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cheese. Those types of foreign cheese are sold at a substantially higher price than the domestic product. In the case of Roquefort cheese, the difference is almost 20 or 50 cents a pound.
Mr. COLE. More or less classed as a luxury item?
Mr. ANDRESEN. That is correct. Now the Secretary of Agriculture could have used section 104, and picked out just one or two types of cheese. He picked out casein. I do not know who asked him to pick out casein, and put an import quota on casein, using the year 1950 as the base period.
He also established a base period for all other types of cheese, basing it on the average imports from 1948 to 1950. He could have selected just one type of cheese, or two types, or the types that were causing the most difficulty in our domestic economy.
Now, why he did not do that, I do not know, but in the statement that he filed with the Tariff Commission, he has dealt with blue cheese, and blue cheese alone, which has caused the headache in this country, because they have taken over 49 percent of our market.
Mr. Brown. Congressman Andresen, we are very glad to have your statement.
Mr. NICHOLSON. Mr. Chairman.
Mr. ANDRESEN. Casein is a form of dried milk-the buttons on your suit are made out of casein, a good many products are made out of casein.
I might say this: Casein from the Argentine is laid down here and sold wholesale at 18 cents a pound, whereas it costs 40 cents a pound to produce casein domestically.
Mr. Brown. Do you have any other questions, Mr. Nicholson?
Mr. ANDRESEN. May I have permission to revise my remarks, Mr. Chairman?
Mr. BROWN. You may do so. Thank you very much.
STATEMENT OF HON. JACOB K. JAVITS, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF NEW YORK
Mr. Javits. Mr. Chairman, I am obliged to the committee for permitting me to testify. The committee has always been very gracious to me. There have been a number of interests testifying before the committee on various products. I would like to have my testimony construed as being in the interests of city consumers.
As the chairman knows, I feel that what happens in the field of agriculture is of vital importance to city consumers. I do not think we have taken enough interest and I am trying hard to stimulate more interest.
I shall make my statement very brief.
The agricultural provisions of the Defense Production Act, contained in section 402 (d) (3) represent built-in inflation, due to the special preferences given to agriculture, and I believe, Mr. Chairman, that right now we have seen this section materially aggravate the consumer situation respecting the lowly potato.
It has to be noted that price controls could not be established on potatoes at a time when they could have done the most good through conserving supplies and preventing hoarding and inequitable distribution.
But the imposition of price control had to wait until such time as potatoes had reached more than a hundred percent of parity.
The price rise was so rapid, the price jumping from $1.39 a bushel to $2.75 in the period between October 15, 1951, and January 15, 1952, but price controls could not be imposed until the price had reached over 120 percent of parity.
Food represents the biggest item in every consumer's budgetsomething in the area of 25 percent or more--and with built-in inflation under the Defense Production Act in this item, real control over inflationary forces is made more difficult.
Mr. Chairman, I shall again offer, as I have before, the amendment to change the agricultural price section, to make it conform to the price support sections of the Agricultural Adjustment Act, rather than this built-in inflationary 100 percent of parity standard as contained in this act and which I have consistently opposed.
The people who come here and plead against imports are not afraid that the people of New York will be very poor if they have to pay whatever prices that the domestic industry demands. So I don't think the people of New York ought to be worried too much about being hungry as long as these folks are not particularly worried about how broke we are.
Mr. COLE. Mr. Javits, you do recognize the differentiation between the two principles, do you not? The support price is for one purpose, and the amendment providing for price control is for another purpose, completely and absolutely diametrically opposed and different, and for different reasons. Do you agree with that?
Mr. Javits. I recognize the difference and I disagree with it. I believe that price control should be price control for everything including agricultural products, under the same standard, and that the only thing that the law should do is to protect the United States against losing too much money on the support price, under another law; therefore my amendment is completely consistent with my philosophy as I see it in the interest of consumers.
Mr. Cole. My point is, I agree with you that they should be under the same standard. Definitely, I agree with you that agricultural products should be under the same price-control standards as every other product, very definitely. But I am saying to you that if you use the standard of price support, you are not using the same standard.
Mr. Javits. Would the gentleman then agree with me that the whole of section 402 (d) (3) should be excised. If so I will agree with you all the way.
Mr. COLE. I agree with you that it should if the OPS would administratively carry out their duties and responsibilities in connection with price control. In other words, price stabilization. I believe in price stabilization, under this present condition.
Mr. Javits. I think the gentleman and I will be tied rightly in a common bond this next November to get that done.
Mr. Brown. Does the gentleman agree with me that full production is our best weapon against inflation?
