Mr. BIEMILLER. On that, if I may, Senator, I regret to say I expected to be accompanied today by our research director who is, unfortunately, ill. But I will ask the research director to furnish the committee with that data so that you will have it for your files. Senator KERR. I will be very glad if you would.

Mr. BIEMILLER. He is, unfortunately, ill at home or he would have been here today.

Senator KERR. The figures of 411⁄2 million has been used heretofore. I personally do not accept that as a valid estimate.

Mr. BIEMILLER. As I stated, Senator, all I can say is that our economists informed me they think it is a valid estimate.

Senator KERR. I am not prepared to say that it isn't. I just hadn't seen any evidence that it is. It reminds me just a little bit of what a narrowminded member of another denomination said about the claims of the growth of membership in the Baptist Church.

He said, "Yes, if you guys keep on getting as many more members every year as you claim you are going to, it won't be too long before there will be more Baptists than there are people."

I think if we just get enough estimates of the kind like the 412 million as to the number of workers who are benefited by these various things, I think we will have more beneficiaries than we have workers. Mr. BIEMILLER. I will be happy, as I said, Senator, to have our research people send you that information.

Senator KERR. All right. And if they would at the same time give us advice as to the number of jobs that have been eliminated or the number of employees that have been displaced by increasing imports. Mr. BIEMILLER. I will be happy to furnish you with that information.

(The information requested is as follows:)

Hon. ROBERT S. KERR,

Senate Office Building,

AMERICAN FEDERATION OF LABOR
AND CONGRESS OF INDUSTRIAL ORGANIZATIONS,
Washington, D. C., July 3, 1958.

Washington, D. C.

DEAR SENATOR KERR: When I appeared before the Senate Finance Committee to testify on the Reciprocal Trade Agreements Act of 1958 (S. 2907) on June 25, you asked me questions regarding the sources of a number of figures that I used to indicate the impact of foreign trade on employment. Our research department has furnished me with the following information regarding these figures:

1. I indicated in my statement that jobs of about 500,000 workers in the United States during the years 1955-56 depended on exports to six European Common Market countries. This figure is an estimate based on the proportion of total United States exports which went to the six European Common Market countries during that period. These countries received 16 percent of our exports. The total number of workers as estimated by the Labor Department whose jobs depended on exports in 1956 were approximately 3,100,000.1

If it is assumed that 16 percent of the 3,100,000 workers whose jobs depend on exports can be attributed to the exports to the ECM countries, then the number of such workers can be estimated at approximately 500,000.

2. You requested an explanation of the figure used of 42 million workers whose jobs depend on foreign trade either directly or indirectly. I indicated in a footnote in my statement that this figure had been used by the United

1 See statement on Employment, Wage, and Foreign Trade, by the U. S. Bureau of Labor Statistics, published in compendium of papers on United States Foreign Trade Policy, published by the Subcommittee on Foreign Trade Policy of the House Committee on Ways and Means.

States Department of Commerce in one of the papers in the compendium of the House Subcommittee on Foreign Trade Policy to which I have already referred. However, the Department of Commerce figures are based on estimates given by the Department of Labor given in the same source on page 761. That figure in turn brings up to date a previous estimate developed by the Department of Labor for the Commission on Foreign Economic Policy which is shown in the staff papers presented to the Commission on Economic Policy in February 1954, beginning on page 373. These figures are based essentially on an analysis which the Bureau of Labor Statistics developed for estimating the proportion of the output of each major industry which goes to various other industries and also for exports. Full explanation of the estimate of the number of jobs depending on exports will be found on pages 374-375 of the staff papers of the Commission on Foreign Economic Policy.

3. You also requested any information we could provide on the number of jobs that may have been eliminated as the result of increased imports. As I indicated in my statement, it has been estimated that if all tariffs were to be temporarily suspended only 200,000 to 400,000 workers might be affected, of whom only one-third are in nonfarm employment. These are also estimates of the Department of Labor which were developed on the basis of estimates of the impact on foreign trade dollar volume which might result from tariff suspensions, worked out by Dr. Howard S. Piquet, formerly with the Tariff Commission and now a senior economist in the Legislative Reference Service of the Library of Congress. However, as I have indicated in my statement, the actual number of workers affected by imports is much smaller than these figures would indicate, because we have had no such drastic tariff liberalization as would occur with temporary suspension of all tariffs. The Labor Department has estimated in a paper prepared for the compendium of the House Subcommittee on Foreign Trade Policy (pp. 762, 763) that in industries where the Tariff Commission found injury or threat of injury, maximum displacement was only 28,000. There may, of course, have been some displacement of workers in other industries, but these are either industries which have not applied to the Tariff Commission for relief or where the Tariff Commission found so little effect of imports that it felt there was no justification for tariff relief. All of these figures clearly indicate that the number of workers who have been displaced by imports is in any case relatively small. However, as I emphasized in my statement, however small the number of workers affected may be, we feel very strongly that an effective trade adjustment program should be developed so as to meet their special problems.

