With respect to the argument that the importers are also important to national defense, it is sufficient to note the fact that the NSRB report fails to include them among the reservoir of precision watchmaking skills in this country which must be maintained and developed in the interest of the national security. The Congress has before it no finding by any competent body establishing any status of national defense importance for the importer-assemblers. We should not consider their claims nor defer acting to protect the domestic industry in the face of the findings of the NSRB and the Tariff Commission of the essentiality of the domestic industry and the serious injury threatened to that industry by Swiss watch imports. The CHAIRMAN. I wish to ask the permission of the committee to insert the remarks of Mr. George M. Harrison, grand president of the Brotherhood of Railway and Steamship Clerks. (The statement referred to follows:) Hon. DANIEL A. REED, BROTHERHOOD OF RAILWAY AND STEAMSHIP CLERKS, Chairman, Committee on Ways and Means, House of Representatives, Washington, D. C. DEAR Mr. CHAIRMAN: It is my understanding that hearings will be held by your committee commencing April 22 on the extension of the Reciprocal Trade Agreements Act. Previously I have had the privilege of submitting statements or testifying personally before the Ways and Means Committee with respect to similar legislation. In view of the very disturbed international situation and the necessity for the continuance during the present crises of a sound and productive economy throughout the free world, I am inevitably led to the conclusion that the present act should be extended without further amendment for the period of 1 year from June 12, 1953. The indulgence of you and your colleagues to the extent of making this letter a part of the hearings of record before your committee is earnestly requested. Yours very respectfully, GEO. M. HARRISON, The CHAIRMAN. I ask permission of the committee to insert the remarks of Mr. C. P. McFadden, chairman, rubber footwear division, the Rubber Manufacturers Association, Inc. (The statement referred to follows:) THE RUBBER MANUFACTURERS ASSOCIATION, INC., Hon. DANIEL A. REED, Chairman, Ways and Means Committee, House of Representatives, Washington, D. C. DEAR CONGRESSMAN REED: While your committee is considering the proposed legislation to extend the reciprocal-trade program, the members of the footwear division of the Rubber Manufacturers Association, Inc., wish again to urge that any extension of this program carry with it adequate protection for those American industries--such as the rubber footwear industry-which would be seriously injured by further tariff concessions on imports. We have pointed out before that our industry-chiefly because of its high labor-cost factor (hourly rate) as compared with foreign labor costs (hourly rate) in the production of like goods-is especially vulnerable to imports. The "escape clause" and "peril point" provisions of the bill now before you, members of our industry feel, are the very minimum of protection for their stockholders and their employees, and for other American industries similarly situated. Any imported pair of rubber footwear means one less pair to be made by American labor. But the effect of the imports does not stop here. Since foreign manufacturers do not care to, and are not equipped to, supply all types 32604-53--120 of rubber footwear needed by the American public, they concentrate on one or a few large-volume and, therefore, more profitable types with a resultant disruption of the domestic market. May we remind you once more that the rubber footwear industry is a truly American industry; that the American manufacturers developed and for years held the entire world markets; that these world markets have been almost totally lost to manufacturers in cheap-labor countries abroad, and, finally, that for the past two decades the American manufacturers have had to wage a bitter struggle to avoid the loss of their own domestic markets. Twice, since the inauguration of the reciprocal-trade program, our products have been listed for negotiations under this program. In 1937, President Roosevelt, in whose administration this program of international trade negotiations was fostered, refused the request of the Czechoslovakian Government for concessions on import duties on rubber footwear. But, 10 years later, at the Geneva Conference, the United States negotiators granted a tariff cut on waterproof rubber footwear which, for practical purposes, was the limit permitted under the law. This was done after members of the rubber footwear industry filed strenuous objection. They went before the Committee on Reciprocity Information. They presented their case to these officials who later went to the Geneva Conference as negotiators for the United States. But they were given not even the slightest inkling of the thinking of these negotiators on their case until announcement of the concessions was made in Geneva. Our members still have the conviction that the members of the CRI were not interested in the validity or logic of our arguments, but were merely interested in granting tariff concessions. We trust that when your committee finally reports this bill (H. R. 4294) to the House of Representatives that it will contain those provisions that will limit the discretionary power of those to whom authority is given to negotiate trade treaties, so that there can be no recurrence of the Geneva action. We