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Congress can by indirection control wages and hours and prohibit child labor, when it cannot directly exercise such control.
Stated concisely, since the Government cannot by statute, compel a State to withhold contracts from those engaged in intrastate manufacturing, who employ child labor, can it bribe them to do so.
The question is novel and as yet not directly decided by the Supreme Court. By analogy, however, and on principle, a strong argument can be made for answering it in the negative.
The provision for making the act retroactive is ambiguous, but if literally interpreted, is void because violative of the fifth amendment to the Constitution. However, the particular section, because separable, might not invalidate the entire act.
Those are observations as to the legal aspects only. In closing, Mr. Chairman, I submit that your committee has a definite choice by approving the bill of assuring, in our judgment, perpetuation of control of industry by Government, which will be destructive; increase of confusion and discouragement of enterprise; the retarding of recovery from a depression too long extended by this legislation and experimentation; an opportunity to agitators to promote strifeor through your disapproval you will aid in the restoration of the employer-employee relationship within the establishment which has been responsible for the highest standard of living in the world; giving industry a chance to progress and succeed so that it may cast off the depression and still survive; taking advantage of the improved business conditions to go forward, because we are on our way,
and affording opportunity to wage earners to increase their competition and comforts.
Legislation by indirection is only used where there is desire to hide the real motive. While the proposed bill purports to deal with Government contracts, it does, in effect, perpetuate the burdens of N. R. A. without offering any of the virtues. We respectfully urge that the committee disapprove the bill.
The CHAIRMAN. We are very much obliged to you, Mr. O'Leary.
Representative Ralph E. CHURCH. Mr. Chairman and members of the committee, I have a request from Mr. James L. Donnelly, executive vice president, Illinois Manufacturers Association. He is at Chicago now. He very much desired an opportunity to be heard. I am very hopeful I might get your committee to permit him to be heard for a few minutes tomorrow, since Mr. Donnelly represents the business and manufacturers of Illinois, and it is a large industrial State. I would respectfully request that he be given a chance to be heard. He does not say in his letter which side. I assume it is in opposition to the bill, or he may be able to make suggestions, but he is very anxious to be heard on it. I respectfully ask that you give me a chance to let him know when he can be heard before hearings are closed on this bill, if no later than tomorrow.
Mr. ADAIR. Mr. Chairman, that is the same gentleman I called
The CHAIRMAN. Yes; I remember that.
Mr. CHURCH. I am very anxious for Mr. Donnelly to be heard. He is a resident of my district.
Mr. ADAIR. I would like to make this suggestion: I know how the time of this committee is being taken up; and I will suggest that if the committee would give permission to him to, instead of making a statement, file a brief in argument, either one would be quite satisfactory to him.
The CHAIRMAN. If you let him file a brief I am sure the committee would be glad to have it and would certainly allow him to do that.
Mr. CHURCH. Mr. Chairman, I have heard from Mr. Donnelly, and I know he is very anxious. I think Mr. Donnelly has some suggestions on this bill.
The CHAIRMAN. We will not take up any more time on the request.
The committee probably will not be in session tomorrow. The only thing I can suggest is that Mr. Donnelly can take his chance if he comes. He had his opportunity to be heard today. We gave notice on Friday on Saturday.
Mr. CHURCH. Mr. Chairman, he did not get the notice; I know that.
Mr. ADAIR. I wired him to come ahead. Mr. CHURCH. He did not get the notice, because he lives in my district.
Mr. Chairman, may I get a denial or an answer to my request.
The CHAIRMAN. No; the only thing you can get is this: The committee does not know whether it is going to be in session tomorrow. Mr. Donnelly can come along, and if the committee is in session we will be glad to give him 5 minutes. If the committee is not in session, we will be glad for him to file his brief.
Mr. CHURCH. Will these hearings close today, Mr. Chairman? The CHAIRMAN. We do not know. There is no way to know. Mr. CHURCH. Thank you.
The CHAIRMAN. I wish I could help you more about it. But we cannot call a committee in session to hear a man 5 minutes.
Mr. CHURCH. I am not asking for 5 minutes; I am asking for him to be heard.
