Mr. WOODRUFF. Mr. Sayre, I wonder if you could tell us if our trade in Latin America has been declining with any greater rapidity in the past few years than other nation's trade in that area?

Mr. SAYRE. Yes, it has. Shall I just take a country at random? Argentina?

Mr. WOODRUFF. You referred a few moments ago to Chile. Perhaps we can discuss the situation as it affects Chile.

Mr. SAYRE. In 1926 the United States enjoyed 32.7 percent of the imports into Chile.

Mr. WOODRUFF. That is, we sent goods to Chile in that proportion? Mr. SAYRE. Imports into Chile from the United States.

In 1926 the United States enjoyed 32.7 percent. In 1932 that had dropped to 22.8 percent; in 1933 to 22.5 percent.

During those same years, Peru was the source, in 1926, of 6.4 percent of Chilean imports; in 1932 of 13 percent, and in 1933 of 14.3 percent. In other words, since these are percentages of imports, whatever the United States loses some other nation must gain. As I have said, these are percentages of imports.

Mr. WOODRUFF. Yes, I understand. Now, might not this have had some effect upon the loss of trade with Chile? For many years this country depended upon Chile almost entirely for its nitrates. We know that the World War taught us a very valuable lesson, and that was that we could not afford in the years to come to be dependent upon any foreign nation for that particularly valuable product. As a result of that, the inventive genius of this country have developed methods whereby in this country by what I might term synthetic methods—although they are not synthetic methods, because you cannot produce something from nothing really, you cannot produce an element by synthesis-but by the development of these processes, they have been able to take from the air by fixation process nitrogen with which today we supply all our needs of that commodity.

I believe that that particular industry today is sufficiently developed to the point that even during a war we could probably supply all of the nitrates that we might need.

The fact that we have ceased purchasing nitrates from Chile might have a very important bearing on our lost trade in that particular instance.

Now, I see the gentleman is smiling and I know exactly what he is going to say. But I want to ask the gentleman, now that they can no longer send us nitrates-and I assume that the gentleman will not regard the nitrate industry of this country as an inefficient industry, because of its importance to the national defense if for no other reason you would not consider that one of the inefficient industries, would you?

Mr. SAYRE. So far as I am informed about it, I do not consider it an inefficient industry.

Mr. WOODRUFF. Of course you do not. I knew that you did not. Now, what can we buy from Chile to replace the nitrates that we formerly purchased from them, and something which would not come in direct competition with those products of this country of which we have an exportable surplus?

Mr. SAYRE. I felt that full explanations might not be evident from the example of any single country. Therefore I had these percentages made up from the world trade covering all countries.

Mr. WOODRUFF. But we are speaking of Chile.

Mr. SAYRE. My point is that, regardless of the particular reason for a specific country's being in the position it is in, the bold fact remains that the United States' share of world trade is decreasing and, at the same time, that the share of certain other countries, indeed, of other countries in general, is increasing. That is the point which I want to make, sir. And I want to suggest in a moment a reason which seems to me to account for the world situation.

Mr. WOODRUFF. Now, may I say that the committee has been regaled with beautiful generalities all during this hearing. We have been very much interested, naturally. But we on this side are interested in specific conditions, specific countries, specific commodities. We are interested in knowing how you are going to. take this great mass of specific things and bring them into a complete whole. In other words, we want to know just how you are going to deal with this whole thing. We on this side cannot, believing as we believe in the preservation of American industry and agriculture, go along happily with a program that to us seems to be headed toward the destruction of those very important things in this country. If you, unlike the other witnesses who have appeared before this committee, would take up the different things, such as I have suggested to you in connection with Chile, and tell us how you are going to work it out, so that we can sell more things to Chile-because it is obvious until we buy more from that particular country we are not going to sell more to them-that would be helpful. What are we going to sacrifice, if anything, in rebuilding our trade with Chile?

Mr. SAYRE. I am glad you asked the question, because I expected it to come from Mr. Treadway sooner or later, and I want very much to say a word about that.

Mr. TREADWAY. Will you allow me to interrupt? I have asked my only question of the day and I do not intend to take up your time at all, Mr. Sayre. Being obliged to take on faith the answer to the question that I asked just a few moments ago, I am through.

