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1962 actual

1963 estimate

1964 estimate

authority

able for

Program and Financing (in thousands of dollars) --Continued

basis. Due to the imminent exhaustion of this borrowing authority, a direct appropriation of $108 million was enacted for 1959, thus providing cumulative financing

authority of $2,208 million. Financing:

The following agencies have been designated to carry Revenues and other receipts:

out programs to expand production capacity as follows: Minerals and metals production program

General Services Administration.-Purchase and resale (General Services Administration):

of metals, minerals, and machine tools, and research and Proceeds from sale of capital assets.. 482 Revenue.

37.833 30,095

pilot plant operations to develop new materials, and new Nonoperating revenue

14

techniques for utilizing low-grade domestic ores. Machine tool program (General Services

Department of Agriculture.-Purchase and resale of Administration): Proceeds from sale of machine tools.

agricultural commodities.

50 400 Revenue...

334
193

136

Department of the Interior.---Loans and grants to enMineral exploration program (Interior):

courage exploration for strategic and critical minerals. Loans repaid

370 350 350 TY ry Department.--Loans to domestic private Domestic lending program (Treasury): Loans repaid.

enterprises. 11,997 3,768

8,905 Recovery of loan written off.

3

Export-Import Bank of Washington.-Loans to foreign Revenue..

6,434 6,061 5,705 private enterprises. Foreign lending program (Export-Import

Programs must be certified as essential to the national Bank):

defense by the Office of Emergency Planning. Loans repaid

15,023 Revenue...

408

Allocations of borrowing authority by the Office of

Emergency Planning and net borrowing from the U.S. Total revenue and other receipts--- 72,948 40,867 43,510 | Treasury as of June 30, 1962, were as follows (in thousands Unobligated balance brought forward

of dollars): (authorization to expend from public debt

Borrowing

Net atailreceipts) (-): Obligations in excess of

Borrowings availability-14,931-88,795 -130,896

Authorized agency

allocated outstanding borrowing Unobligated balance transferred to "Salaries

General Services Administration 1.

1,854,000 1,789,700 64,300 and expenses, Office of Administrator."

Treasury Department.--

106,600 90,550 16,050 General Services Administration (5 U.S.C.

Department of Agriculture..

76,400 64,578 11,822 630d) (-)...

-13
Department of the Interior-

35,800 31,000 4,800 Unobligated balance carried forward (author

Export-Import Bank of Washington.

20,500

20,500 ization to expend from public debt re

Office of Emergency Planning-reserve--- 6,700

6,700 ceipts): Obligations in excess of availability 88.795 130.896 168,114

Total...--

2,100,000 1,975,828 124, 172 Financing applied to program..

146,799 82,968 80,728

1 In addition a direct appropriation of $108 million for liquidation of borrowing

from the Treasury was applied to General Services Administration borrowings, thus Summary of Sources and Application of Funds (in thousands of dollars)

providing total financing of $1,962 million to that agency.

As one of the inducements for expanding production Obligations (from program and financing) 146,799 82,968 80,728 most of the contracts provide a guaranteed market for the Increase (-) or decrease in gross unpaid obli

production from expanded facilities. Significant amounts gations.

-62,857 6,916

16_35,965 of materials have been delivered to the Defense Production Gross expenditures.

83.942 89,884 116,693

Act inventory under these contracts. Investment in

inventory of $1,484 million on June 30, 1961, and $1,500 Revenues and other receipts (from program

million on June 30, 1962, is expected to decrease to $1,464 and financing).

72,948 40,867 43,510 million by June 30, 1964. Increase (-) in accounts receivable, net.

-219 -1,040 --970

Progress has been made in disposing of Defense ProducApplicable receipts----

72,729 39,827 42,540 tion Act materials primarily by sales to other government

agencies and industry and steps are being taken to increase Budget expenditures...

11,213 50,057 74,153

and accelerate the disposal program for these materials

wherever this can be accomplished without undue effects 1 Balances of selected resources are identified on the statement of financial con.

on the market.

