Additional facts underscore the immediate need for legislation to protect our steel industry from excessive imports.

In the short time since the end of World War II the U.S. share of world steel production has plunged from 61 percent to 26 percent, while Japan's has increased tenfold, Italy's has tripled and the Soviet Union's has doubled. This drastic shift in world steel production is partly due to two basic positions of U.S. foreign policy. First, shortly after World War II the United States began to pour money and "know-how" into the shattered war nations and this enabled many of them to build modern steel plants. Today those plants-operated by workers who only earn a small percentage of the wages paid to American steelworkers-are rapidly taking over the U.S. market. Secondly, the U.S. foreign trade policy has operated on the naive assumption of fair competition among all nations. In reality, we have anything but fair competition today. Most foreign steel producers receive assistance from their governments in numerous ways to compete against U.S. steel producers. For example, in most important steel producing countries of Western Europe, the domestic tax system provides incentives for exporting steel at low prices and offers stiff penalties for American steel imports.

The greatest threat of these excessive imports is to our own working people. It is well to remember that as we import steel we may also be importing unemployment and sacrificing jobs at home.

One of the most serious results of cheap steel imports is the shrinking employment opportunity in the steel industry. About 6,400 people are now employed in our steel plants for every million tons of finished products shipped in a year. An additional 1,300 persons are involved in coal and ore mining and transportation. Therefore, 7,700 American men and women are employed for every million tons of domestic steel mill products shipped. In simple language, the 11.5 million tons of steel imports sold in this country in 1967 represents the export of over 84,000 jobs that have gone abroad.

The employment situation may become even more critical when peace comes to Vietnam and the boys in uniform come home and begin to look for jobs. The steel companies may not be able to help absorb the returning servicemen unless action is taken to stem this high tide of steel imports. This possibility is even more shocking when you consider that most of those imports which are hurting U.S. companies are produced in countries that have done absolutely nothing to help us in the Vietnam war.

On the other side of the coin, this import deluge threatens the wage standards of thousands of steelworkers. U.S. wages in steel in 1967 averaged about $3.50 per hour more than in Japan and $2.75 above West Germany. This wage gap is larger than it was in 1952. The labor costs per ton of steel are about $59. This compares very unfavorably to that of Western Europe, $29 per ton; and Japan, $18 per ton. It is easy to see why foreign steel prices beat American prices by as much as $40 per ton or 25 percent. Partly because of these cheap production costs abroad, American steel companies and labor are forced into a wage-price confrontation spiral. Steel officials state they cannot match the low price of cheap imports and still pay the high wage levels our steel workers currently enjoy.

During this difficult situation, imports this year are increasing sharply because steel users are stockpiling metal against the possibility of a steel strike this summer. Thus, while our workers and

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businessmen engage in the cherished right of collective bargaining, foreign producers take advantage of us.

Despite much bravado everyone knows the dollar is in trouble. The U.S. balance-of-payments problem is getting worse. It is necessary to simply point out that the entire deficit in our balance of payments, amounting to about $1.4 billion, represents little more than the amount of the trade deficit with respect to steel, which in 1966 was almost $1 billion.

Finally, it is important to recall that we are all aware of the advantages that will accrue from the final achievement of free world trade. But it is unwise to ignore free-trade barriers. Almost all nations recognize the importance of steel production to their economies and national security, and every country has import problems. Congress must now grapple with a steel import policy, keeping in mind our own national interest. Our current policy is a failure. Congress must act now to insure a viable and expanding steel industry for our nation until other governments of the major steel producing countries are willing to discuss common interests for all nations engaged in steel production. The CHAIRMAN. Thank you, Mr. Fallon. Any questions?

The next witness is our colleague from Ohio, the Honorable William E. Minshall. Mr. Minshall, we appreciate having you with us and you are recognized.

STATEMENT OF HON. WILLIAM E. MINSHALL, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF OHIO

Mr. MINSHALL. Mr. Chairman, distinguished members of the committee, I join in strong support of a limitation on the import of iron. ore, pig iron, and steel mill products.

As cosponsor of H.R. 14120, which would provide for orderly trade in these products, I already have registered my grave and growing concern about the impact of imports on our domestic steel economy. My great state of Ohio ranks second among the Nation's steel producers and second among steel consumers. Our Ohio steel industry produces more tonnage than France and nearly as much as Great Britain. Some 90,000 Ohioans are employed in the industry, with many thousands more involved in the economic well-being of the industry.

