Foreign Relations of the United States, 1952–1954, Africa and South Asia, Volume XI, Part 1

845C.316/12–552: Airgram

The Secretary of State to the Consulate General at Salisbury ¹

restricted

Washington , January 7, 1953.

A–24. Reference your despatch No. 100, December 5, 1952.²

Attracting private American capital to Africa has been much discussed in the OEEC and by MSA and the various Metropole governments. The British in particular have indicated their interest in this. They have told our representatives that they are doing everything possible to encourage U.S. investment in the DOT’s. When we have told them that interested American businessmen often receive frosty receptions at the hands of colonial officials they have asked for specific examples. Unfortunately although we are aware this is true specific cases are hard to find which cannot be explained away on one ground or other. This is particularly true of Africa, where few Americans have yet ventured. To a large extent the difficulty in finding good examples lies in the fact that few businessmen complain to U.S. authorities of their treatment.

In light of the heightened discussions on encouraging U.S. investment abroad recent examples of where American investors are refused access will be carefully checked. The reasons for rejection should reveal the intentions and sincerity of the Metropole governments. The example of the American brewery in Northern Rhodesia appears to be a case in point. Although it is possible that the fostering of American breweries abroad might not be considered the most desirable type of capital development, it should be remembered that the success or failure of one American investor in an area plays an important role in the decisions of other would-be investors. If an American brewery proves successful in Northern Rhodesia it would tend to attract other investments in other fields of manufacturing.

At the present time the Commerce Department has no information on the case cited in your despatch but shares the Department’s interest in any available information on the matter. The statement by Mr. Welensky indicates to some degree the reasons why the American investor was refused. Further information is required touching on the validity of the reasons given. These questions bear on the size of the market, whether the price at which beer sells is competitive, whether the establishment of the brewery would involve an exchange problem in Northern Rhodesia and to what extent, and what, if any, role existing establishment played in influencing the rejection of the U.S. proposal. Also would like the name of the American firm involved so that contact can be made in this country if necessary.³ Priority 3.

Acheson

1. The airgram was drafted by Douglas B. Smith of the Investment and Economic Development Staff and was cleared by the Bureau of African Affairs (AF), the Division of Foreign Reporting (REP), and the Commerce Department.
2. Not printed; it summarized the arguments for and against the opening of an American brewery in Northern Rhodesia. Welensky favored it, but others believed there were enough breweries and that a new one would draw off labor needed in other industries. (845C.316/12–552)
3. No response to this request was found in Department of State files.