the United States to Mexico, the hearing we are attending today, are other creative attempts to encourage foreign trade.

Gentlemen, it is true that not all of us in the League of Women Voters are trade experts, but we are, I believe, well-informed trade amateurs. Many of us are wives of businessmen, manufacturers, farmers, workers, or have our own businesses. Some of us have been adversely affected by losing business in the United States to foreign. competitors, or by losing foreign markets to competitors abroad, either because of foreign government regulations or for other reasons. Many of us lived through the period when the Smoot-Hawley Act legalized such high tariffs that the United States bought little from abroad and concentrated on "buying American" goods.

Well, we have studied this complex issue of trade with great diligence and in depth. We know that the Smoot-Hawley tariffs did not work. We know that "buy American" provision do not work because they create parallel buy-German or buy-French or buy-Japanese laws, and these in turn cut down our exports. We know that trade is a two-way street on which American dollars and goods have to travel both ways because no nation is self-sufficient in all the goods it needs for modern life, and without foreign exchange one does not have the currency with which to purchase the foreign goods one needs. The United States, like other nations, has to buy and has to sell.

We know that trading abroad is full of problems. But we know, too, that American businessmen, farmers, labor unions, and manufacturers are inventive and competitive. If markets close in one direction, we are confident that they are capable of opening markets somewhere else. If a foreign competitor challenges them, we are confident that they are capable of beating him at his own game if they want to, with better servicing or better packaging, or better research. May I add here, for example, that we do find a good many cases as we study American business which simply do not wish to compete or do not wish to export; not only the examples you have given this morning, that they find it difficult to get involved in the redtape, but also a certain mentality that the American market is big enough and there just isn't any need to go to the extra effort of trying to find foreign markets.

The Common Market, for example, is not the only area with which we trade. We already have large volumes of trade with Canada and Japan. We trade with the nations of the European Free Trade Association, with Africa, the Middle East, Asia. At the moment we meet here, Mr. Christian Herter and a team of Americans are meeting in Geneva with representatives of the 50 nations who belong to the General Agreement on Tariffs and Trade, plus observers from 23 other nations, discussing the possible reduction of tariffs, import quotas, and other obstacles to trade.

We of the League of Women Voters are delighted that your committee is holding the hearings here and in San Francisco on expanding west coast trade with the Pacific coast area-by which we assume that you mean Mexico, Central America, and Latin American nations fronting on the Pacific as well as the nations and islands west of us across the Pacific. We thoroughly agree with a statement made earlier by Senator Engle that trade in the Pacific area can be increased. The role of California in foreign trade is already vital. Statistics

22-289-63-7

released last week by the San Francisco World Trade Authority and World Trade Association reveal that California topped all States last year in exports: almost $2 billion worth, providing nearly 400,000 jobs. California ranked second in imports. In our seaports, where every ton of cargo produced $15 in new purchasing power, one dollar out of every three in circulation was directly related to world trade. Any increase in Pacific area trade will logically redound to the benefit of west coast ports with their many service industries of packaging, transshipping, storing, transporting, insuring. Exports through the San Diego and Los Angeles customs districts alone have risen from $458,293,900 in 1958 to $585,760,363 in 1962; while imports through the same two customs districts have risen from $546,662,196 in 1958 to $902,730,244 in 1962. More imports than exports pass through these two customs districts. In San Francisco, and in the States of Oregon and Washington, the reverse is true-more exports pass through their customs districts than imports. These figures are taken from a U.S. Department of Commerce release of April 8, 1963.

According to an editorial in yesterday's Los Angeles Times

World trade has increased more than 400 percent at local seaports in the last 10 years, and has risen 27.5 percent at International Airport in a single year. Now let me hasten to add that as good League of Women Voters members we are interested not just in what is good for California, we are also concerned with what is good for the United States. For the United States as a whole in recent years, exports of merchandise, exclusive of military expenditures, have exceeded imports by several billion dollars. In 1961 the total excess was $5,400 million, a sizable redress to an unfavorable balance of payments.

