1470 that proceedings under the call be suspended. The PRESIDENT pro tempore. Is there objection? The Chair hears none, and it is so ordered. Mr. McFARLAND. Mr. President, I have previously shown that the report of the Bureau of Reclamation indicates that this project is a rescue project for the State of Arizona, and that if it is not approved and if the bill does not become law, approximately 725,000 acres of land will suffer a water shortage to the extent that there will be disaster in the State I represent here. I have shown that this project, according to the reports and the thorough investigations by the Bureau of Reclamation, is feasible and that it will pay out. Mr. President, I invite attention to the fact that there had been raised by cer- tain witnesses representing interests in California a strained construction of the law which is not borne out by the disin- terested lawyers and witnesses who testi- fied with reference to this project, and who maintained that no justiciable issue existed. Yet on the last day of the hear- ings on Senate bill 1175 there was intro- duced by the Senators from California and Nevada Senate Joint Resolution 145, the only effect of which would be to delay the consideration of the project while some of the interests in California pro- ceeded to try to put the water to use in that State. No resolution of the type referred to was proposed before the pend- ing bill and its predecessors were intro- duced. It was an afterthought, a scheme, or a device to defeat worthy legislation. I have tried to point out to the Senate the reason why no justiciable issue exists at this time. The Supreme Court has held that in order to have a justiciable issue over which that Court will take jurisdiction there must be a threat that an imminent danger exists. Without the authorization of this project, Arizona has no physical means or ability to take water out of the Colorado River which would create any threat. Likewise, un- less and until this project be authorized, there is no project in Arizona that would threaten any water use in another State. Therefore, the only thing that would happen would be that there would be a lawsuit for a few years, and then all of the engineering data would be out of date, and we would have to consider this matter all over again. That is what the people in the State of California would like to have happen. I wish to point out, Mr. President, that the committee, in considering both Sen- ate bill 75 and Senate Joint Resolution 4, authorizing the central Arizona project bill, as amended, has found that no justiciable issue exists which would merit the passage of Senate Joint Resolution 4. On the other hand, the committee has taken the position that this project should be authorized; but, in fairness to the States of California and Nevada, the committee felt that those States should have an opportunity, if they desired, to present their claims to the Supreme Court and that consent should be given to the joinder of the United States as a necessary party to the litigation. CONGRESSIONAL RECORD—SENATE As a tangible expression of its views, the amendment offered by the distin- guished Senator from Wyoming [Mr. O’ManoneEy] and the distinguished Sen- ator from Colorado [Mr. MILLIKIN] was adopted by the committee. This amend- ment provides that if any State or States within 6 months after the effective date of the act shall begin a suit or suits in the Supreme Court of the United States to determine the right to the use of the water for diversion from the main stream of the Colorado River for the central Arizona project, consent is given to the joinder of the United States of America as a party to such action or actions. The amendment further provides that no moneys shall be appropriated or ex- pended for the construction of works authorized by this act which are required solely for the purpose of diverting, trans- porting, and delivering water from the main stream of the Colorado River for beneficial consumptive use in Arizona, during the period of 6 months after the enactment of this act and during the pendency of any suit or suits in which the United States shall be joined as a party under and by virtue of the con- sent granted in this act. Mr. President, this amendment is a compromise offered by these distin- guished Senators. I have felt, and the people of my Siate have felt, that Con- gress having given its interpretation of the compact and the California Self- Limitation Act and the rights of the re- spective States, and particularly inas- much as the net result of the Boulder Canyon Project Act has been to give to the State of California more than the lion’s share of this water, it was the duty of Congress to give to Arizona her just share of the Colorado River watcr without requiring litigation. On the other hand, I recognize that our col- leagues were trying to find a solution to this controversy which has existed throughout all of these years. I am con- vinced, and those associated with me in this struggle for Arizona’s existence are convinced, that right will prevail in the Supreme Court of the United States. So, we were willing to accept these amend- ments. These amendments were submitted to and approved by the Department of Justice as to form and were held suffi- cient to protect the rights of all the in- terested States. So there can be no ques- tion that their rights are thereby fully protected. Another amendment would climinate a dam which was contemplated at Bluff Canyon on the San Juan River in Utah, the principal functions of which were to control silt and to afford river regula- tion and flood control. However, more extensive and much more beneficial works at Glen Canyon in the Colorado River in Utah, would not only fully pro- tect the Bridge Canyon works from silt but would render the facility at Bluff Canyon unnecessary. These dams are both in the upper Colorado River Basin. It was estimated from the hearings and record before the committee that the Glen Canyon works would be authorized and constructed as a part of the upper basin development at an early date, and FEBRUARY 6 for this reason all authorization for de- velopment in the upper basin was elim- inated from this bill. The last amendment was that sug- gested and submitted by the Depart- ment of the Interior for the protection of the rights and properties of the In- dians, which amendment was accepted by the committee. I wish to take this opportunity to express my appreciation to the mem- bers of the Committee on Interior and Insular Affairs, who have so patiently listened to the testimony on this bill. The bill, as reported, protccts the rights of all of the interested States. It gives to Arizona the opportunity which she has long sought—to have this mat- ter finally settled. There have been several cases in which Arizona has at- tempted to go into court to have her rights adjudicated; but at every cross of ithe road she has been fought by Cali- fornia; and the Supreme Court has held that there does not cxist a justiciable issue. Members of Congress have been flooded with propaganda from California in- terests in regard to this project. They have tried to make our cclleagues be- lieve that this act would take water to which California is justly entitled. The amendment proposed by the distin- guished Senator from Wyoming [Mr. O’Manoney] and the distinguished Sen- ator from Colorado [Mr. MILLIKIN] is a full answer to that argument. In mak- ing the argument, an effort has been made to stress the great need for this water in California, Even if there were a necd as claimed, such nced alone would certainly not give California any ritht to water which belongs to and is needed by the State of Arizona. However, in- asmuch as they have flooded Congress with such propaganda, I desire to point out various facts which demonstrate that the need does not in truth exist, and that the claim in this respect 1s not supported by the evidence. To begin with, California herself ad- mits that her present annual use of the Colorado River water is “something like 3,000,000 acre-feet,” well within that of her limitation of 4,400,000 acre-feet. Certain witnesses from that State also admit in their testimony that they de- sire to place into cultivation an addi- tional 300,000 acres of the arcas known as the east and west mesas in the Im- perial Valley, Calif. They do not deny that if this land were not placed into cultivation, California would have all of the water she claims she necds, present and future. I desire to make it clear that California’s asserted need is for the future to permit her to grow and expand; Arizona’s need is immediate, not for growth and expansion, but for the maintenance and support of the property and livelihood which our people now have and are in jeopardy of losing. In connection with the proposed irri- gation of this 300,000 acres in the east and west mesas of the Imperial Valley in California, I would like to call attention to the fact that a land classification de- velopment report and an economic re- payment capacity report have been made by the Bureau of Reclamation on the Jands of the east mesa, which reports
1950 were based upon soil surveys conducted cooperatively by California’s own uni- versity and the United States Depart- ment of Agriculture. These reports clearly show that the lands are not prac- ticable of irrigation and reclamation. The Secretary of the Interior has so af- firmatively declared. In this connection, he stated: In view of land classification and repay- ment feasibility reports, irrigation develop- ment of public lands on the east mesa by either the Government or the district ‘would be inimical to the public interest.” Think of it, Mr. President, that is what the Secretary of the Interior said about those lands to irrigate which certain wit- nesses from California would take water from Arizona. It would not be in the public interest to irrigate them. I now continue the quotation: The east mesa area lies within the Im- perial irrigation district served by the All- American canal in southern California While the lands were originally withdrawn from public entry in the hope that they could be successfully developed, detailed investiga- tions which have since been made revealed them to be not practicable of irrigation and reclamation. The detailed land investiga- tions were made by the Department of Agri- culture, the University of California, and the Bureau of Reclamation. While reports have not been made on the west mesa, it is admittedly no better Jand. I wish further to call attention to the fact that practically all of these lands are owned by the Federal Government. I also ask unanimous consent to place in the Recorp a letter to Mr. Evan T. Hewes from the Secretary of the Interior in regard to this matter. The PRESIDENT pro tempore. Is there objection? There being no objection, the letter was ordered to be printed in the Recorb. as follows: My Dear MR. Hewes: The Commissioner of Reclamation has brought to my attention the correspondence between your district and Regional Director Moritz, concerning as- sumption by the district of the care, operas tion, and maintenance, under the All-Amer- ican canal contract of December 1, 1932, of the common section of the Coachella canal between engineer station 0 and approximate- ly station 2603. Particularly, your letter of December 6, 1948, suggests the necessity for clarification of the position of this Department with re- spect to the desire of your district to install turn-outs in the common section of the Coa- chella canal at such locations, with such capacities, and at such time or times as the district may determine, following transfer of the canal to the district. The district’s expressed desire for a free hand in constructing turn-outs In the com- mon section of the Coachella canal neces~ sarily raises the question of whether the dis- trict may have the consent of the United States, express or implied, to construct turn- outs designed to serve public lands on east mesa In view of the conclusions reached in the land-classification and development re- port of April 1947, and in the repayment- feasibility report issued in March 1948, both of which you have received and which I have approved, it is evident to me that the Irriga- tion development of public lands on east mesa, either by the United States or by Im- perial irrigation district, would be inimical to the public interest, inasmuch as such lands are not “practicable of irrigation and CONGRESSIONAL RECORD—SENATE reclamation.” Accordingly, after full con- sideration, I am compelled to advise you I do not contemplate that any public lands on east mesa will be opened to reclamation, homestead entry, and settlement, and, there- fore, I could not approve the construction of eanal turn-outs designed to serve these lands. In reaching this conclusion, I am not un- mindful of the provisions of article 23 of the contract of December 1, 1932, insofar as they relate to enst mesa lands I have been advised by the Solicitor of this Department concerning the legal issues raised by this article. A copy of the Solicitor’s opinion is enclosed. This decision has been made with reluc- tance, insofar as it may disturb the existing contractual relationship with your district, but I am sure that my responsibility under the reclamation and public-land laws per- mits me no choice in the premises I assure you that I am prepared to consider a pro- posal from your district for a modification and equitahle adjustment of the contract of December 1, 1932, 1n order to bring the con- tract into accord with the facts as we know them today, and to join with the district in submitting to the Congress appropriate rece ommendations to this end. Sincerely yours, J A Kruse, Secretary of the Intertor. Mr McFARLAND. Mr. President. I would particularly call attention to the following portion of Secretary Krug’s letter: In view of the conclusions reached in the land-classification and development report of April 1947, and in the repayment-teasi- bility report issued in March 1948, both of which you have received and which I have approved, it is evident to me that the irri- gation development of public lands on east mesa, either by the United States or by Im- perial irrigation district, would be inimical to the public interest, Inasmuch as such lands are not practicable of irrigation and reclamation. So here, Mr President, we have a sit- uation where the United States Govern- ment owns the land, where it says that the land is not worth irrigating—that is what the Secretary of the Interior said, speaking for the United States Govern- ment—and for this reason refuses to permit its irrigation, and yet these cer- tain witnesses come before Congress and say they need and want water to irrigate this land. Think of it, with the economy of the whole State of Arizona at stake, they would like to take water and irrigate land which has been held by their own uni- versity not to be fit to be irrigated Mr, President, this clearly proves be- yond any question that California does not need this water; and I wish to state further that if she succeeds in preventing Arizona from using water for the central Arizona project, it will either be used in Mexico, in addition to that amount pro- vided for in the treaty, or be allowed to continue to waste into the ocean. I would like further to call attention to the fact that California is now wasting ap- proximately a million acre-feet annually into the Salton Sea that could be put to beneficial use. In conclusion, Mr. President, may I say that we have no objection to Califor- nia’s growing and expanding. The rec- ord, as I have just pointed out, clearly shows that she has ample water to grow and to expand, and I certainly have no 1471 objection to her doing so. On the other hand, Arizona is here fighting for her very existence. We are not asking to grow or expand. All we want the Con- gress of the United States to do is to help us save our present economy. If our economy collapses, as I have previously pointed out, the result will be felt all over the United States. All we ask of Con- gress 1s to give us the legislation which will permit us to use that to which we are rightfully entitled. Enact S. 75 into law, with the proposed amendments, and it will give us that opportunity. Mr. KNOWLAND. Mr. President, will the Senator yield for a question? Mr. McFARLAND. I shall be glad to yield in a moment. Mr. President, at the beginning of my remarks I pointed out that there are now in existence in Arizona evidences of pre- historic development long before the white people came there, evidenced by ruins of canals and buildings. Those ruins show that the people had to abandon the cultivation of the soil in Arizona because of the lack of water. The people who started our modern irri- gation came to Arizona in the 1860's. Construction of the first irrigation canal was begun in 1867, As I previously pointed out, when TI was on the bench in Arizona witnesses came before the court to testify as to the water rights of the State. They de- scribed the development of Arizona. They told of the hardy pioneers who came to the State and dug irrigation ditches. The pioneers of Arizona did not have machinery comparable to our modern machinery. They used horse power and hand power. The witnesses told of the hardships endured by the pioneers. They told of the lands being cleared, not with such machinery as we have today but by hand. With the sweat of their brows they built a great agricul- tural empire. Some of the witnesses who testified at the committee hearings bore names identical with those of witnesses who came before me and testified while I was sitting as a judge in Arizona. Their fathers and grandfathers were the hardy pioneers who developed Arizona in its early days. The witnesses who ap- peared before the Senate committee were the sons and grandsons of those hardy pioneers. The empire built by the pioneers is the empire we are today endeavoring to save. I see my distinguished colleague from Arizona [Mr. HaypeEn] sitting here. Hus father was one of the men who helped Pioneer and develop the State of Ari- zona. We are endeavoring to save the economy which was built in Arizona by Senator Haypen’s father and by the fathers of the people who are now living there. During the last war the Government of the United States needed important fibers as well as foods to help win the war. The Government appealed to the people of Arizona to plant Jong-staple cotton, so necessary to carry on the war. The people of the State of Arizona re- sponded. We are endeavoring to save what we have developed and our economy.
