We can have no good neighbor relations with the rest of the world unless we have good trade relations.

The tremendous pressure upon our domestic economy, as a result of this global war, is a challenge to the resources of American statesmanship. Foreign trade interests, including millions of people dependent on post-war overseas trade, look to this committee to recommend the extension of the Reciprocal Trade Agreements Act beyond its expiry date. This would avoid any crippling of the authority of the Government in its collaboration with the other allied governments in translating into working agreements the principles of post-war reconstruction agreed to in article VII of the Mutual Aid Agreement of February 23, 1942.

The United States is a leading partner in the task of world trade reconstruction. No really effective contribution can be made by the United States toward world rehabilitation except through a policy of greater liberalization of international trade amongst all nations. It is the firm conviction of the membership generally of the National Foreign Trade Council that the continuance of the act is indispensable, if we would avoid serious complications and delays in respect to the reestablishment throughout the world of orderly commercial and economic relations.

I thank you.

The CHAIRMAN. We thank you, Mr. Thomas, for your appearance and your very interesting and practical statement.

The next witness is Mr. F. E. Mollin, executive secretary of the American National Livestock Association.

Mr. Mollin, will you please give your full name, address, and occupation to the stenographer.

Mr. MOLLIN. F. E. Mollin, executive secretary of the American National Livestock Association; headquarters, Denver.

The CHAIRMAN. How much time will you require?

Mr. MOLLIN. I should think about 30 minutes.

The CHAIRMAN. Without interruption you may proceed for 30 minutes. We are glad to get information. Go ahead.

STATEMENT OF F. E. MOLLIN, DENVER, COLO., EXECUTIVE SECRETARY, AMERICAN NATIONAL LIVESTOCK ASSOCIATION

Mr. MOLLIN. I am the executive secretary of the American National Livestock Association with headquarters at Denver, Colo. I present herewith Resolution No. 6 adopted at the Forty-sixth Annual Convention of the American National Livestock Association at Denver, Colo., January 15 and 16, 1943, asking that the trade-agreements program be discontinued but that, in the event it is continued, that any trade agreements made in the future be only with the advice and consent of the United States Senate. I am also authorized to speak and introduce a resolution adopted by the National Wool Growers Association at its meeting in Salt Lake City in January of this year, in which they ask for Senate approval of any trade agreements made.

I am asked to speak for the National Livestock Marketing Association, a national cooperative with headquarters at Chicago, in which they ask that the trade agreements program be abandoned but, if the act is extended, that the trade agreements be subject to Senate ratification.

I am asked to speak for the Kansas Livestock Association, whose secretary is at another meeting, and I had a telephone request on Saturday night from the president of the Texas and Southwestern Cattle Raisers Association to speak for them. I will leave these several resolutions with the reporter.

Mr. WEST. Mr. Chairman, at this point may I request that they be inserted in the record?

The CHAIRMAN. Without objection, they will be inserted in the record.

(The resolutions submitted are as follows:)

[The following resolution taken from the 1943 platform and program of National Wool Growers Association. Seventy-eighth annual convention held at Salt Lake City, Utah, January 25-26, 1943]

4. RECIPROCAL TRADE AGREEMENTS

In 1934, under the pressure of emergency, the Congress relinquished its treatyand tariff-making duties by granting authority to the Executive to enter into so-called reciprocal-trade agreements with foreign nations without the constitutional proviso for Senate approval. This grant of authority expires in June, and the executive department has now asked that it be extended.

We were opposed to this grant when it first was made, and its operation has only served to increase our misgivings. We believe the law is clearly unconstitutional. Its operation has served only to discourage those engaged in agriculture, who, seemingly, have been singled out to bear the brunt of most tariff reductions so far made.

We are opposed to a further extension of this grant unless, in the judgment of the Congress, some compelling reason exists which has not as yet been made public. In that event, it should be approved only after requiring that all treaties be submitted to the Senate for its approval, as is provided in our Constitution and as is the case in every foreign country with which we have made a trade agreement. If we practice democracy at home, we may better preach it abroad.

