ties. Such recognition should lead to the elimination of the causes that force collective bargaining to develop into a tug of war. And with the elimination of these causes, collective bargaining should gradually develop into a mechanism that will release the full brain power of management and workers on our productive processes. When this is done the maximum production of which our productive processes are capable will be realized, and the trend toward lower production and standards of living will be reversed."

Mr. HETZEL. We think that can be done on an industry-wide basis. We think that the steel production can be substantially increased right now, in addition to adding facilities, by the proper scheduling of production in a cooperative manner by the people who know.

But if you are going on with this business of letting orders be slapped into any steel plant, without regard to the general pattern of the industry as a productive unit, then you won't get the most out of it, and we are interested in getting the most out of it.

Miss SUMNER. You say that is being done now. I understood from a person who was interested in getting contracts let to smaller industries that that was not being done now. He said that they were still thinking in terms of putting contracts around in industries in little towns, but he said that that was utterly impossible, as they would find out but had not yet found out, due to the lack of facilities and laboratories, and so forth.

When the suggestion was made that they organize the industry, say the washing-machine industry, or some other industry, for the purpose of having them make some kind of trucks or something else for the Army, it was said they could not do it because of the monopoly laws and the antitrust laws. Have you any comment on that?

Mr. HETZEL. Yes. There was a letter sent by the Attorney General, Mr. Jackson at that time, to John Lord O'Brian, who is General Counsel for the O. P. M., relating to what Mr. Jackson, in charge of antitrust, considered to be the extent to which the industries could have a part in decisions. I think that was a mistake.

It seems to me that the overemphasis of the use of the antitrust laws has been fairly extensive and that it should not be used to stymie effective cooperation in industry to do this job. There is sufficient safeguard in the representation of the public by the Government. Miss SUMNER. I think that is all, Mr. Chairman.

Mr. WILLIAMS (presiding). Mr. Barry?

Mr. BARRY. There is no doubt in my mind that there has been perhaps some rise in the cost of living because of increases in wages, but there is a serious doubt in my mind that wages at any time have caused abnormal rises or increases in prices that could be termed "inflation." Do you agree with that?

Mr. HETZEL. I agree with that.

Mr. BARRY. Now, can you tell me what the membership of the C. I. O., A. F. of L., and other large unionized groups amounts to, just roughly?

Mr. HETZEL. Well, it is generally calculated that there are about 10,000,000 organized workers in the country.

Mr. BARRY. Now, assume that we have legislation in which we control wages. Wouldn't it work out somewhat like this: That the labor leaders would go to the administrator and say that they wanted an increase in wages, and they have to get along with him or persuade him or convince him of the situation? He would have the sole power. An election might come up next year and Barry might be running for

Congress, and he has been a pain in the neck to the administration and the foreign policy, and the administration would like to see him eliminated.

Wouldn't it be possible that the price fixer might be a friend of the President and he might call in the union leaders in the county and explain the situation-and also they would know it without any words and if you are looking for a wage increase in the future it would be a pretty good idea to follow his suggestions?

In other words, could not the situation develop to the point it has developed in Fascist Italy and in Nazi Germany, where once labor gives up its right to bargain collectively and subject itself to the control of the state, from then on the state gets to be its master?

Mr. HETZEL. I think that would be in consequence of wage control. Mr. BARRY. That would be inevitable. That is, if the situation should grow worse, if we are going to continue in a long emergency, there is no assurance that labor will ever get those rights back?

Mr. HETZEL. There is always a danger they won't.

Mr. BARRY. Of course, I do not expect you to commit yourself to all the hypothetical situations I had in my questions, but generally you get my point?

Mr. HETZEL. Well, that was the point that Mr. Murray made in his testimony also.

Mr. BARRY. I emphasize that because I think that is very important. Now, you say in your statement that—

A group of fairly important wage increases took place, beginning about March 1941, following the appearance of great profits in the basic industries. These wage increases were considerable in, among others, the coal, steel, automobile, and electrical radio manufacturing industries. In each of these cases both the Government and the C. I. O. economists have figures which point conclusively to the fact that the wage increases could be made without any increase in prices of the products.

Well, now, do you think over a period of years that that situation has been generally true?

Mr. HETZEL. Yes; I think so. It is true, however, Mr. Barry, that wage increases have frequently been used as the excuse for increasing prices. If you will follow the price and wage history of the steel industry, you will find that the steel industry has on occasion used wage increases as their excuse for increasing prices, but the increase in prices paid several times over the increase in wages.

Mr. BARRY. Now, if that statement and your supplemental statement just now are true, then it would follow that at no time has the increase of wages been a factor bringing about inflation or an abnormal increase in prices?

Mr. HETZEL. I do not know of any economic period when that has been so.

Mr. BARRY. Well, the purpose of this legislation is to control inflation. If that is true, then I cannot see any particular point in trying to control labor.

Mr. HETZEL. I agree.

Mr. BARRY. Because I feel that monopoly, profiteering, hoarding, and fiscal policies are the main things that bring about inflation. Mr. HETZEL. Yes.

Mr. BARRY. There is no doubt in my mind that increases in wages are due to increases in prices. I do not think there has been an ab

normal increase. I think the effect of trying to keep prices down by stopping increase in wages would be far offset in the interest of this country by the surrender of 10,000,000 organized people's rights. Is that in agreement with your point?

Mr. HETZEL. Yes.

Mr. CRAWFORD. You now think that the power to bid against each other is one of the greatest contributors to inflation, don't you? You did not mention that.

Mr. BARRY. The power of whom?

Mr. CRAWFORD. Of the people who have money to spend.

Mr. BARRY. The power to bid against each other?

