commission well staffed with professionally competent experts and economists.

They might be be better than either you or me.

I do not know. I should hope they would be.

I would like to have put on the easel again that chart on cotton manufactures.

I want to use two examples. It is true in the free-trade theory on which reciprocal trade is based, great dependence was placed on American skill, know-how, inventiveness, organizational ability, and all connected with that. I do wish that this diagram had shown American production as well as American exports. Of course, it would have gone off the top of the chart. You couldn't do it on that scale. But in this industry we have a case where the modern methods of production are practically 100 percent American. They originated here.

The old spinning mule that was standard 50 or 60 years ago was replaced by the ring spinner. That is an American invention. The old loom in which the bobbins were changed by hand was working up to about 75 years ago was replaced by the Northrop loom made up in Massachusetts, your home State.

Furthermore, the management processes by which that automatic loom was changed from having an operator run 2 or 3 or 4 looms to where he was running 40 or 50 on standard goods, that is an American development.

The management end of it is. The whole thing is a tribute to American ingenuity, American experience, American managerial skill. And yet that industry, in spite of all we have put into it, is no longer safe. We have to come to arrangements with other countries in order to preserve our markets from them. That is I think the most extreme of the cases that we have met.

But what troubles me is that I feel that we are going to meet others, and many others, and that we need to look ahead.

Mr. Secretary, the position I am taking is that of a 3-year extension and the appointing of a commission particularly competent to look not merely at the past and the present but keep an eye on developments as they move into the future of competition, and to report to Congress in 1960. I am hopeful of two things. One is that I can sell that to this committee and sell it to the Senate, and the second is that it will not be too unacceptable to the administration.

Those are my two hopes.

Now is that a question? I do not know as that is a question. Senator KERR. That is a very valid premise for questions, one of which, if the Senator from Oklahoma may be permitted to make a suggestion, would be, does the Secretary not agree?

Senator FLANDERS. That is right. That changes a speech into a question.

Secretary WEEKS. I'm sorry, Senator, I do not agree, and I hope to convince you to agree with me.

Senator FLANDERS. I am really very much concerned.

All these things are going on in an increasing scale all the time. Various industries, including my own old industry, the machine-tool industry, are finding it necessary to manufacture abroad in order to

sell abroad, because they cannot sell abroad the machinery that they make here. Plants are being opened in England, in Belgium, in the Netherlands, and in other parts of Europe in order to be able to sell on better terms abroad than they can on those made here.

You have some figures there and I would like to get them.

Secretary WEEKS. May I spell them out for the record and then give you the record.

Senator FLANDERS. Yes.

Secretary WEEKS. I have some figures on the metal-cutting machine tools, metal-cutting tools for machine operations in forming and shaping types of metalworking machines, and on the exports of the first, metal-cutting machine tools, in 1953 we shipped abroad 118 million; in 1957, 107 million. Our imports were 30 million in 1953-I am reading round figures-and had dropped to 27 million in 1957. In the metal-cutting tools, the exports from 1953 to 1957 increased from 10 to 15 million and the imports from 1,300,000 to 2,400,000, and in the forming and shaping types, the exports increased in the 5-year period from 38 million to 65 million, and the imports increased from 7 million to 9 million.

What may happen in the future, that is in the lap of the gods, but we have kept, it seems to me, the figures indicate an excellent balance, and that would be supplemented by the chart I showed before.

Senator FLANDERS. That of course covered many types of metalworking machinery.

Secretary WEEKS. That covered industrial and office machinery, and this is just the three types listed there.

Senator FLANDERS. The 1953 still showed some influence from the Korean expansion of production.

Now let me see here, metal-cutting machine tools, imports in 1953 were very high.

I think we were still as I remember it at that time having some of the effects of machine tool shortages due to Korea, and in 1957 they still remained high.

The domestic demand was good at that time.

The exports have risen, as you say, went down slightly between 1953 and 1957, but still American machine-tool makers are building plants abroad, and it is my belief that in that industry at least and in others is a very much expanding situation.

In other words, the expansion in many lines of American industry is taking place abroad and not here.

Secretary WEEKS. The figures, Senator, on expansion of industry in this country would not seem to me to bear out that statement. As far as plants abroad are concerned certainly there has been a great development in that area.

I, before I came here, was director of a company that has plants I think in about 15 or 18 foreign countries.

Senator FLANDERS. I do not think that is necessarily bad.

Secretary WEEKS. I think that is the process that is going on as we develop our posture in trade.

It will go on more and more.

Senator FLANDERS. But one of the things that wants to be investigated is whether our principal expansion is now taking place abroad rather than here.

I am inclined to think that there are many industries in which that is true.

I have been keeping in mind two industries.

One is the cotton textiles which has now reached the point where competition, open free competition, is impossible. Cotton textiles are there. Now there is another case which illustrates a type. It is a different kind of a case and I use it as a type. That is clothespins. Did you ever hear of clothespins?

Secretary WEEKS. Yes, sir.

Senator FLANDERS. There are two clothespin factories in Vermont. That is what directed my attention to that particular industry, and they have been for a long time meeting with European competition. The imports are growing.

In fact, the industry, just on a guess, I would say would require very large increases in tariffs to keep it from going under, and I am raising the question as to whether it ought to go under.

Under free-trade theory, American clothespins ought to disappear. They cannot meet European competition without very greatly increased tariffs.

Now do you think that they should disappear, Mr. Secretary?
Secretary WEEKS. No, sir; I do not.

This you will recall is one of the escape clause recommendations of the Tariff Commission which the President acted upon favorably. Senator FLANDERS. Yes.

Secretary WEEKS. In an increase of the tariff rate.

