Monthly summary of net sales billed by all member companies, as per Nov. 30, 1954, issued Dec. 31, 1954

NOTE.-Copies of the report showing monthly and annual figures for 1934-53 are available on request.

The CHAIRMAN. Mr. W. C. Carpenter, vice president, the R. Thomas & Sons Co., is the next witness.

Mr. Carpenter, will you please give your name, address, and capacity in which you appear?

STATEMENT OF W. C. CARPENTER, VICE PRESIDENT, THE

R. THOMAS & SONS CO., LISBON, OHIO

Mr. CARPENTER. Mr. Chairman and members of the committee, my name is W. C. Carpenter. I represent the R. Thomas & Sons Co., of Lisbon, Ohio.

The CHAIRMAN. You may proceed.

Mr. CARPENTER. I am prepared to make the following statement in behalf of my company:

To begin with, the R. Thomas & Sons Co. could be considered representative of the group of companies which manufacture highvoltage electrical porcelain insulators in the United States. We are now placed in a position of peril because of low-wage competition from abroad and in particular, from Japan. We ask your understanding and beg your cooperation in considering our case. We hope that our statement will be considered a constructive one. Like you gentlemen, we, too, are citizens. We, too, are taxpayers. We, too, are consumers, and when I say "we," I include the 230 people who work at our plant and act as our agents in the field.

In the interest of clarity let me explain what we make. We make electrical porcelain insulators and that is all we do make. We do not enjoy a diversified production. We were founded in 1873 to make porcelain-not insulators. Thomas Edison and Alexander Graham Bell hadn't yet developed their inventions which made electrical insulation commercially necessary. But sooner or later good insulators were needed and porcelain proved to be the material most suitable for commercial application. We made the first line insulator and founded the industry. This is one of the compelling reasons for my appearance at this hearing. We feel somewhat responsible for the survival of the industry which we founded.

Our plant is located in Lisbon, Ohio, and the chief reason that we are located there is that this district has been the pottery center of

our country for many generations. To be a potter requires certain unusual skills not learned in schools. Potters run in families. It would almost seem that it is necessary to be born a potter. So Lisbon seemed to be an ideal place to locate our plant. Lisbon's population is some 3,500 people and the normal number of employees at our plant is about 200. We are a small company yet you can easily imagine our economic importance to this community. Our normal annual payroll is in the order of a million dollars. But our product, insulators, is not associated with the pottery industry as such. It is a part of the electrical-manufacturing industry and is specifically associated with electrical power. This, gentlemen, is a very important consideration. Our customers are the Nation's power and light companies, various manufacturers of high-voltage electrical equipment, such as Mr. Reed spoke of this morning, of which our insulators are component parts and various governmental agencies identified with public power. It is from our strings of suspension insulators that power cables are suspended from the transmission-line towers. Line voltages now in use are as much as 330 kilovolts. Use of even higher voltages are under consideration. Imagine the dielectric and mechanical strength required of insulators for such service. We are not dealing here with prettily decorated dishware or porcelain figurines. We are dealing with the working parts of a power giant which is intimately tied in with our national defense and with human safety. Insulators are really very important. Our atomic-energy projects, our huge electrical facilities at TVA and at Bonneville in addition to the admittedly marvelous networks of privately operated electrical systems throughout America could not exist without insulators.

Now, why are we in peril? What makes us vulnerable to foreign competitors? The factors which have made our electrical systems the marvel of the world are standardization of parts and constant research. Over the years our industry has developed standards involving dimensions, rigid design characteristics, electrical and mechanical characteristics, testing procedures, and the like. Because of this standardization, interchangeability of parts becomes possible. This is highly desirable because if a disaster or sabotage should cripple a particular insulator company, like parts could be supplied by the others in the industry. This is definitely in the national interest. But it also makes us sitting ducks for the foreign competitior. He can copy and duplicate our insulators to the last detail and does so, all without the expense of research and development, all without promotional costs and with access to the same modern equipment available to us for manufacture. Sometimes we feel that our Government itself is bending over backward to act as a sponsor or an angel to strengthen this parasitic situation. I hope that I have been able to make our vulnerable position clear to you. Theoretically at least, the foreign competitor can make an insulator which will satisfy our own standards.

