ADMINISTRATION OF THE DEPARTMENT OF STATE AND THE FOREIGN SERVICE, AND ESTABLISHMENT OF A FOREIGN SERVICE ACADEMY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP78-03721A000400020007-7
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 192
• Document Creation Date: November 11, 2016
• Document Release Date: March 26, 1999
• Sequence Number: 7
• Publication Date: July 15, 1959
• Content Type: REPORT

Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
TAB
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved FA~ Al O -~j@U* ftTft&W 100Q QVg20007-7
AND THE FOREIGN SERVICE, AND ESTABLISHMENT
OF A FOREIGN SERVICE ACADEMY
HEARINGS
SUBCOMMITTEE OF THE
COMMITTEE ON FOREIGN RELATIONS
UNITED STATES SENATE
EIGHTY-SIXTH CONGRESS
FIRST SESSION
ON
S. 15, S. 109, S. 730, S. 443, S 2233,
S. 106, S. 1044, S. 2232 and S. 1502
Printed for the use of the Committee on Foreign Relations
UNITED STATES
GOVERNMENT PRINTING OFFICID
WASHINGTON : 1969
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
COMMITTEE ON FOREIGN RELATIONS
J. W. FULBRIQIIT, Arkansas, Chairman
THEODORE FRANCIS GREEN, Rhode Islands ALEXANDER WILEY, Wisconsin
JOHN SPARKMAN, Alabama BOURKE B. IIICK: NLOOPER, Iowa
HUBERT H. HUMPHREY, Minnesota WILLIAM LANGEIt, North Dakota
MIKE MANSFIELD, Montana GEORGE D. AIKEl7, Vermont
WAYNE MORSE, Oregon HOMER E. CAPEIIART, Indiana
RUSSELL B. LONG, Louisiana FRANK CARLSON, Kansas
JOHN F. KENNEDY, Massachusetts
ALBERT GORE, Tennessee
FRANK I. LAUSCHE, Ohio
FRANK CHURCH, Idaho
CARL MARCY, C hief of Staff
DARRELL ST. CLAIRE, Clerk
SUBCOMMITTEE ON STATE DEPARTMENT ORGANIZATION AND PUBLIC AFFAIRS
MIKE MANSFIELD, Montana, Chairman
WAYNE MORSE, Oregon WILLIAM LANGER, North Dakota
THEODORE FRANCIS GREEN, Rhode Island HOMER E. CAPEILLRT, Indiana
RUSSELL B. LONG, Louisiana
GEORGE C. DENNEY, JR., Staff As$istant
I Chairman emeritus.
II
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
CONTENTS
Statements of- Page
Boyce, Richard Fyfe, DACOR----------------------------------- 186
Broy, Mrs. Cecil Norton ---------------------------------------- 182
Buell, Robert L., chairman, legislative committee of DACOR-------- 181
Hanes, John W., Jr., Administrator, Bureau of Security and Consular 155
Affairs, Department of State----------------------------------
Henderson, Hon. Loy W., Deputy Under Secretary of State for
Administration: 28
On S. 15, S. 109, and S. 730---------------------------------
On S. 443 and S. 2233-------------------------------------- 1128
0
On S.106------------------------------------------------- 114
121
On S.1044------------------------------------------------
On S.1502------------------------------------------------ 168
Hughes, William P., Director, Office of Foreign Buildings, Department 121
of State ----------------------------------------------------
Alvin, vice president American Merchant Marine Institute;
accompanied by Edward C. Phillips, staff of American Merchant 160
Marine Institute_______________
Shipley, Mrs. Ruth B., chairman, welfare committee of DACOR---- 184
Sparkman, lion. John, U.S. Senator from the State of Alabama___-- 179
Symington, Hon. Stuart, U.S. Senator from the State of Missouri--_- 8
Insertions for the record:
Notice of hearings, Congressional Record, June 23, 1959 ------------ 2
S. 15 and executive branch comments ---------------------------- 3
S. 109 and executive branch comments--------------------------- 6
S. 730 and executive branch comments___________________________ 7
Article from the Wall Street Journal, April 13, 1959________________ 10
Memorandum on foreign language training programs for USIA per-
sonnel and possible value of a Foreign Service Academy to this 13
agency-----------------------
Department of State intelligence report, August 5, 1958, on Soviet
language and area programs for Asia and Africa----------------- 14
Letter of July 6, 1959, to Senator Mansfield from Senator Smathers 27
on S.109--------------------------------------------------- 30
Letter and statement of July 6, 1959, to Senator Mansfield from Sen-
ator Yarborough on S. 730________________ --------
-------------
S.443 and executive branch comments___________________________ 31
S. 2233 and executive branch comments-------------------------- 89
Letter to Hugh S. Cumming, Jr., Director for Intelligence and Re-
search, Department of State, from John N. Thompson ----------- 104
Information on personnel action and policy within the Department
105
of State---------------------------------------------------
S. 106 and executive branch comments ---------------------------- 112
Letter of July 2, 1959, to Senator Mansfield from Senator Smathers 113
on S..106-------------------------
Memorandum on State Department recognition of importance of 117
Latin American relations -------------------------------------
S.1044 and executive branch comments ---------------------------- 120
Tables on Foreign Service buildings program---------------------- 1130
54
S. 2232 and executive branch comments--------------------------
Brief from State Department on bringing fee setting for consular serv-
ices to American ships and seamen under Administrative Proce-
dure 165
Act--------------
Letter of July 15, 1959, to Senator Mansfield, from Alvin Shapiro on 166
consular fees------------------------------------------------ 167
S.1502------------------------------------ ---- ----- -
Letter of May 27, 1958, to chairman, House Post Office and Civil
Service Committee from Director, Bureau of the Budget ---------- 169
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved! For Release 1999/0 ill QIA-RDP78-03721 A000400020007-7
Appendixes:
I. Letters and memorandum:
(a) Exchange of letters between Senator Fulbright and
Under Secretary of State Henderson r,garding Depart-
ment of State policy on, assignment o." Foreign Service
Page
personnel-----------------------
189
(b) Memorandum on salaries and other c)mpensation for
Foreign Service officers ---------------------------
198
(c) Letter to Senator Fulbright from Georg e G. Hill, secre-
tary, World Peace Committee of the New York. East
Conference of the Methodist Church ---------------
205
II. Questions by Senator Mansfield, and answers sup plied by Depart-
ment of State----------------
205
III. Letters relating to the establishment of a Foreign Service Academy:
(a) To Senator Morse from Prof. Raymond F. Mikesell,
University of Oregon----------------
236
(b) To Senator Mansfield from Miles D. Kc nnedy, director,
legislative commission of the America.i Legion -------
237
IV. Letters and statement on S. 1502:
(a) To Senator Case of New Jersey from Mrs. H. B. Hitch-
cock-------------------
238
(b) To Senator Allott from Mr. Edward N. Groth---------
238
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release 1999/08/27 : CIA-,RDP78-03721A000400020007-7
ADMINISTRATION OF THE DEPARTMENT OF STATE
AND THE FOREIGN SERVICE, AND ESTABLISHMENT
OF A FOREIGN SERVICE ACADEMY
U.S. SENATE,
SUBCOMMITTEE ON STATE DEPARTMENT
ORGANIZATION AND PUBLIC AFFAIRS
OF THE COMMITTEE ON FOREIGN RELATIONS,
Washington, D.C.
The subcommittee met, pursuant to call, at 10 a.m., in the Foreign
Relations Committee room, U.S. Capitol Building, Senator Mike
Mansfield (chairman of the subcommittee) presiding.
Present: Senators Mansfield and Aiken.
Senator MANSFIELD. The meeting of the subcommittee on State
Department Organization- and Public Affairs of the Committee on
Foreign Relations will come to order.
Today we are hearing testimony on a number of bills relating to
the .administration of the Department of State and the Foreign
Service, including several bills which would establish a Foreign Service
Academy.
I should like to begin by making a number of pertinent documents
part of the record. First, I shall insert in the record the notice of
these hearings which I put in the Congressional Record on June 23,
1959, and which contains a list of all the bills on which we are to take
testimony. The notice is accurate except for S. 1502, dealing with
annuities of retired Foreign Service officers. On the request of
Senator Sparkman, the author of that bill, we are going to postpone
temporarily taking testimony on that bill. I would also remind
members of the committee that on April 16, 1959, a hearing was held
on S. 1243 to establish standards of language proficiency and improve
recruiting for the Foreign Service. I should like to announce that
printed copies of that hearing will shortly be ready for distribution.
Second, I shall insert in the record a copy of each bill to be con-
sidered, followed by a copy of the comments of the Department of
State or other executive agency on the bill or, in appropriate cases,
a letter from. the Department of State in support of the bill. These
will be inserted at the appropriate places as we, take up the bills
grouped according to subject matter.
Third, I shall insert in the 'record an exchange of letters between
Chairman Fulbright and Under Secretary of State Henderson on the
subject of Department of State policy on assignment of Foreign
Service personnel.
Fourth, I shall insert a memorandum prepared by the Department
of State on the subject of salaries and other compensation for higher
ranking Foreign Service officers.
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
2 FOREIGN SERVICE ACT AMENDMENTS
Fifth, I shall insert a letter to Chairman Fulb-ight containing an
extraction from a report on improvement of recruitment and training
of diplomatic personnel, which was prepared by the World Peace
Committee of the New York East Conference of the Methodist
Church.
The third, fourth and fifth items will be inserted. in the appendix to
the printed hearings. (See pp. 189-205, appendix I.)
(The notice of hearings is as follows:)
JUNE 23, 1959.
NOTICE OF HEARINGS BEFORE THE SUBCOMMITTEE OD STATE DEPARTMENT
ORGANIZATION AND PUBLIC AFFAIRS OF THE COMMIT`CEE ON FOREIGN RE-
LATIONS, SENATOR MANSFIELD, CHAIRMAN
Mr. President I announce that the Subcommittee on State Department Or-
ganization and Public Affairs of the Committee on Foreign Relations will hold
public hearings beginning on Monday, July 6, 1959, at 10 a.m. in room F-53,
U.S. Capitol, on the following bills:
1. S. 443, Mr. Green (by request), January 17, 1959, to amend the Foreign
Service Act of 1946, as amended, and for other purposes.
2. S. 1243, Mr. Saltonstall (for himself and Mr. Mansfield), March 2, 1959, to
amend the Foreign Service Act of 1946, as amended, to establish standards of
foreign language proficiency for the Foreign Service of the United States-,? and for
other purposes.
3. S. 15, Mr. Symington, January 9, 1959, to provide for the establishment of
a U.S. Foreign Service Academy.
4. S. 106 Mr. Smathers, January 9, 1959, to authorize an Under Secretary of
State for Western Hemisphere Affairs.
5. S. 109, Mr. Smathers (for himself and Mr. Mansfiel(t), January 9, 1959, to
provide for the establishment of a U.S. Foreign Service Academy.
6. S. 730, Mr. Wiley (for himself, Mr. Mansfield, Mr. Neuberger, Mr. Yar-
borough, and Mr. Engle), January 28, 1959, to provide for the establishment of
a U.S. Foreign Service Academy.
7. S. 1044, Mr. Fulbright (by request), February 16, 1959, to amend the For-
eign Service Buildings Act of 1926, as amended.
8. S. 1502, Mr. Sparkman, March 23, 1959, to provide for adjustments in the
annuities under the Foreign Service retirement and disa)ility system.
9. S. 2232, Mr. Fulbright (by request), June 23, 1059, to repeal section 12 of
the act of June 26, 1884, prohibiting a charge or collection of fees by consular
officers for official services to American vessels and seamen, and to repeal the
provision in the act of June 4, 1920, authorizing the free i isuance of passports to
seamen.
10. S. 2233, Mr. Fulbright (by request), June 23, 1959, to amend the Foreign
Service Act of 1946, as amended.
(Matters in addition to those covered in S. 443.)
The subcommittee will take such time as may be necessary to hear all those who
wish to be heard on these bills. I should think the hearing; might last 2 or 3 days.
Depending upon the number of witnesses who ask to tes My, the subcommittee
reserves the right to limit the time available for oral prersentations, but written
statements of reasonable length will be received for the record.
ORDER IN WHICH BILLS ARE TO BE CONSIDERED
Senator MANSFIELD. Unless there are objections, I plan to proceed
in taking up the various bills we are considering today in the following
order: (1) Bills pertaining to the establishment of a Foreign Service
Academy, (2) bills which would amend the Foreign Service Act of 1946,
(3) the bill to authorize an Under Secretary of State for Western
Hemisphere Affairs, (4) amendments to the Foreign Service Building
Act, and (5) the bill relating to the collection Af fees by consular
officers.
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
FOREIGN SERVICE ACT AMENDMENTS 3
BILLS RELATING TO ESTABLISHMENT OF FOREIGN SERVICE ACADEMY
(S. 15, S. 109, and S. 730, together with executive branch comments
on each, follow:)
IS. 15, 88th Cong., Ist sess.]
A BILL To provide for the establishment of a United States Foreign Service Academy
Be it enacted by the Senate and House of Representatives of the United States of
America in Congress assembled That this Act may be cited as the "United States
Foreign Service Academy Acts'.
SEC. '2. The Secretary of State is authorized and directed to establish and main-
tain, in the middle western region of the United States, a United States Foreign
Service Academy (hereinafter referred to as the "Academy") for the instruction
and training of foreign representatives of the United States Government.
SEC. 3. The Secretary of State may appoint or assign such officers and civilian
instructors as the needs of the Academy require.
SEC. 4. The supervision and charge of the Academy shall be in the Department
of State, under such officer or officers as the Secretary of State may appoint for
or assign to that duty, and under such regulations as the Secretary of State may
prescribe.
SEC. 5. In the operation of the Academy the Department of State shall work
in conjunction with the Board of Trustees.
Sic. 6. (a) The Board of Trustees shall consist of-
(1) the Secretary of State;
(2) two educators of prominence appointed by the President;
(3) two Members of the United States Senate, of different political parties,
appointed by the President of the Senate; and
(4) two Members of the House of Representatives of different political
parties, appointed by the Speaker of the House of Representatives.
(b) Members of the Board of Trustees shall be appointed for two-year terms
and shall be eligible for reappointment.
SEc. 7. (a) The authorized. number of students at the Academy shall be as
follows :
(1) four students from each State, two nominated by each Senator from
the State;
(2) two students from each congressional district, nominated by the
Re resentative from the district;
3) two students from the Territory of Ilawaii, nominated by the Delegate
in Congress from the Territory;
(4) two students from Puerto Rico, nominated by its Resident Com-
missioner;
(5) three students from the District of Columbia, one nominated by each
of the Commissioners of the District of Columbia;
(6) one hundred and twenty-seven students from the United States at
large-
(A) one nominated by the Governor of each State;
(B) seventy-five nominated by the President: and
(C) three nominated by the Vice President.
(b) No person may be nominated under clauses (1) to (6), inclusive, of sub-
section (a), unless he is domiciled in the State or Territory, or in the congressional
district from which he is nominated, or in the District of Columbia or Puerto
Rico, if nominated from one of those places.
(c) If as a result of redistricting a State the domicile of a student, or a nominee,
nominated by a Representative falls within a congressional district other than
that from which he was nominated, he shall be charged to the district in which
his domicile so falls. For this purpose, the number of students otherwise author-
ized for that district shall be increased to include him. however, the number as
so increased shall be reduced by one if he fails to become a student at the Academy
or when he is finally separated from the Academy.
Sue. 8. In order to permit an orderly increase in the number of students at
the Academy during the period ending not more than four years after the entrance
of the initial class at the Academy, the Board of Trustees may limit the number
of students appointed each year during such period.
SEc. 9. The Academy shall operate as a coeducational institution and students
shall be appointed thereto on the basis of merit, as determined by a competitive
examination to. be given annually in each State and Territory, the District of
Columbia and the Commonwealth of Puerto Rico, at such time, in such manner,
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
4 FOREIGN SERVICE ACT AMENDMENTS
and covering such subject matter as the Secretary of State may prescribe. Stu-
dents shall be appointed in the order of their merit as established by such exami-
nation.
SEC. 10. The students of the United States Foreign Service Academy shall
receive the same pay and allowances as are received by ci.dets at West Point.
SEc. 11. The course of instruction and training for studonts at the Academy
shall be prescribed by the Secretary of State, and shall be ,he equivalent of the
curriculum prescribed by accredited colleges and universities as a prerequisite to
the granting of the degree of bachelor of arts. In prescribing such course of
instruction and training, the Secretary of State shall provide that special emphasis
be placed on the study of the history, culture, customs, folk.ore,.and language or
languages of the nations in which cadets may serve and pr( vide for field studies
in such nations. The Academy may arrange to assign temporarily selected
students to the Air, Military, and Naval Academies of the United States for
instruction in military observation. Upon satisfactory completion of the pre-
scribed course of instruction and training, students shall be granted the degree of
bachelor of arts.
SEc. 12. Each student selected for admission to the Academy shall sign an
agreement that, unless sooner separated, he will-
(1) complete the course of instruction at the Academy; and
(2) accept an appointment and service, as an of&cei- or employee of the
United States in any position, for which he is qualified by reason of his
special training at the Academy, for at least the three years immediately
following the granting of his degree from the Academy.
SEC. 13. (a) The course of study at the Academy shall, during each year of its
operation, be organized as follows:
(1) the months of September to May, inclusive, shall be devoted to class-
room instruction of students at the Academy;
(2) the period from June 1 to June 30, inclusive, shall be devoted to
annual leave for all students;
(3) the months of July and August shall be devoted to practical field train-
ing for students at the Academy.
(b) Such field training shall consist of assigning students for service positions
under appropriate departments of the Government, wheth ;r within or outside
the United States, by a faculty board on field training, with the approval of the
Secretary of State.
SEc. 14. (a) Each graduate of the Academy shall be available forappointment
as an officer or employee of the United States, in any position for which he is
qualified by reason of his special training at the Academy, in accordance with the
following priorities:
(1) the Department of State;
(2) the Department of Commerce;
(3) the Department of Agriculture;
(4) the Department of the Treasury;
(5) the Department of Health, Education, and Welfa ~e; and
(6) any other department, agency, or instrumentality )f the United States.
(b) The Secretary of State may, notwithstanding any pro' ision of the Foreign
Service Act of 1946, appoint a graduate of the Academy as an )fficer in the Foreign
Service of the United States.
SEc. 15. (a) There are authorized to be appropriated su,h sums as may be
necessary to carry out the provisions of this Act.
(b) The United States Foreign Service Academy shall have power to acquire
and hold real and personal property and may receive and accept gifts, donations,
and trusts.
Hon. J. W. FULBRIGET,
Chairman, Committee on Foreign Relations,
V.S. Senate.
DEAR SENATOR FULBRIGHT: I refer to Mr. Marcy's letter of January 14, 1959,
enclosing a copy of S. 15 introduced by Senator Symington in January 9, 1959,
to provide for the establishment of a U.S. Foreign Service Academy, and requesting
the comments of the Department of State on this bill.
The subject of the establishment of a U.S. Government institution for the
purpose of preparing officers for the Foreign Service has be 3n carefully studied
in the Department of State for a number of years and has gain been receiving
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 K?3 J ?1A000400W0007-7
Approved For Release R 8 viS lAT4RRfF
close scrutiny. This, I might add, is accountable for the delay in replying to
the inquiry regarding S. 15.
It has been, and continues to be, the opinion of the Department that the.
requirements of the Foreign Service are best met by the recruitment of officers
from widely varied backgrounds of education and experience. The responsi-
bilities of the Service fall into no set pattern and are of a nature that require a
high degree of initiative and individual thought. The Department believes that
a standardized course of training, especially on the undergraduate level, might
tend to create a uniformity which would inhibit to some degree these qualities
and prove a handicap rather than an advantage to an officer in coping with the
type of problems which he would encounter during his career.
The Department, as you know, is deeply concerned with the question of the
training of its officers and seeks every opportunity to improve this program.
It is still of the conviction, however that an undergraduate academy would
not be adaptable to the needs of the 'Foreign Service and it cannot recommend
the enactment of S. 15.
The Department has been informed by the Bureau of the Budget that there
is no objection to the submission of this report.
Sincerely yours,
WILLIAM B. MACOMBER, Jr.,
Assistant Secretary
(For the Secretary of State).
U.S. DEPARTMENT OF LABOR,
OFFICE OF THE SECRETARY,
Washington.
Chairman, Committee on Foreign Relations,
,U.S. Senate, Washington, D.C.
DEAR SENATOR FULBRIGIIT: This is in further response to Mr. Marcy's re-
quest for our comments on S. 15, a bill to provide for the establishment of a U.S.
Foreign Service Academy.
S. 15 would direct the Secretary of State to establish an undergraduate Academy
to train foreign representatives of the U.S. Government and would create priori-
ties among the executive departments in the employment of graduates of the
Academy.
The Department of Labor is particularly interested in the representation of the
United States in foreign labor affairs and recognizes the importance of develop-
ing capable personnel. However, we also consider it important that our repre-
sentation in foreign countries reflect a wide cross section of American life and
culture, and selection of personnel from a number of colleges and universities
tends to assure such diversity. Placing students in a specialized training institu-
tion at the beginning of their college careers might not be consistent with this
Objective.
We also question the desirability of creating priorities in the employment of
graduates of the proposed Academy. In the usual course of college studies,
undergraduates are permitted a measure of concentration in fields of special in-
terest to them, and it is anticipated that under the proposed legislation some
students could obtain special training in labor affairs. We believe that these
students should be available for appointment in the Government agency which
can best utilize their special training rather than according to a specific priority
system. If priorities are provided, however, the Department of Labor should
receive a priority appropriate to its position as one of the four Departments with
statutory membership on the Board of the Foreign Service.
In view of the importance of labor affairs in our foreign relations, we are of the
opinion that the curriculum referred to in section 11 should be broadened to in-
elude specifically the problems and aspirations of foreign workers.
The Bureau of the Budget advises that there is no objection to the submission
Of this report.
JAMES T. O'CONNELL,
Under Secretary of Labor.
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approves For ReleasFf9168Y :A'fi3P7'3721A000400020007-7
[S. 109, 86th Cong., 1st sess.]
A BILL To provide for the establishment of a United States Fc reign Service Academy
Be it enacted by the Senate and House of Representatives of the United States of
America in Congress assembled, That this Act may be cited as the "United States
Foreign Service Academy Act".
SEC. 2. The Secretary of State is authorized and directed to establish and
maintain, in or near the District of Columbia, a United States Foreign Service
Academy (hereinafter referred to as the "Academy") for the instruction and
training of diplomatic cadets in preparation for service is officers in the Foreign
Service of the United States.
SEC. 3. (a) The Academy shall be under the general supervision of the Director
General of the Foreign Service Institute and under such -egulations as the Secre-
tary of State may prescribe.
(b) The course of instruction and training for diplomatic cadets at the Academy
shall be prescribed by the Secretary of State and shall be the equivalent of the
curriculum prescribed by accredited colleges and univers ties as a prerequisite to
granting of a master's degree. Upon satisfactory completion of the prescribed
course of instruction and training, diplomatic cadets sha l be granted a master's
degree..
(c) The Secretary of State may appoint or assign such officers and civilian in-
structors as the needs of the Academy require.
SEC. 4. (a) The corps of diplomatic cadets shall consist of such individuals as
may be selected and admitted to the Academy upon competitive entrance exami-
nations as prescribed by the Secretary of State.
(b) Diplomatic cadets while in attendance at the Academy shall be entitled to
quarters and subsistence.
SEC. 5. There shall be appointed each year a Board of 1isitors to the Academy
which shall consist of five members from the Committee on Foreign Relations of
the Senate and five members from the Committee on Fore gn Affairs of the House
of Representatives, to be appointed by the respective chairsaen of such committees.
The Board of Visitors shall exercise the same functions and be entitled to the same
expense allowance as is provided in the case of the Board cf Visitors to the United
States Military Academy.
SEC. 6. Each diplomatic cadet selected for admission to the Academy shall sign
an agreement that, unless sooner separated, lie will-
(1) complete the course of instruction at the Acad,lny; and
(2) accept an appointment and service, as an officer in the Foreign Service
for at least the three years immediately following the granting of his degree
from the Academy.
SEC. 7. There are authorized to be appropriated such sums as may be necessary
to carry out the provisions of this Act.
Hon. J. W. FULBRIGB:T, MAY 27, 1959.
Chairman, Committee on Foreign Relations,
U.S. Senate.
DEAR SENATOR FULBRIGHT: I refer to Mr. Marcy's letter's of January 14, 1959,
and January 29, 1959, enclosing copies of S. 109 and S. 730 introduced by Senator
Smathers and Senator Wiley, respectively, providing for the establishment of a
U.S. Foreign Service Academy, and requesting the comments of the Department
of State on these bills.
The question of establishing a U.S. Government institution for the purpose of
preparing officers for the Foreign Service is one to which the Department has
devoted much thought and consideration. During recent months it has again
received close study and particular attention has been given the proposal included
in S. 109 and S. 730, that the Academy be established on t e postgraduate level.
It is to this prolonged consideration and discussion that our delay in replying to
these inquiries may be attributed.
I know that you are aware of the serious importance -which the Department
attaches to the training of its officers. We are continlally endeavoring to
improve our training programs. During recent years, with the help and counsel
of the Congress, considerable progress has been made in this field and we believe
that the results are increasingly evident. Through the fm ilities of the Foreign
Service Institute, of colleges of the armed services, and of various private educa-
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release1%9 /QN2Z CdA 7*M721A00040b020007-7
tional insitutions, the qualifications of our officers are being raised each year.
This is especially true in the linguistic field.
The Department agrees that a postgraduate academy designed to train young
men and women prior to their entrance into the Foreign Service would offer a
certain number of advantages. Before assuming the responsibilities connected
with establishing and conducting the operation of such an academy, however,
the Department would prefer to obtain more experience with the training facilities
already available to it and to ascertain the qualifications of the young men and
women coming into the Service from our colleges and universities, which are
augmenting and improving their training-facilities. After we have experienced
the results of our close cooperation with our institutions of higher learning, and
of the progress made by the Foreign Service Institute, we shall be in a better
position to make recommendations regarding the establishment of a U.S. post-
graduate academy.
The enactment of S. 109 and S. 730 cannot, therefore, be recommended at
this time.
The Department has been informed by the Bureau of the Budget that there
is no objection to the submission of this report.
Sincerely yours, WILLIAM B. MACOMBER, Jr.,
Assistant Secretary
(For the Acting Secretary of State).
IS. 730, 86th Cong., 1st sess.]
A BILL To provide for the establishment of a United States Foreign Service Academy
Be it enacted by the Senate and House of Representatives of the United States of
America in Congress assembled, That this Act may be cited as the "United States
Foreign Service Academy Act".
SEC. 2. The Secretary of State is authorized and directed to establish and
maintain, in or near the District of Columbia, a United States Foreign Service
Academy (hereinafter referred to as the "Academy") for the instruction and
training of diplomatic cadets in preparation for service as officers in the Foreign
Service of the United States.
SEC. 3. (a) The Academy shall be under the general supervision of the Director
General of the Foreign Service Institute and under such regulations as the Secre-
tary of State may prescribe.
(b) The course of instruction and training for diplomatic cadets at the Academy
shall be prescribed by the Secretary of State and shall be the equivalent of the
curriculum prescribed by accredited colleges and universities as a prerequisite to
granting of a master's degree. Upon satisfactory completion of the prescribed
course of instruction and training, diplomatic cadets shall be granted a master's
degree.
(c) The Secretary of State may appoint or assign such officers and civilian in-
structors as the needs of the Academy require.
SEC. 4. (a) The corps of diplomatic cadets shall consist of such individuals as
may be selected and admitted to the Academy upon competitive entrance exami-
nations as prescribed by the Secretary of State.
(b) Diplomatic cadets while in attendance at the Academy shall be entitled to
quarters and subsistence.
SEC. 5. There shall be appointed each year a Board of Visitors to the Academy
which shall consist of five members from the Committee on Foreign Relations of
the Senate and five members from the Committee on Foreign Affairs of the House
of Representatives, to be appointed by the respective chairmen of such committees.
The Board of Visitors shall exercise the same functions and be entitled to the same
expense allowance as is provided'in the case of the Board of Visitors to the United
States Military Academy.
SEC. 6. Each diplomatic cadet selected for admission to the Academy shall sign
an agreement that, unless sooner separated, he will-
(1) complete the course of instruction at the Academy; and
(2) accept an appointment and service, as an officer in the Foreign Service
for at least the three years immediately following the granting of his degree
from the Academy.
SEC. 7. There are authorized to be appropriated such sums as may be necessary
to carry out the provisions of this Act.
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approve8l For Releasagift9i A I pM7ER3721A000400020007-7
U.S. DEPARTMENT OF LABOR,
OFFICE OF THE SECRETARY,
Hon. J. W. FuLBRIOHT, Washington, May 27, 1959.
Chairman, Committee on Foreign Relations,
U.S. Senate, Washington, D.C.
DEAR SENATOR FuLBRIOHT; This is in further reply to Mr. Marcy's request for
our views on S. 730, a bill "to provide for the establishment of a United States
Foreign Service Academy."
The general purpose of the bill is similar to that of S.: 5 with respect to which
we have previously transmitted our views to the Committee. However, the subject
bill differs from S. 15 in that, among other things, it dogs not prescribe specific
subjects for study and would create an academy limited to providing training for
a graduate master's degree. Also, the bill creates no prio -ities among the various
Departments and agencies with respect to the employment of graduates. Accord-
ingly, the questions which we raised with respect to these features of S. 15 would
not appear to be applicable to the subject bill.
We recognize the importance of securing capable and properly trained personnel
for the Foreign Service, and necessary measures which wculd effectively promote
this objective have our support. The desirability of creating a Federal academy
of the kind provided for in the bill would therefore appear to depend to a large
degree upon the ability of private and State colleges and universities to attract
qualified students for training toward Foreign Service carvers and to provide edu-
cational programs that adequately prepare them for s ich careers. For this
reason, we would prefer to leave further comment to thcse agencies having the
widest knowledge of the limitations and potentialities of existing educational
facilities.
The Bureau of the Budget advises that there is no objection to the submission
of this report.
Sincerely yours,
JAMES T. O'CONNELL,
Under Secretary of Labor.
(See also pp. 6-7 for letter of May 27, 1959, to Senator Fulbright from
William B. Macomber, Jr., Assistant Secretary of State, on S. 109 and
S. 730.)
Senator MANSFIELD. The first witness, on his bill to establish a
Foreign Service Academy, is our distinguished colleague, the Senator
from Missouri, Senator Symington.
STATEMENT OF HON. STUART SYMINGTON, U.S. SENATOR FROM
THE STATE OF MISSOURI
Senator SYMINGTON. Thank you, Mr. Chairman.
May I proceed with a short statement?
Senator MANSFIELD. Surely.
Senator SYMINGTON. Mr. Chairman, I want to thank you for this
opportunity to appear before your committee in sipport of my bill,
S. 15, to establish a U.S. Foreign Service Academy.
I am sure the Foreign Relations Committee study of the various
proposals in this important field will be most productive, and I hope
the Congress will soon act to establish such a school.
UNDERGRADUATE SCHOOL TO TRAIN FOR GOVERNMENT CAREER IN
OVERSEAS SERVICE
The bill I introduced last January would establish a 4-year under-
graduate school for the training of our overseas reprf sentatives.
Graduates of this school would be available for thy; Foreign Service,
for work in the State Department, and for assignments with any.
other agencies of the Government which represent is abroad.
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release I ~P,, 8?Zvi&I,tU, 1A0004004,b20007-7
Appointment to such an Academy would be made on the basis of
competitive examinations; and on an allocation similar to that of our
three military service academies.
The curriculum of the Academy should, of course, evolve from
experience rather than be established at the outset through legislation.
It would seem, however, that the courses of study might well be
oriented toward liberal arts, with special emphasis on the study of
the history, culture, customs, and languages of the area in which the
student was planning to serve.
Field studies in these countries in the summer months would be a
valuable part of this training.
It would be important for the training in the Academy to be as
broad as possible. With proper supervision, judicious selection of
faculty, and the use of visiting professors, the students should be
able to achieve the necessary flexibility of skill and viewpoints that
our representatives overseas should have.
ADVANTAGES OF FOREIGN SERVICE ACADEMY
The establishment of an Academy of this character would have
many advantages.
First, it would result in our sending better trained:representatives
to foreign countries.
Second, it would provide a much broader opportunity for American
young people interested in serving their country abroad.
And, third, it would provide our Government with a pool of well-
trained personnel with a specialty which could be effectively utilized.
Most important, it would put the training and recruitment of For-
eign Service officers on a far sounder basis. In the military service
academies we have seen that the experience of a 4-year training pro-
gram, with students of common interests living together, results in a
spirit and dedication that can only operate to the benefit of our
country.
The United States is, and for a number of years has been, engaged
in a protracted conflict with the Sino-Soviet Communist conspiracy.
This conflict will continue for a long time.
We are now operating three military academies, training our
youth to lead us in case we are attacked in a hot war. Surely we can
afford and should promptly provide a Foreign Service Academy to
train our youth for the cold war in which we are being attacked
economically, politically, and psychologically.
The training we provide in a Foreign Service Academy would be
of great benefit not only in combating communism, but also in show-
ing the world the opportunities that exist for a better life through
freedom and democracy.
So often it is asked, "What do the peoples of the world want?"
To live in freedom and be treated with dignity; to have a better
standard of living and medical care, and an opportunity to provide
for themselves and their families in a world of peace. These are the
things that Americans have been working on for years.
If we can sell our way of life abroad, we can win this conflict.
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approvgbl For Rele %1%92Z9~17 : CIA-RDP78-03721A000400020007-7
E ACT AMENDMENTS
U.S. TRAINING OF DIPLOMATIC PERSONNEL COMPARED
TO THAT OF OTHER COUNTRIE:
Our failings in this area, to date, have not corn from lack of effort.
.Our overseas representatives, for the most part, ar( dedicated and hard
working. However, we have not kept up with other countries in
recruiting and training a skillful force of career fo ?eign servants.
Mr. Chairman, I ask at this point to insert ir. the record certain
information about the training programs in other 3ountries, including
our Russian competitors.
This would include a report in the Wall Street ,Journal of April 13,
a report from the Legislative Reference Service, and an intelligence re-
port from the Department of State on Soviet language and area
programs.
Senator MANSFIELD. Without objection, so ordered.
(The documents referred to follow:)
[From the Wall Street Journal, Apr. 13, 1959]
PEOPLE PROBLEM OF U.S. ABROAD-IT'S HARD To FIND COMPETENT AMERICANS
FOR SOUTHEAST ASIA ALONE
(By Vermont Royster)
RANGOON.-U Hla Myint, until 6 months ago, was a quiet Oxford don trying
to give a sense of history to a new generation of students, including many Ameri-
cans. Today, answering the call of patriotism, he is back here in his native Burma
as the head of the University of Rangoon.
In neighboring Thailand, Pote Sarasin, descendant of one of the noble families
of old Siam, has emptied his office of the legal tomes he o ice studied at Temple
Bar, that scholarly cloister where, since before the days of 'lord Coke, the British
have trained their best legal minds. Today his bookshel-,,es are lined with the
plans and directives of the military alliance of the Southea:+t Asia Treaty Organi-
zation, over which he presides as Secretary General.
In what used to be Indochina, Vu Van Thai, a native of tl.e Communist-overrun
city of Hanoi, is a graduate of the Sorbonne who spent some 16 years as an engi-
neer in Europe. Today, caught on a spoke of fortune whi h has already lost his
father to Red assassins, he has come home to serve in the Cabinet of the Republic
of Vietnam.
These three, from three different countries, each in his separate way represents
a small group of people whose importance to southeast Asia is far out of propor-
tion to their numbers. These are the people with whom Americans abroad must
work. They are, at one and the same time, the best hope for U.S. policy in this
part of the world and also one of the biggest problems for U.S. policymakers
overseas.
HOPE AND TROUBLE
The hope lies in the fact that they are Western educal ed, Western oriented,
and hold key positions of influence as leaders and opinion molders. Through
them the United States has its best chance to persuade thm minds of Asia.
The trouble comes from the fact that they are, all too cften, better educated,
more at home in the world and more knowledgeable of its ways, than the American
emissaries sent out from Washington to rub off a little civilization on the "back-
ward peoples." So one of the results of their meeting is a clash of minds and a
resentment both ways.
Too many Americans-and this one can be included-came to southeast Asia
with preconceptions that are only half-truths. They are piepared by their movie
travelogues and their guide hooks for the backwardness, the slowness of the people,
the poverty and the ignorance, all of which exist. They are thus caught by
surprise to find that in each of these countries, from Vietnam around to Burma,
there is an elite whose members need not take a back seat to anyone in education
or ability.
And far too many Americans, being thus surprised, are unwilling or unable to
adjust to the fact that these people have as much to teach as they have to learn.
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release 1999/08/27 : CIA-RDP78-03721A00000020007-7
ICE ACT AMENDMENTS
E
V
R
REIGN S
Nothing is more explosive than one man's evaluation of others; nothing more
fraught with controversy than the subject, brought to public attention in such
books as "The Ugly American," of the caliber of our civil servants abroad. So
what follows must be a purely personal appraisal, subject to all the failings sub-
jectively is heir to. For tbat reason it would be unfair to single out names and
offices, to pillory a few people simply because they happened under a wandering
visitor's eye.
Yet the incidents of a 7-week journey which build the impressions are real.
There was the U.S. Information Officer, 18 months in his post, who did not even
know the location of the foreign office in the country on which he was supposed to
be a political expert. Worse, he was totally unembarrassed by his ignorance, as
if it were a matter of no consequence that he had never been inside the place.
Or there was the economic adviser in the International Cooperation Adminis-
tration mission who could not pronounce the name of the new economics minister,
could not spell it, knew nothing about the man, and was surprised that the visitor
was interested.
Or the urban planning adviser, also attached to ICA, who complained his pro-
gram would be "much further along" except that the native authorities stub-
bornly-his word was "mulish"-did not take his advice.
The incidents could be multiplied endlessly. There was the librarian of the
U.S.-sponsored local library, for example, who explained the preponderance of
English-language publications on the grounds that "foreign books," that is those
in the native language, were harder to catalogue, more difficult to recommend to
readers. It seemed a small matter that this limited the library mainly to English-
speaking natives.
Of course there were also completely different encounters. There was the
American ambassador who, taking pity on it dinner guest caught between two
non-English-speaking ladies, could and did interpret between them in Chinese,
the lingua franca of southeast Asia. And the eager, young Foreign Service officer
who showed his energy at digging into the country by the scope of his luncheon list.
And the consul general who could talk about his accredited country with interest,
knowledge, and penetrating insight.
It's hardly fair to imply, either, that all the bumbling Americans are in Gov-
ernment service. By and large the representatives of American business in the
area try harder to establish ties with the local people; it's dollars and cents to
them. But the modern version of the Arkansas Traveler is not absent, nor the
tourist right out of Mark Twain's "Innocents Abroad," and a cringe is where
you find it.
Yet the qualifications and the exceptions do not diminish the problem, and
when all is said it is still the Government people who have the greatest impact
on these countries. All too often the quality of them subtracts from other gains
to U.S. interest; sometimes it cancels them out altogether.
Consider the situation with a man like Vu Van Thai, for example, or U Hla
Myint. Vu Van Thai speaks his native language, French, like a native, and in
English is more articulate than many native Americans. U Illy Myint, also
multilingual, may be short in educational methodology, but Oxford very likely
gave him as good an education as State Normal College.
But such men are called upon to deal with Ameircans who are not always even
one-language men-"the plan is to correlate the educational sequence from ele-
mentary through graduate school and phase out the program by 1961 and they
are forced to meet them on subservient terms. After all, the Americans have the
money.
This language matter, let it be said, can be vastly overdone in criticism. Lan-
guage proficiency is not necessarily essential, and anyway, it would admittedly
be a lifetime's work to learn all the languages of southeast Asia. Certainly there
are other qualifications more important in a public servant than the ability to
speak the local language. IT'S SYMPTOMATIC
Nonetheless, the inability to speak either the local language or some other,
such as French or Chinese, that can serve as a bridge, does imprison the Ameri-
can. He can exchange ideas readily only with the local people who speak English;
much of the confusion, frustration, and misunderstandings in our foreign aid pro-
gram stem from just this thing. Beyond that, the frequent lack of any knowl-
edge of the language whatever (even such phrases as "Thank you") bespeaks a
e deficiency is simply symp-
a
lan
Th
g
gu
e
general lack of interest in the country.
tomatic of something more important.
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
FOREIGN . SERVICE ACT AMENDMENTS
Here the reporter, to be fair, must make some distinctions. By and large the
professional career people in the Foreign Service encountered along the way do,
seem to bring a certain basic competence to their jobs and take at least elemen-
tary steps to establish a rapport with the people o;' their accredited countries.
Some are really impressive. But the foreign aid pers~rnnel in the U.S. operations
missions, as another generalization, are unimpressive, And many U.S. informa-
tion personnel leave a bad impression.
One reason for this, if a personal opinion may be ventured, lies in the sources
from which some of the U.S. personnel abroad, exce ?t the Foreign Service, are
drawn.
Take one old acquaintance, met unexpectedly aloi.g the way. Back in 1935
or thereabouts he was working for the old Resettlement Administration, of New
Deal days. Since then he has moved from one temporary Government agency
to another RA giving way to O W M and OW M to OPS, as each in turn disappeared.
Now he's with USOM in a distant corner of southeast Asia.
It would be surprising if he took any real interest in the country he inhabits,
its langua~e, its customs, its ways of doing things. What interests him is the
"program, ' or rather the particular part of it on which he must write reports.
USOM may disappear soir.eday, and he'll need another job in an alphabetical
agency.
It's a revelation, too, to look at the file cabinets full of reports emanating from
our foreign aid mission which fill just one small office of one department of one
of the countries we are aiding. The local official point ed them out to this visitor
with a smile, but it was a sad smile.
The Americans of this group too often come out here full of fright about the
typhoid water and cholera-laden lettuce. They tend to congregate in "settle-
ments," complaining about the mosquitoes and the dirty floors of the pagodas,
centering their lives about the ICA equivalent of the PX, and enjoying their
servants while they serve out their 2- or 3-year term.
FEW COMMON INTERESTS
In the nature of things, not many of them can have -,lose associations with the
nationals of the country. Quite apart from the langua;e barrier, they have little
in common with the majority of the natives who are---just like the guidebooks
say-poor and ignorant. At the other end of the spec ;rum the educated elite of
the country have little in common with many of these Americans.
The average American, especially if he's a moviegoer, s apt to expect the grand-
son of the Little Prince in the "King and I" to look like Yul Brynner and use
phrases like "is a puzzlement." But he would be hare. put, even with his A.B.,
to hold his own with that grandson, H.R.H., the Prince Viwat, Oxford graduate,
in a discussion of monetary theory, comparative philosDphy or the development
of the Sanskrit alphabet. He might even find himself more taught than teaching
if he called at the Prince's bank to discuss a credit question.
Though the number of such men in these countries is small, it is not minute.
U San Lin, president of the Union Bank of Burma, is another Oxford man; the
Thailand Ministry of Finance couples Nai Jote Birmingham University, and
Dr. Serm Vinicchayakul, University of Paris; ~ecretary Thuan of Vietnam's,
presidential staff bears a Ph. D. in economics from Geneva. And the list could.
be readily enlarged.
These men are not averse to both help in dollars ar.d technical aid for their
country from the United States. But they are not happy to be called to sit at
the feet of Westerners who feel themselves superior, and yet to whom, after a few
minutes' conversation, these Asians feel themselves equ?,1 or superior.
And explain it as you will, it is still unfortunate. For the men of this caliber in
these countries are men who can do the most good for t .ie United States and for
Western viewpoints. Indeed, by education and background they are already
pro-Western. Somehow, and in some fashion, the United States must cultivate
them, not alienate them with ignorance, disinterest, and poor manners.
The answer is not easy. Perhaps it is impossible, so lung as we try to flood all
these countries with American advisers. If men are to be found who can lift up
these "backward countries" they must come from among just such local people
as the engineer from Hanoi, the barrister from Bangko c and the educator from
Rangoon.
Certainly it is a tall order even for America to find enough Americans competent
to remake all of southeast Asia, much less the world.
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release 1999/08'f ? C - 721A000499020007-7
FOREIGN S C1;
THE LIPRARY OF CONCRESS,
LECISLATIVE REFERENCE SERVICE,
Washington, D.C., May 96, 1959.
To: Hon. Stuart Symington.
From: Foreign Affairs Division.
Subject: Foreign language training programs for U.S. Information Agency
personnel and possible value of a foreign service academy in this Agency.
The USIA provides the opportunity for a small number of its staff to receive
full-time foreign language training each year. The Agency feels that the need
for officers with foreign language proficiency greatly exceeds the present number
available and it is expected that the language-training program will be expanded
gradually over the coming years.
The major reasons why language needs have not been met appear to be lack of
incentives to learn the more difficult exotic tongues coupled with the fact that
most posts in the Far East, Middle East, and Africa are considered hardship
posts. At the same time it is apparent that a foreign service academy could be
useful to the USIA at this and related points.
The USIA has authorized full-time foreign language training for about 60 to 70
members of its staff each year since July 1, 1956. Before that date language
training was provided only on a part-time basis at some overseas posts. Part
time instruction also continues today. "Full time" training means 6 to 8 hours
per day with courses running from 4 months for most of the Romance languages
to as long as 30 months for Chinese and Japanese.
During fiscal year 1959, 87 USIA personnel have been enrolled in full-time
foreign language courses. The number studying each language follows:
French, 10 Thai, 4 Turkish, 2
Spanish, 10 Vietnamese, 3 Burmese, 1
Arabic, 8 Czechoslovakian, 2 Hausa, 1
German, 8 Hungarian, 2 Italian, 1
Japanese, 8 Indonesian, 2 Persian, 1
Korean, 2 Rumanian, 1
Hindi, Chinese, 4 7 Polish, 2 Russian, 1
H
test at the beginning of the course and also one which determines their current
knowledge, if any, of the foreign language. A proficiency test is given at comple-
tion of the course. It is expected that students can acquire a good working
knowledge of the language during the course and recent test scores show that a
majority of the students are successful.
At present, most of the course work is taken at the Foreign Service Institute
(FSI) in Arlington, Va., or at the FSI overseas field schools. The FSI provides
foreign language training to Federal Government officers in all departments
dealing with foreign relations though it was established to serve primarily Foreign
Service officers. On September 30, 1958, there were 65 USIA staff enrolled in
foreign language courses. Of this number 38 were attending the FSI and 11
were at FSI field schools. However, the remaining 16 were studying at univer-
sities, colleges, or commercial language schools. It is reported that the non-
Government schools were used because the FSI did not offer the needed languages
that year or because advanced training was required. In some cases only one or
two personnel need training in a particular language, such as Hausa, or Swahili
and it has not seemed financially practicable to employ a special teacher for so few
students.
The USIA and a Foreign Service Academy.-With the expanding need for extend-
ing foreign language training to Federal employees it is possible that a Foreign
Service Academy might soon find it financially possible to provide Government
facilities for training even in the less frequently taught foreign languages. This
would eliminate the necessity of using colleges and commercial training schoolss
The possibility of providing some USIA staff with opportunities for intensive
geographic area study is perhaps a much greater potential value of the proposed
Foreign Service Academy to the USIA. At present each new USIA officer re-
ceives an 8-week training program, plus Agency orientation, before his first assign-
m.ent. This training consists of four 2-week courses in American civilization;
communism, communications, and area study. Area study consists mainly of
interviewing at the State Department, CIA, and other Government agencies in
the country or area to which the new staff member will be assigned.
43120-59--2
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 ApprovefiFor ReleaMR19 9/ rE: CIA-RDP78 03721A000400020007-7
Discussions which I have had with USIA training personnel elicited a strong
feeling on their part that the absence of intensive area . tudies were a serious gap
in:the Agency's training program. At the present time it is possible in only rare
instances to send a USIA man to a college or universit-r to undertake prolonged
study of the politics, culture, history, etc., of the area to ' which he will be assigned.
A Foreign Service Academy could provide for the area training of many more
USIA professional staff. Equally significant, the establis iment of a Foreign Serv-
ice Academy that trained USIA staff as well as State De )artment Foreign Service
officers would give increased recognition to the fact that USIA is becoming an
important and permanent instrument of U.S. foreign po..icy.
ARTHUR H. DARKEN.
SOVIET LANCLIACE AND AREA PROGRAMS FOR ASIA AND AFRICA I
I. MAJOR TRENDS
The following conclusions regarding Soviet training and research programs
on the languages and areas of Asia and Africa can be di awn from existing infor-
mation.
(1) The Soviet language and area training programs now in existence are of
modest size.
(2) However, Soviet training and research programs ire growing with speed.
These programs began their recovery by 1950 following wartime neglect, received
fresh impetus after the February 1956 Soviet Party Congress.
(3) The generally high level of language and area competence of Soviet
diplomatic officers stationed in Asian and African countres attests to the quality
of training offered by the leading Soviet institutions.
(4) Technical assistance personnel serving abroad usual] y have not had language
and area training, but propaganda has exploited exceptional instances in order
to create an impression that the U.S.S.R. has large nummrs of language-trained
technicians available.
(5) The experimental program of teaching exotic languages in Soviet 10-year
schools has not yet had any effect upon Soviet operations abroad. Soviet au-
thorities appear to regard the program as successful and have taken steps to
expand it further. Should the program continue to grove at its present rate, the
U.S.S.R. in a decade or two would have a supply of hundreds of individuals
who could combine exotic-language proficiency with a variety of trades and
professions.
(6) Along with the growth in the size of Soviet research and training programs
there has been increasing emphasis upon those aspect:; which might support
Soviet operations. In language training the spoken language is stressed while in
research contemporary topics or topics with contemporary implications are the
rule.
(7) Increasing investment in training, research, and publication facilities points
to prolonged growth of Asian and African studies in the U.S.S.R.
(8) Hasty generalizations about the quality of Soviel research on Asia and
Africa should be avoided. A small but growing portion )f the total is excellent
work which is praised by Western experts for its scholarship and objectivity.
Some Soviet publications are outright propaganda with no pretentions to scholar-
ship. Between the two extremes are books and articles which contain varying
combinations of objectivity and Marxism.
(9) The Eastern European countries are slowly begi fining to expand their
research programs along the lines of Soviet developments.
Soviet diplomatic personnel are generally well-trained it the language and area
of the country to which they are assigned; Soviet technical assistance personnel
are not.
I Department of State, Intelligence Report No. 7783, August 5, 1958. T lis is an initial report on the
status of Asiau and African language and area training in the U.S.S.R. and )',astern Europe. It is as com-
prehensive a survey as could be presented on the basis of information available from a variety of sources.
However, it admittedly has gaps In matters of detail, and these will be filled in in insubsequent reports as
warranted by new information and new developments.
This report was prepared from information available through August 5, 195, t, by the Division of Research
and Analysis for the Soviet Union and Eastern Europe with the cooperation o'the Division of Research and
Analysis for the Near East, South Asia, and Africa and the Division of Research and Analysis for the Far
East.
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For ReleaseOR 999/ / 7E:Ac1AA 7N9?721A00040020007-7
Diplomats.-The high level of language and area competence of some of the
younger Soviet diplomatic officers is evidence of the high quality of training
offered by the best Soviet institutions. Before arriving at their posts, Soviet
diplomats for the most part have had at least some training on the area and
usually not less than a fair degree of competence in the local language. Such
preparation appears to be universal among younger officers whether they have
been recruited from regular universities or trained at the Ministry of Foreign
Affairs school.2
The Soviet Foreign Minister take pains to encourage its officers to study
foreign languages and to become specialists. The Ministry carries on what
appears to be a systematic program of reassigning personnel to the same post or
to posts in the same area in order to promote area specialization. Officers fre-
quently receive additional training or tutoring at their posts abroad. Soviet
officers are said to receive a bonus equal to 10 percent of their salaries for passing
examinations in European languages and 20 percent for exotic languages.
The language and area competence of diplomatic representatives of bloc coun-
tries appears to be somewhat spottier.
Technical assistance personnel.- Soviet technical assistance personnel are not
usually specially trained in the language or area of the countries to which they
are sent. They generally rely on interpreters and frequently use the Western
language which is best known in the underdeveloped country in which they are
working. Soviet technicians tend to have relatively narrow specialties, and as
result they are often assigned for short tours of duty while a particular phase of a
project is being carried out. More often than not, Soviet technicians appear to
be under instructions to avoid unnecessary contacts with local citizens, and they
are assisted in not drawing attention to themselves by their low salary scales and
standard of living, which prevents them from appearing conspicuously wealthy
by local standards.
However, the Soviet Union has fostered the myth that it has large numbers of
language-trained technicians available by using its small supply of them to
maximum effect. For example, in 1956 the U.S.S.R. offered to supply the
Bombay Technological Institute, through UNTAR and UNESCO, with 15
Hindi-speaking Russian instructors. Long before the school was ready to open
its doors in the summer of 1958, the Hindi-speaking Russians were famous the
world over. At the-same time the offer was made to India, however, the Soviet
Union was recruiting Indians to serve as translators in Moscow.
III. EXOTIC LANGUAGES IN TIIE 10-YEAR SCHOOLS
Experimental program.-More than a dozen Soviet schools are now taking part
in an experimental program, begun in 1956, of teaching Near Eastern and Asian
languages to pupils beginning in the second grade, i.e., from the age of 8 years.
In Moscow 150 pupils at boarding school No.- 23 study either Hindi or Urdu,
while Chinese and Hindi are taught at two other boarding schools in Leningrad.
However, the bulk of the schools participating in the program are in areas in-
habited largely by non-Russian nationalities. In Tashkent five schools teach
one or more of the following languages: Hindi, Urdu, Chinese, and Arabic. In
Stalinabad two schools teach Persian and Arabic, and at Baku several schools
teach Persian and two teach Arabic. Persian is taught at school No. 70 in Ashka-
bad. A total of three schools in Samarkand and Bukhara teach Persian and Urdu.
Emphasis in the 10-year schools is on the spoken language rather than on exer-
cises in reading and translating. In teaching Urdu, for example, "throughout
the entire lesson the teacher strives to speak to the children only in Urdu, which
facilitates their development in the spoken language" (Teachers' Gazette, Mar.
11, 1958).
Success of the experiment.-Soviet authorities appear to regard the program as
having been successful and several steps have been taken to support and expand
it. No textbooks were available when the program was initiated. A recent
Tashkent news story indicated that a special text for teaching first-year Hindi in
schools is now available and a second-year text is in preparation. Textbooks for
fourth and fifth classes in Persian have recently been issued in Baku.
There now appears to be a more regular supply of teachers for the program.
At least some of the students of Eastern Languages at the Central Asian State
University in Tashkent are preparing to be teachers; a number of them were re-
ported to be practice teaching in Tashkent schools during the past academic year.
2In large missions in Western Europe standards for language proficiency and knowledge of the area
appear to be lower than in the rest of the Soviet diplomatic service.
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approvedll~or Released' Q / TC- 9&4 P78 0 372IA000400020007-7
An exotic language was offered as a major in a pedagogical institution for the
first time last fall when the Niziami Pedagogical Institute of Tashkent offered.
a major in the language, literature, and history of Korea.
Expansion to Tatar schools.-Greater use of non-Eussians for contacts with.
Eastern countries is foreseen in the proposal to exten?i the program of teaching
Arabic to the schools of the Tatar Autonomous Sovik t Socialist Republic. Ac-
cording to the proposal,3 instruction in Arabic is to be initiated on an experimental,
basis in not more than two or three Tatar schools, pres imably in the forthcoming.
academic year.
IV. UNIVERSITY TRAINING PROGPAMS
Undergraduate training programs are largely concentrated in Moscow, Lenin--
grad, and Tashkent. Small additional facilities exist in Baku and Kazan, where
they are incidental to departments of eastern studies, which are primarily con
cerned with Soviet Central Asia.
A. Institute of Eastern Languages
New trend. The establishment of the Institute of Eastern Languages at Mos-
cow State University in September 1956 exemplifies the current trend away from
the historical and philological emphasis of traditional Russian orientology and
toward stress on the spoken language, combined with an interdisciplinary a
roach
pp
to contemporary problems, an approach which was patterned on area study pro--
grams at American universities.
The institute's relation to current policy was explained in the official announce-
ment at the time of its founding:
"From year to year the bonds of friendship between the peoples of the Soviet
Union and the foreign countries of the East broaden and strengthen. This.:
demands a significant improvement in the preparation. of specialists in eastern
studies. With the aim of preparing specialists who are actively in command of
the languages of the appropriate countries and know profoundly and all-sidely
their economics, histories, and cultures, there is being established in the Moscow
State University the Institute of Eastern Languages" (Herald of Moscow Uni--
versity, Historical-Phililogical Series, No. 1, 1956, p. 19.3).
The basic program is a 6-year course, with the focus on language, but with the
student also required to specialize in one of the several dif ciplines. Forty students,
a year are to be enrolled in the 6-year course. In its second year the institute
had 80 students in addition to a number who had trinsferred with advanced
standing from the elements of other faculties which were combined to form the
institute. A new building to house the institute is to be ,ompleted within 2 years.
Languages taught.-The majority of the students are f pecializing on China and
India. The departments, represented by the size of the staff
are
in order of
,
,
importance, China, India, Arabia, Indonesia, Japan, Turkey, Iran, Vietnam, and'
Korea. A native speaker is available to almost every c.epartment, and students.
are encouraged to live in dormitories with foreign students in order to practice
their languages (Chinese, Korean, Vietnamese, Egyptiar, Syrian, and Indonesian
students enrolled in other faculties of the university are a iailable for this purpose.)
The training of specialists in African languages is to be initiated at Moscow
University after the expanded African language program is begun at Leningrad
University in the fall of 1958.
Program.-The program of study is as follows: the firs year is divided between
intensive language study and several of the content courst s (geography, economics,
history of thought, law, general history, etc.). The econd year is largely a
continuation of the first, and a term paper is required. As an example, one
second-year student wrote on Marco Polo's description of the people of China.
