support or
military equipment and materials shall be furnished to a nation unless,
it shall have agreed to the provisions required by section 142, and
such additional provisions as the President deems necessary to effec-
tuate the policies and provisions of this title or chapter I and to safe-
guard the interests of the United States.
SEC. 142. AGREEMENTS. (a) [No assistance] No defense support
or military equipment and materials shall be furnished to any nation
under chapter I or under this title unless such nation shall have agreed
to-
(1) join in promoting international understanding and good
will, and maintaining world peace;
(2). take such action as may be mutually agreed upon to
eliminate causes of international tension;
(3) fulfill the military obligations, if any, which it has assumed
under multilateral or bilateral agreement or treaties to which the
United States is a party;
(4) make, consistent with its political and economic stability,
the full contribution permitted by its manpower, resources,
facilities, and general economic condition to the development
and maintenance of its own defensive strength and the defensive
strength of the free world;
(5) take all reasonable measures which may be needed to de-
velop its defense capacities;
(6) take appropriate steps to insure the effective utilization of
the assistance furnished under this title in furtherance of the
policies and. purposes of chapter I or of this title;
(7) impose appropriate restrictions against transfer of title to
or possession of any equipment and materials, information, or
services furnished under chapter I without the consent of the
President;
(8), maintain the security of any article, service, or information
furnished under chapter I;
(9) furnish equipment and materials, services, or other assist
ance consistent with the Charter of the United Nations, to the
United States or to and among other nations to further the
policies and purposes of chapter I;
(10) permit continuous observation and review by United
States representatives of programs of assistance authorized under-
chapter I or under this title, including the utilization of any such
assistance and provide the United States with full and complete
information with respect to these matters, as the President may
require.
(b) In cases where any commodity is to be furnished on a grant
basis under this title under arrangements which will result in the
accrual of proceeds to the recipient nation from the import or sale
Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
 Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
38 THE MUTUAL SECURITY ACT OF 1960
thereof; such assistance shall not be furnished unless the recipient
nation shall have agreed to establish a Special Account, and-
(i) deposit in the Special Account, under such terms and
conditions as may be agreed upon; currency of the recipient
nation in amounts equal to such proceeds;
(ii) make available to the United States such portion of the
Special Account as may be determined by the President to be
necessary for the requirements of the United States: Provided,
That such portion shall not be less than 10 per centum in the
case of any country to which such minimum requirement has
been applicable under any Act repealed by this Act; and
(iii) utilize. the remainder of the Special Account for programs
agreed to by the United States to carry out the purposes for
which new funds authorized by this Net would themselves be
available: Provided, That if amounts in such remainder exceed
the requirements of such programs, the recipient nation may
utilize such excess amounts for other purposes agreed to by the
United States which are consistent with the foreign policy of the
United States: Provided further, That such utilization of such
excess amounts in all Special Accounts shall not exceed the
equivalent of $4,000,000: Provided further, That whenever funds
from such Special Account are used by a country to make loans,
all funds received in repayment of such loans prior to termination
of assistance to such country shall be reused only for such pur-
poses as shall have been agreed to between the country and the
Government of the United States.
Any unencumbered balances of funds which remain in the Account
upon termination of assistance to such nation under this Act shall be
disposed of for such purposes as may, subject to approval by the Act
or joint resolution of the Congress, be agreed to between such country
and the Government of the United States.
* * *
TITLE II-DEVELOPMENT LOAN FUND
SEC. 201. DECLARATION OF PURPOSE.--The Congress of the United
States recognizes that the progress of free peoples in their efforts to
further their economic development, and thus to strengthen their
freedom, is important to the security and general welfare of the United
States. The Congress further recognizes the necessity in some cases
of assistance to such peoples if they are to succeed in these efforts.
The Congress accordingly reaffirms that it is the policy of the United
States, and declares it to be the purpose of this title, to strengthen
friendly foreign countries by encouraging the development of their
economies through a competitive free enterprise system; to minimize
or eliminate barriers to the flow of private investment capital and
international trade; to facilitate the creation of a climate favorable
to the investment of private capital; and to assist, on a basis of self-
help and mutual cooperation, the efforts of free peoples to develop
their economic resources and free economic institutions and to increase
their productive capabilities in agriculture as well as in industry. The
Congress recognizes that the accomplishment of the purposes of this title
in rapidly developing countries requires the development of free economic
institutions and the stimulation of private investment, local as well as
Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
 Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
THE MUTUAL SECURITY ACT : 'OF 19:60' 39
foreign, in the field of housing. It is the sense of the Congress that;, con-
sistent with the other purposes of this title, special consideration should
be given to loans and guarantees to stimulate activities in this field.
SEC, 202. GENERAL AUTHORITY.-(a) To carry out the purposes of
this title, there is hereby created as an agency of the United States of
America, subject to the direction and supervision of the President, a
body corporate to be known as the "Development Loan Fund" (herein-
after referred to in this title as the "Fund") which shall have succession
in its corporate name. The Fund shall have its principal office in the
District of Columbia and shall be deemed for purposes of venue in
civil actions, to be a resident thereof. It may establish offices in such
other place or places as it may deem necessary or appropriate.
(b) The Fund is hereby authorized to" make loans, credits, or
guaranties, or to engage in other financing operations or transactions
(not to include grants or direct purchases of equity securities), to or
with such nations, organizations, persons or other entities, and on
such terms and conditions, as it may determine, taking into account
(1) whether financing could be obtained in whole or in part from other
free world sources on reasonable terms, (2) the economic and technical
soundness of the activity to be financed, (3) whether the activity gives
reasonable promise of contributing to the. development of economic
resources or . free economic institutions or to the increase of productive
capacities in furtherance of the purposes of this title, and (4) the
possible adverse effects upon the economy of the United States, with
special reference to areas of substantial labor surplus, of the activity
and the financing operation or transaction involved. Loans shall be
made by the Fund only on the basis of firm commitments by the
borrowers to make repayment and upon a finding that there are
reasonable prospects of such repayment. The Fund.in its operations,
shall recognize that development loan assistance will be most effective
in those countries which show a responsiveness to the vital long-term
economic, political, and social concerns of their people, demonstrate
a clear willingness to take effective self-help measures, and effectively
demonstrate that such assistance is consistent with, and makes a
contribution to, workable long-term economic development objectives.
The Fund shall be administered so as to support and encourage private
investment and other private participation furthering the purposes of
this title, and it shall be administered so as not to compete with
private investment capital, the Export-Import Bank or the Inter-
national Bank for Reconstruction and Development. The provisions
of section .955 of title 18 of the United States Code shall not apply to
prevent any person, including any individual, partnership, corpora-
tion, or association, from acting for or participating with the Fund
in any operation or transaction, or from acquiring any obligation
issued in connection with any operation or transaction, engaged in
by the Fund. The authority of section 451(a) of this Act may not
be used to waive the requirements of this title or of the Mutual
Defense Assistance Control Act of 1951 with respect .to. this title,
nor may the authority of section 501 of this Act be used to increase
or decrease the funds available under this title. No guaranties of
equity investment against normal business-type risks shall be made
available under this subsection nor shall the fractional reserve main-
tained by the Development Loan Fund for any guaranty made
pursuant to this section be less in any case than 50 per centum of
Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
 Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
40 THE MUTUAL SECURITY ACT OF 1960
the contractual liability of the Development Loan Fund under such
guaranty, and the total contractual liability of the Development.
Loan Fund under all of such guaranties shall not, at any one time,
exceed $100,000,000. The President's semi-annual reports to the
Congress on operations under this Act, as provided for in section
534 of this Act, shall include detailed information on the.implementa
tion of this title.
Si;c. 205. MANAGEMENT, POWERS, AND .AUTHORITIES.-(a) The
management of the Fund shall be vested in a Board of Directors.
(hereinafter referred to in this title as the "Board") consisting of the
[Under Secretary of State for Economic Affairs] Secretary of State,.
who shall be Chairman, the Director of the International Cooperation
Administration, the Chairman of the Bcard of Directors of the Export
Import Bank, the Managing Director of the Fund, and the United
States Executive Director on the International Bank for Reconstruc-
tion and Development. The Board shall carry out its functions
subject to the foreign policy guidance of the Secretary of State. The
Board shall act by a majority vote participated in by a quorum; and
three members of the Board shall constitute a quorum. . Subject to
the foregoing sentence, vacancies in the membership of the Board shall
not affect its power to act. The Board shall meet for organization
purposes when and. where called by the Chairman. The Board may,.
in addition. to taking any other necessary or appropriate actions in.
connection with the management of the Fund, adopt, amend, and
repeal bylaws governing the conduct of its business and the per-
formance of the authorities, powers, and functions of the Fund and its
officers and employees. The members of the Board shall receive no
compensation for their services on the Board but may be paid actual.
travel expenses and per diem in lieu of subsistence under the Standard-
ized Government Travel Regulations in connection with travel or
absence from their homes or regular places of business for purposes
of business of the Fund.
(b) There shall be a Managing Director of the Fund who shall be. the
chief executive officer of the 1' und., who shall be appointed by the
President of the United States by and with the. advice and consent of
the Senate, and whose compensation shall be at a rate of $20,000 a
year. There shall also be a Deputy Managing Director of the Fund,
whose compensation shall be at a rate not in excess of $19,000 a year,
and four other officers of the Fund, whose titles shall be determined
by the Board and whose compensation shall be at a rate not in excess.
of $18,000 per year. Appointment to the; offices provided for in the
preceding sentence shall be by the Board. The Managing Director,
in his capacity as chief executive officer of the Fund, the Deputy
Managing Director and the other officers of the Fund shall perform
such -functions as the Board may designate and shall be subject to. the
supervision and direction of the Board. During the absence or dis-
ability of the Managing Director or in the event of a vacancy in the
office of Managing Director, the Deputy Managing Director shall act
as Managing Director, or, if the Deputy Managing Director is also
absent or disabled or the office of Deputy Managing Director is
vacant, such other officer as the Board may designate shall act as
Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
 Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
Managing Director. The offices provided for in this subsection shall
be in addition, to positions otherwise authorized by law.
