ity. No instrumentality of lesser total economic cost is available to us for this purpose than the reciprocal trade program. It is apparent that organized labor recognizes this fact, as can be evidenced by the unanimous backing given the pending legislation by the AFL-CIO at its recent convention. There are, however, many who would hope that our export volume can be maintained or even increased without maintaining our doors open to the goods of foreign nations through reciprocal trade. They urge that we forget the lessons of our past and move back a quarter century in time, before we learned, much to our sorrow, that a rigid and inflexible trade policy with a minimum of world trade was disastrous to American interests including the American maritime industry. As proponents of the program, we are mindful that since its birth in 1933. the prime motivation for the program has had differing emphasis as the years moved on. Originally, purely dedicated to creating more trade in the midst of severe economic depression, it became closer allied, in the early postwar period, to overcoming the stifling effect of dollar shortages overseas. These shortages dictated that foreign nations reduce their spending for our merchandise. Clearly, in addition to foreign-aid considerations, the soundest and most direct way we could overcome the frustrated demands for our goods abroad was to purchase more from overseas. Today, the reciprocal trade program, while still deeply rooted in many respects in what motivated its earlier support, has again shifted emphasis. The survival of western culture and traditions make it more necessary than ever to coordinate our trade policy and practices with our friends and allies abroad, both real and potential. This has been clearly recognized by the nations constituting the European Common Market. We firmly believe that, sputniks notwithstanding, our Nation's stature as well as the cornerstone of world peace and democratic unity, are menaced today by the potential of Russia's new economic policies. Khrushchev publicly called it "a war on the United States in the peaceful field of trade." We dare not, by jettisoning the reciprocal trade program, announce to the free world that we dismiss that threat by leaving the arena of commercial international exchange. Since the close of World War II, ours has been a bipartisan, consistent and not inexpensive policy of creating closer economic ties with freedom-loving peoples overseas so that they could turn their backs on international communism. Frankly, we know of no basis on which you can soundly reverse that philosophy. Yet, a failure to extend the reciprocal trade program, which is now an intimate and necessary part of that policy, would be just such a reversal. While we are ever mindful of the American maritime industry's stake in the extension of the reciprocal trade program, we appreciate that an expanded import volume may require local adjustments in communities and industries meeting foreign competition. Our import volume last year of $13 billion was some $6 billion below our exports. But of that $13 billion import volume, virtually $11 billion was in goods totally noncompetitive with United States production, while $2 billion was in materials in mild or severe competition with United States products. We feel that reasonable safeguards against the aforementioned potential injuries are contained in the proposal before you. Moreover, we are certain that if additional safeguards are reasonably required, they will be provided. Most of all, however, we cannot overemphasize that the greatest protection against such injury is the built-in self-adjustment which takes place in an overall expanding economy through increasing domestic purchasing power. The potential loss of domestic purchasing power which would be created by the failure to produce for a substantial export market offers us no solution. If you limit, by rejecting reciprocal trade, the expendable element of the domestic economy our world commerce affords, you may require fewer, minor "local" adjustments to foreign competition. By the same token. you will require more, major and nationwide adjustments to the disastrous effects of a declining export market. To be forced to attempt the latter under any circumstances could be dangerous. In the face of today's economic situation it may well prove catastrophic. United States production of movable goods and the proportion exported Source: U. S. Department of Commerce, Exports in Relation to United States Production, 1956, World Trade Information Service, pt. 3, No. 57-36. Senator HARRY F. BYRD, Chairman, Senate Finance Committee: BOSTON, MASS., June 24, 1958. Were it not necessary to leave for Europe, I would request permission to testify before your committee on behalf of the President's reciprocal-trade program. Please refer to my testimony before subcommittee of House Ways and Means, December 13, 1957, and before House Ways and Means on March 12, 1958, because I believe that dividing the free world economically by trade barriers makes more difficult international political problems and mutual security. I urge the President's program be passed without crippling amendments. Specifically, I recommend we continue to reduce trade barriers, including tariffs, and that the President's trade-agreements authority be extended at least 5 years, with authorization to reduce rates, as requested by the administration. I strongly believe a liberal trade policy will contribute greatly to economic well-being of our people and those throughout the free world, and wish to have my position filed for the record of your committee. THOMAS D. CABOT. GALVESTON, TEX., June 23, 1958. Hon. HARRY F. BYRD, Chairman, Senate Finance Committee, DEAR SENATOR BYRD: The purpose of this letter is to express my support for H. R. 12591 as passed by the House of Representatives. I wish this year's renewal of the Trade Agreements Act could be much stronger than what that bill provides. H. R. 12591 is the least we can do in the field of foreign-trade policy. I strongly oppose any more weakening amendments-especially the substitution of a 3-year extension for a 5-year extension. From every standpoint, there is a real need this year for a Trade Agreements Act that measures up to the reality of the challenge the Nation faces, both from the Soviet economic threat and from the fast-moving pace of economic developments in the free world itself. In the face of that