Secretary HULL. That is precisely the situation. We are trying to deal with conditions practically. As I have said consistently since 1934, this is an emergency agency to deal with an extreme emergency situation. And I believe that Congress, as I say in my manuscript, should at all times retain definite and basic control over tariff policy. My only suggestion is that we are trying to get through this emergency before taking up the question of the permanent, normal commercial policy on the part of Congress. Then with conditions more clarified and composed, whatever permanent policy Congress may desire to adopt is another question.

Senator BARKLEY. One other question and then I am through. During the administration of Mr. Hoover, Mr. Chairman, Mr. Robert S. Lamont, I believe, was Secretary of Commerce, and in testimony which he gave before this committee or before some committee, perhaps the committee investigating the economic conditions in 1932 and 1933, he stated that the loss of our exports between 1929 and 1932 involved the loss of employment of over 3,000,000 American workingmen. Are you sufficiently familiar with the effect of the loss of our export trade upon domestic employment to confirm that statement of Mr. Lamont?

Secretary HULL. I think it was generally understood that those who were both directly and indirectly but definitely involved in the export trade situation numbered around 3,000,000-about 1,500,000 in immediate contact and, accordingly, immediately affected, and even more who were affected indirectly. For example, in the case of the automobile industry, many more than those actually producing automobiles would be affected.

Senator BARKLEY. Of course, much is made of the fact or the statement that the best market for American products is the American market, which, of course, is true in a sense. If we could sell everything we can make in this country without bothering about any foreign commerce, it would be a very desirable thing, I suppose, from certain standpoints, and the statement is frequently made that 90 percent of all that we produce is sold at home, and that that is much more. important than the 10 percent that we sell elsewhere. But is it not true that the 10 percent that we sell elsewhere or do not sell elsewhere very materially affects prices and the stability of the 90 percent that is sold in the United States?

Secretary HULL. That is entirely true. It was that sort of a slogan under which we moved with flags flying and bands playing into a state of bankruptcy in 1930 and 1931 and 1932.

Senator CLARK. Mr. Secretary, that 10 percent, while it is small relatively in percentages, is a very important 10 percent, is it not, because it includes over half of our cotton and half of our lard and two-fifths of our leaf tobacco and certain other very essential surpluses, the movement of which products necessarily reacts on labor and in manufacturing industries and agricultural conditions and everything else in the country?

Secretary HULL. Exactly. And if I may repeat a fact that I have stated before, we were selling Canada over $900,000,000 in the most profitable way. We were buying $500,000,000 from Canada. Somebody said, "Why not prohibit that $500,000,000 from coming in and just go on with our sales of the $900,000,000?" That would be fine, and that would give more employment to labor, they argued. But

that was not the way it worked out. We proceeded to do so, and the way it worked out was that the nations proceeded to retaliate on us even before the Smoot-Hawley Act was finally passed. Canada had had a general increase of her tariff a time or two which offset our increased system of tariffs before its enactment, and after three tariff raises over there, she soon convened the Ottawa Conference, and the upshot was that we showed up later with less than $300,000,000 of exports to Canada-a loss of over $600,000,000 and about $200,000,000 of imports. That is the way it worked out. It is a game that can be played, of course, both ways, and the greatest commercial injury this Nation has suffered from any kind of policy has been that policy.

Senator BARKLEY. In other words, we lost six times as much by the loss of our exports as we gained by the retention of our imports.

Secretary HULL. Yes; about twice. Understand, I am not saying that that was the sole factor, but that was the chief, controlling factor. The CHAIRMAN. Senator Lodge is anxious to leave, so I will ask you to go ahead.

Senator LODGE. I am like Senator Vandenberg; I am not trying to start a fight or an argument, but I am trying to understand. I am not addressing myself to the economic aspect, on which I think there is a lot to be said on both sides, but to the proposition that free trade will promote peace, and I would like to ask you, if that is true, how it is that England, which is the greatest free-trade nation on earth, is always the first to get involved in all of these big wars?

Secretary HULL. On this point, I would like to, if I can turn to it, I would like to read just a brief statement. It will just take me a moment if you will bear with me.

