hand, while we strive to improve American wages and living conditions, on the other hand.

If any concession is to be made to those who demand further tariff cuts, we submit that a carryover of presently unused authority should be adequate during the next 2 years.

As to the power of the President to approve or nullify Tariff Commission escape-clause decisions, we plead that the present bill be rewritten.

Simply stated, as we understand, the present bill would authorize the President to reject or modify a Tariff Commission recommendation unless Congress, by a two-thirds vote of both Houses directs otherwise. The likelihood of any industry ever obtaining support of two-thirds of both Houses is in the realm of sheer fantasy.

Therefore, to be practical, we urge the approach whereby the President would initiate congressional action if he wishes to reject or modify a Tariff Commission recommendation. As Chief Executive, he has at hand facilities, such as all executive departments, defense agencies, and foreign diplomatic offices, to marshal promptly all pertinent facts to convince Congress of an overriding national interest.

We propose that H. R. 12591 be amended to provide the Tariff Commission escape-clause recommendations become effective, unless the President within 60 days obtains congressional approval for rejection or modification.

The recommendations we have made, we sincerely believe, are equitable, practical, and realistic in the best interests of our domestic economy and a fair improvement of United States foreign-trade legislation.

I would like to add, Mr. Chairman, that in answer to your question of one of the witnesses earlier today, the United States Department of Labor reports that in 1947 employment in our industry amounted to 5,000; there were 44 factories

Senator KERR. Say that again.

Mr. Moss. Five thousand employees in 1947.

Senator KERR. In what?

Mr. Moss. In 1947.

Senator BENNETT. In his industry.

Mr. Moss. In the knit-glove industry.

Senator KERR. Yes.

Mr. Moss. And the same Department of Labor reports that as of 1954 there were 2,025 employees; that may not be a large industry, but the unemployment is very large considering the size of our industry and the size of our manufacturers.

Senator KERR. Well, to the people that are in it it is nearly as important as the development of more productive facilities are either to some foreign-owned company or some American-owned company in a foreign country seeking to dispose of their products in that market. Mr. Moss. Yes; that is right.

We have lost about

Senator KERR. I dissent here on the part of your testimony and that of others that some of you boys are against any combine you are not in on.

Mr. Moss. Well, you mean why not

Senator KERR. I mean that is the basic concept of the people in Oklahoma, that is the way they feel.

Mr. Moss. I see.

Senator KERR. So we understand how you feel so far as I am concerned.

Mr. Moss. I see. Thank you.

Senator KERR. Thank you very much.

Are there any questions?

We will recess until 10 o'clock in the morning.

Mr. Moss. Thank you very much, Mr. Chairman.

(By direction of the chairman, the following is made a part of the record :)

CITIZENS COMMITTEE FOR STABILIZATION, LEAD-ZINC INDUSTRY

Hon. HARRY F. BYRD,

Flat River, Mo., June 25, 1958.

Senate Office Building, Washington, D. C. DEAR SENATOR BYRD: We believe you are familiar with the situation now confronting the soft-metals industry. We have corresponded about the problem and you have indicated a desire to see it corrected. The price of lead and zinc has fluctuated during the past year and is 27 percent below that of a year ago. This area, with the largest lead mines in the Nation has a large surplus of unsold lead and zinc. Serious unemployment has already occurred and a substantial cut in working time is imminent.

It appears much of our plight is due to unrestricted imports of lead and zinc from low-wage countries. While we recognize the importance of world trade both to our economy and the furtherance of world peace, we do not believe an important basic industry should be sacrificed on the altar of expediency.

In examining the various proposals to alleviate a problem that has been mounting for a number of years, we sincerely believe the following should be considered by the Congress:

(a) A sliding scale import tax would give protection to domestic producers without seriously affecting the volume of imports. Imports are necessary because we do not produce sufficient lead and zinc for our needs.

(b) An import quota system based on the wage scale of foreign producers would aid in regulating large-scale dumping from extremely low-wage areas. Higher quotas would be assigned high-wage areas. The attached wage schedule was used by the Schwab committee in congressional hearings last year. It seems unlikely a workman earning a few cents a day could purchase goods produced by an American workman.

The theory of the Trade Agreements Act is that other countries have dollars with which to purchase our goods. At present, there is little balance between the purchasing power of a miner in South America and a miner in North America. A recent Associated Press dispatch from Ottawa quotes the Canadian Prime Minister as critical of the "imbalance of trade with the United States." Canadian wages are only slightly lower than ours. Therefore, a Canadian miner has more dollars to purchase our goods than a South African native who earns 8 cents a day.

