CONTENTS Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Raw Materials . . . . . . . . . . . . . . . . . . . . . . .. Acknowledgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Volumes and Cost . . . . . . . . . . . . . Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Texas Raw Matérfals _ _ _ _ _ _ _ _ ¢ _ _ _ _ __ Early Studies and Reports . . . . . . . . . . . . . . . . . . . . . 6 W001 _ _ . b I _ _ _ V _ ‘ _ _ _ _ > _ _ _ _ _ _ . H History and Present Status of Mills in Texas. . . _ . . 6 Mohair _ ‘ A ' _ _ _ _ ’ _ ’ _ _ 4 ' _ V A ' _ _ _ _ H Fiber Consumption . . . . . . . . . . . . _ . . . . . . . . . . . . . . . 8 Uses of Texas Wool and Mohair. World Illrends ' ' '_ ' ' ' ' ' ' ' ‘ ' ' ' ' ‘ ' ' ' ' ' ' ' ' ' ' ' g Other Domestic Wools . . . . . . . . . . . .. Trends m the United states ' ' ' ' ‘ ' ' ' ' ' ' ' ' ' 1 Other Domestic Raw Materials . . . Inter-fiber Competition . . . . . . . . . . . . . . . . . . . .10 For _ Wools e1 n I . . . . . . . . . . . . . . . . . . .. Wool Textile Industry . . . . . . . . . . . . . . . . . . . . . . . . . .ll _ g _ Early History and Development 11 Marketing Wool-textile Products . . . . . . . .. Steps in Manufacture . _ . . . . . . . . . . . . . . . . . . .12 Volumes ' ' ' ' ' ‘ ' ' ' ' ' ' ' ‘ ' ' ' ' ' ‘ ' ' ' ' " Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . .12 Marketing Costs A " " " " ' " " " ’ " " " " " " '" Sorting and Blending . . . . . . . . . . . . . . . . . .12 - Marketing fr°m Texas Plants - - ~- scouring _ b _ _ , _ _ _ _ _ _ _ _ _ _ _ _ p 4 g t _ ‘ _ I g A _14 Transportation . . . . . . . . . . . . . . . . . . . . . . . . ', Carbonizing . . . . . . . . . . . . . .- . . . . . . . . . . . . .14 F 6161111168 . r . . . . . . . . . . . . r . . . . . . . . .. Woolen Carding . . . . . . . . . . . . . . . . . . . . . . .14 Costs on Row Materials . . . . . . . ' Woolen Spinning . . . . . . . . . . . . . . . . . , . .14 C0815 1O Mflrke1 . . . , ¢ - - . - _ . j Worsted Carding . . . . . . . . . . . . _ . . . . . .14 W~ liixtzzlztj? s‘ nAN , , , , , z 1 . . . 1 i new s2 s4 as as 4o 42 u 4s 4e so 52 s4 , YEAR Figure 2. Estimated United States consumption of fibers. 1930-54. Source: “Wool Statistics and Related Data." AMS. USDA Statistical Bulletin No. 142. ‘““Wool Statistics and Related Data,” Statistical Bulletin N0. 142, Agricultural Marketing Service, U. S. Depart- ment of Agriculture, Sept. 1954, page 68. 9 Total per capita wool con- Pressed felt 1X Knit goods 10X Nonapparel fabrics 10% , Other ’ nonapparel . _ fabrics 2.2% Drapery 8. furniture wear llabrlcs g upholstery fabrics Other apparel 06% fabrics . . 4.3% Transportation upholstery fabrics 3.8% fabrics Blahlzeting 3.4x Figure 3. Distribution of wool consumption in the United States. 1949. Source: Bureau of the Census data. Although total fibers consumed per capita and total mill consumption are increasing, con- sumer expenditures for clothing and accessories have not maintained their proportion of total per- sonal expenditures. Competition is intense from other consumer goods such as new homes, tele- vision sets, cars, labor-saving devices and many others. Also, trends toward‘ casual living and dress lower the amounts spent on clothing. Another trend that has reduced wool con- sumption is the use of lighter weight clothing. Woolen goods weighing less than 13 ounces per yard averaged 38 percent of production in 1948 and 52 percent of it in the first half of 1954. Worsted goods weighing less than 13 ounces per yard averaged 45 percent in 1948 and 67 percent the first half of 1954.19 Most of the wool consumed in the United States is apparel wool. Although the amounts vary from year to year, apparel wools furnished 68 percent and carpet wools 32 percent of U. S. mill consumption in 1949. Figure 3 shows the proportions of wool processed into different types of consumer goods during 1949. ‘ The Federal Government is a leading con- sumer of wool textile mill products. Production for the government was heavy in 1941-45. Mili- tary purchases in 1951 were about two-fifths of total mill production. Purchases then declined rapidly, amounting to less than 1 percent of pro- duction in 1954.20 The reductions in military buy- “Textile Organon, Nov. 1954. “The Commercial Bulletin, Apr. 2, 1954. 10 children's wear ing during 1946-50 and after 1951 have aff wool-textile mills. However, government bus should average much better than during 19 although large increases cannot be expecte less the Armed Forces are expanded greatly Inter-fiber Competition Wool growers, the wool trade and wool tile mills have been concerned over reduced consumption during the 1950’s, the rapid inc _ TABLE 1. SELECTED COMPETITIVE USES OF COTTON AND SYNTHETICS. 19531 Item Wool’ Cotton Syn n — — Million pounds Men 6'. boys apparel 201.8 975.6 1' Outerwear 172.9 366.2 Suits 60.7 l Winter weight 56.2 Summer weight 4.5 Separate coats 6.0 Separate trousers 28.4 7.9 Overcoats 6. topcoats 22.6 Outdoor jackets 30.6 29.1 2 Sweaters 12.9 Robes 6. smoking jackets 3.7 Work clothing 5.4 300.2 Shirts 12.0 264.2 4 Underwear 6. nightwear 1.1 187.2 Hosiery 7.6 83.1 1 Furnishings _ 8.2 74.9 Women 6. misses apparel 143.8 389.5 3 » Outerwear , 128.3 209.9 17 Suits ' 14.5 l Jackets. skirts 19.2 ' 23.7 2 Street, formal dresses 8.2 44.3 9 Housedresses_ 1.2 78.9 1 Coats 62.8 1.3 ‘ Sweaters 18.0 1.3 Bathrobes. housecoats 3.5 19.2 ~ Blouses. shirts 6.8 46.0 1 Intimate wear 0.5 102.8 ' - Hosiery 0.3 18.4 2 Accessories 7.9 12.4 1' Children (S. infants apparel 37.1 256.4 Outerwear 35.0 110.5 Blouses. shirts 1.2 25.8 I Underwear, other 0.9 130.1 1 Household uses 191.3 1,247.4 l8 Bedding. blankets 31.6 204.3 " 4 Linens 507.5 i Other items 159.7 535.6 14; Carpets. rugs 150.5 117.6 2 Upholstery. drapery 9.2 296,0 3 Other consumer-type products 65.4 361.6 l5 = Linings. piece goods 56.7 1205.1 ll . Apparel linings 27.8 76.6 ‘7 Apparel piece goods 28.9 89.5 4 A Other products , 1.8 107.9 1 I Industrial uses 38.8 779.5 5 Automotive 23.3 59.3 6 Carpets 4.1 2.8 1 * Upholstery 19.2 42.3 l Rubber industry 175.2 46 ' Tire cord 6. fabric 15.5 4 I Hose. etc. - 92.5 3 Other industrial products 15.5 547.0 61 Felts 10.6 9.5 I Filters 4.0 12.3 a . ‘Source: “Textile Organon,“ Volume XXVI. No. 6. Supple Iune 1955. . 2Wool includes all processed wool and mohair. tion of synthetic fibers and the in- synthetic fibers havegmade into many - aditional markets. These conditions é.» much speculation on the future of 51:» petition with synthetic fibers. _, ._tition among fibers is not" new. Wool competing with cotton, silk and flax f‘ were developed. Synthetic fibers are 'ther. A synthetic fiber was produced by a Frenchman in.18,91,21 a long j terms of technological progress. interests were not unduly concerned earlier synthetic fibers, such as rayon, Hey competed more with cotton and silk 1. wool. However, many of the synthetic eloped sinceWorld War II have been i» ore specifically for the same end uses ‘f-= pita consumption of rayon acetate and n-made fibers has increased rapidly. ese fibers have made marked gains. .in j, tage of all fibers consumed, for most Table 1 shows a comparison of the vol- umed in 1953 for selected end uses. ftrial uses consume the largest portion k: fibers. Much of this consumption xpense of cotton. Rayon account-ed for t of tire-cord production in 1946’, but w nylon accounted for 97 percent in 1- next- largest user is the women and parel group. Consumption of man-made exceeds wool and even surpassed cotton 1. Man-made fibers also have made im- inroads into men and boys apparel and i uses. Rayon made up only 1.1 percent ponsumpnon or COTTON, WOOL AND MAN- 1 MADE mans BY END use. 19531 "wool", Man-made Ccitton fibers . — — Million pounds —— - ’ apparel - 975.6 201.8 1s'2.s I ses apparel 389.5 143.8 ' ~ 329.6 =- ants apparel 256.4 37.1 32.7 98 1274.4 191.3 187.4 - or-type products 361.6 65.4 152.1 '3 a cs 779.5 38.82 595.5 "'9 Organon," Volume XXVI, No. 6, Supplement, f1 mainly in automotive uses, carpets, upholstery 10.6 million pounds in 1953) and filters (4.0 million 1953.) . i: . ‘_. Hazel M., I-‘Synthetic Fibers and Textiles,” _-, 300, Agricultural Experiment Station, Kansas fllege, Manhattan, Kans., Apr. 195,2. l- and Man-made Fibers—A Review,” FAO Com- TSeries Bulletin No. 26,.Food- and Agriculture = tion of the United Nations, Rome, Italy, Nov. '2 _ D|eo £140- vnc/tnn A 4O - A i _ , RAvog ' 2° * carton $.35. 3‘? I 3.9 l 4.1 .'_‘l3 L 4.5 ‘ 4.7 l 4; i 5.1 l 5.3 x 5U mm I _ Figure 4. Prices oi textile fibers in the United States. 1935-55. Source: USDA, “Achieving a Sound Domestic Wool Industry" and “Wool Statistics and Belated Data." of the fibers used in carpets in 1949, but the pro- portion was 20.9 percent in 1951.23 e The volumes of cotton, wool and synthetic fibers used in different garments and other items during 1953 are shown in Table 2. The price of wool is its worst enemyin com- peting with synthetic fibers. It is higher than all the man-made fibers, except the new ones Joe- ing brought into commercial production, and the lack of price stability is a serious handicap, Fig- ure 4. Wool is likely to remain a high-price fiber because sheep growing is not well adapted to in- creased efficiency through technological progress. The man-made fibers probably will become cheap- er with improved manufacturing, methods and quantity production. Estimates are varied of the effect" synthetic fibers ultimately will have on wool. Some predict they will make wool growing extinct; others pre- dict a‘ greater percentage for wool use.“ Some doubt that a synthetic fiber can be developedito duplicate all of wool’s good qualities. Although synthetic.fibers may affect some old-line wool firms adversely, these fibers should extend the business of wool textile mills in general because they can be processed on wool textile machinery. WOOL TEXTILE INDUSTRY Early History and Development Wool processing was one of the first arts man discovered, although no one knows exactly when it was first used. Wool fabrics have been found in the ruins of stone.age inhabitants, which indicates that the use of wool was developed along with or soon after the art of making stone weap- ons. By 4.000 B.C.. the Babylonians were wear- ing beautiful wool fabrics. “Ibid. '“A New York advertising agency study indicated that wool will account for 10 percent of all fibers in 1975, The Commercial Bulletin, May 15, 1954. 11 Intensive efforts were made to establish a self-sufficient wool-manufacturing industry in this country at the end of the Revolutionary War in 1783. The first attempt was made in 1778 when the Hartford Woolen Company was formed at Hartford, Connecticut. The new country's leaders gave it all possible encouragement. Other mills were established at Stockbridge, Water- town and Ipswich, Massachusetts, but all of them failed because of the lack of skilled labor, poor equipment and the inferior quality of the wool used. The factory system of wool manufacturing was full grown by 1870. Mills became complete- ly integrated independent units, which could proc- ess raw wool into finished fabric. Machinery im- provements, mass production techniques and elec- tric power greatly increased flexibility and out- put. By about 1900, the industry generally had reached its present status and was supplying all domestic wool textile requirements?‘ Among the most important conditions respon- sible for the location of the wool textile industry in the Northeast were: 1. The people, and therefore the markets, were concentrated mainly in this area. 2. It was the center of sheep and wool pro- duction during the early period of development of the textile industry; and the raw material was available locally. 3. The area had excellent harbors where im- ported wools could be landed close to the mills. 4. The skilled labor was here. 5. The area’s large supplies of soft water were ideally suited for wool manufacturing. '6. Good locations were available for water- “ driven power machinery, and later for hydroelec- tric power. 7. Good inland waterways provided trans- portation. 8. The climate, especially the humidity, was favorable. 9. The raw wool market and marketing fa- cilities developed here. 10. Other manufacturing industries, which supplied the needs of the mills, also were devel- oped here. 11. The capital was raised here, and the area’s lending agencies developed a knowledge and understanding of the industry’s problems. “The foregoing historical data is from: McMullen, Thomas R., and Edla B. Carter, “Wool and Wool Manu- factures,” Business Information Service, Office of Domestic Commerce, U. S. Department of Commerce, Release of May 1950. 12 Steps in Manufacture Processing raw wool into finished fab an old art. Although simple in the beginni large number of operations, all vitally aff the final product. Many expensive, compli machines are required for the complete pr and a large mill has millions of dollars inv in buildings, machinery and elquipment. Hug ditional sums must be invested in raw wool s stocks in processing stages and storage, and ished goods on hand or on account to buyers. marketing, manufacturing and distribution n farm production phase. The processing steps age about 86 percent of the total cost; th maining 14 percent represents the cost o raw wool.“ All mills do not process raw wool throu the finished fabric ready for the garment I ers. Some complete certain phases, then seq Marketing Moving raw wool from the farms and ra to the manufacturer involves such mark services as assembling, transporting, gra storing and merchandizing. Brokers may range for the purchase or sale and take no in preparing, handling or financing. Commi agents, warehouses or cooperatives may w the wool on consignment, assume responsi for its care, sell it, collect from the buyers duct expenses and make settlement with the 1 ers. Dealers may take possession of the ~ ship it to consuming centers, prepare it for cessing, store it and sell it for their own acc Or the mill may purchase it from the grow his marketing agency. The combined cos raw wool marketing services average abou percent of the cost of goods to the consumer Sorting and Blending Raw wool is sorted after it reaches the . that is, fibers with similar characteristics placed in one group. No matter how care the grower prepares the wool, there will be v “mAchieving a Sound Domestic Wool Industry,” A to the President of the United States from the tary of Agriculture, U. S. Department of Agricu Dec. 1953, page 18. "Ibid. WOOL GROWER I WOOL DEALER Y MANUFACTURER Manufacturing Processes Sorting and Blending ‘Lcnoramc MANUFACTUDER on WHOLESALERIf I L a RETAILER J 1 I CONSUMER J Flow oi raw wool through the different marketing stages. Source: USDA. Woolen Process Pressed Felt Making Other Q Carbonizing Carbonizing (If Necessary) (If Necessary) l I Wool Dyeing Batching and BlendingJ (If Required) I 1 _ j \ Padding for )"§-"I Blending J I carding I Uphglstering, | | Furniture, FCarding and Condensing I I Hardening J Filters l A | A Spinning | | Milling or Fulling | I I _ Yarn Dyeing Washing, Dyeing, (If Required) Tentering Finishing, Cropping, Pressing F J I V " V Floor Felts and Hat and Industrial Felts Cap Felts Weaving Kniting ’ V J Warping, Sizing Knitting, Shaping, Finishing v Burling and Mending V Scouting V Milling and Drying Piece Dyei (If Required Y Finishing, Raising, Cropping, Pressing I 13 tions in fineness, length, soundness, color and other characteristics which may influence the quality 0f the finished product. quality goods require the most careful sorting, which is done by skilled workers. Since labor is expensive, there is a trend toward trap or bench sorting instead of detailed sorting. Blending is mixing various lots of .wool, or mixing wool with other fibers, to obtain the best possible stock for the price. It usually precedes scouring in the manufacture of worsted goods, but may be done after scouring, especially in mak- ing woolens. Worsted goods also can be blended in the gilling process after carding. Scouting Washing the dirt, grease and other impuri- ties out of the wool is called scouring. The raw wool is raked gently through a series of vats call- ed a scouring train. These vats usually contain warm water, soap and soda ash and rinse water. Water requirements average 1 to 3 gallons per pound of grease wool, depending on the method of operation. Carbonizing Wool that contains vegetable matter is car- bonized if enough vegetable matter is present to damage the value of the goods. The scoured wool stock is treated with an acid to reduce the vege- table matter to carbon, which can be removed mechanically by rolling and shaking. Unless the wool has been blended with fibers that would be damaged by the acid, it can be carbonized in the later stages of processing. Woolen Carding The next stage in processing is carding. Card- ing breaks up locks, untangles and straightens the fibers, mixes the stocks, removes some vege- table matter and delivers the stocks in a con- venient form for further processing. Woolen Spinning In woolen spinning, the card roving (ribbon of carded fibers) is drawn out to the desired di- ameter or weight, and the strand is twisted and wound onto packages suitable for weaving or shipment. Worsted Carding Worsted carding is similar to woolen carding except that greater efforts are made to arrange the fibers parallel to each other. Worsted Combing The functions of worsted combing are to re- move the short fibers intermingled in the stock, to straighten and make the longer fibers retain- ed lie parallel, and to remove more impurities. Combing may be preceded by several gilling op- erations, backwashing or oiling. The short fibers that are combed out (noils) are a valuable raw material for woolen goods. The longer fibers, with further processing, become Worsted top. 14 The highest a . (the filling or weft). A number of prepar Top Finishing v The sliver delivered from the combing chines is uneven in diameter, and must be i essed further to yield a commercial top of s ard weight, length and condition. Several st‘ of the slivers are run through gilling mac which further straighten, parallel and blen fibers, giving the top the uniformity req Moisture or conditioning materials may be . in this process. Worsted Drawing and Spinning More processes are required to convert sted top into yarn than to spin woolen yarn.- top must be drawn out, redoubled to reduce ation and drawn out again until the desired l‘ eter is obtained. Then it is twisted and W into packages. Some 7 to 11 steps usually a ' quired to complete the process. Weaving Woolens and Worsteds Weaving is the production of cloth by ' lacing at right angles the yarns running le wise (warp yarns) with those running cros processes, such as rewinding, beam warping, “ sizing, reeding, twisting in and drawing, pr the actual weaving or operation of the loom. Finishing The finishing of wool fabrics involves a i ber of operations. They vary according to, material and finish desired-but may include ~ ing, fulling, carbonizing, dyeing, perching, s’ ing, shearing, burling, mending, pressing, ins ing, labeling and packaging for shipment. Woolen and worsted yarns also are proc into knit goods, but processing is the - through the yarn stage. The bulk of the fa produced goes to fabricators, who fashion the rics into clothing and household goods, bu bulk of the knitted goods goes to retailers. Woven felts are processed much like l. fabrics, but the fibers in pressed felts are b together by interlocking the individual fi with heat, friction, pressure and bonding ag The distinct stages in processing at w the products are marketable are scoured ~ wool topsywoolen and worsted yarn, fabrics, goods and felts.” - ~ “American Wool Handbook,” Second Edition, T Book Publishers, Inc., New York, 1948. g Howell, L. D.,' “Marketing and Manufacturing Se and Margins for Textiles,” Technical Bulletin N0. Bureau of Agricultural Economics, U. S. Dept. of - culture, Sept. 1952. Carr, D. W., and L. D. Howell, “Economics of Prep Wool for Market and Manufacture,” Technical B l N0. 1078, Bureau of Agricultural Economics, U. S partment of Agriculture, Nov. 1953. ool-manuiacturing Countries g wool textile-manufacturing coun- world include the United Kingdom, a»; France, Germany, Italy and Japan. inception of the United States, which than it exports, these countries also fjiing exporters of wool textile goods. ’ countries manufacture some wool, gfor their own consumption. ‘Y- rt trade of all the leading countries fUnited Kingdom was cut off during ;II, and Great Britain's exports were f= ed. Europe and Asia were cut off ,rn Hemisphere supplies of raw wool. troyed many of the wool textile rmany, and Japan diverted many of nts to produce more essential war [the postwar years, the industry has restored in these war-torn countries, fceeding prewar capacity, Figures 6-A, They have a larger number of var- 9f machinery, which is more modern i; gher production capacity than before (ion in numbers of some machinery a change to automatic types rather __‘ ed capacity. Longer hours of opera- Y also can influence production great- >1 ~ v. ghproduction records may not be a sure of capacity, Japan’s production ns and fabrics during 1948-53 ranged Ito 800 percent above prewar produc- flsmaller countries recently have made _’ s in enlarging their wool textile in- aThe most notable examples are the ‘i1 wool surplus-producing countries, fbined mill consumption has increased cent above prewar levels?“ Some of _ ies may be eying foreign markets as V; ucing their own needs. ‘nds and Problems oi the Domestic Industry in Place, Location :1 Operated f. S. textile industry is important in ’s economy by any standard of meas- iIncome tax returns in 1952 show that Qmill products industry ranked seventh Llnatiorfs manufacturing industries. In ;,~ zthlaefiglVool Manufacturers, 1954, pages 2-108, _»'_ a Sound Domestic Wool Industry,” a re- President of the United States by the Secre- griculture, U. S. Department of Agriculture, f» page 32. III PRE-WAR I res: THOUSANDS - N u | | . HI UNITED UNITED FRANCE ITALY GERMANY JAPAN Kmgoom STATES Figure B-A. Worsted combs installed and capable oi operation, selected years. selected countries. 1952, it employed 1,134,680 people, compared with 15,944,379 employed in all manufacturing indus- tries.“ In addition to the industry’s contribution to our peacetime economy and comfort, military leaders rank its contribution to victory during zVogld War II third behind only munitions and oo . Wool textile manufacture is an important part of the textile industry. Woolen and wor- sted fabric production, which is only one segment of the wool textile industry, ranked 19th in num-U ber of people employed and 25th in value added by manufacture among the 458 industries survey- ed in the 1947 Census of Manufacturers. Although it is a large industry, basically it is made up of a number of small businesses. There were 808 plants in 1947. Of this number, 90 per- cent employed less than 500 people each, and about 75 percent employed fewer than 250 each. The industry paid about 469 million dollars for Wages and salaries in manufacture in 1950. 3'5” - [I] _VIO0LEN SPINDLES I wonsrso SPINDLES 3 5,000 - '3”- __ 2,500 m . ‘z’ - 1 a i! r31 ° 2,000 5. 3 ‘s: J g | s00 — 35 1,000 - I s00 - o UNITED UNITED FRANCE ITALY GERMANY JAPAN KINGDOM STATES Figure 6-B. Woolen and worsted spindles in selected countries. 1938 and 1953. ““‘The Merger Movement in the Textile Industry,” a staff report to Subcommittee No. 5 of the Committee on the Judiciary, House of Representatives, Washington, D. C., 1955, page 2. 15 III PRE-VIAR _ ass: rnousmos 8 8 l I i’ HI L UNITED UNITED FRANCE ITALY GERMANY JAPAN KINGDOM STATES Figure 6-C. Woolen and worsted looms (except carpet) installed and capable oi operation, selected years, selected countries. Source. 6-A, 6-B and 6-C: Bulletins of the National Association of Wool Manufacturers. 1939 and 1954. Machinery in place is one of the most ac- curate measures of the industry’s size. Table 3 shows the trends in number of wool textile ma- chines. Woolen and worsted spindles show sharp downward trends. The total number of broad looms is sharply downward also, but the reduc- tions have been in nonautomatic types. Although the number of Bradford combs has decreased, French combs have increased correspondingly to maintain the total number of combs. The comb- ing capacity, however, has been reduced because of the lower combing rate of the French i.‘ process. The reduction in number of spinnin chines does not necessarily mean that ther been a simliar reduction in spinning ca The newer, continuous system has a high v production so that fewer machines of this produce as much spun yarn as did more mac of the older, or intermittent type. 1' 5? Replacement of old looms with auto types has reduced the number of looms. again, total production capacity of looms h been reduced because of the higher rate o duction of the newer, automatic types as c0 ed with the older, nonautomatic looms. Besides the changed types of mach‘ multiple-shift operations also have helped set any loss of capacity caused by reduced bers of machines. There is a marked tren ward in multiple-shift operation, both on tw three shifts. A plant operating on two shif about twice the production of single-shift r tion. The bulk of the wool textile-processing - ment is located in the New England States. - ure 7 shows the percentage distribution by as of December 1949. No doubt, the pro has been reduced in New England and inc I in the Southeast since that time. New Eng portion of automatic looms was reduced 11- cent during 1939-49, but a greater change have taken place in the past 6 or 7 years wit, regional shift southeastward. TABLE 3. WOOL TEXTILE MACHINERY IN PLACE I. UNITED STATES BY YEARS‘ A Total Total As of Total worsted woolen worsted spinning spinning December combs spindles. spindles, thousands thousands 1919 2,3822 2.3562 2,4012 1925 2.7872 2,7572 2.4602 1930 2.7122 2,5102 2,2652 1935 2,631 2,265 1.916 1940 2,490 2,036 I 1.684 1945 2.598 1,930 1,605 1946 2.601 1.917 1,600 1947 2.656 1.921 1.561 1948 2.679 1.863 1.535 1949 2.727 1.844 1.443 1950 2.750 1.813 1.329 1951 2.807 1,792 1.236 1952 2.7.21 1.692 1,124 1955 2.0602 950 818 90% . 1o ._ 6O WORSTEO COMES A wonsreo SPINDLES so , WOOLEN SPINOLES 4O I WOOLEN AND WORSTEO LOOMS 3O 2O w o I a NEW SOUTHERN NORTH ALL ENGLAND ATLANTIC CENTRAL OTHERS Figure 7. Proportion of key wool-textile machinery, by geographical regions in the United States, December 1949. 