¹ The corollary hypothesis is omitted for empirical reasons: on this issue there were only minor divisions within the Executive Branch.

² This problem persists, see US, House, Committee on Foreign Affairs, Hearings on Overseas Private Investment Corporation, 93rd Cong., 2d sess., 1974, p. 35Google Scholar.

³ Hopkinson, Edward and Machold, William, “The Development of the Marshall Plan,” unpublished paper (12 31, 1947)Google Scholar, in Aldrich, Papers, Correspondence File 11, Box 140, File “President's Committee for Financing Foreign Trade 1948,” p. 3, Baker Library, Harvard Graduate School of Business Administration, Boston, MassachusettsGoogle Scholar.

⁴ Ibid.

⁵ President's Committee for Financing Foreign Trade, Draft Minutes of Meeting, January 29, 1948, in Aldrich, Papers, Correspondence File 11, Box 139, File “President's Committee for Financing Foreign Trade, Minutes 1946–1948,” p. 3, Baker LibraryGoogle Scholar.

⁶ The most accessible record of these concerns is Congressional testimony. Many examples could be cited: the 1948 House Foreign Affairs Committee hearings on the post-war recovery program; the 1949 House Banking Committee hearings on the Export-Import Bank; the 1949 House Foreign Affairs Committee hearings on the extension of the European Recovery Program; plus a number of other House and Senate hearings.

In addition, most major business associations published special reports covering the European Recovery Program or Point IV. See, for example, the CED, An American Program of European Economic Cooperation (1948)Google Scholar; the Chamber of Commerce of the United States, The Point Four Program (1949)Google Scholar; the NAM, The Bold New Plan (1949)Google Scholar; the National Foreign Trade Council, Private Enterprise and the Point IV Program (1949)Google Scholar, plus the NFTC convention reports and recommendations; the United States Council of the International Chamber of Commerce, Intelligent International Investment (1949)Google Scholar; etc.

⁷ Until OPIC was passed in 1969, the guaranty program was administered by various foreign aid agencies. As the focus of aid shifted from Europe to underdeveloped countries, the focus of guaranty insurance also changed. By 1959, it was limited to underdeveloped countries.

⁸ The treaties had a simple purpose. If the US government paid an insurance claim, then it received the company's title to the impounded currency or expropriated investment just as a regular insurance company would. The treaty was designed to clarify the US government's legal right to hold that title and to negotiate compensation for its holdings.

⁹ The laws are the Economic Cooperation Act of 1948, 62 Stat. 144–145 (1948); Economic Cooperation Act of 1949, 63 Stat. 51–52(1949); Economic Cooperation Act of 1950, 64 Stat. 198–199(1950); Mutual Security Act of 1951,65 Stat. 384 (1951).

¹⁰ US, Congress, House, Committee on Foreign Affairs, Hearings on the Mutual Security Act of 1954, 83rd Cong., 2nd sess., 1954, p. 1196Google Scholar.

¹¹ The NFTC still did not favor the program officially, but it did listen without objection as an aid official explained the program's virtues to the 1958 convention. The ensuing discussion was about practical, day-to-day issues rather than larger objections to the program. See NFTC, 45th National Foreign Trade Convention, 1958 (New York: NFTC, 1959), 230ffGoogle Scholar.

¹² United States Chamber of Commerce, Spotlight on Foreign Aid (Washington: Chamber of Commerce, n.d. [probably 1958]), 21–22Google Scholar. Contrast, id., The Point Four Program (1949), 15–16.

¹³ Many of the panels have similar titles and most are referred to by the name of their chairmen: Paley, Randall, Johnson, Fairless, Boeschenstein, and Wriston. In addition, individual studies were done by Gray, Rockefeller, Grace, and Straus on similar topics, usually at the President's request.

¹⁴ US, President, Special Assistant to the President, Report to the President on Foreign Economic Policies (1950) [Gray Report], 62.

¹⁵ US, President's Materials Policy Commission, Resources For Freedom, 5 vols. (1952)Google Scholar [Paley Report], 1:69.

¹⁶ US, International Development Advisory Board, An Economic Program for the Americas (1954)Google Scholar, [Grace Report].

