Specific Suggestions

THE purpose of this final chapter is twofold. First, and foremost, it is designed to illustrate and clarify, by the elaboration of some specific measures of policy, the two guiding principles of denationalization and mondial supervision which have emerged from our search for the best method of dealing with the political problems connected with international private investments. From this point of view it is immaterial whether the details of the specific measures here proposed are well planned or not. The principle is the thing. Second, the suggestions about to be advanced may prove useful to citizens and statesmen by providing a tentative program based upon purpose and direction rather than upon drift. If they do nothing else, they may serve to center discussion about such a program. For this purpose, of course, the measures proposed must not be the immediately practicable products of today's expediency, and yet they must not be utopian. The object here is to recommend projects for which the realization seems possible in terms of decades, and on which work can be started today---a long-range plan for world statesmanship on the international investment problem.



The functions which might be discharged by a world commission on permanent economic contacts between nations are plentiful and important enough to justify the creation of such an agency. The World Investment Commission, if we may give it that name, should begin the development of that effective supervision by the world community which must gradually undermine national diplomatic protection and render denationalization of investments possible. It might do this in three ways. It should endeavor to establish and guarantee minimum standards of security and fair treatment to investors in countries not their own. It should endeavor to establish and guarantee minimum standards of protection for the capital-importing countries against harmful practices of foreign investors or harmful consequences of certain types of foreign capital investment. It should provide a constantly available means of conciliation and peaceful settlement for international investment disputes, available both to private parties and to governments. A fourth function might be added in connection with another suggestion to be advanced later:---the supervision of international corporations.

How should the World Investment Commission be composed? That is a question for practical statesmanship, but certain desiderata can be laid down. First of all, it should not consist of representatives of national governments, nor even of "representative national groups"---this in order to avoid the vitiating defects emphasized in our discussion of the consortium device. Nationality should no longer be the basis of institutions of adjustment for dealing with international investment relationships. In other words, the Commission should be mondial, not merely international. The best method of establishing such a commission and selecting its members would be through use of the machinery afforded by the Council and Assembly of the League of Nations and the International Labour Organization. Provision might be made for participation in this process by states not now members of the League. The Commission itself should include representatives of (1) investors, (2) borrowers and capital importing regions,(1) (3) international society as a whole .(2) Both as a part of its membership under the third category and as a part of a permanent staff or secretariat the Commission should have available the continuous, full-time services of competent experts on the various phases of international investment problems-political and social as well as economic. Those eligible to appear before the Commission and to bring questions to its attention should be: (1) National governments, of course. It is to be hoped, however, that in practice it would prove unnecessary for national governments to sponsor the claims and interests of particular citizens before the Commission, for these could appear directly. Government representations ought, therefore, to be confined in practice to stating the official interests of the government or the interests of large bodies of unorganized citizens. (2) Private persons, corporations, and business firms, with respect to their operations in foreign countries. (3) The international corporations to be suggested later. (4) Voluntary associations of bondholders, oil operators, mine operators, debtors, etc. to register a collective complaint. In fact, all parties having a definite interest in international investment operations or claims to advance or defend should be able to stand on their own feet before the Commission without the necessity of persuading any national foreign office to sponsor their case. This is calculated to do away with some of the worst defects of national diplomatic protection.

How would the World Investment Commission operate? It should have the following powers and duties:

To register international loan agreements and concessions; to make their terms public; to regulate their terms in certain respects.

To collect continuous and accurate information respecting international investment operations and all their ramifications and effects---social and political as well as economic. To call general conferences on a world or regional basis, or conferences of certain industries (e.g., concession holders, consumers, and states granting concessions in the oil industry). These conferences would consider problems raised by international capital migration, and out of them something akin to world investment legislation. might emerge.

To coöperate with the Mandates Commission of the League of Nations, the International Labour Organization, commissions on codification of international law, and other international agencies whose work has a bearing on the setting of standards for protection of capital-importing regions against ruthless exploitation.

To examine and report on the financial condition of borrowing states(3) and private enterprises; to make observations on the political and social implications of specific capital transactions.

