mentioned. Those are the instruments that will enable their people to see to it that their standards are advanced commensurately through democratic means as the program develops. I do not know whether I have made myself clear or not.

Mrs. DOUGLAS. You make yourself clear.

Mr. KAISER. In addition, of course, we have the ILO which has exactly the same objectives about which you are talking.

Mrs. DOUGLAS. Oh, yes; I can see the objectives. We all want, I suppose, to make Point IV, in the President's words, "A program of development based on the concepts of democratic fair dealing."

Such a program I back wholeheartedly, but I can also see where we might make a tragic mistake if we are not watchful. If we promote the investment of millions of dollars in underdeveloped areas and if that money is then used to work people at wages they cannot live on, there will certainly be civil disturbances leading to damage of plants and perhaps even forcing nationalization.

Remember, we guarantee in H. R. 5594, voted out of the House Banking and Currency Committee, to protect that money against seizure, confiscation, or expropriation. I do not object to such guaranties.

I appreciate the fact that the State Department has stated its intent, when payment has been made on guaranties and foreign investors have assigned claims to the Government, not to use force to collect, but to rely upon diplomatic negotiation and, finally, upon trial before the International Court of Justice. This intent, this fixed policy, must be written into the legislation implementing Point IV. Otherwise, possibly at some distant date, it could happen that the marines would go in to collect, to "restore order," to prop up some government or to assist in the substitution of another government thought to be more susceptible to our wishes. And someone else would come in, and we would have the shameful story of Central America, Haiti and Nicaragua, Santo Domingo all over again. And we do not want to get into that picture. That is the exact opposite of what President Truman has proposed. It is the exact opposite of what this Point IV legislation intends. But we will have international "sharpies" playing around the fringes of this magnificent enterprise so vital to the establishment of peace. They will seek to involve and influence and finally to control and use the might of our Government for the collection of private investments and private profit, not just against the unusual risks for which guaranties are now contemplated, but against the justified resentment and action of people whose just needs and demands have been outraged by exploitation.

This is not a reason for pulling back in fear and saying, "We will not get into this work." It is a reason for being forewarned and forearmed with a clear statement of our intent in the administration of Point IV. We should go in, under the explicit terms and conditions I have suggested. But as we go in, we have to have eyes in the front of our heads, eyes in the back of our heads and eyes in the sides of our heads to see that we are not jockeyed into an untenable position.

Mr. KAISER. May I say a word on that? It is my firm belief that the best guaranty for investment is to see to it that the investments bring about those high standards that we are talking about. In other words, if the people of the countries involved see through their own experience and lives as a result of these private investments,

that their own living, the quality of their own living, is being enhanced

Mrs. DOUGLAS. Just decent fairness. Business has behaved well in many instances in South America, I would say. Would you not agree with this, that when X business or corporation goes to the Export-Import Bank, the Export-Import Bank can say, "All right, we will guarantee the loan. Now, how do you plan to proceed? What is your program?" They could see that some reasonable program was undertaken from the very start. I think that we could control that from this end.

Mr. LODGE. I would like to compliment you, Mr. Kaiser, on your statement on page 4, where you say, "It seems to me that it is the responsibility of United States investors abroad, for example, to maintain leadership in matters of labor standards." I believe that it is very much their responsibility because I quite agree with Mrs. Douglas that sweatshop conditions will undo all that we are trying to do in the world battle for men's minds in the great East-West conflict.

I should like to say in connection with what Mrs. Bolton has said about the way that the labor unions have combated communism that I had the opportunity the other day while returning from Europe to meet Mr. Leon Jouhaux, who certainly has been waging a most remarkable and effective battle against the inroads of communism in the French labor movement. I know what the AFL and the CIO have done in Italy and in Sicily with respect to combating it. I think that it has been a very significant factor in the gradual attrition which has taken place among the Communists in both of those countries.

Mr. KAISER. Check and double check.

Mr. CARNAHAN. If we export just technical and administrative know-how and attempt to project this to the masses of people who have neither the chance nor the ability to earn a share in that newly developed wealth, just what are we doing? Are we not just building another competitor for our own economic structure?

