Examining that provision we find that

1. The reciprocity was restricted to certain countries, producing and exporting certain products.

2. The country either did or did not impose duties or other exactions on products of the United States which the United States, not the other country, considered unequal and unreasonable.

3. Whether the duties or other exactions of foreign countries were unreasonable remained the sole determination of the United States.

4. Specific penalty duties were to be applied to certain imports, not only when and if those countries restricted entry of American goods by unequal and unreasonable duties, but when they did so by any other devices such as prohibitions, quotas, or discriminatory regulations.

5. When a foreign country did impose unequal and unreasonable restrictions against American products, the President was under specific directions from the Congress as to what to do. Congress said it "shall be the duty" of the President to suspend the concessions on certain products given to the foreign country.

6. When the concessions were suspended the President was required by the Tariff Act to impose specific duties on imports of those products from those countries.

The following countries agreed to remove unequal and unreasonable restrictions on entry of American products for the assurance from the United States that coffee, tea, hides, sugar, and molasses from their countries or possessions might continue to enter the United States duty free:

Brazil, Dominican Republic, Guatemala, Honduras, Nicaragua, Salvador, Spain for Cuba and Puerto Rico, Great Britain for the British West Indies, Germany, and Austria-Hungary. Some agreed to extend most-favored-nation treatment to all imports from America; others to grant highly important concessions.

Venezuela, Colombia, and Haiti refused to remove unreasonable restrictions on United States products and the penalty duties specified by Congress were imposed on the enumerated products shipped to the United States by them.

Under a new administration in 1894 a new Tariff Act was passed, taking the teeth out of the old act, lowering duties without requiring any compensatory action on the part of foreign countries benefiting from the lowered duties, and and removing the reciprocity provision of the McKinley Act.

The purpose of the 1894 act, like the purpose of the 1934 act 40 years later, was to increase imports by lowering tariffs without regard to any restrictive barriers imposed against American products by foreign countries, with the illusory hope that such generosity would open the markets of the world to our own products.

The administration that passed the 1894 act was ill-fated; dogged by depression, and thrown out of office in the November 1896 elections. William McKinley was elected President.

McKinley called a special session of Congress immediately. In a message to Congress he asked that

"Duties be so levied upon foreign products as to preserve the home market so far as possible to our own producers; to revive and increase manufactures; to relieve and encourage agriculture; to increase our domestic and foreign commerce; to aid and develop mining and building; and to render to labor in every field of useful occupation the liberal wages and adequate rewards to which skill and industry are justly entitled."

Chairman Dingley, of the Ways and Means Committee, introduced a bill to provide revenue and encourage the industries of the United States. Protection was reestablished. Imports decreased 20 percent. Exports increased 40 percent. The Dingley Act, like the McKinley Act of 1897, contained a reciprocity provision, but, also like the McKinley Act, it retained full legislative power in Congress, and did not delegate it as was done in the 1934 Trade Agreements Act and each of the successive extension acts.

Again the President was empowered to impose specific penalty duties on certain enumerated products in return for definite concessions by other countries. The President was empowered to reduce rates on a small number of other specified products to rates of duty specified by Congress in return for definite concessions by foreign countries. And he was permitted to conclude reciprocity treaties with foreign countries and reduce rates as much as 20 percent in return for equivalent reductions, subject to approval or rejection by both the House and Senate.

The 1934 Trade Agreements Act does not require that reductions in duties by the President be submitted to anyone or approved by anyone, or that they be made for any specific purpose or with any specific country. In other words the

full legislative authority of Congress is turned over to the President in these tariff actions which is contrary to the Constitution.

Seven agreements were negotiated under the 20-percent clause, properly submitted to the Senate as treaties, and rejected by the Senate. Nine were made under the provision specifying reduced rates on certain enumerated products in return for definite favorable treatment of American products by foreign nations. In 1902 a reciprocity convention was negotiated with Cuba, granting her a preferential rate of 20 percent in return for Cuba granting a preferential rate to American products reducing duties 20 to 40 percent. The Senate ratified it. In 1909 under a Democrat administration all reciprocity agreements were terminated except the one with Cuba, and the Tariff Act provided maximum and minimum rates. Maximum rates were to be imposed on countries which discriminated against American products. Germany, France, and a number of other countries did discriminate against American products, but the President never imposed the maximum rates on products of any nation.

In 1911 a reciprocity treaty was negotiated with Canada. The United States Senate ratified it, but the Canadian Parliament rejected it. The 1913 Tariff Act contained reciprocity provisions but required that any negotiation must be submitted to Congress for ratification or rejection.

This is the reciprocal trade legislation that administration spokesmen have been citing as precedent for the 1934 Trade Agreements Act. None of it gave the President blanket authority to remake the tariff, the economy of the United States, or the industrial map of America.

