EXPORT ADMINISTRATION ACT AMENDMENTS OF 1979

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85-00003R000100030008-6
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 42
• Document Creation Date: December 21, 2016
• Document Release Date: October 27, 2008
• Sequence Number: 8
• Publication Date: September 18, 1979
• Content Type: OPEN SOURCE

II18?68
Livingston Oberstar Spellman
Lloyd Obey St Germain
Loaffiar Ottinger Stack
Long, La. Panetta Staggers
Long, Md. Patten Stanton
Lowry Patterson Stark
Lujan Perkins Steed
Luken Peyser Stenholm
Lundine Pickle Stokes
McClory Preyer Stratton
McCloskey Price Studds
McCormack Pritchard Swift
McDade Pursell Synar
McEwen Quayle Taylor
McHugh Rahall Thomas
McKay Railsback Thompson
McKinney Rangel Trailer
Madigan Ratchford Trible
Markey Regula Udall
Marks Reuss Ullman
Marlenea Rhodes Van Deerlin
Marriott Richmond Vander Jagt
Mathis Rinaldo Vanik
Matsui Ritter Vento
Mavroules Roberts Walgren -
ktazzoli Robinson Wempler
Mica Rodino Watkins
Michel Ron Waxman
Mikulski Rostenkowski Weiss
Mikva Roybal White
Mineta Royer Whitley
Minish Russo Whittaker
Mitchell, N.Y. Sabo Whitten
Moakley Santini Williams,
Mollohan Sawyer Williams,
Montgomery Scheuer Wilson, B
Murphy, W.Y. Sebelius Wilson, Tex.
Murphy, Pa. Seiberling Wolff
Murtha Shannon Wolpe
Myzro, Ind. Sharp Wright
Myers, Pay. Shelby Wyatt
Notch Shuster Wydler
Neal Simon Yates
Nedzi Skelton Yatron
CONGRESSIONAL R1ECORD-}OUSE September 18, 1979
Nelson sleek Young, Alaska
Nichols Smith; love Young, Fla.
Nolan Smith, Nebr. Young, Mo.
Nowak Snowe Zablocki
O'Brien Snyder Zeferetti
Oakar Solars
NAYS-71
Archz' Gooding Paul
Ashbrook Grisham Pease
Badham Hansen Petri
Bauman Holt Quillen
Broyhill Hughes Roth
Cheney Ichord Rudd
Collins, Ten. Jeffries Runnels
Courier Jones, Okla. Satterfield
Crane, Daniel Kelly Schroader
Crania, Philip Kindness Sensenbrenner
Daniel, Dan Kramer Shumway
Daniel, R. W. Lagomaraino Solomon
Dannameyer Lungran Spence
mcl%ard McDonald Stangeland
Daroincni Maguire Stockman
Devine Martin Stump
Dicks Mattox Symms
Downey Miller, Ohio Tauke
Edwards, 0h'.a. Moffett Volkmer
Erdahl Moore Walker
Evans, Ind. Moorhead, Weaver
Fenwica Calif, Whitahurst
Fountain Mottl Wirth
Gephardt Paehayan Wylie
NUT VOTING--28
Anderson, M. Frenzel Murphy, Ill.
Anthony Gibbons Pepper
Cartes' Goldwater Rose
Collins, Illy, Itegedorn Rosenthal
Conyers Holland Rousselot
Cormais Hollenbeck Stewart
De'_? ono Leach, La. Trean
;vans, Gz. Lott Winn
Flood Miller, Calif.
Ford, Mich. Mitchell. Md.
0 1430
The Clary announced the following
pairs:
Mr. Anthony with Mr. Rousselot.
Mr. ForC, of Michigan with Mr. Winn.
Ter. Leach of Louisiana with Mr. Hollen-
back.
Mr. Mitchell of Maryland with Mr. Lott.
Mr. Murphy of 8llinois With Mr. Gold-
water.
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Mr. Pepper with Mr. Hagedorn.
Mr. Rosenthal with Mr. Frenzel.
Mr. Rose with Mr. Comer.
Mr. Gibbons with Mr. Holland.
Mrs. Collins of Illinois with Mr. Miller of
California.
Mr. Conyers with Mr. Stewart.
Mr. Corman with Mr. Anderson of Illinois.
Mr. Evans of Georgia with Mr. Dellums.
Messrs. PEASE, G00DLING, ASH-
BROOK, FOUNTAIN, and KRAMER
changed their votes from "yea" to "nay."
So the bill was passed.
The result of the vote was announced
as above recorded.
A motion to reconsider was laid on the
table.
p 1440
GENERAL LEAVE
Mr. DUNCAN of Oregon. Mr. Speaker,
I ask unanimous consent that all Mem-
bers may have 5 legislative days in which
to revise and extend their remarks on
the bill, H.R. 4440, just passed.
The SPEAKER pro tempore. Is there
bjection to the request of the gentle-
an from Oregon?
There was no objection.
EXPORT ADMINISTRATION ACT
AMENDMENTS OF 1979
Mr. BINGHAM. Mr. Speaker, I move
that the House resolve Itself Into the
Committee of the Whole House on the
State of the Union for the 'further con-
sideration of the bill (H.R. 4034) to pro-
vide for continuation of authority to
regulate exports, and for other pur-
poses,
The SPEAKER pro tempore. The
question is on the motion offered by the
gentleman from New York (Mr. Bnao'
HAM) .
The motion was agreed to.
IN THE COMA TTEE OS THE WHOLE
Accordingly the House resolved Itself
into the Committee of the Whole House
on the State of the Union for the further
consideration of the bill, H.R. 4034, with
Mr. DANIELSON (Chairman pro tempore)
in the chair.
The Clerk read the title of the bill.
The CHAIRMAN pro tempore. When
the Committee of the Whole rose on.
Tuesday, September 11, 1979, the Clerk
had read through line 6, on page 40.
Are there any further amendments to
section 104?
Mr. BINGHAM. Mr. Chairman, I move
to strike the last word.
(Mr. BINGHAM asked was was given
permission to revise and extend his
remarks.)
Mr. BINGHAM. Mr. Chairman, we
have a little over 4 hours to complete
consideration of this important legisla-
tion.
It really is imperative that we finish
consideration of this bill today. The law
that we are extending by this legislation
expires the end of this month. If we do
not extend this, there will be no export
controls. I think we can do the job in
the next 43/4 hours if the Members will
exercise some degree of restraint. There
may be some amendments that they may
be willing to forego offering and simply
offer them in a pro forma way. I will
seek time limitations on certain amend-
ments I have discussed with the propo-
nents and the principal objectors. It
should be possible to allow reasonable
discussion of the major amendments.
So, I do plead with the Members to
cooperate. I think it is In the interest
of all of us that we finish this legislation
by 7 o'clock. We have been on it now
for a number of days at different times.
We have been shunted aside for what
appeared to be more urgent legislation.
Now, I think we do have the oppor-
tunity to finish up In a businesslike and'i
restrained way.
I would also appeal to the Members
not to call for record votes unless It
seems really essential to do so.
Mr. LAGOMARSINO. Mr. Chairman,
will the gentleman yield?
Mr. BINGHAM. I yield to the gentle-
man from California, the ranking mi-
nority member on the subcommittee.
Mr. LAGOMARSINO. I thank the gen-
tleman for yielding.
I want to join him in his plea to the
committee. I think that we have done
good work on the bill so far, and al-
though there obviously should be time
for a reasonable debate of the remaining
amendments, some of which are very im-
portant, I think that we can finish by
7 o'clock if some restraint is used.
I commend the gentleman for his
comments.
Mr.. McKINNEY. Mr. Chairman, will
the gentleman yield?
Mr. BINGHAM. I would be glad to
yield to the gentleman from Connecticut.
(Mr. MCKINNEY asked and was given
permission to revise and extend his re-
marks,)
Mr. McKINNEY. I thank the gentle-
man for yielding.
I would just like.to applaud the chair-
man for his remarks and state that I do
not think in my entire history in this
House of 9 years have I ever voted to
restrain, debate or time, but the chair-
man makes a very good argument.
This is an authorization about to ex-
pire.
Most of the issues we are going to dis-
cuss have been discussed at length many
times and voted on many times. I would
hope that the House would respect the
chairman's hard work and effort and
that we would try and get on with the
business of the House and get this bill
passed.
The CHAIRMAN pro tempore. Are
there further amendments to section
104? If not, the Clerk will read section
105.
The Clerk read as follows:
SHORT SUPPLY LICENSE ALLOCATION
SEC. 105. Section 7 of the Export Adminia-
tration Act of 1969, as redesignated by sec-
tion 104(a) of this Act, is amended in sub-
section (b) by, adding the following at the
end of pardiraph (1) : "Such factors shall
Include the extent to which a country en-
gages in equitable trade practices with re-
spect to United States goods and treats the
United States equitably in times of short
supply.".
The CHAIRMAN. Are there . any
amendments to section 105?
Mr. LAGOMARSINO. Mr. Chairman,
I move to strike the last word.
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September 18, 1.979 CONE S QNAL RECORD . ]HOUSE
to save Energy by reducing excess ca-
pacity i normal automobile travel. I
support
Another partant .program is the 55-
mile-per-ho enforcement effort.
The amen t proposed by the gen-
tleman is also tended to address both
energy conserva on and safety. The
but in fact it is na The impact that
this program inten to have is not
measurable immediatel but with proper
enforcement this is a situ a and effective
energy conservation tool d we will be
p able to realize that this ount was
worth its investment. The e orcement.
of the 55-mile-per-hour limi so far
has proved to be a necessary a d im-
portant program and I support it.
In relation to the amendments ro-
posed by my colleague for the safer -
system roads, I am inclined to suppo
it but I will prefer that the amount o
money appropriated for it be at the level
recommended by our colleague 'BILL
ALEXANDER. That is, instead of appro-
priating $40 million, we should appro-
priate $120 million. This is a more realis-
tic figure having in mind the importance
of this program. I also believe that the
intercity bus subsidy as well as the bus
terminal programs should be funded at
the levels that Mr. ALEXANDER has in
mind. That is, $15 million and $20 mil-
lion accordingly, not the $10 and $15
million that Mr. HOWARD believes should
be appropriated.
I also support and endorse the amend-
ments of Mr. HOWARD regarding the
highway beautification program, the
safety and information program, the
innovative safety grants program and
the transportation research centers.
These are all important programs and
I do not believe that by appropriating
the modest amounts recommended by
Mr. HOWARD we will be helping to in-
crease the rate inflation.
To conclude, I also support and en-
dorse the mass transit capital and the
mass transit operating assistance pro-
grams. The funding of these programs
will be helpful in supplying the capital
necessary for increased mass transit
ridership and to offset the new demand
for public transit ridership respectively.
All of the programs intended to be
benefltted by Mr. HOWARD'S amendments
could be classified by some as desirable
rather than essential. I am of the opin-
ion that they are essential since they are
all an integral part of our national
effort to improve our transportation
system.
I urge you to vote for it.
Mr. Chairman, I also rise in support of
the amendments offered to H.R. 4440 by
the gentleman from Arkansas to wit:
First, an increase to the .intercity bus
subsidy from the 0 the committee rec-
emmends to $15 million;
Second, an increase to the bus ter-
minal development program from the
0 the committee recommends to $20 mil-
lion; and
Third, to increase the funding for the
safer off-system road program-.better
known as SOS-from the $35 million, the
CC,Mmittee recommends to $120 million.
These amendments, as our colleague
states, undoubtedly attempt at least a
redress of -injustic. proposed for those
living in midsized cities, small towns and
rural communities in countryside areas.
These amendments, if adopted, would
maintain the bill still below the Presi=
dent's budget request and the first con-
current resolution level for transporta-
tion.
In particular, I have a great concern
and Interest in the SOS program, which
was designed to make existing mileage
safer, not to expand the road system.
This program should be preserved and
properly funded. Austerity, which is the
prevailing mood in Congress and one of
the concerns of the administration, has
led us to believe that a reduction of ex-
penditures and the elimination of some
Federal programs is the best approach
to solve the economic problems faced by
this Nation. I do not have any objection
to reductions or elimination of Federal
programs where it becomes necessary;
owever, during the hearings held by
e committee, considerable testimony
w received on the importance of this
pa icular program. There .is a clear in-
di ca 'on that the need for Federal as-
sistan is present and necessary and
that th SOS program should be pre-
served. hen the committee says that
$35 miIlio will enable the States to pro-
ceed with a most urgently needed high
priority saf improvements of system
roads in our ation, it is saying that a
drop in the bu et will fill it to the rim.
We are talking f a program that pro-
vides assistance - three quarters of our
Nation's highway twork at a time when
many safety impro ements are urgently
needed.
The amendments o red byMr. ALEX-
ANDER are realistic and eaningful. Local
road safety is essential) a local respon-
sibility. I am not quarr ng with the
fact nor saying that the F era) Govern-
ment should assume the to 1 responsi-
bility for the safety of those r ads. What
I am saying is that we have a esponsi-
bility in giving meaningful assi ante to
the States in order to suppleme t their
efforts in keeping their local roa safe
which in last resort are the backb a of
our main road system.
I urge you to support and vote fort se
amendments.
Thank you.o
Mr. DUNCAN of Oregon. Mr. Chair-
man, I move that the Committee do now
rise and report the bill back to the Douse
with sundry amendments, with the rec-
ommendation that the amendments be
agreed to and that the bill, as amended,
do pass.
The motion was agreed to.
Accordingly the Committe rose; and
the Speaker pro tempore (Mr. RosTEN-
Rowsxx) having assumed the chair,
Mr. STUDDS, Chairman of the Commit-
tee of the Whole House on the State of
the 'Union, reported that that Commit-
tee, having had under consideration the
bill (H.R. 4440) making appropriations
for the Department of Transportation
and related agencies for the fiscal year
ending September 30, 1980, and for other
purposes, had directed him to report the
bill back to the House with sundry
amendments, with the recommendation
8067
that the amendments be agreed to.and
that the bill, as amended, do pass.
The SPEAKER pro tempore. Without
objection, the previous question is or-
dered.
There was no objection.
The SPEAKER pro tempore. Is a sep-
arate vote demanded on any amend-
ment? If not, the Chair will put them
en gros.
The am^.endments were agreed to.
The SPEAKER pro tempore. The ques-
tion is on the engrossment and third
reading of the bill.
The bill was ordered to be engrossed
and read a third time, and was read the
third time.
The SPEAKER pro tempore. The ques-
tion is on the passage of the bill.
The question was taken; and the
Speaker pro tempore announced that the
ayes appeared to have it.
Mr. HANSEN. Mr. Speaker, on that I
demand the yeas and nays.
The yeas and nays were ordered.
The vote was taken by electronic de-
vice, and there were-yeas 335, nays 71,
not voting 28, as follows:
[Roll .Wo. 477]
YEAS-335
Abdnor
Addabbo
Akaka
Albosta
Alexander
Ambro
Anderson,
Calif.
Andrews, N.C.
Andrews,
N. Dak.
Annunzio
Applegate
Ashley
Aspin
Atkinson
AuCoin
Bafalis
Bailey
Baldus -
Barnard
Barnes
Beard, R.I.
Beard, Tenn.
Bedell
Bellenson
Benjamin
Bennett
Bereuter
Bethune
Bevill
Biaggi
Bingham
Blanchard
Boggs
Boland
Chisholm Glickman
Clausen Gonzalez
Clay Gore
Cleveland Gradison
Clinger Gramm
Coelho Grassley
Coln.,maai Gray
Conable Green
Conte Guarini
Corcoran Gudger
Cotter Guyer
Coughlin Hall, Ohio
D'Amours Hall, Tex.
Danielson Hamilton
Daschle Hammer-
Davis, Mich. Schmidt
Davis, S.C. Hance
de Is Garza Hanley
Derrick Harkin
Dickinson Harris
Diggs Harsha
Dingell Hawkina
Dixon Heckler
Dodd Hefner
Donnelly Heftel
Dornon Hightower
Dougherty Hillis
Drinan Hinson
Duncan, Oreg. Holtzman
Duncan, Tenn. Hopkins
Early Horton
Eckhardt Howard
Edgar- Hubbard
Edwards, Ala. Huckaby
Edwards, Calif. Hutto
Emery Hyde
English Ireland
Erlenborn Jacobs
Ertel Jeffords
er Evans, Del.
uard Fary
Brodhead
Brooks
Brown, Calif.
Brown, Ohio
Buchanan
Burgener
Fascell
Faaio
Ferraro
Findley
Fish
Fisher
Fithian
Flippo
Butler Fuqua
Byron Garcia
Campbell Gaydos
Carney Glaimo
Carr Gilman
Cavanaugh Gingrich
Chappell Ginn
Jenkins
Jenrette
Johnson, Calif.
Johnson, Colo.
Jones, N,q.
Jones, Teuh_
Kastenmeier
Karen
Kemp
Kildee
Kogovsek
Kostmayer
LaFalce
Latta
Leach, Iowa
Leath, Tex.
Lederer
Lee
Lehman
Leland
Lent
Levitas
Lewis
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September 18, 1979 CONGRESSIONAL RECORD - HOTJSE
(Mr. LAGOMARSINO asked and was
given permission to revise and extend his
remarks.)
Mr. LAGOMARSINO. At this point I
was going to offer two amendments, one
progiding for the Department of Com-
merce to establish its own time limits on
consideration of license applications
rather than retaining those suspense
dates in the bill and the other to give
Cocom the same flexibility in its con-
sideration of license applications that
Commerce has.
In the interest of time, I will not offer
my two amendments, but I do wish to
call to the attention of my colleagues my
concern that in an effort to expedite the
process we do not end up raising the
hopes of business only to have them fur-
ther frustrated when dealing with the
actual implementation of this legislation.
I believe the record should at least show
that in such a complex and important
issue as national security controls, allow-
ance should be made for flexibility in
dealing with both the concerns of those
who wish to insure our national security
and at the same time provide American
business the opportunity to have more
certainty brought to the export licensing
process.
Perhaps some of my concerns can be
taken care of in the conference com-
mittee.
Mr. BINGHAM. Mr. Chairman, will the
gentleman yield?
Mr. LAGOMARSINO. I yield to the
gentleman from New York.
Mr. BINGHAM. I thank the gentleman
for yielding.
I want to thank the gentleman for his
restraint, which I hope others will emu-
late in not offering their amendments.
I would like to say that as I have dis-
cussed with the gentleman, I do intend
that at the appropriate time to propose
an amendment to the effective date sec-
tion of the statute to give the adminis-
tration 9 months in which to get orga-
nized to put in effect the set of deadlines
that we propose in the legislation. It is
something that may take them some
time. They are doing it administratively,
but it does seem wise that they should
not have the impact of the law fora few
months until they can get organized to
do it.
. I will be proposing that amendment as
we get to the end of the bill where we
deal with the effective date of the law.
Mr. LAGOMARSINO. I certainly will
support the gentleman's amendment
when he offers it.
The CHAIRMAN pro tempore. Are
there further amendments to section
105? If not, the Clerk will read section
106.
The Clerk read as follows:
MONITORING OF EXPORTS
SEC. 106. Section 7 of the Export Admin-
istration Act of 1959. as redesignated by sec-
tion 104(a) of this Act, is amended by
amending paragraph (1) of subsection (c)
to read as follows:
"(c) (1) To effectuate the policy set forth
in section 3(2) (C) of this Act, the Secretary
shall monitor exports, and contracts for ex-
ports, of any good (other than a commodity
which is subject to the reporting require-
ments of section 812 of the Agricultural Act
of 1970) when the volume of such exports in
relation to domestic supply contributes, or
may contribute, to an increase in domestic
prices or a domestic shortage, and such price
increase, or shortage has, or may have, a
serious adverse impact on the economy or
any sector thereof. Any such monitoring
shall commence at a time adequate to assure
that the monitoring will, result in a data
base sufficient to enable policies to be de-
veloped, I. accordance with section 3(2) (C)
of this Act, to mitigate a short supply situa-
tion or serious inflationary price rise or, if
export controls are needed, to permit impo-
sitian of such controls in a timely manner.
Information which the Secretary requires to
be furnished in effecting such monitoring
shall be confidential, except as provided in
paragraph (2) of this subsection.".
Mr. BINGHAM (during the reading).
Mr. Chairman, I ask unanimous consent
that section 106 be considered as read,
printed in the RECORD,, and open to
amendment at any point.
The CHAIRMAN pro tempore. Is there
objection to the request of the gentle-
man from New York? -
There was no objection.
The CHAIRMAN. Are there any
amendments to section 106? If not, the
Clerk will read section 107.
The Clerk read as follows:
DOMESTIC CRUDE OIL
SEC. 107. Subsection (1) of section 7 of
the Export Administration Act of 1969, as
such section is redesignated by section 104
(a) of this Act, is amended-.
(1) in paragraph (1) -
(A) by striking out clause (A) and insert-
ing in lieu thereof the following: "(A) is
exported to the territory of an adjacent for-
eign state to be refined and consumed
therein in exchange fpr the same quantity of
crude oil being exported from that country
to the United States, such exchange achiev-
ing, through convenience or increased effi-
ciency of transportation, lower oil prices de-
scribed in paragraph (2) (A) (ii) of this sub-
section for consumers in the United States,
or", and
(B) by striking out "during the 2-year
period beginning on the date of enactment
of this subsection"; and
(2) by striking out paragraph (2) and in-
serting in lieu thereof the following:
"(2) Crude oil subject to the prohibition
contained in paragraph (1) may be exported
only if-
"(A) the President makes and publishes
express findings that exports of such crude
oil, including exchanges-
' (I) will'not diminish the total quantity
or quality of petroleum refined within,
stored within, or legally committed to be
transported to and sold within the United
States;
"(ii) will, within three months following
the initiation of such exports or exchanges,
result in (I) acquisition costs to the re-
fineries which purchase the imported crude
oil being lower than the acquisition costs
such refiners would have to pay for the
domestically produced oil which is exported,
and (II) commensurately reduced wholesale
and retail prices of products refined from
such imported crude oil;
"(iii) will be made only pursuant to con-
tracts which may be terminated if the crude
oil supplies of the United States are inter-
rupted, threatened, or diminished;
"(iv) are clearly necessary to protect the
national interest; and
"(v) are in accordance with the provi-
sions of this Act; and
"(B) the President reports such findings
to the Congress and the Congress, within
sixty days thereafter, passes a concurrent
resolution approving such exports on the
basis of the findings.
1-1 8069
Findings of lower costs and prices described
in subparagraph (A) (ii) should be audited
and verified by the General Accounting Of-
fice at least semiannually.
"(3) Notwithstanding any other provision
of this section and notwithstanding subsec-
tion (u) of section 28 of the Mineral Leasing
Act of 1920, the President may export oil
otherwise subject to this subsection to any
nation pursuant to a bilateral international
oil supply agreement entered into by the
United States with such nation before
May 1, 1979.".
Mr. BINGHAM (during the reading).
Mr. Chairman, I ask unanimous con-
sent that section 107 be considered as
read, printed in the RECORD, and open to
amendment at any point.
The CHAIRMAN pro tempore. Is there
objection to the request of the gentle-
man from New York?
There was no objection.
^ 1450
The CHAIRMAN. Are there amend-
ments to section 107?
There being none, the Clerk will read
section 108.
The Clerk read as follows:
UGANDA
SEC. 108. Section 7 of the Export Adminis-
tration Act of 1969, as redesignated by sec-
tion 104 of this Act, is amended by repeal-
ing subsection (m), as added by section 5(d)
of the Act of October 10, 1978 (Public Law
95-435).
Mr. LAGOMARSINO. Mr. Chairman,
I move to strike the last word.
Mr. Chairman, I rise to engage in a
colloquy with the chairman of the sub-
committee.
Mr. Chairman, the President in his en-
ergy speech, stated that when "this Na-
tion critically needs a refinery * * * we
will build it." On the west coast we criti-
cally need new refineries to process the
heavy Alaskan crude oil now being
shipped at high cost past California to
the gulf coast for refining.
Because of the shortage of west coast
refining capacity, I am particularly in-
terested in assuring the prompt comple-
tion of a new 150,000-barrel-a-day re-
finery planned by the Alaska Petrochem-
ical Co. (ALPETCO). This facility, to be
located in Valdez, Alaska, at a cost of
$1.8 billion, will use the latest technology
to produce a maximum amount of light
petroleum products. This refinery will
market 75,000 barrels of unleaded gaso-
line in California, along with jet and
diesel fuels.
Like all priority energy products, this
refinery is faced with burdensome Fed-
eral regulations, permits, licenses and
other time-consuming requirements. One
area of Federal control directly affecting
this project is established by the legisla-
tion before us today. To maximize the
production of gasoline and fuels, the
ALPETCO refinery will produce a low-
octane naphtha, which has no readily
available or economically feasible do-
mestic market. Under the provisions of
this legislation, ALPETCO will require
an export license to sell the naphtha
abroad.
I worked with my colleagues to estab-
lish the intent that his legislation should
not be interpreted by the Department of
Commerce in a manner that could hinder
prompt development of refineries. Spe-
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cifically, pursuant to section 3(3) (c) of
the Export Administration Act Amend-
ments of 1979, the Department should
draft regulations to permit the export
of petrochemical feedstocks when neces-
sary to new refinery, development, and
when there is no available domestic mar-
ket. Additionally, in the interest of pro-
viding greater certainty to project plan-
ners, the committee intends that the De-
partment should take into account the
need for prior commitments regarding
export licenses.
I believe the action by the committee is
clearly consistent with the thrust of the
President's new energy initiatives, and
will act to expedite the construction of
new refineries.
I understand that the chairman, Mr.
BINGHAM, agrees with this interpreta-
tion of section 3(3) (c), which is also set
forth in the committee report.
Mr. BINGHAM. Mr. Chairman, will
the gentleman yield?
Mr. LAGOMARSINO. I will yield to
the gentleman.
Mr. BINGHAM. The gentleman is
correct. The gentleman from California
has accurately stated the committee's
intent with regard to the export of
petrochemical feedstocks.
Mr. YOUNG of Alaska. Mr. Chairman,
will the gentleman yield?
Mr. LAGOMARSINO. I yield to the
gentleman.
Mr. YOUNG of Alaska. I want to com-
pliment the gentleman for his fine state-
ment and the chairman for agreeing with
the statement. It is of very vital impor-
tance to the State of Alaska that the
ALPETCO project take place in Valdez.
There has been the possibility of an
impediment because of the inability of
getting an export license with naphtha
when there is no market locally. I would
hope that the committee is not being
misled by the Department in any way,
shape or form and further down the
road we find that there is still a delay-
ing factor present. But I would say if the
intent of the gentleman and the report
are followed, I am sure that the project
will get on its way. I again want to com-
pliment the gentleman.
Mr. LAGOMARSINO. And I want to
compliment the gentleman from Alaska.
His leadership in this matter has been
very helpful; if we can build this refinery
it will produce needed gasoline par-
ticularly unleaded gasoline, for the west
coast, it will also, of course, reduce the
necessity of shipping Alaskan oil to other
countries to the extent that it can be re-
fined in our own country in the State of
Alaska.
The CHAIRMAN. Are there further
amendments to section 108?
There being none, the Clerk will read
section 109.
The Clerk read as follows:
DARTER AORERMENTS
SEC. 109. Section 7 of the Export Admin-
istration Act of 1969, as redesignated by sec-
tion 104 of this Act, is amended by adding
at the end thereof the following new sub-
section:
"(n) (1) The exportation pursuant to a
barter agreement of. any goods which may
lawfully be exported from the United States,
for any goods which may lawfully be im-
ported into the United States, may be ex-
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CONGRESSIONAL RECORD-HOUSE September 18, 1979
empted, in accordance with paragraph (2)
of this subsection, from any quantitative
limitation on exports (other than any re-
porting requirement) imposed to carry out
the policy set forth in section (3) (2) (C) of
this Act, or imposed by the President under
the International Emergency Economic Pow-
ers Act (50 U.S.C. App. 1701 at seq.) on
account of a threat to the economy of the
United States.
"(2) The Secretary shall grant an exemp-
tion under paragraph (1) if the Secretary
finds, after consultation with the head of
any appropriate agency of the United States,
that-
"(A) for the period during which the bar-
ter agreement is to be performed-
" (i) the average annual quantity of the
goods to be exported pursuant to the barter
agreement will not be required to satisfy
the average amount of such goods estimated
to be required annually by the domestic
economy and will be surplus thereto; and
" (ii) the average annual quantity of the
goods to be Imported will be less than the
average amount of such goods estimated to
be required annually to supplement domes-
tic production; and
"(B) the parties to such barter agreement
have 'demonstrated adequately that they in-
tend, and have the capacity, to perform such
barter agreement.
"(3) For purposes of this subsection, the
term 'barter agreement' means any agree-
ment which is made for the exchange, with-
out monetary consideration, of any goods
produced in the United States for any goods
produced outside of the United States.
"(4) This subsection shall apply only with
respect to barter agreements entered into
after the effective date of the Export Ad-
ministration Act Amendments of 1979.".
Mr. BINGHAM (during the reading).
Mr. Chairman, I ask unanimous consent
that the section be considered as read
and printed in the RECORD.
The CHAIRMAN. Is there objection
to the request of the gentleman from
New York?
There was no objection.
AMENDMENT OFFERED BY RM. FINDLEY
Mr. FINDLEY. Mr. Chairman. I offer
an amendment.
'The Clerk read as follows:
Amendment offered by Mr. FINDLEY: Page
44, insert the following section after line 2
and redesignate subsequent sections accord-
ingly:
PETITIONS FOR MONITORING OR CONTROLS
SEC. 109. Section 7 of the Export Admin-
istration Act of 1969, as redesignated by sec-
tion 104(a) of this Act, is amended by strik-
ing out subsection (d) and inserting in lieu
thereof the following:
"(d) (1) (A) Any entity, including a trade
association, firm, or certified or recognized
union or group of workers, which is repre-
sentative of an industry or a substantial
segment of an industry which processes me-
tallic materials capable of being recycled
with respect to which a serious inflationary
impact resulting from an increase in domes-
tic prices or a domestic shortage, either of
which results from increased exports, has or
may have a significant adverse effect on the
national economy or any sector thereof, may
transmit a written petition to the Secretary
requesting the monitoring of exports, or the
imposition of export controls, or both, with
respect to such material, in order to carry
out the policy set forth in section 3(2) (C)
of this Act.
"(B) Each petition shall be in such form
as the Secretary shall prescribe and shall
contain information in support of the action
requested. The petition shall include any in-
formation reasonably available to the peti-
tioner indicating (1) that there has been a
significant increase, in relation to a specific
period of time, in exports of such material
in relation to domestic supply and (2) that
there has been serious Inflationary impact
resulting from a significant increase in the
price of such material which may be related
to exports.
"(2) Within fifteen days after receipt of
any petition described in paragraph (1). the
Secretary shall publish a notice in the Fed-
eral Register. The notice shall (A) include
the name'of the material which is the subj-
ect of the petition, (B) Include the Schedule
B number of the material as set forth in the
Statistical Classification of Domestic and
Foreign Commodities Exported from the
United States, (C) indicate whether the peti-
tioner is requesting that controls or moni-
toring, or both, be imposed with respect to
the exportation of such material, and (D)
provide that interested persons shall have a
period of thirty days commencing with the
dae of publication of such notice to submit
to the Secretary written data, views, or argu-
ments, with or without opportunity for oral
presentation, with respect to the matter in-
.volved. At the request of the petitioner or
any other described in paragraph (1) (A)
with respect to the material which is the
subject of the petition, or at the request of
any entity representative of producers or ex-
porters of such material, the Secretary shall
conduct public hearings with respect to the
subject of the petition, in which event the
thirty-day period may be extended to forty-
five days.
"(3) Within forty-five days after the end
of the thirty of forty-five-day period de-
scribed in paragraph (2), as the case may be,
or within seventy-five days after the publi-
cation in the Federal Register, pursuant to
paragraph (2), whichever occurs later, the
Secretary shall-
"(A) determine whether to impose moni-
toring or controls, or both, on the exportation
of such material, in order to carry, out the
policy set forth in section 3(2) (G) of this
Act; and
"(B) publish in the Federal Register a de-
tailed statement of the reasons for such
determination.
"(4) Within fifteen days after making a
determination' under paragraph (3) to im-
pose monitoring or controls on the exporta-
tion of a material, the Secretary shall publish
in the Federal Register proposed -regulations
with respect to such monitoring or controls.
Within thirty days following the publication
of such proposed regulations, and after Con-
sidering any public comments, the Secre-
tary shall publish and implement final
regulations.
"(5) For purposes of publishing notices in
the Federal Register and scheduling pulblic
hearings, the Secretary may consolidate peti-
tions, and responses thereto, which involve
the same or related materials.
" (6) If a petition has been fully considered
within the past six months under, this sec-
tion and a notice has been published with
respect to a particular material or group of
materials and in the absence of significantly
changed circumstances, the Secretary shall
have authority to determine that the peti-
tion for monitoring or control of such ma-
terial does not merit the full consideration
mandated under this section.
"(7) The procedures and time limits set
forth in this subsection with respect to a
petition filed under this subsection shall
take precedence over any review undertaken
at the initiative of the Secretary with respect
to the same subject as that of the petition.
"(8) The Secretary may impose monitoring
or controls on a temporary basis after a peti-
tion is filed. under paragraph (1) (A) 'but be-
fore the Secretary makes a determination
under pargraph (3) if the Secretary' consid-
ers such action to be necessary to carry out
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September. 18, 1979 CONGRESSIONAL RECORD-HOUSE
the policy set forth in section 3(2) (C) of this
Act.
"(9) The authority under this section shall
not be construed to affect the authority of
the Secretary under the other provision of
this Act."
"(10) Nothing contained in this section
shall be construed to preclude submission on
a confidential basis to the Secretary of Com-
merce of-information relevant to a decision
to impose or remove monitoring or controls
under the authority of this Act, nor consider-
ation of such information by the Secretary
in reaching decisions required under this
section. The provisions of this subsection
are not intended to change the applicability
of section 552(b) of title 5, United States
Code."
Page 68, line 23, strike out "(d),".
Page 58, line 24, strike out "(d)," after
,. (c) ,.
Page 59, line 3, strike out "and (h)" and
insert in lieu thereof "(h), and (i)".
Mr. FINDLEY (during the reading).
Mr. Chairman, I ask unanimous con-
sent that the amendment be considered
as read and printed in the RECORD.
The CHAIRMAN pro tempore. Is there
Objection to the request of the. gentle-
man from Illinois?
There was no objection.
Mr. FINDLEY. Mr. Chairman, the
amendment Mr. ZARLOCKI and I are
offering to the Export Administration
Act is nothing more than a "sunshine
amendment." It sets up a procedure to
allow users of recyclable metals to pe-
tition the Commerce Department for a
hearing at which the users could pre-
sent evidence of the need for relief
under the law. This is not a protectionist
amendment. It does not impose or call
for export controls. It simply gives those
who are hurting assurance that they can
make their case in a formal hearing-
something they are currently denied.
My amendment is much more limited
than the "Buchanan amendment." The
procedure--i--.:1y amendment are more
tightly drawn, and I have limited its
scope to metallic materials capable of
being recycled. The reason I have lim-
ited the scope of my amendment is that
a number of groups. including producers
of agricultural products. have expressed
concern about the impact of the Bu-
chanan amendment on their ability to
export their products.
Here is how my amendment works: It
adds a new section to the Export Admin-
istration Act permitting persons, com-
panies, trade associations, or unions,
representing a substantial segment of an
industry, to file a written petition with
the Secretary of Commerce requesting
monitoring of exports or controls. The
petition must show that, as a result of
increased exports of recyclable metals,
their industry is confronted with either
a shortage or a serious inflationary im-
pact resulting from an increase in the
prices they must pay for the metal they
use.
Within 15 days of receiving a petition,
the Secretary of Commerce must pub-
lish a notice in the Federal Register.
Within the next 45 days, hearings must
be held if requested, and written sub-
missions may be provided.
With the next 30 days. the Secretary
of Commerce must decide whether to
grant the relief requested and publish
8071
the decision in the Federal Register tage with respect to their competition,
along with the reasons for the decision. particularly foreign competition.
That is all the amendment does. It Mr. Chairman, I am opposed in princi-
brings the decisionmaking process out pal to the use of export controls, and I
into the open from behind the closed would hope that the procedures provided
doors of the Secretary of Commerce. for in this amendment would not have
These provisions are purely procedural to be used. However, there may be a few
in nature. They do not make any sub-
stantive changes in the Export Adminis-
tration Act. They do, however, permit
persons representing an industry seek-
ing monitoring or export controls to be
assured their request will be dealt with
in an open, timely manner, rather than
behind closed doors.
As the Export Administration Act now
stands, the Commerce Department is not
required to make a decision within any
particular period of time, -nor is it re-
quired to give its reasons for. a favorable
or unfavorable decision. It is not re-
quired to permit either proponents or
opponents of a petition to argue their
case in a public proceeding.
This amendment does not prejudge
the outcome of petitions for monitoring
of export controls. It simply brings the
decisionmaking process into the sun-
shine, and assures that decisions will be
made in a timely fashion. It does not add
a significant new administrative burden
to the Department of Commerce.
In summary:
First. This amendment is a "sunshine"
provision-it brings the Government de-
cisionmaking process into the open.
Second. It is procedural"-in nature-it
does not prejudge or influence the ulti-
mate decision.
Those who were concerned about the
broad scope of the Buchanan amend-
ment should support this very limited
amendment, because it applies only to
metallic materials capable of being re-
cycled.
^ 1500
Mr. ZABLOCKI. Mr. Chairman, I rise
in support of the amendment.
This is basically a procedural amend-
ment, aimed at insuring that petitions
for monitoring or for export controls re-
ceive full consideration.
This amendment is a sunshine-in-
Government amendment. It provides
that both the proponents and opponents
of monitoring or export- controls receive
a full and fair hearing in the time of
high prices/short supply of s particular
metallic mineral that can be used as
scrap.
The current version of the amendment
is an improvement on earlier versions in
that it would permit the Secretary of
Commerce to consolidate petitions and
to determine that, once full considera-
tion had been given to a case and mar-
ket circumstances had not changed, sub-
sequent petitions would not go through
the hearing process-this should avoid
any abuse of the process. It also clearly
specifies that the increase in prices or
the shortage must result from exports,
not from increased domestic buying. .
Another improvement in the amend-
ment is that it clearly permits the sub-
mission of information regarding a peti-
tion on a confidential basis. This is in-
tended to avoid forcing companies to pro-
vide information publicly which could
place them at a competitive disadvan-
monitoring have to be resorted to in order
to protect the economy from disruptive
foreign buying. Therefore, we must in-
sure that there is an open and fair
process to permit the full consideration
of any such actions.
