have been advanced. So it gives me a great deal of pleasure to reiterate exactly the same position that we took on the Exclusion Act and to say that I think the adoption of this bill would bring about to the highest extent good feeling between the respective peoples involved. The CHAIRMAN. Now, Mr. Celler, that concludes your witnesses? Mr. CELLER. Yes.

I wish to place in the record the following:

An article from the magazine Asia and the Americas, entitled "You Can Do Business With India."

A statement by Clarence K. Streit, author of Union Now.

A statement by Dr. Anup Singh, secretary, National Committee for India's Freedom.

A statement by William D. Pawley, president of the Intercontinent Corporation, New York.

A statement by Mrs. Ina Steele Hutchison.

A statement of the National League of Women Voters.

A letter from V. L. Whitney, director of Socony-Vacuum Oil Co., dated March 1, 1945.

Letter from Edward C. Carter, of the Institute of Pacific Relations, dated March 3, 1945.

Letter from Alexander Silverman, of the University of Pittsburgh, dated March 5, 1945.

Letter from William C. Johnstone, dean of the School of Government, George Washington University, dated March 9, 1945.

Among the 52 countries represented at the International Business Conference at Rye, N. Y., in the closing weeks of 1944, India, along with the United States and the United Kingdom, acted as one of the Big Three of the business world. The total impression created was that you can do business with India. Since the outside world has been doing business with India from time immemorial, this meant that now is the opportunity to do big business with India, a country which aims at jumping up to the third rung from the sixth on the international industrial stepladder.

What happened at Rye, N. Y., then, cannot adequately be understood unless the differing as well as coalescing attitudes of the Big Three are grasped. In a symbolic sense, these three represent three distinct and well-defined outlooks on the post-war economic picture of the world. The United States, Great Britain, and India, respectively, display (1) twentieth-century for ard-looking oneeconomic-world outlook; (2) nineteenth-century, backward-looking imperial preference outlook; (3) both ard-looking outlook of a country belatedly experiencing the coming of (economic) age. To expand these:

1. Increasingly more American businessmen, economists, and Government officials are realizing that the future prosperity of their country depends upon the growth of a prosperous world economy that would provide new and expanding outlets for American goods and capital, so that high levels of production and employment can be maintained. They also recognize that these new outlets could best be insured by the encouragement of free and expanding economies in the colonial areas of Asia, whose consuming power has hitherto been severely restricted by their low standard of living and thwarted industrial development. It is also dawning on them that a deliberately restricted world economy, dividing the peoples as haves and have-nots, will breed strife resulting in future wars.

2. In sharp contrast is the view taken in dominant business sections of England. They seem to feel that the only way Britain can maintain its eminence and security is by staving off Asia's industrialization and by restoring the pre-war colonial system, not only for themselves but also for their satellite empires of France and

1 Krishnalal Shridharani, lecturer on Indian affairs and author of My India, My America, is now writing a novel of modern India and conducting a 2-year survey of India's post-war needs as a research associate in sociology at Columbia University.

the Netherlands. What has been affirmed orally in the House of Commons, both by General Smuts and Anthony Eden, has been committed to print by The Economist (London) of September 16, 1944: "For Britain, and in similar measure for France and Holland, the Far East is a necessity of greatness and wealth."

3. India, fast emerging from a colonial economy and with prospects of great industrial expansion, vacillates between economic internationalism and a temporary industrial nationalism. Although committed to economic internationalism, she craves for certain protection of her nascent industries which alone insured the development of countries now established as advanced.

Armed thus with an insight into the three typical attitudes, we are now prepared to examine what went on in the different sections at Rye.

COMMERCIAL POLICIES

Economic idealism affirms the principle of reciprocity. But, unfortunately; India is not a free agent, even in the economic field, and she has to abide by the arrangements made by an alien authority on her behalf. Consequently India has incurred obligations, commitments, and responsibilities without acquiring corresponding rights and facilities. India has suffered from economic inequities.

