R.V.S, 13 Mr 64

H Jaosa
A5
1964

CONTENTS

Statement or testimony of—

Bell, David E., Administrator, Agency for International Develop-
ment; accompanied by William S. Gaud, Assistant Administrator
for Near East and South Asia; and Edward F. Tennant, Controller__

Bullitt, John C., Assistant Secretary, Treasury Department; ac-

companied by Merlyn N. Trued, Deputy Assistant Secretary; and

G. d'Andelot Belin, General Counsel..

Hansen, Kenneth R., Assistant Director, Bureau of the Budget; ac-

companied by Carl W. Tiller, Chief, Budget Methods, Office of

Budget Review; Irving J. Lewis, Deputy Division Chief, Inter-

national Division; and Miss Florice Spears, budget methods

specialist - -

Talbot, Phillips, Assistant Secretary of State for Near Eastern and
South Asian Affairs; accompanied by Philip H. Trezise, Deputy
Assistant Secretary of State for Economic Affairs; and Verne B.
Lewis, Deputy Assistant Secretary for Budget and Finance_--
Letters, statements, etc., submitted for the record by-

Bell, David E., Administrator, Agency for International Development:
Bureau of the Budget Bulletin No. 64-3, September 14, 1963, re
excess of foreign currencies...

Estimated AID offshore expenditures, 1962–65----

Excerpt from typical covenant of—

Page

61

2

29

136

Public Law 480_

DFL loan..

MSP loan.

Instructions to ICA and AID to make maximum use of U.S.-
owned local currencies__

Projected rupee receipts for fiscal years 1964, 1965, 1966..
Statement from Mason report re U.S.-owned excess local curren-
cies for foreign aid for third countries_
U.S. currency holdings in Cuba.

Bullitt, John C., Assistant Secretary, Treasury Department: Waivers
in cases of Nepal and Burma___

Gaud, William S., Assistant Administrator for Near East and South

Asia, Agency for International Development: Commodity composi-

tion of AID dollar local cost financing-

84

64

105

105

105

66

88

110

97

19

120

Glick, David, chief counsel, Foreign Operations and Government

Information Subcommittee:

Excerpt from Bureau of the Budget Circular No. A-58, February

23, 1963, re policies on payments and receipts.

Excerpt from statement of David E. Bell -

Excerpt from statement of Phillips Talbot-

Excerpt from the Foreign Affairs Manual..

56

121, 122, 132

156, 165

165

Griffin, Hon. Robert P., a Representative in Congress from the State

of Michigan: Excerpt from statement of Kenneth R. Hansen___

Hansen, Kenneth R., Assistant Director, Bureau of the Budget:

43

Excerpt from Bureau of the Budget Bulletin No. 62-3, September

19, 1961 (exhibit XIII).

31

Excerpt from Bureau of the Budget Circular No. A-11 (exhibit

XVII).

32

Excerpt from Bureau of the Budget Circular No. A-20 (exhibit

XVI).

31

Excerpt from Bureau of the Budget Circular No. A-58, February
23, 1963, re policies on payments and receipts___

Excerpt of letter from David Bell, Director, Bureau of the Budget,

to Ĥon. Dean Rusk, August 20, 1962 (exhibit XIX).

30

33

Letters, statements, etc., submitted for the record by-Continued
Lewis, Verne B., Deputy Assistant Secretary for Budget and Finance,
Department of State: Excerpt from Embassy instruction, American
Embassy, New Delhi, India, September 11, 1962, re utilization of
local currency and accommodation exchange_

Moss, Hon. John E., a Representative in Congress from the State of
California, and chairman, Foreign Operations and Government
Information Subcommittee: Excerpt from statement of Phillips
Talbot

Reid, Hon. Ogden R., a Representative in Congress from the State
of New York: Excerpt of letter from Hon. Douglas Dillon, Secretary
of the Treasury, to Hon. John E. Moss, November 15, 1963----.
Reuss, Hon. Henry S., a Representative in Congress from the State of
Wisconsin:

Excerpt from Congressional Record of July 13, 1953, re con-
gressional intent on third country purchases_.

Excerpt from Public Law 480__

Excerpt from report on Public Law 480 by the executive branch,

August 21, 1963__

Excerpt from statement of David E. Bell_

Excerpt from the Foreign Assistance Act of 1961..

Excerpt of memorandum from Robert Black, chairman, local
currency working group, to Seymour M. Peyser, July 12,
1963__.

Page

165

156

150

102

40, 141

42

107

141

109

Excerpt of telegram from Dean Rusk to Ankara, Turkey, De-

cember 28, 1962..

146

Telegram which could have been sent to U.S. AID mission to

Turkey..

146

Trued, Merlyn N., Deputy Assistant Secretary, Treasury Department:
Public Law 480 agreements with Poland..

17

Index...

257

EXHIBITS

Exhibit I-Receipt of foreign currencies for U.S. use by major sources,

fiscal year 1963 (table A)---

169

Exhibit II-U.S.-owned Indian rupees available for U.S. use as of June 30,

1963 (table B).

