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Mr. RAMSPECK. And that the only way to remedy that condition is by putting wages and hours, or at least minimum wages and maximum hours, out of the field of competition by having a universal regulation throughout the country?

Lieutenant Governor HURLEY. That is exactly the way I feel about it.

Mr. RAMSPECK. That is all I have to ask.

Mr. Wood. Governor, you mentioned something about the agreement that had been reached by 90 percent of the textile manufacturers. I did not quite get that. What was the agreement?

Lieutenant Governor HURLEY. I understand they have agreed to maintain.

Mr. Wood. They have agreed to maintain the standards of N. R. A.?

Lieutenant Governor HURLEY. Yes, sir. Well, I do not understand that it is all of the standards. I assume it is the hours of production and hours of labor and the wage differentials.

Mr. Wood. And there were 10 percent who would not agree?

Lieutenant Governor HURLEY. Those were the figures that were given to me.

Mr. Wood. Do you think it is possible for those 90 percent of the textile manufacturers to hold to that agreement and hold to the hours and wage standards when the 10 percent refuse to do so?

Lieutenant Governor HURLEY. I certainly do not. I recall in respect to that argument which you suggest that a year ago when we came down here and protested against the importations of cotton cloth from Japan that it was pointed out, especially by members of the Cabinet committee, that the amount of cotton cloth that came in from Japan, although the figures I have mentioned sound terribly large, was infinitesimal in comparison with the amount of cotton produced in this country. But the manufacturers said- and we agreed with the argument, and I think it is a sound argument—that the fact that the Japanese manufacturers can produce cotton at such a ridiculously low price and come over to the United States and undersell us in the New York market, for instance, is sufficient to drive down the price for which we can sell our cotton cloth.

The same argument holds true on the 90 percent and 10 percent. It may be suggested that 90 percent have agreed to this; but those 10 percent who are not agreeing to the code provisions and to the maintenance of them are going to be able to undersell the 90 percent and drive down their prices and eventually drive them from their agreement and cause them to revert back to the standards previous to N. R. A.

Mr. Wood. I will bring that down to Washington. Let us say the city of Washington burns a million tons of coal a month. I suppose they burn much more than that; I don't know just what the amount is. It would be just possible for some coal dealer to transport to this city 10,000 tons of coal, which is a very infinitesimal part of a million tons, and establish three or four retail establishments here in strategic points in the city. And if coal in Washington were selling at retail for $8 a ton, if this dealer would bring in 10,000 tons of coal and establish three or four retail markets and sell that coal for $6 a ton or $5 a ton it would instantly affect the coal dealers of the whole city, because the minute the competitor that is nearest to that point of sale would see the sign go up of $5 or $6 a ton he would instantly reduce his price, and his neighbor would do likewise.

So within 24 hours that man with 10,000 tons of coal could very appreciably decrease the price of coal, and he could just about destroy the coal market in Washington within 2 or 3 days.

And I think that holds with industry as a whole. And it has been testified to here before our committee upon the 6-hour day in the Seventy-third Congress, first session. That was testified to by a number of leading industrialists; that is, that even 5 percent, or 2 percent, or 1 percent of the manufacturing institutions-some of them put it as low as 1 percent-of one given industry, by cutthroat competition, could destroy the remainder.

To my mind that is much more reason for general legislation for regulation of these industries.

I asked you a question and then I made a speech.

Lieutenant Governor HURLEY. I agree with you in everything you have said.

Mr. Wood. This United Merchants, of Fall River, moved their machinery from Fall River to Bath, S. C.; that is, they moved their plant down to Bath, S. C. And I understand that as a result of bad working conditions, long hours, and so on, they have had three strikes in that time since they moved there.

Do you think that this manufacturing institution would operate at a profit and withstand three strikes since they moved without having ridiculously low wages? How could they stand three strikes in a year and still make a profit without paying starvation wages? There was a tremendous loss of time.

Lieutenant Governor HURLEY. The reasoning and mathematics of the question seem to bring me to that same conclusion, that they must have paid low wages, although I have no knowledge of it.

