exported approximately half the total output of at least 2 of its suppliers. A reduction in Westrex exports will affect such people nearly as directly as it will our own organization. Attached to this statement is a copy of a letter from one of our suppliers.

Foreign countries want to buy goods from our country, but to do so they need to earn dollars with which to pay for such goods. If we restrict their power to earn dollars, they must decrease their purchases of goods from us. This is not the way to win friends and influence people favorably toward us. In fact, it makes poor friends out of good ones. And it forces these countries to look elsewhere for their trade. To Russia, possibly.

Certain industries in this country oppose the extension of the Trade Agreements Act because they want high-tariff protection for their goods to help them meet foreign competition in the United States market. Westrex designs its own products with high-priced American engineers, has them manufactured in this high-wage country, ships them all over the world, pays foreign import duties on them, competes with both local and international competitors, and still gets a substantial share of the available foreign market.

This shows that American efficiency can overcome high labor costs and permit American goods to compete in foreign markets. The same must be true in many other industries. In those cases where this is not true, the law provides ample protection. Inevitably, however, continued tariff protection for domestic industries takes away a major incentive to meet competition by seeking to improve product and reduce costs. It also hurts all producers who export any of their goods by reducing foreign earnings and, thereby, reducing the markets for all American goods.

The goods exported by Westrex provide jobs for Americans, build up needed skills in this country, and, in general, are just as desirable as production generated by domestic traders. American export industries are injured by high tariffs and other import restrictions. If it is reasonable to provide high tariffs to protect domestic industry against foreign competition, it would be just as logical to help exporters meet their foreign competition by giving them a subsidy to cover their shipping costs and foreign import duties. Westrex does not advocate such a subsidy; we merely wish to point out that a subsidy would be just as logical as a high, protective tariff. In fact, a protective tariff is simply a form of subsidy.

Anything that tends to remove artificial restrictions from trade reduces friction and tension throughout the world. What we need now is not only an extension of the Trade Agreements Act but, also, a liberalization of it.

The act should be extended for 5 years to minimize frequent upsets or possible changes in policy resulting in uncertainty on the part of nations with whom we trade. It is particularly important at this time that the extension be long enough to allow this country sufficient time to fully complete negotiations with the European Common Market. Careful and continuous negotiation over a number of years will be required to insure full access of American goods to this market. Westrex, for one, would suffer substantially if tariff differentials effectively closed the European Common Market to goods from the United States, for France, among other Common Market countries, has been one of our best customers.

Sincerely yours,

WESTREX CORP.,

New York, N. Y.

R. E. WARN.

C. S. ASHCRAFT MANUFACTURING CO., INC.,
Long Island City, N. Y., February 21, 1958.

(Attention: Mr. Edward Warn, vice president.)

DEAR MR. WARN: Regarding the matter of the importance of foreign trade to our company, let me say that it is of the utmost importance. I do not believe that, at the present time, our company could continue to exist without the business that it receives from the Westrex Co.

There was a temporary boom in our business during the years of 1953 to 1956, due to the building of many large drive-ins throughout the United States and the introduction of wide-screen pictures in the indoor threaters. This business is now finished and, therefore, domestically, the sales are at an extremely low level.

Due to the rapid strides made in television, the divorcement of producing companies from the exhibition of the pictures, and various other causes, the exhibitors of motion pictures, who are our customers, find the going very difficult and are limiting their sales to essentials for maintaining their present equipment. The sale of major equipment which we manufacture is almost beyond the capacity of the hard-pressed theater owners to purchase. This is not due to any lack of diligence on our part, as the cost of our research has increased rapidly during the past 2 years; it is merely an economic condition that exists in the motion-picture industry.

During the period from 1953 to 1956, our company employed as many as 60 workers. During the past year, we were forced to lay off a substantial number of these men; the remaining 33 percent are largely employed in the production of equipment for export through your company. If, for any reason whatever, you found it impossible to continue to purchase our equipment, it would work a severe hardship on our company. Your excellent combination of sales force and engineers has done a marvelous job in the distribtion and maintenance of our products, and we hope that this will continue.

