thereby using up soft currency to a greater degree than what you perhaps may be using now.

Have you thought about that?

Mr. HUGHES. Yes, sir, and we use that procedure to the maximum extent possible.

Mr. BENTLEY. You still think that the 50 percent is the highest ratio you can go in the use of local currency?

Mr. HUGHES. I believe it is, Mr. Bentley. When you think of the projects we have set forth here, notably in the African posts.

(The following information was subsequently submitted for the record :)

SUPPLEMENTAL STATEMENT ON INCREASE IN DOLLAR UTILIZATION

Since 1947, when the utilization of foreign currencies was first applied to the buildings program, a total of $215 million has been authorized, of which $200 million is in local currencies and $15 million in dollars. In brief, the ratio is about 93 percent in local currencies and 7 percent in U.S. dollars. It must be noted, however, that a high percentage of this local currency utilization was made during the period from 1948 through 1952 when the emphasis of the prograin was centered upon the acquisition of improved properties abroad rather than upon the construction of new facilities.

In addition, during these years the acquisition of these properties was largely based upon those posts where local currencies were readily available as a result of the settlement of World War II lend-lease accounts and the disposal of surplus war materials and counterpart funds generated by U.S. occupation. Specifically, large property holdings during this period were achieved in London, Paris, Italy, Germany and other European posts. It may be said that as a general rule the acquisition of improved properties can be accomplished with a minimum utilization of U.S. dollars and this is particularly true in countries where currencies from many sources are readily available.

Beginning in 1952, the Department entered into a rather widespread construction program. In recent years the construction of new facilities has been emphasized, especially in posts where the need is the greatest. Many of these construction activities, because of need, have been carried out despite availability of local currencies. It is to be noted that since 1952 $92,296,590 have been obligated, of which $70,922,950 have been in foreign currencies and $21,373,640 in U.S. dollars or 77 percent foreign currencies and 23 percent dollar utilization.

In 1955 the administrative cost of the buildings program was transferred from the salaries and expenses fund of the Department of State to the buildings program itself. This expense is largely in dollars and includes salaries, travel, allowances, and similar costs for American personnel both Washington and field. This expense annually amounts to about 6 percent of the gross program or about $1,300,000 in dollars.

The program projected for the immediate future is based upon need rather than upon availability of currencies so far as the posts are concerned. In addition, the program immediately ahead envisages the construction of many new facilities in posts where conditions are such that construction is the only practical alternative available to the Department. It is expected that the dollar cost of the program immediately ahead will rise to about 50 percent of the gross program because of these factors.

The Department of State believes it is sound business to utilize foreign currencies to the maximum extent possible in the overseas buildings program. On the other hand, the Department believes equally firmly that in those posts where physical conditions are difficult and where available properties are below any acceptable American standards, it is sound business for our Government to construct new facilities.

Mr. HAYS. Take this new program they brought up. It might be a good thing to go over that area by area.

Mr. BENTLEY. Could I ask just one more question on this table, though, before we leave it?

There are two more columns here in which I am interested in getting an explanation, Mr. Hughes. One is this question of shortages of foreign exchange. What is the estimated shortage of foreign exchange? One billion, six hundred odd million dollars.

Mr. HUGHES. Mr. Bentley, that is a figure furnished us by the Treasury Department. Because, as you may know, the Treasury actually is the manager, worldwide, for all currencies. And knowing the demands, for example, of the military programs, the educational exchange programs, this program, and then there are many others which utilize currencies, projecting the demands of these various programs, the Treasury Department says as we stand today there would be a shortage of $1.6 billion to accommodate all of the demands these programs are making for local currency.

Mr. BENTLEY. In other words, shortage of available local currency over demands?

Mr. HUGHES. That is right, sir.

Mr. BENTLEY. For which we will presumably have to spend $1.6 billion to buy this local currency.

Mr. HUGHES. Presumably.

Mrs. KELLY. Will you yield, sir?

Mr. BENTLEY. Yes.

Mrs. KELLY. That is not just in this program, is it?

Mr. BENTLEY. No, it is total.

One more question and I will leave the table.

The two columns here under the availabilities for Public Law 480 activities. From Treasury sales, $429 million. The loan program, $1.5 billion, roughly.

Would the sum of those two represent the total amount of local currencies available under Public Law 480 at the present time?