1472 The hardy pioneers of the early days of Arizona builded an agricultural em- pire; made “the desert blossom as the rose,” to use a familiar Biblical expres- sion, They made its soil produce impor- tant food products needed to sustain life and important fibers needed to help win the war. This great agricultural empire must be safeguarded by the passage of the pending bill. The early pioneering in the State of Arizona was not all directed to the field of agriculture. Men went into the hills, developed important mines, and brought forth precious metals, which were lke- wise needed to win the last World War. How would the pending legislation affect them? We have built in Arizona an economy based upon a farm area in the central portion of the State of 725,000 acres. Suppose those farmers should become bankrupt? What would happen to the bonded indebtedness of the State, and the overhead cost of the State govern- ment and the subdivisions thereof, as well as the schools? The cost would all fall upon the mining industry and other in- dustries of Arizona. At this time some of them are having a hard struggle to survive. The central Arizona project, as I said in the beginning of my statement, and as has becn pointed out by the Secretary of the Interior, is a rescue project, and would not put one additional acre of land into cultivation. As has been shown, at least 250,000 persons would have to leave Arizona if the bill were not enacted. ‘hose who would remain 1n that agricultural area would be barely able to eke out an existence. Where are 250,000 persons to be placed? There is not room for them in California. Cali- fornia says there is already unemploy- ment in that State. Is there room for them in Connecticut? Is there room for them in Maryland? They would be dis- placed persons just as truly as are any people in Europe Mr. President, the proposed legislation which 1s before the Senate today deals with a most serious problem. We are considering a bill which would help to save the economy of a State. Distin- guished lawyers and Senators have draft- ed amendments which will afford protec- tion to the various Statcs involved, and yet present a justiciable issue which will make possible tiie decision of the subject in the Supreme Court of the United States. It is true that the population of Ari- zona is small when compared to the pop- ulation of other States It is true that we have always been at a disadvantage when fighting against a powerful State like California. That was particularly true when the Boulder Canyon Project Act was before Congress for considera- tion. All we ask of the Senate is the op- portunity afforded by this bill, which has been found by the committee by a vote of 9 to 3 to be the only way to settle this controversy and the only way to save the economy of a State which represents the symbol of the pioneers of the West. Mr. KNOWLAND. Mr. Fresident, will the Senator yield? CONGRESSIONAL RECORD—SENATE Mr. McFARLAND. question. Mr. KNOWLAND. I thank the Sena- tor from Arizona for yielding at this time. All of us recognize that this is an important piece of legislation. I am a little sorry to hear the Senator find fault with some oI the California witnesses. I assure the Senator that no California wilness who testified has any animosity toward the State of Arizona. The fact is that water is the hfeblood of all West- ern States. We have a very serious problem. I am sure that there is no one in the State of California who does not sympathize with the problems, not only of Arizona, but of all the other Western States. In connection with a great project which calls for the authorization of $750,- 000,000, and which contains provisions which will call for the expenditure of another $500,C00,000, or perhaps a total of $1,250,000,000, it is important that the legislation should be carefully analyzed before it is acted on by the Congress. I am sure the Senator from Arizona would want that to be done. I invite the Senator's attention to page 6, line 3, of the pending bill, which pro- vides, as follows: Before any construction work 1s done or contracted for, the Secretary shall tirst de- termine that costs allocated to power, mu- nicipal water supply, irrigation, or other mis- cellaneous purposes as herein provided will probably be returned to the United States: Provided, That the repayment period for costs so allocated shall be such reasonable period of years, not to exceed the useful life of the project, as muy be determined by the Secretary I should like to ask the Senator this specific question: Insofar as this project is concerned, does that not in fact cir- cumvent the existing reclamation laws, which provide that the irrigation fea- tures of a reclamation shall be repaid in 50 years? Mr. McFARLAND. Mr. President, I believe the reclamation law provides for a 40-year period. There is no question that this bill extends the time for re- payment for this project. But this is not the first time that that has been done. Projects have been approved which ex- tended the period for more than 60 years. This is not a new feature. If we are to have any more projects developed in the West, that will have to be done. Every member of the committee who would like to see further development of 1rr1- gation projects knows that the easy proj- ects have already been built. There 1s no question that this would extend the period of repayment. The report of the Secretary of the Interior shows that the cost can be repaid well within the life of the project. Mr. President, I did not accuse the wit- nesses from California of any animosity toward us, Of course they are fighting for what they think will put a little money in their own pockets. I do not say that they are not sympathetic, but if we are to save 750,000 people in Ari- zona, it will take more than sympathy to doit. It will take water to do it. Mr. KNOWLAND. Mr. President, will the Senator yield further? Mr. McFARLAND, I yield. I yield for a FEBRUARY 6 Mr. KNOWLAND. It is quite possible, as the Senator points out, that many of what he calls the easier projects have been built. As one Senator who has supported the general theory of reclama- tion, both on the floor of the Senate and Jong before coming to the Senate, I would have no great objection to Con- gress extending the period from 50 to 55 or 60 years. I can see some equity in it. A good case might be made for extending it to 65 years. The only point I make is that the Senate is entitled to know that in this situation, instead of maintaining the basic law, so that we may continue to have a yardstick, as we have had in the past, within which all projects must fit themselves, we are breaking up the yardstick and throwing it away. I invite the Senator’s atten- tion to that situation. I should hke to ask the Scnator if that is done in this case, how with equity and fairness we could apply the yardstick in all future cases? I should like to ask this further ques- tion: If we break up the yardstick and throw it away and do not apply it to this project or to future projects, docs the Senator believe that it is equitable to continue to require projects which are now under construction or which have been built to keep within the 50-year limitation? Mr. McFARLAND. In answer to the distinguished Senator’s questions, I should like to say that we are not de- parting from any past procedure. As I pointed out, we have already author- ized projects with longer periods than 60 years. I wish further to point out that these projects should be repaid in as few years as possible. It is best for the economy of the United States. It helps us get money for future develop- ments. We cannot apply a strict yard- stick measurement to these projects. Each one must stand on 1ts own merits, In the past few years we have author- ized projects for longer periods of time. All we ask for is what has been done in the past. We ask for the same consid- eration which has been given to other projects. Mr. KNOWLAND. Mr. President, will the Senator yield for one more qucs- tion? Mr. McFARLAND. Very well. Mr. TYDINGS rose. Mr. KNOWLAND. I know the Sena- tor trom Maryland wants to proceed on another subject. This is the opening de- bate on a three-quarter-billion-dollar project, which may total a billion and a quarter dollars. I believe we are en- titled to have some clarification. I invite the Senator’s attention to the Janguage on page 4 of the bill, as fol- lows: Piovided further, That construction of the tunnel and that portion of the canal herein- above described from the reservoir above the dam at Bridge Canyon to a junction with the aqueduct hereinafter authorized shall be deferred until Congress by making appro- priation expressly therefor has determined that economic conditions justify its con- struction, I have been informed that the esti- mated cost of consuuction of such tun-
1950 nel is $550,000,000. It may be $500,000,- 000 or $550,000,000. Perhaps it would be only §450,000,000 or $500,000,000. Re- gardless of what the amount may be, does the Senator—— Mr. McFARLAND, Let us use the figure $200,000,000. Mr. KNOWLAND. For the sake of argument, let us take $200,000,000. Mr. DOWNEY. Mr. President, will the Senator yield? Mr. McFARLAND. I have already yielded to the Senator’s colleague. I can yield to only one Senator at a time. Mr. KNOWLAND. I should like to complete the question. Whatever the amount may be, it is X dollars greater than the $708,000,000 reported by the committee. It may be anywhere from a minimum of $200,000,000 to $550,000,000. Is it not correct to say that under the language of this bill, without coming to the Congress for further authorization, the Appropriations Committee, by mak- ing an appropriation perhaps as small as a few hundred thousand dollars, once they said it was specifically to get this work under way, would automatically authorize this large amount, which will run anywhere from $200,000,000 to $500,- 000,000? If that be so, does not that give to the Appropriations Committee power to almost double the amount of the aythorization in the bill? Mr. McFARLAND. In answer to the Senator’s question, let me point out that under existing law if the Burcau of Rec- lamation files a report, it can ask for appropriations for the project without getting a special authorization. That is all that this provision of the bill docs. But the Appropriations Committee must first have the report of the Bureau of Reclamation to the effect that economic conditions justify the building of the tunnel. With regard to the tunnel, I personally feel that it should be built at some time. I do not know when eco- nomic conditions will justify it. The present costs of construction are such that it would not be justified. It may well be that in the future, when employ- ment is needed, the cost will go down so much and there will be such a de- mand for power in the West that every- one will wish to see this tunnel built. When that condition arises, they will have to show that the power which would be saved from not having to pump into the aqueduct would pay for the tunnel, before it can be constructed. It is not a complicated matter; it is no more complicated than approval of a project under basic irrigation at the present time. Mr. KNOWLAND. Mr. President, I should Jike to ask the Senator an addi- tional question. During the course of his remarks, I believe he said that un- less the bill authorizing this work is passed, and unless the work procceds, disaster will come to the State of Arizona, I should like to ask the Senator how soon disaster would come to the State of Arizona, if the bill is not passed and if the work is not authorized. Mr. McFARLAND. Mr. President, that is a very difficult question to answer, because the disaster would grow year by year. We cannot simply say that it CONGRESSIONAL RECORD—SENATE would be in existence one year but not the preceding year or that it is not here to- day, but will be here tomorrow. It would be a gradual development. It might start next year or the following year, and gradually grow worse. But I hope it will be possible for us to secure the enactment of this authorization bill and I hope the litigation can be completed in time to Save the economy of my State. Today in Arizona we are borrowing on our underground water supply. I pointed that out earlier in iny remarks. We might continue to do so for a few years longer; but the time will come when we must take some action as sct forth in the pending bill, or we know, according to the advice of the best engi- neers in the West, that disaster will come. It will not come in any particular year; conditions will simply grow a little worse year after year. Mr. KNOWLAND. Mr. President, I should like to call the Senator’s attention to pages 10 and 11 of the bill, dealing with the matter of the litigation before the Supreme Court. I should hke to ask him a question about the portion of the bill beginning in line 17 on page 10, reading as follows: Provided, Thut no moneys appropriated under the authority of this act shall be ex- pended for the construction of works author- ized by this act which are required solely for the purpose of diverting, transporting, and delivering water from the main stream of the Colorado River for beneficial consumptive use in Arizona, during the period of 6 months after the enactment of this act and during the pendency of any suit or sults in which the United States shall be joined as a party under and by virtue of the consent granted in section 12 of this act, The pendency of a motion for leave to file a bill of complaint shall be considered pendency of a sult or suits for the purposes of this act. Iam not an attorney, but I should like to ask the able Senator about that pro- vision. As I read it, construction of the project could not be commenced during the pendency of the suit. But let us as- sume that the suit went to the Supreme Court and the Supreme Court rendered a decision adverse to Arizona, and then the case was decided; it was no longer pending. Is it the Senator’s interpreta- tion that the Authorization Act would still be valid? Mr. McFARLAND. Mr. President, let me say that it would be ridiculous to assume that if the Supreme Court held that no water was available for this proj- ect, the Congress of the United States would appropriate for it, notwithstand- ing. In fact, I shall state the matter in stronger terms than that. It is an insult to the Congress of the United States for anyone to insist in any way that under such circumstances the Congress would appropriate one dime for the construc- tion of a project for which the Supreme Court had held no water was available. Mr. KNOWLAND. Mr. President, that was not my question. My question was whether the Senator now takes the posi- tion that in the event the Supreme Court decided adversely to Arizona, then in fact there would be no authorization? Mr. McFARLAND. Yes, there would be an authorization, but in effect it would be killed by the Supreme Court’s decision, if it so held. 1473 Mr. KNOWLAND. That is all I wish to ask for the moment, Mr. President. Mr. McFARLAND. Mr. President, I have concluded my remarks at this time. MESSAGE FROM THE HOUSE A message from the House of Repre- sentatives, by Mr. Maurer, one of its reading clerks, announced that the House had passed, without amendment, the bill (S. 1282) to authorize grants under the Federal Airport Act for minor projects at major airports, and for other purposes. The message also announced that the House had agreed to the amendment of the Senate to the bill (H. R. 4106) for the reli*f of certain officers and employ- ces of the Fcreign Service of the United States who, while in the course of their respective duties, suffered losses of per- sonal property by reason of war condi- tions, THE H-BOMB Mr. TYDINGS. Mr. President, the at- tention of all the peoples on earth has been directed recently to a new instru- ment of destruction, popularly called the H-bomb. Its described potentiali- ties are so great that it 1s difficult, even for those who serve on the Joint Com- mittee on Atomic Energy, and for others who have had some contact with the development of the atom bomb and, more latterly, the H-bomb, really to com- prehend what it all means to civilization. Rumor has it that if one of these bombs is perfected, a single one of them dropped on New York City would kill every man, woman, and child in that city. In other words, so we are told by rumor, it would be sufficient in its de- structive power to wipe out everyone liv- ing in an area of 100 square miles—10 miles long and 10 miles wide. We are likewise told that our own country and Russia are launched upon the under- taking of building the new H-bomb. Therefore, all of us must, whether we like it or not, come tace to face with the grim reality that there are in the course of construction weapons so gigantic and so terrible in their destructive possibili- ties that not merely one city but civiliza- tion itself is in jeopardy. When the atom bomb was fashioned, we departed from the orthodox type of warfare—warfare by means of the Army, the Navy, and the Air Force—as we had known it, and we used that bomb as a Mass weapon to bring Japan to its knees. The two bombs which were dropped on Japan, at Hiroshima and Nagasaki, as I have said before, accord- ing to the official statistics, killed 135,000 men, women, and children in the frac- tion of a second. That bomb was very crude. It employed a new principle in warfare, to wit, atomic fission and its use to kill people. Everyone who had been associated with the development of atomic encrgy knew instantly that the first bombs were what might be termed crude. The dis- covery was new. The inventive genius applied to it had no yardsticks, und so the first bombs were fashioned as quickly as possible to do a particular thing which they accomplished. But all of us then knew, as we were told by the scien- tists who appeared before the committee,
1474 that the atomic bomb of the future would be many times ereatcr than the atom bomns of which we had heard. Indeed, I think I may say without violating any secrecy there 1s practically no end to the inventive and scientific genius that can be applicd to building bigeer and bigger and bigger bombs for the destruc- tion of humanity. For 2 long while I have been thinking on this whole question. For a long while I have realized that armies are not the answer to the settlement of international disputcs. They are a necessary transi- tory thing that we and other peoples adopt because there 1s no alternative in the existing state of international affairs except to be strong and to try to be stronger than the other man, no matter what the field of activity into which this may carry us and the world. Now, with the coming of the H-bomb, Mr. President, many people have been seeking to apply the same formula to 1t as was attempted to be applied to the atom bomb, namely, control of atomic- and hydrogen-bomb activities, with proper inspection. It is an appealing idea and for a moment seems to attain the objective we all desire. But I think I can show that even were it possible— and I certainly should not disapprove of all efforts toward that result—in my judgment, it would be an illusory rather than a real attempt to control these weapons. Let us assume that tomorrow morning the United States and Russia agrced firmly that neither country would make or possess the atom bomb or the hydro- gen bomb or have the means with which to make the atom bomb or the hydrogen bomb. Let us assume that there was the proper type of inspection inherent in the agreement which would keep these two nations, and all others, from em- barking upon the making of either of the two bombs. Lect us then suppose that war came, and that the war happened without either nation having the bomb, but that other conventional means of de- struction were employed. No sooner would the war break out than all inter- national mspection would be wiped out in an instant. The moment inspection was wiped out each belligerent nation would immediately have to start building a plant in which to make the atom bomb, or building a plant in which to make the hydrogen bomb, for fear the other bel- ligerent nation was doing it behind its own battle lines. All that would result from atomic or H-bomb control would be a truce between wars, with almost the certainty of the bomb’s being built by either or both belligerents in any future conflict, as soon as the new war started. All that would be gained, therefore, would be a little tame. If it is logical to outlaw the atomic bomb, as I believe it is logical to do, and if it is logical to outlaw the hydrogen bomb, as I believe it is logical to do, it is then just as logical to outlaw the con~ ventional bombing and all forms of war- fare. It is impossible to outlaw any of them without opening ourselves to the risk of reinstituting them all again as soon as a new war breaks out on the face of the earth. Therefore what we need, CONGRESSIONAL RECORD—SENATE if we want the atomic bomb and the hydrogen bomb controlled, and if we want a world in which these two instru- ments cannot be manufactured, is not only an agrecment which encompasses these two great destructive weapons, but we must go further than that and have disarmament all the way down the line to rifles. In my judgment, rifles might conccivably be needed to maintain law and order in any country, or in any group of countrics on the globe. But unless all things above the rifle are out- lawed, we ect back to the hydrogen bomb and the atomic bomb when war comes. I do not think it possible to cscape the conclusion, assuming the efforts to outlaw the hydrogen and atomic bombs, with proper inspection, have been success{[ul, that if war comes, with such an agreement in existence, the Parties to the war will immediately com- mence the construction of the proper plants in which to build the two out- lawed instruments of death, because they are so completely decisive in modern warfare that we could not afford to run the chance of assuming, without inspection—and with a war going on there would be no inspection—that all the parties to the contract were living up to their agreements. A little more than 4 years ago, namely, on January 28, 1946, anticipating the march of atomic energy, the improve- ment, if I may use the word, in the de- structive potentialities of the atomic bomb, I offered a simple resolution in the Senate, which I intend to reoffer today. I read it, as follows: That the President 1s authorized and re- quested 10 invite the governments of all nations to send representatives to a con- jerence, which shall be charged with the €ingle duty— I underscore “single duty’— of centering into an understanding and agreement to achieve world disurmament on land, on sea, and in the air by January 1, 1950, except only for such actual occupy- ing forces, with appropriate weapons, and for such agreed pertod of time, as will be necessary to police the defeated and oc- cupied nations as a result of the recent war--- That is an obvious exception— and except only for such armed forces and for such wenpons as are to be placed exclu- sively under the jurisdiction of the Security Council of the United Nations Organiza- tion— It seems to me, in the present circum- stances, that is an obvious exception— aud except only— And here is the meat of the coconut— and except only for such limited forces and limited small arms as are needed to keep law and order within each country, and directly prohibiting the manufacture, storage, and possession of all other weapons, ammunition, and munitions of war, and providing further for the international inspection force au- thorized and instructed to see that the terms of such world disarmament are rigidly ad- hered to and carried out, and thereafter maintained by all the countries of the earth. Some will say, “That is too large an objective to be accomplished.” Perhaps it will be said, ‘‘You are trying to bring utopia on the face of the earth.” To FEBRUARY 6 that, I say there is just as much of a pos- sibility of securing world disarmament on the terms of the resolution as there is of securing atomic and hydrogen bomb control, and that the former proposition has additional merit because, if atomic and hydrogen-bomb control were ob- tained, it would only be efficacious in the interim period between wars, and as soon as war came, if it lasted long enough, both bombs would likely be built and used, and we would be back where we were when we Started. Mr. President, it is my belief that the peoples of the whole world want peace. They want an end to devastating wars, and they will want it more and more as the full import of the hydrogen bomb and its successor bomb is made public. There is not a member of the Atomic Energy Committee or of the Armed Scrv- ices Committee, or a man holding high office in the Pentagon, who does not know that when the hydrogen bomb is built we can build still another super- hydrogen bomb which we may call the P-bomb, the T-bomb, the X-bomb, or the Z-bomb. There is no limit, except the hmitations of mechanical know-how and scientific application, to the size of the bombs which can be built to destroy menkind. If we are entering an era in which a single bomb can be built which will kill 10,000,000 people in the fraction of a second, it but proves my pont, for only a couple of years ago we were talk- ing about a bomb which could kill 100,- 000, 200,000, or 300,000 persons. No sooner will the hydrogen bomb be built than the great nations which are able to do so will start in on a bigger bomb which wul devastate a larger territory and kill a greater number of persons. The peoples of the earth do not want to live under the perpetual cloud and weight of this horrible fear which is so real, so close, and so avoidable. It secms to me that our great leader, the President of the United States, has, at this moment, an opportunity to try to bring the question of world peace to the attention of all mankind, Americans, Russians, Chinese, and all others. What great nation on earth will op- pose it? I do not believe the people of Russia would oppose it. I am speaking of the masses of the people of Russia. I do not believe the masses in China would oppose it. I cannot conceive that the masses of the people in any country would oppose it. I offer it because it goes to the whole length of the problem and toward the only solution of the problem that will hold, in my judgment, reasonable hope of success. I cannot go along with the attempts which deal only with atomic-bomb con- trol or hydrogen-bomb control, for it is only a truce between wars. As certain- ly as that the sun rises and sets, the hydrogen bomb will be used in any great war, all agreements to the contrary not- withstanding. The minute the first shot is fired, the minute the first enemy town is attacked, the great nations of the earth will immediately start the manu- facture of this weapon for fear that the other side of the controversy, the other nations which are opposing any power- ful nation, will also start to manufacture
1950 the hydrogen bomb behind the cloak of military secrecy, and at some point in the war, as it continues, this new weapon will be dropped upon the cities of enemy countries. We cannot escape the logic of that statement. It is as certain as is tomorrow morning’s sunrise. It is as certain as is anything in human nature. I think we must lay aside the futile attempts to outlaw these new weapons by dealing with them alone. This prob- lem calls for sterner stuff. It calls for imagination on a wider horizon. It calls for thinking it through until we reach the point where the hydrogen bomb and the atomic bomb will really be outlawed. If we follow that logic, we shall be back to the point where we must disarm on land, on sea, and in the air. Understand, Mr. President, I am not advocating disarmament by example. We had some of that in 1922 when the naval-disarmament conference was held in Washington. I am not advocating that this Nation shall disarm while every other nation shall remain armed. I am advocating that all nations enter into an agreement to disarm gradually over a period of years, on a schedule agreed to, under the eyes of each other, with constant world-wide inspection to see that disarmament is progressively carried out. That is the only way we can ever disarm, the only way in which we can successfully outlaw the hydrogen and atomic bombs. Let us assume for the moment that I am wrong about it. Let us assume we can control atomic bombs and hydrogen bombs by international agreement and inspection. Let us assume that war comes, and let us assume, for the mo- ment, at least, that neither the hydrogen bomb nor the atomic bomb is used in that new war. What will happen? We shall have a conventional bombing with TNT. Take an airplane flight over Europe, Mr. President, and look at the cities, the towns, the bridges, the railroads, the fac- tories, the yards, and the graveyards. The only difference between the atomic bomb, the hydrogen bomb, and the con- ventional bomb is that the hydrogen bomb and the atomic bomb do the same thing, only more quickly. That is all. Do we realize that in France alone nearly 300,000 homes were entirely destroyed in the course of the war and that more than 800,000 were partially destroyed? Do we realize that in France, without the atomic bomb or the hydrogen bomb, 6,000 bridges, large and small, were destroyed during the war? Do we realize that 80 percent of the machinery in the great industrial plants of France was either destroyed by bomb- ing or removed by the enemy and melted up for munitions of war? Do we realize that France lost more than half of her merchant marine during the war? Do we realize that several thousand miles of railroad track was destroyed and that hundreds of locomotives and thousands of boxcars and freight cars were de- stroyed? Do we realize that 600,000 Frenchmen lost their lives in World War II either by death on the battlefield or as the result of bombing, together with thousands who were impressed into serv- ice by Germany and never returned” To CONGRESSIONAL RECORD—SENATE kill 600,000 people at once would require four atomic bombs of the Hiroshima and Nagasaki type. Only 135,000 persons were killed in Japan with two bombs, Six hundred thousand were killed in France without such bombs. What kind of a nice agreement and compromise it is in one’s thoughts, heart, and conscience that we are ready to settle for 600,000 lives, provided it extends over a period of 4or 5 years? We donot mind that; we will agree to that—kulling 600,- 000 people in 4 years. But what we do not like is to have killed 150,000 persons in 4 days. We can stand it if it is stretched over a long enough period, but if it is condensed into a short period of time it becomes too horrible. Mr. President, that is silly. It was just as bad to kill those 600,000 Frenchmen in the period I have described, as it was to kill 135,000 Jap- anese by the use of atomic bombs. Mr. President, if there is a desire to outlaw the hydrogen bomb and the atomic bomb, there 1s only one way to do it, namely, by a program of world dis- armament. We cannot temporize with this problem. We cannot divide it up into segments and kcep the world armed to the teeth, with milhons of men march- ing, and if a new war breaks out hope that our agreements will stick. The war will not be 1 hour old before the bel- ligerents on either side of a new serics of hostilities will immediately begin, agree- ment or no agreement, the building of the atomic bomb and the building of the hydrogen bomb. They can do nothing else. No holds are barred in warfare. The only reason why anything we or another nation has is not used in a war is because Its military contribution to vic- tory is doubtful, considered from both sides. But when there is a weapon so terrific as the hydrogen bomb, if a nation has it, we may rest assured it is as ccr- tain to be used as anything in the ken of human experience is ccrtain. If the desire is to do away with the hydrogen bomb and the atomic bomb, we must have a period of world disarma- ment, with inspection before the dis- armament period, inspection during it, and inspection after it. I do not believe anything else will suffice. As I stated a moment ago, I do not know how long it would take Russia or the United States to build a hydrogen bomb, but assuming it would take 2 years, that great bomb would no sooner be built than immediately Russia or ourselves, or both, would start the building of another bomb more powerful than the hydrogen bomb, just as the hydrogen bomb now is superior to the old atomic bomb. Men are taking the universe apart; they are breaking the universe up into elements, they are finding out how they can use those differcnt elements to de- stroy vast numbers of mankind. No one knows what the final answer will be, but if civilization and humanity are to find security on this earth, they cannot find it by partial disarmament, they must find it by complete disarmament, plus inspec- tion before, during, and after disarma- ment, I should like to see our President, diff_il- cult though this matter is, fraught though it is with possibilities of failure, 1475 undertake to invite the nations of the world to sit down for the single purpose of accomplishing world disarmament, not mixed up with tariffs, currencies, immi- gration, or any of the other things which we may settle afterward, but with noth- ing in mind but disarmament, devoting ourselves exclusively to disarmament, with the problems like occupation and the like, which followed the last war, con- sidered in conjunction therewith. Let us suppose such a conference is called. Let the proposals for disarma- ment made by us and the opposition’s proposals be published. Let us assume that we cannot agree. If we cannot asree, we will know why we cannot agree, whether the reason is a genuine or spuri- ous one, whether there is any real desire for peace in the world on the part of cer- tain peoples Then we will know what to do in this country. Mr. President, I do not like being in a twilight zone, playing tick-tack with the hydrogen bomb and the atomic bomb as if the matter were that simple, and as if a solution looking to the control of these two weapons would bring about the result which we desire. It would not, because even though we did control them, no sooner would a new war come than the armament plants would start manu- facturing the weapons all over again. Mr. President, in the proposed confer- ence, with the full floodlight of world publicity upon it, where men would sit down to solve the destiny of the millions of people of this earth, if it were an open conference—and that is what I would advocate—the proposals of every nation would be known, and all mankind would be put on notice whether or not the nations assembled were acting in good faith. Some say the Russians would never azree to the proposals we would outhne. I think that is a defeatist attitude. I do not think we know what the answer wul be until the Russians act upon such an invitation. But I assume that the people of Russia, very much like the people of the United States, are anxious to survive, to stay alive, to try to make ancnd to warfare. I assume they would rather have the resources of Russia not turned into tanks, ships, guns, and bombs but into those things attached to the home which raise the standards of living of the people of Russia. I assume they would welcome the lifting of the great weight of fear which either now hangs or eventually must hang over their heads, as it hangs over the heads of most of the other people of earth. Mr. President, I am not willing to ad- mit that a fair proposition submitted to the Russians touching this matter would receive their complete veto, for I believe that, by and large, it would be difficult for the representatives of any nation to resist the appeal of the President of the United States, or to turn down a proposal for real disarmament, with real inspec- tion, if it were made in the open, and made on an honest and fair basis. It would at least arouse a great deal of dis- cussion in every country on earth. If we go into such a conference with clean hands, with an honest proposition, we have some hope of its acceptance.
