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you immediately set up a straitjacket that may in individual instances do a great deal of harm. It is frankly a compromise between wanting to do something and not wanting the control carried to a point where it really does interfere with the proper conduct of business. Mr. ELLENBOGEN. In other words, you think some Government control is good, but not too much? Is that a fair way to put it?

Mr. BESSE. Yes; with qualifications I think it is correct. I find myself somewhat confused as to how you can have just enough without going too far. I think our experience has rather borne that out. Mr. KELLER. If we could do that, that would be acceptable? Mr. BESSE. I think that would be grand.

Mr. KELLER. I reckon you are aware that outside of the projects under the W. P. A. and P. W. A. we still have about 10,000,000 unemployed idle men in America. How do you propose to do away with that condition? What can industry suggest that will give employment?

Mr. BESSE. I thought we were leaving that to Major Berry.
Mr. KELLER. We are asking you to tell Congress.

Mr. BESSE. I am sorry, Mr. Keller, but I cannot answer that. I do not mean that I have no suggestions, but I don't think they are important in a discussion of this particular bill.

Mr. KELLER. I am trying to go beyond this bill, as I think I ought to do. It seems to me that what we are trying to do here is not only just to make the corrections which this bill is seeking to apply to one industry but it is the very much greater task before us, and that is that we apply something to all industry and that we not only give more jobs to one industry but that we give universal jobs to all men under the American flag. If you have any suggestions along that line I would be delighted to have you give them to us.

Mr. BESSE. I don't think it comes within the purview of this committee. There is nothing new about my suggestions. You have heard them before. But I believe nothing would do more to improve employment conditions in this country than a conviction on the part of business men that it is not a crime to make a profit; that we were on a basis where we would pay our way as we go along; and that we can count on the soundness of the American dollar.

Mr. KELLER. You had all of that, certainly, from 1924 up to 1933; you had everything as you wanted it, did you not?

Mr. BESSE. I would not say so. I thought there was quite a little complaint after 1929.

Mr. KELLER. I did not mean to go beyond 1929 but just to 1929, from about 1921 to 1929. Of course, I understand we had the panic during 1929, but at least in 1933 we had regained practically 100 percent, and it was in 1929 that the stock crash occurred. Isn't that right?

Mr. BESSE. Yes, sir.

Mr. KELLER. During those years unquestionably industry was thoroughly in control of itself. Isn't that true?

Mr. BESSE. Yes, sir; that is true.

Mr. KELLER. Then why did we have that tremendous break-down while industry was in full command?

Mr. BESSE. I don't think I am qualified to answer that.
Mr. KELLER. I think you are as nearly as anybody else.

Mr. BESSE. Without going into a tremendous amount of detail I don't think I could answer it. It would be a waste of time.

Mr. KELLER. You are the last witness we are going to hear tonight, so I would like to have you talk a little bit about it to me. I am interested in it. I am interested in the men who are out of jobs just as much as the men in the coal mines or in others.

Mr. BESSE. You want to know why we had a collapse in 1929? Mr. KELLER. Yes. Unquestionably business was in control, as you admit. If business was not capable of preventing the collapse, then why should we go back to business control?

Mr. BESSE. Because I do not think we have as yet found any satisfactory substitute.

Mr. KELLER. We will not unless we try, will we?

Mr. BESSE. Probably not

Mr. KELLER. You will admit that the N. R. A. was good, at least in certain respects?

Mr. BESSE. For our industry; yes, sir. Others had a much less fortunate experience.

Mr. KELLER. From what the gentleman has said to me, at least, the N. R. A. has practically universally settled conditions. I keep going back to the fact that business had been in full control up to the panic of 1929. Now, if business was in full control up to that point and could not prevent or did not prevent that panic, then why should we trust business again to control the whole thing in the United States?

Mr. BESSE. Again I have the same answer, that until you have a better answer or a better means of making the machinery of this country go, I think you have to be very careful in what to do to the existing means.

Mr. KELLER. That is what I want to get at.

Mr. BESSE. I tried to make these suggestions; but they are so time worn and have been repeated so many times that I don't think you even heard them.

Mr. KELLER. Well, I will try again, if you will let me.

Mr. BESSE. The suggestion was to let business feel that it is not a crime to make money.

Mr. KELLER. I agree with you.

Mr. BESSE. Let business feel that our currency is on a proper basis and that we are paying our way as we go.

Mr. KELLER. You would not say that it is a crime to let labor make a profit either, would you?

Mr. BESSE. Absolutely not.

Mr. KELLER. Then, we agree on that. What would you do about the money? You say you want it more stable. We have agreed on that. Now, let's see if we will agree on some more.

Mr. BESSE. As to how to do it?

Mr. KELLER. Yes.

Mr. BESSE. I think Congress has to learn a little more about economy as the first step.

Mr. KELLER. Where would you start?

Mr. BESSE. I would have started with the bonus last week.

Mr. KELLER. You would not have paid them?

Mr. BESSE. No; I would not.

Mr. KELLER. Then in one place we disagree completely and entirely. We should have paid it off as soon as they came back from

the war. And I would not have reduced the income taxes until they had been paid. After they had been paid out of the incomes arising out of the war then I would have agreed that we should have reduced taxes, but not before. That is one place I disagree with you.

Mr. BESSE. I do not differ with you as to the income taxes.
Mr. KELLER. I am glad you do not. I thank you.

I think that is about all.