But the peril is an economic one because of the extremely low-wage rates abroad. I can think of no company making component parts of a high-voltage transmission line whose labor costs are less than 30 percent of total costs. Our own are more likely to be 45 percent. Foreign-wage rates are admittedly one-tenth to one-third of ours. This differential cannot be made up by any labor-saving machinery which has not already been made available to the foreign manufac

turer. And management techniques are not likely to overcome both this hurdle and that of high taxes. So over half of our costs are loaded against us to the tune of 10 to 1 in the case of Japan.

I mention Japan specifically because they were able to underbid us recently on a very substantial requirement of high-strength suspension insulators for use on Bonneville's vital 330-kilovolt transmission line. Their bid was lower than all competitors, even allowing for the prevailing duty on insulators and the application of the 25percent factor under the Buy American Act. Although we strenuously opposed this purchase from the Japanese on many grounds, the purchase was authorized. There were 44 carloads of insulators involved. With a plant capacity of a carload per day, Lisbon, Ohio, alone was denied 8,800 days' work which our own Government blithely exported to Japan. The suppliers and carriers of our own raw material were also affected. By the purchase of Japanese insulators our own Government has established a precedent for further purchases. The Japanese manufacturer is now soliciting business from our utilities and manufacturers outside of government as shown by the attached sales letter marked as "Exhibit A." I have it on the back here.

The CHAIRMAN. Without objection, it may be included in the record. (The letter referred to is as follows:)

EXHIBIT A

E. J. GRIFFITH & CO., INC., Portland, Oreg., November 14, 1953. GENTLEMEN: As a manufacturer of disconnecting switches you are undoubtedly interested in purchasing high-quality bus and switch insulators at the lowest possible prices. We believe that we can do just this for you.

We are representing Nippon Gaishi Kaisha, Ltd. (Japan Insulator Co.), of Nagoya, Japan. They are one of the leading porcelain-insulator manufacturers in the world, exporting to many countries.

Recently, we were awarded a contract by the Department of the Interior to supply Bonneville Power Administration 100,000 units of 25,000 pounds suspension insulators. The contract was awarded to us after our insulator passed tests much more severe than those recommended by AIEE.

The tests conducted at Stanford University and Oregon State College showed that our insulator is superior to the domestic manufacture in majority of the specifications and inferior in none.

Even with this extremely high-quality insulator we are able to save the United States Government approximately $150,000 for the 100,000 units.

At no expense to you we will determine for you the amount of saving you can make with our insulators. All we need is the specifications and the quantities of insulators which you are interested in purchasing.

Please keep in mind that the high quality of our insulator has been proven by impartial tests made in laboratories of American colleges. If we are able to offer you insulators which meet your specifications, the reports of the tests will be made available to you.

Your very truly,

HANJI AKIYAMA.

Mr. CARPENTER. Further lowering of the bars to our foreign competitors will indeed be tragic to contemplate.

To whose interest is it that we export our workers' good jobs and import cheap wages? Unlike in Europe and in the Eastern countries, our Nation was not built around the man with the house on the hill. The United States was built around the man with a job. That is why the United States is prosperous. And in this year, 1955, everyone in the free world might well have prayers for flourishing commerce in the United States for, in its absence, their own difficulties 57600-55-pt. 1- -66

will be greatly increased. As I see it, although we have a stake in the prosperity of other nations, other nations have an even greater stake in our prosperity. Our position in the present military situation is obvious. We can fulfill our responsibilities only when and if we are economically strong.

Recognizing, therefore, that our company should remain strong; that our contribution to the national defense should not be interfered with and certainly not be transferred to a foreign supplier who might, in a showdown, turn out to be an enemy; recognizing that we are exceptionally vulnerable to foreign competition in spite of our own progressive efforts, recognizing that we have already been injured by the exporting of 8,800 days of work to Japan and are faced with untold similar situations, we ask that, in the case of our company and our industry, the trade barriers not be weakened but that they be strengthened.

