Mr. COOPER. It is your thought, then, that our foreign trade is all dead and there is no chance to revive it, and no effort should be made to try to revive it. That is the situation?

Mr. SAMUEL CROWTHER. Yes, sir.

Mr. COOPER. That is all, Mr. Chairman.

Mr. SAMUEL CROWTHER. I may say there, we do one half of the business of the whole world, and the effort in the United States to get business will result in far more than pulling it through the countries of the world.

The CHAIRMAN. Mr. Treadway.

Mr. TREADWAY. Mr. Chairman, before interrogating the witness this morning, I would like to suggest that if our colleague, Mr. Crowther, who is ill, has any questions he would like to ask of the witness, we would be very glad to recognize him, because this is the first time we have had the pleasure of Dr. Crowther's company during these hearings, and I do not want to tire him by compelling him to remain indefinitely.

The CHAIRMAN. Mr. Treadway yields to Dr. Crowther, of the committee.

Mr. CROWTHER. Mr. Chairman, I appreciate exceedingly the courtesy, and while I am thoroughly enjoying this, I will leave the answers to the real Crowther.

Mr. TREADWAY. Mr. Chairman, I will ask just one or two questions, although I think the witness has covered the ground quite thoroughly. There has been considerable said during these hearings about trusting the President, and I want to say there is no question in your mind or my mind, is there, Mr. Crowther, of absolute confidence and trust in the President of the United States, whoever he may be, at any time?

Mr. SAMUEL CROWTHER. NO; it is a thing that goes beyond trust. I mean it is not a question of confidence, it is a question of facts. It is not a question of good intentions or worthy aspirations, it is facts.

Mr. TREADWAY. We recognize those features.

Mr. SAMUEL CROWTHER. Yes.

Mr. TREADWAY. To what extent do you think, if this bill is enacted as our friends on my right expect and confidently believe it will be— to what extent do you think any of the details and proof on which a decision would be based, would be handled by the President of the United States personally?

Mr. SAMUEL CROWTHER. Well, it is quite out of the question for the President of the United States to examine any of these questions. The most he can do is to examine a brief submitted to him by those who have made a study.

Mr. TREADWAY. So that the confidence we are asked to repose in the President of the United States would be a delegation of confidence to subordinates in his employ or under his supervision. Is that correct?

Mr. SAMUEL CROWTHER. Precisely.

Mr. TREADWAY. Now, just another matter to clear up a little, you asked, possibly facetiously, but nevertheless it was pertinent, where this bill comes from and how it reached Congress, so that it is not out of place to ask you if you are aware that to a certain extent a different

method of the preparation of bills has been inaugurated under the present administration.

I do not know whether you are aware of that?

Mr. SAMUEL CROWTHER. I have heard, but it would be very interesting to have that process outlined. It is a new one in procedure, is it not?

Mr. TREADWAY. I am not in the confidence of the majority, and all we can do is to recognize the facts as they come to us. Numerous bills have been submitted to Congress in the past session and since this session started, following messages from the President.

This present bill, the chairman has already informed you, is an administration measure, and was handed to him in its present form to introduce into the Congress and submit to this committee.

Without any criticism whatever of that procedure, it is a novel one and a new one with this administration. Formerly committees were expected to have something to do with the preparation of bills and to propose them, but perhaps for your information you might want to know that today that method seems to be obsolete, and the measures are presented as the administration may want them.

That, however, has nothing to do with the few questions I will ask, but is simply by way of explanation of the colloquy between yourself and Mr. Cooper and our distinguished chairman.

Now, Mr. Cooper asked you what you would suggest as a measure overcoming this depression. I gather from the statement you provided and, I think, read to us, that your method of caring for this situation would be a better opening of home markets. Is that correct?

Mr. SAMUEL CROWTHER. Yes; exactly.

Mr. TREADWAY. Would you look to labor at all in that thought?

Mr. SAMUEL CROWTHER. Yes; I would. We have 120,000,000 to 130,000,000 people here and we do approximately one half of the entire business of the world. I have forgotten how many people there are in the world, 3 or 4 billion, and I say it is absolutely nonsense to try to run out and peddle things to those 4 billion when you have 120,000,000 in the United States doing half of the business of the world.

If you like, and care to have it in the record, I will give you the economy of the leading peoples of the world, and you can see what chance you have of doing business.

