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One of our resolutions of the AFBF dealing with this problem, if you will pardon me for digressing a minute, points out we are paying out tremendous sums on storage of these so-called surplus commodities. We have a depleted supply in the United States of many of our strategic minerals that this country needs badly in peace or in war. They could be stored with simply a barbed wire fence around them. India and a lot of these countries have tremendous tonnages of those materials, if their production were developed, which I think goes back to the private investment phase of Point 4. Then we would be far ahead, we think, to distribute our food to these countries and take payment in strategic materials, or anything that we can use to an advantage in our economy now or in the future. We believe that ITO will aid greatly in this effort.

Mr. CARNAHAN. Will the gentleman yield?

Mr. BURLESON. Yes.

Mr. CARNAHAN. You believe then there is ample room for us to increase our imports not to the unusual detriment of our own industries?

Mr. LYNN. I think so.

If we were importing at the same percentage as we were prewar, based on our gross national product now and prewar, we would close $2,000,000,000 of this gap.

We are not for imports to the extent that it absolutely wrecks any industry in the United States. We would be very unfair if we make any other statement because agriculture, we admit, has some protection under section 22 of the Agricultural Act of 1933, and in other legislation. But we do believe that there is a lot of goods available in the world that the United States could use that would not harm domestic industry.

Mr. CARNAHAN. I am glad to have you point that out. In your opinion, there is room to increase our imports not to the disadvantage of our own industry.

Mr. LYNN. I think that is right, sir.

Mr. MANSFIELD. Will the gentleman yield?

Mr. BURLESON. I yield.

Mr. MANSFIELD. You make the statement that farm income despite all these artificial props, has decreased approximately 22 percent in the last year or so, or since the war?

Mr. LYNN. I think it is 22 percent-that is from January 15, 1948, to January 15, 1950.

Mr. BURLESON. It was about 12 percent at the beginning of the last season or sometime in the latter part of last year and it has increased. Mr. LYNN. The figure of 22 percent sticks with me.

Mr. MANSFIELD. The figures are important. I understood a few months ago it was 20 percent and I am not surprised if it is 22 percent today. However, here you have the income of the farmers dropping. Now with all these artificial props-as that is all the Marshall plan is, insofar as the farm surpluses are concerned-if you did not have those props it would mean we would very largely have to put that much money in support prices to take care of the stuff which the farm is producing today; is that not correct?

Mr. LYNN. Or drastically reduce the production.
Mr. MANSFIELD. Cut your acreage?

Mr. LYNN. Yes.

Mr. BURLESON. By so doing, you are going to further lower farm income or purchasing power. That is the thing we are interested in. Mr. LYNN. That is right.

Mr. MANSFIELD. And this is an attempt to equate that differential and bring about some degree of equality to the farmers-speaking from the Farm Bureau standpoint-in the years after the overseasaid programs stop?

Mr. LYNN. I would agree but will add this: You know that we have been very aggressive in defeating legislation that would make ECA a "surplus-dumping program" for agriculture rather than a recovery program. We worked very hard to defeat our good friend Congressman Vorys' amendment that would have earmarked $1,000,000,000 to be used by CCC in disposal of agricultural surpluses.

Mr. MANSFIELD. There is question as to whether your assumption was correct. I do not believe it was. That is beside the point.

Mr. LYNN. The point I was making, Mr. Mansfield, is the fact that we do not look at ECA as a surplus-dumping program. However, it has helped move the agricultural products from this country. Mr. JUDD. Will the gentleman yield?

Mr. BURLESON. I yield.

Mr. JUDD. They do not look at it as that, but it is.

Mr. CARNAHAN. I think we should not refer to it as a dumping program. It has been making it possible for these commodities to go where they are needed. Certainly that is not dumping.

Mr. MANSFIELD. "Dumping" may have been the wrong word.

Mr. CARNAHAN. I do not accuse the witness. I think it is the wrong word. It was my friend Dr. Judd I was asking.

Chairman KEE. Is that all?

Mr. BURLESON. That is all, Mr. Chairman.

Mr. JUDD. "Dumping" usually implies getting rid of it at a lower price.

Mr. CARNAHAN. Yes; and that perhaps it is not needed.

Mr. JUDD. In effect, no matter how you describe it, it disposes of American products abroad which cannot be consumed here, and on an uneconomic basis because we have to pay for them ourselves. The people receiving them have not paid for them.

