EXTENSION OF RECIPROCAL TRADE AGREEMENTS ACT TUESDAY, APRIL 20, 1943 HOUSE OF REPRESENTATIVES, Washington, D. C. The committee met, pursuant to call, at 10 a. m., Hon. Robert L Doughton (chairman) presiding. The CHAIRMAN. The committee will be in order. We will hear Mr. Marsh out of order this morning. Will you identify yourself for the benefit of the record? STATEMENT OF BENJAMIN C. MARSH, EXECUTIVE SECRETARY, THE PEOPLE'S LOBBY, WASHINGTON, D. C. Mr. MARSH. The name is Benjamin C. Marsh. I am executive secretary of the People's Lobby, of which Bishop Francis J. McConnell is president. Our offices are here in Washington. The CHAIRMAN. How much time do you think that you will need? Mr. MARSH. Unless there are questions, not over 12 or 15 minutes. The CHAIRMAN. We will recognize you for 15 minutes without interruption. Mr. MARSH. Mr. Chairman, the People's Lobby favors the extension of the Reciprocal Trade Agreements Act, not as a solution but as a partial step and an essential step toward getting better international relations. The post-war world must be cooperative or chaotic, with conflicts commercial and physical inevitable, for global trade must follow global war, or else we are going to have another global war. Wars cannot be ended while breeders of war continue, and among such breeders are all barriers to the freest production and exchange of goods such as tariffs, domestic monopolies, and cartels. The Reciprocal Trade Acts are important in fostering freer trade and must be made generally applicable. Incidentally, may I remark that while I have heard my Republican friends raise the point that Germany was excluded, and so forth, I will not go into the details of that horrowing discussion. I have not heard them suggest that this be expanded and extended, and when I hear that I will know that Utopia is around the corner. The Smoot-Hawley and Fordney-McCumber Acts were post-war declarations of economic war against the rest of the world and were so construed. They were a direct repudiation of President Wilson's statement that one of the objectives of World War I was to afford all peoples, large and small, participation upon fair terms in the economic opportunities of the world. America let the world down after the last war, and we can understand the wide fear that we shall do so after this war. Extension of the Reciprocal Trade Act will give hope to the peoples of all of the United Nations, of occupied countries, and of the nations we are fighting, with whom we have got to do business after the war unless we want them exterminated, and we don't. Mr. Chairman, I occasionally think of what we did in the last war. We spent a good many billions, of course nothing compared to the present expenditures, which are on a much larger scale, to exterminate, as some people said, Germany and German militarism. Then after the war we turned around and loaned Germany enough to pay some of her reparations so as not to exterminate her. Now, this time we have to adopt a more intelligent method of trade which is implicit in these Reciprocal Trade Acts. Extensions of these acts now will give hope to the world and is needed as a supplement to the Atlantic Charter and the resolutions before Congress on what we are going to do after the war on world organization. I have read and discussed with others what is known as the Big Four resolution, introduced by Senators Ball, Burton, Hill, and Hatch. I have suggested to the Foreign Relations Committee and other Senators that it would be very helpful if that resolution had one additional section, and that is a stipulation or an assertion that we are going to try to get an economic system under which they will have a better chance. I think that the extension of the Reciprocal Trade Act is in that direction. Those who fear-and I regret that more of my Republican friends are not here to get the benefit of this suggestion, but I am sure that they will have time to read the minutes of the hearing-those who fear we propose to establish a world-wide W. P. A. after the war, and you have heard that from lots of critics, should back the extension of these trade pacts which open the way to world trade instead of relying upon our gifts to impoverished people over the globe. Now, one can't say at the same time that we are planning to conduct a W. P. A. all over the world, and oppose trade pacts, reciprocal trade pacts or extensions of that principle. They cannot be for both or against both. If they do not want a W. P. A. all over the world, we have got to trade with the rest of the world. Mr. Chairman, I would like permission to read into the record a short statement. It is only one column from the current United States News, on the pros and cons of the Reciprocal Trade Agreements Act, in which the statement is made: Extension of the Reciprocal Trade Agreements Act is being urged on Congress by a majority of the commenting press. Now, this is a conservative press reporting that the majority of the commenting press favor the extension as sound policy and as assurance of the intent of the United States to cooperate in liberal post-war agreement. It is a very short statement quoting from editorials in the Troy (N. Y.) Record (independent), Louisville (Ky.) CourierJournal, Washington (D. C.) Star (independent), the Salem (Mass.) Evening News (independent Republican), the Hartford (Conn.) Times (independent Democrat), and so on. May I put that in the record, Mr. Chairman? It is a very short statement. The CHAIRMAN. Without objection, it may be inserted in the record. (The statement referred to is as follows:) [United States News, April 23, 1943] PRO AND CON OF NATIONAL ISSUES MOVE TO EXTEND TRADE TREATY ACT: PRESS APPRAISAL Extensions of the Reciprocal Trade Agreements Act is being urged on Congress by a majority of the commenting press as sound policy and as assurance of the intent of the United States to cooperate in liberal post-war agreements. Several editors, however, warn Congress that, if the President is given renewed authority to negotiate reciprocal trade agreements, United States competition with cheap foreign labor and the handling of international cartels must be given special attention. International implications of the Reciprocal Trade Agreements Act are stressed by the Troy (N. Y.) Record (independent), which asserts that renewal of the act will be taken as a sign that the United States does not intend to return to the "economic