However, I agree with you that there may be a serious problem regarding the flow of goods into Latin America from other sources, cheap goods, and there again it seems to me that if we are working closely with them, they will be more likely to face that problem in a way that will be to the mutual interests of us all.

Mr. DISNEY. That is all, Mr. Chairman.

Mr. CARLSON. Just one minute. Mr. Rockefeller, I want to compliment you on the fine statement you have made. You have expressed yourself in a clear-cut manner and very frankly, which is what this committee wants to hear. It just so happens that I have friends in South America who write me, and they have written very commendably about your work down there, and I am sure you have done your work in South America just as you have made your appearance before this committee, and I am very happy to have this opportunity to say that.

Mr. ROCKEFELLER. I appreciate it very much.

The CHAIRMAN. We thank you, Mr. Rockefeller, for your very fair, comprehensive, and helpful statement.

We will take a recess until 2:30.

(Whereupon the committee took a recess until 2:30 p. m.)

AFTER RECESS

The committee reconvened pursuant to the taking of the recess, Hon. Jere Cooper presiding.

Mr. COOPER. The committee will please be in order. The chairman advised he would be detained for a few minutes.

The next witness appearing on the calendar is Hon. Claude Wickard, Secretary of Agriculture.

Mr. Secretary, do you have a prepared statement you desire to present?

Secretary WICKARD. Yes, sir.

Mr. COOPER. Without objection, you may proceed without interruption and then answer any questions that may be asked by members of the committee. We will be glad to hear you, Mr. Secretary, and are delighted to have you present.

STATEMENT OF HON. CLAUDE R. WICKARD, SECRETARY OF AGRICULTURE

Secretary WICKARD. Thank you.

Mr. Cooper and members of the committee: I am very glad to have this opportunity to give this committee my views on House Joint Resolution 111, which provides for extending the reciprocal trade-agreements program. The issue is of great importance to the farmers of this country.

Farm people have their full share of patriotic interest in the country's general welfare. They want to do everything possible to promote full unity among the United Nations. After the war they want to see a sensible pattern of world cooperation, with this Nation playing its full and rightful part. The great majority of farmers do not want to see this country return to isolationism. They do not want to sow the seeds of international mistrust that well might grow

into future conflicts. Our rejection of the trade-agreements program, no matter for what reason, would be widely interpreted by our Allies, and other nations, as a vote against international cooperation after the war. We would be serving notice, in the midst of the great battle for a better world, that we do not intend to cooperate with other countries after the war is won.

Today, however, I want to discuss the bill from the standpoint of this country's agriculture. Extending the Trade Agreements Act would be of real benefit to farm people. Rejection of the bill would bring most serious consequences for agriculture.

I realize fully that the war has temporarily made negligible the present effect of the trade agreements upon both agriculture and industry. Certainly since 1939, and to some extent even before that date, other forces have been mainly responsible for directing the currents of world trade.

Our exports and imports now are being conducted with the sole aim of bringing victory; nearly all of the normal considerations of commerce have been pushed aside.

But we must look ahead to the day when we have won the war, and even beyond that to the day when the great volume of emergency relief shipments from this country, will begin to taper off. When that time comes, American agriculture almost certainly again will need commercial export markets. If the pattern of the pre-war years is even approximated, the farm people who produce cotton, wheat, hogs, tobacco, fruits, and some other commodities will need to sell some of their output to people of other countries. Thus they will stand in need of reasonable world tariff rates, and of fair treatment of their products in foreign countries.

Also, it is necessary that potential customers for our farm products, or for that matter any of our products, have the money to pay for them. If we should move to prevent other nations from selling their goods to us, they would not have the dollar exchange to buy our cotton, wheat, and other products, even if they wanted to trade with us.

The trade-agreement program, supplemented by international commodity agreements, is necessary to assuring favorable world markets for our products.

All farmers-those who produce the main export crops, and those who do not-also will stand in need of a strong and stable home market for their products. The way to assure a favorable domestic market for farm products is through full industrial employment at good wages. Thus the provisions of the trade-agreements program, which make for increased exports in industrial goods, are of direct concern to farm people.