Interest continues to accrue, payable by the fund to the Under the Defense Production Act of 1950, as amended, Treasury, not only on the borrowings invested in loans designated agencies are authorized with Presidential and inventories, but also on the borrowings which have approval to incur obligations and make expenditures to been used to cover expenses and losses. Since there is no secure expanded production of critical materials in fur- way for the fund to recover its realized losses or reduce intherance of the defense effort. The program is conducted ventories appreciably in a short period of time, the perpetuprimarily through a revolving fund financed by borrowings ation of the interest-bearing arrangement on such exfrom the Treasury. The amount borrowed may not pended capital merely makes the cumulative deficit even exceed $2.1 billion outstanding at any one time, but the greater as the interest accrues. act permits contingent liabilities to be considered as General Services Administration.-Financing of $1,962 obligations only to the extent of the probable ultimate million has been authorized by the Office of Emergency net costs to the United States, rather than in the full Planning as of June 30, 1962, to cover the expansion of amount of the gross commitments outstanding. To the productive capacity for strategic metals, minerals, and extent that money must be expended to fulfill commit- machine tools. This amount includes $1,854 million in ments even though the expenditures are considered to be borrowing authority and a direct appropriation of $108 ultimately recoverable (through repayment of loans and million made in 1959. sale of inventories, for example), portions of the borrow The bulk of the expansion programs have been coming authority are used for working capital on a current | pleted, with the major problems now being custody, main

ditions.

1964 eslim ale

9

un

EXPANSION OF DEFENSE PRODUCTION-Con. ing authority will not be required during

In preparing the 1964 budget the Offic Public enterprise funds-Continued

Exploration has assumed that interest w REVOLVING FUND, DEFENSE PRODUCTION ACT-Continued

accrue. Interest accruals will exceed royal

interest payable on notes of $5 million whi tenance, and eventual disposition of the materials and on July 1, 1964, will necessitate additional facilities. The exercise of option rights by contractors The last 3 of the 1,159 contracts execu has been carefully examined with a view to reducing Defense Minerals Exploration Administri deliveries to the Government as far as possible within the were terminated and certified during 1962 terms of the contracts whenever basic stockpiling objec- the total certified. Royalty obligations rer tives have been attained. Between July 1, 1957, and contracts amount to $12.3 million. Royal June 30, 1962, a reduction of $351.3 million in gross com tion from any of these projects within the s mitments under the Defense Production Act was attained (usually 10 years-a few of 31 years) w through renegotiation of contracts.

toward the Government funds spent. Ro; A summary of transactions involving strategic minerals duction from Defense Minerals Exploratio and metals (including work-in-process inventory) under tion projects total $4.3 million and are esti this fund follows (in millions of dollars):

thousand each for 1963 and 1964. Loss 1962 aclual 1963 eslimate

793 closed contracts stand at $6.7 million, Opening inventory.-1,484 1,500 1,489

Treasury Department. The function of m Deliveries during year.

57
28

9

ministering loans to private business enterpi Total available... 1,541 1,528 1,498 authority of section 302 of the Defense Pro

1950, as amended, was assigned to the Se Less cost of goods sold:

Treasury by Executive Order 10489, dated Sales receipts.

38
30

28 Loss on sales.

3

1953. Applications for loans are consider 6

certification of essentiality by the Office Cost of goods sold...

41
39
34 Planning

No new loans were authorized during 19 Closing inventory...

1,500 1,489 1,464

ticipated that there will be no additional los As of June 30, 1962, a total of $7,508.7 million in gross

in 1963 and 1964. However, one loan w value of contracts has been entered into by the General under a deferred participation commitment Services Administration under Defense Production Act The changes in loans and deferred particip authority. Of this amount a total of $7,218 million has ments estimated for 1963 and 1964 are E been completed as measured by procurement, expiration thousands of dollars): of contractors options on guaranteed production, completion of facilities, completed research, etc. The balance of $290.7 million includes a total of $201 million of com

Outstanding June 30, 1962..

12 modity contracts, of which probable deliveries are esti Repayments 1963.. mated at $40.9 million. Department of Agriculture.—The purchase, management,

Outstanding June 30, 1963.

Repayments 1964.. and resale of agricultural commodities, except forest products, were carried out by the Commodity Credit Corpora Outstanding June 30, 1964.

10€ tion, which was reimbursed from this fund for the net costs involved. The Secretary of Agriculture has been allocated borrowing authority for this purpose.

