sion of a peril point below which a foreign industry enjoys a distinet and unfair advantage over a domestic industry. In that instance, upon a recommendation made to the President of the United States, an increase up to and including 50 percent of the current tariff rate may be applied.

While this may be the solution for some industries, at best it provides meager protection for the commercial fisheries. It does, however, serve a purpose in that elimination of the procedure of H. R. 1211 would deprive the domestic producer of the right to his "day in court" to seek relief, even though it is a limited relief. It is our contention that this procedure should be retained and be made a part of the Trade Agreements Extension Act of 1949.

We have no confidence in the effectiveness of the escape clause as outlined in the general agreement on tariffs and trade negotiated at Geneva under which an American producer harassed by foreign competition is allegedly entitled to seek relief. An industry whose tariff rate was reduced in trade agreements prior to 1943 and not reduced in following agreements, and a domestic industry against whom the Government has granted a concession cannot legally petition for relief under the escape clause. This applied particularly to the domestic fishing industry. The tariff on fish products was reduced in the 1939 agreement but has been untouched in subsequent agree

ments.

No Government concession has been levied against commercial fisheries. Experience has also shown that a domestic producer must sit on the Government's doorstep for many months before he knows whether or not he has a legitimate case. Then follow more months of bargaining between representatives of the governments concerned, offers and counteroffers, withdrawals, concessions, et cetera. Any remedy which might be granted could conceivably come too late to do any good.

An outstanding example proving this contention was a denial issued by the United States Tariff Commission on January 3, 1949, of an application for relief under the escape clause filed September 7, 1948, by the United States Distillers Tariff Committee. Regardless of the merits of the case, 4 months elapsed before this group knew its fate. Restricting the effectiveness of the Tariff Commission and the inability of the escape clause to provide a speedy, equitable solution to a tariff problem, leaves the fishing industry with no legislative protection or recourse for relief.

We present these facts as the basis of our contention that the fishing industry of the United States must have access to some governmental formula which will equalize the sphere of competition between the domestic producer and his foreign competitor. We do not apologize for our ability and technical skill in operating our industry. We ask only for the establishment of a fair competitive policy, one that is not weighted against any American producer. In the absence of any other legislative remedy, we recommend the retention of the peril-point provision contained in the Trade Agreements Extension Act of 1949, and further, that H. R. 1211 be so amended.

Senator MILLIKIN. If you were to have relief by a tariff, how much relief would you have to have?

Mr. FULHAM. You would need approximately 8 cents per pound.

86697-49-pt. 1-51

Senator MILLIKIN. If you have relief by quota, what would be the quota?

Mr. FULHAM. Approximately 43,000,000 pounds. It has been proven that our domestic consumption can absorb 43,000,000 pounds without serious harm to our industry. It does, naturally cut our market down.

Our position is that we do not want to deny a portion of our market to our foreign competitors, because we realize that under the Reciprocal Trade Act there must be something given for something taken. However, when an equal number of American citizens are harmed to benefit an equal number of foreign citizens, we can't quite understand where the benefit is.

Senator BREWSTER. That would give to Canada and Nova Scotia and Newfoundland much more exports to this country of fish than they have made historically, and much more than their existing industry would be needing to provide.

Mr. FULHAM. Well, if their imports were restricted to 43,000,000 pounds, it would not harm the people who are currently producing. Senator BREWSTER. They would be all right, and we would be all right. In other words, it would work out amicably.

Mr. FULHAM. A year from today, if something is not done along that line, however, you can see what the situation will be.

Well, the imports for January of this year

Senator BREWSTER. They showed 20 percent above a year ago.
Mr. FULHAM. That is correct, sir.

Senator BREWSTER. That would be 63,000,000 pounds for this year. Mr. FULHAM. Now, if that is carried on throughout the entire you can see that a year from today they will have produced additional facilities which, if they then imposed the quota, would bring some hardship on them, whereas today it would not.

The CHAIRMAN. Are there any further questions of the witness? Thank you very much for your statement. We appreciate your

appearance.

