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“(2) Within 60 days following the date on which the report referred to in the second sentence of paragraph (1) is submitted to such committees, unless both Houses of the Congress shall adopt a concurrent resolution disapproving of the President's determination made pursuant to provisions of paragraph (1), the finding of the President shall supercede and replace the report of the Commission. Where the Congress by such concurrent resolution disapproves of such finding, the President shall within 15 days thereafter take such action as may be necessary to make the adjustments, impose the quotas, or make such other modifications as were found and reported by the Commission to be necessary. For the purposes of this paragraph, in the computation of the 60 day period there shall be excluded the days on which either House is not in session because of an adjournment of more than 3 days to a day certain, or an adjournment of the Congress
sine die.'" Senator FREAR. Senator Bennett? Senator BEN NETT. No questions.
Senator FREAR. Thank you very much, Mr. Hooker, for this testimnony, and I am sure that you have gained something from the questio is that were asked of you also, as I know the members of the committee have gained from questioning you.
Mr. HOOKER. I appreciate the opportunity of appearing here, gentlemen.
Senator FREAR. Thank you all very much.
(Whereupon, at 1:15 p. m. the committee was recessed, to reconvene at 2:30 p. m. of the same day.)
AFTERNOON SESSION Senator CarlsON (presiding). The committee will come to order.
The next witness is Mr. Bronson Trevor, American Coalition of Patriotic Societies.
Mr. Trevor, we are very happy to have you here before the committee, and we would be glad to have you make a statement, read your statement, or proceed in any way you wish.
STATEMENT OF BRONSON TREVOR, REPRESENTING THE
AMERICAN COALITION OF PATRIOTIC SOCIETIES Mr. TREVOR. I would read my statement, if I may.
The American Coalition of Patriotic Societies at its annual convention held on January 30, 1958, by resolution reaffirmed its opposition to the reciprocal trade agreements program as expressed in a resolution passed at its annual convention held on January 13, 1955, which reads as follows:
REGULATION OF FOREIGN COMMERCE
Whereas the reciprocal trade agreements program represents an unwarranted encroachment of the executive branch of our Government upon the legislative responsibility conferred upon Congress by the Constitution of the United States, and
Whereas as a result of reduction of tariffs under the reciprocal trade agreements program various industries important to our healthy economy and strong national defense have been injured or forced out of business with consequent injury and loss of jobs by the American workingman: Therefore be it
Resolved, That the American Coalition of Patriotic Societies in annual convention assembled urges Congress to allow the 1934 Trade Agreements Act (Re
ciprocal Trade Agreements Act) to expire June 12, 1955, and upon its expiration, the Congress should resume its constitutional responsibility of regulating foreign commerce through its agent, the Tariff Commission.
The growing number of unemployed in the United States should cause us to examine with care the legislation to extend the reciprocal trade agreements program. Congress has been supplied with much evidence, according to U. S. News & World Report for March 7, 1958, that thousands of American workers have been thrown out of employment by foreign imports.
President Eisenhower in his message to Congress has argued that these imports were necessary **** to provide foreign nations the opportunity to earn the dollars to pay for the goods we sell.”
This argument is so basic to the whole legislation that it is important to see the incompleteness of its reasoning, because there are other ways in which the money obtained by foreign nations can be spent.
With data obtained from the Economic Almanac, 1958, we find that from 1947 through 1956, inclusive, the United States put in foreign hands by spending on imports of goods and services, unilateral transfers, capital investments abroad, and the purchase of gold about $19 billion more than the world spent on our exports of goods and services and on unilateral transfers.
The $19 billion went to build up foreign balances, on investments in this country, and in the purchase of gold. The Federal Reserve Bulletin for April 1950 pointed out that even during the so-called dollar shortage in 1948 and 1949, foreign investments in the United States, some of them secret, increased by $1.9 billion and $0.9 billion, respectively. Is it any wonder that in the 2 years from 1954 to 1956, foreign assets and investments in the United States jumped from a total of $26.8 billion to $31.6 billion ?
Obviously there is something wrong with legislation which in 10 years allowed $19 billion, that in theory would be spent on our exports, to be diverted to the stock market and other channels.
