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all countries of the world with which we trade all the concessions which we make to any other nation has worked out to our very serious detriment. To Japan we extended all the concessions which we have to 30 other nations, although we received no concessions from her. We offered trade agreements to Japan, but that country wanted none. Why should she, when she got so many concessions without an agreement? As a consequence, that country bought our scrap iron and many other products, with which to make war on us, while cotton goods, rayon, pottery, lumber, wood pulp, fish, and many other things were dumped here by her to the detriment of our industries. Reciprocal trade agreements aided greatly in supplying Japan with our materials at the expense of our workers and industry, so that she could treacherously stab us in the back.
What sort of a world will we face when the war is over? No one can predict.
of this we can be sure. It will not be the wonderful, brave new world that our dreamers prophesy.
Human nature has changed little during the several thousands years of recorded history and it cannot change visibly during the years this war will last. Christianity has changed men more than any other force. But professing Christians are less than a third of the world's population. Only a minority of these live by the two great Commandments. Hunger, want, and suffering will prevail in Europe and other countries. We, in America, must sacrifice to alleviate the sufferings of these people. When hunger and suffering have passed, the reversion to type will take place. People will begin to think more of themselves and less of their neighbors. Lust for power, privilege, and wealth will be evident in the stricken countries. Leaders of various philosophies of government will inspire revolution. The greatest good for the greatest number will be forgotten in the scramble for power. Surely we cannot force our ideals of government on other countries, and we cannot succeed in stabilizing world commerce until the various countries have established sound governments.
The threat of this chaos to our domestic employment is very great. Depreciated currencies will be a serious threat to the employment of our people. The question of stabilization of currencies cannot be accomplished excepting with stable governments. Congress, therefore, must be free to meet emergencies that then exist and should not be hampered by reciprocal trade agreements or otherwise.
Someone has made the statement that the ideas made public by the . executive department of our Government in recent years have been famous for “the startling preponderance of brilliance over wisdom." The brilliant ideas about letting each country supply the rest of humanity with what it can produce most economically is fine in a world where "we love our neighbors as ourselves.” But that is not the kind of world in which we are going to live.
The present war, no matter how successful we are, is still but the second campaign in a long conflict. Democratic governments should weigh total resources and take into account future as well as present needs.
We cannot afford to be dependent on our future enemies, nor even our friends from overseas, for food, clothing, rubber, steel products, aluminum, oil, and many other things. Yet we cannot help but believe
that the reciprocal trade agreements program is to be used to transfer our production of the things mentioned to those countries that can produce them cheaper than we can.
I quote from a newspaper account of a statement of one of these theorists who holds a very high position in the executive department:
If synthetic rubber of equal quantity can be produced on a basis where it can, without tariff, compete with natural rubber, no obstacle should be placed in its way. I have no prejudices against synthetic rubber. With me it is a matter of where we can get the most for our money.
With such a philosophy permeating our executive department, we may well be concerned about the authority which Congress grants.
We have here the highest living standards in the world. We have built up a fabric of social laws that are not equaled anywhere else in the world. It should be our endeavor to preserve our standards as well as our country's safety. Action based on unwise thinking will drag our living down to disastrously low levels. Rather should we do all we can to raise to a level nearer our own the standards of living in other countries of the world.
Nowhere has industry considered this post-war world more than in England. England is supposed to be a free-trade country in spite of the fact that its average duties on imports are higher than ours.
The reading of many of these studies made by British industry discloses that they all express, in one way or another, the idea that a prosperous Britain can do more to help the world than an impoverished Britain.
The Association of British Chambers of Commerce says:
The association recommends reductions in tariffs as far as practicable, but recognizes that tariffs or other measures designed to afford orderly dispersal of goods cannot be dispensed with as long as the problem of low-cost-of-living nations remains.
Lever Bros., of England, in that very thoughtful study for an industry post-war program, states that British manufacturers must have protectionagainst unfair competition from countries which neglect social obligations, such as unemployment insurance and other social measures, and also from countries using dumping methods and depreciated currencies.
Brilliant ideas are fine, but they should be tempered with realism and wisdom. Above all, the British are realists. British statesmen are very guarded in making public promises that would bind their future action. Let us take a tip from the English, who are the greatest traders in the world.
Wisdom would seem to dictate that Congress in these trying times should exercise powers delegated to it by the Constitution, and that it tolerate no encroachment on those powers at this time in any way.
A power once delegated is not easy to regain. It is easier to give authority than to recover it. I cannot urge too strongly that the Reciprocal Trade Agreements Act not be extended.
Mr. ROBERTSON. Mr. Chairman.
Mr. ROBERTSON. In 1935 I was very much interested to observe, on the shelves of merchants in Japan, little bundles of sticks, 6 or 8 inches in diameter, neatly tied up with seaweed or something, and being sold by those merchants as we sell canned goods, and I was told that the Government had regulated all the cutting of timber in Japan and the regulation was so strict that a man could not get permission to cut a tree on his own land until he first planted three trees and made them grow. Consequently I was very much interested in your complaint about the reciprocal trade agreements, that Japan had been dumping wood and wood pulp on us, and I want to know if all of your points are as accurate as that.
Mr. BROWN. I have that statement from Mr. Starr, who is, I believe, going to appear before you later on, and he is very much worried about the situation in the wood-pulp industry, and he is an expert on it. You will get a chance to hear from him.
Mr. ROBERTSON. That is all.
