TO REGULATE THE TEXTILE. INDUSTRY TUESDAY, MAY 18, 1937 HOUSE OF REPRESENTATIVES, The subcommittee met in the caucus room, Old House Office Building, at 10:20 a .m., Hon. Kent E. Keller presiding. Present: Representatives Keller (chairman), Gildea, Schneider, and Smith. Mr. KELLER. The committee will come to order. A number of the members of the committee have asked me to start this hearing even though they may not be present at the beginning. Therefore, let us begin for today. We are going to attempt to make an arrangement whereby all parties who desire to be heard may be heard. There is a large increase in the number of those who are taking an interest in this bill, and we are going to see whether we can hold three sessions instead of two and give everybody a chance to be heard, because this subcommittee is trying to learn something. I had hoped that we might have still more people here at one time this morning, because I want to talk to the industry a minute or two before we start to take testimony. I shall repeat this little talk to the next group that appears. It seems to me that the second most important industry in our country, of the 16 groups, and the one that employs the largest number of wage earners, ought to have within itself sufficient knowledge to enable this committee to iron out the shortcomings of the industry. I am not able to understand that any man could be justified in entering an industry the profit of which would depend entirely on the pay of starvation wages. It is perhaps an old truism and yet one that applies to every industry thoroughly, that any business that does not depend ultimately or basically on plain justice between man and man cannot be permanent in its work. One cannot succeed permanently on unfairness or injustice. One may do it for a time but not for long. The men who represent the investors in industry should be the very first ones to assist us in arriving at the facts that would come nearest to enabling us to write a bill that will make the business successful as a whole, successful for the operators, successful for the investors, and successful for the wage earners. There is absolutely no reason why that shall not be done. There is every reason why it should be done. is, in my opinion, the business of government to create a better condition. I am asking the gentlemen here to meet and counsel with us, assuring them that we are not prosecutors and certainly not a It committee of persecutors, but we are a committee seeking broadly the facts in relation to this great industry as a part of the business of the American people. Unfortunately, we have carried the idea of profit so far that we are no longer satisfied with rational and reasonable profit, as our ancestors appear to have been, but if a thing does not pay, say, 100 percent, we do not want anything to do with it. We have got to get back, if we ever were there, to the idea that a fair return on an investment with security for that investment is the best thing for the investor. We have got to come to the point where we will understand that the rights of humanity, where they come in conflict with the rights of capital, are invariably the dominating factors in all justice. Generally speaking, it is true that the right of capital and the right of labor go along together, if we will only be considerate of one another. We have not been that, I am sorry to say. We have recognized, unfortunately, the existence of a conflict between capital and labor. There ought to be no conflict between legitimate capital and the legitimate demands of labor. It is the business of Government insofar as Government can accomplish that, to see to it that the conflict is destroyed or abated and that we effect cooperation where we have had conflict. Therefore, I am appealing to the gentlemen who are to appear before this subcommittee to join with us in that spirit of undertaking, I am inviting them to give us suggestions for ironing out those things, because if you are not making a legitimate profit, this committee wants to help you get a legitimate profit and maintain it permanently. You cannot do that unless you do the fair thing by the men who do the work. We have gotten away, I hope eternally, from the old idea of laissez faire, which never was fair but which simply meant every fellow for himself and the devil get the hindmost in business. We must get away from that permanently. I say very frankly to the men controlling the capital of this country that unless we do get away from that and come to a cooperative basis between capital and labor, the capitalistic system will suffer as a result of that failure. Therefore, I am appealing to the men who believe as I do that the capitalistic system can be continued in America to the greatest possible advantage, but, if we are to do that, we must understand perfectly well that there is no such thing as standing still along any line, either industrially or economically. We have got to understand and hold in mind constantly that the people of this country are on the march. They are going somewhere. We ought to invite one another to join in that march, and I am inviting the gentlemen here this morning especially and insisting that I be permitted to repeat that