We are vitally concerned that any changes will automatically apply to Argentina, and developments in that country in the past 5 years would make any change in the American handbag duties dangerous and unequitable to the industry in the United States. We have had records and reports recently from Germany. We know that Germany before the war was the largest exporter of handbags throughout the world, and I know that they are preparing to export their products again to all parts of the world. As a result of the war, labor cost structures have increased more sharply than at any time since the handbag industry has been in existence. This structure cannot be maintained if the United States labor is to be handicapped at this time by competing against foreign wages which are only a fraction of that labor cost. The factors of lower labor cost and lower raw material cost, due both to tanners and the artificial support of a direct and indirect subsidy, are a competitive threat to the women's and children's handbag industry in the United States. There is no reason for such a threat to be increased at a time when the handbag industry in the United States is in the process of an economic adjustment, and when the future of the handbag industry is shrouded with uncertainty. We most earnestly request that you do not make the mistake that will cause the 25,000 workers to lose their opportunity to earn a livelihood working in the industry. Mr. COOPER. Mr. Chairman, I would like to ask a question if I may. Is it not true that during the period of time that you speak of when handbags were imported from other countries, as indicated by you, that this Government was not allowing manufacturers in this country to use the metal required for making the frames and other parts of the handbags? Mr. MITTENTHAL. That is true. Mr. COOPER. Now, then, is it not also true that these Argentine imported bags that you speak of now are very largely a drug on this market? Mr. MITTENTHAL. Why, they are not selling as rapidly as they did in 1946, due to the fact that their greediness has caused them to turn out a poor product. Mr. COOPER. And now that you can get metal again and can manufacture the bags, you are beating them to death, are you not? Mr. MITTENTHAL. Oh, no; unfortunately the retailers of this country who are very patriotic, send their buyers regularly to Buenos Aires and to Montevideo and other South American countries to try to buy competitive merchandise. The merchandise is not competitive, but it is at a much lower price, and they can out-sell the manufacturers of similar goods in the United States. We are almost ashamed to say that some of our leading department stores in the country are not satisfied to take the products of the 435 or the 650 American manufacturers, to sell to the American people, but they expect these same American people and these workers to come into their stores and buy the products that they have to sell. There is nothing that we can do about it, that is their policy. They go there regularly and they take with them samples of American handbags to show them what to make down there, and what is acceptable to the American woman, and the price of course is accordingly. The CHAIRMAN. Are there any other questions? Mr. EBERHARTER. Is there any representative of the ladies' handbag industry contemplating going to Geneva to observe these conferences? Mr. MITTENTHAL. No, sir; if you thought it necessary, I would like to get the job. Mr. EBERHARTER. I was just wondering whether you had an observer. Mr. MITTENTHAL. We do not anticipate going to Geneva. The CHAIRMAN. We thank you very much for your appearance. Mr. REED. Have you any evidence that you want to put in the record? This is Mr. MITTENTHAL. We have our brief that we submitted for the committee, which I think contains the detailed evidence. merely the oral presentation that I have given here. The CHAIRMAN. Your oral statement will appear in the record. Mr. EBERHARTER. Was this evidence that you presented today presented to the Committee on Reciprocity Information? Mr. MITTENTHAL. I presented the same testimony, perhaps a little bit added here in the way of bringing it up to date. I think that that is about all. The CHAIRMAN. Thank you very much, Mr. Mittenthal. Mr. C. P. McFadden, of the Rubber Manufacturers Association, who is listed to appear, has exchanged places with Mr. Joseph Catterall, who is scheduled to appear tomorrow. We will be glad to hear from Mr. Catterall at this time. STATEMENT OF JOSEPH CATTERALL, REPRESENTING THE MECHANICAL DIVISION OF THE RUBBER MANUFACTURERS ASSOCIATION Mr. CATTERALL. My name is Joseph Catterall, executive secretary of the Mechanical Division of the Rubber Manufacturers Association. I represent the Mechanical Rubber Goods Manufacturers Division. During my 10 years with this organization at least 6 have been directly concerned with the affairs of mechanical rubber goods manufacturers. During the war I served as secretary for several Industry Advisory Committees to the OPA. About 146 domestic manufacturers are engaged in the manufacture of mechanical rubber goods which include, among other things, various types of rubber hose, conveyor and transmission beltings, printers' blankets, sheet packings and gaskets, golf ball centers and thread, sport equipment of various types, and hard and soft rubber molded and extruded, lathe-cut