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are not in the regular trade or business of the employer. This means, that to be subject to tax as an employer, you have to be in a trade or business or employ a worker for at least 26 days out of the quarter and pay him at least $50 in that period. The provision will aid in preventing an easy kind of fraud which is carried on at the present time, and that is where an employee receiving unemployment compensation because of separation from a covered job takes a job that is not under unemployment insurance and receives both incomes. Only an extensive, and expensive, field survey can uncover this. With all employers reporting, an easier check could be made and a psychological block erected that would stop many people from trying the scheme.

All these improvements are both realistic and helpful. Do you realize that unemployment insurance covers only about two-thirds of the employees in this country? The fact that the other third is not covered does not mean that they are always employed. In fact, they are in a worse situation than those covered by insurance. When the law was enacted in 1935, the figure 8, as the determining number for covered employment was chosen as a sort of compromise to get the thing started. It was expected to be changed soon. Well, it has not been changed in the years from 1935 to 1953. The body on this insurance jalopy is just the same as it was then. We put a great experiment on the road and let it run on in model T style over 18 years. It does not seem American. It does not make sense. The American way is to improve with time, to make the good things of life available to more and more. Beyond that, commonsense should tell us that having possibly one-third of our employees not covered by insurance leaves us in an exceedingly vulnerable position, economically speaking. For the fall in their buying power, resulting from their being unemployed, is total. The covered employees experience only a partial failure of buying power. Surely, if partial failure is harmful, total failure must be disastrous. The Under Secre

tary of Labor, Mr. Larson, has stated it succinctly:

If unemployment insurance is really a good thing for two-thirds of the workers of this country, is it not just that much better a thing for as many more as you can possibly cover administratively?

This piecemeal procedure that we are laboring under at present is liable to produce something we have never yet had in America, and, please God, never will have, and that is first- and second-class workers. But if some employees are covered by insurance and others, whom we could feasibly cover, are left out, what else do you expect? Do you think one family man working for his family has less pride than another? Why do we condemn the one to seek relief then, when he is out of employment, while the other is able to draw unemployment insurance? It is not a just method, and it will leave scars on the minds of those who are discriminated against. If such people turn against Congress because of its gross lack of interest in their wellbeing, can we blame them?

Second. Minimum standards have been set (a) with respect to the amount and duration of such compensation, and (b) with respect to the conditions under which entitlement accrues.

The responsibility for setting minimum standards for unemployment compensation is definitely on the Federal Government. We cannot agree that the responsibility should be passed on to the States. The competitive aspect among the States both as to the maximum payment amounts, and the tax rates, is too keen. On February 16 of this year, President Eisenhower and his Secretary of Labor, Mr. Mitchell, urged the States to adopt certain minimum standards. To date, only Michigan of the 26 States not having 26 weeks' coverage has acted not having 26 weeks' coverage has acted to meet the President's suggestion and extended its coverage period to 26 weeks. Now, as most of the legislatures of the remaining States have adjourned, no further action is probable. The only way, then, that we can handle the situation, is for the Federal Government to set the standards. Then everyone moves forward together, and there is no competitive disadvantage in tax or anything else. Undoubtedly the States are sympathetic to our suggestions. In fact, 32 of them, by express statement in their own unemployment compensation acts, stand ready to make an automatic extension of coverage at any time that the Federal law requires it.

What minimum standards are we proposing?

First, the maximum benefit under State laws would be not less than 663 percent of the State's average weekly wage. Subject to this maximum, each individual's benefit would be not less than 50 percent of his weekly wages. The average weekly benefit now ranges from $20 to $35. The suggested change in the law would increase this basic amount. With present day prices, this is a needed improvement. Benefits have lagged seriously behind average weekly wage. Since 1935 wages have tripled while the ceilings on weekly benefit payments have hardly doubled. When the unemployment act was passed in 1935, benefits averaged approximately 50 percent of wages. They trail far behind at the present time. The formula, also, is flexible to the base and would prevent such divergency in the future, since an annual revision as of July 1 each year is to be made by the States.

Unemployment compensation is to continue where necessary up to 39 weeks during the benefit year, whether or not there is an exhaustion or reduction of benefit rights or a cancellation of wage credits. This longer duration of the benefit is necessary because, as pointed out in the economic report of the President, the more unemployment increases dent, the more unemployment increases in amount, the longer it lasts for an individual.

