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Senator LA FOLLETTE. Also, can you say from any information which you have as to whether or not these moves in the direction of totalitarianism in reference to economic policy as distinguished from other policy in relation to the war, provide, insofar as you know, for the duration of the war, or is there a tendency for them to be extended for a period beyond the duration of the war?

Secretary HULL. That is another reason why this program is so important. In the rapid-fire issuance of restrictions here and yon, today, tonight, and tomorrow, in London, Paris, or Ottawa, we don't know just how much of them may remain after the war to our injury, and we are trying to follow each one of those cases and safeguard our interests.

Senator LA FOLLETTE. I understand that, but what I am desirous of ascertaining, if you have the information, is where these agreements which have been made as a supplementary economic armament flowing from the participation of these nations in the actual warfare, whether or not you have any information on those specific agreements as to whether or not they are being drawn for the duration of the war or whether some of them or all of them, as the case may be, contain provisions for their extension beyond the termination of hostilities. Secretary HULL. I will be glad to give you what we have up to date. As I say, it is changing from day to day, and I want to add again that in my opinion there will be numerous instances where these war restrictions and war arrangements among the belligerents especially, or between them and neutrals, will contain things that will hurt us afterward, and that is why we want to keep right after it as best

we can.

Senator LA FOLLETTE. I believe I made myself clear, but the thing that I am particularly anxious to ascertain insofar as you have the information is whether or not these belligerent nations are providing that in these agreements which they are now making, and the restrictions and other activities which you characterize as being economic armament, whether they have the tendency, and whether the tendency for them is to provide in those agreements for their being terminated with the termination of hostilities and the coming of peace, or whether the tendency is to provide for their continuance for a definite and stated period of time beyond the negotiation of peace. Secretary HULL. I think I finally understand you. I beg your pardon for my denseness in this respect. I have had no intimation from any government that is a party to any of our 22 agreements that they plan to abrogate trade agreements with us or to modify them materially, except for the actual period of the war and the war condition. They have, on the contrary, so far as I have heard, indicated their purpose to resume the fullest observance of the agreements, and in some instances I think you will find that the biggest commercial nations are more and more proclaiming their purpose to get back to the precise formula that is embodied in our trade program. Senator LA FOLLETTE. All that I was trying to ascertain was- -I assumed, of course, that you are apprised of these actions when they are taken?

Secretary HULL. Yes.

Senator LA FOLLETTE. And I assume that they have certain termination dates in them?

Secretary HULL. Precisely.

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Senator LA FOLLETTE. What I would like to ascertain is, in so far as the Department has information, which of the agreements have been made for the duration of the war, and a list of those, if any, which provide for a period of continuance after the war.

Secretary HULL. You mean agreements between belligerents and other countries than ourselves?

Senator LA FOLLETTE. That is right.

The CHAIRMAN. Will you furnish that information?

Secretary HULL. I will give you what we have on that.

Senator GEORGE. With respect to tobacco, Mr. Secretary, you will remember there was some statement made by the British Government that they would discontinue the purchase of flue-cured leaf tobacco which is grown in the United States.

Secretary HULL. We have that up and are keeping up on it almost every day.

Senator GEORGE. Is it the information of the State Department, if you may be able to state it now, that that arrangement on the part of the British Government is temporary and made during the period of the war?

Secretary HULL. That would only be temporary, but you remind me, Senator, of a very important phase that I may not have emphasized to you heretofore. This was one of the unfortunate actions of the Ottawa Conference of the British Empire. We had a marvelous market there in London, unrestricted, and the British Government, Great Britain, not only shut off our tobacco to the extent of two shillings preference for South Africa and other countries, but it entered into a 10-year agreement with South Africa to let her furnish the bulk of it. So we got Great Britain--and that was one of the three or four things that held up our agreement for a year or more--we got Great Britain to agree that in 1942 when that 10-year period comes she will then reopen negotiations with us on the tobacco situation. In the meantime we are selling what we can there under this kind of a situation.

Senator GEORGE. I understand that.

Senator LA FOLLETTE. As I understand it, that is just an example which I have in mind. As I understand it, some agreement was made by Great Britain with Turkey to purchase tobacco from Turkey? Secretary HULL. Yes.

Senator LA FOLLETTE. In lieu of the tobacco purchased from this country. Now, what I desire to know is, if the Department has the information, is that agreement with Turkey for the duration of the war or does it run beyond that?