During the third year, which is devoted in part to literary papers (the poetry of
Li Po, an eighth century "popular" Chinese poet, is a typical subject), the student
selects a second eastern language. Throughout the 6-year course he is encour-
aged (or possibly even required) to study the appropria~e western language: for
example, English for India or French for Vietnam. During the fourth year,
philology and lexicography as well as advanced grammar and syntax are to be
introduced. The projected fourth-year term paper is to be more comprehensive
than the previous ones; a hypothetical example is: "The Economic Development
of China During the Second half of the Nineteenth Century." Students will
polish up their knowledge of the language and customs of their chosen area during
the first half of the fifth year, since the period from the middle of the fifth to
a The plan was outlined in the journal Foreign Languages in the School, No. 2, 1958, pp. 111-112. Ex.-
panston of the program to schools in Kazakhstan is also scheduled for the c nning school year according to.
a TASS report on August 1, 1958.
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For ReleasAl a9/ ?E: Db44 iog721AOOO4 Y002OOO7-7
the middle of the sixth year is set aside for study abroad. The student is ex-
pected to go abroad with the topic of his thesis in mind, and to complete it in
the second half of the sixth year after his return to the institute. The institute
has already sent 17 of its advanced-standing students to Communist China and
a few to Korea. A small group of institute students are currently in India, but
not apparently actually studying. The faculty plans to send students soon to
Indonesia, Japan, and North Vietnam.
Special courses.-In addition to the 6-year standard course, three special courses
of instruction are known to be offered by the institute, though no details are
available.
A 2-year course teaches eastern languages to specialists who attend under
-orders from various governmental ministries in preparation for assignment
abroad.
A 6-month course serves as a refresher for experts in eastern studies.
A few students receive preliminary training at the institute and then pursue
the entire course of study at a university in one of the Asian countries.
Future expansion likely.-Further growth in the size of the institute appears
likely. According to Evening Moscow, April 4, 1958, more than 20 faculty
members are to be recruited. The list includes:
A professor to head the chair of Chinese philology.
A docent (assistant professor), senior instructor, and an instructor for the chair
of Indian pnnuiogy.
A docent to head the chair of Arab philology, plus a senior instructor, and an
instructor.
A docent to head the chair of Iranian philology.
A professor to head the chair of Turkic philology.
Instructors in Japanese and Vietnamese, plus a senior instructor of Korean
language and literature for the chair of languages of the Far East and south Asia.
A professor to head the chair of history of China.
A docent to teach the history of Korea, plus a professor to head the chair of
history of nations of the Far East and southeast Asia.
Three professors or docents, plus a professor to head the chair of history of
nations of the Middle and Near East.
A docent to head the chair of economics and economic geography of nations of
the East.
A docent to head the chair of Western European languages.
E. Leningrad State University-Eastern faculty
Subjects.-More traditional in its approach than the institute at Moscow Uni-
versity, the eastern faculty at Leningrad State University emphasizes language
and history. Present enrollment for Asian and African languages is roughly as
follows Chinese, 20; Korean, 20; Japanese, 15; Mongolian, 10; Indian, Tibetan,
.and Indonesian, 25 in all; Arabic, 10; Persian, 10; African 10. The African
languages appear to be the only ones which are taught without the assistance of
native instructors.
Improvement in African language training is foreseen by a directive of the
U.S.S.R. Ministry of Higher Education in May 1958, which called for inviting
foreign African specialists to Leningrad as well as sending two or three Soviet
teachers and graduate students abroad to raise their language proficiency. In
addition to Swahili, Amharic, and Hausa, which are already taught at Leningrad,
within the next 3 years the study of the languages of Luganda, Luba, the Congo,
and Yoruba will be introduced. According to the Ministry, "University students
will acquire conversational knowledge of no less than two related African
languages."
Courses are also offered in Chinese and Japanese history and in the histories
of the Middle East and the ancient Orient. Enrollment is small; Chinese history,
with 12 students, is the largest.
Language program.-Early and intensive specialization assures the linguistic
competence of the Leningrad students, but the absence of social sciences from the
curriculum is likely to prove a handicap if the graduates are to be employed for
other than purely linguistic work.
ature study at Leningrad State
d lit
er
language an
The nature and scope of the University may be illustrated by the Japanese program. Throughout the 5-year
program two aspects, theory and laboratory (that is, practice), are presented.
The first year includes the theory of languages, linguistic systems, the history
of the Japanese language, a systematic presentation of grammar, morphology,
and syntax, a brief consideration of the study of Japanese in the U.S.S.R., Europe
Approved For Release 1999/08/27 : CIA-RDP78-03721AO00400020007-7
 Approved*or Releass49
/O6 ?E: AARD 7 721 A000400020007-7
and Japan, and bibliography. Practical work in the anguage itself (luring the
first year includes the study of grammar and simple texts, the mastering of 800
characters, and practice in conversation with a native. Classroom work during
the first year consists of 12 hours per week, for a tota. of 408 hours, divided as
follows: introduction and grammar 68 hours; text study 136 hours; conversation
136 hours; and writing practice 68 hours. A comprehensive examination at the
end of the year covers the whole complex of the introductory course.
The second year is devoted to literature and literary speech.. Examples of
modern Japanese literature are studied in chronological order "to show the growth
of the literary language. History, style, morphology, and syntax are taken up
as theory, while in the laboratory the student turns h.s attention to a series of
writers, including some "proletarian authors," who oc.upy an exalted place in
Soviet criticism of Japanese literature in much the way IToward Fast used to hold
such a place in Soviet criticism of American literature. The classroom schedule
is identical to the first year, and another comprehensive examination completes the
second year.
The third year is divided between "contemporary literary Japanese" and
"classical Japanese," with 240 hours devoted to each. Students are introduced
to the "public language," both spoken and written. Newspaper, journals, con-
temporary short stories, and novels form the core of this work. At the same .time
the student studies classical Japanese along with kambur. (the old style of writing,
which employs Chinese characters extensively). This : ection of the program is
organized as follows: (1) the classical language of tha 8th through the 12th
centuries, including (a) the conversational language of the time and (b) Chinese
as the language of official correspondence and scientific and historical literature;
(2) medieval literary Japanese of the 12th through 16th centuries, consisting of
remnants of the old literary language which still persist in archaic form in litera-
ture, medieval conversational language which also may be found in its archaic
forms, and Chinese which as in the preceding period continues as the official lan-
guage; (3) literary Japanese of the 16th through the 14th centuries, devoted to
four main topics remnants of "old literary" Japanese which existed as a language
of scholars of that period, the developed form of medieval Japanese which had
become the national language of the period, the conversational and written lan-
guage of literature, and Chinese, as the language of knowledge and philosophy.
The fourth year, like the third, is divided between `contemporary literary"
and classical Japanese. Four of sixteen weekly class hot rs required in the fourth
year are devoted to seminars and special courses, the former including Kambun.
In addition to literary works, the texts of contemporary juridical literature are also
read toward the end of the eighth semester. An examination concludes the year.
The fifth and final year is divided among four mail subjects: (1) classical
Japanese, (2) history of the language and writing, (3) dialectology, and (4) semi-
nar on special problems. The study of classical langua?;e follows the pattern of
the fourth year. The course on the history of the language and writing appears
to be especially thorough, covering aspects ranging from general syntax develop-
ment and the lexicography and phonetics of the urban language to a detailed
examination of the development of writing systems in China and Japan. More
attention appears to be paid to the study of Japanese deflects at Leningrad than
is usual in American programs. The subject includes: (1; the history of Japanese
dialects, (2) the study of a dialectological map of Japan, 3) the dialects of Japan
proper, (4) dialects of Miyako Island, (5) a brief description of some other local
dialects, and (6) methodology of dialectological research. An examination
covering the four main subjects of the fifth year completes the program.
C. Central Asian State University, Tashkent
Organization.-The third major center for the teaching of exotic languages in
the Soviet Union is the eastern faculty of the Central A: ian State University in
Tashkent. More than 150 students, at least 50 percent of whom are Uzbeks, are
enrolled in the 5-year program. There are four departme its: the Indian Depart-
ment offers instruction in Hindi, Urdu, and Bengali; the Chinese-Uigur Depart-
ment teaches two Uigur dialects and Mandarin Chine,;e; the Iranian-Afghan
Department has courses in Persian and Afghan, with Aral is the obligatory minor
language, and the History Department includes intern z.tional relations in its
offerings.
Employment of graduates.--To date a few of the graduates of the faculty are
known to have been recruited by the Ministry of Foreign Trade for work at
construction projects in Afghanistan. While more graduates are likely to go
abroad as government officials in the future, most of them now become philologists
or find employment as interpreters with organizations such as the Alliance of
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Releaseoll
9/69&2g X4145721 A00040020007-7
Friendship Societies, radio stations, foreign. literature publishing houses; some
become teachers in 10-year schools.
Current trends.-At the Central Asian State University the current trend of
shifting attention from history and philology to contemporary problems is illus-
trated by proposals and criticisms made during the past year. New courses in
economics, ideology, and international relations were called for. According to
the critics, study of Arabic should be oriented along more practical lines, stressing
the spoken language rather than ancient texts. Teaching the languages of
Indonesia and Burma was recommended, since, "there is a severe shortage of
cadres who understand these languages, even in Moscow." 4
In addition, there were comments on the shortage of equipment such as audio
and visual aids and publication facilities.
D. Azerbaidzhan State University, Baku
The eastern faculty of the Azerbaidzhan State University, Baku, offers train-
ing in Persian, Turkish, and Arabic. The Arabic section receives about 12
students per year. The increasing employment of non-Russians for contacts
with Asian and African countries is reflected by the fact that instruction is given
in Azerbaidzhan.
E. Kazan State University
Since 1944 Arabic has been taught by the faculty of Tatar language and litera-
ture of the Kazan State University.
F. Tadzhik State University, Stalinabad
A faculty of Arabic and Persian languages is scheduled to open at the Tadzhik
State University, Stalinabad, in the autumn. It is to have an enrollment of 30
students.
V. MINISTRY SCHOOLS
The military and diplomatic services, in addition to recruiting graduates of the
universities, operate their own schools in which language training is offered.
A. Ministry of Foreign Affairs' Institute of International Relations
In addition to recruiting graduates from institutions of higher education, the
Ministry of Foreign Affairs maintains its own school, the Institute of International
Relations in Moscow, for training diplomatic personnel. Since the institute is
rarely mentioned in print, what follows is a composite sketch based on the most
recent information available.
Organization.-The institute, which reportedly has an enrollment of more than
1,000 students (about 200 of whom. are from Communist bloc countries), appears
to be divided into three faculties: law, history, and international relations. Within
each faculty there are language and area specializations. The students are further
subdivided into language study groups of from five to seven people.
Program.-At present the course appears to be 6 years in length (earlier reports
had said it was a 4- or 5-year course), with 6 class-hours per day during a 6-day
week.
In addition to languages, which are studied throughout the 6-year course (10
hours per week for the major language and 6 for the minor, according to one
report), the program includes comprehensive coverage of a variety of subjects.
In the first 2 years the student takes up history, economics, and political science
of the U.S.S.R.; principles of Marxism-Leninism; and physical education and
military training, the latter including organization of the Soviet Army, Soviet
small arms, military tactics, and foreign armies. In the third year he studies
Soviet bloc countries and also begins taking courses on the countries of. the area
in which he is to specialize. In the final years he studies intensively the particular
country to which he is to be assigned.
No complete list of the languages taught at the institute is available. However,
it is known that, in addition to French, English, German, and Spanish courses
have been offered in Chinese, Persian, Arabic, African dialects, and 'Japanese
(the last with the assistance of a native instructor).
B. Military training in foreign languages
No current information is available on the Military Institute of Foreign
Languages, which underwent an extensive reorganization in the summer of 1956.
Prior to this reorganization, the institute, located in Moscow, was reported to
have an enrollment of 1,000 students (plus an additional 500 in the correspondence
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approver for Releases / 7E: Zb4 17i N03721A000400020007-7
course, which was abolished at the time of the reorganis ation) and a total faculty
of 230 officer and civilian instructors. In addition to teaching European languages
and military subjects, the institute had a College of Eastern Languages, with an
average enrollment of about 300 students in a 5-year course. The largest depart-
ments in the college were Chinese, Japanese, Arabic, aid Hindi.
The following portions of the 36 class hours per week were devoted to language
training: in the first year, major language 20 hours, linguistic methods 2 hours;
second year, major language 24 hours, linguistic methods 2 hours; third year,
major language 17 hours, literature of major language 2 hours, minor language
8 hours, linguistic methods 2 hours; fourth year, major language 18 hours, liter-
ature of major language 4 hours, minor language 8 hours, linguistic methods
2 hours; fifth year, major language 18 hours, minor language 8 hours. In addition
to daily observation of the student's progress 1-hour oral and written examinations
were given at the end of each semester. Language classes were conducted in
small groups of from 6 to 10 students, and a total of -0 phonographs with ear-
phones and 1 tape recorder were available for student use.
Before the reorganization there were reports that the program was too drawn
out, that discipline was lax and that inadequate attention was given to military
subjects. Presumably the reorganization took steps to remedy such defects.
VI. RESEARCH PROGRAMS
Research on Asia and Africa is highly centralized and is for the most part con-
centrated in two major centers-the Institute of Eastern Studies and the Insti-
tute of Ethnography. Both institutes have as a secondary function the training
of graduate students.
A. Institute of Eastern Studies
Reorganization.-The Institute of Eastern Studies of he Academy of Sciences
of the U.S.S.R. with branches in Moscow and Leningrad, is the principal center
for Soviet research on the East. It also serves as national coordinator for addi-
tional research done at other institutes, trains graduate students, and operates a
publishing house.
The institute in its present form can be said to date from 1950, when the Lenin-
grad Eastern Institute and its Moscow branch were merged with the Institute
of Pacific Studies in Moscow to form a single, unified institute in Moscow. Six
years later, however, the work of the institute was still considered far from ade-
quate by the Communist Party. At the 20th Party Congress in February 1956,
Mikoyan singled out the institute for scathing criticism: "* * * although in our
day the whole East has awakened, this institute is still c ozing."
The first step in redirecting the work of the institute toward increased con-
centration on contemporary problems was the appointrr ent of B. G. Gafurov as
its director in May 1956, Gafurov, a member of the Central Committee and
former First Secretary of the Tadzhik Communist Party, carried out the re-
organization of the institute in the fall of 1956, when new sections were added
in Moscow, a Leningrad branch was established, and MO 3t of the Chinese depart-
ment was removed from the Institute of Eastern Studies and a separate Institute
of Chinese Studies was established,
As a result of recruiting efforts, which are continuing, the size of the Institute
of Eastern Studies' Moscow staff has more than quadru Dled since 1950 and now
includes 400 staff members and 100 graduate students. An indication of the rela-
tive size of the 5 main departments can be seen in the following figures on the
distribution of the senior specialists among them: (1) the Far East with 50
senior specialists, divided by area as follows-Japan 25, Mongolia 12, korea 12;
(2) India divided along disciplinary lines-history 12, ec :)nomics 10, philology 8;
(3) southeast Asia with a total of from 15 to 20 specialises working on Indonesia,
Vietnam, Cambodia, Burma, Malaya, and the Philippines; (4) Africa a new
department established in 1956, has few scholars; and (i) Middle and ~ar East
which also has only a few researchers. A sixth, functional department, to deal
with nonregional problems such as United Nations affair;, international law, etc.,
is planned.
The Leningrad branch is smaller than the Moscow ar d is devoted almost ex-
clusively to work on earlier periods of history. Distribution of experts is as fol-
lows: (I) Far East-China 10, Japan 3, Korea 4, Tibet 1; (2) south and central
Asia-India 3, Persia 3, Kurdistan 1, central Asia 5 or 6; (3) Arabia 5 or 6; (4)
the ancient East 3; and (5) Mongolia 3.
Publications.-The Institute of Eastern Studiesissues four periodicals: Soviet
Eastern Studies, The Contemporary East, Brief Reports of the Institute of East-
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
FOREIGN SERVICE ACT AMENDMENTS 21
ern Studies, and Scientific Notes of the Institute of Eastern Studies. It also
operates its own publishing house for books and pamphlets-the Publishing House
for Eastern Literature.
The list of 109 titles scheduled for publication- in 1958 provides another index
of the distribution of research efforts within the institute .6
Of the 14 titles to be issued on the "History and Economics of Countries of the
Near East," 5 are general, 2 afire devoted to Afghanistan, 4 are about Iran, and 3
are on Turkey.
India accounts for 12 of the 21 titles to be devoted to the "History and Eco-
nomics of Countries of Southeast Asia."
Of the 30 titles on the "History and Economics of Countries of the Far East,"
16 are items on China prepared by the Institute of Chinese Studies but nonetheless
included in the catalog. Six items on Korea, two on Mongolia, two on the Philip-
pines, and four on Japan were all prepared by the Institute of Eastern Studies.
The section on the "History and Economics of Countries of Africa" includes
5 titles, while 12 titles are to deal with the "Ancient East." "Geography and
Ethnography" account for 3 titles, and 9 items are listed under "Linguistics."
Literature, folklore, and literary criticism account for the remaining 15 titles.
B. Research on Africa-Institute of Ethnography
New organizations proposed. -Heretofore the Institute of Ethnography of the
Academy of Sciences of the U.S.S.R., which has branches in Moscow and Lenin-
grad, has been the principal center for research on southern and central Africa,
and as such it has had the function of generally coordinating additional research
efforts at universities and other institutes. Its role as a coordinator is likely to be
reduced by the reorganization of research on Africa which is now being planned.
Measures to increase the prestige and improve the coordination of African
studies in the U.S.S.R. were suggested at second coordinating meeting of Afri-
canists of the U.S.S.R. Academy of Sciences which was held on February 13,
1958. Participants in the meeting included representatives of the Institute of
Ethnography, the Institute of Eastern Studies, the Institute of World Economics
and International Relations, the Institute of Geography, and also teachers from
Moscow University and pedagogical institutions. The meeting formally en-
dorsed proposals for creation of an all-union association of Africanists and a
special organ which would coordinate research on Africa done in different institutes
of the Academy of Sciences of the U.S.S.R., beginning of preparatory work for
the unification of all Africanists in a single scientific center; introduction of special
courses on the history, economy, and literature of African countries in historical,
economic, and philological faculties; and creation of a special chair of African
studies at Moscow University. The meeting also suggested sending an expedition
to Africa composed of experts in the humanities as well as the natural sciences.
Publications on Africa.-Despite rapid growth in recent years, the volume of
Soviet publications on Africa is still modest in comparison with that of the free
world. Professor Potekhin, speaking at a February 1957 meeting of Africanists
at the Institute of Ethnography,. noted that while between 1017 and 1945 a
total of 111 books 6 on Africa had been published in the Soviet Union (i.e., 4
per year), the figure for 1946-56 was 100 (or 10 per year). The 3-year plan for
research on Africa adopted at the same meeting includes as a maximum a total
of 55 titles, which, if the plan is completely fulfilled, will be an average of 18 per
year.
An indication of the scope of Soviet research on Africa is given by the detailed
list of projects in a research plan which was published in Soviet Ethnography,
the journal of the Institute of Ethnography, No. 3, 1957. The political motiva-
tions behind this plan can be seen in the fact that the largest of its six sections
is devoted to work on "Economic Conditions and the National Liberation Move-
ments in Africa After World War II." Among the 20 to 35 works planned under
this heading are the following titles:
The Economic Development and Struggle of the Peoples of Nigeria Against,
Imperialist Enslavement After World War II.
The Economic Development and the Struggle of the Peoples of French West
Africa After World War II.
Liberia Under the Yoke of American Monopoly.
Basic Questions of the Social-Economic Development of the Belgian Congo
After World War II.
S Publishing house for Eastern Literature, "Annotated Thematic Plan for Issuance of Literature in the
Year 1958," Moscow. 1958.
6 The term "book" in Soviet publishing parlance includes short pamphlets as well as full-length books.
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
22 FOjREIGN SERVICE ACT AMEND 14ENTS
The Peoples of Morocco, Algeria, and Tunisia in the Struggle for National
Independence.
Social-Economic Changes in British Colonial Policy in British Africa.
The Peasant Question in Egypt.
The Increased Role of African Raw Materials in the System of Contemporary
Imperialism.
The Role of"African.War,Mater:ials_and Human Resew ces.During.World War II.
History of the Republic of the Sudan.
The Peoples of the Gold Coast in the Struggle for Independence.
The Formation of the Independent State of Tunisia.
The Imperialist Struggle in North Africa on the Eve of and During World War II
The section on "African Philology" includes:
Introduction to the Study of African Languages.
Swahili-Russian Dictionary.
Hausa-Russian Dictionary.
Arabic-Russian Dictionary (a new work in the Egyptian dialect).
Essays on the Folklore and Literature of the South African Bantu.
The Origin and Distribution of Swahili.
Essays on the Syntax of Swahili.
Essays on the History of Contemporary Egyptian Literature,
Two sections are devoted to history. One on the "Fistory of Africa Up to the
Imperialist Division" includes:
Arab Colonization of East Africa.
The Social Structure of Madagascar in the XIX Century.
Africa in the Middle Ages (four volumes based on Aral) sources).
The second section, on "The Imperialist Division and Redivision of Africa,"
includes:
The Berlin Conference 1884-5.
Anglo-German Rivalry in East Africa in the XIX Cent ury.
Essays on the History of Struggle of the Zulus and the 7hosa Against Anglo-Boer
Colonization.
The Struggle of the Washona and Matabele Against the Colonization of Rhodesia.
The two other sections are devoted to geography and ethnography. Geograph-
ical projects include:
Physical Geography of Algeria.
Morocco--Natural Resources and Economy.
Egypt-Natural Resources and Economy.
The Federation of Rhodesia and Nyasaland.
Works on ethnography include:
The Ethnic Composition of the Belgian Congo.
The Population of the Federation of Rhodesia and Nyn saland.
The Population and Dwellings of the Bantu Peoples.
Essay on the Ethnography of Contemporary Ethiopia.
The Ethnic Composition of Nigeria.
The Ethnic Composition of Tanganyika.
The Ethnic Composition of South West Africa.
The Ethnic Composition of Angola and Mozambique.
An Ethnic Map of Africa (to be completed by the end >f 1957).
C. Other institutes
The work of the Institute of Eastern Studies of the Academy of Sciences of the
U.S.S.R. is supplemented by the efforts of the Institute of Eastern Studies of the
Academy of Sciences of the Uzbek Republic and by thf recently organized Insti-
tute of Eastern Studies of the Azerbaidzhan Acadern of Sciences, which was
established in February 1958. Additional institutes are likely to be established
by the Academies of sciences of Georgia, Tadzhikistan, and Turkmenistan. In
addition, work on Asia and Africa is also done from time to time at institutes of
geography, history, and economics.
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
FOREIGN SERVICE ACT AMENDMENTS 23
VII. EASTERN EUROPE
Much less has been done on Asian and African studies by the Communist
countries of Eastern Europe than by the U.S.S.R. Czechoslovakia, Rumania, and
Hungary have at least token Eastern studies programs patterned on the Soviet
model, while in Poland orientology has continued to develop along traditional
lines with emphasis on philology and history.
No.activity has been-reported in Albania or-Bulgaria.
A. Czechoslovakia
In Czechoslovakia, as in the Soviet Union, there has been an increase in the
study of Eastern languages in recent years.
At the principal center, Charles University, Prague, there are two faculties
with a total of 15 teachers. The Far Eastern faculty, with five members, offers
courses in Chinese, Japanese, and Korean philology and history. The faculty of
the philology and history of the Near and Middle East and India has 10 members
and offers courses in Hindi, Indology Arabic Armenian, Turkish, Iranian,
Egyptology, and cuneiform writings. U'ndergra~uates must major in a modern,
not an ancient, language.
The School of Living Eastern Languages at Prague has been identified, but no
data on it are available.
The Institute of Eastern Studies, originally established in 1927 was reorganized
as a part of the Czechoslovak Academy of Science in 1952. he Institute has
four major departments: the Near East in Ancient Times, the Near East in
Medieval and Modern Times, India and Central Asia, and the Far East. The
Institute library claims to have more than 40,000 volumes, and its bibliographic
sections scans 214 journals (from which it has made 45,000 cards).
In 1945 the journal New East began publication, and it has issued language
textbooks as supplements. It has already published texts for Korean, Chinese,
Indonesian, and Hindi; and in 1957 it began installments of an Arabic text.
B. Rumania
Eastern studies have gotten under way only very recently in Rumania.
A section dealing with Arabic language and literature in the philology faculty
at C. I. Parhon University, Bucharest, was first identified in February 1958
and was presumably established at the beginning of the 1957-58 academic
year. In October 1956 six Rumanian students went to North Korea for language
training, a fact which may reflect the existence of Korean language training at a
Rumanian university.
The availability of additional personnel which could be employed in teaching
is indicated by the composition of the Society for Oriental Studies which was
established early in 1957. There are 40 members working in the fields of class-
ical and colloquial Arabic, Sanskrit, Hittite, Assyriology, old and modern Persian,
Ottoman and modern Turkish, Tibetan, Armenian, Georgian, Chinese, Japanese,
as well as oriental philosophy, ethnography, and art. The Society publishes a
journal of oriental studies, Studea et Acte Orientalia.
Orientological source material, particularly Turkish documents, is available
in libraries of Bucharest and Cluj, and in smaller collections in provincial cities.
D. Hungary
In 1955 the Commission of Eastern Studies was established in the Hungarian
Academy of Sciences. It has five sections: Turkology; Central Asia, India, and
Siberia; Eastern Asia; Ancient Near East; and Medieval. and Modern Near East.
A total of about 20 researchers are employed in these- sections.
E. Poland
The principal centers of orientology in Poland are the Oriental Institute at
Warsaw University, originally founded as the Oriental Faculty in 1933, and the
Oriental Faculty of Cracow University, founded in 1919. The members of the
Warsaw faculty are divided by specialty as follows: Sinology 7, Turkology 7;
Indianistics, 3; philology of peoples of Central Asia, 1; Semitology, 3; philology
of the ancient East, 2. The faculty at Cracow has 8 members.?
7 Data on faculties and students are for 1958, as given in Stefan Strelcyn, Orlontology Review, No. 3,
1956. No major changes appear to have taken place in the size and distribution of faculties and students
since 1956.
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release 1999/08/27 : CIA-RDP78-03721A00040.0020007-7
24 FOREIGN SERVICE ACT AMENDMENTS
In 1956 the 145 students of both universities were divided by year of study and.
specialty as follows:
1II
Sinology
------------------------------
-
8
5
4
6
29
--------------
-
Japanese
----------------------------------------
--
4
1
2
1U
---
-
k
l
T
-
-
2
7
8
ur
o
ogy----------------------- -
------------------
Arabic
-------------------------------- ----
19
2
6
8
82'
------------
Iranistics
---------------------------------- ----
5
t
3
7
-------
Semitology
----? ---------------------
1
2
4
------
Philology of peoples of Central Asia___________________
2
4
Indianistics
----------------------------
9
--------------
Philology of Ancient East, Including Egyptology_
7
145?
Though oriental studies grew in Poland in the period following World War II,
they appear to have reached their peak by 1956, when 1Ee author of the article
from which the figures were cited complained on unemp.oyment among scholars
and urged that appropriate employment be found for forthcoming graduates.
Senator SYMINGTON. I will be very glad to answer any questions
that the distinguished chairman would care to a;k.
LOCATION OF PROPOSED ACADEMY
Senator MANSFIELD. Senator Symington, you mentioned that the
Academy which you propose-and I note you introduced the first.
bill in this respect to this session of Congress-shall be located in the
Middle West.
Senator SYMINGTON. Yes; I would say that would be good from
the standpoint of strategic position, Mr. Chairman. But I think the
most important thing to have is the Academy it ;elf.
Senator MANSFIELD. Would you include Montana in the Middle
West?
Senator SYMINGTON. I would be very glad to include Montana.
[Laughter.]
APPOINTMENTS TO, AND LEVEL OF, FOREIGN 14ERVICE ACADEMY
Senator MANSFIELD. As I read your bill, what you are proposing is
that appointments to the Foreign Service Academy be carried out on
a basis similar to appointments to the present military service acad-
emies.
Senator SYMINGTON. That is correct, Mr. Chairman.
Of course, you would have people eligible for this Academy who,
because of slight physical disability, like poor ey(;s, would be ineligible
for the military academies.
In addition to that, of course, this academy would be. coeducational;
women would also be able to enter.
Senator MANSFIELD. This, by the way, would be an undergraduate
school; is that correct?
Senator SYMINGTON. That is correct, Mr. Chairman.
I have heard a lot about graduate schools, but it seems to me that
with circumstances as they are now, an undergraduate academy is
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
FOREIGN SERVICE ACT AMENDMENTS 25
needed. I think the Chair and I have discussed this once before.
And, as I said in my statement, if we can afford three academies to
train people for a possible hot war, surely we can afford one academy
to train people for the cold war we are now in.
Senator MANSFIELD. Would you say the Department of State is
our first line of defense in the cold war?
Senator SYMINGTON. I would think that the Department of State
would be the leader in the grouping of the various agencies in Govern-
ment-including the Department of Defense, and the USIA, among
others-faced with the threat of growing economic and psychological
aggression as well as any possible physical aggression from the Com-
munists.
Senator MANSFIELD. Do you think the Department of State has
been given a rather low priority in carrying on its responsibilities since
the end of the Second World War?
Senator SYMINGTON. Mr. Chairman, I would not know about that.
The Chair, being a member of this committee ever since he and I have
been in the Senate and, I believe, before that in the House of Reprc-
sentatives, would know much more about that than I do.
But I feel very strongly, after going around the world a good many
times and having a son who is now working in the Foreign Service
abroad, that there is something lacking that is seriously affecting our
program.
For example, we have justobeen listening to a lot of comment,
criticism, and advice with respect to the mutual security program.
My impression is that the most effective criticism of that program
.at this-time is with reference to its administration. I am certain that
administration would be better if we had people who understood the
customs and mores, as well as the languages, of the countries in which
they served, and who were actively interested in promoting our
position with respect to foreign aid and mutual security.
?GRADUATES OF ACADEMY WOULD HAVE CHOICE OF ASSIGNMENTS IN
VARIOUS GOVERNMENT AGENCIES
Senator MANSFIELD. It is interesting to note that the two organiZa-
-tions connected with foreign policy not in 'the Department of State,
the USIA and the ICA, are both headed at the present time by Foreign
Service officers, namely, Mr. George Allen, and Mr. James
.Riddleberger.
I take it from your proposal, Senator Symington, that it would not
be mandatory for these people who graduate from the Foreign
.Service School to go into the Department of State exclusively.
Senator SYMINGTON. No, Mr. Chairman. Students would be
given a choice; based on class standing, as to the department and area
of service. This would be similar to the system in effect at the
military service academies. I would hope a method could be evolved
to provide the desired flexibility of choice for all members of a
,graduating class.
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
26 FOREIGN SERVICE ACT AMENDMENTS
LACK OF LANGUAGE PROFICIENCY IN U.S. DIPLOMATIC SERVICE
I might add that a report from the Library of Congress Legislative
Reference Service which was presented to us entitled "Foreign Lan-
guage Training Programs for U.S. Information Agency Personnel and
Possible Value of it Foreign Service Academy to this Agency" (see
p. 13), shows that we are beginning to move in the field of language
training But to me the overall efforts are totally inadequate to meet
the problem.
I know the Chair is one of the most experienced Members of the
Senate, and lie knows the gigantic problems incide-it not only to the
handling of the mutual security program, but to ill our diplomatic
programs. In my own travels I have been struck many times with
the lack of language proficiency on the part of mane of our personnel,
especially at the consular level.
Senator MANSFIELD. I think that point is being brought out very
thoroughly in our study of Foreign Service problems. I know that
this committee, as a whole, is very much disappoin?,ed in the linguistic
abilities of the personnel whom we are taking into he Foreign Service
at the present time. Strange to say, in this- rich country, with our
educational system, we do not get many people cording in at the lower
levels of the Foreign Service who are qualified to speak languages,
and I think the report asked for and received recently by the chair-
man of the Foreign Relations Committee, Mr. Fulbright, indicates
that the same holds true, although not to the same degree, even
among our representatives in the higher echelons.
Thank you, Senator Symington. 4. am delighted that you have
appeared this morning, and I want to assure ycu that I personally
think that a bill of this nature is necessary.
Senator SYMINGTON. Thank you very much, Mr. Chairman.
I would like to make one more comment on thzt, if I may.
I am sure that the Chair has the same exper.ence that I do with
regard to young constituents. They want to ,ierve in Goverment.
Many are not able, of course, especially the women, to serve in the
other service academies, but they have in their minds a desire to go
into Government service. I have a good many people like that,from
my State, and I am sure the Chair does, also.
It seems to me that a definite training program in the important
and constructive field of foreign relations woulc. not only provide an
avenue for those people to go into the service of their country, but
might well also stimulate quite a few more of our youth, as they
recognize the growing importance of the problems which this country
faces.
Senator MANSFIELD. I am thoroughly in acccrd with what you say.
Senator SYMINGTON. Thank you, 14Ir. Chairman. It has been a
privilege to be with you.
SENATOR SMATHERS' LETTER SUPPORTING S. 109
Senator MANSFIELD. At this point in the record, I should like to
insert a letter to me from Senator Smathers, in support of his bill,
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release 1999/08/27 : A000400020007-7
S. 109, to establish a Foreign Service Academy. Senator Smathers
is unable to be at this meeting to testify in person.
(Senator Smathers' letter is as follows:)
your hearings.
Thanking you and with kind regards, I am,
Sincerely yours, .
American people.. It deserves the cream of America's youth from every section
of the country, and from every segment of our society.
It is for these reasons that I urge the subcommittee to report favorably on the
pending measure.
It will be appreciated if you will have this letter made a part of the record of
U.S. SENATE,
COMMITTEE ON FINANCE,
July 6, 1969.
Chairman, Subcommittee on State Department Organization and Public Affairs,
Foreign Relations Committee, Washington, D.C.
DEAR MR. CHAIRMAN: I regret that it is not possible for me to personally
appear in behalf of S. 109, proposed legislation which would provide for the
establishment of a U.S. Foreign Service Academy, but I do appreciate the.
opportunity afforded me to submit this statement in lieu of such personal
appearance.
I might add that I am very happy to note that the chairman of this subcom-
mittee is also a cosponsor of the bill, and has been vitally interested in bringing
about the establishment of such an Academy over the past several years.
An examination of the personnel records of the Foreign Service Corps reflects
that we have been drawing the bulk of our talent for diplomatic service from a
very limited stratum of the United States, though it is true, relatively speaking,
that there has been a considerable improvement in the diversification of the
Service. Nevertheless it appears to me that we have not fully democratized our
Foreign Service in any sense of the word.
The so-called development of an intellectual elite from which we in the United
States have in the past, and continued for the most part in the present, to draw
Foreign Service Corps personnel, does not provide the best means to set forth
fully representative policies in the Foreign Service.
Our democracy is founded on the principle that ability recognizes no class, and
so-called ground rules which appear to have a very stifling effect and encourage
the creation of an intellectual elite should not be permitted to prevent the maxi-
muin utilization of this ability in our Foreign Service Corps.
Today, in a world of turmoil full representative views of American policy should
spring forth, and that is the reason why I feel that our Foreign Service could be a
great deal better than it now is. We can improve it if the ground rules are changed
so that we may be able to draw upon a larger pool of representative talent and
brainpower.
As a result, the Foreign Service Corps is far from being an adequate instrument
considering the reliance we place upon it in endeavoring to achieve the final
objective of world peace.
Consider only the matter of language proficiency. In a survey conducted by
the Department of State in 1956 of 4,000 Foreign Service officers, 43 percent
lacked a useful speaking and reading knowledge of any foreign language. Fully
60 percent lacked useful proficiency in French, German, or Spanish.
An Advisory Committee of the Foreign Service Institute pointed out to the
President in March of last year that Ambassador Llewellyn E. Thompson was, at
that time, the only American Ambassador to a Communist country who could
speak the language of the country to which he was assigned. Only two of our
Ambassadors in the Middle East were able to speak Arabic. In 1949, when the
United States was finally able to send its own interpreters to Indonesia, it was
discovered that the native interpreters previously relied upon were coloring their
translations to make local comment sound pro-American.
These facts alone disclose a crying need for improvement in our existing Foreign
Service Corps. They are defects which, in my opinion, can only be corrected by
the establishment of a Foreign Service Academy, such as that set forth in the
GEORC,R SMATnERS,
U.S. Senator.
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 I
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
28
Senator MANSFIELD. We will next hear from Mr. Henderson. We
are delighted to have you with us again, Mr. Secretary, as we always
are.
STATEMENT OF HON, LOY W. HENDERSON, DEPUTY UNDER
SECRETARY OF STATE FOR ADMINISTRATION
Mr. HENDERSON. I have a statement with respect to these bills.
I would be grateful if you would allow me to submit that statement
for the record and add a short oral statement.
Senator MANSFIELD. That will be fine. I will be glad to hear it.
DECISION ON ESTABLISHMENT OF FOREIGN SERVICE ACADEMY SHOULD
BE POSTPONED
Mr. HENDERSON. The statement which I am submitting for the
record suggests that we might postpone the making of a definite
decision with regard to the establishment of a Foreign Service Institute
until we are in a better position to ascertain the results of our present
efforts in the field of training and recruitment.
I would like to make it clear that we, in the De')artment, who have
certain responsibilities in the field of recruitment and training of
personnel of the Foreign Service do not reject oui, of hand and finally
the idea of a Foreign Service Academy.
Furthermore, we are grateful to the Members of Congress who
have shown an interest in the strengthening of the Foreign Service
by submitting bills providing for the establis" Iment of a Foreign
Service Academy.
We do not for one moment take the position that we are satisfied
with the Foreign Service as it exists.
We believe there should be efforts to raise th,3 standards of officers
already in the Service, and to raise the standards of those who are
being recruited.
In our opinion, a Foreign Service Academy might serve certain
useful purposes. It could provide young mer and women from all
walks of life with a unique opportunity to prepare themselves for
civilian service in the foreign field.
In such an Academy they would be subject3d to disciplines which
do not exist in most private institutions. They would be instilled
With morale and pride of service which would bolster up the structure
of. the whole Foreign Service.
They could be also instilled with a professional outlook which might
irradiate throughout the whole sector of our Government which is.
concerned with international problems.
We have engaged in some soul-searching in this matter, and it is
with some reluctance that we have come to the decision that it is
preferable not to attempt at this time to establish a Foreign Service
Academy.
PRESENT PROGRAM OF :RECRUITMENT AND 'TRAINING IS EFFECTING
IMPROVEMENTS IN SER`TICE
We would like to experiment further with our present recruitment
and, educational processes which, in our opinion, are bringing about
improvements in the Service.
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release 1999J00W :~-tP?P79g&1-P00400020997-7
If later we should find that through our present means of recruit-
ment and training we are not getting the results for which we had
hoped we may come to the conclusion that there should be a Foreign
'Service Academy.
We would be at that time in a better position, as a result of our
experimentation, to determine what the character of such an Academy
would be.
Senator MANSFIELD. Is that all, Mr. Henderson?
Mr. HENDERSON. That is all I would care to offer at this time unless
,you would like to ask some questions.
Senator MANSFIELD. No; I have no questions.
(The prepared statement of Mr. Henderson follows:)
,STATEMENT OF HON. Loy W. HENDERSON, DEPUTY UNDER SECRETARY OF STATE
FOR ADMINISTRATION ON S. 15, S. 109, S. 730 To PROVIDE FOR THE ESTABLISH-
MENT OF A U.S. FOREIGN SERVICE ACADEMY
The question of establishing a U.S. Government institution for the purpose of
preparing officers for the Foreign Service is one to which the Department has
devoted much thought. Keeping the needs of the Foreign Service always in mind,
we have carefully considered the various bills which would establish some form of
Foreign Service Academy. The Department remains convinced, however, that
such an Academy would not be in the best interests of the country or the Foreign
Service at this time.
UNIVERSITIES AND FOREIGN SERVICE ARE IMPROVING TRAINING FACILITIES
Before undertaking the responsibilities connected with the establishment of
such an Academy, the Department would prefer to obtain more experience with
the training facilities already available to it and to ascertain the qualifications of
i
ll
d
un
-
eges an
the young men and women coming into the Service from our co
versities-which are augmenting and improving their training facilities.
I know that the committee is aware of the high degree of importance which the
Department attaches to the training of its officers. During recent years, with the
help and counsel of the Congress and of the Senate Committee on Foreign Rela-
tions in particular, we have made considerable progress in improving our training
programs. Through the facilities of the Foreign Service Institute, colleges of the
armed services and various private educational institutions, the qualifications of
our officers are being raised each year. We believe that the results are becoming
increasingly more evident, especially in the linguistic field.
The many and varied responsibilities of the Foreign Service require that it be
:staffed with men and women possessing a wide range of skills and backgrounds.
It is also desirable, in order to assure proper representation of the United States
overseas, that the interests of the various sections of our country be fully reflected
in the composition of the Service.
.QUALIFIED UNIVERSITY GRADUATES ARE SUITED FOR ENTRANCE INTO FOREIGN
SERVICE
The Department is inclined to believe at this time that these needs can best be
met by selection of qualified graduates from the colleges and universities in all
parts of the United States, and by taking full advantage of the wide range of
,educational training provided by these institutions of higher learning.
It is possible that with additional experience, we may come to the conclusion
that the Foreign Service would be strengthened by the establishment of a Foreign
Service Academy either at an undergraduate or graduate level to supplement the
intake of personnel from non-Government institutions. We would prefer, how-
bli
hment
t
th
d
s
e es
a
to
ever, at this time to defer any definite decision with regar
of a Foreign Service Academy. We do not recommend, therefore, the enactment
,of either S. 15, S. 109, or S. 730 at this time.
Senator MANSFIELD. Finally, before we go on to the next group of
bills, I should like to make a part of today's record a letter and state-
ment to me from Senator Yarborough, who wishes to express his
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 ApRtpved For F ,g4~ eSj RJ0~1, 7A X4&- f78-03721A000400020007-7
support of Senator Wiley's bill to establish a Foreign Ser vice Academy,
S. 730.
U.S. SE 'ATE,
COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE,
Hon. MIKE MANSFIELD, D.C., July 6, 1959.
,
Chairman, Subcommittee on State Department Organization anc Public Affairs,
Senate Foreign Relations Committee, Washington, D. C.
DEAR MIKE: I am enclosing a copy of a statement I have prepared in support
of S. 730, Senator Wiley's bill to establish a Foreign Service Academy.
Although I had hoped to present this statement in person at tl.e meeting of the
subcommittee this morning, July 6, the pressure in my schedule prevented me
from attending your meeting.
I request that the statement be made a part of the record of the hearings.
Thanking you, I am,
Very sincerely,
RALPH W. YARBOROUGH.
STATEMENT BY SENATOR RALPH YARBOROUGH ON BEHALF OF S. 730, To ESTAB-
LISH A FOREIGN SERVICE ACADEMY
Mr. Chairman, I appear today as a cosponsor of S. 730 by Senator Wiley, to
establish a Foreign Service Academy for the graduate training c.f those who are
entering our Foreign Service. This school, to be located in the Washington area,
would serve as a great center for the study and practice of the skills needed so
desperately to effectively represent our country abroad. It woull take in college
graduates from all over the country, at the normal time of their entry into the
Foreign Service, then train them intensively in such subjects as American diplo-
matic history, State Department organization and policies, and m Est importantly,
in area and language studies. Much has been written recently of the lack of
knowledge of our representatives abroad of the language and' customs of the
countries in which they are stationed. Much of this, of course, is exaggerated,
but undoubtedly there is but a relatively small percentage of those initial entrants
into the Foreign Service who have a working knowledge of even one of the major
European languages. When one thinks of the Asian and Af ?ican languages
spoken by millions and millions of people abroad, and the fact than in this country
there is not even one university where some of these languages can be studied,
the need for an institution dedicated to the purpose of erasing a iv deficiency in
this regard is apparent,
It seems to me that this is a need which can be met in no other way. As great
as our university system is, it cannot provide for the systematic instruction of
these unfamiliar languages in such quantities and with such convenience as the
Academy here proposed. Here we will take those students, the cream of our
country's crop, who are the most highly motivated to understand a foreign lan-
guage and way of life, and teach them to an institution of the h ghest academic
rank. For this the students will agree to serve at least 3 years in the Foreign
Service, an obligation parallel to that of our military academics. Even if many
of these students should leave the Foreign Service at that time they will con-
tinue to enrich our national program through their positions in educational
institutions and international trade.
We can also expect that this Academy will have a beneficiri effect on the
recruitment of qualified and interested persons for the Foreign service, It will
also provide a means of assuring that only the competent will be allowed to
represent our country.
Though it will cost a relatively modest sum of money to establ: sh this Foreign
Service Academy, the returns should far outweigh any. such costs. I, for one,
feel that enduring friendships are built on understanding, that to have repre-
sentatives abroad who can freely and effectively communicate at d transmit our
goals and ideals will help shift our basis of security from military and economic
interdependence to the true mutual security of a communion of 1 iterests, ideals,
and principles.
AMENDMENTS TO THE FOREIGN SERVICE ACT OF 1946, Ak, AMENDED
Senator MANSFIELD. Mr. Secretary, we will now turr. to the next
matter of business on the agenda having to do with ~-, 443, intro-
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
duced by Senator Green by request, a bill to amend the, Foreign
Service Act of 1946, as amended, and for other purposes; and at the
same time we will consider S. 2233, introduced by Senator Fulbright
by request, a bill to amend the Foreign Service Act of 1946, as
amended, and for other purposes.
(S. 443 and S. 2233, together with executive branch comments on
each, follow:)
[S, 443, 86th Conga, 1st scss.l
A BILL To amend the Foreign Service Act of 1946, as amended, and for other purposes
Be it enacted by the Senate and House of Representatives of the United States of
America in Congress assembled, That this Act may be cited as the "Foreign Service
Act Amendments of 1959"..
SEc. 2. Section 415 of such Act is amended to read as follows:
"SEc. 415. (a) There shall be ten classes of Foreign Service staff officers and
employees, referred to hereafter as staff officers and employees. The per annum
salaries of staff officers and employees within each class shall be as follows:
"Class 1___________________________________
$11,660
$11,990
$12,320
$12,650
$12,980
$13,310
$13,640
"Class2-----------------------------------
9,900
10,175
10,450
10,725
11,000
11,275
11,550
"Class 3-----------------------------------
8,140
8,415
8,690
8,966
9,240
9,515
9,790
"Class 4-----------------------------------
7,000
7,225
7,450
7,675
7,900
8,125
8,350
"Class 5-----------------------------------
6,150
6,350
6,550
6,750
6,950
7,150
7,350
"Class6-----------------------------------
5,300
5,500
5,700
6,900
6,100
6,300
6,600
"Class7-----------------------------------
4,650
4,800
4,960
5,100
5,250
5,400
5,550
"Class 8-----------------------------------
4,200
4,350
4,500
4,650
4,800
4,950
5,100
"Class 9___________________________________
3,750
3,900
4,050
4,200
4,350
4,500
4,650
"Class 10__________________________________
3,500
3,600
3,700
3,800
3,900
4,000
4,100
"(b) Notwithstanding the provisions of paragraph (a) of this section, the
Secretary may, under such regulations as he may prescribe, fix the salary or com-
pensation at lesser rates of salary than those prescribed by this section for the
applicable class of officers or employees who are employed locally abroad and
who are not available or are not qualified for transfer to another post or posts."
SEc. 3. Section 416 of such Act is amended to read as follows:
"SEc. 416. (a) A person appointed as a staff officer or employee shall receive
basic salary at one of the rates of the class to which he is appointed which the
Secretary shall, taking into account his qualifications and experience and the
needs of the Service, determine to be appropriate for him to receive.
"(b) Whenever the Secretary determines that the needs of the Service warrant
the appointment of staff officers or employees in a particular occupational group
uniformly at a specific step rate above the minimum rate of the applicable class,
he may adjust the basic salary of any staff officer or employee in the same class
and occupational group who is receiving less than such established uniform step
rate."
SEc. 4. Section 431 of such Act is amended by striking out in the first sentence
of,subparagraph (a) the phrase "the termination of time spent on authorized leave,
whichever shall be later," and inserting in lieu thereof the phrase "upon termina-
tion of his service in accordance with the provisions of paragraph (b) of this
section,"; and by amending subparagraph (b) of this section to read as follows:
"(b) The official services of a chief of mission shall not be deemed terminated
by the appointment of a successor but shall continue until he has relinquished
charge of the mission and for such additional period as may be determined by
the Secretary, but in no case shall such additional. period exceed fifty days, includ-
ing time spent in transit. During such period the Secretary may require him to
render such services as he may deem necessary in the interests of the Govern-
ment."
Sac. 5. Section 441 of such Act and the heading thereto is amended to read as
follows:
"CLASSIFICATION OF POSITIONS IN THE FOEEICN SERVICE AND IN THE DEPARTMENT
"SEc. 441. (a) Under such regulations as he may prescribe, and in order to
facilitate effective management, the Secretary shall classify all positions in the
Service at posts abroad, excluding positions to be occupied by chiefs of mission,
and in the case of those occupied by Foreign Service officers, reserve officers, and
staff officers and employees, he shall establish such positions in relation to the
classes established by sections 412, 414, and 415, respectively. Positions occu-
pied by local employees and consular agents, respectively, shall be allocated to
such classes as the Secretary may establish by regulation.
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
"(b) Under such regulations as he may prescribe, the Secretary may, notwith-
standing the provisions of the Classification Act of 1949, as amended (5 U.S.C.
1701 and the following), classify positions in or under the Department which he
designates as Foreign Service positions to be occupied by officers and employees
of the Service, and establish such positions in relation to th(i classes established by
sections 412, 414, and 415."
SEC. 6. (a) Section 444(a) of such Act is amended by stri ling out "444(a)" and
inserting "444" in lieu thereof which shall read as follows:
"SEC. 444. The Secretary shall, in accordance with such :?egulations as he may
prescribe, establish schedules of salaries for classes of pos tions of local (alien)
employees of the Service: Provided, That such schedules of salaries for local em-
ployees shall be based upon prevailing wage rates and Ielated compensation
practices for corresponding types of positions in the locality, as is consistent with
the public interest."
(b) Section 444(b) of such Act is hereby repealed.
SEc. 7. A new section 447 is hereby added to such Act, as f )flows:
"ADMINISTRATIVE ESTABLISHMENT OF HAZARDOUS DUTY PAY FOR CERTAIN CATE-
GORIES OF OFFICERS AND EMPLOYEES
"SEc. 447. The Secretary may, under such regulations as he may prescribe,
establish rates of salary differential, not exceeding 15 per cenrum of basic salary,
for officers or employees of the Service while they are assigned fer duty as couriers."
SEC. 8. Section 517 of such Act is amended by striking the second and third
sentences thereof.
SEC. 9. (a) Section 520 and the heading thereto is amended by striking out in
the heading the phrase "REINSTATEMENT AND RECALL" and substituting in lieu
thereof the phrase "REAPPOINTMENT, RECALL, OR REEMPLOYMENT"- and by
amending paragraph (b) to read as follows:
"(b) The Secretary may recall any retired Foreign Service officer temporarily
to active duty in the Service whenever he shall determine su ;h recall is in the
public interest."
(b) Section 520 of such Act is further amended by adding Et the end thereof
a new paragraph (c) which shall read as follows:
"(c) Notwithstanding the provisions of title 5, United States Code, section 62,
and title 5, United States Code, section 715a, a Foreign Service officer heretofore
or hereafter retired under the provisions of section 631 or 632 or t Foreign Service
staff officer or employee hereafter retired under the provisions of section 803
shall not, by reason of his retired status, be barred from employment in Federal
Government service in any appointive position for which he 13 qualified. An
annuitant so reemployed shall serve at the will of the appointing officer."
SEC. 10. Section 522 of such Act is amended by adding at the end thereof a
new subparagraph (3) which shall read as follows:
"(3) extend the appointment or assignment of any Reserve officer, or
continue the services of any such Reserve officer by reappoi.itment without
regard to the provisions of section 527 of this Act, for not more than five
additional years if the Secretary deems it to be in the public interest to
continue such officer in the Service, except that the assignment of any
Reserve officer under paragraph (2) above may not be extended under the
provisions of this paragraph without the consent of the head of the agency
concerned."
SEC. 11. Section 531 of such Act is amended to read as follows:
"SEc. 531. The Secretary may, under such regulations as he toay prescribe,
appoint staff officers and employees on the basis of qualifications a id experience.
The Secretary may make provisions for temporary, limited, and such other type
appointments as he may deem necessary. He is authorized to establish appro-
priate probationary periods during which newly appointed staff officers or em-
ployees, other than those appointed for temporary or limited ser-riees shall be
required to serve. The Secretary may terminate at any time, without regard to
the provisions of section 637, or the provisions of any other law, staff officers or
employees appointed for temporary or limited service and other staff officers or
employees who occupy probationary status." -
SEC. 12. Section 532 of such Act is amended to read as follows:
"SEc. 532. Under such regulations as he may prescribe, the Se nretary may
assign a staff officeror employee to any post or he may assign him to serve in any
position in which he is eligible to serve under the terms of this or an r other Act.
A staff officer or employee may be transferred from one post to another by order
of the. Secretary as the intrests of the Service may require." - U1W
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release 1AR, 1&P/ -~iQlAeR 1A000400920007-7
SEC. 13. (a) Paragraphs (a), (b), and (c) of section 571 of such Act are amended
to read as follows: -
"SEc. 571. (a) Any officer or employee of the Service may, in the discretion of
the Secretary, be assigned or detailed for duty in any Government agency, or in
any international organization, international commission, or any international
body, such an assignment or combination of assignments to be for a period of
not more than four years, except that under special circumstances the Secretary
may extend this four-year period for not more than four additional years.
"(b) If a Foreign Service officer shall be appointed by the President, by and
with the advice and consent of the Senate, or by the President alone to a position
in any Government agency, any United States delegation or mission to any inter-
national organization, international commission, or any international body, the
period of his service in such capacity shall be construed as constituting an assign-
ment within the meaning of paragraph (a) of this section and such person shall
not, by virtue of the acceptance of such an assignment, lose his status as a Foreign
Service officer. Service in such a position shall not, however, be subject to the
limitations concerning the duration of an assignment contained in that paragraph.
"(c) If the basic minimum salary of the position to which an officer or em-
ployee of the Service is assigned pursuant to the terms of this section is higher
receive as an officer or
d t
titl
i
e
o
s en
than the salary such officer or employee
employee of the Service, such officer or employee shall, during, the period such
difference in salary exists, receive the salary and allowances of the position in
which he is serving in lieu of his salary and allowances as an officer or employee
of the Service. Any salary paid under the provisions of this section shall be
paid from appropriations made available for the payment of salaries of officers
and employees of the Service and shall be the salary on the basis of which com-
putations and payments shall be made in accordance with the provisions of title
VIII. No officer or employee of the Service who, subsequent to the effective
date of this Act, is assigned to, or who, after June 30, 1960, occupies a position
in the Department that is designated as a Foreign Service position, shall be
entitled to receive a salary differential under the provisions of this paragrraph."
(b) Paragraph (e) of section 571 of such Act is amended by striking the phrase
"with heads of Government agencies" where it appears in the second sentence
and by redesignating the paragraph as "(d)".
SEC. 14. Section 625 of such Act is amended to read as follows:
"SEC. 625. Any Foreign Service officer or any Reserve officer, whose services
meet the standards required for the efficient conduct of the work of the Service
and who shall have been in a given class for a continuous period of nine months
or more, shall, on the first day of each fiscal year, receive an increase in salary to
the next higher rate for the class in which he is serving. Without regard to any
other law, the Secretary is authorized to grant to any such officer additional
increases in salary, within the salary range established for the class in which he
is serving, based upon especially meritorious service."
SEC. 15. The heading "PART D-SEPARATION OF FOREIGN SERVICE OFFICERS
FROMTHE SERVICE , under title VI of such Act is amended to read as follows:
"PART D-SEPARATION OF OFFICERS AND EMPLOYEES FROM THE SERVICE".
SEC. 16. Section 631 of such Act is amended to read as follows:
"SEC. 631. Any Foreign Service officer who is a career ambassador or a career
minister, other than one occupying a position as chief of mission or any other
position to which he has been appointed by the President, by and with the advice
and consent of the Senate, shall upon reaching the age of sixty-five, be retired
from the Service and receive retirement benefits in accordance with the provisions
of section 821, but whenever the Secretary shall determine it to be in the public
interest, he may extend such an officer's service for a period not to exceed five
years."
SEC. 17. Section 632 of such Act is amended to read as follows:
"SEc. 632. Any Foreign Service officer, other than one occupying a position as
chief of mission or any other position to which he has been appointed by the
President, by and with the advice and consent of the Senate, who is not a career
ambassador or a career minister shall, upon reaching the age of sixty, be retired
from the Service and receive retirement benefits in accordance with the provisions
of section 821 but whenever the Secretary shall determine it to be in the public
interest, he may extend such an officer's service for a period not to exceed five
years."
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approgd For ReleA?gG'119g%8 7
Cer CA1M-qf78-03721A000400020007-7
SEc, 18. (a) Paragraphs (a), (b), (c), and (d) of section 637 of such Act and
the heading thereto are amended to read as follows:
"SEPARATION FOR CAUSE
"SEc. 637. (a) The Secretary may, under such regulations as he may prescribe,
separate from the Service any Foreign Service officer, R( serve officer, or staff
officer or employee, on account of the unsatisfactory perfcrmance of his duties,
or for such other cause as will promote the efficiency of the Service, and for reasons
given in writing, but no such officer or employee shall be so separated until he
shall have been granted a hearing by the Board of the Foreign Service and the
unsatisfactory performance of his duties, or other cause for ;eparation, shall have
been established at such hearing, or else he shall have waived in writing his right
to a hearing. The provisions of this section shall not apply to Foreign Service
officers of class 8 or any other officer or employee of the Service who is in a proba-
tionary status or whose appointment is limited or temporary.
