Mr. AMMON. So far as we know, there is none. Northrop Aviation took over our California plant but we have no fear of that competition. I may break my arm on this but we feel that we have established ourselves in this industry to where it would take several years for any American manufacturer to tear us out of the leadership that we have established.

Mr. SIMPSON. I assume that you visualize a very large market for this product in the coming 10 years?

Mr. AMMON. Mr. Simpson, it is so new that I hate to dream too far. We have a very large investment and, as I say, this competition has come only in a few months and I do not believe I could have dreamed this far a year ago.

Mr. SIMPSON. As your business expands and your costs come down, you will be competitive to a degree with the automotive industry with respect to a light delivery vehicle?

Mr. AMMON. That is right; we are now. However, we do not think it is serious. In fact, we have some of the automobile people urging their own people and service stations to buy our own machines for fast and economic delivery because we have one that you can hook on the back bumper.

Mr. SIMPSON. Potentially, there is a vast field for expansion in your business!

Mr. AMMON. We think so.

From our stand

Mr. SIMPSON. Has the industry had difficulty in raising capital? Mr. AMMON. I am sure I do not know about that. point we have been able to finance our business.

Mr. SIMPSON. If you were assured of a large and increasing market, would it not be natural for you to seek to expand?

Mr. AMMON. Mr. Simpson, we have expanded from prewar production to 100 to 125 a day and are contemplating that it will go to 320 a day and that, I believe, is a pretty fair expansion.

Mr. SIMPSON. That is right, but the American businessman is always growing larger and larger and to the extent of a foreign competition providing uncertainties as to the future, I assume that there would be less of the expansion?

Mr. AMMON. That is right. And then we have the local taxation problems which you people have in your hands and those are the problems we have to face.

Mr. SIMPSON. Then for the future, as a result of coming here before your Representative, or in the less likely position in going down to the Committee of Reciprocity Information, if you should receive assurance one way or the other that your market domestically would remain pretty free of competition, I can envisage an extensive expansion of your business.

That is all, Mr. Chairman.

The CHAIRMAN. I would like to ask just one question.

Carrying Mr. Simpson's remark just a step further, you say that you have no trouble in financing at the present time, but assuming that through the creation of artificial stimulants the imports business would grow at the expense of your production, how would that affect your credit structure?

Mr. AMMON. Mr. Knutson, at my age I do not think I am going to gamble everything I have. I have a horror of getting hungry when

I am many years older. If the situation showed that the business did not have any future, I would pull out and, unfortunately, many people would be out of a job, which in Lincoln, Nebr., would mean

1,200.

The CHAIRMAN. Most of them home owners?

Mr. AMMON. Probably 50 percent of them are home owners and I believe two-thirds of them save money.

The CHAIRMAN. Mr. Forand may inquire.

Mr. FORAND. Mr. Ammon, I do not have many questions but there was one point brought out by Mr. Lynch in that memorandum of the State Department that leads me to this question. Is it a case where you are seeking an increase in the tariff or is it an adjustment?

If, as the State Department states, they are going to attempt to have the British tariff reduced, would that have the same effect as if we would raise our own tariff?

Mr. AMMON. Well, not quite. As I have explained, the English motorcycle business has been developed for a great many years because they have a greater market than we in this country. Definitely, we need a domestic tariff protection greater than the 10 or 15 percent.

Mr. FORAND. Would it not have the same effect if their tariffs were lowered as if ours were increased?

Mr. AMMON. We would be out of the market over there if we had only a 10 percent rate now.

Mr. FORAND. You do not think it would help?

Mr. AMMON. No; their costs are less than ours.

You cannot export

to a country that has a lower cost of production than this country. Mr. FORAND. That is all, Mr. Chairman.

The CHAIRMAN. Are there any further questions?

We thank you very much, Mr. Ammon.

Mr. AMMON. Mr. Chairman, I would like to thank you. Some of the suggestions I think are worthwhile and I am going on with them. I appreciate it.

STATEMENT OF THE TRUCK-TRAILER MANUFACTURERS ASSOCIATION SUBMITTED FOR INCLUSION IN THE RECORD IN LIEU OF A PERSONAL APPEARANCE, APRIL 29, 1947

Hon. HAROLD KNUTSON,

TRUCK-TRAILER MANUFACTURERS ASSOCIATION, INC.,
Washington 4, D. C., April 29, 1947.

Chairman, Ways and Means Committee, House of Representatives,

Washington, D. C.

DEAR MR. CHAIRMAN: This association wishes to bring to your attention the viewpoint of the truck-trailer industry in regard to the operation of the reciprocal trade agreements program. We respectfully request that the following statement be made a part of the record of your committee.