Mr. SAYRE. I do not think you are being asked to take anything on faith. You have, many of you, been pressing the question again and again: What specific individual trades would I make, and with what countries? My reply to that, sir, is that it is utterly impossible to answer that question at this time for two reasons. First, the answer will depend upon a very careful and comprehensive and deep study of the whole picture of production in this country and of international trade. There is a vast mass of material gathered and being tabulated from time to time by the Department of Commerce, by the Tariff Commission, by the Department of State, by various Government agencies, excellent material.

If this bill passes, as I trust and believe it will, it will be the work of a group of men studying intensively, and working to collect and focus that data, to ascertain the various points in which trades might be possible, to find out whether those trades would unduly work injury to American business or American interests, to learn what the economic effects would be; to map out some kind of a comprehensive, cohesive, Nation-wide program from the national viewpoint.

Until the study has been made and that program has been carefully mapped out, it is idle to talk about specific trades of one kind and another.

The second reason why it is impossible to make specific answer is that we must approach other countries to find out what they are willing to do. As was suggested a few moments ago, until we get the reactions of other countries on specific proposals, we cannot tell what is practicable. We are not proposing here a theoretical program. We are proposing something that is now being done every day by European countries, and as a basis for that we must have a chance to make a comprehensive study and map out a plan that, while enhancing general prosperity is not going to be unduly injurious to any individual industry. Any off-hand or snap judgment that such and such a trade might be put through, without considering the ramifications and the possible injuries to American producers, would not be fair.

Mr. WOODRUFF. Will the gentleman yield at that point?

Mr. SAYRE. Yes.

Mr. WOODRUFF. The gentleman has indicated that he believes that the nitrate industry of this country was not in his opinion an inefficient industry and he has indicated that he has a high regard for it.

Mr. SAYRE. No, I simply said that so far as I

Mr. WOODRUFF. (interposing). There is no question about the necessity of having nitrates in time of national emergency?

Mr. SAYRE. I recognize the need of nitrates in a national emergency. Mr. WOODRUFF. The gentleman also knows that as long as that particular industry continues to exist, we are not going to buy our nitrates from Chile. You realize that. Now, Chile produces certain things which she exports, for which she looks for an export market. If she is not to sell us nitrates, just what is she to sell us? The gentleman ought to be able to answer that question. He has dealt very exhaustively with a beautiful theory that has been presented to the committee by various other witnesses, but he also declines to get down to brass tacks and let the committee know how it will work in the case of one little country, the products of which country are very well known to the gentleman, I suppose, and to the members of the committee.

Mr. SAYRE. I can think of all kinds of plans, sir, but I think it would be the part of theory to advance such a plan without this careful brasstacks study that I am talking about.

Mr. WOODRUFF. Will the gentleman yield again? The gentleman realizes that Chile produces certain things for export. She produces those things that she can produce in the market efficiently. She does that now. She wants to extend her foreign markets for those products. Naturally she is looking for a market in this country. She has had a wonderful market for her nitrates. Now she hopes to sell us something else, or destroy the nitrate industry of this country. If we are going to preserve the nitrate industry of this country, and I maintain that we should, just what is Chile going to sell us that does not come in violent competition with those things which we here manufacture or raise on the farm to a point where we have an exportable surlpus?

Mr. SAYRE. I will be very happy indeed to answer that question as soon as you have passed this bill and we have this study made of which I have been speaking.

Mr. WOODRUFF. Allow me to say to the gentleman that that is about as much as I got from his superior, the Secretary of State. Mr. SAYRE. I am happy, sir, if Î have equaled his presentation of

the matter.

Mr. KNUTSON. Will the gentleman yield at this point?

Mr. WOODRUFF. Yes.

Mr. KNUTSON. You spoke about giving a brass-tacks study to these matters. How many brass tacks did you use in considering the treaty we recently made with France whereby she sells us 10 million dollars worth of goods and we sell her or may sell her a million dollars worth?

Mr. SAYRE. You are referring to the liquor agreement?

Mr. KNUTSON. Yes.

Mr. SAYRE. That was subject to a lot of considerations and difficulties which I hope we will be free from if we enact H.R. 8430; all kinds of extraneous considerations entered into that arrangement. Mr. KNUTSON. Just as you solve one difficulty another one takes its place?