If from other testimony presented in these hearings, liberalizing of trade seems desirable, it should be on a selective basis. We advocate the import of manufactured goods and materials not in competition and which are necessary for our own industrial and defense products. We believe that we should furnish marketing and selling techniques to other countries so that they can develop their own domestic markets. Consumer-credit facilities, for example, are almost unknown abroad. With a lively domestic market on the order of our own, foreign countries would not be so prone to blame their troubles on the United States.

We are aware that current press and editorial opinion seems to favor lowering of present trade barriers. Possibly this is explained by the fact that publications do not as yet see foreign competition in their own field. Nor do mass production industries. But because of the greater use of labor in manufacturing insulators as compared with mass-produced items we are definitely opposed. To add 1 man in a mass-produced industry because of increased foreign business could easily eliminate 2 men in our industry from which tariff protection has been reduced or eleminated. Our employees buy automobiles too, and they subscribe to periodicals.

In conclusion, we ask that in your deliberations on this vital matter, you attach deserved importance to the national interest of our company and the industry which it founded. In our case, strong protective measures are highly desirable. Without them we could easily be forced to close our doors.

Thank you for permitting me to present our case in opposition to H. R. 1 under consideration before the committee.

The CHAIRMAN. Does that complete your statement, Mr. Carpenter? Mr. CARPENTER. Yes.

The CHAIRMAN. We thank you for your appearance and the information you have given the committee.

Any questions?

Mr. JENKINS. Mr. Chairman?

The CHAIRMAN. Mr. Jenkins will inquire.

Mr. JENKINS. Mr. Carpenter, I want to compliment you on your fine statement, and I know something about your company, and I am glad that you have come here to defend your liberty and your freedom and your right to live.

Mr. CARPENTER. I appreciate what you have said, sir.

The CHAIRMAN. Thank you for your appearance and the information given to the committee.

Mr. CARPENTER. Thank you, gentlemen.

The CHAIRMAN. The next witness is our colleague the Honorable M. G. Burnside. Mr. Burnside, we know you well, but for the record will you follow the customary procedure and identify yourself.

STATEMENT OF HON. M. G. BURNSIDE, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF WEST VIRGINIA

Mr. BURNSIDE. Mr. Chairman, I am M. G. Burnside, Congressman from the Fourth District of West Virginia. Much of the pottery which is manufactured in the United States is made in my State of West Virginia and a good percentage of it is made in my district.

The manufacture of pottery is not a large industry when compared with some of this country's mass-production manufacturers, but in my district and in the State of West Virginia the industry is most important. It furnishes employment to many of our people. It flourishes in small towns where it is often the sole employer. It uses materials native to the locality which are valuable only for production of pottery. The loss of this industry in our State would be doubly unfortunate; not only would raw materials abounding in West Virginia be wasted, but, even more important, the already critical unemployment situation would be made even worse, and the widespread human suffering in West Virginia would be intensified.

Loss of this industry is the result which we may expect from further tariff cuts on imported pottery. Domestic pottery has already been hard hit by tariff reductions. I understand since January 1951 employment in pottery plants has decreased about 30 percent. It is further understood that profits from 1951 to 1954 have decreased about 50 percent. During this same period the amount of pottery imported into this country has increased, even above the very high 1951 level. The pottery people I have talked to think that reductions in import tariffs already effected under the Trade Agreements Act have brought much of this trouble into being. They feel definitely that further injury now threatens them by the three proposed reductions in tariff authorized by H. R. 1. Their fear is especially directed to Japanese importations.

The pottery industry in this country feels that it has done everything within its power to streamline the industry. Of course, the American chinaware industry is the most highly mechanized of its kind in the world. Since the people of the industry have made their industry the most efficient, they feel that the acts of their Government proposed here, will be a method to rob them of their livelihood.

I am sure that further tariff reductions would eventually eliminate practically all manufacture of pottery in the State of West Virginia. I am convinced that lower pottery tariffs are completely unjustified because domestic-made pottery is prevented from competing with foreign pottery, not because of the competence of foreign manufacturers, not because of the inefficiency of American methods, not because of the superiority of foreign goods; but solely because of the dangerously low-wage scales prevalent in pottery manufacturing