many specialties and novelties and curios, they want to buy guns and ammunition. That is the whole proposition.

Senator VANDENBERG. I quite agree and that is what I had in mind. It seems to me that with war conditions pretty much in control of the external world, it is impossible to respond as categorically as you did to my question about our being the beneficiary of every trade advantage that every country gives to every other country than ourselves.

Secretary HULL. I thought you assumed the war and the war situation would be taken judicial notice of by everybody.

Senator VANDENBERG. How many bilateral agreements have been made, let us say, since 1935 when this act went into effect? How many bilateral agreements have been made between other countries do you know?

Secretary HULL. There has been a report circulated around here for some days—possibly by somebody who came on the witness stand or somebody who belongs to the lobby that frequents the dark places in the capital always circulating some kind of a report. I don't know where it originated, but it was that so many hundred bilateral treaties had been made within a given time, and that that was something of tremendous import. I think that it was shown in the testimony of Mr. Fox, of the Tariff Commission, who is as fair and as competent a man as I have seen during my stay around Washington, how utterly unimportant and insignificant those agreements were. Most of them did not deal with tariffs. Sometimes they would relate to one or two words of some treaty or some other relationship between two countries, but generally speaking, most all of them did not come really within the category of what you and I are thinking about.

Senator VANDENBERG. How about barter agreements; have there been many direct barter agreements within the last 3 or 4 years?

Secretary HULL. There have been a number here and there. As I say, you have the post-war economic practices of the nations to eliminate largely all kind of sound, healthy commerce, and each nation undertakes now and then to put over a barter transaction. That reduces the sum total of trade and hamstrings it and makes it impossible to revive the normal practices of commercial nations.

Senator VANDENBERG. Are barter agreements out of sympathy and out of harmony with the reciprocal trade treaty theory?

Secretary HULL. Not in a reasonable number of instances, and not to the extent of weakening and breaking down the broad program which contemplates the restoration, as I say, of the triangular and multilateral trade and of those processes which alone will make it possible to restore this normal situation. Some of the governments that stand for autarchy and nothing else stand for the bilateral method and nothing else.

Senator VANDENBERG. Is there anything inconsistent between our barter agreements with England and with China and with our reciprocal trade treaty program and our unconditional most-favored-nation theory?

Secretary HULL. I was trying to make that clear in my statement. During the post-war peirod, the nations generally followed policies of ever-narrowing economic nationalism. They shut off in every possible way imports and, of course, they could not have enough barter transactions to keep up a balance between production and distribu

tion. The result was that all of the nations found themselves loaded to the guard with burdensome surpluses and nowhere to dispose of them. That was the result of the exclusive bilateral methods, with an occasional bartering transaction thrown in. We said that that is breaking down and disrupting the whole situation and badly reducing the standards of living and employment in all nations. So we proposed the only method that we could find.

You may recall that all of us in both Houses of Congress modified our views as to the best methods of attacking this unprecedented condition of collapse that followed 1929 and 1931. And this broader formula, which was based on the principle of equality of treatment and friendly arrangements among the countries for the opening of the channels of multilateral trade of all kinds, offered the only way out. The more that the question is studied, the more I believe that you and I and others like us will agree on it. It is only a question of attacking this terrific condition and making some progress in dealing with it.

You may recall that we all had a controversy through the twenties about the progress of what we call extreme economic nationalism, and about its significance and effects. Finally, when the collapse came, every sort of method was suggested by somebody here or there in both political parties in Congress. But when we got down to facing this highly developed state of chaos in 1933 and 1934, we found, after reviewing the methods of every statesman in both political parties who suggested or talked about it during the twenties or the early thirties, that this was the only possible way to make any progress. We followed the decisions of the courts affirming the validity of the flexible clauses in the Fordney Act and in the Smoot-Hawley Act. We followed them and, of course, if we could have made any further improvement on any agency of government for the temporary attacking of this extreme emergency economic situation, we would have done so. We would have welcomed any suggestion from anybody. Senator VANDENBERG. I think your answers prove the complexity of the problem.

Secretary HULL. Yes.