16 ‘Source: National Association oi Wool Manufacturers B 1955. ' 2Not specified whether in place or otherwise. r “Included 141,000 combs for recombing but not classi to type oi comb. - lery. Techniques. _ Equipment 100i textile industry went through some between the two World wars.” Much p", hinery was idle. In” 1939, one of the s, the woolen and worsted manufac- only $9,307,000 for new plants and .83 As a result, the industry went into q II with machinery and equipment in lpoor condition. Almost no new addi- nts and equipment were made during lHeavy war and postwar demands were “tting the idle machinery back to work l easing the hours of operation through hifts. d-up activity Wore out much of the I ; and since machinery manufacturing j)» to the most essential production, "1 in machinery developed; Newly de- 3 productive machines made obsolete ‘the machinery that had not been worn industry has been and still is faced machinery replacement problem. industry has been able to modernize it because of good profits during the war far years. In 1947, the total value ad- jlanufacture was under 800 million dol- j the industry invested over 52 million the business. New machinery took most “enditures. 'le machinery has been improved great- ' recent years. The president of the Y Textile Machinery Association said“ advance in textile machinery during the years was the greatest in American his- ' e number of mills and spindles has de- ut production has gone up. Since World {the textile industry has spent over 3 bil- ,rs on new plants and equipment, yet the is still about 70 percent nonmodernized. ' y is costly. One die for a certain shut- i e are more than 3,000 varieties of shut- editor of Textile World reported35 on a '0 paring 1954 spinning frames with 1940 It showed that the 1940 frames were, rison, a waste of workers’ time. Many ', ill are running band-driven spinning liyet none of these has been manufactured l.‘ and Worsteds,” War Changes in Industry. Se- eport N0. 29, U. S. Tariff Commission, 1949, i; , 1, W., and L. D. Howell, “Econorrrnicisl of Preparing "for Market and Manufacture.” ec nical Bulletin 78, Bureau off Agricultural Economics, U. S. De- ent of Agriculture, Nov. 1953, page 50. ~' Frederick W., Jr., “Textile Equipment Advance at in Past 25 years,” The Co-mmercial Bulletin, l 1955. y P. M., “Obsolescence Is The Industry’s Biggest 4,” Textile World, Vol. 104, No. 12, Dec. 1954, l one part of a loom, costs over $12,000,“ since 1915. It has been estimated that a fourth to a third of all U. S. spindles are of this type (December 1954). The same situation probably exists with other machinery in use by the in- dustry. A loom census in 1942 by the Crompton and Knowles Machine Company showed that only 38 percent of their looms in use were less than 20 years old.“ A brief review of a few improvements in ma- chinery and operations may illustrate why a mill with outdated equipment has difficulty competing with a modern mill. Scouring equipment has changed little in re- cent years, so this machinery has not been out- dated. Scouring, however, is one of the less cost- ly operations and is seldom a bottleneck to most mills. Even with scouring, automatic controls have improved the operation and reduced labor requirements. The modern cards are metallic and self-strip- ping, which has reduced labor cost; they also are wider and offer greater carding surface. An 84- inch card costs only 11 percent more than a 72- inch card, 23 percent more than a 60-inch card and 35 percent more than a 48-inch card; yet, the -- 84-inch card offers 16 percent more carding sur- face than a 72-inch card, 40 percent more than a 60-inch card and 75 percent more carding surface than a 48-inch card. A mill needs fewer cards, fewer man-hours, less space and less upkeep to reach the same production." Spinning probably has advanced further than any other phase of the woolen and worsted in- dustry. Only a few years ago worsted yarn man- ufacturers used 9 and sometimes as many as 12 steps to convert wool tops into worsted yarns. Today, some of the manufacturers have reduced the drawing-out, redoubling and twisting opera- tions to as few as 5 on the same machinery and are even running some of the machines twice as fast as before. This was made possible by qual- ity control techniques and laboratory testing to insure the quality of the product. In general, the new spinning machines. are bigger, run faster, have larger packages, are simpler to operate and maintain and require few- er steps to convert the top into yarn. One of the most outstanding new machines is the pindrafter developed by the Uxbridge and Warner-Swazey Companies. A far-reaching development has been the adaption of the Long Draft System, commonly called the American System, to worsted spinning. It was developed primarily by the Whitin Ma- chine Works for processing long staple rayon. Al- though the principles may be similar, it is im- proper to term it the cotton system since it can- “Morris, James A., “Woolen and Worsted Manufacturing in the Southern Piedmont,” 1952, page 58. “Textile Industries, Vol. 118, No. 1, Jan. 1954, page 150. 17 not process fibers shorter than 1% inches. The Long Draft System was designed to process fi- bers up t0 4 inches long, in 56’s to 64’s quality top containing 2 to 3 percent of oil.” Von Bergen lists the advantages of this system as: a labor saving of up to $10 per spindle for a 4,000 spin- dle mill on two shifts, better fiber control and a smaller investment outlay. The disadvantages include: the requirement of highly uniform tops, difficulty of blending because of the smaller num- ber of doublings and a lack of flexibility because of the narrow range of tops (fiber lengths and grades) it can handle.” Some millsclaim savings of up to 30 cents per pound of yarn over the older system.“ Although only 24 companies had 151,- 848 of these spindles in 1952,41 their number has increased rapidly. In the weaving phase, probably the most im- portant advance has been the development of shuttle magazines which replace an empty shut- tle automatically without stopping the loom. This has increased production greatly and reduced labor requirements. Other improvements have made the loom more efficient and more automatic, and increased its operation speeds. Many improvements also have been made in winding devices, yarn-conditioning equipment, material-handling devices, washing equipment, dyeing, laboratory equipment and techniques, quality control devices and others. For example, one recent development in dyeing makes it pos- sible to do a job in a few minutes that formerly required 4 to 5 hours. Such a development makes the earlier system obsolete immediately. Machinery is not the only production factor that has been improved. The buildings which house the machinery are a radical departure from the old-style mills. New buildings have been de- signed around well-engineered machinery layouts for more efficient flow of materials. Rarely are they more than one story high. The efficient flow of processes reduces labor; and better light- ing, better temperature and humidity control and other improvements have increased overall effi- ciency. Many of the changes are not well adapt- ed to old-style, multiple-story establishments, but their advantages have prompted the building of new plants equipped with the latest machinery. These improvements also have resulted in greater labor efficiency as measured by the value “Von Bergen. Werner, and Herbert R. Mauersberger, “American Wool Handbook,” Second Edition, Textile Book Publishers, Inc., New York 16, N. Y., 1948, page 610. “Ibid., page 613. “Morris, James A., “Woolen and Worsted Manufacturing in the Southern Piedmont,” 1952, page 21. “Bulletin of the Wool Manufacturers, National Associa- tion of Wool Manufacturers, 1954, pages 2-77. A repre- sentative of Whitin Machine Works estimated there were a quarter of a million of these spindles in opera- tion at the end of 1951—Brandt, Carl D., “The Ameri- can System,” Textile World, Vol. 101, No. 12, Dec. 1951, page 113. 18 added per production worker. The value of duction per worker was $1,898 in 1939, but it increased to $4,813 by 1947. This is a 47 pe ~ increase in efficiency“ based on the same d value. The increase would have been some greater if management had been free to set entifically designed workloads on the new chinery. » Production. Exports and Ppiéential Capacity Production records and the productive pacity of the industry should be considere studying the size of the domestic industry. duction-is not a reliable guide to capacity bee it is influenced to such a high degree by dem A possible exception occurred in the early 0 war years when demand was high and produc was not controlled. Even then, production m have been increased through longer hours of eration. The longtime production trend in tops, y and fabrics is up, but sharp declines in the '4 resulted from decreased consumption and su tution of other fabrics for woolens and wors in consumer goods. Practically all the production of the U. S dustry is for consumption in the United St Exports normally account for less than 1A1 l percent of domestic production.“ An excep was the lend-lease ‘and United Nations relief » ing 1944-46 when the United States suppli considerable volume of woven goods for ex Large amounts of rags and clips are exported, these are considered raw material for cheap ' en fabrics and are not finished products. Ital our major customer for rags and clips. Top, yarn and fabric exports have been s . with no increase expected in the foreseeable. ture. The National Association of Wool Man p turers is concerned about the potential cap of the industry. The association recently req ed that the Federal Government make a su to determine whether the industry’s capacit great enough to meet any emergency. Re sentatives of the association report that some out of 800 wool textile mills have closed d since 1947.44‘ Some of these plants probably » reopened; machinery has been moved to o plants and put into operation, and a numbe new plants and additions to existing plants been built. The net loss, therefore, is not ne as large as mill closure figures indicate. of the closed mills probably would be put l~ into operation if demands and profits were fa v i able. “Morris, James A., “Woolen and Worsted Manufact in the Southern Piedmont,” 1952, page 37. “‘“Woolens and Worsteds,” War Changes in Ind Series, Repo-rt No. 29,- U. S. Tariff Commission, page 80. . “The Wall Street Journal, Oct. 3, 1955. Jintl In. Q- 1; .1 _ hinery in place is decreasing in the Unit- Ites, but this trend has been accompanied rincrease in hours operated—multiple-shift ‘on. Machinery has been improved, and v nts are much more efficient; still the in- jis largely nonmodernized by today’s stand- filProduction of goods also is increasing, al- ' ' it has been curtailed sharply in the past years. jg authorities have blamed overcapacity H jor cause of the industry’s ills in the past. ‘ tion levels were high during heavy post- iémands; a study of the conditions tending uce and increase capacity indicates that dustry could produce considerably more lits present volume. _ ture productive capacity is more difficult Jict. Probably no shortages will occur un- " critical world situation should develop which l» greatly increase the need for apparel fab- 2i dwin Wilkinson in testimony before the i Commission, December 22, 1954, said, f textile production potential far exceeds ; t and prospective demands?“ and Mergers Most industries have experienced good and ‘business cycles and this is certainly true with iomestic wool-textile industry. The bulk of pool-textile market is for apparel products. 2.. people feel an economic pinch, it is easier jt down on clothing expenditures than on ex- ‘tures for most other consumer goods. ilThe wool industry went through one serious . f1 ess depression before World War II. In the “ears, 1928-38, the‘ industry showed profits taxes only in 1933, 1935 and 1936. The to- ‘net combined losses after taxes during this I». amounted to almost 100 million dollars.“ 5A small number of large woolen and worsted ufacturers showed the following percentage ns on stockholders’ investments after taxes _ g l940-48z47 1940 - 5.8 1945 - 10.3 1941 - 11.8 1946 - 24.8 1942 - 9.5 1947 - 20.2 1943 - 9.1 1948 - 20.9 1944 - 7.8 Comparable data for suceeding years are not 8' able; however, figures for woolen and wor- ‘ and broad woven fabric mills show that ' its declined sharply. Profits were given a gtin 1950-51, with the outbreak of the Korean ,after they had declined from the high 1946- p, period. ‘f- '- lletin of the Wool Manufacturers, National Associa- *5 of Wool Manufacturers, 1954, pages 1-42. oolens» and Worsteds,” War Changes in Industry, ries, Report No. 29, U. S. Tariff Commission, 1949, i ge 59. . ,id.. The textile business has been declining since 1951. It may not have reached the prewar de- pression stage, but it is serious. The textile mill products industry showed a profit of 6.5 cents per dollar of sales in the first quarter of 1941 and 9.5 cents the first quarter of 1947. Profits were 5.1 cents per dollar of sales the first quarter of 1951 but dropped to 1.6 cents during the third quarter.“ Since the third quarter of 1951, no quarter has been higher than 2.7 cents per dol- lar of sales to May 1954.49 The wool industry has been the hardest hit of any of the textile mill products group. During 1947-55, the wool indus- try suffered a 29.9 percent decline in business.“ Production and profits have decreased year- ly since 1951. although 1955 appears to have re- versed the downward trend. However, plants continue to close and business failures are high. Dunn and Bradstreet reported 250 business fail- ures among manufacturers of textile mill pro- ducts and apparel for the first half of 1955, com- pared with 297 failures the first half of 1954.51 Wall Street Journal reporters say these figures show textile mill products and apparel accounted for 22 percent of all 1955 industrial failures to October 24.52 The current situation in the wool-textile-"in- dustry may not be a depression by the prewar standard, but it is a depression compared with other U. S. economy. Many circumstances have been responsible. Reduced buying of the indus- try’s products is a most obvious factor. Prod- ucts from other textile industries have replaced some of wool’s markets. Excess capacity in the industry, aggravated by reduced consumption, has increased competition to almost a “cut- throat” business. Mills have sold at a loss to keep their workers and stay in business. Mar- ginal mills that were able to stay in business dur- ing the war and postwar booms were slow in go- ing out of business. This depression can be attributed partially to the high cost of. labor and the demands of labor unions. In some cases, union regulations would not permit a mill to increase the number of ma- chines, per worker so as to take advantage of the improvements in new machinery. A number of new, well-laid-out plants, equip- ped with the most modern machinery, scientifi- cally determined workloads and lower per-hour wages, established price levels impossible for many mills to meet. A wide disparity of produc- tion efficiency was established in the industry. Woven fabric imports have increased sev- eralfold, although imports still constitute only a small fraction of U. S. production. The bulk is now high-quality goods, and imports have hurt “Textile Industries, V0-1. 118, No. 3, Mar. 1954, page 97. “Textile Industries, Vol. 118, No. 5, May 1954, page 81. “U. S. News and World Report, July 8, 1955. “Daily News Record, July 18, 1955. ““How to Fail,” The Wall Street Journal, Oct. 24, 1955. 19 the U. S. mills producing these goods. Other im- ports have been small except for the volume of wool tops in 1952. Possibly the threat of reduced tariffs and increased imports has influenced busi- ness more than the actual imports. a Other conditions include high taxes in some areas, outdated depreciation schedules and poor management. Management may be criticized for paying high dividends during lush years and sav- ing inadequate reserves for modernization.“ Un- ion policy in regulating labor made it difficult for management to utilize its labor efficiently.“ The rapid tax amortization granted to syn- thetic fiber manufacturers has helped the com- petitors of the wool textile industry. As of Sep- tember 30, 1954, the Office of Defense Mobiliza- tion had issued 32 certificates of necessity for the manufacture of synthetic fibers. The cost A of these 32 projects was $257,854,000. Only one project had not been started by the date on the certificates of necessity, while 22, or 68.8 percent, had been completed.“ ‘ Some other financial conditions have helped the wool-textile industry. Substantial deprecia- tion allowances help the industry to purchase cap- ital equipment.“ Also, new machinery purchase plans help plants with low reserves to modernize. The Commercial Investment Trust, the world’s largest industrial financing firm, has a “pay-as- you-depreciate” 10-year installment plan.“ New financial arrangements also have been offered by machinery makers. Although the wool-textile industry is basi- cally one of small businesses. there is a recent trend toward increased size of firms. There have been a few large concerns, such as the American Woolen Company, but no one firm controlled a very large share of the market. Recent mergers have tended to increase the size pattern in the in- dustry. The Federal Trade Commission reported“ that during 1948-54, 74 textile and apparel con- cerns acquired 117 other concerns. Of these, 55 acquired only 1 company, 10 acquired 2, 5 acquir- ed 3, 2 acquired 4, 1 acquired 6 to 10 and 1 ac- ouired 11 to 20 companies. These figures show that the majority bought only one company, but a small number expanded greatly. The textile and apparel group ranked third among all indus- try groups in number of firms taking part in mergers and sixth in number of firms acquired. “Time Magazine, Sept. 1954. ‘WA Lesson for All of Us,” Textile Industries, Vol. 119, No. 7, July 1955, page 61. 55“Expansion Progress-Projects Under Certificates of Ne- cessity,” Office of Defense Mobilization, Washington, Apr. 1955. “Howe, Frederick W., Jr., “Textile Machinery Advance Greatest In Past 25 Years,” The Commercial Bulletin, Feb. 1.2, 1955. ““CIT Plan for Financing Textile Machinery,” The Com- mercial Bulletin, Dec. 25, 1954. ““Report on Corporate Mergers and Acquisitions,” Fed- eral Trade Commission, May 1955, page 28. 20 The extent of present concentration is a = ter of sharp dispute.” A labor union claims I mergers have resulted in substantially red competition. On the contrary, a representa of the largest textile organization claims tha single company controls more than 3 to 4 per of the total textile volume.“ Two unbiased thorities see the merger movement as nat‘ inevitable and no cause for al5arm. Some advantages of increasing the siz the textile-industry enterprises through ‘mer are: 1. Diversification of products so tha business is bad in one field and good in anot the business still can show a profit. 2. More efficient use of research, purc ing, selling and top-management skills. 3. Improvement of facilities. 4. Decentralization of production to a complete shutdowns from strikes or mill dam 5. More effective use of name brands. '6. Obtaining tax savings through loss c its carried over. 7. Achieving a stronger financial struct The increased number of textile compa with plants in several locations probably strengthened the possibility of branch plan Texas. - Tariffs and Imports Like the producers of raw wool, the m facturers of wool-textile goods have had ta protection since 1816. Today this country the world’s highest level of living and offers attractive market to other countries. “ the U. S. textile industries are handicapped competing with other countries because of m higher production costs. Tariffs, therefore, a vital subject in any analysis of the dome textile industry or discussion of its future. especially is true in light of this country's l ership in attempts to promote free World tr The “trade-not-aid” philosophy has taken m of the political-spotlight during the past 3 0 years. In tariff acts passed by the U. S. Congr the longtime trend in duties on wool manu tures is upward. Recent rates negotiated thro treaties and agreements by the executive bra of the federal government are sharply downw The Trade Agreement Act of 1934 and numerous extensions have given the Presid 5”“The Merger Movementin the Textile Industry, staff report to Subcommittee No. 5 of the Co-mmi on the Judiciary, House of Representatives, 1955, i. 14. “"Ibid., page 14. V, to reduce tariffs, and it is through f; eements that our duties have been low- iterially. The first important reductions _'s act were in an agreement with the Kingdom which became effective January A slight reduction had been given to 0n billiard clothin 1935. In the British nt, ad valorem rates on wool fabrics were _t0 45, 40 and 35 percent. An unusual _;,- the agreement was that the lowest rate pply to highest priced goods, which re- all previous tariff act policies. The rate I highest priced imports was thus reduced '1 to 35 percent. ‘ next duty-lowering trade agreement was I d at Geneva, and the concessions grant- me effective January 1, 1948. In this 1nt, raw wool duties were lowered 35 per- >= om 34 to 251/9 cents. Specific duties on and worsted fabrics were lowered from 50 f r pound to 37 % cents, or 25 percent. The Ti em rate was lowered to 25 percent, which "to all goods regardless of value. er tariffs were lowered in 1948, imports tically all manufactured goods increased. w woolen worsted fabrics cause a greater ($13116 domestic industry than the other im- i Duties on fabrics valued at over $2 per {ere 50 cents per pound and 60 percent ad E in 1930, but are now 37%; cents plus 25 I of the value. Thus, an imported, 8-ounce fabric valued at $5 per yard paid a duty nts (14 pound) plus $3 per yard in 1930. (the duty is 18.75 cents plus $1.25 per yard erence in duty of $1.81 per yard. Mills in __untry gain or lose contracts over a few 'r yard difference in bids. About 80 per- MIL. so. YDS. ____ __ _ fi All other 2O ‘i V/A United Kingdom """""" ' ' I946 I947 I948 I949 I950 I951 I952 I953 l Figure 8. Total annual imports of woven wool apparel fabrics, 1946-53. Source: USDA. __ cent of our imported woolen and worsted fabrics comes from the United Kingdom, Figure 8. Lower raw wool tariffs after 1948 have help- ed lower the income of domestic wool growers and reduce sheep numbers in the United States. The bulk of our dutiable wools is imported from the five major wool surplus producing coun- tries in the Southern Hemisphere, Table 4. Ar-- gentina is our leading supplier of the duty-free wools. Other major suppliers are New Zealand, China, United Kingdom, Syria, Iraq, India and Pakistan; but a number of other countries sup- ply small amounts. The ratio of imports of high-priced goods to cheap goods has increased tremendously. In 1939, fabrics weighing over 4 ounces per yard and val- ued at over $2 per pound accounted for only 14 percent of imports. In 1947, they were 74 percent and in 1948, 90 percent. The volume was more 14. IMPORTS OF DUTIABLE WOOL, CLEAN CONTENT. INTO THE UNITED STATES, FROM LEADING COUNTRIES. 1935-54‘ Argentina Australia New Zealand Union oi South Africa Uruguay Total’ — — — — — — — — — — — — 1000 pounds —— — -— — — — — — —- — — — 7 441 5.524 Z30 3,218 29.746 16 654 18.296 1 846 14.067 75.559 17 638 40.305 11 024 2 257 13.554 94.263 6.779 3.934 293 1.867 20.993 14.022 16.871 3 817 10.093 59.567 44.062 20.988 14 621 25.543 118.302 105.832 125.394 19 638 61,812 329.064 89.014 284.908 15 992 35 934 20,758 457,116 104.276 168.275 16 749 22 386 63.872 397,427 108 815 122.714 14 226 12 171 64.733 344.906 82 191 167,582 33 959 19 402 93.115 417,970 109 410 196,034 38 014 56 629 57,990 473.040 49 503 124.125 21 701 20 307 36.691 259.266 59 847 84.515 13 211 16 646 59.506 246.228 24 045 56.747 13 960 I 41,193 154.931 44 248 86.199 20 929 12 326 73.848 250,112 27 934 121,262 25 049 23 563 57.825 272,017 29 787 93,522 54 892 24 286 32.069 248,450 49 173 46,301 22 788 11.130 28.736 158.128 14 521 42,613 16 199 14,123 11.805 99.261 the other countries. g "Wool Statistics and Related Data" Statistical Bulletin No. 142. USDA. Sept. 1954. page 33. 21 than 4% times greater in 1948 than in 1939.61 Since the conversion cost has increased more than raw wool prices, the 25 percent ad valorem rate is less protective now than it would have been be- fore the war, according to the Tariff Commis- sion.“ ’ One important reservation in the Geneva agreement may play an influential role in the fu- ture of the wool textile industry: “Note—The United States reserves the right to increase the ad valorem part of the rate applicable to any of the fabrics provided for in item 1108 or 1109 (a) of this part to 45 per centum ad valorem on any such fabrics which are entered in any one calen- dar year in excess of an aggregate quantity by weight of 5 per centum of the average annual pro- duction of similar fabrics in the United States during the three immediately preceding calendar years.” This note refers to Woolen and worsted I fabrics. There are three main problems connected with applying this clause. First, many produc- tion records are listed in yards instead of pounds. Second. there are differences of opinion as to What characterizes similar fabrics. Third, it is up to the President, with his advisors, to increase the rate; and the industry’s leaders have had dif- ficulties in obtaining relief in the past. The es- cape clause in the 1934 Trade Agreement Act also allows protection for domestic industries, but it was applied only four times before May 1955.63 The ratio of wool-textile imports to domestic pro- duction has been increasing since 1947. There are many indications that wool-textile imports will continue to increase.