adding to our unemployment and lowering our standard of living, would not, in the long run, be beneficial to the world at large. The United States, with its ideals of free enterprise and freedom for all people, must maintain the efficiency and strength of its own industries if it is to continue to express forcefully this desirable philosophy of government. It must not be weakened as the ITO program would weaken it. We cannot afford to allow our force for good in the world to be lessened.

STATEMENT ON THE INTERNATIONAL TRADE ORGANIZATION AND THE HABANA CHARTER BY WALTER H. WHEELER, JR., PRESIDENT, PITNEY-BOWES, INC., STAMFORD, CONN.

World recovery is of vital and paramount importance. Permanent peace is a goal that must be attained. World prosperity is the only sure foundation for permanent peace.

For the first time in economic history the governments of the world are attempting both to agree upon a set of universal standards for the conduct of their international economic and trade policies and to establish a permanent body to see to it that the agreement is carried out. The United States has been foremost in advocating an international organization for establishing a code of fair practice and an international authority for adjusting differences in international commercial relations.

World prosperity is dependent on the expansion of world trade. In an effort to prevent the kind of anarchy and irresponsibility in world trade that did so much to bring about a world depression in the 1930's, 54 nations have worked out a code of rules reflecting their many political and economic differences.

The charter of the International Trade Organization is a realistic, far-reaching decision in the realm of international economic relations. The tide of economic nationalism must be stopped and a strong impetus must be given to effective international economic cooperation.

There must be an effective expansion of multilateral trade, and the success or failure of cooperative international trade may decide for generations whether there will be plenty or scarcity, growth or decline, security or instability, and even, indirectly, peace or war.

A continuing decline in exports is a matter of growing concern to American business. Many important markets have been virtually closed to American products by import restrictions imposed by other countries. There is a growing realization that with possible reduction in ECA funds, restrictions against United States exports are likely to increase and such restrictions imposed with little or no advance notice. Some concerted effort must be made to attack the over-all problem and to take cooperative action to remedy it. It is my firm opinion that the International Trade Organizations and the Habana charter is a positive step in the right direction.

The charter, on its merits, is a document which appears to be in the interests of the United States. Obviously, the charter is not perfect, but up to the present no better document has been worked out to deal with the issues involved in international trade. An attempt to improve the charter now by reservations or amendments would only serve to introduce an element of delay and possible disagreement that would be difficult to adjust among the member nations and might even be the beginning of the end of the international trade organization. The charter is based upon American concepts of competitive, nondiscriminatory enterprises and requires that all trade, even trade entirely controlled by governments, conform to competitive principles. It attacks not only Government barriers, such as tariffs and quotas, but also lays down rules pertaining to cartels, commodity agreements, subsidies, customs procedures, devaluation, fair labor standards, and the development of customs union in free trade areas. It establishes an organization through which members can work cooperatively to study all problems relating to trade on a continuous basis and to negotiate their commercial conflicts.

Member countries of the organization will be firmly committed to take individual and joint action on exactly those problems that are a source of difficulties in trade today. No other program has been offered to attack these restrictive devices effectively.

Increasing emphasis must be placed upon cooperative international economic programs if we are to secure world prosperity and peace. In my opinion, the approval of the proposed charter for the International Trade Organization is a

positive and practical step in improving international commercial relations and should be adopted without further delay.

STATEMENT SUBMITTED BY THE BOARD OF DIRECTORS, CLEVELAND WORLD TRADE ASSOCIATION, CLEVELAND, OHIO, RECOMMENDING RATIFICATION OF THE INTERNATIONAL TRADE ORGANIZATION CHARTER

The board of directors of the Cleveland World Trade Association recommends ratification of the International Trade Organization charter by our Government. We recognize that the charter in its present form has serious weaknesses but in spite of these weaknesses, we favor ratification for the following reasons:

1. Only through such an international agreement will world trade gradually free itself from the postwar strait-jacket of quota systems, exchange controls, discriminatory regulations and barter deals, and avoid the economic nationalism which followed World War I and which practically destroyed international trade and contributed greatly to bring on the disastrous depression.

