nation treaties or agreements with other countries. They of course do not include authority for our Government to agree to any trade arrangements that could be put into operation with promptness or certainty.

Many nations devise quotas, tariff rates, exchange restrictions, and other obstructions with special reference to bargaining possibilities or reduction on the basis of concession for concession. Many nations during the past 1 and 2 years have entered into reciprocal trade agreements and promptly carried them into effect. They are not disposed to take the time and trouble to negotiate such arrangements with a country unable to place such agreements in operation without unreasonable or uncertain delay, if at all. Our Government, for example, negotiated the 10 commercial agreements known as the John A. Kasson commercial treaties, under the Dingley Tariff Act of 1897, which according to current public opinion at the time would have doubled our foreign trade if allowed to operate. They were, however, filibustered to death in another body, as we are accustomed here in the House to say. In the light of our past disastrous experience in seeking to carry reciprocal or similar agreements into effect, our Government would have much difficulty in removing the skepticism of other countries.

In this connection I would call attention to the information coming to me to the effect that all but two of the countries of continental Europe, as well as England and the major dominions, and a few of the countries of Latin America, have authority vested in the executive branch of the Government for negotiating duties below those in the general or maximum tariff schedules in the course of reciprocal negotiations with other countries. In some cases the legislative branch establishes in advance a minimum scale of duties, part or all of which may be granted to other countries by agreements. The more common practice, however, is to start with a general tariff and authorize the executive branch of the government to grant reductions in the course of negotiations, without prescribing in advance the amount of the reductions, such rates established by treaty then constituting the second or conventional column of the country's tariff. In a number of countries, such as Canada, Poland, Switzerland, Greece, and others, the executive has authority to enter into and make effective agreements such as is proposed by the pending bill without the approval of the Parliament. In a majority of cases, while it is true that treaty reductions are not to be permanently operative until approved by the Parliament, it is true in practice that the parliamentary approval is most often a perfunctory matter. The reductions embodied in such agreements are put into operation at least provisionally on a day set by the executive without waiting for parliamentary action. This is especially true in those countries having a responsible cabinet form of government, mainly in Europe, or where the governmental structure is such that the general tariff authority is largely vested in the hands of the executive, as in many countries of Latin America.

Summing up this entire phase, it is manifest that unless the Executive is given authority to deal with the existing great emergency somewhat on a parity with that exercised by the executive departments of so many other governments for purposes of negotiating and carrying into effect trade agreements, it will not be practicable

or possible for the United States to pursue with any degree of success the proposed policy of restoring our lost international trade. It would seem to me that this is the one governing consideration before us. There will be ample time and opportunity after the crisis shall have been met and passed and the unprecedented emergency coped with, for a thorough review, reexamination, and discussion of any and all methods, policies, plans, and programs that may have been placed in operation during the panic period in desperate endeavors to curb, control, and cure such conditions.

There are in the world today 30,000,000 wage earners accustomed to employment who are unemployed. Near 80 percent of the world's population of 2,000,000,000 persons are today living below the poverty line. Some enterprising nation or nations will and must produce and export the many different commodities necessary to supply these people thus in need. This, like past similar undertakings, is not without its difficulties and delays. It will challenge the initiative, energy, resolution, and pioneering spirit of every highly industrialized country like ours.

International commerce conducted on a fair and mutually profitable basis, as this bill proposes, is not only calculated to aid materially in the restoration of prosperity everywhere, but it is the greatest civilizer and peacemaker in the experience of the human race.

Let me say in conclusion that the pending bill is based upon the conviction that full, stable, and durable business recovery can only be effected by the restoration of international trade and finance to an extent mutually profitable.

The CHAIRMAN. Are there any questions?

Mr. HILL. I would like to ask some questions, Mr. Chairman.
The CHAIRMAN. Mr. Hill.

Mr. HILL. Mr. Secretary, you referred in your remarks to the fact that a large number of countries of the world are now in a situation where they might readily adjust their tariff duties so as to facilitate trade agreements. The fact they are in a position readily to adjust their tariff duties places those countries in a situation where they can readily negotiate trade agreements among themselves. Is that true?

