conflict, and these increases have outpaced increases of other farm products. The volume of dairy imports involved in this amendment are only a very small fraction of 1 percent of domestic dairy output. The dairy industry of America is well enough established so that it can well compete with imported products without the aid of restricted trade laws. We question the wisdom of protective trade barriers under normal circumstances, and we know that such barriers are not in the interest of America during this time of mobilization. We urge the repeal of the imports restrictions contained in section 104 as: (1) a step toward inflation control; and (2) a return to our agreements under the reciprocal trade law. Very truly yours, JOHN J. GUNTHER, Legislative Representatire. ASSOCIATION OF FOOD DISTRIBUTORS, INC., Hon. BURNET R. MAYBANK, Chairman, Banking and Currency Committee, MY DEAR SENATOR MAYBANK: I quote below a telegram addressed to you on July 18: "We urgently request all possible efforts in conference and on floor to eliminate Andresen Amendment to H. R. 3871. House Joint Resolution 278 provides adequate authority for control of imports of fats and oils. The extension of authority by establishing new conditions and selecting additional commodities sets precedent for administrative discretion beyond that now provided by law and tends to defeat the efforts of our Government to balance foreign trade and eliminate unnecessary barriers. There are adequate safeguards for domestic producers in the Trade Agreements Act, the Tariff Act, and the Agricultural Adjustment Act. To single out certain commodities and set up broad conditions as contained in Andresen amendment merely sets up special privilege to certain classes of producers and tends to substitute political pressure for objective investigations of effect of imports on domestic producers and agricultural programs." We strongly urge that your committee report favorably on the repeal of section 104 of the Defense Production Act as proposed by S. 2104. We endorse the statements made to your committee by the Under Secretary of Agriculture and the Assistant Secretary of State on August 13, 1951. In addition, we contend that the adoption of section 104 without granting opportunity to industries affected is an unfortunate breach of the democratic process. Section 101 of the Defense Production Act contains adequate powers to impose import controls as needed. Section 104, by singling out specific commodities and broad conditions, is discriminative and unfair. We again ask that section 104 be repealed. Respectfully yours, Hon. BURNET R. MAYBANK, D. J. WARD. NEW YORK 13, N. Y., September 13, 1951. Chairman, Banking and Currency Committee, DEAR SENATOR MAYBANK: In connection with the hearings on import control provisions of Defense Production Act of 1951, I would like to state my views on this bill. If our country were to license and restrict the importation of watches from Switzerland due to the fact that they were crippling the American watch industry it would be understandable to those of us at home and would carry a satisfactory reason back to the Swiss people. The proportions of threat to our domestic dairy industry do not exist. With our State Department policy of aid to the European countries in the form of Marshall-plan aid and other means of support, aren't we contradicting our policy with the restrictions placed on Denmark, Holland, and Switzerland? Switzerland Swiss cheese is 30 cents a pound higher than domestic Swiss cheese. French Roquefort is about the same amount over comparable domestic blue cheese. Then, too, the entire amount of cheese imported is a pittance compared to domestic production. For 3 years our domestic briar smoking pipes have asked for an increase in duty on imported pipes with ample proof that the low prices from Europe have aided in crippling the American pipe industry. No relief was given the domestic manufacturer and if anything we have lower tariffs on all pipes. I honestly believe this bill should be repealed at once. In any cases where a domestic dairy item is threatened it could very easily be overcome by either requesting the foreign shippers to raise their prices on such items or we could then raise the duties to a point where the imported item would be equal in price to the domestic. The present bill is certainly no help to the average American for it has only helped raise the selling prices of all imported cheese. If and when this country is ready to discard the Marshall plan and start a new system of high tariffs to protect American industry, lets make a bill that will be fair to all industries. I do not recommend such a measure at this time. Sincerely yours, DANIEL COLMAN. STATEMENT OF CONGRESS OF INDUSTRIAL ORGANIZATIONS The new restrictions on imports of fats, oils, dairy, and several other agricultural products, required by section 104 of the Defense Production Act of 1951, are contrary to our national policy. They are also unnecessary for the protection of our domestic producers. These restrictive provisions of the act run counter to the objectives of our defense effort. An essential part of our security program is the attempt to bolster the economics of friendly nations in order to reduce the danger of Communist rebellion at home and to enable them to rearm with a minimum of economic dislocation. Our defense program depends upon the economic strength of the free world. It is a matter of pride to all Americans that this country has aided western Europe to take a long step forward toward economic rehabilitation. A major emphasis in our aid program has been to encourage the nations of the free world to increase their production and export of many products. Imports into this country of agricultural products, subject to the act's restrictions, are sources of dollar earnings for foreign nations. These imports involve very small percentages of the volume or