To call attention to any conditions likely to intensify international investment conflicts or to occasion political friction over investments and to make recommendations with respect thereto.

To endeavor to conciliate disputes, calling conferences of lenders and borrowers for this purpose, mediating, arbitrating, seeking to work out compromises, employing the services of disinterested experts to provide full social and economic information on the basis of which equitable adjustments might be sought.

To make a public report of its findings where a party to a dispute before the Commission refuses to come to an agreement which in the opinion of disinterested conciliators is just and reasonable.

To publicly advise, after hearings, against further provision of capital to a state or corporation which has failed to observe a contract obligation without just cause. This would presumably make the flotation of loans difficult anywhere in the world for such a state or corporation. Here is one of the "sanctions" which would enable the Commission to take over the function (now exercised by national diplomatic protection ) of protecting investors abroad---that is, of guaranteeing minimum standards of fair treatment for the investment interests of aliens in all countries. If organized on a world-wide basis, this sanction would be sufficient in many cases to accomplish more in the way of protection than is now usually accomplished by diplomatic protection. At the same time, it would tend to remove investment protection as a pretext for national aggression and remedy other defects of the system of national diplomatic protection.

To refer legal questions to the Permanent Court of International justice or to the World Commercial Court (suggested below) for an advisory opinion or final settlement.

To coöperate with regional organizations like the Pan-American Union in the establishment of regional subcommissions for handling investment problems that affect mainly one part of the world.



As a second measure calculated to promote denationalization and mondial supervision of international investments the creation of a World Commercial Court may be urged. Such a court might have regional branches and it might operate in conjunction with a system of voluntary commercial arbitration. Its essential feature would be provision for direct access by private parties to an impartial, international tribunal. "Direct access" means that individuals and business firms or corporations would be eligible to appear as litigants before the court without the sponsorship of their national governments. The desirability of direct, non-national, judicial recourse on legal disputes arising out of international investments is sufficiently obvious on the basis of arguments already advanced. Such a development, furthermore, is in line with recent tendencies in international law, and the favorable expressions on the subject which have emanated from distinguished international jurists make the practical realization of projects such as that here proposed not improbable in the fairly near future.

Of course, at the present time, neither the Hague Court of Arbitration nor the Permanent Court of International Justice is directly accessible to private parties. While it is true that most of the disputes submitted to the Court of Arbitration have their origin in a conflict of private interests with a foreign state, the actual appearance in court is made by the national state of the private claimant. Before the Permanent Court of International Justice the question of access is determined by article 34 of its statutes: "Only States or Members of the League of Nations can be parties in cases before the Court." When the Permanent Court was created, proposals from Germany, Holland, and the Interparliamentary Union would have opened it to private parties as plaintiffs or defendants, but these were not accepted. Similar proposals advanced at the conference on international private law at The Hague in 1925 were likewise rejected. It was considered important to maintain the Permanent Court of International justice on a very solid, traditional basis in order that states might be willing to accept the "Optional Clause." Such acceptance might have been impeded by the admission of private parties as litigants. But the committee of jurists which rejected proposals for access of private parties to the Permanent Court was not necessarily of the opinion that they should be excluded from all international jurisdictions, such as those of special courts.(4)

Indeed, there are precedents for direct access by private parties to international justice, and some of these are adduced in Appendix B for the use of those who desire to pursue the legal aspects of the question further. As a practical aid to achieving such a reform the assembling of analogies and precedents which make the proposal appear less in the light of a sharp break with tradition is an important part of realistic tactics. Appendix B also summarizes arguments by international jurists on the question of direct access.



