Means made the point that the proposal to limit imports of cheese was within the jurisdiction of his committee.

We would, therefore, seriously suggest that H. R. 6843 and H. R. 7432 be rejected by your committee as not pertinent to the Defense Production Act, and that the Speaker of the House be requested to reassign both these bills to the Committee on Ways and Means for proper consideration. In making this suggestion, we respectfully submit that the objectives of both bills is to regulate United States import trade by quota restrictions rather than to promote national defense or to regulate defense production.

We also object to these bills because there are adequate laws now in effect to accomplish any necessary protection of domestic industry against injurious foreign competition. Last year, the Eighty-second Congress amended the Reciprocal Trade Agreements Extension Act of 1951 by inserting a specific provision making it mandatory for the Tariff Commission to investigate every complaint filed by domestic producers who allege that competitive imports are threatening injury to their industry. This is popularly known as the escape clause procedure. Other statutes now in full force and effect to which domestic interests have recourse at any time they feel additional protection from imports is needed are: Section 22 of the Agricultural Adjustment Act, which permits the President to impose a special import fee or quota limitations, or both, on any imported agricultural commodity which tends to render ineffective or interferes with any domestic price support or storage program; and section 336 of the Tariff Act of 1930, which provides for an investigation of comparative costs of production of domestic articles and imported articles not covered by trade agreements with a view to an increase in the protective duty rate.

If the Congress is now to enact such measures as the proposed section 104 (b) in H. R. 7432, and H. R. 6843, there would be set up a conflicting and reckless procedure for the coddling of special pressure groups which would scrap the escape-clause procedure and other statutes which the Congress has already provided to meet legitimate situations.

As the members of this committee know, an orderly investigation on imports of blue-mold cheese was in progress by the Tariff Commission under the escape-clause procedure when section 104 leading to restrictive quotas on such imports was enacted.

Our organization strongly opposes the continuation of section 104 of the present act as proposed in the Hunter bill, H. R. 7432.

The Hunter bill goes even further to invade the present law relating to the escape clause and other statutes. It proposes a new section 164 (b) which would delegate blanket authority to the President to enforce controls over imports of any other commodity or product upon the recommendation of the Secretaries of Agriculture or Commerce. This is perhaps the most fantastic proposal in our entire history of tariffs and import regulations. The proposed new section 104 (b) contains no instructions as to what kind of investigation the Secretaries of Agriculture or Commerce must conduct, what they are supposed to look for, or what should be the basis of their recommendations. A comparison of this ill-conceived piece of proposed legislation with section 336 of the Tariff Act, section 7 of the Reciprocal Trade Agreements Act, or section 22 of the Agricultural Adjustment Act will at once disclose the shortcomings of the whole proposition. It may

be assumed that no Secretary of Agriculture or Secretary of Commerce would administer such a provision of law without a deep sense of responsibility to the national welfare, but the power would still be invested in these Cabinet officers to recommend an arbitrary curtailment of imports of any product whatsoever with no advance notice, no public hearings, and with no criterion to be followed.

The Ramsay bill, H. R. 6843, would set a definite quota on any imported article which contains certain raw materials that are in scarce supply in the United States. The underlying purpose of this proposal is clear.

It is based upon the plausible assumption that when certain raw materials are so scarce as to require allocation among domestic producers working on defense orders, imported products for civilian demand may be brought in freely and might take over the domestic markets. That could possibly happen in isolated cases if our country was on a full-scale war economy with our domestic producers entirely occupied with war orders, and foreign countries not in a similar situation. But that has not happened in the present situation because domestic producers have been able to turn out large quantities of defense items and still continue the production of a large volume of consumer goods. Moreover, the material shortages are fast clearing up and allocations for civilian production are being constantly increased and end-use restrictions are being removed or liberalized almost every day.

The Ramsay bill has several specific features to which we strongly object.