1476 But suppose the conference should fail. We would not be any worse off than we are now. We would not have Jost anything. On the other hand, we would have made ao great gain, for we would have told the people of our own country and the peoples of the world that we were ready to cal] an end to all the waste of the natural resources and the wealth of the nations and the manpower of the nations entailed in an armaments race, and we would have made our offer in complete good faith, even though it were rejected. If we tell the American people that is our attitude, we will see a new America. We will then know what the issue Is. We will then know what is ahead of us, and we can gear our Government to face conditions. Of course, some will say, “This should be done in the United Nations.” I wish it were done there, but I do not believe the United Nations is the place for doinz it, for the reason that the United Nations has too many other problems, with dis- putes lapping over into too many fields, questions over Palestine, China, Greece, and all the other problems which it con- siders from time to time. What we want 1s a conference devoted to the greatest single problem before all of Christendom, namely, disarmament. It is greater than taxation, it is sreater than any other problem, for until we get an atmosphere in which men can think and act and compose their differences without fear, we are inviting attack by atomic bomb, as a result of some acci- dent, or some incident, or the unfolding of some policy which will eventually bring all of these new weapons into play. Mr. President, I do not make these re- marks today because of fear. I am not speaking because Iam afraid. I am not afraid. There is presented to us a chal- lenge to our generation, and we must meet it. I am making this address be- cause I cannot see any logic in tackling the problem piecemeal, knowing that even if we are successful in solving a part of it piecemeal, 1t wil] not settle anything, as in the case of control of the atomic bomb and the hydrogen bomb. Both of them will be back in the picture, anyway, just as soon as the next war begins. There is no escape from that conclusion. The situation requires bold treatment, We are not faced with a flood or a famine or a typhoon or a tidal wave. We are faced with the extinction of all human beings on the earth as the march of events and of science proceeds on its way down the roadway of the future. If what I say is true—and who is there to doubt it?—shall we be hke dumb driven cattle waiting for the butcher’s knife? Or shall we take firm, aggres- sive action in good faith backed up by the logic of the situation, with an appeal to all mankind to come forward and act in an effort to put an end to what now causes so much fear, a fear which will darken and still further darken the at- mosphere with the passing of the hours, and the passage of the days? If the solution I propose is not the best—and I do not offer it as the panacea for all the ills of mankind—then let some one come forward with a better one, and I shall be glad to join in it. But I think CONGRESSIONAL RECORD—SENATE all the conversation about controlling atomic energy and controlling the hydro- gen bomb is merely so much sawdust. In my opinion there is not on the face of the earth a military man of any stature who will take issue with rae in the state- ment that even though an agreement is reached for control and for inspection, if any war between the great powers begins the hydrogen bomb will be used, and the atomic bomb will be used, anyway. The minute such a war breaks out the great nations of the earth capable of doing so will commence the manufacture of such bombs because they cannot trust each other, and because if they do not have the bombs, they will be at the disad- vantage of quickly losing a war which they otherwise might conduct success- fully for years, if necessary. Mr. President, I am very hopeful that we can rise to meet this emergency. Here is the United States, without question the strongest, the most power- tul nation in Christendom. Here is civil- ization, threatened as 1t never has been threatened before in all its long history. Here are people in our great cities who more and more, and more and more, will feel a fear in their hearts and breasts as they contemplate, as they must sooner or later, the possibilities inherent in hydro- gen-bomb warfare. Have Senators ever considered what would happen if the hy- drogen bomb were used in modern war- fare, and if it should live up to its ad- vance notices? Let us assume for a mo- ment that the frequently published state- ments that it can kill 10,000,000 peonle are true. Very well. Let us assume that another Pearl Harbor incident. occurs. If we had never had a Pear] Harbor that mizht be considered to be a silly assump- tion. But we have already had one. We were all strutting around this Chamber on the 6th of December 1941, more or less confident, in spite of the threats, that Japan would not do anything particular- ly. We wakened on the 7th of December and found that the American Ficet was at the bottom of Pearl Harbor, and we had to start out from scratch, start all over again and build a fleet. Let us profit by that lesson, and as- sume that in this day of speed we may have another similar experience to that of Pearl Harbor. Let us assume that coming from somewhere, from X coun- try, our listening posts to the north re- port that an enemy fleet of 25 or 30 or 50 or 100 planes has been noticed flying toward the United States, apparently headed for the eastern seaboard. Let us assume that word to that effect is quickly flashed to the people of our great cities along the Atlantic seaboard. I do not know what would happen in a city lke New York, which is surrounded by water on three sides, and whose people have to rely on very crowded communication ways to get out of the city, and on lim- {ted transportation facilities to get over the rivers. Certainly 10,000,000 people could not get out of there, in my opinion, in a couple of days, even if complete law and order should prevail. People would have no regard for red lights, for speed limits. ‘The policemen themselves would want to get out of New York. The firemen would want to get out. I imagine a good many fire trucks FEBRUARY 6 would leave the fire stations for the en- virons of New York City without any fire alarm being sounded to call them to any particular destination. That place would be a Shambles. Even after drills had been conducted, even though safety organizations had been set up, even though good order should be maintained, perhaps only a few hundred thousand could be evacuated in the 50 or 60 min- utes which would intervene from the time the planes were first sighted until they were over New York, in the event that they were not shot down en route. What I have stated by way of illustra- tion with respect to one city can be multiplied by the other great cities along the Atlantic seaboard. That is the kind of world we are start- ing to live in, Mr. President. It is not the kind of world I want or that you want, but it is the world of coming reality if we should have another world war. Many of us have seen Hiroshima and Nagasaki, either in the form of pictures or by visiting those cities in Japan. There were exhibited before the Atomic Energy Committee three or four hun- dred slides of views of those cities after the bomb had fallen. Of course, those two cities were not constructed like American cities, of stone and steel or of durable wood. Many of the houses of Japanese construction are relatively flimsy. But when it was all over those two cities were practically level plains all the way across. They were destroyed by the crude first atomic bomb ever fash- ioned by man. We are told that in destructive ability the new bomb may be 1,000 times more powerful than the atomic bombs we knew. Picture one of them over some city in Europe, or over some city in America. Picture 12 of them over 12 cities in Europe or 12 cities in America. Certainly the Russian people have just as much to gain by a plan of complete disarmament, save for such forces as are necessary to keep law and order in each country, under proper inspection, as have the people of any other country on the face of the earth. The Russians have today 200 divisions under arms; probably three or four mil- lion men Under such a pian as I sug- gest those men, or most of them, could return to their homes, help to develop the rivers, help to turn the great timber resources Of Russia into materials for homes and factories, hclp to dam her great rivers for electric power; and all the wealth which Russia is now pouring into her military machine on land, on sea, and in the air, could be used to better the lot of the Russian people. Likewise, in these United States, the same thing would apply. Hcre we are spending for our national defense, in- cluding the intcrest on the national debt, which is largely military, including pro- visions for our vetcrans, which is a mili- tary outlay, and includine the Marshall plan, which is larvcly military, almost the sum of $30,000,000,000. Out of a budget of $42,000,000,000, we are spend- ing practically $30,000,000,000 of the wealth of the American people, of their energies, of their resources, and neces- sarily spending it, in my opinion, by reason of wars, past, present, or future,
1950 in the present international situation. But we ought not merely to sit down and throw away $30,000,000,000 every year and be content to say, “Oh, well, we will do it just so long as the other fellow does.” He is probably saying, too, “Oh, well, we will do it so long as that fellow does.” It seems to me the time has come when both countries have everything to gain and nothing to lose by attempting to take this great burden of expense, this great weight of fear, this tremendous realistic hallucination, from the vision of men, women, and children, and put it forever away. If we do not do it, and we have another war, Mr. President, after that war is over I care not who has the preponderance of hydrogen bombs or who has the preponderance of atomic bombs; in my opinion that war, with the modern instruments which are now made or are in the making, will be so devastating that all we shall have fought for will be lost anyway. So terrific, both on the battlefield and upon our economy, will be the impact of another great world war fought with modern weapons, that those who survive—and they may not be too numerous—will ask themselves, “What did we fight for, anyway?”’ We should stop and think what one bomb would do to this great Capital in which we live. A freighter might come into one of our great harbors with an atomic bomb in its hold. The freighter could be loaded with lumber. It could be loaded with furs. It could be loaded with fertilizer. To all appcarances it would be legitimately approaching one of our great harbors. It could have one or two hydrogen bombs equipped with time fuzes fastened in its interior, well out of sight and unknown to us. The freighter might anchor out in the harbor. The crew would go ashore and go out into the country for a day or two. Then the bomb would explode. Mr. President, such a plan is perfectly feasible. It is much easier to do that than it would be to make another attack similar to that at Pearl Harbor from the air. Such ships might sail into several of our harbors, each of them loaded with an atomic bomb. Are we to sit by, in the face of what no one on this floor or in the world will deny is a perfectly feasible and possible arrangement, with all that it can mean to civilization, to our country, to our children, to our children’s children, and to the people of the world, and be content to nibble at a part of this problem, knowing that even if we solve only a part of it we shall get back in the end to what we tried to solve, but did not solve at all, because these instru- ments of destruction will be used? If I wanted to make a war, if I thought war was coming, if I thought war was inevitable, and if I were in command of one of the other great nations which was likely to fight the war, and I had the hydrogen bomb, I would be sorely tempted to put one of the bombs in each of four or five ships and send the ships into some great ports of America, all the bombs to be exploded more or less simul- taneously by time fuze, thus destroying the people who live in the ports. I hope that as the years unfold I shall not have made a prophecy. Unless we face up to the possibilit:cs of the situa- CONGRESSIONAL RECORD—SENATE tion, the things which I have described are perfectly likely to happen. It may be that some nations will refuse to come to such a conference. If so, we shall know their attitude. Weshall have the consciousness, at least, of having asked them. If they refuse, we shall know where we stand. It may be that some nations will come to the conference, and, even though the plan be a fair one to them and to ourselves, will refuse to adopt it. Weshall know that. We shall know where we stand. It may be that nations will come to the conference, that some plan will be agreed to, and some kind of a real disarmament program will be started—the kind of disarmament which is worthy of the name, and not a truce kind of disarmament which is good only between wars, when it does not make any difference anyway, but is not good during war, which is the real] pur- pose for which all of the control pro- posals are made. I believe there is more than a faint hope that the great nations of the world will be attracted to the President's in- vitation to world disarmament, and world disarmament alone, at a confer- ence. I believe that other nations will be attracted to it because they, no less than we, must see what the alternative is eventually. I believe that other na- tions will want to devote their energies and resources to the upbuilding of their own countries rather than to squander them on numerous armaments. I be- lieve we can assume that the people of every nation, with very few exceptions as to individuals, long for peace, for re- lief from the tax burden, for relief from fear, and that they long for the oppor- tunity to utilize the sweat of their brows and the toil of their hands for reclama- tion, water power, roads, schools, health, and all the other things which we could have so easily if we did not have to sup- port the weight of this great burden and the fear hanging over us all. Mr. President, when I submitted this resolution 4 years ago some men thought the proposal was not feasible. They said, “If we can just get atomic control that will be wonderful. War is bad enough. But if we can just eliminate the bomb, perhaps we can survive with the other weapons, aside from the bomb.” I believed then, and I believe now, that even if we and the Russians and others had agreed to outlaw the bomb, and the inspections had been perfect and the bomb had been outlawed, if war were to come, both we and the Russians would start immediately to build plants to make the bomb. They could not afford to do otherwise. With that same logic—and I think it is logic—I come to the subject of the hy- drogen bomb. Any agreement simply to outlaw the hydrogen bomb means an agreement to outlaw it in the time be- tween wars, with no real effective hope that it will not be used if war comes. I believe the only way we can have any prospect of preventing world war III, and perhaps stopping the use of these weapons, is to have some measure of real world disarmament, to which all the other countries in the world agree, with edequate inspection before, during, and after. 1477 Therefore, I am submitting another resolution, hoping that it may challenge those who have thought along different lines to feel that there may be some merit in it, and that it may be communi- cated to the peoples of lands who may long for a world where great weapons such as the hydrogen bomb and the atomic bomb will be outlawed under proper inspection. I compliment my colleague the Sena- tor from Connecticut (Mr. McManon] for speaking the other day with the same objective in mind. No one has a com- plete patent on the correct solution of this problem. All proposals are worthy of deepest thought. I know how he feels about the subject. He has been chair~ man of the great Joint Committee on Atomic Energy of which I have the honor to be amember. I know that he is carry- ing in his own mind a great deal of con- fidential and secret information with which it is not pleasant to live, please believe me. If someone has a better plan, let him come forward. But let us have more prognosis and less diagnosis. There is too much of an atmosphere of sitting around and finding fault. This situa- tion calls for strong action, and we can- not take it 250 years from now, either. I have offered my own small contribu- tion, not as a perfect answer to the problem, but as the best one with which I have been able to come forward. I do not say it does not have faults; I can- not guarantee that it will be effective; but I have been unable to find a better solution which appeals to me, in light of the information I have. I am not will- ing, however, to sit around and twiddle my thumbs until the world sets itself on fire and all of us are incinerated. It seems to me we have come to the time when we must take the initiative, must seize the banner of world civilization and go forward with it, must throw off de- featism, must possess the courage of our ancestors to meet adversity, must meet the direct challenge and, facing it boldly, must study it and tear it to pieces until we do find the solution. Mr. President, 4 years ago, on Janu- ary 28, 1946, I concluded my remarks in the Senate with these three paragraphs, which I wish to read again today. The voices of all mankind, if they could be registered, would, I believe, support the proposition of world disarmament. The mil- Hons of brave dead who lie in the scattered graves of World Wars I and II died for this ideal of real peace on earth The mothers and fathers, the widows and orphans of those who are no more want this enduring monu- ment as partial compensation for their great and irretrievable loss. The tens of millions who still carry the yoke of misery, fear, and want imposed by war want this new day of permanent peace to dawn quickly. The continuance of civilization itself is in the balance. That is no overstatement. I also said: The sands in the hour-glass grow less and less and less with each passing second. That is absolutely true, Mr. President. Then I said: Let the United States, the impregnable fortress of freedom, the lover of peace, the hope of oppressed people the world over, take the lead in summoning all the nations
1478 of the earth to a world disarmament con- ference, and bring into reality the fervent hope, the carnest prayers, and the longing of men through all the centuries for the untroubled security of a Just, unbroken, and enduring peace, One final word, Mr. President. If we have such a conference, let us pray to God that it will be successful. If it fails, we shall be no worse off than we are now. I now send the resolution to the desk for appropriate reference. The resolution (S. Res, 227), submitted by Mr. Typrncs, was ordered to lie on the table, as follows: Resolved, That the President !s authorized and requested to invite the governments of all nations to send representatives to a con- ference, which shall be charged with the sin- gle duty of entering into an understanding and agreement to achieve world disarma- ment on land, on sea, and in the air by January 1, 1954, except only for such actual occupying forces, with appropriate weapons, and for such agreed period of time, as will be necessary to police the defeated and occu- pied nations as a result of the recent war, and except only for such armed forces ard for such weapons as are to be placed exclu- sively under the jurisdiction of the Security Council of the United Nations Organization, and except only for such limited forces and limited small arms as are needed to keep law and order within each country, and di- rectly prohibiting the manufacture, storage, and possession of all other weapons, ammu- nition, and munitions of war, and providing further for the international inspection forco authorized and instructed to see that the terms of such world disarmament are rigidly adhered to and carried out, and thereaftcr maintained by all the countries of the earth. Mr. MALONE obtained the floor. Mr. MAGNUSON. Mr. President, will the Senator yield to permit me to ask a question of the Senator from Maryland? The PRESIDING OFFICER (Mr. Haypen in the chair). Does the Senator from Nevada yield to the Senator from Washington? Mr, MALONE. I yield. Mr. TYDiNGS. I am elad to have the Senator ask me a question. Mr. MAGNUSON. I was very much impressed by what the Senator from Maryland had to say today. Like him- self, I do not know whether what he pro- poses is the answer. He gave some figures relative to cost, over and above the cost of these terrible instruments of warfare to which he has referred. I know he will want the Recorp to be clear. In the present budget approximately 71.6 percent is devoted to the stupid busi- ness called war. Mr. TYDINGS. rect. Mr. MAGNUSON. Here in the Senate we have just been talking about a project that would help many people live peace- fully and happily. It is worth pointing out that that entire project could be built for the cost of one task force. Mr. TYDINGS. I agree with the Sen- ator. The figures are very conclusive that, as he has said, about 70 or 75 per- cent of all the money our Government takes from the people, in every concelv- able way, must be used for war, either past, present, or to come; and as a result we have only 25 or 30 percent of our I think that is cor- CONGRESSIONAL RECORD—SENATE budget remaining for all the other activi- ties in which our Government js engaged. Mr. MAGNUSON. I should like to ask the Senator a second question. Of course, we hear a great deal about price supports for farmers in relation to taxes and budgets. The whole price-support program can be operated for the cost of one task force. Mr. TYDINGS. That is correct. Not only that, but unless we solve this prob- lem we shall have a world war III in which these new weapons will be used. Then we shall not be bothered very much about any other matters, because there will be very little left of anything. Mr. MAGNUSON. Exactly. Mr. McMAHON. Mr. President, will the Senator from Nevada yield to me, to permit me to comment cn what has just been said? Mr. MALONE. I yield. Mr. MCMAHON. The other day, when I spoke about this matter on the floor of the Senate, several Senators were kind enough to say to me that they thought it well the discussion had begun. I am sure that many of those who said that did not agree with everything I said, nor did they disagree with everything I said. In the same vein, I should like to say to the Senator from Maryland that Iam very much pleased with the address he has made to the Senate today. I know, from my conversations with him over the past 5 years, of the deep thought he has given to this problem and how strongly he realizes the necessity for some kind of peaceful solution. I also know that the Senate of the United States is a place for the discussion ot this question. I wish to congratulate the Senator from Maryland for living up to that high necessity and for fulfilling the best tradi- tions as a Senator by making his con- tribution to the cause of peace. I should like to make a further com- ment, with the Senator’s permission: The Senator from Washington has talked about cost. Some comment was made the other day about the $50,000,000,000 which the Senator from Connecticut said might well be taken off our military budget 1f we were successful 1n our alms relative to disarmament, and might be devoted to the causes of peace. I should like to point out that the last war is estimated to have cost a trillion dollars. The lives lost in that war are not to be translated into terms of cost, because we cannot do that. But in ma- terial terms alone, the cost of that war would mean a five-room house for every family in the entire world, and enough money left over to build a hospital in every town of over 5,000 people, and to operate the hospital for a period of 10 years. That is what a trillion dollars means in terms of material uses for the good of mankind. So, Mr. President, when we begin to talk about various costs and sums of money, it is well to keep that in mind. Mr. TYDINGS. Mr. President, I thank the Senator from Connecticut. I do not wish to compliment him unduly, and what I shall say is rather limited to the encomiums which I think he is en- FEBRUARY 6 titled to receive. Since he has been chairman of the Joint Committee on Atomic Energy, I know of no more dili- gent chairman of any committce in the Congress, nor do I know of one who has devoted himself more unselfishly and untiringly to this problem, the greatest of all problems before us, than has the distinguished senior Senator from Con- necticut, who has been prompt in his at- tendance at all meetings of the joint committee, has gone over the country examining the atomic plants, has con- ferred with Army officials and with the Atomic Energy Commission over and over again, and has carried a terrific load. I only hope the people of the United States will appreciate his unself- ish devotion to the cause of peace and the protection of his own country, which I know 1s well appreciated by every mem- ber of the Joint Committee on Atomic Energy. Iam sure every member of the joint committee well realizes the great service the Senator from Connecticut has performed in that respect. Mr. TAYLOR. Mr. President, will the Scnator from Nevada yield, to permit me to make a brief statement at this point? Mr. MALONE. I am glad to yield. Mr TAYLOR. My. President, recently I complimented the distinguished senior Senator from Connecticut on the states- manlike address he made. I wish now to compliment the great senior Senator from the State of Maryland. I believe that in these two addresscs I have found more of statesmanship than I have found in all the other talk which has occurred in the Scnate of the United States dur- ing the 5 years that I have been a Mem- ber of the Sonate. Believe me, Mr. President, I am deeply interested in the problem of bringing peace to the world. In October of 1945, shortly after the first atomic bombs had been dropped in Japan, I introduced a joint resolution calling for the creation of a world republic. I have done other things in the interest of world peace. Some persons have thought that my ac- tions in that respect were brash: some persons thought they were stupid or idiotic. However, Mr, President, I knew what I was doing on each occasion; I felt that something should be done. Al- though I realized I was a new Senator and did not have the prestige of long service in the Senate, I was unwilling to wait until such time might come. What I have done in that connection has been done because I felt. more than justified in running whatever risks suck action might involve to my political career or to me personally, even if it resulted in bringing my political career to an end. I felt that the risk involved was more than worth while, for I was acting in the hope of trying to bring to the attention of the people of the country and of the world the terrible problem which con- fronts us, and them, and I was attempt- ing to find some solution for it. So Iam very happy to see these states- men attack this problem in a realistic manner, To be perfectly frank about it, Mr. President, of late i have adopted a rather fatalistic attitude. I knew I had done
