the lowest figure usually appearing during the years that reciprocal trading has been the order of the day." A review of the trade figure for the seven trade agreement countries reveals, on the contrary, that the low point in United States share in the total imports of these countries occurred in all but one instance before the trade agreement was signed with the country in question, as is indicated by the following table:

A marked increase in the United States share in the total imports of the countries with which trade agreements had been signed was apparent in the years following the dates the trade agreements became effective. The rise cannot be attributed entirely to the trade agreements program; other economic factors were obviously associated with the general increase in trade during the period, but it is believed that the evidence clearly indicates that trade agreements played a significant part.

An article entitled "Results Under the Trade Agreements Program During 1939," a reprint from Commerce Reports for February 17, 1940, a copy of which is attached, throws some light on this question.

Table 1 in that article indicates that United States exports to and imports from trade agreement countries showed a far greater gain during the years following the inception of the trade-agreements program than exports to and imports from nontrade agreement countries.

The figures submitted by Congressman Gearhart indicate that the United States share in the imports of the 13 countries he lists declined in the period 1935 through 1938 in comparison to the period 1926 through 1929 in the case of 11 countries and increased in the case of 2 countries. An analysis of the trade figures of the 11 countries in which a decline is noted would seem to show that the decline, rather than being associated in any way with the trade agreements program, is associated with high protective tariffs. It should be noted that the United States share in the imports of each of the countries cited started to decline during the period of high protective tariffs. In the case of the United Kingdom, the decline began in 1927; Italy in 1927; France in 1927; Canada in 1931; the Netherlands in 1928; Belgium in 1927; Denmark in 1927; Switzerland in 1930; Argentina in 1930; Brazil in 1927; and Germany in 1927.

As has been pointed out above, the decline in the United States share in the imports of the countries to which Congressman Gearhart refers occurred considerably before the inception of the trade agreements program. It is of interest to note that in the years 1935 through 1938 the United States share in the imports of the countries with which trade agreements were effective was, on an average, only 15.9 percent lower than in the period 1926 through 1929; whereas the United States share in the trade of the countries with whih trade agreements has not become effective fell an average of 36.8 percent. This is shown in the table attached, "Proportion of imports from the United States in the total import trade of selected countries 1926 to 1938, inclusive, and percentage change for trade agreement and nontrade agreement countries" in which the Congressman's figures have been used.

Proportion of imports from the United States in the total import trade of selected countries, 1926 to 1938, inclusive, and percentage change for trade agreement and nontrade agreement countries

STATEMENT OF ALBERT S. GOSS, MASTER OF THE NATIONAL GRANGE, WASHINGTON, D. C.

The CHAIRMAN. The next witness is Albert S. Goss, master of the National Grange.

Mr. Goss, will you take the chair and give your name to the reporter and the capacity in which you appear.

Mr. Goss.. Mr. Chairman, my name is Albert S. Goss, master of the National Grange. I appear representing the National Grange.

First, let me thank you for your indulgence in letting me appear this afternoon. The circumstances are such that I do have to catch a boat to Europe.

The CHAIRMAN. Have you copies of your remarks, Mr. Goss?
Mr. Goss. Yes.

The CHAIRMAN. The clerk will receive it then.

Mr. Goss. Mr. Chairman and members of the committee, the National Grange has a tariff policy built on many years of experience. It is quite simple. It is expressed in the slogan, "Tariff for one, tariff for all." We believe in the American market for the American farmer. We believe the American farmer should be protected against the competition of the coolie and peon labor of the most poverty-stricken nations on earth by a tariff based on the difference in the economically sound cost of production between home and abroad.

Let me explain what we mean by "economically sound cost of production."

We would not attempt to protect inefficient domestic production. Where by reason of climatic or soil conditions another nation enjoys

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natural advantages which would promote more efficient production than we can attain, we believe it generally a sound policy to import such products as can be raised most efficiently elsewhere. However, where such advantages are not natural, but where lower production costs are due to the low standards of living of the producers, or other artificial advantages, we believe the farmer is entitled to such protection as will enable him to maintain an American standard of living. In the case of essential commodities which are not produced in foreign countries in sufficiently dependable volume to supply our needs, we believe the American producer should be protected from intermittent importations which merely serve to create such instability in our markets that domestic producers cannot operate profitably. We must protect the producers of essential commodities who are prepared to operate on an economically sound basis.

We believe the same principle should apply to labor.

Let us illustrate.

We can raise bananas in Florida, but it would be ridiculous to erect a tariff against Central American bananas to meet the difference in production costs between Florida and Guatemala. On the other hand, the American dairyman is highly efficient, but cannot meet our high labor and other production costs in competition with the low living standards of many countries whose occasional or steady imports serve to drive the prices of dairy products to levels which our dairymen cannot meet and maintain a decent standard of living.

We are well aware of the theories of the free-traders who argue that if we import farm products in competition with domestically grown products, we will create credit balances in foreign countries thus enabling them to buy automobiles, refrigerators and radios, so that our industries would operate at high speed and create a domestic market for more farm products. The theory is fine, except it doesn't work. There are two chief reasons.

First, with every dollar of competing produce we bring in, we substitute a dollar of foreign purchasing power for a dollar of American farmer purchasing power. We get the worst of the swap. The American farmer spends his money here in America. Unfortunately a relatively small part of the dollar going to buy foreign produce actually reaches the farmer who produced it. A large part of the produce exported from foreign lands is raised on enormous estates by peon or similar labor under unspeakable living conditions, and much of the credits thus created remain in the hands of the wealthy and serve to increase their investments. It is a fact that the farmers in much of the rest of the world get a pitifully small share of the export sales values of what they produce.

