CONCLUSION In conclusion, we feel that ECA as now organized, is dominated too much by political considerations and would be better if it could be divided into two separate agencies with separate appropriations. If this is not possible, then ECA should be divided internally and the money appropriated should be definitely earmarked for general aid (political) and industrial aid. The expenditures already made and those suggested for the next fiscal year constitute an extremely heavy burden of taxes on top of an already dangerous budget. Unless permanent benefits can be obtained, we are in danger of seriously weakening our own economy. STATEMENT ON BEHALF OF AIRCRAFT INDUSTRIES ASSOCIATION The Aircraft Industries Association submits that section 509 (b) of the proposed Mutual Security Act of 1951 should be amended by deleting the following: “In addition, in any suit for damages for use or disclosure of such information, any written description, model, drawing or other recorded teaching in the files of any department or agency of the Government, which— "(i) has a provable date before the disclosure to the United States by the owner thereof of the information upon which the suit is based, and "(ii) constitutes a sufficient description of the information disclosed upon which the suit is based to enable others to practice or employ such information, unless such teaching consists of information obtained directly or indirectly from the owner of the information upon which the suit is based, shall constitute a complete defense for the Government against the claim for compensation. Except as otherwise provided by law, such teaching shall not impair the property in such information." This amendment is urged for the following reasons: (a) Section 509 (b) is intended to provide an additional remedy by way of a claim against the United States Government that is not provided for in the present Court of Claims Act (28 U. S. C. 1498). The Court of Claims Act is limited to claims for compensation for use of patented inventions by the Government whereas section 509 (b) provides for claims against the Government for the use or disclosure by the United States of information not available to the general public. The Court of Claims Act gives the Government the right to avail itself of any and all defenses, general or special, that might be pleaded by any defendant in a patent-infringement suit but does not give the Government the right, as an additional defense, to use any written description, model, drawing, or other recorded teaching in the files of any department or agency of the Government. It is not thought that, as to information contemplated by the program, the Government should be in any more advantageous position than it would be in the defense of a patent suit. (b) If the Government has "information" available in its files, then, that information should be made available and disclosed by the Government rather than the information obtained by the Government from individuals or industry, under the Mutual Security Program. To do otherwise would be to permit the Government to plead as a defense the information contained in its own files and thereby permit the Government to pit one owner of information against another owner of information to the detriment of both. (c) Section 509 (b), as now written, places the Government in a favored position by establishing secret information in the hands of the Government as having the same evidential value as a publication would have in the hands of a private litigant who does not have access to such secret information. (d) The Patent Subcommittee of the House Judiciary Committee has previously considered bills designed to amend the Court of Claims Act by including the right to plead as special defenses for the Government the information contained in its files. One such bill is H. R. 3929, Eightieth Congress, second session. Up to the present time the Congress has refused to enact such legislation for permanent requirements, and, therefore, there is no reason seen for enacting such legislation in connection with the Mutual Security Program. (e) The enactment into law of a provision such as section 509 (b) as it now stands would deter rather than encourage manufacturers to furnish confidential information to the Government under the Mutual Security Program, because the possibility of recovering any compensation for the furnishing of such information to the Government would be substantially reduced. AMERICAN CHRISTIAN PALESTINE COMMITTEE, Hon. JAMES P. RICHARDS, House of Representatives, Washington, D. C. DEAR CONGRESSMAN RICHARDS: You have been kind enough to inform us that, in lieu of oral testimony, your committee would accept a written statement from us as spokesmen for the 20,000 members of the American Christian Palestine Committee, regarding the Mutual Security Program now under consideration by your committee. We wish, therefore, to place on record here the views of our committee with regard to title 2-the provisions relating to economic assistance to the Near East and Africa. The emergence of the State of Israel in the Middle East has evoked our deep sympathy and support. For the return of the long-dispersed Jews to their ancient Promised Land is a manifestation of the divine purpose working through human history. Moreover, in the terms of our own time and its problems, the rebirth of Israel has a profound significance: It brings to a dormant region of the