The answers to such questions seem too axiomtic to pursue them further. Seldom if ever is there a businessman or a politician who will put his feet in the ground and really question the logic of those two statements. In other words, "Do lower tariffs and greater volume of imports necessarily mean a lower standard of living for the American laboring man?" Will greater imports ruin existing business?"

I would like to ask this committee this question. Taking into consideration the labor cost per unit produced where in all the world is labor the cheapest? Suppose you put 200 Chinamen to work at 15 cents per day working at the average efficiency in China. They will earn $30 in 1 day. Now suppose we put one American to work pulling levers and pushing buttons or simply watching some automatic machine do it all and give him all of the $30. At the end of the day he will have more finished products than all 200 Chinamen. It isn't the cost of labor per day or per hour that determines the labor cost of the unit produced.

In an article recently published in Fortune and written by Phillip K. Jessup, whom you undoubtedly know, it is stated that the English assembly line worker is from one-fifth to one-half as efficient as is the American line worker. Say what you want to about the labor in American industry it is the most productive of any in the world. On this basis we can pay him from 5 to 2 times as much as being paid to the English laboring man, per hour or per day, and the labor cost per unit produced will be no greater than in England.

Will lower tariff and greater imports ruin existing business? Some marginal firms may have to make adjustments and some might even have to find new products to manufacture but progress is based on change and adjustments to meet new conditions. I well remember the first automombile that came jugging down the streets of my hometown. It had a one-lung engine hung crosswise under a rubber-tired buggy. It cranked from the side, had a chain drive and was steered by a rudder. Right then if Congress had been as well informed as is the current Congress they would have legislated this contraption off the street and forbade its manufacture because it was destined to ruin "existing business." Wagon factories, buggy factories, harnessmakers, blacksmiths, draft and driving animal industry and many others represented millions of invested dollars and all must adjust or go out of business. The horseless carriage ruined existing business but in its place was built a billion-dollar industrial empire which gave gainful employment to millions and millions of people on jobs that did not even exist before the advent of the automobile.

Greater imports, giving customers abroad a chance to earn American dollars with which they may make greater volume purchases from us will increase the standard of living of laboring men at home and abroad and create millions of new jobs that do not now exist.

The spirit of extreme nationalism is being reborn today throughout the world. It is ultrasensative to the very slightest indication of colonialism. The old order is passing. A new world is in the making and if we want to have an important role in its determination we had best weigh the anchor of our ship of state and get out into the open sea of cooperation and understanding, away from the stagnant backwaters of obsolete economic isolationism, military coercion, colonialism and our inexcusable, unjustifiable egotism.

Restrictions, barriers, controls and shackled freedom rest uneasily upon the shoulders of America's space bound youth, through whose veins still courses the crusading, adventurous blood of their pioneering anchestors. Since when has it been really necessary for American industry to beg for quarter in the markets of the world, her own included? On the gridiron, on the diamond, in the classroom and on the battlefield and in the future markets of the world (if given any opportunity for choice) American youth has not and will not ask for quarter nor in that speculative scientific field of earth and space.

American nationalism has indeed an unfulfilled mission-to find its common ground with the self-interests of other nations and on that ground recreate its own birthright, an environment of progress and economic freedom.

H. R. 1259 in itself is not a good bill. In operation it can hinder imports as much as it can increase them. Its effective operation depends upon vision and courage of one man. That same man, according to the provision of the bill, can use it as an instrument to reduce imports to the vanishing point. To pass this bill assures nothing but its failure to pass loses us everything.

The tariff question is as old as the Nation itself and innumerable times has been argued pro and con by politicians and industry. Other decisions have been historic but never before has the decision taken on the proportions of national

and world destiny. What happens to this bill has as much to do with the future of American democracy and private enterprise as Caesar's decision, as he faced the River Rubicon, had to do with the destiny of the Roman Empire (Republic).

Were American businessmen really informed on this question as they should be the streets of Washington would be full of marching men demanding that this bill or a better one be passed at once. You men as statesmen must not allow their complacency and ignorance keep you from doing your duty to all of America instead of placating a few marginal operators whose economic existence is difficult to justify in good times or bad.

Thanks for your indulgence.
Yours truly,

ARCH MAULSBY, Sales Counselor.