"(b) Any participant in the Foreign Service Retirement Lnd Disability system
who is:
"(1) over forty-five years of age, separated from tli-~ Service for unsatis-
factory performance of duty shall be retired upon an innuity computed in
accordance with the provisions of section 821 but no; in excess of 25 per
centum of his per annum salary at the time of his separation;
"(2) under forty-five years of age, separated from the Service for unsatis-
factory performance of duty shall at the time of separation receive a payment
equal to one year's salary or the refund, as provided in Section 841(a), of the
contributions made by him to the Foreign Service Retirement and Disability
Fund, whichever shall be greater.
"(c) Any participant in the Foreign Service retirement end disability system
separated under the provisions of paragraph (a) of this section, for reasons other
th
ti
f
an unsa
s
actory performancef dt i th di
ouy, may,nescre ,ion of the Secretary
and on the basis of criteria established in advance by him, bE granted the benefits
of paragraph (b) of this section depending upon his age. Unless the Secretary
determines at the time of separation of a participant under the provisions of
paragraph (a) of this section that he shall be granted the benefits of paragraph (b)
of this section his contributions to the Foreign Service Retirement and Disability
Fund shall be returned to him in accordance with the provisions of section 841(a).
"(d) Any officer or employee of the Service who is not a participant in the
Foreign Service retirement and disability system shall be entitled only to such
benefits as shall accrue to him under the retirement system in which he is a
participant."
(b) Section 637 of such Act is further amended by adding at the end thereof a
new paragraph (e) which shall read as follows:
"(e) Any payments made in accordance with the provisicns of paragraph (b)
or (c) of this section shall be made out of the Foreign Service Retirement and
Disability Fund."
SEC. 19. Section 638 of such Act and the heading thereto Lre amended to read
as follows:
"TERMINATION OF APPOINTMENT OF FOREIGN SERVICE RESERVE OFFICERS AND STAFF
OFFICERS AND EMPLOYEES UNDER LIMITED APPOI NTMENT
"SEC. 638. Notwithstanding the provisions of this or any ether law, the Secre-
tary may, under such regulations as he may prescribe, terminate the services of
any Reserve officer or staff officer or employee serving under limited appointment
at any time."
SEC. 20. Section 641 of such Act is amended to read as folliws:
"SEC. 641. All promotions of staff officers and employees tc a higher class shall
be made at the same or at a higher salary on the basis of performance and merit in
accordance with such regulations as the Secretary may prescribe."
SEC. 21. Section 642 of such Act is amended to read as follows;
"SEC. 642. (a) Under such regulations as the Secretary nay prescribe, any
staff officer or employee whose services meet the standards required for the
efficient conduct of the work of the Service shall receive an increase in salary at
periodic intervals to the next higher salary rate for the class in which he is serving.
Without regard to any other law the Secretary is authorizes. to grant any such
officer or employee additional increases in salary within the salary range estab-
lished for the class in which he is serving, based upon especially meritorious service.
"(b) Under such regulations as the Secretary may prescri oe, any staff officer
or employee who has achieved the maximum salary rate presc:?ibed by section 415
Aft
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
FOREIGN SERVICE ACT AMENDMENTS 35
fcr the class in which he is serving may be granted an additional in-class salary
increment from time to time in recognition of longevity and proficiency in the
Service. Each such salary increment shall be equal to the maximum step rate
increment of the applicable class and no person shall receive more than four such
salary increments while serving in the same class."
SEc. 22. Section 701 of such Act is amended by adding at the end thereof a new
sentence which shall read as follows: "The Secretary may also provide appropriate
orientation and language training to dependents of officers and employees of the
Government if such officers and employees are assigned to foreign relations
activities."
Sac. 23. Section 704 of such Act is amended by adding at the end thereof a new
paragraph (e) which shall read as follows:
"(e) The Secretary may, under such reglations as he may proscribe, in the
absence of suitably qualified United States citizens, employ persons who are not
,citizens of the United States by appointment to the staff of the Institute either on
a full- or part-time basis or by contract for services in the United States or abroad
at rates not in excess of those provided by the Classification Act of 1949, as
amended (5 U.S.C. 1071)."
SEc. 24. (a) Section 803 (b) (2) of such Act is amended to read as follows:
"(2) have paid into the Fund a special contribution for each year of such
service in accordance with the provisions of paragraph (b) of section 852."
(b) Section 803 is further amended by adding at the end thereof a new para-
graph (c) which shall read as follows:
In accordance with such regulations as the President may prescribe,
any Foreign Service staff officer or employee appointed by the Secretary of State
who has completed at least ten years of continuous service in the Department's
Foreign Service, exclusive of military service, shall become a participant in the
Foreign Service retirement and disability system and shall make a special contribu-
tion to the Foreign Service Retirement and Disability Fund in accordance with
the provisions of section 852.
"(2) Any such officer or employee who, under the provisions of paragraph
(c) (1) of this section, becomes a participant in the Foreign Service retirement and
disability system, shall he mandatorily retired for age during the first year after
the effective date of this section if he attains age sixty-four or if he is over age
sixty-four; during the second year at age sixth-three; during the third year at age
sixty-two; during the fourth year at age sixty-one, and thereafter at age sixty."
SEc. 25. Section 804 of such Act is amended to read as follows:
"SEc. 804. (a) Annuitants shall be persons who are receiving annuities from
the Fund on the effective date of this Act and all persons, including widows,
widowers, dependent widowers, children, and beneficiaries of participants or
annuitants who shall become entitled to receive annuities in accordance with the
provisions of this Act, as amended, or in accordance with the provisions of section
5 of the Act of May 1, 1956 (70 Stat. 125).
"(b) When used in this title the term-
"(1) `Widow' means the surviving wife of a participant who was married to
such participant for at least two years immediately preceding his death or is the
mother of issue by such marriage.
"(2) 'Widower' means the surviving husband of a participant who was married
to such participant for at least two years immediately preceding her death or is
the father of issue by such marriage.
"(3) 'Dependent widower' means the surviving husband of a participant who
was married to such participant for at least two years immediately preceding her
death or is the father of issue by such marriage, and who is incapable of self-
support by reason of mental or physical disability, and who received more than
one-half of his support from such participant.
"(4) 'Child' means an unmarried child, including (a) an adopted child, and
(b) a stepchild or recognized natural child who received more than one-half of
his. support from the participant, under the age of eighteen years, or such un-
married child regardless of age who because of physical or mental disability
incurred before age eighteen is incapable of self-support."
SEc. 26. Section 811 of such Act is amended by striking out the word "Five"
and inserting the words "Six and one-half".
SEc. 27. (a) Paragraphs (a), (b), and (c) of section 821 of such Act are amended
to read as follows:
"SEc. 821, (a) The annuity of a participant shall be equal to 2 per. eentum of
his average basic salary for the highest five consecutive years of service, for
which full contributions have been made to the Fund, multiplied by the number
of years, not exceeding thirty-five, of service credit obtained in accordance with
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
36
the provisions of sections 851, 852, and 853. However, the highest five years of-
service for which full contributions have been made to the Fund shall be used
in computing the annuity of any Foreign Service officer who serves as chief of
mission and whose continuity of service as such is interrupted prior to retirement
by appointment or assignment to any other position determined by the Secretary
to be of comparable importance. In determinix,g the aggregate period of service
upon which the annuity is to be based, the fractional part of a month, if any,
shall not be counted.
"(b) At the time of retirement, any participant may, except as otherwise
provided by section 834(a), elect to receive a reduced annuity and to provide
for an annuity payable to his widow or her widower, commencing on the date
following such participant's death and terminat;ng upon the death of such sur-
viving widow or widower. The annuity paya )1e to the surviving widow or
widower after such participant's death shall be 10 per centum of the amount of
the participant's annuity, up to the full amount of his annuity, specified by him
as the base for the survivor benefits computed a: prescribed in paragraph (a) of
this section. The annuity of the participant raking such election shall be
reduced by 2% per centum of any amount up to $2,400 lie specifies as the base
for the survivor benefit plus 10 per centum of any amount over $2,400 up to the
full amount of the participant's annuity so specified.
"(c) (1) If an annuitant who made the election provided for in paragraph (b)
of this section dies and is survived by a widow or widower and by a child or
children, there shall be paid to or on behalf of each child, in addition to the
annuity payable to the surviving widow or widower under such election, an
annuity equal to the smallest of: (i) 40 per centum of the annuitant's average
salary divided by the number of children; (ii) $600; or (iii) $1,800 divided between
the number of children.
"(2) If an annuitant who did not make the election provided for in paragraph
(b) dies and is survived by a widow or widower ar d by a child or children, or if
such annuitant is not survived by a widow or widower but by a child or children,
each surviving child shall be paid an annuity equal to the smallest of: (1) 50 per
centum of the annuitant's average salary divided by the number of children;
(ii) $720; or (iii) $2,160 divided between the number of children."
(b) Section 821 of such Act is further amended by adding new paragraphs (d),
(e), and (f) which shall read as follows:
"(d) If a surviving widow or widower who is recerring an annuity in accordance
with the provisions of paragraph (b) of this section lies or the annuity of a child
is terminated, the annuity of any other child or children shall be recomputed and
paid as though such wife, husband, or child has not survived the participant.
"(e) The annuity payable to a child under paragraphs (c) or (d) of this section
shall begin on the first day of the next month after i he participant dies and such
annuity or any right thereto shall be terminated upon death, marriage, or attain-
ment of the age of eighteen years, except that, if a chid is incapable of self-support
by reasons of mental or physical disability, the annuity shall be terminated only
when such child dies, marries, or recovers from such disability.
"(f) A participant who is not entitled to designate a beneficiary in accordance
with the provisions of paragraph (b) of this section may at the time of retirement
elect to receive a reduced annuity for himself and to orovide for an annuity pay-
able after his or her death to a beneficiary-whose nams shall be notified in writing
to the Secretary. The participant may elect that sLeh beneficiary shall receive
annuity payments either equal to 50 per centum of tl e participant's full annuity
or to such lesser base sum as the participant shall designate. The annuity payable
to a participant making such election shall be reduced by 10 per centum of an
annuity computed as provided in subsection (a) of this section and by 5 per
centum of an annuity so computed for each full five Sears the person designated
is younger than the retiring participant, but such total reduction shall not exceed
40 per centum. Upon the death of the surviving beneficiary all payments shall
cease and no further annuity payments shall be due or payable. No such election
of a reduced annuity payable to a beneficiary shall be valid until the participant
shall have satisfactorily passed a physical examination as prescribed by the
SEC. 28. (a) Paragraphs (a), (b), and (c) of section 8`c 1 of such Act are amended
to read as follows:
"SEC. 831. (a) Any participant who has five years of service credit toward
retirement under the system, excluding military or naval service that is credited
in accordance with provisions of sections 851 or 852'a) (2), and who" becomes
totally disabled or incapacitated for useful and efficient service by reason of dis
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release,o1Mc-CL4-RQQ?QW21A0004(ft020007-7
ease, illness, or injury not due to vicious habits, intemperance, or willful mis-
conduct on his part, shall, upon his own application or upon order of the Secre-
tary, be retired on an annuity computed as prescribed in section 821. If the
disabled or incapacitated participant has less than twenty years of service credit
toward his retirement under the system at the time he is retired, his annuity
uted on the assumption that he had had twenty years of service,
com
ll b
h
p
e
s
a
but the additional service credit that may accrue to a participant under this
f
h
i
me o
e t
provision shall in no case exceed the difference between his age at t
retirement and the mandatory retirement age applicable to his class in the
Service.
"(b) In each case such disability shall be determined by the Secretary upon
the basis of the advice of one or more duly qualified physicians or surgeons,
designated by the Secretary to conduct examinations. Unless the disability is
permanent, like examinations shall be made annually until the annuitant has
reached the statutory mandatory retirement age for his class in the Service.
If the Secretary determines, on the basis of the advice of one or more duly qualified
physicians or. surgeons conducting such examinations that an annuitant has
recovered to the extent that he can return to active duty, the annuitant shall be
given the opportunity to be reinstated or reappointed in the Service. The
Secretary may reinstate any such recovered disability annuitant in the class in
which he was serving at time of retirement. The Secretary may, taking into
consideration the age, qualification, and experience of such officer and the rank
of his contemporaries in the Service, recommend that the President, by and with
the advice and consent of the Senate, appoint him to a class higher than the one
in which he was serving prior to retirement. Payment of the annuity shall con-
tinue until a date six months after the date of the examination showing recovery
or until the date of reinstatement to active duty in the Service, whichever is
earlier. Fees for examinations under this provision, together with reasonable
traveling and other expenses incurred in order to submit to examination, shall be
paid out of the Fund. If the annuitant fails to submit to examination as required
under this section., payment of the annuity shall be suspended until continuance
of the disability is satisfactorily established.
"(c) If a recovered disability annuitant whose annuity is discontinued is for
any reason not reinstated to active duty, or reappointed to a higher class in the
Service, he shall be considered to have been separated within the meaning of
section 834 as of the date he was retired for disability and he shall, after the dis-
continuance of the disability annuity, be entitled to the benefits of that section
or of section 841(a) except that he may elect voluntary retirement in accordance
with the provisions of section 636 if he can qualify under its provisions."
(b) Section 831 of such Act is further amended by adding new paragraphs
(d), (e), and (f) which shall read as follows:
"(d) No participant shall be entitled to receive an annuity under this Act
and compensation for injury or disability to himself under the Federal Employees
Compensation Act of September 7, 1916, as amended, covering the same period
of time. This provision shall not bar the right of any claimant to the greater
benefit conferred by either Act for any part of the same period of time. Neither
this provision nor any provision of the Act of September 7, 1916, as amended,
shall be so construed as to deny the right of any person to receive an annuity under
this Act by reason of his own services and to receive concurrently any payment
under such Act of September 7, 1916, as amended, by reason of the death of some
other persons.
'(e) Notwithstanding any provision of law to the contrary, the right of any
participant entitled to an annuity under this Act shall not be affected because
such participant has received an award of compensation in a lump sum under
section 1.4 of the Act of September 7, 1916, as amended, except that where such
annuity is payable on account of the same disability for which compensation under
such section has been paid, so much of such compensation as has been paid for
any period extended beyond the date such annuity becomes effective, as deter-
mined by the Secretary of Labor, shall be refunded to the Department of Labor,
to be paid into the Federal Employees' Compensation Fund. Before such person
shall receive such annuity he shall (1) refund to the Department of Labor the
amount representing such computed payments for such extended period, or (2)
authorize the deduction of such amount from the annuity payable to him under
this Act, which amount shall be transmitted to such Department for reimburse-
ment to such Fund. Deductions from such annuity may be made from accrued
and accruing payments, or may be prorated against and paid from accruing pay-
ments in such manner as the Secretary of Labor shall determine, whenever he finds
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 ApproveO For ReleaseA1999d /,27 a &BQR7 Q3721A000400020007-7
that the financial circumstances of the annuitant are such as to warrant such
deferred refunding."
SEC. 29. Section 832 of such Act is amended to read a- follows:
"SEC. 832. (a) In case a participant shall die and no -N alid claim for annuity is
payable under the provisions of this Act, his contributio is to the Fund, with in-
terest, shall be paid in accordance with the provisions of sections 841(a) and 881.
"(b) If a participant who has at least five years of ser dce credit toward retire-
ment under the system, excluding military or naval service that is credited in
accordance with the provisions of section 851 or 852(a) (, ), dies before separation
or retirement from the Service and is survived by a widow or a dependent widower,
who qualified for an annuity under the provisions of paragraph (b) of section 821,
such widow or dependent widower shall be entitled to an annuity equal to 50 per'
centum of the annuity computed in accordance with the provisions of paragraph
(e) of this section and paragraph (a) of section 821. Th; annuity of such widow
or dependent widower shall commence on the date following death of the partic -
pant and shall terminate upon death of the widow or dependent widower, or
upon the dependent widower's becoming capable of self-,3upport.
"(c) If a participant who has at least five years of service credit toward retire-
ment under the system, excluding military or naval sex vice that is credited in
accordance with the provisions of section 851 or 852(a)(2), dies before separation
or retirement from the Service and is survived by a widow )r a dependent widower,
who qualifies for an annuity under the provisions of paragraph (b) of section 821,
and a child or children, each surviving child shall be enti pled to an annuity com-
puted in accordance with the provisions of paragraph (c) ;1) of section 821. The
child's annuity shall begin and be terminated in accordance with the provisions
of paragraph (e) of section 821. Upon the death of the surviving widow or
dependent widower or termination of the annuity of a child, the annuity of any
other child or children shall be recomputed and paid as though such widow or
dependent widower or child had not survived the participant.
"(d) If a participant who has at least five years of service credit toward retire-
ment under the system, excluding military or naval ser rice that is credited in
accordance with the provisions of section 851 or 852(a) (2), dies before separa-
tion or retirement from the Service and is not survived by a widow or widower,
but by a child or children, each surviving child shall be entitled to an annuity
computed in accordance with the provisions of paragraph (c) (2) of section 821.
"(e) If, at the time of his or her death, the deceased participant had less than
twenty years of service credit toward retirement under the system, the annuities
payable in accordance with paragraph (b) of this section shall be computed in
accordance with the provisions of section 821 on the assumption he or she had had
twenty years of service, but the additional service credit that may accrue to a
deceased participant under this provision shall in no case exceed the difference
between his or her age on the date of death and the ma-tdatory retirement age
applicable to his or her class in the Service. In all cases arising under paragraphs
(b), (c), (d), or (e) of this section, it shall be assumed that t Ie deceased participant
was qualified for retirement on the date of his death."
SEC. 30. A new section 834 is hereby added to such Ac, as follows:
"DISCONTINUED SERVICE RETIREMENT
"SEC. 834. (a) Any participant who voluntarily sepa ?ates from the Service
after obtaining at least five years of service credit toward retirement under the
system, excluding military or naval service that is credit ed in accordance with
the provisions of sections 851 or 852(a) (2), may, upon sepa 'ation from the Service
or at any time prior to becoming eligible for an annuity, e.ect to have his contri-
butions to the Fund returned to him in accordance with the provisions of section
841, or to leave his contributions in the Fund and receive an annuity, computed
as prescribed in section 821, commencing at the age of sixty years. The pro-
visions of paragraph (f) of section 821 shall not be applicable to such participants.
"(b) If a participant who has qualified in accordance with the provisions of
paragraph (a) of this section to receive a deferred annuity ommencing at the age
of sixty dies before reaching the age of sixty his contribut ens to the Fund, with
interest, shall be paid in accordance with the provisions o;' sections 841 and 881.
SEC. 31. Section 841 of such Act is amended to read as Follows:
"SEC. 841. (a) Whenever a participant becomes separated from the Service
without becoming eligible for an annuity or a deferred annuity in accordance with
the provisions of this Act the total amount of contributions from his salary with
interest thereon at 4 per centum per annum, compounded annually at the end of
each fiscal year through June 30, 1958; semiannually as of December 31, 1958;
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release 19 ?/27RVA D 4 72l1A000400QZ0007-7
annually thereafter as of December 31, and proportionately for the period served
during the year of separation including all contributions made during or for such
period, except as provided in section 881, shall be returned to him.
"(b) In the event that the total contributions of a retired participant, other
than voluntary contributions made in accordance with the provisions of section
881, with interest at 4 per centum per annum compounded annually as is pro-
vided in paragraph (a) of this section added thereto, exceed the total amount
returned to such participant or to an annuitant claiming through him, in the form
of annuities, accumulated at the same rate of interest up to the date the annuity
payments cease under the terms of the annuity, the excess of the accumulated
contributions over the accumulated annuity payments shall be paid in the follow-
ing order of precedence upon the establishment of a valid claim therefor, and
such payment shall be a ban to recovery by any other person:
"(1) To the beneficiary or beneficiaries designated by the retired participant
in writing to the Secretary;
"(2) If there be no such beneficiary, to the widow or widower of such
participant;
"(3) If none of the above, to the child or children of such participant and
descendants of deceased children by representation;
"(4) If none of the above, to the parents of such participant or the survivor of
them;
"(5) If none of the above, to the duly appointed executor or administrator of
the estate of such participant;
"(6) If none of the above, to other next of kin of such participant as may be
determined by the Secretary in his judgment to be legally entitled thereto.
"(c) No payment shall be made pursuant to paragraph (b) (6) of this section
until after the expiration of thirty days from the death of the retired participant
or his surviving annuitant."
SEC. 32. Section 851 of such Act is amended to read as follows:
"SEC. 851. For the purposes of this title, the period of service of a participant
shall be computed from the effective date of appointment as a Foreign Service
officer, or, if appointed prior to July 1, 1924, as an officer or employee of the
Diplomatic or Consular Service of the United States, or who becomes a participant
under the provisions of this Act, as amended, but all periods of separation from
the Service and so much of any leaves of absence without pay as may exceed
six months in the aggregate in any calendar year shall be excluded, except leaves
of absence while receiving benefits under the Federal Employees' Compensation
Act of September 7, 1916, as amended, and leaves of absences granted participants
while performing active and honorable military or naval service in the Army,
Navy, Air Force, Marine Corps, or Coast Guard of the United States."
SEc. 33. (a) Paragraphs (a), (b), and (c) of section 852 of such Act are amended
to read as follows:
"(a) A participant may, subject to the provisions of this section, include in his
period of service-
"(1) service performed as a civilian officer or employee of the Government,
including the municipal government of the District of Columbia, prior to
becoming a participant; and
"(2) active and honorable military or naval service in the Army, Navy,
Marine Corps, Air Force, or Coast Guard of the United States.
"(b) A person may obtain prior civilian service credit in accordance with the
provisions of paragraph (a) (1) of this section by making a special contribution
to the Fund equal to 5 per centum of his basic annual salary for each year of
service for which credit is sought subsequent to July 1, 1924, and prior to the
effective date of this Act, and at 6Y2 per centum thereafter with interest com-
pounded annually at 4 per centum per annum to the date of payment. Any
such participant may, under such conditions as may be determined in each instance
by the Secretary, pay such special contributions in installments.
"(c)(1) If an officer or employee under some other Government retirement
system, becomes a participant in the Foreign Service retirement and disability
system by direct transfer, such officer or employee's total contributions and
deposits, including interest accrued thereon, except voluntary contributions, shall
be transferred to the Foreign Service Retirement and Disability Fund effective
as of the date such officer or employee becomes a participant in the system.
Each such officer or employee shall be deemed to consent to the transfer of such
funds and such transfer shall be a complete discharge and acquittance of all
claims and demands against the other Government retirement fund on account
of service rendered prior to becoming a participant in the Foreign Service retire-
ment and disability system.
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Apprcjed For Rett9s1N199/08/27 : CIA-RDP78-03721A000400020007-7
I ERVICE ACT AMENDMENTS
"(2) No officer or employee, whose contributions are transf srred to the Foreign
Service Retirement and Disability Fund in accordance with the provisions of
paragraph (c) (1) of this section, shall be required to make contributions in addi-
tion to those transferred, for periods of service for which ful; contributions were
made to the other Government retirement fund, nor shall any refund be made
to any such officer or employee on account of contributions made during any
period to the other Government retirement fund, at a higher rate than that fixed
by section 811 of this Act for contributions to the Foreign Sei vice retirement and
disability system.
"(3) No officer or employee, whose contributions are transferred to the Foreign
Service Retirement and Disability Fund in accordance wit i the provisions of
paragraph (c) (1) of this section, shall receive credit for periods of prior service
for which a refund of contributions has been made, or for which no contributions
were made to the other Government retirement fund. A participant may, how-
ever, obtain credit for such prior service by making a special contribution to the
Foreign Service Retirement and Disability Fund in accordance with the provisions
of paragraph (b) of this section."
(b) Section 852 of such Act is further amended by adding at the end thereof
new paragraphs (d) and (e) which shall read as follows:
"(d) No participant may obtain prior civilian service credi; toward retirement
under the Foreign Service retirement and disability system for any period of
civilian service on the basis of which he is receiving or will in the future be entitled
to receive any annuity under another retirement system covering civilian per-
sonnel of the Government.
"(e) A participant may obtain prior military or naval service credit in accord-
ance with the provisions of paragraph (a) (2) of this section by applying for it
to the Secretary prior to retirement or separation from the Service, but in the
case of a participant who is eligible for and receives retired pay on account of
military or naval service, the period of service upon which such retired pay is
based shall not be included except that in the case of a participant who is eligible
for and receives retired pay on account of a service-connected disability incurred
in combat with an enemy of the United States or resulting fi om an explosion of
an instrument of war and incurred in line of duty during an enlistment or employ-
ment as provided in Veterans Regulation Numbered 1(a), part I, paragraph I,
or is awarded under title III of Public Law 810, Eightieth Congress, the period
of such military or naval service shall be included. No contributions to the
Fund shall be required in connection with military or naval service credited to
a participant in accordance with the provisions of paragraph (a; (2) of this section."
SEC. 34. The heading "PART H-OFFICERS REINSTATED IN THE SERVICE"
under title VIII of such Act is amended to read as follows: "PART H-ANNUi-
TANTS RECALLED OR REINSTATED IN THE SERVICE OR REEMPLOYED IN THE
GOVERNMENT".
SEC. 35. Section 871 of such Act is amended and a heading is added thereto
as follows:
"RECALL
"SEC. 871. Any annuitant recalled to active duty in the Se.-vice in accordance
with the provisions of paragraph (b) of section 520 or paragraph (b) of section
831 shall, while so serving, be entitled in lieu of his retirement allowance to the
full pay of the class in which he is serving. During such ser vice, he shall make
contributions to the Fund in accordance with the provisic ns of section 811.
The amount of his annuity when he reverts to the retired list shall be recomputed
in accordance, with the provisions of section 821."
SEC. 36. A new section 872 is hereby added to such Act as :'ollows:
"REEMPLOYMENT
"SEC. 872. (a) Notwithstanding any other provision of law, any officer or
employee of the Service, who has retired under this Act, as amended, and is
receiving an annuity pursuant thereto, and who is reemployed in the Federal
Government service in any appointive position either on a part-time or full-time
basis, shall be entitled to receive the salary of the position in which he is serving
plus so much of his annuity payable under this Act, as amended, which when
combined with such salary does not exceed during any calendar year the highest
basic salary such officer or employee was entitled to receive under sections 412
or 415 of the Act, as amended, on the date of his retiremen ; from the Service,
Any such reemployed officer or employee who receives salary curing any calendar
year in excess of the maximum amount which he may be untitled to receive
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release I 9 4/27RtQ1 RD 8 72AA000400020007-7
under this subparagraph shall be entitled to such salary in lieu of benefits here-
under.
"(b) When any such retired officer or employee of the Service is reemployed,
the employer shall notify the Department of State of such reemployment together
with all pertinent information relating thereto and shall cause to be paid, by
transfer or otherwise, to the Department of State funds necessary to cover gross
salary, employer contributions, and gross lump sum leave. payment relating to
the employment of the reemployed officer or employee. The Department of
State shall make to and on behalf of the reemployed officer or employee payments
to which he is entitled under the provisions of paragraph (a) of this section,
and shall make those withholding and deductions authorized and required by law.
"(c) In the event of any overpayment under this section the Secretary of
State is authorized to withhold the amount of such overpayment from the salary
payable to such reemployed officer or employee or from his annuity."
SEC. 37. (a) Paragraph (a) of section 881 of such Act is amended to read as
follows:
"SEC. 881. (a) Any participant may, at his option and under such regulations
as may be prescribed by the President, deposit additional sums in multiples of
1 per centum of his basic salary, but not in excess of 10 per centum of such salary,
which amounts together with interest at 3 per centum per annum, compounded
annually at the end of each fiscal year through June 30, 1958; semiannually as
of December 31, 1958; annually thereafter as of December 31, and proportionately
for the period served during the year of his retirement, including all contributions
made during or for such period, shall, at the date of his retirement and at his
election, be-"
(b) Paragraph (c) of section 881 of such Act is amended by deleting the word
"annually" and inserting in lieu thereof the phrase "as is provided in paragraph
(a) of this section".
SEC. 38. (a) Section 1021 of such Act is amended by inserting the phrase
"the Department including" immediately prior to the phrase "the Service"
wherever it appears in this section.
(b) Section 1021(a) is further amended by striking out the phrase "if recom-
mended by the Director General" and inserting in lieu thereof the phrase "at
the discretion of the Secretary".
SEC. 39. Section 11 of Public Law 885, Eighty-fourth Congress (70 Stat. 890);
is hereby amended by inserting after the phrase "Government-owned vehicles
the phrase "or taxicabs" and by inserting after the phrase "public transportation
facilities" the phrase "other than taxicabs".
SEC. 40. Paragraph (4) of section 104(a) of the Internal Revenue Code of 1954
(26 U.S.C. 104(a) (4)) (relating to the exclusion from gross income of compensation
for injuries and sickness) is hereby amended to read as follows:
"(4) amounts received as a pension, annuity, or similar allowance for
personal injuries or sickness resuiting from active service in the armed forces
of any country or in the Coast and Geodetic Survey or the Public Health
Service, or as a disability annuity payable under the provisions of section 831
of the Foreign Service Act of 1946, as amended (22 U.S.C. 1081; 60 Stat.
1021)."
SEC. 41. Foreign Service staff officers and employees receiving basic compensa-
tion immediately prior to the effective date of this Act at one of the scheduled rates
provided by section 415 of such Act, as amended, shall be transferred to the new
classes established by section 415 of such Act, as amended, and shall receive
basic compensation on and after the effective date of this Act, as follows:
Present class and step rate of sec. 415 of the
Foreign Service Act of 1946, as amended (1958)
Corresponding new class and step rate of see.
415 of the Foreign Service Act of 1946, as
amended, by this act -
Amount
of adjust-
ments -
160
$13
$13,310
$150
,
12
830
12,980
150
,
12
480
12,650
170
,
12
120
12,320
200
,
11
770
11,990
220
,
12
120
12,320
200
,
11, 770
11,990
220
11
485
11,550
,
205
11
11,275
,
10,920
11,000
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Rele 11R , (g7Ac-TCIAE 7ps03721A000400020007-7
P88-3------------------------ 5 $11.165 FSS-2_---------------------- 6
4 10,885 5
3 10,600 4
2 10,320 3
1 10,030 2
F88-4__------------ _--------- 5 10,230 FSS-2_______________-------- 3
4 9,945 2
9,065 F88-3----------------------- 9,380
9- 095
9,315
9,030
8,815
8,610
8
395
,
8,540
4 8,325 FSS-4-----------------------
3 8,120
2 7,905
1 7,690
FSS-7------------------------ 6 8,050 F88-4-----------------------
5 7,840
4 7,630
4 7,415
2 7,200
1 6,990
F88-8------------------------ B 7,350 FS8-5----------------------
6 7,140
4 6,025
3 6,710
2 6,496
1 6, 285
F8S-9------------------------ 6 6,650 FSS-5?________________----.
6 4,010 P88-10______________________ 7
5 3, 870 5
4 3, 730 4
3 3,585 2
2 3,445 1
1 3, 300 1
F'
88-15_______________________ All step rates F88-10______-______________ 1
and below
I
4 5,540 F88-7_______________________
3 5,400
2 5, 260 F88
1 5,115
-11_____________ 7 5,500 185-7 ___________________?_-
6 5, 355
b 5, 212
4 5, 070
3 4
, 930
2 4, 790
1 4, 650
F88-12_-_____________________ 7 5,025 FS8-S ________-____________
6 4, 800
b 4, 745
4 4
, 602
3 4,460
2 4, 320
1 4,180
F
88-13__________________ 7 4,580 188-9____--________________-
0 4, 440
5
- 4, 295
4 4,155
3 4, 010
2 3, 870
1 3, 730
F
88-14_______________________ 7 4,155 FS8-9_______________________
Present class and step rate of see. 415 of the
Foreign Service Act of 1946, as amended (1958)
Corresponding new class and step rate of see.
415 of the Foreign Servi~ e Act of 1946, as
amended, by this act
Amount
of adjust-
ments
Class
Step
Rate
Class
Step
Rate
$11,275
$110
11, 000
115
10, 725
125
10,420
130
10,175
10 450
145
220
175
10,
230
3
7
9, 790
125
2
6
9,515
135
1
5
9, 240
9, 790
145
190
5
6
9, 515
200
4
5
9, 240
210
3
8, 965
150
2
8, 690
80
1
2
8,415
20
8, 965
210
5
3
8
8,690
150
8,350
25
8,125
5
8,125
220
7,900
8,125
210
75
7, 900
60
4
7, 675
45
3
7, 450
35
2
7.225
25
1
7,000
10
7,350
6
7,150
10
5
6, 950
25
4
6,750
40
3
6, 550
55
2
6, 350
65
4
6,750
100
5
6,435
P88-6_____________?_______- 7
6,500
65
4
6, 220
6
6,300
80
3
6, 005
5
6,100
95
2
b, 795
4
b, 900
105
SS-10_______________________
1
7
5, 585
6,175
3
P88-6_________-------------- 6
6,700
6,300
115
125
6
5, 970
5
6,100
130
5
5, 755
4
51900
145
7
5,550
10
6
5,400
-------
6
5, 400
140
5
7
b, 250
5,550
135
50
6
5, 400.
45
5
5,250
35
4
5,100
30
3
4,950
20
2
4,800
10
1
7
4,650
5,100
----------
75
6
4,950
60
5
4,800
55
4
4,650
45
3
4,500
40
2
4,350
30
1
4,200
4,650
20
70
4,500
60
4,350
55
4,200
45
4,060
40
3,900
30
3,750
4,200
20
45
4,100
90
3, 900
30
3,800
70
3,600
15
3,500
55
3,500
3,600
200
5
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
F
 Approved For ReI, G19 XCi C} U -O3721AOO0400020007-7
SEC. 42. The annuity of each former participant under the Foreign Service
retirement and disability system, who retired prior to July 28, 1956 and who at
the time of his retirement had creditable service in excess of thirty years, shall be
recomputed on the basis of actual years of creditable service not in excess of thirty-
five years. Service which was not creditable under the Foreign Service retire-
ment and disability system on the date a former participant retires, shall not be
included as creditable service for the purpose of this recomputation. The annu-
ities payable to such persons shall, when recomputed, be paid at the rates so
determined, but no such recomputation or any other action taken pursuant to
this section shall operate to reduce the rate of the annuity any such person is
entitled to receive under the Foreign Service retirement and disability system.
SEc. 43. (a) The provisions of this Act shall become effective as of the first day
of the first pay period which begins one month after the passage of this Act, except
as provided in paragraphs (b), (c), and (d) of this section.
(b) The provisions of paragraphs (c) (1) and (c) (2) of section 803 of the Foreign
Service Act of 1946, as amended by section 24(b) of this Act, shall become effective
on the first day of the first month which begins one year after the effective date
of this Act, except that any Foreign Service staff officer or employee, who at the
time this Act becomes effective meets the requirements for participation in the
Foreign Service retirement and disability system, may elect to become a partici-
pant in the system before the mandatory provisions become effective. Such
Foreign Service staff officers and employees shall become participants effective
on the first day of the second month following the date of their application for
earlier participation.
(c) The amendment made by section 40 of this Act shall be effective with
respect to taxable years ending after the date of enactment of this Act.
(d) The provisions of section 42 of this Act shall take effect on the first day of
the first month which begins more than thirty days after the date of enactment
of this Act.
SEC. 44. Notwithstanding the provisions of this Act, existing rules, regulations
of or applicable to the Foreign Service of the United States shall remain in effect
until revoked or rescinded or until modified or superseded by regulations made in
accordance with the provisions of this Act, unless clearly inconsistent with the
provisions of this Act.
SEc. 45. The following headings and sections in the Foreign Service Act of 1946,
as amended, are hereby repealed:
(1). Section 442 of such Act and the heading thereto.
(2) Section 525 of such Act and the heading thereto.
(3) Section 576 of such Act and the heading thereto.
(4) Sections 651 and. 652 of such Act and the headings thereto, including
Part F.
DEPARTMENT OF STATE,
Washington, D.C. December 31, 1958.
President of the Senate.
I DEAR MR. VICE PRESIDENT: In its continuing efforts to improve and strengthen
the administration of the Foreign Service, the Department is submitting a pro-
posed bill "To amend the Foreign Service Act of 1946, as amended, and for other
purposes" (tab I) for consideration by the U.S. Senate.
The amendments proposed in this bill are urgently needed to improve and
strengthen the administration of the Foreign Service. They would accomplish
the following:
1. Provide an improved 10-class salary structure for the Foreign Service staff
corps and authorize the Secretary to fix salary rates for U.S. citizens employed
abroad.
2. Provide authority for appointment of Foreign Service staff personnel at
in-class salary step rates and authorize the fixing of appointment salary rates for
short-supply categories of personnel.
3. Clarify provisions governing the termination of the services of chiefs of mis-
sion.
4. Provide greater flexibility in the classification of Foreign Service positions.
5. Provide authority to pay a hazardous duty salary differential to diplomatic
couriers.
6. Clarify and improve provisions governing lateral entry into the Foreign
Service.
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved FdVRelease 1858!d08/27RvCAAWRDJPr7O 1A000400020007-7
7. Improve provisions relating to reinstatemen ; and recall of Foreign Service
officers and remove existing restrictions on the reemployment by any Government
agency of retired participants in the Foreign Sei vice retirement and disability
system.
8. Provide authority for the continuation on the rolls of certain Foreign Service
Reserve officers notwithstanding the usual limitat on on duration of assignment.
9. Clarify and simplify provisions governing appointment, assignment, transfer,
and promotion of Foreign Service staff personnel. Establish a system of longevity
for staff personnel.
10. Clarify and simplify provisions governing this assignment of Foreign Service
personnel to Government agencies.
11. Liberalize provisions relating to extension of services of Foreign Service
officers beyond mandatory retirement age.
12. Provide a uniform basis for effecting separation for cause.
13. Provide specific authority for the termination of officers and employees
serving under limited appointment.
14. Improve provisions governing the establish rent of, the conduct of, and
the use of the facilities of the Foreign Service Insti lute.
15. Provide for general improvement in the Foreign Service retirement and
disability system, including such specific improvements as:
(a) Liberalization of survivorship benefits and coverage of surviving
children;
(b) Provision for the participation of certain Foreign Service staff personnel
in the system;
(c) Clarification of provisions for reinstatement of recovered disability
annuitants;
(d) Clarification of provisions relating to def,th in service;
(e) Clarification of provisions governing prior service credit;
(f) Provision for the automatic transfer of contributions from one retire-
ment fund to another; and
(g) An increase in rate of employee contributions from 5 to biz percent.
16. Improve provisions governing the acceptance of gifts.
17. Clarify provisions relating to the use of Government-owned vehicles at
posts abroad.
18. Exempt disability annuities from income tax lability.
Throughout the proposed draft bill there are perfeoting and clarifying technical
changes that relate to the proposals listed above.
An explanation of each of the proposed amendments is enclosed (tab II),
together with an estimate of the cost involved in implementing the proposed
legislation (tab III).
Enactment of this proposed legislation will provide important improvements
in the personnel system for the conduct of foreign affairs. The Department
recommends the passage of this bill to accomplish .he purposes set forth above
and trusts that it may receive favorable considers ;ion by the Congress;
The Department has been informed by the Burezu of the Budget that there
is no objection to the submission of this draft legislation.
Sincerely yours,
CHRISTIAN A. HERTER, Acting Secretary.
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Re1age a lbc7 #,A OR78-03721AG00400020007-7
EXPLANATION OF PROPOSED AMENDMENTS TO THE FOREIGN SERVICE
ACT OF 1956, AS AMENDED
TITLE IV. CATEGORIES AND SALARIES OF PERSONNEL
FOREIGN SERVICE STAFF OFFICERS AND EMPLOYEES
Existing legislation Proposed legislation
SEC. 415. There shall be [twenty- SEC. 415. (a) There shall be ten
two] classes of Foreign Service staff classes of Foreign Service staff officer
officers and employees, referred to here- and employees, referred to hereafter as
after as staff officers and employees. staff officers and employees. The per
The per annum [rates of salary] of annum salaries of staff officers and
staff officers and employees within each employees within each class shall be as
class shall be as follows: follows:
[Class 1, $11,770, $12,120, $12,480, Class 1-$11,660, $11,990, $12,320,
$12 830, $13,160 $12,650, $12,980, $13,310, $13,640
[Class 2, $10,920, $11,205, $11,485, Class 2-$9.900, $10.175, $10,460,
$11,770, $12,120 $10,725, $11,000, $11,276, $11,550
$10 C885 $1 la s 3,1$65,030, $10,320, $10,600, Class 3-$8,140, $8,415, $8,690,
$8
,
965
$9
,
,
0
,
7 50
s
$2,660, $2,735, $2,805, $2,875
[Class 19, $2,240, $2,310, $2,380,
$2,455, $2,520, $2,590, $2,660
[Class 20, $2,025, $2,095, $2,165,
$2,240, $2,310, $2,380, $2,455
[Class 21, $1,810, $1,880, $1,955,
$2,025, $2,095, $2,165, $2,240
[Class 22, $1,600, $1,670, $1,745,
$1,810, $1,880, $1,955,$2,025]
No existing legislation. (b) Notwithstanding the provisions of
paragraph (a) of this section, the Secre-
tary may, under such regulations as he
may prescribe, fix the salary or compensa-
tion at lesser rates of salary than those
prescribed by this section for the applicable
class of officers or employees who are
employed locally abroad and who are not
available or are not qualified for transfer
to another post or posts.
48120-59-4
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
4, $9,095,
'
$9,380, 380
$9,945, $10,230
[Class 5, $8,395,
$8,610,
$9,030, $9,315, $9,600
[Class 6, $7,690,
$7,905,
$8,325, $8,540, $8,755
[Class 7, $6,990,
$7,200,
$7,630, $7,840, $8,050
[Class 8, $6,285,
$6,495,
$6,925, $7,140, $7,350
[Class 9, $5,585,
$5,795,
?$6,220, $6,435,
$6,650
[Class 10,
$5,115,
$5,260,
$5,540, $5,755,
$5;970,
$6,175
[Class 11,
$4,650,
$4,790,
$5,070, $5,215,
$5,355,
$5,500
[Class 12,
$4,180,
$4,320,
$4,605, $4,745,
$4,890,
$5,025
[Class 13,
$3,730,
$3,870,
$4,155, $4,295,
$4,440,
$4,580
[Class 14,
$3,300,
$3,445,
$3,730, $3,870,
$4,010,
$4,155
[Class 15,
$3,090,
$3,165,
$3,300, $3,445,
$3,585,
$3,730
[Class 16,
$2,875,
$2,950,
$3,090, $3,165,
$3,230,
$3,300
[Class 17,
$2,660,
$2,735,
$2,875, $2,950,
$3,020,
$3,090
[Class 18,
$2,455,
$2,520,
$9,665, C a 4--$7,000000, , $7, ,2226, $7,460,
s
$7,675, $7,900, $8,125, $8,360
$8,815, Class 6-$6,160, $6,350, $6,550,
$6,750, $6,950, $7,150, $7,350
$8,120, Class 6-$5,300, $5,500, $5,700;
$5,900, $6,100, $6,300, $6,500
$7,415,
$6,710,
$6,005,
$5,400, Class 7-$4,660, $4,800, $4,950,
$5,100, $5,250, $5,400, $5,550
$4,930, Class 8-$4,200, $4,350, $4,500,
$4,650, $4,800, $4,950, $5,100
$4,460, Class 9-$3,760, $3,900, $4,050,
$4,200, $4,350, $4,500, $4,650
$4,010, Class 10-$3,500, $3,600, $3,700,
$3,800, $3,900, $4,000, $4,100
$3,585,
$3,230,
$3,020,
$2,805,
$2,590,
 Approved For F glease 199%q?J s WBPP7A ;~& 00400020007-7
The principal purpose of this proposal is to improve the Foreign Service Staff
Corps salary schedule. The structure of the Foreign Service officer salary schedule
was modified in 1956 to provide basic improvements in accordance with the needs
of the Service. At that time, the personnel : ntegration program was underway
and it was not possible to clearly determine the future needs of the Foreign Service
Staff Corps. Since that time, a careful study has been made and perhaps the
most important need for improvement in the administrative machinery affecting
the Foreign Service staff corps is in connection with a revision of the present
22 class salary schedule. One of the purposes of the proposed revision is to
eliminate=the unnecessary and unused classes in the present schedule. Classes 15
through 22 have not been used for some time. Inasmuch as alien employees are
used extensively for the performance of routine duties at Foreign Service posts,
there are few cases where U.S. citizeh employees are required for the level of
duties represented by class 14, there being only two Foreign Service resident
employees in this class at the present time. Consequently, a 10-class schedule
is proposed which provides a reasonable numl er of levels in relation to the duties
and responsibilities which are carried out by f Staff Corps personnel.
This proposed schedule is specifically designed to provide a more adequate
promotion ladder for these employees, includi ig equitable and appropriate salary
adjustment when promotions to the next higher class are awarded. As a conse-
quence, a staff employee will usually receive more than, and in any case not less
than, the equivalent of a within-class step mere ase at the time of a class promotion.
This pro osed 10-class schedule has several other features:
(a) The rates of the top three Foreign Service staff classes are the same
as the rates contained in classes 3, 4, c,nd 5, respectively, of the Foreign
Service officer schedule. This provides -quitable salary treatment for per-
sonnel serving at these officer levels ar. d will facilitate the conversion of
Staff Corps personnel at these levels who may qualify in the future for lateral
entry into the Foreign Service Officer Co 'ps.
(b) It consolidates overlapping classes, eliminates overlapping at the top
levels, and improves the step-rate increment plan.
(c) It provides reasonable rates at the entrance level of new class FSS-10
(present class FSS-14), which will make this lowest class usuable for some
recruitment purposes in the future.
(d) Consolidation and readjustment c.f class and step-rate relationships,
coupled with the necessity of keeping adj istment costs to a minimum, results
in 6 of the present classes being split fo:? conversion purposes, but the con-
version to the 10-class schedule results n all staff corps employees, except
those in present classes FSS-1 and 2, being adjusted to higher class number
designations than they now hold under the present schedule. For example,
employees presently at FSS-8 will be converted to new FSS-5 and employees
at present FSS-5 will be converted to ne v FSS-3.
As a consequence of the integration program and the resulting expansion of the
Foreign Service officer category, the staff c o,tegory will become increasingly a
specialist-technical-clerical corps. Its importance to the effective functioning
of the Foreign Service, nevertheless, is not -,o be underestimated. Reasonably
rewarding career opportunities must be provi led to attract and retain competent
personnel. For some years to come the De Dartment must continue to retrain,
make effective use of, and provide reasonable incentives for those staff.. officers
who, because of age or other equally valid rea: ons, are unable to qualify for lateral
appointment as Foreign Service officers. Thi 3 group of experienced and dedicated
officers will decrease gradually as a result of rormal attrition and it can be antici-
pated that a correspondingly lesser proportion of the staff category will be required
in future years in the upper salary bracket: of the proposed staff corps salary
schedule. On the other hand, it becomes in:reasingly important that an appro-
priate career plan be provided for the necess.-ry staff officers and employees who
serve as highly skilled specialists and techn: cians essential to the operations of
the Service to encourage them to continue in the Foreign Service on a career basis.
New paragraph (b) of section 415 would authorize the Secretary, by adminis-
trative action, to prescribe lesser rates of sali ry than those stipulated in the FSS
statutory salary schedule in the case of U.S. ;itizen employees who are employed
locally in foreign areas for service at a particular post and who are not available
or who are not qualified for transfer to other posts of duty.
From time to time it is in the Department' > interest to employ in lieu of a local
(alien) employee for a local employee positi(n an American citizen at a Foreign
Service post who has resided in the locality f )r many years, who may be married
to an alien and frequently possesses dual citizenship, or who is otherwise not
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
47
qualified for a regular staff corps appointment. The purpose of this provision,
therefore, is to enable the Secretary to equate more nearly the salaries paid to
such staff personnel to rates prevailing in the locality.
SALARIES AT WHICH FOREIGN SERVICE STAFF OFFICERS AND EMPLOYEES MAY
BE APPOINTED
Existing legislation
SEC. 416. [A person appointed as a
staff officer or employee shall receive
salary at the minimum rate provided for
the class to which appointed except as
otherwise provided in accordance with
the provisions of part E of this title.]
[ADMINISTRATIVE ESTABLISHMENT OP
NEW GROUPS OF POSITIONS FOR FOR-
EIGN SERVICE STAFF OFFICERS AND
EMPLOYEES
[SEC. 442. The Secretary may, when-
ever he deems such action to be in the
interests of good administration and
warranted by the nature of the duties
and responsibilities of any group of
positions occupied or to be occupied by
staff officers and employees in compari-
son with other positions in the same
class, established by regulation for any
such group of positions a minimum
salary computed at any one of the rates
of salary above the minimum for a
given class but not in excess of the mid-
dle rate provided for that class in sec-
tion 415. Such groups of positions
shall, for the purposes of this Act, be
known as subclasses.]
Proposed legislation
SEC. 416. (a) A person appointed as a
staff officer or employee shall receive basic
salary at one of the rates of the class to
which he is appointed which the Secretary
shall, taking into account his qualifica-
tions and experience and the needs of the
Service, determine to be appropriate for
him to receive.
(b) Whenever the Secretary determines
that the needs of the Service warrant the
appointment of staff officers or employees
in a particular occupational group uni-
formly at a specific step rate above the
minimum rate of the applicable class, he
may adjust the basic salary of any staff
officer or employee in the same class and
occupational group who is receiving less
than such established uniform step rate.
Under the existing provisions of section 416, staff officers and employees must
be appointed at the minimum salary of the class to which appointment is made
(except when subclasses are established by regulations). Many staff personnel
enter the Foreign Service by transfer from another Government agency, having
already achieved within-grade salary increases in Government service in recogni-
tion of continued satisfactory service. The Department has found it necessary to
appoint such a person at the minimum salary rate of the applicable class and then
adjust his salary pursuant to the Secretary's authority under section 642 to grant
in-class promotions to staff officers and employees. It is considered desirable, if
not necessary, to provide a direct grant of legislative authority for this purpose.
Aside from the desirability of appointing staff personnel who transfer to the
Service from. other Government agencies at an appropriate within-class salary
rate, the proposed new subsection 416(a) would enable the Secretary to take into
account the qualifications and experience of prospective candidates from other
recruitment sources in fixing an appropriate entering salary. Thus, a highly
experienced secretary who has worked in private employment could be offered .a
higher starting salary than an inexperienced business school graduate, neither of
whom has had previous Government experience.
The proposed new subsection (b) would enable the Secretary to take into
account the needs of the Service in fixing appointment salaries. Thus, in an
exceedingly tight labor market, the Secretary could prescribe a within-class
salary rate as the minimum rate for a particular type of skill that was in short
supply and which required special training, such as security engineers (electronics
engineers). In the event the Secretary should make such a determination,
however, serious morale problems would arise were no adjustments made in the
salaries of employees in the same class and occupational group whose salaries
are less than the rate prescribed for new appointees. New subparagraph (h),
therefore, would also authorize the Secretary to make an adjustment of this type
under such circumstances. As this new provision would supersede the provisions
of section 442, that section should be repealed.
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
48 FOREIGN SERVICE ACT AMENDMENTS
It may be noted that authority already exists to appointment Foreign Service
officers (sec. 413) and Foreign Service reserve officers (sec. 414) above the minimum
rate of the class to which appointment is made. Hence, the proposed revision
would bring the staff category into line with these related provisions of the act.
PART D-TIME OF RECEIVING SALARY
CHIEFS OF MISSION
Existing legislation Proposed legislation
SEC. 431. (a) Under such regulations SEC. 431. (a) Under such regulations
as the Secretary may prescribe, a chief as the S~:cretary may prescribe, a chief
of mission may be entitled to receive of mission may be entitled to receive
salary from the effective date of his salary h om the effective date of his
appointment to the date marking his appointment to the date marking his
return to his place of residence at the return tc his place of residence at the
conclusion of the period of his official conclusion of the period of his official
service as chief of mission or [the termi- service Es chief of mission or upon
nation of time spent on authorized termination of his service in accordance
leave, whichever shall be later,] but with the :Irovisions of paragraph (b) of
no chief of mission snail be entitled to this sectio i, but no chief of mission shall
receive salary while absent from his be entitled to receive salary while absent
post whenever the Secretary shall find from his post whenever the Secretary
that such absence was without author- shall find ;hat such absence was without
ization or justification. If a chief of authorization or justification. If a chief
mission in one position is appointed as of mission in one position is appointed
chief of mission in another position, 4 as chief o;` mission in another position,
shall be entitled to receive the salary he shall be entitled to receive the salary
pertaining to the new position commenc- pertaining to the new position commenc-
ing on the effective date of the new ing on the effective date of the new
appointment. appointme at.
(b) The official services of a chief of (b) The official services of a chief of
mission shall not be deemed terminated mission shill not be deemed terminated
by the appointment of a successor but by the apF ointment of a successor but
shall continue until he has relinquished shall continue until he has relinquished
charge of the mission and [has rendered charge of t:Ie mission and for such addi-
s'uch additional services to the Depart- tional periol as may be determined by the
ment as the] Secretary [may require Secretary, but in no case shall such addi-
him to render in the interests. of the tional perio,l exceed fifty days, including
Government for a period not in excess time spent in transit. During such pe-
of thirty] days, exclusive of] time riod the Secretary may require him to
spent in transit. render such . erviees as he may deem neces-
sary in the i!aterests of the Government.
Section 431 has been revised to clarify the provisio i governing the termination
of the services of chiefs of mission, In its present form, this section has been
subject to a number of different interpretations and ha 3 been difficult to administer
equitably. As revised the section clearly establishes the fact that a chief of
mission's services shall-be terminated upon the date he returns to his place of
residence or in no case later than 50 days after relin4uishing his duties as chief
of mission including time spent in transit. The period of time that a chief of
mission may remain on the rolls after relinquishing his duties, up to but not
exceeding 50 days, is to be determined by the Secretary. During this period he
may be required to render such services as the Secretary may deem necessary in
the interests of the Government.
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
PART E-CLASSIFICATION
CLASSIFICATION OF POSITIONS IN TIE FOREIGN SERVICE AND IN TILE DEPARTMENT
Existing legislation Proposed legislation
SEC. 441. [Under such regulations SEC. 441. (a) Under such regulations
as he may prescribe, the Secretary shall as he. may prescribe, and in order to
classify all positions in the Service, facilitate effective management, the Secre-
including those positions at foreign tary shall classify all positions in the
posts which may be held by career Service at posts abroad, excluding positions
ministers, and shall allocate all positions to be occupied by chiefs of mission, and in
occupied or to be occupied by staff the case of those occupied by Foreign
officers or employees to classes and sub- Service o0cers, Reserve officers, and staff
classes established by sections 415 and o,er. and employees, he shall establish
442, respectively, and by alien employ- such positions in relation to the classes
ces and consular agents to such classes established by sections 412, 414, and !15,
as may be established by regulation.] 'respectively. Positions occupied by local
employees and consular agents, respec-
tively, shall be allocated to such classes as
the Secretary may establish by regulation.
(b) Under such regulations as he may
prescribe, the Secretary may, notwith-
standing the provisions of the Classifica-
tion Act of 1949, as amended (5 U.S.C.
1071, et. seq.), classify positions in or
under the Department which he designates
as Foreign Service positions to be occupied
by officers and employees of the Service,
and establish such positions in relation
to the classes established by sections 412,
414, and 415.
Section 441 of the act relating to the classification of positions has been modi-
fied in several respects. In a worldwide service it is essential that, with relatively
few exceptions, American citizen personnel, including FSS personnel, be assigned
according to the needs of the Service, with due regard to the current availability
of personnel, health problems, and many other considerations. It is desirable to
provide a uniform basis for classifying positions regardless of the category of
American personnel used in staffing positions. The present language of section
441 draws a distinction in this respect between the FSO-FSR categories on the
one hand and the FSS category on the other, which has not proved to he meaning-
ful in practice.
The second basic change is to authorize the Secretary to classify positions in
the Department in accordance with Foreign Service classification standards, title
and class designation, without regard to the Classification Act of 1949, as amended,
in those instances where he determines such positions are of such a character as
to justify their designation as Foreign Service positions. Some 1500 positions
in the Department have been designated as Foreign Service positions under the
Secretary's integration program. When a position is filled by a person other
than an officer or employee of the Foreign Service, it would continue to be classi-
fied in accordance with the provisions of the Classification Act of 1949, as amended,
and the classification of the position under the provisions of this section would be
inoperative until such position was filled by a Foreign Service officer or employee.
Based on experience it might be later determined that some of these positions
should no longer be designated as Foreign Service positions. It is also likely
that certain additional positions, including a number of now positions, may be
designated as Foreign Service positions.
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
50
Existing legislation Proposed legislation
SEC. 444. [(a) Upon the basis of the SEC. 444. The Secretary shall, in ac-
classification provided for in section 441, cordance with such regulations as he may
the Secretary shall, with the advice of prescribe, establish schedules of salaries
the Board of the Foreign Service, from for classes of positions of local (alien)
time to time prepare schedules of salaries employees of the Service; provided that
for classes of positions of alien clerks and such sched des of salaries for local em-
employees of the Service, which classes ployees s&cll be based upon prevailing
shall be established by regulation, and wage rate, and related compensation
shall allocate all such positions to the practices for corresponding types of posi-
ap ropriate classes. tions in the locality, as is consistent with.
[(b) All alien employees in an area of the public interest.
comparatively uniform wage scales and
standards of living, occupying positions
of equal responsibility, shall receive
equal pay except as there may be in-
creases provided for length of service in
accordance with uniform procedures.]
