ries, that the promotion of world trade should be on the basis of fair and reasonable competition. This basis must comply with the priniple that products of underpaid foreign labor should not be admitted o this country on terms which endanger the living standards of the American workman and farmer, or which would work serious injury to domestic industry. Do you believe in that principle?

Representative MARTIN. Yes, to protect our own standards, abso

lutely.

The CHAIRMAN. Now, the witnesses yesterday went further than that principle. They urged that the United States Congress resume its constitutional responsibility and regulate foreign commerce through the adjustment of imports, excises, whatever you want to call them, through its agent, the Tariff Commission by allowing the 1934 Trade Agreements Act, the so-called Reciprocal Trade Act which transferred such responsibility to the President, to expire in June of 1954. Do you agree?

Representative MARTIN. Yes.

The CHAIRMAN. These resolutions ask that the 1934 Trade Agreements Act be allowed to expire.

Representative MARTIN. And the resolutions are especially apropos for the mining industry.

The CHAIRMAN. And for the watch industry or any other industry? Representative MARTIN. Any industry on which our defense selfsufficiency depends.

The CHAIRMAN. Isn't it necessary for us to maintain our own economic structure? In other words, we have gone along for 175 years in competition with each other and have developed industry throughcut the Nation. The only way you can develop certain parts of the country, is by permitting them to compete with other parts of our country. That competition has raised our standard of living to a point higher than that of any other nation in the world.

The protective system grew up so that we were only in competition with each other. Now, do you agree with that principle?

Representative MARTIN. Oh, yes, I just meant a moment ago that I agree with the principle generally but it has special importance to this industry.

The CHAIRMAN. Yes, of course, because we can lose a war if we are dependent on other nations where transportation lines could not be kept open in time of war. It is a very serious question now whether you could get anything across an ocean in transports after a war started.

Representative MARTIN. For instance, an illustration of difference in thinking made necessary today by the development of some of the more improved submarines, enabling the enemy subs to stay at sea longer and more skillfully concealed

The CHAIRMAN. The snorkel submarine?

Representative MARTIN. Yes, that changes the whole picture, especially for shipments from South American countries.

At the time we first wrote this Stockpile Act, those developments had not gone forward as far as they have gone today and our hope then was that we could take into consideration the availability of strategic and critical materials from South American countries and those materials may not now be available to us in time

war.

The CHAIRMAN. Well, that could be but many people thought that transportation might be protected.

I would like, for the benefit of the record, to read into it that part of the Constitution formerly referred to. It is article I, section 8, which reads: "Congress shall have the power to lay and collect taxes, duties, imposts, and excises."

Today, we refer to duties, imposts, and excises as tariffs or import fees.

Now, another paragraph of section 8 states that Congress shall have the power "to regulate commerce with foreign nations." In other words, the Constitution places the responsibility to fix tariffs or import fees and to regulate foreign commerce in the hands of Congress.

That is the constitutional responsibility of Congress which it transferred to the Executive and which for 20 years the State Department has manipulated to lessen the importance of domestic industry and has strived to throw the weight of public opinion and the Government toward the development of foreign industry. Is that correct? Representative MARTIN. Yes, that is right.

The CHAIRMAN. I think this is a very important point that we are going to face on the Senate floor and on the House floor next year.

Do you believe that that act should be allowed to expire and Congress take back its constitutional responsibility through the Tariff Commission, or any other agent which it might create? Representative MARTIN. Yes, that I believe firmly. The CHAIRMAN. It should be allowed to expire?

Representative MARTIN. That we should reexamine and rewrite the law and establish the administrative agency in a way that will give Congress the controlling power, the means of exercising the control to carry out the original plan of having it within the control of Congress.

To the extent that the executive branch has taken over that functioning outside of the control of Congress, we are faced with a serious need of rewriting the law.

The CHAIRMAN. In other words, Congress has to reassert and carry out its constitutional responsibility?

Representative MARTIN. Yes, I do not want to go on record here now on the exact outline of that new legislation. I would want to give it very careful and full study before attempting to determine its exact outline.

I am in wholehearted accord with your statement that the record of the past 20 years since the trade-agreement law was enacted, shows too many cases of ruthless shunting aside of American industry and economy, and by that I mean industry, agriculture, business, and industrial development-shunting that aside and following a line, regardless of the impact of those policies against the well-being of our American

The CHAIRMAN. Wasn't that a natural result of giving that constitutional responsibility of Congress, to the executive branch whereby the head of a bureau becomes the judge of what this country is to do? Wasn't that a dangerous thing?

Representative MARTIN. It is a very, very dangerous thing to do. The CHAIRMAN. In other words then, Congress must lay down a principle which will guide its agent, the Tariff Commission or any

1 Commission which it might create. This principle should the necessity that duties and tariffs should be adjusted on a basis of fair and reasonable competition, isn't that true?

Representative MARTIN. Yes, that is right. That is the direction. we must travel.

The CHAIRMAN. We are in agreement, Mr. Martin.

Now, if I might read again from President Truman's statement on the passage of the Stockpile Act. That statement covers that (1) the stockpile program should not be used to subsidize domestic producers, (2) that it is the policy of the Government to work for international action in reducing trade barriers and (3) that unnecessary domestic production should not be justified through preferential treatment. That statement of President Truman was the key which explains the action of the administration in failing to carry out the directives of Congress to encourage domestic resources of strategic and critical minerals and materials and to endeavor to make the United States as independent as possible of foreign sources of supplies.

