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unemployment benefits without limit. Connecticut's loans have since soared to $398 million. The deferral program is set to expire this year but Congress is moving to Keep it alive. The Emeregency Unemployment Compensation Act of 1977, now in the House Ways and Means Committee, would let states ignore their unemployment debts until 1980. And the act makes no mention of putting any brakes on continued borrowing. As the volume of loans grows, the notion that Uncle Sam may ultimately forgive the debts entirely is gaining wider acceptance in various statehouses. A key factor in New York's seeking its federal loan was the “strong feeling that the federal government will figure some forgiveness for all this money,” says Donald A. Gaudion, chairman of Sybron Crop. and head of the Economic Development Board. “As a businessman I find that hard to believe, but political advisers say it's the best route to follow.”

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A PETITION to PRESIDENT JIMMY CARTER

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The International Trade Commission has unanimously found twice in the past year that the American shoe industry has “suffered substantial and severe injury" due to the rising tide of shoe imports.

Action is imperative to preserve the more than 265,000 jobs remaining in the American shoe industry in communities located in 37 states.

It is imperative that President Jimmy Carter take action now to provide effective import relief to the footwear industry before more jobs are lost, more plants are closed, and more communities are afflicted by the current tidal wave of footwear imports. In recent months, imports have captured over 50% of the domestic market for the first time in history.

That the National Governors' Conference herein assembled does hereby petition the President of the United States to determine that a system of relief controlling the import of foreign manufactured shoes be established in order to provide effective, affirmative relief for the shoe industry as called for in the Trade Act of 1974.

Signed by the following Governors of the principal states manufacturing shoes in America.

SHOE IMPORT PETITION SIGNATORS

Jay S. Hammond, Alaska. Robert W. Straub, Oregon.
Frank E. Barnett, American Samoa. Milton J. Shapp, Pennsylvania.
Raul H. Castro, Arizona. J. Joseph Garrahy, Rhode Island.
Ella T. Grasso, Connecticut. James B. Edwards, South Carolina.
Ricardo J. Bordallo, Guam. Dolph Briscoe, Texas.
George R. Ariyoshi, Hawaii. Mills E. Godwin, Jr., Virginia.
John W. Evans, Idaho. Cyril E. King, Virgin Islands.
Otis R. Bowen, Indiana. Patrick J. Lucey, Wisconsin.
Julian M. Carroll, Kentucky. Ray Blanton, Tennessee.
James B. Longley, Maine. William Milliken, Michigan.
Marvin Mandel, Maryland. Brendan T. Byrne, New Jersey.
Michael S. Dukakis, Massachusetts. Edwin Edwards, Louisiana.
Joseph P. Teasdale, Missouri. David H. Pryor, Arkansas.
Meldrim Thomson, Jr., New Hamp- Richard F. Kneip, South Dakota.
shire. John D. Rockefeller, IV, West
Hugh L. Carey, New York. Virginia.
James B. Hunt, Jr., North Carolina. George C. Wallace, Alabama.
James A. Rhodes, Ohio. Jerry Apodaca, New Mexico.

David L. Boren, Oklahoma.

A RESOLUTION PROVIDING FOR THE PROTECTION AND ExPANSION OF THE SHOE MANUFACTURING INDUSTRY IN NEW HAMPSHIRE AND TO PETITION THE PRESIDENT OF THE UNITED STATES To DETERMINE THAT A SYSTEM OF RELIEF CONTROLLING THE IMPORT OF FOREIGN MANUFACTURED SHOES BE ESTABLISHED IN ORDER TO PROVIDE EFFECTIVE, AFFIRMATIVE RELIEF For THE Dom Estic shoe INDUSTRY As CALLED Foe IN THE TRADE ACT of 1974 AND TO DIRECT THE SECRETARY OF STATE TO TRANSMIT FORTH.WITH SUCH RESOLUTION TO THE PRESIDENT OF THE UNITED STATES

Whereas, the shoe manufacturing industry in New Hampshire has, for two centuries, contributed major benefits to the economic welfare of our state, our communities, and our citizens, and;

Whereas, the International Trade Commission has unanimously found on two occasions in the past year that the domestic shoe industry has “suffered substantial and severe injury” due to the rising tide of shoe imports, and ; Whereas, basic to our trade relations with other nations is the recognition that such trade must be conducted in an atmosphere of mutual benefit and equity, and ; Whereas, current foreign trade policies of this nation seriously discriminate against the shoe manufacturing industry in New Hampshire and in other sovereign states thereby creating severe economic decline and widespread unemployment as well as the nullification of opportunity for expansion which would provide additional employment for our citizens, and ; Whereas, such discriminatory and inequitable conduct of our International Trade Policy caused by the failure of the Federal government to adequately protect the industry and its employees has resulted in “substantial and severe” injury to our national domestic shoe industry thereby compromising the basic tenets of our free enterprise system, and ; Whereas, the Chief Executives of two-thirds of our sovereign states have joined together in a petition to the President of the United States asking for affirmative relief for our domestic shoe industry. Now, therefore be it Resolved, That the Governor and Executive Council does hereby urge and support protection and expansion of the shoe manufacturing industry in New Hampshire and does hereby petition the President of the United States to determine that a system of relief controlling the import of foreign manufactured shoes be established in order to provide effective, affirmative relief for the domestic shoe industry as called for in the International Trade Act of 1974. Now, therefore, be it further Resolved, That the Secretary of State be directed to transmit forthwith a copy of this Resolution to the President of the United States. Governor.

