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particularly those representing manufacturers, have constantly stood up in legislative bodies and said:
We do not want this in our State
whatever that State may be
because anything that is going to add to the cost of production of goods should not be tolerated here; because once it is put upon our statute books, we are going to be in an unfavorale situation in competition with other States.
Massachusetts has been the pioneer and has suffered because of it. We know from our experience with this 48-hour law that I have spoken of, and the agitation for a national 48-hour law, that until Federal regulation is adopted we are never going to see anything accomplished that will put every other State upon a basis comparable with ours.
Now, I got away for a moment from the arguments that were advanced as to the reason for this decline in the industry.
Principally they said that these laws, that I have now enumerated, have prevented us from competing with other States, particularly in the South, where they are able to run their spindles, employing men and women, on two 55-hour shifts a week, whereas here in Massachusetts we can only operate 48 hours and one shift. Then the N. R. A. came in and there was the greatest of enthusiasm on the part of manufacturers and employees alike. It was the first ray of hope that had come to that industry, especially in the distressed sections.
We had comparable working hours. In justice to these representatives of labor who are here, I must say that they cooperated to the highest degree in agreeing to the suspension, for the purposes of the N.R.A., of this law prohibiting women from workig after 6 o'clock and permitting them, during the suspension, to work until 10 o'clock at night. I think that extension will have to come up again this year in the legislature. I think it expires in April or May.
Our factories, for the first time in years, began running at capacity and our operatives began to get full pay envelopes after the N. R. A. had come in. Then, after the months gave greater experience with these new conditions, we found, about a year ago, four problems confronting the industry. It was admitted that the N. R. A. had been a good thing.
I am not speaking for the N. R. A. in any other industry in the country. But I know that it was a great boon to the textile industry. There may be others representing States that are inhabited by industries of widely differing nature than this. But certainly I have not heard any one suggest that it was not a commendable thing for this principal industry of Massachusetts.
There were faults with it, however; not in the system itself, but in some of its rulings and the mandates of some of its authorities. When we came down here a year ago, there was not any difference of opinion between employer and employee then. Those of us who were State officials received the cooperation of men and women of every walk of life in this industry.
It was admitted that these four things were problems that the Federal Government might well consider in trying to bring a solution to the problems of the industry.
First. Overproduction of goods. It was suggested that through the features of the N. R. A. that overproduction could be curbed. I think
you will agree with me that that was an admission that only through the N. R. A. and only through the instrumentality of some Federal official was that overproduction going to be curbed. It was an admission that industry itself was not going to control overproduction then during the existence of the N. R. A. any more than it did 6 years ago during the days when I was telling you of the testimony in those tax litigation cases.
Second. They said that there has got to be an elimination of the processing tax. Although no one at any time suggested that the purpose of the processing tax was not a good one for the entire country, if the farmer was to be benefited by it. Manufacturers of Massachusetts and every other section of the country merely said:
We think that this tax should be removed from industry and if the farmer is going to be benefited, he should be benefited from a general tax.
Third. They said there has got to be some control of the wage differential between the North and the South because it has been proven by statisticians that whereas there was a $12 and a $13 basis. for the North and the South, the variations in the higher bracketed jobs made the differential $14 and $16.56. So that instead of a $1 differential, there was a differential of $2.56.
Fourth. There was the problem of Japanese competition which had been proven by the amazing statistics that had been compiled in those early days of 1935, which demonstrated that the amount of imports from Japan had increased from 30,000 yards in January of 1934 to 41⁄2 million yards in January 1935, and 5,700,000 yards in February of 1935.
Now, with that experience, and with the memory of those arguments that were advanced at that time a year ago, particularly by manufacturers, I cannot see how there should be any difference of opinion here today. I cannot see how the manufacturers, if they are going to oppose this legislation or at least the principle of it, can justify their position of a year ago.
Certainly we acted in good faith in coming down here to Washington and asking the Government to regulate, through the facilities of the N. R. A., this problem of overproduction, because it has been outlined to us by the manufacturers. The same in an effort to correct the differential in wages. The same in reference to the processing tax which was admittedly a great burden upon the textile industry. And, certainly, the manufacturers, themselves, thought sufficiently of Government regulation of a problem of the industry to ask us, and we agreed and agree today, that it would be a good thing to stem the tide of Japanese importations by tariff means or by a quota allowance.
