No cognizance of advances to the United States Government has been taken in the derivation of net credits. Liabilities of the United States Government in the postwar period have all been considered short-term. Examples of such liabilities are (1) goods and foreign currencies made available by liberated or occupied areas to the Armed Forces of the United States pending future settlement, (2) deposits made by foreign or international entities with the Agriculture Department against procurement orders, and (3) deposits into trust accounts made by foreign governments in payment for United States Government procurement orders or specialized services. Returns exclude interest the United States Government collects on outstanding loans and other credits.

In addition to the United States Government grant programs included in this appendix, there are several operations of the Government abroad which are sometimes called grants or assistance. Among these excluded transactions are

(1) Costs of military occupation and government in former enemy countries, other than supplies for civilian economies generally obtained with United States appropriated funds. (The Berlin airlift is considered to have

been a cost of military occupation.)

(2) The waiver to France of vessels intended as reparation to the United States from Germany and the return of reparation vessels to Italy.

(3) Pensions and annuities, dependents' allotments, and certain claims abroad paid by the United States Government.

(4) Relatively minor amounts of assistance under the programs for cooperation with the American Republics and as part of the international informational and educational activities of the United States Government, including cultural and educational aid rendered under the Fulbright and Smith-Mundt Acts (but scientific and technical cooperation is included).

(5) Goods, services, and funds provided by private persons or organizations, even though furnished through Government-approved organizations such as the United Nations Children's Fund (formerly International Children's Emergency Fund), or the American Red Cross.

(6) Military assistance provided the Philippines under Public Law 454, approved June 26, 1946; military assistance to Japan under section 108 of Public Law 665, approved August 26, 1954; and military assistance to Korea, including military surpluses left by withdrawal of American forces from those countries after World War II. (Naval equipment originally costing $59 million was transferred gratis to the Philippines; under disposal arrangements in Korea, surplus originally costing $49 million was transferred gratis.) (7) Intergovernmental claims which have been settled, sometimes by offset, although these claims may have had the effect of lend-lease or reverse lend-lease and were taken into consideration at the time of war-account settlements; for example, claims against the United Kingdom for supplies and services furnished in January-March 1946 which were waived by the agreement of July 12, 1948.

(8) The contribution of hospitals, facilities, equipment, and care to the Philippines for Philippine veterans and the donation of a hospital to the people of St. Lawrence, Newfoundland.

(9) Flood evacuation and other disaster assistance provided by the Armed Forces or the Public Health Service or assistance in the form of operational exercises (for example, the mass transportation of pilgrims to Mecca in August 1952).

(10) Differences between Government acquisition costs (or domestic prices) and sales prices of agricultural products, such as under the International Wheat Agreement or in sales for foreign currencies.

(11) Differences between acquisition costs of surplus goods and disposal prices (except that if the differential is chargeable to an aid appropriation or authorization, the extent of such allowance is considered to be a grant). (12) Assistance rendered to the Trust Territory of the Pacific Islands since it was placed under the administration of the Interior Department.

(13) The payment in November 1954 to enable the Federal Republic of Germany to acquire and maintain a German Embassy in the District of Columbia. Conversely, some donations to the United States are excluded, such as the contributions by the Government of Pakistan to construction of a United States Embassy building.

Several categories of relatively short-term foreign indebtedness to the United States Government are excluded from the tables, as follows: (1) Advance payments for goods or services, including receivables on progress payments under overseas contracts of the three military services; (2) the revolving special exporter

importer credits of the Export-Import Bank; (3) surplus-property receivables originally scheduled to mature in less than 6 months; (4) other receivables originally scheduled to mature in 90 days or less; (5) foreign currencies held by, or due to, the United States Government on sales of agricultural commodities, even when such currencies are committed for disbursement on loans or grants; and (6) receivables from the sale of military equipment, materials, and services under section 106 (b) of Public Law 665, approved August 26, 1954. Several United States Government direct investments in production facilities abroad are excluded, in particular those in abaca plantations under Public Law 683, approved August 10, 1950, and in nickel production facilities in Cuba.

TRANSACTIONS COVERED

The following types of United States Government transactions are included in this appendix:

1. Grants. These represent aid to foreign governments or other foreign entities for which no repayment is expected, or for which repayment terms are indeterminate. Thus, grants are not synonymous with gifts since they include, in addition to outright gifts, the foreign aid extended under indeterminate terms and conditions of recovery to the United States, pending future settlement. These settlements may eventually stipulate repayment, in whole or in part, for what was classified as a grant at time of delivery. When terms are established they may require settlement on a long-term credit basis. This has been done in the case of many war-account settlements. Such credit settlements have not been included in the computation of net grants, but the principal collections are included in net credits. Cash settlements have not been deducted from grants, but instead have been included in returned grants. Reverse grants and returns on grants are included in net grants.

