Textile Troubles

"Frankly, Rome is burning."

The 800 textile men at the annual convention of the American Textile Manufacturers Institute near Miami last week hooted, hollered and stamped their agreement at this ominous warning from Robert Stevens, onetime Secretary of the Army under Eisenhower and now once again president of his family's big J.P. Stevens textile empire. Stevens was discussing the plight of the U.S. textile industry, and his words were directed at Treasury Secretary Douglas Dillon, a beleaguered visitor to the convention. The textile men had hoped that Dillon would show up with at least part of the Kennedy Administration's long-promised relief program for textiles, gave him only grudging applause when he did not deliver.

More Competition. While U.S. textile men pay the official farm-propping price of 32-c- per lb. for cotton, their foreign competitors pay only 24-c- because the U.S. subsidizes its cotton exports by 8-c- per lb. in order to compete in world markets. This is one reason that, since World War II, the U.S.'s long-held textile trade surplus of $300 million has turned into a gold-draining deficit of $400 million yearly as foreign textile men push low-cost, cheap-labor textiles into the U.S. market. The Textile Institute's President William H. Ruffin, who will be succeeded in the job later this year by Stevens, captured the general mood of the convention: "All that this industry wants is a chance to buy American-grown cotton at the same price it is sold to foreign competition."

The U.S.'s cotton subsidy program, which costs $500 million a year, is just one blade of the scissors that the textile industry finds itself caught between. U.S. foreign policy is the other. More than 50 countries have virtually embargoed U.S. textile imports by one means or another. Japan last year exported 135 million yds. of cloth to the U.S., but permitted U.S. imports of only 490.000 yds. The State Department resists imposing stiffer import quotas and tariffs because it does not want to damage the economies of nations that the U.S. is trying to prop up. When President Kennedy himself proposed an 8-c--per-lb. tariff increase on imported cottons to win cotton-state support for his Trade Expansion Act, he was turned down by the usually compliant U.S. Tariff Commission. Since then, the Administration has vaguely proposed to subsidize domestic cotton buyers to the tune of 5-c- per lb., which would cost the taxpayers another $225 million or so a year. Partly because domestic textile men are holding out for a still higher subsidy, that idea has got nowhere.

Shrinking Force. No one disputes the fact that the textile industry has been shaken. Cutthroat competition and increasing automation have combined since 1947 to reduce the number of U.S. textile producers from 8,157 to about 7,500, and to shrink the industry's work force from 1,240,000 to 880,000. Though sales rose 13% last year to about $16.5 billion, profits of close to 6% on invested capital were three-fifths of the average for all manufacturing. Textile manufacturers are also running into rough competition from such textile substitutes as paper napkins and plastic seat covers, and to an extent suffer from the longer life of synthetic fibers.

Trying to help themselves, textile men are stepping up their switch to synthetics, spent $620 million on new plant and gear last year--up more than 100% since the low year of 1958. Among the many research projects, 150-year-old J.P. Stevens & Co. is working with papermakers to develop disposable clothing, and Deering-Milliken is reportedly experimenting with a process to manufacture textiles by pressing bits of fiber together instead of weaving them. But the industry cannot prosper as it should until some sense is brought into the pricing of its raw materials, which account for 50% of its production costs.

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