Now, the situation has not changed at all and if a year ago there was an agreement for Government regulation in the instances I have mentioned, the reason exists just as strongly today notwithstanding that the N. R. A. is a thing of the past.
We have not got the protection of the N. R. A. now. We have been benefited since the demise of the N. R. A. through a cooperative agreement among the cotton industrialists of the country. I have been told-and I think Mr. Fisher who is here will permit me to quote him, as secretary of the Manufacturers Association-that 90 percent of the cotton mills of the country have agreed to abide by the better provisions of the N. R. A. code; that 10 percent is probably a fair
figure of those who have not agreed to it; and if I have misquoted Mr. Fisher, I am sure he will correct me later when he speaks to your committee.
Those figures sound very impressive. In fact, they sound unbelievable after the experience of the years that preceded the N. R. A. But I think the best answer to the question that all of us may give is this. We may ask, admitting those figures to be facts, how long is this going to continue? And it was testified here yesterday by a gentleman representing a certain organization of manufacturers in 14 States of the southern part of the country-I do not remember his name or the name of the organization, but it was a man who was boasting of the fact that $7 a week, or some similar figure, was a justifiable wage to pay prior to the N. R. A.; and that although they have maintained the wage standard set by the N. R. A., he still has not changed his mind that the wage earners of his section of the country were not in a bad condition when they received these meager wages that I have mentioned.
Just as soon as the possibility of Government regulation of this industry fades away, just as soon as that happens, you are going to find employers going back to those old standards. And I think this man's testimony of yesterday was the best evidence of it.
Speaking of wage differentials and figures that were compiled a year ago, at least given to me a year ago when we were talking about the difference between the North and the South, the wages in July 1933 showed a differential as between the North and the South of $2.84 before the N. R. A. and not much more than $2.56 under the N. R. A. But the average wage in the North then was $10.60 and the average wage in the South was $7.76.
I do not know how these compare with the figures Mr. McMahon submitted, but I assume they are taken from the same statistical information.
Well, take either one, the North or the South; $10.60 in the North and $7.76 in the South. Is there anyone who can conceive this country going back again to those standards? Certainly, no one wants to do it. Certainly, our country today is in a different frame of mind in reference to progressive labor legislation and in reference to what has generally been referred to as social legislation.
Our country today is old-age pension minded. It is unemployment-insurance minded. It is enjoying a new frame of mind with reference to the future of the men and women of our country who are engaged in industry especially.
The only way we are going to keep this industry abreast of the times and keep the employees in this industry enjoying the possibility of this new day in America and not submit them to the distressing conditions of not the past generation but of the past decade, is by some Federal control of this industry.
I don't know anything about the details of this bill other than what I have acquired through reading the bill once. There may be many details in the bill that are not practical and feasible; there may be some things that are contrary to law. I don't know that. I assume that you gentlemen on this committee will satisfy yourselves as to both features I have mentioned before you conclude your deliberations. But I wish to emphatically register the sentiment of Governor Curley and myself that we are emphatically in favor of the principle
of Federal regulation of the industry, because without it we are not going to have any more success in getting the cooperation of 35 States, the number someone mentioned here yesterday as being engaged in the textile industry, by compacts and other means than we had in all the years we have been fighting for a 48-hour law. I will be very glad to answer any questions.
Mr. RAMSPECK. You said that when responsibility of Government regulation fades away the manufacturers are going back to the old scales and old conditions. You might put that in this form, that when this administration fades away and when they go back to the old type of administration we had under Harding, Coolidge, and Hoover, they will go back.
Lieutenant Governor HURLEY. Well, being a good Democrat, I can subscribe to those sentiments.
Mr. RAMSPECK. The point I was getting at was this: It is a fact that there is a possibility of further legislation in line with the principles involved in N. R. A. which you think is holding them in line, or holding 90 percent of them in line?
Lieutenant Governor HURLEY. That is what I think; yes.