Mr. ROSTENKOWSKI. Mr. Chair-
man, will the gentleman yield?
Mr. ZABLOCKI. I am delighted to
yield to the gentleman from Illinois.
(Mr. ROSTENKOWSKI asked and
was given .permission to revise and ex-
tend his remarks.)
Mr. ROSTENKOWSKI. Mr. Chair-
man, I rise in support of the amendment
of the gentleman from Illinois (Mr.
FINDLEY). This amendment has been
narrowed in scope from the original
amendment of the gentleman from Ala-
bama (Mr. BUCHANAN) so that the pro-
cedural provisions apply only to metallic
materials capable of being recycled.
I support this amendment for the fol-
lowing reasons:
First. These procedural changes are
good Government, sunshine act type
provisions.
Second. The amendment has been nar-
rowed in scope to cover only those types
of products which have most frequent-
ly been the subject of Commerce De-
partment consideration under the short
supply provisions of the Export Admin-
istration Act.
Third. This amendment will assure
that both sides of the issue will have
an equal opportunity to present their
cases to the Commerce Department, and
to get a competent decision from the
Commerce Department.
I urge my colleauges to join me in sup-
porting the Findley amendment.
Mr. PEASE. Mr. Chairman, I move
to strike the requisite number of words,
and I rise in opposition to the amend-
ment.
(Mr. PEASE asked and was given per-
mission to_ revise and extend his re-
marks.)
Mr. PEASE. Mr. Chairman, there are
no two members of the Foreign Affairs
Committee for whom I have greater re-
spect and affection than my chairman,
Mr. ZABLOCKI, and my good friend, PAUL
FINDLEY, from Illinois. However, I do
oppose this amendment.
This amendment is generated by the
steel industry. It was generated because
of a surge in prices, in recent months,
of scrap metal; and because a lot of
scrap metal was being exported overseas.
Quite naturally, the companies in the
United States which have use for scrap
metal did not like the fact that they
were going to have to pay more for scrap
metal, and they came in"seeking relief.
An amendment similar to this was of-
fered in subcommittee. It was defeated.
Essentially, the purpose of this, although
it is not strictly spelled out, is to restrict
the exportation of scrap metal. The
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CONGRESSIONAL RECORD-HOUSE. September 18, 1979
philosophy of this bill is to encourage
exports, not to limit exports. I think we
would be ill advised to adopt this amend-
ment.
This amendment seeks to ameliorate
inflation, high prices, of scrap metal. In
fact, it might have exactly the opposite
effect. It would set in place a procedure
which would require hearings and a de-
termination by the Secretary of Com-
merce which could have quite the op-
posite effect from that which is sought
by the authors of the amendment. It has
the potential for creating chaos in the
commodities market because of the in-
tense speculative activity which would
likely accompany the filing of petitions
for monitoring or controlling particular
commodities. Also, because those who
anticipate the advent of controls as a
result of a petition under this amend-
ment may step up exports, thus exacer-
bating a tight supply situation; because
those who gamble that there will be no
controls will likely withhbld supplies
from the market in anticipation of rising
prices, thus making such price increases
even more likely.
In sum, the proposed petitioning pro-
cedure will likely lead to the very situa-
tion we are trying to avoid, a surge in
prices, exports, or both. In the mean-
time, we will have adopted an amend-
ment for one industry which goes counter
to the philosophy of this bill.
We do not need this amendment.
While the petitioning procedure seems
innocuous enough in this particular case,
what is 'to set this industry aside from
any one of a hundred other industries
which may also be concerned about short
supply situations and about high prices,
and where the members of that industry
prefer not to pay the higher prices?
We had no testimony in our commit-
tee that U.S. users could not get scrap
metal. What they objected to was paying
the going market price in the world. I
think that that is not an adequate excuse
for us to add restrictive language to the
export administration bill, whose pur-
pose is to encourage exportation.
I urge the defeat of the amendment.
01510
Mr. FINDLEY. Mr. Chairman, will the
gentleman yield?
Mr. PEASE. I will be happy to yield
to the gentleman from Illinois.
Mr. FINDLEY. I thank the gentleman
very much for yielding. I am sure he is
aware that the Senate version of this
legislation has language in it much more
encompassing than the amendment that
I have offered, and it is my hope that
when we go to conference the final ,prod-
uct on this question will be very tightly
written. One reason that I welcome the
opportunity to offer this amendment is
to set a guide which I hope the conferees
on both sides of the Capitol will take note
of, ~ because I would not wish this to be
expanded to include agricultural com-
modities. I am sure the gentleman would
agree with me on this. It is tightly re-
stricted to metalic metals that can be
recycled.
I thank the gentleman for yielding.
Mr. PEASE. I thank the gentleman for
his contribution. If I might just for a
moment comment on that.
The CHAIRMAN. The time of the
gentleman has expired.
(By unanimous consent, Mr. PEASE was
allowed to proceed for 2 additional min-
utes.)
Mr. PEASE. I was saying it would be
preferable, I think, and more desirable
to have no amendment at all on this side
so that the conference committee has a
choice between no amendment and a
modification along the lines of what the
gentleman has offered. I think we would
be still well advised not to adopt this
amendment.
Mr. ? FOLEY. Mr. Chairman, will the
gentleman yield?
Mr. PEASE. I am glad, to yield to the
gentleman from Washington.
Mr. FOLEY. I thank the gentleman for
yielding. I am somewhat concerned about
this amendment because I share the con-
cern of the gentleman in the well about
the --precedent for this. On the other
-hand, I am at least happy, if I can em-
phasize the minimal pleasure, that the
amendment has been very. narrowly
drafted, and while I would hope, along
with the gentleman from -Ohio (Mr.
PEASE), that the amendment is not
agreed to, if it is agreed to I would cer-
tainly encourage the conferees to follow
the suggestion of the gentleman from
Illinois that this amendment with its
more restrictive focus be substituted for
the much less desirable amendment that
was added in the legislation in the other
body. So as a principle and as a prece-
dent, I join in opposing this legislation,
but should it pass, I would hope that it
could at least do the service of substitu-
ting for the restrictive amendment that
the other body has.
Mr. PEASE. I appreciate the gentle-
man's contribution. However, it is a weak
argument to say let us vote for an
amendment because it is a less restric-
tive amendment than some other amend-
ment. The best solution for an amend-
ment that is a less restrictive amendment
is to vote it down.
Mr. LAGOMARSINO. Mr. Chairman,
I move to strike the requisite number of
words.
(Mr. LAGOMARSINO asked and was
given permission to revise and extend his
remarks.)
Mr. LAGOMARSINO. Mr. Chairman,
I rise in opposition to this amendment.
I do so with a great deal of reluctance
because of my great respect and admira-
tion for the sponsors of the amendment,
the gentleman from Illinois (Mr. FIND-
LEY) the gentleman from Alabama (Mr.
BUCHANAN) and, of course, the chairman
of the full committee, my good friend,
the gentleman from Wisconsin (Mr.
ZABLOCKi). But I think that this amend-
ment if ? adopted would allow narrow-
interest groups to requrie repeated pub-
lic hearings on export controls on virtu-
ally every recycled metallic product
where demand is strong, and publicity
from such hearings would create short-
supply situations where none exist pres-
ently. It would create an uncertainty
regarding U.S. commitment to continue
exports of a commodity subject to such
hearings and, thus, limit our ability to
enlarge and enhance foreign markets.
The language in the bill reflects my
amendment accepted in subcommittee
providing that monitoring of exports
shall commence early enough to' assure
that there is adequate information to de-
termine whether export controls are
needed for short-supply purposes.
I think we should at least try that ap-
proach before we go' to this. dangerous
proposal.
The amendment is really aimed at ad-
vancing the interests of the iron and
steel producers who want to see export
controls placed on ferrous scrap. Ferrous .
scrap prices fell after the announcement,
that controls would not be placed on
scrap exports and have remained stable
since that decision made last March.
As a matter of fact, the price has gone
down from $129 per ton in March to $92
per ton.
The ferrous scrap market is governed
solely by supply and demand. Scrap is
bought on a 30-day basis at prices set by
consumers. When demand increases,
price increases are necessary to induce
scrap collectors, not processors, to seek
out the necessary obsolete scrap to meet
demand.
Wide fluctuations in scrap prices could
be significantly reduced through long-
term buying practices by the steel indus-
try.
The,scrap export market developed be-
cause U.S. consumers did not purchase
the scrap processed by U.S. processors.
Export sales are more expensive and pose
greater risks for scrap processors than
do domestic sales but are the only al-
ternative when domestic markets do not
absorb supplies. Export controls pose a
danger of destroying foreign markets.
Since the price of scrap fluctuates up
and down, but finished steel prices show
only an upward movement, scrap iron
prices have litle or no inflationary im-
pace on the price of steel. Iron and steel
scrap are not in short supply. Present
estimates fix the existing supply at levels
of meeting foreign and domestic demand
for 15 years without even considering
the huge vloume of new scrap that will be
generated during this period.
The United States is not the only coun-
try exporting scrap. Others include West
Germany, France, Great Britain, Hol-
land, Sweden, Australia, Yugoslavia, East
Germany, and Canada, among others.
The EEC countries abolished controls in
1977.
The 1977 conference report on the Ex-
port Administration Act stated, and I
quote :
The conference committee recognized that
formal monitoring can have a disruptive ef-
fect on the market because it can lead to
excess ordering abroad in anticipation of
controls, resulting. in export restrictions
which would not have been imposed but for
monitoring.
The dispute is not a matter of Com-
merce not having sufficient information;
it is a difference of opinion between
Commerce and the steel industry as to
what that information means.
I have a chart at the desk that shows
ferrous scrap sales and domestic prices
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reached their peak earlier in the 1970's amendment did not include any agricul- duties. in addition, small electric steel
during the precise period in which ex- tural group, it did not include manufae- furnaces for the manufacture of steel can
port controls were placed on ferrous tured materials, and that amendment be Constructed fairly rapidly and at
scrap. was not nearly as broad as it was pur- modest costs. Therefore, such facilities
The decline in ferrous scrap prices at ported to be by some of the information can significantly increase our Nation's
the end of 1974, at the end of the period that circulated throughout this Chamber. Planning flexibility in periods where
of export controls on ferrous scrap, rep- Regrettably, the Buchanan sunshine future demand for steel is uncertain.
resents the decline in the U.S. economy amendment has been widely misunder- Unfortunately, during peak periods of
in 1974 and 1975. stood. A number of organizations and steel production, the United States can-
There was a weakening demand. for groups representing producers of agri- not fully meet both domestic and foreign
steel and, thus, there was reduced de- cultural commodities, coal,,finished lum- needs for ferrous scrap without shortages
mand for scrap. ber, manufactured goods, and other ma- or. drastic, inflationary price increases
Mr. Chairman, I think that we should terials have perceived the amendment as in the scrap market. For these reasons,
vote down this amendment. I would directly threatening their ability to ex- ferrous scrap exports will continue to
agree with the gentleman from Illinois Port. In all candor, I believe that such be a matter of controversy.
(Mr. FrnmLEY) that the amendment is fears are unfounded and are based, in Mr. Chairman, this amendment does
better than the amendment adopted in large part, on misinformation which has not assure any end result in the case of
the Senate, but I think we would be in a been circulated regarding the amend- ferrous scrap or any other material
stronger position to come up with a rea- ment. Nevertheless, such apprehension covered. It only guarantees orderly pro-
sonable solution to this problem if we do exist-however groundless-and op- cedures. It only makes mandatory that
defeated this amendment rather than if position to the Buchanan amendment is the Department of Commerce at least
we go part way and the Senate has gone substantial. Therefore, although I con- look at the problems when problems are
the rest of the way. I ask my colleagues tinue to believe that the institution of a presented, that the Department of Com-
to defeat the amendment. formal procedure within the Department merce act in the sunshine, not behind
Mr. BINGHAM. Mr. Chairman, Y move of Commerce for consideration of such closed doors, ? and that those who feel
to strike the last word. cases is warranted, I will not offer the that a substantial portion of the economy
Mr. Chairman, I think the members of amendment. of this country is substantially injured
the committee are entitled to know a few The Findley amendment - goes from by an export activity of this limited cate-
things in the way of history of this the general language of the Senate bill, gory of exports are guaranteed a day in
amendment, and also the administra- the general language of the other amend- court'so that, in the sunshine, a decision
tion's position. This amendment was ment the gentleman offered in subcom- can be made that may go for them or
originally offered in the "broad form in mittee and my general language, to may go against them.
subcommittee by the gentleman from Il- single out, recyclable metallic materials; Mr. Chairman, this amendment pre-
linois (Mr. FINDLEY) that is to sav, with- and therefore cannot include any agri- cisely does not curtail exports, even in
out restriction as to commodity. It is re- cultural product or any of the other that limited category of materials that
stricted to metals in its present form. products for export, so important to our are covered, but it may be something
The amendment at that time received country. that helps steelworkers to save their
my support and that of one or two other Mr. Chairman, it was never my in- jobs.
members of the subcommittee, but it was tention to discourage exports. We rely Mr. Chairman, I want to say some-
defeated in the subcommittee And it was upon them. Certainly not agricultural thing: When the farmers in this coun-
not reoffered in the full committee. So exports. Yet, I will say to my friend from try need help, people like my steelworker
the bill that emerged from the full com- Ohio, we do have a problem in the steel constituents have been among those in
mittee did not contain that provision. industry. Ferrous scrap is of vital im- the forefront saying, "Yes, we should
As far as this more limited form of the portance to many foundries, to many help, even though this is not in our par-
amendment is concerned, I think it is steel producers that are themselves of ticular interest."
fair to say that the committee did not vital importance to our economy, ? to our Mr. Chairman, this amendment, can
have it presented to it and, therefore, security. Having a certain supply of protect the livelihood of steelworkers,
the committee has no position on it as ferrous scrap at some rational price is and when they need help they ought not
such. The administration, however, has important to many steelworkers, to to be opposed for extraneous reasons by
communicated its onposition to the pro- many steel companies and to many com- a group not covered by this narrow
posal. It is very brief. The administra- munities whose lives and economies rely amendment.
tion opposes the proposal, saying it has upon those industries. Mr. Chairman, this is something that
the potential for creating chaos in the Recyclable metallic materials are fre- guarantees better government, better ad-
scrap market and exacerbating the very quently the object of concern regard- ministration, and government in the
problem that the amendment seeks to ing export controls. For example; ex- sunshine. It can help protect the liveli-
correct. tremely high export levels of ferrous- hood of some Americans and at least
^ 1520 iron and steel-scrap and resulting rapid make sure that government looks at
Mr. BUCHANAN. Mr. Chairman, I price increases in this commodity have problems that can be of vital importance
move to strike the last word. raised a - great deal of controversy over to our economy; to our security and, yes,
Mr. Chairman, I rise reluctantly to whether the Department of Commerce to at least one industry that is of vital
oppose the,position of my distinguished should institute export controls under importance to our Nation.
friends from California and Ohio who the short supply provisions of the Ex- Mr. Chairman, I urge the passage of
very eloquently spoke on the wrong side port Administration Act. this limited, good government, govern-
of this issue and to enthusiastically Ferrous scrap is one of the basic in- ment in the sunshine amendment and
speak for the Findley-Zablocki amend- gredients used in steelmaking. Over 75 yield back the balance of my time.
ment. percent of the country's steel producers Mr. BONER of Tennessee. Mr. Chair-
Let me first underline this is not the operate solely with electric furnaces man, the U.S. Department of Commerce,
same amendment, as the chairman of which rely almost exclusively on scrap following a complete analysis of the steel
the subcommittee had said, which was as a raw material. Major integrated steel industry request, announced on March
offered in subcommittee by the gentle- producers' also consume large tonnages 2, 1979 that no action to restrict or con-
man from Illinois. It is not the same of ferrous scrap. trol exports of ferrous scrap was war-
amendment which I had been prepared The portion of the steel industry which ranted.
to offer and which is printed in the has grown up around the conversion of Frank A. Well, the then Assistant Se-
RECORD under my name to be offered to scrap iron to finished steel products offers retary of Commerce for Industry and
this legislation. our country a number of attractive op- Trade, said that-
Mr. Chairman, I had worked rather portunities. The use of scrap iron in the Recent increases. in scrap prices are not
carefully to make sure those groups who making of steel offers significant energy unusual in view of current market and sea-
expressed great concerts but who were savings and results in virtually no pol- sonal factors and are not expected to con-
not intended to be covered, were excluded lution at the manufacturing site- tinue,
under my more general language. That through the elimination of coking fa- He pointed out that-
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 118074
The Council on Wage and Price Stability
has advised the Department that recent fer-
rous soap prices should not have an undue
adverse Impact on the President's anti-infla-
tion program.
In his statement, Mr. Weil went on to
say that-
The ferrous scrap market is a typically
volatile industry, showing rapid fluctuations
both up and down as a result of short term
market factors, and that experience has
shown that price swings tend to work them-
selves out and return to normal within rela-
tdvely brief periods.
He was right. Scrap prices are down
significantly and many mills are either
not buying or buying at greatly reduced
levels.
Although rebuffed by the Commerce
Department, the steel and foundry in-
dustries moved their cause up Pennsyl-
vania Avenue to the Congress, where, in
hearings being conducted by the House
and Senate on the extension of the Ex-
port Administration Act, they sharply
criticized the administration's failure to
take action on their behalf.
Now using the congressional process as
their forum, some scrap consumers are
urging the Nation's lawmakers to bypass
the Government department which ad-
ministers the law and to pass a new law
that would restrict scrap exports.
They urge modification of the act to
make it easier for them to have ex-
port monitoring and controls initiated
through the Commerce Department.
Monitoring is a first step toward con-
trols. Monitoring can create a self-ful-
filling prophecy.
In testimony before the House Sub-
committee on International Economic
Policy and Trade, a charge was made
that U.S. steel mills and foundries are
attempting to use Federal export con-
trol laws to set the domestic price of iron
and steel scrap. They were alleged to be
seeking amendments to the Export Ad-
ministration Act designed to subsidize
those industries. That subsidization
would take place at the expense of ex-
ports of ferrous scrap and would harm
the U.S. balance-of-payments position.
Since the steel and foundry industries
are precluded by law from fixing the
price of scrap, ' they were charged with
asking the Government to do this for
them. These industries are asking for
the same type of special consideration
that they accuse foreign governments of
giving to foreign steel mills. Some of
these same American steel mills have
been recently involved in a price-fixing
scheme on reinforcing bars and steel
sheets.
The Department of Commerce had
previously said that they have the data
a formal proceeding would yield. The
steel and foundry industries' real objec-
tion is not that the Department has in-
sufficient data, but rather that these in-
dustries disagree with the Department's
interpretation of that data. They are not
worried about supply. They are trying
to use monitoring and subsequently con-
trols as a price-fixing scheme.
Was or is the price of ferrous scrap too
high? Do high prices for ferrous scrap
indicate that a shortage exists? Are
scrap exports hurting the domestic
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CONGRESSIONAL RECORD-HOUSE September 18, 1979
economy? Would a restriction on scrap
exports help reduce inflation?
The first question may be best
answered by Mr. R. W. Deckmann, a
United States Steel Corp. research con-
sultant. In a presentation to the Elec-
tric Furnace Congress in December 1978
describing a ferrous scrap model devel-
oped for United States Steel, he pointed
out that when adjusted for inflation.
1974 scrap prices were not unusually
high but merley a return to the price
levels of the 1955-56 period. The price
of scrap in 1979 has not reached the
level of 5 years ago,. and the United
States has certainly experienced a high
degree of inflation in that 5-year period.
In constant dollars, the price of scrap in
1979 is less than the $440 to $50 price
levels of 23 years ago.
There is no question that the main-
stream of thinking is that the expansion
of export trade is critical to the United
States. With an extremely parochial
view, wanting to increase their profits at
the expense of the scrap industry and
the Nation, steel mills and foundries are
urging this change in the proposed
Export Administration Act.
With the recognized need to increase
exports as one important method to
improve the U.S. economy, and given
the huge surplus of scrap which is going'
unused in this country, there are sig-
nificant economic and environmental
benefits to maintaining free trade in iron
and steel scrap.
The CHAIRMAN. The question is on
the amendment offerde by the gentle-
man from Illinois (Mr. FINDLEY).
The question was taken and on a
division (demanded by Mr. FINDLEY)
there were-ayes 18, noes 11.
RECORDED VOTE
Mr. LAGOMARSINO. Mr. Chairman,
I demand a recorded vote.
A recorded vote was ordered.
The vote was taken by electronic de-
vice, and there were-ayes 238, noes 165,
answered "present" 1, not voting 30, as
follows:
[Roll No. 478]
AYES-238
Albosta
Carney
Fenwick
Alexander
Chappell
Findley
Annunzio
Cleveland
F.sh
Applegate
Clinger
Fithian
Archer
Conyers
Flippo
Ashbrook
Corcoran
Fowler
Atkinson
Cotter
Fuqua
Badham
Coughlin
Gaydos
Bafalis
D'Amours
Gephardt
Bailey
Daniel, Dan
Giaimo
Bauman
Daniel, R. W.
Gilman
Beard, R.I.
Danielson
Gingrich
Benjamin
Davis, Mich.
Gonzalez
Bennett
Davis, S.C.
Goodling
Bereuter
Deckard
Gradison
Bethune
Derrick
Grisham
Bevill
Derwinski
Guarini
Biaggi
Devine
Guyer
Bingham
Dickinson
Hall, Tex.
Blanchard
Dodd
Hamilton
Boland
Donnelly
Hammer-
Bolling
Dougherty
schmidt
Bonior
Drinan
Hanley
Bonker
Duncan, Tenn.
Hansen
Bouquard
Early
Harris
Brodhead
Edwards, Ala.
Hawkins
Brooks
Emery .
Heckler
Broomfield
Erdahl
Heftel
Brown, Calif.
Erlenborn
Hillis
Brown, Ohio
Ertel
Holland
Buchanan
Evans, Del.
Holt
Butler
Evans. Ga.
Holtzman
Byron
Evans, Ind.
Hopkins
Campbell
Fary
Horton
Hubbard
Moorhead, Pa.
Sensenbrenner
Hutto
Mottl
Shannon
Hyde
Murphy, N.Y.
Sharp
Jacobs
Murphy, Pa.
Shelby'
Jeffries
Myers, Ind.
Shuster
Jenkins
Myers, Pa.
Simon
Jenrette
Hatcher
Black
Johnson, Colo.
Nedzi
Snows
Ksstenmeier
Nelson
Snyder
Kildee
Nichols
Solomon
Kindness
Nolan
Spence.
Kogovsek
Nowak'
St Germain
Kostmayer
O'Brien
Stack
LaFalce
Oakar
Staggers
Latta
Oberstar
Stanton
Lederer
Obey
Stewart
Lee
Ottinger
Stratton
Lent
Pashayan
Studds
Livingston
Perkins
Taylor
Lloyd
Price
Thompson
Loeffler
Pritchard
Traxler
Luken
Pursell
Trible
Lundine
Quayle
Udall
McKay
Quillen
Vanik
McKinney
Rahall
Walgren
Madigan
Railsback
Walker
Marks
Rangel
Wampler
Marriott
Ratchford
Weaver
Martin
Regula
Weiss
Mathis
Reuss
White
McCloskey
Rhodes
Whitehurst
McDade
Richmond
Whittaker
McEwen
Rinaldo
Whitten
Mavroules
Bitter
Williams, Ohio
Mazzola
Robinson
Wilson, Bob
Mica
Rodino
Wolff
Michel
Rostenkowski
Wright
Mikulski
Roth
Wydler
Mikva
Runnels
Wylie
Miller, Calif.
Russo
Yatron
Miller, Ohio
Santini
Young, Alaska
Minish
Satterfield
Young, Fla.
Mitchell, N.Y.
Schroeder
Young, Mo.
Moakley
Schulze
Zablocki
Moffett
Sebelius
Zeferetti
Mollohan
Beiberling
NOES-165
Abdnor
Fisher
Mattox
Akaka
Florio
Mineta
Ambro
Foley
Mitchell, Md.
Anderson,
Ford, Tenn.
Montgomery
Calif.
Forsythe
Moore
Andrews, N.C.
Fountain
Moorhead,
Andrews,
Frost
Calif.
N. Dak.
Garcia
Murtha
Ashley
Gibbons
Neal
Aspin
Ginn
Panetta
AuCoin
Goldwater
Patten
Baldus
Gore ,
Patterson
Barnard
Gramm
Paul
Barnes
Grassley
Pease
Beard, Tenn.
Gray
Petri
Bedell
Green
Peyser
Beilenson
Gudger
Pickle .
Boggs
Hall. Ohio
Preyer
Boner
Hance
Roberts
Bowen
Harkin
Roe
Brademas
Harsha
Roybal
Breaux
Hefner
Royer
Brinkley
Hightower
Rudd
Burgener
Hinson
Sabo
Burlison
Howard
Sawyer
Burton, John
Huckaby
Scheuer
Burton, Phillip Hughes
Shumway
Carr Ireland
Skelton
Cavanaugh Jeffords
Smith, Iowa
Cheney Johnson, Calif
. Smith, Nebr.
Chisholm Jones, N.C.
Solarz
Clausen Jones, Okla.
Spellman
Clay Jones, Tenn.
Stangeland
Coelho Kazen
Stark
Collins, nl. Kelly
Steed
Collins, Tex. Kemp
Stenholm
Conable Kramer
Stockman
Conte Lagomarsino
Stokes
Crane, Daniel Leach. Iowa
Stump
Crane, Philip Leath, Tex.
Swift
Dannemeyer Lehman
Symms
Daschle Leland
Synar
de la Garza Levitas
Tauke
Dellums Lewis
Thomas
Dicks Long, La.
Van Deerlin
Dixon Long, Md.
Vander Jagt
,
Dorn an Lowry
Vento
Duncan, Oreg. Lungren
Volltmer
Eckhardt McClory
Watkins
Edgar McCormack
Whitley
Edwards, Calif. McDonald
Williams, Mont.
Edwards, Okla. McHugh
Wilson. Tex.
English Maguire
Wirth
Fascell Markey
Wolpe
Fazio Marlenee
Wyatt
Ferraro Matsui
Yates
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September 18, 1979 CONGRESSIONAL RECORD- HOUSE
ANSWERED "PRESENT"-I
Glickman
NOT VOTING-80
Addabbo
Downey
Murphy, Ill.
Anderson, nl.
Flood
Pepper
Anthony
Ford, Mich.
Rose
Broyhill
Frenzel
Rosenthal
Carter
Hagedorn
Rousselot
Coleman
Hollenbeck
Treen
Ccrman
Ichord
Ullman
Courter
Leach. La.
Waxman
Diggs
Lott
Wilson. C. H.
Lujan
Winn
^ 1540
Messrs. ABDNOR, SE[UMWAY, Mc-
CORMACK, McCIsORY, CLAUSEN,
COLLINS of Texas, and LONG of
Maryland, and Mrs. SPELLMAN
changed their votes from "aye" to "no."
Mr. BONIOR of Michigan, Mrs. HOLT,
and Messrs. LEE, GTI.1)/MAN, MOOR-
HEAD, of Pennsylvania, MICA, HAN-
LEY, and HORTON changed their
votes from "no" to "aye."
So the amendment was agreed to.
The result of the vote was announced
as above recorded.
Mr. ALEXANDER. Mr. Chairman, I
move to strike the last word.
(Mr. ALEXANDER asked and was giv-
en permission to revise and extend his
remarks.)
Mr. ALEXANDER. Mr. Chairman, I
rise in support of H.R. 4034, the Export
Administration Act Amendments of 1979.
Thig bill is a necessary first step in al-
lowing Congress a role in developing a
national export strategy.
The number of export license applica-
tions is growing out of control. The De-
partment of Commerce expects to receive
some 80,000 applications this year. Of
that number more than 99 percent will
be approved. The bill eliminates the mas-
sive amount of paperwork needed for
most of the applications. The bill cre-
ates a new kind of license, called a qual-
ified general license, under which mul-
tiple exports could be made of items
which precedent shown are routinely ap-
proved anyway.
This feature of the bill should signifi-
cantly cut down on the amount of paper-
work. Second, under the term of the act,
applications must be approved and dis-
approved within 90 days of submission.
Last year some 2,000 applications re-
quired over 90 days to process and some
took over a year. These administrative
delays are costing American exporters
money, reliability and dependability. It is
also driving up inflation, costing U.S.
Jobs. and creating a trade deficit that
is growing gorse by the quarter.
Third, the United States continues to
control exports that other countries do
not control. The Soviet Union, PRC, and
other countries simply turn to the West
Germans or Japanese when they cannot
secure a product from the United States.
H.R. 4043 strongly suggests that the
118075
Live (May 1979) entitled "Needed: A New Committee on Foreign Affairs of the
Export Law," by Sherman R. Abraham- House of Representatives and the Com-
son, special assistant to chief executive mittee on Foreign Relations of the Sen-
officers Control Data Corp. Mr. Abra- ate before any license is approved for
hamson asserts: - goods and technology valued at more
Exercise in Illusion.-Supporters of U.S. than $7 million to any country concern-
export controls believe first and foremost ing which the Secretary of State has
that they have retarded the expansion of the determined: First, such country has re-
military industrial potential of the U.S.S.R. peatedly provided support for acts of in-
and other communist countries. This con- ternational terrorism; and second, such
tention is grounded upon faith in the efficacy
of the bottleneck theory of military-indus-
exports would make a significant contri-
trial development, which theory has been bution to the military potential of such
discredited thoroughly in many analytical country, including its military logistics
studies. The elemental truth of the matter is capability, or would enhance the ability
simply that the export control policy of the of such country to support acts of inter-
United States has bad no discernible effect national terrorism. The formal text of
on the growth of military power of any of the the amendment and the brief discussion
communist countries, be found on page H7665 of the CON-
Another benefit claimed for U.S. export can
controls has been its utility in furthering GRESSIONAL RECORD for September 11,
U.S. foreign policy. Over the years hundreds 1979.
of export transactions -requiring export li- The gentleman from New York (Mr.
eencec from fh- P!n,..,..e
licy
11
explicitly disallowed ? On 6foreign vc policy
grounds. Presumably the policy makers inter-
vened in these sales to indicate U.S. dissatis-
faction with the behavior of the buyers, the
theory being that such Intervention will be
so disruptive to the buying countries that
they will change their behavior to a style
more consonant with the wishes of the
United States. U.S. business firms have expe-
rienced intervention by our government in
normal commercial transactions with most
of the countries in the world, including a
number of our NATO allies.
In not one instance can these interventions
be shown to have produced the desired be-
havioral change in the buying country.
The U.S. trade deficit continues to
grow and worsen. We can no longer
afford excessive licensing requirements,
delays, and obsolete and ineffective ex-
port controls which merely serve to bene-
fit the balance of trade of our competi-
tors. Passage of H.R. 4034 will lead to
moderate yet significant changes while
protecting the purposes the controls were
designed to achieve.
The chairman of the Foreign Affairs
Subcommittee on InternatioUal Eco-
nomic Policy and Trade, Mr. BINGHAM,
has done an excellent job in developing
and preparing the bill for our considera-
tion. The House Export Task Force, of
which I am chairman, and Mr. BINGHAM,
a distinguished member, recognizes the
need for a modification in the licensing
procedure. The National Governors Asso-
p
men
s
ciation had much input into the final plans and to make sure that this infor-
version of the bill and now fully supports mal process is continued.
It. The amendm
nt
d
e
was
eliberately
H.R. 4034 is necessary as we in Con- drafted to allow flexibility in the way the
gress begin to take a serious look at our committees are informed. I did not want
export policy. I recommend passage of. to put the executive branch or those
this bill and ask that my colleagues seeking export licenses in a straight
support it. jacket. Thus I did not propose a 30-day
Mrs. FENWICK. Mr. Chairman, will formal notification procedure such as the
the gentleman yield? one used in Foreign Military Sales. I
Mr. ALEXANDER. I yield to the gentle- think we should first try an informal
w
when permission to revise and extend her telephone calls. By this I do not mean a
foreseen availability is established. remarks.) call a few minutes before an export li-
The use of export controls for foreign p Mrs. FENWICK. Mr. Chairman dur- cense is approved, perhaps only to the
policy Purposes is accelerating at an ing the House's consideration of H.R. very busy chairman or ranking member
alarming rate. The use of such controls. 4034 last Tuesday. September 11, the of the committee. In view of some past
has not proven to be an effective deter- House approved my amendment regard- problems in advising Members informally
rent on the whole and merely serves to ing major sales to countries which have of potential arms sales, the administra-
weaken the U.S. trade position. repeatedly provided support for inter- , tion would be well advised to also inform
This is pointed out in an excellent ar- national terrorism. The amendment re- all the interested members of the com-
ticle published in Goverment Execu= quires the administration to notify the mittee, especially those on the relevant
LAGOMARSINO) the floor manager for the
minority side, were kind enough to accept
the amendment and thus we did not take
up the time of the Members to elaborate
upon my intention as to how it would
work.
I thought it might be useful guidance
for those who might be involved in, or
affected by the process, if I took this
opportunity to explain it more fully.
_ The amendment is a simple one. It
would require that the House Foreign
Affairs Committee and the Senate For-
eign Relations Committee be informed
before formal approval of a license for
the export of such items as large planes,
or large numbers of heavy duty vehicles
to a country which has repeatedly sup-
ported acts of international terrorism.
The amendment would formalize what
the State Department has started to do
with the other body, discuss potentially
controversial sales in advance with in-
terested members. This has happened as
a result of some disputes in the past,
which developed after some members
had learned of sales of large cargo-carry-
ing planes to such countries as Libya,
which has given support to a number of
terrorist groups.
The intention of my amendment is to
assure that the relevant committees of
both houses of Congress are kept abreast
of the State and Commerce De
art
t'
0
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H 8076 CONGRESSIONAL RECORD-HOUSE September 18, 1979
regional subcommittee. I think we can But there are situations in which coun- were agreeable to our allies in Cocom,
count on the commonsense of the State tries are anxious to buy our equipment then it could be done. From what the
Department to tell us sufficiently in ad- and such sales are clearly more desir- gentleman says about lithium, I would
vance, so we can give thought to the able than foreign-made alternatives. certainly say that there is reason to re-
matter. I think we can try this rela- There are other situations in which the view that item, with great care in view
tively informal approach before con- sale might have symbolic value and, in- of its nuclear and computer uses, to see
sidering a more formal procedure. , deed, approving it, might help the. efforts whether controls are needed and effec-
In any event, there probably will be to wean countries away from supporting tive. I can say to the gentleman that the
few of these cases in any given year. The terrorists, This amendment is a responsi- , Subcommittee on International Eco-
kind of thing we are worried about in- ble and measured approach to enable nomic Policy and Trade, which I have
th h t h r will itself investigate
n
r o c ai
tensibly sold for civilian use, but which
could be used to support military oper-
ations, by transporting troops? equipment
or munitions, or assisting terrorist oper-
ations.
One example is large aircraft. Libya
used American-built airliners to try to
keep Idi Amin in power by airlifting
troops and equipment to Uganda. At. the
moment, proposed sales of jumbo jets are
being held up to Libya. Another example
of the type of thing Congress is con-
cerned about took place last year when
the administration approved selling
Syria four L-100's, the civilian version
of the C-130 military transport plane.
The sale was approved, without telling
Congress, at the very time there was a
debate underway over whether the ad-
ministration's foreign aid appropriation
for Syria should be approved for foreign
policy reasons despite Syria's shelling of
Christian areas of Lebanon.
The $7 million figure was chosen in
order to be consistent with the Arms
Control Export Act, section 36(b) which
governs formal notifications to Congress
of sales of equipment designed for-mili-
tary purposes.
Administration officials have said their
records indicate that only five export
licenses in 1978 and two so far this year
would have fallen under the scope of my
amendment. Thus, the amendment
would not put a major burden on the
executive branch.
It would be up to the Secretary of
State to make the determination on
whether the country has repeatedly pro-
vided support for acts of terrorism.
There are guidelines, such as training
and sanctuary, which have been worked
out by various legal experts and are con-
tained in the omnibus antiterrorism acts
which were the subject of hearings last
year and are in the committee stage
again now. These guidelines will be use-
ful in making a determination. In addi-
tion, of course, there is intelligence and
other information which might be useful
in making a determination. It is my ex-
pectation that the State Department will
not be too legalistic about this in terms
of making sure every "t" is crossed be-
fore declaring a country has repeatedly
supported acts of terrorism. Hard evi-
dence is not always immediately avail-
,
o
both the executive and legislative a o
branches to consider more fully the pro- this matter further and see that a
posed sales. The amendment also makes thorough review is made by the appro-
it clear that Congress-in line with its priate executive agencies of the basis
foreign policy responsibilities-should be and form of controls on lithium.
kept informed about major developments Mr. BROYHILL. I thank the gentle-
in relations with countries which have man for his statement.
supported terrorists. The thing we are concerned about, of
It is a sensible amendment and I was course, is getting some timely action
pleased to see its adoption by the on these applications. Under the present
House.O law it is taking actually months in order
Mr. BROYHILL. Mr. Chairman, I to get action on these applications and,
move to strike the last word. of course, the lithium metal that is being
Mr. Chairman, may I have the atten- exported has no use for the products or
tion of the chairman of the subcommit- uses that I mentioned just a few mo-
tee? I would like to ask the gentleman ments ago. I would appreciate the co-
from New York (Mr. BINGHAM) a ques- operation of the gentleman and the com-
tion. mittee in this regard.
As the gentleman knows, lithium Mr. BONKER. Mr. Chairman, I move
.metal is manufactured in my congres- to strike the last word.
sional district, and as he also knows, Mr. Chairman, I would like to invite
lithium metal requires a validated li- my colleague on the subcommittee, the
cense for export under this act. As I un- gentleman from Michigan (Mr. WOLPE),
derstand it, this is for certain national to respond to several inquiries concern-
security reasons; is that correct? ing section 107.
0 1550 The subcommittee has information
Mr. BINGHAM. If the gentleman will that refineries in the Netherlands An-
yeld, it is my understanding that lithium 'tilles (Aruba-Curacao) will have about a
. _harrpl-ner-dav excess refinery
metal, as well as lithium hydride and
lithium aluminum hydride, are on the
control list and do, require validated li-i
tenses for exports. It is my understand-
ing, also, that the basis for this require-
ment is that certain forms of lithium are
used in the manufacture of silicone chips
for advanced computers, which is a
critical technology, and that an isotope
of lithium can be used in nuclear
weapons production. -
Mr. BROYHILL. I thank the gentle-
man. I make this inquiry because I am
informed by the Lithium Corporation of
America that .the time required for proc-
essing license applications for, export of
lithium has greatly increased in the past
year and that, furthermore, the com-
capacity by 1982. They are able to handle
Alaskan-type (sour) oil. Their excess ca-
pacity is about 250,000 barrels per day
now.
