Thank you very much for your statement. We know you are a busy man, and we appreciate your taking the time to come here.

Senator BARTLETT. Thank you.

Senator ENGLE. Our next witness will be Mr. James P. Wilson, manager of the World Trade Department, San Francisco Chamber of Commerce, and executive secretary of the San Francisco Area World Trade Association, accompanied by Mr. Lester Goodman, president of the San Francisco Area World Trade Association and chairman of Getz Bros. & Co., Inc.

We are very happy to have you here, gentlemen, and to hear your testimony.

Mr. GOODMAN. I was only advised about this meeting late yesterday and, unfortunately, did not have much time to prepare statistics for you. I might sound a little belligerent but I don't mean to be; I mean to be constructive. So I ask you to use your intelligence and your knowledge in connection with any belligerence my statement might have in its source, because I have very strong feelings on this subject. Senator ENGLE. You have such a kind face that I don't think you could be belligerent.

STATEMENT OF JAMES P. WILSON, MANAGER, WORLD TRADE DEPARTMENT, SAN FRANCISCO CHAMBER OF COMMERCE, AND EXECUTIVE SECRETARY OF THE SAN FRANCISCO AREA WORLD TRADE ASSOCIATION; ACCOMPANIED BY LESTER GOODMAN, PRESIDENT OF THE SAN FRANCISCO AREA WORLD TRADE ASSOCIATION AND CHAIRMAN OF GETZ BROS. & CO., INC., SAN FRANCISCO, CALIF.

Mr. GOODMAN. I am Lester Goodman, president of the San Francisco Area World Trade Association, which is affiliated to the San Francisco Chamber of Commerce. I am chairman of Getz Bros. & Co., Inc., one of the principal international tradinghouses of this country, with headquarters in San Francisco. I have spent the major portion of my adult life in this field and have both lived and worked in the orient. I have just returned from one of my regular business trips throughout eastern Asia.

I have read with much interest the committee's hearings on "Pacific Trade Patterns" which were presented during August 28 and 29, 1962, at Washington, D.C., and I am pleased to have an opportunity to testify at this time.

At the outset, I would like to point out that Senator Engle, like most of us from the Pacific Western United States, feels that we know a great deal more about the Pacific and about Asia than do our colleagues who live on the Atlantic side of our country. Also, those of us who have been engaged in Pacific trade for so many years and who are dealing with problems in this area every minute of every working day, feel very strongly that there are a great many, shall we say, "pseudo experts," talking about this region. This is very unfortunate. It is my personal feeling that one of the reasons we have been far less successful in our foreign policies vis-a-vis Asia than vis-a-vis Europe has been that we have not developed enough experts and many times our Government has not called upon American citizens who are experts in Asian affairs, but have sent military and diplomatic officials

on missions to Asia. These may have understood some of the political ramifications of that area, but have not understood the general business and trade patterns of the Pacific and of Asia, nor, may I add, have they the same approach to the oriental mind that the business people have who live or have lived so many years with the indigenous population.

It is my understanding that the Committee on Commerce, for whom we have such great respect, particularly because both the committee and our world trade association have worked so closely together in promoting a more liberal trade policy, is interested in this case in finding out what has been done in the past to increase the flow of trade into the Pacific area and what more can be done at present and in the future to increase this trade.

If I may, I will not go into past history but will express some of my thoughts as to why our trade is not as vigorous in the Pacific

area as it is in the Atlantic area.

In the first place you don't take venture capital out into an area where the guarantees are much less firm than they are in certain other parts of the world. You don't trade in an area where the incentives are not as great as they could be. For example, you don't export as vigorously from this country as do our West German trading friends, because they receive an export bonus and we don't. Even our fine old China Trade Act is now obsolete.

In the Pacific area exporters are not given any benefits of taxation as they are under the Western Hemisphere Act. It seems to me that our allies should be given the same consideration whether they are in Asia or in Europe.

To do missionary work in creating trading possibilities s costly, but we are not subsidized through export bonuses, favored taxation, or any other incentives, and therefore the incentive to risk capital to do this type of work is not justified.

Certainly, we are anxious to trade and invest in the Pacific area, but the rewards are not as certain as they would be if we invested elsewhere. It is important that we, as a Nation, increase our exports so that our favorable balance of trade will be even more favorable, and will cover our somewhat extravagant military and aid outlays, but American businessmen and bankers are not missionaries. Trading on a worldwide basis is not child's play. These spoutings and pontifications from Federal and State officials to the effect that businessmen are for some reason timid or possibly stupid because they have not rushed into global markets just are not so. The American businessman would like to see a climate of trade on a global basis which would be no less favorable than that which the West German Government, for example, makes possible for her businessmen who operate worldwide. Thank you, Senators.

