Dr. COULTER. No; but, you see, I urge that somehow there should be provision whereby injured individuals or groups or industries could seek relief, or review, at least, of injuries which obviously could be traced back to a trade agreement. I think that is a desirable thing. Mr. CARLSON. I agree with you. It does seem to me that a citizen ought to have recourse to the courts of the country, at least. The second recommendation reads this way:

After any product is first put on the dutiable list, there should be no reduction of duty except by Congress for 5 years thereafter.

Do you care to comment on that?

Dr. COULTER. Well, I think that again is recognizing what the Constitution does: that Congress is the policy-making body, and that is open and above board, and we all come before Congress, committees, and try to show what we believe to be in the interest of the general public, and Congress is the policy-making body, and no industry could afford to put up capital and hire labor and build buildings and start a job to get into the market without a period of 4 or 5 years. Certainly during that period the protection the Congress specifies should be maintained. Then if Congress wants to say that at that point you can study it and make minor adjustments, why, that is all right.

Mr. CARLSON. Did I understand you to state this morning that you favored Senate confirmation of these agreements?

Dr. COULTER. If they are going to continue as out-and-out treaties, I think so.

Mr. CARLSON. Well, in your interpretation of this paragraph of this recommendation I have just read, do you think that means the Senate or both House and Senate?

Dr. COULTER. I think both House and Senate because I think substantially these are more tariff and revenue and supervision of foreign trade, and the Constitution also provides that the Congress shall regulate foreign trade; shall supervise and regulate foreign trade. Mr. CARLSON. The third recommendation:

It should be provided that if Congress declares any industry essential to national defense, no tariff reduction through a reciprocal agreement should exceed in any one year one-tenth of the maximum permissible reduction after the Reciprocal Trade Agreements Act.

I would like to have you comment on that.

Dr. COULTER. That is with the idea, for instance, that it may be after this war is over that Congress will say, "Well, now, we've got half a billion dollars invested in synthetic rubber or in the ingredients of synthetic rubber: styrene, butadiene, and so on; and if they should put on a tariff there as a precaution, of a certain rate, then under the Trade Agreements Act they would not be permitted to reduce that in a period of 10 years more than 10 percent of that rate."

I think you have to bear in mind things like this: Twenty years ago, or at this time in '23, even rayon was a dollar and a half a pound. And now what is it? A little over 15 cents at the outbreak of the war. It may be a little higher now. That is for just staple rayon fiber. In other words, industry can-once it gets the foundations and the principles and the know-how and the raw material and the capital invested in plant, and trained, skilled labor, and mass production end power applied, and so forth-it may be able to do a swell job.

Or take a case like this: At the outbreak of this war we were depending 100 percent on France and Belgium for cigarette paper. Now, I don't happen to smoke cigarettes, but I do know about the paper. When Germany marched through Belgium and France, northeastern France, they just seized all the cigarette paper plants, and we were not buying things from Germany, and it looked as though within 3 or 6 or 9 months we would not have an ounce of paper; we would have to use wrapping paper, toilet paper, or tissue paper or something else for our cigarettes or go out of business.

But American industry, confident that the war would give temporary protection at least, mobilized capital, built plants, rushed out to your State and mine, visited the farmers, bought piles of flax straw, and I believe in Mr. Doughton's State they built their plant up near High Point or some place in there; and now within 2 years, you know that they are producing 20,000,000 pounds of linen cigarette paper a year, absolutely supplying every cigarette manufacturer in the United States at uniform prices regardless of volume, including books. And now we do not need to get an ounce from Europe.

Well, now, what if this war suddenly cuts off? Those people, in order to recover their pre-war market here for seventeen, eighteen, or nineteen, or twenty million pounds of high-priced cigarette paper, probably want to get in here. Well, I can see where Congress might say, "Well, now, let us hold our horses here and look this thing over, give a little time to reason it out," and you might put on a temporary protection. I understand that the tobacco industry is getting its paper now cheaper than they were getting it previously from France, but that just again illustrates how our people do get into it, and we may not need a tariff at all, but it illustrates the problem. Mr. CARLSON. The fourth recommendation reads:

It should be provided that every agreement should stipulate that its benefits would be denied to countries whose currencies fluctuated in terms of the dollar by more than a specified percentage during any year, which restricted exchange transactions between itself and the United States after the agreement was made, or which subsequently confiscated American property.

