Mr. SIMPSON. There is no use taking time. You say you do not. know whether the Swiss will permit you to buy one of their machines and bring it over here?

Mr. RALPH LAZRUS. No, I do not. All I know is that when the war was on, and I required machinery from Switzerland to make the parts that we made during the war, those machines came from Switzerland to make them.

Mr. SIMPSON. Parts of what?

Mr. RALPH LAZRUS. To make the parts of the fuses that we made. Mr. SIMPSON. I am talking about watches.

Mr. RALPH LAZRUS. All of that machinery was watch machinery, or part of the watch equipment.

Mr. SIMPSON. It was sold to you, or it was not sold to you, possibly. Mr. RALPH LAZRUS. It was sold to us.

Mr. SIMPSON. And it was limited to the use of fuse manufacturing, and not watch repairing?

Mr. RALPH LAZRUS. I cannot tell you whether that was so or not, because, frankly, I was not the one who made the purchase, but Í know that the machinery came here and we disposed of it here, as a matter of fact.

Mr. SIMPSON. We pretend to be free traders and we pretend to be interested in the welfare of the Swiss, and the welfare of our country, and yet we have laws under which we do not allow tobacco seed to be sold outside of the United States, and the Swiss have laws under which they do not permit the sale of certain machines, sold in the United States. Now, with those limitations, we undertake to have reciprocity.

Mr. RALPH LAZRUS. Let us explain to you, Mr. Simpson, that there is a concern by the name of Bulova Watch Co., one of the largest manufacturers here, and they have machinery, all Swiss, with which they are operating their American plants. They were not established by the American companies, as an American manufacturer. They were established by the Swiss as an American manufacturer.

Mr. SIMPSON. The Swiss are taking care of their own, and I hope that we take care of our own here, and I think that you do, too. Are you interested or would you like to have the tariff reduced on the watch cases? I would like to have an answer on that.

Mr. RALPH LAZRUS. I certainly would be very happy to see the tariff reduced on watch cases, and I would like to see the tariff reduced on watches, and I would like to see the tariff reduced on all items. I think it creates more business and more labor and more prosperity in the United States, and that goes for watch cases as well.

Mr. SIMPSON. All right, you would be willing to have the tariff on cases reduced in the Japanese agreement, where they are under consideration now?

Mr. RALPH LAZRUS. I would.

Mr. SIMPSON. So that you would no longer have occasion to manufacture them.

Mr. RALPH LAZRUS. I am not afraid of being able to manufacture against Japan, or anybody else. I think that we in our watch-case plant can manufacture cases as cheap as anybody in the world. Mr. SIMPSON. You think that you are now doing that?

57600-55-pt. 1—24

Mr. RALPH LAZRUS. I think that we are doing it now. The proof of the pudding is that the only cases we use are the ones we make, and we know that they make them in Japan, but we make our own. Mr. SIMPSON. They are not shipping them in here.

Mr. RALPH LAZRUS. That may be, and I am not even interested. I think I can beat them any day of the week.

Mr. SIMPSON. Thank you very much.

One other question. Have you recommendations for amendment to this bill, H. R. 1, which will take care of these very grave charges that you are making against the administration of the law?

Mr. RALPH LAZRUS. Yes, I have a recommendation to make. My recommendation to this committee is that after an investigation, I would also lodge again with the executive branch-that is, the President-the right to change after the laws have been passed and regulations have been sustained for a certain length of time; when the Treasury wants to make those changes, it should only be by consent of the President. While I do not go along with my brother that I am satisfied with the increase in tariffs-I certainly am not nor is the industry and it is creating a great burden not only upon us but upon the retail trade and the consumer-I am against the higher tariffs, and I am sorry the President signed it, and I do not think he was justified in signing it. I do not think that our trade believes he was justified.

Mr. SIMPSON. Have you raised your prices?

Mr. RALPH LAZRUS. We certainly have. We certainly have raised our prices. But I do not think Elgin will sell one more watch on account of it, because mine are going to be prettier.

Mr. SIMPSON. You do not give us any figures on sales.

Mr. RALPH LAZRUS. I will be glad to submit any figures that the committee desires. I gave you the figures on the imports for the entire industry.

