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Mr. Hillman. Lack of purchasing power.

The CHAIRMAN. I always thought the depression was caused more by the extent of ruthless speculation and gambling and the inflation of capital.

Mr. HILLMAN. It is my judgment that viewing the total amount of money that went into wages in this country and that was spent, that we could not possibly support the mass production that we are equipped for.

The CHAIRMAN. You certainly could not support the extent to which capital was inflated and expanded. I refer particularly to the extent to which industry consolidated and reconsolidated, and piled up enormous capital, which of course affected the workers in their wages, and also affected the value of the securities.

Mr. HILLMAN. Of course that is quite effective, but taking the current industry, the information available is that the average person of over 18 years of age bought less than one suit of clothes a year.

The CHAIRMAN. Are you talking about prior to 1929?
Mr. HILLMAN. Prior to 1929.
The CHAIRMAN. Yes.

Mr. HILLMAN. Which obviously shows the lack of purchasing power in the country.

Senator WAGNER. And the reason they did not buy is because they did not have the wages.

Mr. Hillman. Of course we all love to be well dressed, if nothing else. It is the lack of purchasing power. I have been sitting in as a member of the Labor Advisory Board in one industry just a few days ago, and the figures presented showed that in 1929 the average wage for the whole industry was 25 cents an hour. That was a very substantial industry, employing probably between 50,000 and 60,000 workers.

Now, the National Industrial Recovery Act is for the purpose of at least putting a bottom to the low wage levels, and, through the provision for maximum hours, to create employment.

Taking out section 7 (a), I am satisfied in my own mind, especially with the experience of the last 7 months, there will be no enforcement of the labor provisions of the Code, and if section 7 (a) is not properly backed up, I am very fearful that the whole N.R.A., the great achievement of the last 6 or 7 months, may degenerate into purely monopolistic organizations, protecting themselves against unfair competition, and that the main purpose of the National Industrial Recovery Act, providing for the labor provisions of the Act, will fall down just because of lack of enforcement.

I would like to go on record and say to you, Mr. Chairman, that in my experience with the men in industry, the largest number are anxious to cooperate with the Government. They want a constructive way in dealing with the problems of industry.

The ČHAIRMAN. You mean the employers ?

Mr. HILLMAN. The employers. They all recognize that the old method must mean ultimate bankruptcy for all of them. But the trouble is that a small group can always create a situation where the people who would like to do the decent thing are helpless. We are getting today a great number of complaints from a number of employers that the codes are not properly enforced, and because of that it creates again unfair competition.

Now, section (a) in my judgment, should have been sufficient. The language is clear, and anyone who desires to cooperate with the Government can just read the language of the section and know that. it gives labor the right to organize. But our experience is that starting with the minority today, but spreading and becoming soon the majority action in the industry, that they are trying to find ways. of violating the letter and the spirit of the law.

The bill to me—I would not say that every word is perfect and that, there isn't any room for changes or amendments, but it gives substance. to the law, it creates a board that will be an impartial board, three impartial representatives of the public, which will work toward the proper confidence of industry and labor, and then two representing industry and labor, so as to give, as the Secretary stated yesterday, proper contact and intimate knowledge of what is going on in industry.

The people who are opposing it know what the purpose of the law is. It is the same group of people who have opposed and denied labor the right to organize in the past. I represent, as president of the Amalgamated Clothing Workers of America, an industry where 75 or 80 percent of the employers are under a contractural relationship with our organization.

There has not been a single strike or disturbance, to my knowledge, since the N.R.A. in that 70 or 80 percent of the industry. But you find a great deal of strife in that 20 percent who are still opposing not merely the N.R.A., the law, but would like, in my judgment, to have a situation where they do not have to live up to the labor provisions of the code. Only yesterday, 1,200 or 1,400 people walked out in the city of Cleveland in one plant, merely on account of section 7 (a). Now, here is a company that had a company union 15 or 20 years ago; then the depression of 1928-29 came and they wanted to reduce wages, so they abolished the company union. They did not ask for any vote on it. Then they proceeded making reductions. Since the N.R.A. they called the company union back again. Discharges have taken place, and a couple of days ago another person was discharged because of activity in organizing the people into an independent organization, and as a result there was a walkout of about 1,200 to 1,400 people.

I can see a real danger ahead of us, as President Green has pointed out this morning, unless we can establish governmental agencies that will give protection to labor, and protect their rights under the bill, that we are heading for a great deal of industrial unrest that is uncalled for.