The individual receiving unemployment compensation shall be qualified when he has received during his base period, in accordance with applicable State regulations, either compensation in excess of 30 times the amount of his weekly unemployment compensation, or if his qualification is based on his quar

ter wages, more than 11⁄2 the amount of such high-quarter wages, or, if the qualification is based on weeks of employment, more than 20 weeks of work. in his base period.

One other major point of clarification for the benefit of the workers is the question of disqualification. The States are permitted to set their own standards for this at the present time, and, as a consequence, many of them have set so many disqualifying conditions that they have seriously hampered the purpose of unemployment insurance. Under H. R. 9430, this could not happen. Once persons have come within the scope of the definition of insured worker and are eligible for unemployment compensation because of cessation of work, the State may deny compensation only for the following reasons:

First. The person left his job without good cause or was discharged for misconduct, in such instance the ineligibility may not continue more than 4 weeks.

Second. The person left his job due to a strike which occurred for reasons other than the failure or refusal of the employer to conform to Federal or State collective-bargaining laws, or to maintain for the employees wage rates and other conditions of work equivalent to those prevailing for similar work in the locality. Unemployment compensation may also be disallowed: (a) For the first week of unemployment; (b) for a period not in excess of 12 weeks immediately following the week in which the employee has been found, after a fair hearing, to have obtained compensation by fraud; or (c) for any week in which the person is unable to work or is unavailable for suitable work. In determining whether the work offered is suitable, there shall be taken into consideration the person's capacities, and whether or not the work available is in any place subject to a labor disagreement, paying substandard wages, or would jeopardize his union membership or require him to join a company union.

Third. H. R. 9430 makes other major structural improvements to the unemployment insurance system.

It provides for coverage of all the unemployment taxes into the Federal Unemployment Account. Against this are to be charged all funds for administration of the State laws including contingency amounts which are to be expended only in instances where the Secretary of Labor finds that changes in economic conditions in a State have increased its expenditures in conjunction with the administration of the unemployment compensation laws.

It provides for reinsurance grants to States with unexpectedly severe unemployment. These are to aid such a State in making adequate payment to its unemployed workers without compelling it to raise the level of taxes on industries in the area which are still meeting a payroll. Reinsurance grants will prevent the out-migration of industries which would otherwise be subject to a tax rate that would place them in a burdensome competitive status with industries in other States. These reinsurance grants will be just that, outright grants, and the

States will not be liable to repay them. They are, however, dependent upon meeting the following conditions: In 1955, a State will be certified for a reinsurance grant where the balance remaining in the State compensation fund is less than the amount of compensation paid from such fund during the 6 month period just preceding; for the period 1956 to 1961, the grant will be given where such remaining balance was equal to less than 6 percent of the most recent annual taxable payroll, or less than the amount paid from the compensation fund for the 2 years preceding such date; and for years after 1961, the grant will be made where the State's remaining balance is less than 6 percent of the most recent annual taxable payroll, or less than the amount paid from the compensation fund during the 5 years preceding such date. In the last two cases, the State must have been levying a tax at a minimum rate of 1.2 percent. The grant will be three-fourths of any excess over 2 percent of the taxable payroll for the quarter in which it is made.

Another major structural improvement is to allow the States greater leeway in granting rate reductions in payroll taxes. They can do it, under H. R. 9430, either by the present practice of lowering rates on an individual employer's experience rating, but basing it on 1 year instead of 3, or by a uniform reduction in the levy on all employers.

The advantage of this will be to prevent the unemployment insurance tax from being a burden to employers just starting in business, or to the small employers brought under the act as having one or more employees in their business at any time. Payroll costs are, on the average, 10 percent of the cost of doing business. The unemployment tax at its full rate is 3 percent of this 10 percent. When proper reductions, with the additional credits against tax which they allow, are provided for employers, the adjusted tax rate will be about one and one-half tenths of 1 percent in added costs. This adjustment will ease the imposition of the tax on new categories of employers.

Finally, H. R. 9430 provides that during the interim period before July 1, 1955, before the States have adjusted their laws to conform to the requirements outlined above, any State which wishes to increase its benefits in accordance with the substantive provisions hereof, may enter into an agreement with the Federal Government to receive such additional required amounts as are necessary to accomplish this purpose from the Federal Government. The Secretary of Labor shall make such sums available either in advance upon estimates, or by way of reimbursement to the State for amounts so spent.

