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Fourth, the Cooperative League continues its long standing support for the creation of an Organization for Trade Cooperation, the OTC, which would serve as a housekeeping mechanism for the agreements which have been made and are subject to continuing negotiation under the General Agreements on Tariffs and Trade.
Multilateral negotiations through which these agreements are reached make it possible for the United States to secure concessions from other countries for any tariff reduction which we make.
The general level of tariffs may be reduced and a high level of trade may be attained through such procedures.
In other words, the negotiations under GATT allowed for shrewd Yankee bargaining to see that we achieve a measure of freer trade accomplished over a long period of time.
Fifth, the Cooperative League believes that the national interest calls for a continuing increase of imports and exports as an effective program to increase the strength of the free world.
Our imports have grown from $2 billion per year in 1935, when the reciprocal trade program was launched, to $13 billion last year.
Our exports which stood at $2.3 billion in 1935 have grown even faster than our imports. Last year they had climbed to $20 billion. The reduction in our tariffs by an average of 75 percent since 1934 has produced no overwhelming flood of imports. It has provided a substantial growth in both imports and exports.
Actually our exports have risen more rapidly than have our imports.
Countries around the world can buy American products only if they have an opportunity to sell to us. We should make an all-out effort to increase the flow of international trade among the countries of the free world.
As this committee is painfully aware the Soviet Union has launched an all-out drive of economic competition. This Soviet penetration can be met most effectively if we engage in a stepped-up program of freer trade among the free nations.
It is impossible to achieve free trade in the immediate future, but national and international policy would indicate that we should move gradually in that direction.
This is the most healthy way to meet Soviet competition. It is a constructive way to build our economies at home and abroad for the greatest possible good for the democratic forces of the world.
As the Cooperative League pointed out in its earlier testimony: No man is an island unto himself, and neither is any nation. We are part of the democratic free world, engaged in an intense struggle with the forces of communism. We need friends and allies as much as they need us; and we are not, if we can help it, going to let any part of the free world go by default
There is one suggestion I would like to make, Mr. Chairman, if I may, which has grown out of the discussions which have been held here this morning.
Back in 1951, just before the Korean war, the Government had launched a study on the "dollar gap.” Because of the Korean war, much of the "dollar gap” disappeared, because we automatically were forcing so many things abroad through our defense program.
That dollar-gap program, the study of the dollar-gap problem, drew a great deal of support from the economic organizations of the country which wanted to do something about it.
We were all disappointed that the study was abandoned.
Actually one of the great problems in getting more trade around the world is to get at that problem of the dollar gap, and I wish some committee of the Congress, perhaps this committee, would initiate a study of that very serious problem so we could get down to another of the fundamentals.
In the meantime we need to expend the present reciprocal agreements in order to hold the line,
Senator CARLSON. Well, Mr. Campbell, we appreciate very much your statement.
I was interested in your comment regarding this dollar-gap study. At the opening of this hearing last Friday, Senator Flanders of Vermont, stressed the fact that he was offering an amendment to this bill which would provide a 2-year study by people who were competent to get into this field of trade and international trade and domestic problems with regard to trade, and hoped that it would be a part of this bill, and that the study would be made. I assume if that is approved by the committee and approved by the Congress that this dollar-gap situation would be given consideration.
Mr. CAMPBELL. Very fine.
Senator CARLSON. And I gathered from the discussion around the dais here there was a lot of interest at least in Senator Flanders' proposals.
Mr. CAMPBELL. Very good.
Senator CARLSON. I do not happen to have a copy of your statement, but the Cooperative League, I think you mentioned the organizations that are involved at the beginning. Would you repeat that for me?
Mr. CAMPBELL. Yes. It is an organization made up of consumer and purchasing and service-type cooperatives which include a great number of the farm supply co-ops, consumer goods co-ops, insurance organizations and credit, farm supply, housing, and medical care.
It is a general organization that carries forward education, promotion, and development work for 13 million families that are members of the Cooperative League through these various types of cooperatives;
Senator CARLSON. We have a very fine cooperative organization in the Middle West, in Kansas City headed by Mr. Cowden. Is that group a member?