I believe that the act, when enacted, and when the employers will recognize that they have to deal with the law as is, that we are going to enter into an era of cooperation in industry instead of strife, when this bill becomes a law. It is because of that, and because the bill makes proper provisions for guaranteeing labor the right to strike, a right that labor cannot possibly give up under any conditions, when it is given the proper governmental machinery, I believe the strikes will be very much minimized, just because there will be a relief for the workers when they have grievances to take up.

I conceive that the bill at this time is necessary and it ought to be treated as an emergency measure, as emergency legislation, to protect and safeguard the workers under the Industrial Recovery Apt.

The CHAIRMAN. As I understand your contention, Mr. Hillman, it is that you, as an observer, and as a member of the Labor Board, have observed about 20 percent of the industries of this country seeking to avoid the provisions of the N.R.A., and in obtaining that objective to avoid the provisions of the N.R.A. they have given the appearance of supporting section 7 (a) by organizing unions in their plants, but they did it solely for the purpose of appearing to support the law, and not for the purpose of giving the employees the independent rights that that provision gives them.

Mr. HILLMAN. The real purpose is to maintain their own open-shop policies under the cloak of company unions.

I don't know of any company union-I say I don't know of any, but there may be some—where the basis for the whole organization is not coercion. These people have got control of the men's jobs. Of course, any indication is a threat, a coercion.

The CHAIRMAN. It is gratifying to hear you state that in your judgment the largest percentage of the employers of the country desire to live up to the spirit of the law and would welcome legislation that would compel all employers to treat their employees equitably and justly.

Mr. HILLMAN. Exactly, Mr. Chairman. But I insist that the whole industry be required to do the same thing. After all, the basis of unfair competition, in a major part of the industry, is low wages that some manufacturers can enjoy because of their power to control labor, and because of that it creates an unfair competition. If competition is to go on, and I believe there is room for it, it ought not to be done at the expense of labor.

The CHAIRMAN. A well-organized union in an industry would insist upon the provisions of the code which relate to hours and wages being enforced.

Mr. HILLMAN. Of course.

The CHAIRMAN. And therefore it would make for uniform wages and uniform working conditions in all industries and remove the element of ruthless competition that has been so injurious.

Mr. HILLMAN. Exactly. Many instances have come to me where people have complained about the violation of the labor provisions in the code which is the law for the industry, and then they have come pleading to the people that they lodged the complaints with withdraw them, because they knew they were going to be discharged.

The CHAIRMAN. Thank you, Mr. Hillman. Mr. Hotchkiss.

STATEMENT BY WILLARD E. HOTCHKISS, PRESIDENT, ARMOUR

INSTITUTE OF TECHNOLOGY, CHICAGO

The CHAIRMAN. Mr. Hotchkiss, will you give us your full name?
Mr. HOTCHKISS. Willard E. Hotchkiss.
The CHAIRMAN. Your present occupation or profession?

Mr. HOTCHKISS. I am President of the Armour Institute of Technology, Chicago. I do not represent anyone except myself.

The CHAIRMAN. What is that institute?

Mr. HOTCHKISS. It is an engineering school, a 4-year undergraduate engineering college.

The CHAIRMAN. You are here in your personal capacity?

Mr. HOTCHKISS. I am here on an invitation. I do not know who suggested that I be invited, but I am here.

Senator WAGNER. I did.
Mr. HoTCHKISS. I am very thankful, Senator.
The CHAIRMAN. Mr. Hotchkiss, we will be glad to have your views.

Mr. Hotchkiss. I hope being here with Mr. Hillman will not induce me to make a speech. I have quite often, as he knows, made one after he made one.

I think I ought to give a little excuse for being here. I was secretary of the Shipbuilding Labor Adjustment Board during the war. I was executive secretary of President Wilson's Second Industrial Conference in 1920. Between 1920 and 1925 I was director of the National Industrial Federation of Clothing Manufacturers, whose business it was to carry out the agreement with Mr. Hillman's union. So in that capacity I have represented employers that were working with the union. Last April, I think it was, Mr. Green did me the honor to write me. I think he wrote a great many other people in reference to this section 7 (a), which everyone, of course, recognized, anyone who had any dealings with the labor movement, was a very important part of the act, naturally, and he expressed anxiety in reference to the actions being taken, and I think the answer to the letter that he wrote was counselling caution. I raised the question at that time whether the labor movement, as it was at that time constituted, was prepared to digest an extremely rapid unionization of that part of the industry which was not then unionized.

