Now one other fact: The witness who appeared for the American Federation of Labor gave these figures. I cannot vouch for their accuracy. I am just citing them.

He said that since 1938 our national income has increased 246 percent; personal income 222 percent; bank deposits, 172 percent; and corporate profits, 834 percent. While he pointed out that the 75 cent increase would be an 87 percent increase in wages.

Mr. JANSEN. Is that 1936?

Senator PEPPER. 1938 when the law was passed.

The first observation I wanted to make was these figures tend to show that raising the minimum wage for the lowest income group contributes to the general prosperity. That is, it gives them a greater purchasing power.

The second thing is that it may be that is one of the ways we can prevent a decline in the national income or in the national product. I have heard some distinguished columnists say that if we do not get more money into the hands of the masses of the people, we are likely to have a serious decline in the general level of prosperity.

So I just wanted to make these observations to you to let you know that while the first motive we have declared in this bill is to provide for increasing the health and well-being of the people in the lowest income groups, which is certainly a matter of vital interest to the Nation, because I suspect you will find most of the men rejected during the war by selective service in that group, but in addition to that we also have in mind that this may help the very business interests that you primarily represent and speak for.

That is not intended to be a detriment to the business of this country but rather aid to the prosperity of the country.

I just wanted to give you some figures that you might not specifically have had.

My aide has just called my attention to the fact, as shown here, that:

There is a significant relationship between income and physical fitness, as indicated by records of selective service, and per capita income payments by States. The failings of our economic and social organization are reflected in selective service rejection rates. Table 11 shows that in general States with the lower per capita incomes are those with the higher rejection rates.

Then it goes on to name the States.

Mr. JANSEN. May I reiterate that we are in complete accord with a minimum wage which will be sufficient to maintain health and decency on the part of the individual employee, that the only thing we do object to and do not agree with is the premise that increasing wages automatically increases prosperity or produces prosperity.

The chamber goes contrary to that 100 percent, and there are plenty of economists that will back our point of view, and we believe it is production efficiency that brought our country where it is now and that is what we need to do: produce in order to raise ourselves in our value to our community and to the country.

Senator PEPPER. We all agree that we have to have production. However, we had a good example during the depression of production without a purchaser, when factories were idle because they didn't have buyers.

What I was interested in is, if this gentleman is right in saying that corporate profits increased 844 percent, I am thinking about whether there wouldn't be a general advantage, whether that perhaps comes a

time when a larger share of the profits should go into the purchasing power of the country through more wages for the worker rather than new capital investment. I realize you can do either one to the extreme. You have got to have an adequate plant capacity, of

course.

But in cases where you can pump some of this profit down through wages into purchasing power, it would seem to me that, if I have done within reason, it would also be a salutary policy.

Mr. JANSEN. Our President has instructed one of our major industries to either get busy on capital expenditures or the Government will do it for them.

Senator PEPPER. I say we have to have adequate plant equipment, and I think the President was eminently correct in his recommendation about steel because certainly the Nation is very vitally dependent upon steel, and if we don't get enough under the present system, we need to increase it by other means.

Mr. JANSEN. As to the statistics on corporate profits since 1938, I would be happy if it were the case. I doubt its accuracy.

Senator WITHERS. I would like to make this observation: I remember several years ago when the automobile made its advent, the concensus of the economists, a great many of them, was that it would eventually bankrupt the country. But we lived to see the country adjust itself to the automobile very nicely, to the surprise of a great many good businessmen. I don't know how much they knew about economics.

I can remember when the laborer used to walk to work. You never saw an automobile belonging to a laborer around a plant. Now you go to these plants and they are covered with automobiles belonging to laborers.

Mr. JANSEN. Surely.

Senator WITHERS. The country adjusted itself to that unnatural, unseemly advent.

Mr. JANSEN. That produced so many additional industries such as garages, repair shops, what have you, throughout the country that it has been one of the greatest booms to our whole economy.

Senator WITHERS. It seemed to operate in reverse to what was anticipated.

Mr. JANSEN. A few people lost their jobs at the time.

Senator WITHERS. I was somewhat pessimistic myself.

Senator THOMAS. It was pretty tough on the manufacturers of buggy whips.

Senator WITHERS. And the manufacturer of buggies.

Mr. JANSEN. Yes; it was tough on him and on the wagon manufacturers, unless, like Studebaker, he went to manufacturing automobiles.

Senator WITHERS. The new industry so far exceeded the old that it averaged it.

Senator THOMAS. You will have to forgive me. I have generally been on the firing line for such absolute new things that the witnesses always had the advantage because they had the statistics and I only had the theory. But for once in my lifetime here in the Senate I can talk about my own baby. It apparently makes one a little bit huffy when somebody begins saying things about his baby.