169

Exhibit III-India-Public Law 480, title I, U.S. program uses (table C)--

Exhibit IV-Statutory programs under foreign assistance programs, other

than Public Law 480...

169

170

Exhibit V-A-Regulations governing foreign exchange operations_-

Exhibit V-B-Regulations governing foreign currency reporting and

accounting-.

Exhibit VI-A-Letter from Congressman John E. Moss to Hon. Douglas

Dillon, Secretary of the Treasury, November 6, 1963, re local currency

holdings and criteria for determining their excess..

Exhibit VI-B-Letter from Hon. Douglas Dillon, Secretary of the Treas-

ury, to Congressman John E. Moss, Nov. 15, 1963, re response to exhibit

VI-A_

Exhibit VII-India: Public Law 480, section 104(d), transactions involv-

ing rupees through fiscal year 1963.

180

Exhibit VIII-Expenditures in dollars by U.S. Government agencies in

excess currency countries...

180

Exhibit IX-A-Letter from James M. Nicely, vice president and treasurer,

the Ford Foundation, to Hon. Douglas Dillon, Secretary of the Treasury,

September 10, 1962, re use of U.S. owned local currencies..

Exhibit IX-B-Letter from Hon. Douglas Dillon, Secretary of the Treas-

ury, to James M. Nicely, vice president and treasurer, the Ford Founda-

tion, October 22, 1962, re response to exhibit IX-A..

Exhibit X-Executive Order No. 10582, December 17, 1954-

Exhibit XI-Section 1415, Supplemental Appropriation Act, 1953-

Exhibit XII-Appropriation provisions enacted in 1961 budget re system of

management of U.S.-owned foreign currencies.

181

182

182

184

184

Exhibit XIII-Bureau of the Budget Bulletin No. 62-3, September 19,

1961.

184

Exhibit XIV-Bureau of the Budget Bulletin No. 63-3, August 22, 1962--

Exhibit XV-Bureau of the Budget Bulletin No. 64-3, September 14,

1963__

185

186

Exhibit XVI-Bureau of the Budget Circular No. A-20, revised, Sep-

tember 10, 1962.

Exhibit XVII-Excerpts from Bureau of the Budget Circular No. A-11,

entitled "Instructions for the Preparation and Submission of Annual

Budget Estimates".

Exhibit XVIII—Excerpt from the Foreign Assistance Act of 1961, as

amended.

Exhibit XIX-Waiver allocation letter No. 341 of August 20, 1962.

Exhibit XX-State Department Regulation 4 FAM 373.1-6, utilization

of Treasury-source foreign currency.

Exhibit XXI-Development Loan Fund abandonment of competitive pro-

curement of goods, October 20, 1959.

Exhibit XXII-A-Instruction to ICA concerning procurement (Depart-

ment of State press release, December 5, 1960) –

Exhibit XXII-B-International Cooperation Administration financed

procurement (ICA Circular Priority 13, December 6, 1960) - -

Exhibit XXII-C-Directive by the President concerning steps to be taken

with respect to the U.S. balance of payments, November 17, 1960..

Exhibit XXIII-Commodity procurement source and origin policy, AID

policy determination 21, July 5, 1963.

Page

186

188

190

190

191

191

191

192

193

197

Exhibit XXIV-ICA Circular No. A-216, Policy guidance-Local curren-

cies, December 3, 1960.

199

Exhibit XXV-A-AID Circular No. A-276, Maximizing the use of local

currencies, June 13, 1962_.

200

Exhibit XXV-B-India AID mission response to Circular No. A-276, June

29, 1962

202

Exhibit XXVI-A-Section 104, Public Law 480, 83d Congress, Agricul-

tural Trade Development and Assistance Act of 1954 (as amended),

through September 27, 1962___.

203

Exhibit XXVI-B-The Foreign Assistance Act of 1961, as amended,

sections 612, 614(a), and 635 (a) through (j) --

Exhibit XXVII-"Use of Indian Rupees for Payment of Air Transporta-

tion of Personnel and Cargo," Message A-2059 from India mission to

AID, Washington, February 25, 1963.

207

208

Exhibit XXVIII-A—ICA Circular No. XA-1137, April 25, 1961, “Use of

Excess U.S.-Owned Local Currency To Finance ICA Commodity Pro-

curement".

209

Exhibit XXVIII-B-TCM/New Delhi-Response to Circular XA-1137,

June 7, 1961.

210

Exhibit XXVIII-C-USOM/Karachi-Response to Circular XA-1137,

May 5, 1961_.

Exhibit

211

XXVIII-D-USOM/Cairo—Response to Circular XA-1137,

May 11, 1961_

212

Exhibit XXVIII-E—USOM/Y (Belgrade)—Response to Circular XA-1137,

June 16, 1961.

212

Exhibit XXVIII-F-USOM/Tel Aviv-Response to Circular XA-1137,

May 10, 1961_.

