Senator PASTORE. Are you therefore saying, Mr. Dugan, that_you would write into the law-I am not familiar with the law now, but I am merely trying to get this in the record in the hope the members of the staff will look it up-what you are suggesting is this, that the fact you used reprocessed wool would not have to be specifically mentioned in labeling 100 percent wool?

Mr. DUGAN. That is what I would prefer to see. In other words, I don't see why the wool textile business should have to label reprocessed and reused, when these other fibers do not have to label that way and there is no question in my mind but that to the consuming public that the label reprocessed and reused, as Senator Kennedy brings out, has a stigmatization and they have a tendency to avoid that type of fabrics.

Senator PASTORE. All right. Let me ask you this other question: In the event you did label it 100 percent wool and you did use reprocessed wool, would you then be deceiving the consuming public? Mr. DUGAN. You would be violating the Wool Products Labeling Act.

Senator PASTORE. I am talking about deception now. In other words, if you did have in the law or did delete from the law the requirement to state specifically that you were using reprocessed wool, would you then, in the requirement of stating that it was 100 percent wool, would you then be deceiving the consuming public? Mr. DUGAN. I rather doubt that.

Senator PASTORE. You have to be categorical on this, because it is important. We are dealing here with the consuming public.

Mr. DUGAN. I will say you would not be deceiving the public on numerous fabrics, for the simple reason the Government permitted, in the making of overcoatings and found by the use of 35 percent of reprocessed and reused stock and by the same token in their blankets, that they had a better fabric, a warmer fabric, a better fabric insofar as abrasion was concerned, by the use of these used fibers.

Senator PASTORE. But the point I am making is this: Can you say that when you use reprocessed wool, you are still using 100-percent wool? You are in the business, and I am not.

Mr. DUGAN. Based on the stipulation in the Wool Products Labeling Act, no, you can't call it wool. You have to term it "reprocessed." Senator PASTORE. I think we are losing one another here. I realize that the law requires you to state the fact that you have used reprocessed wool when you do so.

Mr. DUGAN. That is correct.

Senator PASTORE. Now you are saying that that placed you at a disadvantage with the foreign exporter, for the simple reason that while the law compels him to say so, too, if he does use reprocessed wool, you could never prove he violated the law, whereas if you violate the law, an inspector could walk in on you tomorrow and say that you are, and you don't have that same advantage?

Mr. DUGAN. That is correct.

Senator PASTORE. But I am asking this: The public is insisting upon being told that an article that has 100-percent wool be so labeled. Now if you, without considering the law now, did use reprocessed wool,

and then labeled your cloth with the label "100-percent wool," would you in fact be deceiving the public?

Mr. DUGAN. I would say that in some cases there would be fabrics made out of what is labeled "wool" according to the act, and reprocessed fabrics with wool could be superior to that which is labeled "wool," according to the act.

Senator PASTORE. But you are not answering my question. You are just skirting around it. I want a categorical answer. If we are going to write in this report that we are recommending that in the case where a manufacturer states that he is furnishing to the consumer 100-percent wool, but he need not say he is using reprocessed wool, we have to be pretty sure that we are not deceiving the consuming public.. Mr. DUGAN. What I was trying to bring out

Senator PASTORE. If that is impossible, I want to know it.

Mr. DUGAN. I think it is, to state you have virgin wool when you have reprocessed wool.

Senator COTTON. Isn't it a fact that in Canada they have two labels,. and if your garment is all new wool, the label says "100-percent virgin wool," but if it contains some reprocessed wool the label says "100percent wool," without the use of the word "virgin," which takes away the stigma of having a label using the word "reused" or "reprocessed, which the public thinks is bad.

Mr. DUGAN. That is correct, as I understand it, Senator.

Senator THURMOND. In other words, it is 100-percent wool, even though some of it is reprocessed?

Mr. DUGAN. That is correct.

Senator THURMOND. So if you put "100-percent wool" on the tag, you would be telling the truth?

Mr. DUGAN. That is correct, sir.

Senator PASTORE. Why do you say, "That is correct, sir," so easily to him, and when I asked you, you said you couldn't say categorically? Mr. DUGAN. Because he phrased it differently, that is all.

Senator PASTORE. No; he didn't, Mr. Dugan. I am not trying to make an issue of it. I am trying to clarify the record. Any man that picks up that record now is going to be confused.