Sincerely yours,

C. S. ASHCRAFT, President.

STATEMENT OF THE BUFFALO CHAMBER OF COMMERCE

The Buffalo Chamber of Commerce, comprising an association of 3,300 business executives and 2,200 firms in the Niagara Frontier, strongly supports the proposal to renew the Reciprocal Trade Agreements Act for at least a 5-year period. We urge the act's extension after July 1 in order to maintain and expand jobs and the welfare of the people of western New York, as well as to advance national interests.

In the business community served by the Buffalo Chamber of Commerce, there are more than 400 firms actively engaged in foreign trade. The Buffalo area, one of the great industrial centers of the Nation, produces a long and varied list of manufactured products which are marketed abroad. Among them are flour, feed, and cereals; pharmaceuticals and drugs; automotive parts, accessories, tools, and supplies; musical instruments and record players; chemicals; dental, surgical, and scientific instruments; machinery of all types (sugar mill, cloth cutting, food processing, metalworking, packaging, chemical, etc.); hospital equipment; furniture; abrasives; business machines; electrical equipment; motors; pumps; heat exchanges, etc.

The sale of Buffalo-made products abroad is necessary to maintain low unit production costs and to maintain local full employment. In the year ending August 1957, the Buffalo customs district handled $832 million of exports; even that large figure is not the complete story, inasmuch, as large quantities of Buffalo-made products are cleared through New York City and other seaboard ports.

It is axiomatic that international trade must be two way; that imports are paid for with exports and that the volume of exports depends upon imports. Any backward step to a national policy of high-tariff protectionism would bring idle plant capacity, unemployment, and economic recession to our area.

We estimate that 30,000 to 35,000 jobs in western New York depend upon export-import trade. With the opening of the St. Lawrence seaway, a further expansion is eagerly sought of international trade at the port of Buffalo. Fiftyone foreign ships docked at Buffalo in 1957; we anticipate that the number of these ships and the volume of tonnage they carry will rapidly increase. Certainly, it would be inconsistent for the Federal Government to make a heavy investment in the St. Lawrence seaway and then to stultify its use by a restrictive international trade policy.

From a national point of view, also, the supplying of foreign markets with dollar exchange by importation of goods and services is necessary to maintain a high level of United States manufacturing and employment. The Reciprocal Trade Agreements Act, in effect since 1934, has been a prime factor in increasing production and jobs. The rise of $2 billion in 1957 over 1956 in exports was the equivalent to more than half the increase in the volume of all goods and services produced in the United States last year.

The extension of the act at this time is of worldwide political importance. The promises of the Soviet Union have already caught the imagination of peo

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ples of less-developed countries. If the United States pulls into its shell by restraining imports, the economic interest of those countries must necessarily be oriented toward Russia, thus adding to the perils now facing the free world.

If American exports be maintained, while imports are curtailed, the dollar gap would widen. The gap could be filled by increased foreign aid handouts. But that would mean adding to the heavy burden of taxation on American business and individual taxpayers for the benefit of special groups enjoying tariff protection. Properly understood, such a policy would be highly unwelcome both to the giver, the United States taxpayer, and to the recipient. Trade, not aid, is the only sound and durable base for our foreign relations.

Another reason that the United States should maintain an expansionary foreign-trade posture is the impending economic integration of Western Europe. The Common Market, with its 170 million consumers, will become an area of unrestricted trade as extensive as that of the United States. The United States in its own interest, cannot afford to forgo its share in this development by withholding the opportunity to this vast population to earn enough dollars to buy all it wants of the products of American farms and factories.

In renewing the Reciprocal Trade Agreements Act, it would be preferable to extend it for 10 years. The shortness of the act's renewals in the past has made long-range business planning risky. Businessmen need the certainty and stability that go with periods of time reasonably needed to build efficient marketing organizations.

The escape-clause feature, although not frequently used, has been a deterrent to confidence that a successful importing program will not suddenly be destroyed. If its use is continued, it should be restricted as a temporary reprieve, rather than applied as permanent protection, so that the lower limit of the tariff would be restored at the end of the reprieve.

The Buffalo Chamber of Commerce has long urged simplification and certainty in the administration of customs. Our Canadian friends have complained more about the delays and annoyances resulting from practices in valuing merchandise than about the levels of our rates of duties. What is needed is adoption of tariff nomenclature fixed by the Brussels convention of 1955 to remove present uncertainties of classification and import tax.

