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Mr. WILLIAMS. No; that is my objection to the amendment. I might say now we are applying it only to the Export-Import Bank, and if that principle is to be applied I agree with Mr. Wolcott here that it should be applied to all of them, if it should be done in connection with legislation involving that particular question.
Mr. JONES. And for that purpose.
Mr. WOLCOTT. Finland is not in default, so the terms of the Johnson Act would not apply anyway.
Mr. JONES. That is right. I repeat we have not, and will not violate the provisions of the Johnson Act.
Mr. WILLIAMS. Are there any further questions? If not, Mr. Jones, I think we may finally excuse you.
We have another witness who wants to appear before the committee at this time. Colonel Jouett, will you come forward !
Colonel JOUETT. Yes, sir.
STATEMENT OF JOHN H. JOUETT, PRESIDENT, AERONAUTICAL
CHAMBER OF COMMERCE OF AMERICA
Mr. WILLIAMS. I would like to ask you, as a preliminary question, Mr. Jouett, about how long you want to take?
Mr.JOUETT. Not over 5 minutes, Mr. Chairman.
Mr. WILLIAMS. If it is not longer than that we will be glad to hear you for 5 minutes. I was going to make this suggestion, that it is getting late, and if you want a more extensive hearing than 5 minutes, we would have to hear you at some other time.
Mr. JOUETT. I will only require about 5 minutes.
Mr. JOUETT. I want to extend a little bit, if I might, the discussion that was brought up at the opening this meeting on the question of excluding from the provisions of this bill that is before the committee the commercial airplane as distinguished from the military plane.
After the last war there was a flooding of the markets both in the United States and abroad, but mainly abroad, of obsolescent and surplus military equipment, aviation equipment. There was also a mad scramble for export markets in order to bring the income back to the countries that had been engaged in war. I think we may safely anticipate a similar condition when this war is over. Meanwhile, in the countries which are not at war there is a decided effort being made in the use of commercial equipment such as we are using in this country on our air lines, our mail, and passenger service.
It is particularly true in South America that that should be built up so that the outlying districts which have not a proper amount of communication service should be opened up for commerce. So that it is the feeling that the United States should have an opportunity in the development known as commercial aviation.
The gentleman from the State Department here mentioned that this was a seller's market and that any type of any plane would be apt to sell abroad now. That is not true of the belligerent nations. There have been many and there are many bits of good equipment, both airplanes and other air-line equipment that are available for sale secondhand, but these nations will have nothing to do with it. They will not buy it. Furthermore, these European nations are demanding nothing
but the very latest equipment that our factories are making. They will not even take equipment that was good a year ago. I am bringing that point out to show that the modern warplane of today is a very specialized article, and that you cannot take a commercial article and make it into war equipment that would be of any use at all in modern warfare. Up to now the Export-Import Bank has been authorized to loan for the sale of such equipment. This bill would prevent it. Therefore, for the safety of our own export position not only of aviation but of everything else, and our relation with the countries of South America, I think an absolute law prohibiting the use of funds for purely commercial articles would shut a door that we have a tremendous amount of trouble in opening now.
Even after this bill is passed surface vessels can be financed; automobiles, trucks, and tractors can be financed which are used for peaceful pursuits only; but the airplane itself which is constructed for peaceful pursuits cannot be sold. There is discrimination there. If an exception were made for the commercial aircraft, the Control Division of the State Department would still have the same control that it has now in getting out export permits, and that could be thoroughly controlled, but the door would not be shut. It would help our industry to face competition that has been acute in the past. Úp until this war started, when Italy and Germany were fighting for the exports to South America, they used the extension of long-time credit and guaranties given by the nations, and they instituted barter exchanges, and they took nations free of charge over to their country, and they taught them how to fly and taught them other things. They sent their own people free of charge into South America to run their air lines and to instruct their people how to run them. In other words, there was a type of competition that we were not able to meet in this country. If we are now excluded from using the only way we could get this extension of credit we would be absolutely at the mercy of those nations who would sacrifice almost anything to get that market. That is all I have to say.
Mr. WILLIAMS. Thank you. .
Mr. MILLER. Just one question. How would you propose to correct this, Mr. Jouett?
Mr. JOUETT. I have a suggestion, which is that if four words were inserted on page 2, line 6, after the fourth word—if there were inserted “other than commercial aircraft," I think, Mr. Miller, that would cover our point.
Mr. MILLER. This is a different bill than we had this morning.
Mr. JOUETT. I have not seen that. I have before me the bill of February 14, not the new one.
Mr. WILLIAMS. Very well; thank you for your statement.
(Thereupon, at 1:10 p. m., the committee adjourned until tomorrow, Wednesday, February 21, 1940, at 10:30 a. m.)