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Approved by G & C Mar. 31, 1977.
Attest:

Secretary of State.

House RESOLUTION No. 23

Relative to providing for the protection and expansion of the shoe manufacturing industry in New Hampshire and to petition the President of the United States to determine that a system of relief controlling the import of foreign manufactured shoes be established in order to provide effective, affirmative relief for the domestic shoe industry as called for in the Trade Act of 1974 and to direct the Secretary of State to transmit forthwith such resolution to the President of the United States. Whereas, the shoe manufacturing industry in New Hampshire has, for two centuries, contributed major benefits to the economic welfare of our state, our communities, and our citizens, and ; Whereas, the International Trade Commission has unanimously found on two occasions in the past year that the domestic shoe industry has “suffered substantial and severe injury” due to the rising tide of shoe imports, and ; Whereas, basic to our trade relations with other nations is the recognition that such trade must be conducted in an atmosphere of mutual benefit and equity, and ; Whereas, current foreign trade policies of this nation seriously discriminate against the shoe manufacturing industry in New Hampshire and in other

sovereign states thereby creating severe economic decline and widespread unemployment as well as the nullification of opportunity for expansion which would provide additional employment for our citizens, and;

Whereas, such discriminatory and inequitable conduct of our International Trade Policy caused by the failure of the Federal government to adequately protect the industry and its employees has resulted in "substantial and severe" injury to our national domestic shoe industry thereby compromising the basic tenets of our free enterprise system, and;

Whereas, the Chief Executives of two-thirds of our states have joined together in a petition to the President of the United States asking for affirmative relief for our domestic shoe industry. Now, therefore, be it

Resolved by the House of Representatives, That we do hereby urge and support protection and expansion of the shoe manufacturing industry in New Hampshire and do hereby petition the President of the United States to determine that a system of relief controlling the import of foreign manufactured shoes be established in order to provide effective, affirmative relief for the domestic shoe industry as called for in the International Trade Act of 1974; now, therefore, be it

Resolved, That the Secretary of State be directed to transmit forthwith a copy of this Resolution to the President of the United States. Approved Mar. 30, 1977.

Mr. VANIK. On page 3 of your statement you say the cost of your assistance from May 1975 to March 31, 1977, was $302,504, and that this will not be reimbursed by the Government. You estimate your costs would be in excess of $3 million. That is the total cost ?

Governor THOMSON. That is right. These are the figures that I received from the director of our employment security. He is looking down the rest of the year at the possibility of further companies disappearing or going out of business.

The $300,000 covered two shoe industries of approximately 300 employees. That occurred in 1976. We had none fail in 1975, and then as I said prior to that, from 1962 until 1975, we had a total of 31.

Mr. VANIK. In any of those shoe company closings, did they shift from your area to another part of the United States, or did they close down completely?

Governor THOMSON. They closed down. We have been able to absorb those going out of our shoe industry because New Hampshire enjovs a very low unemployment rate. It varied from the lowest in the Nation to one of the lowest in the Nation to one of the lowest. This is because many industries from States such as Massachusetts and Connecticut moved in. We had 59 new companies come in 1976 with employment of approximately 10,000, which we attribute to a favorable tax climate--no sales tax and no income tax.

Mr. VANIK. We had problems when this act was adopted in 1974 on the proposal that is raised in Congressman Cleveland's bill. We will have to review our thinking on that issue, but it was a matter of great controversy in the adoption of this program.

Let me ask ou this: You can't expect a rollback or restoration of your shoe industry. You are struggling to keep what you have. Isn't that what you have in mind?

Governor THOMSON. Yes, sir, that is an important factor not only with us but with the Nation as a whole.

Mr. VANIK. Are there any pluses? Do you pickup any jobs in your State in imports or exports? I am sure you have some exporting businesses there?

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Governor THOMSON. Yes; we do. For example, one of the big exporting businesses with us is Centronics. We have Digital Corp., the world's largest manufacturer of minicomputers, now moving into our State. They are big exporters.

Mr. VANIK. As Governor of the State, do you have any figures as to the relationship between jobs created through imports compared with the jobs lost through the effect of exports?

