ing economic condition of an industry? Would the Government of the United States impose restrictions on leather imports into this country because the tanning industry is experiencing difficulties?

Tariffs and trade treaties are meaningless when contractural obligations are violated through artificial and discriminatory foreign tactics. It is utter nonsense for the United States to reduce its tariff rates progressively, in exchange for supposed tariff benefits abroad, when foreign nations simply do not permit United States leather to be imported. The treaties negotiated under the law are hollow and a mockery of the objectives approved by Congress. Instead of receiving reciprocity the United States leather industry has been and is the victim of gross inequality. Leather from United States is effectively barred by the United Kingdom, France, Italy, West Germany, Spain, and dozens of other countries.

Throughout the postwar period the tanning industry has urged and beseeched the United States Government for protection against inequity and lack of reciprocity. Time and again the industry has been assured that foreign discrimination was temporary, that some day reciprocity would really come and that our foreign trade would be genuinely two-way instead of completely a one-way proposition. Nothing of the kind has happened. Instead of trade barriers and discrimination being eliminated, they have multiplied. Appeasement by the United States has led to indefinite delay, to constant excuses and to the adoption of discriminatory trade barriers by more and more countries. When West Germany, with a favorable dollar balance of trade, can circumvent the obligations of reciprocity with impunity, other nations have no hesitation in following suit.

FOREIGN SUBSIDIES ARE NOT PENALIZED

Complete lack of reciprocity in foreign trade is aggravated by the subsidization of foreign leather. Here, again, indirect devices are used to circumvent the penalties and prohibitions of the United States tariff law. Foreign leather enters the United States with the advantage of tax remission at home. In West Germany, for example, exports are subsidized by the remission of taxes on shipments sent abroad. Such tax advantages for German exporters are just as much a subsidy as the direct transfer of funds from the Government to the exporter.

There are other forms of foreign subsidy. Mexico imposes an export tax of 45 percent on raw materials such as cattle hides and goatskins. The effect of this export tax is to give the Mexican leather producer a 45 percent advantage in raw material cost over the world market cost of the United States tanner. The committee's attention is also called to the export quotas on calfskins maintained by the French Government. The latter country, supposedly in need of foreign exchange, and dollars above all, deliberately restricts commercial exports to give artificial protection to a domestic group. Such denial of access to raw materials abroad has plagued United States tanners again and again in the postwar period.

The United States Government has refused to acknowledge that remission of taxes by foreign countries on export shipments represents subsidy. The competition of such subsidized imports has already caused serious damage to the United States leather industry. Unless such unfair competition is stopped and penalized, it will grow to an extent jeopardizing the price structure, employment, and profit in a host of domestic industries.

INEQUALITY IS A TWO-EDGED SWORD

Lack of reciprocity in foreign trade gravely injures the tanning industry of the United States in two ways. Foreign leather producers, protected at home against any competition by unfair trade barriers, are able to raid United States raw material markets with impunity. The foreign leather producer who enjoys a monopolistic or cartel profit at home can pay prices for hides and skins which the competitive United States leather industry cannot afford to pay. It is an amazing paradox that supposedly indigent countries abroad are able to buy raw calfskins in the United States at prices which the United States economy cannot afford to pay.

Loss of raw material in the United States has burned the candle of the tanning industry at both ends. In the first 4 months of 1958, 35 percent of the United States raw calfskin supply has been exported to countries including Japan, West Germany, France, Holland, Italy. Loss of this raw material, a

direct consequence of one-sided trading in leather, has injured tanners, shoe manufacturers, shoe retailers, and consumers. Discriminatory protective trade barriers abroad insulate foreign cartels against competition and enable them to inflate United States raw material markets.

COMPOUNDING INEQUITY

The growing difficulties, problems, and injury suffered by the leather industry of the United States during the postwar period has been compounded by a flood of importation in finished leather products. The restrictions and discrimination to which United States leather is subjected abroad are exaggerated by the great increase in shipments to the United States of handbags, gloves, wallets, shoes, camera cases, sporting goods, and a great variety of other leather products, in addition to leather. Such imports reflect the enormous disparity in wage standards between the United States and every other area of the world. Lack of reciprocity in trade in leather products has had effects just as vicious as the absence of reciprocity for the leather industry itself. Foreign discrimination aggravates the effects of the vast difference in wage standards between the United States and every other country.

