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Senator Walsh. Pardon me—the specifications are written in the application for bid. He would not bid at all if he could show the certificates as showing how the lumber was made. There is no cancelation of contracts afterward. The invitation for bid sets forth all the conditions.
Mr. FULBRIGHT. I wish to refer to the provision of the bill which says that, “ The principal contractor shall, if directed by the contracting officer upon the recommendation of the President, cancel any subcontract for a breach by the subcontractor of his written representation or agreement, and failure on the part of the principal subcontractor so to cancel shall subject his contract to cancelation.
Senator Walsh. That is correct,
Senator Walsh. After the written specifications went forward and the man bids, and then it later develops i hai he is not living up) to those terms, the agency of the Government can ask cancelation.
Mr. FULBRIGHT. That is the point. He cancels it. Then he goes out to buy again. He may not be able to get it at the same concern. He
may be delayed 2 weeks in carrying out his contract. He may be penalized. And there is not one line in this bill to protect him in a case like that.
Then, take the question of the material already in being. You are buying lumber out of lumber stocks. It is practically impossible to tell when a particular piece of lumber is manufactured. The Government may buy lumber from these large concentration yards. They in turn are buying lumber from mills throughout the South. It comes into those yards, put in there according to the grade and dimension of the lumber, placed in these stocks. A large amount of those stocks throughout the country today are accumulated stocks. What are we going to do about those? You cannot tell. When they commingle you cannot tell whether part of your lumber has com out of a mill that complied with the code and part not.
Furthermore, you are going to run up against the same proposition here that you did in the code itself, and that is that unless you have an army of inspectors to enforce the legislation it will be a failure. In 1932 the lumber industry in the South was flat on its back. In the first quarter of 1933 a survey made of a large number of representative operations showed that they were actually losing $5 per thousand feet for every thousand feet of lumber that they sold. Many of them who were able to do so only conducted such operations as were necessary to keep their little organization together. A great deal of the operation was carried on in order to provide a living for the people in these little communities where these sawmills were located, where the populace had depended upon those sawmills. They furnished them houses rent free. They furnished them supplies out of the commissary, hoping for the day to come when they could get enough employment to pay for it.
Then came the proposal to enact the National Industrial Recovery Act. We were such in our industry that the lumbermen of the South felt that now we will have something worth while. We had meetings--not merely of the Southern Pine Association—but called as many as we could get together. I sat in one of those meetings in New Orleans, and we sat there to consider what we would do about this act, which, by the way, was hardly on the statute books at that time, and we felt that here was a great opportunity for the industry to get together and to so fix its operations as to give living wages to these people, and as to curtail the hours, work out a plan to spread the employment, and at the same time at least to get up to the point where we would not be losing $5 a thousand feet on the lumber that was sold.
There were trade practices in the industry that had helped to bring about this debacle, and we had an opportunity in the code to adopt trade practices that would eliminate those undesirable things that had a demoralizing effect on the industry.
In that great meeting careful consideration was given to it, except on one point: One rather well-known lumberman of the South rose and asked me while I was on the floor what I thought of the constitutionality of this legislation, and I merely remarked that that was not a time to talk about the constitutionality of legislation, that this was an emergency that we were trying to put through, tide over, and get the industry going in the country, and it was accepted by the industry in that spirit and they went forth from that meeting by a unanimous decision to try to carry out that program.
Well, it started out very nicely. Of course, we had a lot of administrative difficulties. The problem of adjusting the prices between a small manufacturer who only produced a limited line and those of the large manufacturers who had a large line—all of those things came into it. But we tackled it seriously and with a vengeance.
The first thing we knew there were numbers of these little mills, some operated by farmers with their families, and others that we knew were not complying with the terms of the code. We had no power to prosecute them. We called upon the Government to enforce it. We got up a test case, assisted in getting up a test case, in the first few weeks that the code was in operation, and that test case was the Belcher Lumber Co. case, and it took the Government nearly a year to get it into the courts, and after it got it to the Supreme Court it threw it out and decided not to prosecute it.
