health and education. This amendment should contain the same basic provision that is contained in the last sentence of section 203 (j) (1) which reads:

"No such property shall be transferred for use within any State except to the State agency designated under State law for the purpose of distributing, in conformity with the provisions of this subsection, all property allocated under this subsection for use within such State."

The association hopes that Senator Gruening's subcommittee of the Senate Committee on Government Operations will pursue the four studies which are outlined in detail as parts (a), (b), (c), and (d) contained in Senate Report No. 836, 86th Congress, 1st session, pages 8 and 9 of said report.

Senator GRUENING. Is Mr. Harry Dreany of the ICA here?
Mr. DREANY. Yes, sir.

STATEMENT OF HARRY H. DREANY, INTERNATIONAL

COOPERATION ADMINISTRATION

Senator GRUENING. You have a statement on those various bills. I wish you would summarize it and tell us which bills you are in favor of and which bills you are opposed to and what amendments you favor.

Mr. DREANY. I don't believe we have actually a statement. I believe we sent a letter with respect to S. 2725 and S. 2732.5

Generally speaking, we favor S. 2732 with certain changes which we had suggested for making it a little easier to administer and to make the various determinations which will be required.

Senator GRUENING. Now, you suggest an amendment to S. 2732 with the following clause:

No property shall be donated under this section except pursuant to arrangements agreeable to the government of the country in which the property is to be used.

I wish you would elucidate on that, on page 4 of the letter of Senator McClellan, signed by Mr. Fitzgerald. (See pp. 164, 165.) Mr. DREANY. I do not have a copy.

Senator GRUENING. We have copies here.

For the record, you say:

The requirement in both bills (that is, S. 2732 and S. 2725), that the foreign country designate the organization to receive donations under the section presents two problems:

(1) The language especially as worded in S. 2732 could be construed to mean that the foreign country may designate only one agency to receive all property disposed of under the new section, which Federal agency will presumably distribute the property to other agencies; and

(2) The foreign government must play an active role by designating eligible agencies. It would seem an unnecessary complication to require one central receiving agency and to require formal designations by the foreign government.

I would propose as a substitute for the sentence appearing in lines 2 to 7 on page 3 of S. 2725, and on lines 6 to 12 of page 3 of S. 2732 of the following:

No property shall be donated under this section except pursuant to arrangements agreeable to the government of the country in which the property is to be used.

Senator GRUENING. This language (you say) should fully protect the interest of foreign governments, while avoiding unnecessarily formal procedures?

Mr. DREANY. That is correct. Because in some of the countries it might be necessary for them to set up some special agency, or it

5 See letter to Senator McClellan, dated June 1, 1960, p. 164.

might not even be necessary, but they might find it desirable. It would seem simpler to avoid this expense by utilizing existing agencies if the other government wished to, but not in effect requiring them to centralize it.

Senator GRUENING. Let me present a hypothetical case.

Supposing that in a country there are two or three institutions of various kinds which have been started by Americans, and they are in need of some of this property, and in disposing of it for one reason or another the government of that country decided that one of these institutions should get it and the other should not. Does that not open the way for a certain amount of favoritism and partiality?

Mr. DREANY. Well, I suppose you could say that, but at the same time we do consistently in all of our programs work with and through the other governments. In other words, we don't feel that we should be in the position of in effect dictating to the other government. If they had objections, some legitimate objection to a particular organization receiving the same benefits as another, well, we would feel that we should go along and respect their wishes in the matter.

Senator GRUENING. However, it is American property, and I think that that is a restriction that might cause a good deal of hard feelings. Mr. DREANY. I think that we would do our best to remove any discrimination, but without making it in effect too mandatory or too compulsory. We are many times able to do by persuasion things which wouldn't be possible by compulsion.

Senator GRUENING. Would the adoption of these bills facilitate the ICA program?

Mr. DREANY. Generally speaking; yes, sir.

Senator GRUENING. It would give you something in addition to what the Congress appropriated through its regular channels? Mr. DREANY. Yes; it would.

Senator GRUENING. You get surplus property now, do you not? Mr. DREANY. We get excess property.

Senator GRUENING. Not surplus property?

Mr. DREANY. We get excess, and at the moment we obtain it, it loses its status as excess and becomes ICA-owned property.

Senator GRUENING. But you have a chance to get excess, which has a higher rating than surplus. Why do you have to go into the surplus business?

Mr. DREANY. Well, actually, there isn't too much difference between foreign excess and surplus; in other words, the excess property overseas, we can get before it becomes surplus, before it is made eligible for sale by auction or otherwise within the countries. And to the extent that we need that property in the execution of our programs we can, you are quite correct, get it before it becomes surplus. But we don't have the authority outside of our regular programs to donate it to the kind of institutions which are set forth in these bills.

Senator GRUENING. You would not have the authority for the excess?

Mr. DREANY. I don't believe so, no, sir, not to donate it to private individuals. Now, we could transfer it to the other government for use on one of our approved programs.

Senator GRUENING. But still under this amendment that you propose, you would still have to consult the government of the foreign country in the disposal of surplus to educational institutions?

Mr. DREANY. That is correct, because we would probably not want to make the judgment unilaterally as to whether an institution was in fact a tax-free or a legitimate educational institution.

Senator GRUENING. I wonder whether there might not be a conflict in some of these situations. I can conceive of a situation where in foreign countries there would be various institutions, educational institutions with different sectarian affiliations, and the government of that country might have a strong leaning to one group as against the other, and it seems to me that might involve us in a certain amount of conflict.

Mr. DREANY. I am afraid you are right, I can see that these things could become very complicated.

Senator GRUENING. I would think that the Government of the United States would retain a certain amount of control over our own surplus, and if you are going to give it away, to have some voice in determining to whom it shall be given. Maybe that is an oldfashioned idea. But I think it should be considered.

Mr. DREANY. I don't believe that we really meant to relinquish the control. As a matter of fact, we suggested here that the criteria-in this letter, that the criteria-and so forth, should be established by a central agency acting in conjunction with the Department of State and with the Department of Defense. And included in that would be such measure of control as was necessary.

Senator GRUENING. Have you any figures in ICA as to what amounts of excess property you get in different countries?

Mr. DREANY. Yes, sir; we have those figures. I don't have them with me.

Senator GRUENING. I wonder whether you could not supply them for the record.

Now, we are engaged in rendering various kinds of assistance through ICA and development loans and by various other agencies to about 104 foreign countries. And that is a problem that comes up

every year.

In addition to that, you have access to excess property which does not figure in the foreign aid estimates presented to the Congress and it would be very useful to know how much of that there is. If we could have the figures for the amount of excess property that has been disposed of country by country, and year by year, it would be very helpful.

Mr. DREANY. I did furnish the figures last year to the subcommittee. But I can have them updated.

Senator GRUENING. Will you bring them up to date?

Mr. DREANY. Certainly, sir.

Senator GRUENING. Thank you very much. I appreciate that. (The material referred to follows:)