Senator MILLIKIN. How late has your organization brought the recent import figures to the attention of either President or the State Department?

Mr. FRANCIS. I don't think we have brought it in recently, sir. The State Department and the Treasury Department were at these hearings in 1947, and the Commerce Department as well. And they are on record before committees in both the House and the Senate. We brought the records in at that time; but not directly to the State. Department.

Senator MILLIKIN. In 1946 you brought to the attention of the State Department the enormous increase in the total value of silver fox imports?

Mr. FRANCIS. Yes.

Senator MILLIKIN. And at that time you also brought to their attention the enormous increase in mink importation.

Mr. FRANCIS. I think they are fully aware of all these figures. There is no question in my mind, Senator, that they are fully aware of all these facts. They have been at the hearings. We have been in constant touch with them. And there have been letters and correspondence, and the Tariff Commission has these figures, and the committees of Congress have these figures. They are fully aware of all these facts and conditions.

Senator MILLIKIN. The Tariff Commission is certainly aware of the situation, because I have here a tabulation from the United States Tariff Commission down as late as 1948.

The CHAIRMAN. I put that in the record, Senator.

Senator MILLIKIN. That shows that they are aware of the situation. Will your furs be affected by the reciprocal trade agreements which they propose to enter into in France in the near future?

Mr. FRANCIS. We can't see any appreciable effect that any negotiation with France will have, as they are not a large fur producer, as far as raw furs are concerned. They may do a limited amount of manufacturing, but very little at the present time.

Senator MILLIKIN. Have you taken formal steps before the Tariff Commission to invoke the escape clause?

Mr. FRANCIS. From the discussions here, in the course of the consideration of this program, I find that maybe we have erred. We should have gone through the procedure of the Tariff Commission and then gone to the President. I assure you, Senator, that we expect to do that immediately. And we will keep you properly advised, you and this committee, as to the results that we receive and the replies. Because up to now our experience has been that we don't think there is a chance to get any relief whatsoever.

Senator MILLIKIN. But you have brought your situation, one way or another, as an organization and through individual groups of fur farmers, to the attention of the President and to the attention of the Department of State, and to the attention of the Interdepartmental Committee, in various hearings.

Mr. FRANCIS. That is right, sir.

Senator MILLIKIN. It cannot be said, can it, in any fairness, that the Interdepartmental Committee or the President or the Tariff Commission, or any of the agencies have been ignorant of this situation? Mr. FRANCIS. They surely are not ignorant of it.

Senator MILLIKIN. And I just make my own observation: Whether you proceeded with technical accuracy or not, it would have been very easy for someone to channel the thing into the proper channels. The President can act without any recommendation by anybody. He does not have to have a recommendation from the Tariff Commission in order to invoke an escape. And the Department of State does not have to have a recommendation in order to start the machinery going for an escape.

Mr. FRANCIS. I might say here that in regard to the escape clause I know there has been a lot stated about it, and how we can get relief from the escape clause. I believe we have tried, even though we have not been technically right.

But on the tax end, we find on the excise taxes they don't feel they want to do anything about that, because the President says "We need more taxes instead of less taxes." So maybe we will have to get to a point where we will have to write an escape clause into the tax laws.

Senator MILLIKIN. Maybe we will have to have an escape from the President. We will have to wait a while for that, however.

Mr. FRANCIS. Well, maybe we can get a little consolation. Perhaps they will have some kind of social security they can put us on. Senator MILLIKIN. With reference to this Danish compensation rebate, how does that work?

Mr. FRANCIS. As I understand it, you purchase mink in Denmark at, say, $10 per pelt, as bid on the auction, and you pay $10, and if you give a certificate of export, or produce your certificate of export that you exported that mink pelt to the United States, the Government will rebate you 3312 percent.

The CHAIRMAN. The Danish Government?

Mr. FRANCIS. The Danish Government.

Senator MILLIKIN. Thirty-three and a half percent of what?
Mr. FRANCIS. Of the price you pay.

Senator MILLIKIN. And that, you say, is a compensating action against the state-controlled fur business of Russia and the subsidy program of Canada; is that right?

Mr. FRANCIS. That is right, sir.

Senator MILLIKIN. Is there any subsidy for the American fur farmer?

