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It is natural that around the port of Philadelphia district should grow up many trades, services and industries which are dependent upon foreign trade for their livelihood. With the depletion of Minnesota's Mesabi Range reserves of high-grade iron ores, the American steel industry has been forced to seek out and develop sources of these ores outside the United States. Imports of iron ore represent only 18 percent of our national requirements but most of these imports arrive in this port and are processed in increasing quantities in the district. The port handles varied other imports including manganese, chrome, nickel, tin, bauxite, cryolite, fluorspar and gypsum in its extensive and modern discharging facilities. These ores and minerals are vital to our national economy and are either not found in commercial quantities in the United States or, if found, supplies are insufficient to meet demand.

During the first quarter of 1958, approximately 12.5 percent of our national requirements of crude petroleum were imported. Of this total, slightly more than half arrived in the port of Philadelphia for refining in the important concentration of refineries of adjacent Pennsylvania, Delaware and New Jersey. This concentration represents about 9.6 percent of the total national refining capacity and is a consumer of domestic as well as foreign crude.

Ready access to steel fabricating plants, electrical and mechanical machinery producers and important paint factories-have permitted the shipyards at Wilmington and Camden to build and repair commercial and naval vessels of all sizes. One of the oldest and most important United States naval shipyards is also at Philadelphia. The Camden yards, the largest privately owned in the Nation, are now proudly building the nuclear steamship Savannah—the first atomic-powered cargo vessel which will, along with the electric generating plant now under construction in American factories for domestic as well as foreign buyers, demonstrate that the United States is leading the world in the peaceful use of atomic energy.

The port district is one of the Nation's principal food processing areas. As the third largest candymaking center in the United States, the Philadelphia area imports large quantities of cocoa, sugar and flavorings. Canned and prepared foods are exported throughout the world. These food processors draw heavily upon fruit, vegetable and poultry farmers of the three adjacent States for their basic primary materials.

While the carpet industry is diversified throughout the Atlantic and Gulf States, the Philadelphia area is perhaps the largest single concentration. Much of the carpet wool (which is not produced in appreciable quantities in the United States) and jute which must be purchased abroad, enters the country through this port and is processed by carpet factories in the area. The local leather, bagging and twine industries, also of national importance, import and process hides and skins, sisal, henequen and jute which are not found in the United States in the desired commercial quantities.

The Philadelphia area is rapidly becoming the electronic center of the United States. In addition to many products for the American home and homeowner, this industry makes a major contribution to our Nation's modern weaponry through designing and building electronic components and systems for naval Vessels, aircraft and guided missiles. For this growing and vital industry, critical raw materials such as mica, tungsten, tin, nickel, chrome and shellac, must be brought from abroad. On the other hand, the foreign trade of these manufacturers is expanding as the standard of living of foreign consumers rises. A similar situation exists for the industrial chemicals and pharmaceutical manufacturers who combine to make the Philadelphia port district a major chemical producing area of the United States.

Professional and scientific instrument and equipment makers, including surgical, medical and dental, make this area one of the most important in this field in the country. Their products are sought by foreign buyers. Of similar skills and with comparable foreign markets are the area's tool and die makers, particularly those serving the American and foreign automotive vehicle producers. Foreign trade is important as well to the economies of the States of Pennsylvania, Delaware and New Jersey, all of whom have communities, industries and agriculture making up the port of Philadelphia district. The United States Department of Commerce has recently issued reports on surveys of the impact of foreign trade upon each of those States; some of the salient points made by those reports are:

Pennsylvania, the survey revealed, has 8 major manufacturing classifications which had a proportionate share in the total United States exports for 1956

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of $764.7 million. In the 1956-57 marketing year Pennsylvania's agriculture had a proportionate share of $45.5 million.

The specific companies mentioned in the Pennsylvania report as engaged in foreign trade span the industrial spectrum and were from small in size to industrial giants. The communities in which these companies have factories are diffused throughout the Commonwealth of Pennsylvania, from Washington, Pittsburgh and Erie in the west-to Morrisville, Philadelphia and Chester in the east. Pennsylvania, which ranks as the first State in the Nation in the production of metal and mineral products, and second in the total value of manufactured goods, exports its produce throughout the world. In turn, many of those factories are dependent upon foreign sources for raw materials. The State's food processors similarly look abroad for sources of both supply and sales.

Delaware has an important stake in our national foreign trade. While small territorially, it is the home of the world-famous du Pont Co. which, together with the Atlas Powder Co. and the Hercules Powder Co., exports large quantities of various chemical products and cellulose and procures a wide variety of raw materials overseas. The American Brake Shoe Co., the Carrier Corp., and the National Vulcanized Fibre Corp. are also singled out by the United States Department of Commerce report as having important export business. The well-known packing firm of Libby, McNeill & Libby draws on Delaware agriculture, according to the report, to export canned meats, fruits and vegetables, and, in turn imports flavorings and seasonings.

Delaware's proportionate share of the total United States exports in 1956 was $27.9 million of which 5 industrial groups exported an estimated $25.1 million.

