9. Section 6 authorizes the Secretary of Labor to create in the Department of Labor a unit for administering this act. Section 7 authorizes the Secretary of Labor or his representative to hold hearings and to require the attendance of witnesses and the production of evidence under oath at such hearings, upon his own motion or on complaint of violation of an aforesaid agreement. It provides that the Secretary shall make findings of fact after notice and hearing, which, if supported by evidence, shall be conclusive upon the courts, and it empowers the Secretary to make such decisions based upon findings of fact as are deemed necessary to enforce this act. Section 8 authorizes the Secretary of Labor to make exceptions respecting minimum rates of pay and maximum hours of labor in specific cases or otherwise under this act whenever such action shall be recommended by an agency of the United States and when justice or public interest will be served thereby. This section also provides that upon the joint recommendation of the governmental agency and the contractor, the Secretary may modify the terms of an existing contract respecting minimum rates of pay and maximum hours of labor as may be found necessary and proper in the public interest or to prevent injustice or undue hardship. It further specifies that the Secretary may provide reasonable limitations and may make rules and regulations allowing reasonable variations, tolerances, and exemptions to and from any or all provisions of this act or the extent of the application of this act to contractors, etc. 10. Section 9 stipulates that the minimum wages and maximum hours specified in any proposal or contract shall be determined by the Secretary of Labor; provided, however, that minimum wages fixed under this act shall be such wages as are fairly and reasonably commensurate with the value of the service or class of service rendered. This section then goes on to provide that in establishing a minimum wage for any service or class of service under this act the Secretary without being bound by any technical rules of evidence or procedure (1) may take into account all relevant circumstances affecting the value of the service or class of service rendered, (2) may be guided by like considerations as would guide a court in a suit for the reasonable value of services rendered where services are rendered at the request of an employer without contract as to the amount of the wage to be paid, and (3) may consider the wages paid for work of like or comparable character by employees who voluntarily maintain minimum fair-wage standards. This section next provides that in establishing maximum hours the Secretary without being bound by any technical rules of evidence or procedure may take into account (1) the prevailing weekly total of hours for such class of service in 1934, (2) the health and safety of employees, (3) the amount of unemployment in the particular industries, and (4) the effect of excessive hours of labor upon the quality of goods and services furnished the United States: Provided, That the Secretary shall set a rate for any overtime in excess of the maximum hours designated in the invitation to bid, which rate shall be not less than one and one-half times the basic hourly rate received by the employee affected. 11. Section 13 provides that this act shall not apply (a) to agricultural or farm products processed for first sale by the original producer; (b) to contracts made by the Secretary of Agriculture for the purchase of agricultural commodities or the products thereof; and (c) to common carriers subject to the Interstate Commerce Act and the Railway Labor Act. 12. Section 15 provides that this act shall apply to all contracts entered into pursuant to invitations for bids issued on or after 30 days from the effective date of this act. D 13. It is clear from the foregoing statement that the Healey bill improvingly revises the Walsh bill in some important respects, for it exempts contracts amounting to less than $2,000, and it deletes the requirement as to N. R. A. and P. R. A. wages and hours. Furthermore, it excludes Government loans and grants to which the Walsh bill also applies. 14. But it is also clear that the Healey bill is fundamentally the same as the Walsh bill, for it has the same application to Government purchase contracts, and its basic purpose and effect are likewise to regulate the hours and wages of local manufacture; and to impose upon manufacturing industry a code of minimum wages and maximum hours independently and conclusively fixed by the Government acting through an administrative officer. The officer selected is the Secretary of Labor, and his power in the circumstances is a broad discretionary one. No one knows what minimum wages and maximum hours he will fix under this law; he has a practically free hand in fixing such wages and hours thereunder; and there is nothing to stop him, for example, from establishing a workweek of 30 hours or less. E 15. Pharmaceutical manufacturers are necessarily interested in this bill, for they sell what the Government must buy to a substantial extent. Hence many of them sell to the Government; and their aggregate Government sales are large. 