Senator LODGE. It is a big question.
Secretary HULL (reading):

The nations of Europe, democracies and dictatorships alike have been systematically building toward economic self-sufficiency. Political boundaries have been made into higher and higher barriers against foreign trade. Groups of nations have created controlled trade areas which are walled in not only by tariffs but by quotas, trade agreements, and strict government administration of foreign trade. Those new trade barriers are robbing mankind of the full benefits of the modern productive system, are decisively lowering the living standards of many nations, and are a menacing cause of war, as nations, struggling for self-sufficiency, seek their sources of raw material supplies and foodstuffs in the conquest of territory rather than through the development of trade relations with the rest of the world. Now, that was taken from the report of Dr. Glenn Frank's Committee of 200, and I could not have said that more succinctly and answered that question better than they did.

Senator LODGE. I do not speak for Dr. Glenn Frank.
Secretary HULL. Well, there were 200 others, too.

Senator LODGE. And I do not speak for them either, and I do not speak for the Republican organization, and I think that is a very eloquent statement of the economic advantages of a free trade and of the benefits to be derived from making the good things of life available to more people, but it still does not alter the fact that the greatest free-trade nation in the world, which is England, is perpetually involved and concerned in every war that takes place, because of her foreign trade.

Secretary HULL. I think you will agree that, because of our leadership in the policy of extremism in trade relations and in obstructing

commerce, we were met by retaliation in the British Empire; they swept our wheat off the world market with a 6-cent discrimination, they swept our lard out of the world market with a 10-percent discrimination, they swept our fruits largely off the world market, they swept our timber out of its great markets in Australia and Great Britain and other parts of the British Empire. You will find, I think, that this was part of that general scramble on the part of nations, when they saw our policy, to offset it or to follow it blindly, or to retaliate against it.

Senator LODGE. I think those are all very strong economic arguments, and I have tried to make it clear that I was not approaching this thing from the economic standpoint, but approaching it not from the standpoint of whether you were going to be rich or not, but from the standpoint of whether you are going to be in the war or not, or whether you are going to be alive or not. I am quite prepared to say that this policy increases values, and to that extent increases prosperity, but it seems to me it causes tremendous risks to a country like ours that wants to stay out of the darkness that we have been talking about this morning.

Secretary HULL. At any rate, the heads of great nations say in effect that we must export or starve to death; we must export or we cannot win the war. I feel that those utterances are of great significance as they relate to the commercial situation. People who are hungry are not going to lay down their arms and be peaceful and happy. Unless you find ways to get people back to work in civil employment, the living standards which have already slumped tremendously during recent years will slump further, hungry people will be organized and led by an increased number of agitators, and we will go back over precisely the road which the nations traveled from 1919

on.

Senator LODGE. You do think it would be a mistake, don't you, Mr. Secretary, for us to develop a policy which was based on any kind of an assumption that we were a small island that could not live without our shipping?

Secretary HULL. Well, naturally I hear some people sometimes say, "Well, we just need to defend our coast line and let the world go hang," but that means to turn over the seven seas of the earth to piracy or any other kind of rule that the most lawless rulers may see fit to inflict. That would mean, before we knew it, that all the small nations would be under their domination and they would be told just how to deal with us in this country.

Senator LODGE. I would like to ask one more question. In the enumeration of industries and economic activities that have been benefited by the trade agreements, on pages 5 and 6 of your prepared statement, I notice that fisheries and shoes were omitted. Is that because they have not benefited by trade agreements?

Secretary HULL. Well, that is a long story to take up in detail here. It brings in the frozen fish people and the effects of the imports and of the increased production in the industry that has been complaining. I have all the details here.

Senator LODGE. Generally speaking, do you think the fisheries have been helped by the trade agreements program?

Secretary HULL. I think unquestionably, if you visualize what this program is. This program began when our national income was 40

billion dollars and by helping to increase exports and by helping to stabilize the economic situation it has contributed to the increase up to the present figure of 70 billion dollars. That enables your fish people who, by the way, have increased their production from 13 or 14 million dollars up to 20 million, perhaps that enables them to produce immeasurably more and to get good prices for it. This is the broader aspect.

Senator LODGE. In other words, is it true that even though the imports of foreign fish have increased, the sales of American fish have increased more?

Secretary HULL. As I say, I can take the details here and run them down. There may be temporary readjustments necessary in some cases, and there is the short-sighted course that we pursued for 10 years until we went over the Niagara economically. The short-sighted view that every person should come to Washington and take a steam shovel and just scoop on any amount of tariff he wanted, practically. That is fine, but it does not work out just that

way.