Certainly there is no permanent cure-all but any legislation enacted should(1) Be long range to encourage exploration.

(2) Permanent enough to permit the industry to plan 4 or 5 years ahead. (3) Give first consideration to our domestic industry.

(4) Be self-sustaining with as little burden on the taxpayer as possible. (5) Be enacted speedily. Other areas are more seriously affected than we and the gravity of the situation daily grows worse.

The subsidy plan now being considered would, in our opinion, afford some relief but has no more permanency than stockpiling. The makeshift policies of our various Federal agencies over the past several years has brought the industry to its present condition.

If the Congress adjourns without enacting some legislation to relieve our distress, the future of the entire nonferrous metals industry in the United States is in doubt.

Sincerely,

Best personal regards. T. J. W.

T. J. WATKINS, Chairman.

Source: Statement by Albert Pezzati, secretary-treasurer, International Union of Mine, Mill, and Smelter Workers.

MUSHROOM GROWERS COOPERATIVE ASSOCIATION OF PENNSYLVANIA,

Re: Trade Agreements Extension.

Hon HARRY F. BYRD,

Chairman, Finance Committee,

Kennett Square, Pa., June 23, 1958.

United States Senate, Washington, D. C.

DEAR SENATOR BYRD: In order to conserve the time of the Finance Committee, by not requesting the privilege of making a personal appearance, this statement is offered for inclusion in the hearings record, and for consideration of the committee in making amendments to H. R. 12591. This statement is authorized by the board of directors of this association whose members produce more than half the mushrooms grown in the United States.

Since annual imports of canned and dried mushrooms into the United States represent, when in their fresh state, an amount equal to at least 10 percent of the domestic annual production of fresh mushrooms, the price to the farmer has been subject to many drastic declines. This situation is further aggravated in times of economic recession. This cooperative was formed at a time when farm prices were depressed. Knowing full well the impact of low-priced imported mushrooms on the welfare of the American producer, it has represented their position before the Congress on many occasions, starting with the Tariff Act of 1930.

Rates of import duty established in 1930 saved the industry from collapse during the early years of the great depression. However with the enactment of the Reciprocal Trade Agreement Act of 1934 and the 1935 bilateral negotiations for a trade agreement with France resulting in a drastic tariff reduction, any sustained stability in the industry was rudely upset. Until World War II came along, financial distress among mushroom growers was the rule rather than the exception.

As the extension of the Reciprocal Trade Agreements Act came along the use of "reciprocal" became somewhat obsolete; bilateral agreements became multi

lateral; the "most favored nations" became beneficiaries of what had been at one time intended as bilateral dealings. GATT (General Agreement on Tariffs and Trade) became the agency deciding the fate of the United States mushroom farmer and continues to do so. "Peril points" were provided, but few domestic businesses were successful in averting the damage done as a result of the actions taken under the Trade Agreements Act by the United States delegation to GATT. In at least one case, where the United States raised the tariff to protect an American industry and the skills of workmen engaged in it, "compensatory" duties were adjusted downward on certain other items of export by that country. The administration of the Trade Agreement Act has put many small businesses to a great economic disadvantage. As administered small business has suffered, and being relatively small has been unable to receive the consideration it believes it is entitled to at the hands of our own Government. Canned mushroom tariff rate adjustments downward were made as follows:

1930 act.

1936 trade agreement.

1948 GATT.

1951 GATT._.

45 percent ad valorem plus 10 cents per pound 25 percent ad valorem plus 8 cents per pound 15 percent ad valorem plus 5 cents per pound 121⁄2 percent ad valorem plus 4 cents per pound

We urge the Congress, if the act is to be extended, to give consideration to amending it along the following lines:

(1) An extension of less than 5 years as specified in the House bill. With the building up of many industries in foreign countries through our technical assistance program and United States financial aid coupled with the low-wage rates in these countries, a long-term enactment could deprive American businesses of quick relief from low-priced foreign competition.

(2) Provide the United States Tariff Commission with ratemaking power. Since tariffs are, or originally were, based on the economic needs of American producers, not originally designed as a political weapon, it seems they should be administered by a factfinding body responsible to the Congress. If the Interstate Commerce Commission has the right to govern transportation rates, which it has, then it would seem to be equally reasonable for tariffmaking powers to be entrusted to the Tariff Commission.

(3) The right to impose quotas on imports of any commodity. Certain foreign agricultural products have been subjected to the imposition of drastic quotas under another act of Congress; oil imports are at present restricted to protect domestic companies in their explorations; our State Department, for 2 years. has made what is termed "an arrangement" with Japan restricting the quantity of women's blouses to be imported lest domestic manufacturers do battle to have a substantial tariff increase made. This is one case in which it is charged to be entirely without the realm of the Trade Agreements Act.

