ticipated in. I think you could supply the committee with some figures along that line.

Mr. KEARNS. Mr. Evins, we will try.

Mr. EvINS. I wish you would. I think it would be helpful to the committee, helpful to your Department, and would lay some of this rumor and report that you don't serve the small businessman, that your sympathies and activities are concerned with the big business interests of the country.

This committee had rather dramatically called to its attention a year or so ago an example of how there was an impression of favor for the big businessman as against the little man.

Now, in your Export Control Division, you license the numbers of shiploads of scrap that could be shipped out of the country, you can't ship it out, only in limited numbers, just a few under that license. What was the net result? It had to be funneled into big steel, big steel got the result of the scrap. Now, you didn't issue an export license control on big steel on the amount that they could ship out. They could ship all the steel that they wanted. They could have the market, but this other little man who had the foreign market for this product couldn't ship it out, you put the control so it had to be funneled into big steel.

Now, that was the impression gained. That particular policy adopted favored big steel, it was against the little man, and I think you ought to dramatically come up with a showing of results in this other field, or else we are going to have to have the Small Business Administration represented and identified as the agency that represents the small businessman and not the Department of Commerce, who confines its activities to the big business interests.

Mr. YATES. Do you have any control over the statistics that Mr. Evins is seeking through your Bureau of Export Control? Mr. MACY. No, sir; not through export control operation. Mr. YATES. Through the licensing mechanism?

Mr. MACY. No, at the present time, Mr. Chairman, as far as the export control is concerned, we do not have any commodities under control for reasons of short supply, where we are limiting the quantity by exporter.

Mr. YATES. Are you limiting any exports on basic metals?

Mr. KEARNS. Only to the Soviet bloc.

Mr. YATES. I knew you were limiting it to the Soviet bloc, but I wondered about the exports of scrap.

Mr. MACY. No, sir.

Mr. YATES. Are there any complaints in that field?

Mr. MACY. I haven't had any. Mr. Borton could tell us.

Mr. BORTON. Mr. Chairman, the aluminum-smelter people were in

our office on July 1 of this year, and we are waiting to have a written report from them. They have not yet filed that.

Mr. YATES. They have not yet filed a protest?

Mr. BORTON. No, sir; not yet.

Mr. EVINS. That is all, Mr. Chairman.

(The subcommittee has been informed that a letter of protest from Aluminum Smelters Research Institute was sent to Department of Commerce, July 28, 1959.)

Mr. YATES. Mr. Brown.

Mr. BROWN. Last week a small business manufacturer in my district in southwest Missouri who makes a line of chain saws, lawn mowers, garden hose, and so forth, talked to me about his interest in developing export sales. He has a sales organization in this country-these are seasonal items, as you can imagine. He could sell some foreign manufacturer's product over here through his established sales organization if in turn he could find an export setup.

Now, what would you suggest that I recommend that he do?

Mr. KEARNS. I think Mr. Macy could go through the steps we would suggest.

Mr. MACY. The first thing I would recommend he do, if it is convenient for him so to do, is to go to our nearest Commerce Department field office and talk to them about his problem.

Now, what they can't take care of they will get in touch with us in Washington; but I think the best thing, if he hasn't had experience in international trade before

Mr. BROWN. He has had none.

Mr. MACY. They will help hold his hand and tell him what his problems are in getting into this field and make suggestions to him as to how best to go about it.

Mr. BROWN. Now, he is interested enough in it that he really wants to get some results. He would be willing to go to any countries that were recommended to him.

Mr. MACY. I think he must do quite a little before he goes abroad, if he is going to be really effective. If he gets in touch with our field office people and talks to them about his problems he may want to get some information about certain countries-the field office will be able to get it for him.

He may want to get lists of people that he can get contact with. He may want us in a certain country to get the Foreign Service to do a special look-see for him. And then if he decides to go, if he lets us know through the field office, or direct to Washington, we will send detailed information out to the Foreign Service post; tell them when he is coming; what he wants to talk about; have them get ready for him before he gets there; and then he goes in and sees them upon his arrival, and then they will help him line up the contact and give him the information that he needs.