wish, also, that you could make clear to the public that tariffs are the best method to protect American jobs by setting a counterbalance against the low labor costs which enable foreign manufacturers to invade the American market. Our industry is not asking at this time the opportunity to appear personally during your hearings on H. R. 4294 because we are aware that you have a heavy calendar, but if it is your wish, or the wish of any of the committee to have representatives of this industry appear, we will be happy to do so. Very truly yours, C. P. McFadden, Chairman, Rubber Footwear Division. Bata Shoe Co., Inc., Belcamp, Md.; Bristol Manufacturing Co., Bristol, The CHAIRMAN. I ask permission of the committee to insert the remarks of Mr. Paul H. Hunt, vice president, Park-Utah Consolidated Mines Co. (The statement referred to follows:) STATEMENT OF PAUL H. HUNT, VICE PRESIDENT AND GENERAL MANAGER, PARK-UTAH CONSOLIDATED MINES Co., PARK CITY, UTAH Mr. Chairman, Members of the Committee, and Gentlemen, I represent one of the small but persistent producers of lead-zinc ores operating in the Park City Mining District of Utah. Our annual production in recent years averages between 10,000 and 15,000 tons of these 2 metals with a crew of 350 to 400 men. We have some 9,000 stockholders scattered through nearly every State of the Union. The Park City District has, since its discovery in 1872, produced 15,590,000 tons of ore, having a net smelter value of $384,810,000. At no time since its discovery in 1872 has there been a complete shutdown of all mines and, in the judgment of geologists. engineers, and operators, the district under normal conditions of balance between prices and costs has many years of life ahead of it. Right today, however, only 1 mine is still operating, which is the lowest record in the history of this 80 years of continuous operation. Working under high pressure and a tight schedule as this committee is doing, it would be an imposition to burden you with data already furnished or waste your time with long arguments. However, if anything is omitted or not made clear, I shall be glad to answer any questions I can. At your meeting in Denver a week ago, representatives of the Mine, Mill & Smelter Workers' Union strongly urged a return to the premium-price plan, more or less as in World War II, for the encouragement of small-mine owners and prospectors. A very similar bill to that proposed in Denver, was S. 2105 introduced in the first session of the 81st Congress on June 17, 1949, by Senators Hayden, McFarland, and Malone. We in Park City and throughout the West generally gave S. 2105 our full support. However, we went up against a stone wall of opposition that subsidies paid any industry in peacetime are economically and fundamentally unsound. I believe such opposition would be even stronger today. When the entire lead industry of this country, large and small producers alike, is either shut down, contemplating a shutdown, or in uncertainty as to how long they can continue operations, we must adopt some other approach than a premium-price plan for small mines and prospects. With the deplorable situation of the small miner, owner, and prospector and with the utmost sympathy for them, I still think the greatest help that could be given them would be the assurance there is a market for his ores in this country, if he is successful, at prices that will yield a reasonable profit. Without this, all the assistance that might be given him is valueless. The testimony of Messrs. Travis and Larson at your Denver meeting, favoring legislation for a premium price plan, does not by any means represent the thinking of organized labor in Utah. For example, the United Steelworkers of America who are the bargaining representatives of the lead-zinc miners in that State, have had their economists and statisticians from their headquarters in Pittsburgh, going over the situation since early in the year. As a result and ent rely independent of the ideas of management, they came to the conclusion the legislation embodied in H. R. 4294, the sliding scale tax on lead-zinc imports when the domestic price for these metals is below 152 cents a pound, had the most likelihood of passage and would provide the most stability of employment for the membership of their union. As proof of this decision, three members of this union from Utah are now in Washington and will appear as witnesses at the hearings before the Ways and Means Committee on H. R. 4294. On the last page of this brief there is a tabulation of data from the Paley Commission's report relative to the production and consumption of copper, lead and zinc in the United States and the free world exclusive of Russia and the satellite countries for the year 1950 and the estimated production and consumption of the United States and the free world for 1975. You will note in table I, the United States in 1950 was an average of 66% percent self-sufficient in these 3 metals and it is estimated we shall be only 49 percent self-sufficient in 1975. Also, the primary production of these 3 metals combined, it is estimated in this 25-year period, will show a decrease of only 8 percent; that is, the report estimates domestic production will maintain its producton of 1950. You will also note in table II, it is estimated if the demand for metals in the United States and the free world are to be satisfied in 1975, the free world must double its 1950 production. In the text of the report it is frankly stated the capital