An Act to promote the foreign policy, security, and general welfare of the United States by assisting peoples of the world in their efforts toward economic and social development and internal and external security, and for other purposes.
PL 87-195 (S.1983), enacted 09/04/1961

424 
PUBLIC LAW 87-194-SEPT. 1, 1961 
[75 S T A T . 
Public Law 87-194 
September 1, 1961 
[H. R. 7809] 
Air Force o f f l -
70A Stat. 498. 
AN ACT 
To improve the active duty promotion opportunity of Air Force ofllcers from the 
grade of major to the grade of lieutenant colonel. 
Be it enacted hy the Senate and House of Representatives of tJie 
United States of America in Congress assembled^ That, during the 
period beginning on the date of enactment of this Act and ending 
at the close of June 30, 1963, any authorized strength prescribed for 
the grade of lieutenant colonel by or under section 8202 of title 10, 
United States Code, may be exceeded by not more than four thousand. 
Approved September 1, 1961. 
September 4. 1961 
[S.1983] 
The Foreign As-
s i s t a n c e 
Act of 
1961. 
Post, 
p. 719. 
Public Law 87-195 
AN ACT 
To promote the foreign policy, security, and general welfare of the United States 
by assisting peoples of the world in their efforts toward economic development 
and internal and external security, and for other purposes. 
Be it enacted hy the Senate and House of Representatives of the 
United States of America in Congress assembled^ 
PART I 
Act for 
Interna-
tional 
D e v e l o p -
ment of 1961. 
CHAPTER 1—SHORT TITLE AND POLICY 
SEC. 101. SHORT TITLE.—This part may be cited as the "Act for 
International Development of 1961". 
SEC. 102. STATEMENT OF POLICY.—It is the sense of the Congress 
that peace depends on wider recognition of the dignity and interde-
pendence of men, and survival of m e institutions in the United States 
can best be assured in a worldwide atmosphere of freedom. 
To this end, the United States has in the past provided assistance to 
help strengthen the forces of freedom by aiding peoples of less devel-
oped friendly countries of the world to develop their resources and 
improve thfir living standards, to realize their aspirations for justice, 
education, dignity, and respect as individual human beings, and to 
establish responsible governments. 
The Congress declares it to be a primary necessity, opportunity, and 
responsibility of the United States, and consistent with its traditions 
and ideals, to renew the spirit which lay behind these past efforts, and 
to help make a historic demonstration that economic growth and po-
litical democracy can go hand in hand to the end that an enlarged 
community of free, stable, and self-reliant countries can reduce world 
tensions and insecurity. 
It is the policy of the United States to strengthen friendly foreign 
countries by encouraging the development of their free economic 
institutions and productive capabilities, and by minimizing or elimi-
nating barriers to the flow of private investment capital. 
75 S T A T . ] 
PUBLIC LAW 8 7 - 1 9 5 - S E P T . 4, 1961 
425 
In addition, the Congress declares that it is the policy of the United 
States to support the principles of increased economic cooperation 
and trade among countries, freedom of the press, information, and 
religion, freedom of navigation in international waterways, and recog-
nition of the right of all private persons to travel and pursue their 
lawful activities without discrimination as to race or religion. 
In the 
administration of all parts of this Act these principles shall be sup-
ported in such a way m our relations with countries friendly to the 
United States which are in controversy with each other as to promote 
an adjudication of the issues involved by means of international law 
procedures available to the parties. 
Accordingly, the Congress hereby affirms it to be the policy of the 
United States to make assistance available, upon request, under this 
part in scope and on a basis of long-range continuity essential to the 
creation of an environment in which the energies of the peoples of the 
world can be devoted to constructive purposes, free of pressure and 
erosion by the adversaries of freedom. 
It is the sense of the Congress 
that assistance under this part should be complemented by the furnish-
ing under any other Act of surplus agricultural commodities and by 
disposal of excess property under this and other Acts. 
Also, the Congress reaffirms its conviction that the peace of the 
world and the security of the United States are endangered so long as 
international communism continues to attempt to bring under Com-
munist domination peoples now free and independent and to keep 
under domination peoples once free but now subject to such domina-
tion. 
It is, therefore, the policy, of the United States to continue to 
make available to other free countries and peoples, upon request, assist-
ance of such nature and in such amounts as the United States deems ad-
visable and as may be effectively used by free countries and peoples 
to help them maintain their freedom. Assistance shall be based upon 
sound plans and programs; be directed toward the social as well as 
economic aspects of economic development; be responsive to the 
efforts of the recipient countries to mobilize their own resources and 
help themselves; be cognizant of the external and internal pressures 
which hamper their growth; and should emphasize long-range de-
velopment assistance as the primary instrument of such growth. 
The Congress reaffirms its belief in the importance of regional or-
ganizations of free peoples for mutual assistance, such as the North 
Atlantic Treaty Organization, the Organization for Economic Co-
operation and Development, the European Economic Community, 
the Organization of American States, the Colombo Plan, the South 
East Asia Treaty Organization, the Central Treaty Organization, and 
others, and expresses its hope that such organizations may be 
strengthened and broadened, and their programs of self-help and 
mutual cooperation may be made more effective in the protection of 
the independence and security of free people, and in the development 
of their economic and social well-being, and the safeguarding of their 
basic rip-hts and liberties. 
Finally, the Congress urges that all other countries able to con-
tribute join in a common undertaking to meet the goals stated in 
this part. 
64207 0-62—30 
426 
PUBLIC LAW 87-195-SEPT. 4, 1961 
[75 ST A T . 
CHAPTER 2—DEVELOPMENT ASSISTANCE 
D e vel opm ent o f 
e c o n o m i c re-
sources, etc. 
Authority to en-
t e r i n t o 
a g r e e -
ments. 
TITLE I 
DEVELOPMENT LOAN 
F U N D 
SEC. 201. GENERAL AUTHORITY.— (a) The President shall estab-
lish a fund to be known as the "Development Loan Fund" to be used 
by the President to make loans pursuant to the authority contained 
in this title. 
(b) The President is authorized to make loans payable as to 
principal and interest in United States dollars on such terms and 
conditions as he may determine, in order to promote the economic 
development of less developed friendly countries and areas, with em-
phasis upon assisting long-range plans and programs designed to 
develop economic resources and increase productive capacities. 
In 
so doing, the President shall take into account (1) whether financing 
could be obtained in whole or in part from other free-world sources 
on reasonable terms, (2) the economic and technical soundness of the 
activity to be financed, (3) whether the activity gives reasonable 
promise of contributing to the development of economic resources 
or to the increase of productive capacities in furtherance of the pur-
poses of this title, (4) the consistency of the activity w^ith, and its 
relationship to, other development activities being undertaken or 
planned, and its contribution to realizable long-range objectives, .(5) 
the extent to which the recipient country is showing a responsiveness 
to the vital economic, political, and social concerns of its people, and 
demonstrating a clear determination to take effective self-help meas-
ures, and (6) the possible effects uoon the United States economy, with 
special reference to areas of substantial labor surplus, of the loan 
involved. Tx)ans shall be made under this title only upon a finding 
of reasonable prospects of repayment. 
(c) The authority of section 610 may not be used to decrease the 
funds available under this title, nor may the authority of section 
614 (a) be used to waive the requirements of this title. 
(d) Funds made available for this title shall not be loaned or 
reloaned at rates of interest excessive or unreasonable for the bor-
rower and in no event higher than the applicable legal rate of interest 
of the country in which the loan is made. 
SEC. 202. AUTHORIZATION.—(a) There is hereby authorized to be 
appropriated to the President for the purposes of this title 
$1,200,000,000 for the fiscal year 1962 and $1,500,000,000 for each of 
the next four succeeding fiscal years, which sums shall remain avail-
able until expended: Provided^ That any unappropriated portion of 
the amount authorized to be appropriated for any such fiscal year 
may be appropriated in any subsequent fiscal year during the above 
period in addition to the amount otherwise authorized to be appro-
priated for such subsequent fiscal year. 
(b) Whenever the President determines that it is important to the 
advancement of United States interests and necessary in order to 
further the purposes of this title, and in recognition of the need for 
reasonable advance assurances in the interest of orderly and effective 
execution of long-term plans and programs of development assistance, 
75 S T A T . ] 
PUBLIC LAW 87-195-SEPT. 4, 1961 
427 
lie is authorized to enter into ag:reements committing, under the terms 
and conditions of this title, funds authorized to be appropriated 
under this title, subject only to the annual appropriation of such 
funds. 
(c) Upon conclusion of each such agreement involving funds to be 
Notification to 
appropriated, the President shall notify the Foreign Relations and °"^'"*'*^-
Appropriations Committees of the Senate and the Speaker of the 
House of Representatives of the provisions of such agreement, includ-
ing the amounts of funds involved and undertakings of the parties 
thereto, 
(d) Except as otherwise provided in this part, the United States 
dollar assets of the corporate entity known as the Development Loan 
Fund which remain unobligated and not committed for loans repay-
able in foreign currencies on the date prior to the abolition of such 
Fund shall be available for use for purposes of this title. 
SEC. 203. FISCAL PROVISIONS.—All receipts from loans made under 
and in accordance with this title shall be available for use for the 
purposes of this title. 
Such receipts and other funds made available 
under this title for use for the purposes of this title shall remain 
available until expended. 
SEC. 204. DEVELOPMENT LOAN COMMITTEE.—The President shall of^^^°s"b''"*pre°-
establish an interagency Development Loan Committee, consisting dent, 
of such officers from such agencies of the United States Government 
as he may determine, which shall, under the direction of the Presi-
dent, establish standards and criteria for lending operations under 
this title in accordance with the foreign and financial policies of the 
United States. 
Except in the case of officers serving in positions to 
which they were appointed by the President by and with the advice 
and consent of the Senate, officers assigned to the Committee shall 
be so assigned by the President by and with the advice and consent 
of the Senate. 
SEC. 205. USE or THE FACILITIES or THE INTERNATIONAL DEVELOP-
MENT ASSOCIATION.—If the President determines that it would more 
effectively serve the purposes of this title and the policy contained in 
section 619 (pertaining to newly independent countries), he may, in 
accordance with the provisions of this title, lend not to exceed 10 per 
centum of the funds made available for this title to the International 
Development Association for use pursuant to the International De-
velopment Association Act (Public Law 86-565, 74 Stat. 293) and the 
22usc 284 note, 
articles of agreement of the Association. 
T I T L E II—DEVELOPMENT GRANTS AND TECHNICAL COOPERATION 
SEC. 211. GENERAL AUTHORITY.— (a) The President is authorized 
promotion of 
„
.
, 
. . 
, , 
^ T ' T , ' 
1 
1 , 
' 
economic develop-
to lurnish assistance on such terms and conditions as he may determine ment, 
in order to promote the economic development of less developed 
friendly countries and areas, with emphasis upon assisting the de-
velopment of human resources through such means as programs of 
technical cooperation and development. 
In so doing, the President 
shall take into account (1) whether the activity gives reasonable 
promise of contributing to the development of educational or other 
428 
PUBLIC LAW 87-195-SEPT. 4, 1961 
[75 ST 
A T . 
U s e of 
currencies. 
65 Stat. 644 
Improvem e n t of 
a g r i c u l t u r a l 
impr 
[rlc 
methods. 
institutions and programs directed toward social progress, (2) the 
consistency of the activity with, and its relationship to, other de-
velopment activities being undertaken or planned, and its contribution 
to realizable long-range development objectives, (3) the economic and 
technical soundness ot the activity to oe financed^ (4) the extent to 
which the recipient country is showing a responsiveness to the vital 
economic, political, and social concerns of its people, and demonstrat-
ing a clear determination to take effective self-help measures and a 
• willingness to pay a fair share of the cost of programs under this title, 
(5) the possible adverse effects upon the United States economy, with 
special reference to areas of substantial labor surplus, of the assistance^ 
involved, and (6) the desirability of safeguarding the internationaF 
balance of payments position of the United States. If the President 
finds that assistance proposed to be furnished under this title would 
have a substantially adverse effect upon the United States economy, or 
a substantial segment thereof, the assistance shall not be furnished. 
(b) In countries and areas which are in the earlier stages of eco-
nomic development, programs of development of education and human 
resources through such means as technical cooperation shall be empha-
sized, and the furnishing of capital facilities for purposes other than 
the development of education and human resources shall be given a 
lower priority until the requisite knowledge and skills have been 
developed. 
SEC. 212. AUTHORIZATION.—There is hereby authorized to be appro-
priated to the President for use beginning in the fiscal year 1962 to 
carry out the purposes of section 211 not to exceed $3805000,000, which 
shall remain available until expended. 
SEC. 213. ATOMS FOR PEACE.—The President is authorized to use, 
in addition to other funds available for such purposes, not to exceed 
$2,000,000 of the funds available for the purposes of section 211 for 
assistance, on such terms and conditions as he may determine, designed 
to promote the peaceful uses of atomic energy outside the United 
States. 
SEC. 214. AMERICAN SCHOOLS AND HOSPITALS ABROAD.—(a) The 
President is authorized to use, in addition to other funds available for 
such purposes, funds made available for the purposes of section 211 
for assistance, on such terms and conditions as he may specify, to 
schools and libraries outside the United States founded or sponsored 
by United States citizens and serving as study and demonstration 
centers for ideas and practices of the United States, 
foreign 
(b) The President is authorized to use, notwithstanding the provi-
sions of the Mutual Defense Assistance Control Act of 1951 (22 U.S.C. 
1611 et seq.), foreign currencies accruing to the United States Govern-
ment under any Act, for purposes of subsection (a) of this section, and 
for assistance, on such terms and conditions as he may specify, to 
hospitals outside the United States founded or sponsored by United 
States citizens and serving as centers for medical treatment, education, 
and research. 
SEC. 215. LOANS TO SMALL FARMERS.—It is the policy of the United 
States and the purpose of this section to strengthen the economies of 
less developed friendly countries, and in friendly countries where the 
economy is essentially rural or based on small villages, to provide as-
sistance designed to improve agricultural methods and techniques, to 
76 S T A T . ] 
PUBLIC LAW 8 7 - 1 9 5 - S E P T . 4, 1961 
429 
stimulate and encourage the development of local programs of self-
help and mutual cooperation, particularly through loans of foreign i^f°"'«"'=""*""'' 
currencies for associations of operators of small farms, formed for the 
purpose of joint action designed to increase or diversify agricultural 
productivity. The maximum unpaid balance of loans made to any 
association under this section may not exceed $25,000 at any one time; 
and the aggregate unpaid balance of all loans made under this section 
may not exceed $10,000,000 at any one time. 
SEC. 216. VOLUNTARY AGENCIES.—(a) In order to further the effi-
cient use of United States voluntary contributions for relief and 
rehabilitation of friendly peoples, the President is authorized to use 
funds made available for the purposes of section 211 to pay transporta- 
p a y m e n t o
f 
tion charges from United States ports to ports of entry abroad, or, in chafes.*" 
the case of landlocked countries, to points of entry in such countries, 
on shipments bv the American Red Cross and United States voluntary 
nonprofit relief agencies registered with and approved by the Advisory 
Committee on Voluntary Foreign Aid. 
(b) Where practicable the President shall make arrangements with 
the receiving country for free entry of such shipments and for the 
making available by that country of local currencies for the purpose 
of defraying the transportation cost of such shipments from the port 
of entry of the receiving country to the designated shipping point of 
the consignee. 
TITLE III 
INVESTMENT GUARANTIES 
SEC. 221. GENERAL AUTHORITY.— (a) In order to facilitate and in- pX»l^patticT)^a-
crease the participation of private enterprise in furthering the de- tion, 
velopment of the economic resources and productive capacities of less 
developed friendly countries and areas, the President is authorized to 
issue guaranties as provided in subsection (b) of this section of in-
vestments in connection with projects, including expansion, modern-
ization, or development of existing enterprises, in any friendly country 
or area with the government of which the President has agreed to 
institute the guaranty program. The guaranty program authorized 
^f^J*^^^"'^^ 
by this title shall be administered under broad criteria, and each proj-
ect shall be approved by the President. 
(b) The President may issue guaranties to United States citizens, 
or corporations, partnerships, or other associations created under the 
laws of the United States or of any State or territory and substantially 
beneficially owned by United States citizens, as well as any wholly-
owned foreign subsidiary of any such corporation— 
(1) assuring protection m whole or in part against any or all 
of the following risks: 
(A) inability to convert into United States dollars other 
currencies, or credits in such currencies, received as earnings 
or profits from the approved project, as repayment or return 
of the investment therein, in whole or in part, or as compen-
sation for the sale or disposition of all or any part thereof, 
(B) loss of investment, in whole or in part, in the ap-
proved project due to expropriation or confiscation by action 
of a foreign government, and 
(C) loss due to war, revolution, or insurrection: 
by President. 
430 
PUBLIC LAW 87-195-SEPT. 4, 1961 
[75 STAT. 