Mr. HULL. Yes, they can promptly put into effect and trade understandings or agreements that are negotiated under the proposed method.

Mr. HILL. I have in my hand a document issued by the United States Tariff Commission entitled "Regulation of Tariffs of Foreign Countries by Administrative Action ", issued in 1932. It lists a total of 50 countries other than the United States, embracing practically all of the commercial countries of the world outside of the United States, and in practically all of these countries so listed there is a degree of power lodged in the Government, or what we call the executive or administrative branch of the Government, to adjust tariffs in the first instance without legislative action.

In many other cases, however, such modification must be referred to the legislative branch, and be approved by that department of the Government.

But in practically all of these countries there is power in the administrative branch of the Government to deal with tariff duties.

Mr. HULL. Yes; and to carry them promptly into effect. Mr. HILL. Yes. Of course, in this country we have the so-called flexible provision ", section 336 of the tariff act, and that is the principal provision of our tariff act which vests in the Executive power to modify established tariff rates. What do you say to the practicability of section 336, which is the so-called "flexible provision" of our tariff act, in meeting the situation of readily putting into effect tariff changes?

Mr. HULL. I think our past experience with that section has measurably demonstrated that it would not be a sufficient agency for that purpose. It is now a question of negotiating a number of these treaties, which in the very nature of things we would deal with carefully and gradually, and, as I say, in the beginning, to a limited extent, for the purpose of reducing these definite 8, 10, or a dozen kinds of trade obstructions. I do not think it would be possible for the "flexible" clause, on account of the inflexibility, you might say, to take care of the existing situation.

Mr. HILL. I noticed in the press of the country that about the 1st of March the Government of France made its Premier, Mr. Doumerue, practically a dictator in the matter of tariffs for the purpose of enabling him to negotiate readily trade agreements.

Mr. HULL. And the report is that Japan has pending a similar bill, but I do not know whether the reports are accurate.

Mr. HILL. Taking a concrete case. For instance suppose the United States should endeavor to negotiate a trade agreement with France, with the Premier of France having this almost unlimited power as to the adjustment of tariff rates, what situation would we be in if such agreement depended upon the adjustment of our tariff duties under the existing law?

Mr. HULL. Before we could complete and carry into effect a treaty with France, if we could do it at all, as we could not in the case of the Kasson treaties, France would have forgotten about it and would have entered into bargaining arrangements with other countries, just as a large number of other countries during the past 2 years, to our detriment, have already entered into mutually profitable trade arrangements with each other.

Mr. TREADWAY. Mr. Chairman, if I may interrupt for a moment, I notice we are favored this morning by the presence of our distinguished speaker, distinguished both as Speaker and as a former member of the committee, and I would ask that the Speaker come up and sit with the committee.

The CHAIRMAN. We would be most pleased indeed to have the speaker come up and sit with the committee.

I notice that we are also honored with the presence of Hon. Charles R. Crisp, for a long time an able Member of the House of Representatives, and many years an able and useful member of this committee, for a time acting chairman, and if the judge will come up and have a seat with us we would be glad to have him do so.

Mr. CRISP. Mr. Chairman, I appreciate the honor and compliment, but if it is just the same to you, I would prefer to sit here.

Mr. HULL. In other words, Judge Hill, the international trade of the world is in a hard knot, and it is choked down to a small amount. At the same time there are probably 25 nations whose very economic lives, as I said, depend upon international trade, and this

is an effort to join in meeting this crisis, which fundamentally has been growing worse in the world as a whole.

While there are some fluctuations upwards in prices in a number of other countries, due more or less to artificial stimulation, fundamentally, as I say, the economic situation is not improving as it should.

Mr. HILL. I understand from your remarks that other countries, having the machinery lodged in the executive or administrative branch of the government, are actually entering into trade agreements among themselves, and in these negotiations the United States Government is unable to participate or to enter, because of the lack of power in our Government, that is, in our Éxecutive to negotiate treaties based upon the adjustment of tariff rates.

Mr. HULL. As to these trade obstructions there are different kinds of methods of obstructing trade, of which tariffs are one; there are quotas, exchange restrictions, licensing requirements, embargoes, sanitary rules, and several others.

