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The CHAIRMAN. Are there any questions?
Mr. Talle. Mr. Chairman.
The CHAIRMAN. Dr. Talle.

Mr. TALLE. Mr. Holman, you have cleared up a matter of controversy in yesterday's testimony. I refer to that part of your statement on page 25.

A witness, Mr. Fromer, said that our export was only 2 percent. I challenged his statement and asked him if it was not rather, 32 percent.

I read on page 25 of your statement:

Export to other countries has been based on a high degree of subsidization, How much has this subsidization been percentagewise? That depends on where you start the measurement.

Then you go on to say: Relief fund expenditures on all dairy products from 1948 through 1951 were 32 percent of Commerce's reported export values (table 2, column 13). But Commerce's values do not include Commodity Credit losses on negotiated sales for export. When these losses are included in export values then the total subsidization for the 1948–51 period becomes 38 percent of all products (column 14). And if to this is added the 43.3 million dollars worth of dairy products donated by CCC for export (column 15) the total value of exports would be 696.4 million dollars and the amount of subsidization would be 290 million dollars, or 41.6 percent for the 4 years.

Now it seems to me that that should clinch the matter. That covers the ground. And to speak of 2 percent in the face of these facts is clearly not reliable testimony.

Mr. HOLMAN. That is correct, sir. We believe these figures that you have just quoted are verifiable. We did our best to check it, and we think they are correct.

Mr. TALLE. I am sure they are.

On page 26 of your statement, dealing with the alternative proposals that have been suggested in lieu of section 104, I believe you have answered that argument very effectively.

And I am very glad to see that on page 31 of your statement, at the bottom of the page, you quoted from the exception from article 21 of the general agreement.

Mr. HOLMAN. Yes, sir. Mr. Talle. In other words, section 104 came into being because of an agreement already made, that made allowance for that kind of provision in the law if it were found to be necessary.

Mr. Holman. That is correct. It was drawn so as to fit within the provisions of article 21 of the agreement.

Mr. Talle. It was also testified yesterday that there were practically no obstacles in foreign countries against our exports to them. Well I know for a certainty that that is not true, and I mentioned some of them like quotas, licenses, price arrangements, barter agreements, the devaluation of currency, differences in rates of exchange, and, many other devices that obstruct the freedom of trade.

Mr. HOLMAN. Yes, sir.

Mr. Talle. And much as we might like to have free trade in a world at peace, where the lion and the lamb would lie down together, we have to face the world as it is and not as we would like to have it be.

Mr. HOLMAN. That is correct, sir. And I have attached to my statement a table, in appendix A, which classified the type of restrictions which are in effect now in these other countries.

And I mentioned earlier that eight of the nine countries which have protested have put in restrictions against the United States.

Mr. Talle. On page 32 of your statement, you deal with a fundamental matter, the health of our people.

Now may I ask, when the inspections are made on foods coming into this country, are the inspections made at the point of departure, or are they made at the point of arrival?

Mr. Holman. They are made at the port of entry.
Mr. TALLE. Port of entry?

Mr. HOLMAN. Yes, sir. I understand that the samples that are taken are sent to the laboratory, and the product from which a sample is taken is held awaiting the report of the laboratory.

Mr. TALLE. I am very happy to note that you suggest we set up import standards, because certainly, in the case of dairy products, products, that all of our people need and want, if ever health were to be taken into account it would be in the matter of products of that sort, and surely that is something that should be done immediately, and'it amazes me that not more has been done in that direction.

Mr. HOLMAN. Mr. Talle, so far as the port of import is concerned, we have certain standards, but I do not believe that we have any mechanism whereby these products can be inspected in foreign countries, nor do we have any arrangements with those foreign countries to require them to make the same kind of high-class standards of inspection which we make in this country.

We have an arrangement with Canada for their inspection of their plants, on milk and cream that may be imported into this country. Their inspections have to be satisfactory to the agency that is administering the Lenroot Act. But on manufactured products, we do not have that machinery and we need it very badly.

Mr. TALLE. I recognize that it is very difficult and could be done as I see it, only through international treaty arrangements and even after those arrangements were made, it would require a great deal of education and reworking of methods abroad possibly to put them into effect on a satisfactory basis.

