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United States production of movable goods and the proportion exported
Sonroe: V. S. Department of Commerce, Exports in Relation to United States Production, 1956, World Trade Information Service, pt. 3, No. 57-36.
Boston, Mass., June 24, 1958. Senator Habry F. Btbd,
Chairman, Senate Finance Committee: Were it not necessary to leave for Europe, I would request permission to testify before your committee on behalf of the President's reciprocal-trade program. Please refer to my testimony before subcommittee of House Ways and Means, December 13, 1957, and before House Ways and Means on March 12, 1958, because I believe that dividing the free world economically by trade barriers makes more difficult international political problems and mutual security. I urge the President's program be passed without crippling amendments. Specifically, I recommend we continue to reduce trade barriers, including tariffs, and that the President's trade-agreements authority be extended at least 5 years, with authorization to reduce rates, as requested by the administration. I strongly believe a liberal trade policy will contribute greatly to economic well-being of our people and those throughout the free world, and wish to have my position filed for the record of your committee.
Thomas D. Cabot.
Gaxveston, Tex., June S3, 1958. Hon. Harry F. Btbd,
Chairman, Senate Finance Committee,
Dear Senator Byrd: The purpose of this letter is to express my support for H. R. 12591 as passed by the House of Representatives. I wish this year's renewal of the Trade Agreements Act could be much stronger than what that bill provides. H. R. 12591 is the least we can do in the field of foreign-trade policy. I strongly oppose any more weakening amendments—especially the substitution of a 3-year extension for a 5-year extension.
From every standpoint, there is a real need this year for a Trade Agreements Act that measures up to the reality of the challenge the Nation faces, both from the Soviet economic threat and from the fast-moving pace of economic developments in the free world itself. In the face of that challenge, even the kind of trade-agreements legislation passed in 1955 would not be adequate. It is nothing short of fantastic that, after nearly 25 years, the program of trade liberalization is still fighting for its life and that now, of all times, the threat to is continuation in a viable form is greater than it has ever been.
Why is this so? One might think that the American economy and the freeenterprise system that made it great were on the skids and did not have what it takes to move upward and onward to ever-rising standards of living. It certainly must look that way to our friends abroad. If more restrictive for
eign-pollcy legislation is the decision of the Congress this year, the rest of t world has every right to say, among other things, that the American ft* enterprise system isn't all it's cracked up to be. If the American econo cannot afford a iwlicy of trade liberalization, who can? The result of imp restrictions would be harmful division in the free world at a time when i free world ought to be united in its waging of cold war with the Soviet bh
To pass trade-policy legislation more restrictive than provided in the Hoi bill would be a disservice to the American people, a tragic misreading of wl it is that makes the American economy tick, a totally inaccurate portrayal the dynamics of our free-enterprise system, and an irresponsible act when against the Nation's foreign-policy needs in economic, political, and milita terms.
The bill you have before you is, in many respects, a forward step in the din tion I believe we ought to be moving. I refer specifically to the 5-year extensi and the proposed negotiating authority for the President. However, the pf posed shift from 1945 to 1934 as the base year in escape-clause action is m unfortunate. I feel that the present trade-agreements program is loaded enough baggage of weakening amendments, as it is, without another weaken! amendment tacked on. I am amazed to find that even this bill — which tee intact all the weakening amendments of the past and adds a new one of serioi proportions — is, itself, in jeopardy.
To say that this bill is in jeopardy is to say that the economic underpinning free-world unity is in jeopardy, that an expansion of our vitally important expi trade is in jeopardy, that our effort to keep in step with the emergency of c toms unions in Europe and elsewhere is in jeopardy, and that an important pi of our program to meet the Soviet threat is in jeopardy.
There is no justification for restrictive trade policies when one considers these things that are at stake. There is, in fact, no basis for a restrictive tM policy when one considers the fundamental economic strength of our country
I quite agree the Nation should do everything it can-*o lift itself ont of recession in which we now find ourselves. But import restrictions are n dranee to this objective, not a remedy. Nor are they the way to meet basic problems of those few industries — or, I should sny, those few compania that are able to prove that their problems are caused, in whole or in part, import competition. Methods that are more sound and more effective ought be used. Even where import restrictions bring temporary relief, we must overlook the impact of such a policy on the rest of the American economy, M immediate and for years to come.
The Nation needs a stable foreign-trade policy that accurately reflect*-! capabilities of our free-enterprise system. The bill before you — -H. R. 1259P the minimum needed to meet that standard.
With best wishes, I remain,
Statement Of R. W. Bissonnette, Of Standard Card Clothing Co., Springs, Conn., President Of The Card Clothing Manhfactukess Ciation
This statement is made on behalf of the Card Clothing Manufacturers As»nri tion, whose members manufacture 90 to 95 percent of the card clothing made the United States. (Card clothing is a specialized product used in the nmnofl ture of textiles. It is decribed more fully below.) At the outset, we ackn'i edge that the economic strength and military security of the United Stl( depend in part upon the economic health of other free nations, and that dep«l in part upon vigorous, two-way trade among nations. Such trade cannot' attained if unreasonable tariff barriers nre erected by any one nation.
