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In any proceeding under or involving the application of any provision of this act reports and depositions of officers or agents of the United States shall be admissable in evidence.

I have had a number of requests from parties desiring to be heard on this bill, and I have asked the committee reporter to be present. Senator Steiwer, do you wish to be heard?

Senator STEIWER. I am in no hurry, although I left another cocmmittee to come here. You might hear some other witness first if you prefer.

Senator BINGHAM. Mr. Chairman, might I ask right there, is there anyone appearing against this bill?

The CHAIRMAN. Yes; there are quite a number of people against the bill, and some of them are present. We will hear Senator Steiwer.

Senator STEIWER. Initially, I do not require more than three or four or five minutes, as I desire to make only a very brief statement. After the objections are made I might like a little time to dispose of those objections.

The CHAIRMAN. You may go ahead now, Senator Steiwer, and make your statement.

STATEMENT OF HON. FREDERICK STEIWER, A SENATOR FROM

THE STATE OF OREGON

Senator STEIWER. Very well. For the purpose of the moment, gentlemen of the committee, I am not going to enter into any discussion of the general aspects of convict labor. I assume that we are all of one mind to the extent that we should like to protect American labor against unfair competition of convict-made importations; and that we are all of one mind generally speaking regarding forced labor in its different forms as being essentially convict labor in the sense that it is not free labor.

Now, the Ways and Means Committee of the House of Representatives in considering this bill had before it the representatives of various industries. I noticed by an examination of the hearings in the House that the farmers were represented through the Farm Bureau Federation, and that the coal people, the lumber people, and various other groups, I mean industrial and agricultural groups of the country, were represented before the House committee. If any member of this committee is interested in the details of their claims, of course they are available, and there is no reason for me to reiterate them now.

What I do want to say to the committee is this, that my own connection with the matter initially came from the introduction, or was evidenced by the introduction, of S. 5370. Subsequently Congressman Kendall introduced the same bill, or at least substantially the same bill, in the House. And still subsequently he introduced a new bill, which became H. R. 16517, and it was this subsequent Kendall bill that the House Ways and Means Committee considered and reported upon, and which passed the House.

Now, gentlemen of the committee, I think I might be of a little help to you on one or two points. This House bill as passed includes three amendments only to section 307 of the tariff act as we passed it. It is not in the form of an amendment of the tariff act, but it has the practical effect of being an amendment of the tariff act even though it is stated independently, and it introduced three changes and three changes only.

You will remember the inhibition against the importation of convict-made goods was contained in the old law, and that it has been in the law for many years. But the 1930 act included indentured labor and forced labor, and in that respect the 1930 act is a modification of the old law. But the provision in the 1930 act was that these new inhibitions and in particular against forced labor and indentured labor, should not take effect until January 1, 1932.

Now, one of these changes of this Kendall bill as against the existing law is to modify that date by moving it up from January 1, 1932, to April 1, 1931.

Senator Couzens. Senator Steiwer, do you mind an interruption? Senator STEIWER. No.

Senator CouZENS. Have you considered the effect upon the tobacco industry, the cigar manufacturers particularly, of such a provision?

Senator STEIWER. Yes, I have, Senator Couzens.

Senator Coczexs. Don't you think it is vitally important that it not be advanced to that date because of that industry?

Senator STEIWER. I do not think so. And I want to answer the Senator from Michigan (Mr. Conzens) this way: I am anxious that this bill should be right in every sense and that it may be agreed to by the Senate; and I want to be cooperative and not at all stubborn in that respect, but

The CHAIRMAN (interposing). You have no objection so far as tobacco is concerned to the date remaining as it is?

Senator STEIWER. No.
Senator GEORGE. But I have.

Senator STEIWER. If it is limited to tobacco, I have no personal objection.

The CHAIRMAN. But I was just asking the witness a question to get his view.

Senator GEORGE. But why exclude one side and not the other?

