(The document referred to is as follows:) Mr. GAYLORD C. WHIPPLE, EXPORT MANAGERS CLUB OF CHICAGO, INC., The Quaker Oats Co., Merchandise Mart Plaza, Chicago 54, IN. Mr. GAYLORD: Enclosed is your authorization to represent our club in opposing the International Trade Organization at the congressional hearing next week. I presume you will have to file the original so am submitting the letter in duplicate so that you will have a copy for your file. Please do not overlook sending Miss Stenros a copy of your prepared statement for the club's records. Very sincerely yours, H. D. ARNESON, President. Mr. GAYLORD C. WHIPPLE, EXPORT MANAGERS CLUB OF CHICAGO, INC., Chairman International Trade Committee, Chicago, Ill. DEAR MR. WHIPPLE: Pursuant to the unanimous action of our board of directors at a meeting May 2, 1950, you are hereby authorized to represent our club in your testimony before the House Foreign Affairs Committee in opposition to the International Trade Organization. Very sincerely yours, H. D. ARNESON, President. Mr. WHIPPLE. I am presenting the views of both organizations, and I might say though it is not included in my statement that the Export Managers Club of Chicago is an organization consisting of about 600 people engaged in international trade in that location. Mrs. BOLTON. Six hundred people or representatives of organizations. Mr. WHIPPLE. Members. They represent organizations in that area. The Illinois Manufacturers' Association embraces approximately 4,000 member firms. The members of the association include industries of all sizes-large, small, and middle-sized engaged in a wide variety of production. However, the great majority of the members of the IMA are small-30 percent employ less than 20 persons; 40 percent less than 50 persons; 60 percent less than 100 persons; and 70 percent less than 200 persons. On behalf of the Illinois Manufacturers' Association, and likewise the Export Managers Club of Chicago, I wish to express unqualified opposition to this proposal. The worthy purposes and objectives of this proposal, as set forth in article 1 of the so-called Habana Charter are these: I would like to say right here that in arriving at these conclusions, the Habana charter was given to a committee, a special committee, a subcommittee, of the International Trade Committee, for study. Everybody on the whole committee did not read the whole charter but the subcommittee did and they studied it. What I am presenting are their views. Recognizing the determination of the United Nations to create conditions of stability and well-being which are necessary for peaceful and friendly relations among nations, The parties of this charter undertake in the fields of trade and employment to cooperate with one another and with the United Nations for the purposes of: Realizing the aims set forth in the charter, particularly the attainment of the higher standards of living, full employment, and conditions of economic and social progress and development, envisaged in article 55 of that charter. To this end they pledge themselves, individually and collectively, to promote national and international action designed to attain the following objectives: 1. To assure a large and steadily growing volume of real income and effective demand, to increase the production, consumption, and exchange of goods, and thus to contribute to a balanced and expanding world economy. 2. To foster and assist industrial and general economic development, particularly of those countries which are still in the early stages of industrial development, and to encourage the international flow of capital for productive investment. 3. To further the enjoyment by all countries, on equal terms, of access to the markets, products, and productive facilities which are needed for their economic prosperity and development. 4. To promote on a reciprocal and mutually advantageous basis the reduction of tariffs and other barriers of trade and the elimination of discriminatory treatment in international commerce. 5. To enable countries, by increasing the opportunities for their trade and economic development, to abstain from measures which would disrupt world commerce, reduce productive employment or retard economic progress. 6. To facilitate through the promotion of mutual understanding, consultation, and cooperation the solution of problems relating to international trade in the fields of employment, economic development, commercial policy, business practices, and commodity policy. With the purpose of accomplishing these objectives, this proposal would establish an International Trade Organization which would serve as a vehicle through which all member nations would undertake to cooperate. Of course, the Illinois Manufacturers' Association is sympathetic with the laudable purposes and objectives of this proposal. However, we are convinced that as a practical matter this proposal will not only fail to accomplish those objectives but will also tend to impair our own economy, will unduly circumscribe the freedom of our own people, and will not contribute toward our goals of world-wide stability and world peace. We submit that this proposal has many serious implications. The program involves, as a practical matter, risking our own national security, the