tion of H. R. 6026 for both H. R. 5615 and S. 2197, as a far sounder basis for consideration.

In respect to H. R. 6026 I have the following comments:

(a) Page 4, line 6; after "foreign" insert "investment and." (b) Page 5, section 5; as previously stated, I doubt the wisdom of including government to government loans in the Point IV program other than in the most exceptional cases.

(c) Page 6, line 17; after the word "displace" insert "or injure." (d) Page 10, line 22 to end of paragraph; it would be better to have the obligation to compensate members of technical missions rest primarily on the participating country and the United States to share this expense only when deemed essential by the administrator.

(e) Page 11, section 11 (a); the treaty also should assure to our nationals the right to hire agents, technicians, and other employees of any nationality, excepting only those of an enemy state to the participating country.

(f) Page 12, lines 3 to 9, should likewise protect the right of United States nationals to participate in business enterprises alone or in association with the nationals of other countries, either as majority or minority interests.

(g) Page 12, lines 10 to 23, refer to the question of compensation in the event of a direct or indirect expropriation or the equivalent thereof in whole or part. This is a matter of utmost importance on which the whole future of United States foreign investment may stand or fall. Therefore, I urge in the strongest terms that this entire section be greatly strengthened in keeping with the recommendations set forth in memorandum entitled "Expropriations and nationalizations in Latin America," which I have submitted to the Secretary of State. I respectfully request that this memorandum be made an integral part of my statement here today.

Chairman KEE. It may be made a part of the record. (The memorandum referred to appears on p. 235.)

Mr. BRADEN. To sum up, the sound development of the undeveloped areas of the world is a noble and highly desirable objective. It is imperative, before launching the program, to make certain that what we do really will help the peoples of those areas to greater per capita productivity and resulting higher living standards. To solve this huge and complex problem requires the most meticulous study and thought on every facet of it, in order to move forward in complete confidence that we have selected the policies and procedures which will insure success.

(The statements previously referred to follow :)

POINT IV BY PRIVATE ENTERPRISE

(Address by Hon. Spruille Braden at the Colgate University Conference on American Foreign Policy)

It is related that a person of limited intelligence, on being assured that he would certainly one day enjoy an adequate competence if he closely followed the industrious habits of the thrifty bee, spent the greater part of his life in annointing his thighs with the yellow powder which he laboriously collected from the flowers of the field.

In plain language, diligence and thrift, admirable as they are in themselves, will be useless or even harmful if misdirected or employed in a futile attempt to reach an unobtainable goal. Just as it is impossible for men economically to perform the essential functions of the busy bee, so the application of the highly indus

trialized system of the United States to other peoples, in other climes, under widely divergent conditions and influences may be inopportune, abortive, and injurious to all concerned.

Certainly, with the world in its presently desperate economic and political straits, this is no time for our Government to dash forth in pursuit of utopias, otherwise to indulge in misguided endeavors or to heap further taxes on an already overspent Nation in order to finance global panaceas. Yet, in effect, that is precisely what the American people from a relatively small beginning may gradually, perhaps unwittingly, slip into doing, led astray by their emotions and by the glittering enticements attributed to the so-called bold new program.

We, Americans, are innately optimistic and, therefore, always ready to try something new, especially if it promises reform or a speedier approach to the millennium. Also we are given to emotional outbursts of all varieties; harmless 'or explosive, of short or long duration, for good or bad, they sweep the whole country from coast to coast. There were the manias for Mah-Jong, obstacle golf, and blowing bubbles. Now our charming ladies, almost without exception and with scant regard to the masculine eye for a well-turned ankle and a trim figure, unaesthetically bedeck themselves in the "new look," sloppy flat-heeled slippers and slacks. Whole communities, seduced by the hope of getting something for nothing go all out for pyramid clubs and radio giveaways. As opposed to these rather silly mass psychoses, on other occasions, with splendid generosity we contribute vast sums to help those all over the earth, who, less fortunate than we, suffer from catastrophes and war, illness and starvation. Or, with equally good intentions and shocked by the evils of alcoholism we imposed on ourselves the utterly unworkable and demoralizing eighteenth amendment.

