In two or three countries that rate has already been reached and is now being slightly exceeded. In other countries it is still below. The cotton textile activities this year are expected to be about 9 percent higher than last year. Mr. PACE. Do you mind being interrupted by these questions? Mr. PACE. There are two or three other questions I would like to ask right along this line. Does this restoration of cotton spinning mean that mills previously converted to synthetic production have now been reconverted back to cotton spinning? Mr. WHITE. That is true to a very considerable extent. The development of staple fiber during a period of some 10 years, during the thirties, made possible the spinning of rayon on cotton textile spinning equipment with a very minimum of adjustment, so that it was comparatively easy to shift from cotton to rayon spinning in Europe prior to the war. After the war it was likewise relatively easy to shift in the same manner back to the spinning of cotton. Mr. PACE. Just one other question: What is the general policy of the occupying authorities, so far as Germany is concerned and in Mr. Hoffman's office, insofar as we are concerned, in permitting the manufacture of synthetic fibers? As I understand it, at a stage in the manufacture it is a high war potential; and what has been the policy in permitting the manufacture of synthetic? Mr. WHITE. I believe the real factors and possibly the controlling factor in the reactivation of rayon production has been the power requirements, the coal requirements. I can speak only in approximate amounts: As to the requirements for coal and other materials required in the manufacture of 1 ton of rayon staple fiber, using high-grade coal such as is found in the Ruhr and Saar, let us say, will be equal to 7,500 B. t. u. per ton or better, making use of methods in common use for the production of rayon; it takes from 6 to 7 tons of coal in the production of 1 ton of rayon fiber. In addition it takes other materials; it takes approximately 1 ton of sulfuric acid; approximately another ton of other chemical constituents and 1 ton of wood pulp. Inasmuch as coal has been one of the limiting factors in Germany that has constituted one of the real deterrents to a reactivation of rayon spinning. As to the formulation of the recovery programs: The various countries participating have been asked to formulate their programs for recovery and to submit them to the Economic Cooperation Administration for revision and for their approval. There is a tendancy to increase the production of synthetic fibers in Europe, perhaps for the same reason that the production in synthetic fibers has been increased in the United States, plus the incentive to produce their raw materials with the minimum requirements for foreign exchange, particularly foreign dollar exchange. I am not aware of any particular policy on the part of the Economic Cooperation Administration at the present time or up to this date on the matter. Mr. PACE. There is no general policy in Mr. Hoffman's office, in the light of the present cotton supply situation and in the light of further recovery to increase the use of cotton rather than to manufacture synthetics? Mr. WHITE. None that I am aware of. The only thing that I think that has a bearing directly upon it is the policy of the ECA to require, to the extent ECA funds are used in the purchase of cotton, that the cotton be purchased in the United States and not purchased off-shore. Mr. PACE. I understand the matter is before Mr. Hoffman, without knowing what they would or would not do, but it does seem to be a field of encouragement in that matter. Mr. POAGE. Mr. Chairman. Mr. PACE. Yes; Mr. Poage. Mr. POAGE. I want to ask a question on this matter: We understood some years ago that it would be the policy of the United States and the other allied nations to prevent Germany from rehabilitating her war potential. Now as I understand it the production of raw cellulose is a big war industry. In other words you cannot produce large quantities of high explosives without this basic cellulose, and that the plants for the production of cellulose for explosives are identical with those for the production of cellulose for rayon, up to a certain point. I realize, of course, that there is a point during the production of cellulose, let us say, to be used for the making of rayon, where the process would differ, but the basic processes are identical both for explosives and rayon. Is that your understanding? Mr. WHITE. That is correct, and upon the cessation of hostilities in Germany the Department of Agriculture brought to the attention of the American occupation authorities that very fact and suggested that raw cotton be used for the import requirements, and which can be and which may be controlled if necessary. The Department of Agriculture offered supplies and did supply a large quantity of cotton out of its own stocks held by Commodity Credit, for the reactivation of the cotton spinning mills in Germany. Some $35,000,000 worth of cotton was supplied, if I remember correctly, and it was used, and the entire account with interest has been repaid to Commodity Credit. The supplying of that cotton made it less necessary than would have been otherwise the reactivation of the basic cellulose plants. And as I indicated before, the shortage of coal has been a deterrent in the reactivation of the rayon industry. Mr. POAGE. Let me ask you this