Certainly, increased U.S.-Pacific area trade will redound to the benefit of the United States as a whole, by expanding opportunities for consumer choice among a wide variety of products at home, by locating new markets for American goods abroad, by stimulating economic growth at home and abroad.

In this connection, we league members are convinced that the economic health and stability of the United States are closely linked with the economic health and stability of other nations. We consider that economic aid by the United States and by other developed countries is essential to help less developed nations. Without such aid they cannot establish the infrastructure on which to build their own industrialization, their own development. The market potential for agricultural products, a prime export field for California, is enormous, but without aid and trade, the less developed nations cannot raise their standard of living or their foreign exchange to the point where they can purchase what they need. Take for example Japan, which no longer needs aid; Japan has become an enormous purchaser of California cotton, tallow, oilseeds, raw hides and skins, and processed food products.

Actually, the more underdeveloped nations industrialize, the better trading partners they will be for us. Take the example of Pakistan, still an aid receiver. In 1952 Pakistan exported from the United States about 150 million rupees worth-about $31 million. By 1959, Pakistan's exports to the United States had risen to some 160 million rupees-about $33 million; her imports from the United States had risen to just under 400 million rupees worth of goods-about $80

million. These figures are from a Bank of America report on Pakistan of July 1961. The World Almanac for 1963 shows that Pakistan exported to the United States in 1961 $37 million worth and imported from the United States $195 million worth of goods.

May I, in conclusion, recapitulate the trade position of the League of Women Voters :

1. We support trade liberalization and systematic reduction of trade barriers.

2. We support private investment in developing countries, such as those of the Pacific area, and private enterprise as a part of foreign trade.

3. We support Government tariff bargaining across the board by categories rather than item by item.

4. We want the Government to continue multilateral trade negotiations through GATT, and to continue to apply the most-favorednation principle in those negotiations.

5. However, we consider that special trade concessions may be necessary for the developing nations for limited periods of time..

6. We support trade adjustment assistance domestically, and

7. We are hopeful that customs procedures may be simplifiedthese being, in our opinion, one of the most overlooked and most useful. means of stimulating trade.

Thank you for having given us this opportunity to appear before you and to state our views.

Senator ENGLE. Mrs. Neumann, this is an excellent statement. I will hereby qualify you as a trade expert rather than a well-informed trade amateur.

Mrs. NEUMANN. Thank you.

Senator ENGLE. Because your statement certainly shows an extensive knowledge of this subject and also some very fine and careful research in support of the position that you have taken.

I might say in reference to the observation you make on page 2, in which 66* * * you say we must assume that you mean Mexico, Central America, and Latin American nations fronting on the Pacific as well as the nations and islands west of us across the Pacific," and I certainly do. I consider the whole complex as a part of what I call the Pacific Lake.

I think the figures given here on the Los Angeles areas are quite interesting with reference to our two customs districts down here. I hadn't realized the figures were that high or that the differential was that extensive.

Mrs. NEUMANN. They include, sir, the airport and postal imports and exports, as well as the waterborne.

Senator ENGLE. Oh, yes. Of course, the figure you give on Pakistan is a classic illustration, as well as Japan, of what happens when these nations get an ability to get into the market. Pakistan is a particularly dramatic one.

I observed another recommendation that you have made, which I am interested in, and that is No. 2, in which you support private investment in developing countries, such as those in the Pacific area, in private enterprise as part of foreign trade.

Our hearings clearly indicated that we didn't lose business by putting our people into these other countries. As a matter of fact,

one group came before us and testified that it was either a quarter or a third of the total production in man-hours of the plant here in this country was utilized in supplying parts and whatnot for the subsidiary plant which had been set up in South America. In addition to that, we export our technology and our managerial know-how on a very extensive basis.

One of the things, of course, that concerns us about the Common Market, if the Common Market turns inwardly and creates barriers, we are going to have a great many companies going over the fence and trying to get in behind that barrier. Now, that is one thing that has been of some concern to our people. I hope that in these current negotiations that we will prevail in getting a broader concept of what the Common Market ought to be than evidently Mr. de Gaulle thinks at the present time.

