Mr. MATES. We did in those cases; yes.

Mr. HEALEY. What type of work was that?

Mr. MATES. That was on Emergency Relief Administration.
Mr. HEALEY. All right.

Mr. MATES. As I say, the result of that was very gratifying, because that brought out the feature that, instead of merely cutting the factories off and not considering their bids, because they failed to agree with the requirements, which is the way it is done in the Federal Government, the factory is given the opportunity to meet those requirements and is brought on an even level with these other manufacturers, and his prices then would be very much in line; and it is interesting to note the prices quoted on the bids, after all of them were brought on a more or less equal rate. It was particularly noticeable that there was a slight dip upward between the A and B factories, which was directly traceable to the fact that the A factory was a high class factory that just paid a little more than anybody else. That was very noticeable.

I also want to bring out the point that

Mr. DUFFY of New York. May I ask you how long you retained that policy?

Mr. MATES. Up until the time the N. R. A. came into effect. When that came into effect, we made that also a prerequisite.

Mr. DUFFY of New York. How long a period did that cover? Mr. MATES. From November 1932 on up until July of last year. Mr. MICHENER. You had discretion in buying and were not compelled to purchase from the lowest bidder?

Mr. MATES. That is right. The emergency relief board, acting for the Commonwealth, gave the purchasing department a little discretion there. Our bids, of course, were subject to inspection by the auditor general and was controlled that way.

Mr. WALTER. Under the law of Pennsylvania, the State, as well as the political subdivisions-you will have to take my word for that, because I was solicitor for one of the largest counties in the State for a number of years-is obliged to do business with the lowest responsible bidder. How could your board arbitrarily say, "We are going to submit proposals to A, B, and C, because we believe that A, B, and C are doing the things we want them to do, and we will not submit our proposals to X, Y, and Z, because we do not like the manner in which they do business."

Mr. MATES. That may be, as far as regulating the Government purchases was concerned; they would have to be under that set-up, but the emergency relief board, as it was set up by the legislature, had a certain jurisdiction there that permitted a little different set-up. In other words, there was more discretion permitted in the Emergency Relief Administration set-up than there was in the regular Government purchasing.

Mr. HEALEY. Mr. Walter, may I ask you if that is your law, that it must go to the lowest responsible bidder?

Mr. WALTER. Yes.

Mr. MATES. We operated on that basis, also. The bids came in, and they were all awarded to the lowest responsible bidders.

Mr. WALTER. Of course, when the value is less than $500, that is not necessarily so.

Mr. MATES. Yes; in the case of the regular Government purchasing, they can go out in the open market and buy from that standpoint.

Mr. HEALEY. Did you have any difficulty with the administration. the letting of contracts on that basis?

Mr. MATES. NO. The interesting part of that experience was that the manufacturers generally liked it very much. We did have a few smaller manufacturers, when they came in, they did complain about it, but when we explained our procedure to them they were perfectly willing to withdraw, not have their factories investigated, and perfectly willing that we forget they were ever in business. There were relatively few, however.

Our experience was that most of them were very glad to submit to this investigation, after we gave them all the equal right, and withdrew their request for investigation, and they also withdrew their request for the opportunity to bid.

Mr. HEALEY. They eliminated the child labor, and prison or convict labor?

Mr. MATES. Automatically.

Mr. HEALEY. And you had some standard of minimum wage, or maximum hours?

Mr. MATES. That was the point the manufacturers all liked, because it gave them equal opportunity, gave them all a fair competitive basis; and the thing we liked about it, as I said at the outset, was because everything was protected, from the manufacturer's standpoint, and labor got their chance, also.

We had one case, I recall, now, a shoe factory, that we had investigated three times before we finally brought it to the point where we were in position to do business with them, and the last I heard of that factory they were still on the same scale.

Mr. HEALEY. How large a force of investigators was required? Mr. MATES. I am not in a position to speak on that, because that was handled by the department of labor and industry, and I do not know what force they had.

Mr. WALTER. Did the Pennsylvania Manufacturers' Association complain of that situation?

Mr. MATES. We never heard of a complaint from them.

