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22. Screws, commonly called wood screws, of Origin of investigation: Application by United States Wood fron or steel (1st investigation). (1951.) Screw Service Bureau, New York, N. Y.
Application received: Aug. 15, 1951.
1953). 32. Screws, commonly called wood screws, Origin of investigation: Application by United States Wood
of iron or steel (2d investigation). Screw Service Bureau, New York, N. Y.
Application received: Apr. 1, 1952.
or Steel: Reports on the Escape-Clause Investigatious, December 1951, March 1953. (Rept. No. 189, 2d series,
1953). 53. Screws, commonly called wood screws, of Origin of investigation: Application by l'nited States Wood
iron or steel (third investigation). Screw Service Bureau, New York, N. Y.
Application received: Jan. 29, 1954.
the concession Dec. 23, 1954.
or Steel: Report to the President on Escape-Claus
Investigation.-1951 (processed). 67. Screws, commonly called wood screws, of Origin of investigation: Application by the United States
iron or steel, (fourth investigation). Wood Screw Service Bureau, New York, N. Y.
Application received: Jan. 20, 1956.
quest, and hearing canceled: Apr. 9, 1956.
When it requested dismissal of its application on April 9, 1956, the United States Wood Screw Service Bureau and its members had concluded, based on their experience and the experience in other small industries requesting similar relief, that effective import quota aid would not be granted under the then current presidential foreign trade policy. It was decided to waste no more time and effort pursuing remedial relief through escape-clause procedure. Obriously the executive branch is far removed from the import troubles of small manufacturers, as would be an international agency as the Organization for Trade Cooperation (OTC), that the problem is little understood and assistance can only come from Congress which is more responsive to the seriousness of the plight of small business.
SMALL BUSINESS MUST SEEK HELP THROUGH CONGRESS The screw manufacturing industry is composed of small manufacturers with many plants having less than 100 employees, although some have as many as a thousand employees. The screw manufacturing business in the United States, divided anong 200 companies, is essentially small business. Its principal a renue of relief in the current desperate import situation apparently is through its Congressmen who are close to the screw manufacturing plants located in their various districts.
II. R. 6902 AND S. 1899 PASSAGE NEEDED TO ESTABLISH QUOTA
Because no adequate relief could be obtained through escåpe-clause proceedings, as originally intended by Congress, and because import quota relief is desperately needed by the wood screw manufacturing industry, at our request Congressman Noah M. Mason, Republican, of Illinois, introduced a bill, H. R.
6902. Senator Everett M. Dirksen, Republican, of Illinois, introduced a companion bill in the Senate, S. 1899, which would establish an import quota on imports of wood screws.
REASON QUOTA 18 NECESSARY
The reason the domestic industry has requested an import quota in its application for relief to the United States Tariff Commission under escape-clause procedure is that increases in the tariff rate alone would be inadequate to compensate for the wide difference in cost between domestic and foreign producers. The average price of imported screws sold in the United States today is approximately one-half of the average price of domestic wood screws. Increases in tariff rate from the present 1212 to 25 percent ad valorem, the maximum allowed under the present law, would have little or no effect in offsetting the unfair low labor cost advantages of foreign producers, particularly those in Japan.
An import quota of a reasonable amount, allowing foreign producers to participate in this market and yet not to such a degree as would totally destroy the domestic industry, is the only reasonable answer. Even though the present Trade Agreements Act, as amended, contemplates use of import quotas as remedial relief to aid a seriously injured domestic industry, the executive branch of the Government has steadfastly attempted to maintain as one of its major policy platforms of free trade that no import quotas on manufactured goods shall be imposed. Foreign countries establish quotas, embargoes and licensing arrangements which, in effect, are no more than quotas. Yet, our Government stands forth like a white knight in shining armor refusing to protect its own small industries with reasonable import quotas. That is why we ask your committee not only to defeat H. R. 12591 but also to act now on our import quota bill S. 1899.