The New York Times of January 2, 1955, in a special dispatch from Geneva, reported the following:
FLIGHT OF CAPITAL TO UNITED STATES CONTINUES
GATT STUDIES INDICATE IT IS A BASIC CAUSE OF CHRONIC DOLLAR CRISIS ABROAD
* * * The policy implications of these new studies, some of which are based on new data, are substantial and highly controversial. Indeed, they contain so much dynamite that it is highly unlikely the study will ever be published in an official paper. ** * The studies also throw considerable doubt on the thesis that lowering the American tariff is essential to the establishment of better balance in world trade. * * *
With reference to the movement of foreign funds at the present time, there is still a tendency toward investment in American securities or in gold. The New York Journal-American of April 27, 1958, had this to say:
Some of the recent strength in our market due to revived buying by European traders. Some firms report Swiss, British interest in our leading steels, oils, papers, and business machines. * * *
The New York World-Telegram and Sun for April 25, 1958, reported that the United States had a loss of gold to foreigners of $729 million since the first of the year, with $124 million of this amount being lost in the week ended Wednesday, April 23.
The United States, because it is a great capital-creating nation, do not need investment here by foreigners of money obtained by them because of our purchases of imports. Until we stop the diversion of this money from the legitimate function of paying for our exports, we should expect our unemployment to increase.
Foreign nations control the investment of funds, in areas under their control, to their best advantage. The Wall Street Journal for September 16, 1948, reports that in regard to Africa:
In some colonien, for example, Americans have been advised they can invest only in the nonbasic industries. The British reserve to their own nationals the right to develop communications, power, basic minerals, transportation, and other baste industries.* . * Other Americans have found this discrimination against American investors running throughout Europe. Many profitable induntries are "reserved" for European nationals.
Not only in new investments is this discrimination the case, but it is no even in the case of stocks traded in London security markets. The New York World-Telegram of July 6, 1948, reported the following:
The British Government through the Bank of England has thwarted an American move to purchase control of the British-owned San Francisco Mines of Mexico, the Evening Standard said today. *
*** Today, the Standard said, the Bank of England refused to issue any further licenses in connection with these mining shares. Previously the bank had honored transactions made with "security sterlings."
The paper stated that big British interests had pointed out to the Bank of Nuland the undesirability of permitting control of this $15,200,000 silver, lead, and aine property to pass out of British hands. * * *
similar but unsuccessful attempt, reported in the Wall Street Journal of June 11, 1936, was made to block the Texas Co. when it made an offer to punohase stock in the Trinidad Oil Co., Ltd.
In 1950), when Britain ended gasoline rationing, the Standard 01 Cumpany of New Jersey and Caltex agreed to accept payment for supplies 100 percent in pounds sterling. According to the Wall Street Journal of Nay , 1930), the British Minister of Fuel and Power, l'hilip Sol Baker, said that the agreement prorided that the stering must be spent in Britain on oil equipment, machinery, and other goods 1xrWd by the enumpanies in their oil operations, but must be in adda
The oneri merion picture industry was subjected to sin There'tion on its baked earnings in Britain, according to the Well Sant Journal of September 1949, with only a sucket purus for which he fhven funcis 3 be spent.
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because of liberal credit terms offered by the Banque de Paris et des Pays Bas.
The New York Times of October 10, 1954, said the British Government approved the transfer of $15 million in British funds to provide the equity capital for a new American subsidiary of the Bowater Paper Corp., Ltd., of London. Among other things, this project included the purchase of 200,000 acres of land in Tennessee. Chancellor of the Exchequer R. A. Butler was quoted by the New York Times as saying:
This venture is the largest investment sanctioned by the British Government in the United States since the war.
An attempt, authorized by the British Treasury, to use scarce dollar exchange to buy retail stores here so that American manufactures on their shelves could be displaced by British products is described in the New York World-Telegram of February 11, 1949:
A high British trade official today disclosed that the Labor Government is ready to ease curbs on foreign exchange sufficiently to permit investments in American retail enterprises.
The move is, frankly, intended to facilitate the sale of British goods here, said Neville Blond, United Kingdom trade adviser to this country.