“ Tariffs are lower than at any time in almost a century, and they have been changed so that expensive goods pay the same rate as cheap goods. The world's production potential is probably greater than it was before the War, and it is definitely greater in .. some countries that need to trade With the United States to get dollars. World production is increas- ing. World top production in 1953 was 30 percent above 1952 and exceeded the previous record of 1950 by 4 percent. Greater quantities of raw wool are being produced than ever before. Some of the prewar markets are closed, or partially closed, because of the “cold war”; and a number of smaller countries that previously imported many of their needs are trying to produce for themselves. The domestic textile industry is concerned that imports will be greater. Japan’s production, largely consumed by China prior to World War II, ‘““Woolens and Worsteds,” War Changes in Industry, Se- ries, Report No. 29, U. S. Tariff Commission, 1949, page 17. “Ibid, page 17. “Clark, Albert, “Surrender of Power,” The Wall Street Journal, May 13, 1955. ““‘Woolens and Worsteds,” War Changes in Industry, Series, Report No. 29, U. S. Tariff Commission, 1949, page 18. 22 exceeds prewar levels. To help Japan find markets, the United States has lowered t to encourage other countries to make such cessions. In 1948, the Japanese showed _ samples of worsteds that undercut comp British goods by as much as $1.50 per yard. 1954, Japan landed wool cloth in the United S at $1.50 to $2 per yard less than American- goods after the duty Was paid.“ The wide difference in labor costs is th‘ jor condition that enables foreign countri pay our tariffs and still undersell us. Labor in the U. S. wool-textile industry averaged q per hour in 1954. Numerous sources esti labor costs in Japan at 14 cents per hour. - rates in other countries may be estimated hourly wages paid in cotton textiles. These United States $1.30, United Kingdom 40 _ France 38 cents, Germany 31.7 cents, Italy ( mated) 30 cents, Japan 13.6 cents and Indi cents!" Although production per Worker i . United States is higher than in other coun it does not compensate for Wage differences. addition to higher hourly rates, We have hi fringe benefits for workers, which are ch able to labor. Other costs of production als higher in this country, but labor cost is the If difference. Wages and salaries account for v 60 percent of the value added in manufactu the United States. ~ The problem of tariffs and world trade sents a real dilemma. The tariff itself is si compared with manipulations such as ma currencies, currency devaluation, compens spending, unbalanced budgets, discriminatory rency exchanges, discriminatory import and port taxes, import and export quotas, gover 1 fixation of minimum prices, state financing port subsidies and a host of others. Acco to the American consulate in Bradford, Eng “The export price advantage as a result of d uation (British) presented a special opport for the sale of wool textiles to the United Stat All the requests for lower U. S. tariffs t come from foreign countries. Many come within this country. Cotton, wheat and othe terests are strong proponents of lower tarif that other countries can get U. S. dollars to their products. Cotton, wheat and wheat ' are protected by a duty as well as by an i k ible import quota imposed under section 22 of Agricultural Adjustment Act. Only 800,000 b els of wheat (less than 1/10 of 1 percent of production) can come into this country per ' Wheat flour is limited to not over 4 million p0 ' (about 1/50 of 1 percent of our production) the cotton quota is less than 1 percent of our “Ibid, page 112. “Textile World, Vol. 118, No. 7, July 1954, page 59. “Ashmore, William G.. “We Are Not Expendable,”- tile World, Vol. 105, No. 4, Apr. 1955. , “Foreign Agricultural Circular, U. S. Departme Agriculture, Oct. 21, 1949. I In addition, wheat is heavily subsidized the international wheat agreement.“ ; trary to claims by some foreign and do- interests, the United States no longer can ',idered a high tariff country. The Presi- 5i Commission on~ Foreign Economic Policy nd-all Commission) said, “It seems clear test that can be devised that the United is no longer among the high tariff coun- i the World.”7° The American Tariff Lea- a 1951 world trade study, found that 35 ading trading countries had higher tariffs United States. Of five leading coun- "1 nited Kingdom, France, Canada, Germany 2e United States), the U. S. had the lowest _-_ e tariffs. The league found that the aver- f S. tariff was only 5.1 percent of the value rted goods. The Randall Commission j-that duties dropped from 24.4 percent when sited States started cutting duties to 12.2 j; in 1953. About 58 percent of U. S. im- flare duty free. litical developments or economic conditions hange the outlook. but it appears that im- i are likely to continue the higher trends. tra 20 percent of ad valorem duty, if the 2a reservation is applied, may not limit im- It is possible to obtain increased protec- fltowever, if the situation becomes critical, ‘wn by the success of Watchmakers and bi- ymanufacturers in 1955. The bicycle in- i_ is especially significant in that the manu- frs’ arguments hinged solely on damage to “estic industry. and the North-to-South Migration , "lbor is the big problem of the domestic in- . It is the largest single cost item in con- _ raw wool into finished fabrics, and wage tin this country exceed those of the next f. major country three to one. Average y. earnings of wool-textile workers increas- ery year during 1939-52. Other problems inge benefits, work loads, efficiency and ctivity of workers, attitudes of the workers o». eir unions and wage differentials between and urban centers, regions and industries. is one of the main reasons that mills are "g in the North and the industry is growing = South. e wage rate differences between regions United States are much smaller than be- this country and wool-textile exporting , 'es; however, they are important in this r competitive industry. Figure 9 shows differences in the 1952 wage rate between “England and the Southeast. l e industry is highly concentrated in the fPEngland States, where wool-textile wages ckbien, O. P., “Address on Impo-rt, Export Trade Tariff,” The Wyoming Wool Grower, June 3, 1954. , 'ff Tactics,” The Wall Street Journal, Feb. 2, 1955. 50' 40' PERCENT u O 20- \\ ‘P’ \ o ,__..- unozn i |oo to] ||o T0 ||zo ro [use 1o I140 ro 15o to 16o "r0 I80 T0 oven I00 no uzo no no 15o |eo no 20o GENTS PER HOUR Figure 9. Pay ranges of production workers in woolen and worsted mills, New England and Southeast, April-May 1952. Source: 3‘Wage Structure—Woolen and Worsted Tex- tiles." USDA. ‘ are higher than the U. S. average. Only about 1 percent of the textile workers, those located in the Pacific Northwest, have higher wage rates than New England, which is followed by the Mid- dle Atlantic, Great Lakes and Southeastern areas in that order. Only about 13.5 percent of the pro- duction workers were in the Southeast in 1952. These workers, on the average, received 26 cents per hour less than the U. S. average and 31 cents per hour less than those in the New England States. Thus, the average wage costs in the ‘Southeast were more than 2O percent lower than in New England, according to the Bureau of La- bor Statistics. In 1953, the woolen and Worsted industry paid its production and related workers $284,124,000." If 20 percent could have been saved on this labor bill, it would amount to $56,- 824,800, or more than the whole industry’s prof- its for many years. Fringe benefits are labor costs that are not included in weekly wages and hourly rates. They include pensions, social security, paid rests and vacations, hospitalization and other benefits. Ac- cording to a U. S. Chamber of Commerce study in 1953,72 the textile mill products and apparel industry has the lowest fringe benefits of all ma- ior industry groups except the pulp, paper, lum- ber and furniture groups. Fringe payments in 1953 for textile mill products and apparel ac- counted for 14.5 percent of the payroll. The to- tal fringe payments amounted to 22 cents per hour, or $451 per year for each employee.” There are regional differences in benefits the same as in hourly wage rates. Although the U. S. average in this industry is 14.5 percent of the payroll, the Northeast paid 16.5 percent, the Eastern North-Central paid 13.5 percent and the Southeast 10.5 percent. Applying these percent- ages to New England’s $1.50 per hour production worker rate and the Southeast’s $1.19, gives a "Bulletin of the Wool Manufacturers, National Associa- tion of Wool Manufacturers, 1954, pages 2-80. "“Fringe Benefits 1953.” U. S. Chamber of Commerce, Washington, D. C., 1954. "Ibid., page 11. 23 fringe-benefit cost advantage of 12 cents per hour to the Southeast. Adding this to the 31 cent hourly wage advantage makes a total of 43 cents advantage of the Southeast over New Eng- land. The four U. S. Chamber of Commerce stud- ies (1947, 1949, 1951 and 1953) show that fringe payments have grown steadily. The part that labor unions have played in the liquidation of mills has been discussed con- siderably in trade periodicals. Although many mills had suffered losses for several years, they were not granted any wage reductions until 1954. The unions have made decisions on management problems such as workloads, wage rates, operat- ing schedules and fringe benefits.“ A letter written by a Massachusetts firm to. its 1,000 em- ployees illustrates the wage problem. It said, “The mill’s average straight time hourly wage rate of $1.605, plus vacation, holiday and insur- lance benefits, created a gap of 56 cents per hour in favor of competing southern mills. Simple computation proves an annual competitive dis- advantage to this Massachusetts mill of $1,065,- 000 in wage costs alone?“ Faced with competition from a growing and more efficient industry in the Southeast, the older mills in the Northeast had to decide whether to modernize or close up. The advantages of new modern machines are not completely utilized un- less more of these machines are assigned to a worker; because of union policy, in some instan- ces workload assignments could not be increased even though the workers would be doing no more actual work. About 90 percent of the woolen in- dustry operated 4 looms per weaver; yet, in some mills a weaver operated as many as 16. If one mill increased workload assignments for weav- ers, then the 250 other mills would request the same.” In late 1954, the CIO agreed to allow a mill in New Hampshire to assign 12 looms to a weav- er. instead of the customary 4, for a 6-weeks’ trial period." New contracts in 1955 allowed companies to change workload assignments with- out referring the matter to arbitration if the un- ion objected.“ This workload assignment flexi- bilitv is one of the strong labor advantages in the South. The labor unions are strongly opposed to states’ right-to-work laws. These laws, allowing the states to ban union security agreements, are authorized by Section 14 (B) of the Taft-Hartley Act. They outlaw the closed shop in that a work- er cannot be forced against his will to join‘ a un- ion as a condition of employment. ’“‘A Lesson for all of Us,” Textile Industries, Vol. 119, No. 7, July 1955, page 61. “The Commercial Bulletin, Feb. 6, 1954. “Hogan, John A., “Employment and Collective Bargain- ing Problems in the American Woolen and Worsted In- dustry,” Unpublished Ph.D. Thesis, Harvard Univ., Cambridge, Mass., June 1952. "The Commercial Bulletin, Aug. 4, 1954. "The Wall Street Journal, July 18, 1955. 24 I the South. ' Eighteen states now have such laws. include Arizona, Arkansas, Alabama, Flo Georgia, Iowa, Louisiana, Mississippi, Nev Nebraska, Tennessee, Texas, Virginia, Carolina, South Carolina, North Dakota, Dakota and Utah. Eleven of these states ar (DZ The closing of mills in, the North and growth of the industry in the South have ca a great deal of concern in t>he New Eng States. A number of towns which depended marily on textile employment faced a~se problem when the mills closed. Although progress has been made in attracting new in tries, the problem was so acute that the go nors of the New England States appointed a mittee in 1952 to study the problem thoroug a number of other studies also have been m One, the Blanchard study,” lists the follo causes of New England’s textile troubles: labor costs, attitude of state authorities, uns factory labor relations, trends to higher ta no decisions on third-shift women, labor sh ages in some areas, high power and fuel costs cost of unemployment insurance, workmen’s c pensation and fringe benefits. The textile industry has been moving S since the 1920’s, and it has been shrinking in at the same time both in number of people ployed and number of plants. The northern a are losing textile workers and plants faster t the South. During 1946-54, total liquidat were 640 plants with 167,945 employees. England lost 236 plants wit-h 91,835 employ the Middle Atlantic States 287 with 51,245 ple and the South 117 plants with only 24, employees.“ The South had 17.6 million spin in 1925 and 18.4 million in 1950. New Engl declined from 18.3 to 4.3 million during the s period. By 1950, 80 percent of cotton textile pacity was in the South.“ In April and May 1952. about 70 percen the employees in worsted mills were in New land, and this area had over half of the W0 mill employees. In woolen and worsted m facture, New England had 63,000 employees, Middle Atlantic States 18,000, the Southeast 000 and the Great Lakes and Pacific Coast ions 54,000 employees. FACTORS INVOLVING THE THREE REGIONS Labor Labor Factors in the North and South The wool textile industry is a labor-orien industry. Labor constitutes the largest si "Thomas, P. M., “Unions at the Crossroads,” (Edito Textile World, V0-1. 102, No. 5, May 1952. \ 8°“The Merger Movement in the Textile Industry,” a s report to Subcommittee _No. 5 of the Committee on Judiciary, House of Representatives, Washington, D. 1955, page 8. “Ibid, page 9. COSTS AND MARGINS AS A PROPORTION OF VALUE OF WOOLEN AND WORSTED PRODUCTS. UNITED STATES. 1939 AND 1947‘ 1939 —— — — — — — — 1947 — — — —-— — — — — S ' 6. . W 1 6. . . . All plants All plants Yarn m1lls worstoecgeigbric Finishing — —-— — — — — —— —— Percent — — — — — —— — —- ‘1 15.540515 100.0 100.0 100.0 100.0 100.0 100.0 materials 6. supplies” 58.8 53.1 61.6 59.0 51.1 17.3 argin 41.2 46.9 38.4 41.0 48.9 . 82.7 G wages ’ 23. 23.5 12.8 22.3 24.8 56.3 ‘as 4.0 3.2 2.6 2.6 3.3 11.2 on 19.5 20.3 10.2 19.7 21.5 45.1 7 1.3 1.0 0.6 0.5 1.1 4.9 ' 41 electric energy 0.6 0.5 0.6 0.8 0.4 1.0 ' G commission work 0.6 3.1 9.1 1.7 2.6 0.4 ' ' 15.2 18.8 15.3 15.7 20.0 20.1 I - tural Economics. USDA. September 1952. page 130. ports and containers. . item in processing, while transporting raw ' _ ls to mills and finishedgoods to market mparatively minor costs. ables 5 and 6 show the proportion of costs t. rgins making up the value of woolen and products for 1939 and 1947 and the cost nufacturing wool covert and worsted twill l o 4 Qlaries and wages cost the woolen and wor- _Y= dustry 23.5 percent of the value of its prod- 1939 and the same percentage in 1947. 1- costs varied in 1947 from 12.8 percent for - g and combing plants to 56.3 percent for "pg plants. In 1939, total woolen and wor- 11 woven fabric_ production was 567 ,560,- uare yards valued at $476,787,000 f.o.b. nt, which was less than 85 cents per yard. 7, production was 814,753,000 square yards J at $1,238,609,000 or over $1.52 per square "at the plant.“ L16. COST TO MANUFACTURE WOOL COVERT AND l‘ WORSTED TWILL. UNITED STATES. 1950‘ v Item Wool covert Worsted twill e — — — Dollars per yard — — — 111 0.0521 2.5915 i 0.6112 1.4185 1 trotion —-— 0.1553 ‘ o 0.2971 0.2748 7 Security. etc. 0.0189 0.0742 p. 0.1440 0.2002 _~ es 0.0280 0.0677 2.051s 4.0552 I: Howell, L. D., “Marketing and Manufacturing Serv- Margins, tor Textiles." Technical Bulletin No. 1062. ~~ o! Agricultural Economics. USDA. September 1952. .136. i letin of The Wool Manufacturers, National Asso- gvtion of Wool Manufacturers, 1954, pages 2-138. ‘Howell. I.. D.. “Marketing and Manufacturing Services and Margins {or Textiles." Technical Bulletin No. 1062. Bureau i depreciation, interest. insurance, rent, taxes, profits and other expenses. A general trend in rapidly increasing labor cost has occurred since 1939. Labor cost in- creased about 30.percent during 1947-54. The National Association of Wool Manufacturers esti- mated labor accounted for 60 percent of the value added in manufacturing in 1954. Value added is the value of the products less cost of materials, supplies, fuel, electricity and contract work. The cost of labor to make and sell woolen covert and worsted twill in 1950 accounted for 55 and 62 percent, respectively, of all costs less ma- - terials. Lower hourly wage rates and fringe benefits gave the Southeast 43 cents per hour labor ad- vantage over the New England States in 1952. One survey showed that in 1951. a differential of 30 cents per hour accounted for 8.1 to 12.1 per- cent of the price of eight different fabrics.“ Another item in the cost of labor is produc- tivity. It may be influenced by workload assign- ments, skill and attitudes of workers and the effi- ciency of the machinery and equipment. Labor productivity is greatest in the South- east. Most of the plants in the Southeast are newer and are equipped with more modern ma- chinery than those in the New England States. The buildings are constructed for the new equip- ment and are planned carefully to allow the most efficient flow of material through the processing stages. Management in the ‘Southeast has had more freedom to use scientifically determined workloads to fit thenew machinery so that work- ers in this area operate more machines. New job arrangements with special workers to do such jobs as oiling and maintenance have increased overall mill efficiency. ““Report on the New England Textile Industry,” Com- mittee Appointed by the Conference of New England Governors, 1952, page 29. 25 The editor of Textile World said that the present advantage of the South over Massachu- setts is largely a matter of people and attitudes.“ A plant manager with mills in both the Southeast and the North said that the people in the South- east liked their jobs and worked industriously. which was not always true of workers in the North.“ Worker efficiency is difficult to compare in the Southeast and the North because standard conditions do not exist. Investigations on rela- tive worker efficiency by 12 consulting firms are conflicting.“ A broad study, based on company data and interviews with top executives of more than 50 firms in all major types of industry, leads “to the almost unanimous conclusion that the South has extremely favorable and highly unex- pected labor values for industry?“ The average skill of woolen and worsted tex- tile workers is probably higher in the Northeast than in the Southeast because the industry is so much older in the North. This advantage very likely is offset by the wider choice of workers be- cause of the plentiful supply in the Southeast. The 1951 average annual wage for factory work- ers in the Southeast was 60 percent higher than the average farm income per worker.“ This may explain the smaller turnover of workers, the lower absenteeism and the lack of interest in unions at- tributed to southern workers. Most of the new wool plants going into the Southeast have preferred to train their own work- ers from the rural labor force rather than bring them from the North or attract them from other industries, such as cotton textiles. Locations in cotton textile areas where labor rates are low have seemed to attract some mills. Some have used trained northern workers who migrated from the South earlier and were anxious to return home. The trainability of southern workers is ex- cellent.” Training new labor for new machines seemed preferable to converting workers experi- enced on older types. The new workers have no preconceived ideas as to what constitutes a rea- sonable workload and none of the unfavorable habits often attributed to workers in older areas. The labor advantage of the Southeast over the New England area likely will continue; how- ever, it probably will be narrowed. Northern workers are being assigned more machines, or “Thomas, P. M., “Massachusetts Can Save its Mills,” (Editorial) Textile World, Vol. 102, No. 9, Sept. 1955, page 329. "Arden, Ringold, “The Guaranteed Annual Raise,” Tex- tile Industries, Vol. 119, No. 7, July 1955, page 117. ““Report on the New England Textile Industry,” Com- mittee appointed by the Conference of New England Governors, 1952, page 192. "Robock, Stefan H., and John M. Peterson, “Facts and Fiction about Southern Labor,” Reprint from Harvard Business Review, Mar. - Apr. 1954, page 80. “Ibid., page 81. “Ibid, page 83. 25 "°“Employment and Earnings,” Vol. 2, N0. 6, Bureau higher workloads, which will reduce labor c in the North. The $1 minimum wage in ef" March 1,1956, will increase hourly rates in Southeast. Although only 4.9 percent of all w en and worsted production workers in the So east received less than $1 per hour in April May 1952, increasing their wages to $1 proba will cause adjustments upward in other w‘ brackets. Only 1/2 to 1 percent of the woolen .- worsted production workers in New England, ceived less than $1. " Despite the resistance to the union movem in Southern States, unionization probably fl make headway in the South and tend to nar area differences. One very important question will be answ ed when the Supreme Court rules on states’ rig to-work laws. Forcing repeal of these laws hasten unionization in southern “right-to-wo- states. Texas Labor Essential labor requirements for process wool and mohair would be the same whether » plants were located in Texas or any other a Primary labor considerations are cost, sup availability and quality. Average earnings of factory workers in v West-South-Central area of the United Sta 1950, hourly earnings averaged $1.29, compa‘ with $1.47 in the Nation. Hourly earnings r 28 percent during 1950-54, or more than dou the national increase; but the $1.65 average i this area in 1954 was still below the Natio $1.81 average per hour.” Texas workers in all manufacturing avera more per hour than the West-South-Central a as a whole. Although Texas wage rates w less than the national average, they were hig than in the New England States, except Conne cut, and considerably above the important sou ern textile states. This higher wage rate for manufacturing in Texas results from the big v ume of high-paying industries, such as petrole refining, chemicals, rubber, transportation equ ment and aircraft. Despite these high-wage » dustries, there are many food, apparel, lum and other low-paying industries. The State'- comparatively unindustrialized; large numbers unskilled workers are available for the compa tively small number of factory jobs since th represent a considerable improvement in inco as compared with farm wages.“ Because the Texas wool-textile industry is, small at presentfcurrent wages probably wo not be representative; however, the State's mu Labor Statistics, U. S. Department of Labor, Dec. '* pages 13-16. ' "‘Ibid., page 15. I otton textile industry should give com- i Wage rates for textiles. In November 1954, p n textile industry had 8,293 production in the Southwest receiving an average “is per hour. The U.» S. average was $1.19 ,;,814 production workers, with 287,526 re- '1 $1.17 in the Southeast, 30,467 receiving the New England States and 2,253 re- - $1.52 per hour in the Middle Atlantic ’. Most of the Southwest’s cotton textile 5 is in Texas. The plants are widely scat- nd are located in some of the larger as well zhe smaller towns. In November 1954, Tex- l n textile workers averaged $1.02 per hour. f? was no material difference in fringe bene- f; s in the ‘Southwest and Southeast. p e financial importance of the wage differ- ‘is best shown by the yearly savings for a ‘ cotton mill. In 1952, the differential was l ts per hour in the Southwest compared ithe Southeast. For a mill producing print that used 10,000,000 pounds of cotton and ed 179.86 man-hours per 1,000 pounds of ', the savings would be $251,800 compared the Southeast. Compared with New Eng- {fth $1.36 average hourly wage, the labor l: would be $593,500.92 exas has an abundant supply of labor. To- pulation was 8,240,000 in July 1954, nearly the second-ranking Southern State (North J a). The 16 Southern States gained 16.5 ‘t in white population during 1940-50, but gained 22.6 percent white and‘ 5.7 percent g-v About 40 percent of the Texas citizens §_on_farms and ranches in 1930. but only 13.7 j t of the population lived on farms in 1954. ‘Ti-number of farms in Texas decreased 11.6 ' nt from 331,567 in ‘1950 to 292,946 in 1954. ‘State’s farm population in April 1954, was ,000, but one-third of the State’s total pop- j lived in rural areasf” opulation and population centers are more ‘ y concentrated in the eastern half of" the Q Fifteen major cities account for about 35 pent of the total, and the population of these _rs is increasing faster than the State gem About 29 percent of the population in 1950 _’ the 14 or younger age group, 32 percent v 15 to 34, 29 percent from 35 to 59 and 10 _*- twas 60 and older. BDuring 1950, 55 percent of the 5,583,178 peo- l Texas who were 14 years old or older were ye total labor force, Table 7. Of the 2,870,605 bree, Joel F., “Cotton Textiles: An Opportunity in ,» ,” Cotton‘. Economic Research, University of Tex- i‘, Austin, Texe, 1954, page 73. y 'ns, W. G., and R. L. Skrabanek, “The Texas Farm ulation, 1954,” Texas Agricultural Experiment Sta- ,Progress Report 1738, Dec. 23, 1954. I bree, Joel F., “Cotton Textiles: An Opportunity in .1 as,” Cotton Economic Research, University of Tex- , Austin, Tex., 1954, page 54. in the force, 74 percent were males. The women's labor force was 748,106, which was only 27 per- cent of the group 14 years and older. The other 73 percent were not gainfully employed. Women make up about two-fifths of the work force in Woolen and worsted-textile manufacture.” Latin Americans contribute a large portion of Texas’ population. In 1955, the number was estimated at 1,500,000 during the height of the migration of legal transient agricultural work- ers.” These workers have a large range of edu- cational and cultural standards and excellent man- ual dexterity. ‘Texas has more commercial-type farms and more part-time and residential-type farms than any leading southeastern textile state. Also, ac- cording to the 1954 Census of Agriculture (pre- liminary), Texas had nearly as many farm oper- ators working off their farms in 1954 as two of the largest southern textile states combined. About 143,000 Texas farm operators worked off their farms in 1954. - Texas’ farm population is declining more rapidly and its population growth rate increasing faster than the U. S. average. It has a larger total population and a greater number of farm operators working off the farm than other South- ern States, while a smaller percentage of Texas’ population is employed in manufacturing than in the leading southern textile states. These condi- tions should put Texas in an advantageous posi- tion from the standpoint of labor supply. Not only is there an excellent supply, but wages are low compared with other textile states. The rapid increase in apparel industries, which also pay low wages, points out the availability of labor in the State. TABLE 7. TEXAS LABOR FORCE, 1950‘ Item Total Male Female Total population 7,711,194 3,863,142 3,848,052 14 years 6t older 5,583,178 2,781,613 2,801,565 Labor iorce 2.972.434 2,222,050 750,384 Civilian 2,870,605 2,122,499 748,106 Employed 2,758,433 2,037,758 720,685 Unemployed 112,162 84,741 27,421 Experienced 110,934 84,077 26,875 New workers 1,228 664 564 Not in labor lorce 2,610,744 559,563 2,051,181 Keeping house 1,653,702 13,866 1,639,836 Unable to work 221,299 135,014 86,285 Inmates of institutions 49,045 32,313 16,732 Others (S not reported 686,698 378,370 308,328 14-19 years old 405,450 200,075 205,375 20-64 years old 210,743 128,073 82,670 65 years 6. older , 70,505 50,222 20,283 ‘Source: Hembree, Ioel F., “Cotton Textiles: An Opportunity in Texas," Cotton Economic Research, Univ. of Texas, 1954, page 60. ”5“Wage Structure—Woolen and Worsted Textiles,” Se- ries 2, No. 90, Bureau of Labor Statistics, U. S. De- partment of Labor, Apr.