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private business and industry, a sort of a way out. One is constrained to wonder why this exemption is made. It is said that the prime object of our spending program is to get private industry into shape to carry the load. Yet with all the economic and political complexities already facing business, it is hard to see that, being aided by legislation, they would thus put Government more and more into business directly and through such legislations as this bill would encourage and require.
Mr. RAMSAY. Just a moment. You heard this man say that men were employed in southern lumber camps at 5 cents an hour. What would you propose to prevent that discriminatory difference in those wages, unfair differential I might say?
Mr. Evans. May I go back, sir, and repeat that we are not sponsors of the bill.
Mr. Ramsay. What do you propose to do to this bill? How would
you do it?
Mr. Evans. I will try to cover it in the next paragraph. If it does not cover it will you please ask the question again?
Mr. RAMSAY. All right,
Mr. Evans. We believe it would be definitely improved and made more workable by eliminating throughout--and I am afraid it would drastically alter the character of the bill-all provisions that contain actually these four things: First, retroactive arrangements.
It has been suggested here today that the language might be a little ambiguous, and there was some question this morning about the million pairs of shoes, as to just how far back in point of time the bill takes effect.
Senator Walsh. It takes effect 30 days after its passage.
Mr. Evans. But still there is identification of accumulation of stocks.
Senator WALSH. Made before 30 days after its passage.
Mr. Evans. Are those made 30 days after passage out of the picture entirely?
Senator WALSH. Out of the picture entirely.
Mr. Evans. Third, it is a difficult thing to go back certainly of the first subcontractor. This is rough and ready by way of suggestion. Or to any supplies or materials definitely part of the first contract.
Mr. RAMSAY. Subcontract of the first degree-it just goes to those.
Mr. Evans. Yes. I know that is rough and ready, and it may not be the sort of thing that is regarded as adequate.
I personally was a manufacturer for 15 years before I came into this semipublic work with the Chamber of Commerce, but I am convinced that our standards increasingly going to be horizontal rather than vertical in our own lines. We have got to have our relationship to other firms, to other industries, to Government, and all the rest, because those things today are pushing us all over the map.
Senator WALSH. In the process of manufacturing in a mill, you would not merely go back to the weaver? Would you not go back to the spinner, the spooler? Very often the finishing mills buys its woven goods from some concern and the weaver buys it from the spinner, and the spinner buys it from somebody else.
Mr. Evans. I happen to be in the textile business myself, and we know the problem.
Senator Walsh. Isn't it common that that condition exists?
Senator WALSH. Would it not be fair to the manufacturers who find themselves under those conditions competing against a man buying their textiles of some kind where he had to only go back to one contractor and the other people could violate with impunity?
Mr. Evans. I say it is rough and ready. I assume that the first contractor—it might include in the silk mill the warping, the spooling, the winding, the weaving, the dyeing, and so forth.
Senator WALSH. Yes.
Mr. Evans. I am not attempting to set up anything exact. I am suggesting it be, in order to be worth having at all, legislation that is workable, and I am going back to the beginning and say frankly that we certainly cannot legislate against human nature, and, as the previous speakers have said, we would be inviting violation and undermining the very spirit of law to attempt to put on the statute books a bill which is so essentially, in our opinion, unworkable all down back through.
Senator WALSH. You all seem to forget that all the exceptions are made not after the contract, not after the written bids are invited, but before. One of the exceptions that we ask is that one bid may have no labor conditions in our favor. Another will say that we will have these labor conditions and only part of them, Another invitation to bid may have different conditions. Exceptions are all made by the President or the bureau acting under him and before he asks for bids, so that when the invitation comes everybody will know what the terms are.
Mr. Evans. I am aware of that, sir.
Mr. LLOYD. Senator, is it your thought that the call for bids would include the hours and rate of wages?
Senator WALSH. Yes. Mr. LLOYD. Suppose the Government wanted to buy a million feet of lumber wherever the department could get it. Your wage schedule is said to be under the code at 28 cents an hour.
