REPORT OF THE COMMITTEE ON FOREIGN AFFAIRS ON S. 2090 TO AMEND THE MUTUAL SECURITY ACT OF 1954 AND FOR OTHER PURPOSES

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP59-00224A000100300002-0
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 87
• Document Creation Date: November 11, 2016
• Document Release Date: November 3, 1998
• Sequence Number: 2
• Publication Date: January 1, 1955
• Content Type: REPORT

Approved For Release : CIA-RDP59-00224A000100300002-0
84th Congress, 1st Session - - - - - - House Report No. 912
MUTUAL SECURITY ACT OF 1955
REPORT
COMMITTEE ON FOREIGN AFFAIRS
S. 2090
TO AMEND THE MUTUAL SECURITY ACT OF 1954,
AND FOR OTHER PURPOSES
JUNE 24,"1955.-Committed"to the Committee of the Whole House
on the State of the Union and ordered to be printed
UNITED STATES
GOVERNMENT PRINTING OFFICE
WASHINGTON : 1955
Approved For Release : CIA-RDP59-00224A000100300002-0
 Approved For Release : CIA-RDP59-00224A000100300002-0
CONTENTS
Page
Introduction------------------------------------------------------ 3
Purpose of the bill--------------------------------------------- 3
Provisions of the bill----------------------------------------------- 10
Section 2-Military assistance___________________________________ 10
Subsection (a)- Authorization for military assistance---------- 10
Aid to Yugoslavia----------------------------------------- 12
Subsection (b) -Administrative expenses--direct forces support- 12
Subsection (c)-Offshore procurement; credit terms for military
assistance----------------------------------------------- 12
Subsection (d)-Western European Union____________________ 14
Subsections (e) and (f)-Area designations-------------------- 14
Subsection (g)-Transfer of military equipment to Japan------- 14
Section 3-Direct forces support_________________________________ 15
Section 4-Defense support; marine insurance_____________________ 16
Section 5-Deposit of local currency_____________________________ 17
Section 6--Development assistance______________________________ 18
Subsection (a)--Area redesignation; authorizations ------------ 18
Subsection (b)-Administration ----------------------------- 23
Section 7-Technical cooperation________________________________ 23
Subsection (a)-Authorizations ------------------------------ 23
Subsection (b) -Multilateral technical cooperation------------- 27
Subsection (c)-International Development Advisory Board___ 27
Section 8--Other programs______________ _ 28
Subsection (a)--President's special fund_____________________ 28
Subsection (b)-Surplus agricultural commodities-------------- 28
Subsection (c)--Joint control areas__________________________ 28
Subsection (d)-Migrants, refugees, and escapees-------------- 29
Subsection (e)--Children's welfare___________________________ 30
Subsection (f)-Palestine refugees in the Near East ------------ 31
United States contribution to NATO civilian expenses--------- 32
Subsection (g)-Ocean freight charges________________________ 32
Subsection (h)-Control act expenses________________________ 34
Subsection (i)-Administrative and other expenses------------- 34
Subsection (j)--President's Fund for Asian Development; World
Health Organization; Joint Commission on Rural Develop-
ment------------------------------------------------- 35
Section 9---General provisions___________________________________ 37
Subsection (a)- Use of foreign currency_______________________ 37
Subsection (b)--Termination of assistance____________________ 37
Subsection (c)-Loan assistance and sales____________________ 38
Subsection (d)---Shipping on United States vessels------------- 38
Section 10 -Organization and administration__ ___________________ 38
Subsection (a.) -End items --------------------------------- Subsection (b)-Authority to reorganize______________________ 38
Subsection (c)-Foreign Service oflicers______________________ 39
Subsection (d)---Travel allowances___________________________ 39
Subsection (e)--Reports------------------------------------ a9
Section 11--Repeal and miscellaneous provisions------------------ 39
Subsection (a)-Customs exemption (see. 544 (c)); shipping
surplus agricultural products (sec. 544 (d))__________________ 39
Subsection (b)-Unexpended balances (sec. 548); statement of
congressional policy (sec. 549)----------------------------- 40
Section 12--Congressional policy on the Communist regime in China- _ 42
Investment guaranty program ------------------------------ ...... 42
Approved For Release : CIA-RDP59-00224A000100300002-0
 Approved For Release : CIA-RDP59-00224A000100300002-0
84TH CoxaREss HOUSE OF REPRESENTATIVES I REPORT
18t Session No. 912
MUTUAL SECURITY ACT OF 1955
Ju.NE 24, 1955.-Committed to the Committee of the Whole House on the State
of the Union and ordered to be printed
Mr. RICHARDS, from the Committee on Foreign Affairs, submitted
the following
REPORT
[To accompany S. 2090]
The Committee on Foreign Affairs, to whom was referred the bill
(S. 2090) to amend the Mutual Security Act of 1954, and for other
purposes, having considered the same, report favorably thereon with
amendments and recommends that the bill as amended do pass.