On the subject of agriculture, the report shows exports broken down into the following groups (State's proportionate share of United States exports):

Poultry products..

Vegetables--

Dairy products_.

Fruits and nuts__

Livestock products----

$1, 158, 000 838,000

486, 000 195,000 169, 000

New Jersey has 8 principal industrial groups which had a proportionate share in United States exports for 1956 of $573.7 million. Its agriculture in the 1956-57 marketing year had a proportionate share in excess of $14.9 million. The highly diversified, widespread industry of this State exported electrical machinery, communications equipment and a wide variety of electrical equip ment and consumer products. New Jersey's important industrial chemical and pharmaceutical industries draw upon foreign sources of supply for raw materials and export their products throughout the world. The world-famous food processors in the Garden State export appreciable quantities of their products and, in turn, are dependent on overseas sources for varied ingredients. This chamber of commerce believes that the above evidence points clearly to the direct interest of the port of Philadelphia district, and of the 3 States of Pennsylvania, Delaware and New Jersey, in a continuing reciprocal trade program as contained in H. R. 12591. The bill provides adequate protection for those industries which are vital to the national security.

The chamber is conscious of an obligation by the Nation to those workers and companies whose employment and business is hurt by foreign products allowed into the United States as part of the overall national foreign economic and trade policy. To fulfill that obligation, the chamber urges the Congress to give full and early consideration to S. 2907, H. R. 9505 and other pertinent legislation so that temporary relief of an investment nature may be justly accorded to those hurt in the national interest.

On the matter of foreign competition, the chamber believes the American industry on the whole is more than qualified to meet foreign competitors on price and quality. Such competition will, in the long run, prove no different than normal competition within and between domestic industries. Further, such competition can be expected to sharpen the technical and managerial skills, cost consciousness and general efficiency of American manufacturers.

The chamber opposes high tariffs and import quotas because they do more harm to the majority of American exporters (merchants or manufacturers) than they afford seeming benefits to the handful of American manufacturers they would protect. Further, reasonably lowered tariffs enable the countries to

which we sell to pay us with their products, normally raw materials or foodstuffs which are not available in the United States in commercial quantities.

The chamber advocates at least a 5-year extension of the Reciprocal Trade Agreements Act because modern business must make long-term plans, particularly in this age of growing automation, which includes marketing and finance as well as automatic factories. This is especially applicable to companies whose operations are affected by foreign trade, whether imports of raw materials or exports of manufactures.

The chamber supports H. R. 12591 because it is an additional means toward finding expanding markets overseas for the products of American factories and farms. The incredible increases in industrial and agricultural productivity in the United States makes the need for foreign markets self-evident and imperative.

These are among the many reasons why the Committee on Finance and the Senate have received so much evidence of the overwhelming support in the Nation for H. R. 12591. This support bespeaks a high degree of statesmanship and political courage, which has been shown by a majority of the Members of the House of Representatives in voting 317 for and 98 against this bill.

This chamber of commerce is particularly proud of the 12 out of 13 Members from the tristate port of Philadelphia district-of all 6 Members from the city of Philadelphia-of all 4 Members from Pittsburgh-of the 20 out of 30 Members from the State of Pennsylvania-of the Members at Large from the State of Delaware of the 8 out of 14 (with 2 not voting) Members from the State of New Jersey-who voted for this vital legislation.

The chamber respectfully urges the Committee on Finance to approve H. R. 12591 as passed by the House of Representatives and to assume the leadership on the floor of the Senate in securing passage by a comparable majority.

Senator FREAR. Mr. John C. Ray, Greater Detroit Board of Com

merce.

STATEMENT OF JOHN C. RAY, GREATER DETROIT BOARD OF

COMMERCE

Mr. RAY. Mr. Chairman, my name is John C. Ray, and I am here representing the Greater Detroit Board of Commerce and speaking in behalf of the extension of the Reciprocal Trade Agreements Act. I have a prepared statement here which is some 8 pages long, but being considerate of the committee's time and realizing the fact that there are some 5 or 6 other witnesses appearing today, I would prefer not to read the statement. After listening to Mr. Percy speak, I believe there is very little that I can add to what he has already stated; he made a very convincing statement for the extension of the act. Senator FREAR. Your complete statement will be made a part of the record.

Mr. RAY. Yes, thank you, Mr. Chairman.

I would like to highlight a few points from my statement: The Greater Detroit Board of Commerce has some 6,400 individual members representing 4,020 firms in the metropolitan area of the city of Detroit. The membership consist not only of the automobile industry but also such important industries as machine tool accessories, metal stampings, hardware, gray iron foundries, inorganic chemicals, pharmaceuticals, and office machinery. We also have large brass rolling and copper mills, and numerous substantial paint. and varnish plants. We produce a large volume of iron and steel, rubber tires, industrial machinery, and aircraft parts.

A few years ago a survey was made of the State of Michigan by the Legislative Reference Service of the Library of Congress, on request of several members of the Michigan congressional delegation,

to determine just how the State of Michigan was tied in with the foreign-trade interests of the Nation.