LACK OF STATISTICS HAMPER ESCAPE-CLAUSE RELIEF Another reason effective relief is denied the screw industry is that the Census Bureau does not collect or disseminate adequate statistics of imports. For example, machine screws, cap screws, socket screws, tubular rivets, and many other type fasteners are lumped in a metals and wares category of items, not elsewhere specified, in paragraph 397 of the Tariff Act of 1930. No suitable statistics of imports are collected for these products by the Census Bureau. They are lost in the shuffle and, although the domestic industry knows that huge quantities of these screws are being imported, through sources such as the Import Bulletin of the New York Journal of Commerce, no adequate statistics are available to establish injury as required by the United States Tariff Commission under escape-clause procedure.
SHIP MANIFEST DATA INADEQUATE As a further illustration of why adequate statistics are difficult to obtain, we cite the situation of certain importers securing a ruling from the Treasury Department preventing such agencies as the Import Bulletin of the New York Journal of Commerce from publishing their names or the quantities imported by them in the Import Bulletin. As a result of the New York Journal of Commerce and this industry vigorously protesting this rule, the censorship was changed slightly so that now quantities may be published, but no names of importers are listed.
A sample of the type of information taken from ships' manifests published by the Import Bulletin of the Journal of Commerce, covering not only screws but thousands of other products, is on the sheets attached hereto. This type of statistical data is confusing and useless as a basis for establishing an escapeclause case by an industry being injured. No Census Bureau statistics are available showing actual quantities in pounds, pieces, tons or dollars except in the case of wood screws (see chart attached).
Minor administrative actions by executive branches of the Government are misguided efforts to carry out the top policy of the administration to free up trade, and, caught in the middle are small domestic industries which are hamstrung in obtaining vital information essential in establishing their case under escape-clause procedure. This is another reason why we urge Congress not to extend the present Trade Agreements Act for 5 years because the new law would be another blank check to the free traders in the administration to ignore the plight of small business.
PASSAGE OF S. 2240 NEEDED TO INSURE MARKING OF FOREIGN ORIGIN ON PACKAGES
Passage of H. R. 12591 is further opposed by the screw manufacturing industry on the ground that it does not establish adequate safeguards for proter tion of small highly competitive businesses from unfair import competition. For example, at our industry's request, Representative Noah M. Mason (Republican), Illinois, has introduced H. R. 8111 in the House of Representatives amending the Tariff Act of 1930 with respect to marking of imported articles and containers. A companion bill, known as S. 2240 (attached) was introduced in the Senate by Senator William A. Purtell (Republican), Connecticut. The purpose of this legislation is to prevent commingling of imported screws with domestic screws by importers, jobbers, distributors, and others, and offering them in the trade as domestic products.
Foreign producers select the most popular sizes of screws to import. Their purpose is to make large volume sales at low prices of so-called heart-of-the-line items. When these are sold through the distributing trade and also to large users, resellers find it a simple matter to commingle the imported screws with domestic screws of odd sizes and unusual diameters and lengths and offer them without clearly marking the new containers indicating that most or part of their offerings are imported screws.
Since there is considerable preference throughout the trade for domestic products, misrepresentation of this kind constitutes unfair competition and places domestic producers at a further disadvantage in competition with imported products. The Federal Trade Commission has attempted to rule this kind of activity as unfair competition under section 5 of the Federal Trade Commission Act, but the conditions and limitations included in its various decisions make effective enforcement practically impossible.
Accordingly, we have had introduced H. R. 8111 and S. 2240 as bills which will prevent commingling and help establish fairer competition between domestic and imported products. We refer to these bills introduced by us as evidence of the urgent need for protection of our small industry. Because H. R. 12591 provides no tangible assistance of the kind needed by our industry and proposes power in the executive branch to reduce tariffs still further and also fails to return to the control of Congress its power over tariffs and imports, we are unalterably opposed to its passage. We support Senator Thurmond's amendment to H. R. 12591 which would reduce the period to 2 years and restore congressional authority over tariffs as under the Simpson-Davis bill (H. R. 12676).
STATEMENT OF VINCENT J. RODDY IN OPPOSITION TO H. R. 10368 BEFORE THE
HOUSE WAYS AND MEANS COMMITTEE, WASHINGTON, D. C., THURSDAY, FEBRUARY 27, 1958
My name is Vincent J. Roddy. I am president of the American Screw Co., Willimantic, Conn. As a member of the screw-manufacturing industry, I represent my company here today to express our concern as to the damaging effects H. R. 10368 may have on the economy of the United States, the economy of the State of Connecticut, and the well-being and job opportunities in the fastener industry. The underlying objectives of bill H. R. 10368, helpful as they may be to international policy, should not be the sole consideration, especially when the sacrifice of many United States industries is involved.