The World Investment Commission and the World Commercial Court would tend to denationalize international investment relationships and to substitute mondial supervision for national diplomatic protection. This is in line with the general policy here advocated. A further great step in the same direction might be made if some method could be worked out for the non-national incorporation of economic enterprises which contemplate the establishment of relatively permanent interests in several different countries. This would be a greater departure from the existing international legal system than either of the measures already suggested, but it would offer a method par excellence for attaining denationalization and would greatly stimulate the development of mondial supervision. Incidentally, it would dispose of a problem which has lately arisen to baffle and confuse present-day legal theory: that is, What is the nationality of a corporation organized in one country, operating mainly in another, with stock held equally in several others? The answer here suggested is that such a corporation might voluntarily become an international corporation, without nationality, registered and regulated by a mondial authority, but with rights of operation in each country the same as those accorded to foreign corporations generally by that country.

This proposal would obviously involve the creation of an international corporation law, probably through an international treaty to be framed and adopted under the auspices of the League of Nations. The treaty would set up a registry office where international enterprises complying with certain conditions might be chartered as international corporations. Such corporations would have no nationality. They would have mondial or "League of Nations" citizenship instead of German, French, or English citizenship. They would therefore not be entitled to call upon the government of any national state for diplomatic protection, nor would any national state have the right to make diplomatic representations to any other state on their behalf. This would be stated and agreed to in the treaty establishing the mondial corporation law. At the most, national states whose citizens were interested in an international corporation might enter a plea on their behalf to the mondial authority supervising and regulating these corporations.

There would obviously have to be a supervising and regulating authority, and it might possibly be the World Investment Commission suggested earlier. The conditions for registration of a business organization as an international corporation might include a requirement that no more than forty per cent of the capital stock be held in any one country, with corresponding distribution of voting rights. International corporations would, of course, have the standing of international legal entities with the right to sue and be sued in international courts. This would occasion no difficulty if the World Commercial Court were established. They might also sue and be sued in the courts of national states, perhaps with right of appeal to international jurisdictions in certain types of cases. In general, the international corporations would have the same rights, privileges, and duties in any national state adhering to the treaty as any other foreign corporations, or the corporations of the most favored nation. That is, an international corporation operating in Brazil would have the same standing there as a French, English, or American corporation, except that it would have renounced its right to the diplomatic protection of any particular nation and would have substituted responsibility to and right of protection from a mondial authority like the World Investment Commission. Precedents and analogies bearing on this proposal are included in Appendix B.

Let us consider further the advantages that might be expected from such a change in the political responsibility for international investments as might be represented by the establishment of international corporations. By incorporating internationally, business men interested in international economic developments of a bona-fide non-political intent would be able to dissociate their enterprises definitely from the suspicion of being national political tools. This would be an enormous advantage to them in operations requiring the coöperation and confidence of small countries, in regions of political tension, or in undertakings which necessitate the raising of capital in several different markets.(5) Managers of such enterprises would in many cases be glad to abandon their claims to national diplomatic protection, freeing themselves from the handicaps imposed by the political interests of their foreign office, and relying for protection upon the impartial supervision of the World Investment Commission. Small countries might require applicants for concessions and bidders on construction projects to incorporate internationally. This should be a much more effective device for insuring themselves against political penetration by larger powers through investment operations than they have yet been able to find. The interests of the world community would benefit through the relaxation of vexatious measures now in force in many small countries which are based upon the fear that political domination by outside nations may follow the importation of foreign capital. Furthermore, if international trade came to be conducted to a considerable extent by international corporations of the type here suggested many of the political repercussions of commercial competition as it is today might be avoided. To take a concrete example, competition for the South American market often assumes the form of national competition, as agitation inspired by commercial motives easily turns into anti-British, anti-Yankee, or anti-German agitation. Such agitation would lose its point if international corporations were the traders. Finally, the establishment of a form of international incorporation for business enterprises would tend to adjust legal forms to existing economic realities. National boundaries have already become too small in fact for many phases of modern industrial and commercial organization; international fusions, branch plants abroad, world-wide financial enterprises, are characteristic expressions of world economic interdependence. Fundamental factors like technological improvements in transportation and communication seem certain to press steadily in the direction of still closer world economic contacts and still further interdependence of world economic life. To insist that every enterprise has a determinate national character, no matter how widespread its ownership and its field of operation, is to maintain a legal fiction of which the confusing and vicious effects are destined to become more and more evident. The institution of international corporations under mondial authority would help to remedy the lack of correspondence between the legal and the economic conditions of modern international relations.