16. Pharmaceutical manufacturers disapprove employment conditions which are unjust or uneconomic or which are for any reason contrary to the public health and welfare. They oppose unduly low wages, excessive work hours, and child labor. And as a rule they now voluntarily adhere to the standards of minimum wages and maximum hours prescribed under the recovery act, which standards the Government approved as just and reasonable in the circumstances. 17. Pharmaceutical manufacturers support valid legislation effective duly to protect the Government in purchasing its necessary supplies. But the difficulty with this bill is that it does not enact such legislation. F. 18. Manifestly the first question presented by this bill is whether it is constitutional. And in our opinion it is not. 19. This bill is unconstitutional, first, because it delegates legislative power to the Secretary of Labor. (See the Panama Refining and Schechter cases.) For this bill does not itself fix the minimum wages and maximum hours it establishes. Rather it empowers the Secretary of Labor to fix them. And his power to fix them is practically subject to no restriction other than his own unfettered discretion. It is no answer to say that section 9 prescribes standards restricting the Secretary's administrative action in fixing such wages and hours. For (a) these so-called "standards" are not true legal standards of administrative action, because they are too general and vague; (b) the Secretary's compliance with them is optional, wherefore he may ignore them; (c) even if they are true legal standards, the fact remains that section 8 gives the Secretary an unrestricted power to fix such wages and hours. And it cannot be successfully argued that the law enacted by this bill is not subject to the express constitutional provision that all legislative power is vested in Congress alone. 20. This bill is unconsitutional, second, because it is practically purposed and effective to regulate local manufacture within a State. Such manufacture is not interstate commerce; and Congress has no constitutional power directly to regulate it. (See the Hammer and Schechter cases.) In short, this is much more than a Government purchase contract bill. For it is also a bill to use such contracts as a device for Federal regulation of a subject constitutionally reserved to the States. And such a law cannot stand, as the Hoosac case establishes. It is true, of course, that Congress is constitutionally empowered to enact a law prescribing conditions of a Government purchase contract. But it is also true that this is a limited power. The first limitation is that the conditions must have a reasonable relation to the purpose of such a law, which is to safeguard the Government in its purchase of necessary supplies. And a condition of minimum wages and maximum hours in manufacture is demonstrably not within this category. The second limitation is that these conditions cannot be used as a scheme to accomplish an unconditional end and thus to circumvent the constitution. Which is precisely the situation as to the condition under consideration. G. 21. But aside from any constitutional question this bill is subject to the practical objection to a Federal law imposing upon manufacturing industry a code of minimum wages and maximum hours independently and conclusively fixed by the Government acting through an administrative officer exercising his own unfettered discretion. We oppose such a Federal law, as wrong in principle and unsound in public policy. We believe that such a broad law cannot be duly administered, consistently with the fundamental economic and equitable' considerations underlying it; and that it cannot be duly enforced, in its practical conception. And such a law is certain to create a vast bureaucratic organization, with all that it implies in an invidious sense and against which the N. R. A. experience forcefully argues. 22. This bill is also subject to the objection that the law it enacts will be unfair to the patriotic and conscientious manufacturers who voluntarily come under it, because and to the extent they will be exposed to competition by outside manufacturers who sell at a lower cost accordingly. 23. This bill is further subject to other important objections, including the following: (a) It is inequitable to principal contractors with respect to subcontracts beyond their control; (b) it vests in the Secretary of Labor inequitable administrative power as to compelling the attendance of witnesses and making conclusive findings of facts; and (c) it does not equally apply to Government competition with private business. H. 24. It has been suggested that the appropriate remedial legislation here is that duly defining the term "responsible bidder", whereby it includes the element of fair dealing. We believe that this term can be reasonably defined in such a way as to assure adequate protection of Government purchases and to avoid the objections presented by this bill. Therefore, this suggestion should receive due consideration. 