The amendments are as follows:
00Page 2, line 2, strike out "$1,278,000,000" and insert "$1,133,000,-
Page 2, after line 3, insert:
(b) In section 103 (b), after the word "chapter", insert "and of section 124".
Page 2, line 4, strike out "(b)" and insert "(c)".
Page 2, line 12, strike out "(c)" and insert "(d)".
Page 2, line 24, strike out "(d)" and insert "(e)".
Page 3, line 3, strike out "(e)" and insert (f)".
Page 3, line 7, strike out "(f)" and insert "(g)".
Page 3, beginning on line 11, strike out "by adding, after section
123, the following new section:" and insert:
as follows:
(a) In section 121, which relates to southeast Asia and the western Pacific,
strike out the fourth word of the third sentence, "section", and insert "title".
(b) Add after section 123 the following new section:
Page 4, line 6, strike out "$70,000,000" and insert "$92,000,000".
Page 4, line 7, before the semicolon insert:
not less than $50,000,000 of the funds made available under the authority of this
subsection shall be used for assistance to Spain in accordance with the provisions
of this section.
Page 4, line 9, before the semicolon insert:
Provided, That the amount made available for Greece for fiscal year 1956 shall
not be less than that made available for such country for fiscal year 1955
Page 5, line 7, after "follows:", insert:
After "SEC. 142. AGREEMENTS.--" insert "(a)";
Approved For Release : CIA-RDP59-00224A000100300002-0
 Approved For Release : CIA-RDP59-00224A000100300002-0
2 MUTUAL SECURITY ACT OF 1955
Page 5, line 8, strike out "subsection" and insert "paragraph".
Page 5, line 9, after the semicolon insert "and".
Page 5, line 10, strike out "subsection" and "paragraph" and insert
"paragraph" and "subparagraph", respectively.
Page 5, line 11, after the colon insert:
and in lieu of all of that part of the present paragraph (11) which precedes sub-
paragraph (i) thereof, insert the following:
Page 5, line 12, strike out "(11)" and insert "(b)".
Beginning on page 7, strike out line 25, and lines 1 to 3, inclusive,
on page 8, and insert:
(b) In section 402, which relates to the sale of surplus agricultural commodities,
strike out "$350,000,000" and insert in lieu thereof "$600,000,000".
Page 8, strike out lines 16 to 20, inclusive.
Page 8, line 21., strike out "(3)" and insert "(2) ".
Page 9'. fine 1, strike out "(4)" and insert "(3)".
Beginning on page 9, strike outlines. 21 and 22, and lines 1 and 2
on page 10.
Page 10, line 3, strike out "(h)" and insert "(g)".
Page 10, line 21, strike out "(i)" and insert "(h)".
Page 10, line 23, strike out ".1,800,000" and insert "$1,300,000".
Page 11, line 1, strike out "(j)" and insert "(i)".
Page It, line 10, after "title", strike out the arabic. numeral "1"
and insert a roman numeral "t,"
Page 12, line 1, strike out "(k)" and "section" and insert "(j)" and
"sections", respectively.
Page 13, line 6, insert "friendly" before "foreign government".
Page 13, line 7, insert "friendly" before "governments".
Page 13, line 18, 'strike out' the quotation mark.
Page 13, after line 18, insert :
"Sac. 419. WORLD HEALTH ORGANIZATION.-Section 3 (a) of Public Law 643,
Eightieth Congress, approved June 14, 1948, as amended, is hereby amended to
read as follows:
" '(a) such sums as may be necessary for the payment by the United States
of its share of the expenses of the Organization as apportioned by the Health
Assembly in accordance with article 56 of the constitution of the Organiza-
tion, except that payments by the United States for any fiscal year of the
Organization after 1958 shall not exceed 33Y per centum of. the total assess-
ments of active.members of the Organization for such fiscal. year; and'.
