DEFENSE PRODUCTION ACT AMENDMENTS OF 1952 WEDNESDAY, MAY 7, 1952 HOUSE OF REPRESENTATIVES, COMMITTEE ON BANKING AND CURRENCY, Washington, D. C. The committee met at 10 a. m., Hon. Brent Spence, chairman of the committee, presiding Present: Chairman Spence (presiding), Messrs. Brown, Patman, We will resume the hearings on the Defense Production Act. The CLERK. The first witness is Mr. Raymond Boulais on behalf of the William Prym Co. of Dayville, Conn. STATEMENT OF RAYMOND BOULAIS, PRESIDENT OF LOCAL UNION NO. 947, WILLIAM PRYM, INC., DAYVILLE, CONN. Mr. BOULAIS. Mr. Chairman and members of the committee, my name is Boulais. I am here to speak on behalf of all the workers of my local union No. 947, of which I am president, and which is a local of the CIO Textile Workers Union of America. The workers of my local are employed by William Prym, Inc., of Dayville, Conn., which company is engaged primarily in the manufacture of pins (safety pins and ordinary straight pins). I am here to urge the inclusion of the Ramsay bill (H. R. 6843) as an amendment to H. R. 6546, a bill to extend the Defense Production Act of 1950. I am not qualified to discuss the technical provisions of this proposed amendment but, very simply, I understand it provides for a limitation on imports comparable to the cut-back in our own production imposed on us by NPA and its restrictions on the use of metals. It would preserve our pre-Korean competitive relationship with imports. I am qualified to tell you what the combination of curtailed production in our plant together with unlimited imports is doing to our employment. Employment in our manufacturing plant has been very severely curtailed by the restrictions imposed upon the company by NPÅ cut-backs in our use of metals such as steel, brass, and nickel for plating. These cut-backs in metals use have severely affected employment in the plant but we are even more seriously affected by ever-increasing imports of foreign pins which are now rushing in to take over that part of the American market which the NPA cut-backs make it impossible for us to supply. Unless a parallel limit is put on imports similar to the limit on our American production, a substantial portion of our normal market in the United States, if not all of it, will be irretrievably lost to the cheap foreign imports. In addition to being cut back in the number of pins we can produce, the quality of our product has been reduced substantially by the fact that NPA restrictions on the use of nickel have forced us to turn to the very unsatisfactory substitute of plating them with zinc. While this is true of our American production, foreign producers in England, Germany, and Czechoslovakia seem to have an unlimited supply of nickel for plating pins and the imports are consequently of substantially better quality than those now being produced in America with zine plating. Our plant and other American plants just cannot compete with these unfair advantages of the foreign producers and we think that it is only fair that if the defense effort requires a cut-back in our own production and employment it should require a parallel cut-back in imports in order to retain our relative competitive position with imports and foreign employment during this emergency period. Eighteen months ago our plant employed approximately 72 employees on the production of pins, but because of NPA cut-backs and unfair foreign competition the number of employees has been reduced to 37 almost a 50-percent reduction. The present number of employees, constitutes merely a skeleton force in our pin-production operation and even so it is becoming necessary to reduce the number of hours employed by these few people. For example, our plating department which normally worked a 9-hour day now works only 8 hours per day and our shipping department which normally worked 5 days a week now works only 4 days a week. Unless some relief is forthcoming it is apparent that the working hours of these remaining employees will have to be further reduced if not eliminated. The Dayville area has a substantial surplus of labor and has been declared an area of labor surplus defense manpower Order No. 4. Unemployment is already high. If we lose our jobs in pin production, we have no place else to go and no prospect for reemployment. This is especially true of unskilled labor, which constitutes 75 percent of our force. The situation in my union is drastic as it is in many other local unions in Connecticut. We sincerely hope that this committee will give us some relief in the form suggested by Congressman Ramsay in his bill, H. R. 6843. This bill would only enable our employees and other employees on similar products in Connecticut to maintain their pre-Korea relative competitive position and that seems to us only fair. Certainly we are contributing our share to the defense effort in many ways. Otherwise, when the emergency is over and when the need for full employment will be the greatest, American producers of pins and other metal products, cut back during the emergency, will not be able to regain their fair share or their pre-Korea share of the American market. They