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incidental in the treaties. It has been Mr. MILLS. Mr. Chairman, will the Mr. CURTIS. Mr. Chairman, I would traditional, I think, when we are talking gentleman yield?

like to get to the substance of this matabout agreements which involve carry- Mr. CURTIS. I yield to the chair- ter, if I may. ing out economic principles, that both man.

Mr. HOSMER. Mr. Chairman, I bodies of the Congress should exercise Mr. MILLS. There is much to be said thank the gentleman. So whether or not their judgment upon them.

for the gentleman's point. I think really it is in treaty form or in agreement form, Mr. PEPPER. Mr. Chairman, will the that I would prefer, myself, that the the Constitution of the United States gentleman yield?

House could be consulted about some of places upon the legislative branch of our Mr. CURTIS. I yield to the gentle- these matters and not always and forever Government an equal responsibility to man from Florida [Mr. PEPPER).

be, as we were in connection with the determine what in fact are the best inMr. PEPPER. Mr. Chairman, I was International Coffee Agreement of 1940, terests of the United States and to take interested in the gentleman emphasizing the wheat agreement and the sugar those actions that are required in puras I understood him to do, that this is agreement and in other instances, in the suance thereof. sort of an international agreement which position of finding ourselves implement- Mr. CURTIS. I might say to the genrequires the concurrence of both the ing something that has already tran- tleman that we might review the words Senate and the House; that is, the other spired. But the facts are, as the gentle- of the Constitution, “advise and conbody and this body. I am wondering if man points out, that the Constitution has sent.” This business of making the deal the able gentleman might share my opin- been followed.

ahead of time and then just coming up ion that the time may well have come I wish the gentleman, before he gets for "consent,” does not satisfy the rewhen all matters of international signif- to the details of this that disturb him quirement of "advise.” icance vitally affecting this country, as they do all of us, would comment I think, Mr. Chairman, we might well whether they be called treaties or ex- briefly on what his reaction might be pay attention to that. ecutive agreements or international toward us in the United States if we fail Mr. MILLS. Mr. Chairman, will the agreements, might not also be the sub- to implement an agreement or a treaty gentleman yield at that point? ject of consideration by this body and to which we are a party. Our word has Mr. CURTIS. Yes, I yield to the genthe other body on equal terms, just as been given; we have made a commit- tleman from Arkansas. they consider other matters which are ment. I know those things concern the Mr. MILLS.

MILLS. The gentleman from for the benefit of the country.


. I wish he would address Missouri and the gentleman from ArI propose to offer a constitutional himself to that point.

kansas were not speaking in terms of amendment, as I did when I was a Mem- Mr. CURTIS. The gentleman in his something prospective. We were speakber of the other body, to that effect. very able fashion and wisdom has ing in terms of something that has al

A good example of this is the nuclear pointed his lance directly at the real ready transpired. Advice and consent test ban treaty which the other body was chink in the armor of one who would have been given to the treaty. no more particularly or peculiarly quali- oppose this measure that is before us; Mr. CURTIS. That is correct. fied to pass on than this body. Certainly because that is true. My own view is Mr. FINDLEY. Mr. Chairman, will this matter is vitally concerned with a only an additional one. I did vote this the gentleman yield? subject of public significance. So I won- out of the committee and I think my Mr. CURTIS. I yield to the gentledered about the historical reason for judgment would lead me, for the very man from Illinois. vesting in the other body the exclusive reasons the gentleman has stated, to ac- Mr. FINDLEY. Mr. Chairman, in adprivilege of ratifying or advising and quiesce and probably vote for this bill, dition to the problem of gaging reaction consenting to treaties and wondered if but not until I have set forth what I from abroad if we should turn down this that had ceased to exist and if modern regard as being a very grave economic act, for example, I think we ought to demands do not require that both bodies crime, and not before I point out the give some consideration to the reaction pass on treaties and on international fact that the President of the United of the people here at home. I wonder agreements.

States has been talking one way, as is so what the gentleman's comment would Mr. CURTIS. I want to applaud the often the case it seems, and acting in be on the reaction of the American congentleman for his contribution, because another.

sumer if as a result of the agreement he is certainly directing this debate right And hopefully, by pointing some of coffee prices should seriously jump up? along the lines I sought. I would like to these things out, the arbitrary power Mr. CURTIS. That is what I wanted emphasize this one point, that certainly that still remains in the executive branch to go into. Before we went into the in economic affairs the traditional tech- to implement this international coffee Committee of the Whole and during the nique is to use agreements rather than cartel will be directed more toward the debate on the rule here, I requested treaties and thereby permit this House area of economic freedom.