Speaking of that attempt to enforce virtue by fiat, a former President of the United States said: "Our country has deliberately undertaken a great social and economic experiment noble in motive and far-reaching in purpose." These identical words fit the Point IV program to a T. The problem is to make this bold new experiment practical, successful, and beneficial for ourselves and others. We cannot again afford the improvidence of another such dismal failure as prohibition. He who thinks he is raising a mound may only in reality be digging a pit into which he may fall exhausted.

Great promises dissipated in subsequently small performance will impair confidence in us and in the world leadership which is ours. Let us remember with John Kible that: "Nemesis hangs over men who are overbold in aspiration, whether, like Prometheus, they devise methods and expedients for the alleviation of common ills, or, as Io, indulge in building castles in the air."

Before waxing "overbold in aspiration" by devising methods and expedients for the alleviation of ills common to all humanity, would it not be wise first to cure our own ailments? In this way we might set a good example for others to follow, we could better learn how later on effectively to assist our neighbors, and, after all, charity does begin at home.

Everything the Point IV program proposes to do for the undeveloped areas of the earth should also be done in and for this country. Millions of our fellow citizens need and wish to realize their yearnings for a better life; to have more and better food, clothing, housing, and "more mechanical power to lighten their burdens"; in short, to "raise substantially their standards of living." Within our own boundaries there is a huge job to be done "for the improvement and growth of undeveloped areas."

There are such self-evidently undeveloped areas as in Alaska and some of the Western States, where the exploration for and development of mineral wealth and even the equipment and operation of proven deposits has been hindered, reduced, or entirely prevented by mischievous and arbitrary governmental regulations and excessive taxes.

There are the disgraceful slums, rural as well as urban, to clean up. Finally, to cite only one more example: The National Planning Association on June 19 in a report prepared for President Truman's Council of Economic Advisers declared that a capital investment of $4,000,000,000 or $5,000,000,000 would be required in any year comparable to 1948 if the South is to catch up with the rest of the country. This document stressed that there must be more industry with higher value of output per worker and an increased productivity and value of southern agriculture.

In contrast with the manifold divergencies, obstacles, and risks which will be encountered in trying to spread our industrial and scientific techniques abroad, it would be easier first to attack this huge job to be done at home. Here we have a more or less homogeneous population, already possessing technical know

how or, at least, a ready adaptability thereto. We enjoy general uniformity of laws, customs, and principles and, above all, a firm belief in our way of lifein the private competitive-enterprise system.

Not only would it be easier, but it would make better sense to put our house in order before presuming to tell others how to fix theirs. Especially would this be true in those instances where our plans and methods were unsuited to foreign conditions and tastes. After all, a nation is not great because of its production statistics for steel, etc., but by reason of the kind of life it furnishes and the type of human being it creates. As Salvador de Madariaga points out, the poor Andalusian peasant who, resisting all bribes for his vote, said "in my hunger, I command," had more dignity than hunger and so had a finer sense of the values of our civilization than those Anglo-Saxons who are mainly concerned with getting ham and eggs for breakfast.

Adequately to take care of our own undeveloped areas requires that we foster capital investment in unparalleled amounts. Yet, it is not one of our more scintillating evidences of long-headedness that we plague and destroy capital at home-an activity in which many foreign governments emulate us by attacking United States enterprises in their countries—while simultaneously we implore it to venture abroad.

Rather we should encourage and nurture the accumulation of capital. Only in this way will we make and keep the United States so powerful economically, socially, militarily and in all other ways as to discourage aggression, fortify its security, and entrench and augment the national well-being. Our successful accomplishment of these things will compel respect from all and, perhaps, then inspire others to pursue the same course.

This is not isolationism. It is simple reason and plain patriotism to gage everything first from the aspect of whether or not it is best for one's own country. Once we are satisfied on this score, the next logical step is to consider the measure to which any given project may benefit or harm our immediate community, our closest neighbors. Only after this has been done, should we approach the subject from a global aspect.

In my opinion, Canada and the other American Republics-not Britain or western Europe, as some allege-constitute our immediate community. This is true not only by reason of geographical propinquity and the long traditions and, on the average, the dedication of their peoples to "democracy," as we understand the term, but also because in a cooperation with Europe inevitably the United States must give much and receive little in return. In peace or war, western Europe expects us to supply the strategic materials, the finances, the arms, and all else that they may require. Whereas, in this hemisphere there is a mutuality of interest and a reciprocal relationship. In return for our financial and technical assistance, our neighbors can and do furnish strategic materials and other highly desirable products, such as sugar, bananas, and coffee.

