When the Korean war resulted in a steel shortage here, Europe had extra steel mill capacity, but was short of coal. There was plenty of coal here, but no dollars in Europe to pay for it. We negotiated the necessary financing and arranged to have American coal move to Germany; in return we got wire rods, reinforcing bars, sheets and plates, oil country pipe and many other products. Other firms soon started similar operations and coal miners were kept on the job, the German steel industry was humming and helped keep in business many small users of steel products, building contractors lacking steel and other American manufacturing firms which might otherwise have had to shut down or curtail operations. Wire rod becomes short for the independent American wire drawers whenever business is good, since the integrated steelmakers don't have enough rod capacity to supply both their own finishing departments and those of their nonintegrated customers if all are to operate at capacity. We fill in the independents with imported wire rods during such times of shortage and help them maintain their competitive position with low-priced, high-quality raw materials when competition is tough. In 1952 and 1953, when West Berlin badly needed business to keep its workers busy and rebuild its economy, we took almost 25 percent of Berlin's exports to the United States, in the form of optical jig borers and other precision machinery, for which we built a sales and service organization. While our share of Berlin's overall exports has declined, we are still bringing over these optical jig borers, not made in the United States, but only in Germany and Switzerland. A list of their users reads like a Who's Who of American industry and many of them are used directly in important defense work. Generally, the machinery we import is of a kind not made in the United States at all, or it offers special advantages which are not commercially available here and could be reproduced only at prohibitive expense. Since 1949 we have been importing a dynamic balancing machine which, because of its unique design, can be built more cheaply than intricate electronic devices developed by the domestic industry. Its ease of maintenance, low first cost, and great accuracy has resulted in faster and improved production of rapidly rotating parts for many industrial firms, has enabled smaller repair and maintenance firms for whom other equipment would be too expensive to do a fully scientific job, and is being used in many phases of the defense program, including atomic energy. In 1952, when the pressure was on to build some heavy extrusion and forging presses in a big hurry for the Air Force, and when all domestic builders were full up with more orders than they could handle, we found a company with many parts for a press which had been on order in Germany toward the end of the war but was never delivered. We arranged, over a period of many months of complicated negotiations, a contract whereby this German company completed and delivered this 13,000-ton extrusion press to one of the Air Force's price contractors, on a fixed-price basis, thus not only furnishing the press when it was badly needed, but also saving the taxpayer at least $2 million, based on the final cost of similar projects handled on a cost-plus basis. Knowing of the 20-year headstart which the Germans had in spinning and flow-turning machines for the chipless forming of metal, we introduced these machines into the United States in 1952. Their special capabilities have given them an important place in many industrial and defense applications, particularly in the missile field where expensive metals and metals difficult to machine must be shaped quickly, accurately, and with a minimum loss of material. We also introduced exceedingly accurate gear testers for instrument gears, used in fire control, guidance, and computer systems. This and other equipment has greatly helped the United States missile and satellite program. It takes commercial organizations such as ours to keep up the flow of tech nical information between American industry and the shops and laboratories abroad. Only a constant interplay of ideas and information will produce the best results for all. Forty highly skilled technical people within our organization, with a broad background in the various metal-working fields, help maintain this flow of information. It is interesting that Germany, to name just one country, has no customs duty at all on metal-working machinery and encourages the importation of anything that will make for better production. As a result, United States ex 27629-58-pt. 1-41 ports to Germany of machinery are 21⁄2 times as high as imports from Germany. Exports are made up primarily of high-speed production equipment—the great American specialty-whereas imports tend to be in the "fussy' specialties. The customs duty we pay on machinery ranges from 13 to 25 per cent ad valorem. We have introduced to the United States new wire-drawing and wire-forming machines, not because they are cheap in price but because they offer developments which are unavailable domestically. This makes for profits for American industry and better and cheaper products for