Senator Walsh. The minimum.
Mr. LLOYD. Our wage schedule in the Northwest is 50 cents an hour for common labor.
Senator WALSH. Yes.
Senator WALSH. A differential. It would be set forth in the invitation for bids, the minimum wage in different parts of the country and the differential allowed based upon that minimum wage. The minimum wage that we have shows just what you have pointed out, a different minimum wage in the Northwest from the minimum wage in the South, and that would be taken into consideration in invitation for bids.
The CHAIRMAN. Mr. Evans, you are making a good statement, but it is taking three times the allotted time.
Mr. Evans. May I finish in about 3 minutes?
Mr. (HANDLER. May | ask him one question? If you eliminate any substantial manufacturer or producer from the terms of this
law, would not the whole law break down? Haven't you got to make it all inclusive in order to make it entirely effective?
Mr. Evans. I prefaced this by saying that if legislation of this character was mandated I felt it would be in the direction of simplicity and workability to bring it within bounds where you could pay taxes, rather than to invite such wholesale violation as we think would flow from an attempt to blanket the whole field.
Mr. CHANDLER. I thought your solution, though, a moment ago was to go no further back than the immediate contractor.
Mr. Evans. Yes, sir. I said if the passage of some bill of this character is mandated we believe it would be defined and proved and made more workable and fair by eliminating throughout all provisions tending towards these four things: First, retroactive arrangements; second, subcontractors or any supplies of materials or services definitely back of the first subcontractor. I acknowledge that this was rough and ready.
Senator Walsh. You appreciate the danger of that, though, when pointed out?
Mr. Evans. Yes.
Senator WALSH. If one man said all he produces is in accordance with the standards, and another man would be able to have people from whom he purchased violate those provisions?
Mr. Evans. Yes. If a man throughout his own business is observing high standards, the presumption is that he does not make a practice of lending his own name to what has been called "chiselers" here today.
Third, we would eliminate exemptions to Government agencies not including the reason for performance in their favor.
Fourth, and would eliminate the arbitrary fixing of wage and hour provisions, which might be overcome perhaps through hearings, to provide a basis in fact rather than anything of a more arbitrary character.
In the face of any virtues that the objectives and theory of the bill may have, however, we cannot escape the conviction that they, the virtues, would be far outbalanced by the practical administrative handicaps that we have just been dealing with, and that, since the bill in its present form just seems to us so untimely, so unworkable in its scope, so unfair to organized industry as opposed to Government agencies, and so likely to defeat its own recovery purpose, that it should not be enacted, and we would respectfully urge its disapproval on those grounds by your committee.
The CHAIRMAN. We are very much obliged to you.
Mr. Garvin, you have 5 minutes in opposition to the bill. Is Mr. Garvin here?
Mr. Fulbright, didn't you give me the name of Mr. Garvin in opposition to the bill? Mr. FULBRIGHT. He was here.
The CHAIRMAN. You better call him. I have a name here. I believe it is Mr. Hoag, I am not sure.
Mr. BERMAN. May I take advantage of Mr. Garvin's absence to give you my own statement? I would like to catch a train.
The CHAIRMAN. What is your name?
The CHAIRMAN. Have we got you down here?
Mr. BERMAN. Yes, sir; in support of the bill. I would like to take a train.
The CHAIRMAN. No; we want to finish up the opposition now.
Is Mr. Harding here! Gentlemen, are we through with the opposition to the bill?
Mr. Frey is leaving for the Northwest, and he wants just 5 minutes.
STATEMENT OF JOHN P. FREY, PRESIDENT OF THE METAL
Mr. FREY. Mr. Chairman-
Mr. Frey. In support of the bill. I am the president of the metal trades department of the Federation of Labor. It is composed of all of the international unions of metal workers in the country. I would like to preface what I have to say with the statement that I am not in any way a representative of the manufacturing groups, but it happens that in connection with this bill a number of manufacturers with whom I have been intimately associated for years past have pressed me to use all of the influence at my command to secure the passage of this bill.
