discussed or will discuss these aspects of the trade program. I suggest that perhaps there has been too much emphasis put on the foreign aspects of our trade program, the help it provides abroad, the alliances that it helps cement, and the world leadership it provides us. These are vital, of course, but at least equally vital is the immediate selfish economic aspects of trade right here at home. Trade is not charity, it is not foreign aid, it is not in any sense a giveaway. Trade is business, it is buying and selling, which means it is jobs and profits and markets and sales. It seems to me that the Nation will obviously benefit from a trade bill that encourages such business more than does the measure now pending before this committee.

Expansion of American business is impeded by section 3 (a) (1) of this bill, which permits tariff rates to be increased by as much as 700 percent, to levels half again as high as the Smoot-Hawley rates of 1930. No American industrial consumer or distributor could feel safe in establishing a source of supply subject to such punitive taxes. Expansion of American business is impeded by section 4 (b) of the bill, which authorizes long and expensive escape-clause investigations even where the competing domestic industry does not request them. If the domestic industry, which is directly affected and is in possession of the facts, does not complain, there seems to be no warrant for this additional roadblock.

Expansion of American business is impeded by section 5 (a) of the bill, which permits escape-clause investigations to be instituted by "any organization or group of employees," even where the competing industry does not complain of import competition. Here again, if the domestic industry does not complain, there seems little warrant for launching such an investigation.

Expansion of American business is impeded by section 5 (c) of the bill, which authorizes the imposition of prohibitive duties up to 50 percent on articles Congress has said shall be duty free. The obvious purpose of such an authorization is not to encourage more business, but to create new roadblocks in established channels of commerce.

Nor is expansion of American business helped by section 6 of the bill, which gives the Congress a veto over the Executive determination on tariff rates. This provides a new element of uncertainty to the flow of commerce to and from American factories.

While the pending bill, minus these listed sections, will not encourage any major expansion of United States overseas business, it would at least not discourage whatever business expansion may be possible. On the other hand, a more restrictive bill would not help the American economy, but would seriously injure it.

Import restrictions on copper and copper products, for example, would not help our mining industry. The current temporary problems in copper are worldwide and their solution does not lie in national import restrictions. The plight of the American miner is further compounded by the sharp decline in United States industrial production, particularly in American exporting industries, and a further decline by the loss of export markets would hurt, not help, both the manufacturers and the miners who supply them.

Another effect of import restrictions is typified in a recent report from Buenos Aires, dealing with increasing Argentine purchases of coal. Argentine industrialists had been buying some Polish coal at $28 a ton and some German coal at $22.50. Currently they are buy

ing Australian coal at $21.80 a ton. United States coal delivered Buenos Aires is about $16.50 a ton, and Argentina would like nothing better than to fill its requirements of over 1 million tons with United States coal, and here I quote the language of the report, but "shortages of United States currency makes it imperative to buy elsewhere."

There are many other specific examples of increased United States business and jobs that could be encouraged by a more liberal extension of the trade program, but in the interest of time I shall save these for the written memorandum.

For now, I should like only to urge that H. R. 12591 not be made any more restrictive and that if it is amended at all it should be in the direction of more trade, more business, for the American economy. Thank you, Mr. Chairman.

Senator CARLSON. Mr. Barnhard, at the beginning of your statement you asked permission to file a supplemental statement. I assume that will not be so lengthy that it will be a volume in itself, and that it would be confined to the subject under discussion?

Mr. BARNHARD. Yes, sir; it would be. And I am sure it will not be more than 6 or 8 pages. I just want an opportunity to relate some of the specific problems of copper and brass imports to pending legislation.

Senator CARLSON. The statement will be published in full in the record if received in adequate time.

Mr. BARNHARD. Thank you, sir.

(Mr. Barnhard had not submitted a statement at the time the hearings were printed.)

Senator CARLSON. Senator Malone?

Senator MALONE. Mr. Barnhard, I notice you are from the law firm of Chapman, Wolfsohn & Friedman, counsel for the American Importers of Brass & Copper Mill Products. Where do you live? Mr. BARNHARD. Here in Washington.

Senator MALONE. Where is the business located of these people? Mr. BARNHARD. The members of the association, sir, or the members of the law firm?