unanimous consent to put in the RECORD as well as the other body to interpose its Mr. HOSMER. Mr. Chairman, will additional matter, and I am going to put judgment-while the utilization of the gentleman yield?

in the additional views which will be treaties eliminates the House of Rep- Mr. CURTIS. I yield to the gentle- found stapled in the back of the comresentatives. However, the chairman of man from California.

mittee report. In these additional views the Committee on Ways and Means and Mr. HOSMER. Mr. Chairman, I am I pointed out three things, or tried to our ranking member, the gentleman from disturbed over the gentleman from Ar- point out three things which I considTennessee, Congressman BAKER, have kansas' mention of the embarrassment ered to be of importance. pointed out that in the House today we that might be caused from the failure of First, that the overall policy in treatare confronted with a situation where the Congress to implement an agreement ing with trade matters is very bad. It is this has already happened. That is the made by the administration. As a mat- going toward a more regressive trade thing. The thing that caused me to have ter of fact, in connection with the test technique rather than freeing up trade. my views—and I want to call attention ban treaty we were told that Congress Instead of freeing up, we have been goto them, as additional views rather than should not even discuss the matter until ing to the international cartel technique, minority views—was because I could not the treaty was negotiated. Then there which is the worst approach we could quite come to the point where it would would be the opportunity in the other use. We are going further away from be my recommendation as a member of body to discuss it fully in connection the marketplace which is the traditional the committee, to the House, that we turn with ratification, obtaining the consent method in our society for trying to reach this bill down. It does carry this prop- of the Senate. Here we do not even have economic decisions. osition that the United States properly a treaty subject to ratification; we have Mr. Chairman, this in my opinionand constitutionally has entered into this an agreement.

and it is only a part of this administratreaty, and our problem here is the ques

Mr. CURTIS. No; this is a treaty.

tion's entire approach and I tried to tion of implementing it.

Mr. HOSMER. This is a treaty ?

point it out in just a brief paragraph, It does provide us an opportunity of Mr. CURTIS. That is the point; it is just one of the instances of the operamaking the point that I have already has been properly signed and ratified. tions of this administration which is made, whether it should be this way, and Mr. HOSMER. In many cases that is moving away from the utilization of the then get into some degree of the sub- not the case and discussion is necessary marketplace as the method of reaching stance that is involved here. where you do have a treaty.

economic decisions and moving further

toward the point where it can be done lator, the tariff, for some time. However, ticipate in an international program to through political bureaucracy of not there are no indications of a disposition on limit world marketings of coffee has al

the part of the Kennedy administration to ready been made. It was made for us only this country but of other countries. That is where the deals can be made.

break loose from this most regressive of all

techniques to regulate trade to move toward in an international agreement negotiated Mr. Chairman, the second point and a freer marketplace. Where there were tariffs by the executive department and ratione which the gentleman from Illinois and no cartels, we now find cartels. Where fied by the Senate last May. The House mentioned a moment ago and which I there were cartels, we find more regressive played no part either in the negotiation think should be stressed is this: What cartels negotiated. Where there were no of the agreement or its ratification. If about the American consumer? This is regulators, we find the administration advo

the House had considered the agreement, one of the ways where I think the Presi- cating tariffs as in the proposal to impose

I would probably have supported it-I an excise tax on American investments in dent talks out of one side of his mouth foreign securities.

saw more reasons to approve it than to and acts the other way. In the very President Kennedy in his special letter to oppose it. Primarily, I do not believe it letter that the chairman of the Committhe committee to reassure it in its concern

is to the advantage of the United States, tee on Ways and Means, the gentleman for the American consumer talks one way and or of our consumers, to try to beat down from Arkansas [Mr. MILLS] received yet acts another. The coffee agreement is the world price of coffee to the lowest from the President, which is in the re

admittedly to keep up coffee prices; how possible level. I have often said that the port, he starts out with the expression then can the President argue that it is to

cup of coffee so many of us love to drink assure the American housewife the lowest that “the purpose is to check the dis

would taste bitter indeed if we knew it price for coffee? Nothing is said in the astrous decline in coffee prices by hold- Presidential letter about passing on to the came to us out of the misery of those ing a floor under the prices." On the consumer in lower prices any benefits that who owe their livelihood to the growing next page he states that “the result may be derived from future increased effi- of coffee. We believe in a fair price for would be a beneficial and progressive in- ciencies and increased productivity in the what we buy as well as for what we sell crease in the coffee earnings of produc- growing and distribution of coffee.

to others. And this applies to coffee, ing countries as coffee exports increase

Finally, I would observe that in the long too. Furthermore, starvation prices for

run we do a disservice to the coffee-producwith rising world consumption." ing countries by these shortsighted cartel

coffee would eventually discourage proMr. Chairman, who is going to pay for setups. This tends to keep them tied to a duction and thus lead to much higher this? The American consumer, of one-product economy instead of to encourage prices later. course.

them in the development of a diversified So I think it was proper for the United The point that I make in addition is economy from which comes sustainable eco

States, as the world's largest consumer of that there is no benefit that the connomic strength and increased standard of

coffee, to join in efforts under the United sumers in this country derive from in- living.


