and the President agreeing with him, proclaimed this doctrine which we are undertaking to carry out.

Mr. ROBERTSON. Well, can I support these international policies that were brought forward by those prominent Republicans and still call myself a good Jeffersonian Democrat?

Secretary HULL. Well, I think this in its essence and in its genesis is something that leaders in all political parties alike can support consistently.

Mr. ROBERTSON. Well, in that connection, may I ask what did Abraham Lincoln mean when he said "Trade knows no politics"?

Secretary HULL. Well, that is just an expression that has been and has become sort of an axiom in the commercial world.

Mr. ROBERTSON. In other words, when we speak of international trade and seek to promote a freer flow of the natural resources of the world, we are dealing with a great economic problem?

Secretary HULL. Yes; and it is broader than that now, really, in that it enters the peace phase of international affairs as it had not before, until recent years.

Mr. ROBERTSON. There is one other term I would like you to define. What is meant by "block currency," and what kind of government uses that device in handling international trade, and how does it operate?

Secretary HULL. Well, it operates in different ways according to the purpose of those who are dealing with it. That phrase has been used to describe certain maneuvers of the monetary situation in a given country which have been manipulated to secure trade advantages or to discriminate against the commerce of another country.

Mr. ROBERTSON. Is it a device of a totalitarian system of government?

Secretary HULL. Oh, yes; that is primarily one of their devices. Mr. ROBERTSON. And through that system, the money of that country is worth so much in trade with one country and it is worth something else wherever they say?

Secretary HULL. As I have indicated, it is manipulated in all sorts of ways to injure or rob some innocent trading country. There are many illustrations which I will not take your time to go into.

Mr. ROBERTSON. Who is now in charge of our foreign commerce? Secretary HULL. The State Department and its associated agencies are primarily dealing with the foreign commerce situation, so far as officials of the Government are concerned. It has the active cooperation of the Commerce Department and, as given questions come up pertaining to foreign commerce, the State Department calls on every other department, bureau, or division in the Government that might have a fact or figure, or any kind of contribution that would be helpful. Mr. ROBERTSON. I recently heard Mr. Milo Perkins say that his Board of Economic Warfare was in charge of foreign commerce, controlling both imports and exports.

Secretary HULL. I would rather hear you and him debate that than to get into the debate myself. [Laughter.]

Mr. ROBERTSON. The point I wish to develop, however, is that our foreign commerce at the moment is not in the hands of the private traders of this Nation; is not that true?

Secretary HULL. Yes; to a considerable extent.

Mr. ROBERTSON. The problem that confronts us is whether in the post-war era international trade will be handled by governments or by individuals; is not that true?

Secretary HULL. I have said many times all through the thirties and up to this time, whenever there is any opportunity or occasion to say it, that as we go forward all of the important nations of the world, which will furnish the main leadership and the principal surpluses to be disposed of, will either gravitate down the gulch of autarchy and totalitarianism, with every kind of regimentation, every kind of condition of increasing scarcity and lopsided distribution of what little we have, or the nations will turn in the opposite direction toward a liberal commercial policy, the maximum of production, and rules for distribution that will permit a reasonable flow, with mutual profit to all, back and forth among the nations of the world.

Mr. ROBERTSON. Then I understand from that, that in the post-war era we must decide whether foreign commerce will be handled under certain rules formulated by nations through negotiation of reciprocal trade agreements and allied currency programs, or whether international trade will be handled by governments?

Secretary HULL. Of course, in any state that approaches totalitarianism and autarchy, economically speaking, which means regimentation to the most extreme degree-ultimately, at least-it is a governmental matter primarily.

Mr. ROBERTSON. And is it not true that if the Government moves into control of exports and imports, the private operator, of necessity, moves out?

Secretary HULL. He moves out as soon as he sees the Government coming in.

Mr. ROBERTSON. And when the Government operates, that is what we call regimentation?

Secretary HULL. That is a phase of regimentation.

Mr. ROBERTSON. And if the Government regiments our foreign commerce, could we escape the regimentation of our domestic commerce? Secretary HULL. There is a much closer relation, as I have said, between international economic affairs and domestic economic affairs than formerly. And, if I may say so, that led me to get my mind off of the narrow tariff idea alone and the controversies that raged around it. During the last World War, I reached the conclusion that in the future the international exchange of surpluses among the nations would become far more important in its effect on domestic economies everywhere than it had been. It was then that I ventured to introduce in Congress, while I was a member of this committee, a measure proposing an international trade agreement congress, having for its purpose the reduction of all of the excesses in trade barriers and trade restrictions. And I have been strengthened in that view .by the developments since that time.