Provided, That the total face amount of the guaranties issued 
under this paragraph (1) outstanding at any one time shall not 
exceed $1,000,000,000; and 
(2) where the President determines such action to be important 
to the furtherance of the purposes of this title, assuring against 
loss of not to exceed 75 per centum of any investment due to such 
risks as the President may determine, upon such terms and condi-
tions as the President may determine: Provided, That guaranties 
Development of 
issued uuder this paragraph (2) shall emphasize economic de-
small business. 
, 
• , - ' • / • 
i
-
'
-
i 
•
'
• 
i
i
i
i 
velopment projects lurthering social progress and the develop-
ment of small independent business enterprises, and no such 
guaranty shall exceed $10,000,000: Provided further, That no pay-
ment may be made under this paragraph (2) for any loss arising 
out of fraud or misconduct for which the investor is responsible: 
Provided further, That the total face amount of the guaranties 
issued under this paragraph (2) outstanding at any one time shall 
not exceed $90,000,000: Provided further, That this authority shall 
continue until June 30, 1964. 
(c) No guaranty_ shall exceed the dollar value, as of the date of the 
investment, of the investment made in the project with the approval 
of the President plus actual earnings or profits on said investment to 
the extent provided by such guaranty, nor shall any guaranty extend 
beyond twenty j^ears from the date of issuance, 
p r o t e c t i o n o
f 
((J) The President shall make suitable arrangements for protecting 
the interests of the United States Government in connection with any 
guaranty issued under section 221(b), including arrangements with 
respect to the ownership, use, and disposition of the currency, credits, 
assets, or investment on account of which payment under such 
guaranty is to be made, and any right, title, claim, or cause of action 
existing in connection therewith. 
Dere^minationb 
^^^' ^^^" GT^^^I^^L PROVISIONS.—(a) A fee shall be charged for 
President. 
" 
eacli guaranty in an amount to be determined by the President. 
In 
the event the fee to be charged for a type of guaranty authorized 
under section 221(b) is reduced, fees to be paid under existing con-
tracts for the same type of guaranty may be similarly reduced. 
(b) All fees collected in connection with guaranties issued under 
section 221(b), under sections 202(b) and 413(b)(4) of the Mutual 
^ 71 Stat, 357; 73 Sccurity Act of 1954, as amended, and under section 111(b) (3) of 
*68' itJt. 846; 73 the Ecouomic Cooperation Act of 1948, as amended (22 U.S.C. 
^
^
2
*
2 ijs'c 187 2 1509(b)(3)) (exclusive of fees for informational media guaranties 
1933. 
' heretofore or hereafter issued pursuant to section 1011 of the United 
States Information and Educational Exchange Act of 1948, as 
70 Stat. 563. 
amended (22 U.S.C. 1442) and section 111(b)(3) of the Economic 
Cooperation Act of 1948, as amended), shall be available for meet-
ing management and custodial costs incurred with respect to curren-
cies or other assets acquired under guaranties made pursuant to 
section 221(b) of this part, sections 202(b) and 413(b)(4) of the 
Mutual Security Act of 1954, as amended, and section 111(b) (3) of 
the Economic Cooperation Act of 1948, as amended (exclusive of 
informational media guaranties), and shall be available for expendi-
ture in discharge of liabilities under guaranties made pursuant to 
such sections, until such time as all such property has been disposed 
of and all such liabilities have been discharged or have expired, or 
until all such fees have been expended in accordance with the provi-
sions of this section. 
(c) In computing the total face amount of guaranties outstanding 
at any one time for purposes of paragraph (1) of section 221(b), 
the President shall include the face amounts of outstanding guaran-
ties theretofore issued pursuant to such paragraph, sections 202(b) 
and 413(b) (4) of the Mutual Security Act of 1954, as amended, and 
75 S T A T . ] 
PUBLIC LAW 8 7 - 1 9 5 ~ S E P T . 4, 1961 
431 
section 111(b)(3) of the Economic Cooperation Act of 1948, as 
22 use 1509. 
amended, but shall exclude informational media guaranties. 
(d) Any payments made to discharge liabilities under guaranties 
issued under section 221(b) of this part, sections 202(b) 
and 
413(b)(4) of the Mutual Security Act of 1954, as amended, and ^^^j use 1372, 
section 111(b)(3) of the Economic Cooperation Act of 1948, as 
amended (exclusive of informational media guaranties), shall be 
paid first out of funds specifically reserved for such payment pursu-
ant to the proviso to the second sentence of section 222(e), and 
^"'"* 
thereafter shall be paid out of fees referred to in section 222(b) as 
long as such fees are available, and thereafter shall be paid out of 
funds, if any, realized from the sale of currencies or other assets 
acquired in connection with any such guaranties as long as such funds 
are available, and finally shall be paid out of funds realized from the 
sale of notes issued under section 413(b)(4)(F) of the Mutual 
Security Act of 1954, as amended, and section 111(c)(2) of the 
22u*^c'f933 
Economic Cooperation Act of 1948, as amended. 
(e) All guaranties issued prior to July 1, 1956 (exclusive of infor-
mational media guaranties), all guaranties issued under section 202(b) 
of the Mutual Security Act of 1954, as amended, may be considered, 
and all other guaranties shall be considered for the purposes of section 
3679 (31 U.S.C. 665) and section 3732 (41 U.S.C. 11) of the Revised 
Statutes, as amended, as obligations only to the extent of the probable 
ultimate net cost to the United States Government of all outstanding 
guaranties. 
Funds obligated in connection with guaranties issued 
under section 221(b) of this part, sections 202(b) and 413(b) (4) of 
the Mutual Security Act of 1954, as amended, and section 111(b) (3) 
of the Economic Cooperation Act of 1948, as amended (exclusive of 
informational media guaranties), shall constitute a single reserve, 
together with funds available for obligation hereunder but not yet 
obligated, for the payment of claims under all guaranties issued under 
such sections: Provided, That funds obligated in connection with 
guaranties issued prior to July 1, 1956, and guaranties issued under 
section 202(b) of the Mutual Security Act of 1954, as amended, shall 
not, without the consent of the investor, be available for the payment 
of claims arising under any other guaranties. 
Funds available for 
obligation hereunder shall be decreased by the amount of any pay-
ments made to discharge liabilities, or to meet management and cus-
todial costs incurred with respect to assets acquired, under guaranties 
issued pursuant to section 221(b) of this part, sections 202(b) and 
413 (b) (4) of the Mutual Security Act of 1954, as amended, and section 
111(b)(3) of the Economic Cooperation Act of 1948, as amended 
(exclusive of informational media guaranties), and shall be increased 
by the amount obligated for guaranties as to which all liability of the 
United States Government has been terminated, and by the amount of 
funds realized from the sale of currencies or other assets acquired in 
connection with any payments made to discharge liabilities, and the 
amount of fees collected, under guaranties issued pursuant to such 
sections (exclusive of informational media guaranties). 
SEC. 223. DEFINITIONS.—As used in this title— 
(a) the term "investment" includes any contribution of capital 
commodities, services, patents, processes, or techniques in the form 
of (1) a loan or loans to an approved project, (2) the purchase 
of a share of ownership in any such project, (3) participation 
in royalties, earnings, or profits of any such project, and (4) the 
furnishing of capital commodities and related services pursuant 
to a contract providing for payment in whole or in part after 
the end of the fiscal year in which the guaranty of such investment 
is made; and 
432 
PUBLIC LAW 87-195-SEPT. 4, 1961 
[75 STAT. 
(b) the term "expropriation" includes but is not limited to any 
abrogation, repudiation^ or impairment by a foreign government 
of its own contract with an investor, where such abrogation, 
repudiation, or impairment is not caused by the investor's own 
fault or misconduct, and materially adversely affects the continued 
operation of the project. 
SEC. 224. HOUSING PROJECTS IN LATIN AMERICAN COUNTRIES.—(a) 
It is the sense of the Congress that in order to stimulate private home-
ownership and assist in the development of stable economies, the 
authority conferred by this title should be utilized for the purpose of 
assisting in the development in the American Eepublics of self-
liquidating pilot housing projects desired to provide experience in 
rapidly developing countries by participating with such countries in 
guaranteeing private United States capital available for investment 
m Latin American countries for the purposes set forth herein. 
(b) In order to carry out the purposes set forth in subsection 
(a), the President is authorized to issue guaranties assuring against 
the risks of loss specified in paragraph 221(b)(2) of investments 
made by United States citizens, or corporations, partnerships, or 
other associations created under the law of the United States or 
of any State or territory and substantially beneficially owned hj 
United States citizens in pilot or demonstration private housing proj-
ects in Latin America of types similar to those insured by the 
Federal Housing Administration and suitable for conditions in Latin 
America. The total face amount of guaranties issued under this 
section outstanding at any one time shall not exceed $10,000,000. 
(c^ The provisions of section 222 (a), (b)j (d), and (e) shall be 
applicable to guaranties issued under this section m the same manner 
and to the same extent as they apply to guaranties issued under 
section 221(b) (2). 
TITLE IV—SURVEYS OF INVESTMENT OPPORTUNITIES 
SEC. 231. GENERAL AUTHORITY.—(a) In order to encoura^ and 
promote the undertaking by private enterprise of surveys of invest-
ment opportunities, other than surveys of extraction opportunities, in 
less developed friendly countries and areas, the President is au-
thorized to participate in the financing of such surveys undertaken 
by any person on such terms and conditions as he may determine: 
Provided^ That his participation shall not exceed 50 per centum 
of the total cost of any such survey. The making of each such 
survey shall be approved by the President. 
(b) In the event that a person who has undertaken a survey in 
accordance with this title determines, within a period of time to 
be determined by the President^ not to undertake, directly or indi-
rectly, the investment opportunity surveyed, such person shall turn 
over to the President a professionally acceptable technical report with 
respect to all matters explored. Such report shall become the prop-
erty of the United States Government, and the United States Gov-
ernment shall be entitled to have access to, and obtain copies of, all 
underlying correspondence, memorandums, working papers, docu-
ments, and other materials in connection with the survey. 
SEC. 232. AUTHORIZATION.—There is hereby authorized to be appro-
priated to the President for use beginning in the fiscal year 1962 
to carry out the purposes of this title not to exceed $5,000,000, which 
shall remain available until expended. 
SEC. 233. DEFINITIONS.—^As used in this title— 
(a) the term "person" means a citizen of the United States 
or any corporation, partnership, or other association substantially 
beneficially owned by United States citizens; and 
75 S T A T . ] 
PUBLIC LAW 87-195-SEPT. 4, 1961 
433 
(b) the term "survey of extraction opportunities" means any 
survey directed (i) to ascertaining the existence, location, ex-
tent, or quality of any deposit of ore, oil, gas, or other mineral, 
or (ii) to determining the feasibility of undertaking operations 
for the mining or other extraction of any such mineral or for 
the processing of any such mineral to the stage of commercial 
marketability. 
TITLE V—DEVEIX)PMENT RESEARCH 
SEC. 241. GENERAL AUTHORITY.—The President is authorized to 
use funds made available for this part to carry out programs of 
research into, and evaluation of, the process of economic develop-
ment in less developed friendly countries and areas, into the factors 
affecting the relative success and costs of development activities, and 
into the means, techniques, and such other aspects of development 
assistance as he may determine, in order to render such assistance 
of increasing value and benefit. 
CHAPTER 3—INTERNATIONAL ORGANIZATIONS AND PROGRAMS 
SEC. 301. GENERAL AUTHORITY.—(a) When he determines it to be 
in the national interest, the President is authorized to make voluntary 
contributions on a grant basis to international organizations and to 
programs administered by such organizations on such terms and con-
ditions as he may determine, in order to further the purposes of this 
part. 
(b) Contributions to the United Nations Expanded Program of 
Technical Assistance and the United Nations Special Fund for the 
calendar years succeeding 1961 may not exceed forty per centum of 
the total amount contributed for such purpose (including assessed and 
audited local costs) for each such year. 
(c) In determining whether or not to continue furnishing assist-
ance for Palestine reiu^ees in the Near East through contributions to 
the United Nations Relief and Works Agency for Palestine Refugees 
in the Near East, the President shall taKe into account (1) wheSier 
Israel and the Arab host governments are taking steps tov/ard the 
resettlement and repatriation of such refugees, and (2) the extent 
and success of efforts by the Agency and the Arab host governments 
to rectify the Palestine refugee relief rolls. 
SEC. 302. AUTHORIZATION.—There is hereby authorized to be appro-
priated to the President for use, in addition to funds available under 
any other Act for such purposes, for the fiscal year 1962 to carry out 
the purposes of this chapter not to exceed $153,500,000. 
SEC. 303. INDUS BASIN DEVELOPMENT.—In the event that funds 
made available under this Act (other than part II) are used by or 
under the supervision of the International Bank for Reconstruction 
and Development in furtherance of the development of the Indus 
Basin through the program of cooperation among South Asian and 
other countries of the free world, which is designed to promote eco-
nomic growth and political stability in South Asia, such funds may 
be used in accordance with requirements, standards, or procedures 
established by the Bank concerning completion of plans and cost 
estimates and determination of feasibility, rather than with require-
ments, standards, or procedures concerning such matters set forth in 
this or other Acts; and such funds may also be used without regard 
to the provisions of section 901(b) of the Merchant Marine Act, 1936, 
as amended (46 U.S.C. 1241), whenever the President determines that 
such provisions cannot be fully satisfied without seriously impeding 
Voluntary 
tributions. 
Limitation. 
Palestine r e f u -
gees. 
68 Stat. 832; 70 
Stat. 187. 
434 
PUBLIC LAW 87-195-SEPT. 4, 1961 
[75 S T A T . 
or preventing accomplishment of the purposes of such programs: Pro-
vided^ That compensating allowances are made in the administration 
of other programs to the same or other areas to which the requirements 
of said section 901 (b) are applicable. 
CHAPTER 4—SUPPORTING ASSISTANCE 
SEC. 401. GENERAL AUTHORITY.—The President is authorized to 
furnish assistance to friendly countries, organizations, and bodies 
eligible to receive assistance under this part on such terms and con-
ditions as he may determine, in order to support or promote economic 
or political stability. 
SEC. 402. AUTHORIZATION.—There is hereby authorized to be appro-
priated to the President for use beginning m the fiscal year 1962 to 
carry out the purposes of this chapter not to exceed $465,000,000, 
which shall remain available until expended. 
CHAPTER 5—CONTINGENCY FUND 
SEC. 451. CONTINGENCY FUND.—(a) There is hereby authorized to 
be appropriated to the President for the fiscal year 1962 not to exceed 
$300,000,000 for use by the President for assistance authorized by part 
I in accordance with the provisions applicable to the furnishing of such 
assistance, when he determines such use to be important to the national 
interest. 
con'g7^°s*i°onL^ 
(^) ^he President shall keep the Committee on Foreign Eelations 
committees. 
aud the Committee on Appropriations of the Senate and the Speaker 
of the House of Representatives currently informed of the use of funds 
under this section. 
CHAPTER 6—ASSISTANCE TO COUNTRIES HAVING AGRARIAN 
ECONOMIES 
SEC. 
461. ASSISTANCE TO COUNTRIES HAVING AGRARIAN 
ECON-
OMIES.—Wherever the President determines that the economy of any 
country is in major part an agrarian economy, emphasis shall be 
placed on programs which reach the people in such country who are 
engaged in agrarian pursuits or who live m the villages or rural areas 
in such country, including programs which will assist them in the 
establishment of indigenous cottage industries, in the improvement of 
agricultural methods and techniques, and which will encourage the 
development of local programs of self-help and mutual cooperation. 
PART I I 
CHAPTER 1—SHORT TITLE AND POLICY 
pJa"ce^ ^d V
e
°
c
u
r
T
- 
^^^* ^^^' SHORT TiTiiE.—This part may be cited as the "Interna-
t
y
^
A
c
^
t oTigei!""" tional Peace and Security Act of 1961". 
SEC. 502. STATEMENT OF POLICY.—The Congress of the United 
States reaffirms the policy of the United States to achieve international 
peace and security through the United Nations so that armed force 
shall not be used except for individual or collective self-defense. 
The 
Congress hereby finds that the efforts of the United States and other 
friendly countries to promote peace and security continue to require 
measures of support based upon the principle of effective self-help and 
mutual aid. It is the purpose of this part to authorize measures in the 
common defense against internal and external aggression, including 
^MHitary assist- ^he fumishiug of military assistance, upon request, to friendly coun-
tries and international organizations. In furnishing such military 
I n t e r n a t i o n al 
military force. 
75 S T A T . ] 
PUBLIC LAW 8 7 - 1 9 5 - S E P T . 4, 1961 
435 
assistance, it remains the policy of the United States to continue to 
exert maximum efforts to achieve universal control of weapons of mass 
destruction and universal regulation and reduction of armaments, in-
cluding armed forces, under adequate safeguards to protect complying 
countries against violation and evasion. 
