for 19 percent of the claimants, and machinery and machine tool manufacturing contributed another 10 percent of the total.

It was found that almost two-thirds of these unemployed workers had been employed in manufacturing industries just before becoming unemployed.

These are industries which produce for national and international markets, and the result of the current nationwide recession has been felt by all of them. The combination has made the unemployment picture in Rhode Island dark over the past months and has renewed our deep concern for the textile industry and for action which will promote full employment on the national level.

4. As part of its foreign aid program, the Federal Government spent $95 million in the year ending June 30, 1957, for basic textile goods which were distributed overseas. Only $7 million of it was purchased in this country. Over $50 million was purchased in Japan, and the remainder purchased in other countries. The consequence of this policy is to subsidize foreign production at the same time reducing the export market for United States goods.

5. The textile industry has been especially subject to financial manipulations involving mergers or liquidations for the purpose of quick profits or tax avoidance. Mergers and liquidations, such as those carried out on a grand scale by Textron and its charitable trusts a few years ago, have had a detrimental effect, not only in Rhode Island, but also in many other communities in New England and the Nation. Although Federal action has been sought, and a Senate investigation was made, no action has been taken to eliminate present tax incentives for merger and liquidation.

These are five areas in which there has already been a joint call for action. Since its formation in 1952, the New England Governors' Textile Committee has urged changes in these policies as part of its excellent work on behalf of our textile industry.

It is my hope that one result of the work of this committee will be to add renewed effort toward their solution.

Beyond that, I hope that continuing positive action by the Federal Government to help the textile industry will be recommended. A Federal agency, as proposed by the Textile Workers Union of America, would be a means of advancing the cause of the textile industry in many important ways. It would be a healthy influence in protecting the industry by giving it a voice in the national administration. It would strengthen the textile industry through research and education. It would protect many job opportunities by fostering cooperation within the textile industry. It is my opinion that such an agency would definitely serve the public interest.

The textile industry is still one of the Nation's major industries. It should not be left to drift, driven by adverse and shifting national policies. What is needed is a comprehensive and consistent national policies which recognizes all aspects of the textile problem, the part textiles play in supporting community economies, and providing jobs, the need for greater stability of operating levels, in the interest of efficiency and steadier employment, the need for modernization of plant and sufficient growth to maintain a healthy industry which can meet future demands for domestic needs and possible defense requirements, the need for dependable and adequate measures of

protection against floods of cheap foreign imports, if a substantial portion of the Nation's textile industry is to survive.

Textile communities suffer serious depression and their living standards fall when a mill closes. The textile workers are entitled to maintain that same dignity and self-respect which is granted to loyal employees by other industries such as the auto industry and the steel industry. The purchasing power of textile workers is just as important an asset to the national economy and to the State's economy as are the wages and salaries paid to any other group. When it is clearly and continuously in jeopardy, action is warranted to protect it. It has been my experience that the textile industry, both workers and management, have been able to make substantial progress for their common good when they have been encouraged to work together in solving their problems. One of management's goals in seeking profitable operation is an opportunity to assure its workers a fair and adequate compensation for the work they perform.

One of labor's goals is a properous industry which can provide job opportunities for its membership. It is government's responsibility to assure full employment and fair labor standards. It therefore appears to me that there is a need for government action not only to eliminate inequities and provide consistent national policy, but also action which will foster greater cooperation and mutual understanding between textile employers and their employees. Teamwork should be encouraged. It has been tried in Rhode Island, it has worked to the advantage of all.

I would like to assure this committee that the State of Rhode Island is ready and anxious to help in any policies which are determined to be in the best interests of the textile industry. We have, on our own initiate, done many of the things which have been necessary to make this State attractive for industry.

We have established a State agency for promotion of industry and for aiding local communities in planning for industrial growth. We have embarked upon an extensive program of new, modern highways designed to aid the flow of goods to market.