The American economy has never been and never will be self-sufficient. Protectionism may temporarily shield a few at the expense of the many. In the long run, restricting imports destroys national wealth and job opportunities. Foreign giveaways to stimulate United States exports subtract also from national wealth. Economically, it is in the hardheaded self-interest of the United States to encourage import as well as export trade expansion. And, because of our vital stake in the political fate of other nations, we must keep open those arteries of free world trade. Economic interdependence is the firmest of international political ties. Reciprocity in trade is vital to world peace.

STATEMENT FILED BY C. C. WALTHER, PRESIDENT, WALTHER BROS. CO., INC., AND WALTHER PAINT CO., INC., NEW ORLEANS, LA.

My name is Curtis C. Walther, president of Walther Brothers Co., Inc., and Walther Paint Co., Inc., of New Orleans, La. I have been a resident of New Orleans since 1920, being a native-born Louisianian. Living in this important port city of the United States, I, early in my business career became interested in foreign trade.

I was one of the original organizers of International House and was president of that organization for the years of 1951-52. I am a past president of the Chamber of Commerce of the New Orleans area, having served two terms in 1949-50. I was one of the organizers in the International Trade Mart of New Orleans and presently a member of its board of directors. I am presently president of the Foreign Policy Association of New Orleans, and was chairman of the Mississippi Valley World Trade Council for the years 1955-56.

During my presidency of International House, I headed trade missions of business men and women to Guatemala, Mexico, Colombia, and Cuba, and in the year 1954 headed the International House trade and travel mission to 7 European countries, where we visited international trade fairs in Milan, Italy; Hanover, Germany; Brussels, Belgium; and London, England. On all of these trips our group program was arranged officially by the heads of foreign trade departments of these foreign countries, which brought us into direct contact

with our counterparts in those countries. Forums and panel discussions were the order of the day, which gave us a most comprehensive insight into the problems that beset those who engage in foreign commerce.

On the basis of my personal experience that resulted from manifold contacts as outlined in part in the foregoing paragraph. I have formulated a basic conclusion that motivated my request for permission to file a statement; namely, if we are to have world peace, we must have world trade. If we are to have world trade, we must eliminate as many trade barriers as possible.

I sincerely request that your committee approve the extension of the Trade Agreements Act for a period of at least 5 years and continuing authority for a tariff reduction of not less than 25 percent.

(1) The Trade Agreements Act is the legislative basis for United States trade policy for the past 24 years. The United States as the leader of the free world and the Nation with the largest volume of international trade obviously exerts the greatest influence on the course of the world trade and on the trade policies followed by the other nations. For the past 10 or 12 years United States leadership has been decisive in maintaining so large a part of world trade in private hands and in steadily reducing, on a worldwide scale, tariff and other artificial barriers to the international exchange of goods. We have made substantial progress toward world multilateral trade and convertibility of currencies which are major United States foreign economic policy objectives. A failure on our part to continue this legislation in an adequate form could only cause us to lose our leadership and gravely jeopardize the progress already made in these directions. It could spark a chain of events which would reverse the process of expanding world trade and lead to the development of mutually exclusive regional blocs economically insulated from each other and from the United States. Such regional trading areas are already forming. The direction in which they develop and whether, by increasing trading opportunities on a world basis, they realize the full potential benefits of the larger free-market area they are designed to comprise, depends heavily on United States action on this extension of the Trade Agreements Act.

(2) Expanding exports and imports are essential to an expanding United States economy. Our continued economic development, our increasingly high standard of living, our greater productivity all depend upon higher volumes of trade. Four and a half million people or 7 percent of our labor force are directly or indirectly employed in this 2-way trade. About 9 percent of our movable goods are exported; this includes 11 percent of our machine tools, 26 percent of our mining and construction equipment, about one-fifth of our agricultural production. We cannot maintain or increase these exports unless imports increase. It is only through pursuit of a liberal trade policy on our part that our trading partners can themselves pursue such a policy; aside from our foreign aid and foreign investment it is only through increasing exports to us that other countries can earn the dollar to pay for our exports. The United States is a low-cost producer of a tremendous variety of products, in great demand around the world. The major limitation on our export sales is the dollars these countries can earn. Tariff protecting our less efficient and generally low-wage industries directly limit potential exports of our efficient, high-wage industries and work to prevent the kind of specialization on an international scale that has served us so well domestically in greater productivity and efficiency. With larger imports we would make perhaps fewer bicycles, less velveteen, less decorated chinaware, or glassware-but more electronic equipment, construction and mining machinery, transport equipment. Our highly productive industries would expand and, as more dollars were available to other nations, this would extend to a wide range of consumers' goods for which we are still the lowest cost producers in the world. These greater exports would lead automatically to greater United States imports of noncompetitive raw materials or components, to the benefit of both sides.

