producing and exporting to the United States certain specified commodities

imposes duties or other exactions upon the agricultural, manufactured, or other products of the United States, which * * he may deem to be reciprocally unequal and unreasonable, he shall have the power

to suspend by proclamation the provisions of this act— for such time as he shall deem just.

Pursuant to the first part of this section, the President concluded agreements with France in 1898, 1902, and 1908; with Portugal in 1899 and 1902; with Germany in 1900, 1906, and 1907; with Italy in 1900 and 1909; with Switzerland in 1906; with Spain in 1906 and 1909; with Bulgaria in 1906; with the Netherlands in 1907; and with Great Britain in 1907.

These agreements, which were not submitted to the Senate but brought into force by proclamation by the President, were given full force and effect by various decisions of the courts of the United States.

Section 4 of the same act authorized the President, by and with the advice and consent of the Senate, to negotiate treaties with foreign countries providing for reciprocal tariff concessions. Pursuant to this authorization, the President concluded a series of treaties, all of which made provision for tariff reductions of considerable importance. These treaties, known as the "Kasson Treaties", failed to receive ratification by the Senate and therefore never came into force, thus demonstrating the ineffectiveness of such a method.

TARIFF ACT OF 1909

Under the Payne-Aldrich Act of August 5, 1909, two schedules of duties, a minimum and a maximum, were enacted. The act authorized the President to ascertain those countries which did not "unduly discriminate" against American commerce and which accorded to the United States "reciprocal and equivalent" treatment and to declare by proclamation that the minimum rates should be applicable to all articles imported into the United States from such countries. Under the provisions of this act 134 proclamations were issued, including practically the entire commercial world.

TARIFF ACT OF 1922

The Fordney-McCumber Act of September 21, 1922, provided, under section 315, for the lowering or raising of duties by proclamation of the President on the basis of differences in the cost of production of articles in the United States and the like or similar articles of foreign countries.

These proclamations were to be issued after investigation by the Tariff Commission. Section 316 gave to the President power, whenever the existence of methods of unfair competition and unfair acts in the importation of articles into the United States should tend to destroy or substantially injure an industry, to cause additional import duties to be imposed or, in extreme cases, to cause such articles to be excluded altogether from the United States. Section 317 provided that when the President should find that the public interest

would be served thereby he should by proclamation specify and declare new or additional duties on the products of any foreign country whenever he should find that such country was discriminating in fact against the commerce of the United States as compared with that of other countries.

The constitutionality of the first of these sections was questioned on the ground of too large a delegation of power to the President. However, the Supreme Court of the United States in the case of Hampton & Co. v. United States (1928; 276 U.S. 394) upheld the constitutionality of the law, the Chief Justice stating that

the same principle that permits Congress to exercise its rate-making power in interstate commerce, by declaring the rule which shall prevail in the legislative fixing of rates, and enables it to remit to a rate-making body created in accordance with its provisions the fixing of such rates, justifies a similar provision for the fixing of customs duties on imported merchandise.

The constitutionality of the act was further upheld in the case of Frisher & Co., Inc., v. Bakelite Corporation (1930; 39 Fed. (2d) 247), and in Frisher & Co., Inc., v. Elting (1932; 60 Fed. (2d) 711).

TARIFF ACT OF 1930

In the Smoot-Hawley Act of June 17, 1930, the provisions of sections 315, 316, and 317 of the act of 1922 were reenacted in substance in sections 336, 337, and 338. The constitutionality of section 336 of this act was again questioned and upheld in the case of United States v. Sears, Roebuck & Co. (1932, 20 C.C.P.A., 295).

It must be evident that H.R. 8687 goes no further in the delegation of power than preceding measures have gone. Former enactments have delegated to the President the power to fix tariff rates and have also delegated to the President the power to enter into executive agreements concerning tariff rates. These enactments have not been held unconstitutional by the courts. In view of the fact that we are today in the face of an emergency which has seldom, if ever, been paralleled in the history of the country, and in view of the fact that these other measures in the absence of such an emergency have been upheld as constitutional, the constitutionality of H.R. 8687 does not seem open to serious question.

