Total

4, 818, 668, 009. 41 1,950, 090, 166. 93 261, 942, 961. 17 324, 455, 914. 40 $3, 586, 202. 35 2, 285, 765, 169. 26 78, 168, 308. 8716, 533, 406. 73 2, 191, 063, 453. 66

Mr. CANFIELD. Mr. Maxwell, I concur in what the chairman of this subcommittee has to say about the use of electronics developments in the Treasury and other agencies of our Federal Government. I am glad to note the progress in that direction indicated by you and your aids here today.

Mr. MAXWELL. We are glad to hear that, Mr. Canfield. We hope to continue and, as I indicated earlier, keep our costs down as much as possible.

Mr. CANFIELD. We miss Mr. Cake's presence here this morning. We are extremely sorry to learn the reason therefor.

Mr. MAXWELL. I will be glad to pass that information on to him.

FOREIGN CURRENCY TRANSACTIONS

Mr. CANFIELD. Your office has to do with foreign currency transactions. Will you discuss that item briefly for the record at this point. Mr. MAXWELL. Yes, Mr. Chairman. Under various laws and Executive orders the Secretary of the Treasury is responsible for the accounting and disposition of foreign currencies.

The latest Executive order is 10560, of September 9, 1954. There have also been numerous laws passed under which are provided procedures by which foreign currencies are received by the United States Government. These include the lend-lease agreements, surplus property laws, and so on.

The latest is Public Law 480, of July 10, 1954, which authorizes the sale of surplus agricultural commodities in exchange for foreign currencies. Under this law there have been numerous agreements with various countries where the surplus commodities could be disposed of, which agreements are considerably different for each country. They have to be patterned to meet local conditions.

This law provided for the disposition of commodities up to $700 million. Under Public Law 387 of the 84th Congress, approved August 12, 1955, the authority was increased to $1.5 billion.

Under these provisions the Treasury Department develops the accounting instructions to the disbursing officers located at the United States Embassies abroad. The Treasury also must send instructions as to when to make payments, we receive their reports monthly, which are reviewed to see that they have followed the instructions. These reports are examined and entered into accounts and later compiled into financial reports to be used by the Fiscal Assistant Secretary's Office in the disposition of currency. Also we make estimates in connection with the budget document.

In some instances the procedures are quite complicated because of various provisions. For example, one of the laws will say that an appropriation is made for a specific amount, in United States dollars, of which so much must be used from foreign currencies. In other cases, there is no limit on the amount of foreign currencies which can be used without reimbursement. Of course we have to classify transactions under all the various limitations and special categories provided in these laws.

Mr. CANFIELD. These are disbursing officers in the various Embassies abroad. Are they employees of the Treasury Department?

Mr. MAXWELL. No, sir; they are actually on the payroll of the Department of State but they have been delegated the responsibility

for disbursing by Mr. Cannon. As a matter of fact, they disburse in Mr. Cannon's name.

In view of the fact that there is not enough work for a full-time job of one person in many of these foreign offices, we feel it would be uneconomical for the Treasury to have a full-time employee at these locations, so the disbursing has been delegated to State Department employees. This practice has been followed from the beginning of the Division of Disbursement.

Mr. CANFIELD. There are, however, various agents of the Treasury Department employed by the Department abroad?

Mr. MAXWELL. There are some; that is correct. Customs, of course, has employees abroad. The Office of International Finance has a representative in certain countries, though not many. Also, the Division of Disbursement has several employees in one office abroad where the employees are on our payroll: namely, at Manila, P. I.

LEND-LEASE ACCOUNT WITH RUSSIA

Mr. CANFIELD. You made reference to the Lend-Lease Act?
Mr. MAXWELL. Yes, sir.

Mr. CANFIELD. Usually we ask about the specific status of our lendlease relationship with the Soviet Union. Can you tell us about that?

