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causes buyers to offer less ana sellers to accept less or because the imported article is offered at a lower price which domestic sellers eventually have to meet.
To a lesser extent, there is a similar result when a semidirectly competitive article is imported but the effect is particularly accentuated in the case of fats and oils because of the principle of interchangeability. For example, it can be shown that imports of soybean oil-a good, edible commodity-not only compete directly with, displace, and tend to drive down the price of domestically produced soybean oil and cottonseed oi! but also have an influence on the price and supply of such inedible fats and oils as tallow and fish oils because when soybean oil becomes plentiful in supply and cheap in price, it replaces fish oil in the paint and varnish trade which of course is an inedible use. The fish oil so displaced then becomes a possibility for use in the soap kettle where it would displace the inedible tallow and grease produced by the members of this association.
This chain of reaction should be cause for alarm among all domestic producers of such fats and oils as butter, lard, corn, soybeans, flax, peanuts, fish oil, and cottonseed and it explains why we feel that adequate protection should be always at hand. Certainly it is of great concern to the members of this association because neither they nor the Government have any control whatsoever over the fat-bearing materials which will result from the production of livestock in this country and which must be collected and processed promptly in order to avoid a health and sanitation problem of the first magnitude.
3. Equality.- We have no agricultural programs of any kind for our products and the modest legislative protection we were able to secure some years ago in the form of tariffs and excise taxes on imports has been slowly whittled away by our adversaries both in Government and out so that now we have almost nothing left. According to a recent comprehensive report by the Tariff Commission (October 1951), the average ad valorem equivalent of all tariffs and excise taxes on all imports for consumption (free and dutiable), has been reduced from an average of 10.6 percent before any trade agreements to only 5.4 percent on August 1, 1951, a decrease of 49 percent. This is after eliminating the influence of price changes due to currency devaluation, and other influences. In the case of dutiable commodities alone (which includes most fats and oils) the reduction has been from an average of 27.7 to 12.5 percent-a decrease of 55 percent.
With such a reduction in tariffs and/or excise taxes on imports other forms of protection to domestic industry, such as import control, seem to us to be imperative. At a time when the newly developed synthetic chemical and petroleum detergents are taking over an increasing share of the cleansing-material market which has historically up to this time required and consumed great quantities of domestically produced inedible animal fats, we need the continuance of such protection as we have not a reduction of it.
Careful study of the International Trade News Bulletin now issued monthly on behalf of the Contracting Parties to the General Agreement on Tariffs and Trade, Palais des Nations, Geneva, Switzerland, discloses the fact that in general, where foreign countries have reduced tariffs in order to get other concessions from the United States under the trade-agreements program and have made up Treasury deficits from grants, gifts, counterpart funds, excise, and other forms of taxes, etc., they have also developed a general program of import licenses, quotas, and exchange control as a protection to their home market. It is our view that section 104 of the pending act is in complete harmony with the procedure of foreign countries and properly carries out the mandate of section 8 of article I of our Constitution which provides that "Congress shall regulate trade with foreign countries.” It is certainly germain in this act, which regulates the domestic economy, to take note of the possible damage from excessive imports.
Congress has expressed its desire to protect domestic industry from injury or the threat of injury from imports of competitive materials in the escape provisions of the recently passed Trade Agreements Extension Act. We believe section 104 is in harmony with and in the nature of a supplement to that provision.
II. THE TALLOW PRICE CEILING SITUATION Inasmuch as we wish to discuss at some length the tallow ceiling price roll-back order issued by the Office of Price Stabilization on January 8 of this year, it would be beneficial we believe to set down a chronological summary of the related developments preceding the issuance of this order. The summary is as follows:
January 26, 1951: OPS issues general freeze order establishing individual ceiling prices at the highest level at which sales were made during the period December 18, 1950, to January 25, 1951. Most producers of tallow and grease had individual
lings of from 18 to 18.5 cents per pound; lard ceiling price under this order is proximately 18.5 cents per pound. Hide and skin prices frozen at highest lers price during November 1950 in OPS CPR 2. February 1951: Specific dollars and cents ceilings established by OPS for tonseed oil (2374 cents per pound, crude valley basis), soybean oil (2074 cents pound, crude f. o. b. Decatur basis), and corn cil (2442 cents per pound, crude, dwestern mill basis). Tallow and Grease Industry Advisory Committee apinted and called to Washington for consultation on February 28. Hide Indus: Advisory Committee appointed and called to Washington. March 1951: Uniform ceiling prices for all grades of tallow and grease announced
OPS March 8, effective March 12, established on basis 15 cents per pound ncy grade. This represented a roll-back of 3-3.5 cents per pound from GCPR ling price of most producers. Industry and members of Tallow and Grease visory Committee objected to the action but filed no formal protest believing s to be their contribution toward Government price stabilization efforts. Fish
Industry Advisory Committee appointed, met, and uniform ceiling price for s product set by OPS order in neighborhood of 16 to 17 cents per pound. iform dollars and cents ceilings generally at November 1950 levels established hides and skins. August 1951: OPS approves increase in ceiling price for beef and unofficially
