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Senator Malone. They could be terminated under that 3-i termination.
Mr. Simpson. Yes, sir.
Senator Malone. But it does not take 3 years' notice.
Mr. Simpson. No. They may be terminated individually on days' notice. Mv only point is they are not terminated by a w drawal from GATT.
Senator Malone. I am glad I have this second letter. 1 bothered me, so I wrote Mr. Brossard again, and this is what he a I think you should study these letters and section 336 and I am g to have them put in the record. We understand of course that t are a lot of holdovers like you down in all these departments and s< of them have been there for 25 years and the policy goes on and
This is in response to your request this morning for an explanation of bov« Protocol of Provisional Application of the General Agreement on Tariffs Trade permits the United States to withdraw from the agreement upon 60 d notice.
The basic general agreement was signed at Geneva on October 30, 1 Article XXXI of the general agreement provided that any contracting party withdraw from the agreement on or after January 1, 1951, upon 6 months' no Article XXVI of the agreement provides for the definitive entry into force th« under specified conditions. The agreement, however, has never entered da tively into force. However, it has been applied by the United States since Jam 1, 1948, pursuant to the Protocol of Provisional Application of the General Aj ment on Tariffs and Trade signed at Geneva, Switzerland, on October 30, i the same date on which the general agreement itself was signed.
Now, Mr. Chairman. I ask that the 2 letters received from Tariff Commission, 1 dated January 29 and the later 1 dated Ma 4, be inserted in the record immediately preceding the insertion section 336 of the 1930 Tariff Act.
We are completely out of all multilateral trade agreements upoi days' notice, and all bilateral trade agreements upon 6 months' not Then the workingmen and investors of America are back in busin
Senator Anderson. Without objection that will be done.
Senator Malone. Now, Mr. Secretary, there was a good dca argument yesterday, and there has been considerable talking argument and especially propaganda recently about the amounl foreign trade we have.
Mr. Secretary, I heard your testimony yesterday that we have billion worth of trade. I studied your charts. I am putting a t4 in the record showing the amount of profitable trade—the exp< of exportable goods from 1909 to 1957—that I want you to study, is terribly hard to get any specific information on this subject fi your Department. I would get an answering letter from someb saying that my letter had been turned over to the proper autho and that I would receive the requested information. Then a cot of months would elapse with no information and I would write anol letter. It was very difficult to get any pertinent information fi your Department of Commerce or from the State Department.
It shows the total production of movable goods, exportable Uru States goods, by year, exports of United States merchandise, perc of movable goods exported, United States Government grants i loans net, exports minus United States grants and loans, ratio column V which would be exports minus United States grants i loans, the ratio of column V to column I which is total productioi movable goods, the amount that could have been exported in percentage, and this is the way it runs.
In 1909, the first record, we had exported 9.8 percent of our exportable goods. Now this, you understand, Mr. Secretary, is profitable trade, not what you give away or pay foreign nations to take. It does not include the goods on which you pay a subsidy to sell it, not when you buy it at the American support price and sell it at the world price or below like Mr. Benson has to do to get rid of his agricultural products.
And Mr. Benson is very perturbed because our goods go into these countries below the cost of production of the countries that have been furnishing these markets and then they get mad. But we call it foreign trade.
Now it went to 10.9 percent in 1919, 12.9 percent in 1921, and started down again, but ran from 5.8 to 6.29 percent from 1927 to 1942.
Let's take it to 1939, the year before the war started. It was 7.5 percent then. Of course, in the war years it immediately began to drop down. There was practically no foreign trade. It began to pick up again in 1945 when it was 7.3 percent, and so on down.
In 1955 it was 5.8. It was 6.3 in 1955. Mr. Chairman, I ask permission to insert this table in the record and to complete the table and any other record that is necessary for this testimony.
Senator Anderson. That permission will be granted.
(The tables referred to are as follows:)
United Slates production of movable goods, proportion exported, and foreign aid,
selected years 1909-57
[Millions of dollars unless otherwise Indicated]
1 Covers changes in both long- and short-term claims of the U. S. Government on foreign countries.
3 Not available. (Prior to 1940, estimates of production of movable goods have been prepared only for years covered by a Census of Manufactures.)
1 Not available. (See note 2.)
'Less than $50,000.
'Military aid shipments under the war and postwar lend-lease and Greek-Turkish aid programs arc Included in col. 5.
• Excluding United States subscriptions of $323 million in 1946 and $3,062 million In 1947 to capital of International Bank and Monetary Fund.
Prepared from basic data of the Department of Commerce, June 1958.
The above chart was prepared in an effort to obtain an accurate picture of what portion of our movable goods is being shipped abroad through the normal processes of international trade and without the benefit of subsidies, grants, gifts, and credits extended to the countries receiving American products at the expense of the American taxpayer. This objective has not been completely accomplished, nor, in the absence of any Government central authority collecting and collating the contributions, loans, barter deals, special donations and exchanges of goods for foreign currencies made to or with foreign countries by our numerous and various Government agencies at the expense of the American taxpayer, does it appear that a true picture can be given.
For example, exports of farm products under the barter program authorized in title III of Public Law 480 are included in column 2, showing total exports, but nowhere appear in column 5 or 6 listing, respectively, grants other than military aid and Government loans. In 1957 more than $400 million worth of farm products were exported under the barter program. In 1956 barter "sales" totaled $299 million and the year previously $125 million.
In 1957, according to Department of Agriculture statistics, $1,279 million in farm products were exchanged for foreign currencies, and the year previously $783 million. Foreign currency sales are presumedly included in column 6 of the Department of Commerce table, but the totals in that table for the years 1957 and 1956 are only $961 million and $626 million, respectively.
