has been against legislation which would compel imported products derived from plant and animal life and intended for human consumption to meet the same sanitary standards that are imposed upon similar products from our own farms. We are now on the verge of another step through which the State Department is driving us into new international entanglements. It may take many years of unpleasant consequences to extricate ourselves.

THE INTERNATIONAL TRADE ORGANIZATION

The International Trade Organization is in the making. Its basis is a series of some 70 bilateral trade agreements which were executed this year in Geneva, Switzerland. These were followed by the signing of a general master trade agreement, signed by 23 nations. Thus there has been laid the foundation for the erection of a super world-state which will take away from the American people important sovereign rights. It will put us into a position whereby with certain other nations joining the International Trade Organization we will combine to oppress nations which do not join. From nations within the International Trade Organization we ourselves will be subjected to oppressive tactics if the actions of our Government should not be acceptable.

The Federation recognizes the importance of the world trade situation and the desirability of cooperating with other nations in matters of world trade. However, we do not believe that the proposed International Trade Organization is the proper solution of the problem. For the following reasons we are opposed to the United States joining the International Trade Organization:

1. The Charter would vest in an untried and untested international organization broad powers over international trade, which could be used to affect materially the general welfare of the Amercan farmers. There is no assurance that such an organization will operate effectively and fairly.

2. The charter contemplates the substantial reduction or elimination of tariffs and other import regulations, making no adequate provision for the fundamental differences that exist between nations in standards of production and living and in the availablity and cost of labor.

3. Although necessary sanitary regulations would be permitted under the charter, the Organization would have the power to decide whether such regulations were in fact necessary. Sanitary regulations which operated to interfere with the trade benefits of other member nations would be subject to review by an international organization-even though such sanitary regulations did not violate the specific provisions of the charter.

4. The charter would seriously impair present and future farm programs designed to assure to American farmers a fair return for their products and to relieve American agriculture from burdensome surpluses.

5. The charter would set up a system of antitrust and fair trade practice regulations on a world-wide basis without adequately defining and limiting the scope of such regulations.

6. A tariff committee which would be set up by the charter would have powers out of proportion to the powers of the whole conference. This committee would act for the Organization in proceedings under article 17 of the charter. The comImittee could require member nations to enter into and carry out negotiations directed to the reduction of tariffs, and could impose sanctions against any nation which it concluded had failed to do so within a reasonable time. This committee would not be elected but would consist of all members of the Organization that had signed the new general trade agreement. The committee would not be subject to supervision by the Organization and no appeal has been provided from its decisions.

7. The provisions of the charter relating to private investment capital do not provide adequate protection for such capital. Under the proposed charter, investments made by American citizens in foreign countries could be taken over not only for the benefit of the foreign country but also for the benefit of the citizens of that nation. Although payment of just compensation for the property would be required, such payment would be made in the currency of the foreign nation and no adequate provisions are made for withdrawing such payment from the foreign country.

8. The discrimination contemplated by the charter against nonmembers of the Organization contemplated may tend to engender further unfriendly feeling toward the United States.

9. The International Trade Organization by providing for tariff regulations through an international organization rather than through Congress would remove the American people still farther from representation in such matters. It is apparent that the administrators of the trade agreements and the sires of the International Trade Organization are driving this country nearer and nearer to a condition of free trade. It is also apparent that once the International Trade Organization is set up it will be most difficult for any one nation to withdraw from it. To do so would be to risk oppressive sanctions by all of the other nations that are members of the organization.

The conditions of the trade agreements program and the new relationships envisaged in the ITO will foster the dumping into this country of products from abroad and it will encourage seasonal imports from lands which have cheaper production costs.

For dairy farmers neither livable domestic prices nor foreign markets can be maintained unless there remains a reasonable protection against competitive products such as have been described.

We urge the Congress to save the domestic markets for domestic producers. If trade agreements are to be continued as a national policy, they should be bilateral in character and ratified by the United States Senate. Rights of citizens to appeal to the courts should be restored and no agricultural products should be imported unless they carry duties that will equalize differences in costs of production at home and broad, or at not less than the domestic wholesale selling prices.