Mr. BROWN. I appreciate that information. I will relay it to him, and I may be contacting you by letter on this.

Now, in the general field, one of the problems is currency exchange; is that not true?

Mr. KEARNS. Yes, sir.

Mr. BROWN. Is that a bigger and bigger problem? In other words, getting the money out after you have made the sale, is that a growing problem?

Mr. KEARNS. You can't generalize on it. In some areas it is becoming a minor problem. In some areas it is a major problem.

For example, in Europe, by and large the currency problem is dissipating with the new currency liberalization. In some of the lesser developed countries, where they are in terrible shape on the exchange problem, it is a terrific problem.

This is one thing that your man making chain saws will have to evaluate, and we will give him the information. We won't tell him what to do.

We say, for example, "You want to export chain saws to Thailand." We can tell him the import restrictions, what the problems will be in getting his money out, what the standing of the country is economically, and so forth. We would give him that kind of guidance. That is one of the things we are doing every day.

This is specific information. I have been in small business, and I know what the man would have to do. He has to first look over the world to see where the possible customers would be. After that he has to see if they have money to buy, if they do want to buy, whether he could import it there, and what his competition would be, and once he decides all that, if there are people there who could represent him, or whether he would have to put someone there to represent himself, and what the language problem might be in correspondence. These are the things we do all the time.

Mr. BROWN. For instance, what he would do is to find a manufacturer similar to himself, who makes another line, a good product somewhere, that he in turn could sell in the United States, with no import restrictions on that product. Is that theory a valid one? Is that ever done?

Mr. MACY. It is being done every day.

Mr. KEARNS. In some countries, that would be the answer to import restrictions, because usually the problem of the lesser developed countries is protecting their exchange to buy the things that they really need, and to minimize the import of things that they don't have to have. And so if they can work an exchange, a semibarter arrangement-not complete barter, because that is a lot of trouble, but a semithing where there is a buy and sell arrangement-you can quite often get around these restrictions.

Mr. BROWN. Well, now, another question: We keep reading and hearing that the Communist countries are exporting quite a few products on a loss basis. In other words, they are just making whatever price is necessary to get the business.

Now, is that a growing thing?

Mr. KEARNS. I think that in looking over the activities of the Communist bloc in recent years, and I have had some responsibility in this field, I think that we will have to expect more and more of this entry into trade primarily for political reasons, more than for economic reasons, although there may be some economic aspects to it. They, of course, have complete control of their costs. It makes no difference whether an item costs them $10 to produce, they can sell it for nothing, if they wish. Because they have the complete control, they don't have to answer anyone.

In many cases, they use this so-called dumping process to disrupt markets. They don't, as a general thing, have a long-range effect, because their total volume of international trade is relatively smallthe total compared with the total of world trade.

For example, a year or so ago, in tin, the Soviets dumped a substantial amount of tin on the tin market in London which had the effect of breaking the tin market and embarrassing the tin producing countries, Malaya, and Bolivia, and we have reason to believe that it was

done for political reasons. There was no real economic reason to have done it.

The same was true around the first of the year when the Communist Chinese dumped a substantial amount of textiles on southeast Asian markets at about half-I was down there and got the firsthand storyat about half the normal price.

Once they have done that, they withdraw from the market, and they don't continue to supply it. What they did was throw the complete distributing mechanism into confusion, because the wholesalers and retailers lowered their price to get more business, and then all at once they found they didn't have a continuous supply. It caused a great deal of trouble. It also disrupted the normal supplies coming from this country and Japan.

I think we will have to expect a great deal of this entry into forays into the trade fields.

Mr. BROWN. Well, now, that can get to be a very costly situation in the long haul, in my opinion. Do we have any plans, does the Department of Commerce have any programs to combat that?