"SEC. 420. JOINT COMMISSION ON RURAL DEVELOPMENT.--(a) The Secretary
of State, after consultation with the Director, is hereby authorized to conclude an
agreement with the Republic of the Philippines establishing a Joint Commission
on Rural Development in the Philippines, to be composed of two citizens of the
United States appointed by the President of the United States and three citizens
of the Philippines appointed by the President of the'Republic of the Philippines.
Such Commission shall formulate and carry outs a program for development of
the rural areas of the Philippines, which shall include such research and training
activities as may be necessary or appropriate for such development: Provided,
That assistance furnished under this section shall not be construed as an express
or implied assumption by the United States of any responsibility for making any
further contributions to carry out the purposes of this section.
"(b) Insofar as practicable, an amount equal to not more than 10 per centum of
the funds programed in any fiscal year for the Republic of the Philippines under
title I, chapter 3, and title III of this Act shall be used to carry out the purposes
of subsection,(a) of this section."
Page 13, strike out lines 22 to 25, inclusive.
Page 14, line 1, strike out "(b)" and insert "(a)".
Page 14, line 8, strike out ".(c)" and insert "(b)".
Page 14, line 10, strike out "(d)" and insert "(c)".
IA-RDP59-00224A000100300002-0
 Approved For Release : CIA-RDP59-00224A000100300002-0
MITTUAL SECURITY ACT: OF 1955
Page 14, strike out lines 21 and 22 and insert :
(d) In section 509, which relates to shipping on United States vessels, insert
":(except surplus agricultural commodities)" after "commodities", and add the
following sentence at the end thereof:
Page 16, beginning on line 16, strike out "by adding after section
547, the following new sections:" and insert:
as follows:
(a) At the end of section 544, which relates to amendments to other laws, add
the following new subsections:
"(c) The first sentence of section 2 of the Act of June 27, 1942, entitled `An
Act to exempt from duty personal and household effects brought into the United
States under Government orders', as amended (U. S. C., title 50 App., see. 802),
is hereby further amended by striking out '1955'. and inserting in lieu thereof
`1956'."
"(d) Public Law 480, Eighty-third Congress (68 Stat. 454), is hereby amended
by adding after section 305 the following new section:
" `SEC. 306. In order to carry out more effectively the policies and purposes of
this Act, the President may exercise the authority provided herein without regard
to the provisions of section '901 (b) of the Merchant Marine Act of 1936, as
amended, or any other law relating to the ocean transportation of commodities,
materials, and equipment on United States-flag vessels.
(b) After section 547 add the following new sections:
Page 17, line 10, after "549.", insert "(a)".
Page 18, line 1, after "United States",insert "to a greater extent".
Page 18, line 3, strike out the quotation mark.
Page 18, after line 3, insert:
"(b) It is the sense of the Congress that assistance under this Act shall be ad-
ministered so as to assist other peoples in their efforts to achieve self-government or
independence under circumstances which will enable them to assume an equal
station among the free nations of the world."
Sic. 12. It is hereby declared to be the continuing sense of the Congress that
the Communist regime in China has not demonstrated its willingness to fulfill the
obligations contained in the Charter of. the United Nations and should not be
recognized to represent China in the United Nations.
The bill authorizes the funds necessary for carrying forward the
mutual security program along the lines established in last year's
comprehensive legislation (Public Law 665, 83d Cong.)
All aspects of the program were scrutinized by the committee during
its consideration of the bill, and certain phases of our aid efforts were
completely reexamined because important developments during the
past year have raised questions as to their effectiveness.
This year, for the first time since the beginning of the foreign
assistance program, the committee did not feel it necessary to re-
evaluate the fundamental premises on which the mutual security
program is based, or to question whether after a careful balancing of
the risks and advantages it was worthwhile to authorize the continua-
tion of the program. There is today evidence on every continent
that the mutual security program has begun to give us important
foreign policy advantages. The reaction of the free peoples of the
Far East to the blandishments of communism at Bandung; the final
joining together of the United Kingdom, France, Germany Italy,
Belgium, Luxembourg, and the Netherlands for defense in the Western
European Union; the determined elimination of communism by
Guatemala with the united support of the other American Republics,
as well as the apparent reorientation of Soviet diplomacy, can all be
Approved For Release : CIA-RDP59-00224A000100300002-0
 Approved For Release : CIA-RDP59-00224A000100300002-0
4 MUTUAL SECURITY ACT OF 1955
cited as indications that the course on which the United States has
embarked should not be abandoned.
