One of the proposals is to give to the Tariff Commission, under certain conditions, the right to transfer commodities from the free list to the dutiable list and from the dutiable list to the free list. As I have pointed out, the right to levy taxes is, by our Constitution, reserved to the Congress. When Congress enacted the free list of the Tariff Act, it enumerated those commodities which were not to be taxed. The placement of these commodities on the dutiable list by the Executive is effectually levying a tax.

In other testimony of the proponents of the bill, constant reference has been made to the fact that Department of Commerce statistics show imports for the year of 1957 as $13 billion, whereas exports in 1957 are reputed to have amounted to $19,500 million. Secretary Weeks commented upon the fact that the export figure represented 6 percent of the Nation's output.

The use of the foregoing figures in this connection, we believe, is misleading. In Summary Report FT 900-E, dated December 1957 and released on February 10, 1958, by the Secretary's Department of Commerce, the following appears in a footnote of that report:

"Export statistics include Government as well as non-Government shipments to foreign countries. The export statistics, therefore, include mutualsecurity program military aid, mutual-security program economic aid, and Department of the Army civilian supply shipments. Separate figures for mutual-security program military aid (including direct forces support/consumables and construction) are shown in table 1."

Another footnote on the same report states:

"The value for exports is the selling price (or cost, if not sold) including inland freight, insurance, and other charges to the place of export." Obviously, these figures are used to show the comparative benefit or injury that may accrue from the stated volume of exports and imports.

May I call to your attention that the import statistics in Summary Report FT 900-E represent bare costs at the point of shipment to the United States, wholly exclusive of ocean freight, insurance, United States import duties, and the cost of clearing the merchandise through United States customs. If the import statistics were to be adjusted to represent the value at the point they enter competition with American-made merchandise, the $13-billion figure would be adjusted materially upward.

In comparison with American standards, it is common knowledge that the great bulk of foreign-made goods are produced with low-cost material, and with wages that would not even approach United States minimum wage law standards. Prior to enactment of the Trade Agreements Act of 1934, the standard of tariff protection recognized by section 336 of the Tariff Act of 1930 was a tariff which would equalize the cost of production here and abroad. If this standard were adopted as the basis of statistical information, instead of the foreign invoice price, the $13-billion figure would be further adjusted to a point where it is reasonable to believe it would approach if not equal the $19,500-million export figure.

To the uninitiated, the export figure conveys the idea of products produced for the purpose of entering foreign trade. Mutual-security program military aid, economic aid, Army civilian shipments, and similar items now included in our export figures would still be with us whether or not we have a trade agreements act.

As I have tried to point out here, we feel there is no logical justification for extension of the Trade Agreements Act.

However, if it is found expedient, in the judgment of the Congress, to extend this bill for 1 or more years, we strongly recommend that the bill be amended to incorporate the provisions of a bill introduced by Mr. Simpson of Pennsylvania into the 1st session of the 83d Congress, H. R. 4294. This bill provides for a revamping of the congressional factfinding agency, the United States Tariff Commission-the removal of the discretionary power of the President over escape-clause findings and various other features that would go a long way toward making the delegation of legislative authority by Congress come within the constitutional powers of Congress.

I have read with great interest the comments of various Members of the House of Representatives in the proceedings on the floor of the House, on Monday, February 24, 1958, appearing at pages 2290-2304 of the Congressional Record of that day (vol. 104, No. 28). I believe the views and the arguments there set forth comprise as able a brief as can be written against the extension of the Trade Agreements Act. I commend them to your careful consideration.

I wish that my time would permit me to enlarge upon and pinpoint the arguments there made as to the unconstitutional delegation of discretionary power to the Executive, the policy of the Executive in ignoring, or failing to administer, the acts of Congress, but above all, the policy of free trade economists in our Department of State with respect robbing Peter to pay Paul.

It is axiomatic that when you reduce the tariff protection afforded an existing industry (Peter), to encourage the exports of another industry (Paul), you are robbing Peter to pay Paul. This occurs every time the State Department economists reduce a rate in a trade agreement. But this is not all. In the few instances where the State Department economists have allowed the escape clause to function, it has immediately published schedules of other commodities upon which reductions are offered for negotiation in compensation for any increases made. So sacred has become a concession made in a trade agreement that even where Congress has exercised its constitutional obligation by enacting a remedial statute, compensatory reductions on other commodities have been offered and effected. I am unable to find a single provision of the Trade Agreements Act of 1934, or any of the acts extending it, that contemplate such action, much less requires it.

The following are examples of discretion run wild.