I trust that this information will be of use to you in considering the need for enactment of the trade agreements extension bill.

Sincerely yours,

ANDREW J. BIEMILLER, Director, Legislative Department.

The CHAIRMAN. Are there any further questions?
We appreciate very much your appearance, sir.
Mr. BIEMILLER. Thank you, sir.

The CHAIRMAN. The next witness is Mr. William A. Mitchell, the American Bankers Association.

STATEMENT OF WILLIAM A. MITCHELL, CHAIRMAN, ADVISORY COMMITTEE ON SPECIAL ACTIVITIES, AMERICAN BANKERS ASSOCIATION; ACCOMPANIED BY EUGENE ZORN, ECONOMIST, AMERICAN BANKERS ASSOCIATION

Mr. MITCHELL. I am William A. Mitchell, representing the American Bankers Association.

At my left is Mr. Eugene Zorn, the economist for the American Bankers Association.

I am the president of the Central Trust Co., Cincinnati, and am chairman of the advisory committee on special activities of the American Bankers Association.

The association welcomes this opportunity to express its views on H. R. 12591, the Trade Agreements Extension Act of 1958.

At its annual convention in 1953, the American Bankers Association adopted the following resolution:

A nation can sell abroad only as it buys abroad. We believe that the United States should live up to its international responsibilities as the world's greatest creditor and producing nation by continuing to open its markets increasingly to foreign goods. Such a policy will help to create a larger volume of world trade, the eventual restoration of freely convertible currencies, and stronger economies in the United States and other nations of the free world.

We endorse and approve the action of the 83d Congress in extending the Reciprocal Trade Agreements Act and enacting the Customs Simplification Act. We urge that all practicable steps be taken to demonstrate to the world our determination to lead in the cooperative effort to expand international trade for mutual benefits in prosperity and security.

Today, as the extension of the Reciprocal Trade Agreements Act is being considered once again, the association has reasserted its unequivocal support of the trade agreements program. Between our annual conventions which are held in the fall, the policy powers of the association are vested in the executive council.

On April 22 of this year, upon the unanimous recommendation of the advisory committee on special activities and the economic policy commission, the executive council adopted the following resolution which I am privileged to present to you at this time:

Over the past several months, the economic decline in this country has emphasized the pervasive interdependence of the economies of the free world. If long continued, the recession here would pose a serious threat to the economic stability of friendly nations abroad, because our foreign investment outlays and our imports and exports exert on important influence on the level of economic activity of these countries.

In turn, if economic conditions abroad were to become unfavorable, this would intensify our own distress by reducing demand for the products of our export industries.

Over the past 25 years much has been achieved in the way of developing a foreign economic policy that is truly in the national interest. Our efforts to reduce restrictive and discriminatory barriers to the expansion of world trade, our mutual-security program, our economic and technical assistance programs, and our encouragement of American private investment abroad, have strengthened our own Nation economically and politically and have enhanced the economic stability and military security of the nations of the free world.

Indeed, the present strength of the free world can be attributed in large part to our foreign economic policy since World War II.

In view of the mounting economic and military challenge of the Communist nations, it would be extremely unfortunate if we were to allow domestic economic difficulties of a transitory nature to turn our foreign economic policy back toward economic isolationism.

From the point of view of our own industrial recovery, it is important that American private investment abroad continue to expand, for such investment increases the dollar purchasing power of foreign nations, thereby raising demand for the products of American industries.

Broadening the market for American exports also requires that we continue to negotiate for the reduction of barriers to the international movement of goods and currencies.

It would be fallacious and dangerous for us to try to stimulate economic recovery in the United States by placing greater restrictions on the entry of products from abroad. Such restrictions would serve to increase the impact of the current recession on other nations of the free world and to depress further the demand for products of our own export industries.

By broadening the market for our own products and stimulating world trade in general, we can make an important contribution to the economic well-being both of the United States and of the entire free world.

In view of the foregoing considerations: Therefore, be it

Resolved, That the executive council of the American Bankers Association go on record as approving the 5-year extension of the reciprocal trade agreements program, and the related legislation necessary to its effective implementation.

Senator KERR. Thank you very much, Mr. Mitchell.

Are there any questions?

We thank you for bringing us your statement.

Mr. MITCHELL. I appreciate the opportunity of appearing, sir. Senator KERR. Paul Hoffman, Pasadena, Calif.

