Hon. ROBERT L. DOUGHTON, FEDERAL RESERVE BANK OF ST. LOUIS, Ways and Means Committee, House of Representatives, Washington, D. C. DEAR MR. DOUGHTON: I am glad to submit the enclosed statement on behalf of full United States support for the proposed charter for an International Trade Organization. My delay in replying to your letter of April 17 has been due to my continued absence from the office during recent weeks while I have had to be in the field on Federal Reserve business. Since my commitments extend on for several weeks, it would be extremely difficult for me to appear before the committee, but I am glad to file this supporting brief for such use as you may wish to make of it. With highest regard, I am CHESTER C. DAVIS, President. BRIEF: CHARTER OF INTERNATIONAL TRADE ORGANIZATION Full participation by the United States in the International Trade Organization is in the best interest of this country and is essential to the successful operation of the organization. Economic cooperation among nations is necessary to the preservation of world peace. The Government and people of the United States are committed to a policy of leadership in the development of machinery for the peaceful settlement of international problems. The proposed International Trade Organization is an integral part of this machinery which already consists of the United Nations, the International Monetary Fund and the International Bank for Reconstruction and Development. The United States must join with other nations in working toward freer trade or run the risk of jeopardizing the success of other world political and financial organizations of which we are a member. The fundamental objective of the International Trade Organization is to promote the cooperative solution of international trade problems, particularly the elimination of artificial trade barriers which impede the flow of commerce among nations. Prior to and during World War II numerous trade-control devices were established by all countries. Imports and exports were subjected to arbitrary quota arrangements that were superimposed on a framework of tariffs and currency controls. Bilateral trade agreements were developed and to a large extent the concept of trade among nations was replaced by Government-directed trade between nations. In the emergency of war such controls were necessary. As permanent policy they are a threat to the postwar econom c recovery of the world and to the entire machinery that is being established to maintain peace. However, no one nation can be expected to remove such controls in the absence of concerted similar action by all the important trading nations. Only through the functioning of an international organization can we hope to eliminate existing impediments to world trade expansion and to prevent their establishment in the future. Reciprocal negotiations directed toward this aim are implicit in the International Trade Organization program. There is little likelihood that the proposed organization can function successfully without the support of the United States or that trade channels will be cleared except through international agreement. Thus, the apparent alternative to American participation is the continuation of quotas, tariffs, and bilateral trading arrangements and their extension to an increasing proportion of world trade. Although the United States could fight quotas with quotas, the desire of businessmen and others in this country is for less, not more, government control over trade. Yet the imposition of import and export regulations necessarily would lead to increased controls over our economy. Although the objectives of the International Trade Organization will not be achieved overnight, and despite its apparent weakenesses, the organization provides the machinery for gradual improvement in international trade conditions. I believe it should have full United States support. CHESTER C. DAVIS. Hon. HAROLD KNUTSON, Chairman, Ways and Means Committee, NEW YORK 15, N. Y., May 5, 1947. House of Representatives, Washington, D. C. DEAR MR. CONGRESSMAN: In response to your telegram to the American Bankers Association and to Mr. Doughton's letter to me of April 17, I am attaching herewith a memorandum which sets forth the attitude which the American Bankers Association has taken with respect to the negotiation of reciprocal trade agreements and the program for the establishment of an international trade organization. With best regards, Sincerely yours, W. RANDOLPH Burgess. RECIPROCAL TRADE PROGRAM AND THE ITO DEEMED ESSENTIAL TO SUCCESS OF WORLD BANK AND MONETARY FUND. Memorandum submitted by W. Randolph Burgess, chairman of the economic policy commission of the American Bankers Association. This memorandum is submitted in support of the program of the Department of State looking to the continuation of the program of negotiation of reciprocal trade agreements, and to the drafting of a charter for an international trade organization under the aegis of the United Nations, which is currently proceeding in Geneva, Switzerland. The general views of the American Bankers Association on this subject were set forth in a report by the Economic Policy Commission issued in 1943 and entitled "The Place of the United States in the Postwar Economy," in the course of which the committee, of which I was the chairman, dealt with the problem of lowering trade barriers. The Commission dealt with that subject in these words: "About 65 percent of the total foreign trade of the United States is carried on with the countries with which reciprocal trade agreements have been concluded. "The mechanism has thus been thoroughly tried. No revolutionary changes in this country's tariffs have been produced, but in many important respects the interchange of commodities with other countries has been made easier, andperhaps more important still-the long trend toward more and higher tariffs has been stopped. "In dealing with tariffs one point to remember is that particular groups who feel themselves