Committee, or DAC. You will recall this had been developed at the end of 1960, and our association with the treaty was ratified in January 1961.

This also has been going ahead as an activity which has brought together and is beginning to harmonize very effectively a lot of the financial and economic questions of the North Atlantic Community.

SUMMARY OF 1963 BUDGET

Turning now, Mr. Chairman, to the budget itself, it is as you have described it and as shown in the record. I might make a few

comments.

We are asking for no new jobs, but we are asking for some increased support. On the domestic side, we remain the same as in fiscal 1962, with 221 jobs, and an increase of $19,950. Of this amount, $10,950 is within-grade salary increases, and $9,000 of it is for additional travel. On the Foreign Service side of our budget, we are asking, again, for no increase in jobs beyond the present 3,690, 1,480 of which are Americans and 2,210 of which are local employees, and the total budget is $27,182,386. This will reflect some reduction in our budget, a reduction of $15,000 for the item we have withdrawn, about which you read the letter.

Mr. ROONEY. Yes; but the withdrawal letter covers the amount, $46,081.

Mr. KOHLER. For the entire budget, sir. I am speaking to the section of it in our budget, Mr. Chairman.

Mr. ROONEY. You have $30,800 elsewhere in the budget in connection with this?

Mr. CROCKETT. In the A area.

Mr. ROONEY. The A being the administrative area?

Mr. CROCKETT. That is right.

Mr. ROONEY. In the administrative area you are able to deduct the amount $30,800? How does that come about?

Mr. CROCKETT. Because in the A area, Mr. Chairman, we centrally fund such things as home leave travel, transfer travel, medical benefits, communications costs, all the miscellaneous expense to support the whole service. I can give you a breakdown, Mr. Chairman, of exactly where it comes from.

ADDITIONAL POSITIONS IN BUCHAREST

Mr. ROONEY. Under the plan as proposed in this budget, you were going to add how many additional positions in Bucharest?

Mr. KOHLER. Four American officers and five clerks, Mr. Chairman,

but none of these were being asked for as extra positions.

Mr. ROONEY. That is the point. You have enough money that you are going to absorb those nine people?

Mr. CROCKETT. Mr. Chairman

Mr. ROONEY. Do you?

Mr. CROCKETT. No, sir.

Mr. ROONEY. You were going to?

Mr. CROCKETT. No, sir. We were going to absorb the salary only, Mr. Chairman, but for all the new positions added in this budget

Mr. ROONEY. How much is the salary of the nine people?

Mr. CROCKETT. I do not know offhand, but we can supply that, if you wish. I do not have it.

Mr. ROONEY. Where do we find it in here?

Mr. CROCKETT. As you know, Mr. Chairman, for all the new jobs that have been added, we have not identified in this budget the exact persons or positions to be transferred to fill these new jobs. I do not know the grade levels of the new jobs. We could give you an approximate figure by figuring the grade levels of the new jobs.

Mr. ROONEY. Please insert that information at this point in the record.

Mr. CROCKETT. All right.

(The information requested follows:)

The annual salary rate of the nine positions for Bucharest was $63,875.
Mr. ROONEY. Go ahead, Mr. Kohler.

AMOUNT OF INCREASE REQUESTED FOR 1963

Mr. KOHLER. Thus, of our increase which, without this item in our budget, is $811,692, instead of $826,973-of this increase, nearly 75 percent are more or less fixed factors of, first of all, the adjusted lapse rate, then local wage and price increases.

Mr. ROONEY. The lapse rate is how much?

Mr. KOHLER. $208,000.

AUTHORIZED POSITIONS- CURRENT YEAR

Mr. ROONEY. How many authorized positions do you have in the current year?

Mr. DONDERO. 1,480 Americans.

Mr. ROONEY. Now you are asking for more man-years than the total number of authorized positions, is that right?

Mr. DONDERO. That is right, 1,483.

Mr. ROONEY. 1,483.7.

Mr. DONDERO. That is correct.

OVERSEA WAGE AND PRICE INCREASES

Mr. ROONEY. You might tell us about this $314,000 additional requested for oversea wage and price increases. There is no credit here as a result of inflation working favorably as a result of the exchange in this area, is there?

ADJUSTMENTS TO REFLECT CHANGES IN EXCHANGE RATES

Mr. CROCKETT. No, Mr. Chairman. They have already been taken to reduce the total amount of the increase.

Mr. ROONEY. Where? Where will we find that?

Mr. CROCKETT. If there were any. I do not think there are any. Mr. ROONEY. Since you have been in Washington, have you ever heard it brought to the attention of the committee that inflation has caused a reduction in these items?

Mr. CROCKETT. Yes, sir. I remember one specific case, Mr. Chairman, where we submitted a letter.

Mr. ROONEY. Please refresh me.

Mr. CROCKETT. The French franc devaluation.

Mr. KOHLER. There was a 5-percent adjustment in the German mark last year, for example.

Mr. ROONEY. Upward or downward?

Mr. KOHLER. It cost us more.

Mr. ROONEY. I am talking of the reverse.

Mr. CROCKETT. Mr. Chairman, we are very careful to call the committee's attention to these things when they occur.

Mr. ROONEY. You were going to tell us about this $314,259, Mr. Kohler.

Mr. KOHLER. As explained in the budget itself and as we all know from our own experience, there has been a steady increase in prices and wage levels in the European area for the last dozen years as Europe has recovered from the destruction of the war and as its economy has developed and expanded. These are the best calculations which can be made of what the cost may be, and are based on our experience over the years.

Last year, for example, the increases we faced were very real, with a 12-percent increase in France, 24 percent in Algiers, for reasons that everyone knowing the situation can well imagine, 131⁄2 percent in Rome, 10 percent in Germany, over 11 percent in England, 10 percent in Dublin, and in Belgrade 30 percent as a result of a complete monetary reform and stabilization program which was undertaken there. These are inevitable. If we want to keep our local employees, they must be paid on the local scale, which we do not, of course, control.

NUMBER OF BUILDINGS OCCUPIED IN EUR AREA

Mr. ROONEY. Will you please insert at this point in the record a statement showing the number of buildings occupied by your personnel in each of the cities in your area?

Mr. CROCKETT. By agency?

Mr. ROONEY. By agency. All of them. (The information requested follows:)