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and cultural exchanges are designed to facilitate sympathetic understanding of American life, culture, and institutions by other peoples. Another major role of these programs is to demonstrate to the people of other nations the way in which American policies and objectives are in keeping with their own aspirations.

This budget recommends that expenditures in the fiscal year 1958 for the entire range of foreign information and exchange activitiesincluding exchanges under the Fulbright and Smith-Mundt legislation, and cultural and trade fair programs abroad-be increased by 42 million dollars over the 1957 estimate. This will permit extension of this work within the free world, especially in Asia and Africa, as well as providing more information to those peoples not yet free. Emphasis will be placed on person-to-person contacts on both official and unofficial levels.

Conduct of foreign affairs.-The tasks of the Department of State have been steadily extended, both in Washington and in a growing number of overseas posts. The budget recommendations continue to strengthen the staff and facilities of the Department. Estimated expenditures in 1958 for the conduct of foreign affairs, including buildings, are 194 million dollars, 40 million dollars more than in 1957.

COMMERCE AND HOUSING

The capital investment in several Federal programs for commerce and housing plays an important role in the continued growth of our economy. In the fiscal year 1958, the Government will (1) carry

forward improvements in transportation services, (2) acquire facilities and equipment essential to provide better and more economical postal service, and (3) assist local communities to complete an increasing number of projects to foster orderly community development and to remove slums. At the same time, the Government is taking steps to aid buyers of homes obtain a reasonable share of the savings which help to supply the credit necessary to maintain a satisfactory level of private housing construction.

Budget expenditures for commerce and housing programs, in the aggregate, are expected to decline from 2.3 billion dollars in the fiscal year 1957 to 1.7 billion dollars in 1958. Principal changes include the proposed adjustments in postal rates and other legislation designed to reduce the postal deficit and the anticipated reductions in temporary Government loans to finance mortgage purchases. Other expenditures will rise to help meet the demands of a growing economy for transportation facilities, housing aids, and community development.

Promotion of aviation.-Civil and military use of the Federal airways system continues to grow rapidly. The increasing number of commercial, private, and military aircraft must be able to fly safely and on schedule. The military jet aircraft already in use and the jet airliners that will be operating by 1960 create a whole new range of problems. The capacity of the air traffic control system must keep pace.

The comprehensive appraisal of emerging needs for aviation facilities announced in the budget message last year will be completed soon. This will set the broad outline for the Federal airways system of the future. In the meantime, we must install now the best available traffic control equipment and techniques to keep abreast of the growing demand.

The 413 million dollars of new obligational authority recommended for the Civil Aeronautics Administration for 1958 include 150 million dollars to procure and install airways facilities. These include radar installations, better communications, and airport approach lights. In addition, a supplemental appropriation of 26 million dollars will be requested in 1957 to cover the initial cost of integrating two existing short-range air navigational systems into a single system capable of meeting the navigational needs of all users of the airspace.

The recommended 1958 appropriations for the Civil Aeronautics Administration include 195 million dollars to operate the Federal airways system and to maintain high safety standards in aircraft design and operation. The 1958 estimate is about 40 percent above the 1957 amount.

Grants to communities for airport construction and improvement will increase. To meet the need for an additional airport for the District of Columbia, a supplemental appropriation of 35 million dollars will be requested for the fiscal year 1957. Although the Congress has been studying alternative solutions, the proposal for a new airport at the Burke, Virginia, site still appears to be the best longterm solution to Washington's airport needs.

The success of this country in military and civil aeronautics depends heavily on the research and development programs of the National Advisory Committee for Aeronautics. The recommended appropriations of 118 million dollars will enable the Committee to give further emphasis to basic research upon which the development of the aircraft of the future must depend. This amount will also permit the acquisition of new, highly specialized facilities for investigation of problems encountered under widely varying conditions of flight.

Estimated budget expenditures in the fiscal year 1958 for all Federal aids to aviation, including the continuing subsidy payments by the Civil Aeronautics Board to certain airlines, will total 464 million dollars, 85 percent more than the amount spent in 1956.

Government aids to aviation confer substantial special benefits upon the users of the airspace. As the cost of providing these benefits rises, it becomes increasingly appropriate for the users to share with the general taxpayers in paying for them.

Highways.-Legislation enacted last year authorized the largest roadbuilding program in history. In accordance with this legislation, expenditures for the Federal-aid highway programs of the Department of Commerce in 1957 and later years will be made from a separately financed highway trust fund. The receipts and expenditures of the trust fund are discussed later in this section.

Budget expenditures for highways are now limited to forest highways and other direct Federal construction. They are estimated at 42 million dollars in the fiscal year 1958.

Promotion of water transportation.-The worldwide shortage of modern oceangoing ships emphasizes the importance of the ship replacement program begun 2 years ago by the Department of Commerce. Most of the United States merchant fleet was built during World War II and should be replaced over the next 15 to 20 years. In order that construction may be scheduled on an orderly basis, the Department is entering into long-term contracts with subsidized ship operators for the replacement of their ships. It is also guaranteeing ship mortgages and using other incentives which do not require substantial expenditures of Federal funds to encourage construction of other new ships.

As the next installment in the replacement program, the budget includes 120 million dollars in 1958 appropriations for ship construction and for maritime research. The 1958 program would permit construction of a new sister ship for the superliner United States and several smaller ships. Construction will be well underway in 1958 on the nuclear-powered merchant ship being built jointly by the Department of Commerce and the Atomic Energy Commission under previous appropriations.

Expenditures for ship construction will not increase substantially until the fiscal year 1959, primarily because of the long period required to get work underway. Other expenditures for water transportation are primarily for the Coast Guard and for ship operating subsidies.

Postal service. Over the past few years the Post Office Department has introduced major economies in the processing and handling of mail. These economies, however, have only partially offset the rising costs resulting from a larger mail volume, higher salaries, increased prices for supplies and equipment, and especially the extension of city delivery service to unprecedented numbers of new suburban residential developments. As a result, if present postal rates are not adjusted to cover costs, net expenditures of 642 million dollars will be required in the fiscal year 1958 to make up for insufficient postal receipts.

The adjustments in rates recommended in this budget are designed to increase postal revenues by 654 million dollars in the fiscal year 1958. If this recommendation is approved by the Congress, a supplemental appropriation, tentatively estimated at 70 million dollars, will be proposed to permit investment in equipment and facilities necessary for more efficient handling of the ever-increasing volume of mail. The budget figures reflect these recommendations. Also, the Post Office Department should be specifically reimbursed for the cost estimated at 28 million dollars in 1958-of services it is required by law or international agreement to perform free or at reduced rates for nonprofit associations and other special groups.

Community development and facilities.-The first slum clearance project under legislation enacted in 1949 was brought to a close last spring, and an estimated 40 more projects will be completed by the end of 1958. More important, by that time 285 projects will be in process of actual clearance and redevelopment, and plans will be underway for 246 more-many of these in smaller cities. In addition to the extensive private investment in redeveloped areas, these 572 projects will ultimately involve total costs of more than 2.5 billion dollars, of which Federal capital grants will provide an estimated 1.2 billion dollars.

To underwrite the Federal share of the cost of this program, legislation is recommended to provide new obligational authority of 250