(The material referred to above follows:)

U.S. exports of passenger cars and chassis, new,' 1961

US MP

TXP of autos by country

Prepared in the International Trade Analysis Division, Office of Regional Economics, from basic data of the Bureau of the Census, U.S. Department of Commerce, March 1962.

Prepared in the International Trade Analysis Division, Office of Regional Economics, from basic dats of the Bureau of the Census, U.S. Department of Commerce, March 1962.

The CHAIRMAN. Are there any further questions? Mr. Betts will inquire, Mr. Secretary.

Mr. BETTS. Along with the rest of my colleagues I, too, want to welcome you, Mr. Secretary.

I want to ask one question on section 232 which has the title "Safeguarding National Security." Am I correct that that is the present power that would give the President the authority to regulate the importation of oil? Is that the section?

Secretary UDALL. It is my understanding, yes, that the present power that the President has with regard to national security phases of trade is preserved and is not changed. In other words, the President still would have what is rather broad power to take special steps where matters of national security are involved.

Mr. BETTS. Am I correct that this section is pretty much the same as the law is now?

Secretary UDALL. That is my information, yes.

Mr. BETTS. And that is regulated entirely by quota, is it not?

Secretary UDALL. This is the power the President has, for example,
to impose quotas such as was done with the petroleum imports.
Mr. BETTS. That is the way it always has been, is it not?
Secretary UDALL. Yes, there is no significant change.

Mr. BETTS. I notice this section reads that the President can "take such action * as he deems necessary," which I suppose means quotas, but there is no present intention I suppose to change the present methods?

* *

Secretary UDALL. I think this merely clarifies the present power and does not diminish it. It is the idea of the legislation that this is a very important power that the President should continue to have and it should be spelled out.

Mr. BETTS. And that is not linked up with any requirement for action of the Tariff Commission?

Secretary UDALL. No, this is a broad general power.

Mr. BETTS. They usually go to your Department first, I suspect, and present their case and the President reports to your Department? Secretary UDALL. This would be the normal case. This is the way it happened with the petroleum problem. Industry people work with the Department, and of course other Departments particularly, of course, the Office of Emergency Planning, get involved in these things and it ultimately reaches the President's desk.

Mr. BETTS. I asked you that because I understood it was under your Department and I was interested because I have been approached and it has been discussed with me to try to find out and determine if this was the same provision as in the present law. I have your assurance that it is, is that correct?

Secretary UDALL. That is my position.

The CHAIRMAN. Are there any further questions? Mr. Alger.

Mr. ALGER. Mr. Secretary, everybody is welcoming you back. I shall, too, and on the record I want you to know that I consider you an example of the physical fitness that the President has recommended and I want the record to show I went to the gym today and if I did not go almost every day I could not stand it here.

As to your statement, Mr. Secretary, your choice of words on page 2 hit me just right. You say

any philosophy of fear in connection with the President's trade expansion program is in reality a denial of faith in the very element that has brought this country to its present position of unchallenged eminence in the world.

I simply want you to know that if we differ, as differ we will I think, I would like to relate my belief, as the gentleman from Michigan questioned you a few moments ago, to our constitutional oath which reminds us of what really brought us to our unchallenged eminence in the world, Mr. Secretary.

Unconsti It was not Federal subsidy. It was not Federal regulation and regi- op. mentation and control. It was permitting people freely to engage & in commerce, and those of us who may disagree with you, as I am beginning to think I will in view of the last 3 days' testimony, believe that actually we are not talking about free trade at all. We are talking about governmental controls through a transfer, an unconstitutional transfer of power from us into the executive.

What I would say also in answer to that and your statement on page 5 relative to the alternative to H.R. 9900, and I believe, and I only submit it to you for comment that so far as I am digging into this as a student I am finding that actually the alternative to this bill is merely the enforcement of reciprocal trade which to this day has not been enforced to my knowledge.

We simply leave it a matter of choice with the foreign governments, as we lower our tariffs. Whether they will match our tariffs in the same spirit. Would you care to comment on that?

Secretary UDALL. I certainly think the intention has been one of reciprocity. If we have not been very tough at the bargaining table, we should be criticized for it, and I understand from what Congressman Curtis said that the record is going to be looked at very closely on this.

Reciprocityman

1 beed

will

I think if our people are not doing a tough enough job of bargaining that they need to be stiffened up because the very essence of the idea is that there is reciprocity and I think maybe you have a point on that score.

Mr. ALGER. I appreciate your frankness in stating it, Mr. Secretary, and to the degree that you are correct in that, and I share your view, it could logically be shown that this bill is precipitous in action and all we need to do is to extend the reciprocal trade which could be asked of us by this administration and then put more teeth into it. Mr. DEROUNIAN. Will you yield on that?

Mr. ALGER. I yield.

Mr. DEROUNIAN. Mr. Secretary, an example of Mr. Alger's complaint that we have not got reciprocity is one of the exchanges on air routes where we gave the British Empire Tokyo to New York and the British Dominion gave us rights over the Antarctic. That was a terrific exchange. That is what he is talking about.

Mr. ALGER. Yes. I thank the gentleman for his contribution and, while that does not relate exactly to trade, I think that is what we are talking about and I appreciate it; and, Mr. Secretary, you are not, by the way, the first representative of government to agree that there might be something in that, that the difference of tariffs between here and our foreign friends when we enter into these agreements is a situation that this bill is not correcting.

In fact, we are begging the question. We need to go back and just do what we earlier said we were doing with reciprocal trade. Now I would like to ask you, and I am going to cover just a couple of items here that have not been mentioned, whether you subscribe to this statement that I have come across in a State Department booklet, and this is in your field, Mr. Secretary.