TEETH NEEDED IN LAW

The present foreign trade law and the bill for its extension have no teeth. The law permits other countries to flout reciprocity and to discriminate against United States industry. It imposes no penalty whatsoever against countries which do not do unto us as we do unto them.

The absolute minimum change needed in our foreign trade policy for the sake of the objectives espoused by the United States is a clear-cut and enforceable quid pro quo. The privilege of open and unrestricted trade with the United States must be denied to countries which ignore their treaty obligations. Countries which discriminate against the United States by raising and maintaining import barriers to protect their cartels or monopolies must not be given the privilege of open and unrestricted access to our domestic market. The leather industry demands that the law be made clear and emphatic in that respect in order to end a situation that is certain to destroy great segments of United States industry.

In the name of reciprocity the tanning industry also asks that the penalties of our tariff law against subsidized imports be enforced without delay and without equivocation. True competition and equity for United States industry demand that antisubsidy penalties be enforced and not excused.

The tanning industry submits that the history of the postwar period has exposed the operation of the Reciprocal Trade Agreements Act as a one-way commitment by the United States. The objectives of the law have not been met in practice. They have been frustrated and defeated by foreign evasion. Domestic industry has already paid a heavy price for constant appeasement by the United States in failing to demand reciprocity. Unless appeasement stops, unless Congress requires the enforcement of reciprocity, a costly and tragic climax awaits United States industry.

To meet the cellar-cut difficulties of the present law and its operation the leather industry asks that—

(1) Equity be restored to foreign trade. Discrimination against exports by United States industry should be penalized by equivalent restrictions against nations guilty of such discrimination.

(2) The law should lay down explicit mandate for enforcement of antisubsidy penalties including subsidies based on the remission of taxes abroad on shipments to the United States.

(3) Any further tariff reduction by the United States should be avoided until and unless injury to domestic industry caused by lack of reciprocity has been rectified.

(4) In view of the amazing shortcomings and failure to practice reciprocity by other countries it would be foolhardy to extend the law for 5 years. Such a long-term commitment by the United States can only strengthen the avoidance and evasion of reciprocity by others. The law should be subject to annual review in order that shortcomings in trade practice by other countries be rewarded in kind.

Sincerely yours,

IRVING R. GLASS,

Executive Vice President, Tanners' Council of America.

STATEMENT OF E. L. WHEATLEY, PRESIDENT, INTERNATIONAL BROTHERHOOD OF

OPERATIVE POTTERS

This statement is submitted in lieu of a personal appearance because my request to appear was denied on the grounds that it was received after the deadline. I therefore request that it be made a part of the printed record.

I do not consider it necessary to repeat our reasons for permission to be heard. The makers of pottery in this country have told their story many times before congressional committees. This industry is one of those that is highly vulnerable to imports because of the high percentage of labor cost to the total cost of production. Our employers, we recognize, could not support the prevailingwage standard in this country if the low-wage competition from abroad were not offset by tariffs.

Our present concern is that these tariffs are in fact not high enough even today to be of much help. They have been reduced from time to time under the trade agreements program. What we really need is an import quota that would not allow imports to take more than a predetermined share of the market, thus allowing the domestic industry to live. Already in the fine china field imports are supplying over 90 percent of the market. They do not have far to go to wipe out what is left of our domestic industry.

Several pottery plants have gone out of business within the past year or two and others are holding on with fading hopes. In many places, in addition to the unemployed, many of our members are on part-time work. This, of course, has reduced their income and therefore their power to purchase the products of other industries.

For obvious reasons we are greatly interested in the pending tariff legislation. I need hardly say that we are opposed to H. R. 12591 in its present form and believe that it should be amended if it is not to represent legislation highly detrimental to the future welfare of our members.

