astonishment we find that those very practices condemned prior to the war, seem to have sprouted and sprung up, and the United States does not seem to be using its economic resources and powers of persuasion in the most effective manner to curb those things. I do not know whether I would be qualified to sit with a negotiating committee or on behalf of the State Department to negotiate, but I would like to see more emphasis placed on equity, and more emphasis placed on others doing to us as we do to them, and that is something that seems to be lacking in the atmosphere and tenor of the discussions.

Mr. GEARHART. As you said a moment ago, the list of countries that do not do unto us as we do unto them is distressingly large.

Now, the principle of the most-favored-nation clause is to extend to all other nations the same privileges that are extended to a favored nation, is not that true?

Mr. GLASS. It is.

Mr. GEARHART. Do you know of any other country on the face of the earth that applies the principle of unconditional most-favorednation principle in commercial matters as we do?

Mr. GLASS. I do not.

Mr. GEARHART. And as generously as we practice it?

Mr. GLASS. I do not, sir.

Mr. GEARHART. A little earlier in the day I heard you say something about the necessity of the United States granting the unconditional most-favored-nation treatment to all nations with whom we have such a treaty. Well, we have such a treaty with 18 or 20 nations; but you also know, do you not, that we extend the principle of the unconditional most-favored-nation principle to every nation on the face of the earth, regardless of whether we have a treaty with that nation, in which they guarantee to us that principle?

Mr. GLASS. Yes.

Mr. GEARHART. In other words, since we have adopted the principle or rather the so-called reciprocal trade-agi cement program, there have been only two countries from which we have withheld unconditional most-favored-nation treatment.

Mr. GLASS. Right.

Mr. GEARHART. And those nations were first Australia, which finally got back on the fair list, and Germany, which so far as I know, is still on the blacklist.

Mr. GLASS. Quite right.

Mr. GEARHART. Even though we grant unconditional most-favorednation treatment to all of the nations of the world, with the exceptions that I have just mentioned, there is not another country on the face of the earth that grants us a similar treatment, is not that true?

Mr. GLASS. I do not know of any. I might tell you, Mr. Gearhart, that we went through country after country examining exchange restrictions, import laws, export embargoes, and by the time we reached number 23 on the list-this was in preparation for the reciprocal trade-agreement hearings-we simply threw up our hands.

Mr. GEARHART. Now, as a matter of fact, 98 percent of the countries on the list that I heard read before the Senate Finance Committee all require exchange permits before you can do any business with them.

Mr. GLASS. Yes.

Mr. GEARHART. That is an effective way of depriving us of equal opportunity in their markets to their raw materials, is it not?

Mr. GLASS. Exchange control covers such a wide multitude of sins that I have sometimes wondered whether even an effective convention or treaty with some nations would be able to control it.

Argentina has three different types of exchange, Brazil has four; there are some countries in South America that have six or seven different types of pesos, milreis, or what have you, buying and selling. Mr. GEARHART. And also approximately 90 percent-I do not remember the exact figures-of all the nations on the face of the earth require export permission, controlling their commerce with all nations on their borders. Now, that is a very effective way of discriminating against some nations and favoring others, is it not?

Mr. GLASS. We have had thrown up to us the fact that the United States has maintained an export control system on hides and skins since the OPA decontrol, and our answer to that, I think, is absolutely fair. We point out that the United States maintains a system of price control. In the transition from a controlled economy to a decontrolled economy, our consumer, the shoe manufacturing industry, and retailers were entitled to protection against the shock of transition and change; that control, export control, was a temporary measure, and on April 1, it was lifted on 50 percent of the products, and by June 30 it will have gone on the rest, and we shall be in the position of being one of the few nations in the world, perhaps one of two nations in the world, which has no controls on hides, skins, leather and leather products.

Mr. GEARHART. Well, the export control over hides is just a hangover from wartime control, is it not?

Mr. GLASS. Yes, sir.

Mr. GEARHART. And it is on its way out, and in a short time there will be no such thing in the United States, but every other country with which we are doing business all over the world, even though they signed the most-favored-nation treaties, signed them with us, are carefully and meticulously controlling their exports of hides and leather products.

