cost of production formula. Now, I would say that the Supreme Court has by various pronouncements indicated with great clarity, it seems to me, that there can no longer be any question as to the constitutionality of this Trade Agreements Act. I refer to the case of United States v. Curtiss-Wright, decided in 1936, found in volume 299 of the United States Supreme Court Reports, page 304, a case in which the Supreme Court pointed out that this principle to which you have been adverting, that is, the legal limitations, the constitutional limitations under which Congress can delegate its powers, apply in matters of domestic concern with the rigidity which the Court spoke of in the decision, the Hampton decision, but that in matters of foreign affairs the Congress has far more leeway in delegating power to the Executive, and the Court goes on to say, if I may quote directly from the Court, quoting from page 324

Mr. REED. What case is that?

Mr. SAYRE. United States v. Curtiss-Wright. That is found in volume 299 of the United States Supreme Court Reports, at page 304. I am quoting now from page 324. The Supreme Court said:

Practically every volume of the United States Statutes contains one or more acts or joint resolutions of Congress authorizing action by the President in respect of subjects affecting foreign relations, which either leave the exercise of the power to his unrestricted judgment, or provide a standard far more general than that which has always been considered requisite with regard to domestic affairs.

In other words, in that Curtiss-Wright decision the Supreme Court goes out of its way to point out that in the field of foreign affairs, the Congress is not bound by the same limitations with regard to the delegation of power to the President that it is in the domestic field, and it goes on to say that in the Hampton case it was discussing a matter arising in the domestic field whereas here, of course, we are discussing tariff bargaining with foreign nations, a matter very distinctly in the field of foreign affairs.

Mr. REED. The President has broad discretionary authority in the case of Curtiss-Wright Export Corporation which you are referring to as decided December 21, 1936. I expected that you would say that. The case involved not foreign-trade treaties, but prohibition of the exportation of arms to certain South American countries.

Mr. SAYRE. Yes, sir. The court in that case, as I believe I was very careful to point out was not passing on the constitutionality of the Trade Agreements Act, but it went out of its way to lay down principles which, if true, would make it abundantly clear that the Trade Agreements Act is constitutional.

Mr. REED. We will never know that, Doctor, until some way is found to test this act in the courts.

Mr. SAYRE. Some of the lower courts have talked about it, but I do know that the Supreme Court has not passed directly on the constitutionality of the Trade Agreements Act.

Mr. REED. Like so many acts of recent years, they have practically taken away the right of appeal, and sooner or later there will be some way found undoubtedly.

Mr. SAYRE. I presume that you refer to section 516 (b).

Mr. REED. Yes.

Mr. SAYRE. I believe, you are mistaken in speaking about a "right" of appeal, if I may say so.

Mr. REED. All my statements that disagree with you are incorrect.

Mr. SAYRE. That was not a "right," if you remember; that was, in fact, an extraordinary privilege granted. Do you remember when it was first granted?

Mr. REED. Yes.

Mr. SAYRE. You remember it was quite recent.

Mr. REED. Yes.

Mr. SAYRE. As late as 1922. It was an extraordinary privilege, granted not to importers, but to producers. Such a procedure was unknown to our common law and, in fact, was a radical departure from customary and long-established procedures and precedents which had long been known to our courts and to Congress. The Supreme Court has held that it will adjudicate as to rights, but it will not pass on moot cases. I speak in general terms, of course.

Mr. REED. This particular provision to which you have referred was inserted on the floor of the Senate at the instance of the State Department. It was not considered either by the Ways and Means Committee or by the Senate Finance Committee.

Now, I would like to take up another point. It has been pointed out that of the 30 agreements which have been introduced, only 4 were put into effect without action by foreign legislative action. Why should the legislative bodies of foreign countries have more to say about our tariff rates than the elected representatives of the American people, in whom the Constitution places full authority over tariff rates?

Mr. SAYRE. Of course, as I pointed out before, the situation is very different in those foreign countries which follow the parliamentary system of government, and that applies, of course, to many of the countries with which we have made agreements. In such countries the prime minister is in control.

Mr. REED. Right there. On that question of the prime minister, is this not true: That the prime minister in most of these governments is a member of one of the legislative bodies?

