Page images

outline the steps taken to control United States exports of sulfur to accomplish these objectives.

As a result of progressive tightening of export controls, sulfur is currently being exported at the lowest rate since 1946. Prior to October 26, 1950, licenses to export sulfur to all friendly countries outside the Western Hemisphere were issued relatively freely, and shipments to Western Hemisphere destinations were not regulated. But as soon as the signs of shortages began to appear, OIT issued an export control regulation making it necessary for anyone who applies for an export license to attach a letter showing supply availability. This was done to avoid further aggravation of the shortage by issuing licenses to persons who did not have immediate access to supplies, and who might, therefore, use their licenses as a basis for competing for supplies wherever they might be or whoever might hold them. As a further step, OIT in December 1950 made it necessary, before sulfur could be shipped anywhere in the world, that an export license would have to be obtained. Previously, as I have said, licenses were need only for countries outside the Western Hemisphere.

At the same time, on November 10, 1950, OIT presented proposals to the Secretary's Advisory Committee on Export Policy that a definite quantitative ceiling on the export of sulfur should be established. While this proposal was being considered by this interagency committee, OIT by administrative action on pending export license applications slowed down during the month of December the export licensing of sulfur, except for emergency situations and hardship cases.

On December 19, 1950, OIT issued an announcement setting up an export quota for sulfur, limiting shipments to all destinations. This quota was recommended by the interagency Advisory Committee on Export Policy and approved by the Secretary of Commerce. As a result of this step, and the previously mentioned actions, a full control over the export of sulfur was achieved, as well as a control over the destination to which it was to be shipped, and to the extent possible, the purposes for which it would be used.

I would like to point out that the quantities which the OIT licenses for export are established by the Secretary of Commerce only after he has consulted with all interested United States agencies, through the means of his Advisory Committee on Export Policy. The sulfur export quota is set with the advice of that committee, on which are represented, among others, the Departments of Agriculture, State, and Defense, the National Production Authority, the Defense Minerals Administration, the Defense Production Administration, the Economic Cooperation Administration, the Atomic Energy Commission, and the Office of International Trade.

By this means, the Secretary is able to obtain the maximum of information available on the current picture on sulfur, both as to domestic and foreign demand and supply. He also has by this means direct access to the individual opinions of the departments and agencies as to the specific amount which they feel should be exported. And it is on the basis of this information furnished and views expressed that he makes his decision as to the export quota which he authorizes OIT to license.

The United States has been, and even under today's conditions continues to be, the world's largest supplier and exporter of sulfur. Similarly, the proportion of sulfur production exported in the past, and

which is being exported today, is relatively large. In 1935 we exported 300,000 tons, exclusive of Canada. The rest of these figures are exclusive of Canada. The peak came in 1949 with 1.2 million tons exported. Exports have generally averaged 19 percent of production, except in 1946 and 1949 when they rose to 26 percent.

Since 1949 there has been a decline in exports. Voluntary export control measures adopted by the principal producers reduced 1950 exports to 1,086,000 tons, almost 9 percent-8.7-under 1949. The full official export control measures and quota controls adopted in December 1950 will at the present rates bring 1951 exports down to 960,000 tons, which will be 19 percent under 1949 and 12 percent under 1950. It will also reduce the percentage of production exported to 19 percent, compared with 26 percent in 1949 and 22 percent in 1950. I should add at this point that the exports for the next two quarters of this year, which I refer to as if they are the same as at present, would amount to 960,000 tons, have not been established. That is just an assumption to show what a yearly figure would be at that rate.


Although we have been anxious to restrict by means of export controls the amount of sulfur exported, in practice this has been a difficult goal to achieve. Other countries have in the last decade become so dependent on United States sulfur because of its high purity and low cost, and sulfur enters so broadly and basically into their economies, that we have found that they have not been able to turn to the use of other sulfur-bearing materials as quickly as we hoped. For instance, the export allocation of 200,000 tons of crude sulfur for January, February, and March of 1951, which was 26 percent under the 1950 quarterly export rate, turned out to be too sharp a cut-back for many countries. They demonstrated to us the results this court would have on their ability to mobilize their defenses. As a result, it was necessary to allocate another 50,000 tons for export.

The same general condition holds true for April, May, and June, and for the first 6 months of this year export quotas of crude sulfur have had to be established at a quarterly rate of 240,000 tons, instead of the 200,000-ton rate anticipated last December.

