mines and mining communities, or will give recognition to the needs of strategic mineral producers (see our 1945 testimony on H. R. 3240, previously referred to, also 1940 record of hearings on H. J. Res. 407, before Committee on Ways and Means, pp. 1569-1584 and 2416-2429). We submit that the national interest in preserving an active, healthy mining industry now calls for affirmative action by the Congress itself.

The need for such action has been ably presented by Elmer W. Pehrson, Chief of the Economics and Statistics Division of the United States Bureau of Mines, who, in discussing the mineral policy of the United States on November 17, 1948, made the following statement:

“Tariffs.—Under today's conditions, a discussion of tariff policies is more or less academic; but the present situation cannot prevail forever, and sooner or later world supply will overtake demand. If our industries, particularly those that supply a large proportion of our needs of strategic raw materials and those that contribute heavily to the prosperity of some of our States, could be assured of reasonable tariff protection when the day of reckoning comes, they would feel more secure in investing for the future. Under the reciprocal trade agreements program protective tariffs on most minerals have been reduced substantially. During the period in which these cuts have been in effect, conditions have been such that the ultimate consequences of the reduction have not been apparent. There can be little doubt, however, that the reduction in tariffs has weakened the competitive position of the domestic producer under normal market conditions. He thus faces a future under difficult domestic circumstances over which he has a little control, with his tariff protection greatly reduced.

"The reciprocal trade agreements program probably will remain for many years to come. The suggestion that strategic minerals be exempted from the operations of this act does not question the over-all wisdom of the legislation but does emphasize the fact that the national stake in the conservation and national security aspects of these depletable resource industries calls for special consideration. I believe the public interest would be served by announcing that the tariff cuts, which in the long run will adversely affect domestic production of mineral raw materials, will be reinstated as soon as supply and demand approach a normal balance."

The failure of Congress 4 years ago to give the needed assurance of continued protection to our strategic mineral industries has contributed to existing shortages, and to the critical situation in which some of these industries now find themselves as described to you today by W. Lunsford Long of the Tungsten Mining Corp. The question of whether these vital industries are to continue to exist and to develop along sound lines, so that they may supply the basic raw materials which will be so urgently needed in another emergency, depends in no small measure on the action which your committee takes in the legislation now before you.

Circular No. 53

MUNITIONS BOARD, NATIONAL MILITARY ESTABLISHMENT,
Washington 25, D. C., September 23, 1948.

CURRENT LIST OF STRATEGIC AND CRITICAL MATERIALS

(The following forms an inseparable part of the strategic and critical materials list)

1. Munitions Board Circular No. 46, dated August 27, 1948, is hereby rescinded. 2. The following definition of Strategic and Critical Materials is issued, pursuant to Public Law 520, Seventy-ninth Congress, insofar as it refers to stock piling, and supersedes the definition adopted November 20, 1944, by the Army and Navy Munitions Board and the Department of the Interior:

"Strategic and critical materials are those raw or semiprocessed materials that are required for essential uses in a war emergency, and whose procurement in adequate quantities, quality, or time is sufficiently uncertain for any reason to require prior provision for their supply."

3. Within the above definition, materials are listed either in group 1 or group 2 according to the following:

"Group 1 comprises those strategic and critical materials for which stock piling is deemed necessary to insure an adequate supply for a future emergency (a) primarily because of a dependence on foreign sources of supply or (b) primarily

because of the lack of the means for obtaining adequate domestic production to meet emergency needs.

“Group 2 comprises those strategic and critical materials that are not recommended for stock-pile purchase but offer supply problems which will require either further study before a final determination can be made on stock piling or other action to assure adequate supplies in a future emergency."

4. Materials in all groups are subject to constant surveillance and review Additions to or deletions from the list, or movement of materials between groups, may be made, based upon future changes in their strategic and critical status. 5. The list does not include fissionable materials, responsibility for which rests with the Atomic Energy Commission.

STATEMENT OF AMERICAN VETERANS COMMITTEE (AVC) IN SUPPORT of H. R. 1211, THE TRADE AGREEMENTS EXTENSION ACT OF 1949

The American Veterans Committee (AVC), an organization of more than 40,000 veterans of World War II, is dedicated to achieving a more democratic and prosperous United States and a more stable world. We believe that enduring national prosperity and security can be achieved only on a basis of world economic cooperation. We believe that the reciprocal trade-agreements program is sound. We urged the continuance of the trade-agreements' program in the statement of policy adopted at our national convention in June 1947. The policy was reaffirmed at our national convention in Cleveland in November 1948. We believe that the Trade Agreements Act should be immediately extended for at least 3 years substantially in the form contained in H. R. 1211. We urge the adoption of H. R. 1211.

The world is now looking to the United States for leadership. The overwhelmingly dominant position of the United States among the trading nations in the postwar world has thrust upon us grave responsibilities, in that all action and nonaction on the part of the United States in matters of economic policy have wide repercussions throughout the world. We have met those responsibilities in a manner which has given to the world new hope for the future and faith in the leadership of the United States.

