expansion that we have because we just will not have the money. Maybe that is not a good answer to your statement.

Mr. SADLAK. Very good. I am probably going along a little into the future, but I think we must project our thinking that way. Mr. CAMPBELL. That is correct.

Mr. SADLAK. Because if you can then justify the fact that your overall picture is making money but your main part which really started the Dow Chemical has been damaged and is going out of the picture, then why not take step No. 2 and do away with your research division or your atomic-energy division, take them out because the other two remaining parts are still making money. I think there might be some necessity of making provision in this particular bill to look after that situation.

Dr. LLOYD. We feel that very keenly, Mr. Sadlak. In the chemical industry, and perhaps in most industries but it is acute in the chemistry industry, there is so much difference between products made. Seldom do you get an individual product off, you always get byproducts, and any large company plans to utilize and develop and sell these other products. If foreign competition knocks out one of these coproducts, then it means that the total cost must be borne by the other products, and as a consequence it becomes less competitive, and under the present conditions of the peril point the whole picture, the profits of the whole company must be taken into account and not for any individual division or product which makes it very difficult for the chemical company to claim injury even though it might lose the total market and go out of business with a single product.

The CHAIRMAN. Mr. Baker, of Tennessee, will inquire.

Mr. BAKER. Mr. Campbell, this proposition of granting lower income tax treatment to the corporation on its operation abroad, has it been tested in the courts?

Mr. CAMPBELL. Not that I know of, Mr. Baker. It may have been, I am not familiar with it, sir.

Mr. BAKER. What do you understand to be the economic justification for it? An American corporation is what I am talking about, but one which is abroad, manufactures the same product, ships it back in here and enjoys 14, 15, or 16 points less rate on taxes.

Mr. CAMPBELL. Well, the only thing I can say, as I look at it, it is a part of a broad picture of trying to build up the rest of the world. I am sympathetic with that objective. Actually, we have not been very much export minded. I personally think it is probably a good thing if it is to take care of those markets over there that are not being now supplied.

Mr. BAKER. I gathered from your testimony in chief that if it is confined to foreign markets or sufficient tariff added to be competitive here. Do you see a constitutional question involved there under the equal protection of the laws provision of the United States Constitution?

Mr. CAMPBELL. I am not prepared to answer that. I have not gone into that question, Mr. Baker, so I do not think I am qualified to answer. I am sorry.

The CHAIRMAN. Mr. Curtis of Missouri will inquire.

Mr. CURTIS. I was very much impressed with the statement right at the beginning, the second paragraph, where you state:

We might feel differently if H. R. 1 were a bill which called for a study by competent industrial and governmental committees of the many products imported to our markets, and the vital questions of employment effects, national defense, and other economic considerations were selectively taken into account.

I am deeply impressed by that, and it is a line of questioning that I followed when the governmental witnesses were here, to try to find out what procedures had been set up in the various departments, such as Commerce, Labor, State, Treasury, and Defense, whereby industry and labor who wanted to present their point of view on their case or one of their products could have it presented. Now, that information will be made available for the record, but is not yet available. However, therein in my opinion lies almost the guts of this whole problem, as I see it. The executive department does have this Committee on Reciprocity that the executive witness testified to, which was set up by Executive order in 1949, but I was impressed with the fact that, apparently, it has not been modified since 1949, and I have been impressed, too, by the fact that many industries have come here, including labor, testifying that they do not feel they have a method of presenting their case.

Now, one reason, I must say, historically in favor of the reciprocal trade formula that I see is the fact that Congress previously would try to write tariff laws and try to do the very things that you suggest. I think this detailed work has to be done by competent industrial and governmental committees.

The argument was that Congress, due to various pressures, and so forth, was not in a position to really write the individual tariff laws. So we went to what I say was the other extreme and Congress simply gave all its authority practically to the Executive, and said, "Do it, but we did not get into this detail of how the executive department is to do it.

You suggest that if such a study, or this bill called for such a study by those committees that would take those things into account, such a bill would be a sane, fair, middle-of-the-road approach, and the more I listen to the testimony the more I am convinced that that is what the Congress is going to have to do in this thing if we are going to do an adequate job.

Have you or your group given any thought to what legislative language or techniques we might set up or are you just suggesting generally?