Now since that time things have happened that have removed a part of my anxiety, by all odds the most important part of it. My peace of mind on that subject is the incorporation of the Amalgamated Clothing Workers of America into the A. F. of L. movement. Another one is the revival of membership in the United Mine Workers. Now there is a reason for that aside from the benefits which I think will come from injecting such leadership as represented by Mr. Hillman into the movement.

It seems to me that the bulk of the industries that are open-shop industries, so-called, with or without company unions, at the present time are industries in which unionism will have to be on the basis of an industrial union as distinguished from a craft or trade union. I just cannot see the automobile industry working with the carpenters on one issue, and right next door the machinists and all of the different craft organizations it would be necessary to work with. I think the tendency, while it has not gone as far as I would like to see it go, I think the tendencies toward recognizing that fact within the labor movement itself, has been very noticeable during the past 6 months, and I sincerely hope it will continue.

Now I realize that a man who had his active connection with labor 7 or 8 years ago is likely to seem like a bit of ancient history, when it comes into the discussion of this. I remember when we were working over this industrial board, Mr. Oscar Strauss was a member of this commission of which Secretary Wilson was chairman. Mr. Strauss is one of the finest men in the world, but he was always talking in terms of 1912, and it was 1920 at that time, and sometimes it was not quite in keeping. He was a delightful man. I am just afraid I may be talking in terms of 1920 or 1925, when I was working with Mr. Hillman, but I am going to be very frank.

I would like to see the main issue to which this question is addressed, absence of compulsion, settled. I do not think there should be coer

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cion. I would like to see it settled in such a way that it would commend itself to the great body of employers represented in this 80 percent that Mr. Hillman speaks of, and all those who are dealing with unions at this time. I am just fearful if this act passes in its present form, that the result may be to precipitate more strikes than it will save necessarily, during the next 6 months.

It occurs to me that if there could be complete inquisitorial authority given to find out, in a given situation, whether there was coercion or not, and you could have a body of people representing distinctly organized labor with competent scholarship at the present time—and I have that man in mind, namely Mr. Wolman-a board that would have at its disposal a man like Mr. Wolman-let us take another professor, I am more or less of a professor myself—take a man like Mr. Slichter of Harvard University, and then let us take somebody that has been associated with an open-shop industry, whose opinion the community values on this subject, like President Stanley King of Amherst

The CHAIRMAN. I am glad you have faith in Massachusetts.

Mr. Hotchkiss. Mr. King is not a citizen of Massachusetts, he is a citizen of the world—if they could have power in the meantime under the Board-I am not trying to rule you out, Senator, I think it ought to be under your Board—but if they could have full power to get a deliberate, well-developed orientation in all the facts, and then bring this bill up at the next session of Congress, with such modifications as might come in the meantime, I would be frank to say I would feel a little easier about it. Maybe I am old fashioned. Maybe my reaction is the result of working in a situation that was current 5 or 6 years ago. I know how very fast we have been going. I think we are going in the right direction, but I am very, very solicitous about the same thing Mr. Hillman is solicitous about. I am solicitous about the N.R.A. program, and I think we have got to find some way or other of trying to avoid what seems to me is likely to be an epidemic of strikes this spring. Of course, we probably shall not be able to avoid it altogether. We hope we can do things better than our fathers did, but usually when recovery starts there are strikes. There have been in the past.

Now I am a little solicitous about this particular measure. I do not pretend to have studied it, Senators, in its entirety. I received the copy you sent me on Saturday. I read it with a good deal of care-and I am not a lawyer—but I should dislike to see the group of people who are represented by men like Mr. Hillman, come to look to the Government instead of to Mr. Hillman's organization for their primary protection.

Government standards must, in the nature of things, be minimum standards, and when you enforce minimum standards there is a great danger that you will have maximum standards. I am solicitous not for the present, but for the future, in some regards, in respect to the definition of an employee.

We have a right wing and a left wing in our labor movement at this time. I think it is wholesome that we should have a right wing and a left wing. I do not think there is any particular reason why we should not have a wing that is considerabằy a left wing. Suppose we have a left wing strike and those people are refused by people who are in good standing with the regularly constituted unions?' I

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