My question concerns the language in
the bill that the gentleman from Michi-
gan (Mr. WOLPE) has authored.
If Alaskan production rises from 1.2
million barrels per day to 1.8 million
barrels per day as projected and if there
is a saving to the American consumer,
then there is nothing in the amendment
which would prevent Alaskan crude oil in
excess of 1.2 million barrels per day from
being refined "in bond" by Antilles re-
fineries strictly for U.S. consumption?
Is that the gentleman's interpretation?
Mr. WOLPE. If the' gentleman will
pany is losing sales to European com- yield, the gentleman is correct. There is
petitors who are freely exporting lithium. nothing in the language of this provision
Finally, the forms of lithium that the that would prohibit any such arrange-
Lithium Corporation of America seeks ment if the consumer benefit criteria de-
licenses to export are- not suitable for veloped in the legislation are met.
the uses the gentleman mentions which Mr. BONKER. I have a second ques-
might be detrimental to the national tion.
security. I therefore inquire further of The United States and Canada have in
the gentleman whether this would not recent years periodically agreed to lim-
seem to be a basis for removing lithium ited exchanges of certain types of crude
from the control list. oil destined for specific refineries. These
Mr. BINGHAM. I would say to the exchanges have been mutually beneficial.
able. But there seems to be a general gentleman from North 'Carolina that a They have provided crude oil in some
agreement among many experts that very careful review of the uses, destina- instances where no alternative sources
certain countries have been supporting tions, and actual foreign availability for of supply existed. Exchanges for these
terrorists, such as Libya, Iraq, South lithium would have to be made before it purposes are continuing today, and op-
Yemen, and perhaps Syria which sup- would be prudent to determine to re- portunities for further exchanges will
ports the wing of the PLO, Saiqa, which move it from controls. Procedures are undoubtedly develop in the future. Am I
reportedly was involved in the recent at- provided in this legislation for such re- correctly interpreting your language
tack on the Egyptian Embassy in views. If the Secretaries of Commerce when I say that there is no intent to re-
Ankara. and Defense would concur, on the basis strict or to prevent continuation of ex-
Mr. Speaker, this amendment does not of such a review, that the item should changes of this type?
provide any magic levers or solutions. be removed from controls, and if this Mr. WOLPE. if the gentleman will
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September 18, 1979 CONGRIESSIIONAIL RIECORID -- HOUSIE H 8 77
yield, that is correct. There is no intent Japan is by using foreign ships. If you Mr. MCKINNEY. Mr. Chairman, will
whatever to limit or restrict in any way use foreign ships, that certainly does not the gentleman yield?
any exchange arrangements of the type contribute to the favorable balance of Mr. LAGOMARSI.NO. I yield to the
the gentleman has just described. trade because the money would then go gentleman from Connecticut.
Mr. BONKER. I thank the gentleman. outside the country, and the considerable (Mr. McKINNEY asked and was given
Mr. LAGOMARSINO. I move to strike investment of the American maritime in- permission to revise and extend his re-
the last word. dustry would be lost, or at least impaired. marks.)
(Mr. LAGOMARSINO asked and was I would cite another point as well. Mr. McKINNEY. Mr. Chairman, I
given permission to revise and extend his Many of us met with Prime Minister totally agree with the gentleman.
remarks.) Ohira of Japan, when he was in the Mr. Chairman, I rise to speak against
Mr. LAGOMARSINO. Mr. Chairman, United States. We are putting consider- the amendment. Just a few weeks ago the
II have studied the issue of exports of able pressure on the Japanese to increase administration issued six departmental
Alcska, oil for some time. I sat through their imports of our goods, agricultural and agency reports on the selection of a
all of the hearings we held, and I talked products as well as manufactured goods. pipeline route to carry Alaskan North
to a lot of peopl0- and heard a lot of tes- If we sell them hundreds of millions of Slope crude oil from the west coast to
timony, and I think the tougher provi- dollars worth of oil it certainly is going points east, the selection of any one of
sion that we can enact the better. I sup- to cut down on their interest in buying those routes represents the final decision
port the language in the bill concerning more from us. They will be able to say, in a project that began a decade ago-
this subject. "We have improved the balance of trade," the delivery of billions of barrels of Alas-
Let me give you just a couple of rea- and, of course the United States will be kan oil to domestic markets, that oil has
sons: First, any pipeline that is being left having to buy that oil from someone the potential to regain for us a portion
proposed from the west coast to the mid- else-with no change then in overall bal- of the political and economic independ-
dle of this country with or without a ance of trade. ence forfeited by allowing ourselves to
northern tier pipeline, I think, will. never Many environmentalists are opposed to become dangerously reliant on foreign
be built unless it is very clearly under- exporting Alaskan crude oil. They have oil. I see but one potential obstacle
stood that it is going to be extremely dif- also given further consideration to the threatening the completion of this 10-
ficult, if not impossible, to export oil. I question of building new refineries. Their year project. That is the possible export
am well aware that Sohio has announced conclusion is that compared to older, pol- of Alaskan oil. Today, Mr. Chairman, we
abandonment of its plans. But that does luting refineries, new large refineries us- have the opportunity to remove that
not mean they--or some new applicant ing the latest technology are preferable final threat.
cannot decide to go ahead with it or for meeting our domestic oil needs. Section 107 of the bill before us now
some other pipeline. This is especially true to meet the re- (H.R. 4034) contains a provision which
Second, probably the best argument quirements of refining our heavy crude would restrict the export or exchange of
that was used by the administration, if resources. Without a prohibition on the oil from Alaska's North Slope. As many
you believed it, was that if we did not export of Alaskan oil, there will be little of my colleagues are aware, it is a meas-
export oil it would preclude an increase incentive to proceed with changing exist- ure which I have sponsored and advo-
in production in Alaska. ing refineries to be able to process Alas- cated for nearly 4 years. It is a measure
Very interestingly, in early May, At- kan oil or heavy crude which is so abun- which I believe to be an essential compo-
lantic Richfield Oil Co., which is one of dant in California. It is noteworthy that nent of any future U.S. energy policy.
the Alaskan producers, announced it is although we were advised several years Unfortunately, not everyone shares that
going to increase its production by 25 ago that total west coast refinery ca- view.
percent, 300,000 barrels a day, in 1980. pacity was 500,000 barrels per day, such The export restriction in this bill is an
Company officials also said they antici- refining capability is now some 830,000 extension and strengthening of an
pated no serious problems in transport- barrels per day. amendment I offered in 1977 and was
ing and distributing the oil to refineries It will be interesting to see if the en- contained in the Export Administration
in the continental United states, al- vironmental groups will continue to en- Act of that year. Opponents of the meas-
though transportation under current dorse such programs once they get under ure, 2 Years ago, argued in favor of ex-
conditfons would be relatively expensive. way. Porting Alaskan crude to Japan in ex-
The present surplus of Alaskan crude oil It is important to remember, also, that change for that country's share of
that cannot be refined on the west coast the language in this bill does not auto- Mexican or OPEC imports. Export pro-
fs shipped through the Panama Canal to matically prohibit export of Alaskan oil. ponents argued that such an arrange-
refineries in the southeast. The conditions to be met are very strin- ment would ease the "glut" of oil on the
With regard to the Panama Canal, I gent, to be sure, but they do provide that west coast, result in a $2 per barrel sav-
am surprised that some of the people if benefits can be passed on to the con- ings in transportation costs and thereby
who support the administration gener- sumer and the refiner, then exports are increase the incentive to produce oil on
ally and who support the Panama Canal possible. If those provisions can be met, the North Slope. If those arguments had
treaty are lining up on the wrong side of then a trade could be a good thing. How- any validity at *the time, what little
this issue. Because, if we should export ever, until those conditions are met, we credence they enjoyed has been totally
Alaskan oil, it would cut down on the should not export Alaskan oil. destroyed by recent development in
tolls for the Panama Canal, which is not Probably the best reason for not ex- world oil markets.
one of the things that has been forecast, porting Alaskan oil is that if we do not Mr. Chairman, there is no glut of oil
And then, American taxpayers are going prevent it-or at least preserve that op- on the west coast. As the Price of Alaskan
to have to either dig that money up, tolls tion-if we do not take strong action, I Oil rises, so does the amount of Alaskan
are going to have to be increased or we think that the credibility of the Ameri- oil refined on the west coast. In fact, west
are going to have a serious problem with can people and the Government of the coast refiners have increased their
Panama. If tolls are increased as a result United States in relation to oil-and how "take" of North Slope crude by 325,000
of export of oil, it will have a very seri- we handle oil-is going to be even more barrels a day (from 600,000 to 925,000)
? ous adverse effect on the countries of seriously eroded than it already is, if in the last few months. Asa result, every
South America, especially western South such a think is possible. I do not know one of the 1.3 million barrels of Alaskan
America. It could easily do more harm how you go from zero to minus. But that crude produced each day is being refined
than any good from the canal treaty. will happen, I can guarantee you, espe- and consumed in the United States.
Let me mention one other thing. cially when you consider public reaction Furthermore, U.S. refiners in Puerto
Everyone was assured when the Alaskan to the export of oil products to Iran. Rico and the Virgin Islands are eager to
pipeline was built that the oil would not The bottom line is that if the Congress secure any additional production from
be exported; it would be used in this of the United States is going to have the North Slope. Even decontrolled do-
country. Substantial investments were anything to say about oil policy in this mestic oil is a desirable alternative to
made by the American maritime indus- country, I think we had better preserve spot market crude.
try to build ships to carry that extra vol- the strong provisions concerning export The potential for slightly lower trans-
ume of oil from Alaska. The only savings of Alaskan crude oil that do give the portation costs, in the event of an ex-
that there really are in shipping oil to Congress the final say. change agreement, remains, However,
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the $2 per barrel savings represents no
relief for U.S. consumers. Any, transpor-
tation cost benefits would be entirely
captured by the North Slope producers.
And, even those industry sources have
indicated that there is no further need
for financial incentive to market Alaskan
North Slope Crude. After-tax profits for
Alaskan oil landed on the west coast
have risen 85 percent (to $4.11 per bar-
rel) since December. The North Slope's
largest producer, Sohio with 51 percent
of the oil, has posted record-breaking
earnings increases of 302 percent and
an additional 70 percent. in the first two
quarters of this year respectively. Other
producers have enjoyed similar good
fortune. In short, Alaskan oil production
is an extremely lucrative venture without
the option of exports. However, the same
does not hold true for the question of
our supply security. In the event of an
exchange agreement, the protection and
security forfeited would be irretrievably
lost.
Mexican and OPEC crudes are higher
priced than Alaskan oil. As a result an
exchange agreement would result in a
loss to our balance of payments of about
$1 for each barrel exported. But perhaps
more important is the fact that neither
source, OPEC or Mexican, can offer the
guarantee of fuel for our factories and
heat for our homes supplied by Alaskan
oil. In May and June of this year, Mexico
could fulfill only 60 percent of its con-
tract obligations due to oil production
difficulty. Perhaps the largest U.S. de-
livery of Mexican crude was that which
washed up on the gulf coast shores just
weeks ago. Furthermore, political in-
stability in the entire Mideastern region
argues irrefutably against engaging in
an exchange which results in additional
reliance on OPEC crude. The fact is,.the
only secure supply of oil is that which is
produced from domestic wells.
Still, Mr. Chairman, the measure
which my colleague, Mr. WOLPE, and I
have sponsored does not preclude the
possibility of exchanging Alaskan oil at
some future date. The legislation clearly
allows for unforeseen discoveries and
new configurations in world oil markets.
Under the provisions of section 107 of
this bill, the President may submit a plan
to export or exchange North Slope crude
oil, accompanied by the requisite find-
ings, to the 'Congress for approval by
both Houses within 60 days. Indeed, the
Presidential findings are stringent as
well they should be. The findings require
the United States to realize documented,
economic benefits from an exchange,
and, no such exchange proposal could
in any way reduce the amount of oil
available to this country. Nor could any
exchange agreement proceed if any dan-,
ger to U.S. supplies developed. Admit-
tedly, a small consolation in the absence
of an east to west pipeline system.
On the other hand, the legislation al-
lows for the use of Alaskan oil to honor.
our commitment to Israel, should the
politics of the Middle East deny that
country sufficient supply. In addition, the
measure provides exemptions for the ex-
change of Alaskan oil with Canada and
Mexico as an added protection for our
northern tier refiners and those on the
CONGRESSIONAL RECORD-HOUSE September 18, 1979
gulf coast. In short, Mr. Speaker, sec-
tion 107 is a well reasoned, fairly bal-
anced approach to the use of Alaskan oil.
It holds the North Slope producers to
their promise of delivering that oil to the
Lower 48, while at the same time ac-
knowledging the reality of changing oil
markets.
As I have said, we are closer than ever
before to reaping the benefits of Alaskan
oil development. To let those benefits slip
through our fingers at this time would be
a mistake of unmatched proportions. I
urge all of my colleagues to support sec-
tion 107 as contained in the bill, and
defeat the amendment.
Mr. CLAUSEN. Mr. Chairman, I want
to again restate my opposition to amend-
ments which would have the effect of
lifting restrictions contained within H.R.
4034 prohibiting an export or exchange
of Alaska North Slope oil.
Over the past 2 years, I served as the
ranking minority member of the Special
Investigations Subcommittee of the In-
terior and Insular Affairs Committee.
This subcommittee was given, in the 95th
Congress, the responsibility of overseeing
the disposition of crude oil transported
to Valdez, Alaska, through the trans-
Alaska pipeline. The subcommittee was
interested in seeing to it that section 410
of the trans-Alaska Pipeline Authoriza-
tion Act-Public Law 93-153-is imple-
mented. This section provides in part
that-
[Tlhe President shall use any authority
he may have to insure an equitable alloca-
tion of available North Slope and crude on
resources, and petroleum products among
all regions and all of the several states.
We must remind ourselves that when
Congress, in 1973, passed the Trans-
Alaska Pipeline System Act, we gave full
assurance to all of the American people
that Alaska oil would be available
throughout the Nation to address our
domestic energy requirements.
Mr. Chairman, I have always been an
ardent supporter of energy independ-
ence. Today we clearly see an urgent
national need for more control over our
use and supply of energy. The only solu-
tion to our present dependence on the
foreign oil cartels is American energy
independence.
I recently supported and cosponsored
H.R..4985. This bill provides a balanced
approach in establishing an Energy
Mobilization Board to cut through
bureaucratic redtape when addressing
domestic energy projects.
Last Friday morning, I met with the
new Energy Secretary Charles W. Dun-
can, Jr., to get acquainted and exchange
views on a number of energy related
matters. One area we discussed was the
creation of a national energy distribu-
tion network. An effective Domestic
energy distribution network, including
pipelines, seaports, terminal facilities
and refineries, is the vital part of an
overall program which fulfills the con-
gressional promise of equitably distrib-
uting Alaskan and other crudes to all
regions of our country. Hopefully, an
Energy Mobilization Board will assist in
the development of a domestic energy
transportation system. 'A domestic oil
distribution network is sadly lacking and
our mobilization systems leave much to
be desired. I
Alaskan oil is vitally needed within the
United States. Recently many of us
learned our strategic petroleum reserve,
SPR, program contains only 91 million
barrels of oil. This amount is painfully
short of the 250-million barrel target
originally set for this time by the ad-
ministration. Recent actions by Iraq and
Nigeria lend support toward the notion
of a more restrictive export policy. These
actions; coupled with our lacking SPR
program, delineates a bottom line of
keeping Alaskan oil within our domestic
borders.
West coast refineries in the past
months have increased Alaskan oil re-
fining capacity from approximately 500,-
000 barrels daily to 834,000 barrels. I
am hopeful we can see a steady increase
in refining capacity.
Mr. Chairman, I have learned the
throughput capacity of the trans-Alas-
ka pipeline will reach 1.5 million barrels
per day by the end of this year. An ex-
port or exchange of Alaska North Slope
crude oil would be against our best na-
tional, economic, and security interests.
The CHAIRMAN. Are there other
amendments to section 109?
AMENDMENT OFFERED BY MR. SHANNON
Mr. SHANNON. Mr. Chairman, I offer
an amendment.
The Clerk read as follows:
Amendment offered by W. SHANNON: Page
-45, insert the following section after line 21
and redesignate subsequent sections accord-
ingly:
EXPORTS OF HIDES AND SKINS
SEC. 110. Subsection (f) (1) of section 7 of
the Export Administration Act of 1969, as
such section is redesignated by section 104
(a) of this Act, is amended-
(1) by, inserting "(A)"after "(f) (1)"; and
(2) by adding at the end thereof the fol-
lowing:
"(B) Notwithstanding the provisions of
subparagraph (A), in order to carry out the
policy set forth in section 3(7) of this Act
with respect to cattle hides and skins, cattle
hides !and skins may not be exported in any
year in an amount which is a greater per-
centage of the total supply of cattle hides
and skins produced in the United Staten
than the percentage of the total supply of
cattle hides and skins produced in the
United States which were exported during
the years 1974 through 1978. The limitation
set forth in the preceding sentence shall not
apply if the President, after receiving the
recommendations of the "Secretary and the
Secretary of Agriculture, determines that-
"(I) countries which are major producers
of cattle hides and.skins and which, on the
effective date of this subparagraph, have in
effect restrictions on the export from those
countries of cattle hides and skins resume
reasonable levels of exports of cattle hides
and skins; or
"(ii) during the last calendar year ending
before such determination is made, the sup-
ply of cattle hides and skins produced in the
United States, after deducting the amount
of such hides and skins exported during that
calendar year, was sufficient to meet the de-
mands of the domestic economy.
The Secretary and the Secretary of Agricul-
ture, shall submit to the President recom-
mendations so that the President has suf l-
cient information to make the determina-
tion described in this subparagraph. Before
making such recommendations, the two Sec-
retaries shall hold public hearings, after pro-,
viding reasonable notice thereof, and shall
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September 18fl 1979 cONGIt ESSXONAIL RECORD- HOUSE MI 0079
afford interested parties an opportunity to on hides. Romania, a Communist coun- ture, other major hide producers agreed
submit written comments, with or without try and a major purchaser of U.$. hides, to moderate their export controls, or if
oral presentation, at such hearings. Any de- buys regardless of the price as a matter- there were no domestic short-supply
this subparagraph temination of the the shall be President valid for made a period under of state employment policy. This is not situation. If both a short-supply situa-
of one year.". a question of America's industrial com- tion did exist and in the opinion of the
Mr.'SIiANNON (during the reading), petitiveness in international trade. It is President other hide nations were still
Mr. Chairman, an inequity which leaves American restricting exports to an unacceptable
Mr. tamendment I I ask ask unanimous ous workers and industry with no chance to degree, then export controls would be
that the and e printed a considered consent
1Zscoaj. compete and no chance to survive. Last placed on cattle hides. These controls
The CHAIR printed in the year Brazil, which has embargoed its would equal the historical percentage of
the request MAN. Is hide exports, increased its exports of hides exported over the past 5 years.
the there objection to gentleman from finished leather goods to the United Even if controls were in effect, more -
Massachusetts? States by 40 percent. This does not work than half, approximately 56 percent, of
There was no objection. to our advantage in regards to America's U.S. hide production could be exported.
(Mr. SHANNON asked and was given balance-of-payments difficulties. The amendment would also strengthen
permission to revise and extend his I have been asked, why cannot our the negotiating hand of the Special
remarks.) manufacturers purchase the hides at a Trade Representative.
Mr. SHANNON. Mr. Chairman, I offer higher price? The answer is simple- I am not asking for a law which pro-
an amendment to limit U.S. exports of foreign demand for hides is insatiable. tects industry from foreign competition.
cattlehides to reasonable historic levels The Japanese import close to one-third I am not asking for an amendment which
until major suppliers of hides moderate of our hides. But Japanese markets are will hurt the American cattle industry.
their export controls, or until adequate protected by a highly restrictive import I am asking for an amendment which
supplies become available to domestic licensing system for finished leather will give the 400,000 leatherworkers in
users of hides. This amendment is a goods. The Japanese leather using indus- America a fighting chance to keep their
moderate and carefully worded response try is in a position to bid up the price jobs, and the American consumer badly
to the critical shortage of hides in this of hides without fear of foreign imports. needed relief from rising prices.
country. I have been asked if short-supply ex-
According to the Department of Com- port controls are against the spirit of the 1600
merce, in 1977, out of a total of 41 million MTN? Absolutely not. Provisions exist Mr. SMITH of Iowa. Mr. Chairman, I
hides produced In this country, 58 per- in the GATT for nondiscriminatory rise in opposition to the amendment.
cent were exported. That left a little over short-supply controls. It is the actions Mr. an yield? Mr. Chairman, will the
17 million for domestic use, approxi- of our foreign hide importers which are gentleman
mately the amount needed. The price against the spirit of the MTRT. Mr. SMITH of Iowa. I yield to the
was under 37 cents a pound. I have been asked if this amendment gentleman from %owa.
This year, 34 million hides will be pro- would adversely effect the beef cycle or (Mr. BEDELL asked and was given
duced. Of that number, over 70 percent the price of beef. The answer is no to permission to revise and extend his
will be exported, leaving only 10 million both questions. Both the Department of remarks.)
hides for an industry that requires two- Commerce and the Department of Agri- posed Mr. amen catt L. Mr. Chairman, the pro-
thirds again as many. And at a price culture have stated repeatedly that the exports f s o f a hides to restrict "reasonable
double that of 1977.. Price of hides has no effect upon the epo cattle hides to "reasogovern-
The effect of this acute shortage on supply-hides, which account for less men site levels" until rolsion d othe more than 400,000 workers in the than 10 percent of the value of a steer, menu remove their controls m hides -
domestic leather industry Is predictable. are only a byproduct of thg steer. Cattle domestic supply exceeds domestic de-
domestic will lose their jobs. The effect are raised in accordance with the price mend.
on the consumer, according the Presi- of meat; not hides. And the price of meat The Shannon-Carter amendment, in
dent's Council on Wage and Price Stabil- is determined by supply and demand for opinion, is i advised on several flty, will be onerous. Industry estimates meat. Counts. It clearly s contradicts the under -
Outshoo shoe price rises at at least $10 a pair I have been asked if this amendment lying tenet of both the Export Adminis-
this year. would hurt the rancher. Once again, the tration Act and the ongoing multilateral
The cause of this shortage is rooted in answer is "No." According to the special srab negotiations: pme t, and of free in-
the
the unfair trade practices of a number of trade representative, estimates imply stabi lity and development, and free in-
nations. Many foreign countries that these moderate export . controls tercourse between nations depend criti-
wlaich manufacture leather goods do not would raise the price of, hides on the tally on the least restrictive trade con-
produce cattle. These nations purchase international market by approximately trols possible.
their raw materials on the world market, the same amount that prices would drop Unilateral U.S. s imposition of export
But the United States is the only major in the domestic market. The net effect controls on hides may set a dangerous
exporter of hides. Brazil, Uraguay, India, would be small, precedent, triggering retaliatory action
and Argentina all produce large quanta- Beef matters are dealt with in other by other nations rather than leading to
ties of hides, but, each severely restricts legislation now pending before this p the orts dnvisio one d th agathorhideaxe
exports. Only Argentina has agreed to House. This amendment will have little ame envisioned o r, authors of action
the
moderate its export controls-other pro- effect on the rancher. But it will have a amendment. Moreover, restrictive action
ducers have flatly turned down our re- life-or-death effect on the leather Indus- by the United States may well mark this
quests for ending their hide export em- try. According to industry figures and supply uncertainty, an unreliable trade partner;
bargoes. Today, the United States, while the Department of Commerce, close to pply changing political he result t ,could
producing only 15 percent of the world one-third of the price of a pair of men's wally oanging policurrents,, could
hide supply, provides close to two-thirds shoes is due to the cost of leather. But make United more reluctant to trade with
of the world market. When a shortage this shortage does not affect only eastern the United States.
developes, the United States is forced to shoemakers. it affects the southern tex-hide In the shorter run, too, climitation of
ounterproductive.
bear the full brunt. The American foot- tile workers. It affects the Texan who exports Kwould be ann n carterr amendment
endwear and leather using industry has be- produces industrial gaskets and valves. passes, s the Shannon-barter balance-of-
come a hostage to the restrictive trade It affects the midwestern bootmaker. our already bleak balance-of-
practices of other nations. And it affects every American who buys payments situation would worsen: hides
% am a stro leather goods, ' account for $600 million of the $30 billion
ng supporter of freer trade. in annual U.S. agricultural exports. Fur-
If the leather industry had come to me Under my amendment, an export ther, the underlying supply shortfall
and asked me to offer an amendment to control mechanism would be established might be aggravated. Much of the cur-
limit imports of leather goods, I would for bovine hides and skins. Controls rent supply problem can be traced to the
have refused. But free trade in leather would not be triggered if one of two sit- so-called cattle cycle. We are in a period
does not exist. The Japanese buy their uations existed: One, if, in the opinion in which there are simply fewer cattle
hides behind protected markets. Other of the President, with the advice of the to be slaughtered. If hide exports are
producing nations have export controls Secretaries of Commerce and Agricul- restricted and domestic prices drop as do-
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118080 CONGRESSIONAL RECORD-HOUSE September 18, 1979
mestic supply increases, cattlemen will want to shift part of the cost to the shoe manufacturer. It is not in the in-
receive less for their livestock. Cattle cost of meat. That is what it has got to terest of the beef consumer. It is not in
producers will have little incentive to re- do., A slaughterer must secure a given the interest of the farmer. That is for
build their herds. amount out of the carcass. if they get sure. It is not in the interest of our
In addition, it must be emphasized less out of the hide, or out of the offal, he deficit of payments. That is for' sure.
that any advantage to the U.S. leather is going to shift part of it to the meat. It is unfair. Anybody must see it is
goods industry which flows from the . What has happened here? Since June, unfair.
Shannon-Carter proposal will come at the price of hides is down 34 percent. I What this amendment would also do
the expense of other groups. Since mid- challenge anybody supporting this would give to foreigners the right, to
May, U.S. cattle producers have seen a amendment to show me one manufac-. decide when export controls are re-
15 percent decline in cattle prices; a drop 'turer who has reduced the price 34 moved. When foreigners do certain
in hide prices following export restric- cents, let alone 34 percent of the price things, then export controls go off.
tions would further depress the market of his shoes or his leather products. Not Do we want an export control law that
value of cattle. Meatpackers meanwhile one dime has been reduced even though gives foreigners the right to decide when
would be faced with the prospect of the price has been down 34 percent in we trigger these kinds of actions? I
either absorbing the loss from falling that period of time. think not.
hide prices or passing those costs along Let me 'tell my colleagues what hap- I say that nobody has a constitutional
in the form of higher beef prices. Nor pened before. right to have a leather seat in his Rolls
is there any assurance that cheaper In 1966, there was a proposal that had Royce. We could not have a shortage of
leather goods would offset these in- been around for a couple of years. No- leather products in this country if every
creases to the consumer. body thought they would do anything woman had more shoes and more pocket-
In any case, artificial restrictions on about it, but to and behold, 1 day the books than Twiggy. There is less than
trade are stopgap measures at best.. On- Secretary of Commerce approved an ex- $2 worth of raw hide in a pair of shoes.
going multilateral negotiations may port control on hides. If the price has increased greatly, it had
eventually provide some relief for U.S. The subcommittee funding the Com- to be because the tanners increased their
leather manufacturers. But, more im- merce Department happened to be take.
portantly, we must address the causes meeting, marking up the bill on. fund- We could not have a shortage of
for the competitive disadvantage of our ing.for the Department of Commerce. leather products in this country if every
domestic leather industry, seeking to in- So it happened to be the right time. horse owner had more saddles than Roy
crease productivity, foster innovation, We put an amendment in the bill. Rogers. What we are talking about is
and encourage renovation of deteriorat- I happened to have drawn the amend- rationing a surplus product. It is not in
ing plants and machinery. ment. It prohibited them from using our national interest and is unfair. I
The Shannon-Carter amendment is any money in the bill to administer the urge a no vote on the amendment.
laudable in its objective of aiding a order. Well, that killed the order, but The CHAIRMAN pro tempore. The
troubled industry. Yet we would be it was in effect for about 2 months time of the gentleman from Iowa (Mr.
shortsighted to help one ailing industry before the bill was signed. SMITH) has expired.
while threatening the already precarious Let me tell the Members what hap- ' (At the request of Mr. PHILLIP BURTON
health of others. Moreover, hide export pened in that 2 months. We had been 'and by unanimous consent, Mr. SMITH
restrictions not only worsen the U.S. selling a vast number of inferior hides of Iowa was allowed to proceed for 1 ad-
position in the world trade arena, they overseas. The foreign purchasers had ditional minute.)
also fail to address the fundamental is- not developed an artificial leather mar- Mr. PHILLIP BURTON. Mr. Chair-
sues of a global hide supply problem and ket, but they saw then that they could man, will the gentleman yield?
a less productive U.S. leather industry. not depend on us for these inferior hides, Mr. SMITH of Iowa. I yield to the
Mr. SMITH of Iowa. Mr. Chairman, so they developed an artificial leather gentleman from California.
make no mistake about it, we are not industry. Mr. PHILLIP BURTON. I thank the
talking about something that is in short Within a couple of years, with their gentleman for yielding.
supply. new capacity, they flooded the shoe one of the very few parts of our econ-
Supply is not the issue. There has al- market in this country with artificial omy that appears to be working, and
ways been a surplus of cattle hides in leather shoes. It reverberated to the one need only look at our balance of
the United States ever since the May- damage of the U.S. shoe manufacturer. trade to firm up this conclusion, is the
flower landed in Virginia or this country. They are so dumb they cannot see that. agricultural sector. It just plain does not
Never, one day, since that time has there Or I should say they still do not seem make sense to support this amendment.
been a shortage of hides in this country. to understand that a short time gain is I share the views expressed so ably by my
Now, what we have here is an attempt a long term -loss. They are going to get colleague in the well.
to ration a product that is in surplus more of that same kind of thing every Mr. SMITH of Iowa. I thank the
supply. time export controls are threatened or gentleman.
If the Members do not believe that, ordered. Mr. ANDREWS of North Dakota. Mr.
just look at what I have in my hand. In 1972, there was another one of Chairman, I rise in opposition to the
It says "10" on it. It looks like some- these kinds of export control orders. It amendment.
thing one would use to play monopoly. I depressed the leather market and in- Mr. Chairman, let us get a little com-
guarantee my colleagues it is not. That creased the imports of cheaper shoes monsense in this argument in the House.
is a rationing stamp. . and products. It hurt our manufacturers I just went out to the Speaker's lobby
In 1972. before someone with 10 cattle even further. The more you show the and picked up a copy of today's Wall
hides could sell them, they had to get foreigners that they cannot depend on Street Journal. They post the price of
one of these stamps. They had to go to us for hides, the more they develop hides there. Hin Chicago right now
a bureaucracy and get a stamp before their alternative sources of material;
they could sell something they had a and they can flood the markets with are bast selling ng year, for Hides e 73 ce3ynsold ts nts a for pound. 61 cents a
right to have, that they had a right to those kinds of materials, because they
merchandise. That is the kind of a situa- have superior methods of manufactur- pound. Now that is an increase of 12 cents
tion we are talking about. It is ration- ing. During one of these periods, foreign a pound.
ing of a product that is in surplus sup- manufacturers went to welding the up-
Ply. _ per into the sole. They forced the Amer- My colleague a few moments ago said
The promoters of the amendment are ican manufacturer to get away from that does not make any difference to the
not satisfied to have a price advantage. some of their archaic piecemeal methods farmer, to the cattleman, to the pro-
They want price controls. and start doing the same thing. That ducer. The heck it does not. There is a
They now have a price advantage. is what happens when one tries to rig 65-pound covering on a fat steer and
They can buy for the world market price the world market with something like that 65-pound hide brings 73 cents a
less the cost of transportation, and the an export order. pound, which means more than $50, $50
cost of transportation can be substan- What I am saying is, this amendment that does not have to be paid for by
tial. But they want more than that. They is not in the longterm interest of the consumers in the price of hamburger.
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M-8031
All that happens when you sell a steer- Even though the number of cattle be- did not go down. Remember 65 cents a
is you sell a steer to a plant and that Ing slaughtered is down, the United pound raw sugar? How many of you have
plant takes it apart sad sells the beef, States will still slaughter about twice the paid less for a Coca Cola now that the
It sells the bone meal, it sells the hide, number of hides our domestic industry price of raw sugar is 8 cents,
and what we get for the one affects what can use. There is nothing to prevent the According to the Department of Agri-
consumers have to pay for the other. domestic industry from bidding on the culture's report, "U.S.. consumers. will
Let us get back to shoes for a min- competitive market for as'much of this probably fare about as well, if not better,
ute. I wear shoes just like everybody else. supply as they need. under existing policies than under any
Most of us have not been barefoot for I can understand my colleagues' con- Policy examined. One offsetting benefit
quite some time. I have got big feet, tern over the plight our domestic leather that consumers are getting from higher
fairly big, away. But 5 will get you industry finds itself in and their efforts hide prices is that they are helping keep
10. % do not have 3 pounds of to help It. But, this should not be done meat prices from rising even more
leather in my two shoes. I doubt that at the expense of another industry. In rapidly than they have."
anybody, even my colleague from Call- my State of North Dakota alone, export In looking at the total picture, I think
fornia in the front row with those controls on cattle hides would cost' our it is important that we remember why
quarter-length boots-the gentleman cattlemen over $9 million a year. Na- our cattle industry got into the hide ex-
ought to get full length ones from out tionwide this could mean a loss of $680 port business in the first place. About 10
West-but even a full size set of Texas million. It is simply not fair that Amer1- years ago the shoe manufacturers told
boots does not carry more than $2.50 or can agriculture should continue to be our livestock producers that they were
$3 worth of rawhides in it. I think we asked to bear the brunt of the battle not going to buy hides any more, but
have got to get down to a little bit of against inflation. were shifting to synthetics. The cattle in-
commonsense and recognize that if History has shown us that export con- dustry reacted to this proclamation by
we begin to blame somebody else for the trols are not an effective method of help- launching an energetic campaign to find
problems in the leather Industry-and ing the domestic leather Industry. When overseas markets. And now many would
there are problems in the leather Indus- export controls were imposed on cattle have us turn our backs on the cattle in-
try, part of which was brought out by hides in 1966, the price of shoes went dustry by granting a. preferred market to
what my college from Iowa said, they up and the price of cattle went down. By the leather industry.
moved to artificial leathers and they the end of the summer of 196E the price Low,labor productivity In our leather
told the Producers Of leather here in the of men's shoes had risen 8.4 percent Industry has been the cause of many' of
United States, "We do not need your while women's shoes rose 7 percent. the current problems. Productivity in this
leather, we are going to go with Corfam Throughout 1966 cattle hide
and all of these other things," They told plunged Priad o othther U.S. rtU. has not kept pace with mast
the cattle industry to forget it, so the . As a result, the cattlemen paid industries. I do not want to
ttlmen and to develop a market over- the for the shoeman's profit and the con- lessen the seriousness of the problems
seas or' we would have had a whole host Sumer was ignored. facing tanners and shoe aaaantafacturers.