Indo-American trade relations clinch the point. Under present conditions, American citizens have full rights and privileges to go to India, to stay there as long as they please, and enter into business as freely and permanently as they desire. They can establish manufacturing plants on the Indian soil, which often receive greater protection than indigenous industries. The other side of the medal does not bear the slightest resemblance to this imprint of free enterprise. The United States immigration policy discriminates against Indians as coming from the debarred zone. Since there is no treaty of commerce and navigation between the United States and India, even bona fide Indian merchants fall in the category of "temporary visitors," and thus are unable to set up permanent establishments. The Indian delegates at Rye pointed out one more difficulty. So long as the United States continues to subsidize its cotton export, and so long as India free to garner similar props, India will remain at a disadvantage. This is important because India is next only to the United States as a cotton producer.

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Americans were not averse to suggestions on these matters, nor were the British interested enough to open their mouths. But the temper and tempo changed with respect to the Indian insistence upon a multilateral trading system. That anyone in this day and age should oppose a system of unrestricted international commerce is unthinkable until it is realized that the British are committed to the policy of imperial preference. This is not a closed-door policy, but it can indeed be described as a back-door policy. There are higher duties on India's imports from the United States than on India's imports from Great Britain. The British delegates, therefore, fought hammer and tongs against India's efforts to get out of the small circle of imperial preference by drawing the larger one of a multilateral trading system. The British outmaneuvered the Americans and thwarted their attempt to get an affirmation of freer trade and open competition. America was thus deprived of the opportunity to do greater business with India, as with other parts of the Empire.

CURRENCY AND EXCHANGE

In the field of currency relations and international exchange, Indian economists have developed a sixth sense. Their mastery over this particular set of problems can be ascribed to the anomalous position of the Indian rupee. For the Indian rupee is a monetary minor, tied to the apron strings of the pound sterling: it cannot directly be computed into American dollars. And by a constant policy of appreciating the exchange value of the rupee, the British Government has followed a course of British betterment to the detriment of Indian interests. For an appreciated rupee means a better opportunity for the British import trade in India, better terms for remitting salaries and profits earned by British officials and businessmen in India.

The sordid rupee-sterling entanglement makes India's membership in the sterling bloc mandatory, imposing unnecessary limitations on India's commerce with countries outside the Empire. There are reports of a further tightening of the bloc. But the plans in influential business circles in England for a post-war commercial policy based upon controlled foreign trade within the sterling bloc would provoke a conflict between the trade policies of the United States and Great Britain.

When an International Monetary Fund was proposed at Bretton Woods, Indian delegates to that conference were jubilant, believing that India's adherence to it would make her membership in the sterling bloc quite voluntary. Emboldened by the creation of such a fund, India may cut loose the rupee from the pound sterling and thus terminate an incompatible marriage.

One would have expected at Rye improvements over Bretton Woods. Instead, a reactionary and retrogressive thought was injected. Mr. Winthrop W. Aldrich, chairman of the Chase National Bank, advocated the "key nation" approach to the stabilization of all currencies, as opposed to the global approach of the Bretton Woods plan for an International Monetary Fund. It was perhaps an appeal that the Communist clarion call should be revised to read: "Bankers of the world, unite. You have nothing to lose but your Keynes." The Indian delegation voiced disagreement on the ground that the Aldrich approach will leave certain countries ìike India and China "to the mercy of either the United States or the United King'dom." The Indian rupee will have two lords instead of one.

India received another set-back in connection with her sterling credits, and this was largely due to British opposition and American indifference. It may be recalled that Great Britain has given to India IOU's to the value of $5,000,000,000. These assets represent, to paraphrase Mr. Churchill, Indian blood, Indian sweat, and Indian tears. The Indians demanded a universal purchasing power for India's sterling assets. By failing to support India's demand, the American delegates overlooked the fact that India would like to spend most of that money in the United States to purchase capital goods.

RAW MATERIALS

Among the oft-suggested economic contributions to world peace is the newfangled slogan of “equal access to raw materials." It is presumed that by some inherent magic this doctrine will eliminate international trade rivalries and curb national greeds. What is forgotten is that only highly industrialized nations propound this doctrine, since it benefits only them and works to the detriment of those who are technologically backward. It is natural for highly industrialized countries to seek to secure raw materials in terms of regularity and security of supplies at cheap prices. But this would not only maintain but also intensify the division between the manufacturer of finished products and the producer of raw materials.

