B-156766, MAY 21, 1965

B-156766: May 21, 1965

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WHEN IT WAS FIRST FORMALLY PROPOSED TO THE UNDER SECRETARY OF STATE BY A COMMITTEE OF CONSULTANTS ON PROBLEMS OF INTERNATIONAL FINANCE AND ECONOMICS (THE MASON COMMITTEE). UNITED STATES OWNED INDIAN RUPEE BALANCES HAVE INCREASED MORE THAN THREE HUNDRED (300 PERCENT) PERCENT. FURTHER INCREASES ARE PROJECTED FOR AT LEAST THE NEXT THREE YEARS AT AN AVERAGE ANNUAL RATE OF RS. 595. THE RUPEE BALANCES ARE NOT LEGALLY CONVERTIBLE TO DOLLARS OR OTHER HARD CURRENCY OR USABLE FOR UNITED STATES NEEDS OUTSIDE OF INDIA. PROJECTED FUTURE ACCRUALS ARE EXPECTED TO GREATLY EXCEED ESTIMATED UNITED STATES GOVERNMENT REQUIREMENTS. THE PROPOSED BI-NATIONAL FOUNDATION PLAN WILL PUT TO WORK A SUBSTANTIAL PORTION OF THE RUPEE BALANCES TO STRIKE AT A KEY BOTTLENECK TO INDIA'S CONTINUING ECONOMIC DEVELOPMENT.

B-156766, MAY 21, 1965

TO THE HONORABLE DAVID E. BELL, ADMINISTRATOR, AGENCY FOR INTERNATIONAL DEVELOPMENT DEPARTMENT OF STATE:

YOUR LETTER OF MAY 11, 1965, CONCERNS A PROPOSAL TO USE A PORTION OF THE LARGE UNITED STATES GOVERNMENT HOLDINGS OF INDIAN RUPEES EXCESS TO THIS GOVERNMENT'S PROJECTED NEEDS, TO ENDOW A MAJOR BI-NATIONAL FOUNDATION IN THE FIELDS OF EDUCATION AND SCIENCE. YOU REPORT THAT AGREEMENT BETWEEN THE UNITED STATES AND INDIA HAS NOW BEEN ACHIEVED ON ALL BASIC ELEMENTS OF THE PROPOSAL AND YOU EXPECT TO BE ADVISED SHORTLY OF FORMAL CABINET-LEVEL APPROVAL IN INDIA.

YOUR LETTER DISCLOSES THE FOLLOWING PERTINENT FACTS AND CIRCUMSTANCES.

THE BI-NATIONAL FOUNDATION APPROACH, AS A MEANS OF MAKING CONSTRUCTIVE USE OF THE EXCESS UNITED STATES--- OWNED INDIAN RUPEES, HAS BEEN UNDER CONSIDERATION IN THE EXECUTIVE BRANCH AND BY MEMBERS OF THE CONGRESS SINCE AT LEAST 1960, WHEN IT WAS FIRST FORMALLY PROPOSED TO THE UNDER SECRETARY OF STATE BY A COMMITTEE OF CONSULTANTS ON PROBLEMS OF INTERNATIONAL FINANCE AND ECONOMICS (THE MASON COMMITTEE). SINCE THE DATE OF THAT RECOMMENDATION, UNITED STATES OWNED INDIAN RUPEE BALANCES HAVE INCREASED MORE THAN THREE HUNDRED (300 PERCENT) PERCENT, FROM RS. 628,320,000 ($132,000,000 DOLLAR EQUIVALENT) IN 1960 TO AN ESTIMATED RS. 2,265,760,000 ($476,000,000 DOLLAR EQUIVALENT) AS OF JUNE 30, 1965. FURTHER INCREASES ARE PROJECTED FOR AT LEAST THE NEXT THREE YEARS AT AN AVERAGE ANNUAL RATE OF RS. 595,000,000 ($125,000,000 DOLLAR EQUIVALENT).

