I feel quite confident that you cannot get congressional approval of anything that would allow our control of fissionable materials or what we intend to do about fissionable materials, or as far as that goes, to the other matters mentioned in article C of article 59, to be referred to any one other than ourselves for decision.

Mr. PHILLIPS. I would like to put in a memorandum on that if I might.

The CHAIRMAN. Yes.

(The memorandum appears as exhibit XIV.)

The CHAIRMAN. Have you any further comments you wish to make? Mr. PHILLIPS. No, sir.

The CHAIRMAN. I am sorry to have made it necessary for you to come back for such a short session.

Mr. PHILLIPS. That is all right.

The CHAIRMAN. Thank you very much, Doctor.

Mr. PHILLIPS. Yes, sir; thank you, sir.

Mr. Stinebower will be the next witness.

The CHAIRMAN. Will you take the chair, please, and give the reporter your full name, your residence, and your occupation, and some background on yourself?

STATEMENT OF LEROY D. STINEBOWER, SPECIAL ASSISTANT TO THE ASSISTANT SECRETARY FOR ECONOMIC AFFAIRS, STATE DEPARTMENT, WASHINGTON, D. C.; ACCOMPANIED BY JOHN M. LEDDY, ADVISER, DIVISION OF COMMERCIAL POLICY, STATE DEPARTMENT, WASHINGTON, D. C., AND EDMUND H. KELLOGG, DIVISION OF INTERNATIONAL ORGANIZATION AFFAIRS, STATE DEPARTMENT, WASHINGTON, D. C.

Mr. STINEBOWER. Leroy D. Stinebower. My residence is Washington. I am special assistant to the Assistant Secretary of State for Economic Affairs. My background is very largely in the Department of State. After college and graduate school and 3 years of teaching I came to the Department of State in 1934 in the Economic Adviser's Office and have been there in one of the economic offices ever since.

The CHAIRMAN. What schools did you graduate from?

Mr. STINEBOWER. Kalamazoo College in Michigan, and the University of Chicago.

The CHAIRMAN. What degrees did you get from the University of Michigan?

Mr. STINEBOWER. Master's degree in 1927.

The CHAIRMAN. And then you taught where?

Mr. STINEBOWER. At Allegheny College from 1928 to 1931.
The CHAIRMAN. What subject did you teach?

Mr. STINEBOWER. In the department of economics, and in a small school you teach most of the subjects in economics.

The CHAIRMAN. Did you specialize in economics in college?

Mr. STINEBOWER. Yes; in the latter part of my graduate work at the University of Chicago I specialized in international economic relations.

The CHAIRMAN (reading):

CHAPTER VIII. ORGANIZATION

SECTION A. FUNCTIONS AND STRUCTURE OF THE ORGANIZATION

ARTICLE 61. FUNCTIONS

In addition to the functions provided for elsewhere in this Charter, the Organization shall have the following functions:

(a) to collect, analyze, and publish information relating to international trade, including information relating to commercial policy, business practices, commodity problems, and industrial and general economic development;

(b) to facilitate consultation among Members on all questions relating to the provisions of this Charter and to provide for the settlement of disputes growing out of the provisions of the Charter;

That last

to provide for the settlement of disputes growing out of the provisions of the Charter

is rather broad. I am wondering whether it could be construed as supplanting the operation of judicial machinery in the member countries, or to put it in another way: Is that a method of saying that all disputes growing out of this charter are to be settled by the Organization?

Mr. STINEBOWER. It is my understanding that it is merely listing, among the functions of the Organization, a function which is more specifically provided for under article 86.

The CHAIRMAN. In other words, you do not construe it as ousting the possibility of domestic judicial settlement?

Mr. STINEBOWER. No, sir; I interpret it as no broader than article 86. The CHAIRMAN (reading):

(c) to make recommendations for, and promote international agreement on measures designed to improve the bases of trade and to assure just and equitable treatment for the enterprises, skills, capital, arts, and technology brought from one country to another, including agreement on the treatment of foreign nationals and enterprises, on the treatment of commercial travellers, of commercial arbitration and on the avoidance of double taxation

I doubt whether anyone would quarrel with those matters as ends. Have you gone into this further than merely to state a hope? Have you thought of specific measures for better protecting the nationals of one member in the territory of another?