required for this doubling of foreign production must be furnished largely by the United States. The Paley report assumes, therefore, our domestic industry will continue to produce metals for the next 25 years at about the 1950 rate of production, even thou h tariffs are entirely removed and regardless of what may happen to prices. In your hearings you have been given data showing what the increased importations of lead-zinc in 1952 over 1951 have done to domestic prices. Doing away with all tariffs will add still more incentive to increased imports, lower domestic prices and consequently drastically decreased domestic production. As far as reliability to predict 25 years hence, the authors of this report have fallen flat on their faces in the first 6 months since the report was published. Every ton by which domestic production may decrease, by that much, increases our dependency upon foreign sources. By the recommendations of the Paley Commission, if carried out, it is inescapable that some very large share of the capital invested in domestic mining must be written off. The report does not admit this, but the experience of the past year admits of no other alternative. For every $1 we must write off from our investment in domestic mining, we must invest another in foreign mining and we have not entirely forgotten what has happened in Bolivia and Iran. This rash, theoretical experiment to which the Paley Commission would first commit us (doing away with all tariffs on metals) is striking at the Achilles' heel of our future economic health and safety. With our 7% percent of the world's population consuming 45 percent or more of the world's supply of metals, this indifference as to the fate of the domestic mining industry in the report and this eagerness to build up the foreign industry regardless of how dependent we may become, is disturbing to say the least. True, the Paley report dangles before us the hope we may be able, as our dependency increases, to buy these metals abroad cheaper than they can be produced at home. If so, this hope is contrary to all our past experience. We have at times been dependent on foreign sources of supply for essential materials. To name only a few-potash, quinine, camphor, diamonds, crude rubber, coffee. Did the cost of production of these commodities bear any relationship to the prices we were forced to pay? Not the slightest, and our foreign suppliers through cartels controlled production and price to earn the maximum profit. The law which determines prices is not the cost of production, but the need of the buyer. A good example is the recent behavior of copper and lead-zine prices. In 1952, demands for copper exceeded by some 10 percent available supplies, with the result foreign copper was held at 36% cents while our domestic prices remained unchanged at 241⁄2 cents. A 10 percent insufficiency caused an increase of 50 percent in price. In the other direction, lead-zine was in somewhat excess supply over demand, approximately 10 percent, with the result lead-zinc dropped some 40 percent in price. This thin margin of insufficiency or excess of supply over demand is multiplied in determining price from 4 to 5 times. We can exercise no control over foreign production or prices even though every dime required to produce a commodity is American money. The only control we have is through our own domestic production. Yet we are urged by the Paley report not to be concerned about whether the domestic industry survives or perishes, let it take its chances in competition with some of the world's poorest paid labor and in some inscrutable way, whichever may win (and this is a matter of indifference) it will all work out for the best. EXCERPTS FROM PALEY REPORT-COPPER FROM GRAPHS, P. 58, WITHOUT ALLOWANCE FOR SCRAP; LEAD AND ZINC FROM FIGURES IN VOL. II, INCLUDING SCRAP IN BOTH PRODUCTION AND CONSUMPTION IN UNITED STATES I. United States production, imports, scrap recovery, and consumption, 1950, and estimates for 1975 2 In 1950 imported 250,000 tons zinc from foreign stocks. NOTE. Average change for 3 metals: United States primary production, -8 percent; United States total consumption, +47 percent. II. Free world production, exports to United States, and consumption for 1950 and estimates for 1975 NOTE. Average change for 3 metals: Free world primary production, +97 percent; free world total consumption, +69 percent. The CHAIRMAN. The next witness is Mr. M. E. Graham, on behalf of the American Paper and Pulp Association. Mr. Graham, if you will give your name and the capacity in which you appear, we will be glad to hear from you. STATEMENT OF M. E. GRAHAM, ACCOMPANIED BY ROBERT CANFIELD, COUNSEL, ON BEHALF OF THE AMERICAN PAPER & PULP ASSOCIATION Mr. GRAHAM. Thank you, Mr. Chairman. My name is M. E. Graham. I am secretary of the Hammermill Paper Co., at Erie, Pa. I have with me Mr. Robert Canfield, counsel for the American Paper and Pulp Association. The remarks I have to make today are made on behalf of the American Paper and Pulp Association, which represents somewhat over 80 percent of the paper producers in this country. We believe that the industry is of such importance and international scope and nature that it can speak with some authority in regard to international trade and the tariff situation as well as the situation regarding other restrictions upon international trade. I would like to call the committee's attention to the fact that the paper industry ranks sixth in size in all American industry. Its |