in connection with this act was to prevent interference by anybody in the administration of this law by the proper officials. We believe this act to be unique in this respect, since we know of no other legislation where Congress has deliberately deprived a citizen of his constitutional right of judicial review, thereby making the action of a government official final and conclusive upon one who believes he has been deprived of his rights. It will also be noted that this action was limited to section 516, which is the only section under which one might test the validity of the administrative officials' acts. Section 514, giving to the importer the right to litigate, has not been affected. Obviously, the only interest an importer would have would be to further reduce the duty which he believed the wording of the treaty imposed. In this connection it is important to compare the language and the intent of this act to the language of the so-called Flexible Tariff Act (sec. 336 of the Tariff Act of 1930) wherein Congress prescribed a definite rule or yardstick within which the administrative officials must act. The present law contains no such criterion, merely establishing limits to which the officials may go. Section 336 by the same section 2 (a) was repealed insofar as this act is concerned. We further believe that an extension of the reciprocal-trade-agreement program will perpetuate by congressional action a law brought into being under a state of facts which have completely changed and will make the same law apply and operate in a world situation which defies analysis, and in so doing sacrifice constitutional safeguards and relinquish powers attained by our founders only after long and bitter sacrificial cost. The administrative provisions of our tariff act have been carefully framed over our entire national existence so as to supply safeguards and to prescribe remedies and define the rights of our citizens in their dealings with customs. The present act not only permits the administrative officials to change tariff rates established by Congress but it also permits them to remove restrictions, modify or remove excise taxes, and by its broad language would permit the removal of restrictions placed upon imports by our Department of Agriculture in all of its branches that deal largely with the health of animal and vegetable life in the United States. For the reasons above stated, we believe the Reciprocal Tariff Act should be allowed to expire and the resolution defeated. In the event Congress takes a different view, we believe the resolution should be amended so as to restore to the citizen his right of judicial review and the rights heretofore guaranteed the citizen by amending section 2 (a) of the said act in order to eliminate therefrom the language which repeals sections 336 and 516 (b) of the Tariff Act of 1930. Respectfully submitted. WOOL HAT MANUFACTURERS ASSOCIATION OF AMERICA, (Signed) W. G. EVERTSEN, Secretary. Mr. LERCH. I also want to offer for the record the statement of the toy manufacturers of the United States. The CHAIRMAN. That will be placed in the record. (Same is as follows:) Re extension of the Trade Agreements Act. CHAIRMAN, SENATE FINANCE COMMITTEE, United States Senate, Washington, D. C. SIR: The toy industry expresses its opposition to the Doughton resolution to continue the administration's reciprocal trade-agreement program for 3 years, on the following grounds: Section 516 of the Tariff Act of 1930 provides the only remedy at law to which a domestic producer can resort in matters affecting customs. Without the protection of this section, the producer is at the mercy of the Committee for Reciprocity Information and the other administrative officials whose activities are secret and whose findings are not subject to judicial review. Yet, this committee and these administrative officials are exercising a power after proclamation by the President which directly affects the general welfare and our entire economic and social existence. By delegating its power over taxation and foreign trade, Congress divests itself of powers which were granted exclusively to it by the Constitution and removes from the exercise of the power all possibility of judicial review. It is our belief that if this reciprocal-trade-agreement program is extended, there will be perpetuated by congressional action a law which was brought into being by one set of conditions and facts which conditions and facts have completely changed and yet the same law will apply and continue to operate in a world 215171-40———19 situation entirely different from that upon which the original reciprocal-tradeagreement program was based. Under the present act administrative officials are permitted not only to change tariff rates established by Congress but also to remove restrictions and to modify or remove excise taxes. The administrative provisions of the Tariff Act have been carefully framed over a long period of years so as to provide safeguards, prescribe remedies and define the rights of our citizens in dealings with customs. For the reasons stated above, we believe that the resolution should be defeated and the Reciprocal Tariff Act allowed to expire but if Congress takes a different view, we believe that the resolution should be amended so that the right of judicial review and the rights heretofore guaranteed the citizen will be restored by amending section 2 (a) of the said act in order to eliminate therefrom the language which repeals sections 336 and 516 (b) of the Tariff Act of 1930. Respectfully submitted. TOY MANUFACTURERS OF THE U. S. A., INC., Mr. LERCH. I also want to place into the record the statement of a group of woven-wire-netting