CONGRESSIONAL RECORD -- SENATE

June 30, 1969

Page 17771

Mr. MCINTYRE. Mr. President, I commend the distinguished Senator from Georgia (Mr. TALMADGE) for his fine statement with respect to the textile industry and his reference to the threat that the flood of foreign imports is having on that industry. I have found, since I came to the Senate, that when the Senator from Georgia speaks, he speaks with well-documented and sound facts.

I also wish to commend the able Senator from North Carolina (Mr. ERVIN) who has just recited the problems in his own State, the great State of North Carolina, of the textile and apparel industry.

Mr. President, let me comment on the remarks of my senior colleague (Mr. COTTON) with reference to Mr. Gilbert who, apparently, is to be proposed by President Nixon to an important position. While I have no views on this at the present time, I will certainly check into it, because I agree with my colleague that we need very badly to have a real traumatic experience on the floor of the Senate so that not only the administration but also countries like Japan and Italy, and others, will begin to realize that we do mean business.

Second, the distinguished junior Senator from Maine (Mr. MUSKIE), whose efforts over the years to bring a measure of relief from imports to the shoe industry are well known, had hoped to be present in the Chamber today to add his voice to this discussion. Regrettably, he is unable to be present today, but he had a prepared statement to be delivered. Before I ask unanimous consent to have it printed in the RECORD, I might say that I came here today to talk about a problem that is affecting the State of New Hampshire, the State of Maine, in fact all New England -- I guess the whole country.

The textile industry has problems, as I know from my own experience.

But the real crises in New Hampshire today is the one faced by the shoe industry.

As I said, the Senator from Maine (Mr. MUSKIE) cannot be here today and has a prepared statement, which I now ask unanimous consent to have printed in the RECORD.

There being no objection, the statement of Mr. MUSKIE was ordered to be printed in the RECORD, as follows:

STATEMENT OF SENATOR EDMUND S. MUSKIE

The shoe industry in America is confronted with the critical problem of foreign imports. Many small shoe companies are being forced out of existence by a combination of high labor input, narrow profit margins, and limited capital resources.

Let me outline briefly what has happened on a national scale. In 1957, before foreign manufacturers discovered the American footwear market, total imports of leather vinyl footwear amounted to 7.8 million pairs valued at $13 million. At that time there were some 970 American shoe companies operating 1,196 factories which produced 585.4 million pairs of shoes and slippers a year. Imports amounted to only 1.3 percent of U.S. production.

In the early 1960's, as their economies progressed, other nations began to realize that the American market was wide open to them. Shoe imports to the United States began to climb -- to 36 million pairs in 1961, 75 million pairs in 1964, 96 million pairs in 1966.

In 1967, imports soared to over 129 million pairs of leather and leather-type footwear valued at $217 million. This was almost 22 percent of our domestic production -- much greater than the impact of steel, which has been afforded relief through legislative action.

Domestic shoe production in that same year was 600 million pairs, only two million pairs above 1957.

In 1968, imports increased again by some 36 percent to over 175 million pairs valued at $329 million. Even though domestic production reached an estimated 646 million pairs, imports climbed to 27 percent of total domestic production.

Why is it possible for shoe imports to make such inroads in our home market? This development is partially a result of the offer of something new and different to consumers. But the bulk of shoe imports came because they are produced by low-priced labor; because they are lower in price than American shoes; and because they provide retailers with a higher margin of profit.

The hard fact is that practically all imported shoes are priced to undersell comparable American-made shoes while offering retailers a higher markup.

It is the price advantage that makes the difference. Imported shoes sell at prices from $2 to $5 less than U.S. manufacturers can afford to sell them. Often the selling price of foreign footwear is below the price at which U.S. manufacturers can make them. This price difference results from the fact that foreign shoes are made by shoe workers earning one-half the wages and fringe benefits paid our own workers in the United States.

The effect of this flood of foreign footwear on American shoe manufacturers has been critical. The number of shoe companies in the United States has dropped to 700 operating less than 1,000 plants. Some of this decline may be attributed to normal attrition within the industry. But it is significant that the number of shoe firms going out of business has accelerated with the radical increase in imports. And most of these companies can trace their failure to their inability to compete in price with imports.

Footwear imports have meant the export of jobs which should have been performed by American workers.

During 1968 there were an estimated 64,200 job opportunities lost in this industry because of imports. By 1975, it is estimated that 168,600 job opportunities will have been lost for this same reason.

If this situation continues, it will inevitably mean the loss of hundreds of shoe factories and thousands of jobs in many small towns and cities where shoe manufacturing makes an important contribution to the economic life of the community.

It will also discourage investment in new shoe plants that might otherwise come to these communities. No manufacturer is going to risk an investment of from $500,000 to $2 million in new plants and equipment when he faces price competition of this sort from importers. Thus, the community's opportunity for growth through expansion of its shoe industry will be lost -- unless something is done soon to relieve the import problem.

I have joined in the request for voluntary limitations on footwear imports which will be made to President Nixon. I hope these voluntary limitations will be achieved, and I hope they will work.

If they are not soon reached; or if they prove to be ineffective, legislation to enforce an orderly marketing plan for footwear will become essential to the economy of my State, New England, and many other parts of the Nation.

The parallels between the problems of the shoe industry and the textile industry are clear. Both must have prompt and effective help.