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Excerpt from Oral History Interview with Gordon Berkstresser III, April 29, 1986. Interview H-0263. Southern Oral History Program Collection (#4007) See Entire Interview >>

Thoughts on American government subsidies for the textile industry

Berkstresser describes the details of United States government subsidies for the textile industry, describing the differences between subsidies for cotton growers and clothing producers. He thinks the system punishes manufacturers, who have to buy cotton at inflated prices but get no government assistance with the prices of their products. He ascribes this disadvantage to a weak lobby and the industry leaders' resistance to accepting the new realities of the market.

Citing this Excerpt

Oral History Interview with Gordon Berkstresser III, April 29, 1986. Interview H-0263. Southern Oral History Program Collection (#4007) in the Southern Oral History Program Collection, Southern Historical Collection, Wilson Library, University of North Carolina at Chapel Hill.

Full Text of the Excerpt

What has been the trend in federal protection? Has there, there has been some, hasn't there, over the last decade of so?
The trend has been…one of the things that I think about it is that it hasn't been well thought through. For example, the government supports an abnormally high price for cotton to the farmer. So that American cotton is over-priced on a world market basis. That's a straight subsidy, but it's a subsidy without any control. Now when the Japanese, for example, subsidize an industry, to rationalize it, for example, like they have done with their synthetic fiber industry, they also exert a certain amount of control to make certain that it gets back into line in a competitive situation. We just keep subsidizing the growing of raw cotton without ever any attempt to bring it back into control. Now when it comes to apparel, on the other end of the spectrum, we don't subsidize directly, but what we do say is O.K., we're going to control the percentage and number of things that can come in. Well, we say that, we put it on the books, but then we promptly ignore it, and everybody else ignores it, so this flood of goods comes in. Everybody laughs at the U.S., we're the laughing stock of the world, when it comes to this, because they know that if they're out of quota on men's shirts and they're producing more men's shirts they just label them handkerchiefs, and—what the hell—send them in, and we won't do anything to them. Or if one country is out of quota, you put another country's label in it. The number of these violations that have been caught, prosecuted and so forth is so low, it's so ridiculous. The punishment doesn't suit the crime. So we have a situation then where the people who are manufacturing the fabric and the garment are paying more for the raw material, the cotton, but not getting any help at the other end. And that's assinine. It's just plain ridiculous. But, again, that's life. Nobody said it was going to be fair. One of the problems that I have, of course, the farm lobby started off years ago when there were a lot of farmers and a lot of votes. That industry has changed from being labor-intensive to being capital-intensive. But they have still kept a good lobby. They still have a lot of power, even though the votes have gone way down. Well, the textile industry is in the process of making this same transition, that agriculture and steel made before. But right now, we still have a lot of votes. A couple of million people work for textiles and apparel, so forth. And we don't use that power at all, or we haven't been. We've started now in the last couple of years. How long we can sustain it, to what degree we can sustain it, and so forth and so forth, but it appears to me now that there are industries that have a lot more power in Congress than the textile industry with a lot smaller constituency of voting people and money for contributions and everything else. It's simply because we haven't been well-organized.
You do think that's changing now though?
Oh, yes. They're starting to listen, but it takes time. It doesn't happen overnight and it doesn't happen in one or two years. It takes decades of intense pressure and work and commitment. I think the people in our industry are maybe now becoming sophisticated enough to see that and are doing it.
Who is setting up lobbying activity?
The American Textile Manufacturers Institute—ATMI, in Washington—and other groups like FFACT—Fiber, Fabric, Apparel, what is it? I've forgotten. It's a group of manufacturers who have gotten together and have pooled resources to get separate lobbying for some protectionist legislation and they did it that way because they wanted to raise money in addition to the money that flows into ATMI. The other groups, the trade groups like the American Apparel Manufacturers Association…just the fact that these operations are located right around D.C. starts to tell you what's happening. Then you have other things like the National Association of Hosery Manufacturers. I just spoke to them down in Charlotte. They're headquartered in Charlotte. They have very little import penetration up to now. When I spoke to them the other day I warned them that it was coming and a lot of them just told me I was nuts. They don't want to hear that. They're not ready yet to commit to going up and having their offices in Washington and being part of a general influence on their government because they are still independent little people—the cult of the individual—around in little towns and they're doing very fine, thank you very much, and I feel like John the Baptist, the voice of one crying in the wilderness with these people. When I got through with my talk, I had a young man with me—I do some consulting work as well—and he says, you know, they really didn't want to hear what you were telling them. I said, I know. What they wanted me to do is come down and tell them they were all great and this was a good convention and wasn't everybody having fun? And I didn't say that. I told them they'd better watch out, they'd better know their enemy, and they'd better start getting prepared. They didn't like that because it frightens them. But, that's what the hell professors are supposed to do, isn't it? We're supposed to develop a position, and say so. So…I did it. They probably won't invite me back next year and that's all right, too, but… So that is what I think is happening to the industry and it's definitely, for segments, at least, of the fiber, textile, apparel industry, the next ten, fifteen years, at least through the end of this century is going to be very critical times, and…