Mr. SIMPSON. You have complete control on them, and you simply delayed buying because you wanted to make a good appearance here in front of the committee.

Mr. RALPH LAZRUS. I never heard of any businessman that had a sale for a product that delayed buying it.

Mr. SIMPSON. You have heard of many a businessman who anticipated the possibility of just what did happen, protecting American business, and he went out and bought all of the parts he could ahead of that time; and that is why your purchases a year ago are different. Mr. RALPH LAZRUS. May I submit-we are closing our books as of February 1-our inventory as of February 1 last year and our inventory as of February 1 this year, and the amount of imports this year and last year, and let us see whether the tariff hasn't hurt this industry. Mr. SIMPSON. You are speaking of the American Watch Association, and not your own company?

Mr. RALPH LAZRUS. I speak of my own company. I cannot speak for the American Watch Association, because I am not in a position to get those figures.

Mr. SIMPSON. You have them here. You say that imports dropped. Mr. RALPH LAZRUS. I am giving you the imports for the industry, and I think they reflect very well just what has happened as a result of this tariff increase.

Mr. SIMPSON. It shows the fact that you stopped buying. That is all, Mr. Chairman.

The CHAIRMAN. Mr. Reed, of New York, will inquire.

Mr. REED. I want to ask this for information. Would you favor absolute free trade?

Mr. RALPH LAZRUS. I would say that that would be a wonderful achievement if it were possible. I can understand, however, that there is an area beyond which you cannot go, as yet. I would like to see the world, just as Mr. Stassen said this morning, so developed that everybody is paying high wages and everybody is able to manufacture all goods, and everybody is prospering throughout the world. That is the condition I would like to see. If that were achieved, I would say I favor free trade.

To the degree that that does not occur, I can see the need of some protection. But I think that I have not found that protection necessarily follows or solves the ills of firms.

Let us look at what happened in the felt hat industry.

Mr. REED. I just want to have an answer to the question. Would you favor free trade at this time?

Mr. RALPH LAZRUS. I would not.

Mr. SIMPSON. I have one question I would like to ask the witness. Benrus at one time owned the manufacturing plant in Waterbury, Conn.?

Mr. RALPH LAZRUS. That is correct.

Mr. SIMPSON. You were not allowed by the Swiss to manufacture watches up there

Mr. RALPH LAZRUS. That is not correct.

Mr. SIMPSON. Under the terms of an agreement you had with the Swiss. Otherwise, they would not have sold you that machinery. Mr. RALPH LAZRUS. That is not correct.

Mr. SIMPSON. What is the correct answer?

Mr. RALPH LAZRUS. The correct answer is that we had to abandon the manufacture, the small amount of watch manufacturing we were engaged in, because when we transferred from our peace economy to the war economy, and found it necessary to make war goods, the equipment that we required for that type of goods was entirely different from the equipment we had on the floor. In acquiring the new equipment, we so disorganized that it was impossible again to organize to manufacture our watches in that city.

Mr. SIMPSON. Do you state that the Swiss Government and Swiss watch industry had nothing whatever to do with your determination? Mr. RALPH LAZRUS. Not one iota did they have to do with it. Mr. SIMPSON. That is all.

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

Mr. CURTIS. Mr. Chairman, I had a question.

The CHAIRMAN. Mr. Curtis, of Missouri, will inquire.

Mr. CURTIS. I want to ask you, Mr. Lazrus, because you asked at the beginning that I ask you this question: I am concerned solely with this one small field of procedures, and the statements that have been made that indicated that the procedures in making these administrative decisions had been arbitrary.

I would like to ask you the question in this general way: Did or did not your industry, or your portion of it, and your company, have a full opportunity of presenting your side of this case to these various administrative tribunals?

Mr. RALPH LAZRUS. My answer would have to be "No" to that, in spite of the fact we did have a hearing, and I will tell you why.

It wasn't until after the tariff hearings, and we found what our opponents in the tariff hearings were about, that we realized that the ODM had been thoroughly investigating their essentiality in this industry, the essentiality of the domestic companies. We were never called in.

Mr. CURTIS. You were not called in?

