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Mr. WOODRUFF. And that the tariff could be changed in the event the President approved of the recommendations of the Tariff Commission in the particular instance. He could not take such action until after he had the recommendation of the Commission.
Dr. COULTER. That is correct.
Mr. WOODRUFF. Do you recall also that early in this administration, when we were considering the Sugar Control Act, the Vice President of the United States testified before the House and Senate committees that the raising of sugar in this country, particularly beet sugar, was an inefficient industry, that it ought never to have been started in this country, and that it should be destroyed, but that it seemed “politically impossible” to do so at that time.
Dr. COULTER. That is my understanding of the Vice President's statement.
Mr. WOODRUFF. Well, it occurs to me, in view of recent developments, that the administration has reached the opinion that the time has at last come when the domestic sugar industry can be destroyed. I say that for this reason: The records disclose that on June 8, 1934– 4 days before the Trade Agreement Act was signed by the President
Dr. COULTER. Yes.
Mr. WOODRUFF (continuing). That the President, I assume, acting -upon a recommendation of the Tariff Commission at that time, reduced the tariff on sugar very substantially; I don't remember just what the rate of decrease was, but anyway he then lowered the tariff by a substantial amount. Dr. COULTER. Yes, sir.
Mr. WOODRUFF. Four days before the Trade Agreement Act came into effect.
Dr. COULTER. Yes, sir.
Mr. WOODRUFF. And that since that time, through various trade agreements, he has still further lowered the tariff until today it amounts to only 63 cents a hundred pounds.
Dr. COULTER. Yes, sir.
Mr. WOODRUFF. And this is not counting the loss of revenue you have referred to which will occur through th President, the administration, purchasing the entire crop of Cuban sugar and bringing it in free of duty? You estimate, Doctor, that will cost the Treasury of the United States approximately a quarter of a billion dollars?
Dr. COULTER. Well, that is for all of the reductions. In the case of sugar it is very easy to calculate, because back when we were getting something like 3,000,000 tons, that is 6,000,000,000 pounds, and the tariff rate was 21/2 cents, you can see that that was about $150,000,000 a year from sugar alone.
Mr. WOODRUFF. Yes. Dr. COULTER. That, after this transaction, will be wiped out, I take it. Mr. WOODRUFF. I am glad you brought that thought to the attention of the committee, because it very clearly demonstrates that unless we are going to lose our domestic sugar crop we must do something affirmative to see to it that it continues to exist.
Dr. COULTER. Of course, you realize that the Vice President is an Iowa corn grower, and he thinks that corn is the one crop of the universe that is No. 1 and that anything else is secondary.
Mr. WOODRUFF. Well, what you mean, Doctor, is that the Vice President undoubtedly believes that the corn crop they raise out in his State is probably the only efficient agricultural industry extant.
Dr. COULTER. He is sold on that.
Dr. COULTER. Then, in the meantime, there may be some other things he is not aware of that have been happening. Now, it so happens that out of a ton of sugar beets you get 50 percent more sugar than can be got out of a ton of cane in Cuba. In other words, sugar beets are 50 percent more efficient in producing sugar than cane in Cuba. The only reason Cuban cane can compete is because of their very low wages and no schools and all the other things that they do not have. I think if they were put on a straight competitive basis-fair, even competitive basis-the beet growers of the United States would put Cuba entirely out of cane growing. If the minimum wage and maximum hours and other laws of this country were made to apply to the labor used in producing cane for import, if you just said that any commodity of a foreign origin offered for sale in the American market must have been produced under conditions equivalent to those required by law in the United States, they would have to raise their wages and provide schools and all that sort of thing for their children, and I do not believe they could compete with you without any tariff at all.
Mr. WOODRUFF. In other words, Doctor, what you mean is this: If conditions were the same in foreign countries as they are here, it would have the effect of putting those countries completely out of this market?
Dr. COULTER. I think they could not compete with you.