Mr. CAMPBELL. I think it is the latter, Mr. Curtis, for the reason that we have been so scared on H. R. 1, that we have been trying to oppose that rather than make a constructive exact program along the lines which you suggested, in which I heartily agree.

Mr. CURTIS. I am personally convinced, and this is a personal observation, that the Congress is not in a position to write the tariff laws, as was done, detail by detail, in the past.

Mr. CAMPBELL. I think if the Tariff Commission were strengthened in some way, and I do not think the Congress should take up its time in a particular field, but give the Tariff Commission sufficient authority that when they do something it will be O. K., maybe something along that line. Although I am frank in saying I have not gone into it too deeply.

The CHAIRMAN. We thank you for your appearance and the information given the committee.

Mr. CAMPBELL. Thank you very much.

The CHAIRMAN. The Chair is advised that Mr. Bernard Ring has to catch a plane or a train, and the witnesses listed ahead of him have agreed that he may go ahead of them on the calendar. Is that correct? Is there any objection on the part of anybody to Mr. Ring being called now?

The Chair hears no objection.

The next witness will be Mr. Bernard Ring, vice president and sales manager of the Kent Metal & Chemical Corp.

I might state there is a rollcall on in the House and the Members will have to answer that call and return as promptly as they can. We will continue the hearing during this time.

You are recognized, Mr. Ring. Please give your name, address, and the capacity in which you appear.

STATEMENT OF BERNARD RING, VICE PRESIDENT AND SALES MANAGER, KENT METAL & CHEMICAL CORP.

Mr. RING. First of all, I would like to extend my thanks to you for the courtesy extended to me.

Mr. Chairman, and gentlemen of the committee, my name is Bernard Ring. I am vice president and sales manager of the Kent Metal & Chemical Corp., located in the borough of Edgewater, State of New Jersey.

The Kent Metal & Chemical Corp., founded in 1939, manufactures only flints for lighters and other sparking purposes which is listed as ferrocerium and all other cerium alloys under paragraph 302Q in the Tariff Act of 1930. With your kind permission I will refer to it only as flints.

There are two producers of flints in the United States, namely, Kent Metal & Chemical Corp., of Edgewater, N. J., and New Process Metals Corp., of Newark, N. J.

Other producers are located in Austria, Western Germany, France and England, and to the best of our knowledge there are no further producers anywhere in the free world.

This fact became self-evident when the United States flint industry was called on to supply the free nations of the world with their necessary requirements of flints during World War II and the state of emergency up to and including 1951. The Kent Metal & Chemical Corp. was honored by being chosen the recipient of the coveted Army and Navy E award during World War II when the United States supplied large quantities of flints to England and Russia under lend-lease arrangements in order to maintain their standard of living when matches were unavailable.

Large demands originated from the Armed Forces of the United States and the nations of the free world, particularly where climatic conditions make the use of lighters not only practical but almost mandatory.

Again referring to the requirements of the Armed Forces, which had to supply lighters and flints to our men and women stationed in subtropical and tropical countries, we believe that we can call ourselves an essential industry.

It was at that time that the men and women wearing the uniform of our Armed Forces found out that a cigarette lighter and the flint it requires was a necessity-not a luxury or a gimmick. Our large demands originated from the Armed Forces.

Actually, this does not only apply to tropical countries but even to our own. The men in the armed services, after being out in the field on training, came back all perspiring and the matches in their pockets became soggy and wet. They were not matches any more but some paper and phosphorus. So we feel that flint is important.

Flints as listed in the GATT Tariff Act of 1930 orginally carried an import duty of $2 per pound plus 25 percent ad valorem. This was amended in 1947 when the rate of import duty was reduced to $1 per pound plus 12.5 percent ad valorem, the rate it still carries.

It should be noted that prior to 1951 there were no imports of flints of any consequence into the United States. To substantiate this we are attaching a copy of the statistics showing the imports of flints from 1934 up to and including the month of August 1954.

(Information referred to follows:)

History of imports—Schedule A No. 6250750, ferrocerium and other cerium alloys

1 It can be doubted that these are flints, because of extremely low valuation. 2 Imported in rod form to be finished for reexport (see drawback procedure Smokers Export Corp., New York, N. Y.; Elizabeth, N. J.; and Belgo-Canadian Mfg. Co., Montreal, Canada).

Antidumping procedure instituted in 1953 resulted in lower imports until after Sept. 28, 1954, when the Treasury Department ruled in favor of the importer.