Finally, I would like to suggest that the extreme care with which the whole negotiating procedure has been developed and elaborated in the light of accumulating experience places a heavy burden of proof upon those who would have it modified so as to make public the terms of each agreement considerably in advance of its proclamation, with all of the complications to which that would inevitably lead. In complicated negotiations with foreign countries there must come, at some appropriate stage, a halt to further higgling and haggling and uncertainty with regard to the contents of the agreement. That is one reason why it is necessary to set up and maintain a trade-agreements organization which reduces to a minimum the number of errors of fact or of judgment that can creep into the completed and signed document. The men who work on the program are responsible public servants, concerned first of all with the national interest, and not with any exclusively local or class interest; and while they are not infallible, there ought to be a strong presumption that the decisions arrived at under the process which I have described are responsible and wise decisions in all of the circumstances.

Nevertheless, there is ample opportunity, under the program, to deal with situations not foreseen at the time of the negotiations and to remedy any mistakes that may be made. Some situations that can be foreseen are already specifically taken care of in the agreements themselves. There are, for example, provisions in some of the agreements which call for the imposition of higher rates of duty on certain specified items than the rates now in effect under the agreement, such higher rates to come into effect as soon as the existing emergency, as specified in the agreement, is found by the President to have terminated. But in addition to such special provisions, the so-called escape clause of the trade agreements has been formulated in such manner as to permit us, under a specified procedure, to deal with any unforeseen emergency that may arise which threatens serious injury to any industry affected by the agreement.

In short, what I want to stress in this connection is that the machinery already set up is flexible enough to deal with any essential needs that may arise under the program. From the time when the act was first passed, changes in procedure have been made from time to time for the purpose of improving it; and no doubt others will be made in the future. Meanwhile we need to beware of requiring by statute changes which would tend to subordinate national to purely local or group interests. Otherwise, it would be difficult, if not impossible, to achieve the objectives set forth in the act.

I thank you, gentlemen. That closes my prepared statement. Mr. MILLS. In the past few days, my good Republican brethren on the committee have boasted of the fact that under the SmootHawley Tariff Act two-thirds of our imports were on the free list. Is it not true that if, under that act, they had raised the duty on all competitive imports high enough, 100 percent of our imports thereafter would have been on the free list?

Mr. EDMINSTER. Yes, Congressman, it is true that 100 percent would have been on the free list, and that leads me to make some further observations on that particular shenanigan.

That statement, which is intended to suggest that our tariff is low-that two-thirds of our imports enter free is the formula-while true as regards the figures that two-thirds of our imports do enter

free, is in its implications one of the most misleading canards that has ever been diffused throughout the country in connection with tariff discussions.

There are two kinds of lies--black ones and white ones. That is the white kind, which almost always is the worst kind. I do not think it is used maliciously; I think it is just not understood.

Now, why is that? If you make an analysis of it, look how absurd it is to offer a formula like that as indicating that the tariff is low. You are trying to measure the height of the tariff by simply taking account of what gets in; you take no account of the trade that is cut out by reason of the height of the duties which are maintained. Now, as the Congressman has pointed out, to show how utterly absurd that is

Mr. DEWEY. Mr. Chairman, may I interrupt here? Mr. Mills said something about "our Republican brethren." The witness replied in a manner I disapprove. I do not like to be put in the category of being a liar, either white or black, or a shenanigan, or whatever word he used. I do not think it is necessary to employ that kind of language and "canard"—if the witness disagrees with the position taken by the gentlemen on this side. I think we can get into this argument without employing language of that kind.

Mr. REED. Pardon me, but as I said the other day, they are following the Hitler technique. Anything that goes wrong or did go wrong with the German Republic, they holler "Jews." That is the Hitler technique. Over here they do the same thing, but holler "Republicans.

Mr. DEWEY. Personally, I challenge any insinuation like that, and I suggest the witness proceed in order.

Mr. EDMINSTER. I accept your suggestion.

Mr. ROBERTSON. The chairman understood the witness to say that statement was due to a lack of understanding of what was comprehended and meant by it. I do not think the witness intended to be personal in his remarks.

Mr. EDMINSTER. That is quite correct.

Mr. DEWEY. I seldom take notice of anything like that, because the shoe never fits me; nevertheless, I would like to suggest that the witness proceed in order.

Mr. EDMINSTER. Thank you, sir, for the warning. I will endeavor to do so.

Mr. JENKINS. Mr. Chairman, the gentleman, Mr. Mills, asked a very simple question and five words would have answered it. Now this gentleman has taken 5 or 10 minutes. It indicates he has a stage set here and I am glad my colleague, Mr. Dewey, has set him right; because I was getting ready to do the same thing. Now, if he has come up here to put on a side show I can advise him this is not a good place to put on a side show.

