TABLE 7.-Estimated foreign goid and short-term dollar balances, at various dates, June 30, 1945, to Mar. 31, 1953, by area

1 Excludes holdings of the International Monetary Fund, the International Bank, the Bank for International Settlements, the European Payments Union, and other international organizations; also excludes U. S. S. R. gold holdings. Includes holdings of U. S. Government securities maturing within 20 months after date of purchase.

* Includes dependencies and ERP-OEEC countries plus Finland, Spain and Yugoslavia. Includes gold held by Tripartite Commission for the Restitution of Monetary Gold. Source: Treasury Department and Board of Governors of the Federal Reserve System.

III. ACTIVITIES OF THE COUNCIL FROM OCTOBER 1, 1952, TO MARCH 31, 1953 (OTHER THAN THOSE RELATING TO THE INTERNATIONAL MONETARY FUND AND THE INTERNATIONAL BANK)

MUTUAL SECURITY PROGRAM

During the 6 months ended March 31, 1953, the National Advisory Council continued to review issues of financial policy relating to economic and technical assistance operations under the fiscal 1953 Mutual Security Program. In addition, the member agencies of the Council considered and formulated recommendations with respect. to the financial and monetary aspects of the proposed fiscal 1954 program for military aid and economic and technical assistance. A total of $6.0 billion was provided for assistance under the Mutual Security Act of 1952, primarily for military assistance and defense support. The Department of Defense had the responsibility for supplying military aid, the Department of State and the Mutual Security Agency (MSA) for technical and economic aid.

MSA/ECA ALLOTMENTS

European defense support

MSA/ECA allotments represent notification to participating countries, in advance of the issuance of procurement authorizations, of the amount of dollar funds which will be made available for programing. For the 6 months ended March 31, 1953, allotments by MSA amounted to $737 million, all of which were furnished on a grant basis either directly or via the European Payments Union (EPU). For the 5-year period, April 3, 1948, through March 31, 1953, MSA/ ECA allotments to European participating countries for economic assistance and defense support totaled $14.2 billion, of which $11.1 billion, or over three-fourths, was in the form of direct grants. There

were no additions to total allotments for conditional aid ($1.5 billion) or for loans ($1.3 billion) since September 30, 1952, the end of the previous NAC Report period. As indicated in the following table, the United Kingdom, France, Italy, and the Federal Republic of Germany were the major recipients of direct grant aid.

TABLE 8.-MSA/ECA allotments to European countries, Apr. 3, 1948–Mar. 31, 1953, by type of aid

1 Excludes GARIOA and funds for special programs, such as technical assistance, strategic materials, and relief shipments. Includes allotments from MDAP funds, totaling $261.6 million, and allotments for overseas territory development.

Excludes $30 million in conditional aid programed for offshore purchases in Belgium by France ($14 million); the Netherlands ($9 million); and the United Kingdom ($7 million). The amounts for each of the 3 countries making these purchases in Belgium are shown as grant aid for these countries.

* MSA/ECA obligation pursuant to agreement with the United Kingdom of July 7, 1950.

4 After transfer of $4,923,000 from Trieste to Italy on a conditional aid basis to permit the purchase of wheat, under the International Wheat Agreement, by Italy for delivery to Trieste.

The bulk of this aid to the Federal Republic of Germany constitutes a claim against the German economy.

Includes aid to Indonesia prior to Dec. 27, 1949.

? Consists of an allotment of $350 million, obligated Oct. 12, 1950, to be expended in connection with the operations of the Union and $11,395,000, the amount by which Sweden's conditional aid allotment for 1950-51 was decreased and contributed to the European Payments Union on Feb. 28, 1952, to offset the reduction in Sweden's grant to the Union.

NOTE.-Detail will not necessarily add to totals because of rounding.

Source: Mutual Security Agency.

Far East economic and technical assistance

6

Beginning with the China Area Aid Act of 1950, total allotments under the MSA/ECA Far East program through March 31, 1953including funds for Burma and Indonesia prior to the transfer of these programs to the Technical Cooperation Administration-aggregated $470 million. Of this total, over one-half represented allotments to China (Formosa). During the period October 1, 1952, to March 31, 1953, MSA allotted a total of $95 million under the Far East program, which includes commodities, technical assistance, ocean freight, and other services.

• Including $16.3 million obligated by the Mutual Security Agency.

TABLE 9.-MSA/ECA allotments to Far East countries, June 5, 1950, to Mar. 31, 1953

1 Includes $5,931,000 made available from deobligations originating with ECA's China program prior to June 5, 1950.

2 Includes $745,000 made available from the Mutual Defense Assistance Program.

For services provided by the U. S. Public Health Service and Emergency Procurement Service, not assigned by specific country at this time.

Reflects the transfer to the Technical Cooperation Administration of $14,154,000 allotted for assistance to Burma and $9,875,000 to Indonesia, representing the unexpended balances of funds allotted through June 30, 1952.

Source: Mutual Security Agency.

