and the latest know-how. They take 2 to 5 or 7 percent, if it is necessary, of trained workingmen from the industry here to these countries, and they train the other workingmen who get 50 cents a day to $2.50 or $3 a day. And with only a few exceptions, those workingmen, generally speaking, are just as efficient as anybody else, and the wages they pay them oftentimes do not equal the social security and industrial insurance paid to our workingmen in this country. Is that correct? Mr. BLOUGH. Part of what you say, I know, yes. Senator MALONE. Well, you will know the rest of it if you will do a little studying. It ought to penetrate even Columbia. And I am sure if you consult these engineers that I know up there, it will penetrate pretty quick. They do not like it, either. I am very fond of that engineering school in Columbia, and I learned a lot about Columbia. I learned there was a dividing line there between theory and practicality. You have one of the finest engineers there in nuclear energy. I am going to have him out at the University of Nevada to make a talk if we can get him. We have just got a subcritical nuclear reactor we have been working for some time to get. Now these are the latest in the world, these power reactors. Do you suppose that the reactor 50 miles out of Moscow lacks any of the things that we have in a reactor in the United States? Mr. BLOUGH. I haven't the slightest idea. Senator MALONE. Well, I do. I was there and looked at it. I also met two of the Russian engineers, and met for the first time with 2 or 3 of them, with the same number of American scientists, in Geneva in 1955 just by accident. I think I was the only extra man or one not officially in the conference in that glass cage with them when they started to talk for the first time. Then I went to Moscow and went out to this plant and met one of the Russian scientists there that I made the acquaintance of in Geneva. So this old stuff that is being put out by college professors all over the country, very liberally up until the last few years (we have stopped most of it, I am glad to say) that with our know-how and our machinery we can compete with anybody is just that, and you would do yourself a favor and Columbia University a favor if you would study the background of industry in the world today as it is now practiced. Mr. BLOUGH. I have been studying it, Senator. Senator MALONE. Then your testimony did not show it. Mr. BLOUGH. That is regrettable. Senator MALONE. I am sorry to take this time, because if your testimony had reflected that this is all available with the money we are giving these nations, then I would not have asked you a question on that particular thing. Now, that takes out everything that you have mentioned here except the raw materials and the workingmen. When you finally come down to this thing you do not instigate an industry in another nation or in this Nation when the raw materials are not available and the markets are not available. Their markets are not available at home; they have to take part of ours because they are already producing in a lot of instances more than they can consume at home, and every nation in Europe, almost without exception, has to sell something to somebody else in order to maintain the standard of living to which they would like to become accustomed. There is no market but ours, and that is what we are dividing under the act for which you have come all this way to testify-and we are happy to have you-to say that the churches of America are for dividing the United States market with the other nations in the world. Now, to get to the raw material. Where do we have an iron industry? I went to Bolivar Mountain in Venezuela. It is an inverted mine. It is something like the copper pits, only it is a hole in the ground, and you see the steam shovels going around the top of this mountain. It is all iron, around 60 percent, with low phosphorus, a terrific thing. So they have an iron industry. Then the largest manganese deposit that I know of is on the Amazon River. I sent my engineers in there in 1954. It took them 14 days to get in and out. But now they have airports. On the Amazon they have deepened the channel, made ports there, and they are shipping the manganese here and shipping the iron ore there. They are