For instance, our manufacturers, whether they be large or small, can, on the tail end of their total production, produce and sell a given amount of units at less cost than they can in the domestic market. You know that, after you produce a million of a certain item, you can produce another 100,000 for one-half the cost.

Are there any plans for pooling those supplies, or to promote them on a lower price basis?

Mr. KEARNS. I believe it is possible to combat the action, but not by meeting it with the same type of action. I think that if we try to meet it with the same type of massive action, they could run us ragged, because they have so much more flexibility than we have in that particular type of activity.

I think, however, that it will be self-defeating in its end, just as the foray of the Chinese Communists with their textiles is self-defeating, because in talking with the people who had been buying the Communist textiles at the low price, I found they wouldn't do it again, because they are in business to stay in business, week after week, month after month, year after year. They want continuous supplies of dependable merchandise that they can sell, and so this frightens and disturbs the great bulk of the distributing mechanism in any country, whether it is wholesale or retail. As to what we need to do in my opinion is to get more and more people engaged in selling our goods abroad, where they establish a good economic relationship with their buyer abroad, or their seller abroad, where it is advantageous for X merchant in this country to do business with him year after year.

Then he is not susceptible to somebody that comes in with a bargain counter offer and says "You take my offer and change."

I had an example just the other day of a distributor in Uruguay, which has been under considerable pressure by the Communists, as you know, because of their very severe difficulties. This is one of the principal distributors of American products in Uruguay.

The commercial representative of the Communist government came to him and offered him very, very attractive prices on comparable products that we have here. Not only that, he said he would let him spend half the price for promoting the trade of these new prod

ucts. In other words, if he used to pay the United States a dollar for an item, the Russians would give him 50 cents and let him spend the other 50 cents for promoting it, which meant he could put it in his pocket if he wanted, which is a very attractive thing to do. But the man wouldn't do it. He said "I would be foolish to do it, I have been doing business with these American firms, they have been supplying me goods year after year, I don't know whether the Soviets are going to continue to supply this, and if I break my ties here I might go out of business." So I think we have some real assets to

work on.

Now, this doesn't mean it is going to be easy in all cases, but the real thing we need is to get more and more people selling abroad on a sound exchange, honest basis, and you can get the bulk of your business that way.

Mr. YATES. Of course, that is what we are trying to do. We are trying to get small business to move into that field, but the question is, How do we do it?

Mr. KEARNS. That is what we hoped to do in our plans this year, but we are not going to be able to do as good as we should.

Mr. YATES. Because of the lack of funds?

Mr. KEARNS. Yes, sir.

Mr. YATES. What would you do if you had more funds?

Mr. KEARNS. Well, in the first place, we had a very active program for working with our field offices, as I mentioned before. Mr. YATES. You mean the 33 in the United States?

Mr. KEARNS. Yes, to get out and contact potential exporters, importers, or whatever it may be in the trade field in that area. These field office people know the people in that area pretty well.

Another thing, we were going to expand these area trade groups that we have, we were going to have one

Mr. YATES. Do you mean trade missions?

Mr. KEARNS. No, in this country, similar to our experience on the west coast, where we invite groups of businessmen to come in and meet our people and discuss their problems on a regular basis. This is one thing that is fruitful. We know it is because we have tried it for several years on the west coast, and we have one now in the Southeast. We had the first meeting last fall.

This is something like missionary work. You go out and tell them what the opportunities are, how they can engage in it and find the answers to their problems, and you get recruits that way. This is one of the things that we had hoped to do in other areas of this country.

We had also hoped to expand our publication programs, getting information out into the hands of more and more people.

Those are some of the things that we were planning.

Mr. YATES. I am sorry, I broke in on Mr. Brown.

Mr. BROWN. Well, the main thing I think that these small business people object to is that they are fearful of all this. It looks so complicated, and so mysterious to them. For example, we have this accumulation of foreign currency under the Public Law 480.

Do we use any of that to make contacts for our small business peo-ple here in the United States?