Other similar commodity substitutions or transfers of unused purchase authorization funds were noted, such as tobacco for lard; barley for corn: lard for wheat, tobacco, and cotton; corn for tallow and oil; wheat for corn, evaporated milk and cheese; cottonseed and, or soybean oil for rice, and so forth.

Mr. Tierney, FAS, commented on the substitution of commodities as follows:

The dollar value of commodities to be financed are contained in title I agree. ments. As indicated previously the title I agreement sets up the framework within which the participating country may apply to FAS for the issuance of pur chase authorizations. If application is made and purchase authorization issued and accepted, the United States is obligated to finance the transaction within the terms and conditions of the agreement and the purchase authorization.

In implementing the agreement, it has been necessary in many cases to change the commodity composition of the original agreement. It usually develops that the need for particular commodities in the importing country may have increased or decreased since the agreement was negotiated, based principally on crop conditions in that country. Therefore, the value of certain commodities may be increased and others decreased to meet this situation. We may also be requested to finance an entirely new commodity in substitution for a commodity originally provided for in the agreement.

The switching of very small quantities of commodities within an agreement (such as the use of amounts remaining unused under several purchase authorizations) is accomplished through the issuance and acceptance of purchase authori zations. Substitutions of larger quantities and the introduction of new commodities is accomplished through an exchange of notes between the United States and the participating country. Thus the agreement is amended through the same formal processes that set up the original agreements.

The U.S. attitude toward commodity substitution will, of course, depend upon the character of the substitution. For the most part, if a country cannot see its way to move particular commodities it is to our advantage to accept substitution so that some other commodity is moved rather than to have the agreement only partly implemented. Although the programing of certain commodities is emphasized because of being in a worse surplus situation, arrangements to substitute commodities are made so as to permit as large a movement of each surplus commodity as possible.

III. TITLE II, PUBLIC LAW 480

Title II, as amended, authorizes CCC to make surplus agricultural commodities available for (1) transfer to any nation friendly to the United States to meet famine or other urgent or extraordinary relief requirements, and (2), to friendly but needy populations regardless of the friendliness of their government.

The ICA is responsible for administering this program. This is i addition to sales for foreign currencies under sections 550 and 40% of the Mutual Security Act.

Up to $800 million is authorized for reimbursing CCC for its investment in the commodities and other costs, including ocean freight charges from U.S. ports to ports of entry abroad. The title II program of assistance began in fiscal year 1955 and has been extended until December 31, 1959. In addition, title II funds may be used to pay ocean-freight costs on surplus food donated through the U.S. voluntary agencies and intergovernmental organizations under title III of Public Law 480.

The schedule immediately following shows the cost to CCC of commodities authorized for each country from the inception of the program (fiscal year 1955) through December 31, 1958. Following this is another schedule showing the quantities of commodities authorized for each foreign country.

A summary of the title II program as of December 31, 1958, showing the estimated balance available for completion of the program under present authorization is set forth as follows (in thousands of dollars):

Total authorized by law.

Less amount used:

$800, 000

Commodity authorizations issued..........

$400,586

Advance to ICA for ocean transportation (title II and

Title III of the act covers donations for domestic use and for distribution abroad by nonprofit voluntary agencies and intergovernmental organizations as well as CCC barter activities.

A. SECTION 302. DOMESTIC DONATIONS

Domestic donations are made from CCC stocks to the Bureau of Indian Affairs and to State, Federal, or private agencies for use in nonprofit school-lunch programs, in the assistance of needy persons, and in charitable institutions, including hospitals, to the extent that needy persons are served.

The following schedule shows the domestic distribution from the enactment of Public Law 480 through December 31, 1958:

Domestic distribution of CCC-owned commodities under sec. 302 of Public Law 480 from July 1, 1954, through Dec. 31, 1958

B. SECTION 302. FOREIGN DONATIONS

Section 302 authorizes donations of surplus foods in CCC stocks to U.S. nonprofit voluntary agencies registered with and approved by the Advisory Committee on Voluntary Foreign Aid of ICA after provision has been made for the needs of users of surplus foods in this country. Donations may also be made for distribution abroad by intergovernmental organizations, such as United Nations International Children's Emergency Fund.

The schedule which follows sets forth the quantities of various commodities approved for donation through voluntary agencies for