MOTION OF EXECUTIVE COMMITTEE OF NATIONAL COOPERATIVE MILK PRODUCERS FEDERATION, DECEMBER 18, 1947

On motion of Mr. Moscrip, seconded by Mr. Moomaw, and unanimously carried, it was resolved that the Federation go on record as opposing the extension of the Trade Agreements Act. It was recommended that further extension of the act be opposed on the ground, among others, that the new General Agreement on Tariffs and Trade, recently negotiated at Geneva, Switzerland, goes so far beyond the question of tariffs and the original intent of the legislation as to justify the termination of the authority heretofore granted to the President to negotiate trade agreements.

1 Based on wholesale prices in the United States, average during 1930.

2 Based on average wholesale prices in the United States during April 1948.

3 On not more than 50,000,000 entered from November 1 to March 31 following of any year.

4 Not available.

5 But not less than 171⁄2 percent ad valorem.

6 On not more than 1,500,000 gallons in any calendar year.

7 On not more than 3,000,000 gallons in any calendar year.

The CHAIRMAN. Dr. Martin, please?

Doctor, make yourself comfortable and identify yourself to the reporter.

STATEMENT OF DR. ROBERT F. MARTIN, EXECUTIVE SECRETARY, VITRIFIED CHINA ASSOCIATION, WASHINGTON, D. C.

Dr. MARTIN. Mr. Chairman, I am Robert F. Martin, executive secretary of the Vitrified China Association, Inc., 312 Shoreham Building, Washington 5, D. C., and I am appearing to offer some comments on the testimony of Mr. Clayton before this committee, and also before the House subcommittee since he appeared there last, which left no opportunity for rebuttal.

Mr. Clayton is a private businessman from the international cotton. brokerage business-the greater the trade, whether it be for peace or war, the greater the brokerage.

Senator LUCAS. What do you mean by that?

Dr. MARTIN. I mean if you are in the brokerage business the larger the volume of trade, since your return is keyed to the volume of trade, so the larger your return.

Senator LUCAS. Is that a reflection on Mr. Clayton?

Dr. MARTIN. No, sir. I am just pointing out the fact he comes from a business that profits from an increase in trade regardless of the purposes or reason for the trade.

Senator LUCAS. Are you indirectly saying that that is the reason Mr. Clayton is for those treaties.

Dr. MARTIN. Oh, no.

Senator LUCAS. Go ahead.

Senator BUTLER. You are simply stating what you think is a fact? Dr. MARTIN. That is correct.

Senator GEORGE. Is not Mr. Clayton a merchant? Is not the firm a cotton merchant?

Dr. MARTIN. That was my idea; Anderson & Clayton were cotton brokers or factors.

Senator GEORGE. Nothing but brokers?

Dr. MARTIN. I think he has some cotton interests if I recall correctly, in Brazil; if I remember correctly he went down to Brazil and started some cotton plantations down there and brought in some Japanese labor to run them to compete with the American cotton growers.

Senator GEORGE. You got that out of some magazine, I presume. Dr. MARTIN. I will check that and submit the confirmed statement with all the sources to you. I have seen that in reputable sources. Senator GEORGE. I would most respectfully ask you to check it and see if the Anderson & Clayton Co. are not really the greatest cotton merchants in the world.

Dr. MARTIN. I would accept that. I would say cotton factors or merchants. I think the same principle applies, that the larger the volume of business the greater is their business.

Senator LUCAS. I would say the greater the volume of business might indicate the larger the loss if they were not good merchants. Dr. MARTIN. They have been very good merchants. I am an admirer of their merchandising ability, sir.

The CHAIRMAN. Those of us who know Mr. Clayton would not for a moment impute any personal motive of gain in his position. Dr. MARTIN. Oh, no, sir.

The CHAIRMAN. As far as this matter is concerned.

Dr. MARTIN. I am simply introducing this factor at the moment because all the way through in his testimony in the House each time Mr. Clayton referred to the testimony of some other witness, said "Now, remember, he is from a certain industry, and remember, he has a certain position," and so forth. So I think it is only fair to point out that Mr. Clayton also has some business interests.

Senator GEORGE. That is very true. He has a business that requires exports, if it is to be a large-volume business. He must have exports. He must have trade. I do not think that is any reflection on him or his firm.

Dr. MARTIN. I will submit some references that I have on this operation in Brazil if I can locate them quickly.

