I would like to explain the league's position a little more fully on each of these points:

1. The league is fully aware that the new administration needs more than a few months to formulate policies in the many fields of foreign relations as well as in areas of domestic policy. To us it seems desirable that a commission composed of Representatives of the Congress, the executive branch of the Government, and private citizens make a study of our policies on trade, foreign aid, and our other international economic obligations and see that these policies are consistent with each other and consistent with the long-range foreign policy objectives of the United States. The league hopes the commission will report in time to have its recommendations studied by interested citizens throughout the country as well as by members of the Congress and the executive branch.

At the same time the league would like to caution that there is a danger in waiting a year before the United States formulates a new trade policy. All free nations are looking to the United States and are waiting to see what our international trade policy will be. Many of these countries will not take steps to liberalize their own policies until they see that the United States is willing to increase imports. The result of a protective policy may be a continued decline of American exports. Another possible result is that if other countries cannot be assured of a United States policy that will encourage imports, they will look to the Soviet Union for the commodities they need to keep their economy healthy.

2. The present Trade Agreements Act is not adequate to meet the situation in world trade that is confronting the United States. The present act assumes that world trade is in balance and that we cannot offer a trade concession unless other nations offer trade concessions in return. What is needed by the United States is a policy that will help restore the serious imbalance of trade existing in the world today which is reflected in the large dollar gap. If this imbalance continues to exist and our foreign aid program is reduced, the United States economy and the economies of all free nations will suffer. The United States is the greatest creditor nation in the world today, and if we do not take the leadership in reducing our barriers to trade, other nations will not reduce theirs.

3. In 1951, Congress added the escape-clause and peril-point amendments to the Trade Agreements Act. The league questions whether it is possible to set a peril point; that is, a point below which a domestic industry will suffer injury because of imports. Moreover, the League objects to the principle that at no time should imports "injure" a domestic industry. We believe that imports furnish competition and that competition is generally healthy to the American economy. If we have laws in this country against monopoly which impairs competition, then we should not at the same time have laws which assist domestic industries to obtain a monopoly of the American market. The League objects to the present provisions of the escape-clause amendment because they also assume that domestic industries must be protected from import competition. We do not advocate free trade, and we would not like to see our own industries harmed because of unfair practices adopted by other countries. We do think that national security must be considered in terms of protecting some industries which are vital to our defense. But we do not think that

one industry should be protected at the expense of the public interest and at the expense of endangering our foreign policy objectives of a peaceful and economically healthy world. We believe that the escapeclause amendment creates the impression abroad that at any time the market in the United States may be cut off or seriously curtailed. The league would like to see a tariff policy that represented greater stability.

4. It is apparent, therefore, that the League of Women Voters does not wish to see the Trade Agreements Act amended so that the President would be required to accept the determination of the Tariff Commission in escape-clause and peril-point actions as is stated in the Simpson bill. The Tariff Commission is not required to consider the national interest; it is not required to consider foreign policy objectives; it is not required to consider national security; it is not required to consider the consumer; it is not required to consider the effect of a tariff increase on the level of United States exports. It is asked to consider only whether a particular industry has been hurt, or might be hurt in the future because of imports. We believe that the President must be free to view a recommendation by the Tariff Commission in light of the larger factors enumerated above. The league would like to see the Tariff Commission remain a factfinding nonpolitical body. If the number of members on the Tariff Commission is increased from 6 to 7, we fear that partisan considerations will enter into and may come to dominate the findings of the Commission. The league believes that if the Tariff Commission's nature is changed, the public might lose confidence in its studies. In conclusion, let me say that members of the LWV will continue to work in our communities to arouse interest in and greater understanding among all citizens of the importance of world trade. Finally, we believe that a United States policy of expansion of world trade is one of the very best ways to work toward increased living standards and toward international cooperation to solve our common problems.

The CHAIRMAN. We thank you. Does that conclude your statement?

Mrs. RUEBHAUSEN. Yes, it does, Mr. Chairman.

The CHAIRMAN. We thank you very much for the information you have given the committee.

The next witness will be Miss Sally Butler, of the General Federation of Women's Clubs.

STATEMENT OF SALLY BUTLER, DIRECTOR, LEGISLATIVE RESEARCH DEPARTMENT, GENERAL FEDERATION OF WOMEN'S CLUBS, WASHINGTON, D. C.

Miss BUTLER. I am Sally Butler, legislative research director of the General Federation of Women's Clubs, which has a membership of 51⁄2 million women in the United States, with a voting membership of 815,000. The General Federation supports or opposes legislation only after it has been given authority to do so through resolutions adopted at national conventions.

