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intended as a destructive criticism. But I think that the Government, when it is lending money to a certain employer or manufacturer to continue in business, should know something about what that employer is going to do, whether he is going to chisel the wages out of the envelopes of the employees in the industry or whether he is going to be decent and pay decent wages.

The statement was made yesterday by some gentleman from the South appearing for the employers that we are not as efficient in the South as they are in other sections of the country.

We resent that. We are just as efficient in the South as they are in any other section of the country. They have used that expression to the detriment of the textile industry, both the employer and the employee, for years, saying that we are not as efficient as they are in other sections of the country.

A loom fixer in the South can fix looms anywhere. He can fix a loom if it is aboard a ship and is in the Atlantic or the Pacific Ocean. The weaver can do the same thing.

And the very people who came here and told you we are not as efficient know this to be true. If you take some goods that are made in other sections of the country and take some goods that are made in their own mill and put them on a table side by side and then roll them around and let the man turn his back, he cannot pick out his own goods. That is how efficient we are. But they say that we are not as efficient. But that is in an effort to try to keep wages down.

Mr. KELLER. Did they say that when they were asking the mills from the North to move down there? Did they say you were not so efficient then?

Mr. PEEL. No, sir; they did not. They said we were a great people. This same gentleman also made the statement that we are not as efficient and that they were bringing in people that had an abundance of health, and they would come in and go into the mill. They come into the mill village off of the farm because they are induced to come in by paid agents of the mill. That is why they come into the mill. I would like to give you an illustration as to how it is done; but I will not do that now. Paid agents are sent out.

If they are interested in efficiency, instead of going out into the country or the surrounding territory and inducing inexperienced people to come into the mill to go to work, why do they not put these hundreds of people back to work who are out of employment and who are efficient and experienced workers? They do not do that simply because of their union activities. But they will go out and spend some money in an effort to destroy the organization, in an effort to keep those persons out of a job because of their union activities.

They are not going to get together this year or next year, as I have stated, Mr. Chairman, and gentlemen. And I doubt if they will get together in 2036 and change conditions voluntarily.

Conditions are going to be changed when the United States Congress passes a law, if, when that law is passed, sufficient teeth are placed in that law to make the manufacturers comply with the law, and if the people themselves are sufficiently interested to see that the management of the plot in which they were complies with such law as may be passed by Congress. It will not be done until then.

The question was asked yesterday of one of the gentlemen what the objections to the law were. I can answer as to that. I am not a manufacturer, but I can answer the objections to the law. They object to any law that is going to touch them. I make this statement without fear of contradiction, unless you are talking about a tax law--they may pay taxes—I do not know of any law that the textile manufacturers in the States that I have spoken of comply with. You say there is an hour law. They have never complied with that hour law regardless of what State it is. If it is South Carolina with its 55-hour law, they have never complied with the 55-hour law; they have worked 60, 70, 80, and 100 hours a week. Georgia, Alabama, and Tennessee all are the same, and they work any number of hours regardless of the law. If there is any kind of law on the books they pay no attention to it.

So, they are not going to comply with any law; they want no law; their objection to any law is that it is a law, and I say again that they will not voluntarily remedy conditions until the year of 2036, and it must be done by some law, and it cannot be done by a State law. A State law is more or less of a superfluous nature.

They have said themselves that if it were universal they would be glad to cooperate, but here is one that is universal. Here is one that is going to remove-if not removed entirely, to reduce to a minimum-some of their complaints, that of unfair trade practices and unfair competition. I think that is all I have.

Mr. KELLER. Do you want to ask some questions?

Mr. Wood. Yes; you mentioned about company stores and company theaters. I would like to ask you how many of the textile mills of the country have company stores in connection with the operation of the business?

Mr. PEEL. Now, I can only speak

Mr. Woop. Do all those mills in the South that you mentioned have company stores?

Mr. PEEL. I would say 98 percent.

Mr. Wood. I have here a statement made by Edward F. McGrady, legislative representative of the American Federation of Labor, which was placed in the record of the 1933 hearings, on the Connery 6-hour bill You mentioned the Bibb Manufacturing Co.?

Mr. PEEL. Yes, sir.

Mr. Wood. They bought some five or six mills in the South, did they not?