We are glad to have you, Mr. Hoffman.

STATEMENT OF PAUL G. HOFFMAN, PASADENA, CALIF.

Mr. HOFFMAN. First of all, Mr. Chairman, I would like to thank the committee for this opportunity to appear here today in support of H. R. 12591, the Trade Agreements Extension Act of 1958, as passed by the House of Representatives.

I am appearing before the committee in my personal capacity. I am presently chairman of the board and treasurer of the Hoffman Specialty Manufacturing Co., of Indianapolis, Ind., and chairman of the American Committee on United Europe.

The decision which the Congress must take on H. R. 12591 is certain to have vital political as well as commercial results.

It may influence in a substantial way the outcome of the struggle between the free world and the Communist world. This has been called: "The struggle of the century for the century."

Those are dramatic words, but I happen to believe that they are words of great truth.

Senator KERR. If we had time, I would ask you to tell me what they meant, but, since we haven't, I will ponder it.

Mr. HOFFMAN. All right, sir. I have the deep conviction that the nations of the free world can win out in this struggle if they utilize fully their potential strength.

I also have the deep conviction that, if they are to realize on that potential, they must, among other measures, promote freer trade.

Lest there be any misunderstanding, let me say at once that I am in favor of freer trade-not free trade. Free trade is a theoretical ideal which I think cannot be realized in practice and which would, in any event, raise problems of such magnitude that it is questionable whether its advantages could ever outweigh its disadvantages.

Freer trade, on the other hand, involves quite a different concept. We all know of trade barriers which exist in every country in the free world which would better be relaxed or removed. These are the barriers which, for reasons of narrow national pressures, inhibit the expansion of world trade-world trade which brings common benefits to all nations engaged in such trade, and which represent one of the bases for the kind of economic expansion which we in the United States must have and which all the peoples of the world are seeking with great urgency. We know these barriers exist and we know they can be relaxed or removed without the kind of fundamental adjustment which might be the consequence of completely free trade.

The critical importance of freer trade for any nation was brought home to me during the period I had the privilege of being Adminis

trator of the Economic Cooperation Administration or, as it was commonly known, the Marshall plan.

In the year 1948, despite the fact that world trade had almost doubled during the 50-year period, trade among the European nations was at a slightly lower level than at the turn of the century.

I would like to repeat that statement, if I can, because it made a very deep impression on me when I first went to Europe, that in the year of 1948, despite the fact that world trade had almost doubled during the 50-year period, trade among the European nations was, that is intra-European trade, was at a slightly lower level than at the turn of the century.

It might be that it was knowledge of this fact that led to the congressional directive to the Administration of ECA to take vigorous steps to restore trade among the European nations which were to receive Marshall plan assistance.

The language of that directive is interesting. This is the language: Mindful of the advantages which the United States has enjoyed through the existence of a large domestic market with no internal trade barriers, and believing that similar advantages can accrue to the countries of Europe, it is declared to be the policy of the people of the United States to encourage these countries through a joint organization to exert sustained common efforts which will speedily achieve that economic cooperation in Europe which is essential for lasting peace and prosperity.

We in the ECA did take vigorous steps that the Congress proposed to restore intra-European trade, obtaining first agreement among the European nations for a sharp reduction in import restrictions and we later established the European Payments Union to facilitate the financing of this trade.

It might be a matter of some interest that that agreement to reduce import quotas was achieved at 3 a. m. one morning after about a 12hour session, because, of course, you had many interests in Europe that were opposed to any reduction whatsoever in quotas or trade restrictions.

Between 1948 and 1952, the 4 years of the Marshall program, Western Europe's gross national product increased by 25 percent and intraEuropean trade by 73 percent.

Furthermore, it is estimated that the mutual aid generated by the Marshall program enabled us to reduce the cost of that program by a substantial amount, perhaps as much as $2 billion.

This demonstration in the benefits that flow from the liberation of trade was not lost upon the Europeans themselves. Indeed, many of them, particularly such forward-looking leaders as Jean Monnet, Paul-Henri Spaak, Robert Schuman, and Konrad Adenauer, were determined to go further.

Utilizing the momentum generated by the Marshall plan, they launched a bold new program not only for further reducing barriers to trade, but for integrating the western European economy.

The first major step in this program was the Schuman plan for pooling Europe's coal and steel resources. Proposed by France's Robert Schuman in 1950, the European Coal and Steel Community was established in 1952, with six participating nations: Belgium, France, West Germany, Italy, Luxembourg, and the Netherlands.

The results have exceeded even Mr. Monnet's optimistic expectations. Production in coal and steel has risen to record levels.