Mr. SAYRE. Yes.

Mr. REED. So really that is not a very good answer that you make. He is elected by the people. He is a part of the body, the legislative body.

Mr. SAYRE. You are not suggesting that the President in this country is not elected by the people?

Mr. REED. But he is not a part of the legislature. We have the three distinct departments.

Mr. SAYRE. That is the point that I am making. In England, for instance, the Prime Minister is the leader of the legislature as well as the head of the executive.

Mr. REFD. That is why, when we have our trade agreements and we cannot find out anything here, we can find it out shortly through the channels of foreign governments-just what has been happening. Mr. SAYRE. I believe you are mistaken, sir.

Mr. REED. I know, you figure that those things aren't true, but that is only your opinion.

Mr. SAYRE. Let us take the case of England, for instance. When we were negotiating our trade agreement with England we knew that such promises as were made were made by the negotiators who represented the executive, and that the Prime Minister would of course, be

honored by the British Parliament because the Prime Minister controls the British legislature. That is the situation in all those countries having parliamentary systems of government, and, as you point out, here we have a totally different system where we have separation of the legislative, the executive, and the judicial branches; so it is an entirely different system.

Mr. REED. Now, the trade agreements, they are negotiated in secret proceedings at which representatives of foreign governments sit down with a group of you departmental people, and you are in a position under those circumstances to practically promote the interests of certain industries and destroy others if you wish.

Mr. SAYRE. Mr. Reed, could you see any other possibility, that is, you seem to object to the fact that officials representing the Executive in this Government negotiate with officials representing foreign governments. Is there any other way?

Mr. REED. What I am objecting to is that they have final authority. I still maintain that under our form of government the legislative branch should have some final say with reference to these agreements entered into in secret between a group-not the President himself nor the Secretary, but the delegated interdepartmental people-and you go on and work it out, and no matter how it affects our people we have to take it, while the representatives of the people have no opportunity, really, to pass upon it. I do not like that system.

Now, that is my own opinion. You may not like it because you are not of the legislative branch.

Mr. SAYRE. May I say it was Congress that set up this system. The power flows entirely from Congress. Congress laid down this policy, I think very wisely, as I tried to point out yesterday. We cannot possibly get foreign-trade barriers reduced except by bargaining, by international agreements with foreign countries.

The only way to do that that I know of which is humanly possible is through negotiation between officials representing the various governments. Now, Congress recognized that, laid down this power, and it is for Congress to say how the power shall be exercised.

Mr. REED. Dr. Sayre, perhaps in theory Congress may have enacted the statute, but at the time

Mr. SAYRE. But as a practical fact, Congress did enact that. Mr. REED. That was the idea when the Executive sent the bills up with a word "must" on them, event to the extent of asking that they be enacted "notwithstanding doubts as to the constitutionality" of the bills, and anything that was sent up in those days, unfortunately, was just rubber-stamped through the House and the Senate. You know that just as well as I do. Papers were full of it. There was nobody that would dispute it, and it is only recently that under a mandate from the people Congress is trying to recapture some of its constitutional powers, and I do not think that you could conceive of a greater delegation of powers than you have here. It is most dangerous because our economic structure is to too great an extent in the hands of a few departmental men. Now, under the mandate, the people are insisting that they still have some rights through their representatives, and until we do have you are going to find that the people are going to continue their fight to regain some of their powers. The only way you are ultimately going to save this program at all is

to have some forum in the legislative branch of the Government that has the final say upon the approval of these trade treaties.

Mr. SAYRE. May I answer?

Mr. REED. Certainly, if you can.

Mr. SAYRE. I think the answer to that, Mr. Reed, is that Congress is facing a very practical situation. Congress viewing the needs of the country sees that unless discriminations and barriers in foreign. countries against American goods are reduced to a minimum, we are going to have a repetition of the tragic story of 1929 to 1932, and you remember what the situation of the country was in 1932. In other words, the question is a very practical question: How can we protect American exports and consequently American domestic producers at home? One way would be by negotiating treaties. The Senate could retain its right to ratify every trade agreement that is made, every agreement for the reduction of trade barriers. What would be the result? We have been through that. As I was saying yesterday, in the entire history of the country only three tariff reciprocity treaties were ratified by the Senate and actually entered into force.

