Mr. FORAND. Are those the same circumstances, my question is. Mr. MARTIN. The same set of circumstances and conditions.

Mr. FORAND. After the reply you gave to Mr. Camp this morning that you have a backlog that goes back to a point where it will take you 3 years to patch up?

Mr. MARTIN. I did not say 3 years. I said that these trade agreements will be concluded for 3 years and they will not be concluded for another 6 months at least. Incidentally, I would like to make the remark now, that these imports come from the United Kingdom and are not so insignificant as they were made to appear.

As a matter of fact, this bone china importation coming in represents now about one-third of the volume of chinaware in the same general price range, so that it is already a very important volume.

Mr. FORAND. Did I understand you to say that you are not making that type of china?

Mr. MARTIN. We are making china that competes with that china but not with the bone in the body.

Mr. FORAND. You admitted this morning that it is impossible to get out in the market and buy chinaware.

Mr. MARTIN. I did not admit that.

Washington is a particularly difficult place to buy anything today. Mr. FORAND. It is a difficult proposition for anybody to get out and buy chinaware today.

Mr. MARTIN. It is being delivered. I would say that probably we do not have any more backlog than the automobile industry or many oher indstries.

Mr. FORAND. Wait a minute.

The CHAIRMAN. The witness has the right to answer the question. Mr. FORAND. He has, Mr. Chairman, but I am asking the questions. The CHAIRMAN. The witness has a right to complete his statement. Mr. FORAND. If I am going to be foreclosed then, all right.

I am through. You are not going to answer any more questions for me if you are going to make a speech.

The CHAIRMAN. He said the backlog is no bigger in the pottery business than it is in the automobile business. We want to treat the witnesses with a certain degree of fairness.

Mr. MARTIN. I think the question does require an answer.

Certainly, as rapidly as new houses come in, we will have the china to supply them. I have already made the statement as to the backlog on automobiles and I think the situation holds true for a great many other commodities. We are not over the situation created by the war yet, and I do not think china is any exception to that rule.

Mr. FORAND. He has not answered that for me; he answered that for you.

The CHAIRMAN. Do you have any more questions, Mr. Forand? Mr. FORAND. Not from me.

The CHAIRMAN. Mr. Mason?

Mr. MASON. The question that I want to ask is this: You stated that you favored the Reciprocal Trade Agreement Act, as I understood it this morning; at least, you favored the theory that is behind that act. Was that so?

Mr. MARTIN. That is correct.

Mr. MASON. Now then, from your knowledge of the way that act has been administered since its adoption in 1934, do you favor the way it has been administered?

Mr. MARTIN. No, sir; I do not, and I would like to explain that if I may.

Mr. MASON. I would be glad to have an explanation.

Mr. MARTIN. There seems to be a great deal of misconception as to the nature of the most-favored-nation commitment. Actually, there are two forms of that commitment, one adapted to bargaining and the other not suitable; the conditional and the unconditional. Up until 1922 the conditional form was known as the American form and the unconditional form was known as the European form.

In 1922, we adopted the unconditional form and have followed that since.

The difference between those two is this: If you have a conditional most-favored-nation agreement, when you negotiate a concession with country A, you grant that concession to country B, and other countries only if country B and the other countries give you the same or similar concessions in their countries; that is the conditional form. In other words, extending the concessions conditional upon the other countries also extending you the concession.

Now, the unconditional form which we have followed recently requires the first country, when it gives a concession to country A, automatically to give that concession to all other countries free from any obligation to make the return concession.

So, I think if we are going to have reciprocal trading, we should have followed the conditional form of the most-favored-nation agreement which is the proper form for such bargaining. In that way we would have been able to negotiate with one country after another. Under the unconditional form you give your concessions to one or two countries, automatically give it to all others, and have nothing left to bargain with when you come to negotiate with them.

Mr. MASON. Do you call that unconditional favored-nation clause a reciprocal clause at all? You get nothing back when you grant that from all these nations that get the benefit of it. Is that in line with the reciprocal trade agreement theory?

Mr. MARTIN. You get something from the first country you negotiate with, yes.

Mr. MASON. Yes.

Mr. MARTIN. One of the things I am talking about in connection with china is that, unfortunately, we negotiate with a country, say, like the United Kingdom. The United Kingdom normally supplies 5 to 6 percent of our china. Now, we turn around and we want to get an agreement from some other country for a concession on china. But we have already given it to the United Kingdom and the other countries automatically received it. Naturally, the other countries already having gotten our concession free will not give us concessions in return. That is the point I am making here, that the present 17 countries we are negotiating with normally supply only 7 to 8 percent by volume and 15 percent by value of china.

