and munitions to Japan to be used for bombing defenseless civilian populations in China?

Mr. VOORHIS. Well, that is a different kind of approach, certainly, and if you are going to pass a law and say certain things are going to be against the law; and you will be able to know when a certain individual or nation has evaded it, and say that so and so, and name him, is to be punished for having done such and such a thing. I mean, if you pass a law to cover that kind of violation I think you could do it, and I think you could make it generally applicable. Mr. VORYS. But not retroactive?

Mr. VOORHIS. No; we could not make it retroactive.

Mr. BLOOM. Any further questions? We thank you very much, Mr. Voorhis.

The committee will go into executive session for a few minutes. Mr. STEARNS. Are you not going to get in just as much difficulty in trying to define the cases of bombing of civilians as you will over aggressor nations? Would that not be just as much difficulty, and would there not be just as much difficulty arise?

Mr. VOORHIS. I do not think there would be as much, and I do not think it is the same sort of thing.

(Thereupon the committee proceeded to executive session.)

AMERICAN NEUTRALITY POLICY

WEDNESDAY, APRIL 12, 1939

HOUSE OF REPRESENTATIVES, COMMITTEE ON FOREIGN AFFAIRS, Washington, D. C.

The committee met, pursuant to adjournment, at 10 a. m., Hon. Sol Bloom, acting chairman, presiding, for further consideration of various neutrality bills.

Mr. BLOOM. The committee will please come to order. Mr. Crawford, of Michigan.

STATEMENT OF HON. FRED L. CRAWFORD, REPRESENTATIVE IN CONGRESS FROM THE STATE OF MICHIGAN

Mr. CRAWFORD. Mr. Chairman and members of the committee, I desire to address my remarks to H. J. Res. 42, and H. R. 979, the first of which is before your committee, and the latter bill, H. R. 979, is before the Interstate and Foreign Commerce Committee of the House.

Mr. BLOOM. Your bill is H. J. Res. 42?

Mr. CRAWFORD. Yes.

Mr. JOHNSON. What is the number of it?

Mr. CRAWFORD. H. J. Res. 42. (See p. 621.)

Mr. JOHNSON. This is Fred L. Crawford of Michigan?

Mr. CRAWFORD. Yes, sir. H. J. Res. 42 provides for an embargo on scrap iron and pig iron under Public Resolution No. 27 of the Seventy-fifth Congress. It is very brief, but I shall not take the time of the committee to read it at this time.

Our people since the establishment of our civilization on this continent have been a trading people.

Mr. BLOOM. Would you mind an interruption there?

Mr. CRAWFORD. No, sir; not at all.

Mr. BLOOM. You say scrap iron and pig iron?

Mr. CRAWFORD. Yes, sir; scrap iron and pig iron.

Mr. BLOOM. Does that include junk?

Mr. CRAWFORD. Yes, sir; it does.

Mr. BLOOM. It has been stated before this committee that scrap iron is not junk. The scrap iron people and the tin people were here before the committee, and they testified that scrap iron is one thing and that junk is another thing, because the junk dealers wanted to know if that included them.

Mr. CRAWFORD. Well, perhaps, under H. Res. 979, which, as I say, has been referred to the Committee on Interstate and Foreign Com

merce, the language is a little broader, where it refers to scrap iron, pig iron, and scrap steel.

Mr. BLOOM. I just wanted to bring that to your attention.

Mr. CRAWFORD. This is intended to be broad enough to cover everything which can be used in the production of steel, and I think, as I go ahead with my remarks, that will be brought out more fully.

As I say, our people since the establishment of civilization on this continent have been a trading people. It is my personal opinion that they will continue to trade in peacetime products not only internally, but externally as well. I am sure our ingenuity, persistence, and courage will find means whereby goods produced by our workers can, in one way or another, be exchanged for the products and services of the workers of other lands.

In addressing my remarks specifically to the question of exports of scrap iron, pig iron, and scrap steel, I desire to point out:

First, a relatively small number of our people are benefited by the exportation of scrap.

Second, the original owners of the scrap, the industry, or the individual whose article has served its usefulness and has returned to scrap, is benefited very slightly by a higher price for scrap.

Third, scrap is becoming more and more an important raw material in this country. Its exportation depletes our raw material sources, creates a shortage, and thereby increases the cost of domestic

consumers.