Senator VANDENBERG. It is a thing that has challenged us. Secretary HULL. You may remember that President Hoover vetoed some kind of a bill that the Democrats got up in 1932. He vetoed it on the ground that it was not feasible in that emergency situation for the two Houses of Congress to conduct trade agreements, at least for the time being. So that illustrates what you are saying about the complexity and the rapidly changing conditions that were going on and the desperate search for remedies of a temporary nature. Senator VANDENBERG. It seems to me it is so complex-it sometimes seems to me that it is so complex-that we overrationalize it when we try to meet it solely with a reciprocal trade treaty program. Secretary HULL. Well, nobody else has suggested anything else, Senator.

Senator VANDENBERG. Well, instead of

Secretary HULL (continuing). I lie awake at night hoping that some statesman will send me a message giving me some improvement on this.

Senator VANDENBERG. I am afraid whether or not it came from a statesman would depend upon whether or not you agreed with the suggestion, Mr. Hull.

Secretary HULL. Well, any impressive statesman-and he can be the judge of that as well as myself-is welcome to offer a suggestion. Senator VANDENBERG. Is there anything inconsistent with respect to the policy of the State Department with respect to reciprocal trade treaties and the Department of Agriculture in paying export subsidies and in operating the Federal Surplus Commodities Corporation to buy surpluses to which the State Department is contributing with tariff reductions?

Secretary HULL. Nothing remotely basic or fundamental. It is a part of the desperate efforts of each to try to make a contribution to a most difficult situation, and I sometimes wonder whether or not as the world is swinging on through pitch darkness, with every kind of difficulty and danger presenting themselves, just how much time we should give to the minute details of our efforts to get out of a most terriffic emergency.

Senator VANDENBERG. Let me ask you just one extremely sordid question in conclusion: Have you any estimate of the amount of revenue of which the Treasury has been deprived as a result of tariff reductions under the reciprocal-trade agreements?

Secretary HULL. I think the revenue from custom receipts was better in 1939 than the year before.

Senator VANDENBERG. How much still greater would they have been if the rates had not been reduced on the same volume of imports? Secretary HULL. Well, I recall that a large part of the customs receipts under the Smoot-Hawley Act were derived from imports coming in under rates that averaged 75 percent. So if you pursue the question of the amount of customs receipts too far, you will reach a point where imports are subject to the very high rates that contributed so much to retaliation against us by all the other nations, and the bringing on of this catastrophe to which we sometimes refer.

Senator VANDENBERG. I have seen the figure $113,000,000, and I was wondering where it came from or how it was arrived at.

Secretary HULL. I believe some of those lobbyists started it. I never heard it.

Senator VANDENBERG. What would you do without lobbyists, Mr. Secretary, to blame things on?

Senator KING. I would like to ask one question.

The CHAIRMAN. Senator King.

Senator KING. You have just alluded to the fact that the world today is in a condition of pitch darkness. Undoubtedly there is a great deal of confusion as a result of the almost universal war. Don't you think, Mr. Secretary, that it might be wise to pretermit the further consideration of this question until there is a little more sanity in the world as these war clouds are largely dissipated?

Secretary HULL. I think if Moses had kept secret from his followers what a wonderful place there was over beyond that big mountain, they never would have been interested in crossing the Red Sea. I believe in having some objective, especially when it is so all-important. Senator KING. Do you think you can see the Promised Land in this pitch darkness?

Secretary HULL. I am talking now about economics.

Senator KING. You have brought in the Promised Land.

Secretary HULL. What I am trying to get over is this: I think that today there are 25,000,000 of the most able-bodied persons in

other parts of the world under arms. And that does not include reserves by the millions that are in training. It will take two to three persons at least in nonmilitary employment to provide for them. So that we have today probably not less than 80,000,000 of the most able-bodied persons doing nothing but participating in military operations. In the meantime, production of all of the worth-while things-the things people need to wear and to eat in order to have some sort of a standard above that of utter distress and privation-the production of those things in most parts of the world is hopelessly neglected on account of war production and the prosecution of the war. And nobody is thinking seriously how this 80,000,000 persons will be transferred back into civil employment. That is just one of the little problems that is coming on ahead of us, if we are not very mindful. But unless some nation keeps alive the basic program that will point the way to employment and higher standards of living and creation of purchasing power, the world will go right back over the same road it went and over the same economic Niagara over which it went during the twenties.

