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avoid the paying of that wage. It was astounding the extent to which it would go; and it was astounding also to have Government contractors come here—now, mind you, this was written in the contract—and have these Government contractors say they gave the appropriate time and attention to all of the materials, but whether the men got their pay or not, or the wages, was inconsequential, of no special concern. One of the benefits of that investigation was arousing of those officials to the importance of that element.

The CHAIRMAN. Senator Walsh, there was an observation made by one of the witnesses in opposition to the bill, when he referred to the fact that labor had made progress through collective bargaining, had preserved its importance and its ability to grow by reason of its responsibility—you heard that?

Senator WALSH. Yes, sir.

The CHAIRMAN. And continued to point out the danger of labor becoming dependent upon the Government to do those things for labor which in the past labor has been able to do for itself.

Senator WALSH. That would be quite true if all industry were organized, but of course the overwhelming amount of industry is not organized

The CHAIRMAN. Of course, you have strikes on the one hand and this scheme on the other. At the same time, I believe it is an important thing for consideration; I mean it is being considered by many people as an important thing.

Senator WALSH. Yes. To me the strongest argument for this bill, one of the strongest, and which answers one of the arguments that have been made, is, namely, it would create a monopoly, that the big industries would get this business and would have the advantages, because they could adopt minimum wages and maximum hours more easily. The fact of the matter is that a monopoly now get these jobs, and it is going to grow and grow and grow into all Government contracts. All contracts are going to the sweatshops, because the present law requires the lowest bidder, and the lowest bidder means the lowest wages and the longest hours. That is a primary factor. Now that is the situation.

Are we going to allow that monopoly to grow up in this country, to tear down and destroy the advance and progress made, or are we going to say, the Government is going to save and preserve some of the things that have already been accomplished by putting in its contracts that invisible item of the human element and bring out in the open what the conditions of the workers are?

The CHAIRMAN. Senator Walsh, do you have any notion as to what is the reason for the difference of opinion between yourself, as you have just expressed it, and these gentlemen who are connected with industry who do not seem to be willing to have this sort of thing?

Senator Walsh. That is a very proper question. T'or instance, I have talked with very few persons, in all of my connection with the matter, who have not agreed that this bill was a good bill. I understand there has been misapprehension. One witness was rather vehement in his argument about a paragraph in the bill that was eliminated, for really an effort was made at first in the bill to make everybody who made a contract agree in all of their operations, with all of their employees, for 2 years they would live up to these standards. That was one of the chief objections.

Those people have the best intentions, I suppose, but they have a tremendous antipathy for the N. R. A. I have too. I did not like the price-fixing features of it. I did not like the way it was being administered. I did not like many of the features of the N. R. A. Yet I had always favored the labor conditions, and that was the thing that controlled me in voting for it myself and controlled me in the committee in upholding it and favoring the extension of it, was that these labor conditions did a tremendous amount of good, a tremendous amount of good, and were a tremendous benefit, and that outweighed the unpleasant and disagreeable features that these men felt very keenly and very much disturbed about. I think they exaggerated tremendously the conditions of the bill.

The CHAIRMAN. Yesterday I asked one of the witnesses what, if industry that tried to hold up wages and hours did not have some protection, would keep the business from going to the chiseler who did not try to do it.

Senator WALSH. Yes; I remember you asked that question.

The CHAIRMAN. And that witness did not seem to think there was anything in the question, or that it was a question that deserved much consideration.

Senator WALSH. I think that was a very appropriate question; and the strange thing, Mr. Chairman, not one of them-not one of them; not one of them—say but what they have the 40-hour week, and they have the minimum wage, and yet they do not want it written in the contract.

The CHAIRMAN. What I asked a while ago was, Senator, from your experience and contact with these people, what explanation, if there is any other than what you have just stated, this opposition to N. R. A., is there for the difference of opinion between yourself and these industrialists?