I repeat, that the representative of the English potters who appeared at the Committee for Reciprocity Information was very explicit that he did not want that concession generalized to any other country. He wanted that for English china and English china alone.

Mr. MASON. As I understood it, you stated this morning that the United States Government itself, branches of the Government, is encouraging imports of chinaware from Japan and Germany as a postwar trade in order to build up dollar credits here. Can you tell us how the prices of these imports are being arrived at?

Mr. MARTIN. I have made quite a study of that. The imports are being handled by the United States Commercial Company. I have had quite a number of very serious talks with them. Nevertheless, the actual fact is that china is being brought into the country without any specific price being put on it and just thrown on the market for just what it will bring.

Mr. MASON. Why has there not been a specific price put on them?

Mr. MARTIN. We do not have any exchange rate with Germany or Japan. They claim, at least, that they do not know what the cost of production is and they have not any basis to go on there. It has worried us because the tariff is based on the foreign value and here we say there is no foreign value.

Mr. MASON. In that case, would you not say that it is a clear cut case of government dumping connived at by our own government? Mr. MARTIN. Well, I do not know whether you want to use the word "connived" but it is being dumped here by our government.

Mr. MASON. On an agreement and encouraged by branches of our government?

Mr. MARTIN. Not only that, but we have the Allied Economic Commission and Allied Command in Germany sending a man over here to see if he can get a reduction on the tariff to dump still more. Mr. MASON. I only have one more question.

I am intensely interested in this proposed International Trade Or ganization. Do you think that is a move in the right direction or not. the organization of the Internation Trade Organization?

Mr. MARTIN. That is a very big and very difficult subject.

Mr. MASON. Would you say then that if the International Trade Organization is formed under present conditions-let us make it specific. Would you have an opinion as to whether it would be successful when it goes into operation to accomplish the objectives that are stated in the charter?

Mr. MARTIN. I do know this much: That the London Conference. the preliminary conference which considered the American proposals for the International Trade Organization, did agree on a few details. but one of the basic provisions of the proposed charter they did not agree on was the purposes and objectives of the International Trade Organization. It seems to me that before you set up an organization it would be logical to spell out and agree on what your purposes and objectives are.

Mr. MASON. According to the revised charter of the International Trade Organization, we do know that England has protected her colonial-preference program, we do know that because that is in the revised form; and we do know that Russia, the other great power, stays outside and turns her back on the whole organization.

Now, under those conditions, with a big power outside entirely and with another big power placing reservations in the Charter, how can the third big power expect that thing to be successful even if put into operation?

Mr. MARTIN. I can only say it appears as though we will go to almost any extremes to gain the adherence of the other countries.

Mr. MASON. That is all.

The CHAIRMAN. Congressman Martin?

Congressman MARTIN. NO.

The CHAIRMAN. That will conclude your statement then, and we thank you for your appearance here, Mr. Martin.

Mr. MARTIN. Thank you, sir.

The CHAIRMAN. The next witness is Mr. Carl J. Uhrmann.

STATEMENT OF CARL J. UHRMANN, VICE PRESIDENT, IMPERIAL GLASS CORP., BELLAIRE, OHIO, ON BEHALF OF THE AMERICAN GLASSWARE ASSOCIATION

The CHAIRMAN. Will you give your name to the reporter and the capacity in which you appear?

Mr. UHRMANN. My name is Carl J. Uhrmann, vice president of the Imperial Glass Corp., and I appeared here for the American Glassware Association.

The CHAIRMAN. You are a practical glassworker?

Mr. UHRMANN. I am.

The CHAIRMAN. You may proceed.

Mr. UHRMANN. Mr. Chairman and gentlemen, I appear before your committee today in behalf of the manufacturers of glassware who produce tumblers, stemware, table and ornamental glassware, illuminating, scientific, laboratory, and chemical glassware, and a large variety and steadily increasing volume of glass articles for industrial usesuch as parts for pumps, glass pipe, gage glasses, and many similar items.

