Leading Administration officials who have been opposing new federal legislation to combat the Arab boycott and possible Arab control of major American companies were rebuked today by Sen. Harrison Williams (D.NJ), chairman of the Senate subcommittee on securities.
After hearing two additional government witnesses at the second day of the three-day hearings, Williams said “We have yet to get the feeling of urgency of concern and action. There is almost no concern over the impact of the Arab boycott.” Williams said that if foreign investment is “legitimate business, hallelujah, come aboard. If not, someone in authority–the President–should say no.”
Williams made his remarks after exhibiting two letters. One, from the Central Paper Co. of Newark, N.J., protested the Arab boycott’s “biased discrimination” that threatened “the existence of our economy.” The letter pointed out that the company’s late chairman, Benjamin S. Berkowitz, was devoted to Israel. Williams also read a letter from Lykes Bros. Steamship Co., Inc. of 17 Battery Place, New York City.
The Lykes letter stated “We hereby certify that its vessel is not of Israeli origin and will not call at any Israeli port” and is not to its knowledge “blacklisted” by the Arab Boycott Bureau. The steamship firm was one of 14 lines charged yesterday by the Anti-Defamation League of B’nai B’rith with alleged collusion in the Arab boycott of Israel. Williams represented the two letters as indicative of the circumstances facing America and declared that “such discrimination factors have no place in our commerce and industry.”
CLAIMS POTENTIAL ABUSE NOT CLEAR
Williams’ comment came during the testimony of John M. Niehuss, assistant director of the Council on Economic Policy, a government agency which collects information from government agencies and makes reports to Congress. Niehuss in general supported the testimony yesterday by the Department of State, Treasury and Commerce, opposing the legislation proposed by Williams and Sen. Jacob K. Javits (R.NY) to curb boycott practices and calling for disclosure of ownership of stock in American firms.
Niehuss, opposing the bills, said “There is no clear indication of potential abuse of foreign investment in the United States that cannot be handled by existing laws.” He proposed consultations with “major government investors.”
A similar position was taken by Ian Mac-Gregor, chairman of the United States Council of the International Chamber of Commerce, who welcomed the State Department’s testimony yesterday that it intends to seek prompt agreement from the governments of the major oil producing states that they will consult with Washington in advance of making any major new investments in the United States.
Niehuss contended that the proposed legislation could have “the effect of discouraging substantial amounts of beneficial foreign investment”; would violate 15 United States treaties of friendship, commerce and navigation, and that restrictive U.S. legislation “would tend to give respectability to additional restrictions on U.S. firms by foreign governments.”
Javits, asking Niehuss for a report on laws by foreign countries that govern American commerce and investment, declared. “Nobody is fighting foreign investment. I have spent all my life encouraging it, but we face a new situation. The country may be harmed by the political view and the narrowness of some foreign investors.”
He said that most people feel that the pricing of oil is a “holdup,” and, Javits said, “without insulting these nations,” he expressed belief that new laws were essential to “come abreast” of the new situation. Javits said “The business community must not bury its head in the sand.” He praised President Ford’s statement against discrimination in trade, terming it as “most admirable.”
SEC HAS ‘SIGNIFICANT RULE-MAKING AUTHORITY’
Ray Gurrett, Jr., chairman of the Securities and Exchange Commission, said that the SEC had already “significant rule-making authority to require the new disclosures” contained in the Williams-Javits bill. That measure would require disclosure of shareholders who hold five percent of the equity of a company and of persons proposing to acquire five percent.
Garrett said he was “generally in favor of improved disclosure of the identity of persons with the power to vote the equity securities of large American companies who would not otherwise be required to file reports” to the SEC. But he contended that the SEC wants that it “be authorized to require the publication of those reports if we find it necessary in the interests of investors.”
Javits became embroiled with MacGregor and George Ball, a senior partner in Lehman Brothers, who associated himself with the Council’s statement saving that the government already has “mechanisms for control of investors.” Javits pointed out that there was not a single line in the MacGregor statement “that takes any cognizance whatever of the immoral nature of this issue–any feeling of it.”
MacGregor said “We didn’t come down to talk about this.” He added that he disapproved of boycotts in any form, including consumer boycotts against such products as lettuce. Javits asked Ball and MacGregor whether they agreed with President Ford’s statement last week against discrimination. MacGregor said, “Yes. generally.” Ball agreed.
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