earth the best in the democratic tradition of the West. In an area still struggling to free itself from the vestiges of feudalism and tyranny, the new Israel is being built on a basis that is sound from the social, economic, and ethical points of view. It is mature enough in its political understanding to be free from the irrational xenophobia that is one of the underlying causes of unrest from Iran to Egypt. It is, we are convinced, a natural ally of the free nations to whose security in the threatened Middle East it can contribute in no small measure by means of its uniquely high standard of technological skill and its trained and hardened youth. American aid to Israel seems to us thoroughly consistent with the tenor of our entire foreign assistance program in recent years. Israel is a young and promising democracy; it needs and deserves our help and will richly recompense us. But our help is needed with special urgency because of the vast humanitarian task Israel has taken upon itself in absorbing hundreds of thousands of Jewish refugees from Europe and the Middle East. Even a well-established economy could not easily withstand the impact of this sudden expansion. Israel, for all its present difficulties, has in the past proved its ability to make swift economic adjustments. We believe, therefore, that it is imperative that Israel be included in the mutual-security program and that the sum finally assigned to it be fully commensurate with its great needs and great potentialities. We append herewith a letter sponsored by our committee and widely published in the press throughout the country in support of the McCormack-Martin and Douglas-Taft bills to authorize a $150,000,000 grant-in-aid to Israel. It seems to us fitting and proper that the yardstick of great need be applied as well to the grants to be assigned to the Arab countries and the resettlement of the Palestine-Arab refugees. The sensitive and troubled area of the Arab lands needs large-scale irrigation and reconstruction programs, which alone can raise the standard of living of their depressed masses and insure stability and peaceful development. As the Clapp Commission has pointed out, the solution of the Palestine-Arab refugee problem can best be worked out in conjunction with the execution of needed public-works projects in the Arab countries. We have been deeply moved by the plight of the refugees which many of us have seen and studied at first hand and which seems to us particularly tragic because it need not have been and was not desired nor caused by the new State of Israel. The passage of time and the changes it has effected has made repatriation of the refugees so difficult that it is almost impossible and far from desirable. We believe with the United Nations Conciliation Commission for Palestine that, "having the best interests of the refugees themselves in mind," we must concentrate on the resettlement of the refugees in the Arab countries. We cannot overemphasize how great a contribution to Middle East peace and stability will be made by successful resettlement along these lines. We trust that out of your deliberations there will emerge an adequate program of American aid to the Middle East as a whole, to the Arab refugees, and to the dynamic new democracy of Israel in particular. Respectfully, Dr. HENRY A. ATKINSON, Honorary Chairman. Rev. Dr. DANIEL A. POLING, Cochairman. Dr. SAMUEL GUY INMAN, Vice Chairman. Dr. CARL HERMANN Voss, Chairman, Executive Council. STATEMENT OF GEORGE D. RILEY, MEMBER, NATIONAL LEGISLATIVE COMMITTEE, AMERICAN FEDERATION OF LABOR It is not the intention of the American Federation of Labor to bring to the joint discussion between the Committees on Foreign Relations and Armed Services any testimony as to the necessity for the construction of the St. Lawrence Seaway. The American Federation of Labor does not believe that this subject is pertinent to the main issues of the hearing. However, inasmuch as it has suggested that the construction of the seaway be included in the proposed ECA legislation, the American Federation of Labor desires that it be known. your two committees declined to include in the legislation any reference to the seaway and that, further, the Committees opposed any effort on the floor of the Senate to introduce the seaway as a fit topic for consideration. We wish to take this opportunity, for the information of the newer Members of the Senate, who may not already be acquainted with the tradițional and historical position of the American Federation of Labor, to restate our stand. We have opposed and continue to oppose construction of the St. Lawrence project. Other committees have full and complete hearings on the reasons for our withholding support from this enterprise. The Honorable TOM CONNALLY, SAN FRANCISCO, CALIF., August 12, 1951. Chairman, Foreign Relations Committee, United States Senate, Washington, D. C. MY DEAR SENATOR CONNALLY: I appreciated receiving a telegram from Mr. C. C. O'Day, clerk of the committee, advising in respect to the mutual security legislation that "in view of the desire to expedite consideration of the bill and in view of the fact that the House committee has held extensive hearings, it would not be possible to hear witnesses other than Government representatives", and inviting me to submit a statement. In view of the fact that absence from the city prevented my appearing at the assigned time for hearings before the House