Senator FREAR. Does that jeopardize our time by that statement; does it?

Senator MALONE. I don't know anything about the time. I know that you have got something here you are trying to force through here without any proper questioning and I think maybe you are going to do it.

Maybe you are going to regret it afterward.

I would like to ask a couple of more questions.
Senator FREAR. Surely.

Senator MALONE. That is what the Constitution of the United States says.

Mr. HOOKER. Yes, sir.

Senator MALONE. That Congress shall regulate foreign trade and adjust the duties, excises, and imposts that we call tariffs? Mr. HOOKER. Yes, sir.

Senator MALONE. Article I, section 8.

But this Congress in its wisdom, passed an act, in 1934, and have extended it 10 times, that washed their hands of that constitutional responsibility and put it in the hands of an Executive. The Constitution has already put in the hands of the Executive the responsibility of fixing foreign policy.

The Constitution pointedly separates the two and Congress tied them together again under the Executive, and he does this without any reference to Congress whatsoever.

Mr. HOOKER. That is right. It is our hope, sir, that Congress will take back the constitutional powers which were presented to them back in 1789.

Senator MALONE. All you have to do is sit still and let this act expire and you would have it.

Mr. HOOKER. That would suit me fine.

Senator MALONE. If we let that act expire then do you understand that the procedure is to go right back to the 1930 Tariff Act under which the Tariff Commission adjusts the tariffs on what you might call a basis of fair and reasonable competition. They adjust that flexible tariff on each product at all times either on their own motion, or request of the President or Congress or consumer or producer, to equal substantially that difference between the cost of producing an article here not the high cost or low cost, but the reasonable costand producing that same article or a like article in the chief competing foreign country and that is their tariff.

Mr. HOOKER. That is right.

Senator MALONE. That is what you want, isn't it?

Mr. HOOKER. That is right; yes.

Senator MALONE. And that is a principle upon which you can go to a bank and borrow money; is it not?

Mr. HOOKER. I agree with you thoroughly, sir.

Senator MALONE. And you cannot borrow money under the current conditions at all.

Mr. HOOKER. It becomes increasingly difficult.

Senator MALONE. Some of these chemical companies-I do not remember the names of them, we have 3 or 4 chemical or electrochemical companies in Henderson, Nev.

Mr. HOOKER. Yes, sir-Stauffer.

Senator MALONE. Yes; and they are slowly going out of business. They laid off 500 men in the titanium industry last year because we imported more titanium, that new high-ratio weight-strength heatresistant metal, from Japan where they paid 22 cents an hour for labor, as against what they paid in Henderson, than was produced at the Henderson plant which formerly produced half of our domestic consumption.

Mr. HOOKER. Yes, sir.

Senator MALONE. Half of it was produced in New Jersey by Du Pont?

I have not talked to any of them but I expect they may take care of them, too. The boys down in Henderson just could not understand. They had nice houses that they are paying for and they thought everything was all right and suddenly they are on the street

Mr. HOOKER. Yes, sir.

Senator MALONE. And they are in the same condition all over the United States: 6 million of them.

Mr. HOOKER. That is right.

Senator MALONE. What happens if we don't extend this act and it dies on midnight of June 30?

After 60 days' notice to the Secretary-General of the United Nations any product under a multilateral agreement would revert to the Tariff Commission, an agent of Congress, and the tariff could be regulated flexibly on the basis we just explained.

Upon 6 month's notice to the nations with which we have bilateral trade agreements made by the Secretary of State, those products would revert to the Tariff Commission on the statutory rate to be regulated in the same manner.

You understand that?

Mr. HOOKER. Yes, sir.

Senator MALONE. In my opinion there is no amendment that is going to help you people, if we leave it in the hands of the White House, at the discretion of one man, no matter who he is-Roosevelt, Truman, Eisenhower, or anybody else because it is not done on any principle.

There is no principle attached to it at all except one man's opinion that it will help the United States in the future sometime.

How anybody could vote for it I could never understand.

Mr. HOOKER. We agree with that, sir, with the possible exception that that one man, the President, because of his peculiar position might possibly be in possession of knowledge that affected the Nation's interests, that would justify him in making a decision, but that decision should clearly be tempered by all of the recommendations that the experts in the Tariff Commission should make and it should be possible for the Congress to tell that one man that he is wrong.

Senator MALONE. Well, the Constitution of the United States says that the President of the United States shall tell the Congress the state of the Nation every year

Mr. HOOKER. Yes.

Senator MALONE. And he can come up specially any time he thinks he has some information that we ought to have and Congress can act and it does act

Mr. HOOKER. Yes, sir.

And we think it should act in this area more often.

Senator MALONE. But the President and Congress said to chemicals, "You should never be in that position," but you are in it.

Mr. HOOKER. We certainly are.

Senator MALONE. Now I will tell you what some of the chemical companies have told me who have quit and are going to quit. They are going to put their money in Germany and other foreign nations. They said they did not want to do it; they told me that.

Mr. HOOKER. That is the distressing feature, sir, that so many of the chemical companies are putting their plants, making their investments, in foreign countries, and bringing their chemicals into this country.

Senator MALONE. Who is to blame?

It is the Congress, is it not?

Mr. HOOKER. Sure it is the Congress.
Senator MALONE. All right.

It is not your fault, if you have to do that, Mr. Hooker.
Mr. HOOKER. No, sir.

Senator MALONE. In order to survive?

Mr. HOOKER. That is right.

Senator MALONE. But it is our fault for making that necessary for you to survive as a chemical company.

Mr. HOOKER. I believe that is a correct statement, sir.

Senator MALONE. Now all foreign nations understand the effect of shading a tariff or shading a subsidy or something because most of them have lived by their wits for 300 years.

Mr. HOOKER. Yes, sir.

Senator MALONE. England thoroughly understands it, France understands it, Belgium understands it.

We don't understand it. That when you have a tariff on anything that makes the difference in the costs of production then there is no advantage in putting your plant in another country and your investments stay at home.

Mr. HOOKER. That is right.

Senator MALONE. But when our tariff is lower so that there is no protection and they protect their industries, which they do

Mr. HOOKER. They certainly do, sir.

Senator MALONE. We are the only free-trade nation in the whole world. Every other one of them has manipulation of their currency for trade advantage in terms of the dollar, or they have quotas or they have import permits or exchange permits, or all four.

Mr. HOOKER. Yes, sir.

Senator MALONE. And they do not live up to their part of the trade agreements, just as the rules of GATT say they need not doMr. HOOKER. That is right.

Senator MALONE. Therefore, for a company or an individual to make any profit and to get their market they must go there to produce. Mr. HOOKER. Yes, sir.

Senator MALONE. And then, in doing that, can get our market under the free trade.

Now, anybody who does not understand that should not be in this body and if he understands that and votes for it, I do not understand it.

Mr. HOOKER. Well, we do not either, sir.

Senator MALONE. So that is the only thing I really have to say about it.

I liked your testimony and I think you know what you are talking about and you are in a very important industry.

Mr. HOOKER. Thank you, sir.

Senator MALONE. And all I will say in closing is it remains to be seen what Congress will do.

If they do extend this act, I think we will have a special session before the first of the year because unemployment will be such that you just cannot stand it in this country.

Mr. HOOKER. If so, I should like the privilege of addressing this body again, sir.

Senator MALONE. You certainly may as far as I am concerned. That is all.

(The documents referred to are as follow:)

THE PURPOSE OF AMENDMENT (A)

Amendment (A) to H. R. 12591 would extend the act for a period of 2 years and retain the authority in the President to modify rates of duty during this 2-year period. The formula utilized is essentially that which was enacted by the Congress in the Trade Agreements Extension Act of 1955, modified to fit the 2-year extension period.

PROPOSED AMENDMENT (A) TO H. R. 12591

On page 1, line 9, strike out “1963” and insert in lieu thereof "1960”.

On page 2, beginning with line 3, strike out through line 6, on page 6, and insert in lieu thereof the following:

"(1) Paragraph (2) (A) is amended by striking out "January 1, 1945" and by inserting in lieu thereof "July 1, 1934".

"(2) Paragraph (2) (D) is amended to read as follows:

"(D) In order to carry out a foreign trade agreement entered into by the President on or after July 1, 1958, and before July 1, 1960, decreasing (except as provided in subparagraph (C) of this paragraph) any rate of duty below the lowest of the following rates:

"(i) The rate 10 per centum below the rate existing on July 1, 1958. "(ii) In the case of any article subject to an ad valorem rate of duty above 50 per centum (or a combination of ad valorem rates aggregating more than 50 per centum), the rate 50 per centum ad valorem (or a combination of ad valorem rates aggregrating 50 percentum). In the case of any article subject to a specific rate of duty (or a combination of rates including a specific rate) the ad valorem equivalent of which has been determined by the President to have been above 50 per centum during a period determined by the President to be a representative period, the rate 50 per centum ad valorem or the rate (or a combination of rates), however stated, the ad valorem equivalent of which the President determines would have been 50 per centum during such period. The standards of valuation contained in section 402 or 402 (a) of this Act (as in effect, with respect to the article concerned, during the representative period) shall be utilized by the President, to the maximum extent he finds such utilization practicable, in making the determinations under the preceding sentence.