In the meantime here is what happened : All of these little numerous mills scattered over the south began to disregard these code provisions. It just began to break down, and before the Solicitor General decided not to prosecute the Belcher case in the Supreme Court we had a meeting in New Orleans and it was all we could do to keep them from throwing up the new entire efforts of the code and abandon it and take the consequences, and the only reason they did not do it was because the Government was going to make a test case out of it.
That was because the Government could not, as a practical proposition, police them. There were so many of them that there was just no use of proceeding. There were many of them that went ahead and sold material to the Government that did not comply with the code. You have those in all industries where you have numerous units. You come into the practical proposition, and it resulted finally in making the Lumber Code the most unpopular, and even brought on a serious lowering in the price of lumber, until the miller found himself between the upper and nether millstones, and the producer found himself discriminated against, those who were still paying the wages and hours—and there are a lot of them still paying them of the code, but the great majority are not, and I do not think ever did.
All right. Then you have also the labor side of it in the South. The labor side of the code went into the code, as the rest of them did, and with the break-up of the code I want to tell you that the lumber industry has had no trouble with labor in the South, because, on the whole, things have been going along just as well as they did before. Of course, as I say, there were a lot of these socalled “coffee-pot” mills that never did pay any attention to it.
Mr. CHANDLER." Ground-hog" mills.
Mr. FULBRIGHT. Yes, sir. We found in making the survey trying to work up this code that some of them were paying 5 cents an hour for 10 hours a day, and when you heard their story, why, you wanted to get down and cry for the man that ran the mill as well as the fellow that worked for it. It was a terrible situation.
Now, there is not any question but what that has been tremendously involved, but there is also not any question but what the thing broke down because you did not have an army there to enforce it.
Now, I say to you gentlemen, and I want to speak to some of you because I come from Texas and have been a Democrat all
life I want to tell you that in my opinion, from having been in contact and intimate connection with this matter, in about 12 months' time it is going to be about the most unpopular thing you ever heard of. Because when you cannot enforce a law, when you have got to make an exception to this and that and the other, every time you make an exception you create unrest and unsatisfaction. You are going to have the bootlegger, the fellow that signs certificates and pays no attention to them, and you are not going to be able to enforce it, because you are not going to have the forces to send out to the hundreds of thousands of industries that will be affected.
And then, there is the practical proposition of trying to go back to a man that furnished the material--the farmer that hauled the logs to the mill, or what have you, and trace it back. With all those complex and difficult questions, it is just going to take it about 12 months to sink into the consciousness of the people that it is a most unfortunate piece of legislation, and I certainly would hate to see this committee endorse it, and I do not believe that labor is going to be satisfied with it, because when we pased the National Industrial Recovery Act I well remember that section 7 (a) was referred to as the bill of rights of labor. Labor all felt, now is our Magna Carta-that had the thing that was going to take care of them from now on. But it did not do it. It did not do it.
We passed other legislation that goes very much further than that. I do not know how it is going to work out. But you have got a large amount of legislation already in place of the 7 (a). But this bill here is not going to solve the problem that the labor organization wants solved, at least not the way they would like to see it solved. So, I do not believe it is going to be satisfactory to labor in the way it works out. I know it is not going to be satisfactory to the industry in the South and I know it is going to be a source of dissatisfaction in the lumber industry everywhere.
I hope this committee will consider the side of experience in this matter. It is of such broad and fundamental importance, and it is
going to have such far-reaching seriousness within the next 12 or 18 months, that to my mind it should not be passed over in a few hours' hearings, without going into the great, broad legal questions of it, that I would like to discuss but am not going to do it.
The CHAIRMAN. We are very much obliged to you, Mr. Fulbright.
Mr. Evans, we have you down here for 5 or 6 minutes. We wil make it 7.
STATEMENT OF ROGER F. EVANS, DIRECTOR OF THE INDUSTRIAL
BUREAU, PHILADELPHIA CHAMBER OF COMMERCE, PHILADELPHIA, PA.
Mr. Evans. Mr. Chairman, I will be very short, because I must be in Philadelphia tonight. My name is Roger F. Evans. I am director of the Industrial Bureau, Philadelphia Chamber of Commerce, whose 1,200 member firms naturally constitute a substantial cross-section of Philadelphia's business and industry.