THESE ACCUMULATING BALANCES CREATE A SERIOUS POLITICAL PROBLEM FOR THE UNITED STATES. IN THE OPINION OF THE DEPARTMENT OF STATE, THE EXISTENCE OF THESE VAST CURRENCY HOLDINGS MAY BE EXPECTED TO CAUSE THIS GOVERNMENT AN INCREASING POLITICAL PROBLEM IN ANSWERING CHARGES OF

POTENTIAL UNITED STATES INTERFERENCE IN BASIC INTERNAL POLICY. ALSO, EXCEPT TO A SMALL EXTENT, THE RUPEE BALANCES ARE NOT LEGALLY CONVERTIBLE TO DOLLARS OR OTHER HARD CURRENCY OR USABLE FOR UNITED STATES NEEDS OUTSIDE OF INDIA. DESPITE CONTINUING EFFORT TO MAXIMIZE THE USE OF THESE BALANCES FOR UNITED STATES PROGRAMS IN INDIA, PROJECTED FUTURE ACCRUALS ARE EXPECTED TO GREATLY EXCEED ESTIMATED UNITED STATES GOVERNMENT REQUIREMENTS.

THE PROPOSED BI-NATIONAL FOUNDATION PLAN WILL PUT TO WORK A SUBSTANTIAL PORTION OF THE RUPEE BALANCES TO STRIKE AT A KEY BOTTLENECK TO INDIA'S CONTINUING ECONOMIC DEVELOPMENT, THE ABSENCE OF A BROAD BASE OF LITERACY IN THE CITIZENRY AND OF SUFFICIENT TRAINED PERSONNEL. ITIS BELIEVED THAT THE GREAT NEED OF INDIAN SCIENCE AND EDUCATION IS FOR AN INDEPENDENT INSTITUTION IN THE PRIVATE SECTOR ABLE TO SUPPLEMENT THE BROAD EFFORTS OF THE INDIAN GOVERNMENT BY PROVIDING INNOVATION, EXPERIMENTATION AND THE READY SUPPORT FOR PROMISING PROJECTS THAT HAS THUS FAR BEEN LACKING.

IT HAS, IN EFFECT, BEEN DETERMINED THAT A MAJOR FOUNDATION MODELED UPON SIMILAR INSTITUTIONS IN THE UNITED STATES AND DRAWING UPON THEIR EXPERIENCE IS THE OPTIMUM DEVICE TO THAT NEED. ITS FUNCTION WILL BE TO UNDERTAKE A CONTINUING AND SYSTEMATIC STUDY OF INDIA'S EDUCATIONAL AND SCIENTIFIC NEEDS AND, BASED ON SUCH A STUDY, TO LAUNCH AND SUPPORT A WIDE RANGE OF INITIATIVES DESIGNED TO ACHIEVE THE BREAKTHROUGHS NECESSARY TO DEVELOP A MORE EFFECTIVE EDUCATIONAL SYSTEM. THESE WOULD INCLUDE PROGRAMS SUCH AS:

CHART

DEVELOPMENT OF CENTERS OF ACADEMIC EXCELLENCE;

SCHOLARSHIPS FOR HIGHER EDUCATION AND ADVANCED STUDY;

TEACHER TRAINING SCHOOLS;

SUPPORT FOR INDIVIDUAL AND INSTITUTIONAL RESEARCH;

PILOT AND OTHER PROJECTS IN LITERACY AND ADULT EDUCATION,

PARTICULARLY TECHNICAL EDUCATION;

SPECIAL-SKILL TRAINING FOR THE "EDUCATED UNEMPLOYED; "

PROVISION OF INCENTIVES TO ENCOURAGE TRAINED, EXPATRIATE

INDIANS TO RETURN WITH THEIR SKILLS TO INDIA;

ENLARGED OPPORTUNITIES FOR AMERICAN AND OTHER AREA STUDIES

AND RESEARCH IN INDIA AND FOR INDIAN STUDIES AND RESEARCH

BY AMERICAN STUDENTS AND SCHOLARS;

CURRICULUM IMPROVEMENT IN THE SCIENCES, HUMANITIES AND SOCIAL

SCIENCES;

PROGRAM TESTING AND EVALUATION;

ENGLISH LANGUAGE AND OTHER LINGUISTIC TRAINING;

BOOK AND LIBRARY PROGRAMS; AND

IMPROVEMENT OF MASS COMMUNICATIONS, INCLUDING JOURNALISM AND

EDUCATIONAL RADIO AND TELEVISION.

