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MINUTES OF THE EXECUTIVE COMMITTEE OF THE FEDERAL COUNCIL OF THE CHURCHES

OF CHRIST IN AMERICA, MARCH 25, 1947 A meeting of the executive committee of the Federal Council of the Churches of Christ in America was held on March 25, 1947, at 10 o'clock, at 156 Fifth Ave. nue, New York.

The following members and official alternates were present :
Mr. Charles P. Taft, president, presiding.
Bishop John S. Stamm, vice president.

Northern Baptist Convention: Rev. Hugh C. Burr, Rev. William B. Lippbard, Rev. R. E. Nelson, Rev. Ivan Murray Rose, Rev. A, C. Thomas.

National Baptist Convention : Rev. T. S. Harten, Rer. W. H. Jernagin, Rer. I, A. Thomas.

Church of the Brethren : Rev. M. R. Zigler,

Congregational Christian Churches: Mr. Allen T. Burns, Rev. Frederick L. Fagley, Mr. Charles H. Seaver, Dean Luther A. Weigle.

Disciples of Christ : Rev. Hugh D. Darsie, President R. B. Montgomery, Mrs. E. V. Pugh.

Evangelical and Reformed Church : Rer. L. W. Goebel, Rev. William E. Lampe, Rev. George W. Richards.

Evangelical United Brethren Church : Bishop J. Balmer Showers.
Friends: Rer. W. Glenn Roberts.

Methodist Church: Mrs. J. D. Bragg, Rev. Marion J. Creeger, Miss Margaret Forsyth, Rev. Nolan B. Harmon, Jr., President J. Earl Moreland, Rev. Fred B. Newell, Bishop G. Bromley Oxnam, Mrs. Ellis H. Phillips, Rev. J. Manning Potts, Rev. 0. M. Walton," Mrs. R. C. Wright.

Colored Methodist Episcopal Church: Rev. Channing H. Tobias.
Moravian Church: Rev. Vernon W. Couillard, Rev. F. P. Stocker.

Presbyterian Church in the United States : Rer. Marion A. Boggs, President J. McDowell Richards.

Presbyterian Church in the United States of America : Rev. William B. Pugh.

Protestant Episcopal Church: Mr. John M. Glenn, Rer. Charles L. Gomph, Rt. Rev. Frank W. Sterrett.

Reformed Church in America: Rev. Theodore Thielpape, Rev. David Van Strien.

Russian Orthodox Church of North America : Mr. Ralph Montgomery Arkush.

United Lutheran Church (consultative) : Rey Zenan M. Corbé, Mr. S. Frederick Telleen.

United Presbyterian Church: Rev James M. Guthrie, Rev. Francis J. Scott.

Also Rev. Joseph C. Hazen, a representative of the Northern Baptist Convention upon the Federal Council; Rev Earl F. Adams, chairman of the intercouncil field department; Rev. E. G. Homrigbausen, chairman of the department of evangelism; Rev. James H. Franklin, Mr. Paul F. Heard, director of the Protestant Film Commission; and Rev. Kemper McComb, secretary of the Cincinnati Council of Churches.

Also the following representatives of affiliated, cooperating, and consultative bodies :

Association of Council Secretaries: Rev. J. Henry Carpenter.
Home Missions Council of North America ; Rev. Mark A. Dawber.
National Board of the YWCA: Mrs. Harrison Elliott.
National Council of the YMCA: Mr. Eugene E. Barnett.
United Stewardship Council: Rev. James E. Hoffman.

Also the following members of the Federal Council's staff: Rev. Jesse M. Bader, Rev. Roswell P. Barnes, Rev. Samuel McCrea Cavert, Rev. Deane Ed. wards, Rev. Richard M. Fagley, Mr. John L. Fortson, Rev. Cameron P. Hall, Rev. Seward Hiltner, Mr. John M. Johansen, Rev. F. Ernest Johnson, Mr. George Franklin Ketcham, Dr. Benson Y. Landis, Rev. J. Oscar Lee, Rev. Henry Smith Leiper, Rev. J. Quinter Miller, Rev. Phillips P. Moulton, Rev. John Oliver Nelson, Miss Anna M. Pyott, Miss Aenid A. Sanborn, Rev. Forrest C. Weir, Rev. L. Foster Wood.

1 Representing the interest of State and local Council of Churches.

The following wrote expressing regret at their inability to be present:

Rev. and Mrs. Henry Sloane Coffin, Rev. Ralph E. Diddendorfer, Dean Lynn Harold Hough, Rev. Alvert J. McCartney, Mr. Harper Sibley, Bishop J. H. Straughn, Rev. Winburn T. Thomas, Rev. Raymond C. Walker.

SUPPLEMENTARY STATEMENT

The Payne-Aldrich Tariff Act of 1909 provided for a double-column duty in which the United States Government was authorized to give the lower tariff if it got an equivalent concession from the other country. Difficulties quickly arose. France already was exercising considerable discrimination against the United States, and negotiations were undertaken with France to get them to give equivalent concessions for the cut from the high to the low of the two columns. Ambassador Jusserand took the position that while it was reciprocal, the cut that we asked was not equivalent. The two sides were never able to agree on equivalent cuts for the ones that we wanted.

