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You will never win that ball game either.

If the XRA, iu which constitutional power went from Congress to the l*n dent, was unconstitutional "delegation running riot," then what can be said constitutional power that is delegated by Congress to the President, and tt) redelegated liy him to an association of foreign governments dedicated to I leveling of world living standards and a redistribution of the world's weall

That is where you are going in this thing.

GATT contemplates that its decrees will ultimately be policed and enforr by an appropriately muscled international tribunal. Drawn to these sper-ifl tions is the new Organization for Trade Cooperation. "OTC," which has a Ires been advanced as President Eisenhower's climactic contribution to the int national government of our foreign and domestic commerce which, before hi President Truman, with our adherence to GATT, so nobly advanced.

When GATT gets this enforcement machinery—

and the way we are going they are going to get it just as sure as d follows night, because we are departing from our solemn oath wli we said we would support and defend and protect the Constituti of the United States—

the resulting impact u]K>n our domestic affairs is certain to be loud and p* fuL

AVe won't be worrying about flatware. Japanese textiles, and lit glass, but you will be worrying about the whole tiling.

Aside from import duties and international shipments, GATT is desip to regulate many areas of our domestic economy, including sm-h things » price-control system, rates of domestic exchange for foreign currency, om t share of the world's raw materials and the proportion of our domestic mar that should be supplied by foreign producers.

There are at least 15 important Federal statutes that are in apparent o flict, with GATT. These laws include the Agricultural Adjustment Act, Clayton Antitrust Act, the Internal Revenue Code, and last but not least I most ironically, the Trade Agreements Act of 1JV34, as amended, which brongtil to GATT in the first place.

l"nder persistent prompting and pushing by the President, Congress now [ posed to extend this Trade Agreements Act which binds us to GATT. whl in turn, directly threatens the jurisdiction of the Trade Agreements Act I 34 other congressional statutes. Nobody in Washington proposes to rcf those statutes.

For patriots and taxpayers it is dispiriting and depressing, if not denioraliJJ to see so many of our honorable Congressmen and Senators chasing their' ]N>]itical coattails in such nn obviously vicious circle of internationalist intri! If these plodding politicians would pause in their muddled milling, they ml hear the reechoes of this good advice from one of their distinguished preiW sors, Senator Daniel Webster:

"When the mariner has been tossed for many days in thick weather and on unknown sea, he naturally avails himself of the first pause in the storm * the earliest glance of the sun * * * to take his latitude and ascertain liow the elements have driven him from his true course. Let us imitate this priidi1 and, before we float further on the waves of this debate, refer to the point fl which we departed, that we may at least be able to conjecture where wi> i are."

The point from which you departed, My dear Senators and Congressman the Constitution of the t'nited States. It is unnecessary for you to weigh hypothetical benefits of free world trade against the established benefit* "f American standard of life and living.

It is necessary merely for all of you to read the Constitution which you I' sworn to support and from which you have departed. This is all you »«•' do In order to vote conscientiously to kill this misnamed "reciprocal and its monstrous un-American Internationalist appendages.

This article says:

Tell your Senators and Congressmen that they are not expected to do ew thing that the President tells them to do. Tell them they are expected

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what they have sworn to do; namely, support the Constitution of the Unied States.

Mr. Chairman, I do not think any better advice could be given to this committee, and I am just simply tired of people coming in here with self-serving statement and repeating cliches and brainwashing the American people, tying it up with our economy, tying it up with Congress, and tying it up with everything.

Xow this gentleman here testifying, I am not here to abuse him or demean him but you have some figures here that intrigue me.

You say on page 2:

In viewing the testimony thus far it would seem clear that the Congress has the simple choice of protecting the job security of 4 million Americans who live off of exports achieving this according to the proven formula of reciprocity or to step backward—

It is a beautiful word, isn't it, "step backward"—

into a volatile system of regional distated tariffs to protect the job security of only 200.000 workers in injured industries.

Will you give me the industries where only 200,000 people have been injured?

Mr. Dewet. Senator, I cannot cite the specific industries.

Senator Jexxer. You cannot i

Mr. Dewey, will you give me the specific industries where there are 4 million Americans who have got a job as a result of this reciprocal trade agreement and exports?

Mr. Dewey. I am calling upon the study made by the Department of Commerce in citing these figures.

Senator Jexxer. I would like this information brought before this committee in detail. For example, I pick up last evening riding in on a plane from Indiana an article from the U. S. News & World Report, further advocating the reciprocal trade agreement, going all over the country, every magazine, every article practically you read and they were even so detailed that thev had exact amounts of money that each State gets from this great reciprocal trade program, and my State got $9 million.