Mr. CARNAHAN. If it increases our imports it has done some good besides putting the products where they can be used.

Mr. JUDD. The statement in the Senate which was referred to was made by Senator Brewster and apparently attributed to the Federal Reserve Board. He says the dollar gap is less than $2,000,000,000. Instead of being 13 and 7, he says our exports were practically 9 and our imports were a little over 7 last year. It is a gap of $1,650,000,000. I will have to investigate this further because, if that is true, it is very significant. This table shows that our imports have ranged from 1921 down to the present from about 63 percent of our exports, which they were in 1938, to 85 percent, which is what they were in January of this year.

In January our imports were 85 percent of our exports. If you only have 15 percent as a trade gap it is a great deal different than 6 or 7 billion out of 13. Six billion out of thirteen is almost 50 percent. Let me ask you this question, Mr. Lynn: Are you in agriculture not going to suffer, no matter what happens? I mean suppose our tech

nical assistance program succeeds. It develops irrigation projects. The main commodities which these people are going to be able to produce in larger quantities will be agricultural commodities.

Mr. LYNN. We do not think that this will be harmful to United States agriculture. If you get these people well fed, let us say by their own production or from our exports of food, then they will want other things than food. They will want refrigerators again, if you please, and many other items from the United States, which will raise the income of the United States economy and the farmers will do all right if we maintain a high level of employment and income in America.

Mr. JUDD. But you, yourself, said that no matter what happened in the United States we are not going to buy more than 700,000,000 bushels of wheat. What are you going to do with that other 500,000,000 bushels?

Mr. LYNN. We think there is adequate market for that wheat if we can develop a mechanism to assist in ironing out some of these trade difficulties.

Mr. JUDD. I still do not see how that follows from your own statement. Suppose those people produce enough food so they are well fed, their standard of living comes up, they buy more of our industrial products, that makes more employment in the United States, but the workers who get increased total wages because of that high employment are not going to spend it for agricultural products; they are going to spend it for industrial products.

Mr. LYNN. If they get sufficient bread we can divert some of this acreage now in wheat into animal production; this means better food, which people begin to desire once they get enough of the basic foods: Potatoes, bread, carbohydrates. We think there is a great possibility for American agriculture to divert a lot of the acreage now in wheat and other crops to livestock production.

Mr. JUDD. May we settle on this: That certain traditional types of agriculture in the United States are going to suffer no matter what happens. I mean our wheat production and cotton, some of the basic commodities, cannot be sustained at their present level, even if this thing succeeds. But the farmer may be doing all right, as you put it, if he diversifies into other things where there can be an expanding market for his product on a profitable basis.

Mr. MANSFIELD. Would one of the ways these surpluses could be gotten rid of be considered in the light of the International Wheat Agreement, which takes care of about 185,000,000 bushels of wheat, as I recall it, produced in this country?

Mr. LYNN. Yes.

Mr. MANSFIELD. Would you say this is an extension of that idea applied to other products?

Mr. LYNN. I think definitely it is, sir. It brings in 54 nations to do just the type of thing we did under the wheat agreement.

Chairman KEE. Is that all, gentlemen?

Mr. Lynn, we thank you very much for your statement. I want to refer to the comment made by Dr. Judd with reference to the provision in the charter on employment. I agree with Dr. Judd that it is too optimistic for us to anticipate securing full and productive employment in any country. However, Mr. Lynn, I think the word "maximum" employment might very well be a better word to have used.

In the ECA bill which we recently passed through the House, we modified our declaration of purposes and called for "increased productivity and maximum employment." We used the language suggested by Dr. Judd in drafting that part of the declaration.

That provision, I understand, has not been considered by the Senate and is left out of the Senate bill, which will be a matter for consideration, I take it, by the conferees. I think it is a proper provision and should be in the bill.

I notice in your statement you referred to the fact that the 54 countries considering this proposed organization had discovered the fact that they could not live separately. That is rather encouraging, because it has taken the world several hundreds of years to discover what I believe old Sir William Blackstone stated in reference to marriage, over 300 years ago. In discussing the subject he said: "Man cannot live alone; indeed, he hath not the courage to do so." Evidently the world has just recently discovered the fact that nations cannot live separately; they have to live as a community, almost, because they not only do not have the will to separate-they do not have the courage to live alone.

Do you think that this ITO bill is in furtherance of the cause of bringing the world closer together as one great community?

