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pective population growth, we must anticipate supplying a steadily increasing demand.
This is particularly true in relation to albacore or white meat tuna which is sold at a premium over other tuna. The supply of this fish is extremely variable. The only known resources to date are off the coast of southern California and Mexico; the Pacific Northwest coast; and another off the coasts of Japan. The California resource disappeared completely in the 1920's, returning in the 1930's; the Pacific Northwest resource appeared suddenly in 1938, remained evident until 1950, and then disappeared completely for 5 years, returning in a minor way in 1956. The Japanese resource's history indicates an extremely variable production. At its best the production of this fish from all sources has not been sufficient to meet the market potential. Imports are a direct necessity if the American market demand for this type of tuna is to be satisfied.
Imports of this type of tuna constitute 90 percent of this company's receipts and only 18 percent of the total canned tuna production of the American industry.
TARIFFS AND QUOTAS
In considering the application of tarffs and/or quotas on imports of tuna, a clear distinction should be made as between imports of frozen tuna as compared to imports of canned tuna.
We believe that it is against sound long-range economic principle for this Nation to impose either tariffs or quotas on raw materials imported into this country for manufacture here.
This country is dependent upon outside sources for much of its raw material and is becoming increasingly so as the years go by. Without the ability to import freely, and at costs so the finished product can compete in the market place, millions of dollars in current payrolls would be nonexistent and many of our great industries could not continue their present volume of operation.
This situation applies to the importation of frozen tuna into this country. Costs of bringing this raw material to the United States are high enough to overcome any advantage of other nations relative to the cost of catching the fish. Foreign nations adjust their selling price to the domestic market. This tuna once in the United States acquires domestic manufacturing costs and when it finally reaches the retail market must be sold at the same levels as the domestic product in order to realize a reasonable profit. Its manufacture creates pay. rolls here, not only direct but also indirect payrolls, based upon large purchases of cans, salt, vegetable oils and other elements that go into the processing of the canned product. Herein lies the difference between the importation of raw materials as compared to the importation of finished articles. They do not create any substantial payrolls, or new employment. In the case of this company, the ability to import frozen tuna on a tariff-free quota basis has enabled us to maintain for almost 12 months each year this community's most substantial single payroll. The fact that this company was able to continue in the tuna business through these imports, enabled it, when albacore tuna appeared suddenly again off our coast, to help American fishermen by purchasing substantial quantities. Other processors who had abandoned the tuna business when the local supply disappeared were unable to do this. Their facilities were not prepared and, most important of all, they had no established markets.
We believe in a reasonable but not prohibitive tariff on manufactured articles sold to us by friendly nations at rates which tend to level out the advantages of the lower wage and manufacturing costs of such nations.
We believe that our laws relative to reciprocal trade agreements should be amended so that no nation, under the favored-nations clause, would be permitted to use rates established in an agreement by the United States with another country, in relation to specific commodities which that latter nation does not produce or import.
The greatest damage done to the domestic tuna industry as related to imports has resulted from an unusual condition, which permits the importation of tuna canned in brine at 1242 percent ad valorem duty. The duty on tuna canned in oil is presently fixed at 35 percent ad valorem. This variation in duties is as inconsistent as having one tariff for black shoes and another for brown shoes.
Exporters of tuna discovered in 1950 that in making a trade agreement with Iceland in 1943 this country had included a “basket" category covering duty on "fish canned in brine.” Tuna had been historically canned in oil and a duty fixed after careful studies of competitive costs at that time. Basing their action upon the Icelandic agreement, some foreign exporters began to can tuna in
brine and, taking advantage of the 1242-percent duty, have sent that product into this country on a basis that enables its sale at 6 to 8 cents a can lower than the price which must be asked for the product processed here. The threat of competition from this low-priced finished product has done much to demoralize the domestic market. It should be noted that Iceland never has and does not now produce or export canned tuna. This example is cited to illustrate the need for our request above that no "favored nation” be allowed to make use of a United States agreement with another nation to obtain a tariff advantage in relation to a product which the nation with which the agreement was made does not produce or export.
