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New York than there are in all of Europe combined, and probably Minneapolis has more than all of Asia combined..

Dr. JUD. I think that is true; yes. And I want to keep lots of automobiles in Minneapolis. That is the reason I advocate this program.

Mr. KNUTSON. We haven't attained those high levels, those extraordinarily high levels, by fighting the other fellow for our home markets.

Dr. JUDD. No; that is right, and a protective tariff for infant industries I think is absolutely sound.

Mr. KNUTSON. You would be in favor of one for the synthetic rubber industry.

Dr. JUDD. Yes, certainly; unless we work out some sort of international order that after a period of years, or maybe decades, proves to be stable in the sense that the police force of Washington is on the whole stable, though occasional crimes will always break out.

Mr. KNUTSON. You know what the various cartels have done to us. You know what the rubber cartel did to us. It pushed the price of rubber up to $1.28 a pound. You probably recall, following the war, what the Cubans did to us. They very kindly gave us 3 pounds of sugar for a dollar. That was the retail price. You recall that very well.

Dr. JUD. Yes, sir.

Mr. KNUTSON. Isn't it a fact, Doctor, that as we develop our own economic independence we become freer and freer of those squeeze plays from abroad?

Dr. Judd. I wish we could hope for salvation that way, Mr. Knutson, but I don't really think that that is the answer, because it simply is not going to be possible for us to be independent.

Mr. KNUTSON. Ĉet me put it another way. If our beet-sugar industry had not practically been put out of business by the operation of the sugar clause of the Underwood Act, we would have had enough beet sugar production in this country so that Cubans couldn't have put their squeeze play on us back in the early twenties.

Dr. Judd. Yes; that is right; but there is this further side of it.
Mr. KNUTSON. How about the dye industry?
Dr. Judd. Wait just a minute.

All the years the American people paid higher prices for sugar as a result of tariffs to keep the beet-sugar industry solvent, they actually subsidized it. If high tariff protects tertain industries, as it does, it also is at the expense of the American consumer. He pays the bill for the higher prices or if he pays lower prices the industry loses, so there are losses either way.

Mr. Knutson. But in the long pull, Doctor, don't you think the policy we advocate over here has done more to develop America than the policy you are advocating?

Dr. Judd. Yes; prior to 1918, but our situation has changed. Where before we could build up a greater productive capacity and we could send our goods abroad to pay our debts there, now they owe us money, and if we won't take their goods there is no way they can pay.

Mr. Knutson. In 1934 Secretary Hull appeared before the committee in advocating the original passage of this legislation, as I recall, and he advocated it because it would help us dispose of our surplus and

find new markets. Then, when the exports of agricultural products went down after we passed the law, rather than increasing, they put it on the altruistic ground that it would promote peace. That was in 1937. When did this war break out, Dr. Judd ?

Dr. Judd. The European end of it broke out in 1939. The Chinese end broke out in 1937, really in 1931.

Mr. KNUTSON. They had 5 years to build up a feeling of brotherly love and international security. Of course it may be that I am a little hard-headed. I was born in Europe; I am not as easily kidded as some of the Americans are. You know, over in Europe they refer to us as "saps.” It just makes me boil over to think of their doing it after all that we have done for them. We have never done anything to them, but we have done a lot for them.

Dr. Judd. Well, maybe we need to do more with them.

Mr. KNUTSON. We stabilized their currencies after the war. You recall the Dawes Commission went over and stabilized the German currency at considerable expense to us, and I suppose when this war is over Britain will very kindly open the door to that storehouse down at Fort Knox and relieve us of our silver so we can put those guards down there to some useful work. That seems to be the program.

Dr. Judd. I think the essential difliculty there, Mr. Knutson, was this: We did things for people. That is my chief objection to the W. P. A., because it does things for them. We did it for Europe; we didn't do much with Europe. I think that would have been enormously beneficial to Europe and to us.

You said we had 5 years to build brotherly love. It is amazing to me how much we succeeded in building. Twenty-seven or twentyeight nations are with us as United Nations, and a lot of it is due io the fact that we have been playing with them better during the last 6 or 8 years.

Mr. KNUTSON. I have never known anybody to refuse to get into a feather bed as against sleeping on the floor. They have all got in bed with us and are living off of us through lend-lease.

