Mr. ROBERTSON. I would like for you to enumerate those four little amendments that are going to help us along and tell us how far they would help us. Mr. SAYRE. The first one, and I take it that you refer to the article published in yesterday morning's Washington Post, the first one reads that a provision to give Congress some kind of veto power, to set aside trade agreements of which it does not approve. Now, as to that, sir, I think that what I have already said is perhaps as good an answer as any. To my own mind it would be utterly impracticable for the reasons which I have given. These fields of negotiation and the making of trade agreements run into infinitely complex and technical fields. It is a job which takes the entire time of men who have given life studies to the fields in which they are working. I think to do such a job, Congress should lay down the broad policies. Certainly Congress should determine the direction which we should take. On the other hand, the executive branch should execute those broad policies. Otherwise Congress' time would be taken up in an impossible attempt to bring order into a field so complex and so technical that I fear there would be an impossibility of achieving results that are practicable. The present method is and has been proven a success, and we have increased the foreign trade, both of agricultural and industrial commodities, as the statistics which I have been reading show. The program is no longer an experiment. It is a tried success. Now, why change such a program in view of the practical considerations which have been suggested. If this amendment does refer, by suggesting a congressional veto, to the necessity of ratifying agreements before they come into force, I can only point out the actual experience of the United States during past years, with regard to Senate ratification. You will remember that, as I think I said once before, only three tariff reciprocity treaties in our whole history have been ratified by the Senate and actually entered into force. Those three treaties were with countries having special relationships with us. with Canada, one was with Hawaii, and the third with Cuba. Mr. ROBERTSON. Now, I am going to have to interrupt you, because we are going to have to rise in a few minutes. I see Mr. Patchin in the audience, and he recently said in a radio address that kind of ratification or that kind of amendment would be the kiss of death. You never would get one of them through. Can you take up briefly the other three? Mr. SAYRE. There are four others, as a matter of fact. The second, and I will be as brief as I can, the reduction of the period of extension from 3 years as in the present law to 2 years or possibly 1 year. The objection to shortening the period for the extension of these trade agreements is this: That if the period should be reduced to 1 year or even 2 years, it might be that the period would end before the conclusion of the war. Now, as I have said this morning, increased trade is an absolutely necessary foundation to build upon for the peace. If we give notice to foreign nations now that we are wobbling, that America perhaps will not follow out this program, foreign nations sure as shooting are going to build up their own fences. They are going to build up their own barriers against American exports, and when it comes to the making of the peace, this foundation stone will not be there. Now, if you are going to build a sound peace, now is the time to put in this particular foundation, and this is one of the foundation stones that is absolutely necessary. Mr. ROBERTSON. Now, Doctor, the other members of the committee are getting impatient to take up the other bill which is to come up at 4 o'clock. Could you come back tomorrow? Mr. SAYRE. I would be glad to. The CHAIRMAN. How much more time have you got? Mr. ROBERTSON. He said that he would come back. The CHAIRMAN. We will give him the first call in the morning. Mr. KNUTSON. The name of Mr. Grundy has been brought up in this hearing, and Mr. Grundy was here to look after the interests of his State and the industry in which he was engaged. We have a Grundy on this committee, and they raise a lot of turkeys down in his district. When it was proposed to cut the tariff on turkeys from 10 to 6 cents, our Grundy rushed down to the State Department and evidently succeeded in killing all action. I have here a publication called Changes in Port Duties Since 1939, and down at the bottom on page 79 I find that changes in rates on chickens and guineas, ducks and geese were cut from 10 to 6 cents a pound; all others except turkeys-gobble, gobble, gobble-from 10 cents to 6 cents. You see we have a Grundy here, and he did a good job. I congratulate him. But I am wondering in how many other instances you allowed politics to influence your decisions. Mr. SAYRE. We did not allow it in that instance, and we did not allow it in any instance, sir. Mr. KNUTSON. Why were turkeys not cut? There is a bigger surplus of ducks and chickens in this country than there is of turkeys. Mr. SAYRE. Not because of anything that Mr. Robertson said or did. The CHAIRMAN. Will you return tomorrow morning at 10 o'clock, please? (At 4: 10 p. m., the committee adjourned, to reconvene on Thursday, April 15, 1943, at 10 a. m.) EXTENSION OF RECIPROCAL TRADE AGREEMENTS ACT THURSDAY, APRIL 15, 1943 HOUSE OF REPRESENTATIVES, Washington, D. C. The committee met at 10 a. m., Hon. Robert L. Doughton (chairman) presiding. The CHAIRMAN. The committee will please be in order. STATEMENT OF HON. FRANCIS B. SAYRE, SPECIAL ASSISTANT TO THE SECRETARY, DEPARTMENT OF STATE-Resumed Mr. REED. Well, Doctor, you went through quite an experience. We were all praying for your escape from the Philippines. Mr. SAYRE. Perhaps you will wish that your prayers were not answered. Mr. REED. I may not agree with you on some things, but I think you know how I feel about it. There is so much ground to cover here that it is very difficult to know where to begin. I would like to ask you this question because you are a lawyer. To what branch of the Government does the Constitution give the exclusive power to levy taxes and tariffs, and to regulate foreign commerce? Mr. SAYRE. The Congress. Mr. REED. It is true, is it not, that Congress cannot constitutionally delegate its legislative authority? Mr. SAYRE. If your question is, "May Congress shed its power to regulate commerce to others," the answer is no. Mr. REED. When the Supreme Court upheld the so-called flexible tariff, it did so on the ground that Congress had laid down a definite and an intelligible legislative formula for rate-making, which the President was bound to follow. Mr. SAYRE. That