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commodities right now so that it is no new policy. It is then, I think we both agree, a matter of degree.

In the second place, on the ITO, we are about in the same position we had with the American States in the 1820's and the 1830's when it became necessary for people of good will to establish methods of trade between the States that were based on private trade and uniform laws so that a contract was good not only among the Original Thirteen Colonies, but the new States that were being added.

Now, if the ITO charter is looked at as a beginning and as a changeable thing to meet the flux of international business, and I mean private business, as it develops we can specifically point out by this committee in its report that the ITO charter is to be that kind of a fluid thing, to try it out and to see what international cooperation in trade and employment will produce. Do you think it is a completely impossible alternative? Is it completely implausible then to you?

Mr. ANTHONY. If you refer to the idea of an ITO as distinguished from this particular charter, it is not implausible. There is a fourth alternative which is that there is a possibility of starting afresh.

Now everybody says they are not going to renegotiate. We know the State Department is not going to disband. There are other channels that are open. There are treaties, there is even the possibility of getting a smaller body of agreement in which principles can be honored, so I think there is that fourth alternative and, conversely, I think the charter, if adopted, does not offer that wider horizon of which you speak. It offers too much scope for these retaliatory acts of other countries, to freeze them in a pattern in which they are now and to continue that pattern forever.

Mr. GORDON (presiding). Just a moment, Mr. Fulton. Mr. Carnahan, will you take the chair? I want to get recognition on the floor, and shall be back shortly to resume.

Mr. FULTON. I really think you are adding a lot to the discussion and I do not like to draw it out but I think your point of view, levelheaded thinking on the idea, will clarify a lot of the fuzzy thinking

that has come about.

May I point out you are not talking about shoes from Czechoslovakia or watches from Switzerland, you are talking about principles. On the level in which we are thinking we should be in the concept area of trying to reach something that will satisfy all the elements of the American people. I say again your thinking is excellent this morning and although I am disagreeing with quite a bit of it, it nevertheless brings out these facets of the argument.

Could I ask this: Do you not think it was possible, although the Union was not perfect to begin with in our country, for there first to be the union just as we had, and then to work out the elements, if Congress makes doubly clear that that is our concept of it?

Mr. ANTHONY. We had a relatively simple Constitution as compared to this charter. If, back there, we had tried to figure out all the traffic laws and put them in, and where everybody was going to be at a certain time and figure out all the ins and outs, we would have something that would be like this charter.

Mr. FULTON. That is a good point. Let us go on from there. In that day you had a simple age and let me tell you this, you are closer now to Berlin than you were then to Richmond, Va., sitting right

here at this table. Where you had Thirteen Colonies of a few million people, we are talking about 2,300,000,000 people in the world. So it has gotten tremendously more complicated.

Where you then had a few colonies that were isolated, today we are the center of the world right here in Washington on all these things that emanate from the United States.

Now, the thinking that you must do must therefore be much more complicated. The policies are more complicated, and the procedures set up under the policies are terrifically more complicated. It must of necessity be that way.

Eliminating the difference in degree, then-and I started to say that as a Republican I am a conservative, and would, therefore, rather than start with a starry-eyed view of policies, I would rather start with what I have got and work from there and convince people. The thing about the ITO charter is, it gives the forum and the opportunity to educate and convince people who are our like numbers in other countries.

The question is not on the particular individual business transaction, but it is how you and ourselves can best implement an approach to a climate of international trade that you businessmen can work in. Now, the differences to me then resolve themselves to this: You say that you favor some sort of an organization based on principles that are a little more separated from reality than I would. My idea is, start with what you have, get the best agreement you can, get your methods set up for conferences, and go from there.

You would say, on the other hand, turn this down and call another conference. And may I then, just as a matter of education between us, say this, that Mr. Javits and I were both at this conference and we had both been to Geneva before, and Czechoslovakia and Poland, and we talked to delegates of all the countries and many officials of various countries in Europe about international trade conditions.

We saw how nearly the conference came to breaking apart and we saw that we were up to the level of obtaining agreement, a common denominator of agreement.

I say that fairly and not partisanly, that I think we got as much of an agreement as it was possible to get. What factors do you see now because of time transpiring that would make agreement easier to get? Just the converse appears to me.