(c) The Fund, in addition to other powers and authorities vested
in or delegated or assigned to the Fund or its officers or the Board,
may: enter into, perform, and modify contracts, leases, agreements,
or other transactions, on such terms as it may deem appropriate,
with any agency or instrumentality of the United States, with any
foreign government or foreign government agency, or with any per-
son, partnership, association, corporation, organization, or other entity,
public or private, singly or in combination; accept and use gifts or
donations of services, funds, or property (real, personal or mixed,
tangible or intangible); contract for the services of attorneys; deter-
mine the character of and. necessity for obligations and expenditures
of the Fund, and the manner in which they shall be incurred, allowed,
and paid, subject to provisions of law specifically applicable to Gov-
ernment corporations; acquire and dispose of, upon such terms and
conditions and for such consideration as the Fund shall determine
to be reasonable, through purchase, exchange, discount, rediscount,
public or private sale, negotiation, assignment, exercise of option or
conversion rights, or otherwise, for cash or credit, with or without
endorsement or guaranty, any property, real, personal, mixed, tangible
or intangible, including, but not limited to, mortgages, bonds, deben-
tures (including convertible debentures), liens, pledges, and other
collateral or security, contracts, claims, currencies, notes, drafts,
checks, bills of exchange, acceptances including bankers' acceptances,
cable transfers and all other evidences of indebtedness or owners. ip
(provided that equity securities may not be directly purchased
although such securities may be acquired by other means such as by
exercise of conversion rights or through enforcement of liens, pledges
or otherwise to satisfy a previously incurred indebtedness), and guar-
antee payment against any instrument above specified; issue letters
of credit and letters of commitment; collect or compromise any obli-
gations assigned to or held by, and any legal or equitable rights
accruing to, the Fund, and, as the Fund may determine, refer any
such obligations or rights to the Attorney General for suit or collec-
tion; adopt, alter and use a corporate seal which shall be judicially
noticed; require bonds for the faithful performance of the duties of
its officers, attorneys, agents, and employees and pay the premiums
thereon; sue and be sued in its corporate name (provided that no
attachment, injunction, garnishment, or similar process, mesne or
final, shall be issued against the Fund or any officer thereof, including
the Board or any member thereof, in his official capacity or against
property or funds owned or held by the Fund or any such officer in
his official capacity); exercise, in the payment of debts out of bank-
rupt, insolvent or decedent's estates, the priority of the Government
of the United States; purchase one passenger motor vehicle for use
in the [continental] United States and replace such vehicle from
time to time as necessary; use the United States mails in the same
manner and under the same conditions as the executive departments
of the Federal Government; and otherwise take any and all actions
determined by the Fund to be necessary or desirable in making,
carrying out, servicing, compromising, liquidating, or otherwise deal-
ing with or realizing on any transaction or operation, or in carrying
out any function. Nothing herein shall be construed to exempt the
Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
 Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
42 THE MUTVAL SECURITY, AOT OF 1960
Fund or its operations from the application of section 507(b) and 2679
of title 28, United States Code or of section 367 of the Revised Statutes
(5 U.S.C. 316), or to authorize the Fund to borrow any funds from
any source without the express legislative permission of the Congress.
(d) The Fund shall contribute, from the respective appropriation
or fund used for payment of salaries, pay or compensation, to the
civil service retirement and disability fund, a sum as provided by
section 4(a) of the Civil Service Retirement Act, as amended (5 U.S.C.
2254a), except that such sum shall be determined by applying to the
total basic salaries (as defined in that Act) paid to the employees of
the Fund covered by that Act, the per centum rate determined an-
nually by the Civil Service Commission to be the excess of the total
normal cost per centum rate of the civil service retirement system over
the employee deduction rate specified in said section 4(a). The Fund
shall also contribute at least quarterly from such appropriation or
fund, to the employees' compensation fund, the amount determined
by the Secretary of Labor to be the full cost of benefits and other
payments made from such fund on account of injuries and deaths of
its employees which may hereafter occur. The Fund shall also pay
into the Treasury as miscellaneous receipts that portion of the cost of
administration of the respective funds attributable to its employees,
as determined by the Civil Service Commission and the Secretary of
Labor.
(e) The assets of the Development Loan Fund on the date of enact-
ment of the Mutual Security Act of 1958 shall be transferred as of
such date to the body corporate created by section 202(a) of this Act.
In addition, records, personnel, and property of the International
Cooperation Administration may, as agreed by the Managing Director
and the Director of the International Cooperation Administration or
as determined by the President, be transferred to the Fund. Obliga-
tions and liabilities incurred against, and rights established or acquired
for the benefit of or with respect to, the Development Loan Fund
during the period between August 14, 1957, and the date of enactment
of the Mutual Security Act of 1958 are hereby transferred to, and
accepted and assumed by, the body corporate created by section 202 (a)
of this Act. A person serving as Manager of the Development Loan
Fund as of the date of. enactment of the Mutual Security Act of 1958
shall not, by reason of the enactment of that Act, require reappointment
in order to serve in the office of Managing Director provided for in
section 205(b) of this Act..
SEC. 206. NATIONAL ADVISORY COUNCIL.-The Fund shall be
administered subject to the applicable provisions of section 4 of
the Bretton Woods Agreements. Act ('22 U.S.C. 286b) with. respect
to the functions of the National Advisory Council on International
Monetary and Financial Problems.
SEC. 207. HOUSING PROJECTS IN LATIN AMERICAN COUNTRIES.-
It is the sense of the Congress that in order to stimulate private home-
ownership, encourage the development of free financial institutions,- and
assist in the development of a stable economy, the authority conferred by
this title should be utilized for the purpose of assisting in the development
in the American Republics of self-liquidating pilot housing projects
designed to provide experience in countries at various stages of economic
development by participating with,such countries in (1) providing capital
for the establishment of, or_ for assistance in the establishment of, savings
Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
 Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
THE MUTUAL SECURITY ACT OF 1960 43
and loan type institutions in such countries; and (2) guaranteeing private
United States capital available for investment in Latin American coun-
tries for the purposes set forth herein.
SEC. 304. AUTHORIZATION.-There is hereby authorized to be
appropriated to the President to remain available until expended not
to exceed [$179,500,000] $172,000,000 for use beginning in the fiscal
year [1960] 1,961 to carry out the purposes of this title.
SEC. 305. LIMITATION ON USE OF FUNDS.-Funds made available
under section 304 may be expended to furnish assistance in the form of
equipment or commodities only where necessary for instruction or
demonstration purposes.
SEC. 306. MULTILATERAL TECHNICAL COOPERATION AND RELATED
PROGRAMS.-As one means of accomplishing the purposes of this
title and this Act, the United States is authorized to participate in
multilateral technical. cooperation and related programs carried on by
the United Nations, the Organization of American States, their
related organizations, and other international organizations, wherever
practicable. There is hereby authorized to be appropriated to carry
out the purpose of this section, in addition to the amounts authorized
by section 304, not to exceed-
(a) [$30,000,000] $38,000,000 for the fiscal year [1960] 1961 for
contributions to the United Nations Expanded Program of Technical
Assistance and such related fund .as may hereafter be established:
Provided, That, notwithstanding the limitation of 33.33 per centum
contained in the Mutual Security Appropriation Act, 1957, the United
States contribution for such purpose may constitute for the calendar
year 1958 as much as but not to exceed 45 per centum of the total
amount contributed for such purpose and for succeeding calendar
years not to exceed 40 per centum of the total amount contributed for
such purpose (including assessed and audited local costs) for each such
year.
(b) $1,500,000 for the fiscal year [1960] 1961 for contributions to
the technical cooperation program of the Organization of American
States.
SEC. 307. ADVANCES AND GRANTS; CONTRACTS.-(a) The President
may make advances and grants-in-aid of technical cooperation pro-
grams to any person, corporation, or other body of persons or to any
foreign government agency. The President may make and perform
contracts and agreements in respect to technical cooperation programs
,on behalf of the United States Government with any person, corpora-
tion, or other body of persons however designated, whether within or
without the United States, or with any foreign government or foreign
government agency. A contract or agreement which entails commit-
ments for the expenditure of funds appropriated pursuant to this title
may, subject to any future action of the Congress, extend at any time
for not more than three years.
(b) The President shall arrange for a nongovernmental research group,
university, or foundation to study the advisability and practicability of a
pprgram, to be known as the Point Four Youth Corps, under which young
T united States citizens would be trained and serve abroad in programs of
technical cooperation. Not to exceed $10,000 from funds made available
Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
 Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
44 THE MUTUAL SECURITY ACT OF' 1900
pursuant to section 304 of this Act may be used to help defray the expenses
of such a study.
TITLE IV-SPECIAL ASSISTANCE AND OTHER PROGRAMS
SEC. 400. SPECIAL ASSISTANCE.-(a) There is hereby authorized to
be appropriated to the President for the fiscal year [1960] 1961 not
to exceed [$247,500,000]$260,000,00(; for use on such terms and con-
ditions as he may specify for assistance designed to maintain or pro-
mote political or economic stability.
(b) For the purpose of promoting economic development in Latin
America there is hereby authorized to be appropriated to the .President
not to exceed $25,000,000, which shall remain available until expended,
and in the utilization of such sum preference shall be given to (A)
projects or programs that will clearly contribute to promoting health,
education, and sanitation in the area as a whole or among a group or
groups of countries of the area, (B) joint health, education, and sani-
tation assistance programs undertaken by members of the Organiza-
tion of American States, and (C) such land resettlement programs as
will contribute to the resettlement of foreign and native migrants in
the area as a whole, or in any country of the area, for the purpose of
advancing economic development and agricultural and industrial pro-
ductivity: Provided, That assistance under this sentence shall empha-
size loans rather than grants wherever possible, and not less than 90
per centum of the funds made available for assistance under this sub-
section shall be available only for furnishing assistance on terms of
repayment in accordance with the provisions of section 505.