Section 444 is amended to clarify and simplify p.-ovisions for the establishment
of schedules of salaries for classes of positions for local (alien) employees of the
Service. The existing provisions have not proved feasible in the administration
of the local (alien) personnel program. Wage and salary schedules must be based
upon local prevailing wage rates and prevailing ray practices for corresponding
types of positions in the locality. They are subject to frequent changes owing to
fluctuating economic and labor market condition3. Further, the Department's
responsibility for the administration of local personnel programs of certain other
United States Government agencies operating i i foreign areas requires inter-
agency coordinative action which obviates the necessity for or the practicability
of Board of the Foreign Service clearance on such matters.
ADMINISTRATIVE ESTABLISHMENT OF HAZARDOUS DUTY PAY FOR CERTAIN CATEGORIES
OF OFFICERS AND EMPLOYEES
Existing legislation Proposed legislation
No existing legislation. Sec. 447. The Secretary may, under
such regulations as he may prescribe,
establish rates of salary differential, not
exceeding i6 per centum of basic salary,
for of~:ers or employees of the Service
while : hey are assigned for duty as
courier:;.
New section 447 of the Foreign Service Act would authorize the Secretary to
grant employees, while assigned to perform dutie 3 of a courier, a salary differential
not to exceed 15 per centum of the employee's l asic salary.
The principle of "hazardous duty pay is recogrized both in military and civilian
pay systems. Couriers perform not only an artuoustask, but a dangerous one.
They must travel constantly regardless of flight conditions, by means of a great
variety of transportation facilities, many of which do not maintain the same level
of safety requirements generally found in United States commercial air lines.
Couriers are on duty a minimum of 170 hours month and are in the air most of
the time. This should be compared with the policy of our commercial air lines
which limits flight time for flying personnel to a maximum of eighty-five hours
during any one month, with an average somewhat below that figure. Members
of the Department's courier service have sust tined serious injury in the line of
duty and over the past few years several have given their lives in the service of
their country.
A number have been injured severely in flight accidents and at least one was
injured as a result of a revolution in one of the countries through which he was
traveling. The proposed maximum differential of 15 percent of basic salary is
regarded as an appropriate amount after due consideration of the hazards and
hardship factors that are inherent in courier duty. It is the Department's plan
to pay the differential to couriers whose assignments involve significant hardship
conditions or hazards. Criteria for determini g the amount of differential, up to
15 percent of basic salary, applicable to the rious courier assignments, will be
developed by the Department.
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Releaq@Rj 9Q?q&:Aq,AAMgJW721A000JQ0020007-7
TITLE V. APPOINTMENTS AND ASSIGNMENTS
PART B-FOREIGN SERVICE OFFICERS
ADMISSION TO CLASSES 1 TO 7, INCLUSIVE
Existing legislation Proposed legislation
SEC. 517. A person who has not
served in class 8 shall not be eligible
for appointment as a Foreign Service
officer of classes 1 to 7, inclusive, unless
he has passed comprehensive mental
and physical examinations prescribed
by the Board of Examiners for the
Foreign Service to determine his fitness
and aptitude for the work of the Serv-
ice; demonstrated, his loyalty to the
Government of the United States and
his attachment to the principles of the
Constitution; and rendered at least
four years of actual service prior to
appointment in a position of responsi-
bility in the service of a Government
agency, or agencies, except that, if he
has reached the age of thirty-one years,
the requirements as to service may be
reduced to three years. [After the
date of enactment of the Foreign Serv-
ice Act amendments of 1955 and until
otherwise provided by Act of Congress,
not more than one thousand two hun-
dred and fifty persons who have not
served in class 8 may be appointed to
classes 1 to 7, inclusive; of such per-
sons, not more than one hundred and
seventy-five may be appointed who
were not employed on March 1, 1955,
in the Department, including its For-
eign Service Reserve and Foreign Serv-
ice Staff personnel, and who have not
also served in a position of responsi-
bility in the Department, or the Serv-
ice, or both, for the required period
prior to appointment as a Foreign
Service officer. Notwithstanding the
above provisions of this section, the
limitations on the maximum number
of appointments authorized herein shall
not be applicable in the case of any
person appointed or assigned by the
Secretary of State as a Foreign Service
Reserve officer and who thereafter has
served in a position of responsibility in
such capacity for the required period
prior to appointment as a Foreign
Service officer.] The Secretary shall
furnish the President with the names
of those persons who shall have passed
such examinations and are eligible for
appointment as Foreign Service officers
of classes 1 to 7, inclusive. The Secre-
tary shall, taking into consideration the
age, qualifications, and experience of
each candidate for appointment, recom-
mend the class to which he shall be
appointed in accordance with the pro-
visions of this section.
SEC. 517. A person who has not
served in class 8 shall not be eligible
for appointment as a Foreign Service
officer of classes 1 to 7, inclusive, unless
he has passed comprehensive mental
and physical examinations prescribed
by the Board of Examiners for the
Foreign Service to determine his fitness
and aptitude for the work of the Serv-
ice; demonstrated his loyalty to the
Government of the United States and
his attachment to the principles of the
Constitution; and rendered at least
four years of actual service prior to
appointment in a position of responsi-
bility in the service of a Government
agency, or agencies, except that, if he
has reached the age of thirty-one years,
the requirement as to service may be
reduced to three years. The Secretary
shall furnish the President with the
names of those persons who shall have
passed such examinations and are eli-
gible for appointment as Foreign Serv-
ice officers of classes l to 7, inclusive.
The Secretary shall, taking into con-
sideration the age, qualifications, and
experience of each candidate for ap-
pointment, recommend the class to
which he shall be appointed in accord-
ance with the provisions of this section.
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
52 FOREIGN SERVICE ACT AMENDMENTS
The proposed change in section 517 eliminates the temporary provision incor-
porated in Public Law 22 84th Congress and further amended by Public Law
828, 84th Congress which establishes, presumably for ;he duration of the lateral
entry program, a limitation on the number of persons who can be integrated into
the Foreign Service under the provisions of this section. The integration program.
has now been completed and a permanent provision for the lateral entry of officers
to classes 1 to 7, inclusive, should be restored. Any future use of this lateral
entry provision to meet the needs of the Service would be seriously handicapped
by the fact that only officers who had been on the roll3 of the Department as of
March 1, 1955, or who have served 3 years after appointment by the Secretary
of State to the Foreign Service Reserve Corps, would b.- eligible for appointment.
It is hoped, the good judgment and commonsense of these responsible for advising
the Secretary on continuing lateral entry policies can be relied upon to carry out
such policies on a sound basis.
Existing legislation Pro posed legislation
[REINSTATEMENT AND RECALL] OF
FOREIGN SERVICE OFFICERS
REAPPOINTME.PT, RECALL, OR REEMPLOY-
MENT OF FOIEIGN SERVICE OFFICERS
SEC. 520.
(b) [Whenever the Secretary shall
determine an emergency to exist, the]
Secretary may recall any retired Foreign
Service officer temporarily to active
[service].
No Existing Legislation.
SEC. 520.
(b) The SE cretary may recall any
retired Forei?;n Service officer tempo-
rarily to active duty in the Service when-
ever he shall (determine such recall is in
the public inte?est.
(c) Notwithstanding the provisions of
5 U.S.C. 62 ar d 6 U.S.C. 715a, a Foreign
Service officer 7 eretofore or hereafter retired
under the provisions of section 631 or 6?32
or a Foreign Service staff officer or em-
ployee hereafter retired under the provi-
sions of sectior. 803 shall not, by reason of
his retired status, be barred from employ-
ment in Federa 1 Government service in any
appointive position for which he is quali-
fied. An annuitant so reemployed shall
serve at the will of the appointing officer.
Section 520(b) has been changed to liberalize the conditions under which the
Secretary may recall a retired Foreign Service officer for assignment to temporary
duty. It is frequently of benefit to the Department to make such assignments to
special study groups, selection boards, the Foreign Service Institute, or to work
on specific problems in which the retired officer has expeFt knowledge, yet it cannot
be ordinarily maintained that an emergency exists. Tie proposed change would
make such assignments possible without having to prec.ict that they are required
by emergency conditions. Normally, the tour of dut:7 of an officer recalled to
active service under the provisions of this subsection would be of a limited nature.
The salary paid the officer recalled would be set at the discretion of the Secretary.
It would normally be that of the class in which the officer was serving at the time
of his retirement.
New section 520(c) provides that a participant in the Foreign Service retire-
ment and disability system retired mandatorily for age shall not be barred from
reemployment in any Government agency. New secs ion 872 provides that an
officer will receive the salary of the position in which h; is reemployed, plus such
part of his annuity as when added to his salary will equal the basic salary he was
receiving at time of retirement. Most Foreign Service officers are mandatorily
retired at age 60. Some of these possess the experience, ability, and vigor which
would make them useful to other agencies of the Government. This proposed
provision would make it possible for these officers to be reemployed when their
services are needed.
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Releas@49 9/O82i7 QIA 78721A00049Q020007-7
APPOINTMENTS AND ASSIGNMENTS TO THE RESERVE
Existing legislation Proposed legislation
SEC. 522. SEC. 522.
No Existing Legislation. (3) extend-the appointment or assign-
ment or any Reserve officers, or continue
the services of any such Reserve officer by
reappointment without regard to the pro-
visions of section 527 of this Act, for not
more than five additional years if the
Secretary deems it to be in the public
interest to continue such officer in the
Service, except that the assignment of any
Reserve officer under paragraph (2) above
may not be extended under the provisions of
this paragraph without the consent of the
head of the agency concerned.
The proposed new subsection (3) of section 522 is needed by the Department
to provide for the continuation on the rolls of certain Foreign Service Reserve
officers whose positions together with certain functions have been transferred
from ICA to the regular operations of the Department of State. Many of these
officers appointed under the special authority available to ICA, with no limitation
on the term of their service as Foreign Service Reserve officers, have now served
in excess of 5 years yet they must be continued in their same capacities for several
more years because of the program responsibilities which have been transferred
to the Department. This proposed amendment will give the Secretary authority
to extend the appointments of such officers as well as certain other Reserve
officers whose services are determined to be essential. Where extensions are
made under this provision and the officer's initial appointment was subject to the
provisions of subsection (2) of this section, extension service under the new pro-
vision will be made only with the consent of the head of the agency concerned..
This provision will also enable the Secretary of State in his discretion to extend
the tour of duty of a Reserve officer for an additional period not in excess of 5
years if such officer is performing work of a character particularly valuable to an
agency of the Government other than the Department of State and if the head of
that agency should request such an extension.
PART D-FOREIGN SERVICE STAFF OFFICERS AND EMPLOYEES
Existing legislation
SEC. 531.. [The Secretary shall ap-
point staff officers and employees under
such regulations as he may prescribe
and, as soon as practicable, in accord-
ance with the rovisions of sections 441,
442, and 443.]
Proposed legislation
SEC. 531. The Secretary may, under
such regulations as he may prescribe,
appoint staff officers and employees on
the basis of qualifications and experience.
The Secretary may make provisions for
temporary, limited, and such other type
appointments as he may deem necessary.
Ile is authorized to establish appropriate
probationary periods during which newly
appointed staff officers or employees, other
than those appointed for temporary or
limited service shall be required to serve.
The Secretary may terminate at any time,
without regard to the provisions of section
637 or the provisions of any other law,
stag' officers or employees appointed for
temporary or limited service and other
staff officers or employees who occupy
probationary status.
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approves f or Releas yR1 / ?E: Aeb Ri 8NO 721 A000400020007-7
Revisedsection 531 is designed to emphasize the principle that staff officers
and employees shall be appointed on the basis of qua.ifications, experience and
merit. The reference in the present language to sections 441, 442, and 443 has
been eliminated. It is proposed that section 442 be repealed since it is superseded
by the proposed amendment to section 416. Reference to sections 441 and 443
is unnecessary, and, in fact, is misleading in the sense that the reference could be
interpreted to require appointment to a particular posit ion rather than to a class.
The other purpose of the revised section is to make :t clear that in prescribing
regulations concerning the appointment of staff personiel the Secretary may pro-
vide for appropriate types of appointments in terms of tenure, i.e., temporary,
limited, and permanent type appointments and, in ad iition, to make clear that
the Secretary may establish a probationary period of appropriate length and sepa-
rate a newly appointed staff officer or employee who mails to meet probationary
requirements without regard to the normal separation for cause procedures estab-
lished by the proposed new section 637. In view of the importance of the particu-
lar personnel policies based on this section the language of the section is being
clarified and made more specific.
Existing legislation
SEC. 532. [The Secretary may, in
accordance with uniform procedures
established in such regulations as he
may prescribe, assign a staff officer
or employee to a position at any post
and transfer such a person from a posi-
tion in one class to a vacant position
within the same class, and from one
post to another. Upon demonstration
of ability to assume duties of greater
responsibility, such person may, as
provided in section 641, he promoted to
a vacant position in a higher class at
Prc posed legislation
SEG. 532. Jnder such regulations as
he may prescribe, the Secretary may assign
a staff officer or employee to any post or
he may assig7: him to serve in any posi-
tion in which he is eligible to serve under
the terms of his or any other Act. A
staff officer or ,mployee may be transferred
from one pose to another by order of the
Secretary as She interests of the Service
may require.
the same or at a higher rate of salary
and he may be transferred from one
post to another in connection with such
promotion.]
The revision of section 532 has been made for the purpose of simplifying the
language of the section to correspond more closely to the comparable provisions
for Foreign Service officers and to reflect more clearly the intent of the revised
section 441 relating to the classification of positions. The language of section
532 relating to promotion has been deleted, inasmuch as section 641 covers the
promotion of staff officers and employees to a higher class.
PART H-ASSIGNMENT OF FOREIGN SERV [CE PERSONNEL
Existing legislation
SEC. 571. (a) Any officer or employee
of the Service may, in the discretion of
the Secretary, be assigned or detailed
for duty in any Government agency,
such an assignment or combination of
assignments to be for a period of not
more than four years, except that under
special circumstances the Secretary
may extend this four-year period for
not more than four additional years.
COVERNMENR AGENCY
Pi oposed legislation
SEC. 571. ;a) Any officer or employee
of the Service may, in the discretion
of the Secretary, be assigned or detailed,
for duty in any Government agency,
or in any international organization,
international commission, or any inter-
national body, such an assignment or
combination of assignments to be for a
period of nit more than four years,
except that inder special circumstances
the Secretary may extend this four-
year period for not more than four
additional years.
[(b) A Foreign Service officer may
be appointed as Director General, not-
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
FOREIGN SERVICE ACT AMENDMENTS 55
Existing legislation
withstanding the provisions of the last
sentence of paragraph (a) of this sec-
tion, but any such officer may not
serve longer than four years in such
position or positions and upon the
completion of such service may not
again be assigned to a position in the
Department until the expiration of a
period of time equal to his tour of duty
as Director General or until the expira-
tion of two years, whichever is shorter.]
[(c)] If a Foreign Service officer
shall be appointed by the President,
by and with the advice and consent of
the Senate, to a position in [the De-
partment,] the period of his service in
such capacity shall be construed as
constituting an assignment [for duty
in the Department] within the meaning
of paragraph (a) of this section and
such person shall not, by virtue of the
acceptance of such an assignment, lose
his status as a Foreign Service officer.
Service in such a position shall not,
however, be subject to the limitations
concerning the duration of an assign-
ment [or concerning reassignment] con-
tained in that paragraph.
[(d)] If the basic minimum salary
of the position to which an officer or
employee of the Service is assigned pur-
suant to the terms of this section is
higher than the salary such officer or
employee is entitled to receive as an
officer or employee of the Service, such
officer or employee shall, during the
period such difference in salary exists,
receive the salary of the position in
which he is serving in lieu of his salary
as an officer or employee of the Service, antes as an officer or employee of the
Any salary paid under the provisions Service. Any salary paid under the
priations made available for the pay-
ment of salaries of officers and em-
ployees of the Service and shall be the
salary on the basis of which computa-
tions and payments shall be made in
accordance with the provisions of title
VIII.
[(e)] The salary of an officer or em-
ployee assigned pursuant to the terms of
this section shall be paid from appro-
priations made available for the pay-
ment of salaries of officers and employees
of the Service. Such appropriations
may be reimbursed, however, when the
(b) If a Foreign Service officer shall
be appointed by the President, by and
with the advice and consent of the
Senate, or by the President alone to a
position in any Government agency, any
United States delegation or mission to
any international organization, inter-
national commission, or any international
body, the period of his service in such
capacity shall be construed as con-
stituting an assignment within the
meaning of paragraph (a) of this section
and such person shall not, by virtue of
the acceptance of such an assignment,
lose his status as a Foreign Service
officer. Service in such a position shall
not, however, be subject to the limita-
tions concerning the duration of an
assignment contained in that paragraph.
(c) If the basic minimum salary of the
position to which an officer or employee
of the Service is assigned pursuant to the
terms of this section is higher than the
salary such officer or employee is en-
titled to receive as an officer or employee
of the Service, such officer or employee
shall, during the period such difference
in salary exists, receive the salary and
allowances of the position in which he
is serving in lieu of his salary and allow-
the payment of salaries of officers and
employees of the Service and shall be
the salary on the basis of which compu-
tations and payments shall be made in
accordance with the provisions of title
VIII. No officer or employee of the
Service who, subsequent to the effective
date of this Act is assigned to, or who after
June 30, 1960, occupies a position in the
Department that is designated as a For-
eign Service position shall be entitled to
receive a salary differential under the
provisions of this paragraph.
(d) The salary of an officer or em-
ployee assigned pursuant to the terms
of this section shall be paid from appro-
priations made available for the pay-
ment of salaries of officers and em-
ployees of the Service. Such appro-
priations may be reimbursed, however,
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved for ReleasepdSWO&2 c~C - 74A;721A000400020007-7
Existing legislation
Secretary enters into reimbursement
agreements [with heads of Government
agencies] for all or any part of the
salaries of officers or employees assigned
to such agencies and payment is re-
ceived pursuant thereto, or when an
officer or employee of the Service is
assigned to a position the salary of
which is payable from other funds
available to the Department.
[ASSIGNMENTS TO INTERNATIONAL
ORGANIZATIONS
[SEC. 576. The Secretary may, in his
discretion, assign or detail an officer or
employee of the Service for temporary
service to or in cooperation with an
international organization in which the
United States participates under the
same conditions as those governing the
assignment or detail of officers or em-
ployees of the Service to the government
of another country in accordance with
the provisions of the Act of May 25,
1938, as amended (52 Stat. 442; 53 Stat.
652; 5 U.S.C. 118e).]
Proposed legislation
when the Secretary enters into reim-
bursement agreements for all or any
part of the salaries of officers or em-
ployees assigned to such agencies and
payment is received pursuant thereto,
or when an officer or employee of the
Service is assigned to a position the
salary of wl ich is payable from other
funds available to the Department.
Section 571(a) has been revised to clearly establish s uthority for the Secretary
to assign or detail in his discretion, officers or employees of the Service to any
official delegation or mission, to any international organization, international
commission or international body as well as-to any Government agency.
Paragraph (b) which originally related to authority tc appoint a f Service
officer as Director General without regard to the limitations of paragraph (a)
relating to period of assignment to duty in the Depari ment is no longer needed
as amendments to section 571(a), Public Law 22, 84th C ingress, provide authority
for the Secretary to extend, under special circumstances, a 4-year period of duty
for a period of an additional 4 years. Paragraph (b) i3, therefore, being deleted
as no longer needed.
Paragraph (c) has been redesignated as paragraph (b: and has been changed to
provide authority for the appointment by the President, by and with the advice
and consent of the Senate, or by the President alone (e.g. International Boundary
Commissions), of a Foreign Service officer to a position i:I any Government agency
including any U.S. delegation or mission to international organizations, inter-
national commissions, or other international bodies Without the requirement that
the appointee shall lose his status as a Foreign Service officer. Existing section
571(b) now provides such authority for appointment oi' an FSO to a position in
the Department but does not provide for his appointment elsewhere in Govern-
ment. The recent appointment of a Foreign Service officer of career minister
rank to head the USIA has emphasized the need for this broader authority.
By changing references to "the Department" to "any Government agency" the
subsection is being brought into conformity with sectic n 571 (a) as amended by
Public Law 22. The reference to "or concerning reassignment" has been elimi-
nated as no longer necessary.
Paragraph (d) has been designated as paragraph (c). This section of the act
provides that in the event an officer or employee of tie Service is assigned or
detailed to duty with any Government agency (inclu ling the Department of
State), he shall receive the difference, if any, between ]us salary as an officer or
employee of the Service and the basic minimum salary of the position to which
he is assigned. This provision was included in the Foreign Service Act of 1946
to offset in part the loss of allowances that result when the officer or employee is
assigned from a post abroad to a position with a Governnent agency in the United
States. It was designed to recognize the principle of equal pay for equal work
from the standpoint that an officer or employee of tie Foreign Service when
assigned to a position in a Government agency in the United States to work in
conjunction with civil service officers, would receive at least the minimum rate
1
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release '~ 99/08/27 : CIA-RDP78-03721A000400020007-7
O IGN SERVICE ACT AMENDMENTS
57
for the position to which he is assigned as determined by the classified grade of the
position under civil service classification procedures.
Subsequent to the enactment of the Foreign Service Act of 1946, provision has
been made for a home service transfer allowance for Foreign Service personnel
incident to an assignment to the United States between foreign post assignments.
Moreover, as a consequence of the Secretary's integration program, the Foreign
Service will be used increasingly to staff departmental positions. A "Washing-
ton" assignment at periodic intervals is, in effect, and increasingly will become,
a normal assignment. This change in assignment practices when taken in con-
text with the proposed revision of section 441 permitting the Secretary to classify
departmental positions that, are occupied by Foreign Service officers under Foreign
Service rather than civil service classification standards, suggests that there is
no longer justification for this so-called "Washington" salary differential for
oleers of the Service assigned to positions in the Department. Section 571(c)
will therefore exclude Foreign Service officers so assigned from:"Washington"
differential provisions. The provisions of this section will not, however, prevent
officers or employees of the Service assigned to other Government agencies or to
official delegations or missions to international organizations, international com-
missions, or other international bodies
from receivin
a
l
diff
,
g
sa
ary
erential if the
basic salary rate of the position to which they are assigned exceeds the salary
appropriate to their personal rank.
Paragraph (e) of this section has been r'?designated as paragraph (d). The
phrase "with heads of Government agencies" has been deleted because reimburse-
ment agreements may be made with officials other than heads of agencies when
officers or employees are assigned to international organizations, international
commissions, or international bodies.
Since-the provisions of section 576 have been superseded by revised section 571,
it is proposed that section 576 be deleted.
TITLE VI. PERSONNEL ADMINISTRATION
IN-CLASS PROMOTIONS OF FOREIGN SERVICE OFFICERS AND RESERVE OFFICERS
Existing legislation
er a
onal increases in
tional increases in salary within the salary within the salary range estab-
salary range established for the class lished for the class in which he is
in which he is serving; based upon serving, based upon especially +ieri-
,especially meritorious service. torious service.
Section 625 has been revised in order to reaffirm the Secretary's authority to
grant additional inclass increments in recognition of especially meritorious service
(in the light of the Fringe Benefits Act). While cash awards provided for by
the Fringe Benefits Act may in general serve well in providing rewards for espe-
cially meritorious or superior service, they are not as appropriate as inclass
increase awards for officers of the Foreign Service. Frequently the needs of the
Service r
e
u
ffi
period of nine months or more, shall, on
the first day of each fiscal year, receive
_..rr. an increase in salary to the next higher
rate for the class in which his is serving.
[the] Secretary is authorized to grant
to [a Foreign Service officer or a
Reserve officer, in any class 'I addi-
SEC. 625. Any Foreign Service officer
or any Reserve officer, whose services
meet the standards required for the
efficient conduct of the work of the
[Foreign] Service and who shall have
been in a given class for a continuous
q
ue an o
cer to serve for protracted periods of time in positions
classified several levels above their personal rank. In many such cases officers
have distinguished themselves in the performance of their duties and it is con-
sidered that an inclass promotion is more desirable and acceptable under these
circumstances than a cash award would be. Further, there are a number of
unusual and difficult foreign languages which owing to their uniqueness are not
offered on a formal training basis; however, officers frequently upon their own
initiative undertake the study of and become proficient in such languages. It is
considered that the award of a.meritorious inclass increase for such an accomplish-
ment better serves the interests of the Government because it provides a contin-
uing and more desirable incentive for the undertaking of such voluntary and
specialized study by members of the Foreign Service.
Proposed legislation
SEC. 625. Any Foreign Service officer
or any Reserve officer, whose services
meet the standards required for the
efficient conduct of the work of the
Service and who shall have been in a
given class for a continuous period of
nine months or more, shall, on the first
day of each fiscal year, receive an in-
crease in salary to the next higher rate
for the class in which he is serving.
Without regard to any other law the
Secretary is authorized to grant to any
such ofc
dditi
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release 1999/08/27 : C) PP 3721A000400020007-7
co inur,IIIIc SERVICE A
PART D-SEPARATION OF [FOREIGN SERVICE OFFICERS] OFFICERS AND
EMPLOYEES FROM THE SERVIC];
FOREIGN SERVICE OFFICERS WHO ARE CAREER MINISTERS
Existing legislation
SEC. 631. Any Foreign Service officer
who is a career ambassador or a career
minister, other than one occupying a
position as chief of mission, shall, upon
reaching the age of sixty-five, be retired
from the Service and receive retirement
benefits in accordance with the provi-
sions of section 821, but whenever the
Secretary shall determine [an emer-
gency to exist, he may,] in the public
interest, extend such an officer's service
for a period not to exceed five years.
Proposed legislation
SEC. 631. A iy Foreign Service officer'
who is a career ambassador or a career,
minister, other than one occupying a
position as chief of mission or any other
position to which he has been appointed
by the Preside it, by and with the advice
and consent o' the Senate, shall, upon
reaching the a;e of sixty-five, be retired
from the Sere cc and receive retirement
benefits in accordance with the provi-
sions of secticn 821, but whenever the
Secretary shall determine it to be in the
public interes~, he may extend such an
officer's service for a period not to exceed
five years.
Section 631 changes the conditions under which the Secretary may extend the
services of career ambassadors or career ministers beyond mandatory retirement
age. It is further changed to provide that a career ambassador or career minister-
serving in any other position to which he has been appointed by the President, by
and with the advice and consent of the Senate, e.g., Deputy Under Secretary,-
Assistant Secretary, etc., shall continue to hold such )ositions until the expira-
tion of his appointment. The Department's experience has proved that it is as
essential to avoid interruption to the continuity of the service of Foreign Service
officers serving in Presidential appointments as it is In avoid such interruption
to the service of chiefs of mission. It is not contemplated that a career ambassador-
or career minister who is a Presidential appointee serving in a capacity other than
chief of mission will have his services extended beyond the time he occupies the
specific position in which he is serving when he reaches mandatory retirement age.
Normally, the officer would be mandatorily retired at the end of such appointment..
Occasionally because of the specialized nature of the assignments of career
ambassadors or career ministers who are not serving as chiefs of mission or in,
Presidential appointments and because of their unique knowledge or experience, it
is in the interest of the Service to have them continue c n duty for a limited period
after they reach mandatory retirement age. Under present provisions, in order
to make such an extension of an officer's service the Secretary must determine
"an emergency to exist." This phrase has been found to be subject to different
interpretations and to make it difficult for the Department to carry out the
intent of this provision when the public interest can best be served by a brief
delay in the retirement of certain officers. This provision will be used only
in exceptional circumstances when it is clear that the oontinuation of the services
of the officer will be in the public interest.
FOREIGN SERVICE OFFICERS WHO
Existing legislation
SEC. 632. Any Foreign Service officer
who is- not a career ambassador or a
career minister shall, upon reaching the
age of sixty, be retired from. the Service
and receive retirement benefits in
accordance with the provisions of sec-
tion 821 but [when] the Secretary shall
determine [an emergency to exist, he
may,] in the public interest, extend such
an officer's service for a period not to
exceed five years.
ARE NOT CAREER MINISTERS
Pm oposed legislation
632. Any Foreign Service officer,.
SEC
.
other than one occupying a position as
chief of mission or any other position to
which he has been appointed by the Presi-
dent, by and with the advice and consent
of the Senate-, who is not a career am-
bassador or a career minister shall, upon
reaching the age of sixty, be retired from
the Service ,,nd receive retirement bene-
fits in accordance with the provisions of
section 821 but whenever the Secretary
shall determine it to be in the public
interest, he nay extend such an officer's
service for L period not to exceed five
years.
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Releasglll 9tq? :Aq F pj&R3721A000?90020007-7
Section 632 is changed for the same reasons given under section 631. Provision
would be made for extending briefly beyond mandatory retirement the services of
a very limited number of Foreign Service officers below rank of career minister
when it is clear that the continuation of the services of an officer would be in the
public interest. Under present provisions, in order to make such an extension of
an officer's service the Secretary must determine "an emergency to exist." This
phrase has been found to be subject to different interpretations and to make it
difficult for the Department to carry out the intent of this provision when the
public interest can best be served by a brief delay in the retirement of certain
officers. This provision will be used only in exceptional circumstances when it is
clear that the continuation of the services of the officer will be in the public interest.
Existing legislation Proposed legislation
SEPARATION FOR [UNSATISFACTORY
PERFORMANCE OF DUTY]
Existing legislation
SEC. 637. (a) The Secretary may,
under such regulations as he may pro-
scribe, separate from the Service any
Foreign Service officer [above class 8]
on account of the unsatisfactory per-
formance of his duties[;] but no such
officer shall be so separated [from the
Service] until he shall have been
granted a hearing by the Board of the
Foreign Service and the unsatisfactory
performance of his duties shall have
been established at such hearing[.]
[PART F-SEPARATION OF STAFF
OFFICERS AND EMPLOYEES
[FOR UNSATISFACTORY PERFORMANCE
OF DUTY
Proposed legislation
SEC. 637. (a) The Secretary may,
under such regulations as he may pre-
scribe, separate from the Service any
Foreign Service officer, Reserve officer, or
staff officer or employee, on account of
the unsatisfactory performance of his
duties, or for such other cause as will
promote the efficiency of the Service, and
for reasons given in writing, but no such
officer or employee shall be so separated
until he shall have been granted a
hearing by the Board of the Foreign
Service and the unsatisfactory per-
formance of his duties, or other cause
for separation, shall have been estab-
lished at such hearing, or else he shall
have waived in writing his right to a
hearing. The provisions of this section.
shall not apply to Foreign ervice officers
of class 8 or any other officer or employee
of the Service who is in a probationary
status or whose appointment is limited or
temporary.
[SEC. 651. The Secretary may, under
such regulations as he may prescribe,
separate from the Service any staff
officer or employee on account of the
unsatisfactory performance of his duties,
but no such officer or employee shall be
so separated from the Service until he
shall have been granted a hearing by
the Board of the Foreign Service and
the unsatisfactory performance of his
duties shall have been established at
such hearing.]
[SEPARATION FOR MISCONDUCT OR MAL-
FLASANCE
[SEC. 638. The Secretary shall sepa-
rate from the Service any Foreign
Service officer or Reserve officer who
shall be guilty of misconduct or mal-
feasance in office, but no such officer
shall be so separated from the Service
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
60 FOREIGN SERVICE ACT AMENDMENTS
Drvisting legislation
until he shall have been granted a
hearing by the Board of the Foreign
Service and his misconduct or mal-
feasance shall have been established at
such hearing. Any officer separated
from the Service in accordance with the
provisions of this section shall not be
eligible to receive the benefits provided
by title VIII of this Act, but his con-
tributions to the Foreign Service Re-
tirement and Disability Fund shall be
returned to him in accordance with the
provisions of section 841(a).]
[FOR MISCONDUCT OR MALFEASANCE
[SEc. 652. The Secretary shall sepa-
rate from the Service any staff officer or
employee who shall be guilty of miscon-
duct or malfeasance in office, but no
such officer or employee shall be so sep-
arated from the Service until he shall
have been granted a hearing by the
Board of the Foreign Service and his
misconduct or malfesance shall have
been established at such hearing.]
SEC. 637. (b) Any [Foreign Service
officer] over forty-five years of age, sep-
arated from the Service [in accordance
with the provisions of paragraph (a) of
this section,] shall be retired upon an
.annuity computed in accordance with
the provisions of section 821 but not in
excess of 25 per centum of his per an-
num salary at the time of his separa-
tion[.]
[(c) Any Foreign Service officer]
under forty-five years of age, separated
from the Service [in accordance with
the provisions of paragraph (a) of this
section,] shall at the time of separation
receive a payment equal to one year's
salary or the refund of the contributions
made by him to the Foreign Service Re-
tirement and Disability Fund, which-
ever shall be greater.
Prrposed legislation
SEC. 637. (b) Any participant in the
Foreign Service Retirement and Disa-
bility system who is-
(1) over forty-five years of age, sep-
arated frcarn the Service for unsatis-
factory pe, formance of duty shall be re-
tired upo:i an annuity computed in
accordanc,- with the provisions of sec-
tion 821 but not in excess of 25 per
centum of his per annum salary at the
time of hi 3 separation; .
(2) unc.er forty-five years of age,
separated from the Service for un-
satisfactor I performance of duty shall
at the time of separation receive a
payment equal to one year's salary or
the refund, as provided in section 841
(a), of t'ie contributions made by
him to tie Foreign Service Retire-
ment and Disability Fund, which-
ever shall he greater.
(c) Any participant in the Foreign
Service Reti7 ement and Disability system
separated under the provisions of para-
graph (a) of this section, for reasons other
than unsatisfactory performance of duty,
may, in the discretion of the Secretary and
on the basis of criteria established in ad-
vance by hi;n, be granted the benefits of
paragraph (b) of this section depending
upon his age. Unless the Secretary de-
termines at the time of separation of a
participant 'tinder the provisions of para-
graph (a) of this section that he shall be
granted the benefits of paragraph (b) of
this section his contributions to the For-
eign Service Retirement and Disability
Fund shall ire returned to him in accord-
ance with the provisions of section 841 (a).
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Rele p gL9WA7ACCIA-RDIPE 8 03721A00000020007-7
Existing legislation Proposed legislation
(d) Any officer or employee of the Serv-
ice who is not a participant in the Foreign
Service Retirement and Disability system
shall be entitled only to such benefits as
shall accrue to him under the retirement
sz stem in which h ' t'
OFFICERS AND EMPLOYEES UNDER LIMITED APPOINTMENT
Existing legislation Proposed legislation
No existing legislation SEC. 638. Notwithstanding the provi-
sions of this or any other law, the Secre-
tary may, under such regulations as he
may prescribe, terminate the services of
any Reserve officer or staff officer or em-
ployee serving under limited appointment
at any time.
rges causing
separation.
New paragraph (d) has been added to deny nonparticipants in the Foreign
Service Retirement and Disability system the benefits of "severance pay" in the
form of a year's salary in lieu of a refund of retirement deductions as is provided
in paragraph (b) for participants. A participant in another retirement system
over which the Department will have no control could be entitled to a refund of
his contributions to that system or to deferred annuity and thus could receive
greater benefits than participants in the Foreign Service Retirement and Disability
system who are separated for cause.
Existing paragraph (d) has been renumbered paragraph (e).
TERMINATION OF APPOINTMENT OF FOREIGN SERVICE RESERVE OFFICERS AND STAFF
[(d) ] Any CO a par acapant,
y payments made in accord- (e) Any payments made in accord-
ance with the provisions of this section ante with the provisions of paragraphs
shall be made out of the Foreign Service (b) or (c) of this section shall be made out
Retirement and Disability Fund. of the Foreign Service Retirement and
Disability Fund.
New section 637(a) combines into one section the provisions of section 637 and
651 relative to separation for unsatisfactory performance of duty as well as the
provisions of sections 638 and 652 relative to separation for misconduct and
malfeasance. In so doing the following substantive changes have been made:
(1) The Secretary is given the discretion to determine whether an officer
or employee should be separated for cause. At present he does not have
complete discretion in this matter. Under present provisions it is frequently
difficult if not impossible to distinguish between unsatisfactory performance
and misconduct. Gravity of a proven case may or may not warrant less
stringent forms of discipline than outright dismissals.
(2) The requirement of a hearing does not apply if the officer or employee
waives his right to a hearing.
(3) It may be noted that the revised section applies equally to all Foreign
Service officers, Foreign Service Reserve officers, and Foreign Service staff
officers and employees.
Foreign Service officers who are in probationary status and any other officers
and employees of the Service whose appointments are temporary or limited are not
subject to the provisions of this section as their services may be terminated at
any time at the discretion of the Secretary.
Paragraph (b) has been revised to provide retirement benefits specifically for
participants in the Foreign Service Retirement and Disability system who are
over 45 years of age at time of separation for unsatisfactory performance of duty.
This paragraph further provides that participants in the Foreign Service Retire-
ment and Disability system who are under 45 years of age at time of separation for
unsatisfactory performance of duty shall receive a payment of 1 year's salary or
the refund of contributions made to the Foreign Service Retirement and Dis-
ability Fund, whichever is greater.
Paragraph (c) gives the Secretary authority to determine that the benefits of
paragraph (b) may apply to officers and employees separated for cause if in his
discretion such action is justified in the light of the nature of the cha
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved F69r Release) l- LC F r,TL-7521 A000400020007-7
The Foreign Service Act of 1046, as amended, does not specifically provide the
Secretary with clear-cut authority for the separations, when their services are no
longer needed, of Foreign Service Reserve officers, whose appointments, by their
designation, are recognized as being temporary or limited in nature. Further,
the Foreign Service Act of 1946, as amended, does nc.t provide clear-cut authority
for the Secretary to terminate staff officers or employees who are serving under
limited appointments. This amendment is design-d to provide statutory au-
thority for the termination of such employees at the end of the specified period
of employment, upon expiration of the special program for which the employee
was appointed, or when the need no longer exists foi the employee's services.
This flexibility is needed in order to staff new programs with personnel who
are willing to accept such assignments and in order to be able to terminate their
services with the minimum of disruption.
. PART E-PROMOTION OF FOREIGN SERVICE STAFF OFFICERS AND EMPLOYEES
CLASS PROMOTION OF STAFF PERSONNEL
Existing legislation ~'roposed legislation
SEC. 641. [Any staff officer or em- SEC. 641. All promotions of staff
ployee may, in accordance with uniform officers anc. employees to a higher class
procedures established in regulations shall be mc-de at the same or at a higher
prescribed by the Secretary, upon salary on he basis of performance and
demonstration of ability to assume merit in ac-ordance with such regulations
duties of greater responsibility, be pro- as the Secretary may prescribe.
muted to a vacant position in a higher
class at' the same or at a higher rate
of salary.]
Sec)ion'641 is amended to emphasize the fact that all promotions of staff
6ffi,4@rs and employees to a higher class shall be on - competitive basis in relation
'to performance, qualifications, and merit and to p?ovide language that is more
nearly consistent with the intent of section 441 relating to the classification of
positions. As indicated in the explanation of the proposed Foreign Service salary
schedule under section 415, staff personnel upon promotion to a higher class
would receive a tangible increase in salary.
IN-CLASS PROMOTIONS OF STAFF OFFICEIS AND EMPLOYEES
Existing legislation Proposed legislation
SEC. 642. [In-class promotions of SEC. 642. (a) Under such regulations
staff officers and employees shall be as the Sec.?etary may prescribe, any staff
granted in accordance with regulations officer or e nployee whose services meet the
prescribed by the Secretary.] standards equired for the efficient conduct
of the wori; of the Service shall receive an
increase ir; salary at periodic intervals to
the next higher salary rate for the class in
which he is serving. Without regard to
any other law the Secretary is authorized
to grant a? ;y such officer or employee addi-
tional increases in salary within the
salary raisge established for the class in
which he is serving, based upon especially
meritorious service.
No existing legislation. (b) Under such regulations as the Secre-
tary may ;?rescribe, any staff officer or em-
ployee wl o has achieved the maximum
salary rats prescribed by section 415 for
the class -n which he is serving may be
granted ass additional in-class salary in-
crement f2 om time to time in recognition
of longevity and proficiency in the Service.
Each sucl salary increment shall be equal
to the maa imum step rate increment of the
applicable class and no person shall re-
ceive morn than four such salary incre-
ments while serving in the same class.
Aft
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release l%~9(9,JWIUFI1-RMN7 9 ,7s21A00040%920007-7
Paragraph (a) of section 642 has been revised to clarify the present provisions
for periodic in-class promotions for Foreign Service staff personnel. In addition
it provides the Secretary with the same authority to provide for staff personne'.
The principal purpose of new section 642(b) is to authorize the Secretary to
establish a system of longevity pay increases for staff personnel. The principle
and the practice of longevity pay is well established in government and in industry.
Although the work performed by staff corps personnel is highly essential and
important to the effective functioning of the Service, in the majority of the cases
the nature of the duties and the qualifications required therefor impose auto-
matic limitations on promotional opportunities in the staff corps. In addition,
as a consequence of the Secretary's integration program, promotional oppor-
tunities in the staff corps cannot be as attractive as formerly; however, most
staff personnel performing in Foreign Service officer positions who qualified for
lateral entry were integrated into the Foreign Service officer corps. Longevity
pay is not pertinent in the case of Reserve officers whose tenure is limited to a
period of five years, and it is not consistent with the promotion and selection-out
provisions applicable to Foreign Service officers. In the case of Foreign Service
staff corps personnel a longevity pay system will meet a definite need in providing
an incentive for qualified and experienced employees to continue in the Service
throughout their working careers, thus providing these highly essential skills for
the Service with a minimum of turnover and cost.
The proposed revision would authorize the Secretary to grant a longevity
salary increment from time to time on the basis of significant longevity landmarks
in terms of the total years of United States Government service rendered by an
employee, provided his record of performance is sufficiently superior to merit
the award of such increment. In other words, it is not intended that longevity
increments would be awarded automatically on the basis of satisfactory service,
as in the case of the regular within-class increases but rather the purpose of the
plan is to recognize longevity in combination with proficiency in order to provide
a stimulus for long-service employees who remain in the same class to continue to
excel in the performance of their duties as well as to continue in the Service.
It is contemplated that the Secretary will establish by regulation the eligibility
periods for longevity increments under this plan. In all probability these eligibil-
ity periods would be established as a minimum of 10 years of service for the first
such increase, 15 years for the second, 20 years for the third, and 25 years for
the fourth. Achievement of such longevity increases will have a continuing
prestige value as they will signify the years of service as well as the fact that
the employee has continued to perform his duties in a highly satisfactory manner.
After experience with this plan it may be determined that different years of
service landmarks might be desirable; e.g., 12 years' minimum service in lieu
of 10, etc.
Further, provision will be made that employees who have already served 15,
20, or 25 years of service at the time they achieve the maximum step rate of
a given class will be eligible for consecutive longevity increases on an annual
(or possibly biennial) basis until they reach the longevity increase appropriate
for or related to the number of years of service they have completed, provided
they have continued their proficiency in the performance of their duties. In this
way, some employees with many years of service already completed and who
have been paid at the maximum step rate of their present class for a year or more
would, at the time of the enactment of this provision, become immediately eligible
for a longevity increase and might continue to be so eligible for subsequent lon-
gevity promotions on an annual (or biennial) basis; e.g., an employee who has
been at the maximum step rate of his class for a year and has completed 20
years of Government service could receive three longevities on an annual basis
(provided his proficiency in the performance of his duties continues) until he
reached the 20-year longevity rate, at which time he would begin a 5-year waiting
period for the last one.
in-class increases as a reward for meritorious service as that contained in section,
625 relating to such meritorious in-class promotions for Foreign Service officers
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approve For Relea o E 99JE08i?7 Ac91M 7
PT93721A000400020007-7
TITLE VII. THE FOREIGN SERVICE INSTITUTE
ESTABLISHMENT OF THE INSTITUTE
Existing legislation Proposed legislation
SEC. 701. The Secretary shall, in SEC. 701. Th. Secretary shall, in
order to furnish training and instruction order to furnish training and instruction
to officers and employees of the Service to officers and Employees of the Service
and of the Department and to other and of the Department and to other
officers and employees of the Govern- officers and employees of the Govern-
ment for whom training and instruction ment for whom training and instruction
in the field of foreign relations is neces- in the field of foreign relations is neces-
sary, and in order to promote and foster sary, and in order to promote and foster
programs of study incidental to such programs of study incidental to such
training, establish a Foreign Service training, establish a Foreign Service In-
Institute, hereinafter called the In- stitute, hereinafter called the Institute.
stitute. The Secretary may also provide appro-
priate orientation and language training
to dependents of officers and employees of
the Government if such officers and em-
ployees are assigned to foreign relations
activities.
The proposed addition to section 701 will give the Secretary specific authority
to provide orientation and language training to depend ants of officers and em-
ployees of the Government who are to serve in foreign relations activities abroad.
APPOINTMENT, ASSIGNMENT, AND DETAIL TO T SE INSTITUTE
Existing legislation Proposed legislation
SEc. 704. SEC. 704.
No existing legislation. (e) The Secretary may, under such
regulations as 'Ie may prescribe, in the
absence of suitably qualified United
States citizens, employ persons who are
not citizens of the United States by ap-
pointment to tl.e staff of the Institute
either on a full- or part-time basis or by
contract for services in the United States
or abroad at ra, es not in excess of those
provided by the Classification Act of
1949, as amenaed (5 TJ.S.C. 1071).
A new paragraph (e) has been added to section 704. This will provide the
Secretary with authority either to employ on the staf' of the Institute or to
contract for the services of aliens for use in language and area training programs.
The primary goal of the language and area programs is to have the student
achieve a comprehensive speaking and reading proficien~,y of a language as well
as an area knowledge of a country. Frequently the persons best qualified to
provide such instruction are recent emigres who have not had an opportunity to
acquire American citizenship. Such persons may teach in universities to which
Foreign Service personnel might be assigned, but their employment on the staff
of the Institute has not heretofore been authorized. This authority will enable
the Department to strengthen its language and area training programs in the
Foreign Service Institute.
Both full-time and part-time language and area ins-,ructors and tutors will
normally be appointed to the staff of the Institute whey. they are to be used on
continuing programs. Authority to employ by contract is considered essential,
however, since in many cases persons used in these programs are available in the
United States for only short periods of time. In many instances because of the
varying requirements of the Institute short term instru-Mors can adequately fill
the needs for specialized language and area training. To zvoid excessive turnover
in the staff of the Institute, and to meet unforeseen changes or modifications in
programs, the flexibility provided by a contract provision, vill bring about economy
in the operation of the Institute's programs.
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Releaspj,"/Z q*A7A721A0004@9020007-7
TITLE VIII. THE FOREIGN SERVICE RETIREMENT; AND
DISABILITY SYSTEM
PART A-ESTABLISHMENT OF SYSTEM
Existing legislation
SEc. 803. (b)
(2) have paid into the Fund a special
contribution [equal to 5 per centum of
his basic salary for each year of such
service with interest thereon to date of
payment, compounded annually at 4
per centum.]
No Existing Legislation.
Proposed legislation
SEc. 803. (b)
(2) have paid into the Fund a special
contribution for each year of such service
in accordance with the provisions of para-
graph (b) of section 862.
(c) (1) In accordance with such regula-
tions as the President may prescribe, any
Foreign Service staff officer or employee
appointed by the Secretary of State who
has completed at least 10 years of con-
tinuous service in the Department's For-
eign Service, exclusive of military service,
shall become a participant in the Foreign
Service Retirement and Disability system
and shall make a special contribution to
the Foreign Service Retirement and Dis-
ability Fund in accordance with the pro-
visions of section 862.
(2) Any such officer or employee who,
under the provisions of paragraph (c) (1)
of this section, becomes a participant in
the Foreign Service Retirement and Dis-
ability system, shall be mandatorily re-
tired for age during the first year after the
effective date of this section if he attains
age sixty-four or if he is over age sixty-
four; during the second year at age sixty-
three; during the third year at age sixty-
two; during the fourth year at age sixty-
one, and thereafter at age sixty.
Section 803(b) (2) has been revised to conform with revisions made in sections
811 and 852 which increase the rate of compulsory contribution to the Foreign
Service Retirement Fund from 5 percent to 6i3 percent.
New paragraph 803(c) provides for the participation on a mandatory basis of
certain staff officers and employees in the Foreign Service Retirement and Dis-
ability system. At the present time staff officers and employees are covered by
the Civil Service Retirement system. The 1956 amendments to the Civil Service
Retirement Act of 1949 have substantially enhanced the attractiveness of this
system. The Foreign Service Retirement system is designed to give recognition
to the need for earlier retirement age for career Foreign Service personnel who
spend the majority of their working years outside the United States, withstanding
the rigors of moving and adjusting themselves and their families to new working
and living situations every few years. At the same time, it is apparent that staff
officers and employees who serve for an appreciable period are subject in large
measure to the same conditions of service as Foreign Service officers who are partic-
ipants under the Foreign Service Retirement and Disability system. Under the
Secretary's Integration Program approximately 400 staff officers have been unable
to qualify for lateral appointment as Foreign Service officers due principally to
their inability to meet prescribed age requirements. A recent study of staff per-
sonnel in classes FSS-1 through 11, inclusive, indicates that there are about 450
staff officers and employees in those classes who have 10 or more years of creditable
service toward retirement.
In certain instances staff officers and employees with relatively long periods of
service in the Foreign Service may desire to retire voluntarily with full annuity
at the earlier age permitted under the Foreign Service Retirement system. In
some cases it would be in the interest of the Service and of individual officers and
employees if the Foreign Service mandatory retirement provision for retirement
at age 60 were made applicable to staff personnel. The need for stimulating
somewhat earlier retirement, which is recognized in the case of Foreign Servile
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approve96For ReleaR'99/~7E:AWUgP21A000400020007-7
officers, is also significant in the case of certain Foreigr, Service staff officers and
employees. The proposed provision not only would fac litate the development of
a united Foreign Service, one of the principal objectives of the integration program,
but it would also contribute to improved promotional opportunities for younger
staff personnel.
The purpose of new paragraph 803(c)(1), therefore, is to provide that Foreign
Service staff officers and employees who have completed 10 years of continuous
service in the Foreign Service shall become participan~s in the Foreign Service
Retirement and Disability system. These officers and employees will be required
to make the necessary contribution to the Foreign Service Retirement and
Disability Fund.
Paragraph (2) provides for the gradual phasing out of officers and employees
who are above mandatory retirement age at the time ;hey become participants
in the system.
Existing legislation Proposed legislation
SEC. 804. Annuitants shall be persons Suc. 804. (a) Annuitants shall be
who are receiving annuities from the persons who are receiving annuities from
Fund on the effective date of this Act the Fund on he effective date of this
[,] persons[who shall become entitled Act and all parsons, including widows,
to receive annuities in accordance with widowers, dependent widowers children,
the provisions of section 519, 631, 632, and beneficiaries of participants or
634, 636, 637, 831, 832, and 833, and annuitants who shall become entitled to
all widows] and beneficiaries of par- receive annuities in accordance with
ticipants [who are] entitled to receive the provisions ,f this Act, as amended, or
annuities in accordance with the [terms in accordance with the provisions of
of this title.] section 5 of the Act of May 1, 1956 (70-
No existing legislation Stat. 125).
(b) When u+:ed in this title the term-
(1) "Widow" means the surviving
wife of a pa ?ticipant who was married
to such participant for at least two
years immediately preceding his death
or is the Mother of issue by such
marriage.
(2) "Widower" means the surviving
husband of a participant who was
married to such participant for at least
two years immediately preceding her
death or is the father of issue by such
marriage.
(3) "Dependent widower" means the
surviving husband of a participant who
was married to such participant for at
least two years immediately preceding her
death or is thr father of issue by such
marriage, and who is incapable of self-
support by reason of mental or physical
disability, and who received more than
one-half of his support from such partici-
pant.
(4) "Child" means an unmarried
child, including- (a) an adopted child, and
(b) a step-chi`,d or recognized natural
child who received more than one-half of
his support from the participant, under
the age of eighteen years, or such un-
married child regardless of age who
because of physical or mental disability
incurred before age eighteen is incapable
of self: support.
Section 804 has been redesignated as section 804(a) and changed for purposes
of simplification and to provide specifically that surviving children, widowers,
and dependent widowers as well as widows may be included as survivor annuitants.
New paragrah 804(b) defines the terms "widow", "widower", "dependent
widower' and " child".
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release *999O& iclCllAFRD ?flo 21 A000400020007-7
PART B-COMPULSORY CONTRIBUTIONS
Existing legislation Proposed legislation
SEc. 811. [Five] per centum of the SEc. 811.. Six and one-half per centum
basic salary received by each partici- of the basic salary received by each
pant shall be contributed to the Fund, participant shall be contributed to the
and the Secretary of the Treasury is Fund, and the Secretary of the Treasury
directed to cause such deductions to is directed to cause such deductions tp
be made and the sums transferred on be made and the sums transferred on
the books of the Treasury Department the books of the Treasury Department
to the credit of the Fund for the pay- to the credit of the Fund for the pay-
ment of annuities, cash benefits, re- ment of annuities, cash benefits, refunds,
funds, and allowances. and allowances.
The proposed change in this section would increase the rate of contribution to
the Foreign Service Retirement and Disability Fund from 5 per centum to 6%12
per centum of basic salary. This is a necessary amendment in view of the increased
benefits provided by the proposed revisions in title VIII.
PART C-COMPUTATION OF ANNUITIES
Existing legislation Proposed legislation
SEc. 821. (a) The annuity of a par- SEc. 821. (a) The annuity of a par-
ticipant shall be equal to 2 per centum ticipant shall be equal to 2 per centum
of his average basic salary for the of his average basic salary for the
highest five consecutive years of service, highest five consecutive years of service-
for which full contributions have been for which full contributions have been
made to the Fund, multiplied by the made to the Fund, multiplied by the
number of years [of service], not ex- number of years, not exceeding thirty-
ceeding thirty-five [years.] However, five, of service credit obtained in accord-
the highest five years of service for ance with the provisions of sections 851,
which full contributions have been made 852, and 853. However, the highest
to the Fund shall be used in computing five years of service for which full
the annuity of any Foreign Service contributions have been made to the
officer who serves as chief of mission Fund shall be used in computing the
and whose continuity of service as such annuity of any Foreign Service officer
is interrupted prior to retirement by who serves as chief of mission and
appointment or assignment to any other whose continuity of service as such is
position determined by the Secretary interrupted prior to retirement by
to be of comparable importance. In appointment or assignment to any
determining the aggregate period of other position determined by the Secre-
service upon which the annuity is to tary to be of comparable importance.
be based, the fractional part of a month, In determining the aggregate period of
if any, shall not be counted. service upon which the annuity is to
be based, the fractional part of a
month, if any, shall not be counted.
(b) [At the time of his retirement, (b) At the time of retirement, any
a participant, if the husband of a participant may, except as otherwise
wife to whom he has been married for provided by section 83.f (a), elect to
at least 'three years or who is the receive a reduced annuity and to pro-
mother of issue by such marriage, may vide for an annuity payable to his
elect to receive a reduced annuity for widow or her widower, commencing on
himself and to provide for an annuity the date following such participant's
payable to his widow, commencing on death and terminating upon the death
the date following his death and con- such surviving widow or widower.
tinuing as long as she may live. The ofhe annuity payable to the surviving
annuity payable to his widow shall in widow or widower after such partic-
no case exceed 25 per centum of his ipant's death shalt be 50 per centum
average basic salary as computed in of the amount of the participant's an-
accordance with subsection (a) of this nuity, up to the full amount of his
section, or 66% per centum of his annuity, specified by him as the base
reduced annuity. If the age of the for the survivor benefits computed as
participant is less than the age of prescribed in paragraph (a) of this
the wife or exceeds her age by not section. The annuity of the partici-
more than eight years, the annuity of pant making such ? election shall be
the participant will be reduced by an reduced by 2% per centum of any amount
amount equal to one-half of the annuity up to $2,400 he specifies as the base for
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Relea a s19$ fa7 AcCl 7 d)3721A000400020007-7
Existing legislation
which he elects to have paid to his
widow. If the age of the participant
exceeds the age of the wife by more
than eight years, the annuity of the
participant will be reduced by an
amount equal to one-half the annuity
which he elects to have paid to his
widow plus an additional reduction
equal to 2 per centum of such widow's
annuity for each year, or fraction
thereof, that the difference in age
exceeds eight. The participant may at
his option also elect to have his annu-
ity reduced by an additional 5 per
centum of the amount which he elects
to have paid to his widow, with a pro-
vision that, from and after the death
of his wife, if the participatnt shall
survive her, the annuity payable to
the participant shall be that amount
which would have been payable if no
option had been elected.]
Proposed legislation
the survivor bens fit plus ten per centum
of any amount o9er $2,-1,,00 up to the full
amount of the xarticzpant's annuity, so
specified.
(c) (1) If an a inuitant who made the
election provided for in paragraph (b) of
this section dies and is survived by a
widow or widow er and by a child or
children, there s hall be paid to or on
behalf of each cl ?ild, in addition to the
annuity payable to the surviving widow or
widower under such election, an annuity
equal to the smallest of., (i) 40 per centum
of the annuitant'; average salary divided
by the number of children; (ii) $600; or
(iii) $1,800 divided between the number of
children.
(2) If an annuitant who did not make
the election provided for in paragraph (b)
dies and is survive I by a widow or widower
and by a child or children, or if such
annuitant is not survived by a widow or
widower but by a child or children, each
surviving child shall be paid an annuity
equal to the smallest of., (i) 60 per centum
of the annuitant'. average salary divided
by the number of children; (ii) $720; or
(iii) $2,160 divided between the number of
children.
(d) If a surviving widow or widower
who is receiving a?,a annuity in accordance
with the provisioiw of paragraph (b) of
this section dies o:- the annuity of a child
is terminated, the annuity of any other
child or children ,hall be recomputed and
paid as though such wife, husband, or
child had not survived the participant.
(e) The annui.:y payable to a child
under paragraph ;c) or (d) of this section
shall begin on the first day of the next
month after the participant dies and such
annuity or any right thereto shall be
terminated upon death, marriage, or
attainment of the age of 18 years, except
that, if a child is incapable of self-support
by reason of mentc.l or physical disability,
the annuity shall t e terminated only when
such child dies, mzrries, orrecovers from
such disability.
