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Mr. BACHARACH. Will the gentleman from Maryland—I know he does not want to make a misstatement. He says the duty on razor blades is 380 percent?
Mr. LEWIS. 308 percent.
Mr. BACHARACH. The duty on razor blades is 194 percent, at the top, and some of them as low as 47.4 percent.
Mr. LEWIS. What page is that?
Mr. HILL. Now, if you are through I will ask another question. Getting back to the proposition in presenting this bill before the committee
Mr. LEWIS (interposing). I can give the correct statement now; if you will pardon me.
Mr. HILL. All right.
Mr. LEWIS. Razors and parts other than safety razors 302.1 percent. That was in 1928; in 1929, 338 percent.
Mr. BACHARACH. The gentleman from Maryland was talking about safety-razor blades.
Mr. LEWIS. Parts of razors, razors and parts. I was in error as to the blades.
Mr. Hill. I want to get in brief form the plans you have in your mind for this reciprocal agreement provision. You favor the reciprocal agreement proposition. Just how would you carry that out? What agencies would you empower to enforce such an agreement, to negotiate and effectuate such agreements?
Mr. FARRELL. It ought to be taken up first with the State Department.
Mr. HILL. Taken up through the State Department? Just what function would the State Department have to perform?
Mr. FARRELL. The function of negotiation and submission.
Mr. Hill. They would have to have some basis in tariff rates, would they not?
Mr. FARRELL. If you are not adjourning today, I will write my ideas out and give them to you in the morning.
Mr. Hill. I would like to have your plan.
Mr. FARRELL. I want to give you an intelligent answer, not one that is the result of a little confusion by reason of
Mr. HILL (interposing). I will be very glad to have you do that, but let me ask you this now. You are not opposed to the idea of the President acting as the agent for the Government in negotiating and carrying out these high reciprocal agreements?
Mr. FARRELL. No; but I would like to see him do it in cooperation.
Mr. HILL. You want some limitations on the authority which he can exercise in negotiating agreements?
Mr. FARRELL. In normal times.
Mr. Hill. And you set out here in these recommendations on the last page of your statement the limitations that you would impose upon the agency negotiating these reciprocal agreements, and he must, I take it, under your third recommendation, first be advised by this tariff adjustment board of the limitation below which he cannot go in the matter of rates on commodities which shall be embraced within trade agreements!
Mr. FARRELL. They would make the recommendation. They would not make conditions as to what he could do or he could not do.
Mr. Hill. They would practically fix the rates.
Mr. HILL. Recommend the rates, but under the powers suggested in your other recommendations, the President could not go below those rates, below the formula, as you call it. Now, would not that be quite a cumbersome piece of machinery that probably would not be effective in securing the trade agreements ?
Mr. FARRELL. I do not consider it so. I think I could clarify that paragraph in a manner that would make it more intelligible to you.
Mr. HILL. There is necessity for speed in negotiating these agree. ments, and would not some of these handicaps which you have suggested here to free exercise of power by the President retard the operation ?
Mr. FARRELL. In some instances. There are many things that I would like to see done overnight. I have a few in my mind now, but I would prefer not to express them, as to what could be done to bring about a better commercial situation in some countries.
Mr. Hill. Well, some countries can in 24 hours' time change their tariff rates.
Mr. FARRELL. Of course, the Premier of Canada makes an order in council and it is done that morning. And Stanley Baldwin, Premier of Great Britain, does the same thing, but they all go back to their Parliaments for confirmation.
Mr. HILL. But we do not go back to our Parliaments in case of the flexible provisions; we do not have to do that.
