FOREIGN COMMERCE DEPARTMENT COMMITTEE 1933–34

James A. Farrell, chairman; chairman National Foreign Trade Council, India House, Hanover Square, New York, N.Y. Office address, 26 Beaver Street. Worrall Wilson, vice chairman; chairman of board, Seattle Trust Co., Seattle, Wash.

James S. Carson, vice president, American & Foreign Power Co., Inc., 2 Rector Street, New York, N.Y.

George H. Davis, president, Davis-Noland-Merrill Grain Co., Kansas City, Mo. Crawford H. Ellis, vice president, United Fruit Co., 321 St. Charles Street, New Orleans, La.

J. W. Evans, Evans & Co., Houston, Tex.

Charles E. Herrick, president Brennan Packing Co., Chicago, Ill.

Henry Howard, consulting engineer, Paradise Road, Newport, R.I.

C. G. Pfeiffer, vice president, George Borgfeldt & Co., 44-60 East Twentythird Street, New York, N.Y.

Adolph Schleicher, president Samson Tire & Rubber Corporation, 5725 Telegraph Road, Los Angeles, Calif.

Ex-officio members: Robert V. Fleming, chairman finance department committee; president Riggs National Bank, Washington, D.C.; Thomas J. Watson, chairman American committee, International Chamber of Commerce; president International Business Machines Corporation, 270 Broadway, New York, N.Y.

RECIPROCAL TRADE AGREEMENTS

SATURDAY, MARCH 10, 1934

HOUSE OF REPRESENTATIVES,
COMMITTEE ON WAYS AND MEANS,
Washington, D.C.

The committee met at 10 a.m., Hon. Robert L. Doughton (chairman) presiding.

The CHAIRMAN. The committee will be in order. The first witness this morning is Hon. John Dickinson, Assistant Secretary of Commerce. The committee will be very glad to hear you, Mr. Dickinson. STATEMENT OF HON. JOHN DICKINSON, ASSISTANT SECRETARY OF COMMERCE

Mr. DICKINSON. Mr. Chairman and gentlemen of the committee, I am very glad to have this opportunity to add my voice to the voices of the distinguished representatives of the administration who have spoken in favor of this bill, because I wish to use this opportunity to make a plea for a new protectionism, for a policy of protection to American industry and commerce which will really protect and vitalize and restore, rather than to restrict and to dry up and destroy. We are told by our protectionist friends that we must protect the industry which employs 500, or 400, or 300 American laborers, and let us grant that we must; but if that is So, is there any less reason, or any reason at all, why we should not protect the more than 2,000,000 Americans, farmers and workingmen, who have always been accustomed, in the normal course of our industry and commerce, to manufacture goods for our foreign trade?

Can a policy be called protection in any true sense which does not protect those workingmen and those farmers also?

The justification which has always been put forward for the socalled policy of protection is that it supplies employment for the American workingmen.

If that is its justification, was there ever an instance in which protection was more urgently demanded than for the American workmen who have been and are being thrown out of employment by the closing of foreign markets to our American trade?

Why are these farmers and workers not entitled to protection? I believe that they are, and that is why I am here this morning to speak on behalf of them and to speak on behalf of this bill that the committee has before it for consideration.

I submit that it is a short-sighted conception of protection to American industry which regards it as requiring the exclusion of the foreign goods which are needed to pay for the American products of our American workmen who produce goods for sale abroad.

American labor is employed in making those exports, and if we cannot sell them abroad, in return for foreign goods, the American labor employed in making them is thrown out of work without necessarily creating any opportunity for reemployment in making in this country the type of foreign goods which are excluded.

The mere fact that we exclude a particular type of foreign merchandise in order to protect a supposed or potential American production of that particular merchandise does not mean that anything like the number of Americans will be employed in manufacturing that merchandise here which would be employed in making the exports that otherwise would be paid for the imports of the merchandise in question from foreign countries.

The extreme protectionist apparently thinks that if a new factory is set up in this country to manufacture some commodity which is being imported, we will protect American industry by raising the tariff on that commodity to a level which will greatly reduce imports and thus give the new establishment a free field within which to expand.

Whether or not that expectation of expansion proves to be justified, in the meanwhile the reduction in imports is not immediately met by any corresponding increase in the American production of the article, with the result that a smaller number of people are employed in this country in the manufacture of the protected article than would be employed in making the other American products which formerly paid for our imports of that article from abroad, and so the latter are thrown out of work.

I am not now talking about the vested right of an already established American industry to protection. I am talking about the policy of raising tariff barriers for the supposed purpose of enabling some relatively unimportant industry to expand at the expense of the established livelihood of other American workers making goods for the foreign market.

I submit that it is carrying water on both shoulders for an industry, on the one hand to demand protection, as a vested right, within the scope and limits of its established domestic market, and then, on the other hand, also to claim a right to further protection in order to enable it to expand at the expense of the vested interest of other domestic workers, without being able, in any reasonable time, to give employment to the workers thus displaced. That is a luxury which, in times like these, we in this Nation cannot afford.

There is no intention, under the powers conferred by the present bill, to displace established industries. There is an intention to provide for the widest employment of Americans by maintaining our established exports, so far as possible, against the rising tariff barriers of other countries.

If we do not give these other countries assurance by such binding agreements as this bill permits, we may expect to see more and more American exports excluded by the rising tariffs of other countries without any corresponding opportunity here at home to put to work Americans who are thus displaced in other lines of work.

This bill is just as much a bill to protect ourselves against further increases of tariffs abroad, in foreign countries, by agreements not to increase our own tariffs, as it is a bill to secure the advantage of lower tariff rates abroad by somewhat lowering our own tariffs.