SEC. 5. As used in this Act

(a) the term "technical cooperation programs" means activities serv as a means for the international interchange of technical knowledge skills which are designed primarily to contribute to the balanced and ir grated development of the economic resources and productive capacities economically underdeveloped areas. Such activities may include, but ne not be limited to, economic, engineering, medical, educational, and fis surveys, demonstration, training, and similar projects that serve the r pose of promoting the development of economic resources and produc capacities of underdeveloped areas. The term "technical cooperation grams" does not include such activities authorized by the United States formation and Educational Exchange Act of 1948 (62 Stat. 6) as are primarily related to economic development, nor activities undertaken now hereafter pursuant to the International Aviation Facilities Act (62 St 450), nor pursuant to the Philippine Rehabilitation Act of 1946 (60 Stat. 12 as amended, nor pursuant to the Foreign Assistance Act of 1948 (62 St 137), as amended, nor activities undertaken now or hereafter in the ministration of areas occupied by the United States armed forces;

(b) the term "United States Government agency" means any departme agency, board, wholly or partly owned corporation or instrumentality, co mission, or independent establishment of the United States Government; 2; (c) the term "international organization" means any intergovernment organization and subordinate bodies thereof, of which the United Sta is a member.

SEC. 6. In order to carry out the objective of this Act, the President is authe ized to plan, undertake, administer, and execute technical cooperation progra and, in so doing, to

(a) prescribe such rules and regulations as may be necessary and prop to carry out any of the provisions of this Act and to prosecute technical operation programs to completion;

(b) coordinate and direct existing and new technical cooperation p grams carried on by any United States Government agency;

(c) utilize the services and facilities of private agencies and person (d) make advances and grants-in-aid of technical cooperation progra to any person, corporation, or other body of persons, or to any foreign g ernment or foreign government agency or to any international organizatic. (e) make and perform contracts of agreements in respect of technic cooperation programs on behalf of the United States Government with a person, corporation, or other body of persons however designated, wheth within or without the United States, or with any foreign government foreign government agency or with any international organization;

(f) enter into contracts, within the limits of appropriations or contra authorizations hereafter made available, that, subject to the action of a succeeding Congress, may run for not to exceed three years in any one cas (g) acquire or accept in the name of the United States Government purchase, devise, bequest, gift, grant, or otherwise, any money, services, a property, both real and personal, as he finds to be necessary, and in a manner dispose of all property so acquired except property declared to surplus. Receipts arising from the disposition of property not acquir with appropriated funds, except surplus property, shall be available for 4 penditure for the purposes of this Act in the country in which the prope is located. Any money acquired hereunder shall be received and account for under such regulations as the Secretary of the Treasury may prescri (h) provide for printing and binding outside the continental limits of t United States, without regard to section 11 of the Act of March 1, 19 (44 U. S. C. 111); and

(i) appoint such advisory committees as he may determine to be necessa or desirable.

SEC. 7. The President shall terminate United States support for and partici tion in any technical cooperation program or programs whenever he determi that such support and participation no longer contribute effectively to the jective of this Act.

SEC. 8. The President may exercise any power or authority conferred on h by this Act through the Secretary of State or through any other officer or e ployee of the United States Government.

SEC. 9. To further the objective of this Act, the Secretary of State may establish an Institute of International Technical Cooperation within the Department of State.

SEC. 10. In order to carry out the objective of this Act

(a) officers, employees, agents, and attorneys may be employed for duty within the continental limits of the United States in accordance with the provisions of the civil-service laws and the Classification Act of 1923, as amended; except that the President may, by and with the advice and consent of the Senate, appoint one person who shall be compensated at a rate fixed by the President without regard to the Classification Act of 1923, as amended, but not in excess of $16,000 per annum;

(b) persons employed for duty outside the continental limits of the United States shall receive compensation at any of the rates provided for the Foreign Service Reserve and Staff by the Foreign Service Act of 1946 (60 Stat. 999), together with allowances and benefits established thereunder, and may be appointed to any class in the Foreign Service Reserve or Staff in accordance with the provisions of such Act. Alien clerks and employees may be employed in accordance with the provisions of such Act;

(c) officers and employees of the United States Government may be detailed to offices or positions to which no compensation is attached with any foreign government or foreign government agency or with any international organization: Provided, That while so detailed any such person shall be considered, for the purpose of preserving his privileges, seniority, or other benefits, an officer or employee of the United States Government and of the United States Government agency from which detailed and shall continue to receive therefrom his regular compensation, which shall be reimbursed to such agency from funds available under this Act: Provided further, That such acceptance of office shall in no case involve the taking of an oath of allegiance to another government;

(d) experts and consultants or organizations thereof may be employed as authorized by section 15 of the Act of August 2, 1946 (5 U. S. C. 55a), and individuals so employed may be compensated at a rate not in excess of $50 per diem; and

(e) such additional civilian personnel may be employed without regard to section 14 (a) of the Federal Employees Pay Act of 1946 (60 Stat. 219), as amended, as may be necessary to carry out the policies and purposes of this Act. SEC. 11. The President shall transmit to the Congress an annual report of operations under this Act.