The evidence that the mutual security program has begun to show a
return on our enormous investment in it makes it particularly impor-
tant that its full effectiveness should be maintained. The danger to the
free world from Communist aggression remains. Our allies, who for
the first time in long years of gloom and tension may feel an inclination
to relax, need the assurance of our continued backing. The peoples
of the newer nations and the underdeveloped areas of the world need
tangible encouragement to avoid the dangers of Soviet imperialism.
The committee recognizes the importance of curtailing United States
expenditures in every way possible. It believes that there can be no
practical alternative today but to implement this program.
The following table shows the executive request for the Mutual
Security Act for fiscal year 1956, the amounts authorized by the Senate,
and the amounts recommended by the committee. Title, chapter, and
section references are to those contained in the Mutual Security Act of
1954.
Executive
request
Committee on
Foreign Affairs
recommends.
tion
Differences
between Senate
bill and com-
mittee recom-
mendations
Title I. Mutual defense assistance:
Ch. 1. Military assistance (sec. 103) $1, 278, 000, 000
Ch. 2. Direct forces support (sec.
124)______________________________ 317,200,000
Ch. 3. Defense support (sec. 131):
Europe------------------------- 70,000,000
Near East fold Africa__________ 102,500,000
Asia____________________________ 827,800,000
Title II. Development assistance:
Near East and Africa________73,000,000
Asia____________________________71,001),000
Latin America_____________________ 21,000,000
Total, title II____________________ 165,000,000
Title III. Technical cooperation:
Sec. 304. Bilateral__________________ 146,500,000
Sec. 306. Multilateral:
(a) United Nations technical
assistance________________ 24,000,000
(b) Organization of American
States____________________ 1,500,000
Total, title III--------- 172, 000,000
Title I1r. Other programs:
Sec. 401 (b). special fund ---------- 100,000,000
See. 403. Joint control areas-------- 21,000,000
Sec. 405:
(a) Movement of migrants----- 12,600,000
(c) United Nations Refugee
Fund -------------------- 1,400,000
(d) Selected escapees___________ 6,000,000
Sec. 406. Children's welfare -------- 14,500,000
Sec. 407. Palestine refugees _________ 65,000,000
See. 408. North Atlantic Treaty
Organization --------------------- 3,700,000
Sec. 409. Ocean freight charges:
(c) Voluntary packages-------- 2,000,000
(d) Surplu.3 agricultural com-
modities----------------- 18,0(10,000
Sec. 410. Control Act expenses-____ 1,176,000
See. 411. Administrative and other
expenses_________________________ 36,225.000
Sec.418. Asian Development Fund_ 200, 000,000
Total, title IV____________________ 476,600,000
Total---------------------------- 3,408,000,000
$1,278,000,000
317,200, 000
70,000,000
102,500,000
827,800,000
73,000,000
71,000,000
38,000,000
182,000,000
24, 000, 000
1,500,000
172, 000, 000
$1,133,000,001)
317,200, 000
92,000,000
102.500,000
827,800,000
2, 472, 500, 001
73, 000,000
71,000,000
38,000,000
182,000,000
-$1,15,000,000
----------------
+22,000,000
-123,000.000
----------------
----------------
----------------
24,000,000
1,500,000
----------------
----------------
---------------
100,000,000 I 100, 000, 000
21, 000, 000 21, 000, 000
12, 500, 000 -12,600,000
1,400,000 1,400,000 ---------------
6,000,000 6,000,000 --------------
14,5W, 14,500,000 ----------------
65,000,000 65,000,000 -----------------
3,700,000 -8,700,000
2,000,000 2,000,000 ----------------
13,00(),000 13,000,000 _1,175,000 1,175,000 .35,225,000 35, 226,000 _200,000,000 200,000,000 -----------------
475, 500, 000 459, 300, 0(10 16, 200, 000
3,425,000,000 8,285,800,010 139,200,000
59-00224A000100300002-0
 Approved Fora?#c,ig*-P?9~M224A000100300002-0
The following table compares the appropriations for fiscal year
1955 with the sums recommended by the committee for fiscal year
1956.
Fiscal year
1965 appro-
priation
Recommended
for fiscal year
1956
Title I. Mutual defense assistance:
Military assistance (sec. 103)________________
Ch
1
$1,192, 700, 000
$1,133,000,000
.
.
Direct forces support-----------------------------------------
Ch
2
795, 000, 000
317,200,000
.