-May 1952. “Texas Almanac, 1956-57, Dallas Morning News, Dallas, Tex., page 140. 27 Education level is a factor that indicates la- bor trainability. The average educational level in Texas was about equal the U. ‘S. average in 1950, which was 9.3 school years completed by persons 25 years and over. Of this group, 31 per- cent completed at least high school, while 16 per- cent completed less than the fifth grade. In 1950, 94.5 percent of the 7 to 13 age group was enrolled in school, as was 89.1 percent of the 14 and 15, 66.4 percent of the 16 and 17, 27.5 percent of the 18 and 19 and‘ 11.0 percent of the 20 to 24-year- old group. More stringent state laws and rigid enforcement probably have increased attendance in the younger groups since 1950.97 Rapid con- solidation of school districts and the increase in school bus transportation have improved educa- tional opportunities for Texas rural youth. According to a survey by a leading author- ity,” Texas ranks above all the Southern States and above Maine, Vermont and Pennsylvania in education as measured by financial support, teach- er status and results obtained. Opportunities for higher education are ex- cellent in the State. During the 1954-55 school year, 153,118 students were enrolled in accredited senior and junior colleges. There are 51 tax-sup- ported and 83 private institutions in Texas, and 33 of the institutions are widely scattered junior colleges.” The rapid increase in junior colleges in recent years and their location in all areas have helped bring advanced training within reach of more students in the State. Texas has the only textile engineering school west of the Mississippi River—Texas Technolog- ical College at Lubbock. This school has been turning out graduates since 1929. Some are em- ployed in the State, but many are in other textile states. These men would be qualified for a num- ber of engineering and management jobs and no doubt would be favorable to employment in their home state. No survey data are available on the produc- tivity, efficiency and attitude of Texas labor; however, interviews with cotton textile mill exec- utives, hatmakers, garment makers and the State’s wool mill managers indicate that the qual- ity of labor is excellent. They mentioned good attitude, low rate of absenteeism, initiative and lack of interest in unions as special qualities of their workers. Most of those interviewed said that the quality of Texas labor was as good or better than labor in other areas. The favorable attitude of Texas labor is indicated further by the fact that only two textile mills in the State were labor organized in 1954. “Hembree, Joel F., “Cotton Textiles: An Opportunity in Texas,” Cotton Economic Research, University of Tex- as, Austin. Texas., 1954, page 57. “Rummell, Frances, “How Your State Ranks in Educa- tion,” Look, Sept. 1955. “Texas Almanac, 1956-57, Dallas Morning News, Dallas, Tex., page 487. 28 It seems certain that Texas has an advan in labor over ot-her textile areas at the pre time. The advantage in labor supply prob will continue for some time. Some of the difi ential in labor cost will likely be removed by new $1 minimum wage. In November 1954, percent of the cotton textile workers in the So @ west received less than $1 per hour comp with 14.9 percent in the Southeast. The Te Employment Commission reported that cot textile mill wages were raised '6 cents per h after March 1956. Although Texas labor may ceive greater increases, the total labor bill of mills probably will continue to be lower in Te than in the Southeast. Labor cost patterns are higher in wool j tiles than in cotton textiles, and the minim wage should have a smaller effect on wool 5 to 10 percent lower than in the Southeast. number of high-wage industries in the S causes a wide range in wages. These indust tend to raise the overall wage level and in t' could remove any wage advantage Texas have now for wool textiles. H B" CD H . (D . >4 Q7 @ Q3 considering locating in Texas. Y tude toward labor may be stated generally equal rights for all, although the laws regulat labor are more restrictive than in many 0t states. - Important labor laws are summarized as ‘ lowszm“ I _“The use of violence or coercion, or the thr of violence or coercion, 1n a labor dispute is a ony. ’ “The closed shop, the union shop and m tenance of membership provisions in labor c tracts are illegal. “Labor organizations are responsible for da ages resulting from strike or picketing in bre of contract. “Strikes, picketing, obstructing service. public utilities providing electrical energy, gas, water are illegal; sabotage or conspiracy to sa tage such services are felonies. “Mass picketing is illegal. “The check-off is illegal; the employer » make no deduction for labor union dues or ass ments without the written authorization oft employee. ‘°°“The Texas Charter of Equal Rights,” (Leaflet), las Chamber of Commerce, Dallas, Tex., Oct. 1952. i l bor unions are made liable to Texas’ anti- ws, both civil and criminal. ' o public official and no unit of Texas Gov- t-municipal, county, or state—-can recog- labor organization as the bargaining agent i group of public employees; nor can any “jxofficial or unit of government enter into "tive bargaining contract with a union for ‘oup of public employees. condary boycotts, secondary strikes and ,ary picketing are illegal. Every man has a right to earn an honest ' at work of his own choice; no man has the to coerce or intimidate his neighbor to keep ’ om working at the job of his choice. hiLabor organizations must hold annual elec- file reports with the secretary of state and ubject to other regulatory provisions.” i‘, dditional laws regulating labor were passed 55. One, the Parkhouse Bill, prohibits f for union recognition unless the union rep- , s a majority of employees. Another denies ployment compensation to workers idled at sidiary plant by labor disputes at a parent Estimates indicate that total Texas union jbership is around 420,000 of a total 2,754,400 Q1 icultural labor force. The nonagricultural y force rose by 474,800 during 1948-55, with "mions organizing about 10 percent of this in- e391 Texas unions have about 20 percent of , dustrial labor force. Their gains have been result of new industries such as chemicals, ‘ion and automobile plants coming into the Also, many high-wage industries, where - > forms a minor part of total costs, have not unionization. YAFL and CIO representatives say that it is ‘cult to organize in Texas and believe that the antipicketing law will make it impossible to Inize firms with less than 250 employees. r agree that the laws could either ruin the ns or unions can live under them, depending 0w the courts rule?” Unions lost 42.4 percent of the elections held exas by the National Labor Relations Board ' January 1, 1954 to March 1, 1955; and they 44.4 percent of the next 25 elections held.1°3 [Unions do operate and have‘ some strength, union members in Texas represent less than Ipercent of total U. S. union membership. Pick- ‘Iare extrerrlely rare in some areas of the State. inch, Sam, “Labor Plans Mourning Over Picketing ‘i w,” Houston Chronicle, Sept. 3, 1955. 1d. exas Industry, July 1955, page 13. MILLBS. Consumption 60D §§ 4 o \‘- " O "I NET IM 1s 200 PRODUCTION O I9 5 I940 I945 l9 O I9 CALENDAR YEARS, CLEAN IAIIS l Figure l0. Supply and mill consumption oi apparel wool. 1935-55. Source: AMS, USDA. Raw Materials Volumes and Cost The volume of apparel wool consumed in the _United" States is well below the peak war and postwar years, but consumption is still above pre- war years. A smaller portion of domestic require- ments is supplied now by domestic production than before the war, Figure 10. The increase in man-made fiber use is shown in Figure 2. The domestic industry uses virtually all of the domestic wool clip and most of the domestic mohair. In addition to big volumes of apparel and carpet wools, this country imports small vol- umes of mohair, camel's hair, cashmere, alpaca, vicuna and other wool-like fibers. The bulk of the apparel wools used are the finer grades, 60’s and up; but good volumes of 50’s to 60’s also are used. As compared with the average volume of fibers used during 1950-55, an increase in volume during the succeeding period may be expected. Raw materials and supplies, which include parts and containers, cost woolen and worsted manufacturers in all plants 58.8 percent of the value of their products in 1939. The proportion was reduced to 53.1 in 1947, and varied from 17.3 percent for finishing mills to 61.6 percent for scouring and combing plants. Yarn mills paid 59.0 percent, and woolen and worsted fabric mills 51.1 percent?“ During 1939-47, the proportion of material cost to value of products was reduced by 5.7 percent, showing that other costs increased more rapidly than raw materials. Probably the proportionate cost in 1955 was lower than in 1947 because the price of domestic raw wool was rough- ly the same, but other costs were higher. Cost of material to make wool covert and worsted twill in 1950 was $09521 for covert sell- ing at $20513 per yard, and $25915 for twill sell- ing at $48652 per yard. The proportionate costs for the material were 46 and 53 percent, respec- ""Howell, L. D., “Marketing and Manufacturing Services and Margins for Textiles,” Technical Bulletin N0. 1062, Bureau o-f Agricultural Economics, U. S. Department of Agriculture, Sept. 1952, page 130. 29 300 ' ——— rangrennnonv, ounzo snfts, stun usus ---- -» TEXAS, oaucmm. us, rm: racucu comma mo anus, cum aasns ---~- wax 10's AUSTRALIAN u”, m noumctenu nsns ' -n— nus no.2 mow uonnmonus: usns /' N OI O m O O cams PER POUND 6 F- 0 O so 1' 1 | | | l | l n I935 37 39 4| 43 45 47 49 5| 53 55 YEAR Figure ll. Average price per pound for selected wools, 1935-55. Source: “Wool Statistics and Related Data," AMS. USDA Statistical Bulletin No. 142. tively. These figures show the importance to the industry of raw material price. Since costs are pyramided through all manufacturing stages, raw material price is an even greater consideration than these figures indicate. Although there are high and l0W cycles, the longtime trend of raw wool price is upward, Fig- ure 11. This trend is likely to continue; but in comparing locations of wool-textile plants at the present time, the price makes little difference since all wools are priced delivered at Boston. Southeastern plants may be able to save 1 or 2 cents on some domestic wools shipped direct, but they must pay about 2 cents per clean pound more freight than northern mills on wools shipped from Boston. Foreign wools are landed at Charleston, South Carolina, at the same price as at Boston. As scouring and combing plants increase, the Southeast will have no raw material handicap on the bulk of the wool it uses. As long as Boston continues to be the main raw wool market, the Southeast probably will continue to pay a little added freight cost on small volumes of some wools and specialty fibers landed at Boston. Texas Raw Materials Wool. One of the main advantages for Tex- as as a location for wool and mohair-textile plants MILLIONS l 5= _ H’ . 1 ~ o 0 ”""i§5¢" 1940 1960 DATA FOR I956 ARE PRELIMINARY 1555“ “19¢¢ * H VEITERN IYITE.‘ IND S. DIX. Figure 12. Stock sheep and lambs on farms, Ianuary l. selected years. Source: AMS. USDA. 30 is nearness to raw material supplies. The Te wool clip has amounted to 19.4 percent of average domestic clip for 25 years, 1929-53. - tually the only savings in raw materials are transporting wool to the mills. There may additional advantages or disadvantages in tr porting the fabric to market. A mill located Texas could save on transportation of raw r terials produced in the State. The number of sheep in Texas has decli sharply since the high of 1943 and is now 0 about half that year’s record number, Figure Most of the conditions that caused a decline in nation’s sheep population“ also contributed the decline in Texas, but the biggest factor, this ‘State has been the long period of below-av age rainfall. Although production of shorn wool since 1, averages less than 50 million pounds_per y mate that Texas sheep numbers could be incr ed to about 9 million head?“ The goal set Congress under the 1954 wool act (300 mill pounds of shorn grease wool) also indicates a 9 million head for Texas, or about 70 mill pounds of wool per year. This is approxima the same as in 1946 when the Commodity Cr Corporation purchased virtually the entire dom tic clip and made it possible for the U. S. Dep ment of Agriculture to provide the only compl analysis of the domestic wool clip. Grades of . Texas clip should not change markedly, but '1 provement can be expected in pounds of cl wool produced per ewe, staple length, quality p packaging for market. Most Texas wools are marketed in origi bags (not graded). In 1946, 60,523,215 pou were sold as original bag; 7,394,379 pounds w graded; and 809,800 pounds (clean) were sold scoured wool. The clip graded 93.1 percent f' 4.2 percent half blood, 1.2 percent three-eigh blood and 1.5 percent off-wools. The average = timated shrink for all wools was 57.3 perce The relatively high shrink may be explained p ' tially by the large portion of fine wool, which n mally shrinks more than the coarser grades. V iations in rainfall and» range conditions have marked effect on the shrinkage of Texas wo Even though the appraisers classified _o 3,513,240 pounds of the Texas‘ clip as woo length, the woolen trade undoubtedly uses a m greater volume since about 7% million pou were fall shorn. Some of the 8 months’ and e some of the 12 months’ wools are too short comb efficiently. It is significant, however, t 105 ———-———, “Achieving a Sound Domestic W Industry,” a report to the President of the Uni States by the Secretary of Agriculture, U. S. Dep ment of Agriculture, Dec. 1953, page 7. Y ‘°‘“‘Domestic Wool Requirements and Sources of Suppl Production and Marketing Administration and Bu -. of Agricultural Economics, U. S. Department of A culture, June 1950, page 62. TABLE 8. BASIC QUALITIES OF THE TEXAS WOOL CLIP, 1946’ Fine 1/2 blood =/. blood 1/4 blood lhfljfgod i121,“ wgffs. Total '1‘ - e. pound 133.139 133.333 v 33.313 12.100 2.033 1.233 432.413 od French. pound_ 13.130303 312.302 233.413 20.023021 mo. pound 42.343.343 411.330 111.333 11.130 42.331.131 2 und 3.091.413 39.223 323.331 1.201 3.313.240 ~ .1: 31.3 33.3 43.1 43.1 31.2 31.2 31.31 ‘valent 31.332 1.331.304 1.139 1.341 400 1.143.332 "m1 1 ‘ o basis 34.333333 2.324.331 134.433 33.433 2.433 1.233 1.034.124 33.333.143 i total 33.1 4.2 1.2 1 1 1 1.3 100 CC to grade them. o wool (original bag and graded.) I percent shrinkage. ifpounds were purchased as scoured wool. .05 percent. 1 5k of Texas wool is Worsted (combing) u; ables 8 and 9. J- 17 million pounds of the 1946 Texas '1 'p was discounted an average of .8 cent lase pound for defects such as burr, with "f14 million pounds of this amount drawing “.7 cent discount. Over 50 million pounds "Texas wool received no discount. chair. Texas produces about 90 to 95 per- >11 the domestic mohair clip, which is almost ,1 world clip. The State produced 97 per- {f4 the U. S. clip in 1955. Since very little ' is imported, the domestic textile industry ‘ly depends on Texas production. There i U. S. Department of Agriculture bench- .for mohair, but the longtime yearly aver- i". Texas is about 3-million head of Angora ‘A 9. VOLUME AND SHRINK OF TEXAS ORIGINAL BAG WOOLS f Volume. Estimated '- wool 1.000 shrink. pounds percent iimonths‘—64's 3.11.13. l 6 good French 4.036.2 55.9 French. some staple 12.093.4 57.1 e to good French combing 18,327.? 59.0 7 ge French combing 4.495.5 59.8 French combing 720.6 62.0 l, -- g d. interior 151.4 68.1 ed type. 12 months'— y to 60/ 64's 5 good French. 64's edge 60's 929.4 52 5 French and staple 60/ 64's 542.2 54 0 f ge to good French 60/ 64's 226.0 44 2 ' ' ngth 1 9,680.3 56.4 Age length {_ 1 515.2 56 9 _' length 162.4 59 1 - ngth 6.799.3 56.6 I e length ‘ 733.3 59 3 110.0 61 1 length ’ ql“'l'he Domestic Wool Clip." Livestock Branch. Production and Marketing Administration. USDA. lune 1951. i‘ do. not necessarily represent interior wools. They were very small lots made up oi mixtures. and it was not practical goats which produce about 16 million grease pounds of mohair per year. The fiber diameter of mohair, the most im- portant element affecting its price, is much more variable than wool. Wethers produce coarser hair than does; barren does produce coarser hair than does raising kids; older goats produce coar- ser hair than young goats and goats grazing on good pasture produce coarser hair than goats on poor forage. A complete analysis of the domes- tic mohair clip, such as the one on Wool, is not available. 4 The finer grades of mohair are the most val- uable because of their use in expensive fabrics and their limited volume. Mohair shrinkage from the records of a leading Boston firm, averages about 22 percent for 36's and 32's and about 22 percent for 22’s and 18’s.1°7 This explains why mohair in the grease usually outsells wool in the grease, but $1 per grease pound for mohair, shrinking 20 percent is the same price as 50 cents for grease Wool shrinking 60 percent. The average price of No. 2 grown mohair was shown in Figure 11. Kid mohair prices are considerably higher. " Mohair is a specialty fiber with a widely fluctuating demand. Fashion requirements change, and mohair cannot be substituted for other fibers to the same extent that other fibers can be substituted for all or part of the mohair content of fabrics. Mohair, especially the coar- ser grades, must compete with duty-free import- ed wools for some end uses. Since these circum- stances cause prices to fluctuate more freely than the prices for wool, mohair production is thought of as a “boom and bust” industry. Another aspect of price should be pointed out. Pounds of mohair clipped per goat in Texas ‘°"‘Potential Market Outlets for Mohair,” a report to the U. S. Department of Agriculture Industrial Consultants of the Commodity Marketing Corporation, June 1952, page 9. ‘ _ 31 Figure 13. Wool production by counties in Texas 1954 Census of Agriculture. One dot equals 100,000 pounds. Up to 149,000 pounds shown by one dot: 151,000 pounds and over shown by two dots. has increased consistently since 1930. a Some of this increase is the result of improved breeding, but some is the result of selecting for heavier shearing goats. There is a strong tendency for buyers to pay the same price per pound for kid mohair and ad-ult hair in a season regardless of quality. Producers with the heaviest shearing goats receive the most money. These heavier shearing goats usually produce coarser hair.1°8 Figure 14. Shorn mohair production by counties in Tex- as, 1954 Census of Agriculture. One dot equals 50,000 pounds. ‘°"Ibid., page 2. 32 The good prices for mohair during the pas years may be partially the effect of mohair . ports. Exports of mohair averaged less t 100,000 pounds per year until 1953. Over I million pounds were exported in 1954, and du the first 7 months of 1955, exports were 3.3 l lion pounds, clean basis?” Texas started the warehouse system of m keting wool and still leads the Nation in t method. About 95 percent of the State_’s clip sold through some 90 to 100 warehouses loca in the producing areas, Figure 13.11" The wa houses, which are located mainly in the moh producing area, Figure 14, also handle the Sta mohair. A small amount is sold direct by I ranchmen, either through cooperatives or indi ually; however, considerable volumes are c tracted prior to shearing in some years. This especially true with mohair. a Warehouses offer a number of services the growers. They receive, handle, store, ins sell and ship the wool. They act as the produc agent in bargaining with buyers, but gener have the owner’s prior approval before a sale: made. Although charges vary, the average i for these services is about 2 cents per pound. addition to these usual services, some Warehou offer advances or credit on wool, help grade . cull sheep, sell ranch supplies, help sell surp livestock and may even buy wool. The main advantage of the warehouse s tern is that it concentrates the wool for the b ' ers. It would require time and expense to b small lots direct from the producers on the ma ranches. Warehouse officials also are better formed on wool qualities, values and mark than the average grower. Domestic producers often have been cri cized for doing poor packaging of their wool " market. Much research and teaching have b done on the subject. Many leading growers ha gone to extra trouble and expense to do a bet job. When their wools did not bring suffici premium to make it pay, some continued to W at packaging and others stopped. In the :- few years, a great deal more interest has b shown in packaging, and progress is being ma. The wool marketing studylll by Davis and bard in cooperation with the Sonora Wool a Mohair Company showed that fleece-grading w at the shearing pen and marketing these W0 - on a quality basis give good returns to produce Texas producers are probably more interested “Tgxtile Organon, Vol. XXVI, No. 12, Dec. 1955, ~ 2 0. a “Campbell, Fred R., L. P. Gabbard, and Stanley P. Da “Marketing Wool Through Texas Warehouses,” Bu tin 740, Texas Agricultural Experiment Station, I 1951, page 5. ‘ “Davis, Stanley P. and LIP. Gabbard, “Quality P Relationships of Graded and Ungraded Wool,” Prog . Report 1572, Texas Agricultural Experiment Stati 1952. ' ' ‘fr! Q. g than ever before, and their efforts 1 if properly prepared clips are giv- Qces. ‘w- that grading makes less differ- e believe. The 24-year (1930-53) per clean pound of graded fine, ‘w and French combing wool at Bos- 1671 and 351.1137, respectively. The for original bag, Texas fine staple “icombing wools for the same period per clean pound at Boston. This also that graded Texas fine wools are q than graded fine wools of the same vced in other states. p‘ that seems to be spreading rapidly in growers is marketing wool on a This practice helps insure growers e for the better, properly prepared bined with the incentive for better , d through the National Wool Act ' keting on a clean basis should help f preparation of Texas wools. _. Texas Wool and Mohair. Theoreti- fwool could be used in almost any it from high-quality woolen, worsted "is to felts. Practically speaking, how- {use generally is limited to better qual- 9nd women’s suitings, women’s dress gs and other high-quality woolen and rics and knit goods. The high price J» excludes it for many goods. To ;,cost of the fiber, the products must aquality and sell at high prices. Be- high felting qualities, the shorter {WOOlS, noils and tender Texas wools "nd for woven and pressed felts, hat rmakers’ felts_and other felts. the specialty fiber, has a wide va- jes. It is a snow-white, lustrous, t,“ nkle-resistant, resilient fiber that has f clarity of color when dyed, packs weaving, wears extremely well and is ed; but it is scratchy (especially coar- g) unless blended with softer fibers. ities make it a superior fiber for up- all kinds, drapery materials, clothing Its use in upholstery has been ‘seriously by new synthetic fibers, par- _ se of style changes that could revert i! because of its high cost. Its use in been confined mainly to men’s sum- s, uniforms, overcoats and fleece fab- ter wear. Its use in carpets depends a of the coarser grades of mohair com- the imported carpet wools with which ipflllé. l’ stic wools _ exas wool clip is over 93 percent fine g. greater portion of the clip is long Qcomb and goes to the worsted trade, e good volumes of shorter wools that L ited for woolen goods. The general practice in the worsted industry is to blend wools from different sources. The woolen industry also blends shorn wools, pulled wools, noils and other raw materials. For these reasons, it is necessary to consider bringing other raw materials to Texas mills. Many of the Western States prod-uce good volumes of half-blood, three-eighths blood and one-quarter blood apparel wools that are suitable for blending with Texas wools. Even in the other Western States, the bulk of the clip (about 60 percent or 67 million pounds) grades fine; but some 46 million pounds of the coarser grades are produced. These coarser wools shrink less on the average than Texas Wool. The states produc- ing the greatest quantities of half and three- eighths blood wools, which would’ be most needed by Texas mills, include Montana, California, Colo- rado. Wyoming. Idaho and Utah. Idaho also is the largest producer of quarter-blood wool. Some plants in Texas might want to use fleece-type wools. They are produced mainly in the farm-flock states. Other Domestic Raw Materials Other raw materials that may be needed by mills in this State include noils, pulled wool, synr thetic fibers and cotton. Noils are the short fibers combed out of wor- sted wools. They are necessary raw material for woolen manufacture. Since noils are produced in the Northeast and Southeast, they would have to be shipped to Texas mills from those areas un- less a Texas worsted industry produced them in sufficient quantities. Pulled wool is the wool obtained from the pelts of slaughtered sheep. It accounts for ap- proximately one-fifth of the total volume of do- mestic wool. Like noils, pulled wool is a required raw material for woolen manufacture. In addi- tion, a number of the best lengths are used to lower fiber costs in some worsteds. A small wool pullery (the Melton Provision Company) is lo- cated at San Antonio, Texas; and some wool is pulled at Denver, Colorado; however, most of it is pulled at Chicago and other eastern cities and would have to be shipped» into Texas. If lamb markets developed in Texas, wool pulling in this State might increase. Cotton might be required as a raw material, but it would be no problem since this State pro- duces about one-third of the Nation’s supply and a great variety of types and strains. Also, cot- ton is produced over virtually all the State. Synthetic fibers may play an increasing roll in woolen and worsted goods, and the availability of these fibers should be considered. Texas pro- duces considerable volumes of the basic salts from which some of the synthetic fibers are manufac- tured. Since the State has no synthetic fiber plants, however, these fibers would have to be shipped from the Southeast and Northeast. 