THE PROPOSED FOUNDATION WILL BE ORGANIZED AS A SEPARATE AND AUTONOMOUS ENTITY. IT WILL BE GOVERNED BY A BOARD OF DISTINGUISHED CITIZENS, INDIANS AND AMERICANS IN EQUAL NUMBERS. IT WILL HAVE ITS PRINCIPAL OFFICES IN INDIA. ITS INITIAL ENDOWMENT WILL BE APPROXIMATELY RS. 885,360,000 ($186,000,000 EQUIVALENT). THIS AMOUNT REPRESENTS THE PROJECTED ACCUMULATION OF PUBLIC LAW 480 UNITED STATES USES INDIAN RUPEES AS OF JUNE 1965. UNITED STATES-USES INDIAN RUPEES DERIVED FROM OTHER SOURCES AND AVAILABLE AS OF THAT DATE WILL BE APPROXIMATELY RS. 1,380,400,000 ($290,000,000 EQUIVALENT), ESTIMATED, AND WILL BE RETAINED. THE ENDOWMENT WILL BE INVESTED IN A SPECIAL ISSUE OF GOVERNMENT OF INDIA BONDS, TO BEAR INTEREST AT THREE AND ONE HALF PERCENT. THIS COMPARES FAVORABLY WITH THE ONE AND ONE-HALF (1 1/2 PERCENT) PERCENT INTEREST RATE NOW APPLICABLE TO UNITED STATES USE RUPEES. THE FOUNDATION'S GRANTS WILL BE MADE PRIMARILY FROM THIS INCOME, SOME PORTION OF WHICH WILL BE CONVERTED TO DOLLARS BY THE INDIAN GOVERNMENT FOR THE FOUNDATION'S FOREIGN EXCHANGE COSTS. CAPITAL FUNDS WILL BE AVAILABLE FOR THE SUPPORT OF SPECIAL PROJECTS, SUBJECT TO LIMITATIONS AGREED UPON. THE UNITED STATES GOVERNMENT WILL RETAIN REVERSIONARY RIGHTS. THE FOUNDATIONS'S PURPOSES, POWERS AND ORGANIZATION WILL BE DEFINED IN ITS CHARTER, WHICH WILL COME INTO EFFECT ONLY UPON THE APPROVAL OF THE UNITED STATES. ITS CREATION WILL NOT REQUIRE ANY ADDITIONAL DOLLAR COMMITMENT BY THE UNITED STATES.

YOU ADVISE THAT YOU PLAN TO DISCUSS THIS PROJECT IN THE NEAR FUTURE WITH THE PUBLIC LAW 480 ADVISORY COMMITTEE AND, IN DUE COURSE, TO TRANSMIT THE PROPOSAL TO THE AGRICULTURAL COMMITTEES OF THE CONGRESS. THE GRANT TO THE PROPOSED BI-NATIONAL FOUNDATION WILL BE MADE PURSUANT TO SECTION 104 (E) OF THE AGRICULTURAL TRADE DEVELOPMENT AND ASSISTANCE ACT OF 1954 (PUBLIC LAW 480), AS AMENDED, 7 U.S.C. 1704 (C), IN ACCORDANCE WITH A FORMAL AGREEMENT TO BE ENTERED INTO BETWEEN THE TWO GOVERNMENTS.

SECTION 104 OF THE AGRICULTURAL TRADE DEVELOPMENT AND ASSISTANCE ACT OF 1954 (PUBLIC LAW 480), AS AMENDED, 7 U.S.C. 1704, PROVIDES IN PERTINENT PART AS FOLLOWS:

"NOTWITHSTANDING * * * OR ANY OTHER PROVISION OF LAW, THE PRESIDENT MAY USE OR ENTER INTO AGREEMENTS WITH FRIENDLY NATIONS OR ORGANIZATIONS OF NATIONS TO USE THE FOREIGN CURRENCIES, INCLUDING PRINCIPAL AND INTEREST FROM LOAN REPAYMENTS, WHICH ACCRUE UNDER THIS SUBCHAPTER FOR ONE OR MORE OF THE FOLLOWING PURPOSES.

"/E) FOR PROMOTING BALANCED ECONOMIC DEVELOPMENT AND TRADE AMONG NATIONS

THE PROPOSED GRANT INVOLVED HERE WILL BE FOR THE PURPOSE OF PROMOTING "BALANCED ECONOMIC DEVELOPMENT.'

