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case of the suspension of an act on a contingency to be ascertained by the President and made known by his proclamation.

The Aurora v. United States (7 Branch. 282, 305 (L. ed.) 378); the cases of Field v. Clark and Union Bridge, supra.

Unless, therefore, the Trade Agreements Act is within the limitations of the Constitution as judicially decided, it is unconstitutional and void.

The agreements entered into by the President were not concurred in by and with the advice of the Senate.

Assuming for the purpose of argument that the act does not lack constitutionality as an unlawful invasion of legislative power, we contend that it is unconstitutional for another reason,

Article II, section 2, clause 2, has but one exception which does not apply to treaties or trade agreements. Presidential power to make treaties is conditional upon the advice of the Senate and provided two-thirds of the Senate present concur. The exception relates only to appointments.

None of the trade agreements have been ratified by the Senate.

In a speech of the Honorable James M. Beck, of Pennsylvania (former Solicitor General of the United States), made in the House of Representatives March 24, 1934, on the subject, Should the Power To Tax Be Vested in the President?, among other things he said:

in a moment of hysteria, for that is what it is, in an economic crisis

we are prepared to abandon a basic rule of taxation and also a fundamental principle of our Constitution that no treaty that shall bind the faith and credit of the United States to a course of action with another govern. ment shall be valid unless it have the concurrence of two-thirds of the Senate.

"We are thus confronted with the possibility of a double violation of the Constitution.

"Please remember that there is no question about the President's power to negotiate all the trade treaties he wants, because his power of negotiation is as surely vested in him as is the power that Congress exercises to impose taxes, but when he negotiates, and he can negotiate with any nation for reciprocal exchange of imports and of duties upon imports, he must return it to the Senate for its approval, and if it involves changes in taxation it must be returned to the House, because the power to originate any tax is the ancient privilege of the House of Representatives and the final power to impose the tax, whether in accord with a trade agreement or not, is the greatest of all prerogatives of Congress itself. Therefore, there is no objection to the President, if he feels he can improve our economic situation, to making a tariff treaty with Germany, with France, or any other nation, but we do object to the President's having the final authority without submitting it to the Congress of the United States and to that body of the Congress which has the peculiar right to say when we shall commit ourselves to binding agreements with other governments in matters of legislative policy.

"I know there are many trade agreements that do not require either the action of the Senate or the action of the Congress, because they are of a peculiarly executive character. And there is the line of distinction.


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"The mighty changes in our constitutional system which have taken place in the last half century have been effected principally in three ways.

“The first has been the perversion of Federal powers to destroy the reserved rights of the States. This has been largely accomplished through the taxing power and the power over commerce."


An extension of the law would be a perpetuation of what we believe to be a violation of the fundamental principles of our Government and to operate on a state of facts which will not come into being until reconstruction and peace.

The responsibility of departing from a constitutional form of government is at stake.

We, therefore, respectfully record our opposition to the proposed extension of the Trade Agreements Act of June 12, 1934.

A. G. EVERTSEN, Secretary.

LAMB & LERCH, Counsel.

By J. G. LERCH. APRIL 1943.



New York, N. Y., April 12, 1943. CLERK, WAYS AND MEANS COMMITTEE,

House of Representatives, Washington, D. C. DEAR Sir: There is submitted herewith brief of the Synthetic Organic Chemical Manufacturers Association of the United States in opposition to the renewal of the Reciprocal Trade Agreements Act.

Please see that it is made a part of the hearings before the Ways and Means
Committee beginning on April 12.
Very truly yours,

C. A. MACE, Secretary.

To: The Ways and Means Committee, House of Representatives, Washington,

D. 0. From: The Synthetic Organic Chemical Manufacturers Association of the United edge of what the attitude of other countries will be in respect to the reduction of their trade barriers.

States. Subject: Brief in opposition to the renewal of the Reciprocal Trade Agreements

Act. The Synthetic Organic Chemical Manufacturers Association of the United States represents that great branch of the chemical industry which to a large extent came into being in the United States as a direct result of the First World War.

