plate the transfer or sales at that time. For the firstline countries, most of the sales are in the form of new aircraft. Mr. MCDOWELL. I would like your comment on a statement I have heard made, that we furnish a better type of military hardware to most of the foreign countries that we deal with than we do to our own National Guard. Some of the equipment that we furnish our National Guard is more outdated, is more obsolete than the equipment we are today furnishing to many of the foreign countries under our sales and MAP program. Mr. Kuss. I can't speak for the MAP program. In the case of the sales program, of course, there are countries buying and purchasing equipment; we are not furnishing it to them on a grant basis. Mr. McDOWELL. If they buy it in this country, it would have to come through the Defense Department and State Department for authorization? Mr. Kuss. But not out of our appropriations. Mr. MCDOWELL. I am referring to that part that does come out of appropriations. Mr. Kuss. None of the Mr. MCDOWELL. And that is considerable. Mr. Kuss. None of the sales program comes out of appropriations. Mr. MCDOWELL. I am not trying to be technical about this, but I am talking about the military assistance program to these many countries that we are and have been engaged in as to furnishing military hardware, whether either by appropriations or authorizing the purchase of it in this country and the exporting of it from this country we are furnishing these countries with better military equipment than we are to our own National Guard. Mr. Kuss. I don't think I could answer the question, since it applies principally to the military assistance program, and since I would have to know more about the National Guard program. Mr. McDOWELL. That is all, then, Mr. Chairman. Chairman MORGAN. Mr. Thomson. Mr. THOMSON. Thank you, Mr. Chairman. Mr. Kuss, how big a staff do you have here in Washington? Mr. Kuss. I have about 15 professional people in Washington. All told, there is a staff of 37, or will be 37 in June. Mr. THOMSON. Do you have some additional personnel stationed in the missions around the world? Mr. Kuss. No, sir; there are no personnel identified under my staff around the world. We have missions, of course, around the world. We have MAAG's that have been there as part of the military assistance program for many years. We also have embassy attachés. We from time to time utilize their services, but they are not attached to my staff. Mr. THOMSON. What is the total dollar cost of the operation of the office that you head? How much are we spending to maintain an Office for International Logistics Negotiations? Mr. Kuss. I would be glad to check the Department's administrative records and provide that information. There are 37 people and it is the cost of their salaries. I would have to collect the transportation costs and so forth. I could be glad to provide it to you if you would like. (The information follows:) Estimated administrative cost of the Office of International Logistics negotiations for fiscal year 1966 563, 783 What Total estimated cost of International Logistics Negotiations--Mr. THOMSON. I would like to have that information. arrangements do we have now with a country like Malaysia? Are we selling them any military hardware? Mr. Kuss. Yes, sir. We have one program underway with Malaysia. Let me look it up specifically. This particularly comes under the credit revolving fund. We have an agreement dated March 6, 1965, by which the United States extended an offer of $4 million in credit assistance to assist Malaysia in purchasing equipment and supplies for its military forces. A shopping list is now being reviewed in detail by our Army and Navy and put into letters of offer. We estimate that the main items will be some shotguns, caterpillar tractors, miscellaneous items, coming to a total of $4 million. Mr. THOMSON. Do we have any similar arrangement with Singapore? Mr. Kuss. No, sir. Mr. THOMSON. What are we selling Israel at the present time? Mr. Kuss. [Security deletion.] Then you may recall we had a HAWK arrangement with Israel. They are buying HAWK equipment. Those are the principal arrangements that we are implementing now. Mr. THOMSON. What is the dollar volume for the HAWK? [Security deletion.] Mr. Kuss. [Security deletion.] Mr. THOMSON. Is the HAWK a ground-to-air missile ? Mr. Kuss. Yes, sir; it is. It undoubtedly comes to something like [security deletion] million, but I will be glad to provide precise information. [Security deletion.] Mr. THOMSON. Have you the figure on the cost of the HAWK missile? Mr. Kuss. [Security deletion.] Mr. THOMSON. What are we sending to Jordan? Mr. Kuss. In fiscal year 1966 we made an arrangement with Jordan. Jordan had been informed the United States would offer them [security deletion] in credit as part of a total [security deletion] million purchase of Army equipment. [Security deletion.] Mr. THOMSON. How will they be paid for? Mr. Kuss. In dollars through a credit arrangement over a period of time. Mr. THOMSON. How much time? Mr. Kuss. I am sorry. Excuse me. The Army equipment is on a credit arrangement. The aircraft are on a cash arrangement, paid in dollars. [Security deletion.] Mr. THOMSON. Will that be a cash transaction? Mr. Kuss. No, that is a credit transaction. Mr. THOMSON. Over how many years has this credit been extended? Mr. Kuss. [Security deletion.] Mr. THOMSON. Are we in Yemen in any degree? Mr. Kuss. Pardon me? Mr. THOMSON. Are we sending anything to the Yemen? Mr. MONAGAN. Thank you, Mr. Chairman. Mr. Kuss, I have previously stated my own concern about this program. I think all of us feel a certain amount of unease about the fact that we are in the business of selling arms anywhere, beside the concern we feel about making arms available to countries where there are potential warlike circumstances. Looking at the language of the statute itself, I notice, and you have read the objectives before, that the third line speaks of "facilitating" the acquisition of arms on a reimbursable basis, and so forth. That implies that we are taking the initiative in merchandising these weapons. It would seem to me that merely "permitting" the acquisition would be enough to accomplish the objectives that we have. What would you say about that? Mr. Kuss. I would say that to the extent the U.S. Government approves the export of any military weapons through this program, we have the same positive objectives for having that equipment in the country that we had through the military assistance program, that we had through the grant aid program, except the people are now paying the cost of it themselves. We had positive objectives, and there are positive objectives in this act for the development of defense agreements, for