2. The International Trade Organization was initiated by the United States and is the first attempt ever made by a large number of countries to provide an agency through which the reduction of trade barriers, the promotion of multilateral agreements and the development of international trade will be under continuous study.

3. In joining the International Trade Organization, the United States would not commit itself to any principles foreign to our economic or political philosophy. The International Trade Organization conforms to the objectives of the United States economic foreign policy which is to avert economic warfare, to increase world production and consumption, to raise the standard of living of all peoples, and to expand world trade on a nondiscriminatory basis.

4. The International Trade Organization is a logical forward step from the Reciprocal Trade Agreements, the International Bank, the Monetary Fund and the European recovery program. To repudiate the charter would, in our judgment, imperil the effectiveness of all these other efforts to restore the health of world economy.

5. The charter aims to extend to all countries access on equal terms to markets, products and raw materials for the economic and social progress of the nations. 6. The charter requires that state-trading enterprises shall conduct their international trade on the basis of commercial considerations, that market forces rather than political goals be the fundamental regulator of international trade. The charter also sets forth principles designed to make it possible for nondiscriminatory trade to be carried on between nations which engage in state trading and nations, like the United States, in which private enterprise is the basis of commercial activity.

7. The charter aims to encourage the international flow of capital for productive investment.

8. The charter sets up the first international plan for dealing with the cartel problem. It sets up no police powers but each member nation is pledged to take action against cartels whenever they operate contrary to the principles of the charter. The findings on cartel investigations will be published in each case. 9. The charter simplifies customs formalities, the maze of which, due to discriminatory and onerous regulations, has been a serious trade barrier.

10. The charter will assist our private enterprise system by promoting the expansion of world trade. About 10 percent of our total agricultural and industrial production is exported. This is vital to our domestic prosperity. Its discontinuance would contribute to economic depression as it did after World War I. This would bring on additional Government control at the expense of private enterprise.

11. Ratification of the charter will contribute to world political stability and to the strengthening of democracy. Democracy is not likely to survive unless the democratic countries are economically sound and their people have at least the hope of a decent standard of living.

12. The charter is realistic. It frankly recognizes present emergency conditions facing most countries. Not to have done so would have resulted in a practically worthless charter or no charter at all. Many exceptions are, therefore, allowed to enable member nations to cope with current conditions. These exceptions, however, are carefully defined and are to be effective only so long as emergency conditions make them necessary.

13. The charter does not make any member country subservient to the will of the majority. A country may leave the Organization any time after 3 years from the date of entry into force of the charter and withdrawal becomes effective in 60 days. Moreover, provision is made for a full review of the charter in 5 years. The charter does carry the wholesome moral and economic compulsion inherent in a nation's desire to have the respect and good will of the other nations of the world.

14. The present charter, with all its shortcomings, is better than no charter. Like the Charter of the United Nations, which also has its weaknesses, it is a beginning, and a very necessary beginning, of a basic agreement for the conduct of international trade. The charter does establish a code of fair practice in international commerce. The recognition of this code by 54 trading nations, even in theory only, has enough long-time merit to more than offset any dis advantages of the temporary exceptions which it allows.

15. We believe that it is this charter or no charter. After 18 months of intensive effort on the initiative and under the guidance of the United States, 54 nations have initialed the charter. If we who have most at stake now repudiate the charter. what possible hope is there that the nations wou'd renew their effort at least for many years to come? To repudiate the charter or to refer it back to the nations would mean to jeopardize the effort to set up this specialized agency of the United Nations for the promotion of international economic cooperation.

16. The failure of the United States to ratify the International Trade' Organization Charter would be to repudiate its leadership in international economie affairs and would jeopardize the effort being made toward international cooperation.

STATEMENT SUBMITTED BY MRS. ARTHUR FORREST ANDERSON, PRESIDENT, YOUNG WOMEN'S CHRISTIAN ASSOCIATION OF THE UNITED STATES OF AMERICA, NATIONAL BOARD, NEW YORK, N. Y.

Representative JOHN KEE,

Chairman, Foreign Affairs Committee,

House of Representatives, Washington, D. C.

