the Associated States of Cambodia, Laos, and Vietnam and the forces of France located in such Associated States.'

"CHAPTER III-MUTUAL SPECIAL WEAPONS

PLANNING

"SEC. 301. AUTHORIZATION OF APPROPRIATION. The Mutual Security Act of 1951, as amended, is amended by adding after section 541 the following new section:

"'SEC. 542. There is hereby authorized to be appropriated to the President for the fiscal year 1954 not to exceed $100,000,000 for the purpose of furnishing special weapons to nations eligible to receive military assistance under this Act or to the international organizations referred to in sections 2 (b) (A) and 2 (b) (C) of this Act: Provided, That, prior to the obligation of funds for this purpose, the President shall determine that such obligation is of direct importance to the security interest of the United States and is in furtherance of the policies and purposes of the Mutual Defense Assistance Act of 1949, as amended: And provided further, That, prior to the transfer of such weapons, the President shall determine (1) that the recipient is adequately prepared to safeguard the security of such weapons; (2) that the transfer of such weapons will be of direct importance to the security interest of the United States; and (3) that such transfer will further the purposes and policies of the Mutual Defense Assistance Act of 1949, as amended. Nothing contained in this section shall alter, amend, revoke, repeal, or otherwise affect the provisions of any law restricting, limiting, or prohibiting the transfer of any such weapons. Notwithstanding any other provisions of this Act, funds made available pursuant to this section may be used only for the purpose of this section.'

"CHAPTER IV-TECHNICAL ASSISTANCE "SEC. 401. AUTHORIZATION OF APPROPRIATION.-The Mutual Security Act of 1951, as amended, is amended by adding after section 542 the following new section:

""SEC. 543. There is hereby authorized to be appropriated to the President for the fiscal year 1954 not to exceed $43,792,500 to carry out the provisions of section 203 (relating to economic and technical assistance for the Near East and Africa); $72,100,000 to carry out the provisions of section 302 (a) (relating to defense support, economic and technical assistance) other than for the National Government of the Republic of China and the Associated States of Cambodia, Laos, and Vietnam; and $24,342,000 to carry out the provisions of section 402 (relating to technical assistance for Latin America).'

"SEC. 402. AUTHORIZATION OF APPROPRIATION FOR BASIC MATERIALS.-Section 514 (relating to basic materials) of the Mutual Security Act of 1951, as amended, is amended by adding at the end thereof the following sentence: "There is hereby authorized to be appropriated to the President for the fiscal year 1954 not to exceed $7,500,000 to carry out the provisions of this section.'

"CHAPTER V-SPECIAL REGIONAL ECONOMIC

ASSISTANCE

"SEC. 501. NEAR EAST AND AFRICA.-Section 206 (relating to refugees) of the Mutual Security Act of 1951, as amended, is amended to read as follows:

"'SEC. 206. In order to further the purpose of this Act in the Near East and Africa, there is hereby authorized to be appropriated to the President for the fiscal year 1954 not to exceed $194,000,000 to be used, on such terms and conditions as he may specify, to furnish special economic assistance designed to promote the economic development of the area, for relief and rehabilitation of refugees in the area, and for other types of economic assistance to assist in maintaining economic and political stability in the area. The applicable provisions of the Act for International Development (64 Stat. 204; 22 U. S. C.

1557), except the provisions relating to the purpose for which assistance may be given, or of section 503 (b) (3) of this Act, shall apply to the expenditure of funds pursuant to this section to the extent that they are not inconsistent with the purposes of this section.'

"SEC. 502. INDIA AND PAKISTAN.-Section 302 (relating to economic and technical assistance for Asia and the Pacific) of the Mutual Security Act of 1951, as amended, is amended by redesignating subsection (b) as subsection (c), and by inserting after subsection (a) the following new subsection (b):

66

(b) In order to further the purpose of this Act in India and Pakistan, there is

hereby authorized to be appropriated to the

President for the fiscal year 1954 not to exceed $94,400,000 to be used, on such terms and conditions as he may specify, to furnish special economic assistance designed to promote the economic development of such countries, to assist in maintaining economic and political stability therein, and to enable the countries designated in this subsection to make greater progress toward solving their mutual problems in cooperation with each other. The applicable provisions of the Act for International Development, except the provisions relating to the purpose for which assistance may be given, or of section 503 (b) (3) of this Act, shall apply to the expenditure of funds pursuant to this section to the extent that they are not inconsistent with the purposes of this section.'

