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Mr. GILBERT. We were having a hard time 1930 to 1933, but we would have gotten out from under it.

Mr. Wood. The fact of the matter is that business asked this Congress to save them in 1933.

Mr. GILBERT. Well, I have forgotten just what we asked for.
Mr. LUNDEEN. Mr. Chairman, may I pursue this testimony?
Mr. KELLER. Surely.

Mr. LUNDEEN. In that connection, during the war the railroads broke down.

Mr. GILBERT. The Government broke them down; yes, sir.

Mr. LUNDEEN. Just a minute, please. That is not correct. The railroads were unable to function during the war and came in and asked the Government to take them over. We took them over and ran them during the war and put them on their feet. And as soon as we put them on their feet private industry came back and said, “Now, we will run the railroads." Mr. GILBERT. Will you let me correct you there? Mr. LUNDEEN. Well,

go ahead. Mr. GILBERT. The railroads did not ask the Government to take them over during the war; the Government took over the railroads and operated them.

Mr. LUNDEEN. Because they broke down.

Mr. GILBERT. No. They operated the railroads and turned the railroads back to the owners absolutely broken down with a billion dollars indebtedness on the railroads that the railroads have had to bear and pay since.

Mr. Wood. I just want to dispute the gentleman's word. In the fall of 1917 General Counsel Thom, of the railroads, came to this Congress and told this Congress that the railroads had broken down. The Allied countries were sending some very curt messages over here to this Government calling their attention to the fact that they had promised to transport certain materials, munitions, wheat, and other commodities, to enable the Allies to carry on the war. And we agreed to do that. And the Allied countries told this Nation that we had failed to live up to the contract. The result was that when Mr. Thom, general counsel for the railway executives, was called before the Senate committee, he told the Senate committee the railroads had broken down. That is in the record.

The result has been that the railroads were taken over for operation only. And Mr. McAdoo was appointed Director General of Railroads, and one of the first things he did was to issue an executive order early in January that all trains from the eastern seaboard to the West would become what they called "red ball trains”, that is, a train that had the right-of-way. He issued orders to gather up all of the empties from the eastern seaboard for the western grain fields. And when he got a train of empty cars of 75 or 100, that train became a special or "red ball train", and all passenger and freight trains except the mail took the siding for that train of empty cars going to the western grain fields. And when they came back they were also "red ball trains”, filled with grain going to the eastern seaboard, and they filled hundreds of ships lying there for months waiting for grain and commodities to ship to the Allies.

That is why the railroads were taken over.

Mr. GILBERT. I said the Government took the railroads over because the Government could do that.

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Wood. The railroads said they could not do it; they were
GilBERT. An individual railroad could not make a "red-ball”

but Mr. McAdoo could.
Mr. Woon. They could not because it cost too much money; it
interfered with their profits.

Mr. KELLER. I think we have a very instructive witness here, and I think we are all enjoying it; but we are getting far afield from the matter in hand.

Mr. GILBERT. I will apologize to you for the time I have taken.

Mr. KELLER. You have answered a great many questions and you have answered them honestly. And I am glad we have given you the time.

What I did want to ask, which has nothing to do with this, is this question: When you got to knocking the T. V. A., of course, I wanted you to tell what you were paying for your current. But that is another matter which is entirely outside of this subject, even though it does involve the question of how far the Government can go and how far business can go without the Government. It involves the question of whether there would be any business without Government. There would not be. And we ought to hold that constantly in mind.

Mr. GILBERT. They have to go together.

Mr. KELLER. Yes, they must go together. One cannot do the whole thing.

Mr. GILBERT. We are loyal to the Government, and we are supporting it. Let me apologize again for staying here so long. appreciate your letting me answer these questions.

Mr. KELLER. Mr. Francis J. Gorman, of the United Textile Workers of America.

STATEMENT OF FRANCIS J. GORMAN, VICE PRESIDENT, UNITED

TEXTILE WORKERS OF AMERICA

Mr. KELLER. Will you please give your name and residence?

