United States loans repayable in local currencies : (a supplement to Bank report EC-65, September 16,1958)

RESTRICTED LUSG L Report N o. EC-80 TO BE RETURNED TO ARRliVES DIVISION This report was prepared for use within the Bank. In making it available to others, the Bank assumes no responsibility to them for the accuracy or completeness of the information contained herein. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT UNITED STATES LOANS REPAYABLE IN LOCAL CURRENCIES (A supplement to Bank Report EC-65, September 16, 1958) August 31, 1959 F\t E C0PY Economic Staff Prepared by: Michael Jordan  United States Loans Renavable in Local Currencies (A supplement to Bank Report EC-65, United States Loans Repayable in Local Currencies, September 16, 1958). Table of Contents 1. Introduction 2. The Tograms and Organization (1) Mutual Security Program (2) Public Law 480 (3) Private Enterprise 3. Terms of Lending 4. Use of Repayments 5. Statistics (1) Authorizations and Appropriations for Fiscal 1960 (2) U.S. Loans Repayable in Local Currencies and Currency Holdings as at June 30, 1959. List of Tables I. U.S. Loans Repayable in Local Currencies II. Disbursements from U.S. Loans Repayable in Local Currencies III. Repayments and Interest Collections on U.S. Loans Repayable in Local Currencies IV. Status of U.S.-owned Local Currencies V. U.S.-owned Local Currencies and Foreign-owned Counterpart Funds: Balances Generated and Remaining Unspent. I United States Loans Renayable in Local Currencies 1. Introduction In the 12 months since the last report on this subject was made,i/ the U.S. loan program has been expanded considerably. Between December 1957 and June 1959 the volume of lending repayable in local currencies has doubled reaching a total of $2.9 billion equivalent; the Development Loan Fund (DLF) has become the major channel of such loans within the Mutual Security Program; and the surplus agricultural disposals program under Pullic Law 480 has continued to provide more than 50o of the volume of loans signed and of funds disbursed under all the various programs of loans repayable in local currency. The purpose of this memorandum is to provide a summary of program changes made since mid-1958, and to bring up to date the statistics given in Report No. W-65. The latest data are to be found in Tables I-V. 2. The Programs and Organization (1) The Matual Security Program. When first organized in 1957, the DLF was a part of the International Cooperation Administration (ICA). In 1958, however, it became a separate entity. The DLF has approved loans for $831.4 million by June 30, 1959 out of the $850 millions of appropriations already received. Loan agreements for $619 million have been signed and, of this total, $490 million are repayable in local currency. It is to be expected that within the limits of future appropri- ations the DLF will be the principal source of local currency repayable loans under the MAtual Security Program (MSP). As Report No. EC-65 indicated, the DLF charges interest according to the type of project financed; currently the rate on"economic overhead" projects remains at 3--%$, but that on profit-making activities has risen to 5 3/4%. The duration of DLF loans has so far been between 5 and 35 years, with an average of 15 years. Following an Executive Order of the President on July 24, 1959 the 2 DLF is enabled to participate in the administration of See. 104(g) of FL 48-' This provision will permit the DLF to obtain a source of local currency funds for use in its operations before repayments on its own loans become available 1/ United States Loans Repayable in Local Currencies (IBRD Report No. EC-65, prepared by Bruce M. Cheek, Economic Staff, September 16, 1958). 