polices that contributed so much to international chaos between the two wars." "We can no longer afford to jeopardize international understanding because special interests demand inordinate tariff protection for their products," declares the Louisville (Ky.) Courier-Journal (independent), while the Washington (D. C.) Star (independent) argues that repudiation of the trade agreements now would be "a disastrous backward step toward the old high-tariff protective system, for which there would be neither defense nor excuse." But the Salem (Mass.) Evening News (independent Republican), observes that "our wage earners cannot compete with the very low pay received by many foreign workers," and suggests that "the value of reciprocity treaties will depend on how good traders our Government agencies are." The Hartford (Conn.) Times (independent Democrat), noting that "there will always be some selfishness on the part of agriculture and industry," quotes Judge Thurman Arnold, former Assistant Attorney General, that reciprocal trade treaties are "vitiated" by international cartels. Nevertheless, the Times advocates extension of the act, declaring the agreements have produced "good will" and "other benefits" and that the cartels "control only a few lines of trade" and "can be dealt with." The St. Louis Post-Dispatch (independent) also asks Congress to "consider new guards against cartels" and to renew the act "for the sake of free operation of an enlightened trade policy and for the security of the peace." Mr. MARSH. Also I will admit very frankly, Mr. Chairman, that our cost of production is higher in this country, if you take it on the basis of wages, but if you take it on the basis of unit cost, that has still to be established, and the mere fact that we are advocating extension of the reciprocal trade pact does not mean that we accept present costs of production as final costs of production. As Mr. Thurman Arnold has pointed out, we cannot have peace if these international cartels are continued. What built up those international cartels? High tariff walls and patents and domestic monopolies built it up, and I will admit that we have got to act to end those three uneconomic excesses in our economic system. I do not want to ask to have a whole lot go into the record, but I made an extended review with the consent of the publishers of the recent book Germany's Master Plan, showing how cartels controlled the world, and I would like to have permission to read that. It is only about 1,200 words. The CHAIRMAN. Do you want to insert it in the record or read it? Mr. MARSH. Just to put it in the record. The CHAIRMAN. Without objection it may be inserted in the record. (The statement referred to is as follows:) GERMANY'S MASTER PLAN-CARTELS CONTROLLED THE WORLD Germany's Master Plan, by Joseph Borkin and Charles A. Welsh, with an introduction by Thurman Arnold, published by Duel, Sloan & Pearce (New York), indicts more American business leaders and Federal officials than German devisers of Germany's master plan. Thurman Arnolds states: "The soft and opulent business organizations of England and America were intent on the pursuits of their short-run policies of restricted production, high costs, and low turn-over. They saw in German cartels an ally, not an enemy. "To such international cartels we owe the peace of Munich. To our own cartels we owe the failure to expand American industry prior to Pearl Harbor. To the interests of these cartels in stabilizing prices and restricting productions we owe our present scarcity in all basic materials." He warns : "We cannot win the peace if the cartel problem remains unsolved." Mr. Borkin is economic adviser to the Antitrust Division of the Department of Justice, working on foreign cartels; Mr. Welsh, an authority on international trade and finance, is cartel expert for the Office of Price Administration. The book is largely based on findings of the Nye, O'Mahoney, Truman, and Bone committees. The authors comment: "The softest impeachment that can be made of those American, British, and French industrialists who consorted with German interests is that they know not what they did. This is an alarming commentary on the profound political astigmatism of the proud management groups responsible for our industrial welfare." If we maintain the profit system as planned, they will in the post-war world also be "responsible for our industrial welfare." KRUPP'S ACTIVITIES The chapter on Krupp quotes a statement of our War Department, May 20, 1921: "Of the 228 patents and applications for patents assigned to Krupps (obtained by German citizens), 26 were found to relate to artillery fire-control devices, 18 to electric-control apparatus, 9 to fuzes and projectiles, 6 to gas engines and appurtenances, 17 to guns and their appurtenances, 3 to processes for the production of metals, 10 to naval fire-control devices, 3 to projectiles and machines for handling same, 14 to railroad artillery, and the balance to varied uses, most of which might well relate to military use. "Incident to making this investigation, it was noted that a large number of patents and applications for patents had been assigned to numerous other German companies, and a casual examination indicates that a considerable number relate to airplanes and their accessories, chemicals, dyes, radio apparatus, and naval equipment. "On April 1, 1926, Germany, France, Belgium, and Luxemburg formed a cartel which was subsequently joined by the steel industries of Poland, Austria, Hungary, and Czechoslovakia. "Eventually German steel production, which rose from year to year, far outstripped the other nations of Europe, including England, whose steel makers continued to observe the limits set in the various agreements." DEMOCRACIES MISSED BUS In the earlier period Germany was disarmed and could easily have been kept disarmed. Why did British, French, and American leaders permit Germany to revert to World War I policies? In the chapter "Private government and industrial Munichs," the impotence of political government controlled by vast private capital, and devoted to private profit, is well shown: "German preemption of South American markets was possible only because American concerns agreed not to compete in that area. What our Government would never have agreed to, cartels could do: Give consent and support to the institution of economic and financial salients which became outposts of Germany." |