the trade-strangling duties which the Republicans foisted on the country by the Smoot-Hawley law will be in abeyance. The lower duties which the trade agreements themselves provide will apply.

But international trade is always subject to constant change, and especially in fluid times like those through which the world is now passing. Circumstances may easily arise in which certain provisions of a treaty may become unsatisfactory to us or to the other signatory. If the Trade Agreements Act is extended it will be easy to deal with such provisions. Our representatives can then sit down with the representatives of the other country (after due notice to all those who may be interested) and work out a new agreement suitable to the altered circumstances.

But if the Trade Agreements Act is killed authority for such negotiations will be lacking; and if a treaty becomes unsatisfactory to us or to the other signatory the only way out of the difficulty will be to denounce it and allow it to expire after the necessary 6 months' notice. One by one the treaties may be expected to die in this manner, and as they die the Smoot-Hawley duties will come back into full force and effect. Should all the treaties be so wiped out the country would be back where we were in 1930, when the Smoot-Hawley law dealt the coup de grace to our foreign trade.

Does the Republican Party really want to assume responsibility for any such result? Does it really want to scrap machinery for adjusting tariffs to changing conditions and go back to the rigidities from which, to our great advantage, we have escaped? If it does not it had better pass the word along to Mr. Gearhart and his colleagues on the Ways and Means Committee before it is too late.

Mr. ROBERTSON. And then I find the same comment in the Washington Post today, and it reads as follows:

If the Republican drive against the renewal of the Trade Agreements Act is based upon the arguments of Representative Gearhart, of California, it is in a poor case, indeed. On Tuesday, in the hearings before the Ways and Means Committee, the Representative charged that the State Department had deliberately "encircled" Germany by its trade-agreement policy. He proceeded to find the proof in the fact that we made trade agreements with countries bordering upon Germany. "Thus," said the Representative, drawing a conclusion out of thin air, "we completely encircled Germany with privileges to which Germany was denied."

That isn't my statement; I am reading from the editorial.

I won't take time, if I can have unanimous consent to insert this in the record at this point.

The CHAIRMAN. Without objection, it may be inserted in the record. (News story from the Washington Post of April 15, 1943, is as follows:)

ENCIRCLEMENT

If the Republican drive against the renewal of the Trade Agreements Act is based upon the arguments of Representative Gearhart of California, it is in a poor case indeed. On Tuesday, in the hearings before the Ways and Means Committee, the Representative charged that the State Department had deliberately "encircled" Germany by its trade-agreement policy. He proceeded to find the proof in the fact that we made trade agreements with countries bordering upon Germany. "Thus," said the Representative, drawing a conclusion out of thin air, "we completely encircled Germany with privileges to which Germany was denied."

This was such a novel theory that it seems to have left the witness at the hearings of the Ways and Means Committee-Secretary Wickard-flabbergasted. Neither he nor anybody else, even in Germany itself, can have heard the argument before. The fact is, of course, that the "encirclement" of which the Nazis used to complain was not economic. It was military. Here they were, they said, condemned by the Treaty of Versailles to disarmament, yet all around them were nations which had not only not disarmed but also were banded together in hostile combination-France with Czechoslovakia and Poland, for example.

Time and war have shown the transparency of the Nazi "encirclement" argument. For we all know from bitter experience that while France and her neighbors were putting up defenses, the Germans, in spite of the Versailles

Treaty, were preparing a war of aggression with all the paraphernalia of modern warfare. Never has there been such military preparedness in all history. As we say, the veil of the "encirclement" argument has been torn aside, and Herr Goebbels would no longer dream of using it. In default he will doubtless grab this fresh version of the argument with which a Member of Congress has seen fit to present him. He won't bother about the facts, as Representative Gearhart doesn't. But they are worth recounting because the facts at one and the same time rebut the Californian's conclusion and add another argument in favor of the Hull program.

It was on Germany's own initiative that the benefits of our trade agreements were denied to Germany. Berlin insisted on keeping its hands free of that clause in our trade agreements which passed on benefits to all nations with which we were in treaty relation. This clause is called the most-favored-nation clause. There was such a clause in our commercial agreement with Germany. But, since the Germans wanted to get rid of it, this country was asked to negotiate another agreement without it. This we did on June 3, 1935. For what reason did Germany disentangle herself from the most-favored-nation clause? Precisely because she wished to adopt a rival commercial policy aimed at building up her fearful war machine-a policy based upon discrimination. By excluding this country from the benefits of her commercial agreements, she was enabled to shut this country out of markets in the Balkans and in South America.