That we should give priority to the huge job to be done at home in no way precludes our proceeding simultaneously to increase friendship and cooperation with our neighbors to the south. Our maximum efforts in these particulars should be concentrated in this hemisphere. There is no other region where the Point IV program can be essayed under more propitious circumstances. Its success or 'failure in the New World should indicate what might be done elsewhere.

Let us pause to contemplate just what the expression "bold new program"

means.

Presumably it may be bold to the extent it breaks precedents, overreaches our abilities or becomes foolhardy. None of these alternatives are necessarily commendable; hence, the word, although actually meaningless, might have been injected because it was sonorously inspiring. Such literary flights make a poor defense against hard economic facts.

Manifestly, there is nothing new about the underlying intent of this program. United States business and private capital actively and successfully have been carrying out the purposes of the President's Point IV all over the earth for more than half a century. In the most constructive fashion possible, they have carried our scientific advances, industrial and agricultural progress, and technical knowledge to the remotest corners of the globe, and in so doing they have materially raised living standards and promoted the achievement of peace, plenty, and freedom. All this they have done with substantial benefits for everyone concerned-especially for the peoples and governments of the countries where they have operated.

Certainly, mistakes, even a few serious ones, have been made. But we erred just as grievously in our domestic affairs and have paid dearly in all cases; the

many innocent suffering with the bunglers or the guilty. Our practices, even so, were usually superior to the mores of the times, and it should be recognized that business ethics and procedures have steadily improved so that today our industrialists, merchants, and bankers operating abroad, excepting for the few chiselers who are encountered in all walks of life, are of the highest integrity and public spirit.

If conditions for foreign investment and enterprise in the underdeveloped areas of the earth are made satisfactory so that capital can go abroad with a sense of security and assurances of reasonable profits which can be brought home, business will gladly continue in even greater measure the splendid job it has been doing for so many years. Fair treatment by the foreign countries and adequate and just protection of our legitimate interests from the United States Government is all, I repeat, all that is needed.

So much for the "bold" and the "new." What about the "program"? The dictionary defines a program as "a prearranged plan or course of proceedings." Yet, 5 months after the President's pronouncement, we are told officially that "all the agencies of Government having experience in the fields of international technical cooperation and economic development have been hard at work examining ways and means for United States participation in the Point IV program.' In other words, there was no program to begin with; and, judging by what has thus far emerged from Washington, it still remains pretty sketchy for what Mr. Truman says "has become one of the major elements of our foreign policy." The plan, so far developed, appears in the President's special message and two bills recently presented to Congress. Separated from the usual pious platitudes and alluring abstractions, it is admitted to be experimental and only the first step. It divides into two categories: (1) technical aid by the United States Government and the UN; (2) encouragement to private enterprise to go abroad through the negotiation of protecting investment and trade treaties and by the Export-Import Bank guaranteeing capital against losses. It is recognized that the major effort must be local, i. e., via self-help.

The cost of these experimental first steps during the initial year will be $45,000,000 for technical aid and an unknown amount on the guaranty account. Such starting estimates may cause those to shudder who have observed the manner in which truly insignificant acorns of expenditure in Washington quickly grow into gigantic spanding oaks.

During the last decade the United States Government has actively been giving technical cooperation throughout Latin America, expending large sums in the process. Its success has been relatively unimportant, excepting for the Institute of Inter-American Affairs work in education, health, and agriculture. These projects were carried on jointly with the respective national authorities, and United States contributions steadily decreased as the local share rose.

For some time to come, it would be advisable to restrict United States Government activities under Point IV to this type of endeavor.

Even so, there will be complicating factors. What is to be done when techniques so improve health and other conditions as to increase greatly the population in a country, which even under optimum foodstuff production can now barely sustain a smaller number of people? Wisecracks about birth control and making it retroactive don't give the answer. Or, to take a simpler case: If by the use of modern tools a worker produces twice as much, it may require quite an educational campaign plus the generation of many incentives to dissuade him from working half as long.

It is pertinent to observe that American enterprises cannot afford to give away their scientific and industrial knowledge, experience, and techniques for nothing; payment must be made for patents and know-how. Nor can they permit these things to be misused by reason of ignorance or for improper ends.