The difficulties and objections that will be encountered by any practical attempt to establish an international corporate law are, of course, immense. The basic opposition will rest upon the tremendous forces of traditionalism and nationalism, which will always resist rational efforts directed toward the political organization of the world on a basis related to its economic interdependence. These forces must simply be overcome if the world is to avoid catastrophe. Of the objections which might be raised against international incorporation on rational grounds, two will be briefly considered.

First, could satisfactory provision be made for the internal regulation of such corporations? Suppose that rival factions in the management dispute each other's powers, or that the voting rights of certain classes of stock are challenged. Such contingencies might be handled in one of two ways: either a code of law and procedure applicable to the internal affairs of international corporations might be adopted internationally, or their internal affairs might be subjected to the existing laws of some specified state. There would be no great objection to the latter alternative, so long as the external relations of the corporation with private persons and governments in other states are supervised by mondial authority and not by any national government. Practically, the second alternative might be easier to achieve, since the international legislative process is still in a very rudimentary stage of development.

Second, it might be objected that the plan for international corporations would make it possible for business combinations to form outside the regulatory jurisdiction of any existing authority, to set up monopolies, and to exploit the public without restraint. The answer to this is that such combinations can be formed today; the lack of any legal form for international incorporation is no effective restraint against actual combinations of economic power. It is a definite hindrance to the regulation of such combinations in the public interest, however. Perhaps the establishment of a mondial corporation law might be the beginning of a larger development toward the orderly control of world public utilities (shipping lines, radio, aviation, etc.) or even toward world collective ownership.

In conclusion, a word may be said about the possible combination of the international corporation device with another politico-economic form of organization that has recently proved useful in certain countries. The so-called "mixed enterprise," in which the provision of capital and the control of operations are divided between private parties and government, has been widely used in Europe for the conduct of such varied activities as electrical, housing, railway, gas, water, street railway, aviation, and garage undertakings. It offers interesting possibilities for application in the international field. By this means, for example, several national governments interested in the development of international aviation lines may share in the ownership and control of an operating company, and private capital may also be admitted to participation. Actual instances of such arrangements have, in fact, already been seen.(6) The device has the advantage of providing unified administration for an international service, while satisfying the governments that their political interests will be safeguarded. It seems obvious that international incorporation would provide a fitting form of organization for international mixed enterprises and would offer definite political advantages, through placing such enterprises under a supervision representing the world community.(7)



As a means of filtering out the national interest in world capital movements and thereby promoting the dual process of denationalization and mondial supervision, a World Investment Bank might perform useful functions. Such a bank would sell its bonds to governments or to private investors and invest the funds so raised in long-term construction projects, such as railways in South America and China, airways over the world, canals, harbor works, international river improvements, and the like. It might lend to governments and to private or mixed enterprises incorporated internationally. International development projects of this general sort have been talked about on various occasions since the World War, usually in connection with the problem of German reparations, and some of the framers of the Young Plan who designed the Bank for International Settlements seem to have hoped that it might strike out in this field. The activities of the Bank for International Settlements have been confined to promoting central bank coöperation and to measures connected with monetary and exchange problems, however; its operations are mainly in the field of short-term finance. In addition to the Bank for International Settlements, therefore, and to such institutions as the International Agricultural Mortgage Credit Company, sponsored by the League of Nations for assistance to the farming countries of southeastern Europe, there is room for another international institution which would concern itself with long-term investments.(8)



Among the legitimate and useful functions for discharge by public agencies are the facilitation of trade and investment through the provision of dependable economic information, the encouragement of contacts between persons who might deal with each other, and the protection of parties to business agreements against loss through fraud, violation of contract, and similar causes. These functions with respect to international investment operations now fall within the sphere of the diplomatic and consular representatives maintained by each national state within the territory of other states. Increasingly in recent decades diplomatic and consular officers have been expected to provide economic information, to encourage economic contacts, and to help protect the business interests of their countrymen. The dangers, from the standpoint of international politics, of having this latter function of protection left to agencies of separate national states we have already dealt with. The provision of international economic information and the promotion of international economic contacts by agents of national states also involve grave dangers of a similar type---more subtle, perhaps, but also more continuous in their operation and far-reaching in their ultimate effects.

