Number of countries' granting concessions on important products and groups of products exported from the United States (not including numerous concessions obtained on a wide variety of other products)-Continued

The 25 trade-agreement countries covered by this study, in order of signature of the agreements, are Cuba, Brazil, Belgium, and Luxemburg; Haiti, Sweden; Colombia; Canada; Honduras; the Netherlands; Switzerland; Guatemala; France; Finland; Costa Rica; El Salvador; Ecuador; the United Kingdom; Turkey; Venezuela; Argentina; Peru; Uruguay; Mexico; Iran; and Iceland. Nicaragua and Czechoslovakia are not covered because the reciprocal duty concessions and certain provisions of the agreement with Nicaragua ceased to be effective March 10, 1938, and the operation of the agreement with Czechoslovakia was suspended April 22, 1939.

Mr. CLAYTON. Of course, you understand that during and since the war there has not been much fruit exported.

Mr. DINGELL. I am cognizant of that fact, and I understand that is not a normal period.

Mr. CLAYTON. Yes, sir.

Mr. DINGELL. And perhaps figures are not readily available. But we are going to judge the continuance of this act on prewar performance.

I was for it then and I want to say to you now that basically I am for it now. I believe I inserted in the record, when the matter was considered once before, from my State some 600 manufacturing enterprises specifically named that had petitioned for the continuance of the reciprocal trade agreements.

Mr. CLAYTON. Yes, sir.

Mr. DINGELL. So my people in Detroit and Michigan are pretty much for the continuance of it; that is, at least, industrially.

Mr. CLAYTON. Yes, sir.

Mr. DINGELL. And I do not get any real objection from the agricultural interests. That may be natural because I am from the city of Detroit, and I do not have any farmers in my district.

I think it would be helpful-and I am being frank with you; I want to offset some of these slanted arguments as to how much harm the farmer has suffered as a result of it, because I think just the opposite has happened. The farmer has benefited by exports of American overproduction to France, Germany, Norway, and elsewhere, and if he did not directly, he did by the products that were manufactured in American cities, such as those you mentioned-refrigerators, sewing machines, business machines, automobiles. Now, we manufacture a lot of those items in industrial areas of the great State of Michigan, and when we work in our factories, our people eat ham sandwiches that are produced in Iowa; good cheeses that are produced in Wisconsin and northern New York State and from the upper part of our own State-the dairy areas of northern Michigan. So we do better sometimes in consuming our own products than we do by exporting them, because our prosperous worker in the city really goes for good food when he is working. In the final analysis it does not make much difference whether we export food directly from New York or Wisconsin, or whether we consume it as a result of prosperous times in our manufacturing centers. As a matter of fact, we frequently gain on that sort of a deal.

Mr. CLAYTON. I agree with that. I think agriculture has more at stake in this program than industry.

Mr. DINGELL. That is my view of the thing.

I always say, of course, that the answer to the argument about what a good customer the farmer is of the man in the city, of the industrialist or of the man employe in industry, is that we concede that the American farmer is a good customer of the worker in the city. But I always want to emphasize this argument: That the man in the city is four times as good a customer as the man on the farm because there are four times as many of us, and we consume four times as much as the farmer does. So, if you want to use that argument as it relates to the farmer, you have got to take into account the fact that there are four times as many of us in industry as there are in agriculture.

Mr. CLAYTON. You have got a perfectly sound argument. Mr. DINGELL. And you have got to stimulate that element-that 4 to 1 element.

Mr. CLAYTON. We have to bear in mind that agriculture exported directly last year over 3,000,000,000 dollars worth of products, and that is equivalent to 500 dollars for every farm family, on the average, in the United States.

Mr. DINGELL. How much, Mr. Clayton?

Mr. CLAYTON. Five hundred dollars for every farm family in the United States.

Mr. DINGELL. Three billion?

Mr. CLAYTON. Over three billion, yes, sir.

