22.

Letters of commitment of guarantors (EDA representative shall la: required guarantum below):

33.

Schematic layouts of buildings including layout and work flow of key machinery and equip.
ment (ie. production lines) (Reduce to as near legal size (8-1/2 x 14) as practical)

34. Capability of machinery and equipment to produce the anticipated quality of quantity of
goods at maximum production rate per hour anticipated

37. Map of local area (city or county) showing precise location of the project (relevant portion
thereof not greater than 8-1/2 x 14)

38. Site plat (Reduced to as near legal size (8-1/2 x 14) as practical

39. Independent bid by contractor or cost estimate by architect/engineer for project buildings,
including description of type of construction, square footage and special features and state.
ment assuring that Davis Bacon Wages will be paid

40. Cost estimates by machinery and equipment suppliers and installers (including Davis Bacon
statement on costs associated with major installations)

41. Other Project Costs:

a. Architectural and engineering services

b. Legal and/or administrative expenses

c. Commitment of interim lender supporting the projected cost of interest expenses during
construction indicated on Forms ED-267 and ED-271

d. Preliminary expenses

e. Evidence in support of conunguency reserve

Other Documentation Required

42.

43.

45.

46.

47.

48.

49.

50.

First EDA Endorsement

A pre-application conference was held at

at which time the undersigned EDA representative explained the items on this form to

of

on

(firm), the undersigned indicated the forms, documentation and other items of information required to support an application for business development assistance by plac. ing his initials in the appropriate boxes.

TYPE NAME AND TITLE OF EDA REPRESENTATIVE

SIGNATURE

DATE

Find EDA Endorsement: The undersigned has renewed the application and has determined that the applicant has submitted all required items of information, that each item is completed, that all document requiring applicant's signature or certification are properly executed, that the entire application is organized as required by this form and that all problems involving required items have been resolved.

It is therefore recommended that the Regional Director as this application a project number and that procesung commence. RECOMMENDED TYPE NAME AND TITLE OF

EDA REPRESENTATIVE

SIGNATURE

DATE

FORM ED-272 (Rov. 10-781

USCOMM-OC 1817ETA

Mr. VANIK. With respect to adjustment assistance, we understand what you would do for the manufacturer. We understand the loan problems. We hope to correct that. We understand the interest rate problems. We hope to correct that.

What would you recommend as a test for a condition of a loan? Would it be based on a plan to modernize? There has been testimony these plants are old. Would it be a modernization loan that might have an easier criterion than the threat of just passing out of existence?

I think we can assume every shoe factory in America is threatened. Would it be some special classification of loan that would entitle the industry to participate?

Mr. RICHARDSON. Mr. Chairman, Stanley Nehmer was in charge of the adjustment assistance program at the Department of Commerce for a number of years. Perhaps he would have an answer for you on that question.

Mr. NEHMER. Mr. Chairman, the kinds of loans for modernization of plant and equipment creates no problems with the Department of Commerce. They like those loans. Those are hard loans.

The big problem is working capital. When you talk about working capital in dealing with the trade adjustment assistance people, one of the big problems faced by the firms is that those who are eligible are generally so much in hock to financial institutions. The Commerce Department takes the position that none of the Government's working capital assistance, working capital loans, may be used, in effect, to pay off existing creditors. There are minor exceptions to that.

In effect, the Commerce Department does require that the existing creditors stand back. Some of that is not unreasonable, but for some creditors who may be very well secured, they do not want to stand back.

I know of one case in particular where a bank which felt itself very thoroughly secured said, "We will not stand back, and we will pull the string on you and liquidate you." That company has been certified for adjustment assistance but cannot go ahead with its adjustment plan because of that very stringent requirement on the part of the Economic Development Administration insofar as working capital loans are concerned.

Mr. VANIK. Mr. Steiger.

Mr. STEIGER. One of the things that has always intrigued me about the problem the shoe industry has faced is the mix of shoes that come into this country and the level of imports. In all that you do, what is the level of imports that you think ought to be allowed into the country?

Mr. RICHARDSON. Mr. Steiger, I do not think any one level, whether you speak in terms of percentages or numbers of pairs, is something that the American shoe industry would say is what we think should be allowed in.

What we feel is that history has revealed a pattern of practice by our country and other countries in which we have reduced tariffs on imported shoes while other countries have raised tariffs and nontariff barriers to the point where the United States has become the only open market for footwear produced in other countries.