YOU STATE THAT THE MATTER IS BROUGHT TO OUR ATTENTION IN VIEW OF OUR DECISION OF DECEMBER 6, 1962, B-149441, AND OUR DECISION OF JANUARY 20, 1964, B-15205, DEALING WITH THE TREATMENT OF INTEREST ON CERTAIN GRANTS, IN ORDER TO AVOID ANY POSSIBILITY OF A CLOUD ON THE TITLE OF FUNDS TO BE GRANTED BY THE UNITED STATES. FOR THE REASONS INDICATED IN YOUR LETTER (WHICH ARE SET FORTH IN PART BELOW) YOU BELIEVE THAT THE PRESENT PROPOSAL IS CONSISTENT WITH THE RATIONALE AND INTENT OF OUR CITED DECISIONS.

IN OUR ABOVE-CITED DECISIONS WE HELD GENERALLY THAT INTEREST EARNED BY THE GRANTEE ON FUNDS GRANTED BY THE UNITED STATES INURES TO THE BENEFIT OF THE UNITED STATES RATHER THAN THE GRANTEE AND, UNDER THE TERMS OF SECTION 3617, REVISED STATUTES, 31 U.S.C. 484, SHOULD BE ACCOUNTED FOR AND DEPOSITED IN THE TREASURY AS MISCELLANEOUS RECEIPTS. ALSO, IN B-149441, WE QUESTIONED WHETHER THE AUTHORITY IN SECTION 104 TO PROVIDE FINANCIAL ASSISTANCE BY GRANTS, CONTRACTS OR OTHERWISE, INCLUDED AUTHORITY TO ESTABLISH ENDOWMENT FUNDS BY GRANTS-IN-AID AS A PERMANENT FUND TO BE INVESTED AND THE INTEREST OR OTHER INCOME BE USED FOR THE PURPOSE FOR WHICH THE ORIGINAL GRANT WAS MADE. WE EXPRESSED THE VIEW IN THE SAME DECISION THAT LEGISLATIVE AUTHORITY SHOULD BE OBTAINED PRIOR TO MAKING GRANTS FOR ENDOWMENTS ON BEHALF OF AMERICAN SPONSORED SCHOOLS ABROAD.

YOU STATE THAT SUBSEQUENT TO PROMULGATION OF B-149441 AND B-152505, CONGRESS HAS ADDRESSED ITSELF TO THE PROBLEM OF THE TERMS AND CONDITIONS OF GRANTS AND LOANS OF PUBLIC LAW 480 CURRENCIES, PARTICULARLY EXCESS CURRENCIES, AND HAS PROVIDED NEW MECHANISMS AND PROCEDURES FOR THE EXERCISE OF THE DEGREE OF CONGRESSIONAL REVIEW IN THIS AREA THAT IT DEEMS APPROPRIATE.

YOU POINT OUT THAT IN THE ACT OF OCTOBER 8, 1964, PUB.L. 88-638, 78 STAT. 1035, EXTENDING AND AMENDING PUBLIC LAW 480, CONGRESS ESTABLISHED NEW PROCEDURES FOR TRANSMISSION OF CERTAIN PUBLIC LAW 480 LOAN PROPOSALS BY THE PRESIDENT TO A JOINT EXECUTIVE BRANCH-LEGISLATIVE BRANCH ADVISORY COMMITTEE AND ALL PROPOSALS TO GRANT PUBLIC LAW 480 FOREIGN CURRENCIES TO THE SENATE AND HOUSE AGRICULTURAL COMMITTEES, AND REQUIRED THAT FURTHER ACTION ON GRANTS BE DEFERRED FOLLOWING SUCH TRANSMISSION FOR A PERIOD OF THIRTY DAYS. YOU EXPRESS THE VIEW THAT IN SO ACTING, THE CONGRESS CLEARLY REJECTED THE ORIGINAL SENATE PROPOSAL THAT SPECIAL APPROPRIATIONS BE REQUIRED AND, AS THE LEGISLATIVE HISTORY MAKES CLEAR, WAS CAREFUL TO PROTECT THE NECESSARY DISCRETIONARY POWERS OF THE PRESIDENT, IN NEGOTIATING TITLE I SALES AGREEMENTS AND IN THE EXERCISE OF OTHER STATUTORY AUTHORITIES, TO USE FOREIGN CURRENCIES ACCRUING TO THE UNITED STATES IN SUCH MANNER AS, IN HIS JUDGMENT, IS MOST CONSISTENT WITH THE NATIONAL INTEREST.