33 Foreign Wools Availability of foreign wools is another im- portant consideration for Texas as a location for wool textile plants. Australia is the leading wool-producing and exporting nation in the world and the leading sup- plier of U. S. imports. About 70 to 75 percent of the Australian clip is Merino type, and the bulk of U. S. imports are of the 60’s and 64/70’s grades. These grades accounted for 77.9 percent of U. S. imports in 1953-54112 Argentina is our second major supplier of raw wool. Only about 20 percent of her clip is fine grade. The bulk of U. S. imports from this country are coarser, crossbred Wools for use in carpets. Uruguay is the country of next importance in volume of wool sold to the United States. The ' bulk of the clip is crossbred; only about 15 per- cent is Merino. Super-fine crossbred-s, 58/60’s, make up about 45 percent of her clip. New Zealand generally ranks fourth in sup- plying imports to the United States. About 97 to 98 percent of her clip is the crossbred type. South Africa is another country which has supplied us with good volumes of wool. The bulk of her clip is Merino, and 64’s and 64 /70’s are the predominant grades. A The shrinkage of wool sold by the major ex- porting countries is much less than domestic wools with the exception of Argentina. These countries do a better job of packaging their wool and their Merinos are selected almost entirely for wool production. Special trade and barter agreements greatly affect the volumes of wool going to the different countries each year. British Dominion wools are sold at auction. but credit deals or trades influence purchases. The governments of Argentina and Uruguay exercise considerable control over sales of their wool. Although some 13 deepwater ports on the Gulf Coast could be used as ports of entry for for- eign wools, the bulk probably would be handled through the ports of Houston or Galveston. Hous- ton is the second-ranking port in the Nation in tons of cargo handled. According to the Bureau of Customs office)“ foreign Wools have entered these ports and can enter without special consid- erations. The customs service there is suffi- ciently staffed and equipped to handle wool im- ports; although samples must be sent to Boston for determination of clean content, no costs above those at any other port would accrue to import- ers. The customs service also reported there “’—-———-——-, “Dalgety’s Annual Wool Review for Australia and New Zealand, 1954-55,” Dalgety and Co. Limited, 65/68 Leadenhall Street, London, page 54. “Personal correspondence with the Galveston Office. 34 “Bulletin of the Wool Manufacturers, National As were bonded warehouses in the area suitab wool storage. -- Marketing Wool-textile Products i, Volumes Products marketed by the woolen and A sted textile industry include scoured wool, tops, yarns and fabrics. .. Wool that is scoured and soldl represe_ very small fraction of the total business. l shipments and interplant transfers during amounted to only 35,708,000 pounds?“ a Domestic top production in 1947 was 868,000 pounds, of which 159,970,000 pounds for the plants’ own use. The rest was man_ tured for sale. In recent years, top produc sale averaged about 50 percent of the total; A much smaller percentage of the total ~ manufactured is sold as yarn. In 1947, total ume of yarn produced was 591,937,000 p0 and 447,062,000 pounds were for the makers’ use. Of the 166,466,000 pounds sold, 20,72 pounds were yarns spun on the woolen sy 115,014,000 pounds were worsted yarns spu the Bradford system and the other 30,7 pounds were worsted yarns spun on the F, system.“ I Most yarns are produced for weaving fabrics, but about 15 percent is for kni yarns. The total volume of knitting yarns duced in 1947 was 87,340,000 pounds. A over 11 million pounds of the total knitting A sold went to the hand-knitting trade?" , knitting industry generally prefers to buy rather than make its own. Some woolen and worsted» fabrics are so mills that do only finishing, but this is af small portion of the total business. In 1947 finishing plants paid less than 5 million d for materials, containers and supplies, com with almost 700 million dollars paid by wit and worsted fabric manufacturers?“ The big business for woolen and wo manufacture is the production and sale of fi ed fabrics. In 1947, the industry produced » 503,000 pounds of broadwoven fabrics. This 814,753,000 square yards and 515,843,000 1' yards. Apparel fabrics made up 372,26 pounds, nonapparel fabrics 92.240,000 pounds woven (papermakers) felts 7.061,000 poun The proportion of woolen and worsted ap fabrics varies with style trends. t1on of Wool Manufacturers, 1954, pages 2-98. “EIbid. “°Ibid., pages 2-114. ‘"Ibid. “”“Census of Manufacturers 1947,” M C 22B, Woole Worsted Manufacturers,‘ Bureau of Census, U. S. partment of Commerce, 1949, page 4. “Bulletin of the Wool Manufacturers, National As tion of Wool Manufacturers, 1954, pages 2-138. _~ wools are sold to other plants Ev dealers or direct. Wool tops may c- t t0 other mills or through dealers, ‘ . of the tops offered for sale are han- makers. Most of these companies have y: “machinery; instead they buy raw combed, thenmarket tops to worsted ealers. There are no data on market- or these concerns. also may be sold direct to knit or fab- Qthrough trade journal advertisements. be made indirectly through agents. Fthere are no marketing cost data on .- cost of marketing through selling pared with value is probably similar ijgeneral rule, woolen and worsted fab- 1"» and then made since styling begins lection of fibers and continues through weaving and finishing stages. Cotton, er hand, is styled mainly in the finish- which means that cotton fabrics gen- made and then sold. p. result of selling woolen and worsted fab- _e making them, cancellation of orders been a severe marketing problem in the Hand-to-mouth buying and deferred lace additional burdens on the manufac- g1 e 1954 weekly average by 75 firms of flcellations, production and billings for ths containing 25 percent or more wool orders for 2,820,000 linear yards were i, 196,000 yards were canceled; 2,353,000 Tghed; and» 2,375,000 linear yards were g‘ This means that of the volume ordered f"; _of 7 percent was canceled each week ,'_ Woolen and worsted fabrics are sold by s or jobbers, but the bulk is handled f: agents for a commission. The selling ‘ay operate independently, or the mill may , or they may own the mill. They 0c.- _;sell goods produced by several differ- f, but do not handle similar fabrics from in one firm. ‘l; Costs 5i» g expense varies according to type and _ _the fabric. The average expense for abrics in 1946 was: $0.024 for mens k ted» shirting and suiting costing $2.514 f ; $0.084 for mens wear woolen coating 1.98; $0.117 for womens worsted dress i» suiting costing $1.914; and $0.070 for gkwoolen dress goods and suiting costing ‘r yard)“ The average selling expense, g 'ed from about 1 to 6 percent for these ges 2-144. . ; L. D., “Marketing and Manufacturing Services _ gins for Textiles,” Technical Bulletin No. 1062, _ of Agricultural Economics, U. S. Department I culture, Sept. 1952, pages 133 and 134. goods in 1946. Selling expense in 1950 was about 7 percent for woolen covert and 6 percent for worsted twill. The actual cost of selling fabrics from a mill in the Southeast and a mill in the New England States should be the same because selling agents handle goods produced in both areas, but the cost of transporting the goods to market at New York may differ. The main market for fabrics is not the in- dividual but the fabricator. In the case of ap- parel goods, it is the garment maker. This mar- ket is highly concentrated in the Middle Atlantic States since garment makers in other areas use mostly cotton fabrics. New York is the garment-making center, and the bulk of the goods must be delivered there. Thus, southeastern mills have a competitive dis- advantage in transportation charges. Shipping by truck costs 90 cents per 100 pounds less from Boston to New York than from Charlotte, North Carolina, to New York.122 This is not a very big handicap. It amounts to only 1/10 of 1 percent of the product’s value for fabrics weighing V; pound» per yard and valued at $4.51 per yard. The handicap becomes greater as a fabric decreases in value or increases in weight. The market for knitting yarns also is high- ly concentrated. In 1947, there were 1,201 knit outerwear establishments in the Nation. Of these, 982 were in the Middle Atlantic ‘States with 786 in New York alone. Marketing from Texas Plants . Transportation to the main markets in the East would be costlier for woolen and worsted mills in Texas than for mills in Southeastern or Middle Atlantic States, but other marketing costs would be the same. Established selling agents could handle Texas mill products and serve as all- important stylists in advising on fabrics to make. A Texas mill producing competitively styled and priced goods could sell at any market. Styling in fabrics is important. The fabric manufacturers and garment designers are working constantly to create new styles, but volume sales are reported in only 15 to 25 percent of new designs in wo- men’s goods.123 Knitting firms and fabric-using firms, like many other U. S. industries, are undergoing some decentralization. The movement has been more rapid in recent years and probably results from a number of conditions. The rising cost of labor in the traditional garment-making areas and the increase in style centers, marketing shows, pop- mMorris, James A., “Woolen and Worsted Manufacturing in the Southern Piedmont,” University of South Caro- lina Press, Columbia, S. C., 1952, page 145. "aHowell, L. D., “Marketing and Manufacturing Services and Margins for Textiles,” Technical Bulletin No. 1062, Bureau of Agricultural Economics», U. S. Department of Agriculture, Sept. 1952, page 222. ' * 35 ulation and incomes in other areas are among the conditions causing decentralization. The garment-making industry is growing rapidly in Texas. Apparel products employed 22,008 workers in 1947, but the number in 1953 was 29,439. Beginning as a work-clothing indus- try, it has expanded into a large style-goods in- dustry that produces Women’s dresses, suits and coats, sportswear and other styled goods?“ Texas garment makers produced 10 percent of the Nation’s dress and sports trousers in 1953. The Haggar Slack Company, with plants in Dal- las and in four towns in other areas, is considered the largest mens dress-slack firm in the business. Large volumes of mens goods are cut in Missis- sippi, Tennessee, Missouri and on the Pacific Coast. The womens goods fabricators are decentral- izing too. The president of the Wool Bureau . said in 1951 that the Pacific Coast was the sec- ond largest producer of womens suits and coats?” The Los Angeles, San Francisco and Hollywood areas are becoming important style centers, and Texas’ famous Neiman-Marcus takes a back seat for none. Decentralization is likely to continue. Another trend that deserves consideration is the increased home-sewing market. Prior to World War II, most piece goods were sold through department stores, but business is sufficient now to support fabric shops even in small towns. A number of conditions that probably have influ- enced this trend include scarcity of clothing dur- ing the war; improved sewing machines, equip- ment, techniques and patterns; school and club training for women and girls; new consumer goods, such as new homes, cars and television sets, which reduce the clothing budget; and labor- saving devices that give the housewife more time to sew. Some 38 million women who sew spent 468 million dollars for 704 million yards of piece goods in 1953. The number of sewing machines sold in 1953 was estimated at 1.5 to 1.8 million?“ The home-sewing business is likely to grow. Transportation Facilities Other conditions probably equalize any dif- ference in transportation facilities between the New England States and the Southeast. New England may have more facilities, but the South- east has fewer interruptions by bad weather. Services are adequate in both areas. "Texas Almanac, 1956-57, Dallas Morning News, Dallas, Tex., page 365. _ mAckerman, F. E., “The West as a Wool Textile Center,” The National Wool Grower, Feb. 1951. "““The Development of the Home Sewing Market and a Look at Its Future,” Simplicity Pattern Co., Inc., 200 Madison Ave., N. Y., Jan. 11, 1955. 36 Texas is the highest ranking state in l miles of railroad; but because of the State’s this mileage does not give rail coverage as plete as that in‘ other regions. A number of .- Texas towns have no rail facilities. The i important railroad centers include Houston, Antonio, Waco, Fort Worth, Dallas, Paris, '1 water, Lubbock, Amarillo and El Paso. ‘ Highway systems and trucking facilitie probably of greater importance to mills in than railroads. This State hajs one of the f highway systems in the Nation, and since has led the Nation in new construction each i Practically every town is served with exc paved roads. Some 2,761 motor trucking a panies operate in the State. Texas has 13 deepwater ports. Houston leading port city, is served by 6 railway sys and some 17 or 18 divergent lines owned by 6 companies. About 50 freight trains opera and out of this city daily. Also, about 34 mon carrier truck lines serve Houston. Deli of imported wools to any part of the State ~ not be a problem. If mills in Texas were branch concer ’ firms in the Northeast or Southeast, airline 5 ice might be a consideration. In air trans tion. too, the State excels. Eleven major: lines operate in Texas with service to most o larger towns. There are very few days d the year when weather prevents airline i. tion.127 Cost on Raw Materials f The amount that a plant in Texas could on transportation costs for Texas wools depend on its location. San Angelo is the la concentration point for Texas wools and is the center of production. The all-rail, ca rates from San Angelo to Boston for wool, in. grease, in bags are $2.74 per 100 pounds (2 pounds), $2.52 (30,000 pounds) and $2.39 (40 pounds). The rate to Charleston, South Caro is $2.31 per hundredweight for 24,000-p minimum carloads.1‘~’8 i Scoured wool in bales from San Angel Boston is $3.92 per hundredweight (24 pounds) and to Charleston, South Carolina, f» (24,000 pounds). ‘i Based on these costs, a plant located in T could save 2 to 3 cents per grease pound on -. WOOl and mohair compared with a mill in Northeast or Southeast that transports these materials by rail. This would amount to 4 i cents per clean pound. Some Texas wools scoured in Texas and shipped by truck to Bo mHembree, Joel F., “Cotton Textiles: An Opportuni Texas,” Cotton Economic Research, University of as, Austin, Tex., 1954, page 30. mLetter from Traffic Department, Panhandle and ‘ Fe Railway Co., Amarillo,‘ Tex., July 18, 1955. TABLE l0. SELECTED RAIL CARLOAD FREIGHT COSTS ON GREASE WOOL IN BAGS To To To _ _- - — -- — — — -— Do1larsper100pounds — — — — — — -— —— — Boston, Mass. 2.52 (30,000) Charleston, S.C. $12.31 (24,000) San Angelo, Tex. . . . Boston, Mass. 2 41 (40,000) Charleston. S.C. 2.38 (40,000) San Angelo, Tex. $4.49 (24,000) . . Boston, Mass. 271 (30,000) Charleston, S.C. 2.71 (30,000) San Angelo, Tex. 2.87 (24,000) I Boston, Mass. 233 (30,000) Charleston. S.C. 2.89 (24,000) San Angelo, Tex. 2.01 (24,000) v- Boston, Mass. 2.14 (40,000) Charleston, S.C. 2.47 (40,000) San Angelo, Tex. 1.62 (24,000) '1 Dalr. Boston, Mass. 2 01 (40,000) Charleston, S.C. 2.81 (24,000) San Angelo, Tex. v2.09 (24,000) i» , Utah Boston, Mass. 267 (30,000) Charleston, S.C. 2.17 (30,000) _ San Angelo, Tex. 2.87 (24,000) YCaIit. Boston, Mass. 6.21 (24 000) Charleston, S.C. 6.08 (30,000) San Angelo, Tex. 4.20 (24,000) Mex. Boston, Mass. 2.56 (30,000) Charleston, S.C. 2.50 (24,000) San Angelo, Tex. 0.98 (24,000) Rail: Scoured wool in bales, tops and noils, carload Tex. Boston, Mass. 3.92 (34,000) Charleston, S.C. 2.94 (24,000) San Angelo, Tex. . . . . . . . . . . .. Tex. Boston, Mass. 4.76 (10,000) Charleston, S.C. 3.57 (10,000) San Angelo, Tex. . . . . . .. » Boston, Mass. . . . . . . . . . . .. Charleston, S.C. 2.38 (24,000) San Angelo, Tex. 3 92 (24,000) Boston, Mass. . . . . . . . . . . .. Charleston, S.C. 2.89 ( 10,000) San Angelo, Tex. 4.76 (10,000) l3 and t0 Charleston for 2 cents per mpared with a southeastern mill that i; scoured Texas W001 by truck, a Texas save about 2 cents per clean pound. ;- as mill also could save on transporta- omestic raw wools from some other ' e normally economical routes to Boston fiin the Western States, according to the g ints on freight rates, are: Texas, New fd most Arizona wool through the Gulf EI-Iouston and Galveston, Texas; Utah, Ind Wyoming wool through Chicago, Ill- iMilwaukee, Wisconsin; the bulk of Mon- jthrough Duluth, Minnesota; Washing- '4 and some Montana and Idaho wool ,_;Portland, Oregon; Nevada and some l" California wool through San Francisco, q y; and some California and Arizona wool s Angeles, California!” Some select- costs are shown in Table 10. These ‘dicate that plants in Texas could save in . g wool from some of the other states, Ifwould have a slight disadvantage in ob- ool from the northeastern part of the ucing area. " {State would be at a disadvantage in ob- ece-type wools from some areas, but ve a slight advantage in obtaining these jf other areas, especially if they were truck. ht costs on domestic noils would be j Texas plants. The all-rail carload rate ngelo from Boston for wool noils and ool in bales is $3.92 (24,000 pounds) unds. From Boston to Charleston, the .381 (24,000 pounds)!” Thus, a plant agelo would have to pay $1.54 more per to get noils from Boston than would t Charleston. i ; in.,the State would have a small freight '1 on?) Denver pulled wools, but would .Walter L., “Sales Method Problems of Wool tives,” Service Report No. 6, Farmers Coopera- "_'ce, USDA, June 1954. ‘ m Traffic Department, Panhandle and Sante Co., Amarillo, Tex., July 18, 1955. have slightly higher costs on pulled wools from Chicago. Transportation costs on cotton would be about equal for woolen mills in Texas and the Southeast since both areas produce good quanti- ties. ' Most of the synthetic fibers are manufac- tured in the Southeast. Some of these fibers are priced delivered anywhere east of the Mississippi River. Texas plants would have a competitive disadvantage equal to the freight charge from the Mississippi River crossing to the mill?“ Other fibers are priced at the plant, and the cus- tomer pays the freight. For example, the truck- load rate for nylon from Du Pont’s Seaford, Dela- ware, plant (equalized at Enka, North Carolina) is $1.71 to Houston, $1.02 to Boston and 80 cents to Charleston. For orlon from Lugoff, South Carolina, the costs are $1.78 to Houston, $1.57 to Boston and 60 cents to Charleston. For dacron from Graingers, North Carolina, the costs are $1.93 to Houston, $1.33 to Boston and 86 cents to Charleston. Cost of landing imported wools at Texas ports is important. About 93 separate steamship lines operate in and out of Houston?” Imported wools can be landed at Houston at exactly the same cost as at Boston and Charleston, although there may be a few minor exceptions. Freight costs from major foreign ports are: 1. From Buenos Aires, Argentina, and Mon- tevideo, Uruguay, to Atlantic and Gulf ports: (a) wool in the grease, in bales (measuring not more than 50 cubic feet per ton) contract rate--21/2 cents per pound; (b) scoured wool in bales (meas- uring not more than 120 cubic feet per 2,240 pounds) contract rate—3 cents per pound; (c) wool noils—$66 per 2,240 pounds; (d) wool tops —$81.51 per 2,240 pounds. 2. From Cape Town, South Africa, to Gulf ports the raw wool rate is $73.25 per 2,240 pounds. "’_‘Letters from leading synthetic fiber manufacturers. ‘“,“Houston,” Industry Data Booklet for 1954, Houston Chamber of Commerce, Houston, Tex. 37 This rate was quoted by a firm that does not serve Boston and Charleston. A firm that serves At- lantic ports, but has no service to Houston, quotes shipping rates to Boston and Charleston of $66.50 per 2,240 pounds on grease wools; $89.00 per 2,240 pounds on noils and scoured wools; and $111.50 per 2,240 pounds on tops. 3. The rate from Australia to Boston, Charleston or Houston is $4.651 per 100 pounds on baled grease wool. A firm that serves only the West Coast quoted $4.651 per 100 pounds on grease wool in bales in any quantity from Aus- tralia to San Angelo, Texas; and $4.89 per 100 pounds on New Zealand wools in less than car- load lots, or $3.79 per 100 pounds in carload lots (minimum weight 40,000 pounds). The mini- mum bill of lading charge is $11.50. The costs include trans-shipment by rail to San Angelo and probably would be the same for any point in Tex- ' 3S. Some of these rates on imported wools in- clude free transportation on the lowest carload basis from the port of discharge to inland points. The free transportation probably extends only to the Mississippi River; so costs on free inland shipments in Texas could not exceed the cost of shipping wool from other ports of discharge to the Missssippi. This would appear to offer no competitive disadvantage to Texas. In general, obtaining foreign wools involves neither an advantage nor disadvantage for Texas as a location for wool-processing plants. Trans- porting foreign wools to domestic mills is cheaper than transporting domestic wool from many of the Western States. Mills in Texas might want to obtain import- ed wool or specialty fiber from Boston whenever they need small, unforeseen quantities quickly. The rate on grease wool in bales from Boston to "San Angelo is $3.08 per 100 pounds (24,000 min- imum carload pounds) and to Charleston the rate is $1.87 (24,000 pounds). The rate on scoured wool in bales is $3.92 per 100 pounds (24,000 pounds) from Boston to San Angelo and $2.38 (24,000 pounds) to Charleston. Texas Would have 1 to 1%; cents per pound disadvantage on wool shipped in the grease from Boston and about 11/2 cenlts per clean pound disadvantage on scour- ed WOO . Since U. S.-mills use chiefly domestic wools, transportation costs on U. S. wools are the most significant. These costs indicate that mills in Texas can save on transportation for most do- mestic wools. The savings would be 4 to 6 cents per clean pound on Texas wool shipped in the grease and about 2 cents per grease pound on mohair. Other domestic wools needed for blend- ing can be shipped from most states either at a small saving or at costs equal to those for mills in the Northeast and Southeast. To take ad- vantage of the savings, however, Texas mills would have to buy the wool in the West. Since 38 the bulk of the clip is sold by growers and t to Boston during some years, a Texas mill ' have to purchase virtually its whole year’s‘ ply during the few months that wool is ava’ in the producing area. This would requ’ large operating capital. If the wool mov Boston and had to be shipped back, it woul about 3 cents per grease pound to the co these wools for a Texas plant, compared New England, or about 1% -ce)1ts compared the Southeast. ' . Costs to Market Transportation costs are a small part 0 total cost of wool textiles. Past differenti freight rates have largely been equalized. . New England area, because of its location, { slight advantage in freight costs to mark the present time. The cost of shipping finished fabrics fr mill in New England, the Southeast and ‘ to selected markets is shown in Table 11. York is the largest market for finished w and worsted fabrics. To New York, Texas 1f would have 2 to 3 cents per pound of product‘ ed freight on fabric compared with New En mills and 1 to 2 cents compared with the east. This is not a significant differenti cause of the high value of the product. The fabricators of textile mill product decentralizing and the industry is growing i South and West. Mills in Texas have a fr advantage to most areas west of the Missi River compared with the Southeast. To Los geles, the advantage is roughly 2 cents per p Almost a third of the U. S. population liv Texas’ primary market area, and population incomes in the area are increasing faster. the U. S. average. Texas’ geographical l0 .- should become increasingly advantageous as w, trends continue. TABLE 11. SELECTED FREIGHT RATES ON FINISHED I IN ROLLS IN LESS THAN CARLOAD LOTS, DOLLA 100 POUNDS‘ I From T From Chicopee Sp ° Dallas, Tex. Falls. Mass Rail Truck ' Rail Chicago, I11. $2.05 $1.78 $1.81 Minneapolis, Minn. 2.44 , 2.61 2.92 Cincinnati, Ohio 2.05 1.87 1.75 Louisville, Ky. 2.05 1.89 1.86 Memphis, Tenn. 1.55 1.54 2.76 New Orleans, La. 1.61 1.58 2.98 Des Moines, Iowa 2.13 2.28 2.83 St. Louis. Mo. , 1.73 1.52 2.06 New York, N. Y. 3.46 3.21 0.98 Philadelphia, Pa. 3.38 3.12 1.14 Los Angeles, Calif. 