1950 everything I possibly could do, and it had come to naught. I really did not see what else could be done about the matter. I am happy to see these able Senators and statesmen rising to the occasion, I merely want to assure them that I shall certainly do everything I can to back them up in the very worthy and realistic approaches they have made to the problem. Mr. TYDINGS. I thank the Senator from Idaho for his generous remarks, Mr. MAGNUSON. Mr. President, will the Senator yield for a question? Mr. MALONE. I am happy to yield. Mr. MAGNUSON. Can the Senator tell us approximately how long he in- tends to speak this afternoon? AN AMERICAN DOMESTIC NATIONAL POLICY Mr, MALONE. I may say in answer to the question of the senior Senator from Washington that I shall speak for perhaps 50 minutes. Mr. President, on January 24 I made @ short address to the Senate, outlining the lack of an international or foreign policy. At that time I said that I planned to take the floor early the fol- lowing week, to speak on the subject of a domestic policy. I have been some- what delayed. At that time I said I would discuss whether we should have @ policy under which the people of the United States would be permitted to have access to their own domestic markcts equal to the access that foreign coun- tries have been given under the 1934 Trade Agreements Act. I referred to the 1934 Trade Agreements Act, as ex- tended, under which foreign nations are now given greater access to the Amcri- can markets than are American manu- facturers and American labor them- selves. I advocated at that time that the flexi- ble-import-fee principle should be sub- stituted for the Trade Agreements Act, and that the United States signature of the proposed International Trade Organ- ization Iegislation should be withheld In a short summary of the address, I called for an American foreign policy, asserting that we had not had a world policy since the end of World War I, but that the administration had made a series of unrelated, random decisions, and had projected financial programs based largely upon European propa- ganda, for the zigzag course and the double dealing which it has continued to follow since the end of the war. COLD WAR AND COMMUNISM I said that the executive department of our Government is charged by the Constitution of the United States with determining foreign policy and that Con- gress can accept or reject any treaty or formal arrangement presented to it; that it was high time the President and the State Department inform the Congress and the people of the Nation whether or not we are still waging a cold war with Russia, and whether or not the spread of communism is dangerous to our ultimate peace and safety. I said further that if the President and the State Department decide that we are CONGRESSIONAL RECORD—SENATE waging such a war, and if they decide that the spread of communism is dan- gerous to our ultimate peace and safety, then we should forthwith stop all assist- ance to the ECA nations which have made the 95 trade treaties with Russia and the iron-curtain countries. The ECA nations are helping Russia to consolidate her gains in eastern Europe and in Asia, and to arm her for world war III against us. If we are not waging such a cold war and if the spread of communism is not dangerous to us, that we should im- mediately restore normal trade relations with Russia, just as the European nations did immediately following World War II. The joint resolution which I intro- duced at that time would prohibit finan- cial aid to any foreign country engaging in trade with Russia, her satellite coun- tries, or any other area dominated or controlled by Russia. In any case we should make a decision and quit fooling the American people, and stop the double dealing which has become the common practice of the State Department since World War IL Mr. President, I am in hearty accord with what the senior Senator from Mary- land has just said, that it is time we took cognizance of these matters. It is time that we recognize now, if only be- latedly, that Mr. May, who was in Canada at that time, was a British citizen, who betrayed atomic secrets to the Russians and who apparently funncled the infor- mation into Russia just as fast as we could discover new processes, It is time, Mr. President, that we realize that such a man as Klaus Fuchs, who was sent over here by England, and whose security Status was apparently cleared by Eng- Jand, was allowed to come and pry into our secrets. The doors were opened to him, as has just been explained, by all our atomic energy experts. Klaus Fuchs, accordirig to the newspapers, was not even checked by the FBI. Mr. President, everyone will remem- ber that a serious question arose as to whether we should at all times take Eng- land into our confidence and give Eng- land our atomic secrets and store atomic bombs in that country. That would have been a dangerous thing to do, with & man whom England had cleared fun- neling the information directly into Russia. This morning’s newspaper carries an article showing what little examination had ever been made of Fuchs. His Ger- man parents say he has always had Com- munist leanings. COMMUNISM AND SOCIALISM Mr. President, we all know there is lit- tle difference between the ultimate objec- tives of socialism and communism. We are supporting Socialist nations in Eu- rope, and we are becoming Socialist our- Belves. The objective of both, socialism and communism, is the perfect state, in which the individual owns nothing. The principal difference between the two lies in the method of attaining the objec- tive. The Communist will shoot a man in order to convert him to his kind of government. The Socialist will spend @ country into socialism. That is what 1479 we are doing, Mr. President. A Commu- nist is merely an impatient Socialist. Having summarized the high lights of my speech of January 24 on foreign pol- icy, I may reiterate that the State De- partment and the executive department have the responsibility of determining foreign policy and of announcing to the Congress and to the American people ob- jectives of that policy. They have never done it. We are simply continuing the policy of floundering, so that with Eng- land, India, Czechoslovakia, and all these other nice comrades of ours, recognizing Communist China, we then float into a policy thoroughly confusing to the Amer- ican people. The American people do not know what the State Department wants to do. Some of us believe a deal was made last fall at a conference in- volving England, Canada, and_ the United States to confuse the issue dur- ing the debate on the extension of the 1934 Trade Agreements Act. This con- ference succeeded in confusing the issue as far as the American people were con- cerned. And the State Department and the Executive have never yet declared openly whether communism is a threat to our ultimate peace and safety, or whether we are still in a cold war. On January 24, I submitted a list of 95 trade treaties made by the ECA nations with certain other countries subsequent to World War II, which treaties are now in full force and effect. The trade treaties enable the ECA countries to ship the Russians everything she needs to wage a third world war and to consolidate Communist gains in eastern Europe and in Communist China. WE SHOULD NOT ARM RUSSIA Many persons believe that these trade treaties are dangerous to our ultimate safety. Russia cannot manufacture and process materials in amounts large enough to keep her people satisfied and consolidate her gains in eastern Europe and Communist China, and those sub- jugated people may become dissatisfied and will start pushing off the yoke of communism. Not helping Russia to con- solidate her gains is the only alterna- tive, Mr. President, which many in- formed persons can see to a shooting war toward which we are moving with frightening rapidity. Mr. President, I said, in a sort of pre- view for today’s address, that the fate of the jobs and the investments of the American people had been placed in the hands of an industrially inexperienced State Department. Through the Trade Agreements Act the Congress of the United States put into the hands of the Secretary of State the fate of practically every workingman’s job and every in- vestment in the United States of Amer- ica. The Congress of the United States must take full responsibility for the re- sults when it yields its constitutional] responsibility to the executive depart- ment of the Government, The list which I referred to earlier is found on page 818 of the CONGRESSIONAL Recorp of January 24, 1950, with three or four treaties printed in some detail, including a treaty between Belgium and Rumania, on page 824 of the Recorp,
1480 This treaty lists many things which we were and will be unable to get in time of war, including tin producis, copper and copper alloys, cobalt, aluminum, rolling -mill cylinders, rolung-mull equip- ment, electrical equipment, machinery and apparatus, Diesel locomotives, elec- trotechinical equipment, particularly in- dustrial electric equipment and appara- tus, telephone equipment, houschold electric cquipment and practically every- thing necessary to go right on and con- solidate gains in those areas to prepare fcr world war III. OUR DOMESTIC POLICY Mr. President, I now intend to discuss our domestic policy. On September 13, 1949, I offered a substitute for the 1934 Trade Acreements Act as extended. I suggested xu flexible umport-fee principle, so we could hold our standard of hving while helping and assisting foreign na- tions to raise their own standards. Since we have extended the 1934 Trade Agreements Act, many industries have been further injured, and merely a start has been made :n the effect this act will have on America. I want the Recorp to show that I have submitted, in the form of a suggestion, to the Republican Party for a declara- tion of policy a plan for the promotion of world trade through the principle of fair and reasonable competition, assur- ing that foreign goods produced by under-paid foreign labor shall not be ad- mutied to this country on terms which re- move the floor under our wages and in- vestments, and reduce the hving stand- ards of the American workingman. the American farmer, and the productivity of American industry. On January 19, in a letter addressed to the Senator from Ohio {Mr. Tart], 1 said: It is my deep conviction that the Repub- lican Party, through the Policy Committee of both your Republican Senate Policy Com- mittee and the Policy Committee appointed by the national chairman trom the National Republican Committee, should come out “flat-footed” on a platform of substituting the flexible import-fee principle for the 1934 Trade Agreements Act, as extended, and for the defeat of the International Trade Organization, as the spearhead plank in our national (domestic) policy. ENDORSEMENTS OF THE FLEXIBLE IMPORT-~FEE PRINCIPLE At that time, Mr. President, I sub- mitted to the Senator from Ohio a reso- Jution adopted by the Nevada State Exe- cutive Committee of the Republican Party, an official resolution adopted on November 15, 1949, offering the flexible import-fee principle as a substitute for the 1934 Trade Agreements Act, as amended, calling for the defeat of the International Trade Organization legis- Jation, and for definite conditions govern- ing further gift-loans to Europe. The resolution is as follows: Whereas the selective free trade policy adopted by the State Department, based upon the Trade Agreements Act, is removing the fioor from under wages and invest- ments-—causing unemployment and loss of taxable property: and Wherens the proposed International Trade Organization, consisting of 58 nations, each with one vote, to which it is suggested that this Nation assign all of its right to adjust CONGRESSIONAL RECORD—SENATE tariffs and import fees for the protection of the working men and investments in the United States of America, would complete the job of wrecking cur economy; and Whereas the policy of making up the trade- balance deficits of the European nations (16 ECA nations) in cash each year without defi- nite conditions for its utilization 1s simply reestablishing the century old feuds and rivalies among such nations: Therefore be it Resolved, That the Republican State Exec- utive Committee of Nevada hereby adopts and recommends to the National Republican Committee for adoption an American domcs- tic and foreign policy: 1 A domestic (national) policy A. The ficxible import fee principle, based upon fair and reasonable competition, ad- ministered by a reorganized experienced tar- iff commission, to be knuwn as the Foreign Trade Authority, in the same manner as the long-established Interstate Commerce Com- mission adjusts freight rates for the curriers on a hasis of the principle laid down by Congress, of a reasonable return on the in- vesiments, to be substituted for the 1934 Trade Agreements Act as extended Under the ficxible import fee principle a mari.et 1s immediately established for the goods of foreign nations on a basis of fair and reasonable competition with our own— they cannot in good conscience ask for more 2. A foreign (international) policy—as a condition of further aid to Europe A Integrity of private investments B A Unitcd States of Europe-— including Germany witbout trade barriers of any kind. C Free convertibility of the European cur- rencies in the terms of ihe dollar D Equal access to the trade of the nations of the world—-subject only to the action of such individual nations; be it further Resolved, That the so-called bipartisan policy, including the support of the admin- istration’s three-part free-trade program has destroyed our traditional floor-under-wages policy and has contributed materially to the defeat of the Republican Party, and That the haphazard lowering of the import fees and tariffs, without regard to the differ- ential of the cost of production due largely to the difference in Hving standaids of this country and the foreign competitive nations, has severely injured the mining, petroleum, agricultural, textiles, pottery, lumber, preci- sion instruments, and many other industries, thereby causing unusual unemployment and loss of taxable property; and That we ure, by our own actions, remov- ing the floor under wages and Investments in this Nation and in effect transferring Amert- can jobs to foreign soil. This is a resolution passed officially by the Nevada State Executive Committee of the Republican Party on November 15, 1949. On December 2, 1949, at the thirtieth annual meeting of the Nevada State Farm Bureau at Ely, Nevada, Resolution No. 17 was passed, dealing with domestic and foreign policy, which resolution reads as follows: Whereas the selective free-trade policy adopted by the State Department, based upon the Trade Agreements Act of 1934, as lowering the American living standards through the lowering of wages and is caus- ing unemployment and a subsequent decline in the demand for agricultural products: Therefore be it Resolved That the Nevada State Farm Bu- reau adopts and recommends that the Amer- ican Farm Bureau Federation support a domestic and foreign policy containing the following features: I. Foraign policy: (a) Protection of private investments in foreign countries. FEBRUARY 6 (b) Free convertibility of European cur- rencies in terms of dollars (c) Consolidation of the European nations into a United States of Europe, and the eras- ing of all present trade barriers (d) Equal access to the trade of all nations of the world subject only to the action of the individual nations. 11, Natlonal policy: (n) Set up a flexible import fee which would be based upon fair and reasonable competition administered by a reo ganized, experiencod tariff commission in the sime manner as the long-established Interstate Commerce Commission adjusts freight rates for the carriers on a basis of the principle laid down by Congress, of a reasonable return on the investment Under a ficxible tmport- fee princinic, a market is immediately es- tablished for the goods of toreign nations on a basis of fuir and reasonable competition with our own—other nations in good con- science cannot ask for more By so doing, America’s domestic agricultural maiket would be greatly stabllized and cease to be a dump- ing giound for world surpluses. We are a land of agricultural abundance siilving to mamtain a standud of Mving unvaralleled by any other nation in the world. Be it further Resolved, That the loweiing of imvort fees and torifts without regard to the differential of the cost of production due largely to the difference in living standards of this Nation and of foreign competitive nations has a demoral.zing effect on oui agricuJtural mar~ kets as well as those of other industries, thereby cnousing unemployment and loss of revenue to the American farmer. Mr President, on January 17, 1950, the Pioche Union, Local No 407, of the CIO, passed a similar resolution, signed by Thomas L Hutchings, president. In that resoluuion this local resolved, as disclosed in their telegram to me: Dear Sin By unanimous vote Pioche Union, Local No 407, CIO, disapprove part 4 plan of the President which includes the Interna- tional Trade Organization agreement and urge that you do everything possible to sub- stitute flexible import tee us outlined in your talk at Ploche, Nev, on December 15, 1949 Yours truly, THomas L HuTcHtnss, President, Local No 407. Mr. President, that union local repre- sents southern Nevada in mining. They belong to the mine, mill, and smelter workers, a well-known union in the United States. Mr. President, on January 18, 1950, the White Pine County Central Labor Council, located at East Ely, Nev., passed a resolution, as disclosed in a telegram addressed to the junior Senator trom Nevada, as follows: We call your attention to the following resolution edopted by the White Pine County Central Labor Council. Whereas the celec- tive free-tiade policy is removing the floor from unde: American wages and investments, causing unemployment and loss of taxable property, and whereas the haphazard lower- ing of the import fees and tariffs without re- gard to the differential of the cost of produc- tion due largely to the difference in living standards of this country and foreign com- petitive nations, has severely injured the nonferrous mining industry. This is another mining industiy in Nevada, Mr. President. Therefore be it resolved, that a telegram be scnt to each of our national Senators ask-