Mr. HUGHES. In the light of the agreements already made, yes, sir. Mr. BENTLEY. In other words, we have got close to $2 billion available in local currencies from Public Law 480 at the present time. Mr. HUGHES. We have a potential, Mr. Bentley, because in this column, called the loan program, are the authorizations for the loan back to countries of the proceeds that are generated by 480. This, in other words, is a repayment potential of $1.5 billion equivalent in local currencies generated by the sale of agricultural commodities that have been or will be loaned back to those countries for several purposes, including economic development.

Mr. FARBSTEIN. Will the gentleman yield?
Mr. BENTLEY. I will be glad to yield.

Mr. FARBSTEIN. This is over $2 billion in local currencies owing under the Mutual Security Act and Public Law 480 between 1953 and 1957. As a matter of fact in Austria we have $67 million. In Germany we have $92 million, in Italy we have $160 million, and in the United Kingdom about $68 million that totals almost $400 million.

Four hundred million dollars is an awful lot of money that could be utilized before using American money.

Mr. BENTLEY. We will have to take the statement of the State Department people as authority for the fact that they are making maximum use of local currency.

Mr. FARBSTEIN. I am satisfied to accept it.

Mr. BENTLEY. We can't police them on that, obviously.

Mr. FARBSTEIN. I am satisfied to accept it. For informative purposes I happened to remember what was in a chart this morning. Mrs. KELLY. Will you yield?

Mr. BENTLEY. Yes.

Mrs. KELLY. I have a complete breakdown which I received about a month ago and I think total currency was $2 billion but not under mutual security alone. That was Public Law 480

Mr. FARBSTEIN. That is still under mutual security.

Mrs. KELLY. Oh, no. Public Law 480 is not under mutual security. It is not just under mutual security.

Mr. HAYS. I have a question I would like to ask: You manage the building for what people, now? Do you manage it for State Department personnel?

Mr. HUGHES. Yes, sir.

Mr. HAYS. Military attachés?

Mr. HUGHES. Yes, sir.

Mr. HAYS. Agricultural attachés?

Mr. HUGHES. Yes, sir.

Mr. HAYS. Anybody else?

Mr. HUGHES. There are a number of other agencies, Mr. Hays, that have a very limited number of representatives abroad like the Treasury Department, the Narcotics Bureau, the Customs Bureau, and the Fish and Wildlife people.

In effect, except for the actual program side of the ICA operation, in most of our posts abroad we are gravitating toward centralization of all U.S. activities.

Mr. HAYS. You don't have USIA, do you?

Mr. HUGHES. Yes, sir. Not in every instance, but where the location of the building is such that the USIA can operate out of it, we have them in the building.

The same is true when we are planning a new building. If the location is good for USIA we will put them in the bill.

Mr. HAYS. The question I am trying to get at-and maybe I am being a little vague about it-is, don't you think it would be a saving if all of the foreign building program of this country was under your jurisdiction or under a central jurisdiction?

Mr. HUGHES. Yes, sir; I do, Mr. Chairman. I might say it was recommended by the Hoover Commission. It has been also recommended recently by the Bureau of the Budget and I might say we are studying the question and we may very well have some recommendations on it soon. I do think it is in the right direction to have a centralized realty operation for the civilian side of our Government abroad.

Mr. HAYS. Are there any other questions on this general phase? Mr. BENTLEY. I am afraid I am going to have to ask one more. Look down under "Analysis."

Your new authorization requested. Now, we are talking about the 5-year period. It is $50 million in local currency and $50 million in dollars.

Mr. HUGHES. Yes, sir.

Mr. BENTLEY. That is for 5 years.

Mr. HUGHES. Yes, sir.

Mr. BENTLEY. Over a 5-year period. That is not including the contingency?

Mr. HUGHES. No, sir.

Mr. BENTLEY. Would you have to add $5 million?

Mr. HUGHES. Well, when we set this up like this, Mr. Bentley, we did not identify the contingency items as such.

Mr. BENTLEY. You are just including that in the authorization? Mr. HUGHES. That is right.

Mr. BENTLEY. $50 million over a 5-year period. Well, then, if we are talking about a 2-year authorization, would that then be $20 million?

Mr. HUGHES. The 2-year program that we put forth here was $24 million plus $1 million contingency, or $25 million for each year, or $50 million for 2 years as we indicated in our statement there.

Mr. BENTLEY. Mr. Hughes, at one moment you are talking about $50 million for 2 years and here you have a $50 million figure for 5 years.

Mr. HUGHES. $50 million in dollars and $50 million in local currency are $100 million for 5 years.

