Senator MALONE. I think we are at the turning point. That is where I think we are. The people of the country are waking up. They are 10 years ahead of Congress. They could not believe that any administration or any Congress would do this to them. They are beginning to find it out that Congress is destroying their jobs and investments.

The International Trade Organization and the OTC-as long as you have gotten into that, I might just as well clear it up. I refer to page 261 of Senate Report No. 1627, 83d Congress. It would be very helpful to you if you obtained a copy of that report. Dozens of engineers, economists, and experts testified over a period of a couple of years. There are 10 volumes of testimony behind this 1 volume. I refer in the record to that volume, page 261, describing the International Materials Conference. It was really a part of this whole plan to throw us into a world setup that would pass on the proportion of such materials we could obtain, scarce materials, along with other nations.

Now in the matter of getting out of a multilateral trade agreement, any contracting party-I am reading now from the January 29 letter of the Chairman of the Tariff Commission, and if you have any doubts about this being correct, I hope you will discuss it further:

Any Contracting Party to the General Agreement on Tariffs and Trade (GATT) (including the United States), in accordance with the terms of the Protocol of Provisional Application

it has never been approved by Congress, any of these trade agreements or GATT. It has never been approved by Congress. GATT has never been submitted to us—

the terms of the Protocol of Provisional Application of the General Agreement on Tariffs and Trade, is free to withdraw from the agreement upon the expiration of sixty days

I don't want you to miss this

sixty days after notice of such withdrawal is received by the Secretary General of the United Nations.

You do not even have to notify each of the nations, just say this. to the Secretary General, United Nations, and you are out in 60 days. Then do you understand that when you are out all of the products covered by the multilateral trade agreements revert automatically to the Tariff Commission under the 1930 act?

Secretary WEEKS. That is my understanding, yes, sir.

Mr. SIMPSON. Senator, I believe there is one reservation on that statement.

Senator MALONE. What is it?

Mr. SIMPSON. A number of the bilateral trade agreements which we made with countries in the prewar period before the GATT was conceived remain in abeyance. They are superseded by the GATT, but in the event that the GATT were to disappear, then the bilateral trade agreements resume their force.

Senator MALONE. You mean they were not made for any certain period. They were made permanently, were they?

Mr. SIMPSON. No, sir, they were not made permanently. They were made subject to the 3-year termination provision which the Congress directed.

Senator MALONE. They could be terminated under that 3-year termination.

Mr. SIMPSON. Yes, sir.

Senator MALONE. But it does not take 3 years' notice.

Mr. SIMPSON. No. They may be terminated individually on 60 days' notice. My only point is they are not terminated by a withdrawal from GATT.

Senator MALONE. I am glad I have this second letter. That bothered me, so I wrote Mr. Brossard again, and this is what he said. I think you should study these letters and section 336 and I am going to have them put in the record. We understand of course that there are a lot of holdovers like you down in all these departments and some of them have been there for 25 years and the policy goes on and on.

This is in response to your request this morning for an explanation of how the Protocol of Provisional Application of the General Agreement on Tariffs and Trade permits the United States to withdraw from the agreement upon 60 days' notice.

The basic general agreement was signed at Geneva on October 30, 1947. Article XXXI of the general agreement provided that any contracting party may withdraw from the agreement on or after January 1, 1951, upon 6 months' notice. Article XXVI of the agreement provides for the definitive entry into force thereof under specified conditions. The agreement, however, has never entered definitively into force. However, it has been applied by the United States since January 1, 1948, pursuant to the Protocol of Provisional Application of the General Agreement on Tariffs and Trade signed at Geneva, Switzerland, on October 30, 1947, the same date on which the general agreement itself was signed.

Now, Mr. Chairman, I ask that the 2 letters received from the Tariff Commission, 1 dated January 29 and the later 1 dated March 4, be inserted in the record immediately preceding the insertion of section 336 of the 1930 Tariff Act.

We are completely out of all multilateral trade agreements upon 60 days' notice, and all bilateral trade agreements upon 6 months' notice. Then the workingmen and investors of America are back in business. Senator ANDERSON. Without objection that will be done.

Senator MALONE. Now, Mr. Secretary, there was a good deal of argument yesterday, and there has been considerable talking and argument and especially propaganda recently about the amount of foreign trade we have.

Mr. Secretary, I heard your testimony yesterday that we have $19 billion worth of trade. I studied your charts. I am putting a table in the record showing the amount of profitable trade-the exports of exportable goods from 1909 to 1957-that I want you to study. It is terribly hard to get any specific information on this subject from your Department. I would get an answering letter from somebody saying that my letter had been turned over to the proper authority and that I would receive the requested information. Then a couple of months would elapse with no information and I would write another letter. It was very difficult to get any pertinent information from your Department of Commerce or from the State Department.

It shows the total production of movable goods, exportable United States goods, by year, exports of United States merchandise, percent of movable goods exported, United States Government grants and loans net, exports minus United States grants and loans, ratio of column V which would be exports minus United States grants and loans, the ratio of column V to column I which is total production of

movable goods, the amount that could have been exported in percentage, and this is the way it runs.

In 1909, the first record, we had exported 9.8 percent of our exportable goods. Now this, you understand, Mr. Secretary, is profitable trade, not what you give away or pay foreign nations to take. It does not include the goods on which you pay a subsidy to sell it, not when you buy it at the American support price and sell it at the world price or below like Mr. Benson has to do to get rid of his agricultural products.

