Senator PASTORE. I want to take this occasion to thank all the witnesses who appeared before us today, and have given us the advantage of their experience and their wisdom and their knowledge of this very, very serious problem. Now, we will recess until 9:30 in Hartford, Conn., on Monday, next. (Whereupon, at 5: 45 p. m., the subcommittee recessed to reconvene at 9:30 a. m., Monday, September 22, 1957, in Hartford, Conn.) PROBLEMS OF THE DOMESTIC TEXTILE INDUSTRY MONDAY, SEPTEMBER 22, 1958 UNITED STATES SENATE, COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE, SUBCOMMITTEE ON TEXTILES. Hartford, Conn. The subcommittee met, at 9:30 a. m., pursuant to notice, in the State Capitol Building, Hartford, Conn., Hon. William A. Purtell, presiding. Senator PURTELL. This hearing will come to order. I want to say "good morning" to all the interested people who are here this morning. We begin the second hearing in our series of field hearings dealing with the domestic textile industry. This special Senate subcommittee is a subcommittee of the Senate Interstate and Foreign Commerce Committee and these hearings are held pursuant to Senate Resolution 287. We conducted hearings in Washington, a few months ago, in an effort to determine, as outlined in our authorizing resolution, some of the problems in the textile industry, including but not limited to the extent and nature and the causes of the decline in interstate and foreign commerce in textile mill products, the decline in employment in the textile industry, the effect of policies and programs of the Federal Government in the industry, and the impact of our commercial policies with other nations, on this industry. Friday hearings were held in Providence, R. I. Wednesday hearings will be held in New Hampshire and subsequently hearings will be held in South Carolina, and also in North Carolina. We welcome all the witnesses here, and we ask that you give us the benefit of your expert knowledge. We have many experts here in the field. We are seeking to determine what the facts are, so that we can make determinations we hope will be helpful to the industry as a whole. We are not interested in partisan politics or in any bitterness or rancor or in interregional differences which I think at the present time are dormant, but we are interested in constructive and objective solutions to this very important subject. Now this morning I believe we have so far something like 16 witnesses. We want to make it clear that each witness will be given an opportunity to say whatever he wishes. We hope they will submit some of their testimony in written form, which will be helpful to us and helpful, I might say, to the reporter, but they are not limited to that. You may further testify orally, of course, beyond that which you might hand in as a statement, and you can subsequently, if you wish, supply to the committee any other information in written form you feel would be helpful to us. We want to thank the officials of the State of Connecticut for permitting us the use of this room. I think it is probably one of the best hearing rooms we have had outside, of course, of the new Senate Office Building, when it is ready. I understand that our Acting Governor, Mr. Dempsey, will submit a statement in behalf of the Governor of Connecticut. Mr. Dempsey? STATEMENT OF JOHN DEMPSEY, MAYOR OF PUTNAM, CONN., ON BEHALF OF GOVERNOR RIBICOFF OF CONNECTICUT Mr. DEMPSEY. Thank you very much, Senator Purtell, and the very distinguished gentlemen visiting here this morning. First, we extend to you and your committee our best wishes. We are delighted to have you here and we hope your day will be very pleasant. My name is John Dempsey. I represent Governor Ribicoff who could not be here. I would like to leave with you his statement which I shall read. The textile situation in Connecticut and its problems are so well known that no detailed recital is required. Suffice it to say that less than 20 years ago textiles comprised the largest single manufacturing industry in the State, whereas today it ranks sixth in number of employees. Since 1950, textile employment in Connecticut has dropped from 40,000 to 17,000. Almost all of this has occurred in three eastern counties, Tolland, Windham, and New London. While much of the job loss has been made up through an influx of new industry, the migration and liquidation of textile mills has caused great personal misfortune and towns have suffered severely from the loss of tax revenue. This is especially true because of the tendency of textile firms to locate in one-industry communities. There are a number of ways in which the Federal Government could help in this situation. Congress should enact legislation which would aid labor surplus areas. While we are attempting to improve the situation in the textile industry, we should at least take steps to protect the communities and individuals suffering from this downturn. Because textiles are a nationwide problem, the Federal Government should provide measures which would help the areas to increase their own employment. Another help would be to extend set-aside contracts to the textile industry. Textiles and the shoe industry are the only ones in which such contracts are not now allowed. Under the set-aside system, Federal procurement agencies may advertise for part of a total purchase, the contract going to the lowest bidder, and set aside the remainder of the total for negotiations with firms in labor surplus areas. Denying these set-aside contracts to the textile industry works a double hardship on Connecticut. On the one hand, our manufacturers of machinery, fabricated metal goods, and other products see contracts on which they have submitted low bids shifted in whole or in part to other areas where there is a labor surplus. On