Each one of our trade agreements has resulted in better treatment of our agricultural products in foreign markets. To name one example, the agreement with Great Britain improved the position of pork products in the British market, entirely removed the Empire preference on wheat imports into the United Kingdom, and made a long list of reduction, in Empire preference on agricultural imports, into both the United Kingdom and the British Colonies.

This country has, of course, granted material concessions in return. But these concessions have been so safeguarded that even the shorttime interests of specific producer groups have suffered little, if any,

adverse effect. The longer range interests of all agricultural producers clearly have been promoted. As in all genuine two-way relationships, there is give and take on both sides, but both this country, and those with which we have agreements, have gained in the long

run.

The actual history of the trade-agreements program shows that it has been operated carefully, with due regard for the interests of particular groups of producers, as well as for our agriculture as a whole.

When we do grant concessions on farm products that might compete seriously with our own, we have frequently limited the quantities to which the reduced rates apply. For example, the numbers of Canadian cattle, which have been allowed to enter at the reduced rates provided in the trade agreements with that country represent only about 1 percent of our total supply. However, this amount is large enough to be of considerable value to Canada, and for that reason, Canada has been willing to make agricultural concessions, which are helpful to our producers. Also there are seasonal limits on imports of fruits and vegetables, so as to protect American producers at times when the great bulk of our home-grown crop is moving to market. In the past these safeguards have worked very well. It is true that during the middle 1930's there were heavy imports that worried some people a great deal; but I believe by now everyone realizes that the basic cause of those imports was scarcity, and high prices in this country, and not the trade agreements. For instance, during the drought years, our imports of corn were much larger than normal, even though our duties on corn were not lowered by trade agreements. In those years we needed foreign corn to help feed our livestock and I don't know what livestock producers would have done without the imports.

In general, I think the record of the years before 1939 is a plain indication of the value of trade agreements to agriculture, as well as industry. I feel that the agreements will be of even greater value during the post-war years, for they will give us a flexibility in handling our trade relations, that we may need very badly in a changing world. There is no way in which we can foresee all of the specific trade conditions we shall have to meet after the war. Thus the wisest course is to have the machinery for adjusting our duties and quotas quickly, so as to make our trade flow more smoothly and increase our power to bargain for favorable treatment from other nations. The Trade Agreements Act can give us this necessary flexibility.

I have mentioned some of the reasons why our agriculture would be directly benefited by extension of the trade-agreements program. We also ought to look at what rejection of the program would mean to agriculture.

If the pending bill is rejected the Smoot-Hawley schedules prcbably will gradually be restored and perhaps even increased. As a result, other countries would make reprisals by raising their tariffs, and laying embargoes against our products just as they did a dozen years ago when the Smoot-Hawley Act first took effect. Farmers have not forgotten that bitter experience. Also, we would be laying the basis for economic warfare which eventually would lead again to military warfare.

In conclusion, I want to point out that trade agreements are only one part of the broad national and international policy necessary to a sound agriculture. We shall need, also, to continue adjusting our farm production to domestic and export requirements. We shall need to take any additional steps which are necessary to maintain fair prices to producers. We must work out a national program of nutrition which will enable all of our people to have enough of the right things to eat. We also must work with other nations to improve the diets of undernourished people in other parts of the world. We must continue our policy of promoting international commodity agreements for the great world export crops.

Trade agreements have a most important place in such a comprehensive program for our agriculture. Without such a program our farmers would find it very difficult to get along in the postwar world. Our only possible alternative would be to live by ourselves behind walls of high tariffs and embargoes.

American agriculture, as we know it today, cannot afford to have the Nation draw into its shell. I hope that the Congress, through extending the trade-agreements program, will put this country on record as ready to participate wholeheartedly in a program of international cooperation.

Mr. COOPER. Does that complete your statement, Mr. Secretary? Secretary WICKARD. Yes, sir.