SECTION 1 (8) OF PUBLIC LAW 88-638 AMENDED SECTION 104 OF PUBLIC LAW 480 BY ADDING AT THE END THEREOF THE FOLLOWING:

" "THERE IS HEREBY ESTABLISHED AN ADVISORY COMMITTEE COMPOSED OF THE SECRETARY OF AGRICULTURE, THE DIRECTOR OF THE BUREAU OF THE BUDGET, THE ADMINISTRATOR OF THE AGENCY FOR INTERNATIONAL DEVELOPMENT, THE CHAIRMAN AND THE RANKING MINORITY MEMBER OF THE HOUSE COMMITTEE ON AGRICULTURE, AND THE CHAIRMAN AND THE RANKING MINORITY MEMBER OF THE SENATE COMMITTEE ON AGRICULTURE AND FORESTRY. SUCH COMMITTEE SHALL REVIEW FROM TIME TO TIME THE STATUS AND USAGE OF FOREIGN CURRENCIES WHICH ACCRUE UNDER THIS TITLE, AND SHALL MAKE RECOMMENDATIONS TO THE PRESIDENT AS TO WAYS AND MEANS OF ASSURING TO THE UNITED STATES (1) THE MAXIMUM BENEFIT FROM THE USE OF SUCH CURRENCIES, MAKING SPECIAL REFERENCE TO ANY SUCH CURRENCIES WHICH ARE EXCESS TO THE NORMAL REQUIREMENTS OF UNITED STATES AGENCIES, AND (2) THE MAXIMUM RETURN FROM SALES MADE UNDER THIS TITLE. SUCH COMMITTEE SHALL MAKE SUCH OTHER RECOMMENDATIONS FOR IMPROVING THIS ACT AND ITS ADMINISTRATION AS SUCH COMMITTEE MAY DEEM FIT.

" "THE COMMITTEE SHALL BE CONSULTED WITH RESPECT TO: (1) POLICIES RELATING TO (A) LOANS UNDER SUBSECTION (C) AND (G) HEREOF, (B) THE DEGREE OF CONVERTIBILITY TO BE REQUIRED UNDER SECTION 101 (G), AND (C) THE AMOUNT OF CURRENCY TO BE RESERVED IN SALES AGREEMENTS FOR LOANS TO PRIVATE INDUSTRY UNDER SUBSECTION (E) HEREOF; AND (2) EACH PROPOSAL TO ESTABLISH AN INTEREST RATE FOR DOLLAR SALES UNDER TITLE IV HIGHER THAN THE MINIMUM PROVIDED IN SECTION 403.

" "NO AGREEMENT OR PROPOSAL TO GRANT ANY FOREIGN CURRENCIES (EXCEPT AS PROVIDED IN SUBSECTION (C) OF THIS SECTION), OR TO USE (EXCEPT PURSUANT TO APPROPRIATION ACT) ANY PRINCIPAL OR INTEREST FROM LOAN REPAYMENTS UNDER THIS SECTION, SHALL BE ENTERED INTO OR CARRIED OUT UNTIL THE EXPIRATION OF THIRTY DAYS FOLLOWING THE DATE ON WHICH SUCH AGREEMENT OR PROPOSAL IS TRANSMITTED BY THE PRESIDENT TO THE SENATE COMMITTEE ON AGRICULTURE AND FORESTRY AND TO THE HOUSE COMMITTEE ON AGRICULTURE, IF TRANSMITTED WHILE CONGRESS IS IN SESSION, OR SIXTY DAYS FOLLOWING THE DATE OF TRANSMITTAL IF TRANSMITTED WHILE CONGRESS IS NOT IN SESSION, AND THEN ONLY IF, BETWEEN THE DATE OF TRANSMITTAL AND THE EXPIRATION OF SUCH PERIOD THERE HAS NOT BEEN PASSED BY EITHER OF THE TWO COMMITTEES A RESOLUTION STATING IN SUBSTANCE THAT THAT COMMITTEE DOES NOT FAVOR SUCH AGREEMENT OR PROPOSAL.'"