Mr. PEEL. Yes, sir.

Mr. Wood. This investigation relates to the Bibb Manufacturing Co., which was incorporated under the laws of Georgia of June 13, 1876. The company started with a nominal capital of about $25,000, and no additional money has been obtained since that time through the sale of common stock. The present capitalization of $20,000,000 was created out of earnings.

It goes on further to say that by totaling these annual dividends it will be found that the Bibb Manufacturing Co. during the 17-year period under consideration has returned to its stockholders 148 percent in cash dividends and 370 percent in stock dividends. These enormous earnings and returns on investment have been possible partly owing to the original very small capitalization of the company, and doubtless partly due to the fact that the company's growth has been coincident with the automobile industry, to which the Bibb Mills have sold a high proportion of their products. It should be noted also, because the fact will be referred to later, that the Bibb Manufacturing Co. has maintained its quarterly dividends throughout the depression.

În 1930, in addition to declaring its regular 6-percent dividend, the company drew $5,000,000 from its surplus and retired all its 6-percent preferred stock which had been distributed as a stock dividend in 1925. Throughout the year 1931, the Bibb Co. maintained 6-percent cash dividends without extra stock dividends.

Now, during the year 1933, this Bibb Manufacturing Co., in the face of its tremendous dividends, which it received from its operations throughout these 17 years, instituted two or three reductions in wages during the year 1933.

Mr. PEEL. Yes, sir.

Mr. Wood. Did they comply with the code during the period of the code authority?

Mr. PEEL. No, sir; they did not, not entirely. There were complaints of stretch-out, and also of-I will not say any great wage reduction, but slight reductions.

Mr. Wood. You mean by stretch out, adding additional machines per employee?

Mr. PEEL. Yes, sir.

Mr. Wood. In other words, if an employee operated 10 machines normally under the N. R. A., he was compelled to operate 12 or 14 machines?

Mr. PEEL. Yes, sir.
Mr. Wood. At the same piece rate?
Mr. PEEL. Well,

Mr. Wood. Most of the work in the mills is done on a piece rate, is it not?

Mr. PEEL. Well, in most cases weaving is done on piece rate, either paid for by the pound or the yard, but

Mr. Wood. But even though they did pay the $12 or $13, by the stretch-out system, they probably did not pay any more per unit or per garment than they did prior to the N. R. A.?

Mr. PEEL. No, sir.
Mr. Wood. It was a method of getting around the law?

Mr. PEEL. If you will permit me, I will try to explain that or give you an illustration of how it is done. We will say a weaver is operating 10 looms or running 10 looms, and they decide to give him 4 more. They give him the four more and for the first week or 2 weeks possibly the piece rate is continued, which means that on four additional looms they will make a little more money, but then the piece rate is reduced to where if he was making $14 for running 10 looms, he will get $14 for running 14 looms.

Mr. Wood. This statement has never been refuted successfully. It says that during the 2 months of this investigation these complaints and appeals have been coming in in great number and with increasing insistence. There have been repeated wage cuts reported, former earnings were cut in half, from 16 to 60 percent.

I take that that is just prior to the N. R. A. going into effect?
Mr. PEEL. I think that was 1931.

Mr. Wood. Now, this Bibb Manufacturing Co., all these firms you have mentioned, have adopted the stretch-out system and they have lengthened the hours and reduced the wages since the voiding of the N. R. A.?

Mr. PEEL. Yes; and quite a bit of it has been done in the past 2 months.

Mr. Wood. In the past 2 months?
Mr. PEEL. Yes, sir.

Mr. Wood. Yet, a great many of the employers insist that since the declaring unconstitutional of the N. R. A., business has taken a tremendous upturn, and that the voiding of the N. R. A. was responsible for it. I cannot harmonize the methods that have been used by the employers of increasing hours and reducing wages with their statement that business has gotten better and prices have improved and purchasing power has increased. The fact of the matter, don't you think, that since the voiding of the N. R. A., the unscrupulous methods of many employers of lengthening hours and shortening wages has retarded progress rather than increased it?

Mr. PEEL. Yes, sir; I think by next summer we will be down to a $6 or $8 wage unless something is done to prevent it.

Mr. Wood. In other words, we will be practically back to where we were in 1933 if the employers are allowed a free hand to continue as they were in 1933 and manage their own affairs?

