the Clerk of the Senate and is approved by a joint resolution within a period of 90 days from such filing.

"Resolved further, That the committee on customs law be authorized to advocate the adoption of such amendment before the appropriate committees of Congress.'"

Sincerely yours,

A. MCC. BARNES, Chairman, Standing Committee on Customs Law.

Mr. JENKINS. Mr. Hand, I think you indicated that in your constituency there are great glass-manufacturing plants. Now, then, has it come to your attention that glass manufacturers in some sections have taken a position against this legislation, upon the theory that this legislation will, if broad enough, restrict the importation of oil and various commodities of that kind of Venezuela and, in turn, then, would preclude exports to Venezuela-the glass people do not want them shut out, because Venezuela os one of the great purchasers of the glass products made in this country?

Mr. HAND. It has not come to my attention, Mr. Jenkins, from the glass industry. The glass industry that I know about, both management and labor-Mr. Cook, the president of the American Flint Glass Workers' Union, has been for years vitally interested in this general question. But it has come to my attention from one or two other segments of industry. One of the large food producers in my district recently was in touch with me on the oil section of the bill, and he feared the unrestricted importation of oil from Venezuela. But that has not come to my attention from any part of the glass industry as yet.

Mr. JENKINS. That is all, Mr. Chairman.

The CHAIRMAN. I am sorry I was not here, Mr. Hand, when you first started your testimony. Naturally, I will look over your bill with a good deal of care.

You know, there is a great disparity between the taxes in this country and abroad. The other countries have been lowering their taxes. Canada has lowered taxes far below ours. Canada has done away with the excess-profit exaction and also given a 20-percent tax relief on dividends.

England has done the same thing. She has reduced her taxes far below ours.

Now, taxes enter into the cost of production. Do you not think that the disparity between the taxation in this country and the foreign countries should be taken into consideration when we are making up these rates?

Mr. HAND. I feel very definitely that it should. And, of course, the great disparity in working conditions, and so on. In glass, one of our great rivals would be Czechoslovakia.

The CHAIRMAN. Right there, is it not true that Czechoslovakia, to get around the tariff and get her glass in here without restriction, has been shipping it in here by the pound?

Mr. HAND. I understand that that device has been resorted to, and I would like to say this, Mr. Chairman, if I may: That I think we all are inclined to favor the theory of reciprocal trade, but I have not found where there is too much reciprocity in some of these things. Import quotas have been formulated by other countries. If we did that, there would be an outcry.

The CHAIRMAN. I challenge anybody to show definitely that there has been any reciprocity in these agreements. It is a one-way street. Mr. HAND. That has been my feeling, sir.

The CHAIRMAN. If they do make some concessions, they immediately counter it, as was shown yesterday in regard to motorcycles. They would not give an import license. Consequently, they are completely shut out, although they can lower the tariff 10 percent. Thank you very much, Mr. Hand.

Mr. HAND. Thank you, Mr. Chairman.

The CHAIRMAN. The next witness will be Mr. O. M. Reed, Washington representative, National Creameries Association.

Mr. Reed, will you give your full name and address and the purpose for which you appear, whom you represent!

STATEMENT OF OTIE M. REED, WASHINGTON REPRESENTATIVE, NATIONAL CREAMERIES ASSOCIATION, ST. PAUL, MINN.

Mr. REED. Thank you, sir.

Mr. Chairman and gentlemen of the committee, my name is Otie M. Reed. I am the Washington representative for the National Creameries Association, which has its headquarters in St. Paul, Minn.

The CHAIRMAN. Pardon me, Mr. Reed. If I may interrupt a minute: I see this is probably a very lengthy, very timely, and very important presentation. About how long would you think it would take? You see, we have 13 witnesses or more scheduled today.

Mr. REED. Mr. Chairman, I had intended at the start of this statement to ask for your permission to file the statement as a part of the record, and I have briefed it down and will talke from notes. The CHAIRMAN. About how long will you require?

Mr. REED. I note in the notice that came to me we are given 20 minutes, and I will try to limit myself to that.

The CHAIRMAN. Thank you very much.

Mr. REED. The National Creameries Association is composed of about 950 plants which are engaged primarily in the processing of butter and nonfat dry-mil solids and other dairy products. They are located in the States of Minnesota, Wisconsin, Iowa, Michigan, Kansas, Nebraska, North and South Dakota, and Wyoming.