On August 18, 1955, the President disregarded the recommendations of the United States Tariff Commission under an escape-clause action and proclaimed a niggardly increase in the rate on certain types of imported bicycles. Subsequently, the Interdepartmental Committee on Trade Agreements gave notice of intention to negotiate under article XIX of GATT, in the following language:

"Notice is also given of intention to negotiate under article XIX of the general agreement regarding compensation to contracting parties to the agreement that have a substantial interest, as exporters, for the recent escape-clause action by the United States increasing the duty on bicycles, should such negotiations be found appropriate. Accordingly, some of the items in the annexed list may be considered for possible compensation for this action of the United States" (T. D. 53906).

On July 8, 1954, Public Law No. 479 of the 83d Congress was enacted by Congress and approved by the President, setting forth its intended application of paragraph 1530 (e) of the Tariff Act of 1930 to rubber-soled footwear. This was a corrective measure defining the intent of Congress, with no alteration of tariff duties. However, we find the following in a release by the State Department, dated November 12, 1954, covering proposed negotiations with GATT:

"Notice is also given of intention to negotiate settlement of several outstanding problems arising out of various actions by the United States. Negotiations are contemplated looking to such modification of trade agreement obligations as may be necessary in view of the enactment of Public Law 479 of the 83d Congress relating to certain rubber-soled shoes and Public Law 689 of the 83d Congress relating to certain prepared fish. In addition the United States modified its concession on figs, fresh, dried, or in brine, as a result of an escape-clause action. Finally, the United States did not find it possible to carry out obligations negotiated with Uruguay with respect to certain meat products. Among the possible outcomes of these negotiations might be a granting of such concessions on some items in the annexed list as may be necessary to compensate for the above actions of the United States."

I submit that the above illustrations clearly show a determination on the part of the State Department and the Executive to take from Congress, under the alleged authority of the Trade Agreements Act, its constitutional obligation "to lay and collect taxes, duties, imposts, and excises * *" (art. I, sec. 8, U. S. Constitution).

To sum up and reiterate what has already been said herein, we feel there is no logical justification for the proposed extension of the Trade Agreements Act. Respectfully submitted.

J. G. LERCH.

Senator CARLSON. The next witness is Mr. Richard A. Tilden, Clothespin Manufacturers of America.

Mr. Tilden, you may file a statement if you care to, and speak extemporaneously or you may read it.

STATEMENT OF RICHARD A. TILDEN, GENERAL COUNSEL,
CLOTHESPIN MANUFACTURERS OF AMERICA

Mr. TILDEN. I think the statement is rather brief and I would rather read it if I may.

Senator CARLSON. You may proceed.

Mr. TILDEN. My name is Richard A. Tilden, attorney, practicing in New York, and I appear on behalf of the Clothespin Manufacturers of America, a trade association representing all of the domestic producers of wooden clothespins.

The domestic wooden clothespin industry began its battle for protection from low-priced imports of spring clothespins almost exactly 10 years ago. During 1947, the industry consisted of 13 plants located in 8 States, which produced and sold 9,300,000 gross pins.

After 10 years of trying to invoke the escape-clause procedure, including four investigations by the Tariff Commission, I have to report virtually complete failure.

The industry now consists of only 6 plants. During this 10-year period, 7 of the 13 plants have either closed down completely or discontinued the production of clothespins. These seven plants were located in Phillips, Maine; Glen Rock, Va.; San Jose, Calif.; Richwood, W. Va.; Ellsworth, Maine; Munising, Mich.; and Spencer, Ind.-all small towns in which the loss of the employment opportunities previously afforded by the clothespin plants was particularly serious.

Domestic sales in 1957 were 6,800,000 gross-a decrease of 27 percent from 1947. During this same period imports increased from 870,000 gross during 1947 to 1,940,000 gross in 1957-an increase of 123 percent.

The only thing the industry has to show for its 10 years of effort is an acknowledgment by the President that the industry is being seriously injured by increased imports.

This acknowledgment, which was made in a letter to this committee dated November 9, 1957, was accompanied by a token gesture of relief, in the form of an increase of 10 cents per gross in the import duty.

At first blush it would appear that the President's action was an appropriate means of remedying the injury caused by the concessions. I will not take up the time of the committee with a discussion of all the reasons why such action will not remedy the injury, but will merely point to a few very basic facts which should satisfy this committee that the real effect of the President's action is to add the clothespin industry to the growing list of injured industries which are being sacrificed to further the administration's program of encouraging imports.

These are:

1. In its report to the President the Tariff Commission categorically determined that the maximum permissible increase in duty would be inadequate to remedy the injury found to exist, and recommended imposition of an import quota of 650,000 gross annually as the only possible remedy.

