United States exports (including reexports) first 6 months of 1934 and 1939, by groups of countries 1 Excluding those involved in revolutions and declared or undeclared wars. Many applications were dismissed without prejudice by the Commission after the sort of preliminary survey now made under Reciprocal Trade Agreements Act (a study of domestic consumption, production, exports, imports, prices, etc.). Applicants were advised that after a review of these data, new applications might be made. Worthy cases were carried on. During the full period there were withdrawn: Applications under sec. 336. Applications dismissed without prejudice after preliminary investigation seemed not to justify cost of production investigation: Under sec. 315.. Under sec. 336_. Applications pending under sec. 315 when act of 1930 was passed and pending applications were dismissed under sec. 336K Total disposed of in this manner. 0 16. 147 152 104 419 Under sec. 336, applications covered.. Combined, applications covered. Total applications accounted for... Cost of production studies or detailed surveys ordered: Number of commodities under sec. 315.. Number of commodities under sec. 336. 1 Includes 2 cases returned by the President for further study. 176 123 1 299 1 718 83 114 197 THE CHAIRMAN. The next witness is Mr. Howard I. Young, representing the National Association of Manufacturers. STATEMENT OF HOWARD I. YOUNG, ST. LOUIS, MO., CHAIRMAN The CHAIRMAN. Did you appear before the House committee? The CHAIRMAN. You may proceed. Mr. YOUNG. Mr. Chairman and gentlemen of the Finance Committee of the Senate: I wish to present you, as chairman of the Tariff Committee of the National Association of Manufacturers, the conclusions and recommendations of that association and of the Annual Congress of American Industry, held under its auspices, in New York City, December 6 to 8, 1939, with respect to the further extension of the Reciprocal Trade Agreements Act now receiving your consideration. The tariff committee of the association is composed of some 35 members engaged in a variety of small and large manufacturing operations throughout the Nation. It is a standing committee which, among other things, has made a continuing study of the operation of trade agreements and, these studies, conclusions and recommendations were, in turn, submitted to the association and to the Congress of American industry with an attendance of more than 2,000 manufacturers operating in most of the States of the Union. I should like a list of the members of our committee to be incorporated in the record. (Same as follows:) NATIONAL ASSOCIATION OF MANUFACTURERS' TARIFF COMMITTEE, 1939 Chairman: Howard I. Young, president, American Zinc, Lead & Smelting Co., Inc. Vice Chairman: A. C. Ackerman, president, Ackshand Knitting Co., Inc. Royden A. Blunt, vice president and general manager, Buck Glass Co. P. W. Bond, president, Modern-Bond Corporation. Henry S. Bromley, president, North American Lace Co. Willard D. Brown, president, Continental Mills, Inc. Roe S. Clark, treasurer, Package Machinery Co. L. J. Cox, assistant sales manager, Richardson Corporation. H. L. Derby, president, American Cyanamid & Chemical Corporation, P. C. Everest, president, Marathon Paper Mills Co. Wirt Franklin, president, Franklin Petroleum Corporation. G. Richard Freling, vice president, Erie Resistor Corporation. P. J. Gibbons, secretary-treasurer, Vanadium Corporation of America. J. W. Hooper, comptroller, American Machine & Foundry Co. N. C. Jamison, president, Sauk River Lumber Co. Mark Kelley, manager, Ozark Chemical Co. J. L. Knipe, assistant director foreign department, Armstrong Cork Co. Fred E. Loud, president, Murray Oil Products Co. R. W. Magill, president, the Kansas Milling Co. A. E. Mallon, vice president, Pillsbury Flour Mills Co. William L. Monro, president, American Window Glass Co. W. W. Nichols, assistant to chairman, Allis-Chalmers Manufacturing Co., Inc. C. M. Nicholson, president, Master Rule Manufacturing Co., Inc. W. S. Quinlan, Robbins & Myers, Inc. F. H. Ransom, president, Eastern & Western Lumber Co. R. J. Reynolds, vice president, Summer & Co. J. R. Saville, president, The Pyrites Co., Inc. Hugo N. Schloss, treasurer, Liberty Lace & Netting Works. Karl B. Schinkman, president, York Band Instrument Co. W. H. Stanley, vice president and secretary, William Wrigley, Jr., Co. J. B. B. Stryker, president, Perkins Glue Co. I. N. Tate, vice president and secretary, Weyerhaeuser Sales Co. C. T. Treadway, president, the Horton Manufacturing Co. Guy A. Wainwright, president, Diamond Chain & Manufacturing Co. B. B. Williams, president, the Cooper-Bessemer Corporation. Mr. YOUNG. The conclusions reached by the committee with respect to the extension of the Trade Agreements Act approved by the association and the Congress of American Industry, are as follows: Conditions in international trade are so chaotic at present that it is recommended that the National Association of Manufacturers oppose negotiation of further trade agreements, including the revision or expansion of old agreements. Further expansion of the present program would not be in the interest of agriculture, industry, and labor. The National Association of Manufacturers also recommends that when the Reciprocal Trade Agreements Act expires in June 1940, its further extension in its present form should be vigorously opposed. We reaffirm our historic position of over 40 years in support of the basic theory of reciprocal trade agreements between nations, but any sound program for such agreements should provide that: 1. They be made only on a bilateral basis; 2. They be based on the findings of a nonpartisan scientific fact-finding committee, which would give all interested parties full opportunity to appear; and 3. They be approved by the Senate. These recommendations are based on the following considerations: 1. Its appraisal of the results of the program over the 5 years of its operation, as embodied in its report. 2. Further reductions in our tariff duties violate all principles of 'prudence in view of the present chaotic conditions and the wholly unknown post-war situation. 3. The trade-agreements program in its present form of administration has abrogated one of the most important principles ever written into the United States tariff laws-the principle of flexible tariffs providing for changes up or down as changing conditions may warrant. 