Dr. COULTER. Yes; I may say that I have a personal interest there that I am not ashamed off-that we do grow about a hundred acres of sugar beets upon the home farm where I was born in Minnesota-and I have gone all over the sugarcane fields of Florida, of Cuba, and other areas, and I have likewise gone all over the sugar-beet areas of all of the countries that grow them. I have been all over all the sugar belt of Russia and Poland and the rest of them, and I am convinced that without any tariff at all, if they had the same labor standards and other similar things that we have here, we would not need any tariff to compete with them. We are more efficient, have better production, higher yields, greater economies, but our tariff is purely to protect us against--we have laws protecting our market against the products of foreign criminals, prison labor, slave labor, but we don't have against their exploited labor.
Mr. WOODRUFF. Doctor, that indicates that notwithstanding the wildest stretch of an imagination—with the possible exception of the imagination our Vice President carries with him on his trips to other countries, especially—the sugar-beet industry cannot be rated inefficient?
Dr. COULTER. No, no; it is one of the best. I think that it is very applicable right here that there is absolutely literally no other farm commodity produced in this country relatively so cheap for its value as sugar from the sugar beet.
For instance, the cotton folks need 20 cents a pound for cotton. The sugar-beet grower, if he gets 5 cents or 542 cents, is doing fine. A loaf of bread made out of wheat, a pound loaf, half air, and so forth, 10 or 12 cents; sugar, 5 or 6 cents. A pound of butter, 30, 40, 50 cents: a pound of sugar, 5 or 6 cents.
I can go through the whole list. Take your meats, take your cheese, take your eggs, take your poultry, take your fish-take any of the whole series-and literally no single crop on the farms of the United States, peanuts or corn or what not, is so marvelously rich in food value, pound for pound, all water extracted. Sugar is reduced down to an absolute dry state. A pound of sugar is perfectly dry,
The others: butter has up to 20 percent of moisture in it. And bread, a high percentage of moisture. Meat, of course, runs up to 30 or 40 percent, and so on.
Sugar at 5 to 6 cents a pound, which I can get from beets in Minnesota and produce sugar on that basis, is the cheapest food produced on the farms of the United States by any group of farmers. Fruits and vegetables? They are quite out of sight.
Mr. WOODRUFF. As a matter of fact, Doctor, we hear so much of dehydrated food. We have had this particular dehydrated food with us for many years, haven't we?
Dr. COULTER. Yes; sugar is completely dehydrated.
Mr. WOODRUFF. And isn't this a fact: that for a little nickel, a little 5-cent piece, the people anywhere in the United States have been able to buy more food value by buying sugar than they can by buying anything else raised on any American farm?
Dr. COULTER. Yes; the carbohydrates. In the carbohydrate group.
Dr. COULTER. It is pure carbon turned white, and you cannot get a richer and more valuable food.
Mr. WOODRUFF. Thank you very much.
Dr. COULTER. Now, I think there has been a very bad misconception on that. Perhaps originally we didn't know how to grow beets and so forth, but for the cane in Louisiana; now since they have gotten in their mosaic-resistant strains, and so forth, they are doing a perfectly splendid job. And sugar can't swim, and right now if we had been dependent upon all the rest of the world, Java and so forth, for sugar as for rubber, we would have been just in a terrible spot. As it is, we have a couple of million tons at home, and with our Navy we are getting some from Cuba, periodically Hawaii—the returning vessels from the Orient come by Hawaii-so that we are at least on a ration basis with a half ration; but if we had not gone out and tackled sugar production here at home we would be paying 25 cents a pound and not getting it right now.
Mr. WOODRUFF. Back in 1920, I think it was, that the housewives of the Nation paid as high as 35 cents a pound for sugar.
Dr. COULTER. Yes.
Mr. WOODRUFF. And that was because of the fact that at that time the American sugar crop was exhausted.
Dr. COULTER. Yes.
Mr. WOODRUFF. And we had to depend on the Cuban activities largely for such sugar as we had.
Now, another thing, Doctor, is this: It took us rather a long term of years to learn how to successfully and scientifically produce sugar.
Ďr. COULTER. Yes.
Mr. WOORUFF. Beet sugar. For many years we found it necessary to depend upon foreign countries for the beet seed.
Dr. COULTER. Before the last war.