Mr. MAXWELL. Mr. Canfield, the position is substantially the same as before. On July 1, 1955, we billed the Russian Government for $27,635,000, which included $16,788,000 for past due items and $10,846,000 for the current year payments. However, they paid $7,692,766, which is their computation of what they think they owe the United States.

So far, the State Department has not been able to come to an agreement with Russia with respect to the amount due. For most countries, these agreements have been concluded and we know definitely what we are supposed to bill the foreign government. In this case, there are still items disputed which have not been resolved into a fixed amount due the United States.

RESPONSIBILITIES UNDER SATELLITE CLAIMS ACT

Mr. CANFIELD. There is reference in your justifications to Public Law 285, 84th Congress, approved August 9, 1955, providing for the settlement of claims of American nationals against Bulgaria, Hungary, Rumania, Italy, and Russia. Briefly, what is your responsibility under that act?

Mr. MAXWELL. Mr. Canfield, Mr. Nussear, who is in charge of those operations, is here. If you have no objection I should like to have him answer this question.

Mr. NUSSEAR. Mr. Chairman, our responsibility under the so-called Satellite Claims Act is to pay the claims that are adjudicated by the Foreign Claims Settlement Commission. The first claims to be paid will be those claims with repect to the Soviet Union, which are payable from the Litvinov moneys. We expect they will probably begin coming into the Treasury Department around the end of the fiscal year 1956.

Mr. CANFIELD. You used the expression "Litvinov moneys."

Mr. NUSSEAR. Yes, sir. The International Claims Settlement Act >rovides that with respect to those claims against Russia, the money vhich was recovered under certain Litvinov agreements between the Jnited States and Mr. Maxim Litvinov, representative of the Governnent of the Union of Soviet Socialist Republics back about 1933vherein claims Russia had in the United States would be assigned to he United States, and there was approximately $9 million deposited n the Treasury on that account. The International Claims Act proides that we will transfer this amount from a deposit account which ve have been holding into the Russia Claims Account, which will be vailable for the payment of claims against Russia under the act. In addition, there was received $5 million from Italy. That amount f $5 million will be available to pay Italian claims.

The Bulgarian, Hungarian, and Rumanian claims will be paid from noney which will be transferred to the Treasury by the Alien Proprty Custodian, representing funds of those countries in his custody.

REPORTS TO CONGRESS

Mr. CANFIELD. Mr. Maxwell, how many reports do you have to nake to the Congress under law each year?

appro

Mr. MAXWELL. I could insert that in the record. We have to make he annual report of the Secretary, the combined statement of riations, receipts and expenditures, and several others. I have a list f those in my office and I would be glad to insert that in the record, f you wish, Mr. Canfield.

Mr. CANFIELD. Will you do that.
Mr. MAXWELL. Yes, sir.

(The information is as follows:)

IST OF REPORTS PREPARED IN THE FISCAL SERVICE MADE TO CONGRESS REQUIRED

BY LAW

NATURE OF REPORT AND CITATION TO LAW

1. Annual report of the Secretary of the Treasury on the state of the finances U. S. C. 262, 263, 265, 31 U. S. C. 757 (i)).

2. Combined statement of receipts, expenditures, and balances of the United tates Government (5 U. S. C. 264).

3. Report of appropriation and fund balances and outstanding obligations sec. 1311 of the Supplemental Appropriation Act, 1955, Public Law 663, approved ugust 26, 1954).

4. Pershing Hall memorial fund (49 Stat. L. 426).

5. Report of the annual audit of the stabilization fund (31 U. S. C. 822a).

DAILY FINANCIAL STATEMENT

Mr. CANFIELD. In passing, will you bring us up to date about the aily financial statement?

Mr. MAXWELL. Yes, sir. There was a major change in the monthly 'reasury statement last year. As you recall, we revised the daily 'reasury statement and made the daily report only a statement of ash withdrawals and cash receipts. The monthly statement is now le statement we use for determining budget receipts and expendiires and the budget surplus or deficit, and that statement is published nce a month on the basis of reports received from the various agen