The bill now before you takes cognizance of this serious defect in the trade agreements program; but the ostensible remedy provided is clearly of no practical value. As passed by the House, H. R. 12591 provides that failure by the President to grant the relief recommended by the Tariff Commission for a distressed industry may be overridden by a two-thirds majority of both Houses of Congress. However since the problems of a particular domestic industry, even though it may be in the process of liquidation as the result of excessive low-wage low-cost imports, seldom if ever have a direct appeal to the bulk of our population-the possibility of such an overwhelming vote by the Congress is virtually nonexistent. The clear-cut answer to the problem is to refer the recommendations of the Tariff Commission to Congress and, if Congress does not act within a specified time, to allow the recommendations to become effective. Another ostensible safeguard for American industries, adopted in the 1955 extension of the Trade Agreements Act, was the so-called national security amendment. The history of this amendment clearly shows that it was intended to provide a means of assuring an adequate "mobilization base" of domestic coal and mineral production. In actual operation and administration, however, it has not served to accomplish this end and, as a result, vital branches of the mining industry are today in far more precarious condition than in 1955.

Certain general language was written into the national security amendment in the House, including a statement that the need for mineral-industry exploration, development, and growth should be taken into consideration in determining, in any case, whether action is called for to curtail excessive imports. We believe, however, that this language is inadequate. At the very least, the law should spell out a requirement that the maintenance of a sound mobilization base of domestic mineral production is to be a controlling consideration in the operation of the national security amendment.

We have made clear our view that Congress should reestablish and exercise its authority over tariffs. We do not believe that if H. R. 12591 is not enacted in substantially the form now before you, the foreign trade of our country will "go to pot." The fact is that a failure by Congress to extend the President's authority to enter into trade agreements would in no way affect the trade agreements now in force, nor curtail in any way the opportunities for foreign trade which now exist.

We strongly urge that in any legislation resulting from these hearings, there be incorporated the provisions outlined above, which are needed to preserve and strengthen our domestic mining industry as an essential source of vital raw materials and a major component of our Nation's economy.

STATEMENT OF David G. HILL, PRESIDENT, Pittsburgh Plate Glass Co.,

PITTSBURGH, Pa.

During 1958 the Pittsburgh Plate Glass Co. is celebrating its 75th anniversary. From a single plant employing 200 workmen, the company today operates 39 plants in 18 States, employing more than 35,000 workers receiving wages, salaries, and employee benefits in excess of $200 million per year. The company and its affiliates today produce a wide range of flat-glass products and fiber-glass products, chemicals, paints, plastics, and brushes. In all of these fields, Pittsburgh Plate Glass Co. faces intense domestic competition from manufacturers in the United States operating under the same economic conditions.

In past years and today, the company has enjoyed an export market on some of these products. On other commodities and particularly flat glass, the company has at times experienced drastic competition from imports from low-cost foreign countries. Import competition, particularly on window glass and plate glass, is severe at the present time. Our plants making these products are operating at only 50 percent of capacity. Imports are increasing.

Based upon its overall experience in foreign trade in a number of different lines, the company is opposed to any further extension of the Reciprocal Trade Agreements Act in its present form. If, however, the act is to be extended, then the authortiy of the President thereunder should be limited and definite. Any extension should not exceed 2 years. The peril points established by the Tariff Commission should be binding, and standards for determination thereof should be spelled out in the law. Most important, escape-clause provisions of the act should be strengthened by making findings of the Tariff Commission final and conclusive.

On the export side, it has been our experience that during operation of the trade agreements program there has been a constant and consistent demand by foreign countries for economic self-sufficiency which has been implemented by imposition of exchange controls, import licensing, embargoes, and raising of tariffs. The result has been to steadily decrease the opportunities for world markets for products of our company.

On the import side, and in our particular flat-glass industry we find that wage rates in competitive countries of Europe are approximately one-fourth of those that we pay in the United States. Wage rates in Japan are such that daily earnings are lower than hourly earnings in the United States. Further, the manufacturing techniques and the machinery used by foreign competitors are equal to the best that can be made or purchased by the United States producer. Under existing tariffs, which are 70 percent lower on plate glass and 50 percent lower on window glass than the rates originally effective in the Tariff Act of 1930, these products can be and are laid down in United States ports at lower prices including transportation and duty than the domestic products. Currently, foreign window glass is being offered in the markets of the United States at 15 percent below prices of this company and approximately 8 percent below our prices on heavy sheet glass. On the Pacific coast, Japanese window glass is currently quoted at 25 percent under the prices of the Pittsburgh Plate Glass Co. On plate glass, imported glass is usually quoted about 7 to 8 percent below our domestic list. As a direct result, an increasing number of our customers are buying imported glass in place of our American-made product.