manufacturers spread over the United States. The CHAIRMAN. That will be placed in the record. (Same is as follows:) Re extension of the Trade Agreements Act. CHAIRMAN, SENATE FINANCE COMMITTEE, United States Senate, Washington, D. C. SIR: Take away any part of the legitimate profit to which a business is entitled and you curtail the employment of labor to an equal if not greater extent. Curtail employment and you decrease the consumption of farm products to an equal if not greater extent. All of the generalities and platitudes about peace and good-neighbor policies that can be thought up by all of the master minds in this or any other country cannot change those truisms. This country has yet to see the man who has the acumen to say that by taking away volume from one division of industry in order to make possible an increase in some other direction, will ultimately redound to the benefit of the division of industry which has been deprived of a part of its hard-won and expensively developed markets. With a threat of having markets autocratically taken away as soon as it develops them to the point where they are reasonably profitable, what incentive can there be for industry to invest its capital and devote its time to new enterprise? The poultry-netting-manufacturing industry is opposed to a continuance of the reciprocal-trade-treaty law because: 1. It is self-evident that the operation of that law during the past 6 years has not promoted peace. 2. The act denies to citizens the right to judicial review of grievances and autocratic determinations which may be imposed upon them by the Committee for Reciprocity Information, thus creating a political situation rather than a purely administrative responsibility. 3. The Committee for Reciprocity Information now has the power to ruin any industry in this country without giving an injured party the right to judicial determination of the justice or economic necessity for the curtailment of his honest endeavors to hold domestic markets against foreign competition. 4. Whether that power has been or will ever be abused is beside the point: the fact that such power exists is sufficient warrant for its withdrawal. 5. Failing outright repeal, this industry believes that the law should be amended in such manner that (a) No reciprocal-trade agreement could be consummated without ratification by Congress; or (b) No commodity could be placed on a list for negotiation until after a competent Government agency such as the United States Tariff Commission has actually and affirmatively determined beyond question of doubt that domestic costs of production would justly permit the sacrifice of any part of the protection now afforded by existing tariff rates. (c) The power to reduce tariff rates should be limited to one reduction of not more than 50 percent of the rate in the Tariff Act of 1930 as amended under section 336 by Presidential proclamation, without power to make further reductions in succeeding agreements. (d) It should restore the right to litigate by removing from section 2 (a) of the Reciprocal Act the provisions of section 336 and section 516 (b) of the Tariff Act of 1930. Respectfully submitted by the following committee from the poultry-nettingmanufacturing industry. THE GILBERT & BENNETT MFG. Co. Senator WALSH. These industries whose statements you have placed in the record are all against the resolution? Mr. LERCH. All of them are against the resolution. Mr. Chairman, I was not here yesterday and hence I did not have the privilege of listening to Senator O'Mahoney's argument against the constitutionality of this resolution and the bill. The CHAIRMAN. You agree with it, don't you? Mr. LERCH. Most thoroughly, inasmuch as I read the report of his arguments in the New York Sun of yesterday, so that I won't have to repeat the arguments here this morning. The CHAIRMAN. You bad those views in 1934, didn't you? Mr. LERCH. And I have not changed a bit. The CHAIRMAN. And you had them in 1937? Mr. LERCH. Again; and still I have them. I would like to repeat what I said then and what the Senator said yesterday. I have just one more thought, however, in connection with this bill, and that is that it seems a little bit strange to us that this bill hould erect a different standard for a tariff rate more or less arbitrarily fixed by Government officials than it prescribes for its own tariff rates adopted by Congress. I mean by that, that this committee, or rather on behalf of this committee, in the closing hours of the debate in the Senate when this bill was originally up, it adopted an amendment striking out the application of sections 336 and 516 (b) of the Tariff Act of 1930. That is the so-called flexible-tariff provisions, and the American producers' right to litigate. In other words, by this bill it has placed in the hands of administrative officials a more or less arbitrary authority without permitting the citizen the right of review which your own action would have if you adopted the same rate. We do not believe that that is in accordance with the tenets of our Federal Government. We believe, Mr. Chairman, that this resolution should not be adopted, but if it is adopted, we believe that at least the citizen should be given the same right that he would have or does have if the Congress adopted the same rate. Moreover, the Reciprocal Trade Agreements Act goes a good deal further, inasmuch as it permits the modification of import restrictions, and as we read the definition of those import restrictions, his action is almost unlimited. Therefore, we believe that it is of great necessity and in order to bring back tariff legislation to what our forefathers fought so hard for, we should have