and South America see us emasculating the trade-agreement program or destroying it or reducing it or subjecting it at this time to new controls even from Congress, they cannot interpret that-I think it would be foolish for us to imagine that they would interpret itas anything other than a preliminary to withdrawal from cooperation with the world; that we were cooperating temporarily to bribe them, so to speak, to help us win the war, and then we were going to walk out on them.

It is not a question of whether we think that opinion would be justified or not. It is a question of what the effect on them is almost certain to be. We have to have their confidence if we are going to stay united to win the war. We have to have their confidence if we are to be strong after the war. We all read yesterday that we lost 12,000,000 tons of shipping last year. After this war, at that rate, America is going to be practically stripped of reserves of several vital materials. Zinc is almost gone, copper and lead scraping the bottom of the barrel in 10 years or so, tin and nickel we don't have, bauxite or aluminum resources we are using up like mad, mercury is practically gone, dependent on other countries for adequate tungsten, chromium, and so forth. Some people feel that the end of the oil industry is up ahead only a few decades.

America is going to need materials after this war, and we can't get them except on a basis of quid pro quo. Personally, I suspect that if we are not going to do our utmost to build up world trade, there might be some wisdom in our importing more of these raw materials from abroad now and husbanding our own resources, rather than using up what we have here and making all the money we can, and then perhaps come to a third war without enough to win it and without friends from whom to secure the essential materials. It would injure terribly some businesses now if we were to reduce our mining of copper or iron for example. But we must think ahead. We must have either reserves ourselves or friends. I am afraid that one day we might come up against disaster and be dependent upon other peoples for a whole lot of raw materials and they would not help us if they feel that we have just tried to bribe them with a 1-year extension, or only until 6 months after the war is over which to them cannot mean anything except that we are just going along temporarily until we can walk out.

I hope you won't misunderstand my saying that. I am just trying to project myself over into their minds, and think how it inevitably will look to them, even though you and I will not regard it in such a light. We are 130 millions of people. There are almost 200 millions of Russians that are awake today, and they are going places. They have devotion to ideals as they see them that is just as passionate as was the devotion of our ancestors in 1776, and of the French at the time of their revolution. The Chinese are alive with germinating ideas, 450 millions of them. Almost 400 million Indians are stirring. There are 150 millions in South America, and here we Americans are only 130 millions. It is hard for us to realize our position in the world has drastically changed.

America was able, in the past, to get security by separation from the world. We had two wide oceans; and then we ourselves destroyed the oceans. We invented the steamboat, we invented the airplane, we invented the submarine ourselves. I oftentimes wish we had a planet

all to ourselves, but if we did have such a planet we Americans would lie awake nights until we could think up some way to bridge the distance to other planets to begin carrying on trade with those other planets, and then wonder why we didn't have the security that came from the former isolation.

Our physical separation is gone. America has to be realistic. She is going to have to have friends in the years ahead, and you don't make friends by giving them the impression that you are going out on them.

If our trade treaties had worked badly, if we could produce evidence where it had hurt major industries badly, or without compensating over-all gains, it would be a different thing. But I have seen no such evidence. I personally hope that the committee will vote, and that the Congress will note, to extend it the normal time, 3 years. Everybody admits not much normal trade is going on now during the war. I don't believe anybody can predict, on the basis of the careful way in which the program has thus far been handled, that we are likely to have disaster for our country from this program in the next 3 years. I hope we won't, at this time, give Congress a veto power on individual agreements. I thing the reconsideration of the whole program every 3 years is our best veto power. If you allow immediate veto power there will always be tremendous sectional pressures. In any such adjustments of give and take, some interests are hurt. But that is the law of life and growth and progress. When the bridge was built the ferry people complained because they lost their livelihood. When the railroad was invented it put the stagecoaches out of work, and their first reaction was violently against it. Then they found that in the long run it brought enormously greater employment and prosperity, not less.

When the bus and automobile came along the railroads fought hard because it hurt them. Sure it hurt them. But in the long run it benefited the country. Now, when the airplane comes along all the others oppose it, because it, too, hurts immediately.

