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27 years. I have worked in several capacities in that area, both for Textile Machine Works and for Rockwell International in Reading, Pa. I worked in manufacturing, engineering and marketing.

All of this time has been spent in textile machine-building. I am representing Warp Knit Universal of Gastonia, N.C., which is a service organization for Chima for service for parts and service for the warpknitting machinery imported from the German Democratic Republic. Attached to my statement are a few letters from our customers and prospective customers, which were sent to the named Members of the House of Representatives. These customers include Collins & Aikman, Guilford Misls, Dan River Mills, Avon Knitting Mills, and Duplan Mills. It is clear that the textile industry is ailing in the United States and needs some serious consideration of their problems and an effective means of fighting their way back to a competitive position in the world marketplace.

I beg your support and urge passage of the legislation introduced by Congressman Yatron, that is, H.R. 4788.

This bill will provide the warpknitting industry with the possibility to purchase the very best machinery of their choice which is manufactured in the world today and will enable textile mills to purchase machinery at a much lower price than is now available.

Our industry is presently dominated by the very largest machine builder in the world, which is Karl Mayer. This company from West Germany has secured this position by having up to 90 percent of the warpknitting machines sold in this country. Prices from this machine builder have always been lower than American machine builders could provide.

In 1975, the last American warpknitting machine builder was forced to abandon its product line. This left the industry without a competitive domestic machine builder. As manager of marketing for Rockwell International I experienced this complete downfall in our machine building industry at the hands of Mayer. The result was unemployment in our machine building industry.

Imported textiles are manufactured with high-speed/low-cost equipment and they had their ultimate effect on me and my coworkers. In July of 1976, after 28 years of employment in the textile machine workers at Rockwell International, I was permanently laid off.

Our industry is made up of people who are experienced and are dedicated to it. We are anxious to compete in the world market on a no-crutches and nosupport basis. We feel we can cure our problems. However, we must have your understanding to allow us to buy machines from any country that has it available and the imported machine builders should have to compete for the business on an even footing. This will result in American domestic investment in ultrahigh-speed machinery which is needed to help cure our industry's problems and permit the manufacture of textiles at prices which compete in the world marketplace.

It will create additional jobs for many knitting textile machine workers as well as cut and sew personnel in the United States. It will permit me and my associates, all of whom were laid off due to the abandonment of our jobs with the dropping of the warpknitting machine reliance, to be gainfully employed and create new jobs for

Thank you.

additional men and women laid off to the disappearance of American warpknitting machine building.

In summary, we are very much aware that the first presumption that one would make, that imported machinery tariff réduction would not be a favorable thing for American industry, is what may prompt some agencies to immediately reject our proposal. In this particular instance, the exact reverse is true. Machine prices have risen, parts and services have risen, and all of this is true because we are now in a position of noncompetition in our free enterprise system.

For the sake of the labor and competition needed for our industry, we ask for your approval in passage of H.R. 4788.

[The prepared statement and attachments follow:] STATEMENT OF DOUGLAS L. HEYDT, VICE PRESIDENT, WARP KNIT UNIVERSAL,

GASTONIA, N.C. My name is Douglas L. Heydt, 200 Stanford Avenue, Reading, Pa. I have been associated with the textile industry for 27 years in several capacities. For textile machine works, and for Rockwell International, Reading, Pa., I have worked with manufacturing, engineering, and marketing for textile machinery. I have lectured many technical groups in the industry, and have had many articles published in the leading textile publications in the United States, as well as in Japan, Indonesia, Hong Kong, and Australia. My education, and experience has been totally in machine building for the textile industry.

I am representing Warp Knit Universal Co., Gastonia, N.C., of whom I am vice president. Attached are letters from a few of our customers and our prospective customers which were sent to the named members of the House of Representatives. They include: Collins and Aikman Corp., Dan Rivers Mills, Avon Knitting Mills, Guilford Mills, and Duplan Mills.

It is clear to everyone that an ailing textile industry in the United States is in need of your serious consideration of their problems by effectively providing them with the means of fighting their way back into a competitive position in the world marketplace. I beg you to support and urge passage of the legislation introduced by Congressman Gus Yatron, that is, H.R. 4788.