Window-glass imports in the calendar year 1956 reached an all-time historic high of over 300 million pounds. In 1957 imports of window glass decreased somewhat, but at the same time there was a sharp decrease in domestic output, and even the somewhat reduced volume of imports in that year represented, on the basis of all available information, not less than 25 percent of the total American production for open market sale.

Currently, imports have resumed a rise toward the all-time record level of 1956. For the months of January and February 1958, imports of window glass totaled 36,440,000 pounds as compared with imports for the same period in 1957 of 26,920,000 pounds, an increase of about 35 percent. During the same 2 months, shipments of this company decreased.

Plate-glass imports for 1956 also attained a new record high of over 38 million square feet. Also, as in the case of window glass, there was some reduction in import volume in 1957. In that year, however, imports nevertheless represented not less than 25 percent of the entire domestic production of plate glass for open market sale.

The large and increasing volume of imports of flat glass, in the face of curtailed demand for the domestic production, must inevitably mean definite and sustained injury with further curtailment of domestic operations, employee lay-offs, and financial loss. The present low tariff duties on flat glass afford no protection against such foreign competition.

The last stage of the latest reduction in tariff duties on flat-glass products went into effect only on June 30, 1958, as a result of negotiations conducted under the 1955 Trade Agreements Extension Act. The threat implicit in the proposal for further across-the-board reductions in duties creates disturbing uncertainties and a definite threat of further injury. The existing law has proved inadequate to extend relief in similar situations. The proposed bill, H. R. 12591, offers no substantial improvement.

In February 1958, the Tariff Commission, which administers the escapeclause provisions of the Trade Agreements Act, reported that up to that time it had carried on 73 investigations under the escape clause. In 30 cases the Commission found injury and recommended an increase in tariff rates or other relief for the affected domestic industry. Eighteen out of 30 recommendations by the Commission were rejected by the President; 2 cases were still pending as of the date of the report; and in only 10 cases did the President accept the recommendations in whole or in part. This disregard of the findings of the specialized agency created by Congress gives small hope to any domestic industry that it can obtain relief from severe and injurious import competition. The trade-agreements statute, in one form or another, has been in operation for 25 years. In the course of that time it has been frequently extended-never more than for a period of 3 years-and just as frequently amended. As a result, the law now on the books represents a patchwork quilt resulting from efforts to compromise conflicting policies. Notably, the General Agreement on Tariffs and Trade-the so-called GATT-of which the United States became a

provisional member in 1948, has never been passed upon or approved by the Congress. Rather, the Congress, in recent actions taken to extend the basic trade-agreements law, has attached a limiting provision that such extension should not be construed as an approval of the said GATT. The bill, H. R. 12591, contains a similar provision. Yet GATT is claimed to be the cornerstone and foundation of all of our reciprocal-trade agreements and the commitments which have been entered into thereunder have, in most instances, been given force and operation of law, despite the specific reservation of approval thereof by the Congress. There is imperative need for a new tariff policy geared to present day realities. H. R. 12591 does not meet this requirement.

If, pending a final determination of a new, sound, and stable tariff policy, it is deemed necessary to maintain the principle of reciprocal trade in effect, then it is submitted the following requirements should be adopted:

1. The Trade Agreements Act should not be extended for a period of more than 2 years. Study reveals that the 5-year extension proposed by H. R. 12591 may, in fact, be of much longer duration, as the tariff reducing power therein proposed is not limited to the period of extension. In that bill, the tariff reducing power could be applied beginning in 1963 and carried on until 1968. For all practical purposes, therefore, the extension proposed by H. R. 12591 may be considered 1 of 10 years and cover 2 presidential terms of office beyond the present.

The proposed European Common Market is cited by the proponents of H. R. 12591 as a principal reason for a minimum 5-year extension of the present law. The President's message to Congress on the trade-agreement legislation states, concerning the European Common Market (H. Doc. 320, 85th Cong. (1958), p. 3):

"These countries will ultimately have a common tariff applying to imports from the rest of the world. It is anticipated that important steps toward this common tariff will become effective during 1962-up to 41⁄2 years from the renewal date of our trade-agreements legislation."

