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. quote from page 676 of that record:

I

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 devaluation, 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

prevail in the event the whole world went for free trade. I was not saying that any particular country had an advantage.

Mr. FROMER. If the whole country was set up on the basis of free trade, I think we would come out the gainer, Congressman. I think we would come out that much stronger, and I think that is why the policy of this country is toward a greater interchange of trade with our allies.

Mr. TALLE. Oh, I agree, because of our knowledge, but on the other hand, we will have to face up to the kind of world we are in. Just look at the world and then give me the answer, will you?

Mr. FROMER. Yes; I look at the world and I think it is a lot better for us to have our allies produce products which they can sell to us, instead of us giving them to them because they cannot buy from us, inasmuch as they cannot earn our dollars.

A thing appeared in one of the columns just the other day. That one of our European friends had to possibly turn to Poland to buy coal, because they were unable to sell us their cheese, and I would like to quote. This columnist said:

Ordinarily these countries would have turned down the Polish requestand that was that if they wanted to buy Polish coal they had to sell Poland some strategically important materials—

and bought their coal from us, but after counting the dollars that they could earn by selling less cheese to the United States, and all the dollar aid they might receive in addition they found that they could not possibly afford to buy American coal.

And I would like to point out, with regard to the talk about restrictions in Denmark and these other countries, that the Department of State, I believe it was, issued a statement not too long ago, and listing the question of restrictions and pointed out that there are two types of restrictions.

One has to do with restrictions for currency purposes. And the other type of restriction would have to do with the protection of special domestic interests.

Now, the foreign countries from whom we take cheese

Mr. TALLE. If you will break that second one down, you will have a long array of items, I can assure you.

Mr. FROMER. But you would not have Denmark in there and you will not have Italy in there and you will not have Switzerland or France, and those are the countries who are our main sources of cheese supply.

Mr. TALLE. Well, you are speaking only of cheese and I talk about the world.

Mr. FROMER. No, I

Mr. TALLE. Not all of the world is friendly to us, you must remember.

Mr. FROMER. No, I am talking here in favor of removing restrictions against the importation of cheese.

Mr. TALLE. You were talking about free trade earlier and that is what I am talking about.

Mr. FROMER. Yes; and that affects free trade. And your question to one of the witnesses was whether Denmark imposes restrictions against our products, and I would like to point out to you that the only type of restrictions in effect in Denmark, or the other countries,

which are the sources of our cheese, are only for the purpose of conserving currency because they do not have enough United States dollars.

For example, they do not have enough United States dollars to buy as many autos as they would like to buy. Perhaps if we bought more of their cheese they might be able to buy more of our autos, tobacco, cotton, and other agricultural products, perhaps.

Now, Congressman Dollinger asked one of the witnesses as to the difference between Mr. Paul's testimony and Mr. Kline's testimony. Mr. Kline, as you recall, represented the American Farm Bureau Federation.

Congressman, in my opinion, the difference is that the former is representing special-interest legislation that is to protect a certain butter interest-while the latter, the American Farm Bureau Federation, expresses the interests of farmers as a whole and of agriculture and the Nation as a whole, and incidentally the National Farmers Union has also come out against this regulation.

A question was asked with reference to the price of Blue Cheese and I think that Mr. Swain said 40 cents was the price without the duty. I would like to correct that from actual knowledge. The price is 43 cents, plus a duty, plus a handling charge to the original importer.

With regard to the figures of 52 million pounds imported in 1942, even though we had import control I would like to point this out to you: The import controls became effective August 9, 1951.

Licenses were issued and then additional licenses were issued to be effective until June 30, 1952. Because of the pressing need and commitments that importers had made, they had used up most of their quota before the end of 1951, which accounts for the 52 million pounds imported in 1951.

Actually, the amount of imports authorized for the entire period was 39 million pounds and I believe that of that quantity there remained unused, by the beginning of this year, only slightly more than 10 million pounds, and assuming a reenactment of this statute and similar restrictions for the balance of 1952, the amount of imports would not total above 30 million pounds, and that is why this is so serious to these foreign countries. Not because of the difference of 56 million pounds in 1950 to 52 million in 1951, but because this year will see a drop of over 20 million pounds of cheese.

Mr. MCDONOUGH. What effect is it going to have on this country? You are expressing the effect it is going to have on other countries. What effect is it going to have on the economy of this country?

Mr. FROMER. I do not believe it is going to have any effect on the economy of this country if it is removed, for this reason: First of all, I would like to indicate to you that cheese imports have increased, in the past 20 years, from 492 million pounds to over 1,150 million. pounds. Per capita consumption has increased proportionately in the same period. Imports are away down here, 62 million in 1931. They are less than that at the present time.

Now, the imports of cheese have stimulated production in this country. We never produced Blue Mold cheese in this country prior to 1937. We never produced Gruyere cheese prior to recently.

We export more cheese than we import, and the proportion that is actually paid for is considerably larger than indicated." Mr. MCDONOUGH. Where do we export it to?

Mr. FROMER. I can supply you a list of the various countries. Mr. MCDONOUGH. I do not mean specifically. Generally to what countries?

Mr. FROMER. Generally, England, Greece, South Greece, South America, Mexico there is a long list of countries that have been purchasing our cheese. Some of it with the aid of our Government; yes.

Mr. MCDONOUGH. What percentage of that export is financed by the Government?

Mr. FROMER. I have indicated to you that 2 percent out of ECA if financed by the Government.

I would like to indicate the proportion the ratio of cheese import bears to production. In 1931 we imported 12 percent of our cheese production. Right now, in 1951 we are down to 4%1⁄2 percent of our production.

Now I say again, that there is a definite stimulative effect that imports have had, because we import primarily types of cheese that are foreign to this country. Our association is not interested particularly in Cheddar cheese, for example. But cheeses like the blue cheese, Swiss Gruyere cheese, and a long list of names that the stenographer will no doubt have a great deal of difficulty spelling, are the cheeses we are interested in, and in that connection I would like to comment about what Mr. Swain said, that his company started in 1935.

He had better check with his boss, Mr. Frederiksen, because Mr. Frederiksen testified 4 years ago, before the Federal Security Agency, and recently before the Tariff Commission, that he started in business in about 1936, started making some cheese in 1937, and in 1937, about a half million pounds of cheese was produced.

Contrast that to the fact that we had already been importing millions of pounds of cheese from Denmark at the time, and in 1937 were importing over 3,000,000 pounds of cheese, which is greater than the amount of cheese that we imported from Denmark at the time these restrictions were imposed.

Now, with regard to ceiling prices, I would like to point out that whereas the prices of these foreign types of cheeses have been enabled to move up, because of the regulation pertaining to products made from milk, that there is a ceiling price on imported products, so that the importer cannot make a larger margin, at the present time, than he made in the base period.

In other words, whatever his margin was in January of 1951, is what he can add to his net cost today. He cannot profit. He cannot take advantage of any short situation.

The same is not true with regard to the domestic situation, and evidently advantage has been taken of it as demonstrated in the substantially increased prices of domestic cheese.

A question was asked with regard to our sources of cheese, our principal sources. I have here tabulated, and will leave for the record, the countries and the quantity imported from various countries during 1951.

Italy is our principal source of supply. And we imported 14,993,000 pounds from Italy in 1951. New Zealand is second, Switzerland third, Denmark fourth, the Netherlands fifth, Argentina sixth. And I might say, with regard to Argentina, that that no doubt will fall considerably, because Argentina has no exportable cheese at the