The impact of this bill will be to provide the warpknitting industry with the possibility to purchase the very best machinery of their choice which is manufactured in the world today, and will enable the textile mills to purchase machinery at a much lower price than is now available. Our industry suffers greatly from the fact that one machine builder, Karl Mayer, from West Germany has secured a monopolistic position by having over 75 percent of the warpknitting machines sold in this country. Prices for the Mayer machine ve always been at least 15 percent lower than any American machine builder. In 1975 the last American warpknitting machine builder abandoned the product line. This leaves the industry without a competitive domestic machine builder. As manager of marketing for Rockwell International I experienced the complete downfall of our machine building industry at the hands of Mayer. The result was unemployment created in the machine building industry. Imported textiles, manufactured with high speed, low cost equipment had their ultimate effect on me and my coworkers. In July, 1976, after 28 years of employment with textile machine works, and their subsequent takeover by Rockwell International, I was permanently laid-off.

Our industry is the people who are experienced and dedicated to it, and we are anxious to compete on a no-crutches, no-support basis. We can cure our problems, however, we must have your understanding to allow us to opete on an even basis. This legislation will enable us to buy machinery from any country, and the imported machine builders will have to compete for business on an even footing. This will result in American domestic investment in the ultra-high speed machinery needed to help cure the textile industry and permit the manufacture of textiles at prices which will compete on the world marketplace. It will create additional jobs for many knitted textile machine workers as well as cut and sew personnel in the United States. It will permit me and my associates, all of whom were laid off due to the abandonment of our jobs with the dropping of the warpknitting machinery lines by Rockwell, to be gainfully employed and create new jobs for additional men and women laidoff due to the disappearance of American warpknitting machine building.

In summary, we are aware of the immediate presumption that imported machinery tariff reduction would not be helpful to the American industry. In this one particular instance, the exact reverse is true since machine prices have risen and parts service has become very poor due to a non-competitive condition in our free enterprise system. For the sake of labor, competition, and understanding of our textile industry, we ask for your approval for passage of H.R. 4788.

DAN RIVER INC.,

WEBCO KNIT DIVISION,

Burlington, N.C., March 30, 1979. Hon. RICHARDSON PREYER, House of Representatives, Cannon House Office Building, Washington, D.C.

DEAR Rich: It has come to our attention that Congressman Gus Yatron of the Sixth District, Pennsylvania has introduced a bill in the House of Representatives, No. H.R. 4788, to permit duty free entry of Tricot and Raschel machinery from all countries. It is our understanding that this legislation will reduce the cost of warp knitting machinery by eliminating the present 7% and 40% duties.

There are no longer any American manufacturers of this type machinery. Since the principal reason for duties is to protect American manufactured products, it appears on the surface that there is no longer any need for these duties. Unless there is something not apparent to me, I would ask your support of this bill; and if you see fit, become a co-sponsor.

There are quite a few tricot knitters in this district and considerably more in North Carolina. If tricot machines could be brought in duty free, we could import machines at lower prices than we are currently which would help us keep our fabric selling prices down. Thank you for your consideration. Sincerely,

H. EDWARD ALEXANDER, President and Treasurer.

Avon KNITTING MILLS, INC.,

Fairview, N.J., March 29, 1977. Hon. HAROLD C. HOLLENBECK, Hasbrouck Heights, N.J.

DEAR CONGRESSMAN HOLLENBECK : It has come to our attention that Congressman Gus Yatron, M.C. has introduced to the House of Representatives, a new bill, No. H.R. 4788, to permit duty free entry of Tricot and Raschel machinery from all countries. This legislation will reduce the costs of Warp knitting machinery by eliminating the present 7% and 40% duties. It will also permit increased competition in the Warp knitting machinery market.

Since there are no longer any American manufacturers of this type of machinery, we strongly urge you to support this bill by your co-sponsorship. You may contact Congressman Gus Yatron of the Sixth District, Pennsylvania, at 2400 Rayburn House Office Building.

I wish to thank you in advance for your attention to this very important matter. Sincerely,

ERWIN RAHNER, Secretary Treasurer. P. S.—Copy also sent to Senator Harrison A. Williams, Jr., of New Jersey.

DWK FABRICS BY DUPLAN,

March 28, 1977. Hon. John W. JENRETTE, Jr., Congressman, McMillan Federal Building, Florence, s.c.

DEAR CONGRESSMAN JOHN: As you know, we are a textile manufacturer in Dillon, S.C. We produce yarn, as yell as knitted ladies outerwear. Our main source for machinery is either from England, France or Germany.

I understand now that Congressman Gus Yatron, M.C. has introduced bill No. H.R. 4788 to permit duty-free entry of Tricot and Raschel machinery from all countries. This, of course, would be a substantial savings to us since we are looking for new machinery.

We would like for you to support this bill or co-sponsor it by contacting Congressman Gus Yatron of the 6th District in Pennsylvania. Thank you for your cooperation. Best regards,

CLAUS STROHLEIN, Plant Manager.