challenge, even the kind of trade-agreements legislation passed in 1955 would not be adequate. It is nothing short of fantastic that, after nearly 25 years, the program of trade liberalization is still fighting for its life and that now, of all times, the threat to is continuation in a viable form is greater than it has ever been. Why is this so? One might think that the American economy and the freeenterprise system that made it great were on the skids and did not have what it takes to move upward and onward to ever-rising standards of living. It certainly must look that way to our friends abroad. If more restrictive for eign-policy legislation is the decision of the Congress this year, the rest of the world has every right to say, among other things, that the American freeenterprise system isn't all it's cracked up to be. If the American economy cannot afford a policy of trade liberalization, who can? The result of import restrictions would be harmful division in the free world at a time when the free world ought to be united in its waging of cold war with the Soviet bloc. To pass trade-policy legislation more restrictive than provided in the House bill would be a disservice to the American people, a tragic misreading of what it is that makes the American economy tick, a totally inaccurate portrayal of the dynamics of our free-enterprise system, and an irresponsible act when seen against the Nation's foreign-policy needs in economic, political, and military terms. The bill you have before you is, in many respects, a forward step in the direction I believe we ought to be moving. I refer specifically to the 5-year extension and the proposed negotiating authority for the President. However, the proposed shift from 1945 to 1934 as the base year in escape-clause action is most unfortunate. I feel that the present trade-agreements program is loaded with enough baggage of weakening amendments, as it is, without another weakening amendment tacked on. I am amazed to find that even this bill-which keeps intact all the weakening amendments of the past and adds a new one of serious proportions-is, itself, in jeopardy. To say that this bill is in jeopardy is to say that the economic underpinning of free-world unity is in jeopardy, that an expansion of our vitally important export trade is in jeopardy, that our effort to keep in step with the emergency of customs unions in Europe and elsewhere is in jeopardy, and that an important part of our program to meet the Soviet threat is in jeopardy. There is no justification for restrictive trade policies when one considers all these things that are at stake. There is, in fact, no basis for a restrictive trade policy when one considers the fundamental economic strength of our country. I quite agree the Nation should do everything it can to lift itself out of the recession in which we now find ourselves. But import restrictions are a hindrance to this objective, not a remedy. Nor are they the way to meet the basic problems of those few industries-or, I should say, those few companiesthat are able to prove that their problems are caused, in whole or in part, by import competition. Methods that are more sound and more effective ought to be used. Even where import restrictions bring temporary relief, we must not overlook the impact of such a policy on the rest of the American economy, both immediate and for years to come. The Nation needs a stable foreign-trade policy that accurately reflects the capabilities of our free-enterprise system. The bill before you-H. R. 12591—is the minimum needed to meet that standard. With best wishes, I remain, Yours very truly, HARRIS L. KEMPNER. STATEMENT OF R. W. BISSONNETTE, OF STANDARD CARD CLOTHING CO., STAFFORD SPRINGS, CONN., PRESIDENT OF THE CARD CLOTHING MANUFACTURERS AssoCIATION This statement is made on behalf of the Card Clothing Manufacturers Association, whose members manufacture 90 to 95 percent of the card clothing made in the United States. (Card clothing is a specialized product used in the manufacture of textiles. It is decribed more fully below.) At the outset, we acknowledge that the economic strength and military security of the United States depend in part upon the economic health of other free nations, and that depends in part upon vigorous, two-way trade among nations. Such trade cannot be attained if unreasonable tariff barriers are erected by any one nation. It is equally true, however, that a small group of industries whose products are essential to the national defense exists. The demand for these products can, however, in time of peace, be met entirely by imports. Protection must, therefore, be provided for these industries by tariffs, or the national-defense program will be severely weakened. The manufacture and sale of card clothing is such an industry. Card clothing is so called because it is used to cover, or clothe, parts of carding, napping, or brushing machines that come in contact with fibers and textiles. Carding machines straighten, comb, and otherwise prepare textile fibers for spinning into yarn. Napping or brushing machines raise the ends of fibers in manuftctured cloth. Card clothing must be used with fibers of all kinds, natural (including asbestos) and synthetic. Card clothing consists of wire teeth inserted in a foundation of cotton, wool, or linen cloth or into felt, rubber, leather, or combinations of these products. Card clothing is, in other words, a belt with metal bristles at distances from one another that vary according to the use to be made of the clothing. The overall demand for card clothing is not great, but textile manufacturers must have a continuous supply. New textile machinery must have card clothing, and that on existing machines must be replaced from time to time as it wears out. The card-clothing industry is not only relatively small; it is also highly specialized with respect to machinery, personnel, and materials. Machinery to manufacture card clothing, called card-setting machines, is specially made. If any existing machines were to be scrapped as a result of financial difficulties in the industry, they could not be replaced quickly from sources in this country. They would have to be specially built, probably with great difficulty in finding parts and materials. The problems of specialized personnel could be even more critical. Card setters, who operate the card-setting machines, must be trained for the work for from 3 to 5 years. In addition, setters must have