Mr. HOLMAN. Yes. I am further advised that the enforcement which the Food and Drug Administration is able to do is limited to the sample inspected.

Mr. TALLE. Yes, which in my opinion is most unsatisfactory.

Mr. Holman. That is right. We think that every shipment should be inspected, or better that the exporting country should be required to keep their product at home until it meets our standards.

Mr. Talle. I agree, Mr. Holman. The hour is late so I will not take up any more time. Thank you, Mr. Holman. Thank you, Mr. Chairman.

The CHAIRMAN. Are there any further questions?
Mr. Rains. Does the House meet at 11, Mr. Chairman?

The CHAIRMAN. The House meets at 11, and the first thing will be a roll call, I understand, on the rule for consideration of the Puerto Rican Constitution, and there are two conference reports coming up immediately afterward.

I thought perhaps we might recess to meet at 3 o'clock, and the witnesses can check with the office to see whether or not we will be able to meet at that time.

Are there any further questions of Mr. Holman?

Mr. RAINS. Not at this time.

The CHAIRMAN. You may stand aside, Mr. Holman. We are very glad to have your views.

Mr. HOLMAN. I desire to thank the chairman and the committee for a courteous hearing.

The CHAIRMAN. The committee will recess to reconvene at 3 o'clock.

(Whereupon, at 10:57 a. m., the committee recessed to reconvene at 3 p. m. the same day.)

AFTERNOON SESSION

(The committee reconvened, pursuant to its recess, at 3 p. m.)

Present: Chairman Spence (presiding), Messrs. Brown, Deane, Burton, Hays, Gamble, Talle, Kilburn, Nicholson, Widnall, and Betts.

The CHAIRMAN. The committee will be in order.

We are proceeding under difficulties, and can only sit while the House is in general debate. I understand it will be in general debate for about an hour and a half, so we will try to make use of that time.

I understand, Mrs. Rogers, that you have a statement you would like to make.

Mrs. Rogers. Mr. Chairman, I would be very glad if I could file a brief statement with the committee.

The CHAIRMAN. We will be very happy to have it.

Mrs. Rogers. It seems to me that the canners do need relief, There is a tremendous excess of supplies at the present time, more than there has been in a great many years, and prices of canned goods are very low anyway. So perhaps, if the Secretary of Agriculture could lower or remove controls on canned goods, and reimpose them if necessary, that would be helpful.

The CHAIRMAN. Thank you very much, Mrs. Rogers. Your statement will be inserted in the record.

STATEMENT OF HON. EDITH NOURSE ROGERS, REPRESENTATIVE

IN CONGRESS, STATE OF MASSACHUSETTS Mrs. ROGERS. Why canned food price controls are unwarranted. Canned food prices are not, have not been, and will not exercise any inflationary pressure.

Here are the facts: 1. Production of canned fruits, juices, and vegetables last year was the greatest in history-over 300,000,000 cases.

2. Supplies on hand April 1 of this year were the largest in history101,000,000 cases.

3. Supplies are so great the Department of Agriculture has recommended a 15 percent decrease in processing vegetable tonnage for this year.

4. The BLS retail price index of canned fruits and vegetables has been, since 1947, consistently under the index of the cost of living and under the all food index. Canned fruits and vegetables today are 24 points under the cost of living index and 64 points under the all foods index.

5. Only 12 percent of the pack of canned fruits and vegetables is now selling at ceiling prices.

6. Canned foods meet the suspension standards of OPS, The CHAIRMAN. Call the next witness, Mr. Clerk.

The CLERK. Mr. Haymes and Mr. Pierce, representing the Dairy Industry Committee.

The CHAIRMAN. You may proceed, Mr. Haymes.

STATEMENT OF P. L. HAYMES, REPRESENTING THE DAIRY

INDUSTRY COMMITTEE

Mr. HAYMES. My name is P. L. Haymes and I am an executive of the United Milk Products Co., of Cleveland, Ohio. In appearing before your committee I am representing the Dairy Industry Committee with offices in the Barr Building, Washington, D. C. This is a central committee composed of official representatives of national associations whose members are engaged in the dairy manufacturing, processing, and distributing fields, and has been in existence since 1934 as an organization concerned with major problems confronting the entire dairy industry. The member associations are as follows: American Butter Institute, National Creameries Association, National Cheese Institute, American Dry Milk Institute, Evaporated Milk Association, Milk Industry Foundation, and International Association of Ice Cream Manufacturers.