STATEMENT PRESENTED TO SENATE FINANCE COMMITTEE BY JAMES S. SCHRAMM, EXECUTIVE VICE PRESIDENT, J. S. SCHRAMM Co., BURLINGTON, IOWA, REPRESENTING NATIONAL RETAIL MERCHANTS ASSOCIATION

Mr. Chairman, my name is James S. Schramm. I am executive vice president of the J. S. Schramm Co., a department store in Burlington, Iowa.

My purpose in this statement is to express my support of H. R. 12591 calling for the extension of the Trade Agreements Act for 5 years. I speak as a retail merchant, whose firm has been doing business in a small midwestern city, Burlington, Iowa, for 113 years. I speak also as a member of the executive committee of the National Retail Merchants Association, an organization representing more than 10,000 department, specialty, and chainstores which sell the consumers of the Nation more than $171⁄2 billion worth of goods a year.

The retail merchants are closer to the American consumer than is any other sector of the Nation's business community. The issue of foreign trade policy might be better understood if it were examined and discussed in terms of the interests of the consuming public. By its very nature, this would truly be an effort to determine the national interest, for all Americans are consumers.

The American consumer is a very special kind of human being. He is a consumer on the move, seeking better, higher wages jobs, and better quality and better priced goods on which to spend his earnings. He is a consumer on the move in a never-ending quest for a higher standard of living and for all the things that go into producing a richer life. His country was discovered by explorers searching for a new route to supplies of spices and the other kinds of delicacies that in that day contributed to better living. The spices of life in our own day are infinitely more varied, and available to an infinitely greater number of people than they were then. But the maxim is timeless that variety is the spice of life, and we retailers watch from very close range the quest of the American consumer for more and more variety-plus higher quality, at reasonable prices-in the goods at his disposal in the retail shops of the Nation.

The American consumer wants also a secure country in a world either relieved of international tension and crisis or-in the absence of such an ideal-strong enough economically, politically, and militarily to keep down the aggressive ambitions of forces that seek to subvert systems of government pledged to the welfare of the people. The American consumer is aware of the central role his country has played, can play, and must continue to play in the building of a united community of free nations capable of protecting their ideals and institutions.

To sum, then, the American public favors policies and programs, private and governmental, which strengthen our economy, strengthen our national security, and in general help in the fulfillment of the ever-rising expectations of a dynamic, free people.

These objectives are the national interest, and it is that interest our Government policies should serve and promote. In the field of foreign trade policy, the Trade Agreements Act has on the whole been that kind of public policy, and it is for that reason that I urge the Senate to vote to continue it in a meaningful form. While I take serious exception to the several weakening amendments that have been added to the trade agreements legislation in recent years and I do not welcome some of the amendments proposed in the present bill (particularly the shift from 1945 tariff levels to those of 1934 as the base period for the determination of tariff relief in escape-clause cases)-I am supporting H. R. 12591 because a meaningful continuation of the act is essential to the expansion of the

Nation's foreign trade, and the provisions of that bill offer an acceptable minimum of a policy in that direction.

The trade agreements program has over the past quarter century contributed greatly to the expansion of our import and export trade. Expanding exports are indispensable to the expansion of the whole United States economy, and in times of recession they have kept the downturn from deepening. The Congress has heard a great deal about the arithmetic of two-way trade-of the vital role imports play in making possible a sustained and rising level of export business. What is sometimes overlooked are the other benefits gained from a freer flow of imports.

Imports are of course essential to supplementing supplies from domestic sources which cannot meet the demands of a growing economy. They also serve as a spur to our own producers, tending to bring forth greater efficiency, better quality, and more reasonable prices-all for the purpose of winning the favor of the ultimate consumer at the retail level. The spur of competition is one of the most important ingredients in the development of the American type of free enterprise system. The growth of that system must in no way be impeded. It must be fostered. Freer trade does just that. The fact that the United States is capable of that kind of foreign trade policy is itself a clear reflection of the strength of our kind of economic system.

While the record shows that more imports and more exports are good for the Nation-bringing more business and generating more and better paying jobs— those of us who strongly support a liberal trade policy as being in the national interest recognize that a policy that benefits most of the Nation might cause serious injury to a few isolated sectors of the economy. If the national interest is our standard, we must not only underline the overwhelmingly beneficial implications of such a policy but also recognize that there may be other unwelcomed results to a relatively few firms, workers, and communities.

