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STATEMENT OF RICHARD A. TILDEN, GENERAL COUNSEL,
CLOTHESPIN MANUFACTURERS OF AMERICA · Mr. Tilden. I think the statement is rather brief and I would rather read it if I may.
Senator CARLSON. You may proceed.
Mr. TILDEN. My name is Richard A. Tilden, attorney, practicing in New York, and I appear on behalf of the Clothespin Manufacturers of America, a trade association representing all of the domestic producers of wooden clothespins.
The domestic wooden clothespin industry began its battle for protection from low-priced imports of spring clothespins almost exactly 10 years ago. During 1947, the industry consisted of 13 plants located in 8 States, which produced and sold 9,300,000 gross pins.
After 10 years of trying to invoke the escape-clause procedure, including four investigations by the Tariff Commission, I have to report virtually complete failure.
The industry now consists of only 6 plants. During this 10-year period, 7 of the 13 plants have either closed down completely or discontinued the production of clothespins. These seven plants were located in Phillips, Maine; Glen Rock, Va.; San Jose, Calif.; Richwood, W. Va.; Ellsworth, Maine; Munising, Mich., and Spencer, Ind.-all small towns in which the loss of the employment opportunities previously afforded by the clothespin plants was particularly serious.
Domestic sales in 1957 were 6,800,000 gross—a decrease of 27 percent from 1947. During this same period imports increased from 870,000 gross during 1947 to 1,940,000 gross in 1957—an increase of 123 percent.
The only thing the industry has to show for its 10 years of effort is an acknowledgment by the President that the industry is being seriously injured by increased imports.
This acknowledgment, which was made in a letter to this committee dated November 9, 1957, was accompanied by a token gesture of relief, in the form of an increase of 10 cents per gross in the import duty.
At first blush it would appear that the President's action was an appropriate means of remedying the injury caused by the concessions. I will not take up the time of the committee with a discussion of all the reasons why such action will not remedy the injury, but will merely point to a few very basic facts which should satisfy this committee that the real effect of the President's action is to add the clothespin industry to the growing list of injured industries which are being sacrificed to further the administration's program of encouraging imports.
1. In its report to the President the Tariff Commission categorically determined that the maximum permissible increase in duty would be inadequate to remedy the injury found to exist, and recommended imposition of an import quota of 650,000 gross annually as the only possible remedy.
2. Despite the increase in duty, imported spring pins are presently selling on the domestic market at prices ranging up to $2.45 per case less than domestic pins. Domestic packaged spring pins currently sell for $6.30 per case of 6 gross delivered. Comparable imported pins are now available at prices as low as $3.85 per case. It should be noted that the domestic price has not been changed for over a year and that the Commission found that the industry has been losing money at this price.
3. Within 3 months after the President announced the increase, one of the largest plants in the United States, located in Richwood, W. Va., closed its doors, adding more than 200 to the rapidly grow. ing national unemployment figure which is now causing so much concern.
4. During the 3-month period immediately following the increase in duty, imports totaled 592,574 gross—an increase of 222,334 gross, or 60 percent, over the imports during the same 3-month period of the preceding year; and an increase of 300,317 gross, or 103 percent, over the average imports during the same months in the previous 10 years.
5. During this same 3-month period immediately following the duty increase, domestic shipments of wooden clothespins declined 530,024 gross, or 30 percent, from the shipments during the same 3month period of the preceding year; and declined 571,454 gross, or 32 percent, from the average shipments during the same months in the previous 10 years.
These facts are presented to the committee to demonstrate the accuracy of the Commission's conclusion that “the maximum permissible increase in duty would be inadequate to remedy the injury,” and that the failure of the President to follow the recommendation of the Commission has resulted in further serious injury to the domestic industry.
The experience of the clothespin industry is indicative of the treatment which every industry concerned with import competition can expect to receive from the administration if H. R. 12591 is enacted in its present form.
I am aware of the assurances which this committee has received that the administration will administer the powers which it has asked for in such way as to protect all domestic industries.