Mr. RALPH LAZRUS. May I go on and explain exactly what happened?

Mr. CURTIS. Wait, please. I just want to understand it. You were called in at one time, were you not?

Mr. RALPH LAZRUS. We sought that..

Mr. CURTIS. But you were invited in and you had a written state

ment.

Mr. RALPH LAZRUS. That is correct.

Mr. CURTIS. But your contention is that that was too late a time, or what?

Mr. RALPH LAZRUS. I am going to tell you just what occurred, and then you can draw your own conclusions.

I

With great difficulty I got an appointment with Mr. Flemming. had to use my Congressman who represents me, to get there. I got to Mr. Flemming, and I told him of the unfair method that was being used, and the procedure that they were following.

Mr. CURTIS. What was that? What was this unfair method?

Mr. RALPH LAZRUS. That we had never been called in, and that there had been nobody to see us, and no request made of us for anything in writing or in any other manner brought to our attention that this investigation was even going on.

Mr. CURTIS. Now, then, what was that date that you told that to Mr. Flemming?

Mr. RALPH LAZRUS. May I ask when the tariff hearings took place? Mr. CURTIS. In order to save time, because I know you are concerned about it, and so am I, I wonder if you would prepare for the record a summary of the facts and the procedures, and the particular procedures that you are complaining about, because I am very much concerned about that.

Mr. RALPH LAZRUS. I will be very happy to do that.

The CHAIRMAN. All right, you may prepare and submit that statement to the clerk for inclusion in the record.

Mr. RALPH LAZRUS. Thank you, sir.

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

(The information referred to, when submitted, will be placed in the committee files:)

The CHAIRMAN. The next witness is the Honorable Millard E. Tydings.

Come forward, please. We know you very pleasantly from long association with you, but please give your name and address, and the capacity in which you appear, for the record.

STATEMENT OF HON. MILLARD E. TYDINGS, ATTORNEY, APPEARING IN BEHALF OF THE AMERICAN WATCH ASSOCIATION, INC.

Mr. TYDINGS. My name is Millard E. Tydings. My address is 1000 Vermont Avenue, Wire Building, Washington, D. C. I appear in support of H. R. 1, which gives the President the authority to enter into trade agreements with other nations. I am speaking as the attorney for the American Watch Association, Inc., and also on behalf of myself as a private citizen.

I think we can get at the meat of this matter by asking some questions. Is there need for more trade between the United States and the free nations of the world? Will such increased trade make the people of the United States more prosperous? Will more trade improve the standard of living of the people in the other nations of the free world and thus put them in a position to better withstand any attack from within or without?

Or let us ask these same questions conversely. Is there need for less trade between the United States and the free nations of the world? Will such less trade make the people of the United States more prosperous? Will less trade improve the standard of living of the people in the other nations of the free world and thus put them in a position to better withstand any attack from within or without? It seems to me that looking at conditions in our own country and in the free nations abroad, the answer is inescapable. It is only by the maximum of sound international trade between the nations of the free world that democracy can be strengthened, the living standards of all continually raised, free nations be in a position where they can finance their own national defense in their common interest, acquire the strength which will deter an aggressor from instigating world war III, and, should war come, save the civilization and heritages of freemen from disaster.

Let us ask ourselves another question. In what financial condition does the Government of the United States find itself in this year 1955? The recent budget submitted by the President of the United States calls for gigantic outlays of money. To state it simply, even in this year with our country engaged in no fighting war, approximately two-thirds of our total governmental income is to be spent for military preparedness, mutual military security at home and abroad, atomic energy and stockpiling. Think of it-two-thirds of every tax dollar which our Government receives goes for national defense in one form or another-$40,500,000,000 is recommended to be spent for that purpose. We are not only aiding other free nations to become strong economically and militarily, but we are building bases and sending military materiel and United States citizens to many parts of the world in a concerted enterprise to arrest Russian Communist expansion.

Now with such a condition confronting us at this moment, the prospect seems clear that these burdens on all the free world must be borne for some time in the future until our possible foes change their attitudes and actions. Thus, what we confront is not perhaps a temporary condition of affairs. The prospect is that we must continue as we are now embarked for some time to come.