The guaranty would not apply to more than 75 percent of the investment plus accrued interest. Assignment of the guaranty would be permitted only with prior AID approval, and such approval would only be granted for sales of all or a portion of the loan in which the purchaser took a constant percentage of all remaining maturities, including any at risk. Except in unusual circumstances, guaranties will be made only in connection with projects which involve procurement of U.S. goods and services in an amount substantially equal to the amount of the guaranty.

The act also authorizes coverage on housing investments on a basis similar to the special housing authority for Latin America under section 224.41

During the period covered by this report, one additional extended risk guaranty was authorized for a fish freezing plant in the Somali Republic. The guaranty was in the amount of $111,167 and covered 50 percent of the equity investment of the American firm involved. The total of the three guaranties authorized on or before December 31, 1964, is $9,054,910.

Latin American housing guaranties

The $250 million housing guaranty program for private U.S. investment in self-liquidating pilot or demonstration housing projects to assist middle-income families in Latin America to obtain housing on satisfactory terms is authorized by section 224 of the Foreign Assistance Act of 1961, as amended. Twelve projects are under construction or partially completed with a guaranty amount of over $68 million, involving 12,750 dwellings. Construction has been completed on 2 projects with a guaranty amount of over $11 million, involving 3,400 dwellings. An additional $42 million in guaranties has been authorized and $50 million in guaranties are in final stages of approval. The remainder of the authority will be used for projects which are under preliminary review by the International Division of the Federal Housing Administration. Sixteen countries have at least one project each.

A major function of the program is to provide useful demonstrations in the recipient countries in the field of housing development. Individual projects under the current program provide effective demonstration of one or more of the following elements: improvements in design and methods of construction, land planning and utilization, volume production, efficient use of manpower and materials, production scheduling, volume marketing, low downpayments, long-term financing, volume mortgage servicing, and techniques for maintaining the dollar value of local currency mortgage loan payments.

TITLE I, PUBLIC LAW 480, FOREIGN CURRENCY LOANS

Section 104(e) loans to private enterprise 12

Title I of Public Law 480 provides for the sale of U.S. agricultural commodities to friendly countries with payment in the currency of

the recipient country. Section 104 (e), as amended in October 1964," provides that Title I sales proceeds, to the maximum usable extent, may be loaned to (1) U.S. firms or their branches, subsidiaries, or affiliates for business development and trade expansion in the foreign country; or (2) to either U.S. firms or firms of that country for expanding markets for, and consumption of, U.S. agricultural products abroad. Loans for financing the production of commodities which would compete with U.S. sales here or abroad are prohibited, and interest rates are similar to those charged for comparable loans in the foreign country. Foreign currencies set aside for section 104 (e) loans to private business firms as the result of agreements signed in 1964 totaled the equivalent of over $74 million.

As indicated in table 23, the Agency for International Development (AID) in calendar 1964 approved 46 loans in 11 countries in the foreign currency equivalent of approximately $57 million. Among other purposes, these loans will assist in financing construction of a fertilizer plant, a tire plant, and the production of sewing machines, steel tubings, chemicals, and pharmaceuticals.

TABLE 23.-Sec. 104(e) loans to private business firms, approved in 1964 [Amounts in thousands of dollars equivalent]

Economic development financed by Title I foreign currency loans is the largest and one of the most important uses under section 104. Title I sales agreements signed during calendar year 1964 provided for the equivalent of $553 million to be used for this purpose. The total value of local currency set aside for economic development since the beginning of the program in fiscal 1955 through December 31, 1964, was $4.7 billion. These agreements specify the amounts of currencies to be made available for economic development loans and these loans are coordinated to the maximum extent possible with other forms of assistance. However, the currency is not generated

until commodity shipments are made and local currency is deposited. The loan agreement ordinarily negotiated simultaneously with the sales agreement, provides for the financing of various categories of projects.

Loan agreements and amendments to agreements in the equivalent of $518 million were signed with 12 countries during calendar 1964, in accordance with terms and conditions previously approved by the Council.

B. The Peace Corps

Document XII-14

Request for Authority To Extend and Expand the Peace Corps in Fiscal Year 1965: LETTER FROM THE PRESIDENT (JOHNSON) TO THE SPEAKER OF THE HOUSE OF REPRESENTATIVES (MCCORMACK), JANUARY 16, 19641

DEAR MR. SPEAKER: I take pleasure in transmitting legislation which would authorize the appropriation of $115 million for the Peace Corps in fiscal year 1965.2

The Members of the Congress know how close this program was to the heart of John Fitzgerald Kennedy. The day-to-day achievements of nearly 7,000 American men and women now at or about to depart for work overseas in over 2,400 cities, towns and hamlets in 46 countries are a living memorial to the 35th President of the United States. For fiscal year 1964 the Congress appropriated approximately $96 million for the Peace Corps, under an authorization of $102 million.3 The amount appropriated is sufficient to enable the Peace Corps to reach a level of 10,500 Volunteers by September 1964. The requested Peace Corps authorization for fiscal year 1965 is an increase of $13 million over the amount authorized by the Congress for fiscal year 1964. This increase of less than 15 percent will enable the Peace Corps to expand by a third to reach a level of 14,000 Volunteers by September 1965.

As the Peace Corps concentrates on improving the scope of programs in existence, and as more and more American men and women volunteer for service in the Peace Corps, it is becoming possible to take advantage of economies of size in the Peace Corps budget. The steps which have been taken during the last year to reduce the cost of

1 Department of State Bulletin, Feb. 10, 1964, p. 198. An identical letter was sent on the same day to Carl Hayden, President pro tempore of the Senate.

