Evening star., 1955-01-10

abroad, especially to the under
developed areas, could contrib
ute much to the expansion of
two way international trade.
The underdeyeloped countries
would thus be enabled more cas-
lily to acquire the capital equip
ment so badly needed by them
to achieve sound economic
growth and higher living stand
ards. This would do much TO
offset the false but alluring
promises Of the Communists.
To facilitate the investment
OF capital abroad ! recommend
enactment Of legislation provid-
ing for taxation of business in-I
come from foreign subsidiaries
or branches at q rate fourteen
percentage points lower than
the corporate rate on domestic
income. and q deferral Of tax
on income Of foreign branches
until it is removed from the
country where it is earned.
propose also to explore the
further use Of tax treaties with
the possible recognition of tax
concessions = made to foreign
capital by other countries. Under
proper safeguards, credit could
be given for foreign income
taxes which are waived for an
initial limited period. as we now
grant credit for taxes which are
imposed. This would give maxi
mum effectiveness to foreign tax
laws designed to encourage new
enterprises.
World Bank Afiiliate.
AS q further step to stimulate
investment abroad, ! recon-
mend approval, by the Congress
at the appropriate time of MEM
bership in the proposed Inter-
national Finance Corporation,
which will be afiiliated with the
International Bank for Recon-
struction and DEVELOPMENT. This
corporation will be, designed to
increase private investment in
less developed countries by max
ing loans without Government
guarantees. Although the Cor
poration will not purchase stock,
1t will provide venture capital
through investing in debentures
and similar obligations. It's OPP
GRAFTON win cover a field not
dealt with by an existing insti-
tuition.
The executive branch will con-
tinue through our diplomatic
representatives abroad to encqur-
age a climate favorable to the
private enterprise concept in in
vestment.
We shall continue to seek
other new ways to enlarge the
outward flow of capital.
1t must be recognized, however,
that when American private
capital moves abroad it properly
expects to bring home its fair
reward. This can only be ac-
complished in the last analysis
by our willingness to purchase
more goods and services from
abroad in order to provide the
dollars for these growing remit
tances. This fact Is a further
compelling reason for a fair and
forward looking trade policy on
our part.
TECHNICAL COOPERATION.
The United States has q vast
store Of practical and scientific
know how that is needed in the
underdeveloped areas of the
world. The United States has
a responsibility to make it avail
able. Its flow for peaceful pur-
poses must remain unfettered.
United States participation in
technical cooperation programs
should be carried forward. These
programs should be concerned
with know how rather than large
funds In my budget message
next week, ] shall recommend
that the Congress make avail
able the funds required to sup
port the multilateral technical
cooperation programs OF the
United Nations. The bi-lateral
programs of the United States
should be pressed vigorously.
INTERNATIONAL TRAVEL.
The United States remains
committed to the objective of
freedom of travel throughout the
world. Encouragement given to
travel abroad is extremely i'm
portant both for its cultural and
social Importance in the free
world. and for its economic bene-
fits. Travel abroad by Americans
provides an important source of
dollars for many countries. The
executive branch shall continue
to look for ways Of facilitating
q