I have given you the handbag manufacturers' views on this matter. I cannot believe it is sound policy to simplify things, at the sacrifice of an American industry.

We are confident that this committee will not force these undesirable

results to come to pass. We respectfully urge that the current $1 limitation on duty-free shipments remain untouched.

Thank you, sir.

Senator JOHNSON. Thank you. You have presented your case very well, Mr. Berkowitz.

Mr. BERKOWITZ. Thank you, sir.

Senator JOHNSON. Mr. Benjamin Shapiro, National Handbag and Accessories Salesmen's Association, Inc.

Mr. Shapiro, you may proceed in your own way.

STATEMENT OF BENJAMIN SHAPIRO, PRESIDENT, NATIONAL HANDBAG AND ACCESSORIES SALESMEN'S ASSOCIATION, INC.

Mr. SHAPIRO. Thank you, sir.

My name in Benjamin Shapiro, and I am president of the National Handbag and Accessories Salesmen's Association.

Senator JOHNSON. You may be seated.

Mr. SHAPIRO. I am also vice president of the National Council of Wholesale Salesmen. Our headquarters are at the Warrington Hotel, 161 Madison Avenue, New York City.

I am a salesman, and I have not prepared an address. I, perhaps, if necessary, will file one.

I want to record the feelings of our organization relative to section 321 of the bill, House bill 5505.

We are opposed to it, and there are certain things that are of interest to us.'

In the first place, the purpose of increasing the amount of duty-free goods to $10, they say is because the cost of handling, and so forth, is excessive. Why don't we raise some service charge for handling these goods and balance it instead of trying to look for more business and lose more money? That is the way it occurs to me.

Then there is another thing that I do not understand. The bill say that one package per day is the limit. What is the idea there? Does Congress think that people are going to buy more than one package a day? I do, and no doubt they will. Everybody in America senses a bargain, and if we can get it for less over on the other side, we are going to buy it.

Now, let us see what the effect is. I just thought that I might tell you, and I have brought along, and I ask that it be left with the committee, a catalog of Montgomery Ward. Montgomery Ward does a business of a billion and a quarter, and not all of it is mail order. They have retail stores, too, and I could not get the exact breakdown. Sears, Roebuck does a business of 21⁄2 billion, and there again I cannot give you the exact breakdown, but the fact is that both businesses were started and operated as mail-order houses; they have built a tremendous institution. They publish books like this. They are sent through the mails, and contain thousands of articles, pictures and all. What is wrong with this? Why cannot anybody else send them into this country and get the business.

I brought along an English leather-goods journal, and a French leather-goods journal. You will find in both of these books that the machinery is set, pictures and all-it is just a matter of taking these bags and putting them down in American language, state the price, and set the business up.

Our Canadian neighbors, the Mexican border, everything becomes open. Now, let us see what I am arguing about.

My feelings are these: I represent salesmen, workingmen, men who already are suffering because of an excise tax. We asked Congress to put a ceiling on hotel rooms and they could not do that; we asked that the cost-of-living adjustment be given to us-no; they froze the rate of commission; we asked that a base be given us where commissions cannot be cut because of a freeze, and even that Congress cannot see their way of doing that.

Now, our men are entitled to work and earn a living, and I want to assure you, Senator, and for the record that we are suffering now more than we ever did. We work harder, we travel more and, perhaps, the testimony already before you will prove that the decrease in sales has naturally cut our income, and it is a question as to how we can best service our industry.

Most of our men work on a commission' basis and, as such, no business, no commission; the expenses are there. So, let us leave that matter for a moment, because I want to stress the one point. You have got a mail-order potential here that with one package a day, several members in a family-you have opened the gates.

Now, there is another thought that I think we ought to stress at this point: It may well be that what I say will not happen, and it may well be that the power of the Secretary of the Treasury or what-i ever official whose province it shall be, will then say that it is a bad bargain and we have got to close the gates.

Now, certainly, that would be a bad piece of business. I would not expect them to do it because certainly that would not make for friendship in any foreign country. It is so much easier to look at this practically from a fair basis and stop it in its inception because you cannot recall it. I think that once you let this go, no matter how much damage is done you have not got a chance of changing it.

I want to also stress one other thing, that in the charity of this Government they try to conserve moneys, but they are willing to excuse excise taxes because they are bought or made on the other side of Rouse's Point. Why? Don't we need the money? I don't where that generosity comes in.

So, over all, I don't see that we are going to help the international situation too well. I do not know, but that some of these packages arriving here without being opened by customs might not contain some propaganda that we might ultimately be sorry for. I still believe that the best thing we can do is to let 321 alone, with its $1 top and not look for things that we will be sorry for later.