Mr. LYNN. Yes, sir, just as the hope and objective of the United Nations is to do that. The American Farm Bureau believes that this is one step further in trying to do that job.

Chairman KEE. We thank you very much for your statement.
Mr. LYNN. Thank you, sir.

Chairman KEE. We have with us today Mr. W. H. Lukens, vice president of R. M. Hollingshead Corp. Mr. Lukens, you may proceed.

STATEMENT OF WILLIAM H. LUKENS, VICE PRESIDENT,

R. M. HOLLINGSHEAD CORP.

Mr. LUKENS. I appreciate the honor of appearing before this committee. My appearance is in a dual capacity.

First to convey to the committee the thoughts of the Foreign Traders Association of Philadelphia, an association comprising 423 members representing exporting, importing, manufacturing, and all allied foreign-trade service lines. I am a past president, present director, and present chairman of the governmental committee of that association.

Action taken by Foreign Traders Association of Philadelphia, Inc., on International Trade Organization:

That association has always taken a deep interest in policies relating to foreign trade and, accordingly, has studied the proposals for the establishment of an International Trade Organization.

When the New York draft of the proposal was discussed in 1947, our association prepared a brief that was presented by Mr. Bernard Douredoure who was then our president. This brief approved the general objectives of the New York draft while recognizing certain weaknesses in specific points. Our officers and committees have followed the successive draft proposals of Geneva and Habana and are still satisfied with the general objectives therein set forth. Accordingly, at a regular meeting of the association held on February 24, motion was made, seconded and passed, placing this association on record as favoring the adherence of the United States to the proposed International Trade Organization, and urging that adequate appropriation be made by Congress to

effectuate our adherence. This action was taken because we believe that only by positive efforts to reduce and minimize international trade barriers will world trade reach the magnitude that will benefit our own people as well as those of other nations.

The above resolution was conveyed to Secretary of Commerce Sawyer and to the following: Hon. Tom Connally, chairman, Senate Foreign Relations Committee; Hon. Edwin C. Johnson, chairman, Senate Interstate and Foreign Commerce Committee; Hon. Sol Bloom, chairman, House Foreign Affairs Committee; Hon. Robert Crosser, chairman, House Interstate and Foreign Commerce Committee.

Copies were sent to the Honorable Dean Acheson, Secretary of State; Senators Martin, Myers, Hendrickson, Smith, Frear, and Williams; Congressmen Barrett, Granahan, Scott, Chudoff, Green, Scott, James, Lichtenwalter, Dague, McConnell, Wolverton, Howell, and Boggs.

Second: Now, as an individual, I would like to testify in my own behalf.

My name is William H. Lukens. I am vice president-general sales manager of the R. M. Hollingshead Corp., of Camden, N. J. Our company employes approximately 800 people. We are manufacturers of automotive, industrial, and household maintenance products such as hydraulic-brake fluid, cleaning and degreasing compounds, insecticides, disinfectants, and, in general, items that are required to maintain in operation automotive vehicles. Prior to the war, we were shipping our goods to over 150 countries. Our foreign sales accounted for from 10 to 20 percent of our production. I have been engaged for approximately 35 years in overseas trade, 24 years with the Hollingshead Corp. At the present time, due to trade restrictions and shortage of dollar exchange, there remain but about 8 countries to which we can ship our goods without our customers obtaining import or exchange permits.

I am active in a number of export trade associations, among them being: Past president of the Overseas Automotive Club of New York, whose members represent automotive manufacturers responsible for about 80 percent of the exportation of after market automotive items; retiring chairman of the international trade committee of the National Standard Parts Association composed of about 500 automotive manufacturers and 1,000 automotive wholesalers; vice chairman of the export committee of Motor & Equipment Manufacturers Association, composed of approximately 300 members; American automotive manufacturers; past president and present director of the Foreign Traders Association of Philadelphia whose 400 members represent the manufacturing, exporting, banking, shipping, and insurance interests of the Philadelphia-Camden area; member of the administrative committee of the Foreign Credit Interchange Bureau, which is the export affiliation of the National Association of Credit Men; I am a member of a number of export advisory committees of the Office of International Trade of the Department of Commerce.

As an active foreign trader and a businessman, I wish to testify in behalf of the International Trade Organization. To my mind, creation of this organization is necessary if we are to protect American foreign trade and thereby American prosperity. I am here today because I believe that the Habana Charter has an important contribu

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