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Recurrent reviews of the history of the trade-agreements program, and of the arguments pro and con, yield evidence that seems to me overwhelmingly in favor of affirmative action by the Congress now. Some overenthusiastic supporters of the act occasionally exaggerate the benefits already derived or potentially to be derived from the program; but the fears and assertions of opponents have repeatedly impressed me as ungrounded in any significant degree. I also find impressive the gradual conversion of skeptics and opponents into supporters, and the lack of evidence of conversion of former supporters into opponents. I firmly believe that the Congress will reflect the national will, as well as support the true interest of our country, when it renews the measure that is shortly to expire.
The issues have been canvassed so exhaustively that I feel it unnecessary to summarize the various grounds for my conviction that the renewal of the Trade Agreements Act is one important step in the evolution of our national policy-a step that we can take in our stride. As a major method of tariff revision, imperfect though it is, it seems to me far superior to the method that it has largely superseded. As a means of facilitating trade expansion, it has high merits, even though it operates slowly because of real and apparent conflicts of interest. In its practical contributions toward peaceful, constructive collaboration among nations, it is important despite the limitations of its field. The renewal of the act seems to me vital, not merely for the purposes of the act itself but as an indication that forward-looking statesmanship rather than narrow-minded politicalism will guide our national decisions during and after the war.
Some spokesmen for California agricultural interests have been disposed to criticize the trade-agreements program. I have frequently read and listened to their arguments, and at times participated in discussions of the question with farmers and country bankers in my State. Each time I have been struck by the way in which molehills of complaint or fear have been magnified into moun ains, and then have shrunk into insignificance in the light of plain facts. For this reason I feel impelled to add a few words as a Californian.
California has grown and thrived on ready access to markets at home and abroad, and on the rising consumption level of our own people and those of foreign lands. Even our tourist trade is heavily influenced by the volume of purchasing power in the rest of the country and in other countries. In turn, the level of actual living in California is heavily dependent on our purchases from other States and foreign nations. Whatever may be true of other States, we here have much at stake in the maintenance of the prosperity of the rest of the country and the rest of the world. Most of our products are not absolute essentials, but they are prized contributions to well-being and richness of life. Our economic and social progress is heavily dependent on the expansion of trade and on advances in the plane of living of mankind, and our fruits, nuts, truck crops, canned goods, and other products are concrete contributions to such advances.
The drift of the trade-agreements program in operation is unmistakably in the direction of enlarging interregional and international trade, and in the direction of raising the consumption level of our people and others. It is by no means the only factor so operating; it cannot be expected to work rapidly; but it tends to work surely. In this state specifically, in the light of 9 years' experience, we have much to gain from its further progress and nothing really to fear from its continuation.
If this statement is appropriate for inclusion in the testimony before your committee on this subject, I have no objection to having it so used. If further identification of me is needed, the statement appended to the enclosed reprint (itself irrelevant to the present issue) may be useful. Faithfully yours,
J. S. DAVIS, Director.
LETTER FROM THOMAS W. LAMONT. 23 WALL STREET, NEW YORK, N. Y.
NEW YORK, April 19, 1943. Renewal of reciprocal trade treaties. Hon. ROBERT L. DOUGHTON, Chairman, House Ways and Means Committee,
House of Representatives, Washington, D. C. DEAR Sir: I have been requested by the National Foreign Trade Council to express my views to you on the question of the extension of the Reciprocal Trade Agreements Act for a further períod of 3 years. In 1940, when the same question was before you, I contributed to a leading American weekly an article entitled "Trade Is a Two-Way Street," and I began by saying: “As a life-long Republican I am impressed with the importance of renewing the legislation for the Hull trade agreements.” And after many years of contact in the field of foreign trade, I have never hesitated to express my hope that, so far as Government was able, it should, in the interests of our own country, do everything possible to facilitate and encourage the growth of such trade.