It is clear, therefore, that the impact of the Common Market will not be fully felt by the United States for at least 4 years. While there can be no doubt that the proposed Common Market developments will affect the world trade pattern in the future, it is extremely difficult, if not impossible at this time, to predict what the effects will be for specific commodity trade or specific countries. The conclusion must be that further reductions in United States tariffs at this time would amount to giving away in advance a substantial part of any bargaining power we now possess. We have already bargained with all of the members of the proposed Common Market and gave away all of the tariff concessions thus far allowed by Congress. The proposed extension amounts to a suggestion that we begin where we left off, i. e., from the lowest all-time tariff levels of this country, and with the Common Market nations beginning from an unknown, newly established plateau which it is reported will be the highest prevailing tariff of any member nation. Thus, far from establishing the need for a grant of new tariff reduction authority, and more particularly, for a long extension of such authority, the proposed European Common Market seems, without doubt, to justify no extension of new tariff reduction authority, or at most, an extension for a limited period of time.

2. No new tariff reducing power should be delegated to the President. For any period of extension he should be permitted and authorized only to utilize the unused portion of the powers delegated under the 1955 Extension Act. Tariff rates on flat glass products are already too low. Certainly, no further reduction in such rates could possibly be justified.

3. Peril-point determinations by the Tariff Commission should be made final and binding and the existing implied authority of the President to disregard or exceed such determinations should be repealed.

4. Peril-point standards should be inserted in the law along the lines of standards prescribed in escape-clause proceedings to guide and control the Tariff Commission and the President, under the powers thus delegated by Congress. 5. Escape clause provisions should be amended to permit the Tariff Commission, in appropriate instances, to measure the competitive impact of imports against that portion of domestic production of like or similar articles which is offered for sale in the open market. It is a common practice for many American industries, including particularly, flat glass, to produce products for further processing in the same or another plant of the company. The first product produced, as for example, window glass, or plate glass, when thus further processed within the company's operations, is never offered on the open market in

its form as window glass or plate glass. It is only when it has been further fabricated into laminated or toughened glass or into numerous articles of glass, that it comes into direct competition with other domestic products or with imports. Inclusion of products which are made for further preparation unfairly distorts the volume of domestic production for comparison with import volume. In past cases arising under the escape-clause provision the Tariff Commission has followed no uniform policy. The Congress should specifically direct that consideration be given by the Commission to this situation. An amendment to effect this suggestion is attached hereto and marked "Exhibit A."

6. Recommendations of the Tariff Commission to the President should be made binding upon the President unless the Congress, by concurrent resolution, shall approve the President's rejection or modification thereof.

In connection with this last suggestion, it is believed that the provisions of the bill, H. R. 12591, permitting the Congress to override the President is largely illusory, since it is effective only where each House of Congress exercises its power by a two-thirds vote-the same requirements for overriding a presidential veto of legislation passed by the Congress.

No additional further reduction in existing United States tariff duties should be made at this time and no sound basis exists for extension of the present Trade Agreements Act. If that act be not extended, present arrangements will continue in full force and effect including the existing low tariff rates. During maintenance of this status quo a permanent and constructive tariff policy should be developed that will form a realistic approach to the development and prosperity of our foreign trade, both export and import. If, pending the development of such a policy, a brief extension of the existing law is determined to be necessary, then the amendments hereinbefore outlined should be incorporated as the minimum action necessary at this time to avoid further and undue injury or threat of injury to American agriculture, industry, and labor; and ultimately to the American consumer.

"SEC.

EXHIBIT A

Section 7 (b) of the Trade Agreements Extension Act of 1951, as amended (19 U. S. C., sec. 1364), is amended to read as follows:

"(b) In arriving at a determination in the foregoing procedure the Tariff Commission, without excluding other factors, shall take into consideration a downward trend of total production or of production intended for sale on the open market, employment, prices, profits, or wages in the domestic industry concerned, or a decline in sales of such products on the open market, an increase in imports * * *'"9

The foregoing text represents existing law with the exception of the italicized clauses. The purpose of the amendment is to provide a more realistic and accurate measure of the effects of import competition upon a domestic industry since domestic production intended for internal use or interplant transfer would be excluded from comparison with imports.