Senator KING. Mr. Secretary, you are undoubtedly familiar with the Latin maxim that war makes law silent, and in view of the vicissitudes of the war and the uncertainty of what the outcome may be or will be and the economic and political conditions and industrial conditions which will follow, it would seem that there is some reason in the assumption that it might be wise to pretermit as I mentioned a moment ago, the continuation of this question until we get out of this darkness and get some daylight. It is pretty difficult now to formulate a policy that will meet the post-war conditions.

Secretary HULL. I appreciate what you say, and a number of people have advised me quite strongly last fall to keep away from this situation, just announce that it is suspended indefinitely, that the war is on and the act has expired and keep away from it. I said that that would leave leadership in the whole economic situation to those who practice autarchy and economic totalitarianism or are being dragged in that direction, and that it is all-important for us to have an agency that can safeguard and facilitate our trade interests during the war. For instance, as you know, there are meetings all the time by other countries making some little war restrictions on trade. It may affect us very seriously, either temporarily or for a long time after the war. While the world is in this chaotic situation because of the increasing number of restrictions, there is all the more of an emergency in our relation to it.

If we announce that we have abandoned the matter, as I said in my manuscript, that will be taken by everybody at home and in every other nation as a complete abandonment of any trade policy or commercial policy, except the narrow policy which was so disastrous to all the nations at the end of the 10-year period after the war.

We would be in a most unfortunate position if, when the war ends. and a peace conference meets, we should send word to it that we had not maintained a broad basic economic policy for recovery, but that our Government had just abandoned it permanently or indefinitely, and therefore we would not have any suggestion to make. The forces of autarchy and totalitarianism in economics would be in supreme control. That is a very serious thing. The point is that the reaction on our domestic situation, if we pursue after the war that narrow

course, would be just as destructive as it was at the end of the 10-year period after the last war.

Senator KING. Mr. Secretary, I would not mention the fact about the totalitarian states except that you mentioned it, but it seems to me that if the democratic forces win in this war, we need have no fear of the failure to adopt a reasonable and rational economic international policy. If the totalitarian states win, if Stalin and Hitler win and the totalitarian states win, they will pay no attention to us, but they will impose upon their victims such policies, economic and otherwise, as they desire, without reference to us, and we will have little voice in the determination of the post-war policies.

Secretary HULL. I beg your pardon. I did not make myself understood. I did not intend to refer to the totalitarian countries as such. I was referring to economic totalitarianism, where a nation undertakes to pursue an ever-narrowing course of having virtually no imports whatever and regimenting itself to the hilt as it goes forward with that policy.

The CHAIRMAN. Senator Lodge?

Senator BARKLEY. I have to get on the floor, and so may I ask the Secretary a question before I leave?

Senator KING. Mr. Chairman, the Monopoly Committee is in session, and I have to go there.

Secretary HULL. I do not know anyone that I would so much dislike to see leave.

Senator BARKLEY. In regard to this very matter you have been discussing with Senator King, regardless even of whether a country is a totalitarian or a democratic country, the urge to become selfsufficient after this war would be no less than it was after the last one, and it may be even greater, which would lead to commercial policies which might be detrimental not only to our exports, but to the world situation, is that true?

Secretary HULL. That is true. If I may add in that connection, back in former periods, this young country, largely undeveloped, could stand almost any kind of punishment as the result of unsound economic policies. We would produce a little surplus in one line or another and let European countries, acting as our brokers, sell it and take their profits, while we went along in a happy and easy fashion. But we are living in a new period now. Nothing is more absurd than for a nation to sit down, for instance, and indulge in unilateral tariff practices and policies that were pursued by both political parties until we got into a situation of economic collapse. That is why we evolved this program to discourage attempts at complete self-containment, that is, to discourage going too far. That was enough to turn the tide away from the 10-year regime of increasing economic nationalism that culminated in the early thirties in economic disaster.

Senator BARKLEY. Even assuming that to some extent war will suspend the complete operation of these trade agreements even where they exist, your theory is that their maintenance and continuance to operate as a toehold after the war is over, which we can use and which the world can use as a basis from which to make further progress, and that it would be infinitely better to keep them alive than to have the whole program collapse and have to start from scratch again.

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