Now, while during the war foreign trade has necessarily declined heavily, nevertheless the principles underlying the promotion of our foreign trade are as fundamental and important 'as ever. Now, if ever, is the time to adhere to them, so as to be sure that when war ends our plans are headed in the right direction ; and further, today, at this moment, to show the United Nations that America believes in the expansion of trade among all the peace-loving peoples of the world.
It seems to me that most fair-minded people must acknowledge now that our tariff policies for the 20 years following the First World War were contrary to the best interests of the Nation as a whole. Before that war we were, of course, a debtor nation and so it was natural that we should want a favorable balance of international payments. But after the war we failed to realize that our situation had become radically reversed. By a wide margin we had become a creditor nation. We wanted the foreign governments to pay their debts to us, yet we did not see that the only way they could do that was for us to permit and encourage them to sell us their goods freely. On the contrary, in 1922 we raised our barriers by passing the Fordney-McCumber tariff with its very high duties on imports.
In the twenties our foreign trade, both export and import, was heavy. But the only method by which the nations abroad could pay for their purchases from us and try to meet the debt demands of our Government (in that period Britain alone paid our Treasury $2,000,000,000 cash) was to borrow from our banking and investment markets. This they did on a grand scale. But the hope of Americans that our tariffs would be handled so as to admit foreign goods somewhat more freely was, as you know, not fulfilled. In 1930 the HawleySmoot tariff bill made a bad matter worse. With the unwise example that we set, our all-time high in tariffs was followed by all sorts of restrictions imposed by other countries on the flow of international trade, including quotas, bilateral clearing agreements, exchange restrictions, and so These retaliatory measures did not fail to have their effect here; I believe that the value of our foreign trade declined some 70 percent between 1929 and 1932, by no means all due to the general business decline.
The Reciprocal Trade Agreements Act, originally adopted in 1934, seems to me to have been the first constructive measure designed to remedy some of these ills and to start trade flowing more freely again. While I do not mean to enter upon any statistical discussion of its results, I understand that, up to the outbreak of the present war, United States exports to the countries with which reciprocal trade agreements were concluded had increased to a much greater degree than they had to other countries. Some of our domestic industrial interests maintain, perhaps with justification, that they have been harmed by the reduced import tariff rates under the act. Whatever you do that is constructive but that constitutes a change always pinches somebody's toes temporarily. But in the long run even such industries will benefit from their share of greater purchases from abroad and from a more prosperous people at home.
The only sound American ideal is that not of scarcity, but of progress, of abundance. Lapses from this true aim are always disastrous. And the American people are ingenious and are sufficiently fertile in resource to cope with any passing readjustments that may be required. With the demand for goods that may prevail throughout the world after the war there will be a greater need than ever for a free flow of international trade. It is through such a development that our expanded industrial system will be able to help rebuild the shattered world and also to stabilize itself on a longer-term basis. This last consideration is of great importance.
We hear a lot these days about world plans for currency stabilization. I am not an expert on currency matters, so perhaps I ought not to express my belief, after only a brief analysis, that as to the Keynes plan there is nothing about it that appeals to me, while the practicability of the White plan seems more than doubt. ful. However, we know that with the close of the war, it will be essential for us to join in some sound stabilization plan. It must be obvious that the sooner
the currencies of all the nations are steadied, the quicker will their own trade revive, the firmer will the exchanges be to the immense and immediate advantage of our own foreign trade. So the question is vital all around. It is well that work on the formulation of plans proceed, even though the initial proposals are to be considered as a start in the right direction rather than as a coinpleted effort. But let us be sure that the final plan is workable. Let us be sure that we gain for ourselves and for the United Nations who desire to be our customers every reasonable advantage that our immense gold supply, if rightly handled, is able to provide for us.
If I can serve the committee in any way, I feel sure it will be ready to call upon
THOMAS W. LAMONT.