The members of our association manufacture over 85 percent of all the trucktrailers built in this country. Factory shipments last year totaled $151,384.063. There are approximately a quarter million commercial truck-trailers operated over the highways of this country. These trailers, together with the trucks and truck-tractors that pull them, carry substantially all of the for-hire motor freight tonnage of the country. Intercity miles operated by 1,626 class I carriers, as reported to the Interstate Commerce Commission increased 9.7 percent last year to 2,068,815.710 from 1,885.965,729 miles in 1945. Intercity tons hauled also increased 10.3 percent to 111,284,096 from 100,856,130 tons in 1945. This staggering total was in addition to uncounted millions of tons of commodities and materials handled in so-called private carrier or farm haulage operations.

At the present time only a small portion of our production of truck-trailers is being exported. According to the Department of Commerce records, exports of trailers in 1945 totaled $3,293,363 and in 1946 increased 263 percent to a total of $8,729,268. Present exports, moreover, are approximately eight times prewar totals. This growth in export volume is in line with the growth of our domestic business during the early years of truck-trailer development. We believe that the development of highway transportation by truck-trailers in many foreign countries and the corresponding development of our export business may continue to follow the pattern of our domestic business, provided some of the present severe deterrents to export trade may be mitigated.

Import restrictions of those countries now having insufficient dollar exchange are certainly our most serious handicap. This condition is especially difficult in the sterling bloc areas.

In general, we believe that truck-trailers should be subject to the same import and export duties that now exist, or will exist after negotiations, for motortrucks. We believe this to be a reasonable position as the truck-trailer serves the same purpose as the body of the truck.

We believe that there should be a difference, at least in certain countries, between completely built-up truck-trailers and shipments of parts for foreign assembly, known in the trade as completely knocked down or C. K. D. shipments. As a case in point, built-in trucks imported into Argentina are subject to a duty of about 48 percent which includes certain small incidential charges keyed to or dependent upon the basic duty, while assembly parts for trucks or completely knocked down (C. K. D.) trucks take a total duty of about 9 percent. In both cases, these are assessed on an ad valorem basis. However, truck-trailers imported into the Argentine are required to bear a 48 percent ad valorem duty regardless of the state of assembly or disassembly.

Our association made detailed suggestions in a hearing before the Committee on Reciprocal Information as to the duties, and other import restrictions which now hamper our trade in many sections of the world. We sincerely trust that in the negotiations now taking place in Geneva, Switzerland, it will be possible to alleviate, in a large measure, these hindrances to free flow of trade. In our statement, we called attention to certain tariffs which we believed were both fair and equitable and, in our opinion, should be continued.

Members of our industry believe that one of the most effective means of estab lishing world stability and lasting peace would be a vast expansion in international trade and, in many instances, in national trade between isolated sections of some of the less well developed countries of the world. If the type of transportation equipment now available and widely used in this country could be introduced into those sections of the world now lacking internal transportation facilities, there would be a greatly increased exchange of goods both within those countries and in international trade.

During the war, American vehicles, trucks, and truck-trailers moved tremendous tonnages of materials of all types in all parts of the world. In many cases, modern trucks and trailers intermingled in the traffic stream with modes of transportation as ancient as the pack animal. If this American transportation equipment, already tested at home and abroad, can be made avaialble all over the world, there need not be the recurring instances of abundance in one area and starvation in another. Adequate transportation facilities will immeasurably raise the standard of living throughout the world.

Much of our wartime equipment has remained abroad and is available to form the nucleus of a new transportation medium. In many sections of the world highway transportation is the logical answer to pressing economic problems. For the most part, the era of railroad empire building is past. Air freight and water-borne shipments are at best only a partial solution to the problem. Expanded motor transportation is the one means of fully utilizing all other services. The truck-trailer industry is currently in position to fully meet domestic demand for our product and can, in fact, rather promptly supply truck-trailers to meet all reasonable export requirements.

The development of more favorable tariffs with the 18 trade-agreement countries will foster the more rapid growth of a new and vastly more effective system of transportation which, in turn, will facilitate an increase in general commerce and the restoration of world prosperity.

In conclusion, we would like to stress the general position of our industry, which is that we are not asking for any special consideration or protection in our own United States import duties. We believe your committee should favor

whatever reductions can be made in tariffs on truck trailers and components, provided equivalent reductions are made in the tariffs of the other countries. In other words, we are heartily in accord with the principles of the reciprocal trade-agreements program insofar as they are applicable to the products of our industry.

Sincerely yours,

JOHN B. HULSE, Secretary-Manager.