That is what this proposal covers, anything that goes into the manufacture of steel, whether junk, scrap, scrap iron, scrap steel, or material similar thereto, is intended to be covered.

Few realize how consistently the price of finished steel in this country follows the price of scrap. This will become more and more the case as scrap increases in its use as a raw material for the manufacture of steel. It now supplies about 60 percent of the raw material; iron ore and pig iron supplying the balance. As evidence of this close relationship, I submit a chart comparing the finished-steel prices and scrap prices for the past 25 years. The ordinary tradepaper quotations of scrap are made in dollars per gross ton, while the finished-steel prices are made in cents per hundredweight. On account of this different unit, one does not readily see the direct comparison.

In the chart the finished-steel prices have been changed from cents per hundredweight to dollars per ton. We have left the finished-steel curve in dollars per net ton, while the curve for scrap is in dollars per gross ton. This difference in unit is, we believe, justified on the approximation that a gross ton of scrap is required to produce a net ton of finished product.

The curve representing scrap prices is the yearly average of the Pittsburgh, Chicago, and Philadelphia quotations of No. 1 heavy melting steel. The curve representing finished steel prices is the yearly average of the composite steel prices made up of steel bars, shapes, plates, plain wire, open-hearth rails, black pipe, and black sheets. The figures for both curves were taken from the January 5, 1939, issue of the Iron Age.

Ignoring the smaller fluctuations, we find that, without exception, the price of finished steel has followed the price of scrap iron and

in every instance a decline in the price of scrap has produced a greater decline in the price of finished steel.

I am now talking about steel products which go into your manufactured products or agricultural implements, together with all the other fields of steel products whatever they may be, in rough, finished, high-class material or otherwise.

Specifically, the decline from 1903 to 1914 was, scrap, $6.84 per gross ton, and finished steel $7.80 per net ton. The advance from 1914 to 1917 was, on scrap, $18.83 per gross ton, and finished steel, $55.20 per net ton. Then there was a decline from 1917 to 1921, on scrap, $16.58 per gross ton, and finished steel, $41.40 per net ton. From the 1921-22 period to 1923 scrap advanced $6.44 per gross ton, and finished steel $11.60 per net ton. Then from 1923 to 1932, scrap declined $11.51 per gross ton, and finished steel $16.20 per net ton. Then, from the 1932-33 period up to 1937, scrap advanced $10.49 per gross ton, and finished steel advanced $12.60 per net ton.

These figures are conclusive evidence that the price of finished steel products is closely related to the price of scrap and that the finished steel price advances or declines more than the advance or decline in the price of scrap. Relatively low-priced scrap or at least stability in the price of scrap is something then in which every individual in this country should be tremendously interested. As against the relatively few who benefit from the exportation of scrap, we have the entire mass of our population who pays the bill in higher prices for finished steel.

During the 25-year period covered by the chart, there have been three major advances, the largest being the 1914 to 1917 war period when demand for scrap in this country increased the price. During that period, our country was exporting finished product and not scrap. Industry and labor in this country got the benefit of the advanced price. The $10.49 per ton advance from 1932 to 1937 is the second largest advance, being considerably greater than the $6.44 per ton advance beginning in 1921, and, with the one exception, being much greater than any other advances in the scrap market during the 25year period.

I submit a table showing the exports of scrap in gross tons from the United States since the year 1924. Prior to that time, the exports were negligible.

In 1924 we exported 97,748 tons; the following year, 1925, 82,573 tons; in 1926 we exported 104,573 tons; in 1927 we exported 239,209 tons; in 1928 we exported 516,148 tons; in 1929 we exported 557,040 tons; in 1930 we exported 358,649 tons; in 1931 we exported 136,125 tons; in 1932 we exported 227, 522 tons; in 1933 we exported 773,406 tons; in 1934 we exported 1,835,170 tons; in 1935 we exported 2,044,506 tons; in 1936 we exported 1,877,136 tons; and in 19371 we exported 4,039,000 tons.

The increase in exportation since 1932 has been by far the most rapid and extensive in our entire history. I am convinced that this fact is largely responsible for the rapid increase in the price of scrap from 1932 to 1937, which, as we have already seen, resulted in an even greater increase in the price of finished steel in this country, and this question goes to the heart of the price of steel commodities about which there was so much said on the floor of the Senate yesterday

1 See p. 637.