Discrimination against American commerce became so widespread that at last we decided to recognize the fact. We saw it for what it was. German trade policy had become unabashedly an insurance of war. Our trade policy, on the contrary, was an insurance of peace, and the Germans were seeking to enjoy its benefits while denying us any benefits in return. Accordingly on October 25, 1935, the President directed that in return for German exclusion Germany should be denied the benefits of our trade agreements with other countries. Representative Gearhart seems to have encircled himself in nonsense and worse.

Mr. ROBERTSON. So you take the position now that this isn't a question of a Democratic program or a Republican program, it is an economic issue, and we are seeking to promote the general welfare of our Nation.

Now will you discuss that last amendment?

Mr. SAYRE. Yes, sir; I will be glad to.

The fifth amendment, to quote again from the report in the Washington Post, reads as follows:

A stipulation that the United States may not extend the most-favored-nation principle to any country which does not extend the same privilege to this Government. Hull repeatedly denied before the committee that his trade agreements allow other nations benefits which the United States does not receive in return.

This amendment, I take it, Mr. Robertson, would be to the effect that language should be introduced in the Trade Agreements Act providing that the unconditional most-favored-nation policy should not be followed under the act. Am I correct, Mr. Gearhart?

Mr. GEARHART. That is it.

Mr. SAYRE. I think the objection to that is again just as manifest as the objections to these other amendments. Remember that the whole objective of the trade-agreements program is twofold; one, to reduce trade barriers; that is, to get down to manageable levels these excessive trade barriers which still exist, both in this country and abroad; and second, to prevent discrimination, to prevent discrimination by foreign countries against American exports and American goods. And that second objective is just as important as the first, because if you once have discrimination you invite-you almost insure-retaliation and discrimination against your own goods, with the result of mounting trade barriers and a drift in the direction of autarchy and economic isolation, of which I have spoken so often.

Mr. ROBERTSON. How many trading nations are there in the world?

Mr. SAYRE. How many what?

Mr. ROBERTSON. Trading nations.

Mr. SAYRE. You mean industrial nations as distinct from others? Mr. ROBERTSON. Those that could get into cahoots against us on this trade business.

us.

Mr. SAYRE. Every nation in the world could get into cahoots against

Mr. ROBERTSON. There are about 154 of them, aren't there?

Mr. SAYRE. Every nation in the world could, and perhaps every nation in the world would, if we choose to follow this policy of nonequality of treatment.

Mr. ROBERTSON. That is the point I want to develop. We make a two-way agreement with one nation. We give them benefits, they give us benefits. And 152 nations are excluded from those benefits. Then they will get together and make an agreement

Mr. SAYRE. Of course they will.

Mr. ROBERTSON. An agreement that excludes both of us from it, and we have started a trade war.

Mr. SAYRE. Of course they will, and that is precisely what happened following 1929 all over the world. That is to say, it sounds very plausible and very attractive to give an exclusive preference to another nation and thereby get an exclusive preference in return. You are, seemingly, benefiting your own exporters and your domestic producers by doing it. But the evil is, and the sure effect of that is this: Every exclusive preference given to one nation is a discrimination against every other nation in the world, so that once you grant an exclusive preference you are going to have retaliatory discriminations exercised against American goods all over the world.

In other words, you have these two alternatives, one to treat everybody alike. That was the policy which President Washington laid down. You remember I quoted from his own language yesterday. He said we must treat all nations on a basis of equality, treat everybody alike. I think that is one of the underlying American traditions, to give all fair and equal treatment. And the alternative is these exclusive preferences.

Measured in dollars and cents, I think there can be no question as to which is the more profitable policy. Remember, I quoted to you yesterday I spoke in my opening statement yesterday-and gave you illustrations, one taken from the French trade agreement, which we made. Under the French tariff there were three rates, a minimum, an intermediate, and a maximum. Before our trade agreement with France we were discriminated against in thousands of items by having to pay intermediate or maximum rates.

In the French trade agreement which we made the provision requiring most-favored-nation treatment on each side, that is, equality of treatment, automatically and at once swept away almost all of these discriminations against American goods, and from then on we continued to enjoy minimum French tariff treatment with a few very slight exceptions, unimportant to us because they involved almost no American exports.

And similarly, in the Canadian trade agreement, by virtue of the most-favored-foreign-nation provision in that agreement, at once and automatically we enjoyed with respect to over 600 rates minimumtariff treatment from then on, a volume of trade constituting in the

past up to 30 percent of Canadian imports of American goods. That was and is a very real advantage to American exports.

What does the alternative mean? If we departed from our mostfavored-nation policy, it would mean we would have to scrap some 40 or 50 treaties and agreements by which we are bound today, many of them made long before the trade-agreements program came into effect. As a matter of fact, from the time of Washington we have followed in practice equality of treatment. And, you remember, in 1923 Secretary of State Hughes and President Harding inaugurated, or at least established, the practice of negotiating American treaties henceforth in the unconditional form. And from then on many treaties and agreements have been negotiated, based on the unconditional mostfavored-nation policy.