I just

Mr. DINGELL. Now, we discussed the order in council. want to have the record show-perhaps as much for my own edification as for the benefit of the committee-how infrequent is the invocation of the order in council. It is very rare so far as the United King

dom is concerned, and so far as I know, or at least so far as I remember, Canada invoked an order in council following the imposition of the Smoot-Hawley tariff. I think the protest or the appeal at that time was made here in Washington, if my memory serves me correctly, through Sir Esme Howard, and when we failed to heed it, the Canadian Government invoked the order in council; or through an order in council a tariff barrier which forced us or our industries and our manufacturers, in self-defense, to establish factories in Canada; and for a period of, oh, two or more years, I guess, we were building in Canada at the rate of an average of two American plants per week.

I do not know how long that went on, and if there is anything available on that score, I wish that the State Department would just give us some idea of what the result of the invocation of that order in council really was at that time, and to what extent it affected our American industries, because that has a direct bearing, Mr. Clayton, upon American agriculture. Because when our American plants felt the sting of this action and our workers were laid off or idle for extensive periods of time because of the lack of production from north of the line, it affected the American agriculture; and I do remember distinctly the factual data that were presented to the Nation at the time. Canada at that time was importing from us at the time at the rate, I believe it was, of $750,000,000 per annum, and was exporting to the United States about $500,000,000 per annum, and it was a net gain for American industry and agriculture of $250,000,000 per annum. That was virtually wiped out by that order in council, which resulted, as I recall, from the imposition of the Smooth-Hawley tariff levies. I would appreciate, Mr. Clayton, if you could shed any light, if you could give some factual substance to my remarks in this instance, because I am going without any preparation, I will say to my friend from New York, and entirely upon my memory as I recall it.

Now, reference was made to machinery, farm machinery, in the European countries, and Poland was mentioned, along with others. I believe that you said you were not so familiar as to the extent of mechanization on some of the European farms. Of course, such mechanical devices, machinery, and appliances that they had when the Hun invaded those countries were either destroyed or put into a metal cauldron and turned into shot and shell, to use against these unfortunate people. But the loot in that regard, I want to say, Mr. Clayton, so far as I know, my own personal observations disclose came in great quantity from Poland.

In my travels in Europe before the war—and I left Warsaw for the last time about 4 days before the first shot was fired-I remember seeing American tractors, some of them old Fordson tractors, and Farm-alls, and thrashing outfits-the old thrashing outfit with its flume or plume or whatever you call it, blowing the straw onto a stack— in various parts of Poland. They farmed on the broad plain with

no intermediate fences.

They did a lot of ploughing with machinery, with Case tractors, and much of it on the day and night basis, as we do in some parts of the United States, and they gathered in their crops pretty much as we do in

top the grain and leave the straw right in the field in some instances on some of the large estates.

99616-47—pt. 1—13

But I observed in Germany that they were using the hand sickle, in a few instances that I observed at the harvest; and in Norway, of course, the soil is poor, and the amount of tillable land is not very great and in consequence, there the harvest was very meager, and I presume very costly. The scil had to be enriched very much by imported fertilizers.

But I did see in Norway-as a result of our purchasing their whale oil, I did see what they did with the money that they got from whale oil which was used in American soap. I saw in the windows in Oslo, and some of my good friends who were with me then must have seen them, refrigerators, a Frigidaire and a Norge. I think the Norge is made there in Michigan. These refrigerators had their doors open, and inside. I saw American canned tomato juice, and a regular fine display as we have in the Woodward & Lothrop windows or J. L. Hudson's in Detroit; Del Monte canned peaches and various other things. Yes, I saw some Manhattan shirts and I saw certain American wool sweaters produced with American wool and woven in American woolen mills, worked upon by American hands, and shipped there and paid for with the profit that those pecple made as a result of selling us whale oil, which we used in our soap.