Nations to help the major producing creased productivity in the raising and

I share these views.

nations to overcome the problems of huge distribution of coffee which the market


surpluses, unrestricted marketings, and place device would give to us. This is

the possibility of disastrously low prices just the opposite approach to solving

Mr. MILLS. Mr. Chairman, I yield for green coffee. The International economic problems which has been tradi- 10 minutes to the distinguished gentle- Coffee Agreement is aimed

at such obtional in our country. It is bad for the woman from Missouri [Mrs. SULLIVAN].


UNITED STATES HAS POWER TO ASSUME Then, finally, Mr. Chairman, I point


ADEQUATE QUOTAS out in my last paragraph that it is bad Mrs. SULLIVAN. Mr. Chairman, as

If it achieves its announced goals, it for the producers.

one who tries to keep the consumer in- will achieve the stabilization of coffee In the long run we do a disservice to terest uppermost in the consideration of

prices-through quota restrictions to the coffee-producing countries by these legislation which affects the budget of the general level of prices in 1962. No shortsighted cartel setups. This tends the average household, it would be an

one in this country would object to a to keep them tied to a one-product easy thing for me to oppose this bill

. I stabilization of coffee prices at the 1962 economy instead of to encourage them have always been suspicious of the price- level. My fear, however, is that the in the development of a diversified raising efforts of some of the coffee, agreement may be permitted to succeed economy from which comes sustainable producing nations, and have exposed and too well—by the establishment of quotas economic growth and increased stand- opposed those efforts on frequent occa- too low to meet demand at fair prices. ard of living.

sions here in the House when they ap- If that happens, then the American conI think there is very little question peared to be based on misleading or false

sumer will pay a heavy price, indeed, for about that. I would say that if we had information about alleged shortages.

our generosity in wanting to help friendhad the wisdom to look into Cuba as a As a matter of fact, one of the most ly Latin American neighbors, and other one-crop economy, one essentially based publicized speeches I ever made in the coffee-producing nations, to stabilize on sugar, and sought through our poli- House occurred nearly 10 years ago, in their shaky economies. cies, to the extent we could to properly my first term in Congress, when I re

The point is, however, that abuse of encourage them to diversify, we, perhaps, ported that the spiral in coffee prices in this agreement does not have to happen. would not have the situation in Cuba to- late 1953 and the first few weeks of 1954 It will not happen if the American repday, nor would we have had the situ- was apparently based on a downright resentatives on the International Coffee ation of Batista who preceded Castro. hoax-a fake shortage. A subsequent Council never lose sight of their obliga

Mr. Chairman, this is exactly the kind Federal Trade Commission investigation tions to American consumers as well as to of foreign policy that produces and sus- confirmed this suspicion, and spelled it foreign producers in the operation of the tains the dictatorships in these countries. out in great detail, attributing the spiral agreement and in the setting of policies This is against the doctrine in which we to excessive speculation in coffee fu

under the agreement. believe of self-determination for peoples tures, manipulation in the coffee ex

When the agreement was being neabroad.

change, and a lot of hoarding, all grow- gotiated, I raised numerous questions ADDITIONAL VIEWS OF THOMAS B. CURTIS AND ing out of deliberately misleading propa- about the degree of protection to be acBRUCE ALGER ON H.R. 8864 ganda about crop disasters in Brazil.

corded the American consumer against During the public hearings on the Trade Naturally, therefore, I am not enthusi- unwarranted increases in price. Under Expansion Act of 1962, I raised the question astic about any plan or program to re- unanimous consent, I will place in the of whether the administration policy was strict the amount of coffee which can RECORD at the conclusion of my remarks truly one of freeing up international trade come into the United States from our or whether indeed it was not moving toward major suppliers. If the supply is limited the reply I subsequently received-a

my letter to the Department of State and more restrictions by substituting licensing too severely, it will inevitably lead to a statement of official policy which later

The present coffee treaty is just one more soaring price of coffee for the American became an important exhibit in the Senaction in a series of actions taken by the housewife in the grocery store.

ate debate on ratification. Kennedy administration which lend support


This exchange to this position. It is true that coffee like

of correspondence sugar and other raw commodities has been

However, there are other factors which established the fact that under the the subject of Government-sponsored car- we must also consider here today. The agreement we do have significant powtels instead of the more liberal trade regu- decision to have the United States par-ers in holding the price line through our

position in the International Coffee necessary, to express his concern for Amer- MUST NOT BE "BACK-DOOR FOREIGN AID” Council. Nevertheless, when this bill to ican consumers on any policies proposed

I felt that the Congress must definitely implement the agreement went before under the international agreement.

and unequivocally go on record as inthe Committee on Ways and Means the cluded as a part of this bul, H.R.