1950 ing them to do what they can toward correct- ing this deplorable situation. Dovc HAwKIN, President, White Pine County Cen- tral Labor Council, On September 16, 1949, Local Lodge No. 705, International Association of Machinists, of Sparks, Nev., sent me a telegram. This International Associa- tion of Machinists represents a section of a great national union. This particular section happens to be located on the Southern Pacific Railroad, at Sparks, Nev. In a letter addressed to the junior Senator from Nevada they state: Sm: The legislative committee of local lodge No, 705, International Association of Machinists, Sparks, Nev., reported favorably on the matter of the ficxible import fee. Whereupon the membership unanimously in- structed the legislative committee to inform you that local lodge No. 705, International Association of Machinists, Sparks, Nev., has gone on record in favor of the flexible import fee. The legislative committee wishes to com- mend the Senator for his hard work and initiative. Yours truly, Satir1os SovuKaRos, Chairman, Legislative Committee, GrorcGe H SHELTON, JouHN L. ROBERTSON, Legislative Committee. Mr. President, on January 12, 1950, the Property Owners’ Associations, Inc., of Clark County, Nev., telcgraphed their junior Senator as follows: Urge you to support a ficxible Import- and export-tarlff bill for protection of our domes- tic industries and curtailment of foreign spending. Mr. President, recently I made an address at Portland, Oreg., before the Multnomah Chapter, which is the larger and controlling section of the Oregon Republican Club, at its annual meeting. Following my address the senior Senator from Oregon [Mr. Corpon] received the following telegram, dated the 31st of January: The executive committee, Multnomah Chapter Oregon Republican Club meeting, after speech by Senator Georce W. MALONE, heartily endorses flexible import-fee principle as a substitute for 1984 Trade Agreements Act as amended and recommends the defeat of the International Trade Organization, Robert H. Grayson, President. AMERICAN JOBS ARE AT STAKE Mr. President, the workingmen of this country are the first to suffer through free trade if this trade is based on unfair, low-cost labor competition. In my humble opinion, no Senator or Repre- sentative can vote for free trade of this kind and conscientiously vote against free immigration, because there is no practical difference between the importa- tion of low-cost laborers and importation of the products of low-cost labor from countries where labor receives anywhere from 40 to 50 cents a day, as do the Jaborers in the Far East and Africa, or when they receive 40 cents up to $2, or $2.50, or a maximum perhaps of $3, as they do in Europe, and perhaps $2.50 or $2.25 in the South American countries. There is no difference between free im- migration and dishonest free trade, par- CONGRESSIONAL RECORD—SENATE ticularly when our machinery and our know-how are freely available to them. I hear it said that we do not fear com- petition because of our great know-how and our inventive genius, especially in the line of machinery. I point out to the Senate that through acts passed by the Congress, we are making available the machinery and the know-how of America to people anywhere in the world, and not only making them avail- able, but paying the freight and the cost. That is also the way the material is being sent, with the help of the 95 trade treaties, to Russia, to the iron-curtain countries, and to China. I want to point out to the President of this body that even if we were not giving it away, this machinery would be available anywhcre on earth, and so would our know-how be freely available anywhere. Mr. President, I have been in the en- gineering business 30 years, the last 15 years mainly devoted to industrial engi- neering. Engineers like me have been coming out of the colleges of this country for 50 years so fast that there are not enough positions for them, so that many of them have even gone into other lines of activity. Therefore there are many men who have the know-how and the necessary information, who are foremen and workmen in industrial plants. Mr. President, I was in South Africa in the latter part of 1948. I talked to Gen- eral Smuts while I was there. I also talked to many of South Africa’s finan- cial leaders. We spoke of manganese and chromite and other minerals which are rather scarce in this country, although they could be produced on the basis of our standard of living, if unfair free trade did not interfere. One can fly in an air- plane over the veins of ore in South Afri- ca and follow the outcropping for several miles. In conversation with General Smuts I said to him, “If I were 20 years younger, and not in the United States Senate, I would come here, get some peo- ple on the telephone in the United States of America who want these minerals, and if you would give me a lease with a term Jong enough so I could get out the money I invested on a reasonable amortization basis, and pay for my machinery, and makc some money on my investments, we could get more minerals out of this sec- tion of South Africa than anyone would know what to do with. Mr. President, what kind of machinery would I install there? I would be able to install the identical kind of machinery in South Africa for mining maganese and chromite ore that I could use in Califor- nia and Nevada where I have-worked with engineers for 30 years. Why are we told that the technical advice, know-how and machinery are not available to other peoples? They are available to every nation in the world that will turn honest and respect the in- tegrity of private investment. The Re- publican Party in Nevada, through its executive committee, and the Farm Bu- reau in Nevada has asked, in official resolutions adopted by them, that we place conditions on further loans abroad, I should call them gifts rather, for that is what the so-called loans to Europe are. 1481 What do we ask for? We ask for ine tegrity of private investments. We ask for a United States of Europe. With more than half the area of the United States, and 16 Nations, Europe has nearly twice the population of the United States. Each one of those nations or states has a complete government, each one with jealously guarded sovereignty. WE PICK UP THE CHECKS Mr. President, I believe I have said before on the Senate floor, and I know I have said so in other places, that I have no objection to those countrics in Europe each having a sovereign govern- ment, so long as they pay for their gove ernment. But when they get on our pay roll—and, Mr. President, they are in our budget now, just the same as is the Department of the Interior—so long as they are on our pay roll, it behooves this body to study and determine just what the money we pay out is used for. I have no objection to the King of England drawing a salary of a million and a half dollars a year. A statement to that effect was contained in a news- paper report published not long ago. There is no use going into what every ruler of every state in Europe draws, but if a ruler draws a million and a half dollars a year, so long as the nation can pay that amount, and we do not have to pick up the check, in other words, make up the deficit each year, I am perfectly willing for them to pay such a sum to their ruler. But when we start picking up the check of a nation which is pay- ing its sovereign one and a half million dollars each year, then I have consider- able curiosity as to just what thcy are doing with our money elsewhere, CONGRESS ABDICATED ITS DUTIES Mr. President, I belicve the Senate of the United States has been very derelict in describing to the country what has happened. The Constitution of the United States of America gives to the Congress of the United States authority over the economy of this country. The Constitution gives Congress the author- ity to fix import fees, tariffs, and excise taxes—that means control over the econ- omy of the country. I point out that for 75 years we have had protection in some form or another. We have had what we call a tariff, a fixed tariff, which did not work quite as well, perhaps, as the flex- ible import fee we are now suggesting. We learn as we go along. But fixed or not, it was at the approximate differcn- tial of cost of production and the living standards between this Nation and the nation or nations in which the competi- tion is located. Traditionally, Mr. President, the Re- publican Party has been for protection of the workingman’s job and his wages, and the investments made by the people of the United States in this country. Traditionally, the Democratic Party has been a free-trade party. It is only nec- essary to look up the record to verify that. In 1914 we had the Underwood tariff bill. Then came the war in Europe, and free trade made no difference, because we could sell everything we wanted to
1482 sell. The same was true in 1939, when the last war in Europe began. We got into the first war in 1917. Many of those who are now Members of the Senate and whom we ordinarily see on the Senate floor, took part in that war. Many Sen- ators also took part in the last war, World War No. 2. From 1917 until the armistice of November 11, 1918, every- thing anyone could produce could be sold abroad. Therefore, a tariff or im- port fee was not necessary. But within 2 or 3 years after the end of the war, I think it was in 1922, it became necessary to call a special session of Congress to reestablish the tariffs and the import fees in order to protect the American jobs and American industry. STATE DEPARTMENT NOT A FIT CUSTODIAN Mr. President, the same battle is com- ing on again. After the depth of the depression, in 1934, in all the exuberance and enthusiasm of a new administra- tion, the Congress passed the 1934 Trade Agreements Act. What was that 1934 Trade Agreements Act? Through that act, which has been extended several times and 1s still in force, having been extended the last time in September 1949, the Congress of the United States abdi- cated—I was going to say “abrogated,” but I will use the expression “abdicated,” for it 1s a better word—its authority over the national economy of this country, its constitutional authority, if you plcase, and gave this authority to an industrially inexperienced State Department, which has no interest in the industry of the United States, as I shall show in a few minutes. The State Depariment has its eyes fixed 3,000 or 10,000 miles away from the American shores, trying to make agreements of various kinds, and entering into treaties which have nothing to do with the economy of this country. Therefore, the State Department is willing to trade the living standards of our country to gain its ends, whatever they are, and which, moreover, it has never made clear. Mr. President, the Constitution of the United States gave into the hands of the executive department the authority to fix foreign policy. Congress by its own action, by the action of the Senate right here, tied together the national] economy and the foreign policy of this country. The Senate abrogated the authority which the Constitution gave it to regu- late the national economy. ‘What is the result? The result is that the State De- partment has tied these two policies to- gether, through the three-part free- trade program of the administration, and tied it tightly, Mr. President. The first two parts are already in operation. I shall describe them in a minute. The ITO, the International Trade Or- ganization, is on the President’s ‘‘must” program. What did the Senate of the United States do right here on this floor? It abrogated its authority over the na- tional economy, and made errand boys of its Members. What can we do here now? All we can do is to accept or reject, or rearrange the myriad of appropriations sent up here for what is called domestic and foreign policy but which is really tied to- CONGRESSIONAL RECORD—SENATE gether. We appropriate $5,500,000,009 each year 1o make up the trade-balance deficits to Europe. The World Bank, the Export-Import Bank, and other trick financial institutions established by Con- gress over a period of 15 to 18 years have arranged things so that many milhon dollars can be sent to foreign countries without the necessity of coming back to Congress except for more appropriations. All we can do is to accept or reject the appropriation bills. We have passed the act. So perhaps instead of $5,500.000,- 000, $6,000,000,000, or $7,000,000,000 is going to foreign countries annually through these various institutions, most of it into the ECA nations. THE THREE-PART SYSTEM The first part of the three-part pro- gram which ties together the national economy and the foreign policy was the Trade Agreements Act, passed in 1934, and extended from that time until now. The original act placed in the hands of the President, so in effect in the hands of the State Department, the right to raise or lower, to the extent of 50 per- cent, the tariffs and import fees which were in effect at that time. In extending the act in 1945 for 3 years Congress in- ercased by another 50 percent the amount by which tariff and import fees could be lowered, making a total of 75 percent of the tarsff and import fees as in force under the Tariff Act of 1950. What docs this mean? That is vir- tually free trade. Whenever we ignore the differentials of cost due to the dif- ference in standards of living there 1s only one possible result. Either the peo- ple of this country will lower their stand- ard of living to meet this situation or they will become unemployed. THE MARSHALL PLAN The second part of the three-part free-trade system is the Marshall plan, or ECA, as it is now called, providing $5,500,000,000 in cash to make up the trade-balance deficits of each of the European nations. Our chief export is cash, industrial machinery, and other things for which we pay cash out of the taxpayer’s pocketbook. Those are the two parts. The Mar- shall plan, or the ECA, provides five and a half to six billion dollars each year to make up the trade-balance deficits until such time as the State Department can, through the 1934 Trade Agreements Act, divide the markcts of this country with the other nations of the world, to the point where our standard of living is re- duced to theirs. At that point, the Mar- shall plan would no longer be necessary. It was thought that the desired result could be accomplished by 1952, It is now found that it is impossible to accom- plish the result by then. A distinguished Senator recently suggested that we ap- propriate $50,000,000,000 more in a lump sum and have it over with for 4 or 5 years. I think that makes just as much sense as what we are now doing. The ECA appropriations were to be con- tinued until 1952. At that time we were supposed to be clear. We would then di- vide our markets with the other nuuions of the world. FEBRUARY 6 CAN WE RAISE LIVING STANDARDS? It is said that we are going to raise the standards of other nations up to ours. Let us see what it sounds like. There are 2,250,000,000 people in the world. We hope we have about 160,000,- 000 of them, as the estimates would seem to show. When we start doing what is proposed, it is just like dividing what wealth we have with the rest of the 2,250,000,000 people in the world. It is just as though I were to use this glass of water in an attempt to raise the level of water in the city reservoir by dumping it into it. I would have no water left in the glass, but the level of water in the reservoir would not be appreciably raised. THE ITO What is the third part? The third part of the free-trade program is the International Trade Organization. It is on the “must” list of the President’s legislaiion for this year. What is it? It is an act, or a treaty, or whavever we wish to call it. Probably it would have been brought before us as a treaty if its proponents thought they could get a two-thirds vote to pass it. They realize a two-thirds vote could not be obtained. So it will be a legislative act, to be passed by a majority. If we pass it, we cannot get out of the ITO for 3 years. Then 6 months’ notice is necessary to leave the organization. By that time we shall be like a man who has gone through a corn sheller or a threshing machine. We shall not be in any shape to get out. What we are doing is making permanent wnat we have attempted to do with the other two acts: leveling our standard of living with that of the rest of the world. What is the International Trade Or- ganization? While Iam about it I shall describe it. The International Trade Organization will be composed of 58 na- tions. That is the number of nations expected to join. There are 52 now who have signed, and one has ratified. In averaging the standard of hving no for- eign nation can do anything but win, and we can do nothing but lose, They will all join the organization. There will be at least 58 nations with 58 votes. There will be 57 foreign votes to our 1 vote. We shail have one vote. Siam will have one vote. Siam is a little na- tion which lives mostly along canals, in rice flelds, and in congested towns. These people live on sampans. I was there in 1948. I went down the canals to see how the people lived. The canal serves as their sewer and the source of their drinking-water supply. They bathe in the canal, wash their clothes in it, and use the water for their cooking. They weigh about 110 pounds each, wringing wet, and have no energy. A regiment of American marines could probably take the whole nation in 24 hours. Certainly they would have no trouble taking it in @ week. But Siam has the same vote as the United States of America in this organization, What would this organization do? It is given certain authority in the Habana charter, which contains 155 or 156 pages written in all kinds of double-tatk, The substance of it is simpiy that to the
1950 organization is assigned the authority to suggest the tariffs and the export fees for its member nations. That is only half of it. It is almost unbelievable. The more legislation I see coming to this floor the more I am convinced that Hitler had something when he said that the more preposterous anything is, the sillier it is, if one will only say it often enough and positively enough, many per- sons will believe it. Mr. President, it has become the habit of the administration to turn out tons of propaganda every day. The newspa- pers print it, because very little has been said about the subject. Wecannot blame the reporters for taking it, because that is about all they eget. This is a great thing we are going to do. We are going to enable everyone to live as people live at the Mayflower, the Willard, or the Shoreham. Within 6, 7, or 8 months everyone will be living alike. That is a great thing. All of us would like to see it. The adminis- tration has formed the habit during the past 18 years of teking anywhere from 3 to 18 months to propagandize its proposals Mr. President, I know what Iam talking about. I have been coming here since 1927, although I have been a Member of the Senate only since 1947. For approximately 25 ycars I have watched this process operate. This propaganda has been going out from 3 to 18 months in advance, to sell the people, who have had very few othcr sources of information, a bill of goods on any particular thing the administra- tion wishes to pass, before it is allowed to come to the Congress Then it 1s brought to the floor of the Senate and House That is what happened with the ITO charter The great International Trade Organ- ization goes one step further than any other legislation I can think of. Con- gress abrogated its authority over tariffs and gave it only to the State Depart- ment. This proposal moves the author- ity from the State Department to 57 foreign nations, each with one vote. That moves the authority a long distance away from home. Why was that done? The reason is very evident. It was done on the theory that if the people are temporarily sold on a proposal of this kind a Senator will not have the guts to stand up and de- bate and vote against it. One cay a couple of newspaper men said to me, “We agree with most of the things you say.” But in a few minutes they asked, “When do you come up for reelection?” I said, “In 1952.” They held out their hands and said, ‘It is nice to have known you.” Mr. President, I suppose I shall run for reelection in 1952, and I suppose I shall want very much to be reelected. But not at the sacrifice of the standard of living of the working men of Amer- ica. I do not want a scat in the Senate that badly. Mr. President, let me give a few cita- tions dealing with the surrender of the tariff-making power to the ITO: CONGRESSIONAL RECORD—SENATE THE AUTHORITY OF THE ITO Each member shall, upon the request of any other member or members— Mr. President, I am reading from ar- ticle 17, entitled “Reduction of Tariffs and Elimination of Preferences” which is to be found on page 46 of the Habana Charter for an International Trade Organization, dated March 24, 1848. Copies of it have been very scarce since that time. Talk about this char- ter has been going on for 3 or 4 years, but only recently has the charter gone to the committee. At least, this is the first time the President of the United States has said the Charter of the In- ternational Trade Organization must be ratified by the Scnate. He must think the country is sold on jit. If necessary, I shall mail him a httle of the written or printed comment about the reaction of the labor organizations to it, or per- haps he will read about these matters in the CONGRESSIONAL Recorp. If so, that will be help/7ul. I read now from article 17, entitled “Reduction of Tariffs and Elimination of Preferences”: 1, EacH member shall, upon the request of any other member or members, and sub- ject to preccdural arrangements established by the organization, enter into and curry out with such other member or members negotiations directed to the substantial re- duction of the general levels of tariffs and other charges on imports and exports It is to be no*ed that the provision is “shall”; the charter does not use the word “may” at that point. That is the first paragraph of article 17. In paragraph 2, a portion of subpara- graph (a) reads as follows: Members shull be free not to grant con- cessions on particular products and, in the granting of a concession, they may reduce the duty, bind it at its then existing level, or undertake not to raise tt above a specified higher level. That is also contrary to some of the other provisions of the proposed treaty; but it provides that foreign nations which, as we know, have been in the habit not only of raising their tariffs but of using quotas, embargoes, specifica- tions, and manipulations of currencies and every other known device and con- trivance to keep our goods from Euro- pean markets, now may resort to the methods specified in the treaty. Ap- parently Mr. Hoffman and Mr. Ache- son think the United States and its peo- ple are sufficiently “sold” on that deal. I shall come to that point in a few min- utes, and shall present newspaper articles with respect to what Mr. Hoff- man and Mr. Acheson have said regard- ing this matter since 1248, when the matter of this gift to foreign nations first came before the Congress, and when they said, in effect, “Just see what it will do for the American businessman. It will establish markets for his goods all over the world.” But, Mr. President, what do they say now? They frankly say that foreign na- tions must stop buying our goods, and that we must buy foreign goods. They 1483 know, at last, what any marketing spe- cialist would know before he graduated from college, namely, that production 1s not the problem, but the market is the problem, whether locomotives, automo- biles, or any other products are involved. So suddenly we find there is overpro- duction in Europe, not only of various commodities such as steel, but of lemons, for .nstance, in Italy; and let me say that lemons are now coming into Cali- fornia, as is well known to the junior Senator from California [Mr KNow- LAND], and they are also coming into the grcat State of Florida. Not long ago I was at Miami, Fla., to address the Na- tional Cattlemen's Association. The cit- rus fruit growers of Florida are crying their eyes out because of the importation of citrus fruits into the United States. There is no tari protection against such importations; there is no tariff to take care of the difference between the cost of production of citrus fruits in the United States and the cost of production of citrus fruits in foreign countries Re- gardless of the differences in labor costs and other costs, foreign citrus fruits are being ymported into the United States without tariff protection of any kind for our citrus industry. I read further from the International Trade Organization’s charter, subpara- graph (b) of paragraph 2 of article 17 reads as follows: (b) No member shall be required to grant unilateral concessions, o1 tu grant conces- sions to other meinbers without receiving adequate concessions in return. Mr. President, let us see who is to be the judge of these matters. What are the adequate concessions we are to re- cclve” Are we receiving any? Not so that you could notice it, Mr. President. And we still are the judges under the 1934 Trade Agreements Act. But the In- ternational Trade Organization as an or- ganization will be the judge in the future of adequate concessions, and we have been bad judges ourselves. I read now subparagraph (d) of para- graph 2 of article 17: (dad) The binding against increase of low dutics or of duty-free treatment shall in ptinciple be recognized as a concession equive alent in value to the substantial reduction of high duties or the elimination of tariff preicrences. That is also contrary to subparagraph (b), which I just read. Not increasing a duty is a concession, according to the ITO. Mr. President, the ITO would outlaw import and excise taxes on petroleum and copper. This is the pararraph of the charter for the International Trade Or- ganization, to be found in article 18, par- agraph 2 thereof: 2. The products of any member country imported into any other member country shall not be subject, directly or indirectly, to internal taxes or other internal charges of any Kind in excess of those applied, directly or indirectly, to like domestic products, Mr. McCARTHY. Mr. President, will the Senator yield? Mr. MALONE. I yield.