H. R. 9430 is the only practical way to implement President Eisenhower's recommendations that payments be increased in amount. It is not a question of partisan politics; it is a question of justice. Let us render justice to those millions of men and women who have paid for it and have every right to it. Let us enact H. R. 9430 and provide an adequate solution to the problems of

unemployment insurance confronting us today.

Mr. BYRNE of Pennsylvania. Mr. Chairman, the unemployment compensation program which is before the House of Representatives today represents another milestone in the history of social legislation in this country. It closes a gap which has been open much too long by making eligible for unemployment compensation all civilian Federal employees. Certainly, our Government workers are as well deserving of these benefits as are workers in private these benefits as are workers in private industry throughout the country. I am very pleased that the Congress has seen fit to take this action.

It must be pointed out, however, that the present bill leaves something to be desired. The gentleman from Rhode Island, Congressman FORAND, recently introduced legislation, of which I am a cosponsor, which would be more comprehensive than the bill we are presently considering. Unfortunately, the Committee on Ways and Means did not report it out. Mr. FORAND has, therefore, offered on the floor of the House two amendments to the legislation before us and I am proud to be able to give them my wholehearted support. These amendments would provide for unemployment compensation coverage for 26 weeks and would give unemployed persons benefits equal to an amount from 50 percent to 66% percent of the salaries they received while working. It is well known that payments presently being received by unemployed persons are inadequate for maintenance of a decent and just standard of living. I feel that the Forand amendments are vitally necessary and will be well received by all persons who will be affected by this legislation.

An unemployment compensation program is extremely important to my constituents in Philadelphia. I am personally aware of the situation there and very anxious that something be done to alleviate the distressing conditions which are resulting from the increasing numbers of unemployed. It is worth noting that a great proportion of these people were Federal employees. When the cutback in Federal defense contracts took place, their jobs were abolished and they were released. This legislation would be a welcome boon to them as well as to the many others in Philadelphia who are now without work.

It is my sincere wish that this bill become law as soon as possible and I shall continue my efforts in its behalf.

Mrs. BUCHANAN. Mr. Chairman, I rise in support of the amendments offered by the gentleman from Rhode Island [Mr. FORAND].

Without these amendments the present bill is completely inadequate and utterly fails to meet the openly admitted need for higher unemployment benefits and a longer duration for benefits.

I come from a district in which this problem of unemployment is a critical one. Last month the Labor Department announced that Pittsburgh was one of the 31 industrial centers that have been added to the list of areas of substantial unemployment-those having 6 percent

to 12 percent of the available labor force unemployed. And a release from the Pennsylvania State Employment Service under date of June 19, 1954 states that 78,000 persons, or 8.3 percent of the total labor force in the Pittsburgh labor market area, were out of jobs during the month of May. Mr. Chairman, I say that the Members of this House, faced with this ugly reality of serious unemployment and its consequences in human tragedy and suffering, should vote for the pending amendments and assume the necessary responsibilities in the vital field of unemployment compensation.

The pending bill places on the States the responsibility to make the obviously needed improvements in the unemployment insurance program. This is a clear evasion of our responsibility in this field.

May I call your attention to the fact that during the year 1953 only eight States amended the provisions of their unemployment insurance laws governing the maximum length of benefit payments. Could there be any clearer proof of the fact that this cannot be left to the States and that the responsibility is here with us?

Mr. Chairman, as a woman, as one who knows what it is to be a housewife, I plead that for a few moments we think of the plight of those unfortunate families forced to exist on the maximum weekly benefit of $30-the plight faced by the families of those 78,000 unemployed in the Pittsburgh labor market. And these benefits, Mr. Chairman, run out after 26 weeks. Is it any wonder that the great majority of those workers are exhausting their benefits before they can find jobs and are forced to rely upon surplus food allotments to even exist?

Let us assume our responsibility to the millions of unemployed workers in America by adopting the amendments offered by the gentleman from Rhode Island.

Mr. STRINGFELLOW. Mr. Chairman, I wish to voice my support of the provisions of H. R. 9709 which would extend unemployment insurance protection to the approximately 2,500,000 civil employees of the Federal Government. By some strange quirk of fate or complete legislative oversight, we have for many years required private employers to provide unemployment compensation benefits for their employees but the Federal Government has not been so beneficent to its own employees.