(c) The President is authorized to use not to exceed $20,000,000 of
funds appropriated pursuant to subsection (a.) of this section for
assistance, on such terms and conditions as he may specify, toschools
and libraries abroad, founded or sponsored by citizens of the United
States, and serving as study and demonstration centers for ideas
and practices of the United States, notwithstanding any other Act
authorizing assistance of this kind. Further, in addition to the
authority contained in this subsection, it is the sense of Congress
that- the President should make a special and particular effort to
utilize foreign currencies accruing under title I of the Agricultural
Trade Development and Assistance Act of 1954, as amended, and
notwithstanding the provisions of Public Law 213, Eighty-second
Congress, the President is authorized to utilize foreign currencies
accruing to the United States under this or any other Act, for the
purposes of this subsection and for hospitals abroad designed to
serve as centers for medical treatment, education- and research,
founded or sponsored by citizens of the United States.
SEC. 401. UNITED NATIONS EMERGENCY FORCE.-The Congress of
the United States, recognizing the important contribution of the
UnitedNations Emergency Force to international peace and security,
declares it to be the policy of the United States and the purpose of this
section to support the United Nations Emergency Force. The
President is hereby authorized to use during the fiscal year [1960]
1961 funds made available pursuant to section 400(a) of this Act for
contributions on a voluntary basis to the budget of the United Nations
Emergency Force.
Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
 Approved For ReJ e1;qR~0Aj&Tj -RPf9o11-00 605R00030020~0001-5
SEC. 402. EARMARKING OF FUNDS.-Of the funds authorized to be
made available in the fiscal year [1960] 1961 pursuant to this Act,
(other than funds made available pursuant to title II), not less than
$175,000,000 shall be used to finance the export and sale for foreign
currencies or the grant of surplus agricultural commodities or products
thereof produced in the United States, in addition to surplus agricul-
tural commodities or products transferred pursuant to the Agricultural
Trade Development and Assistance Act of 1954, and in accordance
with the standards as to pricing and the use of private trade channels
expressed in section 101 of said Act. Foreign currency proceeds
accruing from such sales shall be used for the purposes of this Act
and with particular emphasis on the purposes of section 104 of the
Agricultural Trade Development and Assistance Act of 1954 which
are in harmony with the purposes of this Act. Notwithstanding
section 1415 of the Supplemental Appropriation Act, 1953, or any
other provision of law, the President may use or enter into agreements
with. friendly nations or organizations of nations to use for such pur-
poses the foreign currencies which accrue to the United States under
this section. Surplus food commodities or products thereof made
available for transfer under this Act (or any other Act) as a grant or
as a sale for foreign currencies may also Abe made available to the
maximum extent practicable to eligible domestic recipients pursuant
to section 416 of the Agricultural Act of 1949, as amended (7 U.S.C.
1431), or to needy persons within the United States pursuant to
clause (2) of section 32 of the Act of August 24, 1935, as amended
(7 U.S.C. 612c). Section 416 of the Agricultural Act of 1949, as
amended (7 U.S.C. 1431), is amended by inserting "whether in private
stocks or" after "commodities" the first time that word appears.
SEC. 403. RESPONSrBILITrES IN GERMANY.-The President is hereby
authorized to use during the fiscal year [1960] 1961 not to exceed
[ 7,500,000] $6,750,000 of the funds made available pursuant to sec-
tion 400(a) of this Act in order to meet the responsibilities or objec-
tives of the United States in Germany, including West Berlin. In
carrying out this section, the President may also use currency which
has been or may be deposited in the GAR.IOA (Government and
Relief in Occupied Areas) Special Account, including that part of the
German currency now or hereafter deposited under the bilateral agree-
ment of December 15, 1949, between the United States and the Fed-
eral Republic of Germany (or any supplementary or succeeding agree-
ment) which, upon approval by the President, shall be deposited in
the GARIOA Special Account under the terms of article V of that
agreement. The President may use the funds available for the pur-
poses of this section on such terms and conditions as he may specify,
and without regard to any provision of law which he determines must
be disregarded.
SEC. 404. INDUS BASIN DEVELOPMENT.-TheGionaress of the United
States welcomes the progress made through the good offices of the Interna-
tional Bank for Reconstruction and Development toward the development
of the Indus Basin through a program of cooperation among south Asian
and other nations of the free world in order to promote economic growth
and political stability in south Asia, and a- rms the willingness of the
United States, pursuant to authorities contained in this and other Acts,
to participate in this significant undertaking. In the event that funds
appropriated pursuant to this Act are made available to be used by or
Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
 Approved For Release 2003/10/16: CIA-RpPR~,-$g2~5R000300200001-5
THE MUTUAL SECURITY A T
under the supervision of the International Bank for Reconstruction and
Development in furtherance of the foregoing. purposes, such funds may be
used in accordance with requirements, standards, or procedures estab-
lished by the Bank concerning completion of plans and cost estimates and
determination of feasibility, rather than with requirements, standards, or
procedures concerning such matters set forth in this or other Acts; and
such funds may also be used without regard to the provisions of section
901 (b) of the Merchant Marine Act of 1936, as amended (46 U.S.C.
1241), whenever the President determines that such provisions cannot be
fully satisfied without seriously impending or preventing accomplishment
of such purposes.
SEC. 405. MIGRANTS, REFUGEES, AND ESCAPEES.--(a) The Presi-
dent is hereby authorized to continue membership for the United
States on the Intergovernmental Committee for European Migration
in accordance with its constitution approved in Venice, Italy, on
October 19, 1953. For the purpose of assisting in the movement of
migrants, there is hereby authorized to be appropriated such amounts
as may be necessary from time to time for the payment by the United
States of its contributions to the Committee and all necessary salaries
and expenses incident to United States participation in the Committee.
(b) Of the funds made available under this Act, not more than
$800,000 may be used by the President to facilitate the migration to
the other American. Republics of persons resident in that portion of
the Ryukyu Island Archipelago under United States control.
(c) There is hereby authorized to be appropriated for the fiscal
year [1960] 1961 not to exceed $1,100,000 for contributions to the
program of the United Nations High Commissioner for Refugees for
assistance to refugees under his mandate.
(d) There is hereby authorized to be appropriated to the President
for the fiscal year [1960] 1961 not to exceed [$5,200,000] $3,500,000
for continuation of activities, including care, training, and resettle-
ment, which have been undertaken for selected escapees under section
451 of this Act.
SEC. 406. CHILDREN'S WELFARE.-There is hereby authorized to be
appropriated not to exceed $12,000,000 for the fiscal year [1960] 1961
for contributions to the United Nations Children's Fund.
SEC. 407. PALESTINE REFUGEES IN THE NEAR EAST.-There is
hereby authorized to be appropriated to the President for the fiscal
year [1960] 1961 not to exceed [$25,000,000] $22,000,000 to be used
to make contributions to the United Nations Relief and Works
Agency for Palestine Refugees in the Near East [: Provided, That of
the funds appropriated pursuant to this section 10 per centum shall be
available only for repatriation or resettlement of such refugees].
After January 1, 1961, United States contributions shall not be used for
programs of relief which heretofore have been administered on the basis of
ration cards except for refugees whose need and eligibility for relief have
been certified after July 1, 1960. The provisions of section 54$, which
relate to the availability of unexpended balances, shall not be applicable to
unobligated balances of any funds heretofore or hereafter appropriated
pursuant to this section. The President shall include in his recommenda-
tions to the Congress for fiscal year 1962 programs under this Act specific
recommendations with respect to a program for the progressive repatria-
tion and resettlement of refugees and for reducing United States contribu-
tions to the United Nations Relief and Works Agency for Palestine
Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
 Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
THE MUTUAL SECURITY ACT OF 1960 47
Refugees in the Near East. In determining whether or not to continue
furnishing assistance for Palestine refugees in the Near East, the
President shall take into account whether Israel and the Arab host
governments are taking steps toward the resettlement and repatria-
tion of such refugees. Phenever the President shall determine that it
would more effectively contribute to the relief, rehabilitation, and
resettlement of Palestine refugees in the Near East, he may expend
any part of the funds made available pursuant to this section through
any other agency he may designate.
SEC. 409. OCEAN FREIGHT CHARGES.-(a) In order to further the
efficient use of United States voluntary contributions for relief and
rehabilitation in nations and areas eligible for assistance under this
Act, the President may pay ocean freight charges from United States
ports to designated ports of entry of such nations and areas, or, in the
case of such nations and areas which are landlocked, transportation
charges from the United States ports to designated points of entry in such
nations and areas, on shipments by United States voluntary nonprofit
relief agencies registered with and approved by the Advisory Com-
mittee on Voluntary Foreign Aid and shipments by the American
Red Cross.
(b) Where practicable the President shall make arrangements with
the receiving nation for free entry of such shipments and for the making
available by that nation of local currencies for the purpose of defray-
7 the transportation cast of such shipments from the port of entry
the receiving nation to the designated shipping point of the con-
signee.
(c) There is hereby authorized to be appropriated to the President
for the fiscal year [1960] 1961 not to exceed [$2,300,000] $2,000,000
to carry out the purposes of this section.
`(d) In addition, any funds made available under this Act may be
used, in amounts determined by the President, to pay ocean freight
charges on shipments of surplus agricultural commodities, including
commodities made available pursuant to any Act for the disposal
abroad of United States agricultural surpluses.