It is equally true, however, thiit a small group of industries whose prod* are essential to the national defense exists. The demand for these products «i however, in time of peace, be met entirely by imports. Protection must. tl)W fore, be provided for these industries by tariffs, or the national-defense pro?ra will be severely weakened. The manufacture and sale of card clothing is « an Industry.
Card clothing is so called because it is used to cover, or clothe, parts carding, napping, or bru.sb.ing ninchines that come in contact with fibers » textiles. Carding machines straighten, comb, and otherwise prepare test fibers for spinning into yarn. Napping or brushing machines raise the ends of fibers in manuftctured cloth. Card clothing must be used with fibers of all kinds, natural (including asbestos) and synthetic. Card clothing consists of wire teeth inserted in a foundation of cotton, wool, or linen cloth or into felt, rubber, leather, or combinations of these products. Card clothing is, in other words, a belt with metal bristles at distances from one another that vary according to the use to be made of the clothing. The overall demand for card clothing is not great, but textile manufacturers must have a continuous supply. New textile machinery must have card clothing, and that on existing machines must be replaced from time to time as it wears out.
The card-clothing industry is not only relatively small; it is also highly specialized with respect to machinery, personnel, and materials. Machinery to manufacture card clothing, called card-setting machines, is specially made. If any existing machines were to be scrapped as a result of financial difficulties in the industry, they could not be replaced quickly from sources in this country. They would have to be specially built, probably with great difficulty in finding parts and materials.
The problems of specialized personnel could be even more critical. Card setters, who operate the card-setting machines, must be trained for the work for from 3 to 5 years. In addition, setters must have the proper temperament to become competent in the work. It is estimated, on the basis of industry experience, that, of each 100 trained machinists, only about 10 will become successful toolmakers, and, of these 10, only 1 is capable of mastering the trade of card setting. Thus, any decline in the industry that would bring about a loss of skilled personnel, or discourage the entry of replacements for men who retire, could injure the industry almost irreparably.
In similar vein, the materials used to make card clothing are highly specialized and are available from few sources. There are only 2 sources of supply for foundation materials and 2 major sources for card wire. Any decline in the industry could result in the drying up of these sources of supply, with corresponding difficulties in trying to revive them during a national emergency. A defense emergency could, past experience indicates, increase the demand for card clothing in the United States by 50 percent. This increase would result partly from stepped-up production in the textile industry, and partly from conversion by many textile mills from one product to another. Conversion of a carpet mill to the production of blankets, for instance, would require the installation of a different type of card clothing. The industry must, then, be kept in a healthy condition so that it can meet the responsibilities that would be imposed on it by an emergency.
Past trade agreement concessions granted by the Government on card clothing have already jeopardized the industry by permitting imports that can be sold at prices below those at which the product can be manufactured in this country. The following table will show the decline in domestic production and the increase in imports of card clothing:
In 1957, the square feet imported was 22.85 percent of the amount produced by the association's members, and the dollar value of the imports was 11.66 percent of the dollar value of the domestically produced product. The value of the imports was $2,477 per square foot, and that of the domestic product was H85 per square foot. These figures speak eloquently for themselves.
We realize that the question of revisions of reciprocal trade agreements and tariff rates is not before the committee. We have, however, gone into some detail in stating the nature of our industry and giving production and import figures so that you may better understand the need for strengthening the perilpoint, escape-clause, and national-defense provisions of the Reciprocal Trade Agreements Act.
27829—58—pt. 1 52
We approve the manner in which H. R. 12591 requires more extensive hearings than does the present law in the peril-point and national security provisions, and the greater authority given the Tariff Commission in connection with escape-clause investigations. We ask, however, that authority be vested in Congress to overrule the President by a majority vote if he does not accept the findings of the Commission under the peril-point and escape-clause provisions. We also ask that section 8 of H. R. 12676, relating to imports that threaten to impair the national security, be substituted for section 8 of H. R. 12591; and that the President's authority under the reciprocal trade measure be extended for 2% rather than 5 years.
This statement is submitted on behalf of the Card Clothing Manufacturers Association, the membership of which includes the following manufacturers of card clothing:
American Card Clothing Co., Fall River, Mass.
All but one of these companies (Davis & Furber Machine Co.) are engaged only
R. W. BlSSON NETTE,
President, the Card Clothing Manufacturers Association.
Wilbur-ellis Co., San Francisco, Calif., June 30,1958. Mrs. Elizabeth B. Springer,
Chief Clerk, Committee on Finance,
Senate Office Building, Washington, D. C.