¹⁷ US, Commission on Foreign Economic Policy, Staff Papers Presented to the Commission (1954)Google Scholar [Randall Commission], 126; id., Report to the President and Congress, 23.

¹⁸ US, Department of State, Special Consultant to the Under Secretary of State for Economic Affairs, Expanding Private Investment for Free World Economic Growth (1959) [Straus, Report], 21Google Scholar.

¹⁹ McCloy, John J., “Foreign Economic Policy and Objectives,” chapters submitted for the consideration of the Commission, US President's Commission on National Goals, Goals for Americans (Englewood Cliffs, N.J.: Prentice-Hall 1960), 347Google Scholar.

²⁰ James Hagerty, Press Secretary to the President, “Press Release, March 2, 1959,” mimeographed.

²¹ US, Committee on World Economic Practices, Report (1959) [Boeschenstein Committee], 4Google Scholar.

²² US, Department of Commerce, Office of the Assistant Secretary for International Affairs, Reportorial Review, Responses to Business Questionnaire Regarding Private Investment Abroad (1959), 15–16Google Scholar. The point here is not that businessmen were less concerned with the general issues of corporate autonomy and state intervention, but rather that they were satisfied their concerns did not apply to the guaranty program.

²³ Congressional Record, 87th Cong., 1st sess., 1961, vol. 107, p. 16204Google Scholar.

²⁴ Their support still had clear limits. They wanted a program that helped manage political risks, not a substitute for diplomatic protection. As such, their demands for better guaranty insurance were consistent with their demands for stronger State Department action to deter expropriation.

²⁵ Memorandum from Don Daughters to O'Donnell, Kenneth, “Suggestions for Improvement AID/State Operations,” 06 13, 1962, p. 10Google Scholar, “A.I.D. 1/62–6/62” Folder, Box 68, President's Office Files, Departments and Agencies, John F. Kennedy Library, Waltham, Massachusetts. Page contains handwritten marginal notes by President Kennedy.

²⁶ US, President's Task Force on Foreign Economic Assistance, An Act for International Development, Summary Presentation (revised 07 1961 edn.), 106–07Google Scholar. War risk coverage was not mentioned because that had been added in 1956.

²⁷ Foreign Assistance Act of 1961, 75 Stat. 429–32 (1961).

²⁸ Investor complaints about AID's administration were voiced repeatedly during OPIC hearings. Strong statements came from the NAM and a senior consultant to the Bank of America. For a re-statement of these complaints see Hornbostel, Peter A., “Investment Guaranties: Bureaucracy Clogs the Flow,” Columbia Journal of World Business, IV (03–04 1969): 37–47Google Scholar.

²⁹ Quoted in US, International Private Investment Advisory Council, The Case for a U.S. Overseas Private Enterprise Development Corporation (1968), 2Google Scholar.

³⁰ Ibid., 6.

³¹ See comments by Fulbright, Senators and Church, , in Congressional Record, 91st Cong., 1st sess., 1969, vol. 115, pp. 38701–07Google Scholar.

³² We will continue to equate the terms “political risk insurance” and “guaranty insurance.” OPIC's own terminology is different.

³³ Foreign Assistance Act of 1969, 83 Stat. 809–818.

³⁴ US, Congress, House of Representatives, Committee on Foreign Affairs, Overseas Private Investment Corporation: Hearings on Title II of H.R. 11792, Foreign Assistance Act, 91st Cong., 1st sess., 1969, p. 83Google Scholar.

³⁵ Congressional Record, 91st Cong., 1st sess., 1969, vol. 115, p. 38700Google Scholar. The Rockefeller recommendation, which Javits cites, is in US, Senate, Committee on Foreign Relations, Hearings on the Rockefeller Report on Latin America, 91st Cong., 1st sess., 1969, p. 104Google Scholar. The Pearson recommendations can be found in Pearson, Lester B. (chairman), Partners in Development: Report of the Commission on International Development (New York: Praeger Publishers 1969), 108–09, 123Google Scholar.