the consumer. Our machine tool division has introduced induction hardening of large gears, special lathes, special spline millers, a new type of universal milling machine, unusually precise thread grinders, a new system of electropolishing, precision roll forming of turbine blades, and is constantly searching for other new and improved products and processes that can be introduced for the benefit of American industry and the defense program. It takes time and costs money to research such products and processes and to determine whether and how they fit into the American industrial picture, sales and service engineers must be trained, service and spare parts must be established. Many details must be adjusted to conform to American standards and shop practices. It usually takes 5 years between initial research on a new process or product and commercial-scale importation of the product or sale of a license for the process. Of course, many of these things never prove out commercially at all. Profits in this business are too thin to allow either substantially higher tariffs or shorter planning. While we pay about $1 million in customs duty a year, our business is like any other small United States business in that we can never be sure of ending the year in the black. Thus, planning for at least 5 years is a must for our kind of business. Contributing benefits to industry, defense, the consumer, and the United States Treasury, we contend that a short-term extension of reciprocal trade is not enough to justify the time and investment needed to develop particularly those things which will benefit the economy the most, and that we must be allowed to plan on a 5-year cycle. We hope that reciprocal trade will be extended by 5 years. Hon. Senator HARRY F. BYRD, Chairman, Senate Finance Committee, KURT ORBAN, President. Senate Office Building, Washington, D. C. DEAR MR. BYRD: I wish to record my views in support of the renewal of the Reciprocal Trade Agreements Act and particularly of the 5-year extension of the act provided in House bill 12591 currently under Senate consideration. The most important issue in the legislation now before you and your committee is, I think, that of preserving and strengthening our position of free world economic and political leadership. The accomplishment of these objectives will require judicious and concerted effort to separate selfish minority interests from what is best for the country as a whole. Throughout my businesslife I have been active in the mining industry, both here and abroad, and I believe that the hue and cry raised by certain domestic mining executives, in their efforts to put their own selfish interest above the national welfare, demonstrates acute shortsightedness. In the face of the plain fact that the United States no longer possesses enough mineral resources within its own borders to meet present requirements, not to mention the increased demands expected in the next few years, these special pleaders have pressed their demands for restrictions on imports of copper, lead, and zinc. Today's business recession has increased this clamor for Government action to choke off foreign competition. The truth of the matter is, however, that unless the United States reasserts its free world leadership by facilitating, rather than restricting, international trade, the slump we now experience will be as nothing to what will follow when foreign countries, will, of necessity, have to decrease their purchases from us to minimal levels. Not only are we dependent upon foreign countries for raw materials, but United States exporters have a vital stake in the economic growth and expansion of such countries. For if a nation which depends for its well-being on exports is denied access to our markets, it soon exhausts the dollar reserves it requires to purchase United States machinery and equipment. And since our exports of these manufactured goods provide in the aggregate over 4,500,000 jobs in this country, it is obvious that reduced dollar income abroad jeopardizes a major segment of our economy at home. It is vitally important, therefore, that today's appeals to increase trade barriers, to scuttle the reciprocal trade movement, to substitute expedience for principle in the conduct of our foreign economic relations, should be understood and recognized for what they are the special pleading of vocal minorities. For these reasons, I strongly support a full-year extension of the Reciprocal Trade Agreements Act as embodied in House bill 12591, and will appreciate your courtesy in having these views recorded for consideration by the committee as a whole. Respectfully yours, ROBERT P. KOENIG. MILWAUKEE ASSOCIATION OF COMMERCE, Senator HARRY F. BYRD, Chairman of the Finance Committee, Senate Office Building, Washington, D. C. DEAR SENATOR BYRD: The Milwaukee Association of Commerce respectfully requests permission to present this statement in support of the Reciprocal Trade Agreements Act. On March 6 the board of directors of this organization voted that strong representations be made to your committee favoring the legislation relating to the Trade Agreements Extension Act of 1958. This action by our board of directors resulted