"CHAPTER VI-MULTILATERAL ORGANIZATIONS

"SEC. 601. MOVEMENT OF MIGRANTS.-Section 534 (relating to the movement of migrants) of the Mutual Security Act of 1951, as amended, is amended by adding at the end thereof the following new sentence: "There is hereby authorized to be appropriated to the President not to exceed $10,000,000 for contributions during the calendar year 1954 to the Intergovernmental Committee for European Migration.'

"SEC. 602. MULTILATERAL TECHNICAL COOPERATION.-The Mutual Security Act of 1951, as amended, is amended by adding after section 543 the following new section:

66

'SEC. 544. There is hereby authorized to be appropriated to the President for the fiscal year 1954 not to exceed $13,750,000 for multilateral technical cooperation under section 404 (b) of the Act for International Development."

"SEC. 603. CHILDREN'S WELFARE.-The Mutual Security Act of 1951, as amended, is amended by adding after section 544 the following new section:

"SEC. 545. There is hereby authorized to be appropriated to the President not to exceed $9,000,000 for contributions during the calendar year 1954 for the support of international children's welfare work in such manner and on such terms and conditions as he may deem to be in the interests of the United States.'

"SEC. 604. OCEAN FREIGHT ON RELIEF SHIPMENTS.-Section 535 (relating to the payment of ocean freight charges on voluntary relief shipments) of the Mutual Security Act of 1951, as amended, is amended by adding at the end thereof the following new sentence: "There is hereby authorized to be appropriated to the President for the fiscal year 1954 not to exceed $1,825,000 for use in paying ocean freight charges under section 117 (c) of the Economic Cooperation Act of 1948, as amended.'

"SEC. 605. UNITED NATIONS KOREAN RECONSTRUCTION AGENCY.-Section 303 (a) (relating to Korean relief) of the Mutual Security Act of 1951, as amended, is amended as follows:

"(a) Add at the end the following new sentence: "There is hereby authorized to be appropriated to the President for the fiscal

year 1954 not to exceed $71,000,000 for making contributions to the United Nations Korean Reconstruction Agency, or such other agency for relief and rehabilitation in Korea as the President may direct.'

"(b) In the third sentence, strike out $67,500,000' and insert in lieu thereof '$40,750,000.'

"CHAPTER VII-FURTHER CHANGES IN EXISTING MUTUAL SECURITY LEGISLATION

"SEC. 701. TRANSFERS OF FUNDS.-(a) Section 101 (b) of the Mutual Security Act of 1951, as amended, is amended to read as follows:

"(b) Not to exceed 10 per centum of the total of the appropriations made available under this section may be transferred, when determined by the President to be necessary for the purpose of this Act, between appropriations made available under either paragraph of subsection (a): Provided, That whenever the President makes any such determination, he shall forthwith notify the Committee on Foreign Relations of the Senate, the Committee on Foreign Affairs of the House of Representatives, and the Committees on Armed Services of the Senate and of the House of Representatives.'

"(b) Section 202 of such Act, as amended, is amended by striking out '(excluding balof prior appropriations continued available) pursuant to section 201' and inserting in lieu thereof 'under section 201'.

"(c) The first sentence of section 513 (a) of such Act, as amended, is amended to read as follows: 'Whenever the President determines it to be necessary for the purpose of this Act, funds made available under sections 101 (a) (1), 201, 301, and 401 may be transferred among such sections, except that not more than 10 per centum of the funds available under any such section may be transferred from that section; and funds made available under sections 101 (a) (2), 203, 302 (a), and 402 may be transferred among such sections, except that not more than 10 per centum of the funds available under any such section may be transferred from that section. Funds so transferred shall be consolidated with the funds available under the section to which they are transferred.

"SEC. 702. UNEXPENDED BALANCES.-The Mutual Security Act of 1951, as amended, is amended by adding after section 545 the following new section:

"'Unexpended balances

''SEC. 546. The unexpended balance under each paragraph of title III, Mutual Security, of the Supplemental Appropriation Act, 1953, is hereby authorized to be continued available for its original purposes through June 30, 1954, and may be consolidated with the appropriate fiscal year 1954 appropriation made for the same general purpose under the authority of this Act.'

