is sit by and let the United States negotiate with the Common Market and we will get all the benefits anyway without giving anything.

I am inclined to believe that. I had the same feeling when I was in Hong Kong, the Philippines, and the other places, that these governments are going to let us do the negotiating with the Common Market and just sit back and give nothing and enjoy the benefits under the most-favored-nations clause, what we give away ourselves.

We do feel that the bill is too broad in scope. It delegates too much authority to the President and his representatives. We heard the story this morning that we need some businessmen on these committees.

It is not always easy to have a full understanding even by looking at figures. There are many problems that face us in industry today. We do think that industry should be represented. I was at the Geneva trade agreements in 1947 and only two of us were over there representing American industry.

One was for watches. I was over there representing gloves. I was quite surprised to see that countries like Norway, Denmark, Canada, Belgium, all had industry men there as advisers to the negotiating team but we in the United States had none.

I think that is something that is very, very important. In fact, not only did we have none, we were discouraged from going over there. I think very definitely, gentlemen, in writing this bill you have to give very careful attention to the peril point. The importance of it, you have to give it a lot of consideration and certainly you have to give this escape clause more attention.

Gentlemen, the "rule of reason" should apply, and "live and let live" guide our trade policies. Exporting the jobs of American workers defeats both.

Thank you.

Mr. KING. Thank you, Mr. Casey. The committee appreciates your giving us this message. We have had it before with respect to gloves. I think that a good look should be given to this particular commodity. You have suffered a long time.

Mr. CASEY. Yes; we have.

Mr. KING. Are there any questions, Mr. Mason?

Mr. MASON. No questions.

Mr. KING. Mr. Keogh.

Mr. KEOGH. I have no questions.

Mr. KING. Mr. John H. Zwicker. If you will identify yourself for the record, you may proceed with your statement.

STATEMENT OF JOHN H. ZWICKER, PRESIDENT, AMERICAN KNIT GLOVE ASSOCIATION

Mr. ZWICKER. My name is John H. Zwicker. I am appearing before you today as the spokesman for the American Knit Glove Associtation, Inc., of Gloversville, N.Y., of which I am the president, on behalf of the American knit handwear industry. We produce those gloves and mittens which are knit directly from yarn.

This industry is composed of the firms listed on the sheet titled "Knitted Glove Industry," which is appended to the copies of my state

ment. Included is a longer list of plants which are out of business, liquidated, merged, or closed indefinitely.

The firms knocked out of business are the victims of low-wage import competition and have all ceased operations since 1950, shortly after the postwar resumption of oriental imports.

Our experience with imports goes back to the early 1930's. At the outset of World War II, imports of knit gloves took about 25 percent of the American market. Today, the positions are reversed.

Our interest in H.R. 9900 is, therefore, obvious. We have had a long period of education through adversity. While we do not pretend to be omniscient, we can form a commonsense judgment of what is involved in legislation such as is proposed in this bill.

Frankly, we are quite taken back at the brazen twist in U.S. foreign policy which it would effect. The traditional policy of countenancing no injury to American industries would be supplanted overnight by a policy of anticipating and accelerating import injury.

This is inherent in the purposes set forth in title I, which includeto provide appropriate assistance to enterprises, workers, and farmers of the United States in adjusting to new conditions which may result from increased trade * *

There is to be no fence at the top of the cliff to prevent our fall; but there will be an emergency kit of untried medicines at the bottom of the cliff, in case we are still breathing after we hit the rocks at the foot of the cliff.

The need for assistance will result from the radically new 5-year grant of authority to the President to rewrite U.S. tariff schedules, not according to a formula or criteria which can be ascertained in advance, but rather according to circumstances within and outside of the United States at the time he proposes to make the changes.

The delegation of authority is clear as to where it rests under title II. What is not clear is how it will be renewed in future years, who will be exercising it, what executive departments will dominate decisions? No longer will we have the constitutional certainty that our industries will be able to rely upon congressional responsibility. Title III, Adjustment Assistance, competes with Alice in Wonderland. After the most serious study, we are convinced that this must be in the nature of a trial balloon.

Too little is known about how any such radical proposals are to be fairly administered, much less what equitable effect they will have. It may be predicted, though, that the partnership (or proprietorship) of the Government in the ensuing business life of injured firms and in the ensuing unemployment and training period of displaced American workers is going to be hard to stomach-that is, provided any such firms or workers choose to accept this distasteful experiment.

We wonder what truly promoted this entirely new approach to foreign trade policy. Certainly, the oversea producers continue to have us beaten with their lower wage rates and other lower costs; and their exploitation of the American market continues without the need for further tariff-cut inducements.

