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OF THE UNITED STATES ON BEHALF OF THE NEW YORK, NEW JERSEY, AND CONNECTICUT LEAGUES, BEFORE THE SPECIAL PANEL OF THE DEPARTMENT OF STATE, New York, N. Y., FEBRUARY 27, 1947 I am speaking for the League of Women Voters, a nonpartisan organization whose members are deeply concerned with strengthening the hope of world peace by expanding world trade and employment. For 27 years the league has been providing facts and techniques to enable citizens in communities widely scattered throughout the United States to act effectively in the public interest on all levels of government. Recently our national president, Miss Strauss, appeared at hearings in Washington, D. C. I am here today to speak for our members in this area.

In the memo “Trade, jobs, and peace” which the League of Women Voters has been distributing for the past year, we stated: “Prosperity does not necessarily bring peace.

But it can be said with assurance that the reverse of prosperity—that is, depression, unemployment, hunger, and frustration make a fertile seedbed for dictatorship and war.

This concern with the economic aspect of international relations dates back to 1924, when the League of Women Voters supported a tariff policy for the general welfare rather than for any special group or sectional interest. Since 1936 the league has worked consistently for the reciprocal trade agreements program.

The United States cannot be an island of prosperity in a sea of poverty. This is true on grounds of humanity and self-interest, both. Our industry needs foreign markets if it is to prosper. As a creditor Nation, we must have customers abroad who are supplied with dollars. This in the long run depends upon our permitting the import of foreign goods into this country. We are advocating not complete free trade, but the continued gradual reduction of tariff barriers, accompanied by and in return for the removal of other restraints and barriers, such as quotas, embargoes, exchange control, and preferences.

It is argued that we need high tariffs to protect the standard of living of the American working man against competition with cheap foreign labor. Experience has shown however that it is possible to pay higher eages and still compete profitably with foreign manufacturers because of increased efficiency, technological improvements, and mass production, all of which reduce unit costs.

If we examine the local picture, in this area, we find that New York, Connecticut, and New Jersey have all profited by the general Nation-wide increase in the volume of trade in those products affected by the trade agreements. Textiles and industrial machinery are of special interest to all three States, and on these, concessions such as liberalization of quotas and reduced duties were obtained. It is significant that from 1934-35 to 1938–39 both our imports from and our exports to countries with which we had trade agreements increased approximately twice as much as our trade with countries with which we had no agreements. In one upstate New York manufacturing city the trade agreements are supported by manufacturers of washing machines, typewriters and air-conditioners, while the only dissenting voice we have heard comes from a manufacturer of pottery..

We are here today to endorse the participation of the United States in the forthcoming international conference to secure, under the existing Trade Agreements Act, further tariff reductions, removal of other barriers and elimination of discriminatory practices. It is hoped that there may result multilateral agreements and a general broadening and strengthening of the program. Since this is the declared policy of our Government, it would seem superfluous to restate our position were it not for the recent irresponsible attacks by private individuals and members of the United States Congress (of both major parties). Bi-partisan support of our foreign policy is mere lip-service unless it includes economic as well as political measures.

Our second purpose in coming here is to endorse the proposed international trade organization. We strongly urge our representatives to the conference whicb we understand is to be held in Geneva in April, to negotiate along the lines of the principles set forth in the suggested charter, and also to promote plans for a United Nations conference on trade and employment.

This is an opportunity for the United States to use tariff reduction, which is our best bargaining power, for the general welfare including our own. It is also an opportunity to prove our good faith and our renunciation of economic isolationism. What we do now may determine whether the world's economic problems are to be settled by cut-throat competition and warfare, or by give and take

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around a conference table. Because of its size and comparative immunity from the war's devastation, the United States has a solemn responsibility to lead the way. The League of Women Voters has urged that our country accept its full share of responsibility for an expanding world economy with equal opportunity and an improved standard of living for all. Specifically, we have supported: The Lend-Lease agreements, UNRRA, FAO, the International Bank and Fund, the concept of the economic and social council as incorporated in the United Nations Charter, and the loan to Britain. Logically, the next step is an ITO: a centralized agency to integrate and coordinate the efforts of all nations to solve commercial problems on a mutually advantageous basis. After the first World War, the United States evaded its political responsibility. This time it will not be enough merely to have joined the United Nations. We cannot evade our international economic responsibilities without jeopardizing all hope of world peace.

Mr. REED. Mr. Chairman?
The CHAIRMAN. Mr. Reed.

Mr. REED. At the conclusion of Secretary Clayton's testimony, I would like to insert in the record some views on the subject of trade agreements.

(See statement by Mr. Reed, p. 254.) The CHAIRMAN. Mr. Doughton, you are recognized. Mr. Doughton. I have finished, Mr. Chairman. The CHAIRMAN. Mr. Cooper? Mr. COOPER. Mr. Chairman, I would like to ask a question or two for information.