SEC. 411. ADMINISTRATIVE AND OTHER EXPENSES.-(a) Whenever
possible, the expenses of administration of this Act shall be paid for
in the currency of the nation where the, expense is incurred.
(b) There is hereby authorized to be appropriated to the President
for the fiscal year [1960] 1961 not to exceed [$39,500,000]
$40,000,000 for necessary administrative expenses incident to carrying
out the provisions of this Act (other than chapter I and title II of
chapter II) and functions under the Agricultural Trade Development
and Assistance Act of 1954, as amended (7 U.S.C. 1691 and the
following) performed by any agency or officer administering non-
military assistance.
(c) There are authorized to be appropriated [to] for expenses of the
Department of State such amounts as may be necessary from time to
time for administrative expense which are incurred for functions of the
Department under this Act or for normal functions of the Department
which relate to functions under this Act, and for expenses of carrying
out the objectives of the Mutual Defense Assistance Control Act of
1951 (22 U.S.C. 1611) : Provided, That, in addition, funds made.
Approved for Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
 Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
48 THE MUTUAL SECURITY ACT OF 1960
available for carrying out chapter I of this Act shall be available for
carrying out the objectives of the Mutual Defense Assistance Control
Act of 1951 in such amounts as the President may direct.
(d) Funds made available for the purposes of this Act may be used
for compensation, allowances, and travel of personnel, including
Foreign Service personnel whose services are utilized primarily for the
purposes of this Act, and without regard to the provisions of any other
law, for printing and binding, and for expenditures outside [the
continental limits of] the United States for the procurement of supplies
and services and for other administrative and operating purposes
(other than compensation of personnel) without regard to such laws
and regulations governing the obligations and expenditure of Govern-
ment funds as may be necessary to accomplish the purposes of this
Act.
SEC. 419. ATOMS FOR PEAcE.-(a) The President is hereby author-
ized to furnish from funds made available pursuant to this section, in
addition to other funds available for such purposes, and on such terms
and conditions as he may specify, assistance designed to promote the
peaceful uses of atomic energy abroad. There is hereby authorized
to be appropriated to the President for the fiscal year [1960] 1961 not
to exceed [$6,500,000] $3,400,000 to carry out the purposes of this
section.
(b) The United States share of the cost of any research reactor made
available to another government under this section shall not exceed
$350,000.
(c) In carrying out the purposes of this section, the appropriate
United StatesVdepartments and agencies shall give full and continuous
publicity through the press, radio, and all other available mediums,
so as to inform the peoples of the participating countries regarding
the assistance, including its purpose, source, and character, furnished
by the United States. Such portions of any research reactor furnished
under this section as may be appropriately die-stamped or labeled as
a product of the United States shall be so stamped or labeled.
* * * * * * *
CHAPTER III-CONTINGENCY FUND
SEC. 451. PRESIDENTS SPECIAL AUTHORITY AND CONTINGENCY
FUND.-(a) Of the funds made available for use under this Act, not
to exceed $150,000,000, in addition to the funds authorized for use
under this subsection by subsection (b) of this section, may be used
in any fiscal year, without regard to the requirements of this Act or
any other Act for which funds are authorized by this Act or any Act
appropriating funds for use under this Act, in furtherance of any of
the purposes of such Acts, when the President determines that such
use is important to the security of the United States. Not to exceed
$100,000,000 of the funds available under this subsection may be ex-
pended for any selected persons who are residing in or escapees from
the Soviet Union, Poland, Czechoslovakia, Hungary, Rumania, Bul-
garia, Albania, Lithuania, Latvia, and Estonia or the Communist-
domina.ted or Communist-occupied areas of Germany, or any Com-
munist-dominated or Communist-occupied areas of Asia and any other
countries absorbed by the Soviet Union, either to form such persons
Approved For Release 2003/10/16 : CIA-RDP91-00965R000?00200001-5
 Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
THE MUTUAL SECURITY ACT OF 1960 49
into elements of the military forces supporting the North Atlantic
Treaty Organization or for other purposes, when the President, deter-
mines that such assistance will contribute to the defense of the North
Atlantic area or to the security of the United States. Certification
by the President that he has expended amounts under this Act,not in
excess of $50,000,000, and that it is inadvisable to specify the nature
of such expenditures, shall be deemed a sufficient voucher for such
amounts. Not more than $30,000,000 of the funds available under
this subsection may be allocated to any one nation in any fiscal year.
(b) There is hereby authorized to be appropriated to the President
for the fiscal year [1960] 1961 not to exceed [$155,000,000]
$175,000,000 for assistance authorized by this Act, other than by
title II of chapter II, in accordance with the provisions of this Act
applicable to the furnishing of such assistance. $100,000,000 of the
funds authorized to be appropriated pursuant to this subsection for
any fiscal year may be used in such year in accordance with the pro-
visions of subsection (a) of this section.
(c) It is the purpose of this Act to advance the cause of freedom.
The Congress joins with the President of the United States in pro-
claiming the hope that the peoples who have been subjected to the
captivity of Communist despotism shall again enjoy the right of self-
determination within a framework which will sustain the peace; that
.they shall again have the right to choose the form of government
under which they will live, and that sovereign rights of self-govern-
ment shall be restored to t'iem all in accordance with the pledge of
the Atlantic Charter. Funds available under subsection (a) of this
section may be used for programs of information, relief, exchange of
persons, education, ' and resettlement, to encourage the hopes and
aspirations of peoples who have been enslaved by communism.
CHAPTER IV-GENERAL AND ADMINISTRATIVE PROVISIONS
SEC. 501. TRANSFERABILITY OF FUNDS.-Whenever the President
determines it to be necessary for the purposes of this Act, not to exceed
10 per centum. of the funds made available pursuant to any provision
of this Act may be transferred to and consolidated with the funds made
available pursuant to any other provisions of this Act, and may be
used for any of the purposes for which such funds may be used, except
that the total in the provision for the benefit of which the transfer is
made shall not be increased by.more than 20 per centum of the amount
made available for such provision pursuant to this Act.
SEC. 502. USE OF FOREIGN CURRENCY.-(a) Notwithstanding sec-
tion 1415 of the Supplemental Appropriation Act, 1953, or any other
provision of law, proceeds of sales made under section 550 of the
Mutual Security Act of 1951, as amended, shall remain available and
shall be used for any purposes of this Act, giving particular regard to
the following purposes-
(1) for providing military assistance to nations or mutual
defense organizations eligible to receive assistance under this
Act;
(2) for purchase of goods or services in friendly nations;
(3) for loans, under applicable provisions of this Act, to in-
crease production of goods or services, including strategic ma-
terials, needed in any nation with which an agreement was
Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
 Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
50 THE MUTUAL SECURITY ACT OF 1960
negotiated, or in other friendly nations, with the authority to --use
currencies received in repayment for the purposes stated in this
section or for deposit to the general account of the Treasury of
the United States;
(4) for developing new markets on a mutually beneficial basis;
(5) for grants-in-aid to increase production for domestic needs
in friendly countries; and
(6) for purchasing materials for United States stockpiles.
(b) Notwithstanding section 1415 of the Supplemental Appropria-
tion Act, 1953, or any other provision of law, local currencies owned
by the United States shall be made available to appropriate committees
of the Congress engaged in carrying out their duties under section136
of the Legislative Reorganization Act of 1946, as amended, and to the
Joint Committee on Atomic Energy and the Joint Economic Com-
mittee and the Select. Committees on Small Business of the Senate
and House of Representatives for their local currency expenses:
Provided, That each member or employee of any such committee
shall make, to the chairman of such committee in accordance with
regulations prescribed by such committee, an itemized report showing
the amounts and dollar equivalent values of each such foreign cur-
rency expended, together with the purposes of the expenditure,
including lodging, meals, transportation, and other purposes. Within
the first sixty days that Congress is in session in each calendar year,
the chairman of each such committee shall consolidate the reports of
each member and employee of the committee and forward said con-
solidated report showing the total itemized expenditures of the com-
mittee and each subcommittee thereof during the preceding calendar
year, to the Committee on House Administration of the House of
Representatives (if the committee be a committee of the House of
Representatives or a joint committee whose funds are disbursed by
the Clerk of the House) or to the Committee on Appropriations of the
Senate (if the committee be a Senate committee or a joint committee
whose funds are disbursed by the Secretary of the Senate). Each
such report submitted by each committee shall be published in the
Congressional Record within ten legislative days after receipt by the
Committee on House Administration of the House or the Committee
on Appropriations of the Senate.
(c) Notwithstanding section 1415 of the Supplemental Appropriation
Act, 1953, or any other provision of law, if the President finds that
participation by the United States in an internationally financed program
to preserve the great cultural monuments of the Upper Nile would promote
the foreign policy of the United States he may, subject to the approval
of the Congress, use or enter into agreements with friendly nations or
organizations of nations to use, for this purpose, foreign currencies
owned by the United States which have been generated under this Act or
under the Agricultural Trade Development and Assistance Act of 1954,
as amended, in the countries in which the program is to be carried out,
but the value of foreign currencies so used shall not exceed an amount
equal to 331% per centum of the total cost of such program.
SEC. 504. SMALL BUSINESS.-(a) Insofar as practicable and to the
maximum extent consistent with the accomplishment of the purposes
of this Act, the President shall assist, American small business to
Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
 Approved For Release 2003/10/16 : CIA-RDP91-00965R000300 00001-5
THE MUTUAL SECURITY ACT OF 1960 51
participate equitably in the furnishing of commodities and services
financed with funds authorized under chapter II of this Act-
(1) by causing to be made available to suppliers in the United
States and particularly to small independent enterprises, infor-
mation, as far in advance as possible, with respect to purchases
proposed to be financed with such funds.
(2) by causing to be made available to prospective purchasers
in the nations receiving assistance under this Act information
as to commodities and services produced by small independent
enterprises in the United States, and
(3) by providing for additional services to give small business
better opportunities to participate in the furnishing of com-
modities and services financed with such funds.