We do know what happened when we made it impossible for these people to sell their whale oil in the United States. Germany took the whale oil and made it edible whale oil, and I had some of it in what we called ersatz butter in Berlin; and we lost, in the meantime, the market for our American lard produced by the farmer in Iowa, which we used to send to Germany, we lost that, and the Norwegians sold their whale oil to Germany on a barter basis for Germanmade automobiles, and that again kicked us where it hurt the most, in our American automobile business, because then we were not selling American automobiles to Norway. Germany was. So, we lost the Ford product market in Germany, and we lost the automobile export business in Norway when we lost the whale-oil business in that country.

What did we gain? So we have got to be very careful when we say that these things are just one-sided, and that we must not sell these people or let these people sell us anything, that we should sell them everything and buy nothing from them.

As I understand it, what the State Department has sought to do under your guidance and under the guidance of the great Cordell Hull, former member of this committee, whom we all love and regard highly, was to stimulate two-way business-commercial intercourse between all of the nations of the world. That is the only way in which we will all be prosperous; that is the only way we will all be happy, and that is the only way we will ever preserve peace, because wars follow commercial stagnation.

Mr. CLAYTON. I agree with all you say, Mr. Dingell.

Mr. DINGELL. Thank you, Mr. Clayton. I want to get some support from you for my views. I think basically, if not from the standpoint of eloquence, they will stand the test of scrutiny, although I may not put them exactly as they have happened.

I want to thank you for your patience and indulgence in listening. That is all, Mr. Chairman.

Mr. JENKINS. Mr. Clayton, I should like to ask you just a few questions, if you will permit me.

I would like to have you develop, at least briefly, what you expect to do at Geneva. Before I ask you definitely about Geneva, let me get the background and basis of the Geneva Conference.

If I understand it correctly, you have heretofore held a Conference in London?

Mr. CLAYTON. Yes, sir.

Mr. JENKINS. Will you kindly give me the genesis of these conferences. When the reciprocal trade agreements law was passed about 1933 or 1935, you used to hold conferences, and some of them were held here. We did not hear so much said about any special conferences, but later we had the London Conference. Let us get that historically the genesis of the London Conference, and come down to the Geneva Conference, and then proceed from there.

Mr. CLAYTON. Well, Mr. Jenkins, these conferences are all called by the United Nations, and they called the London Conference for the purpose of having these 18 countries discuss the agenda for the big world conference which has not yet been developed.

Mr. JENKINS. Before we go to that now, you say you are now starting with the conferences that have been called by the United Nations. Well, what did we do before the United Nations came into existence?

Mr. CLAYTON. Before the United Nations came into effect we negotiated these trade agreements country by country, just as we propose to do it now at Geneva.

Mr. JENKINS. You had some conferences, did you not, between groups of countries related to a certain subject; you no doubt discussed many subjects that some countries were not interested in at all? Just give me briefly the mechanism and what you did in reciprocal trade agreements previously; how you conducted them before the United Nations came into the picture.

Mr. CLAYTON. Well, we conducted them country by country just as we are going to do in Geneva, only we did not have them all come in at the same time and work out the negotiations at the same time and place. We would have some preliminary discussion with a country France, for example and agree that we wanted to make a reciprocal trade agreement. We would then consider here the commodities that would be involved in our import to France; we would give the notice under the law that we were going to negotiate an agreement with France, and that the following commodities would be considered, and would give people an opportunity to come in under the law and state their views on the subject, present their views and make their representations of disagreement about change of tariffs, and so forth-the same procedure exactly that we have got now.

Mr. JENKINS. Here is what I am coming to. There was a time when you dealt with these countries individually.

Mr. CLAYTON. We are going to do it now on trade agreements. Mr. JENKINS. Let us see if you are. You did not have any Geneva conferences back there 10 years ago.

Mr. CLAYTON. No; we did not.

Mr. JENKINS. All right. Now, you did not have any London conference 10 years ago.

Mr. CLAYTON. That is right.

Mr. JENKINS. Very well. Now, with the coming of the United Nations, when we set up the United Nations, we did not set that up