An anal
is j
t
bli
I
se
ys
us
pu
shed by the De-
know there is a strong foreign demand
problems. But right now we have a
product that is rf partment of Agriculture indicated that for hides. However, attempting to limit
price, t cents a selling at a reasonable the export controls probably would pro- exports of domestic hides will not solve 73 pr has been mentioned Po nd I do moment think, not vide no long-term benefits to either the their complicated problems. I do not
that half of the nbu , industry or consumers. It is true that the think we should stand by and see the beef
that to the the c shoes Is tricost of on she hides shoes the ribu- world supply of hides and skins prob- cattle industry made the whipping boy
Me. Chairman, once ably will remain relatively low during because we continue to apply simple solu-
again the agri- the next 2 years as herds are rebuilt tions to comple problems.
cultural community Is being blamed for on many of the major cattle producing Mr. Chairman, the administration op-
the effects of inflation. Just a few weeks countries. But, as cattle herds are re- poses this amendment, our cattlemen OP_
ago we heard a huge outcry about the built and cattle slaughter begins to in.. pose it, and our consumers should oppose
high price of beef and those grumblings crease, hides and skins production will It. I strongly urge on the basis of logic
continue today. Once again the attack is pick up rather rapidly in the early 1980's. and reason, that this amendment be
aimed at the beef Industry. This time To interrupt this normal cycle could defeated.
the faultfinders want to blame inflation prove disastrous to our cattlemen, the Mr. SHANNON. Mr. Chairman, will
on the hides of cattle, leather Indus
I think we should false time to look at ~'y and our consumers. the gentleman yield?
a few hides we You will hear to n Cattlemen are Just now beginning to Mr. ANDREWS of North Dakota. I will
abf fags . it y talk increase their herds. As I said before the yield to the gentleman.
abed they are s ug a
s Pound. The fig- lower prices they would receive as a re- Mr. SHANNON. Mr. Chairman, It
ures they higs~ are not nurrrent, but sult of export controls would undoubt- would just like to point out to the gentle-
rather the
is to May. edly slow this rebuilding. Such a reaction man that by the Department of A.gricul-
pr in ices of hod care of few and the on the part of cattlemen would result in ture's own statistics, and they are not
have reduced dramatically. tica laslly. As of last lower supplies In the future which would supportive of this amendment, the value
have reduced
prides had reduced lly. A o translate into even higher prices for of a steer that can be attributed. to the
week hide ices as fast meat and hides. Consumers would pay hide historically has been 4 percent of
lows-heavy native steer had r down 36 s, heat ative steer down 32 per- more for both meat and leather products the value of the steer, 4 percent comes
co
cent, light
down 52 percent, In the long run-and that is no way to from the hide historically. It would just Col Butt branded down 47 percent and fight inflation, like to point out that by the Department
The hinder pastes for percent.
have been Price flexibilitles indicate that if ex- of Commerce's statistics, and they are
the rerun a gory a fo hid but I ween port controls resulted in domestic hide not supportive of this amendment, 30 to
th
YOU, if , it result In e a export controls are, imposed to- prices that were 40- to 50-percent lower, 50 percent of the cost of a man's shoe is
day's beef prices will seem cheap. If the lower price for footwear about a at the wholesale abtMr. ANDREWS of North DDakota. That
Producer loses up to $23 In reduced hide level. That is ahigh price for our cattle- is what the gentleman said, but my point
prices, that ~s awi g9e reflectedreductionin n men to pay, especially when we realize is that it is hard to realize, with the ele-
eef pri that retail size of herds, which would only serve not declinedrwhheen for hide pricesgf~s have how 73 cents aepou d hides now selling
to compound the problems facing the Whenever the prices our farmers re- In Chicago will make half of the cost of
leather industry. It is In the leather in- ceive for their commodities increase, con- a pair of shoes that you cannot get for
dustry's best Interest to assure that our sumers and middlemen jump on the less than $30, $35, or $40.
cattlemen continue to rebuild their herds. bandwagon declaring that these in- Mr. SHANNON. If the gentleman will
The choice is a simple one, let the com- creases will result on higher and higher yield further, it is equally hard for me to
petitive market take care of itself,. or prices to our consumers. Yet we all know see how 4 percent of the value of a cow
face a shortage of beef and hides at es- that when the price of wheat fell from is going to affect the beef cycle.
calated pride3, the high $5 level to $2, the Price of bread Mr. ANDREWS of North Dakota. The
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Ifni 8082 CONGRESSIONAL RECORD - HOUSE September 18, 1979
gentleman is getting his statistics a little leather industry get first shot at every amendment, not only because it is a
too far away from the cattleman. I hap- cattle hide that is grown in the United blatant protectionist measure, but be-
pen to feed some cattle and I have a lot states, first shot at it, so they are not cause of some of the arithmetic that
of constituents who feed cattle, and when cut off from supply. The biggest danger my friend from Massachusetts has en-
they take that steer in to market, whether to the leather industry in this country is gaged in, and I would like to have his
it is priced by the yellow sheet that my if we force down the profit margin on the attention for just a moment, if I could.
colleague from, Iowa has a number of farm to a nonexistent level and then we I believe the'gentleman said. on the price
questions about, and a number of us have will not have the supply of leather that of shoes that! one-third of them was
questions about it, or whatever else, the we need. More than anything else that wrapped up in the cost of leather. The
price they can pay down in that stock- would wreck the domestic leather in- figures I have are from 5 to 15 percent,
yard for that steer on that given day is dustry. but let us say for the moment the gen-
directly related to what they can sell the I hope that this amendment will be tleman is correct.
component parts for, and the price of a defeated and fair play can stay in this Mr. SHANNON. Mr. Chairman, will
steer hide today is a lot more than 4 per- field. the gentleman yield?
cent, and has been. There are 65 pounds Mr. FITHIAN. Mr. Chairman, I move Mr. FITHIAN. I yield to the gentle-
of hide on a normal steer and 65 pounds to strike the last word and I rise to man.
at 73 cents is worth close to $50. oppose the amendment. Mr. SHANNON. Mr. Chairman, I will
Mr. SHANNON. If the gentleman will Mr. Chairman, I wish to take this op- statistics pro-
yield further, is it not a fact that histori- portunity to express my opposition to say sided that at I by am using using the the of Commero-
cally 4 percent of the value of a steer the Shannon amendment to the Export which says 30 to 50 percent. me Department
% am deeply
Whil
t
A
e
.
c
comes from the hide and it has never Administration
Mr. FITHIAN. Let me use the gentle-
with th price of shoes
risen above 10 percent, even at the high-
lthx I a man's one-third if I may. How then do
m
tr
is
i
h
coun
n
er
goods
and leat
y, est hide prices?
Mr. ANDREWS of North Dakota. I not convinced that placing an embargo
think it has gone from 5 to 10 percent, on hide exports will provide the relief
but we have to equate that then with the sought by the shoe and leather industry.
stockman's profit and the gentleman will If the United States were to embargo
find that USDA statistics also say that hides, it would have the effect of raising
the average net return for the farmer- their price on the world market which
feeder to feed a steer is 10 bucks, and would in turn increase the cost to con-
that is less than what he has gotten for sumers of imported leather goods. Since
the hide today, a year ago, or 5 years ago. leather imports tend .to keep the price
So the price of that hide is an extremely of domestic leather lower for competitive.
important component of what the farmer purposes, it appears to me that con-
gets. sumers would continue to suffer even
The CHAIRMAN pro tempore. The with a trade embargo.
time of the gentleman from North Da- Further, hides represent only 5 to 15
kota has expired. percent of the cost of finished shoes.
(At the request of Mr. GRAMM, and by Thus, any decrease in the domestic price
unanimous consent, Mr, ANDREWS of of hides which might result from an em-
North Dakota was allowed to proceed for bargo would not appreciably affect the
2 additional minutes.) price of shoes. Instead, I fear that such
Mr. GRAMM. Mr. Chairman, will the an embargo might force an increase in
gentleman yield? meat prices by meatpackers in order to
Mr. ANDREWS of North Dakota. I make up for the loss of revenue from
yield to my colleague. the hides.
Mr. GRAMM. Mr. Chairman, I was Most importantly, I regard amend-
just going to make the point that my ments like Mr. SHANNON'S as running
colleague made, and that is that I think directly counter to the purpose of the
it is fine to talk about a margin of 4 per- Export Administration Act. This act rep-
cent to 10 percent as if that margin does resents an important effort to facilitate
not matter. But that margin today is American exports at a time when our
greater than the profit margin on cattle. excessive reliance on foreign oil has cre-
We are faced with a cycle that has been ated a serious negative balance of trade.
produced, in part started under Presi- Attempting to attach to the bill protec-
dent Nixon with price controls on beef. tionist provisions favoring one particu-
We are in the process of seeing some lar product can dilute the impact of the
movements toward a buildup in herds, law and open the door to all kinds of
and I think to pull down this margin by special interest amendments.
artificially underpricing leather, or The bill already contains adequate
hides, in this case, would break that procedures to restrict exports where
cycle, would make cattle production un- necessary to protect our economy from
profitable and would reduce production the inflationary impact of an excessive
and would add to our hide-shortage drain of scarce materials caused by for-
problem. I think that is a point that eign demand. These provisions can be
should not be lost in talking about 4- invoked, if necessary, to protect the shoe
percent to 10-percent margins. That and leather industry.
margin, as the gentleman in the well In addition, international negotiations
pointed out, is bigger than the profit , are currently being conducted by the
margin on the cattle to begin with. Office of the Special Trade Representa-
Mr. ANDREWS of North Dakota. I tive with countries such as Japan and
could not agree with my colleague more. Argentina to insure a cutback in the
I would like to conclude by making purchase of U.S. hides and an increase
just one more point, and that is that it is in the exports of foreign hides. These
extremely important that we find an ade- negotiations, coupled with the proce-
quate market for the products of our dures already in the act, should suffice
farms and our feedlots. I think it is ex- to provide relief to our domestic leather
tremely important to note that in find- industry without eroding an important
ing that adequate market the tanners effort to stimulate our export economy.
and the shoe industry and the domestic Mr. Chairman, I strongly oppose this
we account for the gentleman's next
statement, which was if this amend-
ment does not carry we could see an ad-
ditional $10 per pair added to the cost
of shoes this year, if the gentleman from
North Dakota is even remotely close to
the amount in his analysis of the amount
of leather that actually goes into a shoe?
Mr. SHANNON. If the gentleman will
yield further, I do not accept the gen-
tleman's figure as remotely close.,
Mr. FITHIAN. Taking the gentleman's
own figure, what is the average cost of
shoes?
Mr. SHANNON. I would say to the
gentleman, if he will yield further, if we
take the 30 percent to 50 percent figure
as the amount of the cost of a pair
of men's shoes that can be attributed
to the leather in those shoes, I do not
think a $10 increase is out of the ques-
tion at all.
I have an unusual situation, I wear
a size 13 shoe, but I end up paying $65
or $75 for a pair of shoes frequently.
Mr. FITHIAN. Mr. Chairman, I must
oppose this amendment for many of the
reasons that the people who are close
and knowledgeable about the cattle in-
dustry have already stated.
Mr. ANDREWS of North Dakota. Mr.
Chairman, will the gentleman yield?
Mr. FITHIAN. I will yield to the gen-
tleman.
Mr. ANDREWS of North Dakota. If
we can go back to this $10 figure, all I
said was how many pounds of leather
do we have in a pair of shoes. Leather
today sells for 73 cents a pound in Chi-
cago. The gentleman can buy all of the
leather hides he wants today for 73 cents
a pound. I do not think most of us have
more than 2 or 3 pounds, even that much
in that $65 pair of shoes that the gentle-
man has. I just do not, cannot, just can-
not come up with the mathematics that
says that half of the cost of my pair of
shoes is attributable to the leather. I
appreciate my colleague yielding.
Mr. GLICKMAN. Mr. Chairman, will
the gentleman yield?
Mr. FITHIAN. I yield to my friend.
Mr. GLICKMAN. Mr. Chairman, I
echo the remarks of the gentleman from
Indiana. I would say the issue today is
not the cattlemen or the hide people, the
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.September 18, 1979 CONGRESSIONAL RECORD --HOUSE IHI 8083
issue is exports, free, unrestricted ex- Mr. GQODLING. Mr. Chairman, I suffer and tens of thousands of Ameri-
ports from this Nation. If we open the move to strike the requisite number of can jobs will be lost. All this, because
door here, and it is one of the first times words, and I rise in support of the we have failed to act to insure that our
the door has ever been opened, if we amendment, own domestic industry receives the raw
open the door here we will have every (Mr. DOODLING asked and was given materials they need at reasonable prices,
protectionist device available to protect permission to revise 'and extend his to compete with foreign producers.
one industry in this part of the country remarks.) For this reason, I intend to support
and another industry in another part of Mr. DOODLING. First of all, Mr. Mr. SHANNON'S amendment. And in the
the country. That just flies right in the Chairman, I am very sorry that my shoe interests of American industry, Ameri-
face of the MTN talks and it is bad for manufacturers were referred to as being can labor, and the American consumer,
America. I urge the rejection of the "dumb" by my very respected colleague I urge my colleagues to do so, as well.
amendment. from Iowa, since I have been very im- Mr. ROBERT W. DANIEL, JR. Mr.
Mr. SHANNON. Mr. Chairman, will pressed with the manner in which they Chairman, will the gentleman yield?
the gentleman yield for an inquiry to the carry on their activities under almost Mr. GOODLINO I yield to the gentle-
gentleman from Kansas? impossible conditions. I would also hope man from Virginia,
Mr. FITHIAN. I yield to the gentle- that my colleague from North Dakota Mr. ROBERT W. DANIEL, JR. Mr.
man. was not trying to make a point that Chairman, the gentleman from Iowa
Mr. SHANNON. I would say to the since hides sell for 73 cents a pound, and (Mr. SMITH) alluded to a condition of
gentleman from Kansas, is it the gen- there are only 3 pounds possibly to a abundance of hides that, in his terms,
tleman's intention to vote against the shoe, that it only costs $2.19 then in has existed since the Mayflower landed
beef bill when It is on the floor of the order to get that hide for the shoe. That in Virginia. I have got to point out that
House of Representatives? Is an unfinished product, of course, when Massachusetts was where the Mayflower
Mr. GLICKMAN. Mr. Chairman, will it is $2.19.
? the gentleman yield to me? Mr. Chairman, it has been argued that curred landed, 13 and the
years earlier landing in Virginia
with different
Mr. FITHIAN. I yield to the gentle- the imposition of export controls on pv t
man. American-produced cattlehides would co hat sailed a river bounding my
Mr. GLICKMAN. I would say to the constitute an unwarranted impediment M congressional r. B Ndistrict.
gentleman that I have not decided. to free trade. Certainly, free trade is a of Mr. the I pressure of Mtime r. underChairman, in c view
we
Mr. SHANNON. If the gentleman will desirable goal and as a general policy are operating, I 1 o wonder an i arrive
yield further, would the gentleman char- I heartily endorse it. But when other at an agreement r r if limitation can arrive
acterize that as a protectionist measure? nations seek to exploit our commitment Mr. I ask unanimous time.
Mr. GLICKMAN. Perhaps. to that policy to the detriment of the . Chairman, hairm t ask this ncent
Mr. FITHIAN. Mr. Chairman, if I can American people, it is time to reconsider and that all debate on thmedmen0
retrieve my time, I think the gentleman that policy in light of particular circum- min all amendments, thereto cease in 30
from Kansas' argument is that the pur- stances which might make for an excep- minutes.
pose, as I understand Chairman BIND- tion. objection The CHAIRMAN
request of the o f thee. t there
to the pro
HAWS analysis, the purpose of this bill In recent ears the gentleman
is to promote exports. The whole thrust finished cattlehides has grown dramaati- from New York?
of the bill is to facilitate international cally, while the production of hides has Mr. MAVROULES?
Mr.
Chairman, I
trade, increased very little. As a result, short- object.
Mr. GLICKMAN. If the gentleman will ages and major price increases have oc- The
eaAIR1~llAPT pro tempore. Objec=
yield for 1 second further, as I under- curred. In response to this situation, Lion Mr. Beard.
stand it, this is, except for the restric- many traditional sd'ppliers of hides have Mr. %NGHAse Mr. Chairman, I eon
tions on exports of Alaskan oil, and a imposed export controls on their unanimous consent that all debate is
provision for red cedar which is in the duction, thereby protecting their own this amendment and all amendments
thereto In 45
bill, and the one that was just passed leather goods industry from spiraling The CHAIRMAN minutes,
on scrap metals, and we keep going for- costs but further exacerbating the al- Objection to the request . re pro of the o f the. t there
ward, before we got to this bill we had ready severe international shortage. As from New not formalized in statutory form restric- a result, foreign buyers have turned to from New York?
tions on exports of commodities. I Just the United States, which has not im- The There CH was Aas Ro objection. MAN think while nobody is a purist, and I will posed controls, to make up the difference. hers standing g at the pro eeof the Mem-
agree with the gentleman from Massa- If the United States were able to make request the time of agreed to, will
chusetts on that point, I Just think it is up for this shortfall without depleting morecognzed rewas agreed to, il
bad policy to begin opening the door to the supply needed for domestic con- be recognized for 1 minute each,
every protectionist item we have. sumption, this would not constitute a 1630
Mr. FITHIAN. I thank the gentleman. serious problem. Unfortunately, we are (By unanimous consent, Mr. JOHN 4
If I may, Mr. Chairman, I regard amend- unable to do so as just illustrated by my BtRTON yielded his time to Mr. lildav-
ments such as this as running directly colleague from Massachusetts. Of the ROULRS.)
counter to the purpose of the Export approximately 34 million hides that the The CHAIRMAN pro tempore. The
Administration Act in the first place. United States will produce this year, Chair recognizes the gentleman from
n i on -_ . ... ?--' --
Second, I regard amendments such as mestic consumption. However, foreign (Mr. DASCHLE asked and was given
this as absolutely harmful to an indus- buyers are expected to purchase some permission to revise and extend his re-
try which has lost money in 4 of the 24 million, leaving a domestic deficit of marks.)
last 6 years, and lost money heavily. I 9 million. The results of this deficit are 0 Mr. DASCHLE. Mr. Chairman, I rise
cannot conceive of this House of Repre- already apparent: The cost of unfinished in opposition to the amendment being
sentatives turning on the beef industry cattlehides has increased over. 150 per- offered by my colleague from Massachu-
in this country at the first opportunity cent in the past 17 months alone; and setts, an amendment which would seek
It has had to arrive at a break-even the price of finished leather goods is sure to limit the exportation of U.S. cattle
point. It is inconceivable that we would to follow. As the price of domestically hides, until adequate supplies are avail-
do this, not only because of all the argu- produced leather goods increases, the able to domestic users of hides.
ments my friend from Iowa, Mr. SMITH, American consumer, hard pressed by Those ' who argue In favor of this
made earlier, but for the very basis of inflation, can be expected to increasingly amendment say that unless hide exports
equity itself. turn to less expensive foreign-made are limited, the leather goods Industry
I strongly urge defeat of this amend- goods. Those $90 pair of Johnston & will not have to necessary raw materials
ment. - Murphy shoes some of you are sporting to provide finished leather products.
(Mr. FITHIAN asked and was given today will cost $160 within 6 months or Unfortunately, for what some have
permission to revise and, extend his a year. I may buy some merely as an referred to as, a simple solution to -the
remarks.) investment. So, American industry will troubled shoe and leather industry, is, &
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808 CONGRESSEONAL RECORD-HOUSE September 18, 1979
dangerous precedent the result would be trade is the only way to maintain a con- to vote "Yes" for the American cattlemen
literal chaos in the livestock industry. tinuous flow of goods by assuring a bal- and fair treatment.
As has been pointed out here today, anced competitive market free from The CHAIRMAN pro tempore. The
the livestock is plagued with the very unfair market practices and price Chair recognizes hthe enERER)eman from
Pennsylvania
same problems of inflation and high pro- gouging. was
give duction costs that every other industry I believe the Shannon amendment is a > DE reked extend his ren
is faced with. This is sometimes over- wise trade restriction which will help permission
looked by our friends in the urban areas. stabilize the domestic leather goods in- o Mr. . LEDERER. Mr. Chairman, I rise
The effect of" this amendment on the dustry and, at the same time, will main-
livestock industry would be to cause a tain domestic beef consumption because today to support the Shannon amend-
amend-
substantial reduction in 1979 hide. ex- jobs and income in the leather goods in- 0 nt to the hiExport Administration Act 1979. ports in addition to further reducing dustry will not be jeopardized. Assuring
hide prices from a 1979 high of 96.33 domestic demand is the cattle producers' ment, which will have a most beneficial
cents per pound to a June 1979 level of best bet to maintain cattle prices at fair effect on o our oaf Kerr igoods ind st omy sector A
85.90 cents per pound. levels. includes tanneries, shoo production,
A reduction in hide prices could cause By the same token, those who support belts, apparel, and other
a reduction in cattle prices through the Shannon amendment must realize handbags, great many peoplr
a lower return on a valuable part of the that the economic well-being of U.S. cat- leather are involved productcts. A these industries. How-
After animal. tle producers is threatened by beef im-
After 4 years of depressed prices, cat- ports. The beef import bill reported out ever, these jobs may be in danger by
tlemen are finally realizing a profit. The of the Ways and Means Committee also the increasing exportation of our Na-
Shannon amendment would significant- places a wise restriction on trade-assur- tion's cattle hides. It is time that we
ly reduce these returns by an estimated ing price and supply stability for cattle realize that our country's many Indus-
$10 or $20 per head. producers and consumers. tries cannot operate independently of
Hide exports are on the decline, ,July I urge my colleagues to support the each other. Many of them are dependent
down more than 5.7 percent. The projec- Shannon amendment and to support the on one another and their business opera-
tion is that they will be lower for the bill to improve the existing beef import tions should be coordinated. Without a
rest of the year. legislation. Farmers and labor both stand steady supply of hides, the leather goods
In addition, the United States is cur- to gain from cooperation in support of industry finds itself in a terrible bind.
rently negotiating with countries which the Shannon amendment and the beef If they cannot attain. an adequate sup-
currently have embargoed its hide ex- import bill.O ply of cattle hides from America's cattle
ports. Argentina is one country which The CHAIRMAN pro 'tempore. The producers, the leather goods industry is
will reenter the world trade hide market. Chair recognizes the gentleman from forced to look to the foreign producers.
Mr. Chairman, I want to conclude by Florida (Mr. KELLY). However, they are stymied here by the
iven fact that many foreign governments
d
was g
reaffirming my strong opposition to the (Mr. KELLY asked an
Shannon amendment. The United States permission to revise and extend his re- have imposed export restrictions on their
is estimated to be producing more than marks.) cattle hides. Consequently, our leather
34 billion cattle hides this year, with the Mr. KELLY. Mr. Chairman, I rise in goods industries are unable to secure a
domestic industry requiring only 18 opposition to the amendment. stable supply of hides for their produc-
million. Mr. Chairman, Government subsidies tion facilities. Without- a coordinated
We should not establish this danger- to help grain farmers constitute a mas- leather goods policy, the leather goods
ous precedent. sive . Government program which last industry is caught between the prover-
Our Nation's cattlemen should not year totaled $2.3 billion and raised cat- bial rock and a hard place.
have to Cary the brunt of the load of the tle feed out of sight. From 1974 to 1978, The cattle industry, of course, opposes
hide industry's reluctance to pay the . the cattlemen of the United States any export restrictions. This is under-
supply and demand established market suffered under depressed prices, high standable, since it is sometimes possible
price for hides. The hides are there feed costs, and high everything else, with for them to get a higher price for their
without the necessity of export restric- the result that hundreds of America's hides abroad than they can get in this
tions, and for that reason I rise in op- cattlemen went out of business or bank- country. But I find it interesting to note
position to this amendment. rupt or both. that the cattle producers are such free
(By unanimous consent, Mr. DASCHLE The Shannon amendment is an effort traders on this issue, and, yet, they can
yielded the remainder of his time to Mr. by one industry to gain an advantage at turn around and be highly protectionist
FOLEY.) the expense of the American cattleman. on the meat import issue.
(By unanimous consent, Messrs. In light of the damage Government pro- We heard the term, "fair trade," used
GLICKMAN, SMITH of Iowa, and CAVA- grams and interference in agriculture quite extensively during the debate on
FIAUGH yielded their time to Mr. FOLEY.) has already done to the cattle industry, MTN. Well, I think this issue again
(By unanimous consent Mr. GRAMM the unfairness of the Shannon amend- brings the concept of fair trade into
yielded his time to Mr. STENHOLM.) ment should not be permitted. play. I do not think it advantageous for
The CHAIRMAN pro tempore. The The Shannon amendment, pure and our country to watch the decline of a
Chair recognizes the gentleman from simple, would reduce the price of hides ? domestic industry because they are not
Minnesota (Mr. NOLAN). by cutting off American cattlemen from able to avail themselves of a necessary,
(Mr. NOLAN asked and was given per- the world markets and of necessity re- domestically produced resource. I find
mission to revise and extend his re- duce their profits and run up the cost of this unacceptable. I would urge my col-
marks.) beef to the consumer. By limiting exports leagues to support the amendment of Mr.
0 Mr. NOLAN. Mr. Chairman, I support of cattle hides, this amendment will SHANNON. I think it in the best interest
the amendment by Representative SHAN- worsen this country's already , serious of our country's industrial welfare to do
NON to regulate the export of cattle hides. balance of traded deficit. Last year the SO.O
The issue has caused a great deal of United States had- a net agricultural (By unanimous consent, Mr. LEDERER -
controversy between the leather goods trade ' surplus of $15 billion, and cattle yielded the remainder of his time to Mr.
industry and the cattle industry. Accord- hides are the major contribution to this MAVROULES.)
ing to some critics, the Shannon amend- surplus. by the cattle industry. The CHAIRMAN pro tempore. The
ment constitutes an impediment to free Mr. Chairman, American cattlemen Chair recognizes the ' gentleman from
trade and therefore should be defeated. have suffered enough in the past few Massachusetts (Mr. MOAKLEY).
Congress should recognize, however, that years. Now that they have a chance to (Mr. MOAKLEY asked and was given
free trade does not exist for most prod- break even, certainly fairness and equity permission to revise and extend his re-
ucts because State trading and oligopoly demand the Government not hurt the marks.)
reign in the marketplace. From the view- cattlemen more to benefit someone else. 0 Mr. MOAKLEY. Mr. Chairman, I rise
point of both farmers and labor, history I earnestly urge my colleagues to vote on behalf. of an amendment offered by
reveals that putting wise restrictions on "no" on the Shannon amendment and my colleagues, Mr.. SHANNON of Massa-
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September 18, 19'7.4 CONGRESSIONAL RECORD -HOUSE.
IRI 8085
chusetts and Mr. CARTER of Kentucky to American leather producers out. of our trade laws, that is; commitment to
the Export Administration Act (H.R. business. free trade and free market policies. The
4034). I urge you to vote in support of this restrictions on hide exports to reason-
Im recent months, the American pub- amendment. Certainly the 500,000 Amer- able historical levels would only apply
lie has witnessed a significant increase ican workers. whose jobs are directly im- as long as other major producers of.
in the price of almost all consumer goods. pacted by our action on this matter de- cattle skins follow export policies con-
The price of domestically manufactured serve no less. trary to the principal of free trade.
shoes, however; has increased at a rate Thank you.0? Argentina, Brazil, Pakistan, and India,
far greater than that of inflation. The. (By unanimous consent,. Mr. MOAHLEY to name only a few, follow policies of
domestic leather using industry, of which yielded the remainder of his time to Mr. stringently controlling their export of
the shoe industry is a major component. MAvROuLES?.) hides.
is in Jeopardy. Because of the vagaries of The CHAIRMAN pro, tempore.. The Mr. Chairman, the concept of free
this Nation's export policies, It seems Chair recognizes the gentleman from trade has been founded on the principal
that the industry is simply not capable Massachusetts (Mr. DONNELLY). Of insuring equitable access to world
of obtaining a sufficient supply of the. in- (Mr. DONNELLY asked and was given. markets on. the basis:.of mutuality This
dustry's prime ingredient: cattle hides. permission to revise and. extend, his amendment recognizes that our trading
Massachusetts has over 23,000 individ- remarks.) partners are currently disregarding this.
uals: who presently earn their living from 0 Mr. DONNFL,Y, Mr. Chairman, I rise principle. Our top priority, therefore,
the shoe and leather-using Industry in in support of the Shannon-Carter must be to assure that our American
the State. In the Ninth Congressional amendment. shoe industry and workers are able to
District atone? there are some 23 shoe In my support ' for this amendment, compete in the international. market on
manufacturing companies, employing Mr. Chairman, I am calling for the end a basis of equity and fair trade. To this
many thousands- of people in the Boston to a critical. situation that has placed end, we must assure American leather
area,. whose product output is totally de- the American footwear Industry in im- goods industries legitimate, adequate
pendent on the availability of cattle and mediate danger of extinction. The situ- access to American raw materials, and
leather hides. ation I am referring to is. the acute the 400,000 American workers, jobs.
The reason for the seeming inability shortage of cattle hides, the basic. raw I urge my colleagues to join me in
of American. cattle producers to supply material of leather manufacture;, facing supporting this amendment.0
sufficient hides for the leather-using in- the domestic shoe industry. If current (By unanimous consent,. Mt. DONNELLY
dustry is self-evident. Since the. early trends are not reversed without delay. Yielded the remainder of his time to Mr.
1970rs, every single major hide-producing domestic leather manufacturers will MAVROULES.)
nation with the exception of the United have only 10 million hides available for The CHA RMAN' pro tempore. The
States has imposed stringent controls on their use, approximately one-half that Chair recognizes the gentlewoman from
th exporting of hides. Consequently, the needed to. maintain the industry at Maryland (Mrs. BYRON)'.
United States, while producing only 15 current levels, of production and (Mrs. BYRON asked and was given
pe=rcent of the world's supply of hides, employment. Permission to revise and extend her re-
now finds Itself in the strange position of What has caused this shortage of marks.)
providing over 75 percent of the world hides, Mr. Chairman? It is the result of Mrs. BYRON. Mr. Chairman, my sup-
market. The laws of international trade more than the cyclical rebuilding of port for the Shannon-Carter amendment
clearly state that this Is simply not an cattle herds. It is caused by the vora- to the Export Administration Act is two-
equitable situation.. The ebbing of U..& cfous, unprecedented foreign purchase fold. First is my concern with the ever
cattle- hide inventories has produced a of our. American hides. whiL the United increasing price of shoes and. other
scenario in which the per pound price of Stater, produces only l5 percent, of the leather goods in this country. And, sec-
lether hides have been allowed- to rise world cattle-skim supply, in excess of 75 ond, but more Importantly, my concern
fram around 40 cents per pound less than percent, of those hides go' to foreign with the number of jobs that may be af-
a year ago to almost $1 per pound last manufacturers of leather goods. Those footed if the U.S. leather industry does
creek. Despite the fact that our local figures, do not represent an insufficient not getsufiicienthides.
leather-using firms are not able to meet ' domestic demant for hides,. Mr. Chair- In my home district of western Mary-
their hide needs. This Nation continues man. Due to, the devaluation of the dal- land there are at least a half dozen
to allow over 80 percent of our domestic lar, countries, such as Japan and Korea leather related industries--a tannery;
hides to be exported, when less than a are able ter consistently and dramatic- shoe manufacturers,. not to mention nu-
year before, only approximately 50 per- ally attract a major portion. of our merous shoe retailers. I am concerned
cent of our hides were exported. domestic hides supply. Our already be- about the future of these industries. Sev-
The amendment; offered today by my leaguered shoe industries, are engaged in eral of these plants have already experi-
calleagues from Massachusetts and Ken- a. pricing battle. in which. cattle hide for enced layoffs due. ? to the competition
tueky would bring order to a completely shoe leather that cost 37 cents a. pound from imports.
chaotic situation. T he amendment to the in i077,, and that cost 58 cents.a pound The Shannon-Carter amendment to
administration's Export Adrniznistratfan e months ago, today is prices. at almost the Export Administration Act does not
Act would limit exports to the average $1 a pound. prohibit. hide exports. It limits exports to
percentage exported over the period Mr. Chairman, how can we expect our the average percentages exported. during
1/34-77. Controls would be lifted If. M American footwear and leather goods the year 1974-7Z' which amounted to 56
recso-m-ble number of other rig nations relaxed their restrictions pro- manufacturers to survive under these percent, more Interestingly, this limit
d if the lions eel began, to ex- conditions? Many will argue that the would only exist until such time other
Geed the ddomest suppldemand.y present hide' shortage Is short term and hide producing nations relax' their re-
domestic, supply will increase over a 3- striations on exports, or domestic supply
I emphasize that these export controls or 4-year period. Well, the leather exceeds domestic demand.
would apply to hides only. As you are goods industry that directly employs The, United States cannot continue to
siso no doubt aware, before 1973, the some 500,000 Americans. cannot survive export the high number of hides with-
Cornmerce? Department had the author- even in the short term without immedi- out dramatically affecting the U.S.
ity to impose export controls on hides. ate relief' from this crisis situation. Are leather industry.
This amendment would' reduce the we prepared to ignore the plight, of shoe Tens of thousand's of American citi-
price of' domestically sold hides and manufacturers? Are we prepared to cer- zens may lose their jobs-including sev-
would increase the price of foreign sold tainIy jeopardize the livelihood of hun- eral thousand Marylanders --if . the
hides. Currently, there is little incentive dreds of thousands of American leather plants they are working In. shut down or
for major importers of hides to relax goods workers? reduce production due to an insufficient
their restrictions on exports. Ifthe cur- The Shannon-Carter amendment is a supply of hides.
rent situation Is allowed to continue, na- reasonable, carefully worded, and tar- I urge my colleagues to consider the
tions such as Japan, which are able to geted remedy to the cattle hide situa- livelihoods of thousands of Americans
produce high-priced leather products tion_ Most importantly, this amendment and vote yes today for the Shannon
due to the devalued dollar, will' drive recognizes the overriding objective of amendment.
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H 8086 CONGRIESSRONAIL RECORD --HOUSiE September 18, 1979
(By unanimous consent Mrs. BYRON -American hides as possible to provide the average percentage exported over
yielded the remainder of her time to Mr. jobs for their citizens. These countries the period from 1974 to 1977, approxi-
MAVROULES.) are willing to pay just about any price mately 56 percent of domestic supply.
The CHAIRMAN pro tempore. The for hides for social reasons, but they do Yet, such controls. would be lifted if
Chair recognizes the gentleman from not often feel the high price. Japan, for either a reasonable number of other
Tennessee (Mr. BONER). instance, can outbid American buyers, major hide producing nations relaxed
(Mr. BONER of Tennessee asked and easily with the 15- to 20-percent ex- their restrictions on exports or the do-
was given permission to revise and ex- change rate advantage of their yen ver- mestic supply exceeded domestic
tend his remarks:) sus the U.S. dollar. As a result, declining demand.
o Mr. BONER of Tennessee. Mr. Chair- U.S. hide production has not fazed Japan ' Some may question the need for con-
man, hundreds of citizens in the Fifth at all. Instead, it increased its share of trols when we are so.desperately trying
District of Tennessee have taken the purchases in 1978, thus aggravating fur- to increase our share of export trade.
time to let me know how they feel on a ther the critical scarcity of hides. They will be quick to point out that the
matter that reaches to the heart of the The United States was the source of balance-of-payments deficit is only now
economic situation in this Nation. I refer 75 percent of the cattle hides exported beginning to decrease. They will claim
to the export of U.S. cattle hides and by all countries in 1978, but was able to that increasing U.S. exports translates
skins which drives up the price of do- export just $234 million in finished into greater opportunities for employ-
mestic leather goods and causes short- leather and leather goods for the year. ment. They will praise the merits of a
ages and unemployment in the U.S. labor of Foreigners, however, took full our open arms import policies and the wfree trading orking so hard to achieve. we adhave mit been
force. at
I wish to state my support for con= United States imported $2.4 billion worth each of these is a legitimate and timely
gressional efforts to amend H.R. 4034, the of leather goods. The result was an esti- concern. Yet, I have come to realize that
Export Administration Act, to protect mated 100,000 jobs lost in the United the situation with regard to hides is, in
our domestic hides and skin industry, States for every $1 billion in trade deficit. fact, hurting the U.S. balance of trade,
and I hope that the House reverses the The consequences of aggressive and it is creating unemployment, and further
Senate's July 21, 1979 defeat, by a vote ruthless foreign buying in the United that there is neither free, nor fair trade
of 46 to 38, of a similar amendment to States, particularly by Japan, and denial in this commodity. .
limit these exports until the President of access to hide supplies of other pro- Currently the United States Is export-
determines there are adequate domestic ducing countries already have been hig ing over
year's 70 projected percent its c supply
tl 3ides Of
supplies. acute. this The American leather goods industry, Prices of cattle hides, by May 1979, lion hides, 24 million were destined for
which employs over 400,000 citizens reached an average of almost $1 foreign markets. This is primarily due
across the Nation, is facing a monumen- per pound, a cost that causes reverbera- to the fact that other nations have re-
tal crisis. It is a crisis already sending tions throughout the chain of produc- stricted their export of hides. As demand
shock waves of inflation through the tion and marketing. Wholesale prices on the international market exceeds sup-
economy. It promises even more serious for cattle hides surged by 91 percent in ply, the price has skyrocketed. A small
consequences unless there is simple, di- April of 1979 compared to April of 1978. minority are overjoyed with the higher
rect action taken now. Retailers will not long be able to keep prices. But a far larger group has be-
This is not just a national problem. from passing price increases on to con- come victim of both unemployment and
In the State of Tennessee 12,870 people sumers. Manufacturers and retailers of higher costs. By April of this year, 10,800
are employed in the production of leather leather shoes and all other leather prod- jobs had been lost due to the increased
products. This is down from 19,264 in ucts face an intolerable dilemma-cur- cost of hides to the leather industries.
1976. Tennessee has the distinction of tail production or fuel inflation and face But the even more far-reaching conse-
being the fifth largest producer of foot- a radical downturn in consumer buying. quence has been the additional $2 billion
wear in the United States with 30 million I do not believe that this amendment for leather products which the American
shoes having been produced in 1977. The will hurt the cattlemen of this Nation consumer has been and will be forced to
citizens of Tennessee along with the citi- as much as the current situation is af- pay due to higher prices. Without a
zens of every other State must be pro- fecting the leather goods industry. Many doubt, the biggest losers will be each and
tected from possible loss of their jobs. American jobs are in jeopardy if the every one of our constituents who will be
Our Government has been standing current level of cattle hide exportation paying an additional $10 for each pair of
idly by while foreign nations have been is permitted to exist. I cannot stand idly shoes and $12 for each handbag.
raiding America's supply of domestically by and watch the jobs of many of the ' Some may claim that these controls
produced cattle hides. Meanwhile, Amer- citizens of the Fifth District of Tennes- will hurt the balance We will still Such
ican tanners, manufacturers, and re- see lost because of governmental inac-
tailers.are being deprived of the one raw tion in the area of cattle hide exporta- exporting over 50 percent of U.S. hides,
material they must have to provide tion restrictions. ' and at today's prices, this will mean an
shoes, clothing, furniture, and other es- if is time to bring economic equity additional $200 million in revenues. The
sentials consumers want and need. back to the people of the United States. real balance-of-trade problem results
It is a travesty and a humiliation that, The United States can no longer be ex- from the fact that the United States
soon, American consumers may not be pectd to bear the burden of reduced cannot compgte internationally in the
able to afford or even to obtain leather supplies alone. We must make a commit= leather products area. U.S. hides fre-
world's of- own materials, our own ahia hides. if highery vareturn to the United States as 9,
products United themselves,
lued finished product, yet a
States is the the
major producer of cattle hides. the Government means what it says product less costly than our domestic
The squeeze is caused by the unprece- about cutting the rate of inflation, it goods.
dented buying of U.S. hides by foreign must take the necessary actions to in- Mr. Chairman, with the rumors of rem
countries who do not play by the same sure P. long-term adequate domestic cession occurring with greater fre.
fair trade rule book that we do. At the supply of hides.0 quency, we can afford neither the loss
same time, other hide-producing nations, (By unanimous consent, Mr. BONER Of of jobs or the increased inflationary
who could help satisfy world demand for Tennessee yielded the remainder of his pressures whch the
creatinhi $ therefore, controls
urge
hides, hold back their supplies from the time to Mr. ?MaVROULES.),
world market place. The United States is The CHAIRMAN pro tempore. The that this amendment be adopted.
left virtually the only nation which gives Chair recognizes the gentleman from The CHAIRMAN pro tempore. The
free-buying access to its unfinished hides. Massachusetts (Mr. Coy vrE) . Chair recognizes the gentleman from
Argentina, Mexico, and India-all major (Mr. CONTE asked and was given per- New York (Mr. MITCHELL).
producers-elm heir borders in order mission to revise and extend his (Mr. MITCHELL of New York asked
to protect their own leather goods indus- remarks.) and was given permission to revise and
tries, workers, and consumers. Mr. CONTE. Mr. Chairman, I rise in extend his remarks.)
. Japan, along with most other nations, support of the Shannon amendment. Mr. MITCHELL of New York. Mr.
has clear policies of buying as many This amendment seeks to limit exports to Chairman, I would like to address the
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September 18, 1979 CONGRESSIONAL RECORD --HOUSE
problem of the cattle dealers. I really
do not think they have a beef in this
issue. They may have a lot at stake, but
they are giving us a bum steer when
they talk about how much they are los-
ing.
The United States produces 15 per-
cent of the cattle hides in the world
today. It is projected that in 1979, the
U.S. cattle industry will supply 34.2 mil-
lion' hides. Only 50 percent of these
would adequately meet the needs of our
domestic leather industry.