³⁶ See President's General Advisory Committee on Foreign Assistance Programs, Report, Development Assistance in the New Administration (10 25, 1968) [Perkins committee], 2, 26–28Google Scholar.

³⁷ Congressional Record, 91st Cong., 1st sess., 1969, vol. 115, p. 38699Google Scholar. Many of the groups Javits cited testified before the House or Senate committees. Others, like the CED, forcefully recommended the OPIC plan in their own publications. See CED, Assisting Development in Low-Income Countries: Priorities for U.S. Government Policy (1969), 72–73Google Scholar.

³⁸ US, Congress, Senate, Committee on Foreign Relations, Foreign Assistance Act of 1969: Hearings on S. 2347, 91st Cong., 1st sess., 1969, p. 164Google Scholar.

³⁹ Testimony of Haynes, Elliott in 1969 House Foreign Affairs Committee hearings on OPIC (fn. 34), p. 42Google Scholar.

⁴⁰ According to a GAO audit, claims against OPIC totaled $369.5 million as of April 10, 1973. OPIC took many of these claims to arbitration. It eventually lost most of them, but not until its charter had been renewed.

Even with these losses, OPIC managed to protect its operating balances through a variety of credit arrangements. Its main tactic was to negotiate compensation agreements with the Chilean junta. The junta agreed to pay most expropriated investors and issued long-term bonds to do so. OPIC then guaranteed payment of those bonds. The insured corporation was given the guaranteed bonds, which could be discounted for cash, plus a cash payment from OPIC. This arrangement saved OPIC's current reserves, but left it with long-term liabilities owed by foreign governments.

As of April 1977, OPIC had paid or guaranteed more than $246 million to investors in over 60 claims. $96 million was paid in cash; the rest was in guaranteed bonds. As disputes were settled and bonds repaid, about one-third of that money was recovered. But, as of April 1977, OPIC was still liable for $111 million in foreign government bonds. Its reserves amounted to $210 million. See OPIC, Topics, VI (03–04 1977): 1–2Google Scholar.

⁴¹ OPIC's finances are discussed thoroughly in the Church committee hearings and in a 1973 report by the Congressional Research Service. See US, Senate, Committee on Foreign Relations, Hearings on Multinational Corporations and United States Foreign Policy, Pt. 3, 93rd Cong., 1st sess., 1973Google Scholar. Also US, Congress, House, Committee on Foreign Affairs, The Overseas Private Investment Corporations: A Critical Analysis, 93rd Cong., 1st sess., 1973Google Scholar. Committee Print, Prepared by the Congressional Research Service, Library of Congress.

⁴² This discussion of the AFL-CIO, like our other analyses of recent guaranties legislation, is based partly on confidential interviews. Those interviews were conducted with congressmen and committee staff (on both sides), and officials in AID, OPIC, and the White House. There are serious scholarly problems in relying on anonymous interviews; this research uses them primarily to amplify the public record.

⁴³ The 1974 revisions are at 88 Stat. 763–768. For a statement of OPIC's administrative changes see US, Congress, House, Committee on Foreign Affairs. Hearings on the Overseas Private Investment Corporation, 93rd Cong., 2d sess., 1974, pp. 20–68Google Scholar.

⁴⁴ US, Congress, House, Committee on Foreign Affairs, Overseas Private Investment Corporation. A Report, 93rd Cong., 1st sess., 1973, Committee Print, p. 10Google Scholar.

⁴⁵ US, Congress, House, Committee on Appropriations, Hearings on Foreign Assistance and Related Agencies Appropriations for 1976, part I, 94th Cong., 1st sess., 1975, p. 936Google Scholar.

⁴⁶ Because of bureaucratic in-fighting and multiple decision channels, the assumption of rational policy hierarchies does not hold in some policy areas. However, it does hold for guaranty insurance, which has had consistent and undivided support within the Executive Branch. Hence, more complicated forms of bureaucratic analysis can be discarded in this case in favor of the parsimonious state-initiatives hypothesis.

⁴⁷ This point is discussed by Block, Fred in “The Ruling Class Does Not Rule: Notes on the Marxist Theory of the State,” Socialist Revolution, VII (05–06, 1977): 6–28Google Scholar.