Statement by the President Expressing Disapproval of Appropriation Act Provision Relating to Export of Hides, Skins, and Leather.

I HAVE today signed H.R. 18119, the appropriation act for the Departments of State, Justice, and Commerce, the Judiciary, and other agencies of the Government. This is a vital appropriations act which I felt compelled to sign. But I must express my disapproval of section 304 of the act which prohibits the use of any of the funds appropriated to the Department of Commerce to enforce any export control order on certain hides, skins, and leather.

In 1961, Congress enacted the Export Control Act, and gave the President explicit authority to impose such export controls as were necessary to reduce the inflationary impact of abnormal foreign demand. Precisely the situation contemplated by the act arose earlier this year. The rapidly increasing price of cattle hides and related products, caused in large part by increasing exports, threatened the stability of prices for shoes and other leather goods. Under these circumstances the Secretary of Commerce, to whom the President's authority has been delegated, imposed export control.

Since the export control order on hides was issued, conditions in the hide market have changed, and the Secretary of Commerce has been considering suspension or modification of the export control. Therefore, no immediate economic problem is raised by the action of the Congress. However, there is no assurance that conditions in the hide market may not again change so that control would once more become necessary.

It is essential for the maintenance of our economic well-being that free enterprise and responsible Government be able to work together in a timely fashion. The Export Control Act recognizes this, as do numerous other laws passed by Congress.

But in this rider to the Commerce Department appropriation, Congress attempts to control the manner in which the Export Control Act is to be administered. I am directing the Secretary of Commerce and the Director of the Budget to prepare for submission to the next Congress a proposal removing this restriction upon the prompt and flexible response required to protect the public's economic interest.

In the meantime, I am requesting the Secretary of Commerce and the Council of Economic Advisers to watch closely the volume of hide exports and the prices of hides, leather, and shoes. We must rely on the self-restraint and responsibility of hide exporters to avoid undue pressure on hide prices. I express my hope that manufacturers of leather and shoes will not use the removal of export controls as an invitation to increase prices.