The survey covered 76 percent of all employment in manufacturing in the State of Michigan, and disclosed the following results: That 8 out of 10 workers in manufacturing employment in Michigan are on the payrolls of firms having a positive interest in foreign trade.

This "positive interest" was defined by the survey as companies "which export some of their product, or use imported materials, or both."

Only 1 out of 10 workers was employed by manufacturing firms which encountered competition from imports or firms whose import competition outweighed its export interests.

The remaining 1 out of 10 workers in manufacturing employment were on the payrolls of firms which had no interest in foreign trade whatever.

The result of the survey points up the correctness of the consistently forward-looking views of the Detroit business community on the subject of United States foreign trade policy, as expressed by the Greater Detroit Board of Commerce previously before this committee, and also before the Ways and Means Committee, on this and other tariff matters.

We are very much in favor of H. R. 12591 because it provides for a 5-year period instead of a 3-year period. In fact, we would much rather have seen an 11-year extension period for it in order to give our foreign friends the knowledge that we have some stability in our tariff policy and thus they can rely upon a long period of a continuous certainty in dealings with our country.

We feel that the Trade Agreements Act, both in design and execution, should be regarded as being in the national rather than specific interest. For this reason we are firmly convinced that the safety features which are now part of the legislation such as the escape clause, should be so administered that it continues leaving the determination of facts up to the Tariff Commission. The executive branch, on the other hand, should retain authority to accept or reject Tariff Commission recommendations which are based only on narrow standards of judgment. No one agency such as the Tariff Commission is now or should in the future be charged with determining of what is in the national interest.

The possible overriding considerations of national security, of foreign policy, or of relations with specific countries, can only be determined by the administration as a whole.

Thus, the President must continue to be allowed to consider the national interest in accepting or rejecting recommendations based on narrow criteria. The amendment allowing the Congress to override the President, as proposed in H. R. 12591, is, in our view, an unfortunate step backward in creating new instability in our trade policy.

Furthermore, we feel that the Tariff Commission must be charged, in its escape-clause investigations, with requiring proof that the claim of actual or threatened injury is based on competitive imports being the major cause, not merely a contributing factor, to such alleged injury. Nothing is more destructive of good will and respect for United States policies than the use of "escapes" economically unjustified and morally wrong.

The Trade Agreements Act is no longer an antidepression measure as it was when first passed by Congress. It has become an important instrumentality of United States commercial policy. Its impact is worldwide, for good when forcefully extended, or for harm when hedged about with restricting amendments.

To us at home it means faith in a dynamic economy strong through diversification and technological development. To our friends abroad it has taken on a meaning of American maturity and leadership in a field in which we have excelled, in production and trade.

Let us not jeopardize the important stake that American business, industry, and labor have in an expanding foreign trade and in the better availability of the foreign resources that we need for industrial production. We need this legislation also because it is evidence of a necessary faith in the viability of our dynamic economy.

Apropos of this, I may add one thing to what Mr. Percy mentioned, and that is the Yankee ingenuity. I recall the remark which Senator Flanders made about the American automobile industry being affected presently by foreign competition.

We in Detroit, in the automobile industry in particular, are not shouting "wolf" or running to the hills or complaining about the importation of foreign cars. We are not seeking any relief from Congress. Our present recession in Detroit is certainly not chargeable in any way to the importation of the foreign-made cars. We are not afraid of foreign competition, by any means. Just as Mr. Percy pointed out, we can and certainly will cope with any competition the foreign automobile manufacturers may want to give us, and we are looking upon these foreign imports with interest. Thank you.

Senator FREAR. Senator Bennett, any questions?

Senator BENNETT. No, I do not think I have any questions, Mr. Chairman.

Senator FREAR. Thank you very much.

(Mr. Ray's prepared statement follows:)

STATEMENT OF THE GREATER DETROIT BOARD OF COMMERCE

I am

Mr. Chairman, my name is John C. Ray, a customs attorney in Detroit. appearing on behalf of the Greater Detroit Board of Commerce, in my capacity as a member and former chairman of the world affairs committee and the imports and customs committee, in order to express our views in favor of H. R. 12591, the bill to extend the Trade Agreements Act.

The Greater Detroit Board of Commerce represents the interests of many thousands of firms and individuals in the Detroit metropolitan area.

Detroit's business and industry is much more diversified than commonly believed. For example, while automobile factories continue to represent a vital factor in Detroit's total industrial picture, the city also holds firm leadership in such diverse and important industries as machine-tool accessories, metal stampings, hardware, gray iron foundries, inorganic chemicals, pharmaceuticals, and office machinery. We are the home of large brass rolling and copper mills, and numerous substantial paint and varnish plants, and we produce a large volume of iron and steel, rubber tires, industrial machinery, and aircraft parts.

The reason for appearing today in favor of your committee's approval of H. R. 12591 can be found in the very material interest of Detroit's commerce and industry in expanding foreign trade.

I believe this interest cannot be better illustrated than by citing the results of a survey made by the Legislative Reference Service of the Library of Congress, on request of several members of the Michigan congressional delegation.

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