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For ReleaseF 999/08/27 ~ C~ FARfJ? T21A000408920007-7
REIGN
Existing legislation Proposed legislation
[(e) A participant who is not married (f) A participant who is not entitled to
at the time of his retirement or who is designate a beneficiary in accordance with
married to a wife who is not entitled to the provisions of paragraph (b) of this
an annuity in accordance with the pro- section may at the time of retirement elect
visions of paragraph (b) of this section to receive a reduced annuity for himself
may elect to receive a reduced annuity and to provide for an annuity payable after
for himself and to provide for an addi- his or her death to a beneficiary whose
tional annuity payable after his death to name shall be notified in writing to the
a beneficiary whose name shall be noti- Secretary. The participant may elect
fied in writing to the Secretary at the that such beneficiary shall receive annuity
time of his retirement and who is accept- payments either equal to 50 per centum of
able to the Secretary. The annuity the participant's full annuity or to such
payments payable to such beneficiary lesser base sum as the participant shall
shall be either equal to the deceased designate. The annuity payable to a
participant's reduced annuity payments participant making such election shall be
or equal to 50 per centum of such re- reduced by 10 per centum of an annuity
duced annuity payments and upon the computed as provided in subsection (a) of
death of the surviving beneficiary all this section and by 5 per centum of an
payments shall cease and no further annuity so computed for each full five
annuity payments shall be due or pay- years the person designated is younger
able. To combined actuarial value of than the retiring participant, but such
the two annuities on the date of retire- total reduction shall not exceed 40 per
ment as determined by the Secretary of centum. Upon the death of the surviving
the Treasury shall be the same as the beneficiary all payments shall cease and
actuarial value of the annuity provided no further annuity payments shall be due
by paragraph (a) of this section. No or payable. No such election of a reduced
such election of a reduced annuity pay- annuity payable to a beneficiary shall be
able to a beneficiary other than a child valid until the participant shall have satis-
of the participant shall be valid until factorily passed a physical examination
the participant shall have satisfactorily as prescribed by the Secretary.
passed a physical examination as pre-
scribed by the Secretary. Annuity pay-
ments payable in accordance with the
provisions of this section to a beneficiary
who is a child of a participant shall cease
when the beneficiary reaches the age of
twenty-one years.]
Section 821 has been amended to extend to participants in the Foreign Service
system many of the survivorship benefits provided at present by other Federal
retirement systems.
Paragraph (b) prescribes the formula for computing a joint and survivorship
annuity under which the retiring officer elects to receive a reduced annuity and
provides upon death an annuity for the widow or widower. In this proposal a
formula similar to that provided in the civil service retirement system has been
adopted. The proposed legislation eliminates the provision of the existing legis-
lation permitting the participant to accept a further reduction of 5 percent of
the full annuity, with the provision for restoration of the full annuity if the
spouse predeceases the participant. Actuaries regard this as a "gambling pro-
vision" unrelated to sound actuarial principles. It can well be eliminated if
the new formula is adopted, for the retiring participant will not in that event
suffer so great a loss in annuity by reason of making provision for his or her spouse.
Paragraph (c) (1) covers the case of an annuitant who elected in favor of a
joint and survivorship annuity and is survived by a widow or widower and by a
th
t
dditi
i
on
o
e
n a
child or children. In such a case each child would receive
annuity received by the widow an annuity equal to the smallest of: (1) 40 percent
of the annuitant's average salary divided by the number of children; (2) $600;
or (3) $1,800 divided between the number of children.
Paragraph (c) (2) provides that if the annuitant did not make the election
under paragraph (b), dies and is survived by a widow or widower and a child or
children, or is survived only by children, they shall receive a higher annuity
than they would under the care of a parent annuitant.
Paragraph (d) provides for an increase in the children's annuities if the sur-
viving widow or widower dies, or another child's annuity terminates.
Paragraph (e) provides limitations on the payment of annuities to children;
i.e., termination upon death, marriage, or attainment of age 18 years of con-
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approve For Rele mE 99 /08/27 : CIA-RDP78-03721A000400020007-7
E N ERVICE ACT AMENDMIINTS
tinuance until death, marriage, or recovery when a chid is incapable of self-
support by reason of mental or physical disability.
Paragraph (f) provides for the designation of a beneficiary by a participant
who is not married or who is not entitled to designate a beneficiary in accordance
with the provisions of paragraph (b).
PART D-BENEFITS ACCRUING TO CERTAIN PARTICIPANTS
RETIREMENT FOR DISABILITY OR INCAPACITY-PHYSICAL Eli AMINATION-RECOVERY
Existing legislation
SEC. 831. (a) Any participant who
after serving for a total period of not
less than five years,] becomes totally
disabled or incapacitated for useful and
efficient service by reason of disease or
injury [incurred in the line of duty but]
not due to vicious habits, intemperance,
or willful misconduct on his part, shall,
upon his own application or upon order
of the Secretary, be retired on an an-
nuity computed as prescribed in section
821. If the disabled or incapacitated
participant has [had] less than twenty
years of service at the time he is re-
tired, his annuity shall be computed on
the assumption that he had had twenty
years of service[.]
(b) In each case such disability shall
be determined [by the report] of [a]
duly qualified [physician] or [sur-
geon], designated by the Secretary to
conduct [the examination]. Unless
the disability is permanent, [a] like
[examination] shall be made annually
until the annuitant has reached the
[retirement age as defined in sections
631 and 632, and the payment of the
annuity shall cease from the date of a
medical examination showing recovery.]
Fees for examinations under this provi-
sion; together with reasonable traveling
and other expenses incurred in order to
submit to examination, shall be paid
out of the Fund.
Proposed legislation
SEC. 831. (a) Any participant who
has five years of service credit toward re-
tirement under the system, excluding
military or naval service that is credited in
accordance with t ie provisions of sections
851 or 855(a) (2) and who becomes to-
tally disabled or incapacitated for
useful and efficient service by reason of
disease, illness, or injury not due to
vicious habits, intemperance, or willful
misconduct on h:s part, shall, upon his
own application or upon order of the
Secretary be retired on an annuity
computed as prescribed in section 821.
If the disabled or incapacitated parti-
cipant has less than twenty years of
service credit towusrd his retirement under
the system at the time he is retired, his
annuity shall be computed on the as-
sumption that he had had twenty years
of service, but the additional service credit
that may accrue to a participant under this
provision shall in no case exceed the
difference between his age at the time of
retirement and th ; mandatory retirement
age applicable to hss class in the Service.
(b) In each case such disability shall
be determined by the Secretary upon the
basis of the advics of one or more duly
qualified physicic ns or surgeons, desig-
nated by the Secretary to conduct
examinations. Unless the disability is
permanent, like examinations shall be
made annually u itil the annuitant has
reached the statz. Gory mandatory retire-
ment age for his class in the Service.
If the Secretary determines, on the basis
of the advice of one or more duly qualified
physicians or surgeons conducting such
examinations that an annuitant has re-
covered to the extant that he can return
to active duty, tine annuitant shall be
given the opportunity to be reinstated or
reappointed in the Service. The Secretary
may reinstate any such recovered dis-
ability annuitant in the class in which he
was serving at tirze of retirement. The
Secretary may, taeing into consideration
the age, qualifications, and experience of
such officer and the rank of his con-
temporaries in the Service, recommend
that the President, by and with the advice
and consent of the Senate, appoint him to
a class higher than the one in which he
was serving prior to retirement. Pay-
ment of the annuity shall continue until
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Relflasa4991MOWI rC,61 1-03721AOCA400020007-7
Existing legislation
(c) [When the annuity is discon-
tinued under this provision before the
annuitant has received a sum equal to
the total amount of his contributions,
with accrued interest, the difference
shall be paid to him or his legal repre-
sentatives in the order of precedence
prescribed in section 841.]
Proposed legislation
a date six months after the date of the
examination showing recovery or until
the date of reinstatement to active duty in
the Service, whichever is earlier. Fees for
examinations under this provision, to-
gether with reasonable traveling and
other expenses incurred in order to
submit to examination, shall be paid
out of the Fund. If the annuitant fails
to submit to examination as required
under this section, payment of the annuity
shall be suspended until continuance of
the disability is satisfactorily established.
(c) If a recovered disability annuitant,
whose annuity is discontinued, is for any
reason not reinstated to active duty, or
reappointed to a higher class in the Serv-
ice, he shall be considered to have been
separated within the meaning of section
834 as of the date he was retired for dis-
ability and he shall, after the discontinu-
ance of the disability annuity, be entitled
to the benefits of that section or of section
841(a) except that he may elect voluntary
retirement in accordance with the provi-
sions of section 686 if he can qualify
under its provisions.
(d) No participant shall be entitled to
receive an annuity under this Act and
compensation for injury or disability to
himself under the Federal Employees'
Compensation Act of September 7, 1916,
as amended, covering the same period of
time. This provision shall not bar the
right of any -claimant to the greater bene-
fit conferred by either Act for any part
of the same period of time. Neither this
provision nor any provision of the Act
of September 7 1916, as amended, shall
be so construed as to deny the right of
any person to receve an annuity under
this Act by reason of his own services
and to receive concurrently any payment
under such Act of September 7, 1916, as
amended, by reason of the death of some
other persons.
(e) Notwithstanding any provision of
law to the contrary, the right of any
participant entitled to an annuity under
this Act shall not be affected because
such participant has received an award
of compensation in a lump sum under
section 14 of the Act of September 7,
1916, as amended, except that where such
annuity is payable on account of the
same disability for which compensation
under such section has been paid, so
much of such compensation as has been
paid for any period extended beyond the
date such annuity becomes effective, as
determined by the Secretary of Labor,
shall be refunded to the Department of
Labor, to be paid into the Federal Em-
ployees' Compensation Fund. Before
such person shall receive such annuity
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved F%Release 1P 1 H1?JRyI9JA DP ?D( J3) A000400020007-7
Existing legislation Proposed legislation
he shall (1) refund to the Department
of Labor the amount representing such
computed payments for such extended
period, cr (2) authorize the deduction
of such amount from th annuity payable
to him under this Act, which amount
shall be transmitted to such Department
for reimb?irsement to such Fund. Deduc-
tions from such annuity may be made
from accrued and accruing payments, or
may be I rorated against and paid from
accruing payments in such manner as
the Secretary of Labor shall determine,
whenever he finds that the financial cir-
cumstanc, s of the annuitant are such as
to warran! such deferred refunding.
Amendments to section 831 are proposed in order to remedy certain defects in
existing law. The provisions concerning annual e camination of disability annui-
tants are made more strict and a new provision is also made for reinstatement of
a disability annuitant who recovers to such an extent that he may return to active
duty. Under existing provisions there is no clear authorization for the reinstate-
ment of a recovered disability annuitant.
The provisions relating to physicians and surgeons who make the examinations
upon which disability retirement is determined and upon which reemployment or
reinstatement may be based have been changed to provide for the designation by
the Secretary of one or more physicians or surgeons Further, the provisions have
been changed to authorize the Secretary to make the determination, based on
reports of the physicians and surgeons designated by him, that annuitants shall
be retired on disability or reinstated or reappointed in the Service. It is con-
templated that this will result in the establishment by regulation of a medical
board designated by the Secretary to advise h in with respect to disability
retirement.
The present law provides that any participant who has 5 years of service credit
is eligible for disability retirement. The proposed amendment would exclude
from those 5 years free service credit granted for military service for which no
contributions have been made to the fund.
The existing law provides that a disability annuitant is automatically given
a minimum of 20 years of service credit. This prevision is amended to limit the
amount of extra service credit that can be credited to a disability annuitant to
the difference between his age at the time of retirement and the mandatory retire-
ment age applicable to his class in the Service. T) credit him with more service
credit than he could acquire should he continue in the Service until he reached
the retirement age would be unwarranted.
Provision is also made to prevent duplication of disability benefits by the
Foreign Service retirement and disability system and the Federal Employees'
Compensation Bureau. The last sentence of paragraph (d) is based upon anal-
ogous provisions of the Civil Service Retirement Net and has the same intent;
to permit a widow to receive an annuity in her own right; that is, based on her
own service as an employee of the U.S. Government, and also to receive any
Compensation payable by reason of the death of her husband resulting from injury
sustained in the performance of his duty as an empoyee of the U.S. Government.
Existing legislation
SEc. 832. [In case a participant shall
die without having established a valid
claim for annuity, the total amount of
his contributions with interest thereon
at 4 per centum per annum, com-
pounded on June 30 of each year, except
as provided in section 881 and as herein-
aftertprovided in this section, shall be
paid to his legal representatives in the
order..of precedence given under section
Proposed legislation
SEC. 83?. (a) In case a participant
shall die and no valid claim for annuity is
payable under the provisions of this Act,
his contri-iutions to the Fund, with in-
terest, shall be paid in accordance with
the provisions of sections 841(a) and 881.
(b) If it participant who has at least
five years of service credit toward retire-
ment under the system, excluding military
or naval service that is credited in accord-
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Re 1 W ,WAT Agj~%fPR78-03721A990400020007-7
Ewisting legislation
841 upon the establishment of a valid
claim therefor. If the deceased par-
ticipant rendered at least five years of
service, and is survived by a widow to
whom he was married for at least three
years, or who is the mother of issue by
such marriage, such widow shall be paid
an annuity equal to the annuity which
she would have been entitled to receive
if her husband had been retired on the
date of his death and had elected to re-
ceive a reduced joint and survivorship
annuity, computed as prescribed in sec-
tion 821, providing the maximum an-
nuity for his widow, unless prior to the
date of his death he shall have elected,
in lieu of such widow's annuity, and
with the approval of the Secretary, to
have his deductions returned with
interest as provided in the first sentence
of this section covering participants
dying without having established a
valid claim for annuity. If the de-
ceased participant had had less than
twenty years of service at the time of
his death, the annuity payable to his
widow shall be computed on the assump-
tion that he had had twenty years of
service.]
Proposed legislation
ante with the provisions of sections 851 or
852(a) (2), dies before separation or retire-
ment from the Service and is survived by
a widow or a dependent widower, who
qualifies for an annuity under the pro-
visions of paragraph (b) of section 821,
such widow or dependent widower shall be
entitled to an annuity equal to 50, per
centum of the annuity computed in accord-
ance with the provisions of paragraph (e)
of this section and paragraph (a) of sec-
tion 821. The annuity of such widow or
dependent widower shall commence on the
date following death of the participant and
shall terminate upon death of the widow or
dependent widower or upon the dependent
widower's becoming capable of self-
support.
(c) If a participant who has at least
five years of service credit toward retire-
ment under the system, excluding military
or naval service that is credited in accord-
ance with the provisions of sections 851
or 852(a) (2) dies before separation or
retirement from the Service and is survived
by a widow or a dependent widower, who
qualifies for an annuity under the provi-
sions of paragraph (b) of section 821,
and a child or children, each surviving
child shall be entitled to an annuity com-
puted in accordance with the provisions
of paragraph (c) (1) of section 821. The
child's annuity shall begin and be termi-
nated in accordance with the provisions
of paragraph (e) of section 821. Upon
the death of the surviving widow or de-
pendent widower or termination of the
annuity of a child, the annuity of any
other child or children shall be recomputed
and paid as though such widow or depend-
ent widower or child had not survived the
participant.
(d) If a participant who has at least
five years of service credit toward retire-
ment under. the system, excluding military
or naval service that is credited in accord-
ance with the provisions of sections 851
and 852(a) (2), dies before separation or
retirement from the Service and is not
survived by a widow or widower, but by
a child or children, each surviving child
shall be entitled to an annuity computed
in accordance with the provisions of para-
graph (c) (2) of section 821. The child's
annuity shall begin and terminate in ac-
cordance with the provisions of paragraph
(e) of section 821.
(e) If, at the time of his or her death,
the deceased participant had less than 20
years of service credit toward retirement
under the system, the annuities payable
in accordance with paragraph (b) of this
section shall be computed in accordance
with the provisions of section 821 on the
assumption he or she had had 20 years of
service, but the additional service credit
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved Ford telease 19?Qffl/27 : CIA-RDP78-03721A000400020007-7
0 N SERVICE ACT AMENDMENTS
Existing legislation Proposed legislation
that ma j accrue to a deceased participant
under tl is provision shall in no case exceed
the difr.rence between his or her age on
the date of death and the mandatory retire-
ment age applicable to his or her class in
the Service. In all cases arising under
paragra ohs (b), (c), (d) or (e) of this
section, it shall be assumed that the de-
ceased participant was qualified for retire-
ment on the date of his death.
This section is changed to take into account the fact that for the first time
married females have become participants in the system. A limitation is placed
on the amount of free service credit that can be counted in computing annuities
for the same reason as that set forth in section 831. The provision inserted in
section 831 forbidding the inclusion of credit for military service in the "five-
year period of-service" is included in this section also. It should be recalled here
that section 821(b) authorizes a survivorship aniuity only for a widow who has
been married to a participant 2 years or is the mother of issue by such marriage.
Section 832, by its reference to section 821, makes this limitation equally applicable
in the case of a widow's annuity in the event cf the death in service of a par-
ticipant.
DISCONTINUED SERVICE RETIREMENT
Existing legislation Proposed legislation
No existing legislation. SEC. 834. (a) Any participant who
voluntazily separates from the Service
after obtaining at least five years of service
credit toward retirement under the system,
excludiz g military or naval service that is
credited in accordance with the provisions
of sections 851 or 852(a) (2), may, upon
separatign from the Service or at any time
prior to becoming eligible for an annuity,
elect to nave his contributions to the Fund
returnee to him in accordance with the
provisio azs of section 841, or to leave his
contributions in the Fund and receive an
annuity computed as prescribed in sec-
tion 82i commencing at the age of sixty
years. The provisions of paragraph (f)
of section 821 shall not be applicable to
such pa,-ticipants.
(b) I ` a participant who has qualified
in actor lance with the provisions of para-
graph (a) of this section, to receive a
deferred annuity commencing at the age of
sixty dies before reaching the age of sixty
his contributions to the Fund, with
interest, shall be paid in accordance with
the provisions of sections 841 and 881.
Section 834 is new in Foreign Service legislation. While participation in the
Foreign Service retirement system was limited to a small Foreign Service officer
corps, there was comparatively little need for a provision covering discontinued
service, since resignations and separations of officers were relatively infrequent
after they had acquired as much as 5 years of se:vice. Now, however, since the
Foreign Service officer corps has been greatly exps,nded and certain staff personnel
have been brought under the Foreign Service retirement system, we can expect a
larger proportionate number of voluntary separations than formerly. It is for
this reason that the Department needs legislatic n covering discontinued service
annuities which are similar to those of the civil service system.
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release 9/ 8/21vicigI RDR78r-k21A000400020007-7
PART E-DISPOSITION OF CONTRIBUTIONS AND INTEREST IN EXCESS OF BENEFITS
RECEIVED
Existing legislation
SEc. 841. (a) Whenever a participant
becomes separated from the Service
without becoming eligible for an annu-
ity or a deferred annuity in accordance
with the provisions of this Act, the total
amount of contributions from his salary
with interest thereon at 4 per centum
per annum, compounded annually [up
to the date of such separation]., except
as provided in section 881, shall be re-
turned to him.
. (b) In the event that the total con-
tributions of a retired participant, other
than voluntary contributions made in
accordance with the provisions of sec-
tion 881, with interest [compounded
annually] at 4 per centum added there-
to, exceed the total amount returned to
such participant or to an annuitant
claiming through him, in the form of
annuities, accumulated at the same rate
of interest up to the date the annuity
payments cease under the terms of the
annuity, the excess of the accumulated
contributions over the accumulated an-
nuity payments shall be paid in the fol-
lowing order of precedence, upon the
establishment of a valid claim therefor:
(1) To the beneficiary or benefi-
ciaries designated by the retired par-
ticipant in writing to the Secretary;
(2) If there be no such beneficiary,
[to the duly appointed executor or
administrator of the estate of the re-
tired participant];
(3) [If there be no such beneficiary,
or executor or administrator, pay-
ment may be made to such person or
persons as may appear in the judg-
ment of the Secretary to be legally
entitled thereto, and such payment
shall be a ban to recovery by any
other person.]
'Proposed legislation
SEc. 841. (a) Whenever a participant
becomes separated from the Service
without becoming eligible for an annu-
ity or a deferred annuity in accordance
with the provisions of this Act, the total
amount of contributions from his salary
with interest thereon at 4 per centum
per annum, compounded annually at the
end of each ,fiscal year through June 30,
1958; semi-annually as of December 31,
1958; annually thereafter as of December
31, and proportionately for the period
served during the year of separation in-
cluding all contributions made during or
for such period, except as provided in
section 881, shall be returned to him.
(b) In the event that the total con-
tributions of a retired participant, other
than voluntary contributions made iii
accordance with the provisions of sec-
tion 881, with interest at 4 per 'centuni
per annum compounded annually as i's`
provided in paragraph (a) of this section
added thereto, exceed the total amount
returned to such participant or to an
annuitant claiming through him, in the'
form of annuities, accumulated at the
same rate of interest up to the date
the annuity payments cease under the
terms of the annuity, the excess of the
accumulated contributions over the ac-
cumulated annuity payments shall be
paid in the following order of preced-
ence, upon the establishment of a valid
claim therefor, and such payment shall
be a ban to recovery by any other person:
(1) To the beneficiary or benefi-
ciaries designated by the retired par-
ticipant in writing to the Secretary;
(2) If there be no such beneficiary,
to the widow or widower of such par.
ticipant;
(3) If none of the above, to the child
or children of such participant and
descendents of deceased children by
representation;
(4) If none of the above, to the par-
ents of such participant or the survivor
of them;
(5) If none of the above, to the duly
appointed executor or administrator of
the estate of such participant;
(6) If none of the above, to other
next of kin of such participant as may
be determined by the Secretary in his
judgment to be legally entitled thereto.
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Rele 199 O&il27Ac2CiA 7&03721 A000400020007-7
Existing legislation
(c) No payment shall be made pur-
suant to paragraph (b) [(3)] of this
section until after the expiration of
thirty days from the death of the re-
tired participant or his surviving an-
nuitant.
Propose Z legislation
(c) No payment shall be made pur-
suant to paragraph (b) (6) of this sec-
tion until after t me expiration of thirty
days from the death of the retired par-
ticipant or his surviving annuitant.
Sections 841 and 881 provide, in addition to other provisions, the basis upon
which interest is computed on mandatory contribution: that exceed benefits
received under the Foreign Service retirement and disability system and upon
voluntary contributions to the fund. Because they set the periods upon which
interest on these contributions is compounded, they also control the recordkeeping
and reporting on the Foreign Service retirement and disability fund. Paragraphs
841 (a) and (b) have been amended to establish the compc unding of interest and
the keeping of records on a calendar-year basis instead of .z fiscal-year basis as is
now required by existing language. This will simplify the administration of the
Foreign Service retirement and disability fund by providir g a uniform system of
controls and records for all retirement and tax deductions, payrolls, and for the
computation of interest on retirement deductions. At th 3 present time records
and reports pertaining to the civil service retirement funs, the Federal income
tax, and the FICA tax are all maintained on a calendar-year basis. The fact
that the Foreign Service retirement and disability fund ha, had to be maintained
on a fiscal-year basis has necessitated a separate system of recordkeeping involving
6-month reports from Foreign Service posts on contributions to the fund, and a
separate system for the compilation of retirement deductions. An amendment to
the civil service retirement system, similar to this, was male by Public Law 216,
approved March 9, 1945 (79 Stat. 577). This change is the Foreign Service
retirement and disability system will help reduce the cost of the administration
of the system as the number of participants increases with expansion of the
Foreign Service.
The proposed additional changes in paragraphs (b) and (c) of this section are
for the purpose of bringing the provisions relating to the order of precedence for
the payment, when annuity payments cease, of contributions and interest in
excess of benefits received into conformity with standard actuarial practice.
This will be an administrative convenience since it will further standardize
accounting practices in the Department.
Existing legislation
SEc. 851. For the purposes of this
title, the period of service of a partici-
pant shall be computed from the effec-
tive date of appointment as a Foreign
Service officer, or, if appointed prior to
July 1, 1924, as [diplom.atic secretary,
consul general, consul, vice consul,
deputy consul, consular assistant, con-
sular agent, commercial agent, inter-
preter, or student interpreter, and shall
include periods of service at different
times as either a diplomatic or consular
officer, or while on assignment to the
Department, or while on special duty
or service in another department op
establishment of the Government, or
while on any assignment in accordance
with the provisions of part II of title V,]
but all periods of separation from the
Service and so much of any, leaves of
absence as may exceed six months in the
aggregate in any calendar year shall be
excluded, except [sick] leaves of ab-
Propo&;d legislation
SEC. 851. For the purposes of this
title, the period of service of a partici-
pant shall be computed from the effec-
tive date of appointment as a Foreign
Service officer, or, if appointed prior to
July 1, 1924, as en officer or employee of
the Diplomatic or Consular Service of the
United States, or who becomes a partici-
pant under the provisions of this Act, as
amended, but all periods of separation
from the Service and so much of any
leaves of absence without pay as may
exceed six months in the aggregate in
any calendar year shall he excluded, ex-
cept leaves of absence while receiving
benefits under the Federal Employees'
Compensation Acs of September 7, 1916,
as amended, and leaves of absences
granted participants while performing
active and honor zble military or naval
service in the Army, Navy, Air Force,
Marine Corps, o.- Coast GnsrA of the
United States.
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
FOREIGN SERVICE ACT AMENDMENTS 77
sence [for illness or injury in incurred in
the line of duty, with or without pay,]
and leaves of absences granted partici-
pants while performing active military
or naval service in the Army, Navy,
Marine Corps, or Coast Guard of the
United States.
The language of the former section 851 has been simplified and clarified with
respect to periods of service which are creditable toward retirement. In addi-
tion, specific provision has been made to give participants full service credit
toward retirement while they are on leaves of absence during which they receive
benefits from the Bureau of Employees' Compensation. The insertion of the
phrase "and honorable" in relation to military and naval service precludes the
possibility of a participant receiving credit for military service for which he has
received a "dishonorable" discharge.
Existing legislation
Proposed legislation
SEc. 852. f a) A participant may, sub-
SEc. 852. (a) A participant may,
ject to the provisions of this section,
subject to the provisions of this section,
include in his period of service-
include in his period of service-
(1) service performed as a civilian
(1) service performed as a civilian
officer or employee of the Govern-
officer or employee of the Govern-
ment prior to becoming a partici-
ment, including the municipal govern-
pant; and
ment of the District of Columbia, prior
to becomin
a
artici
ant
and
(2) active military or naval service
g
p
p
;
(2) active and honorable military
in the Army, Navy, Marine Corps,
or naval service in the Army, Navy,
Air Force, or Coast Guard of the
Marine Corps, Air Force, or Coast
United States.
Guard of the United States.
(b) A person may obtain [credit
(b) A person may obtain prior civil-
for] prior service by making a special
contribution to the Fund equal to 5
per centum of his annual salary for
each year of service for which credit is
sought subsequent to July 1,- 1924,
[with interest thereon to date of pay-
ment compounded annually at 4 per
centum, except that no special con-
tributions shall be required for periods
of active military or naval service in
the Army, Navy, Marine Corps, Air
Force, or Coast Guard of the United
States prior to becoming a participant.]
Any such participant may, under such
conditions as may be determined in
each instance by the Secretary, pay
such special contributions in install-
ments [during the continuance of his
service].
ian service credit in accordance iwth the
provisions of paragraph (a) (1) of this
section by making a special contribution
to the Fund equal to 5 per centum of his
basic annual salary for each year of
service for which credit is sought sub-
sequent to July 1, 1924, and prior to
the effective date of this Act, and at 6%
per centum thereafter with interest com-
pounded annually at 4 per centum per
annum to the date of payment. Any
such participant may, under such con-
ditions as may be determined in each
instance by the Secretary, pay such
special contributions in installments.
(c)(1) If an officer or employee under
some other government retirement system,
becomes a participant in the Foreign
Service Retirement and Disability system
by direct transfer, such officer or employee's
total contributions and deposits, including
interest accrued thereon, except voluntary
contributions; shall be transferred to the
Foreign Service Retirement and Disability
Fund effective as of the date such officer .or
employee becomes a participant in the
system. Each such officer or employee
shall be deemed to consent to the transfer
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
78 FOREIGN SERVICE ACT AMENDMENTS
[(c) Nothing in this Act shall be
construed so as to affect in any manner
a participant's right to retired pay,
pension, or compensation in addition to
the annuities herein provided, but no
participant may obtain prior service
credit toward an annuity under the
Foreign Service Retirement and Dis-
ability System for any period of service,
whether in a civilian or military capa-
city, on the basis of which he is receiving
or will in the future be entitled to receive
any annuity, pension, or other retire-
ment or disability payment or
allowance.]
Pre posed legislation
of such funds and such transfer shall be a
complete discsarge and acquittance of all
claims and demands against the other
government retirement fund on account of
service rende7ed prior to becoming a
participant in the Foreign Service Retire-
ment and Disability system.
(2) No gffiIJr21A000400020007-7
The temporary provisions proposed above provide for an orderly and
equitable conversion of all personnel paid in secordance with the present
rates of the Foreign Service staff salary schedule to the new classes and rates
of the proposed Foreign Service staff schedule. The salary adjustments
involved are held to the minimum possible while maintaining present salary
relationships of personnel. While the conversion. plan necessitates new class
designations in most all cases, the large majorit;r of personnel will receive a
higher class number by virtue of the reduction in the total number of classes
in the schedule.
SEC. 42. The annuity of each former participant under the Foreign Service
Retirement and Disability system, who retired prior to July 28, 1956, and who
at the time of his retirement had creditable service in excess of thirty years, shall
be recomputed on the basis of actual years of creditable service not in excess of
thirty-five years. Service which was not creditable under the Foreign Service
Retirement and Disability system on the date a forrier participant retires, shall
not be included as creditable service for the purpose )f this recomputation. The
annuities payable to such persons shall, when recomputed, be paid at the rates
so determined, but no such recomputation or any other action taken pursuant to
this section shall operate to reduce the rate of the annuity any such person is
entitled to receive under the Foreign Service Retirement and Disability system.
Public Law 828, 84th Congress, amended section 821(a) by increasing
from thirty to thirty-five the number of years of creditable service that may
be used in the computation of annuities. It is relieved that through over-
sight this provision was not at that time made applicable to former partici-
pants in the system who had retired with more than thirty years of creditable
service but whose annuities had been computed on the basis of only thirty
years' service. This proposed temporary section will make it possible to
recompute the annuities of all former participa its in the system who did
not receive the full benefit of their creditable service at the time of their
retirement. The provision is applicable only to former participants and does
not apply to surviving annuitants.
SEC. 43. (a) The provisions of this Act shall become effective as of the first
day of the first pay period which begins one month alter the passage of this Act,
except as otherwise provided in paragraphs (b), (c), and (d) of this section.
(b) The provisions of paragraphs (c) (1) and (c) (2) c f section 803 of the Foreign
Service Act of 1946, as amended, by section 24(b) of this Act, shall become
effective on the first day of the first month which begins one year after the effec-
tive date of this Act, except that any Foreign Service staff officer or employee,
who at the time this Act becomes effective meets the requirements for participa-
tion in the Foreign Service Retirement and Disability system, may elect to
become a participant in the system before the mandatory provisions become
effective. Such Foreign Service staff officers and employees shall become par-
ticipants effective on the first day of the second month following the date of
their application for earlier participation.
(c) The amendment made by section 41 of this Act shall be effective with
respect to taxable years ending after the date of enactment of this Act.
(d) The provisions of section 43 of this Act shall lake effect on the first day
of the first month which begins more than thirty days after the date of enactment
of this Act.
The purpose of this section is self-evident.
SEC. 44. Notwithstanding the provisions of this Act, existing rules, regulations
of or applicable to the Foreign Service of the United states shall remain in effect
until revoked or rescinded or until modified or superseded by regulations made
in accordance with the provisions of this Act, unless clearly inconsistent with
the provisions of this Act.
Section 45 is a necessary provision as it may not be possible to revise
completely all regulations and Executive orders now affecting the Service
before the effective date of the act. Without a provision such as that
contained in this section, there might be a question regarding the continuing
effect of some of these regulations.
SEC. 45. The following headings and sections in the Foreign Service Act of 1946,
as amended, are hereby repealed:
(1) Section 442 of such Act and the heading theretc.
(2) Section 525 of such Act and the heading theretc.
(3) Section 576 of such Act and the heading theretc.
(4) Sections 651 and 652 of such Act and the headings thereto including Part F.
The repeal of the various sections of the bill )resently containedin the
Foreign Service Act of 1946, as amended, are proposed for the following
reasons:
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Releq?& 9W 7A,cC1&iUDRffh~03721A000400020007-7
(1) Section 442-Proposed new section 416 supersedes the provisions of
section 442.
(2) Section 525-This provision which authorizes the Secretary to define
by regulation periods during which a Reserve officer may be considered as on
active duty is one that has not been used in the Foreign Service. Foreign
Service Reserve officers are appointed for limited periods and are subject to
termination at the discretion of the Secretary. An "inactive" Foreign Serv-
ice Reserve Officer Corps does not exist and Foreign Service Reserve officers
are not normally recalled to "active duty."
(3) Section 576-Revised section 571 supersedes section 576 and contains
the provisions of section 576 which the Department wishes to retain.
(4) Sections 651 and 652-Revised section 637 supersedes sections 651 and
652 and includes the provisions of these sections which the Department
wishes to retain.
ESTIMATED COST OF PROPOSED BILL
Department of State let year coat
Item
1. Conversion to the proposed 10 class FSS schedule (sec. 415).
Comment: The estimated cost is based on salary adjustments of
Foreign Service staff employees of the Department of State
(3691), who are paid in accordance with section 415, of the
Foreign Service Act of 1946, as amended------------------ $187, 640
2. Hazardous duty pay for diplomatic couriers (sec. 447).
Comment: The estimated cost is based on an average 10 percent
salary adjustment for 55 of the 63 couriers on the Depart-
ment's 28, 362
rolls as of October 31, 1958-----------------------
3. In-class promotion of Foreign Service staff officers and employees
(sec. 642.
Comment: It is estimated that 1 percent of FSS employees (37)
would receive in-class promotions and 1.9 percent (70)
would receive longevity increases. The estimated cost of
$21,935 was computed by multiplying 107 times $205, the 21, 935
average within class increment--------------- -------------------------
,Revised formula for computing reduction in officer's annuties when
survivorship benefits are elected (sec. 803).
Comment: At present elected survivors' annuities average about
$2,400 for which the respective officer's annuity is reduced
by approximately 50 percent or $1,200. Under the revised
formula the comparable reduction in the officer's annuity
would be 121,4 percent or $300. During the first year of
operation under the revised formula the additional cost to
the retirement fund would be negligible. Eventually the
cost would average 6.6 percent of the retired rolls----_-
5. Coverage of present FSS officers (sec. 803).
Comment: Approximately 475 FSS officers presently on the
rolls have been in the Service at least 10 years and qualify
for the proposed coverage. The additional liability for the
coverage of this group under the Foreign Service retirement
system is estimated at $14 million. It is pointed out, how-
ever, that the civil service retirement fund would be relieved
of a comparable liability---_-_-__
6. Coverage of approximately 25 additional FSS officers annually (sec.
803).
Comment: An average of 25 FSS officers would qualify for
coverage annually upon completion 10 years of service. The
additional liability for this group would be approximately
$250,000. Again it is pointed out that the civil service
retirement fund would be relieved of a comparable liability-
7.f.Creditng officers now on retired rolls with up to 35 years service
credit (sec. 34).
Comment: Based on analysis of officers on the retired rolls at
the beginning of fiscal year 1958, the cost of the provision
would be approximately $190,000 during the first year.
Thereafter the annual cost would decrease and eventually 190 000
disappear with the death of such officers------------------
Total ----------------------------------------------- 427,937
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved 1F8r Release 08 tCV6RAr7 21 A000400020007-7
COMPTROLLER GENERAL OF THE UNITED STATES,
Hon. J. W. FULBRIGHT, Washington, April 15, 1959.
Chairman, Committee on Foreign Relations,
U.S. Senate
DEAR MR. CHAIRMAN: Your letter of March 18, 1959, acknowledged March.
25, requests our comments upon S. 443, entitled the' Foreign Service Act Amend-
ments of 1959, which would effect numerous changu:s in the existing provisions
of the Foreign Service Act of 1946, as amended, 22 Uluted States Code 801 et seq.
While for the most part the bill involves matters o:` policy upon which we offer
no recommendation, we should like to direct your attention to certain of its
provisions which we think warrant further consideral ion.
Section 9 and 36.-Section 9 would amend section 520 of the Foreign Service
Act and section 36 would add a new section (secti(n 872) to that act. Their
combined effect would be to provide express statutory authority for a person's
receiving an annuity under the Foreign Service Act to accept a Government
position and-within the limitations specified in the new section 872-receive
the compensation of that position concurrently with such annuity. Subsection
(b) of the new section 872 would prescribe a rather cumbersome procedure for
paying annuitants who accept employment in Government agencies other than
the Department of State. In such a case the employing agency, rather than its
paying the employee directly, would transfer the gro >s amount of all salary due
him to the Department of State which would then p zy the salary together with
such portion of the annuity as he would be entitled to receive under section 872.
That procedure would be particularly cumbersome were an annuitant upon em-
ployment to earn compensation greater than the "highest basic salary" to which
he was entitled on the date of his retirement.
We think there is considerable merit to the view tha i the receipt of a retirement
annuity under the Foreign Service retirement system concurrently with the com-
pensation of a position in which the annuitant is activf ly employed is inconsistent
in principle (see 16 Comp. Gen. 121; 32 id. 89; Brunswick v. Elliott, 103 F. (2) 746)
and that either the annuity should be suspended daring the period of active
employment or the compensation payable to the employee during such period'
should be reduced by an amount equivalent to the %mount of the annuity he
receives. Such reduction in compensation would be consistent with and would
conform with the Civil Service Retirement Act which requires a reduction in the
compensation payable to an annuitant under that ael who is employed by the
Government by an amount equal to the annuity he receives. If either of these
alternatives is acceptable to your committee, then the procedure prescribed in
subsection (b) of the new section 872 would be unnecessary and such paragraph
could be eliminated from the bill.
Section 14.-This section would amend section 625 of the Foreign Service Act
of 1946 to authorize the Secretary of State without regard to any other law to.
grant a Foreign Service officer or a Foreign Service Reserve officer additional
salary rate increases within the range of salary rates established for the class in
which he is serving based upon "especially meritorious service." The Congress
by the enactment of title III of the act of Septemb ar 1, 1954, 68 Stat. 1112,
entitled the "Government Employees Incentive Awards Act" provided a single
uniform system for rewarding employees of the various Departments and agencies
(including officers and employees of the Foreign Service) for especially meritorious
service. The provisions of section 14 of the bill appear clearly contrary to the
policy enunciated by the Congress in enacting the Government Employees
Incentive Awards Act. Therefore, we entertain seric us reservation concerning
the necessity or desirability of this provision. Howev.;r, should you decide that
the inclusion of a provision such as that contained in t:Iis section is desirable and'
that salary rate increases based upon "especially meritorious service" should be
provided for, then we would suggest that the section expressly specify whether
its intent, so far as the Foreign Service is concerned, is to supersede or merely
supplement the present authority contained in the Government Employees
Incentive Awards Act. We also offer for your consideration the question whether
some limitation should be placed upon the number of meritorious rate increases
that may he granted Foreign Service officers and Reserve officers within any
specified period of time.
Section 21.-This section would amend section 642 cf the Foreign Service Act
of 1946, as amended, to authorize the granting of me ?itorious rate increases to
Staff officers and employees. The comments made with respect to section 14 are
equally applicable to this section.
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
FOREIGN SERVICE ACT AMENDMENTS 89
The section also would authorize periodic rate increases within the range of
rates of the class in which the officer or employee is serving. We suggest that the
section be amended to specify a minimum period which must be served by an
officer or employee to entitle him to a periodic salary rate increase. Similarly,
the section authorizes the granting of four additional salary rate increases-over
and above the rates specified in the bill for each class-in recognition of longevity
and proficiency in service. We recommend that standards be prescribed in the
section setting forth minimum requirements that must be complied with as condi-
tions of eligibility for such increases. We think also that the term "proficiency
in the service" as used in the section either should be defined or omitted from the
section.
Section 22.-This section would amend section 701 of the Foreign Service Act
of 1046 to authorize orientation and language training of dependents of officers
and employees of the Government who are assigned to "foreign relations activi-
ties." The term "foreign relations activities" is not defined in the bill and it is
difficult to determine just what that term is intended to encompass. Conceivably,
it could be interpreted to apply to all activities conducted by Government depart-
ments and agencies in foreign countries regardless of the relative significance or
importance of such activities. Moreover, the term "dependents" as used in this
section is not defined. We do not know whether it is intended to apply to children
regardless of age or to persons who are not members of the immediate family of
the officer or employee but who might be dependent upon him for support. We
recommend that the section be clarified in these respects.
Section 33(b).-This section would amend section 852 of the Foreign Service
Act of 1946 by the addition of new paragraphs (d) and (e). These new para-
graphs apparently are modeled after comparable provisions in the Civil Service
Retirement Act Amendments of 1956-title IV of the act of July 31, 1956, 70
Stat. 743. We recommend that the proposed new paragraph (e) be amended to
accomplish the following purposes:
(1) Preclude the granting of credit for military service if the participant is
entitled to receive retirement pay based upon military service unless such retired
pay is awarded on account of a service-connected disability (1) incurred in combat
with an enemy of the United States or (2.) caused by an instrumentality of war
and incurred in line of duty during an enlistment or employment as provided in
Veterans Regulation No. 1(a), part I, paragraph I or is awarded under title III
of Public Law 810, 80th Congress. This action would be consistent with the
present provisions contained in section 3(b) of the Civil Service Retirement Act.
(2) Limit the number of years of military service for which credit may be re-
ceived after the date of enactment of this bill. If an individual by his own choice
elects to remain in the military service for long periods of time, there appears little
reason why this entire period should be creditable for Foreign Service Retirement
Act purposes. The Civil Service Retirement Act places a limitation of 5 years on
the military service that is creditable.
As a technical matter the term "an explosion of" should be omitted from line 9,
page 35, of the bill if it is intended that this exception conform with similar excep-
tions appearing in section 212(b) of the net of June 30, 1932, as amended, 5 United
States Code, 59a, and section 3(b) of the Civil Service Retirement Act, 70 Stat. 746.
. . Sincerely yours,
JOSEPH CAMPBELL,
Comptroller General of the United States.
[S. 2233, 86th Cong., 1st sess.]
A BILL To amend the Foreign Service Act of 1946, as amended and for other purposes
Be it enacted by the Senate and House of Representatives of the United States of
America in Congress assembled, That this Act nihy be cited as the "Foreign Service
Act Amendments of 1959".
SEC. 2. Section 444 of such Act and the heading thereto is amended to read
as follows:
"COMPENSATION PLANS FOR ALIEN CLERKS AND EMPLOYEES
"SEC. 444. (a) The Secretary shall, in accordance with such regulations as
he may prescribe, establish compensation plans for local (alien) employees of the
Service: Provided, That such compensation plans for local employees shall be
based upon prevailing wage rates and compensation practices for corresponding
types of positions in the locality, as is consistent with the public interest.
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
FOREIGN SERVICE ACT AMENDMENTS
"(b) For the purpose of performing functions abroad, other departments and
agencies of the Government are authorized to administer. local (alien) employee
programs in accordance with the applicable provisicns of this Act."
SEC. 3. (a) The heading to section 516 of such Act is amended to read as
follows: "ADMISSION TO CLASS 7 OR 8".
(b) Section 516 of such Act is amended by striking out "SEC. 516" and inserting
in lieu thereof "SEC. 516. (a)" and by adding at the end thereof a new paragraph
(b) which shall read as follows:
"(b) The Secretary may furnish the President witl. the names of those persons
who have passed such examinations and are eligible for appointment as Foreign
Service officers of class 8, whom he recommends for appointment directly to class
7 when in his opinion, their age, experience, or other qualifications make such an
appointment appropriate."
SEC. 4. Section 517 of such Act is amended by inserting in the first sentence
after the phrase "classes 1 to 7, inclusive," the phrase "except as provided in
section 516(b) of this Act," and by striking out the second and third sentences
thereof.
SEC. 5. (a) Subparagraphs (1) and (2) of paragraph (b) of section 634 of such
Act are amended to read as follows:
"(1) one-twelfth of a year's salary at his then current salary rate for each
year of service and proportionately for a fraction of a year, but not exceeding
a total of one year's salary at his then current salary rate, payable without
interest, from the Foreign Service Retirement and Disability Fund, in three
equal installments on the 1st day of January follc wing the officer's separation
and on the two anniversaries of this date immediately following: Provided,
That in special cases, the Secretary may in his discretion accelerate or com-
bine the installments; and
"(2) a refund of the contributions made to the Foreign Service Retirement
and Disability Fund, with interest as provided iii section 841(a), except that
in lieu of such refund such officer may, if he has at least five years of service
credit toward retirement under this system, excluding military or naval
service that is credited in accordance with the'provisions of section 851 or
852(a), elect to receive retirement benefits on Leaching the age of sixty in
accordance with the provisions of section 821. In the event that an officer
who was separated from classes 4 or 5 and who ins elected to receive retire-
ment benefits dies before reaching the age of si cty, his death shall be con-
sidered a death in service within the meaning of section 832. In the event
that an officer who was separated from classes 6 and 7 and who has elected
to receive retirement benefits dies before reaching the age of sixty, the total
amount of his contributions made to the Foreign Service Retirement and
Disability Fund, with interest as provided in section 841(a)."
(b) Paragraph (c) of section 634 of such Act shall be amended by striking out
the word "retired" in the first sentence and inserting in lieu thereof the word
' `separated".
SEC. 6. Section 635 of such Act and the heading thereto are amended to read
as follows:
"FOREIGN SERVICE OFFICERS RETIRED FROM CLASS 7 OR 8
"SEC. 635. Any Foreign Service officer in class 7 who is appointed under the
provisions of section 516(b) and any Foreign Service cffficer in class 8 shall occupy
probationary status. The Secretary may terminate 1Lis service at any time.
SEC. 7. Paragraphs (b) and (c) of section 637 of such Act are amended to read
as follows:
"(b) Any participant in the Foreign Service Retirement and Disability System
separated under the provisions of paragraph (a) of this section shall receive a
refund of the contributions made to the Foreign Service Retirement and Disability
Fund, with interest, as provided in section 841(a) exce At that in lieu of such refund
such officer may, if he has at least five years of serv.ce credit toward retirement
under this System, excluding military or naval service that is credited in accord-
ance with the provisions of sections 851 or 852(a), elect to leave his contributions
in the Fund and receiye an annuity, computed as pr .scribed in section 821 com-
mencing at the age of sixty years. In the event that an officer who has elected
under the provisions of this section to receive a d3ferred annuity dies before
reaching the age of sixty, his contributions to the P und, with interest, shall be
paid in accordance with the provisions of sections 841 and 881.
"(c) Any officer or employee of the Service who is not a participant in the
Foreign Service Retirement and Disability System s:iall be entitled only to such
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
benefits as shall accrue to him under the retirement system in which he is a
participant."
SEc. 8. Section 912 of such Act is amended by changing the heading thereto to
read "LOAN OF HOUSEHOLD FURNISHINGS AND EQUIPMENT" and by inserting
between the words "with household" the word "basic" and by inserting between
the words "household equipment" the phrase "furnishings and".
SEc. 9. Section 913 of such Act and the heading thereto is amended to read as
follows:
"TRANSPORTATION OF MOTOR VEHICLES
"SEc. 913. The Secretary may, notwithstanding the provisions of any other
law, transport for (or). on behalf of an officer or employee of the Service, a privately
owned motor vehicle or replacement thereof in any case where he shall determine
that water, rail, or air transportation of the motor vehicle or replacement thereof
is necessary or expedient for any part or of all the distance between points of
origin and destination."
1954 (26 U.S.C. 104(a) (4)) (relating to the exclusion from gross income of com-
pensation for injuries and sickness) is hereby amended to read as follows:
"(4) amounts received as a pension, annuity, or similar allowance for
personal injuries or sickness resulting from active service in the armed forces
of any country or in the Coast and Geodetic Survey or the Public Health
Service, or as a disability annuity payable under the provisions of section
831 of the Foreign Service Act of 1946, as amended (22 U.S.C. 1081; 60 Stat.
1021)."
(b) (1) Section 402(a) of the Internal Revenue Code of 1954 (relating to the
taxability of a beneficiary of an employee's trust) is hereby amended as follows:
(a) By striking out in the first sentence of paragraph (1) thereof "paragraph
(2) " and inserting in lieu thereof "paragraphs (2) and (3)", and
(b) By redesignating paragraph (3) thereof as paragraph (4) and by inserting
after paragraph (2) thereof the following new paragraph:
"(3) The amount includible under this subsection as the gross income of
a nonresident alien individual with respect to a distribution made by the
United States in respect of services performed by an employee of the United
States shall not exceed an amount which bears the same ratio to the amount
includible in gross income without regard to this paragraph as the aggregate
compensation paid by the United States to such employee for such services
and includible in gross income under this subtitle or prior income tax laws
bears to the aggregate compensation paid by the United States to such
individual whether or not includible in gross income."
(2) Section 871 of the Internal Revenue Code of 1954 (relating to the tax
imposed on nonresident alien individuals) is hereby amended by striking out
subsection (d) thereof and inserting in lieu thereof the following new subsection:
"(C) CROSS REFERENCE.-
(1) For doubling of tax on citizens of certain foreign countries,
see section 891.
(2) For taxability of amounts paid by the United States to cer-
tain nonresident alien employees or their beneficiaries, see section
402(a) (3).
SEc. 11. The amendment made by section 10 of this Act shall be effective with
respect to taxable years ending after the date of enactment of this Act,
of or applicable to the Foreign Service of the United States shall remain in effect
until revoked or rescinded or until modified or superseded by regulations made
in accordance with the provisions of this Act, unless, clearly inconsistent with the
provisions of this Act.
SEc. 13. The following section in the Foreign Service Act of 1946, as amended,
is hereby repealed:
(1) Section 637(d) of such Act.
Hon. RICHARD M. NIXON,
President of the Senate.
DEPARTMENT OF STATE,
June 11, 1959.
DEAR MR. VICE PRESIDENT: On December 31,1958, the Department submitted
to you a proposed bill to amend the Foreign Service Act of 1946, as amended, and
for other purposes, for consideration by the U.S. Senate. This proposed bill was
introduced by Senator Green as S. 443 on January 17, 1959, and referred to the
Committee on Foreign Relations.
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
Since the submission of this original bill, the Department has prepared a supple-
mental proposed bill which it wishes to have considered at the same time the
original bill receives the attention of the U.S. Senate. The additional amend-
ments proposed in this bill, to amend the Foreign Service Act of 1946, as amended,
and for other purposes, (tab I) are urgently needed to improve and strengthen the
administration of the Foreign Service. They woiad accomplish the following;
1. Clarify and simplify provisions for the establ, shment of compensation plans
for local (alien) employees of the Service and provide for the use of these provi-
sions by other departments and agencies of the Government authorized to admin-
ister local (alien) employee programs.
2. Provide authority for the appointment direct. y to class ?FSO-7 of a limited
number of persons who have qualified for FSO-8 appointment.
3. Clarify provisions relating to the selection out of Foreign Service officers in
classes 4, 5, 6, and 7.
4. Further clarify and simplify provisions relating to separation for cause.
5. Clarify provisions relating to the furnishing of household equipment in
order to effect economy in transportation costs.
6. Clarify provisions relating to the transportation and replacement of motor
vehicles.
7. Exempt from income tax liability annuities maid under the civil service
retirement and disability system to nonresident aliens who are retired employees
of the U.S. Federal Government.
It is suggested that the proposed new section 7 of the attached bill be substi-
tuted for section 18 of S. 443.
An explanation of each of the proposed amendmer is (tab II) is also attached.
Enactment of the proposed bill will not result in an,, direct cost to the Depart-
ment of State. Section 10 of the bill proposing elimination of the 30-percent
tax now withheld from Government annuities of retired alien employees would
result in additional annuity payments totaling approximately $400,000. This
amount relates to all nonresident aliens receiving such annuities who are retired
employees of the U.S. Government regardless of agency.
Enactment of this proposed supplemental legislation as a part of the original
bill will provide important improvements for the conduct of foreign affairs.
The Department recommends the passage of this legislation and trusts that it
may receive favorable consideration by the Congress.
The Department has been informed by the Bureau of the Budget that there is
no objection to the submission of this draft legislation.
Sincerely yours,
Lc y W. HENDERSON,
Acting Secretary.
EXPLANATION OF PROPOSED AMENDMENT. TO THE FOREIGN
SERVICE ACT OF 1946, AS AMENDED
June 1959--Department of Stat
Existing legislation Proposed legislation
[CLASSIFICATION OF POSITIONS OF ALIEN
CLERKS AND EMPLOYEES]
SEC. 444. [(a) Upon the basis of the
classification provided for in section 441,
the Secretary shall, with the advice of
the Board of the Foreign Service, from
time to time prepare schedules of
salaries for classes of positions of alien
clerks and employees of the Service,
which classes shall be established by
regulation, and shall allocate all such
positions to the appropriate classes.
[(b) All alien employees in an area
of comparatively uniform wage scales
and standards of living, occupying posi-
tions of equal responsibility, shall receive
equal pay except as there may be in-
creases provided for length of service in
accordance with uniform procedures.]
COMPENSAT;ON PLANS FOR ALIEN
CLERKS AND EMPLOYEES
SEC. 444. (a) The Secretary shall, in
accordance with such regulations as he
may prescribe, establish compensation
plans for local talien) employees of the
Service: Providea, That such compensa-
tion plans for local employees shall be
based upon prevailing wage rates and
compensation practices for corresponding
types of positions in the locality, as is
consistent with the public interest.
(b) For the purpose of performing
functions abroad, other departments and
agencies of the Government are authorized
to administer local (alien) employee pro-
grams in accordance with the applicable
provisions of this A et.
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For ReleaseRi9 9188t21:nfG#A+ l 0i721A000400020007-7
Section 444' is amended to clarify and simplify the provisions for the establish-
ment of compensation plans for local (alien) employees of the Service. Existing
paragraphs (a) and (b) have been incorporated and clarified in new paragraph (a).
Wage and salary schedules must be based upon local prevailing. pay practices for
corresponding types of positions in the locality. They are subject to frequent
changes owing to fluctuating economic and labor market conditions. The Depart-
ment's responsibility for interagency coordinative action in administering local
(alien) personnel in foreign areas obviates the necessity for or the practicability
of Board of the Foreign Service advice on such matters.
New paragraph (b) of this section provides other. departments and agencies of
the Government employing local personnel in the performance of functions abroad
with authority to utilize provisions of this act which are applicable to local (alien)
personnel as deemed appropriate by such departments and agencies. Thus
the various Federal departments and agencies employing local personnel abroad
.are enabled to operate as a single employer by providing uniform employment
conditions for all U.S. Government local employees in a given foreign labor market
area who are working under similar conditions and circumstances.
PART B-FOREIGN SERVICE OFFICERS
Existing legislation Proposed legislation
ADMISSION TO CLASS 8 ADMISSION TO CLASS 7 OR 8
SEC. 516. No person shall be eligible SEc. 516. (a) No person shall be
for appointment as a Foreign Service eligible for. appointment as a Foreign
officer of class 8 unless lie has passed Service officer of class 8 unless he has
such written, oral, physical, and other passed such written, oral, physical, and
examinations as the Board of Examiners other examinations as the Board > of
for the Foreign Service may prescribe to Examiners- for the Foreign Service may
determine his fitness and aptitude for prescribe to determine his fitness and
the work of the Service and has demon- aptitude for the work of.the Service; and
strated his loyalty to the Government has demonstrated his, loyalty to., the
of the United States and his attachment Government of the. United States and
to the, principles of the Constitution. his attachment- to. the principles of the
.The Secretary shall furnish the President Constitution.. The Secretary shall..fur-
with the. names. of those persons who nish the President with the names of
have passed such. examinations and. are those persons who have passed suOh
eligible -for appointment as Foreign examinations and are eligible ,for .ap-
Service officers of class 8. pointment as Foreign Service officers, of
class 8.
(b) The Secretary may furnish :t p
President with the names of those persons
who have passed such examinations and
are eligible for appointment as Foreign
Service officers of class 8, whom he recom-
mends for appointment directly to. class.7
when in his opinion, their age, experience,
or other qualifications make such; an
appointment appropriate.
The proposed amendment to section 516'would permit the appointment directly
to class FSO-7 of a limited number of persons who have qualified for'FSO--8
appointment under the provisions of this section. While it is anticipated that this
authority would rarely be used, there are occasions when direct appointment to
class 7 would be desirable and fully justified in the interest of, the Service and of
the individual appointee. The Department Intends, if this amendment is enacted
to issue regulations limiting such appointments to the most mature and experienced
candidates who: (1) Are at least 28 years old; (2) have a record of graduate train-
ing or employment in Government or industry which clearly demonstrates ability
or special skills; and (3) have a modern foreign language competence. Under
existing legislation, it has been necessary for some older, more experienced men to
take substantial salary reductions to accept appointment at the same level as
younger men just. out of college. While these men have accepted appointment
willingly, it is only natural that they have been concerned about their losses in
income. In this respect the proposed provision would improve morale among the
younger officers by giving recognition to age and experience.