Mr. STINEBOWER. The various departments have been giving, for a considerable period of time, a good deal of attention to questions arising in this general field. Both in connection with the clauses of commercial treaties, and in connection with the trade agreements that we have negotiated, and as a separate item.

In addition, the International Chamber of Commerce has very recently concluded a very comprehensive draft of what they call a Code of International Investment, and nearly all of these subjects also have a fairly long history of international discussion, in no small part under the League of Nations, and in such private organizations as the International Chamber of Commerce.

The purpose, as I understand it, for putting the article in the charter in this form is that these are subjects with a long and complicated history. It is not practicable to try to write them all out in detail. before the charter is complete, and it would be probably very difficult to get full international agreement in time to conclude an agreement of this sort, but the International Trade Organization should be a

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body for the continuing study of these problems, with a view to getting international agreement in these fields.

The CHAIRMAN. It seems to me that we have several of those objectives which become especially important if we are to go ahead and use American capital for extensive investment abroad. I doubt whether you will have very much of that unless those who do the investing have reasonable assurance that their investments and their persons and the persons of their employees will be given decent

treatment.

Mr. STINEBOWER. It is a matter that has been very much in the mind of the executive branch of the Government for quite a number of months and years, for that matter.

The CHAIRMAN. Do other nations seem impressed with the necessity for getting into a code of that kind?

Mr. STINEBOWER. Yes, sir; in the Economic and Social Council of the United Nations, there is a Subcommission on Economic Development, one of whose tasks is to look into the problem of an international code of investment.

The CHAIRMAN (reading):

(d) generally to consult with and make recommendations and, as necessary, furnish advice and assistance to Members regarding any matter relating to the purposes or the operation of this Charter, and to perform any other function appropriate to the purposes and provisions of this Charter

As to the word "assistance" in the third line, what kind of assistance is contemplated?

Mr. STINEBOWER. That would generally be technical assistance, sir, particularly the kind of assistance that is contemplated in article 11, paragraph 2, in which, at the request of a member government, the Organization may, within the limits of its resources and its competense, assist governments who apply to it to locate technicians, experts, and advise them on problems of their economic development. It might, on accasion, be an application for a statistical expert to help them improve their statistical reporting services, so that the Organization may carry on its functions under paragraph (a) above in this article.

The CHAIRMAN. As you picture the Organization, will it be equipped with a pool of technicians available for assignment here and there?

Mr. STINEBOWER. Its staff might well include a few technicians of a general character, but if the request were for specialized experts, shall I say, in the engineering field, certainly we would not contemplate that they would be on the Organization's pay roll.

The Organization might assist a member government in locating such experts, and it would be for the member and the Organization to work out methods of bearing the financial cost involved.

Presumably, in those cases, the member receiving the assistance would bear most of the cost.

The Organization's service would have been to help them locate the advice.

The CHAIRMAN. The Organization would act in a sort of liaison capacity?

Mr. STINEBOWER. Yes.

The CHAIRMAN. And to do it intelligently would require some technical staff.

Mr. STINEBOWER. Yes.

The CHAIRMAN. But you do not picture the Organization as maintaining a pool of experts available for assignment?

Mr. STINEBOWER. No, sir.

The CHAIRMAN. Do you consider that the Organization will have a pool of money available for assignment here and there?

Mr. STINEBOWER. No, sir; that, of course, would develop with experience, but my understanding of the purpose of the article is not to invade the functions of organizations such as the International Bank, or private financial arrangements, or any other international or intergovernmental ararngements that would finance expensive projects. This organization is not designed to get into that field but rather to assist in the furnishing of advice.

The CHAIRMAN. The last part of subclause (d) has some very large language.