Mr. Chairman. I think this information is essential to this committee before we can intelligently act and I want to know what industries in my State get $9 million out of the extension of the Reciprocal Trade Act, and I don't see why anyone is advocating that or any necessity for extending any kind of program for 5 years.

Has anybody justified that, Mr. Chairman: who has been here as a witness?

The Chabmax. Testimony has been given and I hesitate

Senator Jexxer. Has it been justified?

The Chairman. I dislike very much to interrupt the Senator, but the committee adopted a 20-minute rule for each Senator to question the witnesses, and the Senator has somewhat exceeded it.

I am wondering if he could not make a list of the information he wants or ask it of some other witness.

Senator Jexxer. I was not here. Mr. Chairman, when we made that rale. I don't know why we have this rule because. Mr. Chairman, there is a bill that should be kept in this committee until the bells ring [laughter] because any man who is a Senator of the Vnitnl States has taken an oath to live up to the Constitution, cannot in good conscience sit here and deliberately destroy his country violation of his oath.

The Chairman. 1 am anxious for the Senator to get all the info mation he can, and he desires and if he will make a list as to othl questions—I don't imagine this witness

Senator Jenner. I will list the information.

I want to know where they get these facts. Here is a man ^ sits here and testifies and I am supposed to sit here and listen to He says there are 4 million people in my country making a livii out of the export-import business of this country. But there a only 200,000 injured by this business.

I want the facts and the proof. Where do they get it?

The Chairman. Well the witness

Senator Jenner. By the way, where do your ships travel?

The Chairman. Will the witness furnish those facts?

Mr. Dewey. I will, together with the particular source.

(The information is as follows:)

Pacific American Steamship Association,

Washington, D. C., July 2, 1958, Hon. Hakrt Flood Btrd,

Chairman, Committee on Finance,

United States Senate, Washington, D. C.

Deab Mb. Chairman: During the course of my testimony on H. B. 123 Trade Agreement Extension Act of 1958, your committee requested that I ft nish additional data. Following is the information requested:

Title VI of the Merchant Marine Act of 1936 authorizes the Federal Maritii Board to pay operating-differential payments for the "operation of a vessel vessels, which are to be used in an essential service in the foreign commerce the United States."

Section 606 (6) reads as follows: "that the contractor shall conduct his op< ations with respect to the vessel's services, routes, and lines covered by his « tract in the most economical and efficient manner, but with due regard to t wage and manning scales and working conditions prescribed by the Commit as provided in title III;"

Section 606 (7) limiting purchases to the United States' products reads follows: "that whenever practicable, the operator shall use only articles, mal rials, and supplies of the growth, production, and manufacture of the Unit! States, as defined in section 505 (a) herein, except when it is necessary to H chase supplies and equipment outside the United States to enable such vesa to continue and complete her voyage, and the operator shall perform repil to subsidized vessels within the continental limits of the United States, except an emergency."

Section 607 (b) with respect to funds exempt from taxation, reads in part follows:

"To insure the prompt payment of the contractor's obligations to the Unit States and the replacement of the contractor's subsidized vessels an nay I required, the contractor shall create and maintain, out of gross earnings, dnrii the life of such contract, a 'capital reserve fund,' in such depository or depcd tories as may be approved by the Commission. In this fund the contractor §hl deposit annually or oftener, as the Commission may require, an amount eqV to the annual depreciation charges on the contractor's vessels on which the op" ating differential is being paid."

Section 607 (c) on this same subject reads in part as follows:

"To attain the public objects for which the financial aid provided for In contract is extended and to insure the continued maintenance and sneresrf operation of the subsidized vessels, the contractor shall create and niaintail during the life of such contract, a 'special reserve fund' In such depositor; depositories as the Commission shall approve."

From the above it is clear that only dry-cargo vessels engaged In the fordi trade of the United States serving essential trade routes of the United Stsi are eligible for operating-differential payments. Also the excerpts from sectli 607 explain the limited use of funds which are exempt from taxation for t! purpose of replacement of subsidized vessels and fulfilling the objectives of the Merchant Marine Act, 1936.

With respect to the specific cost items which are subsidized, section 603 (b). Merchant Marine Act, 1936, reads in part as follows:

"'Such contract shall provide that the amount of the operating-differential subsidy shall not exceed the excess of the fair and reasonable cost of insurance, maintenance, repairs not compensated by insurance, wages and subsistence of officers and crews, and any other items of expense in which the Commission shall find and determine that the applicant is at a substantial disadvantage in coinret it ion with vessels of the foreign country * • •."

