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But we are again confronted with the same old appeal that the lowering of duties on imported goods will increase our exports, create good will, prevent war, and thus enrich our Nation. I want to call attention to a very significant fact with reference to this question of exports. The record shows that during the last "5-year prewar peacetime period of prosperity" in the United States-that is, from 1925 to 1929 our national revenue from custom duties averaged almost 600,000,000 dollars per annum. To be exact, $580,748,055. Now then, here is the contrast: During the "5-year period under reciprocal trade agreements preceding World War II"-that is, from 1935 to 1939, inclusive-our national revenue from custom duties averaged considerably less than 400,000,000 dollars annually. To be exact, $378,909,157. What about our loss of revenue over a period of 10 years under the trade-agreement program? The fact is that the decrease in national revenue under the trade-agreement program has exceeded 200,000,000 dollars annually, or the equivalent of 2,000,000,000 dollars in a period of 10 years.

I would say that this is a considerable sacrifice in national revenue incident to an experimental change in economic policy, and again may I add, it failed to keep us out of war or increase our exports. Moreover, when the year 1939 is compared with 1929, the decrease in revenue is some $600,000,000 to $300,000,000, a decrease of 50 percent. I do not like to use statistics when addressing my colleagues, but it is of the utmost importance that this whole free-trade program should be debunked. We have suffered enough from listening to false statements and emotional appeals on this question of increased exports as a means of building up our prosperity. This decrease in revenue during the reciprocal-trade program is no small matter, in view of the terrific burden of national debt which hangs like a cloud over our economy. The decrease in revenue to which I have referred cannot be accounted for as a result of a falling off in the quantity of imports. It is only necessary in this connection to compare the imports during the 5-year period from 1925 to 1929 with the recent 5-year period from 1935 to 1939. Not only this, but the physical quantity of imports in 1937 was exactly the same as the physical quantity of imports during the most prosperous year of all-1929. It is significant, too, that the average physical quantity of imports during the two 5-year periods, namely, 1925-29 and 1935-39, did not vary more than 5 percent.

Let me repeat, therefore, that the physical volume of exports was actually 20 percent less under reciprocity than under the American system of prosperity at home. Not only was the physical quantity in exports 20 percent less under reciprocity than during 1925-29, but the exports under reciprocity consisted largely of scrap iron and steel, petroleum products for military purposes, trucks, tractors, and other vehicles, machinery for making war implements, and stock piles of cotton, grain, tobacco, and other products.

To put this whole matter bluntly, our concession to tariff rates merely meant loss of revenue and injury to the domestic market, while such foreign concessions as were claimed to have been made to us not only did not build up our export trade but merely made it possible for foreign enemy governments to equip themselves for World War II.

It is interesting to go back and look at the record. When the appeal was being made to get the farmers to support the trade-agree

ment program, I recall that when Secretary Hull appeared before the Ways and Means Committee in 1937 urging an extension of the trade-agreement program he stated:

A primary purpose of this trade-agreement program, and it has no more paramount purpose, is to restore as far as possible the foreign markets for American agriculture.

I do not regard it impertinent to ask at this point whether the trade agreements did restore the foreign market for American agriculture. I can say definitely that it did not. Instead, when the New Deal administration realized that the reciptrocal trade program was not ridding our exports of farm surpluses, it embarked in July 1938 on a major export subsidy program. To be more specific, the men behind the iron curtain in the State Department saw no objection to our dumping our goods upon the market of other nations. In an effort to prove that the trade agreements would open foreign markets for agriculture, 116,293,000 bushels of wheat were subsidized for export between July 1938 and November 1939 at a cost of approximately $32,871,000 in subsidies. It is true also that from July 27 through November 1939, 4,340,297 bales of cotton were exported at a cost, for the subsidy alone, of approximately $34,844,000.

Thus, through the failure of the reciprocal trade-agreement program to move our agricultural surpluses, it cost our taxpayers in subsidies $67,715,000 during the period of 16 months-August 1938 through November 1939.

The advocates of the trade-agreement program as a means of removing our surplus farm commodities were becoming desperate. Something had to be done. They even went so far as to bring the Federal Surplus Commodities Corporation into action in the fiscal year 1938 and 1939 and through it spent $30,479,112 for the surplus removal operations of 20 commodities while imports of these same commodities during the same period were valued at $92,298,000. This shows clearly that our surplus commodities were not removed by the low tariff program.