However, the same assurances have been given each time the act has come up for renewal. The record does not indicate that these assurances have meant much in the past, and there is no reason to believe that they will mean any more in the future.
In my opinion, the most effective means of giving domestic producers the confidence in the future of their businesses that is essential to the future welfare of this country, would be for the Congress to retain final control over determinations as to whether or not to effectuate the recommendations of the Tariff Commission for relief in escape-clause cases.
I recognize that it would unduly burden this committee and the Congress if it became necessary for the committee or the Congress to pass on every escape-clause case. However, the necessary control could be exercised by providing in the escape-clause procedure that the President shall proclaim such increased duties, or impose such import quotas, as may be recommended by the Tariff Commission unless he files within a specified period, with this committee and with the House Ways and Means Committee, the reasons why he feels that such recommendations in an individual case should not be effectuated.
It could further be provided that unless this committee and the House Ways and Means Committee both adopted resolutions within a specified period of time approving the action recommended by the President, the President would be required to put into effect the recommendations of the Commission.
This procedure would have the advantage of requiring the Congress, acting through this committee and the House Ways and Means Committee, to take affirmative action only if the reasons advanced by the President warranted disregarding the Commission's recommendations with the consequent risk of sacrificing a domestic industry.
Moreover, such a procedure would not put the President in a straitjacket, since in any case in which he felt that the action recommended by the Commission would endanger our relations with foreign countries, would unduly injure any foreign country, would result in compensatory measures injurious to our export trade, or would in any other way be detrimental to the best interests of the United States, he could ask this committee and the House Ways and Means Committee to approve some other action.
The administration should have no concern that such committees would not approve the President's recommendations if the reasons advanced were sound and justified action other than that recommended by the Commission.
I am aware of the fact that the bill before this committee contains a procedure to give the Congress some control over the President's actions in escape-clause cases-through the adoption of a twothirds vote on a concurrent resolution.
In my opinion this procedure imposes much too great a burden on domestic industries and on the Congress. It is difficult enough for a domestic industry, particularly a very small one like the clothespin industry, to persuade a majority of members of the Tariff Commission that it is being injured. If such industry must also persuade twothirds of the Members of the House and Senate, the task would be virtually impossible.
It seems to me that Congress has previously evidenced its intent that domestic industries injured by increased imports were to be protected unless overriding international considerations indicated that it would be in the public interest generally to deny such protection.
If there are such considerations in any individual case, it should be the responsibility of the President to point them out to the Congress, or to this committee and the House Ways and Means Committee and to secure approval of the Congress, either directly or through the committee, of a denial of protection.
Domestic industries should not be expected to assume the burden of proving that there are no such overriding international considerations. The impracticability of imposing such a burden on domestic industries is well illustrated by the clothespin case.
The President, apparently because of overriding international considerations, refused to impose a quota of 650,000 gross per year on imports of spring clothespins, despite a strong recommendation by the Commission and a warning by the Commission that any other action would result in further injury to the domestic industry.
He rejected the Commission's recommendation despite the fact that the import quota would have had a negligible effect on foreign countries. If such a quota had been in effect during the 5-year period
1952 to 1956, inclusive, the loss in dollars to the 10 foreign countries which shipped spring pins to the United States would have averaged $223,000 per year.
Such amount is approximately one-one-hundredth of 1 percent of the total shipments of $2,029,125,000 made by such 10 foreign countries to the United States in 1956.
I do not know what considerations prompted the President's action in the clothespin case, but I do know that it would be an impossible job for the domestic industry to persuade two-thirds of the Members of the House and Senate that such unknown reasons were not valid, so as to override his action.
The domestic wooden clothespin industry has already suffered the loss of 7 of the 13 plants which were in operation 10 years ago, and the remaining 6 plants are entitled to something more than token relief.
The six plants that are left are located in Dixfield, Mattawaumkeag, and West Paris, Maine; in Montpelier and Waterbury, Vt., and in Cloquet, Minn.
They all contribute materially to the economic welfare of the small towns in which they operate.