IMPORTANCE OF SAFEGUARDING EXPORT INDUSTRIES

If the United States is to regain prosperity and not sacrifice large and important agricultural and commercial interests which give employment to millions of the workers of the country, it must sell certain of its surplus products abroad. As stated by the President in his message to Congress:

Important branches of our agriculture, such as cotton, tobacco, hog products, rice, cereals, and fruit raising, and those branches of American industry whose mass production methods have led the world, will find expanded opportunities and productive capacity in foreign markets and will thereby be spared in part, at least, the heartbreaking readjustments that must be necessary if the shrinkage of American foreign commerce remains permanent.

The Secretary of Agriculture has stated in his testimony, given before the committee on March 8, 1934, that

We

We normally export in this country about 55 to 60 percent of our cotton. export normally 20 percent of our wheat, 40 percent of our tobacco, half of our packing-house lard, and about 30 percent of our rice.

Similarly, the Secretary of Commerce stated in his testimony given on the same day:

We also need a foreign trade to provide a market for our farmers, and no less for some of our most important manufacturing industries. Many of our largest industries, particularly those manufacturing the highest grade type of product, such as machinery and automobiles and electrical equipment, which can be made in America more skillfully and satisfactorily than anywhere else in the world and which have always led in the markets of the world, are organized on such a scale and under such efficiency that they produce far more than we can consume at home, and the closing of foreign markets to these industries in recent years is one of the reasons for the drastic lowering of their production level resulting in the throwing out of employment of hundreds of thousands of workers. It is in industries belonging to this class that unemployment is most severe, and one of the most effective measures for combating our unemployment situation and sav.. ing a large body of our industrious workmen from a Government dole would be to restore to these industries something more nearly approximating their normal foreign markets.

We hear a great deal about our agricultural surplus. This is evident because the wheat is produced and stored in elevators, the cotton is stored in warehouses or where it is readily located. There is no such industrial surplus in the form of automobiles, ready-made, looking for a market, or road-building machinery gathering rust. However, these industries are geared for manufacture with the expectation that a considerable percentage of their output will move into foreign markets. In addition to idle factories and unemployed factory workers I should also call your attention to our development of port facilities which are standing idle, of shipping which is unemployed, and of railroad facilities available for the use of export commodities but remaining inadequately unused to the extent that exports have declined. You can all see easily the picture which the Secretary of Agriculture has so clearly presented. The loss of foreign markets to farmers means the withdrawal of acreage and the destruction of communities. I must add to that picture that the loss of foreign markets for manufactured products has a like implication to our economy. We need to think of our laboring population in the cities and manufacturing centers no less than of our farmers, because it is of the very essence of the policy of the "new deal" to take into consideration the needs of a balanced national life and of all groups and segments of our people alike.

The Secretary of Agriculture also testified at the same time:

We have been making a little preliminary study of the wage earners, of the gainfully employed, including those in both agriculture and industry, and have found, in a rough way, that between 2 and 8 million of our gainfully employed wage earners and agricultural workers are in industries and branches of agriculture which are on the export market, and which would decidedly be beneficially affected by this bill.

In his testimony before the Committee, Mr. James A. Farrell, of the Chamber of Commerce of the United States, representing the Foreign Commerce Committee of that organization, said:

The national chamber's interest in reciprocal trade negotiations has been due in large part to the belief that the United States has been slower than other leading industrial nations to recognize the important place the foreign trade occupies as a stimulus to domestic recovery and as a permanent reinforcement of our national economic structure. The depression, since 1929, being one of drastic decline in buying power throughout the world, resulting in a serious curtailment of international trade, has affected the United States more acutely than most countries, and created a serious problem of unemployment which has been a little more acute in this country than it has been in other countries.

Seven million persons, it is estimated, are dependent for their livelihood on our foreign trade. It is impossible, therefore, to deal effectively with the problem of unemployment without taking into account the vital importance of our overseas commerce as a means indispensable to the success of the National Recovery Act and as an aid to employment.

The policy of bargaining our way to the markets of the world by means of reciprocal trade agreements is one to which Congress should give careful consideration. Other countries have delegated these powers to the Executive, and have

already, as in the case of Great Britain and her Dominions, made considerable progress ahead of the United States in making foreign-trade promotion instrumental to national economic recovery.

Legislation is necessary for the protection of American industries, many of which employ only a few hundred American laborers. If protection is necessary for these, it is all the more compellingly necessary for agricultural and industrial pursuits involving millions of farmers and working men who would normally be engaged in agriculture and industry to produce goods for our foreign trade. Can a policy be called protection in any true sense which does not protect such farmers and working men also?