We have increased our expenditures for education so that our citizens will be able to assume leadership in the new and more technical age of tomorrow. We have initiated flood-control projects, which, with Federal cooperation, will protect business investment in areas subject to flooding. We are completing the Blackstone River floodcontrol project in Woonsocket and are awaiting the first funds and detailed planning contract for the Fox Point Hurricane Dam. We have been ever-mindful of the importance of a competitive tax structure. Local communities have displayed an increasing interest and initiative in industrial development. I had the opportunity, recently, of taking part in the ground-breaking ceremonies for the second manufacturing building in the Woonsocket Industrial Park. This industrial park is sponsored by the Industrial Foundation of Woonsocket with funds which, in part, were raised by voluntary contribution in the community.

There have been encouraging signs during the recession period that the efforts of the people in Rhode Island who have faith in their State have begun to pay dividends. The rate for insured unemployment for Rhode Island has followed very closely the national average;

an improvement over past recessions when Rhode Island's unemployment was, at times, double the national rate. New plants have located in the State in the past year in greater numbers. Vacant textile mill space is being occupied by diversified industry. General Transistor Corp., for example, has located in the former Dunn Worsted Mill in Woonsocket, which will provide 500 jobs with a good possibility of expansion in the near future. New construction and employment in construction are at peak levels.

Nevertheless, Rhode Island cannot afford to lose even one textile job if it can be helped. The solutions to the textile problem undoubtedly are not easy. Very few are within the jurisdiction of State government action. Some, such as Federal tax revisions, are not within the jurisdiction of your committee. Some are not within the jurisdiction of the Congress. But I, for one, would welcome a comprehensive report from this committee directed to all levels of government-local, State and Federal; administrative, as well as legislative, and directed to all groups who have an interest in the problem-to management, to labor, and to the many communities in which the textile industry plays an important role.

Senator PASTORE. Thank you very much, Governor.

Senator Thurmond?

Senator THURMOND. It has been a pleasure to be in your State, and I want to congratulate you upon the fine progress being made. Governor ROBERTS. Thank you, Senator.

Senator THURMOND. It is a pleasure to come to the home State of my colleague, Senator Pastore, who is an able, dedicated, public servant. I am pleased to be here.

Governor ROBERTS. Thank you very much, we are very happy that you are here, Senator.

Senator PASTORE. Thank you very much, Governor.

Mr. Robert F. Eddy.

STATEMENT OF ROBERT F. EDDY, PRESIDENT, YARN DISTRIBUTORS

ASSOCIATION

Mr. EDDY. Mr. Chairman, as president of the Association of Yarn Distributors, which is national in scope and represents better than one-third of all the cotton yarn sold in this country, I wish to urgently request that the Government do something to slow down the imports not only of yarns, but also of woven and knit goods fabrics coming into this country.

These imports are causing a great loss of business in sales of yarns which hurts the spinners we represent and which has put some of them out of business. It is a well known fact that most of the larger mills in New England have liquidated or have consolidated their manufacturing in other parts of the country with the result that the textile industry in this area is certainly not comparable in importance with what it used to be prior to World War II.

We recognize that not all of this is due to the foreign import situation, but certainly a large part of it is.

A large percentage of the customers serviced by our members are small businesses making woven, braided, and knitted fabrics. Many of them have been forced to drop out some of their lines of manufacture, which has caused them to employ fewer workers with the

resultant increase in unemployment rolls. Many of these know no other jobs and cannot readily fit into other industries.

Other associations may supply you with more accurate statistics than I am doinng here, but the bulk of the customers served by the members of our association are small businesses located throughout the whole of the United States-most of them employing 100 or less people. These small concerns in the aggregate would employ somewhere between a quarter of a million and a half million people, and the spinners whose yarns we sell would employ nearly an equal number.

The total textile industry perhaps is 4 to 6 times the segment for which I am speaking, and if these imports help to create a loss of employment of even as little as 10 percent, you can see how it affects the national economy and puts us all at a very great disadvantage. As these mills liquidate, equipment is sold abroad-purchased in many instances with American dollars-with their products coming back to haunt us. On one hand, through our churches and other charitable organizations, we are asked to give all the dollars we can spare to help the less fortunate parts of the world; and on the other hand, goods from these same nations are being imported into this country at prices less than we can manufacture them, thus putting us in the position of being squeezed from both directions.