If we in Congress have immediate veto power we will be inclined to decide, we will be under pressure to decide on the basis of immediate gains or losses to specific interests in our districts, whereas surely the Congress of the United States and the Executive of the United States have to think primarily from the long-term standpoint of the country as a whole. I believe profoundly that such policies when executed carefully and gradually always operate to the long-term advantage even of those interests which at first suffer somewhat.

It is perfectly clear that my State, Minnesota, can't have prosperity except as the States around her have prosperity, so that they can buy our butter and our iron and our wheat and our flax, and so forth, and thus enable us to buy the things they produce more efficiently than we. And I am perfectly sure in my own mind, having been forced to these conclusions abroad, that America can never again be sure of her security and of her prosperity unless the world is something other than an economic and political jungle; unless we are doing our level best to carry our rightful share-not more than our share, but also not less than our fair share-in building up other people's security and prosperity, too; not to take prosperity away from us but to bring more to us; not to give away America, but only to save the kind of America that we know and want her to continue to be, an America of growth and expansion.

With every change there is a risk of losing something that you have, but there is also the glorious possibility of getting something enormously better than you have. Trying just to hang on to the status quo, to hug our money bags to us is the way of death. America can't live just by defending yesterday. She can live only if we reach out boldly with the confidence our forefathers had to win the future.

I think Americans are the only people in the world who don't fully realize how powerful this land is. We sit down and say, "What will the British do?" "What will Russia say?" And everywhere else in the world the first question people ask is, "What will America do?" All America needs to do is recognize her own strength and lead out. No other nation is in a position to put something dire over on us in a trade, unless we are incredibly timid; and if we aren't able to hold our own when we are participating in the trading; then we certainly can't escape their ganging up to put things over on us if we refuse to participate.

I think, if we examine the fears that were expressed in 1934 and 1937, and in 1940 as to what might happen under this trade agreements program, it is clear that after all, none of those terrible things predicted has actually occurred.

I am glad to introduce in the record part of a letter that I received yesterday. I wired and asked the author if he would give me permission to put it in. It is from a man who was for 12 years a Member of Congress, a good Republican, now vice president of General Mills, Inc., of Minneapolis. He writes, referring to extending the power of the President to make trade treaties without Senate approval:

"The present situation, it seems to me, is one of expediency rather than one of principle. Our export departments" (and General Mills, Inc., is the biggest flour and grain products concern in the whole Northwest) "are the ones who know about these matters and who feel the effects of them if they are adverse. I thought it worth while to indicate to you that our experience under the treaties thus far negotiated, has been quite satisfactory."

Officers of the Pillsbury Flour Mills Co., of Minneapolis, have also expressed themselves in favor of extending the powers granted the President under the Reciprocal Trade Agreements Act.

In summary, I think personally that there are positive advantages from both economic and political standpoints, in continuing the present program. But if others do not agree that there are positive economic advantages, still surely we must admit that there have been no serious losses or disadvantages during these 9 years. I think we can agree that the State Department has handled the power that has been given it very wisely and hasn't been out-bargained by and large; that on the whole, the advantages to us have been greater than the disadvantages.

I think we can agree further that if we continue for 3 years it cannot possible wreck this country, especially in the 3 years when there isn't likely to be an awful lot of nonwar trade going on. Therefore I believe that there are no serious dangers economically in continuing the program as at present, and I believe with all my heart that there are serious dangers politically if we destroy or cripple or restrict the program as it exists today.

It seems to me when the risks of going on are so small and the risks of stopping are so great that the part of wisdom dictates that we take the lesser of those two risks and renew the act.

Thank you very much.

The CHAIRMAN. We thank you.

Mr. KNUTSON. I would like to ask a question.

Dr. Judd, you have expressed the belief that our depression lasted much longer than former ones because there was no longer an undeveloped West where the unemployed could go and unemployed idle money could be used. There is no doubt that there is some foundation for that. But I am wondering if that would be the main reason, because European countries, who havent had any "West" for 1,000 years-I am speaking now more particularly of the Scandinavian countries and Germany-made a much quicker recovery than we did. Dr. JUDD. And they had, on the whole, a much more liberal foreign policy as regards trade with foreign nations, too, didn't they?

Mr. KNUTSON. No; I wouldn't say so. The countries that I have named were high-protection countries, as you know. Of course, they had large free lists because it was necessary for them to import a considerable part of their raw materials. But I don't know of any of those countries that in any way encouraged importation of competitive products. Even England doesn't.