(b) There shall be an Office of Small Business, headed by a Special
Assistant for Small Business, in such United States Government
Agency as the President may direct, to assist in carrying out the
provisions of subsection (a) of this section.
(c) The Secretary of Defense shall assure that there is made avail-
able to suppliers in the United States, and particularly to small
independent enterprises, information with respect to purchases made
by the Department of Defense pursuant to chapter I, such informa-
tion to be furnished as far in advance as possible.
[(d) Of the funds appropriated pursuant to section 451(b) of this
Act, the President is authorized to utilize not to exceed $2,500,000 for
the fiscal year 1.960 to make available. to foreign small business con-
cerns in underdeveloped countries, or to foreign government organiza-
tions established for the purpose of helping such concerns in under-
developed countries, on such terms and conditions as he may de-
termine, machine tools, industrial equipment, and other equipment
owned by agencies of the United States Government.]
SEC. 505. LOAN ASSISTANCE AND SALES.-(a) Except as otherwise
specifically provided in this Act, assistance under this Act may be
furnished on a grant basis or on such terms, including cash, credit, or
other terms of repayment (including repayment in foreign currencies
or by transfer to the United States of materials required for stockpiling
or other purposes) as may be determined to be best suited to the
achievement of the purposes of this Act and shall emphasize loans
rather than grants wherever possible. Commodities, equipment, and
materials transferred to the United States as repayment may be used for
assistance authorized by this Act, other than title II of chapter II, in
accordance with the provisions of this Act applicable to the furnishing
of such assistance. Whenever commodities, equipment, materials, or
services are sold for foreign currencies the President, notwithstanding
section 1415 of the Supplemental Appropriation Act, 1953, or any
other provision of law, may use or enter into arrangements with
friendly nations or organizations of nations to use such currencies for
the purposes for which the funds providing the commodities, equip-
ment, materials, or services which generated the currencies were
appropriated.
(b) Funds for the purpose of furnishing assistance on terms of
repayment may be allocated to the Export-Import Bank of Wash-
ington, which may, notwithstanding the provisions of the Export-
Import Bank Act of 1945 (59 Stat. 526), as amended, make and
administer the credit on such terms. Credits made by the Export-
Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
 Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
52 THE MUTUAL SECURITY ACT OF 1960
Import Bank of Washington with funds so allocated to it shall not be
considered in determining whether the Bank has outstanding at any
one time loans and guaranties to the extent of the limitation imposed
by section 7 of the Export-Import Bank Act of 1945 (59 Stat. 529), as
amended. United States dollars received in repayment of principal
and payment of interest on any loan made under this section shall be
deposited in miscellaneous receipts of the Treasury. Foreign cur-
rencies received in repayment of principal and payment of interest on
any such loan which are in excess of the requirements as determined
from time to time by the Secretary of State for purposes authorized
in section 32(b) (2) of the Surplus Property Act of 1944, as amended
(50 App. U.S.C. 1641(b)), may be sold by the Secretary of the Treasury
to United States Government agencies for payment of their obligations
abroad and the United States dollars received as reimbursement shall
also be deposited into miscellaneous receipts of the Treasury. Foreign
currencies so received which are in excess of the requirements of the
United States in the payment of its obligations abroad, as such require-
ments may be determined from time to time by the President, shall
be credited to and be available for the authorized purposes of the
Development Loan Fund in such amounts as may be specified from
time to time in appropriation Acts. Amounts received in repayment
of principal and interest on any credits made under paragraph
111(c) (2) of the Economic Cooperation Act of 1948, as amended, shall
be deposited into miscellaneous receipts of the Treasury, except that,
to the extent required for such purpose, amounts received in repay-
ment of principal and interest on any credits made out of funds
realized from the sale of notes heretofore authorized to be issued for
the purpose of financing assistance on a credit basis under paragraph
111(c) (2) of the Economic Cooperation Act of 1948, as amended,
shall be deposited into the Treasury for the purpose of the retirement
of such notes.
SEC. 513. NOTICE TO LEGISLATIVE COMMITTEES.-When any trans-
fer is made under section 501, or any other action is taken under this
Act which will result in furnishing assistance of a kind, for a purpose,
or to an area, substantially different from that included in the pres-
entation to the Congress during its consideration of this Act or Acts
appropriating funds pursuant to authorizations contained in this Act
or which will result in expenditures greater by 50 per centum or more
than the proposed expenditures included in such presentation for the
program concerned, the President or such officer as he may designate
shall promptly notify the Committee on Foreign Relations and, when
military assistance is involved, the Committee on Armed Services of
the Senate, and the Speaker of the House of Representatives, stating
the justification for such changes. Notice shall also be given to the
Committee on Foreign Relations of the Senate and the Speaker of
the House of Representatives of any determination under the first
sentence of section 451 (except with respect to unvouchered funds)
and under the last clause of the second sentence of section 404, and copies
of any certification as to loyalty under section 531 shall be filed with
them.
Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
 Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
THE' MUTUAL SECURITY ACT OF. 1960 53
SEC. 523. COORDINATION WITH FOREIGN POLICY.-(a) Nothing
contained in this Act shall be construed to infringe upon the powers
or functions of the Secretary of State.
(b) The President shall prescribe appropriate procedures to assure
coordination among representatives of the United States Government
in each country, under the leadership of the Chief of the United States
Diplomatic Mission. The Chief of the Diplomatic Mission shall make
sure that recommendations of such representatives pertaining to mili-
tary assistance are coordinated with political and economic considera-
tions, and his comments shall accompany such recommendations if he
so desires.
(c) Under the direction of the President, the Secretary of State
shall be responsible for the continuous supervision and general direc-
tion of the assistance programs authorized by this Act, including but
not limited to determining whether there shall be a military assistance
program for a country and the value thereof, to the end that such
programs are effectively integrated both at home and abroad and the
foreign policy of the United States is best served thereby.
(d) Whenever the Chief of the United States diplomatic mission in a
country determines that the achievement of United States foreign policy
objectives there requires it, he may issue regulations of uniform applica-
bility to all officers and employees of the United States Government and
of contractors with the United States Government governing the extent to
which their pay and allowances received in that country shall be paid in
local currency. Notwithstanding any other law, United States Govern-
ment agencies are authorized and directed to comply with such regulations.
* * * * *
SEC. 52.7. EMPLOYMENT OF PERSONNEL.-(a) Any United States
Government agency performing functions under this Act is authorized
to employ such personnel as the President deems necessary to carry
out the provisions and purposes of this Act.
(b) Of the personnel employed in the United States on programs
authorized by this Act, not to exceed [seventy] seventy-six may be
compensated without regard to the provisions of the Classification
Act of 1949, as amended, of whom not to exceed [forty-five] fifty-one
may be compensated at rates higher than those provided for grade 15
of the general schedule established by the Classification Act of 1949, .
as amended, and of these, not to exceed fifteen may be compensated
at a rate in excess of the highest rate provided for grades of such
general schedule but not in excess of $19,000 per annum. ' Such
positions shall be in addition to those authorized by law to be filled
by Presidential appointment, and in addition to the number author-
ized by section 505 of the Classification Act of 1949, as amended.
One of the offices established by section 1(d) of Reorganization Plan
Numbered 7 of 1953 may, notwithstanding the provisions of any other
law, be compensated at a rate not in excess of $20,000 per annum.
(c) For the purpose of performing functions under this Act outside
[the continental limits of] the United States, the [Director] President
may-
(1) employ or assign persons, or authorize the employment
or, assignment of officers or employees of other United States
Government agencies, who shall receive compensation at any of
the rates- provided for the Foreign Service Reserve and Staff by
Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
 ApproCv~~ed For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
54 THE MUTUAL SECURITY ACT OF 1960
the Foreign Service Act of 1946, as amended (22 U.S.C. 801),
together with allowances and benefits established thereunder
including, in all cases, post differentials prescribed under. section
443 of the Foreign Service Act; and persons so employed or as-
signed shall be entitled, except to the extent that the President
may specify otherwise in cases in which the period of the employ-
ment or assignment exceeds thirty months, to the same benefits
as are provided in section 528 of the Foreign Service Act for
persons appointed to the Foreign Service Reserve and, except for
policymaking officials, the provisions of section 1005 of the
Foreign Service Act shall apply in the case of such persons; and
(2) utilize such authority, including authority to appoint
and assign personnel for the duration of operations under this Act,
contained in the Foreign Service Act of 1946, as amended (22
U.S.C. 801), as the President deems necessary to carry out func-
tions under this Act. Such provisions of the Foreign Service
Act as the President deems appropriate shall apply to personnel
appointed or assigned under this paragraph, including, in all
cases, the provisions of sections 443 and 528 of that Act: Provided,
however, That the President may by regulation make exceptions
to the application of section 528 in cases in which the period of
the appointment or assignment exceeds thirty months: Provided
further, That Foreign Service Reserve Officers appointed or assigned
pursuant to this paragraph shall receive in-class promotions in
accordance with such regulations as the President may prescribe.
(d) For the purpose of performing functions under this Act outside
[the continental limits of] the United States, the Secretary of State
may[, at the request of the Director,] appoint for the duration of
operations under this Act alien clerks and employees in accordance
with applicable provisions of the Foreign Service Act of 1946, as
amended (22 U.S.C. 801).
(e) Notwithstanding the provisions of title 10, United States
Code, section 712, or any other law containing similar authority,
officers and employees of the United States performing functions
under this Act shall not accept from any foreign nation any compensa-
tion or other benefits. Arrangements may be made by the President
with such nations for reimbursement to the United States or other
sharing of the cost of performing such functions.
