Mr. EDMINSTER. Well, I was not on the Commission at that time; I could not answer that with certainty, but I would suspect it was. (The following information was supplied by Mr. Edminster:)

There were, from time to time, informal complaints from members of the industry to the Tariff Commission regarding action under section 336 of the Tariff Act. In 1933, in response to an application from the United States Potters Association, the Tariff Commission ordered a formal investigation under section 336. This investigation was in progress when the President directed the Tariff Commission to make an investigation under section 3 (e) of the National Industry Recovery Act. The latter investigation was completed in 1935 and a report thereon was published by the Commission in 1936.

Mr. KNUTSON. You were connected with the State Department, I assume, in connection with the preparation of the treaties that were being negotiated, were you not?

Mr. EDMINSTER. Yes. I sat in on many of the discussions in the Interdepartmental Trade Agreements Committee; but, at the moment, I cannot answer your question.

Mr. KNUTSON. Well, have not you someone here who can answer these questions? I should think you certainly would have someone with you who could answer questions. Of course, if the witness cannot answer questions, Mr. Chairman, I am through.

Mr. ROBERTSON. Ón the point just raised by the gentleman from Minnesota (Mr. Knutson), did not we have a trade agreement with Switzerland under which we made a concession on embroidered handkerchiefs and, when it was found China was getting the major benefit of the concession, we acted under the escape clause, which provides where a concession is given to one country and a third country gets the major benefit, that we can cancel that particular concession? Was not that done?

Mr. EDMINSTER. I think it was; yes.

Mr. ROBERTSON. At one of our hearings, we had a great many representatives of industry to appear and complain that they had been hurt. It is my recollection, at least my opinion, that of all the alleged industries the best prima facie cases were made out by the lace industry and the zinc industry. Were those matters, after the negotiation of those treaties, fully investigated on the complaint of those industries, by the Tariff Commission?

Mr. EDMINSTER. Yes.

Mr. ROBERTSON. And what was the result of those investigations? Mr. EDMINSTER. On the basis of the findings, no action was taken. Mr. ROBERTSON. There was complaint, I believe, about Japanese pottery being imported, in 1934, under the price-fixings on the N. R. A., but do you recall any complaint on the importation of Japanese pottery under the Trade Agreements Act?

Mr. EDMINSTER. I do not recall any.

(The following information was later supplied by Mr. Edminster:) There has been no formal complaint or protest on Japanese pottery in connection with the operation of the Trade Agreements Act.

Mr. ROBERTSON. As a matter of fact, in 1939, as has been pointed out already, 94 percent of our pottery imports affected by trade agreements came from the United Kingdom. Subsequent to that time, I believe 100 percent has come from that source. Is not that true?

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Mr. EDMINSTER. The great bulk of it, of course, does come from the United Kingdom.

(The following information was later supplied by Mr. Edminster:) In recent years practically all of our pottery was imported from Japan and the United Kingdom. There have been practically no imports from Japan of the types of pottery covered in the trade agreement.

There was a 30-percent reduction in the rates of duty on imports of china and earthenware of the types on which tariff concessions were made. If all pottery is considered, and not merely that on which concessions were given, the average reduction in duty would be much less than 30 percent.

The reduction of import duties in the trade agreement has not had any very great effect upon the imports of pottery since 1939. On the types on which concessions were granted the ratio of imports to United States production increased only from about 4 percent in 1939 to 4.9 percent in 1940, and 5.5 percent in 1941. Practically all of the imports of pottery on which concessions were given have come from the United Kingdom since 1939. No concessions have been given on imports of the types of pottery formerly imported from Japan.

Mr. ROBERTSON. On yesterday, the gentleman from Texas, Mr. West, raised the point that some foreign nations, when they got a concession from us on something that we planned to import, would promptly impose a countervailing export duty on the item that offset the advantage we were planning to give to the American consumer. Will you tell us what you know about that proposition?

Mr. EDMINSTER. Well, I know it has been stated that there have been some actions taken by certain countries, as for example, Mexico, with regard to the imposition of an export tax on an item on which we had made a concession.

