foreign trade is on a pay-as-you-go basis, either our imports must increase or our exports must decline. As imports increase, some domestic producers will be faced with new competition from abroad but this will be offset in part by greater domestic consumption; but as exports decline, other producers-including broad segments of American agriculture-will lose a par of their market altogether, and their consumption of local production must decline accordingly. A low level of international trade will adversely affect both interests, while a high level may serve the best interests of both export industries and local industry. Faced with this dilemma, the proper course, in the opinion of the American Cotton Shippers Association, is to maintain international trade on the high level rather than the low. It is better to lift inports to the level of exports than to cut or pare our exports to fit the level of imports. Certainly, it would not be the proper course to establish at this time new and additional barriers to imports an thus force the reduction of our exports even below the present leve of imports. This opinion rests in part upon the association's natural concer for the welfare of the American cotton grower, whose market is in substantial part at stake. It rests also on the conviction that international trade will, if unfettered by artificial barriers, promote the most efficient use of the trading world's resources, and thus will rais living standards. It rests, finally, upon the conviction that in the interests of all producers and all consumers we should encourage, not restrict, those many industries that, by exporting, have proven their ability to conpete abroad as well as at home. Holding to these convictions, the association, at the Memphis meeting to which I referred earlier, passed a resolution with which I would like to conclude this statement: Resolved, That the American Cotton Shippers Association approves and edorses the proposal of President Eisenhower for a commission to formulate a complete program to maintain a high level of international trade, and that this association should present to any such commission and keep constantly before the proper congressional committees its view that any artificial barrier to in ports of foreign goods is an equal barrier to the export of American cotton an an uneconomic burden upon the cotton farmer and the entire cotton industry and all other export industry and can be justified only by overriding national security requirements; and Resolved further, That this association favors: (1) Extension of the Reciprocal Trade Agreements Act for 1 year withert change; (2) Simplification of customs laws, rules, procedures, and classifications: (3) Elimination of arbitrary quotas and restrictions on imports of cheese. fats, and oils. The CHAIRMAN. We thank you, Mr. Oden, for your fine presenta tion of the problem as you see it. Are there any questions? The Chair hears none. Thank you, sir. Mr. ODEN. Thank you, gentlemen. The CHAIRMAN. The next witness is Mr. E. N. Mimms, president. E. N. Mimms Co., Louisville, Ky. Will you please give your name and the capacity in which you appear? STATEMENT OF E. N. MIMMS, PRESIDENT, E. N. MIMMS CO., LOUISVILLE, KY. Mr. MIMMS. Mr. Chairman, gentlemen of the committee, my name s E. N. Mimms, and I am president of the E. N. Mimms Co., of Louisville, Ky. My company manufactures electric fans of several styles and models. We are a small company that does an annual sales Tolume of less than $300,000. I and so many other small manufacturers are vitally interested in House bill H. R. 4294, which is known as the Simpson bill. Alhough the greater part of our business is naturally done with the lomestic market, our sales in the countries south of the United States re most welcome because it supplements our normal volume and imroves our annual financial statement. The market within the United States is receptive to our products. From January to July, but the market south of us buys during any nonth in the year. Naturally customers that buy a season product when it is out of season are a most valuable asset. To curtail the imports of residual oil from Venezuela will result n a hardship to both countries. Since we bought 128.5 million barrels of this oil from them last year, we evidently needed that oil. The oil efineries are doing what any good business people would do, that is, xtracting more of the lighter and higher priced products from the crude oil each year. Our laboratories are still working toward a bigger and bigger yield from the crude and, consequently, each year here will be less and less residual. It appears to me that instead of buying less residual oil from Venezuela, we will need to buy more in the future to fill our requirements. Our past and present national administrations have done wonderfully well in establishing good relations between the United States and our neighbors to the south. Although curtailing our imports from Venezuela will not bring about any rupture in relations, I am sure that it will lessen, to some extent, their good feelings toward us. The continent of South America is made up of 13 countries, each being considerably smaller than the North American countries, and their Smallness naturally gives them an insecure feeling and draws them loser to each other. Their proximity and mutual feelings and needs bring about an understanding between them similar to the various States within our country. When, after several years, we abruptly withdraw our market from Venezuela, their disappointment is also felt by their neighbors. The ill effects of such an action on our part will be far reaching. The aggressive enemy that we have is drawing every power on the face of the globe within