Mr. HOLMAN (continuing). Summarizing these sanitary conventions which are imposed upon us, they form a constant danger to the public health; they inhibit the freedom of the Congress to establish such sanitary standards as it may deem fit for imported products, and they are, in our judgment, so close to being treaties that they require Senate ratification. And evidently the State Department thought so, or it would not have sent the Argentine convention to the Senate at the time when it did. I might say that the United States and 4 other nations are the only ones which do not require legislative ratification among the 27 countries which have to date signed agreements with us. It has been argued that because the United States Congress has only ratified 3 agreements since approximately the Civil War period, that fact in itself proves that the Congress is not a proper body to consider and supervise and advise with the State Department on the agreements in respect to international trade. I think the converse of that is equally true the fact that Congress did not find it desirable to ratify such trade agreements as were proposed showed that the Congress, in its own judgment and wisdom, felt that these agreements should not be entered into by the State Department. In passing, I might say that while we believe in a Senate treaty ratification as being best, we do not object, in fact would supportif in its judgment this committee, or a strong minority of the Congress felt it desirable to advocate majority action by both Houses-our organization would support such restrictions, believing it to be in the interest of the country to have some form of congressional restriction over the State Department and its associated departments. Also, Mr. Chairman-and I think the arguments for this have been made a good many times-we believe in the application of the trade agreements primarily, in fact only, to nations who, in return, sign trade agreements with us. And we are opposed to the generalization of such agreements, their benefits, concessions and reductions of duties, to all contries of the world irrespective of whether they sign agreement with us, or not. I now call your attention briefly to three tables which also have been distributed around, which show the results of a survey we made in 1940 of the trade under the trade agreements in effect at that time. Table No. 1 shows that our duty reductions on agricultural exports to trade agreement countries amounted to 12.3 percent of our exports, and the duty reductions which we gave these countries amounted to 15.1 percent. It also shows that our duty reductions to all nations of the world amounted to 8.3 percent; that is, that is what we got, and what came in from all over the world meant that we gave duty reductions of 21.8 percent on the total trade. In terms of net gain or loss in this year 1938 that was studied, we gained a little to trade agreement countries $21,621,000; but to the other countries that we did not have trade agreements with but where we conferred these generalization features, we lost $36,952,000, or a net loss in our world trade of $15,331,000. Table No. 2 shows a similar situation with respect to export and import trade of industrial products. Table No. 3 is the most unique table, I think, that has ever been produced in tariff studies. In this study, in all of these tables and many others that we have, we took every single commodity that had been made the subject of a concession or duty reduction and for 60 days we had a staff of nearly 20 people who worked day and night to produce this information, in order to get some idea of just what was going on. We took 2 years of trade before the trade agreement was made with a particular country. We omitted the year in which the agreement was made and took the 2 years following, and compared the first 2 years with the second 2 years of trade only on the articles that were made the subject of concessions. You will note from that table with regard to our agricultural exports that our trade increased to those countries by 54.5 percent. Their agricultural competitive trade with us, imports, increased 73.8 percent. Our trade in dollars increased in these commodities by $36,000,000-no; our trade in the 2-year period before was $36,000,000 in the minus; our trade in the 2 years afterward, in agricultural imports, was $92,000,000 in the minus. That, for whatever it may be worth, I would like to ask the privilege of filing into the record. The CHAIRMAN. Without objection, they may be inserted. (The tables above referred to are as follows:) TABLE I.-Duty reductions we received and gave on agricultural products in terms of 1938 trade This item includes both the amounts on which the benefits were generalized to non-trade-agreement countries and to trade-agreement countries and is not comparable with the total imports from non-tradeagreement countries. Source: Exports from statistics of foreign countries and U. S. Department of Commerce-Foreign Commerce and Navigation of the United States; imports from U. S. Department of Commerce-Foreign Com. merce and Navigation of the United States. TABLE II.-Duty reductions we received and gave on industrial products in terms of 1938 trade 3 This item includes both the amounts on which the benefits were generalized to non-trade-agreement countries and to trade-agreement countries and is not comparable with the total imports from non-tradeagreement countries. Source: Exports from Foreign Commerce and Navigation of the United States, U. S. Department of Commerce, and foreign country statistics; imports from foreign commerce and navigation of the U.S. Department of Commerce. Year TABLE III.