Mr. Jackson, is there anything else?

Mr. JACKSON. That is all, thank you, Mr. Chairman.

The CHAIRMAN. Thank you, gentlemen.

The committee will recess until 2: 30; and after the recess, the Tariff Commissioners will be heard first.

(Whereupon, at 1:30 p. m., the committee recessed, to reconvene at 2:30 p. m. of the same day.)

AFTERNOON SESSION

(Whereupon, the committee reconvened at 2:30 p. m., following the expiration of the noon recess.)

The CHAIRMAN. The committee will have this afternoon two members of the Tariff Commission, I believe, Mr. Gregg and Dr. Ryder. Mr. Gregg, will you come around, please? We will start with you. gentlemen first, so that you may get back to your duties.

We have before us, Mr. Gregg, H. R. 1211, on the extension of the Reciprocal Trade Agreements Act. Have you a prepared statement you wish to make?

STATEMENT OF JOHN PRICE GREGG, COMMISSIONER, UNITED STATES TARIFF COMMISSION, WASHINGTON, D. C.

Mr. GREGG. Yes; I would like to read a very brief statement, Senator, and then answer any questions you may have to ask.

The CHAIRMAN. Yes, sir. You may proceed and read your state

ment.

Mr. GREGG. My name is John P. Gregg. I have been a member of the Tariff Commission since the autumn of 1946, and since then have served as vice chairman of the Committee for Reciprocity Information, and later as an alternate member of the Interdepartmental Trade Agreements Committee.

From September 1947 to November 1947 I was a member of the United States delegation at Geneva.

From 1937 to 1941, I was secretary of the Commitee for Reciprocity Information.

Difference of views exists as to whether the Tariff Commission should advise the President, either directly or through the Interdepartmental Committee, as to whether or not a particular concession in a trade agreement will cause or threaten serious injury to domestic producers. It is my view that it should.

So long as Congress reserved to itself the authority to fix tariffs, the principal obligation of the Tariff Commission was to supply the Congress and the Executive with unbiased, objective, factual information on the basis of which the Congress and the President could act in tariff matters.

In 1922, the Congress delegated to the President the authority to lower or raise by a maximum of 50 percent the rate of duty upon a particular product, based upon the difference in the costs of production of that product at home and abroad, on the basis of findings following investigation and hearings by the Tariff Commission.

In 1930 this authority was continued. In 1934 the Trade Agreements Act was passed, delegating additional authority to the President to modify tariffs. Section 4 of that act provides, however, that before any trade agreement is concluded, the President shall seek information and advice with respect thereto from the United States Tariff Commission and certain other agencies of the Government.

It has always seemed to me under the terms of the law that there is a distinct obligation on the Tariff Commission to supply advice with respect to all concessions under consideration, whether contained in the tariff schedules or in the general provisions of the agreements, and that the intent and spirit of the act is not fulfilled by getting merely the views and opinion of the members of the Commission, or its staff, rather than the judgment of the Commission as a whole.

It should be made clear that for the first time, that is, under the Trade Agreements Extension Act of 1948, the Commission as a body considers and transmits to the President its judgment as to whether a reduction of a present rate of duty will or will not cause or threaten serious injury to a domestic industry. Under the previous procedures. this has not been the case.

At no time prior to 1948, in more than 13 years that the Trade Agreements Act had been in effect has the Tariff Commission as a body ever been consulted with respect to whether or not a particular concession will cause or threaten serious injury to the domestic industry.

On the other hand, individual commissioners have been asked this question, and the economic and technical staff of the Commission, serving on subcommittees and country committees have been asked that question-but not the Commission.

Senator CONNALLY. All of the Commissioners, individually, you say, have been consulted?

Mr. GREGG. Some of them have.

Senator CONNALLY. Were all of them consulted?

Mr. GREG. No, sir.

So far as I know, there is no disagreement in any quater that in making concessions in a trade agreement, the possibility of serious injury to domestic producers should be considered.

