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popular mind it is regarded as rather a homogeneous group yet, as a matter of fact, the variation in the type of goods produced is such as to create special problems among the different members of the industry. So there are special groups and the institute works with those groups and serves in a presiding capacity and also in a coordinating capacity.

Now, the industry has, in addition to the institute, associationsthe southern cotton mills, for example, have an association known as the American Cotton Manufacturers Association; the New England division has the National Cotton Manufacturers Association. Those two major associations include within their membership all the cotton mills. Now, of course, there are other associations. There is a yarn association.

Mr. RAMSPECK. What connection have the State associations with the institute, if any?

Mr. MURCHISON. No direct connection. The State associations are more closely affiliated with the American and national associations, and through them, of course, work with the institute.

The institute is in close-working relationship with their associations. As a matter of fact, now, the vice presidents of the institute are the presidents of the two major associations.

Mr. Wood. Does the institute ever discuss the matter of collective bargaining among its membership? Did you ever consider that as an organization?

Mr. MURCHISON. No. In the cotton textile industry, the matter of collective bargaining has been so far left to the individual.

Mr. Wood. The institute has not dealt with that at all?
Mr. MURCHISON. The institute has not dealt with that as such.

Mr. ELLENBOGEN. Has it not been discussed at meetings of the institute?

Mr. Murchison. No. The meetings of the institute are all concerned with matters of business policy and with certain relations with the Government as, for example, the processing tax; matters of that sort.

Mr. KELLER. Would you not consider that the subject of collective bargaining is a business matter of interest to the institute?

Mr. MURCHISON. The labor questions are usually put in a separate classification.

Mr. KELLER. And are not considered-
Mr. MURCHISON. I think that is the common practice.
Mr. KELLER. And are not considered in the institute?

Mr. MURCHISON. Xo; the institute has never attempted to determine, or to consult with the industry on matters of labor policy.

Mr. KELLER. Is there any organization within the cotton industry that does take up and consider, as a whole, that question?

Mr. MURCHISON. It may be from time to time the associations have. On that point, however-

Mr. KELLER. What association would you refer to?

Mr. MURCHISOx. It is possible that the American association, the national association, or the various associations have, but I do not know.

Mr. KELLER. Is there a national organization of the cotton industry outside of vour institute?

Mr. Murchison. No; the institute is the only organization that covers the industry as a whole.

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Mr. KELLER. And it does not go-
Mr. MURCHISON. It does not go into those matters.
Mr. KELLER. Thank you.

Mr. Wood. What portion of the North and South textile manufacturers does your organization represent? Is the three-fourths you mentioned, three-fourths of the northern manufacturers as well as the southern?

Mr. MURCHISON. Yes; I would say that is substantially correct. I can provide for you the exact percentages in both cases, Mr. Wood, in a moment, if you would like to have those figures.

Mr. Wood. No; that is sufficient for my purpose at present.

Mr. SCHNEIDER. Is your association affiliated with the National Manufacturers Association?

Mr. MURCHISON. No; not at all.
Mr. SCHNEIDER. It has no connection at all?
Mr. MURCHISON. None whatever.

Mr. ELLENBOGEN. Has the institute discussed the question of hours, Dr. Murchison?

Mr. MURCHISON. Oh, yes.
Mr. ELLENBOGEN. And wages?
Mr. Murchison. Yes; the question of minimum wages, especially.
Mr. ELLENBOGEN. And labor relations?
Mr. MURCHISON. No.

Mr. ELLENBOGEN. Well, what do you call wages and hours? What have they discussed? Give us the topics.

Mr. MURCHISON. Now, if I may, I was hoping to develop that. Mr. RAMSPECK. Mr. Chairman, I was going to suggest that the witness be permitted to proceed with his statement and then submit to questions by the committee.

Mr. KELLER. Yes, I suppose that is a good suggestion. Please proceed with your statement and then we will ask you questions.

Mr. ELLENBOGEN. I did not mean to interrupt.

Mr. MURCHISON. In order to inform the committee as to my own qualifications to discuss the problems of the textile industry, with your indulgence I will tell you what my personal connection with the industry has been.

My native State is North Carolina. I was born within 2 miles of a cotton mill and most of my adult life has been spent in the vicinity of cotton mills. As a young man, many of my associates were workers in cotton mills. I have not only lived in North Carolina but also in Georgia and Virginia.

Mr. Wood. Were you ever connected with the industry in any manner?

Mr. MURCHISON. I have never worked in a cotton mill, have not been connected with the industry in any manner, until this last year. I have had no financial interest in cotton mills, have never owned a dollar of stock in a cotton mill.