creation of a world-wide bureaucracy, the surrender by the United States to such bureaucracy of many controls over vital internal policies, and unnecessary depletion of our own natural resources. Six articles describe the structure of the ITO by specifying that members of the ITO shall be the governments. All the members shall constitute a conference. Each member shall have one representative. Each member shall have one vote in the conference. Decisions of the conference shall be made by a majority of the members present and voting. There shall be an executive board of 18 members selected by the conference. Decisions of the executive board shall be made by a majority of the votes cast. A director-general shall be elected by the conference and staff employees are provided for. The proposal is replete with ambiguous clauses providing or permitting (1) a representative of any government to commit such nation to national and international programs; (2) to negotiate for the substantial reduction of tariffs and other charges for imports and exports; (3) to share with foreign competitors on terms equally as advantageous as the owner itself enjoys its customers, its raw materials, the products of its plant, and even the plants themselves, if the membership feels that those competitors need them for their economic prosperity and development. The above are just a few of such ambiguous provisions. It is clear that the underlying concept of the Habana Charter is nothing more or less than world economic planning. Actually we would be required to risk our national sovereignty and perhaps security, in addition to abandoning some of our cherished Federal laws in order to comply with its regulations. We could be forced to adopt principles utterly repugnant to us. The charter is lengthy, complicated, and extremely vague on some points. It has been described as an attempt to write a set of commandments for world business with penalties attached. The United States has but 1 vote among the 53 nations subscribing. If the charter is adopted by the United States of America, the course of this Nation would be altered for generations to come, and the only loophole therein is that we can resign after 3 years from the date of entry into force of the Charter and after certain notice. It will affect all walks of life and both domestic and foreign trade to such an extent that we may be compelled to abandon production, sale, or distribution of products when our supply tends to disrupt the economies of other countries. It might even jeopardize our production of synthetic rubber. The ITO would determine the needs of all members and is supposed to promote an equitable distribution, not only of know-how but also of materials and equipment even if economically unsound and impractical; the choice of industries to be developed being left squarely in the hands of each underdeveloped country. Regional preferential arrangements such as exist among the various parts of the British Commonwealth would be permitted to continue, and import controls would be condoned for balance-off-payments reasons in other words a country which is continually on the verge of bankruptcy, principally by overbuying, would be granted special privileges. State trading-government monopolies in the field of importing and exporting-would be permitted in certain circumstances, and even subsidies may be allowed. Under this proposal, Congress would, in effect, relinquish its responsibility under the Constitution to revise our tariffs and would delegate that authority to an international bureaucracy, in which the United States would have but 1 vote in 53. Such a proposal is not only completely idealistic in its concept, but, if adopted, would lead to more and greater dissension than we have ever experienced in the field of trade and commerce. We should continue our practice of making trade agreements with the various countries, on the basis of the exigencies of each particular case on the basis of the specific conditions that relate to individual countries. The Organization would be granted the right and authority to make amendments to its own charter or its constitution without any limitation whatever-and the United States would have one vote. The expense of the Organization would be paid as the conference of the members apportions which probably means that the United States would pay the greater part of the cost of sustaining the Organization. It is, of course, a matter of common knowledge that the United States is the only nation that is strong enough economically to provide any real leadership in the effort to attain world peace and stability. Therefore, any program, whether national or international in character, which is calculated to adversely affect the economy of our country, should, at this critical period in world affairs, be scrutinized by Congress and by all others concerned in a most critical manner. We submit that this proposal, laudable as its objectives may be, is highly academic in its concept that it would be futile and impractical in its operation, and that in the effort to make the program effective, our country, as well as the cause of world peace and stability, would be seriously injured. We earnestly hope that this proposal will be promptly and definitely