Mr. GEARHART. I would have said something, but I was afraid I would be denounced as being pro-German.

Mr. ROBERTSON. If there are no further comments, the witness may proceed.

Mr. EDMINSTER. I was going to say, if you raised the tariff high enough on the dutiable items, then of course you would eventually reach a point where no dutiable products would come in. Then you would have a condition where all of the imports actually entering the

country came in free of duty; but, of course, you would not have free trade. In other words, if you use that formula and you press it to its logical conclusion, you arrive at a point where you are practically saying "the higher the duty, the lower it is; the higher the tariff, the lower the tariff." That is the inherent fallacy in that argument. And if I have unintentionally reflected on any committee member's integrity, I most earnestly apologize. It was not my intention to do that. I thought I had made that clear; if not, I repeat it.

Mr. KNUTSON. I believe you are Vice Chairman of the Tariff Commission?

Mr. EDMINSTER. Yes.

Mr. KNUTSON. How long have you been connected with the Commission?

Mr. EDMINSTER. Since July 1, 1942.

Mr. KNUTSON. In what business were you before you went in the Commission?

Mr. EDMINSTER. I was special assistant to the Secretary of State at the time when I was appointed to the Commission. Do you want. me to go back further?

Mr. KNUTSON. Yes; we would like to have your background, to see how you qualify for your position and, if you will go back, I would appreciate it.

Mr. EDMINSTER. I was graduated from Harvard University in 1916. I was in the Army during World War I. I was on the staff of the Tariff Commission for 3 years, after being mustered out of the service.

Mr. COOPER. A little louder; we cannot hear you.

Mr. EDMINSTER. I say I graduated from Harvard University in 1916; I was in the Army during World War I. After being mustered out of the service I went to the Tariff Commission as an economist on its staff, and was on the staff for 3 years. From there I went to the Brookings Institution and was on the staff of the Brookings Institution here in Washington until 1930, except for 1 year when I was at the University of Virginia as an exchange professor. I then went to the Department of Agriculture for a period of 5 years, where I was principal economist in the Bureau of Agricultural Economics and later Chief of the Import-Export Division of the Agricultural Adjustment Administration. From there I went to the State Department in 1936. I was for a time principal economic analyst of the Trade Agreements Division. In 1938 I was made special assistant to the Secretary of State, which position I held until I was appointed, last year, as a member of the Tariff Commission.

Mr. KNUTSON. Then you have not had any practical business experience?

Mr. EDMINSTER. No, sir.

Mr. KNUTSON. Does the Tariff Commission, as a body, sit in on any of the conferences held on proposed trade agreements?

Mr. EDMINSTER. You are referring to the operations of the Interdepartmental Trade Agreements Committee, I suppose?

Mr. KNUTSON. Anywhere along the line.

Mr. EDMINSTER. The Tariff Commission, as a body, does not sit in. Mr. KNUTSON. It does not, as a body?

Mr. EDMINSTER. That is right.

Mr. KNUTSON. I got the impression from Dr. Sayre's testimony that they were consulted as a body; but I was a little doubtful about it. It may be I did not just catch the answer.

Now, would you describe to us the procedure that is followed when an industry of this country finds that a particular trade agreement is working to its disadvantage?

Mr. EDMINSTER. Well, if there is some item in the agreement which has led to a critical situation or a difficult situation which requires further attention, the matter would be taken up through the Committee for Reciprocity Information-that is, any representations from industry or trade-through the process I have described in my statement, and would then be taken up with the Interdepartmental Trade Agreements Committee.

Mr. KNUTSON. I came in late, having been detained by another conference with six of the members of the committee, and that is the reason we were not all here when you started this morning. Would you refer me to the page of your statement?

Mr. EDMINSTER. On page 10, in the middle of the first paragraph, the sentence starting

Not only that, but the committee holds itself in readiness at all times to grant informal conferences with interested parties to discuss either products under consideration for inclusion in an agreement or any problem which has arisen with respect to any agreement already concluded.

Mr. KNUTSON. Of course I did not have the idea you would refuse to hear anyone who has been aggrieved; I do not want you to think that was my understanding, but what I would like to know is what are the steps taken to give him relief. Say a pottery manufacturer finds he is being put out of business by imports from another country and comes before you and shows by his books that he has been forced into the red by the operation of a trade treaty, what are the steps taken to give him relief?

Mr. EDMINSTER. If the situation is sufficiently serious, the escape clause of an agreement can be invoked.

Mr. KNUTSON. Has it ever been invoked?