8378, sisting that the American representalegislation now before us—I submitted a which requires that the United States en- tives in the operation of the internastatement which, for purposes of the force the quota restrictions set by the In- tional agreement should and must speak record, I am going to insert under unan- ternational Coffee Organization for coffee affirmatively and effectively on behalf of imous consent at this point in my re- imported into this country.

the American consumer. And here is marks.

For one thing, the bill should carry a

why I felt so strongly on that point: STATEMENT BY CONGRESSWOMAN LEONOR K.

clear statement of congressional intent that SULLIVAN, OF MISSOURI, SUBMITTED TO THE the quotas which this country will be asked

The Department of State is deeply and to help administer should and must be large properly concerned about the economic COMMITTEE ON WAYS AND MEANS ON H.R.

enough under normal circumstances to as- stability of friendly nations, and partic8378, A BILL TO CARRY OUT U.S. OBLIGATIONS UNDER THE INTERNATIONAL COFFEE AGREE

sure adequate supplies at fair prices for ularly those which are menaced con

American consumers. MENT, OCTOBER 15, 1963

stantly by communism. Under the DeChairman Mills and members of the Com- provide for immediate increases or readjust- partment's overall direction, we pour out mittee on Ways and Means, many persons ments in coffee quotas in case of any in- billions of dollars in military and ecofamiliar with the fight I waged in 1954 creases in consumer demand.

nomic aid to such nations. The aid proagainst unconscionable increases in coffee There is another important problem here. gram is constantly under attack in Conprices to American consumers as a result of The coffee-producing nations have been ex- gress and in the press and elsewhere. It an alleged but nonexistent shortage of coffee periencing great carryover stocks from year is not now, and it never was, a popular supplies were surprised this spring that I to year, and annual production surpluses program. We know that it has been gendid not oppose Senate ratification of the In- almost every year in relation to demand: erally effective, but it is costly. ternational Coffee Agreement. I explained, But if the International Coffee Agreement however, that I was not opposed to any really works effectively to cut down produc

On the other hand, an increase of a reasonable effort and reasonable machinery tion and to reduce surpluses, then any sud- few cents in the price of green coffee imto stabilize prices for the producers of green den disaster-such as the great fire in Brazil ported into the United States means a coffee, just so long as such a program did not this year following a serious drought, or hundred million dollars or more in dollead to sharp increases for consumers in case a great hurricane, or a crop failure for any lar exchange to Brazil and other coffeethe chronic condition of oversupply should reason-would immediately set off a kind of

exporting nations. From the State Desuddenly turn into a shortage-either a real panic in the world's coffee markets, and the

partment's viewpoint, this would be a shortage, or the fear of shortages such as American consumer would find the price gooccurred in 1954.

aid ing up the very next day in the grocery painless transfusion of financial While the agreement was still being ne- stores. Even with the huge surpluses in

without being reflected in any approgotiated, I wrote to the Secretary of State Brazil, the recent fire was cited as a reason priation bill. It would be reflected only on September 13, 1962, and expressed my con- for price increases.

in "a few cents a week” in the budget of cern on this point. I wanted to know what Furthermore, a political upheaval in any the average household. How simplesafeguards were being written into the agree- of the large producing countries, could also and how easy. ment to protect American consumers in case set off a wave of speculative frenzy, if sur

But how unfair to the American conthe price should begin to skyrocket.

pluses were reduced. Instead of being satisA reply from Assistant Secretary of State fied with stabilizing prices at the level of

sumer it would be if the representatives Frederick G. Dutton, dated October 3, 1962, 1962, the producing nations, I am sure, would of our own Government were to lend advised me that the purpose of the agree- much rather see the level of 1954 regarded themselves to an attempt to artificially ment, as it was being drafted, was to assure as “normal.” The 1954 price was an uncon- raise coffee prices as a backdoor device that "the general level of coffee prices does scionably high one, based on fake shortages, for aiding the economies of other nanot decline below the general level of such manipulation, and excessive speculation in tions. Unlike our aid programs, we prices in 1962.” In other words, if the green the commodity exchange, and vast hoarding would have no means of assuring that coffee price could be held, roughly, to the of supplies in fear or expectation of further 1962 average price-which was not an ex- increases in price. This was brought out in

the financial help actually went to the cessive one-the purposes of the agreement the Federal Trade Commission report on

countries and to the groups within those would be served. the 1954 coffee spiral.