4. Unfavorable implications as to the effects of the program at the end of the war. Dr. Coulter has presented the appraisal of the results of the program in his appearance this morning. Before proceeding further, let me make a preliminary observation with respect to the National Association of Manufacturers in relation to tariff policy. It is not a "high tariff" or "low tariff" organization. The difference of opinion among its members with respect to specific rates for any industry or commodity is as great as will be found in Congress. The association never, at any time, has dealt with specific rates. It has, however, been concerned about the means by which proposed rates should be determined. It originated and, for many years, advocated the establishment of an independent, nonpartisan, semijudicial Tariff Commission charged with a continuing study of the tariff, remaining an agency for its flexible adjustment upon progressive and accurate fact finding with relation to the comparative cost of production at home and abroad. The Tariff Commission was thus to remain a fact-finding body advisory to the President and the Congress, Congress at a times being the policy-making agency. Furthermore, the association has always advocated and supported the negotiation, under normal conditions, of appropriate trade agreements by the Executive, bilateral in character and securing an exchange of reciprocal advantages limited, as nearly as practicable, to the specific nations involved. May we direct your attention to the fact that when the Trade Agreements Act became effective the unconditional most-favorednation clause was applicable to some 23 commercial treaties. Now, it automatically applies to any trade agreement negotiated and proclaimed, or which may be in the future and substantially all nations except Germany and its instrumentalities or any country found to be discriminating against the foreign trade of the United States. We ask you to note further that all the trade agreements now in effect have been made for the maximum permissible period of 3 years and those which have expired during the life of the statute have by its terms been automatically renewed for an indefinite period, subject to termination upon not more than 6-months notice. It is likewise important to note that the authority conveyed by the terms of the statute includes the right to agree to a reduction or increase of specific duties within a range of 50 percent. Also included is the power to modify or repeal importat restrictions, and the negotiating authority has interpreted its powers to include the modification of excise taxes and no agreement that they shall not be levied in the future during the life of particular agreements. With this preliminary statement I beg to summarize our reasons for urging that this expiring legislation ought not to be renewed at this time and under existing conditions. The CHAIRMAN. I had understood that it was not a unanimous recommendation of the committee. Mr. YOUNG. That is true. It is a majority recommendation. The committee of 35 all voted for the recommendations that I stated, except two. Senator LODGE. What was the vote? Mr. YOUNG. Of the 35, all voted favorably but two. Senator HERRING. That is of the committee? That does not represent the membership, does it? Mr. YOUNG. The only answer I could give to that, Senator, is this, that when these recommendations are presented on the floor of the meeting when they were presented on the floor of the meeting on December 8, there were approximately 2,000 people present at that meeting, and at that time there was no one voted against the recommendations as submitted for approval by the committee. If it is extended, it ought then to be accompanied by the requirement that it would be limited, as a matter of prudence, to the negotiations of bilateral agreements only, and subject to ratification by the Senate. To support these recommendations we urge: First, that the power it is proposed to continue, in the face of present conditions, cannot be prudently and intelligently exercised. The conditions which confront you now, are not those presented when the original proposal was before you for consideration in 1934, nor when the statute was extended in 1937, for this nation is now confronted 215171-40- -27 with Europe and Asia convulsed in a chaos of war and a wreck of nations, and the further expansion of the conflict is unpredictable. Within a few months Czechoslovakia, with which we concluded one of the first trade agreements, has passed from political life. Austria, with which we were about to negotiate, no longer exists. Finland, with which we concluded a treaty, is engaged in a desperate effort to preserve its life. Who can say what States will endure? What will be the number and nature of their dependencies, their economic strength, their weakness, the value of their currencies, their capacity for production, the conditions of trade, investment, debt, and taxes? I am sure that you gentlemen will agree with me that no one can undertake to prophesy the outcome of the present struggle. I know no representative businessman, no American industry that would undertake to bind itself to the marketing of its products under present conditions among any of the warring nations for a 2- or 3-year term. No management would take upon itself as the trustee for others, such extensive commitments to an uncertain future. I do not know whether the contracts negotiated under this statute may be correctly described as agreements or treaties. I do know that by their terms they are international contracts between the United States and the particular nation with which they are concluded, and that they may effect, in equally binding terms, our trade relations with a hundred other States to which they are extended by the operation of the unconditional most-favored-nation clause. Observe, gentlemen, that perhaps 25,000,000 of the youngest and most efficient of the world's population are now diverted from their normal activities either in the military service or production for armament. The combination of these military and economic forces is equal in number of all those who are now engaged in agriculture, forestry, mines, quarries, fisheries, and manufacture in these United States. The disbandment of these armies, and the diversion of military producers to normal activities, will, judging by the world's experience after the last war, present the most serious social and economic problems. We are recognized as the best of the world's markets. At the conclusion of the present struggle this will be the market which every other nation will hope and attempt to penetrate. The trade agreements already negotiated were made at a time when the world was at peace and did not contemplate the chaotic conditions facing us today. How can we meet that which it is impossible to anticipate if we continue negotiations and agreements against an unknown future? We are ourselves confronted with a primary national problem in the revival and development of existing industries, the creation of new ones, thereby sustaining and enlarging the demand for men and increasing our domestic employment. Appreciating that condition, we have limited through immigration legislation the entrance of foreign labor to compete with our domestic labor. But the efforts of foreign labor and the conditions which are embodied in the competitive products which we import add to the already excessive domestic unemployment problem. The importation of competitive goods is equivalent to the importation of the labor of those who make them. We are particularly opposed to binding ourselves to further agreements for the introduction of alien production by agreements which |