25. Having in mind the fact that the Government must purchase its necessary supplies and also the fact that they are purchased upon a voluntary sale basis, the conclusion follows that it is not in the public interest to enact legislation which is unduly preventive of such sales. As a rule pharmaceutical manufacturers can practically operate only upon the basis of a single standard of employment conditions. And they cannot accept any standard of such conditions which is uneconomic or effective arbitrarily to enhance the prices of their products essential to the consuming public. CHARLES WESLEY DUNN, General Counsel. STATEMENT FILED BY NATIONAL BOARD YOUNG WOMEN'S CHRISTIAN ASSOCIATIONS OF THE UNITED STATES OF AMERICA MARCH 11, 1936. To the Committee on the Judiciary, House Office Building, Washington, D. C.: The National Board of the Young Women's Christian Associations, through its Public Affairs Committee, wishes to record its support of the principle embodied in the Walsh-Healey bill for the maintenance of proper standards of wages and of hours of work in the giving of governmental contracts. The official program of the national Young Women's Christian Association includes the item "to work for minimum wage and for limitation of hours of work." Our position on this matter comes from actual experience of our membership. Our constituency numbers many thousands of young women working in industry and in business; 211,000 of these are in organized clubs which carry on regular education as to working conditions in the United States, and particularly in their own State. They know the advantages which accrue from proper regulation of hours and wages. Because of the extensive business which of necessity our Federal Government must carry on, it is probable that many of our members work in establishments to which Government contracts are given. The Government in its own business practices should be an example for private industry in the maintenance of proper working standards. We wish to record with you our hope that legislation will be enacted at this session which will make it obligatory for firms receiving Government contracts to maintain the standards recommended by the Department of Labor as to wages and hours and the elimination of child labor. MRS. KENDALL EMERSON, Chairman Public Affairs Committee. Chairman Economics Section, Public Affairs Committee. STATEMENT FILED BY UNITED ASSOCIATION OF JOURNEYMEN PLUMBERS AND STEAM FITTERS Under date of December 15, 1935, we received a communication from the officers and members of local no. 540, located at Newport News, Va. This communication was in the form of a complaint and they wished this office would bring the matter to the attention of the Secretary of the Navy and likewise to the attention of Secretary of Labor Perkins. The complaint states that the U. S. Cruiser Boise, now being built at the Newport News shipyard, have at least 40 apprentice boys employed installing the pipe fitting under the guidance of an instructor, while more than 20 of our first-class mechanics were sent home and told to remain there until called for. Under date of December 26, 1935, the following letter was sent to Hon. Henry L. Roosevelt : "DEAR SECRETARY: The officers of our local union no. 540 of Newport News, Va., have complained to our national office that the officials of the Newport News Shipbuilding Co. have laid off 20 mechanics, composed of marine pipe fitters and plumbers, who were employed on shipbuilding and were told to remain at home until called for. "First, we find the Cruiser Boise, now being built at the Newport News yards, has some 40 apprentice boys employed doing work under an instructor, which our mechanics formerly done. "Second, it is expected that work put in by these apprentice boys will not be as satisfactory as if installed by marine pipe fitters, who have been employed for a great number of years on this particular class of work. "Third, it is very discouraging to these mechanics who have devoted their lifetime to this work to be removed and apprentice boys employed to do their work. Therefore, we believe that this complaint warrants your immediate attention." Under date of January 6, 1936, we received the following answer to our letter of December 26, 1935, from Hon. Henry L. Roosevelt: "MY DEAR MR. BURKE: Receipt is acknowledged of your letter of December 26, 1935, relative to the Newport News Shipbuilding and Dry Dock Co. laying off some 20 mechanics-pipe fitters and plumbers-and having their work performed by 40 apprentice boys under an instructor. "The Navy Department, of course, is interested that satisfactory work is performed on its contracts and to insure this the Department maintains competent inspection forces at the plant. "The handling of the labor force at a private plant primarily is a matter between the company and its employees and it is considered that your complaint should more properly be addressed to the company." We are herein quoting you letter sent to Secretary of Labor Frances Perkins, under date of December 26, 1935: "DEAR MADAME SECRETARY: The enclosed complaint, addressed to Hon. Henry L. Roosevelt, was taken up through our business representative, General Organizer