countries which needed our help. And, Mr. Dutton's letter described some of the If we are going to put the full majesty frankly, there have been numerous occafeatures of the agreement which he said

of the Government of the United States be- sions when higher prices for green coffee could be utilized to prevent marked upward hind a program to limit the amount of cof- paid by the United States, and passed on changes in green coffee prices, and also noted fee we can bring into the country, so as to

to American consumers, meant no imthat the United States, in effect, had a veto help producers abroad, then we must show

provement whatsoever in the living on any quota decisions which could cause equal concern for the protection of the

standards of those who grew the coffeeunconscionable increases. As a last resort, American consumer against natural disashe said, we could withdraw at any time, after ters, political upheavals, or other develop- instead—the extra money went to specu90-day notice, and our withdrawal would ments in coffee-raising areas which could lators and to the already very rich in cause the agreement to collapse, since the bring a return of the 1954 experience. those countries. United States is the world's largest importer Therefore, I believe that this bill, intended


to require us to carry out our obligations Mr. Dutton's letter was an important State under the international agreement, should

Hence, Mr. Chairman, my statement to Department exhibit in the discussions in also contain language making it clear that the Ways and Means Committee, and the the Senate on ratification of the treaty in the producer countries have obligations to suggestions I made for improvement of May. When I saw the letter to me reprinted us under the agreement which must also be the legislation, were based on a desire to in the Senate ratification debate in the CON- carried out.

guide our own American policy—to give GRESSIONAL RECORD of May 20, I then placed We cannot use this bill as a device to

it a clear and unequivocal American in the RECORD the next day the full exchange amend the treaty, of course, but we can cerof correspondence, and the misgivings which tainly tie our performance in enforcing the


in our participation in the had prompted me to write to the State De- quotas under this bill to a clearly expressed

agreement. I am more pleased by the partment while the agreement was being congressional mandate (1) that the quotas

manner in which the committee attacked negotiated.

must be adequate to meet the needs of our the problem and the long consideration Now, in considering legislation to imple- consumers at fair prices; (2) that the quotas it gave to this matter. I could not ask ment the agreement, I think we must make be readjusted promptly if consumer demand for a fairer review. The letter from absolutely certain that the program, in ac- in this country should rise; and (3) that President Kennedy to the chairman of tual operation, protects the interests of some effective sanction-perhaps monetary the Committee on Ways and Means American consumers fully. Once the agree- damages or else a suspension of the quota makes it clear that the administration ment is in full operation, I don't think we enforcement machinery—be provided at any would want to withdraw from it hastily, or time U.S. import quotas are not met under will be guided by the considerations I veto the decisions of other participating the agreement.

asked be stressed. I also have State Decountries, because of the consequences of I leave to the experts on this committee partment assurance on that point. If for such steps on our relationships with friendly the technical problem of drafting language any reason the agreement leads to excesnations. But I think the Government of to carry out these obligations of the United sive prices, we have a way out-withthe United States has to be provided with States to the American consumer as part of a strong congressional guidelines which will bill “to carry out the obligations of the drawal after 90 days' notice and we can enable our representative on the Interna- United States," under a treaty designed pri- reconsider the entire matter in the next tional Council to speak forcefully, when marily to help coffee producers abroad. Congress in any event when this bill

expires. Under the circumstances, I am once inflation became virulent. I fear that the severe frost damage in Brazil resulted in willing to go along. if a stabilization program should be adopted prices averaging 78.7 cents per pound.

Consumer protection against any unwarBut this bill still leaves a loophole for coffee, it would require our consumers which I intend to close through an to support the idea of a floor under coffee ranted price increases is assured by a num

ber of specific provisions in the agreement. amendment I will propose when the bill prices, but would give them no protection

over excessive increases if unexpected cir- Probably the most important are the proviis opened for amendment. As a result of cumstances should precipitate sharp in- sions relating to the establishment and adthe committee's consideration, the bill creases in price.

justment of export quotas. Export quotas has been amended to require the Presi- Perhaps this matter has already received are intended to control the amount of coffee dent to report annually on the operations departmental consideration, and the neces- that may be made available to the market of the agreement, particularly with re

sary safeguards have been included in the by the producing countries during a given gard to the general level of coffee prices.

