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has repeatedly pointed out, in connection with this section of the act, that we have a positive genius for bewildering and antagonizing our foreign friends. As one writer put it, “The civilized world often must suspect that we think with our feet and walk on our heads."
We submit that the facts prove that the imposition upon American business, industry and agriculture, and American consumers of the restrictions contained in section 104 of the Defense Production Act, and the renewal of section 104 of the Defense Production Act, is harmful to our own economic, moral and political well-being.
I urge that section 104 of the Defense Production Act be not renewed.
Now, I would like to address myself to answering some of the questions addressed to previous witnesses, so I may answer questions which I believe may be in your mind.
Mr. Brown. Does any member desire to interrogate the witness at this point?
Mr. FROMER. I would like to answer this, Mr. Congressman, because we have not had an opportunity ever before to be heard on this issue, and we are, as I say, the only cheese importers association in the country. That is a Nation-wide association and we would like to have an opportunity to set forth some of the argument that we have prepared.
Mr. McDonough. Mr. Chairman.
Mr. Patman. He wants to answer, as I understand it, some of these statements that have been made which he els he should answer now.
Mr. FROMER. That is right. I am directing my statement at this time to interrogatories of previous witnesses.
Mr. BROWN. Go ahead.
Mr. McDonough. It is understood, however, that you are not a cheese producer. You do not produce anything. You are just an importer.
Mr. FROMER. That is correct.
Mr. FROMER. Our association comprises mainly importers of cheese. However, many of our members also produce cheese, and there is an overlapping; as Mr. Gaumnitz stated, in his organization there are producers of cheese and importers of cheese. In our association, we have firms who import cheese, but are also producers of cheese in this country.
Mr. Hull. Would you give the names of the producers of cheese? Mr. FROMER. I will submit Mr. HULL. I want to find out what is back of this organization. Mr. FROMER. We have in our organization companies like Otto Roth & Co., Hoffman Co., Borden Cheese Co., and many others. I will submit a roster of our membership from which you can recognize many of the names of producers of cheese, such as Frank Reiser & Co.-these are just names that come to mind. But they are also importers of cheese and are members of our organization.
Mr. McDONOUGH. And they are opposed to section 104?
Mr. FROMER. When you say "they are opposed”—when we say an organization is opposed, it means the majority is opposed. It might be that some members within the organization are personally in favor
of a particular measure. I do not doubt, for example, that some members in the National Cheese Institute, or the Milk Producers Federation, or the Butter Institute, may be against section 104, but the organization as a whole is opposed. The same as when Congress adopts a particular measure, the fact that it is adopted does not mean that the whole of Congress is for the particular measure.
Mr. McDonough. Well, are we to understand that the majority of your constituents, that you are representing, and whose views you are expressing today, agree with what you are telling the committee and are opposed to section 104?
Mr. FROMER. Definitely so.
Mr. McDonough. What would you say that majority is? How many do you have and bow many feel that way?
Mr. FROMER. I would say we would be a majority of about 90 percent in a membership exceeding a hundred.
Mr. McDONOUGH. Ninety percent of a membership exceeding a hundred?
Mr. FROMER. That is correct.
Mr. Talle. Mr. Chairman, just one word about the membership. Are any of your members producers of cheese abroad?
Mr. FROMER. No.
Mr. FROMER. As I stated, they are importers of cheese, primarily, but some of them are also producers of cheese here. And some of them represent foreign producers of cheese in the sense that they sell the product that they import from abroad.
Mr. TALLE. But those of your members who do produce cheese are producers in this country; is that right?
Mr. FROMER. That is right.
Now, first I would like to direct the attention of this committee to some of the questions and answers that preceded me. For example, with regard to blue cheese. A great deal has been said about blue cheese. Normally we import about 3 to 5 million pounds of blue cheese and that represents about 6 percent of total imports, which you can observe from this chart in 1952 were 52 million pounds.
Mr. Swain and Mr. Gaumnitz have a petition pending before the Tariff Commission, on which there was a hearing last month, and on which a report bas or will be made to the President within the month. Their petition is based upon all of the facts presented here, and requests an import quota limited to 20 percent of domestic production.
The particular issue is being handled in the proper manner, by hearings, before a Tariff Commission that can delve into the matter on its merits. That is where it belongs, because it is a particular cheese, and there is no reason why all cheese imports should be penalized by reason of any alleged argument that may or may not pertain to blue cheese.
If there is any difficulty with regard to the domestic industry on blue cheese, there is adequate provision in the law-and this demonstrates it-to either increase the duty from the existing 15 percent ad valorem to 37percent ad valorem, or by imposing these quotas.
The Defense Production Act is not the way to do it.
Now, in answer to the question, do we export cheese to Denmark: Our trade with Denmark, in agriculture, is $25 million consisting of tobacco, cotton, oil seeds, vegetable oils, grain preparations, and other agricultural products, as compared to imports of $6,900,000, or less than 25 percent of the exports.
Our total trade with Denmark amounts to exports of $54 million, compared to imports of $12,277,000.
With regard to the price of blue cheese, you heard the statement that the imported blue cheese is inferior to the domestic blue cheese. I would like to introduce into the record with regard to price, the Journal of Commerce of New York City, May 9, which reports prices of all types of cheese on the wholesale market in New York, and I indicate to you that blue cheese is quoted at 53 to 56 cents per pound domestic, and imported at 58 to 59 cents per pound.
So that pricewise, and qualitywise, by their own statement, they have nothing to fear as regards imported blue cheese.
I would like to submit this for the record. Mr. BROWN. That may be included in the record at this point. (The Journal of Commerce clipping is as follows:)
CHEESE.- Receipts (May 8), 18,951 pounds. Fresh American cheese markets firmer under a broadening demand and more confident holding. Cured goods held firmly. Domestic Swiss lately easier. Most imported varieties in short remajnjng supply in wholesale channels.