Mr. ROBERTSON. Let us tie that general principle to some specific cases. We all know that copper is an essential peacetime metal as well as an essential war metal. I understand that at the present rate of depletion we will exhaust all of the copper in mines now open and in operation in 3 years' time. If we faced a serious shortage of copper in the post-war era and we cannot import copper, we would have to regiment the domestic supply by priorities and limitations, would we

not?

Secretary HULL. I cannot begin to impress upon you the seriousness of the almost innumerable problems of tremendous importance that are ahead of us. That is only one of virtually innumerable ones, and that is why, if you will permit, I spend the most of my time seeking to draw attention to the broader aspects, rather than dealing with something that is more or less outmoded.

Mr. ROBERTSON. The only source of high-grade iron ore that can be mined at reasonable prices is in the Mesabi Range in Minnesota. The Union Trust Co. of Cleveland, which I do not think is a New Deal organization, recently put out the statement that at the present rate of depletion of that iron ore, stepped up from 45 to 50 million tons a year to 100,000,000 tons a year, the supply in the Mesabi Range will last just 10 more years.

Secretary HULL. I am not surprised to hear that.

Mr. ROBERTSON. And take the question of oil; we probably have 2,500,000,000 barrels of oil in wells now in operation. At the present rate of depletion, that would last just 20 years and we would not have another free-flowing oil well in the United States.

Secretary HULL. Yes.

Mr. ROBERTSON. Now, when you come to our farm problem, we normally exported about 40 percent of our cotton and, if we have no export trade, would not you have to regiment the 60 percent that is grown for domestic consumption? And are not we regimenting it now and telling them how much they can raise and putting a penalty on them if they raise more than that?

Secretary HULL. That is one phase that interests particularly industries to which I am going to refer, far more than it has claimed the attention of the public and even of many of our leading statesmen. It has been that we produced 40 to 50 percent more cotton than we consumed and looked for markets abroad. I think when the war came on, we had on hand a year's growth of cotton as surplus, while Brazil had an enormous surplus, looking for markets elsewhere.

Then there were the lard people and many of the fruit people and wheat people, and the automobile people and a long list of manufacturers of everything from agricultural machinery to sewing machines and cash registers, with immense surpluses running all the way from 20 percent up, with their eyes necessarily on some foreign outlet. And to shut out and shut down all of their surplus production to that large extent, of course, would have terrific repercussions in our domestic economy; but most people really have not given that the attention I think it will claim later, unless we deal with it.

Mr. ROBERTSON. Well, we have other farm surpluses in normal times: 20 percent on wheat.

Secretary HULL. Oh, yes; I was going to mention wheat, and I could have mentioned tobacco and quite a number beside the farm specialties, consisting of most of the staple agricultural products. Mr. ROBERTSON. And we used to export a good many apples. Secretary HULL. Yes. We could again.

Mr. ROBERTSON. Is it not true that in most of the trade agreements you have negotiated new outlets were found for farm products? Secretary HULL. As I said in answer to my good friend from Michigan, we have secured many concessions for farm products, far out of proportion to those we have given to other countries in return.

Mr. ROBERTSON. And if, in the post-war era, we go back to a policy of isolation and high protective tariffs, we will have our farmers to regiment and maybe there will be other raw materials that we will have to regiment?

Secretary HULL. Those matters will surely arise.

Mr. ROBERTSON. In order to maintain a domestic economy based upon domestic production alone.

Secretary HULL. As I say, I am endeavoring constantly to point out the broader questions that are presented to us now than we have been accustomed to until recently. That is the broad question of commercial policy, liberalized by some sort of arrangements provided for in this trade-agreement program, coupled with necessary post-war monetary and exchange and other facilities that go to develop and carry forward the increase in volume of international trade. It is either that course or the narrow course, which means all these things you are talking about.

Mr. ROBERTSON. Isn't it true that in 1910 President Taft advocated a trade-agreement policy with Canada that amounted to substantially free trade with Canada?