Mr. CAMPBELL. It is not a member of the Cooperative League but Mr. Cowden was vice president of our organization for many years and we hope he will be associated with us again soon.
We are very happy, Senator, that you recommended a man from his organization, Mr. Dwight Townsend, as director of cooperative housing in the FHA.
You will be pleased to know that the cooperative housing program has moved forward very rapidly during the last couple of years, part of it at least as a result of your recommendation for that appointment.
Senator CARLSON. Well, I was very pleased to recommend this man for this appointment in this place and I understand he is doing a very fine piece of work. Mr. CAMPBELL. That is right.
Senator Carlson. One other thing that you suggested I thought was of great interest and I think it is going to be of more continuing interest and that is in regard to this adjustment act with making plans to take care of some of the injuries to industry. I think we have had problems in the past but I am not so sure we will not continue to have more of them in the future.
Mr. CAMPBELL. That is right.
Senator CARLSON. I have a feeling we will have to devote some time to that and that should be included in a study if we should have one.
Mr. CAMPBELL. I believe that should be done at the present time. Some minimum step should be taken at least at this session to get the principle of the adjustments made. No matter what happens in the flow of an economy this size somebody is bound to be hurt, and there ought to be adjustments.
Senator CARLSON. That is right.
Mr. CAMPBELL. This would be a kind of an insurance policy to take care of any injured industry or injured group of workers in the change of economic policy just as we have in any other form of loss to an individual or group or to the economy.
Senator CARLSON. Mr. Campbell, I appreciate your statement and I think you made a very fine statement and I thank you. Mr. CAMPBELL. Thank you very much.
Senator CARLSON. Mr. James R. Sharp, Imported Hardwood Plywood Association and American Association of Hardwood Plywood Users.
Senator CARLSON. Mr. Sharp, we are very happy to have you here, and we will be glad to have your testimony. You may read your statement or you may have your statement placed in the record and talk extemporaneusly, any way you wish to handle it.
STATEMENT OF JAMES R. SHARP, SHARP & BOGAN, ATTORNEYS
AT LAW, WASHINGTON, D. C., REPRESENTING VARIOUS IM. PORTER GROUPS
Mr. SHARP. Thank you, Mr. Chairman.
Since I have a fairly well worked out statement and will attempt to be quite brief, I will at least cover in general the statement which I I have prepared.
My name is James R. Sharp. I am an attorney with offices at 1108 16th Street NW, Washington, D. C. My firm, Sharp & Bogan, represents numerous associations and companies who have a vital stake in the trade between the United States and other countries.
Many of our clients are both exporters and importers. These firms have thus been in a position of witnessing at first hand the immediate effect which the volume of United States imports has had upon our volume of exports. Day to day, month to month, and year to year, they wrestle with the problem of the shortage of dollars needed by foreign purchasers to pay for United States exports produced in United States manufacturing plants by the United States labor force.
Others of our clients are associations of importers and users of imported products who have banded together to support a United States trade policy which will provide long-range certainty and stability in our trade relations with other free world nations as well as to expose the frequently false or grossly exaggerated claims of United States industries as to the effect of imports upon their businesses.
I am not here to speak in relation to specific commodities, but instead to urge you to support H. R. 12591, as passed by the House. However, to give you an idea of the diversity of interests for whom I speak today, I may say that they include, among others, the following:
The Imported Hardwood Plywood Association.
I should like to delete the next, which is The American Importers of Brass & Copper Mill Products, since I do not represent them now.
The American Importers of Malleable Pipe Fittings. The American Association of European Carpet Importers. The American Association of Wood Pulp Importers. The Importers of Swedish Hardboard, and The Scandinavian Mink Importers. Gentlemen, H. R. 12591 is an outgrowth of one of the most thorough and extensive studies the Committee on Ways and Means of the House, the Democratic and Republican leaders of the House, and the administration have ever conducted on the subject of our foreign trade policy. While no one can claim the bill is perfect, it is nevertheless a good bill which commands your wholehearted support, and I urge that you give it that support.