Mr. FROMER. I would also like to point out, in this connection, that whereas the price of Cheddar cheese has remained more or less the same, since import controls were imposed, the price of blue cheese and other foreign types of cheese has gone up enormously. The inflation on these things is terrific.
For example, in August, when import controls were imposed, the price quoted, in this same source, for Swiss cheese was from 45 to 49 cents per pound. The price quoted today is 61 to 65 cents a pound,
or an increase of about 16 cents a pound. Whereas Cheddar cheese, which is made from the same milk, is still sold for 41 to 43 cents a pound. In fact, Mr. Gaumnitz said the market is lower today than it was frozen at.
In other words, the consumer is being made to pay for these controls by the diversion into foreign types, of our milk, so that the producer can benefit financially by such diversion at the expense, I may say, of our foreign exports.
I would also like to place in the record the publication, The Cheese Reporter, and this is the one of past Friday, May 9, 1952. This publication indicates the price paid to farmers for milk going into various uses. The farmers received 23 cents for milk used in making American cheese, during March, and the average price paid farmers for milk used in making miscellaneous cheese, for March, was $4. In other words, they were able to pay 10 cents a hundredweight more, and make more foreign-type cheese, than Cheddar cheese. Also in the same period, a comparison of production indicates that the production of Cheddar cheese went down from 65 million to 59 million pounds during the month of March, or a drop of about 10 percent, whereas the foreign types all increased in production-Swiss cheese about 3 percent, Italian cheese 4 percent, blue mold cheese, an even larger percentage.
With regard to this crying towel of the industry being destroyed, in this same publication, right along side, indicated by the headline “Organize New York-Italian Association, formation of the new association is the result of a great increase in the volume of Italian cheese of all types in New York State."
In that connection, I would like to point out to you that the production of Italian-type cheese, last year, is the highest on record, with the exception of, I believe it was the year 1945, when we got no imports in at all, and when, for many other reasons, it was more advantageous under price control to make Italian types than it was to make Cheddar, which incidentally is also the reason why we had a tremendous increase in blue mold cheese during the war, and then, thereafter, a steady decrease, even though we didn't import a single pound of cheese.
For example, in 1946, we produced 12 million pounds of blue mold cheese. In 1947, we did not import any blue mold cheese, but they dropped their production 2 million pounds.
That was purely an OPA price situation of forcing the consumer to take something that they did not necessarily want because it was more advantageous to make that than it was to make other kinds of cheese.
Now, with regard to economic aid-and considerable has been said on that subject, I would like to take a piece from the record of the Senate hearing, wherein Mr. Kline, of the American Farm Bureau Federation, submitted certain statistics concerning ECA aid. I quote from page 676 of that record:
Volume of United States agricultural exports of commodities, within section 104, in relation to world trade and United States economic aid: Cheese trade in 1950, total United States exports, pounds, 47,490,000. Total economic administration authorization for foreign countries to purchase cheese, 830,000 pounds.
Percentage, ECA financed procurement is of the total United States exports, 2 percent; world exports, principal exporting countries, 773,000,000 pounds.
ECA financing shipments from United States and other countries, 1,250,000 pounds. Percentage ECA financed cheese trade is of the total world percentage, 0.16 percent.
Considerable has been said about the devaluation. Devaluation took place in 1949, and this was also an issue, incidentally, in the blue-mold hearings before the Tariff Commission, and as pointed out by one of the Commissioners, the advantage gained by devaluation has long since been largely dissipated, because they, in turn, have to pay more money to get what they buy, and I recall, in the last day or two, a study which appeared in the press, exactly on that point, and I may say parenthetically that what is true with regard to de. valuation, and its effect upon blue-mold cheese, would be identical with regard to everything we import, from any country.
Mr. TALLE. What country were you referring to in connection with 1949?
Mr. FROMER. The countries that devalued in 1949—I think it was generally-were England, Italy, Denmark, France, and Holland, I think it was general, in about September of 1949.
Mr. Talle. But there have been a good many devaluations since then.
Mr. FROMER. Not affecting the cheese sources of supply. Not in the countries from which we import cheese.
Mr. Talle. I am referring to depreciation of their currencies. Is that what you are referring to?
Mr. FROMER. I am referring to the devaluation, when they announced a policy of devaluation. With regard to depreciation of currency, I should imagine we could say that our own currency has depreciated by inflated prices, and that you can buy less for a dollar today than you could buy years ago.
I am referring to rates of exchange, for example, between the American dollar, and the English pound, or the Italian lira.
I would also like to direct attention to the argument with regard to decreases in the dairy herd, and draw your attention to the fact that these decreases in dairy herds took place during the periods when we had no imports, so that they took place regardless of imports, and were not affected by them, and, in spite of the decreases, we have had an ample milk supply and dairy-production supply.
Now if we do not have the cows to produce the milk we need, if that is the argument, why keep the imports out? To become completely self-sufficient? The same argument would apply to every product we produce and the same would apply to the countries to which we export. That is, if they took the same attitude, that they are to become self-sufficient, then they should build to the day when they would not have to import from us at all. I think, Congressman Talle, you referred to something about an advantage that some other countries may have over us, and I would like to indicate to you a statement of Secretary Brannan, which appeared in the press on April 20, 1952, wherein he stated:
We have an export advantage resulting from our large-scale production and relatively low costs. There are still lots of hungry people on the face of the earth who would buy, if they had the dollars to buy with.
Mr. Talle. I did not say that any particular country had any advantage. I was setting up a hypothetical situation that would