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minimum wage for Wyoming that you can for Massachusetts or Texas or Ohio. There cannot be the same hours in every industry. You have got to have the same elasticity that you do with other elements.

You take the example of the Navy Department in building battleships, and all we ask in this bill, that maximum hours on that battleship shall be so many and the minimum wages shall be so much and no child labor. That is all we are doing.

The CHAIRMAN. Senator Walsh, you said that when the contract is made it cannot be changed.

Senator Walsh. Except by the agreement of the contractor

The CHAIRMAN. You mean when the contract is made or when the bids are advertised for the specifications for bids?

Senator Walsh. When the contract is made there can be the changes that are made by mutual agreement between the contractor and the Department there. But when the Government attempts to charge the contractor with violations that he says he has not committed, he is given a right to a hearing. That is the point.

The CHAIRMAN. Let me ask you this question, Why couldn't it be that the specifications in the bids would not be altered? And this is the reason why I ask the question: If, after a bid has been made, you permit the successful bidder, in effect, to make a new contract with a Government agency, wouldn't you unnecessarily expose the whole scheme to things we would like to avoid in government?

Senator WALSH. No doubt about that.

The CHAIRMAN. Could you work it so that the specifications would be in the advertisement and that the bid be granted to the lowest bidder of those who would meet the specifications?

Senator Walsh. It has to be. Nobody else will.

The CHAIRMAN. You do not quite follow me. Grant the contract to the lowest bidder who meets the specifications, and then avoid, if possible, a modification of the contract between the governmental agency and the successful bidder. I am expressing it very poorly.

Senator Walsh. When I was speaking about modifications and changes in the power given the President I was not referring to what takes place after the lowest bidder gets the contract. I was speaking of prevention of arbitrary power by the President because the contractor can say, “I want a hearing. I have not violated these terms. I am sure that I haven't.” There has got to be hearings. That is the point I was trying to make. But there is nothing in this bill that changes the present law about the compulsion to give the contract to the lowest bidder applying with these conditions.

The CHAIRMAN. Yes. Senator Walsh. I am sorry, Mr. Chairman. I am afraid I have taken too much time.

Mr. CHANDLER. May I ask a question there, Mr. Chairman? The CHAIRMAN. Yes. Mr. CHANDLER. I just want to understand section 1 (a), which relates to contract provisions. Apparently that section really provides for a covenant by the principal contrator that every subcontractor or supplier of articles, materials, et cetera, shall comply with these conditions. That pretty nearly carries that one contract down to every industry that is affected by that contract, does it not?

Senator WALSH. That is true; yes. The bill reaches very far into the field of requiring these minimum labor conditions with those who directly or indirectly contract with the Government.

Mr. ROBSION. I want to put a question, Senator. I notice here there is quite a good deal said about insuring minimum wages. On the matter of this works bill—and I guess this is directed most especially to these four billions that we spent for works—some of us in the House tried to get a minimum wage amendment adopted, and it was adopted in the Senate. Administration power, however, was exercised and defeated the minimum wage. Now, what is the purpose of this, if the administration did not want any wage and this is going to insure a minimum wage! Not only a minimum wage in the contract, but it reaches down to the coal mine that furnished the coal and the lumber mill that furnished the lumber, and all the

way down.

the wages.

Senator Walsh. As I understand the administration's position here, it is that it has two funds, one for carrying on regular contract business of the country. In the spending of that fund it complies absolutely and to the letter of the law. The other fund is a relief fund, specified and labeled “Fund for Relief”, and instead of giving $5 or $10 to somebody for relief it gives them some kind of employment and pays them relief employment wages, what they think to be

Mr. Robsion. Yes; but it prevents the other people from getting work.

Senator Walsh. Personally, I think it would have been better if we never went into that field of giving relief without employment and paying proper wages. But I can well understand the Government's position, that this is merely relief money and we give you this wage because it is only relief, and we are not doing this work in the regular order and from the regular funds.

Mr. Robsion. I get so many complaints from the labor organizations.

