Mr. ROCKEFELLER. Absolutely. Mr. JUDD. Thank you very much. Chairman KEE. Referring to the statement of Mr. Smith about the South Americans wanting more money; in the conference report on the Inter-American Affairs bill we called attention to the visit of our representatives to South America and that we rely a great deal upon their reports. In every report the work of the Institute was highly commended. With reference to the South American people asking for money, we inserted into our report a chart in which it was shown that the InterAmerican Affairs program in South America was initiated by the United States without any contribution whatever on the part of any of the South American countries, but they very soon started contributing; and then, beginning with the year 1944, we find that we contributed about $8,000,000, and the South American countries altogether contributed about $11,500,000. Then they continued to increase their contributions, and ours have been decreasing from that time on until 1948, when our contribution was about $6,500,000, and theirs was approximately $17,500,000. Then in 1949 our contribution decreased. We contributed at that time about $5,000,000 and the South American countries contributed $15,000,000. In 1950 it is contemplated their contribution will remain at $15,000,000 while our contribution will be from $4,000,000 to $7,000,000. That is the situation with reference to their contributions in South America. It indicates that instead of asking for more, they are giving more. I think that you, Mr. Rockefeller, are to be congratulated on the success of that enterprise. You organized five companies down in South America, all of which have now been combined into the Institute of InterAmerican Affairs. It is doing a work in which all Americans can take pride. We thank you very much for your statement. Mr. ROCKEFELLER. Thank you, Mr. Chairman. Chairman KEE. The committee will stand adjourned until 10 o'clock Monday morning. (Whereupon at 1:05 p. m. the committee adjourned to reconvene on Monday, October 3, 1949, at 10 a. m.) INTERNATIONAL TECHNICAL COOPERATION ACT OF 1949 MONDAY, OCTOBER 3, 1949 HOUSE OF REPRESENTATIVES, The committee met at 10 a. m., pursuant to notice, for further consideration of H. R. 5615, the Honorable John Kee (chairman) presiding. Chairman KEE. The committee will now take up again the Point IV program bill, H. R. 5615. We have with us today Mr. Austin T. Foster, general counsel of the Socony-Vacuum Oil Co., of New York. Mr. Foster, I believe you have a statement or two perhaps that you wish to incorporate in the record. STATEMENT OF AUSTIN T. FOSTER, CHAIRMAN, TREATY COMMITTEE, NATIONAL FOREIGN TRADE COUNCIL, INC., NEW YORK, AND GENERAL COUNSEL SOCONY-VACUUM OIL CO., INC., NEW YORK Mr. FOSTER. Yes, I have a statement which I would be glad to read to the committee. I would like to confirm my understanding on one point, that H. R. 6026 is also before the committee and is to be considered at the same time. Chairman KEE. That is what is known as the Herter bill. Mr. FOSTER. Yes. Chairman KEE. That bill has been referred to this committee, and if you desire to direct your remarks particularly to that bill, or parts of that bill, you will have that right. Mr. FOSTER. I have directed my thoughts and remarks to both bills. Chairman KEE. All right, you may proceed, Mr. Foster. We are very glad to have you appear before the committee. Mr. FOSTER. My name is Austin T. Foster. I am general counsel of Socony-Vacuum Oil Co., Inc., and for several years have been chairman of the treaty committee of the National Foreign Trade Council, on whose behalf I am here to present a statement. The National Foreign Trade Council is a nonprofit, nonpolitical membership association, incorporated under the laws of New York State. Its Nation-wide membership is composed of firms in the export and import trades, owners of industrial enterprises and other busi ness properties located abroad, banks, insurance companies, ocean, railroad, and air transportation companies, communications companies, agricultural interests, and other types of American enterprises doing business with or within foreign countries. The National Foreign Trade Council, ever since President Truman's inaugural address has followed the development of Point IV with close interest and believes in the general objectives of the program as outlined in statements of President Truman and officials of his administration. In May of this year the council completed the preparation of a report entitled, "Private Enterprise and the Point IV Program," a copy of which I should like to place in the record. Chairman KEE. It will be included in the record. (The matter referred to is as follows:) PRIVATE ENTERPRISE AND THE POINT IV PROGRAM Recommendations of the National Foreign Trade Council, Inc. FOREWORD Recommendations of the National Foreign Trade Council concerning economic assistance to underdeveloped countries are presented in this document. The council's motive is to help the United States Government implement more effectively those foreign economic policies which will yield widespread benefits in goods produced and consumed or exchanged by nations. The proposals, however, are equally for consideration by the business communities of the United States and other lands, by foreign governments weighing policies on economic development, and by the general public in its formation of opinion. Every country, the council believes, is to some extent underdeveloped, and it holds that no country desiring to cooperate should be excluded from the program. Certain of the recommendations necessarily deal quite technically with great problems of American international investment. All are designed to assist the successful implementation of Point IV of President Truman's inaugural address concerning foreign economic development. They are proposals for establishment of definite, stable, and fair rules of the game for the conduct of international business. The existence of these rules would obviate arbitrary and capricious Government interference