In 1922 the House voted to continue the Payne-Aldrich pattern. The Senate amended the bill to provide for general most-favored-nation treatment. In conference, the House gave way, and the House managers reported to the House as follows:

"Sections 301 and 303 of the House bill provide for special negotiations whereby exclusive concessions may be given in the American tariff in return for special concessions from foreign countries. Section 302 of the House bill places in the hands of the President power to penalize the commerce of any foreign country which imposes on its import, including those coming from the United States, duties which he deems to be higher and reciprocally unequal and unreasonable.' Under the Senate amendment, however, the United States offers, under its tariff, equality of treatment to all nations, and at the same time insists that foreign nations grant to our exernal commerce equality of treatment; and the House recedes with an amendment rewriting subdivisions (e) and (f) and making further clerical changes.”

This was accepted by the House.

The State Department at that time had become involved in a study of the problem under the Jones Act of 1920, providing for reciprocal treatment of the merchant-marine matters. The Department began at once a study of foreign discriminations and the best way to overcome them.

The memorandum prepared read as follows:

(a) The period preceding the war (referring to the First World War) witnessed the expansion of American industrial production to a point exceeding the demand of the home market. Exportation became essential to industrial prosperity. Foreign markets in which no other exporter had an artificial advantage became, consequently, a sine qua non to continued industrial expansion. The vast increase in the actual and potential output of) American factories occasioned by the World War -augmented the need for foreign markets.

"(0) Under the commonly employed form of the limited or conditiopal mostfavored-nation clause its advantages become applicable only when a country, party to the treaty, is able to furnish compensation for equality of treatment equivalent to that which a third country has already paid for whatever favor has been accorded. The conditional most-favored-nation clause does not, it is thus seen, guarantee quality of treatment. It merely promises an opportunity to bargain for such treatment. In practice, thë ascertaining of what may constitute equivalent compensation is likely to be found impracticable. In recent studies of the commercial relations of the United States with France, Spain, Guatemala, and Salvador, this Office has been impressed with the inadequacy of such a clause to improve our commercial position.

*2. In view of the facts just set forth, it is obvious that an extensive and expanding foreign commerce needs a guaranteed equality of treatment which cannot be furnished by the conditional form of most-favored-nation clause. The unconditional most-favored-nation clause, and it only, is applicable to the practical situation which confronts the commerce of the United States today.

*3. The traditional policy of the United States has been, with much con

sistency, one of commercial equality and the open door. Our first commercial treaty, that of 1778 with France, sought to pry open, even if slightly, the barred door of commercial restrictions which resulted from the mercantilist conceptions then still dominant in economic thought. Because of the weakness of the United States, and because of the temporary economic and political conditions then obtaining, the limited most-favored-nation clause was the most practical instrument to serve our purpose. It was accordingly made use of and was continued in subsequent treaties and in the interpretation of treaties.

"With the changes which a century and a half have brought both at home and abroad, the object in view is now best, indeed only, obtainable through the unconditional most-favored-nation clause. To continue the old type of clause would be to insist upon form and apparent continuity at the sacrifice of practical advantage and real continuity of principle.

"4. The fairness and liberality implied in a system of unconditional mostfavored-nation treaties encourages commerce through the impetus it gives to good will and friendship among nations. Conditional most-favored-nation treatment permits and often results in special concessions to some, instead of equal treatment for all. Comparatively speaking, it arouses antagonism, promotes discord, creates a sense of unfairness, and tends in general to discourage commerce.

"5. The conditional form of most-favored-nation clause has no advantage over the unconditional except to a nation which wishes to obtain-and consequently must be willing to give-special concessions. Whilst tariff concessions obtained through reciprocity treaties seem to bring certain immediate advantages in the markets to which they apply, they also invite retaliation from those countries that are discriminated against in our markets. The experience of the United States in the past has been that special concessions secured by reciprocity transactions are not generally worth their cost.

“6. There is advantage in having uniformity of language and interpretation in the treaties of the leading nations of the world. The other leading nations, prior to the World War, had adopted, generally, the unconditional most-favorednation clause. It is the consensus of opinion that, in their postwar treaty development, these nations are gradually returning to the old unconditional system. The peculiar interpretation adopted by the United States has caused a number of serious diplomatic misunderstandings in the past. Uniformity would tend to eliminate conflict, prevent charges of unfairness, promote commerce, and improve international relations."

The conclusion reached by Mr. Hughes, and by President Harding on his recommendation, was that we should abandon the conditional or quid pro quo most-favored-nation clause and adopt the unconditional most-favored-nation treatment, with generalization to all nondiscriminating nations of benefits given to one nation.

The issue was squarely raised- in connection with the German commercial treaty that followed shortly afterward, and its approval after careful consideration by the Foreign Relations Committee and Senator Lodge, its chairman, was in favor of the position of the administration. The unconditional most. favored-nation principle was considered the most effective way to get rid of discriminations by other countries.

Mr. REED. I understood you to say that the organization represented the aggregate of about 27,000,000 ?

Mr. TAFT. It is 27,000,000 members of those churches. As I said, though, very firmly, I do not claim to speak for them, obviously.