On yesterday a statement was read into the record, an extract from an address delivered by the Minister of Labor, I think, in England, where he complimented the potters in their convention because they were one concern that did not need to import large quantities of material in order to operate. In other words, they had the clay right there. Evidently he isn't of the same opinion as some of the witnesses who have appeared here today. He rather deprecates the idea of large imports.

Dr. JUDD. There isn't any possibility in the long run, is there, of a nation which is a creditor nation exporting unless it imports? Other nations haven't the gold. The only way they can pay is either in their goods or their services.

Mr. KNUTSON. I agree with that. I think we are all in agreement with that. But what kind of goods should we import ?

Dr. JUDD. Well, we will have to give and take on that. The Scandinavian countries had, in a sense, an advantage over us in that they didn't have enough of their own raw materials and could import them as to pay for their exports. I suggested we import more raw materials, reserving our own. For the rest we cannot escape importing some competitive products-unless we are to give up all exporting which would be disastrous to many other industries. Therein lies the danger of allowing the thing to be decided in Congress, because you and I are subject to the pottery people of Minnesota and the flax and the dairy producers, and some other Congressman is subject to meat growers and somebody else to shoes and somebody else to cotton products, and so forth. I think it must be looked at from the standpoint of the over-all picture, because if we are too anxious to save this one particular thing for this one State we will lose something infinitely greater.

Mr. KNUTSON. I think you will agree-I am sure you will-that there should not be a complete break-down of barriers.

Dr. JUDD. Certainly I agree.

Mr. KNUTSON. So long as there is such a vast difference in living conditions.

Dr. JUDD. Absolutely. I am not advocating free trade now or in any predictable future. If I did not make that clear, I want to. The gap is at present far too great. It is unbridgeable in many places. But we can increase theirs a little bit in certain things and reduce ours in certain other things-——

Mr. KNUTSON. Well, as I recall, 67 percent of all the items listed in the last tariff act are on the free list.

Dr. JUDD. That is right, I think.

Mr. KNUTSON. That is a very large free list, Dr. Judd.

Dr. JUDD. That is right; but on the other hand, we had great unemployment of

Mr. KNUTSON. Well, as to this depression, you know, I sometimes wonder if it wasn't artificially prolonged for ulterior purposes. I don't want to question anybody's integrity.

Mr. COOPER. No.

Mr. KNUTSON. But I sometimes wonder, because other countries that have only a fraction of our resources were able to snap right

out of it.

Dr. JUDD. But one of the reasons was, if I may venture a thought, that they hadn't overbuilt their productive capacity the way we had. Most of those countries had built a productive capacity only for their domestic consumption, and America in feeding, in developing, and manufacturing things to supply her allies in Europe during the last war, when they couldn't produce, themselves, overbuilt her plant. Therefore she had to either scrap it or have some place to which she could sell her surplus products.

Mr. KNUTSON. That is true of agriculture.

Dr. JUDD. Yes.

Mr. KNUTSON. Do you think it would relieve the situation by permitting vast quantities of imports that are competitive in their nature?

Dr. JUDD. There are some that are bound to be partly competitive, but there are a great many that can be relatively less competitive. As I mentioned, a good many things we have had adequate supplies of in the past we are going to have to get more and more from abroad. Mr. KNUTSON. Unless we can find substitutes for them at home. Dr. JUDD. That is right. Therefore I think the trouble, the difficulty, from competitive products will get less as we go on, rather than more. And it seems to me unwise to destroy a program which at least hasn't brought disaster to anybody.

Mr. KNUTSON. We have invested about $650,000.000, as near as I can find out, in our synthetic rubber industry. Secretary Wallace said that he was in favor of that industry folding up after the war rather than to give them a tariff to develop one. You know that most of the industries that we have were at one time infants in swaddling clothes, and they were made possible by the imposition of tariffs, wisely provided by the Republican Party, and as a result we became the greatest industrial country in the world. We had the highest living standards of any people in the world.

Dr. JUDD. And we were still a debtor nation, too.

Mr. KNUTSON. You mentioned about automobiles in your very fine address here. I think we have more automobiles in the city of