Top-level officials, he said, have just authorized a $750,000 investment by Great Universal Stores, Ltd. * * *
While this transaction was never completed, the head of Great Universal Stores, Ltd., was reported by the Wall Street Journal of December 3, 1954, as being interested in investing $100 million in Montgomery Ward & Co., to use the firm as an American outlet for British goods. This approach to the management of Montgomery Ward & Co. was not successful.
In connection with the favoring of investments by Britain in foreign lands over the purchase of goods from the United States, it would be well for us to remember the statement of Chancellor of the Exchequer R. A. Butler, as reported in the Wall Street Journal of February 4, 1953, which said:
Mr. Butler warned foreigners who would like to sell more goods to the United Kingdom they should not count on any relaxation in Britain's import controls in the near future. He indicated Britain, itself, needed a surplus in excess of $800 million a year on its current account to take care of its debts and to meet its overseas investment “commitments.”
The exports from the United States face many obstacles is indicated by a dispatch in the Wall Street Journal for April 10, 1950, which said:
A little-known committee of representatives from British Commonwealth countries sits down every week in London to discuss the question: What not to buy in America ?
The committee represents Britain, Australia, New Zealand, South Africa, India, Pakistan, Ceylon, Southern Rhodesia, and British colonies. Last summer, members agreed to try and cut imports from dollar areas by 25 percent. * * *
Business Week of February 21, 1953, carried the following headline about a United Nations report:
U. N.'s Advice * * * to the Latin American Businessman: Push Trade with Europe and Buy Less From the U. S.
While it is to be expected that foreign governments might not welcome our exports, it is painfully evident that the United States has financed competition for its industries. The Economic Cooperation
Administration has been active in this regard. “ECA Dollars Build the Factories That May Whittle U. S. Sales,” headlined the Wall Street Journal of November 21, 1950.
On June 20, 1949, the same paper reported : ECA reveals plan to finance new steel plant in France. *** Mill would put France in export market.
On April 22, 1958, the same paper said:
Imported steel grows cheaper, adding to the woes of half idle United States mills. This country already buys nearly 60 percent of its barbed wire from abroad, steel men estimate. ***
On June 21, 1950, the Wall Street Journal reported:
Foreign farmers lift output, dimming long-range export prospects for United States crops.
An interesting example of the ECA attitude toward American industry is revealed in Business Week for April 16, 1949, which said:
* * * Other manufacturers are mad at ECA for urging foreigners to buy any. where but in the United States if possible. (This is a cardinal principle of the Marshall plan to cut back dollar buying and stimulate intra-European trade.) * * * A Worcester machine-tool man sums up the feelings of many of his disillusioned colleagues: “We were hopeful ECA would be of great benefit. But now we find they are urging France, for instance, to buy tools in England." ***
The thoroughness with which our Government helps foreigners to get dollar exchange is indicated by an item in the Wall Street Journal of June 11, 1948. It reported that the Department of Commerce was opposed to the establishment of a travel service in the Interior Department because it feared undue emphasis on the wonders of the United States national parks and playgrounds. The Department of Commerce, according to Interior Department officials, stressed overseas travel because it was a form of export for foreigners.
Paul G. Hoffman, ECA Administrator, apparently recognized that increased imports would decrease employment here because, according to the New York Daily News of February 23, 1950, he testified before the Senate Foreign Relations Committee that American workers who lost their jobs as a result of foreign goods sold to this country by Marshall plan nations should draw Federal-State jobless pay.
As the evidence accumulates, it becomes apparent that the policy of our Government is not to promote our exports. Therefore, the argument that the legislation to extend the Reciprocal Trade Agreements Act is designed to help our exports does not fit into the pattern of our Government's action, and is more plausible than realistic.
However, increasing our imports does coincide with the British desire, as expressed by Chancellor of the Exchequer Butler, to sell at least $800 million more goods than they would buy, and use the surplus for debts and investments. The foreign investments are being made in this country, and the imports are coming in. Is that not the real effect of this legislation?
Another misconception of the reciprocal trade-agreements program is that American industry will always try to safeguard the employment of labor in its American plants by asking for tariff protection.