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Senator HARTKE. Let me just point out that most of the bourbon is still bottled in southern Indiana rather than Kentucky. Please do not forget this fact!

Mr. MEANY. Well, all right, but you cannot even advertise it in France. You cannot advertise it

Senator HARTKE. You do not have to advertise bourbon. It advertises itself.

Mr. MEANY. Well, some of the French might be better off if they drank good old Kentucky or Indiana bourbon.

Senator HARTKE. Right, I agree.

Mr. MEANY. And a license is required to import some electronic components and textile goods. There are quotas abroad on motion pictures and television films from other countries. Japan has quotas on aircraft parts, on computers and parts for computers. Licenses are required for electric measuring instruments. Imports of coal are subject to quotas. There is an embargo on certain vaccines and serums in Japan. Screen time quotas are applied to motion picture imports. In other words, they only get a portion of screen time. The Japanese, through their devices, make it very difficult for American cars to get in their market.

In Canada, wheat, barley, and oats are state traded, which means that the Canadian Government effectively controls all sales through licensing.

Now, most nations of the world have state trading in their alcoholic beverages.

So, what I am saying in effect, "Sure, do business with the Soviets, do business with them. But do business on the basis of give and take. Do not let it be a one-way street."

Senator HARTKE. Be fair traders rather than free traders.

Mr. MEANY. Fair trading.

Senator HARTKE. Because we have gone a long way, and I tell you there have been tremendous changes, not only since the Hull reciprocal pact, but there have been tremendous changes in the last 10 years, and tremendous changes in the last few months.

Senator HARTKE. Right.

Mr. MEANY. And I think Congress should take a look at the whole ball of wax.

Senator HAPTKE. The U.S. Congress should start representing the United States of America instead of representing all the foreign countries. This is what you really mean?

Mr. MEANY. Well, I would not say that in the company of a group of distinguished Senators.

Senator HARTKE. Mr. Meany, I am not going to take any more of your time. I do want to congratulate you on a forthright statement. I never can understand why the American working man, the American businessman, and the American Congress cannot understand that what you are suggesting is in the best interests of the Nation, not necessarily for the AFL-CIO, not for organized labor, but in the best interests of all of the people of this country. Your policy makes it possible to pay the bills, pay the taxes, educate the children, and keep this country strong.

Mr. MEANY. Senator, there is not anything I could think of that would help this country that would not help the AFL-CIO. There is

just nothing. So the idea that we have got some special interest is wrong. Take our support of minimum wages. We do not have any members below the minimum wage. Everybody is covered by workman's compensation because of labor activities, and we are only a minority. We are still a minority of the work force, and we make no apology for it, but we have a very simple theory: anything that helps our country has got to help us. There is no other way out.

Senator HARTKE. Well, let me congratulate you again, and I just wish more people would listen to you.

Thank you.

The CHAIRMAN. Senator Packwood.

Senator PACKWOOD. Did I hear you say, Mr. Meany, that what is good for the country is good for the AFL-CIO?

Mr. MEANY. It's got to be.

Senator PACKWOOD. And vice versa.

Mr. MEANY. I did not say vice versa. You said it.

Senator PACKWOOD. No, I was paraphrasing something.

Mr. MEANY. You are in the Charlie Wilson camp. That is what Charlie Wilson said. What was good for General Motors had to be good for the United States. I do not buy that idea at all.

Senator PACKWOOD. What he actually said is what is good for the United States is good for General Motors, and vice versa. Mr. MEANY. No, he did not.

Senator PACKWOOD. Now, I will not quarrel with you.

Mr. MEANY. You were going to school when that happened. I was around here.

Senator PACKWOOD. Well, hopefully we will both be around for a long time.

What do you think would be a fair income for a wheat farmer who has got a couple of hundred thousand dollars tied up in machinery and land and who is working the farm with his family?

Mr. MEANY. What would be a fair income?

Senator PACKWOOD. Yes. A couple of hundred thousand dollars in investment and he is probably working 80 or 90 hours a week?

