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the cattle. That looks pretty smart for Mexico, but I do not seo how we benefit.
Mr. GEARHART. Mr. Clayton admitted that in his testimony before this committee. He pointed out that the Mexicans have a provision down there which prohibits any tariff similar to the one in the American Constitution. Finally, on further cross-examination he admitted that the State Department had immediately upon the cutting of the tariff in the trade agreement imposed an export tariff for an amount equal to the amount we cut off.
The effect of that which of course is an amazing one which staggers us because he cannot see any reason why it was done is that we still have the same barrier that we had before this same trade agreement and export transaction had occurred, the only difference being that half was in the United States and half in Mexico. Then there was the additional difference that half remained in the revenues that went to the United States and the other half to the Mexican revenues.
I do not know whether I should properly call it a bribe that he paid to Mexico or not. Furthermore, that was not only in respect to cattle but in regard to supplemental food.
There was this same situation, I understand, in the Venezuelan action in reference to petroleum. Those are the considerations that are had behind the silver curtains in the State Department which they never explain.
Mr. Linder, the number of witnesses here who want to testify is several and I do not think I should take any more time but I do want to conclude my exchanges with you by telling you that I am personally very grateful to you for your appearance and for the scholarly documents that you filed for incorporation in the record. They will be very very helpful to us in reaching conclusions in respect to the investigations we are now carrying on.
I think the State of Georgia and the commissioners are to be congratulated, and especially the farming interests who are in need of such representation at this particular time.
Mr. LINDER. Thank you, sir.
Mr. REED. Mr. Linder, am I wrong in my recollection that heretofore you appeared in behalf of Mr. Hanson and the southern commissioners of agriculture with reference to tax on oil and other protections, objecting to the imports of agricultural products. Have you not appeared? Mr. LINDER. You mean in opposition to the imports of oil? Mr. REED. Yes.
Mr. LINDER. Well, I have testified in opposition to imports of oil that take our market away from our domestic oils. I do not know that I have appeared on that specific question.
Mr. REED. What about the taxes on oils, cotton-seed oils, have you appeared on behalf of the southern commissioners?
Mr. LINDER. Yes, sir.
Mr. LINDER. In fact, I have been designated to represent the southern commissioners as to cotton, which of course includes cottonseed and cottonseed oil; that is still the record, No action has ever been taken by the commission to rescind that.
Mr. REED. You do not consider yourself to be an outlaw with the commissioners?
Mr. LINDER. No.
Mr. REED. You are not on unfriendly terms with the commissioners generally?
Mr. LINDER. No, sir; I am on the best terms in the world with them. I am a little short of patience sometimes with a fellow that is supposed to do something and does not do it.
Mr. REED. We all get that way I guess. Just before I pass on, I would like to have this made a part of the record. I will turn it in but I will read it here.
Yesterday the committee's attention was drawn to an omission from the document inserted in the record at my request by Secretary Clayton concerning the revised draft of the International Trade Organization charter issued by the State Department in December 1946. The entire document was inserted except a summary of the charter's provisions which had appeared in the original publication. However, upon insertion in the record of these hearings the summary was not included, as it should have been.
I now ask unanimous consent that the missing summary, contained in the original exhibit, be inserted in its proper place upon final publication of these hearings, which I understand it is mechanically possible to do. Are there any questions? We thank you, Mr. Linder.
Mr. LINDÈR. Thank you, sir.
Mr. REED. At this point in the record we will incorporate a newspaper clipping entitled, “Freedom in World Trade.”
(The information is as follows:)
(From the Atlanta (Ga.) Journal, April 10, 1947]
FREEDOM IN WORLD TRADE
American interests are vitally concerned in a conference of 18 nations which opens at Geneva, Thursday, April 9, to work out a general agreement for an exchange of tariff concessions and to adopt a charter for an International Trade Organization, If the effort succeeds, there will be a reduction of trade barriers in the larger part of the world and by the same token, a new impetus to international prosperity and peace. Common sense asserts and history affirms that when countries trade together to their mutual advantage they are not likely to make war upon each other, but that many military conflicts have their origin in economic disputes.
The conference now opening at Geneva was proposed by our Government and will influence profoundly the future of our business and political affairs. The United States, as the world's chief producer and creditor, must have foreign markets for its great surpluses of goods and therefore should encourage international commerce. This much is usually taken for granted except by isolationists and reactionaries who still think in terms of the Fordney-McCumber and the Smoot-Hawley tariffs. But more is involved than our business welfare. The character of our governmental system also is concerned. The continuance of free enterprise is at stake.
