Why Point Four Fails

The Government's Point Four program to develop the economies of backward na tions with private capital has been a flop.

So George A. Sloan, chairman of the U.S.

Council of the International Chamber of Commerce, told San Francisco's Commonwealth Club of California last week.

The U.S. Government's grants and loans abroad have increased, said Sloan, from $40 million in 1939 to an accumulative total of $13.7 billion. But private in vestment is dwindling. In 1951's first nine months it was $583 million, little more than half of the amount in the corresponding period in 1950.

Point Four has failed, said Sloan, because the Government has failed to restrict its grants to those nations which will guarantee U.S. private capital against confiscation or unfair treatment. "Because no such declaration has been made," said Sloan, "many foreign governments have been looking on U.S. Government funds as a substitute for private American capital [and] are showing great reluctance to remove the obstacles to effective and sound economic developments." Though businessmen are willing to accept legitimate risks, they are not prepared to accept "illadvised steps of confiscation, nationalization and general suppression of private efforts . . . We are not willing to accept . . . risks created by arbitrary action by foreign governments in the form of administrative decrees and procedures . . . and unreasonable controls." Until this "grudging or outright hostile" attitude is changed, said Sloan, Point Four will remain little but a dream.

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