Second, we may import less than 5 percent of our domestic consumption of a commodity and by that means drive the price down possibly 10 percent or 20 percent. Thus in order to gain $5 in foreign purchasing power of questionable value, we have reduced the purchasing power of our farmers $100 or $200 in the domestic market.

"But," the theorists argue, "the Nation gains because the people of our cities have bought their food cheaper." Let us look at that one. The first question to be answered is, "How long would the people of our cities have jobs if they undermine the purchasing power of those who create the basic wealth of the Nation?" We believe it sounder

to have full production at prices which have a reasonably equitable relationship to the general price level than to try to buy food or supplies at less than cost and thus destroy the producers. If the price of the domestic product is too high so that farmers engage in profiteering, foreign importations should come in to bring domestic prices down. The question is to what level should they be brought down. Somewhere there is an economic price level which is reasonably compensatory without being of a profiteering nature.

A tariff based on the economically sound difference in the cost of production between home and abroad will leave the American farmer subject to world competition and thus prevent profiteering, but would protect him from having to reduce his living standards to that of the rest of the world. That is the exact measure of protection he should have. The destruction of the purchasing power of the producers of the basic wealth upon which our whole economy rests can bring nothing but disaster upon all of us.

Unfortunately, there has sprung up a group of theorists who base their whole thinking on the false premise that if we can have urban prosperity farmers will automatically prosper. This totally ignores the fact that during the twenties when labor and industry enjoyed the greatest prosperity in history up to that time, this prosperity was not shared by agriculture because foreign markets kept domestic prices at a level too low to permit decent living standards for 40 percent of our people either engaged in agriculture or directly dependent upon farm trade for a livelihood.

These theorists blandly say, "If low food prices will contribute to urban prosperity, let more farmers move to town to regain a balance. Let cheap food come in and create better urban living conditions, and still more and more farmers move to our cities." This actually is the theory being taught our young folks in many of our colleges and universities by so-called farm economists.

Let us look at it.

Actually what these theorists are advocating is building urban prosperity by depressing food prices to less than the American economic cost of production, and driving American farmers off the land by bankruptcy to enjoy new-found jobs in the city, such jobs to be supported by foreign markets, such markets to be made possible by buying foreign food produced by peon labor. Such wild theories of America reforming the world, releasing the peons and coolies from the age-old servitude of the masters of the land, and transforming them into purchasers of automobiles and washing machines by transferring our farmers and those dependent upon them into industrial occupations, would be too grotesque for consideration were it not for the fact that some very influential and powerful groups are trying to put them into effect. Therefore, let us consider for a moment what the effect on America would be if their ideals could be carried out.

Goldsmith expressed this very well in The Deserted Village, when he said:

But a bold peasantry, their country's pride,

When once destroyed, can never be supplied.

I think there is something prophetic in that quotation that we all ought to take to heart.

The very fact that our cities cannot even maintain themselves and that without the support of a virile rural population their declining birth rate dooms them as self-supporting economic institutions should be indication enough of the superficiality of the "urbanites" with which these theorists have become infected. The social value of a strong, prosperous, virile rural population to any nation can be measured by so many well-recognized standards that a defense of a program for strengthening rather than weakening rural life ought not be even a subject for question.

By subjecting rural America to the unlimited competition of farmers existing under the lowest standards of living on earth is surely striking a vital blow at rural prosperity.

Thus we reject the theory of free trade and demand protection for the American farmers by tariffs sufficient to meet the economically sound cost of production between home and abroad.

It is constitutionally the responsibility of the Congress to establish the policies under which our trade shall be carried on. We are fully aware of the evils which have crept into tariff making by Congress, and of the impracticability of a deliberative body of over 500 members reaching sound conclusions on the thousands of individual items comprising the ordinary tariff measure. If Congress establishes sound principles, the application of these principles to individual commodities should be the work of technicians. The executive branch of government should administer the provisions of such a tariff law just as it administers other laws. In order to assure itself that the law is administered in accord with the intent and purpose of Congress, a report on all changes in tariff rates, with basic data justifying them, should be made long enough before the change takes effect to be reviewed by the Congress, or by a joint committee of each House, and Congress should reserve to itself the right to reject by a two-thirds vote of each House, or the right to postpone by a two-thirds vote of such joint committees, any proposed change within 30 days after submission. Such a safeguard would assure that the intent of Congress was being carried out.

Our reciprocal-trade agreements are built on no such sound theory. The theory behind them is that Congress cannot enact sound tariff legislation, because of log-rolling tendencies; therefore, the constitutional responsibility should be transferred to the Executive without any instructions as to policies, but with the simple safeguard that the last tariff act, which is condemned as unsound, be used as a guide and be modified up or down 75 percent. The fact that thousands of schedules have been decreased and not a single item increased, to my knowledge, would indicate either that the base is badly off balance or that the administrators have a free-trade outlook which ignores as far as possible the act of Congress.

Reasonable stability of policy with reference to tariffs is essential to world trade. If these policies are subject to being changed at will by any Secretary of State or with each change in the Secretary of State, uncertainty and instability are the inevitable result. We call attention to the fact that we have had four different Secretaries of State within less than 4 years, any one of whom could have made radical changes in our trade policies.

Wisely, Congress has been very cautious in the modification of tariff policies. Unfortunately for industry, labor, and agriculture,