Mr. REED. May I ask a question right there? Would you say that in all those instances the Senate was wrong in exercising that right? Mr. SAYRE. I would say that it has proved itself an utterly impractical method for negotiating trade agreements if you want the job to be done.

Mr. REED. It is a question of what kind of a job you want done. The Senate is in a position to know something about the condition of this country, and after studying that treaty they certainly ought to have some idea of whether it is good or whether it isn't. The mere fact that they rejected some of these early treaties is no proof at all that the system is wrong.

Mr. SAYRE. You understate it when you say they rejected some of the early treaties. In the Dingley Act you have a very interesting parallel. Section 3 of the Dingley Act of 1897 provided that tariff agreements could be made by Executive agreement not requiring Senate ratification. Under that

Mr. REED. Pardon me, Doctor. Did Congress fix the rates and specify the items in those?

Mr. SAYRE. Yes; it was within narrow limits.

Mr. REED. They still were retaining their rights?

Mr. SAYRE. Oh, yes; but let me tell you what the history was. Even within that very narrow field which you point out correctly, section 3 allowed the making of Executive agreements, section 4 directed the President to make treaties covering certain other very restricted matters.

Mr. REED. Pardon me. approval?

Weren't those subject to congressional

Mr. SAYRE. I think it was Senate ratification.

Mr. REED. I would like to have you check that.

Mr. SAYRE. I would be glad to correct the record on that, but I am almost sure it was Senate ratification.

Mr. REED. I am quite sure I am right.

Mr. SAYRE. At any event, under section 3 agreements were negotiated and did come into force. Under section 4, requiring Senate

ratification, 12 treaties were negotiated by Mr. Kasson. Every single one of those failed to go through.

Mr. REED. Perhaps they ought to have failed, in the interests of this country.

Mr. SAYRE. Perhaps. I am not saying whether they should or should not. What I am pointing out is that every single one of them failed, that we almost never have been able to get two-thirds of the Senate to approve a treaty which involved a tariff reduction.

Mr. REED. May I ask you a question right there. You know that there has been any number of proposed amendments to the Constitution of the United States. Just because they have failed to get action at all. that they are just dormant, would you say we should have a system by which some inter-departmental group could trot them out and decide they were a good thing, and have them a part of the Constitution?

Mr. SAYRE. Of course no one is suggesting that.

Mr. REED. Of course, I know you are not suggesting it.

Mr. SAYRE. I am not saying that the Senate is right or that the Senate is wrong. I am pointing out a fact, that none of these tariff treaties which required ratification under section 4 was ratified. I think the conclusion is pretty evident. I am not judge. I quote Senator Norris in 1937, who was then a Member and a very respected Member of the Senate, and whose judgment I think all of us respect, who, speaking about that, said, and I quote from 81 Congressional Record, page 1598:

As to the particular amendment now pending, I can see how anyone could support it if he wants the joint resolution [to extend the Trade Agreements Act] defeated. As I see it, if the pending amendment should be adopted, we might just as well reject the whole proposal. As I look at it, the adoption of the pending amendment would be the death knell of the joint resolution.

I am not saying whether Senator Norris is right or whether Senator Norris is wrong.

Mr. REED. The people must have thought he was wrong. defeated him.

They

Mr. SAYRE. I don't know. I don't say whether he was right or whether he was wrong. But what I do say is that if foreign-trade barriers are to be reduced, and if a really practicable method is to be found for doing so, that method, judged by the experience of the past 100 years in the United States, is not through the method of treaties requiring Senate ratification.

Mr. REED. I just want to get the record straight on the 1897 act. Section 4 says:

That whenever the President of the United States, by and with the advice and consent of the Senate, with a view to secure reciprocal trade with foreign countries, shall, within the period of 2 years from and after the passage of this actMr. SAYRE. In other words, I was right, was I not?

Mr. REED. No

* and when any such treaty shall have been duly ratified by the Senate and approved by Congress

Mr. SAYRE. Then you were right, sir.

Mr. REED. I can't go back to check up. You said every time I have made a remark, "Well, that is not true."

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