Senator WALSH. I can illustrate. I can only state what I think is the difference. There has been a tremendous movement in this country into rural sections. That is, in my own State. Our shoe industry, to use that as an illustration-by the way, the shoe industry is really out of this bill, because there is one factory that makes all the shoes for the Army and Navy, and it has to be so equipped with certain kinds of machinery that the average manufacturer cannot make this particular kind of boots; so they are really, to all intents and purposes, out of this bill, except that, of course, the Government would require that factory to live up to these conditions.

The boot and shoe industry is being wiped out in the boot and shoe centers of Massachusetts. How? Why? First of all, it is not a monopoly. It is one industry that is in serious and wide and general competition, in small units. They are moving up to New Hampshire; they are moving up to Maine; they are moving into other rural parts of my own State and paying one-half the wages that are paid in the localities where the labor organizations have been able to demand and exact a living wage.

That is going to increase, and those people are going to get these contracts, and these concerns that have honestly and really been trying to maintain these conditions are going to, one after the other, be destroyed, regardless-I say regardless of Government contracts. A bill of this kind would at least give them encouragement to hold on a time.

So my judgment is that there are large groups in the industry who realize the shift that is taking place and therefore do not want any barriers in the way as to minimum wages and maximum hours.

Mr. MICHENER. Mr. Chairman, I thought it was our present philosophy to develop these rural sections, to furnish the power, and give them an opportunity, furnish a subsistence home where a man could work a half day in the factory and half a day in the field. What you are telling us here is diametrically opposite to what I understand to be the philosophy of the program which the country is engaged in.

Senator WALSH. Of course, the Government has had nothing to do with the movement I have been describing. It has been going on for years. The Federal Government has nothing to do with that.

Mr. MICHENER. The Federal Government now is accelerating that movement and making it possible and encouraging it.

Senator Walsh. What I am describing now is capitalism's, industry's protest against living wages and living conditions by moving out into localities where wages are much less and living much cheaper, into the rural sections. Now, what you do about the Government's activities in that direction, of course, is another proposition.

Mr. MICHENER. I did not want your philosophy and the philosophy of the administration to get at loggerheads here. I want you to get along together.

Senator WALSH. I think we can be capable of doing it, sir. I think I can differentiate between a Government activity and a private industry activity. Just now the Government is not doing any. thing to break up high labor conditions and standards in the big industries of this country. That industry is doing.

When I went home the Fourth of July I was home for 3 days, and I said to one of my friends that the thing that impressed me more while I was home, above everything else, that was clear in my mind, was—what? The cheap wages that were being paid, immediately within 2 months. I remember distinctly of having a young college boy who was working in a department store in the city of Worcester at $9 a week. I heard of several cases of that kind.

Now, we have got to do something to stop that, especially when we are trying to increase the purchasing power. I tell you gentlemen we have a chance, in my judgment,

we have in my judgment a great chance, to make a great move in the direction of social justice, by saying that the worker is a human element that must be dealt with and considered and given reasonable assurance of protection in all Government work. And that is the philosophy behind this whole bill.

I thank the chairman for your courtesy and attention.

The CHAIRMAN. I believe that that concludes the hearing on this bill. I do not have in mind that there is anybody else who has asked for time here.

Mr. ROBSION. Mr. Goodloe from one of the departments had an amendment. I don't know whether he wanted to present it now or not.

Mr. GOODLOE. Mr. Chairman, may I have about 2 minutes ?
The CHAIRMAN. Yes.

STATEMENT OF JOHN D. GOODLOE, COUNSEL FOR THE COMMODITY

CREDIT CORPORATION, WASHINGTON, D. C.

Mr. GOODLOE. Mr. Kane, the witness before the committee a few minutes ago, addressed his remarks to section 12, which, as you recall, exempts loans made by the Farm Credit Administration or any agency under the supervision of the Farm Credit Administration.

Mr. RobsIoN. Mr. Chairman, are you going to start that over again, reading it?

The CHAIRMAN. Perhaps you would just as well state your name and whom you represent.

Mr. GOODLOE. John D. Goodloe, counsel for Commodity Credit Corporation.