I thank you.

Senator JOHNSON. We thank you, Mr. Shapiro.

Mr. SHAPIRO. Thank you, sir.

Senator JOHNSON. Our next witness is Mr. Louis Rothschild of the National Association for Retail Clothiers and Furnishers.

STATEMENT OF LOUIS ROTHSCHILD, EXECUTIVE DIRECTOR, NATIONAL ASSOCIATION OF RETAIL CLOTHIERS AND FURNISHERS

Mr. ROTHSCHILD. My name is Louis Rothschild. I am executive director of the National Association of Retail Clothiers and Furnishers, which is a fancy name for the men's wear stores.

I have submitted a brief statement which I would appreciate if it could be included in the record.

Senator JOHNSON. Yes, it will be made part of the record just as you have proposed it.

Mr. ROTHSCHILD. A number of retail associations and retail spokesmen have appeared before this committee in opposition to the increasing of the limitation from $1 to $10, and to that statement, those statements, we say "amen" and we approve those positions.

In the men's wear field we are particularly worried about the possibility of unfair mail-order competition because of the fact that men's furnishings fall into the classification that they can be sold for $10, and imported; and, in addition to that, the word "imported," as the Senator knows as a consumer, is a magic word with men.

Consumers look, mistakenly in many instances, to receiving quality goods because it has the word "imported" or "made here" or "made there" on it.

Already there is considerable mail-order competition of a legitimate sort. Esquire magazine, this issue, has some 15 ads of a mailorder nature, advertising imported items. Only two of those, however, come from abroad, and one is advertising shoes for $9 and something from England, and the other is advertising shoes for $18 something from England.

I am sure the Senator is familiar with the story of the fears of the competition, but I thought that I would briefly visualize it for you.

If you will indulge me for a moment, here is a hat from England, a quality hat, which costs in this country, $18.50, with the regular retail mark-up. This hat could be sold by mail order, provided this measure were to pass as it is writen, for $9.50, within the limitation. It is a fine hat, a quality product, largely advertised by American merchants who have built up a demand.

Here is a real luxury item, imported toilet water, one of those things you get for Christmas and give to a friend next Christmas. However, this sells here for $7, including, of course, the customs duty—the 20percent Federal tax brings it to $8.40.

On a mail-order advertisement and business it could be profitably sold for under $4.

Here is a cashmere muffler, a beautiful feel to it-would the Senator like to feel it?

Senator JOHNSON. Throw it up, I will catch it.

Mr. ROTHSCHILD. It has really got luxuriousness to the feel of the thing. That muffler sells for $12.50 in retail stores here. It is imported, and that is its selling point, in addition to the feel. You will notice that "Johnson's of Elgin" and "Made in Scotland" in the label. It could be sold, if this bill were to pass, on a mail-order campaign profitably for $7.

I have another item, the last, a Braemar sweater made in Scotland of lamb's wool, it is not cashmere. It sells in this country for $12, with customs, retail profit, not counting the local sales tax, which

varies in the jurisdictions-it could be sold under a mail-order campaign for under $7 profitably.

That is the reason the men's-wear merchants of the country are fearful that the proposed bill would open the door to a competition they could not meet, would capitalize upon their thousands of dollars they have spent advertising the word "imported" and the words. "Made in Scotland" and "British wool," and so forth, and that is why we urge this committee not to enact that section of the proposed bill which would open up this competition.

Thank you very much, unless there are some questions, Senator. Senator JOHNSON. We are pleased to have your testimony, Mr. Rothschild.

(The prepared statement of Louis Rothschild is as follows:)

STATEMENT OF LOUIS ROTHSCHILD REGARDING H. R. 5505 (CUSTOMS SIMPLIFICATION ACT OF 1951)

My name is Louis Rothschild. I am the executive director of the National Association of Retail Clothiers and Furnishers with headquarters in the Munsey Building, Washington, D. C. This association is the national group representing men's and boys' wear merchants with over 2,000 members located throughout the United States.

I am appearing in opposition to that part of section 11 of H. R. 5505 which would, according to our understanding, widely open the doors to mail-order businesses operating from abroad selling men's wear.

The average

The retailer that we represent is almost typical small business. men's store has under five employees and does a volume of less than $150,000 a year. Even in that volume, the word "imported" is a magic name. Particularly, the word "British" has special significance to consumers. Our trade does a large volume of business in imported scarfs, hats, shoes, jewelry, neckwear, pipes, razors, and toiletries.

Practically all of these items could be successfully sold under a mail-order arrangement from abroad if the proposal now before this committee is enacted into law.

