loaned to us. They are men who have lived with this problem of the trade agreements question not only in the past in connection with many of them, in regard to trade agreements before, but throughout many of them have been very closely identified, actively identified, with the Committee for Reciprocity Information in the hearings that we have been conducting, or did conduct for a matter of 2 or 3 weeks just recently, getting ready for that Geneva meeting.

You understand the way it is set up, Senator? We have a Committee for Reciprocity Information. We divided it into five panels. Last November we gave public notice of the fact that we were going to negotiate these agreements. We published the list of commodities that would be involved, we asked producers to file briefs and state their objections, if any, to any consideration of any reductions in tariff on those commodities, and we later invited them to come and orally present their cases.

Those briefs were carefully studied by these men, and those men who studied the briefs heard the panels and heard the witnesses. They will make the recommendations to the committee. In other words, they are men who have lived with this problem.

I think we have an awfully good team, that is my judgment.

The CHAIRMAN. The biographies which you will supply will give the answers as to the points which I raised, for whatever weight those points may have.

Mr. CLAYTON. Yes, sir; they will.

We should bear in mind, I think, that this Geneva Conference is one where the negotiations will be intergovernmental, and the people that we are sending are Government people, and they will deal with government people from the other countries.

The CHAIRMAN. Abstaining from argument on the point, many businessmen say, "Of course, you are dealing among Government people, but you are also dealing with subject matters that mean our life or death," and their point is that this should not be in the hands of theoreticians but at least there should be some stiffening of the personnel by men who know the technique of the negotiations and techniques of tariff and who have the happy additional qualification of business experience.

Let me ask you this: This charge is also made-Senator Hawkes has touched on that-that you will put undue weight on the operation of the escape clauses, and, therefore, you will feel at liberty to take greater chances in the negotiation of the agreements than you would otherwise take if you did not have the escape-clause mechanism.

Just as a side comment, I will recall to you that Senator Vandenberg and I urged the same sort of intervention by the Tariff Commission in the preagreement stage as is provided for the post agreement stage, but that was not accepted, and I am not now complaining about

that.

The point that is made here is that because of the existence of the escape-clause procedure, without the existence of that preagreement protection that we may be inclined to take chances in making the agreements that we would otherwise not take.

Those who make that criticism also point out that the escape clause does not give complete protection because an industry might be ruined by the time you might go through the procedures and get a corrective declaration by the President.

Will you give us your comments on that?

Mr. CLAYTON. Mr. Chairman, the escape clause is a kind of supreme court, and I do not suppose any judge other than perhaps the supreme court would be able to say to what extent his decision in the case would be colored by the feeling that his decision was not the final decision and that it would be or could be reviewed by a higher court.

I would not say that the fact that there is an escape clause would not, to some extent affect the judgment of some of us. I certainly would not say that it would not.

However, I think that it would be very easy to exaggerate, the feeling to the extent to which it might affect it, because obviously we all want to be right, we do not want to be shown up later that we have been wrong. That will be our compelling motive to make right decisions, always knowing that if we make a wrong decision we will be shown up as having made a wrong decision.

The CHAIRMAN. Can you assure us here, Mr. Secretary, that doubts will be resolved in favor of our domestic interests?

Mr. CLAYTON. Senator Millikin, I just do not know. When you say domestic interests, we have them on both sides.

The CHAIRMAN. I mean our domestic producing interests.

Mr. CLAYTON. Are you speaking about the ones who want protection?

The CHAIRMAN. Yes.

Mr. CLAYTON. We have also interests that have to be protected, these farmers which I have pointed out before.

The CHAIRMAN. I am trying to get what your standard will be and what your rule of action will be. I would be a little more comfortable if you gave me the answer that there would be a decision in favor of our domestic producers.

Mr. CLAYTON. I can only tell you that we have made a very careful and painstaking investigation of all these commodities that are the subject of negotiation. All of the information that producers care to bring to our attention is considered.

We have listened carefully to the witnesses. Heretofore there has been a good deal of complaint about that matter.

