In conclusion, in view of the above facts and considerations, the extension or reenactment of section 104, as presently contained in the Defense Production Act of 1950, as amended, is strongly recommended. In the absence of such reenactment it is quite likely that the production of milk and of the various dairy products in the United States will be reduced. In this connection and specifically in conjunction with the United States Tariff Commission consideration of the investigation of blue mold cheese previously mentioned, the United States Department of Agriculture filed a statement with the Tariff Commission. Under the hearing Suggested Action the following statement appears: Under section 7, authority is provided for the withdrawal or modification of a tariff concession, its suspension in whole or in part or the establishment of import quotas to the extent and for the time necessary to prevent or remedy injury to the domestic industry. Import quotas would, in our opinion, give the most definite assurance that imports would not result in serious injury to the domestic industry. Quota limitations on imports would thus permit domestic producers to plan their production of blue mold cheese on a basis of knowing the maximum quantities which could be imported and sold in competition with their supplies. Furthermore, quota limitations would make it impossible for foreign countries to negate the effect of a tariff increase by devaluation of their dollar exchange rates. The attention of the committee is directed to the fact that "import quotas" are recommended by the United States Department of Agriculture and, incidentally, at about the level now provided under section 104 regulations. The point is that the United States Department of Agriculture recognizes that quotas are the most logical form of relief under present circumstances and the relief recommended is similar to that now provided under section 104. Apparently, the only point raised by the Department is whether the relief should be under section 104 or under some other statute. The Department seemingly believes proper action is possible under other statutes. We believe proper action under other statutes is possible in theory but is unlikely in fact, unless the Congress expresses its intention in clear and unmistakable form. Mr. Chairman, I would like to submit the attached charts for the record. The CHAIRMAN. Without objection they will be made a part of the record at this point. (The charts above referred to are as follows:) Source: Compiled from reports of the U. S. Department of Agriculture, Bureau of Agricultural Economics. Cheese: Quantities manufactured in the United States, 1931 to date Source: Compiled from reports of the U. S. Department of Agriculture. 1 Other than Cuba and Philippine Republic. 777 77 777 77777 7 35 7 35 312 1712 312 1714 47 10 10 10 107 5 101010 25 312 35 25 5 35 77 25 5 5 312 1712 316 312 172 312 1712 1712 1712 34 25 15 25 2 Includes changes as formulated at Annecy, France, in 1949, mostly effective in 1950. * Includes changes as proposed in tentative agreements formulated at Torquay, England, in 1950-51. Source: Compiled from reports of the U. S. Department of Agriculture. Mr. GAUMNITZ. Now, Mr. Chairman, I have read the statement of Mr. Paul of this morning and also the statement of Mr. Fifer. I agree with the general contentions which those two gentlemen presented. Mr. Chairman, there can be little question that milk production is going to decline unless section 104 is retained. If no action is taken under any other statute, then probably the Government will be forced to buy a rather large quantity of dairy products under its price-support program. In other words, that only supports what was stated this morning by Mr. Paul, particularly, that those products would then be accumulated under a condition where, to all intents and purposes, the United States is underwriting world dairy product prices. The statements made with reference to other statutory authority we agree with also. It is generally contended that other authority exists under which proper protection might be afforded. At the same time it is argued that action under section 104 is contrary to certain provisions of the General Agreement on Tariffs and Trade. We are unable to understand how it can be argued that action under section 104 would violate the general provisions of the General Agreement on Tariffs and Trade, without the same type of violation resulting from action under any of the other statutes under present conditions. It has been brought out particularly that the reduction in import duties, in terms of dollars and cents, has amounted to about 50 percent-taking all dairy production as a group. There is some difference in the case of cheese, because the reductions have been 50 cents in terms of dollars and cents, because of an ad valorem difference. I want to touch very briefly on something which I think has not been touched upon by the other witnesses. A somewhat new element in international trade has recently become evident and should be given weight in considering section 104. Reference is made to the arbitrary and discriminatory export pricing arrangements of certain countries exporting to the United States. Examples of such arrangements, we can cite two or three. In summary I think it is increasingly evident that a clear statement of policy should be forthcoming from the Congress. It appears that the provisions of section 104 set forth such a policy and we believe that such section should be continued in effect at least for another 3-year period, or until international conditions become more settled. That completes my statement. I would like permission for Mr. Frigo, one of my colleagues, to make a short statement. The CHAIRMAN. We will now hear from the representative of Treasure Cave, Mr. Swain. STATEMENT OF WILLIAM E. SWAIN, ON BEHALF OF TREASURE CAVE Mr. SWAIN. Mr. Chairman and members of the House Banking and Currency Committee, I will try to be as brief as I can. Treasure Cave is a partnership of F. M. Frederiksen, managing partner, and his wife, Dorothy S. Frederiksen. It is located at Faribault, Minn.; and has operated continuously producing blue cheese since it began in 1935. It is the oldest of existing plants in the United States producing blue cheese-producing 10 to 15 percent of the domestic total of this type of cheese-which is its only product. The plant uses caves which have been dug in natural sandstone for curing, storing, and packing. The nature of the plant does not lend itself to the supplementary production of Cheddar or other types of cheese or dairy products. Treasury Cave, like other producers of specialty type cheeses, has been concerned about the accelerated rate of imports of foreign cheese and other products which are directly competitive with domestic production, and knows, first hand, the results of the impact of such imports. Since May of 1950 we have been faced with the problem of reducing or discontinuing production. During the summer of 1951 we were forced to sell over 50 percent of the milk from patrons at a loss. This milk went to a plant which used it to make Cheddar. At this very time the Commodity Credit Corporation was making purchases of Cheddar under the support program. Within a month after the issuance of Defense Food Order 3, Suborder 2, we again felt able to use all of our milk from patrons in anticipation. of increased demand. The passage of the Defense Production Act of 1950, as amendedwhich included section 104-and the issuance of the Defense Food Order 3, Suborder 2, did not materially reduce the amount of imported blue cheese available during the closing 5 months of 1951. The threat |