Mr. HILL. You have just been mentioning tariff duties as one of the obstructions to international trade, but under the provisions of this bill now before the committee, there are recognized other obstructions to international trade, and it is proposed to give to the President power to deal with those obstructions along with the tariff rates.

Mr. VINSON. Will the gentleman yield?

Mr. HILL. I yield.

Mr. VINSON. In that connection there is no thought that in that power, and in the definition of duties and other import restrictions or such additional import restrictions as set forth in subparagraph (b), where the words "exactions other than duties " are referred to, that such language would include any power over excise taxes.

Mr. HULL. The purpose is to work out mutually agreeable and mutually profitable reciprocal arrangements with respect to their particular trade situations so as to facilitate in whatever way each Government and each country would think would be profitable, a greater volume of trade.

Mr. VINSON. But any obstruction to trade, which the gentleman from Washington referred to, and any treatment of the tariff under "exactions other than duties" that will be given to the tariff, there will be no thought of conferring power to deal with internal excise taxes.

Mr. HULL. That language of the bill was chosen on account of the fact that a good many countries have made their chief weapon, both for offensive and defensive purposes, the collection of internal taxes, whatever they may be called, which are enacted and operated primarily at least for the purpose of defending national situations, by forcing other nations through keeping out every vestige of imports from given countries, to come seeking trade arrangements that would involve mutual concessions.

There are so many different names and such a large number of methods of obstruction and of impeding, with new devices being conceived and put into effect every week, that, unless this language is made sufficiently broad to cover them, it might not be possible to secure any concessions from any of those countries.

Mr. VINSON. I am not referring to the foreign obstructions, and I realize quite clearly, Mr. Secretary, what you said in regard to the manner in which they impede our commerce; but the power conferred in this bill upon the President contemplated that the President would have the power to change excise tax rates?

Mr. HULL. If an excise tax rate was intended solely to perform the the function of a tariff rate, there would be no other way to make agreements with other countries, many or most of which, as I say, have a network of internal and external devices to obstruct trade, except to retaliate against those countries, as I understand was done recently between two great countries, and so to force them to come practically on their knees and seek bargains.

I do not know of any internal tax we have that would be considered as calling for any action by the President in this connection. Mr. VINSON. Mr. Secretary, on that point, lines 20 to 23 on page 2 of this bill, deal with the proclamation of the President, and say that "no proclamation shall be made increasing or decreasing by more than 50 per centum any existing rate of duty, or transferring any article between the dutiable and free lists.'

It occurs to me, that in the power to reduce or increase the rate of duty, no real excise tax could be construed to be within the purview of this bill.

Mr. HULL. I would like to repeat very definitely, because if we do not get all phases of this before each other, there might be some misunderstanding, so that the broad situation, if I may be permitted in a sentence to repeat it, is that no graver crisis, perhaps, could confront the different nations in their efforts to recover business; and the biggest single factor, in my judgment, so far as 25 nations are concerned, involves international trade. The only possible way a step can be taken in the direction of relieving that situation, is by a country like ours taking the lead.

In view of this fact, as I say, if we do not have rather broad authority to face other countries, with their network of ever-increasing devices of every kind and description and name, in a short time most of them would be out of range of our capacity.

Mr. VINSON. With reference to the excise tax, so-called, that in reality is a tariff, I get the point quite well, but that which we know to be internal revenue taxes per se is not intended to be included.

Mr. HULL. Of course nothing is contemplated here, except something that partakes entirely of the nature of and is a substitute for an obstruction to imports in international trade.

Mr. HILL. The language referred to by Mr. Vinson, beginning on page 2, line 20, "No proclamation shall be made increasing or decreasing by more than 50 per centum any existing rate of duty or transferring any article between the dutiable and free lists", that refers to tariff duties, I take it, and I had no other conception of it. It does not refer to excise or purely internal tax rates.

Mr. HULL. While those who participated in preparing this first draft of the bill may or may not have had in mind other forms of exactions which were intended to take the place of tariff duties or to perform the same functions, I doubt if they had in mind that phase when this was drafted.