(The document submitted by Mr. Rockwell follows:)

List of correspondence pertaining to Japanese yarn imports, by the Allendale Co., Centredale, R. I.

STATEMENT OF HORACE C. WESTON, MAYFLOWER WORSTED CO.,

INC., KINGSTON, MASS.

Mr. WESTON. My name is Horace C. Weston. I am the treasurer of the Mayflower Worsted Co. of Kingston, Mass., and a director of the National Association of Wool Manufacturers. The firm I represent is a small one employing less than 150 persons, characteristically small it would be fair to say since by this measure well over half the establishments in our industry are smaller still.

It is heartening that the Congress, through the medium of this subcommittee, has made it possible for even the smallest to be heard, not merely to promote our individual interests, but also to present the case of what is in total a substantial segment of our industry. I am certain that many of these smaller manufacturers occupy a position comparable to my own firm as the largest taxpayer and largest employer in the community.

If the Mayflower Worsted Co. is typical in size, it is becoming constantly less so in the character of its operations-the weaving and finishing of high-quality high-cost goods for the men's and women's

apparel trade. This is not due to any change by my firm but to the decimation of the mills that only a few years since formed an imposing list of successful, independent producers. This disappearance by liquidation, absorption into larger corporations, by dropping into lower quality categories has been due primarily to oppressive importation of fine fabrics.

It is undeniable that other factors have contributed to the fine manufacturers' misfortunes: First, since the last World War the fashion demands of the apparel markets have multiplied, introducing hazards never previously encountered.

Second, the acceptance of fabrics with substantial synthetic content has imposed impressive problems in research, production techniques, and marketing.

Third, improvements in machinery and the development of sectional advantages have required the investment of additional capital in new equipment and new locations. These are all factors

of domestic competition with which each unit in our industry small or large, must deal. However, it seems a bitter fate that while we are thus so heavily engaged in technical and marketing revolutions, while we must confront the civil conflicts of industry relocation, we should also be forced to join battle in an international trade war with everyone including our own nation apparently joined in opposition.

The relaxation of tariff protection that began in 1939 had its effects postponed by the abnormal war years but from 1947 on has increased spectacularly. While the fine goods producers had historically faced British competition-as late as 1946 they accounted for 85 percent of all imports-in recent years the French, the Japanese, and particularly the Italians have concentrated their export efforts in the fine field. Since these newer entrants enjoy much lower labor scales than the British and since the tremendous improvements in transportation have in effect reduced the distance their samples and goods must travel, the effect has been devastating.

It is true that the quota rate increase set at 5 percent of domestic production has set a limit to the steep climb in total imports but it has not preserved anywhere near 95 percent of the fine market for domestic producers as the figure would imply. In fact, a brief prepared by a group of fine goods manufacturers, of which our firm was one, under the guidance of Mr. Helfrish of the Forstmann Woolen Co., demonstrated that imports had captured a full 40 percent of this market based on very conservative estimates.

It should be noted that the Tariff Commission failed to entertain this brief on the grounds that the new quota system had not yet been tested, but only weeks later they found it reasonable to start a review of the workings of the new system due to the complaints originating with importers and their customers. It is impossible to escape the conclusion that the administrative elements in our Government have a sensitive ear for appeals from abroad but a deaf one for pleas for assistance that arise at home.

In the course of the many hearings that have been held on these matters a number of statements have been made that I believe to be erroneous and that if undenied, bear falsely the semblance of truth. It is claimed that truly fine fabrics are not manufactured in this country. This is not a statement of fact. There still remain mills,

my own among them, who are constantly in competition with imported fabrics and when we lose the business it is not because we cannot make the cloth but because we cannot meet the price-and live.

It has also been said that domestic mills will not operate on small lots as will the fine foreign manufacturers. I have personally established the fact that there are at least four concerns who can offer documentary evidence that they customarily conduct their business to accommodate their customers with minimum lots.

We are not seeking guaranteed profits; we do not expect prohibitive tariffs. We do need protection that has a reasonable relation to the labor differential foreign producers enjoy. We do need assurance that such protection as is afforded will be an established policy not subject to inconsistent variations at the whim of any individual or agency. We think the protection should be of such a character that the impact of imports is spread over many industries not concentrated on a few. Finally we hope that the protection can be in such a form with regard to textiles that it does not bear unduly on any one part of the industry.

Economists suggest that if an industry is found to be uneconomic in any location, it should transfer its capital to some more profitable enterprise. Textiles have already swallowed more than a fair share of that medicine-would it not be reasonable to suggest that the foreign textile producer desist from expansion and invest in other fields where his low labor costs assure him of a share in our markets, and in turn, let some of the competitive burden fall elsewhere.

Senator PASTORE. Is it your feeling, sir, that in this whole panorama of imports and exports that textiles have been at a tremendous disadvantage?

Mr. WESTON. Yes, sir.

Senator PASTORE. Would you elaborate on that? I have felt that. I have sensed it all during these hearings, principally for the reason as has been brought out here by Mr. Stanton, that it is an easy business for them to get into. It is a staple and maybe it is a necessity for their own people.