APRIL 15, 1977. Hon. RICHARDSON PREYER, U.S. Congress, Washington, D.C.

DEAR CONGRESSMAN PREYER: We are writing this letter in hopes of enlisting your aid in supporting a new bill introduced by Congressman Gus Yatron, H.R. 4788.

This bill was introduced to permit duty-free entry of tricot and raschel machinery from all countries.

Guilford Mills is the largest purchaser of warp knitting machines in the United States. Unfortunately, ther is no producer of these machines in the United States. Therefore, we have to purchase our equipment from Germany. There are three companies in Germany that produce this type equipment with one of them being located in East Germany. At the present time, to my knowledge, the West German companies pay only 7% duty and the East German companies pay 40% duty.

It is to the best interest of Guilford Mills that there be no duty at all so that we could purchase our equipment on a competitive basis. Therefore, since Guilford continues to grow, we would appreciate any support that you could give Congressman Yatron. We remain, Respectfully yours,

CHARLES A. HAYES, Chairman of the Board. Mr. JENKINS. Mr. Steiger? Mr. STEIGER. No questions. Thank you very much. Mr. JENKINS. Thank you very much. Mr. Machiorlete and Mr. Brody.

If you will please identify yourselves for the record, once again your entire statement will be made a part of the record.

If you would like to summarize, we shall have time for questions.

STATEMENT OF NAT BRODY, EXECUTIVE VICE PRESIDENT, MAYER

TEXTILE MACHINE CORP., ACCOMPANIED BY MILO G. COERPER, COUNSEL

Mr. BRODY. I am Nat Brody, executive vice president of the Mayer Textile Machine Corp. With me is Milo G. Coerper, counsel.

Thank you for providing us with this opportunity to appear to present our views in opposition to H.R. 4788.

Before I read my prepared statement, I would like to make a comment on an earlier witness' allusion to a monopoly situation. I don't know if the committee is aware of the fact these machines are built in a host of countries, including the People's Republic of China, U.S.S.R., East Germany, Italy, Japan, Switzerland, five companies in West Germany, and a company in the United States.

We are a New Jersey corporation located in Clifton, N.J. and registered to do business in the State of North Carolina with premises in Greensboro, N.C. Over some 20 years we have been the importers of Tricot and Raschel warpknitting machines, the subject of the bill. I take the liberty to refer to you the observations in the statement submitted to the individual members of the committee and, therefore, I just wish to summarize our essential reasons for protesting the submitted bill. The passage of this bill seeks to remove the duty for importation of the aforementioned machines which presently are 7 percent for importations from most-favored nation countries and 40 percent from Communist bloc countries. This obviously would give at least in an indirect way the Communist block countries a more favored treatment and at the same time would severely damage our business in the United States as well as of that of a U.S. competitor who manufactures in the United States or presently imports these machines from West Germany.

Our strong protest aside from the anticipated damage to our market is based on three arguments:

One: To our knowledge the passage of such a bill would be unprecedented. We are unaware of any other situation where the Congress has singled out one specific product to provide for and protect a special interest for Communist bloc countries, in this instance East Germany. There is no compelling need for such a treatment. The U.S. producer and our most-favored nation trading partners are fully able to satisfy and supply the demand for such machines in the United States.

Two: In our opinion the proposed bill is contrary to congressional policy and procedures established in sections 404 and 405 of the Trade Act of 1974. This act establishes specific safeguards and conditions for granting nondiscriminatory treatment to Communist bloc countries. So far the President of the United States has established such nondiscriminatory treatment for Romania since Romania has met such conditions. There is no basis at the present time for granting such nondiscriminatory treatment to any other Communist country such as East Germany.

The passage of such a bill would, therefore, be in complete circumvention of congressional policy heretofore applied and would avoid the safeguards required under the Trade Act.

We respectfully suggest that the passage of such a bill would also be in contrast to the proclamation of President Carter to the world that countries which suppress human rights may not expect treatment with countries practicing the principles of human rights.

Three: The concept of such a bill, if passed, would result not only in a severe market disruption in the United States, but also adversely affect our trade relations with our western trading partners. The United States and the western trading partners believe in the concept and philosophy of free enterprise. Such a free economy can obviously not afford to sell its products at or below cost. It is damaging to us if Communist countries where the principle of free enterprise is not practiced and where the selling of products conditions other than commercial considerations may be the predominant factor, such as political reasons or the reed for foreign currency regardless of the cost of the product, are allowed to aggressively penetrate the United States market.

The further consequence would be that whereas today it may open the door for other producers of such machines, to wit, the USSR and

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