Also, in connection with this statement today, I am speaking in general for the Dairy Industry Committee, an organization which is composed of the national associations, such as the National Cheese Institute, the American Butter Institute, the Evaporated Milk Association, the Dry Milk Association, and the like.

The dairy farmers that I represent, of which there are some 300,000, are very much interested in the proposals to amend the Trade Agreements Act, and the administration proposals to extend it without any change or without any material change.

Since the enactment of the Trade Agreements Act tariffs have been reduced, through negotiation, about as follows:

Butter, starting with a tariff of 14 cents, was reduced during the period November 1 to March 31 of any year, 7 cents per pound on the first 50 million pounds, after which the 14-cent-per-pound tariff would be effective.

During the period April 1-July 15 the tariff is 7 cents per pound on the first 5 million pounds imported, and thereafter is 14 cents.

During the remainder of the period July 16 to October 31, 5 million pounds may be imported at 7 cents per pound, and thereafter the tariff goes back to the old rate of 14 cents per pound.

Also, tariffs have been cut just about in half on the dry-milk solids, dry buttermilk, and other dairy items.

One of our major interests in the tariff situation and in the import situation revolves around the fact that we have in this country a pricesupport program which is in operation for the dairy farmers, and under which our prices are being supported at 90 percent of parity.

For this coming year, this coming production year, ending March 31, 1954, prices are to be supported at a level which will return to producers 90 percent of parity for milk and butterfat. Those prices are being supported through the purchase of butter, nonfat dry-milk solids, and cheese, Cheddar cheese.

Currently, imports are controlled under section 104 of the Defense Production Act. Under that act, which was made effective in 1951, the Secretary of Agriculture has imposed embargoes upon the importation of butter and nonfat dry-milk solids. Quotas have been established on the importation of cheese, and only recently imports of dry whole milk and dry buttermilk were placed under embargo.

I might say that in the last year or so, a great many of the quotas with respect to cheese have been removed.

Section 104 took the place of the quota restrictions which were in effect under the Second War Powers Act, and which expired in mid1951.

At the present time, the administration has requested that section 104 be terminated. Our concern in the matter is that there be a full understanding of the results that will ensue if unlimited imports of dairy products are permitted.

The current situation, as far as production in this country is concerned, is roughly as follows:

Our milking herd has started to increase. In 1945, for example, we had 27,800,000 cows and heifers kept for milk on farms as of January 1. That number declined steadily until 1952, when it was 23,400,000 cows. This year it increased to almost 24 million head. It appears to us that the downward trend in cow numbers has definitely been arrested, and the numbers are on the upturn.

Production has been maintained fairly well, due very largely to increased production per cow, which, over the last 12 years, has shown a continuous increase.

In 1945, the year of peak production, we produced 119.8 billion pounds of milk in this country.

In 1951, this had fallen to 119.8, and in 1952, we produced 115.1. From the point of view of per capita milk production, we are at the lowest point in many years. We reached our peak of per capita milk production in 1942, at 879 pounds per capita of the population. Last year, 1952, it was 733 pounds per capita.

There has been a great shift in the utilization of milk. Butter consumption, for example, which averaged 16.7 pounds per capita during the period 1935-39 was 8.7 pounds in 1952. Most of the other dairy products show some slight increase. Fluid milk and cream shows some increase over the most recent years, although it is consider. ably below the per capita peak reached in 1945.

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The way the situation is going now, we expect milk production this year to be about last year, although, of course, drought and other adverse growing conditions might change the picture.

We are frequently told that the United States would not import many dairy products even if all quotas were removed. We find it necessary to disagree with that statement. For example, there is a very large volume of production in the major producing countries of the world. Taking the major producing countries in 1951, the latest data I have, they produced all together 4.5 billion pounds of butter, 3.8 billion pounds of cheese, 5 billion pounds of canned milk, and 1.1 billion pounds of dried milk products.

The international movement in the manufacture of dairy products is significant. In 1951, Denmark exported 303 million pounds; Netherlands, 119 million; Sweden, 58 million; Australia, 76 million; New Zealand, 101 million. There were also bery significant international movements of cheese and other dairy products.