Mr. Secretary, the International Trade Organization is an organization under the United Nations, is it not?

Mr. CLAYTON. Yes, sir.

Mr. COOPER. Of course, the United Nations was originated and organized at the San Francisco Conference?

Mr. CLAYTON. Yes, sir.
Mr. Cooper. And has been approved by Congress,
Mr. CLAYTON. That is right.

Mr. COOPER. And this organization referred to as the ITO is one of the agencies or organizations of the United Nations?

Mr. CLAYTON. Yes, sir. It is expected to be one of the specialized agencies of the United Nations, sir, operating through the Economic and Social Council of the United Nations.

Mr. COOPER. And this International Trade Organization what is to meet in Geneva?

Mr. Clayton. No, sir. The meeting in Geneva will be attended by representatives of 18 countries to do two things. One is to further discuss and attempt to agree upon a charter for the International Trade Organization which subsequently will be submitted to the Congress or the parliaments of the different countries, and the other is to negotiate among those 18 countries reciprocal trade agreements having to do with elimination of discriminations in trade and the reduction of barriers to international trade.

Mr. COOPER. Well, is it contemplated that these 18 nations meeting there in Geneva will endeavor to negotiate trade agreements between themselves?

Mr. CLAYTON. That is correct; yes, sir.

Mr. COOPER. So there will not be just trade agreements between the United States and those 18 nations, but the other nations may all negotiate among themselves, too?

Mr. CLAYTON. That is correct; yes, sir.

Mr. COOPER. I see. All right. Thank you.
The CHAIRMAN. Mr. Reed?

Mr. REED. Would you mind, Mr. Secretary, giving us the names of the 18 countries that are meeting at Geneva, Switzerland?

Mr. CLAYTON. That is Australia, Belgium, Brazil, Canada, Chile, China, Cuba, Czechoslovakia, France, India, Lebanon, Luxemburg, Netherlands, New Zealand, Norway, Union of South Africa, United Kingdom, and the United States.

Mr. REED. Now, have you drawn up a tentative charter?
Mr. CLAYTON. Yes, sir.
Mr. REED. For that organization?
Mr. CLAYTON. Yes, sir.

Mr. REED. And would you mind putting that in the record? Have you got it there?

Mr. CLAYTON. Yes, sir.
Mr. REED. Is it very long?

Mr. Clayton. The charter, itself, is approximately 50 printed pages.

The CHAIRMAN. Does the gentleman wish to insert it at this point?

Mr. REED. I would like to ask a few questions further before I have it inserted.

Has this charter been yet submitted to the other countries for consideration?

Mr. CLAYTON. Yes, sir.
Mr. REED. Each one of these countries that you have named?

Mr. CLAYTON. These countries, Mr. Reed, representatives of which are meeting in Geneva starting on the 10th of April, met in London on the 15th of last October and remained in session until the end of November, for the principal purpose of trying to agree upon the provisions of a charter for the International Trade Organization, and the charter which we now have, or the proposed charter which we now have, was drawn up by representatives of those 18 nations in London and is now to be considered again at Geneva, in addition to the negotiation of reciprocal trade agreements between those countries.

The reason for our having a second meeting is that after they agreed in London, these different representatives wanted to go back home, submit the proposed charters to the people of their countries, and get their reactions, their criticisms, and suggestions, and then come together again for the purpose of formalizing the thing finally for submission to a subsequent world conference which will be called for the fall of 1947 and at which representatives of all countries belonging to the United Nations are expected to be present.

Mr. Reed. In the meeting at London, when you went to London, I suppose you took over at that time the proposal of this country?

Mr. CLAYTON. I am sorry, sir. I did not understand that.

Mr. REED. You took over a proposed charter as formulated here to London; is that right?

Mr. CLAYTON. Yes, sir.

Mr. REED. Then, were each of the 18 nations represented there officially?

Mr. CLAYTON. Yes, sir.

Mr. REED. What were the main changes that were made in the proposal as first proposed in this country and taken to London?

Mr. CLAYTON. I will have to get those out for you in proper order, Mr. Reed, and give them to you later.

Mr. REED. I would like to have the charter that you prepared to take to London put in the record here, and then I would like to have the charter as modified in London follow that.

Mr. Clayton. We will file with the reporter copies of both documents.

(The documents are as follows:)

[The suggested charter was submitted to the Preparatory Committee of the International Conference on Trade and Employment, which held its first meeting in London between October 15 and November 26, 1946. The Preparatory Committee used the suggested charter as the main basis for its discussion.)

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An elaboration of the United States
Proposals for Expansion of World Trade
and Employment prepared by a technical
staff within the Government of the United
States and presented as a basis for public



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