These are:

1. While the United States Tariff Commission would be required to report to the President within 60 days of the receipt of an application from any individual American producer who is "substantial", there appears to be no criterion provided to guide the Tariff Commission in the preparation of its reports. The Commission is merely directed to report the article or product upon which a limitation of imports has been requested, whether it contains any raw material which is under priority or allocation control, and whether a substantial portion of the American producers of that product have requested that imports be limited. No yardstick whatsoever is provided. There is no requirement that a showing be made that imports are increasing to an extent that the American producers requesting limitations are threatened with serious injury or are likely to lose a substantial portion of the domestic market.

2. The proposed amendment further provides that the Secretary of Defense is to certify to the President where the American production of the article or product is not sufficient for essential defense needs, and also to indicate the quantity of supplemental imports of the article needed to meet those defense needs. While the proposed limitations would apply generally to all imported articles or products containing controlled materials, these restrictions may be eased only for those imported articles or products which are related to essential defense needs. As this committee knows, many imported articles or products containing raw materials under control serve to meet essential civilian requirements, but the American consumer has apparently again been entirely overlooked by the proponents of the proposed amendment.

3. The proposed amendment could be used to limit the imports of a great many desirable products and articles containing an insignificant amount of such controlled materials. There is no provision that the imported products or articles to be restricted shall be made chiefly of such raw materials.

4. The calendar years 1947 to 1949, inclusive, are not a representative or fair base period for many imported articles or products that would be involved. During the years 1947 and 1948, many friendly countries which traditionally export to the United States were struggling to restore their economies. Their exports of products containing vital raw materials were abnormally small during the proposed base period. Moreover, to take such an unfair base period and then to limit future imports to one-half of the average annual imports in that base period. would very drastically curtail all such imports.

5. The proposed amendment calls for a report by the Tariff Commission within 60 days of the receipt of an application from any "substantial" domestic producer, and the President is required to impose the quota limitation within 30 days of his receipt of the report from the Tariff Commission. This means that where quota limitations are imposed, only 90 days would elapse from the date of the domestic application to the date of the Presidential proclamation. Apparently, the quotas would be effective on the very date of the Presidential proclamation which allows no time for American importers to make the necessary adjustments in outstanding firm orders previously placed with foreign suppliers. Import trade is conducted on a long range basis as American importers usually must make irrevocable commitments many months prior to actual importation. Widespread concellation of orders by American importers in case a restrictive quota were to be suddenly established would surely do untold harm to our international commercial relations, and would bring American businessmen in disrepute abroad.

6. Such a new method of establishing import quotas would involve a heavy administrative burden on the Tariff Commission and the Department of Defense. The Tariff Commission is already seriously understaffed and overworked, and the burden proposed to be placed on the Department of Defense would certainly impede rather than further the defense effort.

The continuation of section 104 and the adoption of new restrictive proposals aimed at reducing the volume of a wide range of imported products at this time when our import trade should be increasing would destroy confidence in the sincerity of that international economic policy of the United States as section 104 has already caused keen apprehension among friendly countries as to future possibilities of getting off the American dole and standing on their own feet.

If we show that we are ready to violate with impunity our international commitments made pursuant to that policy every time some pressure group or special bloc demands legislative action in disregard of the orderly processes now provided under the escape clause procedure or section 22 of the Agricultural Adjustment Act, we may expect an era of international economic conflict and retaliation to replace economic cooperation.

For these compelling reasons as well as the inherent defects in the pending proposals which I have outlined, we respectfully urge that H. R. 7432 and H. R. 6843 be rejected by your committee.

Now, Mr. Chairman, we have heard a lot of testimony today on the matter of cheese, but my testimony goes a little beyond that, because there are three proposals to amend the Defense Production Act now before this committee.

In the Hunter bill, the proposal is to restore section 104 to the Defense Production Act as it stands, and also, a sweeping recommendation that controls over imports of any other agricultural or nonagricultural product, be imposed by the President upon recommendation of the Secretary of Agriculture, in the case of agricultural products, or upon investigation and recommendation of the Secretary of Commerce in the case of nonagricultural products.

That would be a new section 104 (b) of the Defense Production Act. We also have the Ramsay bill, H. R. 6843, which would authorize restrictions on imports by quotas upon application by any American producer, of an article containing a material, a raw material, which is subject to allocations or priorities at the time of exportation.