Mr. RAMSEY. That was putting them all on a competitive basis, giving them all an equal chance?

Mr. MATES. Yes; very similar to this.

Mr. HEALEY. Any further questions of Mr. Mates? All right, Mr. Mates, we thank you very much.

Now, we have got to conclude very shortly. There are some here who would make repetitious statements, and, of course, the committee would not be so much interested in merely repetition, and I think perhaps Mr. Gaul might arrange among the proponents who is to be next.

Mr. GAUL. May I suggest that Mr. Fulbright has to leave tonight for Texas and wants to make a short statement, which will not be repetitious. He is not one of our witnesses, but we will be glad to yield to him.

Mr. HEALEY. How long would you take?

58539-ser. 12, pt. 2-36-- -12

Mr. FULBRIGHT. Mr. Chairman, if you will let me have the privilege that some members of the committee have, to extend my remarks, I will be glad to only take 4 or 5 minutes.

STATEMENT OF R. C. FULBRIGHT, HOUSTON, TEX., REPRESENTING THE SOUTHERN PINE ASSOCIATION

Mr. FULERIGHT. Mr. Chairman, my name is R. C. Fulbright. I reside at Houston, Tex. I appear here for the Southern Pine Association, which represents, in general, the southern lumber industry.

I have been intimately associated with that industry and its problems now for 20 years. I want to say, to start with, that we do not employ child labor or convict labor, and there is no home work in our industry. We are not interested in those problems, at all, as far as we are concerned.

Home work undoubtedly is a very bad situation. I think child labor is largely disappearing, whether you pass any law on it or not. Public sentiment has condemned it.

I want to call the attention of the committee to the fact that the same provision which dictates that the low bidder shall get the contract in the case of the Government, applies in the case of all private industry. Business is competitive. You have that same influence generally in all business enterprise.

I have made an analysis of the data which was worked up by, I think, the Department of Labor, in which they examined over 3,500 contractors, and they furnished this committee with a lot of that data. I have made an analysis of that, which I wish to present to you, but will present that in a statement form, rather than discuss it now, Mr. Chairman, and it will bring out, I think, that with the exception of the cotton-garment industry, and two or three industries that represent only a small part of the textile and textileproducts group, there has been absolutely no recession of wages since the N. R. A. shut down. In fact, in many industries, their surveys showed that the increases have been far more than the reductions. That is true in the lumber industry, and it is true in the steel industry. In the steel industry, I might say, the survey showed that one-half of 1 percent of the employees in all branches of that industry have had reductions of wages, and about 1 percent have had increases. This analysis will show that there has been a general maintenance of wages in industry, at the time that the survey was made.

Now, the latest figures have been given out by the National Industrial Conference Board for January, and that report showed an increase of $1.31 over last May in the average weekly compensation of corporations for which examinations were made.

In the case of the lumber industry, we have thousands of small units, portable sawmills, throughout the South, and a great deal of lumber is sold to the Government by people who are wholesalers or brokers, to whom these small lumber mills ship their lumber. They ship it according to directions to the man that is handling their production, who is the man who contracts with the Government. Now, he may or may not have the desire or power to control what wages those people shall pay. There is the opportunity there for the man who does not care to hold himself up to the standards

that are provided in the law, to get by with the contract; whereas the responsible lumber-manufacturing concern, which wants to pay the wages that are prevailing in its section, will be penalized by this law, be penalized in that the other man will go ahead and buy, or bid on it, without the requirements of the law.

Mr. WALTER. He ought to be in favor of it.

Mr. FULBRIGHT. No, sir. The responsible manufacturer who is dealing with the Government has all of his employees in a particular section, and lives up to the prevailing wages in that section. This wholesaler, or this bidding contractor, or whatever you may call him, is getting his lumber from numerous country mills, all through the South, which never did pay any attention to the code. Now, you cannot police it, as you undertook to do under the codes. The lumber industry spent $6.000,000 on their code and they failed. Those conditions are improving. Business conditions have generally improved, and those conditions have greatly improved.

