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UNITED STATES TARIFF COMMISSION
WILTON, BRUSSELS, VELVET, AND TAPESTRY CARPETS AND RUGS
Report to the President (No. TEA-IR-5-64) Under Section 351 (d)(1) of the Trade Expansion Act of 1962
TC Publication 137
Washington, D.C. September 1964
UNITED STATES TARIFF COMMISSION
Ben Dorfman, Chairman
Joseph E. Talbot
Glenn W. Sutton
James W. Culliton
Dan H. Fenn, Jr.
Donn N. Bent, Secretary
Address all communications to
United States Tariff Commission
Washington, D.C. 20436
CONTENTS
Page
Introduction 1 U.S. tariff treatment 2 Recent developments 2 U.S. consumption 3 U.S. producers 4 U.S. production, sales, and inventories 5 U.S. imports 6 Employment and man-hours 4
Prices 7 Appendix . 9
TABLES
1. Machine-woven and machine-tufted pile carpets and rugs: U.S. production, by types, 1957-63 10
2. Wilton and velvet carpets and rugs: U.S. production, imports for consumption, exports of domestic merchandise, and apparent consumption, calendar years 1957-63, fiscal years ending June 30, 1962-64, and January-June of 1962, 1963, and 1964 11
3. Wilton and velvet carpets and rugs: Indexes of U.S.
production, net sales, and inventories, 1957-63- 12 Wilton, Brussels, and velvet or tapestry carpets, rugs, and
mats, and carpets, rugs, and mats of like character or description: U.S. dutiable imports for consumption, by specified sources, calendar years 1959-63 and fiscal years ending June 30, 1962-64 13
5. Indexes of the average number of production and related workers employed and man-hours worked in plants in which 19 U.S. firms produced Wilton and velvet carpets and rugs, 1960-63 14
6. Indexes of wholesale prices in the United States of Wilton and velvet carpets and rugs, and all soft-surface floor
coverings, January and June 1957-64 15
(TC2 8827 )
REPORT TO THE PRESIDENT
U.S. Tariff Commission, September 14, 1964.
To the President:
Introduction
Following an escape-clause investigation by the Tariff
Commission and report to the President under section 7 of the Trade
Agreements Extension Act of 1951, as amended, the President, by
proclamation dated March 19, 1962, 1/ increased the rate of duty
applicable to Wilton, Brussels, velvet, and tapestry carpets, rugs,
and mats, and carpets, rugs, and mats of like character or description
(hereinafter referred to as Wiltons and velvets), effective after
the close of business on April 18, 1962. By proclamation dated
March 27, 1962, 2( the President deferred the effective date of the increased rate to after the close of business on June 17, 1962.
Section 351(d)(1) of the Trade Expansion Act of 1962 (76 Stat.
900) provides that--
So long as any increase in, or imposition of, any duty or other import restriction pursuant to this section or pursuant to section 7 of the Trade Agreements Extension Act of 1951 remains in effect, the Tariff Commission shall keep under review developments with respect to the industry concerned, and shall make annual reports to the President concerning such developments.
This is the second report to the President with respect to
Wiltons and velvets under section 351(d)(1). The material in this
1/ Proclamation No. 3454; 3 CFR, 1962 Supp., p. 33. 2/ Proclamation No. 3458; 3 CFR, 1962 Supp., p. 40.
1
2
report is confined principally to developments that have occurred
since those described in the Commission's first report, made on , ,
September 13, 1963. 1(
U.S. Tariff Treatment
Wilton (including brussels) and velvet (including tapestry)
floor coverings and floor coverings of like character or descriptioi,
. are currently dutiable at the escape-clause rate of 40 percent ad
valorem provided for in item 922.50 of part 2 of the appendix to the
Tariff Schedules of the United States (TSUS). The rate of duty that ,
would apply if it were not for the escape action is 21 percent ad
valorem under item 360.45 of the TSUS; products of designated
Communist-dominated or Communist-controlled countries are dutiable
at 60 percent ad valorem under that item.
Recent Developments
A number of changes have occurred in the trade in Wiltons and
velvets since the Commission published its 1963 report. A. & M.
Karagheusian, Inc., was acquired by J.P. Stevens & Co., Inc., in
1/ For detailed information relating to earlier periods see the following reports:
U.S. Tariff Commission, Wilton, Brussels, Velvet, and Tapestry Carpets and Rugs: Report to the President on Escape-Clause Investi ,
nation No. 7-104 . . TC Publication 28, 1961 (processed); Wilton, Brussels, Velvet, and Tapestry Carpets and Rugs: Report in Response to the President's Request for Information Supplemental to the Report on Escape-Clause Investigation No. 7-104 . . TC Publica- tion 41, 1961 (processed); and Wilton, Brussels, Velvet, and Tapestry Carpets and Rugs: Report to the President (No. TEA-IR5-63) Under Section 351(d)(1) of the Trade Expansion Act of 1962 . . ., TC Publication 107, 1963 (processed).
