Upon completion of the various phases and series of these hearings-this is the first phase of our hearings-this subcommittee, at the earliest practicable date, will report to the full committee for recommendation to the Congress the results of its study and investigation together with such recommendations as it may deem advisable.

At the outset, we have invited the various governmental agencies responsible for the administration of the numerous programs involved in these fields to document for us their programs and their activities, particularly in the small-business field.

Congressional interest in this subject is strong. The congressional intent was demonstrated by section 504, entitled "Small Business," of the Mutual Security Act and in section 413 of the Mutual Security Act.

The act specifically indicated that the President shall assist American small business to participate equitably in the furnishing of commodities and services financed out of funds authorized under the mutual security program. The executive branch of the Government, pursuant to the act, was to make information available to suppliers in the United States and particularly to small independent enterprises as far in advance as possible with respect to purchases and to make available to prospective purchasers in the nations receiving assistance information concerning small business by the creation of an Office of Small Business.

Congressional intent is further indicated in the Mutual Security Act under section 413 entitled, "Encouragement of Free Enterprise and Private Participation," which states that in order to encourage and facilitate participation by private enterprise to the maximum extent practicable in achieving the purposes of the act, numerous studies were to be made. A review of the studies clearly indicates that corrective measures are necessary to increase the participation of small business.

The impact of these programs on the American economy is apparent when we examine available statistics. Approximately $35 billion has already been spent by this country on the mutual security program in the last 10 years. Of that total, approximately $26 billion has been spent in this country. The subcommittee would like to know how much of this $26 billion has reached the small business community.

The staff has prepared, for the information of the subcommittee and the Members of Congress, a tabulation of mutual security program funds spent for nonmilitary commodities in a 312-year period ending June 1957, in 36 States. We have tabulated the items by: (1) Dollars spent, (2) number of communities participating, (3) number of business firms, and (4) the commodities involved.

We believe the market potential of small business overseas must be improved. Its participation in mutual security funds expended in the United States should be expanded in order to guarantee a broadening of the small business economic horizon.

Without objection, a copy of the compilation of the mutual security program funds spent for nonmilitary commodities in the 312 years ending June 1957, prepared by the staff of the subcommittee, may be placed in the record at this point.

(The tabulation referred to is as follows:)

Compilation of mutual security program funds spent for nonmilitary commodities

Compilation of mutual security program funds spent for nonmilitary commodities-Continued

Grain production; construction, mining, and conveying equipment. Hides, skins, leather, and leather products.

Iron and steel; electrical equipment; industrial machinery; agriculture; chemicals; textile products; nonmetallic minerals; motor vehicles, engines, and parts; copper and copper products.

Textiles; various industrial fields. Agricultural products; cotton; tobacco; textile products; lumber and wood products.

Chemicals; textiles; agricultural products.

Aircraft, engines and parts; crude oil, petroleum products; construction, mining, and conveying equipment; ordnance; cotton production; food and feed crops.

39 Iron and steel; coal and coal products;

Utah.
Vermont.

Virginia..

17

chemicals; tobacco.

Agricultural products; food and feed crops; fruits.

Coal; nonmetallic minerals.

Electrical equipment; iron and steel;

construction, mining, and conveying equipment; ordnance; industrial machinery; tractors; paper and allied products.

Sources: National Planning Association, Washington, D.C.; Department of Defense; International Cooperation Administration.

Mr. YATES. The committee is pleased to have with us this morning the very dynamic Assistant Secretary of Commerce for International Affairs with whom I have had some dealings as a result of my being on the Appropriations Subcommittee for the Department of Commerce, Mr. Henry Kearns.

We also have with us Mr. Loring K. Macy, Director of the Bureau of Foreign Commerce; Mr. John C. Borton, Director of the Office of Export Supply of the Bureau of Foreign Commerce; E. E. Schnell

bacher, Director of the Office of Trade Promotion; Robert E. Simpson, Director of the Office of Economic Affairs; and Mr. Walter S. Shafer, Director of the Office of International Trade Fairs.

Gentlemen, we are pleased to have all of you with us this morning, and we are grateful for the views that you are going to bring us.

Before calling upon you, I should like to announce that there will be a meeting of this committee tomorrow afternoon to conclude this phase of the hearings if permission is granted by the House.

