mittee representing some other country say, "You have nothing to offer; so we cannot reach any understanding with you." If I am going to make a trade I must have something to make a trade on. I cannot go to you and say, "I will sell you a piece of land that I do not have." You would not want to waste your time with me unless I have something to trade on.

I think that would be our experience if we should attempt to negotiate agreements with other countries as you suggest.

Mr. Goss. I think I am correctly informed that other nations have to report back their agreements for approval by their legislative bodies. They do not find much difficulty in making a trade. If those agreements were based upon definite principles, the representatives of Britain or Canada or Mexico would see that they are within the principles as set down by Congress within the law, and everybody could have access to them. I do not think you would run into that difficulty which you seem to fear.

Mr. DOUGHTON. I am sure you are perfectly sincere. I notice you lay considerable emphasis on the difference in the cost of production at home and abroad. Well, of course, that is hard to determine. We know a great many things can be produced cheaper abroad than here.

Another thing cannot be produced as cheaply because they do not have the machinery, do not have the technicians, and do not have the methods to produce as cheap as we can. But even in our country the cost of production differs from State to State. They can produce cotton in Oklahoma and Texas at perhaps half of what we can in North Carolina, but we have to take the same market price they do. They can produce wheat in the Dakotas, and perhaps in Kansas and other States, at half the cost we can.

Yet we do not get any different selling price based on the cost of production.

Mr. Goss. But, Mr. Doughton, if we give to the Tariff Commission the responsibility of determining what that average cost of production is, they cannot get it accurately, I will grant you, but they have to come up with a figure which is as near as we know how to calculate. Having come up with that figure, that is the figure which the executive branch of Government would use in its negotiations. That is the figure which they would apply to the principles laid out by Congress. The answer will be pretty clearly defined.

Mr. DOUGHTON. The subject of taxation and of tariffs as one form of taxation, has been one of discussion ever since I can remember, and ever since our Government was established. We have all tried to find. the best solution we can. You know there never has been a perfect plan of taxation, either tariff duties or internal revenue taxes.

We are trying to get all the light possible. I appreciate your very fair and frank discussion on this subject. It is very interesting to me. On my part, I thank you for coming here and giving us your opinion and your views on this subject which we are now considering. Mr. Goss. We appreciate your kindness and the opportunity, and particularly the members staying to this late hour.

Mr. WOODRUFF (presiding). Mr. Curtis.

Mr. CURTIS. Mr. Goss, not only is the hour late, but this must be a very busy day for you since you are leaving tomorrow. I just want to say that as a representative of an agricultural district, I appreciate

not only your appearance here but the force of your argument and the protection you would give to American farmers. The tariff commission reports that two-thirds of all of our imports are now duty-free by law. Of our agricultural imports, the percent of total dutiable goods is 80 percent. Of those, they have already reduced the tariff on 73 percent. Our trade with many countries, principally South America, has been to trade away the farmers' market, to make a little market for certain industrialists. I do thank you for coming here.

Mr. WOODRUFF (presiding). Mr. Martin.

Mr. MARTIN. Mr. Goss, I am glad to have your views regarding reciprocal trade. I know you speak for a very large number of farmers. You represent their views very accurately. I cannot help but compare your views with Mr. O'Neal's on the matter of protection to the farmers. In my discussion with Mr. O'Neal I discovered that he was a great advocate of control by quotas. I find by your statement that you are a great advocate of control by tariff. Mr. O'Neal has gone to Europe and he stated here in answer to my questioning or my discussion that he was going to make it a part of his business while over there to put in whatever word he could in behalf of establishing protection to agriculture by the quota system.

I quizzed Mr. Clayton on the matter of quotas. I will not repeat the quotation here now from Mr. Clayton's testimony. You can find it in part 1 of our proceedings. He told me flatly that the whole policy of the present State Department was to get away from the quota system. He did not make any ifs or ands about it. It seems to me with Clayton so definitely stating against quotas, that you are a little better off in this matter than Mr. O'Neal as far as hope for the future is concerned. I myself begin to wonder whether the State Department is in favor of quotas or tariff, either one. But I believe Mr. Clayton's flat statement that he is very much opposed to any extension of quota system is sufficient. I know why all your farm organizations are in the dilemma you are in. I believe I know why. All agriculture is on the defensive in this whole international trade situation. We see a probable increase in international trade on competitive types of agricultural import from excessively low-wage areas. The world is not as highly industrialized as America is and the pressure is coming on agriculture and the importation of agricultural products. I am not at all surprised. You and Mr. O'Neal are both struggling and your organizations are struggling for some method of protecting American agriculture against what is impending. You just have a different approach to it as I get your position.