we are not wanting to accentuate conflicts but to appeal to you to give us the information and the consideration that may put us at least in the hopeful position of striving successfully toward a cooperation between legitimate capital and legitimate labor. Pardon me for delivering this lecture, but I am not charging you anything for it. I make this appeal to you gentlemen because the American people are interested-all the American people are interested-right here and we are trying faithfully to serve them. All we ask is that you go along with us and help us serve them. I thank you for your attention. I want to introduce Mr. Hankin again, because, as you know, after each day's hearings we get together and consider the facts that were brought out and that may induce us to make changes in the bill as it is before you all at the present time. I will, therefore, ask Mr. Hankin to speak to you first. If you all have copies of H. R. 238, you can follow him as he speaks. STATEMENT OF GREGORY HANKIN Mr. HANKIN. Mr. Chairman, as was made clear before, there is nothing in this subcommittee print which is frozen. The subcommittee print is subject to change from day to day, depending upon the facts and arguments presented at these hearings. Last Tuesday I suggested a few changes and I am suggesting further changes now. I have incorporated, however, the changes which I suggested last Tuesday, because quite a number of you who are here now were not present then. The first change is found on page 10, line 17, relating to set-up of the National Textile Commission. Strike out the word "actively, so that the sentence will read: "No Commissioner shall engage in any other business, vocation, or employment." That is necessitated by the question raised as to whether the Commission should be the same type as is the Federal Trade Commission. The word "actively" does not appear in the Federal Trade Commission Act. On page 15, strike out the first sentence of subsection (c). That would make that subsection read as follows: Whenever the Commission, upon reasonable notice and hearing, finds that such association no longer meets the qualifications set forth in subsection (a) hereof, it shall cancel the registration herein provided, and thereafter such association shall have no right to appear in the interest of its members as provided in subsection (b) hereof. That raised unnecessary questions. After consideration, I found that sentence did not add to or subtract from the power of the Federal Government to investigate associations. In order to avoid unnecessary discussion and conflict about something which does not add to or subtract from, I thought it would be best to leave that sentence out. On page 22, line 4, the numeral 6 should be 5, so that the phrase will read: "registered under section 5 hereof." Then that part of the paragraph will read, "a trade association, registered under section 5 hereof." On page 24, line 23, the word "collector" should be "collective." Then that part of the section would be that "The wages determined by collective agreements." Subsection (d) has undergone quite a change, and I suggest that subsection (d) should read as follows-you will see that this change will avoid a great deal of discussion whether in any division or subdivision of the industry its basic week should be 40 hours or some other number of hours The basis for determining minimum wages shall be a forty-hour week of eight hours per day: Provided, That if upon investigation the Commission finds that a basic week of less than forty hours would remove hardship or an adverse effect upon commerce, or would result in a more reasonable minimum weekly wage according to the standards and limitations prescribed in subsection (d) hereof, or would result in a diminution of unemployment burdening or restraining commerce the Commission shall accordingly reduce the number of hours of the basic week and basic day: Provided, however, That the Commission shall have no power to reduce the basic week below a thirty-hour week of six hours per day. For all work done in excess of the basic number or hours per day or week, employees shall be paid at the rate of time and one-half, and for all work done on Sundays and legal holidays, they shall be paid at the rate of double time: Provided, That for the hours from midnight to 6 a. m. the basic pay shall be computed at the rate of time and one-half, and the overtime pay shall be computed at the rate of double time. This type of provision, although leaving the 40-hour week, would enable the Commission, whenever it might be to the interests of the parties concerned, and whenever the findings enumerated can be made, to change the basis. I had in mind a situation of this kind: Let us suppose that in a given division or subdivision of the industry the plant operates, say, 60 hours a week. Sixty hours are too long for one shift and, if you adopt a basic rate of 40 hours, you are bound to have a great deal of overtime pay. Under those circumstances, if the Commission should find certain facts, it may go to the extreme provided in this subsection and determine that there shall be two shifts of 30 hours each. Of course, whether those changes from 40 hours a week are applicable to a particular