In international trade at the present time, the largest importing country, by far, is the United Kingdom.

My statement, Mr. Chairman, has detailed figures on all these, so I am just through them very rapidly.

The CHAIRMAN. Very good. Thank you.

Mr. REED. We think it is necessary that we have positive import controls on dairy products. As I indicated, we have a situation in this country where we have a price-support program which is supposed to return to the producer 90 percent of the parity price. That is for milk and butterfat.

Also, you gentlemen will recall that the basic commodities, corn, cotton, tobacco, wheat, peanuts, and rice, are supported at 90 percent of parity through loans and purchases on a mandatory basis until the end of the next growing season.

Currently, our support price on butter is 6534 cents per pound, basis Chicago, and on dry milk it is 16 cents per pound.

Currently, the Government is purchasing around a million pounds of butter per day in order to support the price at 90 percent of parity. It has in inventory approximately 132 million pounds of butter, which are not earmarked for any program, and it has a significant volume of dry-milk solids in inventory at the present time.

Although these figures may seem quite huge, it is interesting to note that they comprise only 2 to 3 percent of the total milk production in this country; so that from the standpoint of relationship of the total purchases to our total production, it is quite small.

For many years there has been in our view, a conflict in our domestic farm policy goals and our foreign trade policy goals. Under the Trade Agreements Act, efforts have been made to reduce tariffs and to free international trade of some of the restrictions and barriers, affecting it. On the other hand, in our domestic farm policy, we have all been striving toward achieving the goal of parity prices for farmers. These programs so far have never been correlated from a policy point of view, so that we find some of the departments of the executive branch going in one direction and other departments going in another.

We hope that the Congress will take cognizance of that situation and do something to correct it.

The main reason that unlimited imports would be disastrous at this time is, first, as I have indicated, we are only barely maintaining milk production, and it is to be remembered that at the same time our population is increasing about 2 percent per year.

Secondly, our price-support program, our price levels, are considerably above world prices.

Incidentally, there is not a true free world price for butter or other dairy products that I can ascertain.

As I indicated before, the United Kingdom is by far the greatest importer, and imports of butter into the United Kingdom are effectuated under the government-to-government agreements which have been entered between the Governments of the United Kingdom, Australia, New Zealand, Canada, and Denmark, and, I think, the Netherlands. Under those agreements, the prices are fixed at certain levels. During the 1952-53 contract year, Australian choice grade butter, their finest butter, will be sold to the United Kingdom at 39.2 cents per pound in American money. New Zealand butter, finest grade, at the same price. Butter from Denmark goes to the United Kingdom at 42.2 cents per pound.

If we take those contract prices as representing the prices at which those countries can afford to sell butter, and they do sell by far the greater proportion of their volume at those prices, we can arrive at an estimate of about what the price would be in this country on imported. butter. The tariff on the first 60 million pounds, plus about 4 cents handling charges, would bring those prices to a laid-down cost in the United States of around 52 to 53 cents per pound, which is considerably under our price-support program.

The result of removing the quota restrictions on butter and at the same time maintaining a price-support program at its current level in this country would be to invite very large shipments of such butter to the United States, which we would have to buy.

We feel that that would go very far toward wrecking the pricesupport program for the Aemrican dairy farmer. We do not believe that the Congress intended, and certainly we do not agree with the thesis that our price-support program for American agriculture should be converted to a price-support program for the world. Undoubtedly, we would be in the position of purchasing many millions of pounds of butter, under this type of program, and in all probability we would have great difficulty in disposing of it.

Prior to the war, when we operated surplus-removal programs, there were 8 million people on relief, and significant volumes of butter and other agricultural commodities could be distributed to them. That situation does not obtain today.

About our only recourse, we think, would be just to turn around, after having purchased the butter at high prices, and resell it for whatever we could get for it in foreign-trade channels.

I would like to comment in passing that there have been many adverse comments as to the cost of the dairy price-support program. Since the war, the Commodity Credit Corporation has sustained losses of $132 million in the purchase program for dairy products from an original cost of around $300 million. That does not include, of course, the operations currently under way. Losses on butter during the period were only $48 million as compared to a cost of around $150 million. I am sure you gentlemen are familiar with the costs of some