During the period of rapid expansion caused by World War II and later the Korean conflict, Federal employment was constantly climbing and the need for unemployment coverage for civil-service workers was negligible. With the end of actual hostilities and by virtue of the fact that our Republican administration has been able to reduce the number of civil servants without any appreciable loss of services or benefits to the people of our country, the number of unemployed civil-service workers has continued to spiral upward. For instance in my own State of Utah while private employment has been steadily increasing, the number of Utahans employed by the Federal Government has steadily declined by several thousand.

Fortunately for us in Utah private employment has been able to provide jobs for most of the Federal workers who have received reduction-in-force notices from our defense installations and other Government agencies. However, there is always a period of transition and adjustment required in shifting from one job to another and many Federal workers have been caught in the financial bind created when their jobs were suddenly abolished.

I am frankly of the opinion that we owe a responsibility to our career Federal employees just as much as private employers do to their workers to provide unemployment compensation to help weather the storm in this period of readjustment.

This administration was elected on a platform which promised a reduction in the number of needless Government agencies and elimination of duplication and waste in Federal functions. It is my conviction that in the year and a half the Republicans have been in power we have accomplished a great deal in abolishing thousands of Federal jobs, at a savings of billions to our taxpayers. But we have an obligation to wield our economy ax with prudence and foresight, and not to make displaced civil servants wards of the State or pawns of charitable


We can accomplish our objectives of providing both opportunity and a measure of security for Federal workers by giving them the reassurance and peace of mind created by a workable selfsustaining system of unemployment compensation. I have always been a stanch defender of States' rights, and any system of unemployment coverage we adopt for Federal workers should take State programs into account and should give full cognizance to the fact that States should have wide discretionary powers in the administration of such a


This view is amply supported by the industrial commission in the State of Utah in a letter I received just today. In this letter Chairman Otto A. Wiesley informed me that the advisory council of the department of employment security of the Industrial Commission of Utah resolved its position as follows:

If a Federal program is enacted for the purpose of providing unemployment insurance to Federal workers, such a program should be devised as to fit the economy of each respective State *** and should be administered under State standards and coordinated with State programs.

It is my sincere hope that Congress will approve H. R. 9709, and especially those provisions which recognize the unemployment problem of that oft-forgotten segment of our economy, the Federal worker.

Mr. SPRINGER. Mr. Chairman, I am glad to support H. R. 9709. This bill extends the unemployment-insurance system to almost 4 million workers to whom this protection is not available today. This bill provides the first major extension of the unemployment-insurance system since its inception in 1935. All of this is a part of a broad program to bring our social-security system to maturity.

In my opinion, one of the most important
provisions of the act relates to the provi-
sion for unemployment compensation for
Federal employees, including postal em-
ployees. In his Economic Report, the
President several months ago said:

A worker laid off by a Government agency
gets no insurance benefits despite the fact
that in many types of Federal jobs he is as
vulnerable to layoff or dismissal as the fac-
tory worker. It is recommended that Con-
gress include in the insurance system the
2.5 million Federal civilian employees, under
conditions set by the States in which they
last worked, and that it provide for Federal
reimbursement to the State of the amount
of the cost, estimated to be about $25 million
for the fiscal year ending in 1955.

This law will greatly relieve the discrimination that has been practiced by the Federal Government against its Federal civilian employees. To even the casual observer, it must be apparent that the law up until this time has been geared to nongovernmental workers. The purpose of the change today is to assure all of our citizens that they will be equally covered should they be so unfortunate as to become unemployed. This is only a fair and reasonable change that is made in the law. I believe every thinking citizen will agree that this change is in the best interest of the country.

Mr. MACHROWICZ. Mr. Chairman, Mr. MACHROWICZ. I regret exceedingly that the House Rules Committee, in acting on this important legislation, has seen fit to grant a closed rule, limiting debate on the Forand amendments to a mere five minutes to each side. Surely such an important matter as unemployment compensation deserves greater attention from us and members should not be precluded from fully expressing their opinions.

H. R. 9709 carries out this recommendation. It has been common knowledge that Federal civilian employees as a group are subject to the risk of unemployment on nearly the same scale as nongovernmental workers in the same type of work. In recent years, particularly, several extensive reductions in Federal personnel have demonstrated the real need for extending unemployment benefits to Federal employees. From a wartime peak of well over 31⁄2 million employees in June 1945, Federal amendments. Since they embody the employment dropped by a million between 1945 and 1946, and dropped considerably more in the next few years, leveling off at about 2 million in June 1950. After a new increase due to the Korean conflict, Federal employment again fell off by 247,000 between June 1952 and December 31, 1953.

