in deciding who may or may not secure raw materials which they need for the conduct of their business is vital. Whenever the Government imposes limitations upon access to a commodity, it increases the difficulty of preserving competition among those who must use that commodity. It should be extremely careful, therefore, not only to establish limitations with due regard to all enterprises in an industry and their needs; even more important, once having established those limitations, it must so divide the amount thus limited as to dislocate to the minimum the competitive endeavor of the persons affected by the limitation. This is merely putting into action the American principle of fair play. The present legislation contains no language by which this principle of fair play is declared as a matter of congressional policy. We believe this omission to be frightfully serious. The Congress, as the policymaking branch of the Government, should correct such an omission forthwith and while it has the opportunity to do so. There are a number of ways of doing this. It is not necessary to consider them all or the relative merits of each, for we can readily understand the heavy pressures which exist to bring the present legislation now before this committee to completion without delay. Accordingly, we suggest a very simple approach to solving the problem with which we believe no person truly interested in competitive enterprise and truly concerned with the ideal of freedeom of opportunity can seriously quarrel. We suggest that a single sentence added to the present language of amended section 2 (B) of the Tariff Act of 1930 (a part of section 8 (A) of the proposed Trade Agreements Extension Act of 1958) will correct the defect. We would urge for your serious consideration the following language: "Any action so taken involving limitations upon the importation of such article by any enterprise shall be in conformity with the provisions of the Administrative Procedures Act, shall be equitably consistent with the needs of enterprises affected, and shall be in furtherance of principles of equal competitive opportunity, with recognition for the development and well-being of independent enterprises." Hon. HARRY F. BYRD, Chairman, Senate Finance Committee, HELENE CURTIS INDUSTRIES, INC., Washington, D. C. DEAR SIR: I support the administration's proposal for an extension of the Trade Agreements Act (H. R. 10368) as a minimum of the kind of foreign trade policy the United States needs at this time in the interest both of its own economic prosperity and the unity of the free world. As a producer of consumer items-of a type that can be identified as contributing to more interesting living for the consumer public-I wish to emphasize the importance of freer trade to a richer life for consumers generally. Free world unity is not a theoretical objective of diplomats and statesmen divorced from the reality of the fundamental interests of the people they serve. Defense against Soviet economic penetration-and against its fellow-traveling political penetration-is not some map-room exercise on the part of military specialists and economic warfare strategists out of touch with the needs and aspirations of the people they are employed to serve. All of these objectives and decisions of high policy actually relate to the fundamental search by people everywhere for a richer life. A richer, more interesting life for consumers everywhere should be the objective of public policy in the United States and throughout the world. The fact that this is not the objective of public policy in countries behind the Iron Curtain is the reason for the international crises and the hot and cold wars that have confronted mankind in recent years. No foreign trade policy other than a liberal trade policy-one that makes available to the consumer larger quantities of more varied goods of higher quality at reasonable prices-is in the best interests of the consumers of this Nation. And it is for that among many reasons that I strongly endorse a foreign trade policy of the kind that we have had for nearly a quarter of a century. I want to see that kind of trade policy made even more effective than it already is. I want to see it develop in such a way that it permits the United States to meet effectively the ever-changing trade developments in other parts of the world. 27629-58-pt. 213 As for those firms which can prove serious injury from this kind of national trade policy, I would recommend that sound economic measures be adopted to facilitate adjustment-measures which do not weaken a foreign trade policy that serves so well the Nation as a whole. Sincerely, GERALD GIDWITZ, Chairman, Board of Directors. PROVIDENCE RUBBER WORKERS FEDERAL UNION, Providence, R. I. Hon. JOHN O. PASTORE, Senate Office Building, Washington, D. C. DEAR SENATOR PASTORE: We recommend that an amendment be attached to any reciprocal bill "That all products be exempt from further Presidential cuts, which already have been cut 80 percent of the maximum or more, since the 1954 extension of the act." This, we believe, would at least hold the line so far as our products are concerned. Sincerely, ELVIRO LOSTACCO, President. P. S.-Rubber footwear has been cut the full maximum under the 1954 extension, and rubber-soled fabric footwear 85.71 percent of full maximum thereafter. E. L. GREENWICH, CONN., June 19, 1958. Hon. HARRY F. BYRD, Chairman, Senate Finance Committee, Senate Office Building, Washington, D. C. DEAR SENATOR BYRD: The administration's trade-agreements-extension bill. which passed the House as H. R. 12591, is now before the Senate Finance Committee for consideration. The basic points at issue are: 1. Shall foreign-trade policy continue to be formulated by the executive branch, or shall this responsibility be returned to the Congress? 2. Shall the executive branch continue to have the authority to ignore and veto findings of the Tariff Commission of injury to American industries and workers, or shall this authority be returned to the Congress? 3. Shall the executive branch be authorized during the next 5 years to reduce our tariff rates a further 25 to 30 percent? It is respectfully urged that: 1. Responsibility to determine foreign-trade policy should be returned to Congress. Administration of trade policy so determined should be by an expanded and strengthened Tariff Commission. 