? Yet, the firms manufacturing leather
goods in my district in central New York
tell me they are facing a major crisis
because they cannot buy enough animal
hides to keep up their production levels.
I received 161 letters, many of which
stated the leather business will close
unless relief is available soon.
And the American consumer is paying,
on the average, $10 to $15-more for a
pair of shoes than he paid 2 years ago.
What is the 'reason for this apparent
paradox? Where are all the American
cattle hides going?
They are being sold overseas to the
highest bidder.
The United States, while producing 15
percent of the world's cattle hides, is
supplying 75 percent of the world mar-
ket, at the expense of our domestic leath-
er industry. The most recent statistics
available show that in March and April
of this year, 83 percent of the cattle hides
produced in the United States were sold
for export, leaving American leather in-
dustries with only half the number of
hides the industry needs to keep going.
The bulk of the exported hides are go-
ing to countries like Japan and Korea.
Because of their huge consumer demand
and a favorable exchange rate, they can
afford to outbid our leather goods manu-
facturers.
In the meantime, other major hide-
producing countries maintain strict ex-
port controls on their hides, to protect
their own domestic leather industries.
These countries can send finished
leather products to the United States,
assured of a good competitive edge over
American manufacturers who are
scrambling for an adequate supply of
cattle hides.
To add insult to injury, many of our
foreign competitors refuse to import
American leather finished products.
Again, they are seeking to protect their
own.
I believe in free trade but I feel it must
also be fair trade. By filling the world-
wide gap in supply and demand created
by countries who have embargoed their
cattle hides, the United States is the only
free-market trader in an imprisoned
market.
It is bad enough that rising exports
have meant a 154-percent increase in the
price of cattle hides in less than a year
and a half. It should be a major concern
of this body that the trade deficit in the
finished leather goods sector was $2.5
billion in 1978, almost 9 percent of the
entire U.S. trade deficit.
We must also recognize that the
leather goods industry represents 400,000
jobs in this country. The manufacture of
leather products is a labor-intensive en-
terprise that often employs the less
skilled worker-individuals who might
have a difficult time finding another job
even in a healthy economic climate.
In the first quarter of this year, unem-
ployment in the shoe industry was nearly
double the national average at 10.7 per-
cent. Employment is steadily dropping,
and manufacturers are giving their em-
ployees unwanted, extended vacations,
because they have no leather for them to
work with.
The amendment introduced by Repre-
sentative SHANNON is not a regressive,
protectionist measure that will hurt us in
the long run. It is a necessary action pro-
duced by the unfair competitive practices
of other countries who erect trade bar-
riers at the expense of our domestic
leather industry.
I feel Representative SHANNON'S
amendment represents a fair and bal-
anced solution. I strongly urge my col-
leagues to support it.
The CHAIRMAN pro tempore. The
Chair recognizes the gentleman. from
Mississippi (Mr. HINSON).
(Mr. HINSON asked and was given
permission to revise and extend his re-
marks.)
Mr. HINSON. Mr. Chairman, I rise in
opposition to the Shannon amendment.
I am very sympathetic to the problems
of our shoe industry, but I suggest that
these problems are more complex than
this amendment would indicate, and are
not the subject of a catch-all solution
such as that posed in this amendment.
The manufacture of shoes is only a part
of a chain which begins .with a cattle-
man raising cattle for the meat they
produce and, importantly, for the inter-
national hide market, a large portion of
which has traditionally come from the
United States to the benefit of the Amer-
ican leather industry.
The distinguished chairman of the
Small Business Committee (Mr. SMITH),
is right. Restricting the export of Amer-
ican hides will only harm the shoe
manufacturers of this country because
it will force foreign producers to go even
further into the artificial leather mar-
ket. It will also result in the increased
importing of foreign shoes, shoes which
will not be made from American hides.
Adoption of this amendment will also
have the effect of glutting the U.S. hide
market, dramatically forcing downward _
the price American cattlemen are pres-
ently receiving for their hides. For the
first time in many years, American cat-
tlemen are, receiving a fair price for
their beef and for their hides. Forcing
an instant depression in the hide/cattle
market in order to benefit another mar-
ket is destructive and will not solve the
long-term problems of the shoe-industry.
I urge the rejection of the amendment.
IE[ 8087
man, I rise in opposition to the amend-
ment offered by the gentleman from
Massachusetts (Mr. SHANNON). In recent
weeks, I, like all of you, have been bom-
barded by conflicting reports concerning
the importance of cattle hides to the
leather industry.
Regardless of whether the cost of a
hide contributes 5 percent to the cost of
making a shoe as some reports say, or 40
percent, as others claim, the fact still
remains that shoe prices have not shown
a decline since 1965, according to the Bu-
reau of Labor Statistics, while cattle
numbers and prices, on the other hand,
have 'undergone great fluctuation
throughout the years.
In fact, the price of hides has actually
decreased 45 percent from their highs
earlier this year. But have we seen a de-
crease in the price of leather products?
Obviously not; only increases. This indi-
cates to me that there must be other
more costly production inputs than
leather.
I sympathize with the leather industry
in light of the difficulties it has in obtain-
ing access to markets in other countries.
However, let's not solve its problems at
the expense of other Americans, includ-
ing cattlemen and all consumers.
I am actually amazed that we are even
considering this type of legislation. It
seems we would have learned by now
what effect Government tampering has
on agricultural commodities. Cattlemen
are just now recovering from severe eco-
nomic losses in which the beef price
freeze of 1973 played a large part.
Beef producers need all the encourage-
ment we can give them in order that
they will continue to take the risk of re-
building their herds. If this amendment
is passed, it will most surely mean re-
duced prices for domestic hides. The de-
creased prices will not be absorbed by
meatpackers as they are already operat-
ing on a very thin profit margin. These
losses in revenue can only be passed on.
They would be and are being passed on
in the form of reduced feedlot prices to
cattle producers, which will discourage
meat output and result in subsequent in-
creases in meat prices to consumers.
Most of my colleagues will agree that
meat prices are determined by supply
and demand. I ask you, assuming de-
mand stays the same as predicted, what
about supply? Do you think that cattle-
men- will raise more calves when they
see the price of their finished product
going down? No, of course not. Ameri-
can cattlemen are sick and tired of Gov-
ernment regulation and meddling in the
meat industry.
According to the USDA task force re-
port of July 1979, the proposed export
controls would result in a $30 to $40 de-
cline in the average wholesale price per
(By unanimous consent Mr. HINSON hide. This in turn would mean a $17 to
yielded his time to Mrs. HECKLER.) $23 reduction in prices offered to the
The CHAIRMAN pro tempore. The producer of a live animal. This would
Chair recognizes the gentlewoman from be disastrous because of the deteriora-
Nebraska (Mrs. SMITH). tion of the current hide price situation.
(Mrs. SMITH of Nebraska asked and Hides bring only about $30 each to
was given permission to revise and ex- farmers now, down from $54 each earlier
tend her remarks.) ' in 1979. Moreover, Japan and South
Mrs. SMITH of Nebraska. Mr. Chair- Korea are reporting unduly large inven-
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CONGRESSIONAL RECORD--HOUSE September 18, 1979.
tones of hides. Choice slaughter steer
prices have already declined from their
April high of near $78 per 100? pounds
to $68.45 per 100 pounds today, Septem-
ber 18, 1979. The additional $17 to $23
reduction per animal from export con-
trols would translate into a $2 per 100
pounds additional drop. An embargo at
this time would be completely unjustified.
The important point is that the
break-even costs for cattle to be mar-
keted this fall, which are in the feed-
lots now, has risen to about $75 per 100
pounds on the hoof-well above present
live cattle prices-without even taking
into account the additional $2 per 100
pounds drop from proposed export con-
trols. Thus, producers already face an-
other loss position.
As most of you know, agricultural
products are one of the few commodities
that help our deplorable balance of
trade. Cattle hides play a surprisingly
large role in trying to improve that bal-
ance of trade. In 1979, an estimated 19
to' 20 million hides worth $600 to $800
million will be exported. This is down
from 1978 when 24.8 million hides were
exported worth $687 million and up al-
most 50 percent from 13.6 million hides
10 years earlier worth only $10,0 million.
Let us not jeopardize this valuable ex-
port product.
In closing, I suggest that we let the
leather industry compete on the open
market like the cattle industry does, and
try to solve the leather industry's prob-
lems through other means, such as re-
ducing inflation, Government imposed
costs, and trade barriers abroad. I urge
your support in the defeat of this
amendment.
The CHAIRMAN. The Chair recog-
nizes the gentleman from Kansas (Mr.
SEBELIUS).
(Mr. SE039LIUS asked and was given
permission to revise and extend his
remarks.)
Mr. SEBELIUS. Mr. Chairman, the
thing that bothers me most about
amending the Export Administration Act
to limit hide exports is that it shifts a
problem from one economic segment, the
leather goods manufacturing industry,
to another economic segment, the cattle
industry and the consuming public.
This amendment does not solve the
problem. The problem is not the avail-
ability of hides, it is the price. The only
fair way to reduce the price of hides is to
increase production.
Earlier, Mr. GLICKMAN and I sent a
copy of the USDA task force report on
the hide problem to every Member of the
House of Representatives. on pages 27
and 28 of that report you will find an ex-
planation of why I oppose this amend-
ment. Proponents of the amendment ar-
gued that controlling exports would not
hurt cattle producers.
USDA\disagreed :
A $30 to $40 decline in average U.S. hide
prices would reduce the byproduct credit for
a 1,000-pound steer by $17 to $23. Assuming
that packers currently are operating on very
tight margins (many packers recently re-
duced their operations by temporarily clos-
ing or laying off some of their workers
because of low or negative operating mar-
gins), then they would be unable to absorb
this cut. This would mean that the packer
would then offer $17 to $23 per head less to
the producers for the live animal.
One reason why current slaughter is off so
much is that cattemen are now taking steps
to rebuild herds. If they perceive lower prices
in a negative sense, then rebuilding could be
slowed. Near-term slaughter volume would
remain a little above the level currently ex-
pected without their negative perception of
this action.
Longer term supplies, however, would be
lower, resulting in both reduced hide and
meat supplies and higher prices. Consumers
would pay more for both meat and leather
products in the long run, given this reaction
by cattlemen.
The USDA report also concluded that
export controls would not solve the long-
term problems confronting the leather
products manufacturers. The problems of
low productivity and competition from
imported leather goods would still re-
main.
What could consumers expect from a
hide export embargo? According to
USDA, a 40- to 50-percent decline in hide
prices could result in only about a 2-per-
cent reduction in wholesale footwear
prices. USDA did not think this would
happen:
However, prices for leather goods are not
likely to, decline, even if average U.S. hide
prices were to drop substantially. In years
past, when hide prices rose sharply, prices for
leather goods did not increase as rapidly as
hide prices. On the other hand, prices for
leather goods have not declined when hide
prices fell. For example, since 1965 there has
not been a decline in the quarterly index of
wholesale footwear prices as reported by the
Bureau of Labor Statistics.
In the longer run, prices of domestic leath-
er goods would continue to rise. Domestic
manufacturers have found it increasingly
difficult to compete with foreign manufac-
turers. U.S. export controls on hides would
cause prices of foreign produced leather
goods to rise and this would help domestic
manufacturers better compete with the for-
eign manufacturers by allowing them to raise
prices on domestic products.
Mr. Chairman, this does not sound too
much like helping consumers to me. In-
stead, we could be helping the leather
manufacturing industry raise prices. At
the same time, we would be discouraging
domestic cattle production, leading to
declining supplies of and higher prices
for beef and leather.
In recent weeks, domestic hide prices
declined almost 50 percent, from 90 cents
per pound on June 1, to 51 cents now.
For that reason alone I question whether
this amendment is necessary.
There are other reasons, too. We need
to look at what already has been done to
help this industry. The United States and
Argentina have negotiated an agreement
which will put 14 million to 16 million
additional raw cattle hides on the world
market. U.S. tanners will be able to buy
these hides. Passage of this amendment
would nullify this agreement, I am told.
The special representative for trade
negotiations also has. asked Brazil and
Uruguay to increase their hide exports.
I understand negotiations are continuing.
Passage of this amendment certainly
would destroy this initiative.
The United States has negotiated or-
derly marketing agreements with Korea
and Taiwan under which these two coun-
tries agreed to limit exports of nonrubber
footwear to the United States. The re-
straining period runs through June 30,
1981.
In addition to these agreements, the
President directed the Economic Devel-
opment Administration to fund a pro-
gram to revitalize the nonrubber foot-
wear industry. Under the Trade Act of
1974, firms from any industry injured by
imports can receive financial and tech-
nical assistance if they meet the statu-
tory-.criteria of the act-declining em-
ployment coupled with declining sales or
output. To date, more than two-thirds of
the 130-150 firms estimated to qualify for
benefits have been certified eligible.
Foreign purchasers acknowledge they
overbought this spring and will be elim-
inating or reducing further purchases for
the remainder of this year.
In short, Mr. Chairman, this amend-
ment is not needed, will not help the
leather products industry over the long
term, and will hurt the national economy
and balance of trade now and in the
future. I urge the defeat of this amend-
ment.
Thank you.
AMENDMENT OFFERED BY MR. IERTEL TO THE
AMENDMENT OFFERED BY MR. SHANNON
Mr. ERTEL. Mr: Chairman, I offer an
amendment to the amendment.
The Clerk read as follows:
Amendment offered by Mr. ERTEL to the
amendment offered by Mr. SHANNON: Add
the following sentence before the closed quo-
tation marks at the end of the amendment:
"The Secretary of Agriculture shall, by exer-
cising the authorities which the Secretary of
Agriculture has under other applicable pro-
visions of law, collect data with respect to
export sales of animal hides and skins.".
Mr. ERTEL. Mr. Chairman, the amend-
ment offered by the gentleman from
Massachusetts (Mr. SHANNON) and the
gentleman from Kentucky (Mr. CARTER)
is an extremely important one for our
domestic leather products industries. As
the other hide-exporting nations have
closed their doors on the international
demand to satisfy their own needs, the
United States has become virtually the
only exporter of hides. This has meant
that at a time when we have experienced
a short-kill in cattle-which is the source
of hides-the international demand for
these fewer hides has increased dramati-
cally. This has resulted in spiraling
prices for hides. It has not only reduced
the availability of hides, but it has also
placed hides out of the reach of many of
our leather-products industries-not to
mention their customers. Immediate ac-
tion is neded to prevent the loss of many
of our jobs and businesses-action of the
type offered in the Shannon/Carter
amendment.
The amendment is a fair one. We are
not dealing with an open and free inter-
national market. Instead, it is one of
forced and contrived shortages through
the actions of other nations. By the
adoption of the amendment we are sim-
ply acknowledging the fact that at a
time of distorted market pressures, we
must insure that our own industries are
not destroyed because of the selfish ac-
tions of other countries. We are not the
cause of the international shortage, but
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III 8089
we must live with it and deal with its Clearly cheap hides did little to assist where is the reciprocity? I think that is
consequences. the shoe industry. Early in 1979 the price what we are talking about here today.
We are not closing our doors as other of hides rose along with cattle prices The CHAIRMAN. The Chair recog-
nations have by adopting the Shannon/ bringing about this amendment, but nizes the gentleman from North Dakota
Carter amendment. We will continue to since May hide prices have dropped 45 (Mr. ANDREWS).
supply the world market with the same percent. Mr. ANDREWS of North Dakota. Mr.
percentage of our domestic hide supply We should also keep in mind, as Chairman, I would like to restate what
that we have in the past. Any interna- pointed out by the gentleman from Iowa, we pointed out earlier in this debate. The
tional scarcity is not of our doing, but that leather makes up less than 10 per- farmer is getting a bum rap in this with
our actions may motivate nations which cent of the price for shoes produced in some phony statistics. The price of cat-
import hides to vigorously encourage the this country, therefore cheap hides do tle hide has gone up 12 cents in the last
former hide exporting nations to again not mean cheap shoes. In fact, the best year, from 61 cents in Chicago to 73
open their doors for free and fair trade. way of reducing the price of hides is cents. As I said earlier, I do not have
We have attempted to do this through to encourage cattlemen to produce more than 2 pounds of leather in my
the Office of the Special Trade Repre- more which also assists the consumer pair of shoes. That is 24 cents additional.
sentative. Unfortunately, we have met of meat. Good cattle prices today are. If we want to put a lid on hide prices,
with no success. We must not allow our encouraging cattlemen to expand their we increase what the farmer has to get
'own industries to be destroyed because herds but we should also keep in mind for the other parts of the steer. I do not
others have chosen to close their mar- it takes nearly 3 years to produce those think too many Members of this body
kets. hides and that beef for tomorrow's mar- want-to increase the price of hamburger
Mr. Chairman, my amendment to the and a host of other things.
Shannon/Carter amendment is meant to ket. An error in adopting the Shannon amendment and therefore encouraging Mr. Chairman, I think also it is a bum
insure that timely and accurate infor- rap because every steer hide produced in
mation on the supply and demand of our cattlemen to possibly reduce the size of this country is there for the bidding of
hides is available to both the admminis- their herds will take years to correct. the local leather industry before it can
tration and our domestic industries. This I strongly urge the defeat of the Shan- go overseas. Finally, I think someone
is important so that the provisions of non amendment. should very earnestly point out that the
the Shannon/Carter amendment can be The CHAIRMAN. The Chair recog- return on the hide is three times the
effectively carried out. . nizes the gentleman from Iowa (Mr. average profit the farmer-feeder makes
I would point out that the Secretary GRASSLEY). on the entire steer and to jeopardize that
of Agriculture currently monitors the Mr. GRASSLEY. Mr. Chairman, look- is not playing fair with the feeding in-
market and supply of various grains. ing very 'short term, this amendment dustry in this country.
This amendment would not require the might fit the bill as something we want. The CHAIRMAN. The Chair recognizes
creation of any new process. It simply Because of those short-term policies we the gentleman from South Dakota (Mr.
places hides among those items which have the problem we have now in agri- ABDNOR).
are routinely monitored by the Depart- culture. It is the same short-term poli- (Mr. ABDNOR asked and was given
ment. cies like the Nixon price freeze and the permission to revise and extend his re-
Without the monitoring of hides which increase in beef imports that has gotten marks.)
would be required by my amendment, us into our present condition where there Mr. ABDNOR. Mr. Chairman, I, too,
the provisions of the Shannon/Carter are not enough cattle to provide the sort want to merely point out that if anyone
amendment would have to be imple- of prices the shoe industry wants to pay with an open mind has been following
mented on past data modified by histori- for the hides they need. this debate they certainly will have to
cal trends. Given our past experiences Mr. Chairman, let us not be short- recognize the fact that the price of hides
of major fluctuations in this market, it sighted in looking at the problems with is a very, very small part of the shoes you
is important that we have timely and which we deal here today. Let us look at are wearing. It is quite easy to try to
accurate information upon which to im- the long term, let us look at those poli- make a fall guy out of someone on the
plement the provisions of the Shannon/ cies that will encourage the investment, rising prices.
Carter amendment. Therefore, I urge my of the cattlemen in the industry so there Prices are going high and I think there
colleagues to adopt this perfecting will not be the shortage of the raw ma- is plenty of blame for everyone to share.
amendment to the amendment, and I terials we need. I think we should stop and think of this
urge the adoption of the Shannon! For that reason, Mr. Chairman, I urge very carefully before we start to destroy
Carter amendment. voting against the Shannon amendment. another major industry of this country
Mr. SHANNON. Mr. Chairman, will The CHAIRMAN. The Chair recog- that has just started to make something
the gentleman yield? nizes the gentlewoman from Maine (Mrs. of a small recovery.
Mr. ERTEL. I yield to the gentleman SNOWE). Mr. Chairman, I rise in strong opposi-
from Massachusetts. (Mrs. SNOWE asked and was given tion to the amendment.
Mr. SHANNON. Mr. Chairman, I have permission to revise and extend her
no problem with the gentleman's remarks.) The CHAIRMAN. The Chair recognizes
amendment. I think it .perfects my' Mrs. SNOWE. Mr. Chairman, it seems the gentleman from Wyoming (Mr.
amendment, and I intend to support it. we have heard a number of different CHENEY).
Mr. ERTEL. I thank the gentleman, problems here today regarding the cattle (Mr. CHENEY asked and was given
The CHAIRMAN. The Chair recog- industry and the shoe industry. I believe 'Permission to revise and extend his re-
nizes the gentleman from Oklahoma there are certain issues which have been marks.)
(Mr. ENGLISH). overlooked. Insofar as the export of hides Mr. CHENEY. Mr. Chairman, I rise in
Mr. ENGLISH. Mr. Chairman, I think to other countries and trading with other opposition to the amendment. I think the
one thing must be kept in mind with countries is concerned, other countries basic fundamental principal here has
regard to this particular amendment- in fact restrict their own export of hides been well stated by the gentleman from
namely the situation facing the cattle- in order to protect their own domestic North Dakota. The fact of the matter is
men. industry. that the shoe industry in America today
There is no question, as a rof Mr. Chairman, should we clearly sac- has difficulties. It has a lot to do with
the Nixon price freeze on beef result t9 of rifice our interests, the consumers' inter- things other than cattle hides. The fact
that drove cattle ests, the workers' interests, the industry's of the matter is this is a blatant attempt
prices to disastrously interests to the anticompetitive nature of to use the power of the Federal Govern-
low levels. other trading partners? Where is the ment to advantage one sector of the
I think we should look at exactly what trading equitability in this whole for- economy by disadvantaging the other, by
took place with regard to the leather mula? We are not only talking about 20,- placing restrictions on our capacity to
industry after 1973. Between 1973 and 000 employees in Maine working in the sell our agricultural exports overseas. I
1978, with extremely low cattle prices shoe leather industry. We are also talking hope the amendment will be defeated. I
and cheap hides, shoe production de- aobut 400,000 workers across the coun- think it deserves to be defeated over-
clined 3 percent in the United States. try. Where is the trading equitability, whelmingly.
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 M 8090
The CHAIRMAN. The Chair recognizes
the gentleman from Texas (Mr. HANCE).
(Mr. HANCE asked and was given per-
mission to revise and extend his re-
marks.)
Mr. HANCE. Mr. Chairman, I rise in
opposition to the Shannon amendment.
I think the main thing we need to con-
sider is last year we had a trade deficit in
this country of approximately $30 bil-
lion. Had it not been for agricultural
products we would have had a trade defi-
cit of over $60 billion. The end result of
this amendment if it is passed will label
us an unreliable supplier of agricultural
exports, even though cattle hides make
up but $600 million of our exports. It
will label us in all agricultural products
and I think that is the main thing that
should be taken into consideration.
I urge a no vote on the Shannon
amendment.
0 1650
The CHAIRMAN. The Chair recog-
nizes the gentleman from Colorado (Mr.
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CONGRESSIONAL RECORD-HOUSE September 18, 1979
increase his on-the-hoof price to make
up for his lost market for hides, or else
go out of business. Either way the Ameri-
can consumer wil' lose if the heavy hand
of big Government is placed on this al-
ready hard-pressed segment of our econ-
omy. -
The Congress should not undertake
to pit one segment of our economy
against another. We certainly should not
undertake to increase the price of beef
for American families by artificially
forcing down the price of hides. I urge
my colleagues not to contribute to the
inflation rate of yet another commod-
ity-meat on the table.
The CHAIRMAN. The Chair recog-
nizes the gentleman from Montana (Mr.
MARLENEE).
(Mr. MARLENEE asked and was given
permission to revise and extend his re-
marks.)
Mr. MAC. Mr. Chairman, I rise
in opposition to this sham. this self-in-
terest amendment brought to this floor
by an industry interested in buying
cheap hides at the expense of the pro-
ducer. There is no shortage of hides but
a shortage of willingness to compete.
The price of a hide has little bearing
on the price of a pair of shoes. The live-
stock industry could give these hides
away and the price of shoes would re-
main the same.
To support this self-interest bill is
to support a raid on the economy of an
industry, a war on the west.
(By. unanimous consent, Mr. MAR-
LENEE yielded the balance of his time to
Mr. JOHNSON of Colorado.) -
The CHAIRMAN. The Chair recog-
nizes the gentleman from Nebraska (Mr.
BEREUTER).
(Mr. BEREUTER asked and was given
permission to revise and extend his re-
marks.)
Mr. BEREUTER. Mr. Chairman, I rise
in opposition to the gentleman's amend-
ment.
Mr. Chairman, I represent what is
probably the largest cattle slaughter dis-
trict in the United States. My constitu-
ents have seen hide prices drop over 19
percent from their high earlier this
spring and they continue to go lower.
June 1 price was 90 cents per pound com-
pared to a price of 73 cents today. To
restrict exports of hides would most cer-
tainly have a negative reaction on the
cattle . industry. If cattlemen perceive,
lower prices, then rebuilding herds most
certainly will be slowed. This could only
result in a cost increase for consumers
in meat products, as well as other beef
byproducts.
Mr. Chairman, with regard to helping
the ailing shoe industry, I like to quote
from a USDA task force report on this
matter:
In the longer nun, prices of domestic
leather goods would continue to rise. Domes-
tic manufacturers have found it increasingly
difficult to compete with foreign manufac-
turers. U.S. export controls on hides would
cause prices of foreign produced leather
goods to rise and this would help domestic
manufacturers better compete with the for-
eign manufacturers by allowing them to
raise prices on domestic products.
Mr. Chairman, if we are to believe the
Department of Agriculture, it appears to
me that by accepting this amendment,
we will be increasing prices, rather than
trying to keep them down, and Mr.
Chairman, that can only mean bad news
for the cattlemen, as well as the con-
sumer. I wholeheartedly urge all my col-
leagues to reject this amendment..
The CHAIRMAN. The Chair recog-
nizes the gentleman from Colorado (Mr.
JOHNSON).
(Mr. JOHNSON of Colorado asked
and was given permission to revise and
extend his remarks.)
Mr. JOHNSON of Colorado. Mr. Chair-
man, one point that has not been raised
yet is why the period of 1974 to 1978
is regarded as the historical period. That
is a diabolically chosen period of time.
Why not 1965 to 1969 or any other
similar time? Why 1974-78?
Well, the reason is that because at that
time we had the highest level of cattle
herds that we have had in the United
States and we had the liquidation of the
herds going on at that particular time.
What final effect this 1974 to 1978 period
of time will have on our future exports
of hides is really unknown now but it
will be damaging to the cattle industry.
During that period, 1974 to 1978, the
cattlemen went broke across the West in
huge numbers. They are just now be-
ginning to recoup and this kind of special
interest legislation is the most unfair
kind of legislation that is imaginable.
We are trying to subsidize one indus-
try by removing their foreign market
and creating a buyer's market locally. It
is unfair, it seems to me, to penalize
one segment of the economy to try to
benefit another segment of the economy.
If you want to subsidize the shoe indus-
try, subsidize it, take care of it, but do
not subsidize it at the expense of the
cattle industry.
The CHAIRMAN. The Chair recog-
nizes the gentleman from North Caro-
lina (Mr. FOUNTAIN).
(Mr. FOUNTAIN asked and was given
permission to revise and extend his
remarks.)
Mr. FOUNTAIN. Mr. Chairman, I
yield to the gentleman from Oklahoma
(Mr. WATKINS).
Mr. WATKINS. Mr. Chairman, I thank
the gentleman from North Carolina.
I rise in opposition to the Shannon
amendment.
I would like to say, any person who
is in favor of this amendmet will actu-
ally be endorsing the rising prices in
the cost of meat over the meat counter.
As most of us know, the cattlemen in
this country have been losing money for
4 years. As a result, today they are finally
moving into an area where they might
be able to see a break even point and
be able to pay back some loans and some
notes at the banks. -If they see a decrease
in the price of hides occur in this coun-
try, they are going to find that they
cannot meet those feed bills and find
themselves in an even more desperate
position. As a result, they are going to cut
their herds and that will increase the
price at the meat counter and every
consumer in this country is going to have
to pay it. I think that point needs to be
considered when making your decision.
I urge you to vote no.
The CHAIRMAN. The Chair recog-
(Mr. KRAMER asked and was given
permission to revise and extend his
remarks.)
Mr. KRAMER. Mr. Chairman, I rise in
opposition to the amendment.
We cannot afford to undermine our
ranchers and farmers any further. Each
year more of our family farms and
ranches go under because they cannot
keep up with inflation and Government-
imposed costs.
Yet, the Congress now contemplates re-
stricting the market for cattle products.
The fact of the matter is that U.S.
tanners are free to buy as many hides as
they can use. But, instead of rising to the
challenge of competing with Italian shoe
manufacturers for this material, they
seek to bludgeon their own hard working
fellow Americans who work long hours,
often rising before dawn, protecting and
sheltering their breeders in the harsh
winters that grip the rangelands.
Cattle ranchers work hard to produce
the beef and hides that pay their mort-
gages, medical bills, and equipment pay-
ments, and taxes. Their margin of profit
is very tight.
It is worth noting that only 15 to 20
percent of the price of a pair of shoes
in the United States is materials. Most of
the cost is labor, transportation, manu-
facturers' profits, and others.
U.S. hides can be an important source
of offset for our balance of payments.
Our unequal balance of payments con-
tinues to drain away the strength of the
American dollar. Hide exports represent
a part of that battle to - become a net
exporter. According to the National Cat-
tlemen's Association we exported $685.7
million worth of hides in 1978. That
makes up for a lot of Flats and Toyotas.
Let me emphasize the point that if
our shoe industry is successful in im-
posing these restrictions on the cattle
raisers markets then as the family farms
and ranches disappear with increased
frequency, there will be even fewer hides
to purchase.
Since when has restricting the market
for anything ever increased its supply?
Under the proposed restrictions the
American rancher will either have to
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:D - HOUSIE
JR 8?92
nizes the gentleman from New Hamp- the hide supply available for use in this to our agricultural products. We only
shire (Mr. D'Asoias). country. Produce a fraction of the world's wheat.
(Mr. D'AMOURS asked and was given More than 1 million Americans are We produce half as much as the Soviet
permission to revise and extend his employed in leather-using industries. We Union. We are not the biggest wheat pro.
remarks.) must act here and now to protect these ducer, but we are the world's biggest
Mr. D'AMOURS. Mr. Chairman, I have Jobs. No one likes to use export controls ' wheat exporters, just as we are of many
sat here and listened to this debate. It to correct a difficult market situation. agricultural products. And thank God
occurs to me that there are some mis- However, in this case we have no choice. we are, because these and others are
representations being made; but more These controls would be lifted when making it possible to keep the dollar
importantly, the entire point of what we either of two basic events occur in the afloat-barely afloat.
ought to be debating is being missed. I cattle hide market: First, other hide- If we start a process of protecting every
hope this issue does not resolve itself producing nations renew their exports, or industry with restrictions on exports, we
into a determination of whether we have two, domestic supply exceeds domestic are being just as protectionist as if we
more cowboys than cobblers in this coun- demand. These provisions will insure that limit imports. For while it maybe protec-
try, or wealthier cobblers than cowboys, these controls will be lifted when the tionism in a less familiar form, it is pro-
or vice versa. current, unfair hide situation is cor- tectionism all the same; the cost will be
The question is fair trade. That is what rected. I urge my colleagues to support an ever increasing weakness of the dol-
everybody is purporting today to defend. this important amendment. lar abroad and more inflation at home.
I will acknowledge that I have some The CHAIRMAN. The Chair recog- Sam Rayburn used to say, "When you
of those, almost half a million leather nizes the gentleman from Washington are in doubt, vote your district."
workers, including shoe workers, living (Mr. F O EY) for 5 minutes. Most members are not in much doubt
in my district. I will acknowledge that (Mr. FOLEY. asked and was given about that amendment if their districts
recently a seal tannery in my hometown permission to revise and extend his include many shoe manufacturers or
was closed partially because of this prob- remarks.) cattlemen. I make no appeal to them,
lem and some 200 people were put out Mr. FOLEY. Mr. Chairman, I think we because they know how they will vote on
of work; but let us keep our eye on the ought to deal a little bit in statistics this issue. I respect their judgment and
important point. That is whether or not which I realize Members are tired of sense of responsibility to their constitu-
we are fairly or unfairly acting in this hearing cited. But to be fair about it, in ents. That is part of what it is to be a
respect. the debate today confusion has arisen as Representative in this House.
We produce 15 percent of the hides in to the difference between the cost of hides I do want to talk for a moment, how-
world commerce. We export approxi- and the cost of leather. The price of shoes ever, to those Members who neither rep-
mately 70 percent of all the hides' in in- is not controlled only, by the cost of the resent great cattlemen's associations nor
ternational commerce. raw price of hides to manufacture the have great numbers of shoe or leather
This amendment does not ask for any- shoes. I do not deny that the $8.80 cost manufacturers. To Members in that
thing untowardly. This amendment says for leather for a shoe that sells for about group who may be in doubt, I would
let us cut that back to about 56 percent. $53 at retail has increased approximately suggest that they consider this issue in
It is pretty generous when you consider $4.40 in the last 5 years which is not in- a wider framework than as an issue par-
that the other major producers of hides, significant' But this increase in the raw titular to shoe or the leather industries
Brazil, exports none, Uruguay none; price of hides is not responsible for $130, on one side and the cattle industry on
Argentina none, except until recently. $140, or $160 shoes, as the gentleman the other. Instead, I would suggest they
The CHAIRMAN. The Chair recognizes from Pennsylvania suggested a few mo- think about our future as a trading na-
the gentleman from Massachusetts (Mr. ments ago. ' tion; the consequence to the strength of
BOLAND). Also, it is unfair to suggest that by the dollar; and the course of inflation if
(Mr. BOLAND asked and was given creating a forced and unnatural depres- we continue to decline as a major trad-
permission to revise and extend his re- sion in the price of hides, somehow 400,- ing nation.
marks,) 000 leather and shoe manufacturers are I suggest the Members think about the
Mr. BOLAND. Mr. Chairman, the in- going to have their jobs saved and the danger that this innocent-sounding
dustries in this country that use cattle shoe industry is going to suddenly have a amendment may well become just the
hides are currently facing a supply crisis. prosperous and bright future. first of a long long line of amendments,
In the last 3 months, more than 80 per- The shoe and leather industries have presumably to protect a particular com-
cent of the cattle hides produced in this other problems, grave endemic problems pany or industry, then a group of work-
country have been exported. This mass that are not occasioned by the rise in the ers, and so on. It will be difficult to say
exportation of hides has left the leather- price of hides. - no to any company, any union appealing
using industries of this country without Indeed, the Departmqrrt of Agriculture for special help.
their basic raw material to insure a sup- statistics, which the $aentleman from And what of the dollar, of inflation, of
ply of hides to the U.S. shoe and leather Massachusetts quotes, indicate that the the role of this country as a trading na-
industries. Failure to provide relief for cost of leather has only been a little bit tion? I can see a very bleak export future
these industries will mean the end of higher than the general cost of menu- for our Nation, if we approve this
u a , V V Mr. Chairman, I admire the gentle.
shoe and leather operations, and cost the For indeed, this amendment creates a man from Massachusetts (Mr. 1SxAN-
American consumer millions by forcing special price control on hides. It singles NON). I know he is representing his dis-
them to purchase expensive imported out this one product in this one
footwear. industry trio with sincerity and great effective-
and, for the first time in an amendment ness and yet know that many stand with
I believe we must act to control the to the Export Control Act specifically him. I would hope that every Member
number of hides available for exporta- restricts a nonstrategic product from who does not feel compelled by constit-
tion. The amendment offered by Mr. export, uency or commitment to vote for this
SusHNON of Massachusetts would bring The suggestion has been made that we amendment would stand with those of
hide exports back to the more rea- are being exploited by other countries, us who plead for a broad or national
sonable levels of 1973-77. As other na- because they have cut off the supply of and world economy; for the free and ex-
tions have closed off hide exports, the hides for export. Argentina has recently panding trade that has made this coun-
United States has become virtually the announced that it will permit exports. try great in the past and offers us the
only major supplier of hides to the world. Canada permits exports, New Zealand only hope for economic development and
This country produces 15 percent of the permits exports, and Australia permits prosperity in the future.
world hide supply, but provides more exports. All of those countries are major M: r. Mr. Chairman, will the,
than 75 percent of the hides traded on producers of hides, gentleman yield?
the international market. This is an un- It is said that while we produce only
fair game and U.S. industry and U.S. con- 15 percent of the world's hides, we ex- Mr.
FOLEY. I yield to the gentleman
sumers are getting clobbered. The Shan- port 70 percent. Time and time again I from Minnesota,
non amendment would bring stability to could quote similar figures with respect Mr. FRENZEL. Mr. Chairman, I thank
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IHI 8092
CONGRESSIONAL RECORD-HOUSE September 18, 1979
the distinguished chairman of the Com-
mittee on Agriculture for yielding.
I think the gentleman has made
a splendid statement. It is one which I
wholeheartedly endorse, and I hope, too,
that the House will listen to the gentle-
man's suggestions.
Mr PICKLE. Mr. Chairman, will the
gentleman yield?
Mr. FOLEY. I yield to the gentleman
from Texas.
Mr. PICKLE. Mr. Chairman, I want to
add my comments to those of the gentle-
man in the well. He has made one of the
most impressive comments I have ever
heard on this question.
Mr. Chairman, the restrictions and
protection which would be imposed on
U.S. hide exports by this amendment are
not what is needed at this time. 'The U.S.
leather-goods-producing industries are
having a difficult struggle at the present,
but it is not clear that this amendment
would be the answer to their prayers and
solve their problems. There are other
courses of action which would relieve
their situation.
The U.S. leather-goods industry is suf-
fering from a severe shortage situatibn
caused by rapidly rising prices for raw
cattle hides and a simultaneous short
supply of those hides. This situation is
the result of the United States shipping
abroad a large percentage of its raw cat-
tle hides. But it is also largely a result of
the crisis which hit the U.S. cattle indus-
try recently which caused severe cut-
backs in herds.
It is very likely that this high price/
short supply situation is one which will
soon evolve its own solution without any
legislative action from this body.
The U.S. cattle industry is now in a
state of rebuilding. Within a year, or a
year and a half, or 2 years, this cycle of
rebuilding should be well on its way and
hides should be more plentiful. In addi-
tion to this, already we have seen a drop
in hide prices from the heights they
reached this spring. Why do we need the
restrictions on exports this amendment
would impose if these restrictions might
harm us in the international market-
place, and if this situation will very likely
resolve itself without our action?
This summer we dealt with the multi-
lateral trade bill. The point of that kill
and the international negotiations be-
hind it, was to make international trade
take place in a freer market. However, no
sooner have we voted "aye" on that "free
trade" bill than we have turned around
and tried to place all sorts of special-
interest restrictions on our exports and
imports. This is hardly in the same spirit
of that trade bill.