213

Exhibit XXVIII-G-ICA/Rangoon-Response to Circular XA-1137,

July 5, 1961

213

Exhibit XXIX-Projected accruals of local currency for United States

use in "excess" countries _ _

Exhibit XXX-Agency for International Development-Projection of

local currency collections in India for fiscal years 1964, 1965, 1966, as

of June 30, 1963...

214

215

Exhibit XXXI-A-Use of excess stockpile materials in AID programs -

Exhibit XXXI-B-AID Policy Determination 20, May 28, 1963, utiliza-

tion of excess stockpile materials in foreign aid programs-

Exhibit XXXII-Reuse of local repayments___.

Exhibit XXXIII-Typical loan covenants.

216

217

221

222

Exhibit XXXIV-Statement regarding construction of section 104(d) of

Public Law 480, 83d Congress.

224

Exhibit XXXV-Educational TV in Colombia..

228

Exhibit XXXVI-Use of foreign currency for oversea expenditures.

229

Exhibit XXXVII-Export credits furnished by countries where United

States holds excess local currency--

Exhibit XXXVIII-AID financing of cotton textiles to Africa.

230

231

Exhibit XXXIX-"Foreign Buildings Program", U.S. dollar value, pay-

ments in local currency, fiscal years 1959 through 1963----

Exhibit XL-"Educational Exchange Program", U.S. dollar value, pay-

ments in local currency, fiscal years 1959 through 1963.

Exhibit XLI-Foreign currency purchased from Treasury Department by

State Department disbursing officers, U.S. dollar value, fiscal years 1959

through 1963_.

Page

231

231

Exhibit XLII-Excess foreign currencies converted to nonexcess curren-

cies, educational exchange program_-

Exhibit XLIII-Agricultural commodities agreement between the United

States of America and India, November 30, 1962...

Exhibit XLIV-Grace period of repayment under title IV agreements with

Syria and Iraq- -

232

232

233

242

Exhibit XLV-Reason for inability in Poland to use U.S.-owned currency

for payment of benefits..

242

Exhibit XLVI-Countries to which sales are made providing for dollar

243

repayments---

Exhibit XLVII-State Department legal opinion, re sale of U.S.-owned

currencies to non-Government agencies..-

Exhibit XLVIII-A-American Embassy, New Delhi, India, Instruction,

September 11, 1962, "Utilization of Local Currency and Accommodation

Exchange"

Exhibit XLVIII-B-AID Washington Circular A-385, June 6, 1963,

"Overseas Spending by AID-Financed U.S. Nationals and the U.S.

Balance of Payments".

Exhibit XLVIII-C-AID/New Delhi response to Circular A-385, July

31, 1963.

Exhibit XLIX-A-Letter from Ambassador Chester Bowles, to Con-

gressman John E. Moss, October 3, 1963, re comments on subcommittee

staff activities in India..

Exhibit XLIX-B-Letter from Congressman John E. Moss, to Ambassador

Chester Bowles, October 26, 1963, re response to Exhibit XLIX-A_-

Exhibit XLIX-C-Letter from Ambassador Chester Bowles, to Con-

gressman John E. Moss, November 5, 1963, re action resulting from

subcommittee staff activity in India..

Exhibit L-A-Memorandum from Raymond T. Mayer, June 5, 1957, to

John B. Hollister on ICA Program Approval No. 57-L-8 (480), subject:

"Request for Allotment of Public Law 480 Indian Rupees to Burma".

Exhibit L-B-Air Pouch message from the American Embassy, New

Delhi, July 12, 1957, to Department of State, subject: "Proposed Sale

Indian Textiles to Burma," and enclosed aide-memoire of July 11, 1957,

from the Government of India

Exhibit L-C-Message from J. Barrington, Permanent Secretary, Bur-

mese Foreign Office, August 25, 1958, to U.S. Ambassador Walter P.

McConaughy, accepting terms and conditions for sale of Indian textiles to

Burma..

Exhibit L-D-American Embassy Note No. 214, August 25, 1958, ap-

parently accompanying above identified message from J. Barrington_-

Exhibit LI-Letter from David E. Bell, October 7, 1963, to Kermit

Gordon, requesting an allocation of U.S.-owned Indian rupees under

section 104(d) of Public Law 480 for fiscal year 1965 use in the Nepal

AID program

243

244

246

247

247

248

248

249

250

251

251

252

Exhibit LII-A-Letter from Congressman John E. Moss, to Hon. David E.

Bell, Administrator, AID, January 7, 1964, re steps taken by AID to

increase Indian agricultural exports---

253

254

Exhibit LII-B-Letter from David E. Bell, Administrator, AID, to

Congressman John E. Moss, January 24, 1964, re response to exhibit

LII-A__

Exhibit LIII-A-Letter from S. J. Archibald, subcommittee_staff ad-

ministrator, to Hon. Douglas Dillon, Secretary of the Treasury, December

20, 1963, re request for legal opinion on sale of U.S.-owned foreign cur-

rency to nongovernmental charitable organizations.

Exhibit LIII-B—Letter from G. d'Andelot Belin, General Counsel,

Treasury Department, to Congressman John E. Moss, January 9, 1964,

re response to exhibit LIII-A..

255

255