(The reference is as follows:)

CURRENT BIOGRAPHY (1944 EDITION, P. 96)

*

*

Clayton, William L. (ockhart): * * his accomplishments as a tremendously successful cotton broker * * before the day of the Hoover Farm Board, which attempted to peg falling cotton prices, his favorite hate was the tariff * * * he is a free trader who opposes "meddling" with the economic machine in any way * * * in the meanwhile foreign production, encouraged

by the American cotton policy, has nearly doubled. Clayton himself has turned to South America, "where he taught the Brazilians to grow more cotton and gin it better." His firm also expanded its operations in Argentina and Paraguay, Clayton explaining in his testimony before the Senate Committee on Agriculture in February and March 1936 that this expansion was necessary to do business from Germany, since exchange conditions hampered it from carrying on trade from the United States. * * "The Clayton interests," according to PM, "contributed to an agricultural labor service in Arizona which functioned in an office adjoining the United States Employment Office and was found to have used the Government frank in circulating handbills promising farmers and farm workers prosperity in the Arizona cotton fields." Clayton was found in the ranks of the Liberty League, to which he contributed $7,500 from 1933 to 1935.

*

Mr. Clayton is a private businessman, but represented the State Department when he appeared before this committee and the subcommittee of the House; he was on the State Department staff which negotiated the recent agreements, and is now an official private adviser of the Secretary of State. That is my only reason for mentioning him; my concern is with the official testimony.

In regard to the accounting for 14 years of delegated congressional power, it was expected that he would present an accounting of the State Department's stewardship of the extraordinary powers delegated by the President to it for 14 years under powers delegated in turn to him by Congress in section 350 (a) of the Tariff Act of 1930. In fact, since he has so frequently cited that act itself as the cause of a major portion of the world's economic ills, it was expected that Mr. Clayton would come to grips with what he says is his basic problem and recommend its repeal or some further crippling amendment of it.

Instead, he came into the inquiry demanding that no substantive change whatsoever be made in the existing amendment of section 350 of the act.

Mr. Clayton did not even bother to tell either this committee or the House subcommittee how much of its delegated and unreviewable powers to reduce duties the State Department, acting for the President, had already used up in the agreements already made. It fell to the lot

of unofficial witnesses to introduce official information on this score which showed that under the agreements the American tariff had been cut or bound on 98 percent of our dutiable imports from the agreement countries, and on 88 percent of our dutiable imports from all countries combined, agreement and nonagreement, including Russia.

This involved a free gift extension of reductions or bindings on -53 percent of our imports from countries with which we made no agreement at all.

In addition, of the other two-thirds of imports, which come in duty-free, 91 percent were bound on the free list. If any consideration was given to the probable effects on American industry and employment, and some legally possible reductions were not made on this account, there can be very little in the way of concessions left for trading purposes under an extension of the authority. The task of the Tariff Commission in the near future under the provision of H. R. 6556 would hence be very light.

What concessions did we receive in return? There are no tabulations comparable to the above for foreign countries with which we made agreements. At the House inquiry, the following was offered by an economist introduced by the State Department; and I quote:

Mr. GEARHART. Do you think that our program has been successful in really eliminating barriers to trade?

Dr. NORTHRUP. No, sir; I do not, but I think it is the only thing we have to continue to hope to make it successful. There are so many other barriers.

This from an advocate of unchanged extension after 14 years of complete authority.

What would be done under extended authority?

Now, what did Mr. Clayton say the State Department intended to do with the extended authority, if granted?

Aside from the claim that agreements would be made with some ERP nations not heretofore considered worthy of inclusion in our program during the past 14 years, and which account for under 5 percent of our trade, and have already received reductions free on over half our trade with them, Mr. Clayton volunteered no information. Under cross examination in the House, however, he mentioned a plan to pervert the authority and use it to bind the United States to principles anticipating the ITO, which the State Department is apparently trying to avoid bringing before the Congress. He said:

*

One thing we have in mind, not only for the other agreements but for some new agreements, is to bring them all into the multilateral agreement at Geneva *. * we ought to try to get into one multilateral agreement as we did at Habana into a charter, and we ought to get all the countries that we can in that one multilateral agreement-with not only tariff reductions but the general conditions and statements and commitments as regards policies and principles in international trade.

Apparently from this statement, brought out only by cross examination, it is the plan of the State Department to use the trade agreements authority to obtain a world-wide agreement including the provisions of the proposed International Trade Organization, which it has not yet brought before the Congress for ratification. This would in effect institute the ITO without reference to Congress.

Mr. Clayton was on the horns of a series of dilemmas when considering the House proposal to delegate power to the Tariff Commis