Export-Import Bank of Washington.-Pur All programs certified to the Secretary of Agriculture tion 311 of Executive Order 10480 of Aug under the Defense Production Act were completed by 1961.

which superseded Executive Order 10161, Department of the Interior.-Department of the Interior Import Bank, with funds provided under s operations to expand defense production under section 303

the Defense Production Act of 1950, as an of the Defense Production Act of 1950, were limited to the sponsible for making and administering all encouragement of exploration for strategic and critical section 302 of the act, upon receipt of mineral commodities. The operations were administered essentiality issued by the Director of Defei by the Defense Minerals Exploration Administration tion or the General Services Administrato until September 11, 1958, when the Office of Minerals expansion, development, or production so Exploration was established under authority of Public

carried on in foreign countries. Law 85-701. As successor agency, the Office of Minerals No certifications were received and no ne Exploration was empowered to use appropriated funds to authorized in 1962. The Bank does not ai administer the Defense Minerals Exploration Administra- additional certifications, consequently, no a tion contracts under which royalty obligations remain, ligational authority will be required. as well as to conduct a similar exploration assistance pro The net budget receipts for 1962 were gram.

and the cumulative net receipts from E On June 30, 1962, borrowing authority certified by the Bank's operation under this program was $5,0 Office of Emergency Planning to Interior amounted to The balance of the borrowing authority all $35.8 million and $31 million had been borrowed. On Bank and available in 1962 was $20.5 million. July 1, 1962, notes totaling $16 million became due with of August 15, 1962, the Office of Emerger interest of $1.5 million which necessitated the executing canceled the entire amount. All obligations of a new note for $17.1 million and increased the total Treasury were repaid during 1962. of notes outstanding to $32.1 million. The tables attached

One loan with a balance of $32 thousand was have been prepared on the assumption additional borrow-l and past due at June 30, 1962; efforts to reci

L

Deficit, end of year (-)......

PRODUCTION-Con.

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Assets:
Treasury balance....

14,652

15,103 4,748 5,088 Accounts receivable, net.

4,110 4,329 5,369 Selected assets:

6.339 Advances to other Government

agencies, agents, and em-
ployees

15
4
4

4 Supplies --

190

8
8

8 Deferred charges..

951

951 951 951 Commodities for sale. 1,483,656 1.499,946 1.489,466 1,464.063 Loans receivable, net.

131, 151 108,880 104,731 95,476 Land, structures and equipment, net....

21,501 15,381 14,666 14.350 Total assets.

11,656,226 1,644,601 1,619,943 1,586,279 Liabilities: 2 Current:

Accrued interest payable.. 131,282 196,596 211,816 183.023
Other ....-

3,234 2,994 2,984 2,984 Total liabilities..

134,516 199,590 214,800 186.007 Government equity: Interest-bearing capital: Start of year..

1.970,473 1.964,151 11,975,828 2.015,530 Borrowings from Treasury, net. -6,322 11.677 39,702 74,493

1,964,151 1,975,828 2,015,530 2,090,023

3

-112

ing authority will not be required during 1963 and 19. In preparing the 1964 budget the Office of Minera

Exploration has assumed that interest will continue 2. EDUCTION ACT-Continued accrue. Interest accruals will exceed royalty receipts en Eon of the materials and

interest payable on notes of $5 million which will mate>

on July 1, 1964, will necessitate additional borrowing, on rights by contractors with a view to reducing Defense Minerals Exploration Administration progn

The last 3 of the 1,159 contracts executed under to far as possible within the were terminated and certified during 1962 raising to

basic stockpiling objec- the total certified. Royalty obligations remaining on # ween July 1, 1957, and contracts amount to $12.3 million. Royalties on prody 51.3 million in gross com tion from any of these projects within the specified pero

: luction Act was attained (usually 10 years--a few of 31 years) will be appliu s.

toward the Government funds spent. Royalties on priolving strategic minerals duction from Defense Minerals Exploration Administrrocess inventory) under tion projects total $4.3 million and are estimated at $ dollars):

thousand each for 1963 and 1964. Losses realized 0 actual 1963 estimate 1964 estimate 793 closed contracts stand at $6.7 million. _184 1,500