[Resolution taken from the report of the forty-sixth annual convention of the American National Livestock Association, held at Denver, Colo., January 15-16, 1943]

RESOLUTION No. 6

RECIPROCAL TRADE ACT

Whereas in the 25 reciprocal trade agreements that have been made there have been glaring departures from the program as originally outlined, and the safeguards for the protection of domestic producers have been generally ignored; and Whereas it is therefore imperative that the power to ratify all agreements made should be restored to the United States Senate: Therefore be it

Resolved, That we urge that the trade agreements made since 1934 under the act, expiring in June 1913, should be annulled; and be it further

Resolved, That we urge that if any such trade agreements are made in the future it be only with the advice and consent of the Senate.

[Excerpt from report of resolutions committee adopted by delegates in thirteenth annual meeting, National Livestock Marketing Association, held at the Hotel Sherman, Chicago, March 24, 1943]

Whereas in the 25 reciprocal trade agreements that have been made there have been glaring departures from the program as originally outlined and the safeguards for the protection of domestic producers have been generally ignored; and Whereas it is therefore imperative that the power to ratify all agreements made should be restored to the United States Senate: Therefore be it

Resolved, That we urge that the trade agreements made since 1934 under the act expiring in June 1943 not be renewed; and be it further

Resolved, That we urge that if any such trade agreements are made in the future it be only with the advice and consent of the Senate.

F. E. MOLLIN,

Washington, D. C.:

VICTORIA, TEX., April 19, 1943.

Would appreciate your representing the Texas and Southwestern Cattle Raisers Association at hearing on the reciprocal treaties. Our attitude is expressed in a resolution passed by the convention last month as follows: "This association is strongly opposed to a further departure from established American principles and laws in the making of treaties or other agreement with foreign countries; and protest against further extension of the Reciprocal Trade Agreement Act and protest against any treaty or agreement being made without the consent and concurrence of the Senate of the United States." CLAUDE MCCAN,

President, Texas and Southwestern Cattle Raisers Association.

Mr. MOLLIN. Mr. Chairman, of course I think we all agree on one thing, and that is, the first thing we are all interested in is in winning the war; and then, in planning for after the war, it seems to me that we all have a great responsibility, and I think that one of the most important things that this committee and this Congress can do is to be looking ahead to the position that we will be in after the war.

I want to call your attention to the fact that we have a tremendous expansion in agriculture. I think that agriculture generally, including the livestock industry, is making a perfectly heroic effort to supply the food to win the war, and that they are doing so without any regard to the position that they will be left in when the war is

over.

I would like to call your attention to the fact that we produced in this country in 1940 18.9 billion pounds of meat; in 1941 we set a new record with 19.5 billion pounds of meat; and in 1942 we set a new record with 21.7 billion pounds of meat. Although maybe some of you people here in Washington who had difficulty in getting it wondered where it went, it went into domestic consumption, except for that which went to our Army, and certainly no one begrudges that. Less than 1 percent of the beef produced in 1942 went to lend-lease. In fact, I think it was less than one-half of 1 percent. The estimate for this year, 1943, is that we again will expand our meat production in this country to a total of 12 billion pounds more than the record production of last year. That is the Department's preliminary figure at the present time.

In building up that tremendous meat production we have increased our cattle herds to more than 78,000,000 cattle. In 1917 we had a little over 73,000,000 cattle. We now have 5,000,000 more cattle than we had at the conclusion of the previous war, and everything indicates that at the end of this year we are liable to go well over the 80,000,000 mark in cattle numbers.

We have on hand the greatest number of hogs ever in this country, and the record indicates that again at the end of this year we are going to have substantially more hogs than we had at the beginning. In sheep I think we touched the peak a year ago, but they are up near a record production. So we have tremendous production of cattle, hogs, and sheep.

There is one thing about the livestock industry unlike some of the manufacturing industries. When this is all over and the demand tapers off, we can't just lock up the plant. It goes on for several years. Hogs can be tapered off quicker; with cattle it takes several years to make any important change, either up or down in production. It is going to take us years, under ordinary conditions, to liquidate the surplus we are building up in cattle today.

I want to confine my discussion largely to the things of special interest to our own industry, but I do want to make just a few brief general comments on the situation. In the talk that I have heard, and I have listened in more or less during the past week, most of the discussion has been on the basis that either you were an isolationist or a high-tariff man; that there wasn't any possible middle ground. Well now, I would like to call your attention to the fact that under the rates that were prescribed for our products in the Smoot-Hawley tariff bill we were not isolationists and we can show you that on many of the items in which the tariff has since been cut that the imports under the Hawley-Smoot rates were very substantial.