and sponge rubber items and others too numerous to mention. The present sales value of domestically produced mechanical rubber goods amounts to over $250,000,000 annually, and over 71,000 persons are employed in this one branch of the domestic rubber business. We have appeared before the Committee for Reciprocity Information in connection with the proposed reciprocal trade-agreement negotiations and have opposed any further decrease in the United States import duty on rubber goods, especially mechanical rubber goods. We, therefore, request leave to file as a part of this statement, a copy of our brief and a transcript of our testimony on the subject before the Committee for Reciprocity Information. The CHAIRMAN. How voluminous is it? Mr. CATTERALL. I would not say it is too voluminous. The CHAIRMAN. Without objection, it will be received and incorporated in the record. (The brief and transcript of testimony are as follows:) STATE OF NEW YORK, County of New York, ss: The undersigned being duly sworn, deposes and says that he is the executive secretary of the mechanical rubber goods manufacturers division, of The Rubber Manufacturers Association, Inc.; that he has been authorized by the executive committee of the above division who are empowered by the bylaws of the association and of the division to do so, to submit the attached statement on behalf of the constituency engaged in the manufacture of mechanical rubber goods. This constituency manufacture at least 90 percent by volume of the mechanical rubber goods produced in this country. The undersigned has carefully read the attached statement and states that the facts presented are true to the best of his knowledge and belief. Subscribed and sworn to before me this day of December, 1946. Par. 1502 Par. 1537 (b). Par. 1537 (b). Par. 913 (a). Par. 923. Notary Public MECHANICAL (INDUSTRIAL) RUBBER GOODS Lawn-tennis and table-tennis balls and golf balls. Manufactures, wholly or in chief value of cotton, not MECHANICAL RUBBER GOODS COVERED BY THE PARAGRAPHS LISTED The above paragraphs as listed cover the following types of mechanical rubber goods: Hose.-Air, water, railroad, welding, spray, lawn, steam, fire, suction (all types), oil, rotary drilling, gasoline, solvent, and many other types intended for special services. Belting. Transmission (both flat and V types), conveyor belting and other types of belts used for special purposes. Printers' blankets (all types of lithographic and printing blankets). All types of sheet packing and gaskets. Golf-ball centers and golf-ball thread. Sporting equipment. Molded insulators and insulating materials (both dense and hard), friction tape and splicing compound, motor mountings, vibration dampeners, glase channel, sponge rubber (Latex Foam and chemically blown), shock insulators, washers, gaskets, rubber-covered metal, and other molded, extruded, lathe-cut and sponge rubber parts too numerous to mention specifically. Number of manufacturers (See exhibit No. 1, showing names and location).... 146 Average number of employees: Wage earners.. Salaried employees.. Total.... Sales value of product: 1935. 1936 1937. 1938. 1939. 1940 1941. 1942. 1943. 62, 050 1944 1945 257, 000, 000 When giving consideration to the requirements of the mechanical rubber-goods manufacturing industry, we must not lose sight of the fact that it is one of the principal purchasers of cotton. Cotton yarns, sheetings, and ducks have always been used in large quantities by this industry and during the past 2 years an annual consumption of 133,000 bales has been achieved. This raw cotton is entirely of the domestically produced variety. The foregoing data have been estimated from sources considered to be highly reliable. In some cases, the Bureau of Census reports, The National Cotton Council of Commerce and other statistical information gathered by The Rubber Manufacturers Association, Inc., and by special surveys and other means available to this office. Because it is now impossible to obtain any accurate information relative to the wage scales of the principal countries wishing to import goods into this country, no attempt will be made to draw comparisons. We would like to point out, however, that the rates paid by mechanical_rubber-goods manufacturers are among the highest paid in the country. The Bureau of Labor Statistics reports average hourly earnings in miscellaneous rubber-manufacturing plants other than tires and other large classifications (which would be largely mechanical goods operations) as $1.102 per hour as of July 1946. This represents an increase of 81 percent over hourly earnings reported for July 1937 of $0.607 per hour. From the foregoing, it is apparent that a duty that was once satisfactory for the protection of this industry will no longer suffice and if labor is to continue to earn high earnings and our high standard of living is to be maintained then it will be absolutely necessary that the industry receive the tariff protection which is required to support this high level of pay. The cost of all materials and services required by mechanical rubber-goods manufacturers have increased in relatively the same proportion as wages and in a number of instances far beyond those of other industries. There are instances of 300-percent increases in the cost of the cotton textiles currently being used as compared with the cost of similar