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved $ or ReleaseFq tO Cy,( -F W78 i721A000400020007-7
PART B-FOREIGN SERVICE OFFICERS
ADMISSION TO CLASSES 1 TO 7, INCLUSIVE
Existing legislation Proposed legislation
SEC. 517. A person who has not SEC. 517. A person who has not
served in class 8 shall not be eligible for served in class 8 shall not be eligible for
appointment as a Foreign Service officer appointment as a Foreign Service officer
of classes 1 to 7, inclusive, unless he has of classes 1 to 7, inclusive, except as
.passed comprehensive mental and physi- provided in section 516(b) of this Act,
cal examinations prescribed by the unless he l gas passed comprehensive
Board of Examiners for the Foreign mental and physical examinations pre-
Service to determine his fitness and scribed by the Board of Examiners for
aptitude ' for the work of the Service; the Foreign Service to determine his
demonstrated his loyalty to the Govern- fitness and aptitude for the work of the
ment of the United States and his Service; demmstrat.ed his loyalty to the
attachment to the principles of the Con- Government of the United States and
stitution; and rendered at least four his attachment to the principles of the
years of actual service prior to appoint- Constitution : and rendered at least four
ment in a position of responsibility in years of actual service prior to appoint-
the service of a Government agency, or ment in a position of responsibility in
agencies, except that, if he has reached the service o ' a Government agency, or
the age of thirty-one years, the require- agencies, exc apt that, if he has reached
?ment as to service may be reduced to the age of thirty-one years, the require-
three years. [After the date of enact- ment as to e ervice may be reduced to
?ment of the Foreign Service Act amend- three years. The Secretary shall fur-
ments of 1955 and until otherwise pro- nish the President with the names of
vided by Act of Congress, not more than those persons who shall have passed
one thousand two hundred and fifty such examinations and are eligible for
persons who have not served in class 8 appointment as Foreign Service officers
may be appointed to classes 1 to 7, of classes l to 7, inclusive. The Secre-
inclusive; of such persons, not more tary shall, taring into consideration the
than one hundred and seventy-five may age, qualificidions, and experience of
be appointed who were not employed on each candidate for appointment, recom-
March 1, 1955, in the Department, in- mend the class to which he shall be
eluding its Foreign Service Reserve and appointed in accordance with the pro-
Foreign Service Staff personnel, and visions of this section.
who have not also served in a position of
responsibility in the Department, or the
Service, or both, for the required period
prior to appointment as a Foreign Serv-
ice officer. Notwithstanding the above
provisions of this section, the limitation
on the maximum number of appoint-
ments authorized herein shall not be
applicable in the case of any person
appointed or assigned by thesecretary
of State as a Foreign ServiceReserve,
officer and who thereafter has served in
a position of responsibility in such
capacity for the required period prior
to appointment as a Foreign Service
officer.] The Secretary shall furnish
the President with the names of those
persons who shall have passed such
examinations and are eligible for ap-
pointment as Foreign Service officers of
classes 1 to 7, inclusive. The Secretary
shall, taking into consideration the age,
qualifications, and experience of each
candidate for appointment, recommend
the class to which he shall be appointed
in accordance with the provisions of this
section.
The proposed changes in section 517 accomplish the f illowing: (1) They permit
the appointment to class 7 (without the requirement that they must previously
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release 199,w1 127SE'UfS -ROPiWB 1000400020907-7
have served in class 8) of certain persons qualified by examination for appointment
to class FSO=8 a8* Is proposed under the revised provision of section 516(b); and
(2) they- eliminate the temporary provision incorporated in Public Law 22, 84th
Congress and further amended by Public Law 828, 84th Congress, which estab-
lished, presumably for the duration of the lateral entry program a limitation on the
number of persons who can be integrated into the Foreign Service under the provi-
sions of this section, The integration program has now been completed and a
permanent provision for the lateral entry of officers to classes 1 to 7, inclusive,
should be restored. Any future use of this lateral entry provision to meet the
needs of he Service would be seriously handicapped by the fact that only officers
who hadbeen on the rolls of the Department as of March 1, 1955, or who have
served 3 years after appointment by the Secretary of State to the Foreign Service
Reserve Corps, would be eligible for appointment. It is hoped, the good judg-
ment and commonsense of those responsible for advising the Secretary on contin-
uing lateral entry policies can be relied upon to carry out such policies on a
sound basis.
Existing legislation
SEC. 634. (b) Any Foreign Service
officer in classes 4, 5, 6 or 7 who is retired
fromthe Service in accordance with the
provisions of section 633 shall receive-
(1) one-twelfth of a year's salary
at his then current salary rate for
each year of service and propor-
tionately for a fraction of a year, but
not exceeding a total of one year's
salary at - his then current salary rate,
payable without interest, in three
equal installments on the 1st day of
January-following the officer's, [retire-
ment], and on the two anniversaries
of this date immediately following;
and - -
(2) a refund of the contributions
made to the Foreign Service Retire- -
-nent and Disability Fund, with in-
terest [thereon at 4 per centum,
compounded annually], except that
in lieu of such refund such officer
may [elect to receive retirement bene-
fits on reaching the age of -sixty-two,
in accordance with the. -provisions of
section 821.] In the event that an
officer who was separated from classes"
4 or. 5 and who has elected to receive
retirement benefits dies before reach-
ing the age of [sixty-two], his death
shall be considered a death in service
within the meaning of section 832,
In the event that an officer who was
separated from classes 6. and 7 and
who has elected to receive retirement
benefits dies before reaching the age
of - [sixty-two], the total amount of
his contributions made to the Foreign
Service Retirement and Disability
Fund, with interest [thereon, at 4 per
centum, compounded annually s!- .all
be paid in accordance with the provi-
sions of section 841.]
Proposed legislation
SLC. 634. (b) Any Foreign Service
officer in classes 4, 5, 6 or 7 who is retired
from the Service in. accordance with the
provisions of section 633 shall receive-
(1) one-twelfth of a year's salary
at his then current salary rate for each
year of service and proportionately
for a fraction of a year, but not ex-
ceeding a total of one year's salary at
his then current salary rate, payable
without interest, from the Foreign
Service Retirement and Disability Fund,
in three equal installments oi4 the 1st
day of January following t.officer:'s
separation and on the two anniver-
saries of -this date immediately follow-
ing: Provided, That in special cases,
the Secretary may in his discretion
accelerate or combine the installments;
and
(2) a refund of the contributions
made to the Foreign Service Retire-
meat and Disability Fund, with in.
terest as provided in section 841(a),
except that in lieu of such refund such
officer may, if he has at least 5 years of
service credit toward retirement under
this system, excluding military or naval
service. that is credited in accordance
with O c provisions of. sections 851 or
862(a), elect to receive retirement bene-
fits on reaching. the age. of sixty in
accordance with the provisions of section
821. In the event that an -officer
who was separated from classes 4 or 5
and who has elected to receive retire-
ment benefits dies before reaching the
age of sixty, his death shall be con-
sidered a-death-in service within the
moaning of section 832. In the event
that an officer who was separated
from classes 6 and 7 and who has
elected to receive retirement benefits
dies before reaching the age of sixty,
the total amount of his contributions -
made to the Foreign Service Retire-
ment and Disability Fund, with inter-
est as provided in section 841(a).
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 App9gved For Rglgj ,t 19 M8L2 hQ1 .f78-03721 A000400020007-7
Evicting legislation Proposed legislation
(c) Notwithstanding the provisions (c) Notwithstandir g the provisions
of section 3477 of the Revised Statutes, of section 3477 of the Revised Statutes,
as amended (31 U.S.C. 302) or the as amended (31 U. s.C. 302) or the
provisions of any other law, a Foreign provisions of any otl.er law, a Foreign
Service officer who is [retired] in ac- Service officer who is separated in ac-
cordance with the provisions of section cordance with the pr visions of section
633 shall have the right to assign to 633 shall have the right to assign to
any person or corporation the whole or any person or torpor ition the whole or
any part of the benefits receivable to any part of the benefits receivable to
trim pursuant to paragraph (b) (1) of him pursuant to paragraph (b) (1) of
this section. Any such assignment this section. Any such assignment shall
shall be on a form approved by the be on a form approved by the Secretary
Secretary of the Treasury and a copy of the Treasury an I a copy ? thereof
thereof shall be deposited.. with the. shall: he deposited with the Secretary
Secretary of the Treasury by the officer of the Treasury by the officer executing
executing the assignment. the assignment.
Subsection (b) (1) of section 634 is amended to authorize the Secretary in
special instances to accelerate or combine the "installments" Af the "severance"
payment of up to but not exceeding 1 year's salary, without interest, which is
authorized by this section. _ While the provision for paying this sum in three
equal installments on the first day of January following the officer's separation
and on the two anniversaries of this date immediately followi: ig usually is satis-
factory, there are circumstances when it is desirable to accelerate or combine the
payments in accordance with the needs of individual officers. The authority
herein provided will make it possible for the Secretary to exercise his discretion
in adjusting payments on an individual case basis.
Although the present provisions do not specifically state ghat the payments
made under authority of this. section shall be paid from the Foreign Service
retirement and disability fund, a decision by the Comptrcller General made
shortly after passage of the Foreign Service Act of 1946 has resulted in, the pay-
ments being made from that fund. This section as amendec. clearly authorizes
the use of the Foreign Service retirement and disability fund for this purpose.
Subsection (b) (2) of section 634 is amended to conform wi,h changes made-in
sections 841 and 881 which establish the computing of interest and the keeping
of records relating to the retirement fund on a calendar yea ? basis instead of a
existing language. Farther, this subsec-
uired b
y
fiscal year basis as is now req
tion has been revised to clarify requirements relating to prior service credit
governing an officer's entitlement to deferred annuity beiiefitn.
References to age "sixty-two" -throughout subsection (b) have been changed
to "sixty"to conform with other sections of this act.
PART 1)-SEPARATION OF ]~OREION SERVICE OFFICERS FuOM THE SERVICE
Existing legislation Proposed legislation
FOREICN SERVICE OFFICERS RETIRED FOREIGN SERVICE OFFICERS RETIRED
FROM CLASS 8 FROM CLASS 7 OR & .
SEC. 635. Any Foreign Service officer SEC. 635. Any Fc reign Service officer
in class 8 shall occupy probationary in class 7 who is appointed under the
status. The Secretary may terminate provisions of section 516(b) and any
his service at any time. Foreign Service. gf,:er in class 8 shall
occupy probationary status. _ The See-
retary may terminate his service at
any time.
The provisions of this section have been amended to provide for the proba-
tionary status of any Foreign Service officer of class 7 who is appointed under the
provisions of section 516(b) as well as any Foreign Service cflicer in class 8.
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
FOREIGN. SERVICE ACT AMENDMENTS 97
officer over forty-five years of age, sepa-
rated from the Service in accordance
with the provisions of paragraph (a)' of
this section, shall be retired upon an
annuity computed in accordance with
the provisions of section 821 but not in
excess of 25 per centum of his per an-
num salary at the time of his separa-
(c) Any Foreign Service officer under
forty-five years of age, separated from
the Service in accordance with the
provisions of paragraph (a) of this
section, shall at the time of separation
Proposed legislation
Sac. 637. (b) Any participant in the
Foreign Service Retirement and Disabil-
ity system separated under the provisions
of paragraph (a) of this section shall re-
ceive a refund of the contributions made to
the Foreign Service Retirement and Disa
bility Fund, with interest, as provided in
section 841(a) except that in lieu of such
refund such officer may, if he has at least
five years of service credit toward retire-
ment under this system, excluding mili-
tary or naval service that is credited in ac-
cordance with the provisions of section 851
or 852(a), elect to leave his contributions
in the Fund and receive an annuity, com-
puted as prescribed in section 821 com-
mencing at the age of sixty years. In the
event that an officer who has elected- under
the provisions of this section to receive a
deferred annuity dies before reaching the
age of sixty, his contributions to the Fund,
with interest, shall be paid in accordance
with the provisions of sections 841 and
881.
(c) Any officer or employee of the
Service who is not a participant in the
Foreign Service Retirement and Disa-
bility system shall be entitled only to such
benefits as shall accrue to him under the
retirement system in which he is a partici-
pant.
(d) Any payments made in accord-
ance with the provisions of this section
shall be made out of the Foreign Service
Retirement and Disability Fund.]
Paragraph (b) has been revised to provide that a participant separated from
the Service for cause may receive a refund of contributions to the Foreign Service
retirement and disability fund, with interest, or may elect in lieu of a refund of
such contributions to receive a deferred annuity payable when he reaches age 60.
This brings into line the retirement provisions relating to this section, retirement
provisions covering other types of separation from the Foreign Service. Under
present provisions relating to separation for cause, officers 45 years of age or over
who are separated for unsatisfactory -performance of duty are entitled to an
immediate annuity based upon their years of service, computed in accordance
with the provisions of section 821, but such annuity may not exceed 25-percent of
their basic per annum salary at the tithe of separation. Officers under 45 years
of age who are separated from the Service for unsatisfactory performance are
entitled to a payment of 1 year's salary or the refund of contributions made to
the Foreign Service retirement and disability fund, "whichever shall be greater.
Under present provisions officers separated for misconduct or malfeasance are
denied annuity benefits and are entitled only to a refund of contributions made
by them to the Foreign Service retirement and disability fund.
It is the Department's view that there should be no "penalty" clause relating
to retirement benefits when there is separation for cause. Further, it is the -
Department's view that an officer who has contributed to the retirement fund
and has served for a sufficient number of years (i.e., at, least 5 years of civilian
service) to qualify for a deferred annuity should not be denied the, benefits he
h
receive -a payment equal to one years
salary or the refund of the contributions
made by him to, the Foreign Service
Retirement and Disability Fund, which-
ever shall be greater.
ere ore s ou
has earned regardless of the reason for his separation, and that he t
have the choice of a refund of retirement contributions or a deferred annuity.
New paragraph (c) has been added to make clear that retirement benefits under
the Foreign Service retirement and disability system relating to separation for
cause,apply only to participants in that system. Other officers or employees of
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
98 FOREIGN SERVICE ACT AMENDMENT'S
the Service separated under the provisions of this section are rntitled only to such
benefits as shall accrue to them under any other retirement s;rstem in which they
are participants.
PART B--TRAVEL AND RELATED EXPENSIIS
Existing legislation Proposed !egislation
LOAN OF HOUSEHOLD EQUIPMENT
SEC. 912. The Secretary may, if he
shall find it in the interests of the Gov-
ernment to do so as a means ofeliminat-
ing transportation costs, provide officers
and employees of the Service with
household equipment for use on a loan
basis in personally owned or leased
residences.
LOAN OF HOUSEHOL.) FURNISHINGS AND
EQUIPMENT
SEC. 912. The Secretary may, if he
shall find it in the interests of the Gov-
ernment to do so as n means of eliminat-
ing transportation costs, provide officers
and employees of th, Service with basic
household furnishings and equipment
for use on a loan basis in personally
owned or leased residences.
The existing provision of section 912 authorizes the Se,,retary to provide
officersand employees of the Service with household equipment to use on a loan
basis in personally owned or leased residences as a means of eliminating trans-
portation costs. The language and the legislative history of this section does not
make entirely clear the Department's authority to provide basic articles of fur-
nishings such as divans, dining room furniture, etc., as distinguished from equip-
ment items such as "refrigerators" (the example used in the 11. Rept.2508, 79th
Cong., 2d sess., 'for "heavy articles: of household equipment"), which the Govern-
ment should lend instead of transporting as personal and household effects.
Experience has proved that it is in the interest of the Govern Went to establish a
clear legislative basis for providing basic furnishings in privately leased quarters
which would not he subject to any misinterpretation where such quarters and fur-
nishings are available. Savings in transportation costs resulting from the furnish-
ing of divans, dining room furniture, and other heavy furniture can equal or exceed
savings which result from the provision of such items as refrigerators, stoves, and
other appliances.
PART B-TRAVEL AND RELATED EXPENSE:;
Existing legislation Proposed h gislation
TRANSPORTATION OF [AUTOMOBILES]
SEC. 913. The Secretary may, not
withstanding the provisions of any other
law, transport for or on behalf of an offi-
cer or employee of the Service, 'a pri-
vately owned [automobile] in any case
where he shall determine that water,
rail, or air transportation of the [auto-
mobile] is necessary or expedient for
any part or of all the distance between
points of origin and destination,
TRANSPORTATION OF MOTOR VEHICLES
SEC. 913. The Secretary may, not
withstanding the provisions of-any.otber
law, transport for or on behalf of an offi-
cer or employee of idle Service, a pri-
vately owned motor vehicle or replacement
thereof in any case where he shall deter-
mine that water, rail, or air transporta-
tion of the motor vehicle or replacement
thereof is necessary or expedient for any
part or of all the dicta ace between points
of origin and destination.
The proposed amendment to section 913 substitutes "motor 'vehicles or replace-
ment thereof" for the word "automobile". It is necessary for Foreign Service
personnel to replace their motor vehicles from time to time, pe rticularly at posts
having adverse climatic and road conditions, in order to have adequate trans-
portation as well as to carry out their responsibilities as official representatives of
the U.S. Government.
There are occasions when conditions at oversea posts justify the use of motor
vehicles other than automobiles. Since the Comptroller General- has ruled that
the Department does not have authority to transport motor vehicles other than
automobiles, e.g., motorcycles and motor scooters, the use of the broader term
"motor vehicle" is suggested.
SEC. 10. (a) Paragraph (4) of section 104(a) of the Internal Revenue Code of
1954 (26 U.S.C. 104 (a)(4)) (relating-to the exclusion from gross income of com-
pensation for injuries and sickness) is hereby amended to read as follows:
"(4) amounts received as-a pension, annuity or similar allowance for
sonal 1r999/08/27aetIArR ~' 8e6 37240,M0400020007-7
Approved
 Approved For Release 1999/08/27 : CIA-RDP78-03721A0004009 0007-7
99-
FOREIGN SERVICE ACT AMENDMENTS
of any country or in the Coast and Geodetic Survey or the Public Health
Service, or as a disability annuity payable under the provisions of section
831 of the Foreign Service Act of 1946, as amended (22 U.S.C. 1081; 60
Stat. 1021)."
(b) (1) Section 402(a) of the Internal Revenue Code of 1954 (relating to the
taxability of a beneficiary of an employee's trust) is hereby amended as follows:
(a) By striking out in the first sentence of paragraph (1) thereof "paragraph
(2)" and inserting in lieu thereof "paragraphs (2) and (3) , and
(b) By redesignating paragraph (3) thereof as paragraph (4) and by inserting
after paragraph (2) thereof the following new paragraph:
"(3) The amount includible under this subsection is the gross income of
a nonresident alien individual with respect to a distribution made by the
United States in respect of services performed by an employee of the United
States shall not exceed an amount which bears the same ratio to the amount
includible in gross income without regard to this paragraph as the aggregate
compensation paid by the United States to such employee for such services
and includible in gross income under this subtitle or prior income tax laws
bears to the aggregate compensation paid by the United States to such
individual whether or not includible in gross income."
(2) Section 871 of the Internal- Revenue Code of 1954 (relating to the tax im-
posed on nonresident alien individuals) is hereby amended by striking out sub.
section (d) thereof and inserting in lieu thereof the following new subsection:
"(C) CROSS REFERENCE.-
(1) For doubling of tax on citizens of certain foreign countries, see section 891.
(2) For taxability of amounts paid by the United States to certain nonresident alien em-
ployees or their beneficiaries, see section 402(a) (3)."
Section 10(a) amends paragraph (4) of section 104(a) of the Internal
Revenue Code of 1954 to exempt disability annuities from Federal income tax.
This is in keeping with provisions relating to disability annuities payable by
the Federal Employees' Compensation Bureau. This proposed amendment
to the Internal Revenue Code has been approved by the Bureau of Internal
Revenue, Treasury Department.
Section 10(b) amends sections 402 and 871 of the Internal Revenue Code of
1954 to provide tax exemption for annuities paid to nonresident aliens who are
retired employees of American Government installations abroad and to de-
pendents of such aliens.
Under the Treasury Department's interpretation of the existing provisions
of the Internal: Revenue Code of 1954 the annuities paid under the Civil
Service Retirement and Disability system to nonresident aliens who are
retired employees of the United States Federal Government, have been sub-
ject to, a 30-percent withholding tax on the full amount of the annuity since
January 1952. The imposition of this 30-percent tax on annuities, many of
which amount to $600 or less per year, has caused severe hardship in many
cases and engenders resentment against the United States for its failure to
comply with its contractual obligation to pay retired employees the pension
they had been led to expect.
In a letter directed to the chairman of the House Committee on Ways and
Means, dated August 8, 1958, the statement waS made by the Treasury De-
partment that the 30-percent withholding rate on annuity payments to non-
resident aliens was not intended to apply to former employees of the United
States and that the Department of the Treasury was in favor of legislation
which would provide tax exemption for these annuitants. The amendment
to section 402(a) of the Internal Revenue Code of 1954 proposed in this
section is identical with that which the Treasury Department submitted to
the House Ways and Means Committee during the last session of Congress.
This draft amendment has been approved by the Bureau of the Budget, the
Civil Service Commission, and the Department of State. The Treasury
Department has indicated that in the interest of obtaining this remedial
legislation expeditiously, it does not object to the inclusion of this amendment
in this bill.
Senator MANSFIELD. Mr. Henderson you are also a witness on this
subject-the first witness.
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Appro j~d For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
FOREIGN -SERVICE . ACT AMENDMENTS
STATEMENT OF HON. LOY W. HENDERSON, DEPUTY UNDER
SECRETARY OF STATE FOR ADMINISTRATION AWA
Mr. HENDERSON. Mr. Chairman, I have here a f repared statement
which I might read. It will take probably 20 minutes to read it.
Would you prefer I submit this statement for the record?
Senator MANSFIELD. I would prefer, Mr. Secretary, that you go
through it and pick out the high spots because ] see that it is 18
pages long.
Mr. HENDERSON. If it is agreeable with you, I will submit it for the
record and then I will summarize it briefly for your benefit.
Senator MANSFIELD. Fine.
BILLS AND AMENDMENTS FAVORED BY STATE DEPARTMENT
Mr. HENDERSON. For a period of more than a year, the Depart-
ment of State has been studying the Foreign Servi,-e Act of 1946, as
amended, for the purpose of determining how th, Foreign Service
might be strengthened by the passage of further amendments to that
act.
In late December 1958 a draft bill was submitte3 to, the Congress
and was introduced by Senator Green on January 17, 1959, as S. 443.
Since that time the Department has prepared and obtained Bureau
of the Budget clearance on several additional and c.esirable proposed
changes in the Foreign Service Act which were intrc duced by Senator
Fulbright on June 23, 1959, as S. 2233.
In developing these amendments, the Department has borrowed
several proposals from the bill introduced as S. 1243 :)n March 2, 1959,
by Senator Saltonstall for himself and for Senator Mansfield.
We are most grateful to you, Mr. Chairman, and to Senator Salton
stall for your encouragement and assistance in our efforts to strengthen
the Foreign Service.
There is one proposal in S. 1243 which the Department would have
liked to have included in its proposed amendments to the Foreign
Service Act, but which we could not include only because of time
factors.
I refer to section 4 of S. 1243, which would authorize "special
monetary or other incentives to encourage ,Foreign Service personnel
to acquire or retain proficiency in foreign languages or special abilities
needed in the Service."
Senator MANSFIELD. Mr. Secretary, may I interrupt you to say we
are not conducting a hearing on S. 1243 this morning because we have
already had such a hearing.
Mr. HENDERSON. That is right.
Senator MANSFIELD. But your suggestion will be given every
consideration.
Mr. HENDERSON. Yes.
In S. 443 and S. 2233, the Department is suggesting a number of
amendments which, in its opinion, would be in th, interest of: in-
creasing the general effectiveness of the Foreign Service; providing
greater flexibility to the Secretary in the management of the Depart-
ment and of the Foreign Service, and in administerirg their personnel
programs; strengthening the training programs and otherwise raising
the qualifications of members of the Foreign Service; and consoli-
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
FOREIGN SERVICE ACT AMENDMENTS 101
dating the gains which have already been made as a result of the
Secretary's integration program.
Other suggested amendments would remedy certain deficiencies
in the retirement system. If adopted, certain staff personnel would
receive retirement benefits similar to those given members of the
Foreign Service Officer Corps, and surviving dependents of Foreign
Service personnel would be provided for in the manner similar to that
under which dependents are protected under other Federal retirement
systems.
STRENGTHENING OF STAFF CORPS
The first group of amendments relate to the strengthening of the
staff corps.
We are proposing amending section 415 so as to introduce a new
class structure of Foreign Service staff personnel which would have 10
classes instead of the 22 which it now has.
We believe that this would be a more logical arrangement. It
would still facilitate our management of the staff corps, and would
make a smooth flow of promotions.
This new structure would correspond to the new structure of the
Foreign Service Officer Corps which was provided for in legislation 2
years ago.
Senator MANSFIELD. Mr. Secretary, if I- may interrupt at this
point, I would like to say that this reformation in the staff corps is
long overdue, is it not?
You will recall that we have discussed this on occasion in the past 5
or 6 years.
Mr. HENDFRSON. Yes, sir. That is right.
Senator MANSFIELD. Is it your opinion that what the Department has
proposed will give greater stability and more opportunity for advance-
ment to the people in the staff corps-both those who will be coming
in and those who have been in for some years?
Mr. HENDERSON. That is right.
We feel it will assist greatly in stabilizing the staff corps, giving
.the members of the staff corps a feeling that they have some future,
and%that their promotions are being given in a more systematic manner.
INCLASS PROMOTIONS AND LATERAL ENTRY INTO STAFF CORPS
I may say that one feature of our amendments is a provision which
would give longevity pay increases to staff personnel.
We have not had; that feature before. It is in some of the civil
service provisions, and we would like to introduce that here.
There are certain occupational categories in the staff corps upon
which there axe classification ceilings. A longevity pay plan will
provide some incentive for personnel occupying positions in - these
categories.
We also have a provision that would provide for the recruitment
of staff corps at other than the minimum rates of each; class.
The present law makes it necessary for us to bring in new recruits
at the bottom of each class. I will not go into that in detail. I
think the proposal would.giveus more flexibility by making it possible
to take in new recruits at various steps in the appropriate classes.
Senator MANSFIELD. New personnel would be brought in laterally?
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
102 FOREIGN SERVICE ACT AMENDMENTS
Mr. HENDERSON. Yes, laterally,' at various steps in class.
Would you like to have me just touch briefly on each amendment
or treat them in a general way?
Senator MANSFIELD. I think you treat them f %irly specifically in
your statement, from what I have been able to read so far. So now
you may if you will, just treat them generally.
Mr. HENDERSON. All right, sir.
Senator MANSFIELD. We will have your complei;e statement in the
record which will give the details.
Mr. HENDERSON. The amendments would protiide for additional
salary increments in each class based on proficie;icy and length of
service. I have just mentioned that.
At the present time we have no authorization to hire members of
the Staff Corps on a temporary basis, such as we have in the Foreign
Service Reserve Corps. There are occasions when we would like to
hire staff personnel, say, for 2 years to do a specific job, and we would
like to have the authority to do that.
We. also would like to have the authority to bring in Staff Corps
personnel on a trial, or probationary, basis. We we uld like for their
first assignment to be, under regulations, for perhaps, 2 years.
If, during those 2 years-or whatever the perio I may be-they
would not live up to expectations they could be released without going
through the usual procedure for separation from tae Service. We
have that procedure at the present time in the Foreign Service Officer
Corps.
We also are suggesting amendments to provide for the separation of
staff personnel on the same basis as now provided for Foreign Service
officers in case they later do not live up to expectatio is.
BRINGING STAFF PERSONNEL UNDER FOREIGN SERVIOF RETIREMENT
SYSTEM
One important amendment would provide that Foreign Service Staff
personnel who have been in the Foreign Service for a period of 10 years
or more would come under the Foreign Service retirement and disa-
bility system rather than remain as they are under tie civil service
retirement system.
It is our belief that the Foreign Service retirement system can be
better adapted to the needs of the Staff Corps than the civil service
system.
That would mean that ordinarily members of the Staff Corps would
retire at 60 instead of at 70 as at present.
It would also mean that at the age of 50, after 20 years of service,
they could retire voluntarily.
'Senator MANSFIELD. Did you say that the Staff Ccrps personnel
cannot retire until they reach the age of 70?
Mr. HENDERSON. They can retire as in the civil service at the age
of 62 at the present time, and normally must retire at 70.
They can also retire somewhat earlier with certain reductions in
annuities.
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
103
Under the Foreign Service retirement system they can retire volun-
tarily after they are 50 years of age and been in the Service 20 years
and receive full annuity credit for their years in service.
We feel if a person has served many years abroad, he should have
the opportunity to retire when he reaches the age of 50.
Senator MANSFIELD. What is the mandatory retirement age in the
civil service?
Mr. HENDERSON. Seventy, with at least 15 years service, or upon
completion of 15 years service.
There are also a series of amendments which would provide greater
flexibility in managing the service and in recruiting and utilizing
foreign service personnel.
One of the amendments falling under this heading would, in accord
with the recommendations of the Wriston Committee, give the
Secretary authority to convert civil service positions in the Depart-
ment to Foreign Service positions and vice versa.
At the present time we have established what we call dual service
positions in the Department in which either a Foreign Service officer
or a civil servant can be the incumbent.
LATERAL ENTRY AND DIRECT APPOINTMENT TO CLASS 7 OF OFFICER
CORPS
Another amendment which we are proposing would remove the
presently existing numerical limitation upon lateral entry into the
Foreign Service Officer Corps.
We feel the numerical limitation is no longer necessary and that
we should have some discretion in deciding who should be brought
into the corps, and who should not be brought in.
Another amendment would permit the appointment to class 7 of a
limited number of persons who have qualified for FSO-8 appoint-
ment when age, experience, and other qualifications make such
higher level appointments appropriate. This provision is similar to
the one which was incorporated in the bill S. 1243.
EXTENDING SERVICE OF OFFICERS BEYOND RETIREMENT AGE AND
RECALLING RETIRED OFFICERS
Another amendment would authorize the Secretary, if he deter-
mined it to be in the public interest, to extend beyond retirement
age the service of officers who are approaching mandatory retirement,
and also to recall temporarily into service officers who have been
retired.
At present, the Secretary may extend the service of officers beyond
retirement age or he may recall retired officers only when he has
determined an emergency to exist.
The suggested use of the phrase "in the public interest" would give
the Secretary more discretion in utilizing the specialized skills of
experienced officers as the need for their services occurs.
Another amendment would permit the assignment of Foreign
Service personnel, without the loss of their Foreign Service status,
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
104 FOREIGN SERVICE ACT AMENDMENTS
to other governmental agencies and to international organizations or
commissions.
Another amendment would restore authority fo inclass promotions
for especially meritorious service.
This amendment is necessary in view of a determination by the
Comptroller General that authority of this nature, which the Secre-
tary formerly had, was made inoperative by the Incentive Awards
Act. .
SEPARATION FROM THE FOREIGN SERVICE
The proposed amendments would combine into one section of the
Foreign Service Act provisions governing separation for cause that
would be applicable to all employees of the For ;ign Service on a
uniform basis.
At the present time we have four different se -,tions relating to
separation from the service for cause. We feel this provision,would
be more just, and that it would also facilitate the process of the
separation. -
Proposed amendments relating to the Foreign Service Institute
would provide authority for dependents of Foreign Service personnel
to receive language orientation and other training at the Institute
when such training is in the interest of the Service.
Authority to employ persons who are noncitizens of the United
States, for use in specialized language and area training programs
when citizen instructors are not. available, would also be provided.
Another proposed amendment would extend the 3eriod of service
of Reserve. officers, the tenure of whom at present is limited to 5
years by another period up to an additional 5 years if the Secretary
determines that such extension would be in the publi-, interest.
There are certain technical reasons for this which I have touched
upon in my principal witness statement, so I shall nit go into them
at the present time unless you would like for me to d,) so.
Senator MANSFILED. Mr. Secretary, I have hero. a number of
questions. Rather than take up your time in this hearing, I will
give them to you and would appreciate receiving detailed answers
to each one, (See: p. 205, appendix II.)
Mr. HENDERSON. Yes, Sir.
Senator MANSFIELD. In this group I shall give yc u a copy of a
letter to take back with you to the Department, involving a person-
nel action by Mr. Hugh S. Cumming, Jr. I would lib e to have your
answers to two questions in the letter: One. Do you agree with the
judgment exercised by Mr. Cumming in this case? Arid, two, is this
case typical of the personnel policy of the Department in this regard?
I shall insert the letter in the record at this point and put your
answers in the record later.
(The letter referred to follows:)
Hon. Huali S. Cimuunc, Jr.,
Director for Intelligence and Research,
,WOODROw %rILSDN HALL,
February 18, 1959.
Department of State, Washington, D.C.
DEAR MR. AMBASSADOR; In a letter of February 11, Mr. Baltos, Pirector of
your Executive Staff, informed me that you would support a request of the
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
FOREIGN SERVICE ACT AMENDMENTS 105
Division of Research and Analysis for the Far East to recruit me as either a
Foreign Service Reserve officer, class 6, or a civil-service employee, GS-11, at an
annual salary of $7,030, and to assign me to the same position I was in when I
requested leave of absence to complete my Ph. D. I much appreciate your in-
terest and assistance in my desire to return to the Foreign Service, and I am
grateful for your helping to arrange this offer of employment.
After much deliberation I have decided, however, to take a combined teaching-
administrative job at Indiana University. Indiana now has one of the fastest
growing and most imaginative programs of Russian studies in the United States,
and within a few years I believe that it will be among the best and most productive
American centers for teaching and research on Russia and Eastern Europe. I an
pleased' to have an opportunity to participate in this development at Indiana,
and I look forward to returning to teaching and to my scholarly studies of Soviet
foreign policy and Russian history.
I regret very much not being able to reenter the Foreign Service, for I feel that
the challenges and satisfactions in such a career are very great. I believe, how-
ever, that I can make a contribution in academic life and that, for the moment
at least, it offers me greater freedom and more opportunities for the development
of my intellectual interests and previous training in Soviet affairs than does the
Foreign Service.
In any case, if I had decided to return to Government service, I would have
accepted a position at the GS-13 level offered me by another Government agency.
With four children, it would not be possible to make ends meet on the salary
offered me in DRF. While I realize that an officer- could hardly be rewarded
for having left the Service to complete his doctorate, I do not think that he should
be penalized, either. I would welcome an opnortunity to take up again research
and analysis on Indonesian affairs, -the job I occupiedat the time of my resigna-
tion, but I could hardly be expected: to return at exactly the same salary and
grade level I then commanded, in view of the additional training and experience
as a researcher, administrator, and student of diplomacy I have acquired in the
intervening 2 years. Moreover, if I were recruited without reference to my
prior grade in the Service, it seems probable that my training and experience
would qualify me for a GS-12 position.
It is, of course, unfortunate that I originally entered the Service somewhat
older and with more training and preparation than most beginning FSO's. I
have not lost hope, however, that some day the personnel policies of the Service
will adopt the widely accepted practice in most enterprises today of recognizing
and making allowance for comparable experience and accomplishment in other
organizations and fields of endeavor. - - -
After my return from the Soviet Union and -Western Europe in May, I hope
that Frisky and I can arrange a trip to Washington before we move to Indiana.
If so, we look forward to seeing you and- Mrs. Cumming then, -
Best wishes,
JOHN M. TnoMPsoN.
Cc: Joseph T. Bartos.
(The memorandum subsequently received from Mr. Henderson is
as follows:)
Before giving specific answers to the committee's direct questions on this
subject, I think it would be helpful to give a description of the events which
preceded Mr. Thompson's letter of February 18, 1059.
Mr. Thompson was appointed to the Foreign Service in June 1954 as an
FSO-6, lie was assigned to Djakarta later that same year, was converted to
class 7 with the- change in the FSO class structure in July 1956, and was pro-
moted to class 6 in January 1957. At the conclusion of his tour of duty in
Djakarta, Mr. Thompson was assigned to a vacant position in the Bureau of
Intelligence and Research a position in which his experience in Indonesia would
be extremely valuable and for which he was specifically requested by the Bureau.
Shortly after his return to the United States in early 1957, Mr. Thompson re-
quested leave without pay in order to complete his academic work for a Ph. D.
and to take advantage of a grant which had been offered him by the Joint Com-
mittee on Slavic Studies. After careful consideration of this request, the Depart-
ment decided that it could not be granted because no other officer was available
for the position to which he had been assigned, he already had an extensive
academic background in Soviet affairs and his thesis would not be of outstanding
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
FOREIGN SERVICE ACT AMENDMENTS
importance to the Department. The Department did i.ndertake to assure Mr.
Thompson that, when he could be replaced, a request for ;cave without pay might
Aft-
be given favorable consideration. Mr. Thompson then( upon decided to resign
from the Foreign Service.
In September 1958, Mr. Thompson called on the Deputy Assistant Secretary
for Personnel to discuss his interest in reinstatement in tie Foreign Service when
he completed his work for his Ph. D. degree in the spring of 1959. At that time,
Mr. Brown explained the possibility of his appointment as a Foreign Service
Reserve officer and ultimate lateral entry into the Foreig -i Service Officer Corps.
In December Mr. Thompson pursued the possibility of reinstatement in the
Department in discussions with officers of the Bureau of Intelligence and Re-
search. Consideration was given at that time by Mr. Cumming and other
officers of the Bureau to requesting the Department's Office of Personnel to
appoint Mr. Thompson as a Foreign Service Reserve officer to fill a vacancy in
the Bureau. It might be mentioned that this was at a i,ime when the Depart-
ment's financial situation was quite serious and almost no appointments to the
Reserve Corps were being made. The question of offerirg Mr. Thompson such
an appointment was kept very informal until Mr. Cummins; was able to determine -
whether there was sufficient need for his services to warra it outside recruitment.
Mr. Cumming decided in early February that from the point of view of his Bureau
there was a-need for an officer of Mr. Thompson's background and experience in
a vacant Foreign Service officer position at the class 6 leNci, a need sufficient to
warrant a recommendation to the Office of Personnel that Mr. Thompson be
appointed. This possibility was explained to Mr. Thompson who replied in his
letter of February 18, a copy of which the committee has.
Mr. Thompson's salary at the time of his resignation as an FSO-6 was $6,100
but if he had continued in his position classified at the GS-11 level, he would
9
have been paid at the rat
f $R
9
e o
0. With the pay increa.3e effective in 1958 the
'
position would carry a salary of $7,030 which was the rate: of the tentative offer
made to him
.
The first question posed by the committee is, "Do you agree with the judgment
exercised by Mr. Cumming in this case?"
It is presumed from reference to Mr. Thompson's letter that the matter of
"judgment" has to do with the level of the tentative offer in, We to Mr. Thompson.
My answer to this question is that in the circumstances I do agree that Mr.
Cumming's offer was an appropriate one. The vacancy f(.r which he was being
:considered was the only available one in the Bureau of Intc lligence and Research
which might warrant filling by recruitment from outside the Service and was at
the FSO-6/GS-11 level. On this ground then it would not cave been appropriate
for Mr. Cumming to have suggested consideration of him ar a higher level. It is
perhaps important to note that -Mr. Thompson has academic background and
qualifications for service in positions calling for special knowledge of Soviet
Russia and, because of his experience in the Service, for positions having to do with
Indonesia. The Service now has many officers at all levels qualified in the Soviet
field but relatively few officers who are expert in Indonesa.. If Mr. Thompson
had accepted Mr. Cumming's tentative offer the only justification for appointing
him as a Reserve officer would have been because of his valuable experience in
Indonesia.
The second question is, "Is this case typical of the per: onnel policies of the
Department in this re
a
d?"
g
r
I am not certain which policies are meant but I shall mention some policies and
practices which appear to be related. The Department's general policy with
respect to the appointment of Foreign Service Reserve officers has been implied
in the above. Briefly, the Department's policy is to fill 'Taeancies in Foreign
Service officer positions from within the Foreign Service, but if no Foreign Service
officer is available for a vacancy within a reasonable time, a person may, if funds
are available, be appointed in the Foreign Service Reserve -,o fill the position if
he has the special qualifications required. There was a nee d for a person with
Mr. Thompson's general ability and specific Indonesian experience in the Bureau
of Intelligence and Research at the FSO-6 level and Mr. Thompson's appoint-
ment might have been justified in spite of our tight budgetaiy situation.
The question also implies that the Department as a ger oral rule disregards
added maturity, qualifications and experience gained by a f :)rmer officer during
his absence from the Department. In this connection, let us i,ssume Mr. Thomp-
son had decided to remain in the Service in 1957 and accept his assignment to the
position in the Bureau of Intelligence and Research. It is po3sible that he would
have earned a promotion to class 5 after 2 years. If his request for leave without
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Relep&Ii1999/08/ 7AC CIAO-RDP788-03721AO0o0400020007-7
pay had been granted, however, he could not have earned ca promotion since the
selection boards would have had no record of performance covering the period
since his last promotion in 1957. Does he suggest that, by obtaining a Ph.. D.
and gaining certain experience outside the Department, he should have been
promoted in competition with his colleagues whose experience in the Service was of
more direct benefit to the Department?
I do not understand Mr. Thompson's reference to being penalized for having
left the Service to complete work toward his doctorate. In spite of the Depart-
ment's genuine need for his services, Mr. Thompson chose to resign in 1957 when
his personal Wishes could not be immediately satisfied. In the Department's
view he had no right to reinstatement at any level; the question of reappointment
would have to be considered, as it was, on its own merits at the time in relation to
the needs of the Department.
Mr. Thompson referred also to personnel policies of the Department which in
his view should "adopt the widely accepted practice in most enterprises today of
recognizing and making allowance for comparable experience and accomplishment
in other organizations and fields of endeavor." Mr. Thompson was 28 years and
3 months old at the time of appointment, had an AB and MA and had taught at
Rutgers and Columbia. The committee is aware of the Department's support of
the pending amendment which would permit appointment at the class 7 level in
certain cases. However, it is interesting to note that the average age of FSO-8's
at the time of appointment is 26 years and 3 months. Of a representative sample
of 265 FSO-8's now on the rolls of the Department, 81 have done some graduate
work without obtaining a degree and 86 have earned M. A.'s or higher, including
Ph. D.'s and LL.B.'s. It is therefore true that at the time of his entrance into
the Service Mr. Thompson was somewhat older than the average age of beginning
officers but it is not true that his academic attainments and work experience were
very unusual.
Senator MANSFIELD. Mr. Henderson, do you have anything
further to say on these two bills?
I note you have Mr. Aaron Brown, and Mr. William Woodyear
with: you. Do they have any testimony to give?
Mr. HENDERSON. No.
(The prepared statement of Mr. Henderson follows:)
BY HoN. Loy W. HENDERSON] DEPUTY UNDER SECRETARY OF STATE FOR
ADMINISTRATION
Mr. Chairman, I am glad to have the opportunity to appear before this
committee again in support of further legislative improvements in the Foreign
Service Act of 1946. As I am sure you are aware, the continued and constructive
interest of the committee in the problems and needs of the Foreign Service is
greatly appreciated.
For a period of more than a year the Department of State has been studying
the Foreign Service Act of 1946, as amended, for the purpose of determining
how the Foreign Service might be strengthened by the passage of further amend-
ments to that act. In; late December 1958, a draft bill (the Foreign Service Act
Amendments of 1959) was submitted to the Congress and was introduced by
Senator Green on January 17, 1959, as S. 443. Since that time the Department
has prepared and obtained Bureau of the Budget clearance on several additional
and desirable proposed changes in the Foreign Service Act which were introduced
by Senator Fulbright on June 23, 1959, as S. 2233:
DEPARTMENT OF STATE STRESSES NEED FOR PROVISION IN S. 1243 TO ESTABLISH
STANDARDS OF LANGUAGE PROFICIENCY
In developing these amendments, the Department has "borrowed" several
proposals from the bill introduced as S. 1243 on March 2, 1959 by Senator Salton-
stall for himself and for Senator Mansfield. We are most grateful, Mr. Chairman,
to you and Senator Saltonstall for your encouragement and assistance in strength-
ening the Foreign Service.
There is one proposal made in S. 1243 which the Department would have liked
to include in its proposed amendments to the Foreign Service Act, but which we
could not include only because of timing factors. I refer to section 4 of S. 1243
which would authorize "special monetary or other incentives to encourage Foreign
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
108 FOREIGN SERVICE ACT AMETTDMENTS
Service personnel to acquire or retain proficiency in foreign languages or special
abilities needed in the Service." We believe this would be a very desirable amend-
ment to the Foreign Service Act.
GENERAL PURPOSES OF S. 443 AND S. 2233
In. S. 443 and S. 2233, the Department is suggesting a number of amendments
which in its opinion would be in the interest of: increasing the general effectiveness
of the Foreign Service; providing greater flexibility tc the Secretary in the manage-
ment of the Department and of the Foreign Service and in administering their
personnel programs; strengthening the training pre grams and otherwise raising
the qualifications of members of the Foreign Service ; and consolidating the gains
which have already been made as a result of the Secretary's integration program.
Other suggested amendments would remedy certain deficiencies in the retirement
system. If adopted, certain staff personnel would receive retirement benefits
similar to those given members of the Foreign Servic; Officer Corps, and surviving
dependents of Foreign Service personnel would be provided for in a manner similar
to that under which dependents are protected under other Federal retirement
systems.
For the purpose of presenting the proposed amendments and indicating their
effect on the Foreign Service, it may be helpful if [ group them in four general
categories.
STRENGTHENING OF STAFF ~,ORPS
The first of these categories covers amendment 3 that would strengthen the
Staff Corps. It will be recalled that one of the recommendations of the Wriston
committee was that Staff officer positions, with the exception of a limited number
of highly technical positions, should be converted into Foreign Service officer
positions and that the current incumbents of Staff c.fl'icer positions, unless unable
to meet certain established standards, should be of'ered commissions as Foreign
Service officers. This recommendation has been carried out with the result that
opportunity for advancement in the Staff Corps has been severely limited because
of the relatively small number of high level positions now remaining in the corps.
Since work performed by staff personnel is essential to the effectiveness of the
Foreign Service, it is desirable that staff personnel have designed for them a
program that will assure the recruitment and rd f ention of persons possessing
appropriate qualifications and that will irsure the maintenance of high morale
in the Staff Corps. Among the amendments proposed are several which, it is
hoped, will strengthen the Staff Corps and will give added incentive to young
men and young women seeking careers in the Foreign Service Staff Corps.
THE 1Q-CLASS STRUCTURE RECOMMENDED
The new 10-class salary structure recommended! by the Department for the
Staff Corps would provide significant improvements in the Foreign Service Staff
Corps salary schedule. The structure of the Foreign Service officer schedule
was modified in 1956 to provide basic improvements in accordance with the
needs of the Service. At that time the personnel integration program was under-
way and it was not possible to determine clearly the future needs of the Foreign
Service Staff Corps. The proposed new class and salary schedule for the Staff
Corps is specifically designed to provide a more a lequate promotion ladder for
ladder for these employees, including equitable avid appropriate salary adjust-
ments when promotions to the next higher class are awarded. The proposed,
10-class schedule has several other features:
(a) The rates of the top three Foreign Service Staff classes are the same as the
rates contained in classes 3, 4, and 5, respectively, of the Foreign Service officer
schedule. This provides equitable treatment for personnel serving at similar
levels and will facilitate the conversion of Staff Corps personnel at these levels
who may qualify in the future for lateral entry into the Foreign Service Officer
Corps.
(b) It consolidates overlapping classes, eliminated overlapping at the top levels,
and improves the step-rate increment plan.
(c) It provides for consolidation of the present 2.I-class structure into a 10-class
structure with the result that the lower classes (14 through 22) that are not being
used are eliminated.
(d) It provides that with the exception of classes 1 and 2 all staff personnel will
be adjusted to class number designations higher than those held under the present
schedule.
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
FOREIGN SERVICE ACT AMENDMENTS 109
OTHER BENEFITS FOR STAFF CORPS
The proposed amendments would also make it possible to bring personnel into
the Staff Corps in any salary rate of a given class which might be appropriate
on the basis of former experience and earning levels; they would provide for in-step
promotions in the Staff Corps on the basis of merit;.they would provide for addi-
tional salary increments within each class based on proficiency and length of
service; they would make it possible for members of the Staff Corps to be ap-
pointed to temporary, limited, or permanent positions and for the establishment
of probationary periods for such appointees; they would provide for the separation
of staff personnel on the same basis as is now provided for Foreign Service officers;
and they would provide that certain members of the Staff Corps would become
participants in the Foreign Service retirement and disability system.
GREATER FLEXIBILITY IN MANAGING THE SERVICE AND IN RECRUITING AND UTILIZING
CE PERSONNEL
FOREIGN SERVI
This group of amendments would clarify certain existing provisions of the act,
make possible greater flexibility in managing the Service, and provide the Depart-
ment with more leeway in recruiting and utilizing Foreign Service personnel.
One of the: amendments would, in accord with the recommendations of the
Wriston Committee, give the Secretary authority to convert civil service positions
in the Department to Foreign Service positions and vice versa. As the needs
of the Service change to meet new conditions, situations develop from time to
time which require that certain classified civil service positions in the Depart-
ment he changed to Foreign Service positions or that Foreign Service positions
be reconverted to civil service positions.
In order that the Department may have more freedom in selecting persons who
through previous governmental service and background have developed certain
specialties urgently needed in the Service, one of the amendments provides for the
removal of the presently existing numerical limitation upon lateral entry into the
Foreign Service Officer Corps. It is not the intention of the Department to weaken
the career principles which must be maintained if there is to be a highly efficient
professional Foreign Service. Nevertheless, the Department should be able to
recruit especially well qualified and needed personnel laterally from other agencies
of the Government without being restricted in such recruitment by numerical
limitations. A proposed amendment would also permit the direct appointment to
class 7 of a limited number of persons who have qualified for FSO-8 appointment
when age, experience, and other qualifications make such higher level appoint-
ments appropriate.
EXTENDING RETIREMENT AGE AND TEMPORARY RECALL OF RETIRED OFFICERS
Other amendments under consideration would authorize the Secretary, if he
determined it to be in the public interest, to extend beyond retirement age the
service of officers who are approaching mandatory retirement and also to recall
temporarily into service officers who have been retired. At present, the Secretary
may extend the service of officers beyond retirement age or he may recall retired
officers only when-he has determined "an emergency to exist." The suggested
use of the phrase, "in the public interest," would give the Secretary more discretion
in utilizing the specialized skills of experienced officers as the need for their services.
occurs. It is not the intention of the Department to extend the service of officers
beyond retirement age or to recall retired officers into the Service except under
unusual conditions. Experience has demonstrated, however, that it would be in
the public interest, from time to time, even though no emergency exists, if officers
of particular value in certain positions could be retained beyond retirement age or
if retired officers could be recalled to active duty to perform specific tasks.
ASSIGNMENT OF FOREIGN SERVICE PERSONNEL TO OTHER AGENCIES WITHOUT LOSS
OF FOREIGN SERVICE STATUS
Another proposed amendment would permit the assignment of Foreign Service
personnel, without the loss of their Foreign Service status, to other Government
agencies and to international organizations or commissions. Under present
provisions, a Foreign Service officer may not serve as a Presidential appointee in
an agency other than the Department of State without retiring or resigning from
the Service. Furthermore, the Department has encountered certain difficulties
which this amendment would remove in assigning officers to international organi-
43120-89-S
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
110. FOREIGN SERVICE ACT AMENDMENTS
zations or commissions in which it is in the interest of he United States to have
representatives.
INSTEP PROMOTIONS AND SEPARATION FRO.F SERVICE
A proposed amendment to restore instep promotions within classes for especially
meritorious service is necessary in view of a determination by the Comptroller
General that authority of this nature which the Secretary formerly had was made
inoperative by the Incentive Awards Act. Cash awards' authorized by the In-
centive Awards Act are not as appropriate for career For,sign Service officers as are
meritorious inclass promotions.
The proposed amendments would combine into ono section of the Foreign
Service Act provisions governing separation for cause ghat would be applicable
to all employees of the Foreign Service on a uniform basis. Under the present
provisions separation for cause is covered in four separate sections of the act in
such a manner that there is. not equitable application of the provisions to all
categories of Foreign Service personnel.
FQREIGN SERVICE INSTITUTE AND TENURE OF RESERVE OFFICERS
Proposed amendments which relate to the Foreign Service Institute would
provide authority for dependents of Foreign Service personnel to receive language,
orientation, and other training at the institute when such training is in the interest
of the Service. Authority to employ persons who are noncitizens of the United
States for use in specialized language and area training programs when citizen
instructors are not available would also be provided.
Under the proposed amendments, it would be possible in special circumstances
for the Secretary to extend the period of service of Reserve officers, the tenure of
whom at present is limited to 5 years. This authority is needed by the Depart-
ment to provide for the continuation on the rolls of certain Foreign Service Reserve
officers whose positions together with certain functions ha re been transferred from
ICA to the regular operations of the Department. Many of these officers ap-
pointed under this special authority available to ICA, w:tlr no limitation on the
term of their service as Foreign Service Reserve officers, have now served in
excess of 5 years, yet they must be continued in their same capacity for several
more years because of the program responsibilities which have been transferred
to the Department. This provision will also enable the secretary to extend the
tour of duty of a Reserve officer for an additional period not in excess of 5 years
if such officer is performing work of a character particularl- valuable to an agency
of the Government other than the Department of Stat ~, if the head of that
agency should request such an extension.
DISCONTINUANCE OF SALARY DIFFERENTIAL FOR CIVIL SERVICE EMPLOYEES IN
FOREIGN SERVICE
At the present time, a number of Foreign Service officers are assigned to posi-
tions in the Department, which are classified under civil service at rates of pay
higher than the Foreign Service officer's salary. Under present provisions such
officers now receive differentials to cover the differences between their salaries and
those of the civil service positions to which they are assigned. One of the pro-
posed amendments would eliminate this salary differentif,l. It is believed that
with the integrated departmental and Foreign Service program now in effect and
the resultant rotation of Foreign Service officers between field posts and the
Department on a regular basis, there is no justification for tie continuance of these
differential payments. Foreign Service officers assigned to overseas posts do not
receive a differential regardless of the nature of their assign ments and it is not the
Department's intention to continue to pay salary differentials when such officers
are assigned to Foreign Service officer positions in the Dep irtment.
IMPROVEMENTS IN THE RETIREMENT SYSTEM
The proposed amendments include a number of changes in title VIII of the
Foreign Service Act which, as you know, relates to the For( ign Service retirement
and disability system.
During the 12 years since the passage of the Foreign Ser lice Act of 1946, there
have been substantial improvements in the provisions of other Federal retirement
systems
s sterns which have not been reflected in similar improvements in the Foreign
now is in need of major changes if it As is a result of to provide eqi Ethe F quitable oannuit es for
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
FOREIGN SERVICE ACT AMENDMENTS 111
Foreign Service officers and their surviving dependents. Among the proposed
improvements in the Foreign Service retirement and disability system are: A pro-
vision I have already mentioned which will include certain Staff officers and
employees in the system; liberalization and clarification of provisions relating to
the computation of annuities and survivorship benefits which will bring the Foreign
.Service system in line with other Federal retirement systems; clarification of the
provisions relating to retirement for disability and to the reinstatement of recov-
ered disability annuitants; and clarification of the provisions relating to death in
service. Further proposed amendments to title VIII will provide discontinued
service annuities similar to those of other Federal retirement systems; an increase
in the rate of participant contributions to the Foreign Service retirement and
disability fund from 5 percent to 6Y2 percent of basic salary, and a number of other
clarifying and simplifying changes.
Also recommended are a number of miscellaneous amendments which, if
adopted, would strengthen and improve the administration of the Service.
These include proposals to clarify and simplify provisions for the establishment
of compensation plans for local (alien) employees and to provide for the use of
these provisions by other departments and agencies of the Government author-
ized to administer local (alien) employee programs; to grant couriers, in view of
the hazardous nature of their assignments, a salary differential of up to 15 percent
of their basic pay; to clarify provisions relating to the selection out of Foreign
Service officers in classes 4, 5, 6, and 7; to further clarify and simplify provisions
relating to separation for cause; to clarify provisions relating to the furnishing of
household equipment in order to effect economy in transportation costs; and to
clarify provisions relating to the transportation and replacement of motor vehicles.
With the approval of the Treasury Department, we are also including among
our miscellaneous proposals. two amendments, to the Internal Revenue Code of
1954 which are of great importance to the Department. One will exempt from
income:. tax liability annuities paid to participants., in. the Foreign Service retire-
ment and disability system who are retired for disability. The other is a change in
the Internal Revenue Code which will solve a very serious problem relating to the
annuities paid nonresident aliens who are retired employees of the U.S. Govern-
ment. The majority of these retired local nationals of other countries who have
served the U.S. Government loyally and well, over periods of many years, have
been retired on annuities which amount to only a few hundred dollars per year.
These annuities have come to be considered a contractual obligation of the United
States which many pensioned employees, after having made contributions to the
civil service retirement fund during the years of their employment, count on to
provide for them in their old age. However, on the basis of a Treasury Depart-
ment interpretation of existing provisions of the Internal Revenue Code, these
annuities have since January 1952 been subject to a 30-percent withholding tax
on the full amount of the annuity. This has caused` severe hardship in many cases
and has reflected unfavorably upon the United States as an employer.
While affected alien annuitants can be found in limited numbers throughout
the world, it is significant that a great majority of those affected (approximately
3,000) are in the Philippines. These annuitants considered themselves American
citizen employees of the U.S. Government while the Philippines were a possession
of the United States. They lost their American nationality when independent
status was given to the Philippines. Now being considered alien employees,
they have had their annuities reduced by one-third. This has been the subject
of protests from the Philippine Government to the U.S. Government each year
since the imposition of this 30 percent tax. The Treasury Department now
agrees that the tax should not be applied to the annuities of aliens who were
former employees of the United States. The draft amendment to the Internal
Revenue Code has the approval of the Civil Service Commission as well as that
of the Treasury Department and the Department of State.
This concludes my statement concerning 5.,443 and S. 2233. Members of my
staff and I are at your disposal to discuss individual proposed amendments and to
supply you with any background data or supplementary information you may
need.
I do not know how you desire to proceed, Mr. Chairman. If you wish me at
this time to comment also on S. 1243, I would like to offer for the record a copy
of my statement made at the committee's hearing on this bill held April 16, 1959.
