but they do not indicate that there has been an appreciable amount of business to the southwestern millers. But I think that is accounted for due to the fact that the price of the United States flour has been higher for the last 2 years than it has been in Canada, by considerable. Mr. McCORMACK. Have you any figures showing how much of this hard wheat flour was imported from Canada, milled in the United States, and reexported to Cuba?

Mr. THEIS. I shall try to get those figures for you, but I do not have them at the present time, no.

Mr. McCORMACK. In other words, we have been operating under the present law for about 3 years.

Mr. THEIS. That is right.

Mr. McCORMACK. And there must be figures that would enable us to determine whether or not the provisions of that law have been beneficial to the hard-wheat growers of the Southwest.

Mr. THEIS. With your permission, Mr. Chairman, I shall try to get those figures.

The CHAIRMAN. Without objection, it is so ordered (Mr. Theis subsequently submitted the following:)

Hon. ROBERT L. DOUGHTON,

MARCH 16, 1934.

Chairman Ways and Means Committee, House of Representatives. DEAR MR. DOUGHTON: In compliance with your request I am submitting herewith data which will supplement the information which I gave you on March 13. Two charts are enclosed, one showing the imports of wheat flour into Cuba by countries of origin, the other showing wheat flour exported from the United States to Cuba by customs districts.

It is not possible to obtain reliable information concerning the amount of hardwheat flour exported to Cuba in comparison with the soft-wheat flour exports. Referring to the latter table you will note that the largest exports have been through the customs districts of New York and New Orleans. It is very likely that all of the flour exported from New York was made from hard wheat, probably hard spring, either domestically produced or milled in bond from Canadian wheat. Exports through the New Orleans district probably consisted very largely of flour milled from hard red winter wheat. The same is true of the exports through the Galveston district. Exports of flour through the customs districts of Baltimore, Virginia, and Mobile, may have been milled from soft wheat.

It should be pointed out that, during the last few years, exports of flour from Canada to Cuba have been increasing; whereas, exports of flour from the United States have been decreasing. It should be noted also that, while the total exports of flour from the United States have been decreasing, the exports of flour milled in bond from Canadian wheat have been increasing. In 1932, for example, of the 779,000 barrels exported to Cuba from the United States, 576,000 were from Canadian wheat milled in bond. In 1933, of the total of 746,000 barrels, 607,000 were milled in bond from Canadian wheat.

The decline in exports of flour to Cuba milled from wheat produced in the United States and the increase in exports of flour milled in bond from Canadian wheat is evident. This can be accounted for by the fact that the advantage in the Cuban import duty which flour produced from United States wheat enjoys over flour produced from Canadian wheat milled in bond has been more than offset by the lower price of Canadian wheat.

Very truly yours

Wheat flour: Exports to Cuba from United States, by customs districts

1 Includes small amounts of Canadian milled flour reexported from the United States.

2 Not available, books at bindery.

Division of Statistical and Historical Research, Bureau of Agricultural Economics.

Mr. McCORMACK. What is the tariff now in Cuba on imported
flour; do you know?

Mr. THEIS. The Cuban figures are 80.9 cents from this country-
$1.155 is the flour from Canada and 80.9 cents from the United States.
That is the Cuban duty.

Mr. McCORMACK. And there are other differentials, of course,
running in favor of the United States, are there not?

Mr. THEIS. No; this, as I understand it, is a particular preference
to the United States.

The CHAIRMAN. Is that per barrel or per hundred pounds?

Mr. THEIS. It is per barrel.

Mr. McCORMACK. Suppose a trade agreement is made reducing
the American tariff of Cuba, say, to 70 cents; that, of course, would
benefit the producers in the United States to the extent of 10 cents,
would it not?

Mr. THEIS. That is right.

Mr. McCORMACK. Now would the millers in bond in the United
States receive the benefit of that 10-cent reduction also?

Mr. THEIS. They would not, under this present amendment. Mr. McCORMACK. In other words, the purpose of this amendment is, without regard to what tariff concessions might be made with Cuba under the provisions of this act, whereby a reduction of the Cuban tariff with reference to flour might be obtained, that would not obtain against flour exported from the United States and which had been imported from Canada for milling purposes?

Mr. THEIS. You mean, now, only for Cuba?

Mr. McCORMACK. Yes.

Mr. THEIS. Direct to Cuba?

Mr. McCORMACK. Yes.

Mr. THEIS. No; it would not disturb the present relationship. Mr. McCORMACK. In other words, although we might make a tariff rate with Cuba, under a trade agreement, reducing the duty on flour by 10 cents, we have another tariff of 80.9 cents as against flour milled in the United States from other countries and which is reexported to Cuba?

Mr. THEIS. I believe I get your question now and I think my statement was wrong. I think in the case of a new trade agreement reducing the tariff, for instance, 10 cents, that that would also apply to milling in bond.

Mr. McCORMACK. I see. In other words, if you were to reduce the tariff, so far as the United States is concerned, on the Canadian flour of $1.155—isn't it?

Mr. THEIS. That is right.

Mr. McCORMACK. Suppose you reduce that to a dollar and we get 30 percent drawback under our 1902 Tariff Act, have a 30 percent preferential, which would bring it down to 70 cents

Mr. THEIS. That is right.

Mr. McCORMACK. That $1 basic duty in Cuba, as against flour imported, would apply also to our bonded millers as well as domestic producers?

Mr. THEIS. Correct. Any new trade agreement would bring about that same charge; that is right.

The CHAIRMAN. Thank you, Mr. Theis, for your appearance and the testimony you have given the committee.

STATEMENT OF MR. SAYRE-Resumed

Mr. SAYRE. May I add, Mr. Chairman, with respect to the amendment which I have just suggested, that that has the official endorsement of the Department of Agriculture; it is not simply mine. We conferred with the Department of Agriculture on the thing, so that that comes with the recommendation of that department, as well as of the State Department.