SEC. 530. EXPERTS AND CONSULTANTS OF ORGANIZATIONS
THEREOF.-(a) Experts and consultants or organizations thereof, as
authorized by section. 15 of the Act of August 2, 1946 (5 U.S.C. 55a),
may be employed by any United States Government agency for the
performance of functions under this Act, and individuals so employed
may be compensated at rates not in excess of $75 per diem, and while
away from their homes or regular places of business, they may be
paid actual travel expenses and per diem in lieu of subsistence and
other expenses at a rate not to exceed $10 or at the applicable rate
prescribed in the Standardized Government Travel Regulations, as
-amended from time to time, whichever is higher, while so employed
within [the continental limits ofi the United States and at the
applicable rate prescribed in the Standardized Government Travel
Regulations (Foreign Areas) while so employed outside [the conti-
Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
 Approved For Release 2003/10/16 : CIA-RDP91-00965R0003002Q0.001-5
THE MUTUAL SECURITY ACT OF 1960'
rental limits of] the United States: Provided, That contracts for such
em loyment.with: such orgamzat.on.s maybe renewed annually..
b) Persons of outstanding experience and ability may be employed
without compensation by any United States Government agency for
the performance of functions under this Act in accordance with the
provisions of section 710(b) of the Defense Production Act of 1950, as
amended (50 U.S.C. App. 2160), and regulations issued thereunder.
* * * * * * *
SEC. 534. REPORTS.-(a) The President, from time to time while
funds appropriated for the purpose of this Act continue to be available
for obligation, shall transmit to the Congress reports covering each
[six months] fiscal year of operations in furtherance of the purposes
of this Act, except information the disclosure of which he deems incom-
patible with the security of the United States. Reports provided for
under this section shall be transmitted to the Secretary of the Senate
or the Clerk of the House of Representatives, as the case may be, if
the Senate or the House of Representatives, as the case may be, is not
in session. Such reports shall include detailed information on the
implementation of sections 504, 202, 400, 416, 413(b), and 418 of this
Act.
(b) All documents, papers, communications, audits, reviews, find-
ings, recommendations, reports, and other material which relate to
the operation or activities of the International Cooperation Admin-
istration shall be furnished to the General Accounting Office and to
any committee of the Congress, or any duly authorized subcommittee
thereof, charged with considering legislation or appropriation for, or
expenditures of, such Administration, upon request of the General
Accounting Office or such committee or subcommittee as the case
may be.
SEC. 537. PROVISIONS ON USES or FUNDS.-(a) Appropriations for
the purposes of this Act (except for chapter 1), allocations to any
United States Government agency, from other appropriations, for
functions directly related to the purposes of this Act, and funds made
available for other purposes to any agency administering nonmilitary
assistance, shall be available for-
(1) rents in the District of Columbia;
(2) expenses of attendance at meetings concerned with the
purposes of such appropriations, including (notwithstanding the
provisions of section 9 of the Act of March 4, 1909 (31 U.S.C.
673)) expenses in connection with meetings of persons whose
employment is authorized by section 530 of this Act;
(3) [employment of aliens, by contract, for services abroad]
contracting with individuals for personal services abroad: Provided,
That such individuals steal not be regarded as employees of the
United States for the purpose of any law administered by the Civil
Service Commission;
(4) purchases, maintenance, operation, and hire of aircraft:
Provided, That aircraft for administrative purposes may be pur-
chased only as specifically provided for in an appropriation or
other Act;
(5) purchase and hire of passenger motor vehicles: Provided,
That. except as may otherwise. be provided in an appropriation
Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
 Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
56 THE' MUTUAL SECURITY ACT ; O . LO B,&
or other Act, passenger motor vehicles abroad for administrative
purposes may be purchased for replacement only and.such vehicles
may be exchanged or sold and replaced by an equal number of
such vehicles and the cost, including exchange allowance, of each
such replacement shall not exceed $3,5.00 in the case of an auto-
mobile for the chief of any special mission or staff abroad estab-
lished under section 526 of this Act: Provided farther, That
passenger motor vehicles may be purchased for use in the [con-
tinental] United States only as may be specifically provided in
an appropriation or other Act;
(6) entertainment within the United States (not to exceed
$15,000 in any fiscal year except as may otherwise be provided
in an appropriation or other Act) ;
(7) exchange of funds without regard to section 3651 of the
Revised Statutes (31 U.S.C. 543), and loss by exchange;
(8) expenditures (not to exceed $50,000 in any fiscal year except
as may otherwise be provided in an appropriation or other Act)
of a confidential character other than entertainment: Provided,
That a certificate of the amount of each such expenditure, the
nature of which it is considered inadvisable to specify, shall be
made by an officer administering nonmilitary assistance, or such
person as he may designate, and every such certificate shall be
deemed a sufficient voucher for the amount therein specified;
(9) insurance of official motor vehicles in foreign countries;
(10) rental or lease outside [the continental limits of] the
United States of offices, buildings, grounds, and living quarters
to house personnel; maintenance, furnishings, necessary repairs,
improvements, and alterations to properties owned or rented by
the United States Government abroad; and costs of fuel, water
(11) actual. expenses of preparing and transporting to their
former homes in the United States, or elsewhere, and of care and
disposition of, the remains of persons or member of the families
of persons who may die while such persons are away from their
homes participating in . activities carried out with funds covered
by this subsection (a);
(12) purchase of uniforms;
(13) payment of per, diem in lieu of subsistence to foreign par-
ticipants engaged in any program of furnishing technical informa-
tion and assistance, while such participants are away from their
homes in countries other than the [continental] United States,
at rates not in excess of those prescribed by the Standardized
Government Travel Regulations, notwithstanding any other pro-
vision of law;
(14) expenses authorized by the Foreign Service Act of 1946, as
amended (22 U.S.C. 801 and the following), not otherwise pro-
vided for;
(15) ice and drinking water-for use abroad;
(16) services of commissioned officers of the Public Health
Service and of the Coast and Geodetic Survey, and for the pur-
poses of providing such services the Public Health Service may
appoint not to exceed twenty officers in the regular corps to
grades above that of- senior, assistant, but not above.,that of
director, as otherwise authorized in? accordance with section 711
Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
 Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
~'TH MtTTUAL ',SEctrELITY .ACT;"OF 1'9&0 57
of 'the'Act of July 1, 1944, as amended (42 U.S.C. 211a), and the
Coast and Geodetic Survey may appoint for such purposes not to
exceed twenty commissioned officers in addition to those other-
wise authorized.
(17). expenses in connection with travel of personnel outside
the [continental] United States, including travel expenses of
dependents (including expenses during necessary stopovers ,.-while
engaged in such travel), and transportation of personal effects,
household goods, and automobiles of such personnel when any
part of such travel or transportation begins in one fiscal year
pursuant to travel orders issued in that fiscal year, notwithstand-
ing the fact that such travel or transportation may not be com-
pleted during that same fiscal year, and cost of transporting to
and from a place of storage, and the cost of storing, the furniture
and household and personal effects of any employee (i) for not to
exceed three months after first arrived at a new post, (ii) when an
employee is assigned to a post to which he cannot take, or at
which he is unable to use, his furniture and household and per-
sonal effects, (iii) when such storage would avoid the cost of trans-
porting such furniture and effects from one location to another,
(iv) when lie is temporarily absent from his post under orders,
or (v) when through no fault of the employee, storage costs are
incurred on such furniture and effects (including automobiles) in
connection with authorized travel, under such regulations as an
officer administering nonmilitary assistance, or such person as he
may designate, may prescribe;
(18) payment of unusual expenses incident to the operation
and maintenance of official residences for chiefs of special mis-
sions or staffs serving in accordance with section 526 of this Act.
(b) United States Government agencies are authorized to pay the
costs of health and accident insurance for foreign participants in any
exchange-of-persons program or any program, of furnishing technical
information and assistance administered by any such agency while
uch participants are. en route or absent from their homes for purposes
of participation in any such program.
(c) Notwithstanding the provisions of section 406(a) of Public Law
85-241, not to exceed $27,750,000, of the funds available for assistance
in Korea under this Act may be used by the President to construct or
'otherwise acquire essential living' quarters, office space, and supporting
facilities in Korea for use by _personnel carrying out activities under
this Act, and not to exceed [$2,750,000] $4,260,000 of funds made
available for assistance in other countries under this Act may be used
(in addition to funds available for such use under other authorities in
this Act) for construction or acquisition of such facilities for such
purposes elsewhere.
(d) Funds made available under section 400 (a) may be used for
expenses (other than those provided for under section 411 (b) of this
Act) to assist in carrying out functions under the Agricultural Trade
Development and Assistance Act-of. 1954, as amended (7 U.S.C. 1691
an& the following), delegated or assigned to. any agency or officer
Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
 Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
58 THE MUTUAL SECURITY ACT OF 1960
AGRICULTURAL TRADE DEVELOPMENT AND ASSISTANCE
ACT OF 1954, AS AMENDED
* * * * * * *
TITLE I-SALES FOR FOREIGN CURRENCY
* * *
SEC. 104. Notwithstanding section 14:15 of the Supplemental Ap-
propriation Act, 1953, or any other provision of law, the President
may use or enter into agreements with friendly nations or organizations
of nations to use the foreign currencies-which accrue under this title
for one or more of the following purposes:
(a) To help develop new markets for United States agricultural
commodities on a mutually benefiting basis. From sale proceeds and
loan repayments under this title not less than the equivalent of 5 per
centum of the total sales made under this title after the date of this
amendment shall be made available in advance for use as provided by
this subsection over such period of years as the Secretary of Agriculture
determines will most effectively carry out the purpose of this subsec-
tion: Provided, That no such funds shall be allocated under this
subsection after June 30, 1960, except as may be specified, from time-
to time, in appropriation acts. Particular regard shall be. given to
provide in sale and loan agreements for the convertibility of such
amount of the proceeds thereof as may be needed to carry out the-
purpose of this subsection in those countries which are or offer rea-
sonable potential of becoming dollar markets for United States agri-
cultural commodities. Notwithstanding any other provision of law,
if sufficient foreign currencies for carrying out the purpose of ;,this.