committee, it will be greatly appreciated if this letter may be inserted in the record. Thus far, in the consideration of foreign aid legislation from the adoption of the ECA Act to the present time, your committee has been too unaware of a powerful instrumentality which could have been more fully utilized in aid of American foreign policy. I refer to American private enterprise which more than any other force in economic history has carried industrial production to its highest peak of achievement. Without losing sight of aspects of private industrial operations which have needed and will continue to need regulation by law in the interests of general welfare, it nevertheless can be accurately said that the highest material achievement of contemporary American civilization is the solution of the problems of production. American production won both World Wars, in the final analysis. Russian realism recognizes this factor, as reflected by Joe Stalin's quiet toast at Tehran "To American Production". It is respectfully submitted to your committee, that legislation to date has not made a sufficiently clear distinction between what the Government is capable of doing by way of improving world living conditions, increasing employment, and developing mutual trade and prosperity as the permanent barrier to totalitarian communism, and that which the forces of individual initiative can accomplish in developing these same conditions. Government-to-government loans and grants have dominated the scene, subsidizing nationalization of industry, at points in the world picture where it was failing of its own sheer incapacity and weakness in the testing ground of experience. This is not a drive against nationalization, which has its place in the sphere of economics as we ourselves well know in this country from experience with public 'power in undertaking tasks and creating an abundance of energy where the basic construction had been too great for private enterprise in the past, but the object is to focus your attention on the essential fact that individual liberty is indissolubly linked with the preservation of private initiative and enterprise. Even in countries which are popularly and somewhat erroneously referred to as those in which nationalization has swept the land-England and France—it is conceded in almost all circles that the great mass of production is achieved by private management, variously estimated in England and France (depending upon whether one uses employment, quantity of goods, or dollar value as bases for determining production) at 65 to 85 percent of annual production. This is in spite of nationalization af a number of industries. Thousands of industries in private management from the smallest to the largest, in the countries which we have aided, have cried out for individual help and collaboration in the form of technical know-how, machine tools, and technological equipment and capital, but these are to a very large extent voices crying in the wilderness where the atmosphere created by government-togovernment loans and grants gives all the breaks to nationalized industry. If your investigation of our foreign-aid operations went into sufficient detail abroad (where the American public cannot actually see what happens and no American press is available to turn the searchlight on these operations) you would find that wherever it came to a choice in the allocation of field materials and valued equipment between a nationalized industry and a private industry, the Government employees who made the decision abroad for a country receiving our aid, would, of course, give the preference to their own government operation. I do not deny the fact that enormous aid has sifted down to the private industrial level to the great benefit of the economic life of each country, but I do deny that the natural instrumentality of increasing industrial production abroad has been utilized to a measurable extent commensurate with its true powers, and I deny that Government employees of the State Department, ECA, or any other organization which can be devised, can ever achieve production in the foreign field no matter how good their intention or how much of the taxpayers' money they spend. This statement may definitely be qualied in certain fields of activity where the Government does possess the know-how, such as the fields of soil conservation, forestry, game and wildlife, animal husbandry, customs and tax-collection methods, Federal Reserve operations, Coast and Geodetic Survey, to a limited extent geological and mining surveys, analyses of national resources, public health, sanitation, irrigation, and school management. Staffs and techniques in these and other fields peculiar to Government experience are indeed available for technological aid, but in the field of industrial production it can be said almost without qualication that not one man can be produced capable of starting an industry, developing an assembly line, and really turning out the goods. Even the employment of experts borrowed from industry and operating on the end of a string pulled by someone in the State Department cannot possibly achieve the creaton of an industry abroad, and too often the appointment boils down to the employment of a friend of someone having the employing power to go abroad on an interesting junket, full of hope and inspiration and desire to help the world. Washington is full of excellent surveys of all of these varying