The most important consideration is the fact that the bill arms this Nation with an effective weapon with which to fight the international economic and trade war which Nikita Khrushchev publicly declared upon us a short time ago.
In this respect the bill provides a means for long-range cooperation with our friends in the free world, permits us to combat the Soviet offensive and to assure mutual prosperity. It provides a means with which to halt the insidious Soviet penetration and possible eventual absorption of our historic export markets.
It provides both the means and the needed time with which to deal effectively and intelligently with the regional common markets and customs unions which have been formed or which are in the process of negotiation.
But while doing so, the bill carries safeguards beyond those in the existing statute for the protection of those industries who may suffer or be threatened with serious injury by reason of imports.
In the House committee and on the floor, a substitute bill was offered for H. R. 12591. This was the so-called Simpson bill, which was backed by a large and diverse number of special interests. In my opinion it violated the Constitution. As I was the only witness before the Committee on Ways and Means who raised this issue in my testimony, it was indeed gratifying to me to find that the constitutional defect in the Simpson proposal was so clearly and forcefully brought to light during the course which H. R. took through the Ways and Means Committee and the House of Representatives.
The fundamental issue--that is, the lack of congressional authority to legislate in a vacuum without the participation of the Presidentwas clearly and succinctly discussed by both the majority and the minority of the Committee on Ways and Means in the report accompanying H. R. 12591. This is one issue, I might say, on which the divided Ways and Means Committee agreed.
As many of the special interests who back this proposal in the House are among those who will testify before this committee, a proposal along the lines of Mr. Simpson's bill will undoubtedly be made to your committee and on the floor of the Senate. While the constitutional objection should suffice to counter any such proposal, there are many other aspects of the Simpson approach which reflect its completely unsound and unwise character.
In view of the fact that it will undoubtedly be urged upon you in this hearing, I want to call your attention to some of its insidious aspects.
The Presidential discretion in escape actions to allow for consideration of broad foreign policy issues is imperative if you are not to make a farce and shambles of our foreign policy. Similarly, Presidential discretion in escape actions to allow for consideration of broad domestic issues is imperative—for our economic well-being and the preservation of our democratic way of life depends upon the extent to which the interests of the Nation as a whole are weighed against the interests of small segments of our producing facilities.
The Simpson proposal would permit the President's discretion to be exercised only if a resolution approving his considerations could run the gauntlet of the appropriate committees of the House and Senate and thereafter be adopted by both Houses of Congress.
It seems to be clear that if the Congress can by such means control the Executive action of the President in carrying out the Reciprocal Trade Agreements Act, it can and will be encouraged to assert an ever-increasing number of similar controls in carrying out or executing other laws.
Mr. Chairman, to my mind the separation-of-powers principle upon which our Constitution was founded was the most masterful and sound principle incorporated in that great document. If we fail to preserve this principle in violate, we forfeit the armor which throughout the history of our Nation has protected the rights of our people. The Simpson proposal is an insidious proposal for it would clearly violate the principle of the separation of powers.
Another feature of which you should be aware is the fact that this proposal would remove the Tariff Commission from its historic role of a body which is limited to factfinding and to recommendations based upon such findings.
As you know, the Tariff Commission's findings take no consideration of overall domestic or foreign policies. The Commission simply is not sufficiently informed on such matters to be capable of doing so. This is not and never has been the Commission's role.
But the Simpson proposal would, overnight, convert the Tariff Commission into a final adjudicatory body in escape matters whenever a resolution approving the President's considerations does not get through the appropriate committees and through both Houses of Congress, whatever may be the reason for its failure. Yet the Commission in its new role would not have either the authority or the necessary background to consider factors relating to our overall foreign policies or our overall domestic policies. The Commission itself, I believe, abhors the idea of being placed in such a role.
In fact, Mr. Chairman, the Commission testified at length before the House Ways and Means Committee and, with the exception of the chairman, who said of course he would take upon the Commission any function which the Congress gave it, all of the other Commissioners specifically stated that they believed they had neither the ability nor