In order to make it brief, with your permission I will read the note which we prepared today in opposition to the bill. But I should like to say that it is not blind and precipitate opposition.
In a spontaneous early effort to achieve the purposes of the “new deal” it was the leadership of the Philadelphia Chamber of Commerce in that city that enlisted some 95 percent of the business of that city and some 700,000 members that are under the “blue eagle." It was only long and intimate practical practice with the almost impossible administrative difficulties and the unexpected and unwonted economic consequences of the N. I. R. A. that brought dissolution and brought the chamber again to the conviction that you just cannot legislate against human nature.
In fairness, it further must be said that a very significant group of chamber opinion there feels very deeply indeed about this legislation and similar proposals. Regardless of their politics, they feel that the sentiment of the country is rising against the hurried enactment, with necessarily limited hearings, limited publicity, and limited public understanding, of any more legislation of such dubious workability.
Speaking directly to the bill before your committee, however, we are not debating its objectives, its theoretical logic, or the right of the Congress to determine the conditions under which Federal funds shall be spent. Our reservations—and they are to us serious reservations—are addressed rather to the very questionable practical wisdom of enacting at this time, without more knowledge of its consequences, legislation which, for the very simple reason--and it is a persuasive reason—that the Senate committee does in effect by indirect means largely reinstate the N. R. A. with all its administrative problems, its inconsistencies, rigidities and costs.
I am aware of the exemptions, and that that is only one of the four tests or standards, but as Mr. Bardo pointed out this morning, the bill it seems to us goes undesirably beyond the N. I. R. A. If you have an industry of large responsibility, of unknown extent and determination beyond his identification and control, and thus expose him to indefinite liabilities which make it very difficult for him to plan forward and at all to accept this kind of business, the
practical result is that costs of Government would be necessarily increased and that the business will go to bidders or dealers who either deliberately are taking the risks of detection or who unwittingly are exposing themselves and all concerned to risks and penalties they cannot afford to take and against which there is no practical defense.
To truly administer the law, as the previous speaker, I think stated, it would obviously take an army well beyond N. I. R. A. proportions of inspectors, investigators, prosecutors, and field men, whose activities and results may not be appreciated now, but, as he also said, they will be of wide-spread public knowledge and political significance within the next year. “As average Americans all simply trying to do a constructive job, that prospect to us is not reassuring. Presumably behind that situation would be put all the present great spending and loaning power of the Federal Government. While the N. I. R. A. code standards of May 26, again, are only one possible yardstick for the far-reaching effects here involved, convenient reference to them does seem to imply a blanket endorsement hardly justified by the practical working effects of those codes.
To begin with, it is common knowledge that the standards of many of the codes were neither perfect nor workable. The hour and 'wage conditions of many were dependent upon price arrangements that could not be defined. Yet here is Government, or with this legislation Government would be attempting, but this time with quite uncertain help of industry itself, if we were to judge by what I have heard today in these hearings, in contrast with the spontaneous cooperation that the administration had a year ago, to do the almost superhuman job of trying to simply, equitably, and effectively from Washington solve the unbelievably practical problems involved. They are wage differentials between localities and skills, the problems of overlapping industry and trades and occupations, interweaving as they do the ever-changing emergencies due to everchanging conditions involved in special exceptions that were mentioned here, as well as situations that result from interrupted schedules and narrowed sources of supplies.
For the broad base and administrative functioning of many skilled and experienced minds close to the job, which after all characterizes our capitalistic system, the bill would attempt to substitute a central mind handicapped by everything except good intentions. That is our feeling.
In another direction we are trying today in Philadelphia, and we are counting heavily on the housing program as a recovery measure. Yet by the testimony of some of the Administration's outstanding economic advisers, we have the present legislation proposal implicitly attempting, inconsistently we think, to drive that major recovery vehicle, the housing program, over the relatively high barriers of building trade wage rates.
I am not advocating lower general rates, gentlemen, far from it, but we are inclined to agree that entire equilibrium between wages in the different groups in any system is primarily essential to any successful government. They cannot long stay out of balance.
True it is said that the bill authorizes by exemption the agencies of Government itself from the standards it would impose upon