Witnesses have said in the past that it was all a perfunctory proceding and that while they were allowed to state their case, the people on the panel did not seem to pay much attention and appear to have their minds made up. We went over that matter very carefully in the State Department and saw to it that nobody could really make that charge. We are sure that we have conducted the hearings this year in this case in such manner that no one can criticize.

On the contrary, we have letters complimenting us on the way the hearings were held.

We have taken all of this information, the briefs and testimony, and so on, and we have digested it as best we can, and we are going to make the best decisions we can.

Senator Millikin, it is in a field that nobody can be certain. It is a field that depends on so many imponderables that we cannot be certain. You cannot be certain that you have not made a decision that will not hurt anybody.

The CHAIRMAN. My question was a simple one. Will you resolve the doubts in favor of our productive industries at home.

Mr. CLAYTON. I am sorry. I want to answer you absolutely truthfully, but I just cannot say that we would in every case, because there are doubts that arise. There is a group that has to make this decision, and it is a great committee, and it is composed of representatives of seven governmental agencies.

They get together and they take all this evidence and testimony, and recommendations of the Committee For Reciprocity Information, and they have to make the recommendation to the President, and the President is the final authority in saying as to what extent we may go in making a tariff concession.

The CHAIRMAN. I did not get an answer to the question I asked a moment ago.

My question was whether you will take increased chances by virtue of the escape-clause procedure.

Mr. CLAYTON. Well, I do not think we will, but as I said to you at the time, I do not think anybody can just say absolutely to what extent his mind may be influenced by some knowledge of that kind. No judge, if a judge has to pass sentence on a man for guilt of murder or something of that kind, knows exactly to what extent his decision will be influenced under the facts and knowledge that it can be appealed to another court.

The Chairman. He may have difficulty relating the facts and he may have difficulty applying the exact principle, but theoretically he operates under standards which the law has laid down.

Mr. CLAYTON. That is right, Senator.

The CHAIRMAN. Have you completed your answer?

Mr. CLAYTON. I was just going to say that there are in those cases, as you know very well, being a lawyer, a great deal of doubt, because you have in a great many cases, split decisions.

The CHAIRMAN. Of course.

Mr. CLAYTON. The Senators will bear me out that in cases of doubt of that kind, certain presumptions often enable you to resolve it in favor of one or the other of the parties.

Senator HAWKES. May I ask a question?

The CHAIRMAN. Go ahead, please.

Senator HAWKES. When you get through over at Geneva, is this International Trade Organization Charter going to be a completed. finished thing, or are you going to get to a certain point where you have a possible meeting of the minds and are we any of us going to have anything further to say about this back home?

Mr. CLAYTON. This meeting at Geneva, Senator Hawkes, is the second meeting of the preparatory commission. When they finish their work, the charter will then have to be referred to the Conference that has been called by the Economic and Social Council, a world conference on trade and employment.

That will be held some time in the fall, and that is the final Conference at which all of the United Nations will take part.

Then, in the final analysis, this charter will be referred to the Congress of the United States, so, as far as we are concerned, and I assume that other countries will take similar action————

Senator HAWKES. In other words, after it has gone to this final meeting, it still comes back to the whole Congress? Mr. CLAYTON. That I do not know.

Senator HAWKES. Well, it comes back to one or the other or both branches.

Mr. CLAYTON. In the case of Bretton Woods it went through both. The CHAIRMAN. It came here as a treaty.

Senator HAWKES. May I proceed just a minute further, Mr. Chairman?

I have been here long enough to know that when this thing goes through these three meetings and comes back to the Congress that there is not one chance in a hundred of its being turned down no matter what any individual Senator or Congressman may think because they are going to have the same argument and the same thing that has been said over again, it should not have any substance to it, but it does, that we had to do this because it is right. This is the part of the picture of the whole and you do not want to disrupt the peace of the whole world.

What I am sorry about is this: I know your business experience, and I know you, Mr. Clayton, very well, and I know that if you and I were doing this as heads of a great business and were sending our best heads over there to build this very thing, that you are talking about, that we would send them over there and then we would have them come back with something that could be accepted and you and I would be sitting down with them as heads of that business, and we would decide whether we could go through with that thing.