Total annual separations of Federal
employees are substantial. They have
approximated around one-half million
each year over a period of several years.
tions in force and termination of tempo-
The percentage which constitutes reduc-
rary assignments has varied from ap-
proximately 17 to 50 percent of total
separations. I do believe that the Fed-
eral Government should not be in the
position of providing less favorable con-

ditions of employment than are required
of private employers. Yet, since Fed-
eral employees have no unemployment-
insurance protection, Federal employ-
insurance protection, Federal employ-
ees have been forced to rely upon ac-
crued annual leave and refunds from
their retirement accounts while looking
for other jobs. There is considerable
evidence that even where this leave has
been accrued, it has in most instances
been inadequate to cover the duration
of Federal workers' unemployment. In
addition to this, it seems to me that the
withdrawal of an employee's retirement-
fund accumulation is undesirable and
defeats the purpose of the retirement


A Federal worker's right to benefits will be determined under the unemployment compensation law to the State to which his Federal services and wages are assigned. Usually, this will be in the State in which the worker had his official station when he became unemployed, or if he has been in Foreign Service, the State in which he resides when he files his claim. In fairness to the Government and to the taxpayer, compensation will not be paid for the period with respect to which accrued annual leave is paid upon separation.

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I am in full support of both Forand

recommendations made by President Eisenhower, it is noteworthy that the Republican majority of the Committee on Ways and Means refused to include them in their bill. It will be interesting to note how the Republicans in the House will support by action their avowed support for the President's program.

Certainly we all agree that unemployment compensation payments are now entirely inadequate and their duration too short. The Forand amendments would increase the minimum benefit to 50 percent of the individual's weekly wages and increase the duration of the benefits to a period of 39 weeks.

My congressional district has been hit very hard by the recent recession. Des

pite rosy statistics, the cold facts are that

the residents of my district still suffer
great unemployment and the hardships
in the present laws.
that go with it as a result of inadequacies

We can no longer afford to ignore the plight of those thousands who have exhausted their unemployment compensation benefits. We must bring the benefits up to an amount which would enable the unemployed to live on at least a minimum fair living standard. Unless we do that, we are not keeping faith with the people of this country.

Mr. FOGARTY. Mr. Chairman, in connection with today's debate on a vital legislative proposal dealing with the question of unemployment, the shocking fact must be stressed that there is a dangerous lack of authoritative and unbiased data on the actual unemployment situation. Moreover, a well organized and systematic effort has been waged by the press and radio for months now to induce the average man to misread and misinterpret such facts as are available on the extent and the severity of the unemployment problem.

It is not my purpose today to present an analysis of the overall facts about unemployment. I shall, however, give

you a crop of verifiable facts about one vitally important section of our economy about which I have necessarily been obliged to study. I refer to the current status of the textile industry. This is an industry which up until about 2 years ago employed probably more persons than any other single basic industry.

There may be some doubts about what is happening in other industries, but there can be no question about what is happening in textiles.

And if any member of this body were to seriously and with an open mind study the tragic facts about textiles, he or she would only conclude that adoption of amendments such as are proposed by Representative FORAND are absolutely and imperatively necessary and thoroughly justified.

Let me stress this simple fact at the outset of my talk. That it may be possible to hoodwink some people into believing that some industries which now are suffering from unemployment will recover quickly and substantially. That is not the case with textiles. Even if the entire economy should recover, textiles will remain depressed and thousands upon thousands of the workers who depend upon this type of manufacture for their living will still not have jobs. Let us look at the facts.

In Cumberland, Md., there is a synthetic fiber plant which when first established probably employed a greater number of men and women in one location than any other mill of its kind in the country. Five years ago, this establishment employed a force of 8,000. Today, after new processes have been installed the plan can produce as much, if not more, than it did 5 years ago with a work force of 4,000 or half of the number employed before the most recent technical changes were made.