Senator ENGLE. That is a very good statement, Mr. Goodman. I would like to ask you just one or two questions if that is all right with you, unless you would prefer to make your statement first, Mr. Wilson. Mr. WILSON. Whatever you wish.

Senator ENGLE. Why don't you go ahead and deliver your statement and then we will ask questions of both of you.

Mr. WILSON. Thank you.

Before I proceed, I want to extend to Senator Engle not only my personal congratulations but the congratulations of the entire inter

national community on receiving the Foreign Trade Award. We know of no man who deserves it more, and we are delighted that it has come about.

Senator ENGLE. Thank you.

Mr. WILSON. Mr. Chairman, members of the San Francisco Area World Trade Association, an affiliate of the San Francisco Chamber of Commerce, deeply appreciate not only the hearings on the United States in world trade and the outstanding leadership given by the Committee on Commerce in support of the Trade Expansion Act and other matters, but are particularly pleased to have this opportunity to testify on the subject of "Pacific Trade Patterns" in hearings held on the west coast.

It is our understanding that the committee is not only interested in learning from these hearings what has been done to increase the flow of trade in the Pacific area, but, more importantly, what more can be done in this important area of the world.

It might be said, at the outset, that most businessmen in the Pacific. Western States wish that our capital, Washington, D.C., were geographically not so far away from this fastest developing area of the Nation, which includes California and Alaska, California being the No. 1 exporting State of the Nation. Due to the fact that history and geography have caused the Capital to be placed where it is, the hope of the businessmen in this part of the country has been that Washington will be more like the Roman god, Jamus, who had a capacity for looking in both directions. We feel, altogether too often, that Washington, being on the Atlantic, is overly concerned with the problems of the Atlantic and gives much less attention than is due to the Pacific and the factor that "the Pacific is a much larger lake than the Atlantic," as Will Rogers once told the testifier. Circling the Pacific are some of the oldest as well as some of the newest nation states and rich resources, both human and material, which require leadership of intelligence and of great ingenuity.

It will be my thought, therefore, not to look at the area historically but to project certain ideas as to what might be done in the near future to increase the flow of trade in this area which is so vital to the economic and political welfare of the United States.

It is only logical that projections with regard to Pacific trade patterns should be put forward in San Francisco because it is the city with the largest oriental population in the continental United States and has always been considered the American gateway to the Pacific. It is also the birthplace of the United Nations, as we all know, as well as of many of the basic ideas which went into the formulation of the original trade agreement programs of the United States which have, over the years, been inculcated into the General Agreement on Tariffs and Trade.

Of the many ideas which have been put forward in recent months and years by the leaders in international business in the San Francisco area, one of the most interesting has been the concept of a Pacific Area Travel Association. This successful organization, commonly known as PATA, is one of the prime examples of how a region, such as the Pacific region, can organize to develop travel. Our basic proposal today is that careful consideration now be given to the formation of a Pacific regional organization to develop and expand trade. Over the past few months select committees of

the San Francisco Area World Trade Association, assisted by other world trade groups and by educational institutions, such as the School of World Business of San Francisco State College, have evolved a preliminary blueprint of an organization which it is believed would be of very material assistance in bringing about for trade what PATA has brought about for travel. It is an organization to be known as the Pacific Community, a Pan-Pacific association of business and cultural groups and individuals.

It is believed that it might well be for this large area of the world what the Atlantic Community is, shall we say, for the "smaller lake" that unites the eastern portion of this country with what one Russian leader once called "that little peninsula of Asia called Europe."

It has been suggested that the organization should be composed of both private and public groups, that is, of both companies and professional organizations as well as various governmental entities.

The Pacific Community would augment and assist local promotional and developmental efforts of the members and endeavor to find sources of capital for industrial expansion, trade, and cultural development. It would provide liaison between trade and transportation industries and all members of the community, carrying out advertising, promotional, and public measures calculated to focus attention of world business upon the Pacific as one of the globe's outstanding trade areas. It would encourage the promotion of adequate freight and passenger transportation services to and within the Pacific area and carry out statistical and research work relating to trade trends and industrial development for the members and, finally, it would negotiate with governments and with the United Nations, either directly or through appropriate bodies, for an easing of mandatory restrictions and other barriers to trade which tend to prevent maximum business development.