Senator WALSH. I do, too. Mr. ROBSION. Also pointing out that the result of this is that the fellow that went on relief can get work but the man perhaps that was independent and would not go on relief could not get work.

Senator Walsh. Is it not due to the fact that the public has not distinguished between these funds! Relief money is money spent for relief, for food and clothing. That is one kind of relief. The other is the regular funds of the Government for contractual purposes.

Mr. ROBSION. I think the Government ought to confine itself to real public works and pay a real wage and fix hours like it requires from the citizens.

The CHAIRMAN. This hearing has really been called to give an opportunity to people to be heard who are opposed to the bill. I mean that was primarily why it was called. But it has seemed best to have the statements made that we have had made. I think now we shall have to proceed, at least for the moment, to getting the views which will express the opposition to the bill. I hope those who are opposed to the bill have been good enough to follow the suggestion of the chairman and have somebody here who more or less represents the opposition to present the opponents to the bill.

Before we begin, we have less than an hour on an important bill, and some of the members of the committee feel that they must be on the floor today.

Mr. MICHENER. The Guffey bill comes up. Some of us want to vote.

The CHAIRMAN. How about after you vote on the Guffey bill!

Mr. ROBSION. Mr. Chairman, I think this is of so much importance and far-reaching that there ought to be as many heard as can be heard reasonably.

The CHAIRMAN. I know, but let us get at this other thing first. Mr. Robsion. I am expressing myself as willing to come back after the vote over there and give others 'opportunity to be heard.

Mr. MICHENER. What is the program, do you know, Mr. Chairman? If we have some important things coming up we ought to be there.

The CHAIRMAN. How many members of the committee can be back here at 3 o'clock?

Mr. MICHENER. I will come back unless there is some important legislation over there. Mr. CHANDLER. I will.

The CHAIRMAN. That is settled, then, and we will meet back here at 3 o'clock.

(Discussion off the record.)

The CHAIRMAN. Who is the spokesman for the opposition? We will run until 10 minutes after 12.

Mr. FLETCHER. Mr. Chairman, I only wanted 5 or 10 minutes, not in opposition to the bill, but to suggest an amendment. I thought while the other gentlemen are organizing I might be heard, possibly.

The CHAIRMAN. Yes. All right; we have agreed to hear you, and you may proceed.

STATEMENT OF R. V. FLETCHER, REPRESENTING ASSOCIATION

OF AMERICAN RAILROADS, WASHINGTON, D. C.

Mr. FLETCHER. Mr. Chairman, my name is R. V. Fletcher. I represent the Association of American Railroads. My only purpose in appearing before this committee is to call attention to the very wide, broad language of this bill which might be by some people construed to include railroads subject to the Interstate Commerce Act so far as their rates are concerned, and subject to the Railroad Labor Act so far as their wages are concerned.

You will note that in the first section of the bill there is the use of the word “services.” Now, would it be said, Mr. Chairman, that when the Government proposes to ship any Government freight by railroad or to tender for movement by railroad of troops or other persons for whom the Government is responsible, transportation for which the Government is responsible, that this bill now would be applied to the railroads by reason of the use of the word “services” as it appears here in the first section of the bill?

Now, I call attention to the fact that the railroads were not subject to the codes, not subject to the National Recovery Act, not subject to the President's Reemployment Agreement, as expressly ruled by the Federal Coordinator of Transportation in a memorandum which he gave to the public and which was sanctioned and ap proved by the President of the United States.

Now, we hope that we will not be put in the position,

The CHAIRMAN. You mean now that the matter has been considered and you have been excluded by the consent of Government agencies from practically everything? Mr. FLETCHER. From the National Recovery Act; yes. The CHAIRMAN. You never had a code?

Mr. FLETCHER. We never had a code. We were not required to execute the President's Reemployment Agreement, for this very good reason, that the rates which were charged by the railroads are fixed, as we all know, by the Interstate Commerce Commission, and they could not increase their rates so as to pass on the expense to the public if they were required to undergo expense under the act.

Furthermore, so far as the hours of labor are concerned, they are fixed by law, the 16-hour law and the 9-hour law as applied to telegraphers and so on, are fixed by an elaborate body of congressional legislation. Mr. ROBSION. Does not section 6 there give you protection?

