to another, from one State to another, etc. The tax-exempt municipal security was allowed in order to make it possible for municipalities to obtain capital to carry on their necessary functions, and to obtain this capital it was a reasonable device. But the use of this tax-exempt security in order to move industry from one part of the country to another is an abuse of the privilege. In fact, the American Investment Bankers Association has said as much and has tried to discourage the practice. The practice does, however, go on, and in some instances the Federal Government has promised to look into this problem. I think this committee ought to stress this particular point. I should perhaps in this letter make some further suggestions for more revolutionary movement in this area. In the early 1930's we had the NRA program, which was ruled as unconstitutional by the United States Supreme Court. This program tried to deal with excess capacity by proposing reduced output and higher prices and wages. But in 1935 the Guffey bill was passed, and this bill provided for minimum prices and control of output in the coal industry. Senator Guffey, through very clever alliances with various farm interests, was able to get this bill through. It had, on the whole, perhaps a very good effect on the coal industry, which was suffering from excess production and also from competition of new kinds of fuel. Again, in 1958, the United States Government has provided $750 million in new credit for the railroad industry, which is in a rather difficult situation at the present time. Why should not the textile industry claim similar help? Here is an industry which, ever since the first ship was introduced, has had excess capacity. Here is an industry which, as a result of a great technological revolution, tends to produce yards of cloth with much less labor and capital than in the past. Here is an industry that is losing jobs both in the North and the South and suffering severe competition from synthetics. Moreover, the synthetic growth has been partly as a result of Federal tax subsidies to synthetic plants. We have protested against this time and again, and the practice has now been discontinued. Why should there not be some serious discussion of the possibility of giving this industry some temporary help as a means of treating the excess capacity? In England for many years the famous British economist Keynes tried to deal with their problem of excess capacity in the textile industry through a reduction of output and the buying off of excess and inefficient production. This kind of problem should be examined rather carefully. I need not add here that various Federal policies are of great significance for the textile industry. The President's failure to support the Area Redevelopment Act is an example of an action that has hurt the interests of the textile workers. The failure to introduce an adequate unemployment compensation bill to deal with the recession has also been costly. Furthermore, despite all our efforts to get through a hurricane insurance program, this has not been implemented by the administration, nor has adequate river development been undertaken to deal with this problem. These are some supplementary thoughts which I hope you would put into the record. I hope very much that the committee will make some strong recommendations on these matters as well as the problems of research in the textile industry about which we talked during the hearings. With best wishes, I am Sincerely yours, SEYMOUR E. HARRIS. (Following is a letter sent to the President, and the reply, submitted for inclusion in the record by the Textile Workers Union of America :) NEW YORK, August 26, 1958. Hon. DWIGHT D. EISENHOWER, President of the United States, White House, Washington, D. C. DEAR MR. PRESIDENT: I have often read of your appeals to industry and labor to pursue policies that conform to the overall interests of the public. That consideration has always guided the policies of our union, but, I regret to say, it has not received the same attention in some areas of industry, particularly textiles. This is underlined especially by a development at the Wamsutta Mills in New Bedford, Mass. The Wamsutta Mills has been in existence for 110 years. It is the oldest sheeting and pillowcase plant in the United States. Its label is a household word for quality throughout the United States. It has been a prime source of employment to the citizens of New Bedford for more than a century. In 1954 this mill was purchased by M. Lowenstein & Sons, Inc. The company called upon our union to cooperate in a program to make Wamsutta competitive with the rest of the sheeting industry. We gave that cooperation freely, not only in an attempt to preserve the jobs of our members, but to guarantee that the Wamsutta plant would not be lost to the economic life of New Bedford. I shall not burden you with details of that cooperation. But, as an example, our union and its members agreed to eliminate 400 of the 1,600 production jobs which existed at the time the mill was bought by Lowenstein. The annual saving in labor costs alone exceeded $1 million. As evidence of the workers' desire to make the company successful, these radical changes were made without a single hour of stoppage or a single case of arbitration. In the years that passed the Wamsutta operation was profitable to Lowenstein. In 1955 it earned 56 cents per share after taxes; in 1956 it earned 14 cents a share; and in 1957 its earnings rose to 67 cents a share. Its net during these 3 years totaled approximately $520,000. In 1957 alone Wamsutta's earnings, after taxes, were at the rate of 7.1 cents per dollar of investment, substantially higher than the rate of return on the net worth of the Lowenstein chain as a whole, which was 3.7 cents. In the face of this record of profitable operation, the Lowenstein management last week announced that it will permanently close down Wamsutta Mills. In that process some 1,200 workers will lose their jobs, many of them never to find gainful employment again because of age consideration; others to face a long search for new employment and a drastic loss of income because opportunities for new jobs are not readily available in New Bedford. This is not a decision to abandon the manufacture of Wamsutta sheets