an office is established in the colony, registration in the Commercial Register is required.

A foreign company contemplating the holding of real property, the taking up of Government land, the holding of concessions from the Government or taking part in any other transactions involving obligations to the State, is required to establish itself as a Dutch entity. Therefore any company desiring to secure concessions in Netherlands Indies is required to form a limited company registered either in Netherlands Indies or Holland, whose managing directors or the majority of its directors are Netherlanders or reside in Holland or in Netherlands Indies.

Although the mining law itself does not discriminate against foreigners, and article 5a of the mining law expressly authorizes the Indies Government to reserve lands and to enter into contracts with persons or companies for the exploration of the land and the exploitation of the minerals reserved to itself, the law further provides that legislative approval must be obtained of any contracts so formed; therefore American rights with respect to minerals reserved to the Government depend in each instance upon satisfactory negotiations with the Government of the Netherlands Indies and also upon favorable parliamentary action.

The Agrarian Decree of 1870, revised and amended, provides in article 11 that only the following can be leaseholders: (a) Subjects of the Netherlands; (b) residents of the Netherlands; (c) residents of the Netherlands Indies; (d) limited companies established in the Netherlands or Netherlands Indies. A resident of the Netherlands Indies is a person of any nationality who has resided in the colony for more than 18 months and who does not leave the colony for more than 1 year at a time.

The insurance law of April 15, 1941, contains provisions which might prove so burdensome as to prevent foreign insurance corporations from engaging in business within the Indies.

Taxation. An income tax is payable by all persons or firms earning income in the Indies. Prior to the war there were no requirements relating to the employment of labor. In the event the Netherlands Indies become independent, the Indonesian Government will no doubt enact legislation regarding labor and its employment.

Foreign exchange controls.-In normal times the Netherlands Indies has had available large amounts of foreign exchange and no control was necessary. Owing to the present severe shortage of foreign exchange, controls are strictly applied, exchange being authorized only for absolute necessaries. All exchange derived from exports must be turned over to the Exchange Institute, which makes payment in guilders.

As far as is known nationalization of American-owned companies in the Netherlands Indies has not taken place.

Competition with Government-owned companies. In prewar years the Government of the Netherlands Indies operated three monopolies, viz, pawnshops, opium manufacturing, and salt production.

To assist the Dutch quinine monopoly, the Netherlands Indies Government prior to the war imposed on all producers of cinchona bark a limit on annual exports and restricted the planting of new trees to the replacement of old ones. The monopoly, which is in control of 90 percent of the world's supply of quinine, is operated as

a syndicate, comprising planters in the Netherlands Indies and three manufacturers-two with plants in the Netherlands and the third with a factory in Java. The Netherlands Indies Government which is the owner of a large cinchona plantation is a member of the syndicate.

Republic of the Philippines

Right to do business.-The Republic of the Philippines has gone on record as entirely receptive to American capital and American business enterprise. Moreover, in accordance with provisions of the executive agreement signed in Manila July 4, 1946, the Philippine Constitution was amended, following a plebiscite of the Philippine people in March 1947, to provide that the exploitation of all natural resources and the operation of public utilities should, if open to any person, be open to citizens of the United States and to all forms of business enterprise owned or controlled directly or indirectly by such citizens.

The Philippine Trade Act of 1946 provides specifically that the executive agreement, which implements the act, shall be terminated in the event of discrimination against any form of United States business enterprise on the part of the Government of the Republic of the Philippines or any of its political subdivisions.

A bill to repeal laws granting special privileges to American citizens and corporations-unless such laws affected rights vested under the constitution or by treaty or agreement was passed by the Philippine Congress in 1946.

Registration under the corporation law of the Philippines is necessary to the conduct of business in the Republic. A license must be obtained from the chief of the Mercantile Register of the Securities and Exchange Commission, upon filing of a statement certifying to certain details of capital stock, assets, liabilities, etc. Acknowledgment and authentication of certain documents pertaining to the establishment of a branch office, articles of incorporation, etc., are also necessary. Fees collected for the filing of articles of incorporation and for registration are based on the capital stock of the foreign corporation.

