confidence that the people within the country, as well as those in other countries, have as to the stability and financial solvency of the government in question? Mr. LUKENS. The very fact that the overseas government takes steps to restrict imports gives evidence that their financial position is not desirable. Mr. JUDD. Yes; but that is different from making the figures public. Mr. LUKENS. I do not believe the figures would be made public if disclosed to the International Monetary Fund. Chairman KEE. Dr. Judd, will you yield. Mr. JUDD. Certainly, Mr. Chairman. Chairman KEE. I think section 5 of House Joint Resolution 236, the bill under consideration, answers your question with reference to the acceptance of an amendment. Section 5 says: Nothing in this joint resolution shall authorize the President or any person acting on behalf of the United States to accept any amendment to the charter under paragraph 2 of article 100 thereof without the authorization of Congress. Mr. JUDD. When you say the authorization of Congress, it has to be something passed by both Houses of Congress. Chairman KEE. I would take it it would mean exactly that, a joint resolution by both Houses. Mr. JUDD. Not ratification by the Senate as our own constitutional machinery sets up. Chairman KEE. No; by both Houses. Are you through? Mr. JUDD. Yes. Chairman KEE. Mr. Burleson Mr. BURLESON. No questions Mr. Chairman, thank you. Chairman KEE. We thank you very much Mr. Likens for your splendid statement. Mr. LUKENS. I appreciate the opportunity of appearing before you. Thank you. Mr. JUDD. Mr. Chairman, may I have included in the record a statement by the Manufacturing Chemists' Association, Inc.? Their secretary wrote to me and said he had to be at Geneva representing the chemical industry at the ILO meeting and asked if I would have his statement on ITO inserted in the record. Chairman KEE. Gentlemen, without objection the statement will be inserted in the record. STATEMENT OF M. F. CRASS, JR., SECRETARY, MANUFACTURING CHEMISTS' ASSOCIATION, INC. The Manufacturing Chemists' Association, Inc., and Chemical Alliance, Inc., whose combined membership represents in excess of 90 percent of the tonnage of heavy and fine chemicals produced in the United States, have followed with intense interest, but with increasing concern, the negotiations between this country and others in London, Geneva, and Habana, which have resulted in the Habana Charter for an International Trade Organization. The original concept and purpose of an international trade organization, as first made public by the State Department in 1945, were received generally with enthusiasm by the chemical industry. How ever, the successive negotiations leading up to the Habana Charter have been increasingly at variance with the originally announced concept and purpose. This charter and the organization it proposes, now under consideration, will not, in our opinion, accomplish such purpose. It is with regret, therefore, that the Manufacturing Chemists' Association and Chemical Alliance feel impelled to oppose the ratification of the charter by this Government. The charter, in its more than 100 articles, treats of many and varied problems, any one of which is reason for long and detailed discussion. For the purposes of this statement, however, the Manufacturing Chemists' Association, Inc., and Chemical Alliance, Inc., wish to confine consideration to some of its more important aspects. It is evident from a careful study of the charter that it does not in any sense set forth a joint agreement between and among the 57 nations which participated in the conference at Habana. The interests of the participating nations are so divergent that what has emerged from these negotiations is, at best, a document of compromise, which could only result in confusion and a weakening of the position of the United States if ratified. By its terms the United States would be obligated to measures, the consummation of which would work an almost impossible hardship on the people as well as all industry in this country. Consider for a moment the obligations inherent in the objectives of the ITO committing this country "to assure a large and steadily growing volume of real income and effective demand" for all members; "to increase the production, consumption, and exchange of goods" for all member nations; and "to foster and assist industrial and general economic development, particularly of those countries which are still in the early stages of industrial development." These obligations in themselves, could not help but place a tremendous financial burden on the people of the United States, resulting in a serious drain on our productive system and resources. There are many sections ostensibly dealing almost wholly with the conduct of international trade among the participating nations. That international trade plays an important part in our economy, as well as in the economies of the nations who have participated in these negotiations, is unquestioned. It appears, however, that if we accept the commercial policies set forth in the Habana charter, we shall be placing undue emphasis on the importance of international trade to the United States. This, by virtue of the adverse effect of these policies on our domestic economy. A review of the commercial policies shows clearly that no substantial agreement was reached which will be binding. Whereas certain rules and regulations are laid down, there are many exceptions made,. and many escapes provided for those nations which, for varied reasons, may not find it convenient or desirable to adhere thereto. One of the most onerous of the provisions its the permission granted by the charter for the imposition of quantitative import restrictions, where a member nation wishes to maintain equilibrium in balance of payments (art. 21), or to promote its economic development or reconstruction. That import quotas are today one of the greatest barriers to the free movement of goods in international trade has long since been recognized, and the charter appears to provide a means of perpetuating this restrictive practice. But