— Value of United States agricultural exports and competitive agricultural imports 2 years before and 2 years after trade agreements 2 [All values in millions of dollars] Agricultural exports Excess of agricultural exports over agricultural com Agricultural competitive imports agree Country ment Change Change petitive imports 1 This was table No. 8 submitted in the testimony of Charles W. Holman before the Senate Finance Committee (pp. 651-689 inclusive). It was not necessary to revise the nature of information on this table. Only includes countries with which agreements were made prior to 1937. "Before" and "After" captions denote the average of 2 years pri or and 2 years after the year in which an agreement with each individual country was first made. Source: Compiled from U. S. Department of Commerce yearbooks and work sheets of the U. S. Department of Agriculture. Classification of agricultural exports and competitive agricultural imports is the same as endorsed by the U. S. Department of Agriculture except that bananas have been added to competitive agricultural imports. However, imports of bananas "before" and "after" only increased $2.5 millions or 19.2 percent, whereas all competitive agricultural imports increased 73.8 percent. Mr. HOLMAN. The study was a corrected study made originally for the Senate Committee on Finance in connection with the fight 3 years ago, but these particular tables in revised form have never been published before. Now, passing on, we feel that the law at the present time should be corrected so as very definitely to limit the President in making duty reductions to 50 percent of the existing statutory rate, rather than the language as it now occurs in the bill, "the existing rates." Under the present language, there is at least one case in which the trade agreement has gone below the 50-percent limitation intended in the bill, and that is a case involving the importation into this country of ale and other malt beverages. Under the original section 336 of the act of 1930, the Treasury Department made a decision cutting rates 50 percent. Later on, the State Department came around and in the Mexican trade agreement cut the rate an additional 50 percent under the Treasury's decision. I ask permission to file that memorandum. The CHAIRMAN. Without objection, it is so ordered. (The matter above referred to is as follows:) REDUCING DUTIES NOT MORE THAN 50 PERCENT UNDER THE TRADE AGREEMENT Аст With respect to the President's authority under section 350 (the Trade Agreement Act) of the 1930 Tariff Act, to proclaim modifications of existing duties on articles the subject matter of trade agreements, Congress wrote into the law a limitation that "no proclamation shall be made increasing or decreasing by more than 50 per centum any existing rate of duty or transferring any article between the dutiable and free lists." It will be noted that the limitation is only that the President may not increase or decrease "any existing rate of duty" by more than 50 percent. This is quite different from limiting the President's authority to a reduction of the "statutory" rate fixed by act of Congress, by not more than 50 percent. While to our knowledge there has been no occasion when the President has failed to adhere to this limitation on his power, nevertheless advantage has been taken since the passage of the Trade Agreement Act, in at least one instance, of the "loophole" contained in this limitation proviso. That instance is the reduction of the rate of duty on ale, porter, stout, and beer negotiated in the trade agreement between the United States and Mexico, signed December 23, 1942. The duty imposed upon these articles by Congress in the Tariff Act of 1930 was $1 per gallon. On January 16, 1935 (6 months following the enactment of the trade agreement law), the President, pursuant to section 336 of the 1930 Tariff Act, issued a proclamation reducing this rate of duty by 50 percent, to 50 cents per gallon in order to equalize differences in costs of production (Treasury Decision 47470; copy attached). On December 23, 1942, the Mexican trade agreement was signed and one of the concessions made by the United States was the reduction of the rate of duty on the described articles from 50 cents per gallon to 25 cents per gallon. Thus, under section 336 of the 1930 Tariff Act and the Trade Agreement Act, there has been a total reduction in the rate of duty imposed by Congress on ale, porter, stout, and beer, of 75 percent. Obviously, if the President could do this with respect to these malt beverages, he can do so with respect to all other items which may become the bartering subject of trade agreements with foreign countries, and the limitations imposed on his authority by Congress are reduced to an absurdity. While this downward revision of the statutory rate of duty never could be greater perhaps than a total of 75 percent (sec. 336 limits the reduction to not more than 50 percent of the rates expressly fixed by statute), nevertheless the combination of the two would appear to permit a reduction in rate not contemplated by Congress when it enacted the Trade Agreement Act. In this connection, it should be recalled that section 336 of the 1930 Tariff Act becomes inapplicable to articles after their importation has been given treatment in a trade agreement [T. D. 47470] President's Proclamation Under Section 336, Tariff Act of 1930, Decreasing the Duty on Ale, Porter, Stout, and Beer TREASURY DEPARTMENT, OFFICE OF THE COMMISSIONER OF CUSTOMS, To Collectors of Customs and Others Concerned: There is published for your information and guidance the appended proclamation of the President, issued under the provisions of section 336 of the Tariff Act of 1930, decreasing the rate of duty on ale, porter, stout, and beer from $1 per gallon to 50 cents per gallon. This decrease will be effective on and after February 15, 1935. JAMES H. MOYLE, Commissioner of Customs. BY THE PRESIDENT OF THE UNITED STATES OF AMERICA A PROCLAMATION Whereas under and by virtue of section 336 of title III, part II, of the act of Congress approved June 17, 1930 (46 Stat. 590, 701), entitled "An Act To provide revenue, to regulate commerce with foreign countries, to encourage the industries of the United States, to protect American labor, and for other purposes," the United States Tariff Commission has investigated the difference in costs of production of, and all other facts and conditions enumerated in said section with |