Mr. DUGAN. But he said if this was labeled in Canada they label it "virgin wool" and then "wool"

Senator PASTORE. Forget that. All I am saying is this: If you are allowed to use reprocessed wool without saying so on the label, can you still say "100-percent wool," without deceiving the public?

I want that said on the record and you said, "Not exactly," and "Well," you say, "on certain fabrics." I want a categorical answer. Will you think about it?

Mr. DUGAN. I would like to think that over.

Senator PASTORE (continuing). Because if we are going to write a report on this, we have to be pretty correct.

Mr. DUGAN. I would like to make the suggestion to you that the Wool Products Labeling Act be looked into with the possibility of labeling fabrics "virgin wool," and all other fabrics that are wool, by test, then call those fabrics "wool," but give the woolgrowers, and the few people who put over this Wool Products Labeling Act, the

privilege of calling their stock "virgin wool" and that would be enough of a difference in the public's point of view, and the price also, so that they would know they are not getting virgin wool. And we wouldn't have an industry stigmatized with this "reused" label.

Senator PASTORE. May I ask a further question: Would you say it would be more advisable, in order not to confuse the very precise objectives that we are trying to accomplish by this investigation, to better consider the proposition you have raised, together with Mr. Dewey, under separate legislation that has to do with the Labeling Act. Do you think we are better off to stay away from it in this hearing, otherwise we will get ourselves into consumer rights and advantages and therefore complicate this whole thing that has to do with an overall investigation of the textile industry? Now what is your opinion on that?

Mr. DUGAN. Well, I just assume that the suggestion, inasmuch as it had to do with the entire textile industry, and this suggestion to perhaps amend or change the labeling law, would have to do with the textile industry, and possibly aid it.

Senator PASTORE. And you think it is important enough to include it here?

Mr. DUGAN. I certainly do.

Senator PASTORE. Then will you give us your opinion on the matter I asked you to think over?

Mr. DUGAN. Yes.

(Following is a letter subsequently received by the committee from the witness:)

Hon. JOHN O. PASTORE,

Washington, D. C.

JOHN T. LODGE & CO., INC., Watertown, Mass., September 25, 1958.

SIR: It was a pleasure to see you in Concord, N. H., and it was good to observe the excellent manner in which you conducted the meeting as chairman.

On the question of reprocessed wool: Your question as I remember it was, “Would the public be deceived by labeling a fabric wool even though it was made from reprocessed wool?" That is a difficult question to answer as our Wool Products Labeling Act states that the fiber content of a fabric be displayed on a tag or label and so far as I know our woolen manufacturers have honestly labeled their fabrics, which is more than I can say for some imported fabrics, samples of which I presented to your committee.

Now the Wool Products Labeling Act permits sweater clips, thread waste, dirty greasy card waste, floor sweepings, etc., to be labeled "wool," but, of course, not "virgin wool." Many of the materials which are permitted the "wool" label are decidedly inferior to materials that are stigmatized with a "reprocessed and reused wool" label.

The woolen end of the textile industry would be well served and aided in their struggle for survival if the Wool Products Labeling Act were amended or repealed and a bill or law substituted requiring two classifications; namely, “virgin wool as it comes from the sheep's back and all other wool fibers as just plain wool." I believe this to be a worthwhile constructive suggestion and within the scope of your committee. Such a law would stop any mislabeling, would be more practical from the point of enforcement, provide the consumer with good fabrics at a price and, most important, help our woolen mills to operate and remain in business.

If there are any questions you would care to have me try to answer, won't you please let me hear from you? Thank you for your kind consideration.

Very truly yours,

JAMES J. DUGAN.

Senator PASTORE. Thank you very much. You have been a great help to us.

Does it make any difference that I call a witness who comes from Bridgewater, Vt.? Does he have to travel far? Is it more convenient for him to be called now? The rest of my witnesses are New Hampshire witnesses.

VOICE. The gentleman from Vermont left, Senator.

Senator PASTORE. Well, I was wondering if the staff would get word to him we would appreciate very much any statement he would like to make to have inserted in the record. That is Mr. Robert M. Sharp; and our next witness is Mr. Goldman.

VOICE. He is not here.