1,489

Treasury Department.—The function of making and a!. 57 28

9

ministering loans to private business enterprises under the 41 1,528 1,498 authority of section 302 of the Defense Production Act of

1950, as amended, was assigned to the Secretary of the

Treasury by Executive Order 10489, dated September 2 338 30

28

1953. Applications for loans are considered only upe: 3 9

certification of essentiality by the Office of Emergenes 1 39

34 Planning.

No new loans were authorized during 1962. It is al1,489 1,464

ticipated that there will be no additional loans authorized 7,508.7 million in gross

in 1963 and 1964. However, one loan was purchased d into by the General under a deferred participation commitment during 1962 fense Production Act The changes in loans and deferred participation commit

of $7,218 million has ments estimated for 1963 and 1964 are as follows (in ocurement, expiration thousands of dollars): d production, comple, etc. The balance of $201 million of com- Outstanding June 30, 1962.. le deliveries are esti- Repayments 1963.

117,539 659 Outstanding June 30, 1963.

- 280 irchase, management, Repayments 1964. s, except forest proddity Credit Corpora Outstanding June 30, 1964....... his fund for the net Agriculture has been is purpose.

tion 311 of Executive Order 10480 of August 14, 1953,

- 169

-68,022 -69,226 -71,639

6

482

50 -5,733

400 -400

0

-5.201

Net loss from sale of assets.. Transfers from other sources: Minerals and

metals program: Supplies.. Transfers to other agencies or funds net: Minerals and metals program: Equip

14

End of year..

ment.

Machine tool program: Machine tools...

-51 -20

Non-interest-bearing capital:
End of year.

515 515 515 Deficit (-)

- 442,956-531,332-610,903 -690,266 Total Government equity... 1.521.710 1.445,011 (1,405,143 1.400,272

515

-5,258

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-80,998–78,230 -77,759

Analysis of Government Equity and Undrawn Authorizations (in thousands of

dollars)

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Undisbursed obligations ?
Unobligated balance.
Invested capital and earnings.

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Net nonoperating loss (-).
Net loss (-) for the year, General

Services Administration....
Department of Agriculture: Expense (net loss

(-) for the year)
Department of the Interior: Expense (net loss

(-) for the year)...
Treasury Department:

Revenue.
Expense..

Net operating income.
Nonoperating income or loss (-):
Writeoft of loans...
Recovery on loan written off.
Increase (-) in valuation allowance.
Net nonoperating loss (-) ------
Net income or loss (-) for the year,

Treasury Department...
Export-Import Bank of Washington:

35,026

32.809 10.683 3,511 - 14,931 -88,795 -130,896 -168,114 1.637,464 1,625,169 1,609,826 1.574,852 1,657,559 1,569,183 1,489,613 1,410,249 -135,849 - 124,172-84,470 -9,977

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Total Government equity... 1,521,710 1,445,011 (1,405,143 1,400,272

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Export-Import Bank of Washington.— Pursuant to seeFetary of Agriculture 'e completed by 1961.

which superseded Executive Order 10161, the ExportEment of the Interior Import Bank, with funds provided under section 364 of on under section 303

the Defense Production Act of 1950, as amended, is re 1, were limited to the sponsible for making and administering all loans under rategic and critical section 302 of the act, upon receipt of certificates of s were administered essentiality issued by the Director of Defense Mobilizaion Administration | tion or the General Services Administrator, where the

Office of Minerals expansion, development, or production so financed was authority of Public carried on in foreign countries. e Office of Minerals No certifications were received and no new loans were propriated funds to

authorized in 1962. The Bank does not anticipate an oration Administra- | additional certifications, consequently, no additional obobligations remain,

ligational authority will be required. ation assistance pro

The net budget receipts for 1962 were $15.3 million

and the cumulative net receipts from Export-Import ity certified by the Bank's operation under this program was $5,019 thousand. erior amounted to The balance of the borrowing authority allocated to the

en borrowed. On Bank and available in 1962 was $20.5 million. Under date n became due with of August 15, 1962, the Office of Emergency Planning ated the executing canceled the entire amount. All obligations due the US increased the total | Treasury were repaid during 1962. Che tables attached One loan with a balance of $32 thousand was outstanding additional borrow. I and past due at June 30, 1962; efforts to recover are cut

300

2

-32

Net operating income. Nonoperating loss (-)..--Net income or loss (-) for the year,

Export-Import Bank of Washington...