We are cognizant of the need of this country for foreign trade and also its need, from a world-defense angle, to maintain as far as possible the economies of friendly nations. In this respect we would point out that Japan, the principal exporter of frozen tuna, is the biggest purchaser of American agricultural products in the world and that nationwide the benefits from their purchases of commodities which we most need to sell are important factors in supporting our own economy. We feel, in view of this fact, this Nation would not be acting in its best interest to in any way limit or curtail the imports into this country from Japan, or any other friendly nation, of a raw material which is needed in our markets and which, through its manufacture here, adds to payrolls and employ. ment. It might be noted in this connection that Japanese credits obtained by the sale of frozen tuna in this State have been applied to large purchases of wheat and barley, items which this area must export. In fact, Japanese purchases, as indicated by export shipments from this area, are many times the amount of credits they obtain through the materials they send into this area.
Again we wish to reiterate that this country represents the only substantial market for the world tuna resource and that any limitation upon the free importation of this fish as raw material for manufacture here will result in its arrival here as a finished product, with no direct benefits to our economy.
We respectfully urge that you give consideration to our request for maintenance of the free flow of raw materials into this country and amendment of our laws so as to prevent, in the future, such an incident as created the situation discussed above, of two radically different tariff rates for practically the same item. Respectfully yours,
COLUMBIA RIVER PACKERS ASSOCIATION, INC.,
HOUSE OF REPRESENTATIVES,
Washington, D. C., October 10, 1956. CLERK, SUBCOMMITTEE ON TARIFFS, CUSTOMS, AND RECIPROCAL TRADE, House Ways and Means Committee, New House Office Building,
Washington, D. C. DEAR SIR: I am enclosing herewith a copy of a letter I have received from one of my constituents, Mr. Tom E. Moore, New Scotland, Cumberland, Va., concerning the import duties on bagpipes, kilts, sporrans, etc.
I would greatly appreciate any consideration given by your group in behalf
W. M. ABBITT.
CUMBERLAND, VA., Scptember 29, 1956. Hon. WATT ABBITT,
Appomattox, Va. DEAR SIR: I am in the business of importing bagpipes and the accessories appropriate for bagpipes and pipe bands for sale in the United States. The instruments and equipment, including kilts, sporrans, spats, reeds, and many other items of apparel, are singularly and peculiarly useful to pipers and to pipe bands, and generally to no other group of people.
No similar manufacture exists in this country. There are not more than a dozen or so custom-made instruments produced on these shores, in an entire year. And insofar as I have been able to discover, there is no manufacturer in the United States desirous of starting manufacture of such goods.
Strangely, pipes and their immediate accessories are taxed 15 percent; kilts are taxed 2342 percent plus $0.375 per pound of weight; and sporrans are taxed, I believe, at 50 percent. The reason is simple: Pipes are woodwind instruments, kilts are woven woolen clothes, and sporrans are purses. The reasoning, however, escapes me.
The question that comes into my mind as I buy my imports again at the customs office (the cost is passed on to the customer), is this: Are these taxes supposed to be protective or are they supposed to be punitive? If they are protective, what are they designed to protect? If they are not, they must be punitive and discriminatory against the relatively few people who wish to buy and play these instruments, or wear the Scottish garb. It is in this light that I am lodging my protest with you, hoping that action may be undertaken to do away with the entirely unjust and extremely singular duty levied against us.
I play in the Washington Scottish Pipe Band, and if the House of Representatives wishes to see pipers in the flesh, and see the exact implications of what I have to say, I can assure you it would be convenient for us to put in an appearance which would long be remembered in the Halls of Congress.
Would you kindly give this problem some thought; and, if the possibility exists that persons of Scottish or Irish descent can be elevated above the level of secondclass citizens, I should very much appreciate your kidness in taking appropriate action. Very truly yours,
Tom E. MOORE.
ELKHORN, Wis., October 10, 1956. Hon. HALE Boggs, Chairman, Tariff Subcommittee, Committee on Ways and Means,
House Office Building, Washington, D. C. DEAR SIR: Our attention has been called to the fact that the Tariff Subcommittee of the House Committee on Ways and Means has just recently concluded hearings with respect to the operation of customs, tariffs, and trade agreements. While hearings have been completed it is our understanding that statements from interested parties will be accepted for your files until October 15.