Mr. KAISER. If I understand you correctly, you are saying in effect that unless the program brings with it a higher standard of livingMr. CARNAHAN. The ability of people to share in what is created. Mr. KAISER. I agree in your conclusion. I made that point, I think at the bottom of page 7, when I said: "The maintenance and improvement of labor standards in the developing countries will contribute to the protection of the labor standards of American workers against competition based purely on exploitation. I should like particularly to emphasize this aspect of the program, which is sometimes overlooked."

I believe that goes to the point that you just raised, sir.
Chairman KEE. We thank you very much.

I just want to add one more thought to the discussion that we had between our colleagues with reference to the export of know-how. It seems to me that if we export our know-how, that requires the education of those people in how to do the things that are required. Well, that increases the skills of those people. Following that increase in skill there must be an increase in efficiency and an increase in efficiency means an increase in the value of effort.

We have evidence before us that in many countries throughout the world the average income of the people who work is under $100 a year, much lower than $100 a year in some of the countries. If we increase the skills of those people, we increase their efficiency, increase the value of the effort, there must be some provision whereby that increased value be recognized by increased remuneration for that effort. Unless we do that the program will naturally be a failure, because if we cannot increase the remuneration for that effort it will mean the exploitation of cheap labor, which has been the rule in those underdeveloped countries for centuries.

Mrs. DOUGLAS. And if foreign investment does not pay decent wages. to workers in these underdeveloped countries, then they are not able to buy back any of the goods produced in their countries. This would not only defeat the purpose of the program to raise standards of living in these countries, but would also result in these goods being dumped on the international market. And there you are. They would be in competition with us and a few countries in Europe, and a few other countries scattered throughout the world that are able to buy imports because the people make enough in those countries to buy them. We ought to have the Point IV program, I am sure, and we ought to go ahead with it. But we want to make dead sure now that we are not putting together something that might be transformed into a Pandora's box of imperialism. What I am suggesting is that now is the time to see what we are getting into, how we are to behave ourselves, to see to it that the investors whose investments we are to guarantee against the stated unusual risks do not misbehave themselves abroad as they would not dare to misbehave themselves at home. Let's nail that down in the writing of this legislation, and in the accompanying statements of legislative intent, so that, at some future date some trigger-happy superintendent in some far off enterprise operated with American capital and under the limited guaranties against unusual risks proposed under Point IV, will not be able to talk a representative of our Government into action that will make the name of the United States a hissing and byword among the people of that country.

I do not want to seem negative about this program. Quite the contrary, I want the Congress to design it carefully so that it will, in practice, promote and not defeat the purpose which, again to quote President Truman, it was designed to serve, "a program of development based on the concepts of democratic fair dealing."

Having done that, I would say, let's go ahead. What I am suggesting, and what I shall insist upon, is the essential balance in the export, under this program, of industrial know-how, farming knowhow, and union and collective-bargaining know-how. If this program does not have that balance, it will capsize shortly after it hits the water. If it does have that balance, it can do what President Truman's proposal intends.

Mr. CARNAHAN. I would like to say that it seems to me the problem in the underdeveloped areas is to build up the ability and the interest and the desire of the masses of the people to consume. If we do that, then they can support an industrial structure; otherwise, they cannot. Mrs. DOUGLAS. That is right. If they can do that, they can gradually absorb the goods that they produce until such time as there is

equal competition in the world markets. I think that what we are really seeking here is a way to unlock and make available to the peoples of the earth the potential plenty that modern technology makes possible. A few nations have so much technology and so much know-how and so many nations have so little that, for the peace of the world, it must be shared if it is to be a real blessing and source of security and happiness, even for us who today have most. We are on the way and I believe toward finding out how to live with abundance. We have far to go and much to do. We, too, have much to learn, and much know-how to acquire in the most important art of cooperation with our fellow men. We will learn in doing. Let us now do the best we can in this legislation, resolved to improve it by experience as we go along.

Mr. KAISER. All I can say is that Mrs. Douglas, the chairman, and Mr. Carnahan have said much better than I, what I tried to say in my testimony.

