some imports which they are no longer able to obtain in Europe by purchases from the United States.

While the British and the French Governments have markedly expanded their purchases in the United States of certain commodities deemed essential for war needs, they have also, by means of various wartime controls, curtailed or eliminated their imports of other commodities, considered as nonessential. Moreover, because of the exigencies of their financial position and with the view to conserving their dollar exchange resources, they have sought to obtain as large a proportion as possible of their imports from British and French Empire

sources.

The wartime import controls have, naturally, affected some of the commodities covered in our trade agreements. The agreements themselves contain a special provision which permits either party to the agreement to adopt, while engaged in hostilities, emergency measures which would not be permitted by the agreement in normal times. Nevertheless, every measure taken by the foreign governments concerned is being carefully scrutinized with a view to possible mitigation of the action taken.

The principal control measures taken by the three belligerent governments, as well as the agreements recently negotiated by them with other countries, are described below.

CONTROL MEASURES OF THE BELLIGERENT COUNTRIES WHICH AFFECT THE EXPORT TRADE OF THE UNITED STATES

British import controls.-There are two principal methods employed by the British Government to regulate imports, namely, the Board of Trade import licenses and the "commodity controls."

As regards import licenses, there is a comprehensive list of articles which may not be imported into the United Kingdom without licenses. For a number of these articles the Board of Trade has announced that no licenses will be issued until further notice. In some other cases licenses are being issued only for imports from British Empire

sources.

Imports of products subject to commodity controls are regulated by various methods. In some cases import permits issued by the Ministry of Food are required, while in other cases special control authorities have been established with powers equivalent to those of an import monopoly. There are also cases in which indirect methods of control are employed, such as the setting of maximum prices at low levels which preclude imports from certain countries.

The Ministry of Food, which has general supervision over commodity controls affecting foodstuffs, possesses very broad and flexible powers for regulating imports and domestic trade. Broadly speaking, its functions are: (1) The acquisition of food supplies from abroad; (2) the imposition of price-control measures; (3) control over domestic stocks of important foodstuffs; and (4) the organization of distribution, including the rationing of consumers.

The trade in a number of staple products other than foodstuffs is subject to commodity controls which operate under the supervision of other Government agencies. In some cases, import regulation is effected through joint operation of the Board of Trade licenses and the commodity-controls system.

At the present time British imports of American tobacco, apples, and a number of other agricultural, as well as nonagricultural prod

ucts are prohibited, while the British regulations also limit the amount of trade in a number of other commodities. With respect to all these products, negotiations are in progress with the British Government, looking toward the most satisfactory possible adjustment of the questions involved.

French import controls. A general prohibition of imports into France was established by the French Government by decree of September 1, 1939. Its purpose is to limit French purchases to products vital for the prosecution of war. By its terms no product other than gold may be imported except by a specifically granted exception to the general prohibition. Such exceptions are granted generally to products which fit in with the national-defense requirements. The available information does not indicate that actual curtailment of imports has yet been applied to many commodities.

The principal products on which import difficulties have been reported are fresh fruits, and radio and electrical apparatus. Importation of applies and pears does not appear to have been authorized during recent months. The last report on the subject received indicated that American apples and pears would not be needed before the middle or end of the first quarter of 1940 and that importation at that time would be permitted only if considered necessary by the Government.

Reports also indicate that importation of citrus fruits, cash registers, spark plugs, fountain pens, dried prunes, insulating boards, typewriters, domestic refrigerators, passenger automobiles and passenger chassis, pharmaceutical preparations, molasses, and lubricating oil have been prohibited or curtailed.

Negotiations are now in progress with the French Government with a view to alleviating the effects of these controls.

Canadian import controls.-Although the Canadian Government has imposed control over imports, exports, and all transactions in foreign exchange, no restrictions are actually being placed upon the normal flow of trade between Canada and the United States, although the Canadian Government has imposed a quota on fresh pork, which is discussed below. Licenses for imports are being granted freely and promptly to regular importers from the United States, and when importers present documentary evidence of the completion of such import transactions, permits for the transfer of exchange in payment of such imports are being granted at the prescribed rates of exchange. On February 26, the Canadian Government limited imports of fresh pork from the United States to 1,626,769 pounds monthly. This quantity is equivalent to the average monthly imports from the United States during the first 9 months of 1939. The quota, on an annual basis, amounts to approximately 19,200,000 pounds, which contrasts with 320,000 pounds imported from the United States in 1938, the year prior to the operation of the present trade agreement with Canada.

