Mr. GAUMNITZ. The evidence is to the contrary.

Senator FULBRIGHT. Is that because you do not have a good enough case to support relief?

Mr. GAUMNITZ. I cannot answer that. We think we have a good case, but the Tariff Commission thinks not. I do not know how they

are going to dispose of the immediate request.

Senator FULBRIGHT. It has been stated here by other witnesses that you have a perfectly orderly way to get relief under that provision and that gives everyone an opportunity to have a hearing. You do know that this section was put in the law without any hearings whatever. It was put in on the floor.

Mr. GAUMNITZ. Yes, sir.

Senator FULBRIGHT. That argument has some appeal?

Mr. GAUMNITZ. Yes, sir.

Senator FULBRIGHT. Do you feel you have a fair opportunity to present your case to the Tariff Commission?

Mr. GAUMNITZ. Yes.

Senator FULBRIGHT. Then why is the orderly way to proceed not to let you pursue that remedy and let us take this section out of the bill which has been objected to by very substantial interests?

Mr. GAUMNITZ. My point is that this provision was put in for a reason and the reason on the face of it must have been that there was no relief otherwise.

Senator FULBRIGHT. We, of course, have very little evidence about the reasons if it is put in on the floor, as I said, without a hearing. I presume you know more about how it got on there than I do.

Are there any further questions?

Thank you very much, Mr. Gaumnitz.

Mr. GAUMNITZ. Thank you, sir.

(The complete prepared statement of Mr. Gaumnitz is as follows:) STATEMENT OF E. W. GAUMNITZ, EXECUTIVE SECRETARY, NATIONAL CHEESE INSTITUTE, INC.

Gentlemen, the National Cheese Institute supports the provisions of section 104 of the Defense Production Act of 1950, as amended.

The National Cheese Institute is a nonstock, nonprofit organization, the active or regular members of which is composed of persons, firms, or corporations engaged in the production, assembling, manufacturing, and distributing of cheese and cheese products. Membership includes manufacturers, assemblers, processors, and distributors whether independently, privately, or cooperatively operated. Associate membership is provided for any organization having business dealings with active members. The membership of the institute manufacture over 50 percent of the cheese made in the United States, handle over 75 percent of such cheese, and manufacture or handle over 90 percent of the process cheese, cheese spreads, and related products.

Production of cheese in the United States for the period 1931 to date and imports of cheese in the United States in the period 1938 to date are set forth in tables I and II.

Imports of cheese in the latter part of 1950 and thus far in 1951 have increased markedly. It seems clear that the production of the various varieties of cheese in the United States in 1950 and thus far in 1951 will not be maintained were imports restricted to the quantities imported in the fiscal year ended June 30, 1951 or in the calendar year 1950. Reports indicate that much of the cheese imported in these recent periods has not moved into consumption, so that the full effect of the imports has not been experienced in terms of reduced United States production of the various varieties. Many of these imported cheeses have been selling in the United States at prices below those which would reflect support prices in terms of milk and butterfat. In order, therefore, to maintain production at current levels it is necessary that the quantities of cheese imported should be restricted to quantities imported in some period prior to 1950.

To state it somewhat differently, imported cheese prices have been such as to drive United States manufacturers out of business since they cannot sell cheese at prices comparable to those at which imported varieties are being sold and pay producers prices for milk and butterfat competitive with those being paid by other purchasers using the milk for production under Government price-support programs. This is true even though there has been marked progress in the manufacturing procedures used for the various foreign types.

There has been a steady increase in the consumption of the various types of cheese in the United States. During the war period there was a marked expansion in United States production. In the past few years, however, the United States production of most of the foreign types has remained relatively stable. Given time it appears that increasing quantities of foreign types of cheese could be sold without further reduction in United States production. Immediately, however, this is not possible without a chaotic period of readjustment.

Cheese is now being imported at such increasing quantities as to interfere with the orderly domestic storing and marketing of cheese. This is evidenced by the fact that many of the competing imported cheeses are being offered for sale at prices well below prices at which such cheeses can be manufactured and marketed in the United States.

Total imports of all cheese in the last 13 years amounted to less than 5 percent of the total quantities of all cheese produced in the United States. However, when the imports of specific varieties or groups of cheeses are examined in relation to the quantities of those varieties produced in the United States a very different situation appears. For example, the United States production of blue cheese in the years 1943 to 1950 (the only years for which blue cheese production has been estimated by the U. S. Department of Agriculture) averaged 9,026,000 pounds per year. During the same period imports averaged 837,000 pounds per year, or imports were about 9 percent of United States production. In 1950, however, this percentage was about 50 percent. Obviously, this is no negligible percentage and when coupled with artificial and arbitrary exchange rates can result in chaos for cheese producers.

An indication of chaos is indicated by an examination of the prices for imported blue and prices for blue produced in the United States. Blue mold cheese imported from Denmark, one of the important competitive blue cheeses, is now selling in the New York City market at around 42 cents per pound wholesale against market prices of 47 to 49 cents per pound for United States produced blue cheese, Normally, United States blue cheese costs and sells for about 10 to 13 cents per pound more than the wholesale price of Cheddar cheese which is now at 354 cents per pound on a Plymouth, Wis. exchange basis. The difference in wholesale price between blue and Cheddar is largely the result of the difference in quantities of cheese produced per hundred pounds of milk and of differences in manufacturing costs. Based on minimum milk costs and minimum manufacturing expenses the United States manufacturers of blue cheese cannot compete with imported blue mold cheese at 42 cents per pound, New York.

The imports of all Italian types for the period 1938 to 1950 averaged 14,313,000 pounds per year. In the same period United States production of Italian types of cheese averaged 42,037,000 pounds per year. Average imports for these types were 34 percent of United States production. In 1950 the percentage was over

40 percent.