draft agreement. If so, I would be glad to period, and thus they directly influence the

know about it. If not, I certainly trust some price. The agreement provides that all deciUnder another section of the bill, he is

sions on the establishment and adjustment empowered to require the submission to proviso is included to permit reasonable restraints on excessive price rises as well as on

of export quotas shall be taken by a dishim of relevant information by the coffee excessive price declines. Since we are the

tributed two-thirds majority vote; i.e., a contrade on the importation, distribution biggest customer-country involved in the current two-thirds majority of the importers and consumption of coffee. But while he negotiations, and since the American con

and exporters voting separately. As the has the obligation to report to Congress sumer will largely pay for the international United States has 400 votes, this, in effect,

gives us a veto power over decisions of the on the general level of prices of coffee, he stabilization program in terms of higher

Council. We would, to make the veto effecis not specifically given the authority to prices for coffee in the stores, I think our consumers are entitled to the kind of con

tive, need only one other importing country require the submission of this informasideration I have outlined.

voting with us. The number of votes held by tion to him by all those in possession of

May I have your thinking on this.

it would be of no consequence as we alone important information on prices. My

Sincerely yours,

have more than one-third, but it was felt amendment will add this clear-cut au- LEONOR K. (Mrs. JOHN B.) SULLIVAN,

desirable to provide that one country alone thority. I shall explain the need for it

Member of Congress,

could not exercise a veto. We cannot conin more detail when the amendment is

Third District, Missouri.

ceive of any situation in which the United offered.


States advocated a veto where we could not

persuade at least one other importer of the The correspondence referred to above

Washington, October 3, 1962.

merit of our position. is as follows: The HONORABLE LEONOR K. SULLIVAN,

In addition to the voting provisions of the CONGRESS OF THE UNITED STATES, House of Representatives.

agreement with regard to export quotas, two HOUSE OF REPRESENTATIVES,

DEAR MRS. SULLIVAN: I want to thank you other provisions are noteworthy, in that they Washington, D.C., September 13, 1962. for your letter of September 13, 1962, ad- specifically recognize the undesirability of The Honorable DEAN RUSK, dressed to the Secretary, with regard to the

marked changes in coffee prices for whatever Secretary of State,

new International Coffee Agreement which is reason, and provide for corrective action unState Department,

now before governments for consideration. der voting procedures which are easier to Washington, D.C.

I am sorry that our reply is somewhat tardy; attain than the standard procedure of a disDEAR MR. SECRETARY: Ever since I raised an our workload in the closing days of this con

tributed two-thirds majority. These two alarm over runaway coffee prices in the gress has been exceptionally heavy.

provisions are quoted below for your inforUnited States in 1954, setting off a Federal

At the beginning I want to say that the

mation: Trade Commission investigation which dis- officials of this Department concerned with (5) All members recognize that marked closed widespread evidence of speculative the coffee problem are sincerely apprecia- price rises or falls occurring within brief price excesses and futures trading irregular

tive of the constructive view you have taken periods may unduly distort underlying trends ities, I have been attempting to keep in touch

in this matter. Accordingly they want me to in price, cause grave concern to both prowith developments in this field which might

assure you that they have been mindful ducers and consumers, and jeopardize the foreshadow possible gouging once again of

throughout the long negotiations with for- attainment of the objectives of the agreethe consumer. Just recently, I called the

eign governments that our first duty is to ment. Accordingly, if such movements in attention of the House, and of the housewives protect the American consumer. The ad- general price levels occur within brief peof the country, to a news report from Brazil visory committee appointed by the National riods, members may request a meeting of the implying that some frost damage to the new

Coffee Association to work with the State De- Council which, by distributed simple majorcrop would, or might, result in higher coffee partment during the negotiation of the new ity vote, may revise the total level of the prices in the United States. I warned that

coffee agreement has, of course, always main- quarterly export quotas in effect. any wholesale or retail price increases based

tained that the U.S. consumer must be pro- “(6) If the Council finds that a sharp and on such a scare story would be utterly un

tected in any coffee agreement. Toward this unusual increase or decrease in the general justified, in view of the tremendous stocks of

common objective we have managed to se level of prices is due to artificial manipulacoffee on hand.

cure a number of provisions in the new tion of the coffee market through agreements My purpose in writing to you is to do two

agreement which should fully protect our among importers or exporters or both, it

interests. things: First, to assure you and your aids

shall then decide by a simple majority vote

Before describing these specific provisions, that my concern is directed primarily at un

on what corrective measures should be apit is noteworthy that the tremendous stocks plied to readjust the total level of the quarwarranted increases in coffee prices based on false reports and speculative excesses, rather

of coffee now held by Brazil and Colombia terly export quotas in effect.”

would seem adequate assurance that no subthan on any opposition on my part to any