Mr. HAYS. It is perfectly clear. They had about $20 million coming in from sale of the foreign property and they were asking originally for an additional $100 million, or a total of $120 million, or, divided by five, $24 million a year.

I asked them to put it on a 2-year line-item basis, so they came in and on a 2-year basis from what you are reading it would have been a $48 million, and in a conference with Mr. Hughes I suggested we round .t out and suggested they put in $1 million each year for contingency, or emergency. So it is a little confusing as you look at it, that they were originally asking for $100 million for 5 years and now they are asking for $50 million for 2 years. But when you figure there was $20 million there that was not-that they anticipated had increased additional revenue for 5 years, it comes out to almost the same figure.

Mr. BENTLEY. I understand it now, Mr. Chairman, but I hope you have those figures in mind when you take that bill up on the floor.

Mr. HAYS. We should forget about the 5-year question and say we are asking for so much money for 2 years and this is how we propose to get it.

Mr. BENTLEY. $50 million for 2 years, $25 million local currency and $25 million in dollars.

Mr. HAYS. Yes.

It is my suggestion if you want to go over that area by area, if anybody has any questions, I don't suspect you want to question each and every country, but I don't know how to get at it other than that, but this new sheet

Mrs. KELLY. Is this the 2-year sheet?

Mr. HAYS. Yes. Line-item distribution of buildings program priorities for fiscal years 1961 and 1962.

Mrs. BOLTON. Where is El Beida?

Mr. HUGHES. That is in Libya. That is the new capital.
Mrs. BOLTON. And they are going through with that?

Mr. HUGHES. That is right, Mrs. Bolton.

Mr. HAYS. You think that the places you have, in view of what we hear and know and read in the papers about Africa and what is going on there, you think in the next 2 years that is about what you want to undertake there?

Mr. HUGHES. I believe so, Mr. Chairman, when you look at it in the light of this projection plus the things that we now have underway in Africa and the things that we have completed in the last year or so. I would believe if we can get on with our program in Italian Somaliland, if we can have ourselves prepared for whatever may happen in Libya, if we can handle the up-coming problems in the French Cameroons as well as Kaduna, and finish off our staff housing for our clerical people in Lagos, Nigeria

Mrs. BOLTON. May I ask a question, Mr. Chairman?

Mr. HAYS. Yes. I would just like to let my ignorance show here for a moment. Yaoundé-is that in French Cameroons?

Mr. HUGHES. Yes, sir.

Mrs. BOLTON. In the matter of Kaduna, are you responsible for the USIS housing?

Mr. HUGHES. Not directly, Mrs. Bolton.

Mrs. BOLTON. How is that handled and what happens about it? Mr. HUGHES. The USIA, of course, has by act of Congress, the authority to own property abroad, but up to date the Director of that Agency has not exercised this authority and thus USIA operates almost exclusively on short-term leases. That is, they lease property either officially or they pay quarters allowance.

Mrs. BOLTON. Supposing they have opportunity to buy. What happens?

Mr. HUGHES. Up to date, Mrs. Bolton, they have not exercised the authority to acquire property in the name of the Director of the

USIA.

Mrs. BOLTON. Nor in the name of the United States?

Mr. HUGHES. That is right.

Mr. HAYS. They have that authority.

Mr. HUGHES. They have that authority by law but up to date, to my knowledge, they have never exercised it except to acquire properties for the construction of relay bases and other technical installations. They have not utilized it to acquire office buildings or housing. Mrs. BOLTON. In spite of the fact that living is difficult?

Mr. HUGHES. Yes.

Mr. HAYS. Eventually what we will get into here is the same old argument this subcommittee was in 2 years ago as to whether USIA ought to be under the State Department or ought to be an independent agency, and if it is an independent agency then who is responsible for its housing and the answer, apparently as you have brought out, is nobody or at least nobody has assumed that responsibility up to

now.

Mr. BENTLEY. May I ask Mr. Hughes if he doesn't have these figures somewhere in his documents, that we would like to have these figures when the bill is brought up.

I would like for you, if you could, to estimate at the completion of this building period, between now and 1965, if you could estimate the rentals saved thereby in both dollars and local currency.

Mrs. BOLTON. Say that over.

Mr. BENTLEY. The rentals we would save by the completion of this building program between now and 1965 in dollars and local currency. Will you do that?

Mrs. KELLY. Would you do it on a 2-year period?