The very fact that international economic data are gathered and reported in national terms has a significance for world politics that can hardly be over-rated. Suppose that each of the forty-eight states making up the United States of America compiled its own data regarding the trade and investments of its citizens in each of the others. How long before the government and citizens of Illinois would be alarmed about their "unfavorable" balance of trade with Nebraska? Suppose the hard-working and patriotic consuls or commercial attachés of Illinois in Texas were to wire home that despite their best efforts the government of Texas was about to grant all its new oil concessions, like all those of the last five years, to citizens of New York and California. Could Illinois long remain inactive in the face of the "menace" offered by these powerful states to its own economic expansion abroad? Illinois, Texas, and New York are not economic units, properly speaking, at all. They are political and administrative units with more or less accidental territorial boundaries. But if consular and commercial reports came in regularly to their state capitals from "abroad," and statistics were published monthly on their economic relations with other states, their citizens and officials would soon think and act as though these states were economic units, to the confusion of an economic system based on much wider areas of interdependence than those covered by separate states. The result would be political friction as well as economic loss. Turning back to national states again, one of the most disastrous misapprehensions of reality with which modern mankind is afflicted is the tendency to think and act as though national states were economic units with collective economic interests abroad separate from those of other similar units. No small share in the perpetuation of this fateful misapprehension, and in the resulting attempts to govern a world economy by national political jurisdictions, must be attributed to the nationalistic agencies through which international economic information is supplied today.

The promotion of international economic contacts by national agencies likewise has its evil results, sufficiently obvious in the frantic and ridiculous (if not so tragic) mutually neutralizing efforts of national states these days to increase their trade at the expense of each other. The fact that this work of economic promotion is carried on by national agencies, in the first place, is a glaring defect from the standpoint of orderly organization of the modern worldwide economy. To have it largely in the hands of diplomatic and consular officials who also represent their nations politically is just one more dangerous unfitness in a totally absurd and dangerous system. The power and prestige and potential political friendship or hostility of a great nation inevitably influence the consideration of contracts or concessions to which even "unofficial" support is given by its diplomats, and the atmosphere of rivalry and suspicion engendered among the diplomats of different powers by their aid to the competing commercial projects of their countrymen cannot but carry over into political relationships.(9)

A useful contribution to the denationalization of international investment (and also trade) relationships would therefore be made by the development of a world "consular service" for the provision of detailed economic information and the encouragement of world commerce. Such a service could best be built on the foundation already laid by the excellent work of the League of Nations and the International Labour Organization in the field of economic information. It should eventually comprise a staff of trained agents in every principal city and economic region of the world, engaged simultaneously in reporting significant data from their locality to a central office and furnishing data needed within their locality regarding the economic affairs of any other part of the world. This would be, in other words, a world-wide system of economic information organized around a central clearing-house and providing to the managers of economic enterprises everywhere the type of information which the foreign commercial agents of some national governments now endeavor to supply to their citizens. The world system would differ from the existing national systems in two main respects. In the first place, the world system ought to provide a better service, more comprehensive, more efficiently organized, and less costly on the whole. One agent of the world economic information service, for example, with his assistants, could be stationed in Venezuela to send in one series of really adequate reports; nowadays at least a dozen equally superficial reports are doubtless sent to as many different capitals by the agents of different commercial nations, while the smaller countries cannot afford to maintain agents for the purpose. In the second place, the world system of economic information would be impartial and disinterested. Because it would not be out to promote the interests of any particular nationality or group, it would doubtless render better service to all legitimate economic enterprises than the existing national services. When all nations seek to push their business men ahead in foreign dealings at the expense of business men of other nations the net result to everybody concerned is nil, except for the creation of antagonisms. The actual aid to business enterprisers would be greater from a disinterested facilitation of their work available to all on equal terms.