The damage being wreaked by increased steel imports is more than a matter of State concern, of course, since it threatens the entire economy of our Nation. You have heard ample testimony from the experts as to the increasingly large share of the United States market being taken over by foreign steel imports. I would like to make part of the printed record of these hearings excerpts from the many hundreds of letters I am receiving from concerned individuals in the 23d District of Ohio, which I represent. They come from men and women. in all walks of life-from management to labor, stockholder to concerned taxpayer. They speak eloquently of the many reasons for this committee to promptly and positively report effective quota legislation to the House floor.

"The importing of steel into Ohio at the present rate is a frightening and threatening thrust at our future. For this country to endorse 'free trade' at a risk to our economy and without regard for our industry is deplorable."

"If you do not take action to stem the tide of steel imports, there will be a growing reliance on foreign sources of steel which will harm our national security and further contribute to the deterioration of this country's balance of payments.'

"It is my understanding that President Johnson has asked Congress for $350 million to subsidize the extra cost of training the first 100,000 hard core unemployed. He also announced that some 60 executives in manufacturing, banking and other fields have agreed to try to find permanent work for jobless in big city ghettos by 1971. It seems somewhat paradoxical that in the face of this tremendous effort to find jobs and the expenditures of huge sums of money that we are abdicating employment possibilities to workers in foreign countries. I am referring to the jobs that are being lost in this country as the result of the tremendous influx of foreign steel*****

"Is it necessary for foreign producers to take 15 percent of our domestic market? I am sure the many thousands of persons employed at good American wages by the steel industry want to keep it a competitive industry-as all American industry should be."

"It is fantastic to learn that $1,300,000 worth of steel was imported into the United States in 1967 and that the steel trade deficit in 1967 amounted to the staggering sum of $1,100,000,000. And further, these steel imports in 1967 reached the all time high of 12.3 percent of the domestic market for steel mill products. Steel imports in the past 6 years have skyrocketed from 3.5 million tons to 11.5 million tons. No industry and the companies it represents can possibly cope with increases of this magnitude. Action must be taken before it is too latebefore the backbone of the health of the steel industry is very seriously damaged to the extent that it never can recover."

"Owning steel stock which has been on the decline in value for some time I am concerned about the unfair situation the steel companies are in due to imports. I hope you will support a bill favorable to these companies."

"It is very discouraging to see foreign steel being unloaded in the Cleveland Port when so many tons of steel are produced here in Cleveland."

"I hope you will support the proposed Iron and Steel Orderly Trade Act of 1967. I am sure that you appreciate the importance of such legislation. This measure is not only humane in that it provides healthful living conditions for the steelworkers of the country, but it is also good business because it will monetarily assist the steelworkers and the country as a whole, as well as the manufacturers and suppliers. But perhaps the greatest benefit of all will be the security that will be assured the steel workers. I am 57 years old and would find it impossible to find other employment."

"Steel is my livelihood and I am concerned with the rising steel imports as actually evidenced by me through visual observation of the Port of Cleveland. Today, the Norwegian freighter, Rolwi is unloading 21,000 tons of coil steel which would cover 2 months booking for all of our J. & L. cold rolled sheet customers in this area ***. Our office is experiencing every day the loss of steel orders at lower prices due to labor cost advantages and tax rebates and subsidies."

"The main business of our company is supplying the steel industry with iron ore and coal and the vessel transportation thereof as well as certain facilities widely used in the pouring of steel ingots. Obviously our company goes up and down with the steel industry and it is becoming critically important that this industry shares in the growth of the economy." *

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"As a taxpayer I am concerned about the continued increase in the tonnage of steel imported into the United States to the detriment of our domestic industry. American steelworkers are deprived of jobs (and taxable income) and U.S. steel companies' tax contributions are lowered by the substantial unbalance existing in favor of steel imports."

"Many of us who work in the steel business have been concerned with the threat to our industry and to our individual job security posed by these ever-increasing steel imports."

The CHAIRMAN. Thank you, Mr. Minshall, for bringing to us your thoughts. Are there any questions? Our colleague from Illinois, Mr. Derwinski, is our next witness.

We appreciate having you with us this morning, and you are recognized.