"SEC. 703. ESCAPEES.-Paragraph 101 (a) (1) of title I (relating to Europe) of the Mutual Security Act of 1951, as amended, is amended (1) by deleting the word 'similarly' before the word 'determined', (2) by inserting 'or any Communist-dominated or Communist-occupied areas of Asia' immediately after 'Austria,' and before and any other countries absorbed by the Soviet Union', and (3) by striking out 'and to the security of the United States' and inserting in lieu thereof 'or to the security of the United States'.

"SEC. 704. MILITARY AID IN THE NEAR EAST AND AFRICA.-Section 202 of the Mutual Security Act of 1951, as amended, is amended by inserting '(a)' after 'Sec. 202.', and by adding at the end thereof the following new subsection:

"(b) There is hereby authorized to be appropriated to the President for the fiscal year 1954 not to exceed $50,000,000 to be available, whenever the President determines that such action is essential for the purpose of this Act, in order to provide assistance, pursuant

to the provisions of the Mutual Defense Assistance Act of 1949, as amended, in the area of the Near East and Africa. Such assistance may be furnished to any organization created pursuant to a regional defense arrangement in the area, to any nation in the general area participating in such an arrangement, or to any other nation in the general area which the President determines to be of direct importance to the defense of the area and whose increased ability to defend itself the President determines to be important to the security of the United States (any such determination to be reported forthwith to the Committee on Foreign Relations of the Senate, the Committee on Foreign Affairs of the House of Representatives, and the Committees on Armed Services of the Senate and of the House of Representatives). No assistance shall be furnished under this subsection unless the recipient nation has agreed (1) that the equipment, materials, or services provided will be used solely to maintain its internal security, its legitimate self-defense, or to permit it to participate in the defense of the area, or in United Nations collective security arrangements and measures, and (2) that it will not undertake any act of aggression against any other nation.'

"SEC. 705. AUTHORITY FOR ASSISTANCE TO KOREA.-The first sentence of section 302 (a) (relating to economic aid and technical assistance) of the Mutual Security Act of 1951, as amended, is amended by striking out '(but not including the Republic of Korea)'.

"SEC. 706. Title V (relating to organization and general provisions) of the Mutual Security Act of 1951, as amended, is further amended as follows:

"(a) PERSONNEL CEILING EXEMPTION FOR NEW MILITARY ASSISTANCE PROGRAMS.-Amend section 504 (d) (relating to reduction in personnel) to read as follows:

“‘(d) (1) Ninety days after the enactment of the Mutual Security Act of 1952, the number of civilian employees who are United States citizens, receiving compensation or allowances from the administrative expense appropriations authorized by this Act, employed in the United States and overseas by or assigned to the Mutual Security Agency, or employed by or assigned to the Department of State or the Department of Defense for carrying out programs the appropriations for which are authorized by this Act, and the military personnel assigned to such programs, shall be in the aggregate at least 5 per centum less than the number so employed or assigned on June 1, 1952, except for such personnel of the Department of Defense engaged in the manufacturing, repair, rehabilitation, packing, handling, crating, or delivery of materiel.

"'(2) One hundred twenty days after the enactment of the Mutual Security Act of 1953, the number of civilian employees who are United States citizens, receiving compensation or allowances from the administrative expense appropriations authorized by this Act, employed in the United States and overseas by or assigned to the Director for Mutual Security or the Mutual Security Agency or employed by or assigned to the Department of State or the Department of Defense and other participating agencies for carrying out programs the appropriations for which are authorized by this Act shall be in the aggregate at least 10 per centum less than the number so employed or assigned to comparable positions on January 31, 1953, except for such personnel of the Department of Defense engaged in the manufacturing, repair, rehabilitation, packing, handling, crating, or delivery of materiel.

"(3) After the Director has determined the reduction to be effected in each agency under paragraph (2), the determination as to which individual employee shall be retained shall be made by the head of the agency concerned.

**(4) The Director for Mutual Security shall cause studies to be made from time to time for the purpose of determining whether further reductions in personnel are feasible and consistent with the accomplishment of the purposes of this Act.