subsection in such countries are not otherwise available, agreements
may be entered into with such countries for the sale of surplus agricul-
tural commodities in such amounts as the Secretary of Agriculture
determines to be adequate and for the use of the proceeds to carry out
the purpose of this subsection;
(b) To purchase or contract to purchase, in such amounts as may
be specified from time to time in appropriation Acts, strategic or other
materials for a supplemental United States stockpile of such materials
.as the President may determine from time to time. Such strategic or
.other materials acquired under this subsection shall be placed in the
above-named supplemental stockpile and.. shall be released therefrom
only under the provisions of section 3 of the Strategic and Critical
Materials Stock Piling Act;
(c) To procure military equipment, materials, facilities, and services.
for tfhe common defense;
(d) For financing the purchase of goods or services for other friendly
.countries;
(e) For promoting balanced economic; development and trade among
nations, for which purposes not more than 25 per centum of the cur-
rencies received pursuant to each such agreement shall be available
through and under the procedures established by the Export-Import
Bank for loans mutually agreeable to said bank and the country with
which the agreement is made to United States business firms and
branches, subsidiaries, of affiliates of such firms for business develop-
ment and trade expansion in such countries and for loans to domestic
Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
 Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
THE MUTUAL SECURITY ACT OF 1960 59
or foreign firms for the establishment of facilities for aiding in the
utilization, distribution, or otherwise increasing the consumption of,
and markets for, United States agricultural products: Provided, how-
ever, That no such loans shall be made for the manufacture of any
products to be exported to the United States in competition with
products produced in the United States or for the manufacture or
production of any commodity to be marketed in competition with
United States agricultural commodities or the products thereof.
Foreign currencies may be accepted in repayment of such loans.
(f) To pay United States obligations abroad;
(g) For loans ~ to promote multilateral trade and economic develop
ment, made through established banking facilities of the friendly
nation from which the foreign currency was obtained or in any other
manner which the President may deem to be appropriate. Strategic
materials, services, or foreign currencies may be accepted in payment
of such loans;
(h) For the financing of international educational exchange activ-
ities under the programs authorized by section 32(b)(2) of the Surplus
Property Act of :1944, as amended (50 U.S.C. App. 1641(b)) and for
the financing in such amounts as may be specified from time to time
in appropriation acts of programs for the interchange of persons under
title II of the United States Information and Educational Exchange
Act of 1948, as amended (22 U.S.C. 1446). In the allocation of funds,
as among the various purposes set forth in this section, a special
effort shall be made to provide for the purposes of this subsection,
including a particular effort with regard to: (1) countries where
adequate funds are not available from other sources for such purposes,
and (2) countries where agreements can be negotiated to establish a
fund with the interest and principal available over a period of years
for such purposes, such special and particular effort to include the
setting aside of such amounts from sale proceeds and loan repayments,
under this title, not in excess of $1,000,000 a year in any one country
for a period of not more than five years in advance, as may be deter-
mined by the Secretary of State to be required for the purposes of this,
subsection.
(i) For financing the translation, publication, and distribution of
books and periodicals, including Government publications abroad:
Provided, That not more than $5,000,000 may be allocated for this.
purpose during any fiscal year.
(j) For providing assistance to activities and projects authorized by
section 203 of the United States Information and Educational Ex
change Act of 1948, as amended (22 U.S.C. 1448), but no foreign
currencies which are available under the terms of any agreement for
appropriation for the general use of the United States shall be used
for the purposes of this subsection (j) without appropriation therefor..
(k) To collect, collate, translate, abstract, and disseminate scientific
and technological information and to conduct research and support
scientific activities overseas including programs and projects of scien-
tific cooperation between the United States and other countries such
as coordinated research against diseases common to all of mankind
or unique to individual regions of the globe, and to promote and sup-
port programs of medical and scientific research, cultural and educa-
tional development, health, nutrition, and sanitation: Provided}
That foreign currencies, shall :be available for the purposes of this.
Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
 Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
60 THE MUTUAL SECURITY ACT OF" 1960
subsection (in addition to funds otherwise made available for such
purposes) only in such amounts as may be specified from time to. time
in appropriation Acts;
(1) For the acquisition by purchase, lease, rental or otherwise, of
sites and buildings and grounds abroad, for United States Government
use including offices, residence, quarters, community and other facili-
ties., and for construction, repair, alteration and furnishing of such
buildings and facilities: Provided, That foreign currencies shall be
available for the purposes of this subsection (in addition to funds
otherwise made available for such purposes) in such amounts as
may be specified from time to time in appropriation Acts;
(m) For financing in such amounts as may be specified from time to
time in appropriation Acts (A) trade fair participation and related
activities authorized by section 3 of the International Cultural Ex-
change and Trade Fair Participation Act of 1956 (22 U.S.C. 1992),
and (B) agricultural and horticultural fair participation and related
activities;
(n) For financing under the direction of the Librarian of Congress,
in consultation with the National Science Foundation and other
interested agencies, in such amounts as may be specified from time
to time in appropriation Acts, (1) programs outside the United States
for-the analysis and evaluation. of foreign books, periodicals, and other
materials to determine whether they would provide information of
technical or scientific significance in the United States and whether
such books, periodicals, and other materials are of cultural or educa-
tional significance; (2) the registry, indexing, binding, reproduction,
cataloging, abstracting, translating, and dissemination of books, peri-
odicals, and related materials determined to have such significance;
and (3) the acquisition of such books, periodicals, and other materials
and the deposit thereof in libraries and research centers in the United
States specializing in the areas to which they relate;
(o) For providing assistance, in such amounts as may be specified
from time to time in appropriation Acts, by grants or otherwise, in
the expansion or operation in foreign countries of established schools,
colleges, or universities founded or sponsored by citizens of the United
States, for the purpose of enabling such educational institutions to
carry on programs of vocational, professional, scientific, technological,
or general education;
(p) For supporting workshops in American studies or American
educational techniques, and supporting chairs in American studies;
(q) For assistance to meet emergency or extraordinary relief re-
quirements other than requirements for surplus food commodities:
Provided, That not more than a total amount equivalent to $5,000,000
may be made available for this purpose during any fiscal year;
(r) For financing the preparation, distribution, and exhibiting of
audiovisual informational and educational materials, including Gov-
ernment materials, abroad: Provided, That not more than a total
amount equivalent to $2,500,000 may be made available for this pur-
pose during any fiscal year, but nothing in this subsection shall limit
or affect the use of foreign currencies to finance the preparation, dis-
tribution, or exhibition of such materials in connection with trade
fairs and other market development activities under subsection (a):
Provided, however, That section 1415 of the Supplemental Appropria-
tion Act, 1953 shall apply to all foreign currencies used for grants
Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
 Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
THE MUTUAL SECURITY. ACT OF 1960 '6:1
under: subsections (d) and (c) and for payment of United States obli-
gations involving grants under subsection (f) and to not less than 10
per, centum of the foreign currencies which accrue under this title.:
Provided, however, That the President is authorized to waive such ap-
plicability of section 1415 in any case where he determines ; that it,
would be inappropriate or inconsistent with the purposes of this, title:
Provided, however, That no foreign currencies shall be available for the
purpose of subsection (p), except in such amounts as may be specified
from time to time in appropriation Acts[, and no foreign currencies
shall. be allocated under any provision of this Act after June 30, 1960,
for the purposes specified in subsections (k), (p), and (r), except in
such amounts as may be specified from time to time in "appropriation
Acts.]
TITLE 11-FAMINE RELIEF AND OTHER.., ASSISTANCE
SEC. 201. In order to enable the President to furnish emergency as-
sistance on behalf of the people of the United States to friendly peoples
in:meetirig famine or other urgent or extraordinary relief require-
ments, the Commodity Credit Corporation shall make available to
the President out of its stocks such surplus agricultural commodities
(as defined in section 106 of title I) as he may request, for transfer
(1) to any nation friendly to the United States in order to. meet famine
or other urgent or extraordinary relief requirements of such nation,
and (2) to friendly but needy populations without regard to the
friendliness of their government.
SEC. 202. [The] In order to facilitate the utilization of surplus agri-
cultural commodities in meeting the requirements q f needy peoples, and
in order to promote economic development in underdeveloped areas in
addition to that, which can be accomplished under title I of this Act, the
President may authorize the transfer on a grant basis of surplus agri-
cultural commodities from Commodity Credit Corporation stocks to
assist programs undertaken with friendly governments or through
voluntary relief agencies: Provided, That the President shall take
reasonable precaution that such transfers will not displace or interfere
with sales which might otherwise be made.
SEC. 203. Not more than $300,000,000 (including the Corporation's
investment in such commodities, plus any amount by. which transfers
made in the preceding calendar year have called or will call for ap-
propriations to reimburse the Commodity Credit Corporation in
amounts -less than could have been expended during such preceding
year under this title as in effect during such preceding year) shall be
expended in any calendar. year during the period January 1,1960; and
ending December 31, 1961, for all such transfers and for other costs
authorized by. this title. The President may make such transfers
through such agencies including intergovernmental organizations, in
such manner, and upon such terms and conditions as he deems ap-
propriate; he shall make use of the facilities of voluntary relief agencies
tothe`extent practicable. Such transfers may include deliveryf:o":b.
vessels in United States ports and, upon a determination by the Presi-
dent that its necessary to accomplish the purposes of this.title.or, of
section 416 of the Agricultural Act of 19.49, as amended, oceai-~.freight
charges from United States ports to designated ports of entry bxoad:
Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
 Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
,62 THE MUTUAL SECURITY ACT OF 1960
or, in the ease of landlocked countries, transportation from United States
ports to designated points of entry abroad, may be paid from funds avail-
-able to carry out this title on commodities transferred pursuant hereto
or donated under said section 416. Funds. required for ocean. freight
costs authorized under this title may be transferred by the Commodity
Credit Corporation to such other Federal agency as may be: designated
by the. President.