We strenuously oppose the 5-year provision of the bill. If this should pass we would not longer have any real access to Congress. The Executive power would become so deeply entrenched in its control of our foreign trade that it might never be possible to bring back the power of Congress. We feel very strongly about this. We might as well be deprived of our vote in national elections.

So far the White House has used its power under the Trade Agreements Act largely to ward off the remedies proposed by the Tariff Commission under the escape clause. This is an amazing situation and one that weighs heavily in shaping our views in this matter. The Executive has had all the time needed to show that the assurances that have come from the White House in the past 24 years meant what they said. Time after time one President after another has said that no domestic industry was to be jeopardized or seriously injured by the trade agreements program.

Yet when relief has been proposed by the Tariff Commission it seems that a different President from the one giving the assurances must have acted. It has not been possible to reconcile the Presidential actions with the Presidential

assurances.

This being the case, we feel that the power of the President to strike down Tariff Commission recommendations at will should be taken away from him and lodged in Congress. This is where this power belongs, in any case, under the Constitution. Since the Presidents have so openly and callously broken their promises, the power exercised by them under a grant from Congress should be pulled back.

H. R. 12591 should be amended so that there could no longer be any doubt about the supremacy of Congress over the escape clause. If the President should seek to veto or reject a Tariff Commission recommendation in the future, he should have to obtain the approval of Congress beforehand. If Congress did not give him such support by affirmative action, the Commission's recommendation should go into effect.

This would put a stop to the present and past hypocrisy of the Presidents in asserting sympathy for domestic industry and the workers when they are badly injured by imports, while, at the same time, refusing to apply the remedy intended by Congress and proposed from time to time by the Tariff Commission. It has come to our attention that Senator Strom Thurmond has introduced an amendment that would accomplish a cutback to 2 years from the 5 years

contained in the House-passed bill, and would require congressional approval of a Presidential rejection of a Tariff Commission recommendation under the escape clause before it could take effect.

We support the Thurmond amendment and urge its adoption.

EAST LIVERPOOL, OHIO, July 1, 1958.

EDWARDS & ANGELL,

Providence, R. I., June 28, 1958.

Re trade-agreements-extension bill

Hon. HARRY F. BYRD,

Chairman, Senate Finance Committee,

Senate Office Building, Washington, D. C.

DEAR SENATOR BYRD: I was much distressed by the passage by the House of Representatives of the administration's bill (H. R. 12591) extending the Trade Agreements Act for a further period of 5 years, and continuing the President's power to regulate commerce with foreign nations, including the imposition of tariffs, a legislative power expressly vested by the Constitution in the Congress (art. I, secs. 1 and 8).

That the legislative power of Congress cannot be delegated, see United States v. Shreveport Grain & Elevator Co. (287 U. S. 77 (1932); Panama Refining Co. v. Ryan (293 U. S. 388 (1934)).

The apparent attempt to remedy this defect in the existing law by giving to Congress the power to veto the President's action by a two-thirds vote of each House does not, I submit, render the measure constitutional. Incidentally, the inclusion of this provision in the bill (with the full backing of the administration) is a clear admission that the power conferred upon the President is a legislative and not a mere administrative one.

By the terms of the bill, the President is given the power either to approve or disapprove a report of the Tariff Commission of its investigation and hearings regarding alleged serious injury to a domestic industry.

If the report is approved by the President, the action recommended by the Tariff Commission becomes effective, without any action at all by the Congress. If the report of the Commission is disapproved by the President, in whole or in part, such disapproval is final unless the action recommended by the Commission is approved by both Houses of Congress by a two-thirds vote.

In the case where the President approves the report of the Tariff Commission, the Congress is deprived of all power whatsoever in the matter-a clear violation, I submit, of the rule forbidding the delegation of legislative power by the Congress.

In the case where the President disapproves the report of the Commission, the power given by the bill to Congress to veto the President's action does not, I submit, render the delegation of power to the President lawful.

The Constitution provides for the enactment of legislation by the Congress, with the right of the President to veto the legislation. It does not provide for the enactment of legislation by the President, with a right of Congress to exercise a veto power, which is what the bill under consideration does.

This, I submit, is an important distinction. The President's veto power is one that should be sparingly exercised, and his action in many cases should be influenced by the action which Congress has already taken.