2/ Section 104 of FL 480 lists a variety of purposes for which local cur- rencies received as payment for sales of agricultural commodities under Title I of the Act may be used, including under clause (g), "loans for economic development". -2- for re-lending. At the time of a sales agreement the DLF will come to an understanding with the ICA on its probable requirements of the par- ticular currency which can later be drawn on. Reflecting the increasing importance of the DLF, the loan programs under Section 4021/and other provisions of the Mutual Security Act adminis- tered by the ICA have been less active since Fiscal 1958. The principal problem connected with Section 4C2 has been the difficulty of finding recipient countries capable of absorbing an amount of agricultural sur- pluses equal to the minimum which the Act requiree be spent in providing these supplies. This occurs because many of the largest recipients of surplus agricultural products obtain them under the FL 480 program and are countries which receive little or no programmed assistance under the Mutual Security Program; for example, Brazil, India. In addition, some of the recipients of large amounts of Mutual Security assistance need other goods rather than agricultural products. In facing this difficulty, the legal minimum figure has been progressively reduced - from $350 million in Fiscal 1955 and $250 million in Fiscal 1957, to $175 million each in Fiscal 1958, 1959 and 1960 - and there has been more frequent resort to triangular sales to achieve the required total. Whereas total sales agreements concluded in Fiscal 1958 were equal to '205 million, in Fiscal 1959 they were only $179 million. Loans resulting from this program totalled $282 million equivalent by June 30, 1959, or an increase of only $4.2 million equivalent during the preceding 18 months. Loans under other provisions of the Act totalled $480 million at the recent date, rising about $100 million during the same period. The role of the ICA in making local currency loans under the MSP has thus been reduced, but it has not completely disappeared. (2) PL 480. Section 104(g) continues to provide the largest single source of loans repayable in local currency. As of June 30, 1959, 47% of the proceeds of sales agreements of $3,701 million, or $1,730 million equivalent, had been earmarked for Section 104(g) purposes. Over the last 18 months there has also been an acceleration of loan signings under Sec. 104(g). As of December 1957 about 61% of funds avail- able for lending had been committed in signed loan agreements; by June 1959 this figure had risen to 93%. This speeding up of loan activity has been achieved by reaching agreements with recipient countries on potentially controversial matters related to loan administration at the time of negoti- ating the sales agreement, by decentralizing the authority for approving 1/ Section 402 of the Mutual Security 'ct requires that a designated minimum of funds appropriated for Matual Security each year be used to purchase surplus agricultural commodities which are subsequently 4 sold to foreign governments for local currencies. These local cur- rencies are then to be used for the same Mutual Security purposes as the original dollar appropriation. - 3 - projects to missions in the field. In the future, the elimination of the maintenance of value provision should also assist in accelerating loan signings (see the section on Terms of Lending below). Disbursements, set out in Table II, have not become proportionately more rapid. Foreign cur- rencies are not usually made available for loan disbursement until deposits to U.S. account exceed the amount earmarked for all other purposes in the sales agreement. The interest rate on these loans to foreign governments is now set at 4% whether repayment is in foreign currency or in dollars. Previously there was a one per cent differential in interest rates, the higher rate applying to repayments in local currency. Under the new terms loan agree- ments provide that if foreign governments re-lend to private enterprises or publicly-owned enterprises of a profit-earning type, the interest