Dear Mrs. Springer: I am writing this letter to express my support for H. R. 12591, the bill to extend the Trade Agreements Act for another 5 years. My support is based on a conviction that such a renewal and the negotiating authority the bill authorizes are essential if we are successfully to cope with the many new and rapid developments that are taking place and will be taking place in the countries with which we do business.
The Nation's foreign trade policy, to have any meaning in the world of today, must be based on the premise that expanding export business is vitally important to the growth of the American economy; that expanded exports under private auspices requires expanded inntorts under private auspices unless Government is to be expected to pick up the tab for an increasing volume of the business we must do with the rest of the world.
If one assumes the premise of a growing economy—a premise which I am sure you and the other members of the Senate will accept—then one must conclude that a world trade policy in the national interest is one that promotes the Nation's two-way trade. It is much easier for people to understand the benefits to the American economy from exports than from imports. The growing dependence of a growing economy on imports of raw materials in order to supplement the depleting, higher cost supplies from domestic sources is one of the facts of life gradually dawning on public awareness. What is not so clear to the general observer is the benefit to be gained from competitive imports—manufactured or in raw-material form.
Competition and the response to competition are among the most important factors contributing to the development of the American type of free enterprise system and to the rapid growth of our economy. Competition from within our country and from outside producers stimulates new ideas and new methods. The American consumer benefits, and the servicing of his needs and appealing to his choice are an essential part of the dynamics of the American economy as we know it. Imports are also the most important source of the dollars foreign nations need to finance the purchases they make in our country.
Exports are of vital importance to large numbers of American producers in both industry and agriculture. The importance of export business as a prop to many of our industries during a period of recession in our economy was evident in the recessions of 1953-54 and 1957-58.
Thus preservation of the gains we have made in deevloping our country's foreign trade and recording even greater achievements in that direction should be the objectives of a trade policy in the national interest. A recent development which is cause for serious concern to all who want to preserve and improve our country's position in world trade is the evolutiton of the European Common Market and the indications of similar arrangements in other areas. In view of the timing of the European Common Market, a 5-year extension of the Trade Agreements Act is necessary for a businesslike effort on our part to try to negotiate downward the external tariffs of those western European countries in phase with the cuts that will be made in the internal tariffs affecting trade within the area. Anything less than a 5-year extension would either confront our negotiataions with the expiration of the act in the middel of their negotiations, or would leave the executive branch, as well as the countries with which we trade, with little confidence as to the course of our trade policy. The pace of developments abroad is much too rapid for us to resort to the shortterm hrenewals we have had in the past. Such renewals do not provide the flexibility and confidence indispensable for businesslike decisions in foreign trade— whether by Government or those engaged in foreign trade.
H. R. 12591 is not in every respect the kind of bill we would have preferred as the way most effectively to promote United States foreign trade. But on the whole it will permit us to continue in meaningful form a trade policy that has proved its value for the past 24 years. We therefore urge the Senate to support at least that kind of renewal this year. Very truly yours,
Bbayton Wilbub, President.
Federated Department Stores, Inc.,
Cincinnati, Ohio, June SO, 1958. Senator Harry Flood Byrd,
Chairman, Committee on Finance,
Senate Office Building, Washington, D. C.
Dear Senator Byrd: As a retail merchant for well over 50 years, I wish to submit for inclusion in the record this statement in support of the Trade Agreements Extension Act of 1958.
I am chairman of the Board of Federated Department Stores, Inc., a corporation that has 10 divisions operating department stores located largely In the eastern and southern parts of the United States. These stores include Abraham & Straus, Bloomingdale's, Milwaukee Boston Store, Burdlne's, Filene's, Foley's, Lazarus', Sanger's, Shillito's, and nine smaller stores in the western part of the United States which are operated under the name of Fedway. For the most part, these stores are locally managed and sell everything from lawumowers to jewelry, ready-to-wear and fine foods. Many of my associates in management and my own family have been retailers for generations and we are proud of our long service to the American consumer.
The debate over tariffs and reciprocal trade has been carried on almost exclusively from the point of view of producers—those who fear injury from competitive imports and those who are seeking additional markets for their products abroad. Strangely enough, there has been hardly a word about the interests of the American retailer and the American consumer. Not everyone is engaged in manufacturing, but every member of the American public is a consumer. I feel certain that your committee will want to give careful consideration to the interests of consumers and retailers.
Every American purchaser from retail stores has a stake in reciprocal trade. In the first place, failure to pass the Trade Agreements Extension Act would make it difficult for consumers to purchase many products which now contribute greatly to their way of life at home and at work. In my grandfather's day, over n century ago, American families of ordinary income enjoyed little variety and choice in their food, dress and household furnishings. Todny the American family's standard of living is enriched and augmented by products from all over the world as well as America. In the Federated stores we sell French wines. Swedish silver, tropical foods. Italian leather products. English tweeds and woolens, and fabrics and rugs from the Orient. We sell these things not to the rich alone, but also to the average family. For such products have become a part of the new America in which more and more people have been able to demand more than the bare essentials of living.