67 



And third, private industry held that training in technical skills and 

 know-how would rapidly follow on the heels of private foreign invest- 

 ment : 



To the average backward country, the chief advantage of private capital, 

 especially direct or equity capital, is that it brings along its own know-how, 

 managerial experience, and the exchange to buy doUar machinery, all of which 

 are welcome." 



Representative Christian Herter introduced an alternative bill 

 incorporating business demands. Herter's bill, and a similar one intro- 

 duced in the Senate by Senator Saltonstall, woidd have limited the 

 assistance provided by the United States to agricidture, health, sani- 

 tation, and education. Bilateral agreements would protect U.S. 

 investors from confiscation of their property and give them special 

 tax pri\-ileges. The measure also would rule out U.S. participation in 

 United Nations technical assistance programs and would establish 

 an advisory council of businessmen to select technical assistance 

 projects for the United States; it would establish an administration 

 in the State Department to supervise and implement the program; 

 and would "restrict intergovernmental loans to those designed for 

 purposes for which private capital is not available on reasonable 

 terms and which will contribute to the economic development of the 

 borrower without displacing or competing with the same or similar 

 facilities operated by private enterprise." ^^ 



The Senate Banking and Currency Committee held one set of 

 hearings on the original administration bill. The House held three sets 

 of hearings — on the original bill, and then on the Herter bill which 

 combined technical assistance and investment provisions, and then 

 on the compromise administration bill. In spite of the repeated 

 exhortations by the President for enactment of his plan and the con- 

 cessions he granted to business opponents, serious opposition to the 

 President's call for a flexible $45 million program still remained in the 

 business community and in the Congress. 



The Senate was opposed to any provision of guarantees for the 

 protection of private capital. The Foreign Relations Committee stated 

 that there should be no more to an initial progi'am than simply the 

 diffusion of technical know-how. It also suggested that if provisions 

 for the protection of capital were included, the program would even- 

 tually involve the United States in a big-money foreign-aid operation. 

 The House, on the other hand, responded to the views of Representa- 

 tive Christian Herter that funding be limited and stronger provisions 

 extended to protect private capital. 



After repeated delays, cuts, and compromises the Congress in July 

 1950 agreed to a program with Umited guarantees for private invest- 

 ment, an indefinite program and a $35 million appropriations authori- 

 zation. Additional attempts to cut the program came from the Appro- 

 priations Committee — because of the need to divert funds to the 

 Korean conflict. However in September, the bill was passed and $35 

 million allocated for the program. 



""Point rV. Has U.S. Capital the Incentive To Carry It Out?" Fortune (Febraary 1950), pp. 95-96. 



19 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. In House. International Tech- 

 nical Cooperation Act of 1949, Hearings, op. cit. ,p. 111. 