If we have gotton to the point where the President is to enact the legislation subject to the approval of Congress (by a two-thirds vote of both Houses), we have, in effect, rewritten an important part of the Constitution, a procedure which I used to think was by way of amendment in accordance with the terms of article V.

So much for the constitutional question.

There is, in addition, the fact that the executive branch of the Government has exercised its powers under the act arbitrarily and in such manner as to inflict great injury upon certain of our industries, not the least of which is the textile industry. As a result, huge pecuniary losses have been suffered, and hundreds of thousands of employees have lost their jobs. I am sure that you must be throughly familiar with the facts which have been presented to the committees of Congress by numerous witnesses.

I earnestly urge that the tariff power be returned to Congress, where, under the Constitution, it belongs. Let those who think the power should be vested in the President seek an amendment to the Constitution, but let's have an end to the unlawful exercise of legislaive power by the Executive.

With kindest regards, I am,

Very sincerely yours,

ROBERT B. DRESSER.

STATEMENT OF THE NATIONAL WOOL GROWERS ASSOCIATION,
EDWIN E. MARSH, EXECUTIVE SECRETARY

The National Wool Growers Association is the oldest national livestock organization in the United States, and for 92 years has been the recognized spokesman for the farmers and ranchers of the Nation who grow wool and lambs. This statement is also presented in behalf of the National Wool Marketing Corp., with headquarters in Boston, Mass. The National Wool Marketing Corp. is the largest grower cooperative wool-marketing organization in the United States and has some 85,000 woolgrowers in its membership.

The domestic woolgrowing industry wholeheartedly endorses the amendment to H. R. 12591 introduced by Senator Strom Thurmond on June 24. We strongly favor the 2 features of this amendment to (1) restore to Congress some authority over Tariff Commission recommendations and (2) give Congress an opportunity to review this program in the light of conditions 2 years from now in lieu of freezing the trade-agreements extension for a 5-year period.

We are sure this committee and the Congress are aware of the economic plight of the domestic woolgrowing industry during the last decade. Already hard hit by a squeeze between price ceilings and mounting costs during World War II, the industry faced almost certain extinction when in 1958 a 25-percent reduction in wood tariffs was negotiated under the Trade Agreements Act. Ineffective methods of obtaining relief under the act allowed the situation to get so bad from import competition that by 1954 the industry had lost almost 50 percent of its production. Congress, therefore, found it necessary to enact special legislation to prevent these imports from completely destroying American production. As a result of our experience we feel strongly that the welfare of the American producing economy, including industry, agriculture, and labor, depends on the resumption by Congress of its established authority to regulate tariff and trade policies. We are certain that the Senators and Representatives in Congress are much more responsive to and familiar with the needs of their States than is the executive branch of our Government. Senators and Representatives have a greater knowledge of the impact of injury on domestic industry and labor than do the tariff and trade policymakers for the administration. We feel that entirely too much of this trade policy is determined by the career members of the State Department, who are dealing in international affairs without full knowledge of, concern for, or responsibility to the American producers.

Therefore, we are concerned with what we consider abandonment by Congress of these rights of the people to control foreign trade through their Senators and Representatives in Congress, as set forth in the Constitution, through delegation of final authority on these matters to the executive branch of the Government. It is true that Congress has set up safeguards in the Trade Agreements Act which have been established for the protection of domestic industry. However, in many instances, we feel the effectiveness of these intended safeguards has been nullified by the wide discretionary powers vested in the executive branch of the Government which permit the overruling of Tariff Commission recommendations. Administrative decisions have obviously been strongly influenced by considerations far removed from those intended by Congress when safeguard provisions of the statutes were enacted.

Senator Thurmond's amendment would return to Congress some of its presently abandoned authority over tariff and trade negotiations. It would give added assurance that trade and tariff negotiations and safeguards in the Trade Agreements Act are administered both on the basis of our relations with other nations and also on the basis of consideration for the economy of American industry, agriculture, and labor.

When the escape clause was made a part of the Trade Agreements Act, it was done with the express purpose of providing a means of protection for domestic