The Congress recognizes that the peace of the world and the security 
of the United States are endangered so long as international com-
munism and the countries it controls continue by threat of military 
action, by the use of economic pressure, and by internal subversion, 
or other means to attempt to bring under their domination peoples 
now free and independent and continue to deny the rights of freedom 
and self-government to peoples and countries once free but now subject 
to such domination. 
It is the sense of the Congress that an important contribution toward 
peace would be made by the establishment under the Organization of 
American States of an international military force. 
In enacting this legislation, it is therefore the intention of the Con- in^n^f^^ s s i o n ai 
gress to promote the peace of the world and the foreign policy, security, 
and general welfare of the United States by fostering an improved 
climate of political independence and individual liberty, improving 
the ability of friendly countries and international organizations to 
deter or, if necessary, defeat Communist or Communist-supported 
aggression, facilitating arrangements for individual and collective 
security, assisting friendly countries to maintain internal security, and 
creating an environment of security and stability in the developing 
friendly countries essential to their more rapid social, economic, and 
political progress. The Congress urges that all other countries able 
to contribute join in a common undertaking to meet the goals stated in 
this part. 
Finally, the Congress reaffirms its full support of the progress of the 
members of the North Atlantic Treaty Organization toward increased 
cooperation in political, military, and economic affairs. 
In particular, 
the Congress welcomes the steps which have been taken to promote 
multilateral programs of coordinated procurement, research, develop-
ment, and production of defense articles and urges that such programs 
be expanded to the fullest extent possible to further the defense of the 
North Atlantic Area. 
CHAPTER 2—MILITARY ASSISTANCE 
SEC. 503. GENERAL AUTHORITY.—The President is authorized to fur-
nish military assistance on such terms and conditions as he may 
determine, to any friendly country or international organization, the 
assisting of which the President finds will strengthen the security of 
the United States and promote world peace and which is otherwise 
eligible to receive such assistance, by— 
(a) acquiring from any source and providing (by loan, lease, 
sale, exchange, grant, or any other means) any defense article or 
defense service; 
(b) making financial contributions to multilateral programs 
for the acquisition or construction of facilities in foreign countries 
for collective defense; 
(c) providing financial assistance for expenses incident to par-
ticipation by the United States Government in regional or 
collective defense organizations; and 
(d) assigning or detailing members of the Armed Forces of 
the United States and other personnel of the Department of 
Defense to perform duties of a noncombatant nature, including 
those related to training or advice. 
436 
PUBLIC LAW 87-195-SEPT. 4, 1961 
[76 ST A T . 
Programing a n d 
budgeting. 
Limitation. 
SEC. 504. AUTHORIZATION.—(a) There is hereby authorized to be 
appropriated to the President for use beginning in the fiscal years 
1962 and 1963 to carry out the purposes of this part, not to exceed 
$1,700,000,000 for each such fiscal year, which sums shall remain 
available until expended. 
(b) In order to make sure that a dollar spent on military assistance 
to foreigii countries is as necessary as a dollar spent for the United 
States military establishment, the President shall establish procedures 
for programing and budgeting so that programs of military assistance 
come into direct competition tor financial support with other activities 
and programs of the Department of Defense. 
SEC. 505. UTILIZATION OF ASSISTANCE.— (a) Military assistance to 
any country shall be furnished solely for internal security, for legiti-
mate self-defense, to permit the recipient country to participate in 
regional or collective arrangements or measures consistent with the 
Charter of the United Nations, or otherwise to permit the recipient 
country to participate in collective measures requested by the United 
Nations for the purpose of maintaining or restoring international 
peace and security. 
(b) To the extent feasible and consistent with the other purposes of 
this part, the use of military forces in less developed friendly countries 
in the construction of public works and other activities helpful to 
economic development shall be encouraged. 
SEC. 506. CONDITIONS or ELIGIBILITY.—(a) In addition to such other 
provisions as the President may require, no defense articles shall be 
furnished to any country on a grant basis unless it shall have agreed 
that— 
(1) it will not, without the consent of the President— 
(A) permit any use of such articles by anyone not an 
officer, employee, or agent of that country, 
(B) transfer, or permit any officer, employee, or agent of 
that country to transfer such articles by gift, sale, or other-
wise, or 
(C) use or permit the use of such articles for purposes 
other than those for which furnished; 
(2) it will maintain the security of such articles, and will 
provide substantially the same degree of security protection af-
forded to such articles by the United States Government; 
(3) it will, as the President may require, permit continuous 
observation and review by, and furnish necessary information to, 
representatives of the IJnited States Government with regard 
to the use of such articles; and 
(4) unless the President consents to other disposition, it will 
return to the United States Government for such use or disposi-
tion as the President considers in the best interests of the United 
States, such articles which are no longer needed for the purposes 
for which furnished. 
(b) No defense articles shall be furnished on a grant basis to any 
country at a cost in excess of $3,000,000 in any fiscal year unless the 
President determines— 
(1) that such country conforms to the purposes and principles 
of the Charter of the United Nations; 
(2) that such defense articles will be utilized by such country 
for the maintenance of its own defensive strength, and the de-
fensive strength of the free world; 
(3) that such country is taking all reasonable measures, con-
sistent with its political and economic stability, which may be 
needed to develop its defense capacities; and 
(4) that the increased ability of such country to defend itself 
is important to the security of the United States. 
76 S T A T . ] 
PUBLIC LAW 87-196-8EPT. 4, 1961 
487 
-X SEC. 507. SALES.—(a) The President may furnish defense articles 
from the stocks of the Department of Defense and defense services to 
any friendly country or international organization, without reimburse-
ment from funds made available for use under this part, if such coun-
try or international or^nization agrees to pa^ the value thereof in 
United States dollars. Payment shall be made in advance or, as deter-
mined by the President to be in the best interests of the United States, 
within a reasonable period not to exceed three years after the delivery 
of the defense articles, or the provision of the defense services. For 
the purposes of this subsection, the value of excess defense articles 
shall be not less than (1) the value specified in section 644 (m) (1) plus 
the scrap value, or (2) the market value, if ascertainable, whichever is 
the greater. 
(b) The President may, without requirement for charge to any 
appropriation or contract authorization otherwise provided, enter 
into contracts for the procurement of defense articles or defense serv-
ices for sale to any friendly country or international organization 
if such country or international organization provides the United 
States Government with a dependable undertaking (1) to pay the full 
amount of such contract which will assure the United States Govern-
ment against any loss on the contract, and (2) to make funds available 
in such amounts and at such times as may be required to meet the 
payments required by the contract, and any damages and costs that 
may accrue from the cancellation of such contract, in advance of the 
time such payments, damages, or costs are due. 
SEC. 508. REIMBURSEMENTS.—^Whenever funds made available for 
use under this part are used to furnish military assistance on cash or 
credit terms. United States dollar repayments, including dollar pro-
ceeds derived from the sale of foreign currency repayments to any 
agency or program of the United States Government, shall be credited 
to the current applicable appropriation, and shall be available until 
expended solely for the purpose of furnishing further military assist-
ance on cash or credit terms, and, notwithstanding any provision of 
law relating to receipts and credits accruing to the United States Gov-
ernment, repayments in foreign currency may be used to carry out 
this part. 
SEC. 509. EXCHANGES.—Defense articles or defense services trans-
ferred to the United States Government by a country or international 
organization as payment for assistance furnished under this part may 
be used to carry out this part, or may be disposed of or transferred to 
any agency of the United States Government for stockpiling or other 
purposes. If such disposal or transfer is made subject to reimburse-
ment, the funds so received shall be credited to the appropriation, 
fund, or account funding the cost of the assistance furnished or to any 
appropriation, fund, or account currently available for the same gen-
eral purpose. 
SEC. 510. SPECIAL AUTHORITY.—(a) During the fiscal year 1962, the 
President may, if he determines it to be vital to the security of the 
United States, order defense articles from the stocks of the Depart-
ment of Defense and defense services for the purposes of part II, 
subject to subsequent reimbursement therefor from subsequent appro-
priations available for military assistance. 
The value of such 
orders under this subsection in the fiscal year 1962 shall not exceed 
$300,000,000. Prompt notice of action taken under this subsection 
shall be given to the Committees on Foreign Relations, Appropria-
tions, and Armed Services of the Senate and the Speaker of the House 
of Representatives. 
(b) The Department of Defense is authorized to incur, in applicable 
appropriations, obligations in anticipation of reimbursements in 
Contracts. 
Limitation. 
N o t i c e 
gress. 
to Con-
438 
PUBLIC LAW 87-195-SEPT. 4, 1961 
[75 STAT. 
amounts equivalent to the value of such orders under subsection (a) of 
airth'^ri°ar^*'°"^ ^^^^ section. Appropriations to the President of such sums as may be 
necessary to reimburse the applicable appropriation, fund, or account 
for such orders are hereby authorized. 
SEC. 
511. RESTRICTIONS ON MILITARY AID TO LATIN AMERICA.— 
(a) The value of grant programs of defense articles for American 
Republics, pursuant to any authority contained in this part other than 
section 507, in any fiscal year beginning with the fiscal year 1962, shall 
not exceed $57,500,000: Provided, That an amount equal to the amount 
by which the foregoing ceiling reduces the program as presented to 
the Congress for the fiscal year 1962 shall be transferred to and con-
solidated with the appropriation made pursuant to section 212 and 
shall be used for development grants in American Republics. 
(b) Internal security requirements shall not, unless the President 
determines otherwise and promptly reports such determination to the 
Senate Committee on Foreign Relations and to the Speaker of the 
House of Representatives, be the basis for military assistance programs 
for American Republics. 
PART I I I 
CHAPTER 1—GENERAL PROVISIONS 
SEC. 601. ENCOURAGEMENT OF FREE ENTERPRISE AND PRIVATE PAR-
TICIPATION.— (a) The Congress of the United States recognizes the 
vital role of free enterprise in achieving rising levels of production and 
standards of living essential to economic progress and development. 
Accordingly, it is declared to be the policy of the United States to 
encourage the efforts of other countries to increase the flow of inter-
national trade, to foster private initiative and competition, to en-
courage the development and use of cooperatives, credit unions, and 
savings and loan associations, to discourage monopolistic practices, 
to improve the technical efficiency of their industry, agriculture, and 
commerce, and to strengthen free labor unions; and to encourage the 
contribution of United States enterprise toward economic strength of 
less developed friendly countries, through private trade and invest-
ment abroad, private participation in programs carried out under 
this Act (including the use of private trade channels to the maximum 
extent practicable in carrying out such programs), and exchange of 
ideas and technical information on the matters covered by this sub-
section. 
(b) In order to encourage and facilitate participation by private 
enterprise to the maximum extent practicable in achieving any of the 
purposes of this Act, the President shall— 
(1) make arrangements to find, and draw the attention of pri-
vate enterprise to, opportunities for investment and development 
in less-developed friendly countries and areas; 
(2) accelerate a program of negotiating treaties for commerce 
and trade, including tax treaties, which shall include provisions to 
encourage and facilitate the flow of private investment to, and its 
equitable treatment in, friendly countries and areas participating 
in programs under this Act; 
(3) seek, consistent with the national interest, compliance by 
other countries or areas with all treaties for commerce and trade 
and taxes, and take all reasonable measures under this Act or 
other authority to secure compliance therewith and to assist 
United States citizens in obtaining just compensation for losses 
sustained by them or payments exacted from them as a result of 
measures taken or imposed by any country or area thereof in 
violation of any such treaty; and 
Y5STAT.] 
PUBLIC LAW 87-195-SEPT. 4, 1961 
439 
(4) wherever appropriate carry out programs of assistance 
through private channels and to the extent practicable in con-
junction with local private or governmental participation, includ-
ing loans under the authority of section 201 to any individual, 
corporation, or other body of persons. 
SEC. 602. SMALL BUSINESS.—(a) Insofar as practicable and to the 
maximum extent consistent with the accomplishment of the purposes 
of this Act, the President shall assist American small business to par-
ticipate equitably in the furnishing of commodities, defense articles, 
and services (including defense services) financed with funds made 
available under this Act— 
(1) by causing to be made available to suppliers in the United 
States, and particularly to small independent enterprises, infor-
mation, as far in advance as possible, with respect to purchases 
proposed to be financed with such funds; 
(2) by causing to be made available to prospective purchasers 
in the countries and areas receiving assistance Under this Act 
information as to such commodities, articles^ and services produced 
by small independent enterprises in the United States; and 
(3) by providing for additional services to give small business 
better opportunities to participate in the furnishing of such com-
modities, articles, and services financed with such funds. 
(b) There shall be an Office of Small Business, headed by a Special B °s[nes\* "'^ ^"^" 
Assistant for Small Business, in such agency of the United States Gov-
ernment as the President may direct, to assist in carrying out the 
provisions of subsection (a) of this section. 
(c) The Secretary of Defense shall assure that there is made avail-
able to suppliers in the United States, and particularly to small inde-
pendent enterprises, information with respect to purchases made by 
the Department of Defense pursuant to part II, such information to 
be furnished as far in advance as possible. 
SEC. 603. SHIPPING ON UNITED STATES VESSELS.—The ocean trans-
portation between foreign countries of commodities and defense 
articles purchased with foreign currencies made available or derived 
from funds made available under this Act or the Agricultural Trade 
Development and Assistance Act of 1954, as amended (7 U.S.C. 1691 
et seq.), and transfers of fresh fruit and products thereof under this 
^^ ®'^*- ''^^^• 
Act, shall not be governed by the provisions of section 901(b) of the 
Merchant Marine Act of 1936, as amended (46 U.S.C. 1241), or any ^s stat. «32. 
other law relating to the ocean transportation of commodities on 
United States flag vessels. 
SEC. 604. PROCUREMENT.—(a) Funds made available under this Act 
may be used for procurement outside the United States only if the 
President determines that such procurement will not result in adverse 
effects upon the economy of the United States or the industrial mobili-
zation basej with special reference to an^^ areas of labor surplus or to 
the net position of the United States in its balance of payments with 
the rest of the world, which outweigh the economic or other advantages 
to the United States of less costly procurement outside the United 
States, and only if the price of any commodity procured in bulk is 
lower than the market price prevailing in the United States at the 
time of procurement, adjusted for differences in the cost of transpor-
tation to destination, quality, and terms of payment. 
(b) No funds made available under this Act shall be used for the 
purchase in bulk of any commodities at prices higher than the market 
price prevailing in the United States at the time of purchase, adjusted 
tor differences in the cost of transportation to destination, quality, and 
terms of payment. 
440 
PUBLIC LAW 87-195-SEPT. 4, 1961 
[76 STAT. 
Surplus agricui- 
(c) In providing for the procurement of any surplus agricultural 
ur commo ity. 
commodity for transfer by grant under this Act to any recipient coun-
try in accordance with its requirements, the President shall, insofar 
as practicable and when in furtherance of the purposes of this Act, 
authorize the procurement of such surplus agricultural commodity 
only within the United States except to the extent that such surplus 
agricultural commodity is not available in the United States in suf-
ficient quantities to supply emergency requirements of recipients under 
this Act. 
Marine insur- 
(d) In providing assistance in the procurement of commodities in 
^"*'*' 
the United States, United States dollars shall be made available for 
marine insurance on such commodities where such insurance is placed 
on a competitive basis in accordance with normal trade practice pre-
vailing prior to the outbreak of World War I I : Provided^ That in the 
event a participating country, by statute, decree, rule, or regulation, 
discriminates against any marine insurance company authorized to do 
business in any State of the United States, then commodities purchased 
with funds provided hereunder and destined for such country shall be 
insured in the United States against marine risk with a company or 
companies authorized to do a marine insurance business in any State 
of the United States. 
SEC. 605. 
RETENTION AND USE OF ITEMS.—(a) Any commodities 
and defense articles procured to carry out this Act shall be retained by, 
or upon reimbursement, transferred to, and for the use of, such agency 
of the United States Government as the President may determine in 
lieu of being disposed of to a foreign country or international organi-
zation, whenever in the judgment of the President the best interests 
of the United States will be served thereby, or whenever such retention 
retained'itV°" °' ^^ Called for hj Concurrent resolution. Any commodities or defense 
articles so retained may be disposed of without regard to provisions of 
law relating to the disposal of property owned by the United States 
Government, when necessary to prevent spoilage or wastage of such 
commodities or defense articles or to conserve the usefulness thereof. 
Funds realized from any disposal or transfer shall revert to the respec-
tive appropriation, fund, or account used to procure such commodities 
or defense articles or to the appropriation, fund, or account currently 
available for the same general purpose. 
(b) Whenever commodities are transferred to the United States 
Government as repayment of assistance under this Act, such com-
modities may be used in furtherance of the purposes and within the 
limitations of this Act. 
SEC. 606. 