penalized are more articulate than the consumers who reap the broad benefits of tariff easements, or even than the producer who gains through the relaxation of trade barriers abroad. "Apart from the Hull reciprocal trade agreement policy there is no outstanding single movement here or abroad toward freer trade. It is rather a matter of constant study, of constant alertness, and the use of every opportunity to negotiate reduction in impediments to trade. These impediments may of course exist in the form of monopolies and other private regulatory agreements as well as in the field of government controls. "In the effort to break down trade barriers we shall encounter conditions under which some countries must restrict their imports to conserve their supplies of foreign exchange, and so be able to maintain a sound balance of payments. It may be that additional markets can somewhere be opened up for the products of some such countries. It may be new export products can be found. Wartime changes in production will greatly affect the picture. For example, the United States may import less rubber and silk after the war, but a threatened exhaustion of oil and certain other mineral resources in this country may lead to increased imports in these latter categories, and there will be many other shifts in the channels and types of trade between markets. "The freeing of trade and thereby increasing its volume can be greatly aided by consistent effort by men of good will. It is possible that international organizations for conducting such studies and assisting in negotiations would be found feasible and helpful." The International Trade Organization is such an organization as the report had in mind. The necessity of such an organization was envisioned at Bretton Woods. The conferees, in section III of their report, recorded their conviction that such an organization must be created to clear up the obstacles to world trade before the objectives of the World Bank for Reconstruction and Development and the International Monetary Fund could be achieved. When the Bretton Woods proposals were before the Congress the necessity of supplementing the financial agreement with international understandings to 1 prevent the further erection of trade barriers, and in fact to lower these barriers, was discussed. In fact, the Senate inserted into the bill of enactment-H. R. 3314, 1945, an amendment recognizing this specific point. I may add that this amendment was inserted partly in response to suggestions made to the committee by Mr. Linn Hemingway and by me, representing the American Bankers Association. The amendment which was added was as follows: "FURTHER PROMOTION OF INTERNATIONAL ECONOMIC RELATIONS "SEC. 14. In the realization that additional measures of international economic cooperation are necessary to facilitate the expansion and balanced growth of international trade and render most effective the operations of the Fund and the Bank, it is hereby declared to be the policy of the United States to seek to bring about further agreement and cooperation among nations and international bodies, as soon as possible, on ways and means which will best reduce obstacles to and restrictions upon international trade, eliminate unfair trade practices, promote mutually advantageous commercial relations, and otherwise facilitate the expansion and balanced growth of international trade and promote the stability of international economic relations. In considering the policies of the United States in foreign lending and the policies of the Fund and the Bank, particularly in conducting exchange transactions, the Council and the United States representatives on the Fund and the Bank shall give careful consideration to the progress which has been made in achieving such agreement and cooperation." The negotiations now going on at Geneva are, therefore, an effort to bring to realization exactly the principles set forth by the Congress in passing the Bretton Woods legislation. Any failure by this country to support the charter wholeheartedly would frustrate the work of the World Bank to which we have subscribed $3,175,000,000, and of the Monetary Fund in which our quota is $2,755,000,000, and militate strongly against the success of our whole program for foreign economic cooperation to achieve an expanding world economy out of which a durable peace may be achieved. MAY 5, 1947. BOARD OF COMMISSIONERS OF THE PORT OF NEW ORLEANS NEW ORLEANS OFFICE, 2 CANAL STREET WASHINGTON 4, D. C., May 9, 1947. Congressman ROBERT L. DOUGHTON, House Ways and Means Committee, Washington, D. C. DEAR CONGRESSMAN DOUGHTON: For your information and record I am pleased to enclose herewith copies of telegrams and a letter directed to Congressman Harold Knutson in support of renewing the reciprocal trade agreements. I am mailing these to your attention with the request that you have them included in the records of these proceedings. Very truly yours, L. L. HARVEY, Executive General Agent, Washington 4, D. C. Hon. HAROLD KNUTSON, [Telegrams] MAY 2, 1947. Chairman, Ways and Means Committee, Washington, D. C.: Our institution and its membership strongly favor continuation of reciprocal trade agreements policy as direct method of facilitating international trade with other nations or as implementation of United States participation in the International Trade Organization. MICHAEL M. MORA, Director, World Trade Development Committee, International House. ΜΑΣ 2, 1947. Hon. HAROLD Knutson, Chairman, Ways and Means Committee, Washington, D. C.: Every means should be employed to continue practice of reciprocal trade agreements and we urge your committee to report favorably because the agree ments have served to stimulate international trading resulting in increased traffic in imports-exports vital to the economic life of every port and the port of New Orleans particularly. E. O. JEWELL, DEAR CONGRESSMAN KNUTSON: On behalf of the American Association of Port Authorities, I urge Congress to renew all of its reciprocal