We probably could arrange for a dozen manufacturers of screws to testify before your committee to tell you of the economic stangulation occurring to this industry due to imports. However, to conserve time, I have been asked to an pear as an individual manufacturer typical of the industry. I refer in this statement particularly to imports of wood screws; however, my company has been hard hit by imports of other types of fasteners, such as machine screwe and tapping screws.
The material presented by Mr. Byrne speaks for itself. The current recession, of course, vastly increases the economie hardship caused by the flood of imports. Our company's incoming orders have declined severely in the past 6 months. Our plant has been operating on a 4-day week, but has returned to a 5-day operation with the layoff of a substantial number of employees.
The wood-screw industry is one of the older industries in the United States, and the American Screw Co. bas heen a producer of wood screws for 120 years. In all that time, imports were no problem for our company until 1950, following
reductions in the tariff and devaluation of the British pound. Since then, the ever-increasing volume of imports has been a serious problem. Wood screws, machine screws, tapping screws, etc., are readily subject to substitution as to source. No style variations, or even much in the way of quality differences, can be emphasized to offset and outsell imported products. What occurs is simply a substitution of our sales by imported products with resulting economic loss to our company and cutbacks in employment and idling of equipment. Yet in escape-clause cases, relief has been denied to our industry. Despite the loss of 20 to 30 percent of the domestic industry's volume to imports, we have not been considered as seriously injured by the executive department of the Government. Facts do not substantiate this conclusion, and I would remind you that, without these products of our industry, our entire transportation system as well as all basic industries, would grind to a dead halt. If for any reason the imported product was unavailable--and our domestic fastener industry had been reduced to an impotent source of supply-what would be the result?
In May of 1957, after a great deal of study, our company reluctantly decideu that, due principally to increasing imports, it would be necessary to close our Norristown plant. This plant had produced wood screws and other fasteners for over 50 years. Approximately 100 employees in the small town of Norristown, Pa., lost their jobs as a result of this cutback.
As Mr. Byrne states, there are over 200 companies producing various types of screws, nuts, bolts, and rivets in the screw-manufacturing industry. The industry is composed principally of small manufacturers, and is extremely competitive. We consider our company basically small business, although we know that our payroll in a locality such as Willimantic, Conn., gives much-needed employment to people in that area. The majority of job opportunities in Willimantic are for women, whereas most of the jobs at the American Screw Co. are filled by men. Hence, job losses at American have a very serious impact on our community.
I would like to draw your attention particularly to H. R. 8111, providing for an import quota of wood screws, and also H. R. 6902, which would require persons selling imported screws in the United States to plainly mark packages containing them with the country of origin. We have not obtained the relief desperately needed by our industry through the so-called escape-clause procedure. These bills, reducing imports in the case of one and insuring fairer competition in the case of the other, would help considerably though they will not solve the entire problem. Both bills are now in your committee. We hope you will act on them favorably without delay.
While I refer to these bills which were designed especially to help our own industry, I am here today primarily to express concern over the extension of the present Trade Agreements Act; first, because it would give the executive branch of the Government authority to reduce tariffs further, which is unthinkable for the products of our industry, and secondly, because effective relief to seriously injured domestic industries cannot be obtained under the procedure now established in the present Trade Agreements Act. Decisions of the United States Tariff Commission in cases involving seriously injured industries should be final except for review by or appeal to an appropriate committee in the Congress. I believe that if such procedure were initiated, some commonsense solution would be found for the corrosive and cancerous effect of unlimited imports on this industry which has proved so vital to the Nation in a period of national emergency.
I have attached to this statement material released by the Connecticut Trade & Employment Council, Inc., of Bristol, Conn., telling of the formation of this organization to assist and protect the job opportunities of Connecticut men and women, threatened by imports of products from low-wage foreign countries. I request that these releases be inserted in the Congressional Record along with this statement as reflecting the grassroots efforts now going on in Connecticut to obtain assistance from low-labor imports.