I am sure that you know that I am deeply interested in doing decent things with the reciprocal situation as regards the rest of the world. The only thing I am trying to do is to preserve this great country of ours, which is the only place where the lamp of liberty is burning so that you can see it.

I do not know if there is a way, but if there were a way in which you could have the cooperation of people here who are glad to cooperate with you before we get our foot so deep in the thing that we cannot pull it out-that is what I am trying to prevent.

The CHAIRMAN. Senator, may I suggest that that is the precise purpose of this hearing, to have the full facts developed prior to the time this jells.

Senator HAWKES. I wish you could have the full facts developed, but I never knew the full facts to be developed prior to their jelling. The CHAIRMAN. I can assure you that the full facts will be developed if you stay here long enough.

Senator HAWKES. I hope I will not have to stick around too long. The CHAIRMAN. You may have to stick along for some time. Senator HAWKES. Article XXXV in the Charter of the United Nations reads as follows:

The Security Council may investigate any dispute or any situation

mark those words

which might lead to international friction or give rise to a dispute, in order to determine whether the continuance of the dispute or situation is likely to endanger the maintenance of international peace and security.

-That goes back to my point as to whether this Organization, as part of the whole program can go into the private affairs of any nation.

Senator GEORGE. Senator, I would say that we have already agreed to the ratification of the charter and it authorizes precisely that whether you set up this Organization or not.

Senator HAWKES. Yes, Senator.

Senator GEORGE. This organization might be an instrumentality by which you would get certain things.

Senator HAWKES. I am trying to show that they can do that thing whether it comes from the ratification of the United Nations, or the Security Council. The fact is that they can do it.

Senator CONNALLY. Mr. Clayton, no matter what you put in your agreement, we do not have to swallow it when it comes back to the Congress?

Mr. CLAYTON. Yes, sir.

Senator HAWKES. What have we not swallowed up to date? Name me one thing that we have not swallowed in connection with this world. program and I would say you are right.

Senator ConNALLY. It could have been rejected if you had enough votes to reject it. Of course, we cannot let 1 or 2 Senators dictate the whole thing out of 96 Senators.

The CHAIRMAN. I am assuming that as a result of this inquiry that the Senate would perhaps have opportunity to give advice on the subject, or express an opinion. I am assuming that you would be glad to conform to that prior to the final jelling of this thing, and thus prevent our being presented with a fait accompli-with something that might be very embarrassing?

Mr. CLAYTON. Senator, you will not only have an opportunity, but we would welcome any suggestions and views on the thing.

I would like to say to Senator Hawkes that we have taken the greatest care and gone a very long way to try to get the opinion of everybody who would have an opinion on a matter of this kind in the formulation of this charter. We have been at work on this thing for nearly 2 years, and, Senator Hawkes, we have submitted this charter to every important association and organization in the country, the N. A. M., the United States Chamber of Commerce, and the Bankers Association, and they have all taken it very seriously and taken great interest in it, and we have discussed this matter with them, and in addition to that we held hearings in seven cities in the United States. We advertised them in advance and invited everybody who had an opinion on this subject, and we sent out many copies of the charter in advance.

The CHAIRMAN. You have just completed giving the public an opportunity to express itself, and now you are at the beginning of giving Congress the opportunity to express itself.

Mr. CLAYTON. That is right.

The CHAIRMAN. That is the precise purpose of this hearing.
Mr. CLAYTON. Yes, sir.

The CHAIRMAN. Senator Hawkes has raised an interesting point. which will be of interest to a number of Senators.

Would you mind giving us an opinion of someone in your Department as to whether this will come back as something for approval by both Houses of Congress, or whether it will come back as a treaty? Mr. CLAYTON. Mr. Secretary, there has been a lot of talk around that we are the sole nation that has any real interest in this International Trade Organization; that we are the inventors of it; that we are the enthusiastic promoters of it, and that whatever interest there is in other countries is a sort of "oats bag" interest.