It looks like now it would be harder again.

Mr. ANTHONY. It depends on what kind of a document you envision. I like the idea of going to principles. Even though the world has changed today and is more complicated, I think the approach that was made when our Constitution was written is still pertinent, of taking first things first and going by easy stages and letting subsequent events determine what should be done about them-not try to perceive everything in advance and settle it and prejudge it.

Mr. Javits and yourself made an excellent report which, as you can see from our brief, is part of the basic documentation.

Mr. FULTON. I must say that your brief is made as an answer to our arguments.

Mr. ANTHONY. We followed it and felt that it was clarifying a great deal. But then we thought that you were somewhat overoptimistic and we perhaps were not as optimistic, so that it is a question, somewhat, of degree on that score.

Mr. BURLESON. Will the gentleman yield?

Mr. FULTON. Yes.

Mr. BURLESON. Did I understand you to say you were a conservative?

Mr. FULTON. A progressive conservative. May I ask the gentleman what he is?

Mr. BURLESON. I do not know. Under the loose terms which are being used today in defining "liberal," "conservative," "reactionary." and so forth, I do not know and refuse to be identified but will let my record on issues speak for itself.

Mr. ANTHONY. I would like to feel that we are all men of good will. Mr. FULTON. That is right.

Mr. CARNAHAN (presiding). If there is no further questioning, we thank you for your appearance and the very fine statement you have brought to the committee.

Mr. FULTON. Thank you very much.

Mr. ANTHONY. Thank you, Mr. Chairman.

Mr. CARNAHAN. Our next witness is Mr. Morris S. Rosenthal, president of the National Council of American Importers, Inc. Mr. Rosenthal, you may proceed as you wish.

STATEMENT OF MORRIS S. ROSENTHAL, PRESIDENT, NATIONAL COUNCIL OF AMERICAN IMPORTERS, INC.

Mr. ROSENTHAL. The National Council of American Importers welcomes the opportunity of expressing its endorsement of the Habana charter for an International Trade Organization. The council has its offices in New York and a membership of about 600 companies from 22 States that import more than 250 different classes of raw materials, foodstuffs, semiprocessed and manufactured goods. Some members of the council use the raw materials and semiprocessed goods that they import for further manufacturing in their own plants. Others. export as well as import.

At a meeting of the board of directors which is the governing body of the council, held on December 16, 1948, the following resolution was adopted:

The board of directors of the National Council of American Importers, Inc., favors legislation by the Congress authorizing the adherence of the United States to the International Trade Organization and acceptance of the proposed Habana Charter. The imperfections of the charter are recognized, but we believe that an International Trade Organization, functioning under the Economic and Social Council of the United Nations, is vital to international prosperity and peace. The United States and the world have more to gain than to lose by its acceptance, and it should be put into effect as soon as possible.

In urging congressional acceptance of the proposed charter, the board of directors of the National Council of American Importers also recommends that when the International Trade Organization comes into being, our United States delegation make every effort to obtain those changes that experience may indicate are necessary to clarify its provisions and improve its operations.

In my statement today, I would like to outline briefly why the directors of the National Council of American Importers, and I personally, as a businessman, support the Habana Charter and urge American participation in the International Trade Organization.

Even though the United Nations has not yet functioned as successfully as we would like, I am sure that there is no one in this room who

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would wish to abandon it. It does provide a meeting ground for representatives of all peoples in an attempt to bring order out of chaos and to work toward peace. As former Senator Warren Austin once said in reply to the criticism that there was nothing but talk at UN meetings, "when we stop talking at Lake Success, you start worrying." It has long been our thought that the first economic agency of the UN should have been an international trade organization. For all of us need goods for life itself. Food, clothing, and shelter are all vital to us. And so, while other agencies, such as the International Bank for Reconstruction and Development, and the International Monetary Fund, the Food and Agricultural Organization, the International Labor Organization, the World Health Organization, the Economic Commission for Europe, and still others dealing with civil aviation, postal union, maritime problems, and so forth, make a great contribution, there is as yet no specialized agency of the United Nations dealing with the fundamental international problems of the production and distribution of goods. And as all wealth stems from the production and distribution of goods, the other economic agencies cannot possibly function to their full advantage under the Economic and Social Council of the UN without an ITO to help solve the vital problems that affect the basic economic welfare of all nations.

