United Nations General Assembly in 1953. I am also a member of the board of directors of the Committee for a National Trade Policy. I respectfully urge approval of United States participation in the OTC as an important step in carrying out our present foreign policy. Its importance is underscored by recent Soviet moves in the economic field to weaken the unity of the free nations, and to drive wedges of increased trade and aid between the United States and our friends abroad. In my judgment, congressional approval of the OTC would do much to spike this new Soviet challenge, and to reassure our friends abroad that the United States will continue to exert constructive leadership on the world economic, as well as on the military, front. The OTC is, of course, vital to the continued effectiveness of the General Agreements on Tariffs and Trade. GATT has proved of great value to our national interests in significantly freeing world trade from crippling restrictions. Thirty-four countries are now parties to GATT, and about 80 percent of the world's trade moves under its terms. This has been of significant benefit to the United States because we stand to gain most from the freer flow of world commerce, and we have much to lose if that flow is impeded by arbritrary barriers. Through GATT we have have have succeeded in obtaining the elimination or relaxation of foreign restrictions imposed on imports of many American goodscoal, apples, cigarettes, lumber, potatoes, textiles, automobiles, tobacco, petroleum, wool, motion pictures, etc. The direct and indirect importance of our export industries to the continued growth of the American economy makes it important for us to help strengthen, rather than weaken, GATT. The OTC is a logical and necessary step in strengthening GATT. The OTC, by providing a more formal and permanent organization, will enable GATT to function far more effectively. It makes possible prompt and effective solutions to the many issues which constantly arise in international trade, and it gives the necessary continuity and permanence to our long-range efforts to stimulate an expanding free-world economy as the best insurance of a continually expanding American economy. The OTC has all these advantages, without the disadvantages which its detractors have sometimes alleged. The OTC would be exclusively an administrative organization. It could not add to United States obligations under GATT. Nor could it abridge the powers of the Congress with respect to customs and import duties. And it could not make tariff concessions or modify our tariff structure in any way. It seems to me that the issue is quite clear. By approving the OTC we can facilitate increasing trade among the free nations and strengthen our overall ties with these countries. By failing to approve the OTC we would weaken the free world and our own economy as well. Consequently, I respectfully urge the committee to recommend approval of the United States participation in the OTC. Sincerely, J. D. ZELLERBACH, President. STATEMENT OF LAURENCE F. WHITTEMORE, CHAIRMAN OF THE BOARD OF DIRECTORS, BROWN Co., TO BE FILED WITH THE COMMITTEE ON WAYS AND MEANS OF THE HOUSE OF REPRESENTATIVES, IN SUPPORT OF H. R. 5550 I regret that my previous commitments make it impossible for me to appear personally before the Committee on Ways and Means in order to testify in support of H. R. 5550, which authorizes United States membership in the Organization for Trade Cooperation. I would like to submit this written statement for inclusion in the record, and to join the representatives of industry, labor, and agriculture and commerce, who have testified to the Committee on Ways and Means on the need for the enactment of this important piece of legislation. It seems to me that those of us who are engaged in business-whether that trade be domestic or international-have a special responsibility to make known their views as citizens on matters that have a direct bearing on the conduct of commerce. I believe it is the businessman who can appreciate best from his own experience the desirability for the removal of those unnecessary hindrances and barriers that restrict and hamper the conduct of commercial affairs. We believe in free enterprise as that philosophy which will bring the greatest rewards in production, productivity, growth and economic welfare and health. We must know from our experience how essential freedom of enterprise in the market place is for the growth and development of international trade to the mutual advantage of all free-world trading countries. Indeed, international trade has become one of the essential mortars binding together the freedom-loving countries of the world. As President Eisenhower has so aptly put it: "By cementing these ties, we help preserve our way of life, improve the living standard of free people, and make possible the higher level of production required for the security of the free world." The foreign economic policy that seeks to achieve these goals performs, therefore, two functions; it advances the economic interests of the United States and, at the same time, it adds to the mutual strength and security of all our free world partners and allies. The Organization for Trade Cooperation is, it seems to me, an essential part of that policy. It should commend itself to everyone for its simplicity and