Mr. FRANCIS. We have loans that we have to pay back. Or else the Government will be in the business.

Senator MILLIKIN. Now, coming to those loans: Roughly speaking, is it not true that through the operations of the factors that you have mentioned the fur business has now become so impoverished that it is impossible, roughly speaking, to make any considerable number of loans to fur farmers?

Mr. FRANCIS. That is substantially right: That out of the $4,000,000 that Congress provided for loans to fur farmers, according to the last report I received from the Farm Credit Administration, they had used $250,000, and the industry, under the terms set up by Congress, was in such a deplorable condition that they couldn't even meet emergency loan terms. In the loan program it provides that reasonable repayment must be a part of the loan; that is, they can't lend us the money unless the Department of Agriculture feels it reasonably sound and that it will be repaid.

Senator MILLIKIN. Has this not happened: That as the situation in the fur industry has worsened, the fur farmer has gone first to his bank and made a loan when he could, and has had to put up practically everything he had as collateral for that loan, and as the situation continues to worsen, he then tries to get a loan from the Federal Government, and the banker will not subordinate his collateral to the Federal Government, with the result that the prior loan probably goes out on foreclosure, with no relief from the Government? Is that not about the way it works?

Mr. FRANCIS. That is exactly right, sir. That is why we have lost so many farmers. That is why they have gone out of business.

This is not guesswork, gentlemen. We have statistical information just completed. And 1,000 mink farmers in December and January have liquidated their mink farms.

Senator MILLIKIN. We use these nice words like "liquidated." That means that there has probably been a foreclosure of their assets, not only in the fur business, but maybe collateral assets in other branches of farming; is that right?

Mr. FRANCIS. That is right; not only that, but their homes, their cars. That all goes in. It is a personal liability loan, that takes in all of it, Senator. It is not just on their animals, not only on just their pens, but on their homes and their sheds, and their land and their equipment, and even on their life insurance if they can get coverage on that.

Senator MILLIKIN. This story that you are telling me is not unfamiliar to me. We have a lot of fur farmers in Colorado, and I have been through the whole vicious circle.

Now, what are the principal countries that export furs into this country?

Mr. FRANCIS. Russia and Canada, Norway and Sweden, are the principal import countries, the countries we receive furs from.

Senator MILLIKIN. And what trade agreements were made subsequent to the time that you brought your condition to the attention of the Federal authorities?

Mr. FRANCIS. We brought our condition at the time to the Committee on Reciprocity Information. We could see in 1946 and earlier, back in 1945, the situation. I may say, Senator, that in 1946 there were hearings about a quota limitation that the Government set on silver foxes, of 100,000, which was not really a quota, because they never really reached 100,000 imports except in 1949, and they came in before the quota was put on. And they were requested to take the quota off. We objected and stated very emphatically that it should be lowered, and we showed them what was going to happen and what would happen to our industry if they didn't lower it.

Senator MILLIKIN. The Geneva agreements succeeded your showing along that line. Is that right?

Mr. FRANCIS. That is right.

Senator MILLIKIN. The Geneva agreements were made after that. Mr. FRANCIS. That is true.

Senator MILLIKIN. What agreements were made at Geneva that affected the fur industry? With what countries?

Mr. FRANCIS. The agreements that were made at Geneva, that primarily affected us, did not change the 371⁄2 percent duty on foxes, but they bound mink duty-free, which would not allow Congress even,

unless we had a breach with other countries, to step in and do anything about duty.

Senator MILLIKIN. With what countries did they do the dealing on that?

Mr. FRANCIS. I am not sure, sir, with what countries they did the dealing.

Senator MILLIKIN. But in any event, what they did at Geneva becomes a generalized benefit for all foreign countries; is that right? Mr. FRANCIS. That is correct, sir.

Senator MILLIKIN. At the present time, have you gotten any glimmer of hope of any kind from either the President or the State Department or anybody else in the executive department who has been working on this subject?

Mr. FRANCIS. No; on the contrary, they want to do away with any provision in the law that would give us a little inkling of help and protection, under the peril point.

Senator MILLIKIN. Is this not true: That with this open bung of imports, furs from foreign countries, almost any other remedy that you take would still empty your barrel?

