TO REGULATE THE TEXTILE INDUSTRY TUESDAY, MAY 25, 1937 HOUSE OF REPRESENTATIVES, The subcommittee met in the caucus room, Old House Office Building, at 11 a. m., Hon. Kent E. Keller presiding. Present: Representatives Keller (chairman), Gildea, Smith, Welch, and Schneider. Mr. KELLER. The committee will come to order. STATEMENT OF HON. FRANK J. G. DORSEY, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF PENNSYLVANIA Mr. KELLER. Representative Dorsey of Pennsylvania desires to make a statement, and we will hear him at this time. Mr. DORSEY. Mr. Chairman and gentlemen of the committee, unfortunately, I have an important committee meeting to attend this morning, therefore I shall be very brief in my presentation. I feel that within the last 2 years this committee has done a remarkably good job in connection with this so-called textile bill; and last year when H. R. 9072, introduced by Representative Ellenbogen in the Seventy-fourth Congress, was being considered by this subcommittee, I submitted a statement setting forth my views in support of that bill. What I stated then regarding the merits of the proposed legislation holds true with increased force today. I represent one of the largest textile centers in the United States, and, having lived in that district all my life, and having rubbed shoulders with both employers and employees in almost daily contact, discussing with them their problems, I think I am somewhat familiar with conditions in the textile industry. I will not burden members of the committee with a repetition of the facts set forth in my previous statement, because they are available in the printed hearings. During the last 15 years I have seen a steady migration of the textile business from Philadelphia. If this were a local condition solely, its remedy would not be in Federal legislation, but, let me repeat part of my statement of a year ago, it is national in scope by its very nature. This migration has been particularly true in the full-fashioned hosiery section of the textile business. I have tried to study the causes and effects of that movement. Just to show some of the effects, I will quote briefly from my statement. 529 Low-wage standards, stepping up of production, other conditions affecting labor, and unfair-trade practices, have driven the industry into competitive situations resulting in the migration of business, closing of factories, loss of employment, labor unrest, and the loss of homes and the savings of those who were forced out of employ ment. Given an equal opportunity on a fair competitive basis regarding hours, wages, and trade practices, the textile industry in Philadelphia will flourish and prosper today as it did before the development of these conditions. If the migration of the industry from any section of the country, the so-called decentralization of industry, was based upon social factors solely, and was for the benefit of both the employees and the employer, it could not be objected to with much logic; however, that has not been the case. I have seen the factories move from my city, leaving behind them hundreds and thousands of skilled workers, some of whom have spent the best part of their lives with the industry, leaving them stranded to work out their existence. These factories have migrated to take advantage of the inducement involving reduced taxation, free land, even the construction of factories to be amortized in the form of rental over a period of years and of a low-standard labor market. To show the effect of this migration from Philadelphia, in the hosiery industry, at one time one of the largest employers of labor in the city, 1,365 full-fashioned machines were lost from 1930 to 1936. Philadelphia had 33 percent of the total machines in place in 1929; in 1936 it had 21.2 percent. Pennsylvania had 61.4 percent of the total machines in place in 1929 and 54 percent in 1936. The loss of these machines to the Philadelphia market represents unemployment for approximately 6,000 workers. During this same period there was an increase in placement of full-fashioned machines in the South from 7 percent in 1929 to 23.5 percent in 1936. During the N. R. A. conditions in the textile industry became somewhat stabilized, despite the "chiseling" that was rampant in some sections of the industry. This provides a fair test of the necessity for national legislation to revitalize and to rehabilitate this, one of the four leading divisions of American industry. But the sick chicken case made a sick industry out of textiles. A comparison of 100 textile mills for the last 6 months under N. R. A. with the last 6 months in 1935, after the N. R. A. was declared unconstitutional, shows production increased 30 percent, sales only 9 percent, prices were reduced 5 to 7 percent, hours of operation were increased 13 percent, and wages were reduced 5 percent. A report of the Bureau of Labor Statistics shows that the average hourly earnings fell in all reported branches of wearing apparel from December 1934 to December 1936, and in the case of men's furnishings by 17.7 percent. There was a decline during this period in hourly earnings in the silk and rayon industry of 6.1 percent, and in knit goods of 2.6 percent. In fact, the report of the Bureau shows conclusively that in those industries which are not subjected to extensive unfair trade practices there has been little or no decrease in wages; in fact, most of them show increases during this period. While in industries such as textiles, suffering under the yoke of unfair practices and unrelenting competition, there has been considerable decrease. Legislative protection alone can solve the problem for these industries. The report shows that a lengthening of hours without a corresponding increase in weekly earnings was a common method of effecting decreases in average hourly earnings. The cotton garment and silk industries were among those showing rather large decreases. In the cotton garment industry 177 establishments reporting show that the total number of man-hours worked increased from 938,020 in May 1935 to 1,068,349 in May 1936, which is a gain of 13.9 percent. The number of persons employed increased 2.6 percent, indicating a substantial lengthening of hours. Hourly earnings were sufficiently reduced so that the aggregate pay roll of all employees in the 177 establishments declined 