tinguished from machine-made are made in this metropolitan New York area.

For the most part, the out-of-town companies are engaged in a field where they produce by machines, and which products are retailed from $1 to $5 per unit.

Quality bags, however, sell from $7.50 and up, and they go quite high, but they average out from about $10.50 to $12.50 a bag retailthat being the price that it reaches the American consumer.

This union for which I am speaking is at this moment experiencing one of its worst depressions since our great depression of 1933, and I am not saying that we have not had good times since then; I am saying we never had business as bad as it is at this present moment since that time.

Senator JOHNSON. What is the cause of that?

Mr. COHEN. Many factors.

Senator JOHNSON. Because this bill is not in effect yet.

Mr. COHEN. No. There are many factors, Senator, and from the kind of work we do, we will give you some indication of how bad it is. Other speakers have covered why business is bad, and we will address ourselves to the possible depressing effects of this bill to union's segment of the industry, namely, the quality hand-made bag as distinguished from the machine-made bag; that essentially is the product that will be involved if this bill goes through with the $10 duty-free exemption.

Recently this union, and I know this because of the nature of the work that we are doing in our firm, has been experiencing difficulty in collecting holiday and vacation pay; incidentally, at best there is a part-time employment industry involved here, because we find vacation pay is based not on service to the individual employer but in the industry, otherwise these workers would never be entitled to a vacation. They just do not put in the norm of, let us say, 48 weeks per annum for one single employer, so you find concrete proof of the part-time employment in this industry even under normal times by the method used for the payment and the computation of vacation pay.

Recently, and for the first time in many years, this union has been asked by many employers for an extension of time in which to pay vacation and holiday pay and wages, something we have not experienced, sir, as I said, since 1933.

The New York market primarily produces the quality hand-made bag. It is this part of the industry that will be most directly affected by the unfair imports of handbags.

The proposed change in section 321 of H. R. 5505 will contribute greatly to the unfairness of the foreign competition to the quality handbag employer and worker.

The person of means is the purchaser of quality handbags, and also the foreign traveler. The proposed amendment will encourage this group of citizens to purchase their handbags abroad or from foreign mail-order companies.

Without the benefit of this proposed duty tax gift the foreign producer has many advantages. I will not spell them out in detail, but generally speaking, the wages run from 30 percent to 40 percent of the American wage, and we are what is known as a low-wage industry.

In addition, we work in this industry 3712 hours, something that took 50 years to obtain, and industry is satisfied with that workweek.

It is one way, incidentally, of spreading employment throughout the year; that is one of the basic reasons for it.

In Europe we find them working from 48 hours to 54 hours, that is, in those companies for which there are published figures.__What happens to hours in the home-work aspects of production in Europe we can only guess at.

In America, as you know, we have, by and large, abolished the home-work production of handbags and similar products.

We have innumerable fringe benefits, holidays, vacations, welfare, hospital benefits, and things of that sort, which are today the norm for the American worker. These things not only are not in existence in foreign companies and foreign workers do not have them, but they have never even heard of them.

In addition to all these disadvantages to our workers here, we are now faced with this potential gift with respect to duty tax. We say that this must not be imposed upon this segment of American industry for these reasons.

Also we find that there is an American way of doing business which includes a retail mark-up of about 40 percent. That is the standard retail mark-up for handbags and similar products. I do not want to burden the record with why that is, but that is the reality, and everyone accepts it in this country.

When we speak of the potential competition under this bill we are speaking of mail-order business and foreign purchases by American citizens in this very field of quality handbags.

American employers are faced, as I say, when bags are sold in this country, with this normal retail mark-up. If they come into this country, as they most likely will, through a mail-order business, we will then find, as we do in this country, that the mark-up is nearer 20 percent, and most likely in the instance of foreign mail-order companies, less. That is much more of an evil than appears on its face, because while in America Sears, Roebuck and the other mail-order companies sell handbags, they are, for the most part, the machine-made products, and they sell, generally speaking, in the $1 to $5 bracket.

This foreign mail-order business, with all the advantages that they now have, will compete directly for what we call the quality handmade product, and the quality consumer, namely, the average $10 purchaser.