Mr. Chairman, I know the time is late and we have waited a long time, too. We would appreciate it if you will just accept my report

and let me say that the General Federation of Women's Clubs believes that the women played a great part in electing Mr. Eisenhower last fall. We believe it is pretty essential to the security of this country and to the welfare of the rest of the world to give him ample time in which to review the situations that exist today.

We do favor letting him have the year in which to make up his mind and see what is good for the country. We will be glad to stop with that.

The CHAIRMAN. We thank you very much for your presentation. You may make your written statement a part of the record. (Statement referred to follows:)

RECIPROCAL TRADE AGREEMENTS PROGRAM

I am Sally Butler, legislative research director of the General Federation of Women's Clubs, which has a membership of 5%1⁄2 million women in the United States, with a voting membership of 815,000. The General Federation supports or opposes legislation only after it has been given authority to do so through resolutions adopted at national conventions.

All except emergency resolutions are mailed in the convention call to member clubs 6 weeks before the national meeting. This enables them to take action and, if desired, instruct their delegates.

The General Federation of Women's Clubs has supported the Reciprocal Trade Agreements Act continuously since its inception and believes that this act makes possible the most equitable system of trade among the nations. It believes further that under the reciprocal trade-agreements program, price ranges for imports have been kept more reasonable at the consumer level, which in turn affect the standard of living in the United States of America.

It is the opinion of the General Federation of Women's Clubs that the extension of the Reciprocal Trade Agreements Act, as it now is without any major changes for the 1 year as requested by President Eisenhower on May 2, 1953, is essential to the economic welfare of the United States, as well as the rest of the free world.

The women of the General Federation played an important part in the election of President Eisenhower and, as practical homemakers, they understand the necessity of supporting the President's request that a commission be set up to prepare a program of reciprocal trade in conformity with our foreign program designed to promote good international relations.

The raising of tariffs now might well force other nations to increase their trade with Russia and her satellites, perhaps against their desires. It would almost inevitably result in retaliatory measures against our trade. People must live and therefore purchase necessities where they get the best bargain.

Stalin said, in 1924, that the Soviet leaders could now reliably assume that Britain and France would gradually break from the embrace of the United States. At the time of his death in 1953, there was some evidence that his prediction was being fulfilled. We must use our greatest ingenuity to prevent the weakening of our friendship with our former allies.

Higher tariffs right now, when many nations are just beginning to make real headway toward their own economic recovery, could well upset their progress and divert their trade into the realm of our enemies.

The General Federation of Women's Clubs gives its support to the program of our President, believing it is in the best interest of the United States as well as the rest of the free world. We believe that the reciprocal trade agreements program is essential to the maintenance of a high standard of living in this country and to a rising standard of living for the rest of the free world. We therefore urge that the Reciprocal Trade Agreements Act be extended without major change for the 1-year period requested by President Eisenhower.

The CHAIRMAN. I will call the next witness, Mr. Bernard Smith, and allow him 3 minutes.

STATEMENT OF BERNARD B. SMITH, COUNSEL, THE AMERICAN TRADE ASSOCIATION FOR BRITISH WOOLENS, NEW YORK CITY

Mr. SMITH. I filed a statement for the convenience of the committee. I would like a few moments to highlight one point.

The CHAIRMAN. Very well. Will you again give your full name and address?

Mr. SMITH. Bernard B. Smith, counsel, American Trade Association for British Woolens.

I simply want to highlight that under the terms of this bill, because of the limitations on the power of the President, we can find ourselves protecting an industry that we do not intend to protect. I simply want to point out that in the 5-year period from 1947 to 1952, manmade fibers used in the United States increased from 0.8 to 4 percent of all textiles, while in the same period wool dropped from 11 to 7.4 percent.

So the increased use of manmade fibers was precisely equal to the displacement of wool in use in the United States.

The point I want to bring home here is the fact that any attempt to provide increased tariffs or quantitative limitations on the use of wool will protect not the American wool grower, not the American wool industry, but will protect only the manmade fiber industry at a cost, in the last analysis, to the American consumer in the cost of his wool clothing. Thank you very much.

The CHAIRMAN. Thank you, sir, for your presentation. (Mr. Smith's prepared statement follows:)

STATEMENT PRESENTED BY BERNARD B. SMITH IN BEHALF OF THE AMERICAN TRADE ASSOCIATION FOR BRITISH WOOLENS, INC.

The membership of the American Trade Association for British Woolens, Inc., consists of the leading importers of British woolens, the leading clothing manufacturers who use British cloth in the fabrication of clothing, and the leading retail and department stores who feature garments made of British woolens. The vast majority of these firms sell or use American woolens as well as British woolens.