Taxation.-Taxation includes an income tax, a corporation tax, and an undistributed profits tax, as well as a fixed tax upon business. Certain enterprises pay specified annual taxes, while annual privilege taxes are collected on certain occupations. Special taxes are provided for the mining industry, and all business pays specific, sales, and/or compensating taxes, as applicable. A residence tax is imposed on corporations as well as on individuals. In recent months negotiations have been under way for a tax treaty between the United States and the Philippine Republic under which double taxation of Americans doing business in the Philippines, and of Filipinos operating in the United States, would be avoided.

Labor regulations.-An 8-hour labor law is in force and a minimumwage law applies to public works. Legislation also provides for workmen's compensations, and inspections of working conditions are made by the Department of Labor. The only industrial establishments required to register systematically with the Department are mines, quarries, and metallurgical operations.

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Foreign exchange controls and tariff.-Under terms of the executive agreement between the United States and the Philippine Republic, trade between the two countries is on a reciprocally free basis for a period of 8 years beginning July 4, 1946, with declining trade preferences for 20 years thereafter.

Stabilization of Philippine currency in relation to the United States dollar also is provided by the agreement, which stipulates further that no restrictions may be imposed on the transfer of funds from the Philippines to the United States, except by agreement with the President of the United States.

Government-owned corporations.-Government-owned corporations have not offered serious competition in the Philippines. The declared purpose of Government participation in industry and trade has been to stabilize prices and assist producers and importers. In its plans for postwar economic recovery, however, the Government may take a somewhat more active part in the rehabilitation of industry and trade. Some of the new projects proposed for industrialization will be financed by the Government, if private capital is not interested. To meet criticism that expanding governmental activities constituted an unfair competitive threat to private business, legislation was recently enacted to subject agencies owned or controlled by the Government to all taxes and charges required of private business.

Nationalization.-There has been no nationalization of American property in the Philippines since establishment of the Republic, nor does such a development appear likely. Proposed legislation to nationalize labor-directed specifically at the Chinese-lacked administration support and failed to pass.

Actual administration.-There has been no indication in the actual practices and administration of the law, since establishment of the Philippine Republic, of discrimination against American interests. Siam

Right to do business.-The Kingdom of Siam generally imposes no restrictions on the doing of business by foreigners in that country.

A royal sanction or concession must be obtained in order to carry on a commercial undertaking of public utility. The following commercial undertakings are deemed of public utility: Railways, tramways, canals, aerial navigation, water supply, irrigation, electric power station, and such other undertakings affecting the public safety or welfare as may, from time to time, be specified by royal decree. The provisions of special laws must be complied with by all persons or firms in order to carry on a business of insurance, banking, savings bank, credit foncier, or undertaking of a similar nature.

The Siamese Mining Act of 1919 stipulates that all lands and minerals are crown property, and the right to prospect or mine must be expressly granted by the Government. A royalty is payable on minerals produced. For the purpose of collecting royalties on tin, the Government raised the arbitrary basis of calculating the metallic content of tin ore to 72 percent in 1923 from a former level of 70 percent.

The cutting of teak wood is only permitted under concession. To avoid excessive tie-up of lessees' capital, the major royalty on teak is collected not at the time of tree felling but by fiscal stations main

tained by the forest department at certain down-river points where the teak companies assemble their loose logs into rafts.

Siamese law does not require the qualification of foreign business organizations. Foreign companies engaging in business in Siam are, however, required to register in the business registration office.

Companies, partnerships, or juristic persons established under the law of Siam or established under the law of foreign countries and carrying on business in Siam must pay an income tax.

There are no labor laws discriminating against foreigners.