Net loss for the year (-).-Analysis of deficit (-): Defcit start of year (-) Funds transferred out, General Services Administration (5 U.S.C. 630d) ---

11 Personnel compensation:

Permanent positions.
Positions other than permanent..
Other personnel compensation...

Total personnel compensation
12 Personnel benefits....
21 Travel and transportation of persons.

Payment to interagency motor pools. 22 Transportation of things. 23 Rent, communications, and utilities. 24 Printing and reproduction.. 25 Other services.

Payment to Administrative operations

fund..

Services of other agencies. 26 Supplies and materials. 31 Equipment.----33 Investments and loans.

446 33 20 3

300

543 40 12 2 1 17

3 5,878

398 31 20 4

-32

-88,363 -79,571 -79,364

-442,956 -531,332-610,903

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644

6 40,725

-531,332-610,903 -690,266

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11,791

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General and special funds:

EXPENSES OF MANAGEMENT IMPROVEMENT For expenses necessary to assist the President in improving the management of executive agencies and in obtaining greater economy and efficiency through the establishment of more efficient business methods in Government operations, including services as authorized by section 15 of the Act of August 2, 1946 (5 U.S.C. 55a), at rates for individuals not to exceed $75 per diem, by allocation to any agency or office in the executive branch for the conduct, under the general direction of the Bureau of the Budget, of examinations and appraisals of, and the development and installation of improvements in, the organization and operations of such agency or of other agencies in the executive branch, [$200,000] $100,000, to remain available until expended, and to be available without regard to the provisions of subsection (c) of section 3679 of the Revised Statutes, as amended. (Treasury-Post Office Departments and Executive Office Appropriation Act, 1963.)

FOREIGN ASSISTANCE The foreign assistance program is intended to preserve free world security and stability and to foster the dynamic and independent growth of developing nations. Activities under the Foreign Assistance Act take several principal forms: (a) supply of military materiel and equipment; (b) training of foreign military personnel; (e) loans and grants in support of capital projects and development programs; (d) technical assistance; (e) supporting assistance for maintenance of free world security where it is most directly or gravely threatened; (f) contributions to programs of the United Nations and other international agencies; (g) encouragement of private investment in less developed countries.

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FOREIGN [Aid (MUTUAL SECURITY)] ASSISTANCE For expenses necessary to enable the President to carry out the provisions of the Foreign Assistance Act of 1961, as amended, to remain available until June 30, [1963] 1964, unless otherwise specified herein, as follows: (22 U.S.C. 2151-2406; 76 Stat. 1163; Foreign Aid and Related Agencies Appropriation Act, 1963.)

1962 actual

1963 estimate

1964 estinate

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Program by activities:
Improving the management of executive

agencies (costs-obligations).. Financing:

Unobligated balance brought forward (-)... Unobligated balance carried forward..

262

1963 estimate

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1964 estimate

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76,600

MILITARY ASSISTANCE

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Program by activities-Continued
Sales operations:
17. Reservations for requirements ordered

from U.S. military services (69 Stat.
438) -

-1,832 65,000 25.000 18. Direct financing of sales...

18,420 79,579 55,071 Total, sales operations....

16,587 144,579 80,071 Total program.

1,591,632 1,403,827 1,535,071 Increase (-) or decrease in outstanding res

ervations for requirements ordered from
military services (69 Stat. 438).

46,930 306,438-178,534 Total obligations

1,638,562 1,710,265 1,356,537 Financing: Balance brought forward: Unobligated and

unreserved (-) Grant aid...

- 14,246-24,248 -25,000 Military sales receipts.

-43,833-39,985 -5,406 Recovery of prior year obligations (-).

-6,247 Collections of military sales (-)-

-14,572 -45,000 -52,800 Increase or decrease (-) in outstanding res

ervations for requirements ordered from
military services (69 Stat. 438)..

- 46.930-306, 438 178,534 Balance carried forward: Unobligated and

unreserved: Grant aid....