We realize that we are living in a true world economy, but we must recognize that if different important industries such as textiles become hopelessly crippled, sooner or later we will discover it will be almost impossible to bring them back to a nomal level, with the final result that our country, itself, will have been badly damaged, almost irreparably in case of national emergency.

Anything that you good honorable members of this committee and your colleagues in both the Senate and the House can do to help us will be of service, not only to the textile industry, but we believe to the United States as a whole.

Senator PASTORE. Thank you very much, Mr. Eddy.

Senator THURMOND. Thank you, Mr. Eddy.

Senator PASTORE. It is now almost 25 minutes to 12. We will recess to a quarter to 12 and then resume again until 1 o'clock, recess, and then resume at 2 o'clock this afternoon. This is being done to allow all to stretch their legs.

(Short recess taken.)

Senator PASTORE. The hearing will please come to order.

We are rearranging the seat for the witness so that whatever he says, or she says, can be heard by all in the room.

I understand there have been some complaints that those in the rear of the room can't hear the witnesses. There is nothing more uncomfortable than to come to a meeting and not hear what is being

said.

Our next witness is Mr. Sgambato. You may proceed.

STATEMENT OF FRANK SGAMBATO, INTERNATIONAL VICE PRESIDENT, UNITED TEXTILE WORKERS OF AMERICA

Mr. SGAMBATO. I would like to have this brief entered into the record. There is no need of explaining the brief, it deals with imports and exports, but I would like to make a final statement for our organi

zation, and the position that our organization has endorsed, and I would like to read that into the record, and submit this as a brief from the United Textile Workers of America.

Senator PASTORE. Without objection, it is so ordered.

Mr. SGAMBATO. In presenting this brief to your committee, I need not quote figures with respect to the loss of textile plants and the loss of thousands of jobs of textile workers in the New England States, because you have been supplied with this information by representatives of labor and industry in the various segments of the textile industry. One of the most pressing problems we face today is the import of goods from foreign countries.

The Commerce Department study on this question shows, and I quote from the Daily News Record, Fairchild News Service, September 11, 1958:

1954-57: Exports of soft goods hold steady, imports up: United States exports of fabrics, apparel, and related manufacturers remained relatively stable between 1954 and 1957, but imports rose sharply. The study also shows that Japanese exports to the United States of these manufactures more than doubled in the period.

The report, prepared by the Bureau of Foreign Commerce, puts United States exports of these goods at $494.5 million in 1954, $474.4 million in 1955, $478.6 million in 1956, and $493.8 million in 1957. The figures do not include cotton cloth shipped to the Philippines for manufacture and return to this country.

Imports from Japan totaled only $62.1 million in 1954, compared with $116.6 million in 1955, $163.2 million in 1956, and $156.2 million in 1957.

United Kingdom exports to the United States in the 4 years totaled $70.4 million, $80.3 million, $83.4 million, and $73 million, respectively. For other European countries the totals were $101.8 million, $126.6 million, $145.2 million, and $143.9 million.

Bureau of Foreign Commerce estimated that the value of United States production was about $15 billion in 1954, $16 billion in 1955, and $16.5 billion in 1956. No estimate was available for 1957.

Exports of cotton fabrics, apparel, and related manufactures were valued at $262.4 million in 1954 and fell to $239.9 million in 1955, $236.9 million in 1956, and $249.9 million in 1957. Imports, however, rose from $72.9 million in 1954 to $116.3 million in 1955, $147.5 million in 1956, and $130.7 million in 1957.

Imports of these goods from Japan amounted to $25.5 million in 1954, $60.3 million in 1955, hit a high of $84.1 million in 1956, and dropped to $65.7 million in 1957.

The United Kingdom accounted for $8.4 million, $10 million, $11.5 million, and $9.6 million in the 4 years, while imports from other European countries totaled $29.4 million, $33.8 million, $36.9 million, and $35.9 million, respectively.

IMPORTS FROM JAPAN CLIMB

United States exports of wool fabrics, apparel, and related manufactures amounted to $8.7 million in 1954, $7.8 million in 1955, $8.3 million in 1956, and $8.8 million in 1957. In the 4 years, imports totaled $90.3 million, $118.7 million, $145.3 million, and $143.1 million. Imports from the United Kingdom amounted to $39.4 million,