Mr. Javits. It is our best weapon against inflation, yes, sir, provided that we have some machinery to take care of the inequalities and the rushing ahead of one price and lagging behind of another, or production, which I think we need in the way of price control machinery, and which is the reason I favor the extension of this act.
Mr. DOLLINGER. And provided the consumer can take advantage of the full production.
Mr. Javits. Well, if I may, Mr. Dollinger-I welcome very much your comment because I think you live with the same problems that I do.
Mr. DOLLINGER. That is right.
Mr. Javits. It seems to me when I say that I do, that is the rushing ahead of production in one field, and the lagging behind of production in another, so that the consumer cannot take advantage of it.
Mr. DoLLINGER. I agree with you. The consumer always gets struck in the long run. There is nobody here to look after his interests.
Mr. Javits. Well, I think the whole purpose of my testimony is to take something of a position of balancing the scale. I think this committee has heard so much testimony from producers of one thing or another who feel that the whole world concentrates on their particular item, and unless their particular item, no matter how small, even if it is clothespins, is adequately taken care of, the whole economy will collapse. Therefore I think it is important for some of us to come in here and speak from the point of view of a wage and salary earner.
Mr. Chairman, I will just take a few more minutes. I believe that the Defense Production Act should be extended for at least a year, that it should be tightened up by a change of the agricultural price provisions to remove this built-in inflation, by making the support price for agricultural commodities the price at which price controls may be established, and on the general issue, Mr. Chairman, I am opposed-and I believe very much in the consumers' interest to the so-called Herlong and Capehart amendments, as well as to the cheese, fats, and oils amendment which my colleague from Minnesota so eloquently testified to a minute ago, and I believe rent control should be tightened for the country, though in New York State I think we do modestly well. We certainly do, I think, much better than could under Federal rent control.
But other areas of the country are just as important to those of us who live in a city and State which sells so much. It is estimated that New York City alone sells $20 billion of products a year to the rest of the country. And when money goes out in exorbitant rents, people just do not have that money to buy the products of the city and State of New York.
Mr. Chairman, we have not yet reached the peak of defense mobilization and our top economists predict that with some breathing spells, inflation is still ahead. We must, therefore, keep intact our antiinflation machinery contained in the Defense Production Act.
Would it be prudent to disband the Army and Navy in times of peace or to dismiss the local firemen and sell the fire-fighting equipment? And so it would not be prudent to do away with this act.
I have two other comments. One is on this so-called Ramsey amendment with respect to imports containing materials under allocation or control.
I believe that that amendment would be extremely bad for con
I think it would very unfairly cut the imports into the country from nations to whom we sell twice as much in exports as we get in imports, notably France, the United Kingdom, and Western Germany, and I believe the main fallacy is demonstrated by this one very brief example:
We are great manufacturers of automobiles and we consider that a necessity.
In France, the United Kingdom and West German, an automobile is considered a luxury. Enormous amounts of strategic materials go into automobiles. Now naturally we have many commodities under allocation, which in those countries, because they are willing such small amounts of those materials as they have to other products, not automobiles, would be available to be part of their exports, and yet, by this kind of broadsword amendment which is being discussed in terms of the Ramsey amendment, their imports to the United States would be excluded, despite the fact that the social basis upon which the allocation rests, in our country, with respect to automobiles, is completely as different as night and day, from some of the products they send over here.
I think this would be as cruel an amendment to consumers that the committee could consider and I hope the committee rejects it.
Just one last point, Mr. Chairman. I am the author of a bill to create a joint committee on consumers, in the Congress, which I think is vitally necessary to do just what Mr. Dollinger says, and what I feel, that there unfortunately is very little mobilized interest around here to protect consumers. My resolution is Concurrent Resolution 190, and Mr. Chairman, I propose to seek to amend the Defense Production Act, in section 712 (a) to substitute for the Joint Committee on Defense Production, a joint committee on consumers. Thank you very much.
Mr. BROWN. We are delighted to have your testimony.
Mr. Javits. May I have permission to include some tables, Mr. Chairman? I have a rather interesting digest of this export and import question, and also a newspaper article with respect to the predictions of certain top economists concerning inflation.
Mr. BROWN. That may be done.
(The tables and newspaper article referred to are as follows:) MEMORANDUM ON H. R. 6843 To EstaBLISH IMPORT Quotas ON PRODUCTS
CONTAINING MATERIALS WHICH ARE SUBJECT TO DOMESTIC PRIORITIES OR ALLOCATIONS
ILLUSTRATION NO. 1--THE UNITED KINGDOM Consider the impact of these restrictions on the United Kingdom. Last year the United Kingdom sold $467,000,000 worth of its products to the United States.