DEAR SIR: On May 5, 1949, I wrote to you as follows:

JANUARY 20, 1950.

"The Young Women's Christian Associations at their convention in San Francisco in March 1949 voted 'continued support of the United Nations and its specialized agencies, with immediate ratification of the charter for an International Trade Organization.'

"Over the years the YWCA has recognized the vital stake of its members as consumers seeking higher living standards and as workers needing a high level of production and employment. They have a deep interest in promoting the peace of the world by every possible means. In this they are impelled to action by their duties as American citizens, by deep religious conviction, and by membership in the world-wide YWCA movement.

"The national board of the YWCA hopes that the hearings now in progress will result in the entrance of the United States into the International Trade Organization, believing that this is one of the means of obtaining higher standards of living, full employment, and conditions of economic and social progress and development.

"It would seem to be to the advantage of the United States to foster rules for equality in trade relations so that this country's trade will continue to expand once the need for Marshall plan credit passes. The International Trade Organization, once it is set up, can promote multilateral trade and the reduction of artificial barriers to trade among nations. It will give the nations the opportunity to work closely together for increased trade and for better living standards, making such changes in the actual charter as prove necessary and desirable as the International Trade Organization operates. The national board of the YWCA trusts that prompt action by the Congress will result in similar action by other nations, and that the International Trade Organization will be able to start its work in the near future."

As the hearings open again in 1950 we still believe that the future prosperity of the United States as well as that of other nations is in an expanded trade policy. Peaceful relations among nations will neither be promoted nor maintained unless the United Nations finds a way to promote the best possible develop

ment of world trade. The YWCA, therefore, feels that the ITO is necessary to deal with the major problems of readjustment which will accompany the development of an effective world trade program.

We should appreciate it if you would see to it that this statement is written into the record of the hearings.

Sincerely yours,

CONSTANCE M. ANDERSON,
Mrs. Arthur Forrest Anderson,

President.

STATEMENT SUBMITTED BY MRS. LAFELL DICKINSON, HONORARY PRESIDENT, GENERAL FEDERATION OF WOMEN'S CLUBS, KEENE, N. H.

The Habana charter for the International Trade Organization is an important step for expanding world trade, and thereby strengthening our efforts toward peace and economic security. It would expand trade along multilateral, nondiscriminatory lines favorable to the American principles of private enterprise. It would assist in maintaining our exports at a high level, thereby stimulating prosperity at home. It would protect our immense investment in foreign aid by coupling expanded trade with expanded production. It would be a key factor in advancing the peaceful ideals of the United Nations.

American leadership in the UN and throughout the democratic world depends on our far-sightedness and consistency in such economic matters. The ITO has been matured largely through American initiative and effort. Its early approval is clearly in line with American interests.

STATEMENT SUBMITTED BY A. L. VILES, PRESIDENT, THE RUBBER MANUFACTURERS ASSOCIATION, WASHINGTON, D. C.

APRIL 26, 1950.

Hon. JOHN KEE,

Chairman, House Foreign Affairs Committee,

United States House of Representatives, Washington, D. C.

DEAR MR. CHAIRMAN: We are writing to request the privilege of recording for an overwhelming majority of the rubber manufacturing industry its vigorous opposition to the proposed Habana charter for an International Trade Organization.

First, may we point to the historic interest of our manufacturers in foreign trade. This interest dates to the very inception of the rubber-manufacturing industry in Massachusetts 117 years ago. For more than 100 years of that time, American manufacturers were completely dependent on foreign sources of supply for their basic raw material. It is true that the wartime advent of high-quality American synthetic rubbers opened important sources of domestic supply. But this industry still remains dependent today upon nations far removed from our shores for more than half of our total annual rubber requirements. As for those countries, this raw material provides them with their principal earner of dollars.

Quite apart from crude rubber, this American industry has spread a vast network of rubber-manufacturing facilities throughout the entire world. Its stake in these plants is foreign investment on a large scale. It amounts to more than half of the total world investment in rubber-manufacturing plants outside the continental United States.

