Mr. GEARHART. Do you know that between 1935 and 1939, inclusive, that 345,363,165 acres were displaced in the United States by the importation of competitive agricultural products from without? Mr. CLAYTON. I beg your pardon. How many acres?

Mr. GEARHART. In the 5 years, 345,363,165. In other words, it would require them that number of acres for an American farmer to have raised the competitive agricultural products that were brought in the United States during those years.

Mr. CLAYTON. We have not got much more than that in cultivation in the United States in total.

Mr. GEARHART. I am talking about 5 years. The average per year is 69,072,638. And instead of having 300,000 cultivated acres in the United States, if we had raised these products, we would have had 369,000,000 cultivated acres in the United States and 10,000,000 people who had to go to the cities and look for jobs would have been able to stay on the farms to grow those products which we imported. Mr. CLAYTON. I dare say many of these products you have got on that list could not be raised here.

Mr. GEARHART. I have excluded everything like coffee and bananas and things of that sort that cannot be raised in the United States, and I have included only those things which are raised in the United States and raised here in great quantity.

Mr. CLAYTON. Well, Mr. Gearhart, I am sure you have tried to make your figures just as accurate as possible, but to say that 70,000,000 acres of cropland was displaced in the United States per year by reason of imports, I just do not think that can be substantiated.

Mr. GEARHART. Well, agricultural economists apply formulas which are recognized among those of that profession as reasonably accurate. The CHAIRMAN. Right there, Mr. Gearhart, would you permit an interruption?

Mr. GEARHART. I would, gladly.

The CHAIRMAN. If those figures are correct, Mr. Clayton, would you say that so far as American agriculture is concerned, in the reciprocal trade policy, it has bogged down?

Mr. CLAYTON. No, sir; I would not.

The CHAIRMAN. Notwithstanding the fact that 70,000,000 acres have been displaced annually through imports of competitive products, that you still maintain that reciprocity, as understood by this adminis tration, is a good thing for the farmer?

Mr. CLAYTON. To begin with, Mr. Chairman, I do not believe that a careful examination of the figures will substantiate the interpretation that Mr. Gearhart has put on them. I just do not believe it will.

Now, in any case, agriculture has more to gain by the success of this program and more to lose by the failure of it, than any other part of the domestic economy. There is no question about that.

There is no question about that, Mr. Gearhart. Your own State is now a very substantial producer of wheat. It produces a good deal of cotton. It produces a lot of other things which cannot be consumed in total in the United States. They are going to have to be exported. I said this morning, and I want to repeat, that we are producing now in the United States a surplus of wheat of 600,000,000 bushels which, at today's price, is worth $1,500,000,000. That is surplus over and above what we can eat. You have got to find a market or store it or destroy it or stop the farmers from producing it.

You go on into tobacco, and we are exporting over $400,000,000 worth of tobacco per year. What are the producers of that tobacco going to do if they lose the markets for it?

Cotton is even bigger figures.

Dairy products and eggs account for nearly $500,000,000 of our exports, last year.

Now, there is only one thing to it. Either we are going to have to take more imports so that people can continue to buy these products and pay for them, or you are going to have to produce less of them, one or the other.

Mr. GEARHART. That is exactly what I wanted to state. If I have given the impression that I am opposed to trade agreements by the criticism of the administration of this so-called Trade Agreements Act, I have given the wrong impression. I have all my life been an advocate of reciprocity, but I think there are some things which are done down in the State Department that verge on that for which they lock up people at St. Elizabeths.

What is the idea when you talk about horse trading? Where does anyone get the idea there is any horse trading involved in this program? We give 1 horse to 1 country and get 1 horse back from that, country and then we give 107 additional horses, 1 to each of all of the countries of the world. Is that trading as David Harum would have traded?

I think it is utterly absurd that we should apply the principle of the unconditional most-favored nation to our end of every agreement that we make when the other party country to the agreement declines to do likewise. Ours is a "give away" policy to every nation save one, the signatory nation.

Mr. CLAYTON. Will you give me a few minutes uninterrupted to answer that?

Mr. GEARHART. I want to point out that when you receive concessions from one country you are never going to get concessions that amount to a hoot for the simple reason that the concession we made to that country is also given to every other country on the face of the earth, and if that country does not get something which every other country in the world does not share, why should that country give us anything of value-and they do not, and they will not.

What they do, when they make an agreement with us, is to immediately nullify what appears on the surface of things as a concession. As did France, when she signed an agreement with us. Almost the next day, she depreciated her currency 66 percent thereby wiping out everything she gave us. Belgium, immediately following the signing of her trade agreement with us, the very next day almost, depreciated her currency 29 percent. Switzerland depreciated hers 31 percent. Netherlands, 22 percent. The United Kingdom, 17 percent. Finland, 9 percent. Sweden, 6 percent. And so runs the story.

Why did they depreciate their currency? Simply to wipe out benefits they gave us in the reciprocal trade agreements. That very instant. And we, in the United States, evidently knew all about it and assented to it, for we never withdrew the benefit of the most-favorednation principle from any of the offending nations, or did anything about it at all.

Those are the things which amaze us. I do not think we farmers, from out West, bleieve that this program is being administered to

gain American opportunities in foreign markets, except, possibly, in the interest of the cotton plantationists, the tobacco growers, and those firms or industries which compose the so-called metal working industries automobiles, rails, and rail equipment, electrical appliances, agricultural implements, office equipment, and typewriters and calculating machines, refrigerators, radios, and things like that.

We see this program is being administered for their benefit alone, and at the sacrifice of almost every other small industry in the United States, almost all the little manufacturing concerns, almost all agricultural enterprises-agriculture in particular.