In the draft proposal setting forth the constitution of a Pacific Community, the foregoing objectives and purposes are presented as well as other provisions for the establishment and activation of the Pacific Community. It is respectfully requested that this draft proposal with regard to the constitution of the Pacific Community be included in this testimony before the Committee on Commerce of the U.S. Senate.

(Herewith follows the draft proposal of the constitution:)

[Draft proposal, May 22, 1963]

CONSTITUTION OF THE PACIFIC COMMUNITY

A PAN PACIFIC ASSOCIATION OF BUSINESS AND CULTURAL GROUPS AND

INDIVIDUALS

We, the undersigned, in order to form an Organization for the purpose hereunder stated, do hereby adopt the following constitution:

FIRST ARTICLE: The name of the Organization is THE PACIFIC COMMUNITY. SECOND ARTICLE: The objects or purposes to be transacted, promoted, or carried on by the Pacific Community are as follows:

1. To encourage and assist in the development of the economic and cultural activities throughout the Pacific area by :

(a) Providing an instrument for close collaboration among the various territories, countries and commercial companies concerned.

(b) Augmenting and assisting local promotional and development efforts of the members and sources of capital for industrial expansion, and trade and cultural development.

(c) Providing a liaison between the trade and transportation industries and all members.

(d) Carrying out advertising, promotional and publicity measures calculated to focus the attention of world business upon the Pacific as one of the world's outstanding trading areas.

(e) Encouraging the promotion of adequate passenger transportation services and facilties to and within the Pacific area.

(f) Carrying out statistical and research work relating to trade trends and industrial development for the benefit of the members.

(g) Negotiating with Governments whether directly or through the appropriate bodies for an easing of monetary regulations and trade barriers which tend to be barriers to increased business.

2. In the accomplishment of the foregoing objects and purposes there shall be equal opportunity for all to enjoy the facilities of the Pacific area without distinction as to race, color or creed.

3. So far as may be necessary or incidental to the carrying out of the foregoing objects and purposes, to receive, acquire, hold, own, mortgage, pledge and dispose of moneys, securities and any other property, real, personal or mixed, including the taking and holding thereof by governmental appropriation, gift, bequest, device, purchase, lease or otherwise and without limit as to amount or value except such as is now or may hereafter be prescribed by law. (Incorporation will be as an eleemosynary organization.)

4. To enter into, make, perform and carry out contracts of every kind for any of the object and purposes hereinbefore set forth, without limit as to amount, with any country, territory or other governmental unit or with any agency thereof or with any person, firm, association, corporation or other entity of any country, territory or other governmental unit; to have one or more offices in any part of the world.

5. To do all and everything necessary, suitable and proper for the carrying out of the objects of The Pacific Community provided that same be not inconsistent with the laws under which The Pacific Community is organized.

THIRD ARTICLE: The Pacific Community is to be conducted and operated not for profit, and the foregoing objects, purposes and powers are each and all subject to the limitation that no part of the net earnings of The Pacific Community, if any, shall inure to or be payable to or for the benefit of any member thereof.

FOURTH ARTICLE: The Pacific Community shall continue to exist so long as it carries out the functions for which it has been created.

FIFTH ARTICLE: The private property, income or assets of the individual members and officers of The Pacific Community shall not be subject to the payment of The Pacific Community's debts to any extent whatever.

SIXTH ARTICLE: All countries, territories, islands or political divisions as well as officially recognized world trade promotion and cultural organizations shall have the right to membership and the conditions of membership in The Pacific Community are as follows:

1. There shall be seven classes of members of The Pacific Community :

(a) Active Government members consisting of any official organization for the promotion of trade, industry and investment designated by the Government of any territory, island or political division wholly or partly in the Pacific area.

(The Pacific area is the area bounded by longitude 100 degrees east and longitude 70 degrees west, and between the North and South Poles.)

(b) Associate Government members consisting of any official organization for the promotion of trade, industry and investment designated by the Government of any territory, island or political division not in the Pacific area, as specified in paragraph (a).

(c) Active Business members consisting of any Chamber of Commerce recognized, registered or certificated economic organization serving the Pacific area or any part thereof.

(d) Associate Business members consisting of any Chamber of Commerce recognized, registered or certificated economic organizations, whose vehicles have a passenger capacity of 12 passengers or less, serving the Pacific area or any part thereof.

(e) Allied members consisting of retail business organizations, wholesalers, and cultural and scientific organizations.

(f) Associate members consisting of individuals who are interested in The Pacific Community, either commercially or culturally, who are not eligible for Active or Allied membership.

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