"(5) After July 1, 1953, the following categories of civilian employees and military personnel carrying out programs under the Mutual Defense Assistance Act of 1949, as amended, shall be in addition to the personnel ceiling established under paragraph (2) of this subsection:

"'(A) Civilian employees and military personnel carrying out such programs in the Associated States of Cambodia, Laos, and Vietnam, over and above the number so engaged before July 1, 1953,

"(B) Civilian employees and military personnel carrying out such programs for any countries in which no such programs were in operation on July 1, 1953,

"(C) Civilian employees and military personnel carrying out such programs for international organizations and headquarters established after July 1, 1953.'

"(b) SPECIAL USE OF FUNDS.-Amend section 513 (b) (relating to special use of funds) to read as follows:

"(B) Not more than $100,000,000 of the funds made available under this Act, of which not more than $20,000,000 may be allocated to any one country, may be used in any fiscal year by the President, to be expended, without regard to the requirements of this Act, or any other Act for which funds are authorized by this Act, in furtherance of the purposes of such Acts, when the President determines that such use is important to the security of the United States. The President shall notify the Committee on Foreign Relations of the Senate and the Committee on Foreign Affairs of the House of Representatives upon making any such determination.'

"(c) GUARANTIES.-Amend section 520 (relating to investment guaranties) to read as follows:

"Guaranties

"'SEC. 520. Funds realized from the sales of notes pursuant to section 111 (c) (2) of the Economic Cooperation Act of 1948, as amended, shall be available for making guaranties of investments in accordance with the applicable provisions of sections 111 (b) (3) and 111 (c) (2) of the Economic Cooperation Act of 1948, as amended, in any country with which the United States has agreed to institute the guaranty program, notwithstanding the provisions of section 511 of this Act.'

"(d) TERMINATION OF PROGRAM.-Amend section 530 (relating to the expiration of the Mutual Security Program) by striking out 'twelve months' and 'twelve-month' wherever appearing therein and inserting in lieu thereof 'twenty-four months' and 'twentyfour-month', respectively, and by inserting before the period at the end of subsection (a) the following:: Provided, That such part of the equipment, materials, and services referred to above as is to be transferred to recipient countries under the Mutual Defense Assistance Act of 1949, as amended, or the Act of May 22, 1947, as amended, may be so transferred until June 30, 1957, and that part of the funds referred to above which is appropriated to carry out such Acts may be obligated for the purposes set forth above, and for liquidating operations under this proviso, until June 30, 1957: Provided, That guaranties authorized under section 111 (b) (3) of the Economic Cooperation Act of 1948, as amended, may be issued until June 30, 1957, out of any funds remaining available for that purpose'.

"(e) UNDERDEVELOPED AREAS.—Add after section 546 the following new section:

"Underdeveloped areas

'SEC. 547. Whenever funds are made available under this Act for assistance, other than

military assistance, to any economically underdeveloped area, such funds may be used under the applicable provisions of section 503 (b) (3) or the applicable provisions of the Act for International Development. Where administrative arrangements, including provisions relating to compensation and allowances of personnel, authorized under section 503 (b) (3), differ from those authorized by the Act for International Development, the Director may make use of arrangements authorized under either statute, in carrying out such programs, except that before extending the provisions of section 109 (a) of the Economic Cooperation Act of 1948, as amended, to countries in which programs authorized under the Act for International Development are being carried out, the Director will secure the approval of the Secretary of State.'

"(f) USE OF LOCAL CURRENCY.

"(1) Strike out the next to the last sentence of section 521 (relating to administrative expenses).

"(2) Add after section 547 the following new section:

""United States use of foreign currency

"'SEC. 548. (a) The several amounts otherwise authorized by this Act to be appropri ated are authorized to be increased by amounts which shall not, in the aggregate, exceed $98,396,000.

"(b) Amounts appropriated pursuant to any authorization contained in this Act are authorized to be made available for purchase of foreign currencies (including foreign currencies or credits owed to or owned by the United States): Provided, That such currencies or credits are authorized to be made available for use, without reimbursement to the Treasury, for liquidation of obligations legally incurred against such currencies prior to July 1, 1953.'

"(g) NEAR EAST REFUGEES.-Add after section 548 the following new section:

"Near East refugees

"'SEC. 549. (a) In order to contribute to the peace and stability of the Near East in particular and of the world in general, the Director for Mutual Security shall, in consultation with the Secretary of State, makė a survey of the refugee situation in the Near East and report the results of the survey to the Congress within one hundred fifty days after the Mutual Security Act of 1953 is enacted, together with recommendations for seeking a solution. In the making of such report and recommendations, especial consideration shall be given to a program which would utilize the services and talents of these refugees to develop and expand the resources of the area, including its water resources.