Dr. JUD. When we do things for them we are saps, but I don't consider this as doing things for them. I think this is doing things with them that are enormously important. I think this is one of the best ways to help America.

Mr. KNUTSON. Instead of calling this reciprocal trade, we ought to change the name to something more descriptive, I think, I believe in reciprocity, but I don't believe in importing things of which we have an exportable surplus. I don't believe in importing cattle, and I know you don't. I don't believe in importing butter, and I know you don't. I don't believe in importing flour, and I know you don't be cause you come from the biggest flour-manufacturing center in the country.

Dr. Judd. And the net result of the program has helped the exportation of flour. That is the testimony of the people engaged in that business,

Mr. KNUTSON. That is about the only agricultural product it has helped, according to the tables that we have here that are issued by the various governmental agencies.

Dr. Judd. The tables show our increase in export of agricultural products has been higher than our increase in exports of industrial products.

Mr. KNUTSON. I beg your pardon?

Dr. Judd. The tables show that the increase in export of agricultural products is greater than our increase in exports of industrial products.

Mr. KNUTSON. During what period are you speaking of now?
Dr. Judd. Comparing 1938–39 with 1934–35.

Mr. KNUTSON. Have you separated the exportation of war materials in 1938 and 1939 from normal exportations?

Dr. Judd. No; not carefully. I took the figures of the Department of Commerce.

Mr. KNUTSON. Of course, that is just like comparing a volume of hay with a volume of a highly condensed article.

Dr. Jump. But the war didn't begin until the fall of 1939. This ends the 1st of July 1939.

Mr. KNUTSON. They were getting ready. You take the exports to Japan, which you panned so hard over on the floor this afternoon, and none applauded harder than I. Have you separated your exports of scrap to Japan from these figures that you are giving us?

Dr. Judd. No. I was speaking of advantages

Mr. Knutson. You admit that the export of war materials was not sound economically?

Dr. Judd. I tried my level best for 2 long years to get us to stop it so we wouldn't have to go to war, but that trade didn't come under a reciprocal trade agreement. We took payment in silk on the dutyfree list. Japan is not in these figures. Japan is not one of the reciprocal trade countries. I am speaking of exports to trade-agreement countries, not to the nonagreement countries. Up to 1939 advantages have been won for 73.9 percent of the agricultural imports of agreement countries from the United States as against 48.5 percent of their nonagricultural imports. That is, to the trade-agreement countries our exports increased. We won increases for 73.9 percent of their agricultural imports and only 48.5 percent of their industrial imports. I can't believe that it has hurt agriculture unduly, in order to benefit industry.

Mr. KNUTSON. I find I have to go to my office. I would like to carry this on a little further with you, because it is a very interesting subject and you are very persuasive, always. It is always delightful to listen to you. I am sorry to say, Brother Judd, that you haven't convinced me. Maybe I am wrong. But I think just as much of you as ever.

Dr. Judd. And I of you. I would like to summarize again the thing I have said. The results thus far have not been disastrous, and the results of changing drastically I fear would be disastrous.

Mr. KNUTSON. Would you have any objection to extending this, say, for 2 years, and writing some safeguards into it? For instance, now, if an American manufacturer, an American producer, finds he is being damaged by these reciprocal trade agreements, there is no way for him to get relief except through the people that negotiate them.

Dr. Judd. That is right.

Mr. Knutson. In other words, we ask the creator to pass upon the handiwork of his own hands.

Dr. Judd. Yes; that is true.

Mr. KNUTSON. Don't you think, based on your own observation and experience, that we should write a provision into this law that would give the American producer a chance to go into some court for relief, if he can't get it otherwise?

Dr. Judd. No; I don't think he ought to be allowed to go into court for relief, because that would make negotiation impossible. They, as I understand the system, serve notice when they are beginning negotiations with a given country, and give notice as to the products that they are going to consider in the negotiations and in the bargaining, and the people who are engaged in the particular trades involved have opportunity to come and present their case. They may not necessarily be successful, but they have opportunity to come and present their case in the negotiations. Thus far no industry, to my knowledge, has been ignored or crippled seriously.