Secretary HULL. That was the proposed Canadian reciprocity measure, which was supported by a great many people, irrespective of party, just as I hope to see this wholly nonpartisan policy that we have here supported increasingly by people without any thought of politics whatever.

Mr. ROBERTSON. With your permission, I am going to read into the record at this point a letter from Colonel "Teddy" Roosevelt to his friend Taft on the subject of the trade agreement with Canada. The letter was written on the 11th of January 1911, and he said:

DEAR MR. PRESIDENT: I at once took in your letter and went over it with the Outlook editors. It seems to me that what you propose to do with Canada is admirable from every standpoint. I firmly believe in free trade with Canada, for both economic and political reasons. As you say, labor costs substantially the same in the two countries, so that you are amply justified by the platform. Whether Canada will accept such reciprocity I do not know, but it is greatly to your credit to make the effort. It may damage the Republican Party for a while, but it will surely benefit the party in the end, especially if you tackle wool, cotton, and so forth, as you propose.

Ever yours,

THEODORE ROOSEVELT.

Didn't the Senate ratify that agreement by a two-thirds majority? Secretary HULL. The reciprocity bill was passed by Congress but Canada rejected it.

Mr. ROBERTSON. You told Mr. Cooper that when we abandoned Europe to its fate after the Versailles Treaty we plunged 4 nations into economic chaos and ultimately in revolution and as a result we had totalitarianism in those countries, and that you feared if we do the same thing after this war, it won't be 4 but it will be maybe 14 or maybe more.

Secretary HULL. Yes. That will be the beginning of the post-war period.

Mr. ROBERTSON. And if that sentiment develops in those 14 countries, and maybe in a great many more, we will just have to stay an armed camp for our own security, won't we?

Secretary HULL. Your question has impressed me with the one idea that I have uppermost in mind, and that is, that in my judgment, what

1

ever it may be worth, there must be an awakening in all the important countries among the statesmen and the governments to a keen realization of the far-reaching nature and almost impossible difficulties inherent in the inumerable problems that confront this and other

nations.

Mr. ROBERTSON. In the past, has it been true that trade wars have ultimately led to fighting wars?

Secretary HULL. As I said this morning, it is difficult to keep the peace, while at the same time engaging in trade wars. Trade wars, of course, breed all sorts of friction and bitterness between nations and move them to prepare armaments for possible defense against each other.

Mr. ROBERTSON. I thought it was quite significant when the National Association of Manufacturers published this year a speech delivered by Dr. Robert A. Milliken, of the California Institute of Technology, in which Dr. Milliken said, "We in the United States did much to win the last war and much to lose the ensuing peace. Civilization, I fear, will not survive a second mistake of that kind, but to prevent it we have a lot of educating of America still to do." That is the thought you have in mind?

Secretary HULL. Yes, and education among ourselves, sir. I need it as badly in many respects as any person I know.

Mr. ROBERTSON. Thank you.

The CHAIRMAN. Mr. Gearhart?

Mr. GEARHART. Mr. Hull, I am sure that everyone in this room wholeheartedly agrees with you in respect to the idealism that you gave expression to this morning. I am sure I do. I think everybody in this room agrees with you implicitly in the desirability of increasing foreign trade in respect to items that we need and don't have enough of, or items that we need and must procure.

But foreign trade has to do with business. It is not a matter in respect to which we should indulge in soul-stirring slogans or pious platitudes. Foreign trade is a matter of dollars and cents, tons and pounds. It deals with subjects you have got to balance books on.

I am just wondering how much of this fervor for the reciprocal trade agreement program is based upon international idealism, the good-neighbor policy

Secretary HULL. Yes.

Mr. GEARHART. The attainment of political objectives, the making of this a beautiful world in which to live

Secretary HULL. Yes.

Mr. GEARHART. And how much of it is based upon the business necessity of increasing our commercial opportunities? That is the thing that should be in the minds of the American people as we proceed to appraise that which has been accomplished since 1934. Secretary HULL. Yes.

Mr. GEARHART. So I have been so, probably, inconsiderate, perhaps so rude, as to ask for the figures on what has happened to us under this program, looking alone at the coldblooded business aspects of the proposition. And I learned to my astonishment from a tabulation that has just been placed in my hands that our imports of agricultural products, imports from all countries, have increased since 1934 by 57 percent, and that our exports to all countries of agricultural products during the same period of time have decreased by 30 percent.