Due to the shortness of time we will not have an opportunity to make a detailed statements of our position and experience under administration of current laws.
We want to go on record, however, as being very unhappy with and very discouraged with the administration of these laws to date. In our opinion the effect of such administration on the woodwind musical instrument industry makes a travesty of the word "reciprocal" in the connection with the present Tarif Act.
In the first place our tariff at 15 percent is considerably below nominal tariffs granted on similar products by England, France, and other countries which export to the United States. Worse yet, exchange restrictions and other devices are used to make it practically impossible to export any instruments including brass wind instruments to the same countries. We would never be able to export in large quantities to these countries, of course, because of the very great difference in labor costs which are nowhere near equalized at the tariff of 15 percent levied by United States Customs. Nevertheless, we are denied the opportunity of fighting back. It is incomprehensible to us that our Government would leave the domestic industry exposed and defenseless while not insisting on fair and equal treatment from the countries who have been given such favors and opportunities.
In 1952 five members of the domestic woodwind industry appealed to the Tariff Commission for relief under the escape clause embodied in the Tariff Act. The Tariff Commission rejected our application for relief indicating that it found no serious damage taking place to the industry or threatened. Yet in the years since that finding, 2 of the 5 petitioners have gone out of business because they could not compete with these imports. A third petitioner who happens to be the largest band-instrument manufacturer in this country if not in the world has discontinued the manufacture of woodwind instruments entirely because it could not compete. We don't know what is required in order to show injury but apparently you have to be dead before you can show that you are hurt and, of course, after you're dead you can't say very much-at least we have never found it so.
Both of our great political parties have talked frequently and strenuously of their interest in protecting small business and small industry. Yet the record is full of instances in which small industry has been denied relief while the large mass production industry retain most if not all of their tariff protection and, in any case, have gobbled up the dollars which have been legislated away from small industry.
Gentlemen, the country's economy probably won't miss the few hundred jobs which are affected by our industry but if this continues to be policy of our Government and this country ever does encounter a depression or recession the many hundreds of small factories and industries we might have had are going to be sorely missed for the jobs they would have provided. Yours very truly,
FRANK HOLTON & Co.,
Executive Vice President.
ELKHART, IND., October 10, 1956. Hon. HALE Boggs, Chairman, Tariff Subcommittee, Committee on Ways and Means,
House Office Building, Washington, D. O. MY DEAR MR. Boggs: We were one of the musical instrument manufacturers who previously requested relief under the escape clause, which relief was most essential if we were to continue the manufacture of woodwind instruments in our factory.
Inasmuch as the application for relief for our group, classification 1541A, was rejected, we have been forced to discontinue the manufacture of woodwind instruments in our factory due to our inability to compete with manufacturers of foreign-made woodwinds, which manufacturers are fully protected by the unjustly low tariffs on imports and such other advantages as subsidies paid by the French Government to aid the French domestic exporters. Although it is essential that we manufacture a complete line of both brasses and woodwinds, yet under existing conditions we are faced with the problem of operating our woodwind department at a decided loss or suffer the undetermined loss of both brass and woodwind business if tariff protection against foreign woodwinds will not permit us to soon resume the manufacture of a complete line of band instruments (which most definitely includes woodwinds).
While protection on woodwinds is imperative at this time, yet we also urge that consideration be given to protection on brasses whose imports are continually increasing.
We urge that your industry give careful study to the applications our bandinstrument industry has previously filed and that relief be given us without further delay. Sincerely yours,
BUESCHER BAND INSTRUMENT Co.,
BOSTON, MASB., October 4, 1956. Hon. HALE BOGGS, Chairman, Tariff Subcommittee, Committee on Ways and Means,
House Office Building, Washington, D. C. DEAR MR. Boggs: Enclosed are copies of my statement which I think will be of interest to your committee and its staff.