These facts, we believe, establish our claim to a deep and intelligent interest in the charter. Because of their harsh experience in the tightly cartelized world rubber markets during the twenties and the thirties, our manufacturers were quick to recognize the promise of the high principles embodied in the original ITO concept of free and unfettered world trade. They had learned at painful cost to themselves and to the American consumers of rubber goods the stultifying effects of government-sponsored monopoly and regulation of the production of a critical raw material.

Because the ITO pointed to a freer exchange of world goods, we have followed closely since 1947 the evolution of this instrument now before your committee. We have had the finished document, the Habana charter, under intensive scrutiny and analysis May 1949. At considerable expense of time and

money, more than 100 of our principal executives devoted an entire morning, afternoon, and evening last June 28 to an industry forum designed to lay the ground work for an intelligent 10-month study of the charter. In an effort to explore all aspects of the charter impartially, we brought together for this discussion the ablest proponents and opponents of the charter in Government industry, academic, and foreign trade circles.

Now, upon concluding our study, we find ourselves appalled. For we are able to discern little if any resemblance between the original concept of an International Trade Organization and the Habana charter. It is not our intent to reflect in any way upon the motives of the so-called architects of the charter. We are sure they are beyond challenge. But we can only conclude that their lack of experience and realism and perhaps their zeal to bring forth an agreement at any cost after four arduous conferences can account for the impossibly confused and completely unworkable document that lies before you. Be that as it may, it is clearly evident that four rounds of international horse trading at London, New York, Geneva, and Habana have so debauched the original principles that this once lofty concept is now stained beyond recognition.

In the charter we find new incentives for all nations to foster and broaden discriminatory trade practices rather than to liquidate them. If these incentives are difficult to ascertain, perhaps it is because the charter is one of the most obscure documents ever submitted for ratification by a sovereign nation. We confess frankly our own difficulty in understanding its cloudy language. But if its obscurities can be read at all, we can find in them only strong grounds for suspicion that our own industry could and might well be bound for all time under the chapter on intergovernmental commodity agreements to a supercartel of world scope.

We have had experience with cartels both in private hands and with Government blessing under the British Stevenson Act of the mid-twenties and the international rubber regulation scheme created by treaty by the British, Dutch, French, Irish, and Siamese in the thirties.

In our experience the bureaucratic cartel was quite as vicious as the one in private hands. Both of them cost the American consumers of rubber products millions of dollars, paid through the nose in artificially sustained prices for a basic raw material. We see nothing in chapter VI but the seeds of cartelism on a grander scale. Within it is the framework for a plan which would give the United States as the world's principal consumer of rubber but one vote at a table of nations whose past practices have always run counter to the interest of the American consumer. In the name of economic stability, so frequently referred to in discussions of the charter, we can envisage circumstances under which such a body might vote out of existence the whole of this country's war-born synthetic rubber industry, or, failing our acquiesence in such a decision, expulsion of the United States from the International Trade Organization.

We find the chapter on foreign investment no less vague than any other section of this confusing document. It appears to give any government the authority to nationalize an investment established by United States capital and to limit the rights of disposal on "just terms." There is no definition of what is meant by "just terms," and this section like many others in this charter is subject to many interpretations. It appears to leave all governments free to prescribe all kinds of conditions relating to management of subsidiary companies, and completely ignores the principles laid down by the International Chamber of Commerce in its Code of Fair Treatment for Foreign Investment. And nowhere in this chapter are there found any guaranties against discrimination against the foreign investor.

Although our opposition is aimed chiefly at the intergovernmental commodity agreement and foreign investment provisions of the Habana Charter, our industry feels that the entire document is impractical. Of the 111 companies responding to our questionnaire on the subject, 84 firms accounting for 82.08 percent of all new rubber consumed in this country opposed the charter. Nineteen companies expressed no opinion. Eight, accounting for 0.41 of 1 percent of the total new rubber consumed, supported the charter in its present form.

However, we do regard it as significant that while 84 companies opposed the charter, almost as many expressed faith in and support of the ITO objectives. and 42 companies accounting for 70 percent of the total new rubber consumption indicated their belief that the Government should make a fresh start toward developing a simpler and more workable charter.