.
Ch. 3. Defense support---------------------------------------------
406, 098,195
1,022, 300, 000
Total, title I-------------------------------------------------------
Title II. Development assistance:
Near East and Africti____-___----------------------------------------
115, 000, 000
73, 000, 000
------------------- .------ --------------------
Asia
-
60, 500, 000
71, 000, 000
----------------
-
Latin America -------------------------------------------------------
9,000,000
38, 000, 000
Total,title,II -----------------------------------------------------
182, 000, 000
Title III. Technical cooperation:
See. 304. Bilateral--------------------------------------------------
105,000,000
146,5W, 000
Sec. 306. Multilateral:
(a) United Nations technical assistance__________________________
9,957,621
24,000000
(6) Organization of American States____________________________
1,500,000
1,500,000
Total, title III---------------------------------------------
Title IV. Other programs:
401
Sec
Special Fund----------------------------------- -----------
----------------
100,000,000
.
.
Sec. 403. Joint control areas------------------------------------------
25,000,000
21,000,000
405:
Sec
.
(a) Movement of migrants--------------------------------------
10, 000,000
----------------
(c) United Nations Refugee Fund_______________________________
----------------
1, 400,000
(d) Selected escapees------------------------------- ---------
----------------
6,000,000
Children's welfare ------------------------------ ------------
406
Sec
12,500,000
14, 500, 000
.
.
-----------------------------------
Palestine refugees
407
S
66, 000,000
--------
.
ee.
North Atlantic Treaty Organization_______________________
408
See
i,169,,000
---------------
.
.
Ocean freight ----------------- ---------- --------------------
409
Sec
4,400, 000
15,000,000
.
.
Control Act expenses---------------------------------------
410
Sec
1,175,000
1,175, 000
.
.
Administrative expenses-----------------------------------
See 411
32, 500, 000
35, 225, 000
.
See: 418. Asiatic Development Fund________________________________
----------------
200,000,000
Total, title IV-----------------------------------------------------
459,300,000
Grand total-------------------------------------------------------
In addition to the $2,781,499,816 appropriated last year, the Con-
gress also appropriated a carryover of $2,462,075,979, a total appro-
priation of $5,243,575,795 for fiscal year 1955.
Approved For Release : CIA-RDP59-00224A000100300002-0
 Approved For Release : CIA-RDP59-00224A000100300002-0
MUTUAL 19LCURI7rY ACT Off' -1965
Chart shows program as submitted by executive branch--not funds
authorized in bill as reported.
THE PROGRAM FOR FY 1956
{ $ Millions
President's Fund for Asian
Economic Development
Technical
Cooperation
$172.0
(4.9%)
100
BY FUNCTION
BY AREA
(Excluding MDAP)
$ 2,130 Million
(Excluding MOAP)
IA-RDP59-00224A000100300002-0
 Approved ForuI JieaseuRiC+ 5 AO224A000100,300002-0
o b
.
~ o -
m
OW
C
J0 u!
C!
o
OdI ~OM000~00Gh CN 00
p
SVIO~
p
pii
O
:TCM!i-GS ci"C1-i C'i C'i
"
~
F
M
ci
11
M
w
~M
.w
o
.o
o
.o
FA
ly
~.yv~p
O
n
'O
~~
O
OW~tiOm O GO Its m O CON
d~[M +-iOCV NCV CV I-i CV GV~N
"
o1
F
I
Ma,~
r
$
N
;N
M
io
y7
~,o c
dq
ao
~ oo
Lr
n
>n
o~
o
opIn ~u~
o
goo :o
a
a
o
oc
~c3 ~w
o
~tim ~~ i i i
k
Uro~
N y U
N
iN
O
i0
h
~~
ih i0
U ~ r
dJ
~
E.
o ~-
$~O
o
05
Approved For Release : CIA-RDP59-00224A000100300002-0
 Approved For ReleIIaA e' qt4 tpg5o9-0q?524A000100300002-0
00-
OOUO
0
000000
00
0
~ti
N~O)GV
0
ua
DOO.y QCV~N
~j
~
p
O
CC
~
G
~
eVM
VV
""
p~y~~q,
tO Ci
CV b,A ,y
M
Mao .i OG~v]t`
.Cuo0to , u)OaO.n
E~~V
L
-
OO
i0 i0
U
o
o
::HIH 1
......
:I -a
o
8
A
~^zd~
m
v