The following table shows the breakdown on items of subsldizable expense for the year 1957, the latest figures available:

Items of subaidizable expense for 1957

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With respect to the question concerning the increase in subsidy cost, no such figures are available from the year 1930, which was the date mentioned at the hearings. The implementation of the Merchant Marine Act of 1936 was well underway by 1938, but the war interfered with the obtaining of accurate data useful for evaluation purposes on this subject; therefore, in the following table I have shown data from the immediate postwar years to the present.


With respect to the question concerning the percentage of operating cost represented by subsidy, figures for the year 1956, the latest available, show that the subsidy payable amounted to 19.3 percent of the total operating expenses of all subsidized steamship lines.

As I interpret the request of the chairman for Information concerning these various subsidies, as to what type of vessels to which they are given, I feel that the following information, in addition to the above, with respect to the construction-differential payments which go to the shipyard, will be helpful:

Section 501 (a), Merchant Marine Act, 1936, in part, reads as follows:

"Any citizen of the United States may make application to the Commission for a construction-differential subsidy to aid in the construction of a new vessel to be used in the foreign commerce of the United States. No such application shall be approved by the Commission unless it determines that (1) the plans and specifications call for a new vessel which will meet the requirements of the foreign commerce of the United States, will aid in the promotion and development of such commerce, and be suitable for use by the United States for national-defense or military purposes in time of war or national emergency;"

Section 501 (b) and (c), in part, reads as follows:

"(b) The Commission shall submit the plans and specifications for the proposed vessel to the Navy Department for examination thereof and suggestions for such changes therein as may be deemed necessary or proper in order that such vessel shall be suitable for economical and speedy conversion into a naval or military anxiliary, or otherwise suitable for the use of the United States Govern

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ment in time of war or national emergency. If the Secretary of the Navy approves such plans and specifications as submitted, or as modified, in accordance with the provisions of this subsection, he shall certify such approval to the Commission.

"(c) Any citizen of the United States may make application to the Commission for a construction-differential subsidy to aid tti reconstructing or reconditioning any vessel that is to be used In the foreign commerce of the United States."

Section 502 (b) states that the Commission may approve an allowance not to exceed 50 percent of such cost. Thus, Congress has provided that the construction-differential subsidy payable to the shipyard may not exceed 50 percent of the cost of the vessel, less the cost of defense features.

I was also asked to indicate the source of employment statistics contained in my statement.

1. The source of these data is the staff papers presented to the Commission on Foreign Economic Policy, commonly referred to as the Randall Commission (pp. 373 through 384). The figures were developed by the Department of Agriculture and the Department of Labor in 1954, and the breakdown at that time showed:

Employee* engaged in foreign trade

Nonagricultural 2,150. OOO

Agricultural 976,000

Transportation and distribution 450, OOO

Manufacturing 800, 0O<:

Total employment in foreign trade 4, 376, 0OC

Using the same formula, in 1958, this total figure increased to 4l/j million employees.

2. The reference to the job security of 200,000 employees is an estimate of the number of United States employees producing goods equivalent to the estimated increase in imports which would take place in the event of a temporary suspension of tariffs. I understand that the Bureau of Labor Statistics. Department of Labor, agrees with this estimate.

Again I want to thank the committee for the courtesy extended to me in the presentation of our testimony supporting an extension of the Trade Agreements Act.

Very truly yours,

Ralph B. Dewey, President.

Senator .tenner. Where do they travel?

Mr. Dewey. They operate from the Pacific coast to all ports of the world.

Senator Jenner. All right. Will you tell this committee what percentage of the total national productivity of this Nation is going in the export trade of this country?

Mr. Dewey. The total national productivity?

Senator Jenner. Yes; what percentage of our total economy goes into export trade?

Mr. Dewey. I am informed from the Department of Commerca figures that about 10 percent of the movable production of the Fnitecl States enters into export.

Senator Jenner. About 10 percent. That is the total productivity of this United States?

Mr. Dewey. Senator, I am not completely familiar with that figure, but I guess it is over $400 billion a year.

Senator Jenner. What would 10 percent of 400 billion be?

Mr. Dewey. Forty billion.

Senator Jenner. Forty billion dollars. Do you know what percent of that is in trade with Canada?

Mr. Dewey. I am not familiar with that figure.

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