going to have an iron industry over there, and there is not a piece of machinery on the job that is not as good or better than our plants, because they are later plants. Do you believe that? Mr. BLOUGH. That I believe. Senator MALONE. Why, of course. So when you finally came down to it and I heard the acting chairman of our committee asking this question a while ago-do you know what the transportation costs are? It is very low water transportation. There is no difference in the cost of an article laid down in New York port or San Francisco port except the low water transportation. And then if there is any difference-such as in South Africa, where it would take 4 or 5 of those colored boys to make 1 good Irishman working, you can pay them the going wage and still have $20 left. Is that not what you call comparative labor costs? Is that not what we are talking about? Mr. BLOUGH. You are talking about comparative costs, really. An executive may be a better secretary than his secretary Senator MALONE. What kind of an executive do you think they have on Bolivar Mountain? Mr. BLOUGH. But he can afford to hire a secretary and pay her less, even though he is better than she is. And if we can hire other countries to do things for us cheaper than we can do them ourselves, we certainly have a substantial advantage in that. Senator MALONE. Now I think you and I are going to do business. You are, then, for producing an article, whether it is oil, iron ore, cotton, or anything else, in any country in the world where, with our machinery and know-how and using the lower cost labor, you can bring it in here for our consumers at a cheaper price; are you not? Don't tell me you are not, because then we would have to get into this thing all over. Mr. BLOUGH. I would say that I am not, in the first place, a free trader for various reasons. Senator MALONE. I did not ask you that. Will you answer my question? Mr. BLOUGH. Yes; I am going to answer your question, Senator. Senator MALONE. All right. Mr. BLOUGH. I am not a free trader. Senator MALONE. I did not ask you that. Answer my question. Mr. BLOUGH. And, therefore, I could not logically give a firmly "yes" answer, because a man who would give a firmly "yes" answer to your question would have to be a free trader and be in favor of no tariffs. Senator MALONE. Give me a specific answer in words of one syllable. Mr. BLOUGH. I would say my answer to your question is this: That if goods can be produced comparatively more cheaply in other countries than in the United States, it is to our advantage economically and industrially, as a general principle, although not in every specific case, for us to buy those goods, because we will be selling them goods, too. Our consumers will get goods cheaper, their consumers will get goods cheaper, their income will rise. As their income rises they will buy more goods abroad, and we will get larger markets as their economies thrive. Senator MALONE. It sounds like Mr. Hauge talking. Do you know him? Mr. BLOUGH. I know Mr. Hauge. I regard him very highly. Senator MALONE. I do, too. I think he is one of the finest men I know; and knows less about what he is doing than anybody I know. We will have him here I hope. Now, what you have just said is that consumers of the United States are entitled to the lowest costs that they can get; if anywhere in the world we can find a place where we can buy the consumer goods cheaper than we could make them, we should allow them to come in and the consumers then benefit from that operation. Mr. BLOUGH. With certain exceptions; yes. Senator MALONE. What are those exceptions? Mr. BLOUGH. Well, this is going to be a long story, Senator. Senator MALONE. You go right ahead. I am sorry that we do not seem to have much time here, but it is important to know what you are driving at. Mr. BLOUGH. I will say the exception Senator MALONE. It is also important, I want to say to you, that the people you represent know what you have said here. Mr. BLOUGH. Of course, I want to make it very clear, Senator, that you are asking me now not on behalf of the National Council of Churches, but as an individual. Senator MALONE. No; in some way or another there should have been some evidence put before these fine people Mr. BLOUGH. This evidence was before them, Senator. Senator