We say that we have enough difficulties in this aspect of American industry at this moment, and the reality is that we are suffering from a depression. The imposition of this extra burden, which we think is a very real threat will be depressing to the ladies' bag industry. Already imports, with present requirements of the payment of duties, in the mere instance of Cuba, where the variation of 17 percent exists as distinguished from 20 percent provides serious competition-I personally in connection with a business trip to Cuba recently saw many new employers in the hand-made-bag field.

In addition, we have a special plea, we think a favorite plea, of many members of this committee and of Congress, and that is the plea for the small-business man.

With all due respect to Congress, what has been said and done about the plight of the small-business man, in the view of many of us, has been lip service rather than concrete laws and the enforcement of the laws that we have on the books today. I respectfully refer you to the

findings of the House Select Committee on Small Business, Eightyfirst Congress, House Document No. 599 and the Senate's counterpart Small Business Committee to elaborate and support that contention, not to mention the difficulties we have in the enforcement of our Sherman antitrust law and the State antitrust laws.

When we speak of the union and employers, we are speaking for small-business people only in this quality hand-made field.

In New York-this may surprise you there are five employers who employ a hundred employees or more-five of them; there are about 125 who employ 20 employees or less, and when we say "less" we mean 2 and 3. Those are the business people who are speaking to you here through their representatives, and I am addressing myself on behalf of their workers.

Truly, we have a situation here where we should not aggravate the plight of the small-business man which is, insofar as this industry is concerned, a very serious plight as of this moment.

We say to you that the women and men who buy handbags for wives and friends, are at this moment boycotting the $10 American made product particularly because of the excise tax. We cannot and we do not desire to go into the inequities of that tax. That has been before this committee on another occasion, and the probabilities are that it will come up again in the very near future, we hope.

In the refusal of the American purchaser to pay a $2 tax on a $10 handbag purchase, a $4 tax on a $20 handbag purchase, we have a reality that the foreign producer, who is now being invited to come into this market, will unevenly compete with us in addition to the reasons that I have mentioned, because they will not have the 20percent excise tax.

Also, as you know, in New York City they now have blessed us with a 3-percent sales tax, and I have reason to believe that sales tax plagues the American consumer and retail businesses in many other States in the United States. That, too, will be an advantage that the foreign producer will have over our people here in this country.

Now, while this bill provides for exceptions in the discretion of an administrator-it says that the Secretary of the Treasury may change the figures-realistically we know they will not be modified. Our experience has been that these exceptions once the amount is frozen in the bill to $10 for personal use and $5 for resale, very rarely, if ever are changed by the administrator.

We think-and this is in a sense an aside-it is a bad way of legislating for Congress to say to administrators, "You determine whether it is $10 or a lesser amount." That is a legal problem in a sense, a legislative problem, but realistically the people in this industry feel that they will not have any changes made, so that the attempt of the writers of this legislation to say, "Well, we will work out an experience and give you exemptions," we think is just coloration; it will not come to pass.

For all these reasons we say to you on behalf of low-paid, lowincome quality bag workers, working in New York City and totaling about 12,000 people, do not add to the burdens of these people.

Please accept our sincere thanks for this opportunity to speak in behalf of these workers.

Senator JOHNSON. We thank you, sir.

Mr. COHEN. Thank you.

Senator JOHNSON. Mr. Walinsky, International Handbag, Luggage, Belt, and Novelty Workers' Union.

STATEMENT OF OSSIP WALINSKY, PRESIDENT, INTERNATIONAL HANDBAG, LUGGAGE, BELT, AND NOVELTY WORKERS' UNION

Mr. WALINSKY. Mr. Chairman, my name is Ossip Walinsky. I am president of the International, Handbag, Luggage, Belt and Novelty Workers' Union, a union comprising many trades, essential trades, providing 70,000,000 women of all ages with ladies' handbags and personal leather goods, and tens of millions of travelers with all types of luggage and travel goods. There are more than 1,650 manufacturers in our trades, but close to 90 percent of our employers are smallbusiness men employing, on an average, less than 23 workers.

Yes, in the midst of greatest prosperity, the highest rate of production, the highest rate of income, the highest rate of profits, our members are underemployed and unemployed. The recession in our trades began in 1947 and has continued each year. To cite but one example, the volume of business in the handbag industry, comprising the largest group of all of the five trades we represent, namely, women's handbags and purses, luggage, personal leather goods, belts, and leather-goods novelties this segment of the pocketbook industry employing over 40 percent of the total number of our workers, has dwindled from $200,000,000 at wholesale in 1946 to $135,000,000 in 1951.

