GENERAL STATEMENT

Chairman HAYDEN. Mr. Hughes, what is your justification for the increases in these expenditures?

Mr. HENDERSON. Mr. Chairman, if I may, I would like to make a brief introductory statement.

Chairman HAYDEN. You may do that.

Mr. HENDERSON. Mr. Chairman and members of the committee, the Department of State has two items in the supplemental request dealing with proposed appropriations and authorizations to use Public Law 480 foreign currencies totaling the equivalent of $5,459,100.

FOREIGN SERVICE BUILDINGS PROGRAM

The first is a request for foreign currencies equivalent to $3,475,000 to accelerate the progress of the Foreign Service buildings program

overseas.

EDUCATIONAL EXCHANGE PROGRAM

The second is a request for foreign currencies equivalent to $1,984,100 for the educational exchange program to provide for additional leader-specialist exchanges, and chairs in American studies and the English language in foreign universities and workshops abroad.

Public Law 85-931, approved September 6, 1958, added to Public Law 480 a new section, 104(1), which authorizes the use of foreign currencies for the acquisition, construction, repair, alteration and furnishing of real property abroad, in addition to funds otherwise made available for such purposes, in such amounts as may be specified from time to time in appropriation acts. This request for $3,475,000 is the first presented by the Department pursuant to the authority contained in section 104(1).

The purpose of taking advantage of this authority at this time is to accelerate the foreign buildings program by using additional surplus. holdings of foreign exchange which, if held over a long period of time, may lose value through the effect of inflation. The order of priority of projects will not be altered by this proposal. Earlier accomplishment of the program will enable the United States to benefit sooner from the facilities which ultimately would be provided under the longrange buildings program of the Department of State.

EXCHANGE OF LEADERS AND SPECIALISTS

Public Law 85-931 also amended section 104 (h) of Public Law 480 to provide for additional financing of the exchange of leaders and specialists as authorized by title II of the U.S. Information and Educational Exchange Act of 1948, as amended, and added a new section, 104(c) which authorized assistance, by grant or otherwise, in support of workshops and chairs in American studies, in such amounts as may be specified from time to time in appropriation acts. The request for $1,984,100, the first presented by the Department pursuant to these amendments, includes planned programs for the utilization of Public Law 480 currencies in 12 countries in fiscal year 1960 for these

purposes.

One of the most effective contributions of the educational exchange program to the improvement of relations between the United States and other countries is the exchange of leaders and specialists. The personal contacts provided by this program do much to sell America to opinion-molding individuals abroad. Likewise, the promotion of American studies, including language, is extremely important because it contributes directly to increased understanding of our institutions and way of life.

I hope sincerely that the committee will act favorably on the Department's requests to supplement these two important programs with surplus local currencies generated by Public Law 480, as amended.

Mr. William P. Hughes, Director, Office of Foreign Buildings, and Mr. Robert H. Thayer, the Special Assistant to the Secretary for the Coordination of International Educational and Cultural Relations, are here to acquaint the committee with the details of the proposed programs as required.

Chairman HAYDEN. All right, Mr. Hughes, proceed.

PREPARED STATEMENT

Mr. HUGHES. Mr. Chairman, with your permission, I will offer for the record a general statement which adds a little to what Mr. Henderson has said.

Chairman HAYDEN. That may be included in the record at this point.

(The statement referred to follows:)

STATEMENT OF THE DIRECTOR OF OFFICE OF FOREIGN BUILDINGS ON THE SUP, PLEMENTAL AUTHORIZATION TO USE FOREIGN CURRENCIES FOR ACQUISITIONOPERATION AND MAINTENANCE OF BUILDINGS ABROAD

Mr. Chairman and members of the committee, I appreciate the opportunity to present to this committee a supplemental appropriation request of $3,475,000, entirely in foreign currencies for the foreign buildings program.

This budgetary request is the first direct implementation of section 104(1) of Public Law 480, as amended.

Public Law 85–931, approved September 6, 1958, amended Public Law 480 to authorize the use of foreign currencies generated by the disposal of surplus agricultural commodities abroad, in addition to funds otherwise made available and in such amounts as may be specified in appropriation acts, to accelerate the progress of the foreign buildings program. As the committee is aware, this program since 1948 has been financed primarily through the use of foreign credits and currencies owed to or owned by the United States.

In reviewing the Department's foreign buildings activities in 1952, on the occasion of approval of an additional $90 million authorization in foreign credits and currencies for the buildings program, the Senate Committee on Foreign Relations in Report No. 1586 cited several points bearing upon the advantages of Government ownership of real property abroad for the diplomatic and consular establishment which are equally pertinent to the request before this committee for Public Law 480 local currencies:

1. The utilization of surplus foreign currency to acquire property converts a frozen asset into a substantial and real asset of the United States.

2. Inflation abroad is reducing the value of foreign currency holdings, and their application to the buildings program ends this depreciation.

3. Land and buildings represent a capital investment, which, if necessary, can be liquidated. Since these invariably are desirable commercial and residential sites, it is unlikely that their value will be diminished appreciably.

4. The consolidation of offices in one building promotes efficiency, and helps immensely with the problem of security.

5. Property ownership by the United States generally is free from taxes which otherwise are reflected as an item of cost in leasing or rental arrangements.