Let me put it bluntly. I think it would cost American lives for us to change this treaty now. It will weaken us enormously; it will make some of our allies only half-hearted. I think that the dollars we save for some of the industries up in Minnesota that I represent will be a mess of pottage compared to the cost to us in billions of dollars for a much more difficult war. I think that when I take this position I am really serving the long-term best interests of my own people in Minnesota, best representing my district's industries. I think this is the most useful thing I can do for them through helping shorten the war with a minimum loss of life and a minimum cost in money.

Mr. Knutson. I think you will agree that all the allies realize they are fighting for their lives.

Dr. Judd. They are not doing it to help us any more than we are doing it to help them, but there is no reason why we should refuse to pull our own chestnuts out of the fire just because to pull ours out would help to pull some out for others, too.

Mr. KNUTSON. If I were being held up by a highwayman on a dark highway, or say two of us were being held up and were in danger of being killed, when we were on our way to a good turkey dinner somewhere, do you suppose I would fight any the less thinking that if my companion was killed he couldn't take me to his home and feed me turkey?

Dr. Judd. No; but I think if you would fight together, you would have a situation where, as the Scripture says, "One can put a thousand to flight, and two can put ten thousand."

Mr. KNUTSON. I am not disputing that. That is axiomatic. But I still believe that our allies are fighting with might and main to preserve themselves, rather than with an eye on the American market.

Dr. JUDD. That is right.

Mr. KNUTSON. Although I know they know that that will come in the normal course of events if certain political events recur.

I am sorry I can't stay any longer. Dr. Judd. The chief burden of what I tried to say on the floor this afternoon was essentially that. Those people know it is life or death. We still think that somehow, by some magic, our great size, our great past, and so forth, we will escape without paying such a price. I think it is life and death for America, too. If we lose China and South America, the truth is we can't win the war in the Pacific. The most we can do is get a stalemate, which would mean at least three or four

million men permanently under arms, and our sons and brothers will never get back into civilian clothes. . It would mean a thirty or forty or fifty billion dollar arms budget every year, and our country could not stand that and maintain the standard of living we have.

As for the cost of this program, it seems to me that there are very few things where we can make so relatively small an investment and get so relatively great a return.

Mr. KNUTSON. And that is the reason all of us are buying all the bonds we can.

The CHAIRMAN. Mr. Reed?

Mr. REED. I have here the figures from the Department of Commerce, and they show our agricultural products, exports to non-trade-agreement countries

Dr. Judd. What year was that?

Mr. REED. The imports, '40 over 34, increased 71 percent, and the exports declined 10 percent here in '40.

Dr. JUDD. Over '34 ?
Mr. REED. Yes, sir.

Dr. JUD. I have the figures for the trade-agreement countries, issued in the Commerce Reports on February 17, 1940, dealing with 1939, and it says the exports total from the trade-agreement countries

Mr. REED. I am talking about agricultural products.
Dr. Judd. I haven't got that here, except what I quoted previously.
Mr. REED. I just wanted to get that straight.

Doctor, you always make a great contribution, both to our information and our entertainment, and you have traveled widely, and Iand many of us--regret I couldn't have had the opportunities you have had, and I think you are going to be a great factor in the next few years in Congress.

You are very familiar with Japan and China, and I assume you have been in India.

Dr. Judd. Not in India.

Mr. REED. I really would like to have you enlarge, if you would, a little bit, draw some word pictures if you will, with regard to the wages in those countries that are manufacturing or producing competitive products, with the wages and living conditions here. I have read a lot and I have seen some figures, but you have been right there. You know just about what our competition will amount to if we remove the restrictions.

Dr. Judd. The standards of living are just incredible to Americans who haven't been there.

Mr. REED. That is what I thought. Just give us the picture of their homes, their beds, their food, and things like that, compared to what we do and the hours they work during the day.

Dr. Judd. Up in north China, where I lived, when you talk about their homes and their beds, they make the smoke from the kitchen stove, which sits in one corner, go out in flues underneath the tile platform, and it warms the platform and the whole family gets on there at night to sleep. They usually haven't enough bedding, so they take off all their clothes, and father and mother and all the children sleep naked and pile their clothes over them. They have discovered through centuries that they can get more heat that way. Incidentally, they get

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