Refunds and reimbursements to the United States for overpayments, shipments not eligible as aid, etc., occurring under grant programs are absorbed into the gross grant data shown in this appendix.

Ascertainable costs of administering grant programs are included in the grant

total.

Grants and reverse grants utilized following the beginning of Korean hostilities, and available unutilized balances at December 31, 1955, are shown in table C-5, by program. Net grants during the 6 months and the 51⁄2 years ended December 31, 1955, are shown in table C-6 by area and, in some cases, by country. Military foreign grant aid has been shown separately from economic and relief (including technical assistance and defense support) grants.

Because data for mutual security program military aid are available for publication only in the groupings established by the Mutual Security Act of 1954, as amended, no country detail has been shown for any military grants in table C-4. The data for mutual security program military grants are included in the respective geographical areas as follows: Military aid under section 105 (c) (1) and under section 105 (c) (2) (Near East (including Greece and Turkey) and Africa) is included in Western Europe; military aid under section 105 (c) (3) is included in Asia; and military aid under section 105 (c) (4) is included in Latin America. The military aid for which data are not available by area is shown as Unspecified, All Areas.

Country detail is shown in table C-6 only for net economic and relief grants. Where country detail is not available the data are shown if possible by area as Unspecified, otherwise as Unspecified, All Areas.

Explanation of the grant programs included in these appendix tables is confined generally to the programs active within the period since July 1, 1950. For an explanation of earlier grant programs see pages 43 through 48 of the NAC Report for the period October 1, 1951-March 31, 1952.

Specifically the grant programs included in this appendix are the following (see table C-5):

(a) Military.-The military type grants include

(1) Mutual security.-Under Executive Order 10099, dated January 27, 1950, the State Department administered the mutual defense assistance program authorized under Public Law 329, approved October 6, 1949, as amended, until that program was incorporated into the mutual security program.

Public Law 165, approved October 10, 1951 (the Mutual Security Act of 1951), as amended, and Public Law 665, approved August 26, 1954 (the Mutual Security Act of 1954), as amended, continued the mutual defense assistance program as part of the mutual security program. Under these acts, the Defense Department is the operating agency providing most of the military aid, as it did under the earlier mutual defense assistance program.

Also included is mutual security program aid from appropriations for commonuse items which are to be used for military forces of nations receiving assistance, when such assistance provided under section 123 of Public Law 665 is administered in accordance with the provisions of chapter 1 (Military Assistance) of title I of that act.

Mutual security program military grants utilized include transfers of goods and services purchased from funds appropriated and transfers of goods under the authorization in section 403 (d) of Public Law 329, as amended, to furnish excess equipment and materials. The standard value for such excess equipment is original cost, but any additional expenditures of appropriated funds to bring the excess equipment to standard value are not included. In some instances excess equipment is sold under authority of Public Law 329, section 408 (e), and Public Law 665, section 106, at amounts approximating 10 percent of the original cost plus costs of rehabilitation. The difference between the payment by the foreign country (including costs of rehabilitation) and the total standard value is included as a grant in order to assure that such excess equipment is consistently valued in analytic comparisons on international trade. Returns of military equipment, generally for retransfer to other countries, are netted in the data. Dollar administrative expenses and administrative expenses paid from United States Government-held counterpart funds are included. Excluded from the data on unutilized aid are contract authorizations not covered by liquidating appropriations.

Financing of military transfers on deferred payment terms under sections 103 (c) and 505 of Public Law 665, as amended, is considered to be an economic credit and such transactions are included under Mutual security credits, below.

Foreign currency (counterpart) funds received by the United States Government under the mutual security program are included in reverse grants.

Mutual security program military aid is shown only in general area detail. Administrative costs are not applicable to specific areas and are shown as Unspecified, All Areas in table C-6.

(2) Military equipment "loans."-These "loans" by the Defense Department are essentially transfers on an indeterminate basis, generally requiring only the return of the actual item, if available, as was the case in lend-lease vessel transfers. In particular, "loans" included are those under Public Laws 467 (approved July 8, 1952), 510 (approved July 11, 1952), 188 (approved August 5, 1953), and 214 (approved August 8, 1953), which authorized transfer of vessels to foreign countries. Values shown at time of return are not necessarily equal to the original "loan" value.