Price controls are a deterrent to production and we believe that price controls on all foods in general and dairy products in particular should be terminated not later than June 30, 1952. However, I am going to limit my remarks to the dairy industry, in which I have spent my life.

The dairy industry produces, manufactures, processes and distributes milk and all forms of dairy products to our 150 million people every day.

Milk and cream are produced on about two-thirds of the Nation's farms every day. These farms are located in every State of the Union and because of the highly perishable nature of the product it must be handled everyday without interruption.

This industry employs full time, at least one and a half million people and provides a livelihood for at least 10 million persons.

The dairy industry contributes more than $10 billion annually to our national commerce and aside from milk and cream, supplies approximately 40 percent of our beef. Housewives spend about 15 percent of their food budgets on dairy products and for this they get nearly 30 percent of the food consumed annually in this country. About one bite out of every three on our national menu is a dairy product.

The dairy cow is unique in its contribution to our economy. She makes this contribution in two distinct ways. First is conservation. The dairy cow can consume the various grasses, ensilage and other unpalatable vegetation and convert this into proteins, fats, vitamins and other human health-giving nutrients. The manure from the dairy cow is returned to the soil to maintain fertility for the production of needed crops.

The second is food. Bottled milk and cream, evaporated milk, butter, cheese, ice cream and many other nutritious products are provided from the milk of the dairy cow. Some of the calves go to market as veal and provide about 60 percent of the veal used. Other calves are raised to replace older cows to maintain the milk producing herd while the older cows go into the beef market.

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As a major contribution to our economy, the dairy farmer is unique in that he can produce and sell many thousands of dollars worth of dairy products each year and still have as good if not a better farm than before.

To maintain and expand this great industry to meet the increased demands of an increasing population, we need maximum production, which can be achieved expeditiously and effectively only if price controls are removed from milk and dairy products, for the following reasons:

1. A program of price controls for dairy foods is the poorest way in which this major food industry, with its important contributions to the health and morale of the nation, can be prepared for a national emergency in this period of rearmament. All of the arguments against price controls are sound-none of the arguments for price controls carries weight-when applied to the dairy industry.

2. The present supply of dairy foods is sufficient for current domestic demands, so that arguments for price controls based on scarcity are not valid.

3. The lifting of price controls from dairy foods at this time will not result in inflationary price advances, so the arguments for controls based on runaway prices are not valid.

4. The price-control mechansim is operating to diminish production and to weaken the processing and distribution facilities of the industry. A continuation of price controls will magnify these problems.

5. Price controls should be ended on dairy products promptly to restore incentives and to permit flexibility within all branches of the industry, so that production will be expanded and adequate industry facilities maintained to meet the ever-increasing nutritive needs of the Nation.

There is a strong case against the imposition of any price controls on the economy, even in a period of national emergency, which has been clearly presented by the United States Chamber of Commerce, in the monograph of its committee on economic policy, entitled "The Price of Price Controls." A partial digest is attached as annex A. Reading the entire monograph is recommended.

Congress has recognized the dangers in such a law by enacting it as temporary legislation.

The law was adopted at the commencement of our rearmament program in the belief that a program of price controls and allocations would help prepare our economy for full-capacity operations with the output of goods geared to defense and wartime needs. It was necessary for many industries to shift from peace to wartime goods. Temporary artificial scarcities may have justified temporary price controls and allocations.

But the dairy industry had no problem of shifting from peace to wartime goods and presents a complete contrast to those industries where temporary price controls and allocations may have been in the public interest. The dairy industry's contribution to the rearmament effort must be a continued steady and adequate flow of dairy foods which are so essential to the health of the Nation. And we must face the possibility that the domestic agricultural economics of our overseas allies may again be disrupted and that dairy foods must be available for export. We must have a program which encourages in every way

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