Mr. RAMSPECK. I agree with you. Now, I would like to ask you this question. Do you know anything about the question of the type of machinery in use in Massachusetts as compared with some of the other States, or in the East as compared with the South? In this whole problem is it true, as has been charged by some of our friends in the South, that machinery in the textile mills is obsolete and, therefore, is not in the economic position to compete?
Lieutenant Governor HURLEY. I do not think that is so to any material degree. I have heard that argument advanced. And it is true that the greater part of the machinery in the older textile mills is machinery that has been acquired over a period of 25 to 40 years; but it has been subjected to replacement constantly during that period.
I think a good answer to that contention is found in this fact: In Fall River we have a textile organization known as the Morgan Printing Co., composed of two divisions, the printing division and the cotton manufacturing division, which locally we refer to as the iron works because it was established on the site of an old iron foundry several generations ago. That is the plant of the M. C. D. Borden Co. M. C. D. Borden was known as the cotton king in his day. I thought I had some memoranda here that indicate the date; but it is not important.
Several years ago at least one, if not two, units of that corporation lifted out of Fall River and reestablished as the Borden Mills in McKeesport, Tenn., I believe it was.
Is that the name of the place, Mr. McMahon?
Mr. MCMAHON. Yes; it is.
Lieutenant Governor HURLEY. They took the same machinery, that is, they took their machinery from Fall River and set it up down South. They did not make any changes of any material parts. So far as I know, that plant is still running down there, and it is still a profitable organization. It is known as the Borden Mills down there. The entire plant, cotton manufacturing and printing, ceased doing business in Fall River a year or more ago and it is now being liquidated.
So the machinery that they say is obsolete in one section of the country has been sufficient to stand up when moved to another section whereas that which was left behind has gone by the boards.
Mr. RAMSPECK. Do you know anything about the difference in freight rates on textile products going from Massachusetts, let us say, to the markets in New York and Chicago as compared with the products moving from the South into those markets?
Lieutenant Governor HURLEY. Not sufficiently to discuss it, Mr. Congressman.
Mr. RAMSPECK. That is one of the points they make in justifying a differential in wages. That is the reason I raise it.
There is one other question I want to ask you, if you can answer it, and that is why the textile mills paid the processing tax for a year and a half before raising any question about it. Have you ever heard any explanation of that?
Lieutenant Governor HURLEY. Well, I will not say what I had in mind. I assume that they did not receive the proper legal advice in the early days.
Mr. RAMSPECK. Don't you suppose the fact that they had on hand a supply of cotton which was bought at 5 or 6 cents a pound had something to do with that?
Lieutenant Governor HURLEY. No; I really do not think so.
Mr. RAMSPECK. You don't know anything about that?
Lieutenant Governor HURLEY. Of course, I have no knowledge of their reasoning in respect to anything they did as individual mill directors.
Mr. RAMSPECK. I gather from your statement, which I think is a very fair and fine statement, that the conclusion you have reached as an official of the State of Massachusetts and as one who has been familiar with this problem for a great many years, is that with the differential both in wages and hours, that the manufacturers of cotton textiles in Massachusetts cannot complete. Is that correct?
Lieutenant Governor HURLEY. That is correct.
Mr. RAMSPECK. And that you have no hope of that being remedied by the manufacturers themselves or by State action?
Lieutenant Governor HURLEY. That is true. I do not suggest that, Mr. Congressman, in any sectional way at all. I do not ask you members representing 48 States of the Union to do something that is going to save Massachusetts alone.
I think that your vision is broad enough to assume with me that in an industrial State such as Massachusetts, and in the cotton manufacturing industry in the State, the textile manufacturing industry is the greatest industry. If that is rendered in a state of collapse so that most of the States are in the shape I have already referred to, and if its citizens are not able to gain employment because no other employment has come to take the place of these tremendous institutions that have gone out, and if the taxpayers are unable to pay their taxes, the rest of the country is going to suffer just as much-well, perhaps, not just as much, but in some degree-because of the removal of the purchasing power of the people of an entire State.
Mr. RAMSPECK. Isn't this the ultimate effect of that situation, that the people of Massachusetts, because they have been socially minded and have been willing to bring about better conditions for the working people, are now being penalized by competition based upon lower wages and longer hours?
Lieutenant Governor HURLEY. That is true.