PATENTS AND TECHNICAL INFORMATION.—(a) Whenever, 
in connection with the furnishing of assistance under this Act— 
(1) an invention or discovery covered by a patent issued by the 
United States Government is practiced within the United States 
without the authorization of the owner, or 
(2) information, which is (A) protected by law, and (B) held 
by the United States Government subject to restrictions imposed 
by the owner, is disclosed by the United States Government or any 
of its officers, employees, or agents in violation of such restrictions, 
the exclusive remedy of the owner, except as provided in subsection 
(b) of this section, is to sue the United States Government for reason-
able and entire compensation for such practice or disclosure in the 
district court of the United States for the district in which such owner 
is a resident, or in the Court of Claims, within six years after the cause 
of action arises. Any period during which the United States Govern-
ment is in possession of a written claim under subsection (b) of this 
section before mailing a notice of denial of that claim does not count 
in computing the six years. 
In any such suit, the United States 
P a y m e ^ n t of 
claim. 
75 S T A T . ] 
PUBLIC LAW 87-195-SEPT. 4, 1961 
441 
Government may plead any defense that may be pleaded by a private 
person in such an action. The last paragraph of section 1498(a) of 
title 28 of the United States Code shall apply to inventions and infor- g^^2 st^a^t. 941; 74 
mation covered by this section. 
(b) Before suit against the United States Government has been 
instituted, the head of the agency of the United States Government 
concerned may settle and pay any claim arising under the circum-
stances described in subsection (a) of this section. No claim may be 
paid under this subsection unless the amount tendered is accepted by 
the claimant in full satisfaction. 
(c) Funds appropriated pursuant to this Act shall not be expended 
Re'^^ffction'^** 
by the United States Government for the acquisition of any drug 
product or pharmaceutical product manufactured outside the United 
States if the manufacture of such drug product or pharmaceutical 
product in the United States would involve the use of, or be covered 
by, an unexpired patent of the United States which has not previously 
been held mvalid by an unappealed or unappealable judgment or 
decree of a court of competent jurisdiction, unless such manufacture 
is expressly authorized by the owner of such patent. 
SEC. 607. FURNISHING OF SERVICES AND COMMODITIES.—^Whenever 
the President determines it to be consistent with and in furtherance of 
the purposes of part I and within the limitations of this Act, any 
agency of the United States Government is authorized to furnish 
services and commodities on an advance-of-funds or reimbursement 
basis to friendly countries, international organizations, the American 
Red Cross, and voluntary nonprofit relief agencies registered with 
and approved by the Advisory Committee on Voluntary Foreign Aid. 
Such advances or reimbursements which are received under this sec-
tion within one hundred and eighty days after the close of the fiscal 
year in which such services and commodities are delivered, may be 
credited to the current applicable appropriation, account, or fund of 
the agency concerned and shall be available for the purposes for which 
such appropriation, account, or fund is authorized to be used. 
SEC. 608. ADVANCE ACQUISITION OF PROPERTY.—(a) The President 
is authorized to maintain in a separate account, which shall, notwith-
standing section 1210 of the General Appropriation Act, 1951 (64 
Stat. 765), be free from fiscal year limitation, $5,000,000 of funds 
3i use 686-1 
made available under section 212, which may be used to pay costs of 
acquisition, storage, renovation and rehabilitation, packing, crating, 
handling, transportation, and related costs of property classified as 
domestic or foreign excess property pursuant to the Federal Property 
and Administrative Services Act of 1949, as amended (40 U.S.C. 471 
et seq.), or other property, in advance of known requirements therefor 
^^ ^*^*- "^• 
for use in furtherance of the purposes of part I : Provided, That the 
amount of property classified as domestic excess property pursuant 
to the Federal Property and Administrative Services Act of 1949, as 
amended, held at any one time pursuant to this section shall not exceed 
$15,000,000 in total original acquisition cost. Property acquired pur-
suant to the preceding sentence may be furnished (1) pursuant to 
any provision of part I for which funds are authorized for the fur-
nishing of assistance, in which case the separate account established 
pursuant to this section shall be repaid from funds made available 
for such provision for all costs incurred, or (2) pursuant to section 
607, in which case such separate account shall be repaid in accordance 
with the provisions of that section for all costs incurred. 
(b) Property classified as domestic excess property under the Fed-
eral Property and Administrative Services Act of 1949, as amended, 
shall not be transferred to the agency primarily responsible for admin-
istering part I for use pursuant to the provisions of part I or section 
64207 0-62—3f 
442 
PUBLIC LAW 87-195-SEPT. 4, 1961 
[75 STAT. 
607 unless (1) such property is transferred for use exclusively by an 
agency of the United States (jovernment,, or (2) it has been determined 
in the same manner as provided for surplus property in section 203 (j) 
40 us^c 484 * 
^^ ^^^^ Federal Property and Administrative Services Act of 1949, as 
amended, that such property is not needed for donation pursuant to 
that subsection. The foregoing restrictions shall not apply to the 
transfer in any fiscal year for use pursuant to the provisions of part I 
of amounts of such property with a total original acquisition cost 
to the United States Government not exceeding $45,000,000. 
SEC. 609. SPECIAL ACCOUNT.—(a) In cases where any commodity is 
to be furnished on a grant basis under chapter 4 of part I under 
arrangements which will result in the accrual of proceeds to the 
recipient country from the sale thereof, the President shall require 
the recipient country to establish a Special Account, and 
(1) deposit in the Special Account, under such terms and con-
ditions as may be agreed upon, currency of the recipient country 
in amounts equal to such proceeds; 
(2) make available to the United States Government such por-
tion of the Special Account as may be determined by the President 
to be necessary for the requirements of the United States Govern-
ment : Provided^ That such portion shall not be less than 10 per 
centum in the case of any country to which such minimum require-
ment has been applicable under any Act repealed by this Act; 
and 
(3) utilize the remainder of the Special Account for programs 
agreed to by the United States Government to carry out the 
purposes for which new funds authorized by this Act would 
themselves be available: Provided^ That whenever funds from 
such Special Account are used by a country to make loans, all 
funds received in repayment of such loans prior to termination 
of assistance to such country shall be reused only for such pur-
poses as shall have been agreed to between the country and the 
United States Government. 
(b) Any unencumbered balances of funds which remain in the 
Account upon termination of assistance to such country under this 
Act shall be disposed of for such purposes as may, subject to approval 
by Act of the Congress, be agreed to between such country and the 
United States Government. 
SEC. 610. TRANSFER BETWEEN ACCOUNTS.—^Whenever the Presi-
dent determines it to be necessary for the purposes of this Act, not to 
exceed 10 per centum of the funds made available for any provision 
of this Act may be transferred to, and consolidated with, the funds 
made available for any other provision of this Act, and may be used 
for any of the purposes for which such funds may be used, except 
that the total in the provision for the benefit of which the transfer 
is made shall not be increased by more than 20 per centum of the 
amount of funds made available for such provision. 
SEC. 611. COMPLETION OF PLANS AND COST ESTIMATES.— (a) No 
agreement or grant which constitutes an obligation of tlie United 
States Government in excess of $100,000 under section 1311 of the 
68 Stat. 830. 
Supplemental Appropriation Act, 1955, as amended (31 U.S.C. 200), 
sliall be made for any assistance authorized under titles I and I I 
of chapter 2 and chapter 4 of part I— 
(1) if such agreement or grant requires substantive technical 
or financial planning, until engineering, financial, and other 
plans necessary to carry out such assistance, and a reasonably 
firm estimate of the cost to the United States Government of 
providing such assistance, have been completed; and 
75 S T A T . ] 
PUBLIC LAW 87-195-SEPT. 4, 1961 
443 
(2) if such agreement or grant requires legislative action 
within the recipient country, unless such legislative action may 
reasonably be anticipated to be completed in time to permit the 
orderly accomplishment of the purposes of such agreement or 
grant. 
(b) Plans required under subsection (a) of this section for any 
water or related land resource construction project or program shall 
include a computation of benefits and costs made insofar as practicable 
in accordance with the procedures set forth in circular A-A7 of the 
Bureau of the Budget with respect to such computations. 
(c) To the maximum extent practicable, all contracts for construc-
tion outside the United States made in connection with any agreement 
or grant subject to subsection (a) of this section shall be made on a 
competitive basis. 
(d) Subsection (a) of this section shall not apply to any assistance 
furnished for the sole purpose of preparation of engineering, financial, 
and other plans. 
SEC. 612. USE or FOREIGN CURRENCIES.—Except as otherwise pro-
vided in this Act or other Acts, foreign currencies received either (1) 
as a result of the furnishing of nonmilitary assistance under the Mu-
tual Security Act of 1954, as amended, or any Act repealed thereby, 
and unobligated on the date prior to the effective date of this Act, or 
(2) on or after the effective date of this Act, as a result of the furnish-
ing of nonmilitary assistance under the Mutual Security Act of 1954, 
as amended, or any Act repealed thereby, or (3) as a result of the fur-
nishing of assistance under part I, which are in excess of amounts 
Reserved under authority of section 105(d) of the Mutual Educational 
and Cultural Exchange Act of 1961 or any other Act relating to edu-
cational and cultural exchanges, may be sold by the Secretary of the 
Treasury to agencies of the United States Government for payment of 
their obligations outside the United States, and the United States dol-
lars received as reimbursement shall be deposited into miscellaneous 
receipts of the Treasury. 
Foreign currencies so received which are in 
excess of the amounts so reserved and of the requirements of the United 
States Government in payment of its obligations outside the United 
States, as such requirements may be determined from time to time by 
the President, shall be available for the authorized purposes of part I 
in such amounts as may be specified from time to time in appropriation 
Acts. 
SEC. 
613. ACCOUNTING, VALUATION, AND REPORTING or 
FOREIGN 
CURRENCIES.— (a) Under the direction of the President, the Secretary 
of the Treasury shall have responsibility for valuation and central 
accounting with respect to foreign credits (including currencies) owed 
to or owned by the United States. In order to carry out such responsi-
bility the Secretary shall issue regulations binding upon all agencies 
of the Government. 
(b) The Secretary of the Treasury shall have sole authority to 
establish for all foreign currencies or credits the exchange rates at 
which such currencies are to be reported by all agencies of the 
Government. 
(c) Each agency or department shall report to the Secretary of the 
Treasury an inventory as of June 30,1961, showing the amount of all 
foreign currencies acquired without payment of dollars on hand of 
each of the respective countries, and the Secretary of the Treasury 
shall consolidate these reports as of the same date and submit to the 
Congress this consolidated report broken down by agencies, by coun-
tries, by units of foreign currencies and their dollar equivalent. 
Thereafter, semiannually, similar reports are to be submitted by the 
agencies to the Treasurv Department and then presented to the Con-
gress by the Secretary of the Treasury. 
P l a n s I'or con-
struction pTojects. 
68 Stat. 832. 
22 u s e 
175 1 
note. 
Post, p. 531. 
Regulations. 
Exchange rates. 
R e p o r t s 
t o 
Treasury D e p a r t -
ment. 
Reports to C o n-
gress. 
444 
PUBLIC LAW 87-195-SEPT. 4, 1961 
[75 STAT. 
SEC. 614. SPECIAL AUTHORITIES.—(a) The President may authorize 
in each fiscal year the use of funds made available for use under this 
Act and the furnishing of assistance under section 510 in a total 
amount not to exceed $250,000,000 and the use of not to exceed 
$100,000,000 of foreign currencies accruing under this Act or any 
other law, without regard to the requirements of this Act, any law 
relating to receipts and credits accruing to the United States, any 
Act appropriating funds for use under this Act, or the Mutual De-
es stat. 644. 
fense Assistance Control Act of 1951 (22 U.S.C. 1611 et seq.), in 
furtherance of any of the purposes of such Acts, when the President 
determines that such authorization is important to the security of 
the United States. Not more than $50,000,000 of the funds available 
under this subsection may be allocated to any one country in any 
fiscal year, 
u. s. obligations 
(b) Whenever the President determines it to be important to the 
^"punds! **"'"*"^" national interest, he may use funds available for the purposes of 
chapter 4 of part I in order to meet the responsibilities or objectives 
of the United States in Germany, including West Berlin, and without 
regard to such provisions of law as he determines should be dis-
regarded to achieve this purpose. 
(c) The President is authorized to use amounts not to exceed 
$50,000,000 of the funds made available under this Act pursuant to 
his certification that it is inadvisable to specify the nature of the use 
of such funds, which certification shall be deemed to be a sufficient 
voucher for such amounts. 
SEC. 615. CONTRACT AUTHORITY.—Provisions of this Act author-
izing the appropriation of funds shall be construed to authorize the 
granting in any appropriation Act of authority to enter into con-
tracts, within the amounts so authorized to be appropriated, creating 
obligations in advance of appropriations. 
SEC. 616. AVAILABILITY OF FUNDS.—Except as otherwise provided 
in this Act, funds shall be available to carry out the provisions of this 
Act as authorized and appropriated to the President each fiscal year. 
SEC. 617. TERMINATION OF ASSISTANCE.—Assistance under any pro-
vision of this Act may, unless sooner terminated by the President, be 
terminated by concurrent resolution. 
Funds made available under 
this Act shall remain available for a period not to exceed twelve 
months from the date of termination of assistance under this Act 
for the necessary expenses of winding up programs related thereto. 
SEC. 618. ECONOMIC ASSISTANCE TO LATIN AMERICA.—Economic 
assistance to Latin America pursuant to title I and title I I of chap-
ter 2 of part I of this Act shall be furnished in accordance with the 
principles of the Act of Bogota signed on September 13, 1960, and 
m order to carry out the policies of this Act and the purposes of 
this section, the President shall, when requested by a friendly country 
and when appropriate, assist in fostering measures of agrarian re-
form, including colonization and redistribution of land, with a view 
to ensuring a wider and more equitable distribution of the ownership 
of land. 
SEC. 619. ASSISTANCE TO NEWLY INDEPENDENT COUNTRIES.—^As-
sistance under part I of this Act to newly independent countries shall, 
to the maximum extent appropriate in the circumstances of each case, 
be furnished through multilateral organizations or in accordance with 
multilateral plans, on a fair and equitable basis with due regard to 
self-help. 
SEC. 620. PROHIBITIONS AGAINST FURNISHING ASSISTANCE TO CUBA 
AND CERTAIN OTHER COUNTRIES.—(a) No assistance shall be furnished 
under this Act to the present government of Cuba. As an additional 
75 
S T A T . ] 
PUBLIC LAW 87-195-SEPT. 4, 1961 
445 
means of implementing and carrying into effect the policy of the 
preceding sentence, the President is authorized to establish and main-
tain a total embargo upon all trade between the United States and 
Cuba. 
(b) No assistance shall be furnished under this Act to the govern-
ment of any country unless the President determines that such country 
is not dominated or controlled by the international Communist 
movement. 
(c) No assistance shall be provided under this Act to the govern-
ment of any country which is indebted to any United States citizen 
for goods or services furnished, where such citizen has exhausted 
available legal remedies and the debt is not denied or contested by 
such government. 
(d) No assistance shall be furnished under section 201 of this Act 
for construction or operation of any productive enterprise in any 
country where such enterprise will compete with United States enter-
prise unless such country has agreed that it will establish appropriate 
procedures to prevent the exportation for use or consumption m the 
United States of more than twenty per centum of the annual produc-
tion of such facility during the life of the loan. In case of failure 
to implement such agreement by the other contracting party, the 
President is authorized to establish necessary import controls to ef-
fectuate the agreement. The restrictions imposed by or pursuant to 
this subsection may be waived by the President where he determines 
that such waiver is in the national security interest. 
CHAPTER 2—ADMINISTRATIVE PROVISIONS 
SEC. 621. EXERCISE OF FUNCTIONS.— (a) The President may exer-
cise any functions conferred upon him by this Act through such 
agency or officer of the United States Government as he shall direct. 
Tne head of any such agency or such officer may from time to time 
promulgate such rules and regulations as may be necessary to carry 
out such functions, and may delegate authority to perform any such 
functions, including, if he shall so specify, the authority successively 
to redelegate any of such functions to any of his subordinates. 
In 
providing technical assistance under this Act in the field of education, 
health, housing, or agriculture, or in other fields, the head of any 
such agency or such officer shall utilize, to the fullest extent practica-
ble, the facilities and resources of the Federal agency or agencies with 
primary responsibilities for domestic programs in such fields. 
(b) Notwithstanding the provisions of section 642(a), the corpo-
rate entity known as the Development Loan Fund, the International 
Cooperation Administration, and the Office of the Inspector General 
and Comptroller shall continue in existence for a period not to exceed 
sixty days after the effective date of this Act, unless sooner abolished 
by the President. There shall continue to be available to each such 
agency and office during such period the respective functions, offices, 
personnel, property, records, funds, and assets which were available 
thereto on the date prior to the effective date of this Act. 
(c) On the date of the abolition of the corporate entity known as the 
Development Loan Fund, the President shall designate an officer or 
head of an agency of the United States Government carrying out func-
tions under part I to whom shall be transferred, and who shall ac-
cept the assets of, assume the obligations and liabilities of, and exercise 
the rights established or acquired for the benefit of, or with respect to, 
the Fund as of the date of abolition and not otherwise disposed of by 
this Act. In addition, on such date the President shall designate such 
Rule 8 and regula-
tions. 