with the flow of capital, production, and trade. The council regards its views on Point IV of President Truman's inaugural address as representing a normal outgrowth of many years of experience in the field of foreign commercial policy. Neither exports, nor imports, nor direct foreign investment can individually form the principal subject of the international commercial policy of the United States. All three are basic to a sound program. Recognition by the President of the role of private capital investment abroad is welcome at this time. Problems of American direct foreign investment, and consequently of economic development abroad, have received close attention from the council, particularly in recent years when the issues have grown acute. Extensive cooperation in connection with investment abroad has been given to the Department of State and other agencies of the Government. Patterns of treaty protection answering modern requirements with respect to investment protection and the avoidance of restrictive international multiple taxation are already established in a substantially satisfactory manner. The present statement proposes in addition certain considerations for a new form of treaty covering remittance of earnings. The country's foreign development program called for by President Truman will prove bold partly to the extent that governments wisely dare to remove restrictions from enterprise in countries all over the world. It will prove new mainly in the magnitude of potential achievement that will be opened to the people of the world. In preparation of the statement the council has benefited from the intensive and expert work of a committee of council members experienced in foreign investment administration and fully alert to political and economic conditions prevailing throughout the world. Their philosophy, and the philosophy of the Nation-wide foreign trade and investment community, may be stated by reiteration of an excerpt from the declaration of the Thirty-fifth National Foreign Trade Convention, November 1948. "The American system of private enterprise has been proved by experience. It has produced for our people the highest standard of living in all recorded history. Our system is designed to produce and distribute wealth, and its success in achieving this aim is demonstrable by the record. This is in sharp contrast to Marxism, which claims to distribute wealth but succeeds only in distributing poverty. The system of free, private, competitive enterprise is man's best and only hope to keep alive his age-old dream of a world where he can work in freedom, live in peace and dignity with his fellows, and enjoy with them the good things which their combined labors have produced." PRIVATE ENTERPRISE AND THE POINT IV PROGRAM President Truman, in his inaugural address, pointed out that American material resources available for assistance to other peoples are limited but that our country's technical knowledge is constantly growing and is inexhaustible. He expressed belief that we should make available our store of technical knowledge to peace-loving peoples for their benefit and that we should foster, in cooperation with other nations, capital investments in areas needing development. "Our aim," he said, "should be to help the free peoples of the world, through their own efforts, to produce more food, more clothing, more materials for housing, and more mechanical power to lighten their burdens." Assistant Secretary of State Thorp, in a recent statement on economic development and technical cooperation,1 has aptly pointed out that such development must take into account and, so far as possible, be adapted to, local resources, aptitudes, social and legal structures, customs and practices. He further made it clear that for the most part capital accumulation in any country must come from its own peoples' savings and that, while foreign capital might be called upon for assistance, a too rapid flow might endanger the recipient countries' ability to service the foreign capital out of its foreign-exchange resources. Mr. Thorp also observed that the amount of funds that can be made available for foreign investment would fall far short of the world's capacity to use capital. At the same time, he made it clear that certain basic policies of government are essential to the accumulation of savings in any country and to the stimulation of overseas investments. The National Foreign Trade Council is in full accord with the foregoing statements. The success of any program for world economic development will depend on its economic soundness and the environment established for its execution. A sound program will be reflected in better international commercial relations and in an expanded movement of goods and services between the peoples of the world. Of fundamental importance is the suggestion implicit in President Truman's inaugural address, and further developed in statements by leading officials of the Department of State and by Secretary of Commerce Sawyer, that emphasis in the program is to be placed upon the part of private enterprise in making available its industrial know-how together with capital investment to foreign countries. To this part of the program the council directs its major consideration. GENERAL CONSIDERATIONS TIME AND SCOPE A foreign economic development program must be thought of in terms of an ever-continuing effort rather than one of any determinable period. Emphasis should be placed on setting up the program on a sound basis with assurance of continuity rather than undue haste in its initiation. While the program envisaged by the President appears to have been limited to underdeveloped areas, it is the council's opinion that to some extent all countries are underdeveloped. Therefore, no country desiring to cooperate should be excluded from the program. The essential functions of the United States Government in the program should be to continue its present program of technical cooperation and to assist 1 Before the Economic and Social Council, United Nations, on February 25, 1949. |