SEC. 204. No programs of assistance shall be undertaken under the
authority of this title after December 31, 1961.
'CHAPTER V-INTERNATIONAL COOPERATION IN HEALTH; COLOMBO
PLAN COUNCIL FOR TECHNICAL COOPERATION
. SEc..501. (a) The Congress of the United States recoggni&es that
large areas of the world are being ravaged by diseases and' other health
deficiencies which are causing widespread suffering, debility, and
death, and are seriously deterring the efforts of peoples in such areas
to develop their resources and productive capacities and to improve
their living conditions. The Congress also recognizes that interna-
tional efforts are needed to assist such peoples in bringing diseases and
other health deficiencies under control, in preventing their spread or
reappearance, and in eliminating their basic causes. Accordingly,
the Congress affirms that it is the policy of the United States to accel-
erate its efforts to encourage and support international cooperation
in programs directed toward the conquest of diseases and other health
deficiencies.
[(b). In order to carry out the purposes of subsection (a) of this
section and in order to plan logically for an orderly expansion of
United States support to international health activities, the President
is authorized to undertake, in cooperation directly with other govern-
ments, or indirectly through utilizing the resources and services of
the United. Nations and the Organization of American States or any
of their specialized agencies, programs and projects of research,
studies, field surveys, trials, and demonstrations to determine the
feasibility - of future intensive programs for reduction, coptrol,, or
eradication of disease problems of international importance Of the
funds. appropriated pursuant. to section 451(b) of the Mutual Security
Act of 1954, as amended, the sum of $2,000,000 shall be available to
,carry out the purposes of this section.]
PUBLIC LAW 174, 79TH CONGRESS
JOINT RESOLUTION Providing for membership of the United States in the
Food and Agriculture Organization of the United Nation,
Resolved by the Senate and -louse of Representatives of the United
States of America in Congress assembled, That the President is hereby
authorized to accept membership for the United States in the Food
Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
 Approved For R 1&; /1 &&rCI 4 pI 91198o65R00030060~0001-5
and Agriculture Organization of the United Nations (hereinafter
referred to as the "Organization") the Constitution of which is set
forth in appendix I of the First Report to the Governments of the
United Nations by the Interim Commission on Food and Agriculture,
dated August 1, 1944.
SEC. 2. There is hereby authorized to be appropriated, out of any
money in the Treasury not otherwise appropriated, a sum not exceed-
ing $625,000 during the first fiscal year of the Organization and such
.sums Enot exceeding $3,000,000] annually thereafter as may be
required for expenditure under the direction of the Secretary,of State,
for the payment by the United States of its proportionate share in
the expenses of the Organization: Provided, That the percentage con-
tribution of the United States to the total annual budget of the
Organization shall not exceed 33.33 per centum.
SEC. 3. In adopting this joint resolution, it is the sense of the
'Congress that the Government of the United States should use its
best efforts to bring about, as soon as practicable, the. integration of
the functions and the resources of the International Institute of
Agriculture with those of the Organization, in a legal and orderly
manner., to effect one united 'institution in such form as to provide
an adequate research, informational, and statistical service for the
industry of aoriculture.
SEC. 4. Unless Congress by law authorizes such action, neither the
President nor any person or agency shall on behalf of the United States
accept any amendment under paragraph 1 of article XX of the Con-
=stitution of the Organization involving any new obligation for the
United States.
SEC. 5. In adopting this joint resolution, the Congress does so with
the understanding that paragraph 2 of article XIII does not authorize
the Conference of the Organization to so modify the provisions of its
,Constitution as to involve any new obligation for the United States.
PUBLIC LAW 403, 80TH CONGRESS, AS AMENDED
JOINT RESOLUTION Providing for membership and participation by the
United States in the South. Pacific Commission and authorizing an appropria-
tion therefor.
SEC. 3. There is hereby authorized to be appropriated to the De-
partment of State, -out of any xhoney in the Treasury :.iot otherwise
appropriated-
(a) Not more than [$75,000] $100,000 annually for the payment
b~y the United States of its proportionate share of the expenses of the
Commission and its auxiliary and subsidiary bodies, as set. forth in
article XIV of the Agreement Establishing the South Pacific Com-
mission ;
(b) Such additional sums as may be needed for the payment of all
necessary expenses incident to participation by the United States in
the activities of the Commission, including salaries of the United
States Commissioners, their alternates, and appropriate staff, without
regard to the civil-service laws and the Classification Act of 1949, as
amended; personal services in the District of Columbia; services as
authorized by section 15 of Public Law 600, Seventy-ninth Congress;
under such rules and regulations as the Secretary of State may pre-
Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
 Approved For Release 203 / j9 8000300200001-5
0iE NLUT :., ....
scribe; allowances for living quarters, including heat, fuel, and- light
and cost-of-living allowances to persons temporarily stationed abroad;
hire of passenger motor vehicles and other local transportation; print-
ing and binding without regard to section 11 of the Act of March 1,
1919 (44 U.S.C. 111) ; and section 3709 of the Revised Statutes, as,
amended; and such other expenses as the Secretary of State finds
necessary to participation by the United. States in the activities of the
Commission : Provided, That the provisions of section 6 of the Act. of
July 30, 1946..(Public Law 565, Seventy-ninth Congress), and regula-.
tions thereunder, applicable to expenses incurred pursuant to that Act
shall be applicable to. any expenses incurred pursuant to. this para-
graph (b).
UNITED STATES INFORMATION AND EDUCATIONAL
EXCHANGE ACT OF 1948, AS AMENDED
TITLE II-INTERCHANGE OF. PERSONS, KNOWLEDGE
AND SKILLS
SEC. 201. (a) The Secretary is authorized to provide for 'inter-
changes on a reciprocal basis between the United States and other,
countries,of students, trainees, teachers,, guest instructors, professors,
and leaders in fields of specialized knowledge or skill and shall wherever
possible provide these interchanges by using the. services of existing
reputable agencies which are successfully engaged in such activity.
The Secretary may provide for, orientation courses and other appro-
priate services for. such persons. from. other countries upon their
arrival in the United States, and for such persons going to other
countries from the United States. When any country fails or refuses
to cooperate in such program on a basis of reciprocity the Secretary
shall terminate or limit -such program, with. respect to such country,
to the extent he deems to be advisable in the interests of. the United
States. The persons specified in this section shall be admitted as
nonimmigrants under section 101(a) (15) of the Immigration: and
Nationality Act, for. such time and under such-conditions as may be
prescribed by regulations promulgated by the Secretary of State and,
the Attorney General. A person admitted under this section who.
fails to maintain the status under which he, was admitted, or who fails
to depart, from. the United States at the expiration of the time for
which he was admitted, or who engages in activities of a political.
nature detrimental to the interests of the United States, or in activities.
not consistent with the security .f the United States, shall 'upon the
warrant of the Attorney General; be taken into custody and promptly
deported pursuant to sections 241, 2421 and 243 of the Immigration
and Nationality Act. Deportation- proceedings' under. this section
shall be summary and the findings of the Attorney General as to
matters of fact shall be conclusive. . Such persons shall not be,eligible
for suspension of deportation under section 244 of the ,Immigration
Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
 Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5
THE MUTUAL SECURITY ACT OF 1960 65
(b) No person admitted as an exchange visitor under this section
or acquiring exchange visitor status after admission shall be eligible
to apply for ail` immigrant visa, or for a nonimmigrant visa under
section 101 (a) (15) (11) of the Immigration and Nationality Act, or for
adjustment of status to that of an alien lawfully admitted for perma-
nent residence, until it is established that such person has resided and
been physically present in a cooperating country or countries for an
aggregate of at least two years following departure from the United
States: Provided, That upon request of an interested Government
agency and recommendation of the Secretary of State, the Attorney
General may waive such two-year period of residence abroad in the
case of any alien whose admission to the United States is found by the
Attorney General to be in the public interest: And provided further,
That the provisions of this paragraph shall apply only to those persons
acquiring exchange visitor status subsequent to the date of the enact-
ment hereof.
BOOKS AND MATERIALS
SEC. 202. The Secretary is authorized to provide for interchanges
between the United States and other countries of books and periodicals,
including government publications, for the translation of such writings,
and for the preparation, distribution, and interchange of other edu-
cational materials.
INSTITUTIONS
SEC. 203. The Secretary is authorized to provide for assistance to
schools, libraries, and community centers abroad, founded or spon-
sored by citizens of the United States, and serving as demonstration
centers for methods and practices employed in the United States.
In assisting any such schools, however, the Secretary shall exercise
no control over their educational policies and shall in no case furnish
assistance 'of. any character which is not, yin keeping with the. free
democratic principles and the established foreign policy of the United
States.
ASSISTANCE TO STUDENTS FROM OTHER COUNTRIES
SEC. 204. (a) With respect to students from other countries attending
colleges or universities in the United States, under the provisions of this
Act or under any other government, institution, or individual program
which furthers the purposes of this Act, the Secretary is authorized to
provide for counseling; orientation, supplementary English language
training, and such other assistance as will help them to have a fruitful
experience here consistent with the objectives of section 2.
(b) Grants which are made to colleges and universities under this
section shall be made in the discretion of the Secretary on the basis of
specific programs submitted to him.
(c) Institutions receiving such grants shall be obliged to contribute an
equal amount to such program. No grant to an institution shall exceed
$100 per foreign student enrolled in the institution during the period of
the grant. No part of such grant shall be payable to a foreign student.
The total amount of such grants shall not exceed $1,000,000 in any
fiscal year.
Approved For Release 2003/10/16 : CIA-RDP91-00965R000300200001-5