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Mr. CLIFF. Why, no, if we have such great efficiency-
Mr. CLIFF. -and such powerful and up-to-date technological machinery, and so forth, why do you not wipe out all tariffs on these reciprocal agreements and start at scratch? If we are so good, let us have a race with all of them. We might as well go the whole distance. If the new protectionism of Chairman O'Brien is accepted, it might be well to go further.
The CHAIRMAN. If the salt is good, use it as an entire diet?
Mr. CLIFF. Whatever you want.
The CHAIRMAN. That is what that means; if it is good, just do away with everything else and use salt.
Mr. HILL. You are listed here as appearing on behalf of the Home Market Club. Is that correct?
Mr. CLIFF. Yes.
Mr. HILL. Just what interests are represented by the Home Market Club?
Mr. CLIFF. Cottons, woolens, rayon, silk, chemicals, metals, and covering a pretty wide scale, without taking in pottery.
Mr. HILL. Is it Nation-wide in its scope?
Mr. CLIFF. Not exactly. I think the farthest South we have any members is Texas, and the farthest West is Kansas City.
Mr. HILL. I just wondered what the magnitude of this association is, and what are its purposes.
Mr. CLIFF. Tariff.
Mr. HILL. In what capacity do you represent this club?
Mr. CLIFF. I am the executive secretary.
Mr. HILL. So it really represents manufacturing. Does it repre
Mr. CLIFF. No.
Mr. HILL. Just manufacturing?
Mr. CLIFF. Yes.
Mr. HILL. In all of these different commodities. Does it represent agriculture in any of its aspects?
Mr. CLIFF. No. We do not happen to. I wish we did.
Mr. HILL. I will ask you the question I asked the previous witness, Mr. Dowsing, do you favor the poilcy of reciprocal trade agreements? Mr. CLIFF. No, I do not. I thought I said that a few minutes ago. Mr. HILL. I thought you did, but I wanted to be sure.
You are not speaking simply for New England, then, in this club here today?
Mr. CLIFF. Why, no. I am just expressing my own views now, as executive secretary of the organization.
Mr. HILL. For the industrial interests of New England, I am talking about.
Mr. CLIFF. I am calling a meeting of our board next Wednesday, and I would like to submit a brief after that, if it is possible to do so. Mr. HILL. Where is your best market, the domestic market? Mr. CLIFF. Absolutely.
Mr. HILL. Anything that would improve the buying power of the American people would help your industries, would it not? Mr. CLIFF. Yes.
Mr. HILL. If through reciprocal trade agreements the economic conditions of the country as a whole could be improved-
Mr. CLIFF. If it would, yes, but it has not in the past. That is is why I am skeptical.
Mr. HILL. Are you satisfied with the situation that has developed under the present tariff policy?
Mr. CLIFF. Absolutely.
STATEMENT OF HARRY TIPPER, EXECUTIVE VICE PRESIDENT
OF THE AMERICAN MANUFACTURERS EXPORT ASSOCIATION
Mr. TIPPER. The American Manufacturers Export Association is 25 years old and has, at the present time, 300 members, geographically distributed throughout many States, including, Massachusetts, Maryland, Ohio, Kentucky, New Jersey, Michigan, New York, Indiana, Minnesota, Texas, Missouri, Wisconsin, California, and so forth. Its members are engaged in a wide diversity of industries, such as drugs, rubber, chemicals, electrical appliances, machine tools, atuomobiles, oils, steel, insulation, wallboard, cosemtics, jewelry, machinery, and textiles, and so forth.
In May 1933 the board of directors of this association passed a resolution requesting Congress to invest the President with powers to negotiate and conclude reciprocal bargaining treaties with other nations. This position we have maintained consistently and we are, therefore, thoroughly in favor of the prompt passage of the bill H.R. 8430 for the following reasons:
The improvement in our exports, to be expected from the conclusion of such treaties, will provide employment for additional workers in all of the States mentioned and in the wide diversity of occupations represented in the manufacturing industries involved.