Mrs. NEUMANN. Could I add a statement?

Senator ENGLE. Yes.

Mrs. NEUMANN. A mention there on this problem of private enterprise: This, of course, concerned us a great deal too because of the charges that so much capital was going out of the country and staying out. But as we explored the situation we found that after a period of 3 years, between 3 to 5 years after the capital went out, large returns began to come back to the United States, in accord with what you were quoting. Of course, lots and lots of American companies have alreary gone into the Common Market; both the Dutch and the Belgian Governments have information offices in New York trying to get American companies interested in settling in their countries.

There are, I think, at least 400 American firms in Belgium alone, so that they are already within the walls, you might say.

Senator ENGLE. The last time I traveled through South America I tried to convince those countries and their leaders that they ought to set up rules in their country that would permit the investment of foreign capital, because there just isn't enough money around to do the development job that needs to be done in South America now under the Alliance for Progress. They have to encourage private development. Instead of that, the opposite is taking place. The money is taken off, including their own. I said to them, "Why don't you arrange to encourage private investment to come in, by giving some kind of guarantees against expropriation and all that kind of thing and permitting reasonable rules for the repatriation of profits and eventually of capital?"

I am not suggesting that we ought to go over there and colonialize those areas. I have suggested to our own business people that the smart way to do it is to include within the organization set up in a foreign country stock ownership and management people of the country in which the business is located, and when they do that, like Kaiser did-and what is that other big store that operates down there?

Mrs. NEUMANN. Sears, Roebuck?

Senator ENGLES. One in Caracas-amazing what they were able to do. It seems to me that Kaiser, or somebody, was selling jeeps down there, and every time they sold a jeep they gave them one

share of stock. You would be surprised at the number of stockholders they had around among the local people, all thinking that that is the greatest outfit that ever operated in South America.

But that is the kind of thing that can be very helpful to us and very helpful to them, and it gets them up on the levels that we are talking about where they can do business with it.

At any rate, I am glad to observe that I find myself in agreement with the League of Women Voters again.

Senator Cannon.

Senator CANNON. Thank you, Mr. Chairman.

Mrs. Neumann, I want to join Senator Engle in complimenting you for the very fine statement that you presented here. I know it will be very helpful, and I am certainly happy to see the fine recommendations in the position that the League has now taken on this.

Mrs. NEUMANN. Thank you very much.

Senator ENGLE. The committee will stand in recess until 2 o'clock this afternoon.

(Whereupon, at 12 noon, the committee recessed, to reconvene at 2 p.m. of the same day.)

AFTERNOON SESSION

Senator ENGLE. The committee will be in order for the further hearings on the Pacific trade matter.

Our next witness is Mr. Walter P. Coombs, executive director of the Los Angeles World Affairs Council, 612 South Flower Street, Los Angeles, Calif.

Mr. Coombs, are you prepared to go ahead?

STATEMENT OF WALTER P. COOMBS, EXECUTIVE DIRECTOR, LOS ANGELES WORLD AFFAIRS COUNCIL

Mr. COOMBS. Yes, sir.

Senator ENGLE. Do you have a prepared statement?
Mr. COOMBS. Yes.

Senator ENGLE. Do you want to read it?

Mr. COOMBS. Yes. Fortunately it is very brief.

Senator ENGLE. Very well. Go right ahead. We are delighted to have you with us and pleased that the Los Angeles World Affairs Council has taken an interest in this matter.

Mr. COOMBS. Thank you.

I am delighted to have this opportunity to appear before the committee and I wish to express my appreciation to you for coming to California for these important hearings on trade patterns in the Pacific area.

As you know, this week is World Trade Week, proclaimed by the President of the United States, to inform the public of the increasing necessity of world trade. Your committee's deliberations are most timely.

I should add that the citizens of this area, I am sure, are well aware of the interest of Senator Engle in these important topics, as well as Senator Cannon.

The members of the Los Angeles World Affairs Council have long been interested and concerned with the problems of world trade. Indeed we are concerned and interested in our country's relations with

1