2

* H.R. 9666, 88th Cong., introduced Jan. 20, 1964. See infra.

3 See American Foreign Policy: Current Documents, 1963, pp. 1263–1265.

the Peace Corps will be spelled out in detail in the agency's presentation materials.

In view of these economies, the requested increase in authorization and appropriation is fully consistent with my fiscal year 1965 budget program.

Document XII-15

Authorization of the Peace Corps Program for Fiscal Year 1965: PUBLIC LAW 87-293 (THE PEACE CORPS ACT), APPROVED SEPTEMBER 22, 1961, AS AMENDED THROUGH PUBLIC LAW 88-285, APPROVED MARCH 17, 1964 (EXCERPTS)"

AN ACT To provide for a Peace Corps to help the peoples of interested countries and areas in meeting their needs for skilled manpower.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

TITLE I-THE PEACE CORPS

AUTHORIZATION

SEC. 3. (a) The President is authorized to carry out programs in furtherance of the purposes of this Act, on such terms and conditions as he may determine.

(b) There is hereby authorized to be appropriated to the President for the fiscal year 1965 not to exceed $115,000,000 to carry out the purposes of this Act.

7

Document XII-16

Appropriation for the Peace Corps in Fiscal Year 1965: TITLE II OF PUBLIC LAW 88-634, APPROVED OCTOBER 7, 1964 (EXCERPTS)

AN ACT Making appropriations for Foreign Assistance and related agencies for the fiscal year ending June 30, 1965, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the following

'See To Amend Further Peace Corps Act: Hearings Before the Committee on Foreign Affairs, U.S. House of Representatives, 88th Congress, 1st Session, on H.R. 9666, Jan. 31-Feb. 6, 1964; and Peace Corps Act Amendments: Hearings Before the Committee on Foreign Relations, U.S. Senate, 88th Congress, 2d Session, on S. 2455, Feb. 24, 1964.

"Legislation on Foreign Relations With Explanatory Notes, February 1965 (Joint Committee print of the Senate Committee on Foreign Relations and the House Committee on Foreign Affairs, 89th Cong., 1st sess.), pp. 153–172. For Public Law 88-285, see 78 Stat. 166.

22 U.S.C. § 2502.

7 Public Law 88-285, approved Mar. 17, 1964 (78 Stat. 166), substituted “1965′′* and "$115,000,000" for "1964" and "$102,000,000," respectively, in Public Law 88200, approved Dec. 13, 1963 (text in American Foreign Policy: Current Documents. 1963, pp. 1263–1265).

8 78 Stat. 1015.

sums are appropriated, out of any money in the Treasury not otherwise appropriated, for the fiscal year ending June 30, 1965, namely:

TITLE II-FOREIGN ASSISTANCE (OTHER)

FUNDS APPROPRIATED TO THE PRESIDENT

PEACE CORPS

For expenses necessary to enable the President to carry out the provisions of the Peace Corps Act (75 Stat. 612), as amended, including purchase of not to exceed five passenger motor vehicles for use outside the United States, $87,100,000, together with not to exceed $17,000,000 of funds previously appropriated which are hereby continued available for the fiscal year 1965, of which not to exceed $20,850,000 shall be available for administration and program support costs.

Document XII-17

"In the Next 4 Years We Must Double the Size . . . of the Peace Corps": STATEMENT BY THE PRESIDENT (JOHNSON) ON THE FOURTH ANNIVERSARY OF THE PEACE CORPS PROPOSAL, NOVEMBER 2, 1964 1o

Four years ago today John Kennedy proposed the Peace Corps.11 Then it was a promise. Now it is a reality.

To the 10,000 volunteers serving in 46 countries to the 110,000 Americans who have applied to become volunteers-go the thanks of this Nation. Through their hard work and devoted service the pioneering tradition of America has been renewed, and our name is

10

Supra.

Public Papers of the Presidents of the United States: Lyndon B. Johnson, 1963-64, vol. II, pp. 1570-1571.

11

Reference to the speech of Nov. 2, 1960, of Senator John F. Kennedy, at the Cow Palace, San Francisco, which reads in part as follows:

"I therefore propose that our inadequate efforts in this area [foreign service] be supplemented by a peace corps of talented young men and women, willing and able to serve their country in this fashion for 3 years as an alternative or as a supplement to peacetime selective service, well qualified through rigorous standards, well trained in the languages, skills, and customs they will need to know, and directed and paid by the ICA [International Cooperation Agency] point 4 agencies.

"We cannot discontinue training our young men as soldiers of war, but we also want them to be ambassadors of peace.

"This would be a volunteer corps, and volunteers would be sought among not only talented young men and women, but all Americans, of whatever age, who wished to serve the great Republic and serve the cause of freedom, men who have taught or engineers or doctors or nurses, who have reached the age of retirement, or who in the midst of their work wished to serve their country and freedom, should be given an opportunity and an agency in which their talents could serve our country around the globe." (Freedom of Communications: Final Report of the Committee on Commerce, U.S. Senate, Part I, The Speeches, Remarks, Press Conferences, and Statements of Senator John F. Kennedy, August 1, Through November 7, 1960 (S. Rept. 994, pt. 1, 87th Cong., 1st sess., Sept. 13, 1961), p. 865-full text pp. 862-866.)