Mr. KELLY. Can we get the facts? Mr. Wood. Yes. The plant is still running. Mr. KELLY. Can't we get the facts in relation to the wages? Mr. Wood. Yes; we can do that. That will be brought out later on, Mr. KELLER. Have you finished, Mr. Wood? Mr. Wood. Yes; I have finished. Mr. KELLER. Governor, I would like to ask just a few questions. Of course, I appreciate very much the thoroughness with woich you have gone into this matter today. I have learned a very great deal from your testimony before this committee; and I want to thank you for it especially because it has fitted into what I have tried to think. And I heartily agree with the ideas in this bill and the necessities for it, the necessity of nationalizing industry and accepting it as a national matter.

However, there is another question that runs in my mind, and that is this: Assuming we probably have 10,000,000 idle men, outside of those under W. P. A., will we not be compelled to go much deeper into this whole subject than we are talking about before this committee before we can assure every man of an opportunity for a job?

Lieutenant Governor HURLEY. I assume you will have to do that.

Mr. KELLER. I may be totally wrong; I may be thinking along the wrong lines, but it has occurred to me over very many years that industry is entirely national, that we must accept it as a national matter and treat it from a national viewpoint if we are ever going to

do so.

come to a thorough stabilization of economic conditions in America. In my judgment, we cannot go on with 10,000,000 idle men. They are not going to remain idle, and they are not going to ride the other fellows' shoulders, and the other fellows are not going to let them do it. It seems to me that we are facing that problem above all others; and it seems to me that this little committee here, with men of your tremendous experience along this very line, ought to begin to consider that in relation to this very bill about which we are talking. And I would like to have you talk to me a little bit about that. I would like to have you say what you think about it, if you will be kind enough to

Lieutenant Governor HURLEY. I think you have a problem here that is even beyond the scope of this particular bill. This bill will result in additional employment of labor in the cotton, woolen, silk, and allied industries undoubtedly; it will permit of steadier employment in that industry insofar as former employees of the industry or those in seasonal unemployment in the industry are numbered among the ten millions to whom you refer. It is going to relieve the problem to that extent by keeping them employed at regular hours during regular years of employment. Of course, so far as industrial life of the country beyond the textile industry is concerned, some other legislation will have to be enacted in addition to this. If by the same reasoning that we apply in approaching the textile industry_situation other industries can be brought under the supervision of the Federal Government, then probably the solution which you have in mind is not far away, assuming that all of the basic industries of the country are sufficiently national in scope, as has been proven in the case of this industry, and that to those industries must return the greater part of the 10,000,000 people to whom you referred.

Then probably the solution is similar regulatory boards in those other industries to that which is proposed here.

Mr. Wood. Governor, just one more question. You spoke of 90 percent of the industry agreeing to maintain the standards of N. R. A., if possible. Is that 90 percent of the employers or 90 percent of the production?

Lieutenant Governor HURLEY. I don't know, sir. That was the figure given me by Mr. Fisher. And I assume he can answer that when he gets up. I just took 90 percent and 10 percent, but I don't know upon what it is based.

Mr. Wood. Probably a smaller percentage of production have agreed to it.

Mr. HURLEY. I don't know about that. I have no objection to Mr. Fisher's being cross-examined at great length when he takes the stand.

Mr. SCHNEIDER. Mr. Chairman, I would like to ask the Governor about that tariff situation.

To what extent do you think that the importations of textile products from other countries are affecting the industry as a whole?

Lieutenant Governor HURLEY. To what extent, you ask?

Mr. SCHNEDIER. Yes; to what extent is it affecting the industry as a whole?

Lieutenant Governor HURLEY. To the extent their prices are so much below the cost of production in this country, and especially if new legislation is adopted maintaining the standards that we want

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to be maintained, they are able to undersell our American manufacturers. I do not think the amount that comes in is enough to worry about in fair competition with what we sell that is manufactured here; but because it comes in at a cheaper selling price than we can manufacture the same or comparable goods for in this country, then it is something to be concerned about.

Mr. SCHNEIDER. No one knows just the amount that may possibly be shipped in here at the present time from foreign countries, particularly Japan and Russia.

Lieutenant GOVERNOR HURLEY. I presume there are statistics available on that. I have them up until February or last year. They are compiled by Government agencies.

Mr. SCHNEIDER. I understand at the present time there are considerable linen textiles coming in from Russia at very destructive prices, and it is an indication that not only Russia but also Japan is increasing the production capacity of their industry. So the future of the industry in America with reference to destructive competition is very gloomy.