restored in any resolution adopted by the Congress, those provisions. I think that is the only point I want to make in addition to those made in the statements submitted. The CHAIRMAN. Thank you, Mr. Lerch. The next witness is Walter R. Peabody, of New York City. STATEMENT OF WALTER R. PEABODY, SECRETARY, AMERICAN TARIFF LEAGUE, NEW YORK CITY The CHAIRMAN. You are here representing the American Tariff League? Mr. PEABODY. Yes, sir. The CHAIRMAN. You may proceed. Mr. PEABODY. I am here to supplement my statement before the Ways and Means Committee in opposition to an extension of the Trade Agreements Act. As stated before that committee, this opposition does not imply the adoption of the policy of isolation the use of the old flexible provision, or a return to congressional tariff making. At the conclusion of my statement I shall elaborate briefly on the recommendation which we made at the time of our earlier appearance. We believe this recommendation to be constructive and very much in the national interest. There are a great many points which we believe should be brought before this committee and I sincerely regret the fact that the committee deems it necessary to restrict the time. I appreciate that it is unnecessary to repeat the testimony given before the House committee. There were, however, many points made before that committee which can and should be answered. I shall, however, respect the committee's request and will confine my statement to a consideration of three main points from among the many that I should like to discuss. These are exports under the program; the lack of flexibility, and as a third point I shall offer a recommendation for your consideration. Senator WALSH. Pardon me. I want to inquire whether your organization is composed solely of manufacturers, or both manufacturers and consumers? Mr. PEABODY. Manufacturers and some individuals. Mr. PEABODY. Mostly manufacturers. Senator WALSH. Does it represent a great variety of manufacturers? Mr. PEABODY. A very wide variety; including, I may say, some who export as well as some who import. Senator WALSH. Excuse me for the interruption. Mr. PEABODY. The first of these points relates to the extensive discussion before the Ways and Means Committee as to the achievements of the trade-agreements program in the way of rehabilitating our export market. Apparently I did not make myself clear in my carlier testimony. From the record it is obvious that some concessions must have benefited exports. From the record, however, it is equally obvious that these concessions have played a comparatively minor role in the large expansion which has taken place in our export trade. In this connection, I would like to place in the record a short table containing a summary of the figures which appear in detail in the House hearings (exhibit 1). The table was not included. with the previous evidence. So that it may be properly understood without reference to our previous testimony, I would explain briefly that we undertook an analysis of the exports of our principal agricultural and nonagricultural products, comparing 1934 with 1938. The record shows the increase or decrease to nonagreement countries, to agreement countries granting no concession on the products in question, and to the agreement countries making concessions. In this tabulation we interpreted concessions to mean improved customs treatment. It is significant that of our 27 major nonagricultural exports (and this represents over half of our nonagricultural exports) there was an increase in 1938 over 1934 to nonagreement countries of $286,000,000. This is an increase of 72 percent. The increase in exports of these products to agreement countries granting no concessions was $106,000,000, an increase of 63 percent. While the increase to all agreement countries granting concessions, that is improved customs treatment, was but $58,000,000, and the rate of increase was but 50 percent. If this can go into the record, I would be content not to elaborate on that table now. The CHAIRMAN. It will be placed in the record. (Same is as follows:) EXHIBIT 1. COMPARISON OF INCREASE IN EXPORTS OF MAJOR PRODUCTS TO NONAGREEMENT COUNTRIES, TO AGREEMENT COUNTRIES GRANTING CONCESSIONS, AND TO OTHER AGREEMENT COUNTRIES, 1934 to 1938 NOTE. These 27 major nonagricultural exports accounted for about half of our total nonagricultural exports in 1938. The 11 major agricultural exports accounted for, roughly, three-fourths of our total agricultural exports in 1938. For the detailed figures on which these totals are based, see pages 2308-2324 of hearings before the Ways and Means Committee. on House Joint Resolution 407. Includes a drop of $147,504,000 in exports of cotton to nonagreement countries. Most countries admit cotton free of duty or subject to nominal duties only. Over half of this increase, $35,996,000, was accounted for by corn shipped to Canada, the one country which granted a reduced duty on corn. According to the Department of Commerce most of this corn was probably transshipped to other countries. Senator VANDENBERG. In connection with this table, have you anywhere identified what the major products are to which the table refers? Mr. PEABODY. The House committee record contains the whole table which supplements this in detail. I included it, and I intended to put this in the House committee hearing record. They are all listed in the detail, exports to agreement and nonagreement countries, and concession countries, with the total figures. I must also refer to a statement in the majority report from the House committee. The committee states that it was particularly impressed by the testimony presented by Dr. Lubin, Commissioner of |