The CHAIRMAN. That is the best we can do about it. Let him come, and we will do our best to let him be heard.
Mr. Edgerton, do you wish to be heard ?
STATEMENT OF JOHN E. EDGERTON, PRESIDENT SOUTHERN
STATES INDUSTRIAL COUNCIL, NASHVILLE, TENN.
The CHAIRMAN. State your full name, Mr. Edgerton, and whom you represent, please, sir.
Mr. EDGERTON. John E. Edgerton, representing the Southern States Industrial Council.
The CHAIRMAN. What is that?
The CHAIRMAN. No, sir. I said, Who constitutes the Southern States Industrial Council?
Mr. EDGERTON. The Southern States Industrial Council embraces in excess of 10,000 industrial units—manufacturing units, for the most part-in 14 Southern States.
The CHAIRMAN. In other words, you represent the manufacturers in that section?
Mr. EDGERTON. Yes, sir.
Mr. EDGERTON. Mr. Chairman and gentlemen, anticipating the un. fortunate circumstances of haste under which this hearing would
probably have to be held, I took the precaution of writing down in advance of this meeting the most of what I wish to say; and with your permission, I will read the few brief sentences that I wrote merely as a basis of additional remarks that I hoped to be able to indulge in.
Representing, as president of the Southern States Industrial Council, a constituency of more than 10,000 industrial units employing approximately 1,000,000 good Americans in 15 Southern States, I beg to register with you a most earnest and vigorous protest on their behalf against this bill.
On its face, this bill appears to be an effort to reincarnate the unlamented National Industrial Recovery Act which was discredited and invalidated by the Supreme Court of the United States. At any rate, the objectives seem to be the same. Assuming, however, that the constitutional phases of the bill have been or will be presented by others that are better prepared for such discussion than I, and wishing to conserve the valuable time of this committee as much as possible, I wish only to point out and emphasize a few other outstanding objections to the bill from the viewpoint, particularly, of southern industry.
Clearly, the bill intends to concentrate considerably more power in the hands of the Federal Government to control, regulate, and order the lives of its citizens. Already the Government has what amounts to a practical monopoly of the Nation's money and credit. By the vast expansion of its functions and operations into the fields of business and industry, the Government has also become the Nation's chief purchaser and consumer of goods, materials, and supplies of all sorts. That means, of course, that practically all of our industries are more or less dependent upon the patronage of the Government to maintain their own normal operations.
Instead, therefore, of affecting only a comparatively few industries and employees, as might be assumed, the blighting hand of this bill would fall directly or indirectly upon every industrial and business unit, and all the employees thereof, in the United States. It provides that invitations for bids for Government supplies and materials shall specify the maximum hours, minimum wages, and other conditions to be complied with in the production of supplies and materials. Not only are successful bidders bound by these conditions, but in the carrying out of their contracts they must see to it that their own raw materials and other supplies are purchased only from those who conform to the same conditions.
It requires no mastermind to see the confusing impracticalities in such a proposition. Not only do these provisions of the bill apply to all supplies and materials for the agencies of the Federal Government, but also to any State or municipality and any organization receiving Federal aid or loans. Obviously, about the only way for any citizen to escape the penalties of noncompliance with the visions of this bill would be for him to do no business of any sort at any time with the Federal Government or any of its agencies or subdivisions.
The primary objective of the bill, gentlemen of the committee, is patently to establish uniform hours and wages throughout this treinendously large and diversified country of ours. It is intended-or its effect would be to wipe out wage and other differentials which
have been established by natural law throughout the ages. That means, of course, that the industry and business of the Southern States could not expect to enjoy any appreciable amount of the Government's patronage. The vast volume of unanswerable argument which was offered against the N. R. A. and its plans for the regimentation of American industry can be oflered against this bill, which is undertaking in a more subtle way to do exactly the same thing. There cannot be a doubt that the bill, if enacted into law, would be almost murderous in its effect upon southern industry and that of other sections whose economic life is governed by similar conditions.