It says [reading]:

to perform any other function appropriate to the purposes and provisions of this Charter.

What are the limitations on that? That is completely wide open. Mr. STINEBOWER. Well, the principal limitation, of course, is the provisions of the Charter.

The CHAIRMAN. Well, it goes beyond that. The key words are: "the purposes and provisions of this Charter," and it is "any function appropriate" to those purposes and provisions.

It seems to me that is as wide as the world.

Mr. STINEBOWER. I suppose that one answer, in addition to the limitation of the Charter itself, is the obvious limitations of budetary opportunity and budgetary availabilities.

These organizations, specialized organzations of this kind, have not, by and large, had enormous budgets. The opportunity to perform functions of a very wide character would require both approval of the Director General and the Executive Board, and in appropriate cases, the Conference itself, and in all cases, the Conference itself, when it came to the approving of the budget of the Organization.

The CHAIRMAN. Well, I am not sure I would discount your answer entirely holding out as it does a possibility of some relief against the open-end character of those words. But I doubt whether that is a completely sound way to determine what you wish to do or what the words

mean.

Your answer says that it does not make much difference what these words mean, because, in the end, money will have to be spent, and some one is going to have to approve the spending of the money.

I suggest that that is not a very sound rule of interpretation.

Mr. STINEBOWER. Pardon me, Senator; I did not mean to limit my reply to the budgetary aspects. I merely pointed out that the Conference, itself, would, in all cases, have the responsibility of passing on the budgetary aspects.

The CHAIRMAN. Yes.

Mr. STINEBOWER. But in addition, the Director General, who would undertake the administrative responsibilities for performing the services in the first instance, is subject to the review of the Executive Board and of the Conference.

So with most of the projects, if we were thinking of an excessively enthusiastic Director General, who wanted to go beyond reasonable bounds, he would have to check with two representative and executive bodies. If I may point out, it is a provision that is very similar to a provision in the constitution of the Food and Agricultural Organization which, in article 1, paragraph 3 (c) provides that it

shall also be the function of the Organization—

and that is the Food and Agricultural Organization—

generally to take all necessary and appropriate action to implement the purposes of the Organization as set forth in the preamble.

The CHAIRMAN. Well, that merely points me to an additional ambiguity.

Mr. STINEBOWER. It is a kind of blanket clause intended not to make the previous entirely limiting.

The CHAIRMAN. What it say is:

* * *

in addition to the functions provided for elsewhere in this Charter, the Organization shall have the following functions to perform any other function appropriate to the purposes and provisions of this Charter

That is completely without dimension. That is in addition to the functions provided elsewhere in the charter.

Mr. STINEBOWER. On that point, may I reply that the original United States draft on this article attempted to comb through the charter and relist here in this article, all of the functions of the Organ

ization.

In the process of discussion, there were a great many delegations which felt there were difficulties of attempting to repeat; small variations of language between articles might give rise to differing interpre

tation as to what the function was.

So, it was preferred to allow the chapters IV, V, VI, and VII to stand for themselves as to the functions of the Organization and here only to gather together the general functions of the Organization

The complete listing of the Organizations ended up, then, with a basket type of clause of this character.

The CHAIRMAN. You have spelled out many functions and you have spelled out the conditions under which they come into being or operate, but here you say, "in addition" to those, to do anything that is "appropriate to the purposes and provisions of this charter."

That gains heightened importance, when we keep in mind, and we should keep it in mind all the way through here, that the United States does not have a weighted vote on the Conference or on the Executive Board.

Do you wish to make any further comments on that?

Mr. STINEBOWER. No; I have no further comments.

The CHAIRMAN. Does the State Department favor that language? Mr. STINEBOWER. It has been in from our earliest draft in substantially that form.

The CHAIRMAN. It originated as a State Department viewpoint and as a State Department Draft?

Mr. STINEBOWER. May I just check it?

Yes; the original language was substantially the same.

The CHAIRMAN. And in your opinion it continues to be State Department policy?