for the service that it can render. It would perform one major function, and that is to put on a businesslike and regular basis the administration of the General Agreement on Tariffs and Trade-the multilateral trade agreement that we negotiated first in 1947 and which is now subscribed to by 35 countries that account for 80 percent of the total international trade of the world. In April of 1955 I visited Geneva at the request of President Eisenhower as chairman of a committee of private persons, not connected with the Government, having the duty of acting as advisers and observers to the American negotiators at the GATT. What I have to say regarding it and the necessity for OTC is, in part, the result of that visit. Incidentally, on my return I reported to the President and afterward, discussed the matter with Congressmen McCormack and Cooper with whom I had conferred prior to my going to Geneva. The GATT has as its major concern the recognition by each of the world's major trading countries of the desirability of minimizing the interference by government with the conduct of world trade. It reflects, as is evident from its very nature, the principles of trade policy which the United States has espoused over the years. The GATT's usefulness to the United States, in the 8 years of its life, has been great. It has had a record of preventing the growth of discrimination in trade and of preventing the development of trade barriers which would have adverse effects on American industries with export markets. The GATT has provided a machinery whereby trade disputes can be settled amicably without the serious disruption of trade relations that used to take place. It has worked to gain the greater and greater adherence of the 35 contracting parties to the principles that quota restrictions should be progressively removed as the balance of payments circumstances of each of the countries have improved. It has provided a means for gaining from our trading partners the maximum in tariff concessions in exchange for the tariff concessions the President was prepared to make under authority given him by the Congress in the Trade Agreements Act. In short, the GATT has performed this service in the interest of the United States and as well in the interests of the other parties to the GATT. International trade reflects an essential mutuality of interest because it is a form of economic activity that is undertaken because of the benefits that each country derives from it. The GATT reflects that mutuality of interest. It offers an arrangement whereby each country is willing to undertake certain commitments to behave according to certain rules of the game so long as other countries are willing to do the same. These, as I see it, are the advantages of the GATT. The purpose of the OTC, as the President has pointed out, is to make those advantages more secure by providing an administrative mechanism for the GATT. The ŎTC, therefore, is simply an extention of these administrative and business practices to a working and effective business agreement with other countries for the sole purpose of making that agreement work better than it has to date. I recognize that there have been questions raised casting doubt on the OTC and the GATT itself. It seems to me that Secretary of Commerce Sinclair Weeks in his memorandum for the Cabinet on the OTC, which has been sent to the Congress, and in his testimony before the Committee on Ways and Means on March 2, has with great clarity explained the limitations of the OTC's functions and the reasons why we have everything to gain and literally nothing to lose from joining this Organization. It is worth repeating here that OTC and our membership in OTC would not reduce a single American tariff by one fraction of 1 percent. Only the President can do that, subject to the authority which the Congress has given him in the trade agreements program. It is equally clear that the prerogatives of the Congress will not in any sense be affected by our membership in OTC. The Congress always has the right to legislate as it wishes, and, of course, it is the hope of all of us that the Congress will legislate only that which is in the national interest. The OTC would not increase our obligations in any way. It would not have any authority to compel any of its members to do anything. Its methods are persuasion and the talking out of problems around the conference table. These methods are productive because all its members have an important interest in the trade behavior of all the other members. The OTC will afford an environment that is congenial to the settling of trade disputes. This will result in the greater stability in the conditions under which trade is conducted. It will result in effective reduction in discriminatory trade barriers that have hindered the movement of trade. I believe that it is clearly in the interest of the United States to participate in the OTC. American manufacturers will enjoy ever-widening markets for their products. We would encourage greater adherance on the part of the other member countries to the rules and principles of trade conduct that the United States has long believed in. We would further encourage a greater degree of cooperative effort in the international trade field, that is such an essential part of gaining greater cooperation in the political