is true. Mr. REED. Then, can you cite me any comparable formula under the Trade Agreements Act? Mr. SAYRE. Yes, I can. Mr. REED. I would like to have it. Mr. SAYRE. Very well. I am afraid that it is going to take a few words. Mr. REED. I expect that. Mr. SAYRE. Whenever lawyers get to talking, it is trouble. You are quite correct, that the Constitution does confer upon Congress the power to regulate commerce, and Congress has not constitu tionally the right to shed that power, to divest itself of that responsibility by delegating it to others. On the other hand, it is equally manifest that the Constitution sets up an Executive to carry out the general policies laid down by the Congress, and it is obvious, and all of us agree, that Congress cannot possibly execute all the laws. Congress' function is to lay down the policies, give the directions, and then it is for the Executive to carry out those policies. Now, bearing in mind those principles in the flexible tariff provisions, Congress delegated to the President the power and responsibility, after investigation and recommendations by the United States Tariff Commission, to adjust tariffs within a 50-percent limit according to a standard laid down by Congress; namely, the difference in the cost of production between foreign prices, or rather foreign costs and domestic costs. There were questions arising in connection with the operation of that, questions which came before the United States Supreme Court, and the United States Supreme Court in a famous case laid down the principle that if an intelligible standard were laid down by Congress, the delegation of legislative authority to the Executive was permissible under the Constitution. Now, the question then which Mr. Reed asks is, Where do you find in the Trade Agreements Act an intelligible principle which constitutes a sufficiently definite standard so as to make the delegation of power by Congress to the President constitutional? Have I put that question clearly? Mr. REED. I think you have; yes. Mr. SAYRE. And the answer, I think, is this: In the first place, that delegation of power to the President under the flexible tariff provisions sounds definite; that is, the difference in the cost of production as between foreign goods and American goods, but in fact there is no precision possible, there is no real practicable standard fixed there in a precise or mathematical sense. Remember the testimony which Mr. O'Brien gave when testifying before this committee in 1934, and again in 1937, as Chairman of the Tariff Commission. He pointed out that it was utterly impossible with any kind of mathematical precision to determine the difference in the cost of production. Mr. REED. Pardon me just a moment. But the Court found there was such a formula, did it not? Mr. SAYRE. The Court did uphold that flexible tariff provision. Mr. SAYRE. That is the law, but the point of my remarks is that, first, it was not in any sense a mathematical standard. I want to show first how the standard laid down lacks any kind of mathematical precision, and on that I could give you quotation after quotation. I do not want to weary you with the thing, but as you can see for yourself, differences in costs of production depend upon such a multiplicity and complexity of factors that it is impossible to reach any kind of precision. Mr. REED. Is it not true that one of the chief functions of the Supreme Court is to prevent any encroachment by one department upon another? Mr. SAYRE. Yes. Mr. REED. They have laid down a rule? Mr. SAYRE. Yes. Mr. REED. And it is not for us to argue. We, of course, lay down the law, and that is what we are supposed to follow. Mr. SAYRE. We do follow it. I want to show, first, how unprecise that standard was in the case of the flexible tariff provision, and I am going on to show that the Supreme Court nevertheless upheld it, and why it upheld it, and show why the standard laid down in the Trade Agreements Act is more precise than the cost-of-production formula. I will quote the words of this very committee. The Ways and Means Committee of the House of Representatives, in 1937, speaking of that cost of production formula, said this: * Complete data can seldom be obtained, especially in forein countries, and when obtained are frequently of little value. Of agricultural products the costs tend to fluctuate widely from year to year with the vicissitudes of the weather. Joint products and byproducts offer a wide latitude for the vagaries of the cost accountants. In any country the costs are likely to be as numerous as the producers of the item. There is no such thing as "the" cost. Such variables as these, and others, reduce to complete absurdity the notion that this formula, which has all the outward aspects of a definite standard, is, in fact, any standard at all. I quote from the report of the year 1937, page 13, of the House Ways and Means Committee report on the extension of the Trade Agreements Act. Mr. REED. Of course, that is a committee report. There has been a tendency for some time now to try to avoid the real mandates of the courts and Constitution, and you find them in the committee reports from time to time. Mr. SAYRE. I can give you, if you do not want to abide by the report of your own committee, plenty of other quotations to the same effect or even much stronger. Mr. REED. I can give you a fairly strong report here. Do you recall that Secretary Hull, when a Member of the Senate, described the flexible-tariff provisions as "unsound," "unwise," "subversive of the plain functions of Congress"? Also, do you recall that he said this: The proposed enlargement and broad expansion of the provisions and functions of the flexible-tariff clause is astounding is undoubtedly unconstitutional and is violative of the functions of the American Congress. Not since the Commons wrenched from an English King the power and authority to control taxation has there been a transfer of the taxing power back to the head of the government on a basis so broad and unlimited as is proposed in the pending bill. As has been said on a former occasion, "This is too much power for a bad man to have, or for a good man to want." That is pretty high authority, especially in view of this Trade Agreements Act. Mr. SAYRE. Let me in turn ask you, would Senator Smoot be a man of strong appeal to you? Mr. REED. Yes; if he agreed with us. Mr. SAYRE. I am afraid that he does not on this point. Senator Smoot, who is of course the father of the 1930 Tariff Act, which we have heard so much about, said in the course of the congressional debates on the 1922 Tariff Act: it is an utter impossibility to find the cost of production |