Senator WITHERS. More especially grandparents.

Senator PEPPER. Mr. Jansen, I thought you might be interested in the statement of Mr. McComb, the Wage and Hour Administrator, made before the House committee, which appears at page 107 of the House hearings. This is the testimony:

Mr. KEARNS. Then do you anticipate as Administrator that once this minimum wage is established, you will have a proportionate increase in demand by the skilled laborers?

Mr. McCOMB. No. I said yesterday afternoon that I had experience a long time in setting wages in the Walsh-Healey law and that that had been often said that if you increase this minimum prevailing wage rate, which is required under that law, then you must increase all the way up. That has not proved to be so. We have made studies, we can submit figures to you to show that that is not so. That is a contention often made, but it does not work out that way.

Mr. JANSEN. We still feel we are right.

Senator WITHERS. I have a simple idea that the more you can improve the relationships between labor and management the less law you need. Am I right about that?

Mr. JANSEN. I concur on that, if it is done naturally and properly. Senator WITHERS. I have seen in my life that the better relationships can be, the more interested the employer is in the employee; it creates a mutuality on the part of the employee and makes him appreciative.

Mr. JANSEN. In my company we have 30 agreements with 11 different national unions.

Senator WITHERS. I used to operate a little land and I made a point to pick a good man and made that man own a farm before I turned him loose. It was profitable to him as well as to myself. That made me feel if the interest in each other was mutual, we could get both to profit by it. If an employer could build up relations with his employees in order to be on friendly terms, enough so that the employee would take an interest in the employer's affairs and the employer take an interest in the employee's affairs, they would both be better off.

Mr. JANSEN. That should come through sincerity rather than through legislation.

Senator WITHERS. I think a lot of it should.

Senator PEPPER. I have just one other figure for the record. I have before me the Economic Indicator of March 1949 put out by the Joint Committee on the Economic Report. This shows that corporate profits after taxes for 1948 were 19.7 billion dollars, and my assistant tells me that from the same data, the same source material, corporate profits in 1938, the year of the wage-and-hour law, were $2,300,000,000.

If he is correct with that 2.3 figure, this gentleman was about right with his percentage of 844 percent increase in corporate profits since 1938.

Mr. JANSEN. I didn't bring statistics with me to controvert that information, Senator.

Senator PEPPER. Thank you, Mr. Jansen. We appreciate your coming.

The next witness is Mr. Clarence Mitchell, labor secretary, National Association for the Advancement of Colored People. Mr. Mitchell.

STATEMENT OF CLARENCE MITCHELL, LABOR SECRETARY, NATIONAL ASSOCIATION FOR THE ADVANCEMENT OF COLORED PEOPLE

Mr. MITCHELL. Mr. Chairman, Senator Withers, I am not going to read this statement. I received your telegram indicating that we were to comment on its contents. I would like to file it for the record.

Senator PEPPER. Your statement will be carried in full in the record.

(The statement referred to is as follows:)

STATEMENT OF CLARENCE MITCHELL, LABOR SECRETARY FOR THE NATIONAL ASSOCIATION FOR THE ADVANCEMENT OF COLORED PEOPLE, BEFORE THE SENATE SUBCOMMITTEE ON FAIR LABOR STANDARDS ACT AMENDMENTS, APRIL 12, 1949

In all of the State, regional, and national conferences which the National Association for the Advancement of Colored People has held in recent years, there has been a strong and continuing demand for the inclusion of agricultural workers in the Fair Labor Standards Act.

Colored wage earners on farms constitute one-tenth of the total working force of the colored population in the United States. This group of wage earners in agriculture does not include the colored persons who are farmers, farm managers, and unpaid family worker; on farms. The majority of them are in the Southern States and they are a large part of the migratory labor force in agriculture. Another 150,000 colored persons work in seasonal industries which are excluded from the 40 hour week protection of the present law and will continue to be excluded under S. 653.

Here again,

There are a million colored children who live and work on farms. the overwhelming majority of them are in the South, but many move with their parents up and down the country harvesting the Nation's crops. Under the present law, these children are not protected from hazardous work. S. 653 offers some small protection to children in agriculture during the "school hours of the school district" in which they live, but it prevents the Secretary of Labor from protecting the same children against hazardous work after school hours. It is well known that in many farming areas, the school terms are shortened to have children released at the time they are needed for work on farms. In March of 1945, there were approximately 156,000 children under the age of 18 years who were employed in agriculture for wages. Ten percent of these children were under 14. These figures do not include the so-called crew workers who go with their parents to harvest the crops as part of the great migratory labor force in agriculture. Unpublished sample estimates of the Bureau of the Census show that in October 1948 between 50,000 and 100,000 children, 14 or 15 years of age, were employed for wages in agriculture during the school months. There are, of course, thousands of other children below 14 who are not included in these estimates. What kind of a future are we offering to these young people when we place them outside this law? What kind of citizens will they be if we do not offer to them the bare minimum safeguards which we give to other children?