Mr. CITRON. You have come in contact with the Davis-Bacon Act? Mr. FULBRIGHT. Yes; that act provides that the prevailing wage scale, where the work is being done, is the test. In this you will find the standard set by the Department of Labor.

When we had our lumber code up, the Department of Labor representatives came in and opposed it, it presenting a difference as to the minimum wage for the workers in the South and that for the workers in the West, and we simply showed to the code authority that the southern lumber manufacturers could not exist under conditions applicable to the West, because it take two and one-half times as many man-hours to produce a thousand feet of lumber in the South as it does in the West. There are varying conditions through the South. Our experience with the Department of Labor has been that they will not recognize any condition which warranted a differential or difference in different sections of the country.

Mr. CITRON. The Bacon-Davis Act did use the term "the prevail ing rate of wages"; has that worked out all right in the sou hern section and the western section?

Mr. FULBRIGHT. It works all right in the case of a contract to put up a building for the Government, where the Government has a particular contract for the building, and so forth. But when the Government is going out and buying a large amount of lumber, some of which is in the lumber yards, some of which is being supplied to wholesalers, and some of it being supplied by the manufacturer, you have a policing proposition that is going to break down like it did in the N. R. A.

We looked upon the N. R. A. as being something that would be worth a great deal to us, and it failed because of its inability to police. This act is wholly different from the Davis-Bacon Act. There is another point I want to make on that, and that is this: When you put all of your wages on one level, the man who is the most distant, or has the highest freight charges to pay to get to the point where the material shall be supplied, is the man who is going to be shut out.

Mr. WALTER. And that does not hold true always.

Mr. FULBRIGHT. It does on those communities where the freight rate is an important part.

Mr. WALTER. No; I know it is not true, because in the cement business-if you will look at the cement business, you will find that does not hold true.

Mr. FULBRIGHT. In the cement business, you have a multiple basic point system of fixing prices. That is the reason it does not work in the cement business, but a comparable situation is not present in the lumber industry to prevent the rule as to distance-freight charge disability from holding true.

Mr. CITRON. Suppose the proposed legislation was limited to child labor, home work, convict labor-

Mr. FULBRIGHT. We would not have any objection to it.

Mr. CITRON. And to the principal contractor, would you have any objection to it then?

Mr. FULBRIGHT. Well, in regard to the principal contractor, if you limit its application to him alone, then the wholesaler who sits down and orders his lumber from a lot of different little mills away off down in the country is the man who is going to come in and chisel and deprive the legitimate manufacturer of the business.

Mr. CITRON. If it was limited then to child labor, home workand those are the evils that have been mentioned here and applied to industry-you would have no objection?

Mr. FULBRIGHT. That character of regulation is certainly in the public interest, but when you get down to try to fix the standard of wages and hours for industrial concerns, when, even in lumber, they vary in one section of the country so tremendously that you cannot fix one standard, and try to enable them all to continue in business

Mr. CITRON. Suppose the act, instead of trying to permit the Secretary of Labor to set the standard from what she found, the act merely said "prevailing rate of wages", would that be easily set up by your people?

Mr. FULBRIGHT. It would be less objectionable. I do not think it would be objectionable to our association, as such, but it is going to meet with many practical difficulties when you go into the general purchasing of commodities.

As Mr. Connery said, when you are putting up a building you can go right on the ground, and you can find what the prevailing rates of wages are in that spot. But when you are buying lumber from various sections of the country, and other materials, you have an impossible problem then in the way of administration, it seems to me. If it were practical to do it, I think our members would be in favor of doing it.

Mr. CITRON. If it could be worked out in such a way as to amend the Bacon-Davis Act to provide for the prevailing rate of wages. prohibit child labor and convict labor and so on, your association would be for it?

Mr. FULBRIGHT. I would not want to commit the association without putting it up to them. Our lumber manufacturers, themselves, our association, have labored to better conditions and wages and hours and living conditions in our mills in the South. We are working on that all of the time, and we are making progress, and conditions are much better than they were a few years ago. They have been improved even since the code days. The point is, when your business gets better, these conditions will largely right themselves.