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technical assistance emphasizing the flow of private capital, \\dth 

 clear safeguards in the recipient countries to protect private American 

 investment. The major role of the Congress was to amend and enact a 

 policy that had been initiated by the executive branch. The ultimate 

 form of the bill took into account both the Administration concepts 

 and those of the business community, which had been reflected in 

 opposition measures introduced by Senator Leverett Saltonstall and 

 Representative Christian Herter. In its final form the bill contained 

 less emphasis on multilateral programs, and more emphasis on a bi- 

 lateral investment program, supported by bilateral agreements be- 

 tween the United States and the recipient countries; other provisions 

 were : 



An annual review of requests for assistance; 

 Annual legislative authorization for appropriations; 



Establishment of joint commissions to coordinate country programs and 

 recommend specific projects; 



Funding on a functional, rather than a geographic, basis; 



Appropriations on an annual basis; 



Authorization to Export-Import Bank to provide investment guarantees. 



The bill did not provide for governmental funding of technical 

 development programs. The role of the State Department in over- 

 seeing the administration of the new program was left in some doubt : 

 the President was instructed to establish the Technical Cooperation 

 Administration as a coordinating agency ^^'ithin the Department, but 

 departmental control over programing and management of TCA was 

 A\'ithheld. It was the view of some legislators (notably Senator Van- 

 denberg), and some Foreign Service personnel, that diplomatic 

 operations of the Department were not readily reconcilable with the 

 responsibilities for administering a technical assistance program. 



The role of the legislative branch in initiating foreign policy is 

 defined by the Constitution as well as constrained by tradition and 

 circiunstance. Congress has traditionally relied on the information 

 and analysis resources of the executive branch. In the formulation of 

 the point IV program, the Congress relied for information almost 

 exclusively on the Administration and on those spokesmen of the 

 business community interested in participating in an overseas in- 

 vestment program. The easing of consumer demand during the first 

 half of 1950 (for the first time since the close of World War II) under- 

 scored the need for economic stimidus. 



Business views in particular were parochial regarding problems 

 facing the underdeveloped world. These \dews — expressed mainly by 

 business executives rather than either economists or technologists — 

 were a main source of guidance for both ihe administration and the 

 Congress. 



Preparation for the midterm congressional elections of 1950 diverted 

 attention from consideration of the aid plan. Moreover, with the out- 

 break of the Korean war, late in June 1950, national priorities shifted. 

 The event was widely interpreted as evidence that the Communist 

 world was prepared to employ military force to gain its expansionist 

 ends, and that a countervailing force capability was called for. (Al- 

 though the war itself did not begin until the end of June, the growing 

 tensions in the area were perceptible 3 months earlier.) Increasingly, 

 the support for the technical assistance program came from those 

 concerned wdth national security needs and took on a military char- 

 acter. Technical data, some of which had little bearing on economic 