rejected. Madam Chairman and members of the committee, that is the recommendation of the Illinois Manufacturers' Association of Chicago, it is concurred in and also recommended by the Export Managers Club of Chicago. Mrs. BOLTON (presiding). You have given us a very interesting statement, Mr. Whipple. Mr. WHIPPLE. It is the view of businessmen who are not lawyers and not professional organization men, either. Mrs. BOLTON. Good, homey Americans, perhaps? Mr. WHIPPLE. Thank you. We hope so. Mrs. BOLTON. Mr. Smith, have you any questions? Mr. SMITH. Is it your understanding that this charter takes out of the picture the regular businessmen who have been working in the field of foreign trade? Mr. WHIPPLE. If you are talking about the American business organization known as private enterprise, I think it does. Mr. SMITH. And heretofore we have made a pretty good record, have we not, in developing the trade between nations on a privateenterprise basis? Mr. WHIPPLE. In the last calculation I had, we were doing 55 to 60 percent of the world trade. I think that is indicative in itself. Mr. SMITH. I think too few people understand your statement here in which it is pointed out that this is actually an operation by govern ments. Mr. WHIPPLE. Only governments are members. Mr. SMITH. So governments assume to take over the business operations of the world. That is in effect what it means? Mr. WHIPPLE. Yes; and there is practically no reference to nor encouragement of private enterprise. As businessmen we are definitely interested in the preservation of private enterprise and our right to develop our business as we can and see fit and are able to do. Mr. SMITH. In view of present world conditions there is not much to recommend governments in this particular field, do you think? Mr. WHIPPLE. We are definitely opposed to it. Mr. SMITH. Thank you very much. Mrs. BOLTON. Mr. Jackson Mr. JACKSON. Madam Chairman. Mr. Whipple, congratulations on a very fine statement. Mr. WHIPPLE. Thank you. Mr. JACKSON. Do you suppose that under such a proposal as is contained in the ITO charter, any independent businessman or farmer has any future as far as independent action is concerned? Mr. WHIPPLE. I will say it will be curtailed highly and I will also say that I think if Government takes over business they will fail and in the final analysis that failure will result in private enterprise having to take over and rebuild the broken structure. Mr. JACKSON. What would your comment be on a statement of this kind, Mr. Whipple, a statement which is contained in a letter from the Secretary of State to the President: It sets forth as one of the prime objectives of this program: "To bring about the orderly marketing of staple commodities at prices fair to the producer and consumer alike." Does that strike a strangely familiar cord somehow? Mr. WHIPPLE. That smacks of regulation and regimentation to the last degree. Mr. JACKSON. Does it not seem to mean absolutely-I am surprised it is in such firm language because usually you do not get it that clearly does it not mean a world program of planting and marketing allocations? Mr. WHIPPLE. Subsidies. Mr. JACKSON. Subsidies and allocations on the amount of land that can be planted and how much can be harvested? Mr. WHIPPLE. It can even control our agriculture and our production. Mr. JACKSON. I think, Mr. Whipple, I am in thorough accord with the position you have taken and also the position taken by the witness who preceded you this morning. I think it is particularly important in the light of the court decision which was handed down in California several weeks ago. The American people had better back off and stop, look, and listen and taken another look-see at some of these international organizations, because when the courts of California rule as they have, that the law of the international organization supersedes the laws of the State of California, we had better make pretty certain that there are no jokers contained in legislation of this kind or we may well live to regret the day that this committee and this Congress delegated the constitutional authority of the Congress and the inherent rights of the people of this country to any foreign agency. Mr. WHIPPLE. I am opposed to Congress delegating its rights to anybody. Mr. JACKSON. Do you believe, sir, that in this legislation we delegate our rights? Mr. WHIPPLE. Yes, sir. Mr. JACKSON. So do I. That is all, Madam Chairman. Mr. SMITH. Madam Chairman, might I associate myself with my distinguished colleague from California in the remarks he has just made apropos this legislation. Mrs. BOLTON. Yes, indeed. May I ask you one question myself: Do you feel that we can have an effective International Trade Organization without the underlying common denominator of a free-enterprise system? Mr. WHIPPLE. No ma'am. Mrs. BOLTON. Can we make such an economic organization a going concern without having the proper political climate for it? Mr. WHIPPLE. Unless we decide to have a socialistic state, you cannot do it. Mrs. BOLTON. Do you feel that we are, as a people, failing to recognize the sign posts on the road we seem to be on? Mr. WHIPPLE. If you will allow me to answer that personally and not according to the groups I represent, I would say very much so. |