But remember this point, what are you going to take in payment? You saw an orgy from 1922 to 1929 of giving away goods, and the exports we have in those years, I have the balance sheet of them, and it is represented today by about 7 billion of worthless foreign bonds. Also, I will say that American industry has got about 7 billion abroad in plants.

Now, we can have an export trade if we want to pay both ends of it, but otherwise I say let us concentrate on our home market, and import those things we need, and in payment of the imports, let us collect the money owed to us.

Mr. TREADWAY. I did not quite get you, Mr. Crowther, in that phrase you used that we pay both ends.

Mr. SAMUEL CROWTHER. We lend them the money to buy ourgoods.

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Mr. TREADWAY. You think those debts are practically worthless now?

Mr. SAMUEL CROWTHER. Practically, yes; and this bill recognizes the worthlessness.

Mr. TREADWAY. So that we have already paid both for the time being, and this bill would anticipate the continuation of that policy? Mr. SAMUEL CROWTHER. It would in effect, but not in words. Mr. TREADWAY. The effect is the vital part of it, isn't it? Mr. SAMUEL CROWTHER. Yes.

Mr. TREADWAY. Mr. Cooper read you page 1 and most of page 2 of section 350, which is entitled "Promotion of Foreign Trade." I do not need to read that to you again, you have read it and he has read it again to you, but what was your comment on the nature of that?

Mr. SAMUEL CROWTHER. I think it was very finely put and very pious language.

Mr. TREADWAY. Does it mean anything so far as accomplishment is concerned?

Mr. SAMUEL CROWTHER. Not a thing.

Mr. TREADWAY. Does it describe anything that perhaps the people do not know, or does it bring anything but nice language before Congress?

Mr. SAMUEL CROWTHER. It is something we would all like to have. Mr. TREADWAY. So far as execution is concerned, you do not see in that paragraph very much benefit to the American export trade, do you?

Mr. SAMUEL CROWTHER. None whatsoever.

Mr. TREADWAY. Now, in a sense, that item of the purposes to be accomplished is a nice prayer?

Mr. SAMUEL CROWTHER. A nice prayer; yes.

Mr. TREADWAY. And therefore that covers the purposes to be accomplished?

Mr. SAMUEL CROWTHER. Yes, sir.

Mr. TREADWAY. What is the machinery under which it is to be accomplished?

Mr. SAMUEL CROWTHER. There is not any.

Mr. TREADWAY. As to this permission granted to the President to make these swaps, and I call them swaps because I came from New England also and I did not get this high-grade language drilled into me as a youth, and therefore it is a question of swapping if anything is accomplished, is it not?

Mr. SAMUEL CROWTHER. Yes.

Mr. TREADWAY. Now, you seemed to me to hit on that point in the last paragraph of page 10, and I would like to read this paragraph in order to give it some emphasis. This is what you said:

That creating a new foreign trade could bring to the country any great amount of business is not apparent from the figures. What are we going to sell and to whom are we going to sell it? And what are we going to take in exchange? Are we going to sell the roll of business and decide which parts shall be executed? And unless that be done on a major scale, the amount of imports will be trivial. And if it be done on a major scale, shall we be helping prosperity or only creating one more problem?

If I had had your ability of composition that is the language I would have used all during these hearings when I have interviewed

members of the Cabinet and others to try to get an answer to the very questions you asked in that paragraph.

I have not been able to get the answer. What are we going to sell; and to whom are we going to sell it? To what extent can you give us any information in answer to your own interrogatory there?

Mr. SAMUEL CROWTHER. I think you could not get a direct answer for the simple reason they did not know. By abandoning the debts we can trade certain chosen products for rubber, for coffee, for silk and a few other articles. We are doing that, anyhow

Mr. TREADWAY. Congress as yet has not agreed to cancel the debts. Mr. SAMUEL CROWTHER. Well, I might point to you that Secretary Wallace's pamphlet on this was circulated in the country by the two leading organizations for debt cancelation, the Carnegie Foundation and the World Peace Foundation.

Mr. HILL. What was that statement that was circulated?

Mr. SAMUEL CROWTHER. Secretary Wallace wrote a pamphlet, America Must Choose, in which he sets forth this problem. That pamphlet was circulated by the Carnegie Foundation and the World Peace Foundation, and they have been the two leading advocates of debt cancellation.