"(b) In carrying out his duties under this section, the Director for Mutual Security shall consult with the Committee on Foreign Relations of the Senate and the Committee on Foreign Affairs of the House of Representatives, and shall keep these committees constantly and fully informed of the action which he takes to carry out the provisions of this section'."

"(h) USE OF SURPLUS AGRICULTURAL COMMODITIES.-Add after section 549 the following new section:

"Use of surplus agricultural commodities

"'SEC. 550. (a) Not less than $100,000,000 and not more than $250,000,000 of the funds authorized to be appropriated under this Act shall be used, directly or indirectly, to finance the purchase of surplus agricultural commodities, or products thereof, produced in the United States.

"(b) The President is authorized to enter into agreements with friendly countries for the sale and export of such surplus agricultural commodities under conditions negotiated by him with such countries and to accept in payment therefor local currency

for the account of the United States. In negotiating agreements for the sale of such commodities, the President shall

"(1) take special precaution to safeguard against the substitution or displacement of usual marketings of the United States or friendly countries, and to assure to the maximum extent practicable that sales prices of such commodities are consistent with maximum world market prices of like commodities of similar quality, and to obtain the recommendations of the Secretary of Agriculture in carrying out the provisions of this subsection;

"'(2) use private trade channels to the maximum extent practicable;

"(3) give appropriate emphasis to underdeveloped and new market areas;

"(4) obtain assurance that the purchasing countries will not resell or transship to other countries or use for other than domestic consumption commodities purchased under this program without specific approval by the President.

"(c) Notwithstanding section 1415 of the Supplemental Appropriation Act, 1953, or any other provision of law, the President shall use the proceeds of such sales for the purpose of this Act, giving particular regard to the following purposes

"(1) for providing military assistance to countries or mutual defense organizations eligible to receive assistance under this Act;

"(2) for purchase of goods or services in friendly countries;

"(3) for loans, under applicable provisions of this Act, to increase production of goods or services, including strategic materials, needed in any country with which an agreement was negotiated, or in other friendly countries, 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;

"(6) for purchasing materials for United States stockpiles.

"(d) In carrying out the provisions of this section, the President shall take special precaution to safeguard against the displacement of foreign exchange earnings which would otherwise accrue to the United States or any friendly nations.

"(e) The President is authorized to enter into such agreements with third countries receiving goods accruing from the proceeds of sales made pursuant to this section as he deems necessary to effectuate the purpose of this Act.'

"SEC. 707. The Mutual Defense Assistance Act of 1949, as amended (22 U. S. C. 15711604), is further amended as follows:

"(a) EXCESS EQUIPMENT.-Immediately before the period in the next to last sentence of section 403 (d) (relating to limitation on furnishing of excess equipment), insert a comma and the following: 'and after June 30, 1953, by an additional $200,000,000’.

"(b) SALES OF MILITARY EQUIPMENT.-Strike .out the word "The' where it appears at the beginning of section 408 (e) (1) (relating to sales of military equipment) and insert in lieu thereof the following: 'Notwithstanding the provisions of section 530 (a) of the Mutual Security Act of 1951, as amended, the'. "(c) DEPENDABLE UNDERTAKING PROCEDURE.-Amend the last sentence of section 408 (e) (2) (relating to sales of military equipment) to read as follows: 'Before a contract is entered into, or rehabilitation work is undertaken, such nation, or international military organization or headquarters, shall (A) provide the United States with a de

pendable undertaking to pay the full amount of such contract or the cost of such rehabilitation which will assure the United States against any loss on the contract, or rehabilitation work, and (B) shall make funds available in such amounts and at such times as may be necessary to meet the payments required by the contract or the rehabilitation work in advance of the time such payments are due, in addition to the estimated amount of any damages and costs that may accrue from the cancellation of such contract or rehabilitation work: Provided, That the total amount of outstanding contracts under this subsection, less the amounts which have been paid to the United States by such nations, shall at no time exceed $700,000,000.'