Mr. MEANY. Well, I think a fair income, what I would think would be a fair income would be much higher than he is getting.

Senator PACKWOOD. I agree with that.

Mr. MEANY. You see, I am a high income guy, you know, I have sat in on all of these Government salary study committees. I do not think you are getting enough money.

Senator PACKWOOD. Most of my constituents would quarrel with that.

Mr. MEANY. I have sat on Government commissions that had to do with the salaries of congressional leaders, Cabinet members and I am a high income guy. I do not think the farmer is getting enough. Let me put it that way.

Senator PACKWOOD. All right.

Now, let us take the wheat farmer particularly. Barring a terrible. crop failure, this year we are going to harvest about 2 billion bushels of wheat, of which we will use between 700 million and 800 million bushels domestically.

What do we do with the rest of it?

Mr. MEANY. Well, I guess you talk to Continental Grain and

Cargill and the big wheat shippers and see what they want to do with it, and when the deal is all said and done, I think the farmer gets the short end of it, you know.

I do not go with these breast-beating Members of Congress who say that they are worried about the farmer when they are really worried about Continental Grain and Cargill and the great big shippers. So anything that helps the farmer-and when you talk about the farmer, you are not talking about Dwayne Andreas. You are not talking about Continental Grain. I am talking about the farmer, and I am with you on the farmer. But somewhere in between.

Senator PACKWOOD. You have no objection to the farmer getting $5 a bushel for wheat?

Mr. MEANY. No, I have no objection if that is what he needs. Let him get it.

But I certainly am going to try to find some way to get the workers, to get their wages up to the point where they can buy the bread that you produce with that $5 wheat, and I surely want him to get it and not the Russians to get it.

Senator PACKWOOD. Let me ask you about something in your statement where you are questioning the loyalty of multinational corporations. Where do you think corporate loyalty belongs for a foreign company that operates in the United States?

Mr. MEANY. A company that is based in the United States, its loyalty belongs here.

Where does the foreign company's loyalty belong that operates? Back home, that is where you will find it.

Senator PACKWOOD. When the Volvo plant opens in Virginia. That plant should be subjected to Swedish sovereignty and Swedish regulation and not, to that of the United States?

Mr. MEANY. You think it will not be? You do not know the Swedes if you do not think it will be.

Senator PACKWOOD. I do not think the U.S. Government is going to tolerate it.

Mr. MEANY. But the point is, let them pay their obligations to their own government, and as far as them operating here, we will try to do our bit for the workers and let our government-but the idea that they will not be loyal to their own government is ridiculous. Of course they will.

Senator PACKWOOD. But you are not suggesting, are you

Mr. MEANY. But what do you do with a U.S. corporation-
Senator PACKWOOD. You are not suggesting-

Mr. MEANY [continuing]. That takes orders from the Arabs and will not supply our fleet in the Mediterranean? What do you think of that?

Senator PACKWOOD. What do you think if we have a Volvo plant. down here and we get into a war and they are making tanks instead of whatever they might be making?

Who should they be subject to, Sweden or the United States as to where they ship those tanks?

Mr. MEANY. Not if we get into a war. If we get into a war we would certainly have emergency powers.

Senator PACKWOOD. How about the automobiles they make there?

Should they be able to ship them any place they want and not be subject to our rules?

Mr. MEANY. We have had an open market, and you will find out that the automobile workers, like all other trade unions in this country, have been free traders, but I think you had better talk to Leonard Woodcock now. He might have some different ideas. I defer to his thinking on that.

Senator PACKWOOD. Let me ask you something about this foreign tax credit to make sure I understand how it operates.

You have a company that makes $2 million before taxes in this country. They pay a 48-percent tax rate.

So they pay $960,000 in taxes?

Mr. MEANY. Right.

Senator PACKWOOD. Now, let us say the same company they operate here and in Germany and assume the tax is at a 48-percent rate in Germany. So I understand they pay $480,000 on a million dollars profit in Germany.

Is that correct?