Senator FLANDERS. He did. And that was a good act if we concluded that the American-made clothespins ought not to disappear. However, it was not sufficient. I am told that the percentage of the total purchases that are furnished by imports continues to increase, and so the industry may come again for further increase in duties.

What the industry would like, as I understand it, is anathema to the State Department, and that is a quota.

The quota is something we have been trying to get everybody else out of, but if we conclude that we would like to preserve the American clothespin industry-and that is a question-then it would seem as though a quota is a more satisfactory way to do it than the duties.

That is a real question as to preserving a given industry. What the reciprocal trade treaties do is to put in the hands of the Government the decision as to whether industry A is to go up or down, whether industry B is to go down or up, whether industry C is to go up or down. It is a very serious responsibility, and I want to have it studied with greater care than it has yet been studied.

Secretary WEEKS. May I throw in some figures on employment at this point?

Senator FLANDERS. Yes.

Secretary WEEKS. Somewhat in answer to your question. There are about 64 or 65 million people in the labor force of this country.

We think according to the statistics that are available about 41⁄2 million are engaged one way or another in foreign and world trade, foreign trade.

Senator FLANDERS. Yes.

Secretary WEEKS. In or out.

Now I think it is interesting that in all of the escape clauses that have reached the President's desk, taking the employment in those industries at the top was 105,000. At the low point, presumably due to competition with foreign imports, it dropped 29,000 to 76,000. Senator FLANDERS. I do not get the point.

Secretary WEEKS. In all of the escape clause cases that went to the President's desk, which covers 26 different commodities, the total employment in all of those 30 cases, 26 different commodities, because 1 or 2 of them went up twice, the total employment was 105,000. At the peak, according to the records filed with the Tariff Commission, this employment dropped to 76,000.

Senator FLANDERS. Yes.

Secretary WEEKS. Cut down 29,000. Now of that 29,000, 13,000 was represented by cases the President acted favorably upon, and 8,000 by cases the President did not act favorably upon, and the other 8,000 are still pending.

Senator FLANDERS. Perhaps like clothespins he cannot act favorably enough.

Secretary WEEKS. The only point I make is that when I talk about a middle road in trying to build foreign trade and to build all the things that are a part of it, here we have 65 million people working in this country, 4% of them in foreign trade, and in all of the escapeclause cases that have come to the President's desk at the peak only 105,000 were represented.

Senator FLANDERS. Well, that is a good record.

I could tell you, however, one way to raise employment in this country.

This is not the middle way, the median path. Let's raise bananas under glass. We will get our bananas that way and we will employ a lot of people. Now that is foolish, but what I am saying is that if we should make some of the things that we are buying abroad, that in turn would replace some of the employment of those who are now exporting.

That is not a principle to be followed, but it is something to remember. Employment would not necessarily cease if those people ceased to be employed on exports.

There is a balance there between the employment which we lose by not exporting and the employment which we might gain by not importing.

I do not want to argue that point or belabor it, but I do want to say that the memorandum I sent you was put in the record this morning, and I expect to refer to it when this matter comes up on the Senate floor, so that if you have any further thoughts in connection with it for my guidance, I would be glad to get them.

Secretary WEEKS. I have, Senator Flanders.

Senator FLANDERS. You sent me some material.

Secretary WEEKS. Yes, and I have a response to your memorandum which is fairly long and I will either file it for the record or give it to you personally.

Senator FLANDERS. I think, Mr. Chairman, I ask that this response to my memorandum to the Secretary be filed immediately after the point in the record in which the memorandum was placed this morning with a cross-reference back to it in the record from this conversation, here.

Senator KERR. Without objection, that will be done.

Senator FLANDERS. I think it would be advantageous to have the two together.

Secretary WEEKS. Yes.

(The Secretary of Commerce subsequently forwarded to the committee for insertion in the record on page 36 his reply to Senator Flanders' memorandum of May 12.)

(NOTE. At the Senator's request this information has been inserted on page 36 of the hearing.)

Senator FLANDERS. That is all I have to say, at the present time, Mr. Chairman.

Senator KERR. Just one question here, Mr. Secretary. A number of times you have said here what the President did in carrying out the recommendations of the Tariff Commission. How many cases did you say had been acted upon by the Tariff Commission in which it made recommendations to the President?

Secretary WEEKS. Thirty.

Senator KERR. How many of those did the President carry out as recommended by the Tariff Commission?

Secretary WEEKS. There were 26 different commodities. Some of the commodities repeated so my figures are based on the 26 different commodity recommendations by the Tariff Commission. But of the 26, he favorably acted

Senator KERR. I mean how many of them did he carry out the full recommendation of the Tariff Commission?

Secretary WEEKS. He acted favorably in 10 cases.

Senator KERR. You mean by that he took some action in 10 cases? Secretary WEEKS. He took some action.

Senator KERR. Are you telling the committee that in 10 cases he fully carried out the Tariff Commission's recommendations?

Secretary WEEKS. I cannot say that he carried out the full recommendation. I will have to get that.

Senator KERR. Can you tell me in how many cases he carried out the full recommendation of the Tariff Commission?

Mr. KEARNS. The Tariff Commission divided in its recommendations in many of the cases.

Senator KERR. I am talking about the majority recommendations. in the tariff cases.

When the Supreme Court carries out a decision you do not comply with it by complying with a minority report of one of the members. Secretary WEEKS. We will have to run through the record.

Senator KERR. Now Mr. Secretary, I do not want to be at all lacking in the most complete consideration, but my information is that there were not as many as five of them in which he carried out the full recommendation of the majority of the Tariff Commission. Now if I am in error in that, I would like to be corrected, and I think you would want the record to reflect the accurate condition.