Mr. ROBERTSON. Mr. Secretary, in connection with your reference that in the post-war era the producers of cotton, wheat, tobacco, hogs, and especially lard, fruit, and some other things, will need an export market, I think it would be helpful if our record would show at least a little something about the past history of tariff legislation, although Edmund Burke said, I believe, that nations do not learn through experience.

You remember when Woodrow Wilson was elected in 1912 on a platform called the New Freedom, he promised tariff revision, and, in 1913, he sent a message to Congress outlining the basis upon which the tariff should be revised. The essence of that was that we did not want tariff laws which, through the protection of inefficient units of industry, amounted to special privilege. Congress responded with the Underwood tariff.

Before he could put his entire New Freedom into operation, war started in Europe in 1914. We entered in 1917 and, in the spring of 1918, Woodrow Wilson put forth his 14 points which German leaders said had much to do in destroying the "will to fight" in Germany. The program was so fair, so reasonable, so appealing to common sense and reason, that the German people said "Why fight with a nation that has a program of that kind for the world?" And point No. 4, as I recall it, in his 14 points, dealt with the subject of international trade and a fair and reasonable access to the natural resources of the world for all nations, among others Germany, which, to some extent, was a have-not nation. The Kaiser had claimed they went to war to break the economic blockade that had been thrown around Germany by France and the United Kingdom.

Well, you recall we repudiated the 14 points, the League of Nations, the Versailles Treaty, the World Court, and everything that looked like international cooperation and turned to the principles of

gross materialism, and what one candidate for the Presidency in 1920 called normalcy. When the Republicans came into power in 1921, they passed what they called the Emergency Tariff Act. The next year they passed the Fordney-McCumber Act. Both the Emergency Tariff Act of 1921 and the Fordney-McCumber Act of 1922 measurably increased the protection on manufactures that had been carried in the Underwood Act, put through during the Wilson administration.

When we emerged from the war, we emerged as a creditor nation. Secretary WICKARD. Yes, sir.

Mr. ROBERTSON. Europe was bankrupt. Now, my point is we wanted to sell farm products to Europe and to other nations involved in that war, after 1922. How did we do it?

Secretary WICKARD. By loaning money.

Mr. ROBERTSON. Seven and a half billion dollars we loaned; practically none of it we got back. We bought every kind of wild bond that they had to offer. We had more money than we knew what to do with, and we loaned money and we bought foreign bonds and we bought all that sort of thing to give them international exchange with which to buy our products. And through the lending of that money, which gave them the purchasing power, we carried on foreign commerce up to 1919.

(At this point the committee took a short recess to answer a roll call, at the conclusion of which the hearing was resumed as follows:) Mr. COOPER. The committee will please be in order.

All right, Mr. Secretary. Mr. Robertson of Virginia, will continue the inquiry.

Mr. ROBERTSON. Mr. Secretary, when we recessed to answer the roll call, I had gotten my questions to you up to 1929, and at several points in the question you nodded approval and I will assume that your answers up to this point are "yes."

Secretary WICKARD. I think that your presentation has been accurate.

Mr. ROBERTSON. We were just discussing how we provided international exchange in the post-war period after World War I.

Now, we will go back for a moment to 1928, to the Presidential campaign of that year. As I recall, in addition to making reference to an experiment noble in purpose, the Republican candidate for the Presidency in 1928 promised the farmers of this country tariff protection on a par with the protection granted industry, and in 1929 he made such a recommendation to the Congress, and the Ways and Means Committee proceeded to write a tariff bill. Well, at least a part of them did, because the Republican members retired to a secret chamber and stayed in there 57 days, and then they came out and laid on this tablethis table was not here then, but on the table that we had then-a bill which they said is your 1930 Tariff Act, take it or leave it. That is what we call the Hawley-Smoot tariff.

That tariff provided 42 cents a bushel protection for wheat among other things, which at the moment pleased a great many farmers, but it took 25- or 35-cent wheat in 1932 to teach some of them that 42cent protection when selling on the world market did not amount to much in the farmers' pocket.

Secretary WICKARD. Yes, sir.