There are 78 companies, large and small, manufacturing this ware who employ over 35,000 people. Over half of these workers are highly skilled in the art of glassmaking. About 90 percent of the volume of this glassware is produced by member companies of the American Glassware Association, the organization for which I appear. Many nonmember factories have been contacted and they concur in the position of our association in the matter of trade agreements and tariffs. Most of the plants making this type of ware are located principally in the States of Pennsylvania, West Virginia, Ohio, New York, Indiana, New Jersey, Oklahoma, and California, but there are a few plants scattered in other States. The majority of these glass plants are located in small communities and contribute very substantially to the economic life there. Only 10 of these plants are in or near cities of over 50,000 population, while the other 68 support smaller towns, of which 37 are the important industries in their communities of less than 10,000 people.

Therefore, in the great majority of these plant locations the very existence of workers and their families, merchants, service businesses, and the entire area economy depends on the pay rolls and continued operations of these glass plants.

The position of this portion of the American glass industry with regard to trade agreements was recently and very ably presented before the Committee for Reciprocity Information on January 29, 1947, by Mr. W. L. Orme and Mr. C. W. Carlson, and for the American Flint

Glass Workers' Union by Mr. Harry H. Cook. You have been supplied with copies of these statements, and I desire, if you please, to have them incorporated into the records and made a part of this hearing.

The CHAIRMAN. That will be done. (The information is as follows:)

STATEMENT OF MR. W. L. ORME, PRESIDENT, CAMBRIDGE GLASS CO., CAMBRIDGE, OHIO, IN BEHALF OF THE AMERICAN GLASSWARE ASSOCIATION, BEFORE THE COMMITTEE FOR RECIPROCITY INFORMATION, WASHINGTON, D. C., JANUARY 29, 1947 While appearing before you today, I seek to tell you how reduction in tariff in the pending trade agreements with 18 nations is appraised by manufacturers of pressed and blown glassware. That is, the part of the industry which produces tableware, tumblers, ornamental ware, laboratory and scientific ware, illuminating and miscellaneous glassware; in fact, it includes all kinds of glass except bottles and container jars for food, also building glass, and optical goods. There are various tariff rates in the act of 1930 which apply to these different classifications of ware. The detailed industry opinion regarding any changes in these rates has been recorded in our statement previously filed with you on December 21.

This section of the glassware industry divides into two general types, hand and machine, based on the methods of production. In both of these types labor is the most important segment of the cost of production. In machine ware it is from 25 to 30 percent, depending upon the different kinds of ware produced. In hand production it is over 55 percent for every kind of ware and sometimes runs as high as 75 percent for more elaborate pieces, though the average is abont 63 percent. I must speak to you as a businessman for I am not an economist and am, therefore, not equipped to discuss this subject on an academic plane. This industry, however, feeling that some of your committee would be more at ease in discussing these matters at an academic level and in economic terms, have joined with other craft industries and have had an economic statement developed for these industries. Dr. Frederic R. Macaulay, an economist of high repute and formerly employed by the Government, was engaged to determine if in his opinion, supported by economic theories, the craft industries should be fostered and encouraged in the future development of this country. Also, to ascertain if sound economic theory would support that they should seek a tariff sufficient to equalize foreign labor low wage rates with the United States high wage rates. Dr. Macaulay is convinced that craft production is economically sound and so states in the brief entitled "Brief of Craft Industry" which has been filed with you.

In that paper, Dr. Macaulay, after careful and unbiased consideration of the subject, declares, and I quote, "Each of the industries (craft) needs adequate tariff protection if it is to continue to exist in a condition of healthy activity” and then later states, "The problem is in essence a purely wage problem. The American employer cannot afford to pay American wages and sell in competition with the distressingly low wages paid in so many foreign countries.”

Mr. Macaulay then through various citations and references, to various schools of economic thought, develops that by a purely academic standard these craft industries merit tariff protection. In concluding his case in a later paragraph, he states, and I quote, "We contend further that it is virtually a breach of faith for the United States Government to throw such an industry to the dogs-or, indeed. in any way to injure it-merely to help some of our overdeveloped mechanized industries to throw their products on foreign markets."

Here we have an unbiased opinion from an economist of unquestioned repute who, after research in the underlying economics theories, now is convinced that any reduction in tariff on craft industry is not for the best future development of a balanced economy in this country. By craft industries, Dr. Macaulay means an industry which produces by manual methods products which are in reasonable demand by the consuming public because of their artistic and utilitarian end use, and which cannot or which have not yet been produced by machine methods. We feel that Dr. Macaulay has made a strong case and presented it in a manner which has never before been attempted by the craft industries. We urge your committee's careful consideration of his paper.

Since I am not a trained economist I cannot foretell in trite terms what effect changes in tariff regulations and classifications will have on the affairs of the