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make the act effective, it would lose much of its force and benefit and would certainly deprive the appropriate departments of our Government of a basis to carry out their negotiations in an effective manner. We are all aware that as countries develop economically they become better customers for our exports. Our foreign investments and the credits made available through the Export-Import Bank, the Development Loan Fund, and other entities of the United States Government, and through the comparatively short-term credits made available through our commercial banks, are greatly contributing to this economic growth and are making their contributions to expanding the markets for our exports. This contribution would be lost and a great potential in our markets abroad for the maintenance, development, and expansion of our own industries would be seriously affected if there should be no extension of the Trade Agreements Act. It is my opinion that H. R. 12591 as passed by the House is an adequate extension of this act, and it should be to the interest of everyone in this country, whether or not directly connected with foreign trade, to support this bill and to exert every effort toward its adoption as law.

The only other verbal comment I have to make is the fact that we feel there are certain important points in our own business and certain examples which I have brought to the attention of this committee from our actual experience, which indicate the desirability of taking action in the production of more dollars abroad.

You have heard General Collins and others here before you mention the Russian encouragement in the economic fields abroad and in Latin America. We have run into some of that, but actually our foreign customers aren't particularly interested in giving full consideration to that phase at the present time.

Nevertheless we feel that this is an important aspect in the background, and we must look out for it. We are in a position as you know to supply our services and equipment from abroad, and we have been obliged in many cases to take advantage of that in order to get the job.

We have in Brazil, for example, built a large ammonia plant involving approximately $18 million, which we had to furnish primarily from France due to the fact that Brazil was short of dollars, and the fact that the French banking groups are very much more liberal in extending credits. That represented lost business to our industries here. You must remember too, if I may call this to your attention, that in all of our installations such as refineries and fertilizer plants, we buy from thousands of vendors in this country.

We buy large items of equipment from heavy industries such as General Electric, Westinghouse, A. O. Smith, and concerns of that sort as well as a great number of miscellaneous parts. In each of our jobs where we had to look to Europe to supply equipment because of dollar shortages, we then had to supply that equipment from European vendors, which is lost business here.

Furthermore, the credit feature is important too because it seems that our European friends are far more liberal in their credits than are our own banking groups or, for that matter, Government groups here.

Consequently, even though the foreign customer would prefer the equipment to be bought from here, for obvious reasons, nevertheless

their exchange situation and the credit offers from abroad make it imperative that they look elsewhere.

This harms our industry very much in our opinion. We feel that it might be interesting for you to note that in our own case the expansion of our business abroad has been reflected by a comparable expansion of our business and employment at home. It has similarly contributed to greater business for the many United States companies who furnish us with varied types of equipment needed for installations.

I can give you figures if it were of interest to you, but let me say just briefly that since 1953 to the present time we have almost, but not quite, maintained our domestic export business. We have quadrupled our foreign business, that is the business with our subsidiaries, and we have nearly doubled our domestic business.

We feel that we would have done better with our domestic business, particularly with respect to our export field, if we had had more dollars available to us from abroad, and that is important, Senator Martin, particularly since we have one of our best plants in Mountain Top, Pa., and we would like to expand that plant.

I am only calling these points to your attention at the moment because I am not prepared to get into the technical matters, the SmootHawley Tariff Act or the reciprocal trade agreement.

I just want to say in closing that we feel the extension of the Reciprocal Trade Act is important. We fully support it. We have seen evidences during the last few years of its very good effect upon our own business, and we hope that will continue and we think it should be extended for 5 years, because actually I can't negotiate in South America and abroad unless I can at least assure the client that we are still going to be in business 5 years from now to complete the job. Thank you very much.

The CHAIRMAN. Thank you very much for your statement.

The next witness is Mr. Leo D. Keller, American Institute for Imported Steel, Inc. Be seated, Mr. Keller.

STATEMENT OF LEO D. KELLER, AMERICAN INSTITUTE FOR IMPORTED STEEL, INC.

Mr. KELLER. Honorable Senators, Congress of the United States, Senate Finance Committee, Senator Byrd, chairman, and Senator Martin, my name is Leo D. Keller.

Senator MARTIN. Mr. Chairman, I would like to suggest that the witness just file his statement, which will become a part of our record, and then make a verbal comment.

(The document referred to is as follows:)

STATEMENT OF LEO D. KELLER, PHILADELPHIA, PA.

I am here today to plead in favor of a 5-year extension of the Reciprocal Trade Agreements Act, as provided in H. R. 12591.

I have been in the steel import business for 23 years, excepting prior to World War II when President Roosevelt ordered American boats out of foreign waters and during our subsequent entry into the war when we could not ship. Prior to that, I spent 20 years of my life in steel-consuming industries.