Canada and

China and India opposed the policy of open door to raw materials. India joined hands in behalf of reserving processing industries for the countries which produce the particular raw materials. The particularly strong attitude of India is because she is a producer and consumer as well as an exporter of raw materials. India must have a prior claim on her own raw materials-to process them, to manufacture finished goods out of them, and to sell them in the best and most profitable markets. What the highly industrialized countries would lose by India's industrialization, partially based upon her own raw materials, will be more than compensated by the increased purchases from them made possible by a higher standard of living.

INTERNATIONAL CARTELS

The Indian delegates were the spearhead of the attack on international cartels. Almost alone, they combated an alliance which included Great Britain, Sweden, Brazil, the Netherlands, and several other nations. The result was a draw. For, although certain powerful American interests were inclined to support the British position in favor of cartels as "necessary instruments of assuring orderly marketing," the Indians were basking in the reflected glory of the economic philosophy at present prevalent in the United States administration and Congress. The Subcommittee on War Mobilization of the Senate Military Affairs Committee had already condemned the cartel system. And a Washington dispatch of November 3, 1944, had it that the Interdepartmental Executive Committee on Post-War Economic Planning, headed by Dean Acheson, Assistant Secretary of State, stood firmly against cartels as having "restrictive" influence on international trade.

India's enlightened stand was due to the pressing need to protect its nascent industries and to start new ones. There are several stumbling blocks lying on this path, one of which is the cartel system. For when India attempts to get new plants going, international cartels try to prevent her from securing protective tariffs. And although India academically agrees that tariffs hamper unrestricted flow of commerce, she at present believes that free trade is a luxury only advanced nations can afford. A nation newly on the path of industrialization would

need protective tariffs until it achieves parity with highly industrialized nations. In many instances when Indians succeeded in securing increased tariffs, the cartels have stepped in and set up their own plants. These plants would operate at a loss, which would be absorbed by the parent company. India knows too much.

PRIVATE ENTERPRISES

At least on one issue the Indian financiers stand closer to the British than to the Americans. Rugged individualists as they are, the American businessmen take a definite stand against governmental control and prefer private enterprise to Government enterprise and competing enterprise to monopoly enterprise.

The British, on the other hand, recognize that the post-war policies of some countries may be influenced by their own "economic necessity" to such an extent as to warrant state control without harmful effect on their own national economy. The stand of India is clearer. The so-called Bombay plan, a plan propounded by the industrial and financial tycoons of India themselves, which may evolve into a blueprint for the post-war development of that vast subcontinent, commits India to state control and planned economy for generations to come.

TRANSPORTATION AND COMMUNICATION

The main grievance of India in the field of transportation concerns maritime activities. In spite of a long and proud tradition of shipping and a coast line of nearly 4,000 miles, Indian-owned tonnage comes to a mere 135,000; it represents only 0.24 percent of the total world tonnage. All in all, Indians own 65 ships. Out of a total coastal and overseas trade of nearly $150,000,000 and about 30,000,000 tons of cargo and 3,000,000 passengers carried in every peace year, hardly 5 percent is carried by Indian shipping. Even the coastal trade is dominated by British interests to the extent of 79 percent.

The Indian demand, therefore, is twofold; India's shipping should receive subsidies and such legislative aid as coastal reservation; and international shipping policy should provide room for a national mercantile marine commensurate to India's trade.

INDUSTRIALIZATION OF NEW AREAS

That India should support the thesis that the industrialization of new areas would foster world prosperity by increasing the purchasing power of those peoples who now live on a mere subsistence level was a foregone conclusion. The poverty of Indian masses is largely due to the lopsided economy fostered by alien rulers who have looked upon India merely as a consumers' market. While only 10 percent of India's population is supported by industry, around 83 percent of the people eke out a precarious living from the soil.

There are plans now before India which envisage trebling her national wealth within 15 years by rapid but state-directed industrialization. In this process, India can be aided by an enlightened policy on the part of the more advanced countries like the United States and the United Kingdom. They can supply India, as any other industrially virgin or semivirgin area, with machinery, equipment, and the technical know-how. In return, India can provide a market for the capital goods of such countries as the United States. which has gone through an abnormal expansion due to the war. India can also provide employment for thousands of American engineers and technicians in a post-war era when the United States will be facing an acute challenge of rehabilitation.