For example, the Nattawaumkeag plant is the only industry in a town of 803 population. It employs 188 persons-90 percent of the total number employed in the town. The West Paris plant employs 116 out of the 186 employed in a town with a population of 670.
This is a small industry--much smaller than it was 10 years agobut it, and the workers dependent upon it for a livelihood, are entitled to the protection which Congress intended all domestic industries to have when it enacted the escape-clause procedure.
It can receive such protection only if H. R. 12591 is amended so as to impose on the President in escape-clause cases the burden of proving to Congress, or to this committee and the House Ways and Means Committee, that the public interest demands action other than that recommended by the Tariff Commission.
Thank you very much.
Senator Carlson. Mr. Tilden, we appreciate very much your statement here, and I know that this problem of the clothespin industry is of great concern to this committee because it has been brought up on many occasions.
Mr. TILDEN. I understand it has.
Senator CARLSON. Even with the full maximum tariff, it still wouldn't save the industry.
Mr. TILDEN. That is quite correct. There is a price differential between imported and domestic pins greater than any possible increase in the duty would take care of.
Senator Carlson. And the Commission had suggested that it would take an import quota to protect it. Mr. TILDEN. That is correct.
Senator CARLSON. And I assume that that was what you are recommending.
Mr. TILDEN. That is correct, sir.
Senator Carlson. Would you go far enough as to say that you would recommend it for all imports?
Mr. TILDEN. On all products ?
Mr. TILDEN. No, I would say that in the event the circumstances show in any particular industry that protection cannot be afforded by means of an increase in the duty, and that an import quota is the only possible means of protecting that industry, then an import quota should be imposed.
Senator CARLSON. Coming as you do from a great section of the country that appreciates very much receiving substantial quantities of residual fuel oil, and I, coming from an area where we are greatly concerned about these imports, I wonder if you would be willing to agree that we establish import quotas on that?
Mr. TILDEN. I am not particularly familiar with it in detail, but if it meets the standard I just mentioned, I certainly would favor it.
Senator CARLSON. I think we could make a good case, but I can appreciate that you have some problems, too.
We thank you, Mr. Tilden.
Senator Carlson. The next witness is Mr. Joseph Detweiler of the Argus Cameras.
Mr. Detweiler, we appreciate your appearance here.
STATEMENT OF JOSEPH H. DETWEILER, VICE PRESIDENT AND
Senator CARLSON. If you will, the statement will be made a part of the record and you may proceed in any way you want to.
(The statement of Mr. Detweiler, in full, is as follows:)
FULL TEXT OF THE WRITTEN STATEMENT BY JOSEPH H. DETWEILER, VICE PRESIDENT
AND GENERAL MANAGER OF ARGUS CAMERAS, DIVISION OF SYLVANIA ELECTRIC PRODUCTS, INC.
Mr. Chairman and members of the committee, my name is Joseph H. Detweiler. I am vice president and general manager of the Argus cameras division of Sylvania Electric Products, Inc. I am here on behalf of Argus, an organization that is representative of the still-camera industry. We sell still cameras, still and motion picture projectors, exposure meters, viewers, various related photo graphic accessories and, from time to time, precision optical military instruments
Argus does not oppose reciprocal trade in principle. We do object to the way it has been administered and we oppose H. R. 12591 because it contains provisions which could be damaging to the photographic industry in general and to Argus in particular. This is important not only because it affects the livelihood of 900 Argus employees, to say nothing of those employed directly and indirectly by other photographic companies, but, also, because the photographic industry is an industry vital to national defense.
We were the first American manufacturer of 35-millimeter cameras and over the years we have probably produced and sold more 35-millimeter cameras than any other company in the world. But today we are competing with 35-millimeter cameras imported under hundreds of different brand names, from many countries but principally from Germany, both East and West, and Japan. This damaging competition comes from those countries where the standard of living and wages are lower than in the United States. Our competitors in Japan pay wages equal to about 10 percent of ours, yet we are expected to compete with them on an equal footing and we are now faced with the possibility of even further reductions in tariffs which are already so low as to represent no major barrier.