trade agreements to permit the resumption of our economic cooperation in our relations with foreign countries. Very truly yours, Hon. R. L. DoUGHTON, AMERICAN ASSOCIATION OF Port Authorities, INTERNATIONAL HARVESTER Co., Congress of the United States, House of Representatives, Washington, D. C. DEAR MR. DOUGHTON: I wish to acknowledge your letter of April 17 in connection with the hearings on the reciprocal trade agreements program and the proposed charter of the International Trade Organization, and I am sorry that I will be unable to attend these hearings. I have just returned to my office after a 7-week trip through Europe during which time I visited England, Sweden, Denmark, Belgium, France, and a short visit into the British Zone in Germany. I, personally, and I am quite sure the company of which I am an officer, would sincerely regret to see the reciprocal trade agreements program materially altered. When this program was being discussed prior to its passage by Congress, I addressed a letter to the Assistant Secretary of State, William Clayton, and for your information am attaching a copy of this statement. I very strongly believe in the elimination of many of the restrictions in international trade, and fully realize that international trade must be both buying and selling and unless the United States is prepared to purchase some goods from abroad it will be impossible for us to continue our exports at their present levels and certainly not possible to develop them further. Sincerely yours, G. C. HOYT. THE FIRST NATIONAL BANK OF CHICAGO, Hon. ROBT. L. DOUGHTON, Member, Committee on Ways and Means, Congress of the United States, Washington, D. C. My dear Congressman Doughton: I have your letter of April 17, inviting me to testify on the reciprocal trade agreements program before the Committee on Ways and Means. I wish it were possible for me to do so, but my engagements between now and May 3, when you expect to conclude the hearings, are such as to make it absolutely impossible for me to prepare an adequate statement in time or to go to Washington. It is perhaps needless to say that I am strongly in favor of the reciprocal trade agreements program. It seems to me obvious that we cannot be paid for our exports or our loans abroad except through the medium of imports. Sincerely yours, Hon. HAROLD KNUTSON, E. E. BROWN. THE GLOBE-WERNICKE Co., Cincinnati 12, Ohio, April 25, 1947. Chairman, House Ways and Means Committee, House of Representatives, DEAR MR. KNUTSON: We have been concerned over the apparent pressure by groups in opposition to the continuance of the reciprocal trade agreemert. It is evident this pressure is from people who do not have a world-wide view and how it affects the economy of the United States. We in this country have built up a very large industrial capacity and the only way this can be fully employed is through export trade. This export business must be continually developed and expanded sufficiently to keep our plants at capacity and in this way we will be giving a helping hand to foreign countries enabling them to become good customers of ours. The economy of those countries must be raised and they must be given an opportunity to sell to this country, so they in turn can buy from us. We are not in favor of "free" trade, but are in favor of "freer" trade. Tariffs throughout the world should be lowered through the reciprocal trade agreement, where each item is worked out very carefully and studied very thoroughly, to see that nothing is done to upset the economy of this country or any other country. This country was the leader in raising tariffs and was naturally followed by others. Any movement the other way can only be made by this country taking the lead, especially as we are now a creditor nation and forced to take the lead in world economics whether we like it or not. The Trade Agreements program has been in operation for 15 years, and in spite of the dire fears expressed of its possible effects, no serious injury has been suffered by any American industry. In fact those countries with whom we have had agreements increased their purchases from us 63 percent, whereas the countries with whom we had no agreements increased only 32 percent. We purchased from the countires with which we had agreements an increase of 22 percent and from those countries with no agreements the increase was 12 percent. It is impossible to believe that such a program could have the dire results some of its opponents claim after this experience and it is therefore very evident that for the benefit of all the citizens of the United States, and consequently for all the world, the reciprocal trade agreements program and the International Trade Organization should be wholeheartedly supported by our leaders and our people. We have wired you to this effect as we understand the hearings will be closed May 3. Sincerely yours, Hon. HAROLD KNUTSON, W. F. GAMMAGE, Manager, Export Department. MILLERS FALLS CO., Greenfield, Mass., April 19, 1947. House of Representatives, Washington, D. C. DEAR Mr. KNUTSON: I am taking the liberty of writing although I am not one of your constituents. I wish to refer to the reciprocal trade treaty program which has been in effect now for some years. As a manufacturer of products which are shipped to every country in the world, I do not like the idea of having this trade treaty program upset. Frankly, we in our business are in favor of reciprocal trade treaties. We would like to have tariffs maintained at no higher than present levels. In fact as things stand today, we would like to see tariffs lowered between this country and other countries. Perhaps you do not realize it but when things settle down, business between this country and Canada, for example, is going to be sadly hampered. We do a large business in Canada but as I see it at the moment, we are likely to lose a large part of that business if we raise tariffs. The same thing is true to a more or less degree with all countries with whom we do business. |