I will not attempt to discuss the general and political value of the reciprocal trade agreement program, for I assume you have all read the statements of the President, the Secretary of State, and others of the administration, and the speeches which Mrs. Luce, Senator Javits, Mr. Charles P. Taft, and many more

have made regarding world politics, economics, and trade. I can, however, tell you from my own personal experience, and I cover the ports in Philadelphia and Baltimore, that imports and exports are vitally necessary primarily to us and to the rest of the nations with whom we are friendly.

Starting in January 1936, when we were just beginning to edge out of the depression, selling imports for me was indeed an uphill. problem. In those days, those directly concerned here I mean by that workmen in the shipping industries, the stevedores, workmen, truckmen, etc., were lucky if they got a day or two of work a week. By cooperation over the years, we have built this up to a fairly active business, which redounds to our benefit as well as the nations who ship to us.

A very considerable tonnage of imports, in fact all of my sales, travels on American lines. It is obvious that no steamship company can long exist operating on just one-way traffic because the cost of their crews, the food and operating expenses go on whether or not they are carrying cargo. There are many, many thousands of people, both men and women, in the United States, particularly in the harbor cities, who depend on imports and exports for their economic life.

Today, even though Philadelphia and Baltimore are running very high in import and export tonnage, I doubt seriously from conversations that I have had with the men themselves that they average 4 days' work a week.

To do anything which might tend to lower their hours of labor would be a serious situation for them. I might say here I fully believe so far as labor is concerned, in my experience the amount of work and labor necessary in unloading, transportation, and fabrication of imports and exports is as large or probably more than that required for domestic production.

If we don't put reciprocal trade on a stable basis as national policy, it would certainly hurt our import trade and react on our exports too. Right now, for instance, with the Reciprocal Trade Agreements Act expiring and no new law passed, customers don't know what the future will bring and foreign suppliers write all the time asking what they can plan on for the future. Their own governments don't know because the whole thing depends on the United States. Especially with the European Common Market coming, and the Coal and Steel Community, international trade needs stability. We have to know not just for a year at a time what plans to make. This applies to production schedules, equipment, purchases, transportation, shipping, and everything. As the President said, it may take 4 or 5 years to set up a workable reciprocal trade program with Europe under the new Common Market. If we can't plan that far ahead, either the Common Market won't work and this would help nobody but the Communists, or the Common Market countries will be forced to tend to cut us out. This would hurt us a lot more than them because we export much more than they do.

I am happy to tell you that, having made this international trade my life's work, I shall be glad not only if I can continue in the future, as I have in the past, to earn my own living but also contribute greatly to helping the livelihoodof many hundreds of people in my immediate districts, Philadelphia and Baltimore. That takes in the railroad companies and the trucking industry which handle our tonnage, the steamship staff, the checkers, and the stevedores themselves. In addition to that, the customs duties paid to the United States Government over the years, and a lot is in my district, amount to billions of dollars. We all need to know, the steamship companies, the railroads, the truckers, the stevedores, the warehousemen, the insurers, the banks, the workers, that the reciprocal trade program will continue for as long as we can look ahead. That way we can work and plan and all of us benefit, as well as our friends in Europe.

In closing, I wish to say to you gentlemen, in all sincerity, never a ship docks. flying the American flag, with import tonnage on board, and I know there are men waiting anxiously to get working on it, that I don't feel a patriotic thrill. I am now 65, and I hope I have the health to continue and that Government regulations will make it possible, because I realize that when I make a sale a chain of events is set in motion, which starts in Europe and winds up here,. where everybody involved in manufacturing, transporting, shipping, selling, and fabricating benefits.

What I have said about my area, I am sure, applies equally to every major ocean port in our country.

Thank you.

Mr. KELLER. I would just add this. We are of course in favor of the extension of the House of Representatives Act 12591 for 5 years to give them an opportunity to get rolling.

Five years goes pretty fast even at that. I am here on behalf of the American Institute for Imported Steel. Directly I am employed by Amerlux Steel Products Corp., of New York, who are the American office of the Luxembourg steel mills.

I do not see how our shipments to the United States can hurt the American steel industry. We produce only 2 percent of the capacity of the United States. Of that 2 percent, never except during the Korean conflict have we exceeded 7 percent shipments of that 2 percent to the United States, which was increased largely at the behest of the United States Government.

We helped a lot of industries out at that time. The duties we pay run into many, many millions of dollars, and in the employment schedule what it means to the men on the waterfront-and incidentally I was there only yesterday, and while this is not in the testimony it might give you a brief idea.

First I would like to say I have heard comments here by other witnesses and questions by the Senators that there would be so much harm done, and the difference in the wage rates and so forth that I would like to state here that the production capacity of Europe is nowhere near as fast as it is in the United States, No. 1.

Here is an indication of what is going right today. This was as late as yesterday. This is on the docks now in Philadelphia ready to go out: Cloth, oil in large drums, lubricating oil and greases in small drums, canned goods, insecticides. There were about 20 large hay balers, a lot of machinery boxed up going to Germany, several lift trucks and chemicals from Du Pont.