The answer to such problems as may come to light in the wake of increased import competition is not higher tariffs or other forms of import restriction. To yield to demands for that kind of protection would do injury to the Nation as a whole, for the reasons I have set forth above. It would not even really help those who demand protection. The kind of protection they need, the kind that would do them and the Nation the most good, is adjustment in production and distribution on a self-help basis. This is in the tradition of the dynamics of the American free-enterprise system. Since there may conceivably be some instances in which Government marginal assistance may be necessary to help such firms, workers, or communities carry out their own adjustment plans, I suggest that the Senate give careful, favorable consideration to the principle of adjustment assistance embodied in bills already introduced.

The 5-year extension proposed in H. R. 12591 is the longest extension ever requested since the Trade Agreements Act was first enacted. It is something new, to enable our Government to deal confidently, effectively, and with businesslike efficiency with new developments on the world scene. Prominent among them is the evolution of a common market in Western Europe and other plans for regional economic integration that are in the offing. But a 5-year renewal, necessary to meet new and urgent needs, is also highly desirable to meet a need that is hardly new; namely, the need for greater stability in the Nation's foreign trade policy. Greater stability, which hard-fought, short-term renewals have not provided, and could hardly provide, would mean more confident planning of business programs by Americans who buy from abroad as well as by foreign businessmen who export to this country.

This need for greater stability has more recently assumed increased urgency as a result of buildup in the Soviet trade offensive against the free world. There are large numbers of free nations that seek greater economic stability in its many forms. Foreign trade is vitally important to them. They want to trade more with the United States, the world's largest single market, but if import restrictions on our part and short-term renewals of our trade policy legislation bespeak the extent of our interest in doing business with them, these countries may find it necessary to trade more with nations that seem to offer them more long-term stability. The Soviets are making offers of that kind. Diversion of their trade to the Soviet bloc is one way in which the Soviet Union seeks to subvert the weaker members of the free world community. A stable policy of freer trade is an important part of our answer to this Communist gambit.

There are thus many reasons for supporting H. R. 12591. They are all good reasons. The bill is good for America. We urge the Senate to support it.

SCOTT PAPER Co., Chester, Pa., July 2, 1958.

Hon. HARRY F. BYRD,

Chairman of the Senate Finance Committee,

Washington, D. C.

SIR: Mr. Thomas B. McCabe, president of Scott Paper Co., has been vitally interested in the extension of the reciprocal trade program for a further period of 5 years. While he is presently in Europe, he has cabled authority to submit to you, for your consideration and the consideration of your committee, a copy of the letter which he wrote on March 21, 1958, to Hon. Wilbur D. Mills, chairman of the House Ways and Means Committee.

Accordingly, you will find enclosed a copy of that letter which clearly sets forth Mr. McCabe's views. I trust that you will find his comments of interest and that your committee will take them into consideration in its deliberations concerning the extension of the reciprocal trade program.

Very truly yours,

W. R. SCOTT.

Hon. WILBUR D. MILLS,

Chairman, Committee on Ways and Means,

SCOTT PAPER CO., Chester, Pa., March 21, 1958.

House of Representatives, Washington, D. C.

SIR: This year there are three basically new elements in the fight over the reciprocal trade program. In the 24 years that this program has been in effect the general arguments in favor of its continuance have been of an economic nature. The proponents have effectively demonstrated that a general lowering of trade barriers, both in the United States and throughout the world, have resulted in higher levels of trade, expanding economic opportunities, and higher living standards. This has been particularly true in the United States, and in each extension of the Trade Agreements Act it has been emphasized that such extension was in the purely selfish interests of our own country.

Since the last extension in 1955, however, three very important things have happened. First, the Soviet Union has embarked on an extensive program of economic penetration in all areas of the world. This penetration has been characterized by offers of long-term trade contracts, capital investment, and technical assistance. While they have apparently not yet begun to conduct preclusive buying, we may be sure that this is in their arsenal for future use. The United States is faced with the challenge that a considerable part of the world may be led to accept not only the Russian offers but the political penetration which is sure to follow.

The second new element in the issue this year is the European Common Market made up of Germany, France, Italy, the Netherlands, Belgium, and Luxembourg. These 6 countries have, of course, agreed by solemn treaty to eliminate all tariffs and quotas among themselves within a period of 12 to 15 years. They will establish as an external tariff the average of the tariff rates presently in force. The problem before the United States is whether the average tariff level can be reduced so that the United States goods may maintain their markets within the 6 countries in spite of competition from European goods moving freely within the area of the 6. This, however, is only part of the problem.