Mr. REED. What proportion of that membership of 27,000,000 would you say

are women, have you any idea? Mr. Taft. This would have to be a guess. I think it is slightly larger than the proportion of women in the population, which I think is around 51 percent, but not very much more.

That does not mean that the men attend churches well, Mr. Reed. Mr. REED. I understand. I know from experience.

However, does the Methodist Church have a temperance organization ?

Mr. TAFT. I am sorry, I cannot answer for that. I am attorney for the Methodist Publishing House, among other activities, but I cannot speak for their organizations or other organizations, I am sorry.

Mr. REED. Would you say, generally speaking, they are fairly familiar with the provisions of the different agreements ?

Mr. Taft. I would think not; no, sir.

Mr. REED. Therefore, really, in endorsing the trade agreements, they are not altogether too familiar with it?

Mr. Tarr. I would agree with that entirely. They are endorsing a general principle

upon which they have been sold and they endorse it with great sincerity and with a very widespread selection of the membership, I have no question.

Mr. REED. I was wondering, because quite a number of the churches that you have named are quite active in temperance activities.

Mr. Taft. I can say this to you, sir, that they passed a resolution at the Federal Council meeting in Seattle. I do not have it with me, but it was passed after long consideration and discussion, and it is not definitely a prohibition resolution. It is a conference resolution and they have urged various measures such as better relations or regulations of advertising, but the churches today in the Federal Council at least do not stand officially for prohibition.

Mr. REED. However, did they take an interest in the trade agreements with Canada in 1936 and 1939 by which they lowered the duty on liquor—that is, whisky-from $5 per gallon to $2.50?

Mr. Taft. I do not think they took any steps—they certainly took none in the Federal Council until 1942, and back of that, as to the denominations, I do not know. I think there was some before that, but the Federal Council did not until 1942, I believe.

Mr. REED. You would not know, then, whether they were interested or took a vote or referendum or anything on the trade agreements particularly in which they lowered the tax from $4 per proof gallon on rum to $2.50 a gallon

Mr. Taft. I doubt if they knew anything about it at that time, sir.

Mr. REED. You would not, of course, know about the further one with Cuba, in 1939?

Mr. Taft. No, sir. I hope you will not tell them, Mr. Reed, that I was the rum czar in the Caribbean in 1934.

Mr. REED. As long as you were not a rum runner, that is all right.

Mr. Taft. I had to fix the quotas for rum to be admitted to the United States during the whisky drought.

Mr. REED. I wondered if all these good women who were interested in their children favored not only losing the revenue to the taxpayer and reducing the tax of $5 per gallon on gin to $.2.50

Mr. Taft. I can only say to you, sir, that until the whisky drought in the United States, the prohibition of the use of alcohol

for making liquor, that the imports from Cuba and the Caribbean of rum were almost invisible. They were very, very low.

Mr. REED. I can give you some figures on those in a little while. The CHAIRMAN. They are larger now.

Mr. Tart. They went up because you could not buy it here. They went up in 1 year, as far as Cuba is concerned, from 2,000,000 gallons to 14,000,000, and the following year they were building capacity for 75,000,000 gallons.

Mr. REED. Are you giving credit to the reciprocal trade agreements?

Mr. Taft. No, sir; not at all. I am giving it to the fact that the United States was giving every bit of alcohol it could get its hands on to making rubber.

Mr. REED. I was wondering to what extent the women were interested in brandy. They were reducing that from $5 a gallon to $2.50.

Mr. Taft. Which agreement is that?
Mr. REED. That is the one with France, and with Argentina.

Mr. TAFT. Well, French brandy certainly has not been an important factor in the liquor market at any time, although I hasten to say I do not drink-brandy at least.

Mr. REED. I do not charge you with drinking.
Mr. Taft. You understand I must protect my record here.

Mr. REED. Well, you are representing the churches here, I know you must be speaking for them here. Of course it is a loss of revenue of nearly, almost $1,000,000 as a result of the lowering of these taxes.

A very interesting thing to me is, I know the churches must have had some interest in the fact that they have on the list, over there at Geneva, to lower still further the tax on whisky, brandy, gin, rum, and other distilled spirits, champagne, vermouth, and other wines, with certain exceptions, beer and ale and other malt products.,

Of course, I canot tell to what extent. Of course, they had no particular referendum, with fine church organizations and the like, on this item.

- Mr. Taft. I believe their experience with prohibition has led them, to a very considerable degree, to the position that the promotion of temperance must be an educational process and it cannot be done by law. That is my own conviction, sir.

Mr. REED. Then they are using this method of letting in more liquor tó sort of educate the people not to use it, is that the idea?

Mr. Taft. No, sir; I would say that the imports of liquor that are involved in that particular case are a relatively small element to us, or to world trade, authough they are important as a source of dollars to the British.

Mr. Reed. Now, I am quite sure that as long as they are in this campaign of education, to handle the temperance question, while really the trade agreements and the production involved and the dollar value of the flood of liquor that came in here under the trade agreecents, I ask permission at this point to include official figures in that regard.

The CHAIRMAN. It is so ordered.

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