It might be hoped that the world consular system would gradually by its superior efficiency undermine the national economic foreign services and take over those of their functions that are worth continuing. Thus a system of world economic reporting would be set up which would not be bound to think and work in nationalistic terms. Its statistics would probably be presented in terms of industries, natural areas defined by the presence of certain resources, and other economically significant categories. Thus statesmen might be led to think and act on economic matters more in accordance with the realities of the economic world.

Finally, a world consular service might perform useful functions in connection with the work of the World Investment Commission proposed earlier. Its representatives would be available for the provision of impartial reports, for conciliation, perhaps even for the conduct of negotiations on disputes before the Commission.



A practical suggestion with which few will disagree is that a great deal more research, indeed, continuous research, on all aspects of the world problems connected with international investment is needed. The attack of statesmen on these problems should be intelligently guided and carefully evaluated at every stage, and for that purpose more penetrating studies are necessary from time to time than can be made by busy men occupied with day-to-day affairs of state.

Private investigators---workers in the social sciences connected with universities or research institutions---can render a useful service in this respect, especially by bringing to bear the general body of knowledge comprised in economic, social, and political science upon the problems of international investment. Greater coördination of individual efforts in this complex and important field is much to be desired. Furthermore, an international commission should be constituted, probably under the auspices of the League of Nations, charged with the duty of studying comprehensively the political problems connected with world-wide capital investment and empowered to submit definite recommendations. There might be an inclination to extend the scope of such a commission's inquiries into other phases of the "Economic Tendencies Affecting the Peace of the World,"(10) but if so the general commission should certainly be divided into subcommissions, each with ample means for the study of a particular problem of limited scope.



This chapter of suggestions must not be concluded without emphasizing that the specific devices proposed above are neither sufficient in themselves nor possible of realization unless progress can be made in certain great international tasks of a more general character. Indeed, to approach these broader problems of world statesmanship through the avenue of some specific need like that of lessening international investment friction is the best way to see their true importance. It can be shown that most of the general international problems of our time have a rather direct bearing upon the successful or unsuccessful adjustment of international investment conflicts. For example:

The League of Nations. It is worthy of note that practically all the specific measures proposed in this chapter for dealing with the political problems raised by international investments depend in some fashion upon the presence of a world political organization. If the League of Nations did not exist it would be necessary to create it, or something like it, before investment problems could be attacked with any hope of success. The League should be supported, strengthened, and developed. Its legislative powers should be increased and its authority enlarged. just as the loose league of sovereign states first established under the Articles of Confederation developed into the federal government of the United States of America, so the League of Nations must be developed from a confederation of sovereign states into a federal world government. Of course the United States, which has such a large stake in the orderly supervision of international investment relationships, should actively encourage this process. An essential step is entry into the League.

Political Security and Disarmament. Anything which tends to remove the ever-present fear of war contributes to the solution of the problems of international investment friction. The national strategy of power is one of the greatest causes, as we have seen, for the involvement of private investments in political friction. When nations live in a constant sense of insecurity, knowing that a war may break out any time, they will fight most readily over those things which affect their capacity to fight---strategic routes, military and naval bases, economic power, questions of prestige. These are the factors which have been at the bottom of the bitterest disputes among the great powers over international investments. Insofar as any development of international organization, renunciation of war, pacific settlement of international disputes, or disarmament tends to augment the political security of peoples, to remove their fear of imminent war and the necessity to prepare for war, the political problems of international investment are made less difficult.

Economic Disarmament. Another of the most potent causes of international friction over investments has been the fear of nations that their trade and finance might be excluded from external markets by the economic policies of other nations. This fear has stimulated the scrambles for colonies, spheres of influence, and concessions abroad, which in turn have given rise to the most serious international investment conflicts. It may be said with justice, therefore, that no other policy of nations has contributed more decidedly to the promotion of investment friction than that of nationalistic commercial protection. It is plain that whatever is done toward the reduction of protective tariffs, the abolition of trade discriminations, the assurance of an open door to commerce in colonies, protectorates, and mandates, and the removal of other nationalistic barriers to trade, will aid in solving international investment problems.