will be unable to employ the people who will be laid off by defense plants at that time. We hope the committee will adopt this Ramsay amendment and help preserve our jobs for the long-run pull. We want to thank the committee very much for this opportunity to express our views. The CHAIRMAN. Are there any questions? Mr. COLE. Your only point, then, is that you want the American market maintained, proportionately, as it was prior to the Korean situation? Mr. BOULAIS. Well, let's put it this way: If we are cut back 50 percent by the NPA, I should think that the imports should be equally cut back that much, or whatever the percentage is. Mr. COLE. In proportion? Mr. BOULAIS. That is right. The CHAIRMAN. Your contention is that by reason of allocations and priorities, your materials have been reduced, and that there should be a corresponding reduction in the imports? Mr. BOULAIS. That is right, sir. Mr. DEANE. Mr. Chairman. The CHAIRMAN. Mr. Deane. Mr. DEANE. Mr. Boulais, about what percentage of the industry is represented by your area of the country, in the manufacture of safety pins and ordinary straight pins? Mr. BOULAIS. That I would prefer to let one of the following witnesses, who represents the Association of Pin Manufacturers, answer. I do not have any figures on that. I am just representing labor. The CHAIRMAN. What is the name of the corporation that you are employed by? Mr. BOULAIS. William Prym, Inc., of Dayville, Conn. The CHAIRMAN. If there are no further questions of this witness, we are very glad to have your views, Mr. Boulais. Your statement will be considered by the committee. Call the next witness, Mr. Clerk. The CLERK. Mr. John Breckinridge, appearing on behalf of William Prym, Inc., Dayville, Conn. STATEMENT OF JOHN BRECKINRIDGE, ON BEHALF OF WILLIAM PRYM, INC., DAYVILLE, CONN. Mr. BRECKINRIDGE. Mr. Chairman and members of the committee, my name is John Breckinridge, an attorney with the law firm of Pope, Ballard & Loos here in Washington, D. C. I am appearing here today on behalf of William Prym, Inc., of Dayville, Conn., which is a manufacturing plant engaged primarily in producing pins-safety pins and ordinary straight pins. Mr. Hans Prym, president and owner of the company, had intended to appear here today but was unable to do so and asked me if I would appear for him. We appear for the purpose of strongly urging the committee to include in its bill extending the Defense Production Act of 1950 the amendment proposed by Congressman Ramsay of West Virginia in his bill H. R. 6843. I believe that proposed amendment is before the committee for consideration. A companion bill has been introduced in the Senate by Senator Capehart of Indiana in the form of S. 2791. I would like to introduce a copy of the Ramsay bill at this point, and I think it might be well to read the bill. It is quite short. The CHAIRMAN. You may incorporate the bill in the record, if you desire. I think most of the members are familiar with the bill. discussed it before. We Mr. BRECKINRIDGE. I would like to point out that there are two technical errors in the bill. Page 1, line 3, "1951" should be "1950," and in the fourth line of the first page, "is amended by inserting (a)" should be "(e)" instead. (The bill referred to is as follows:) [H. R. 6843, 82d Cong., 2d sess.] A BILL To establish quotas on the importation of certain articles and products containing raw materials with respect to which priorities have been established, or allocations made, under the Defense Production Act of 1951 Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled. That section 101 of the Defense Production Act of 1951 is amended by inserting "(a)" immediately following "SEC. 101." and by adding at the end thereof the following new subsection: "(b) Whenever priorities are established or allocations made under section (e) with respect to any raw material, and such priorities or allocations operate to limit the production of articles or products produced in the United States, the President shall by proclamation limit the importation, during the period such priorities or allocations are in effect, of any article or product in the manufacture or production of which such raw material is used to 50 per centum of the average annual imports of such article or product during the calendar years 1947 through 1949: Provided, That the Tariff Commission has reported to the President that a substantial portion of the American producers of such article or product, or an article or product competitive therewith, has requested such limitation on imports: Provided further, That the Secretary of Defense has not certified to the President that the American production of such article or product is insufficient to supply the essential defense needs therefor. Upon the application of any substantial American producer, the Tariff Commission shall publish the fact of having received such application, shall hold a public hearing thereon and shall report the facts to the President within sixty days of the receipt of such application. Such report to the President shall include the article or product on which the import limitation has been