Coming in was some steel which I had, chemicals, ores, bicycles, hams from Holland, burlap cloth which I understand is not made in the United States, it is a rough cloth, wood pulp, and napthalene. That, gentlemen, concludes what I have to say, and I thank you for the privilege of appearing before you. Thank you.

The CHAIRMAN. The next witness is Mr. Richard England, of the Heckinger Co., of Washington, D. C.

Senator MARTIN. Mr. Chairman, I would like to suggest to the witness that if he would be willing to file his statement with the committee and then make a brief comment, the Senate is already in session. (The statement referred to is as follows:)

STATEMENT BY RICHARD ENGLAND, PARTNER AND GENERAL MERCHANDISE MANAGER OF HECHINGER CO., WASHINGTON, D. C.

My name is Richard England, and I am a partner and general merchandise manager of Hechinger Co., Washington, D. C. I am here in support of H. R. 12591.

My company operates seven building-material supermarkets, catering to the homeowner who does his own work. Our stores are located in the suburbs of Washington. Many of our several hundred employees are residents of Maryland, and more than half of our business is done in the suburban areas outside the District of Columbia. I am supporting H. R. 12591, as passed by the House of Representatives, for two very important reasons. The first is that the bill carries no amendments imposing import quotas on specific commodities. While the bulk of our business is in products made up of American materials by American manufacturers, we do sell a considerable amount of imported goods, par

ticularly flush doors made with lauan mahogany door skins imported from Japan and plywood panels made with Japanese plywood. Any barrier to our supply of these materials by means of an import quota would not only seriously affect our sales, but would also deprive our customers of an item which many of them purchase in large quantities.

As you are well aware, the building industry has suffered during the last few years, both in the manufacturing end and the retail end, as well. The acceptance by the average American homeowner of lauan mahogany doors and Japanese plywood panels has greatly stimulated our business in an otherwise declining era.

I can tell you, as the general merchandise manager of our concern, that it is most helpful to have an item on our shelves which is in constant and increasing demand, particularly in a recession period.

We find that having imported plywood products available for sale stimulates business in many other departments of our stores. For instance, with almost every sale of mahogany plywood we sell considerable framing lumber, floor tile, insulating ceiling tile, hardware, nails, paint, etc. With a typical sale of flush doors, we either sell sliding-door hardware, hinges, and latches or, if the door is to be made into a piece of furniture, we sell various types of metal or wood legs to convert the door into a coffee table, dining table, desk, etc.

Ninety-nine percent of all the other products we sell in connection with the sale of imported plywood are manufactured in the United States. In this connection, may I point out that for many years we have tried to arouse a largescale demand by homeowners for flush doors made with door skins of Americanorigin and American-made hardwood plywood. Japanese plywood and doors are so much cheaper and, in so many cases, so much more beautiful, that the latter have sold and the former simply have not. We pride ourselves on being good merchants, and a good merchant gives the public what it wants.

This situation is not unique with the Hechinger Co., as many retail building material and hardware dealers throughout the country have found the same situation existing in their businesses. For intance, Mr. E. F. Davis, Jr., vice president of the Davis Plywood Corp., of Cleveland, Ohio, expresses his views in a recent letter as follows, and I quote:

"Contrary to all propaganda against foreign plywood, we have sold more American hardwood since the introduction of foreign woods.

"Imports are cheaper than most American hardwoods, but the interest aroused in the buying public in the possibilities of genuine wood paneling, has brought about many new sales in our more expensive American material. Purchasers have discovered that in many cases, United States-produced woods in other species can be obtained for surprisingly little more cost.

"We are positive that our purchases of United States hardwoods would be greatly reduced and our sales would suffer a tremendous blow if we could not purchase foreign woods."

My second reason for supporting H. R. 12591 is because the 5-year extension of the act will enable my firm to operate in an era of stability insofar as the United States Government's position on international trade is concerned. Nothing is more frustrating to a merchant than to try and plan a sales campaign based on the sale of imported goods if there is any uncertainty that the supply of these goods will be affected by United States Government policy. A 5-year extension of the Trade Agreements Act will enable my firm and thousands of other companies selling imported products to the American home to plan with confidence to offer the American consumer increasingly attractive items from our friends abroad. Most of us are prone to discuss economic issues, such as the hardwood-plywood situation, in terms of the effects of quotas on the plywood industry or the workers in that industry. We all overlook, sometimes, the effect of legislative action on the forgotten man-the American consumer. If the American consumer wishes to buy Swiss watches or French perfume or Scotch whisky or British woolens or Japanese flush doors, he should be permitted to do so in a market which is stable and assured.

Therefore, on behalf of my business and on behalf of the American consumer, I urge you to report out H. R. 12591 without any amendments imposing import quotas on specific commodities and with the 5-year-extension provision of the bill intact.

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