What applies in the textile industry also applies in the papermaking industry. You speak about the improvement in the conditions in the textile industry in the early days with reference to the regulation of hours. You probably remember that in Massachusetts in 1912 there was a bill introduced in the legislature to establish an 8-hour day in the paper mills in that State. At that time they operated 12 hours a day.

As a result of the introduction of that measure in the legislature, which was not enacted, the paper-mill workers became organized and, as a result thereof, effected the 8-hour day.

The paper industry, like the textile industry, is now going to the South very rapidly. Long hours prevailed in the South, the 12 hours a day, two tours in the 24 hours, until the enactment of the National Recovery Act, when they went on the 8-hour day. Many of them are complaining now about not being able to produce in competition with the imports from other countries, the same as the textile industry is complaining. And there is a large importation of paper from other countries. As to newsprint, probably 75 percent is now coming from Canada, Newfoundland, Finland, and Norway, with the possibility of a very great increase, so that there may not be any newsprint made in America.

There is also coming into this country Kraft paper, from Finland particularly, at very destructive prices $15 to $20 a ton under the American price.

The newspapers have a campaign on—that is, some of them particularly, the Hearst papers—to buy in America. But the Hearst papers, as well as most of the other large papers of the country, buy their paper foreign in the cheapest market in the world, there being no tariff on newsprint nor on pulp. Therefore, the paper industry in New England particularly will be a thing of the past within a very

So the matter of the textile industry is not so much unlike many other industries.

Now, as a good Democrat, Governor, what is your position with reference to the enactment of legislation that will prevent the importation of products that will destroy American industry, and particularly the making of these reciprocal tariff trade agreements?

few years.

Lieutenant Governor HURLEY. I am in favor of establishing a quota upon importations so that we will be receiving in this country no more than the average during the normal years that preceded this general decline in business in this country. Take the average textiles, for instance, from 1928 through 1930 or 1931 from Japan, and tell the Japanese, “You cannot bring in any more than that average.

Mr. SCHNEIDER. But the administration has failed to apply the quota, particularly to paper and pulp as well as to many other commodities that come in under the new reciprocal trade agreements. I recall last year the Secretary of State discouraged the putting into these agreements any quota arrangements and claimed that they would not work. I know there are quotas on some of the commodities which are included in the new agreements.

Mr. KELLER. Governor, you are such a good witness that I do not like to impose upon you. But when you talk of overproduction, isn't all overproduction simply underconsumption?

Lieutenant Governor HURLEY. Well, one seems to be the corollary of the other. But which starts the other I do not pretend to be able to say, except that we certainly should not be producing any more than we can consume and sell abroad.

Mr. KELLER. The reason I call your attention to it particularly is this: A noted economist after a great deal of work on the subject, is responsible for the recent statement that if we will increase the income-which I think he takes as an average over a certain period-of $1,600 and increase that to $2,400 a year, increasing it 50 percent, instead of using 11,000,000 bales of cotton in the United States we would use 20,000,000 bales of cotton here. I should think that would apply, and I understand it does apply, to every other industry. Therefore, it does seem to me that we ought to consider here the question of doing whatever is necessary to increase the income of men so that they can buy, because unless men can buy they will not buy, and just in proportion as they are able to buy they will buy, and just as they are in position to buy and do buy we will come back to a state of prosperity. And we are not going to come back without it. It does seem to me that we ought to go into basic things here. As to these States which are tremendously interested in textiles, it seems to me they should begin to study this very subject-how not to lose their textile industry; and if they are going to lose their textile industries under present conditions, then change the conditions and keep the textiles, because the minute you raise the income 50 percent above what it is, it will enable us to use 20,000,000 bales of cottonit will put every man in America at work making textiles, whether be is in Massachusetts, in South Carolina, or in any other State.

You would also find that the conditions down South, where the low wages are paid, would have to be changed and those wages would have to come up. And the real crux of the matter, as I see it, is just the equalization of wages in this country. Am Í more or less right in that?

Lieutenant Governor HURLEY. I believe in increasing the purchasing power.

Mr. KELLER. If that were applied to the textile industry and would do that for the textile industry, it would do the same thing for other industries, would it not?

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