value of our domestic production. But they form a relatively important source of dollar earnings for many of our allies abroad. Such earnings are a matter of dire economic need for the nations of the free world. The import restrictions of the Defense Production Act have already aroused vigorous protests from such friendly nations as Canada, Denmark, France, Italy, the Netherlands, New Zealand, and Switzerland. These countries are now faced with a drop in dollar earnings. Any major declines in the dollar earnings of our foreign friends will compel them to reduce the living standards of their people or to slow down their rearmament programs. These alternatives, which we seem to be thrusting upon our friends, spell danger to our own national security. They undermine significant aspects of our foreign policy. Ever since the end of the war, we have been attempting to help friendly nations to reach financial independence. Yet, we also seem to be convincing them that it will be impossible for them to meet their essential dollar needs by increased exports. The restrictions on these agricultural imports have been interpreted by the State Department as in direct violation of the trade agreements, negotiated in good faith by our country with foreign nations, under the Reciprocal Trade Agreements Act. They represent, in effect, a violation of our word. Trade restrictions beget retaliation. Confronted with restrictions on its exports, a country is compelled to readjust its economy. A set of barriers to international trade in one country breeds a set of barriers in another. Counter restrictions by other countries against our exports are a strong possibility. Retaliatory actions against United States agricultural exports-such as cotton, tobacco, citrus fruits, and apples-may well be taken. Farmers, themselves, may suffer from the results of the attempt to protect them by new restrictions on imports. For over a decade, we have been preaching to the nations of the free world the importance of reducing barriers to world trade. Our Government has gained in world stature as a result of its work to reduce or eliminate trade barriers, whether imposed by governments or private cartels. These principles continue to be basic to our national interest and policies. But we violate them in the deed when we imposed new restrictions on imports. The moral position of the United States is at stake in this matter. Are we, as a Nation, consistent when we advocate competition and increased world trade, while we shut the doors on the import of several agricultural products? Yet our position of world leadership rests upon the moral quality of our policies as well as upon our material wealth. The new import restrictions tend to breed skepticism of American policy. They seem to give evidence to cynics and neutralists abroad that our generous policies are a front for evil intentions. In this world of 1951, we cannot afford to act with a lack of maturity, foresight, and wisdom. We can hardly expect the North Atlantic Alliance nations, for example, to have firm faith in our foreign policy-which is so essential to the security of the free world—when we hamper their economic development by petty restrictions. It is not possible for us to continue our position of leadership in the free world by adopting isolationist economic policies. Section 104 of the Defense Production Act is not necessary for the protection of American farmers. The facts underscore the utter pettiness of the restrictions. The dairy industry is the major one involved in the provisions of the law. Yet the dairy farmer's prosperity is not threatened by imports. The value of dairy product imports from all sources is only six-tenths of 1 percent of the income of dairy farmers. Butter is one of the items subject to the new restrictions. Butter imports into this country have been about 1 percent of our domestic production, except in rare years of low production when imports reached a not-too-staggering 3 percent. Of the dairy imports restricted by the law, cheese is the most important. The volume of cheese imports is now less than 5 percent of United States cheese production. Domestic cheese production is at an all-time high, as is domestic cheese consumption. American cheese producers do not need the protection imposed by the new import restrictions. Our cheese products, for the most part, are mass-produced. It should be noted that much of the cheese imports are specialty cheeses-such as Italian cheesesthat are not produced in this country. American consumers who prefer specialty cheeses should not be penalized, especially when the imports are a very minor factor. Last year's production of Cheddar cheese-the major United States cheesewas about 900 million pounds. Imports of that cheese in 1950 amounted to 13 million pounds-under 11⁄2 percent. Can we face the free world and maintain that such insignificant imports, as compared with United States production, constitute a threat to our dairy producers? Is it for this that we undermine our international reputation and the value of our economic and military aid programs? Dairy prices haven't shown any ill effects from these minor imports. Between June 1950 and July 1951, the wholesale prices of farm products rose 17 percentmore than the all-commodity wholesale price index. And in that same period, wholesale dairy prices increased over 23 percent. In 1946, when imports from the war-devastated countries were infinitesimal, the wholesale price of butter on the Chicago Exchange was 61.9 cents a pound; the wholesale price of Cheddar cheese on the Wisconsin Cheese Exchange, at that time, was 34.8 cents a pound. But during the first half of this year, after imports had picked up, average wholesale prices were 68.3 cents a pound for butter and 38.1 cents a pound for Cheddar cheese. The measure now under consideration is apparently a piece of special-interest featherbedding. It