Foreign exchange controls.-Foreign exchange control is administered by the Bank of Siam, under direction of the foreign exchange board, which was established on June 21, 1947. Private importers desiring foreign exchange may file applications to cover imports of priority goods as listed on the revised priority list. Exchange at the official rate is granted subject to the amount in the central exchange control. Exporters of all commodities, except rice, rubber, teak, and tin are free to utilize 100 percent of their foreign currency proceeds to pay for imports of any commodities. As of June 16, 1947, exporters of rubber from the port of Bangkok are required to surrender to the Bank of Siam only 20 percent of foreign currency proceeds; from Singora to points outside Asia, 20 percent; from all other ports 25 percent. Exporters of teak and tin are required to surrender only 50 percent of foreign exchange proceeds. Sellers of rice to the rice bureau are permitted to buy credit in pounds sterling amounting to 10 percent of the value of rice sold to the bureau. This sterling may be used as desired.

Competition with Government-owned companies.-The following enterprises are Government owned and operated: 1 sugar mill, 2 paper mills, 1 canning factory, 1 cigarette factory, 1 cotton mill, 1 distillery, 11 rice mills, 1 mineral and 1 vegetable oil refinery, 1 airplane factory, 1 arsenal, 1 lumber mill, all the railway systems, and the postal, telegraph, and radio broadcasting systems. A semigovernmental firm purchased vessels during 1940 to carry on overseas trade, and another semigovernmental aviation concern holds the monopoly of internal commercial flying in Siam.

Egypt

AFRICA

Right to do business.-In an effort to bring business, which has been for so long almost exclusively in the hands of foreigners, under the control of Egyptian nationals, drastic action is reflected in newly established regulations. A new company law which became effective August 11, 1947, provides that at least 40 percent of the directors of the board of any joint stock company shall be Egyptian. The Council of Ministers shall have the power to waive this provision in the case of companies whose activities are mostly abroad.

Under the provisions of the company law, at least 51 percent of the shares of joint stock companies shall be earmarked for Egyptians whether on founding a company or on the occasion of increasing the capital.

If the full percentage referred to has not been subscribed to within the period fixed, which shall not be less than 1 month, the Minister of Commerce and Industry is authorized to extend the closing date

for subscriptions for a further period not exceeding 1 month, or to waive the requirements for this percentage in whole or in part.

Labor regulations.-The number of Egyptians employed by a joint stock company shall not be less than 75 percent of the total number of its employees, and their total salaries and allowances shall not be less than 65 percent of the total amount of salaries and allowances paid by the company. "Employee" means persons performing administrative, technical, clerical, or accounting work. The number of Egyptian workmen shall not be less than 90 percent of the total number of workmen, and their total wages shall not be less than 80 percent of the total amount of wages paid by the company.

The Minister of Commerce and Industry shall have the power to authorize the employment, for the period to be fixed by him, of technical managers and expert advisers of foreign nationalities in cases where it proves impossible to find suitable Egyptians.

In analyzing the application of the above provisions in reference to labor, it should be kept in mind that Egypt at the present time is faced with a serious unemployment problem. The population of non-Egyptian workers is not large, and it would seem unlikely that additional non-Egyptian workers would seek employment in Egypt. Egypt is not self-sufficient in skilled technical personnel, which means that there are many non-Egyptians employed at the present time in this capacity. It is expected that a number of years will be required to train a sufficient number of Egyptian employees in technical skills before strict obervance of the provisions of the law can be enforced, and in the meantime and thereafter, the Minister of Commerce and Industry has the power to authorize the employment of needed technicians.

Exchange control.-A new exchange control law has been enacted which places all foreign currency transactions under the control of the Egyptian Government. Under this law, all transactions in foreign bank notes, transfers of currency to and from Egypt, and all commitments specified in foreign currency are strictly forbidden unless they conform to the conditions and forms which are laid down by an order issued by the Egyptian Minister of Finance.

C. DEFAULT STATUS OF PRIVATE UNITED STATES LOANS TO FOREIGN COUNTRIES

The first important period of American lending to foreign countries was during World War I. From 1914 to 1917 American private capital had subscribed to about 2,500 million dollars of foreign bonds. These were principally the issues of the United Kingdon, France, and Italy. These issues were all repaid in full during the next 10