Question and Answer Period Following Speech of Senator John F. Kennedy, Association of Business Publications, Biltmore Hotel, New York, NY

Mr. CLAUSER. Thank you, Senator Kennedy. We have quite a few questions. Senator Kennedy has agreed to answer a few of them. We have about 10 minutes.

The first question is one which you touched on quite a bit in your talk, but it concerns so many of our editors, those editors who are editors of magazines representing industries, specific industries. Here is the question:

Several of our editors, reflecting concern about their particular industries, advanced questions regarding the damaging effects of imports from low-wage areas such as Japan. Pottery, glass, shoes, textiles and electronic products are among those mentioned. What specific steps would you take to cope with these problems, such as tighter import controls, or would protection for the New England shoe industry, for example, be reactionary and contrary to the foreign trade policy of both parties?

Senator KENNEDY. As I said in my speech, the balance of payments, as all of you know, on exports, was in our favor in the last 12 months. The difficulty, of course, is that in order to sustain our commitments around the world, aid, payment of our troops, bases, all the rest, we have to have more than just a balance between exports and imports. The balance of trade really has to be in our favor. That is the first point.

Now, on this question, of course, we have been particularly hard hit by imports in some areas, and pottery certainly is one, fish is another that was not mentioned, textiles is another. Frequently imports may be only a relatively small percentage of our domestic market, 2 or 3 percent, but it breaks the price for the other 97 percent. My own judgment and experience has been that we have laws, of course, on the books, the peril point, and others, for agricultural commodities and industrial commodities, which have given protection to any industry which is excessively damaged by imports. As you know, on many occasions, the Tariff Commission has found that imports in a particular industry have had an excessive effect on the industry, that it has reached the peril point, and I have supported those provisions in our reciprocal trade to protect domestic industry from this excessive damage. But as you also know, because of international requirements, because of the President's responsibility for national security and because of other reasons, the President on a far greater majority of occasions has overridden the Tariff Commission. The number of times that he sustained the Tariff Commission have been relatively few. Therefore, the industry has been left to experience the damage.

In addition, in the case of Japan, we have a foreign policy responsibility to maintain Japan as a great source of strength in the Far East. Actually I think the Japanese have lived up reasonably well to the voluntary agreement on the importation of textiles. Hong Kong happens to be a place where textiles in the last few years have been coming from in the greatest quantities, at least with the greatest percentage of increase. So in answer to your question, because we must maintain our reciprocal trade policy, because we must sell abroad more than we take in, because the United States cannot take the lead in restricting trade, in fact, I emphasize that we should take the lead in persuading other countries to lessen their barriers against us, I believe that we can protect our domestic industry within present laws, with Presidential leadership, with a knowledge of the problem, with effective workings between the President and the State Department and countries abroad, and with the provisions in present reciprocal trade laws if vigorously, effectively, and responsibly administered.

Those are all large orders, but I believe that we can meet our responsibility. We are able, for example, within the powers of the President, without writing any law, to persuade the Japanese to a voluntary limitation. We can do many things, if the President of the United States is interested, if he is knowledgeable about the problems, if he works closely with the Congress, if he keeps in touch with the working of the Tariff Commission, if he studies the legitimate complaints of industry as opposed to those that may be excessive.

I believe that we can meet our responsibilities in this area more satisfactorily than we have. In addition, I have supported in the Congress legislation to assist those industries which are hard pressed by imports, but which have not been given relief because of overriding national reasons. If, for example, the President of the United States overrides the Tariff Commission when there is a clear case that the industry is being adversely affected, in fact, maybe almost liquidated because of imports, but he is unable to give them relief because he feels it would endanger our national security, we have in the past left the industry pretty much to strangle on the vine. I believe there is a need for a supplemental policy in these areas, which would provide loans to the businessmen involved, which would provide vocational retraining for the workers, assistance of one kind or another, because if that industry is being forced to bear a burden because of international responsibilities, it is a national problem.

I remember a particular case involving fish where the Tariff Commission recommended fish relief for our industry in New England, and because the Icelanders threatened to end our airbase concessions there if we took any action against the excessive importation of fish from Iceland, the President was forced to move against, I believe, the unanimous judgment of the Tariff Commission that the fishing industry was adversely affected. The fishing industry got no assistance from the Government for bearing that burden of international policy.

There is a problem that I think falls upon us. What is true of fish, which I happen to live with, is true of many other industries. So let me say in answer to your question that there are laws on the books for the protection of agriculture and for domestic industry. I hope we will have a President of the United States who is knowledgeable about those laws, who is interested in them, who is concerned about them, who works with the Congress on these subjects, and also uses his great powers and influence here and abroad in order to stimulate successful trade.

Mr. CLAUSER. Do you believe further regulatory or legislative action is needed to prevent the use or abuse of labor union power such as Mike Quill exercised in shutting down the Pennsylvania Railroad? Putting the question more broadly, do you believe management and union powers are presently in proper balance?