Now, if you depart from your most-favored-nation policy, from your equality of treatment, it would mean, first, the abrogation of all those treaties and agreements. That would leave American exports entirely without protection. Other countries would begin a process of discrimination against American goods, and you would find yourself in a very welter of trade wars and discriminations which would prove gravely injurious and disastrous to American trade.

Mr. ROBERTSON. If we were foolish enough to abandon the mostfavored-nation policy, which was first inaugurated by a Republican administration, as you have previously pointed out, and seek to negotiate a bilateral agreement, that affected some protection now enjoyed by some American industry, is there anything in the past history of the negotiation of reciprocity agreements or treaties that would indicate that the elimination of the most-favored-nation policy would make it any more acceptable if the treaty had to be ratified by the Senate? Mr. SAYRE. I am not sure that I understand your question. Mr. ROBERTSON. Will the reporter read it? It is quite long. (The reporter read the pending question.)

Mr. SAYRE. So far as I can judge, Mr. Robertson, the answer is "No." The Republican Party has come out squarely for the unconditional most-favored-nation form of treatment. In fact, that policy was in fact sponsored as I said, by a Republican Secretary of State, Secretary Hughes, and by President Harding. The Republicans, I think, as well as the Democrats, realize that it is the only practical policy that can be followed, so as to protect American trade. I do not think this is a partisan matter or partisan issue. I think it is a question of, practically, how can you take care of and promote American foreign trade? I don't think there are two sides to the answer. I think the answer is almost compelling to those who study the intricacies of foreign trade, that equality of treatment is the only possible policy which will protect American interests.

Mr. ROBERTSON. The gentleman from New York, Mr. Reed, brought up the question of the reciprocity agreements that were negotiated during the McKinley administration, known as the Kasson agreements, and there were 7 or 8 of those that had only a modified mostfavored-nation policy in them, and when they were presented to the Senate in 1900 there were 53 Republicans in the Senate and only 26 Democrats. McKinley couldn't get them out of committee, and his successor, "Teddy" Roosevelt, tried until 1903 and then gave it up as a bad job. They never even came out of the committee. Isn't that

true?

Mr. SAYRE. Yes, sir.

Mr. ROBERTSON. And the Senate has never ratified any of these agreements, no matter who was in power. The Republicans certainly had control of the Government under McKinley.

Mr. SAYRE. I think we are forced to conclude that the method of Senate ratification is an impractical method if you want to get the job done.

Mr. ROBERTSON. We are going to be honored tomorrow with a southern commissioner of agriculture; at least I understand he is scheduled to testify tomorrow. His name is Mr. Tom Linder, and he is commissioner of agriculture of the great State of Georgia, and he has been kind enough to give us a preview of his views in the Wednesday, April 14, 1943, issue of his paper, called Georgia Farmers Marketing Bulletin. He has raised some questions in this leading editorial on which he will no doubt expand tomorrow, at which time we may not have the opportunity to fully explore by departmental experts, so I am going to take the liberty of bringing one of his assertions to your attention and get the answer. I read from his editorial:

Congress was asked to create the Agricultural Adjustment Administration to limit farm production in this country. The same Congress was asked to pass, and did pass, a law providing for special trade agreements. These special trade agreements were passed to permit the importing into this country of farm products which the American farmers are not allowed to produce in sufficient quantity for our needs. Both acts were passed in 1933.

That year is just about as accurate as everything else in his article. I quote again:

It is hard to understand why Congress would have been so gullible; to pass the Agricultural Adjustment Act in 1933, to reduce and limit the American farm production, was bad enough. For the same Congress the same year to flood this country with like agricultural products from all over the world is astounding. What were the four of five basic crops in the first A. A. A. Act to which this Commissioner of Agriculture refers?

Mr. SAYRE. Well, of course, this is out of my field. These are questions which should be answered by a representative of the Department of Agriculture. But I take it that this quotation refers to the oft-repeated assertion that you had great importations of corn and of various other commodities which are often reported to have flooded this country.

Mr. ROBERTSON. Let me put those basic products in for you, so we can proceed from that point. They are corn, wheat, cotton, rice, and tobacco.

Did we cut the duty on corn?

Mr. SAYRE. Not on corn imported from any country other than Cuba.

Mr. ROBERTSON. And only last year, when the war need for longstaple cotton became so acute, did we make a modest reduction in long-staple cotton as a war measure, and we did have an agreement with Cuba that made a slight reduction on Havana tobacco, that some of our smokers think is superior to our domestic product, and we made a slight reduction in an agreement with the Netherlands on Sumatra wrapper, and I believe it was that type of cigar of which Kipling says, "A woman is only a woman, but a good cigar is a smoke," and some people think the Sumatra wrapper is very superior.