Mr. PEEL. If you will permit me to make this observation: Of course, if I am asked the direct question as to which mills they are, perhaps I will not be able to mention more than one or two, but in 1930, 1931, and 1932, the mills were unable to pay dividends, they were not paying dividends. I talked with a broker or a stock and bond salesman and he told me of the terrible condition some of the mills there in Greenville, where I live, were in. But, in 1933, 1934, and 1935 they have paid dividends and they did it during the period that the N. R. A. was in existence. Certainly, Mr. McColl never made $96,485 in 1931 as the president of the mill, but he received that in the year 1935.

Mr. WOOD. I think that is all.

Mr. RAMSPECK. Mr. Peel, I wonder if you could give the committee any details as to the Atlanta Woolen Mills situation?

Mr. PEEL. The Atlanta Woolen Mills situation?

Mr. RAMSPECK. Yes; you mentioned three companies that are located in my district, the Atlanta Woolen Mills, the Gate City Cotton Mills, and the Fulton Bag, and I just wonder if you could tell us what the situation was at those three places.

Mr. PEEL. I cannot give you any figures. I would be glad to get those for you. But the information I have is that the stretch-out has been installed, wages cut under the code minimum, and the hours have been increased in some instances.

In addition to that, the Atlanta Woolen Mills hearing was held before the Textile Labor Relations Board in December 1934. Following that hearing two gentlemen, I cannot give their names right now, but the president and vice president or secretary-treasurer, father and son-representatives of the Atlanta Woolen" Mills, discussed the case with members of the board, and, as I understood it at that time, they were going to make the necessary adjustments; in other words, they were going to reinstate the workers with the exception of one man, whose return to work they were bitterly opposed to. They were all to be reinstated—at that particular time he made the statement that because of the general strike he was not able to make samples at the proper time, and, therefore, he did not have orders, but he expected orders, and he thought that during January he would have orders and his mill would be running full time, all the machinery in operation, and they would return all of the people or reinstate asi of the former employees except this one man in particular. He later agreed that he would return that person or reinstate that person at a later date.

They have never done that from December 1934 to January 1936; they have not, and they will not do that. A petition or charge has been filed with the National Labor Relations Board in regard to discrimination on the part of the management of the Atlanta Woolen Mills.

Mr. RAMSPECK. What about the Gate City situation?
Mr. PEEL. Gate City? Do you want to know-
Mr. RAMSPECK. What your complaint is against them?

Mr. PEEL. The complaint against the Gate City is that they have discriminated against our members. They refused to meet with the committee designated by the majority of the workers to represent them, and when we petitioned for an election, they went into the courts to prevent the election. I do not know just what disposition has been made of that.

Mr. RAMSPECK. It is in the courts here in the District of Columbia. Mr. PEEL. Yes, sir.

Mr. RAMSPECK. I wonder if you know that the employers generally who are interested in fighting the Wagner-Connery bill are sort of making a test case out of the Gate City case?

Mr. PEEL. I think so, and the decision of the Supreme Court has given them several million dollars to help fight it.

Mr. KELLER. How?

Mr. PEEL. Well, in the processing tax. You see, they got many millions back that they collected from the consumers. They acted as the collecting agency, and there is no doubt in my mind that it was on, and that the processing tax was never paid by any mill, but that all of us who bought a shirt or anything made of cotton paid the processing tax.

Mr. KELLER. Where is that money?
Mr. PEEL. Where is it?
Mr. KELLER. Yes,

Mr. PEEL. Many of the mills had it impounded, I am told. I want to state that I am not a lawyer, but I have just been reading.

Mr. KELLER. I just want to try to help you.

Mr. PEEL. It was impounded, and the decision of the Supreme Court means that the manufacturer will receive the amount of money that he paid in as a processing tax, or that went through his hands as the processing tax, it will be returned to the manufacturer. Now, if I am incorrect in that I might say it is through ignorance on my part.

Mr. KELLER. Let us get the fact. That is only a small part of the processing tax. I have some figures which I have on my desk but which I cannot hold in my mind. Most of the processing tax is in the Treasury of the United States and it will never get out unless Congress is foolish enough to vote it out, and I do not think they are going to be as foolish as that.

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