Hon. HARRY F. BYRD,

THE STATE OF TEXAS,
EXECUTIVE DEPARTMENT.
Austin, Tex., July 1, 1958.

Chairman, Senate Finance Committee,

Washington, D. C.

DEAR SENATOR BYRD: Because of a heavy schedule here, it will be impossible for me to appear before your committee to present my statement in behalf of mandatory restrictions on oil imports in line with the 1954 ratio betweeen total petroleum imports and domestic production.

However, I appeared before your committee as a Member of the Senate on March 15, 1955, when our State had been forced to reduce production to 18 days. The problem was so serious then that I advocated mandatory import restrictions. The problem is far worse today. For several months our State has been forced to reduce production to 8 days per month and this has been increased recently to 9 days.

Our domestic economy and the security of the Nation is being endangered and will continue to be threatened unless mandatory restrictions are ordered by the Congress in line with the ratio found to be necessary for the national security by the President's Cabinet Committee on Energy Supplies and Resources Policy in 1955.

I would appreciate it if you would read this letter to the committee and place in the record my statement in support of mandatory oil-import controls. Kindest personal regards and best wishes to you and the members of the Finance Committee.

Sincerely yours,

PRICE DANIEL, Governor of Texas.

STATEMENT OF GOV. PRICE DANIEL, OF TEXAS, BEFORE THE SENATE FINANCE COMMITTEE

Mr. Chairman, gentlemen of the committee, it was my privilege to testify before the House Ways and Means Committee on the reciprocal trade extension bill a short time ago. I advocated an amendment for mandatory restrictions on oil imports in line with the 1954 ratio, which was found by the President's Cabinet Committee to be necessary for the national security. I still believe such an amendment is essential.

As Governor of Texas, I appear, of course, in behalf of my State, but I firmly believe that what I advocate is in the best interest of the Nation. Having served as a Member of the Senate, I realize that your primary concern is the effect of this legislation on the welfare and security of all of the people of the United States, and it is with that in mind that I present these remarks.

Total imports of crude oil and products so far this year have averaged some 1,480,000 barrels a day. This amounts to a 23.3 percent ratio to domestic producttion, as contrasted to the recommended ratio of 16.6 percent which existed in 1954.

United States production is running approximately a million barrels a day less than the same period of 1957. New well completions so far this year are off 13.5 percent as contrasted with the comparable period of 1957. Exploratory drilling has been reduced 25 percent. In Texas, which has borne the major portion of the cutbacks, the drilling is off 39 percent. Most alarming of all, we failed last year to even replace the oil we produced, and, for the first time in 25 years, with the exception of the war year 1943, dipped into our backlog of reserve.

In short, the voluntary program has not worked. It is not working now if measured by a meaningful yardstick. It will not work until and unless Congress provides adequate legislative safeguards.

What changes have been made in the bill as it came to this committee from the House?

The so-called concession most highly publicized is the new standard in the security clause requiring the President to take into account the need for defensevital domestic industries to grow and to attract enough investments to carry on necessary exploration and development to assure this growth. Unfortunately, this can be rendered meaningless if the administration does not choose to interpret it in the way its House sponsors clearly intend. Indeed, if the administration has in mind to take into account this need for growth, revision in the voluntary program is already overdue. Therefore, this concession is in fact hardly a concession at all, unless it is tied down by additional language in the act to make it truly effective.

A second widely heralded concession is the administration's announcement that it was placing unfinished gasoline and other unfinished oils under the voluntary import program. This statement gave rise to the impression, in some quarters, that all foreign crude products have now been brought under effective control. This is not true. The bulk of oil products, including finished gasoline, are unaffected. At best, it is a long overdue step which, although highly welcomed, merely closes one gap in the voluntary program by which quotas were being evaded.

Administrative actions thus far are wholly inadequate to protect either the domestic economy or the security of the Nation. They are far less than Congress intended when it gave the President the power to limit these imports to the 1954 ratio. Since the administration has failed to comply with the clearly expressed intention of the Congress, the time has come when this intent should be made mandatory.

After careful study of petroleum imports in 1955, the President's Cabinet Committee reported as follows:

"The Committee believes that if the imports of crude and residual oils should exceed significantly the respective proportions that these imports of oil bore