(3) Greek-Turkish aid. This aid, provided under Public Law 75, approved May 22, 1947, and title III of Public Law 472, approved April 3, 1948, has been administered by the State Department. An estimated $122 million of aid scheduled during the first year of this program is considered economic in character; the remainder is shown as military aid. Subsequent military aid to Greece and Turkey under title II of Public Law 329, approved October 6, 1949, as amended, and section 105 (c) (2) of Public Law 665, approved August 26, 1954, as amended, is included in mutual security program military aid.

(4) Chinese military and naval aid. This aid was provided under section 404 (b) of Public Law 472, approved April 3, 1948, which authorized the President to provide $125 million in aid to China on such terms as he decided. Aid was extended through the Treasury Department as cash and through other agencies as goods and services.

Naval vessels were transferred under Public Law 512, approved July 15, 1946. (5) Lend-lease returns.-Watercraft transferred to foreign countries under the lend-lease program were required to be returned to the United States Government. In recent years, naval vessels returned under this requirement have been retransferred under new authorizations, for example the excess-equipment provisions of the mutual security program. These returns and retransfers were frequently

simultaneous transactions.

(b) Economic and relief.-The economic and relief type grants include(1) Mutual security.-Economic aid under the former economic cooperation programs as well as under the present mutual security program, point 4 technical assistance, and contributions to international organizations for Palestine relief and for Korean reconstruction are all included here. Some economic and technical assistance is provided from mutual security defense assistance program and mutual security military program appropriations. Also included are grants from appropriations for common-use items which are to be used for military forces of nations receiving assistance, when such assistance provided under section 123 of Public Law 665 is administered in accordance with chapter 3 (Defense Support) of title I of that act.

The International Cooperation Administration (ICA), a semiautonomous organization within the State Department, is the operating agency providing most of the mutual security program economic assistance as the successor to the Foreign Operations Administration (FOA), the Mutual Security Agency (MSA), and the Economic Cooperation Administration (ECA). Data shown for economic programs cover grants given under those programs which originated under title I and section 404 (a) of title IV of the Foreign Assistance Act of 1948, as amended. Title I of this act, Public Law 472, authorized the European recovery program; title IV of the act is the authority for Chinese assistance. Public Law 535, approved June 5, 1950, further extended these programs and made funds originally established for Chinese aid also available to other Far Eastern countries. Data shown for the mutual security program also include aid to Korea under Executive Order 10026-A (January 5, 1949), wherein the President assigned responsibility to ECA for economic aid in this area, and under Public Law 447, approved February 14, 1950, and Public Law 535. These programs were all integrated into the mutual security program under Public Law 165, approved October 10, 1951, and subsequent Mutual Security Acts.

Technical assistance and training under these programs and subsidies (including parcel-post reductions) on freight payments for private relief shipments are included.

The extent to which repayments under the program will be required, and the terms, are determined almost immediately after the aid is provided, although when specific commodities or payments are provided they are frequently on an indeterminate basis. The assistance considered to be on a credit basis appears in these appendix tables under Mutual security credits. The remainder of the aid constitutes grants, both direct and conditional. Both conditional grants and outright, or direct, grants are included.

Under the program for the European Payments Union (EPU), the United States Government provided conditional aid against drafts on the initial debit balances that three participating countries (Belgium-Luxembourg, $29 million; Sweden, $10 million; and United Kingdom, $150 million) agreed to provide to other countries through EPU. The United States Government also originally agreed to provide up to $350 million to furnish sufficient convertible assets to enable EPU to pay countries which accumulate a surplus debit position under the

program.

Assistance is shown by recipient country. In some instances, although goods have been shipped to a dependent area (for example, Tunisia), the aid has been reported as rendered to the parent country (France). Commitment of aid for Indonesia, formerly a Netherlands dependency, under the European program was discontinued with the transfer of sovereignty over much of the area to the United States of Indonesia at the end of 1949. However, deliveries of goods and payment for aid previously committed continued into 1950. Indonesia also received aid under other programs.

Dollar administrative expenses of ICA, and the former FOA, MSA, and ECA, and administrative expenses paid from United States Government-held counterpart funds are included. Included also as economic and relief aid under the mutual security program are the administrative expenses (minor in amount) of the Director for Mutual Security.