COUNTERPART FUNDS

European program

TABLE 10.-Status of European local currency counterpart fund accounts under Public Law 472, as amended, and Public Laws 84 and 389, as of Mar. 31, 1953 [Dollar equivalents of the local currencies, in millions of dollars]

[Footnotes to table 10:

Local currency is deposited in the special counterpart accounts at the agreed-upon rates in effect at the time the dollar funds were actually expended by MSA/ECA. Withdrawals of part of these local currency funds were made, however, at times when the conversion rates were different from those in effect at the time of deposit. The adjusted dollar equivalent of deposits represents the sum of withdrawals (calculated at the conversion rates in effect at the time of withdrawal) plus balances on hand (calculated at the current rate), 2 Additional deposits include (1) those portions of counterpart funds deposited under Public Laws 84 and 389 which were unencumbered at the time MSA/ECA assumed responsibility for approving utilization, and (2) repayments of loan principal and interest.

Transferred to the GARIOA counterpart account in Germany.

Aid furnished from European program funds while Indonesia was a dependency of the Netherlands. On July 1, 1952, administration of the Indonesian program was transferred to the Technical Cooperation Administration. TCA has assumed responsibility for the utilization of Indonesian counterpart funds under the Act for International Development, as amended. (See table 11.)

Less than $50,000.

Source: Mutual Security Agency.

The Council, during the period under review, considered counterpart programs for Austria, Denmark, Greece, Luxembourg, the Netherlands, Portugal, the United Kingdom, and Yugoslavia. The Mutual Security Agency during that period authorized the withdrawal of the equivalent of $388 million from the special accounts of participating countries, thereby increasing the total of funds withdrawn from all European special accounts through March 31, 1953, to the equivalent of $9.4 billion.

Far East program

As shown in the accompanying table, counterpart deposits from the inception of the Far East program on June 5, 1950, to March 31, 1953, totaled the equivalent of $223 million, of which approximately $7 million was transferred for use by the United States Government. During the period, MSA approved the withdrawal of the equivalent of $172 million, and the equivalent of $141 million was actually withdrawn to finance development programs and defense-support activities in the Far East countries. In addition, the equivalent of $5 million was transferred to the supervision of the Technical Cooperation Administration.

TABLE 11.-Status of Far East local currency counterpart fund accounts under the Economic Cooperation Act of 1948, as amended, as of Mar. 31, 1953

[Dollar equivalents of the local currencies, in thousands of dollars]

1 On July 1, 1952, administration of the programs for Burma and Indonesia was transferred to the Technical Cooperation Administration, including responsibility for the utilization of counterpart funds.

Deposits of new Taiwan dollars only. Excludes mainland deposits consisting of gold and silver yuan and sales proceeds from ECA-financed goods safe-havened in Hong Kong at the time of evacuation. A portion of the Hong Kong sales proceeds amounting to the equivalent of approximately $3.5 million was utilized for the benefit of the economy of Formosa.

Does not include the equivalent of $43.4 million counterpart funds available for use by Indonesia from local currency deposited to match aid furnished Indonesia from European program funds and reported in table 10.

Source: Mutual Security Agency.

36608-53-4

Industrial guaranties

GUARANTY PROGRAM

Through the MSA investment-guaranty program, the United States Government provides insurance for certain new American investments abroad against the risk of currency inconvertibility and loss through confiscation or expropriation. All of the countries for which aid is authorized by the Mutual Security Act of 1951, as amended, are eligible to participate in the program provided they give certain assurances to the United States. As of March 31, 1953, assurances required to make the program effective had been obtained from 15 countries with respect to convertibility guaranties. Of this number, 13 also provided assurances covering guaranties against expropriation. The 15 countries included 3 non-European countries-China (Formosa), Israel, and the Philippines.

New American investment in these countries may be eligible for guaranty under the program, provided they meet certain requirements, and subject to the payment of a fee. Through March 31, 1953, 46 industrial investment guaranties, totaling $39.6 million, were issued covering investments in 6 European countries. Of this amount $38 million represented insurance against inconvertibility of foreign currency receipts and $1.6 million against loss from expropriation or confiscation. Total fees collected amounted to $696,000, and no payments under the contracts were required. At the end of March 1953, over 70 applications for guaranties-totaling about $58 million-were under consideration.

Informational media guaranties

Under a separate program, guaranties of convertibility of receipts. from the production and distribution abroad of informational media are available to American enterprises. Through March 31, 1953, such guaranties issued totaled $16.7 million, as against $14 million on September 30, 1952. Payments under the program aggregated $8.4 million, with fee collections of $245,000.

During the period under review, the National Advisory Council advised the Department of State with respect to the rate of exchange applicable to payments made pursuant to guaranty contracts covering informational media. The Council's recommendations were intended to simplify the exchange rate provision of the contracts and to reduce the administrative burden resulting from consultation on applicable rates.

TABLE 12.-Industrial and informational media guaranties, Apr. S, 1948, to Mar. 31, 1953