Mr. TREADWAY. You go on and ask what are we going to take in exchange, and the articles you say we will take in exchange, we are already taking now in such quantities as we can use them, because we can not produce them here.

Mr. SAMUEL CROWTHER. Rubber is one that is going away soon. in the face of synthetic rubber.

Mr. TREADWAY. The distinguished Chairman of the Tariff Commission made some reference to growing coffee in greenhouses in Maine. Is there any likelihood of that becoming a successful commercial method of growing coffee?

Mr. SAMUEL CROWTHER. I should think the distinguished Chairman of the Tariff Commission might be likely to attack such an enterprise. Mr. TREADWAY. Then he used another illustration on which you may be a little at variance with the gentleman, and, by the way, he is sitting at your right. He also referred to the possibility of growing tea in either North or South Carolina under tariff provisions, and you have not any thought that there is a likelihood of our climatic conditions in either of those States being such that we will commercially raise tea?

Mr. SAMUEL CROWTHER. Why should we want to? When I speak of self-containment I do not speak of economic isolation, but I speak of withdrawing ourselves from the dangers incident to foreign commerce. As the thing now stands with our debts we can have all of the tea and enough silk for our lives and the lives of our children.

Mr. TREADWAY. I have not finished with that exchange question, but you made several references to debts, and you entered into a little discussion with our friend Mr. Cooper, evidently with a difference of opinion between you. But I would like definitely to draw to your attention once more the fact that the Secretary of State definitely stated before this committee in answer to a question from my colleague Mr. McCormack, that there was no relation between the purpose of this bill and debt cancelation. Evidently you do not think that is possible, do you?

Mr. SAMUEL CROWTHER. It is utterly impossible. If you are going to do a foreign business exactly as you do a domestic business, you have got to have books. If you do not collect from the other man and decide to sell him again, then you are telling him he need not pay.

Most of our difficulties, most of the world difficulties, have come about through the notion they do not have to keep books of what they call the invisibilities of foreign trade.

England today is suffering from it because she spent through the years more than she received, and thought she was getting it back in invisibilities, and she was not. So she went off of the gold standard, or went onto a policy of repudiation.

Mr. TREADWAY. You had one further sentence that was very interesting to me, and one I have asked the administration witnesses to answer, and it is this:

Are we going to call the roll of business and decide which parts shall be executed?

You are somewhat familiar with the industries of New England? Mr. SAMUEL CROWTHER. Yes, sir.

Mr. TREADWAY. The distinguished Secretary of Agriculture to whom you have referred testified of small inefficient industries which would be obliterated if he had his way about this. Others have testified that they would try not to destroy anything that now exists. But in going about through New England seeing small industries there, have you noted particularly inefficient small plants of any kind?

Mr. SAMUEL CROWTHER. New England does not differ from any other section of the country for the reason that it happens to be made up of human beings. Human beings are not the same in efficiency, there are everywhere efficient and inefficient human beings. I do not know whether we would be better off by executing the inefficient or not, and I do not know who is going to do the deciding.

Mr. TREADWAY. In other words, if the Secretary of Agriculture or those interested in this legislation designate as any special plant is being inefficient, it would be your idea, would it not, that the proprietors of that plant before being put out of business would want to be allowed to testify at least, would they not?

Mr. SAMUEL CROWTHER. Yes, but in addition to that, may I cite a case. I think that jury ought to take onto themselves a mantle of Moses. The example I want to cite, suppose in 1913 the question came up of a reciprocity treaty with Chile. Chile was producing nitrates we wanted, and we were producing cyanates very efficiently. Chile could have agreed to buy certain things from us and we could have agreed to buy nitrates from Chile. Once we go into that agreement we are bound not to start a competitive industry, and so if in 1913 we had made a reciprocity treaty with Chile, an ideal one, we would not today be self-contained for war purposes in nitrates, and we have a 100-million-dollar nitrate-fixation industry. So I think in addition to judgment, you must ask a board of that kind to have a gift of prophecy.

Mr. TREADWAY. There has been considerable mystery on the part of witnesses for the administration with reference to this measure so far as world trade goes, and there is not a very large possibility of finding goods to exchange other than these products to which we