3
February 1964 as a wholly owned subsidiary, with little change in
management. In early 1964, Archibald Holmes & Son announced the
cessation of its carpet-weaving operations and concentration on the
production of.knitted carpets. Roxbury Carpet Co. announced the
closing of its Wilton carpet plant in Worcester, Mass., effective
after the filling of all current orders, probably by the end of
July 1964. Several producers of Wiltons and velvets announced the
addition or the expansion of tufting facilities.
Commercial sales of soft-surface floor coverings to institutions,
such as hospitals, schools, and libraries, have increased during the
past year. New types of manmade fibers have been developed for
carpet use, and an overall increase in the consumption of manmade
fibers (chiefly nylon and acrylic) in the production of floor
coverings has occurred. The shipments of machine-tufted carpets and
rugs have continued to increase; in 1963 they amounted to 263 million
square yards, a quantity about 17 percent larger than that in .the
previous year (table 1, appendix). The shipments of tufted - carpets
in 1963 were composed of 53 million square yards of carpets 4 by 6
feet and smaller, 34 million square yards of automobile and aircraft
carpeting, and 176 million square yards of carpets larger than 4 by•6
feet.
U.S. Consumption
While U.S. consumption of all types of machine-made pile floor
coveringi has increased in recent years, the annual consumption of
Wiltons and velvets has declined since 1959, when it was 47.4 million
square yards (table 2). By 1963 it had decreased about 37 percent to
30.0 million square yards. During the 1959-63 period U.S. production
declined 30 percent, and imports declined 73 percent. The decline in
production in terms of quantity was considerably greater than that in
imports. Exports have been. negligible for a number of years. The
available data indicate that production, imports, and consumption in
1964 will be substantially below what they were in 1963.
U.S. Producers
After the Archibald Holmes & Son plant in Philadelphia, Pa., and
the Wilton plant of the Roxbury Carpet Co. in Worcester, Mass. closed j
there remained 28 plants, operated by 24 firms, manufacturing Wiltons
or velvets or both. Of these plants, 7 were located in Pennsylvania;
4 in Massachusetts; 3 each in New Jersey and South Carolina; 2 each
in New Hampshire, New York, and North Carolina; and 1 each in
California, Connecticut, Georgia, Maine, and Virginia.
In 1963, 15 of 26 firms producing Wiltons and velvets also
produced machine-tufted carpets and rugs. In that year 26 percent of
the 15 producers 1 aggregate production of soft-surface pile floor
coverings consisted of Wiltons and velvets; 61 percent, of machine-
tufted carpets and rugs; and 13 percent, of other machine-woven and
machine-knitted floor coverings. The corresponding percentages for
the same producers in 1962 were 28, 59, and 13, respectively.
5
U.S. Production, Sales, and Inventories
The total U.S. production of Wiltons and velvets in 1963 was
about 4 percent lower than that in 1962. This decline reflected a
15-percent decrease in the production of Wiltons; production of •
velvets increased about 3 percent. The general trend in the output
of Wiltons and velvets during 1959-63 was downward, and this trend is
continuing (table 2). A comparison of the periods January-JUne 1963
and January-June 1964 shows a decrease of 17 percent, indicating that
the prbduction of Wiltons and velvets in 1964 will be substantially
less than that in 1963 and may be the lowest for any year in nearly
two decades.
Indexes of the production, sales, and inventories of 19 firms
that supplied data for the years 1957-63 (which in the aggregate
accounted for approximately 97 percent of the estimated output of
Wiltons and velvets in 1961-63) are shown in table 3. The lower
production in 1963 as compared with that in 1962 was reflected in a
decrease in the quantity and value of sales; production and sales in
1963 were at the same level as in 1961, the lowest points reached
during the period 1957-63.
U.S. exports of Wiltons and velvets in recent years have been
of minor significance (table 2).
The yearend inventories of Wiltons and velvets in 1963 declined,
as in the preceding 3 years, reaching a low for the-period 1957-63,
although being only slightly less than in 1962.
6
U.S. Imports
U.S. imports of Wiltons and velvets have declined very substan-
tially since reaching a record high, for a calendar year, of 8.2
million square yards in 1961 (table 2). In 1963, imports totaled .
1.9 million square yards, which was 77 percent less than imports in
1961. , This decline is attributable mostly to the increase in the
duty from 21 percent ad valorem to 40 percent ad valorem, which
became effective June 18, 1962. Imports in the.first 6 months of
1964, amounting to 614,000 square yards, indicate that the total for
thei year may be the lowest for any year since 1949, when they totaled
991,000 square yards. The ratio of imports to production has declined
steadily since reaching a peak of 28.7 percent in 1961. The ratio
was 20.1 percent in 1962, 6.5 percent in 1963, and 4.9 percent in
January-June 1964.