Thank you very much.
(The material attached to Mr. Roddy's statement appears on pp. 701-717 of the printed hearings on the renewal of Trade Agreements Act by the House Committee on Ways and Means.)
STATEMENT OF CHARLES M. GRAY, MANAGER, INSULATION BOARD INSTITUTE, IX
OPPOSITION TO H. R. 12591
This statement is filed in opposition to H, R. 12591, on behalf of the Insulation Board Institute, a trade association of domestic insulation-board manufacturers.
Insulation board is used principally in building as an insulating medium against temperature changes. It is made of wood, cane, and other vegetable fibers ranging from one-quarter to 1 inch in thickness, which is cut into convenient building sizes. Board seven-sixteenths inch and over in thickness is used in construction of structural sheathing, roof insulation, plaster-base lath, building board, or is used in the manufacture of acoustical tile, interior tile and plank, and insulating siding. Thinner board has a variety of uses, ranging from shingle backer and building board to pipe gasket.
Imported insulation board is classified under tariff item 1402 of the Tariff Act of 1930 as "pulpboard, wallboard * * * not plate finished," on which the duty rate is now 5 percent ad valorem, having been reduced from an original rate of 10 percent ad valorem by a 1949 trade-agreement concession.
In considering the proposal in H. R. 12591 to extend and broaden the tariff concession negotiating powers of the Executive, the domestic insulation-board pro ducers, although appreciative of the basic aim of the trade-agreements program, are most apprehensive over the results of that program during the past 24 years of such delegated authority.
Instead of being, as originally intended, a program of trade agreements for the interchange of tariff reductions designed to increase two-way trade, it has become a one-way street for this country to open its markets to foreign merchandise. No longer being oriented, as originally conceived, as a matter of do mestic policy in our own self-interest, it has become an instrument of our foreign policy to meet the Soviet challenge, and an answer to any other foreign relations problem that arises. Contrary to its original concept of leading to mutual concessions from abroad, it has resulted in increased quantitative and other eridences of economic nationalism.
Having meanwhile already negotiated our tariff rate bank account down to a small fraction of its 1934 condition, which would suggest a prudent reap praisal of the results achieved by the program-it is now proposed that we commit ourselves for an unprecendentedly long period to accelerating the withdrawal of our remaining tariff bank balance.
Believing that we will not win the peace by such profligacy and rather than our only sound defenses to the Soviet challenge are our own production, our independence of foreign sources for strategic materials, and the economic wellbeing of this country, the domestic insulation board producers believe that new and more effective methods of encouraging two-way trade are vitally needed in stead of simply blindly continuing a warmed-over method.
Specifically, we are opposed to four features of H. R. 12591.
A. The proposed 5-year duration of the proposed Executive's authority to make new trade agreements is unprecedented, and destructive of the needed periodie congressional review of the trade-agreements program. Such a lengthy delegation is particularly anomalous now, in precluding a long-needed congressional consideration of the Tariff Commission's recommendations regarding tariff classifications, in preventing correction of procedural defects, and in destroying congressional flexibility in adjusting our tariffs to fluctuating domestic economic activity and employment, etc. We urgently recommend, at most, a 1- or 2-year extension of the present negotiating authority.
B. We further are opposed to the proposed increase in tariff-cutting authority and particularly the proposed alternative authority of reducing any rate by 2 percent ad valorem below the rate existing on July 1, 1958. As applied to the present reduced tariff rate on imported insulation board (i. e., 5 percent ad valorem), this alternative authority would permit a 40 percent reduction in the present rate and reduce it to a 3 percent ad valorem rate (30 percent of the 1930 rate).
These percentage limitations on the proposed grant of new changing authority appear to have been pulled out of the air. Why a 25 percent blanket reduction? Why a "2 percentum point" reduction? How can anyone possibly know what the impact of such excessively broad new authority can be on domestic in dustries?
C. The three abstract, alternative authorities to cut tariff rates are proposed without any standards to guide the Executive in exercising them. There is no direction to the Executive in lowering our remaining tariff rates by trade agree