Unquestionably, the same results would be shown were Edam and Gouda production in the United States available.

Each variety of cheese has its peculiar characteristic, which distinguishs it from other varieties. The manufacturing procedures for the various types and varieties of cheese likewise differ.

Production of the various types and varieties generally is specialized. In the case of the Italian types alone it is estimated that about 5,000 people are employed by the plants manufacturing such types of cheese. Imports at present levels or higher levels has meant, and will increasingly mean, that many of the persons employed in the Italian cheese producing industry in the United States will need to find other occupations largely outside the cheese business. This means that many such persons will need to shift to occupations where their specialized training is of little or no value. In some cases this will mean moving entire families to other areas. In this connection is should be noted that cheese factories are, for the most part, located near milk producing areas, usually in small towns or villages where alternative employment possibilities are limited. The effect of increased imports on employment should be fully considered in establishing import restrictions.

At the present time the United States Department of Agriculture has in effect a milk and butterfat price support program. Under that program the United States Department of Agriculture stands ready to purchase Cheddar cheese, butter, and nonfat dry milk solids. In fact, under the program some purchases have been made and are being made currently. It is clear that the prices of milk for all uses are related. It is a matter of indifference as to which specific products. are purchased in order to accomplish the price support purpose. As a matter

of fact, the price support program is predicated on this assumption. It is clear that the importation of any dairy product results in unnecessary expenditures under a price support program.

The circumstances now facing United States cheese producers were predicted in various presentations before the Committee for Reciprocity Information in connection with proposed import duty reductions under the Trade Agreements Act. Particularly, there was brought to the attention of the United States. officials the fact that the arbitrary devaluations of the currencies of many of the important countries exporting to the United States had the effect of nullifying any import duties. These various facts and protests have not been heeded. The present act is no doubt partially the result of the lack of appreciation of the effects of the various import duty concessions and currency devaluations. For these reasons, among others, the National Cheese Institute recommends that there be no modification of section 104 of the Defense Production Act of 1950, as amended.

TABLE I.-Cheese: Quantities manufactured in the United States, 1931 to date

TABLE II.-Cheese: United States imports for consumption by variety, 1938 to date

Compiled from reports of the U. S. Department of Commerce for years 1938-43, and from "Foreign Agri cultural Trade", U. S. Department of Agriculture, Office of Foreign Agricultural Relations, for 1944-50; 1951 figures preliminary.

Senator FULBRIGHT. Mr. L. D. Schreiber, president of the L. D. Schreiber Co., of Chicago, Ill.

Mr. Schreiber, will you give your name and address?

STATEMENT OF L. D. SCHREIBER, PRESIDENT, L. D. SCHREIBER CO., CHICAGO, ILL.

Mr. SCHREIBER. L. D. Schreiber, 110 North Franklin Street, Chicago, Ill.

Senator FULBRIGHT. I believe you were unable to supply the committee with a written statement, but did supply us with a letter, is that correct?

Mr. SCHREIBER. That is correct.

Senator FULBRIGHT. We, of course, realize that the hearings were called on fairly short notice and although it is not in accord with the rules of the committee, I believe under the circumstances we are justified in making an exception in your case.

Mr. SCHREIBER. I appreciate that very much.

Senator FULBRIGHT. We accept your letter on the subject and make it a part of the record.

Mr. SCHREIBER. Thank you very kindly. I would like to submit some of these figures here to which I will refer later.

Senator FULBRIGHT. Could I have a copy to follow your discussion? (The documents referred to follow:)

Senator BURNET R. MAYBANK,

CHICAGO 6, ILL., September 5, 1951.

Chairman of the Senate Banking and Currency Committee,

Senate Office Building, Washington, D. C.

DEAR SENATOR: Being that your committee is conducting hearings on the subject of the Andresen amendment, I am sending you herewith a file on the whole subject, including copy of my letter to Senator Douglas, of Illinois. I trust that your staff will have an opportunity to digest its contents.

Sincerely yours,

Hon. PAUL DOUGLAS,

L. D. SCHREIBER & Co., INC.,
L. D. SCHREIBER.

SEPTEMBER 5, 1951.

Senator from Illinois, Senate Office Building, Washington, D. C. DEAR SENATOR: Knowing your down-to-earth thinking and realizing that you will be obliged to express an opinion on the Andresen amendment, I am sending you herewith a file on the subject, including a copy of letter I am directing today to the State Department.

In substance this all means that there is merit to the administration's position but, unfortunately, the details have not been thought through. Our total imports of cheese during 1950 were only 56 million pounds as compared with the total cheese production in the United States of over 1,100,000,000 pounds. the surface this is only 5 percent of the whole and looks negligible, but, as conveyed in the attached, you will observe that imports of one item of blue-mold cheese represents 50 percent of the domestic production and all Italian cheeses imported represent 40-50 percent of the domestic production. In consequence, these types suffer substantially and, as expressed in the attached, will have a decided economic effect in the United States of America. Our suggestion of compromise merely boils down to continued tightening of the foreign types and to compensate permitting a modest increase in the imports of Cheddar types and also even some butter.

The blue-mold cheese comes principally from Denmark and I know from my recent visit there that they wouldn't feel too badly if they were permitted to substitute a modest quantity of butter; the same would probably be true of Holland and their Edams and Goudas. At the same time, we wouldn't consider it unfair to permit New Zealand to in rease its exports to us of Cheddar cheese which amounted to 13 million pounds roughly last year; during this same period Great Britain purchased from us any times this quantity of the same type cheese, and, since June 1951, Great I'ritain purchased from us about 40 million pounds more cheese.

We trust that this lengthy correspondence will not be considered an imposition on your good nature.

With kindest regards and best wishes, I am

Sincerely yours,

L. D. SCHREIBER & Co., INC.