I may say that dumping is the practice of selling goods in the foreign market at a price below that charged for the same goods in the domestic market, and often at a price below the cost of production and shipment abroad.

Needless to say, dumping is an unfair international trade practice, and has been vigorously condemned as such by our Government. Now, then, closely akin to dumping is the practice of governments in subsidizing in one way and another the export of goods by their nationals so that the product may be sold in foreign markets below the domestic price. Furthermore, dumping has always been fruitful of international resentment and discord. Thus, the international ethics and idealism of which the New Deal administration prates so often and so loudly were deliberately violated by this subsidy dumping

program.

I am not surprised that our laboring men begin to realize the danger that confronts them under the trade-agreement program. The friends of labor have striven for many years to build up sound immigration laws which of course are being undermined by the lowering of the duties on products made by cheap labor abroad. There is no surer way of destroying the pay rolls of this country than to transfer them to other countries under a low tariff policy. Is it wise for the

United States to continue a policy that will ultimately weaken the social protection and security programs built up by the National Government and States for the promotion of production and security of the great mass of individuals privately employed? I do not want to see the United States continue an international trade policy under the trade-agreement program that will nullify our antichild labor legislation, the laws eliminating sweatshops, laws prescribing sanitary and health conditions both in places of employment and in residential districts. I know that it is an unwise public policy to throw those who labor on farms and in factories in competition in our market with the people of those areas abroad where conditions are so bad as a result of poor sanitary conditions and disease that the average span of life is 25 years. This, however, is what the men now supporting the trade-agreement program would have us do. I am sure that we cannot maintain our health standards, establish and supported at great expense, by throwing our people into competition in our market with disease-contaminated foods and livestock from these foreign

areas.

I have the honor to represent a dairy district in western New York. I know the care that is taken by the dairy farmers and the expense to which they have gone to eliminate bovine tuberculosis from their herds. The product from this and other dairy sections in New York State and in the other dairy States must not be sacrificed to permit the shipping of unsanitary dairy products into the United States. The proposal of the trade agreement advocates would lower the tariff on dairy products to achieve this undesirable result. I maintain that it is our duty as representatives of the people to protect them by law from imports produced under unsanitary conditions.

A glance at the record of statutory enactments during the last half century and longer will show that the people of the United States under a system of representative Republican States and National Governments have been aware of the importance of protecting all individuals, producers, consumers, and all special groups against any and all forms of unfair public practices. One of the purposes of the Federal Trade Commission is to provide for legal action in the courts of the land to protect our people from such unfair trade .practices. Why destroy all of this security by opening our market to foreign producers who are not required to meet the standards we require of our producers? I maintain that it is just as essential to protect our people from the unfair practices of foreign governments as it is to protect them from the unfair practices of domestic concerns.

I believe our people are fully aware that a multitude of different forms of unfair methods of competition such as dumping, quotas, licenses, bilateral agreements, and many foreign discriminations were introduced or resulted from the so-called reciprocal-trade agreements entered into by the United States with foreign countries and between foreign countries.

The thought never entered the minds of the trade-agreement negotiators of our State Department as to the importance of the childlabor laws, minimum hours of labor for adults, comparable to ours in countries competing in our market. I had always supposed that social legislation had a tendency to increase the price of our manufactured products, and therefore placed in a position of disadvantage the home industry subjected to such laws unless similar laws were in force in all

competing countries, but the trade-agreement experts disagree. It would be interesting to know how many nations with which we have trade agreements have minimum hours of labor comparable to ours.

Do the nations with whom we have trade agreements have to meet our standards affecting health and safety, such as sanitation, lighting, safeguards, dangerous machinery and chemicals, compensation for injuries sustained while at work, insurance of health, insurance against unemployment, pensions or insurance against old age, night work, special provisions prohibiting, limiting, or regulating child labor, and special laws to protect workingwomen? Laws and regulations such as those I have enumerated enter into the cost of production in the United States. I know of no other nation with comparable requirements. These wholesome laws will have little effect in protecting our labor standards if importing nations can ignore them.

