FOREIGN TRADE: Americans Go Home

The American Chamber of Commerce in Korea, a group so constantly harassed that it no longer loses its temper easily, last week uttered a cry of rage. In a bitter telegram to the U.S. Chamber of Commerce in Washington, it said that some 40 U.S. businessmen have been denied exit visas, and are "held as individual hostages" by the South Korean government until heavy new corporate taxes are paid. Some companies "have been notified of ROK intent to seal offices and impound assets" if they fail to pay "exorbitant sums labeled tax, but not implied by Korean tax laws."

The U.S. Chamber immediately appealed to Secretary of State Dulles for help. Korea denied the Chamber's charges, offered to waive all back taxes for any foreign businessmen who left the country "as soon as possible." But for businessmen with investments to protect, that was no way out. In any case, it was doubtful that the offer meant peace on the Korean scene; the embattled businessmen were not bucking merely the whim of Korea's stubborn, proud old President Syngman Rhee. They were bucking a tide of nationalism that has swept through Asia. In much of the non-Communist East, many governments are putting pressure on employees of U.S. and other foreign companies to pack up and go back home.

The pressure takes several forms. In Japan, as in Korea, it is taxes. A new Japanese tax boost on foreigners (TIME, Aug. 22) will mean that in order to give an American employee $10,000 in take-home pay, a company must peg his salary at $30,000. In Burma laws require that every company have at least 51% Burmese capital and employ at least 75% Burmese nationals. In India and Indonesia, even in the friendly Philippines and cosmopolitan Hong Kong, political and popular pressures are making U.S. firms hire fewer and fewer Americans, more and more Asians.

Trouble Insurance. Some big corporations have found that one of the best kinds of insurance against trouble is to hire even more native personnel than local law and feeling demand. National Cash Register Co., which has always had a policy of hiring native employees, has only six foreign officials in Tokyo, all British; the other 739 employees are Japanese. As a result, the Japanese government has been much more friendly to N.C.R. than to any other foreign company.

For some companies, hiring native employees presents no problems. A welltrained native salesman or executive can usually handle local customers more adroitly than a foreigner; and since native employees do not require living allowances or long home leaves, they cost less. Says one businessman: "A man earning $6,000 yearly in the U.S. becomes a $15,000-a-year man overseas."

But for many other companies there is only trouble in large-scale local recruiting. Outside Japan and the Philippines, there is a great shortage of employees trained for high-class technical or office work. The kind of experts foreign companies need are simply not available. Furthermore, a foreign company that sells service tends to lose its identity if it hires almost all natives. Manhattan's First National City Bank branch in Hong Kong started to hire native workers whenever possible but slowed down when it found that it was losing its identity as an American bank selling American service.