And Mr. Benson is very perturbed because our goods go into these countries below the cost of production of the countries that have been furnishing these markets and then they get mad. But we call it foreign trade.

Now it went to 10.9 percent in 1919, 12.9 percent in 1921, and started down again, but ran from 5.8 to 6.29 percent from 1927 to 1942. Let's take it to 1939, the year before the war started. It was 7.5 percent then. Of course, in the war years it immediately began to drop down. There was practically no foreign trade. It began to pick up again in 1945 when it was 7.3 percent, and so on down.

In 1955 it was 5.8. It was 6.3 in 1955. Mr. Chairman, I ask permission to insert this table in the record and to complete the table and any other record that is necessary for this testimony.

Senator ANDERSON. That permission will be granted.

(The tables referred to are as follows:)

United States production of movable goods, proportion exported, and foreign aid, selected years 1909-57

1 Covers changes in both long- and short-term claims of the U. S. Government on foreign countries.

2 Not available. (Prior to 1940, estimates of production of movable goods have been prepared only for years covered by a Census of Manufactures.)

3 Not available. (See note 2.)

4 Less than $50,000.

5 Military aid shipments under the war and postwar lend-lease and Greek-Turkish aid programs are included in col. 5.

6 Excluding United States subscriptions of $323 million in 1946 and $3,062 million in 1947 to capital of International Bank and Monetary Fund.

Prepared from basic data of the Department of Commerce, June 1958.

The above chart was prepared in an effort to obtain an accurate picture of what portion of our movable goods is being shipped abroad through the normal processes of international trade and without the benefit of subsidies, grants, gifts, and credits extended to the countries receiving American products at the expense of the American taxpayer. This objective has not been completely accomplished, nor, in the absence of any Government central authority collecting and collating the contributions, loans, barter deals, special donations and exchanges of goods for foreign currencies made to or with foreign countries by our numerous and various Government agencies at the expense of the American taxpayer, does it appear that a true picture can be given.

For example, exports of farm products under the barter program authorized in title III of Public Law 480 are included in column 2, showing total exports, but nowhere appear in column 5 or 6 listing, respectively, grants other than military aid and Government loans. In 1957 more than $400 million worth of farm products were exported under the barter program. In 1956 barter "sales" totaled $299 million and the year previously $125 million.

In 1957, according to Department of Agriculture statistics, $1,279 million in farm products were exchanged for foreign currencies, and the year previously $783 million. Foreign currency sales are presumedly included in column 6 of the Department of Commerce table, but the totals in that table for the years 1957 and 1956 are only $961 million and $626 million, respectively.

Of the $4.7 billion in agricultural exports last year, $1.9 billion moved under Government-financed programs other than CCC credit sales, or in other words were not sold for dollars. Dollar exports totaled $2.8 billion, but of this $1.1 billion involved subsidies in which the producer was reimbursed by the Government under the CCC program and the product then made available for export through commercial channels at world prices considerably below the domestic price. These sales, however meritorious the program may be from the standpoint of reducing the agricultural surplus, cannot be considered normal transactions in our commercial foreign trade. Yet the full amount is included in the export total, and nowhere reflected in column 5, 6, or 7.

Each of these taxpayer-financed programs, if accurate figures could be obtained, would reduce the total value of exports actually sold abroad under conditions of normal commercial trade, and the percentages of our movable goods which are exported through normal commercial channels within the classical concept of international trade.

The showing that $20,630 million of American products, military or otherwise, were exported during 1957 presents a distorted picture, not only of our foreign trade but also of our economy. Thus, if half of our movable product were shipped abroad as a gift, or bartered for foreign goods we did not want or need, or exchanged for foreign currencies we cannot use, the administration could boast that our exports had increased to more than $100 billion and that were now exporting 50 percent of our entire movable product. This would not reflect, however, any increased prosperity for the United States; it would reflect disastrous losses to our economy.

The 1934 Trade Agreements Act has not increased the proportion of our national product sold abroad for dollars; it has decreased that proportion. Yet the 1934 act was sold to Congress and the public partially on the claim that it would increase the share of our national production exported to foreign countries. To even attempt to move a comparable share of our national product into foreign countries, it has been necessary since World War II, to give or loan $75 billion to those countries, thus paying for the goods they buy with our own dollars, and to further create devious programs designed to permit them to buy our goods with worthless foreign currencies or to "pay" for them with their own products of which they have a surplus or to which they attach none or little value.

As may be seen from the chart above, incomplete as it is, from $3.4 billion to $5.8 billion of our export trade each year since the end of World War II has been fictitious from any commercial standpoint and actually financed in its entirety by the American taxpayer.

Secretary WEEKS. May I inquire what those tables are, Senator? Senator MALONE. I want you to examine this table.

Secretary WEEKS. These tables were furnished to you by the Department?

Senator MALONE. Your Department furnished some of the information. However, it is so difficult to get any information from your Department on this subject that we have to dig it out the hard

way.

I am going to make a statement to you that is contrary to all the propaganda spread over the United States by your Department and the State Department. I have never seen so much propaganda of it on anything. The Atlantic seaboard papers have an editorial at least three times a week on it.

If you subtract the money we give foreign nations and we have given them $70 billion since World War II, we have underwritten private investments in foreign countries against certain losses, and so on, the Import-Export Bank is loaning money at a very low rate of interest to these nations to build plants to compete with us. You and I can continue to study the foreign expense and with a little more promptness on the part of your Department we could come to a conclusion.