Incidentally, your price fixing is not going to work on a great portion of that, because of the export of foodstuffs that is now causing the price to rise in foods that we are giving to England under the lease-lend plan. That won't come under the price-fixing section.

Dr. LUBIN. But the price-fixing would apply to the civilian consumer, and consequently would have a bearing on what happens to the cost of living and the prices he must pay for his foodstuffs.

Mr. MONRONEY. I think you have got to be realistic about what is going to happen to your civilian machine, and I cannot picture lower labor cost through capacity production.

Dr. LUBIN. What you are doing is shifting your industrial set-up. You are going to get more food, you are going to get more textile products, you are going to get fewer automobiles. In other words, certain areas are being curtailed-you are perfectly correct-through priorities and allocations. But bear in mind that at the same time you are stepping up the output of other industries which had been running at a relatively low level.

Mr. MONRONEY. But that is mostly your heavy industries, who are doing work for defense.

Dr. LUBIN. No; you are stepping up textiles. You are stepping up food.

Mr. MONRONEY. The increase in textiles has been due mostly to clothing the Army and exporting other things under lease-lend.

Dr. LUBIN. But the civilian consumption has grown tremendously. Mr. MONRONEY. That is true, but your shortages are going to be apparent in your civilian supply capacity.

Dr. LUBIN. We have plenty of capacity in the men's clothing industry to make at least 50 or 100 percent more clothes than they now make.

Mr. MONRONEY. Then why have men's clothes gone up? I think they lead all the rest in the index. I see women's clothing on this chart is up 20.2 in wages.

Dr. LUBIN. Those are wages. I am talking about the wool. This is the price of the cloth and the price of the suit [indicating]. They ran away from you.

Mr. MONRONEY. Of course, I do not know how many pounds of wool you have in a wool suit, but it is a rather relatively small portion of the entire cost of the suit.

Dr. LUBIN. The actual cost of manufacturing an Army overcoat I think is $3.50.

Mr. MONRONEY. That is the final process?

Dr. LUBIN. The actual making of the coat.

Mr. MONRONEY. The manufacture of the coat from the finished fabric?

Dr. LUBIN. Yes.

Mr. MONRONEY. But your added value from the start of the wool would probably be considerably more than the original cost of the wool, naturally?

Dr. LUBIN. Yes.

Mr. MONRONEY. And the point I am making is the high level of wool would represent perhaps a dollar or two dollars increase in the raw material cost.

Dr. LUBIN. Frankly, I would not know what proportion of the total cost of a yard of cloth the wool price is; but it is a very important factor. I would say about half of the cost of the cloth is the wool.

Mr. MONRONEY. The point that I keep coming back to is your repeated statement that the Henderson bill does fix wages. My point is that it does not fix them in a realistic approach.

Dr. LUBIN. It does not fix wages. It puts a ceiling on prices which will have an effect upon the level that wages will reach.

Mr. MONRONEY. There is no realistic approach, then. I mean, you do not go to the actual weakness of the wage structure in individual cases. The least organized, perhaps the outstanding, cases of underpayment of wages will probably go on at that disadvantage just the

same.

Dr. LUBIN. But you still leave that free for negotiation; so that in the event the opportunity does arise to adjust inequitable situations, there is freedom to do it.

Mr. MONRONEY. But I think in your testimony yesterday you said that only 10,000,000 out of 30,000,000 workers were organized. In addition to those 10,000,000 what other portion of our workers actually have wages which are relatively stable, such as public employees, county employees, and teachers?

Dr. LUBIN. It would be about 5,000,000.

Mr. MONRONEY. Five million. That would, roughly, leave about 25,000,000 who face a relatively static wage, where there will probably be no greater increase in wages.

Dr. LUBIN. No; for this reason: After all, bear in mind that you are, taking the case of your own area, that your nonunion plants there are paid just as good wages in many instances as the union plants. In other words, the fact that a man is unorganized does not in times like these mean that it gives hin the bargaining power; but it puts him in a much better position than he would otherwise have been in when there were no other opportunities for him and where he had no alternative but to stay where he is at the wage which he is getting.

Mr. MONRONEY. It looks to me, judging from this bill, which ranges from 24 percent down to three-tenths of 1 percent, that your big increases have all come in those affected most vitally by national defense.

Dr. LUBIN. Let us take crude petroleum. It is fairly well organized. The electric light and power is spottily organized, but in most of the cities of the country there is pretty good organization. Printing and publishing is very highly organized.

Now, machine tools, where the average hourly earnings have gone up 12.24, is nowhere near as well organized as printing and publishing. Mr. MONRONEY. Your engine work is another one.

Dr. LUBIN. Boots and shoes is another case in point. There you have a whole large segment of the industry in the West that is not organized.

Mr. MONRONEY. How about women's clothing?

Dr. LUBIN. That is well organized. Cotton goods

Mr. MONRONEY. Is coming into organization pretty fast; is it not? Dr. LUBIN. Yes.

Mr. MONRONEY. It looks to me like the Henderson bill would put a clamp on the weaker segments of our labor and permit those who stand at the bottleneck, those who are in key places in industry, to bring all the factors to bear and go above that ratio that you suggested yesterday, which includes in it the roll of fat that comes from excess profits.

Dr. LUBIN. You see what happens in that case-and this is the experience in most industries-that part of that roll of fat is dished out to a lot of other people in times like these.

