Senator CLARK. I voted for the Reciprocal Trade Agreements Act, which is the only way we could go about and correct that very vicious situation created by the Smoot-Hawley Act and the preceding tariff act. Senator JOHNSON. This is your reason for your support of the Reciprocal Trade Agreements Act? Senator CLARK. There is no question on earth about that. Anybody who favored the rates of the Smoot-Hawley Act is entirely correct in voting against the Reciprocal Trade Agreements Act. Mr. TABER. You miss a very great point there. SenatorSenator KING interposing). There were a great many who were opposed to the Smoot-Hawley Act and yet also were opposed to the reciprocal trade agreements program. Mr. TABER. That is what I want to get to. Mr. Brenckman, our Washington representative, appeared before this very committee against many of the excessive industrial rates written into the Hawley-Smoot bill. I want that to go into the record. That does not make us turn our backs on our own people now. Senator CLARK. You are consistent, I will say that. Mr. TABER. That has nothing to do with the problem of unfair treatment, and a program that does injure agriculture. I noticed in your asking some questions about automobiles, and I want to tell you that I addressed the Detroit Economic Club not so long agoSenator CLARK (interposing). So did I. Mr. TABER (continuing). And I sure faced a bunch of great fellows and I said to them that the financial boundary line of Detroit extended to every farmyard gate in America, and that Detroit was more interested in what farmers could get in America than in Cuba. It takes 111 tons of Cuban sugar to get a new automobile. It just takes 11 tons out in Colorado. Senator CLARK. We had that brought up here the other day, too. Of course, you arrive at that figure by assuming that all of the revenue produced in the portion of Colorado which produces sugar goes into automobiles, and then to arrive at a figure in sugar, you take the total importation from Cuba of sugar and divide that into the number of automobiles sold in Cuba, don't you? It seems to me it would be an entirely untenable theory. I do not wish to take the time of the committee to go into that, because Senator Johnson and I had that out the other day. Mr. TABER. It seems to me it is a very sound argument. Senator CLARK. I do not think so. That is a matter of opinion. Mr. TABER. We are talking about the American market for the American farmer, and we only produce 30 percent of our sugar. I put a statement in the record of the House hearings showing where we lost this $133,000,000, according to the figures of the Tariff Commission, and I also put in the record the price of sugar per pound per month during the entire period, and while the Treasury was losing $133,000,000 in revenue, the poor housewife did not save a nickel because sugar was higher than when the tariff was reduced. The figures are found on page 1649 of the House record. The CHAIRMAN. Thank you, Mr. Taber. than the trade treaties moved entirely since they were started, and much cheaper. These tables compiled from the Department of Agriculture statistics indicate clearly the declining loss of world market for cotton. They also prove that recent reciprocal treaties are not correcting the serious situation. Senator CLARK. Well, it is a fact, is it not, that the income of the farmers of the United States taken as a whole from wheat exclusive of Government benefits have increased materially? Isn't that true? Mr. TABER. This year; yes. Senator CLARK. Since 1932, we will say, when wheat sold down to 23 cents a bushel on the farm out in western Kansas under the beneficent Smoot-Hawley Tariff Act with the tariff at 42 cents a bushel on wheat. Mr. TABER. There is something more important than that, Senator, and that is this, that the ratio of prices received by farmers to prices. paid has been only about 75 percent as high during the past 2 years as it was during the base period, 1909-14. The present figure is 83. Senator CLARK. What was it in 1932? That was when the SmootHawley Tariff Act was in full flower. Senator JOHNSON. The Senator from Missouri certainly does not attribute the low price of wheat in 1932 to the Smoot-Hawley Act? Senator CLARK. I certainly do. Senator JOHNSON. Was the Senator in the Senate at that time? Senator CLARK. I was not. If I had been, I would not have voted for the Smoot-Hawley Act. Senator JOHNSON. I just wonder what the Senator has ever done to get rid of the Smoot-Hawley Act. Senator CLARK. I voted for the Reciprocal Trade Agreements Act, which is the only way we could go about and correct that very vicious situation created by the Smoot-Hawley Act and the preceding tariff act. Senator JOHNSON. This is your reason for your support of the Reciprocal Trade Agreements Act? Senator CLARK. There is no question on earth about that. Anybody who favored the rates of the Smoot-Hawley Act is entirely correct in voting against the Reciprocal Trade Agreements Act. Mr. TABER. You miss a very great point there, Senator Senator KING (interposing). There were a great many who were opposed to the Smoot-Hawley Act and yet also were opposed to the reciprocal trade agreements program. Mr. TABER. That is what I want to get to. Mr. Brenckman, our Washington representative, appeared before this very committee against many of the excessive industrial rates written into the Hawley-Smoot bill. I want that to go into the record. That does not make us turn our backs on our own people now. Senator CLARK. You are consistent, I will say that. Mr. TABER. That has nothing to do with the problem of unfair treatment, and a program that does injure agriculture. I noticed in your asking some questions about automobiles, and I want to tell you that I addressed the Detroit Economic Club not so long ago Senator CLARK (interposing). So did I. Mr. TABER (continuing). And I sure faced a bunch of great fellows and I said to them that the financial boundary line of Detroit extended to every farmyard gate in America, and that Detroit was more interested in what farmers could get in America than in Cuba. It takes 111 tons of Cuban sugar to get a new automobile. It just takes 11 tons out in Colorado. Senator CLARK. We had that brought up here the other day, too. Of course, you arrive at that figure by assuming that all of the revenue produced in the portion of Colorado which produces sugar goes into automobiles, and then to arrive at a figure in sugar, you take the total importation from Cuba of sugar and divide that into the number of automobiles sold in Cuba, don't you? It seems to me it would be an entirely untenable theory. I do not wish to take the time of the committee to go into that, because Senator Johnson and I had that out the other day. Mr. TABER. It seems to me it is a very sound argument. That is a matter of opinion. Mr. TABER. We are talking about the American market for the American farmer, and we only produce 30 percent of our sugar. I put a statement in the record of