from a recommendation of our international trade committee, composed of specialists in all phases of overseas commerce. Notwithstanding a few isolated cases of hardship, we feel that on the whole, Milwaukee and Wisconsin commerce, industry and agriculture have materially benefited over the past 24 years under this act. We also feel that extension of the proposed act for 5 years to June 30, 1963, is essential and vital to the establishment of a strong negotiating position with the 6 countries that formed the European Economic Commission (EEC) on January 1 of this year to develop a Common Market (CM) in 3 stages of about 4 years each. We are of the opinion that it is necessary for the United States to negotiate with substantial strength during the coming 4 years. A 5-year extension of the proposed act will materially contribute to this. It is for the reasons listed above that the board of directors of this association wholeheartedly supports H. R. 12591 without amendment, and urges that your committee take positive action favoring this bill. Sincerely, Senator HARRY F. BYRD, Chairman, Senate Finance Committee, Senate Office Building, Washington, D. C. LESTER OLSEN. NEW YORK, N. Y., July 1, 1958. DEAR SENATOR BYRD: We desire to place ourselves on record with the Senate Finance Committee as being very strongly in favor of the Trade Agreements Extension Act of 1958, H. R. 12591, as passed by the House, without any amendments whatsoever. This weekly magazine, established in 1919, has for almost 4 decades been recognized as spokesman for United States exporters, including both independent export organizations and the export executives of manufacturing industry. The industries represented by our readership have been recognized, both by the leaders of organized labor and by the United States Department of Labor, as paying higher wages and providing bettter working conditions than is true of those minority industries which claim the need for protection against import competition. While we recognize that the marginal or fringe units in some industries do suffer from import competition, it is manifest that the allegations of such industries are grossly exaggerated and in any event, we believe that any curtailment of the growth of United States exports, which could not fail to result from any further impediment to imports, would cause far more serious unemployment and more dislocation to the United State economy than has resulted or could conceivably result from import, competition, as regards the overall economy of the United States. We believe that those industries which have proven themselves able in foreign markets to sell their products, produced by the highest paid labor in the world, constitute the backbone of America's industrial economy, and that such industries are far more meritorious of governmental solicitude than are those other industries which, in most cases for a multiplicity of reasons based only in small part on import competition, have not proven the ability to make as productive use of the abilities of American workers. Since it is manifestly impossible through political action to give special privilege to one group without at least equally injuring some other group, we believe that the outcome of the indirect competition between different American business enterprises, which takes place through the transaction of two-way foreign trade, should be left to the normal functioning of economic forces and should not be distorted by governmental intervention through protective devices, except in cases where it is clearly demonstrable that such action is absolutely essential to the welfare of our entire population. Respectively submitted. REDINGTON FISKE, Editor. LINEN TRADE ASSOCIATION, INC., Hon. HARRY F. BYRD, Chairman, Committee on Finance, United States Senate, Washington, D. C. DEAR SENATOR BYRD: Our association was organized in April 1891 and is the representative trade organization of United States importers of pure-linen fabrics, as well as household and decorative articles made of linen. We wish to go on record as strongly in favor of a 5-year extension of the Trade Agreements Act with new bargaining power. Specifically, we favor authorizing the President to reduce existing rates of duty by as much as 25 percent of such rates in appropriate cases. We wish to register our strong objection to any shorter extension of the act than the 5-year period proposed in the House-approved bill. We are vigorously opposed to the proposed amendment to the escape clause which would permit the President to proclaim increases in existing rates of duty up to rates that are 50 percent above the July 1, 1934, duty rates. On the type of fabrics and articles which the members of our association import this would mean the possibility of a 600-percent increase over present rates. In the escapeclause case involving certain linen toweling the duty rate was increased from 10 percent ad valorem to 40 percent ad valorem. This merely had the effect of destroying the tariff advantages which the United Kingdom and Belgium had for years on this commodity over the Iron Curtain countries of Poland and Czechoslovakia. The single domestic company that this increase was