rates charged by that government will be approximately the same as those for comparable loans in that country. Similarly, if the U.S. makes loans directly to development banks, the rates of interest charged will be such as to permit the banks to re-lend at about their usual interest rates. Funds amounting to 6233 million equivalent were available for loans to U.S. and foreign private business firms under Section 1CX(e) of PL4801/ and loan agreements for ?33 million equivalent were signed by June 30, 1959. This section has, however, met with mixed results. With respect to the uurrencies of Colombia, Israel, Italy, Mexico and Peru, by June 1959 funds were either already fully committed or were substantially less than the amounts requested in applications already in hand. In other countries balances were idle because of a lack of prospective borrowers, and there was opposition to the program as depriving the foreign country of resources otherwise available to its own nationals, or possibly creating inflationary lending outside the credit controls of local authorities. In India and Pakistan over $100 million equivalent of currencies earmarked for lending under Section ICA(e) were not yet subject to loan agreements. (3) Private Enterprise. Partly for the reasons outlined in the last paragraph the intended increase in emphasis on lending to private enterprise described in Report B3-65 has not been fully realized. Ninety per cent of total local currency repayable lending under PL 480 remains on a government-to-government basis, while the percentage is even higher for DLF loans. However, in Congressional testimony, the Administration has expressed the opinion that further progress can be made in lending to private enterprise. 1/ Section 104(e) of PL 480 provides that a portion of Title I local currencies be used 1to promote economic developmentn. The so-called 4 "Cooley" amendment to the Act, enacted by Congress in 1957 under this clause, provides that the Export-Import Bank is authorized to lend to U.S. and foreign private firms up to 25% of the proceeds of the sales agreement with a given country. -4- 3. Terms of Lending The pattern of interest rates on local currency loans includes both fixed and fluctuating charges. On the one hand lending under Section 104(g) of FL 480 carries a rate of 4% p.a. since the decision of the National Advisory Council early in 1959 (described in paragraph 2(2) above). The DLF charges interest according to project classifica- tion currently at either 3 f or 5 3/4% p.a. Other loans under the ISP carry the single rate of 3- o, corresponding to the DLF charges for "economic overhead" activities. On the other hand, interest on loans under Section 104(e) follow the prevailing local rates in the country concerned and until June 1959 these had ranged from 5o to 10%. The maturities on local currency loans under Section 10(g), and under Secti70 and other provisions of the Mutual Security Act are 30-40 years. However, the average maturity on DLF loans has so far been 15 years, and on those under Section 1C(e) from 5-7 years. The 3-year waiver of interest granted under programs during Fiscal 1955-1957 has been discontinued and interest now accrues from the first disbursement. Under most loans principal repayments begin 4 years after the first dis- bursement. Since a decision of the National Advisory Council early in 1959, when the provision for the maintenance of dollar equivalent value of payments due was eliminated on new loans under Section 104(g), only loans made in dollars by the DLF or under "other" sections of the MVSP are protected against exchange risks.1/ Local currency loans and holdings of local currency for non-loan uses are not covered by a maintenance-of- value clause. The situation with respect to Section 104(g) loans is still uncertain, however. The NAC decision was undertaken within its general authority for setting the terms of lending of the