And you cannot escape the conclusion I have arrived at because the big benefits are going to those industries.

In respect to the loan of $3,600,000,000 to the United Kingdom, we find when we read "Punch" which is England's magazine that tells the stories in cartoons, that the money is being spent for just the items I pointed out. 40 percent of it is going for nonessentials, so the cartoons reveal. One picture is worth a thousand words, so the Chinese say.

As Mr. Knutson suggests to me, is it not sort of an international community chest we are operating? From which, incidentally, the industries I have named are getting all the benefits and every other industry in the United States in suffering.

I know we have agricultural industries that have got to have exports. I know that so well that I worry about it. We have got to sell much of our agricultural products outside of the United States, and, according to State Department notices, we are going to cut the tariff on raisins, which means, instead of exporting 50 percent of domestic production out of the United States, we are going to have to find a foreign market for an additional pound for every pound that is imported as a consequence of the tariff cut.

And peaches. Dried peaches. Canned peaches. Pears. Processed pears. All export crops, and still you are going to cut the tariff in respect to each of them.

Even though we know we have got to sell a certain percentage of these commodities outside the United States, announcement is made that we are going to cut the tariff more, which means that we have got to sell still more abroad.

And if I had not been fighting for years against the cutting of the tariff, you would have had raisins, grapes, peaches, apricots, pears, figs, almonds and a host of other things hanging on the ropes, along with pottery, jeweled watches, glassware and many other things.

We pointed out the imports of almonds had increased four times. during the war. Foodstuffs are needed to feed Europe's hungry. We asked you to intercede with them, to urge them to eat their own almonds, but the State Department would not listen. So the market price of almonds in the United States went down, and many a farmer has lost considerably, all this because of the increased competition of imported tree nuts these last 6 or 8 or 10 or 12 months.

So, the farmer is worried because he knows from these figures all around us, that he is being sold down the river, for the benefit not of agriculture but for the benefit of tobacco growers and cotton merchandisers and metal fabricators. They are the ones who will get the benefit, not the farmers.

The interests of the American people are not the same everywhere in this country. There is much competition within our borders.

Industry and agriculture are everywhere fighting for dear life. All of these producers are American citizens. But are they accorded the equal protection of our laws?

We think every man, woman, and child is entitled to equal protection from his Government, and we do not think our Government should sell the farmers down the river. We do not think you should sell the jewel watch manufacturers down the river, or the glass makers, the pottery people, or any other people just to help the business position of the metal fabricators down in Flint or Detroit. We want an equal break, and we want equal protection by our Government, and if we do not get it, we are going to have more acres displaced and more farmers leaving their farms, going into the cities, to get into the unemployment lines; all this if a dreaded recession overtakes us.

Would not the automobile people in the United States have a better market if you would let the farmer put those 80,000,000 acres to work and give an opportunity of livelihood to Americans to the extent of 10,000,000?

Would not the automobile people then have a better market right here in the United States than in an imaginary fourth-rate market on the other side of the world?

Mr. CLAYTON. The answer is "No."

Mr. GEARHART. I hardly expected you to agree.

The gentleman from New York has given me a very, very interesting chart that I would like to ask your unanimous consent to have included in the record at this point.

Mr. REED (presiding). It is so ordered.

(The chart is as follows:)

QUANTITY INDEXES SHOWING CHANGES IN U.S.

AGRICULTURAL EXPORTS AND IMPORTS FROM 1915 TO 1945

Mr. CLAYTON. Mr. Gearhart, you made a long statement there, and it had a good many questions. I think I have most of them in mind, and I would like to comment on them.

In the first place, you are opposed to the most-favored-nation principle. I would like to remind you that is a good, old Republican principle that was first enunciated, I believe, by Charles Evans Hughes, when he was Secretary of State in 1922, and it was incorporated in the Hull reciprocal trade agreements program. That principle provides we shall not make agreements with other countries which discriminate against any country so long as they treat us fairly and do not discriminate against us. I think it is a sound principle of foreign policy.

Let me finish, please, sir, and then you can comment.

Now, economically, it operates in this way: We usually make these agreements with foreign countries regarding the commodities of which they are the principal operators, or in which they are principally interested.

And we generally make them for a certain kind of commodity. As, for example, if we were making a trade agreement that had to do with laces. An agreement with France. It would be the kind of laces that are usually produced in France. So that the exact concession made in the tariff on that particular kind of lace might not apply to the laces made in Belgium or Switzerland, and other examples could be given.

So that the making of an agreement with one country in which we make a concession does not take away the incentive of some other country to make an agreement with us so that they might get concessions in the particular kind of goods that they expect to sell in our country. It does not do that.

Now, the alternative to that would be to set up a series of discriminations against other nations in our foreign economic relations which would cause bitterness and certainly sow the seeds of discord and conflict, and I do not think we want to follow that kind of a foreign policy.

Now, I have been very surprised to hear you protest against the reduction of tariffs on export commodities, crops, and manufactures, which have considerable surplus which has to be sold and is sold in the foreign market.

I want to say to you that so far as any impact on American producers is concerned, that is the kind of reduction in tariff that can be made with the least harmful effect on the producer, for the simple reason that the fact that he does sell in foreign markets in the world, is proof positive that he is able to compete against foreign producers. He cannot go with his product into Europe or Latin America in competition with other foreign producers, unless the unit cost of the production, the quality and the service, and so on, are such that he can compete and sell his product.

I think you will admit that is true and it is in respect to these commodities that cuts in tariff can be made with the least harmful impact on the producers of those commodities.

Now, you say that these reductions are made for the benefit of the cotton and tobacco producers and a few metal-working industries. Look at your list of exports from this country and you will find that the list of industries and agricultural products that are dependent upon