2.96 2.96 5.72 Seattle, Wash. 4.46 4.29 5.72 ‘Source: Hembree, Ioel F., “Cotton Textiles: An Oppo ~ in Texas," Cotton Economic Research, Univ. of Texas,‘ pages 31-36. Correspondence with a number of curri mills producing woolen and worsted i-should be able to market half their prod- L-the Texas primary market area. This gely offset the disadvantage in market- j other half in the New York area. Water y wool textile industry needs huge quan- if water. It is used in scouring the grease backwashing during. processing and in dye- f?» finishing. The volume of water required “(with the mill and its products, but average are 1 to 3 gallons of water per grease gar wool for scouring and 50 to 70 gallons pf“ r per pound of clean wool in the other op- ‘, '13s o quality of the water must be good. Ex- }! eign matter, silt and minerals must be re- Y" before the water is suitable for any stage 1 ssing. Foreign matter and silt may dis- ‘the fibers; and minerals, such as calcium y» gnesium carbonates and bicarbonates, ,oluble compounds with soap that cause ‘ ties all through processing, but are most gonal in dyeing. Water that contains more '51 parts per million total hardness must be F» before it is used!“ Zero hardness is f: is preferred for use with chrome dyes. "n in the water is especially harmful to [wool colors. The iron must be removed ater containing more than 1 part per mil- _,= iron.135 Once the foreign matter is re- i? ,water can be treated satisfactorily with e and ion exchangers, such as zeolites?“ ater is not a major cost item. Even if it cents per 1,000 gallons, the cost would be , 8 to $20 per 1,000 pounds of product man- ‘red, which is about 2 cents per pound, or ‘an 1 cent per yard for fabrics weighing 8 ,j': to the yard. _ dequate supplies of water of comparable seem to be available both in the New Eng- p d Southeastern States, but local shortages existed in both areas. The advantage, if jrobably rests with New England. 1;‘ is fast becoming the number one prob- the Nation?“ With rising populations, living levels, increased industrialization and irrigation, water usage also is rising rapidly. 1:- V. J., “Water Quality Essential to Textile Pro- s,” Textile World, Vol. 98, No. 7, July 1948, page “ and personal interviews with mill managers. l" Bergen, Werner, and Herbert R. Mauersberger, rican Wool Handbook,” Second Edition, Textile " Publishers, Inc., New York, 1948, pages 406, 728. ‘i ewis, aJ. Merritt, “Bleaching and Related Pro- "'B,"’The Chemical Catalog Co., Inc., One Madison j_ ,New York, 1921, page 49. , Bergen, Werner, and Herbert R. Mauersberger, lerican Wool Handbook,” Textile Book Publishers, T‘ New York, 1948, page 407. Running Short of Water,” U. S. News and World ‘1- ,July 8, 1954. i A closely. related problem is water for waste dis- posal. The supply for this purpose is seriously low in some of the highly populated and indus- trialized areas. Water may be a possible limitation to large- scale wool and mohair processing in Texas. The water supplies of some towns and areas are in- adequate for current needs, but Texas is a big state with widely varying rainfall, water supplies and potentials. State and community govern- ments and people over the State recognize the problem. The 1955 Texas Legislature passed 69 bills relating to water. In the early part of 1955, about 511 lakes and reservoirs in Texas had a capacity of over 100 acre-feet. Total capacity of these lakes was 35,841,065 acre-feet. The State Board of Water Engineers estimates that the State receives 362 million acre-feet per year in rainfall of which about 53 million acre-feet run off into other states or into the Gulf of Mexico. Although Texas has huge underground sup- plies, they are being depleted by greatly increased use, especially irrigation, during the current long period of less-than-average rainfall in much of the State. The total consumption of water. in the State in 1953 for other than irrigation was 4,322,- 896 acre-feet; another 4% to 6 million acre-feet were used for irrigation.138 About 85 percent of Texas runoff water reaches the Gulf. Space is reserved in certain Texas lakes for flood control, fish and recreation, while other space is prorated for municipal and domestic, in- dustrial and irrigation uses. By Legislative enactment, the order of water priority in Texas is: domestic and municipal use, industrial uses, irrigation, mining, hydroelectric power, navigation and recreation and pleasure. Legislative rulings may not control the water supply fully, however, because of riparian rights, prior appropriation rights and the ability to payuao New dams are being built and planned each year. Many are federally financed in part, and towns and cities are interested in doing a greater part themselves. Some cities and towns have plant capacities and water far exceeding their needs; industries are coming into the State with higher water re- quirements than wool textiles. Projects already approved by Congress will add 12 million more feet of storage. One lake slated to begin in 1957 (McGee Bend) will hold over 4 million acre-feet of water—something like 1% trillion gallons. No data are available on water costs in other areas of the United States, but even a wide dif- “Texas Almanac, 1956-57, Dallas Morning News, Dallas, Tex., page 201. ' emCaldwell, Phillip E., “River Development in Texas,” Monthly Business Review, Federal Reserve Bank of Dallas, Dallas, Tex., June 1, 1954. 39 ferential would have little overall effect on com- parative manufacturing costs. To produce 5 million pounds of wool textiles a plant would require approximately 350 million gallons of water, or about 25 to 30 million gallons per month. In one of Texas’ largest industrial cities, this amount of water would cost 9 cents per 1,000 gallons inside the city and 14 cents out- side the city limits. In another of the State's industrial cities, the cost would be 12 cents per 1,000 gallons inside the city and 11,4 times this amount outside the city. The quality of Texas water ranges from good to very poor. Some water would be satisfactory without softening. Although softening would be necessary in other areas, it would add little to to- tal processing cost. With zeolite, 1,000 gallons of water containing 10 grains per gallon would _ require about 5 pounds of rock salt for regenera- tion?4° The cost of salt varies with'the location; but even at $1 per 100 pounds, softening would cost only 5 cents per 1,000 gallons, plus a little extra labor. The initial cost of the water-soften- ing plant would not be a large investment. A plant that can handle 100,000 gallons per day costs about $5,000?“ A new water purification process developed by the Texas A&M College System may help re- duce Texas water cost. This plant for settling out foreign matter uses exhaust gases, and one untrained operator can run it. It can save cities 70 to 80 thousand dollars on labor costs alone. Power and Fuel Costs in the North and South Power and fuel are two of the more expen- sive requirements of the industry. In 1939, fuel cost all plants 1.3 percent of the value of the prod- ucts, and purchased electric energy cost .6 per- cent. In 1947, the ratios were 1.0 and .5 per- cent?“ The combined cost of fuel and power in 1947 was 1.25 percent of the value of products shipped by scouring and combing plants, 1.34 for yarn mills, 1.52 for woolen and worsted fabric mills and» 6.48 percent for finishing plants?“ The cost of power and fuel for all plants in 1947 was 3.2 percent of the gross margins. In other words, about 3.2 percent of all costs plus profit was paid for purchased electricity and fuel. The major fuels consumed in woolen and wor- sted textiles are bituminous coal, fuel oil and natural gas; but small volumes of anthracite coal “Personal letter from Elgin Refinite, Elgin, Ill., June 21, 1955. ‘“Personal interview. “Howell, L. D., “Marketing and Manufacturing Services and Margins for Textiles,” Technical Bulletin No. 1062, Bureau of Agricultural Economics, U. S. Department of Agriculture, Sept. 1952, page 130. “Morris, James A., “Woolen and Worsted Manufacturing in the Southern Piedmont,” University of South Caro- lina Press, Columbia, S. C., 1952, page 135. 40 and manufactured gas are used. Plants i Piedmont area s-of the Southeast use coal a exclusively, while more fuel oil than coal is in the New England States?“ Each plant the cheapest fuel possible, and the price isd mined largely by transportation. Natural which is cheaper, will be used more extens when new trunk lines make. it available?“ . Fuel costs are lower in the Southeast, in the New England Statesrriqainly becaus price is lower and partially because less f required. " One wool-plant official whose firm has p, in both regions believed that a 100-loom pla the Piedmont area would save $50,000 per by using coal?“ The new, one-story building easier to heat than older, multi-story build and less heat is required in the South becau a milder climate. A Boston Federal Reserve Bank survey s that fuel disadvantage alone explained about, thirds of the difference in power costs be i New England and the South?“ The purc power cost to textiles in New England in was 48 percent above the U. S. average, b" many individual cases the difference was as. as 100 percent?“ Labor caused part of the”? ference in costs. According to the Federal P Commission, 31 employees are required to ‘f erate 100 million kilowatt-hours in New En generated power and water power. In ‘. Carolina, 80 percent of the power is hydr tric, which costs_ about 13 cents per kilo hour to generate. Only 25 percent is hydr’, tric in New England, where it costs 68 cent ’ kilowatt-hour to generate power with stea i. In 1947, woolen and worsted plants in sachusetts paid $1.41 per kilowatt-hour, Rhod land $1.66, North Carolina 93 cents, South 0 lina 82 cents and Georgia 77 cents. Where o costs are high and a plant uses conside, amounts of steam in processing, the plant generate its own electricity. In 1947, Mass setts mills generated 50.4 percent of their n needs, Virginia 20.5 percent and North Ca 1 37.6 percent, but South Carolina and Ge mills generated none. - Costs in Texas Although costs of power and fuel vary a states, comparisons can be misleading sincet ‘“Ibid., page 136. “5Ibid., pages 136 and 138. “American Wool Handbook,” Second Edition, T Book Publishers, Inc., New York, 1948, pages l: 728. ‘““Report on the New England Textile Industry,” - mittee appointed by the‘ Conference of New En Governors, 1952, page 259. ‘ “"‘Ibid., page 258. “’°Ibid., page 260. to be high and low-cost cities in every _ ‘en so, Texas seems to have an advan- fwer and fuel costs over New England; cities in Texas may have an advantage cities in the Southeast. _ equate and dependable supply of elec- es all counties in Texas. Most of this "generated by steam, but several hydro- ants also operate in the State. _, icity is more expensive» in some Texas A in some southeastern cities, but it is _ others. Houston, Galveston, San An- Dallas, for example, have lower indus- than any of the southeastern cities lis- ‘5- Federal Power Commission Report ex- those in Tennessee, and most of the new _ s have gone into states other than Ten- i ble 12. "s is the source of much of the natural “d to other states. On December 31, “as had over half of the recoverable serves of the Nation’s natural gas and . of the estimated recoverable reserves 1011.15“ The average wellhead price of as in Texas in 1953 was 6.2 cents per j bic feet!“ Crude oil and natural gas s a cheaper fuel than any other state. TYPICAL NET MONTHLY ELECTRIC BILLS FOR I SERVICE IN CITIES OF 50.000 OR MORE POPULATION, IANUARY 1. 1955‘ 500 kw.-hr. demand 1.000 kw.-hr. demand 100.000 200.000 200.000 400.000 a kw.-hr. kw.-hr. kw.-hr. kw.-hr. w ‘r0100 02.100 $0.000 $0.041 $5.700 ' 00 1.705 0.507 0.450 4.001 _ i0 1.042 0.020 0.010 5.077 w‘ d , 2.011 0.112 0.520 0.000 1.040 2.000 2.400 0.000 1.404 2.202 2.004 4.414 1.040 2.000 2.400 0.000 1.504 2.241 2.024 4.100 1.000 2.000 0.200 4.502 1.524 2.204 2.020 4.020 1.070 2.510 0.050 5.000 1.550 2.000 0.055 4.015 1.524 1.075 2.070 0.501 1.251 1.000 2.502 0.402 ,_ 1- '0 1.200 1.700 2.200 0.440 ‘ - 1.050 1.000 2.502 0.402 A: ical Electric Bills 1955. Cities oi 50.000 population II-pc 11-50. Federal Power Commission. jacts-A Statistical Record of the Gas Utility in 1953,” American Gas Association, 420 Lex- ‘_Ave., New York 17, N. Y., pages 3 and 20. - ge 31. A plant in Texas might save 50 percent of fuel costs over the Nation’s average. Texas nat- ural gas varies from 1,000 to 1,100 British ther- mal units average heat value per cubic foot. Coal ranges from 12,000 to 15,000 B.T.U.’s per pound. Therefore, about 13 cubic feet of natural gas would be required to supply the same heat as a pound of coal. According to the rates of a lead- ing gas company, a plant using 10 million cubic feet per month for 10 months and 15 million for 2 months would have a $23,190 fuel bill, Table 13. The plant using coal would! have a $50,000 heat- ing bill if its coal cost $10 per ton. Little or no labor is involved in burning natural gas; coal burning requires some labor. If a plant found all the requirements it need- ed at a Texas location except cheap power, it might be feasible for the plant to generate its own power. For fuel, gas could be purchased at 15 to 16 cents per thousand cubic foot (1 million B.T.U.’s). This would be especially true if the plant had heavy requirements for both fuel and power. A greater part of the textile and apparel in- dustry is using gas as it becomes available or as the plants can be changed to gas. In 1950, these industries used 31.2 million therms of gas, 54.9w million therms in 1951, 106.4 million therms in 1952 and 129.8 million therms in 1953.152 Normally there should be no shortages of natural gas or petroleum. According to the Bu- reau of Mines, petroleum reserves and produc- tive capacity are adequate to meet demands for many years to come?“ Texas also has coal. On January 1, 1953, the State had 30.9 billion short tons of estimated re- serves of coal and lignitefi“ Taxes In New England and the South Taxes are an important cost to the woolen- and worsted industry, although they probably re- TABLE l3. SCHEDULE OF INDUSTRIAL RATES—4-C FOR LONE STAR GAS COMPANY‘ Item ' Rate per 1.000 cubic feet per month First 1.000 MCF or less per mo.— $225.00 Next 4.000 MCF per mo.—20.00¢ gross. 18¢ net per MCF Next 5.000 MCF per mo.—l 8.89¢ gross. 17¢ net per MCF Next 10.000 MCF per mo.—18.33¢ gross. 161/g¢ net per MCF Next 15.000 MCF per mo.—l7.78¢ gross. 16¢ net per MCF Next 15.000 MCF per mo.—17.22¢ gross. 151/29’! net per MCF All over 50.000 MCF per mo.—16.67¢ gross. 15¢ net per MCF ‘Based on delivery of 1.000 B.t.u.'s. per cubic toot. Cost ad- iusted up or down by percent. The average heating value varies from 1.000 B.t.u.'s. per cubic toot. ‘“Ibid., page 166. “The Wall Street Journal, Aug. 29, 1955. “"‘“Gas Facts-—-A Statistical Record of the Gas Utility Industry in 1953,” American Gas Association, 420 Lex- ington Ave., ‘New York 17, N. Y., page 23. a 41 12 percent local.158 ceive greater emphasis than their portion of total costs justifies. Taxes, profits, rent, insurance, interest and depreciation in 1947 accounted for 18.8 percent of the total value of products ship- ped by all plants.“ _ One survey indicates that taxes accounted for 3.2 percent of production costs!“ A Federal Trade Commission study of 22 woolen and Wor- sted companies in 1939 shows that all taxes, ex- cept income and social security payments, were .97 percent of all costs and» about 2 percent of manufacturing costs.“ Another Federal Trade Commission study of 44 woolen and worsted plants indicates that all taxes and social security costs represented 2 percent of sales in 1939 and 1.6 percent in 1940. In 1948, an average of 75 percent of the taxes collected were federal, 13 percent state and The proportions would dif- fer from these averages in some states and local- ities, but federal taxes form the bulk of tax costs and are the same in all locations. State and local taxes account for the tax differential among states, areas and cities. A number of the local taxes are property taxes. They are assessed re- gardless of whether the firm shows a profit; and in case of loss, they increase in relative impor- tance. The proportion of state and local taxes to per capita income 1 year was 7.3 percent in Mas- sachusetts, 6.8 percent for four New England in- dustrial states and 6.1 percent for 10 leading in- dustrial states. The ratio for three major south- ern textile states was 6.7 percentfi” About 33 states have corporate income taxes, and only Ore- gon has higher rates than Massachusetts?“ The rates for some selected states in 1949 were: Mas- sachusetts 6.215 percent, Rhode Island 4.0 percent, Virginia 5.0 percent, North Carolina 6.0 percent, South Carolina 4.5 percent and Georgia 5.5 per- cent?“ Different tax practices may result in Widely different actual tax costs. Local taxes are even more difficult to com- pare on a state or regional basis because rates and assessment values vary so greatly. A city with a high rate may have low valuation sche- dules, while in another the reverse would be true. “Howell, L. D., “Marketing and Manufacturing Services and Margins for Textiles,” Technical Bulletin No. 1062, Bureau of Agricultural Economics, U. S. Department of Agriculture, Sept. 1952, page 130. ' “““Report on the New England Textile Industry,” Com- mittee Appointed by the Conference of New England Governors, 1952, page 237. “"‘Ibid., page 239. “Morris, James A., “Woolen and Worsted Manufacturing in the Southern Piedmont,” University of South Caro- lina Press, Columbia, S. C., 1952, page 123. "WReport on the New England Textile Industry,” Com- mittee appointed by the Conference of New England Governors, 1952, page 237. “*°Ibid., page 241. mMorris, James A., “Woolen and Worsted Manufacturing in the Southern Piedmont,” University of South Caro- lina Press, Columbia, S. C., 1952, page 124. 42 ‘°”Ibid., page 125. ’ The size of cities also affects tax costs. < cities generally» provide fewer services, an many cases the services supplied are ch‘ Most of the plants built in the Southeast l been located in or near the smaller towns. " areas depend heavily on general property w Property taxes in 1939 accounted for 59.1 to percent of all state and local revenues in England, but only 52.5 percent average for, N ationfi” '* z :1 . All states in the Piedmont area except N_ Carolina provide temporary tax exemption new manufacturing plants and equipme Many New England States now have similar i tices to attract new industries?“ Taxes on woolen and worsted manufact r‘ plants in the Southeast are lower than in the England States. The savings, however, are a large item and alone would not cause re shifts. They may be large enough to infl location in a particular state or town when eral are otherwise equal. If taxes represent percent of total production costs and there tax differential of 30 percent)“ then a ~. could save almost 1 cent for every dollar of duction cost in the Southeast as compared New England. ' As the Southeast develops its economy as tax-exempt plants start paying their r tax rates seem certain to increase faster t those in the older areas. This will narrow, tax differential. ’ In Texas Taxes in Texas are comparatively low sidering the State’s progress and developme Probably the three most important ques concerning the State’s taxes are the amou , taxes collected per capita, the amount of per ita net long-term debt and how these figures ~ pare with leading southern textile states. ure 15 shows that Texans pay less taxes and less per capita than people in any other state cept Virginia. The average state tax collecte capita was $70.42 compared with $56.68 in as, and the average net long-term debt was $ compared with $12.94 in Texas. a Texas has no state individual income ta general sales or gross receipts tax and no c_ ration net income taxes. Most of the Sou States where wool textiles are locating have t, taxes!“ Texas has no manufacturers’ use or payroll taxes, but it does have an ad val tax on real and personal property. During “"Ibid., page 125. ‘“““Report on the New England Textile Industry,” l mittee appointed by the Conference of New En Governors, 1952, pages 312-315. ““"Ibid., page 57. - ““‘“Summary of State Government Finances in 1 April 19, 1955, U. S."Bureau of the Census. jr 1952, the ad valorem tax collected on rty‘ was only 5.5 percent of total rev- e State Government. A homestead law ihomes up to $3,000 valuation?“ jrations chartered or doing business in pay a franchise tax. The State has a and motor vehicle license tax. Q. Texas joined the Union, it reserved its _ds and revenue from these lands to re- "State's taxes. Some =of the lands are and the State income from these sour- ge. State Constitution as amended prohibits nds unless the people approve in a state- ' . 168 ” 1 low per capita tax rate and small indebt- _ - favorable to industries located in Tex- ‘Cw industry is not faced with paying off - _te debts created by others. The laws g union activity in the State may indi- vorable attitude toward industry on the a only way local taxes in Texas cities and 'n be compared accurately with those in state is on a town-by-town basis. Since I tes and towns in the Southeast have ‘ftax exemptions to industry and Texas , local tax costs are favorable to new in- k5. in the Southeast. However, some com- ve not sought or accepted tax consider- that area because they did not think it l»: older industries more heavily to make __ ns possible. They also feared that local _= might feel it their right to help man- i new industry and that their tax load heavy when the exemption ran out. ‘_e is no program in Texas for waiving other inducements. No community is h» by law, to use either tax or revenue q- constructing buildings to rent to in- 'ns, generally, realize the value of new to their cities and local communities. anxious to help any prospective new .9 Many towns have industrial founda- Tmmissions and chamber of commerce _;- s to help. In some cases, they are pre- assist in all phases of location problems. fizens will be fair about local tax rates ations. There are no reasons to believe i taxes in Texas would not be comparable g taxes in similar-size towns in the other States. _'e, Joel F1}, “Cotton Textiles: An Opportunity in _ f’ Cotton Economic Research, University of Tex- lftin, Tex., 1954, page 132. it age 132. ' fl- for New Industries Described by Leaders North and South,” Industrial Development, iVol. i1 1, Jan. - Feb. 1955. n0 '- U Pu 00pm Ton: 102i! IOO '- l For 00pm: Not Long Tom Dob! 93-25 9 m’ 9O - O0 - 7035.42 roso 753mm ‘I I0 6 7.6 3 i 6'! 5° - 58.48 sue “'2' 50" 40" 53.19 DOLLARS 30" ZO- O ____ _ _ ALL u I s: STATES Figure 15. Per capita taxes and net long-term debt, selected states, 1954. Source: “Summary of State Govern- ment Finances in 1954," Bureau of the Census, 1955. Capital Capital requirements of the wool textile in- dustry are high because the buildings and modern machinery run into millions of dollars for a good- size plant. Large amounts of money also are re- quired for operating capital to buy raw wool stocks and goods in the processing stages, storage or transit. It is important that the owners of capital be familiar with the problems of the wool-textile industry, such as the long delays between pur- chase of foreign raw wool and its delivery, the time required from start of processing to sale of finished fabrics, the risks involved and the pos- sibilities for profit. Capital was developed along with industry in the Northeastern States. Capital management there is thoroughly familiar with the problems of the wool-textile industry. Before the war, depreciation and obsoles- cence accounted for 2.29 percent of total costs for 22 woolen and worsted firms. In 1940, 44 woolen and worsted firms allotted 1.55 percent of production costs and expenses to depreciation and obsolescence and 2.16 percent for mainte- nance and repairs. A textile workers’ union sur- vey shows that in 1949 depreciation was 1.5 per- cent of sales and 23.1 percent of profits, but in 1950 it was 1.4 percent of sales and 13.9 percen of profits for 121 companies studied.” ' Depreciation allowance averages about 2 per- cent of all costs. This amount is set aside before figuring profits, taxes and dividends, but is not necessarily spent. In the past, depreciation al- lowances in a woolen industry were based on a long, useful life. The recent, faster depreciation "°“Repo;on the New England Textile Industry,” Com- mittee appointed by the Conference of New England Governors, 1952, page 265. 43 schedules have encouraged capital investments in the industry. Cash outlays for plants and equip- ment can be regained in fewer years, and taxes on profits are reduced proportionately. Plants in the Southeast are newer than those in the Northeast. They cost more than the old plants in the Northeast, and more can be set aside for depreciation than on the older mills. Because southeastern plants are newer, less must be spent on repairs and maintenance. The southern textile industry generally is more profitable than comparable industries in the Northeast. Therefore, it is likely that capital for building southern mills should be obtained more easily than for northern plants. The bulk of the capital for plants in both areas comes from the North. Most of the south- ern plants are either branch plants of companies fin the North. or were established by northern companies; therefore, the northern capital fol- lowed the southern movement. The greater profit opportunities in the Southeast also en- couraged northern textile capital to move south. Some of the wool textile plants were financed with southern capital, and southern cities fur- nished some of the new plants moving into the Southeast with a site and building. Capital for Texas plants is a much more difficult problem. Lack of capital is probably the main reason that plants have not yet been established in the State. Many individuals and towns have shown a great deal of interest in having plants in the State; but, with a few ex- ceptions, none has been interested enough to invest money in such a venture. This may be explained partially by the fact that some plants appeared to be only money-making schemes, economically unsound or to lack skilled manage- ment. However, the main reason that local capi- ~tal is difficult to obtain is that people do not know enough about the wool-textile industry. Some owners of capital may fear investing money in a firm that could be crippled, almost overnight, by labor troubles. They prefer to invest their money in real estate, land, livestock or other businesses with which they are more familiar. For these reasons, it appears that major development of a wool-textile industry, or even one good-size mill, must depend on outside capi- tal. It will be necessary for a big company with adequate financing to establish a branch plant in the State, or for a well-financed firm tomove into the State. Local interests might invest money in stock if a well-known firm sought to establish a modern branch plant in the State. Some of the industrial foundations or chamber of commerce committees might help finance a building for an established company. Although there are adequate lending agen- cies in the State, their management is not fa- 44 “Howell, L. DJ, “Marketing and Manufacturing Se miliar with the wool-textile industry; a might be more-difficult to obtain high-risk, ating capital in this State than in the Norti At the same time, some of the lending ag undoubtedly have had experience with cotto tile plants and apparel manufacturers in State. Banks along the Gulf Coast are e enced in foreign trade. Managemeht Progressive management is probably th to a company’s success in the woolen and wo textile industry. It is partially responsibl some mills making money during periods ’ most are operating at a loss. There are no to show how much management costs a a or what salary a good mill manager receive some idea of the cost of management is con in Bureau of the Census data. In 1947, salaries, as distinguished wages, cost the U. S. woolen and worsted f ‘ plants $44,966,000 to produce $1,369,23 worth of products. Management, then, cos percent of the value of the products. v margins, which include all costs plus profit the costs of materials and supplies, amoun = $669,692,000?" The average cost, then salaried employees of woolen and worstedf plants was a little over 6.7 percent of man‘ turers’ gross margins.