The financial position of our manufacturers is precarious. If there were only a congressional committee or a Senate committee hearing today or any other day to investigate the struggle of our manufacturers to maintain themselves in business and the plight and fight of our workers for their very existence.

Speaking of recession and depression in our industry, we cannot help but emphasize the fact that it is the unjustified and discriminatory so-called excise tax in the amount of 20 percent on one hand, and the lowering of the tariff rates from 35 percent to 1712 percent on handbags made of reptile and to 20 percent on handbags made of other leathers—yes, these importations from foreign countries-the manufacturers of which pay their labor but a third, and in the best cases only 40 percent, of the wage rates prevailing in our shops-are the greatest contributing factors to the grave crisis in our industry, because the consuming public of America is in open rebellion against the excise tax.

You may think that the wages of the workers of our trades are rather high. We hear of late about the hourly wage rate of miners to the extent of $2.44, and the hourly wage rates of automobile workers of $2.88, of the steel workers getting $1.88 per hour. You will, therefore, permit me to quote from a survey of the Bureau of Labor Statistics, United States Department of Labor, dated April 1950-the result of which was as follows:

In March-April 1950, the average plant worker in selected leather goods plants had straight-time earnings of 95 cents per hour. Among the five branches of the leather-goods industry studied, over one-third of the workers had hourly earnings of less than 85 cents and more than one-half were earning less than $1 an hour.

Taking into consideration the value of the dollar today as against the value of the dollar in 1940, the workers of our industry, Mr.

Chairman, and I say this respectfully for your kind consideration and attention, are making approximately 421/2 cents to 50 cents an hour.

You asked a question before, Mr. Chairman, of why there was a depression in our industry, in the soft-goods industry? My answer is that the wage earners of the country, which are the bulk of our consumers have no dollars to spend on handbags or, for that matter, on any other things.

As you well know, the worker has to live all year round, pay rent all year round, eat every day, not to speak of doctors' bills, dentists' bills, the bills for a little life insurance, et cetera-but, there is no steady employment. There is great unemployment in our tradesthere is great unemployment instead.

Yes, when is a congressional committee or a Senate committee going to investigate the plight of our manufacturers, the plight of our workers, the plight of our trades instead of devoting a whole lot of time to customs simplification bill H. R. 5505? They call it customs simplification bill. My workers-and I represent more than 35,000 in various respective trades-call it the customs assassination bill. Coming now on top of an excise-killing bill and a cutthroat import duty reduction bill, that is the way we feel about it.

Mr. Chairman, and I am here to tell you, we are told that the State Department, the Mutual Security Agency are in favor of the so-called customs simplification bill, H. R. 5505, and are urging favorable action on the bill because cuts in United States Custom red tape would encourage European exports to this country, and that the bill, if passed, would remove the complexities and uncertainties of custom procedures which have been a major deterrent to European exporters new to the American market. Yes, the State Department, the Mutual Security Agency, and all other Government agencies are very much concerned about European exporters-American importers they are even concerned about the living standards and conditions of the people of India, North Africa, South Africa, Asia, South America and the people all over the world. We should be concerned with the lot of the people all over the world—and, by the way, I am one of those who believes, together with that great American, now deceased, Wendell Willkie-yes, I believe in one world. But, gentlemen, of the jury-and you are the gentlemen of the jury, the members of the Finance Committee, I am here to tell you that the handbag, luggage, and personal leather goods industry needs a point 4 program of our

own.

We are passing through the gravest crisis in our industry. Our markets are contracting, the volume of business is growing less, the competition is more keen, the vast majority of our manufacturers claim that they are hardly breaking even, not to speak of making profits, the pay envelopes of our workers are shrinking, and for many a month during the year they see no pay envelope at all. Are these factors none of your concern? Are these ailments of no concern to our Government in general and its various agencies in particular? Is there no one to care for the little fellow? Is this so-called customs simplification bill, H. R. 5505, going to pass because we are too poor to have a lobby of our own, too small in numbers to influence decisions of our legislators, too insignificant, too unimportant as trades and industry, though we are essential trades and industry-yes; is it