THE ORIGINAL SENATE VERSION OF THE BILL (S. 2687) WHICH BECAME PUBLIC LAW 88-638 AS PASSED BY THE SENATE AUGUST 19, 1964, WOULD HAVE SUBJECTED ALL GRANTS OF PUBLIC LAW 480 FOREIGN CURRENCIES TO SPECIFIC APPROPRIATIONS REQUIREMENTS. THE ORIGINAL HOUSE BILL (H.R. 12298) PROVIDED INSTEAD FOR THE ESTABLISHMENT OF AN ADVISORY COMMITTEE, TO BE COMPOSED OF REPRESENTATIVES OF THE EXECUTIVE AND LEGISLATIVE BRANCHES, WHICH WOULD CONSULT WITH THE PRESIDENT ON THE USE OF FOREIGN CURRENCIES, WITH SPECIAL REFERENCE TO GRANTS AND TO EXCESS CURRENCIES (SECTION 1 (4) ); BUT THE SENATE BILL (S. 2687) AS PASSED BY THE HOUSE DID NOT INCLUDE THIS PROVISION.

AN AMENDMENT WAS ADOPTED IN THE HOUSE ON SEPTEMBER 2, 1964, WHICH WOULD HAVE SUBSTANTIALLY CONFORMED THE HOUSE BILL TO THAT OF THE SENATE AS REGARDS FOREIGN CURRENCY GRANTS (CONG. REC. SEPTEMBER 2, 1964, PP. 20771- 779), BUT WAS OVERRIDDEN BY THE HOUSE ON THE FOLLOWING DAY. (CONG. REC. SEPTEMBER 3, 1964, PP. 20929-32). THE OPPOSITION TO THE AMENDMENT WAS LED BY MAJORITY LEADER ALBERT AND REPRESENTATIVE POAGE, EACH OF WHOM URGED UPON THE HOUSE THE IMPORTANCE OF PRESIDENTIAL DISCRETION IN THE USE OF FOREIGN CURRENCIES. THUS, REPRESENTATIVE ALBERT STATED:

"THE PROPOSAL TO SUBJECT GRANTS OF LOCAL CURRENCY TO THE APPROPRIATIONS PROCESS WOULD NOT ONLY IMPAIR THE FLEXIBILITY REQUIRED BY THE PRESIDENT IN CARRYING OUT HIS FOREIGN POLICY; IT WOULD FURTHER INHIBIT THE EFFECTIVE USE OF LOCAL CURRENCIES TO HASTEN ECONOMIC DEVELOPMENT IN COUNTRIES LIKE INDIA, WHERE THE UNITED STATES HAS ACCUMULATED VAST SUMS OF LOCAL INDIAN CURRENCY. AT PRESENT, U.S.-OWNED RUPEES AVAILABLE FOR U.S. USES IN INDIA TOTAL NEARLY FOUR HUNDRED MILLION. IF GRANTS OF THESE FUNDS SHOULD BECOME SUBJECT TO CONGRESSIONAL CONTROL THROUGH THE APPROPRIATIONS PROCESS, AND GRANT USE RESTRICTED, WE CAN REASONABLY EXPECT THESE FUNDS TO GROW TO EVER INCREASING LEVELS OF UNPRODUCTIVE AND IDLE ACCUMULATIONS.' (CONG. REC. 88TH CONGRESS, DAILY COPY P. 20771.)

REPRESENTATIVE POAGE STATED:

"AS A PRACTICAL MATTER, YOU CANNOT APPROPRIATE THESE CURRENCIES. IT IS ANOTHER IMPOSSIBILITY. YOU SIMPLY CANNOT WRITE THESE AGREEMENTS ON THE FLOOR OF THIS HOUSE. THESE ARE AGREEMENTS. THEY ARE NEGOTIATED JUST LIKE WE NEGOTIATE TREATIES. IN FACT, THEY BECOME TREATIES. WE CANNOT SIT HERE AND NEGOTIATE THESE THINGS. EVEN BEHIND THE CLOSED DOORS OF THE APPROPRIATIONS COMMITTEE IT SEEMS UNLIKELY THAT SUCH TREATIES COULD BE INTELLIGENTLY NEGOTIATED. IF THAT COMMITTEE SHOULD NEGOTIATE THESE TREATIES YOU WOULD NOT KNOW ABOUT IT, BECAUSE YOU DO NOT KNOW WHAT GOES ON BEHIND THOSE CLOSED DOORS OF THE APPROPRIATIONS COMMITTEE. YOU WOULD NOT LEARN ONE THING.