"(d) LOANS OF EQUIPMENT.-Amend section 411 (d) (containing definitions) to read as follows:

"(d) The term "services" shall include any service, repair, training of personnel, or technical or other assistance or information necessary to effectuate the purposes of this Act, including loans of limited quantities of equipment for designated periods solely for test and study purposes.'

as

"SEC. 708. The remaining provisions of the Economic Cooperation Act of 1948, amended (22 U. S. C. 1503-1519), are further amended as follows:

"(a) TERM OF GUARANTIES.-Amend section 111 (b) (3) (relating to guaranties) by striking out 'which guaranties shall terminate not later than fourteen years from the date of enactment of this Act', and by inserting in lieu thereof 'which guaranties shall be limited to terms not exceeding twenty years from the date of issuance.'

"(b) COUNTERPART LOANS.-Amend the last proviso of section 115 (b) (6) (relating to counterpart funds) to read as follows: 'And 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 purposes as shall have been agreed to between the country and the Government of the United States.'

"(c) USE OF LOCAL CURRENCY.-Amend section 115 (h) by striking out 'including' and inserting in lieu thereof the following: 'and, without regard to section 1415 of the Supplemental Appropriations Act, 1953, for'.

"SEC. 709. UNITED NATIONS TECHNICAL COOPERATION PROGRAMS.-Amend the last proviso in section 404 (b) of the Act for International Development by striking out the word 'fiscal' and inserting in lieu thereof the word 'calendar.'

"SEC. 710. AMENDMENT AND REPEAL OF CERTAIN PROVISIONS.-(a) (1) Section 516 (a) of the Mutual Security Act of 1951, as amended, is amended to read as follows:

"(a) The Congress recognizes the vital role of free enterprise in achieving rising levels of production and standards of living essential to the economic progress and defensive strength of the free world. Accordingly, it is declared to be the policy of the United States, in furtherance of the objectives of this Act, to encourage the efforts of other free countries in fostering private initiative and competition, in discouraging monopolistic practices, in improving the technical efficiency of their industry, agriculture, and commerce, and in the strengthening of free labor unions; and to encourage American enterprise in contributing to the economic strength of other free countries through private investment abroad and the exchange of ideas and technical information on the matters covered by this subsection.'

"(2) Section 516 (b) of such Act, as amended, is amended by striking out the words "To accomplish the purpose of clause

(1) of subsection (a) of this section, under' and inserting in lieu thereof the word Under'.

"(b) Section 115 (k) of the Economic Cooperation Act of 1948, as amended, is repealed. Nothing in this subsection shall be construed to prevent the carrying out of any commitment or agreement entered into pursuant to such section 115 (k) prior to the date of enactment of this Act." And the Senate agree to the same. R. B. CHIPERFIELD,

JOHN M. VORYS, WALTER H. JUDD, JAS. P. RICHARDS, LAURIE BATTLE,

Managers on the Part of the House.
ALEXANDER WILEY,

H. ALEXANDER SMITH,
BOURKE B. HICKENLOOPER,
WILLIAM F. KNOWLAND,

WALTER F. GEORGE,

THEODORE FRANCIS GREEN,

JOHN SPARKMAN,

Managers on the Part of the Senate.

STATEMENT

The managers on the part of the House at the conference on the disagreeing votes of the two Houses on the amendment of the Senate to the bill (H. R. 5710) to amend further the Mutual Security Act of 1951, as amended, and for other purposes, submit the following statement in explanation of the effect of the action agreed upon by the conferees and recommended in the accompanying conference report:

The Senate struck out all of the House bill after the enacting clause and inserted a substitute amendment. The committee of conference has agreed to a substitute for both the House bill and the Senate amendment. Except for clarifying, clerical, and necessary conforming changes, the differences are noted below:

THE FUND AUTHORIZATIONS

The total amount authorized in the House bill was $4,998,732,500. The Senate amendment authorized $5,318,732,500. The differbetween two Houses was

ence

$320,000,000.

the

The committee of conference has agreed on an authorization of $5,157,232,500. Thus the Senate authorization was reduced by $161,500,000; the House authorization was increased by $158,500,000.

The conference agreement carries $3,581,523,000 for military assistance for all areas and $934,000,000 for mutual defense financing. The military assistance authorization is $100,000,000 more than that carried in the House bill, but represents a $100,000,000 reduction in the Senate amount. The sum authorized for mutual defense financing is $50,000,000 more than that authorized by the House. Likewise, this represents a $50,000,000 reduction in the Senate amount.