Mr. BESSE. May I say that it has been a great pleasure to testify, in spite of the fact that I seem to have quite a different point of view than many of the committee.

Mr. KELLER. I think you have done quite well. You have agreed with one or two of us. I wanted you to agree with me, too.

Mr. ELLENBOGEN. I want to know, Mr. Besse, if you can tell the committee what is the percentage of Government orders which the woolen industry has now?

Mr. BESSE. For 1935, of the total machinery activity, that is, the total number of man hours, approximately 8 percent was accounted for by Government contracts. That includes contracts to our industry and contracts to others whom we made material.

Mr. ELLENBOGEN. What is the normal percentage?

Mr. BESSE. On Government work?

Mr. ELLENBOGEN. Yes; Government work. It is much less, is it not?

Mr. BESSE. If you take as normal the period following the war, and perhaps in the 1920's, it would be much less.

Mr. ELLENBOGEN. I would take 1924 to 1929.

Mr. BESSE. It would be materially less. It would probably be 3 percent, or possibly around 2 percent.

Mr. ELLENBOGEN. If the Government would economize on the C. C. C., camps your industry would not like it?

Mr. BESSE. I dare say that is the case; nor would the C. C. C. boys either.

Mr. KELLER. I have a request here from Representative Plumley, of Vermont, to file with the committee a very short statement with respect to telegrams that he has been receiving.

Is there any objection on the part of the committee?

Mr. WOOD. Do you want to put in all of those telegrams that you have there before you?

Mr. KELLER. No. He says he summarizes them here in this statement. It is just one sheet.

(The statement referred to is as follows:)


Mr. Chairman and gentlemen of the committee:

The receipt of countless telegrams from various Vermont constituents of mine, who are vitally interested in the textile industry, in reference to the so-called Ellenbogen bill, H. R. 9072, impels me to place before you some of the reactions that reside in their minds, as indicated by the content of their messages to me. Rather than quoting these messages in their entirety, I merely wish to submit their various characterizations, contained in some of the wires, relative to the measure in its present form.

It is stated that "if passed it sounds the death knell to textile industry"; that it "would spell ruin to the industry", "would be intolerable and work an injustice"; that it would "jeopardize the livlihood of thousands of workers in this community" that it is "impracticable as a whole and a detriment to the industry"; that it is

"vicious in application", "a menace to best interest of employer and employee"; that it "will endanger the existence of my job and of my company"; that "it spells ruination of the textile industry"; that it "is objectionable in its present form"; that it will "curtail production"; will "increase burden and costs"; and that it is "hazardous", "dangerous", "harmful", and "detrimental”; that it contains provisions, in its present form, that are "intolerable, unworkable, tending inevitably to wipe out woolen industries * would unquestionably compel shutdown of mills resulting not only in loss of capital investment but of even greater importance in unemployment of thousands of workers, causing widespread misfortune * * * ""

* *

I would like to have it appear that the quotations that I have used were taken from messages this morning received from the following constituents of mine, resident in the vicinity of Burlington, Vt.:

Messrs. Leonard Alexander, George Breault, J. R. Butter, Harry W. Carleton, Lester Cruse, Wight Davis, George Edwards, Joseph Erwin, George and Hugh Finnegan, Harley Fisher, Henry Fountain, Harley Hurlbert, Edward Johnson, George Keefe, John Keleher, Charles Lavallee, Oliver Lecuyer, Harold McNulty, John Major, Henry Morrissey, Fred Norman, John O'Brien, W. K. Olsen, A. Č. Quance, Frank Schmanska, Clifford Slater, A. Talbert, Edward Walsh, and George Whitney.

Mr. KELLER. We will adjourn at this time until tomorrow morning. Tomorrow morning we will meet 15 minutes late for the taking of testimony. The committee will meet at 10 a. m. to go into executive session.

(Whereupon, at 5 p. m., the committee adjourned until Friday, Jan. 31, 1936, at 10 a. m.)





Washington, D. C.

The subcommittee met at 10:15 o'clock, Hon. Kent E. Keller (chairman) presiding.

Mr. KELLER. The committee will be in order.

Our first witness is Dr. Murchison.


Mr. KELLER. Doctor, will you state your name and whom you represent?

Mr. MURCHISON. I am representing the Cotton Textile Institute. I am president of the Cotton Textile Institute.

Mr. WOOD. Does that institute have any connection with the organization of the gentleman who testified yesterday?

Mr. MURCHISON. No; his was the Wool Institute. I have been connected with that institute since November 15, so the period of service is rather short so far.

Mr. KELLER. Before presenting your formal statement to the committee, will you explain to us what these institutes are doing, or what they are supposed to do; with reference to your institute, what connection is has with the industry?

Mr. MURCHISON. I will be very glad to try to do that.

Mr. WOOD. In other words, the purpose of the institute.
Mr. KELLER. That is what I mean exactly.

Mr. MURCHISON. Yes. The institute is an organization whose membership is composed of, I should say, approximately three-fourths of the cotton textile industry. The institute has for one of its major functions the collection of statistical data from its members.

The institute receives periodical reports on production and inventories, wage schedules, and other matters of interest for the industry as a whole.

The institute also has its new uses division and its sales-promotion division, the purpose of which is to promote the consumption of cotton goods in whatever way seems possible.

The institute also serves as the clearing house for the opinions, policies, and views of the industry as a whole.

The institute calls at meetings of the various groups of the industry. For example, the sheetings group or the print-cloth group, or the yarn group; because the industry is very complicated, and although in the

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