STATEMENT OF HON. EDWARD J. DERWINSKI, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS

Mr. DERWINSKI. Mr. Chairman, it is my strong opinion that the results of the Kennedy round negotiations were detrimental to our balance of trade and to American exporters and their employees.

May I also emphasize that the present situation creates obvious problems for the domestic steel industry, which very properly deserves the attention of this committee.

I include as part of my testimony a statement I inserted in the Congressional Record on June 24, on the subject of steel imports.

We must develop an effective national policy, properly administered by the executive branch, which would work to remove artificial barriers against U.S. exports as well as providing for the competitive complications facing U.S. industry from foreign competitors who receive support or subsidies from their governments.

(The statement referred to follows:)

IMPORTS AND OUR STEEL INDUSTRY BY HON. EDWARD J. DERWINSKI OF ILLINOIS, IN THE HOUSE OF REPRESENTATIVES, Monday, JUNE 24, 1968

Mr. DERWINSKI. Mr. Speaker, the U.S. Government negotiators did not adequately serve the United States in the years of negotiations which have produced tariff adjustments. As a result, there are clearly visible adverse impacts on the American economy. One major industry which faces complications from foreign sources and which was unfortunately ignored by our governmental tariff negotiators is the steel industry.

In the fifties, steel imports from foreign nations ranged in the 1- to 2-millionton level annually. The trend changed in 1959 and the steady increase started. Students of international trade were shocked in 1965 when, for the first time in our history, imports for a single year exceeded 10 million tons.

But, as events subsequently proved, even this high figure was not to be the ceiling. In 1966, imports increased again, this time to nearly 11 million tons. In 1967, they rose to 111⁄2 million tons.

Where are they now? Figures that once we thought of only as an annual volume are now used to describe monthly inflow. An all-time monthly record of 1% million tons of foreign steel came into this country last November. December, January, February, and March each had more than 1 million tons of steel imports. These are the cold weather months when the Great Lakes freeze over; the St. Lawrence Seaway shuts down, and imports are supposed to fall. But now the pipelines of steel from abroad are so swollen that they continued to flood our shores in the winter months.

The latest blow may be found in Commerce's April figures-a new, all-time record of 1,480,000 tons. Do we realize how much steel this is? In the decade prior to 1959 when the current trend started, the imports for only three full years exceeded the total that came into this country in April alone.

In the first 4 months of this year, nearly 5 million tons of foreign steel has come into the United States. This is a new record. It represents an increase of 50 percent over imports for the similar period of last year. Trade sources estimate that foreign steel will continue to come in at this rate, at least, through the balance of this year. Consequently, imports for the full year of 1968 should total at least 15 million tons, also a record.

There are those who argue that our Government should not interfere in this trade because any steps to impede the flow of foreign steel into our land is "protectionist" and would only cause retaliation amount foreign countries. I say look at the rules of international trade. Examine the reasons why this foreign steel can so easily compete in our land with our product. Examine the help that foreign steel companies get from their own governments. Examine the openness of foreign markets to our products. Examine the policies of foreign nations in their relationship to acquiring dollars and what they must do to get them.

If the import groups that argue in our land for free trade would first establish free entry into their own lands, if their companies would operate as independently of government help as ours do, if their steel companies would abide by the same minimum wage standards for interstate commerce that our companies do, then we could complete with them.

However, the way the game is now rigged, our international balance of trade in steel costs us a deficit of more than a billion dollars last year. It may cost us a billion and a half this year. This country has too many responsibilities throughcut the world as well as at home to tolerate deficits of this nature indefinitely. They threaten our economy; they threaten our national defense; and they threaten the future of many of our citizens.

Mr. Speaker, in lieu of the points I have emphasized, it is obvious that Congress, and more specifically, the Ways and Means Committee, must give priority to the problems affecting the steel industry and other areas. It is obvious that the administrators will do nothing.

I recognize that this session of Congress is entering its final 5 weeks and if Congress is to provide the necessary legislation, we must move without delay. "Free trade" is a wonderful theory to which I prescribe to in principle. However, we as a Nation should not place our major industries in a position where artificial factors give foreign competition visible advantages. American industrial capacity is a cornerstone of our national greatness. American wage earners, consumers, investors and, in fact, all citizens have a vital stake in maintaining an economic situation within which our major industries such as steel can honestly compete.