On the other hand, the United States Government mostly does not possess these things and, therefore, cannot supply them. To the extent that foreigners, unaware of this fact, are disappointed in their expectations, they will accuse Washington of bad faith. However, this probably won't stop the bureaucrats, since no Government organ I ever heard of has yet abstained from any function because it acknowledged itself to be ignorant or incompetent.

Therefore, unless Congress rigidly circumscribes governmental operations under Point IV, there is grave danger that the appropriations required for the program, within a surprisingly short time, will become enormous. Frequently, they will be of a speculative nature. To employ United States taxpayers' money in such ventures would be unprincipled and unsound; it would be counter to our democratic-capitalistic tenets; it would involve us in the worst form of dollar

diplomacy; it would turn over the investment of our savings to bureaucrats, ill-equipped for the task and whose responsibilities for the errors they may commit would be blurred; and it would deprive our citizens of their fundamental right to choose their own investments.

No officialdom, irrespective of how carefully selected or wise it may be, is competent to master and direct all the intricate and powerful economic forces of this Nation-and still less of the whole world.

To prosecute more than a small part of this program through governmental vehicles, disbursing the taxpayers' money in government-to-government loans or grants, would render it bold to the point of foolhardiness. The recipients of governmental loans or largesse acquire a distaste for private capital. Moreover, governmental credits receive exchange priorities and other preferences, thus further injuring private interests.

Even worse than developing this program through United States governmental instrumentalities would be to put it under the less experienced United Nations and the latter's specialized agencies. This Nation would continue to make the major financial and technical contributions; yet, the direction and control thereof in most cases would be vested in those organizations where our single vote would be overwhelmed by those of the plan's beneficiaries. The UN, like all bureaucracies, seems ambitious to expand its activities and, at best, to be only grudgingly tolerant of private enterprise. To coordinate its operations with those of private organizations would be a Sisyphean task. The evils of statism and bureaucracy from which we already suffer within our own country would be expanded into an infinitely more dangerous international superstatism and hegemonic bureaucracy.

The ineptitude of both the UN and OAS in these matters has already been demonstrated. True, the International Bank for the nonce has a competent administration, but such agencies may change for the worse and cannot be counted upon as being permanent. Therefore, for the long pull, the prospects of using the UN are not auspicious, even in respect of such preliminary work as preparation of studies and surveys. This particular aspect of the program requires the most careful scruitiny, especially as it may be expected that both the UN and OAS, together with the many so-called experts in Washington, will attempt to grab the ball and run off with it in every direction. To the extent they succeed it will mean more Government in business, more proliferation of bureaucratic structure, and more extravagance and inefficiency. All which will spell the defeat of the ends the President seeks.

The negotiation of bilateral treaties to encourage United States capital to go abroad is desirable, always providing that we first, after exhaustive study, formulate and make public in a unilateral declaration our economic policies especially on the protection of United States private investments. Only in this manner can we make effective the leadership which is expected of us. It is essential that other nations know that the United States Government and its diplomatic missions will give genuine and full support to our legitimate enterprises abroad, raher than, as heretofore, what often, at best, has been merely lip service.

During recent years we have witnessed the menacing and ever-increasing tumefaction of a variety of grants-in-aid to the several States and of Federal subsidies to sundry groups, who may possess convincing electoral influence. All of this undermines self-confidence and individual initiative and makes men supine under a welfare state.

Still, it comes as a shock to learn that we have advanced so far down the easy path of lethargic submission or indifference that it is now proposed to use the taxpayers' money as a guaranty to induce private capital to invest abroad in undertakings in which, based on sound business judgment, it would not dare hazard its own funds.

According to the President's message to Congress, private investors are to be insured against the dangers of inconvertibility of their capital and profits into dollars, expropriations, unfair and discriminatory treatment by foreign governments, and the destruction of their enterprises through war or rebellion. While this proposal, as yet, is too nebulous and complicated to permit of detailed analysis, certain generalizations are applicable, irrespective of the nature of the loss which the guaranties are supposed to cover. The suggested procedure would be unsound because:

(a) Any guaranties such as are contemplated should be given by the country where the investment may be made, and under no circumstances by the country supplying the capital.