Mr. GLASS. Correct.

Mr. GEARHART. And not only are they controlling by export licenses and so forth the export of leather materials; they are controlling everything, are they not?

Mr. GLASS. Yes, sir. My impression is that the whole world seems to have forgotten that the elementary principles of free enterprise are probably the only way in the long run of reestablishing economic sanity on a world-wide basis.

Mr. GEARHART. Now, as a matter of fact, every other country on the face of the earth is doing exactly what they think is the right thing to do to protect their own markets and standard of living, and their employment rolls, are they not?

Mr. GLASS. Correct.

Mr. GEARHART. And the United States, quite unlike other countries on the face of the earth, is acting apparently in disregard of the American market and the rights of the American businessman and working man who derives his living within American business. In other words, we are giving and giving and giving, and the other countries are taking, taking, and taking, and raising barriers against

us from deriving any corresponding advantage because of our generosity in the treatment of our own market.

Mr. GLASS. May I say, sir, that I go along with the doctrine, and would even subscribe to the doctrine that we ought to give and not disregard our world interests if it did any good in the long run; but if it seems to breed exactly the opposite reaction throughout the world, what purpose, what point is there in following that doctrine?

Mr. GEARHART. As a matter of fact, the record shows very clearly, does it not, that not only have we today the same barriers, the same discriminations against the flow of American trade in and out of this country-we have all of them today-that we had when we adopted the reciprocal trade agreement program in 1934 and, if anything, we have more of them than we had then, and we have tougher barriers, and more precise and more hurtful disadvantages than we had then, so, the result of our generosity to the outside world has not been to bestir in them the same generosity in their attitude toward us. Mr. GLASS. Far from that.

Mr. GEARHART. And that is due, is it not, largely to the fact that we do not exact in return concessions for that which we concede to them in our markets. In other words, do you not think it is largely a matter of poor horse trading?

Mr. GLASS. To put it as bluntly as possible, I agree with you.

Mr. GEARHART. In other words, what we are doing down there, if that is horse trading, then such old experts in that line and in that enterprise, as old David Harum, would probably turn over in their graves, is not that so?

Mr. GLASS. I would say that we have forgotten that economic strength or bargaining positions diminish after you have made a concession; it is at its greatest before you give or before you make a loan or before you have given away something. We ought to exercise our economic power at its greatest peak rather than after it has diminished, in fact.

Mr. GEARHART. And so far as we can notice, there has not been any notice or inclination on the part of any nation or any disposition on the part of any nation to give up the protections that they have thrown around their own markets.

Mr. GLASS. No, I would say that they construe in every concession that we make or in every effort that we make to get reciprocity, which we do not get, a weakness in attitude upon the part of our negotiators. Mr. GEARHART. Do you remember when the Atlantic Charter was being written, Mr. Roosevelt suggested that it contain a provision of equal access to the markets and to the raw materials of the world. Mr. Winston Churchill took up his pencil and wrote in the words to the Atlantic Charter "consistent with existing responsibilities." Mr. GLASS. Yes.

Mr. GEARHART. Of course, he, having in mind the British preference system, and also history records that at the time of the lendlease agreements which were entered into, that Mr. Roosevelt gave Mr. Winston Churchill the verbal understanding that the signing of these lend-lease agreements would not affect the placing upon the British Empire of any obligation to modify its Empire preference

structure.

Then we come down until we find the invitation which goes forth from the United States to gather at Geneva, and write a charter for

the International Trade Organization, that England accepts the invitation and then sets out specifically the fact that nothing should be inferred from their acceptance and there should be no implication that they were in any way qualifying or agreeing to the elimination of the Empire preference system.

Now, the Empire preference system which the British are so zealously protecting all along the line is simply, when analyzed, a threelevel tariff system.

Mr. GLASS. That is right.

Mr. GEARHART. Starting at the bottom is the tariff system which applies to the dominions beyond the seas.

Mr. GLASS. Yes.

Mr. GEARHART. The middle one applying to the Crown colonies and British dependencies; and the higher one in effect applying only to the United States.

Mr. GLASS. Yes.