The CHAIRMAN. Well, we will come to that when we come to consider it as a committee.

Senator STEIWER. If you put this off with respect to indentured labor, and I assume that is the question raised, because of the Sumatra tobacco which is made by indentured labor; if you put it off as to indentured labor, there is nothing to prevent the Soviet Government from changing the form of its labor by a simple ukase, making all convict and forced labor into indentured labor, and you will see where we might readily be. So I hope this committee will be a little hesitant about changing that date, unless you can do it in such a way as not to open the doors wide to importations from other parts of the world.

Senator King. Let me ask a question right there: This bill is intended, is it not, so as to operate purely against Russia ?

Senator STEIWER. I do not think so.

Senator King. Upon the theory that all Russian labor is slave or forced or indentured labor ?

Senator STEIWER. I think not. It would apply to convict labor, forced labor, or indentured labor wherever it might exist.

Senator King. But is there any contention that there is convict labor, forced labor, or indentured labor employed in the making of products coming into the United States except as it may be charged that in Russia there is convict labor, forced labor, or indentured labor ?

Senator STEIWER. Oh, yes.

Senator REED. Oh, yes, there are other parts of the world where convict labor, forced labor, or indentured labor is used. The French Government is mining phosphate rock that way, I believe.

Senator STEIWER. Yes; and in various places we have these conditions. But there are different kinds of compulsory labor employed, in different places in the world.

Senator COUZENS. The question Senator King raised is one I have in mind, that the objections back of this bill are the Russian situation.

Senator STEIWER. I think to some extent that is true.

Senator COUZENS. Because all other conditions existed when we passed the tariff act, and new conditions have arisen as to Russian importations that were not apparent at that time.

Senator King. Isn't it largely inspired because there is a belief, well founded or otherwise, that indentured labor or forced labor or convict labor has been employed in the manufacture or production of lumber or timber in Russia ?

Senator STEIWER. That accounts for a part of the interest behind the bill. I might say that the lumber industry is very much alarmed at the prospect of Russian importations of lumber being enormously expanded within such a short time as six months or nine months or a year.

Senator REED. That is not volunteered labor at all. Others are volunteer labor and indentured to employment. But the Russians employ persons under other conditions, force men into employment and then force them to work.

Senator STEIWER. Yes. And we get into great difficulty with respect to that because they say it is volunteered_labor. In my opinion it is volunteered only in the sense that the Russian peasant would rather in that sense volunteer his labor than to meet the consequences of nonperformance. But in the real sense you and I would have in mind it is not volunteered.

Senator REED. It is a clear case of duress. There is no question about it not being volunteer labor.

Senator Watson. Suppose you pass this law, how will you determine whether in the case of products coming in from Russia they fall into either one of these categories? How are you going to find out whether it is convict or forced labor?

Senator STEIWER. If it is applied to the lumber situation the Treasury Department has already made a finding that convict labor is employed in a great deal of that area.

Senator Reed. And in the same way with the production of coal; isn't that true?

Senator STEIWER. I think no finding has been made with respect to coal.

Senator REED. There is a case pending, and I thought it had been decided.

Senator King. Let me say that when I was in Russia some years ago I visited all of the mines and went into the homes of the people, and there was not any convict labor or any oppression there. The coal miners got higher wages than almost any other group of people in Russia.

Senator Watson. How long ago was that ?

Senator King. In 1923; and there has been no change in the situation there since then.

Senator WATSON. Oh, yes; there has been a great change.

The CHAIRMAN. I think the Treasury Department knows whether there is that kind of labor employed or not, and I shall ask Mr. Eble to tell us about that.

Senator STEIWER. Oh, yes; they know all about it.

The CHAIRMAN. I have asked Mr. Eble to attend and he will tell us about that later on.

Senator STEIWER. I might say that refugees are coming out of Russia every day, into Finland and other countries of the world, and there are hundreds of men, according to the information brought back, who have worked during the last 12 months, and they come over into the Scandinavian countries; and very many of these people have been contacted by our diplomatic service and by others, and a very great volume of testimony has been accumulated on that subject.