In the unlikely event that unforeseeable stantial advance in green coffee prices circumstances might arise in the adminisreasonable international program for stabi

could be sustained in the foreseeable future. lizing coffee prices at prices which are fair to

tration of the agreement which would opStocks are also building up in some African both producers and consumers; and, sec

erate against the interests of our consumers countries, and present productive capacity or our coffee trade, the United States could ondly, to ask what safeguards are being everywhere is in excess of any likely demand always withdraw from the agreement. It is written into the proposed international agreement which would serve to protect the demand situation as presently known argues

over the next 5 years. Thus the supply-and- provided that any government, after SepAmerican consumer in case crop controls

tember 30, 1963, may withdraw by giving against any marked increases in coffee prices. written notice, such withdrawal to be effecand other measures should result in inordi

The new International Coffee Agreement tive 90 days after notification. As the agreenately high prices to the American consumer.

does not have any specific price objective in ment would collapse without our participaWe have long followed a policy in this the sense that it will endeavor to maintain

tion, this possibility is the final assurance country of encouraging reductions in farm

prices for the various kinds and qualities of that our views on the operation of the agreeproduction when prices are ruinously low, so coffee at certain cents-per-pound figures. It ment must be respected. I do not subscribe to the idea that any does provide that through the fixing of quo- If I can be of any further assistance in attempt to stabilize coffee prices for Latin tas, the members agree on the necessity of

furnishing information please do not hesitate American producers is necessarily a dissery- assuring that the general level of coffee

to let me know. ice to the American consumer, particularly prices does not decline below the general Sincerely yours, if it should mean any substantial improve level of such prices in 1962. We consider this

FREDERICK G. DUTTON, ment in incomes and living conditions for price objective a realistic one in view of the

Assistant Secretary. the people of Latin America, and thus a burdensome stocks overhanging the market. reduction in the amount of aid we would In the light of the price trend it is also a Mr. MILLS. Mr. Chairman, would have to give there.

reasonably modest one, as coffee prices have the gentlewoman yield? On the other hand, it has been the sad been declining steadily in recent years. Dur

Mrs. SULLIVAN. I yield to my disexperience of the American consumer in both ing the first 8 months of 1962 the price of tinguished colleague, the chairman of World War II and Korean war days that after Brazilian coffe averaged about 34.3 cents a

the Committee on Ways and Means. having gladly cooperated in building a floor pound, compared with 36.6 cents in 1960 and under farm prices, the consumer was denied 48.4 cents in 1958. The decline set in imme

Mr. MILLS. First, Mr. Chairman, I any effective ceiling over those same prices diately after 1954, when you will remember want to congratulate the distinguished gentlewoman for the intensive study she Now, specifically I want to mention And on the next page he says: has made of this overall matter and to several things and try to be most brief I want to assure you this administration thank her for the suggestions she made in pointing out rather categorically an- intends to protect fully the interests of the to the committee while this particular other viewpoint and quite a different American consumer. bill was under consideration by the com- view than the ones that have been pre- My colleagues, you cannot do both.

sented here today. It is true, I join Yes, you can put a floor under prices and more time than the gentlewoman from with the gentleman from Missouri in the

with the gentleman from Missouri in the hold them where they are, but you are Missouri in trying to protect the house- additional views that you will find in not protecting the consumer if the prices wife against undue consumer price the back of the report, but I would like

would like otherwise were to drop. You cannot increases. to go further and state what this bill is, have it both ways.

have it both ways. At least, that is my Mr. Chairman, if the gentlewoman

as I see it, compared to what we should view and I believe I am entitled to it. would continue to yield, I had thought have in six or seven categories.

Next, as to the matter of imports, I am that the matter she would like to have

First, this bill is international control sure you realize you have to have certifiinserted in the bill was already, perhaps, rather than the competition that should cates of import as to the coffee being covered in paragraph (3) of section 2 of exist between people who import and brought in. I happen to be for freer the bill where we say:

export freely in a free market. This trade. This is not freer trade. So again (3) To require the keeping of such rec- presumes that there is not such a market categorically I must reject this concept ords, statistics, and other information, in the world and that governments must of freer trade.

of freer trade. It is not freer trade. It We have not referred to statistics in- control internationally. I categorically is rigid control. volving prices. Because this is impor- reject that viewpoint and do not want to Now, as to foreign aid and foreign aid tant and because it should, perhaps, be be a part of such an arrangement. again subtly enters into this bill—we set forth specifically, so far as I am con- Secondly, this bill is trade by govern- were told several times in committeecerned I am going to, when the gentle- ments agreement-one government and Mr. BECKER. Mr. Chairman, will the woman offers her amendment, say that another. We have the votes and all of gentleman yield? I have no objection to it and ask that it the other mechanisms set up to make Mr. ALGER. I yield to the gentleman be accepted.