Of the $4.7 billion in agricultural exports last year, $1.9 "billion moved under Government-financed programs other than CCC credit sales, or in other words were not sold for dollars. Dollar exports totaled $2.8 billion, but of this $1.1 billion involved subsidies in which the producer was reimbursed by the Government under the CCC program and the product (hen made available for export through commercial channels at world prices considerably below the domestic price. These sales, however meritorious the program may be from the standpoint of reducing the agricultural surplus, cannot be considered normal transactions in our commercial foreign trade. Yet the full amount is included in the export total, and nowhere reflected in column 5, 6, or 7.
Each of these taxpayer-financed programs, if accurate figures could be obtained, would reduce the total value of exports actually sold abroad under conditions of normal commercial trade, and the percentages of our movable goods which are exported through normal commercial channels within the classical concept of international trade.
The showing that $20,630 million of American products, military or otherwise, were exported during 1957 presents a distorted picture, not only of our foreign trade but also of our economy. Thus, if half of our movable product were shipped abroad as a gift, or bartered for foreign goods we did not want or need, or exchanged for foreign currencies we cannot use, the administration could boast that our exports had increased to more than $100 billion and that were now exporting 50 percent of our entire movable product. This would not reflect, however, any increased prosperity for the United States; it would reflect disastrous losses to our economy.
The 1934 Trade Agreements Act has not increased the proportion of our national product sold abroad for dollars; it has decreased that proportion. Yet the 1934 act was sold to Congress and the public partially on the claim that it would increase the share of our national production exported to foreign countries. To even attempt to move a comparable share of our national product into foreign countries, it has been necessary since World War II, to give or loan $75 billion to those countries, thus paying for the goods they buy with our own dollars, and to further create devious programs designed to permit them to buy our goods with worthless foreign currencies or to "pay" for them with their own products of which they have a surplus or to which they attach none or little value.
As may be seen from the chart above, incomplete as it is, from $3.4 billion to $5.8 billion of our export trade each year since the end of World War II has been fictitious from any commercial standpoint and actually financed in its entirety by the American taxpayer.
Secretary Weeks. May I inquire what those tables are, Senator?
Senator Malone. I want you to examine this table.
Secretary Weeks. These tables were furnished to you by the Department?
Senator Malone. Your Department furnished some of the information. However, it is so difficult to get any information from your Department on this subject that we have to dig it out the hard way.
I am going to make a statement to you that is contrary to all the propaganda spread over the United States by your Department and the State Department. I have never seen so much propaganda of it on anything. The Atlantic seaboard papers have an editorial at least three times a week on it.
If you subtract the money we give foreign nations and we have given them $70 billion since World War II, we have underwritten private investments in foreign countries against certain losses, and so on, the Import-Export Bank is loaning money at a very low rate of interest to these nations to build plants to compete with us. You and I can continue to study the foreign expense and with a little more promptness on the part of your Department we could come to a conclusion.
When you subtract all these giveaway items, cash and subsidies arrive at an amount of profitable foreign trade even less percenta| our exportable goods that this Nation enjoyed in 1934 when the act first passed. In this committee (the two committees of which I a member cover a pretty wide field, I am the ranking Republ member of the Interior and Insular Affairs Committee and N on this side of table here), there was much talk about the s yesterday. I think the sugar bill has worked very well, The gress of the United States can examine any product they can giving it special consideration, could they not?
Secretary Weeks. Yes, sir.
Senator Malone. And in this division or allocation of the pro tion of sugar to foreign nations for import, after we allocate amount of cane sugar and the amount of beet sugar to the pa of the United States and the amount of cane sugar to Hawaii Puerto Rico, then to the Philippines, the foreign nations iiicL Cuba and Peru, are allocated the remainder of pur consumption.
We consume more sugar than we produce in the United SU The State Department was adamant that we retain for Cuba 93.5 percent of the quota allotted to foreign countries, that C produce the sugar and sell to us.
I have been in Peru as well as all of the nations of the Wes Hemisphere. I knew that 1 percent would mean a lot, say, to P but the State Department remained adamant that the amount i cated to Cuba be not reduced. And I asked, "Why?"
They said, "Because Cuba buys our wheat."
interesting. What price do they
for the wheat, our American support price or the world pri< There was a little hesitation and they said, "The world price."
Then I said, "Now, that is very interesting. What do we them for then- sugar, our American support price or the world p where they sell the remainder of their sugar and make consider profit?"
There was more hesitation and then they said, "We pay the sup price."
And then and there, Mr. Secretary, I computed the differem it is in the record, every 100 pounds of wheat we sell to Cuba ci the taxpayers of America $1.35—and you call it foreign trade.
If all such items are subtracted, you get the figures in this t, and you come right back to the 5 to 7^ percent profitable for trade, percent exported of our exportable goods that you had in 1 when you passed the act. Did you know that?
Secretary Weeks. I think there are two sides to that question.
Senator Malone. I know there are two sides, and I have bi your side, where you call everything that you pay to export fon trade. If you want to go into it again, go right ahead.
I have read your side in every paper east of the AUeghenies. west of the Mississippi sometimes they publish it with amazenn I say to you, Mr. Secretary, if you had had this law so-called recipn trade law 50 years ago, there would be nothing west of the Mississ and not very much east of the Potomac and the Hudson Riv There is nothing that can survive there under this act. And if can just name some industry that can survive without a subs I will be very thankfid to you, because many of my people would to find a new business that can survive in competition against low-wage foreign competitor.