intended to favor manufactures only very coarse linen towelings, which are not comparable to the fine goods produced in Belgium and Northern Ireland. The result, therefore, of the escape-clause increase in this case has merely been to expose this domestic manufacturer to intensified competition from producers of coarse goods in Poland and Czechoslovakia. Will you please insert this letter in the record of the current hearings on H. R. 12591? Respectfully yours, Hon. HARRY FLOOD BYRD, Chairman, Committee on Finance, Senate Office Building, Washington, D. C. STEWART C. CARSE, President. CHUBB & SON, New York, N. Y., July 1, 1958. DEAR SENATOR BYRD: May I request that you include the following expression in the printed record of the hearings on H. R. 12591, Trade Agreements Extension Act of 1958: I strongly urge the committee to recommend approval of this bill as passed by the House and without further amendment. I believe that a full 5-year extension is the minimum period necessary for adequate stability and continuity in our trade policy, and that the 25-percent reducing authority is equally a minimum if we are to make reasonable progress in the reduction not only of our own trade barriers but those of other countries in the free world. In recent months our exports have declined from the unprecedented peaks of the early months of 1957; part of this decline is probably quite normal but another element in the decline can easily be attributed to uncertainty on the part of the foreign buyer as to the future of our trade policy. To restore confidence abroad and thus to insure that our exports do not suffer the kind of decline which would seriously affect our already slipping economy, it is essential that this bill be passed in adequate form. The committee has been told many times of the importance of our trade policy to our foreign policy and to our security policy. There is no question in my mind that these statements are true and that any failure on our part to continue a liberal trade policy could well be disastrous for us all. Sincerely yours, J. RUSSELL PARSONS. STATEMENT OF Ross CONNELLY, S. M. WOLFF Co., 60 HUDSON STREET, Hon. HARRY FLOOD BYRD, Senate Office Building, Washington, D. C. S. M. WOLFF Co., New York, N. Y., July 1, 1958. SIR: I wish to record my support for H. R. 12591, Trade Agreements Extension Act of 1958. I urge the Commission on Finance to recommend to the Senate its approval as passed by the House, and without further amendment. We are a relatively small exporting and importing firm. Obviously, we are in favor of legislation that promotes a liberal trade policy on the part of the United States, a policy designed to encourage expansion of our foreign trade. That, of course, would benefit our particular business-but it would also benefit the entire economy. International competition is one of the major forces which press upon our domestic costs and, thereby, enable us to provide quality goods at the lowest possible price. We believe that this is in the interest, not only of our Nation's consumers, but in the interest of the entire Nation and contributes to the kind of expanding economy which we all seek and to the higher standards of living which we have come to expect. It is our feeling that this legislation is thus not particular legislation to benefit particular groups, such as importers, but rather legislation which is in the fundamental interest of the entire country. It is our belief, however, that the consumer's interest has not been sufficiently stressed in this debate on trade policy. As importers, our major business concern is to supply goods which will attract and satisfy the American consumer. When imports are limited, or when tariffs are high, the price for imported goods to consumers must be high. This limits their choice in the market. It restricts, by artificial means, a wide range of choice at reasonable prices, which any free American consumer is entitled to. Our real standards of living depend, of course, upon the prices we pay for the goods we buy. If there is real competition between these goods, it is clear that prices will be lower and our standards of living will increase. This, in its simplest form, is one of the major purposes of the reciprocal trade program. The committee has heard many times that a reduction in tariffs will endanger or injure American domestic industry. I think, there may be instances of this injury, in rare cases, but I would urge this committee to discount many of the complaints which it may hear. No businessman likes competition, if he can avoid it, and too many domestic industries seize the opportunity presented by these periodical renewals of the Trade Agreements Act to voice their objections in very strong terms to such competition. It is curious, but true, that they feel perfectly justified in attempting to prevent competition from abroad, while at the same time, calmly accepting domestic competition as inevitable. Also, many of them have no qualms when accepting export subsidies from our Government, which of course, are mainly on United States farm products. So far as benefits to the economy are concerned, there is essentially no difference between foreign competition and |