M. F. Garrett, with Admiral Lackey. "Admiral Lackey stated he was sympathetic with our complaint but suggested we should bring the matter to your attention. We were of the opinion that the Navy Department handled such complaints, however, we now find that your Department would be best able to take care of the matter complained of. "We know you are deeply interested in the placement, as well as the employment of mechanics and workers wherever possible, and in this particular instance it is rather a very unfortunate situation to know that a large corporation, such as the Newport News Shipbuilding Co., who have a great number of ships to be built for our Government, would lay men off who are so thoroughly equipped with the knowledge of pipe fitting of every description and replace them with these apprentice boys, under an instructor, to do their work. "Our Government will not get the results through the installations made by these boys as they would from the mechanics, who are now unemployed and probably will remain so until the Newport News Shipbuilding Co. sees their way clear to reemploy them. "I am sure, because of your great interest in all matters pertaining to the worker's cause, that you will give this complaint your attention and will remedy same by having the company place back to work these men who have been laid off." On January 31, 1936, we received a reply from the conciliator, who visited the Newport News Shipbuilding & Dry Dock Co. at Newport News, Va., and in the course of the investigation by the conciliator, who made a personal survey of the United States cruiser Boise, he found that 8 plumber apprentices were employed on this ship doing production work under the supervision of an instructor and no mechanics were employed. We were later informed that the general manager knew about the time of the arrival of the conciliator from the Department of Labor and it is quite natural to assume that a great number of these apprentices were withdrawn from installing pipe work, which comes under the jurisdiction of our skilled marine pipe fitters and plumbers in an endeavor to cover up the doings of this "chiseling" outfit. We are herein quoting to you letter written under date of January 27, 1936, to the Metal Trades Department of the American Federation of Labor, from the secretary of the Central Labor Union of Newport News, Va., which reads: "Recently a gentleman from the Department of Labor was here making an investigation of the ratio of apprentices being used in the plumbing department in the shipyard. I cannot say what information he received as he was accompanied by Mr. Robeson in making his investigation. It is the opinion that a confused prepared statement was given him by the local officials, but here I am submitting facts as we have found them at the time in which the conciliator was investigating. "The plumbing department have in their employment roll 337 men which include from the helpers to the head of the department, clerical forces included; namely, 22 first-class mechanics, 24 second-class mechanics, 57 helpers working with tools, 61 apprentices, 144 helpers, 29 clerical, and overhead. "This seems that the apprentices are out of balance with the journeymen mechanics and this information might be of considerable help in giving you a true picture of the condition in the yard." The United Association of Journeymen Plumbers and Steam Fitters, affiliated with the Metal Trades Department of the American Federation of Labor, are strenuously opposed to a continuation of the policy of voting some 30 millions of dollars every year under the guise of the ship subsidy when 75 percent of this money is to be turned over to shipbuilding concerns who deny to their workers the right of collective bargaining and the opportunity to secure wages which will permit their maintaining decent standards of living. As I have shown in the case of this U. S. Cruiser Boise, the shipbuilders take moneys from the Federal Treasury to use it for the exploitation of labor. It is well nigh time that such exploitation should be stopped and as members of the metal trades department and the American Federation of Labor, we are opposed to a continuation of exploitation of labor, whether it be on the part of chislers, referred to by many at this hearing, or by the large corporations some three or four of which control the entire shipbuilding industry of our country. If these ships were built in the navy yards of our country we would not have this exploitation of labor and there are plenty of navy yards, as well as plenty of good mechanics in this country, efficiently equipped to install pipe work. THO. E. BURKE, General Secretary-Treasurer. Attest: JOHN COIFIELD, General President. NATIONAL LEAGUE OF WOMEN VOTERS, To HOUSE JUDICIARY COMMITTEE: The Department of Labor operates under the Civil Service Act. We believe it would be a very unfortunate precedent to make more liberal exemptions in this instance than is true in most cases in the Department. We can see no legitimate reason why examiners should be exempt. On the other hand, they uld hold a strategic position in the effective administration of the act and |