LETTER FROM RALPH W. BACON, SECRETARY. THE INDUSTRIAL WIRE CLOTH
INSTITUTE, NEW YORK
THE INDUSTRIAL WIRE CLOTH INSTITUTE,
New York, April 23, 1943. Hon. ROBERT L. DOUGHTON, Chairman, Ways and Means Committee,
House of Representatives, Washington, D. C. MY DEAR CONGRESSMAN DOUGHTON: It is our understanding that your committee now has under consideration a bill to further extend the Trade Agreements Act of June 12, 1934.
The members of the Industrial Wire Cloth Institute, comprising an estimated 75 to 80 percent, by dollar volume, of the entire industrial wire cloth weaving industry throughout the United States, are desirous of going on record as being opposed to reenactment of that act in its present form, for the following reasons:
1. The Constitution of the United States distinctly provides that the Congress shall have power to lay duties.
2. We are opposed to the relinquishment of that power, by the Congress, to the Executive who, in actual practice, delegates the said power to subordinate employees of the Government and who are unknown and inaccessible to citizens whose economic existence may impinge upon the whims and theories of such subordinate and obscure employees.
3. The Constitution of the United States further expressly provides that the President shall have power by and with the advice and consent of the Senate to make treaties.
4. We are opposed to relinquishment of that power by the Senate because, call them what anyone will, reciprocal trade agreements, pacts, or signed commitments of any nature, it is our opinion that the so-called reciprocal trade agreements, negotiated and consummated by the diplomatic arm of our Government, the United States Department of State, are treaties, and as such should have the benefit of the advice and consent of the duly elected representatives of the citizenry, the United States Senate.
It is our earnest desire and humble petition that in any bill, drawn and approved by your committee, for the further extension of the Reciprocal Trade Agreements Act of June 12, 1934, that you provide for retention to the Congress of the powers expressly conferred upon it by the Constitution with respect to the laying of duties and consummation of treaties between the United States and foreign nations.
It is our further desire and humble petition that this communication be laid before and made a part of the permanent records of your committee in connection with its deliberations upon the aforesaid subject. Respectfully submitted.
THE INDUSTRIAL WIRE CLOTH INSTITUTE,
LETTER FROM ERIC T. KING, SECRETARY, TYPEWRITER MANUFACTURERS EXPORT
ASSOCIATION, WASHINGTON, D. C.
Washington, D. O., April 9, 1943.
United States House of Representatives, Washington, D. C. SIR: This association, formed under the Export Trade Act, is dedicated to the promotion of export trade in American typewriters, which involves joint effort to improve trading relations, and to achieve fair competition, in foreign markets. Very definite advance along those lines has been made during the 9 years in which the Trade Agreements Act has been in force, and the renewal of that act is advocated earnestly and unanimously by the members of the association :
Remington Rand, Inc., Buffalo, N. Y.
Underwood Elliott Fisher Co., New York, N. Y. The members, during the past 25 years, and up to the moment last year when their plants were completely converted for the production of arms and munitions, have produced 98 percent or over of the typewriters manufactured in the United States. Besides defending the home market against any flood of lower priced, duty-free imported machines, the members have exported from 25 to 35 percent of American production to foreign countries. This has been possible up to the last decade because the United States introduced typewriters to the rest of the world 50 years ago, and the members of this association spent millions in training foreign distributing organizations, and in educating operators and repair mechanics. Direct investment has been made of Amercan dollars in advertising and in local enterprises. This built good will and preference for American typewriters which survived a decade after the last World War, but which suffered a serious set-back in scores of foreign countries when the United States adopted the Hawley-Smoot tariff. Germany, Italy, and other producing countries not only proceeded to close their doors to American typewriters, but capitalized at once upon the ill will engendered by our tariff action and started a wholesale assault upon all of our export markets. Without describing the methods employed in these invasions, it is sufficient merely to mention two restrictions upon our trade: (1) Germany's cash subsidies to exporters and importing with blocked marks, which forced purchases from Germany by the countries from which she bought; and (2) the retaliatory action of the Ottawa conference which sought to preserve the Empire markets for British manufacturers. During the early thirties our share of the world's trade in typewriters fell from about 80 to 50 percent. One country after another fell under the economic domination of Germany and closed its gates to American' typewriters. As the trades agreement program advanced, and foreign countries became convinced of our sincerity and good faith thereunder, our competitive position improved. Favorable publicity in the foreign press again appeared as a result of this wise development in United States foreign policy.