its influence wherever it can possibly be done. Although their methods of gaining cooperation are of a kind that we have never used and never will use, nevertheless, Moscow dictates to a far greater area than England ever did at the height of her power. Gentlemen, I say to you that this framework of friendship that has been so carefully constructed for so long a time should not be shaken by us refusing to buy a friend's product that we need in greater quantities now than ever before. Shakespeare expressed the thought as no one else could have expressed it. "The friends thou hast and their adoption tried; gripple them to thy soul with hoops of steel." International relations between all countries since Hitler rose power have changed and reversed themselves so often that it has bee difficult at times to determine whose friend is whom. The former loyal friend that we have always considered "good old China" wou! now destroy us if she could. A few years ago none of us believed that such a condition could be brought about and such animosity could be developed in a fried that we had stood by for so many years. Gentlemen, your decision on the Simpson bill is far more important than deciding how m or how little Venezuelan residual oil is delivered to the ports of the United States. It is far too important for us to weigh the wishes of a special group that have been employed full time whenever they were willing to work. With our fast-increasing population and our expanding industry this country can assimilate all of our coal th John L. Lewis can be induced to permit the miners to dig, as well as residual oil from Venezuela in equal or greater quantities than e have received from them in the past. To keep Venezuelan exports out means to keep our imports in and naturally we do not want to do this. No nation can contine indefinitely to import more than they export. We are fast approa ing a status of "one world." To continue to have all the good thing we have been enjoying so long, we must enable our neighbors to ha some of them also. We are recognized as the big, strong, and rich power that is in a position to impair the economy of smaller nation especially those who cooperate with us. We are so accustomed to the wealth, prosperity, and production f our country that we take all of this for granted. All of this looks much bigger to the citizens of some of the small dependent nations. than it does to us because they have never enjoyed our enviable pe tion. I am not pretending to say that they feel antagonistic towar us because of our many comforts that they do not enjoy; but the will fail to see why it would be necessary for us to curtail our pr chases of a commodity to such a great extent when they know the we have had no surplus of that commodity in the past, and our nee each year for that commodity will be greater than they were in the year before. If I were a citizen of Venezuela, and the Congress of the United States passed the Simpson bill, I would wonder if the United States were, in fact, a true friend of my country, or was she a country whose attitude was subject to sudden change for little cause and witho regard to the injury my country would suffer. In this regard, th committee should bear in mind that a trade agreement was concluded with Venezuela as recently as August of last year. When I began to talk to you, I told you of my manufacturing pla that enjoyed a modest exporting business. What is true of my co pany is true of several thousand other small companies that are in like position as ourselves. None of these manufacturers and none of their employees would like to forego those additional customers Undoubtedly you have been told that employment in the coal industry would suffer without the enactment of the Simpson bill, but I say to you that the aggregate employment of thousands of exporting manu facturers will suffer as a whole to a greater extent than the labor that mines coal. There possibly are times that the Congress must consider, in weighng legislation, the welfare of certain groups, and possibly at some ime in the past or at some time in the future the coal producers and niners will be entitled to such consideration. I say to you with emhasis, gentlemen, that this is not the time for such consideration of his group. The present administration has been in office only a few months hich is insufficient time to allow all the consideration required for hanges in export and import legislation. H. R. 4294 is of such ortent that at least a year should elapse in its consideration before doption by the Congress. Not a year of active committee work such s you are now doing, but the lapse of time will give you and the other fembers of Congress a perspective that you are not now in a posiion to have. Congressman John M. Robsion of Kentucky has introduced in the House, H. R. 4491, a bill for extending the authority of the President o enter into trade agreements under section 350 of the Tariff Act of 930 as amended. The passage of the Robsion bill would maintain The status quo for 1 year which appears to be advisable. A year from now your thinking and the thinking of the rest of the Congress will have consolidated to a point of soundness that can nly be attained by the passage of time. It is my sincere hope and he hope of many other businessmen, both large and small, that the Robsion bill will be recommended for passage. I have not gone into an analysis of the technical ramifications of he Simpson bill. I am sure that these aspects of this bill have been discussed with you by many former speakers. My thinking has been asic, and my approach fundamental. I have endeavored to give ou the views of the average businessman. My appearance and presentation have been as a small-business