Textile production declined in the second quarter of 1952 to 78 percent of the first quarter's volume. Man-hours of work shrunk almost as much though employment dropped only 12 percent, since about half the adjustment came through reduction in hours. There was a pickup at the end of 1952 which touched its height in the first half of 1953, when production reached 90 percent of the first quarter of 1951. The rise in man-hours was only slightly less and employment was at about 93 percent of the 1951 level. But the recovery faltered and production declined through the last half of 1953 to 80 percent of the 1951 first quarter. By the end of 1953 employment had dropped more than total man-hours; employment was about 4 percent below the second quarter of 1952 but man-hours were about equal. The overall contraction in

H. R. 9430 has been introduced by Rep- production, accompanied by many mill

resentative AIME J. FORAND and by almost 90 other Members of the House of Representatives.

I advocate passage of H. R. 9430 both as a very necessary prop for our total economy during this period of mounting unemployment and as a long-delayed measure of social justice. In addition, I would like to point out that there would be a very special value to the roughly 1 million textile workers scattered in some 30 States who have been suffering in varying degrees, depending on the particuar branch of the industry, from a steadily contracting demand for the products which their plants manufacture.

It is not appropriate in this statement to attempt to set forth in any detail the whole range of the problems of the textile industry. I shall merely refer to certain aspects of these difficulties which illustrate the need for prompt improvement both of the average amount of unemployment benefits and on increase in the number of weeks which the unemployed worker may be paid these benefits.

For instance, one important branch of the textiles is suffering critically and simultaneously from a contraction in the demand for its products plus the institution of sweeping technological changes which drastically reduce the number of employees needed to produce a given volume of goods.

Let me call the attention of the Congress to the situation in the rayon section of the textile industry.

closings, has therefore begun to reflect
itself sharply in complete liquidation of
textile mill jobs.

Thus the textile industry was operat-
ing at a low level at a time when output
in other major industries was slowed
only by material shortages or other pro-
only by material shortages or other pro-
duction bottlenecks. In addition, the
textile industry had failed to share
equally in the growth of consumer de-
mand stemming from the high level
of economic prosperity. From 1939
through 1953 our physical national prod-
uct doubled and the consumer actually
enjoyed 70 percent more in services and
goods, but the increase in textile yard-
age was only about 30 percent.

While the total number of workers actually employed in the Nation rose from 45.8 million in 1939 to 62 million in 1953-an increase of 35 percent-the number actually employed in the textile industry dropped by 3 percent, with workers averaging less than 40 hours a week.

As in the 1920's, the textile industry was sick while the rest of the economy flourished. Government, management, and the public, unfortunately, remained oblivious to the fact that this was a

steps to avoid a development which might well grow to the proportions of a catastrophe.

I have some pertinent statistical information which I wish you would consider. These statistics contain much food for serious thought.

COTTON HAS RECOVERED PART OF THE MARKET PREVIOUSLY LOST TO RAYON Spinners and weavers of wool, rayon, and acetate have all suffered from the inroads of the new fibers. Although there is no assurance that they will hold their present position, they have seriously upset the industry, especially the older branches, and discouraged consumer buying. Cotton, on the other hand, has recovered part of the market it had previously lost to rayon and acetate.

Percentage distribution of fiber consumption

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In addition to the displacement of natural fibers by synthetics, the textile industry has suffered from the substitution of nontextiles in various household and industrial uses. Plastic film has made major inroads in the upholstery fabric market and in automobile seat covering and door paneling. When added to the earlier displacement in window and shower curtains and tablecloths, these developments assume major importance.

WOOLEN AND WORSTEDS IN BAD SHAPE Failure of the woolen and worsted branch of the industry to protect its competitive position stands in marked contrast to the success of the cotton interests in improving their styling, finishing, and merchandising. With Government aid in studying the properties of cotton and its potential uses, growers, and manufacturers cooperated in developing new processes and staging an effective promotion campaign. Research is needed in the wool field to improve its qualities with respect to shrinkage and mothproofing. Fabric design has lagged behind the times as domestic mills generally gave up the initiative to foreign producers. While many woolens have been styled to meet the shift in consumer preference toward casual wear worsteds have not yet been adequately adapted to this trend. Many mills are also unable to compete because of obsolete plant and equipment. The woolen and worsted industry will have to bestir itself to meet the growing challenge of the newer synthetics. Creative answers must be forthcoming to the problems posed by product design, technology, merchandising, and sales promotion.