2. Findings of the Tariff Commission should be implemented within a reasonable time, unless their modification or veto is supported by a majority of either or both Houses of Congress. 3. Further reduction of tariff rates should be deferred until an overall, longrange, foreign-trade policy has been determined by the Congress, and, then negotiations seeking reciprocal benefits should be conducted bilaterally. Concessions should be granted only if truly reciprocal benefits are obtained. 4. The executive branch should always be heard on the foreign-policy aspects of our trade and tariff problems, but the interests of workers and business. national security, and economic strength considerations should also be fully evaluated in arriving at final conclusions and ultimate decisions. Many factors justify, even necessitate, the procedural changes proposed, and call for a new approach to the administration of our foreign-trade policy. I hope you and your committee will present to the Senate a trade-agreementsextension bill which will accomplish the objectives necessary to the long-range welfare and security of our Nation. Some of the facts and considerations supporting this recommendation are as follows: WORLD TRADE Proponents and opponents alike of the administration bill favor an expanded world trade. But opponents of the bill, as passed by the House, point out the urgent need for truly reciprocal trade. Since World War II, foreign-trade arrangements under the Trade Agreements Act have not been truly reciprocal. 1. The United States is one of the lowest tariff countries in the world. Under the Trade Agreements Act, our tariff rates have been reduced 75 percent. Over half our imports enter the country free of duty, or at token rates. 2. Foreign countries, on the other hand, regardless of their tariff rates, have found many ways to impede entry of our exports of manufactured goods. The plain fact is foreign countries will buy from us what they need and do not produce themselves, but they will not permit our goods to enter their countries if their own manufacturers can supply their needs. 3. Foreign nations are not prevented for lack of dollars from buying more products or services from us. In fact, quite the contrary. Foreign holdings of gold and dollar assets increased $7 billion in the 4-year period 1953-56. The small gap in 1957, $300 million, was due to nonrecurring needs arising out of the Suez crisis. This was more than covered by the $1 billion surplus foreign nations had against the United States in 1956 alone. JOBS Jobs are vital to our national welfare. Our whole economy is based on jobs. One large provider of jobs is industry. 1. A McGraw-Hill publication, Business Week, reports in its June 7, 1958, issue that from a peak of 171⁄2 million late in 1953 employment in manufacturing industries has declined by almost 21⁄2 million workers. Imports in 1957 were nearly $3 billion more than the $10.215 million of imports during 1954. These increasing imports, encouraged by substantial tariff-rate reductions during this period, contributed materially to the disemployment of American workers. 2. Administration witnesses in hearings before the House Ways and Means Committee conceded that the figure of 42 million jobs, widely alleged by proponents of the administration bill to depend on exports, was, in fact, unreliable, misleading, and inaccurate. 3. It is, of course, a fact that many jobs are dependent on world trade. Just how many is moot. It is unequivocally clear, however, that we cannot absorb unregulated or unlimited imports of manufactured goods of the kind our manufacturers can produce in adequate volume for our needs without our workers suffering a serious job loss. COMMUNIST THREAT The administration claims that if we do not continue present trade policies and procedures Soviet Russia will be able to wean friendly countries away from the free world and into the Communist orbit. 1. This claim overlooks the fact that at any time we wish we can resume friendly bilateral-trade negotiations with any country, with a view to establishing truly reciprocal and mutually beneficial trading arrangements. Proof of this is the so-called voluntary self-imposed Japanese quota on textile exports negotiated by the executive branch. 2. The summary of the report on Foreign Economic Policy for the Twentieth Century, prepared by panel III of the special studies project of the Rockefeller Bros. Fund, Inc., just released, states: "Sino-Soviet aid promised (only a small part has been delivered) to the less-developed countries from January 1, 1954, to February 1, 1958, amounted to $1,952 million, of which $378 million is military.' We have provided the free world nearly $70 billion of aid since World War II, of which about two-thirds has been economic and one-third military. We currently are providing nearly $4 billion of aid annually-more in 1 year than the Soviet has promised in 4 years 1 month. And the Soviet recently canceled $250 million, over 121⁄2 percent of its total promised aid (Yugoslavia). 3. If we are losing the battle of aid to free countries, it is due to reasons other than tariffs, and it would seem reasonable to suggest we need a new team of policymakers, negotiators, and administrators of foreign aid. CASE HISTORY Two new items from the Philippine Islands which appeared in the Daily News Record on March 25 and June 18, 1958, vividly illustrate the folly of our aid-trade policies. These items are attached. 1. The Philippines in 1955 were a substantial cotton-textile customer of the United States. 2. With our financial aid and technical know-how, the Philippines by the end of 1958 will be essentially self-sufficient in cotton textiles and, in fact, will have some exportable surplus. 3. Encouraged by representatives of the executive branch of our own Government, the Philippines will soon erect a protective tariff to exclude cotton-textile imports. 4. United States industry has lost another foreign customer, and more American workers will lose jobs. 5. This is but one of many comparable examples. Objec The conduct of foreign-trade policy in recent years has been unsound. tives sought have not been achieved. Appointed departmental officials, neither accountable nor responsive to the electorate, have demonstrated a total incapacity to wield wisely the great power they have had over our foreign trade for the past 24 years. It is time to safeguard our national economic and social interests by a change in procedure. Especially, it is time to return responsibility to our elected representatives who are accountable to our people. To this end, your assistance is sought by this letter, which I hope may be included in the record of the hearings before your committee on this subject. Respectfully yours, A. U. Fox. [From Daily News Record, March 25, 1958] PHILIPPINES SEEN HAVING 29 TEXTILE PLANTS BY 1959 MANILA, PHILIPPINE ISLANDS.