various loan programs, and follows its other measures for more flexible provisions. But a bill has been reported out of the House of Representatives Agriculture Com- mittee at the time of writing which, if enacted into law, would require the inclusion of a maintenance-of-value clause in these loan agreements. Where loan agreements contain the option of repayment in either local currency or dollars it is generally assumed that payments will in fact be made in the former currency, except in the case of default, when the U.S. could require dollar repayment. The clear definition of local currency loans has been complicated recently by some developments in DLF lending. Four DLF loans have been made fractionally repayable in dollars (e.g., a loan to Uruguay, repayable 75% in dollars, 25% in pesos). These components are separated in Tables I and II. In addition, in the case of 4 l/ The NAG decision also applies to loans under Section 402 of the Mutual Security Act. Loans made in local currency to private enterprise CSec 1CL(el have never contained a maintenance-of-value provision. - 5 - a loan to Libya, the currency of repayment has been changed when the agreement was concluded - from dollars to Libyan pounds. This change has only been announced since the composition of Table I, and is still described there as a dollar-repayable loan (see footnotes 5 and 6). 4. The Use of Repayments By June 30, 1959, repayments and interest collections amounting to 9.35 million equivalent had been made on all programs of loans re- payable in local currencies, of which interest collections on the older programs provided the dominant portion (see Table III). These are still relatively small, but will, of course increase as outstanding loans mature and as future loans are made. The general provisions for the use of repayments contained in loan agreements were summarized in Report EC-65 (Section IV, 4), but since Fiscal 1958 some further developments have occurred. Foreign currency repayments of DLF loans may be used by the DLF for re-lending and an amendment to Section 505(b) of the Mutual Security Act of 1959 has made repayments of NSP loans available for sale to U.S. Government agencies for payment of U.S. obligations abroad. The amendment also provides for crediting to the DLF any amounts of these currencies determined from time to time to be in excess of U.S. requirements. According to existing pro- visions of the law, loans and other uses specified under Section 104 of FL 480 may be financed from "foreign currencies accruing" from the agri- cultural disposals program, but there is doubt in some Departments of the Executive Branch whether loan repayments are available for relending or other uses under this category. Under Secretary of State Dillon has indicated nevertheless that the Administration intends to present a program for the broader use of FL 480 local currency repayments to the 1960 session of Congress. 5. Statistics (1) Authorizations and Appropriations for Fiscal 1960. While the oxtension of the programs under which loans repayable in local currency are made is still under consideration in the Congress, it is unlikely that the final appropriations to finance them will result in any substantial curtail- ing of the present rate of 'Lending. The Administration originally requested $3.93 billion for the Mtual Security Prpgram for Fiscal 1960 Zincluding $700 million for the DLF in Fiscal 1962/. The amounts authorized in the Mutual Security Act, enacted into law, totalled $3.56 billion, including '.700 million for the DLF. The appropriation of funds for this Act was reduced by the House of Representative, to 3.19 billion, including '$550 million for the DLF, while the Administration has requested a restoration of $870 million in the Senate hearings now being conducted. The minimum amount required for purchases under Section 402 has remained at $175 million throughout. -6 - Titles I and II of PL 480 