question-and you may not be able to answer it yourself-but I would like you to tell us if you can, whether or not there has been any decision to abandon the original policy of destroying the German war potential industry, in the policy of emphasizing economic recovery, even though the economic recovery would involve a continuation up to a point of some of the war plants. Mr. WHITE. I believe that question could best be answered by the Department of the Army, which is more currently informed on the subject than I. Mr. POAGE. Could you tell the committee who in the Army would be the individual to contact on that subject? Mr. WHITE. Under Secretary Draper I believe would possibly be in the best position. He was General Clay's assistant in Germany and is informed on the German situation. Mr. POAGE. Thank you very much. Mr. PACE. Mr. Andresen. Mr. ANDRESEN. Assuming, Mr. White, what Mr. Poage has had to say, do you know if any of these textile plants were torn down in the program of dismantling industries in Germany? Mr. WHITE. None that I am aware of; but the Department of the Army could answer that more accurately than I possibly could. Mr. ANDRESEN. I was thinking in connection with our responsibility which now is for the entire area: The French, the English and also the other areas. Mr. WHITE. Insofar as I know there has been no removal or dismantling of cotton spinning mills in the American zone, or in Bizonia, or even in the French zone, but I could not answer the question accurately. Mr. ANDRESEN. One other thought: You mentioned that the funds used by the ECA for the purchase of cotton or the extension of credit for cotton for export already took care of the purchase of American cotton. Do you know if any of these ECA funds have been used or credit been extended to buy cotton from other countries like Brazil, Egypt, and India? Mr. WHITE. There has not. There have been requests on the part of participating countries for funds to buy cotton from other sources that customarily supply them cotton. But the Economic Cooperation Administration has neither granted loans nor made direct grants for the purchase of cotton, except they have favorably considered the allotment of funds for the purchase of a small amount of long-staple Peruvian pima, a comparable quality of which has not existed for export in the United States. That, in quantity, has been a very small amount. Dollars, we understand, are required if the cotton is to be purchased in Peru, and favorable consideration has been given for the reason there was not any cotton of a similar quality available for export from the United States, and we considered it desirable for the country to obtain the quality of the cotton needed for its industry. Mr. ANDRESEN. Then cotton has been declared a surplus commodity and, under the regulations of ECA and the law, cotton must be purchased in the United States? Mr. WHITE. It has been so declared by the Secretary of Agriculture. Mr. ANDRESEN. Just one other thing: You mentioned recovery of the textile industry in Europe. Referring particularly to the Marshall countries-the countries that are receiving aid from us will you provide for the record facts and figures showing what it was prior to the war, country by country, and what it is now? Mr. WHITE. I shall be glad to do so. Mr. ANDRESEN. I am asking for the number of spindles in operation and the amount of cotton they consume, and I assume most of the cotton that those countries use, or at least that the Marshall countries use, is United States cotton. Is that correct? Mr. WHITE. I mentioned awhile ago that ordinarily about 60 percent was United States cotton. Mr. ANDRESEN. Is that true now? Mr. WHITE. At the present time, speaking for 1948-49, out of a total consumption of about 6,000,000 bales, the program submitted by the participating countries to ECA was for about 2,500,000 bales. So the percentage would be the percent that 2,500,000 is of 6,000,000. Mr. ANDRESEN. Do we furnish the dollar credits, then, to these countries so that they can buy cotton in other countries? Mr. WHITE. The remainder of the cotton is purchased with other foreign exchange available to the countries, together with any free earned dollars that they may have in their foreign exchange accounts. A very large part of their cotton is imported from the sterling area or other nondollar areas-that is, areas generally considered to be nondollar areas. So a large part of the import requirements is met through the use of currencies other than United States dollars. Mr. ANDRESEN. But you will provide for the record the information I have requested there, making the comparison between prewar and the after-the-war recovery? Mr. WHITE. I shall be glad to do so. Mr. PACE. That is country by country, I understand. Mr. ANDRESEN. Yes. 2 Bales of 478 pounds net, except for running bales for the United States. Year beginning Aug. 1. Preliminary and partially estimated. 5 China includes Manchuria. Pakistan included with India except for 1947-48 and 1948-49. Also included in the figures for all 3 countries is an estimate of noncommercial production. Cotton; Consumption, by countries, for specified years 1. Country -Continued 3 1938-39 3 1945-46 3 1946-47 34 1947-48 34 1948-49 Preliminary and partially estimated. China includes Manchuria. Pakistan included in India except in 1947-48. Data for all 3 countries include estimates for home consumption. Exclude estimates for cotton destroyed. |