Senator LODGE. I do not think I made myself clear. I am not contending anything; I am simply trying to find out whether you think fisheries have been helped, and if so how?

Secretary HULL. That is what I am undertaking to say.
Senator LODGE. Excuse me.

Secretary HULL. In the first place, under the combined policies of which this is a part, our purchasing power has been built up in this country and the fisherman gets his increased share of an increased purchasing power instead of having it decline and decline. This program combines both short and long run advantages, and, taking them together, there is no question but that as the country comes back, as it is coming back in purchasing power to such an enormous extent, his markets increase, his prices increase, and he has a chance as he is doing, vastly to increase his earnings. Now, if anything goes wrong, Senator, if we find from this combined viewpoint that there is any serious injury or any material injury, nobody will be quicker than myself to take steps to deal with it. That is a part of our program. Nobody is more concerned in the promotion of the wellbeing of every citizen in the country, without any thought ofSenator LODGE (interposing). I know that.

Secretary HULL. That is why we look out for any abnormal imports. I think you will find that with our 6 years' work there has been a minimum of sustained complaints by anybody. We are watching this and other cases from day to day.

Senator LODGE. Would it be fair to say, to paraphrase what you said there and summarize it, that you contend that if the fisherman has not been benefited so far, he soon will be, is that right?

Secretary HULL. My contention is that he is in a much better position for his future then he would be if we went back to the SmootHawley tariff policy that sent him out of business almost entirely. Senator LODGE. But you do not contend that as of today, just stopping it right now, that as of today he is better off?

Secretary HULL. Well, if I were looking at it strictly from the interests of the fisherman, as you are, I know

Senator LODGE (interposing). I try to consider the whole country.

Secretary HULL. I would want to put it, frankly, on a little broader basis than that, because that is what is the matter with the country now. Every fellow has been putting his own ideas and his own interests on the most narrow, short-sighted basis.

Senator LODGE. I think my view of this matter is just as broadit may not be as intelligent as yours, Mr. Secretary, but I think my Americanism is as good as yours, and I do not speak especially for the fishermen.

Secretary HULL. Even assuming it may be better

Senator LODGE (interposing). I want to take a national view of it as much as you do.

Secretary HULL. I was not trying to raise any personal question with you.

Senator LODGE. I thought you did.

Secretary HULL. Not at all. If I may add this, Mr. Chairman: A farm leader came in from out in the Corn Belt and said that 12 million bushels of corn were coming in and he said:

We want it stopped. It is coming in from the Argentine. That corn comes right up the Mississippi and flaunts itself in our face and they are about to sell it and it causes a fluctuation downward, a fraction of a cent or more sometimes in corn in the Chicago market.

He said he wanted it stopped right now. I said, "I will agree with you that 12 million bushels came in during a 7- or 8-year period." I said, "We can stop it, and there is nothing easier than that, and that is what I could say to a fisherman." "But," I said, "you must see the long view instead of the short view. The long view is that if you had stopped this 12 million bushels of corn from coming in, you would have stopped from being exported 369 million bushels of American corn and 1,900 million bushels of corn in the form of meat that is exported." "Now," I said, "you cannot export without importing, although, of course, I don't stand for anything below what we call a thorough safeguarding of our producers under this trade-agreement policy."

Senator LODGE. Well, admitting, Mr. Secretary, for the sake of argument, that the business prospects are better, the fact is that unless you are a very rich man you cannot live from prospects. You have got to live today and feed your children today.

Secretary HULL. In other words, Senator, somebody came in the office the other day and said, "Let us drop this trade-agreement program until conditions get normal." I said, "We will all be bankrupt again." I said, "The purpose of this program is to get us back to normal."

Senator LODGE. Thank you very much.

The CHAIRMAN. Let me ask you in that connection, Mr. Secretary: There has been some discussion about this fish industry of New England. Is a large part of it due to some interpretation of the law made within the Treasury Department?

Senator LODGE. That is the General Seafoods Corporation whereby these fish are imported into the United States as though they were the property of an American corporation, although one of the agreements that exists with the people in Newfoundland is that no American citizens can be employed. That has been called to your attention, I believe, hasn't it, Mr. Secretary?