Senator WALSH. That is the same amendment that has been submitted by different witnesses, and I understand we are all agreed that what the farmers want we will put in.

Mr. GOODLOE. Mr. Kane, or somebody asked the question which indicated that he did not know exactly what the relationship was to the Farm Credit Administration, if any, thinking probably that the section as it now stands exempts the Commodity Credit Corporation, which is not true, and all we are asking is that we add the words "and Commodity Credit Administration.”

The CHAIRMAN. There is no difference between yourself and Mr. Kane as to where you want those words, is there?

Mr. GOODLOE. No, sir.

The CHAIRMAN. All right. Thank you very much. Anybody else?

Mr. A. J. HETTINGER. Mr. Chairman, if I could have less than 5 minutes by your watch I would like to make a comment or two.

The CHAIRMAN. We are obliged to go now at once, but you state off. If we have to, we will just cut you off.

What is your name?
Mr. HETTINGER. A. J. Hettinger.
The CHAIRMAN. Whom do you represent?
Mr. HETTINGER. I am speaking for myself.

The CHAIRMAN. We cannot take individual witnesses. The House has been in session for 15 minutes now.

Mr. HETTINGER. I happen to be executive secretary of the durable goods industries committee, but not having the opportunity of canvassing my committee, it would be unfair for me to speak for them in the few words that I would say.

The CHAIRMAN. I think you are going to have to file a statement. We have no authority to sit here—I thought that if you did represent a group and if you speak with authority from them we would hear you very briefly, but Members have just suggested there is private calendar today, matters have been in progress in the House now for 15 minutes, and if you will submit a statement we will be very glad to incorporate it.

Mr. HETTINGER. I could make it in 3 minutes.
The CHAIRMAN. We are closed right now. We have adjourned.
Mr. HETTINGER. All right.
(Accordingly, at 12:15 p. m., the committee adjourned.)

PRISON LABOR AUTHORITY,

Washington, D. C., August 20, 1935. COMMITTEE ON THE JUDICIARY,

House of Representatives, Washington, D. C. MR. CHAIRMAN AND GENTLEMEN : In presenting the following suggestion with reference to Senate 3055, I am in no way appearing in opposition to the bill, but rather to supplement the suggestion made by the Solicitor General, Mr. Reed, this morning with regard to commodities manufactured in Federal penal and correctional institutions for the Federal Government, on behalf of similar commodities manufactured in State penal and correctional institutions for State governments, or their political subdivisions. While I assume, with Mr. Reed, that nothing in this act was designed to interfere with the State-use program of prison industries, the wording in section 2a, page 6, lines 22, 23, 24, and 25, taken together with page 8, lines 1 and 2, might be construed to prevent the use by States or political subdivisions of supplies made by the prison department of those States or political subdivisions on highways or other projects on which Federal moneys are loaned. If this were true, then the Federal Government would be in the position of prohibiting the States from making products in their own institutions for use on any project for which a Federal loan had been secured. This would be in violation of the well-recognized principle adopted by the Federal Government and by 24 States, and recognized by the other 24 States, that the use of convict labor for State use is an acceptable procedure.

It may be added that while the Federal Government does not use contracts in the purchase of prison products from the Federal Prison Bureau for any of its departments, such contracts are required if there is any exchange between the Federal Government and the States, or between States, and in most States between the prison department and other State or local government agencies.

It is true that during this depression many States have refrained from using convict labor on projects where free labor could be employed, even though such projects were for State use. However, to prohibit the use of prison-made products on Government projects except those which are designed primarily for the relief of unemployment might set a precedent which would be disastrous in its effects.

In crder to avoid this possibility, the following addition to Senate 3055 is suggested :

Nothing in this act shall apply to commodities manufactured in, or services rendered by, Federal, State, county, or municipal penal or correctional institutions for the Federal, State, county, or municipal government, or any department or agency thereof.” Respectfully submitted.

HOWARD B. GILL,
For the Prison Labor Authority.

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