The cattle people have asked less from
their Government than any industry in
America. Even when prices have been the
lowest, and the cattlemen are being hurt
the worst, still the cattlemen have
"hunkered down" and node out the
crisis. We ought to help the cattlemen
now. Passing this amendment further
hurts the cattle industry. It should not
be passed. There are better ways to help
the leather industry, and we should pur-
sue those courses. We do not help our
country by restricting' exports. Thank
Mr. FOLEY. Mr. Chairman, I thank
the gentleman from Texas (Mr. PICKLE)
for his remarks.
(By unanimous consent, Mr. ERTEL
yielded his time to Mr. D'AMouRs).
Mr. D'AMOURS. Mr. Chairman, I
would like to caution my brothers in the
House and my sisters in the House and
state that the remarks just made about
the new attitude of Argentina would not
bear very close scrutiny, because we will
find that agreement is in fact not an
agreement. It is something they cancel
at any, time they desire to do so.
The question is, as the chairman of
the Committee on Agriculture said,
broader than provincial interests and
broader than parochial inte rests.
Let me ask this of the Members: How
can we be for fair trade if we are for
unfair trade? We cannot have it both
ways.
The basic figures have not been dis-
puted. The fact is that this is not a free
market, but that we are Competing with
absolute embargoes.
Mr. Chairman, I rise in support of this
amendment to H.R. 4034, the Export
Administration Act amendments of 1979,
which will serve to relieve our domestic
leather producing and consuming indus-
tries from discriminatory trade practices
of other nations.
While this country produces only 15
percent of the world supply of cattle-
hides, we provide 75 percent of the
hides traded on the open market. Other
major cattlehide producing nations=
Particularly Argentina, Brazil, Uruguay,
and South Afrioa-severely restrict the
exportation of their cattlehides so as to
/protect their domestic industries. We are
not dealing here with an open market-
place which provides each participant
the normal protection afforded by a com-
petitive trade environment. In the in-
stance at hand we are dealing with a
marketplace which is by design injurious
to that nation which. allows its com-
modity to be traded freely throughout the
world.
The discriminatory hide trading en-
vironment is hurting our domestic in-
dustries. With the closing' off Seal Tan-
nery in Manchester, N.H., 200 people have
lost their jobs. Shoe shops are closing and
consolidating operations. Retailers of
domestic leather goods are finding their
customers going elsewhere as a result of
the higher prices. None of these indus-
tries are looking for protection from
competition-they are looking for the es-
tablishment of a fair trading environ-
ment in which they can compete on an
equal footing with other nation's manu-
facturers. The amendment before us will
allow for the creation of such an
environment.
The result of this amendment will not
be to cut off completely the export of
U.S. hides as other nations are, doing.
The amendment simply calls for limit-
ing the number of U.S. hides to be ex-
ported so that enough are retained
domestically for use by our industries.
Our domestic industries require annually
approximately 18 to 20 million hides, but
if . trade is allowed to continue as is,
our industries will only have half, this
amount available to them. Further, these
limited restrictions will only remain in
place until 'the other hide producing
countries allow their hides to be traded
on the open market or until the U.S.
supply of hides increases sufficiently to
allow all hide consuming nations to be
satisfied. This measure is moderate and
fair.
During the multilateral trade nego-
tiations the problem of other countries
embargoing their hides was raised by the
U.S. negotiators-the concern of the
United States,.fell on deaf ears. Since
the fall of 1978 the special representative
for trade negotiations has held talks
with the governments-of Argentina and
Brazil in an attempt to persuade these
countries to allow their hides on the
world market. Again, little has been
gained.
Earlier this session this body over-
whelmingly passed the implementing
legislation for the multilateral trade ne-
gotiations. It is viewed that one of the
primary benefits to accrue as a result of
this legislation will be the fostering of
fair and reciprocal trade practices and
thus the development of a, truly com-
petitive trade environment. The ques-
tion before us is whether we are going
to allow unfair, discriminatory, and non-
competitive world trade practices with
respect to hides or whether we are going
to follow through with the spirit of the
MTN's and through the enactment of
this amendment provide ourselves with
fair competition in the hide market. To
choose the former is to allow for the
continued indirect subsidization of for-
eign industries and jobs at the direct
expense of 245,000 Americans employed
in the leather manufacturing industry
and the 180,000 Americans employed in
the retailing of domestic' leather prod-
ucts. In the spirit of fair trade I urge
my colleagues to choose the latter and
adopt this amendment.
The CHAIRMAN. The, Chair recog-
nizes the gentleman from Texas (Mr.
STENHOL82).
(Mr. STENHOLM asked and was given
permission to revise and extend his re-
marks.)
Mr. STENHOLM. Mr. Chairman, am-
plifying a little further on the remarks
of the distinguished chairman of the
Committee on Agriculture, let me say
first that I associate myself with his re-
marks, and I want to make one addi-
tional point.
First, there' is no shortage of hides.
The domestic industry needs 18 million
every year, but last year we 'shipped
391/2 million and next year we will be
shipping 37 million. There is no shortage
of hides.
To those who contend there is an in-
satiable appetite for hides in many places
such as Japan, let me state that that just
is not so. That statement just cannot be
defended when we see the prices of hides
decrease from my district, because at this
very moment the decrease is about 31
percent.
Anyone can contend that we have un-
fair trade and that there is something
being perpetrated upon our domestic in-
dustry, But I happen to represent both
cattlemen and manufacturers,, those in
the manufacturing business, in the boot
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September 18, 1979 CONGR]ESSiONA.L RECORD - HOUSE
and leather industry. The facts do not These increases are directly related to
bear the contentions out, the proportionate level of the export of
Are we willing to reduce cattle income hides, which has risen precipitously in
down to $17 a head in order to reduce the last few years-despite the declining
the price of shoes by 60 cents? We know size of the beef cattle herd. In 1975, cat-
these savings will never be passed on to tle production peaked at 42.6 million
the consumer. That is the basic issue. head; dropped to 41.9 million in 1977;
That is the issue that we have to con- last year was only 39.5 million head; and
tend with. in 1979 is expected to reach an 11-year
We can all look at the facts, and we low of less than 35 million cattle.
may see cattle prices go down, but other The United States exports a steady
prices do not go down. Once the prices 24.5 million hides annually, leaving a de-
go up, they do not come down because creasing supply for American needs, Do-
those people do not play under the same mestic requirements for the United
rules on that side as we do on the cattle States are 18 to 20 million hides per year.
end. We look at the facts and. see that In 1979 that means we will be between
this has been the case time and time 8 and 10 million hides short--somewhere
again. In-the range of 40 to 50 percent of our
Mr. Chairman, it is interesting to note needs.
that we can ship a hide from Houston, The corrollary to this shortage is an
Tex. to Japan cheaper than we can ship increase in price for the available hides.
that hide from Houston to Maine. In December 1977, hides cost 38.2 cents
The CHAIRMAN. The Chair recog- per pound. In May 1979, the price was
nizes the gentleman from Texas (Mr. .$1 per pound. Companies that make
HicHTOWER). leather products have been forced to
(Mr. HIGHTOWER asked and was pay top dollar in order to fulfill their
given permission to revise and extend his long-term ' contracts and the price in-
remarks.) crease, as usual, has been passed on to
Mr. HIGHTOWER. Mr. Chairman, the consumer.
what this country really needs is pre-. ? Experts tell us that we cannot expect
ferably an agricultural product that is any relief from natural growth in the
in great demand worldwide, one that no- beef cattle herds until 1983 at the earli-
body in this country wants to have any- est. That is too long to wait. Potential
thing to do with. We need a product jobs will be lost because contracts can-
that we can raise and perhaps sell princi- not be filled, because foreign imports
pally to the OPEC nations. That would underprice American products, and be-
really help our balance of payments. cause consumers simply cannot afford to
But nobody in this country wants that. pay higher and higher prices for belts,
The problem is that if we grow it, if we handbags, shoes, luggage, and other
raise it, or if we manufacture it here, it leather products-not all of which are
is going to have a domestic market, and luxuries by any means.
those who are interested in protecting Mr. Chairman, it is totally unfair to
the domestic market are going to do it. place the burden of shortages and the ac-
The question is a matter of trade. companying high prices on the consumer
I wish to state my disagreement with and I urge my colleagues to vote for the
my friend, the gentleman from Mass- Shannon amendment.
achusetts (Mr. SHANNON), who says that ^ 1710
the cattlemen are not concerned about The CHAIRMAN. The Chair recog-
this. They are very much concerned be- nizes the gentleman from Massachusetts
cause they know to the penny how much (Mr. MAVROULES).
that cow is going to bring on the hoof. (Mr. MAVROULES asked and was
That is going to be reflected in the price given permission to revise and extend his
of the hide. remarks.)
Mr. Chairman, I cannot resist saying Mr. RODINO. Mr. Chairman, will the
that it is a question of asking whose ox gentleman yield?
Is being gored. Mr. MAVROULES. I yield to the
The CHAIRMAN. The Chair recog- gentleman from New Jersey.
nizes the gentlewoman from Massachu- (Mr. RODINO asked and was given
setts (Mrs. HECKLER). permission to revise and extend his re-
(Mrs. HECKLER asked ad was given marks.)
permission to revise and extend her re-, RODINO. Mr. Chairman, I want to
marks.) express my strong support for the
Mrs. HECKLER.' Mr. Chairman, ob- amendment offered by my colleague from
Viously this afternoon we have heard a Massachusetts (Mr. SHANNON) to pre-
great deal about the cattle interests and vent the mass exportation of U.S. cattle
about the shoe industry. I would like to hides. I am deeply concerned about the
say that the issue is one that goes beyond critical situation facing America's
both of those issues. leather industry and its ultimate effects
I present for exhibit before this House on American workers and consumers.
a holster made in my district which sold The dramatic increase in the export-
last year at $3.67; this year it sold for ing of American cattle hides has resulted
$5.40. This is an increase of 47 percent. in a severe shortage of hides for Amer-
Shoelaces sold by the dozen at $6.81 ican leather industries. This situation is
last year and sold at $11.70 this year. Jeopardizing tens of thousands of jobs
That is a 71.8 percent increase. A night nationwide. In my home State of New
watchman's clock case, which I did not Jersey over 8,000 workers-most of them
bring with me but which we have for ex- from minority groups-are faced with
hibit, increased in price from $3.50 to losing their jobs in the leather industry
$10.50-a 200-percent increase, because of the hide shortage.
IH[ 8093
Apart from my immediate and deep
concern about the loss of businesses and
employment in New Jersey and other
States, I find- it unconscionable that we
continue a policy that contributes to our
escalating inflation rate.
The price of cattle hides in this coun-
try has nearly tripled in the last year
and a half, and -the cost is ultimately
paid by consumers.
Also, the trade deficit in our leather
industry was over $2.5 billion in 1978,
nearly 10 percent of the entire U.S. trade
deficit. All hide-producing countries ex-
cept the United States have imposed
strict controls on exporting hides.
Mr. Chairman, the Congress has the
responsibility to do the same in order to
protect American industries, workers,
and consumers. I urge my colleagues to
support this amendment.
Mr. MINISH. Mr. Chairman, will the
gentleman yield?
Mr. MAVROULES. I yield to the gen-
tleman from New Jersey.'
Mr. MINISH, I thank the gentleman
for yielding.
Mr. Chairman, I would like to say to
my good friend, the chairman of the
Committee on Agriculture, that he re-
ferred to the districts that sell the hides
and he referred to the districts that have
the shoe manufacturers. But what he
forgot to say was that all of the districts
wear shoes.
Mr. MAVROULES. Mr. Chairman, the
tanners and leather manufacturers in
this country are facing a crisis of alarm-
ing proportions. But much more is at
stake here than the industry and the
million plus people it employs, either
directly or indirectly.
And much more is at stake here than
a parochial, regional bone to fight over.
Simply put, the fortunes of the leather
industry impact on all of us, as consum-
ers and as a nation as a whole.
As consumers, we may very quickly
arrive at the day when we cannot afford
finished leather goods: Shoes, coats,
handbags.
And as a nation, we need only look at
our trade deficit to see what happens
when our raw hides return from overseas
as finished leather products.
The leather industry has arrived at its
moment of truth.
But it is also our moment of truth in
Congress to act now to limit the whole-
sale exportation of our cattle hides.
I am speaking today in support of an
amendment that would do just that:
Guarantee the Nation's tanners and
leather manufacturers an ample supply
of raw material.
And, more important, a fair market
for these hides and the chance to com-
pete with foreign buyers on equal foot-
But if we do not act favorably on this
amendment--I am afraid-we will be re-
sponsible for perpetrating a disastrous
price explosion in the leather goods
market.
An explosion reminiscent of the early
days of the. OPEC price escalation in
1973.
Mr. Chairman, let me take a moment
to reflect upon what looms for the tan-
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CONGRESSIONAL, RECORD - HOUSE September 18,'1979
ning and leather industries-and our
Nation-if we do not pass the Shannon
amendment.
It is estimated that this year we will
export 24 million hides out of a total
domestic hides supply of 34 million.
About 70 percent of our total domestic
supply will leave our shores. This leaves
about 10 million hides for domestic use,
where 19 million are needed to keep the
industry afloat, the plant gates open,
and tanning and leather people em-
ployed.
If this point is not enough, consider
the point that makes the leather situa-
tion a national issue.
I mentioned earlier the.impact of im-
ported leather products on our national
trade deficit.
When our hides return as finished
leather products, the Nation is $2.5 bil-
lion poorer, equal to 10 percent of our
total trade deficit.
I am certain.that I do not have to re-
mind my colleagues of the effect our'
trade deficit has on inflation-and of all
the words each of us has directed at this
severe national problem.
I am also certain that now many of
you can see the hides export issue as
having national importance.
For passage of this amendment is a
blow against skyrocketing inflation.
This year it is estimated that the aver-
age price of a pair of men's shoes will
increase $6 to $10 at the retail level.
And the average price of women's and
children's shoes $4 to $8 at retail.
Failure to pass the amendment means
that women's boots will increase some-
where between $12 to $18 a pair.
Failure to pass the Shannon amend-
ment, Mr. Chairman, means that a man's
short leather Jacket, which was $30 high-
er last year than the year before, will be
an additional $30 to $35 higher this year.
This litany of painful prices increases
goes on and on.
If something is not done immediately
to curb the mass exportation of raw
hides, the resulting, higher leather costs
could increase the amount spent by a
husband, wife, and three children by
$100 a year per person.
Bringing their total expenditures for
footwear needs to $500 a year.
I ask any member of this body to tell
me and the American public how any
American can afford such costs.
Particularly when we consider that
these will be placed an too of the high-
est energy costs in our Nation's history.
Mr. Chairman, we are the only coun-
try in the free world that allows such
exploitation of a native raw material.
While we abide by the doctrine of a
free market, other hides producing coun-
tries embargo their products and in-
crease, at the same time, their finished
leather exports to us.
This is the present situation, and little
has been done to improve it, although
we can count the Argentine accords as a
success, it's a small one.
And a lot more needs to be done.
This amendment, which I am speak-
ing in support of, can further improve
the domestic tanning and leather indus-
tries' otherwise sagging future.
And produce not only a free world
market for hides but, more important, a
fair one.
This amendment does not embargo
hide exports, as other countries do. It
simply limits them to previously accept-
able levels for sale on the world market,
And the amendment is not asking for
a Government handout, 'for direct sub-
sidies to this beleagured industry.
It simply allows us to prevent the cur-
rent shortage from every recurring.
Shortages that forced the price for a
pound of leather to go from 37 cents in
1977 to 58 cents in December of 1978 to
73 cents a pound on the current market.
If we in Congress are serious about
protecting American jobs, keeping the
price of leather goods acceptable, and
about turning our trade deficit around,
here is our epportilnity.
If tthe 96th Congress is serious about
its campaign pledges to do something
about inflation, let us pass this amend-
ment and strike at a chief culprit. Our
trade deficit, 10 percent of which is at-
tributable to finished leather imports.
Let us help this industry back on its
feet, for sure, but let us also help our-
selves and the American public as con-
sumers, giving ourselves the opportunity
to continue buying leather goods-Amer-
ican leather goods-at reasonable prices.
Mr. Chairman, let us do all these
things with the passage of the. Shannon
amendment limiting hide exports.
Thank you.
The CHAIRMAN. The Chair recog-
nizes the gentleman from California
(Mr. LAGOPIIARSINO).
Mi. MONTGOMERY. Mr. Chairman,
will the gentleman yield?
Mr. LAGOMARSINO. I yield to the
gentleman from Mississippi.
(Mr. MONTGOMERY asked and was
given permission to revise and extend
his remarks.)
Mr. MONTGOMERY. Mr. Chairman, I
rise in opposition to the Shannon
amendment; it certainly is an amend-
ment against one industry, the cattle in-
dustry.
The cattlemen of this country have
not asked 'for Government help when
cattle prices and hide prices were down.
What they are asking is to leave the
cattle industry alone and not punish one
industry by this impaired amendment.
Supply and demand has always worked
in this country and it will work again
if the Government will not interfere and
pass amendments such as this one being
debated.
I urge my colleagues to vote against
this amendment.
(Mr. LAGOMARSINO asked and was
given permission to revise and extend
his remarks.)
Mr. LAGOMARSINO. Mr. Chairman,
I rise in opposition to the Shannon
amendment. Adoption of the amend-
ment would run counter to the efforts
made by the United States to achieve
broad agreement in the multilateral
trade negotiations.
Our former trade Ambassador Strauss
opposes export controls on hides. Japan,
as the No. 1 customer, has already
agreed to limit-imports, and, as Strauss
argues, imposing controls now would-
only reinforce Japanese fears of the
United States as an unreliable supplier.
The United States and Argentina
have negotiated an agreement which
will put 14 to 16 million additional raw
cattle hides on' the world market, and
some of those, of course, will be avail-
able to U.S. tanners. It is obvious, as
indicated in the past, that American
hide production is far in excess of Am-
erican demand for raw hides. Export
controls are against our policy of free
trade and they would hurt our balance
of payments and 'raise the price to
American consumers.
Following are two mailgrams from the
trade associations in opposition to the
Shannon amendment:
HOUSTON, TEx.,
July 16. 1979.
Hon. ROBERT J. LAGODMARSINO,
House Office Building,
Washington, D.C.:
We understand a new bill or an amend-
ment to the Export Administration Act of
1979 will be introduced to remove cattle
hides from the category of agricultural
products and therefore remove them from
the jurisdiction of the Secretary of Agri-
culture and forcing cattle hides under man-
datory export controls. This is being done
because the Secretary of Agriculture has so
far refused to certify a shortage of cattle
hides because there is none. In fact, this
country produces almost double the amount
consumed by our leather industry. If this
amendment passes, it will cost the consumer
drastically in higher meat prices and in-
crease our balance of payment deficits which
we definitely do not need.
We ask your support in defeating this
amendment or any new bill introduced
which would allow this to happen. The fol-
lowing are some of the prestigious groups
which are against this amendment:
National Farm Association, National Cat-
tlemen's Association, National Orange.
American Meat Institute, National Inde-
pendent Meat Packers Association, Western
States Meat Packer Association, National
Renders Association. National Hide Asso-
ciation.
We ask you to join in with these groups
to defeat this attempt.
SOUTHWESTERN TRADING CO.
BOSTON, MAss., September 17,1979.
Hon. ROBERT J. LACOraARSINO,
House Office Building,
Washington, D.C.
DEAR CONGRESSMAN: Defeat the Shannon
amendment or any other effort to impose
export controls on cattle hides--standby or
otherwise.
We wish to update you on developments
since our Mailgram of July 27, 1979. Since
than the following has happened:
1. The United States and Argentina have
negotiated an agreement which will put 14 to
16 million additional raw cattle hides on the
world market. U.S. tanners will be able to
buy these hides. Passage of the Shannon
amendment would jeopardize this agree-
ment.
2. Japan has now permitted greater imports
of U.S. processed and semi-processed leathers.
Passage of the Shannon amendment would
jeopardize this.
3: Hide prices have declined 40 to 54 per-
cent in the last 5 months-without the
Shannon amendment.
4. It is obvious, as indicated in the past,
that American hide production is far in ex-
cess of American demand for raw hides. Ex-
port controls are against our policy of free
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September 18, 1979. CONGRESSIONAL RECORD -HOUSE
H 8095
trade, and they would hurt our balance of the U.S. leather industry and its adverse charges are nothing new. In 1966 and 1972,
payments, raise costs to American consumers international consequences could be far both years following the liquidation side of
and hurt American agriculture. reaching. This is not the time for the the cattle cycle, similar restrictions were
Vote "No" on export controls for hides. Congress urged by tanners and footwear manufac.
Sincerely, to be legislating without a full turers. In both years their actions caused
THE AMERICAN ASSOCIATION or HIDES, understanding of what might result from hide prices to drop; cattle prices also fell
SKINS, AND LEATHER MERCHANTS. our action. since the hide is the largest single by-
The CHAIRMAN. The Chair recog- I believe the gentleman from Massa- product, but the price of shoes increased
nines the gentleman from New it r cog- chusetts (Mr. SHANNON) has done a sere- anyway.
ice by dramatizing the plight of Amer- In 1972, the Export Administration Act
BINGHAM) to close debate. ica's leather industry and it seems to be was modified so as to require concurrence
Mr. BINGHAM. Mr. Chairman, I would the Congress must now carefully evalu- Of the Department of Agriculture should the
just like to inform the Committee that ate the various possibilities for strength- Commerce Department recommend restricted
ex of g hid s. U. agricultural pf the p ob l ms
this amendment was not offered in the siting and enhancing its competitive I n
Committee on Foreign Affairs and, there- u hides. This was a result of the problems
and the censingd ysem exports x-
fore, the committee has taken no posi- Today situation. we are limited to either voting Japan n caused
Lion on it. Today licensing system of hide e
I would further like to inform the for or against export controls on hides. ports, also principally Involving Japan.
It is my intention ot vote against my There. Is a possibility that an effort will
Members, however, that the adminis- amendment because I believe a more be made to amend H.R. 3043 that would
trat on aposition mendment strongly an in opposition thorough consideration of the issue by currence ofmthoe Department of Agriculture includ the Department a Commerce, as well es as the appropriate Congressional commit- should the Commerce Department decide to
tees could achieve some effective solutions move to restrict hide exports or, for that
the Department of Agriculture. for the leather industry without ad- matter, any agricultural commodity.
O Mr. HANLEY. Mr. Chairman, I rise in versely affecting beef production and We feel that the integrity of the U.S. is at
support of the amendment offered by costs. I am certain a positive, flexible pro- stake in being a reliable supplier in agricul-
my colleague Mr. SHANNON, designed to gram could be adopted and imple- tural commodities in world trade. The ques-
alleviate the desperate situation in the mented.o tion of agriculture's vital role in holding
domestic leather industry by restricting 0 Mr. WAMPLER. Mr. Chairman, I am down our trade deficit is also "on the line."
cattle hide exports to reasonable his- opposed to the amendment offered by the that eh have been rdeveloPedo vero the yearss torical levels. The current problem is years.
clear, and failure to act will only from Massachusetts, Mr. Therefore, we stroriglq urge you to join with
y pro- SHANNON. This amendment would limit us in defeating any attempts to amend H.R.
duce results in the leather industry yearly U.S. hide exports to a percentage 4034 in a way that would weaken the role of
which are equally clear. Simply stated, of total U.S. supplies that does not ex- the U.S. Department of Agriculture 'in pro-
ws are exporting an excessive amount of teed a percentage of hide exports in rely- viding concurrence on the question of any
cattle hides, and as a result prices of tion to U.S. hide production durin the agricultural commodity exports, including
domestic hides have skyrocketed in re- g hides.p
ex-
cent months. The net result will be dis- cession base to period thhfat provision sThere is which I also 0 Mr. GUARINI. Mr. Chairman, I rise in
astrous inflationary increases in the also
find objectionable. support of Mr. SHANNON'S amendment to
price of shoes and other leather goods, The Secretary of Agriculture in a let- H.R. 4034.
and the potential closing of plants with ter dated July 31, 1979, expressed his Although I personally look with dis-
the resulting loss in jobs. With inflation strong objection to the amendment favor upon controls in a free economy,
already running at double-digit levels, offered by the gentlemen from Massa- Y feel that the facts require action in the
and this Nation in the early stages of re- chusetts. A pertinent portion of that let- nature of Mr. SHANNON's amendment. His
cession, we have no choice but to take ter I insert in the RECORD at this point: amendment is a reasonable approach to
actions necessary to increase domestic HIDES a problem which if allowed to persist
availability and reduce prices. We simply threatens the viability of the American
cannot continue to supply the world This amendment could result in arbi- trarily restricting hide leather industry.
with hides and in the process suffer in- age of domestic op exports a percent-
or A number of firms located in my dis-
creased inflation and economic disloca- belowf tpercentaage ge exported which is at or trict are faced with a crisis due to the
tion at home. I strongly su per e during the
sport our ef- base period. unprecedented- Increase in exports of
forts toward freer world trade, but free The level of exports permitted would be cattle hides and the resulting escalation
trade is a two-way street. Either we must based on past market conditions rather than of prices. From December of 1977 to last
receive the assistance of other potential the current supply/demand situation. May, the price of hides rose 154 percent.
exporters, or we must act to restrict our The foreign country most affected by ex- During the first 6 months of 1979, ap-
own exports. Efforts to convince others port limitations on hides is Japan our proximately 75 percent of our hides were
largest
to increase their exports have failed to ports. These single market restrictions for
would woold agricultural e further- r exported with the result that our domes-
date. We are, therefore, left with only damage our credibility as a reliable supplier. tic leather industries were able to obtain
one logical course of action. Reduced hide prices could have a negative only 50 percent of their needs from
By reducing our current exports to effect upon the cattle producers and meat domestic sources.
more reasonable historic levels we can packing industry. It could discourage the Most other cattle-producing countries
hopefully assure adequate supply at rebuilding of domestic cattle herds. limit the exports of cattle,hides. Brazil
home, while attempting to convince I have also been contacted by Secre- has refused to sell its hides while at the
other potential exporting nations to tary of Commerce Juanita Kreps, who same time, has increased its sale of fin-
shoulder their share of the burden. I indicated that she was strongly opposed ished shoes to the United States by 50
urge 'the adoption of the amendment.o to any further trade restrictions such as percent. Although I have been heartened
O Mr. CLAUSEN. Mr. Chairman, the that embodied in the Shannon amend- to learn of the agreement recently con-
Shannon amendment to restrict the ex- ment. cluded by the Special Trade Representa-
port of U.S.-produced cattle hides to a I oppose this amendment for the rea- tive with Argentina, which would grad-
fixed percentage of our production at- sons expressed in the Dear Colleague ually loosen its export controls, it is the
tempts to deal with a delicate problems letter which I sent to all Members of the only bright spot in what has been a diffi-
facing our domestic leather industry in House on July 26, 1979. The substance cult and frustrating climate for our
an inflexible way that could foster infla- of that letter is as follows: domestic leather industry.
tion by driving up the costs of food, The tanners and footwear manufacturers American manufacturers and workers
could have a negative impact on our bal- allege that there is a shortage of cattle hides deserve some assurance that there will
ance of payments and could invite trade in the U.S. and seek hide export restrictions be a- continuity of supply. If it is not
retaliation from many of our foreign claiming that is the only way to hold down forthcoming, American manufacturers
trading partners. the price of shoes and keep jobs. How can will be driven out of business because of
The potential impact of the Shannon there be a hide shortage when the footwear their inability to compete both at home-
amendment is not known at this time. people maintain they need 18 million hides against cheaper imports-and abroad in 34 This is strong disagreement on whether millonlcattle and (hides) this year in the U.S.?
wmarkets.
tightly It would be beneficial in the long run to The footwear and tanning industry In particular, regulated
ould call to my col-
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CONGRESSIONAL RECORD - HOUSE September 18, 1979
leagues' attention the fact that in 1978,
the deficit in the leather products in-
dustry was nearly $2.5 billion, equal to
8 percent of the entire trade deficit.
Mr. Chairman, in closing, I would like
to offer my strong endorsement for Mr.
SHANNON'S amendment. It will go a long
way toward improving a very serious
problem affecting 400,000 American .
workers, 8,000 of whom reside in- my
home State.
I urge my colleagues to adopt this
amendment.O
0 Mr. DIXON. Mr. Chairman, we are to-
day faced with a problem derived from
unfair and excessive purchases of Amer-
ican cattle hides by foreign nations.
Statistics show that while U.S. cattle
slaughter has been declining, foreign
purchases of hides have been reaching
an all-time high and domestic tanners
can expect to get just one hide out of
every four in the United States this year.
At a time when other hide-producing
nations are holding back their supplies,
while frantically scooping up all the U.S.
produced hides, the United States Is left
as virtually the only Nation which gives
free-buying access to its unfinished
hides. Other major hide producing
countries such as Argentina, Brazil, Mex-
ico, and India and Pakistan, all close
their borders in order to protect their
own leather good industries, their work-
ers and consumers. We are further in-
formed that the United States was the
source of 75 percent of the cattle hides
exported by all countries in 1978 while
exporting just. $234 million in finished
leather and leather goods for the same
year.
I believe that we must adopt this
amendment to insure that the more than
500,000 men and women who work in all
facets of the leather goods industry keep
their jobs and that the American con-
sumer does not have to pay an arm and
a leg for leather goods. I urge my fellow
colleagues to vote for this amendment.O
0 Mr. EDWARDS of California. Mr.
Chairman, with regard to the Shannon
amendment to H.R. 4034 limiting U.S.
exports of cattle hides, K voted "present"
because a company In which I own com-
mon stock has a small herd of cattle.o
The CHAIRMAN. The question is on
the amendment offered by the gentleman
from Pennsylvania (Mr. ?livsL) to the
amendment offered by the gentleman
from Massachusetts (Mr. SHANNoN).
The amendment to the amendment
was agreed to.
The CHAIRMAN. The question is on
the amendment offered by the gentleman.
from Massachusetts (Mr. SHANNON), as
amended.
The question was taken; and on a divi-
sion (demanded by Mr. FoLEY) there
were-ayes 29, noes 45.
RECOnDM) VOT`aS
Mr. ERTEL. Mr. Chairman, I demand
a recorded vote.
A recorded vote was ordered.
The vote was taken by electronic de-
vice, and there were-ayes 186, noes 218,
answered "present" 2, not voting 28, as
follows;
[Roll No. 4791
AYES-166
Addabbo
Fowler
Nowak
Albosta
Garcia
Oakar
Ambro
Gaydos
Oberstar
Anderson,
Gephardt
Obey
Calif.
Gilman
Patten
Andrews. N.C.
Goodling
Patterson
Annunzio
Gray
Perkins
Applegate
Grisham
Petri
Ashbrook
Guarini
Peyser
Aspin
Oudger'
Prayer
Atkinson
Hall, Ohio
Price
Bailey.
Hall, Tex.
Pritchard
Bauman
Hamilton
Quillen
Beard, R.I.
Hanley
Rahall
Beard, Tenn.
Hawkins
Railsback
Benjamin
Heckler
Rangel
Biaggi
Holt
Ratchford
\Blanchard
Holtzman
Reuss
Boland
Hopkins
Richmond
Boner
Horton
Rinaldo
Bonior
Hughes
Ritter
Banker
Hyde
Rodino
Bouquard
Jacobs
Roe
Brodhead
Jenkins
Rostenkowski
Broomfield
Jones, Tenn.
Roth
Broyhill
Kastenmeler
Royer
Buchanan
Kildee
Russo
Burton, John
Kostmayer
Satterfield
Butler
Latta
Sawyer
Byron
Lederer
Schauer
Chisholm
Lee
Schulze
Clay
Lehman
Seiberling
Cleveland
Leland
Sensenbrenner
Clinger
Lent
Shannon
Collins, Ill.
Luken
Shuster
Conte
Lundine
Slack
Conyers
McDade
Snowe
Cotter
McHwen
Solomon
Coughlin
McHugh
Spellman
D'Amours
McKinney
St Germain
Daniel, Dan
Maguire
Stack
Davis, Mich.
Idarkey
Staggers
Dellums
Marks
Stewart
Derwinski
Mavroules
Stokes
Devine
Mikulski
Stratton
Diggs
Miller, Calif.
Studds
Dingell
Miller. Ohio
Swift
Dixon
Minteta
Vander Jagt
Dodd
Minish
Vento
Donnelly
Mitchell, Md.
Walgren
Dougherty
Mitchell, N.Y..
Walker
Drinan
Moakley
Waxman
Duncan, Tenn.
Moffett
Weiss
Early
Mollohan
Whitten
Emery
Moorhead,
Williams, Ohio
Ertel
Calif.
Wirth
Evans, Del.
Moorhead, Pa.
Wolff
Evans, Ind.
Mottl
Wylie
Fary
Murphy, N.Y.
Yatron
Fenwick
Murphy, Pa.
Young,' Mo.
Fish
Murtha
Zablocki
Florio
Myers, Pa.
Zeferetti
Ford, Tenn.
Nolan
NOES-218
Abdnor
Campbell
Erdahl
Akaka
Carney
Erlenborn
Alexander
Carr
Evans. Ga.
Andrews,
Cavanaugh
Fascell
N. Dak.
Chappell
Fazio
Archer
Cheney
Findley
Ashley
Clausen
Fisher
AuCoin
Coelho
Fithian
Badham
Coleman
Flippo
Bafalls
Collins, Tex.
Foley
Baldus
Conable
Forsythe
Barnard
Corcoran
Fountain
Barnes
Crane, Daniel
Frenzel
Bedell
Crane, Philip
Frost
Beilenson
Daniel, R. W.
Fuqua
Bennett
Danielson
Gibbons
Bereuter
Dennemeyer
Gingrich
Bethune
Daechle
Ginn
Bevill
Davis, S.C.
Glickman
Bingham
de Is Garza
Goldwater
Bolling
Deckard
Gonzalez
Bowen
Derrick
Gore
Brademas
Dickinson
Gradison
Breaux
Dicks
Gramm
Brinkley
Dornan
Grassley
Brooks .
Duncan, Oreg.
Green
Brown, Calif.
Eckhardt
Guyer
Burgener
Edwards, Ala.
Hammer-
Burlison
Edwards, Okla.
Schmidt
Burton, Phillip English
Hance
Hansen
McDonald
Skelton
Harkin
McKay
Smith, Iowa
Harris
Madigan
Smith, Nebr.
Harsha
Marlene
Snyder
Hefner
Marriott
Solarz
Heftel
Martin
Spence
Hightower
Mathis
Stangeland
Hillis
Matsui
Stanton
Hinson
Mattox
Stark
Holland
Mazzola
Steed
Hubbard
Mica
Stenholm
Huckaby
Michel
Stockman
Hutto
Mikva
Stump
Ichord
Montgomery
Symms
Ireland
Moore
Synar
Jeffords
Myers, Ind,
Tauke
Jeffries
Natcher
Taylor
Johnson, Calif.
Neal
Thomas
Johnson, Colo.
Nedzi
Thompson
Jones, N.C.
Nelson
Traxler
Jones, Okla.
Nichols
Trible
Kazen
O'Brien
Udall
Kelly
Ottinger
Ullman
Kemp
Panetta.
Van Deerlin
Kindness
Pashayan
Vanik
Kogovsek
Paul
Volkiner
Kramer
Pease
Wampler
LaFalce
Pickle
Watkins
Legomaasino
Pursell
Weaver
Leach, Iowa
Quayle
White
Leath, Tex.
Regula
Whitehurst
Levitas
Rhodes
Whitley
Lewis
Roberts
Whittaker
Livingston
Robinson
Williams, Mont.
Lloyd
Rudd
Wilson, Bob
Loeffler
Runnels
Wilson, Tex.
Long, La.
Sabo
Wolpe
Long, Md.
Santini
Wyatt
Lowry
Schroeder
Wydler
Lujan
Sebelius
Yates
Lungren
Sharp
Young, Alaska
McClory
Shelby
Young. Fla.
McCloskey
Shumway
McCormack
Simon
ANSWERED "PRESENT"-2
Brown, Ohio
Edwards, Calif.
NOT VOTING-28
Anderson, Ill.
Ford. Mich.
Rose
Anthony
Gialmo
Rosenthal
Boggs
Hagedorn
Rousselot
Carter
Hollenback
Roybal
Corman
Howard
Treen
Courter
Jenrette
Wilson, C. H.
Downey
Leach, La.
Winn
Edgar
Lott
Wright
Ferraro
Murphy. Ill.
Flood
Pepper
^ 1730
The Clerk announced the following
pairs :
On this vote:
Mr. Murphy of Illinois for, with Mr. An-
thony against.
Mr. Flood for, with Mr. Jenrette against.
Mr. Pepper for, with Mr. Leach of Louisiana
against.
Mr. Hollenbeck for, with Mr. Winn against.
Mr. CAMPBELL changed his vote from
.,&ye? to .'no.,,
Mr. WILLIAMS of Ohio changed his
vote from "no" to "aye."
So the amendment, as amended, was
rejected.
The result of the vote was announced
as above recorded.
Mr. GILMAN. Mr. Chairman, I move
to strike the last word.
(Mr. GILMAN asked and was given
permission to revise and extend his
remarks.)
Mr. GILMAN. Mr. Chairman, the pas-
sage of export legislation designed to
streamline export procedure with the
proper safeguards for our national se-
curity will contribute greatly to easing
our economic ills. At the same. time,
bumper crops across this country prom-
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September 18, 1979 CONGRESSIONAL RECORD-HOUSE
ise improved opportunities- for foreign
grain sales which make up such an im-
portant part of export earnings.
There is, however, one major concern
that I must raise at this point, While
American farms have hopefully been
blessed with good harvests, world grain
production is dramatically down, with
bad crops in the Soviet Union and Brazil.
Past supply crises and embargoes during,
the 1973-76 period have left clear. im-
prints on the minds of the consumer
through higher prices and farmers who.
shared little of the benefits from those
vast grain exports.
At this point I would like to address a
question to the distinguished chairman
of the Subcommittee on international
Economic Policy and Trade, the gentle-
man from New York, Mr. BINGHAM, with
regard to this vital aspect of our export
market.
Would the gentleman care to comment
on the importance of grain exports as a
part of our export earnings and share
with us his thoughts on what is being
done by our Government now and for
the future to insure that adequate sup-
plies of food grains, feed, and seed crops
are available domestically without ac-
celerating food price inflation as we seek
to capitalize on the demand for food ex-
ports?
^ 1740
Mr. BINGHAM. Mr. Chairman, will the
gentleman yield?
Mr. GIL.MAN. I will be happy to yield
to my colleague, the gentleman from New
York.