Various individuals have appeared before your committee at the recent hearings and made statements advocating low tariffs. That is, it seems, on other products, not their own.. I have checked the tariff or restrictions on their particular commodities. I am sure you will want to include this information in your files: Mr. Charles H. Percy, photographic equipment, classification No. 228, tariff
50 percent, not reduced at the recent Geneva Conference. Mr. Eric Johnston, film, classification No. 1551, a high specific tariff, not
reduced at Geneva. Mr. Stanley H. Ruttenberg, AFL-CIO—Limitations on immigration, pre
venting additions to the American labor market. Restrictive rules and
high initiation fees limit entrance of workers to specific trades. Others similarly testified before a congressional committee 2 years ago, at the time of the Geneva Conference. One of them, Secretary of Commerce Weeks, advocated lowering tariffs; however, he did not mention that his business interest-snap fasteners—has a high tariff of 60 percent, and surprisingly, in view of his testimony, his tariff was not reduced at the Geneva Conference.
I would gladly swap the tariff on my commodity with any of the tariffs on the commodities of those who have testified.
I think the records should also show how tariffs are again being used for political purposes. Last week, the tariff on woolens was temporarily raised for the remainder of 1955. Or, stated in another way, "for the duration" of the election. Of course, this is quite helpful to the woolen mills in Maine, but I do if any action would have been taken if Maine had gone Republican as usual last September. Very truly yours,
THE CUNDY-BETTONEY Co., INC.,
STATEMENT OF ARTHUR E. HASTEDT, VICE PRESIDENT OF THE CUNDY-BETTONEY Co.
I appreciate very much the opportunity of presenting to this committee, my comments about the escape clause, antidumping, countervailing duties, and restricted trade practices engaged in by foreign countries.
The Cundy-Bettoney Co. was 1 of 5 woodwind instrument manufacturers who requested relief under the escape clause on April 29, 1952, for woodwinds, classification 1541A. Our group, like almost everyone else who made application for relief under the escape clause, was turned down.
We were turned down, even though the Tariff Commission in their report, dated April 28, 1953 (1 complete year after the filing of the petition), stated that employment had decreased from 1,300 workers in 1939 to 1,150 workers in 1951, and 900 workers in 1952. The report stated: “The imports of clarinets, which is the largest subclassification of woodwinds, increased from 18,277 in 1939 to 44,420 in 1952.” The report also showed that the domestic production was 50,336 in 1939 and 47,995 in 1951. They also stated: “There is no evidence that the conditions prevailing in 1952 represented the beginning of a downtrend in the domestic industries."
Since April 1952, 2 of the 5 petitioners have gone out of business. One more has discontinued the manufacture of woodwind instruments. At least two other woodwind companies, not petitioners, have gone out of business. Imports of clarinets in 1955 increased to over 72,000, while the American manufacture of clarinets decreased. It can readily be seen that the Tariff Commission's crystal ball was somewhat clouded.
We are decidedly a handcraft industry where labor is over 70 percent of cost. I quote from the Randall report on page 52: "Here, quite obviously, with labor the major cost, imports cannot only be serious, but destructive to the domestic industry without a tariff." The original tariff of 40 percent did not adequately cover the basic cost differential between the United States and foreign countries. The reduction of our tariff to 15 percent has aggravated this situation to an extreme extent. The net result has been that the foreign instrument has taken over approximately 80 percent of the domestic market which was greatly developed by the American manufacturers through their efforts in fostering the school music programs.
It should be mentioned here also that our handcraft industry had inadequate tariffs in 1930 because of a lack of political skill or cortacts, and have also received tariff cuts whenever negotiations have taken place. Mass-production industries, who according to the Randall report need no tariffs, had excessive tariffs in 1930 which have not been reduced to their theoretical proper level
. Generally speaking, tariffs have been reduced on a percentage basis without consideration of the individual cases. I believe this is well understandable, when we realize that our negotiators have 40,000 items to consider in a very few weeks. The time allowed per item becomes infinitesimal.
There are certain regulations that are made from time to time which may be of interest to this committee. For instance, a few years ago the Treasury Department ruled that musical instruments could be imported with paper labels stating country of origin. As opposed to this, this committee may be interested in the required marking of razor blades, which, as you know, are a mass-production industry, and one domestic manufacturer controls practically 90 percent of the business. In addition to a present excessive tariff on manufacturing costs, foreign blades must be stamped in a manner not required by the domestic producer.