Mr. CRAWFORD. Yes; in a declining volume of consumers' goods. Mr. BARRY. Where there is a scarcity that, of course, would happen. Mr. CRAWFORD. You mentioned the fact that certain things mostly contributed to inflation, and you left this one out

Mr. BARRY. There is no question that a scarcity will contribute to a rise in prices. I did not mean to include everything. That was just an extemporaneous statement. I accept the addition.

Mr. WILLIAMS (presiding). Are you finished, Mr. Barry?

Mr. BARRY. Yes, sir.

Mr. WILLIAMS. Í am inserting in the record a statement by Dr. Mildred B. Northrop.

STATEMENT BY DR. MILDRED B. NORTHROP, ASSOCIATE PROFESSOR OF ECONOMICS, BRYN MAWR COLLEGE, AND REPRESENTATIVE OF THE AMERICAN ASSOCIATION OF UNIVERSITY WOMEN

Dr. NORTHROP. I am here as a representative of the American Association of University Women to speak from the point of view of American consumers in support of H. R. 5479, the Emergency Price Control Act of 1941. The biennial convention of the association, meeting in Cincinnati on May 8, 1941, foresaw the trend toward inflation and went on record to support legislation in the interest of the consumer, including among other things, consumer protection as part of the emergency program of national defense. The bill now under consideration by the Congress clearly falls within the meaning and the intent of the action taken at that convention.

The American Association of University Women is a national organization of 72,000 college-trained women, organized in more than 900 local branches. For many years the branches have been actively studying consumer problems and have been taking an increasingly intelligent interest in local, State, and national legislation which immediately affects their interests.

Since American women spend the largest share of the family income, they speak with authority in any situation which forces them to spend a fixed or a lagging income in markets where prices are rapidly rising. Inflation is not an academic question to us. It is a question of stretching the family budget to cover the myriad of essentials and never to know with certainty whether or not Johnny's shoes must be given up because the baby's milk has suddenly become a frightening item in our daily expenditure. The facts of present price increases are not in dispute in these hearings. The meaning of that

price rise to the morale and the sense of security of American consumers needs further emphasis.

When I speak for 72,000 consumers of America, I should like to make it perfectly clear that our support of H. R. 5479 rests upon our belief that it is one plank-and one essential plank-in the broader task of the control of inflation. As we shift our economy to a military basis, the withdrawal of raw materials, labor, and capital from the consumergoods industries to the war industries must proceed at a constantly increasing pace. With the basic scarcity which will ensue we are familiar. There will be less for us to spend our money on and in the dilemma before us we have two choices: (1) Our income can be dissipated by spending more and more for fewer and fewer commodities, or, (2) we can spend in a controlled market and our excess income can be taxed or saved. We prefer the second choice. We do not consider it equitable to permit the constantly increasing consumer spending power which will result from the acceleration of Government spending for war goods to be eaten away by spiraling prices. We should like to be given the opportunity to conserve a part of our income for expenditure in the post-emergency period.

While we are asking the Congress to make a determined legislative attack upon the problem of inflation, through the passage of the measure under discussion, we do recognize that direct control over prices as provided for in H. R. 5479 will not by itself accomplish the entire task. In my opinion, the Congress should consider also (1) the extension of credit control to permit the Federal Reserve Board to "mop up" the excess reserves which will still be left as a potential threat after the new reserve requirements go into effect on November 1, and to empower the Federal Reserve banks to ration credit to consumer-goods industries; (2) the extension of taxation to increase the pay-as-you-go revenue with particular reference to the further taxation of war profits; (3) the extension of the existing social-security laws to increase the number of beneficiaries and, if necessary, to provide forced savings which can be released quickly when the emergency is over. At some future time it may be necessary to consider the question of wage control. If, however, the Congress passes the present bill and broadens its program so as to gain control over the rising cost of living, the vicious spiral of higher prices, therefore higher wage demands, therefore higher prices, will be broken. Also, if the Congress is determined to tax war profits, the second main reason for increased wage demands will be removed. Since wage control and price control function within different administrative mechanisms, it seems clear that the pricecontrol bill should not be delayed for discussion of the wage-cost controversy.

Our detailed study of the emergency price control bill of 1941 leads us to ask for its immediate passage without modification. Consumers would, of course, prefer a more flexible base for rent control and agricultural commodities. It seems more important to us, however, to accept compromise under the urgency for immediate action.

The bill under consideration provides for a single, final authority. We are all accustomed to the principle of delegated power and we do not fear it. It is the way in which a democratic state functions. We delegate our responsibility to the Congress, the Congress in turn delegates to the President, who passes on his administrative power to

an individual or a group of individuals as the Congress provides. As we each play our role in the democratic process we are aware of the limit and the full extent of our power. We watch over its use, we correct its abuse.

Just as time is of the essence in passing the bill, so immediate, quick action in making price decisions is the most important aspect of its administration. Anything which clutters or delays price control decisions must be avoided. The organization for the efficient administration of price ceilings on individual commodities is already in existence. The grant of authorty to enforce existing decisions and to extend such controls to other commodities as provided for in H. R. 5479 seems to be the most simple and speedy method of attaining the purpose of the bill.

The American Association of University Women has a membership of women eager and willing to bear their full share of the burdens of the present emergency. We recognize the hardships before us and we are not afraid. That which seems to us essentially fair, we wholeheartedly endorse. We, therefore, urge the immediate passage of the emergency price control bill of 1941.

Mr. WILLIAMS. We will try to meet sharply at 10 o'clock tomorrow morning and go as long as we can.

(Thereupon, at 5 p. m., an adjournment was taken until tomorrow, Tuesday, October 7, 1941, at 10 a. m.)