Aside from these considerations, gentlemen of the committee, there has been no audible demand for such shackles upon industry and business as this bill would fasten upon them, except from those small minorities in our country who are seeking more and more power over the Nation's destiny and the lives of its individual citizens. Furthermore, the country as a whole is literally begging Congress to quit and give the people a change to recover from their economic plight by their own efforts and through the utilization of the reduced liberties which they still have. In general, the people are tired, and they believe that Congress is tired. They further believe that enough legislation of this sort has been passed 'for one session. They want a chance to try to digest, try out, and adjust themselves to the revolutionary laws that have already been enacted.
The bill under consideration is one so far-reaching in its terms and certain effects, and is so charged with the possibility of disaster to so many people, that it ought to have much more consideration than it appears possible now for it to receive, and such consideration ought to be under more favorable circumstances than those which now prevail.
Now, Mr. Chairman, I want to add just a few remarks by way of a concrete illustration of what I think the effect of this bill would be upon that part of the territory of this country which I represent.
There are, according to the last census of manufacturers, approximately 31,000 manufacturing establishments in that territory, in those 11 States. Of those, in excess of 29,000 employ fewer than 50 people, or from 1 up to 50 people. Less than 1,000 of them employ more than 100 people. In other words, the vast majority of these plants are small. They are scattered from the southwestern part of Texas to the northeastern part of Virginia, for the most part in agricultural communities, in small towns. Comparatively few of them are located in the large cities. They are far remote from the consuming centers of this nation. They have the disadvantage, therefore, of transportation costs, a considerable disadvantage, particularly those who live in faraway Texas, and those who manufacture articles which are consumed for the most part in the eastern part of the country. They are under that tremendous handicap in their competition with their brethren more closely located to the consuming areas of the country.
Employed in most of those plants, the majority of them, are people who came into these small towns off the farms. Many of them live on the farms and raise their own foodstuff and come into town and work in the factories without any previous experience or training, and while they are potentially as efficient as any labor on the face of the earth, with their limited experience and their lack of training for the most part they are inefficient for at least several months, or sometimes years, until they have had an opportunity to train themselves.
Those are part of the conditions that call for the recognition of what natural law has done through the ages, of wage differentials. So that I always resent that term of suggesting that a man who does not pay as high wages as somebody else is a " chiseler.” The term has been used quite freely here, today—“chiselers.” I want to call your attention, gentlemen, to the fact that there is another species of chiseler in this country, who in my opinion is more odious than even the other, or at least equally so—the chiseler of the Government.
The effect of this bill, it seems to me, would be to establish a sort of a monopoly of chiseling. It would certainly cut out thousands of manufacturing units from any participation in Government patronage. The Government would undoubtedly have to pay more for the price than it gets from the limited few who would be favorably situated for taking these Government orders.
Just last week—and I am speaking out of my heart as a sort of a manufacturer myself. I am the chief executive of a small manufacturing establishment located in one of these towns, employing about 250 people. I will say to you that we are able to operate today only by reason of a Government order that we got last week. We were invited to bid on that order, and we were given about 10 days' notice. We were invited to bid and we bid, and we got the order. A great many others got part of the order.
It was a very large order. As a matter of fact, to be specific, it was woolen blankets. As a matter of fact, there was not a manufacturer in the country who could have handled the entire order. It was for more blankets than anyone could handle. Therefore, they were given an opportunity to bid on any part that each thought that he would be in a position to handle.
Mr. WALTER. How do the prices that you are paying now compare with those that you were paying during the time that the codes were in operation ?
Mr. EDGERTON. The prices?
Mr. WALTER. Then, why are you complaining? How would you be affected ?
Mr. EDGERTON. That is what I am trying to explain. We are conforming to all of the conditions of that code save one, and that is with reference to paying apprentices. Our code required paying apprentices, untrained people, who were there for the purpose of trying to learn to produce something, exactly the same as an employee who had been working there all of his life.
That is the only condition of the code with which we are not now complying. We do not pay them as much.
Mr. HEALEY. How much do you pay them?
Mr. EDGERTON. How much do we pay them? We pay them, I think, $2 a day, 5 days a week.
Mr. Ramsay. Is it not true that the real objection of your association is that the N. R. A. destroyed part of your differential in the South as to wages compared to those paid in the North? That is why you are really objecting to the N. R. A.?