As an example of the price differential between foreign fabricators and domestic fabricators, one particular fabricated mica condensor film is brought into this country, duty paid, for $1.80 per thousand pieces. The domestic price on this same part is $2.80 per thousand pieces. This wide and unfair price differential prevails on all parts fabricated outside the United States. The present import duty on fabricated condensor film mica is 22% percent. It was formerly 45 percent before it was arbitrarily cut, with no consideration for the effect this act would have upon the domestic mica fabricators. Recommendation.-We strongly recommend that the import duty on all imported fabricated mica be raised to a minimum of 45 percent. The present import duty on block, or unfabricated mica is 15 percent plus 2 cents per pound. Foreign fabricators do not pay a duty on the mica they import. Their sources for mica are the same as the domestic mica fabricator sources. Thus the domestic mica fabricator is at a disadvantage when buying the raw material. Domestic supplies of raw mica are so marginal that the Government, for its stockpile, is paying domestic miners 10 times the amount received by foreign miners for the same type mica. Recommendation.-We strongly recommend that the import duty of 15 percent and 2 cents per pound be entirely eliminated on block mica coming into this country. We also recommend the elimination of the 20-percent duty on condensor splits (not fabricated condensor mica). The two recommendations set forth will not eliminate the importation of foreign fabricated mica. Instead, these recommendations will enable the domestic mica fabricator to compete on a more equal basis with the low-paid labor of foreign countries. We, as mica fabricators, have always appreciated the extreme necessity for our Government to stockpile mica as a strategic material. However, we have been negligent in appraising the effects of foreign fabricated mica on our own strategic fabricating industry. Our proposals, if adopted, will assure our Government that it will have a vital, trong, and healthy mica-fabricating industry to depend upon if the time arrives when the strategic stockpile of mica is needed for an emergency. Yours very truly, FARNAM MANUFACTURING CO., INC., Re Simpson bill zinc and lead. Mr. DANIEL A. REED, Chairman, Ways and Means Committee, ALRECO METAL CORP., New York 4, N. Y., May 29, 1953. House of Representatives, Washington 25, D. C. DEAR MR. REED: We would like to offer a suggestion in connection with the liding-scale tariffs which have been proposed in the Simpson bill. Although we are importers of metals, we feel that a certain amount of proection for the domestic lead and zinc refineries in form of increased tariffs is vell justified. (1) TIME BASIS OF VARIABLE DUTIES We find, however, that the sliding-scale tariff's in the suggested form are extremely clumsy and unpractical and, if applied, would possibly lead to new problems. If the sliding-scale tariffs would be adjusted every 3 months in acordance with the domestic lead and zinc prices, this would reverse the price rend every quarter of a year and instead of leading to stability, the prices would still fluctuate and the markets would be anything but stable. This fundamental error has apparently been recognized by the National Lead and Zinc Committee whose chairman, Mr. Otto Herres, submitted a new and hanged proposition in which it is suggested to put the import tax calculation on a weekly basis instead of a quarterly basis. We do not think that this would olve the problem, because weekly fluctuation of a duty rate could hardly be sucessfully managed by importers, consumers, or customs officers. To our knowledge no machinery exists to deal with weekly variations of duty ates, and this period is much too short to take into consideration the usual 32604-53-105 delays of steamer arrivals, filing of customs entries, etc. In other words, weekly variations would definitely prove unworkable and lead to continuous controversies and other very serious disturbances in the import procedure. A monthly determination of sliding tariffs would definitely be much more convenient to everybody concerned. (2) PRICE BASIS FOR DETERMINATION OF VARIABLE DUTIES If the sliding duties are determined on basis of the domestic prices as published in the E. & M. Journal the objection may be raised that in effect the domestic refineries can themselves determine the duties by raising the domestic zinc and lead prices deliberately. In our opinion a fundamental error has been made in tying the sliding tariffs to the domestic metal prices. The new tarif is supposed to equalize the difference which exists between the domestic breakeven price and the depressed price at which foreign metal is offered. It is aimed at bringing stability to the domestic price level. By making the new tariff de pendent on the domestic price, one recognizes as a permanent fact that domestic prices will fluctuate in accordance with foreign offers. If we understand the new tariffs correctly, their purpose is to avoid just these fluctuations and to make domestic prices fairly independent of foreign offers. You will agree with s that there is something illogical in this situation