It is no exaggeration to say that without the highly developed techniques and the capital goods of the industrial world, underdeveloped areas would have great difficulty in raising their standards of living. And without the great natural resources of these less industrialized countries, many peoples of the world would be hardpressed for sustenance. Even we Americans, who are singularly fortunate in possessing within our boundaries many of the raw materials needed and the expert know-how to use them which contribute toward our great prosperity, find ourselves lacking in some of the necessary basic materials which modern technology demands. Through the unalterable facts of geography and climate, the world, which is so split politically, is indissolubly bound together economically.

And yet when we look around at the world of trade as it exists, we find that the necessary flow of goods and services from nation to nation is obstructed at every turn by man-made barriers and hindrances. All of us who have studied the evolution of nations know some of the reasons for this contradictory state of affairs. We know that, despite the urgent need for trade, suspicions and antagonisms between counteries have led to a situation where liberal trade has become less and less of a reality.

We also know the immense social cost of this progressive paralysis of international commerce. Nations which have goods to sell find themselves shut out of foreign markets and therefore prevented from earning the means with which to pay their own way. And in this vicious game of "dog eat dog," nations which have been shut out of their neighbors' markets have also taken steps to prevent their neighbors in turn from gaining reasonable access to their own markets. Through quotas and restrictions and preferences and tariffs, the last few decades have seen the area of normal international exchange of goods and services constantly whittled down.

We feel strongly that there must be an end to this impoverishment of the world. For if we do not cut the red tape and halt the regi

mentation which have paralyzed international commerce, we can expect no end to the drift toward economic autarchy which we are all seeking to reverse. Experience has proven that, although it is easy for individual nations to raise barriers and to extend controls, it is almost impossible for them to remove these barriers and controls individually. It can only be done by the concerted, determined effort of the largest possible group of countries committed to a policy of commercial freedom-that is, multilateral and nondiscriminatory trade and provided with adequate administrative machinery for continuous consultation and negotiation toward that end.

It seems to us that the ITO is the agency which can do the most to accomplish this purpose. For it is too late for the world to wipe the slate clean and to institute a system of liberal trade which, while it may be attractive in theory, is not now workable in practice. Instead, we must face up squarely to the realities as they exist today. We cannot, for example, call for the immediate wholesale elimination of all those unhealthy practices-such as quantitative restrictions, exchange controls, preferences, and discriminatory tariffs-which exist because of deep-seated monetary maladjustments. Nor can we ask for a code of guaranteed international investment which would be unacceptable to the governments of underdeveloped countries that have their nationalistic pride and aims just as we have our own nationalistic objectives. We cannot, in a word, ask for the kind of international trade charter which we, ourselves, would like to write. Only if all nations were as sound economically and as industrially developed as we could an ideal charter be written. The point which I wish to stress is that those portions of the charter which we find too weak for our taste or too tolerant of certain trade practices which we hope eventually to eliminate must be weighed from the standpoint of the concrete difficulties which now exist, rather than in the light of idealistic theories of international trade which we cannot honestly expect will be adopted in the near future.

With this as a general statement of our reasons for supporting the Habana Charter, I should now like to call to your attention those features which I believe spell out a positive gain for American business and the principles upon which it is based, and which also serve to implement the ultimate objectives of the foreign economic policy of the United States. For we believe that the charter should not be accepted simply because it represents some measure of agreement on trade principles between 50 nations. It is the seriously considered position of the directors of the National Council of American Importers that the charter contains nothing that is positively hurtful to us. But that negative fact alone would not recommend it to us. It is our further firm conviction that the adoption of the Habana Charter for an International Trade Organization will mean for the United States immediate and long-range benefits both of an economic and political character.

Perhaps the greatest single contribution of the ITO is that, for the first time in history, it firmly commits the major trading nations to work together toward the lowering of excessive and unnecessary tariffs and the eventual elimination of other important restrictions to trade. Tariffs, preferences, restrictions-all these will be the objective of international discussions and agreements. Even more important, no new barriers may be added without the specific consent

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