Mr. FLETCHER. You mean the President would have the power to exempt us?

Mr. ROBSION. Yes; make exceptions. Mr. MICHENER. He can do anything. Mr. Hess. Recommended by an agency of the Government! Mr. FLETCHER. Recommended by an agency of the Government. Now, why force the railroads, who were not under the codes, to go to the doubtful method of trying to get some agency of the Government to recommend a thing to the President and then an order would exempt them from the provisions of the law?

So far as the wages are concerned, they are all fixed in contracts which have been made between the railroads and the organized railroad labor under the general supervision of the Government agencies, as provided in the Railroad Labor Act.

Senator WALSH. What contract or kind of contract does the Government make with any railroad?

Mr. FLETCHER. Why, it makes a contract to transport its material,
Mr. HANCOCK. Carry the mails.
Senator Walsh. Carry mail, that is true.
The CHAIRMAN. That would come under the operation of the bill?
Mr. FLETCHER. I am afraid so.

Senator WALSH. Anything that is in the nature of a written contract comes under the operation of the bill.

Mr. FLETCHER. A bill of lading is a written contract, Senator.
Senator WALSH. I suppose so.

Mr. FLETCHER. I apologize for taking your time. I would like to suggest to the committee that section 12 (a), if it is found on page 20, be so amended as to provide

Nothing in this act shall be construed to apply to common carriers subject to the Interstate Commerce Act and to the Railroad Labor Act.

I do not think the exception should be made except that apply to both of these agencies, whereby the railroads are, and other carriers are put into a separate class by themselves entirely. They have their own code, Mr. Chairman.

Senator Walsh. I think you spoke to me about this.
Mr. FLETCHER. I did, Senator.

Senator Walsh. I rather agreed to the proposition, and the only reason it was in the bill was that the President in his Executive order and during the whole time the N. R. A. was in operation left the railroads out of operation of it.

The CHAIRMAN. We thank you very much, Mr. Fletcher, for your suggestion.

Mr. FLETCHER. May I file this memorandum of the Federal Coordinator of Railroads to the President, giving the reason in detail why it should not be done?

The CHAIRMAN. We have an understanding of it, I believe, and we have your suggested modification.

Mr. FLETCHER. Very well. Thank you very much. I did speak to Senator Walsh about it, and I understand that he agreed to it in principle.

Senator WALSH. It is not intended to apply.

The CHAIRMAN. Who else here can speak in as short a length of time and as much to the point as Mr. Fletcher?

Mr. FULBRIGHT. Mr. Chairman, we have had no opportunity to get together as yet, and I would suggest that Judge Č. L. Bardo, of the National Association of Manufacturers, appear, and when we recess at noon we will meet together and try to organize our presentation.

The CHAIRMAN. Very well; we will hear you now, Mr. Bardo.

STATEMENT OF C. L. BARDO, PRESIDENT NATIONAL ASSOCIATION

OF MANUFACTURERS, WASHINGTON, D. C.

Mr. BARDO. Mr. Chairman and gentlemen of the committee, the National Association of Manufacturers, representative directly and indirectly through State and local manufacturing associations of a large segment of American industrial life, and with deep concern for industrial recovery and prosperity for all, submits below its views upon Senate bill S. 3055 now before your honorable committee.

My remarks will deal only with the practical effect of the bill upon industry, as it passed the Senate.

Industry wants to go full speed ahead. We believe that we are entitled by experience to call the attention of the appropriate authority when obstacles are being put in the way. We are opposed to the bill for the following reasons:

The dollar value, volume, and geographic distribution of all Government purchases, direct and indirect, represent the products of approximately 50 percent of the industries supplying Government material so that the effect upon industry would be more extensive than hertofore stated.

It proposes to exclude from its provisions all direct Government production by departments or agencies in competition with private industry.

It attempts by indirection to do that which the Supreme Court held it was forbidden by law to do directly.

It would do irreparable damage to private industry by driving out of Government supply directly or indirectly every industry fail

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