requested, whether it contains any raw material which is under priority or allocation control, whether a substantial portion of the American producers thereof have requested the above-specified import limitation, the maximum quantity of imports which would comply with said import limitation and such other facts as the Tariff Commission deems appropriate. A copy of said report to the President shall be submitted to the Secretary of Defense. If said report of the Tariff Commission indicates that the above-specified conditions have been met by the applicant and the Secretary of Defense has not certified to the President that the American production of such article or product is not sufficient to meet the essential defense needs, the President shall proclaim such import limitation within thirty days of his receipt of the report from the Tariff Commission. If the Secretary of Defense has certified that the American production of such article or product is insufficient to meet the essential defense needs therefor, the President shall, by proclamation, limit the imports of such article or product to such quantity as the Secretary of Defense certifies as necessary, in excess of American production, to meet the essential defense needs. All reports to the Tariff Commission and all certifications of the Secretary of Defense made hereunder shall be made public at the time of their issuance." Mr. BRECKINRIDGE. Mr. Boulais, the previous witness here this morning, who is president of the local union working in the Prym manufacturing plant, has explained to the committee the adverse effects upon employment brought about by the combination of restricted American production and unlimited imports. Of course, the adverse effects upon management and its investment is equally as bad. These are the conditions necessitating the Ramsay amendment. However, I do not want to go into a detailed discussion of the facts and the financial condition of the Prym Co. but would like to confine myself to a discussion of what we feel to be the purposes and intent of the proposed Ramsay amendment (H. R. 6843). This amendment is very simple in that it would require a cut-back in imports comparable to the cut-back in American production of nonessential, nondefense civilian items and would merely retain the pre-Korea relative competitive position. Also the procedure is very simple of operation. This proposal merely sets up machinery whereby a domestic industry, when needed, can protect and maintain its relative competitive position with imports while the domestic production of the article is being limited by NPA allocations of materials. At this point I would like to point out the complete difference of the principles and philosophy of this bill from that of section 104 of the Defense Production Act which limits the imports of fats and oils and dairy products. That section is based on providing a limitation of imports when such imports would reduce production in the United States of an essential product or would interfere with the orderly marketing of that product, which is essential to defense. Whereas this bill says that when our Government artificially restricts the production of a nonessential civilian product in the United States, by restrictions on the use of metal, then imports of that product should be comparably restricted in order to maintain the relative competitive position. There is nothing in the proposal to restrict imports in such a way as to change or improve the competitive position of domestic producers. Actually it favors imports. There is nothing in the amendment that would in any way limit the imports of any raw material or the imports of any product or article made therefrom which the Secretary of Defense certifies as essential to the security and defense needs of the United States. There is nothing in the bill which operates automatically to limit. imports. It provides for a limitation only when the American production of a nonessential product is limited by raw materials allocations by NPA and only when and if a substantial portion of the American producers of such article or product applies to the Tariff Commission for such limitation. It is assumed that the Tariff Commission would determine "the substantial portion" on the basis of unit volume or dollar volume of production rather than the number of producers. Presumably, where it could be shown to the Tariff Commission that a majority of the American producers, by volume did not desire the import limitation it would not be necessary to, impose such a limitation. The proposed amendment adopts the fair procedure and sets up machinery for operation thereof which the NPA carefully uses and administers in order to maintain the relative competitive position between different producers of a given product in a given American industry. It certainly would be unfair for NPA to prohibit one producer of X commodity from further production and at the same time permit his American competitor to continue production and take over the market. Obviously the first American producer would be unable to regain all or part of his market after the emergency is over. The same |