24,248 25,000 25,000 Military sales receipts.

39,985 5, 406

3,135 Unobligated and unreserved balance lapsing

32 New obligational authority

1,577,000 1,325,000 1,480,000

1962 actual

1963 estimate estimate

3,085

3,250

Military assistance: For expenses authorized by section 504(a) of the Foreign Assistance Act of 1961, as amended, including administrative expenses authorized by section 636(g)(1) of such Act, which shall not exceed [$24,500,000) $25,000,000 for the current fiscal year, and purchase of passenger motor vehicles for replacement only for use outside the United States, [$1,325,000,000: Provided, That none of the funds contained in this paragraph shall be available for the purchase of new automotive vehicles outside of the United States] $1,480,000,000.

Unobligated balances as of June 30, [1962] 1963, of funds heretofore made available under the authority of the Foreign Assistance Act of 1961, as amended, are, except as otherwise provided by law, hereby continued available for the fiscal year [1963] 1964 for the same general purposes for which appropriated and amounts certified pursuant to section 1311 of the Supplemental Appropriation Act, 1955, as having been obligated against appropriations heretofore made under the authority of the Mutual Security Act of 1954, as amended, and the Foreign Assistance Act of 1961, as amended, for the same general purpose as any of the subparagraphs under "Economic Assistance”, are hereby continued available for the same period as the respective appropriations in such subparagraphs for the same general purpose[: Provided, That such purpose relates to a project previously justified to Congress and the Committees on Appropriations of the House of Representatives and the Senate are notified prior to the reobligation of funds for such projects and no objection is entered by either Committee within 60 days of such notification]. (Foreign Aid and Related Agencies Appropriation Act, 1963; authorizing legislation to be proposed.)

Program and Financing (in thousands of dollars)

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Program by activities:
Grant aid operations:
Reservations for requirements ordered from

U.S. military services (69 Stat. 438):
1. Aircraft.
2. Ships.
3. Tanks, other vehicles, and weapons..
4. Ammunition..
5. Missiles..
6. Electronic equipment.
7. Military public works.
8. Other

Subtotal.....
Obligations for requirements other than

through reservations:
9. Offshore procurement.
10. Supply operations
11. Training --
12. Administration..
13. Contributions to international mili-

tary headquarters and agencies.. 14. Contributions to construction of fa

cilities in other countries:
(a) Infrastructure..

(b) Military public works. 15. Research and development. 16. Other activities.

Subtotal..

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Average number of all employees... Number of employees at end of year.

IMPROVEMENT

162,019 146,787 101,369 24,050

76,586 166,080 108,249 24,927

91,211 169,971 108,620 25,000

IPROVEMENT

The military assistance program is designed to strengthen the security of the free world by contributing to the development, maintenance, and training of modern military forces.

More than 60 free-world countries are receiving grant aid under this program. They and some others are eligible to buy military equipment on cash or credit terms. Their combined military forces are numerically much greater than the U.S. Armed Forces, and provide freeworld defensive capability, depth in reserves, and flexibility. Many of these countries have joined in regional defense pacts, such as North Atlantic Treaty Organization, Southeast Asia Treaty Organization, and Central Treaty Organization, or in bilateral defense arrangements with the United States. Most of the U.S. contributions to these regional organizations are derived from military assistance program funds.

Most of the military equipment and supplies which the United States provides to its foreign allies are obtained by placing orders with the U.S. military services. Military assistance funds are reserved when the orders are placed,

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FOREIGN ASSISTANCE

The foreign assistance program is intended to preserv? ident in improving the free world security and stability and to foster the dynamic aining greater economy more efficient business

and independent growth of developing nations. Activities g services as authorized

under the Foreign Assistance Act take several principal 5 U.S.C. 55a), at rates forms: (a) supply of military materiel and equipment; (6) , by allocation to any the conduct, under the in support of capital projects and development programs

training of foreign military personnel; (c) loans and grails ation of improvements / (d) technical assistance; (e) supporting assistance for h agency or of other maintenance of free world security where it is most directs ] $100,000, to remain or gravely threatened; (f) contributions to programs of the without regard to the United Nations and other international agencies

the Revised Statutes, tments and Executive encouragement of private investment in less developed

countries.

12,885

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