Mr. GEARHART. Mr. Brown, shortly after Pearl Harbor we discovered that there was a rubber problem on our hands, did we not?
Mr. Brown. We certainly did.
Mr. GEARHART. We found that our stock pile of rubber was so low that an emergency had developed as a consequence of the cutting off of our access to the rubber of the East Indies. You remember that there was a great hue and cry for the development of a synthetic
manufacturing process in the United States, and a great rivalry grew . up between those who thought it should be made out of petroleum
products and those who thought it should be made out of alcohol, for which the farmers could produce the raw materials.
That controversy delayed our getting under way. I was wondering if you ever considered the obstacles that were thrown up in the pathway of an American synthetic-rubber program from the internationalists, who believe that we should always buy rubber from abroad and not produce it in this country on a permanent basis. Have you considered that?
Mr. Brown. I know there was some objection somewhere, but I didn't know what it was, sir.
Mr. GEARHART. Well, you have read from time to time the speeches that are made by Vice President "Hank” Wallace.
Mr. Brown. Yes. I quoted one of his remarks in my speech.
Mr. GEARHART. And Mr. Crowther quoted from him in other particulars:
Officials of the Rubber Reserve Company predict that this country, within 18 months, will be producing more rubber synthetically than she used to import from the Far East. All this will be done on the basis of a contract which provides that when the war comes to an end the Government will have the right to acquire the plants. This clause was put into the contract because President Roosevelt believes that the powers of government and the emergency of war should not be used to build up vested interests which, after the war, would be sitting on the doorstep of Congress clamoring for a tariff.
In the light of that idea and that frame of mind, were you surprised that on July 29, 1942, 8 months after Pearl Harbor, we should put a provision in the reciprocal trade agreement with Peru forever binding Indian rubber crude, including gelatin, on pontianac, whatever that
means, upon the duty-free list, to bind them on the free list? Wasn't that a most remarkable coincidence?
Mr. Brown. I think it is very remarkable, Mr. Gearhart. I believe that we should make ourselves self-sufficient in this country on all the essential industries and products needed to protect ourselves in case of emergency, and this is not the last war that we are in now.
Mr. GEARHART. And isn't it a still more remarkable statement in the light of the fact that on January 30, 1943, we entered into a reciprocal trade agreement with Mexico and bound duty-free guayule rubber crude? Those two agreements, both being executed after Pearl Harbor, when everybody in America knew of the rubber scarcity emergency and knew that steps should be taken to prevent a synthetic rubber industry being set-up in the United States on a permanent basis.
Mr. Brown. Yes, sir.
Mr. GEARHART. Í don't know exactly the figure, but I carry in my mind the figure of nearly $700,000,000 of American money invested in setting up synthetic rubber plants in this country of ours. Synthetic rubber plants will be able to produce all the rubber we need by the middle of 1944, synthetic rubber plants that will offer employment to thousands upon thousands of Americans. Those are the plants which these two agreements will put out of business when the war is over.
Mr. KNUTSON. It will be another automobile industry. Mr. GEARHART. Doesn't it appear that it will be the policy of the administration to make us dependent on the far corners of the world for necessities without which, in time of war, we are in great danger of defeat?
Mr. Brown. I would think so.
Mr. GEARHART. They are so infatuated with their internationalism and their principle of brotherly love which they are carrying into the good-neighbor policy to the point of absurdity that they might wreck this country in the next war in which we become involved.
The automobile industry of the United States is the marvel of the ages. That industry in the United States today is strong, controlling the automobile situation throughout the world, simply because it had a tariff to protect it in its infant days. What is wrong in giving a tariff to the synthetic rubber industry during its infant days to get it established in this country so that it can supply the American market?
Mr. Brown. I can see nothing wrong in that.
Mr. GEARHART. And it is very probable, is it not, Mr. Brown, that if we did give it the protection of a tariff during the infant days it could finally establish itself, so that it could not only establish the American market but others in the far corners of the world as well?
Mr. BROWN. We have done it in other industries. We have done that in business machines and motorcars and agricultural machinery and things like that—accomplished that result.
Mr. GEARHART. Do you think we should leave the authority to negotiate agreements in the hands of people who believe that it is right to try to bind the United States against the imposition of a tariff against the importation of raw rubber at a time when we have invested $700,000,000 in the development of an industry which will produce synthetic rubber?
Mr. Brown. It isn't right.
Mr. GEARHART. It seems to me they love the little brown man more than they do the hard-working white American, doesn't it—white or black?
Mr. BROWN. Yes, sir. Mr. GEARHART. Í have had some unfortunate experiences recently with having improper inferences drawn from the remarks I have made, so pardon my precision.
The CHAIRMAN. Mr. Gearhart, are you through?
Mr. KNUTSON. The tendency has been for the mills to leave New England and go south?
Mr. BROWN. Yes, sir.
Mr. KNUTSON. Wouldn't it be a travesty if the Congress were to do something in the way of enacting legislation that would move our mills to China and India after the war?
Mr. BROWN. Very much of one.
The CHAIRMAN. Could you cut it to 10, or let it go until in the morning?
Mr. MARSH. I would rather come in the morning, if I might, because there have been so many arguments against this that I think you are entitled to hear some for it.
The CHAIRMAN. We will adjourn until 10 o'clock tomorrow morning.
(Whereupon the committee adjourned until Tuesday, April 20, 1943, at 10 a. m.)