it be known that hide and tallow ceiling prices would have to be rolled back ther to compensate for beef price ceiling increase. Requisite number members th Hide and Tallow Industry Committees wired Price Administrator DiSalle questing to be consulted before such action is taken; they were informed that such rollbacks were being considered at that time. November 1951: Hide Industry Advisory Committee called to OPS headarters at Washington, asked to approve rollback; voted unanimously against ch action. Tallow and Grease Industry Advisory Committee called to OPS headquarters Washington, informed that tallow ceiling prices were to be rolled back to 10% ats per pound, Fancy basis. Seven out of 9 members of the committee attend5 this meeting resigned en masse later in the day; the official membership of the mmittee was 14 at this time. Resigning members asserted they did not prose to come to Washington at their expense to rubber-stamp Government actions ich they said were apparently dictated by political expediency; all objected to e fact that the matters which they were supposed to consult with OPS on had en decided by the Government in advance and they said they were given no al opportunity to state their views regarding the proposed rollback. Price Administrator DiSalle appeared before Joint Senate-House Committee on -fense Production to give periodic reports concerning progress of price control erations. Was questioned extensively by Senator Capehart about the tallow ll-back plan and about the mass resignation of members of the Tallow and 'ease Committee; Senator Maybank introduced into the record approximately 0 telegrams received in protest to the tallow rollback plan. December 1951: Price Administrator DiSalle submitted lengthy memorandum Joint Senate-House Committee on Defense Production setting forth policy PS would follow in rolling back ceiling prices; used tallow as an example and scribed how the new rollback level had been arrived at; also told the committee at tallow had no cost of production. The latter statement provoked a storm protest from the independent tallow-producing industry. Recently Economic abilization Administrator Roger L. Putnam has admitted that his agency cognizes that tallow does have a cost of production. OPS issues order rolling back ceiling prices approximately 5 cents per pound on ttle hides and about 18 percent on calfskins. January 1952: Tallow roll-back order issued January 8, effective January 14. iling prices for all grades tallow and greases set at rate of 1042 cents per pound, incy basis. It is our earnest conviction that the order issued January 8 by the Office of ice Stabilization rolling back the ceiling prices of all grades of inedible tallow d grease to a level of 1042 cents per pound, Fancy basis, is discriminatory and fair for the following reasons: (a) Inedible tallow and grease prices move in the same general price pattern other domestically produced fats and oils; see the attached chart for confirmain of this. Therefore, price ceilings for inedible tallow and greases if established
any Government agency should be fairly related to price ceilings for such fats d oils.
(6) Inedible tallow and grease ceiling prices as set by the order of January 8 are not fairly related to present ceiling prices for other domestically produced fats and oils, nor as compared with the relationship between these commodities as recognized in the OPA ceilings of World War II, shown in the following tabulation;
OPA ceiling Present OPS price, June 1946 ceiling price
Cents per pound Cents per pound 12.8
(c) Inedible tallow and greases are the only items in the historically related fats and oils group which have been subjected to two successive price ceiling roll-backs; this is outright discrimination. Since the initial price freeze level of January 1951, the total roll-back in the case of tallow and greases has amounted to 8 cents per pound,
or approximately 45 percent of the initial GCPR ceiling price. (d) To the extent that the Office of Price Stabilization used the pre-Korea price of tallow as a base period in arriving at the 102 cents per pound level established under the order of January 8, we assert that there is no legal grounds for such basis because the Defense Production Act specifically prohibits the use of any abnormal periods in the determination of ceiling prices. The attached price chart clearly indicates that the pre-Korea price of tallow not only was abnormally low-in fact, the lowest it had been for the period 1941-51, but also was substantially lower than that of any other related domestically produced fat or oil.
We consider that the most equitable and expeditious way to remedy this situation would be to immediately and completely remove all of these items from any form of price limitation, and of course we include a recommendation that the other products of the industry--namely, hides, skins, and meat proteinsbe accorded similar treatment. However, if it be not the intention of Congress to consent to the withdrawal of such authority, then we shall insist that the extension legislation be phrased in such form as to preclude the price agency from singling out a lone fat or oil item such as ours and subjecting it to drastic pricing action without imposing similar treatment upon all other items in the same general commodity classification. This could be done, we believe, by including a short phrase at the appropriate place in the pricing provisions to read somewhat as follows: “Provided, That no ceiling price shall be established or maintained on any domestically produced fat or oil which does not reflect a fair price relationship to other customarily related fats and oils."
As we understand, due to the parity guaranty provisions of the pricing act the OPS probably cannot lower the ceilings much, if any, on the principal domestically produced fats and oils such as those to which frequent reference has been made in this statement-other than tallow and greases. If this is so, the members of this association feel their products are entitled to similar treatment and we therefore make the request that tallow and greases be included under the parity guaranty sections of the pricing legislation. Perhaps this could be taken care of by designating tallow and greases as agricultural commodities; we especially need a clarification of this point because we are being increasingly confronted with situations in Government whereby our products are claimed to be agricultural commodities when it comes to placing them under certain types of controls but when we need and seek relief we are informed that nothing can be done because our products are not defined as an agricultural commodity. Respectfully submitted.
NationAL RENDERERS ASSOCIATION,
Price comparisons, inedible tallow with other domestically produced fats and oils
(Cents per pound]
TOTE.- Present OPS ceiling price for inedible tallow No. 1 is 9.25 cents per pound which became effective 1. 14, 1952; inedible tallow and greases are the only fats and oils which have been subjected to a second -back from the initial ceiling prices imposed on this group of commodities by the Office
of Price Stabilizaa in January-February March of 1951. ource: Compiled from reports of the Bureau of Agricultural Economics, U. S. Department of Agricul. e and from daily issues of the New York Journal of Commerce and the Wall Street Journal.
The CHAIRMAN. The committee will now adjourn to meet tomorw at 10 o'clock. (Whereupon, at 4:15 p. m., the committee adjourned, to meet at 1 a. m., Thursday, May 22, 1952.) (NOTE.—The committee was unable to meet on Thursday, May 22, le to the fact that the House met at 10 a. m. on that day, and so e next meeting of the committee was called for 10 a. m., Friday, ay 23, 1952.)