Certainly, tariff cuts and renewed promises of no American import quotas have not had the desired effect to date. The members

of GATT were given generous concessions by the United States in return for grudging tokens, with the understanding that all nations would trade together under the agreement, gradually achieving a great measure of freer and fairer trade.

Instead, the Europeans discriminated against the Orient and have now formed a trading bloc with the sole purpose of reversing GATT by setting up a tariff curtain against us and the rest of the World.

We think that what is called for now is greater recongnition by Congress of the already developed import injuries, plus automation unemployment, plus the annual increase of unemployment as our job market entrants exceed our job opportunities.

Now is the time to show greater respect for reality by revamping and strengthening the peril-point and the escape-clause procedures as part of an overall policy of injury prevention, rather than the proposed policy of awarding uncertain insurance after inviting the undertaker.

We recommend most sincerely that the committee put this bill aside as too radical a proposal in the face of today's economy. Mr. KING. Thank you, Mr. Zwicker. The committee appreciates your testimony.

Are there any questions of Mr. Zwicker? If not, thank you again. Mr. ZWICKER. Thank you, Mr. Chairman. (The above-mentioned list is as follows:)

KNITTED GLOVE INDUSTRY

MEMBERS OF AMERICAN KNIT GLOVE ASSOCIATION, INC.

Clydebank Knitting Co., Inc., Canal Street, Fort Plain, N.Y.
Gloversville-Continental Mills, Beaver Street, Gloversville, N.Y.
Knit-True Handwear Corp., 6 Division Street, Gloversville, N.Y.
Marr Knitting, Inc., 508 Main Street, Osage, Iowa

Sternwild Knitting Mills, Inc., 53 South Broadway, Yonkers, N.Y.
Leon F. Swears, Inc., 111 North Perry Street, Johnstown, N.Y.
Zwicker Knitting Mills, 416 North Richmond Street, Appleton, Wis.

NON MEMBERS

Allied Knitting Mills, 1239 Broadway, New York, N.Y.
Gelmart Knitting Mills, 33 Prospect Street, Yonkers, N.Y. (P.R.)
Hitchcock & Curtiss Knitting Co., 111 Lock Street, Nashua, N.H.
Manheim Knitting Co., 329 West High Street, Manheim, Pa.
York Glove Mills, 35 Saint Casimir Ave., Yonkers, N.Y. (P.R.)

OUT OF GLOVE BUSINESS, LIQUIDATED, MERGED OR CLOSED INDEFINITELY

Ackshand Knitting Co., Ballston Spa, N.Y.

Alma Knitting Mills, Inc., 11 East Pine Street, Gloversville, N.Y.

Albany Knitting Co., 373 South Pearl Street, Albany, N.Y.

Ashe Manufacturing Corp., 17 Washington Street, Rensselaer, N.Y.

Becopa Glove Mills, Inc., 4 Warburton Ave., Yonkers, N.Y.

Geo. Dorner Knitting Mills, 107-02 37th Ave., Corona, N.Y.

Eagle Knitting Mills (Glove Division), 507 2d Street, Milwaukee, Wis.
Figel Knitting Mills, Inc., 22-30 Orange Street, Albany N.Y.

Florida Knitting Mills, Inc., 20 North Coburn Ave., Orlando, Fla.

M. Friedlander Knitting Co., Milwaukee, Wis.

Glove Associates, Inc., 151 Ludlow Street, Yonkers, N.Y.
Glovemasters, Inc., 52 Saint Casimir Ave., Yonkers, N.Y.
Granite State Knitting Co., 18 Merrimack Street, Nashua, N.H.
D. C. Haber Knitting Co., 7400 Stanton Ave., Cleveland, Ohio
Hega Knitting Mills,, Inc., 209 Riverdale Ave., Yonkers, N.Y.

Interboro Knitting Mills, Inc., 209 Riverdale Ave., Yonkers, N.Y. (P.R.)

Jerome Knitting Mills, 289 Nepperhan Ave., Yonkers, N.Y.

Joseph A. Milstein Co., Inc., 64 Trinity Place, Albany, N.Y.

Mode Knitting Mills (glove division), 1319 South Michigan Avenue, Chicago, IL.
Modern Knitting Co., 732 North Fifth Street, Milwaukee, Wis.
Mohawk Glove Co., 42 Wall Street, Amsterdam, N.Y.

Nolde & Horst Co., Reading, Pa.

Reliance Knitting Mills Co., 640 Broadway, New York, N.Y.
Riverdale Glove Mills Corp., 93 Riverdale Avenue, Yonkers, N.Y.
Rivoli Knitting Mills, Inc., 151 Ludlow Street, Yonkers, N.Y.
Royalknit Glove Division, 19 West State Street, Johnstown, N.Y.
Scotsmoor Co., Inc., 29 North Market Street, Johnstown, N.Y.
Star Manufacturing Co., 243 West 17th Street, New York, N.Y.