Development of the International Labour Organization and the Mandates System of the League of Nations. Two international agencies which are accomplishing something toward the adjustment of fundamental sources of conflict between capital-importing and capital-exporting countries are the International Labour Organization and the Mandates Commission of the League. The encouragement and extension of their work will contribute to the solution of political problems arising out of international investment.

International Control of Intervention. If it is not possible to eliminate armed intervention altogether, it should at least be subjected to international control and thus be made a genuine police function controlled by the interests of the world community rather than by those of a particular state. A satisfactory solution of this general political problem would decrease the suspicion now attached to alien investments in weak countries and remove the possibility of using investments as tools and pretexts of conquest, thus aiding materially in the prevention of investment friction.

International Civic Training. It is all too evident that the measures and devices proposed in this chapter can never succeed, cannot even be tried, unless there is a sufficient sense of world citizenship among the different peoples of the earth and among their leaders. Such a sense of world citizenship may be stimulated by a rational appreciation of the world-wide interdependence of economic, social, and political life, but to be politically effective the emotions must also be touched and loyalties to new supra-national symbols must be developed. Can such loyalties be achieved short of an international working-class revolution, or can they be achieved by such a revolution? That is one of the most fundamental questions affecting the future form of social life on this planet. The development of international attitudes in the schools, world intellectual coöperation, adult education on the interdependence of the modern world, celebration of the heroes common to all mankind---all these things, and many more at first sight quite unrelated to international investments, have an important bearing on the specific problem of investment friction.(11)



The preceding pages have suggested that great construction enterprises and industrial developments of world-wide importance might regularly be undertaken in the future by international corporations, perhaps international mixed corporations, chartered mondially without nationality; that the supervision of these corporations and of other international enterprises might be entrusted to a World Investment Commission, replacing the system of national diplomatic protection; that their capital might be collected through a World Investment Bank; that economic information, assistance, and regulation of various kinds might be provided through a World Consular Service; and that a World Commercial Court, to which international corporations and other international enterprises would have direct access, might be available for the settlement of legal questions. All these specific measures would put into practice the guiding principles of denationalization and mondial supervision which this investigation has shown to be the necessary basis for a peaceful and orderly solution of the political problems connected with international investment.

Are these suggestions shocking? The reader may find them so if he has been well trained in the traditional diplomacy and the traditional legal theory of international relations. At the same time he may take great satisfaction in the successive innovations which have revolutionized modern mechanical arts! In that world of transport which has so profoundly affected the economic and social relationships dealt with in this volume, the watch-word of the moment is "streamlined." Is it more important to develop new mechanical apparatus to overcome the friction of the air and move men more swiftly from place to place, than to develop new political apparatus for reducing the economic and social frictions bound to result from increased international contact? In the field of mechanical transport no one will dispute that as speeds increase improved methods of control and protection have to be invented; all sorts of adaptations have to be made in the interests of safety. It is no less true that in the field of international human relations today adaptations need to be made in the interests of safety; modern international economic contacts require improved instruments of control and protection. Mechanical engineers, whose job it is to provide rapid and safe transportation, are highly conscious of the fact that new speeds demand new controls and new safety devices. Are statesmen, whose job it is to promote the welfare of human society, sufficiently conscious of the corresponding necessity in international affairs? As for the "passengers" of our modern complicated international system, they know little about the mechanism that runs it, and in the absence of intelligent and courageous leadership they are likely to insist that the safety of their streamlined train depends upon retaining the tested devices of their fathers-tested, that is, by years of operation on a stagecoach. "Safety" in international relations, as elsewhere, is not a static thing; it depends upon continuous adaptation to new conditions. These pages have tried to sketch some of the novel developments which statesmen ought to consider for the international economic relations of a "streamlined" age. That explains the untraditional nature of the proposals advanced in this chapter.

Appendix A

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