This improvement in employment is dependent upon the development of such reciprocal bargaining as will provide a two-way trade by which the exports are paid for by the imports. The possibilities of increased purchasing power to our citizens in this trade is indicated by the investigations that we have made in connection with various products and industries which can be illustrated by the following figures. There figures are estimated by taking average conditions from sample investigations only.
An increase of $500,000,000 of export balanced by $500,000,000 in imports, with the usual proportions of the imports divided between materials, semimanufactured and manufactured products, will provide a sum of 2 billion, accrued, paid to, and expended by the citizens of this country for the required labor and profit. This would provide employment for a wide diversity of our citizens engaged in dock labor, trucking, warehousing, documentation, transportation, processing, manufacturing, distributing, wholesaling, retailing, publishing, printing, advertising, and selling.
Practically all important countries lodge sufficient power in the executives to enable them to act promptly, quietly, and expeditiously
in connection with reciprocal treaties and many such treaties have been approved between other countries in the last 2 or 3 years.
Foreign trade is a business. We believe that it is of the utmost importance to this country, the final key to the recovery of our prosperity, and that it should be handled for all the citizens of this country, examined from its capacity to produce employment and income for the citizens. We believe that the President and his advisors are in a peculiarly favorable position to deal with the subject from this standpoint.
The abnormal conditions brought about by the depression have increased enormously the difficulties of conducting exporting from this country. Exchange restrictions, frozen funds, embargoes and quotas, in addition to tariffs, have increased the barriers tremendously. We believe that, regardless of the amount of tariff that may be considered wise in specific items for the maintenance of our own industrial structure, all these barriers that are subject to Government control and action should be considered in quiet, over-the-table bargaining, so that, by mutual concessions, we secure freedom in exchange, release of the frozen funds as rapidly as possible, the elimination of embargoes, and the increase of quotas.
We believe that these matters can be handled only when the executive, provided with powers to act, can sit down with representatives of other countries, similarly authorized, and by the old established principle of trade, arrive at conclusions which will represent the maximum mutual benefit.
The supreme importance of developing our foreign trade, to establish the recovery by providing employment to our citizens, calls for immediate action and we, therefore, respectfully urge upon this committee the desirability of providing the President with these powers, so that he can proceed immediately with the completion of negotiations with other nations for the removal of the excessive barriers that have accumulated to the end that there may be established a sound development of our foreign trade.
The CHAIRMAN. Any questions?
Mr. LEWIS. How many of those countries have gone to the quota method?
Mr. TIPPER. I could not give you the exact number now.
Mr. TIPPER. But I could tell you just what happened last week. Several orders on the water were struck, because of increased quotas.
Mr. LEWIS. By what countries?
Mr. TIPPER. France was one that I remember, because it was rather a large order, and the concern, a Baltimore concern, was very much disturbed by it.
Mr. LEWIS. Has this subject been developed before the committee, the quota-levying countries?
The CHAIRMAN. Not that I know of.
Mr. TIPPER. No; not just as they happened, but every week we have some new condition arising in connection with it. Mr. LEWIS. Is Japan doing it, do you know?
, Mr. TIPPER. No; I do not think so. Mr. LEWIS. That is all. Mr. Vinson. When did you come to Washington, Mr. Tipper?
Mr. TIPPER. I came yesterday morning, or rather, the night before.
Mr. Vinson. Do you live in New York City?
Mr. Vinson. I take it, then, that you heard about these hearings before you came down here?
Mr. TIPPER. Yes, sir. I had heard, and had had my name put down for print here.
Mr. VINSON. That is all.
Mr. TIPPER. I do not know as I remember exactly. It must have been some time last week.
Mr. REED. You live 5 hours from here?
The CHAIRMAN. Any questions? If not, we thank you for your appearance, and the information and testimony you have given the committee.