and unless our interpretation is wrong, we can only assume that the promoters of the sliding tariffs apparently have not given sufficient thought to this obvious contradiction. We believe that the sliding tariff would really work, if based on actual foreig metal prices. The London Metal Exchange provides a fairly accurate picture of foreign zinc and lead prices. If, to give just an example, a foreign price of £100 (after addition of freight and normal duty) would be assumed to be equal to the domestic break-even price, whereas any price below £100 would be con sidered a dumping price, the sliding scale tariffs could be fixed as follows: If the London quotation is £100 per ton, or over, no additional duty. If the London quotation falls under £100 per ton, extra duty £90 per ton, extra duty- £70 per ton, extra duty Cents pr poun The actual duty could be established monthly, based on London averages fr the preceding month. Thus any new duty would apply to the metal which wi actually sold at the price which forms the basis of the duty, assuming that ! period of several weeks must be allowed between shipping and arrival date. This method would leave domestic prices out of the picture completely. I could be assumed that they would move to at least a break-even point and stay there. It would also leave the door open for necessary imports and give foreig suppliers a sufficient leeway to send their metal here and get even a better turn than now while no sliding tariff exists and prices are depressed. The new duties would thus protect the domestic industry without being prohibitive. This fact alone should remove the objections raised by the foreign supplying countries and make sliding tariffs compatible with the administration's "Trade Not Aid" policy. Very truly yours, Hon. DANIEL A. REED, ALRECO METAL CORP. REPUBLICAN NATIONAL COMMITTEE, House Office Building, Washington, D. C. MY DEAR CONGRESSMAN: It has been brought to my attention that there s pending in the Ways and Means Committee of the House H. R. 4294, whic provides for a graduated tax on imports of zinc. I am writing you urging your support of this legislation inasmuch as it has a great bearing on quite a number of communities in New Mexico. This s especially true of the area around Silver City, where there are important in mines. I have just learned that as a result of the low price of zinc about 70 milies have been thrown out of work in that particular area. These men work the zinc mines and due to current prices it may be necessary to completely ose down the operation at the zinc mines. The importance of having an adequate supply of zinc in the event of hostilities ould seem to justify some protection to the zinc-mining industry in this country that we may be more or less independent in producing our requirements. I pe that you will bring this situation to the attention of the members of your mmittee, and we in New Mexico will greatly appreciate anything you can do insure a better price for this essential metal. With kindest personal regards, Sincerely yours, ALBERT K. MITCHELL, National Committeeman for New Mexico. (Whereupon, at 6:25 p. m., the hearing was adjourned until 10 a. m., onday, May 18, 1953.) TRADE AGREEMENTS EXTENSION ACT OF 1953 MONDAY, MAY 18, 1953 HOUSE OF REPRESENTATIVES, Washington, D. C. The committee met, pursuant to recess, at 10 a. m., in room 1102, ouse Office Building, Hon. Daniel A. Reed, chairman, presiding. Mr. JENKINS. The committee will be in order. Mr. Reed, our disnguished chairman, is expected momentarily. I will imitate him the extent of starting on time. He has a reputation of always arting these sessions right on time. The committee has scheduled 22 witnesses for today. Because of e long program scheduled, it is requested that witnesses observe e 20-minute limitation rule imposed for the presentation of prered statements. We are honored this morning to hear as our first witness the disguished Senator from the State of Nevada, Hon. George W. Malone. Our distinguished chairman is now here. The CHAIRMAN. Good morning, Senator. STATEMENT OF HON. GEORGE W. MALONE, A SENATOR IN CONGRESS FROM THE STATE OF NEVADA Senator MALONE. Mr. Chairman, my name is George W. Malone. m the junior Senator from the State of Nevada. Mr. Chairman, before I talk about the 1934 Trade Agreements Act d the effect of its possible extension, I would like to compliment the airman on the work he has been doing. I have watched his committee work closely from the beginning of e 83d session, and I agree thoroughly with the chairman in his statents recommending a substantial reduction of taxes. It is the earnest opinion of the junior Senator from Nevada that the ly way you will ever lower taxes, and it must be done to protect our ople, is to fix the tax rate on the basis of what the people can pay, en allot the respective amounts to the departments in accordance th the best judgment of Congress, and go home. The CHAIRMAN. Thank you, sir. CONSTITUTIONAL RESPONSIBILITY OF CONGRESS Senator MALONE. Mr. Chairman, the discussion on foreign trade 1st be brought back to the point at issue. So, Mr. Chairman, I will simply say, at the outset, that it is the nstitutional responsibility of the Congress of the United States to |