the House hearings showing where we lost this $133,000,000, according to the figures of the Tariff Commission, and I also put in the record the price of sugar per pound per month during the entire period, and while the Treasury was losing $133,000,000 in revenue, the poor housewife did not save a nickel because sugar was higher than when the tariff was reduced. The figures are found on page 1649 of the House record. The CHAIRMAN. Thank you, Mr. Taber. STATEMENT OF ALFRED C. GAUNT, PRESIDENT, MERRIMAC MILLS, METHUEN, MASS.; CHAIRMAN, NATIONAL ADVISORY COUNCIL OF INDEPENDENT SMALL BUSINESS Mr. GAUNT. To the members of the Senate Finance Committee: My appearance is in behalf of myself and my company, a small worsted mill, which with others large and small is being badly hurt by the working of the so-called reciprocity treaties. As chairman, however, of the National Advisory Council of Independent Small Business, and vice president of Smaller Business of America, I am particularly and vitally interested in an angle that I think has not been presented to you the ill effect that a renewal of these treaties will have on the country's small businesses and their employees. It is for the preservation and promotion of small businesses and their employees that I must plead. count It would seem as if the woolen industry had been especially singled out for sacrifice, although it is an industry predominantly composed of small units, most of them proprietor operated. As a matter of fact, 94 percent of the country's 400 woolen testile plants are small and medium sized businesses. They are widely spread geographically from Maine to California, and are usually the substantial means of livelihood in the communities where they are located. They have had so hard a struggle now for many years that almost one-third of those in existence a decade ago have failed or gone out of business. And the further shock of a renewal of these low tariff treaties will put out of business many more. Strangely enough it is, generally speaking, the small business industries that are hardest hit by these treaties-potteries, which are also the backbone of many small communities; paper mills, glove manufacturers; the lace industry; shoes and hat manufacturers; toys; kitchen utensils; buttons, shoes, and so forth. These are all highly competitive industries with no taint of monopolistic practices. Few of them are "absentee" owned. The industries that the friends of the treaty allege will be helped fall in large measure into the category of big and concentrated industries, many of them indulging in practices which border on monopoly-business machines, electrical appliances, automobiles, typewriters, oil products, and so forth. So you have here at stake more than a matter of industry versus industry-you must decide which type of business you wish to penalize and which type you wish to promote. A restoration of some measure of parity to small business as opposed to big business may be achieved by refusing to sacrifice those industries which within our borders are highly competitive and the essence of free enterprise for the sake of benefiting giant corporations which need no protection. It has been argued regarding this measure that it will: 1. Promote the general welfare. 2. Promote world peace. We can all agree, ee, I feel sure, that one of the best measures or yardsticks of the contribution to the general welfare of this or any measure would be its effect on unemployment-our No. 1 problem. A break-down of figures on exports and imports clearly shows that on balance this so-called reciprocity robs us of man-hours of employ ment because the treaties foster the import of products with a higher labor content than is contained in the exports that are promoted. Comparison in your own minds of the items just outlined will readily indicate this to you without the necessity of a mass of figures. Moreover if we should obtain the proposed balance in dollars, and even if the products were equal in man-hour labor content, there is still a disparity to our disadvantage of 33 percent. This is because the price level here is substantially higher than abroad. This is a fact which is often lost sight of. When a million dollars' worth of certain foreign products arrive here, duty plus freight and handling charges make a landed cost of close to $1,500,000; hence for the manhours gained by the export of a million dollars' worth of automobiles, let us say, we lose the man-hours in $1,500,000 of displaced American products. It is not reciprocal. This "balanced dollar" exchange of products is not a balance of man-hours; and this brand of reciprocity adds to our problem of unemployment. The imports of woven-wool piece goods last year of 7,000,000 pounds is greater by far than any year in this decade. It compares with an average for prior years of this decade of 3,000,000 pounds. Strangely enough, in the paper just this morning, the New York Times, under the heading "Textile Industry Active in Britain" says that January's textile trade index is the highest level recorded in any January since the statistics were first compiled in 1934, and it is 26 points above the index for January 1939. And right along with that, in the Washington paper, Colonel Harrington says that the January recession is substantially greater than the seasonal increase in unemployment and more than a million persons added to the ranks of the unemployed during January. This import represents the full-time employment of 8,000 to 10,000 workers, who with their families become candidates for relief and a burden on the taxpayer as their work is taken from them and diverted to workers in a foreign country. Defenders of so-called reciprocity say frankly that they know that their treaties will deprive some people of their means of livelihood. The small units and their employees will be the first to be hurt. Senator LODGE. What do you say about the possibility that workers displaced in textiles would get into a better paying industry? Mr. GAUNT. That is a very fair question, Senator. It is unnecessary to tell the committee that we cannot uproot a man at once and move him from his small textile town to Detroit, and if you could — Senator VANDENBERG (interposing). I hope you don't. We have so many unemployed there now that we don't know what to do with them. Mr. GAUNT. Well, if you could, Senator, I think the textile industry has been somewhat maligned as to its level of wages. You know the level of wages in the textile industry is 59 cents an hour. That is before the recent increase just within the past few weeks of 10 percent. All right. Wages on automobiles may be at $1 an hour. That is fine. They say "Why not encourage automobiles and give up textiles, because that is a better industry?" We cannot do that. Perhaps this discrepancy in hour rates does not tell the whole story. Automobiles are very highly seasonal. You might get $1 an hour for a few months, but what is the yearly pay? Textiles, under normal |