The policy set by President Truman was carried out by our Government agencies charged with acquiring a stockpile. These Government agencies favored acquisition for the stockpile from foreign sources of supply to the detriment of the development of domestic sources of supply.

Our

These agencies made large-scale purchases of minerals and metals abroad, and granted financial assistance in the development of foreign sources of raw materials which financial assistance could well have been spent in the development of our own domestic resources. marginal mines are marginal only because of the higher domestic labor costs. The use of this financial assistance in this country would have made us independent of foreign sources of supply in many instances. Now, strategic and critical materials in this Nation, are not confined to minerals. This committee is investigating 77 minerals, materials and fuels.

One of the greatest national advantages of this Nation is its economic structure which has been developed over a period of 175 years. Thousands upon thousands of industries have grown up here on the basis of competition within the country and almost any one of those industries could be destroyed if you applied a free trade basis for the importation of the products of that industry from a foreign cheaplabor source. That action would not only destroy a specific industry but would also destroy an important part of our entire economic structure. Would you agree with that?

Representative MARTIN. Oh, yes.

The CHAIRMAN. I think we are in entire accord and I want to tell you how much we appreciate your appearance here. If you have the opportunity of looking over your research materials we would appreciate your furnishing any further information.

Representative MARTIN. I appreciate the opportunity of coming here. I want to commend you very highly on following out this inquiry in which the committee is engaged.

In my opinion it probably is the most important field for us to examine today with a view to building and maintaining in our country a general economy and particularly a defense base upon which we can rely in any future war disaster.

The CHAIRMAN. Or maintain our standard of living.

Representative MARTIN. Our American standard of living is a very real part of our preparations for war. It isn't as immediate in its effect, perhaps, as the strategic and critical minerals and materials field, but it is a very, very important factor that we should not lose sight of.

The CHAIRMAN. In other words, we face a fight in Congress-and you know as well as I do that we face a fight and it is a fight to the death-whether we are going to have a leveling of our living standards with those of foreign nations through absolute free trade agreements such as we have allowed to be made over the last 20 years; or whether we are going to maintain our standard of living, maintain our ability to defend ourselves through the protection of our labor standards by flexible import fees which would go down as the world production increased. Free trade will be automatic if we strive to lift the world standard of living up to our level.

I agree with you that it does not follow that we are going to avoid war by leveling our standard of living to that of the rest of the world. Representative MARTIN. We are going to avoid war by showing that we have strength, that we have generated and maintained success within our own land.

As our ability to defend ourselves is recognized in other nations, so will those other nations hesitate to attack us.

I started in on this study some 35 years ago to find out whether I might not find a way to avoid the inevitable final world war between Russia and America by building America's general strength.

While teaching military science and tactics at the university some 32 years ago, I recognized that authorities of 100 years before had predicted the inevitability of a final war between Russia and America. You can find those statements in history. Commodore Perry at the end of his effort to open up Japan to world trade, came back to New York City and before the Geographical and Statistical Society of New York in March 6, 1856, predicted definitely that in the distant future America and Russia would inevitably clash in trying to settle whether the form of government advocated by Russia should prevail over the world or whether the free enterprise system such as we have in America should prevail.

That was a definite prediction by Commodore Perry and he predicted strangely enough, that the final battle would take place in Asia; that we would march on across the islands of the Pacific, take them over and establish a foothold in eastern Asia and that Russia should come down through China and Siam and there we would meet. Now, Perry predicted that final clash and the reason I went into this so thoroughly at the time and carried it on throughout by entire lifetime in the way of personal interest, was because I thought we could develop a strong America that would discourage Russia, for instance, from attacking us because of our strength.

Then in trying to appraise the strength of America on fundamentals, I recognized then that the mining industry, its health, its well-being and its vigor, was the basis of all preparedness.

I also accepted on top of that the supplement of the stockpile program and that lead me into my special activities after I got on the Committee of Military Affairs and that of course, led up to the present study on my part.

Because of that background, you can see how much I am in accord with what you are trying to do here. I want to commend you again for your good work in keeping America strong and in keeping our eyes on the important factors that build and maintain that strength. In that direction lies peace, not in sitting back in a rocking chair and taking a snooze. We will wake up some of these days and find out that some of our adversaries haven't been snoozing while we have, if we do that. I want, above everything else, to keep America strong enough to make it less likely that a foreign adversary will participate war on us. I want to disprove Commodore Perry's prediction in 1856, that we can live in a world without a fierce and final encounter between the despotism of Russia and our free-enterprise system. To do that we have got to build a strong and vigorous free-enterprise system.

The CHAIRMAN. The committee appreciates very much your appearance here, Mr. Martin. If you care to submit a supplemental memo, we will appreciate that very much.

"COMPARISON BETWEEN FEDERAL

ASSISTANCE EXTENDED TO FOREIGN

MINERALS EXPANSION PROGRAMS AND DOMESTIC MINERALS EXPANSION PROGRAMS"

Representative MARTIN. Thank you very much, Senator.

The CHAIRMAN. In line with Congressman Martin's testimony this morning, I want to submit for the record a table called part II, which shows Federal assistance of $594,126,000, foreign minerals expansion programs from July 1, 1950, through March 31, 1953.

I will also submit a table called "Part I-Analysis of Federal assistance for minerals expansion programs" for practically the same list of minerals and the total domestic expenditure has been shown. as $527,893,000, which expenditures are less by some 40 or 50 million dollars than the foreign expansion program.

I believe these statements are self-explanatory and I will submit them for the record.

39888-54-pt. 2——