SEC. 12. (a) There are hereby authorized to be appropriated such sums as may be necessary to carry out the purposes of this Act. Activities provided for under his Act may be prosecuted under such appropriations or under authority granted n appropriation acts to enter into contracts pending enactment of such appropriaions. Unobligated balances of such appropriations for any fiscal year may, when so specified in the appropriation act concerned, be carried over to any ucceeding fiscal year or years. The President may allocate to any United States Government agency any part of any appropriation available for carrying out the urposes of this Act. Such funds shall be available for obligation and expendiure for the purposes of this Act in accordance with authority granted hereunder ›r under authority governing the activities of the Government agencies to which uch funds are allocated.

(b) Nothing in this Act is intended nor shall it be construed as an expressed or implied commitment to provide any specific assistance, whether of funds, commodities, or services, to any country or countries, or to any international rganization.

SEC. 13. If any provision of this Act or the application of any provision to any ircumstances or persons shall be held invalid, the validity of the remainder of he Act and the applicability of such provision to other circumstances or persons hall not be affected thereby.

Chairman KEE. We have with us this morning the Honorable James E. Webb, the acting Secretary of State, together with the Honorable Willard L. Thorp, the Assistant Secretary of State for Economic Affairs.

Both of these gentlemen are very familiar with the intent and purpose of the proposed legislation and will furnish to the committee this norning information in respect to it. Both of these gentlemen have

worked on the program together, and their testimony, if it is agreeal to the committee to have that arrangement, will be given together. Mr. Webb will make the initial statement, followed by Mr. Thor and from then on, under the usual 5-minute rule, the members of t. committee will have the opportunity to question both of them.

I now introduce to the committee the Honorable James E. Wel Acting Secretary of State. Mr. Webb, the committee is happy to ha you with us this morning. You have a prepared statement. You m read it if you wish.

STATEMENT OF HON. JAMES E. WEBB, ACTING SECRETARY ( STATE

Mr. WEBB. Thank you very much, Mr. Chairman. I apprecia particularly the opportunity to appear here today, but I would li to say in the beginning that the Secretary of State, Mr. Acheson, ha expected to present the views of the Department on H. R. 5615, whic is entitled "A bill to promote the foreign policy of the United Stat and to authorize participation in a cooperative endeavor for assis ance in the development of economically underdeveloped areas the world." He was deeply disappointed when he found he could L be here today, because he considers this legislation of vital importan and deep significance. So does the President, who described it in thewords:

* *

We must embark on a bold new program for making the benefits of e scientific advances and our industrial progress available for the improveme and growth of underdeveloped areas * we should make available peace-loving peoples the benefits of our store of technical knowledge in order help them realize their aspirations for a better life. And, in cooperation wi other nations, we should foster capital investment in areas needing develo ment. Our aim should be to help the free peoples of the world, through the own efforts, to produce more food, more clothing, more materials for housi:. and more mechanical power to lighten their burdens.

As this committee so well understands, the principal objective United States foreign policy today is the establishment of conditio throughout the world which will permit us, along with others, enjoy security against external aggression, to preserve and strength the concept of the dignity and freedom of the individual, and to pat ticipate in a prosperous and expanding world economy. We Ame icans have adopted a number of policies and programs in recent yea which are designed to enable us in various ways to advance towar this objective. Some of these are primarily in the political field; son are primarily military, and others are economic in nature. They a all, however, closely interrelated and in most cases mutually suppor ing. The new program which you are considering today was a vanced by the President in the words which I have quoted as the four: foreign-policy point of his inaugural address last January. It also designed as a major step toward accomplishing our objective of stab world conditions. It should be noted that the program divides itse into two parts. One part relates to the elimination of those unce tainties which retard the flow of investment capital into underdeve oped areas, and is now under study by the Banking and Currenc Committees of both the House of Representatives and the Senat The second part relates largely to the cooperative exchange and sup

ply of technical assistance to these areas, and is the basis for the legislation before you today.

