THE CHEMICAL WORLD THIS WEEK
we should be encouraging American businessmen to seize the opportunity of the times. ,, Accordingly, he called for passage of the resolutions that would urge the President to "fix a firm date" for terminating the investment control program. The Commerce Department, on the other hand, is strongly opposed to the Tunney resolutions. In a letter to the House Foreign Affairs Committee, the department said that, although the controls may be eased soon, they will not be abolished until the "balance of payments circumstances permit/' Noting the Administration's opposi tion to capital controls, James T. Lynn, the department's general counsel, said that the "unnecessary" resolutions "might create the impres sion that capital controls will be terminated sooner than would be ad visable." Commerce believes that the "over all balance of payments situation has not yet improved to the point where the mandatory investment control program can be immediately abol ished." And, contrary to what Mr. Morton said, Mr. Lynn pointed out that the department does not feel that the program has hurt the U.S. balance of payments position in 1968, or that it will this year. MCA's Gen. G. H. Decker, speaking for some 180 member firms, told the panel that continuing the mandatory controls will adversely affect the bal ance of payments by limiting the potential earning capacity of foreign affiliates and by limiting expansion of the export market for chemicals. He said that because of the investment curbs, U.S. chemical firms are being forced to take certain unsound finan cial actions. These include foreign borrowing at rates higher than in the U.S. U.S. chemical companies have had to curtail overseas acquisition pro grams as well as postpone exploration operations in certain countries because of the curbs, Gen. Decker pointed out. Aside from this, he said, the ex cessive costs and time—clerical, ac counting, financial, and executiverequired to meet the periodic report ing that the controls require, "impose a heavy burden on corporate manage ment and prevent prompt, flexible responses to opportunities in the mar ket place." In addition to the counterproduc tive characteristics of the controls, Gen. Decker noted that insofar as direct investors bid for foreign bor rowing these funds are no longer available to contribute to the U.S. balance of payments. 12 C&EN APRIL 7, 1969
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President Nixon To AID, or not to AID
FOREIGN AID:
If President Nixon goes along with the NPA proposals, which is doubtful, Congress would probably go along with the first two, but any proposal to relieve Congress of detailed control of lending programs would probably be defeated. The changes appraised by the Na tional Security Council, and reportedly favored by the President, are relatively mild. No new agency would be created to handle foreign aid. Development loan funds, the major part of AID's program, would con tinue to be directed by AID. How ever, a larger proportion of these loans may be channeled through multina tional agencies. In addition, in a man ner similar to one of NPA's sugges tions, a new government-supported corporation would run the private overseas investment programs now handled by AID.
Nixon's Time of Decision President Nixon will soon have to de cide what changes, if any, he wants to make in the U.S. foreign aid pro gram to make it more reflective of his administration's philosophy, more efficient and effective, and more pal atable to the Congressional holders of the purse strings. One thing is sure— the President will get plenty of advice from many quarters on what needs to be done. For example, last week the National Planning Association, a pri vate group, issued a report on changes it considers to be badly needed. And a few days earlier the National Se curity Council gave the President its appraisal of an interagency report on a revamped foreign aid program. The NPA proposal is aimed at trans forming the Agency for International Development from a large institution extensively engaged in overseas oper ations into a much smaller organiza tion primarily concerned with policy making and the allocation of funds, part of which would be administered by other agencies. NPA would make these major changes: • Eliminate direct U.S. participation in technical assistance by establish ing an autonomous Technical Assist ance and Development Research In stitute. The institute would function primarily as a clearinghouse and fi nancing agency; it would refer requests for technical services to appropriate institutions and individuals in the U.S. and would finance these projects when other funds were not available. • Create a Private Enterprise De velopment Corp., which, among other things, would take over current AID programs such as investment guaran tees and investment survey programs. • Transfer up to one third of U.S. development assistance funds to the World Bank group.
STRATEGIC STOCKPILE:
U.S. Revises Objectives The Government 11 days ago revised its conventional war objectives for 18 of the 77-odd items in its $4.2 billion stockpile of strategic and critical ma terials. For only four of the 18— rare-earth oxides, natural rubber, tin, and vanadium—are present govern ment stocks below the new target level. One, corundum, now has been removed from the strategic and critical materials list. For two others, the new objectives are the same as the old. For 11 of the 18, the Government
U.S. lowers strategic Material Cobalt (pounds) Corundum (short tons) Kyanite-mullite (short dry tons) Manganese, battery, synthetic dioxide (short dry tons) Mica, muscovite splittings (pounds) Mica, phlogopite splittings (pounds) Quartz crystals (pounds) Quinine (ounces) Rare earths (short dry tons) Rubber, natural (long tons) Shellac (pounds) Talc (short tons) Tin (long tons) Thorium (short tons) Vanadium (short tons) Source: Office of Emergency Preparedness