1.2 percent, or by $5,016 a week. In some of the plants the average hourly earnings decreased as much as 37.5 percent, and in these same plants the number employed increased by 34.2 percent. Their average weekly earnings decreased from $10.88 to $8.23. The volume of business as measured by total man-hours worked increased by 62.2 percent. In the South cuts of 22.5 percent to 37.4 percent occurred relatively twice as frequently as in northern plants. Nine of the 50 establishments in the South made cuts of more than 37.5 percent. In the silk and rayon textile industry reports were received from 144 establishments. Quoting again from the report, I find that— aggregate man-hours of employment increased from 1,147,798 in 1935 to 1,196,329 in 1936, which is a gain of 4.2 percent as compared with a 12 percent increase in all manufactories. However, the number of workers employed actually decreased from 33,947 to 33,517, or 1.3 percent. The weekly earnings of the wage earners in these plants decreased from $522,887 to $515,518, or 1.4 percent. Workers in the silk industry suffered certain immediate and obvious losses in the period under consideration. To begin with, 1.3 percent of the number who had jobs in April 1935 did not have jobs in April 1936. In the second place, those who had jobs earned weekly a few cents less than in 1935, but they worked 1.9 hours more. Their average hourly earnings declined from 45.6 cents to 43.1 cents, or 5.4 percent. And the same story is reflected in the cotton-textile industry. From April 1935 to April 1936 there was an increase of 33.6 average hours worked per week to 36.9 hours, or 9.8 percent. The total employment, measured in man-hours worked, increased 15.2 percent, but the number employed increased only 5 percent. Seventy establishments averaged more than 40 hours a week, per employee, in April 1936. Average hourly earnings decreased 3.2 percent, or from 38 to 36.8 cents an hour. These facts show conclusively the necessity for some regulation in the textile industry. Let me repeat, it is a national and not a local problem. Only by providing an economic wage, not a so-called living wage which only keeps body and soul together, can purchasing power be increased, and, consequently, with increased consumption unemployment reduced through increased production. But increased production brought about by a lengthening of hours, sweatshop conditions, unfair trade practices, and reduction in weekly and hourly earnings will not solve the problem but will only make a bad condition worse. The industry must be regulated. Only the unwise and inexperienced in business will counsel and advocate unnecessary governmental interference in private industry. However, as I stated to this subcommittee before, industry has a responsibility to the public, to labor, and to itself, which stands as an offset to unregulated freedom of action. If an industry does not assume that responsibility, if it cannot correct conditions which react against sound economic principles and the general welfare because of forces beyond its control, because of "chiselers", then a superior authority responsible to the people must attempt to do for industry what it cannot accomplish itself. I speak for the thousands of textile workers in my district; for the honest employer, who sometimes is forced to measures which he himself abhors for those skilled in the textile crafts who are forced out of employment by conditions beyond their control; for those who have lost their life's savings and their homes because their factories have moved from them—Ĩ urge the committee to report favorably the Ellenbogen bill, H. R. 238, so that the textile industry, with its hundreds of thousands of employees, may be given a chance for rehabilitation. I might cite an example of why factories migrate to the South. An employer, who is a personal friend of mine, told me not long ago that he was moving part of his plant to a certain Southern State. I cannot mention the name of the company, because this information was given to me in confidence. He told me that his firm had been offered by the city to which they were moving a building already erected that they could pay for over 20 years in the form of monthly rental; that they were guaranteed a labor market at standard rates for that locality for a period of 5 years. I do not know how we can stop the migration of industries to the South when municipalities, cities, counties, and States offer ground, free rental, and elimination of taxes as inducements. That is a very hard thing to eliminate. It is hard to include that under unfair trade practices, but there should be some method of eliminating the inducements offered by low-standard labor markets, which vitally affects the industries in centers where there are cheaper standards of living. Mr. KELLER. We are glad you pointed out the things you have. We appreciate it very much. In your short statement you have made clear a number of things I have been seeking but have not found so definitely elsewhere. Mr. SMITH. What do you think about a minimum wage to do the same in the North and the South? Mr. DORSEY. That brings in a very difficult question. If we are to take the President's message of yesterday, I assume from the President himself, and, perhaps, his advisers, that they believe there should be a differential. Mr. SMITH. Can you retain your industries in Philadelphia if there is a different minimum wage in the North and the South? Mr. DORSEY. Personally, I favor a standard mimimum wage throughout the country. I believe that, regardless of where a factory may be, if we are to provide a consumptive power in this country that is going to allow us to consume the products of business and industries, that in turn is going to keep the fields of industry moving, we cannot afford to have any Japan in America, in the North, the South, the East, or the West. There is only one way, to my mind, to get away from that, and that is to have a standard minimum wage for the entire United States. If we do not have that, we are going to have certain sections making claims without any bases of fact and the differentials will be greater than they should be. I think it should be the policy of Congress not to recognize ill conditions in a locality but to try to bring those conditions up to the level of the remainder of the country. |