Strategy for the War

How can the U.S. counterattack the Soviet trade offensive? Seeking a strategy, President Eisenhower last year picked a blue-chip team of U.S. capitalists, headed by President Harold Boeschenstein of Owens-Corning Fiberglas Corp.* Last week the committee reported that the real cold-war economic challenge is to stimulate the export of more U.S. products, capital and know-how to all nations. It suggested a step-up in U.S. nonstrategic trade with the Soviet bloc, arguing that "if additional consumption of consumer goods could be stimulated, the result might be to produce pressures within the bloc, tending to divert resources from war potential to consumer goods." That would alsocompel the Red bloc to sell at home many of the consumer goods that it now exports in competition with Western businessmen.

To block the Soviets, said the report, "it is of the utmost importance that new and greater use be made of the resources and initiative of private enterprise." Its recommendations:

P: The U.S., instead of "giving money to a foreign government to build a project," should hire a private U.S. operator to do the job. The U.S. should also establish an Office of Private Participation, manned by businessmen and Government career men who would "plan for the maximum use of private capital resources on each project and in each country program."

P: Trustbusters should ease up their scrutiny of deals which "are important to the Foreign Aid Program." A U.S. company should be able to make a deal with a foreign firm, get approval from the State and Justice Departments and then feel confident that the trustbusters will not come chasing ten years later, hollering monopoly or cartel.

1/2 The Treasury should 1) cut the 52% corporate tax on profits abroad to the 7.8% rate for intercorporate dividends, and 2) collect the tax only when the profits are transferred to the U.S.

Though the Treasury has long opposed such cuts, it is beginning to heed the rising chorus from businessmen that a tax slash would actually benefit the budget by reducing the need for foreign aid. Last week the Treasury was actively considering some tax concessions to spur foreign investment.

* Other members: J. P. Morgan & Co. Chairman Henry C. Alexander; National Cash Register Chairman Stanley C. Allyn; Bechtel Corp. President S. D. Bechtel; Standard Oil of Calif. Chairman R. G. Follis; Standard Oil (N.J.) Chairman Eugene Holman; General Electric Finance Committee Chairman Philip D. Reed; CBS President Frank Stanton; International Packers Ltd. Chairman A. Thomas Taylor.

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