The reciprocity in the Tariff acts previous to the 1934 Trade Agreements Act was for the purpose of protecting American industries and markets. The purpose of the 1934 Trade Agreements Act is to destroy American industries, jobs, and markets.

All previous reciprocity provisions required concessions by foreign countries in the American interest, and required that they honor their commitments.

The 1934 Trade Agreements Act provides for and requires concessions by the United States in the interest of foreign countries.

What happens when Congress refuses to continue and extend the 1934 Trade Agreements Act and permits it to expire?

First we will go back to the 1930 Tariff Act under which the Tariff Commission, first created in 1916 as an agency of Congress, adjusts tariffs on the basis of fair and reasonable competition.

The 1930 act provided for a flexible tariff, as had also been provided in the Tariff Act of 1922.

The 1930 act required the Tariff Commission to ascertain costs of production in the principal growing, producing, or manufacturing centers of the United States, costs of production of such articles in foreign countries exporting these articles to the United States and to "ascertain all other facts which will show the differences in or which affect competition between articles of the United States and imported articles in the principal markets of the United States."

Investigations of comparative costs here and abroad were to be made upon the request of the President, the Congress, its own motion, or, when in the judgment of the Commission there is good and sufficient reason, upon the application of any interested party.

Public notice was to be given and hearings were to be held.

When, following such investigation, the Commission found that the duties fixed by Congress and by statute did not equalize the differences in the costs of production of the domestic article and the like or similar foreign article produced in the principal competing country, the Commission was to report the increases or decreases in rates of duty necessary to equalize such differences. It could do this as and when economic conditions changed, at any time, thus affording the nation a completely flexible tariff system.

A specific criteria was set up for determining and comparing domestic and foreign production costs which included labor, material, and packing costs and other direct charges involved in manufacture.

That is the practical and logical system that this country will revert to when the 1934 Trade Agreements Act expires or is repealed. It is a system fair to domestic industry, to labor and to investors, and fair also to importers and to foreign producers because the tariff would no more than make up the difference between domestic and foreign costs. Thus it would give American products and foreign products equal access to our markets but no advantage.

The 1934 Trade Agreements Act gives all the advantages to the foreign producer; none to the American wage-earner, investor, industry, or manu

facturer. It would give American enterprise parity with the foreign producer in our own American market.

This parity would not immediately be achieved, however, on expiration of the the act, because during the life of the act the State Department has negotiated many trade treaties, called agreements, for the purpose of evading consideration by the Senate as provided in the Constitution, many of them to America's disadvantage.

Bylateral agreements would terminate 6 months after the United States gave notice to the foreign country which is a party to the agreement.

Any country which is a party to the international creation known as GATT may withdraw from it within 60 days after notifying the Secretary General of the United Nations.

Therefore, as the United States Tariff Commission has informed me the United States could eliminate all trade agreement obligations, and do so within 2 to 6 months, restoring us to the rational and equitable system of adjusting tariffs to foreign competition, and safeguarding our employment our investments, our security, and our economy.

Senator ANDERSON. Mr. Secretary. Do you mind, Senator Carlson, if I ask a few questions?

Senator CARLSON. I would be most embarrassed if you did not, sir. Senator ANDERSON. I will try not to be too long, Mr. Secretary. The subject came up the other day of what happens in case we terminate a multilateral agreement or one country drops out from a multilateral agreement.

The case came up of Mexico where we continued to give Mexico all the protection of the act and Mexico in turn gives us no protection. Isn't that one of the perils of renewing this?

Countries can drop out, but under the language which was read to us the other day subject to the provisions of section 5, I am quoting from section 4, Mr. Secretary, which is at the bottom of page 3 of a little brochure on trade legislation:

Subject to the provisions of section 5 of the Trade Agreements Extension Act of 1951 (19 U. S. C., section 1362), duties and other import restrictions proclaimed pursuant to this section shall apply to articles the growth, produce, or manufacture of all foreign countries, whether imported directly or indirectly: Provided, That the President shall, as soon as practicable, suspend the application to articles the growth, produce, or manufacture of any country because of its discriminatory treatment of American commerce or because of other acts (including the operations of international cartels) or policies which in his opinion tend to defeat the purpose of this section.

Now, didn't Mexico get the benefit of certain reductions when it came in, and then dropped out and refused to give us the protection even though we continued to give them protection?

Secretary DULLES. I do not recall what we did, Senator, but the act provides, going on to read the section from which you quotedSenator ANDERSON. Yes.

Secretary DULLES (reading):

Provided that the President shall, as soon as practicable, suspend the application to articles of growth, produce, or manufacture of any country because of its discriminatory treatment of American commerce or because of other acts (including the operations of international cartels), or policies which in his opinion tend to defeat the purpose of this section.

In other words, if after termination of the trade agreement, Mexico takes discriminatory action against the United States, the act requires the President, as soon as practicable to suspend the application to its products of this most-favored-nation treatment.