and military areas with our friends and allies. I, therefore, most sincerely urge that the Committee on Ways and Means report favorably on H. R. 5550 as requested by President Eisenhower. Hon. JERE COOPER, WALWORTH Co., New York 17, N. Y., March 16, 1956. Chairman, House Ways and Means Committee, DEAR MR. COOPER: Walworth Co. is the oldest and the second largest full-line producer of valves and fittings in the world. It is one of the principal producers of malleable-iron fittings in this country. Since the beginning of the present program for negotiating tariff reductions, we have been seriously concerned with the threat to our domestic market of Japaneseproduced malleable-iron fittings which are now, and have been, invading the domestic market at an ever-increasing rate. The last figures available disclose that the importation of malleable iron fittings amounted to only 2 percent of domestic shipments, but the rate of increase is alarming. The volume in 1949 was 18,773 pounds; during 1955 the volume had increased to 3,276,728 pounds. We understand that your committee has before it for your consideration H. R. 5550 which, as we understand it, would in effect, give congressional ratification to the GATT's negotiation of tariff agreements. Prior to the convening of the Geneva conference on tariff negotiations, our industry tried unsuccessfully to have malleable-iron fittings removed from the list of negotiable items. The procedure, as explained to us, convinced us that we were without any authoritative audience willing to hear and give effective relief to the plight in which our domestic malleable-iron-fittings industry finds itself. Congressional endorsement of H. R. 5550 will, we fear, broaden the gap between the practicalities of our domestic industry from time to time and our congressional representatives. We recognize that the malleable-iron-fittings industry is only one of many industries which may be affected by future tariff reductions. However, the serious effect of a further reduction in the tariff, which seems most likely if the present bill is passed, is pointed up by the fact that the present cost of imported malleable-iron fittings to the importer is $0.233 per pound, while the average realization of competitive fittings manufactured and sold domestically is $0.36 per pound, and at this price, the realization to domestic producers is only a scant return. Accordingly, we urge you to give every consideration to reporting this bill unfavorably. Very truly yours, Hon. JERE COOPER, F. M. JACKSON, Vice President. BARCO MANUFACTURING CO., Chairman, Ways and Means Committee, House Office Building, Washington, D. C. MY DEAR CONGRESSMAN: I believe you have, before your committee, H. R. 5550, dealing with the General Agreement on Tariffs and Trade (GATT) and the Organization for Trade Cooperation (OTC). I would like to record my protest against this being reported on favorably by your committee or acted on favorably by Congress because it is just another case of the foreign governments taking the United States for a ride. It is a hobby of the internationalists and intellectuals and it is not in the interest of the average citizen, the average corporation or the average employee in industry. would invite criticism of its action. Congress The United States built its success before international innovations of this kind had any standing or were recognized and the elimination of international agreements such as this and the International Labor Organization, from United States activities, is earnestly desired. Very truly yours F. N. BARD, President. W. M. WELCH MANUFACTURING CO., Hon. JERE COOPER, Chairman, Committee on Ways and Means, MY DEAR REPRESENTATIVE COOPER: My attention has been called to H. R. 5550, which provides for United States membership in the Organization for Trade Cooperation. Powers to regulate tariffs, under our Constitution, are vested in the Congress of the United States. This bill transfers these powers to the executive branch of the Government. It further authorizes the executive branch of the Government to make arrangements with other countries with respect to tariffs. This will result in the regulation of our tariffs by representation from our Government that constitutes a minority in a group of foreign governments. Tariffs affect the economy of the country; and with it the very obscure items of small economic importance, which are extremely vital to national progress, national prosperity, and national security, can be badly damaged by such a cumbersome arrangement. Typical examples of a type of product of obscure economic importance but, nontheless, extremely vital to national progress and national security are scientific instruments such as analytical balances and weights used in research laboratories. There are hundreds of other vital commodities so obscure that the cumbersome machinery made effective by this legislation could not begin to recognize their need. At all costs, United States membership in the Organization for Trade Cooperation should be avoided. Cordially yours, Representative JERE COOPER, R. E. WELCH. THE BODINE Corp., Bridgeport 5, Conn., March 9, 1956. Chairman, House Ways and Mean Committee, House Office Building, Washington, D. C. MY DEAR MR. COOPER: I am writing you to register my opposition to bill H. R. 5550, the so-called