EXTENSION OF RECIPROCAL TRADE AGREEMENTS ACT FRIDAY, FEBRUARY 18, 1949 The committee met at 10 a. m., pursuant to adjournment, in room 312, Senate Office Building, Senator Walter F. George (chairman) presiding. Present: Senators George (chairman), Byrd, Lucas, Hoey, Millikin. Butler, Brewster, Martin, and Williams. The CHAIRMAN. The committee will come to order. As our first witness this morning we are pleased to have with us one of our colleagues, Senator Lodge of Massachusetts. You may proceed, Senator. STATEMENT OF HON. HENRY CABOT LODGE, JR., A UNITED STATES SENATOR FROM THE STATE OF MASSACHUSETTS Senator LODGE. Mr. Chairman and gentlemen, the purpose of my presence here this morning is to ask your committee to incorporate in the bill now pending before you, extending the President's authority to negotiate trade agreements, certain provisions which will protect. American industry against harmful foreign competition. The strength of this measure, in my opinion, is that it is sufficiently elastic in scope to permit this protection to American industry without adversely affecting the basic objective of this bill. I think this can be done by providing that when the Tariff Commission finds that duties or quotas are so low as to threaten serious injury to domestic industry, the Commission must inform the President of this fact, and also advise him what increases in duties or what additional restrictions are necessary to protect American producers. Such a report by the Tariff Commission is, in effect, a "stop, look, and listen" sign to guide the President in fulfilling his assurance to the American public that, in the conduct of the trade agreements program, domestic producers will not be injured. The law in my judg ment should also contain some language which will enable the President to make such modifications as are necessary to prevent harm to domestic industry. I recognize and endorse the policy of encouraging international trade as a means of improving living standards here in America, of rebuilding prostrated peoples abroad, of preventing the spread of communism and thereby of improving the chances of world peace. These policies are manifestly in the interests of everyone, including those who work in American industries now suffering from foreign competition. Moreover, it would obviously not help those engaged in these industries to destroy the entire Reciprocal Trade Act, in view of the fact that a large part of the act's operations do not touch them. Consistent with this belief, I feel that some safeguards should be established by Congress to insure that domestic industries are properly protected against injury. Now, for example: I have received communications from many organizations in Gloucester, Mass., regarding the situation respecting fisheries, which they regard as absolutely desperate. The city of Gloucester is dependent almost entirely on the fishing industry. I live only a few miles from there myself, and they have told me just this last week that unless some protection is afforded them, they are going to have to give up the fishing business. Well, that is not only a serious thing for Gloucester and for Massachusetts; it is a national problem, because at least a great part of the fish consumed in the Midwest and the interior of the country come from that area, and if we should find ourselves in a war and dependent on a foreign fishing industry, it is not going to be a good thing for the diets of the American people. I have received communications from Mr. Jeremiah F. O'Meara, city clerk of the city of Peabody, Mass., telling me of the great damage which has been done to the leather industry in the city of Peabody due to inadequacies in the rates, and a letter from Mr. James F. McNiff, secretary-treasurer of the Peabody Social and Athletic Club, regarding the dangers to the employment of those who work in the leather industry. Senator MILLIKIN. Would you mind an interruption, Senator? Senator MILLIKIN. Where is the competing fish coming from? Canada? Senator LODGE. Yes; Canada. I have a letter from Mr. Ruel H. Smith, of North Attleboro, Mass., regarding the effect which present conditions are having on the jewelry industry. That is in the southeastern part of Massachusetts. I have a communication from the Barre Wool Combing Co. of Boston, Mass., regarding the harmful effect of the increased imports of foreign textiles, and a communication from the board of selectmen of the town of North Andover, Mass., expressing concern as to the effect of current policies on the textile industry. I have also heard from the Greater Lawrence Textile Council, American Federation of Labor, in a communication signed by George F. Driscoll, expressing opposition to the reciprocal trade policy insofar as it affects textiles in that great industrial city, where everyone's livelihood is contingent on the textile business. Also, I have a communication from Mr. Gordon F. Gaffney, who is city clerk of the city of Lawrence, officially and formally expressing the sentiments of the mayor and the city government, and their concern regarding the harmful importation of certain foreign products. I also cite a communication from the Merrimac Hat Corp. of Amesbury, Mass., regarding the threats to the welfare of this industry. Then I have had many communications and many contacts with the American watch industry, notably the American Watch Assemblers Association, the watch-workers' union, the Waltham Watch Co., which, as I think is well known here in Washington, has been in a desperate condition; and certainly one factor which contributes to this result has been the factor of