In your consideration of this legislation, I believe the following facts are pertinent:

Two-thirds of the world's population live in underdeveloped areas. For these hundreds of millions of people, economic conditions contrast startlingly with those in the more economically advanced countries. The average per capita income of these people is less than $100 a year on a prewar basis. Their life expectancy is some 30 years, or about one-half that in more advanced countries. The incidence of disease is several times greater. Their food supply so meagerly covers their bare subsistence needs that malnutrition is widespread and actual famine is a constant threat.

The people in the underdeveloped areas are increasingly aware of the possibilities for human advancement through modern technology and economic organization. They have strong aspirations for a better life. They are increasing their pressure on their own governments and in international organizations for action in the political, social, and economic fields to improve the conditions under which they live. The General Assembly of the United Nations, the Economic and Social Council, and the appropriate specialized agencies have recently been giving greater attention to the insistent appeals for action in the field of economic development.

There are many reasons why the United States should participate in a cooperative effort to supply part of the assistance needed. Our people have traditionally shown a spirit of friendliness and neighborliness toward other peoples. This program gives us a unique opportunity to make available to those peoples who seek them and without loss to ourselves the scientific and technical skills which have flourished here and helped to build our strong democratic institutions.

It is important to us and to the rest of the world that people in these areas realize that, through perseverance, hard work, and a little assistance, they can develop the means for taking care of their material needs and at the same time can preserve and strengthen their individual freedoms. Democracy is most secure where economic conditions are sound. In the interests of world security, as well as world progress, this cooperative technical-assistance program holds out great promise.

Another result expected of the program is the strengthening of the United Nations. It is to the United Nations and its specialized agencies that many of the underdeveloped countries are looking for leadership and assistance. The handling of large parts of this program through the United Nations will strengthen its influence and increase its ability to solve other international problems.

There also are many practical economic benefits which will accrue generally from the development of these areas. The flow of capital investment from this country will make available dollars which will be spent here largely for the purchase of capital goods and equipment. This will be more and more important as our programs of emergency foreign aid decline.

In addition to the flow of exports attributable directly to the investment process, the development of productive facilities in these areas will itself have a stimulating and beneficial effect on world trade. These areas cannot acquire the necessary foreign exchange with which

to increase their purchases abroad, in the absence of foreign credits or grants, unless they increase their own productive capacity and conse quent ability to export. As the productive capacity of these areas is increased, international trade will expand and achieve a better balance." We and other exporting countries will be able to share in a constantly; increasing volume of trade.

Our own economy and those of many of the more developed coun tries are dependent upon the import of many basic minerals and raw materials. The present sources of a number of these commodities are. limited and in some cases are approaching exhaustion. The underdeveloped areas have additional sources of supply which, with technical assistance under this program, they would be able to develop. The development of such sources would be of general benefit by increasing the world's supply of important materials and at the same time expanding the purchasing power of the countries of origin.

We all know that the success of the European recovery program depends to a great extent upon the opening up of greater markets for European exports and at the same time upon the development of more extensive sources of supply of minerals, raw materials, and other products needed by European countries.

In essence, Mr. Chairman, the program laid down by the President as his fourth point of foreign policy involves a cooperative effort with other interested nations to exchange technical knowledge and skills and to foster the international flow of capital investment. The cost to the Government of such a program is very small when we consider the large benefits which it will produce. The exchange of persons and ideas does not require heavy expenditures, as do supply programs. Moreover, technical knowledge and skills can be shared without loss to those who now possess them. In fact, those who do share them will, themselves learn much through seeing how they can be adapted to different conditions and through learning about the skills developed in other parts of the world. The necessary capital equipment can in large part be procured without the use of Government funds, if efforts to stimulate the flow of private investment are successful.

The idea of exchanging knowledge and skills is not new. We have been participating with other nations in such programs for years. Educational institutions, missionary groups, and a large number of other private agencies have long been engaged in such activities. Participation by the Government in activities of this type has been fostered and coordinated by the Interdepartmental Committee for Scientific and Cultural Cooperation for more than 10 years. Under the Smith-Mundt Act and the Fulbright Act, citizens of other countries have been coming here and our citizens have gone to other countries, under Government auspices, both to learn and to teach. Of particular significance in this field were programs initiated during the war through the Coordinator of Inter-American Affairs. The United Nations, with its related specialized agencies, is helping to develop and impart useful techniques. The new and essential factor in the present proposal is its emphasis on the great importance of economic development in underdeveloped areas and on the concept of an expanded and coordinated approach to the stimulating of technological exchange and capital investment.

Point IV generally has been received abroad with great enthusiasm. A basic element of the proposal is that, wherever practicable, programs