Mr. GEARHART. Well, I just wanted to conclude by saying that I take this opportunity of thanking you for your presentation and telling you that I enjoyed your testimony tremendously, and think it has added a great deal to the illumination on the subject.

Mr. GLASS. Thank you very much.

Mr. EBERHARTER. Mr. Glass, in your presentation to the committee, I think you made a very fine statement. You brought to our attention the various factors that must be taken into consideration when tariff duties are fixed or when agreements are made.

I think you mentioned, among other things, that import quotas, export quotas, subsidies, import taxes, bilateral treaties, various discriminations, accessability to foreign markets, sources of raw materials, industrial requirements, differences in labor costs, capacity of industrial production of various countries, international exchange rates, and one or two other factors that are very important in arriving at proper policy and proper agreement, that is correct, is it not? Mr. GLASS. It is, sir.

Mr. EBERHARTER. Each of those subjects is rather vital, in your opinion?

Mr. GLASS. Yes.

Mr. EBERHARTER. And each of them requires some technical knowledge, would you say?

Mr. GLASS. They do.

Mr. EBERHARTER. And you think that the Congress of the United States, as a party, is equipped or has the time to go into every one of those subjects and have a thorough understanding of them with respect to every industry which is to be negotiated for? You think the Congress, as now constituted, can do that and to a good job?

Mr. GLASS. I could not expect the Congressman to be expert or to be technicians familiar with all of the details of every industry. We do think that the Congress can, as it has, be capable of analyzing principles and the distilled essence of technical knowledge which can become available to you and which you can require to be made available to you.

Mr. EBERHARTER. Well, in order to do that we would have to set up quite an elaborate organization of specialists and experts to make surveys and studies and investigations, and then present their opinions to us, and then after we get their information, their knowledge, the results

of their studies, then we should make up the general over-all principles, is that your idea of the way it should be done? Or should we take each industry and set out just the figure of what the tariff rate should be, or what the import quota should be, what subsidies should be paid, what the export quota should be, and all of those matters? And do you think Congress should take every industry and make a decision as to each one?

Mr. GLASS. Well, as I see your question, sir, you are raising the old question of whether or not Congress should write the tariff or whether an administrative body be employed to write the tariff laws. Mr. EBERHARTER. It is part of the old question, yes. I want to know what your answer to it is.

Mr. GLASS. I would say unquestionably you have to rely upon expert knowledge, and the existing mechanism within the Government; the Tariff Commission, for example, represents a body of men who are qualified to give Congress that knowledge, but what is involved here, it seems to me, is not the details and the minutia of tariff laws; it is the principle and the general policy and the attitude which we, as a Nation, should take in trying to bring some economic health and sanity to a disordered world.

Mr. EBERHARTER. Well now, if you are going to go on the basis of tariff, you have to study each industry individually, do you not? Mr. GLASS. Yes, that has to be done.

Mr. EBERHARTER. Then, first, you have to make a set of principles, and then you have to study each industry particularly.

Mr. GLASS. Well, to be concrete, I would be presumptuous in expecting you to know very much about the tanning business unless some of your constituents might be tanners, but if I should come to you and say, "Here we have a clear-cut case, and showing that it is against reciprocity and it is even contrary to some of our treaties with nations concerned," I should expect you to say that, "Yes, this is wrong, and we should do something about it."

Mr. EBERHARTER. But before we could do that we would have to study all of these factors which you say are vital in arriving at a proper decision, is that right?

Mr. GLASS. I should think so.

Mr. EBERHARTER. In your presentation before this-what is the technical name of this committee?

Mr. GLASS. Committee for Reciprocity Information.

Mr. EBERHARTER. This Committee for Reciprocity Information, did you find that this committee took your case up in an objective

manner?

Mr. GLASS. Very much. As I said, we were given a fair and thorough hearing.

Mr. EBERHARTER. And they seemed to have a good deal of technical knowledge of the tanning industry?

Mr. GLASS. They did.

Mr. EBERHARTER. Is that correct?

Mr. GLASS. Yes.

Mr. EBERHARTER. Did you hear any other witnesses testify before them?

Mr. GLASS. I did.

Mr. EBERHARTER. Did they seem to have a technical knowledge of the industries about which the other witnesses were testifying?