Leaders of the administration, including two Presidents, have hitherto repeatedly declared the intention to avoid serious injury to domestic producers of agricultural and industrial products.

Certainly the President before concluding a trade agreement should have the most competent and the least biased opinions available as to the probable impact of such concessions on the domestic industry.

It has seemed to me that no agency of the Government is better fitted than the Tariff Commission to assemble the facts and render a judgment on this matter with appropriate recommendations to the President.

The Commission was created for the express purpose of aiding Congress and the President to reach conclusions regarding tariff matters. Most of its members are professional economists who have had long experience in the Commission as members either of the Commission itself or of its staff.

For an expert body, such as the Tariff Commission, assisted by its expert staff, to form judgments as to the future effects of a given reduction in duty is by no means sheer guesswork.

The Commission has accumulated over the years a vast mass of information regarding the several thousand commodities listed in the Tariff's schedules. It has succeeded fairly well in keeping this information up to date.

For a great majority of commodities consideration of past experience as to the ratio of imports to production and to exports and as to prices, and of the known facts regarding techniques of production, wages, productivity of labor, and other conditions in the industry in this country and abroad furnishes a broad basis for forecasts, at least forecasts of somewhat general and not unduly specific character. Although in many foreign countries the war has left abnormal conditions, and although rapid changes are taking place or may shortly take place in those conditions, the Commission has in most instances sufficient information to enable it to forecast conditions abroad, at least for the near future, much more accurately than any other Government agency.

Of course, there are some commodities concerning which greater uncertainty exists both as to the future course of imports and as to whether the effect of any probable increase in imports can be characterized as "serious injury to the domestic producers."

Even in such instances, the opinions of the Commission should be of much value in reaching conclusions concerning the effects of reductions in duties.

It has been suggested that the Tariff Commission is intended primarily to be a nonpartisan, fact-finding body, and should not, therefore, as a body, participate through a member subject to its direction in the decisions of the committee which may be considered to involve policy.

As a matter of fact, in two of the Commission's major functionsthat under the escape clause, and that under section 22 of the Agricultural Adjustment Act, as amended-the Commission is now required by law or Executive order to recommend what may be considered policy decisions to the President.

Moreover, it seems just as appropriate that the Commission as a body should express an opinion regarding a trade-agreement concession as that a member of the Commission or a member of its staff in a subcommittee should do so in his individual capacity.

It seems to me, however, that under the proposed bill, the Tariff Commission in recommending to the President through the Trade Agreements Committee, positive action on a concession to be granted or withheld, is participating in policy making to a greater degree than under the present act.

The Commission, under the present act now makes no recommendation. It rather makes a finding that a rate lower than X percent, for example, will cause or threaten serious injury.

The President is wholly free to make the policy decision, either because he may disagree with the Commission or because other considerations outweigh the probability of serious injury.

That completes my statement, Senator.

The CHAIRMAN. You say you have served on the committee? Is that right?

Mr. GREGG. On the interdepartmental committee? As an alternate, yes, sir.

The CHAIRMAN. You have actually served on it, though, in the past?

Mr. GREGG. Yes, sir.

The CHAIRMAN. And what other members of the Commission have served on it?

Mr. GREGG. Mr. Ryder is the official member. The chairman is the official member. I have served as an alternate. I think the vice chairman, Mr. Edminster, has served as an alternate, and Mr. Brossard at Geneva, I think, also served as an alternate. Further than that I am not informed.

The CHAIRMAN. I see. So that you have actually served on that committee.

Mr. GREGG. Yes, sir.

The CHAIRMAN. That is the point that I was getting at.

Mr. GREGG. Yes, sir.

The CHAIRMAN. Reference is made to the Reciprocal Trade Agreements Act.

The organic act did enjoin the President to accept the responsibility of getting both information and advice from the Tariff Commission; did it not?

Mr. GREGG. Yes, sir.

The CHAIRMAN. Of course, as you said, a difference in viewpoint may exist in the Commission.

Mr. GREGG. Yes.