The CHAIRMAN. Will you indicate who they are, Mr. Frey?
Mr. FREY. Yes. Some of them are among the most prominent members of the Manufacturers' Protective and Defense Association. They are interested, among other things, in selling stoves to the Government for the C. C. C. camps. There has just been let a contract for 27,000 my ranges and furnaces to C. C. C. camps, given to the lowest bidder under a ruling of the Comptroller General, the lowest bidder being Three Farms, notorious throughout the country for many years as the lowest wage and lowest standard employers in the industry; and we submitted data to the War Department, or rather to the Quartermaster General's Department, and data to the Labor Department showing that these firms who eventually did get the contract were paying less than one-third of the wages paid by other manufacturers in the same industry. These manufacturers desired an opportunity of getting some of this Government work.
I would like to say this, I know you are weary, it is the end of a hot day—but I have been a little touched by this unhappy industrial situation in the South that has been referred to, and I would like to bring a little sunshine into the picture.
Things down there are not quite so bad for all of the manufacturers. The Department of Agriculture reports that in 1932 the total price the tobacco growers of this country received for their crop was $107,000,000. They also report that on that same year the net profits, not the gross receipts but the net profits, of the Big Four, all of whom have their plants located in the South, were over $104,000,000. As there are some other manufacturers of tobacco in the country besides the Big Four with their plants in the South, the evidence is that in 1932 the net profits of the tobacco manufacturers exceeded the total price they paid the American tobacco grower, of whom there were some 400,000.
We endeavored to find out how about the wages in this profitable industry. It was impossible to secure them for 1932. But the census of manufacturers indicates that in 1931 the total amount paid in wages by the tobacco industry as a whole was $69,000,000, and in 1933, the next census year, it was $50,000,000.
So, apparently the net profits of the Big Four in the South for 1932 were approximately twice as much as the total volume they paid
It is the wages which industry pays in the Souih, in the West, and in every other part of the country, that gives the busi. ness man the wherewithal to increase his activities.
We have a serious problem on this question of the Government's being compelled to enter into a contract with the lowest bidder or the lowest satisfactory bideler, and that means that he gives a satisfactory bond. And now we have this apparently inconsistent position: The Government of the United States, this administration, doing everything it humanly can to increase the consuming capacity of the American people, a consuming capacity that is the very life on which business itself depends.
So, on the one hand we have had the President of the United States, the members of his Cabinet, we have had the Congress of the United States and other agencies, endeavoring to build up the consuming capacity of the Nation; and yet, on the other hand, for lack of such a bill as is under consideration, we find the Government favoring the employer who imposes the lowest standard of labor humanly possible and getting away with it without calling out the militia.
That is the question as we see it stripped of all of the details. Stripped of all the details, with all of the conflicting interests that may be involved, it gets down to this: Is it the policy of this Congress to build up the consuming capacity of the mass of the people, or is the Government to be used as the means for beating down the higher labor standards that so many employers have established? Are we to injure, are we to inflict an injury upon every business man hoping for Government work, by saying to him, “We admire you for establishing a high standard for labor for your establishment, but for that reason we bar you from an opportunity of getting any contracts for Government work"? To me it seems that the question involved is a very simple and a very direct and a very practical one.
Mr. GREGORY. We thank you, Mr. Frey.
STATEMENT OF ARNOLD BERMAN, CROWN OVERALL MANUFAC
TURING CO., CINCINNATI, OHIO
Mr. BERMAX. Gentlemen, my name is Arnold Berman.
Mr. BERMAN. I would like to make a point. It is a point that has not been stated so far.
I am the vice president of the Crown Overall Manufacturing Co. and represent a group of manufacturers who are in favor of this bill. I think we have a new thing to bring to this hearing.