materials for the period 1937. The increases which have accrued to both these elements of cost, namely, labor and material, make it most apparent that over-all costs have risen far beyond the position where the current duties will be adequate to protect the American mechanical rubber-goods manufacturing industry. We believe that for several years at least the cost of producing mechanical rubber goods will remain high. During this period, the mechanical rubber-goods industry must have protection from competition from low-cost countries if it is to continue to exist. Those low-cost countries from which most competitive imports originated prior to the war are not yet in substantial production on the articles under consideration. It is clear, however, that because of their changed economic status their need to develop dollar credits will bring about imports of these mechanical rubber goods at least triple that ever before experienced unless some action is taken by our Government to protect mechanical rubber-goods manufacturers. The industry in the United States cannot afford the loss of this volume of its business to foreign producers. During the last 10 years, foreign countries have benefitted greatly in the "know how" of manufacture due to the practice embraced by American industry of loaning to these foreign countries some of their finest experts. These experts were chiefly responsible for the rapid growth in some of these countries of industries competitive to those in this country, among which has been mechanical rubber goods. Certainly it seems only fair that the industry that has given so generously of its knowledge in the interest of promoting the welfare of others should in its turn be protected from the results of its own generosity. During the war, the manufacturers of mechanical rubber goods contributed many thousands of items without which the war could never have been fought in the manner and on the scale that it was. Tanks would have lost much of their efficiency, naval logistics would have been greatly hampered without their ability to refuel at sea and while under way. Many other applications of mechanical rubber goods to the art of war can be observed in exhibit No. 2 attached. Most people in this country are agreed that we should continue to remain independent with respect to such an important commodity as rubber and that a certain minimum amount of American-made rubber should continue to be made in the national interest. The manufacturers of mechanical rubber goods are important consumers of American-made rubber and unless economics demand otherwise, it will continue without compulsion to use substantial quantities of rubbers other than the natural type. Under the circumstances, mechanical rubber goods manufacturers feel strongly that the previous cut in the duty should be restored and that the increase allowed by law applied to those classes of mechanical rubber goods listed in this document should be promptly applied. PROCEEDINGS Mr. BROWN. Gentlemen, this hearing is being conducted by a panel of the Committee for Reciprocity Information, which is appointed by Executive order of the President, to hear the views of all persons who are interested in the possible tariff concessions by this country on items included in the list of products announced by the Secretary of State on the 9th of November, and also all persons who are interested in securing concessions from any of the other countries included in the 18 with which trade agreements are to be negotiated. The Committee is an interdepartmental one. The Department of Agriculture is normally represented, but its representative, unfortunately, is ill and won't be able to be with us today. I would ask you please to observe, although we may smoke in this room, we are strenuously prohibited from smoking in the corridors. So please cooperate with us in that respect. The panel will normally sit until 1 o'clock and resume at 2. If you want copies of the record, or any part of it, you may obtain them from the reporting firm of Ward and Paul, 1760 Pennsylvania Avenue, or you can leave an order with the court reporter who is present here. In general, the members of the panel will reserve their questions until after the witness has completed his statement, or, if you have a group of witnesses and would prefer to have us wait until you have all spoken, we would be glad to accommodate you in that way. Persons who are appearing are asked if they will please confine their testimony, so far as possible, to material which is supplementary to the material which is in the written briefs which we have before us, and have had a chance to look at. As the name of each witness is called, will he please step forward and be sworn by the secretary, and give his name to the reporter, with the name of the firm or organization which he represents? Members of Congress, of course, will not be sworn. Mr. Secretary, would you call the first witness, please? Mr. MOLINE. Mr. Catterall, of the Rubber Manufacturers Association. TESTIMONY OF J. J. CATTERALL, THE RUBBER MANUFACTURERS ASSOCIATION, INC. (The witness was duly sworn by the Secretary.) Mr. MOLINE. Will you please give your name? Mr. CATTERALL. Joseph J. Catterall, executive secretary of the Rubber Manufacturers Association. Mr. BROWN. Mr. Catterall, are you speaking generally or for one division of the association? |