Chairman KEE. We thank you very much.

We have with us our Secretary of the Interior, Hon. Julius A. Krug. Mr. Secretary, we are glad to greet you this morning.

STATEMENT OF HON. JULIUS A. KRUG, SECRETARY OF THE
INTERIOR

Mr. KRUG. Mr. Chairman, and members of the House Committee on Foreign Affairs, my appearance before the Foreign Affairs Committee is a commentary on the tremendous sweep of American foreign policy today. As you know better than I, it is no longer possible to separate foreign and domestic policies and to consider them in neat and precise pigeonholes. Your committee has had to consider the views of technicians as well as of diplomats, for today the whole scope of human activities must be considered by those who mold international relations.

If I had any doubts about the interrelationships of our own economy with that of the rest of the world, they would have been dispelled by my experience at the War Production Board. That experience contributed to some of the judgments made when 2 years ago I was given the task of surveying American resources in relation to the then proposed foreign aid program. A sentence out of the foreword of that report might well be the text for my discussion with you today:

The world possesses sufficient natural wealth to support its population, but only if this wealth is developed, utilized, and conserved wisely through the sound exercise of human energy, knowledge, and judgment.

The Point IV program represents a sound direction to our efforts to insure that the world can support its population. That is why I am enthusiastically for that program. Under it the American skill in resource development may be harnessed to American foreign policy, unleashing one of the most vigorous forces on the American scene, American scientific skill, in the world battle for a democratic way of life.

But there is no need to elaborate to this committee on the broad policy aspects of the technical cooperation program. Let me rather, in the capacity of a technical adviser, present for your consideration

three specific aspects of the program. The three specific questions I shall consider are these:

1. Will modest expenditures of the sort proposed under the international technical cooperation bill permit any substantial accomplishment in foreign resource development?

2. What is the relation of foreign resource development to resource conservation?

3. How does Point IV technical assistance differ from other programs of assistance in which this country has previously participated? 1. Will modest expenditures of the sort proposed under the Point IV program permit any substantial accomplishment in foreign resource development?

One problem on which the experience of the Interior Department may be particularly useful to you is in determining whether you can really expect significant achievements from a comparatively small contemplated expenditure for technical assistance. I, of course, do not mean to suggest that the sizable sums of money proposed for this purpose are insignificant or trifling, but in view of the fact that it is spread over the world and that actual resource development comes high, you are entitled to wonder whether meaningful work can be done without committing the country to astronomical expenditures.

Technical aid is a necessary forerunner of large-scale development of foreign resources no matter how that development may ultimately be financed, and enormous results can be achieved with technical assistance for remarkably small outlay. You are all familiar with the stories of small teams of American doctors who have worked singlehanded miracles abroad. Geology, metallurgy, and fishing, too, have their record of small groups of men who get things done. Since 1941) the Fish and Wildlife Service have trained representatives of 12 foreign countries and have made surveys of resources in 10 American Republics. I believe that a small fisheries mission to Mexico has contributed substantially to the enormous expansion in Mexican fish production since 1941. The Bureau of Mines has done cooperative work with Brazil, Bolivia, Mexico, and Peru. One geologist from our Geological Survey working with Brazilian geologists mapped an ore reserve of 17,000,000 tons of rich manganese deposit, and two American geologists from the Survey helped map a 72 million ton manganese reserve on the Amazon. These vital discoveries, both now under option for development by American companies, represent an outlay of the energy of just three American geologists.

The enthusiastic letters we have received from foreign governments and individuals who have benefited from technical assistance programs are some indication of the extent to which they are appreciated abroad. Here are a few which have been received by the Bureau of Reclamation which has done a great deal of this kind of work; a letter from the Government of Thailand says:

Through the 30 engineers it has helped to train, the Bureau has contributed in a great measure toward progress in the essential reconstruction of Thailand.

A letter from the Government of South Africa is particularly interesting because it includes the report of South African engineers who visited Bureau of Reclamation projects through their own Government. Prominently featured in that report is a listing of the American manufacturers from whom equipment, the value of which they