Please understand that we do not oppose mail-order businesses as such. They are an established method of doing business and already a substantial factor in men's wear. I would call your attention to the mail-order ads in a typical issue of Esquire magazine as indicating the receptiveness of the consumer to mail-order buying and particularly goods with the magic word ".mported." The current issue of Esquire magazine has two mail-order ads from England offering British-made shoes, one of which is priced to the consumer under $10 even in the face of present tar.ff. But the mail-order business today does not avoid customs duty or Federal excise tax and, therefore, is competitive to those of local merchants.

If this bill were to pass, the men's wear merchant could not meet the competition on imported items. Here are some examples of what could be sold:

A man's wool sweater, on which the word "imported" is a terrific selling point, costs $12 in this country to the consumer through the reputable merchants. If this bill were to pass, it could be sold extremely profitable for $7.50 by mail order. A fine imported man's hat in this country retailing at $18.50 could be offered by mail for $9.50 because of the saving in customs and the lower standards of merchandising in foreign countries.

A fine cashmere muffler with a fringe which is sold in retail stores in this country for $12.50 could be sold for under $7 by mail order, largely due to the savings by avoiding the 45-percent customs duty.

Men's jewelry, such as cuff links, tie clasps, etc., subject to customs ranging between 35 and 55 percent of costs, would permit merchandise being sold here for $12 to be sold very profitably by mail order from abroad at $6 and less. In addition, the Federal excise tax on jewelry would be lost. The same loss of excise taxes would apply to wallets, leather goods, face lotions, and other items. For example, a pure luxury item like after-shaving lotion, which retails here for $7 plus the 20-percent Federal tax, or $8.40, would be easily profitably sold for under $4.

We note, of course, that the proposed bill sets up what is probably intended to be a savings provision to prevent unfair competition in that the Secretary of

the Treasury would have the right to prevent abuses by mail-order businesses. It is unlikely, in our opinion, that the Secretary's office would be able to police the thousands of advertising media which would carry mail-order offerings, much less the direct-mail advertising. Corrective action would be so late that it would be, in effect, locking the stable door after the horse is stolen.

That this is more than on imaginary danger is well attested by the advertisements of cruise ships who make great capital in obtaining tourists for the West Indies, South America, Nassau, Habana, Bermuda, and other places saying that this will give you an opportunity to buy fine English woolens, French perfumes, and other items customs free and at large savings. If the savings of customs is worth advertising for a luxury liner, it certainly is a sales point for a direct-mail campaign.

Various retail groups have appeared before this committee stating a similar position and we endorse and approve the statements made by them. I wish to respectfully point out the men's wear merchant is in a particularly vulnerable spot if this legislation should pass.

We, therefore, respectfully urge that section 11 of the pending bill, which proposes to amend section 321 (b) (2) of the Tariff Act, not be enacted.

Senator JOHNSON. Mr. Cohen of the Pocketbook Workers Union. All right, Mr. Cohen.

STATEMENT OF SAMUEL HARRIS COHEN, ATTORNEY, POCKETBOOK WORKERS UNION, AFL

Mr. COHEN. I shall ask for leave to submit a written statement. I have some notes here, and shall mail a statement in in very short order. Senator JOHNSON. Do you have a written statement?

Mr. COHEN. Not complete, sir; just in the

Senator JOHNSON. That is all right; you can make an oral statement, and the reporter will take it down.

Mr. COHEN. Thank you.

Senator JOHNSON. You can do that or you can submit a written statement later if you wish. It is not necessary.

Mr. COHEN. Honorable sir, my name is Samuel Harris Cohen, of 1776 Broadway, New York City..

Senator JOHNSON. Your name is Samuel Harris Cohen? What is your address again?

Mr. COHEN. It is 1776 Broadway, New York City 19, N. Y.

I appear as the attorney for the Pocketbook Workers Union affiliated with the American Federation of Labor. It is a local union of an international, which international will soon be heard from through another speaker.

This union has about 12,000 members who work in the greater metropolitan area of New York, which would include parts of Connecticut, New Jersey, and New York, and some parts of Massachusetts, although strictly speaking that is not metropolitan New York as we understand it.

These members work in the ladies' hand-made bag industry, as distinguished from the machine aspects of the industry that you have already been told about.

They work for some 335 employers who manufacture handbags and for some 150 employers who manufacture personal leather goods, key bags, and items of that sort.

Fifty-five percent of the handbag production of the United States is produced by members of this union. The 55-percent figure in connection with the discussion before this committee is misleading in that almost 90 percent of the quality hand-made handbags as dis