‘ Salaried employees in company officials, plant managers, produ managers, engineers, research workers, keepers, typists and others. 7 Management has been charged with do’ poor job in both the North and South. Som that tariffs have protected inefficient ma ment in the whole industry. Others thinkf northern management should have mode more and have avoided the influence of la, management. Some say that southern ma ment has not had to be very progressive b of the area’s economic advantages, especial] cost, supply and lack of unionization of sou l, labor. ~ search, better selling and better financing, some of the reasons for mergers. ' Although much of the management pe nel in southeastern plants came originally the Northeast, southern management see be doing a good job in worker relations, m and recreation and in community develop and leadershipfl” 1' and Margins for Textiles,” Technical Bulletin No. Bureau of Agricultural Economics. U. S. Depa of Agriculture, Sept. 1952," page 130. ~ ‘”“A Lesson For All of Us,” Textile Industries, Vol No. 7, July 1955, page 67. , if e cost of management in the Northeast utheast seems to be about ‘equal. Since theastern mills are branch plants of north- ;» s, a number of the higher paid company s serve as executives for both locations. qmanagers and other key production person- .} the branch plants may receive higher sal- ‘than their counterparts in the Northeast T incentive for moving. Some salaried em- s, such as bookkeepers, typists and key em- ‘ w who already lived in the Southeast prob- r . . . are working for lower salaries than those 1n ortheast. exas mills would be in a similar position to f: in the Southeast in respect to management. _- mills were branch plants, their higher paid ny officials also would be officers of the .- company. Some key personnel would re- higher salaries to encourage them to move, .- he mills might be able to employ at no extra former Texans now working in mills in other Some other key salaried employees also _ cost no more than in other states. Waste Disposal aste disposal and stream pollution have e serious problems in recent years, especi- ' heavily populated and industrialized areas. Ti become an even bigger problem with in- w industrialization and the growing popula- in this country. y January 1954, 41 states had some kind g eam pollution laws in effect. They differ a _ deal, not only in the laws themselves, but a the way they are enforced?" During the _. session of Congress, the House Ways and ‘Y: Committee approved a bill (H.R. 3547) 7permits rapid tax writeoffs (in 5 years) on [treatment plants built by textile mills and ical producers to reduce stream pollution.“ aste from wool-textile plants is one of the harmful effluents released into a stream ‘one of the most difficult to treat. In the hire area of England, dumping tremendous es of wool scouring Wastes into the river w so much hydrogen sulfide gas that it was H for the air above the water to burn."5 waste is toxic to stream life, depletes the en supply and impairs the stream’s physical teristics and properties. 1' astes from wool scouring plants are especi- ffensive. Some plants in the East make no u to recover any byproducts, and others Qer only a small percentage of the wool lstrial Development, Vol. 1., No. 2, Mar. and Apr. ly News Record, Fairchild Publishers, Inc., New 1's July 18, 1955. ' - Industrial Waste Guide to the Wool Processing “ustry,” Public Health Service, Publication No. 438, '75. Department of Health, Education, and Welfare, ." page 5- grease in the effluent.“ Some of them have no waste treatment plants of their own, but dis- charge the waste into streams or run it through the local city sewage system. Only three plants in this country used the acid-cracking process to recover wool grease and make a more acceptable effluent?" The percentage of grease taken out of the scouring wastes affects the costof waste treat- ment, and the volume of grease recovered de- pends heavily on the price it will bring. The office of Price Stabilization ceiling price from June 1952 to March 1953 was 20 cents per pound for crude centrifugal, not refined, moisture maxi- mum 21A; percent and 18 cents for wet (over 5 percent moisture). Special anhydrous cosmetic grade was 40.5 cents per pound. About 8O per- cent of the wool grease recovered in the United States is done by the centrifugal method, which has a recovery rate of only 30 to 4O percent of the grease present. The acid-cracking process recovers 6O to 70 percent, but the grease is of low quality and unsuitable for some high-quality uses.“ The rate of grease recovery in the industry averages about 2.2 percent of the grease weight of the wool?” A mill that scours 8 to 10 million pounds of average grease wool annually can ex- pect to get about 200,000 pounds of wool grease ‘which, at 18 cents per pound, would be worth around $35,000. Fine wool produces more grease than average wool, and the recovery rate is near 5 percent of the grease weight of WOOl. The normal output of two scouring trains scouring fine wool is about 100 pounds of grease per hour. Centrifugal equipment to handle this volume re- quires an investment of about $45,000!“ Using this equipment and scouring 10 million pounds of fine wool, a mill could gross around $90,000, withone man operating the equipment. Wool scourers can abate stream pollution by cracking the emulsion, settling it and filtering the sludge. This decreases the solid material and biological oxygen demand to acceptable limits for disposal in streams?“ One mill in New Eng- land that scours 100,000 pounds of fine wool a week has a waste treatment plant costing $35,500 to treat the plant’s 100,000 gallons of waste water weekly. All cost of treatment plus depreciation is $195 a week. The grease recovered by centri- fugal equipment pays this cost and a substantial part of the scouring cost.18‘~’ Some Boston engineering firms estimate that an acid-cracking, 1 grease recovery plant which "““W’ool Grease-—The Economics of Recovery and Utili- zation in the United States,” Marketing Research Re- port No. 89, Agricultural Marketing Service, U. S. De- partment of Agriculture, June 1955, page 53. ‘"Ibid., page 63. "slbid, page 142. ‘“’Ibid., page 58. “°Ibid., page 60. ““Ibid., page 52. mlbid, pages 54 and 55. 45 cheaper land for sumps and lagoons. could treat 100,000 gallons of effluent daily and produce an acceptable effluent would cost $250,000 to $300,000. It would require four or five men per shift t0 operate. Such a plant is beyond the resources of most mills.183 » Some mills have found an adequate answer to the problem by extracting some of the grease, then acid-cracking the effluent in a plant costing $30,000 to $35,000 and operated by one man. The effluent can be discharged into streams satis- factorily under the present state public health laws. Changes in the laws or their administra- tion might change the picture. There appear to be no significant differences in the cost of grease recovery and waste treat- ment in the Northeast as compared with the Southeast. The Southeast probably has a slight advantage as a result of lower labor costs and On the other hand, some of the mills in the Northeast have no particular problem because the city sewage system is adequate to handle their waste. If more rigid administration of the stream pollution laws forces mills to treat effluent more thoroughly, it may affect the Northeast first be- cause of the higher concentration of industry in that area. Texas has strong anti-stream pollution stat- utes, and Texas courts have interpreted them to mean, “that any waste discharged into a water- course shall be of such nature as to not materially affect the quality of the receiving water?“ Waste disposal-is a serious problem in Texas be- cause much of the State’s water supply is im- pounded-in lakes on streams that do not flow all the time, and the number of rivers that flow year-round is small. a The wool scouring plants located in Texas do not treat their effluent, but they have centrif- __ugal. grease recovery units. The mills own land where sumps have been constructed, “and the waste effluent is hauled to thesesumps in tank trucks. a a ~ . r- A _ Some areas in the State have porous soils that absorb much of the liquids, andthe evapora- tion rate in much of the State is high. At Austin and Big Spring, 51 and 59 inches of water, re- spectively, normally evaporate, from . April through September. These rates areconsider- ably above those of the Southeast and New Eng- land)“ Texas has plenty of land, and land suit- able for waste disposal is comparatively cheap around the smaller towns and cities; ' Some firms in the State are considering ser- iously’ the possibility, of waste water disposal through wells drilled to underground strata. This "“‘Ibid., page 68. ~ “Personal letter from the Office of the State-Department of Public Health. . I, » “fiHembree, Joel F., “Cotton Textiles: An‘ ‘Opportunity in Texas,” Cotton Economic Research, University of Tex- as, Austin, Tex., 1954, page 130. 46 may ‘result in cheaper waste disposal in: areas of Texas; ‘ - Mills in some sections of Texas probabl an advantage in the cost of waste disposal, pared with some locations in the New E ' ‘States, but New England mill locations th city sewage. systems and those that do v any treatment have an advantage over p mills. in_ Texas. Some locations in the Sou have advantages over Texas: *If more ri . forcement of stream pollution legislation i mills in other areas to use expensive trea ' and mills in Texas can continue to use ev tion and seepage, then the advantage may é versed in favor of this State. The disadvantage Texas now suffers ' current method of disposing of scouring ~ would not be an important cost item. Dep tion on a tank truck, interest on land inves and labor and truck expense would likely O‘ than $10,000 per year for a plant scouring 1 lion pounds of wool per year. ' Some city sewage systems in Texas ca dle waste from wool plants satisfactorily. some of the smaller towns might handle, volumes of wool mill wastes if the efflu made constant in character and the feedin into the sewer system is controlled to a = constant ratio of waste to sewage. This -' require building a waste storage tank. One- plant scouring and dyeing 300,000 pounds of per week used this system_in a city of ' people?“ The scouring and dyeing waste i’ storage tank partially neutralize each other. Chemicals and Supplies No industry-wide data are available 0 cost of chemicals, dyes and other expendabl plies for wool-textile mills. Since volume types vary according to the mill, method o cessing, raw material and finished product, a figure, even if available, would be of little , in estimating the costs of expendable suppli a mill. In scouring, for example, the ma , used range from synthetic detergents , through various proportions of synthetic gents, soap and soda ash to soda only. Even in the soap and soda ash combi I the proportion of soap varied from 1 pou soap for each 1.33 pounds of soda ash to 1 ~ of soap for each 13.5 pounds of soda ash , 23 mills studied?“ ' The method of plant operation can res" considerable savings in soap and soda ash. ‘““An Industrial Waste Guide to the Wool Pro Industry,” Public Health Service, Publication, N U. S. Department of Health, Education, and W 1955, page 9. , ' I ‘““Wool Grease—The Economics of Recovery“ and zation in the United States,” Marketing Resea ~ port No. 89, Agricultural Marketing Service, U. ‘ partment of Agriculture, June 1955, page 38. on with the use of grease-recovery “a ulation of scouring liquors saves icals. The cost of the scouring ~.,the industry averaged $0.134 for I ‘grease wool scoured)“ The total g per 100 pounds of grease wool _mills handling 1, 5, 10 and 2O mil- ' $2.564, $1.541, $1.441 and $1.309, ‘ Thus, the cost of chemicals was , total cost in scouring 5 million 1, but the chemicals cost less than iund of wool scoured. '1 the acids, dyes, sizing, oils, soaps "1 infurther processing cost more per tprocessed than the chemicals used "ng, they probably account for a etage of the total processing cost. s of the actual or percentage costs “ ded supplies, the cost seems to be New England and Southeastern chemicals are priced delivered any- _,United States. There are a few ex- even wide price differences would i st differentials between the two would be true with costs of chem- The State’s dynamic chemical in- 1 es most of the chemicals needed by jplants. Since the other chemicals }- at no higher cost than to other Twould be no advantage or disadvan- 3's standpoint to locating plants in _ ‘Climate itselfis not a cost item-to the wool y, but it affects other costs. heast seems. to have a slight advan- f New England States because of its "te.__1e‘?° The new, one-story buildings east are easier and cheaper to con- ,1 may be built flatter and do not re- ‘length of those in the North where j- heavy. Sites and labor are cheap- é A ction time is not prolonged in win- iweather. Less heat is required to ; ildings. . ; a fthe new textile mills in the South- p" alled air conditioning. The initial uipment ‘is an added burden to the ‘I pared with the Northeast, although mills also have installed this equip- st of operation for air conditioning the Southeast during the warmer the controlled temperature and hu- greaitly increased worker efficiency i‘; “the New England Textile Industry,” Com- _ inted by the Conference of New England Q52, page 267. and improved fiber behavior. In some southeast- ern mills, big supplies of cold water have reduced air-conditioning costs. Other advantages in the South as a result of the milder climate are less likelihood of plant shutdowns and absenteeism and less chance of transportation tieups because of bad winter storms. Although Texas has an excellent climate for industry, thereapparently would not be much advantage or disadvantage for wool processing in the State as a result of climatic factors com- pared with the Southeastern States. Some areas in the State have milder weather than some states in the Southeast. Fuel demands are lower and the fuel is cheaper. The longer, hotter sum- mers probably would require higher expenditure for air conditioning if refrigeration types were used. It might be possible to save on air condi- tioning in Texas, depending on the plant location. The average rainfall in the State varies from around 5O inches in East Texas to about 10 in- ches ‘in far West Texas, and the humidity varies generallv along the same lines. It might be pos- sible to lower temperaturesto satisfactory levels in some parts of the State with evaporative-type coolers, Which are much cheaper to install and" operate than refrigeration units. Excellent roads and mild weather would be favorable to‘ uninterrupted ’ transportation and steady work attendance. Most locations in Tex- as have more open flying days than‘ the other areas. a Cost oi Living The lower cost of living is both a cause and an effect of the lower labor cost in the Southeast. Cost of livingis difficult to distinguish from levelof living. Better’ food, clothing, housing, conveniences, luxuries and more time for recre- ation and entertainment are associated with high- er levels of living. The Southeast generallv has been considered an area where the level of living is comparatively lower than in other areas. It is assumed generally that rural areas have lower levels than cities. However, much wider differ- ences exist within all areas than between them. ‘ Cost of living depends somewhat on con- sumption patterns. Consumption patterns prob- ablv account for more of the lower cost of living in the Southeast than do variations in the cost of individual items?” Other more positive factors help account for the lower cost of living in the South. Lower labor costs are reflected in the price of many items. Taxes are lower. Heating costs are low- er and fuel is cheaper. Heavy, warm clothing is not required in the Southeast, and school children can'wear cotton clothing almost the year round. ‘”‘Ibid., page 154. _ 47 Power is cheaper in the Southeast. It costs less to build a house in the Southeast than in the ‘North.192 Prices of food items are not directly comparable because of different consumption pat- terns, influences of favorite brandsand, popular- ity of different foods; but they are probably low- er in the Southeast. Cost of living for mill work- ers also is probably lower in the Southeast as a direct influence of location in smaller towns and because many of the workers live on farms. A cost of living survey by the Works Prog- ress Administration in 59 U. S. cities during 1936 showed a range of 20 percent difference from the high to the low. By regions, there was only 6.3 percent difference, with New England the highest. By size of city, the low was 8 per- cent less than the high, but smaller cities in the Southeast probably were more than 8 percent lower. The highest southern city was lower than ‘the cheapest New England or Middle Atlantic city.“ A study of the Bureau of Labor Statistics showed that it cost $3,111 per year to provide a reasonable level of living for a family of four in Washington, D. C., the highest U. S. city, and $2,734 in New Orleans, the lowest?“ The cost-of-living spread seems to be wider than this between the cities in the North and South where wool plants have located. A mill manager in the South who formerly lived in New England said in an interview that, considering the cost of living, southern workers in wool-textile mills were better paid- than northern workers. Very few data are available to compare cost of living in Texas with the wool textile states, but it is believed that the costs would be similar. Fuel in Texas is cheaper, but this advantage is probably offset by the greater use of air condi- tioning in this State. Cost of constructing the standard house in Texas is about the same as in other Southern States. The fact that cotton-tex- tile workers in Texas work for lower wages than the average in other Southern States may indi- cate slightly lower living costs, but there is surely no large cost-of-living advantage or disadvantage in Texas compared with the other Southeastern States. Sites The cost of sites has little influence on the selection of a location or on processing cost of the wool-textile industry. Even if a site cost $100,000, at 4 percent interest on the invest- ment, it would amount to only $4,000 per year. Location of the site with regard to accessibility ‘°’“Comparative Estimates—Standard House,” Construc- tion Cost Section, Federal Housing Administration, Nov. 17, 1955. ‘““Report on the New England Textile Industry,” Com- mittee appointed by the Conference of New England Governors, 1952, pages 154 and 155. ‘°‘Ibid., page 155. 48 of water, fuel, power, transportation facilitie waste disposal may be far more important. i A report on the New England textile q try195 states that sites are much cheaper i Southeast than in the Northeast. It f I states that sites are available in the Sout indicating that they might not be so readily Cost of sites would not be an, iifnportant infl on migration of industry to the Southeast, if sites are donated to the firm. Providing sites at reasonable cost or free of cost does cate a favorable attitude of towns and o; which is important to a firm. Any reducti cost of sites also may be important for - financing. The price of sites in Texas probably is parable with the price around similar size t in the Southeast. There would be no adva or disadvantage to mills locating in Texas the standpoint of sites. Machinery Repair, Parts and Mainte-ni The cost of depreciation, repair and ma' ance was discussed in considering cost of =1 to the industry. Another aspect of mach maintenance deserves mention—the accessi of machinery replacements, spare parts and _ ities for major repairs. Most of the wool machinery and spare. . . manufacturing concerns are located in the N east. Although the price of these goods ' be the same regardless of who purchasedt the Southeast probably has to pay a small a I extra for transportation. In the past few machinery companies have established spare = supply houses in the Southeast, but many i mills had’ already been established in the ‘s This indicates that lack of a quickly ava supply of parts was not an important cond Most mills keep an adequate supply of extra ;. on hand. They also have on their payrolls mechanics who can make most repairs nece In addition, good machine shops in most o large towns over the Nation can do any ." repair that is needed. Texas has no supply parts houses for" ‘ textile machinery. There are fine machine w in Texas’ cities and big towns, and many s i: towns have capable welding shops. The Sta 3-. a good-size machine-tool industry, and We house Electric Corporation has a heavy el equipment manufacture, maintenance and r plant in Texas. ' Cost of transporting new machines to would be a little higher than for other area a modern mill with its own mechanics and quate supply of spare parts would suffer . handicap. Parts not stocked could be flown ' ‘”5Ibid., page 267. fte with only a day’s delay. Texas has a {ihouse which stocks parts for cotton-tex- hinery. a gitudes and Special Inducements pte and community attitudes toward new 'es are important to mill ownership, man- ' t and workers. The attitude toward wool st.“ With higher birth rates and high- '1 entages of people leaving the farms, the 1st needs more jobs for its people. ‘uthern States seem to be fully aware of ew industrial jobs mean to a community. f d States Chamber of Commerce survey)” ;~ 0st of the data collected in the Southern V, shows that 100 new factory jobs mean ,1 more retail sales to a community and jother benefits. ’ q te attitude toward industry in the South- _' tes is indicated by right-to-work and other fig-laws and how these laws are enforced, by that permit cities to vote bonds to build lgs, by state tax policies and in many other Interest by state officials in plants that "in their state also indicates a favorable attitude. uthern community attitudes are exempli- _‘y courtesy of the community leaders, help ,1 ning, furnishing information, tax policies, g and site arrangements, personal letters Qvertisements. any southern communities have offered ,5, inducements to industry. These generally he form of special tax exemptions that ex- or some period of time. A number of com- ‘es have erected- buildings to the mills’ cations by voting bonds and have rented ildings to the firms with an option to buy Some objections to these procedures are lder firms carry the new firm’s part of the V: and that the new building, as municipal E y, is tax free. The rent may be set so as {ire the bonds in a specified time. Other i; may only donate a site. During one 4- ’s period, southern communities voted 63 1 dollars in bonds to build textile plants?” ;lthough no special inducements were receiv- most of the industries locating in the South- . they do show a favorable attitude that .2 ave decided the exact mill location where y areas had equal facilities. The induce- § may have been more important to concerns imited capital. ,page 75. i . n: New Industrial Jobs Mean to a Community,” gez of Commerce of the United States, Washing- I 1 5 . port on the New England Textile Industry,” Com- .e Appointed by the Conference of New England ernors, 1952, page 269. ,page 268. A‘.