1484 Mr. McCARTHY. I should like to say to the Senator that I hope he does not construe the small number of Senators now on the floor of the Senate as an indi- cation of a Jack of interest on the part of other Senators in what the Senator from Nevada 1s discussing. As he knows, this afternoon many of us have jobs which cannot be postponed. I myself would like very much to remain here and hear the Senator from Nevada discuss the subject he 1s presenting, on which I think he is more of an authority than is any other Mcmber of the Senate. I assure the Sen- ator that I shall read his remarks tomor- row in the CoNGRESSIONAL Recoro with a great deal of intercst, and I am sorry to be compelled to leave the floor at this time. Mr. MALONE. I thank the Senator for his remarks. I realize that the Re- publican caucus is in session, drawing up a program. So I understand the ab- sence of Senators. I read further from article 18 of the International Trade Organization’s charter: 5 No member shall establish or maintain any internal quantitative regulation relating to the mixture, processing, or use of prod- ucts in specified amounts or proportions which requires, directly or indirectly, that any specified amount or proportion of any product which is the subject of the regula- tion must be supplied from domestic sources, Mr. President, I now call attention to an article appearing in the Journal of Commerce of January 27,1950. The arti- cle refers to the request of the adminis- tration for an extension of the rubber policy bill for 10 years, I believe. It reads as follows: FEDERAL AGENCIES STUDY TRUMAN RUBBER Po.icy Biiu Wasuincton, January 25.—A final draft bill, covering all the administration's recom- mendations for a new synthetic rubber law, is circulating through Federal agencies preparatory to formal introduction in Con- gress. Introduction will come, it was reported, by the time a seven-man House Armed Serv- ices subcommittee sits down, probably about February 6, to conduct hearings on the Presi- dent's request for authority to continue Gove ernment production of GR-S, the tire syn- thetic, for 10 years and Government controls requiring industry to use the material. EXPLAIN NEW PROPOSALS Four members of the President’s commit- tee which drew up his 1ubber recommenda- tions last night appeared at a special ses- sion of the Washington Rubber Group—an American Chemical Society affiliate composed of Government and industry rubber men to shed further light on the administration's proposals. With some 200 members and guests at- tending, questions from the floor and official responses revealed on both sides an acknowl- edgment that the proposals are at times contradictory. The administration, though not hopeful of quick disposal of a substantial number of the Government-owned plants, dues believe it can sell at least one plant to a ‘nondomi- nant” company or group of companies in the rubber products industry. The President’s recommendations would require that the first disposal of a copolymer plant (GR-S) to a big tire firm be accom- panied by simultaneous sale to a smaller firm or group of small firms to avoid concentrae tion of the industry by iis leaders, CONGRESSIONAL RECORD—SENATE Industry representatives contended that the request for continued usage controls for 10 years would impede development of im- proved tire synthetics by private interests. They said the proposals provide no assurance that a new tire rubber would be granted parity with Government rubber in filling required usage. It is time some of these things were brought out about certain administra- tion proposals. Mr. President, I simply point out that even before we start, the President's recommendation would be nullified by passage of the ITO proposal. I also point to an article published in the Journal of Commerce, January 23, 1950, headed “Habana charter for ITO called aid to cartels.” It is dated Akron, Ohio, January 22. The first paragraph reads as follows: Provisions of the ITO’s Habana charter relating to intergovernmental commodity agreements would encourage the formation of cartels, restrict rather than expand trade, and lessen competitive enterprise, John L Collyer, president of the B. F. Goodrich Co., said here today. I ask unanimous consent to place the remainder of the article in the Recorp at this point in my remarks. There being no objection, the re- mainder of the article was ordered to be printed in the REcorpD, as follows: “The rubber industry has had more op- portunity than any other American indus- try,” Collyer said, “to observe first hand the stultifying effects of commodity agreements formed by groups of foreign governments in the crude rubber tield. Under these cartels, production was restricted, prices raised, and normal expansion of rubber consumption re- tarded. For the United States to ratify the International Trade Organization charter would countenance formation of similar commodity agreements and would not be in the best interests of our competitive economy or of the American people” Collyer did not criticize the stated ob- jectives of the Habana charter, which he said include increased production, consumption, and exchange of goods to contribute to a balanced and expanding world economy, the reduction of tariffs and other trade barriers on a mutually advantageous reciprucal basis, and the elimination of discretionary treat- ment in international commerce. “However,” he said, “the reciprocal trade agreements in effect today were designed to accomplish the objectives of the Habana charter and are currently a part of our foreign policy. Since these agreements have failed to prevent independent contrary ac- tion by other signatory countries, we see no reason to believe that a new charter will be any more effective than present agree- ments “It 18 strongly recommended that every effort be made to insure that existing agree- ments be observed by all participating na- tions before undertaking to design even more comprehensive international agreements,” Collyer said. Mr. MALONE. Now, article 57. I do not want to spend too much time on the ITO, because I really intend to discuss it at some length when it comes to the floor of the Senate, if the Senate is really serious about considering the recom- mendation. Article 57 is headed “Objec- tives of intergovernmental commodity agreements.” From article 57, I read: The members recognize that intergovern= mental commodity agreements are appro=- FEBRUARY 6 priate for the achievement of the following objectives: ° * e eo e (b) To provide, duiing the period which may be necessary, a framework for the con- sideration and development of measures which have as their purpose economic ad- justments designed to promote the expansion of consumption or a shift of resources and manpower out of overexpanded industries into new and productive occupations, includ- ing as far as possible in appropriate cases. All it says there is that this organiza- tion shall have the authority to suggest quotas to the nations cf the world; that is, to the member nations. If we are getting too much rubber, the ITO can assign some of it to the Far East or to Africa or to some other place, wherever convenient, and wherever it would help another nation, regardless of our se- curity. We now know that if we had not "een able to manufacture synthetic rubber during World War II we would have lost the war. At this time, if we should discontinue the manufacture of synthetic rubber, or allow allocations to be made in such manner as is suggested, we could be put right back where we started from when we established a syn- thetic-rubber program to assure our security. Under article 60, section 2, it Is provided: The members, including members not parties to a particular commodity agreement, shall give favorable consideration to any recommendation made under the agreement for expanding consumption of the commodity in question. In other words, Mr. President, although a nation may not be a party to the com- modity agreement, it must give “favor- able consideration” to accepting it anyway. Article 61, paragraph 2: 2 Subject to the provisions of paragraph 5, » commodity control agreement is an in- tergovernmental agreement which involves (a) the regulation of production or the quantitative control of exports or imports of a primary commodity and which has the purpose or might have the effect of reducing, or preventing an increase in, the production of, or trade in, that commodity, or (b) the regulation o1 prices. Mr. President, I think that is enough for the present. It will prove to have been merely a start, if the subject ever comes to the Senate floor. But I have some other matcrial I desire to insert in the Recorp. I merely wanted to show that the International Trade Organiza- tion will represent almost complete for- eign control of the national economy of the United States of America, much greater contro] than we allocated to the State Department, which could only fix tariffs and import fees, which alone is imnortant control over the economy. But, Mr. President, the ITO takes over the allocation. I call attention to the term ‘fixed prices.” 1934 TRADE AGREEMENTS; THE ESCAPE CLAUSE I now call attention to the CoNnGRE3- SIONAL ReEcorpD of June 14, 1948, where, I said, the junior Senator from Colorado (Mr. MILLIKIN] having yielded to me: The escape clause as worded is no answer.
1950 These are the escape clauses included in the 1934 Trade Agreements Act, as extended. I continued: Simply because other countries are al- lowed, under the agrcement as pointed out by the able Senator from Colorado [Mr. MILLIKIN], that all other countries could take a compensatory escape under the multi- lateral agreement if the United Statcs were to invoke the escape clause. I am reading from my statement which I made at that day, appearing at page 8055 of the CoNGRESSIONAL RECORD for June 14, but paraphrasing the junior Senator from Colorado |Mr. MiLirK1n]. Therefore, there 1s no escape without overcoming the condemnation and the greater penalty, and being worse off than we were before the agreement was made. I point out at this time that the 1934 Trade Agreements Act is often referred to as a “Reciprocal Trade Act.” I may Say the phrase “reciprocal trade” does not occur in the 1934 Trade Agreements Act. It is not reciprocal; it was never intended to be reciprocal, and it does not operate in that way. One other thing, at this point, Mr. President. We have never made a trade agreement under the act. They are called trade agreements, but they are not trade agreements, A trade agreement is a contract for the interchange of com- modities. What we agree to is a general agreement to lower tanffs and import fees. The United States trade agrce- ments are tariff-reduction agsreements. And, even as is not often the case, if we had a corresponding reduction in a tariff from the country with which we are negotiating such trade agreement, through the most-favored-nation clause every concession we give that one coun- try 1s automatically extended to every other country in the world. MOST-FAVORED-NATION CLAUSE OPERATES TO OUR DISADVANTAGE Therefore, the 57 countries, or 56 re- mauning countries in the United Nations, let us say, excluding all others, would not give anything, but they would have the advantage of taking advantage of the same reduction accorded by us to the original contracting nation. There have been very many advantages taken of this principle. I shall not go into them, but for instance a trade agreement affecting tungsten 1s made with some country; we agree to lower our tariff on tungsten from 50 cents a pound to 38 cents a pound. We do not get very much tungs- ten from the original country, but we do from Burma, China, and Mexico, which are major producers of tungsten. Those Jatter nations, without giving any con- cessions, get the benefit of our conces- sion and send us all the tungsten we need. The effect of this, as I could go on to show in the case of other com- modities, is to close every mine in the United States of America. The trade agreement concessions to the original contracting country would not have been dangerous, in many cases, The engi- neers in this country took no notice of 4t, knowing that the original country did not produce much tungsten; but they overlocked the multilateral clause that, xXCVI——_94 CONGRESSIONAL RECORD—SENATE the moment the agreement was made, the concession became available to every other country in the world, which meant the major tungsten producers. The ef- fect of it, as I have said, is to close cvery tungsten mine in America. I read further from my remarks in the CONGRESSIONAL REcorD, June 14: Since the compensatory escape by other nations—the cxact nature of which the United States could not foresee—mukes the ndveise repercussions of the escape clause totally disproportionate. In other wo1ds, since we have alieady agreed that if we in- voKke the escape clause that the 22 other nation participants may each separately avall itself of a compensatory escape clause on items of their own choosing. It is clear that the State Department has agreed to some- thing which they would not dare to invoke. The State Department has simply made a bad deal and we are stuck with it Mr. President, we would be stuck for the 3 years unless we resort to quotas and to many other things, just as so many other nations throughout the world do, It would be impossible for a free econ- omy to operate. As we all know, in most of the nations, including England, there is bulk buying and bulk selling, and the cost of production and the price have no relation to each other. As we all know, the colored boys in Africa are still slaves. I took occasion to travel the full length of the Nile to the Sudan, where they are planting peanuts, but not very successfully The fovernor was with me. I went to the lake country, and to Johannesburg, and came back through the Belgian Congo, the Gold Coast, and the Ivory Coast. The wages paid are anywhere from 45 to 75 cents a day, but the wage earners work lke slaves. The highest paid laborer re- ceives not much over one-fifth of what we pay for the same work with the same machincry and the same know-how. The foreign producer takes what the traffic will bear in this country. The American people frequently do not even get the ad- vantage of the low-cost production. Mr. President, I point out that the flexible import fee would take care of that situation. I shall not go into this further, except to say that my suggestion provides for the Tariff Commission to be converted into a foreign-trade authority so that 1t would more nearly represent what it would actually do, namely, exer- cise authority in that ficld, to fix import fees and tariffs up or down, on its own motion, or on the request of Congress, or an industrialist, or a foreign country, on a basis of fair and reasonable com- petition. How is that to be determined? Some persons say that we cannot find out the true costs. It would do very little good if we did find the costs, because, in many cases, they have no relation to the sale price. It can be compared to a railroad commission fixing freight rates. I served on the Railroad Commission of Nevada for 814 years. Perhaps 100 factors—pos- sibly 7 or 8 principal factors—are taken into consideration in fixing freight rates and are given various weights by the commission in accordance with the facts of the case. So, the Tariff Commission would have, among other things, to con- 1485 sider whether there was a fair and reas sonable competitive basis and to see that competition was kept on that fair and reasonable basis in connection with American products. What does that mean? It means that @ textile manufacturer in New England, a miner in Oregon, or a crockery manu- facturer in Ohio would have the same access to American markets as would a competitive country, regardless of wages or anything else. That is covered by the flexible import fee bill which I in- troduced in 1948 and again in 1949, and which I debated al some length, offering it as a substitute for the Trade Agree- ment Act in September of last year. It would take into account, as two of the factors to be considered, the declared customs value of goods imported into this country, and the offered-for-sale price. In connection with the bulk buying and sclling and the subsidizing of indus- try, one country was able to underbid our own manufacturers 1n the production of certain electrical equipment for Seattle, Wash They bid $500,000, and the low- est bid in this country was approxi- mately $750,000. Fneineers are convinced that a great deal of the difference hes in wages and working conditions, but to a large degree the lowness of the bid was due to sub- sidies. Who subsidizes England, Mr. President? I leave that to the imagina- tion of Scnators when we vote on the five and one-half billion dollar proposi- tion within a month or so. Our firms are paying $18 or $20 a day to skilled labor and Enghsh firms are paying approxi- mately $3 or $4. day, food production 1s subsidized there, nnd then we are asked for another appropriation. Uncle Sum picks up the final check. I quote from a statement I made in an address on June 14, 1948: We would not dare, under these agree- ments, to invoke the escape clause, even though it did injure an American industry. The reason I agree with the distinguished Senutor from Colurado—and again I say he deserves the congratulations ol this body be- cnuse he has worked out a formula which will bring the whole question into focus next year, or a year from this time, when the other two important questions come before the Senate for consideration. This was on Junc 14, 1948— Mr. President, the advocates of the Mar- shall plan did not say that the International Trade Organization and the so-called recip- rocal trade arrangement were necessary for the Marshall-Bevin plan’s success, They have since said that reciprocal trade agreements are necessary to the success of the Mar- shall plan. So I say, just as my distinguished colleague from New Jersey |Mr. Siti] said, with whom I agree, that so long as we are consid- ering another appropriation for ERP a year from now, and so long as the International Trade Organization will come before this body officially next year, a 1-year extension of the act is highly proper, so that all three of these subjects mentioned by the Senator from Colorado |Mr, Minum«in| and the Sen- ator from New Jerscy [Mr SmitH] should be considered together. Mr. President, it will be remembered that we did extend the act 1 year, with