Belgium and Japan continued to be the principal sources of
imports in 1963, the former accounting for 69 percent and the latter
accounting for 19 percent of the total in that year (table 4). The
1963 imports from these countries were 63 percent and 81 percent,
respectively, lower than those in 1962.
Employment and Man-Hours
Statistics supplied by the 19 Wilton-and-velvet-producing firms
(whose data were used in the section on production) were used to
compute the indexes of the number of workers employed and-the man-hours
7
worked for the years 1960-63 (table 5). The index for the average
number of production and related workers employed on all products of
these firms decreased from 91 in 1962 (1960-62100) to 88 in 1963, or
by about 3 percent, whereas the man-hours worked on all products in
those years showed no change. The index for man-hours worked on
Wiltons and velvets decreased from 94 in 1962 to 88 in 1963, or by
approximately 6 percent. The production of Wiltons and velvets by
the 19 firms was about 4 percent lower in 1963 than in 1962.
Prices .
Wholesale-price indexes for Wiltons, velvets, and all soft-
surface floor coverings, as reported by the U.S. Bureau of Labor
Statistics, are shown in table 6 for January and June 1957-64.. A
fairly substantial increase in all three indexes occurred from June
1963 to January 1964. The increase reflected largely two price
increases instituted by most producers, one in October 1963 and one
in January 1964, on their wool-carpet lines and on some of their
manmade-fiber-carpet lines. The index for Wiltons rose by 11 percent;
that for velvets, by 8 percent; and that for all soft-surface floor
coverings, by 5 percent. The carpet manufacturers attributed these
increases mainly to increases in the prices of raw materials. From
January 1964 to June 1964 the indexes for Wiltons and velvets did not
change, but the index for all soft-surface floor coverings dropped
from 99 in April 1964 1( to 97 in June 1964, probably reflecting a
1/ Not shown in table 6.
8
substantial decrease in the price of carpet nylon which occurred
early in June. This decrease affected the prices of tufted carpets
,more than the prices of woven carpets.,
9
Appendix
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12
Table 3. --Wilton and velvet carpets and rugs: Indexeris of U.S. production, net sales, and inventories, 1957-63
(1957-6o 100)
: Production Year (quantity) : Net sales : Inventories.
as of Dec. 31 (quantity) :
: Quantity : .. Value
:
. : : :
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1958 : 96 : 98 : 95 : 95 :
1959------- 114 : 112 : 109 : 107
1960 : 88 : 90 : 91 : 94
1961 : 82 : 82 : 82 : 92
1962 : 85 : 86 : 85 : 88
1963 : 82 : 82 : 82 : 87 : : :
Source: Computed from data submitted to the U.S. Tariff ComJ' mission by 19 U.S. firms whose output is estimated to have accounted for approximately 97 percent of the total production of Wilton and velvet carpets and rugs in 1961-63.
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14
Table 5.--Indexes of the average number of production and related workers employed and man-hours worked in plants in Which 19 U.S. firms produced Wilton and velvet carpets and rugs, '1960-63
(196o-62.loo)
1 Year Average number
employed (all products)
Man-hours worked on--
: All products : Wiltons and velvets
1960 : 112 : 109 109
1961 : 97 : 97 • . 97 : : :
1962 : 91 : 94 94
1963 : 88 : 94 88
Source: Computed from data supplied the U.S. Tariff Commission by domestic producers.
15
Table 6.--Indexes of wholesale 1/ prices in the United States of Wilton and velvet carpets and rugs, and all soft-surface floor coverings, January and June 1957-64
( 1957-59= 100 ) Year and
month
' Wiltons : Velvets : All soft-surface floor coverings
1957: : January----: June :
1958: : January : June :
1959: : January : June :
1960: January : June :
1961:
104 104
100 97
95 99
100 102
:
: : : : : : : : :
102 102
102 97
98 101
101 103
• : :
:
:
105 101
102 98
97 98
99 100
January : 99 : 99 : 98 June : 99 98 : 98
1962: : : January : 99 : 95 : 96 June : 97 : 95 : 96
1963: : January : 97 : 92 : 94 June : 97 : 91 : 94
1964: : : January : 108 : 98 : 99 June 2/ : 108 : 98 97
1/ The term "wholesale," as used in the index, refers to sales in large lots at the first (primary market) level of commercial transaction; later transactions at other stages in the distribution cycle are not included.
2/ Preliminary.
Source: Computed fran official statistics of the- • U.S. Bureau of Labor Statistics.