(3) We need at least 5-year extension of the Trade Agreements Act to provide a minimum of stability in our foreign trade. One of the major problems in the forward planning so necessary in the conduct of any business has been the uncertainty caused by the successive expirations of the Trade Agreements Act and the questions raised each time about its renewal. This is damaging to confidence in the continuity of a liberal policy on our part and seriously inhibits full realization of the benefits such a policy can bring forth, both to ourselves and to the rest of the world.

(4) The 6 European countries—France, Germany, Italy, Belgium, Netherlands, and Luxembourg-have now ratified the treaties which will set up, over a period of 12 to 15 years, a common market free of tariffs and quotas for the products of 160 million people. The first phase of this operation will take place in the next 4 to 6 years, during which period tariffs among the 6 will be reduced by 30 percent, and a common tariff at a level of the average of present tariffs will be established against all outside countries. We consider this development a major step in the right direction-the greater specialization, the increase in productivity brought about by large-scale production in this wider market area, can only result in higher living standards for all of the six countries. It can mean greater two-way trade between the area and the United States, provided we are able, through the extension of this Trade Agreements Act, to negotiate a reduction in the level of the average European tariff to be maintained against us. Our mutual trade can certainly increase, as it has always done, as countries increase their developments and raise their standards of living, but if we give notice, by failure to pass this legislation in meaningful form, that we are not prepared to maintain our liberal trade policy, there is the considerable danger that the direction which the six nations take in their development will be away from closer economic relations with us and toward the kind of closed trading system so disastrous to our goals of freer worldwide multilateral trade. It could lead to the kind of bilateralism and regionalism against which we have exerted our influence for many years. It could lead, increasingly, to our mutual economic isolation and reduction of our very considerable mutual trade instead of its increase, as both of our economies demand.

There is no real solution, as many have maintained, in greater United States investment in plant and equipment inside the Common Market area in order to supply that market tariff free. Remittance of earnings in dollars and repatriation of capital will depend on European dollar earnings through increased exports of the area to the United States, and this can only be accomplished through a reciprocal reduction of tariffs.

(5) Extension of the Trade Agreements Act is particularly important in view of the current business downturn. There can be no doubt that the recent decline in our exports has been a basic contributing factor in that downturn.

For the sake of our economy, for the preservation of United States jobs which depend on exports, we need now the boost that passage of this legislation would give to our rate of business activity by removing the uncertainty, the crisis of confidence among our foreign customers that our trade policy is in danger of going backward. We cannot afford the kind of a downward spiral in our foreign trade and failure to extend this act would entail. Its inevitable consequence would be further pressure on our employment, our investment in plant and equipment and our economic activity.

(6) Above all, extension of the Trade Agreements Act is essential to freeworld unity and security. All nations in this world of mutual dependence rely for their economic strength on foreign markets for their exports and on foreign sources of raw materials and other essentials for their imports. No alliance, political or military, can be strong unless it is supported by common economic ties and full faith by each in the cooperative effort of all. In the face of the new Soviet economic offensive-the new challenge to the United States in the field of trade, issued by the Kremlin-these ties and these opportunities become more crucial than ever to the security. A large part of the world is at stake. If we default, we may lose, for our principles of freedom and of competition, much of that world. The drive for economic development, for higher standards of living, is irresistible everywhere, and will be satisfied either within the traditions of freedom or by forced growth at the tragic sacrifice of the individual, characteristic of the Soviet system. This extension of the Trade Agreements Act will be a central factor in the choice the world makes as to the direction it will go.

Hon. HARRY F. BYRD,

Chairman, Committee on Finance,

MOUNT HOLYOKE COLLEGE, South Hadley, Mass., June 23, 1958.

United States Senate, Washington, D. C.

DEAR SENATOR BYRD: As one long interested in international trade, both in my business career and now in academic life, I should like to submit for the record of your committee the following statement in support of the bill, H. R. 12591, to extend the Trade Agreements Act. At the very least, this bill should be enacted without further weakening amendments.