Mr. FRANCIS. We most certainly can't compete with all nations of the world that are desiring dollars and shipping all their furs into this market; I don't care what type of protection you give, other than ultimately buying our industry or setting up a subsidy and giving us money. I don't know how you can keep us in business to a point where we can take this tremendous shock.

Senator MILLIKIN. Let me put it to you this way: Even if we wiped out the excise tax, even if we wiped it out, would you not still have the same importing problem?

Mr. FRANCIS. We would still have the same importing problem.

Senator MILLIKIN. And is that a problem that could be met even if the excise tax were completely wiped out?

Mr. FRANCIS. No; I don't think, even if the excise tax could be wiped out we could meet the problem. But I don't want to take the position before you here that it wouldn't help.

Senator MILLIKIN. I understand it would be a helpful factor. But nevertheless, after you got all through you would still have this flood of imports.

Mr. FRANCIS. Correct.

Senator MILLIKIN. And under the statistics which you presented. I think it is perfectly obvious that they would continue to embarrass your business. In the meantime, most of your business is gone, as a result of the facts which you have presented here.

Mr. FRANCIS. That ist rue, Senator; very true. we are looking for new agricultural industries.

As I stated here,

Senator MILLIKIN. You understand that the purpose of repealing the present law, rather than extending the present law with amendments, is to get away from the peril point theory.

Mr. FRANCIS. I am very aware of that, sir.

Senator MILLIKIN. And to get away from it from the beginning. Mr. FRANCIS. That is correct, sir.

Senator MILLIKIN. You understand that on March 4 the Tariff Commission will submit its peril points.

Mr. FRANCIS. I understand that.

Senator MILLIKIN. And that the strategy is to get this law repealed, so that the Tariff Commission will not have to submit its peril points, and thus avaid embarrassment to those who do not believe there should be peril points.

Mr. FRANCIS. I understand the strategy being used. I am not in favor of such strategy. I think it is a reflection on the Congress to do such a thing. I think we shouldn't be embarrassed by truth. And I think if we have gone to the expense we have to investigate the matter and prepare these reports, in good faith we should let them be submitted in the manner in which Congress passed the reciprocal trade program last year in fairness and good faith to all concerned.

Senator MILLIKIN. I notice that you favor a 1-year extension of the reciprocal trade program. Do you see any jeopardy of any kind in that to any American industry?

Mr. FRANCIS. No; I do not. I think it is an advantage to American industry today, under our complex world conditions. as I pointed out, Senator, that this request or suggestion has not come of ourselves, but from foreign countries, that they cannot negotiate in good faith while they are under the tremendous impact and influence of our Marshall program, and our armament or military program.

Senator MILLIKIN. You develop that we are actually supplying the money to enable foreign countries to grant bounties to their own fur producers to aid their imports into this country. Is that right?

Mr. FRANCIS. That is substantially right. To a point where we are embarrassing them with it.

Senator MILLIKIN. You are already sufficiently embarrassed. I am talking about the fur industry. And I would not want to add anything

to that.

The CHAIRMAN. We thank you very much for your statement, sir. Mr. FRANCIS. Thank you, Senator.

The CHAIRMAN. Mr. Charles E. Jackson.

Mr. JACKSON. I believe that you are with the National Fisheries Institute. Is that right?

STATEMENT OF CHARLES E. JACKSON, GENERAL MANAGER, NATIONAL FISHERIES INSTITUTE, INC., WASHINGTON, D. C.

Mr. JACKSON. Yes, sir.

The CHAIRMAN. And it has been arranged that you will give your direction to this part of the hearing.

Mr. JACKSON. I think that would be agreeable to the witnesses.
The CHAIRMAN. Do you wish to make a statement at this time?
Mr. JACKSON. Yes; I wish to make a short introductory statement.
The CHAIRMAN. You may proceed.

Mr. JACKSON. I have already stated my name and my connection. Our organization is composed of producers-companies who own and operate fishing vessels-processors, canners, and distributors, including brokers, and other units of the commercial fishing industry concerned in what is termed the "management" end of the fishing industry. It is the only national trade organization representing all segments of the fishing industry between the fisherman and the retailer. It is a nonprofit organization.