The Congress then saw the absolute necessity of the establishment of this industry in the United States as a great key industry either in war or in peace.

With the encouragement given by Congress an organic chemical industry' has been created in the United States, which is second to none in world importance and without which the United States would find itself in very grave difficulties in this second and larger world war.

Our industry then is directly and very substantially interested in the tariff policy followed by this Government, which is the reason for the presentation of this brief. The importance of the questions involved is so great and the implications for the future are so far reaching that no short-term view based on expediency should take precedence over sound long-term principle.

Our industry advocates greater international post-war cooperation but at the same time and in view of the very uncertain future conditions, we believe there there should be the application of a reasonable amount of national self-interest.

The Reciprocal Trade Agreements Act passed in 1934, in response to representations made by the executive branch of Government, has already had several extensions and is again before you with the request for a further extension. Our industry is opposed to renewal of this act as wholly unsuitable to the conditions of today.

There are a number of reasons why we believe this to be true:

1. No trade agreements made under the authority of the act are in normal operation. Foreign trade today is strictly controlled and is of necessity subordinated to the first requirement of winning the war.

2. Trade agreeements have already been concluded with 25 foreign nations with whom about 65 percent of the trade of the United States is carried on. There is, therefore, no pressing need for the extension of the program now, even if times were normal, which they are not. As a matter of fact, there has already been a general downward revision of the Tariff Act of 1930. More than 1,000 rates have been reduced, many of them the full 50 percent allowed under the authority delegated by the Trade Agreements Act.

3. There is no point in making new agreements with countries with whom they have not already been made because until and unless the war is over, we can't do business with them anyway on any normal basis.

4. If further reductions in our tariff rates are made now or in the immediate future through new trade agreements, the only apparent reason will be that the lower rates will be available when the war is over, at which time they will be available to the country with whom the agreement is made as well as to all other nations. We submit that it is unsafe to reduce our tariffs further until we have some knowledge of post-war conditions, including knowl

1 Dyes, pharmaceuticals, medicinals, flavoring materials, perfume materials, rubber chemicals, etc. For more complete description see Census Synthetic Organic Chemicals by the United States Tariff Commission.

5. In our opinion, any changes in tariff rates are meaningless in the absence of agreement as to a stable international monetary system.

How can tariff changes be made intelligently unless and until we have agreement as to some international monetary system?

6. This branch of the chemical industry has had the tariffs reduced on a great number of its products and we must never forget that the principal world competitor (Germany) in our industry has not yet had available to it these reduced rates. Therefore, no one can say with certainty whether there will or will not be serious injury when this competition is again in full play.

And the competition of Japan was just beginning to be felt when war intervened. The prices of her offerings reflected the exceedingly low level of her living and wage standards with which we cannot compete.

7. At the end of a war, foreign trade conditions are usually chaotic. At such times there is imperative need for the greatest degree of flexibility in trade controls, including tariffs. The Trade Agreements Act specifically canceled the flexible provision of the Tariff Act of 1930 as to any commodity which has been the subject of a trade agreement. It is our belief that there should be full restoration of the flexible provision of our tariff as set forth in section 336 of the act of 1930, or some improvement thereon, if such can be devised.

Debt and taxes will be a substantial burden on productive enterprise after the war and will become part of the cost of everything we produce.

How then can we ignore differences in cost of production here and abroail on competitive materials?

8. At the end of a war there is usually widespread dumping of goods on the markets of the world. We have in the United States in the antidumping law of 1921, a good law if and when it is enforced. The greatest single improvement that we could suggest would be to make action under the law mandatory instead of permissive, as at present.

9. While it is claimed that escape clauses in existing trade agreements provide the means whereby changes can be made in case of wide exchange fluctuation or other conditions disadvantageous to us, it must be pointed out that these are permissive rather than mandatory provisions and hence as a rule have not been utilized.