"(3) Paragraph (3) (B) (i) is amended to read as follows:

“(i) if the total amount of the decrease under the foreign trade agreement does not exceed 10 per centum of the rate existing on July 1, 1958, the amount of decrease becoming initially effective at one time shall not exceed 5 per centum of the rate existing on July 1, 1958;

"(4) Paragraph (3) (B) (ii) is amended to read as follows:

"(ii) except as provided in clause (i), not more than one-half of the total amount of the decrease under the foreign trade agreement shall become initially effective at one time;

"(5) Paragraph (3) (C) is amended to read as follows:

"(C) No part of any decrease in duty to which the alternative specified in paragraph (2) (D) (i) of this subsection applies shall become inititally effective after the expiration of the two-year period which begins on July 1, 1958. If any part of such decrease has become effective, then for purposes of this subparagraph any time thereafter during which such part of the decrease is not in effect by reason of legislation of the United States or action thereunder shall be excluded in determining when the two-year period expires."

THE PURPOSE OF AMENDMENT (B)

A purpose of the amendment is to permit interested parties to make representations to the appropriate agencies of the Government concerning products on the list transmitted by the President. In the past industry sometimes has been compelled to guess which chemical products are intended to be the subject of negotiation, since many provisions of the chemical schedule of the tariff act provide for classes of chemicals rather than listing hundreds of specific chemicals by name. There are thousands of organic chemical products which are now or are likely to be articles of commerce. Members of the industry may be unaware that a reduction in duty is contemplated on specific products which they manufacture. On the other hand, members of the industry are put to needless expenditures of time and money investigating chemical lists to find later that specific products in which they are vitally interested are not intended to be the subject of trade agreement negotiations.

This difficulty could be simply resolved by a statutory requirement that the list of articles indicate the commercial name or designation, as well as the paragraph or other provision of the tariff act under which each such article is classified for duty.

Another purpose of the amendment is to utilize the long experience and expert knowledge of the Tariff Commission to assist the President in the important task of preparing for negotiations of a foreign trade agreement. The amending language does not take away from the President the initiative of sponsoring trade agreements but places at his disposal all of the material concerning the volume of domestic production, prices and other data which has been carefully prepared over a period of many years by the Commission; the Commission also, over a period of many years has acquainted itself with economic conditions in foreign countries and regularly receives reports from the Departments of State, Commerce, and other executive agencies which it reviews and evaluates.

The Commission also is in a position to advise the President whether existing rates of duty should be increased on any article imported into the United States either by reason of prior investigations under the peril point or escape clause provisions of the law or because of its practice of compiling import statistics and of its experience in evaluating the competitive impact of imports upon domestic producers of like or similar articles.

It seems desirable that the Congress should be informed as to the Tariff Commission's advice in such a manner that the proposed negotiations will not be jeopardized. To that end, the suggested amendment would require that the Commission's advice to the President not be disclosed until the peril point investigations have been completed. The Congress should be made aware of the Commission's advice to the President that additional import restrictions should be imposed upon certain articles in order that the Congress may be informed whether the executive department is carrying out the purposes of the law. PROPOSED AMENDMENT (B) TO SEC. 3 (A) OF THE TRADE AGREEMENTS EXTENSION ACT OF 1951, AS AMENDED, (19 U. S. C., SEC. 1960 (A))

H. R. 12591 amends the third and fourth sentences to subsection (a) by striking out “120” days and inserting in lieu thereof "6 months."

Further amendments are as follows:

The first sentence of subsection (a) of section 3 of the Trade Agreements Extension Act of 1951, as amended (19 U. S. C., sec. 1360 (a)), is amended to read as follows (matter in brackets deleted; new matter italic):

"SEC. 3. (a) Before entering into negotiations concerning any proposed foreign trade agreement under section 350 of the Tariff Act of 1930, as amended, the President shall request the advice of [furnish] the United States Tariff Commission (hereinafter in this Act referred to as the 'Commission') [with] in the preparation of a list of all articles imported into the United States to be considered for possible modification of duties and other import restrictions, im