SEC. 602. ESCAPEES.-Paragraph 101(a)(1) of title I (relating to Europe) of the Mutual Security Act of 1951, as amended, is amended by deleting the word “similarly" before the word “determined” and by inserting “or any Communistdominated or Communist-occupied areas of Asia", after “and any other countries absorbed by the Soviet Union", and, at the end of that sentence, strike out "and to the security of the United States" and insert "or to the security of the United States".

SEC. 603. MILITARY AID IN THE NEAR EAST AND AFRICA.-Title II (relating to the Near East and Africa) of the Mutual Security Act of 1951, as amended, is further amended as follows:

(a) Amend section 201 (relating to military assistance) by inserting “and by furnishing other military assistance in the area of the Near East and Africa", after "Greece, Turkey, and Iran”, and by inserting “and for furnishing other military assistance in the area of the Near East and Africa pursuant to section 202" after "and for furnishing assistance to Iran pursuant to the provisions of the Mutual Defense Assistance Act of 1949, as amended (22 U.S.C. 1571-1604)". (b) Amend section 202 (relating to military assistance) to read as follows: "Whenever the President determines that such action is essential for the purpose of this Act, he may utilize the funds made available pursuant to section 201 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 which the United States shall have become a party, 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 Unied 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 section unless the recipient nation (1) has agreed (a) that the equipment, materials, or services provided will be used solely to maintain its internal security, its legitimate selfdefense, or to permit it to participate in the defense of the area, or in United Nations collective security arrangements and measures, and (b) that it will not undertake any act of aggression against any other nation, and (2) has complied with such of the conditions set forth in section 511(a) of this Act and section 402 of the Mutual Defense Assistance Act of 1949, as amended, as the President shall find to be essential to the accomplishment of the purposes of this section." SEC. 604. AUTHORITY FOR ASSISTANCE TO KOREA.-Title III (relating to Asia and the Pacific) of the Mutual Security Act of 1951, as amended, is further amended as follows: In the first sentence of section 302(a) (relating to economic aid and technical assistance) strike out "but not including the Republic of Korea)".

SEC. 605. 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) by changing the period at the end of the section to a colon and by adding the following proviso: "Provided further, That after July 1, 1953, the following categories of civilian employees and military personnel carrying out programs under the Mutual De fense Assistance Act of 1949, as amended, shall be in addition to the personnel ceiling established under the second and third provisos of this section:

"(1) 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,

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

"(3) 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 Representative upon making any such determination.”

(c) TERMINATION OF PROGRAM.—Amend section 530(a) (relating to the expiration of the Mutual Security Program) to read as follows:

“SEC. 530. (a) After June 30, 1955, or after a date specified in a concurrent resolution passed by the two Houses of Congress, whichever is the earlier, none of the authority conferred by this Act or by the Mutual Defense Assistance Act of 1949, as amended (22 U.S.C. 1571-1604), may be exercised; except that following such date

“(1) equipment, materials, commodities, and services with respect to which procurement for, shipment to, or delivery in a recipient country had been authorized prior to such date may be transferred to such country, and “(2) funds appropriated under the authority of this Act shall, if obligated before such date, remain available for expenditure for one year following such date in the case of assistance other than pursuant to the Mutual Defense Assistance Act of 1949, as amended, and for two years following such date in the case of assistance pursuant to the Mutual Defense Assistance Act of 1949, as amended, and shall be available during such period for obligation: (A) for the necessary expenses of procurement, shipment, delivery, and other activities essential to such transfers, and (B) for the necessary expenses of liquidating operations under this Act."

(d) UDERDEVELOPED AREAS.-Add the following new section 548:

"SEC. 548. 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."

(e) USE OF LOCAL CURRENCY.—

(1) Amend section 519 (b) to read as follows:

“(b) In order to assist in carrying out the provisions of section 514, funds made available to carry out that section may be used to acquire local currency for the purpose of increasing the production of materials in which the United States or nations receiving United States assistance are deficient."

(2) Amend section 521 by striking out the next to the last sentence thereof. (3) Add the following new section:

"SEC. 549. USE OF FOREIGN CURRENCY OR CREDITS.-Foreign currencies or credits owed to or owned by the United States shall be used to carry out the purposes of this Act but only after reimbursement is made therefor to the Treasury from funds appropriated to carry out such purposes: 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."

SEC. 606. The Mutual Defense Assistance Act of 1949, as amended (22 U.S.C. 1571-1604), is further amended as follows:

(a) ASSISTANCE TO NATO COUNTRIES.-Add the following proviso before the period at the end of section 101 (relating to military assistance to NATO countries): ": Provided, That military assistance may be furnished for purposes not included in such defense plans upon a determination by the President that it will further the purposes and policies of this Act".

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

ment) and insert in lieu thereof the following: “Notwithstanding the provisions of section 530 (a) of the Mutual Security Act of 1951, as amended, the".