In his speech at Waco, Tex., a month ago, President Truman emphasized the fact that America cannot escape the influence and the consequence of trade policies in other countries. Impediments and restrictions which are applied there will inevitably be reflected here. These restrictions, as the President pointed out, range all the way from tariffs which discourage imports, to government controls under which "everything that comes into a country can be kept within limits predetermined by a central plan, so that those who import more than is permitted can be fined or jailed.”. Such regimentation is a dangerous trend in the present-day world. Soberly Mr Truman warned:
"If this trend is not reversed the Government of the United States will be under pressure, sooner or later, to use these same devices in the fight for markets and for raw materials. If the Government were to yield to this pressure, it would shortly find itself in the business of allocating foreign goods among importers and foreign markets among exporters and telling every trader what he could buy or
sell, and how much, and when, and where. This is precisely what we have been trying to get away from since the war. It is not the American way. It is not the way to peace.”
Without freedom of trade in our tied-together world, free enterprise in America will eventually yield to economic and political dictatorship. The conference at Geneva, if successful, will promote freedom for all who adhere to its policies. Its task is, first, to negotiate an agreement among its members for exchanges of concessions on tariffs and for the removal or reduction of other restrictive measures; and then to set up, within the UN framework, an International Trade Organization, which "would apply to commercial relationships the same principles of fair dealing which the United Nations applies to political affairs."
This is a great and difficult undertaking. It cannot succeed without American support, including that of Congress. But its objectives are so closely bound up with our own and the world's best interests that we as a people should stand by it. The alternative is a drift into economic warfare which would be fatal to prosperity and peace.
Mr. REED. Mr. Clemons?
STATEMENT OF N. J. HARDIN PETERSON, A REPRESENTATIVE
IN CONGRESS FROM THE STATE OF FLORIDA
Mr. PETERSON. Mr. Clemons and the other two gentlemen are here and they have asked me to appear as a spokesman for them.
Mr. ŘEED. We are very glad to have you here.
I just want to call attention to the fact that we were honored with the presence here of two United States Senators, Senator Holland and Senator Pepper who were appearing in connection with Mr. Peterson, the United States Representative from the State of Florida in regard to the sponge-fishing industry.
Mr. PETERSON. Mr. Chairman, I would like to introduce to the committee the two other gentlemen who signed the brief, Mr. Michael S. Bouchlas and Mr. Mike Samarkos. They have signed a rather comprehensive brief in regard to this matter. Mr. Samarkos is president of the Greek community there and Mr. Bouchlas is a member of the city council.
We would like to have this brief made a part of the record, Mr. Chairman.
Mr. REED. It is so ordered.
BRIEF OF TARPON SPRINGS SPONGE PRODUCERS IN SUPPORT or HIGHER TARIFF
Tarpon Springs, Fla., is the largest sponge market in the world. At the time of the filing of this brief there are approximately 200 boats engaged in the gathering of sponges in the Gulf of Mexico. There are two methods of taking spongesone by what is known as the diving method, where sponges are obtained by s diver--and the other known as the hooking method, where the sponges are taken by means of a hook fastened to a long pole. Those engaged in the hooking method can secure sponges in water approximately 25 feet deep and divers work in water up to an average of 75 feet deep. Like many other emergencies brought about by war conditions, the problem now facing the American industry is the sudden influx of sponges from the Mediterranean area, and we will demonstrate by the tables hereinafter referred to just how this problem has suddenly arisen.
1. As shown by exhibit A which is hereto attached, figures having been furnished by the Bureau of Customs, we find that very few sponges were imported from the Mediterranean area in 1944, but this increased to 31,266 pounds of the value of $273,967 in 1945, and in 1946 these figures skyrocketed to 209,945 pounds of the value of $1,935,615; and this poses a serious problem and is a direct threat to the American citizens engaged in the industry and those who have their lifetime savings invested in boats, packing-houses, and other associated facilities for the purpose of handling sponges. It is estimated that there are approximately 1,000 men interested directly in the production of sponges, that is, those who go to sea, and 2,500 interested indirectly who depend on the income derived from sponges for their livelihood.