Dr. COULTER. Well, of course, those who study international exchange know that a foreign country can quickly absolutely cancel 50 percent of your tariff by a 50-percent manipulation of their exchange rate, their ratio of their currency to our dollar, and that has been one of the things that has been very hazardous all through this period. Had it not been for the war, which cut off trade, several countries would have put our market into a very hazardous condition. Japan depreciated currency 75 percent. Britain, for a while, you know, was about 50 percent, but we went down 41 to more or less match the British. France, England, and other countries went down, but Japan went off 75 percent, and even now the Japanese yen is only half in value, with respect to the dollar, what it was when they started depreciating. So I think that exchange manipulation is as bad as any other form of foreign discrimination.

Mr. CARLSON. I have been informed that since we negotiated a treaty with Argentina they have greatly reduced the value of the

peso, and it is working to the detriment of the cattle producers and beef producers in this country. Are you familiar with that in any way!

Dr. COULTER. Well, in a small way I think that is true, but since they do not ship cattle or fresh-killed beef or veal or mutton or lamb into this market, it only applies in a small way to a few items like canned beef, and so forth, and I think the tariff reduction there of 3 cents a pound was more damaging relatively-will be when this is over-than the exchange manipulation. But there is an interesting thing there: I think that we made a proviso in the original agreement by which, after we recited their concessions to us, we put a footnote in saying:

However, none of these concessions of the Argentine to the United States shall become effective until the Argentine is financially able to withstand a reduction in duty on articles shipped into the Argentine from the United States. So that our concessions are in effect to them, but none of their concessions are in effect with us, I believe.

Mr. CARLSON. Of course, the only reason we are not getting fresh meat and livestock into this country is because of that situation. Dr. COULTER. Yes.

Mr. CARLSON. And if that were abrogated by Executive order, if that were possible, or by congressional action, why, of course there would be exports flowing into this country.

Dr. COULTER. Yes; that would be abrogated by Executive action were it not for the fact that it was written into the Tariff Act as law, and there is no power on the part of the Executive to repeal or amend an act of Congress directly.

Mr. CARLSON. In fact, they can get around it now in a small way by importing fresh meat from a small country, Tierra Del Fuego, just off the southern point of Argentina, and which is free from footand-mouth disease.

Dr. COULTER. They have offered some, but I think none has been admitted.

Mr. CARLSON. By our department.

Dr. COULTER. Of course, there are those who think that that would hurt the farmers, but as a matter of fact if the disease got in here rampant with the farmers it would cut down the number of livestock, that is true, and the individual farmers would be hurt except insofar as the state made up their loss; but, for the country as a whole, farmers would be able to get prices for their livestock products from the consumers that would be really something. And the consumers would be the ones that would really pay the penalty. So that the consumers are the ones that ought to be on guard watching that,

rather than the farmers.

Mr. CARLSON. Of course, the consumers are depending on the Office of Price Administration to protect them from any harm. Dr. COULTER. That wouldn't do any good.

Mr. CARLSON. I agree with you, but that is the situation at the present time, on account of black markets; it is playing right into their hands.

Dr. COULTER. Well, yes. Refrigeration has come in now, and the home can put in a freezer as well as an icebox and lay in supplies. Mr. CARLSON. The fifth recommendation is:

Protection should be given American industry, labor, and agriculture from dumping and other destructive foreign competition of nations employing forced labor, depreciated currencies or similar means to undersell our domestic market.

Dr. COULTER. Yes; I think that is the one that is comprehensive. Mr. CARLSON. That is right.

The sixth one is:

Those negotiating reciprocal agreements should be instructed to carefully consider in connection with any agreement the economic effects of the mostfavored-nation clause in respect to imports from third countries.