I realize, too, their pitch has been for the American market, especially some of the goods that have been copied and imported to us. I would like to have you elaborate upon that, because I think, myself, that we can give very serious thought to the proposition that while reciprocal trade is good-I mean if you want to take that position and there are many places where we can be very liberal in our reciprocal policy-the fact of the matter is that when it comes to textiles, we have got to be a little more selective. This is due to the fact that it is an industry that is easily gone into by most countries that are beginning to reconstruct and rehandle at the same time and it is becoming more widespread and all of this, of course, has been evidenced by the fact, as has been brought out here this morning, while our export used to be 15 percent of an entire product to foreign countries, we are now less than 5 percent.

If that continues, we won't have a foreign market of export at all, and what we do find is the reverse, that we have lost the foreign market because they can well take care of themselves and they can take care of themselves by overproduction, and they are trying to unload that overproduction on the American market.

Would you elaborate on that?

Mr. WESTON. First, the textile industry is one that exists in almost every nation of the world, so it is not a question of starting out something new. It does not require a tremendous investment in capital in order to start operations, and it has a very high labor content of its product. That means that immediately there is an advantage in the American market greater than there would be in industries where the labor content is less and the capital investment larger per unit produced.

In addition, there has been a fiction built up in years past that products from abroad were of a higher quality, and that has assisted them in entering the market. As if that were not sufficient, I think you will find, sir, that certainly in the case of France-and I am given to understand in the case of Italy and Japan-there is inducement by the government in a monetary form to urge the textile manufacturers to enter the export market.

Senator PASTORE. I heard in Japan from a man who is in the business and should have known that you could buy steel 50 percent cheaper in Japan providing you were using it for export. Do you say that even exists in the case of textiles-concessions of that kind?

Mr. WESTON. I believe there are concessions of that kind. I think most of the subsidies are indirect, but they are, nonetheless, real for that reason.

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

Mr. Hunter.

STATEMENT OF JAMES H. HUNTER, PRESIDENT, AMERICAN TEXTILE MACHINERY ASSOCIATION

Mr. HUNTER. I want to thank you and the committee, Senator Thurmond and Mr. Miernyk for the opportunity to be here today. My name is James Hunter, of North Adams, Mass. I am president of the James Hunter Machine Co. I am a member of the board of directors, and president of the American Textile Machinery Association in whose behalf I present testimony today.

The American Textile Machinery Association represents about 90 percent of the industry manufacturing capital equipment for textile mills. Bylaws of this association require that a member company be in the metalworking business, and manufacture a complete machine. Member companies may also manufacture parts for sale as replacement and repair, and so forth. ATMA membership includes all major concerns which manufacture carding and other preparatory, spinning and twisting machinery; winders, beaming, warping and slashing machinery; weaving, finishing, dyeing and drying machinery. Our associate members include those who manufacture auxiliary equipment for our machines.

The large majority of our membership is located in New England. Our industry, which had its beginning in this area 150 years ago, is an important segment of the economy of New England.

Upon our industry is reflected the feast or famine periods of our friends of the textile industry. Its problems are our problems and we are here today at your invitation to help you find a solution to the serious economic problem we and our customers now face; a problem

that has exerted a severe impact upon the communities in which our manufacturing operations are located.

On July 8, 1958, ATMA presented a statement to your committee on the state of obsolescence of textile equipment in the textile industry of this country. Today, at the request of the chairman, we present herewith additional information on technological developments of textile machinery which accelerate obsolescence of older machines. To simplify these data for the purpose of this hearing, the textile industry is broken roughly into three divisions: spinning, weaving, and finishing. We will discuss each of these divisions separately. Should members of the committee wish to question us on the information submitted, I have, accompanying me today, representatives of ATMA familiar with these respective fields of operation. As my company manufactures finishing equipment, I will endeavor to answer any question in that area for you.

As we testified at the July hearing, and as was brought out by Mr. Charles Kable, representing the American Cotton Manufacturers Institute, obsolescence of equipment is one of the most serious problems with which the textile industry is struggling, and one which must be rectified in order for the industry to survive in this era of rapid technological progress.

We wish to point out that this problem appears even more serious. when added to conditions described at previous hearings by representatives of the textile industry and previous witnesses today, as having resulted from the current tariff structure and foreign trade policies, the current cotton pricing system, and others.

As long as high wages and fine standards of American living continue, and we hope these standards will always continue, it will be imperative for textile mills of this country to obtain the maximum productivity efficiency possible. Through greater productive efficiency, lower per-unit costs may widen the profit margin of a mill and help to keep that mill in business. Gentlemen, when we consider the narrowness of that margin today: net profit (after taxes and deductions) of all textile manufacturing being 0.4 percent of sales, compared to 3.4 percent for all manufacturing (except newspaper), then everything possible should be done to bring the profit margin of the textile industry more in line with that of other industries of this country.

The unusually low profit margin now prevailing in the textile industry is completely inadequate to maintain an industry of its size and importance.

Figures on the number of textile mill liquidations-made mandatory by the combination of many economic disaster factors have been given to this committee previously. We are sure that the committee is aware that liquidation of a mill is determined only after serious, even strenuous study, and causes distress to those who have to liquidate and to those communities in which the mill and its jobs are located.

However, at prevailing margins of profit, capital funds from internal sources (depreciation or earnings) or from outside sources are not available, in many instances, to keep mills in operation. This is not, in our opinion, a reflection upon mill management, but is the result of the various combinations of factors given your committee by representatives of the textile industry.