I might add here that the presentation of requirements by foreign countries, exclusive of Canada, for the year totaled about 1,400,000 tons. So there has been a rather drastic reduction from their asking amount to the rate that we are up to now allocating.

In order that you obtain the fullest possible explanation of that part of the sulfur problem for which we in the OIT have responsibility, with the permission of the Chair I would like to have Mr. Derek Brooks sit with me to help answer questions so that it will not be necessary for me to pass quite as many questions on to the next speaker. Mr. BECKWORTH. Mr. Brooks, you may come forward.

Mr. MACY. Mr. Brooks has been living with this problem so far as OIT is concerned and has been in on the discussions and background that have developed these requirements which came out in the form of allocations by the Secretary of Commerce, so that in that field we will try very hard to answer your questions.

Mr. BECKWORTH. Will you fully identify yourself, Mr. Brooks?

Mr. BROOKS. My name is Derek Brooks. I am in the Office of International Trade of the Department of Commerce and am responsible for the export licensing of sulfur and the gathering of foreign requirements.

Mr. BECKWORTH. You are responsible only for the licensing of sulfur?

Mr. BROOKS. I have been until recently responsible for the licensing not only of sulfur exports but many other commodities.

Mr. BECKWORTH. Mr. Macy, what is the source of your figures there? Were you excluding Canada?

Mr. MACY. Yes, sir. These figures excluded Canada. We in the Office of International Trade, in our export-control operations, do not control the amount of materials that go from the United States to Canada because of a formal agreement between the two countries relative to controls that serve as a substitute for the actual physical licensing control.

For example, anything that is shipped to Canada from the United States which requires a license for shipment from the United States to another country requires, before it can leave Canada, a Canadian license. So we work very closely in that connection.

Mr. BECKWORTH. Is it contemplated that that procedure might be changed with reference to Canada in view of the circumstances which are developing today?

Mr. MACY. It could be done at any time. However, our working arrangement with Canada is such that they take care of it from there side, and it does not require the individual license from the United States. Our arrangements with Canada enable us not to require any paper work that we must do for other countries.

Mr. BECKWORTH. Actually what your arrangements amount to with Canada is that which will eliminate the regular and usual paper work, or does it amount to more than that?

Mr. MACY. Canada, as far as the mobilization effort is concerned, is working so closely with the United States, bringing to bear all of their facilities to the same purpose as our own. That is why we have not found it necessary to control exports to Canada. Where we have difficulty in the amount of material that goes to Canda on some commodities they will usually take action on their own part which will limit the imports to Canada. So, it is an arrangement that we think works very well, and we only wish it could apply to other places.

Mr. BECKWORTH. Is it your opinion that, instead of 26 percent of the sulfur being exported in the next year or two, it will be down around 19 percent or less?

Mr. MACY. I would like Mr. Brooks to answer that question.
Mr. BROOKS. I think that is a fair assumption.

Mr. BECKWORTH. That is what I gathered. You do not think that it will go to a figure appreciably less than 19 percent?

Mr. BROOKS. Not in 1951.

Mr. BECKWORTH. What I have in mind in asking that question is that I understood from yesterday's testimony that facilities are being developed in foreign countries that might give the countries over there an opportunity to produce a lot more sulfur than they are today producing. Do you expect the first impact of that new production to be felt in 1952?

Mr. BROOKS. Possibly in the first quarter of 1952.

Mr. BECKWORTH. With reference to the exports which we send to other countries, do you have any knowledge as to whether or not there is any reexporting from those countries?

Mr. MACY. Reexporting of the sulfur. Yes. We follow that very closely on commodities that are in scarce supply; and, as far as we know, there has been no reexportation of sulfur that has been allowed to go to friendly countries. In other words, when we grant a license to ship sulfur to a country, and if then it is transshipped, it is a violation of that license, and we are watching for violations of our exportcontrol licenses. As far as we know, on sulfur, there has been no reexportation.

Mr. BECKWORTH. You know of no violations, then?

Mr. MACY. That is correct, sir. It follows that with the terrific demand in the countries to which we do allow it to go, there would not be too much danger of its being reexported.

Mr. BECKWORTH. It has been pointed out before that fertilizer used in agriculture has been responsible for the utilization of considerable sulfur recently. Is most of that fertilizer going to western European countries or is it going to agricultural pursuits in some other countries?

Mr. MACY. Mr. Chairman, I would say that very little of it goes to Western Europe. Most of it goes to Western Hemisphere countries, Latin America, Caribbean countries. Mr. Brooks, I believe, has some figures in that connection, if you care to receive them.