STATEMENT OF HON. CLIFFORD R. HOPE, A REPRESENTATIVE
IN CONGRESS FROM THE STATE OF KANSAS Mr. Hope. I am appearing here, Mr. Chairman, at the request of the wheat producers and millers of my State, to enter an objection to one particular provision contained in this bill
The CHAIRMAN. That is section 311?
Mr. HOPE. Yes. I refer to that part of section 2 which provides that the third paragraph of section 311 of the Tariff Act of 1930, shall not apply to any agreement concluded pursuant to this act. That provision reads as follows:
No flour manufactured in a bonded manufacturing warehouse from wheat imported after 90 days after the date of the enactment of this act, shall be withdrawn from such warehouse for exportation without payment of a duty on such imported wheat equal to any reduction in duty which by treaty will apply in respect to such flour in the country to which it is exported.
That amendment was made in the tariff act of 1930, for the reason that prior to that time American millers located at Buffalo, milling Canadian wheat imported in bond, were under the rulings of the Treasury Department able to reexport that wheat to Cuba as American wheat, or, rather, American flour, and secure the preferential to which American exports were entitled in Cuba at that time. In order to correct that situation, which certainly constituted a great discrimination against American farmers and American millers of American wheat, that provision was inserted.
At this time, to provide that that provision must be disregarded in any trade agreements which may be made pursuant to this act simply means that you are taking away a possible market for American wheat and giving it to Canadian wheat. I do not know what the purpose of including that provision in this act may be, but certainly it is not in the interest of the American wheat producer and the American miller.
Mr. SHALLENBERGER. I want to understand this a little more. Canadian wheat, as I understand it, coming into Buffalo, being ground in a bonded warehouse, is relieved from the 42-cent duty that is ordinarily levied on wheat when it is ground there. With this provision that they propose to remove, they would be permitted to take the wheat back to Canada and ship it to Cuba, or would they ship it direct?
Mr. HOPE. They ship it direct from the United States to Cuba. At least, that was the former practice.
Mr. SHALLENBERGER. They were not required to pay the duty?
Mr. HOPE. No. That wheat comes into this country, is milled in bond. They give a bond when they bring it in, and then mill it. When it is exported, they are relieved from the conditions of that bond.
Mr. SHALLENBERGER. And also pay the duty?
, the provision of this bill, if we disregard that paragraph in section 311, it would go to any country with whom we might negotiate trade agreements as American wheat, although it practically would have been produced in Canada.
Mr. LEWIS. Congressman Hope, that is hard spring wheat that comes from Canada?
Mr. HOPE. Yes.
Mr. LEWIS. The statement has been made-I have no knowledge of it personally—that the Cubans just will not have any other kind of flour except that made from hard spring wheat. What do you know about that?
Mr. HOPE. I know that contention has been made, but I do not believe there is anything to it.
Mr. LEWIS. Are you people selling soft wheat to Cuba?
Mr. HOPE. No. The wheat that we produce in Kansas is hard winter wheat. It is wheat of the same quality as the hard spring wheat. They are interchangeable, as far as milling is concerned. There is no practical difference.
Mr. LEWIS. Do you produce it in such proportions as to meet the requirements of the Cuban market?
Mr. HOPE. That has been my understanding. The millers in my State tell me that there is no difference as far as the quality of the flour is concerned, which is made from hard spring wheat and from hard winter wheat; that they are interchangeable, and that that meets the requirements of the Cuban market.
Mr. Lewis. Not the quality, but the quantity.
Mr. HOPE. Oh, yes; the quantity. There is no question about the quantity. In fact, the biggest surplus of any variety of wheat in this country at the present time is hard winter wheat. We produce more hard winter wheat than wheat of any other variety, and that is an export wheat quite largely, because of the fact that we have that surplus.
Mr. SHALLENBERGER. If that wheat that is ground under bond in a mill were taken out of the mill and sold in the United States, it would have to pay the duty? Mr. Hope. It would pay the duty; yes. Mr. SHALLENBERGER. So that is another preference we allow? Mr. HOPE. Yes.