Our half million members in 1,600 branches throughout the country were shocked and angered when the opening battle for the President's civil rights program was lost in the Eighty-first Congress. They had further cause for concern when the labor bill, which was reported out by committees in the House and Senate, contained no protective clauses to guard against unfair racial policies. This bill before your committee, S. 653, is a new blow to the high hopes we held when the new Congress convened in January because it is silent on coverage for occupations in which so many colored persons are employed.

We know that there is a pressing need for a new wage floor for all workers. We wish to give our full support to those who have sponsored this legislation and other bills which are intended to benefit the great majority of the American people who work for a living. However, we have not yet seen a store in which a father may purchase clothes for his children at a cheaper rate just because he is a farm worker or engaged in a seasonal occupation. We know of no doctors who reduce their fees because the patients who visit them work on farms instead of in factories.

We assert that if it is wrong for children to carry heavy loads, work under hazardous conditions, and have long hours in industry, it is also wrong in agriculture. We ask, therefore, that S. 653 be amended to include the following things:

1. All persons working for a wage in agriculture be included in this legislation. 2. Those workers in seasonal industries, such as canning, tobacco, cotton, and oils, be covered by the 40-hour week.

3. The Secretary of Labor be given the same responsibilities to safeguard the welfare of children in agriculture as he has for the children in industry.

Our testimony has stressed the role of colored persons in agriculture and seasonal industry. Much of the neglect of this part of our working is because it is composed of unorganized citizens and the members of minority groups. However, we would be opposed to this kind of neglect even if no colored persons were involved. We condemn the exploitation of Mexicans, Indians, and any other kind of people who work in agriculture.

We remind you gentlemen that during the war there were many appeals for agricultural workers. Our Government imported citizens of foreign countries who enjoyed wage protection and living conditions which, in many instances, were superior to those offered our own citizens. We cannot expect intelligent and useful people to continue to work on farms if they do not receive the same consideration of workers in industry. At the height of the manpower shortage in the State of Maryland during the war, there was a great campaign to recruit persons to work on the Eastern Shore of the State because the crops were spoiling in the fields. Many distinguished citizens of all races concentrated on an appeal to colored persons living in Baltimore to help save the crops. After the use of much newsprint, many windy orations, and considerable fanfare, the day came when all of those who were to go to the Eastern Shore to harvest the crops were supposed to report to an employment office. The recruiters were on hand: the transportation was available, and those who had charge of the drive were standing in the wings waiting for the photographers. In response to all of the effort made, there was just one man who reported and he had a wooden leg. He said he was just seeking information. I believe that this story could be told of almost any section of the United States. The only reason why agricultural workers remained in certain areas of the South during the war was because labor recruiters were forcibly restrained from taking them out to work in industry.

It is blind, foolish waste of our human resources to continue this gross neglect of those who work in the vital field of agriculture. We wish to remind the members. of this committee that farmers enjoy some of the highest incomes they have ever had. It is not difficult to obtain the passage of legislation which will benefit owners of farms, but there is fierce opposition to benefits for those who earn their wages on farms, and they are just as vital to our economy as the owners.

In the seasonal industries, we are advised by unions representing employees that experiments with the 40-hour week and fair wages fixed by contract have worked out with great success. There is no record of anyone going out of business just because he agreed to treat his employees with the same consideration given workers in other types of plants. Some of you gentlemen who sit on this committee have always been in the front ranks of social progress even when it was most unpopular to take a stand for what you believed to be right. Through the years, a grest many people have come to see the wisdom of your position. We ask now that you again take the leadership in writing into this legislation the kind of protection which will give your workers in agriculture and seasonal industry the same protection that you seek to obtain for those who work in industry.

Mr. MITCHELL. I would like to comment briefly on the contents of my statement. Before I do so, I would like to ask permission of you gentlemen also to file an additional statement on a matter which I understand came up yesterday on inquiry from Senator Donnell of Missouri as to whether it would be advisable to amend, I think it was, section 8 (c) of this bill to add a provision of the words "race, racial origin, or creed" in addition to "age and sex" in line 8 of page 22.

We would like to say for the record that we certainly want in all legislation adequate protection, but we wouldn't want to be in the position of advocating something that is merely the addition of some words which would not accomplish any useful purpose.