Personally, I don't believe in a tariff of exclusion. We should have rates that will give our industry protection when production is very heavy and the price trend is downward, and on the other hand, when we reach the other point of the cycle, I think we should have rates that will give the consumer protection and that will allow imports to come in here without damage to our industry when our own production is light. That is the kind of tariff I believe in, and I have never yet seen anyone successfully show that that wasn't the kind of tariff we had in the rates in the Hawley-Smoot tariff bill, because we did not exclude the products of our neighbors, Canada or Mexico, or the products from South America that were eligible to come into this country.

So, with us it is a question of how best to reach that kind of tariff, whether it is through these reciprocal trade agreements or whether it is some other way, and based on the experience we have had and on our study of the problem, we cannot believe that we are being adequately protected in the method of making reciprocal trade agreements.

The time that we really need a tariff, of course, is when we are going to have a low level of prices, and unfortunately as we approach the time when this vast production might dam up on us we find that our tariff rates have been substantially reduced. We had a taste of what will happen in 1936, when the Canadian trade agreement was made effective and we had very heavy imports of Canadian cattle at certain of the northern markets in the United States.

I want to discuss with you briefly the method of making these trade agreements as it applies to our industry. The method, of course, has been discussed here from time to time, but we don't believe there is any provision there that does give the assurance to domestic industries that they are going to be given adequate protection. By the time the notice is sent out, the official notice of intention to negotiate a trade agreement, it is our understanding that the Trade Agreements Division has already had several weeks of negotiation with representatives of the foreign government, and that by the time they publish that list they have in effect agreed with the foreign govern

ment that they will consider and negotiate reductions in the tariff on the items published.

We don't have that opportunity to confer. We don't know anything about it until that notice is published. You will recall that incident of the sugar tariff, when Colonel Batista went home and proudly told his people that he had negotiated a 15 cent reduction in the tariff on sugar, and I attended a hearing in the Senate Finance Committee room when Secretary Hull explained that matter to some of the Senators from the sugar States, and he admitted in that discussion that they had to have something to work on with these foreign countries, and in effect he said just what I have stated, that by the time the notice went out they had agreed that they would negotiate a reduction in the tariff. I don't say that they do come through and reduce every single item that is published. There are exceptions. But in the main, in the schedules that apply to us, once they have notified us that they intend to negotiate such an agreement we find that every one of those items has been covered by tariff reductions. It does not seem to me it gives us anywhere near the chance that the representatives of the foreign governments have.

Then we come down and make our case before the Committee for Reciprocity Information and some other committee writes the trade agreements. That is a roundabout way. We would rather come before a committee like this, even though you have divergent views as to what the tariff should be, and make our case to people who are responsible to the folks back home, and take what we get out of it, than to have to go through that procedure that I have just detailed.

I want to give you a few examples of how it affects us. In the case of hides, the Trade Agreements Act says that whenever the President finds as a fact that the existing rate is a barrier to trade he can reduce the duty up to 50 percent. Well now, we had a 10-percent ad valorem rate on hides. It was a nominal duty, about 1 cent per pound or less, under ordinary conditions. They reduced that rate in the Argentine agreement as much as they could, so that now it is 5 percent instead of 10 percent. No possible finding of fact could have been made that that tariff of 10 percent ad valorem was a barrier to trade. always get large imports of hides from South America. They are coming in today.

We

After that agreement was made, after the ceilings were put on American hides, domestic hides, of 15 cents a pound and then raised to 152 cents a pound a few months later, a year ago last fall that raise was made, they actually allowed Argentine hides to come into this country and sell for as much as 4 or 5 cents a pound above the ceiling price on domestic hides. I am glad to say they remedied that, but that is an example of the way things work.

Then, on canned beef, we had a tariff of 6 cents a pound, not less than 20 percent ad valorem, and no one can say that that tariff was a barrier to trade, because the record will show we had imports of 80 to 90 million pounds of canned beef for several years prior to the enactment of the Argentine trade agreement. It was not a barrier to trade. We were taking their canned beef in large quantities; yet the rate was reduced the full 50 percent, to 3 cents a pound.

In the case of Mexican cattle, they reduced the tariff on cattle, of course, in the Canadian agreements, first on calves weighing less than