and pillowcases. Lowenstein has made it clear that it will continue to produce such material in its southern mills. Patently, then, this is a decision to quit New Bedford without regard to the consequences for such a move and without a shred of concern for the 1,200 human beings who deserve much more from Lowenstein than summary dismissal in repayment for the cooperation they have given. Against such a background, Lowenstein's decision to close Wamsutta has no justification either from a business or a social standpoint. It is morally indefensible. It flies directly in the face of the appeals that you, as the Nation's Chief Executive, have made to industry not to pursue policies that injure the general welfare of the public. You can effectively implement the many pronouncements you have made on this subject by bringing the full influence of your office to bear upon Lowenstein to reconsider its callous decision. But, beyond this, our Nation sorely needs a code of responsible behavior for industrialists to follow, one that can reconcile private action with the public interests. In this connection, we urge you to launch a study aimed at preventing recurrences of the economic and social disaster which this letter is bringing to your attention. In the name of 1,200 Wamsutta workers and the many citizens of New Bedford who are affected, the Textile Workers Union of America asks your immediate help. Respectfully yours, VICTOR J. CANZANO, Cotton-Rayon Director, Textile Workers Union of America. THE WHITE HOUSE, Washington, September 17, 1958. Mr. VICTOR J. CANZANO, Cotton-Rayon Director, Textile Workers Union of America, New York, N. Y. DEAR MR. CANZANO: The President asked me to reply to your letter of August 26, relating to the unemployment situation in New Bedford, Mass., and the announcement of a permanent close-down of the Wamsutta Mills. Labor market reports which the Department of Labor has received from the Massachusetts Division of Employment Security generally confirm the statements in your letter about the impact of this plant closing on the economy of the New Bedford area. The closing of the Wamsutta Mills will undoubtedly add to the serious unemployment which already exists in the area. The New Bedford area is already officially classified by the Department of Labor as an "area of substantial labor surplus," and has been so classified for a number of periods over the past few years. Much of the local unemployment problem is related to a long-term decline in the area's textile industry. This labor surplus designation, incidentally, entitles firms in the New Bedford area to receive a measure of preferential treatment in the award of Federal Government contracts. In the event that the plant is closed, the Massachusetts Employment Security Agency will, of course, assist in every possible way in finding suitable jobs for those workers who are released. The agency will also expedite the prompt payment of unemployment insurance benefits to those workers who may be eligible. In a free economy, the question of location and utilization of individual plant facilities by specific companies traditionally has been regarded as a prerogative of management. We do not believe it would be appropriate for the Federal Government to intervene to influence management decisions in this field in favor of one section of the country as against another. Nevertheless, the problem of the impact of such decisions on the economy of various local communities is a very real one. In a number of similar instances involving the closing of important plants in other areas, the firm's management has endeavored to minimize the overall impact by cooperating very closely with local civic organizations in communitywide programs designed to develop alternative job opportunities to replace those being lost. Such a job development program would, of course, receive the energetic cooperation of the Massachusetts Division of Employment Security. Sincerely, GERALD D. MORGAN, Special Counsel to the President. Senator JOHN PASTORE, Chairman, Senate Subcommittee, Senate Chamber, Statehouse, Concord, N. H.: Regret my inability to testify today as scheduled. Concur with previous testimony that foreign competition from low-wage areas must be controlled to assist survival of textile industry. STRONG HEWAT CO., G. DOUGLAS HEWAT, Treasurer. ASSOCIATED INDUSTRIES OF MAINE, Hon. JOHN O. PASTORE, Chairman, Senate Investigating Subcommittee, Statehouse, Concord, N. H. DEAR SENATOR PASTORE: I am writing for the Associated Industries of Maine to let you know of the real concern we have for the future of the textile industry in Maine and our hopes that your committee will recommend without delay necessary legislation to eliminate the discriminatory policies which have been so injurious to Maine textile mills. Our State already has suffered very heavy blows due to the closing of several of its textile mills but the industry is still mighty important to the economy of Maine. It provides jobs for more than 15,000 men and women, is the major source of tax revenue for many of our communities, and a great many businesses depend on the payrolls provided by our textile mills. Sincerely yours, Hon. JOHN O. PASTORE, B. MORTON HAVEY, LEWISTON CHAMBER OF COMMERCE, Chairman, Senate Investigating Subcommittee, State House, Concord, N. H. DEAR SENATOR PASTORE: I am writing you for the members of the Lewiston Chamber of Commerce to let you know about the real concern we have for the future of the textile industry, in view of the problems which this industry confronts because of certain governmental policies. We hope, therefore, that your committee will recommend without delay some positive action to ease the unfair competition which textile mills are facing. This community, as well as its surrounding areas, has a vital stake in the future of the textile mills located here. These mills not only provide more than 5,000 manufacturing jobs and a payroll of nearly $15 million per year, but they also provide a large share of the tax revenue necessary for the operation of schools, of public safety departments, etc. Already one of the mills in our community has been forced to close and we hope that the Congress of the United States, as well as the executive branch, will do what it can to help make secure the remaining jobs. |