Mr. SHALLENBERGER. I would like to ask you a question there. In your "reciprocal-tariff negotiations" here you say that the flexible provisions of the tariff act should be maintained in applying the formula. Now, what do you mean by that? Then on page 13 in discussing the same subject, you say: “We would call attention, therefore, to the fact that the proposed bill by placing a 50-percent limitation upon the authority to modify duties, and also prohibiting the transfer of any article between the dutiable and free lists (both of which are part of the present flexible provisions of the tariff), does not contain the much more essential basic tariff formula of basing rates of duty, applying to any commodity, on the principle of equalizing foreign and domestic production costs plus transportation. When Congress delegates to the Executive authority to modify rates it is of first importance that Congress give indication to the Executive of its idea as to a' consistent'tariff policy."
That is you think we should write a formula requiring that the difference in cost of production at home and abroad should be considered before the duty was modified ?
Mr. FANRELL. There ought to be a minimum. Of course, it is the duty of Congress to write the formula.
Mr. SHALLENBERGER. In your statement you say that it should contain the essential basic tariff formula of basing rates of duty applying to any commodity on the principle of equalizing foreign and domestic costs of production. Is that your idea of what the formula should consist of!
Mr. FARRELL. Generally speaking, yes.
Mr. HILL. Now, Mr. Farrell, as to the agency to supply the information necessary to change rates, such as you would vest in the
Tariff Adjustment Board, I call your attention to the fact that
in answer to Mr. Hill a moment ago, that you approved delegating this power to the President. You said, "Yes" to that question?
Mr. FARRELL. Yes, sir.
Mr. TREADWAY. And then you added, in a rather undertone, the further sentiment, which I at this distance understood you to say 6. Within certain control by Congress."
Mr. FARRELL. I meant by that, through the agency.
Mr. TREADWAY. I do not know whether the stenographer got that sentence or not. I think it is very important that that should appear as part of your answer to Mr. Hill.
Mr. FARRELL. Yes, sir.
Mr. TREADWAY. Now, I just wanted to make sure that the record showed that. I note in your prepared statement here, your last sentence says that the above-expressed attitude on this bill is not one of antagonism but more or less a desire to offer some suggestions that you think would improve the situation?
Mr. FARRELL. Yes, sir.
Mr. TREADWAY. At the top of page 7 you say that there should be some provision whereby changes made in tariff rates in connection with reciprocal negotations should not be below such reasonable protective levels as may be determined under a formula established by Congress. Mr. FARRELL. Yes, sir. Mr. TREADWAY. You consider that very important, do you not ? Mr. FARRELL. Absolutely.
Mr. TREADWAY. The whole scheme of your support is based on Congress having something to say about this final adjudication.
Mr. FARRELL. It is.
Mr. TREADWAY. What is there in the bill that is before us that indicates that we retain that power if this bill is passed ?
Mr. FARRELL. I do not see anything, but I assume that the purpose of these hearings is to get information and to receive testimony, and then I suppose between yourselves and the committee you will decide that.
Mr. TREADWAY. That has formerly been the method of procedure. I will agree with that, but within the past year it has not been. I want to make that very plain.
Mr. HILL. Will the gentleman be a little specific in that statement?
Mr. TREADWAY. I could be very specific, but we have agreed not to get into any partisan argument here in the committee, so perhaps we had better retain that idea.
Mr. COOPER. You make a rankly partisan statement and then say there should not be any partisan statements made.
Mr. TREADWAY. I will back it up right here if you want me to. I will be glad to get into any kind of an argument, but that is unfair to the witness.
Mr. HILL. We just recently got through with the revenue bill, and I do not think
Mr. TREADWAY (interposing). No; on the revenue bill we were not given that copy in advance. I will say that. I do think we have had—I see the gentleman from Kentucky taking off his glasses. He wants to get into this (laughter). I think we had better get back to the witness and consider this in the privacy of our executive session. I do think, however, Mr. Farrell, that I am fair in saying that there has been a little change in the method of bills being handled by this and other committees in recent times, but I want to return to your report here wherein you say that there should be, in your judgment, a definite and specific power left in the hands of Congress to deal with tariff subjects in reciprocal arrangements between this and other countries.
Mr. FARRELL. As stated.