Abolition of cer-
tain agencies. 
D e v e l o i p m e n t 
Loan Fund. 
446 
PUBLIC LAW 87-195-SEPT. 4, 1961 
[75 ST A T . 
International Co-
operation Adminis-
tration. 
Transfers of es-
se ts, obligations, 
etc. 
68 Stat. 456. 
C o o r d i n a t i o n 
among representa-
tives of U. S. 
S e c r e t a r y of 
State. 
Responsibility. 
officer or head of agency as the person to be sued in the event of default 
in the fulfillment of the obligations of the Fund, and shall transfer to 
such officer or head of agency such offices, entities, functions, property, 
and records of the Fund as may be necessary, and notwithstanding 
any other provision of law, shall transfer to such officer or head of 
agency such personnel of the Fund as the President determines to 
be necessary. Not later than ninety days after the date of such trans-
fer, the President shall transmit to the Congress a final report of the 
operations and condition (as of the date of the transfer) of such Fund. 
(d) On the date of the abolition of the International Cooperation 
Administration the President shall transfer to an officer or head of 
an agency of the United States Government carrying out functions 
under part I such offices, entities, functions, property, records, and 
funds of such agency, not otherwise disposed of by this Act, as may 
be necessary, and notwithstanding any other provision of law, shall 
transfer to such officer or head of agency such personnel of the Inter-
national Cooperation Administration as the President determines to 
be necessary. 
(e) On the date of the abolition of the agencies referred to in sub-
sections (c) and (d) of this section, the President shall designate an 
officer or head of an agency of the United States Government carrying 
out functions under part I to whom shall be transferred, and who shall 
accept, the assets, obligations, and liabilities of, and the rights es-
tablished or acquired for the benefit of, or with respect to, the Export-
Import Bank of Washington related to the loans made by the Bank 
pursuant to section 104(e) of the Agricultural Trade Development and 
Assistance Act of 1954, as amended (7 U.S.C. 1704(e)), In addition, 
on such date the President shall designate such officer or head of agency 
to be sued in the event of default in the fulfillment of such obligations 
of the Bank, and shall transfer to such officer or head of agency such 
records of the Bank as may be necessary. 
SEC. 
622. 
COORDINATION W I T H FOREIGN POLICY.— (a) 
Nothing 
contained in this Act shall be construed to infringe upon the powers 
or functions of the Secretary of State. 
(b) The President shall prescribe appropriate procedures to assure 
coordination among representatives of the United States Government 
in each country, under the leadership of the Chief of the United States 
Diplomatic Mission. The Chief of the diplomatic mission shall make 
sure that recommendations of such representatives pertaining to mili-
tary assistance are coordinated with political and economic considera-
tions, and his comments shall accompany such recommendations if he 
so desires. 
(c) Under the direction of the President, the Secretary of State 
shall be responsible for the continuous supervision and general direc-
tion of the assistance programs authorized by this Actj including but 
not limited to determining whether there shall be a military assistance 
program for a country and the value thereof, to the end that such 
programs are effectively integrated both at home and abroad and the 
foreign policv of the United States is best served thereby. 
SEC. 623. T H E SECRETARY or DEFENSE.— (a) In the case of assist-
ance under part II of this Act, the Secretary of Defense shall have 
primary responsibility for— 
(1) the determination of military end-item requirements; 
(2) the procurement of military equipment in a manner which 
permits its integration with service programs; 
(3) the supervision of end-item use by the recipient countries; 
(4) the supervision of the training of foreign military person-
nel; 
(5) the movement and delivery of military end-items; and 
75 S T A T . ] 
PUBLIC LAW 87-195-SEPT. 4, 1961 
447 
(6) within the Department of Defense, the performance of any 
other functions with respect to the furnishing of military 
assistance. 
(b) The establishment of priorities in the procurement, delivery, 
and allocation of military equipment shall be determined by the Sec-
cretary of Defense. 
SEC. 624. STATUTORY OFFICERS.— (a) The President may appoint. Appointment. 
by and with the advice and consent of the Senate, tw^elve officers in the 
agency primarily responsible for administering part I, of whom— 
(1) one shall have the rank of an Under Secretary and shall be 
compensated at a rate not to exceed the rate authorized by law for 
any Under Secretary of an Executive Department; 
(2) tw^o shall have the rank of Deputy Under Secretaries and 
shall be compensated at a rate not to exceed the rate authorized by 
law for any Deputy Under Secretary of an Executive Depart-
ment ; and 
(3) nine shall have the rank of Assistant Secretaries and shall 
be compensated at a rate not to exceed the rate authorized by law 
for any Assistant Secretary of an Executive Department, and in 
the selection of one of such persons due consideration shall be 
given to persons qualified as professional engineers. 
(b) Within the limitations established by subsection (a) of this 
section, the President may fix the rate of compensation, and may desig-
nate the title of, any officer appointed pursuant to the authority con-
tained in that subsection. The President may also fix the order of 
succession among the officers provided for in paragraphs (2) and (3) 
of subsection (a) of this section in the event of the absence, death, 
resignation, or disability of the officers provided for in paragraphs 
(1) and (2) of that subsection. 
(c) Any person who was appointed by and w^ith the advice and con-
sent of the Senate, to any statutory position authorized by any pro-
vision of law repealed by section 642(a) and who is serving in one of 
such positions at the time of transfer of functions pursuant to sub-
sections (c) and (d) of section 621, may be appointed by the President 
to a comparable position authorized by subsection (a) of this section 
on the date of the establishment of the agency primarily responsible 
for administering part I, without further action by the Senate. 
(d) Notwithstanding the provisions of sections 642(a)(1) and 
642(a) (2), any person who, on the date prior to the effective date of 
this Act, held an office or a position authorized pursuant to sections 
205(b), 527(b), or 533A of the Mutual Security Act of 1954, as 17^?, Yr^sV ^' ^' 
amended, or Eeorganization Plan Numbered 7 of 1953, may continue 
67 stat. 639. 
to hold such office or position, subject to the discretion of the head of note. ^^^ 
^^^^ 
the agency primarily responsible for administering part I, for a period 
of not more than sixty days following the effective date of this Act. 
(e) (1) In addition to the officers provided for in subsection (a) of 
^ntments"°^ ^^* 
this section, there shall be in the Department of State an officer with ^°^" ""^^ ^' 
the title of "Inspector General, Foreign Assistance," who shall be 
appointed by the President, by and w^ith the advice and consent of the 
Senate. 
In addition, there shall be one Deputy Inspector General, 
Foreign Assistance, and two Assistant Inspector Generals, Foreign 
Assistance, who shall be appointed by the President, and such other 
personnel as may be required to carry out the functions vested in the 
Inspector General, Foreign Assistance, by this subsection. 
Notwith- 
°Ge"erl'i^an''d 
standing any other provisions of law, such of the personnel employed compuoiier. 
under the authority of section 533A of the Mutual Security Act of 
Transfers. 
1954, as amended, as the Inspector General, Foreign Assistance, may 
22 use 1793a. 
desig:nate, and such of the property, records, and funds of the office 
established by such section 533A as the Inspector General, Foreign 
448 
PUBLIC LAW 87-195-SEPT. 4, 1961 
[75 ST A T . 
Inspector 
G e n -
e r a l , Foreign As-
sistance. 
Compensation. 
Duties. 
68 Stat. 454. 
7 u s e 1691 note. 
A c c e s s to rec-
ords, etc., of other 
agencies. 
Suspension 
thority. 
Assistance, may deem necessary, may be transferred to the office of 
the Inspector General, Foreign Assistance. 
The Inspector General, 
Foreign Assistance, shall receive compensation at the rate of $20,000 
annually; the Dej)iiity Inspector General^ Foreign Assistance, shall 
receive compensation at the rate of $19,500 annually, and each 
Assistant Inspector General, Foreign Assistance, shall receive com-
pensation at the rate of $19,000 annually, 
(2) The Inspector General, Foreign Assistance, shall report 
directly to the Secretary of State and shall have the following duties 
and responsibilities: 
(A) He shall arrange for, direct or conduct such reviews, in-
spections and audits of programs being conducted under part I 
of this Act and of the Peace Corps as he considers necessary for 
the j)urpose of ascertaining the efficiency and the economy of their 
administration, their consonance with the foreign policy of the 
United States, and the attainment of their objectives. 
(B) For the purpose of ascertaining the extent to which pro-
grams of assistance being carried out under part I I of this Act 
and the Agricultural Trade Development and Assistance Act of 
1954, as amended, are in consonance with the foreign policy of the 
United States, are aiding in the attainment of the objectives of this 
Act, and are being carried out consistently with the responsibili-
ties with respect thereto of the respective United States chiefs of 
missions and of the Secretary of State, as well as the efficiency 
and the economy with which such responsibilities are discharged, 
he shall arrange for, direct or conduct such reviews, inspections 
and audits of programs of assistance under part I I of this Act 
and the Agricultural Trade Development and Assistance Act of 
1954, as amended, as he considers necessary. 
(3) The Inspector General, Foreign Assistance, shall maintain con-
tinuous observation and review of programs with respect to which he 
has responsibilities under paragraph (2) of this subsection for the 
purpose of— 
(A) determining the extent to which such programs are in 
compliance with applicable laws and regulations; 
(B) making recommendations for the correction of deficiencies 
in, or for improving the organization, plans or procedures of, 
such programs; and 
(C) evaluating the effectiveness of such programs in attaining 
United States f o r e i ^ policy objectives and reporting to the 
Secretary of State with respect thereto. 
(4) In order to eliminate duplication and to assure full utilization 
of existing data, the Inspector General, Foreign Assistance, shall, in 
carrying out his duties under this Act, give due regard to the audit, 
investigative and inspection activities of the various agencies, includ-
ing those of the General Accounting Office and of the military In-
spectors General. 
(5) For the purpose of aiding in carrying out his duties under this 
Act, the Inspector General, Foreign Assistance, shall have access to 
all records, reports, audits, reviews, documents, papers, recommenda-
tions, or other material of the agencies of the United States Govern-
ment administering part I or part I I of this Act, the Peace Corps or 
the Agricultural Trade Development and Assistance Act of 1954, as 
amended. All agencies of the United States Government shall coop-
erate with the Inspector General, Foreign Assistance, and shall fur-
nish assistance upon request to the Inspector General, Foreign 
Assistance, in aid of his responsibilities. 
(6) The Inspector General, Foreign Assistance, shall have author-
ity to suspend all or any part of any project or operation (but not a 
75 S T A T . ] 
PUBLIC LAW 87-195-SEPT. 4, 1961 
449 
country program) with respect to which he has conducted or is con-
ducting an inspection, audit or review provided he first has given writ-
ten notice to the Secretary of State. Any such suspension shall remain 
effective until such program or part thereof is ordered resumed by 
the Inspector General, Foreign Assistance, or by the Secretary of 
State. This paragraph shall not apply to part I I of this Act, and with 
respect to the Agricultural Trade Development and Assistance Act of 
1954, as amended, shall apply only to projects and operations admin- 
7ulcfi6<)i'*note. 
istered by the Secretary of State. 
(7) Expenses of the Inspector General, Foreign Assistance, with specfoTG^ene"!!!"' 
respect to programs under part I or part I I of this Act and the 
Peace Corps shall be charged to the appropriations made to carry 
out such programs, and with respect to programs under the Agricul-
tural Trade Development and Assistance Act of 1954, as amended, 
shall be charged to funds available under the authority of this Act: 
Provided^ That such appropriations shall not be charged with such 
expenses after the expiration of a thirty-five day period which begins 
on the date the General Accounting Office, or any committee of the 
Congress, or any duly authorized subcommittee thereof, charged with 
considering legislation, appropriations, or expenditures under the Act, 
has delivered to the Office of the Secretary of State a written request 
that it be furnished any document, paper, communication, audit, re-
view, finding, recommendation, report, or other material which relates 
to the operation or activities of the Inspector General, Foreign Assist-
ance, unless and until there has been furnished to the General Account-
ing Office, or to such committee, or subcommittee, as the case may be, 
(A) the document, paper, communication, audit, review, finding, 
recommendation, report, or other material so requested, or (B) a 
certification by the President personally that he has forbidden the 
furnishing thereof pursuant to such request and his reason for so 
doin^. Tne waiver authority in section 614(a) of this Act and the 
provisions of section 634(c) of this Act shall not apply to this sub-
section. Such expenses shall not exceed $2,000,000 in any fiscal year. 
The Inspector General, Foreign Assistance, may make exi)enditures 
(not in excess of $2,000 in any fiscal year) of a confidential nature 
when he finds that such expenditures are in aid of inspections, audits 
or reviews under this subsection. A certificate of the amount of each 
such expenditure, the nature of which it is considered inadvisable to 
specify, shall be made by the Inspector General, Foreign Assistance, 
and every such certificate shall be deemed a sufficient voucher for the 
amount therein specified. 
SEC. 625. EMPLOYMENT OF PERSONNEL.—(a) Any agency or officer 
of the United States Government carrying out functions under this 
Act is authorized to employ such personnel as the President deems 
necessary to carry out the provisions and purposes of this Act. 
(b) Of the personnel employed in the United States to carry out 
E
art I or coordinate part I and part II, not to exceed seventy-six may 
e appointed, compensated, or removed without regard to the provi-
sions of any law, oi whom not to exceed fifty-one may be compensated 
at rates higher than those provided for grade 15 of the general 
schedule established by the Classification Act of 1949, as amended 
(5 U.S.C. 1071 et seq.), and of these, not to exceed eight may be 63 stat. 954. 
compensated at a rate m excess of the highest rate provided for grades 
of such general schedule but not in excess of $19,000 per year: 
Provided^ That, under such regulations as the President shall pre-
scribe, officers and employees of the United States Government who 
are appointed to any of the above positions may be entitled, upon 
removal from such position, to reinstatement to the position occupied 
at the time of appointment or to a position of comparable grade and 
450 
PUBLIC LAW 87-195-SEPT. 4, 1961 
[75 STAT. 
salary. Such positions shall be in addition to those authorized by law 
to be filled by Presidential appointment, and in addition to the number 
5 use 1105. 
authorized by section 505 of the Classification Act of 1949, as amended. 
(c) Of the personnel employed in the United States to carry out 
part II, not to exceed eight may be compensated at rates higher than 
those provided for grade 15 of the general schedule established by the 
Classification Act of 1949, as amended, and of these, not to exceed 
three may be compensated at a rate in excess of the highest rate pro-
vided for grades of such general schedule but not in excess of $19,000 
per year. Such positions shall be in addition to those authorized by 
law to be filled by Presidential appointment, and in addition to the 
number authorized by section 505 of the Classification Act of 1949, as 
amended. 
(d) For the purpose of performing functions under this Act outside 
the United States the President may— 
(1) employ or assign persons, or authorize the employment or 
assignment of officers or employees by agencies of the United 
States Government, who shall receive compensation at any of the 
rates provided for the Foreign Service Reserve and Staff by the 
60 Stat. 999. 
Foreigu Service Act of 1946, as amended (22 U.S.C. 801 et seq.), 
together with allowances and benefits thereunder; and persons 
so employed or assigned shall be entitled, except to the extent that 
the President may specify otherwise in cases in which the period 
of employment or assignment exceeds thirty months, to the same 
22 use 928. 
benefits as are provided by section 528 of that Act for persons 
appointed to the Foreign Service Reserve, and the provisions of 
22 use 807. 
section 1005 of that Act shall apply in the case of such persons, 
except that policymaking officials shall not be subject to that part 
of section 1005 of that Act which prohibits political tests; and 
(2) utilize such authority, including authority to appoint and 
assign personnel for the duration of operations under this Act, 
contained in the Foreign Service Act of 1946, as amended, as the 
President deems necessary to carry out functions under this Act; 
and such provisions of the Foreign Service Act of 1946, as 
amended, as the President deems appropriate shall apply to per-
sonnel appointed or assigned under this paragraph, including in 
all cases the provisions of section 528 of that Act: Provided^ 
however^ That the President may by regulation make exceptions 
to the application of section 528 in cases in which the period of 
the appointment or assigfnment exceeds thirty months: Provided 
further^ That Foreign Service Reserve officers appointed or as-
signed pursuant to this paragraph shall receive within-class sal-
ary increases in accordance with such regulations as the President 
may prescribe. 
leveiV fo/'"e°rson- 
^^) ^^^ President is authorized to prescribe by regulation stand-
nei. 
ards or other criteria for maintaining adequate performance levels 
Standards. 
f^j, persouuel appointed or assigned pursuant to paragraph (2) of 
subsection (d) of this section and section 527(c)(2) of the Mutual 
22 use 1787. 
Security Act of 1954, as amended, and may, notwithstanding any other 
law^, but subject to an appropriate administrative appeal, separate 
employees who fail to meet such standards or other criteria, and also 
may grant such personnel severance benefits of one month's salary for 
each year's service, but not to exceed one year's salary at the then 
current salary rate of such personnel. 
