this country, then as they succeed the tendency comes on the part of their American competitors to seek to invoke the escape clause. There is no doubt but that this provision does introduce an element of uncertainty in the situation which the foreign interests would like to have eliminated.

However, in my own opinion, the enactment of the present legislation, continuing the peril point and escape clause, is the proper course for the United States to take. I believe that if that action is taken it will go very far to permit the development of cooperative relations on a stable basis with our friends and our allies.

I believe that the peril point and escape clause are quite important not only for the protection of individual industry in case of need but they are important on a broader basis, not just to protect an individual concern but to protect the interests of the United States.

We have to maintain here a certain, what we call, mobilization base, and we need to have in this country a certain minimum of productive capacity and a certain minimum of skills which are required on an emergency basis as against the possibility that the hazards of war, loss of allies, and the like, might make us more dependend upon ourselves and less able to depend upon others.

Therefore, in my opinion, to maintain that mobilization, a minimum of what we need in the production of certain items and the maintenance of certain skills, it is important to have the peril point and the escape clause in the bill.

Mr. SIMPSON. Now with respect to GATT, is it contemplated there will be a subsequent bill dealing with procedural matters with regard to GATT as requested earlier by the President?

Secretary DULLES. Yes, sir. It is hoped that the GATT negotiations will be concluded by the end of this month. Perhaps that hope may be a little bit optimistic and it may run into February. At the end of that time there will be, we hope, an agreement on the organization of GATT and that will be brought to the Congress for its approval.

Mr. SIMPSON. Is there anything in this bill which would tend to remove the necessity of the GATT legislation respecting procedural matters?

Secretary DULLES. Not that I am aware of. I think that that is not the purpose of the bill. The language of the bill is in many respects extremely technical, and that question, perhaps, more usefully could be put to someone else. But there is no intention whatever to evade the understanding which was given by the administration, which is that the new organizational arrangement, for the administration of GATT, will be brought back in one form or another to the Congress for its consideration.

Mr. SIMPSON. Is there anything available with respect to the format of that legislation, and does it have any bearing upon this particular bill? In other words, should they not both be considered jointly?

Secretary DULLES. I do not think that there is any such relationship between the two that is necessary to hold up this bill for the other.

Mr. SIMPSON. Is there authority in this legislation which permits or would permit the President to enter into agreements in a broader sense than he can today? That is to say, would he be permitted to do things administratively affecting tariffs or customs in a way he cannot

do today? Is there a further delegation of authority to the President by Congress?

Secretary DULLES. Yes; there is in the authority of the President to make the additional limited gradual tariff reductions which are contained in the present bill.

Mr. SIMPSON. Can he not under this bill make concessions or changes in our tariff law without regard to a trade agreement? Secretary DULLES. Oh, yes.

Mr. SIMPSON. He may not do that today, is that right?

Secretary DULLES. I was pointing out that I thought that there is somewhat greater authority in the present bill than is in the existing law in some respects.

Mr. SIMPSON. What do you mean by that? That he need not have a trade agreement meeting and enter into reciprocal trade agreements to do these things?

Secretary DULLES. As I understand it, the provision which permits of a reduction of the tariffs on articles not now being imported, or only being imported in negligible quantities, that does not require a reciprocal agreement.

Mr. SIMPSON. Is it not possible that some of those items are items which are not being imported because the tariff has been kept high in order to keep them out, and are we not creating a potential threat in an area where we thus far have wanted to keep them out?

Secretary DULLES. That is possible. The question could not be answered without going through what would be the list, and I do not know just what that list is. I think it can fairly be assumed that the authority that is granted here will not be recklessly exercised.

I made in my opening statement a pledge which I am confident can be taken seriously, which is that these discretionary powers which would be given to the President, if this bill is enacted, would be exercised in a considerate way and a way which would take into account the business needs of the situation. I think that sometimes businessmen fear that these powers will be exercised by persons who are entirely theorists in the field, who do not have the feel of the business situation and do not understand what the impact of certain acts would be, in actual business situations. It was the hope of allaying any such fear that I gave the pledge which is contained in my opening

statement.