Senator MALONE. Members of the association that hire you, where are they located?

Mr. BARNHARD. The members of the association consist of 17 major importers of copper and brass mill products, located on both the east and the west coasts, sir; centered primarily in New York and Los Angeles.

Senator MALONE. Would you mind submitting the names of these importers for the record?

Mr. BARNHARD. I will be happy to submit that.
Senator MALONE. Do you have them with you?
Mr. BARNHARD. No, I don't have them with me.
(The information to be submitted is as follows:)

MEMBERS OF AMERICAN IMPORTERS OF BRASS & COPPER MILL PRODUCTS, Inc.

The Alcobra Co., Los Angeles, Calif.

Atlantic Aluminum & Metal Distributors, Inc., Springfield, Mass.

Camarge Trading Co., Inc., Philadelphia, Pa.

Franconia Industries, Inc., New York, N. Y.

Norca Corp., New York, N. Y.

The Ore & Chemical Corp., New York, N. Y.
Ovingsteel, Inc., New York, N. Y.

Reynolds Fasteners, Inc., New York, N. Y.

S. Bernard Schwartz, New York, N. Y.

State metals division, Wiwoco Corp., New York, N. Y.
Ufinindo International Corp., New York, N. Y.

Vanderryn International, Inc., New York, N. Y.
David L. Wilkoff Co., Inc., New York, N. Y.

Senator MALONE. These people that you represent are importers of brass and copper?

Mr. BARNHARD. Brass and copper products, sir. They are not importers of raw copper. They are importers of products, manufactured or semimanufactured products, which contain copper or brass. Senator MALONE. From foreign nations?

Mr. BARNHARD. Yes, sir.

Senator MALONE. What do you find in general is the difference in the cost of these products, and name a few of the products, if you would like to, made abroad, and by the same type of manufacturer here. First, I presume that you import fabricated products that are also manufactured here?

Mr. BARNHARD. In most cases, yes; not in all cases.

Senator MALONE. Well, in most cases. Name a few of the products just to give us some kind of an idea of the range.

Mr. BARNHARD. Copper piping, brass tubing, brass and bronze sheets. These are typical products more of semimanufacture than of finished manufacture.

Senator MALONE. Do you manufacture small articles in brass and copper for sale here, I mean abroad, and import them for sale?

Mr. BARNHARD. Only a very small part of this is in finished articles which are offered for sale here. The great bulk of the imports represented here are semimanufactures which require further processing by American factories, or by American workmen.

Senator MALONE. What are some of the things, though, that you do manufacture in quantity and import?

Mr. BARNHARD. The leading ones, I suppose would be the copper water piping and brass tubing, as well as brass sheets.

Senator MALONE. Where are these products made, principally? Mr. BARNHARD. The great bulk of them in Germany, Sweden, some from the United Kingdom, Switzerland, some from Belgium, and a smaller percentage of total imports, although a very insignificant percentage of the imports of the members of this association, from Japan. I think total importations in this category from Japan are considerably less than 10 percent.

Senator MALONE. Are they increasing?

Mr. BARNHARD. They have been fairly stable, as I understand it, for the last year or so.

Senator MALONE. What are the differences in the wages in these countries that you have mentioned and in the United States-do you know?

Mr. BARNHARD. Excuse me before I answer that. May I add one more country which is a source of these imports? And that is Canada. Senator MALONE. That is Germany, Sweden, Japan, and Canada, and one other country.

Mr. BARNHARD. Belgium.

Senator MALONE. Do you have any idea what wages are in these countries?

Mr. BARNHARD. Yes, sir. I have with me the testimony that was submitted by Mr. Walter S. Guggenheim who is a director of the American Importers of Brass & Copper Mill Products, the testimony he submitted to the Ways and Means Committee which contained some details on that subject.

The wages in Western Europe in the industry which produces these copper and brass mill products range from about 60 cents to $1.10 an hour.

Senator MALONE. That is in Western Europe?

Mr. BARNHARD. Yes.

Senator MALONE. From a dollar and what?

Mr. BARNHARD. From 60 cents to $1.10 an hour.

Senator MALONE. Do you have any idea what countries are paying 60 cents and which ones are $1.10?