MALONE. On both sides of the question. So when I ask you these questions, you are answering for these churches. Mr. BLOUGH. No, sir; we must make it very clear that when you are asking me these technical questions, I cannot Senator MALONE. These are not technical questions, but just horsesense questions, to find out how you arrived at this statement you made. Mr. BLOUGH. I did not arrive at this statement for the national council. I read part of the statement for the national council. Senator MALONE. Their resolution. But what did they base it on? Mr. BLOUGH. They based it on a great deal of discussion by a large number of laymen and ministers to whom were presented the materials that you have been mentioning and that I have been mentioning. Senator MALONE. Did you recommend these resolutions? Mr. BLOUGH. I was not personally a member of this particular group. Senator MALONE. Who were some of the ones who were members? Technicians and economists? Could you, just for the record, let us know who is advising these good folks? Mr. BLOUGH. Well, I will have to give you-I will have to give you only a limited list of names. Senator MALONE. That is all right. Maybe you can supplement it. Mr. BLOUGH. I can furnish you a complete list, if you would like. Senator MALONE. That is what I would like. Senator LONG. I would like to interrupt you for just a moment. The committee agreed that we would limit each Senator to 20 minutes. Senator MALONE. I was not here when you made that agreement. Senator LONG. I announced we would recess for lunch and return at 2:30. If you would like to, I suggest that you preside and conclude the examination of this witness. Senator MALONE. That suits me fine. Senator LONG. Let me ask if Mrs. Oslund has returned to the room. Is she here? (No response.) Senator LONG. She is not. When the committee meets at 2:30, we will hear the testimony of Mr. Reuben Johnson. Senator MALONE. Following this witness. Senator LONG. In that order. I would assume, Senator Malone, you would have concluded your questioning of this witness Senator MALONE. Yes. Senator LONG. By the time we meet. Is Mr. George Dietz here? I have the list of the order in which the witnesses will be called, and they may consult us. Senator MALONE (presiding). What was the last question I had propounded? (Question read.) Senator MALONE. You will complete the list of names so far as you can today, and then supplement it for the committee. I would appreciate that. Send me a copy of your letter to the chairman, if you will. Mr. BLOUGH. I would be very glad to, Senator. (The information referred to follows:) A LIST OF MEMBERS OF the DepartmENT OF INTERNATIONAL AFFAIRS' GENERAL COMMITTEE, NATIONAL COUNCIL OF THE CHURCHES OF CHRIST IN THE UNITED STATES OF AMERICA Chairman: Hon. Ernest A. Gross Vice Chairman: Dr. Ernest S. Griffith Recording Secretary: Rev. Edward C. Boynton Executive Director: Dr. Kenneth L. Maxwell Arkush, Mr. Ralph M. Blake, Rev. Eugene Carson Bonell, Rev. Harold C. Brawley, Dr. James P. Calkins, Rev. Charles L. Hoffman, Rev. J. E. Jensen, Rev. Alfred Kaebnick, Rev. H. W. Koch, Rev. Henry C. Land, Rev. John S. Lloyd, Rev. Ralph Waldo Moore, Rev. Glen W. Nichols, Bishop D. Ward Nolde, Rev. O. Frederick Oxnam, Bishop G. Bromley Parlin, Mr. Charles C. Stevens, Miss Thelma Spaugh, Rev. R. O. Watermulder, Rev. David Bates, Dr. M. Searle Bennett, Rev. John C. Boynton, Rev. Edward C. Case, Hon. Clifford P. Case, Rev. Harold C. Chamberlin, Mr. Waldo Compton, Dr. Wilson Cordier, Hon. Andrew Culbreth, Mr. Harry W. Darken, Rev. Arthur H. Dudley, Mr. Tilford E. Empie, Rev. Paul C. Fangmeier, Rev. Robert A. Gezork, Dr. Herbert E. Graham, Dr. Frank P. Gross, Hon. Ernest A. Griffith, Dr. Ernest S. Handy, Dr. Robert High, Mr. Stanley Hotz, Dr. Alfred Jackson, Mr. Elmore Kooy, Rev. Vernon Lehman, Prof. Paul L. Levering, Mr. Samuel R. Loos, Dr. A. William McCabe, Rev. Donald A. Morehouse, Mr. Clifford P. Muelder, Dr. Walter G. Poling, Rev. Paul N. Rennie, Mr. Wesley F. Robinson, Dr. Leland Rex Row, Rev. W. Harold Ruff, Rev. G. Elson Sargent, Mr. Noel Sockman, Rev. Ralph Stoody, Dr. Ralph Stone, Mr. Donald C. Swisher, Mr. Elwood D. Thorp, Prof. Willard L. Voorhis, Mr. H. Jerry Waymack, Mr. William W. Wood, Mr. Richard R. Wyker, Mrs. James D. Burr, Rev. Hugh Chamberlin |