"YOU WILL LEARN MORE BY HAVING THE USE OF THESE CURRENCIES BROUGHT UP HERE BEFORE AN ADVISORY COMMITTEE, WHERE WE WILL HAVE AN OPEN-DOOR POLICY SUCH AS WE HAVE IN THE COMMITTEE ON RICULTURE.' (CONG. REC. 88TH CONGRESS, DAILY COPY, P. 20777.)

THE ALBERT-POAGE POSITION WAS ULTIMATELY ADOPTED BY THE HOUSE.

THE CONFERENCE COMMITTEE, IN DUE COURSE, ELIMINATED THE SENATE'S APPROPRIATIONS REQUIREMENT, BUT INCLUDED THE ADVISORY COMMITTEE DEVICE. THE CONFERENCE COMMITTEE ADDED A PROVISION FOR NOTIFICATION BY THE PRESIDENT TO THE SENATE COMMITTEE ON AGRICULTURE AND FORESTRY AND THE HOUSE COMMITTEE ON AGRICULTURE PRIOR TO A GRANT OF FOREIGN CURRENCY AND A REQUIREMENT THAT SHOULD EITHER COMMITTEE PASS A RESOLUTION STATING THAT IT DID NOT FAVOR THE TRANSMITTED PROPOSAL, THE GRANT COULD NOT BE MADE. YOU ADVISE THAT ALTHOUGH THE VETO PROVISION IS CONSIDERED UNCONSTITUTIONAL BY THE EXECUTIVE BRANCH, THE PRESIDENT HAS FORMALLY STATED THAT THE DESIRE OF THE CONGRESS TO BE INFORMED AND CONSULTED ON THE OPERATION OF ALL ASPECTS OF THE PUBLIC LAW 480 PROGRAM WILL BE RESPECTED AND HAS DIRECTED EXECUTIVE OFFICIALS TO SEE THAT THIS IS DONE.

IN LIGHT OF THE LEGISLATIVE HISTORY OF PUBLIC LAW 88-638, AND IF, PURSUANT TO THE PROCEDURES ESTABLISHED BY SECTION 104 OF PUBLIC LAW 480, AS ADDED BY PUBLIC LAW 88-638, THE PUBLIC LAW 480 ADVISORY COMMITTEE AND THE SENATE COMMITTEE ON AGRICULTURE AND FORESTRY AND THE HOUSE COMMITTEE ON AGRICULTURE ARE FULLY INFORMED AS TO THE PRESENT PROPOSAL AND SPECIFICALLY ADVISED THAT THE GRANT WILL BE MADE PURSUANT TO SECTION 104 (E) OF PUBLIC LAW 480 TO ENDOW A BI-NATIONAL FOUNDATION IN THE FIELDS OF EDUCATION AND SCIENCE IN ORDER TO PROMOTE BALANCED ECONOMIC DEVELOPMENT AND NEITHER OF THE LATTER TWO COMMITTEES OPPOSE SUCH GRANT IN THE MANNER PROVIDED IN SECTION 104 (E), AS AMENDED, WE WILL NOT BE REQUIRED TO OBJECT TO A GRANT OF EXCESS FOREIGN CURRENCIES TO ENDOW A BI-NATIONAL FOUNDATION AS PROPOSED IN YOUR LETTER, IF OTHERWISE LEGALLY PROPER.

COPIES OF THIS LETTER ARE BEING TRANSMITTED TO THE CHAIRMAN OF THE HOUSE AND SENATE COMMITTEES ON APPROPRIATIONS, THE CHAIRMAN OF THE SENATE COMMITTEE ON AGRICULTURE AND FORESTRY AND THE CHAIRMAN OF THE HOUSE COMMITTEE ON AGRICULTURE.