(The relevant information is as follows:)

The Government of Mexico has imposed a general tax of 12 percent ad valorem on the exportation of numerous products for several years, for revenue purposes. The rate of tax remains constant at 12 percent; however, the valuations, which are used as a basis for assessment of the tax, are changed when market prices change substantially. These valuations have usually been considerably below actual market prices. Since the conclusion of the trade agreement with Mexico, effective January 30, 1943, the valuations for assessment of the Mexican export tax have been increased on a number of items, including tomatoes, peas, pepper, and cattle, on which this Government granted concessions in its import duties in the Mexican agreement. The tax increases were not as much as the decreases in the United States duties. For example, the increase in the export tax on tomatoes was equivalent to about 14 cents per lug as compared with a reduction of 50 cents in the United States duty on tomatoes. In the case of cattle, the export tax was increased slightly over $1 per head as compared with a reduction of over $6 per head in the United States duty.

The CHAIRMAN (Mr. Doughton). Will you speak a little louder? Mr. EDMINSTER. I say I know it has been stated there have been cases where an export tax has been imposed in connection with an item on which we had made a concession. I believe it was pointed out that, in the Mexican case, the export taxes imposed were only small fractions of the amounts of the concessions made, and I think it was also pointed out yesterday that, of course in wartime, it would be difficult for us, in negotiating an agreement, to take the position that a country which wanted to restrict the export of an item for national defense reasons could not do so, any more than we would wish to undertake the same obligation.

I quite agree, however, with the reasoning that was set forth-I believe Congressman West spoke of it yesterday-that it would, under normal circumstances, be a futile proceeding for us to grant a concession on an item and then turn around the next day and find that the full

amount of that cut had been absorbed by the imposition of an export tax by the other country on that item. I mean, I think the reasoning there is perfectly obvious.

Mr. ROBERTSON. Doctor, may we have your assurance on behalf of the Tariff Commission, which is an impartial fact-finding body, that as to existing agreements and any agreements hereafter negotiated, the Tariff Commission will watch any maneuvers of that kind on the part of a contracting nation by which they might nullify the program that we intended to put into effect, by the device of imposing an export duty or increasing an export duty on a competitive item on which we have agreed to reduce our import duty?

Mr. EDMINSTER. Why, yes. We would naturally be very glad to keep watch of that and to bring it to the attention of the tradeagreements organization, if it is not already aware of it. It would be a matter that the whole trade-agreements organization should be aware of.

Mr. ROBERTSON. And my colleague from Texas, Mr. West, suggests to me he wants you to do more than to watch; he wants you to take whatever action may be necessary.

Mr. JENKINS. Let me ask you some questions, if you please. I think you stated that you had been on that Commission for a year and a half, or something like that.

Mr. EDMINSTER Less than a year; since July 1 of last year.

Mr. JENKINS. As I understand it, this Commission is supposed to be bipartisan.

Mr. EDMINSTER. Yes, sir.

Mr. JENKINS. Is this bipartisanship generally known? In other words, I don't know who is who and what is what down there. Can you tell me what are the classifications of the personnel of the Commission from the standpoint of politics?

Mr. EDMINSTER. Yes, sir. There are four members serving on the Commission now. There are six places by statute, but there are four members serving, two Republicans and two Democrats. The two Republicans are Commissioner Brossard and Commissioner Durand; the two Democrats are the Chairman, Mr. Oscar B. Ryder, and myself.

Mr. JENKINS. What is the reason the full complement of the Commission hasn't been appointed?

Mr. EDMINSTER. I think sir, that it is largely economy reasons. Mr. JENKINS. That is the first economy I have heard from the New Deal.

Mr. EDMINSTER. I thought you might be glad to hear that.

Mr. JENKINS. I am, indeed, very glad. Personally, I think there could be further economies.

Let me ask you another question. A goodly number of our colleagues weren't here when you read your statement. I am sorry they weren't here. You prepared a statement and read it, and personally I don't want to be discourteous in the least, but I can't for the life of me see how it is going to contribute anything to help us to make a decision, because you only deal with a few historical facts with reference to the committees and the subcommittees that you have down there, and which operate in this work. In other words you, as a member of this Commission, don't volunteer any suggestions or any arguments with reference to this very important measure, but

still you devote, out of 16 or 17 pages, about 1 page to a discussion that might be considered as philosophical, and the rest of it is historical about very immaterial matter.

Now, then, I want to ask you a question about the first part of your speech.

Mr. EDMINSTER. Yes, sir.

Mr. JENKINS. I want to say, for the benefit of my colleagues who were not here to hear it, that this, I think, is the acme of nothingness from the standpoint of a man who ought to be here to tell us about what we are about to do.

Let's go down to the bottom of the second page, the last paragraph on the bottom of the second page, to see what you mean there:

The critical economic situation which prevailed in this country and throughout the entire world at the time of the original passage of the act in 1934 is something that none of us has forgotten.

Mr. EDMINSTER. Did you say the bottom of page 2?