The reciprocal trade agreements program has, for 14 years, been the cornerstone of our commercial relations with other nations. It has worked well and led to a gradual reduction of trade barriers over a wide list of commodities and an expansion of trade between nations on a mutually advantageous basis. By eliminating specific barriers to trade, it has created new opportunities for trade; by expanding imports, it has created new demand for exports by making dollars available to other nations to pay for those exports; by securing to the United States the advantages of trade, it has helped to guide our economy into the most productive lines. In the recent past, it has been of even broader significance. It was under the authority contained in the Trade Agreements Act that the United States sponsored and by its broad participation brought to a successful conclusion the conference at Geneva in 1947 which resulted in the general agreement on tariffs and trade in which 23 nations undertook to reduce tariffs and

other trade barriers on a reciprocal basis. Extension of the act will be required to make effective United States participation in the forthcoming Geneva Conference on Tariffs and Trade, at which 13 additional nations will participate and will bind themselves to the principles contained in the Geneva agreement of 1947.

Expansion of trade is an integral part of the European recovery program. The ultimate objective of that program is to restore the productive capacity of the European nations so that they may once again be self-supporting at an acceptable standard of living. To achieve this goal, European nations must increase trade between themselves and with other nations, including the United States. In order to buy from the United States, they must sell to the United Sates. Progressive reduction of trade barriers by all concerned, and especially by the United States, will encourage the development of that trade. Because of its dominant position in the world economy, only the United States is in a corresponding position to assume leadership in the reduction of barriers to trade. Only by continuing those measures which have encouraged other nations to join with us in our program of international economic cooperation, can we maintain their faith in our purpose. The Trade Agreements Act is one such measure.

The American Veterans Committee believes that the Trade Agreements Act is an integral part of the bipartisan international economic policy of the United States which has been formulated in order to achieve a more prosperous United States, a healthier and more stable world economy and enduring peace. We call upon the Eighty-first Congress to adopt without delay H. R. 1211, the Trade Agreements Extension Act of 1949.

STATEMENT OF JOHN G. WRIGHT, PRESIDENT OF THE BOSTON WOOL TRADE ASSOCIATION BEFORE THE SENATE FOREIGN RELATIONS COMMITTEE ON S. 833, A BILL TO AMEND THE ECONOMIC COOPERATION ACT OF 1948

My name is John G. Wright of Boston, Mass., where I am engaged in the wool business. I appear here today as president of the Boston Wool Trade Association. This association has among its members about 650 individuals and firms engaged in the business of buying and selling and manufacturing wool. Almost all of the wool consumed in the United States is handled through the members of this association and most of the wool which is manufactured in the United States is manufactured in the northeastern and Middle Atlantic States.

The business of buying and selling wool is practically at a standstill today. and many wool mills are either shut down or are running at curtailed capacity, resulting in much unemployment.

The causes for this stagnation of business are several. This country consumes annually approximately 1,000,000,000 pounds of wool, less than one-third of which is grown in the United States. A large portion of the fine wools which this country is required to import is grown in the British colonies, particularly in Australia. This means that Amercan business must convert their dollars into pounds sterling to pay for such wool, and the British Government compels us to pay $4.03 for our pounds sterling (the official rate), whereas some European nationals with Marshall plan dollars are permitted to purchase their sterling in the free market at a cost of approximately $3.20, which gives them a 20 percent advantage over American business. This has had the effect of increasing the prices of Australian wool to the point where it has been, and is, impossible for American business firms to compete in the purchase of such wools. Some of this wool is purchased by countries with Marshall plan aid and then is manufactured by the purchaser into yarns and cloth and shipped to the United States where the seller receives dollars with which he is again able to purchase cheap sterling. On behalf of the members of the Boston Wool Trade Association I wish to present for the consideration of the committee the following recommendations which the wool trade believes would solve this problem:

1. That American business be permitted to purchase sterling at whatever price it is offered at in the market just as certain other European nationals are permitted to do today, thus allowing American business to compete with the European business in the purchase of wool in the foreign markets; or

2. That American business be permitted to make separate exchange agreements with wool-exporting countries such as Australia, New Zealand, and South Africa. By this we mean to suggest the dollar and the pound of these countries should be freed to find their own relative value, which course if adopted would result, we believe, in a far greater bilateral trade.

I cannot bring to the attention of this committee too forceably the fact that unemployment and further deterioration in our wool textile industry will continue and become more acute unless the advantage enjoyed by certain European nationals who have access to free market sterling, is also made available to American business.

I appreciate the opportunity that the committee has extended me in presenting the problem of our industry to the committee and in conclusion, may I express the hope that our problem will have your serious consideration.

The CHAIRMAN. The committee will recess until 9:30 in the morning, but I will say that Senator Malone will be on for a few minutes. (Whereupon, at 5:30 p. m., the committee recessed until 9:30 a. m., of the following day.)

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