Mr. SIMPSON. Yes. From the standpoint of the man who is out of work or from the standpoint of the business which is not getting relief after seeking it, they are not entirely happy by that assurance, in a general statement, even though it is unquestionably your interpretation of the President's intention.

As I said to you a couple of years ago, there is a feeling in my mind that where deliberately a business is lost to this country in whole or in part because of international political reasons, it is a burden which should be borne by all of the people and not, for example, by the unemployed coal miner, or any other gentleman who has lost his work on account of trade concessions.

But my question is this: Do you believe that it is wise to empower executives with even more control over the tariffmaking power than the Presidents have had to date? I presume you do or you would not ask for this bill.

Secretary DULLES. You are quite right, sir.

Mr. SIMPSON. Is there a limit, and is there a danger in it?

Secretary DULLES. I see a danger. There is, of course, a danger in any delegation of power, or any possession of power. It is, however, necessary to consider the risks, that that power would be abused, as against risks, which come from being so fearful of delegation of power that there is no delegation at all.

It is not always easy to draw a precise line between the point where power has to be delegated in the general good and where the delegation of power is excessive, because of the danger of abuse.

I believe, myself, that the provisions of this bill are drawn with sufficient care to exclude a delegation of power which could be abused. Of course, it is always within the power of the Congress, and I realize it might take a vote to override a veto, but it is always within the power of the Congress, if legislation is abused, to repeal and modify the legislation.

Mr. SIMPSON. Are we surrendering in this bill, or is the President surrendering in this legislation, authority which he now has which has been unused to date to cut tariffs under existing law? Does that authority expire on June 12 or is it continued in this bill?

Secretary DULLES. I believe that some of the present authorities of the President would be continued by this renewal.

Mr. SIMPSON. That is, there have been two. Most recently the legislation that we had was to cut tariffs 50 percent below the 1945 rate, as I recall. Some of that authority has not been utilized to date. Now, after June 12, with the expiration of the present bill or the continuance of the new one, which is envisaged, would there remain the authority to make the cuts now possible under the existing law?

Secretary DULLES. Apparently the answer to that is that the power would lapse, except as it is preserved for possible use in connection with the pending negotiations with Japan. In case those negotiations are not concluded by next June 30, that would be true. Also this authority would be maintained in the case of products not now being imported or being imported in negligible quantities and in order to give effect to any concession contained in a trade agreement entered into prior to June 12, 1955.

Mr. SIMPSON. There is a special section in here which deals with Japan. Now, I do not know whether you intend it this way or not, and I did not help write this bill, but it does seem to me that we ought to evaluate whether we are not surrendering authority at least equal to or greater than that which we are writing into this bill in these 5 percent reductions. We ought to consider that, I think.

Now, I want to talk about the Japanese plans here a bit. We have published a long list of items upon which we may make the tariff concessions in the Japanese treaty. Every producer of those items is on notice right now that his article produced in the United States may have his tariff rate cut. That producer is very uncertain, and he should be hesitant about what he shall do domestically to improve his business and to make investment.

You will recall, Mr. Secretary, that last year one of the major jobs this committee did was to try to provide incentive capital for the expansion of American business. I am afraid that by this law and this long period of indecision, wherever one of the hundreds of items create an area of uncertainty for the American producer, we are hurting ourselves businesswise. I could go through and list the items that

are included in that list and ask you whether it is intended that the tariff be cut on this item or that item. You would quite truthfully say that you do not know.

And yet I think that you will agree with me in the past that the uncertainty which has existed will continue for months, and it is bad for the American investor.

Cannot something be done, legislatively, to remove that uncertain attitude?

Secretary DULLES. I agree with you that the process of going through these negotiations is a rather long, drawn out and rather painful process, which carries with it a considerable measure of uncertainty and fear which, in large part, turns out in the end not to be justified, because I think there is little doubt but what, in the case of at least many of the articles on this list, after the hearings have been held and the situation appraised

Mr. SIMPSON. Why are they not screened much better than they are?

