2. H.R. 10650: (a) The portions of this measure that pertain to the taxation of the income of foreign subsidiaries and to so-called tax haven companies will not encourage and promote American foreign trade, but will have just the opposite effect. This bill will place them at definite disadvantages in competing for business abroad with British, French, West German, Belgian, Dutch, Swedish, Italian, and Japanese companies.

This is not in conformity with a solid, undeviating effort of our Government to expand our exports.

B. We propose that Congress face the facts of foreign trade; and 1. Enunciate a foreign trade policy.

2. Pass a permanent act to carry it out, that will

(a) Provide for a Trade Expansion Commission of seven members appointed by the President, by and with the consent of the Senate and subject to approval by the Senate, composed solely of able men of good character, each of whom has had at least 10 years of successful experience as a foreign trade executive of an American company in planning or handling or financing the business of his company abroad. (b) Their terms of office, initially determined by lot, to run for 1, 2, 3, 4, 5, 6, 7 years, and thereafter for 7 years each.

(c) Their salaries to be commensurate with those paid such executives in conducting such foreign business.

Let me interject there that the members of the Executive Commission, the high authority of the Coal and Steel Community and of Euratom are paid $15,000 to $18,000 a year, free of tax, they receive pensions, they receive their salaries for several years after they are out of office. They are forbidden to have anything to do with any business enterprise at all while in office and for several years thereafter. Their compensation would be equivalent to about $75,000 or $100,000 in the United States. We need men of that caliber on this job.

(d) Each to sever all connections with any American company engaged in foreign trade.

(e) Any member removable for cause at any time by a two-thirds vote of both Houses of Congress.

Foreign trade is a business proposition. Take it entirely out of politics and put it in the hands of competent American businessmen, and we will have negotiators at least the equals of their opposite negotiators abroad on tariff reductions.

(f) Make the present Tariff Commission a division of the Trade Expansion Commission.

3. Provide for a Trade Expansion Council composed of able representatives of the Department of State, Commerce, Treasury, Agriculture, and Labor, and other departments, too, if that is desirable, to be available for conference and advice and to be free to offer their views on pertinent matters as they may determine.

There is an Advisory Council in the Common Market. The members vary depending on the subject before them. If it is agricultural, it would be the ministers of agriculture of the governments of the six nations; if it is something else, e.g., mining, it would be the minister of mines. They have a permanent secretariat that is on the job all the time cooperating with the Commission.

4. Provide specifically that neither the President, or any Cabinet officers or other member of the executive shall order, direct or control the action of the Trade Expansion Commission, but Congress by

joint resolution may call the Commission's attention to matters that Congress feels merit consideration and action.

These, of course, are suggestions, but we do wish to emphasize the need of having problems so complex and important as these before our country entrusted to men of the requisite practical experience and stature. These men are to be found in the field of American foreign business.

C. Congress should consider H.R. 10650 and H.R. 9900 together and bring them into harmony with a long-term solid policy for the advancement of American foreign trade, and delete any and all side issues that do not advance that policy.

D. The Common Market has been set up as such an instrumentality, freed of politics and independent of orders and directives of the executives of the six component nations, with a High Court of Justice that is above the courts of the six component countries.

E. We request leave to file supplemental material on H.R. 9900, to be incorporated in the record.

The CHAIRMAN. Without objection, you may have that permission. Are there any questions?

Mr. MORROW. I would like to file this little addition which shows the prices of certain American machines made here and the same or similar machines made abroad and the prices at which they are sold f.o.b. the foreign and the American factories.

The CHAIRMAN. Without objection that, too, may be included in the record.

(The document referred to follows:)

Joy Manufacturing Co.-Comparative prices f.o.b. factories, certain mining and construction products

NOTE. These are the list prices of these machines, but under the stress of international competition, they frequently are sold at prices below those listed above. These prices may not agree with previously submitted exhibits as no freight, export packing, etc., are included in above list prices. They are all f.o.b. plant of origin.

From these figures, it is evident that many American products, with comparable European competing units, are not in position to be sold in Europe if there were no import tariffs into the Common Market, nor in other Western European countries at all, because American factory costs are so much higher than those in Europe.

It is said that American productivity is superior to that of Western European factories. This is a broad generalization and can be very dangerous if applied to a particular segment of our foreign trade. It may be true in some factories and for some products, and not apply to others at all.

In the President's message, he speaks of American coal miners being paid 8 times as much as Japanese miners are paid, and goes on to say that American miners produce 14 times as much as Japanese miners produce. This is no meas ure of the American productivity. This difference is caused by the very difficult geological conditions of the Japanese coal seams. They are spotty, thin, irregular, in comparison with the fine conditions in American coal measures.

We could take you to mines in South Africa, where Joy machines, exactly like machines used in the United States, are being operated by native labor, and the productivity is equal to, or even better than, that in American coal mines.

We could also take you to a mechanized foundry in France. The men there are paid by the piece, the good piece. That foundry makes steel castings ranging in weight from 2 to 8 pounds. They operate on a tolerance of two onehundredths of an inch, and their scrap loss is only 2.4 percent. We do not know a foundry in America that can match that record.

No generalizations in this field are safe. It requires attention to the individual product and the individual market into which it is to be sold, as indicated by the examples cited above.

J. D. A. MORROW,
Joy Manufacturing Co.

Mr. BURKE. What products does your company make? Mr. MORROW. Mining machinery, oil drilling machinery, construction equipment.

The CHAIRMAN. Are there further questions?

Thank you, Mr. Morrow.

Mr. MORROW. Thank you, Mr. Chairman.

The CHAIRMAN. Mr. Kuckuck, will you please identify yourself for the record?