Senator KENNEDY. I would feel that it would be most helpful if in the basic industries we could persuade each industry and the union to set up procedures where strikes could be limited, where there would be a method of settling disputes without resorting to strikes which damage the entire economy. We have to pay a price for freedom, and, therefore, I have never supported compulsory arbitration in the great basic disputes, nor did Senator Taft in the 1947 National Labor-Management Act. He did attempt under that act to set up certain procedures which would permit a cooling off. Those procedures in my opinion are not satisfactory. I believe we should rewrite the national emergency section of the Taft-Hartley Act which provides today merely for an injunction for 80 days against the union.

One of the problems I thought in the steel strike was that the company knew that the injunction would be issued. They were extremely hopeful that the injunction would break the strike, and, therefore, there was not an incentive on their part to engage in true collective bargaining. It was not until the injunction had been issued and exhausted that they were then persuaded in December to accept an agreement which they could have gotten in July.

I think the President should have a wider arsenal of weapons so that neither the union nor the company would be assured his intervention would benefit one side or the other and therefore it would stimulate them to reach an agreement on their own.

In addition, I felt that in the case of the steel strike the Taylor Committee really did an outstanding job, set up under the national emergency provisions. But the President stated that he did not have the power to have the Taylor Committee make a recommendation. I am not suggesting that that recommendation should be compulsory, but I do believe that among the powers that the President should have in national emergency cases should be the power to set up a board of examination, isolate the issues, isolate the bargaining positions of both sides, so that public opinion could be brought to bear in an informed way.

In my speech I said I did not think the powers of the Presidency had been used very effectively in national emergency cases. It does not do any good for the President to make a rather vague, general speech about holding the line. What you have to do is break down the position of the two parties so that then we know what the union really wants, we know what the company will offer, we know what its effect will be on the prices. Those are the three things that we really want to know about a case. Then public opinion can be brought to bear and the influence of the Presidency.

So I would suggest that the President be given wider powers, a more varied arsenal, including this power that I have just asked, so that we can bring to bear public opinion in a more effective way in national emergency cases. I think it is a complicated subject, but after 14 years on the Labor Committee I am quite hopeful that in the coming sessions of Congress, regardless of my own fate, we could perhaps rewrite the national emergency section without doing it under the gun of the steel strike, but one that represents a cool judgment of what is in the best interest in the long run.

Finally, let me say that strikes are painful, but I am sure if you think of the complete alternative, which would be compulsory arbitration by the Government, I am sure that no one would really feel that that is a very happy solution. So you pay some price for strikes. Some are responsible and some are irresponsible. But I do believe we can increase the powers of the Government, we can compel the companies and the unions in the basic industries to think more carefully of their problems and responsibilities and of the public interest.

Mr. CLAUSER. Senator Kennedy, we have received several questions from people who are deeply concerned with the so-called Galbraith and Schlesinger pieces, that the Nation needs to divert spending from consumer goods and services, that a tax on advertising would serve to divert more spending to social and public services. Do you accept this doctrine, and would your administration take steps to execute it?

Senator KENNEDY. I am not informed in detail of the proposed tax on advertising and nobody has ever discussed the matter with me and I have never proposed it. Therefore, I would be opposed to it under the present conditions unless somebody could give me a better argument than at least I have heard superficially.

I don't think that anybody suggests that we should divert. After all, we are underconsuming today. I think what I am interested in, and, after all, I am running - what I am interested in is having us concern ourselves with the problems in not only the private sector, but also the public sector, that we concern ourselves with schools and hospitals and parks and recreational facilities and highways and urban problems, development of our national resources, and the solution is not to divert at this present time of a rather low-rate economy, spending from the private sector. The point is I would like to have us emphasize that we are in a deathly struggle with the Communist system, that we do have a responsibility to the next generation, that we must provide for effective government.

Now, all these people who object to effective government are the ones who come to us and ask us to drain their rivers and cleanse their rivers, and ask us to take action to protect their industries and all the rest. You have to have consistent public policy, and I think that Mr. Galbraith and Mr. Schlesinger, who have carried on an effort for a number of years, are emphasizing our public responsibilities. I don't know how you could divert from the private sector at the present time additional money that is going into the private sector unless you are talking about a tax increase. I have talked about the problem of taxes on social security. I have talked about redoing or relooking at our entire tax system in order to stimulate growth and provide sufficient revenue. But what I want to emphasize is that if I am successful we must concern ourselves with maintaining our strength in the United States and maintaining our freedom and have a responsibility to the public interest as well as to the private interest. But you must realize, those of you who work with business, that no President of the United States can be successful unless we have full employment, and we are not going to have full employment unless business is moving ahead. And you are not going to have business moving ahead unless it is providing for capital investment. Therefore, I must say that I think we waste an awful lot of time talking about things that really are not the issues. The issue is, can our private economy sustain itself? Can we consume what we produce? Can we attempt to carry on a greater rate of growth? Can we meet our responsibilities in the public sector to maintain our strength and freedom? Can we educate our children? Can we care for our problem of those who are ill? Can we develop our resources? Can we meet the problems of these metropolitan complexes? These are the things I want to emphasize, and I think in that, in the great sense, there really is not any disagreement between us.