expire on December 31, 1959 and the Act's present authorization is $6,250 million, of which $5,078 million had been used to reimburse the Commodity Credit Corporation by June 30, 1959. The Administration has requested a one-year extension of these titles and an increase in authorization of $1.5 billion for Title I. In view of the Congressional support for this program it is expected that this amount - now under Committee consideration in both chambers - will be authorized by Congress. (2) U.S. Loans Repavable in Local Currencies and Currency Holdings. Data on loans scheduled, signed and disbursed, and on repayments made, as of June 0, 1959, are given in Tables I, II and III. The status of U.S.- owned or controlled local currencies, as of December 31, 1958, whether or not they are involved in loan programs, is shown in Tables IV and V. Table I U.., Loans sepayale an Local Gurroftes (5 millions equivalent, at June 30, 1959) P..lonst 80Titl- - utual Securit Program - -Total LendinActivity WRO Ti le T - 7. -------- .to vt. ec.100(e), loansto Friv.Ent. Sec. 402 ent Loan Fund Other -Y Govt. Priv.Ent. Loans Count: of whach of which ofwhich ofwhich Scheduled Signed Scheduled Signed Scheduled: Signed Signed- Scheduled: Signed Scheduled: Signed 5igne Si Argentina 34.2 17.7 8.2 42.4 17.? Austria 26.3 26.3 - - - - 26.3 26,3 Bolivia 1.5 2.5 2.5 4.0 2.5 Brazil 149.2 149.2 - - - - 0.3 0.2 0.2 149.7 149.4 Burma 32.5 17.3 - - - - 35.0 67.5 52.3 Ceylon 8.0 2.2 5.3 3.2 3.2 2.5 19.0 7.9 Chile 27.? 27.7 - - - - 0.3 0.3 0.8 28.8 28.8 China 1.0 6.0 60.0 29.2 26.7 3.7 3.7 99.9 90.4 Colombia 25.3 25.3 3.4 3.2 28.7 28.5 Costa Rica 2.0 2.0 2.0 ,enmark 2.3 2.3 2.3 Ecuador 7.2 7.2 0.5 2.3 2.3 2.0 12.0 11.5 Ethiopia 0.5 0.5 Finland 10.0 5.0 2.0 1.1 12.0 6.1 France - - - - 13.9 5.4 13.9 5.4 Greece 37.4 37.4 2.9 0,5 35.0 12.0 12.0 87.3 84.9 Haiti 4.3 4.3 4.3 4.3 Honduras 5.0 5.0 3.0 8.0 8.0 Iceland 5.7 0.8 o.6 8.4 15.5 14.7 India 383.8 383.8 73.9 0.2 53.2 195.0 175.0 96.8 802.7 709.0 Indonesia 87,4 73,2- 10.0 9.0 9.0 15.0 121.4 97.2/ Israel 91.7 93.82/ 19.8 9,2 27.8 15-0 15.0 5.0 5.0 12.3 171.6 163.2 Italy 100 5 81.2 6.2 2.9 106.7 84.1 Japan 108.9 108.9 - - - - 108.9 108.9 Jordan 2.5 1.2 1.2 3.7 1.2 Korea - - - - 2.0 10.0 5.0 2.1 2.1 14.1 7.1 Mexico - - - - 7.1 7.0 7.1 7.0 Morocco 4.2 64.9 69.1 69.1 Pakistan 90.6 89.1 29.3 0.2 17.0 95.5 85.0 6.2 4.2 71.0 309.6 266.5 Paraguay 2.2 2.2 - - - - 2.5 2.5 1.0 5.7 5.7 Peru 16.1 16.1 1.9 1.7 2.0 20.0 19.8 Philippines 5.2 5.2 1.0 16.7 23.7 23.7 3.3 49.9 48.9 Portugal 3.4 3.4 - - - - 3.4 3.4 Somalia 2.0 2.0 2.0 2.0 Spain 197.1 1984' - - - - 20.0 22.6 22.6 239.7 241.04/ Thailand 2.0 1.0 - - - - 21.7 21.7 27.0 50.7 49.7 Tunisia 8.6 8.6 3.5 12.1 12.1 Turkey 4.5 13.0 2.1 16.7 22.4 15.4 16.1 10.0 53.3 162.0 97.5 U.A.R. 25.3 25.3 12.0 7.5 44.8 32.8 Uruguay 6.3 6.3 3.0 2.2 11.5 6.3 Viet Nam - - - - 1.5 19.5 53.3 74.3 53.3 Yugoslavia 204.5 204.5 - - - - 28.5 30.9 21.9 15.7 279.6 270.6 l634'220' 54l.25/ 46l.2" 37.55/ 28.6/ 4/ Total 1,730.0 1,6134 223.7 33,5 282. 6 28.9- 480.3- 3,294.7 2,899.3 1/ No data are available an loans scheduled under this program; but it is known that loan agreements are generally signed during the Fiscal Year for which the program is operative. 2/ Includes agreements signed pursuant to Sec.104(d) transactions. 2/ Excludes $36.4 million of P.L. 480 loans repayable in dollars as follows: Argentira - $2.3 million; Chile - 4.0; Finland - 14.0; Iran - 2.5; Mexico - 13.6. i/ Excludes $103.6 million of MSP loans repayable in dollars as follows: Afghanistan - $10.8 million; Ecuador - 2.3; Iceland - 5.0; Iran - 65.0; Libya - 3.5; Morocco - 15.0; Panama - 2.0. j/ Excludes $153.4 million of loan commitments and approvals repayable in dollars, and $99 million of loan approvals that are presently classified in regard to country, currency of repayment and use by public or private borrower. 