Mr. GORMAN. My name is Francis J. Gorman. I am vice president of the United Textile Workers of America.

With your permission, Mr. Chairman, at this time I would like to defer my testimony and make a brief statement to the committee of just what form we are presenting our witnesses.

Mr. KELLER. All right.

Mr. Gorman. Last night we had a meeting of approximately 35 representatives from all parts of the country and all divisions of the industry, and we tried to organize the witnesses in order to avoid repetition.

Mr. McMahon, the president of our organization, will present the statement for the organization and take up about an hour. He will be the next witness.

In the meantime, we have had a request from Mr. Walling, who is here representing Governor Greene, of Rhode Island, that he be permitted to proceed.

I might say that we invited the governors of all the textile States, but Governor Talmadge, who was the only exception, to appear here and testify.

Mr. Walling is here representing Governor Greene. All told we have about 45 witnesses who would like to be heard. They come from the North, the South, the East, and the West, and they will substantiate very briefly the testimony presented by the leaders of the organization.

I might say, Mr. Chairman, that Mr. Gilbert, representing the Southern States Industrial Council, stated that the employers wanted more power. We have pointed out in our statement that they have the power and we are trying to curb it.

We charge the Southern employers with exploiting labor. We charge also that this same organization is headed by Mr. John Edgerton, an exponent of Christianity, who threatened to secede from the Union unless the Government stopped its regulation of industry.

Mr. SCHNEIDER. I did not quite get that last statement.

Mr. GORMAN. That Mr. John Edgerton, a member of this organization that Mr. Gilbert represents, threatened to secede unless the Government stopped this practice of industrial regulation.

We believe our statements will dispute the statements made by Mr. Gilbert.

Mr. LUNDEEN. Was that a recent statement?
Mr. Gorman. It was quite recent. It was within the last 6 months.

Mr. Gilbert also said 97 percent of the employers are maintaining the code.

Mr. LUNDEEN. I think he said 92 percent.

Mr. GORMAN. Very well, then. We will produce evidence at this hearing to show that no more than 50 percent of the employers are maintaining code standards.

If it is agreeable to you I would like to introduce Mr. E. Metcalf Walling, representing Governor Greene, of Rhode Island.

Mr. KELLER. We are quite willing to do that. But the hour for the committee to adjourn temporarily has come, so we shall have to go over to the Hall.

I shall ask for permission to hold the hearings during the session of Congress. And I think it will be granted. We have no right to hold hearings here during the session of Congress without permission of that body. If it is granted, we will come back here at 1:30 and start the sessions at that time and continue until all of you have had your say. We shall adjourn from the present moment until 1:30.

(Thereupon, at 12 noon, a recess was taken in the hearing until 1:30 p. m. of the same day.)

AFTER RECESS

Met, pursuant to the taking of the recess, at 1:30 p. m. Mr. KELLER. The hearing will please come to order. The next witness, according to the agreement, as I understand it, will be Mr. Thomas McMahon, of the United Textile Workers of America.

Mr. McMahon, will you please come up here near the head of the table so that you will be facing the audience. And I will ask that you talk so that everyone in the room can hear you.

STATEMENT OF THOMAS MCMAHON, PRESIDENT, UNITED

TEXTILE WORKERS OF AMERICA Mr. McMahon. Mr. Chairman, gentlemen, and Members of Congress, my name is Thomas McMahon. I am president of the United Textile Workers of America.

I appear before you today speaking on behalf of the workers in the textile mills. It was my privilege some 3 years ago to come with the employers and during the spring and summer of 1933 aid them and cooperate with them in an effort to bring about stabilization in the industry. None was more appealing than were the textile manufacturers from the South, the North, and the East in their effort to secure redress through the N. R. A.

During all of those weeks that Congress debated the N. R. A. bill, the employers, with myself, were sitting here in Washington in the various hotels getting ready the now celebrated Cotton Textile Code, which was code no. 1. I am rather surprised that those of us speaking for industry today and appearing in behalf of humanity, we who were so willing to give of our best to industry to help build up the material side, now see that practically all of those associations have decided that the press is correct and are antagonistic to our efforts to bring a little bit of sunshine into the homes of the workers in the textile mills in the country.

We are here representing the United Textile Workers of America, affiliated with the American Federation of Labor, and representing every division of the textile industry, operating in 35 States, with approximately 700 local unions. H. R. 9072 known in the short title, as the National Textile Act, gives us what we believe is the necessary legislation for the rehabilitation and stability in the textile industry of the United States.

This act is primarily a labor bill, designed to create a fair, competitive condition through the establishment of uniform labor standards. You will note according to the bill, the textile industry includes the following:

You will find that list in the bill, so I will not stop to include it here.

Approximately 1,250,000 persons are directly affected, but not all of these are employed at the present time.

About 50 percent are females.
The principal divisions employing the largest number are:

(1) Cotton, 400,000; (2) wool, 127,000; (3) hosiery, 125,000; (4) silk, 100,000; (5) rayon and synthetic yarn, 50,000; (6) throwing, 50,000; (7) carpet and rugs, 30,000; (8) rayon and silk dyeing, 25,000; (9) upholstery and drapery, 10,000.

These are approximate figure, and do not reflect the situation at this time. We are merely submitting them to the committee, to give a general idea as to the makeup of the industry. It should also be noted that we had about 37 codes in the so-called textile industry. The above named, however, are the largest groups.

We are asking the Congress of the United States, as a matter of legislative determination, to find the following facts:

All of these have been taken care of by Mr. Ellenbogen and will be contained in the brief which I will file.

We are also asking the Congress of the United States to declare it to be the policy to foster, protect, advance, and regulate the stream of commerce among the States and with foreign countries by the establishment of minimum wages and maximum hours, by the regulation of child labor, work assignments, and other working conditions, by guaranteeing the right of employees to organize and bargain collectively, by the control of excess production, and by other means set forth in this act.

Under present unregulated conditions, wages below a decent standard of health and comfort, excessive hours, child labor, overburdensome work assignments, other unheatlhy and demoralizing conditions of work, and denial of the right of self-organization and collective bargaining, and excess production prevail in the textile industry, cause widespread unemployment and heavy financial expenses to the Government of the United States, and constitute menace to the health, safety, morals, welfare, and comfort of the citizens of the United States.

Competitive conditions in commerce among States in textile products prevent effective correction of such evils through local or State regulation and make necessary for their correction the exercise of the powers vested in the Congress of the United States.

And to finally declare that the existence of the evils in the textile industry as set forth in sections 1 and 2 of this act is contrary to the public interest, and to the policy of Congress. And that it shall be the policy of the Congress to remove these evils by (1) to deny the use of the channels of interstate commerce for the perpetuation and accentuation of such evils; and (2) to deny the use of the mails, the benefits of Government purchases, contracts, loans, and grants, and the privilege of registration of securities to any person producing textile products under said conditions or contrary to the standards set forth in this act.

We also declare in the bill that any employer who agrees to live up to these standards shall be given a license by the National Textile Commission established by the act and furnished with a label or stamp to identify his products.

Child labor is prohibited and provision also made for a dismissal wage.

We do not propose to discuss the legal aspects of the bill. This will be done by our legal advisor. It is my purpose to submit supporting evidence which we believe will convince your committee that this bill should be passed, as a measure of Government protection given to the millions of people affected, and I might say the most exploited group in any of our basic industires.

To get a clear picture, we must delve into the past and summarize, briefly, the development of the industry over a period of 15 years. We are submitting wage data and expect that the Bureau of Labor Statistics will have some one here to discuss the question of wages and hours in detail.

In 1920 American industry was emerging from the war period with war-time profits. The employers were engaged in the impossible struggle to maintain war-time profits in a period of peace. Mills resorted to the device of watering stock. The capitalization of the mill would be increased from $1,000,000 to $2,000,000, based not on any increase in assets, but solely on the estimated future earnings,

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