Secretary DULLES. There was a very considerable screening, as a matter of fact the list, as it originally came to my attention, was a longer list that the final list. I asked Mr. Hoover, the Under Secretary of State, to go over this list, and it was reviewed at that time by not only the experts in the different departments involved-I may say the State Department is only 1 of 7 or 8 departments which contribute to that list but it was gone over by both the experts and either the head or the deputy head of the different departments.

As a result of that, a considerable screening of the list did take place, and the list finally used was shorter than it had at one time been contemplated. It is quite difficult to cut these lists down to small dimensions, because involved on the lists are not merely the goods which might be involved if we just had a bilateral dealing with Japan. It would be possible in that case to have quite a relatively short list.

But that, as you know, in part, involves multilateral negotiations, so that it involves not merely articles which might come in from Japan but articles which might come in from third countries, as a result of their making concessions to Japan.

So that it is a pretty complicated and widespread procedure, and I would be very happy if a way could be found to make it less painful because I fully realize the difficulties in it that you point out.

Mr. SIMPSON. Do we have, with respect to Japan, a policy which permits under certain circumstances dealing back of the Iron Curtain by our friends in Europe with respect to certain items? That is, they can sell back of the Iron Curtain, or trade?

Secretary DULLES. I did not get the first part of your question. Mr. SIMPSON. I said that we had a policy, or we do not object to our friends trading back of the Iron Curtain under certain circum

stances.

Secretary DULLES. Yes; there is a limited list which is worked out by an international committee that sits in Paris, and which is called the COCOM list, which has on it certain articles which are restricted and certain ones which are not restricted, but watched carefully.

Mr. SIMPSON. Do we have that same type of list, or does the same list apply with respect to Japan and trading in China?

Secretary DULLES. The same list applies to Japan's trade with China, as applies to trade of other allied countries with China. This

list, incidentally, is much longer and much more restrictive than the list applicable to the Soviet bloc in Europe. Of course, in our own case, we have a total embargo on trade with China, but that is not the case with most other countries.

Mr. SIMPSON. So Japan does have, with our knowledge and approval, or permission, present trade with Red China, to some extent, as far as we are concerned?

Secretary DULLES. Yes.

Mr. SIMPSON. I do not disagree at all, and I think that is her natural market in limited lists, and she will have to develop that. We cannot absorb that market here.

That is all I have, Mr. Secretary.

Mr. FORAND. Mr. Secretary, some mention has been made of the escape clause. That recalled to my mind the fact that I was quite active in the insertion of the escape clause in the law, so that it would be included in all treaties that the United States made. But there has been so little use made of it, in fact, practically none, that I am inclined to believe that we are just kidding the people when we continue to include an escape clause.

Now, is it the intention of the administration, in view of the fact that your statement refers to the continued use of the peril and escape clauses, that those will be used and not put there just to kid the people along?

Secretary DULLES. The escape clause has rarely been invoked. As a matter of fact, I do not have the list with me.

Mr. FORAND. I think it has been invoked about 4 or 5 times out of in excess of 50 applications.

Secretary DULLES. That does not, itself, I think, give an adequate picture of the value of the escape clause because the very fact that the escape clause is there and could be invoked tends, in many cases, to lead foreign countries to exert an influence to cut down exports to the United States which might otherwise lead to invoking the escape clause.

It creates a potential which is properly protective. The fact that you do not have to use it very much is not, itself, proof that it is not useful. In fact, the utility of many laws is measured by the fact you do not have to use them, and the very fact it is there tends to prevent the creation of the conditions under which it would have to be invoked.

Therefore, I believe that an escape clause has a value and actually operates to protect American industries from excessive competition, by the very fact it is in the law, even though it is not formally applied by the President.

Mr. FORAND. From what you state, I understand it has a psychological value, and that is about its value.

Secretary DULLES. It has a psychological value in that other countries know that excessive export of certain types of goods to the United States would lead to invoking the escape clause; therefore, they in their business try to keep I think within reasonable bounds. And I think, therefore, it does have a useful influence.

Mr. FORAND. There are three particular items that prompted me to work hard for the escape clause and those are items manufactured in and around my State, textiles, for one, and, of course, with this Japanese treaty pending, why there is a great scare up there among