Swiss importations. Now, Mr. Chairman, many of these industries produced vital military equipment in World War II. Of course the watch industry is practically the only industry to which we can look in time of war to make instruments that are essential to the conduct of such a war. The woolen industry is essential to military operations, too, as far as that goes; and so is the leather industry. I most earnestly request, therefore, that your committee invite representatives of the Military Establishment to testify on the interrelationship which I believe exists between our trade agreements program and the national defense. I think this is a point of fundamental importance, concerning which the Senate should have authoritative evidence. I also hope that the committee will receive testimony from the Tariff Commission itself on the general nature of the amendments which I have suggested. We can and we must-promote peace without harming our own home industry. The challenge to statesmanship is do them both. There is not, and there should not be, any conflict between these great objectives, both of which mean so much to the livelihood and the lives of the American people. That concludes my statement, Mr. Chairman. Senator MILLIKIN. Mr. Chairman, may I ask the Senator to repeat his affirmative suggestions for amendments? Senator LODGE. I suggested that a provision be made that when the Tariff Commission finds that the duties or quotas are so low as to threaten serious injury to domestic industry, the Commission— must inform the President of this fact and also advise him what increases in duties or what additional restrictions are necessary to protect American producers. I say that is, in effect, a "stop, look, and listen" sign to guide the President. And then the President acts on those recommendations. Senator MILLIKIN. That is the main purpose of the law as it now stands; as it was adopted last year. Senator LODGE. Yes. Senator MILLIKIN. And this would tend to remove even that thin and tenuous protection to American industry. Senator LODGE. I do not consider that I am taking an arbitrary or unreasonable view. I am in favor of the broad objectives of this act. And I do not see how the foreign trade policy can expect to succeed unless you can have people over here who can buy the products of foreign countries. And how can you expect a textile worker in Lawrence, or a watch worker in Waltham, or a fisherman in Gloucester, or a leather worker in Peabody, or a jewelry worker in Attleboro to buy the products of foreign industries if he is out of a job? I do not know. The CHAIRMAN. Senator Butler. Senator BUTLER. Senator Lodge, evidently there has been a drop in employment in your State due to the situation that you have told us of. Senator LODGE. I believe so; yes. Senator BUTLER. Do you have any way of estimating what that might amount to? Senator LODGE. I can get you figures as to unemployment in Massachusetts. Just exactly how much of it is attributable to this I think might be rather a difficult point, but I will try to find it out and I will file-it with the committee. Senator MILLIKIN. It might be that the Tariff Commission has some statistics on those particular industries that you mentioned. Senator LODGE. That would be very interesting to me. The CHAIRMAN. You gentlemen representing the Tariff Commission will please note this. And if you have any figures on unemployment due to what you think is the effect of present tariff policies, please file them with the committee and call the committee's attention to them, so that they may be put into the record. Senator Lodge, thank you very much sir. Senator LODGE. Thank you, Mr. Chairman. (The information requested is as follows:) FISHERIES One of the major segments of the fish industry of the United States is the production of fresh and frozen fillets of cod, haddock, hake, pollock, cusk, and rosefish, commonly referred to as groundfish fillets. Substantially the entire United States production of groundfish fillets, which increased from about 100,000,000 pounds a year in 1937-39 to 119,000,000 pounds in 1947 and an estimated 154,000,000 pounds in 1948, is the product of the New England States, with Massachusetts producing about 75 percent of the total. The principal producing areas in Massachusetts are Gloucester, Boston, New Bedford, and Provincetown. United States imports, almost entirely from Canada, Newfoundland, and Iceland, increased from about 9,000,000 pounds a year in 1937-39 to 35,000,000 pounds in 1947 and to 54,000,000 pounds in 1948. Thus, the ratio of imports to apparent consumption increased from about 9 percent in 1937-39 to 23 percent in 1947 and to 26 percent in 1948. The following table shows United States imports of fillets of groundfish, by months, for the years 1947 and 1948. Information on employment in the domestic industry is not available. It is known that increasing production and imports have resulted in the present cold-storage holdings being substantially above the usual holdings for this season of the year. With abnormal inventories, domestic producers are reluctant to continue production at recent high levels, and it is probable that these producers are curtailing operations until some part of the holdings are disposed of. Among other factors tending to reduce operations in this industry are the presently unstable prices for both domestic and imported groundfish fillets and the uncertainty surrounding the volume and price of future imports. Fillets of groundfish (cod, haddock, hake, pollock, cusk, and rosefish), fresh or frozen: United States imports for consumption, by months, 1947-481 |