(d) DEPENDable undertaking proceDURE.—Amend the last sentence of sec tion 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 dependable undertaking to pay the full amount of such contract or the cost of such rehabilitation which will assure the United States against any loss on the contract, or rehabilitation work, and (B) shall make funds available in such amounts and at such times as may be necessary to meet the payments required by the contract or the rehabilitation work in advance of the time such payments are due, in addition to the estimated amount of any damages and costs that may accrue from the cancellation of such contract or rehabilitation work: 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."

(e) 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 equipment for test and study purposes." SEC. 607. COUnterpart LoaNS.-Amend the last provisio of section 115(b) (6) (relating to counterpart funds) of the Economic Cooperation Act of 1948, as amended ( U.S.C. 1503-1519) to read as follows:

"And provided further, That whenever funds from such special account are used by accounting 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."

SEC. 608. 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. 609.-AMendment and Repeal of Certain ProvISIONS.—(a) (1) Subsection (a) of section 516 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 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 efficency 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."

(2) Amend subsection (b) of such section 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 said section 115 (k) prior to the date of enactment of this Act.

SEC. 610. None of the funds authorized under this Act may be expended for housing at a unit cost in excess of the prevailing unit cost in the country where such housing is to be provided.

Passed the House of Representatives June 19, 1953.

LYLE O. SNADER,

Clerk.

Passed the Senate with an amendment July 1 (legislative day, June 27), 1953.

J. MARK TRICE,
Secretary.

APPENDIX VI

TEXT OF HOUSE REPORT 770, MUTUAL SECURITY ACT OF 1953, a CONFERENCE REPORT TO ACCOMPANY H.R. 5710, JULY 10, 1953

[House Report 770, 83d Cong., 1st Sess.] MUTUAL SECURITY ACT OF 1953

JULY 10, 1953.-Ordered to be printed

Mr. CHIPERFIELD, from the committee of conference, submitted the following CONFERENCE REPORT

[To accompany H. R. 5710]

The committee of 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, having met, after full and free conference, have agreed to recommend and do recommend to their respective Houses as follows:

That the House recede from its disagreement to the amendment of the Senate and agree to the same with an amendment as follows:

In lieu of the matter proposed to be inserted by the Senate amendment insert the following: That this Act may be cited as the "Mutual Security Act of 1953".

CHAPTER I-MILITARY ASSISTANCE

SEC. 101. AUTHORIZATION OF APPROPRIATION.—(a) The Mutual Security Act of 1951, as amended, is amended by adding at the end thereof the following new section:

"AUTHORIZATION OF APPROPRIATIONS

"SEC. 540. There is hereby authorized to be appropriated to the President for the fiscal year 1954 not to exceed $2,129,689,870 to be available under section 101(a)(1) (relating to military assistance for Europe): Provided, That of the equipment and materials made available under section 101(a)(1) with funds appropriated pursuant to the authorization contained in this section, 50 per centum shall be transferred to the organization referred to in clause (C) of section 2(b) or to the countries which become members thereof, unless the Congress, upon the recommendation of the President, shall hereafter otherwise provide; $305,212,637 to be available under section 201 (relating to military assistance for the Near East and Africa); $1,081,620,493 to be available under section 301 (relating to military and other assistance for Asia and the Pacific); and $15,000,000 to be available under section 401 (relating to military assistance for Latin America)."

CHAPTER II-MUTUAL DEFENSE FINANCING

SEC. 201. AUTHORIZATION OF APPROPRIATIONS.-The Mutual Security Act of 1951, as amended, is amended by adding after section 540 the following new section:

"SEC. 541. There is hereby authorized to be appropriated to the President for the fiscal year 1954 not to exceed $250,000,000 to carry out the provisions of

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section 101(a)(2) (relating to defense support and economic assistance for Europe), and not to exceed $84,000,000 to carry out the provisions of section 302(a) (relating to defense support, economic and technical assistance), including the exploration and development of mincral and petroleum resources, for the National Government of the Republic of China and the Associated States of Cambodia, Laos, and Vietnam."

(b) Such Act, as amended, is further amended by inserting after section 101 the following new section:

"SEC. 102. There is hereby authorized to be appropriated to the President for the fiscal year 1954, to be made available on such terms and conditions, including transfer of funds, as he may specify, (1) not to exceed $100,000,000 for manufacture in France of artillery, ammunition, and semiautomatic weapons required by French forces for the defense of the North Atlantic area, and (2) not to exceed $100,000,000 for manufacture in the United Kingdom of military aircraft required by United Kingdom forces for the defense of the North Atlantic area." (c) Such Act, as amended, is further amended by inserting after section 303 the following new section:

"SEC. 304. There is hereby authorized to be appropriated to the President for the fiscal year 1954, to be made available on such terms and conditions, including transfer of funds, as he may specify, not to exceed $400,000,000 for the procurement of equipment, materials, and services (as defined in section 411 of the Mutual Defense Assistance Act of 1949, as amended) which are required by and are to be made available to, or are necessary for the support of, the forces of 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 section 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."