II. Exhibit B which is hereto attached and made a part of this brief, shows the sales of large wool sponges; extra medium; medium and small wool; large wool rags; small medium; medium and small wool rags from the months of March through December of 1946, inclusive. This schedule was secured from the records of the Tarpon Springs Sponge Exchange and is a true representation of the sales of sponges, the kind and the amounts over this period of time. An analysis of these figures shows that the importation of sponges from the Mediterranean area has had a direct bearing on the sales and has tended to depress the price of same. Taking the column designated as “Totals and Averages" and breaking this up it is evident that for each 90-day period the prices have taken a decided drop. Averaging the prices for March, April, and May, we find that all sponges on the exchange brought an average of $171.13 per bunch; for the months of June, July, and August, the average dropped to $102.63, and for the last 4 months of September, October, November, and December, there was a further decline to $94.46 per bunch,
III. The Tarpon Springs Sponge Exchange also keeps a record as to the amount of sponges purchased by large business houses or individuals, as shown by exhibit C. It is an established fact that four of the largest sponge houses in America are the American Sponge & Chamois Co., located in New York; Greek-American Sponge Co., located in Chicago; James H. Rhodes & Co., located in Chicago; and Schroeder & Tremayne, located in St. Louis. We refer you to exhibit C showing the activities of these large business houses in buying sponges on the exchange for the years 1941 to 1946, inclusive. This record shows that the American Sponge & Chamois Co. in 1945 purchased sponges in the amount of $138,723.36, but in 1946 their purchases amounted to only $30,739; the Greek-American Sponge Co. in 1945 purchased sponges in the amount of $105,681 and bought nothing on the exchange in 1946; James R. Rhodes & Co., in 1945 purchased sponges in the amount of $223,642 and their purchases in 1946 amounted to $23,460; and Schroeder & Tremayne have bought nothing on the exchange since the year 1944, during which time they purchased sponges amounting to $80,199.25.
We submit that the reason for the dwindling of purchases by these four large houses is due to the fact that through their connections and business interests they are able to acquire and are now acquiring and selling and disposing of large amounts of sponges secured from foreign countries, to the detriment of the American industry, due to the fact that the existing tariff is not sufficient for the protection of the American sponge producers.
IV. In order to cite some specific instance as to the difficulty being encountered by people engaged in the sponge business to sell and dispose of the American products we call your attention to exhibit D in the form of an affidavit signed by N. J. Tsagaris. In his affidavit Mr. Tsagaris sets forth that he has been actively engaged in the sponge business and buying, selling, and distributing of sponges for more than 40 years and he very vividly sets out in the affidavit that it is almost impossible to sell or dispose of a Florida sponge due to the fact that the market is now flooded and overstocked with sponges produced from the Mediterranean area; that the foreign sponges which are competing directly with the American sponges are selling at a price far below that of the American sponge and it is next to impossible to sell an American sponge due to the fact that the Mediterranean sponge sells at a price approximately one-third that of the American sponge.
V. We have no quarrel with and are not offering any criticism toward any of the sponge houses but there are a number of dealers in Tarpon Springs, as shown by the list hereto attached marked exhibit E, who are in favor of foregoing and waiving any profits they might acquire by dealing in foreign sponges in order that the American industry might be protected. We do not infer nor does the list submitted represent all of the dealers in Tarpon Springs, but it does constitute a major portion of them.
VI. Again referring to exhibit A, showing the imports of sponges from the Mediterranean area, it is obvious that the sponges classified as other sponges”. are the ones that are tending to undermine and break down the American sponge industry. These sponges, samples of which are being filed with the committee, are the ones creating unfair competition with the American product. The present tariff on sheepswool sponge is 232 percent, yellow grass sponge 15 percent, hardhead sponge 742 percent, and we have been unable to determine just what tariff is being paid on other sponges,” but will endeavor to secure this information and file it with the committee.
VII. Our county government of Pinellas County (in which Tarpon Springs is located), realizing the seriousness of this situation, adopted a resolution requesting that some action be taken immediately for the protection of the industry, as shown by exhibit F; this was also done by the local government of the city of Tarpon Springs, as shown by exhibit G, as well as by the following organizations:
Greek Orthodox Community of Tarpon Springs: Exhibit H.
Because of the limited time we have not been able to assemble as much information as we would like to have filed, but we feel that there is enough in this brief to call the committee's attention to the fact that we have a very grave and serious problem and it is necessary that some action be taken immediately in order that the industry might be preserved and protected, and the following facts have been established:
(1) During the year 1946 a large amount of sponges were imported into this country;
(2) That report of the Tarpon Springs Sponge Exchange shows that during 1946 the price of sponges dropped from $171.13 per bunch to $94.46 per bunch;
(3) That during the year 1946 there was a decided drop in the purchase of sponges by companies who had heretofore furnished one of the biggest outlets;
(4) That from experience it is shown that it is very difficult to dispose of a domestic sponge due to the fact that the imported sponges, which compete directly with our wool sponges, are selling at a much lower price.
The problem is serious and we respectfully urge that some relief be given immediately. Respectfully submitted.
MICHAEL S. BOUCHLAR,
Committee Representing Sponge Producers. TARPON SPRINGS, Fla.
Exhibit A.— Imports of sponges from the Mediterranean area
186, 088 11,878
5,500 81, 281
10, 813 8,809
Syria Velvet sponges:
Grand total, Mediterranean area..
30,928 48, 295
10 748,000 281,587
23, 421 404, 324 50, 342 23,933