Mr. MONRONEY. It will still be dished out largely in executive salaries of the kind that Mr. Gore says carry out the fat in a number of industries. I just cannot see why, if the Henderson bill is so rigid on fixing wage ceilings as you say, why it would not be better to have this provision in the Gore bill.

Dr. LUBIN. I think there is a difference between fixing a wage ceiling and freezing them at a certain level.

Mr. MONRONEY. You are familiar with the labor statistics real wage chart, which, I think, shows 128.7 for June. I think there is a little slipping in July. I do not happen to have that figure. Dr. LUBIN. And a further slipping for August.

Mr. MONRONEY. That was the highest increase in history since the chart has been kept?

Dr. LUBIN. Yes, sir. Since the chart has been kept.

Mr. MONRONEY. The highest in history.

Dr. LUBIN. I think it is based on 1923 to 1925.

Mr. MONRONEY. No. It is based on 1935 to 1939, but it applies in 1914. It was 72.4, and in 1919 it was 83.7. It varies up to this 1929 level of 96 4.

That would illustrate, would it not, Doctor, the relatively good position of the wage earners in regard to what they can obtain?

Dr. LUBIN. Very definitely. But bear in mind that that level is a function of the overtime rate. There is a tremendous amount of overtime going on. I mean, there are plants in the machine-tool industry where men work 60 hours a week.

Mr. MONRONEY. This does not refer to the 60-hour rate.

Dr. LUBIN. NO. That is the weekly earnings. Isn't it? I do not know what table you are referring to, but I imagine

Mr. MONRONEY. This is the real earnings of workers in the manufacturing industries.

Dr LUBIN. I think you will find it is the earnings

Mr. MONRONEY. That is the total hours worked rather than the hourly rate.

Dr. LUBIN. It is the total weekly wage that he finds in his envelope. Mr. MONRONEY. The wage earner is better off than he has ever been before?

Dr. LUPIN. Yes.

Mr. MONRONEY. I cannot see that we would be doing any great injustice if we kept them at that level throughout this emergency period, when we think the whole pillars of our economic structure the going to topple.

Dr. LUBIN. Of course, as I say, bear in mind that the reason for that high figure is that a lot of these people are working 60 hours

a week or 50 or 48 hours. On the other hand, there are a lot of people in this country who are still in a position where their actual real income is below what it was 30 years ago.

Mr. MONRONEY. They are the people whose real income will be from 10 to 20 to 30 percent below if we enact merely a price-fixing bill that does not hold prices, keep prices stable.

Dr. LUBIN. If we assume that any other bill would keep prices stable, I would go along with you on that.

Mr. MONRONEY. But Mr. Henderson on numerous occasions said:

My bill will not hold prices stable. Prices are going to inch up. My bill will slow down inflation, slow down the rising level of prices; but it will not hold them stable.

So we come back to this lower stratum that you talk about, where the worker is in a worse position now, and he is going to be in a continually worsening position.

Dr. LUBIN. I cannot necessarily go along on that point, for this reason: I think that in looking at that picture you have got to realize that, taking these people in the printing and publishing industry, where wages have gone up 2.2 percent, while their actual real wages are down if they do not get more work, but they are getting more work in many instances; some work full time, many work overtime, so that from the standpoint of what they get at the end of the week they are better off than they were in 1939. On the other hand, there are other groups in the industry

Mr. MONRONEY. Do you mean to say that they are in that lower strata that we were talking about-printing and publishing?

Dr. LUBIN. They are in the high strata.

Mr. MONRONEY. They are pretty well off. They may come out with a fairly good wage scale.

Dr. LUBIN. Yes. They are one of the high grades.

Mr. MONRONEY. But the ones who are not organized at all are the ones that are going to suffer from inflation, those whose wages will always lag behind the cost of living as it goes up. It did in the last war and it will this time.

Dr. LUBIN. Of course, that is all based upon the assumption that there will be inflation despite the proposed bill, inflation in a large

measure.

Mr. MONRONEY. I look at the Henderson bill as a weak bill, a bill that cannot prevent an inflationary rise. It will slow it up. That is admitted. A ceiling on 100 or 200 prices in that way will slow down the inching up of these prices, but nevertheless they are, going right

on up.

Dr. LUBIN. I honestly believe that even under Mr. Gore's proposed bill, in view of the adjustments that are permitted and that will have to be made, again you are not going to keep things at a fixed level. There will be even there inching up, as you describe it. Mr. MONRONEY. Perhaps there will be some. It depends on the administration largely, whether it is a hard-boiled administrator, who says, "This is the most serious condition that the country has ever faced, and we expect sacrifices from everybody-business, labor, the farmer, and everybody." That is what the Gore bill is intended to do.

Dr. LUBIN. That is why I like Mr. Gore's preamble. I would like to see that in any bill that is passed.

Mr. GORE. On this question of morale do you not think that that question of morale is one which we must consider in relationship to the whole people? We are in a national effort. Especially must we consider it as relates to these boys in camp, who are only getting $21 a month. It will certainly hurt their morale if they see a wage spiral going into effect.

Mr. MONRONEY. I see your viewpoint.

(Whereupon, after some informal discussion, an adjournment was taken at 11:30 a. m., until the next day, Friday, October 17, 1941, at 10 a. m.)