this agreement work, including our own from New York. However, I would like to point out just withdrawal, which, of course, is a neces- Mr. BECKER. I want to congratulate one thing in connection with it which I sary protection, in 90 days. Instead of the gentleman from Texas, and agree am sure is agreeable to the distinguished having the market agreements between with him. gentlewoman and that is that it is not governments, we ought to have, as I see While the gentleman is talking about intended by her amendment to authorize it, the market forces of supply and de- foreign aid, I would like to call his the publication or release of confidential mand at work. I know this is very old- attention to a statement the Presibusiness information from the private fashioned, but I thought that was what dent made in his news conference torecords of individual firms in the coffee free trade was or what freer trade was day. The President said that he did business in the United States. We directed toward. Freer trade means the not feel it was wise to use the threat of would not want to go that far; would we?

free interchange of exports and imports withdrawing foreign aid too frequently. Mrs. SULLIVAN. That is right. I

with possibly only somewhat restrictive He said if threats of withdrawing foreign thank my distinguished colleague. I do tariffs. But tariffs permit the flow of aid are used too often, there would be a want to put this amendment in its proper goods, and we try to lower those tariffs great temptation on the part of the place.

when we can. This bill today, of course, recipients to say, “Go ahead and cut it The CHAIRMAN. Under the unani- is much the contrary. It is much tighter off.” mous consent previously obtained in the control by quotas.

Will the gentleman say this would be House, the correspondence and other Thirdly, this bill is price control. I I bad? material referred to by the gentlewoman know no one who can contradict that. Mr. ALGER. I think it would be very from Missouri [Mrs. SULLIVAN) will be I happen to believe in fluctuating prices refreshing if we suggested the withincluded at the appropriate place.

set by the market forces of supply and drawal and they took us up on it and reThe Chair recognizes the gentleman demand.

affirmed their self-respect, which they from Tennessee [Mr. BAKER].

I would like to call attention to the must surely lose when they take our Mr. BAKER. Mr. Chairman, I yield report, on page 2, in which it says:

money. Of course, they have been 10 minutes to the gentleman from Texas The purpose of the treaty is not to raise shaking Uncle Sam's money tree to get [Mr. ALGER).

coffee prices but to prevent those prices from something for nothing. I wish some of Mr. ALGER. Mr. Chairman, I realize declining below the general level prevailing the foreign countries would tell us to in view of the debate today that it is in 1962.

keep our money. necessary that I give what now appears

Mr. BECKER. Let me say that I agree

Oh, what a subtle way to put it. No, with the gentleman. to be a minority report. I wish I had they are not going to raise prices, but it to do over again, I would have written as our background material will show have been told that we are going to have

Mr. ALGER. As to foreign aid, we such a report. I presume, because it

us this legislation is intended to arrest to spend more money in foreign aid if has come before us, even though there any downward trend. In other words, we do not pass this bill

. We have to be is a treaty which was ratified and which you can count on there being no price for this, we are told, or else we have to we must implement, the very fact that reduction, and that is another way of be for more foreign aid. I reject that it is before us means we must have the saying prices will be higher than they categorically. It just is not so hold right legislatively to disagree. I know

The $100 bilof no other way to disagree, despite the might have been to a form of raising it to be just the reverse. fine speeches, than to so cast my vote, as prices, of course. To me it is a little too lion plus a few billion given away since I shall do today.

subtle a way to put it. Of course it is World War II has not solved the probThe chairman has said that this is a a price control bill, and I happen to be- lems. It has created and increased our simple bill, and relatively speaking it is, lieve in free pricing, as to reflect the free problems. We are giving it all away and indeed, compared to the normal trade market operation at least

, with the forces failing to accomplish our goals. I am for bill that we bring before you. of supply and demand.

less foreign aid, not more. I do not

want this bill to be used as a blackjack But this is far reaching and it is one

Then we find on page 3 of the report or as coercion to make me go along with of the things that caused me to take the in the President's letter—and here I ac

bad legislation. I am not in favor of floor so futilely last year on the Trade cuse the President of duplicity in this

cuse the President of duplicity in this giving them more foreign aid. Assistance Act of 1962 to point out that letter, and I want that clear, even if I

They tell us that this bill will increase we were walking into the trap of cartels am solely responsible for saying that, be- South American income and provide a and quotas and limitations on trade, cause he says:

higher living standard. We are all for which would not free up trade but, rather, tighten it. As I stated, that was the fully endorse, is to check the disastrous de

The purpose of the agreement, which I that. This bill will not do that. We

can do it through my next point, which duplicity in the President's statements cline in coffee prices that began in 1955, by

cline in coffee prices that began in 1955, by is capitalism. Why can we not rely, for on the Trade Assistance Act last year holding a floor under these prices at the a change, after so many decades of welin 1962. general level prevailing in 1962.

fare statism, on the capitalistic market,

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