I am firmly convinced that instead of the vast maze of confusing schemes to dominate or to play leader throughout the world it would be a much wiser policy for commercial economic treaties to include all such reciprocal concessions, as may meet the judgment of the legislative branches of the different countries in which the people make their own policies.

The Congress of the United States should express the mature judgment of the people.

We have had much talk during the last decade or more about tariff rates under the act of 1930. Yet, twice as many items or commodities were placed upon the free list as were made subject to duty. One more reduction, such as is contemplated, and this with the action planned at Geneva in April will bring free trade to the United States. It has been well demonstrated that unless the cost of production here and abroad of articles entering our market is taken into consideration and adequate protection provided for our producers against low production costs abroad there will be a steady decline in the production of those articles here.

Mr. KEAN. Mr. Secretary, it seems to me that the time to evaluate this program is not now but when the question of the renewing of the power comes up next year.

But under the Reorganization Act, section 136 provides that each of the committees shall exercise continuous watchfulness over the execution by the administrative agency concerned with the subject matter which falls under the jurisdiction of such committee.

It is our duty to keep informed, and I think your executive department would welcome the opportunity to explain what you are doing, and why.

Mr. CLAYTON. Yes; that is right.

Mr. KEAN. Mr. Secretary, when you appeared before this committee 2 years ago I discussed with you a matter of the committee before which businessmen appeared to plead their case. At that time there was much dissatisfaction in business circles. Many felt that the hearings were first, merely perfunctory; second, that the cases have been predecided; and third, that those representing the departments on the committees were theorists, that none of them had ever had any business experience-to use a phrase in business circles, none of them had ever actually had the experience of having to meet a pay roll; and fourth, that most of them did not believe in the tariff system, anyway, and were trying to tear down the tariff as quickly as possible.

Now, are these hearings perfunctory, are they predecided, or is there any merit to the criticism that the members of the committee have not had any business experience and are opposed to the tariff system anyway?

Mr. CLAYTON. I am glad you asked that question, Mr. Kean, I am also aware of the criticism of which you speak. It was discussed at considerable length as you will recall in the hearings held about 2 years ago, with reference to the extension of the Trade Agreements Act. I know at that time there was criticism, but at that time I had only been in the Department about 6 months. And, in preparing for the hearings this year we went into that aspect of the situation very carefully. We reorganized the whole thing; it was done on an entirely different basis, and I believe that there have been none, in respect of these hearings, of the same type of criticism to which you have referred. On the contrary, although we have had, I think, not one single protest or criticism of that type, we have in our files letters from several people complimenting us on the way in which the hearings are held and the attention which was paid to their witnesses and the intelligent type of questions that were asked them.

We divided the Committees for Reciprocity Information, the committee that conducts these hearings, into five panels, each panel studying carefully the briefs that had been presented in respect of the particular commodities on which that panel was going to hold the hearings.

So that when the witness came on the stand they knew' the background; they knew who the witness was representing; they were familiar with the facts presented in his brief, and they knew the kind of questions to ask in order to elicit the information that they required, and I believe I am correct in saying that the hearings have been held in a proper manner and in a manner that was satisfactory on the whole to the great majority of the five hundred and fifty-odd witnesses that appeared before the committee's panels.

Mr. KEAN. Are there any of the men on that committee who have had experience or are they just theorists?

Mr. CLAYTON. I cannot say definitely that they were businessmen or men who had had business experience. I do not think it would be fair to refer to these men as theorists. They are men engaged in research and information matters, representatives of the different Departments of government that compose the Trade Agreements Committee: The State Department, the Treasury, Commerce, Agriculture, the Tariff Commission, and the War and Navy Departments. And as you know Labor has now been added, but at that time Labor was not a member; and these men were carefully selected. They were men who have given a great deal of study to this general subject, and as I say, they put in a great deal of time carefully reviewing and studying the briefs which had been filed, and I believe they are competent men.

Mr. KEAN. They make recommendations to what you call the Country Committee?

Mr. CLAYTON. To the Trade Agreements Committee.

Mr. KEAN. The Trade Agreements Committee.

Mr. CLAYTON. Yes.

Mr. KEAN. What is the Trade Agreements Committee?

Mr. CLAYTON. It is a Trade Agreements Committee, as I say, composed of representatives of the different departments that I named.

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