Mr. SAYRE. That is true of life, sir.

Mr. KNUTSON. You will be beset with difficulties constantly. Mr. SAYRE. That is true of the whole of life; I am sure of it. Mr. REED. Mr. Sayre, I am sorry to take your time. I can see your viewpoint. You are looking at it from a national or an international sense. You are taking a great big broad view. I do not know whether you quite appreciate our position.

Mr. SAYRE. I do, sir, which is exactly the reason why I do not want to go off half cocked on some snap plan that looks good on its face; I must wait until we have had a careful study made, and plans worked out.

Mr. REED. For instance, our position here looks very narrow, naturally. But we are sent here by a large constituency which is engaged in certain particular lines of business.

Mr. SAYRE. I realize that.

Mr. REED. And they look to us for information.

Speaking of Chile, for instance, the people up in my section of the country raise fruit. It is a great fruit growing country. It is only one of many in this country. They have noticed what Chile has been doing in the great central valley of Chile and they have looked at it with some alarm. In the first place, we have a great surplus of fruit in this country, as well as a great surplus of vegetables. Now, in Chile they have a man whom they class as the Luther Burbank of South America. It is said that no man next to Burbank has developed more varieties and finer varieties of fruits and vegetables than this man. They already have subsidized factories for the purpose of canning these fruits and vegetables, and they have already sent a commission to the United States, with a view to seeing, as they hope they will be able to do, whether then can supply every American city with all of the fruit that we need. They are planning a 14-day service to land fruit, perfectly fresh, in our big markets in this country.

Now, if that is what they are going to trade with us, you can see how our people at home feel. The reason we are pressing these questions is to try and find something specific to see where we are going to land. We want to know, before we vote away the very

existence of the industries that are of such vital importance to our own particular districts-we want to know where we are going. You cannot blame us for that.

Mr. SAYRE. I can assure you that you are not voting away the industries which are vital to the existence of your communities.

As I understand the burden of your remarks, it is a fear that the American trader cannot hold his own with the foreign trader; that the American producer cannot hold his own with the foreign producer. Now, I have faith in America. I have faith in American traders. I believe that Americans can put across just as advantageous a trade as people of any other nationality, sir.

Mr. REED. I think in some respects perhaps that is true. But I think the primary duty of men who represent the people here is to protect our standard of living in this country.

Mr. SAYRE. I believe so.

Mr. REED. Now, getting right back again to the situation before us. The other day, the Secretary of Agriculture held a hearing here to see if some plan could be worked out so that the tomato growers of this country-it is a large business and perhaps it may be classed as inefficient because it is not making a profit; they are not realizing even their cost of production-but he is holding a conference here under the A.A.A. to try to see if agreements can be worked out so that the canners will pay the grower of tomatoes a price so that he can at least get his cost of production.

Now, I picked up the New York Journal of Commerce and I found that our Ambassador to Cuba-that is, the designated ambassador, Mr. Caffery-is now working out a plan to have a trade agreement so that the United States will take a vast amount of vegetables that are grown down there. Among them, of course, are tomatoes and fruits, peas and beans, the businesses that they are now trying to rehabilitate through the Agricultural Adjustment Act, so that our people can live.

Naturally, the people of Florida and Georgia and South Carolina are interested in that. You cannot blame them for that. I will say frankly that they question whether a man who has perhaps never been in business himself, can sit down in some bureau or department of the Government and protect their interests; they want to know whether they will not overlook some of the things that ought to be taken into consideration, if there is no place where the people can go to be heard before those contracts are closed.

Mr. SAYRE. May I say in answer to that, that I share your sentiments heartily. I want the American public and the American producer protected and cared for. So far as that particular matter is concerned, if I may say so, the State Department has that matter in very careful consideration and is trying to see whether it is possible to work out some kind of an arrangement which will not prove injurious to American producers, through seasonal or other kinds of arrangements.

Mr. REED. Right at that point, I also note in the press-I cannot verify this, because we cannot get any information here. How the newspapers get it, I do not know. But already the plan is being worked out, and probably you have the facts down in your Department, whereby Mexico will ship in thirty or forty thousand cars of vegetables into our market during the winter.