1486 the understanding that the three would be considered together. We extended the Trade Agreements Act for 3 years, but no mention was made of the other factors at all. Mr. President, to end the discussion on whether the escape clause of the 1934 Trade Agreements Act could possibly op- erate in a fair manner, I said, on page 8056 of the Recorp: The selective free-trade method of dividing the production of this country with the nations of the world through the Trade Agreements Act, known by the catchword “reciprocal trade,” is the second step in the economic one-world pian. Through the Trade Agreements Act industries selected by the State Department are frankly traded to one or more nations for a fancied advantage in furnishing them a market for their goods to secure money—dollar exchange—presum- ably to buy our processed and manufactured products. Third The International Trade Organiza- tion—ITO—through which 57 nations, each with one vote, will meet each year and frankly allocate the production and markets of the world between such nations, presum- ably finally on population and cost of pro- duction, without regard to the differential of production cost due to the difference in the standards-of-living basis, thereby complet- ing the job of the international redistribu- tion of the wealth of this Nation. This organization is to be the final leveler of the wage living standards of the world. International conferences and world wars are incidents, and even time is unimportant in the plan of the internationally minded “one economic world” group. The one-economic-world group prema- turely launched the one-political-world idea in the 1940 presidential campaign. The em- phasis has now shifted back to economics through the three definite policies; and when the one-economic-world goal is reached, the one political world is expected to follow in the natural course of events. Mr. President, I now wish to refer to a dispatch to the New York Times dated the 2ist of January. I described to a manufacturers’ association what I thought about the three-part, free- trade system, and I ask unanimous con- sent to have printed in the Recorp, the New York Times dispatch. There being no objection, the dispatch was ordered to be printed in the REcorp, as follows: MALONE URGES END OF TRADE PACT ACT—-SENA- TOR CALLS FOR ADOPTION OF IMPORT FEE PLAN INSTEAD IN L..CE ASSOCIATION TALK Pointing out that the lace industry is now facing the same low wage competition from Europe which forced many plants out of business in 1938 to 1940, Senator Gforce W. MALONE, Republican, of Nevada, yesterday called for adoption of the flextble-import-fee principle to replace the Trade Agreements Act. Senator MALONE spoke at the annual meete ing of the American Lace Manufacturers Association in the Commodore Hotel. The principle which he advocates and which has been engendered in a bill before Congress would stipulate that any rise in living stand- ards abroad would be recognized through a corresponding lowering of tariffs. When wage standards abroad approximate ours, he said, the common objective of free trade would be the immediate and automatic re- sult. The Senator said that he has appeared be- fore the national policy committee of the Republican Party and urged that the import fee principle be included in the 1950 and 1952 CONGRESSIONAL RECORD—SENATE platform of the Republican Party. There 1s every evidence, he added, that such ea plan would be approved. In another phase of foreign policy, Senator MALong revealed that he will introduce a resolution on January 80 calling for cessation of assistance of any kind to any foreign na- tion that was trading with or furnishing goods to Communist-controlled areas. Along with the resolution, Senator MALONE said he would submit for the CONGRESSIONAL Recorp, 95 trade treaties that had been made by 16 ECA nations subsequent to World War IZ with Russia and tron-curtain countries. These resulted in shipments of everything from locomotives, freight cars, too] steel, ball bearings, electrical equipment, heavy farm machinery, and road equipment. Harold G. Truman, of the New England Lace Mills, Pawtucket, R. I., was reelected president of the association. Also reelected were George E. Taylor, Washington, R. I, treasurer; Richard Bloch, New York, secre- tary; and Edward F. Walker, Providence, executive director. Gordon Bucknam, of Alton, R. I., was elected vice president, Elected as new directors were Harold G. Bechtel, Bridgeport; Horace Chettle, Wash- ington, R I., and John T. Godfrey, Wash- ington, R. I. In his report to the association, Mr. Tru- man predicted good business for American lace mills in the next 4 or 5 months. “I be- Meve that about August 1, as fall market activities get under way,” he said, “we can look for incrensed business. Present indica- tions are that it is reasonable to expect gar- ments for holiday selling will continue to be embellished profusely with lace.” “Prices of laces should remain firm,” he added, “because of healthy demand and cur- rent stiffening of prices of French laces, which are the chief competition of the Amer- ican product. Because of shortage of nylon fabrics, current demand for nylon lace shows a falling-off at the moment. This situation will be improved by fall,” he predicted. Mr. MALONE. Mr. President, I ask unanimous consent to have appear in the Recorp at this point an article from the Washington Times-Herald of Janu- ary 15, 1950, by Walter Trohan, under the headline “Labor-industry group fights to uphold living standards. Meet- ing here Tuesday to map attack on ad- munistration’s trade program.” There being no objection, the article was ordered to be printed in the Recorp, as follows: Lasor-Inpustry Group Ficuts To UPpHoLp Livinc STANDARDS—MEETING HERE TUESDAY To Map ATTACK ON ADMINISTRATION'S TRADE Program (By Walter Trohan) Labor, agriculture, and industry are unit- ing to defend American economy against the mounting threat of cheap foreign goods under Democratic trade programs. Representatives of more than 16 AFL unions and management representatives of interested industries are meeting here Tues- day to form a permanent organization to defend standards of living of American workers. Farm groups and industry organizations have passed resolutions warning that trade policies are injuring America’s domestic and foreign markets and calling for substitution of fiexible tariffs. Senate spearhead of the crusade is Senator Matong (Republican) of Nevada. BEGUILED INTO SUPPORT “For the first time in 18 years, workers, farmers, and industrialists are joining to fight the consequences of the Democratic admin- istration’s unsound trade and aid programs,” Matonz said. “Labor, agriculture, and in- FEBRUARY 6 dustry are beginning to realize that they were beguiled into support of programs that menace our high wage standards and our markets. “Labor was induced to support the recipro- cal trade program in return for being allowed to write labor legislation. Farm support ‘was enlisted through payment of huge subsi- dies. Industry was influenced by the vast purchases of various aid programs. “Now the chickens are coming home to roost. America faces importing unemploy- ment with all resulting economic chaos. American living standards will be lowered, foreign nations will divide up world markets, and this country will be flooded with prod- ucts of cheap foreign labor !f we do not act at once.” MALONE said danger can be averted by ending reciprocal trade acreements, curbing foreign aid, and by refusal to enter the International Trade Organization, together with the positive action of substituting flex- ible import duties to protect every man's job and every investment dollar. WOULD HAVE ONE VOTE Under the ITO program the United States would have 1 vote among 59 nations. The ITO agreement would commit the United States for 3 years to a program which MALONE declared will bring economic ruin. The plan would place the United States on an equality with Siam in a global political and economic federation, At the end of the year when nations would divide up world markets the United States would have but one vote to protest against decisions which would be injurious to American labor, agri- culture, and industries, “Congress has, over a period of years, dele- gated to bureaus and commissions, over which they have little or no control, the authority to dry up or retard any industry in this country on the theory that the product might be imported at a lower cost from one or more of the low-wage Asiatic and Euro- pean countries,” MALONE said. “Our domestic and world markets are now being lost and dissipated through the sub- stitution of subsidies by Executive order and reciprocal trade treaties in place of utiliza- tion of the 1930 flexible tariff by law; by our sufferance of empire preferential rates es- tablished by empire-minded nations in the areas we are committed to defend; by giving money and goods to low wage living stand- ard competitive trade nations, and a com- plete lack of American constructed interna- tional air and merchant marine bases to pro- mote the balance of trade and promote peace, “URGES CUT IN AID “We must strike at the jugular vein. We must refuse to join ITO; we must stop the reciprocal-trade program and we must slash foreign aid and substitute flexible tariffs. This will kill the threat to American jobs and to American dollars.” Last month the Nevada farm bureau passed a resolution calling for enactment of this program. The Nevada Republican State Executive Committee adopted the program, Various farm, industry, and labor groups joined the drive. Labor took the first step in organizing to protect American jobs. More than 100 repre- sentatives of labor and management will at- tend the Tuesday meeting called by O. R. Strackbein, executive secretary of the AFL Wage Earners Protective Conference. Mr. MALONE. Mr. President, I desire to read now from an article in the New York Times of January 31, 1950. The headline ts: Recovery rests on United States prosper- ity, ERP council report will stress—Annual data to Hoffman to reveal dollar gap will per- sist—Tariff relief asked as way to narrow export-import loss.
1950 Mr. President, I read a portion of this dispatch in the New York Times: The forecasts for Europe’s trade in the next 2 years made in the report that will be given to the Economic Cooperation Ad- ministrator are based upon the assumption that the United States business activity will remain at least as high as in the second and third quarters of 1949. It points out that even small set-backs in the United States economy would have disproportionately large consequences for western Europe, whose re- serves are not great enough to sustain much strain. EUROPE'S TROUBLES NOT SOLVED I do not have the exact statistics here, but I call attention to the fact that our national income dropped about $15,000,- 000,000 in the last half of 1949, and that is causing the various dislocations in Europe which are referred to. People in foreign countrics believe that by next fall, September or October 1950, there will be the greatest economic debacle in Europe up to date. In other words, all the contributions of UNRRA, the special loan of $3,750,000,000 to England, the World Bank loans, the Export-Import Bank loans, together with $5,500,000 a year, $15,000,000,000 to $17,000,000,000 for a 5-year period, through the Mar- shall plan, for the ECA, will have all gone by the board. I am not sure that per- haps the $50,000,000,000 suggestion by the distinguished Senator from Connect- icut might not have some connection with the debacle that is expected in Europe. The people of Europe have discovered that production is not their problem, and it never has been their problem. I have statistics, and I think I shall put the statistics in the REcorp before I con- clude this address, to show that the countries of Europe have more than 100 percent recovered. Some have said there was a recovery of 167 percent in England. The lowest I have noted was 99 percent of the industrial index of 1937-38, before Congress passed the Marshall-plan leg- islation. What are we trying to do? We are try- ing to incecase production so that those living in foreign countries can raise their steudards of hving. What will happen to our sunndards of living when we im- port all the materials and products of foreigners which they are unable to use themselves? That is the basis of the three-part, free-trade system, which will level us with the rest of the coun- tries, I read further from the New York Times article: The report analyzes the measure of re- covery attained and what remains to be done to solve the dollar problem. Here again the report insists that this is not a task for west- ern Europe alone. It contends that the close integration of the European economies will be a source of strength in the long run but that it cannot in itself contribute decisively to the immediate dollar problem, which is described as a joint problem of Europe and the United States. THE MYTHICAL DOLLAR SHORTAGE Mr, President, I should like to say one further thing at this point. There is no dollar trouble in Europe. There is no dollar shortage that has not been ex- perienced by every man in the United CONGRESSIONAL RECORD—SENATE States and every nation in the world— the trouble which results from trying to buy more than productivity will jus- tify. The dollar shortage they are ex- Periencing is from  overpricing the pound, overpricing the franc, overpric- ing the guilder in the Netherlands, over- pricing the currency of practically all the 16 Marshall plan nations, anywhere from 10 to 90 percent. Let me give one illustration, and the same is true of others. The pound was valued at $4.03 before the great devalu- ation debacle, but no few people in for- eign trade were paying more than $2.66 for the pound, to be spent anywhere in the world. In Hong Kong there was a central] exchange, as there was one in Europe. One could take a silver dollar or a paper dollar and go to Hong Kong and buy $6.10 in Hong Kong money, take $15 in Hong Kong money and buy a British pound and spend it anywhere in the world, and it cost $2.66. We have been holding up the artificially high value of a $4.03 pound and even now of @ $2.80 pound with our dollar aid. If, as the executive committee of the Republican Party of Nevada asked in a resolution, if, as the State Farm Bureau of Nevada asked in an official resolution passed by it, if, as the labor organizations in Nevada, including a section of the CIO, asked in a resolution they passed, other nations would let their money go on the market with free convertibility in terms of the dollar, there would be no dollar shortage. But they manipulate the market, and profit at the expense of their neighbors, and ultimately have Uncle Sam pick up the check for the difference, Mr. President, I owned a business for 39 years, and I assert that any business can be successful if someone will pick up the check for the deficit at the end of a month or the end of a year. It 1s not hard to be successful under those cir- cumstances, Mr. President, I would just as soon have a pound in my pocket as the amount of money one can get on the gray money markets of New York, or Chicayo, or San Francisco, but I certainly would not want to be caught with many of them in my pocket at $2.80, because I can get them anywhere in the world for $2.40, and they can be spent almost anywhere in the world. In some markets pounds can be obtained for as low as $2. One may compare the dollar shortage to a person going to a grocery store with a dollar and saying that he wants 40 pounds of sugar. The storekeeper looks at the customer a Httle strangely, and finally he is on the street without the sugar. One dollar will just not buy that much sugar. Soonecan go around com- plaining about the shortage. That illus- trates the kind of a dollar shortage there is. We now hear it said that the dollar shortage is our responsibility and that when other nations overvalue their cur- rencles and talk about a dollar shortage, we must pick up the check, as we did after World War II and World War I. But foreign nations do not have enough patience, as our Nation must have, to 1487 buy what can be produced by a nation’s productive capacity. That is all that can 2 spent month after month, until one winds up talking to his banker, and that is not very pleasant. I have had that happen to me. OUR DEFICIT AND OUR DEBT I understand the administration ad- mits that we are going to have a five- and-a-half-billion-dollar deficit by next year, Last year it was about a billion and a half dollars. I predict it is going to be about eight billion or even more this year. Bonds will be sold for what- ever the deficit amounts to. Then money will be printed. That money will go out throughout the United States. The re- sult will be that the purchasing value of the dollar will be decreased. Eventually there will be another round of strikes for more moncy, because the workers cannot pay their grocery bills with the amount of money they are receiving. So there will be inflation. Finally we will reach the point other nations have reached, when there is no one else to pick up the checks. More bonds will be issued and our debt will be increased. I read further from the New York Times article: The report contends that there is no sin- gle solution to the dollar problem, that a two-way balance of trade will be unnec- essary because of the expected earnings of dollars on invisible account and from the nondollar world Yet the report concludes that western Europe's dollar deficit cannot be eliminated unless this region's exports to the United States amount to 75 percent of its imports from the United States in value. Mr. President, let us see what that means: I prepared a table which is, I believe, now in the ConcRESSIONAL REC- orp, placed there during my September 13 address before the Senate. In that table I showed, in billions of dollars, the exportable surplus produced in this country over a period of about 30 or 35 years. Then I showed what is actually exported. I gave the percentages, and they ran from 6 to 11 percent. Then there was another table placed in the Recorp which showed the billions of dollars we gave the various nations throughout the world as of that year. Then that pmount was subtracted from the exportable surplus, and we arrived at another percentage. Mr. President, that last percentage came right back to the 50-year average of 51% percent, and, I think one year it was 6 percent, out of all those years. In other words, our regular exports, excluding those paid for with our own money, has been a fairly steady percentage of our produc- tion of exportable goods. In other words, we are furnishing six or seven billion dollars through all our financial institutions, including the $5,500,000,000 we toss to European countries every year, in addition to our legitimate trade. The legitimate trade, that amount and kinds of goods provided by imports which they cannot conveniently produce for themselves. No nation and no individ- ual ever buys goods from another nation or another individual which they can conveniently produce for themselves.