Mr. JENKINS. The bottom of page 1, the second sheet.

There had set in, at the end of the twenties, one of the severest economic depressions-in scope, intensity, and duration-ever experienced. There were, of course, many contributing factors.

You are very charitable there. You say there were very many contributing factors. Then you go on,

But all authorities without exception, so far as I am aware, recognized from the very first that the progressive undermining of sound international economic relations in the twenties and their virtual collapse into anarchy in the early thirties were among the root causes.

Now I want to know where in this country was there any anarchy or any violent collapse, as you describe it. What did you mean by that?

Mr. EDMINSTER. I meant what the statement said, that the general situation in the world was one of economic chaos, what we sometimes call economic anarchy. That does not mean that there is political anarchy in any country, much less our own. That is a rather familiar expression, isn't it-an international state of anarchy, disorder in international economic relations? I use "anarchy" in the sense there of disorder, and I am very glad, if you would like me to do so further, to elaborate what I meant by that.

Mr. JENKINS. I would like for you to tell us where the anarchy was. Why would you put up such a build-up as that, sir, for that little, puny stuff you have that follows?

Mr. EDMINSTER. To answer that question, I think I made clear at the start of my remarks that I did not propose to go into a long discussion of the reasons that I felt would justify or warrant the renewal of the act, because they had been elaborated so fully by others. I simply tried to state them briefly, but if you want me at this juncture to elaborate, I will be glad to do so.

Mr. JENKINS. I just want to bring out this statement. I want my colleagues to know that you laid the ground work, you said there was anarchy in this country, and then go on to say this:

Furthermore, they recognized that the rise of trade barriers throughout the world to ever more forbidding heights, accompanied by a precipitous decline in international trade, were in a large measure responsible for the general derangement.

Now then, you state that we had a terrible, cataclysmic, anarchistic condition in this country. You say that so that you can then say that the trade agreements have helped the situation. I want to ask you to outline to us and to name one single benefit that has come to this country by reason of the trade agreements. You say that we were anarchistic, our economy was gone down to degradation, and now you want to give the impression that we are way up high, and it all came out because of these agreements? If so, I wish you would tell just how it has been done.

Mr. EDMINSTER. Which question is it that you want me to answer? Mr. JENKINS. You lay the ground work in your statement that things were terrible in this country, and then you come along and try to give the impression that we have come out of all that, and the principal reason is because of the reciprocal trade agreements. Now I want you to justify that statement.

Mr. EDMINSTER. The ground work which I laid had to do with the whole question of the decline in the whole international economic situation, from which this country suffered along with all of the other countries. I think that all of us are aware of the fact that there did set in, at the end of the twenties, a very serious decline, culminating in a state of virtual collapse, of orderly and prosperous economic conditions, both here and abroad. Now, irrespective of what caused that, that is the fact. For that I said there were many causes, and I said that I thought that all authorities on the subject, so far as I was aware, were in agreement that the rise of trade barriers, and the drastic decline in international trade, contributed to the worsening of the whole world economic situation, including that in our own country.

I would like at this point, if it is agreeable to the committee, to introduce for insertion in the record, a statement I made before the annual meeting of the American Economic Association, in January 1943.

The CHAIRMAN. Without objection, it is so ordered.

(The statement above referred to follows:)

The first decade following World War I was one in which such fitful and sporadic efforts as were made to reconstruct international economic relations on a sound basis were largely vitiated owing to the pursuit by individual nations of disjointed, conflicting, and unsound economic policies which led gradually to the undermining and break-down of the international economic structure. In this process the failure to deal properly with the problem of international trade very definitely played an untoward part.

The close of the war found economic affairs throughout the world in a general state of disorganization and chaos: international trade disrupted by all manner of wartime restrictions; public finances and national currencies in disorder in many countries; production disorganized; and on top of all this, war debts and reparations, in sums hitherto unheard of, hanging like a vast pall over the whole scene. For a time there was progress in dealing with some of these difficulties: imports so greatly needed by the war-torn countries were provided, mostly on credit; fiscal conditions improved in most countries; the stability and interchangeability of international currencies was reestablished; and production, which had lagged badly in countries where the internal disorganization was most serious, increased. Meanwhile, however, processes had set in, particularly in the fields of international trade and finance, which subjected the whole international economic structure to a strain that became increasingly insupportable.

As regards international trade, the decade of the twenties saw a recrudescence of extreme protectionism which was accelerated in the later years. In the United States the Emergency Tariff Act of 1921, followed by the general Tariff Act of