The authorization agreed upon for the basic materials program is $7,500,000, representing an equal adjustment between the Senate authorization of $15,000,000 and the absence of any sum in the House bill. The conference agreement retains the House authorization of $9,000,000 for the Children's Fund, a reduction of $4,000,000 from the Senate authorization. On the other hand, the agreement includes the Senate figure of $1,825,000 for ocean freight on relief packages, an increase of $1,000,000 over the House figure.

TABLE

This table shows the sums carried in the proposed Mutual Security Act of 1953, as requested by the executive branch, as altered by the House of Representatives and by the Senate, and as agreed to in conference.

that contained in the Senate was $1,825,000. In view of the fact that evidence presented subsequent to House action indicates that some 90 million pounds of dried milk have been made available by the Department of Agriculture to these agencies for distribution abroad, the conference agreement contains the Senate amount, which should enable the agencies involved to distribute the milk and other relief supplies.

UNITED NATIONS KOREAN RECONSTRUCTION AGENCY (SECTION 605)

Both the House bill and the Senate amendment authorized contributions to the United Nations Korean Reconstruction Agency (UNKRA), but the Senate amendment authorized contributions to UNKRA "or such other agency as the President may direct." The conference agreement adopts the Senate language, thus permitting flexibility to meet possible changed conditions, adding after the phrase "such other agency" the words "for relief and rehabilitation in Korea".

TRANSFERS OF FUNDS (SECTION 701)

The House bill permitted the President to transfer up to 10 percent of the total of the funds provided for the purpose of furnishing military assistance and defense support to Europe from one of these purposes to the other in that area. The House bill also permitted 10 percent of the funds available for assistance to each area to be transferred to other areas to be used for the same purpose. In both types of transfer, in applying the 10-percent figure, unexpended balances of prior appropriations were not included.

The Senate amendment increased the transferability of funds between military and economic assistance within Europe from 10 to 15 percent and provided for a transfer of 15 percent of the funds made available pursuant to the authorizations for Mutual Defense Financing, Technical Assistance, and Multilateral Organizations among those chapters.

The Senate amendment also made eligible for transfer the special assistance to France, the United Kingdom, for Indochina, to the Near East, and to India and Pakistan, while the House bill excluded such special assistance from transfer.

The conference agreement adopts the provisions of the House bill, except that unexpended balances of prior appropriations are to be included in computing the 10-percent figure.

MILITARY AID IN THE NEAR EAST AND AFRICA (SECTION 704)

The committee of conference agreed that the fluid situation in the Near East warranted special consideration. The House bill carried an authorization of $305,212,637 for military assistance; the Senate amendment, $405,212,637-a difference of $100,000,000. The conferees adjusted these sums and agreed upon $355,212,637.

Of this sum, $50,000,000 is earmarked to provide military assistance to a regional defense organization or any members thereof. To grant maximum flexibility he may also draw on the $50,000,000 for additional assistance to any nation in the general area which he "determines to be of direct importance to the defense" of that area and "whose increased ability to defend itself the President determines to be important to the security of the United States." When he has made such a determination, he shall so advise the Senate Committee on Foreign Relations and the House Committee on Foreign Affairs.

It is further provided that such military assistance as is given under this section will be contingent upon adequate safeguards as to its use by the recipient nation. These will include provisions that the equipment "will be used solely to maintain its internal security, its legitimate self-defense, or to permit it to participate in the defense of the area, or in United Nations collective

security arrangement and measures

It will also be required to give assurances "that it will not undertake any act of aggression against any other nation."

This earmarked $50 million is in addition to the provisions of existing law for transfer of 10 percent of area military funds to countries other than Greece, Turkey, and Iran.

PERSONNEL CEILINGS (SECTION 706 (A))

Last year the Congress enacted a provision, proposed by the Committee on Foreign Affairs, requiring a 10 percent reduction of United States civilian administrative personnel connected with the Mutual Security Program. This year the committee again proposed, and the House accepted, an additional 10 percent reduction. The Senate had no such provision in its amendment and accepted the House provision. It is estimated that a reduction in force of at least 560 will be effected through the inclusion of this section.

The House bill stipulated that such a reduction be effected not later than 90 days after the enactment into law of this bill. The pending reorganization of the administration of foreign aid raises complex administrative problems. For this reason the committee of conference agreed to a period of 120 days in which to effect the reduction.