the charter also concerns itself greatly with production and employment and other internal affairs within the national boundaries of the member nations. For example, article 3 states that "Each member shall take action designed to achieve and maintain full and productive employment." Thus "full employment" would become an end in itself to be guaranteed by the respective members, and as history demonstrates, the fulfillment of this guaranty would undoubtedly be accomplished by unbalancing the budget, inflating the currency, and imposing exchange controls. But each of these in turn would lead to contraction rather than expansion of international trade which is the dominant purpose of the charter. Under this article the United States would be required not only to take action to achieve and maintain full employment within its own territory, but also to cooperate with other nations through the Economic and Social Council of the United Nations, on such international measures as might be determined desirable to produce the same full employment in all member countries. In view of the widely divergent opinions expressed by Members of the Congress at the time it was considering the Murray full employment bill of 1945 and the Employment Act of 1946, the unwillingness of Congress to legislate "full employment" within the United States, we certainly should not now accept any charter which would commit the United States to international "full employment. The charter is also replete with commitments which would require this country to distribute its assets as other nations see fit. Article 3 fosters "agreements designed to facilitate an equitable distribution of skills, arts, technology, materials and equipment with due regard to the needs of its members." The United States, being the most advanced nation, has little need and under any such agreement its resources could only flow in one direction. Another objection is the fact that no individual has any legal recourse against the decrees of this international bureaucratic organization of governments. This is contrary to the rights of American citizens under our Constitution. The proponents of the charter refer to the existence of the so-called escape clause (art. 40) but the chances of first getting the agreement of our own Government to act and, secondly, of setting this cumbersome multilateral machinery into operation before inestimable damage is done, are so slight as to give minimum comfort to our workers and our investors. There are also serious objections to be found in those articles dealing with the organization (art. 75). The most dangerous, potentially, of these is that by a majority vote of the members, the United States could be committed over its objection to economic policies considered unsound and to consequent unduly heavy financial liabilities. For these reasons as well as other objections too numerous to set forth within the limited scope of this statement, it is the considered recommendation of the Manufacturing Chemists' Association, Inc., and Chemical Alliance, Inc., that the Habana charter should not be ratified by the Government of the United States. Chairman KEE. Gentlemen, I think that closes the proceedings for today on this resolution. We will reconvene this afternoon at 2:30 p. m. in executive session. (Whereupon, at 12:30 p. m., the committee adjourned to reconvene at 10:30 a. m., Wednesday, May 3, 1950.) MEMBERSHIP AND PARTICIPATION BY THE UNITED STATES IN THE INTERNATIONAL TRADE ORGANIZATION WEDNESDAY, MAY 3, 1950 HOUSE OF REPRESENTATIVES, Washington, D. C. The committee met pursuant to adjournment at 10:30 a. m., in the Foreign Affairs Committee room, United States Capitol, Hon. A. S. J. Carnahan presiding. Mr. CARNAHAN (presiding). The committee will come to order. We will proceed with further hearings on House Joint Resolution 236. Our first witness this morning is Mr. Richard H. Anthony, secretary of the American Tariff League. Mr. Anthony, you may proceed as you desire. STATEMENT OF RICHARD H. ANTHONY, SECRETARY, THE AMERICAN TARIFF LEAGUE Mr. ANTHONY. Thank you Mr. Chairman. The views of the American Tariff League on the Habana charter for an International Trade Organization are best presented by reference to the resolution passed unanimously at the league's sixtythird annual membership meeting, held in New York, N. Y., October 27, 1948. The complete resolution, which was introduced after a panel and floor discussion on the provisions of the charter, is offered herewith. Whereas, the restoration of orderly trade among nations will further their well-being, and the United States Department of State, with the objective of effecting such restoration through adoption of principles and rules for the conduct of world trade, originally made certain proposals; and Whereas, the American Tariff League has long advocated sound and equitable trade practices, and has studiously analyzed the original proposals and subsequent drafts of a charter for an International Trade Organization, and has, through published analyses, public addresses and in hearings before governmental commitees, made a distinction between the favorable and objectionable features of such proposals and drafts; and Whereas, in the conference which produced the Habana charter for ITO, an almost overwhelming task was attempted in trying to obtain, in one conference, agreement among the principal trading nations of the world on the solution of all the complex problems involved in the restoration of world commerce; and Whereas, the Habana charter, through its many exceptions and provisions for evading the principles and rules, accepts and continues the practices of statism, and of cartels and monopolies, which are the antitheses of United States belief in freedom and private enterprise, and makes unlikely the attainment of even its general goals; and Whereas there are features of the Habana charter contrary to United States public interest, which will retard, rather than restore, foreign trade and hamper its conduct, as is pointed out in the league's 1948 Declaration of Principles and Program for World Trade; and |