For the record, this is Department of State publication No. 7336, Commercial Policy Series 184, released February 1962, revised, apparently something of a continuing document entitled "Together We Are Strong." It says this on page 9, with a picture of a bunch of automobiles. "Automobiles and Imports" is the heading. You can see it right here:

Without foreign trade new cars would soon be impossible to find because the automobile industry depends on at least 31 imported materials from all over the world.

And what do you suppose one of those is, without which we would not have automobiles? It is oil from Kuwait. Now you and I understand without any argument, I think, that we have the integrated companies and our independent oil producers at odds with each other over how much oil should be imported, but nobody contests the fact that we have oil in the United States.

That is not what this document says. It says we would not have automobiles if we did not have oil imported from Kuwait. Do you agree with that statement, assuming I quoted it to you correctly? Secretary UDALL. Someone may have stretched the point.

Mr. ALGER. I will not press you further. Maybe that is a nice way to let them off the hook, Mr. Secretary; but, now, Mr. Secretary, I make my point. I think that is more than stretching the point. I think that is erroneous. I am not questioning the intent, whether it is deceit, intentionally or otherwise. That is not my purpose in bringing it up; but, in line with the questions of this committee, particularly the gentleman from Missouri who has been asking for a lot of information and has been pointing up that this is not a freeing of trade but a further control of trade, it is based also I believe now, I am beginning to see, on misinformation or lack of information.

This little pamphlet, while seemingly not a part of it, yet is entitled "Imports," and to me illustrates the fact that we are not being given correct information and I mention it to you because as a Cabinet officer, in your counsels with your colleagues you can relay to them what we are saying here and maybe some good can come of it in giving us more information so that we can really grapple with this bill.

I want to ask a question relative to deficit financing. In this bill we have the subsidies, of course, both for the assistance allowance to the individual workers and the guaranteed loans, research, and so forth, for industry. We know that this will amount to millions of dollars. How much at the moment is not part of my question, though it certainly ultimately will bear on that question.

Mr. Secretary, would your view on this program differ as to whether you would be for it in a period of deficit financing or in a period when we are in the black?

Secretary UDALL. No, I think this is the type of program which is intended, much like this retraining bill that Congress passed the other day, to help smooth out economic adjustments, to help give people a start in another direction, and in terms of the good to the country of producing shifts and adjustments it makes sense that this would be a good program whether we are in a period of recession or in a period of boom.

It seems to me it ought to be a constant ongoing program. Some of these programs will take probably 2 or 3 years to work out.

Mr. ALGER. As I understand your answer, and you are being straightforward I must say, that is, you would be for the program whether the Government administered it as deficit financing or as a surplus?

Secretary UDALL. Yes.

Mr. ALGER. All right. Then I simply want to call your attention to this danger. If we do not manfully face up to the causes, but leave it as a consequence of the cause, deficit financing-which is actually the printing of money or the floating of Government loans, bonds, and so forth-that will jeopardize our currency overseas. Does that not occur to you as a very dangerous thing to do in a strengthening of trade, that is, to jeopardize our currency?

Secretary UDALL. I would take a broader view of that. It seems to me that the one thing that is going to jeopardize our currency

81843-62-pt. 2--15

and our economic position most in the long run is if we do not have an economy that is strong and that is growing at a proper rate, and I think this is the type of thing, just as this retraining bill that Congress passed the other day, that will help keep the economy growing and keep it strong. I would place my concern there rather than on this single factor that you have mentioned.

Mr. ALGER. But you would not say that our economy is not strong or growing, would you?

Secretary UDALL. I think we are moving into a growth phase. I hope we are.

Mr. ALGER. Are you prepared to say we have not been growing, Mr. Secretary, at any time?

Secretary UDALL. No, no.

Mr. ALGER. That was my question.

Secretary UDALL. No, we have been growing. I am referring to what I would consider as a proper growth rate.

Mr. ALGER. In other words, you think it should be growing faster? Secretary UDALL. That is the point I am making.

Mr. ALGER. All right. We can have a difference there, but I did want to understand you.

That is all. Thank you very much, Mr. Secretary.

The CHAIRMAN. Mr. Derounian?

Mr. DEROUNIAN. Mr. Chairman.

Mr. Secretary, like the rest of us, I am delighted to see you looking so well. I take it when you say you are unequivocally in favor of H.R. $900, you mean that you are now and have been in favor of that principle since you have been Secretary of the Interior?

Secretary UDALL. Yes, I think so.

Mr. DEROUNIAN. And you stated that you did not believe in erection of trade barriers between the United States and other parts of the world. Is that right?

Secretary UDALL. There are exceptional circumstances. I administer some of them. I have discussed them here earlier today. I am not here saying that all barriers should be down tomorrow or that there are not some situations that require special attention.

Mr. DEROUNIAN. Would you be in favor of raising the tariffs on some parts of our industries if this bill were passed?

Secretary UDALL. Of raising some tariffs?

Mr. DEROUNIAN. Yes.

Secretary UDALL. There might conceivably be some special situations where raising the tariff would be in order. I think what is contemplated under the legislation is through reciprocity, a lowering of tariff's generally, but there could be items singled out especially that might deserve that type of consideration. I do not think the legislation necessarily closes the door on that, but it is pointed in the other direction.

Mr. DEROUNIAN. Say that in the fish industry, if certain segments of the fish industry were importing a certain type of fish; the domestic supply was not enough. Would you say then that any attempt to raise the tariff on free fish into this country would be erecting barriers in commerce?

Secretary UDALL. We have had problems just like this and pretty tough ones in recent years and we have handled it without tariffs. Some