The rate of mill liquidations increased

harbinger of more far-reaching economic substantially in the last 2 years, leaving a


I am not trying to be an alarmist, but I think I would be shirking my responsibility if I failed to call to the attention of the Members of the House certain basic facts which should give us pause. I have always been confident of the future, but I have always been fearful that we can be so blindly confident that we shall fail to take the necessary

train of ghost towns and some 50,000 jobless workers. Management deficiencies which had been glossed over in the textile booms that followed World War II and the Korean

were glaringly exposed by intensified competition. Companies whose stockholders enjoyed a bonanza in dividends from highly

profitable operations in 1946-48 and 1950-51 found that their failure to plow back sufficient funds to modernize plant and equipment left them at a serious disadvantage in

1952-53. The necessity of cutting costs posed financial problems for which they had not prepared themselves and many mills were

forced out of business.


Mr. Chairman, permit me to offer herewith a very recent statistical compilation showing levels of employment and weekly man-hours worked in 23 principal textile States. This compilation gives the figures on employment in the industry at about the high point in February 1951 as contrasted with the situation in April 1954. I can say definitely that since April the drop in employment has continued.

According to these data, there has been a reduction of employment in textiles in the United States between Feb

ruary 1951 and April 1954 of 21.2 percent. The drop in average weekly man-hours in that same period has been even more severe. The decline in man-hours is 28.2 percent.

Although the economic blight which has overtaken textiles is nationwide, it is painfully clear that certain geographical

areas are suffering much worse than areas are suffering much worse than others. The fact that the drop in employment and man-hours worked in the six New England States has been so severe is no doubt due largely to the fact that so large a proportion of the woolen and worsted mills of the country are located in that region. The woolen and worsted section by and large is the most badly hit portion of the industry and the type of manufacture which has experienced the most prolonged difficulties.

In the New England States employment has dropped 39.7 percent between February 1951 and April 1954, while man-hours worked have been cut 44.2 percent.

In the 9 most important textile-producing States in the Southeast there has been an 8.5 percent drop in employment between February 1951 and April 1954, while the man-hours worked have been reduced in the same period 18.3 percent.

The table is herewith reproduced in full:

Employment and average weekly man-hours in the textile mill products industry by State, February 1951 and April 1954

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Employment (wage and salary



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1951 and 1952_



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2 Maine and Vermont are not included in man-hour data because they are not available.

3 Not available.


Source: U. S. Bureau of Employment Security; from table published on p. 111 of Senate Finance Committee hearings on Employment Security Administrative Financing Act, March 1954, and typewritten table dated Apr. 9, 1954.

NOTE.-The "textile mill products industry" is as defined in industry code No. 22 of the Standard Industrial Classification Code.

My purpose in presenting this table is to emphasize my point that, in an industry which is as competitive as textiles, the need for substantial standardization of taxes collected from all establishments, irrespective of location, should be very evident. Moreover, I feel strongly that the great disparity in amount benefits and duration of benefits between the textile States is socially unsound and economically harmful both locally and -20.8 nationally.


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In all of the above materials dealing with broad statistical trends and the -22.5 basic economic difficulties of this widespread industry, I have not mentioned -21.2 -37.6 the human aspect of this problem. -7.9


Employment and man-hour area totals are for those States for which data are available. Maryland and Louisiana, which are included in employment totals are excluded from man-hour totals because data are not available. 5 April 1954 figures are not available. Figures shown are for March 1954.

• Employment and man-hour totals are for those States for which such data are available.

7 Area totals are for California, the only Far West State which reports such data.

Source: State Departments of Labor and U. S. Bureau of Labor Statistics.

One other statistical table which I believe to be of considerable importance in this connection is one which illustrates the wide variations in the different States in the average contribution rate for unemployment insurance in the tex

tile industry. I have used the latest data available in each case. Whereas in Rhode Island the rate was 2.7 percent, in such competing States as Alabama, Georgia, and South Carolina, average Georgia, and South Carolina, average employer contribution rates were respec

In Rhode Island in the past few months a well-known institution of learning has made a careful sample study as to what is happening to the men and women who were thrown on the labor market due to the closing of textile mills. The preliminary findings of this survey will be officially released in the next couple of weeks, and the facts I summarize here will be borne out by the formal report.

The investigators interviewed 131 individuals who were laid off over a year ago as a result of mill closings.

Of this number, only 29 percent have found new jobs. This investigation did not inquire into the type of employment


55, 692

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