- is far better in the Southeast than in the Some companies have not requested or ac- cepted financial favors. They fear that special favors from a community might bring about in- terference in mill management and greater tax burdens later. Also, they may not think it just for older concerns to carry the tax load alone. Although special inducements are more prev- alent in the Southeast, some Northern States and communities have similar practices?” Maine and New Hampshire are the only New England States with statutes that prohibit tax exemp- tions.2°1 Special inducements may give some advan- tage in the Southeast over the New England States in capital outlay for sites and buildings, but all the ‘southern communities do not offer them and most new industries have not accepted them. This indicates that they are not a major reason for plants to move to the Southeast. The Southeast has enough sound economic advantages to attract industry, but the special inducements indicate an all-important favorable attitude to- ward industry. Texas also has a favorable attitude toward industry, as shown on the state level by the right- to-work law and other labor legislation insuring equal rights for both labor and industry. Texans believe it is far better to keep taxes as low as possible and have everyone pay his fair share. The State has no program for waiving taxes.2°2 Almost every city and town in the State has an active chamber of commerce willing and anx- ious to provide information to industry. Many of the larger cities publish literature on their ad- vantages for industry, but a law passed during Civil War reconstruction days prohibits the State from advertising its attributes. In April 1953, Texas had 14 industrial foun- dations, but by December 1955 there were at least three times that many and the number is increas- ing rapidly?” These organizations are scattered over most of the State, but are concentrated more heavily in the eastern half. Most of the founda- tions are incorporated. They may sell stock or borrow from members or financial institutions. They may purchase and develop sites, build build- ings for lease or conduct similar activities to at- tract industry. Possibly the most valuable serv- ice of chamber of commerce groups, industrial committees and industrial foundations in Texas is encouraging their own local businesses to ex- pand. In 1942, 42 states had state planning boards, but Texas is one of the states Without such serv- ’°°Ibid., page 269. “mSubsidies for New Industries Described by Leaders from North and South,” Industrial Development, Vol. II, No. 1, Jan. - Feb. 1955, page 18. ’°’Ibid., page 18. mTippit, John W., “Recent Developments in Industrial Foundation Activity in Texas,” Supplement No. 1 (Dec. 1955) to Research Report No. 43, Texas Engineering Experiment Station, College Station, Tex. 49 ice. However, the industrial departments of nu- merous commercial concerns are trained and equipped to provide valuable services for an in- dustry that seeks a location in the State. Technical Services Availability of I technical services is impor- tant to the wool-textile industry. Research find- ings of public institutions are available to mill management. . Independent fiber laboratories equipped to handle wool are located mainly in the Northeast and are more accessible to eastern mills, which may give them a slight advantage. The larger firms have their own research facili- ties, ‘and findings in northern laboratories would be available‘ to their southern branch plants. A Texas branch plant of a good company would be at no disadvantage compared with the Southeast. “Both the U. S. Testing Company and American Conditioning House offer core testing services at San Angelo. Extensive research fa- cilities are available at the major colleges in the State. The Southwest Research Institute, a pri- vate research organization at San Antonio, has facilities for research on problems of the textile industry. The U. S. Testing Company has a com- plete cotton fiber laboratory in Dallas. The increasing interest in automation brings up instrument service facilities, another techni- cal service worthy of consideration. A number of the firms that repair and] maintain highly complicated electronic and automatic continuous- flow equipment have branch plants in Texas. These companies include Foxboro, Brown, Taylor, Leeds and Northrup and the Instrument Society of America. Texas cities where these facilities are located include Dallas, Fort Worth, Houston, Corpus Christi, El Paso, Odessa, Lubbock and ,Amarillo.2°‘* q Recreation Many articles in trad-e journals indicate that southern mil-l management is doing a good job in worker relations and that recreation for workers contributes to their happiness and efficiency. The geographical location of the Southeast probably gives-it slightly better access to the Nation’s rec- reation facilities, but a bigger advantage- is in the South’s milder climate. ‘ " Texas seems well located for recreation since it is near the fgeographical center of the country. The State has 4 National forests, 5 State forests, 47 State parks and 1 National park. The Gulf Coast offers boating and deep sea fishing; there are numerous lakes and streams for fresh water fishing. Dude ranches are plentiful. Almost every town has one or more golf courses and swimming pools. Golfing is a year-round sport in this mild climate. The ‘many high schools, col- .’°‘“‘New Study Reveals Influence of Automation in Loca- "tion of Industry,” Industrial Development, Vol.' 1, No. 3, May 1954, page 16. " ‘ - 5O _ One out of 3 Texans lived on a farm in 1940, leges and universities have athletic teams. areas have deer and wild turkey for hunting.‘ excellent highways make weekend travel to p0 of interest much faster than the distance w indicate. ‘ Texas Business Anyone considering Texas»: as a location wool-processing plants would be“ vitally inter in the economics of the State, the primary" ket area and what other industries think of ‘ as as a location for manufacturing plants. Texas leads the Nation in the productio petroleum, natural gas, sulphur, helium an‘ number ‘of agricultural products. It is -~ in aluminum production and one of the lar in chemical production.‘ It has a dynamic w chemical and plastics industry, important u, tion of transportation equipment, aircraft, chine tools, building materials and other in tries. The State has the Nation’s largest li deposits and in 1953 had a steel-producing ca ity of 1,269,720 tons annually. I During 1939-53, the value added‘ in m facture in Texas increased 700 percent, from 1 million dollars to over 4 billion. During 1941 manufacturing grew 84 percent. During 1 52, per capita income- rose from $401 to $1, The national total of employees in nona F tural establishments rose 75 percent during 1 54, but in Texas the number more than dou in 1950 only 1 out of 6.2% Texas led the Na in the trend toward urbanization. Accordin a report in Business Week, based on a McG Hill survey, the Southwest is the second fa growing region in terms of factory jobs. I surpassed only by the Pacific Coast; but Great Lakes, Middle Atlantic, South Atlantic New England States lead, in that order, in - factory jobsfm“ This report also said, “One t is clear: industrial migration is going to - tinue relentlessly to change the industrial ma the United States.” For the first 10 months of 1954, Texas s 1,997 million dollars on construction. Ex tures of leading southern textile states w North Carolina 560 million dollars, South lina 477. Tennessee 631, Georgia 551 and, bama "376?" A‘ private development agenc port?” shows that Texas got about 40 perce the 1.9 billion‘ dollars spent in the 13 Sout States on manufacturing buildings between 1945~and June 1948. ‘The13 SouthernStateé mWickens, Aryness, Joy, “Trends in Employment, Income in Texas and the United States,” Acting missioner of Labor Statistics, U. S. Department of or, (Address) Jan. 11, 1955. ‘ ’°““Industrial Map Changing as Southwest Growing San Angelo Standard Times, Aug. 15, 1955. f. WManufacturers Record, Vol. 124, No. 1, May 1‘ page 10. “ q ’°““Survey of Industrial Expansion,” Territorial Info tion Department, Chicago, Illinois, Sept. 1948. ' percent of the amount spent in the ation.2°9 ,4 during the first 10 months of 1954, Tex- _'.7.801 million dollars on retail trade. The I: of the Mississippi "River, where Texas juld have a marketing transportation ad- ', spent 45,481 million dollars on retail lmost a third of the U. S. total?” isurvey of Texas manufacturers conducted I-Bureau of Business Research to determine ,ustry comes to Texas“ gives the follow- reasons: the State’s industrial poten- tural resources, raw materials, rapidly ing population with resultant larger labor irising per capita income, central location ge geographical market, oil and gas sup- E» virtually all sections of the State, mild ', above-average highway system and fa- labor atmosphere. Most of the firms sur- ieither had offices in other states or had ,1 from another state. A i? e primary market area for Texas textiles, tion, growth, total and per capita income, ._- of production workers per 1,000 popula- ’ d value of private construction are de- g g faster than the U. S. average?” exas wholesalers and retailers purchased i=$551,324,000, worth of apparel and related 7v s in 1952.213 The main items which might e-wool goods are: omen and misses coats ...... --$14,808,000 _ omen and misses jackets.-- 2,042,000 ; omen and misses sport and casual dresses ____________ -_ 62,967,000 omen and misses suits ...... _- 12,352,000 omen and misses skirts .... -. 4,471,000 omen and misses sweaters. 2,279,000 Wen and boys ; separate trousers .............. _- 4,685,000 s» en and boys dress suits .... .. 34,390,000 en and boys ~. sport trousers ............... -- 1,626,000 ,__e,n_ and boys . dresstrousers ................ -_ 9,955,000 y» en and boys sweaters ........ -- 1,688,000 rapery and upholstery ....... __ 7,146,000 lankets 4,507,000 ool carpets __________________________ __ 2,680,000 3 ughlin, Glenn E.,‘ and Stefan Robock, “Why Indus- Moves South,” National Planning Association Com- ~ e,of the South, Report No. 3, June 1949. . ~ ufacturers Record, V01. 124, No. 1, Jan. 1955, e 9. t, Florence, “Why Industry Comes to Texas,” Tex- YBusiness Review, -.Vol. XXVIII, No. 12, Dec. 1954, egu Toff Business Research, A University of Texas, 1 1n, ex. v ~ A q- Noel H., “Cqtton Textiles; , An Opportunity in "s',” Texas Business Review, ‘Vol. XXVII, No. 6, July »- Bureau of Business Research, University of Tex- Austin, Tex., page 16. ’ ' a " ‘ley, James R., “Out of State Purchases of. Textile , Apparel, and Related Products by Texas Organi- 'ons, 1952,” Research Report 44, Texas Engineering riment Station, College’ Station, Tex., Sept. 1953. Since World War II, Texas has experienced relatively more growth in apparel manufaeturing and has made relatively more progress in apparel marketing than any other state?“ The Texas apparel industry has been confined largely to work clothing, childrens wear and womens cot- ton goods; but recently sportswear and high-styl- ed womens cotton goods have increased in im- portance. It appears that the Texas industry, which grew from. 10,000 employeesin 1939 to about 35,000-in 1954, will continue to, grow .into fields embracing wool goods. _Decentralization is taking place in the gar- ment industry. W Especially notable is the exit from New York City to, surrounding areas. Gar- ment making is an easy-entry industry with low capital requirements in which labor accounts for about 50 percent of operating costs. Women con- tribute the bulk of the work force. Labor costs are lower in the West, and transportation savings are possible if fabrics are purchased in the West for garments to be made and sold there. With these savings. and the increasing style centers west of the Mississippi, both textile and garment industries probably will increase in that area. Past experience shows that a heavy’ concen- tration of textiles in a town, a state or an area-- is unhealthy for the people as well as the indus- try. Cotton textiles migrated from New England to the Southeast, and wool-textiles are in the proc- ess of doing so. In 1939, 50 percent of the fac- tory jobs in seven Southeastern States were in textiles.215 The Southwest and Pacific Coast are the next logical stops for textile industry; and Texas, with its big and growing labor force and much lower labor costs, is the better area. RECOMMENDED PRODUCTS AND A DECREASED OVERHEAD It was found in this study that it is feasible for an established wool-textile firm to process wool in Texas through any of the standard proc- essing stages. »A locally owned company with- out the connectionsneeded toobtain commission business would have some serious problems and probably would have difficulty marketing prod- ucts that the mill owns in some of the process- ing stages. - ~ Scouring worsted wools on commission is practicable only for a Well-known firm with busi- ness alread-y established. Purchase of grease Wool for scouring and resale to the worsted in- dustry is not feasible. . It is feasible to scour woolen wools, tags, clippings, off-sorts and some very heavy-shrink- ing combing wools on commission and to pur- “Dale, Alfred G., “Texas Expansive Clothing Industry,” ‘ (Reprint) Texas. Business Review, Vol. XXVIII, N0. 11, Nov. 1954. » mMcLaughlin, Glenn E., and Stefan Robock, “Why In- dustry Moves‘ South,” National Planning Association Committee of the South, Report No. 3, June 1949. ' 51 chase these wools for scouring and resale to the woolen industry. Marketing the wools t0 ad- vantage is the main problem. The volume of these wools produced in Texas is not large, and the State already has six scouring trains capable of scouring some 30 million grease pounds per year. Top-making in Texas also is economically sound, but a locally owned firm might find it dif- ficult to get commission combing business or to market any tops ownedl by the mill. Production of both woolen and worsted yarn for the fabric and knitting trades also is practi- cable. Commission business would hinge on fa- vorable relations with users in the industry. Yarns made for sale probably would have fewer marketing difficulties than scoured wool or wool tops made for sale. The wool-textile industry’s recent growth in the South began mainly with spinning and weav- ing plants. Partially processed goods were ship- ped to the Southeast for spinning and weaving, and the finished goodls were shipped back for marketing. Because of the greater distances from other mills to Texas, the availability of raw material in the State and the lower labor costs, earlier processing stages also would probably be done in Texas. Completely integrated mills that process raw wool into finished woolen and worsted fabrics would produce the greatest savings for plants in Texas. More labor is required than in the earlier stages, and savings on labor would be greater. There is a large market for these goods in Texas and other states where Texas has a transporta- tion advantage. Also, the full benefit of trans- portation savings on the raw wool could be real- ized. The goods should sell in the higher price "brackets because of the high-price wools, and these goods are suffering the greatest competi- tion from imported fabrics. q In addition to fabrics, the mills might be able to obtain commission yarn-making or combing business, or to make some of these products for sale. Knitting is another operation that is eco- nomically practicable. Since the market for knit goods is mainly wholesalers and retailers, the bulk of the plant’s produce possibly could be mar- keted in Texas’ primary market area. Some Tex- as wools are well suited for certain knit goods; however, the greater portion is better suited for woven fabrics. Pressed felts probably would be a sound ven- ture in Texas for an established firm, but be- cause of the small size of this industry, it was not given as much consideration as other processes. Texas has a greater volume of worsted wools than woolen wools. The worsted industry re- quires much greater capital and more skilled la- bor than the woolen industry. The State pro- 52 duces very littlelpulled wool, noils or othe product ‘raw materials often used for w' goods. The demand for woolen or worsted z varies in short cycles according to styles. these reasons, a completely integrated, com tion woolen and worsted plant of medium probably would have the best chance for su in Texas. x The savings for such a plaiit located in as, compared with the Southeast, can be mated. Assume that the plant would pr about 5 million pounds of products, consisti 5 million yards of woolen fabric and 5 m yards of worsted fabric that average 8 o‘ per yard. About 7.5 million pounds of wo grease wool averaging 55 percent shrink ~ be required to produce the worsted fabric, about 5 million pounds of woolen grease shrinking 55 percent, plus the noils from worsted wools by truck to the Southeast, ~- be about $150,000 and the cost of shippin woolen wools after scouring in Texas woul about $45,000. Minimum transportation ings=$195,000. The labor to produce this volume of w' and worsted goods in the Southeast cost 10 million dollars. Texas labor for the w and worsted industry_should be 5 to 10 pe~ lower. Minimum labor savings=$500,000. The fuel bill for a southeastern plant ~~ be about $42,200 to produce these goods. would require about 5,000 tons of 13,000 B. coal at $8.44 per ton, plus some labor costs. Texas mill would use about 130 million cubic of natural gas costing about $23,200. Mini fuel savings=$1.9,000. ' Water and waste disposal might cost I for the Texas plant, although in some loca Texas might have an advantage. Actual ~ cost probably would be comparable, but it I have to be softened in some locations. Soft cost would not be greater than 5 cents per , gallons, or $15,000 to soften 300 million gal Labor and depreciation on equipment would exceed $4,000 per year. Net water disad tage=$19,000. — _. The Texas mill in some locations would _ no higher waste disposal costs than the l. east, but in others the mill might have to land for seepage and evaporation disposal. terest on the land investment, tank truck d2 ciation, labor for a driver and truck ex probably would not exceed $8,000 per year. l‘ waste disposal disadvantage=$8,000. A Possibly half of the mill’s products coul marketed West of the Mississippi River at a ing of about 1 cent per pound, or $25,000. other half probably would have to be sold in ; York, with about 2 cents per pound more t l portation costs than southeastern mills, or ' 000. Net marketing disadvantage=$25,000. (many other cost elements account for all percent of total costs. Some loca- ithe Southeast may have slight advant- Texas locations, but Texas would be Eover others. Accurate figures on the t elements would require a city-by-city I n; therefore, they are considered about is, a Texas mill that used all Texas wool g the products feasible for the State and 4 half of these products in the West V. pect to save approximately 600 to 650 ~ dollars as compared with a mill in the it. This would amount to about 6 cents V» or some 3 to 4 percent of the value of t’s products. Qthe other hand, the mill might market roducts in New York with a 2 cent per ‘advantage. It might use large volumes Q wools landed at Texas ports on which ould be no savings. It might have to buy olumes of raW wools and specialty fibers n and synthetic fibers from the East with “transportation costs than the Southeast. ; hese conditions, a plant in Texas probably age only on labor costs as compared with ‘t east. 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No. , Commodity Exchange Administration, USDA, i. 1941. " ......... .., “Typical Electric Bills 1955 — Cities of Population and More.” Federal Power Commis-_ V Washington, D. C. g ........... .., “Typical Residential Electric Bills 1954- 'es of 2,500 Population and More.” Federal Power mission, Washington, D. C. ‘ ........... .., United States Treasury Dept. Bureau of toms Info. Ser. Release S-1092, May 19, 1949; Re- S-3163, Sept. 12, 1952; Release S-3274, Dec. 19, 2; Release H-113, May 6, 1953; Release H-413, Mar. ‘A1954; Cir. Letter No. 2827, Dec. 22, 1952; Cir. Letter g 2469, Dec. 28, 1950. ‘, ........... .., “Wage Differences and Establishment Prac- 17 Labor Markets 1953-54.” Bureau of Labor tistics Bul. N0. 1173, USDL. “V- .......... .., “Wage Structure -— Woolen and Worsted xtiles April-May 1952.” Series 2, No. 90, Bureau , Labor Statistics, USDL. ........... .., “Wool and Wool Top Futures.” Commodity change Authority, USDA, Oct. 29, 1954. i ........ .., “Wool Grease—The Economics of Recovery '_ tilization in the United States.” Marketing Res. "t No. 89, Agri. Marketing Ser., USDA, June 1955. ....... .., “Wool Statistics and Related Data.” Sta- .~ical Bul. No. 142, Agri. Marketing Ser., USDA, pt. 1954. ’. ........... -., “Wool Statistics — Including Mohair and _ er Fibers.” Bureau of Agri. Eco., CS-37, USDA, 49. > ; ............ .., “Woo1ens and Worsteds.” Prepared in Re- "w se to Requests from the Committee on Finances ;the U. S. Senate and the Committee on Ways and cans of the House of Representatives, War Changes Industry Ser. Rpt. No. 29, U. S. Tariff Commission, 49. ‘ State Publications Adkins, W. G., and R. L. Skrabanek, “The Texas Farm Population, 1954.” P. R. 1738, Tex. 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Business Review, Vol. XXVIII, No. 11, “Bureau of Business Res., University of Texas, Austin, Tex., Nov. 1954. Davis, Stanley P., and L. P. Gabbard, “Grading Wool at Shea-ring Pens and Marketing on a Basis of Quality.” P. R. 1363, Tex. Agri. Expt. Sta., College Station, Tex. Apr. 18, 1951. Davis, Stanley P., and L. P. Gabbard, “Quality Price Re- lationship of Graded and Ungraded Wool.” P. R. 1572, Tex. Agri. Expt. Sta., College Station, Tex., 1952. Davis, Stanley P., L. P. Gabbard and Alvin B. Wooten, “Marketing Texas Wool on a Quality Basis.” Bul. 823, Tex. Agri. Expt. Sta., College Station, Tex., Oct. 1955. Escott, Florence, “Why Industry Comes to Texas.” Tex. Business Review, Vol. XXVIII, No. 12, Bureau of "Busi- ness Res., University of Texas, Austin, Tex., Dec. 1954. Fletcher, Hazel M., “Synthetic Fibers and Textiles.” Bul. 300, Agri, Expt. Sta., Kansas State College of Agri- culture and Applied Science, Manhattan, Kans., Apr. 1952. Hamilton, T. 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Sta., Col- lege Station, Tex., Oct. 1945. ...................... .., “Texas General Sanitation Law of 1945,” Texas State Dept. of Health, Austin, Tex. ...... “Texas Labor Market.” (Monthly) Texas Employment Commission, Brown Bldg., Austin, Tex. Tippit, John W., “Recent Developments in Industrial Foundation Activity in Texas.” Supplement No. 1 (Dec. 1955) to Res. Rpt. No. 43, Tex. Eng. Expt. Sta., College Station, Tex. 55 Wood, Noel H., “Cotton Textiles: An Opportunity in Tex- as.” Tex. Business Review, Vol. XXVII, No. 6, Bureau of Business Res_., University of Texas, Austin, Tex. July 1954. 6 ______________________ __, “Wool Preparation and Marketing.” Bul. 316, Agri. Expt. Sta., University of Wyoming, Lara- mie, Wyo., June 1952. Miscellaneous Publications ______________________ __, “Chemurgic Papers.” National Farm Chem- urgic Council. ______________________ ,_, “Distributors of TVA Power.” 1954 An- nual Rpt., 97 Municipal Electric Systems and the 51 Rural Electric Cooperatives, Tenn. Valley Authority, Chattanooga, Tenn., June 30, 1954. ...................... .., “Fringe Benefits 1953.” Eco. Res. Dept., Chamber of Commerce of the U. S., 1954. “Gas Facts - A Statistical Record of the , ____ Industry in 1953.” American Gas Assn., 420 Lexington Ave., New York 17, N. Y. Pritchett, W. C., “The Sheep and Wool Industry in Tex- as.” (PhD Dissertation) University of ‘Virginia, 1948. ______________________ -., “Report on the New England Textile Indus- try.” Committee appointed by the Conference of New England Governors, 1952. Robock, Stefan H., and John M. Peterson, “Facts and Fic- tion about Southern Labor.” (Reprint) Harvard Busi- ness Review, Mar., Apr. 1954. ...................... .., “Shipping Digest.” The National Shipping Weekly of Export Transportation, Shipping Digest, Inc., 8-10 Bridge St., New York 4, N. Y. ______________________ --, “Texas Almanac 1956-57.” Dallas Morning News, Dallas, Texas. ..................... .., “The Development of the Home Sewing Market and a Look at its Future.” Simplicity Pattern Co., Inc., 200 Madison Ave., New York 16, N. Y., Jan. 11, 1955. ______________________ .., “The Houston Port Book.” (Semiannually) Harris County Houston Ship Channel Navigation Dist., P. O. Box 2562, Houston, Tex., Spring 1955. ....................... .., “The Texas Charter of Equal Rights." Dal- las Chamber of Commerce, Dallas, Tex., Oct. 1952. The Wool Bureau Inc. (Releases) 16 West 46th St., New York 36, N. Y. ...................... .., “What New Industrial Jobs Mean to a Com- munity.” Eco. Res. Dept., Chamber of Commerce of the U. S., 1954. Newspapers and Periodicals “American Sheep Breeder.” (Monthly) (Now out of busi- ness). “California Wool Grower.” (Now “California Livestock News”) Calif. ’Wool Growers Assn., 151 Mission St., San Francisco, Calif. ’ “Daily News Record.” (Daily) Fairchild Pub., Inc., 7 East 12th St., New York 3, N. Y. “Fortune.” (Monthly) Time Inc., 540 North Michigan Ave., Chicago 11, Ill. “Industrial Development.” (Bimonthly) Conway Publi- cations, Conway Bldg., North Atlanta 19, Ga. “Look.” (Weekly) Cowles Magazines, Inc., 488 Madison Ave., New York 22, N. Y. “Manufacturers Record.” (Monthly) Manufacturers Re- cord Pub. Co., 109 Market Place, Baltimore 3, Md. “Monthly Business Review.” (Monthly) Federal Reserve Bank of Dallas, Dallas, Tex. “Monthly, Labor Review.” Bureau of Labor St USDL. i “Readers Digest.” (Monthly) Readers Digest Assn Pleasantville, N. 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St., “Boston 10, Mass. ‘ “The Houston Press.” (Daily) The Houston Pre; Houston, Tex. “The National Wool Grower.” (Monthly) 41.4 Pacifi tional Life Bldg., Salt Lake City 1, Utah. “The Sheep and Goat Raiser.” (Monthly), Formerly, Cooperator”, Hotel Cactus Bldg., San Angelo, T “The Wall Street Journal.” (Weekly) Southwest - Dow Jones and Co., Inc., 911 Young St., Dallas “The Wyoming Wool Grower.” _(Monthly) Wyo. i- Growers Assn., McKinley, Wyo. l “Time.” (Weekly) Time, Inc., 540 North Michigan Chicago 11, Ill. ,1. “U. S. News and World Report.” (Weekly) U. S. Pub. Co., 24th and N. St., N. W., Washington 7, _ Foreign Publications “Annual Wool Review.” Winchcombe, Carson L, Phillip St., Sidney, Australia, 1953-54. “Dalgety’s Annual Wool Review for Australia and Zealand.” Dalgety and Co. Limited, 65-68 Lea St., London, EC. 3, England, 1950-51 and 1954-55 “Journal of the Textile Institute.” (Monthly) The Institute, 16 St. Mary’s Parsonage, Manchester, land. . McConnell, H. G., “Income Trends in Wool Gro Quarterly Review of Agri. Eco., Commonwea Australia, Vol. 7 (1); 25-31, Jan. 1954, Canberra tra ia. » ...................... .., “Natural and Man-made Fibers-' view.” Bul. No. 26, 'FAO Commodity Series, h Agri. Organization of the U. N., Rome, Italy, 1954. . “The Pastoral Review and Grazier’s Record.” (M0 The Wool Exchange, 122-138 King St., Melbourne, tralia. ' “The Textile Manufacturer.” (Monthly Periodical) 31 St. West, Manchester 3, England. ‘ ...................... .., “Wool and Wool Textiles—Devaluati Increased British Exports to United States.” " Agri. Cir. FW 4-49, Office of Foreign Agri. Rel USDA, Oct. 21, 1949, Washington, D. C. l ----------- “World Fiber Survey?’ Food and A ganlzation of the U. N., Aug. 1947, Washington,