Now we are in a global war-a major factor in it-and we shall have to be a major factor in making and winning the peace to follow. This association does not presume to discuss the high policies which the United States must carry to the peace table, but experience following the last war, and a survey of the present position, make it fully evident that political stability must be coordinated with economic stability, which in turn implies the removal of economic shackles. To this end no instrumentality known to us can approach the effectiveness demonstrated in the past 9 years in carrying out the purposes of the Trade Agreements Act. The flexibility of operations possible under the act, enabling the parties to an agreement to remove or modify any type of impediment to trade, always with a quid pro quo to offset the concession, makes the act an unparalleled instrument for accomplishing desired results quickly. The saving clauses which are a part of each agreement provide full protection against injury and, having followed the results of the past agreements, we have yet to be convinced that any material injury has resulted to any American industry as a consequence of any negotiated agree ment.
While this industry is making munitions instead of typewriters today, it is looking ahead to the day when normal production may be resumed, with the hope that it will be possible to utilize full employment in its factories to absorb its full complement of demobilized men from the services. For this important end there must be markets, and there is no better way to insure future markets at this time than to extend the Trade Agreements Act in its present form for another 3-year term. This industry has received benefits from agreements in the past, directly in the form of tariff concessions or bindings, and indirectly in other cases from the very fact that an agreement was brought into being, providing as they always have for cessation of discriminatory regulations and practices.
No action by our Congress at this time cou do more to assure other nations of the good intentions of our Government toward the establishment of a lasting economic peace than the overwhelming approval of House Joint Resolution 111. Failure to renew this act would be catastrophic in its effect upon the entire group of countries resisting aggression. The Axis would find great comfort in such an outcome. We bespeak, sir, the favorable action of your commit. tee upon the bill, and respectfully request that this statement be incorporated in the record of the committee's consideration. Sincerely yours,
TYPEWRITER MANUFACTURERS EXPORT ASSOCIATION,
LETTER AND STATEMENT SUBMITTED BY EDW. A. O'NEAL, PRESIDENT, AMERICAN
FARM BUREAU FEDERATION
Chicago, I., April 24, 1943.
House of Representatives, Washington, D. O. MY DEAR CHAIRMAN DOUGHTON: On behalf of the American Farm Bureau Federation, I desire to submit the attached statement with respect to the extension of legislation authorizing the negotiation of trade agreements.
I would appreciate it very much if you will bring this to the attention of your committee and incorporate it in the hearings of the committee. Sincerely yours,
EDW. A. O'NEAL, President.
STATEMENT OF EDWARD A. O'NEAL, PRESIDENT, AMERICAN FARM BUREAU FEDERATION
The continuation of a trade-agreements program on a sound basis is of vital importance to agriculture and to the entire Nation.
The restoration of normal trade among the nations of the world is essential to the maintenance of a stable and lasting peace. We can hope to achieve a lasting peace only if we find ways and means of preventing bitter tariff and trade wars which engender further bitterness, hatred, and insecurity.
Through a sensible, practical application of trade agreements, the nations of the world can eliminate discriminatory trade practices, reduce excessive trade barriers avoid disastrous tariff wars, and promote the maxiinum volume of trade with mutually beneficial results. It is imperative that we have some practical, workable means of working out favorable trade relations with the other nations of the world when the war is over to help restore world trade and economic stability.
When the war is over, not only the United States, as well as every great nation of the world, will be confronted with a terrific problem of readjustment and reconversion of our industries and agriculture from a war basis to a peacetime economy. Industry, agriculture, and labor are now geared up to capacity