Organization for Trade Cooperation bill. We are manufacturers of machine tools, an industry which used to ship 20 percent of its yearly output abroad. Under present tariff policies, we are not only shipping less than half that amount abroad, but we are suffering from importation of inferior, foreign-made, machine tools that can be sold in this country for 50 to 60 percent of the cost of production in America. I have watched the results of a mistaken tariff policy on the lace industry, the watch industry, the optical industry, and on other minor industries such as pins, wood screws, handtools, etc. I tell you every time that we import materials from abroad, we buy not only unemployment for the American workingman but a tendency to lower the standards of living of the whole American people. I recognize this is a highly controversial subject, but I am unalterably opposed to any delegation of congressional authority to an international body involving matters that are vital not only to the national security, but to the welfare of the individual citizens of the United States. I hope this bill will be unfavorably reported and that it will not become the law of the land. Very truly yours, A. V. Bodine, President. Mr. JERE COOPER, IMPERIAL PAPER & COLOR CORP., Chairman, House Ways and Means Committee, House of Representatives, Washington, D. C. DEAR MR. COOPER: I am writing you to express our intense opposition to this country's membership in OTC. We believe that the committee, of which you are chairman, is about to begin hearings on H. R. 5550. We believe that membership in this organization will bring us even closer to the elimination or further reductions in tariffs which are so essential for our survival. We are already losing a considerable amount of business on C. P. Iron Blues, because the tariff was reduced at the Torquay conference. This is not alone the only effect, as we find it impossible to get a reasonable return on the C. P. Iron Blue we are manufacturing; otherwise, we would be further out of line on price. It is absolutely impossible for us to pay the high wage rates necessary in our country and at the same time compete on such commodities as we manufacture, where high labor costs are involved against foreign producers paying from onequarter to one-tenth of our hourly rates. Right now the C. P. Blue that is being produced in England is being sold under our cost of production, so in order to maintain our sale in this country we must keep the differential between their selling price and our selling price as low as possible. Naturally this price, while bad on a single item, would be destructive to our entire economy if broadened into other items which are not now under consideration, but certainly would be if we were to join OTC. It is unbelievable that our elective representatives would take a step which, in effect, would allow the other 34 members of OTC to decide upon what we shall manufacture in this country and what they shall take away from us on the basis of a 34-to-1 vote. Our company and many companies like us have been a bulwark against aggression, mainly due to the scientific know-how we have acquired since World War I. We employ a very high proportion of chemists, engineers, and other technical trained personnel which we could not do if we were forced to meet any competitive situations like C. P. Iron Blue. Our export business is absolutely negligible (other than to Canada), as we are not in position to compete in the world market. Therefore, we trust that you will oppose vigorously this move, which would have the effect of ruining the one market (the United States and Canada) which is left to us. This may not be true in other industries, where labor factors are less of an item, but it is certainly true in our industry, where foreign know-how is equal to ours, and where mass production does not afford the economies that it does in certain industries. May we have your support in opposition to H. R. 5550. Sincerely yours, S. L. KARPELES, Vice President. Statement of DONALD R. Wadle, Managing Director, Metal Lath ManUFACTURERS ASSOCIATION, TO HOUSE COMMITTEE ON WAYS AND MEANS RE H. R. 5550 I am Donald R. Wadle. I am managing director of the Metal Lath Manufacturers Association, Engineers Building, Cleveland 14, Ohio, a trade association of the domestic manufacturers of metal lath and metal plastering accessories. I submit this statement on behalf of the members of the metal-lath industry in opposition to H. R. 5550. Metal lath and metal plastering accessories are used to provide a metal plaster base in the internal wall and ceiling construction and remodeling of buildings, to provide a reinforcement and mechanical key for plaster. Some also serve as a base for stucco and as concrete-slab reinforcement. Being highly fire resistive, and because its use results in a plastered surface that is more resilient and crack resistant, metal lath is a superior plaster base, used chiefly in public and semipublic buildings as distinguished from small inexpensive construction. The domestic metal lath manufacturers are cognizant of and sympathetic with the broad basic objectives of the repcirocal trade agreements program. However, when last year the Executive's tariff-changing authority was broadened and extended for 3 years (H. R. 1), and when it is now proposed in H. R. 5550 that |