If, however, you wish to take up S. 1243 as a separate item, I shall be glad to
hold the statement until the appropriate time.
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
112 FOREIGN SERVICE ACT AMENDM:INTS
CREATION OF OFFICE OF UNDER SECRETARY OF STATE FOR WESTERN
HEMISPHERE AFFAIRS
Senator MANSFIELD. We will next turn to S. 106, a bill by Senator
Smathers to authorize an Under Secretary of State for Western
Hemisphere Affairs.
(S. 106, together with executive branch commonts, follow:)
[S. 106, 86th Cong., 1st sess.]
A BILL To authorize an Under Secretary of State for Western Hemisphere Affairs
Be it enacted by the Senate and House of Representatives of the United States of
America in Congress assembled, That the Act of May 26, 1949, as amended (5
U.S.C. 151a-151c), relating to the organization of the Department of State, is
further amended as follows:
(1) In section 2, add the following new subsection:
"(c) There is hereby established in the Department of State the Office of the
Under Secretary of State for Western Hemisphere Affai:?s, which shall be filled
by appointment by the President, by and with the advice and consent of the
Senate. The Under Secretary of State for Western Hemisphere Affairs shall
receive compensation at the rate of $22,500 per year and s call perform such duties
as may be prescribed by the Secretary of State."
DEPARTMENT OF STATE,
Washinghn, February 18, 1959.
Hon. J. W. FULBRIGHT,
Chairman, Committee on Foreign Relations,
U.S. Senate.
DEAR SENATOR FULBRIGHT: The Department fully app roves of the basic intent
underlying S. 106 introduced by Senator Smathers on Jane: ary 9, 1959 to authorize
an Under Secretary of State for Western Hemisphere Affairs. Perhaps at no
time in our history has it been of greater importance to tl.e United States to con-
centrate on and improve our relations with our Hemisphere neighbors. The
Department of State seeks to improve the organizationa. as well as substantive
aspects of its relationships with nations of the Western Hemisphere and inter alia
is giving full consideration to the recommendations of th,, Milton S. Eisenhower
report.
While the creation of the new title and position of Under Secretary of State for
Western Hemisphere Affairs might contribute in certain re sects to the end which
is mutually desired, the Department.of State is of the opinion that the disadvan-
ta-es of such a title change outweigh the advantages. It would destroy the
existing pattern of organization of the Department by elevating above the Assist-
ant Secretary level one of the five treographic bureaus, thus violating the concept
of equality of areas advocated in Senator Smathers' spec h. It would have the
disadvanta ?e of adding one more Under Secretary of Stake position, all of which
now have functional not regional authority. In this co:inection, it is essential
to recognize that the Under Secretary and the Under secretary for Economic
Affairs, as well as the two Deputy Under Secretaries (P ilitical Affairs and Ad-
ministration), all share responsibilities for the major problems in our relations
with Western Hemisphere nations. It should not be considered, therefore, that
these problems receive only fifth-echelon attention and co isideration through the
Assistant Secretary for Inter-American Affairs.
Be assured that Senator Sm.athers' cogent assessment cf the sensitivity of and
importance of our problems with the Western Hemisphere finds no dissent within
the Department of State. We will continue to seek to improve by all substantive
means the conduct of our relations with the peoples of our own hemisphere.
The Department has been informed by the Bureau of tie Budget that there is
no objection to the submission of this report.
Sincerely yours,
WILLIAM B. MACOMBER, Jr.,
Assistant Secretary
(For the Actini; Secretary of State).
Senator MANSFIELD. Mr. Secretary, Senator Sinathers will submit
a letter in support of his measure at this time.
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Releaml1l9&9/ ?E:.( IiA RDP1r8 O3721A0004i020007-7
(The letter referred to follows:)
U.S. SENATE,
COMMITTEE ON FINANCE,
July Q, 1959.
Hon. MIKE MANSFIELD,
Chairman, Subcommittee on State Department Organization and Public Affairs,
Foreign Relations Committee, O.S. Senate, Washington, D.C.
DEAR MR. CHAIRMAN: Due principally to 'other official commitments I regret
it is not possible for me to personally appear before you and your subcommittee
in connection with the consideration of S. 106, a bill which I introduced on Janu-
ary 9 of this year, to authorize the appointment of an Under Secretary of State
for Western Hemisphere Affairs.
However, I am grateful for the opportunity afforded me to submit this state-
ment in lieu of my personal appearance.
We are all conscious of the turmoil that presently exists in Latin America today.
Hardly a day passes that the newspapers throughout the country fail to give some
mention of what appears to be a continuing deterioration of affairs.in this area,
with the inference, and I believe rightly so, that much of it is brought about as a
result of complacency on our part to give the forthright leadership required.
I have on numerous occasions pointed out that our attention is directed by
virtue of various emergencies in other areas of the world, and there has been a feel-
ing existing for too long a period of time that everything is well south of the border,
or at least not of sufficient magnitude as'to require major attention in connection
with the administration of our foreign policy. Of late, we are becoming more
conscious of the need for able and forthright leadership which our friends to the
south have been seeking and looking forward to us to furnish. The seeds of
discord provide a fertile field for the Soviet economic offensive which is gaining
momentum at a rapid pace in the area today. Where. the Communists were at
one time confined to and later driven from Guatemala, they now are gaining ground
throughout the entire Latin American area. The consequences of Soviet success
defy calculation. The danger is real. Inestimable. damage can result to our own
security and economy unless swift action is taken to cope with the situation
as it exists.
We must accept and successfully meet the Soviet challenge and assist our Latin
Amecrian neighbors. in their hour of need, or else be prepared to suffer thq copse
gquences.
On numerous occasions I have pointed out many things which we could do to
assist the area with the problems that beset `it. One of these is the pending pro-
posal to authorize the appointment of an Under Secretary of State for Western
Hemisphere Affairs. The creation of this new post would recognize, and give in-
stitutional expression to, an existing set of facts-namely, that American foreign
policy now is, and to an extent must be, so thoroughly preoccupied with the prob-
lems of the immediate present, that little attention is directed to less urgent
matters. This is true, even though in the long run the less urgent problems may
be the more crucial ones.
The change which would be brought about by my proposal may seem, out-
wardly, to he insignificant. But as a result of the foreign policy tendency which I
have outlined, and of what might otherwise be called the inevitable hot-spot
method, all of our officials in the Department of State are disposed to give priori-
ties to matters outside this hemisphere.
The bill is not intended as a criticism of the Department of State, or of the
Assistant Secretary of State. for Inter-American Affairs, but is meant to be a con-
structive proposal rooted in what I conceive to be an inescapable fact-namely,
that the present structure of the Department of State, given the situation of
worldwide attention anal recurrent cr,isus, leads, ineyii~ably to preoccupation with
immediate troubles and to neglect long-range needs.
All of us can agree that such a state of affairs is completely undesirable. Our
objective should be to secure an effective balance between a foreign policy shaped
to fit present problems and one adapted to future needs, as well.
Balance is needed; and it can be accomplished by the creation of the new post
of Under Secretary of State for Western Hemisphere Affairs, within the State
Department, in such a fashion as to give equal footing to officers charged with the
development of the two aspects of policy. It is my firm conviction that the crea-
tion of this new post must be accomplished only on the level of Under Secretary,
thus giving the two persons named to these offices equal access to the Secretary of
State, and, in the absence of the Secretary, equal access to the President of the
United States.
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 ApprovedkFpr Release f, 99/0> 2r1 A 721A000400020007-7
Many problems-all of them important-now exist between the United States
and its allies in the Western Hemisphere; and each of these problems is receiving
attention, although in varying degrees.
However, it is my judgment that all of these problems can be solved and a
longer step can be taken toward the establishment of a cooperative and happy
hemisphere if we recognize that the essential first step is the appointment of an
Under Secretary for the Western Hemisphere. To make this step is to let the
other peoples of this hemisphere know of the import ant position they occupy
in the minds of the people of the United States of America, their principal neighbor.
The purpose of this bill is to satisfy their justified lodging and desire for recog-
nition; it is to set in motion machinery which will reverse the policy of "Latin
America last," and will-as it properly should-put the Western Hemisphere first.
It is clear, beyond sensible doubt, that the importancE of these problems justifies
and, in fact, demands the creation in our Government of a position which will
enable an individual of ability to have the rank and the prestige of a position
which will enable him to go directly to the President of the United States, and
thus cut through redtape and delay which now separa;e the Assistant Secretary
in charge of the Inter-American affairs from the Secretary of State and the
President of the United States.
Unquestionably, the lack of rank, prestige, and influe ace of the existing position
of Assistant Secretary of Inter-American Affairs has n ade it difficult for anyone
who occupies that position to come to grips properly a id directly with the many
and varied problems which exist, and to solve them expeditiously and wisely.
The result has been, throughout the whole Wester:i Hemisphere, smoldering
fires, which from time to time erupt into bright flames. On such occasions, we
see the use, once again, of our "fire truck" foreign poll iy-when some of our top
officials rush in, and do their best to extinguish the flames, but leave the fire
smoldering.
Too long have the problems of the Western Hemisphere received onlyfifth-
echelon attention and consideration. To enable us to prevent neglect and post-
poned consideration of these problems while the Secretary of State and other
top-level officials look intently at flames-which may E,ppear to be burning more
brightly-in the Mideast and in other areas of the world, it is essential that we
insure the current consideration of Western Hemisphere problems at the level
their importance demands, by having them considered by one who will have the
prestige of the position of Under Secretary of State for Western Hemisphere
Affairs.
For these reasons, I believe it imperative that we give to Western Hemisphere
policy, not priority, but a greater measure of equality. I trust that our present
state of affairs in the area will serve as an adequate, sufficient, and timely warning
to all of us.
I sincerely trust that the subcommittee will act promptly and favorably on
S. 106. In so doing, an inestimable contribution will be made toward the develop-
ment of an effective and stabilized foreign policy.
I shall appreciate it if you will have this letter made s part of the record of your
hearings.
With kind regards, I am,
Sincerely yours,
GEORGE ~IMATRERS; U.S. Senator.
Senator MANSFIELD. Mr. Secretary, we will let you carry the ball
on the measure now before us.
STATEMENT OF HON. LOY W. HENDERSON, DEPUTY UNDER
SECRETARY OF STATE FOR ADMI FISTRATION
Mr. HENDERSON. Mr. Chairman, I have a. statement which I should
like to submit for the record, and if you wou] d permit me, I would
like to give, orally, a short statement.
Senator MANSFIELD. Fine.
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release 999/?82 ? GI4 M721A00040Q020007-7
ELEVATION OF ONE ASSISTANT SECRETARY TO UNDER SECRETARY WOULD
DIMINISH PRESTIGE OF OFFICE OF ASSISTANT SECRETARY
Mr. HENDERSON. I might say that there are five Assistant Secre-
taries of State in charge of extremely important geographical bureaus.
The elevation of any one of these Assistant Secretaries to an under-
secretaryship or to a deputy under secretaryship would tend to lower
the prestige of the rank of assistant secretary and thereby reduce the
effectiveness of other assistant secretaries.
The rank of an Assistant Secretary of State is traditionally; high.
He has a position at least as important as the positions of the chiefs
of our key diplomatic missions abroad. I personally am inclined to
believe that to describe the Assistant Secretary for Inter-American
Affairs as a "fifth-level figure" gives an incorrect picture of what his
true position is. As Assistant Secretary he has access to the Secre-
tary of State at any time. He may be and is in fact called upon
from time to time to attend conferences relating to the American
Republics in the White House. He frequently explains our policies
with regard to the American Republics and developments in that
area to congressional committees. A change of his title to that of
Under Secretary would not, in the opinion of the Department, facil-
iat, the conduct. of our. relations with the countries of this hemi-
sphere. Such a move would certainly distort the, organization of the
Department. It would disturb a balance which has been worked out
as a result of many years of experience.
IMPORTANCE OF WESTERN HEMISPHERE VIS-A-VIS OTHER GEOGRAPHICAL
AREAS
Senator MANSFIELD. Now, Mr. Secretary, how do you consider the
Western Hemisphere in relation to the other geographic areas?
Mr. HENDERSON. We consider the Western Hemisphere as ex-
tremely important. It is hard for me to make a comparison, to say
that, for instance, the Western Hemisphere is more important to the
United States than the continent of Europe.
I certainly think that it is just as important. At the present time,
Asia is also becoming increasingly important to us.
It would be very difficult to try to draw comparisons which would
indicate that one area of the world is, more important to us thanany
other area of the world.
Senator MANSFIELD. Let me put it this way: Do you think we
are paying more attention to other areas of the world and less attention
in comparison to Latin America?
Mr. HENDERSON. I think, at the present time, probably more
attention is being concentrated upon our problems arising from the
existence of an aggressive international communism than on problems
of any other character from any other factor.
Senator MANSFIELD. Where? What area are you referring to?
Mr. HENDERSON. International communism is busy in all areas
of the world.
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 ApprovecthDr Releasimfl 2?9/O&2[7E: ! A D8 r( 3721A000400020007-7
At the present time, of course, we are particularly preoccupied with
directing the administrative center of international communism, that
is, on the Soviet Union.
Senator MANSFIELD. Do you think international communism is a
danger in the Caribbean and in Latin America, particularly?
Mr. HENDEISON. It is a danger in all parts o' the world, but we are
making special efforts to deal with international communism in this
area. I can assure you that a-great deal of attention has been paid to
international Communist activities in the Carl bean.
Senator MANSFIELD. But haven't we been dealing with it in a more
intensive manner in every other region of the world, other than Latin
America, until comparatively recently?
Mr. HENDERSON. I think that probably ws have not, up until
recent years, given the attention to the inroad:, of international com-
munism in this hemisphere that we should have given.
HAS THE UNITED STATES TAKEN LATIN AMERICA FOR GRANTED?
Senator MANSFIELD. Would you say that we have been taking
Latin America for granted?
Mr. HENDERSON. Mr. Chairman, I am not it a position to answer
some of these questions, but I do not think we lave been taking Latin
America for granted.
Senator MANSFIELD. How does it happen, t1 en, that when a num-
ber of sudden outbreaks, take place at our own back door, in our own
hemisphere, we all of a sudden develop a real int? rest in Latin America?
We try to give added authority to the Organization of American
States; we are in the process of developing an Inter-American Bank;
we are paying more attention now to Latin America than we have
in the past; but only, in my opinion, because we have been forced to.
Unlike you, Mr. Secretary, I. can express a personal opinion and
get away with it-and I think that our chicke:is are coining home to
roost.
When we were in trouble, we turned to the Latin American States,
and they gave willingly and unstintingly of their resources to help us
in a conflict in which we were primarily engaged. They gave us. all
kinds of support and encouragement. But then when the conflict was
over-and this happened after both the Firs t and Second World
Wars-we seemed to turn elsewhere, and develt p a greater interest in
Europe, in Asia, and now in Africa. Our interest turns to Latin
America only when we are, in a sense, forced to turn to it because of
edents which have occurred down there wh:.ch might have been
circumvented had we watched our p's and-q's; and done the kind of
a job we should have with our hemispheric neighbors in the meantime.
SENATOR SMATHERS' ATTEMPTS TO STRENGTH r N INTER-AMERICAN
RELATIONS
. The Latin-American situation does worry me, and I can understand
Senator Smathers' desire to bring about a degree of added recognition
for all Latin America. I can understand and sympathize with his
desire to give added strength to the OAS threugh the creation of a
police force and a regional court of justice.
I would hope that these proposals made by Senator Smathers who,
I think, is our strongest Latin America man in the Senate, would `be
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release 1999/08/27: CIA-RDP78-03721A000400020007-7
FOREIGN SERVICE ACT AMENDMENTS 117
given the consideration due them by the Department of State. Such
due consideration would encourage Senator Smathers in what he has
been doing for so many years, and for which he has received so little
recognition.
Mr. I-IENDERSON. Mr. Chairman, could I say that we in the
Department have great respect for the views of Senator Smathers
with re ard,, particularly, to this hemisphere, and we certainly will
give and are giving careful consideration to the views which he may
express.
WAYS IN WHICH ADDED RECOGNITION COULD BE ACCORDED THE LATIN
AMERICAN REPUBLICS
Senator MANSFIELD. But you do not think it advisable that an
Under Secretary of State for Western Hemisphere Affairs be selected-
is that correct?
Mr. HENDERSON. We do not think it would be advisable, Mr.
Chairman.
We feel that there are other ways of giving more concentrated
attention to our problems in the Americas than by appointing an
Under Secretary for the Western Hemisphere.
Senator MANSFIELD. Mr. Secretary, would you furnish this com-
mittee a list of these other ways in which we can give added recognition
and prestige to Latin America in our relations with that.area?
Mr. HENDERSON. I.shall be glad to do so.
(The material subsequently supplied by Mr. Henderson is as
follows:)
%.r I believe, Mr. Chairman, that the record of the past several years will show no
lack of attention paid by high officials of this Government to our inter-American
relations. The President, the Vice President, the Secretary of State, and on
several occasions the Assistant Secretary of State for Inter-American Affairs
have visited the region. As you know, the President sent his brother, Dr. Milton
Eisenhower, on two factfinding and good-will missions to the area. There have
been in addition a number of inter-American meetings attended by other high
officials of this -Government, such as the Secretary of the Treasury, the Deputy
Under Secretary of State, and the President of the Export-Import Bank. The
United States was instrumental in obtaining the convocation of a special meeting
of the Presidents of the American Republics held in Panama in 1956. The
Committee of Presidential Representatives resulted, which, meeting over a period
of several months, made a number of significant recommendations for improving
the activities of the OAS and subordinate agencies to deal with growing social
and economical problems of the region. The record, therefore, will show, I
think, that high officials from the President down have in fact devoted a good deal
of attention and time to Latin America.
In addition, Mr. Chairman, it would be inaccurate in my opinion to conclude
that the United States has merely reacted to events in Latin America. May I
refer, as an example, to the tremendous problems of economic and social devel-
opment which have been of major current concern to our Latin American friends.
The Department noted the increasing economic stresses which developed in the
region in 1956 and 1957. Following the Buenos Aires Economic Conference in
1957-when it became clear that the worldwide break in basic commodity prices,
the business recession in this country, and other adverse factors were having a
damaging impact on the economies of many of the American Republics and on
their development programs-the Secretary of State, in January 1958, established
a departmental task force to undertake a basic policy review of our inter-American
economic relations. The recommendations resulting from, this policy review led
directly to such later measures as U.S. participation in the organization of a
regional development bank, participation in international commodity study
groups, increased support for sound regional market planning, and to other
similar . steps.
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release 1999/08/27: CIA-RDP78-03721A000400020007-7
118 FOREIGN SERVICE ACT AMENI)MENTS
High-level attention and preoccupation with these matters can be further
demonstrated by the support the United States has extended to the multilateral
effort to develop Latin America's economic potential, which has come to be known
as Operation Pan America. May I emphasize earl icularly the invitation ex-
tended by Secretary Dulles to the other American Foreign Ministers to meet in
Washington last September to discuss these problems, The result, as you know,
was the establishment of the Commic.ee of 21 and th, speeded-up negotiation of
a charter for the Inter-American Development Banls, I should also point out,
Mr. Chairman, that the Department of the Treasu y, the Development Loan
the Export-Import Bank and, other agencies of the Government have also
Fund
,
devoted high-priority time and attention to Latin American economic problems:
Similarly, the Department, during recent years, has given high priority to the
problems and the dangers posed by international communism in Latin America.
It was our concern on this score that led to our sponsorship of Resolution XXXII
adopted by the Ninth International Conference of American States at Caracas in
1954. This resolution, by which it was agreed that i iternational communism in
effect constituted intervention in the affairs of the A nerican Republics, laid the
groundwork for continuous cooperation among the American States on this prob-
lem. The United States has been in the forefront of the effort of all the American
Republics to counter the threats and dangers posed by international communism
and has sought in every appropriate way to help the other American States meet
the Communist threat.
The Department is, in short, acutely aware that Latin America is a dynamic
area, undergoing important changes and consequently experiencing serious
economic, political, and social stresses. We are equally aware of the need to
give our best effort and thought to meeting the problems this situation poses for
us, and consequently of the special place which Latin America necessarily holds
in our foreign relations.
I mentioned in my earlier testimony, Mr. Chairm.rn, that the administrative
step of establishing the position of Under Secretary of State for Inter-American
Affairs would not in my opinion necessarily meet th,~ objective of insuring con-
tinued focus and attention on this major sector of our international relations.
This proposal seems to misjudge the effectiveness of the present system, and
introduces the danger of prejudicing the overall effectiveness of the Department
by the creation of an imbalance in its organizational tstructure.
Precisely in order to meet the objective of continuous improvement in our
handling of Latin American matter, while at the sf.me time avoiding the dis-
advantages of the Under Secretaryship proposal, th, Department has adopted
or has under consideration the following specific measures:
1. In keeping with the recommendation of Dr. :Milton Eisenhower we are
taking steps to establish a National Advisory Committee on Inter-American
Affairs which will be composed of six outstanding leaders and experts on Latin
America from private life and which will- be chaired by the Secretary of State.
This committee will consider current and long-rang( problems in our relations
with Latin' America and make recommendations to the Secretary of State in
connection therewith. I am convinced that this committee will serve a very
helpful function both in terms of developing additional useful ideas with respect
to our inter-American relations and in promoting it wider understanding and
appreciation of these relations among the people of t its country.
2. Steps are being taken to implement a resolut .on recently passed by the
Council of the Organization of American States which requested that member
governments establish national commissions to disseminate and promote an
understanding of the principles of pan-Americanism and of the OAS and its
function. We propose a National Commission for the Organization of American
States, which would be comprised of a substantial number of national leaders,
such as educators, editors, writers, businessmen, ag.-iculture and labor leaders,
public officials, and prominent individuals from social and cultural institutions.
Its function would be to promote, with the advice and consultation of the Secre-
tary of State, a wider public understanding of pan-Americanism, the activities of
the OAS, and the social, cultural, and political life of the other nations of the
Americas by means of appropriate cultural, artistic, and scientific activities.
This, I believe, will provide a very effective means of giving added recognition
and prestige to Latin America. -
3. The executive branch, as you know, has requested appropriate legislation
from the Congress to permit the United States to parti;ipate in the Inter-American
Development Bank. The establishment of such a dank, - to which the United
States would contribute a substantial amount of I unds, represents. a definite
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release 1999/08/27 : CIA-RDP78-03721Aggg400020007-7
ACT AMENDMENTS
E
FOREIGN SERVIC
recognition of the special importance of Latin America and of pressing economic
needs in the area. In terms of this country's foreign economic policy, participa-
tion by this Government in this organization will provide a special focus for our
economic relations with Latin America and that region's economic problems.
4. In September 1958 the Department's Bureau of Inter-American Affairs was
reorganized to permit more efficient handling of the area's problems. The previ-
ous two geographic offices were expanded to four, which are now responsible for the
conduct of U.S. foreign relations with the 20 American Republics. the creation
-of the two additional offices was designed to enable each office director to concen-
trfite. to a greater extent,on his area, and to effect closer coordination between
Foreign Service posts and the Department on significant political, economic, and
consular activities.
5. A recent reorganization of the research areas of the Department will make it
possible for the Department to place greater emphasis on studies of the problems
of this hemisphere and particularly of the problems flowing from the activities
of international communism. Furthermore, the results of these studies will be
made available not only to our personnel engaged in work on the American
hemisphere, but to key personnel of the Department and of the Foreign Service as
a whole. We are also planning to devote more attention in the Foreign Service
Institute to matters relating to the American hemisphere. We are also making
strenuous efforts to raise the level of the language and other qualifications of our
personnel in the American Republics. Already, as a result of our efforts during
recent years, the majority of our key personnel in the American Republics speak
the language of the country.
I am convinced, Mr. Chairman, that these and other measures, which have been
taken or are planned, do indeed constitute an effective recognition of the special
importance to us of Latin. America and will add up to an increased effectiveness in
the handling of our relations with that area.
(The prepared statement of Mr. Henderson follows:)
STATEMENT BY HON. Loy W. HENDERSON, "DEPUTY UNDER SECRETARY OF
STATE FOR ADMINISTRATION, ON S. 106, To AUTHORIZE AN UNDER SECRETARY
OF STATE FOR WESTERN HEMISPHERE AFFAIRS
Mr. Chairman, the Department has carefully reviewed S. 106, the bill intro-
duced by Senator Smathers to authorize an Under Secretary of State for West-
ern Hemisphere Affairs.
We appreciate the basic purpose of this bill-to aid the U.S. Government and
the Department of State in particular in concentrating on and thereby improv-
ing its relations with the other nations of the Western Hemisphere. Perhaps
never before in our history have our relations with Canada or the nations to the
south of us been of such crucial importance.
We do not believe, however, that the specific organizational change which S. 106
seeks to
affirs and make in
fearht that it m ght even hamper our efforts in this regard.
EFFECTS OF CREATION OF OFFICE OF UNDER SECRETARY OF STATE FOR WESTERN
HEMISPHERE AFFAIRS
The establishment of the position and office of Under Secretary of State for
Western Hemisphere Affairs would have the following undesirable effects:
1. It would elevate one geographic region to an organizational level in the
Department above that accorded the other geographic regions. This would
violate the concept of equality of areas propounded by Senator Smathers in his
speech of August 16, 1958. The existing pattern of organization-each regional
bureau headed by an Assistant Secretary-facilitates a balanced consideration of
the political affairs of each of the major geographical divisions of the world.
2. The urisdictional boundary between an Under Secretary of State with regional
and other Under Secretaries and Deputy Under Secretaries of
responsibilities
State with worldwide responsibilities would be impossible to establish and might
well lead to duplication of effort and the necessity for burdensome clearance
procedures.
It is essential to recognize that when an Assistant Secretary of State in charge does of a geographic area works on the major problems of his area tae U rider Secretary,
ticipation with one or more of the following; The Secretary,
the Under. Secretary of State for Economic Affairs, or the two Deputy Under
Secretaries. These problems receive, therefore, first rather than "fifth echelon
attention and consideration."
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved Fgqtelease 199/08/27 : CIA-RDP78-03721A000400020007-7
OREIGN SERVICE, ACT AMANDMENTS
Several recent actions taken by our Governmen, offer tangible evidence of the
importance which we attach to our relations with the nations of the Western
Hemisphere. For example, the President in his message to the Congress on
May 11, 1959, urged prompt action by Congress -,o enable the United States to
join with other members of the Organization of American States in an Inter-
American Development Bank. This regional economic development institution
will provide for economic cooperation on a sound fir.ancial basis among the nations
of the Western Hemisphere.
In addition, we are taking steps to establish a National Advisory Committee
on Inter-American Affairs in accordance with the recommendation made by Dr.
Milton Eisenhower in his report to the President on United States-Latin American
relations. The Committee will review current pr)blems relating to all aspects
of our inter-American relations and will advise on -)olicies both intermediate and
long range.
These substantive actions by the Department indicate that we are acutely
aware of the sensitivity and importance of ourproblen is in the Western Hemispiere.
PROJECTION OF FOREIGN SERVICE B17ILDINGS PROGRAM
Senator MANSFIELD. Now. we will go on 0 the next measure before
us. S. 1044, introduced by Mr. Fulbright by request, is a bill to
amend the Foreign Service Buildings Act of 1926, as amended.
(S. 1044, together with executive branch (omments, follows:)
[S. 1044, 86th Cong., 1st sess,]
A BILL To amend the Foreign Service Buildings 2 et of 1926, as amended
Be it enacted by the Senate and House of Represenlatives of the United States of
America in Congress assembled, That section 4 of t?e Foreign Service Buildings
Act, 1926, as amended (22 U.S.C. 295), is amended by adding at the end thereof
the following new subsection:
"(c) For the purpose of carrying into effect the provisions. of this Act there is
hereby authorized to be appropriated, in addition tc amounts previously author-
ized, an amount not to exceed $100,000,000, of which 650,000,000 shall be available
exclusively for payments representing the value, in whole or in part, of property
or credits in accordance with the provisions of the Act of July 25, 1946 (60 Stat.
663). Sums appropriated pursuant to this authorisation shall remain available
until expended."
DEPARTMENT OF STATE,
Hon. RICHARD M. NIXON, Washington, February 3, 1959.
President of the Senate.
DEAR MR. VICE PRESIDENT: The Department st bmits and recommends for
your consideration the enclosed proposed legislation a vending the Foreign Service
Buildings Act, 1926 (22 U.S.C. 292-300).
Authorizations of appropriations to carry out the provisions of the Foreign
Service Buildings Act from 1926 to the present total $231,625,000, of which $200
million is authorized to be used exclusively for payments to agencies of the U.S.
Government for foreign credits and currencies. After the appropriation for the
current fiscal year, there remains an unappropriated balance of authorization of
$28,095,000, of which $27 234,000 is for the procuremi:nt of foreign currencies and
$861,000 is in dollar aut~rorization. These amounts will be reduced further by
the appropriation for the fiscal year which ends June 30, 1960.
Thus far, under its Foreign Service buildings program, the Department of State
has acquired residences, office buildings, and staff lousing valued in excess of
$158 million. Even so, many of the personnel at ove -seas posts are working and
living in accommodations far below the standards considered minimum in the
United States of America. In order to assess the total needs overseas, the Depart-
ment initiated a post-by-post survey of buildings requirements, and as a result of
this survey prepared a program to meet the basic re. uirernents. A copy of time
program is enclosed. It contemplates expenditure of an estimated $120 million
in the period from fiscal year 1961 through fiscal year 1965.
Acquisitions under the Foreign Service Buildings Aci; have been financed largely
through the use of foreign currencies and credits. : urplus property and lend-
lease credits have provided foreign currencies for a substantial portion of the
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release 1999/08/27 CIA-RDP78-03721A000400020007-7
FOREIG
N
SERVICE ACT AMENDMENTS 121
program. The use of these credits permitted the conversion of a portion
uof the
debts to tangible assets of lasting value. The disposal of surplus agricult-
re com
modities.authorized by'Public Law 480 currently is providing foreign currencies
useful in financing the buildings program.
There are, however, certain limitations to the use of foreign currencies and
credits. A substantial portion of them are held in countries where the need for
building facilities no longer is acute. Under regulations prescribed by the U.S.
'Treasury Department and placed in effect on December 1, 1953, all agencies of
the U.S. Government needing foreign exchange are required to purchase it from
U.S. Treasury holdings, and they may not purchase from external sources unless
the Treasury cannot supply the. kind of currency needed. Only a relatively small
number of foreign currencies are held by the Treasury in substantial amounts,
lative to overall U.S. needs, and this number is being reduced wherever possible
by evehange conversion of surplus he into currencies in demand.
Conversely, many of the Department's most urgent and compelling buildings
needs.are in countries= where credits, or local currencies in excess of current disburs-
ing requirements are not held by the United States. In addition, the buildings
program funds the maintenance and operating costs for owned and long-term
leased buildings of the Department of. State overseas, and a number of these
buildings are located in areas where no currency credits are available. U.S.
dollars must be expended to meet obligations in these circumstances. Conse-
quently, the dollar requirements have increased in recent years and probably will
continue to increase in the future.
The proposed amendment to section 4
ill
w
authorize additional appropriations
of $100 million of which $50 million is to be in foreign currency credit authoriza-
tion. A statement reflecting the authorizations and appropriations under the
Foreign Service Buildings Act is enclosed.
The Department of State has been informed by the Bureau of the Budget that
there,is no objection to the presentation to the Congress of the proposed legislation.
A. letter similar to this is being sent to the Speaker, of the House of Represent-
atives.
Sincerely yours,
Enclosures: Joan FOSTER DULLES.
1. Copy 'of draft bill (became S. 1044, see p. 120).
2. Copy of foreign buildings requirements, 1961-65, inclusive. (See p. 131.)
3. Copy of Department of State
uth
i
a
or
zations and appropriations for the
foreign buildings program. (See p..130.)
Senator MANSFIELD. Mr.. Secretary, do you want to start off on
this bill, or do you want Mr; William P. Hughes, the Director of the
Office of Foreign Buildings, to take the lead?
STATEMENT OF RON. LOY W: HENDERSON, DEPUTY UNDER
SECRETARY OF STATE FOR ADMINISTRATION, ACCOMPANIED
BY.:.,WILILIAM P. HUGHES, DIRECTOR, OFFICE' OF FOREIGN
BUILDINGS
Mr. HENDERSON. Mr. Chairman, could, I present my principal wit
ness statement together with the documents?
Senator MANSFIELD. Fine.
Mr. HENDERSON. At this point I believe that Mr. Hughes should
come up and join me.
Senator MANSFIELD. Mr. Hughes, will you please come up and .sit
with the Secretary?
Mr. HENDERSON. I believe my principal witness statement, to-
gether with the attachments to it, present most of the problems in a
rather clear form connected with this bill.
Mr. HUGHES. Mr. Chairman, with, your permission, I offer to the
committee a detailed statement on the projection of the buildings
N..w program, complete with a general statement and the supporting
schedules that show area by area and country by country as: we see
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
122 FOREIGN SERVICE ACT AM:7NDMENTS
our needs in the immediate years ahead. With your permission, I
shall be very happy to brief the statement in a simple summary.
The Department.. presents for your consideration, Mr. _Chairman,
an increase of $100 million in the authorization for the Foreign Service
building program.
The Foreign Service Buildings Act of 1926 authorized the' oversew
program of the Department of State.
The original act has been amended from time to time to accommo-
date the many special and unusual circumstances encountered in the
operation of the program overseas:
FOREIGN CURRENCY INCREMENT TO FOREIGN SERVICE BUILDINGS
PROGRAM
You will note that in addition to a U.S. dollar authorization, the
Congress included an authorization in foreign currencies first in 1946.
At that time, as a result of lend-lease, surplus property disposals, and
other agreements, this Government either owned or was owed sub-
stantial amounts of foreign currencies, an(['after careful consideration
the Congress recognized the building prog ram was one means of con-
verting these currencies into useful and lasting facilities to be used
by the diplomatic and consular establishments abroad.
The reasons for that decision are as vatic. today as they were in 1946.
While the properties we own throughou>> the world today are valued
in excess of $160 million, our expanded iesponsibilities impose ' addi.-
tional burdens on our present facilities b:7 creating demands for new
facilities in places where none has `existec. heretofore.
We are also mindful of the foreign ei rrency requirements of the
Department's international education exchange program.
An analysis of the requirements of this program and the building
program reveals no serious competition for limited local currency
resources.
As this committee knows, I an increasing proportion of the local
currencies used for the educational exchange program are obtained
under the provisions of Public Law 480.
I should like to emphasize that the building program has a signifi-
cant effect on the morale of our people abroad. In many remote and
difficult living areas the success of our various programs depends,, in
large measure, upon our physical plant, not alone for the physical
comforts but for the health and safety of tiese people assi ned;overseas.
Mr. Henderson and I are happy that we are able to present this
to you in detail, and I hope we shall be able to answer any question
which the committee may ask. -
Senator MANSFIELD. Mr. Hughes, how much money was authorized
in the act of 1946?
Mr. HUGHES. $125 million, Senator.
Senator MANSFIELD. In dollars?
Mr. HUGHES. No, sir; 15 million wa NIIkA000400Q20007-7
Reconciliation of major projects with FBO program summary for period of fiscal
years 1953-59
Foreign
exchange
plicable lines from table 2 summary:
A
195
185
3
799
$313
p
______________________________
Sites for construction
B1
$3,498,994
,
$
,
,
873
84
___
.
ment
velo
D
-------------------------------
B2
2,1&4,603
99,730
2,0
,
258
968
e
.
p
----------
struction
----------------------------
C
B3
43,509,243
37,540,985
,
5,
64
-------------
on
.
____________________________
acquisition
ert
P
5
2884,256
2,250,692
633, 5
230
_____
y
rop
B
.
_____________________________
rovements
ital im
C
B7
2:218,678
1,634,448
584,
5
608
___
p
.
ap
Special projects -------------------------------------..
B11
770,719
655,111
11
,
.
Projects:
4
648
800
46
291,682
38
8,357,118
)_________
Major projects accomplished, 1953-58 (table
rojected for 1959 (1960 budget)____________
ects
ro
M
,
,
4,765,000
,
4,065,000
700,000
214
3
ajor p
p
j
Minor projects and capital improvements-----------------
3,652,693
3,009,479
,
64
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Apprc d For ReI e4 9 1Z,7j RQW -03721A000400020007-7
Listing of major construction and acquisition projects during 6-year period, fiscal
years 1958-58
Capital
investment
1953-58
Africa (AF):
Belgian Congo:
Leopoldville OB--
D
$420
277
o SH -------------:
Ethi
i
,
54
503
op
-----------
a, Addis Ababa ------------------------ OB ext- --------
Gh
A
,
59
81
ana,
-----------
ccra ______________ ---------------------------- OB/SH
Liberia
Monrovia
,
7
448
62Z
,
_
_______ ---------------- OB/ER/SH-----? -----------
ib
a
T
i
lf
,
335
634
y
,
r
po
-------------------------
------------------ OB site ---------------------
Moroeco
,
150,219
Casablanca OB site--------
R
b
78
780
a
at ER
,
149
634
------------
Do OI1/SH site_ _ ___
T
,
257
022
angier OB/COR--------
L
,
884
40a
agos 0B - - - -------
T
-
,
442
42
-
unisia, Tunis OB
-- -----------
Uni
f S
,
4
417
705
on o
outh Africa, Capetown_______________________ ER
,
101, 450
Total AF
American Republics (ARA):
Argentina:
Buenos Aires___________ ---------------------------- Air AR
Do------
NAR
77,789
--- ----------------
Do
78883
----- ---------------------------------------- DCMR ----------
Brazll:
80,040
life de Janeiro ER
S
P
149
184
ao
aulo----- OB site
Ecu
d
i
,
389
101
a
or, Qu
to_____________________________ ________ OB----------- ------
El S
l
d
,
496
311
a
va
---
or San Salvador_---------------- OB site------- ------
Domi
i
k
,
85
850
n
can
---
epublic, Ciudad Trujillo___________________ ER
Guat
l
G
,
58
450
ema
a,
uatemala City --------- OB--- ?--------------
H
iti
P
,
179
325
a
,
------
ort-au-Prince_________________ ER ---
------------
Honduras
Tegucigal
a
,
88,581
,
p
__
OB/ER-------- ---
e
M
i
Me
i
749779
ex
x
co,
---
xragua
co Managua C[ty____________________________________ NAR - --
-
-
-
--
57,412
,
------------------------------------ OB/SH-------------
Parsgua
A
i
-
-
--
--
297
438
sunc
on
Y,
------------------------------------ 013/ER --------
P
,
796
513
---- -------
eru, Lima OB--------------
U
,
1
190
281
-?---------
ruguay, Montevideo OB site -----------
Venezuela:
,
,
200, 000
Caracas SOR sites -----
109
664
--------------
Do DCMR--------------------
,
82,000
Total ARA-----------
E
E
urope (
UR):
Austria:
Vienna---------------------- ----------- OB
95
987
Bel
ium
B
l
,
1
318,651
g
,
russe
s--------------------------------------- OB
Can ada:
Halifax C GR-------------
M
,
279,860
64
935
----------
ontreal OB---------------- -----
C
h
l
ki
-
,
328
585
zec
os
ova
-
-
a, Prague_________________________________ ER/SOR/SII_______________
D
k
C
119
373
:
enmar
,
openhagen__________________________________ OB ------------------------
England:
London OB/SII------------?------
Do E R
,
105, 773
768, 944
-- -----------
Do---------------- ------ ---------------------- OB (new)-----------
France?
317, 915
5,627 , 446
Le Havre-..----- -------------- OB/SH----------
166
990
-----------
Marseilles OB
Germany:
Dusseldorf --? OB
F
kf
,
118,136
530
853
ran
urt ------------------------------------------- CGR
II
b
,
71
429
am
urg-------- ---------------------------------- OB
,
505
510
Munich OB
,
960
210
Do CGR-------------
,
119
048
-- --------
Frankfurt OB
St
tt
t
,
1
045
051
u
gar
--------------------? ---------------------- OB
Icel
d
R
k
ik
,
,
606
606
an
,
jav
ey
--------------- ---------------------- SH site-------------- -------
Italy:
Genoa-------------------------------- ------------- CR./OB site ---------------
l
P
,
104, 358
145
280
--
a
ermo----------- C GR/O B site -------. _______
N
th
l
d
,
140
400
e
er
an
s, The Hague________________________________ OB-------------------------
N
O
l
,
1
165
810
orway,
s
o------------------------------------------- OB---------------
P
l
,
,
1
228
837
o
and, Warsaw--- ----------- OB/811 and site______ ______
i
S
M
,
,
176
813
_
pa
n,
adrid ----------------------------- OII
Sweden
Stockholm
,
521,352
,
_____________________________________ OB
Yugoslavia, Belgrade____________________________________ 511-----------------------
-
1,012,064
837
500
-
-
See footnote at end of table, p. 141.
,
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release 1 ,$1 $/&,vGlRcRDR7i8aDN~91A00040Q020007-7
Listing of major construction and acquisition projects during 6-year period, fiscal
years 1963-68-Continued
capital
investment
1953-68
Europe (BUR)-Continued
West Indies Federation:
Port of Spain----------------------------------------
Do----------------------------------------------
Far East (FE):
Hong Kong----------------------------------------------
Indonesia:
Djakarta--------------------------------------------
Do----------------------------------------------
Do----------------------------------------------
Medan----------------------------------------------
Japan:
Kobe------------------------------------------------
Nagoya----------------------------------------------
Korea, Seoul--------------------------------------------
Laos, Vientiane-----------------------------------------
Okinawa------------------------------------------------
Philippines:
Manila----------------------------------------------
Do----------------------------------------------
Do----------------------------------------------
Do---------------------------------- -----------
Thailand:
Bangkok--------------------------------------------
Do----------------------------------------------
Singapore-----------------------------------------------
Total FE----------------------------------------------
Near East and South Asia (NEA):
Aden----------------------------------------------------
Egypt, Cairo--------------------------------------------
India:
Now Delhi------------------------------------------
Bombay--------------------------------------------
Calcutta--------------------------------------------
Iran:
Teheran-------------------------------------?-------
Tabriz-----------------------------------------------
Iraq:
Baghdad--------------------------------------------
Basra---------------------------- -------------------
Pakistan, Karachi---------------------------------------
Saudi Arabia:
Jidda------------------------------------------------
Dhahran--------------------------------------------
Syria, Damasous--------------- -------------------------
Turkey:
Ankara ----------------------------------------------
Do----------------------------------------------
Istanbul-------- ------------------------------------
Recapitulation:
ARA---------------- -----------------------------------
EUR----------------------------------------------------
FE-----------------------------------------------------
NEA----------------------------- ----------------------
AF----------------------------------`-------------------
Total-----------------?--------------------------------
I Project symbols:
OB-office building.
E R-embassyresidence.
COR-consulate general residence.
S11-staff housing.
SOR-senior officer residence.
OB -------------------------
COR-----------------------
OB ------- -----------------
SOR------------------------
SH--------------------------
OB----------- -------------
OB/SH - - - ------------------
OB/SH---------------------
SII--------------------------
SII--------------------------
SII--------------------------
OB-------------------------
SH--------------------------
ER-------------------------
RPC------------------------
SII--------------------------
S OR-------------?---------
OB site---------------------
O B/C R/SH-----------------
OB-------------------------
OB/Sh, ER site -------------
OB/COR/SA_______________
OB site---------------------
OB, complete development--
OB/C R---------------------
OB/ER/SH-----------------
OB/SH---------------------
OB-------------------------
OB/E R/SH------------- ----
SH/O13 --------------------
OB-------------------------
OB-------------------------
EB-------------------------
OB-------------------------
------------------------------
-----------------------------
------------------------------
------------------------ ------
-------?----------------------
$116,867
95, 727
910,968
1,123, 377
152, 037
422, 307
111,628 592,273
404,151
916,427
162, 896
740,682
2,830,616
530,784
67,472
422,306
127,017
90,550
184,066
138,302
102,492
3,216,207
105,648
80,849
1.019, 322
56,315
2,123,301
265,064
1,187,028
496,953
73,000
148,503
104,517
73,684
54,779
5,166,601
18, 676, 210
9,779,456,
9,225,954
3,800, 579
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approyqgl For Relgg?9fG',99A(Q 2J CAI P,,7 -03721A000400020007-7
TABLE IV
DEPARTMENT OF STATE-ANALYSIS OF LOCAL CURRENC P AND U.S. DOLLAR
REQUIREMENTS OF THE PROPOSED FOREIGN BUILDINGS PROGRAM, 1961-65
Based on the re-uest for an increase of $100 million in the authorization for
appropriations to the Foreign Service buildings fund, S. 1044, the estimated re-
auirements of the foreign buildings program for new obligations during the period
1961--65 is $120 million, of which $60.1 million would bo financed from U.S.
Treasury holdings of foreign exchange and $59.9 million mould be required in
U.S. dollars, either to be spent as such or to he used to acquire needed foreign
exchange not available from the U.S. Treasury:
[In thousands of U.S. dollars]
Unappropriated balance of prior authorization L--------------
Estimate of proceeds of sale of properties----------------------
New authorization requested----------------------------------
Total---------------------------------------------------
10,095
9, 905
100,000
Foreign
exchange
10,095
0
50,000
0
9,905
50, 000
I Based on 1960 budget request of $18, 000,000, of which $17, 372, 000 was apps opriated.
Of these total requirements, $51.9 million is required for specific acquisition and
construction projects listed in the program, and $68.1 million is required for other
purposes, such as operation of buildings, furniture and furnishings, maintenance
and repair, architectural and engineering services, acquisition of housing for
Defense and Agriculture attaches, capital improvements, project supervision, and
program administration:
[In thousands of U.S. dollars]
Specific projects------------------------------------------
Other requirements -------------------------------------------
Total
51,000
68,100
Foreign
exchange
33,330
1 26, 765
18, 570
41,335
59,905
I These requirements cannot be distributed by country, but will be met on a worldwide basis by utiliz.
ing to the greatest practical degree the foreign exchange available in U.S. Treasury accounts at the time
the funds are disbursed.
Local currencies equivalent to $33,330,000 are requirec. to finance specific
projects in, 46 foreign countries, in 39 of which local currencies are used also to
finance binational educational exchange foundations authorized by Public Law
584, as amended. An analysis of the requirements of the two programs country
by country, however, reveals no serious competition for limited local currency
resources.
An increasing proportion of the local currencies used for the educational ex-
change program is obtained under the provisions of section 104(h) of Public Law
480. These currencies are not available to the buildings program, nor are the
local currency proceeds of sections 104 (e) and (g) loan repayments, which may be
used for educational exchange. In this regard, the Secreta 'y of State exercises
the authority to determine requirements for educational exchange programs
granted him by section 104(h), as amended, to assure priority for the establish-
ment or continuation of educational exchange programs.
Requirements and availabilities by country or groups of countries as set forth
on table IV-a are discussed below:
France and the overseas territories
Under the memorandum of understanding of May 28, 1946, regarding settlement
for lend-lease, reciprocal aid, surplus war property, and claims the United States
has the right to acquire (a) real property up to a total dollar value of $15 million
and (b) francs equivalent to $10 million to acquire or improve real property for
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release 1991. 1&75-~F~PPJ&Eq?ZOOO4OOO2~g9O7-7
U .S. Government use or to carry out educational exchange programs. No
property has been acquired under (a) above. Francs equivalent to $5,229,800
under (b) have been drawn or reserved for educational exchange in addition to
francs equivalent to $5 million allocated from interest paid in francs. An addi-
tional $3 million has been obtained under the provisions of section 104(h) of
Public Law 480.
Under (a) above buildings program requirements up to $15 million in France
and the overseas territories can be financed from resources available exclusively
for the buildings program. The 1961-65 requirements in this area total $4.6
million.
United Kingdom and colonies
The mutual aid settlement provided sterling equivalent to $50 million for the
buildings program and educational exchange. Public Law 584 limits the latter
to an aggregate of $20 million. After reserving the full amount authorized by
Public Law 584 for educational exchange, a balance of $9 million remains for the
buildings program. The 1961-65 requirements in this area total $3.9 million in
addition to $5.7 million in unliquidated commitments of the 1960 and prior
years' program. The excess of $0.6 million will be financed from sterling received
as interest on deposits, or from other current collections in sterlir g.
Other countries in which surplus property credits will finance continuation of the
educational exchange program
In Australia the funds available for educational exchange and the funds available
for the buildings program are held and invested in separate trust accounts by the
Australian Government.
In Burma, funds. have been reserved for a 15-year educational exchange program
from surplus property funds. In addition, $400,000 of Public Law 480 currencies
are to be used to supplement the existing program. An additional $786,000
remains in the surplus property indebtedness against $298,000 required by the
buildings program. The Treasury held Burmese currency equivalent to $366,000
on June 30, 1958, available for sale for appropriated dollars, and estimated an
excess of $3.5 million in kyat receipts and holdings against 1959 cash requirements.
Under the Public Law 480 agreements of February 8, 1956, and May 27, 1958,
.additional kyat equivalent to almost $4.5 million will be available for transfer to
Treasury sales account after July 1, 1958, under section 104(f).
In Belgium and New Zealand the entire balance of local currencies available
under the settlement agreements is reserved for educational exchange, and in the
Netherlands the amount still owed is adequate to continue the program at the
present level for many years. Belgium and the Netherlands are not represented
-among the specific projects of the 1961-65 buildings program, and the $50,000
required for the buildings program in New Zealand will be financed from consular
fees or other collections in local currency.
Of the $84.6 million owed by Germany for surplus property, $5 million is re-
served to finance the remaining 5 years of the 10-year Public Law 584 agreement.
Buildings program requirements. total $1.3 million.
While the, bilateral Public Law 584 agreements with Greece'. and Italy are for
less than the maximum authorized, 5-year extensions are being negotiated with
each, and fundsi-to finance the extensions have beery reserved.' In Italy, an ad-
ditional $300,000 in Public Law 480 currencies will be used. In the case of
Greece, the remaining balance owed on June 30, 1958, was $37 million against a
buildings program requirement of $1.2 million. In Italy, the availabilities
-exceed the $20 million maximum for educational exchange by over $73 million,
against buildings program requirements of approximately $1 million.
Funds have been reserved to finance in full the existing 12-year Public Law 584
agreement with Norway. This country is not represented in the specific, projects
listed in the 1961-65 building program, and the $1,180,000 required for the 1960
and prior years' program is to be financed from the lend-lease settlement in ac-
cordance with a supplementary bilateral agreement with the Norwegian
Government.
In China, both the educational exchange program and the surplus property
settlement are inactive, but if circumstances change, the program can he financed
in4he.maximum amount authorized by law.
Approved For Release 1999/08/27 : CIA-RDP78-03721AO00400020007-7
 Applg,yed For R pA9 J Q88g,7kQ1JA 78-03721 A000400020007-7
Countries in which currencies generated by Public Law 480 will finance the educa-
tional exchange program
In 29 other countries the Department finances or currentl:r plans to finance-
educational exchange from the proceeds of disposal of surplus agricultural prod-
ucts pursuant to section 104(h) of Public Law 490, as "amended: Current- Public
Law 584 bilateral agreements in these 29 countries will require: only $3.6 million
more in currencies required to be purchased from the Treasury with appropriated
dollars, all other requirements to be met with currencies obtained pursuant to the
Secretary's determination under section 104(h). Based on Public Law 480 agree-
ments signed through June 30, 1958, in these 29 countries loran funds available
under sections 104 (e) and (g) total $1.36 billion, or about 77 percent of the total
$1.55 billion throughout the world.
Five of these 29 countries are not represented in the specific projects set forth
in the 1961-65 requirements of the buildings program, and in the remaining 24
these requirements total about $18.3 million. An additional $13.8 million is
required for programs previously authorized. To cover both these requirements,
there were currencies equivalent to $70 million held in cash by the U.S. Treasury
in 20 countries, representing 85 percent of the total holdings o' foreign exchange
available for purchase with appropriated dollars. In addition, there is a potential
$275 million more which may become available for purchase through Treasury
amounts pursuant to section 104(f) of Public Law 480.
These 29 countries, 'together with France and the overseas territories, United
Kingdom and colonies,. Australia, Burma, Belgium, -Germar:y, Greece, Italy,
Netherlands, New Zealand, and Norway, discussed in preceding sections, cover
$28.8 million, or 86 percent of the $33.3 million set forth for specific projects in the
1961-65 buildings program; and $25.5 million, or 79 percent of the total prior
years' requirements; a total of $54 million, or 83 percent of th-, total identifiable
foreign exclia;nge=requirements of the buildings program through 1965.
All other countries
The 10-year educational exchange agreement with Denmattk is funded fully
with reserved ICA counterpart currencies. There is no Publ c Law 480 agree-
ment. - The $103,000 required for the buildings program will be financed from
miscellaneous current collections in kroner.
A 20-year educational exchange program with Ireland is being financed from
ICA program country counterpart funds. It is hoped that buildings program
requirements of $260,000 can be met by conversion of anothe:? available foreign
currency.
Of the $4.2 million required for new projects in the countries; with which there
is no educational exchange program under Public Law 584, 112.7 million is for
projects in Poland. It is expected that the $1.6 million in local currencies required
in the remaining five countries can be derived from conversion of other available,
foreign currencies or by use of current miscellaneous receipts ir. local currency.
Further analysis of requirements for specific projects (table IV-b-1)
The $51.9 million required for specific projects of the 1961-65 buildings program.
may be analyzed further as follows: - -
[In thousands of U.B. doljarjl,
Total
F )reign
ex change
U.B. dollars
1. 33 countries having adequate availabilities derived from
Public Law 480, surplus property, or lend-lease agree-
ments---------------------- ---------------
28,825
27,325
1,500
II. 13 countries in which a substantial portion of require-
ments may be met by local currency receipts or conver-
version of other available currencies --------------------
6,330
6,005
325
III. 28 countries in which there are no adequate local currency
availabilities--------------------- ----------------------
16,745
0
16,745?
Total---=--------------------------------------------
51,900
33,330
18,57(1
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
1. Countries presenting no exchange problems (table IV-b-2)
Among these 33 countries are 31 with which the United States has entered into
.agreements for the disposal of surplus agricultural commodities pursuant to
Public Law 480, as amended. These 33 countries also include 19 of the 28 coun-
tries having residual local currency availabilities under surplus property and lend-
.lease indebtedness agreements.
The 33 countries represent-
(a) 96 percent of the potential additional foreign exchange availabilities
programed under section 104(f) of Public Law 480 but not yet transferred to
'Treasury sales accounts;
(b) 93 percent of the amounts programed for loans under section 104 (e)
:and (g) of Public Law 480:
(c) 78 percent of the local currency options remaining on June 30, 1958,
under lend-lease and surplus property. credits agreements;
(d) 99.8 percent of the estimates of the U.S. Treasury of excess receipts of
foreign exchange in 1959; `and
(e) 56 percent of the colt of apecific projects included imthe proposed 1961-
65 buildings program.
II, Other countries in which a substantial portion of requirements may be met from
local currency holdings (table I V-b-3)
In these 13 countries are 12 percent of the cost of specific projects included in
the proposed 1961-65 buildings program. Together with the 33 countries in
groupp I these 46 countries account for 68 percent of the costs of specific projects,
of which about 95 percent would be financed from U.S. Treasury holdings of local
currencies.
The currency- requirements, of group II would be derived from currency
receipts, by conversion of available currencies, and by purchase of materials in
,countries where Treasury holdings are adequate.
.III. Countries in which there are no adequate local currency availabilities (table
IV-b-3)
Nearly one-third of the cost of the specific projects included in the proposed
'1961-65 buildings program on the basis of need and priority is related to projects
In countries in which the U.S. Treasury has no holdings of local currency and such
currency is being acquired only by purchase with U.S. dollars. This highlights the
fact that while large sums of certain foreign currencies are being generated by
certain aid or surplus-disposal programs, this condition is not general or worldwide
,and, in fact is somewhat concentrated in a limited number of countries and cur-
rencies. Maximum exploitation of these surplus currencies alone will not finance a
worldwide program based on need and priority. Local currency usage must be
supplemented with substantial U.S. dollar.resources to finance needed facilities in
?countries in which there are no local currency holdings.
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
146
TABLE IV--a.-Analysis of local currency requirements of the proposed foreign
buildings program for 1961-66 with particular attention to countries having
educational exchange agreements authorized by Public Law 684, as amended
[In thousands of equivalent U.B. dollars]
Buildings program
Surplus
Potential
cash foreign cur-
property
Treasui y
additional
Treasury
rency requirements
and lend-
cash
avail-
estimate
,lease
holdip ?s
, abilities
of excess
in(rebt-
avaTai le
from
holdings
1960 and
edness
for
Public
in fiscal
1961-65
prior
balances
purcb+se,
Law 480
see. 104(j)
year 1959'
1. France and the overseas territories:
France__________________________
$575
$132
$23,989
$3,800
----------
Algeria--------------------------
750
----------
----------
------ ----
----------
'----------
Cameroon----------------------
655
60
---------
------ ---
----------
----------
French Equatorial Africa--------
655
----------
----------
----------
----------
----------
French West Africa-------------
735
200
----------
----------
_-____----
;-?_------
Ivory Coast ---------------------
605
----------
----------
----------
--- -
----------
Madagascar---------------------
665
----------
----------
-----?----
----------
----------
Total --------------------------
4,630
383
23,989
----------
3,800
-___-____-
II. United Kingdom, colonies, and pro-
tectorates:
United Kingdom________________
75
4,290
19,819
$1,926
----------
__-______-
Bahass* - --------------------
150
50
----------
----------
----------
---
Bermuda------------------------
50
----------
--- ------
---- -----
----------
----------
Cyprus--------------------------
100
-
---- -----
400
104
----------
----------
-_
Nigeria------------------------
-
86
221
----------
----------
----------
saland-___-__-
Rhodesiand Nya
725
81
Sierra Leone---------------------
705
-
------
-
Tanganyi1 a---------------------
400
Uganda-------------------------
47
----------
----------
----------
Other---------------------------
-------
929
----------
----------
----------
Total--------------------------
3,945
5,676
10,818
----------
---__---
III. Other countries In which surplus
property c redits will finance con-
tinuation of the educational ex-
change program:
Australia-----------------------
660
379
3,715
125
___-___---
----------
Burma --------------------------
290
8
1,586
366
4,462
$3,452:
Belgium-------------------------
---------
28
1,661
Q)
------ ---
----------
Germany------------------------
225
1,094
84,593
6,651
120
_
f3reece--------------------------
50
1,159
37,267
2,627
1,940
Italy---------------------------
625
445
85,228
3
6,199
..........