Senator ANDERSON. I assure you, Mr. Secretary, I was going to read that section later because I was going to read it in connection with lead and zinc.

Secretary DULLES. Yes.

Senator ANDERSON. But we did make this trade agreement with Mexico. We did reduce the duty on certain items such as leather, shoes, and baskets, bags, china, earthenware, and ties and many other things, and then we raised the duties to their former level when Mexico withdrew from the agreement. Then, because of this provision, we again reduced the duties to Mexico so they received the full benefit and did not have any of the obligations.

Would you look with any favor on the statement that if they withdrew from the agreement they should not have any of the benefits of the agreement if they did not give us any of the benefits?

Secretary DULLES. Well, I would agree if they withdrew from the agreement and following that, in fact, took discriminatory action against us, that then we should take corresponding action against them.

Senator ANDERSON. We have had, as you know, many arguments over agricultural products, the tomato situation, the cotton situationSecretary DULLES. Yes.

Senator ANDERSON. We have never taken any action with regard to anything they have done as discrimination, have we, even though they did drop out from under the agreement? We have never found anything that we regarded as discriminatory under the second clause there?

Secretary DULLES. I am not aware of the fact that we did.

Senator ANDERSON. Now, lead was originally in the agreement with Mexico, and when Mexico canceled the agreement the duty on lead was restored to its original level. Then later, because of this general agreement on tariffs, the duty on lead was again reduced with Mexico so that it has the benefit of that reduction.

Has the President done anything in furtherance of the second clause which you read?

Secretary ĎULLES. I do not think so; no.

Senator ANDERSON. As you know-I will now come to zinc. Zinc was in the original agreement with Mexico. But just at the time Mexico was canceling zinc, we were negotiating with other countries. So although Mexico canceled out on us, the low duty on zinc became effective for Mexico.

Secretary DULLES. I believe so.

Senator ANDERSON. You are fully familiar with the fact Mexico is a large producer of lead and a large shipper into this country.

Now when the President was asked to do something about this, the Tariff Commission, I believe, found that there was some danger to our domestic industry on lead and zinc, and the President took action the other day, which Secretary Weeks sent up to us on June 19. His report included this letter from the President.

I do not know whether you have a copy of it there, I will hand you a copy. He said:

Under section 7 of the Trade Agreements Extension Act of 1951, as amended, the United States Tariff Commission reported to me on April 24, 1958, its finding that the domestic producers of lead and zinc were experiencing serious injury.

The date of April 24, 1958, is significant because he must act within 60 days; is that not right?

Secretary DULLES. Yes.

Senator ANDERSON. So he would have to act by June 24.

The Commission was evenly divided on its recommendation for remedial action. Three of the Commissioners

I might just add parenthetically that is not a new device on the part of the Tariff Commission. The potash situation got hot and so they found three on each side and every time there is a close fight somehow the Tariff Commission ends up 3 and 3, which is diplomacy at its highest level.

Three of the Commissioners recommended maximum increases in tariffs with quantitative limitations. The other three Commissioners recommended an increase in tariffs to the 1930 rates without quantitative limitations of any kind. I am suspending my consideration of these recommendations at this time. Will you tell me under what language the President may suspend instead of decide?

Secretary DULLES. His authority to suspend?

Senator ANDERSON. Yes.

Secretary DULLES. Well, he is not required to accept the recommendation.

Senator ANDERSON. No, I did not say he was.

Secretary DULLES. Yes.

Senator ANDERSON. I do not say that he cannot just ignore it.
The 1951 act as amended states:

ACTION BY THE PRESIDENT

Upon receipt of the Tariff Commission's report of its investigation and hearings the President may make such adjustment in the rates of duty, impose such quotas or make such other modifications as are found and reported by the Commission to be necessary to prevent or remedy serious injury to the respective domestic industry. If the President does not take such action within 60 days he shall immediately submit a report to the Committee on Ways and Means of the House and to the Committee on Finance of the Senate, stating why he has not made such adjustments or modifications or imposed such quotas.

Now the 60 days will run out June 24. What I am trying to get at is this: You do believe a letter saying "I am suspending action," complies with that provision?

Secretary DULLES. If it goes on as this letter does, Senator, to meet the requirement that he shall immediately submit a report. Senator ANDERSON. All right.

Secretary DULLES. Stating why he has not made it.

Senator ANDERSON. All right. Go on. What did he say?

Secretary DULLES. The final paragraph of the President's letter says "I am

Senator ANDERSON. I am not trying to avoid reading these, you understand.

Secretary DULLES. Yes. The letter states that the President is not taking any present action because he is awaiting the action of the Congress on his proposed minerals stabilization plan which was submitted by the Secretary of Interior with the President's approval and he goes on to say:

This plan offers a more effective approach to the problems of the domestic lead and zinc industries

and so forth, so I think the President's letter whereby in effectSenator ANDERSON. Which plan did he refer to, do you suppose? Secretary DULLES. Which plan?