-By the end of 1958, there are expected to be 29 textile-manufacturing enterprises operating in the Philippines with more than a quarter million spindles and a capacity in excess of 35 million pounds of yarn. This prediction is made by Paul D. Summers, Director of the United States Operations Mission to the Philippines. Mr. Summers observes that this anticipated capacity by December will mean doubling the present Philippine yarn production in a single year. Savings to the Philippine economy as a result of the establishment of textile plants, according to Mr. Summers, have already exceeded $13 million. This is considered to be a conservative estimate. People in the industry have placed the savings at as high as 40 million pesos ($20 million). This bright picture of the textile industry is painted by Mr. Summers in a review of the assistance that the United States International Cooperation Administration, through the industrial development center, has extended to major Philippine industries. Textile manufacturing, according to the ICA Director, "has received very substantial help from IDC, and has responded with spectacular expansion." It is noted that in January 1955, there was only 1 textile firm in operation, with 37,000 spindles and an annual output of 4,700,000 pounds of yarn. Today, there are 19 mills with a total of 111,656 spindles and a capacity exceeding 16 million pounds a year. This represents an increase of over 300 percent in less than 3 years. [From Daily News Record, June 18, 1958]. PHILIPPINES OFFICIAL PLANS TO ASK YARN, CLOTH IMPORT BAN MANILA. Jose Locsin, chairman of the top policymaking National Economic Council, has assured textile manufacturers he would recommend shortly the banning of imports of cotton knitting yarn, gray cloth, and finished fabrics. All of these items, he said, are now being manufactured here and their continued importation would jeopardize the development of the infant textile industry. This assurance was given by the head of the country's economic planning and implementing body to the members of the Textile Mills Association of the Philippines who called on him for a policy statement. Mr. Locsin said there would be no need for special legislation to implement the steps necessary to protect the local industry. All that would be needed, he explained, would be to reexamine existing laws and policies and see that they are enforced. He suggested, for instance, a roundtable conference with officials of the Central Bank, the Department of Finance, the Economic Council and the members of the textile association so existing policies could be coordinated for the protection and promotion of the industry. The textile men have particularly complained against the entry of items that are now being produced here and warned that the industry would face ruin unless such importation is stopped. An American textile consultant has also recommended to the Philippine Government banning of cotton yarn imports and setting up of a protective tariff on cotton and synthetic gray cloth and all finished textiles to permit the growth of the local textile industry. Sidney L. Buffington, who is under contract with the Industrial Development Center through the United States International Cooperation Administration, has recommended these measures to give the local industry more incentive to expand. He warns that unless the necessary steps to encourage the installation of looms for weaving cotton cloth are taken at once, the Philippines a year from now will have a tremendous excess of yarn which it cannot utilize. STATEMENT BY THE AMERICAN PAPER & PULP ASSOCIATION This statement expresses the position of the paper industry (including the manufacture of woodpulp and paper products within this term) in regard to proposed tariff legislation, and is made by the American Paper & Pulp Association, the overall trade association of the industry, which is comprised of 14 divisional associations of which 280 primary manufacturers of pulp, paper, and paper products are members. The paper industry believes that its place in the national economy, the character of its products, its experience in tariff matters, and its position in international trade render its opinions on tariff matters of particular value. The paper industry ranks fifth in size of all American industry. Its product is truly international in character, for paper is used in every country in the world and is manufactured in almost every country where its basic raw material, chiefly coniferous wood, is available. In the field of international trade, the paper industry's market which includes paper, paper products and woodpulp, for many years has imported much more than it has exported. In 1956, exports were somewhat under $280 million, while imports ran well over $1 billion, or close to 4 times the value of exports. Of the import items, less than 6 percent were dutiable; and those that were dutiable are estimated to have had an average duty rate of less than 9 percent ad valorem. In other words, the paper industry is a "low tariff industry.' Under reciprocal trade agreements its tariff schedule has been lowered. Under these circumstances it might justifiably argue, from a viewpoint of self-interest, that reductions have gone far enough, and that legislative authorization for further reduction through extension of the Trade Agreements Act is not warranted. However, this industry neither reasons from that viewpoint nor reaches that conclusion. Our industry is confident that negotiations promoting international trade through the elimination or reduction of tariff and other import barriers in foreign countries against paper and paper products should be encouraged. THE TRADE AGREEMENTS ACT SHOULD BE EXTENDED The paper industry believes and advocates that the Trade Agreements Act should be extended for some reasonable period, but takes no position as to the exact number of years of extension. This legislation has now been on the statute books for nearly a quarter of a century. It has been repeatedly extended for various periods under widely vary |