Personnel serv- 
(f) Fuuds provided for in agreements with foreign countries for 
Funds. 
the furnishing- of services under this Act shall be deemed to be ob-
ligated for the services of personnel employed by the United States 
Government as well as other personnel. 
tees 
V7 
60 Stat. 810. 
75 S T A T . ] 
PUBLIC LAW 87-195-SEPT. 4, 1961 
451 
(g) The principles regarding foreign language competence set 
forth in section 5Y8 of the Foreign Service Act of 1946, as amended 
(22 U.S.C. 801), shall be applicable to personnel carrying out func- 
22 vie ^ts.' 
tions under this Act and the Secretary of State shall make appropriate 
designations and standards for such personnel. 
(h) Notwithstanding any other provision of law, oificers and em-
ployees of the United States Government performing functions under 
this Act shall not accept from any foreign country any compensation 
or other benefits. 
Arrangements may be made by the President with 
such countries for reimbursement to the United States Government 
or other sharing of the cost of performing such functions. 
(i) To the maximum extent practicable officers and employees per-
forming functions under this Act abroad shall be assigned to countries 
and positions for which they have special competence, such as appro-
priate language and practical experience. 
SEC. 626. EXPERTS, CONSULTANTS, AND RETIRED OFFICERS.— (a) 
Ex-
perts and consultants or organizations thereof may, as authorized by 
section 15 of the Act of August 2, 1946, as amended (5 U.S.C. 55a), 
be employed for the performance of functions under this Act, and 
individuals so employed may be compensated at rates not in excess 
of $75 per diem, and while away from their homes or regular places 
of business, they may be paid actual travel expenses and per diem in 
lieu of subsistence at the applicable rate prescribed in the standardized 
Government travel regulations, as amended from time to time. 
Con-
tracts for such employment with such organizations, employment of 
personnel as experts and consultants, not to exceed ten in number, 
contracts for such employment of retired military personnel with 
specialized research and development experience, not to exceed ten in 
number, and contracts for such employment of retired military person-
nel with specialized experience of a broad politico-military nature, 
not to exceed five in number, may be renewed annually. 
(b) Service of an individual as an expert or consultant under sub-
section (a) of this section shall not be considered as service or employ-
ment bringing such individual within the provisions of section 281, 
283, or 284 of title 18 of the United States Code, or of section 190 of ^
^
6
^
2 stat. 6 9 7, 
the Revised Statutes (5 U.S.C. 99), or of any other Federal law 
imposing restrictions, requirements, or penalties in relation to the 
employment of persons, the performance of services, or the payment 
or receipt of compensation in connection with any claim, proceeding, 
or matter involving the United States Government, except insofar as 
• such provisions of law may prohibit any such individual from receiv-
ing compensation in respect of any particular matter in which such 
individual was directly involved in the performance of such service. 
Nor shall such service be considered as employment or holding of office 
or position bringing such individual within the provisions of section 
13 of the Civil Service Retirement Act, as amended (5 U.S.C. 2263), 
7o stat. 757. 
section 212 of Public Law 72-212, as amended (5 U.S.C. 59a), section 
^7 stat. 406. 
872 of the Foreign Service Act of 1946, as amended, or any other law 
limiting the reemployment of retired officers or employees or govern-
ing the simultaneous receipt of compensation and retired pay or 
annuities. 
(c) Notwithstanding section 2 of the Act of July 31, 1894, as 
amended (5 U.S.C. 62), any retired officer of any of the services 
28 stat. 205. 
mentioned in the Career Compensation Act of 1949, as amended (37 
U.S.C. 231 et seq.), may hold any office or appointment under this 
63 stat. 302. 
Act, but the compensation of any such retired officer shall be subiect 
to the provisions of section 212 of Public Law 72-212, as amended. 
* "^^ 5-'^-
(d) Persons of outstanding experience and ability may be employea ' 
without compensation by any agency of the United States Government 
462 
PUBLIC LAW 87-196-SEPT. 4, 1961 
[76 STAT. 
for the performance of functions under this Act in accordance with the 
provisions of section 710(b) of the Defense Production Act of 1950, as 
69 Stat. 582. 
amended 
(50 U.S.C. App. 2160(b)), and regulations 
issued 
thereunder. 
SEC. 627. DETAIL, OF PERSONNEL TO FOREIGN GOVERNMENTS.—^When-
ever the President determines it to be in furtherance of the purposes of 
this Act, the head of any agency of the United States Government is 
authorized to detail or assign any officer or employee of his agency to 
any office or position with any foreign government or foreign govern-
ment agency, where acceptance of such office or position does not 
involve the taking of an oath of allegiance to another government or 
the acceptance of compensation or other benefits from any foreign 
country by such officer or employee. 
SEC. 628. DETAIL OF PERSONNEL TO INTERNATIONAL ORGANIZATIONS.— 
Whenever the President determines it to be consistent with and in 
furtherance of the purposes of this Act, the head of any agency of the 
United States Government is authorized to detail, assign, or otherwise 
make available to any international organization any officer or 
employee of his agency to serve with, or as a member of, the interna-
tional staff of such organization, or to render any technical, scientific, 
or professional advice or service to, or in cooperation with, such 
organization. 
SEC. 629. STATUS OF PERSONNEL DETAILED.—(a) Any officer or 
employee, while assigned or detailed under section 627 or 628 of this 
Act, shall be considered, for the purpose of preserving his allowances, 
privileges, rights, seniority, and other benefits as such, an officer or 
employee of the United States Government and of the agency of the 
United States Government from which detailed or assigned, and he 
shall continue to receive compensation, allowances, and benefits from 
funds appropriated to that agency or made available to that agency 
under this Act. 
(b) Any officer or employee assigned, detailed, or ai)pointed under 
section 627, 628, 631, or 624(e) of this Act is authorized to receive 
under such regulations as the President may prescribe, representation 
allowances similar to those allowed under section 901 of the Foreign 
74 Stat. 801. 
Service Act of 1946, as amended (22 U.S.C. 1131). The authoriza-
tion of such allowances and other benefits and the payment thereof 
out of any appropriations available therefor shall be considered as 
meeting all the requirements of section 1765 of the Revised Statutes 
(5 U.S.C. 70). 
SEC. 630. TERMS OF DETAIL OR ASSIGNMENT.—Details or assign-
ments may be made under section 627 or 628 of this Act or section 408 
22 use 1928. 
of the Mutual Security Act of 1954, as amended— 
(1) without reimbursement to the United States Government 
by the foreign government or international organization; 
(2) upon agreement by the foreign government or interna-
tional organization to reimburse the United States Government 
for compensation, travel expenses, and allowances, or any part 
thereof, payable to the officer or employee concerned during the 
period of assignment or detail; and such reimbursements (includ-
ing foreign currencies) shall be credited to the appropriation, 
fund, or account utilized for paying such compensation, travel 
expenses, or allowances, or to the appropriation, fund, or account 
currently available for such purposes; 
(3) upon an advance of funds, property, or services by the 
foreign government or international organization to the United 
States Government accepted with the approval of the President 
for specified uses in furtherance of the purposes of this Act; and 
funds so advanced may be established as a separate fund in the 
22 use 801 note. 
75 STAT.] 
PUBLIC LAW 87-195-SEPT. 4, 1961 
453 
Treasury of the United States Government, to be available for 
the specified uses, and to be used for reimbursement of apj)ropri-
ations or direct expenditure subject to the provisions of this Act, 
any unexpended balance of such account to be returned to the 
foreign government or international organization; or 
(4) subject to the receipt by the United States Government of 
a credit to be applied against the payment by the United States 
Government of its share of the expenses of the international 
organization to which the officer or employee is detailed or as-
signed, such credit to be based upon the compensation, travel 
expenses, and allowances, or any part thereof, payable to such 
officer or employee during the period of detail or assignment in 
accordance with section 629. 
SEC. 631. MISSIONS AND STAFFS ABROAD.—(a) 
The President 
may 
maintain special missions or staffs outside the United States in such 
countries and for such periods of time as maj be necessary to carry 
out the purposes of this Act. 
Each such special mission or staff shall 
be under the direction of a chief. 
(b) The chief and his deputy of each special mission or staff carry-
ing out the purposes of part I shall be appointed by the President, 
and may, notwithstanding any other law, be removed oy the President 
at his discretion. 
Such chief shall be entitled to receive (1) in cases 
approved by the President, the same compensation and allowances 
as a chief of mission, class 3, or a chief of mission, class 4, within the 
meaning of the Foreign Service Act of 1946, as amended, or (2) com- 
22usc8oi'nc 
pensation and allowances in accordance with section 625(d), as the 
President shall determine to be appropriate. 
•3EC. 632. ALLOCATION AND REIMBURSEMENT AMONG AGENCIES.— 
(a) The President may allocate or transfer to any agency of the 
United States Government any part of any funds available for carry-
ing out the purposes of this Act, including any advance to the United 
States Government by any country or international organization for 
the procurement of commodities, defense articles, or services (including 
defense services). 
Such funds shall be available for obligation and 
expenditure for the purposes for which authorized, in accordance with 
authority granted m this Act or under authority governing the 
activities of the agencies of the United States Government to which 
such funds are allocated or transferred. 
(b) Any officer of the United States Government carrying out 
functions under this Act may utilize the services (including defense 
services) and facilities of, or procure commodities and defense articles 
from, any agency of the United States Government as the President 
shall direct, or with the consent of the head of such agency, and funds 
allocated pursuant to this subsection to any such agency may be estab-
lished in separate appropriation accounts on the books of the Treasury. 
(c) In the case of any commodity, service, or facility procured from 
any agency of the United States Government to carry out part I, 
reimbursement or payment shall be made to such agency from funds 
available to carry out such part. 
Such reimbursement or payment 
shall be at replacement cost, or, if required by law, at actual cost, or 
at any other price authorized by law and agreed to by the owning or 
disposing agency. 
The amount of any such reimbursement or payment 
shall be credited to current applicable appropriations, funds, or 
accounts, from which there may be procured replacements of similar 
commodities, services, or facilities, except that where such appropri-
ations, funds, or accounts are not reimbursable except by reason of this 
subsection, and when the owning or disposing agency determines that 
such replacement is not necessary, any funds received in payment 
therefor shall be deposited into the Treasury as miscellaneous receipts. 
454 
PUBLIC LAW 87-195-SEPT. 4, 1961 
[75 S T A T . 
(d) Except as otherwise provided in sections 507 and 510, reimburse-
ment shall be made to any United States Government agency, from 
funds available for use under part II, for any assistance furnished 
under part I I from, by, or through such agency. 
Such reimbursement 
shall be in an amount equal to the value (as defined in section 644(m)) 
of the defense articles or of the defense services (other than salaries 
of members of the Armed Forces of the United States), or other assist-
ance furnished, plus expenses arising from or incident to operations 
under part II. 
The amount of such reimbursement shall be credited 
to the current applicable appropriations, funds, or accounts of such 
agency. 
(e) In furnishing assistance under this Act, accounts may be estab-
lished on the books of any agency of the United States Government or, 
on terms and conditions approved by the Secretary of the Treasury, 
in banking institutions in the United States, (1) against which letters 
of commitment may be issued which shall constitute recordable obliga-
tions of the United States Government, and moneys due or to become 
due under such letters of commitment shall be assignable under the 
Assignment of Claims Act of 1940, as amended (second and third 
54 Stat. 1029. 
paragraphs of 31 U.S.C. 203 and 41 U.S.C. 15), and (2) from which 
disbursements may be made to, or withdrawals may be made by, 
recipient countries or agencies, organizations, or persons upon presen-
tation of contracts, invoices, or other appropriate documentation. 
Expenditure of funds which have been made available through 
accounts so established shall be accounted for on standard docu-
mentation required for expenditure of funds of the United States 
Government: Provided^ That such expenditures for commodities, 
defense articles, services (including defense services), or facilities pro-
cured outside the United States may be accounted for exclusively on 
such certification as may be prescribed in regulations approved by the 
Comptroller General of the United States. 
(f) Credits made by the Export-Import Bank of Washington 
with funds allocated thereto under subsection (a) of this section or 
22 use 1782. 
under section 522(a) of the Mutual Security Act of 1954, as amended, 
shall not be considered in determining whether the Bank has out-
standing at any one time loans and guaranties to the extent of the 
limitation imposed by section 7 of the Export-Import Bank Act of 
1945, as amended (12 U.S.C. 635e). 
(g) Any appropriation or account available to carry out provisions 
of part I may initially be charged in any fiscal year, within the limit 
of available funds, to finance expenses for which funds are available 
in other appropriations or accounts under part I : Provided^ That as 
of the end of such fiscal year such expenses shall be finally charged 
to applicable appropriations or accounts with proper credit to the 
appropriations or accounts initially utilized for financing purposes: 
Provided further^ That such final charge to applicable appropriations 
or accounts shall not be required in the case of expenses (other than 
those provided for under section 637(a)) incurred in furnishing 
assistance by the agency primarily responsible for administering part 
I where it is determined that the accounting costs of identifying the 
applicable appropriation or account to which such expenses should be 
charged would be disproportionate to the advantage to be gained. 
SEC. 633. WAIVERS OF CERTAIN LAWS.—(a) Whenever the President 
determines it to be in furtherance of the purposes of this Act, the 
functions authorized under this Act may be performed without re-
gard to such provisions of law (other than the Renegotiation Act of 
65 Stat. 7. 
jggj^^ ^g amended (50 U.S.C. App. 1211 et seq.)), regulating the mak-
ing, performance, amendment, or modification of contracts and the ex-
penditure of funds of the United States Government as the Presi-
dent may specify. 
75 S T A T . ] 
PUBLIC LAW 87-195-SEPT. 4, 1961 
455 
(b) The functions autliorized under part II may be performed 
without regard to such provisions as the President may specify of 
the joint resolution of November 4, 1939 (54 Stat. 4), as amended. 
(c) Notwithstanding the provisions of sections 3544(b) and 8544 
(b) of title 10 of the United States Code, personnel of the Depart-
ment of Defense may be assigned or detailed to any civil office to 
carry out this Act. 
SEC. 634. REPORTS AND INFORMATION.—(a) The President shall, g^J/^P"'* *° ^°"-
while funds made available for the purposes of this Act remain avail-
able for obligation, transmit to the Congress after the close of each 
fiscal year a report concerning operations in that fiscal year under this 
Act. 
Each such report shall include information on the operation 
of the investment guaranty program. 
(b) The President shall, in the reports required by subsection (a) 
of this section, and in response to requests from Members of the Con-
gress or inquiries from the public, make public all information con-
cerning operations under this Act not deemed by him to be incompat-
ible with the security of the United States. In the case of each loan 
made from the Development Loan Fund established pursuant to 
section 201(a) the President shall make public appropriate informa-
tion about the loan, including information about the borrower, the 
nature of the activity being financed, and the economic development 
objectives being served by the loan. 
(c) None of the funds made available pursuant to the provisions of 
this Act shall be used to carry out any provision of this Act in any 
country or with respect to any project or activity, after the expiration 
of the thirty-five-day period which begins on the date the General 
Accounting Office or any committee of the Congress charged with con-
sidering legislation, appropriations or expenditures under this Act, 
has delivered to the office of the head of any agency carrying out such 
provision, a written request that it be furnished any document, paper, 
communication, audit, review, finding, recommendation, report, or 
other material in its custody or control relating to the administration 
of such provision in such country or with respect to such project or 
activity, unless and until there has been furnished to the General Ac-
counting Office, or to such committee, as the case may be, (1) the docu-
ment, paper, communication, audit, review, finding, recommendation, 
report, or other material so requested, or (2) a certification by the 
President that he has forbidden the furnishing thereof pursuant to 
request and his reason for so doing. 
(d) In January of each year, the President shall notify the Com 
mittee on Foreign Relations and the Committee on Appropriations of committeea. 
the Senate and the Speaker of the House of Representatives of all 
actions taken during the preceding twelve months under this Act 
which resulted in furnishing assistance of a kind, for a purpose, or to 
;'n area, substantially different from that included in the presentation 
to the Congress during its consideration of this Act or any Act appro-
priating funds pursuant to authorizations contained in this Act, or 
which resulted in obligations or reservations greater by 50 per centum 
or more than the proposed obligations or reservations included in 
such presentation for the program concerned, and in his notification 
the President shall state the justification for such changes. 
In addi-
tion, the President shall promptly notify the Committee on Foreign 
Relations and the Committee on Appropriations of the Senate and the 
Speaker of the House of Representatives of any determination under 
section 303, 610, 614(a), or 614(b). 
(e) The President shall include in his recommendations to the Con- ^, ^!^°II?"i!."'^^" 
gress for programs under this Act for each fiscal year a specific plan 
for each country receiving bilateral grant economic assistance 
Notif ic a t i o n of 
c on g r e s s i o n a l 
tions to Congress. 