facilitating individual and collective security. To the extent that we continue to have those objectives, and we continue to have them around the world, we take a positive view toward seeing to it and trying to have the best equipment, the kind of equipment that will stand with our forces, the kind of equipment that will develop closer mutual relations between our forces and other forces allied with us, to that extent we wish to take a positive and facilitating view toward their having this equipment. Mr. MONAGAN. Of course, the difficulty comes in deciding where you draw the line. I would not argue with you about the desirability of selling equipment as against giving it away. I know that originally this approach came up in connection with the German program with the objective of aiding our balance of payments. You have already explained today how that is carried on. Are you saying that it is only for the purpose of providing equipment that is militarily necessary that you carry on the program and that you don't permit the desirability of having a good international balance of payments to come in and by itself stimulate you into becoming a merchandising operation? Mr. Kuss. Absolutely. Otherwise this program would be in the Department of Commerce. This is why it is in the Department of Defense. Mr. MONAGAN. One of the objectives stated in the statute is that participation by private enterprise should be encouraged to the maximum extent practicable. Do you encourage it? And what is your procedure if somebody wants an airplane, for example, with reference to private enterprise? Do you have a regular procedure of checking with companies or suggesting that the prospective purchaser check with private enterprise? Mr. Kuss. Yes, sir, we do. This is prompted both by our general Government position to utilize private enterprise and prompted by the fact that this committee some years ago actually wrote into the bill a requirement that we do this. The way this is carried out Mr. MONAGAN. It says it "should" be. That doesn't necessarily mean it is done. I am trying to determine that. Mr. Kuss. The way it was written in a few years ago, if Mr. Forman would like to spell it out, it actually calls for the Secretary of Defense to make a finding that it can't be done through industry before he does it himself. Mr. MONAGAN. That must be in a different place. Mr. FORMAN. Mr. Kuss is referring to a sentence in section 507(b) of the existing law, which is repeated on page 27 of the committee print of the bill now before you, beginning on line 19. Mr. MONAGAN. I see it. Mr. Kuss. To describe the procedure Mr. MONAGAN. There is a waiver provision in there, too. Mr. Kuss. Yes, sir. To describe the procedure generally where items are available on a commercial basis off the shelf, we try to get the country to go directly to the manufacturer. For example, United Aircraft engines are essentially the same kind of engines in the Boeing 707 or in the KC-135. Where the country is coming in for a normal resupply of something like that, we try to get them to deal directly with the United Aircraft Co. We control that as a government by requiring that all commercial sales of that type are sold under a license by the Government. They must get a license from us as well. Mr. MONAGAN. You do have control of the ultimate use of them as a result of that license do you not? For example, if a Western European country bought some equipment of that type it would not then under the license be able to transfer it to, let's say, an Eastern European country or enterprise? Mr. FORMAN. Yes, there is a provision in the munitions control regulations of the Department of State, and in the export license, which limits the reexport or use of the equipment. Mr. MONAGAN. Do you know whether there is a regular end-use check or any spot check that is made of those? Mr. Kuss. There are no full-time employed people on hand making end-use checks. There are checks made through all our channels available to us. I would like to then say that the commercial items we deal with, the shelf items, most of what we sell in terms of dollar volume are very large equipment like an F-111 program or an F-4 Phantom. These involve close Government relations. But even in those cases we work very closely with the companies concerned because they have to put in quite an effort on it in follow-on support in getting the whole program ready. We do deal with the industry in that way. Mr. MONAGAN. The table that we have on page 202 shows the receipts from military sales. Is that the total overall figure? Because I notice some of them involve credit assistance and some involve financing with MAP funds. Mr. Kuss. Those are the cash receipts, sir. Mr. MONAGAN. Total program? Mr. Kuss. Yes, sir. Mr. MONAGAN. Could you supply the amounts for the individual years for the record? I don't see those anywhere. It has a cumulative amount for 1961 to 1965, and then it has estimated 1966 and estimated 1967. Mr. Kuss. You want the history broken out? Mr. MONAGAN. Just total amount of the program for each year since it has been going. Mr. Kuss. Yes, sir. (A classified memorandum was supplied.) Mr. MONAGAN. Just one other question that I would like to ask. Mr. Thomson was talking about certain countries to which we were furnishing arms and obviously suggesting the possibility of trouble between the countries as a result, or increasing the potentiality of war between the countries. I notice we are furnishing aircraft and fighter aircraft to [security deletion]. Under the credit assistance section, it appears to involve [security deletion]. They have been engaged in border struggles for some time as you undoubtedly know. I am just wondering what this equipment is, and whether you are aware of the potential danger if it were used in this argument that they have been having? Mr. Kuss. Let me say, sir, I am certainly aware of it. In the administration of this part of the program it is solely a part of the program administered by the Department of State, and the political people in the Department of Defense. The salesmen in my office do not get involved in this kind of program at all. The program itself really is just the results of many years of trying to depress purchase of sales throughout Latin America on aircraft. We did this maybe 10 years ago to such an extent that the Latin Americans ended up buying all British aircraft, and most of the aircraft in Latin America is British, Vampires and that kind of thing. [Security deletion.] Mr. MONAGAN. Does this MAP credit assistance mean credit to them to buy from private sources? Mr. Kuss. [Security deletion.] Mr. MONAGAN. May I ask just one more question? On that same table, Mr. Kuss, for instance [security deletion] has $2 million MAP |