the other hand, there are no set-aside provisions to help our textile manufacturers when they are underbid by mills situated in areas which give them a competitive advantage. In some of these areas, textile mills are induced to locate through financial help extended to them by the issuance of tax-exempt municipal bonds. In Connecticut, our municipalities scrupulously live up to the intent of the exemption from taxation of municipal bonds by using such bonds for public purposes only. This is one of the problems touched by Seymour E. Harris of Harvard University in his report, "New England and the New England Economy," submitted to the New England Governors' Conference in February 1956. I call your attention, too, to pages 13 and 14 of that report where Mr. Harris summarizes the part that Federal governmental policies have played in the loss of the textile industry in New England. Since the whole report is available, I shall not dwell on its content. His recommendations for corrective action, however, are worthy of thoughtful consideration, and I trust that you will give them the attention and study they deserve. Thank you very much. Senator PURTELL. Thank you very much, and thank you for the attention the Governor has given to us in seeing to it that these facilities are at our disposal. Before calling our next witness, I might introduce the members of the subcommittee and the staff. It is with a great deal of pride and pleasure that I present to you my two colleagues who are present here. However, first let me say that Senator Pastore is chairman of this subcommittee and was unable to be here today. He conducted hearings in Providence on Friday. Senator Strom Thurmond, from South Carolina, is immediately to my right, and Senator Norris Cotton, from New Hampshire is on his left. Both Senators are members of this committee. We have with us the chief of staff, Dr. William Miernyk, to my left. We have Mr. Harold I. Baynton from Washington, chief counsel of the Interstate and Foreign Commerce Committee; and we have Mr. William L. Kohler, a member of the staff from Washington. I think you would like to know we also have present members from the Department of Commerce, who are up here to attend these hearings and I judge shall be at the other hearings, too. With that, I will ask that our first witness, Mr. Henry Truslow, president of the Ponemah Mills of Taftville, Conn., come forward. We would like very much the pleasure of hearing from you at this time. STATEMENT OF HENRY A. TRUSLOW, PRESIDENT AND TREASURER, PONEMAH MILLS, TAFTVILLE, CONN. Mr. TRUSLOW. Senator I appreciate the opportunity to be here. Senator PURTELL. You have a prepared statement? Mr. TRUSLOW. I have distributed it; yes, sir. Senator PURTELL. Is it your intention to read that? 29350-59-pt. 2-10 Mr. TRUSLOW. Yes, sir. It is not too long and you may break in as we go along, if you have questions. I might say I attended the hearings in Washington and in Providence, and I think that there is a great opportunity for good to come out of these hearings, with an exchange of ideas and thoughts. My name is Henry A. Truslow. I am president and treasurer of Ponemah Mills, Taftville, Conn., which was incorporated in 1867 and has been operating in its present location continuously ever since. At the hearings held by this committee in Washington on July 8, 9, and 10, I appeared on July 8 as president of the Northern Textile Association. Mr. William F. Sullivan, secretary of that association, presented a statement and also a statistical supplement and commentary in support of his statement. Other statements plus a great deal of testimony and supporting statistics were also presented very ably by other textile associations and is now a part of the records of this committee. Hence, there is no need to repeat that testimony. I am appearing here today in behalf of Ponemah Mills and its 1,000 employees. Ponemah Mills was originally a fine cotton cloth producer. It was the first mill in this country to spin yarns from Egyptian cotton. That is quite a record. Senator PURTELL. Very interesting. Mr. TRUSLOW. In the late 1930's due to demand, the mill changed some of its production from cotton fabrics to filament rayon and acetate fabrics. This trend continued through the 1940's to the extent that half the production in 1950 was cotton and half on these synthetics. All of these fabrics were market cloths that could be produced in large volume. This demand was the result of World War II conditions, the postwar need for fabrics both for domestic consumption and export, and finally the stockpile buying during the Korean crisis. During the postwar year, the mills in this country forged ahead with modernization of machinery and methods with the resulting increased production and reduction in costs. Ponemah did likewise. After Korea when conditions returned to a more or less peacetime economy, competition within this country became keener due to increased production and decreased demand. At the prices obtainable it was not profitable to continue to produce filament rayon and acetate fabrics so we began changing that part of our production over to novelty fabrics, made of blends of dacron and cotton, orlon and cotton, spun rayon and many others in 1954. I may break in here if I can. When I say "fine cloth"-I think Senator Thurmond would be interested in this, as he comes from South Carolina-this is a typewriter fabric (handing to committee) and these are the handkerchiefs, and you can pass them around and put them in your files, if you want. Senator PURTELL. I am fearful they wouldn't remain in the files long. Mr. TRUSLOW. I show those because they are a special fabric that we can produce in fairly large volume, which it was important to know. Senator COTTON. Pardon me, Mr. Chairman. |