10. Proponents of the trade-agreements program have consistently represented our tariff to be an insurmountable barrier among the highest, if not the highest, in the world. The facts do not bear out this conclusion. To the contrary, we are one of the greatest free-trade nations in the world, two-thirds of our imports coming in free of duty. The fact that our duty-free importations are so large a proportion of the whole, is not because our duties or competitive commodities are so high that only duty-free goods can come in. This assertion is constantly made but it cannot be supported by a comparison of actual tariff rates in this and other countries. Such a comparison shows United States tariff rates to be among the lowest, not among the highest.?

11. Wage levels in our industry are well above the average industrial wage level in the United States. Expressing wages in this industry in the United States as 100, the corresponding figure in England is approximately 30, Germany approximately 25, and Japan approximately 10. These approximations, of course, are based upon what we have in the past known as normal exchange relationships.

At the same time an amount equal to to abont 3192 percent of the gross sales value of our product is expended for research. Thus we maintain and improve the quality of existing products and continue the search for new and better ones. The efficiency of our operations is, we believe, the equal of any in the world.

Proponents of renewal make a great hue and cry about the terrible reactions in foreign countries if we do not renew. Their claim would have a sound basis only if there were no alternatives. There are many alternatives, at least one of which is already provided for in the mutual-aid agreements (article VII).

Congressional legislation can be as liberal as Congress wants to make it so that no other nation could misinterpretour position and our American form of government, for which we are now fighting, could be preserved and observed.

? See study by American Tariff League entitled "How High Are United States Tariffs."

Basically, however, since virtually no normal trade exists, the time seems most appropriate for the Congress to recover its powers and begin a new program in the light of past experience and present and future needs. In doing so, judicial review in matters affecting our laws relating to foreign commerce could be restored and questions of their meaning could be solved by arriving at the will of a congress which is in being when world changes are taking place.

There is no reason why the tariff rates already reduced in existing trade agree. ments should not be continued in force, with the proviso that such rates shall in the future be subject to review and adjustment under the flexible provisions in section 336 of the Tariff Act of 1930, only if injury to an American industry can be proved.

JUDICIAL REVIEW We think it is highly significant that the Trade Agreements Act was so framed as to make impossible any judicial review. Even the question of constitutionality cannot be determined.

Such procedure is hardly in harmony with the principles of our American form of government.

What does Congress propose to do about judicial review of administrative authority which it delegates?

We further oppose renewal of the Trade Agreements Act of 1934, unless properly amended for the following legal reasons:

1. We believe the present act to be unconstitutional.

2. The act permits the executive branch to exercise power exclusively granted by the Constitution to the legislative branch (power to levy customs duties and to regulate foreign commerce).

3. Failure to observe the mandate of the Constitution which requires the advice and consent or concurrence of the Senate in all treaties.

To call a commercial treaty by a different name (agreement) for the sole purpose of avoiding this constitutional provision is a subterfuge which should be rejected.

Submitted herewith is a proposed amendment to certain of the provisions begin. ning with section 330 of the Tariff Act of 1930, which we believe will give the tariff the full and much needed flexibility which will be required during the period of rapid change anticipated as an aftermath of the war period.

If the Trade Agreements Act is renewed with an amendment providing for flexibility in rates and a provision for judicial review and with actual rate changing handled by the United States Tariff Commission, the suggested changes in the existing law to which we refer in the preceding paragraph would provide that a domestic interest aggrieved by a rate in a reciprocal agreement could petition the United States Tariff Commission for a review of this rate. Upon receipt of this petition, the Tariff Commission would issue notice to all parties in interest of the date of hearing. The United States Government, the importer, and the domestic interest could appear and present evidence of the cost of production abroad and here. On the record thus made, the Commission would decide the case, rendering its judgment to raise or lower the rate to equalize the cost of production here and in the principal country of exportation to the United States by a certain percentage within the prescribed limits of section 336 of the existing law. If any of the three parties, i. e., the Government, the importer, or the domestic interest was dissatisfied with this decision, it could appeal to the United States Customs Court, where the record made in the United States Tariff Commission would be certified. All parties would have equal opportunity to appear in the United States Customs Court and present their arguments on the record, whence the United States Customs Court would render a judgment based upon its review of the fact and the law.