Furthermore, the problem of maintaining satisfactory prices for many of the staple American products is intimately connected with the decline or revival of foreign commerce. If we are unwilling or unable to work out bargaining interchanges by which such branches of American production as cotton, cereals, hog raising, fruit growing, and the like, can dispose of part of their product in foreign markets, the pressure of supply on the domestic market will necessarily mean continued price depression. The more rigid the trade barriers of the world remain the more vigorous will have to be the expedients employed to sustain prices.

It is clear that the authority which H.R. 8687 would delegate to the President must be very carefully exercised so as not to injure manufacturers or domestic producers. As stated by the President in his message to Congress

The exercise of the authority which I propose must be carefully weighed in the light of the latest information so as to give assurance that no sound and important American interests will be injuriously disturbed. The adjustment of our foreign trade relations must rest on the premise of undertaking to benefit and not to injure such interests. In a time of difficulty and unemployment such as this, the highest consideration of the position of the different branches of American production is required.

The Secretary of State in his testimony before the committee given on March 9, 1934, was equally clear and explicit upon this point. He stated that

Unfortunately, too few persons stop to study and understand the mechanism of international finance and commerce. The entire policy as proposed by the pending House bill would rest upon trade relationships that would be mutually and equally profitable both to our own and other countries. While naturally no detailed plans and methods relative to the proposed negotiations have been formulated, it can be stated with emphasis that each trade agreement undertaken would be considered with care and caution, and only after the fullest consideration of all pertinent information. Nothing would be done blindly or hastily. The economic situation in every country has been so thoroughly dislocated and disorganized that the people affected must exercise patience while their respective governments go forward with such remedial undertakings as the proposed bilateral bargaining agreements.

It has been assumed by some that following such a tariff bargaining program as proposed in H.R. 8687 would seek to eliminate or destroy small industries or industries inefficiently conducted. One of the members of this committee, questioning the Secretary of Agriculture upon this point, said:

We can at least protest in behalf of the people we represent if you are endeavoring to put them out of business in industry or agriculture, either one.

The Secretary of Agriculture, protesting against such an interpretation of the proposed program, replied:

It seems to me, sir, that the essence of the "new deal," if I may be permitted to say it, is to take account of human rights. It would seem to me also that a man of the character of the President in administering powers of this sort would not be so inhuman as to retire in any barbarous way, such as you seem to contemplate, inefficient industries.

To meet the present world situation the first feasible step is to enable the Executive to enter upon a program of bargaining agreements with other nations. The very nature of international negotiation requires that it should be in the hands of the Executive; and to meet an international condition where foreign executives are being clothed with ever greater and greater power to effectuate speedy trade agreements, the United States, if it is to regain its lost proportion of world trade, must repose similar confidence in its President.

The proposed bill nevertheless does not remove from Congress its control of policy which must underlie every tariff adjustment. Although the exigencies of present-day conditions require that more and more of the details be left to Presidential determination, the Congress must and always will declare the policy to which the Executive gives effect.

ANALYSIS OF H.R. 8687

The bill under consideration adds to the present tariff law a new part, with a new title, namely the "Promotion of Foreign Trade." Its stated purpose is the expansion of foreign markets for the products of the United States. The means which it would use is the regulation of the admission of foreign goods into the United States in accordance with the characteristics and needs of American production in a way calculated to make the markets of other countries available for those branches of American production which are able to produce a surplus above domestic needs and hence are capable of supplying the needs of other countries.

CONGRESS DETERMINES THE POLICY-THE PRESIDENT EXECUTES THE POLICY OF CONGRESS

In order that this purpose may be carried out, in other words, in order that the policy declared by Congress may be appropriately executed, certain powers are accorded to the Executive branch of the Government, the President.

The official of the Government who represents all the people, having the entire United States as his constituency, is given the responsibility for carrying out the will of Congress. This is the appropriate method in a government that exists of, by, and for the people.

The bill sets up a definite criterion for Presidential action

Whenever he finds that any existing duties or other import restrictions are unduly burdening and restricting the foreign trade of the United Statesor that the purpose declared by the act will be promoted by the use of the powers which the act confers. These powers are:

1. To enter into foreign-trade agreements with foreign governments or instrumentalities thereof; and

2. To proclaim such modifications of existing duties and other restrictions or such additional import restrictions, or such continuance, and for such minimum