Before calling on Mr. Kearns, I wonder if Mr. McCulloch would like to make a statement at this time.

Mr. MCCULLOCH. No, Mr. Chairman.

Mr. YATES. Mr. Kearns, we would be delighted to hear your statement at this time.

TESTIMONY OF HENRY KEARNS, ASSISTANT SECRETARY OF COMMERCE FOR INTERNATIONAL AFFAIRS

Mr. KEARNS. Mr. Chairman and members of the committee, it is a privilege to be here, and with your permission I would like to go over this testimony we have prepared.

In this case we have tried to present the operations of the Commerce Department as they affect small business and international trade.

As you know, we have submitted copies of the statement, and some of the examples of the material that we produce for the use of the committee, and I will refer to them as I go through the statement, if that is agreeable.

I wish to thank the committee for the opportunity to appear here today to describe what the Department of Commerce does to help U.S. business expand in the field of foreign trade. By the term "foreign trade" we mean exports, imports, foreign investment, and international travel.

Although our services naturally are available to all business firms, both large and small, we are convinced that our services are needed even more by small business. This is easily understood when it is realized that during the month of May, to cite only the latest month for which we have figures, there were 38,913 individual requests to the Department of Commerce from business for facts and assistance relating to foreign trade. Similar figures for previous months have been considerably higher. We are happy to tell you that these were handled with dispatch.

If I may be permitted a personal note, I should mention that throughout my adult life I have been a "small businessman.” I have owned and operated a number of enterprises which fall well within the Government's definition of "small business." My experiences in financing for expansion and such other managerial responsibilities as meeting payrolls and seeking and keeping qualified employees, have been of inestimable value to me in the course of my official duties, for it is of the utmost importance that the Assistant Secretary of Commerce for International Affairs have a constant awareness of the small businessman's problems and interests. I believe that my personal familiarity with small business operations enables me in some measure to be of greatest possible service to the small business establishments who daily call upon us with international trade problems.

I should like to say also that we in the Department have an extremely close working relationship with the Small Business Administration which, in my opinion, works well to the benefit of the small business community.

We have frequent conversations with Mr. Wendell Barnes, the Small Business Administrator, and the Department of Commerce, through the Office of the Secretary, is represented on the Small Business Administration's loan policy board which provides an additional channel of information between the two agencies.

One tangible result of close cooperation is the Small Business Administration's publication, "Pointers on International Trade," which was prepared with the assistance of Bureau of Foreign Commerce personnel.

May I begin by indicating why the Department of Commerce is deeply concerned with foreign trade.

Our basic statute enjoins the Department to foster, promote, and develop the foreign and domestic commerce of the United States. To this end the Department participates in the formulation of governmental policies having the purpose of creating a satisfactory climate both here and abroad, for the expansion of trade, tourism, and investment.

Our fundamental premise is that higher levels of international trade-more exports, orderly imports, sound foreign investment, and expanding international travel-are in the total national interest.

We believe in and work toward the elimination of governmental restraints on trade here and abroad so as to provide free, competitive access to world markets and the greatest possible accessibility to world resources. We believe that these policies make good sense for the U.S. economy and the economies of the friendly countries with whom we trade. We are certain that through the known beneficial results of competitive trade-and international trade is highly competitive, I assure you the U.S. confidence in free enterprise and its demonstrated benefits to all our people can be concretely demonstrated abroad.

We believe firmly that expanding foreign trade makes good sense for U.S. business and the U.S. economy. We also believe that it makes good sense as a means of telling the world of the benefits of free enterprise.

The Department of Commerce participates in the formulation of the Government's policies respecting our foreign trade and foreign economic relations. We are members of the National Advisory Council on International Monetary and Financial Problems, and in this connection review proposals for foreign loans, policies respecting Government guarantees for U.S. firms investing abroad, and financial arrangements with foreign countries.

We are members of the Council on Foreign Economic Policy, which is responsible for giving general direction to U.S. foreign economic relations. We are also members of the Trade Agreements Committee.

And, of course, the Secretary of Commerce is Chairman of the Trade Policy Committee, the Cabinet level group which advises the President on our trade-agreements program, problems of import competition, and so forth.