Senator PASTORE. Mr. Rudolph Mortenson, Guild, N. H.

STATEMENT OF RUDOLPH MORTENSON, OF THE PINNACLE
MANUFACTURING CO., GUILD, N. H.

Mr. MORTENSON. Senator Pastore, members of the committee, my name is Rudolph Mortenson. I am manager of the Dorr Woolen Co., president of the Pinnacle Manufacturing Co., both operating in Guild, N. H.

I have been in the industry since 1922, starting my apprenticeship in Olneyville, R. I., which you know, Senator.

Senator PASTORE. When you say Olneyville, will you raise your voice?

Senator COTTON. You have also been up around Lebanon, N. H.,

too.

Mr. MORTENSON. Since 1932. There is little I can add to the testimoney which has already been presented except to reiterate, in my opinion, that much of the ills of the industry is due to foreign imports. It is illogical to me that it is only 5 percent of the total consumption of potential production of the country which is affected by foreign imports entering free of duty. Whether it be 3 percent or 6 percent, somewhere in the neighborhood of 5 percent appears to be the figure which is under discussion.

I doubt if many of the manufacturers here would be actually concerned about a loss of 5 percent in their manufacturing potential. I think one of the things the committee could well do would be to determine exactly, from the standpoint of productive potentials, what impact duty-free imports have on the industry, not in terms of pounds or yards. but in terms of man-hours of employment or the equivalent in manufacturing potential. It is perfectly obvious that the imported fabrics being made, manufactured in countries with low labor costs, are going to be those which involve the greatest amount of labor, because that is the cheapest commodity they have to sell and bring into this country. If the committee would ascertain that one point, and then see that future provisions for quotas did not exceed 5 percent, and that beyond the 5 percent the industry was protected by duties sufficiently high to maintain a competitive position for domestic and foreign fabrics in the world market, I think that would go a long way toward helping us to solve our problems.

!

Senator PASTORE. Wouldn't you say, sir, too, that the fact that even though it is 3 percent or 5 percent, whatever it is, be it big or small, let the argument be whatever it is, the fact of the matter still remains, if it didn't have effect we wouldn't have these mills closing down? We are faced here with a situation where we have witness after witness reading this whole list of mills that have closed down, and the people who have closed them down and connected with it telling us it is the imports that did it. It strikes me that is a very, very strong argument and it fortifies the argument that while the percentage is small, the fact of the matter is that psychologically and otherwise it does depress the price market. As was brought out here, you may have just 5 stoves to sell in 1 store and you may have 5,000 other stoves to sell on the same street in other stores and you might have 5,000 people who want a stove, but the mere fact that 50 people go and buy that stove for half price does something to the purchasing public, even though they need the stove. For some reason a man hates to pay twice the money for something when he knows that somebody else bought it at half the price. Somehow he tries to get along without it. It is human nature. And whether it is right or wrong, there you are.

Mr. MORTENSON. I agree, but I also feel there should be some reciprocity possibly.

Senator PASTORE. In what way?

Mr. MORTENSON. In permitting the State Department a medium for trading.

Senator PASTORE. Tell us about that.

Mr. MORTENSON. Aren't duty-free imports a commodity for trading in the State Department?

Senator PASTORE. Well, it all depends. If an article is unobtainable in the United States

Mr. MORTENSON. Instead of "trading" shall be say "negotiating"? Senator PASTORE. Surely. Of course, I suppose if an article is really wanted in the United States, and we need it, we are certainly not going to raise a tariff barrier against it. I don't think we have that problem at all. I don't think these other countries do any differently. When Japan or France or Italy or Great Britain needs something, as strategic material which they haven't got, they don't build up a tariff wall against it any more than we do. But surely if England thought too much American clothing was going into England, they would raise their tariffs.

Mr. MORTENSON. I am perfectly willing to be protected a hundred percent.

Senator PASTORE. You have been a great help to us. Are there any questions?

Senator THURMOND. No questions.

Senator COTTON. Thank you very much.

Senator PASTORE. We will recess now until 2 o'clock, at which time we will hear the rest of the witnesses.

(Whereupon, the hearing was recessed at 1 p. m., to reconvene at 2 p. m. the same day.)

AFTERNOON SESSION

Senator PASTORE. The hearing will please come to order. In arranging our schedule here we did plan that the morning session

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