456 
PUBLIC LAW 87-195-SEPT. 4, 1961 
[ 75 ST AT . 
Use of voluntary 
organizations. 
Acceptance of 
gifts, etc. 
Health and acci-
dent insurance. 
All en p a r t i c i -
pants. 
66 Stat. 166. 
Loans. 
59 Stat. 597. 
whereby, wherever practicable, such grant economic assistance shall be 
progressively reduced and eventually terminated. 
SEC. 635, GENERAL AUTHORITIES.—(a) Except as otherwise spe-
cifically provided in this Act, assistance under this Act may be fur-
nished on a grant basis or on such terms, including cash, credit, or other 
terms of repayment (including repayment in foreign currencies or by 
transfer to the United States Government of commodities) as may be 
determined to be best suited to the achievement of the purposes of this 
Act, and shall emphasize loans rather than grants wherever possible. 
(b) The President may make loans, advances, and grants to, make 
and perform agreements and contracts with, or enter into other trans-
actions with, any individual, corporation, or other body of persons, 
friendly government or government agency, whether within or with-
out the United States, and international organizations in furtherance 
of the purposes and within the limitations of this Act. 
(c) It is the sense of Congress that the President, in furthering the 
purposes of this Act, shall use to the maximum extent practicable the 
services and facilities of voluntary, nonprofit organizations registered 
with, and approved by, the Advisory Committee on Voluntary Foreign 
Aid. 
(d) The President may accept and use in furtherance of the 
E
urposes of this Act, money, funds, property, and services of any 
ind made available by gift, devise, bequest, grant, or otherwise for 
such purpose. 
(e) Any agency of the United States Government is authorized 
to pay the cost of health and accident insurance for foreign partici-
pants in any program of furnishing technical information and assist-
ance administered by such agency while such participants are absent 
from their homes for the purpose of participation in such program. 
(f) Alien participants in any program of furnishing technical 
information and assistance under this Act may be admitted to the 
United States if otherwise qualified as nonimmigrants under section 
101(a) (15) of the Immigration and Nationality Act, as amended 
(8 U.S.C. 1101(a) (15)), for such time and under such conditions as 
may be prescribed by regulations promulgated by the Secretary of 
State and the Attorney General. 
(g) In makinjg loans under this Act, the President— 
(1) may issue letters of credit and letters of commitment; 
(2) may collect or compromise any obligations assigned to, or 
held by, and any legal or equitable rights accruing to him, and, 
as he may determine, refer any such obligations or rights to the 
Attorney General for suit or collection; 
(3) may acquire and dispose of, upon such terms and condi-
tions as he may determine, any property, including any instru-
ment evidencing indebtedness or ownership (provided that equity 
securities may not be directly purchased although such securities 
mav be acquired by other means such as by exercise of conversion 
rights or through enforcement of liens or pledges or otherwise 
to satisfy a previously incurred indebtedness), and guarantee 
payment against any such instrument; 
(4) may determine the character of, and necessity for, obli-
gations and expenditures of funds used in making such loans 
and the manner in which they shall be incurred, allowed, and 
paid, subject to provisions of law specifically applicable to 
corporations of the United States Government; and 
(5) shall cause to be maintained an integral set of accounts 
which shall be audited by the General Accounting Office in 
accordance with principles and procedures applicable to com-
mercial corporate transactions as provided by the Government 
Corporation Control Act, as amended (31 U.S.C. 841 et seq.). 
75 S T A T . ] 
PUBLIC LAW 87-196-SEPT. 4, 1961 
457 
(h) A conti'act or agreement which entails commitments for the 
expenditure of funds made available under titles I I and V of chapter 
2 of part I and under part I I may, subject to any future action of 
the Congress, extend at any time for not more than five years. 
(i) Claims arising as a result of investment guaranty operations 
may be settled, and disputes arising as a result thereof may be arbi-
trated with the consent of the parties, on such terms and conditions 
as the President may direct. 
Payment made pursuant to any such 
settlement, or as a result of an arbitration award, shall be final and 
conclusive notwithstanding any other provision of law. 
(j) The provisions of section 955 of title 18 of the United States 
Code shall not apply to prevent any person, including any individual, 
partnership, corporation, or association, from acting for, or partici-
pating in, any operation or transaction arising under this Act, or 
from acquiring any obligation issued in connection with any operation 
or transaction arising under this Act. 
SEC. 636. PROVISIONS ON USES OF FUNDS.— (a) Appropriations for 
the purposes of or pursuant to this Act (except for part I I ) , allocations 
to any agency of the United States Government, from other appropri-
ations, for functions directly related to the purposes of this Act, and 
funds made available for other purposes to the agency primarily 
responsible for administering part I, shall be availahle tor: 
(1) rent of buildings and space in buildings in the United 
States, and for repair, alteration, and improvement of such leased 
properties; 
(2) expenses of attendance at meetings concerned with the 
purposes of such appropriations or of this Act, including (not-
withstanding the provisions of section 9 of Public Law 60-328 
(31 U.S.C. 673)) expenses in connection with meetings of persons 
whose employment is authorized by section 626; 
(3) contracting with individuals for personal services abroad: 
Provided, That such individuals shall not be regarded as employ-
ees of the United States Government for the purpose of any law 
administered by the Civil Service Commission; 
(4) purchase, maintenance, operation, and hire of aircraft: 
Provided, That aircraft for administrative purposes may be pur-
chased only as specifically provided for in an appropriation or 
other Act; 
(5) purchase and hire of passenger motor vehicles: Provided, 
That, except as may otherwise be provided in an appropriation or 
other Act, passenger motor vehicles for administrative purposes 
outside the United States may be purchased for replacement only, 
and such vehicles may be exchanged or sold and replaced by an 
equal number of such vehicles, and the cost, including exchange 
allowance, of each such replacement shall not exceed $3,500 in the 
case of an automobile for the chief of any special mission or staff 
outside the United States established under section 631: Provided 
further, 
That passenger motor vehicles, other than one for the 
official use (without regard to the limitations contained in section 
5 of Public Law 63-127, as amended (5 U.S.C. 78(c) (2)) and 
section 201 of Public Law 85^68 (5 U.S.C. 78a-l)) of the head 
of the agency primarily responsible for administering part I, 
may be purchased for use in the United States only as may be 
specifically provided in an appropriation or other Act; 
(6) entertainment (not to exceed $25,000 in any fiscal year 
except as may otherwise be provided in an appropriation or 
other Act); 
(7) exchange of funds without regard to section 3651 of the 
Revised Statutes (31 U.S.C. 543) and loss by exchange; 
64207 0-62—32 
C o n t r a « : t s or 
agreements. 
Five year limit. 
Investment guar-
anty operations. 
Claims. 
62 Stat. 744. 
Rents, 
d o m e s -
tic. 
Atten d ii n c e at 
meetings. 
35 Stat. 1027. 
Personal s er v-
ices. 
Aircraft. 
Passenger motor 
vehicles. 
60 Stat. 810. 
72 Stat. 224. 
Entertainment. 
E x c h a n g e of 
funds. 
458 
PUBLIC LAW 87-196-SEPT. 4, 1961 
[75 S T A T . 
Exp en s e s of a 
confidential 
char-
acter. 
Rents, foreign. 
Transport at I o n 
of deceased indi-
viduals. 
Uniforms. 
Per diem. 
60 Stat. 999. 
Water. 
Coast and G e o-
detlc Survey offi-
cers. 
Travel of p e r-
sonnel. 
AvallabU i t y o f 
funds. 
(8) expenditures (not to exceed $50,000 in any fiscal year except 
as may otherwise be provided in an appropriation or other Act) 
of a confidential character other than entertainment: 
Provided, 
That a certificate of the amount of each such expenditure, the 
nature of which it is considered inadvisable to specify, shall be 
made by the head of the agency primarily responsible for admin-
istering part I or such person as he may designate, and every 
such certificate shall be deemed a sufficient voucher for the amount 
therein specified; 
(9) insurance of official motor vehicles or aircraft acquired for 
use in foreign countries; 
(10) rent or lease outside the United States for not to exceed 
ten years of offices, buildings, grounds, and quarters, including 
living quarters to house personnel, and payments therefor in ad-
vance; maintenance, furnishings, necessary repairs, improve-
ments, and alterations to properties owned or rented by the United 
States Government or made available for use to the United States 
Government outside the United States; and costs of fuel, water, 
and utilities for such properties; 
(11) expenses of preparing and transporting to their former 
homes, or, with respect to foreign participants engaged in any 
program under part I, to their former homes or places of burial, 
and of care and disposition of, the remains of persons or members 
of the families of persons who may die while such persons are 
away from their homes participating in activities carried out with 
funds covered by this subsection; 
(12) purchase of uniforms; 
(13) payment of per diem in lieu of subsistence to foreign par-
ticipants engaged in any program under part I while such par-
ticipants are away from their homes in countries other than the 
United States, at rates not in excess of those prescribed by the 
standardized Government travel regulations, notwithstanding any 
other provision of law; 
(14) use in accordance with authorities of the Foreign Service 
Act of 1946, as amended (22 U.S.C. 801 et seq.), not otherwise 
provided for; 
(15) ice and drinking water for use outside the United States; 
(16) services of commissioned officers of the Coast and Geodetic 
Survey, and for the purposes of providing such services the Coast 
and Geodetic Survey may appoint not to exceed twenty commis-
sioned officers in addition to those otherwise authorized; 
(17) expenses in connection with travel of personnel outside 
the United States, including travel expenses of dependents (in-
cluding expenses during necessary stopovers while engaged in 
such travel), and transportation of personal effects, household 
goods, and automobiles of such personnel when any part of such 
travel or transportation begins in one fiscal year pursuant to travel 
orders issued m that fiscal year, notwithstanding the fact that 
such travel or transportation may not be completed during the 
same fiscal year, and cost of transporting automobiles to and from 
a place of storage, and the cost of storing automobiles of such 
personnel when it is in the public interest or more economical to 
authorize storage. 
(b) Funds made available for the purposes of this Act may be used 
for compensation, allowances, and travel of personnel including 
Foreign Service personnel whose services are utilized primarily for 
the purposes of this Act, for printing and binding without regard to 
the provisions of any other law, and for expenditures outside the 
75 
S T A T . ] 
PUBLIC LAW 87-195-SEPT. 4, 1961 
459 
United States for the procurement of supplies and services and for 
other administrative and operating purposes (other than compensa-
tion of personnel) without regard to such laws and regulations govern-
ing the obligation and expenditure of funds of the United States 
Government as may be necessary to accomplish the purposes of this 
Act. 
(c) Notwithstanding any other law, not to exceed $3,000,000 of the 
funds available for assistance under this Act (other than title I of 
chapter 2 of part I) may be used in any fiscal year (in addition to 
funds available for such use under other authorities in this Act) to 
construct or otherwise acquire outside the United States (1) essential 
living quarters, office space, and necessary supporting facilities for 
use of personnel carrying out activities authorized by this Act, and 
(2) schools (including dormitories and boarding facilities) and hos-
pitals for use of personnel carrying out activities authorized by this 
Act, United States Government personnel, and their dependents. 
In 
addition, funds made available for assistance under this Act (other 
than title I of chapter 2 of part I) may be used, notwithstanding any 
other law, to equip, staff, operate, and maintain such schools and 
hospitals. 
(d) Not to exceed $1,500,000 of the funds available for assistance 
under this Act (other than title I of chapter 2 of part I) may be used 
in any fiscal year to provide assistance, on such terms and conditions 
as are deemed appropriate, to schools established, or to be established, 
outside the United States whenever it is determined that such action 
would be more economical or would best serve the interests of the 
United States in providing for the education of dependents of per-
sonnel carrying out activities authorized by this Act and dependents 
of United States Government personnel, in lieu of acquisition or con-
struction pursuant to subsection (c) of this section. 
(e) Funds available under this Act (other than title I of chapter 2 
of part I) may be used to pay costs of training United States citizen 
personnel employed or assigned pursuant to section 625(d)(2) 
(through interchange or otherwise) at any State or local unit of 
government, public or private nonprofit institution, trade, labor, agri-
cultural, or scientific association or organization, or commercial firm; 
and the provisions of Public Law 84-918 (7 U.S.C. 1881 et seq.) may 
be used to carry out the foregoing authority notwithstanding that 
interchange of personnel may not be involved or that the training 
may not take place at the institutions specified in that Act. 
Such 
training shall not be considered employment or holding of office under 
section 2 of the Act of July 31, 1894, as amended (5 U.S.C. 62), and 
any payments or contributions in connection therewith may, as deemed 
appropriate by the head of the agency of the United States Govern-
ment authorizing such training, be made by private or public sources 
and be accepted by any trainee, or may be accepted by and credited to 
the current applicable appropriation of such agency: Promded^ how-
ever^ That any such payments to any employee in the nature of com-
pensation shall be in lieu, or in reduction, of compensation received 
from the United States Government. 
(f) Funds made available under section 212 may be used for ex-
penses (other than those provided for under section 637(a)) to assist 
m carrying out functions under title I of chapter 2 of part I, under the 
Agricultural Trade Development and Assistance Act of 1954, as 
amended (7 U.S.C. 1691 et seq.), and under the Act to provide for 
assistance in the development of Latin America and in the reconstruc-
tion of Chile, and for other purposes (22 U.S.C. 1942 et seq.), per-
formed by the agency primarily responsible for administering part I. 
Construction of 
living q u a r t e r s . 
E d u c s i t i o n of 
dependents. 
Training costs. 
70 Stat. 934. 
460 
PUBLIC LAW 87-195-SEPT. 4, 1961 
[75 S T A T . 
E x p e n s e s of 
military officers. 
Ante, p. 339. 
22 
note. u s e 
175 1 
22 
note. 
22 
note. 
u s e 1785 
u s e 1751 
22 u s e 1811 
note. 
70 Stat. 565. 
22 u s e 1753 
note, 1870. 
22 use 1750a. 
22 u s e 1922 
note. 
22 u s e 194 I, 
1928b note, 195 1 
note. 
2 2 u s e 
178 3 
note, 2071, 2072. 
(g) Funds made available for the purposes of part I I shall be avail-
able for— 
(1) administrative, extraordinary (not to exceed $300,000 in 
any fiscal year), and operating expenses; 
(2) reimbursement of actual expenses of military officers de-
tailed or assi^ed as tour directors m connection with orientation 
visits of foreign military personnel, in accordance with the pro-
visions of section 3 of the Travel Expense Act of 1949, as amended 
(5 U.S.C. 836), applicable to civilian officers and employees; and 
(3) maintenance, repair, alteration, and furnishing of United 
States-owned facilities in the District of Columbia or elsewhere 
for the training of foreign military personnel, without regard 
to the provisions of section 3733 of the Revised Statutes (41 
U.S.C. 12) or other provision of law requiring a specific author-
ization or specific appropriation for such public contracts. 
SEC. 637. ADMINISTRATIVE EXPENSES.— (a) There is hereby author-
ized to be appropriated to the President for the fiscal year 1962 not 
to exceed $50,000,000 for necessary administrative expensei of the 
agency primarily responsible for administering part I. 
(b) There is hereby authorized to be appropriated to the Secretary 
of State such amounts as may be necessary from time to time for ad-
ministrative expenses which are incurred for functions of the Depart-
ment of State under this Act and unrepealed provisions of the Mutual 
Security Act of 1954, as amended, or for normal functions of the 
Department of State which relate to such functions. 
CHAPTER 3—MISCELLANEOUS PROVISIONS 
SEC. 641. EFFECTIVE DATE AND IDENTIFICATION OF PROGRAMS.—This 
Act shall take effect on the date of its enactment. Programs under this 
Act shall be identified appropriately overseas as "American Aid". 
SEC. 642. STATUTES REPEALED.— (a) There are hereby repealed— 
(1) Reorganization Plan Numbered 7 of 1953; 
(2) the Mutual Security Act of 1954, as amended (except sec-
tions 143, 402, 405(a), 405(c), 405(d), 408, 414, 417, 451(c), 
502(a), 502(b), 514, 523(d), and 536) : Provided, That until the 
enactment of legislation authorizing and appropriating funds 
for activities heretofore carried on pursuant to sections 405(a), 
405(c), 405(d), and 451(c) of the Mutual Security Act of 1954, 
as amended, such activities may be continued with funds made 
available under section 451(a) of this Act; 
(3) section 12 of the Mutual Security Act of 1955; 
(4) sections 12,13, and 14 of the Mutual Security Act of 1956; 
section 503 of the Mutual Security Act of 1958; 
section 108 of the Mutual Security Appropriation Act, 
(5) 
(6) 
1959; 
(T) section 501 (a), chapter VI, and sections 702 and 703 of the 
Mutual Security Act of 1959, as amended; and 
(8) section 604 and chapter VIII of the Mutual Security Act 
of 1960. 