Secretary HULL. That is very pertinent, and we have that whole tobacco question up with the British Government now, and I could talk to you more definitely about it a little later on, but I will keep in mind especially your inquiry about how long that arrangement runs.

Senator LA FOLLETTE. I did not mean as to just tobacco, but taken as to all of these actions which have been taken since the war broke out.

Secretary HULL. I understand.

The CHAIRMAN. Mr. Secretary, while the question was put about this wheat, I notice that in the hearings of the House committee in volume 1, page 53, this information appears, that the value of wheat exports increased from $1,400,000 in 1933 to countries with whom

we have trade agreements, to $53,900,000 in 1938. And that the value of exports to non-trade-agreement countries increased from $3,400,000 in 1933 to $24,200,000 in 1938, showing that the increase proportionately is much higher to the trade-agreement countries in the exports of wheat than to the non-trade-agreement countries.

Secretary HULL. In other words, Mr. Chairman, we suffered tremendously by retaliation, but in my judgment if we strive and are sufficiently alert and persistent in our efforts, we can regain an enormous portion of the world trade, but it is not going to just drop into our lap. It is going to require tremendous effort on our part.

Senator JOHNSON. I wonder if the testimony that the chairman has just given us shows that before the reciprocal trade agreements were entered into, that the time was over 2 years before, and further that the last figure that he has read, whether or not it shows that we were paying a subsidy of 30 cents a bushel to get foreigners to buy our wheat? Thirty cents per bushel out of the Federal Treasury.

The CHAIRMAN. These statistics do not show that. I am merely reading the amounts, the increased exportations to the trade-agreement countries within that time.

Senator CLARK. We did not have any export subsidy on wheat in 1938.

Senator JOHNSON. We did in 1939.

Senator CLARK. The chairman has given the figures for 1938. Senator JOHNSON. I do not know if it was the calendar year, the fiscal year, or what year it was he read from.

The CHAIRMAN. This is the calendar year, I should imagine, but I do not know definitely.

Are there any other questions to be asked of the Secretary? (No response.)

The CHAIRMAN. Tomorrow morning at 10 o'clock the Secretary of Agriculture will testify.

We thank you very much, Mr. Secretary, and it may be that some member of the committee will want you to come back before these hearings are closed. If so, we will notify you.

Secretary HULL. I appreciate the opportunity of coming over. (Whereupon, at 12:35 p. m., a recess was taken until Tuesday, February 27, 1940, at 10 a. m.)

EXTENSION OF RECIPROCAL TRADE AGREEMENTS ACT

TUESDAY, FEBRUARY 27, 1940.
1940.

UNITED STATES SENATE,
COMMITTEE ON FINANCE,
Washington, D. C.

The committee met, pursuant to recess, in the Finance Committee room at 10 a m., Senator Pat Harrison (chairman) presiding. The CHAIRMAN. The committee will be in order.

Mr. Secretary, you may proceed. We began our hearings yesterday with Secretary of State Hull, and we wanted you to follow him by discussing the trade-agreements program from the Agricultural standpoint. So you may proceed without questions in the beginning, and then members will ask questions after you have completed your

statement.

STATEMENT OF HON. HENRY A. WALLACE, SECRETARY OF AGRICULTURE

Secretary WALLACE. I have a statement here that will take perhaps 20 minutes.

The CHAIRMAN. You may proceed.

Secretary WALLACE. Three years ago I appeared before your committee to urge the continuation of the reciprocal trade-agreements program. I am here for the same purpose today.

On my previous appearance I suggested that the trade-agreements program and the farm programs administeded by the Department of Agriculture are supplementary and that it was extremely important from the standpoint of agriculture as well as the general welfare that the authority to conclude reciprocal trade agreements be continued. I believe that this is equally important now.

Only a month ago I appeared before the Ways and Means Committee of the House of Representatives to make a statement on the trade-agreement issue. I do not think it necessary to go into the same detail here today but there are certain aspects of the matter which I am glad to have the opportunity to reemphasize.

These aspects concern, first, the actual results of the trade-agreements program both on the export and import side from the point of view of agriculture and, second, the function of the reciprocal tradeagreements program during the current war period and the reconstruction era which will follow.

American agriculture is interested in foreign trade from three major points of view. In the first place, it depends upon the foreign market for the disposal of the considerable surplus of its production over domestic requirements. Second, it is interested in that type of

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