"(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. 1571-1604), 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.-Strik 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 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."

(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." SEC. 708. The remaining provisions of the Economic Cooperation Act of 1948, as 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 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 scction 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 OF THE MANAGERS ON THE PART OF THE HOUSE

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 difference between the two Houses was $320,000,000.

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 authorizations 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.

EUROPEAN DEFENSE COMMUNITY (SECTION 101)

The House bill contained a provision requiring that not less than 50 percent of the funds authorized for military assistance to Europe in fiscal year 1954 be made available only for the European Defense Community. The Senate amendment contained a similar provision, except that it granted discretion to the President to withhold up to $1,000,000,000 of such funds.

The conference agreement in effect combines the features of both versions by requiring that 50 percent of the fiscal year 1954 military assistance funds for Europe shall be used for equipment and materials to be transferred to the European Defense Community or to the countries which become members thereof, unless the Congress upon Presidential recommendation otherwise provides. Thus, should the organization not come into being and should the President consider that conditions might nevertheless in his judgment warrant release of the funds, materials, and equipment earmarked for the organization, the Congress would reconsider the provision upon the recommendation of the President. The conference agreement expresses the importance which the United States attaches to the European Defense Community and gives assurances that the formation of the organization will be followed by United States assistance in helping the EDC contribute to the collective security effort. Equipment and materials may be procured, but delivery of the assistance shall not take place until the organization is formed.

MUTUAL DEFENSE FINANCING EXPLORATION FOR MINERALS AND PETROLEUM

(SECTION 201(a))

The Senate amendment, in connection with defense support, economic and technical assistance for the National Government of the Republic of China and the Associated States of Cambodia, Laos, and Vietnam, contained a provision explicitly authorizing the inclusion of assistance in the form of exploration and development of mineral and petroleum resources. The House bill did not refer to such form of assistance. In view of the importance attached by the committee of conference to the development of these resources in this vital area, the conference agreement retains the Senate language.

BASIC MATERIALS (SECTION 402)

The executive branch had requested $25,000,000 and an equal amount in local currency for basic materials projects. This sum is for the purpose of initiating projects that will increase the production of raw materials and food, particularly in Africa and the Far East, and thereby contribute to the expansion of trade and the economic stability of large areas of the free world.

The House did not authorize the dollar amount but left undisturbed the use of local currency. The Senate amendment included $15,000,000 but carried no provision for local currency. Thus, the differences between the two Houses were (1) $15,000,000 and (2) $25,000,000 equivalent in local currency.

The Senate accepted the House language on local currency. This makes possible the use of local currency equal to $25,000,000 for development purposes. The conferees adjusted the dollar authorization to $7,500,000 to cover the purchase of necessary supplies and equipment from dollar sources, including the United States.

INDIA AND PAKISTAN (SECTION 502)

The House bill required the President, when he specifies the terms and conditions on which special regional economic assistance is to be furnished India and Pakistan, to include conditions and assurances

"to enable the countries * * to make greater progress toward solving their mutual problems in cooperation with each other."

The Senate amendment contained no such mandate. The conference agreement retains the quoted language, but includes it as one of the positive purposes of the assistance rather than as a specific condition.

OCEAN FREIGHT ON RELIEF SHIPMENTS (SECTION 604)

Both the House bill and the Senate amendment authorized an appropriation for use in paying ocean freight charges on relief shipments by voluntary relief agencies. The amount in the 'House bill was $825,000, while that contained in