man giving you the thinkng, the beliefs, and the desires of a representative citizen. I trust that the committee will bear in mind the survey of the views of leading citizens in 25 of our cities, which was conducted by the Council on Foreign Relations and summarized in the Council's recent eport entitled "Foreign Trade and United States Tariff Policy." As he committee is undoubtedly aware, the officers and directors of the Council include such prominent Americans as Elliott V. Bell, John W. Davis, Lewis W. Douglas, Allen W. Dulles, Thomas K. Finletter, Grayson L. Kirk, R. C. Leffingwell, Philip D. Reed, and Myron C. Taylor. As I appreciate that the time of the committee is limited, I shall not read the following extracts from the Council's report, but I respectFully request that they be made a part of the record. The CHAIRMAN. Without objection, so ordered. We thank you, sir, for your very fine statement. (The information referred to follows:) FOREWORD The belief that the prosperity of this country is dependent on the protective tariff has been firmly held by a large part of our population for almost a cenury. For several decades after the Civil War the national political parties were sharply divided on the tariff, but with the increasing industrialization of the South and of other sections of the country, protectionists were to be found among Democrats as well as Republicans. The tariff became, in General Hercock's words, a local issue. The recognition of the true relation of foreign trade to the functioning of the domestic economy has been a slow process. The long-drawn-out battles t Congress produced millions of words in the newspapers and the Congressional Record, but the debate consisted mostly of the exchange of well-worn cliche which left the public none the wiser. In the universities, a succession of brilliant economists such as William Graham Sumner, Frank Taussig, and Jacob Viner exposed the fallacies of pretection and put the case for freer trade forcefully and with great clarity. H dreds more of teachers of economics made tens of thousands of undergraduates familiar with the theory of international trade. But this teaching had little impact on public opinion. The American business community, until recently maintained a fairly solid protectionist front. It either ignored the professors or dismissed their arguments as "theoretical." It is against this background that the results of Mr. Barber's survey should be considered, for the answers of respondents, in the great majority of cases, add up to a clear repection of the protectionist thesis. The replies, as Mr. Barber has pointed out, show no regional differences Residents of Providence and Boston express the same views as those of Indianapolis, Albuquerque, and Seattle. Of greater significance is the agreement among the various occupational groups. Businessmen constitute the largest group, 44 percent of the total. They include producers of oil, steel, chemicals aircraft, textiles, machinery, and electrical equipment, as well as bankers and insurance executives. It would be an exaggeration to say that the businessmen now speak the same language as the educators. In general, the professors are still more libera than the average of the community and the businessmen more conservative. b on the tariff issue, according to this survey, the divergence is surprising small. Many of the replies are interchangeable. For example, take these typical observations in response to the question "Should it be United States trade policy to reduce import duties only if this does not damage domestic producers?" An educator in Omaha replied, "I do not think that inefficient producers, in nonvital fields, have any right to be subsidized by the taxes of the consuming public." A member of the financial community in St. Louis used practically the Di words. He said, "Absolutely not. Uneconomic domestic producers have : right to be subsidized by the Government or the American people, much les by an indirect method so that the people are unaware of the subsidy." A professor in Philadelphia replied, "Those producers who cannot face the competition of a free world market are simply levying a tribute on Americat consumers." A businessman in Seattle was equally emphatic. He said, "No, since ‘damag can be construed to mean anything from a healthy increase in competition bankruptcy, and some firms will suffer ‘damages' with every reduction." The findings of this survey, indicating the revised attitude of many busines men on imports and foreign competition, are reinforced by such events as the October 1952 declaration of a committee of the National Association of Mannfacturers "that the way must be found to improve the access of foreign p ducers to American markets, ***", and by Henry Ford II's recent advocacy ¿ free trade. The causes of the apparent shift in business opinion are not far to seek. The have to do with our export surplus and the continuance of aid to Europe. The involvement of this country in the cold war requires that we have strong alle in Europe. They need dollars with which to buy food and raw materials. W have been meeting this need by annual subsidies running into the billions. allies prefer trade to aid, but thus far we have preferred to give them dollars rather than to allow them to earn the dollars by selling us their goods. Nor public opinion, including business opinion, is showing reluctance to contin such large grants for economic and military aid. At the same time, as this survey shows, people are coming to recognize that a sudden decline in foreig aid would injure export industries. The only practicable way of escape fre this dilemma seems to be the lowering of tariff barriers and the acceptance of more imports. |