America's commercial frontiers can still be on the Ganges. It would be to the advantage, therefore, of both Indian and American businessmen if a catalog of American engineering and industry should be prepared by Indian representatives, governmental or lay, following closely the lines of the one now being prepared by Russian representatives in New York, for the use of purchasing agencies in Russia. Such a venture will pay its way, as the Russian experience shows; American companies have taken $250,000 worth of advertising in it at $200 a page. Advertisements of consumers' goods should be discouraged, since India's needs lie in capital goods.

FOREIGN INVESTMENTS

Since the United States is the world's leading creditor Nation, the protection of post-war loans and foreign investments is of vital interest to American businessmen. Although some of these seemed often to feel lost in the stratosphere of what they considered unbelievable requests, most Americans at Rye regarded it to be

to America's own enlightened interest to give a "leg up" to those foreign economies which are either devastated by the war or are industrially retarded because of their colonial status.

Here it is that Anglo-American post-war relations would be skating on the thinnest ice. India's position, on the other hand, is a happy one. India, too, is a creditor nation, one of the very few creditor nations. Most of India's industrial expansion will be carried by her national weath in terms of men and natural resources, which will be augmented by hoarded wealth of the country, mainly gold; sterling credits in Englnad; favorable balance of trade; savings of the people; new money created against ad hoc securities.

Within that little margin which still will remain for foreign borrowing, India can afford to be choosy. Her preference will be for long-term intergovernmental loans. Her second preference would be for private loans, foreigners supplying 35 percent of the capital, with Indians furnishing 65 percent. Indian businessmen would go so far as to accept 49-51 ratio, but they would like to retain control of management in their own hands. In other words, foreign capital should be totally devoid of political influence. On this point India is peculiarly sensitive. It was heartening, therefore, to see American businessmen at Rye gradually emerging out of their "management complex.'

In fact, American business has no ground to feel that foreign capital will be discriminated against in India. Rather, the process has been a struggle to remove the special advantages it has enjoyed. Foreign companies were exempt from taxation in India, and only lately has taxation on a reciprocal basis been permitted.

Foreign investors, especially American, should be satisfied to cooperate on terms of bilateral agreements based upon nondiscrimination. For the idea of moving and muscling in is to be discarded once and for all. No industry is likely to be established in India except under a license. In the granting of such licenses to foreign companies. the degree to which there is a genuine Indian participation will be a prime determinant.

American businessmen need not fear the emergence of India or, for that matter, that of any other country hitherto agrarian, as an exporting rival. Even in the case of Russia, which is much more advanced than India industrially and shows much less concern for the improvement of the standard of living of its people, both Donald Nelson and Eric Johnston have brought back a feeling that the Soviets could not normally become an exporting competitor in the world market for at least two decades. What American businessmen must really concern themselves with are the opportunities to be given to foreign lands to repay in terms of needed goods and materials; for a country's main economic benefit from trade is through its imports, popular prejudice to the contrary notwithstanding. Once the matter of repayment has been provided for, the twentieth century economic doctrine of enlightened self-interest should inspire the United States, the world's No. 1 creditor nation, not so much to count the percent of return it receives on its foreign capital outlays as to see to it that the capital is wisely used by the borrowers for the creation of a brave new world in which to live and work without fear of wars. For a mansion sits uneasily in a slum.

STATEMENT BY CLARENCE K. STREIT, AUTHOR OF "UNION Now," TO THE HOUSE COMMITTEE ON IMMIGRATION AND NATURALIZATION, MARCH 7, 1945

I speak as a private American citizen, the author of Union Now, on behalf of hundreds of thousands who have read that book.

I support wholeheartedly H. R. 173 and H. R. 1584, and I trust the House will not delay to do this act of simple justice to the people of India.

To me it is a matter of very high importance that our American Union, which began as the first great champion of the principle, "all men are created equal," should not discriminate against any people because of the accident of birth, as we are doing now against the people of India. Perhaps I can best show how deeply I feel on this question by quoting what I wrote in 1938 in Union Now, page 80, in comparing two systems, the Nazi and the Communist, both of which I abhor: "Nazi Germany holds all Germans to be equal, but not all men; it holds those born German superior to others, particularly to those born with any Jewish blood. Soviet Russia draws no national, race, color, or sex line; where it discriminates among men it is always because of things they have acquired, such as ideas or property, and never, in principle, because of the accident of birth.