These are very sweeping provisions, and cut straight across the existing statutes.

It is understandable that, if domestic producers are wholly engaged in war production, that they may not be able to supply the amount of consumer goods that they normally would supply, and it is plausible to assume that foreign manufacturers might, conceivably, take over the markets while the domestic producers are engaged in these warproduction efforts.

But that has not happened, and it is based on the false assumption that only this country might be so engaged in war production, and that the other countries would be working entirely on civilian production.

We oppose the whole idea of quantitative restrictions. Since the war, the United States has, very properly, taken the leadership in reducing excessive tariffs and in eliminating the barriers to international trade.

Another point I should like to make is that these proposals, such as the section 104-cheese, as we have heard about all day today-and the extension of that type of control to any other products, under the Hunter Act, and the Ramsay proposal, to establish a quota of onehalf of the pre-Korean level-are all contrary to the policy that we have been trying to impress upon the friendly nations of the world, and the program of expanding international trade.

Of course, I know the members of this committee all realize that the United States is the greatest creditor nation in the world, and by all sound rules of economics we should have an excess of imports over exports, year after year; the reverse has been true, We have had a dollar-gap problem, and we have poured billions of dollars, through economic assistance, in the European countries, to let them get on their feet and export goods so that they could earn the dollars that they require to buy our products that they need, not only for military purposes, but also for their own internal economy.

These things cut straight across that, and we also object to the fact that these bills, such as H. R. 7432, and H. R. 6843, have been introduced as amendments to the Defense Production Act.

If they had been introduced on their own basis, they would probably be an important control proposition, and would have been referred to the Committee on Ways and Means. As a matter of fact,

when the cheese amendment was introduced last July, Chairman Doughton, of the Committee on Ways and Means, made the point that it seemed that this particular proposition was within the jurisdiction of the committee rather than as a matter of defense.

In conclusion, I might say that we seriously suggest that H. R. 7432 and H. R. 6843 be rejected by this committee and that you ask the Speaker of the House to recommit those bills to the Committee on Ways and Means, where they properly belong.

Mr. BROWN. Mr. Radcliffe, we are very glad to have the benefit of your testimony. Thank you very much.

The committee will adjourn until 10 o'clock tomorrow morning. (Whereupon, at 5:05 p. m., the committee adjourned, to reconvene at 10 a. m., Thursday, May 15, 1952.)

(The following statements were submitted for inclusion in the record of the hearings:)

Hon. BRENT SPENCE,

NEW YORK, N. Y., May 15, 1952.

Chairman, Banking and Currency Committee,

United States House of Representatives, Washington, D. C.

DEAR MR. SPENCE: As secretary of the Switzerland Cheese Association, I respectfully request that the attached statement in opposition to the renewal of section 104 of the Defense Production Act be inserted in the records of the current hearing of the House Banking and Currency Committee. Your favorable consideration will be appreciated.

Very truly yours,

STATEMENT OF THE SWITZERLAND CHEESE ASSOCIATION, INC., IN OPPOSITION TO THE RENEWAL OF SECTION 104 OF THE DEFENSE PRODUCTION ACT The Switzerland Cheese Association, Inc., is a New York corporation organized in 1929 to assist in the marketing of cheeses of Switzerland. The association has invested substantial sums of money in consumer and trade advertising, to promote the consumption of Switzerland Swiss cheese. There is now an established and

steady market in the United States for this imported product.

The cheese-import restrictions imposed by the Secretary of Agriculture pursuant to section 104 of the Defense Production Act of 1951 arbitrarily reduces this market to about one-half of its potential and seriously threatens the investment of the association.

The following table demonstrates the loss of sales of cheeses of Switzerland sustained by the producers during the 11-month period August 1, 1951, to June 30, 1952, during which the law is scheduled to be in effect:

TABLE 1

Total quantities of cheeses of Switzerland which it was planned to export to American consumers during 11 months, August 1, 1951, to June 30, 1952: