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centration camps and what not. I say, let us join the Supreme Court in its mockery; but it does not follow that the products of the sweatshops and slave pens should have entry into other States and communities to compete with the products of mills paying fair minimum wages. Why should we permit the products of a few mills to spread financial ruin and social decay over a whole industry. The power of the Federal Government over interstate commerce is sufficient to bar such goods from other States. In the absence of a Federal power to protect one State and its people from uneconomic, unsocial, and unfair competition, each State would have the right to deny entry to products of child labor, low wages and long hours. However, each State gave up this right to the Federal Government and vested in the National Government complete authority over the flow of goods through the States.
Consequently the National Government has the power and must use it when sound economic policy and social necessity demands such action. Despite the ruling of the Supreme Court in the Child Labor Cases, we believe the Federal power does and must extend over textiles. That decision is a gross mockery to worker and manufacturer alike. Under its theory the Federal Government cannot act because that would interfere with the power reserved to the States. Yet if a State sought to exert that power ascribed to it, the Court quickly adds that to do so interferes with the power of Congress over interstate commerce. We are forced to the conclusion that the Supreme Court evidently wants industry to engage in economic warfare. In spite of the fact that unrestrained economic warfare has resulted in a national catastrophe known as "the depression."
We urge that Congress make such a careful examination of the actual facts in the case of the textile industry before it passes this bill that it will be impossible for the Supreme Court to throw out the legislation unless it wishes to say flatly that it is only concerned with theoretical questions and is quite willing to see industrial slavery and economic ruin overtake the nearly five million people whose livelihood is dependent on the fortunes of textile manufacturing.
The commerce power which Congress wields has been used to protect States from adulterated foods, from white-slave traffic, from flow of stolen automobiles, from lotteries, from criminality. Why is it impotent to protect us from child labor, from low wages, from long hours, from inhumane competition, from uneconomic redistribution of industry, from shifting of population to low-income areas?
As a matter of fact, Congress does not seek to regulate production in this bill. It merely says to every textile manufacturer-you may do in your mill as you please, but we will not permit you to injure people and industry in other States by competing unfairly. When you conform to the regulations in this bill you may enter the stream of commerce, but until you do so we must deny you that privilege, for otherwise you will pollute the stream and injure the whole national economy.
The Supreme Court has erected State boundaries to prevent wholesome regulation of production. We ask that the National Government place its policy at these boundaries to prevent a polluted stream of commerce.
We ask the National Government to deny use of its mails as a means to destroy business in other States. We ask Government
agencies to refrain from making loans to local industries which do not comply with the reasonable terms. We ask the Government to deny use of stock exchanges (which are no doubt under Government control now) to such industrialists. They may act as they please, but they have no right to the use of Government agencies and means to continue unfair practices. We ask that the arteries of commerce be closed to such products coming from substandard mills. If they insist they are local, let them remain local and dispose of their products in their own "free" communities.
The American Federation of Hosiery Workers does not urge governmental regulation of the hosiery industry on theoretical grounds. Neither do we urge regulation because the union is ineflective and incapable.
We are for governmental regulations simply because it has been demonstrated in our industry beyond any question that voluntary efforts to achieve stabilization in the industry are utterly futile no matter how sincere or well intentioned. We urge governmental action to uphold labor standards not because we relinquish the right or the obligation as trade unionists to fight for these ends, but because we are convinced that society as a whole in its own interests must enforce certain basic conditions upon business and industry.
Completely unregulated competition creates a situation where industry becomes a parasite on the body politic. In the seamless section of the hosiery industry before the codes went into effect wages of from $3 to $4 per week were common in the mills making the cheaper types of hosiery. Hours were long in these plants and working conditions were such as to be harmful to the health of the workers. These employees could not actually live on the low wages they earned in the hosiery mills. No matter how poor their standards of living were they had to find some supplementary source of income. Therefore the hosiery mills that paid wages of $3 and $4 were parasites and a burden on the community. The employees in these plants were supported in part either by farming or from contributions made by relatives or members of their family employed in some other line of employment where wage levels were slightly higher. When these workers became sick, disabled, or unemployed how were they supported? Not out of their savings. The community as a whole was obliged to foot the bill either through charitable contributions or out of public funds in some form or another.
Society as a whole therefore must protect itself and, in fairness to those industries which are paying their way, must step in and set up regulations in substandard situations which will remedy these conditions.
Unrestricted competition creates a condition which is harmful to everyone. The average employer does not wish to pay cweatshop wages, but he is forced to do so by the inevitable workings of the competitive situation. Manufacturers shriek like parrots against governmental regimentation, but they are in fact forced to do more things they do not like when there is no Government supervision over business than where there is regulation. The freedom which cutthroat competition allows the employer is merely the freedom to commit suicide. It is not even possible to survive by killing off your competitor. That used to be the theory of competition but we found that it did not work out in practice. We found that the strongest
did not survive in business. Both the weak and the strong were pretty much in the same relative position to each other after a price war as before. The so-called marginal producer may bankrupt himself but in so doing he drags down the producer who seeks to maintain decent standards and to conduct his business on an ethical basis.
It is my belief that employers as a class, although unwilling to advocate the passage of legislation setting up governmental regulations, do in fact welcome such laws when they are finally adopted. American industrialists are so class-conscious that they are unwilling to admit the necessity of governmental supervision even when they admit the necessity for uniform wage and hour standards in their industries.
When the N. R. A. was abolished the National Association of Hosiery Manufacturers decided that they would adhere to the code conditions as to hours and wages by the adoption of voluntary codes. Despite their declarations in favor of voluntary enforcement we found that in the hosiery industry only a minority were willing to be bound by a voluntary code such as was suggested after the N. R. A. went out. The fact of the matter is that the employers cannot agree among themselves to regulate each other. In the nature of things competitors cannot be expected to regulate their competitors. The fact that voluntary codes were not adopted after the Supreme Court decision on the Schechter case proves that the only agency which can establish regulations for industry is a governmental body composed of individuals whose integrity cannot be questioned but who are not directly involved financially in the industry itself.
Furthermore, voluntary regulations do not work except temporarily, because most industry is so overdeveloped that a small minority group of chiselers can undermine almost any codes which are set up by the majority. This is especially true of the hosiery and textile industries, which for years have struggled with the problem of excess equipment. In the seamless section of our trade, a recent study shows, there has been almost no scrapping of obsolescent machinery. A great deal of old machinery has been allowed to remain idle. but it can always be pressed into use if an opportunity arises. The existence of this surplus equipment makes it virtually impossible to achieve stabilization in the trade without some authority to enforce uniform rules of operation.
The only possible protection against stalling our economic system by flooding the carburetor of our manufacturing system by too great a productivity at a given time is by reducing hours of operation to the point where it is possible to limit production somewhere near the average level of consumption. It is not our purpose to create scarcity. As a matter of fact during the N. R. A. period the manufacture and consumption of hosiery increased in volume. What we are seeking
. to accomplish is to introduce a measure of stability in the industry which will make it possible to carry on the business of manufacturing needed goods in an orderly manner which will produce a decent livelihood for the employees and fair returns to the emplover.
The National Textile Act provides that under certain circumstances, and after rigid investigation and public hearings, some limitation on production may be ordered for a period of time. This action is clearly in the interest of the consumer as well as the producer. There are no price-fixing provisions in this act, and there is no likelihood that any branch of the textile industry, which only too often sells goods at below the cost of production, will charge prices to the consumer which will be so high as to decrease sales. The public, however, is not the gainer when prices are constantly unstable. It is only too well demonstrated that buying is curtailed when prices are uncertain. During the depression years the selling price of hosiery fell almost 60 percent. The consumption of hosiery decreased rather than increased when prices went down. The volume of buying has increased during the period when prices were rising. We do not argue that if prices increase unreasonably that buying will also increase.
What we do say is that a stable demand which increases slowly and normally cannot be expected until producers and consumers can feel confident that there will be no violent fluctuations in the terms under which both will do business within a given period of time. When a serious glut of goods occurs on the market the merchants and the manufacturers become panicky and attempt to dump their stocks by cutting prices. The consumers who see prices coming down hold off buying expecting to get even lower prices. Business cannot recover while conditions remain fundamentally chaotic and no method of controlling the situation is possible.
The National Textile Commission to be set up under this act will not, we believe, assume the role of a harsh dictator. The Commission will work with the various branches of the textile industry and will only take drastic action in the most extreme cases.
It is the purpose of the act to aid the industry to achieve maximum productivity, We do not anticipate that the authority which the law gives to curtail operations for a given period will be applied except very rarely:
What will actually take place, we anticipate, is that the Commission will assist the industry to establish more efficient methods of obtaining statistical data on consumptive trends which will encourage each branch of the trade to regulate itself in the most effective manner. Voluntary regulation is possible if the alternative is compulsory action. Furthermore, there is a certain fringe of producers in any industry which can only be brought into line by wielding a big stick. The National Textile Act provides for penalties in case of noncompliance. It will be absolutely essential to make an example of a few cases in order to achieve broad compliance with the law. The average manufacturer has very little respect for a law which is not enforced and which has no teeth. Once he finds that the law will be applied uniformly and energetically to all concerned, then it will be possible to have effective regulation with a minimum of supervision.
We wish to call the attention of this committee to certain other features of this legislation which will be of widespread social benefit and which will fulfill the purpose of the law, which is to rehabilitate conditions in the textile industry. One of the most praiseworthy and intelligent undertakings of the New Deal has been the establishment of the Tennessee Valley Authority.
The American Federation of Hosiery Workers and its affiliates enthusiastically and earnestly support the purposes and policies of the T. V. A. We must point out, however, that if natural resources are to be conserved and developed in a given area that industry will spread into that region. Under present conditions the migration of
industry from one part of the country to another for the purpose of securing lower wages, lower taxes, and fewer controls is definitely harmful. We contend that the establishment of the textile industry in the South, or in other agricultural areas, has brought no substantial social benefits to the people of the South but has done much to destroy the characteristic agricultural economy of the region. Organized labor contends that unless national legislation is enacted which will establish and enforce nationally uniform conditions of employment, that the whole purpose of that splendidly conceived plan for regional developirent in the Tennessee Valley will be utterly defeated. Under our present system the benefits of cheap power will not be gained by the workers in the Tennessee Valley but by another group of profiteers closely allied to those same private utilities whose monopolistic grip on our economy we are now trying to loosen.
It would be utterly ridiculous if the Government should find that it has aided the exploitation of human beings by its efforts to end the wastage of our physical resources. Therefore it becomes necessary to create nationally uniform regulation that will make it mandatory for employers who gain the benefits of low-cost power in one section of the country to pay the standard rates of wages to their help. As a matter of fact the Southern States cannot take advantage of the benefits of the T. V. A. development unless wage payments in the South are increased in the basic industries. Cheap power will mean nothing to seamless hosiery workers who are forced back to wages of $3 and $4 a week. Employees who earn so little will not become consumers of electricity-even though electric light may be cheaper than candles or kerosene lamps to operate. The most generous government will not wire the houses of workers whose income is so low that they cannot afford the basic necessities of life.
The American Federation of Hosiery Workers is vitally concerned with the problem of the South. Unless southern workers can be aided in their fight to win the right to organize and improve their standards of life, standards of our northern workers will be reduced to the disadvantage of both the northern and southern sections of our industry. When wages go down in the North, wages in the South go still lower. The only sane policy, therefore, is to pay the same basic wages for the same work no matter where the factory is located. In an industry such as textiles labor costs are not determined merely by actual piece rates or by hourly or weekly earnings. Labor costs are also determined by the efficiency of the plant and by the skill of the operatives. When minimum wages are the same all over the country we eliminate unfair competition and allow so-called legitimate competition to function. Legitimate competition on the basis of efficiency and skill can only come into play when wage cutting and speed-up as a means of securing business have been curbed.
There is no sound reason why a worker in the South should receive a penny less for knitting a pair of stockings than a northerner does if he is equally as skilled and equally as reliable a worker. Economic competition between geographical areas in this country is the most dangerous condition which we as a Nation face today.' Under the guise of local patriotism exploitation of the worst kind is being carried out. Actually the interests of the southern worker are identical with that of the northern worker and not with the mill manager in his own State who is, no doubt, controlled by northern capital. Political progress is prevented and racial antagonism perpetuated in this country because