(b) References in law to the Acts, or provisions of such Acts, 
repealed by subsection (a) of this section shall hereafter be deemed 
to be references to this Act or approj)riate provisions of this Act. 
(c) The repeal of the Acts listed in subsection (a) of this section 
shall not be deemed to affect amendments contained in such Acts to 
Acts not named in that subsection. 
SEC. 643. SAVING PROVISIONS.—(a) 
Except as may be expressly 
provided to the contrary in this Act, all determinations, authoriza-
tions, regulations, orders, contracts, agreements, and other actions 
issued, undertaken, or entered into under authority of any provision 
75 S T A T . ] 
PUBLIC LAW 87-195-SEPT. 4, 1961 
461 
of law repealed by section 642(a) shall continue in full force and 
effect until modified by appropriate authority. 
(b) Wherever provisions of this Act establish conditions which 
must be complied with before use may be made of authority contained 
in, or funds authorized by, this Act, compliance with, or satisfaction 
of, substantially similar conditions under Acts listed in section 642(a) 
or Acts repealed by those Acts shall be deemed to constitute compliance 
with the conditions established by this Act. 
(c) Funds made available pursuant to provisions of law repealed 
by section 642(a)(2) shall, unless otherwise authorized or provided 
hj law, remain available for their original purposes in accordance 
with the provisions of law originally applicable thereto, or in accord-
ance with the provisions of law currently applicable to those purposes. 
(d) No provision of this Act shall affect, or be deemed to affect, 
except as the President may determine, the agency within the Depart-
ment of State known as the Peace Corps, nor any of the functions, 
offices, personnel, property, records, and lunds available thereto on 
the date prior to the effective date of this Act, pending the enactment 
of legislation for the Peace Corps or the adjournment of the first 
session of the Eighty-seventh Congress, whichever is earlier. 
SEC. 644. DEFINITIONS.—As used in this Act— 
(a) "Agency of the United States Government" includes any 
agency, department, board, wholly or partly owned corporation, in-
strumentality, commission, or establishment of the United States 
Government. 
(b) "Armed Forces" of the United States means the Army, Navy, 
Air Force, Marine Corps, and Coast Guard. 
(c) "Commodity" includes any material^ article, supply, goods, or 
equipment used for the purposes of furnishing nonmilitary assistance. 
(d) "Defense article" includes— 
(1) any weapon, weapons system, munition, aircraft, vessel, 
boat, or other implement of war; 
(2) any property, installation, commodity, material, equip-
ment, supply, or goods used for the purposes of furnishing mili-
tary assistance; 
(3) any machinery, facility, tool, material^ supply, or other 
item necessary for the manufacture, production, processing re-
pair, servicing, storage, construction, transportation, operation, 
or use of any article listed in this subsection; or 
(4) any component or part of any article listed in this sub-
section; but 
shall not include merchant vessels or, as defined by the Atomic Energy 
Act of 1954, as amended (42 U.S.C. 2011), source material, byproduct 
^* ^*^*- ^23. 
material, special nuclear material, or atomic weapons. 
(e) "Defense information" includes any document, writing, sketch, 
photograph, plan^ model, specification, design, prototype, or other 
recorded or oral information relating to any defense article or de-
fense service, but shall not include Restricted Data and formerly 
Restricted Data as defined by the Atomic Energy Act of 1954, as 
amended. 
(f) "Defense service" includes any service, test, inspection, repair, 
training, training aid, publication, or technical or other assistance, 
including the transfer of limited quantities of defense articles for test, 
evaluation, or standardization purposes, or defense information used 
for the purposes of furnishing military assistance. 
(g) "Excess defense articles" mean the quantity of defense articles, 
owned by the United States Government which is in excess of the 
mobilization reserve at the time such articles are dropped from inven-
tory by the supplying agency for delivery to countries or international 
organizations as grant assistance under this Act. 
462 
PUBLIC LAW 87-195-SEPT. 4, 1961 
[75 STAT. 
(h) "Function" includes any duty, obligation, power, authority, 
responsibility, right, privilege, discretion, or activity. 
(i) "Mobilization reserve" means the quantity of defense articles 
determined to be required, under regulations prescribed by the Presi-
dent, to support mobilization of the Armed Forces of the United States 
Government in the event of war or national emergency. 
(j) "OiRcer or employee" means civilian personnel and members of 
the Armed Forces of the United States Grovernment. 
(k) "Services" include any service, repair, training of personnel, 
or technical or other assistance or information used for the purposes 
of furnishing nonmilitary assistance. 
(1) "Surplus agricultural commodity" means any agricultural com-
modity or product thereof, class, kind, type, or other specification 
thereof, produced in the United States, either publicly or privately 
owned, which is in excess of domestic requirements, adequate carry-
over, and anticipated exports for United States dollars, as determined 
by the Secretary of Agriculture. 
(m) "Value" means— 
(1) with respect to excess defense articles, the gross cost in-
curred by the United States Government in repairing, rehabilitat-
ing, or modifying such articles; 
(2) with respect to nonexcess defense articles delivered from 
inventory to countries or international organizations as grant 
assistance under this Act, the standard price in effect at the time 
such articles are dropped from inventory by the supplying agency. 
Such price shall be the same standard price used for transfers or 
sales of such articles in or between the Armed Forces of the 
United States Government, or, where such articles are not trans-
ferred or sold in or between the Armed Forces of the United 
States, the gross cost to the United States Government adjusted 
as appropriate for condition and market value; and 
(3) with respect to nonexcess defense articles delivered from 
new procurement to countries or international organizations as 
grant assistance under this Act, the contract or production costs 
of such articles. 
Military assistance programs and orders shall be based upon the best 
estimates of stock status and prevailing prices; reimbursements to the 
supplying agency shall be made on the basis of the stock status and 
prices determined pursuant to this section. Notwithstanding the fore-
going provisions of this section, the Secretary of Defense may pre-
scribe regulations authorizing reimbursements to the supplying agency 
based on negotiated prices for aircraft, vessels, plant equipment, and 
such other major items as he may specify: Provided^ That such articles 
are not excess at the time such prices are negotiated: Provided 
further^ 
That such prices are negotiated at the time firm orders are placed 
with the supplying agency by the military assistance program. 
SEC. 645. UNEXPENDED BALANCES.—Unexpended balances of funds 
2 2^xjsc^^i'7 51 "^^de available pursuant to the Mutual Security Act of 1954, as 
note. 
amended, are hereby authorized to be continued available for the gen-
eral purposes for which appropriated, and may at any time be consoli-
dated, and, in addition, may be consolidated with appropriations made 
available for the same general purposes under the authority of this Act. 
Separability. 
g^^ g^g CONSTRUCTION.—If any provision of this Act or the appli-
cation of any provision to any circumstances or persons shall be held 
invalid, the validity of the remainder of this Act, and of the appli-
cability of such provision to other circumstances or persons shall not 
be affected thereby. 
Development 
^^^' ^47. DEPENDABLE FuEL SuppLY.—It is of paramount impor-
program. 
tance that long-range economic plans take cognizance of the need for a 
75 S T A T . ] 
PUBLIC LAW 87-195-SEPT. 4, 1961 
463 
dependable supply of fuels, which is necessary to orderly and stable 
development and growth, and that dependence not be placed upon 
sources w^iich are inherently hostile to free countries and the ultimate 
well-being of economically underdeveloped countries and which might 
exploit such dependence for ultimate political domination. 
The 
agencies of government in the United States are directed to work wdth 
other countries in developing plans for basing development pro-
grams on the use of the large and stable supply of relatively low cost 
fuels available in the free world. 
PART IV 
SEC. 701. Section 1 of the Defense Base Act, as amended (42 U.S.C. 
^2 stat. 272. 
1651), is further amended as follows: 
(1) In paragraph (5) of subsection (a) insert after "thereof" in the 
second parenthetical phrase "unless the Secretary of Labor, upon the 
recommendation of the head of any department or other agency of the 
United States, determines a contract financed under a successor pro-
vision of any successor Act should be covered by this section". 
(2) In subsection (e) strike out "June 30, 1958, but not completed 
^3 stat. 257. 
on July 24, 1959" and substitute therefor "but not completed on the 
date of enactment of any successor Act to the Mutual Security Act of 
1954, as amended". 
SEC. 702. In paragraph (4) of section 101(a) of the War Hazards 
Compensation Act, as amended 
(42 U.S.C. 1701), insert after 
72 stat. 273. 
"thereof" in the parenthetical phrase "unless the Secretary of Labor, 
upon the recommendation of the liead of any department or other 
agency of the United States Government, determines a contract fi-
nanced under a successor provision of any successor Act should be 
covered by this section". 
SEC. 703. (a) Section 305 of the Mutual Defense Assistance Control 
Act of 1951 (22 U.S.C. 1611 et seq.) is amended to read as follows: 
es stat. 647. 
"SEC. 305. There is hereby authorized to be appropriated to the 
Secretary of State such sums as may be necessary from time to time 
to administer and carry out the objectives of this Act." 
(b) The amendment to section 305 of the Mutual Defense Assist- _^^„Pf^i,^'^ ^^"^^ 
ance Control Act of 1951 effected by subsection (a) of this section 
sliall not be deemed to affect the repeal of laws effected by that section 
prior to such amendment. 
SEC. 704. Section 104(e) of the Agricultural Trade Development 
and Assistance Act of 1954, as amended (7 U.S.C. 1704(e)), is ^^68 st^at. 456; 71 
amended by substituting "such agency as the President shall direct" 
and "agency" for "the Export-Import Bank" and "bank", respectively. 
SEC. 705. Section 5 of the joint resolution to promote peace and 
stability in the Middle East (22 U.S.C. 1964) is amended by substi-
tuting "whenever appropriate" for "within the months of January 
and July of each year". 
SEC. 706. The Act to provide for assistance in the development of 
Latin America and in the reconstruction of Chile, and for other pur-
poses (22 U.S.C. 1942 et seq.), is amended by adding a new section 4 
^4 stat. see. 
reading as follows: 
"GENERAL 
PROVISIONS 
"SEC. 4. (a) Funds appropriated under sections 2 and 3 of this Act 
22 use 1 94 3, 
may be used for assistance under this Act pursuant to such provisions ^^^'^' 
applicable to the furnishing of such assistance contained in any suc-
cessor Act to the Mutual Security Act of 1954, as amended, as the 
^^ ^***' *'^^' 
President determines to be necessary to carry out the purposes for note. "^^ ^^^^ 
wliich such funds are appropriated. 
not affected. 
stat. 345. 
71 Stat. 6. 
74 Stat. 139. 
464 
PUBLIC LAW 87-195-SEPT. 4, 1961 
[75 S T A T . 
"(b) Of the funds appropriated under section 2 of this Act not 
more than $800,000 shall be available only for assisting in transporting 
to and settling in Latin America selected immigrants from that por-
tion of the Ryukyuan Archipelago under United States administra-
tion." 
SEC. 707. Section 523(d) of the Mutual Security Act of 1954, as 
amended (22 U.S.C. 1783(d)), is amended by striking out the words 
achievement of United States foreign policy objectives" and inserting 
in lieu thereof the words "prevention of improper currency trans-
actions". 
SEC. 708. The Foreign Service Act of 1946, as amended (22 U.S.C. 
801 et seq.), is further amended as follows: 
stlt.^8^7'. ^°^^' ^'* 
(•^) ^^ ^^^^ second sentence of section 701, strike "to the extent that 
22 use 1041. 
space is available therefor"; substitute "members of family" for 
"spouses"; and add before the period "or while abroad". 
22 use ith 
^^) Amend section 872 by striking out subsections (b) and (c) and 
inserting in lieu thereof the following: 
"(b) When any such retired officer or employee of the Service is 
reemployed, the employer shall send a notice to the Department of 
State of such reemployment together with all pertinent information 
relating thereto, and shall pay directly to such officer or employee the 
salary of the position in which he is serving. 
"(c) In the event of any overpayment under this section, such over-
payment shall be recovered by witnholding the amount involved from 
the salary payable to such reemployed officer or employee, or from any 
other moneys, including his annuity, payable in accordance with the 
provisions of this title." 
22 use 1136. 
(3) In section 911, add the following new paragraphs (9) and (10) : 
"(9) the travel expenses of officers and employees of the Serv-
ice who are citizens of the United States, and members of their 
families, while serving at posts specifically designated by the 
Secretary for purposes of this paragraph, for rest and recupera-
tion to other locations abroad having different environmental 
conditions than those at the post at which such officers and em-
ployees are serving, provided that such travel expenses shall be 
limited to the cost for each officer or employee and members of 
his family of one round trip during any continuous two-year tour 
unbroken by home leave and two round trips during any con-
tinuous three-year tour unbroken by home leave; 
" (10) the travel expenses of memoers of the family accompany-
ing, preceding, or following an officer or employee if, while he 
is en route to his post of assignment, he is ordered temporarily for 
orientation and training or is given other temporary duty." 
2
2 use 1148. 
(4) Amend section 933 (a) to read as follows: 
"(a) The Secretary may order to the continental United States, its 
territories and possessions, on statutory leave of absence any officer or 
employee of the Service who is a citizen of the United States upon 
completion of eighteen months' continuous service abroad and shall so 
order as soon as possible after completion of three years of such 
service." 
22 use 1157. 
(5) Amend the title of section 942 and subsection (a) thereof to 
read as follows: 
"TRAVEL FOR MEDICAL PURPOSES 
"SEC. 942. (a) In the event an officer or employee of the Service 
who is a citizen of the United States or one of his dependents, requires 
medical care, for illness or injury not the result of vicious habits, in-
temperance or misconduct, while stationed abroad in a locality where 
there is no qualified person or facility to provide such care, the Secre-
tary may, in accordance with such regulations as he may prescribe, 
75 
S T A T . ] 
PUBLIC LAW 87-196-SEPT. 5, 1961 
465 
pay the travel expenses of such person by whatever means he shall 
deem appropriate, including the furnishing of transportation, and 
without regard to the Standardized Government Travel Regulations 
and section 10 of the Act of March 3, 1933, as amended (60 Stat. 
808; 5 U.S.C. 73b), to the nearest locality where suitable medical 
care can be obtained. If any such officer, employee, or dependent 
is too ill to travel unattended, or in the case of a dependent too 
young to travel alone, the Secretary may also pay the round-trip 
travel expenses of an attendant or attendants." 
SEC. 709. Section 2 of the Act of July 31, 1945, as amended (22 
U.S.C. 279a), is hereby amended to read as follows: 
"SEC. 2. There is hereby authorized to be appropriated, out of any 
monev in the Treasury not otherwise appropriated, such sums as 
may be required for expenditure under the direction of the Secre-
tary of State, for the payment by the United States of its propor-
tionate share in the expenses of the Organization: Provided^ That 
the percentage contribution of the United States to the total annual 
budget of the Organization shall not exceed 33.33 per centum." 
SEC. 710. (a) The first section of the Act entitled "An Act to 
authorize participation by the United States in the Interparliamen-
tary Union", approved June 28, 1935, as amended (22 U.S.C. 276), 
is amended by striking out $33,000" and "$15,000" and inserting 
in lieu thereof "$48,000" and "$30,000", respectivelv. 
(b) The amendments made by this section shall be effective only 
for the fiscal year 1962. 
Approved September 4, 1961. 
U. S. F'ood and 
Agfic u 11 n f a 1 Or-
ganization. 
Appropriation. 
Interparlia m e n-
tary Union. 
Public Law 87-196 
JOINT RESOLUTION 
To amend the Securities Bxcliange Act of 1934 so as to authorize and direct the 
Securities and Exchange Commission to conduct a study and investigation 
of the adequacy, for the protection of investors, of the rules of national 
securities exchanges and national securities associations. 
September 5, 1961 
[H. J. Res. 438] 
Study. 
48 Stat. 898. 
IS u s e 78 s. 
R e p o r t to Con-
gress. 
Resolved hy the Senate and House of Representatives of the United 
States of America in Congress assembled^ That section 19 of the glchrnV* com-
Securities Exchange Act of 1934 is amended by adding at the end mission 
thereof a new subsection as follows: 
"(d) The Commission is authorized and directed to make a study 
and investigation of the adequacy, for the protection of investors, 
of the rules of national securities exchanges and national securities 
associations, including rules for the expulsion, suspension, or disciplin-
ing of a member for conduct inconsistent with just and equitable prin-
ciples of trade. The Commission shall report to the Congress on or 
before January 3, 1963, the results of its study and investigation, 
together with its recommendations, including such recommendations 
for legislation as it deems advisable. The Commission is authorized 
to appoint, without regard to the civil service laws, rules, and regula-
tions, such personnel as the Commission deems advisable to carry out 
such study and investigation and to fix their respective rates of com-
pensation without regard to the Classification Act of 1949, as amended, 
but no such rate shall exceed $18,500 per annum. To carry out such 
study and investigation there is hereby authorized to be appropriated 
the sum of $750,000." 
Approved September 5, 1961. 
63 Stat. 954. 
5 u s e 1071 note. 
Appropriation.