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is going to be until maybe 5 months after the commodities have been processed.

Mr. TAYLOR. May I give a very recent example of what happened to the apple and pear industry because the money was not readily available and because of the time consumed in setting into motion machinery of support program, and the school lunch program?

First, we sent two men in the Northwest back here on the apple deal. We sent 5 men on the winter pear deal, in order to alleviate the difficulties of the marketing situation and get these surplus supplies that had accumulated because of lack of exports out from under the noses of the domestic dealers who knew they were there and could use them to browbeat the producers because of the extremely large quantities on hand above normal.

It took 6 weeks to get that program even going. Well, 6 weeks in a perishable industry can raise cain. It is not something that you can sit back and let wait. It has to go now.

Senator AIKEN. Is there not a possibility of developing a market for dried and canned apples in the Orient?

Mr. TAYLOR. I am not familiar with the use of those products in the Orient but I am glad you brought that point up, Senator, because I think it is well worth our investigating.

Senator AIKEN. There are a lot of people there. If they could only use the second grade fruit, it would be most helpful.

Mr. TAYLOR. If there are no more questions on that point, I would like to finish this statement, if I may.

Section 22 must be made sufficiently flexible so that on short notice the President can, if necessary, act to prevent imports from destroying the market for domestically grown fruit. Such action with respect to apples and pears may only be needed during the present period of postwar disruption of international trading. But, while the restrictive action may be needed only temporarily, it is none the less essential to the survival of many members of the deciduous fruit industry.

As the committee knows, the procedure established under the present section 22 involves application to the Secretary of Agriculture and an investigation by him; a report by the Secretary of Agriculture to the President; a request by the President that the Tariff Commission make an investigation, and an investigation by the Commission and further report to the President; and finally possibly restrictive action by the President by proclamation.

As a result, I do not know of a single instance where section 22 has been invoked successfully with respect to a perishable commodity.

In his statement before this committee on April 12, 1948, the Secretary of Agriculture recommended the revision of section 22. He said:

In the case of some commodities the success of a support-price program might be jeopardized by unduly large imports unless means were available to limit them.

The Secretary suggested that imports should be limited if such imports jeopardized the success of a domestic price-support program. As I have indicated previously, I believe action under section 22 should not be limited only to instances where a program is in effect, because, as I believe the Secretary will agree, in some instances the control of imports may take the place of and render unnecessary a costly price-support program.

Traditionally, and appropriately, the Secretary of Agriculture has been responsible for the administration of laws designed to provide support for agriculture. If he is to assume such responsibility, he should also have the primary responsibility concerning the restriction of imports of agricultural commodities, for, as I am certain the committee will agree, import controls on agricultural commodities may be an essential part of any support program.

Conceivably, the Government could abandon its efforts to support agriculture. But that does not seem to be the policy of the present administration or of this Congress. S. 2318 provides certain support measures, measures which we believe can be improved.

A few days ago, April 16, 1948, the House Committee on Agriculture voted to continue existing support legislation. But if support is to be continued, measures necessary to make support programs work should not be overlooked. Section 22 does not and cannot in its present form play its part. It should be made workable.

An effective section 22 may be invoked only sparingly within the framework of our international agreements. But an unworkable section 22 is useless regardless of our rights and privileges under such agreements.

Under the Marketing Agreement Act agricultural groups may seek to overcome some of their marketing problems through the execution of agreements. Yet, if, as is the case at present, the principal beneficiaries of such agreements may turn out to be foreign growers, and if the desired effect of such agreements may be defeated by unrestricted imports, there is little incentive for the undertaking of such agreements.

The solution of the import problems of the deciduous-fruit industry may lie in the execution of intergovernmental commodity agreements as provided for in the Habana draft of the International Trade Organization charter. It may lie in the establishment of a mixed commission of government representatives of countries which enjoy a twoway trade in horticultural commodities. But a United States negotiator participation on a commission or seeking to negotiate a commodity agreement will be at a hopeless disadvantage if his Government is not in a position to take unilateral action if agreement cannot be reached.

This suggestion is not based on theory. For several years now the Canadian-United States Joint Apple Committee has been meeting to consider apple imports from Canada. This is, as its name implies, an intergovernmental committee. The United States representatives, however, have had no bargaining powers, no basis on which to oppose the wishes of the Canadians. During the current year, fortunately, Canada has not imported into the United States the full quota to. which our representatives were compelled to agree.

Senator AIKEN. Is there any restriction as to variety or grade? What was the quantity this year?

Mr. TAYLOR. There is no restriction as to variety or grade. The United States agreed to take 2,750,000 bushels. That is the fresh figure. Total was 3,500,000 bushels.

Senator AIKEN. How many can we ship into Canada under the agreement ?

Mr. TAYLOR. Very, very few, for two reasons: One is that their tariff is much higher-it is prohibitive; and the second reason is that they do not have the population to consume their apples and any of

ours, although last year we did ship late in the season. They were short, as you recall. They had a very heavy export to Britain as we did, and we shipped quite a few late in the season.

There are also, I believe, some considerable movements of summer apples from the eastern area here, Senator Aiken, that move up there at a time when they have no supply. As far as we are concerned in the Northwest, we are practically out of the Canadian market, and have been for years.

Senator AIKEN. There is no market for Delicious or MacIntosh apples in Canada?

Mr. TAYLOR. No. The only ones we would get in any quantity at all are Winesaps, Newtons, and late-keeping apples. Nevertheless in a time of severe surplus the two-million-odd bushels of apples that were imported from Canada this year seriously aggravated our domestic difficulties.