The administration anticipates the initiation of military assistance programs in other countries not presently receiving such assistance under the Mutual Security Program; the expansion of assistance to Indochina; and military assistance to defense organizations such as the European Defense Community. Both Houses permitted the addition of military personnel above existing ceilings to carry out such new and augmented programs. The Senate amendment also allowed additional civilian personnel identified with these programs. The House bill contained no such provision. The Department of Defense as well as the State Department will be required to administer and give support to these programs. this reason the conference agreement adopts the Senate language.

For

TERMINATION OF PROGRAM (SECTION 706 (D))

The Senate amendment extended the date for termination of the Mutual Security Program from June 30, 1954, to June 30, 1955, and provided an additional period of 1 year for liquidating transactions financed with funds other than those authorized pursuant to the Mutual Defense Assistance Act. A period of 2 years after 1955 was authorized for liquidating Mutual Defense Assistance Act transactions since military equipment, such as planes and ships, involves a long lead time.

The House bill made no change in the date of termination of the program but extended the period for completing transactions from 12 to 24 months.

The committee of conference agreed to retain the date June 30, 1954, for termination of the program as provided in existing law but extended the time available for completing transactions involving Mutual Defense Assistance Act funds until June 30, 1957, and for 2 years in the case of nonMutual Defense Assistance Act funds. The conference agreement also authorizes the issuance until June 30, 1957, of guaranties.

The June 30, 1954, date was adhered to, not because the committee of conference believed that all forms of assistance to other nations would finally terminate on that date, but because they felt that a basic overhauling of the legislation dealing with foreign aid is necessary before that date. The new administration recognizes this. In his message submitting Reorganization Plan No. 7 to Congress President Eisenhower said:

"Our organization for the conduct of foreign affairs has been built upon a patchwork of statutes which needs careful restudy as a

basis for new legislation. The development of new legislation will take time. By early next year we will be prepared, with appropriate consultation with the Congress, to recommend such legislation."

NEAR EAST REFUGEES (SECTION 706 (G))

The Senate accepted the House provision for a survey of the Near Eastern refugee situation. The House agreed that the results of the survey should be reported to the Congress within 150 days in lieu of the 90 days required in the House bill. The conferees were of the opinion that this additional time was necessary to permit a thorough examination of the complex conditions and problems involved in the refugee situation.

USE OF SURPLUS AGRICULTURAL COMMODITIES (SECTION 706 (H))

Both the House bill and the Senate amendment included provisions for the use of surplus agricultural commodities in connection with supplying assistance to foreign countries. The language of the House bill stated the intent of Congress that surplus agricultural commodities should be substituted for other forms of economic aid to the extent feasible. The Senate provision authorized an arrangement for converting dollars authorized for military assistance into foreign currencies. The dollars received by the foreign nation were to be spent by agreement for United States farm products and the local currencies received by the United States would be spent for military end items in the purchasing countries.

The committee of conference agreed to a modification of both provisions. The conference agreement requires that of the funds authorized not less than $100,000,000 and not more than $250,000,000 “shall be used directly or indirectly, to finance the purchase of surplus agricultural commodities." The provision for "indirect" financing is to permit reimbursement of the Commodity Credit Corporation for commodities supplied from its stocks.

Sale of agricultural surpluses for local currencies is authorized. Such currencies are to be kept in a special United States account and may be utilized for the purposes set forth in the legislation without appropriation by the Congress.

Local currencies so acquired may be spent only for the purposes of the Mutual Security Act, giving particular regard to the providing of military assistance to countries or mutual defense organizations and to other specified purposes.

Special precautions are to be taken to prevent disposing of surpluses in a manner which would displace normal market arrangements and to insure that maximum use will be made of private trade channels.

The conference agreement carries out the objectives of the provisions of the House bill and the Senate amendment while providing more specific and detailed procedures for the attainment of these objectives.

SALES OF MILITARY EQUIPMENT (SECTION
707 (B))

Provision was made in both the House bill and the Senate amendment for authorizing the sale of military equipment by the United States Government to other nations beyond June 30, 1954, the date of termination of the Mutual Security Program provided under existing law. This was considered especially necessary because of the need of foreign governments to buy parts and components for weapons and equipment previously supplied to them by the United States and obtainable only in the United States. The House bill contained language to restrict such sales after the termination of the Mutual Security Program to parts and components required for maintenance and repair purposes. The Senate amendment did not contain such limiting provisions. The conference agreement retains the language of the Senate amendment.