conditions abroad which could be improved by production and employment. The world has been dressed and undressed in recent years until we really know all about it, but the situation is a little like that at one of the big prospective dams so desperately needed in India. The dam has been dedicated twice at great public ceremonies but not 1 yard of earth has been moved. Communism creeps into the frustration which follows failure. Only in one small section of the Economic Cooperation Administration Act has there been any serious effort to channelize the power and know-how of private production in the United States in aid of the hopes and aspirations of desperate humanity in areas of the world where a pitiably small amount of foods and world goods would change the whole way of life and, above all, give hope and something to look forward to. I refer to the guaranty clause of the Economic Cooperation Administration Act (22 U. S. C. 1509 (b)) in which the Government offers a guaranty against the inconvertibility of the investment and against confiscation and seizure. The theory of the guaranty clause, broadly speaking, is that if certain political risks in a world in revolution are assumed by the United States Government (in conjunction with concommitant commitments in bilateral treaties or other unilateral undertakings by a foreign government receiving the benefit of the investment), industry and private sources of capital can and would assume an increasingly heavier proportion of the workload abroad in establishing successful industries in partnership or collaboration with nationals of the other countries. Private enterprise works on the incentive basis, for which the world has not yet found a successful substitute, and the incentives are lacking if the investment cannot be recovered in the currency of this land; also, the political risks are frequently too great and no private board of directors will ordinarily vote the stockholders' money for utilization in an area of known risks where the return from the investment is obviously greatly imperiled. To relieve the investor of those risks, which lie properly in the realm of American foreign policy as a burden of organized society seeking to entrench and reinforce the free way of life abroad, is the objective of the guaranty clause. Your committee gave its rather reluctant approval in the last Congress by adding protection against the risk of "confiscation and seizure." Twice the House of Representatives passed an adequate guaranty clause to give industry a serious and impressive invitation to participate in the struggle on this world battle line, but your committee rejected the thoughtful and studied work of the House Foreign Affairs Committee as adopted by the House of Representatives on April 12, 1949, and March 31, 1950. A purely experimental sum of $250,000,000 is authorized, while billions have been freely voted to the government-to-government lending and granting program. It would seem that we do not trust the very instrumentality which has created the greatest wealth in the economic history of the world and that we are reluctant or afraid to do for others what England, France, Germany, Holland, and Italy did for us when we were an undeveloped country 150 years ago, by investing their capital, know-how, and techniques in this wilderness and launching us on a program which Yankee inventive genius carried far beyond the achievements of the mother and father of the industrial revolution-England. This is an appeal to your committee to see that the principles of the guaranty are written fully and plainly and generously into your new legislation as an open invitation to industry to bring its full powers and knowledge to bear upon the problem of creating world production. This is an appeal to recognize that the struggle is on in varying countries for these same objectives. I attach a copy of an address which I made to the International Bar Association in London last July, primarily to illustrate this point and because of the sources and documentation cited in this article. The gains on our side are greater than we realize, ranging from the failure of state socialism in Yugoslavia to the complete repudiation of nationalization at the last general election in Turkey and a frank and avowed turning back to private initiative and enterprise as the only instrumentality which can explore and develop the vast resources of that splendid country which for generations has stood as a bulwark against Russia and now is one of the most fearless spearheads directed at totalitarian communism. May I refer also to my prior testimony on this subject before various committees of the House and the Senate as follows: Hearings before Senate Foreign Relations Committee, Eightieth Congress, second session, pages 1080-1101 (1948). House Foreign Affairs Committee, Eighty-first Congress, first session, pages 631-670 (1949). Senate Banking and Currency Committee, Eighty-first Congress, first session, page 75 (1949). House Banking and Currency Committee, Eighty-first Congress, first session, page 83 (1949). House Foreign Affairs Committee, Eighty-first Congress, second session (1950). Senate Foreign Relations Committee, Eighty-first Congress, second session, page 73 (1950). See also addresses by the writer in this field: Canada, United States, and Marshall Plan, delivered at the midwinter section of the Canadian Bar Association at London, Ontario, January 1948. |