Mr. TREADWAY. Now, you say--and I am sure that that is the spirit of it—that it is not one of antagonism, but as I analyze your three recommendations they are distinctly contrary to the language of the bill. In other words, it would seem to me that your board, or the Chamber of Commerce whom you are here representing, practically put themselves on record as against the bill. For instance, you say that in the interest of reciprocal tariff negotiations, Congress by law should make a definite limitation that no rates should be lowered to a point where American industry and agriculture shall be subjected to destructive foreign competition. So far at least in the language of the bill we have not reserved that right, have we? You cannot find that language?
Mr. FARRELL. I cannot find it; no, sir.
Mr. TREADWAY. Now, in this matter of reciprocal tariff arrangements, I have had a good deal of difficulty, Mr. Farrell, in finding out from representatives of the Government just what they would want to reciprocate with and how. Could you give us any information along that line? You are a believer in the reciprocal method ? That means, of course, sending into this country more goods than are now brought in under our tariff rates, does it not?
Mr. FARRELL. Not necessarily. I have never felt that anyone in the United States should apologize for the country having a balanced trade in its favor.
Mr. TREADWAY. No, sir; I agree with you there.
Mr. FARRELL. It seems to be almost a crime nowadays if our exports are in excess of our imports.
Mr. Hul. Is there any opportunity in your reciprocal program for increasing our importations without putting out of the market our own manufactured goods in this country?
Mr. FARRELL. Yes, there is.
Mr. FARRELL. Well, we would have to take some particular country to do it with.
Mr. TREADWAY. I have not been able to get that information and I would be very much delighted if you would give it to us.
Mr. FARRELL. Take, for instance, the question of, we will say, silk Again from Japan. We take 90 percent of the silk that is exported. Mr. TREADWAY. You do not draw it!
Mr. FARRELL. No; we do not draw it. But we are a customer. We might use rayon or we might develop something that would take the place of silk. But while we are doing that, Japan goes and makes an agreement with India to take additional supplies of cotton from that country, thereby decreasing the amount of cotton that they take from this country.
Mr. TREADWAY. That is a reciprocal class of trade that I would fully approve of, because we do not grow silk. The silk worm flourishes, I believe, in very small amount in a certain locality in California, or perhaps is artificially grown some place out there, but commercially we do not produce silk.
Mr. FARRELL. No.
Mr. TREADWAY. Therefore we would not find any reason to argue on that, of course.
Mr. FARRELL. You take the article tin, pig tin, which comes from the Straits of Malacca-some of it comes from Siam, but most of it from the Straits Settlements. The United States is the largest consumer of pig tin. Somebody thought they found some tin in the Black Hills a few years ago, but it was not there. That was the first time that they began to think about the blue-sky law. A syndicate controls the production of pig tin. It comes from three places: From the Straits Settlements, from the Dutch Island of Java, and some from Tasmania. Two years ago the price of tin was 22 cents a pound. I think today it is 54 or 55 cents. It has gone up very much. Now, there are certain substitutes, for instance, Bolivian tin that contains arsenic, which can be treated and gotten rid of to a certain extent, and I think if we were to take a little less tin from the Straits Settlements we would get a little better treatment in those markets than we are getting at the present time.
Mr. TREADWAY. I am unfamiliar with what we shipped to those countries generally.
Mr. FARRELL. All classes of merchandise. It is a general market. All those countries are very large consumers of galvanized sheet. They live in sheet-iron houses, you know.
Mr. TREADWAY. And that is the nature of the reciprocal arrangements that you think should be put into effect? You are not then in sympathy with the idea that has been expressed here of the possibility of doing away with some of our own industries here in order to get goods in from other countries?
Mr. FARRELL. No, sir.
Mr. TREADWAY. That was advocated, I believe, yesterday, quite strongly. You may have heard the Secretary of Agriculture.
Mr. FARRELL. I read something in the papers about it. It always depends on whose ox is gored.
Mr. TREADWAY. Certainly, and we hope that the goring will not be done up in New England.
The CHAIRMAN. Will the gentleman yield?