Mr. BINGHAM. Mr. Chairman, I would
say to the gentleman that, of course,
grain exports contribute greatly to our
export earnings. I believe wheat is our
single most important export commodity.
Without the surplus of wheat beyond our
domestic needs that our farmers have
produced in'recent years, our balance of
trade and balance of payments deficits
would certainly be much worse.
As to what we are doing to assure an
adequate U.S. supply at all times and at
moderate prices, I would say to the gen-
tleman that the U.S. Government offi-
cially and. formally monitors wheat sup-
plies and wheat exports. That is done
under the authority of this act and sec-
tion 812 of the Agricultural Act of 1970.
It is done on a weekly basis, and the
reports are made public. Those reports
apply to wheat flour, which is so import-
ant to our bakery industry, as well as
to grain.
In addition, the Secretary of Agricul-
ture is authorized to require exports to
submit special reports on particularly
large transactions. in recent years, for
example, any transaction involving over
100,000 metric tons to a single destina-
tion in a day must be reported to the
Secretary of Agriculture that same day,
and over 200,000 metric tons in a single
week must be reported that week.
In addition, as the gentleman knows,
we have had for several years a formal
and detailed agreement with our largest
customer, the Soviet Union, which limits
excess of that amount, they must have There was no objection,
So, in short, I would say to the gentle-
man that we have a very thorough moni-
toring system for wheat and wheat flour
that enables us to protect our domestic
supply and assure that it is not suddenly
purchased away from us by foreign buy-
ers. Prices of wheat and wheat flour, of
course, are influenced by many factors in
addition to supply-the transportation,
storage, processing, and so forth. And
many of- those costs are rising rapidly,
particularly as the cost of Vnergy rises.
That is undoubtedly responsible for some
of the price increases we have seen re-
cently in the cost of wheat. But insofar
as adequate supply is concerned, I do
believe we have in place both the pro-
ductive capacity and the monitoring me-
chanism to protect our supplies.
Mr. GILMAN. Mr. Chairman, I thank
the gentleman for his response and con-
tinued concern in this area. I would also
like to take this opportunity to commend
both Mr. BINGHAM and Mr. LAGOMARSINO,
chairman and ranking minority member
of the subcommittees respectively for
their work in bringing this important
legislation to the floor for our con-
sideration.
AMENDMENT OFFERED BY _MR. WEAVER
Mr. WEAVER. Mr. Chairman, I offer
an amendment.
The Clerk read as follows:
Amendment offered by aIr. WEAVER: Page
45, insert the.following section after line 21,
and redesignate succeeding sections ac-
cordingly:
EXPORT OF WHEAT, COEN,AND SOYBEANS
SEC. 110. (1) In order to carry out'the pol-
icy set forth in paragraph 2(c) of this act,
and paragraph 4 of Section 3 of the-Export
Administration Act of 1969; and notwith-
standing the provisions of section (f) of
said act, as such section is redesignated by
section 104(a) of this act: For a period of
one year after the enactment of this act,
the Secretary shall require a validated li-
cense for the export of wheat, corn, and soy-
beans. In considering any application for
such validated export license issuing under
the terms of this paragraph, the Secretary
shall establish a minimum export price for
said commodities of 80 percent of the parity
price as established and periodically revised
for same by the Secretary of Agriculture un-
der provisions of 7 USC Sec. 1301. No ex-
port license shall issue for the commodities
listed in this paragraph at a price for export
which is less than 80 percent' of the estab-
lished parity price for said commodity.
(2) The provisions of paragraph (1) may
be waived in the case of exports to develop-
ing countries.
(3) The provisions of paragraph (1) shall
not apply to applications for export to any
country if and when the President deter-
mines that it is in the national interest to
remove the requirement of a validated li-
cense for export of said commodities to said
country.
Mr. WEAVER (during the reading).
Mr. Chairman, I ask unanimous-consent
that further reading of the amendment
be dispensed with and that it be printed
in the RECORD.
The CHAIRMAN. Is there objection to
Mr. WEAVER. Mr. Chairman, in 1972
the Soviet Union came in and scooped up
our entire wheat reserve at extraordi-
narily low prices, $1.50 a bushel. They got
it cheap, and left the American people to
pay the price of rising prices of grain. In
other words, our people paid twice for our
own grain.
Today, we must reverse that. We must
make the Soviet Union pay the high
price, ad our own people pay the lower
price. My amendment simply says that
we will not sell our grain overseas, our
corn, wheat, and soybeans, except for 80
percent of parity. Now, 80 percent of
parity is not enough, but because this is
in the law for 1 year I had to set it low.
But, our huge bumper crop produced by
our magnificent farmers, our magnificent
agriculture-this huge bumper crop of
7.3 billion bushels of corn, 2.2 billion
bushels of soy beans, 2.2 billion bushels of
wheat-this magnificent crop will de-
press prices. The Soviet Union has had
an enormous shortfall this year and
needs to buy 32 million tons. They will
come in once again and scoop up our
grain at cheap prices.
What is the Soviet Union paying for
our grain? Let me tell the Mem-
bers. The Soviet Union sells gold to buy
our grain. Ten years ago, 1 ounce of gold
that the Soviet Union sold bought 20
bushels of grain. Today, 1 ounce of gold
buys 95 bushels of grain. How long can
we stay in business when our customers,
the Soviet Union, Japan, the OPEC Na-
tions, and others are selling their prod-
ucts higher, gold and other things high,
and we sell our grain lower?
I want to export as much grain as we
possibly can, but I simply think that the
American farmer and the American tax-
payer must get a decent price for it. It is
essential. Our grain exports held our bal-
ance of payments, of course, but consider
that a number of years ago we paid for
our oil with our grain exports. Now, the
oil has gone up, up, up; our grain prices
have stayed low. No longer does our grain
pay for our oil we purchase.
That is why we have a balance-of-pay-
ments deficit, because we do not get the
price for our grain that they get for oil,
that they get for gold, that they get for
the products-that they export.
So, my amendment simply says, "Let us
take this bumper crop and put a mini-
mum floor price on it." Eighty percent of
parity, frankly, is not very much. It is not
enough. It is higher than it is today at
$4.72 for wheat, $3.33 for corn, $8.08 for
soybeans. Now, the prices are almost that
high now, so it is not going for do any
damage, be any problem.'It is just simply
going to say that when our farmers start
storing their grain, dumping their wheat
on the sidings, with no place to ship it or
store it, the buyers of the Soviet Union.
cannot come in and scoop it up at dis-
tress, depressed prices.
Once again, the Soviet Union gets
cheap grain and our people later on pay
dearly for their food. How much longer
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can we tolerate this? How much longer
can we go on buying high and selling low?
So, I offer a simple amendment as .a
National Grain Board bill. I call it my
barrel for bushel bill. That is really the
way to go, but right now we face an
emergency. We must keep this grain,
this huge bumper crop, from selling at
depressed prices to the Soviet Union.
I ask my colleagues who voted for the
budget for defense, we need a strong de-
fense, but I ask them why must we vote
billions of dollars for weapons to defend
ourselves from the Soviet Union when
we subsidize them with cheap grain;
when we give their economy cheap food
and help their economy to put more of
their resources into military weapons?
Is that sensible? No.
So, I ask my colleagues here, let us
put a simple floor on it, export all we
can, but put a simple floor of 80 percent
of parity on our prices and tell the
others, tell Japan, tell the Soviet Union,
tell the OPEC nations, that they must
pay at least that.
[Mr. BINGHAM addressed the Com-
mittee. His remarks will appear here-
after in the Extensions of Remarks.]
Mr. FOLEY. Mr. Chairman, I move to
strike the requisite number of words, and
I rise in opposition to the amendment.
(Mr. FOLEY asked and was given per-
mission to revise and extend his re-
marks.)
Mr. FOLEY. Mr. Chairman, I rise in
strenuous opposition to the amendment
offered by my good friend, the gentle-
man from Oregon (Mr. WEAVER). Before
anyone in the Chamber should have the
slightest doubt about where the export-
ing concerns of American agriculture
lie, his amendment is strongly opposed
by the American Farm Bureau Federa-
tion, by the National Council of Farmer
Cooperatives, the National Wheat Grow-
ers Association, the National American
Soybean Association, the National Corn
Growers Association, and by almost
every other group that represents those
in whose behalf the gentleman from
Oregon (Mr. WEAVER) claims to be
acting.
With this amendment, we would be
establishing for the first time political
control over the exports of our agricul-
tural products-agricultural products
that are expected this year to earn the
United States $32 billion this year. Our
wheat exports alone last year earned us
approximately $4.5 billion. That is four
thousand five hundred million dollars
of earnings for our country to help pay
the cost of our energy imports.
If the Soviet Union has to sell gold-
and by the way, not at. the rigged price
but at an international price we can
sell it for, too-if they have to sell gold
to buy American wheat, that does not
bother me. If the Soviet Union has to
divert funds from heavy industry and
perhaps from strategic weapons to buy
wheat to feed Russian citizens, that does
not bother me. I think that is good for
us and the economy.
As Hubert Humphrey said, he was in
favor of selling to the Russians anything
they could not shoot back, and they are
not going to shoot back the wheat and
the feed grains that they consume by
their populations is improving their
diets.
The Weaver amendment does some-
thing much more serious than play
around with the possibility of somehow
euchring a slightly higher price out of
countries like the Soviet Union It says
that the export license cannot be issued
unless the Secretary approves which
means it cannot be less than 80 percent
of parity. It really does not promise that
price, by the way, to farmers. As I read
it, it is the grain exporter, Cargill or Con-
tinental and so forth that would have to
get 80 percent of parity, not the farmer.
It does not appear how the farmer would
benefit from this amendment, or how
farmers who do not export crops but
produce for the domestic market are
going to get equal treatment as the
farmers produce for the export market.
Additionally it is not clear how develop-
ing countries are suddenly going to be
exempt from the higher prices that we
extract in the export market.
The amendment is bad both in its
practical effects and in its precedent. It
is a dangerous precedent for all Ameri-
can exporters to submit to political con-
trol over its exports in nonstrategic
weapons and materials. We all are in
favor of some political control over
strategic weapons and materials that
may add to the material inventory of
potential adversaries, but political con-
trols and fees on exports of nonstrategic
items are not only unnecessary; they are
totally undesirable in any sound eco-
nomic policy for this country.
I want to see higher prices for wheat.
I am delighted that wheat prices have
risen in the market and that they are
now at export levels equal to 74 percent
of the 80 percent the gentleman desires.
I thinlCthat is healthy because it is hap-
pening in the free market, not because
of some kind of political control. The
farmers realize that the same political
control that the gentleman from Oregon
(Mr. WEAVER) promises to raise prices
which 'can be used to suppress prices, be-
cause there will be times when our ex-
ports, I hope, will bring more than 80
percent of parity. I was happy when they
brought 100 percent of parity in 1974 and
1975, and I hope they do so again.
This is a dangerous amendment, dan-
gerous in its principle dangerous in its
precedent, and far-reaching in its conse-
quences. The gentleman has attempted
to offer a bill to create a state trading
corporation in grain. This is what really
is the basis of this offer. He has tried to
offer that amendment in the Committee
on Agriculture for several years, and the
committee in a bipartisan way has re-
jected that proposal. So now he is at-
tempting to make the Secretary of Com-
merce a one-person state grain-trading
agency, rather than the American Wheat
Board which he wants to establish. For
the American Grain Board he substituted
the Secretary of Commerce.
The CHAIRMAN. The time of the
gentleman from Washington (Mr.
FoLEY) has expired.
(By unanimous consent Mr. FOLEY was
allowed to proceed for 1 additional min-
ute.)
Mr. McCORMACK. Mr. Chairman, will
the gentleman yield?
Mr. FOLEY. I yield to the gentleman
from Washington.
Mr. McCORMACK. I thank the gentle-
man for yielding.
I rise in enthusiastic support for the
gentleman's position as he has expressed
it and in strong opposition to the amend-
ment. I think it is well for us to remem-
ber that if the amendment were in effect
in the law, American wheat farmers
would be sitting around while Russians,
for instance, were buying their grain
from other wheat-exporting countries
such as Australia and Canada perhaps
at 79 percent, and we would be selling
absolutely nothing at all.
Mr. FOLEY. The gentleman is abso-
lutely right. This amendment, if adopted,
would guarantee that we would be only
residual suppliers of those agricultural
products that it covered.
Mr. ALEXANDER. Mr. Chairman, will
the gentleman yield?
Mr. FOLEY. I yield to the gentleman
from Arkansas.
Mr. ALEXANDER. I thank the gentle-
man for yielding.
I support'the gentleman from Wash-
ington (Mr. FOLEY) in his position in op-
position to this amendment. .
About 2 weeks ago I met with a group
of farmers, some of whom subscribe to
the position that is articulated by the
gentleman from Oregon (Mr. WEAVER)
who supports this amendment, and I
asked them why it was that they sup-
ported this'position, that everyone knew
that this would not work, that in prac-
tice it would depress prices on the world
market, and that it would be against the
best interests of the farmers. So I asked
them, given the fact that they understood
the way that grain trading worked, why
it was that they supported this position.
The response was interesting. It was that
to promote this position would promote
higher prices for the farmer. Now I ask
the gentleman, is this a tenable position?
Does supporting this amendment which
is offered by the gentleman from Oregon
(Mr. WEAVER) in any way increase the
prices of grain on the world market for
farmers?
Mr. FOLEY. In my opinion, the.
amendment only requires 80 percent of
parity as a minimum to the applicant
for the export license, which is a grain
trading company, and all that it would
guarantee if they had a market at that
rate, assuming that the price were at
that or higher, would be that the grain
trading company would get the guaran-
tee, rather than the farmer.
Mr. LAGOMARSINO. Mr. Chairman,
I. move to strike the last word.
(Mr. LAGOMARSINO asked and was
given permission to revise and extend his
remarks.)
Mr. SEBELIUS. Mr. Chairman, will
the gentleman yield?
Mr. LAGOMARSINO. I yield to the
gentleman from Kansas.
Mr. SEBELIUS. I thank the gentle-
man for yielding.
(Mr. SEBELIUS asked and was given
permission to revise and extend his re-
marks.)
Mr. SEBELIUS. Mr. Chairman,. few
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actions would give me greater pleasure
than to adopt a program that would
guarantee my farmers a better return
on their investments over the long ere.
That, I am certain, is what the gentle-
man from Oregon (Mr. WEAvea) intends
and I am sure he has the best inter-
ests of the Nation's farmers at heart.
Unfortunately, it will not work. If
anything, it will foul up our exports now
and result in fewer grain and soybean
exports over the long term.
I have served on the Douse Agricul-
ture Committee more than 10 years. Dur-
ing that time I have carefully studied
farm policy to try to find better avenues
toward farm prosperity. Lord knows it
would be to my advantage to come up
with a cure for the economic ills that
plague the farm sector periodically.
This idea is not new. It has been tested
and rejected many times in the past, as
I'm sure it will be in the future. Why
has it been rejected?
There is no doubt that the United
States dominates world trade in grains
and oilseeds today. There is on some
occasions, some truth to the notion that
the United States sets the prices for
grain and oilseeds in world trade. There
is no doubt that we are an important
factor.
Unfortunately, there is a substantial
difference between affecting the market
and controlling it. Certainly, we can af-
fect it. In the short run, under the right
conditions, we can control it. Over the
long run, I believe that efforts to con-
trol that market will lead to erosion of
our position in it.
There are two ways we can affect the
market. We can affect it positively by en-
couraging competition and innovation.
And, we can effect it negatively by re-
ducing our competitive edge and giving
large parts of our markets to our com-
petitors. I think it is very likely that this
bill would do just that.
The distinguished gentleman from
Oregon is fond of quoting Dan Morgan's
new book. "Merchants of Grain," to sup-
port his contention of the need for more
Government control over our grain mar-
kets. The following quotation is en-
lightening:
Throughout the Depression years Europe
continued to be the main market for the
world's grain. But the drive for self-suffi-
ciency did not let up, and protectionist senti-
ment was stronger than ever. European gov-
ernments. already embittered over America's
efforts to collect its war debts, were infuri-
ated when Congress passed the Smoot-Haw-
ley Tariff Act in July 1930, setting duties on
foreign imports at all-time highs. They re-
taliated with stiffer duties on American farm
imports. Meanwhile. Naas propagandists, un-
doubtedly concerned about Germany's reli-
ance on imported foreign wheat, began extol-
ling rye bread's alleged ability to give Ger-
mans "the strength and endurance of the
Nibelunjon," and maligning wheat bread for
"weakening the fighting will" of the Kcicer'c
losing armies in World War I.
Some campaigns for calf-sufficiency were
surprisingly effecitvo. In 1938, experts at
Stanford's Food Research Institute thought
there was no likelihood that Japan would re-
duce its importation of wheat for making
noodles, a popular food in Japan. Three years
later, to the astonishment of the experts.
Japan had increac d its home wheat produc-
tion by 60 percent and ,achieved self-sufH-
ciency. (These phenomenally successful food
production campaigns tend to be forgotten.
amid today's talk that the world is running
out of food.)
This alarms me when I think of all the
people who think the United States has
a-monopoly on food production and tech-
nology. In my trip to China last year. I
got a firsthand look at the kind of food
production developing countries are ca-
pable of given the proper incentives. I
would, as a result, urge my colleagues to
be very-careful about their assumptions
of world food production capabilities.
Mr. Chairman, we generally grow more
wheat each year in my congressional dis-
trict than is grown in any State. We are
extremely interested in improving farm
income and I have worked diligently for
years to improve our domestic, farm pro-
grams to take the bust out of the farm
economic cycle. If I believed this amend-
ment was in the long-term interests of
the farmers in my district, I would have
enthusiastically embraced the concept
years ago. Unfortunately, I must oppose
this amendment and I urge my col-
leagues to do likewise.
Mr. LAGOMARSINO. Mr. Chairman,
this amendment would severely inhibit
our continuing efforts to induce other
countries to remove their tariff and non-
tariff barriers to free trade. We have
made a lot of progress on that issue, and
I think this would be a step backward.
It would encourage retaliation by
other countries who might restrict their
export to us of basic materials on which
we are so heavily dependent. Before such
a program could become effective, there
would have to be cooperation among the
major wheat and grain producers around
the world. I have offered a resolution
which would call for an international
conference of wheat producers to deter-
mine the possibility of such coordinated
action, but it has a long way to go and
it is not there yet. Such controls-I think
this is important-as are proposed by the
Weaver amendment would apply to all
countries and not just to the Soviet
Union and not just to OPEC. It would
be very disruptive of export trade. It
would reduce U.S. exports at a time
when there is a balance of trade deficit.
As the gentleman from Washington
(Mr. FoLEY) has pointed out, it would
impose for the first time political con-
trols on the export of grain.
^ 1800
The whole purpose of this bill is to
get rid of nonstrategic controls. This
amendment would put us in exactly the
opposite direction.
I urge its defeat and yield back the
balance of my time.
Mr. WOLPE. Mr. Chairman, I move to .
strike the requisite number. of words, I
rise in opposition to the amendment and
yield to the gentleman from Oregon (Mr.
WEAVER) to allow him to respond to the
previous comments.
Mr. WEAVER. I thank the gentleman
from Michigan for his courtesy.
My goodness.
My goodness. What things we have
heard. "It won't work."
You know, the Arabs said that 10 years
ago. Somebody had the idea, you know,
H 8099
"Hey, let us all get together and put a
price on oil."
Oil was $1.50 a barrel then. They said,
"It won't work. It won't work."
We know what happened. OPEC did
get together. OPEC does price oil. Oil is
now $23 a barrel.
OPEC has a surplus of oil. One hun'
dred fifty billion barrels in the ground in
Saudi Arabia alone. A big surplus. They
do not sell it unless they get their price.
Ndsiree. They say, "If you want to pay
$20 or $23 a barrel you can have it but
not less."
"It won't work."
You know something? We are, the
United States, the OPEC of grain. The
Soviet Union wants to buy 32 million
tons of grain today. They have to come
to us.
We export 77 percent of the cor41 that
moves in world markets. We export 83
percent of the soybeans that move in
world markets. We export 50 percent of
the wheat that moves in world markets.
In grain, we are Saudi Arabia, Kuwait,
Abu Dhabi, Iran, Algeria and Libya com-
bined. "It won't work."
When, when, 0 Lord, are we going to
wake up and stop being rooked?
Did you know that Japan buys our
wheat for $4 and sells it to their bakers
for $9 and pockets the difference? Yes.
Yes, they do. They buy our wheat from
our farmers for $4 and sell it to their
bakers for $9 and pocket the difference.
Is that not smart? And they hold 26
billion of our dollars; 26 billion of our
dollars right now Japan holds because
they have sold us so many Toyotas and
Sonys and record players.
"It won't work." My goodness.
We cannot sell it? There would be riots
in the Soviet Union and every other na-
tion if they could not have our corn and
feed grains and meat their people have
gotten used to, if we did not sell them
this grain.
Another thing: What would happen to
world prices if we kept our grain up and
the world price would go down. We make
the world price. American grain estab-
lishes the world price.
Today, if it is 2 percent in surplus, 2
percent on the free market, you can have
a 50-percent drop in price. You know, all
these other products they are talking
about, automobiles and computers, are
made by a couple of corporations and
when their demand falls they keep the
price right up there. But not the farmer,
not the American grain that we rely on
to build our balance of payments. No. It
is 2 million producers and when they are
2 percent in surplus the price is cut in
half.
Mr. Chairman, it is time we woke up.
It is time these farmer organizations who
are very close to the six big grain com-
panies that want to continue to deal in
secret, continue to make their deals in
secret, and rook the American consumer
and rook the American farmer, it is time
we did something about this.
0 Lord, let us wake up, 0 Lord, let us
see what is happening to us before it is
too late.
Mr. SMITH of Iowa. Mr. Chairman, 3
move to strike the last word.
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I yield to the gentleman from Wash-
ington (Mr. FOLEY) .
Mr. FOLEY. Mr. Chairman, I do not
want to prolong this debate but I must
reply to some of the statements made by
the gentleman from Oregon (Mr.
WEAVER) which imply that virtually
every major American farm organiza-
tion that represents farmers who sell
the products the gentleman is talking
about are not representing the interests
of their members. Just think about that
for a minute. If we could easily double,
quadruple, quintruple the price of grain
and isolate it from raising the price do-
mestically, to extracting a higher export
price. without damaging our markets,
does the gentleman think these farmers
would not have an interest in doing it?
This sophisticated nonsense-and that
is what I believe it is, although the gen-
tleman does not intend it to be-this
sophisticated nonsense that we can do
the same thing with wheat, feed grains
or soybeans that has been done with oil
has led to the so-called bushel-for-barrel
theory.
Mr. Chairman, the gentleman says he
is not interested in just OPEC, he is talk-
ing about Japan and he is talking about
the Soviet Union. However, many people
in this country have the mistaken idea
that somehow this great exporting ca-
pacity of food and grain, which we have,
can lead us to command the world price.
Mr. Chairman, Australia, Canada,
France, and Argentina are some of our
competitors in this area and they will
have nothing to do, and have said so,
with the cartelization of wheat exports.
Accordingly the gentleman's amendment
is a prescription to give away major por-
tions of our primary markets and to
accept the role of a residual supplier and
an unreliable one at that. When we im-
posed some controls on soybean exports
in 1973 for just about a weeks time in
order to protect our domestic livestock
market, the Japanese were deeply shaken
and began to question our reliability as a
supplier of this and other food and feed
supplies. They began to encourage the
soybean production in Brazil that
has made that country our major soy-
bean competitor. This can happen to
other crops.
Wheat can be grown in 80 countries.
It is not quite like oil.
Mr. Chairman, it is not true that we
could exchange a bushel for a barrel,
even with OPEC. If that were possible-
and let me just concede the purpose of
that argument we could raise the price
of wheat 400 percent or 500 percent and
engage in a bushel-for-a-barrel ex-
change. With OPEC, that would give
them all the feed grains.and wheat they
need in less than 30 days. In less than
30 days of exchange with us, they would
have a full year's supply and we would
have 11 months to buy from them with-
out the trading capacity of our food.
Beyond that, Mr. Chairman, we risk
an OPEC that might tell us, "All right,
we will give you a barrel for a bushel,
but we will sell you 20 percent less oil
and we will buy 20 percent less wheat
and feed grains from you." How would
we like that? Not very well.
If anybody suggested by using this
kind of power we can bring countries
like Kuwait and Saudi Arabia to some
kind of terms, they do not understand
the foreign exchange levels of those
countries or their wheat and feed grain
requirements.
Mr. Chairman, I have said, and I will
repeat here, that Saudi Arabia can af-
ford to import.its wheat and wheat flour
in the form of French pastries baked in
Paris and sent by Air France and distrib-
uted free in the country and have a lot
of money left over. '
The gentleman from Oregon knows
this. The gentleman is an intelligent,
able, and informed Member. But many
Americans-fortunately not too many
American farmers-have become be-
guiled by the bushel-for-barrel slogan
and believe that this kind of manipula-
tion can somehow produce miracles over-
night and make an OPEC out. of the
American agricultural community. These
false expectations weaken the good ef-
forts of our export organizations and
the good efforts of our farm organiza-
tions to improve the very important
trade in wheat and other grains that is
to the benefit of ourjarmers, our con-
sumers, our Treasury, and the millions
and millions of people around the world
to buy from us to our and their advan-
tage.
I hope the amendment will be defeated.
^ 1810
Mr. LAGOMARSINO. Mr. Chairman,
will the gentleman yield?
Mr. SMITH of Iowa. I yield to the
gentleman from California.
Mr. LAGOMARSINO. Mr. Chairman,
I want to commend the gentleman on
his statement.
About 2 weeks ago I had the privilege
of meeting the new Saudi Arabia Am-
bassador to the United States and I
brought this subject up in our discus-
sion. -
He said, "It is very simple. We will
merely finance the growing of grain in
Sudan, in Turkey, in Afghanistan, and
in Pakistan, and it would have no effect
on us whatsoever."
Mr. SMITH of Iowa. Mr. Chairman,
I would like to reclaim my time just to
say that I agree with the gentleman
from Washington. I would like to think
the gentleman's amendment would do
what the gentleman proposes to do, but
I do not believe it does.
I want to call attention to the fact
that this bill includes something that en-
courages and makes possible straight-
out barter. That is a good provision. We
need that kind of a provision. I think
with the right encouragement we can
.develop barter agreements that will be
effective rather than, rely on something
like this amendment that just will not
work.
The CHAIRMAN. The time of the
gentleman from Iowa (Mr. SMITH) has
again expired.
(At the request of Mr. WEAVER, and by
unanimous consent, Mr. SMITH of Iowa
was allowed to proceed for 2 additional
minutes.)
Mr.. JOHNSON .of Colorado. Mr.
Chairman, will the gentleman yield?
Mr. SMITH of Iowa. I yield to the
gentleman from Colorado. '
Mr. JOHNSON of Colorado. Mr.
Chairman, I thank the gentleman for
yielding. I just want to say briefly that
the statement made by the chairman of
the Committee on Agriculture is accu-
rate insofar as I know and have studied
to the last detail of what the gentleman
said. I endorse what the gentleman said
and join the gentleman in opposing the
amendment.
Mr. WEAVER. Mr. Chairman, will the
gentleman yield?
Mr. SMITH of Iowa. I yield to the
gentleman.
Mr. WEAVER. Mr. Chairman, I would
like to say to the person who says they
will simply finance the growing of grain
elsewhere, that they are trying to do
that in Sudan and they are running into
enormous problems. Egypt is doing a
study OR how to grow more grain and
came up with $22,000 an acre to put it
into growing condition, an impossible
situation.
As to the embargo, I do not want an
embargo. That is the last thing in the
world I want. I want to sell all the grain
we can but get a fair price for it.
Let us talk about Kuwait buying
French pastries. Fine, let us make them
pay that price.
The CHAIRMAN. The question is on
the amendment offered by the gentle-
man from Oregon (Mr. WEAVER).
The amendment was rejected.
AMENDMENT OFFERED BY MR. ERTEL
Mr. ERTEL. Mr. Chairman, I offer an
amendment.
The Clerk read as follows:
Amendment offered by W. ERTEL: Page 45,
insert the following section after line 21
and redesignate subsequent sections accord-
ingly:
EXPORTS OF HIDES AND SKINS
SEC. 110. Paragraph (1) of subsection (f)
of section 7 of the Export Administration
Act of 1969, as such section is redesignated
by section 104(x) of this Act, is amended by
adding at the end thereof the following:
"The Secretary of Agriculture shall, by exer-
cising the authorities which the Secretary
of Agriculture has under other applicable
provisions of law, collect data with respect
to export sales of animal hides and skins.".
Mr. ERTEL (during the reading). Mr.
Chairman, I ask unanimous consent that
the amendment he considered as read
and printed in the RECORD.
The CHAIRMAN. Is there objection to
the request of the gentleman from
Pennsylvania?
There-was no objection.
Mr. ERTEL. Mr. Chairman, the
amendment I am now offering will allow
the Members of this body to demonstrate
that they are sensitive to the problems in
this industry and that, they do recognize
the problems that do exist.
Mr. BINGHAM. Mr. Chairman, will the
gentleman yield?
Mr. ERTEL. I yield to the distinguished
gentleman from New York.
Mr. BINGHAM. Mr. Chairman, we
have had occasion to look at the gentle-
man's amendment. I do not think it is
necessary, but we have no objection to
it. If the gentleman would like to have
it included in the bill, we certainly have
no objection. .
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Mr. ERTEL. I thank the gentleman. logs during the three-year period beginning
I yield to the gentleman from Cali- on the effective date of this Act as follows:
fornia (Mr. LAGOssARSINO). (1) Not more than thirty million board
Mr. LAGOMARSINO. Mr. Chairman, feet Scribner of such logs may be exported
I thank the gentleman for yielding. I during the first year of such three-year
period.
have examined the amendment. I have (2) Not more than fifteen million board
no problem with it. I do think in all fair- feet Scribner of such logs may be exported
ness to the gentleman that it will be die- during the second year of such period.
cussed in conference, but I have no ob- (3) Not more than five million board feet
jection to it at this time. Scribner of such logs may be exported during
Mr. ERTEL. Mr. Chairman, I thank the third year of such period.
the gentleman. After the end of such three-year period,
The amendment merely requires the no unprocessed western red cedar logs may
be
Secretary of Agriculture to collect data exported from the United es.
(b) The he Secretary of Commerce shall al-
th
on
e export sales of hides and have
that data available so that it cuts down
on the speculation. There is an allega-
tion that there is tremendous specula-
tion by a few trading comapnies because
they have the exclusive knowledge and
the exclusive data. This will prevent
that, or at least help stop the speculation
In hides and at least give us some infor-
mation so that if the Committee on
Agriculture comes back to this in the
future they will have the data to make a
policy statement on it.
The CHAIRMAN. The question is on
the amendment offered by the gentle-
man from Pennsylvania (Mr. ERTEL).
The amendment was agreed to.
Mr. SWIFT. Mr. Chairman, I move to
strike the last word.
(Mr. SWIFT asked and was given per-
mission to revise and extend his re-
marks.)
Mr. SWIFT. Mr. Chairman, I would
like to commend the gentleman from
Washington, my good friend DON BONR:ER
for his work to include in this bill a pro-
vision relating to the export of red cedar.
His provision which was adopted by the
committee would stop that export, and
for good reason. Red cedar is disappear-
ing from the forests of our Nation at an
alarming rate. We have, at present use,
as little as 8 to 10 years of red cedar left
in this Nation-most of it in my congres-
sional district and that of my colleague
(Mr. Bomssn).
Will not these magnificent trees grow
again. Yes they will, but not in our life
time, nor in the lifetime of our children
and our grandchildren. Red? cedar grows
to commercially useful size in something
like 300 to 500 years.
This bon on the export of this great
natural resource extends only to public
lands-that is Federal and State hold-
ing-not to trees that are privately
owned. It only seems reasonable and en-
lighted self interest to preserve these
trees to our own uses.
I support this bill and especially this
provision and urge my colleagues to vote
locate export licenses to exporters pursuant
to this section on the basis of a prior history
of exportation by such exporters and such
other factors as the Secretary considers neces-
sary and appropriate to minimize any hard-
ship to the producers of western red cedar
and to further the foreign policy of the
United States.
(c) Unprocessed western red cedar logs
shall not be considered to .be an agricultural
commodity for purposes of subsection (f) of
section 7 of the Export Administration Act of
1989, as such section is redesignated by sec-
tion 104(a) of this Act.
(d) As used in this subsection, the term
"unprocessed western red cedar" means red
cedar timber which has not been processed
into-
(1) lumber without wane;
(2) chips, pulp, and pulp products;
(3) veneer and plywood;
(4) poles, posts, or pilings cut or treated
with preservative for use as such and not
intended to be further processed; or
(5) shakes and shingles.
Mr. BINGHAM (during the reading).
Mr. Chairman, I ask unanimous consent
that section 110 be considered as read,
printed in the RECORD, and open to
amendment at any point.
The CHAIRMAN. Is there objection to
the request of the gentleman from New
York?
There was no objection,.
The CHAIRMAN. Are there amend-
ments to section 110? If not, the Clerk
will read.
The Clerk read as follows:
CIVIL AIRCRAFT EQUIPMENT
SEC. 111. Notwithstanding any other provi-
sion of law, any product (1) which is stand-
ard equipment, certified by the Federal Avia-
tion Administration, in civil aircraft and is
an integral part of such aircraft, and (2)
which is to be exported to a country other
than a controlled country, shall be subject
to export controls exclusively under the Ex-
port Administration At of 1969. Any such
product shall not by subject to controls
under section 38(b) (2) of the Arms Export
Control Act. For purposes of this section, the
term "controlled country" means any coun-
try described in section 620(f) of the Foreign
Assistance Act of 1961.
in favor of it. Mr. BINGHAM (during the reading) .
The CHAIRMAN. Are there further Mr. Chairman, I ask unanimous consent.
amendments to section 109? If not, the that section Ill be considered as read,
Clerk will read. printed in the RECORD, and open to
The Clerk read as follows: amendment at any point.
The CHAIRMAN. Is there objection
UNPROCESSED CUED CEDAR to the request of the getnleman from
SEC.. 110. (a)' The Secretary of Commerce New York?
shall require a validated license, under sec- There was no objection.
tion 7 of the Export Administration Act of Mr. BONKER. Mr. Chairman
1909, as redesignated by section 104(a) of to strike the last word. " I move
this Act. for the export of unprocessed west-
ern red cedar (Thuja plicate) logs, harvested -MT. Chairman, I rise for the purpose
from State or Federal lands. The Secretary of asking the floor manager of the bill
shall impose quantitative restrictions upon a question about the Intent of section
the export of unprocessed western red cedar 111. .
H 8101
Section 111 provides that standard,
FAA-certified equipment in civil aircraft,
which is an integral part of such air-
craft shall be subject to export con-
trols under the Export. Administration
Act.
I assume that applies to spares as well.
That is, if a piece of equipment proposed
for export as part of an airplane is sub-
ject to controls under the Export Ad-
ministration, then identical equipment
proposed for export as spares to replace
the original equipment would also be sub-
ject to control under. the.Export Admin-
istration Act. Am I correct in that inter-
pretation?
Mr. BINGHAM. Mr. Chairman, if the
gentleman will yield, the gentleman is
correct. The intent of section 111 of H.R.
4034 is to provide for approval or denial
under the Export Administration Act
rather than under the Arms Export Con-
trol Act of exports to a country, .other
than a controlled country, of standard
equipment, certified by the Federal
Aviation Administration, which Is an in-
tegral partof civil aircraft or spare parts
for FAA certified equipment which is an
integral part of civil aircraft. Such pro-
posed exports may be reviewed by the
Department of Defense, the Arms Con-
trol and Disarmament Agency, or the
Department of State in cases where they
might have important national security
of foreign policy implications. Standard
equipment certified by the FAA now sub-
ject to controls under the Arms Export
Control Act could continue to be under
that act if the proposed export were to a
controlled country of if it were to another
country where it would not be exported
as an integral part of civil aircraft or as
spares therefor.
The CHAIRMAN. Are there amend-
ents to section 111? It not, the Clerk
will read.
The Clerk read as follows:
NONPROLIFERATION CONTROLS
SEC. 112. (a) Nothing in section 5 or 6 of
the Export Administration Act of 1969, as
added by section 104(b) of this Act, shall be
construed to supersede the procedures pub-
lished by the President pursuant to section
309(c) of the Nuclear Non-Proliferation Act
of 1978.
(b) 'With respect to any export license
application which, under' the procedures
published by the President pursuant to sec-
tion 309(c) of the Nuclear Non-Proliferation
Act of 1978, is referred to the subgroup on
Nuclear Export coordination or other inter-
agency group, the provisions of section 10 of
the Export Administration Act of 1969, as
added by section 104(c) of this Act, shall
apply with respect to such license applica-
tion only to the extent that they are con-
sistent with such published procedures, ex-
cept that if the processing of any such appli-
cation under such procedures is not com-
pleted within one hundred and eighty days
after the receipt of the application by the
Secretary of Commerce, the applicant shall
have the rights of appeal and court action
provided in subsection (k) of such section
10.
Mr. BINGHAM (during the reading).
Mr. Chairman, I ask unanimous consent
that section 112 be considered as read,
printed in the RECORD, and open to
amendment at any point.
The CHAIRMAN. Is there objection tar
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the request of the gentleman from New
York?
There was no objection.
AMENDMENT OFFERED BY MR. DODD
Mr. DODD. Mr. Chairman, I offer an
amendment.
The Clerk read as follows:
Amendment offered by Mr. DODD: Page 48,
add the following section after line 22 and
redesignate subsequent sections accordingly:
EXPORTS TO OPEC COUNTRIES
SEC. 118. The President shall review all
United States exports to each country that is
a member of the Organization of Petroleum
Exporting Countries (OPEC) in order to de-
termine whether such exports are consistent
with the national security, foreign policy,
and economic interests of the United States.
In conducting such review the President
shall take specifically into account the pric-
ing of petroleum exports from each such
country to the United States and any action
taken by that country either to accomplish,
or to impede, a comprehensive peace in the
Middle East. The President shall also deter-
(1) which OPEC member countries, if any,
rely upon United States goods and technolo-
gies, the particular goods and technologies
involved, and the availability, from sources.
outside the United States, of such goods and
technologies;
(2), the economic impact on each OPEC
member country of prohibiting or restricting
the export of any United States goods or
technology to such country; and
(3) the impact on the United States econ-
omy of prohibiting or restricting the export
of any United States goods or technology to
such country.
The President shall submit to the Congress,
not later than six months after the date of
the enactment of this Act, a report contain-
ing the determinations made, and the find-
ings of the review conducted, pursuant to
this section.