To answer further the question propounded by the Senator from Michigan (Mr. Couzens), I want to call attention to this language for the consideration of the committee, that was in the old law, section 1 of the Kendall bill:

Shall not be applicable to goods, wares, articles, or merchandise so mined, produced, manufactured, transported, handled, loaded, or unloaded which are not mined, produced, or manufactured in such quintities in the United States as to meet the consumptive demands of the United States.

I am told that

Senator Couzens (interposing). I read that, but the contention of the domestic tobacco producers is that their wrappers are adequate in the matter of supply for the cigar manufacturers. But others contend that it is not.

Senator STEIWER. And that raises a question upon which I am not an authority. But I am told that the House committee, or at least various members of it, took the position that the law as they enacted it would not exclude Sumatra wrappers at all because they regarded the Sumatra wrapper as a distinctive thing. They said, therefore, there was no production of Sumatra wrappers in this country, and our Sumatra demands were not met by them, and, therefore, that the tobacco people need not trouble their minds about this. I do not know whether that is a sound proposition or not, and of course your judgment, jointly, would be better than ours.

Senator REED. Isn't the Dutch Government getting away from penal labor? I understand that they say they will be entirely in the clear by the date fixed in the tariff law. On the other hand, the Russian Government is getting deeper into this every day.

Senator STEIWER. I think that is true. In connection with that matter I might say that the testimony before the House Committee is to the effect that there is now in the warehouses in this country an unbelievable amount of tobacco wrappers. And I think it is stated that there is enough to make 11,500,000 cigars.

The CHAIRMAN. The largest manufacturer in the United States using Sumatra tobacco as a wrapper was in my office on yesterday, and and he stated that they could not run more than 4 months if this bill should become a law.

Senator SHORTRIDGE. They want the date to go to January 1, 1932, as I understand it.

Senator Couzens. Yes; they are perfectly satisfied with the Tariff law as it is written, because they can adjust themselves to the situation.

Senator GEORGE. I suppose you want to get the bill through at this session; do you not?

Senator STEIWER. Yes, sir.

Senator WATSON. It is not so important sa far as the tobacco part of the situation is concerned, because neither tobacco nor cigars come from Russia.

Senator GEORGE. Let us treat all industries alike.

Senator REED. We are going to throw about 50,000 men out of employment if you shut down the cigar industry.

Senator STEIWER. And nobody wants to do that. However, the statement was made before the House committee that there is a supply on hand for two years.

The CHAIRMAN. I will try to get in touch with a man who uses more tobacco in his institution than in any other institution in the United States, more Sumatra tobacco. He told me on yesterday that it would be impossible for him to run more than four months if this law is changed.

Senator BINGHAM. I do not think the General Cigar Co., which is evidently the concern you speak of, are properly informed about the matter at all. Of course, they have been fighting us all along. They objected even to a small additional duty being placed upon Sumatra wrappers. But it was stated on the floor of the Senate, on the part of many cigar manufacturers, including many in Pennsylvania, that they could use the domestic wrapper perfectly well if they wanted to. But the fact is that the largest cigar manufacturers, the General Cigar Co., control a large part of this Sumatra supply, and they bring it in cheaper. Now, if you do not do this they are going to be able to bring in before the end of the year enough Sumatra tobacco to put the wrapper growers in this country out of business. And there is a 2-years' supply on hand in warehouses.

Senator COUZENS. That is not the concern Senator Smoot was talking about. The representative of the same concern saw me on yesterday, and they have great factories in Michigan and Ohio, and employ a great number of persons, and they testify that they have only four months' supply.

Senator SHORTRIDGE. At some stage in the matter, I wish to state. and it may be recent, that I favored increased rates on imported wrappers, having regard to Connecticut, Massachusetts, Georgia, and Florida.

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