~a 



9& 



The difficulty is that the United States has almost no tradition of private 

 investment abroad of the sort required by the point 4 program. Foreign invest- 

 ments have been made where, as in the case of oil, copper, iron ore, rubber, and 

 other raw materials, there was need to develop sources of supply for American 

 industries. In 1948, about two-thirds of American foreign investment was for oil 

 development alone; as this declined with the completion of Middle Eastern 

 projects, including some overdevelopment, the total volume of overseas invest- 

 ment has declined. There has also been a smaller though substantial investment 

 in branch plants and sales facilities as supplements to the main stem of the 

 American markets. All of this activity has, in effect, been subordinate to American 

 operations.'^ 



James P. Warburg, an economist and author on int_ernational 

 affairs, stated that because private business is interested in making 

 a large profit, it "* * * would not be willing or able to undertake the 

 long,"patient development programs required by most of the areas in 

 question.'"'^ And Morris S. Rosenthal detailed those essential de- 

 velopmental tasks tliat private business would avoid: 



Broadly speaking, power, transport, and the social services do not lend them- 

 selves to "foreign private investment. Some American and European public utility 

 companies have investments in Central and South America, and perhaps there 

 are some other areas of the world in which the private enterpriser would be willing 

 to take such investment risks. But when we think of the social services, the 

 development of food for home consumption, the development of internal trans- 

 portation facilities, and in a large measure the development of power, the risk is 

 too great for private American investment abroad. ^^ 



Labor 



The development of labor as an industrializing resotnce in the less 

 developed nations was a technical cooi^eration program proposed by 

 the State Department in its point IV program planning brochure. 

 Although more attention was given to the proposed labor develop- 

 ment program than to some of the other areas, the specific requn-e- 

 ments of a labor-training ])rogram and of the obstacles to it were not 

 foreseen by congressional and executive decisionmakers nor by authori- 

 tative persons who testified before the Congress. Spokesmen for kbor 

 groups supported the ])rogram, especially in the face of the Com- 

 munist threat, and suggested the need to export technical assistance in 

 union organizations, management-worker relationships, and other 

 labor rights. However, these witnesses offered no guidelines as to the 

 type of technical assistance needed to improve labor skills or as to 

 wliat contribution labor organizations could make to the promotion 

 of labor development in tlie less-develo])ed cotm tries. 



Walter Reuther, i)resident of the United Auto Workers— CIO, 

 promised that American labor would "* * * make the necessary 

 accommodations and adjustments from time to time * * *" ni order 

 to improve trade >\'ith the other areas of the world. However the pro- 

 visions he and other leaders of the American labor movement sug- 

 gested to meet the needs of the worker in the underdeveloped coun- 

 tries were limited to enactment of the "* * * appropriate mmmium- 

 wage laws and maximum-hour law s * * *" to improve labor relations 

 and the legal climate for workers.^'* 



The Department of Labor presented testimony detailing technical 

 cooperation programs which it planned to undertake. Assistant Secre- 



96 Jaines^P ^Varhiire.' ecoiiomrst'aiul author on international affairs. Previously Deputy Director of the 

 Overseas Branch of the Office of War Information. "A New Look at the Economic Challenge. Annals 



' « Morris 's°'RosenthaL "Point 4-Enough or Not at All." Annals (July 1950). op. cit., p 38. 



M Pee text of Letter of Walter Reuther, president of the UAW-CIO to Mr. E. F. McDonald Jr.. president, 

 Zenith Radio Corp., Chicago, Nov. 22, 1949. (Pp. 449-450), and foreign policy resolution adopted by tne 