Mr. WOODRUFF. Yes, we were. And I am very happy to say that when this emergency struck us, because of the determination with which people interested in this particular sugar crop had tried to make the entire activity purely a national one, they have succeeded in producing beet seed very successfully in this country, and they have been very, very successful also in bringing about the production of blight-resistant seed.
Dr. COULTER. Yes.
Mr. WOODRUFF. We have done a lot of very successful experimentation with it.
Dr. COULTER. And we are completely independent now of the outside world for seed.
Mr. WOODRUFF. Yes. That is the point I was making.
Mr. CARLSON. Doctor, you have been on the stand so long today that I hesitate to ask you any questions, and yet you are a very excellent witness, and I should not want to miss this opportunity to get some information that I think will be helpful to me, at least.
This morning the gentleman from Virginia, Mr. Robertson, mentioned the fact that 3 years ago you appeared here as a witness representing the National Association of Manufacturers, and he seemed to leave the inference that they had changed their minds this year in regard to their views on reciprocal trade treaties.
I have here the press release issued, having extracts from a statement by Frederick C. Crawford, president of the National Association of Manufacturers, at San Francisco, Calif., on April 13; and I am not going to read all of it by any means, but I want to read one sentence. There are several extracts that could be read, but here is one sentence from this release:
It is the proper function of government to protect domestic producers and labor against dumping, discrimination, and unfair competition.
Could we assume, Doctor, that one could gather from that statement that they had changed their position from 3 years ago?
Dr. COULTER. Personally, I do not think so, but I cannot speak for the National Association because, as I said, with the outbreak of war the National Association allowed a lot of committees to go dormant, and one of them was the tariff committee, because imports were just out of the picture, and they wanted to devote absolutely all their time to the tremendous task of industrial provision for the war. So the committee has been-well, disappeared entirely, and stopped, didn't try to keep up the records, or anything. I was purely a consultant, you see, at that time, and have kept up my own consulting service to various people. So at this time they have had no committee working on it, but I did furnish them at their request some memoranda bringing the thing down to date, listing the new agreements and the number of items and what it meant, and so forth; and I think personally that Mr. Crawford is merely stressing it from the point of view that any of these things that are unfair is all we care to be protected against.
I have in mind things that are so obviously unfair. When Great Britain wanted to drive the American automobile manufacturer out of Hong Kong, a British dominion, they merely made local municipal rules that an automobile had to be within so many inches, the running gear to the ground. No American car could meet that condition. Only British cars could. American cars were out. Well, that is unfair, you see.
Using labor, exploiting it, not having various other rules: I think all of those things come under unfair treatment of American cars.
Mr. Carlson. As I read through the article and I get to the part I really want to ask you some questions about it, and that is conclusion, and it reads this way: "The board of directors of the association has declared that this country should be willing to make reciprocal trade agreements after the war, although certain amendments to the present act seem advisable." These are the amendments that should be made in the act in the light of our experiences under it, and that is what I want to discuss with you.
Dr. COULTER. Yes.
Mr. CARLSON. We are going to have a number of amendments offered in executive session and no doubt on the floor of the House.
Dr. COULTER. Yes.
Mr. Carlson. And if you will pardon me I want to read these individually and ask your comment on each one because it will help me very materially to get it in the record.
The first amendment suggested is this: The preamble of the Reciprocal Trade Agreements Act should include a statement that it is not contemplated, nor is it considered feasible, to approximate total free trade between the United States and other nations.
Doctor, in your opinion will that amendment strengthen or assist in modifying the present reciprocal trade agreement ?
Dr. COULTER. Well, it is a statement of policy, and that has been our policy since the first bill was introduced in the first session of Congress when the first Congress was started back in President Washington's day. That has been our policy, and the third bill signed by the first President was a tariff bill, and that has been the policy of this Nation from that time; and if that were stated flatly and clearly, why, it would confirm our historical position.
Mr. CARLSON. Admitting your statement to be correct, and I certainly do, some of us have had experiences with governmental agencies who do not seem to pay much attention to the text of the law or the intent of the law.
Dr. COULTER. Yes; statement of policy, but if then a matter goes into the courts you have a statement of policy which the court takes cognizance of.
Mr. CARLSON. Well, do I understand you can get into court under the reciprocal trade agreement?