Mr. EDMINSTER. I think it has been used to bring about some adjustments. I cannot at the moment recall the cases.

Mr. KNUTSON. Well, we are not dealing in "thinking" here; we are trying to get cold facts. Now, do you know of any case where it has been invoked?

Mr. EDMINSTER. I do not recall at the moment, but I think it has, and I will try to fill in that statement, to get that definitely and put it in in response to your question. I cannot answer your question definitely now; I do not know.

Mr. KNUTSON. Have you anyone here who can give us that information?

Mr. EDMINSTER. I am reminded there was the case of silver-fox furs from Canada. A critical situation developed in the domestic industry because so many furs, after the war broke out; were being diverted to this country from abroad. The result of that was that not one, but two, successive supplemental aggreements were entered into with Canada which involved putting a quota on shipments into this country and which led to the relief of the silver-fox fur producers. That is one case; I have no doubt there are others, but I am not able at the moment to think of them.

(Information concerning the supplementary agreements with Canada relating to silver foxes and silver fox furs follows:)

SILVER OR BLACK FOX FURS, DRESSED OR UNDRESSED

The duty on silver-fox furs, dressed or undressed, was reduced from 50 percent to 371⁄2 percent ad valorem in the trade agreement with Canada, effective January 1, 1939. During 1939, imports of silver-fox furs were large and threatened to become even larger in 1940. The outbreak of war in 1939 closed the principal European markets for fox furs produced in Norway, Sweden, and other European countries and producers in these countries began to dispose of their large stocks of furs in the United States. Realizing that a tariff much higher than that provided under the act of 1930 would not keep out the unusually large imports that threatened the domestic industry and that something had to be done quickly to avoid serious injury to domestic silver-fox fur producers, the domestic industry requested the Committee for Reciprocity Information to consider the matter. It was found that the only law under which anything could be done was the Trade Agreements Act. As a result, negotiations were instituted with Canada, a public hearing was held, and a supplementary agreement, relating only to the treatment of silver foxes, silver-fox furs, and related articles, was signed on December 30, 1939; this supplementary agreement became effective on January 1, 1940.

The supplementary agreement with Canada limited the total imports of live silver foxes, furs, etc., to 100,000 units in any 12-month period, beginning December 1, 1940; for the period from January 1 to November 30, 1940, the limit was set at 100,000 less the number imported during the month of December 1939. The agreement allocated these import quotas between Canada and other foreign countries on the basis of imports into the United States during the first 11 months of 1939. In the 12-month period beginning December 1, 1940, the share allocated to Canada was 58,300 units; to all other foreign countries it was 41,700. Imports during any single month were limited to 25 percent of the number permitted to be entered during the quota period. In the agreement of January 1, 1939, there were no quota limitations in imports of silver foxes and silver-fox furs. In return for Canada's acceptance of the quota restrictions on her exports of silver foxes and silver-fox furs to the United States under the supplementary agreement, the United States further reduced the duty on the limited imports fixed by the quota to 35 percent ad valorem.

A second supplementary agreement with Canada relating to live silver foxes and silver-fox furs was signed on December 13, 1940, became effective on December 20, 1940, and is still in effect as of the time of these hearings. Under this agreement, which supercedes the agreement of December 1939, total imports into the United States of live silver or black foxes valued at less than $250 each and whole silver or black-fox furs and skins in any 12-month period beginning December 1, 1941, or any subsequent year, are limited to 100,000 units. For the period from December 20, 1940, to November 30, 1941, the quota was 100,000 less the number, imported during the period from December 1 to December 19, 1940. This agreement also provides for the allocation of shares of the quota to Canada and to other foreign countries. The share allocated to Canada in any 12-month period beginning on December 1 is 70,000 units and to all other foreign countries 30,000. This allocation is based on United States imports of live silver foxes and silver-fox furs in 1939. During 1939 and previous years United States imports of fox furs reported as from the United Kingdom had consisted of Canadian furs and furs from other producing countries. This indirect trade had ceased as a result of the war. In order to take into account this change in trade conditions, imports from the United Kingdom were excluded from total imports in 1939 in calculating the shares of United States imports to be supplied by Canada and other countries. The exemption in the second supplementary agreement of live silver foxes valued at $250 or more each from the quota limitation is intended to permit freer importation of the animals for breeding purposes.

In addition to the quota on live animals and whole furs and skins, the second supplementary agreement establishes separate unallocated quotas for parts and articles of silver fox furs. The reduced duty of 35 percent ad valorem on silver fox furs is continued in the second supplementary agreement.

Mr. KNUTSON. Was the Commission ever appealed to by the pottery people in connection with imports from Japan, before Pearl Harbor?