United States trade with the Common Market Community represents 12 percent of all exports. The higher living standards and increased economic activity likely to be generated by the large free market area of 150 million people offer the United States, in the long run, vastly larger opportunities than we have had in the past. This can be true only if our mutual tariffs are reduced. Finally, there is the question of the orientation of Europe under this new integration. Will it turn inward upon itself or outward toward the United States and the rest of the world? The direction of that orientation will depend in large part upon the kind of a trade policy we maintain.

The third new element is the current recession in the United States. In the latter part of 1957 and early 1958 our exports have fallen substantially. This has been a key factor in our current slow-up. It would be the height of folly to enact legislation which would further contract our exports by limiting our imports. This is what happened in 1930, when we passed the highest tariff act in our history and intensified the depression we were already in. We cannot afford to make such a mistake again.

For the reasons here indicated I wish to urge the committee to approve H. R. 10368 for the full term of 5 years and with tariff reducing authority of 25 percent. Nothing less will do.

Hon. HARRY F. BYRD,

Chairman, Senate Finance Committee,
Washington, D. C.

THOMAS B. MCCABE, President.

AMSINCK SONNE CORP.,

New York, N. Y., June 25, 1958.

STATEMENT IN SUPPORT OF H. R. 12591, TRADE AGREEMENT EXTENSION ACT OF 1958, AND OF A LIBERAL FOREIGN TRADE POLICY IN GENERAL

This statement is respectfully submitted on behalf of the undersigned affiliated corporations:

Amsinck Sonne Corp.,

American Trading Co., Inc.,

Gillespie & Company of New York, Inc.,

all of No. 96 Wall Street, New York, N. Y.

We (the undersigned corporations or their immediate predecessor corporations) have been engaged in foreign trade since well before the beginning of this century; in fact, one, American Trading Co., Inc., had the good fortune of celebrating its 100th anniversary in 1957.

The dollar volume of trade of the undersigned in 1957 was over $50 million. Approximately 300 persons employed by us are dependent for their livelihood on the activities and the prosperity of the undersigned corporations. Our immediate, and if you wish, selfish interest in a flourishing foreign trade therefore needs no emphasis. Moreover, our active business relations over these many decades with practically all parts of the inhabited world have given us ample opportunity to realize the vital importance of an active and successful foreign trade in the development of friendly relations between peoples. We are firmly convinced that nothing contributes so much to this development as does foreign trade where both parties hope to, and actually do, gain naturally mutual advantages.

We, the undersigned, for many years concentrated largely on export trade, but some years ago we became convinced that such one-sided business cannot in the long run remain viable and we made determined efforts to develop the import side of our business. By much work and the assumption of risks, which then seemed unfamiliar to us, we have succeeded in building up considerably the volume of our imports. We have found many types of imports welcomed here and readily accepted at present domestic price levels. Our experience has been that as the result of import activity our prestige and business vantage point have been considerably enhanced in those countries from which we import, and this in turn has been reflected in our ever-increasing volume of exports.

While, as you realize, the ratio of foreign trade to the gross national product is a very large one in most of the countries with whom we conduct foreign trade, this ratio in the United States is comparatively small, seeing that imports amount to approximately $12 billion, and exports to about $20 billion, as against our gross national product of around $430 billion. The fact that exports are close to double the amount of imports shows the urgent necessity of increasing the latter, and the very small percentage of imports in relation to gross national product (about 3 percent) would tend to show that imports can be increased without adversely affecting the national economy as a whole.

The steadily growing productivity of our farms and industries will make it increasingly desirable, and in fact necessary, in spite of the growth of our own population, to export more and more of our goods if we want to produce profitably. In order to sustain such an increasing volume of exports it will become necessary to increase imports by buying not only such goods as cannot be or are not grown or manufactured in this country, but also goods, agricultural as well as manufactured, which are grown and manufactured abroad more cheaply or better than in our own country.

We especially urge approval of the 5-year extension of the act provided in the House bill 12591, since obviously the granting of a longer period within which the President can use his authority to negotiate new liberalized tariffs will place the administration in a better position to encourage expansion of export and import trade.