The CHAIRMAN. Do you have any knowledge as to whether or not that will make the bill satisfactory to the conflicting interests in this country?

Mr. SAYRE. So far as I can see, it would; but I have not talked with the southwestern millers and I do not know what they may say. But, so far as I can see, they would not be adversely affected by such a proposal.

The CHAIRMAN. Their situation will not be any more unsatisfactory, that is, the difficulty would not be increased, even though that amendment were adopted?

Mr. SAYRE. I do not see that it would; because, so far as Cuba is concerned, the situation remains precisely the same, and that is what they are primarily interested in.

The CHAIRMAN. Congressman Hope appeared before this committee in opposition to that.

Mr. SAYRE. I know he did, and I meant to see him and explain it to him; but he left in such a hurry that I was unable to get hold of him, and I have not had a chance to speak to him.

Now, the time has run on, so that I am not going to weary you any more. I would, however, like to say just one thing. Some have felt that if this new tariff bargaining policy should be adopted, it would interfere in some way with the present Presidential powers to limit or modify tariffs.

This bill does not in these repeal provisions, of course, amend article 337 of the tariff act, which still continues in full force, allowing the President to impose additional duties because of unfair trade practices.

The proposal does not amend article 338 of the tariff act, which would continue in force, of course, allowing the President to impose new duties or restrictions to prevent discrimination.

It leaves untouched section 3 (e) of the National Industrial Recovery Act, which allows the President to impose duties in order to prevent undue interference with the operation of the N.R.A. program. It leaves untouched the Anti-Dumping Act of 1921, which I have not taken the time to speak of, which levies additional duties to prevent the dumping of goods by foreign nations.

It leaves untouched section 303 of the tariff act relating to countervailing duties.

All that machinery is left untouched. These repeals concern, therefore, primarily the contingent duties, which it seems to me are thoroughly bad both in principle and in practice and which lead directly into treaty violations.

And under the amendment proposed with respect to section 336, that section is repealed only insofar as it concerns commodities the importation of which is covered by trade agreements executed under this act.

The only other repeal provision relates to article 311, which we have just discussed.

Now I have sought to show this morning that the world situation is a rapidly changing one; that world trade is diminishing at a pace which presages disaster if something is not done to check it; that European countries are developing machinery for meeting this situation; that it seems to me imperative that this country should adopt some machinery by which it can successfully compete against the trading countries of Europe, in order to retain its present share if not regain a larger proportion of world trade than it is now enjoying. Unless we do some kind of thing like that, unless we adopt some kind of constructive program, we are going to lose the trade which we even now, in shrunken proportion, enjoy; and that would work to the injury of every American producer, of every American manufacturer, all along the line.

Unless we take a broad national viewpoint, the United States is going to lose what little world trade it has left.

That completes my statement, Mr. Chairman.

The CHAIRMAN. We thank you, Doctor, for your appearance here and your very fine statement.

The chair has received a letter dated March 12, 1934, from William Green, president of the American Federation of Labor, which will be inserted in the record at this point.

(The letter referred to is as follows:)

LETTER OF WILLIAM GREEN, PRESIDENT AMERICAN FEDERATION OF LABOR

AMERICAN FEDERATION OF LABOR,
Washington, D.C., March 12, 1934.

Hon. ROBERT L. DOUGHTON,
Chairman Committee on Ways and Means,

House of Representatives, Washington, D.C.

MY DEAR CONGRESSMAN: My attention has been called to certain testimony given by R. L. O'Brien of the United States Tariff Commission at a hearing held by your committee on March 8, in which he referred to Ira M. Ornburn, who served with Mr. O'Brien as a member of the United States Tariff Commission for 1 year or more.

After becoming acquainted with the testimony submitted by Mr. O'Brien, I deemed it my duty, in justice to Mr. Ornburn and to the men and women of labor, to write you submitting the following comments on Mr. O'Brien's testimony with the request that you incorporate this communication in the report of the Ways and Means Committee following the testimony submitted by Mr. O'Brien. The American Federation of Labor recommended Ira M. Ornburn for appointment as a member of the Tariff Commission, and is again urging his appointment in behalf and in the name of the American Federation of Labor.

Mr. O'Brien and Mr. Ornburn voted together and alike upon all tariff matters decided by the Commission. The record shows that decisions made on tariff matters were unanimous decisions. This fact ought to stand as a complete answer to the statement made by Mr. O'Brien that Mr. Ornburn "was the most extreme protectionist who ever sat on the Tariff Commission, so extreme as to make your own Dr. Crowther look like a Free Trader.

How could there be any difference in the tariff views of Mr. Ornburn and Mr. O'Brien when the votes of each were the same in deciding tariff questions and tariff issues considered by the United States Tariff Commission?

Permit me to repeat, in conclusion, that Mr. Ornburn was not the representative of some particular group of labor; he was labor's choice and was recommended by the American Federation of Labor. Ever since his term expired, almost 1 year ago, the American Federation of Labor has urged his reappointment.

Mr. Ornburn is nationally and locally known as a Democrat, identified with the Democratic Party, and as one who holds to the Democratic point of view regarding tariff matters. He is known to be in accord and in sympathy with the tariff policy of the Democratic Party.

I respectfully ask that you have this letter incorporated in the report of the hearings before the Ways and Means Committee in connection with the testimony given by Mr. O'Brien.

Very sincerely yours,

WM. GREEN, President American Federation of Labor.

The CHAIRMAN. The Chair has also received a letter and clipping from Mr. Fred L. Kraemer, of New York, which will be made a part of the record at this point.

(The letter and clipping follow:)