The CHAIRMAN. The next witness is John Abbink, and the Chair informed that Mr. Thomas will substitute for Mr. Abbink.

STATEMENT OF EUGENE P. THOMAS, PRESIDENT, NATIONAL FOREIGN TRADE COUNCIL, INC., NEW YORK, N. Y.

Mr. THOMAS. My name is Eugene P. Thomas. I am president of the National Foreign Trade Council, Inc.

My voice is a little hoarse, but I will try to make it clear through the microphone.

I appreciate your allowing Mr. Hitchens to sit by.

The council comprises in its membership manufacturers, merchants, exporters and importers, rail, sea, and air-transportation interests, bankers, insurance underwriters, and others interested in the promotion and expansion of the Nation's foreign commerce.

The council has submitted to the committee and has asked to have incorporated as part of the official record of these hearings the brief presented by the council on December 19, 1946, at the hearings before the Committee for Reciprocity Information. That brief set forth certain considerations which, in the view of the council, should govern the negotiations by the United States of reciprocal-trade agreements with other countries.

The council desires, however, to present further to this committee reasons why, in the opinion of the council, the reciprocal-trade program should be carried out as presently contemplated and the objec tives of the revised draft charter of the proposed International Trade Organization should be accepted and implemented by the United States and other countries.

The National Foreign Trade Council, which was founded 33 years ago on May 28, 1914, at a convention in the city of Washington, to foster and promote the expansion of American foreign trade, adopted a resolution at that first national foreign trade convention urging the President and Secretary of State to undertake the negotiation of trade agreements which would assure to American producers advantages in foreign markets in return for consessions extended to other countries in the American market.

The council considered such agreements essential to the expansion of American foreign trade at that time, and it regards such agreements as more than ever necessary at the present time.

The interests of the United States and of the world as a whole. require a vast expansion not only in United States trade with the rest of the world but in total world trade.

So far as the United States is concerned, there is a great need for a large increase in both imports and exports. As regards the need for exports, recent comprehensive statistics regarding the extent to which American industry and agriculture are dependent on foreign outlets for their excess production are not available. But available data for

the period of high business prosperity in this country during the latter half of the 1920's show that this country depended on foreign markets for the disposition of a very large proportion of its production of certain classes of products.

Prior to the depression of the 1930's the United States normally was dependent upon foreign markets for the sale of from 50 to 60 percent of its cotton, 20 percent of its wheat, 40 percent of its tobacco, 35 percent of its lard, 15 percent of its apples, 40 percent of its dried fruits, 20 percent of its canned fruits, 30 percent of its office appliances, 8 percent of its lumber production, 13 percent of its automobiles, 30 percent of its lubricating oils, 40 percent of its refined copper, 30 percent of its sewing machines, 14 percent of its radio apparatus, and 25 percent of its agricultural machinery.

The depression and the war have changed some of the above percentages. The proportion of total United States production of movable goods exported dropped from 10 percent in 1929, to slightly less than 8 percent in 1937 and 1939; but the average of total national production exported and the percentages of production of individual industries and agriculture which must find foreign outlets in the years ahead will be greatly increased.

The productive capacity of the United States, already enormous before the war, will because of wartime expansion in productive facilities be capable of an output of goods and services greatly in excess of what can be consumed in this country in coming years at prices which will be profitable to American producers.

Comprehensive data are not available as to the expansion or increase in efficiency of American productive facilities during the war. But such information as is available indicates that this country is now capable of an output greatly in excess of that of the 1920's when American industry and agriculture were dependent on foreign markets for distribution of the high percentages of their production set forth above.

Some idea of the extent of expansion and increase in efficiency of American productive facilities in recent years may be gained by a few examples. According to estimates prepared by various commodity staff members of the United States Department of Commerce, the productive capacity of the steel industry increased from about 81.8 million ingot short tons in 1939 to approximately 91.4 million short tons in 1947, an increase of about 12 percent. Sales of machine tools in the largest prewar year totaled $220,000,000. Present capacity of the machine-tool industry on a one-shift basis is estimated at $600,000,000.

The farm machinery industry never reached full capacity before the war. However, in 1937, the highest prewar output year, $524,000,000 worth of tractors and farm equipment was produced.

In 1946 the production exceeded $1,000,000,000. This latter figure does not make allowance for an increase of about 30 percent in prices. However, capacity was far from being fully utilized due to shortages of materials and labor, strikes, and other stoppages. It is estimated, however, that the capacity of this industry has at least doubled.

The productive capacity of the American shoe manufacauring industry increased from approximately 500,000,000 pairs in 1929 to about 700,000,000 at the present time. Textile capacity has increased about 10 percent since 1939.