Mr. BECKWORTH. Give me some figures particularly with reference to the pronounced increases in countries.

Mr. BROOKS. Did I understand the question correctly, Mr. Chairman, that you are asking about the export of sulfur as such?

Mr. BECKWORTH. It has been mentioned that sulfur is being used in fertilizer to a much greater extent than perhaps in the past years. My question is to determine where the fertilizer is to be used, because in that way the sulfur does leave the country.

Mr. BROOKS. I have some figures here of the export of ammonium sulfate in 1950. These figures are in long tons: Mexico, 14,873; Cuba, 33,729; Dominican Republic, 1,030; French West Indies. 1,984; Spain, 27,806; India, 127,561; South Korea, 122,896; Hong Kong, 52,837; Taiwan, 55,504; and Japan, 197,217.

Mr. MACY. May I add further, Mr. Chairman, that this is for the year 1950, and a fairly large part of those shipments were made during the first 6 months of 1950. Actually, I think the largest quantity was in the first 3 months at a time when the fertilizer industry was actively looking for markets. It was before the shortages became apparent on these commodities. I believe in the fourth quarter, or the last 3 months of 1950, the export of this type of fertilizer dropped from a rate which was going on in the first two quarters of better than 200,000 tons down to around 50,000 tons. You have some figures on that; 57,000, I believe, is the correct amount for all countries.

[ocr errors]

Mr. BECKWORTH. With reference to the Hong Kong fertilizer, for what crops is that used?

Mr. MACY. The amount that went to Hong Kong left this country early in 1950, prior to our putting on complete controls on all commodities to Hong Kong as well as to China; and, therefore, it went unrestricted as far as export control is concerned. None has gone since we nave put controls on all commodities to that area. I would not know precisely what commodities that would be used for, what farm crops. Mr. BECKWORTH. Do you know, Mr. Brooks?

Mr. BROOKS. No; I do not.

Mr. BECKWORTH. Who would know that?

Mr. MACY. We can get that information for you, Mr. Chairman. (The information is as follows:)


Ammonium sulfate would be used in Hong Kong as fertilizer for truck gardening and on rice farms.

Mr. HELLER. Have there been any other shipments to Hong Kong since the early part of 1950?

Mr. BROOKS. I have the record of quarterly shipments of ammonium sulfate to Hong Kong. In the first quarter of 1950 the shipments amounted to 26,000 long tons. In the second quarter the shipments amounted to 3,300; 7,700 in the third quarter; and 15,600 in the fourth quarter.

Mr. MACY. We put controls on all commodities to Hong Kong on December 8, 1950. Nothing has been licensed or shipped since that date.

Mr. HELLER. Mr. Macy, are you attending the meetings of the International Materials Conference now?

Mr. MACY. No, sir. Mr. Sweet, who testified before this committee yesterday, is a member of that committee. Now, Mr. Brooks sits on the committee, on the United States interagency committee which Mr. Sweet chairs, to advise him on the position of the United States, but Mr. Sweet is the member internationally as far as the United States is concerned.

Mr. BECKWORTH. On page 2 you mentioned emergency situations and hardship cases as being those exceptions where you are not quite as careful, perhaps. What does that embrace?

Mr. MACY. I am sorry. Let me explain a little further what I was trying to bring out in that particular context. While we were waiting for a decision as to the total amount that we could license, we were allowing some shipments to go; and, knowing that the allocation we would get would be considerably larger than any we would let go, we slowed it down until we could be sure we had the decision of the whole Government to know what we should do. But those hardship cases would be, I presume, a few cases where the exporter had gone sufficiently far in his export of that particular one that it might be a hardship on him, in small quantities.

Other cases were where a certain very important factory in one of these countries would have to close up an important production operation if they did not get some more sulfur quickly; a few of that kind of cases.

Mr. BECKWORTH. I remember one time when this committee was studying export matters there were some inferences that the personnel was so short in the Commerce Department that perhaps they could not study the application as well as they would like to study them. Have you had ample personnel to make adequate study of all these sulfur-license applications?

Mr. MACY. Mr. Chairman, I would say in that connection that, due to the splendid cooperation that we got in getting a supplemental appropriation from the Congress for the latter part of the fiscal year 1951, we have been able to crawl on top of the workload that we had, a workload that built up very rapidly last fall and reached more

« PreviousContinue »