Again, if dissatisfied with this judgment, any one of the parties may appeal
to the United States Court of Customs and Patent Appeals on questions of law
involved in the decision of the Customs Court.
Respectfully submitted.

AUGUST MERZ, President,
C. A. MACE, Secretary.

Sections 330 to 336, inclusive, and section 350 of the Tariff Act of 1930 should be amended, as indicated, to read as follows:


SEC, 330. ORGANIZATION OF THE COMMISSION (a) Membership. The United States Tariff Commission (referred to in this tius as the "commission”) shall be composed of six seven commissioners to be hereafter appointed by the President by and with the advice and consent of the Senate, but each member Hof in offiee shall continue to serve until his sueceseor the Hesignated by the President at the time of nomination) takes office, but in Ho event for longer than ninety days after the effective date of this Act to person shall be eligible for appointment as a commissioner unless he is a citizen of the United States, and, in the judgment of the President, is possessed of qualifieations requisite for developing expert knowledge of tariff problems and effieiener in admin istering the provisions of Part 1 of this titte. Not more than three four of the commissioners shall be members of the same political party, and in making appointments members of different political parties shall be appointed alternately as nearly as may be practicable.

(b) Terms of Office. Ferms of office of the commissioners first taking office after the date of the engement of this Act, shalt expire; As designated by the President at the time of nomination, one at the end of each of the first six years after the date of the enactment of this Act. The term of effiee of a stecessor to any such commissioner shat expire six years from the date of the expiration of the term for which his predecesser was appointed, except that any commissioner appointed to fill a vacaney oeeuming prior to the expiration of the term for whick his predecesser was appointed, shall be appointed for the remainder of sureb teret The members of the United States Tariff Commission shall hold office during good behavior. A commissioner may be removed from office at any time by the President for inefficiency, neglect of duty, or malfeasance of office. When any commissioner resigns his office after having held a commission as such at least ten years continuously or otherwise, and having attained the age of seventy years, he shall during the residue of his natural life receive the salary which is payable to a commissioner of such commission at the time of his resignation.

All functions of the commission performed or being performed with respect to the appointment and fixing of the compensation of clerks and other employees of the commission, and with respect to the official records, papers, office equipment and other property of such commission, are hereby transferred to the commission created by this amendment. All unexpended amounts allotted from any appropriation for administering the office of the commission, available for expenditure by the predecessor commission for the payment of salaries of the commissioners and for expenses for the operation of the offices of the predecessor commission, are hereby transferred to the commission to be created by this amendment to be made available for its expenditure for the same purposes for which such allotments were made.

(c) Chairman, Vice Chairman, and Salary. The President shall annually designate one of the commissioners as chairman and one as viee chairman of the commission. The viee chairman shalt aet as chairman in case of the absence of disability of the chairman. A majority of the commissioners in office sheht constitute a quorum, but the commission may function Hotwithstanding vacancies Each commissioner (including members in offiee on the date of the enactment of this Act) shall receive a salary of $1,000 $10,000 a year. No commissioner shall actively engage in any other business, vocation, or employment than that of serving as a commissioner.


(a) Personnel. The commission shall appoint a secretary, who shall receive & salary of $7,500 per year, and the commission shall have authority to employ and fix the compensations of such special experts, examiners, clerks, and other employees as the commission may from time to time find necessary for the proper performance of its duties.

(b) Application of Civil Service Law. With the exception of the secretary, & clerk to each commissioner, and such special experts as the commission may from time to time find necessary for the conduct of its work, all employees of the commission shall be appointed from lists of eligibles to be supplied by the Civil Service Commission and in accordance with the civil service law.

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