1488 If these goods cannot be produced do- mestically then nations buy the goods where they can buy them the cheapest, and of the quality they want. We are finding that out now when other nations are not trading with us. So, in addition to that legitimate trade, the difference must be made up how? By allowing im- ports such as lemons, which we produce in California and in Florida, and shoes from Czechoslovakia and textiles from the ECA nations, and lumber and timber and various other products to take away the jobs of men in Amcrica, and putting our workers on relicf and unemploy- ment insurance. When this body first took the tariff off of copper I said on the Senate floor that if we extended the free trade pro- vision to copper, the international price of copper would drop below the cost of production, and every copper mine in the United States would close. The price Gid drop, and the mines closed. And we are only starting. We find propaganda printed in a paper like the New York Times. It goes all over the country. Western Europe's dollar deficit, $8,500,- 000,000 in 1947, is now estimated to be slightly less than $4,500,000,000, and is ex- pected to be $2,225,000,000 at the end of the Marshall plan. In an introductory chapter, the report is summarized under these headings: PRODUCTION Western European farm production is esti- mated at 95 to 100 percent of the prewar output, The objective was 115 percent, Mr. President. We have the unique experience of see- ing France export wheat when we ship wheat to France, and we try to increase the shipment of wheat to France while France is already exporting wheat. Industrial production 6 months ago was put at 15 percent above the prewar level or above the highest recorded prewar level. There are now no critical bottlenecks, no commodity shortages that can disrupt the industrial effort. Where are we headed, Mr. President? As I said, when they increased their production capacity 15 percent over pre- war level, we suddenly found, that is, the so-called specialists in our State De- partment found, that production was not the problem. It was necessary to sell the production to somebody. The Euro- pean countries cannot sell it to each other for two reasons. One reason is that traditionally the countries of Europe have quotas and barriers against each other. We ¢re simply piling these hun- dred-year-old walls higher and higher by financing each one of the countries. The next reason is that they are try- ing to go faster than they naturally can go in the effort to develop a market in their own country as we do in this. Then they find there is only one place in the world where 10 cents’ worth of chewing gum can be sold and the 10 cents re- ceived for it. That is in the United States of America. Nowhere else can hard money be received for such a product, unless we have previously given the money with which to buy it. CONGRESSIONAL RECORD—SENATE Mr. President, I attended the United Nations conference in San Francisco, not as a representative, but with credentials from the Senate Military Affairs Com- mittce. Ihad been its special consultant throughout the war. At that moment there was only one thing insight. I was interested particularly in South America and in Asia, because I think our trade future is not in old Europe, whose people are mostly processors. Our trade future is in South America and in Asia. I was in San Francisco for 3 months. I had representatives of most of the Asiatic countries and the countries of South America as my guests at breakfast or lunch or dinner. After the perfunctory greetings, the first question asked me was, “How much are we going to sell in America?” On my return east I stopped at Denver, and a reporter there asked me, “What do you think of this great conference in San Francisco?” In a short sentence I told the reporter, “There were 49 nations represented there. Forty-eight of them had market baskets on each arm, and America was the only nation that had anything to put into the baskets.” And without paying for the goods, too. And now the idea is to divide the markets of the United States. GREAT HARM IN THE INTERNATIONAL TRADE ORGANIZATION It has required 3 or 4 years to sell the American people on this great International Trade Organization, and on the idea that we must open our mar- kets, that we must have an international economic trade organization, and trans- fer our markets to it. That is a Tinker- to-Evers-to-Chance play. First, the constitutional authority of this body was transferred to the State Department, by action of Congress. Now we are trans- ferring it to an International Trade Or- ganization, consisting of at least 51 votes against 1 of ours, and probably 67 to 1, with the smallest nation on earth having the same vote we have. We are assign- ing to that organization authority over the economy of the United States. What does it mean? It simply means that that organization can fix our tariffs and import fees, and make it difficult for us if we do not abide by its rulings. We shall be tied to the organization for 3 years. We cannot get out for 3 years. After that time it will require 6 months to get out. That is only half of it. As I said earlier this afternoon, the International Trade Organization can suggest quotas. I have read from the International Trade Organization Charter itself. If we are raising too many lemons in California, or producing too great a quantity of minerals in Michigan, or too many shoes or textiles in New England, or too much wheat in the Middle West, such produc- tion can be assigned to some other na- tion. It is a very simple thing. ‘The small nations of Europe represented in the International Trade Organization all know a year or two ahead what the world needs. So they will be assigned quotas. The only way some of them could ever invest in a business would be for the Congress of the United States to give them that business. The chances FEBRUARY 6 are that they have never operated a business of their own, and do not know anything about the consequences of not making both ends meet. As to the dollar shortage, if no solu- tion can be found for the dollar problem, the whole economic structure of western Europe will collapse, says the report. I have already said that this is a January 31, 1950, dispatch to the New York Times. I have already said that in my opinion the greatest economic debacle will take place in western Europe this fall, It will make everything up to now look like chicken feed. As the distin- guished Senator from Connecticut {Mr. McManon] said, we may need $50,000, - 000,000 to save the nations of Europe this time; and I suppose there will be Senators who will advocate that. We have the spectacle of Mr. Church- ill and several Jeading newspapers in England saying that if we keep our hands off for a little while the nations of Europe will get together in the United States of Europe. It is said that they will unite, just as we did in the 6 or 7 years follow- ing the Revolutionary War because there was no one to pick up our check. When we could not make a go of it with States operating separately, with tariff walls between the States, we sat down and looked at our cards and made the union work. We cannot possibly pay the expenses of all the 16 Marshall plan or ECA nations from now on. We shall soon find out that we cannot do it by dividing our markets. Our situation is Just like that of an individual in a community. Of course we are the most prosperous nation in the world. I have heard the slogan, ‘‘We cannot be prosperous in a starving world.” The position of the junior Senator from Nevada is that someone had better remain prosperous in a starving world if we are to continue to help anyone, or to continue to help our- selves, If no solution can be found to the dol- lar problem, the whole economic struc- ture of western Europe will collapse, says the report, I continue to read from the dispatch: The experience of the last 2 years has shown that the solution ts at least as difficult as it was believed in 1947. The report calls for action extending far beyond the fields of the responsibility of the Marshall plan coun- tries. That is where the $50,000,000,000 sug- gestion came from. It was no idle thing. I have watched Congress operate for the past 18 years. We get used to these appropriations. The first time a billion dollars was mentioned it scared the country to death. But after it had been mentioned four or five times the people got used to the sound of it. We men- tioned $17,000,000,000. That is the cest of the Marshall plan for 5 years. New we can talk about $50,000,000,000 and there is very little excitement. Mr. President, at one time I said on the floor of the Senate “The junior Senator from Nevada does not know how much $41,000,000,000 is.” That is the amount we have paid out to foreign countries or have committed to them since World
1950 War I. But I shall estimate it. It is $5,000,000,000 more than the combined assessed valuation of 11 Western States, including the great State of California, so ably represented by my friend the junior Senator from California [Mr. Know.anp!; Oregon and Washington; and the 14 Southern States, including Texas. That is how much it fs. We hear it said that the process has only started. So when $50,000,000,000 is mentioned we are getting used to it. Someone will bring it up again in a few months. When we come back in 1951 we shall have a bill in Congress. It is Just like putting a bridle on a mustang in the corral in Nevada. Perhaps he has never had a hand laid on him. First we get a rope on him and let him drag the rope around. That does not hurt him very niuch. Then we snub him up to a post and rub the bit over his nose a couple of tymes. Then we let him run loose. The next day we do it again, and on the third day we have the bit in his mouth. He does not know the difference. That did not hurt very much. In a couple of days we are riding him. That is how we do it on the Senate floor. Mr. President, we are punch drunk. The people of the United States are punch drunk with pro- posed appropriations of $50,000,000,000 in one chunk. That is about what it is going to take, according to this dispatch. The expericnce of 1949 showed how vul- nerable the western European dollar deficit was to even a small shock from the out- side But on the favorable assumptions about the course of the world economy and of United States business activity, the report contends that the Marshall plan countries can continue their recovery if they receive, in the year 1950-51, 75 percent of the dollar aid that they received in 1919-50 and if they receive in the year 1951-52 50 percent of that amount. Mr. President, where do they think the markets are that will take up what they sell to us? Where do they think we are getting the money to buy their products? We are getting the money now by hold- ing the source of our income intact. What is the source of our income? It is the markets which the United States has built up for hundreds of years. It is just like a man’s own income. He may have an income of $5,000, $2,000, or $10,000. That is his earning power. The Red Cross may assess him $50 or $200 a year. He may growl about it, but he has the money and he pays it. But let him divide his income 57 different ways, and he does not have the money, Neither will we have the money. In- come comes from markets. That is the way we make our money. That is the source of it. Because of these developments and the imports into this country, our income fell off $15,000,000,000 in the last half of last year. That is the income which we used in part to lend to foreign coun- tries. So when we divide it with them, where is the money coming from to con- tinue to buy their exports and to con- tinue the gift loans if we divide the mar- kets? This means that a serious problem will exist after 1952. The report con- tends thet this problem can be “gener- CONGRESSIONAL RECORD—SENATE ally manageable,” if the assumptions made above about the world economy and United States business activity are ful- filled, and if “appropriate policies are vigorously pressed” by the Marshall plan countries and by the United States and other non-European countries. We have the spectacle of our director of the Marshall plan, Mr. Hoffman, who is a very capable man and one of the ablest men in this country in managing a business, such as the Studebaker business, being notably unsuccessful in getting cooperation from the 16 Mar- shall plan countries in forming a United States of Europe, or in a free interchange of their currency and the dollar. Eng- land and France have always stopped at that free interchange, because once that is done every nation in Europe will have to assume 1ts regular place in the firma- ment of nations, and it could no longer take advantage of its neighbors by over- valuing its currency. Sixteen or eighteen nations could trade with each other and build up the strongest cconomy which it 1s possible to build in Europe. Spain should be in it. Germany should be in it. When they build the strongest econ- omy ard reach the standard of lving represented by the hmit of what they can produce, that fs all that can be done, unless we keep them in our budget from now on, just as they have been since World War II. As I said before, they are in our budect, just as much as the De- partment of the Interior. OIL IMPORTS Mr. President, I wish to cover another ‘elcment of this subject. I wish to read a@ paragraph from a letter dated Deccm- ber 19, 1949, addressed to the East Af- rican Government at Nairobi by the British Secretary of State. The third paragraph of this letter is very inter- esting to me, because it indicates that they were going to stop all importation of dollar oil. They were going to import oil only from sterling countries. I now read a part of the letter: 3. United States Government has now been informed of proposals for substituting this surplus production by British compa- nies for dollar oil imported into the sterling arca by United Kingdom companies. Note this, Mr. President: The Americans have, as expected, not gone beyond expressing regret at proposals and steps have now been taken to put scheme into effoct in United Kingdom and to obtain co- operation of Dominion governments. Mr. President, x call especial attention to the statement that— The Americans have, as expected, not gone beyond expressing regret at proposals and steps have now been taken to put scheme into effect in United Kingdom and to obtain cooperation of Dominion governments. Mr. President, it will be remembered that last year the Argentine oil market was taken over by the sterling bloc, through a bilateral trade agreement, not by means of multilateral trade agree- ments, such aS we have made. Inci- dentally, let me say that the ECA na- tions have now made 95 bilateral trade agreements with Russia and with the other iron-curtain countries. That is all 1489 known to us, but we have not made seri- ous objection; and Britain has also tied up Argentina concerning the sale of var- fous kinds of machinery and other goods to Argentina. Of course, only re- cently there was an attempt by a British firm to sell generators and other elec- trical equipment to the city of Seattle. If the British firm had been successful in selling that equipment to Seattle, thereafter the repairs and maintenance of such equipment woud have been done with equipment coming from Britain, not equipment produced by American labor. All these activities simply result in removing American goods from circula- tion. Many persons 1n our country ex- press profound surprise that such treat- ment should be received at the hands of one of our allies. Mr. President, this matter is of such importance that I shall read again the statement to which I have previously re- ferred, as found in a letter by the British Secretary of State: The Americans have, as expected, not gone beyond expressing regret at proposals and steps have now been taken to put scheme into effect 1n United Kingdom and to obtain cooperation of Dominion Governments. That is exactly what appears in the letter of the British Secretary of State; and exactly what is stated there is what occurred in the United States, so far as our Secretary of State was concerned. He expressed regret, but did nothing more. I now ask unanimous consent to have the entire letter dated December 19, 1949, addressed to the East African Gov- ernment at Nairobi, by the British Sec- retary of Svate, printed in full at this point in the Recorp. There being no objection, the letter was ordered to be printed in the Recorp, as follows: DecEMBER 19, 1949. Lerrer ADDRESSED TO THE EAST AFRICAN GOve- ERNMENT AT NAIROBI BY THE BRITISH SECRE- TaRY OF STATE OIL SUPPLIES Following the meeting of ministers in Washington in September, a special group of officials was formed in Washington to con- sider oil problems. In this group United Kingdom representatives explained in detatl how the dollar drain in oil arises and made it plain that in the immediate future United Kingdom would be obliged to adopt a policy of substitution in sterling for dollar oil to reduce the drain. In this it is hoped to se- cure the cooperation of sterling common- wealth countries. 2. Until recently cost of dolar oll which British companies had to buy in order to meet the gap between their supply and de- mand represented a dollar outgoing over and above the dollar expenditure incurred in pro- ducing their own oil. These ‘‘deticit’ pur- chases, apart from specialty oils, have now ended and in the coming year it is expected that British companies’ availablity of fuel oll and possibly of other products will ex- ceed their normal trade requirements. In the immediate future the surpluses are not expected to be substantial except in the case of fuel oil (which does not (repeat not) in- clude gas oj] or diesel oil). 8. United States Government have now been informed of proposals for substituting this surplus production by British companies
1490 for dollar ofl imported into the sterling area by United Kingdom companies. The Ameri- cans have, as expected, not gone beyond ex- pressing regret at proposals and steps have now been taken to put the scheme into effect in the United Kingdom and to obtain cooper- ation of Dominion governments. It is now desired to arrange full substitution of ster- ling fuel oil for dollar of] at present imported 1ito east Africa for inland consumption. It is not (repeat not) intended to substitute sterling ofl for fuel oil imports destined for use in ships’ bunkers. 4. By “substitution” is meant replacement of dollar oil imports by equivalent imports from British controlled sources. It is not in- tended to interfere with United States com- panies’ internal distribution business. For this purpose “dollar oil” means the oil which United States controlled companies obtain from Standard (New Jersey), Standard Vac- uum, Socony, Standard (California), Tex Oil Corp., and Caltex, or any of their associates such as Bahroin Petroleum Co. In this category there is not included oi) which any of these American companies purchase and ship from British controlled companies’ sources, such as the Abadas and Curacao refineries. 5. United States controlled companies would be left to decide whether they would make good the reduction in their imports of dollar off by purchases from nondollar sources. Assurance has been given by Brit- ish companies that they are in principle will- ing to sell their surplus fuel oll to American companies, but these arrangements can be left to commercial negotiations between Brit- ish and American companies. Should an American distributing company decide to curtail its trade, British companies or, in- deed, other American companies should have little difficulty in taking over the additional business. Anything more thar minor cur. tatlment of this kind appears unlikely judg- ing by the attitude of the head offices of United States companies in the general dis- cussions Ministry of Fuel and Power have had with them. 6. British companies are not expected to have any appreciable surpluses in the near future of products other than fuel oil. In the case of fuel oil, there will be more than enough available from British controlled companies’ production in 1950 to take the place of all dollar imports of fuel oil for inland consumption in the Commonwealth. Failure to dispose of this fuel-oil output may well result in a reduction in British companies’ output of other products. On this account and because of the important dollar saving that can be achieved United States controlled companies importing into the United Kingdom have been informed of intention to introduce fuel-oil substitution in respect of all their imports from dollar sources ag from the 1st of January 1950. I hope that the East African Governments will be able to operate fuel-oll substitution from the same date, though some postpone- ment may have to be accepted, e. g., to enable the companies to adjust their shipping pro- ams. 7. United States companies with whom Ministry of Fuel and Power have discussed arrangements for substitution in the United Kingdom may be warning their subsidiaries in East Africa that similar arrangements may be applied to their imports. 8. I must leave it to the Colonial Govern- ments to decide how substitution can best be administered. Should there be difficulty in controlling the source of fuel-ol] imports by a system of cargo licensing, etc., it should be possible to insure sterling origin on im- ports by ad hoc arrangements agreed with the companies on whom will rest the onus of proof. 9. Any fuel-oil imports by United States companies which are already being bought by them from British controlled companies CONGRESSIONAL RECORD—SENATE will, of course, rank as sterling oll, but oil supplied from Bahrein although invoiced in sterling ranks as dollar oll for the purposes of substitution, since Bahrein is fundamente- ally a dollar source. 10. Please inform me as soon as possible of the action being taken. Mr. MALONE. Mr. President, I hold in my hand a dispatch published in the Journal of Commerce of January 20, 1950. The headline reads: “Oil price cut called answer to British curb. Some United States aides prefer private com- petition to official pressure.” I ask unanimous consent to have the entire article printed in the REcorp at this point. There being no objection, the article was ordered to be printed in the REcorp, as follows: Om PRicz— Cur CALLED ANSWER TO BrirTIsH Curs—Some Untrep S1ates AIDES PREFER PRIVATE COMPETITION TO OFFICIAL PRESSURE WASHINGTON, January 19.—Some Govern- ment officials would like to see American oil producers abroad get over their apparent timidity toward a possible “price var’ with the British as a means of forcing some re- laxation of Britain’s current discrimination against dollar oll. These officials believe outright and sub- stantial price reductions by American pro- ducers overseas—or perhaps just the threat of them—would make the British much more willing to offer concessions. NOT YET OFFICIAL POLICY This attitude does not yet represent an official United States policy and reportedly has not been broached by our representa- tives in the on-again, off-again discussions with British of] experts that were begun here in September. The discussions currently art in recess, pending the return from London of the leaders of the British delegation. The attitude does, however, represent by reaction of some financial and ot] experts here to demands by American producers that our Government brings greater pressure to bear on Britain. Many of the companies operating abroad have indicated they are willing to cover to an exclusive sterling basis, operating subject to British taxation, if that will enable them to retain at least a part of the market now being shut off, Our Government is pressing this viewpoint on the British but with less force than some producers would like, ECA SEEKS CLARIFICATION In the meantime, the Economic Coopera- tion Administration evidently believes it has gone as far as it should at present by mak- ing it known that the agency will approve Marshall aid for no additional British re- finery construction or expansion projects until Britain's discriminatory policy is ‘‘clar- ified.” This implied ultimatum might be made considerably stronger, it is believed, should American producers indicate a willingness to reduce prices, despite the profit losses that would entail, as a means of strengthening their competitive position against the Brit- ish. To be effective, this price cut might have to be as high as 10 to 15 percent. At the same time, it is pointed out, American pro- ducers should move further into non- sterling markets by indicating a willingness to accept 20 or 30 percent of payment in local currencies. AQGRESSIVE PROGRAM NEEDED An aggressive program of this sort, ita ad- vocates assert, would make the British less eager to grab off markets in sterling and other soft-currency areas if the profits to be FEBRUARY 6 received would not be large enough to offset the dollar cost (royalties, equipment, etc.) that would have to be incurred by British companies to produce the additional oll. It is conceded, however, that an all-out price war could well result in no gain at all if Britain fails to react to American reduce tions as anticipated. From the ECA viewpoint, price cuts would be beneficial in reducing dollar expenditures for European oil purchases and tn building Europe's over-all power potential. This viewpoint may be expressed before Congress shortly in hearings planned but not yet scheduled by the House Small Business Subcommittee on Oil Imports. Mr. MALONE. Mr. President, I now hold in my hand a dispatch appearing in the Journal of Commerce of Decem- ber 28, 1949. The headline reads: ‘“Oil- men report United Kingdom seeking to freeze them out of Japan.” I ask unanimous consent to have the article printed at this point in the RECORD. There being no objcction, the article was ordered to be printed in the Recorp, as follows: OILMEN Report Uniten Kincpom SEEKING To Frerze THEM OUT OF JAPAN If the British have their way, American oll companies may be frozen out not only from the sterling area but even from Japan, oil executives stated here yesterday. Recently the British Government suggested that Japan should use part of the £10,000,000 sterling balances it has built up from sales to the British by purchasing crude oil for its refineries. SCAP HELD AGREEING The Supreme Command of Allied Powers (8CAP) in Tokyo is understood to have agreed to the proposal but to have suggested that American producers be allowed to par- tictpate in supplying such crude oil if they were willing to be paid in sterling. Several American companies are reported to be ready to accept sterling. However, cable advices from Tokyo received by oil companies here yesterday stated that the British Trade Mission has now notified SCAP that American companies may not offer to sell their own crude to Japan for sterling unless the crude is purchased from sterling sources (British companies) and the sterling is then used to purchase Japa- nese goods for export to the sterling area. WOULD FREEZE OUT UNITED STATES This would freeze American oil producers out of the Japanese market to all practical purposes, leaving them only the alternative of acting as distributors of British oll. American companies here take the posi- tion that they should be allowed to supply any crude they desire to Japan as long as they are willing to accept payment in either sterling or Japanese yen and to use such pay- ment for purchases of goods in Japan for export to dollar areas, They point out that the sterling balances built up by Japan came primarily from sale of textiles to the British which were manu- factured from cotton supplied from this country. DAILY VOLUME ESTIMATED The volume of crude oil shipments to Ja- pan involved in this controversy was esti- mated in oil circles here to total approxi- mately 44,000 barrels per day. This action follows shortly on the heels of Britain's recent decision to bar shipments of fuel oi] from dollar sources to the sterling area starting January 1, and to restrict by one-third gasoline shipments by American companies to the United Kingdom. Similar actions have already been taken by India, Australia, and the British Crown Cole