the proper temperament to become competent in the work. It is estimated, on the basis of industry experience, that, of each 100 trained machinists, only about 10 will become successful toolmakers, and, of these 10, only 1 is capable of mastering the trade of card setting. Thus, any decline in the industry that would bring about a loss of skilled personnel, or discourage the entry of replacements for men who retire, could injure the industry almost irreparably. In similar vein, the materials used to make card clothing are highly specialized and are available from few sources. There are only 2 sources of supply for foundation materials and 2 major sources for card wire. Any decline in the industry could result in the drying up of these sources of supply, with corresponding difficulties in trying to revive them during a national emergency. A defense emergency could, past experience indicates, increase the demand for card clothing in the United States by 50 percent. This increase would result partly from stepped-up production in the textile industry, and partly from conversion by many textile mills from one product to another. Conversion of a carpet mill to the production of blankets, for instance, would require the installation of a different type of card clothing. The industry must, then, be kept in a healthy condition so that it can meet the responsibilities that would be imposed on it by an emergency. Past trade agreement concessions granted by the Government on card clothing have already jeopardized the industry by permitting imports that can be sold at prices below those at which the product can be manufactured in this country. The following table will show the decline in domestic production and the increase in imports of card clothing: In 1957, the square feet imported was 22.85 percent of the amount produced by the association's members, and the dollar value of the imports was 11.66 percent of the dollar value of the domestically produced product. The value of the imports was $2.477 per square foot, and that of the domestic product was $4.85 per square foot. These figures speak eloquently for themselves. We realize that the question of revisions of reciprocal trade agreements and tariff rates is not before the committee. We have, however, gone into some detail in stating the nature of our industry and giving production and import figures so that you may better understand the need for strengthening the perilpoint, escape-clause, and national-defense provisions of the Reciprocal Trade Agreements Act. 27629-58-pt. 1—52 We approve the manner in which H. R. 12591 requires more extensive hearings than does the present law in the peril-point and national security provisions, and the greater authority given the Tariff Commission in connection with escape-clause investigations. We ask, however, that authority be vested in Congress to overrule the President by a majority vote if he does not accept the findings of the Commission under the peril-point and escape-clause provisions. We also ask that section 8 of H. R. 12676, relating to imports that threaten to impair the national security, be substituted for section 8 of H. R. 12591; and that the President's authority under the reciprocal trade measure be extended for 21⁄2 rather than 5 years. This statement is submitted on behalf of the Card Clothing Manufacturers Association, the membership of which includes the following manufacturers of card clothing: American Card Clothing Co., Fall River, Mass. Benjamin Booth Co., Philadelphia, Pa. Charlotte Manufacturing Co., Charlotte, N. C. Standard Card Clothing Co., Stafford Springs, Conn. All but one of these companies (Davis & Furber Machine Co.) are engaged only in the production of card clothing. Two domestic manufacturers are not members of the association. They are Redman Card Clothing Co., Andover, Mass., and Belton Bros. Card Clothing Co., Gastonia, N. C. Respectfully submitted, R. W. BISSONNETTE, President, the Card Clothing Manufacturers Association. WILBUR-ELLIS Co., San Francisco, Calif., June 30, 1958. Mrs. ELIZABETH B. SPRINGER, Chief Clerk, Committee on Finance, Senate Office Building, Washington, D. C. DEAR MRS. SPRINGER: I am writing this letter to express my support for H. R. 12591, the bill to extend the Trade Agreements Act for another 5 years. My support is based on a conviction that such a renewal and the negotiating authority the bill authorizes are essential if we are successfully to cope with the many new and rapid developments that are taking place and will be taking place in the countries with which we do business. The Nation's foreign trade policy, to have any meaning in the world of today, must be based on the premise that expanding export business is vitally important to the growth of the American economy; that expanded exports under private auspices requires expanded imports under private auspices unless Government is to be expected to pick up the tab for an increasing volume of the business we must do with the rest of the world. If one assumes the premise of a growing economy-a premise which I am sure you and the other members of the Senate will accept-then one must conclude that a world trade policy in the national interest is one that promotes the Nation's two-way trade. It is much easier for people to understand the benefits to the American economy from exports than from imports. The growing dependence of a growing economy on imports of raw materials in order to supplement the depleting, higher cost supplies from domestic sources is one of the facts of life gradually dawning on public awareness. What is not so clear to the general observer is the benefit to be gained from competitive imports-manufactured or in raw-material form. Competition and the response to competition are among the most important factors contributing to the development of the American type of free enterprise system and to the rapid growth of our economy. Competition from within our country and from outside producers stimulates new ideas and new methods. The American consumer benefits, and the servicing of his needs and appealing to his choice are an essential part of the dynamics of the American economy as we know it. Imports are also the most important source of the dollars foreign nations need to finance the purchases they make in our country. Exports are of vital importance to large numbers of American producers in both industry and agriculture. The importance of export business as a prop |