division or subdivision of the industry would depend entirely upon the facts relating to that division or subdivision of the industry. Mr. KELLER. I have a suggestion, but it has been brought up before. Nobody wants the graveyard shift. It has occurred to me, and I borrowed the idea, that if we put time and half for the graveyard shift, that will solve the question and we will not need to outlaw it directly. For that reason, if a man has some profitable seasonal or styles that he can, by working the graveyard shift and be paid time and a half for handling it, let him do it, but that would preclude him doing it as a regular practice. I think that would really solve pretty much the question of the graveyard shift. I think everybody would like to get rid of it without doing it arbitrarily. I Mr. HANKIN. Are there any questions concerning section 9 (d)? Mr. CHENEY. It would seem to me in the best interests of the bill and all concerned if this new section should include a provision for due notice and public hearing it would be better. Without that, the Commission would have the arbitrary authority in such investigations as it may wish to make and it might make them without due notice. refer to changing the hours of work, which includes a change in wages. Mr. KELLER. I think that would meet thoroughly the approval of the committee. I am sure of that. I think it is a good suggestion. If you will do all as well as does Mr. Cheney, we will get along very well. Mr. HANKIN. Are there any further questions on that section? Mr. SCHNEIDER. Does this section relate to 6 hours on the midnight shift? Mr. HANKIN. Yes. Mr. SCHNEIDER. Does the textile industry operate continuously? Mr. KELLER. Sometimes it does. Mr. HANKIN. I understand from the testimony that it does not. Mr. SCHNEIDER. If it operates continuously, there are shifts working 8 hours each. Mr. HANKIN. It operates continuously when it does operate. Mr. SCHNEIDER. If there are continuous shifts of 8 hours each, the last shift would work 8 hours. Why do you say from 12 o'clock to 6 o'clock they shall be compensated by time and a half? Why not pay them time and a half for that whole shift from 10 o'clock to 6 o'clock? Mr. KELLER. That same thing has occurred to me. Mr. HANKIN. As I understand, every third shift begins at 10 o'clock. The reason for adopting that provision covering the hours from 12 to 6 was to allow leeway for the different shifts that work. However, those are matters that would depend upon the facts relating to the industry and, if upon the facts it should be more applicable or more desirable to make it from 10 o'clock p. m. to 6 o'clock a. m., that is a matter which does not lie within my field, and I shall be glad to accept any suggestions about it. It does not involve any question of law, but merely a question of economic policy. Mr. KELLER. I think that suggestion is extremely well taken. The same thing occurred to me. While I see what Mr. Hankin is thinking might be all right, at the same time it seems to me that we ought to make the idea apply to whatever hours constitute the graveyard shift, if that can be done. If some of you gentlemen who are guilty of running graveyard shifts will give us some information along that line, we shall appreciate it very much. Tell us how you change the work hours, and so forth. Mr. HANKIN. On page 26, line 2, after the words "$15 per week" insert: "as computed in subsection (d) hereof." Then the subsection would read as follows: Within thirty days after the effective date of this Act, $15 per week, as computed in subsection (d) hereof, shall be the minimum wage for all common or unskilled labor and all clerical and office employees within the industry, On page 26, at the end of line 6, insert "registered under section 5 hereof." On page 26, line 8, change the word "any" to "the". Then that part of the subsection would read: The Commission finds that the $15 minimum wage is excessive for the division or subdivision of the industry. Page 26, line 20, add the following to the first paragraph of subsection (g): If upon application of any employees of a member of the industry, acting individually, collectively, or through their labor organization (not organized or existing in violation of the National Labor Relations Act), and upon due notice and hearing, the Commission finds that the $15 minimum wage is unreasonably low for the division or subdivision of the industry, as compared with the standards set forth in subsection (c) hereof, the Commission shall increase the minimum wage by the amount of the deficiency and the burden of proof shall be on the applicants to show such deficiency. You will remember that this section makes the temporary minimum wage $15 a week and permits employers to come before the Commission and show that $15 a week is excessive. Mr. KELLER. If it is. Mr. HANKIN. Yes, if it is. While shifting the burden of proof, against employers this section recognizes that if $15 a week is excessive, the Commission may reduce the minimum wage by that excess. The question arose whether that same remedy could not be open to employees who might claim that $15 a week is not enough. Therefore, at the end of the first paragraph in subsection (g) I have added this: |