6/ Excludes $128.7 million of loans repayable in dollars. General Note: Blank spaces indicate that no loan agreements have been signed even though some such agreements may have been scheduled as of June 30, 1959. A (- -) indicates that the P,L.480 sales agreement with this country contailed no provision for loans under this program. Sources: The Tenth Semi-Annual Feport on Activities carried on under F.L. 480, through June 30, 1959. (Report by the President to the Congress, July 1959). Report on Country Loans, as of December 31, 1958. (Prepared by tho International Cooperation Administration, March 1959). Export-impart Bank: Statement of Loans and Authorized Credits as agent for ICA, June 30, 1959). Development Loan Fund: List of Loan Approvals and Commitments, June 1959. Table II Disbursements from U.S. Loans Repayable in Local Currencies ($ millions equivalent, at June 30, 1959) P.L. 480, Title I Mutual Security Program Total Country Sec.10h(g) Sec.10(e) Sec.402 Development Loan Fund Other Disbursement Govt. Priv.Ent. Public Private Austria 12.8 12.8 Bolivia 0.8 0.8 Brazil 53.6 0.1 53.7 Burma 6.0 6.0 Ceylon 0.5 2.1 2.6 Chile 19.5 19.5 China 36.7 0.3 1.6 38.6 Colombia 14.6 0.8 15.L Denmark 2.3 2.3 Ecuador 5.1 0.3 5.4 France 3.6 3.6 Greece 29.9 30.7 60.6 Honduras 1/ 1.9 1.9 Iceland 2.7 0.7 6.5 9.9 India 10.4 36.4 22.6 53.8 123.2 Indonesia 1.7 0.7 2.h Israel 71.7 0.9 27.7 12.3 12.3 124.9 Italy 63.h 63.4 Japan 105.3 105.3 Korea 0.6 0.6 Liberia 1/ 1/ Mexico 4.3 4.3 Morocco 32.5 32.5 Pakistan 49.6 0.1 14.2 1.1 1J 67.2 132.2 Paraguay 2.1 1.0 3.1 Peru 12.1 0.9 1.3 14.3 Philippines l5. 3.1 18.5 Portugal 3.4 3.4 Spain 43.0 20.0 63.0 Thailand 12.8 12.8 Tunisia 2.5 2.5 Turkey 17.0 53.0 70.0 U.A.R. 7.5 7.5 Viet Nam 49.6 49.6 Yugoslavia 96.0 28.5 o.4 5.1 130.0 Totals: Disbursements 596.9V 10.6 229.63 38.3/ 3.1- 318.2- 1,196.7 Loans Signed 1,613.4 33.5 282.0 461.2 28.9 480.3 2,899.3 Loans Scheduled and Signed 1,730.0 223.7 282.0 541.2 37.5 480.3 3,294.7 1/ $50,000 or less. 2/ Excludes $18.1 million disbursements under P.L. 480, See. 104(g) from loans repayable in dollars as follows: Argentina - $0.3 million; Chile - 3.8; Finland - 14.O. 3/ Excludes $80.7 million disbursements under M.S.P. (Sec. 402 and nother") from loans re- payable in dollars as follows: Afghanistan - $8.9 million; Ecuador - 0.4; Iceland - 4.9; Iran - 65.0; Liberia - 1.2; Panama - 0.3. 4/ Excludes $24.4 million disbursements from DLF loans repayable in dollars as follows: Iran - $24.3 million; Yugoslavia - 0.1. 5/ Excludes $1.1 million disbursements from DLF loans repayable in dollars as follows: Costa Rica - $0.1 million; Paraguay - 1.0. Sources: Export-Import Bank: Statement of Loans and Aut1orized Credits as agent for the ICA, June 30, 1959. Export-Import Bank: Statement of Loans and Credits Authorized in Currencies of other countries under Sec.10h(e) of P.L. 480, June 30, 1959. Table III Repayments and Interest Collections on U.S. Loans Repayable in Local Currencies ($ thousands equivalent, at June 30, 1959) P.L. 480, Title I Mutual Security Program Total Countr_ Sec.104(g) Sec.104(e) Sec.402 Development Loan Fund Other CoutryPublic Private Prin. Int. Prin. Int. Prin. Int. Prin. Int. Prin. Int. Prin. Int. Prin. Int. Austria 2 44 2 44 Burma i1 Ceylon 25 1/ 25 China 400 11 411 Greece 2 400 2 400 Ronduras 1/ If Iceland 12 80 92 India 3 600 33 7 1,200 10 1.833 Israel 4 683 4 706 50 211 1/ 94 58 1,694 Japan 15 1,747 15 1,747 Mexico 64 64 Pakistan 1/ 4 800 4 800 Paraguay 1/ I 1/ Peru 4 123 4 123 Spain 3 396 5 800 8 1,196 Turkey 2 320 2 480 4 800 Total 28 2,993 - 64 16 3,238 75 244 - 11 13 2,665 132 9,215 1/ $500.00 or less. Sources: Export-Import Bank: Statement of Loans and Authorized Credits as agent for the ICA, June 30, 1959. Export-Import Bank: Statement of Loans and Credits Authorized in currencies of other countries under See.104(e) of P.L. 480, June 30, 1959. Table IV Status of U.S.