Mr. Goss. It is quite a different approach. By the way, Mr. O'Neal missed his boat, and he is not going to be there, which I regret. Our approach is quite a little different from that of the American Farm Bureau on this. Our approach is that we want the Congress, which is made up of people from all sections of the country, to be in a position to translate into law those policies which will protect our country as a whole. We do not want to have one agency put in a position of trading off our shirts, if it seems possible to get a trade advantage somewhere.

Mr. MARTIN. I know that is the very point that is making a lot of the farmers nervous about the development in this so-called reciprocal trade. Very few farmers are opposed to reciprocity. The fact of the matter is thev are almost unanimouslv in favor of some kind of

reciprocity. But they have come to question what is labeled as reciprocity in this field.

Mr. Goss. I think that is a point, Mr. Martin. If we have no fear of a Congress establishing policies which will trade off the shirts of the farmers, but in time some executive we have seen who has little knowledge of the problems of agriculture and we do not like to see them put in the position of making such trades.

Mr. MARTIN. I am sure that if I went into this reciprocal trade program with the same reckless abandon that some of our State Department representatives have gone into it, the farmers of my district would find a very early correction by substituting another man's service for mine, representing the First District of Iowa. To that extent, I agree with you wholeheartedly.

Mr. Goss. I wonder if I might reverse the procedure and ask the Representative from Iowa a question; that is, Do you find that the farmers of Iowa are in favor of reciprocal trade agreements, as they have been enacted?

Mr. MARTIN. Not to my understanding. They want reciprocal trade, but they are very nervous and very ill at ease because of the pressure of this impending competition from areas of exceedingly low-wage countries. The coming in of raw materials to make up this dollar balance that is called for so strongly by the State Department today, the farmers can see that too much of that dollar balance in America is going to come against their interests unless they are adequately protected.

Mr. Goss. That is the same word we have from the farmers of Iowa. Mr. MARTIN. But they are all for reciprocity, and they are not opposed to reciprocal trade, if it is reciprocal.

Mr. Goss. That is our policy, too.

The CHAIRMAN. That was a very good statement, Mr. Goss. We are certainly pleased to have had you before us. Let me express the hope that you will have a pleasant trip abroad and a safe return. We count you one of the good friends of the American farmer.

Mr. Goss. Thank you, Mr. Chairman. I appreciate that. I appreciate the opportunity to come before you and the inconvenience the committee has put itself to, to make it possible.

The CHAIRMAN. We are always at the beck and call of those who wish to have us hear their cause. You have made a wonderful statement. We thank you.

The committee stands adjourned until 10 o'clock tomorrow.

(Whereupon, at 5:15 p. m., the hearing was adjourned to 10 a. m., Tuesday, April 29, 1947.)

99616-47-pt. 2- -50

RECIPROCAL TRADE AGREEMENTS PROGRAM

TUESDAY, APRIL 29, 1947

HOUSE OF REPRESENTATIVES,
COMMITTEE ON WAYS AND MEANS,

Washington, D. C.

The committee met at 10 a. m., pursuant to adjournment, in the hearing room of the Committee on Ways and Means, New House Office Building, Hon. Harold Knutson, chairman, presiding.

The CHAIRMAN. The committee will come to order.

The first witness this morning is Mr. Charles D. Ammon, president, Cushman Motor Works, Lincoln, Nebr.

Is Mr. Ammon here?

STATEMENT OF CHARLES D. AMMON, PRESIDENT, CUSHMAN MOTOR WORKS, LINCOLN, NEBR.

The CHAIRMAN. Let the record show that Senator Hugh Butler, of Nebraska, appeared in support of Mr. Ammon.

Mr. Ammon, will you take the chair and give the capacity in which you appear?

Mr. AMMON. My name is Charles D. Ammon and I am president of the Cushman Motor Works, of Lincoln, Nebr.

The CHAIRMAN. You may proceed, Mr. Ammon.

Mr. AMMON. Mr. Chairman, I am a manufacturer of a small light motorcycle which we call the motor scooter. There are really two types of motorcycles made in this country and imported into this country. I am going to read from a very recent report from the Department of Commerce who list the heavy motorcycle, or type that has been made for so long, and having a cubic-inch capacity of 45 to 74 inches with a weight of over 500 pounds.

Up to 1937, this type of machine accounted for practically all of the production of motorcycles in this country and the production ranged from 7,000 to 25,000 a year with an average of about 15,000.

About 1936 to 1937 three factories introduced at about the same time a machine of the type of ours, really a light motorcycle. There have been some attempts prior to that time to market lighter motorcycles but they had not been successfully done. Up to that time there had never been imported into this country more than 300 or 400 motorcycles a year and of this light type, I think there was never 100 a year. At that time those foreign-made machines sold for $125 to $150 and I would be very glad if you would remember that because it is a contrast with the present situation.

Those foreign manufacturers made constructive effort to produce business. There has been developed since that time in the country a