Netherlands_____________________
__________
1,241
39,923
106
2
_
Zealand--------------------
5o
46
1,190
'
-
.
Norway-------------- -----------
----------
1,180
593
i
242
---------
.
----------
Total --------------------------
1,900
5,680
257,645
10,120
12,723
3,452
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
mmwwm~
 Approved For ReIg Gj9 27cT qi i R riff?-03721Agq~400020007-7
TABLE IV-a -Analysis of local currency requirements of the proposed foreign
buildings program for 1961-65 with particular attention to countries having
educational exchange agreements authorized by Publi Law 581, as amended-Con.
[In thousands of equivalent U.S. dollars]
Buildings program
Surplus
Potential
cash foreign cur-
property
Treasury
additional
Treasury
rency requirements
and lend-
cash
avail-
estimate
legso
holdings
abilities
fe
.;
indebt-
.
available
from
o
xc9ss.
holdings.
1960 and
' edness
for
Public
in fiscal
1961-65
prior
balances
purchase
Law 480
1
4
6
year 1959
sec.
(
0
V. Countries in which currencies gen-
crated by Public Law 480 will
finance the educational exchange
program:
Argentina-----------------------
$600
$13
-
-
----?--
--
$140
$641
Austria--------------------------
50
1,270
$1,478
$11
33
-
Brazil ---------------------------
Ceylon--------------------------
100
470
911
(1)
---=
--------
16,228
1
2
------
----
1,484
Chile----------------------------
Colombia
700
251
-
- ---- -
-
-- 837
,
00
1,1192
129
-----------------------
Ecuador___________________
125
35
1
621
41
,
2,
91
1, 640
.
______
Finland-------------------------
1,050
54
---- --
783
--- 1 - ----
374
417
278
-
Iceland--------------------------
India---------------------------
---------
1090
1,398
193
4,209
185
.,069
6
597
58
817
_________
______-.
22
153
Indbntsia---------------------
Iran
---------
688
49,408,
763
,
12,135
,
179
-----------------------------
Israel----------------------------
1,080
430
248
77
25,704
----
6,496
14
01
---
S
848
Japan--------------------------
Korea---------------------------
450
480
506
985
306
22,940
-
28
940
2
,
Mexico--------------------------
Pakistan
3,500
91
_______
711
4 409
,
__
2
116
________________________
Paraguay----------
--------
820
984
306
8,618
24,
766
,
16 325
-
-----
Peru----------------------------
Philippines----------------------
----------
----------
275
1,144
2,757
1
,200.
23
283
2,213
1
464
Portugal------------------------
350
,
Spain---------------------------
Taiwan-------------------------
700
870
1
45,009
25,717
11
47,798
2
8 38
2
Thailand________________________
930
3
,
Turkey--------------------------
United Arab Republic__________
1.630
1
470
373
204
ib
8 408
298
16 960
4
Uruguay
------------
,
1
50
----------
Vietnam------------------------
1, 000
98
18
870
Yugoslavia----------------------
75
814
261
11,429
62,607
----
5i.----
851
Total
__________________________
18,280
13,833
162,640
70,379
274,823
136,510
V. Subtotal, groups I through IV.
VI. Other countries:
28, 755
25, 472
464, 092
82, 425
291, 346
139, 962
Canada
650
368
Denmark
100
3
onduras
80
75
roland
._
250
10
uwait
430
Nepal
140
man-----------------------
O
300-
PofandAll other
262b
87
24463
3
136973
6062
________________________
__________
6,226
16.900
598
925
II. Total__________________________
33,330
32,232
506,475
83,026
429,244
146,024
1 Less than $500.
NOTE-Amounts are rounded to the nearest thousand and will not necessarily add to totals similarly
rounded.
A pproved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
V
 Approved Ford telease 1 999/08/2 : CIA-RDP78 03N721A000400020007-7
REIGN SERVICE ACT
V ~~
p~ -i NM
~'C O3:'
fMR
ORO
:
a^
?
A
? ~
~
tN+ T OM ~
old
m
r_1
it
~oa
W
.A
VIP
m -
rra~
ci aid
~n
~ro
a
g ~+
Pi
?
w CA
m
Q Ly F i~D~~9O JON
ryl~
m iC]N N.y cO
tlb
~
b o
a
U
M
?
In,
E
v
~.c vu
'~ V W G~ p
A ~'Cl
m
~Ww@S(~ p,Kn ,~awcbi ;~~ 1 ~m
J
,
~Mq~ a~ a go ? '~~ad (f~~
F7
02 '0 ;; "Nd?._ ~M3Hm~a?~00-'Pm.G ~~
1
O
~
?
^
m
5 C4A ztf, T
O p^ws
.~~e~ 0
oHq.
ctiv
3~
.
WCWUPQ
~
O
p.
U
U
o
m
U
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Releaa&499 W~27AcCA* DRM,%03721A000 00020007-7
9 4R
qro
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved F oRelease 38 8 vF 1 7
,A4)mV;1A000400020007-7
6
A
O icp .,M~J NOU'i .?,Nel'
4
y
, -71
L!
7
/y F0.
'
O
"M
y~
0
oo
>Spppn$ eN SSOd~~[]~['JOS
O i~Tj~~]1-~DON~Dmo>Om
~
'''"'
O
~~
pm ~
a~
~
pbFD~
d
444uu4
JJJiii ~c
COOn
o .m"a ~uco".; acg'~~cv `D ~N n~oNC?~
a?.:a
a a;
~
p
O MWN
+ n
~
~
OD on NO
m
om::
'
o
~'
;
"
~
.~
rc.
.~,-i ci co rid-m
.?i civ~
a~aU
iY! NNd' irping.
i
i
i
~
~
~CO
Fy a
I
r
C
.w
~ci :CT
~
E
a?
cccc~0vp??]]~~] eeepeeepMMMMMM NN epeppp
4
.~'
J
b ob
~
p
O q
]b
~
~
~
ooc~
~
oooooooSooooo
en
R
o
c
_ P
w
a~
000ooooogoooo-000000000
c~
V2 c~
O
aim.
~a
P
^C~~
b
4
Opp00 N~]O' hu'vb0O 4900o O
~]OO.~S Mn SnN~~++]J p~popMN~OMOuJ
~~ NW[~.-i V~Ou]N OOW~O d'V~~~4~]]]J
~--i .-i ti .?~ M'
'y
h
O
ag
P ~ y
P
^
c' o ob o,a c '
84, aa.:JA
.~ o o 4'? G .~ A o 127 . P i i
m Po m i
OP,
3 att m b~'n a P o 0 ou. -4 m c.,-~ ^ca aAOI'~d?I
yoga mO~Cd WL'4C)C>pWWWCJ C'J1 ''H IN
v
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Rely 1 9 (J2) Ci R 78-03721AQQ 400020007-7
T~MOI^000400020007-7
The Department supports legislation that will provide for the ad-
justment of the annuities of retired Foreign Service personnel to bring
them in line with cost-of-living changes. The successive pay in-
creases which have been granted Foreign Service personnel since World
War II have constituted clear recognition of the impact of a steady
rise in living costs. It seems only just that Foreign Service annuitants,
and indeed all retired Government employees, who are suffering from
declining real value of the dollar, should receive adjustments in
annuities to maintain purchasing power in periods when prices rise
and the value of the dollar falls.
S. 1502 goes beyond the adjustment of annuities to reflect cost-of-
living changes, and provides for automotic recomputation of annuities
with each general salary increase granted Foreign Service officers in
the ,future. This proposal raises technical and far-reaching problems
concerning annuities of retii ed Federal employees.
LETTER FROM' BUREAU OF THE BUDGET
The Department has consulted the Bureau of the Budget on this
matter, and has been advised that the position of the executive branch
with respect to increases in annuities under Fedeial employee retire-
ment systems is set forth in considerable detail in a letter from the
Director of the Bureau of the Budget to the chairman of the House
Post.Office and Civil Service Committee, dated May 27, 1958. 1
would like, therefore, to submit a copy of this letter for the record.
(The letter referred to follows:)
EXECUTIVE OFFICE OF THE PRESIDENT,
BUREAU OF THE BUDGET,
Washington, D.C., May 27, 1958.
Hon. TOM MURRAY, Chairman,, Committee on Post Office and Civil Service,
House of Representatives, Hashington, D.C.
My DEAR MR. CHAIRMAN: Thank you for sending me the copy of the Civil
Service Commission report on civil service annuitants made pursuant to request
of your committee. It arrived just before the House action on ILR. 607, the
annuity increase bill. The provisions of this bill have now been enacted as the
House version of S. 72, the annuity increase bill.
As this bill is now going to conference, I think the administration's position on
the specific provisions of this legislation should be stated, particularly in view of
the congressional interest in the annuity increase issue and the variety of opinions
expressed during the consideration of the House and Senate versions of the bill.
1. Financing.-Both versions of S. 72 would charge the fund for the cost of the
increases until July 1, 1960, without reimbursement,.but thereafter would condi-
tion payment of the annuity increases in-any year upon specific annual appropria-
tion of the cost for that year. Thus, the unfunded liability of the system would be
increased only by the annuity payments for the first 2 years, and not by the full,
ultimate cost of the increases, and the financing would be on a year-by-year basis,
without advance funding. This financing feature is not objectionable.
The House version (see. 7) makes the fund available for administrative expense
in the first 6 months, apparently to meet the cost of administering a "gainful
employment" feature. Since the latter feature is unacceptable (see below), the
special administrative expense provision is unnecessary.
2. Annuity increase: amount.-If any adjustment in annuities after initial de-
termination is justified,, the only basis for adjustment would be to maintain
purchasing power in periods when prices rise and the value of the dollar falls.
All annuities are affected in such periods; and any annuity adjustment to counter
such declines in purchasing power should be uniformly applied. The objective
of annuity adjustment should not be to improve the relative purchasing power
of a particular class of annuitants, whether selected on the basis of the amount
of annuity or by the lack of income from such other sources as gainful employ-
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
FOREIGN SERVICE AC'I AMENDMENTS
merit. If any adjustment is now justified, it should be stated as a percentage
increase to be applied uniformly to all annuities. The size of this uniform: per-
centage should be related to the change in cost of living since the last adjust-
ment, effective in October 1955. The Bureau of Labor Statistics Consumer
Price Index increased about 7.5 percent from October 1955 to April 1958. Both
versions of the bill provide increases considerably greater than necessary to
offset decreased purchasing power.
3. Annuity increase: formula.-The House version provides a flat percentage
increase in annuities which each retiree was receiving or entitled to receive on
October 1, 1956. This method is preferable to the regressive 20-10 percentage
increases, subject to dollar limitation, provided by the Senate version. How-
ever, the House version retains the existing $4,104 ceiling placed on increased
-annuities by the 1955 Annuity Increase Act, while the Senate repeals this limita-
tion. Thus both versions, each in a different way, would alter the relationship
of the annuity to the salary and service on which it is based. The Committee
on Retirement Policy, established by Public Law 555, 82d Congress, specifically
recommended against changing the relationsi ip of annuity to salary and service
when making annuity increases, and the administration emphatically endorses
that principle.
Both versions properly exclude voluntary "additional" annuities from the
increases.
4. Annuity increases, gainful employment, etc.-The House version prohibits
payment of an annuity increase to an annuitant who has more than $1,200 annual
income from gainful employment and applies the existing $4,104 ceiling on annu-
_itios increased in the 1955 Annuity Increase Act. These features, like the "regres-
sive" percentage and the "ceiling" provisions, of the Senate version, stem from
an erroneous presumption, according to the-Tccord, that annuity inereasc'ghould
be computed on the basis of the financial need of the annuitant. Taken together
such provisions attempt a general presumpticn as to how much need exists, and
modify the earned annuity accordingly. L' any adjustment is justified, all
annuities, high or low, should receive the sr.me ratio of adjustment.
The civil service retirement system is a part of the total compensation system
for Federal officers and employees. It provices an annuity equal to better than
half pay after the close of a full Federal career of 30 to 35 years. Larger annuities
are earned by those with longer service and l,sser annuities are earned by those
with shorter service. The graduated annuity formula of the Civil Service Retire-
ment"Act gives greater weight to service after 10 years than to service of less than
10 years. About 27 percent of annuitants have less than 15 years' service and
therefore have carried annuities of less than half the amount the 30-year employee
at the same salary rate has earned. The short-term employee works part, in
many cases a very large part, of his life outside the Federal service. And, in
addition to his civil service annuity, he earns whatever pension or other income
may be provided in that non-Federal employment. There not only is no Govern-
ment obligation to grant special increments fo - short-term Civil Service annuities
on the basis of a presumption of "need," bi: t doing so converts this incentive
compensation system to a nonincentive welfar, system.
The methods used. for providing annuity ncreases in the past have in fact
materially changed the career incentive pattern of annuities established by the
Retirement Act itself. These increases have given special advantage to certain
annuities, generally those annuities resulting from service of considerably less
than a full career. Since immediate restoration of the original career incentive
pattern would adversely affect the smaller a irnuities, we believe this would in
some cases be inhumane. However, we believe no further use should be made of
these past annuity increase methods, which are to a substantial degree incor-
porated in both versions of S. 72.
It is the administration's firm position that, if annuities are to be increased at
this time, the increase should be a uniform percentage increase, that there should
be no discrimination whatever based on size of c.nnuity, length of service, or salary
level, and that no account should be taken of my other income of the annuitant.
5. Survivors' annuities.-Both versions provide prospective increases in sur-
vivors' annuities. The House version imposes a $200 ceiling on each survivor
annuity, and the Senate version places a $1,::00 ceiling on surviving children's
annuities. These ceilings run contrary to the principle of uniform treatment.
6. Retroactive annuities.-Both versions of the bill grant annuities to survivors
where death occurred prior to enactment of the 1948 Retirement Act amendments
which provided survivor benefits effective in that year for the first time. Widows
and widowers of employees and retirees who died on or after February 29, 1948,
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For ReJgRgN192,W9?137T:Aga-r i~TT8-03721 AlOR0400020007-7
now receive survivor annuities. The House version permits an employee who
retired prior to July 31, 1956, with enough leave to carry to that date to elect
either the annuity increase provided by the bill, or to recompute his annuity
under the 1956 amendment formula. The administration has opposed. both of
these retroactive provisions.
Sincerely yours,
MAURICE H. STANs, Director.
Senator GREEN. Do you want to point out as you go along the
appropriate phrases in the letter to which you make reference?
Mr. HENDERSON. I shall.
It will be observed from an examination of the last paragraph of this
letter that the executive branch of the Government does not support
legislation which provides for the retroactive recomputation of annui-
ties.of retired governmental personnel. The Department, therefore,
in view of the position taken by the executive branch, is unable to.
support the retroactive features of the Sparkman bill.
I would like to emphasize the fact, however, that we in the Depart-
ment who are concerned with such matters are troubled at the situa-
tion in which many of our retired Foreign Service personnel and their
dependents find themselves at this time.
Many of them devoted practically the whole of their active life to
the service of the U .S. Government. They spent many years abroad,
often in situations involving hardship and the undermining of health.
When they entered the Foreign Service they were aware that they
would not while in it be able to effect any savings to tide them over
in their old age. Some of them exhausted such private means as
they 'had in the service of the Government. They were depending
upon their retirement annuities to take care of them.
During recent years, however, through no fault of theirs, the pur-
chasing power of the dollar has steadily declined. As a result,
annuities, which a few years ago might have been sufficient to enable
these people to live decently and to have appropriate medical atten-
tion, no longer are big enough to take care of them. Many of our
retired personnel, therefore, who a few years ago were representing the
United States in various parts of the world are now living in conditions
which are not to the credit of the Government of the United States.
It is true that last year the Congress passed legislation which would
increase annuities of retired personnel on a 10-percent basis up to $500.
Such an increase, however, by no means solves the problem of these
people to whom-the United States is deeply indebted. I am convinced
that during the last two decades the conscience of the U.S. Govern-
ment has become more and more active with respect to the lot of re-
tired Government personnel and that eventually steps will be taken to
look after their interests to a no less degree than we look after the
interests of personnel in active service.
The committee will note that although the executive branch of the
Government is unable to support retroactive formulas for the recompu-
tation of annuities of those who have already retired, it has not taken
a position against increases in retirement annuities based on cost-of-
living considerations. The letter, addressed by the Director of the
Bureau of the Budget on May 27, 1958, the letter which I have just
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For1lease 19,/,(,2ERl## RPZ7QA74000400020007-7
placed in the record, to the chairman on Post Office and Civil Service,
contains the following paragraph:
It is the administration's firm position that, if annuities are to be increased
at this time, the increase should be a uniform percentage increase, that there
should be no discrimination whatever based on size of annuity, length of service,
or salary level, and that no account should be taken of any other income of the
annuitant.
WIDOWS OF FOREIGN SERVICE PERSONNEL
I would like to take advantage of this opportunity to dwell particu-
larly upon the situation of the widows of Foreign Service personnel.
They are in a unique position. The wife of a member of the Foreign
Service has many duties and responsibilities placed upon her. She
as'a partner to her busband also undergc es strains and hardships in
representing the United States abroad. The Government owes a
debt to her as well as her husband. Nev3rtheless, in spite of certain
remedial actions which have been taken by the Congress, the widows
of many of our Foreign Service personnel find themselves still in
straitened circumstances.
That is my testimony, Mr. Chairman.
Senator GREEN. Have you anything more to add?
FOREIGN SERVICE BEHIND CIVIL SERVICE IN RECOMPUTATION OF
ANNUITIES
Mr. HENDERSON. I may add this: We have been checking the
increase in the annuities, the increases granted by the Congress during
recent years in the annuities of retired Foreign Service personnel as
compared with the increases granted to the annuities of retired civil
service personnel, and we. have come to the conclusion, and I think
I represent the executive branch of the Government when I say this,
that the Foreign Service personnel are still about 10 percent behind
the civil service personnel in the rectification of annuities.
Senator GREEN. Has the Department taken any action as to S.
1502?
Mr. HENDERSON. The only action the Department has, taken is
the statement which I have just given you, a statement which is based
upon the conclusions of the Bureau of the Budget which represents
the executive branch of the Government.
The conclusions of the Bureau of the Budget are that the executive
branch of the Government cannot support the clause in this bill
which calls for retroactive recomputation of annuities.
EXECUTIVE BRANCH WOULD NOT OPPOSE ACROSS-THE-BOARD PERCENT-
AGE INCREASE
However, the executive branch of the Government would not, as I
understand it, oppose an across-the-boarl increase on a percentage
basis of the annuities of retired personnel.
Senator GREEN. Are you authorized to speak for the executive
branch to that extent?
Mr. HENDERSON. I think I can, and I would like to ask Mr. South-
worth and Mr. Woodyear who are here.
I believe that your, informal understanding is that the executive
branch of the Government would not oppo,ae, say a 10-percent increase
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Rele 911p%9i&R7AdTClAr7 03721A0D 00020007-7
in Foreign Service annuities at this time; do you think I am correct
in that?
Mr. WooDYEAR. That is correct.
Mr. HENDERSON. We have no written statement to that effect, but
I consider I can state that with assurance.
Senator MANSFIELD. Would these gentlemen both give their names
and positions for the record?
Mr. SOUTHWQRTII. I am Winthrop Southworth, Chief of the Per-
sonnel Projects Staff.
Mr. WOODYEAR. I am Mr. William Woodyear, Deputy Chief.
Senator GREEN. Is the opinion being expressed the official position
of the Department, or is it the opinion of individuals?
Mr. HENDERSON. I am expressing the opinion of the Department
when I say this.
Senator GREEN. You do not mean to say, however, that the Depart-
ment would go to the extent of saying it approves this bill, S. 1502.
Mr. HENDERSON. No, sir. The Department cannot approve S. 1502
because the bill has in it a provision which, if accepted, would. mean
ti
d
h
f
re
e re
t
a recomputation on a retroactive basis of the annuities o
Foreign Service officers.
The Department has no authority to approve that. The executive
branch of the Government is not in favor of recomputation of the
annuities retroactively.
However, the executive branch of the Government would not object
to, and the State Department would look with favor upon, an increase
across the board of the annuities of retired Foreign Service personnel.
up to 10 percent.
Senator. GREEN. The State Department would approve. that?
Mr. HENDERSON. That is not a provision. of this bill. One section
of this bill would provide for an adjustment of annuities to reflect.
cost of living changes. The Department is not opposing that up to
the extent. of 10 percent across the board.
STATE DEPARTMENT. POSITION ON VARIOUS PROVISIONS OF BILL
Senator GREEN. I understand you to say that the Department
approves this bill in certain respects but not in others-would you
distinguish between the parts it favors, and those it opposes?
Mr. HENDERSON. It would approve in principle the section of this.
bill which would provide for the adjustment of annuities to reflect
cost of living changes. It approves that.
It does not approve the section, it cannot support the section of this,
bill which provides for recomputation of annuities.
Senator SPARKMAN. That is section 3; is it not?
Mr. HENDERSON.. It is section 3.
Senator GREEN. Does it approve the other sections?
Mr. HENDERSON.. It approves them in principle, that is, it would
approve an adjustment of the annuities to reflect cost of living up to
10 percent across the board.
The Department cannot approve, as a whole, any section of this
bill because in, (e) it provides:
The annuities paid by the foreign service retirement and disability fund shall.
automatically be increased when salaries are increased, so that each survivor
annuitant will receive the same annuity as will be received by survivors of officers.
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved Fgf4Release 1rq?JW/&R-I&J~c~r DAP78 03721A000400020007-7
and annuitants of the same class, grade andyear,.of service when said officers
retire under the increased scale of salaries.
It cannot approve, at this time, an automatic increase in annuities
when there is an increase in salaries of the officers in active service.
It would approve language which would provide that, in general,
the salaries of retired Foreign Service pen onnel shall from time to
time be adjusted to meet increased costs of living.
It would also approve of a bill which w 3uld provide that at this
time there shall be an increase of no more than 10 percent across the
board of the salaries of annuitants of the Foreign Service.
Senator GREEN. Under what circumstances?
Mr. HENDERSON. Any circumstances; all of them.
Senator GREEN. Would any existing annuity be increased?
Mr. HENDERSON. Any existing annuity.
Senator GREEN. And any department of Government?
Mr. HENDERSON. No; we are speaking only of the Foreign Service;
we are limiting ourselves to the Foreigr. Service. I distinguish
between the Foreign Service and the civil sei vice at this time, because
such studies as we have made would indicate that already adjustments
have been made during recent years in civil service annuities, so that
the.-civil service annuitants have a 10-pere r t advantage, so far as
increases are concerned, over the Foreign Se'vice annuitants.
Senator GREEN. Senator Mansfield, do you have any questions?
Senator MANSFIELD. No questions, Mr. C iairman.
Senator GREEN. Senator Sparkman, have you any questions?
Senator SPARKMAN. I want to ask some questions of Mr. Henderson.
As the sponsor of this bill, I also ask for the privilege of making a
short statement at some time during the hearing, but right now I
would like to ask Mr. Henderson some questions.
Of course, Mr. Henderson, you realize thi3 bill was introduced for
the purpose of provoking study, thought, and discussion, and for my
part, I certainly welcome the various suggestions that you have made
regarding the bill. I earnestly hope that, as a result of these hearings,
we may be able to work out an acceptable bi 1.
AUTOMATIC INCREASE IN ANNUITIES CORRESPONDING TO SALARY
INCREASE OF PRESENT OFFICERS (SEC. 1(e))
There is one thing that I do not quite undf;rstand, and that is your
objection-when I say "your" I do not mer.n yours personally, but
the official position-to subsection (e) of sect ion 1. That is the sec-
tion that you read just a few minutes ago, is it not?
Mr. HENDERSON. Yes, Sir.
Senator SPARKMAN. As I understand it, the Department would be
willing to see a 10-percent increase given to annuitants across the
board at this time, and willing also to establish the principle that
from time to time, in order to meet rising costs of living, there would
follow adjustments.
Mr. HENDERSON. Yes, sir.
Senator SPARKMAN. I was under the impression that it has been
customary in civil service when pay increasers are made to provide
more or less automatically for increases in pa;iments to retirees; isn't
that right?
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Releaspo p~/ ~&: ~4 721A000 0020007-7
Mr. HENDERSON. I do not believe it has been done automatically;
I believe it has been accomplished by accompanying legislation.
Senator SPARKMAN. Well, you may be right on that point. I was
under the impression that perhaps a part of the same legislation had
broader application. Back in the early days of World 'War II, I was
.a member of the Military Affairs Committee of the House of Repre-
sentatives, and chairman of the Subcommittee on Pay and Allow-
ances. My recollection is that we always had a saving clause when
,jay rates were increased to take care of those who had been retired
.in a proportionate manner.
Of course, I can understand that perhaps you would want the
increase made under a specific formula rather than have it made
..automatic across the board in the legislation itself.
PROSPECTIVE COST OF IMPLEMENTING S. 1502
But, Mr. Henderson, let me ask you this: If S. 1502 were enacted,
how much would it cost?
Mr. HENDERSON. It would, according to figures which have been
.given to tts by Government actuaries, cost the Government, during
the first year, about $870,000. An appropriation for that amount
wttild not necessarily be required, but the Government would have
its liabilities increased to the extent of about $870,000 for the first
.year. The costs would probably go tip somewhat on a graduated
scale. We do not know just how far they would go. It would
.depend, to an-extent, on the size of the Service. But they may
eventually amount to a couple of million or even more dollars.
Senator SPARKMAN. A year?
Mr. HENDERSON. A year; yes, sir. But I think we have to bear
in mind that even if this bill did not pass, there would still be certain
increases from time to time, necessarily, in the annuities. We should
not therefore, say that this bill, by itself, would cost the Government
$2 million or more a year later. In any event, other bills are likely
to be passed, which would cost the Government-that would cost
about $300,000.
Senator SPARKMAN. As a matter of fact, if we should adopt the
method that you say the executive department is going to approve,
...that is, the 10-percent across the board, that would cost the'Govern-
ment something, too.
Mr. HENDERSON. It would cost about $300,000.
Senator SPARKMAN. $300,000, as opposed to $800,000 under S.
11502.
Mr. HENDERSON. Yes, sir.
SITUATION OF PRESENT ANNUITANTS
Senator SPARKMAN. How many retired Foreign Service officers are
there?
Mr. HENDERSON. There are 580.
Senator SPARKMAN. Does that include widows and dependents?
Mr. WOODYEAR. There are no dependents other than widows
drawing under our system, sir.
Senator SPARKMAN. With widows, then, there are 580?
Mr. WOODYEAR. Yes, sir.
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved1l~pr Releasgo0qA/QQj,7cj cA4k 721 A000400020007-7
Mr. HENDERSON. Yes, Sir.
Senator SPARKMAN. Some of these annuitants were helped in a bill.
we passed some time ago; isn't that true?
Mr. HENDERSON. Last year Congress passec, a bill providing for a.
10-percent increase.
Senator SPARKMAN. Well, we worked on it for 2 or 3 years, and got
it through last year.
Mr. HENDERSON. Ten percent increase wit a a limit of $500 for
each annuitant.
Senator SPARKMAN. Yes. It is a known fact, is it not, that many
of these annuitants, particularly the widows, who have no separate,
source of income have been in rather desperate straits?
Mr. HENDERSON. Yes, sir. As I said in my statement a few
moments ago, I do not think that the situation of some of the re-
tired Foreign Service people, particularly the widows, reflects very
favorably upon the United States.
Senator SPARKMAN. I certainly think you are right, and in my view
we have been entirely too long in correcting that situation. I think:
it imperative that we get legislation that will correct that situation
which I think reflects unfavorably upon this gi eat country of ours.
Mr. HENDERSON. May I say, if the chairmin would allow me, I
think that eventually a bill containing many of the provisions which
this bill contains will be passed by the Congress. I think eventually-
it will be, but
LEGISLATIVE-EXECUTIVE COOPERATION IN WORKING OUT LEGISLATION
Senator SPARKMAN. May I ask you this, Mr. Henderson: May we-
be assured of the help and cooperation of the State Department ini
working out a satisfactory measure?
Mr. HENDERSON. Senator, we will go as far as we can within the,
framework of restrictions laid down on us by the executive branch
of Government.
Senator SPARKMAN. Of course, I recognize that, and we respect the-
limitations laid down by the executive branch of the Government.
Mr. HENDERSON. Yes, Sir.
Senator SPARKMAN. But that is only one part of the process of en-
acting legislation. Certainly it is incumbent on the Congress to use
its best thought as to what constitutes good legislation, even though.
that may not agree exactly with, what may cone from the executive.
.department. But we would like to work out something and, of course,
we would like to do our best in working out something that would be
acceptable all the way around.
Senator GREEN. Is there anything you care to add?
Mr. HENDERSON. I have nothing, Mr. Chairman.
Senator GREEN. Thank you very much for your appearance here-
today.
Mr. HENDERSON. Mr. Chairman, I shall be lore if any other ques-
tions come up, and I shall be here until the hearings are over.
Senator GREEN. Do not hesitate to comment at any time.
Mr. HENDERSON. Thank you.
Senator GREEN. And please feel free to correct any statement you!
hear which is inaccurate. I do not, of course, mean to say that you:
should correct any statement with which you d) notagree.-
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
FOREIGN SERVICE ACT AMENDMENTS 177
OTHER RETIREMENT SYSTEMS IN FEDERAL GOVERNMENT
Senator SPARKMAN. Mr. Chairman, most of my questions have been
answered, but there are a few that have not been. Here is one, for
instance, that bears somewhat upon my question awhile ago about
civil service employment. Is it true that the Federal police and fire-
men, in their retirement annuities, are recomputed whenever there is
any change in current pay or retirement benefits?
Mr. HENDERSON. I believe that is true.
Senator SPARKMAN. Are there any other Federal services in which
that is true?
Mr. HENDERSON. The military, completely. That is true in the
military, has been until this year, I believe.
Senator SPARKMAN. Well, I mentioned that in connection with the
had already given you my own experience in connection with it.
Mr. HENDERSON. Yes, sir.
Senator SPARKMAN. I understand that for regular civil service
retirees there was a 10-percent increase in annuities enacted in 1955,
and another 10-percent increase in 1958; isn't that correct?
Mr. HENDERSON. Yes, Sir.
'Senator SPARKMAN. There were two 10-percent increases.
Mr. HENDERSON. I have just made the point that the Foreign
Service annuitants are about 10 percent behind the civil service.
Senator SPARKMAN. Yes; that is right. Is it also correct that
there was no recomputation of Foreign Service annuities other than
this percentage increase?
Mr. HENDERSON. Yes, sir; that is right. We have had no
recomputation.
Mr. HENDERSON. I'm not sure about the Public Health Service.
Mr. WOODYEAR. I do not think it is.
Senator SPARKMAN. My next question concerns the military, but I
1942 Pay Act.
COST OF LIVING INCREASE SINCE LAST RECOMPUTATION OF FOREIGN
SERVICE ANNUITIES
Senator SPARKMAN. What change has there been in the cost of living
since the last change was made in Foreign Service annuities?
Mr. HENDERSON. The last change in annuities was made in 1958,
was it not? There has been a very small increase of four-tenths of 1
percent during the last year, but I would like to point out that since
1940 the increase in the cost of living has gone up as of now 107 per-
cent. In other words, it has doubled from 1940 up to date.
Senator SPARKMAN. 107 percent?
Mr. HENDERSON. Yes, sir.
Senator SPARKMAN. I believe that is all, Mr. Chairman.
Senator GREEN. I have just one question I would like to ask. The
bill S. 1502, at the bottom of the first page, reads: "when salaries
of Foreign Service officers are increased or recomputed, so that each
annuitant shall receive the same annuity as will be received by officers
of the same class, grade, and years of service." Are there, then, dif-
ferent sums paid to officers on the various levels?
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
178 FOREIGN SERVICE ACT AMENDMENTS
Mr. HENDERSON. Well, the annuities of the Foreign Service, the
Foreign Service annuitant, are based on the number of years he has
spent in the service, multiplied by two. The p -oduct of that multipli-
cation is treated as a percentage figure. That .-igure multiplied by the
annual average of his last 5 years' salary will give his annuity.
For instance, if a Foreign Service officer's ,zalary during the last 5
years averages, we will say, $8,000 a year, and he has been in the Serv-
ice 30 years, we multiply the 30 times 2, and ge ~ 60 percent. Sixty per-
cent times $8,000 would be his-would make his annuity $4,800 a
year. From that amount would be deducted possibly $1,200 to pro-
vide an annuity for his widow if he should (lie first.
So annuities vary according to the number of years in the Service..
That is roughly the situation.
Senator GREEN. Do the. salaries of officers in a class sometimes,
vary?
Mr. HENDERSON. In the same class?
Senator GREEN. Yes.
Mr. HENDERSON. Yes, sir. They are what we call instep grades in-
a class. An officer will, say, start in a certain class at: $10,000 a year..
At the end of the first year an automatic in st-p promotion will raise it
to $10,300, and so forth.
Senator GREEN. How many different salaries might there be in
the same class?
Mr. HENDERSON. At the present time there are six step rates in a
given class, except in class 8.
GRADE LEVELS WITHIN A CLASS
Senator GREEN. What term do you use to distinguish the various
levels with a given class?
Mr. HENDERSON. We usually call it an _nstep or ingrade promo-
tion-"instep" often is the word used.
Senator GREEN. Is that term used in an.y legislation?
Mr. HENDERSON. Yes, sir. It is used it the Foreign Service Act
of 1946, and also in the
Senator GREEN. It is not used in this bit'.
Mr. HENDERSON. No, sir.
Senator GREEN. Should not that expression be used to make the
legislation more clear?
Mr. HENDERSON. It says "same class, gride." I believe that word
"grade" in this act is intended to mean the instep grade in the class.
Senator GREEN. If you use the word "g.?acle" in the same sense as.
the word "class," the issue may become confused.
Mr. HENDERSON. Yes, sir. Well, I beli }ve the word "grade" here
is intended to indicate the instep in the class in which an annuitant
was when he retired. That grade would be taken into consideration
in the recomputation of his annuity.
Senator GREEN. I am asking simply in the interest of clarity, that
is all.
Mr. HENDERSON. I believe the langua.gE is clear. It is clear to m.ea
at least, Mr. Chairman.
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For ReN09@$/7T: >Dr78-03721 Ald'00400020007-7
TERMINOLOGY TO DISTINGUISH BETWEEN SALARIES OF INDIVIDUALS
AND OF CLASSES
Senator GREEN. Well, if YOU turf to the bill-have you a copy
there?
Mr. HENDERSON. Yes, Sir.
Senator GREEN. On the first page in line 9 where it says "salaries
of Foreign Service officers"-that does not mean individuals, does it?
It means as a class of Foreign Service officers.
Mr. HENDERSON. Yes.
Senator GREEN. Not of individual Foreign Service officers.
Mr. HENDERSON. NO.
Senator GREEN. It should be clear as to what it does mean, should
it not?
Mr. HENDERSON. Yes, sir. I think that also is clear. That is the
phraseology which we use in referring to the salaries of certain classes
of Foreign Service officers.
Senator GREEN. It would be different according to the different
amounts.
Mr. HENDERSON. That is right. I believe that is clear.
Senator GREEN. Would the wording not have to be changed?
Mr. HENDERSON. I do not think it would have to be changed. I
think it is clear, Mr. Chairman.
Senator GREEN. It seemed to me it would have to be because, as I
read it through, it looked as if you were dealing with different terms.
Mr. HENDERSON. I think the phrase "salaries of Foreign Service
officers" means "pay schedules of the various classes of Foreign Serv-
ice officers."
Senator GREEN. That is not what is said.
Mr. HENDERSON. Yes, sir. I think it means when the salary
scales of Foreign Service officers are increased.
Senator GREEN. It is just in the interest of clarity that I am asking
the question.
Senator SPARKMAN. Mr. Chairman, I believe it is in line with other
legislation, but I would certainly suggest that the staff check this
very carefully to make certain.
Senator GREEN. Are there any other questions?
Senator SPARKMAN. I have no more, M. r. Chairman.
Senator GREEN. Thank you very much, Mr. Henderson.
Mr. HENDERSON. Thank you.
STATEMENT OF HON. JOHN SPARKMAN, A U.S. SENATOR FROM
THE STATE OF ALABAMA
Senator SPARKMAN. Mr. Chairman, may, I make a very brief
statement now? I fully intended to make it at the beginning of to-
day's heaiing but, unfortunately, I was tied up in a conference on
another matter. This statement relates to S. 1502 which I intro-
duced in March of this year.
Mr. Chairman, we are now hearing the testimony of witnesses in
support of S. 1502 and we shall receive statements from others who
believe that remedial action on the present system of Foreign Service
annuities is overdue.
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved Fopgelease 1 "R> 9{Vliv%AIRRpf 78 0372 sA000400020007-7
BENEFITS TO BOTH PAST AND PRESENT FOREIGN SERVICE OFFICERS
Apart from the benefits that would accrue to retired Foreign Service
officers and their widows following the enactment of this bill, I wish
to emphasize the fact that its passage wo-ald greatly benefit Foreign
Service officers still on active duty because knowledge of the existence
of an adequate and flexible annuities scheme would raise the mo-
rale of those who, lacking significant private means, have had great
anxieties and who on this account may have, as have many in the
past, resigned to accept more lucrative eriployment elsewhere.
Consequently, I am convinced that the enactment of S. 1502 would
do justice not only to those who are already in distress, but that it
would also contribute to the more efficient general conduct of the
foreign relations of the United States. Therefore, I certainly hope
that we may give favorable attention to this bill, with such amend-
ments as the Committee may deem advisable.
LETTER IN SUPPORT OF S. 1502
Mr. Chairman, I should like also in connection with my statement
to read a letter. It is a typical, not an extraordinary, letter. I have
had many letters like this from many parts of the country, but this
is one that came to Senator Morse. It is in support of S. 1502 and
it is for the attention of the Senate Foreign Relations Subcommittee
on State Department Organization and Public Affairs. The address
is 2323 Nebraska Avenue NW., Washington, D.C., dated June 28,
1959.
Senator WAYNE MORSE,
Senate Office Building, Washington, D.C.
DEAR SENATOR MORSE: In regard to the bill S. 1502, my husband Carroll Howe
Foster was for 29 years in the Foreign Service and 11 years in the Navy. He
retired in class 1 of the Foreign Service.
For 24 years he paid 5 percent of his gross salary for an annuity. On retirement
we were surprised to learn that this did not give me an annuity in caseof his death.
In order to give me an income he paid the maximum $1,239.97 in a deduction
from his pension of $5,951.90 annually, and a further yearly reduction of $124 to
have his full pension paid him if he outlived me. His reduced pension was
$4,587.93.
Many officers retiring in lower grades could not afford to take a further reduction
with children to educate, homes to buy, hospitalisation to pay for, etc. So
their widows had no income after lives spent faithfully serving our country, often
in dangerous situations.
My life was endangered in the riot of December 20, 1920, in Vienna, Austria.
Only less than 500 of the older officers or their widows are concerned in this
bill S. 1502. They contributed for many years to the present Foreign Service fund
which on June 30, 1958, amounted to $24,438,489 p.us interest to date and later
additions.
In justice to these older officers and their widows, some of whom are destitute
(one is cared for by the State of New York), I hope y ou will see that this bill goes
through.
Respectfully yours,
Mrs. CARROLL HOWE FOSTER.
Idah S. Foster
CLARIFICATION OF LANGUAGE [N S. 1502
Senator GREEN. May I ask, after you have made your statement,
whether you have any suggestions to make as to clarifying the
language which I have already made reference to?
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For RelVM% 9 j1 J2r,7C QJ J 8-03721A@OD400020007-7
Senator SPARKMAN.: As I suggested, Mr. Chairman, although, I
believe the language is in keeping with the language of the Annuity
Act, our staff members should certainly check that to make sure,
and then we can take it up: in executive. session.
Senator GREEN. It seems to me itis not clear.
Senator SPARKMAN. It may not be, and you certainly bring up a
pertinent point.
I am sure that we can work it out.
Senator GREEN. It would seem to me the whole sentence would
have to be rephrased.
Senator SPARKMAN. That is entirely possible.
Senator GREEN. All right. Thank you.
Senator SPARKMAN. Thank you.
Senator GREEN. The next witness is to be a representative of the
Diplomatic & Consular Officers Retired.
Is Mr. Richard Boyce here?
Mr. BUELL. Mr. Chairman, my name is Robert Buell. Mr.
Boyce was to have been here to testify, but I have learned he had
trouble with his car in parking and with his motor, and I do not know
what has happened. He intended to be here.
Senator GREEN. You do not see him here?
Mr. BUELL. He is not in the room. May I read his statement on
his behalf?
Senator GREEN. We would prefer that you testify for yourself.
You may proceed.
Mr. BUELL. Yes, sir.
STATEMENT OF ROBERT L. BUELL, CHAIRMAN, LEGISLATIVE
COMMITTEE OF DIPLOMATIC & CONSULAR OFFICERS RETIRED
Mr. BUELL. Mr. Chairman and Senators, members of the Foreign
Relations Committee, I wish to make the following statement:
BENEFITS OF S. 1502 WOULD ACCRUE WITHOUT ADDITIONAL
APPROPRIATIONS
The enactment of S. 1502 would result in an increase in the pensions
of many retired Foreign Service officers and the widows of Foreign
Service officers.
It would abolish inequities in the present pension provisions for
such persons.
It would assure automatic increases if, in future, it is deemed neces-
sary by the Congress to increase salaries of Foreign Service officers on
active duty.
ress
Con
th
d
b
g
e
s
y
It would not require any appropriation of fun
at this time because there are at present about $24,500,000 available
in a fund subscribed to since 1924 by 5 percent mandatory deductions
from basic salaries of Foreign Service officers, supplemented by certain
amounts contributed from time to time by the Congress under the
act of 1924 establishing the Foreign Service.
This fund has grown steadily over the past 35 years.
Those standing to benefit by the enactment of this bill are less
than 600 in number. Many are in financial distress. Those who are
well off would be obliged to remit to the Bureau of Internal Revenue
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
182 FOREIGN SERVICE ACT AMENDMENTS
much of the increase in their annuities received because annuities are
not tax exempt. Nearly all recipients of annuities, unlike recipients Aft
of social security annuities, of necessity rE turn from 20 to 90 percent
of such annuities in the form of income tax. However, such tax
remissions of annuities are not credited to retirement funds from which
they originated. Instead, they deplete retirement funds as these
remissions go direct to the Federal Treasury and not to reimburse the
retirement fund from which they were der ved
Senator GREEN. There is one question, not applying just to cases to
which you have referred, but to all cases. Considering the possibility
of deductions as well as increases, if there are decreases fixed by law
of the salaries of those presently in office, should there not be cor-
responding decreases, in your opinion, to those whose terms have
expired?
Mr. BUELL. That, Mr. Chairman, is a hypothetical question. I
have yet to know any time when there have been decreases in the
cost of living that have resulted in decreases in salaries.
Senator GREEN. I am just testing the principle, that is all.
Mr. BUELL. It would seem to me quite logical if we have a great
decrease in the cost of living and salaries are reduced, that it should
have a bearing on annuities of all retired Government employees.
Senator GREEN. I think it is quite natural.
Mr. BUELL. But I do not believe. that situation has arisen in the
past, nor can I foresee it arising in the near future.
Senator GREEN. No; but the overall idea is to make provisions for
retired officers correspond with those affecting officers presently
serving the Government; is that right?
Mr. BUELL. Well, Mr. Chairman, I canr..ot speak on behalf of all
the retired Foreign Service officers on that point, because I have not
had the opportunity of consulting them.
Senator GREEN. No; I am speaking of tie language of the bill, as
it has been offered to the committee.
Mr. BUELL. Yes. Well, personally I would have no objections to
altering the text of the bill in that regard, but I am speaking as one
individual.
Senator GREEN. I think it is a very unlikely contingency that I
presented to you. I just wanted to test the principle.
Mr. BUELL. Yes.
Senator GREEN. Thank you very much.
Have you any questions?
Senator SPARKMAN. I have no questions. Thank you for your very
clear statement.
Senator GREEN. Mrs. Cecil Norton Broy is our next witness.
STATEMENT OF MRS. CECIL NoRTON BROY
Mrs. BROY. Yes, Mr. Chairman.
Mr. Chairman, I am the widow of Ameri ;an consul Charles Broy
who served in all sorts of posts, from the Belgian Congo, to London,
England.
My first husband was the late Honorable ''homas Upton Sisson, of
Mississippi, who served on the Appropriations Committee of the
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Releaseol199 /4 7cj cI P7 721A000Jg9020007-7
U.S. House of Representatives for many years, and was an intimate
:friend of Speaker Sam Rayburn.
Any patriotic American woman who has married a career Foreign
Service officer thinks very deeply of the part she should play on foreign
soil. She must endeavor to conduct herself with decorum, politeness,
and warmth, if she is to succeed in helping her husband to properly
represent their. country at all times. Add to this the economic strain
which many are put to in moving from place to place all over the
:globe. Varying climates and conditions of living are to be encoun-
tered. Many men of splendid educational background and outstand-
ing ability who choose the Foreign Service as a career are not persons
with private means-I would say the majority do not have private
means. And even with the best management, it is an expensive life.
From my Congressman husband, Mr. Sisson, I inherited what, at
that time, was considerde a large sum of money. Every cent of that
inheritance, both principal and interest, has been spent either to supple-
ment Mr. Broy's salary while we were serving in very expensive posts
(for example, we were kept in London over 7 years), or I have had to
use it to help in the education of the three Broy children after his
untimely death in September 1943, due to a horrible automobile-train
accident at Bergheim, Germany, while he was on a mission for the
Department of State.
PLIGHT OF FOREIGN SERVICE WIDOWS
Now, as to the present economic plight of some of us widows who
..have suffered through some of the worst hurricanes the Bahama
Islands have ever known, or who have suffered through other terrible
-experiences while living on foreign soil-Mrs. Foster, with the riots
in Vienna-we have inflation-the 48-cent dollar-the high cost of
rents, food, and other necessities of life. I receive $175 from the
State Department retirement fund. Today that is worth less than
$87.50 per month. Today, as you gentlemen must well realize, it is
not how many dollars a person may have, it is what those dollars will
buy insofar as the necessities of life are concerned.
The wife of a retired Foreign Service officer told me the other day
that she hoped and prayed she would precede her husband in death
-since she did not see how she could possibly exist on just part of his
annuity should he die first. Two older people living on a small
:annuity can live together under the same roof; the widow left alone on
a part of his annuity cannot afford the same apartment, or any
apartment at all, for that matter. The lovely, vital widow to whom I
have referred should not have to be afraid that she will live, and con-
tribute to our culture because of her charm and experiences in foreign
lands, rather should our great Government reward her with the assur-
ance that she will have enough to get along on for the remainder of her
days, after having served our country beside her husband for 38 years
'on foreign soil.
Our husbands-have contributed.5 percent of their salaries for many,
many years, and during a time when a dollar was worth 100 cents.
That money has been in the State Department retirement fund
drawing interest for these many years. Mr. Broy entered the Foreign
Service 50 years ago. He served 33 years. There is now in this
Foreign.S.ervice retirement fund over $24'/2 million.
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
184 FOREIGN SERVICE ACT-AMENDMENTS
ANNUITANTS LOOK TO CONGRESS FOR RELIEF
Mr. Chairman, we are grateful to you and other members of this
committee who have had such interest in ou?' problem sufficient to
bring S. 1502 out into the open for hearings today. To you, Senator
Sparkman, for what you have said today, we shall be forever grateful.
In addition to having been designated by the Diplomatic & Consular
Officers Retired to represent Foreign Service widows, I happen at this.
time to be vice president of the American W )men's Council. That
organization stands for integrity in Governme it.
The points which you have made, Senator Sparkman, have so ably
today described our circumstances, and it looks as though we shall
have to look to Congress and not to the Department of State for relief..
Thank you.
Senator SPARKMAN. I have no questions. . think it is a very fine
statement.
Senator GREEN. Thank you for your testimc ny.
The next witness is Mrs. Ruth Baker Shipley.
STATEMENT OF MRS. RUTH B. SHIPLEY
Mrs. SHIPLEY. Thank you, Mr. Chairman.
I really should not be here, for the only thing I have to do with.
Foreign Service officers is my great affection fc,r them. But I am now
chairman of the welfare committee of DACOIt, and I thought I could
add one or two cases to your knowledge that you might find, I hope,
persuasive.
RETIRED OFFICERS' PENSIONS II\ADEQUATE
In my work, I hear constantly of the struggle of the earlier retired
Foreign Service officers, now in their seventies or eighties, who are
living on the small pensions granted them under earlier legislation
and trying to provide a modest standard of 1..ving for themselves and
their families. But because of failing health, increased cost of living
and medical care, they are unable to do so. These are people who
ably and honorably represented our countr;r abroad in times when
our Government required much of them, but paid them salaries with-
out special allowances and placed upon them expenses which prevented
any savings. The country is grateful to them, for they were the
pioneers who made possible the present structure of able men and
women working and living in appropriate hou sing, carrying the burden
of representation with suitable allowances, paid vacations at home
at regualr intervals, reasonable medical care, and so forth. We are
proud of the present structure; but we should not forget the pioneers,
now elderly, fearful of increasing debt, and unable to afford adequate
medical care.
In passing, may I mention a few of them: The distinguished retired
consul general, now over 80, constantly seeking employment to aug-
ment his pension to meet hospital expenses and support his family.
There is another one like that, now over 77, the vice consul, who
served 26 years, retired on account of ill health, bombed out in World
War II, while remaining to protect America'' official records, has had
severe heart attack followed by general paralysis, but his mind is
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved For Relegs eG19 9/08I27Cfi CA 9fJ9-03721Agg2400020007-7
F R.
clear, and he is hopeful; he must have sanitarium care, needs an increase
in pension desperately.
The consul practicing law to augment his small pension and help
support his family; health failing under strain and cannot any longer
take legal work;. must have additional income.
The consul with 20 years of service, mostly in tropical posts, not
well, worried financially and debt ridden. He had very costly opera-
tion a few years ago; pension less than $200 monthly.
We have lifted many burdens all over the world and have lighted
many dark places. Can we not give to these veterans of the Foreign
Service, disabled financially, the comfort: and peace in their future
years which their devoted service to America in their earlier years
earned for them?
Enactment of the Sparkman bill would accomplish this.
Senator GREEN. Thank you very much for your statement.
Do we find the same tragic incidents in other departments of the
Government? We do, don't we?
Mrs. SHIPLEY. I only know my own Department. I am a State
Department retiree after 47 years of Government service, 41 in State.
Senator GREEN. Outside of the State Department, are there other
similar Government employees subjected to the same situation?
Mrs. SHIPLEY. I am civil service as if I had been in the Labor De-
partment.
Senator GREEN. Then your sympathy goes to all civil service and
other employees in the U.S. Government; does it not?
Mrs. SHIPLEY. Yes, sir; and to these people who seem to be for-
gotten.
Senator GREEN. In other words, your argument applies not only
to those in this Department, but in all other departments of the
Government as well; does it not?
Mrs. SHIPLEY. Yes; but my knowledge runs only to this group.
For that reason I have mentioned it.
Senator GREEN. But as long as you are here I am asking you that
question, because it would seem to me this is selecting one group of
many under the same conditions for this legislation, and I wanted
to know whether that idea was correct.
Mrs. SHIPLEY. Yes; I am for all of them.
FOREIGN SERVICE RETIREMENT BENEFITS HAVE LAGGED
Senator SPARKMAN.' Mr. Chairman, I would like to interject this
thought. I do not fully agree with the conclusions drawn by my good
friend, the chairman. This is not picking out a special group to help.
It is trying to catch up in benefits for a group that has heretofore been
left out.
As a matter of fact, I think Mr. Henderson made that point in his
testimony. Civil service employees generally have been given these
increases throughout the years, and it was not until last year that
we got any increase for the old retirees-I mean those who have been
out for some time past-and what we are trying to do is to catch up
along the line that Mr. Henderson described. So we are not trying
to give a special favor to a special group.
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved F& Release 1999/08/27 : CIA-RDP78-03721A0004000.20007-7
1~ FOREIGN SERVICE ACT AMENDMENTS
Mrs. SHIPLEY. No; I do not say that..
Senator SPARKMAN. I know you do not. I was afraid that that
might have been implied.
Mrs. SHIPLEY. Well, I am a civil service retiree, and I am not
seeking anything additional. I am living comfortably on it.
AID WILLINGLY EXTENDED ABROAD, BU? SMALL EXPENDITURE
PROPOSED.UNDER S. 1502 NOI FAVORED
Senator SPARKMAN. By the way, Mrs. S aipley, in your very last
paragraph you expressed very nicely that we have lifted many burdens
over the world. We are starting the conference tomorrow morning:
on the foreign aid bill. As it came from the President it carried
$3.8 billion in aid for the other countries of the world, and the economic
assistance part amounted to $2.3 billion.
Mrs. SHIPLEY. Well, I had no figures.
Senator SPARKMAN. We had no hesitancy-and, by the way, I
supported it-in trying to maintain the.ariount that the President
asked for. Yet it would seem to me to be a little hard for the admin-
istration to advocate that kind of a program and at the same time
come in here and say that we cannot afford to help these 600 people
at home who could be taken care of for an extra expenditure of some
$500,000.
Mrs. SHIPLEY. I do not know who could defend that we could not
afford' to do it, if you will pardon me.
Senator SPARKMAN. You heard Mr. Henderson say the Budget
Bureau had laid down the law to the State Department to that effect.
Mrs. SHIPLEY. I do not think the Budget Bureau ever liked me in
my 41 years in the Department of State, so don't expect inc to put
in a word for them.
Senator SPARKMAN. The Budget Bureau laid down the law to the
State Department. They placed the limita~ion on it.
Senator GREEN. Thank you, Mrs. Shiple,T. Has Mr. Boyce come
into the room yet?
Mr. BoYCE. Yes, sir.
Senator GREEN. Would you like to testify now?
Mr. BoYCE. Thank you, sir.
Senator GREEN. We will be glad to hear from you. Do keep your
seat.
STATEMENT OF RICHARD FVFE BOYCE
Mr. BoYcE. Mr. Chairman and gentlemen, I appreciate very much
this opportunity of testifying on behalf of S. 1502.
I have been associated with the DACOR legislation program since
its beginning in 1950, and am familiar with the many problems of re
tired Foreign Service officers. These include health, employment,
maintaining contacts, housing, and usually worst of all, trying to make
ends meet on a fixed income of shrinking do ilars.
There are two basic needs. The first is to bring the annuities of
personnel who retired some years ago up to the level of personnel re-
tiring now. The second is to provide autcmatic adjustment of an-
nuities whenever salary schedules are raised so as to prevent in future
the repetition of the situation which now exists. The same argu-
ments apply in both cases.
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7
 Approved Fo FReleas&R'R9/Aq?/?T,~1AP78-037?g1~A000400020007-7
The special situation of Foreign Service widows has been described
by Mrs. , Broy-herself a Foreign Service widow. The cases of our
-MO most needy members are described by Mrs. Ruth Shipley, well known
to you., who through her more than 40 years personal association with
the Foreign Service, and as chairman of our welfare committee, is,
well acquainted with our problems.
REASONS FOR DACOR SUPPORT OF S. 1502
You are familiar with the many reasons behind our request for pass-.
age of S. 1502. I touch upon only the following:
Foreign Service officers now retired contributed a fixed percentage
of their basic salaries to provide for annuities equal to a reduced, but
reasonably livable income, sufficient to furnish food, shelter, clothing,
and medical expenses in keeping with their retired status and their
years of devoted service as official representatives of our Government,,
and, also, in special recognition not only of the hazards to health and,
upon occasion, to personal safety, but to the many handicaps to edu~
eating their children, to establishing a permanent home in the United
States, to saving any money and many other special factors.
Depending upon. the year they retired, inflation has reduced those
annuities by a quarter to a half their original values, resulting in
great handicap for the majority of retired officers and widows, As
lement
t t
l
o supp
oymen
their ages increase, the ability to find emp
their annuities decreases. Medical expenses increase. The retired
officers are no longer able to live above, or much above, the level of
people on public relief.
We feel that older people have as much right to proper housing,
food, clothing, and other necessities 10 or 20 years after they retire
as they do the first yeas of retirement. Our country does not approve
the customs of primitive peoples who abandon the old and crippled
to starvation, or to death by wild animals. Yet the process of pro-
gressive poverty and misery through shrinking annuities is a compa,
cable situation.
The retired officers thus discriminated against are not many in
number, and their numbers are fewer each year.
is sufficient money in the Foreign Service retirement fund to.
'th
ere
provide for the proposed changes, so what we ask for will not add to,
the burden of the taxpayer.
Thank you very much.
Senator GREEN. Thank you very much, Mr. Boyce. Are there any
questions?
Senator SPARKMAN. No questions, Mr. Chairman. That is a roll,.
call upstairs, and this is the last witness.
Senator GREEN. Is Mrs. Carroll Foster here?
Senator SPARKMAN. I read that letter into the record. I did not
realize fou were here, Mrs. Foster.
Senator GREEN. But your letter is already in the record.
Mrs. FOSTER. You read the letter into the record.
Senator GREEN. We must terminate this hearing. Thank you all
for coming.
Senator SPARKMAN. Thank you, Mr. Chairman.
(Whereupon, at 3:30 p.m., the subcommittee adjourned ?ubject to
the call of the Chair.)
Approved For Release 1999/08/27 : CIA-RDP78-03721A000400020007-7