2. Despite the increase in duty, imported spring pins are presently selling on the domestic market at prices ranging up to $2.45 per case

less than domestic pins. Domestic packaged spring pins currently sell for $6.30 per case of 6 gross delivered. Comparable imported pins are now available at prices as low as $3.85 per case. It should be noted that the domestic price has not been changed for over a year and that the Commission found that the industry has been losing money at this price.

3. Within 3 months after the President announced the increase, one of the largest plants in the United States, located in Richwood, W. Va., closed its doors, adding more than 200 to the rapidly growing national unemployment figure which is now causing so much

concern.

4. During the 3-month period immediately following the increase in duty, imports totaled 592,574 gross-an increase of 222,334 gross, or 60 percent, over the imports during the same 3-month period of the preceding year; and an increase of 300,317 gross, or 103 percent, over the average imports during the same months in the previous 10 years. 5. During this same 3-month period immediately following the duty increase, domestic shipments of wooden clothespins declined 530,024 gross, or 30 percent, from the shipments during the same 3month period of the preceding year; and declined 571,454 gross, or 32 percent, from the average shipments during the same months in the previous 10 years.

These facts are presented to the committee to demonstrate the accuracy of the Commission's conclusion that "the maximum permissible increase in duty would be inadequate to remedy the injury," and that the failure of the President to follow the recommendation of the Commission has resulted in further serious injury to the domestic industry.

The experience of the clothespin industry is indicative of the treatment which every industry concerned with import competition can expect to receive from the administration if H. R. 12591 is enacted in its present form.

I am aware of the assurances which this committee has received that the administration will administer the powers which it has asked for in such way as to protect all domestic industries.

However, the same assurances have been given each time the act has come up for renewal. The record does not indicate that these assurances have meant much in the past, and there is no reason to believe that they will mean any more in the future.

In my opinion, the most effective means of giving domestic producers the confidence in the future of their businesses that is essential to the future welfare of this country, would be for the Congress to retain final control over determinations as to whether or not to effectuate the recommendations of the Tariff Commission for relief in escape-clause cases.

I recognize that it would unduly burden this committee and the Congress if it became necessary for the committee or the Congress to pass on every escape-clause case. However, the necessary control could be exercised by providing in the escape-clause procedure that the President shall proclaim such increased duties, or impose such import quotas, as may be recommended by the Tariff Commission unless he files within a specified period, with this committee and with the House Ways and Means Committee, the reasons why he feels that such recommendations in an individual case should not be effectuated.

It could further be provided that unless this committee and the House Ways and Means Committee both adopted resolutions within a specified period of time approving the action recommended by the President, the President would be required to put into effect the recommendations of the Commission.

This procedure would have the advantage of requiring the Congress, acting through this committee and the House Ways and Means Committee, to take affirmative action only if the reasons advanced by the President warranted disregarding the Commission's recommendations with the consequent risk of sacrificing a domestic industry.

Moreover, such a procedure would not put the President in a straitjacket, since in any case in which he felt that the action recommended by the Commission would endanger our relations with foreign countries, would unduly injure any foreign country, would result in compensatory measures injurious to our export trade, or would in any other way be detrimental to the best interests of the United States, he could ask this committee and the House Ways and Means Committee to approve some other action.

The administration should have no concern that such committees would not approve the President's recommendations if the reasons advanced were sound and justified action other than that recommended by the Commission.

I am aware of the fact that the bill before this committee contains a procedure to give the Congress some control over the President's actions in escape-clause cases-through the adoption of a twothirds vote on a concurrent resolution.

In my opinion this procedure imposes much too great a burden on domestic industries and on the Congress. It is difficult enough for a domestic industry, particularly a very small one like the clothespin industry, to persuade a majority of members of the Tariff Commission that it is being injured. If such industry must also persuade twothirds of the Members of the House and Senate, the task would be virtually impossible.

It seems to me that Congress has previously evidenced its intent that domestic industries injured by increased imports were to be protected unless overriding international considerations indicated that it would be in the public interest generally to deny such protection.

If there are such considerations in any individual case, it should be the responsibility of the President to point them out to the Congress, or to this committee and the House Ways and Means Committee and to secure approval of the Congress, either directly or through the committee, of a denial of protection.

Domestic industries should not be expected to assume the burden of proving that there are no such overriding international considerations. The impracticability of imposing such a burden on domestic industries is well illustrated by the clothespin case.

The President, apparently because of overriding international considerations, refused to impose a quota of 650,000 gross per year on imports of spring clothespins, despite a strong recommendation by the Commission and a warning by the Commission that any other action would result in further injury to the domestic industry.

He rejected the Commission's recommendation despite the fact that the import quota would have had a negligible effect on foreign countries. If such a quota had been in effect during the 5-year period