(4) Eliminate authority for any further tariff reductions, but retain the right for increases where warranted. As a result of several tariff-cutting sessions, it would seem that bottom has been reached, and any additional concessions would be close to total free trade.

We finally urge upon the committee that every consideration be given to the reestablishment of proper safeguards for American businesses. Our foreignaid program has been of great assistance to those countries helped. Under it they have established many industries which now supply goods formerly exported by the United States. As our scale of living has advanced, our costs have increased to the point where we have priced ourselves out of some foreign markets.

Respectfully submitted.

By WALTER W. MAULE, Secretary.

The CHAIRMAN, COMMITTEE ON FINANCE,
United States Senate, Washington, D. C.:

PURPOSE OF STATEMENT

It is the purpose of this statement to present the viewpoint of the lead pencil manufacturing industry relative to pending legislation which would permit further possible reductions in lead-pencil tariff rates.

This statement is submitted by the Lead Pencil Manufacturers Association, Inc.. 60 East 42d Street, New York, N. Y., on behalf of the 18 lead pencil manufacturing companies of the United States, comprising 13 association member companies and 5 nonmember companies which have specifically approved of this statement. A full list of the participating companies is attached to this statement as exhibit A.

Nature of product

BACKGROUND OF INDUSTRY

The lead pencil manufacturing industry is approximately 100 years old in the United States. During this period, the lead pencil has been the basic writing instrument of education and industry at an economic, consistently low cost to users, in striking contrast to the general price inflation seen in other consumer products.

The lead pencil is a precision-made instrument, composed of up to 40 ingredients which are put through more than 125 operations to bring to the public the writing tool with which it is so familiar. Among the better known ingredients are California incense cedar, sheet brass, crude and synthetic rubber, graphite, clay, waxes, adhesives, pigments, lacquers, and packaging materials. The industry is a substantial contributor, relative to its size, to the import trade through its foreign purchase of clay, graphite, rubber, waxes, and other raw materials.

Makeup of industry

The lead pencil manufacturing industry is a small industry. The 18 manufacturers, who account for the entire production, range in size from firms employing less than 50 persons to those having upward of 500 employees devoted to pencil making. In total, the industry employed more than 5,000 persons as of January 1, 1958, and its payroll amounted to almost $18 million in 1957, representing 54.8 percent of the industry's $32,800,000 sales during that year. The 18 manufacturers of lead pencils in the United States have an investment in land, buildings, production equipment, and inventories in excess of $75 million. In 1957, the industry paid taxes of more than $2 million to Federal, State, and local agencies, aside from the taxes paid by its employees.

It should be noted that manufacturers of lead pencils and components thereof are important local employers in scattered areas of the United States. In Connecticut, New Jersey, Pennsylvania, New York, Georgia, Tennessee, West Virginia, Kentucky, Missouri, and central California there are local communities heavily dependent upon this industry.

ESSENTIALITY OF PRODUCT

With the development of modern industry and industrial methods, and regardless of the creation of newer types of writing instruments and writing machines, the lead pencil has shown no decline in its essential importance to our national life. Pencils are indispensable operating supplies for every branch of American life, and are essential to the maintenance of practically all functions and operations of cooperative life and business. They are required for the entire student population. They are indispensable in the pursuit of all trade and commerce, for the use of financial and insurance organizations, for the operation of all transportation and communication services and systems and for public utilities, and by all operating departments of the Federal, State, and local governments. Because production of all machines, machine products, and construction of every type starts on the drawing boards, the lead pencil is a basic tool of the designer and draftsman in preparing his original sketches, finished drawings and blueprints. The products of the industry are used not only in offices and drafting rooms, but black lead pencils, colored and copying pencils of many types are used in all factories for planning, supervising, and directing production, and for recording production data on which workers are rated and compensated.

The wood-cased pencil is a product which meets all of the standards of essentiality laid down by the War Manpower Commission in World War II, except that it is not directly utilized for combat purposes. In a large measure, it is almost like a machine tool; neither is used directly in combat, but both are essential to the manufacture of combat materials. Actually, huge quantities of pencils go into combat areas along with other small but indispensable items.

A review of lead pencil import figures during the past 50 years will show clearly that in 1914 and 1940 this country and its allies were abruptly cut off from all foreign supplies of lead pencils. Had not American manufacturers been able to fill the critical need for general and special pencils required by all civilian, military and industrial elements, a truly serious situation would have resulted. Maintenance of the pencil industry and its skills on a standby basis, to be activated only in time of war, is impossible.