Restrictions should, if at all possible, be imposed pursuant to agreement, but our Government must have a basis upon which to bargain. At the same time it is entirely reasonable to impose limits upon restrictions which may be placed on imports, as is presently done by section 22.

The committee has before it à proposed amendment introduced by Senator Magnuson April 19, 1948, which would revise section 22. Specifically the amendment would accomplish the following:

First. It would authorize and require the Secretary of Agriculture to make findings and recommendations to the President concerning actual or threatened damaging imports of agricultural commodities, and it would authorize the President to act directly upon such findings and recommendations by the Secretary.

We believe one investigation by competent officials familiar with the problems suffices, that import restrictions as contemplated by section 22 are most closely related to support programs for which the Department of Agriculture is responsible, and that valuable time is lost and no useful purpose served by requiring a second investigation by the Tariff Commission, as is now required under section 22.

Second. The proposed amendment would authorize action to restrict imports when such imports would interfere with the profitable marketing of an agricultural commodity. As I have suggested in this statement, we believe this is essential, because under some circumstances the restriction of imports for certain periods may make it unnecessary to undertake the expense of a support program. But the amendment also provides that, if imports of agricultural commodities do interfere with agricultural programs actually in effect, then such imports may be restricted. The only possible question in this connection is how to make section 22 administratively workable.

Third. The amendment provides for the negotiation of agreements concerning import restrictions with countries from whom we import the commodities which are causing difficulties. If our negotiators have some basis on which to bargain, it may be assumed that agreement will be reached in some cases. Our Government agreed, informally, to the recent Canadian embargo, and Canada, similarly might recognize some of our difficulties unless our negotiators are rendered helpless by ineffective supporting legislation.

Efforts at bilateral solutions are more consistent with recent developments in the field of international trade than are the unilateral actions authorized under section 22 at present.

Fourth. The President is empowered to act unilaterally where negotiations for agreement fail or where damage would occur during such negotiations. It may properly be assumed that the President would employ this power only within the scope of our international agreements. It is worthy of notice that article XIII of the Geneva Agreement on Tariffs and Trade authorizes under certain circumstances the unilateral imposition of import restrictions. As the committee knows, this agreement has been in effect provisionally since January 1, 1948.

Fifth. The amendment would provide for appropriate revocation, suspension, or modification of restriction imposed and would continue in effect the limitations on such restrictions now provided in section 22.

We believe that in order to serve its full purpose, section 22 must be streamlined from the point of view of administration and made effective without the required existence of an agricultural program, as I have suggested in this statement.

In conclusion I should like to thank the committee for hearing my views as a representative of the Northwest deciduous fruit industry. Our industry is hopeful that this committee and the Congress will understand our current critical problems and respond to our need for temporary, limited support assurance and assurance against threatened crippling imports.

The industry is convinced that, should the Congress adopt the amendment to S. 2318 proposed by Senator Magnuson, these measures would go far toward alleviating the current problems of the industry.

Thank you, gentlemen.

The CHAIRMAN. You have made one of the most interesting reports that we have received.

Mr. TAYLOR. Thank you, Senator Capper. I appreciate that very much.

It is a large field.
The CHAIRMAN. It certainly is.

Mr. TAYLOR. I am sorry my statement was as long as it was, but I think you understand that we are very much concerned about this situation. I want to assure you of this, that if at any time the committee has any questions or we can be of any assistance in the agricultural programs, we are willing to come back.

You know how to get in touch with us and we want to do everything we can and do our part.

The CHAIRMAN. We will now adjourn until tomorrow at 10 o'clock.

(Whereupon, at 12 o'clock noon, the committee adjourned, to reconvene at 10 o'clock, Wednesday, April 21, 1948.)

AGRICULTURAL ACT OF 1948

WEDNESDAY, APRIL 21, 1948

UNITED STATES SENATE,
COMMITTEE ON AGRICULTURE AND FORESTRY,

Washington, D.C. The committee met pursuant to adjournment at 10 a. m., in room 324, Senate Office Building, Senator Arthur Capper (chairman) presiding.

Present: Senators Capper (chairman), Aiken, Bushfield, and Thye. Senator AIKEN. (presiding). The committee will come to order.

Senator Capper is busy with another committee meeting right now, so we will proceed with the witnesses that are scheduled to be heard on S. 2318.

The first witness is William Fette, Jr., vice president, Schnutter Candy Co., and chairman of the peanut committee, National Confectioners' Association, Chicago, Ill. STATEMENT OF WILLIAM FETTE, JR., VICE PRESIDENT, SCHUTTER

CANDY CO., AND CHAIRMAN, PEANUT COMMITTEE, NATIONAL CONFECTIONERS' ASSOCIATION, CHICAGO, ILL. Mr. FETTE. I am William Fette, Jr., of the Schutter Candy Co., of Chicago, Ill. In my initial remarks of this morning, I am speaking as chairman of the peanut committee of the National Confectioners Association, a trade association organized in 1884 and representing candy manufacturers producing approximately 80 percent of the production of the industry.

In an effort to be helpful to your committee, to the public, to the growers, to the shellers, and to the candy industry and other end users, we will also submit a rather lengthy, but detailed, factual statement. This statement, in addition to technical facts, contains numerous comments on S. 2318 as it now stands and offers various recommendations.

Many of the technical points involved require more study and deliberation than can be given through an oral presentation, and for this reason I will attempt to briefly summarize the numerous comments and recommendations.

Comments:

(a) The stated purposes of the bill included in the “declaration of policy” are unattainable under the provisions of the bill.

(6) Discrimination (created by "basic” and “other crop” policies) should be avoided, not fostered by Congress.

(c) The new “parity formula” does not remedy existing defects as applied to peanuts.

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