WARTIME TRADE AGREEMENTS OF THE BELLIGERENTS

British wartime trade agremeents.-Accord ng to the latest information, the Un ted Kingdom has concluded wartime trade agreements with France, Belgium, Swdeen, Norway, Turkey, and Greece. While the full terms of these agreements have not been made public, and it is not possible to tell how comprehensive they are, nevertheless it is known that in the main they are short-term war-trade agreements

which would automatically go out of existence with the cessation of hostilities.

It is the announced intention of the British Government to return, at the end of the war, to the liberal, commercial policy embodied in the Anglo-American trade agreement. The British Prime Minister, in a speech on January 31, 1940, made the following statements:

We made an agreement with the United States a little over a year ago which, as we thought at the time, pointed the way to better things in international trade. It was the very negation of that too-prevalent system of bilateralism, of exclusive advantages, of discrimination carried to a pitch which clogs the wheels of commerce, and which promotes ill feeling among the nations. It was based upon the principle of the most-favored nation, the principle which, in our view, in normal times, is the best way of promoting international trade. And we mean when this way is successfully concluded to return to that ideal.

We recognize that for the full development of international trade it must flow along multilateral channels, and that we must put an end to that vicious policy of economic nationalism and autarchy which did so much to upset the last great peace settlement.

One of our foremost aims of the future will be the restoration of international trade, which seems to us to present the best opportunity for restoring in turn the standard of living and the consuming power of the nations. That is a policy which we have in mind when the time comes to turn once more from war to peace. French wartime trade agreements.-The only trade agreements made by France with other countries since the beginning of the war other than agreements relating to contraband control and transit trade are those with the United Kingdom, Turkey, Spain, and Yugoslavia. The Turkish agreement, which was made by Turkey with the United Kingdom and France jointly, is mentioned above. There has been no indication so far of its adversely affecting American exports of tobacco to France. The French Government has given assurance that it will purchase this season in the United States the usual amount of tobacco which it has guaranteed to purchase under the trade agreement with us. A clearing agreement between France and Spain, providing for exchange of stipulated quantities of certain commodities, was signed January 18, 1940. It will expire at the end of 1940. American export interests appear to be very little affected by it. France has recently concluded a trade agreement and a payments agreement with Yugoslavia, both of them effective January 1, 1940. These instruments, which have not yet been officially published, are reported to have been prepared with a view to adapting trade relations between France and Yugoslavia to present war conditions and are expected considerably to stimulate trade between the two countries. An increase in French imports from Yugoslavia is anticipated, particularly in the case of such products as meat, lumber, tobacco, mineral ores, and hemp. Information as to the duration of these agreements is not available.

The foregoing is a statement of the salient facts that have developed thus far. With regard to the pertinence of these facts as bearing upon the operation of the trade-agreements program, the following comments are in order:

1. Mention has already been made of a special provision in existing trade agreements which permits either party to the agreement to adopt, while engaged in hostilities, emergency measures which would not be permitted by the agreement in normal times. Upon the cessation of hostilities, these special provisions will automatically cease to apply, the agreements will immediately resume their full effect, and require immediate revocation of any such war emergency

measures.

2. The mutually advantageous character of the existing trade agreements between the United States and the countries concerned is the principal factor tending to facilitate a satisfactory outcome of the efforts in which this Government is now actively engaged toward securing immediate alleviation of certain of the war controls as they affect American trade.

3. It is not unlikely that it will be necessary, in order to protect American interests, to adjust the existing agreements in the light of changed conditions at the termination of hostilities or possibly earlier. The authority under the Trade Agreements Act provides the necessary means of prompt and effective action for this purpose.

TABLE 1.-United States trade, and trade with United Kingdom, France, and Canada, September to December 1937, 1938, and 1939

TABLE 2.-United States exports to Europe, and to European trade-agreement countries, during the first 4 months of the European war and previous comparable periods

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?