The State Department was the operating agency providing most of the mutual security program technical assistance until the creation of FOA. The aid includes assistance to Chinese and Korean students in the United States under Public Law 327, approved October 6, 1949, as amended. The point 4 program was authorized by the Act for International Development (title IV of Public Law 535, approved June 5, 1950) and was incorporated into the mutual security program. Economic and technical assistance includes these point 4 grants, except for a limited part of the first year's operations under the Institute of Inter-American Affairs (IAA) included under Inter-American aid and technical assistance, as noted below. IIAA operations with funds made available after June 30, 1951, are included under mutual security program economic and technical assistance, as are all other Technical Cooperation Administration (TCA) grants, including the multilateral technical-assistance program contributions to the United Nations and the Organization of American States. Economic assistance also includes payments to the Intergovernmental Committee for European Migration. Economic assistance from military-aid appropriations was given Yugoslavia as stopgap relief under the mutual defense assistance program.

The State Department also administers that part of the mutual security program whereby contributions for the relief of Palestine refugees are made through

the United Nations and for Korean aid through the United Nations Korean Reconstruction Agency. Palestine relief prior to inception of the mutual security program is also included here under the mutual security program.

Transfers of wheat to Pakistan under Public Law 77, approved June 25, 1953, and transfers of agricultural commodities for emergency famine relief under Public Law 216, approved August 7, 1953, and title II of Public Law 480, approved July 10, 1954, are also included under the mutual security program.

Foreign currency (counterpart) funds received by the United States Government under the mutual security program are included as reverse grants.

(2) Civilian supplies and lend-lease.-For an explanation of the lend-lease program and the civilian-supply program, see the paragraphs under (b), on pages 44, 45, and 46 of the Report for the period October 1, 1951-March 31, 1952. Since June 30, 1950, no grants have been extended under the wartime lend-lease program, though some minor revisions have been made in earlier reported data.

Civilian supplies are assistance to the civilian economies provided by the Armed Forces, principally the Army Department. Most civilian supplies moved prior to June 30, 1950. In the period since June 30, 1950, civilian-supply aid by the Army Department has been furnished primarily to Japan, Korea, and the Ryukyu Islands.

Transfers to the civilian economy from United States Army stocks in Japan and Korea, and aid under appropriations to the Army Department (beginning with Public Law 911, approved January 6, 1951), have been received by Korea. ECA assumed complete responsibility for civilian-supply aid in the United States-occupied area of Germany late in 1949. Funds from the appropriations for government and relief in occupied areas (GARIOA) were transferred to ECA for this purpose. Over half of the civilian-supply aid under ECA and MSA moved

prior to June 30, 1950.

Some lend-leased vessels are required to be returned to the United States for their residual economic value. These are included in reverse grants, along with certain vessels furnished under civilian-supply programs and subsequently returned.

(3) Donations of agricultural surplus.-Donations of surplus food commodities by the Agriculture Department to private and international welfare organizations for the assistance of needy persons outside the United States were authorized by section 416 of Public Law 439, approved October 31, 1949 (as amended by sec. 302, title III, of Public Law 480, approved July 10, 1954), and section 3 of Public Law 471, approved March 31, 1950. These donations are included at values approximating a current export value rather than the price paid by the Agriculture Department in support of domestic commodity prices.

(4) Philippine rehabilitation.-Aid under the Philippine Rehabilitation Act of 1946 includes compensation for war-damage claims and related admininistrative expenses under title I, surplus property transferred under title II, disbursements under title III in payment of claims for the restoration of public property, and improvement of essential public services under title III. The major part of this aid moved prior to June 30, 1950.

(5) United Nations Children's Fund.-The State Department administers grants of funds for United States participation in the United Nations Children's Fund, a continuation of the International Children's Emergency Fund authorized under Public Law 84, approved May 31, 1947; title II of Public Law 472, approved April 3, 1948; Public Law 170, approved July 14, 1949; Public Law 400, approved June 20, 1952; Public Law 119, approved July 16, 1953; and Public Law 665, approved August 26, 1954, as amended. This aid is included opposite the entry International Organizations in table C-6. Most of this aid was in the postwar period prior to June 30, 1950.

(6) Yugoslav aid represents the assistance authorized in Public Law 897, approved December 29, 1950, as stopgap relief, from funds originally appropriated for the European recovery program. State Department administered this grant. (7) International refugee assistance.-The State Department administered grants for United States participation in the International Refugee Organization. Some relief grants were made through the Army Department to the International Refugee Organization. In addition, the Army acted as agent for this organization in shipping goods purchased with cash grants made by the United States Government to the International Refugee Organization; such shipments are excluded but the cash grants are included. Refugee assistance is shown in table C-6 under International Organizations. Most of this aid was given prior to June 30, 1950. The State Department administers the United States contribution to the United Nations Refugee Fund authorized by Public Law 665, approved August 26, 1954, as amended.