Governor THOMSON. I don't have any figures on that. I can say with a degree of accuracy that up to the last year or two when a number of companies started moving in, the ratio was on the adverse side in terms of the loss of jobs. There just weren't that many businesses exporting:

Mr. VANIK. Now that may be adjusting itself better?
Governor THOMSON. I would think so.

Mr. VANIK. Do you feel in a problem like shoes or any other related commodity that there is a need, perhaps, to determine a limit of penetration? We are buying about 45 percent of our shoes through imports now.

I think what occurs to me is what industry wants and what importers want is some firm idea of what the rules are going to be. They want them to be constant. They would like to know at least for a period of years things might be fixed so industries can stay in place and workers could stay in place and so that productive practices could stay in place.

Would you believe that some kind of idea of putting a limit on the penetration of the market might be a solution?

Governor THOMSON. If we are thinking of the shoe industry

Mr. VANIK. We will have to talk about all industries. If we adopt a principle, it may work two ways on you.

Governor THOMSON. As far as penetration of industry is concerned generally, I am one who favors protecting as much of our industry as possible and keeping our jobs for the American working man. This is just my personal feeling. It is a feeling that I think is shared by a great number of my fellow citizens in New Hampshire.

I think that the trend has been too much in the other direction. I am one who does not believe that we have prospered by following that trend. I think the time has come for us to do just as you have indicated—take a new look and consider whether there is at least a point at which we can put a brake on some of the intrusion.

Mr. VANIK. To date, only nine petitions for worker adjustment assistance have been filed in New Hampshire of which five have been certified, covering about only 600 workers. Fewer than 800 will have applied for and received trade adjustment allowances in the past 2 years. Doesn't the small number of workers involved draw a small proportion of the total New Hampshire State unemployment insurance payments ? : Governor Thomson. Yes, they would.

Mr. VANIK. What is your total unemployment compensation payments in numbers to people?

Governor THOMSON. Per year, I would not be able to tell you, sir. We have a total unemployment compensation fund of $30 million. What the average payment for the year to all unemployed

Mr. VANIK. How many people are receiving benefits?

Governor THoMson. Right now we have approximately 18,000 out of a work force of 300,000-some.

Mr. WANIK. So we are talking about the 800.

How does New Hampshire compare with other States in terms of unemployment insurance paid to workers receiving trade adjustment assistance as a share of unemployment insurance payments for all workers? Is your burden relatively larger?

Governor THoMson. I would not be able to answer that. My guess would be the answer would be no.

Mr. FRENzEL. Mr. Chairman, when Mr. Cleveland testified before a different subcommittee on unemployment, I think his showing was that New Hampshire had a disproportionately large share of this kind of problem because of its size and the size of the industries involved that were either harmed or threatened to be harmed by imports. I think that those records would be available from his testimon W.

§§ VANIK. I was just making a comparison of the 800 versus the 18,000. We will be very happy to have the correct figure. I know you can't anticipate this being in the line of questioning, but we will certainly leave the record open so you can provide for us the figures as of the present time.

Governor Thomson. That I will be very happy to do. Thank you,

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[The information follows:]

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[Telegram] John MARTIN, Jr., Chief Counsel, Committee on Ways and Means, U.S. House of Representatives, Washington, D.C.: Since May 24, 1971, 21 companies and 24 plant locations have been certified for assistance under the Trade Act. At the present time employees of nine of these companies are eligible for and are receiving trade adjustment allowances. Since Oct. 3, 1974 six companies and their employees have been certified for allowances involving 1,481 employees. Two additional shoe companies have pending petitions which I believe will be certified involving 1,150 employees. During the last 2 years (Jan. 1, 1957 to Dec. 31, 1976) 1,595 claimants were paid trade adjustments on the basis of 10 different petitions. At the present time active petitions (9) involve 2,062 workers. It is our experience that not less than 85 percent of eligible workers apply for trade allowances, and that of those applying over 80 percent exhaust all potential benefits. One of the petitions still involved with active claims in New Hampshire had an expiration date of Nov. 23, 1974. Another had an expiration date of Dec. 24, 1976. In both instances payments will continue because valid claims were established before the expiration date. At the present time we have 29 full functioning shoe factories. In 1947 shoe factory employment equaled 25 percent of all manufacturing employment in New Hampshire. From 1971 through 1976 over 6,000 jobs were lost due to shoe imports. During that period Federal funds in TRA allowances amounted to $6,269,000. In 1968 shoe wages in New Hampshire exceeded $84 million. That figure had slumped to $53 million in 1975. In 1975 New Hampshire shoe employment was estimated as 5.2 percent of the total for the United States, at which time it was 9.9 percent of New Hampshire manufacturing employment, considerable decrease from its predominant position in 1947. During the last available period for benefit payments, Trade Act payments on six petitions amounted to 1 percent of total benefit payments. I am not able to draw a comparison between present TRA payments in New Hampshire and other States with a significant amount of boot and shoe industry. I do know that in Georgia TRA payments are in excess of $6,000 per week in State

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