-owned Local Currencies ($ millions equivalent, at December 31, 1958) Status of Funds P.L.480,Title I Mutual Security Total (Sec.550,h02) Total generated under programs 3,320 1,59h h,914 of which: scheduled for loan agreements 1,824 2782/ 2,102 reserved for other uses 1,4961/ 1,043- 2,539 unallocated - 273 273 Actual Deposits 2,549 1,450 3,999 Total Disbursements 932 1,229 2,161 of which: for loans 436 222 708 for other uses 46 1,007 1,453 Cash Balance 1,617 221 1,8392/ Deposits still to be made 771 144 915 Total Outstanding 2,388 365 2,753 of which: for loans 1,338 56 1,394 for other uses 1,050 36 1,086 unallocated - 273 273 1/ "Other uses" of P.L. funds are mainly: a. to meet U.S. obligations abroad, (Sec.10h(f)) totalling - $859 million. b. to finance military procurement (Sec.10h(c)) and to carry out other agreed purposes in the foreign countries concerned, (a-b, h-o) - 8383 million. c. to make grants for economic development, (Sec.10h(e)) - $216 million. d. to finance purchases for third countries under U.S. aid programs (Sec.104(d)) - $38 million. 2/ "Other uses" as those under P.L. 480, but amounts unknown. 3/ The U.S. also holds cash balances of local currencies as follows: a. Repayments on local currency loans under P.L. 480 and the Mutual Security Program - $9.3 million. (June 30, 1959). b. A portion of "Counterpart" funds (10% since 1952) transferred by aid-receiving countries for U.S. uses -- $50 million. (June 30, 1959). c. Miscellaneous sums acquired by various U.S. agencies - 860 million (June 30, 1958). General Note: In addition to the use of its own local currency deposits, the U.S. also has a veto power over the use of "counterpart" currencies deposited to the credit of foreign governments under the provisions of mutual aid agreements. At December 31, 1958, the cash balances in these accounts totalled the equivalent of $663 million. There were also $25 million of "counterpart" funds (almost all in Yugoslavia) under Title II of P.L. 480. Sources: Based on flCounterpart Funds and ICA Foreign Currency Accounts, as of December 31, 1958" - ICA. "Status of Funds under Agreements entered into pursuant to Title I, P.L. 480", December 31, 1958 - Treasury. "Report to the Congress for the period July - December 1958" - Export-Import Bank. "Report on Country Loans", December 1958 - ICA. Ninth Semi-Annual Report to the President on activities carried on under P.L. 480 through December 1958 (Report by the President to the Congress, January 1959). Table V U.S.-owned Local Currencies and odcunteroart Funds; Balances Generated and Remainir T9,)ent (6 millions equivalent, at December 31, 1958) U.S.-owned 1 Foreign-owned Country P.L.bbO,Title I Mutual Security Counterpart (See.550777027 (Including P.L.1BO,Title II) Afghanistan 1 Argentina 21 Austria 17 4 6 Belgium 2 Bolivia 6 1 7 Brazil 126 Burma 34 Cambodia 5 Ceylon 5 1 Chile 13 China 8 25 14 Colombia 1h Ecuador 3 Finland 23 France 3 3 Germany 3L 10 Greece 18 11 123 Guatamala qaiti 2 Iceland 2 8 India h74 50 Indonesia 90 6 Iran 5 5 Ireland 3 Israel 44 2 2 Italy 49 6 83 Japan It Korea 23 11 148 Laos 5 Lebanon 3 Mexico 15 Netherlands 2 Norway 1 Pakistan 132 3 38 Peru 8 Philippines 7 8 4 Poland 6 Portugal 2 Spain 174 2 33 Thailand 2 16 Tunisia 3 Turkey 34 13 U.A.R. 21 2 U.K. 16 16 1 Viet Nar 3 11 56 Yugoslavia 212 23 50 Total 72/ 221 6882/ 1/ The U.S. also holds cash balances of local currencies derived from other sources. On June 30, 1958 these totalled $90 million, comprised as follows: a. U.S.-owned portion of counterpart funds - $30 million. b. Miscellaneous sums acquired by various U.S. agencies - $60 million. The principal holdings of these currencies were in D.Marks - $41 million equivalent; Yugoslav dinars - $11 million; Pakistan rupees - $7 million; Israeli pounds - $6 million; pesetas - $6 million. 2/ Totals do not add due to rounding. Sources: Status of Funds under Title I, P.L.480; as amended cumulative from inception through December 31, 1958 - Treasury. Counterpart Funds and ICA Foreign Currency Accounts as of December 31, 1958 - ICA.