violates our reciprocal trade agreements and is contrary to the welfare and best interests of our Nation. It represents a petty folly that should be removed from the statute books without delay. Hon. BURNET R. MAYBANK, INTERNATIONAL HOUSE, New Orleans, La., September 7, 1951. Chairman, Banking and Currency Committee, DEAR SENATOR MAYBANK: In connection with the hearings on import-control provisions of Defense Production Act of 1951, we respectfully submit the attached memorandum, which sets forth the salient provisions of the Andresen amendment, the announcement of the Production and Marketing Administration of the United States Department of Agriculture and our analysis of the past history of production, exports, and imports of cheese and of the effect of the said amendment and announcement. We respectfully submit that the restrictions imposed by this amendment are in themselves unnecessary and not warranted by the record of our exports, which consist practically altogether of Cheddar-type cheese, and our imports, which consist practically altogether of the specialty-type cheeses, mainly noncompetitive with domestic production. We also beg to submit that the proposed allocations based on historic record will favor the issuance of import licenses to the concerns concentrated around New York and will effectively deny import licenses to the Gulf coast in general and to New Orleans firms in particular. We here have worked hard to keep in step with our national policies, have secured the appointment of several foreign-trade commissioners of European countries, who jointly with us have begun to move imports of various types of merchandise through New Orleans and to the distributing centers of the Mississippi Valley. Both the previously discussed action and the principle of the base period as adopted therein could well set a precedent for other products and nullify the efforts of the Gulfcoast cities undertaken in harmony with and at the urging of the Departments of State and Commerce in order to assist in the balancing of our export and import trade. May I express our strong feelings in this matter and hope that the remedial legislation will be initiated by you and your committee as soon as possible. Respectfully yours, CHEESE MICHAEL M. MORA, World Trade Development Director. UNITED STATES DOMESTIC PRODUCTION, CONSUMPTION, IMPORTS, AND EXPORTS This paper constitutes an effort to present a picture as to how the United States cheese market is affected by imports from abroad. It is prepared in connection with the recently passed Andresen amendment to the Defense Production Act, sharply restricting imports of cheese. The amendment itself and its implications are discussed in a separate paper. Statistical data constituting the basis of this paper, secured from the most reliable sources available, are attached. While figures covering the United States domestic production prior to 1941 are not available, it is estimated (on the basis of domestic consumption, imports, and exports) that production of all types of cheese during the years 1938 and 1939 amounted to some 720,000,000 pounds per annum. Civilian consumption during these years ran at 5.8 pounds per capita and imports amounted to 55,000,000 pounds per year, constituting about 7.5 percent of domestic production. During the war years and those immediately following the war, the picture naturally changed radically. In prewar years our exports were negligible, not to say nonexistent, amounting to some 2,000,000 pounds a year. During the war and immediate postwar years our exports were gradually mounting (from 23,000,000 pounds in 1940 to a peak of 249,000,000 pounds in 1945) and in later years were steadily decreasing (to 47,000,000 pounds in 1950). The increase in exports was undoubtedly due at first to the closing of European sources of supply during the war and later, after the war, to the foreign-aid program. Naturally, Western European countries, substantial recipients of United States cheese in immediate postwar years, gradually restricted their imports, along with the expansion of their domestic production. The following table serves illustration: an During calendar years 1949 and 1950 European imports from the United States quite naturally decreased (we still maintain, however, a market in Europe primarily for American Cheddar) but the United States retained its cheese exports to other parts of the world, notably to the Latin-American countries and to other areas as can be seen from the following table: The American cheese industry always specialized (and continues to do so) in two types of cheese: American Cheddar and cottage (curd and creamed). In 1938 and 1939 the domestic production of Cheddar cheese (figures for cottage cheese are not available) amounted to about 80 percent of the total. The following table shows the domestic production of American Cheddar and cottage cheese as compared to the total United States cheese production: Later figures are not available. The remaining 9 percent accounted for the production of all other types of cheese. While the production of these types increased since 1941, it did not change the ratio between the production of Cheddar and cottage cheese and other types of cheese. Cottage cheese, incidentally, was produced for domestic consumption and was not exported. The increased domestic production of cheese (an increase of 40 percent between 1938 and 1950) was absorbed mainly by the increased domestic consumption, not only because of the United States increase in population, but because of the increased consumption per capita. The total civilian consumption increased from 1938 to 1950 from 759,000,000 pounds to 1,100,000,000 pounds per annum, i. e. by about 30 percent. The per capita civilian consumption is shown in the following table: a per capita increase from 1938 to 1949 of about 20 percent (during the war years cheese consumption was rationed). |