Mr. MEANY. I do not know what they pay in Germany.

Senator PACKWOOD. Well, assuming it is a 48-percent tax rate, that is what they pay there. And they pay a 48-percent tax rate on the million dollars they make here.

Now, it is your position that they should not be able to credit any of what they have paid on the taxes in Germany against the total tax liability; that they should pay a total tax on the entire $2 million in this country?

Mr. MEANY. As a credit?

Senator PACKWOOD. YES.

In other words, what you are saying is if they choose to operate in Germany, they have the same total profit as when they operate here, but if they split it between the United States and Germany they should actually have to pay more taxes, more total taxes than if they operated here alone.

Mr. MEANY. Our position is that they should operate just the same as any other domestic company.

Senator PACKWOOD. Any domestic what?

Mr. MEANY. Any domestic company so far as taxes.

Senator PACKWOOD. So they should not have to pay any more taxes than they would pay if they were a domestic company.

Mr. MEANY. No, no, no.

Senator PACKWOOD. Oh, they should pay more.

Mr. MEANY. They should pay more.

Senator PACKWOOD. Why?

Mr. MEANY. Why should they not pay taxes on the profit they make overseas?

Senator PACKWOOD. Well, they do pay taxes on the profit they make

overseas.

Mr. MEANY. To us.

Senator PACKWOOD. Well, you want them to pay

Mr. MEANY. I want them to pay it to us.

Senator PACKWOOD. And to the foreign country.

Mr. MEANY. I do not care whether they pay the foreign country or not. Let them pay it to us.

Senator PACKWOOD. In other words, they should pay the full amount to us and then pay the foreign country, if they choose to operate overseas, that is the way they should be taxed?

Mr. MEANY. Then they would most likely come home where they belong, and then we would have the jobs here." Senator PACKWOOD. All right.

I have no other questions, Mr. Chairman.
The CHAIRMAN. Senator Byrd?

Senator BYRD. Thank you, Mr. Chairman..

Mr. Meany, I was most interested in your forthright appraisal of détente and your view of the Russian leadership. I do not express it in as colorful language as you but I am in thorough agreement with what you said in that regard. I happen to feel that President Nixon provided a service in going to Peking and to Moscow and I like to see the dialog between the leaders of our great nations of the world. But when it comes to agreements the way I analyze these agreements that were made in 1972-and there were three of them with Russia-the United States came out second best in every one of those agreements, the wheat deal subsidized by the taxpayers to the tune of $300 million, the SALT agreements, and the Russian debt.

Mr. MEANY. Debt?

Senator BYRD. The debt that Russia owes the United States $2,600,000,000, and here is the way we settle it: $48 million unconditional, $722 million conditioned on Russia getting the most favored nation treatment and long-term credits from the American taxpayers. Now, if that is a good deal

Mr. MEANY. You know, Senator, I do not want to interrupt, but one of the agreements they signed when they had this scenario here at the White House, you know, when Brezhnev arrived and he got out of the helicopter, and 1 hour later they were signing and then they had one at 4 o'clock, all with the proper press coverage and so on and so forth, one of the deals they signed was on farm exports and agricultural products, and part of the deal was that we were to get from the Soviets information as to their need for these products, in other words, their production. They refused completely to give us that information. So they have already welched on that deal, and that deal is not a year old.

But, of course, this is par for the course. They welch on their deals and have over the years. They do not keep agreements, and some of these American corporations are going to wake up some one of these days and find out that they are dealing with a dictatorial monolithic government.

Senator BYRD. We are dealing with a dictatorship. The Russian people, I am convinced, are just as peace loving as are the American people, but they have no way to express themselves.

Mr. MEANY. No question about it.

Senator BYRD. The decisions are made by a few people in the Kremlin, which is an entirely different situation than in the United States. And consider the contrast in the standard of living.

I sat next to Comrade Shushkov, the trade commissioner, when he was over here recently, and I asked him how many automobiles the Russians have per capita. He told me they have 1 automobile for

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