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 arrangements 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. For this reason the conference agreement adopts the Senate language.

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 non-Mutual 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 assist

ance 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.

UNITED NATIONS TECHNICAL COOPERATION PROGRAMS (SECTION 709)

The Senate amendment extended the authorization of the appropriation contained in the Mutual Security Act of 1952 for United Nations Technical Cooperation programs for a period of 6 months by making the authorization apply to the calendar year 1953 rather than the fiscal year. The House bill contained no such provision. The conference agreement includes the Senate language. The full amount authorized for fiscal 1953 was not appropriated during the fiscal year. The extension of the authorization will permit a request for a supplemental appropriation of the remainder of the amount authorized.

AMENDMENT AND REPEAL OF CERTAIN PROVISIONS (SECTION 710)

The Senate amendment contained a provision amending section 516(a) of the Mutual Security Act of 1951, as amended, so as to express the policy of the Congress to encourage the efforts of other free countries in fostering private enterprise, in discouraging monopolistic practices and in the strengthening of free labor unions, and to encourage American private investment abroad and the exchange of ideas and technical information. The House bill repealed section 516(a). Since, however, it was not the intention of the House thereby to repeal the objectives of the subsection, the conference agreement follows the Senate language which more clearly expresses those objectives, with a clarifying modification to confine the "exchange of ideas and technical information" to the elements of private enterprise covered in section 516 (a) as amended in the conference agreement.

PACIFIC PACT

The House bill contained a provision stating that the Congress favors the negotiation of a Pacific pact, consistent with the United Nations Charter, for the common defense of the free peoples of the Far East, South Asia and the Pacific Ocean area, and United States participation in such a pact. The Senate amendment contained no such provision. The conference agreement omits the provision. The Mutual Defense Assistance Act of 1949, as amended, includes a somewhat similar expression of congressional policy as follows:

"The Congress hereby expresses itself as favoring the creation by the free countries and the free peoples of the Far East of a joint organization, consistent with the Charter of the United Nations, to establish a program of selfhelp and mutual cooperation designed to develop their economic and social wellbeing, to safeguard basic rights and liberties and to protect their security and independence."

GUARANTIES

The House bill contained three provisions relating to guaranties-one, extending the term of guaranties to 20 years; the second, extending eligibility to countries not participating in the Mutual Security Programs; and the last, extending the types of risks covered by guaranties to "war, revolution, or civil disorder." The Senate amendment contained no such provisions. The House yielded on the last provision, but the Senate conferees accepted the other two House provisions. These, together with the proviso in section 706(d) of the conference agreement permitting the issuance of guaranties until June 30, 1957, also accepted by the Senate conferees, should help to broaden the investment guaranty program so as to stimulate greater investor participation.

ASSISTANCE TO NATO COUNTRIES

The Senate amendment included an amendment to the Mutual Defense Assistance Act, providing that—

"military assistance may be furnished for purposes not included in such [NATO] defense plans *** "

The House bill contained no such provision. The conference agreement omits the provision. The managers on the part of the Senate receded as to this provision and joined in expressing the judgment of the committee of conference that the Senate language might be misinterpreted and that the provisions of the Mutual Defense Assistance Act as broadened by section 2 of the Mutual Security Act of 1951, as amended, grant sufficient authority as to the use of military equipment and materials, thus making the Senate language unneces

sary.

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

Managers on the Part of the House.

APPENDIX VII

TEXT OF PUBLIC LAW 118, 83D CONG., 1ST. SESS., MUTUAL SECURITY ACT OF 1953

[Public Law 118, 83d Cong., 1st Sess.]

AN ACT To amend further the Mutual Security Act of 1951, as amended, and for other purposes

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That this Act may be cited as the "Mutual Security Act of 1953".

CHAPTER I-MILITARY ASSISTANCE

SEC. 101. AUTHORIZATION OF APPROPRIATION.-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.—(a) 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 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 mineral 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."

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