Its Everyones Business

PUBLIC hearings began before the Committee for Reciprocity Information on May 24, 1950, for the purpose of unearthing data and opinion that will be helpful in the forthcoming reciprocal tariff and other trade-barrier negotiations at Torquay, England, on September 28th of this year. The conference this fall will constitute the "third round" of tariff negotiations under the General Agreement on Tariffs and Trade concluded at Geneva in 1947. The United States plans to negotiate with 17 other countries on possible tariff modifications on various articles all the way from baby carriages and bottle caps to lead and zinc-bearing ores. On May 31, June 1 and June 2, spokesmen appeared before the Committee for Reciprocity Information on behalf of the domestic lead and zinc mining industries. Producers of these metals protested the inclusion of paragraphs 391 (lead-bearing ores, dust and mattes), 392 (lead bullion, lead in pigs and bars, and scrap lead), 393 (zinc-bearing ores of all kinds), and 394 (zinc in blocks, pigs or slabs, and zinc dust) of the Tariff Act of 1930, as amended in the list of articles to be considered for possible tariff concessions at Torquay. It was pointed out that although operating costs have more than doubled since 1939 tariffs on these metals were actually higher in that year than at present. This, coupled with the detrimental effects of the recent series of devaluations, has sounded the death knell for a substantial number of domestic lead and zinc mines-a most undesirable development in the face of the ominous international situation, according to these spokesmen. It was urged that higher rather than lower tariff rates are needed on these metals. The opinion was expressed that it was inconsistent to foster a high living standard in our western areas and then, once it is attained, to undermine that condition by minimizing the protection that was partly responsible for it. The main theme of some arguments implied that although every effort should be made to close the "dollar gap" abroad, serious consideration must be given the methods employed lest our national security position be jeopardized in the process. The House Committee on Foreign Affairs completed hearings on H. J. Res. 236, to provide for United States membership and participation in the International Trade Organization. Hearings began on April 19th and ran for over five weeks. Many witnesses from industry and government presented voluminous testimony, which will not be available for public distribution for several weeks. However, it is no secret that the most controversial provisions of the Draft Charter of the ITO are: (1) Article 17 (Chapter IV on Commercial Policy) which would obligate members to negotiate for the reduction of tariffs and the elimination of trade preferences; (2) Article 20 which would prohibit the use of quantitative restrictions for protective purposes; (3) Article 16 which promulgates rules to implement the principle of non-discrimination in international trade; and (4) provisions permitting the use of protective measures for promoting economic development, particularly in backward areas, even though such provisions are inconsistent with those of the three articles cited above. United States membership in the International Trade Organization is essential to the successful operation of that body in view of this country's position as the economic giant in the present international trade pattern. Many countries are reluctant to take any action toward the ratification of the charter until it is known what course America will pursue. However desirable or undesirable the ideal of free multilateral trade may be it is unlikely that this Government's participation in the ITO will materialize soon. Advices in Washington indicate that H. J. Res. 236 will not be enacted during the present session of Congress. The legislative pattern designed to secure Congressional approval of the ITO is similar to that of the St. Lawrence Seaway project. The Seaway project was pending in treaty form for several years before the Foreign Relations Committee of the Senate and when the Administration decided to incorporate this project into bill form it was found that, while it passed the House promptly, the Senate decided to pigeonhole it because of the obvious intent to circumvent the constitutional prerogative of the Senate to advise and consent to the ratification of treaties. The ITO bill may be slated for a similar fate. It is deemed essential by western Senators and Congressmen that the present session of Congress enact some form of mining legislation before its adjournment, now set for July 31st. These legislators from prominent ore-producing states do not desire to return to their home areas in the fall emptyhanded. Aside from that, it is entirely superfluous to reiterate the necessity for maintaining a healthy domestic mining industry as a bulwark against a sharp rise in the temperature of the "cold war". Now that S. 2105 has failed a new bill is taking shape in the Senate Interior and Insular Affairs Committee. It is similar in language to H. R. 8221 (to encourage the conservation and development of the mineral resources of the United States) reported by the House Public Lands Committee on May 3, 1950, but so far has failed to receive approval of the House Committee on Rules. There are some qualified observers in high circles in Washington as well as in the mining industry who favor a tax incentive program to stimulate investment in mining enterprises, as opposed to a conservation and exploration program. The Bureau of Mines and the Treasury Department have undertaken a joint study to determine the need for modification of the tax laws as they apply to mining. The study is scheduled for completion before the end of the year, and appears to be supplementary to the investigation initiated by the National Minerals Advisory Council which culminated in the submittal of recommendations to the Secretary of the Interior in December 1949. The "cold war" is largely responsible for the increased demand for metals. Stock-pile purchases and heavy industrial demand due to military needs distort markets and disrupt normal price trends. Such activity has an unhealthy influence on metal production, luring some producers into a state of dependency on the continuation of this condition. When stock-pile objectives are met sometime in the future purchases must then come to a halt unless international "fireworks" are touched off. It can only be hoped that technological improvements and further mechanization of mines coupled with the stimulus of a rising population will offset the anticipated drop in industrial demand and cessation of stockpile purchases when the international crisis abates.