Straus Knitting Mills (glove division), 350 Sibley Street, St. Paul, Minn.
Sweetwater Plant, Gloversville Knitting Co., 107 Morris Street, Sweetwater,
Tenn.

Waldorf Knitting Co., 243 West 17th Street, New Work, N.Y.

Wells Lamont Corp. (wool glove division), 1791 Howard Street, Chicago, Ill. Wings Knitting Co., 827 East Locust Street, Milwaukee, Wis.

OTHER

Max Lowenthal & Sons, 422 Clinton Avenue, South, Rochester, N.Y.
Portage Hosiery Co., Portage, Wis.

Royal Knitting Mills, Inc., 20th Street and South California Avenue, Chicago, Ill.
Mr. KING. Mr. Heinz.

STATEMENT OF HENRY J. HEINZ II, CHAIRMAN, H. J. HEINZ CO., PITTSBURGH, PA.; ACCOMPANIED BY MILO G. COERPER OF THE LAW FIRM OF COUDERT BROS.

Mr. HEINZ. Mr. Chairman, my name is Henry J. Heinz II. I am accompanied by Mr. Milo Coerper of the law firm of Coudert Bros. I support the President's trade expansion program because I believe that trade liberalization will, in the long run, benefit all particpating nations. I strongly favor increase in international trade as a means of restraining inflation, of promoting solidarity in the free world, and of strengthening the ability of the West to deal with the aggressive trade moves of the Communist nations.

Our trade expansion objectives call for an increase in our exports and a surplus of exports over imports.

Where is this to come from?

I do not think that we can be sure, in spite of our best efforts, of achieving a rapid expansion in our agricultural exports to Europe, since they will have to overcome not only tariff barriers, but administrative restrictions based on Common Market farm policy.

We must, therefore, assume that industry will be expected to carry the major responsibility for expansion of U.S. exports.

Let me pose some of the practical problems involved:

Marketing U.S. production abroad is now a very different thing from what it was when the United States had a virtual monopoly of mass production know-how.

In Europe our manufacturers must compete, successfully, with vigorous, expanding industries which have learned our business techniques and have been enjoying a more rapid rate of investment in plant and equipment than we have maintained in the United States in recent years.

Many European industrial groups and combinations have vast resources and market power. Their competition will be very tough. U.S. goods coming into the Common Market must gain a hearing in French, in German, in Dutch, in Italian; yes, and even in English.

American goods, American styles, American service, American quality and reliability, I can assure you, are not automatically accepted in Europe. In cases where favor has been won for a particular U.S. product it has taken great drive and effort.

In the judgement of businessmen with long experience in foreign trade our effective participation in the growing Common Market will require a combination of trading and investment.

Trading alone without the backup of substantial investments will not attain our objectives of large increases in exports.

The slogan, "Shall we export our plants or shall we export our goods?" is a dangerous oversimplification. There is no such choice. The imaginary choice is a product of theoreticians, not of practical business experience.

The situation with which we must deal is far more complex. Increased trade will surely involve increased investment.

To mount a strong export drive today, it is necessary for many individual enterprises to enter foreign markets with vigor, resourcefulness, and a willingness, where necessary, to invest considerable capital.

Clearly, lowering of tariffs will help to expand our exports, but the process is not automatic.

In all cases, to succeed in an export drive we must strengthen our business organizations overseas. In some cases, it may require production of components to be supplemented by exports from the United States or even full-scale production of particular lines in order to supplement other lines which are exported to the foreign market.

No kind of activities can be excluded be they importing, local finishing or packaging, or even full manufacture of some lines supplemented by others from the United States.

In one way or another, the expansion of business in the Common Market will, in my opinion, require substantial investment of capital and this requires the moral support of our Government.

Do we have this moral support?

I am afraid we do not. Foreign investment has always had its detractors. The Communists revile it as the grasping hand of American capitalism. Leftists in Europe speak of "coco-colonization" and intrigue against it. States in Brazil expropriate it. Cuba seizes it. The great development plan of India envisions Government-financed competition with private enterprise.

But something new has been added.

I regret that recent action by the House on the taxation of foreign subsidiary companies goes beyond the suppression of abuses and true tax havens and treats our direct investment in Europe as being of dubious value to our national interests.

This is the way business interprets the recent atcion taken on the taxation of foreign subsidiaries. A Senator has stated on the floor of the Senate, within the month, that if this new tax does not stop the flow of investment to Europe that, "we will be forced to take more direct and more drastic steps."