STATEMENT OF F. C. KUCKUCK, MEMBER, BOARD OF DIRECTORS, AMERICAN FORGED FITTINGS & FLANGE ASSOCIATION, CHICAGO, ILL.

Mr. KUCKUCK. My name is Fred Kuckuck, with the Taylor Forge & Pipe Workers in Chicago. I represent the American Forged Fittings & Flange Association, as director of that association and as past president of the association.

The CHAIRMAN. Will it be possible for you to conclude in the time we have allotted to you?

Mr. KUCKUCK. I would like to conclude a little bit earlier to encourage possibly a few questions because there are some things that you want to know that I want to tell you.

The CHAIRMAN. If you leave out any parts of your statement do so with the understanding that your complete statement will be made part of the record.

Mr. KUCKUCK. I have a statement which I trust is in front of you. I do want to mention one or two highlights because some of the fundamental points I would like to say a few words on rather extemporaneously.

We are manufacturers of welding fittings and flanges which are piping components using as the junctions for various sections of pipes and valves. It is a very specialized industry from the standpoint that it does not go along with the category of tube and pipe, as such, from the international classification standpoint. That is one of the points

we wish to make.

Now, in our acknowledgment of the invitation here to testify here, and I want to say it is a privilege to be here, it is not a privilege that I hope will be the last one although if the bill is passed in its current form, I do not see the opportunity for testifying in front of a legislative body which could act effectively in the administration of tariffs. It is not our purpose to debate the free trade aspects of this rule because, frankly, we do not feel that the bill itself guarantees free trade but seems to rather concern itself primarily with setting up authorities and mechanisms which might be used to implement free trade policies in the event the Chief Executive in office at that particular time might choose to move in that direction.

Much of the prior testimony, particularly by proponents of the bill, has been directed at this free trade aspect which, by virtue of the widespread publicity which has been given to such testimony, has tended to establish in the mind of many people that a vote for this bill is a vote for free trade and that a vote against the bill is reactionary or a vote for protectionism.

Now, I cannot say that this is sinister that such an impression should have been foisted on the American people, but it is dangerous that the focal point of discussion should be around this aspect rather than around one of the most fundamental aspects of the bill, which brings me to the first of two points we would like to make.

We as a trade association representing an essential industry and myself as an individual do not oppose freer trade or lower tariff barriers to encourage free trade per se. However, we do very much oppose the concept of bartering essential industries on the very broad general product classifications which are proposed by the EEĊ.

In the case of our own particular industry, we would be included in the standard international trade classification classified as tubes, pipes, and fittings of iron and steel. Our product is relatively standardized but still significant to the extent of $150 million volume and responsible for over 15,000 jobs, and still it is relatively small when compared to the general iron and steel basic pipe and tubing business which literally runs into billions of dollars.

Thus it would not be unreasonable to assume that our industry which has only a relatively small part of this category might secure only cursory consideration with respect to the levels of tariffs as the thinking uppermost in bargainers' minds would be the substantially larger dollarwise and more significant laborwise pipe and tube industry.

Under provisions of this bill should it be adopted in its present form, our industry would be exposed to the possibility of tariff elimination by category action and I believe prior testimony has already indicated that major steel companies do not particularly oppose the bill nor do the labor organizations in the steel industry oppose the

It would, therefore, be assumed that they would be quite happy with with it or with any subsequent determination that was made by an appointee of the President in connection with this whole category. We, as an industry, would not.

Now, at this point, I think it is only fair to say that we have appeared prior in Washington before the Committee for Reciprocity Information, before the Tariff Commission, and before Chairman Dent's Subcommittee on the Impact of Imports on Labor.

It is also fair to state that the thing that our industry asks for, which was namely a freezing of tariff at its present level, was agreed to and at the most recent GATT conference there was no subsequent reduction in the tariff levels of flanges and fittings. So we can hardly say that what has gone on in the past is not within our category because it has been. However, what guarantee do we have that this will obtain in the future and what guarantee do we have on the general basis of tubing and pipe alone, which is a very dominating industry, that we would not be swallowed up in the decision made for that particular category group?

Also, we would like the privilege of explaining our position to a legislative body rather than to an executive appointed group. This seems to me to be the effective method which has been effective for years and the fact that in 1934 and 1957 a portion of the powers of Congress were handed over to the executive branch is no reason why this decision should not now be reviewed. We do not have the haste, the urgency, or the compelling economic situation that pertained during those years. Now I think is the time for this committee to again review their thinking on whether they should give to the Chief Executive the powers which the Constitution gave to them.

Let me ask this one question: Would you try to rationalize on the same basis the delegating of the power to declare war? I think not.

Let me ask one other question. Are you truly trying to circumvent the Constitution in rationalizing that these are reasonable powers to give to the Chief Executive? Why not forthrightly propose an amendment to the Constitution saying that you recommend that the powers of laying tariffs, levying duties, and conducting international trade should henceforth be given to the President and forthrightly ask for the two-thirds vote of both Houses, and the Senators and Representatives run on a platform which says that we wish now to delegate these duties to the President and ask for three-fourths of the States to ratify such an amendment?

It seems to me there has been sufficient challenge on this subject, there are a sufficient number of intelligent people that have questioned not only the constitutionality but all right of doing this, that it is now incumbent upon your group to recommend that we try this out as a congressional amendment when it comes to delegating powers that were given to Congress by the Constitution.

Some things always stay in your mind. Many years ago, my father read to me a statement from William Shakespeare's "Hamlet." It has stayed with me for many years. Up until now it is the most effective piece of advice I have ever known to be given to any man, whether young or old. It was the advice of Polonius to Laertes in which he said, "Take every man's counsel," and in this instance I believe "counsel" meant "advice," not criticism, but "take every man's counsel," and

81843-62-pt. 6- -13