Dr. COULTER. Yes.

Mr. CARLSON. I think probably you have covered that earlier here today.

Dr. COULTER. Yes; I have.

Mr. CARLSON. And seventh:

Congress should request the Tariff Commission to start as soon as feasible study of the economic effects of the reciprocal trade agreements with particular reference to the conditions which exist after hostilities cease, and to report to Congress concerning them once a year after hostilities cease.

Dr. COULTER. I think that the tariff reports of information concerning production, prices, marketing, consumption, have been very, very valuable; and if the Congress had that sort of information in an annual report of the two or three thousand items involved, then the Congress would be constantly advised, and the country would be safe. I think that Congress would be prepared to act hastily-I mean quickly-without having to wait for months and months or years for compilation of data. A well set up tariff commission would do that job.

Mr. CARLSON. I think it is unfortunate that the imports and exports of competitive commodities that are not directly involved in the war effort are kept from the public at this time. I criticized that in December when Dr. Rider was before this committee on the Second War Powers Act, and I still contend it is a mistake.

Dr. COULTER. Yes.

Mr. CARLSON. I do not see any reason why we are not entitled to get that information.

Dr. COULTER. Yes.

Mr. CARLSON. Certainly the shipment of farm machinery.

Dr. COULTER. I do not think that would be giving any aid or comfort to the enemy.

Mr. CARLSON. It does not, and I think it hurts the

Dr. COULTER (interposing). Morale.

Mr. CARLSON. Morale of the people, and it is just a further evidence of all these things that they try to do in secrecy. Dr. COULTER. Yes.

Mr. CARLSON. And I think it is most unfortunate that the State Department, the Department of Commerce, the Bureau of Economic Warfare, and all these other agencies are withholding that information.

Dr. COULTER. Yes. I think that it is all being compiled. I hope But all we are being given is once a year merely the total of the exports and total of the imports.

So.

Mr. CARLSON. Well, if you inquire of the State Department for information with regard to exports, I have found that no figures are available after September 1941 for publication and for use.

Dr. COULTER. Not in detail.

Mr. CARLSON. 1941.

Dr. COULTER. 1941. Not by country or by commodity.

Mr. CARLSON. That is correct. And I think it is a mistake.

Dr. COULTER. I have not been able to get the details even for confidential use.

Mr. CARLSON. The next one is:

Those responsible for administration of the act should be required to move promptly to protect American interests against any violations of the provisions of the act.

Dr. COULTER. Yes. That would be in case of currency depreciation or other acts; there should be a reservation or a withholding clause, canceling clause, suspending clause.

Mr. CARLSON. The last and ninth one is:

It should be stipulated that postwar American foreign trade would be in the hands of private enterprise rather than conducted by Government agencies.

Dr. COULTER. That is, assuming that this country is not going to itself surrender the very things that we have set forth as the goals for which we are fighting, it ought to be free enterprise or private enterprise. The governments do awful things. I mean they may

seem necessary.

I recall Russia does all the trade through the Amtorg for Russia. I recall, for instance, Russia wanted a million dollars' worth of machine tools and had to pay for them. Now, Russia could just say, "Well, what have we got?" Well, they dug into one pile of material and just loaded several boats and started them over here, and they figured that even if they only got half price for it they would get a million dollars and pay for their machine tools. But those boatloads of stuff that came in just absolutely knocked the bottom out of a very important industry here, just put them on the blink quick; and so disturbing was it that the administration found it necessary to place the shipment under control, to prevent its sale, on the ground that it was being offered contrary to fair methods of competition.

Mr. CARLSON. Well, Russia used the Amtorg as a trading corporation.

Dr. COULTER. Yes; through the state, you see, it could take a loss. It took this $5,000,000 worth of something they didn't need in order to get something they did need, and that $5,000,000 worth could be just handed in here at any kind of price, destroying an industry for a year or two, putting them into bankruptcy, throwing labor out, because the state could take a loss.

Now, if our Government is engaged in this through all these corporations, if they should go on with that policy, they could make foreign trade a perfect hurricane of damage.