Mr. DODD (during the reading). Mr.
Chairman, I ask unanimous consent that
the amendment be considered as read
and printed in the RECORD.
The CHAIRMAN. Is there objection to
the request of the gentleman from Con-
necticut?
There was no objection,
(Mr. DODD asked and was given per-
mission to revise and extend his re-
marks:)
Mr. DODD. Mr. Chairman, this amend-
ment is designed to address the very
problem that we raised in the previous
amendment that was raised by my col-
league, the gentleman from Oregon, that
was answered so eloquently by the gentle-
man from Washington (Mr. FOLEY).
The purpose of this amendment is not
intended whatsoever in any way to pro-
hibit or deny the export of any goods
whatsoever to OPEC countries. What it
does do is require the administration to
review those exports and to report back
to the Congress in 6 months to answer
the very questions that we are having
raised in editorials, proposed legislation,
speeches, and Lord knows what else, over
the issue of whether or not we have any
economic leverage over OPEC. I seriously
question whether we do, but I think it is
important to answer the questions all of
us receive from our constituents as to
whether or not, in fact, we do have any
economic leverage. We export some $18
billion a year in goods to OPEC coun-
CONGRESSIONAL RECORD -HOUSE September 189 1979
tries. The majority of those goods are in
manufactured goods, manufactured
products, computers, drilling equipment,
and so forth.
^ 1820
I think it is a legitimate question to
raise as to whether or not we have any
economic leverage. We are only going to
know that if we make a proper review of
those exports and a determination as to
whether or not those exports are going
to in any way harm, if they are curtailed,
OPEC countries and what the economic
effect would be in this country if we were
to curtail exports.
I would point out to my colleagues that
this particular amendment that we are
considering today, the amendment that
I have offered, asks the President to take
into account the oil-pricing policies of
OPEC nations in an effort to ascertain
whether or not we have peace in the
Middle East.
Furthermore, this amendment asks the
President to determine which OPEC na-
tions rely on what U.S. products. Their
availability elsewhere determines that.
What is the economic impact on each
nation of restricting our exports, and
what is the economic impact on this
country with such restrictions?
The very act we are dealing with lays
out the basic points that are to be con-
sidered when we deal with other nations.
The Export Administration Act author-
izes the President to regulate exports,
to protect the domestic economy, to fur-
ther U.S. foreign policy, and to protect
our national security interests. That is
what the legislation says.
I am suggesting with this amendment
that we ought to review those exports to
the OPEC countries and determine once
and for all, if we can, what effect each
of those exports would have on our
national security, on domestic produc-
tion, and, of course, on the economies of
the countries affected.
I have been told by some that this
would be considered a threat. I would
say to my colleagues who raise that
argument that it is in effect that in some
way.
We all know what has happened to oil
prices in our own country. There has
been a 50 percent increase in prices
last year and a 600-percent in the last
6 years.
I think it is only fair to the American
public and in the interest of consumers
in this country that we determine
whether or not we have some economic
leverage with OPEC and determine
whether or not we could exercise that
leverage before we go off and start
issuing demagogic statements about how
we are going to bring OPEC to its knees.
I think the purpose of the amendment,
as far as the administration is con-
cerned, is this : I think it would answer
many of the questions I have and many
of my colleagues have about our ability
to bring OPEC to its knees.
Mr. Chairman, I urge the adoption of
my amendment, and I yield back the bal-
ance of my time.
Mr. BINGHAM. Mr. Chairman, I rise
in opposition to amendment.
Mr. Chairman, I oppose the amend-
ment reluctantly because I have the
highest regard for the gentleman from
Connecticut (Mr. DODD), and I know
that his intentions are good. His inten-
tions are excellent, but?I think this is an
untimely and inappropriate way to
approach the problem.
The Subcommittee on Europe and the
Middle East chaired by the gentleman
from Indiana (Mr. HAMILTON) and the
subcommittee that I have the honor to
share, the Subcommittee on Interna-
tional Economic Policy and Trade, are
committed to embarking soon on a
thorough study of all the various ways
in which we can deal with the OPEC
problem.
Certainly the material covered by this
amendment is one type of approach. But
in its present form, by asking the Presi-.
.dent to make this review and make a
report to the Congress, it does have a
kind of threatening tone to it, which I
think is unfortunate at this time.
Mr. Chairman, I would like to read for
the benefit of the Members a statement
that I have from the administration on
this amendment. It is as follows:
The Administration opposes this amend-
ment because it is dangerous and counter-
productive to threaten or appear to threaten
a termination or reduction of U.S. exports
to nations who may engage in trade practices
or adhere to foreign policy goals with which
the United States disagrees.
A public report by the President on the
information called for could easily be inter-
preted as a threat to impose export controls
at a later date.
The amendment would have no discernible
beneficial effect on U.S. economic or diplo-
matic goals, but would, on the contrary, be
likely to irritate certain nations with whom
the U.S. must maintain harmonious rela-
tions both to help protect American and
Western economic interests and to promote
a stable Middle East peace.
It is not necessary to conduct a study to
know that certain leading OPEC members
are indeed major importers of -U.S. goods and
technologies.
Mr. DODD. Mr. Chairman, will the
gentleman yield?
Mr. BINGHAM. I yield to the gentle-
man from Connecticut.
Mr. DODD. Mr. Chairman, I thank the
gentleman for yielding.
Mr. Chairman, I appreciate the gen-
tleman's reading the administration's
comments on this proposed amendment
into the RECORD, but I would want to
make two points.
One is that on the last point raised
by the administration, I think we all
know obviously that we export $18 billion
worth of goods-to OPEC countries. I am
not contesting that fact, but I would
think the administration would find it
worthwhile to examine to what extent
we'are able to exercise leverage as to
this country's efforts to secure peace in
the Middle East and also possibly exer-
cise some leverage in trying to stabilize
OPEC oil prices.
As I pointed out earlier, we have seen
a 50-percent increase in prices this year
and a 600-percent increase in the last 6
years.
Certainly our good friends in Saudi
Arabia have been rather reluctant to
join us at the peace table.
I am not going to suggest that by cur-
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H 8103
tailing some exports we are going to situation and inform the people in this forma that I would like to call his at-
accomplish that goal overnight, but I country honestly as to what the situa- tention to the fact that we do not need
would think it would be in the adminis- tion is. to form a cartel. We do not need to form
tration's interests and in our interests We hear speculation from some quar- a cartel. We export 77 percent of the
here in the House and in the Congress to ters that this would be devastating to corn. We are the cartel now. We ex-
try to determine to what extent we might the economy, and we hear the gentle- port 83 percent of the soybeans. We are
be able to impress upon ,the OPEC na- man from Oregon suggest that it would the cartel now. We do not need other
tions that we are serious in our peace be devastating if we do not do something. nations to join us. It is our grain that is
efforts and we are serious when we say Mr. Chairman, I only suggest that it a drug on the world market. If we want
we want them to stabilize OPEC oil might be worthwhile to have the admin- to get a better price for grain to the
prices, not just for our own selfish in- titration conduct a review and report to OPEC nations, we must raise it, of course,
terests but also in the interests of other the Congress so we may have the answers to everyone, and that is in our best
industrialized nations that are also being to these questions. interest.
hard pressed by these increased costs. Mr. Chairman, I thank the gentle-. As to being a demagog. I would like
Mr. BINGHAM. Mr. Chairman, if I man for yielding. to tell the members of the committee
may reclaim my time, let me just say Mr. I,AGOMARSINO. Mr. Chairman, that the last thing in the world that I
that there is a difference between the if I intimated that I thought the gentle- want to do is demagog this issue. It
Congress agreeing to this kind of amend- man from Connecticut (Mr. DODD) was was the administration who went out,
ment and calling for this kind of study for restricting Imports, I apologize. It after my hearings on my bill in the
and some sort of study being made certainly was not my thought to do that. Committee on Agriculture, and said that
quietly and in a businesslike way by the I can say that although I do not know I wanted to charge $20 a bushel for our
administration. for sure what would happen, I know wheat. I certainly never said that, never
I am sure that if our two subcommit- what a lot of American companies think implied it. I said, "Let us see how much
tees proceed with our general review of would be the case if that happened. I we can get for our wheat. Let us do just
what we can do about the OPEC coun- know a lot of American companies feel what the Arabs did, what the OPEC
tries, this material will be studied and right now that the competition is very nations did, and that is to continue to
will be reviewed, and it is not necessary severe, and that they have no lock at all raise the price to see what the market
to offer such an amendment as this in on that business, as they did at one time. will bear. Raise it up 50 cents, raise it
this piece of legislation to accomplish I think that this would be viewed as, up a dollar, just like the OPEC nations
that objective. threatening to withhold commodities did, until we see."
Mr. I,AGOMARSINO. Mr. Chairman, from OPEC. I believe that is the way this - I think we would be surprised, just
I move to strike the last word. would be perceived, and perception is as like the OPEC nations . were utterly
(Mr. I,AGO1VIARSINO asked and was much reality as reality itself. That amazed to find out that people would
given permission to revise and extend his might more likely invite retaliation from pay $3, at first, for oil, and then $12 and
remarks.) them rather than the seeking of a reso- then $20, and now they are in the driver's
Mr. LAGO1ZLIARSINO. Mr. Chairman, lution of our differences. seat. I think we should try to find that
I rise in opposition to this amendment, I am in favor of dealing forcefully out. I in no way associate myself with
although certainly the motive of the with OPEC, but I suggest that a way to the demagoguery, frankly, of the ad-
gentleman from Connecticut (Mr. DODD) do that is with respect to grain.sales. Let ministration, who went out and said
is proper and appropriate. However, I us get the other countries together. May- things about my bill, about $20 a barrel.
think the proposal would be viewed as be we can do that here, but I think it I did coin the phrase "A barrel for a
apparently the first step toward control- would be very, very difficult in the case bushel," to dramatize the issue that at
line, exports to OPEC countries. But with of grain, with four or five major export- one time oil and grain were the same
the magnitude of our trade deficit with ers at this time. And in the case of in- price. Once again we should strive, head
OPEC, I think we should be looking for dustrial goods, I do'not know how many toward the objective, if we want to sur-
e way to increase our exports to OPEC, we could get-probably not more than vive in trade in this world.
not decrease our exports to OPEC. 20. Mr. VANIX. Mr. Chairman, I move to
If exports to OPEC countries would be Mr. Chairman, I hope the amendment strike the requisite number of words.
restricted, we would only be opening up is defeated and I yield back the balance (Mr. VANIK asked and was given per-
markets further to our foreign competi- of my time. mission to revise and extend his re-
tors. I submit that at the present time Mr. WEAVER. Mr. Chairman, I move marks.)
our own exporters have a real difficult to strike the requisite number of words, Mr. VANIK. Mr. Chairman, I oppose
time in competing with the Germans, the and I rise in support of the amendment. the amendment of the gentleman from
Japanese, and others, who wish to enter Mr. Chairman, I am sorry that my Connecticut, the Honorable Caau sropnsn
into that market even more than they amendment did not pass, and, therefore, J. DODD.
ready are. I think a very solid and a very good case Our efforts should be to stimulate ex=
Mr. DODD. Mr. Chairman, will my can be made--and I think the gentle- ports. The technology drain about which
good friend, the gentleman from Cali- man from Connecticut (Mr. DoDD) has the gentleman complains has already
fornia, yield on that point? . made it-that we should determine occurred. If America decides to with-
Mr. I,AGOMARSINO. I yield to the through a study exactly where we stand hold exports of technology to the OPEC
gentleman from Connecticut. on exports to the OPEC nations. I would countries, they can procure it from Eu-
Mr. DODD. Mr. Cheiaman, the gentle- like to broaden It to all other nations, as ropean sources who acquired it from
man from California (Ear. I,noat sswo) a matter of fact. America at an earlier time. IIt could also
may be very correct in that statement, 1630 be acquired from European enterprises
but I do not Imow that, and with all I like the words of the distinguished in which American business has an
due respect, let me my that II do not know gentleman from California who just equity. The amendment would insure
that my good friend knows the answer spoke. He said he wanted to deal with the fuller utilization of other markets
to that question. OPEC forcefully. II ask the Members to by the OPEC nations. This would in-
The gentleman may very well be cor- think about that. They are the ones who ther crease our trade deficit and create fur-
rect. We may open up new markets for are threatening us. They just raised the Our efforts inflationary
houi be d be ire.
our competitors, But we do not' know price of their oil another $7. That is a carefully monitor imports. Today, mgr-
that, and II think the only way we will terrible threat to our economy and our increased its oil prices s. Today, bNigear-
ever know it is if we have a review of well-being. They are the ones who are rel from $23.47 to $26.50. Nigeria does not
what our exports are and What it would irritating us. That is far too soft a word. have a record of purchasing very much
do to our economy in this country if We should try to figure out exactly where from the United States.
we curtailed them, we stand in this trade relationship we In 1977 we bought $6 billion in oil and
I hope the gentleman understands that have. I think a study directed by this sold Nigeria $1 billion in goods. In 1978
I am not advocating that we should cur- amendment would accomplish a great we purchased $4.7 billion in oil and had
tail exports. I am only suggesting that deal.
s study be made SO sales of about $1 billion. Between Janu-
might review that I say to the gentleman from Cali- ary and July of 1979, the trade balance
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CONGRESSIONAL RECORD - IIOUSE September 18, 1979
was even worse. We bought $4,027,000,000
in oil and sold Nigeria only $317 million
in goods under circumstances when other
foreign countries were finding bargains
in America because of our depressed
currency.
As circumstances permit, we should try
to direct our oil purchases to those na-
tions who buy from us.
At this point of time, it is far more
important for America to develop an im-
port policy which strives toward trade
balance.
The CHAIRMAN. The question is on
the amendment offered by the gentleman
from Connecticut (Mr. DODD).
The amendment was rejected.
The CHAIRMAN. Are there further
amendments to section 112? If not, the
Clerk will read.
The Clerk read as follows:
VIOLATIONS
SEC. 113. Section 11 of the Export Admin-
istration Act of 1969, as redesignated by sec-
tion 104(a) of this Act, is amended as fol-
lows:
(1) Subsection (a) is amended to read as
follows:
"(a) Except as provided in subsection (b)
of this section, whoever knowingly violates
any provision of this Act or any regulation,
order, or license issued thereunder shall be
fined not more than five times the value of
the exports involved or $50,000, whichever is
greater, or imprisoned not more than five
years, or both.".
(2) Subsection (b) is amended to read as
follows:
"(b) Whoever willfully exports anything
contrary to any provision of this Act or any
regulation, order, or license issued there-
under, with knowledge that such exports will
be used for the benefit of any country to
which exports are restricted for national se-
curity or foreign policy purposes, shall be
fined not more than five times the value of
the exports involved or $100,000, whichever
is greater, or imprisoned not more than ten
years, or both.".
(3) Subsection (c) (2) (A) Is amended by
striking out "articles, materials, supplies, or
technical data or other information" and in-
serting in lieu thereof, "goods, technology, or
other information". . -
Mr. BINGHAM (during the reading).
Mr. Chairman, I ask unanimous consent
that the remainder of the bill be con-
sidered as read, -printed in the REcoRD,
and open to amendment at any point.
The CHAIRMAN. Is there objection to
the request of the gentleman from New
York?
Mr. BAUMAN. Mr. Chairman, I ob-
ject.
The CHAIRMAN. Objection is heard.
Mr. BINGHAM. Mr. Chairman, I ask
unanimous consent that section 113 be,
considered as read, printed in the REC-
ORD, and open to amendment at any
point.
The CHAIRMAN. Is there objection
to the request of the gentleman from
New York?
There was no objection.
The CHAIRMAN. Are there amend-
ments to section 113?
AMENDMENT OFFERED BY MR. DORNAN
Mr. DORNAN. Mr. Chairman, I offer
an amendment.
The Clerk read as follows:
Amendment offered by Mr. DORNAN: Page
49, line 13, insert "(1)" after "(b)".
Page 49, insert the following after line
20:
"(2) Any person who is issued a validated
license under this Act for the export of any
good or technology to a controlled country
and who, with knowledge that such good or
technology is being used by such controlled
country for military or intelligence gather-
ing purposes, fails to report such use to the
Secretary of Defense, shall be fined not more
than five times the value of the good or
technology involved or $100,000, whichever
is greater, or imprisoned for not more than
ten years, or both. For purposes of this
paragraph, 'controlled country' means any
communist country as defined in section 620
(f) of the Fareign'Assistance Act of 1961.".
Page 49, line 20, strike out the *closed
quotation marks and final period.
Mr. DORNAN. Mr. Chairman, in his
magnificent speech before the AFL-CIO
on June 30, 1975, writer Alexander
Solzhenitsyn recalled the penetrating
insight of the father of Soviet com-
munism, Lenin, into the sad behavior
of a myopic capitalist class which has
lost the will to defend its own interests.
I quote Solzhenitsyn from that brilliant
speech:
I must say that Lenin foretold the whole
process, Lenin, who spent most of his life
in the west and not in Russia, who knew
the West much better than Russia, always
wrote and said that the western capitalists
would do anything to strenghten the econ-
omy of the USSR. They will compete with
each other to sell us goods cheaper and sell
them quicker, so' that the Soviets will buy
from one rather than from another, he said:
"comrades, don't panic, when things go
very hard for us, we will give a rope to the
bourgeoisie, and the bourgeoisie will hang
itself.
Then, Karl Radek, who was a very re-
sourceful wit, said: "Vladimir nlyich, but
where are we going to get enough rope to
hang the whole bourgeoisie?" Lenin effort-
lessly replied, "they will supply us with it."
I do not like to think of people in
terms of class. No one in this body does.
I do not think that anything more than
a small fraction of the business com-
munity is as decadent or as myopic as
the Communists of the East suggest. But
we must face up to a truth that can no
longer be ignored.
There are indeed crass business inter-
ests, whose whole world is defined solely
in terms of profit margins and balanced
books, and who would indeed sell the
Soviet Union that technological rope
whereby they could hang all of us, that
is, incinerate us in a nuclear inferno. If
this were not true, if this were only pure
fantasy, what I am not saying, we would
not need this act at all. We would not
even be debating this -measure , and its
amendments. There would be little need
for definitions, controls, rules, regula-
tions or records pertaining to the export
of high-level technology. But, of course,
we live in a radically different world than
that ideal utopia where all businessmen
are honest, upright, broadminded and
patriotic. It is not my intention this
evening to get involved in personalities
or discuss in detail the attitudes and
actions of a very few, select companies,
which I, and most of the American peo-
ple, find reprehensible and dirctly con-
trary to the security of the Nation. How-
ever, we know the problem exists. It can-
not be dismissed. It cannot be ignored.
Some weeks ago, Jack Anderson
carried a story on the secret testimony
of Larry Brady, formerly Acting Di-
rector of the Commerce Department's
Export Office.
^ 1840
It was the talk of our cloakroom on the
minority side, and I assume the same on
the majority side. Jack Anderson made
public what most of us in this House have
known all along, the export control sys-
tems are in a shambles -and that the
safeguards written into the regulations
are not worth the paper they are written
on. That is an Anderson quote.
The Soviets now sign "end-use" state-
ments promising they will not divert
hardware for military purposes.
Anderson continued in that column:
There is no effective way to make sure
that the Soviets live up to their promise.
Instead the Commerce Department relies on
the fox to guard the henhouse. On-site in-
spections are made by representatives of the
U.S. companies that sold the products. Not
only are these employees often non-Ameri-
cans, but they have a very strong motive for
ignoring Soviet violations, explained Brady.
The company wants to sell more, and
he knows very well that if he reports a
diversion to military use, he is not going
to be able to sell more.
"For the same selfish reasons Ameri-
can company executives are unlikely to
squeal on their customers, another Com-
merce Department official told us"-
and "us" being Jack Anderson-end of
his column.
Mr. Chairman, enough is enough. The
patience of the American people has been
tried. We have to put teeth into our laws
and to prevent the leakage of our hard-
ware to Soviet military use through vio-
lations of Soviet-American trade agree-
ments and diversion.
The CHAIRMAN. The time of the
gentleman from California (Mr. DOR-
NAN) has expired.
(By unanimous consent, Mr. DORNAN
was allowed to proceed for 1 additional
minute.)
Mr. DORNAN. The total volume of
trade with the Soviet Union has jumped
from $191 million in 1970 to $2.8 billion
last year. During that same period, total
trade with all of`the Communist bloc na-
tions has increased from $579 million to
more than $6 billion.
There has, in other words, been a tre-
mendous growth in the volume of trade.
There is solid evidence that a substan-
tial part of that traffic---computers, ball-
bearings, and chemical processes have
direct military application.
For those reasons, I simply ask my col-
leagues to put teeth into this bill, and
that is the substance of my amendment.
I urge its adoption.
Mr. LAGOMARSINO. Mr. Chairman,
will the gentleman yield?
Mr. DORNAN. I yield to the gentle-
man from California, who has just at-
tended with me an interesting visit to the
Soviet Union to see how their people are
denied common consumer goods, to the
direct technology and scientific commu-
nity.
Mr. LAGOMARSINO. I thank the gen-
tleman for yielding.
I was going to refer to our trip also.
Everything I saw leads me to the con-
clusion that the people, especially the
people, the members of the Supreme
Soviets in the Presidium, whom we met
with, are every bit as dedicated to the
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H8206 CONGRESSIONAL RECORD-HOUSE - September 19, 1979
prices to customers-to us. This isn't theory.
It's reality. We've seen it happen, for in-
stance, when we buy a new car meeting all
the latest anti-pollution, safety, energy-sav-
ing and you-name-it regulations. This occurs
in industry after industry, adding fuel to
the general inflation.
Regulatory burdens also affect jobs. First,
there are direct effects, such as an even-high-
er minimum wage that prices youngsters and
unskilled. workers out of job markets and
laws that mandate higher-than-average
wages in construction. Second, and perhaps
more significant, is the long-range effect:
draining off dollars and know-how and effort
that would have gone into expansion of bus-
inesses and creation of new jobs needed for
a growing work force.
These are the things we should remember
every time the bureaucrats and politicians
call for another dose of government regu-
lation, and we should ask ourselves, and
them. "Who is really going to get hurt?"
^ 1910
FAST TRACK-FAST SHUFFLE OR
QUICK TAKE?
The SPEAKER pro tempore. Under a
previous order of the House, the gentle-
man from Illinois (Mr. CORCORAN) is rec-
ognized for 15 minutes.
O Mr. CORCORAN. Mr. Speaker, a sig-
nificant part of President Carter's latest
energy program is the Energy Mobiliza-
tion Board, and H.R. 4985 responds to
the President's request for an EMB. The
problem, which under this bill gives birth
to the EMB, is excessive Government
regulation that stymies energy develop-
ment and production. The preferred so-
lution is that Congress create another
agency to shepherd key energy projects
through the bureaucratic maze, elimiat-
ing redtape, and knocking down Fed-
eral, State, and local laws which impede
their progress.
My opposition to the EMB is based
both on the issue of whether another
Federal agency is the best way to solve
energy regulatory roadblocks, and the
unprecedented grant of Federal author-
ity to waive Federal, State, and local
substantive laws in the name of more
energy.
EMB WOULD BE ANOTHER BUREAUCRACY
Back in 1976, while a candidate for the
White House, our current President, Jim-
my Carter, said:
I am strongly opposed to the proliferation
of new agencies, departments, bureaus,
boards and commission, because it adds on
to an already-confused Federal bureaucratic
structure.
It is interesting to recall that not 7
months had lapsed in President Carter's
term before he signed into law a new
Energy Department. Over 300 House
Members-and I was among them-sup-
ported the President on this reorganiza-
tion measure to consolidate all existing
energy-related agencies into one new de-
partment. The declaration of findings
and purposes of that bill made the case
for reorganization:
FINDINGS
SEC. 101. The Congress of the United States
finds that:
(5) formulation and implementation of a
national energy program require the integra-
tion of major Federal energy functions into
a single department in the executive branch.
PURPOSES
SEC. 102. The Congress therefore declares
that the establishment of a Department of
Energy is in the public interest and will pro-
mote the general welfare by assuring co-
ordinated and effective administration of
Federal energy policy and programs. It is
the purpose of this Act-
(2) to achieve, through the Department,
effective management of energy functions of
the Federal government, including consul-
tation with the heads of other Federal de-
partments and agencies in order to en-
courage them to establish and observe poli-
cies consistent with a coordinated energy
policy a o a
However, here we are, just 2 years later,
and the President is now asking for two
more energy agencies, the EMB and the
Energy Security Corporation to finance
$88 billion of Government-sponsored
synthetic fuel projects. Apparently, he
now wants three energy spokesmen-
DOE, EMB, and ESC. I think one is
plenty.
This proposal reminds me of the ill-
starred Consumer Protection Agency of
the 95th Congress. The parallel is that.
the proponents of each argue that be-
cause certain interests--consumer and
energy-are not being adequately repre-
sented, we. need to create a new agency
to go into the regulatory process to repre-
sent these special interests. Fortunately,
the House of Representatives wisely re-
jected the CPA on February 7, 1978 by
a vote of 227 to 189.
More Government is not the answer to
our energy problems. The EMB is a good
example of that old congressional prac-
tice of never terminating Government
programs or agencies, but rather laying
new programs and agencies over existing
ones. And what has this brought us?
Writing in a recent issue of the Wash-
ington Monthly, Robert M. Kaus sup-
plies the answer: "a government that is
inefficient, incompetent, and unpopular."
Continuing in his excellent analysis,
"How the People Lost Control," he com-
ments:
It was a jerry-built system back in 1937,
and each succeeding attempt to patch it up
has only made things worse. For four dec-
ades, it has polluted our concept of de-
mocracy, shackled our political imagina-
tion, and distracted our potential leaders.
I can think of no better description of
what Congress has done to fix our energy
problems since the Arab Oil Embargo
of 1973-74. Coupling the sound and the
fury of Government rhetoric, Govern-
ment pricing policies, Government allo-
cation programs, indirect Government
subsidies to OPEC and the like, to an
EMB and the ESC-into which the
President wants to pump $88 billion of
taxpayer money-may give Mr. Kaus
good copy for future years, but I do not
see how this will reduce our self-
inflicted dependence on foreign oil.
"Can we-truly cut through the regula-
tory requirements without examining
the underlying body of environmental
law?" asked former Deputy Administra-
tor of the Environmental Protection
Agency John Quarles, in an August arti-
cle in the Wall Street Journal. He drew
upon his experience and answered, "Until
the dilemma is faced honestly, the chief
danger awaiting the Energy Mobilization
Board is one of false expectations." He
offered other insights:
This branch-by-branch review will be no
easy task. But it is the only way. Done with
skill, that pruning could strengthen, not
weaken, environmental protection.
The procedural waiver in reality is a legis-
lative device for ducking the issue-it pro-
vides a mechanism to support supposedly
faster approval of energy projects but does
not support exemptions from environmental
requirements. It thus provides a handy set of
mirrors-so useful in Washington-by which
a politician can appear to kiss both sides of
the apple.
This blunt assessment is too rarely
heard. In the Minority Views elsewhere
in this report, my colleagues note that-
This bill does not assure that there will be
a major reevaluation of the*laws and regu-
lations which are strangling economic de-
velopment in this country. We will be work-
ing to ensure that laws and regulations which
detrimentally affected energy and economic
development are reevaluated in the years
ahead.
I agree with the diagnosis; filling the
prescription, however, cannot be delayed.
EMS WOULD HAVE TOO MUCH AUTHORITY
Regarding my second concern, that of
granting the EMB authority to trample
on existing laws at every level of Ameri-
can government, let me first point out
that, to my knowledge, everybody is
against redtape. I do not know of any
candidate ever running for public office
on a platform of more redtape. But red-
tape is not the issue.
The real issue is : How do we resolve
conflicts between the economy, energy,
and the environment? How do we bal-
ance off the need for more energy with
cleaner air? What about the contrary
goals of more energy and adequate sup-
plies of clean water in a growing econ-
omy? And so the hard choices go, but
the EMB does not give us a workable
framework for resolving these issues
which abound all over America today.
The public interest in these cases is
a good deal more complex. Alfred E.
Kahn, adviser to the President on infla-
tion, and Chairman of the White House
Council on Wage and Price Stability,
spoke to the American Bar Association
recently; the President's congressional
liaison assistant, Frank Moore, sent each
Member of Congress a copy to highlight
"the role of regulatory reform in an anti-
inflation program." In that speech, Dr.
Kahn aptly noted-
The benefits of environmental protection
and clean-up ... are real; so are the costs
they impose on the economy ... These
regulations must be subjected to economic
tests-to a weighing of the costs against the
benefits-if they are to be rational.
Obviously, the ? President's men are
aware of the problem, and as the Wash-
ington Post editorialized February 7,
1978, in its opposition to the Consumer
Protection. Agency:
It may involve balancing a given degree
of safety against a certain increment of cost,
or keeping down tomorrow's price increases
without jeopardizing next year's supplies,
or making a much more complicated type
of accommodation among a hundred forces
and factors bearing on the marketplace.
Our current laws and agencies are not
doing a very good job of resolving these
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D 1136 CONGRESSIONAL RIECORD - DAELY DIGEST September 11., 1979
Agriculture Appropriations: House disagreed to the
Senate amendments to H.R. 4387, making appropria-
tions for Agriculture, Rural Development, and Related
Agencies programs for the fiscal year ending September
30, 1g8o; and agreed to a conference. Appointed as con-
ferees: Representatives Whitten, Burlison, Traxler,
Alexander, McHugh, Natcher, Hightower, Jenrette,
Andrews of North Dakota, Robinson, Myers of Indiana,
and Conte. Page H7647
Consumer Checking Account (Equity: By a yea-and-
nay vote of 367 yeas to 39 nays with 5 voting "present",
Roll No. 454, the House voted to suspend the rules and
pass H.R. 4986, amended, to amend the Federal Reserve
Act to authorize the automatic transfer of funds, to au-
thorize negotiable order-of-withdrawal accounts at de-
pository institutions, to authorize federally chartered
savings and loan associations to establish remote service
units, and to authorize federally insured credit unions to
receive share draft deposits. Agreed to amend the title
of the bill. This motion was debated on Monday, Sep-
t 007650-007651
t Administration Amendments. House con-
tlnuect--onsidcr fo o . 4034, to provide for con-
tinuation of authority to regulate exports; but came to
no resolution thereon. Proceedings under the 5-minute
rule will continue on Wednesday, September 12.
Agreed To:
An amendment that adds language to the "Findings"
portion of the bill stating that the minimization of re-
strictions on exports of agricultural commodities and
products is of critical importance to the maintenance. of
a sound agricultural sector;
An amendment that makes it a policy to use export
controls to restrict exports where necessary to countries
which violate the principles of the Monroe Doctrine;
An amendment that states it is the policy of the
United States to minimize restrictions on the export of
agricultural commodities and products;
An amendment that requires the Secretary of State to
enter into negotiations to eliminate foreign availability
of goods or technologies critical to the national security
of the United States which would permit a significant
contribution to the military potential of an adversary
country;
An amendment that requires that reliable evidence
be used in the determination of foreign availability
when it is the basis of a decision to grant an export
license;
An amendment that requires that intelligence infor-
mation concerning the foreign availability of items be
made available to the Office of Export Administration;
A technical amendment;
An amendment that strikes language prohibiting the
United States from imposing controls on the re-export
of United States items from COCOM;
An amendment that requires the Secretary to notify
Congress before any export license is approved for the
export of goods or technologies over $7 million to any
country supporting international terrorism;
An amendment that provides new military critical
technologies language stating that export controls
should be implemented for goods which would transfer
military critical technologies to countries to which ex-
ports are controlled, and requires that the initial list of
military critical technologies be completed and pub-
lished by October i, 1980 (agreed to by a recorded vote
of 273 ayes to 145 noes, Roll No. 455);
An amendment that requires the Secretary, where
export licenses have been denied for national security or
foreign policy reasons, to include in the notice of denial
what modifications would allow the export of goods or
indicate which Department officials would be available
for consultation with regard to such modifications; and
An amendment that requires, in issuing rules and
regulations to carry out national security controls provi-
sions, that particular attention be given to the difficulty
of devising'effective safeguards to prevent a country that
poses a threat to United States security from diverting
critical technologies to military use, the difficulty of de-
vising effective safeguards to protect critical goods, and
the need to take effective measures to prevent the re-
export of critical technologies from other countries to
countries that pose a threat to United States security
(agreed to by a recorded vote of 272 ayes to 137 noes,
Roll No. 457, after having previously been rejected by a
division vote of 20 ayes to 24 noes).
Rejected:
An amendment that sought to strike the word "sig-,
nificant".from language, expressing the need for export
controls for national security purposes on goods or tech-
nologies that make a "significant" contribution to the
military potential of other countries;
An amendment that sought to strike the indexing pro-
visions in the bill (rejected by a recorded vote of 2o1
ayes to 206 noes, Roll No. 456) ; and
An amendment that sought to provide for congres-
sional committee acquisition, within 1o days, of records
relating to any action concerning the administration of
lexport controls for national security purposes, and to re-
quire that records of actions taken pursuant to this Act
Lbe retained for at least 5 years (rejected by a recorded
ote of 1o9 ayes to 2g6 noes, Roll No. 458).
Pages K7652-07683
Committee To Sit: Committee on Agriculture received
permission to sit during proceedings of the House under
the 5-minute rule on Wednesday, September 12.
Page H7683
Presidential Message-Defense Program: Received
and read a message from the President wherein he out-
lines the initiatives the Administration has taken to
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September 11, 1979 CONGRESSIONAL RECORD-DAILY DIGEST D 1135
CRIMINAL CODE REVISION
Kennedy
Cornelia G
of Tennessee
Brown
ile
B
,
,
.
,
y
a
of Michigan, and Boyce F. Martin, 'Jr., of Kentucky,
each to be a U.S. Circuit Judge for the Sixth Circuit;
James M. Sprouse, of West Virginia, to be U.S. Cir-
cuit Judge for the Fourth Circuit;
Richard D. Cudahy, of Wisconsin, to be U.S. Circuit
Judge for the Seventh Circuit;
Mary M. Schroeder, of Arizona, and Otto R. Skopil,
of Oregon, each to be a U.S. Circuit Judge for the
Ninth Circuit;
William L. Hungate, to be a U.S. District Judge for
the Eastern District of Missouri;
Harold F. Sachs, and Scott O. Wright, each to be
a U.S. District judge for the Western District of
Missouri;
Zita L. Weinshienk, and Jim R. Carrigan, each to be
a U.S. District, Judge for the District of Colorado;
Matthew J. Perry, Jr., C. Weston Houck, and Falcon
B. Hawkins, each to be a U.S. District Judge for the
District of South Carolina;
George Arceneaux, Jr., Veronica D. Wicker, and
Patrick E. Carr, each to be a U.S. District Judge for
the Eastern District of Louisiana;
John V. Parker, to be a U.S. District Judge for the Mid-
dle District of Louisiana;
John M. Shaw, to be a U.S. District Judge for the
Western District of Louisiana; '
Robert J. Staker, to be a U.S. District Judge for the
Southern District of West Virginia;
Avern Cohn and Stewart A. Newblatt, each to be a
U.S. District Judge for the Eastern District of Michigan;
Benjamin F. Gibson and Douglas W. Hillman, each
to be a U.S. District Judge for the Western District of
Michigan;
Richard M. Bilby, to be a U.S. District Judge for the
District of Arizona; and
Edward C. Reed, Jr., to be a U.S. District Judge for
the District of Nevada.
Committee indefinitely postponed action on the fol-
lowing seven private relief bills: S. 6o, 63, 167, 177, 302,
978, and 484.
Also, Committee considered the nominations of J.
Jerome Farris, and Betty B. Fletcher, both of Wash-
ington, each to be a U.S. Circuit Judge for the Ninth
Circuit, but did not complete action thereon.
Committee on the Judiciary: Committee began hearings
on S. 1722 and 1723, bills to reform the Federal criminal
laws and streamline the administration of criminal jus-
tice, receiving testimony from Attorney General Benja-
min R. Civiletti, Philip B. Heymann, Assistant Attorney
General, Criminal Division, and Ronald L. Gainer,
Deputy Assistant Attorney General, Office for Improve-
ments in the Administration of Justice, all of the De-
partment of Justice.
Hearings continue on Thursday, September 13.
ILLEGAL DRUGS
Committee on the judiciary: Subcommittee on Crim-
inal justice held oversight hearings on the scope of nar-
cotics' use and abuse in the U.S. and abroad, and the
adequacy of programs of the Drug Enforcement Ad-
ministration to cope with the illegal drug traffic, receiv-
ing testimony from Senator Nunn; Charles F. C. Ruff,
Acting Deputy Attorney General, and Peter B. Ben-
singer, Administrator, Drug Enforcement Administra-
tion, both of the Department of Justice; Lee I. Dogoloff,
Assistant Director for Drug Policy, Domestic Policy
Staff; William Pollin, Director, National Institute on
Drug Abuse, Department of Health, Education, and
Welfare; and Donald Pomerleau, International Associa-
tion of Chiefs of Police, Gaithersburg, Maryland.
Hearings continue on Thursday, September 13.
SMALL BUSINESS RESEARCH AND
DEVELOPMENT
Select Committee on Small Business: Committee re-
sumed hearings to explore the potential of small busi-
nesses to contribute in solving the energy crisis, receiv-
ing testimony from Clark Houghton and Philip Chis-
holm, both of the National Oil Jobbers Council, Jack A.
Blum, Independent Gasoline Marketers Council, James
L. Feldesman, and Fabio Saturni, Independent Termi-
nal Operators Association, all of Washington, D.C.;
Thomas N. Allen, Society of Independent Gasoline
Marketers of America, Richmond, Virginia; Harold
West, West Oil Company, Winfield, Alabama; Bailey
S. Root, Newport, Kentucky; and R. J. Gaffney, High-
way Oil, Inc., Topeka, Kansas.
Hearings continue on Wednesday, September 26.
House of Representatives
Chamber Action
Bills Introduced: 21 public bills, H.R. 5227-5247; 4
private bills, H.R. 5248-5251; and 5 resolutions, H.J.
Res. 395, H. Con. Res. 183 and 184, and H. Res. 402
and 403 were introduced. Pages H7709-H7710
Bills Reported: Reports were filed as follows:
H.R. 4746, to make miscellaneous changes in the tax
laws (H. Rept. 96-423);
H.R. 2441, to amend the Federal Aviation Act of 1958,
relating to aircraft piracy, and to provide for combating
terrorism, amended (H. Rept. 96-424) ; and
H.R. 24, General Accounting Office Act of 1979,
amended (H. Rept. 96-425). Page H7709
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