All of these firms are engaged in business in the United States, pay taxes to our Treasury, employ American labor, and rely in part at least on British woolens in the operation of their respective American business enterprises. They are, therefore, necessarily concerned with the tariff policy of the United States insofar as it affects the flow of British woolens to American shores.

In opposing in this statement the limitations on the power of the President, provided for under H. R. 4294, introduced by Representative Richard M. Simpson, we propose to concern ourselves primarily with the following considerations: (1) The need for the maintenance of a consistent policy by the United States with respect to imports.

(2) Trade relations between the United States and the United Kingdom. (3) A comparison of the woolen industry in the United Kingdom and in the United States as they relate to H. R. 4294.

(4) The rising use of manmade fibers in the United States as it will relate to the use of wool if H. R. 4294 is adopted.

Before proceeding with the specific subjects to which this statement will address itself, I should like to remind this committee that woolen exporters in the United Kingdom and importers in the United States have proceeded on the assumption that our Government, as a matter of affirmative policy, is dedicated to the purpose of expanding trade among the free nations of the world and not in contracting such trade. Until such time as the Government of the United States indicates by direct action that its national policy is one of contracting world trade, we are presupposing that neither this committee nor the Congress nor the administration intend to deviate from a national policy of maintaining, if not actually expanding, the volume of world trade.

Too many witnesses have appeared before the committee in support of the concept of expanding the trade between the free nations of the world to take the time of this committee by presenting again the reasons which I regard as sound, which underlies such a policy. On the assumption, therefore, that this committee believes that the best interests of the United States will be served by the maintenance and, ultimately, expansion of trade between the free nations, this statement will address itself to H. R. 4294 as it affects the exports of British woolens to the United States and the importation and use thereof within our country.

I. THE NEED FOR THE MAINTENANCE OF A CONSISTENT POLICY BY THE UNITED STATES WITH RESPECT TO IMPORTS

British woolen and worsted mills sell the output of their looms in the home markets in Great Britain and in other countries all over the world, inclusive of the United States of America. The woolens and worsteds which they sell in this market are on the whole classes of goods that are difficult to manufacture, that require painstaking care, for it is these classes of goods alone that are in demand in the United States. The clothing industry in America does not call upon Great Britain to provide them with the garden-variety type of cloths that are mass-produced by our great vertical mills in the United States. The kind of goods that we call upon Great Britain to make for our clothing industry here are largely exclusive in character and are not readily sold, therefore, in other markets which do not demand of Great Britain the degree of perfection and exclusivity of design and fabric that this market demands. Accordingly, only a small fraction of the mills of Great Britain are prepared to go to the great pains and trouble that servicing the American market requires. The importers and users of British woolens in the United States are therefore obliged to solicit British manufacturers to service this market rather than British manufacturers soliciting the American market. Our clothing industry in America decides the kind of styles and designs they require of British mills for the American market, and, in fact, demand not only unusual styles and designs, but fabrics far lighter in weight than the fabrics produced for use in the United Kingdom and most other markets.

If British manufacturers are to be induced to continue to service the American market in keeping with its requirements, they will require assurance that the ports of the United States will consistently remain open for the products of their looms. It takes many years before British fabrics can be evolved that will meet the specific demands of this market. If, once these fabrics are evolved, our Government should threaten to limit quantitatively, or by increased tariff the flow of such woolens to the United States, the British will have no alternative but to abandon this market for markets in which such threats do not exist. The threat, therefore, implicit in this bill in limiting the power of the President to carry out an affirmative policy of this Government in world trade, is calculated to contract the flow of British woolens to this market as readily as by an actual increase in tariff. The mills of Great Britain cannot afford to design the hard-to-make goods that this market requires without assurance and certainty that this market will, for the foreseeable future, remain open to them. The threat of violent change in tariff rates, the threat of change through the imposition of quotas is calculated inevitably to contract the export of British woolens to the United States.

No manufacturer in the conduct of a sound enterprise can allocate a portion of his productive machinery annually for the manufacture of goods for a specific market if such a market can open and close, contract and expand in keeping with the changing forces and changing economy within the specific importing country. As will be pointed out later in this statement, the manmade-fiber industry is the basic threat to the woolen industry in the United States and not imports of British woolens. Under the bill, as here proposed, the British manufacturer and the American importer and user of British woolens could become the innocent victims of the rising strength of the manmade-fiber industry if H. R. 4294 should be embodied into law. For example, section 6, subdivision (c) of H. R. 4294 provides that if the Tariff Commission should find that a product on which a concession has been granted is being imported under such conditions as to cause or threaten unemployment of or injury to American workers or producers producing like or competitive products, that the concession could be withdrawn, modified or suspended, or that the quantity of such products could be limited, and then further provides that the President must, within 30 days after receipt