Mr. BARNHARD. The highest wage rate in this industry seems to be in Sweden.

Senator MALONE. What is that?

Mr. BARNHARD. That is in the area of $1.10. Belgium-
Senator MALONE. In this particular industry?

Mr. BARNHARD. In this particular industry, yes, sir.

Senator MALONE. Sweden is nearer in wages to around 75 to 90 cents an hour, but you might find that certain workers would get $1.10 an hour there.

Mr. BARNHARD. These were represented by Mr. Guggenheim and I think based on accurate information as the average for this particular industry.

Senator MALONE. Mr. Guggenheim was for imports?

Mr. BARNHARD. He is an importer, sir. He is vice president of two very substantial importing companies.

Senator MALONE. Importing companies?

Mr. BARNHARD. His companies are Van Derryn International Corp., and the Guggenheim International Corp. He is vice president of both of those companies.

Senator MALONE. What do you find the wages to be in Canada? Mr. BARNHARD. In Canada the wages appear to be about 10 to 15 percent below the United States wage level in this industry.

Senator MALONE. Canada runs around $1.50 to $1.65 an hour. You could possibly find some of the workingmen that would be paid more than that, but very seldom.

The wages in this country on this particular work, run somewhere around $2 to $2.25 an hour.

Mr. BARNHARD. The difference does not seem to be too far off, 10 percent, which would be the difference between $2 and $1.70.

Senator MALONE. Two dollars and eight cents is about as low as they get here, I guess. Still, whatever the difference is it does not matter much, if there is no equalization process. They have to meet the wages and the cost of doing business here and they would have to meet that foreign cost, or substantially decrease their output, would they not?

Mr. BARNHARD. They would, sir; except that there is no absence of equalization factor. There is a very substantial equalization factor which more than offsets the difference in wage.

Senator MALONE. What is it?

Mr. BARNHARD. A fairly careful estimate was made of the wage factor involved in the United States copper and brass mill product industry, and on the basis of information supplied by the Copper and Brass Research Association, the secretary of which organization will testify here next week, the average wage factor in United States copper and brass mill products is just under 7 cents a pound.

On the other hand, the extra costs which are unique to imports and do not have to be borne by United States producers in this industry, including freight from the foreign mills to the port, export packing, ocean freight, insurance, and duty, total about 6 cents a pound on these commodities, which means that if the European manufacturers of these products paid absolutely no wages at all they would enjoy a price advantage of no more than 1 cent a pound because of wage differential. These figures were made by members of the association based on information supplied by the domestic copper and brass research association.

Senator MALONE. They are made by importers?

Mr. BARNHARD. Oh, yes, sir.

Senator MALONE. Now then, let us assume that you are correct in all of your statements, you do realize that there is a difference. I will not argue with you to take the time of the committee on that part of it. The record will stand on that, the record that will be made by the committee.

You do realize that whenever there is a difference not equalized by a tariff or something, that the American producers, just as you said, have difficulty in meeting the competition?

Mr. BARNHARD. This is true of any competition. This is true of competition between a northern mill and a southern mill, too. Sir, I will accept that statement, yes.

Senator MALONE. I am glad you brought that up. In the United States of America we are very careful that as the Constitution provides we compete with each other. The Constitution does not provide that you can do it with $2 or $5 labor or anything else in any other country. Only you advocate that you and your people--you understand that?

Mr. BARNHARD. No; I do not understand what there is in the Constitution which requires competition only within a limited geographical boundary.

Senator MALONE. The Constitution prohibits any tariff or any charge for materials going across State lines. You are a lawyer. You should know that you do know that?

Mr. BARNHARD. Yes, sir.

Senator MALONE. That is what I say. Of course, in the Constitution of the United States, if you look at it, you will see that with

amazement.

Mr. BARNHARD. I have looked at it from time to time.

Senator MALONE. I hope you have, while you are a member of that business.

That is, that in article I, section 8, and article II, section 2, the Constitution of the United States in the division of powers between the three branches of Government, pointedly separated the regulation of national economy, fixing and adjusting the tariff, duties, and imposts. and excises in article I, section 8. And the regulation of foreign trade was put in the legislative branch; that is, the Constitution did that.

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