On the basis of last year's import pattern, application of the proposed restrictions would have reduced United Kingdom sales in the United States in the general magnitude of $140,000,000. This would have meant, for example, that dollar earnings from such items as machinery would have been reduced from $20,000,000 to $8,000,000; leather goods, froin $7,000,000 to $1,000,000; automobiles, from $37,000,000 to $9,000,000, and pottery from $1,000,000 to $1,500,000.
Such restrictions would, of course, have reduced the supply of goods available to the American consumer. They would have done basic harm to the economy of the United Kingdom, which in turn would have tended to retard United States export industries and other supporting industries, as well as agriculture. The serious nature of the danger to the United Kingdom becomes more clear when related to the fact that whereas United Kingdom exports to the United States in
1951 were $467,000,000, its imports of American goods totaled some $900,000,000. Thus, even without any new restrictions, the United Kingdom's trade deficit with the United States amounted to more than $433,000,000.
United Kingdom imports from the United States included wheat ($89 million), tobacco ($147 million), cotton ($100 million), and lard ($47 million), such agricultural products amounting to $383,000,000. The United Kingdom's imports also included machinery ($76 million), petroleum products ($77 million), and a wide variety of other commodities totaling $517,000,000.
ILLUSTRATION NO. 2--FRANCE United States imports from France last year totaled $229,000,000. These imports included nearly $80,000,000 worth of steel products, some $57,000,000 worth of chemicals, machinery, and leather products, making a total of $137,000,000 worth of goods generally subject to the restrictions proposed in H. R. 6843. During the entire 3-year period 1947–49, however, total French exports to the United States of these categories of goods were less than $10,000,000. The average annual French exports to the United States during the base period were less than $4,000,000. Applying the provisions of H. R. 6843 to these facts, the restrictions would constitute a virtual embargo on imports of these products from France.
ILLUSTRATION NO. 3-GERMANY In 1951 we imported $229,000,000 worth of goods from Germany. Of the total about $118,000,000 would have been affected by H. R. 6843, including such goods as steel mill products in the amount of $86,000,000, machinery, $14,000,000,scientific instruments $3,000,000, advanced iron and steel manufactures $6,000,000, and pottery and glassware in the amount of $9,000,000.
In the same year the United States sold $519,000,000 worth of goods to Germany, the largest categories of which were tobacco ($28 million), coal ($57 million), cotton ($112 million), and wheat ($145 million). Notwithstanding a greater need for dollars in the face of its defense objectives, Germany had a trade deficit with the United States in 1951 of nearly $300,000,000.
Since Germany's economic efforts during the period 1947-49 were primarily devoted to postwar reconstruction, it exports to world markets were insignificant. As in the case of France, the restrictions provided in H. R. 6843 would have constituted a virtual embargo on the principal imports from Germany.
ILLUSTRATION NO. 4- BELGIUM United States imports from Belgium in 1951 amounted to $215,000,000. Of this total about $89,000,000 would have been subject to the restrictions proposed by H. R. 6843, consisting of such items as iron and steel products in the amount of $77,000,000, glass products in the amount of $7,000,000 and firearms and machinery in the amount of $5,000,000.
The United States exported $367,000,000 worth of goods in 1951 to Belgium. These exports included over $190,000,000 worth of wheat, tobacco, cotton, oil seeds, and other agricultural commodities and nearly $177,000,000 worth of industrial and manufactured products.
The restrictions of H. R. 6843 would have reduced Belgian exports to the United States by more than 40 percent last year.
ILLUSTRATION NO. 5- ITALY In 1951 we imported $140,000,000 worth of goods from Italy, of which some $36,000,000 consisted of machinery ($7 million), iron and steel products ($5 million), pottery ($4 million), and musical instruments ($6 million) which would have been subject to the restrictions of H. R. 6843.
United States exports to Italy in 1951 amounted to $452,000,000. Among the largest exports were cotton, wheat, coal, and machinery.
Under this bill its exports to the United States would have been reduced by some $30,000,000, increasing its trade deficit with the United States from $312,000,000 to $342,000,000. In view of Italy's extreme and chronic economic difficulties and of the impact of other recent United States trade restrictions on Italian exports (hatters' fur, fur-felt hats and hat bodies, almonds, and cheese), the prospective damage which new restrictions may inflict upon Italy's economy cannot be underestimated. In addition to their direct economic consequenees, new restrictions will tend to strengthen those vociferous minorities who charge