Mr. Wood. Are you an attorney?

Mr. MURCHISON. No, I am not an attorney. I have been, during most of my life, a college professor.

I was at the University of North Carolina from 1921 to 1934. At the university I taught economics, and, as an economist, living and working in a community where the major problem had to do with the textile industry, I specialized my studies on the textile

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industry, and in 1930 I wrote a book on the problems of the textile industry, the title of which is "King Cotton is Sick.”

I spent a great deal of time out in the field, making preparations for that book. I spent a couple of months in New England; spent long periods of time touring through the Southern States; and the book was written from close observation of the mills themselves and the management problems.

Following that, I wrote quite a number of magazine articles on that subject. In 1934, I was appointed director of the Bureau of Foreign and Domestic Commerce, began the duties of that office on May 30, 1934, and continued there until November 15 of this

last year.

As director of the Bureau of Foreign and Domestic Commerce, I served on the subcommittee of the Cabinet Committee making textile investigations, and helped prepare certain portions of the report put out by the Cabinet Committee.

During my entire life my feeling toward the industry has been one that was purely objective. I had no interest either way.

In the course of my studies, I have come to have a feeling of very deep sympathy, both for the management of the industry as well as the labor in the industry; and so this morning, in my discussion, I want to assure you in the beginning, that the observations I shall make will be purely objective, untinged with any emotional feelings whatsoever, and unbiased by any special interest.

The bill which we are discussing, the Ellenbogen bill, is described

as a bill

To rehabilitate and stabilize labor conditions in the textile industry of the United States; to prevent unemployment, to regulate child labor, and to provide minimum wages, maximum hours, and other conditions of employment in said industry; to safeguard and promote the general welfare; and for other purposes.

That description, of course, labels the bill as a labor measure and yet, as a labor measure, it undertakes to achieve those particular objectives by completely changing the economic processes within the industry itself.

By setting up a national textile commission; by giving that commission very broad administrative powers; by stipulating what the hours shall be and what the wages shall be; how work assignments shall be determined, and many other things, the bill is really changing the character of the industry itself, changing that character so radically as to be in opposition to everything that we have heretofore thought of as being the traditional American method of doing business.

Now, if that is the purpose of the bill, then it would seem essential to establish that this particular industry is unique. It is not sufficient merely to say that conditions are bad within the industry. It is necessary to say that these conditions are unique as regards American industry as a whole. Otherwise, the proposed legislation is bound to receive the judgment of being discriminatory.

Now, I sat through these hearings all day yesterday, listened very carefully to the testimony of both sides, and have also taken occasion to read the reports of the preceding days' hearings. As the hearings progressed, I was more and more impressed with this fact, that here is an industry which is being put in the spotlight and, being put in the spotlight, of necessity certain deficiencies appear. Of course, it would be the sheerest folly to make denial of the existence of many of these alleged deficiencies.

But this also occurred to me. Turn the spotlight anywhere else you wish to on the American scene; turn your spotlight on the telephone operators; turn your spotlight upon retail-store clerks; turn your spotlight upon the mining industry; turn your spotlight upon the tenant farmers in the South; turn it upon the lumbermen; turn it upon the turpentine workers; turn it anywhere you like, and what will you get? You will get substantially the same story.

Turn it upon the school teachers; turn it upon the universities of the country; turn it upon the hospitals, and you come back with the same result.

Legislation so radical as this, in the sense that it aims to accomplish such drastic changes from established practice then, cannot be justified unless the object of its application can be proven to be unique in the American economic system.

We have in American policy recognized that certain industries are apart and should be put into a separate classification. And one of those classifications, the one most closely analogous to what we are discussing this morning, is the classification of public utilities.

We have had railway regulation in the United States for certain special reasons. We have regulation of the power companies and other public utilities, but I fail to find any instance where any public utility has been subjected to the same detailed degree of regulation as is set forth in the proposed measure, and if industry so vital to American economic life as transportation and power do not receive such drastic regulation, then again that emphasizes the point which I have made, that the cotton textile industry, which is not a public utility, should not be subjected to this type of regulation.

Now, I am the first to admit that there are certain unique characteristics in the textile industry. It is unique in the sense that it is composed of many independent and separate units. Our latest figures indicate about 1,140 manufacturing plants in the cotton-textile industry. They are widely scattered.

Mr. ELLENBOGEN. That is just cotton.

Mr. MURCHISON. Yes; that is cotton. No one unit in those 1,140 occupies a dominant position in the industry as a whole. In that sense the industry is unique.

It is unique in another sense, and that is the wide territorial distribution of the industry has been attained rather recently, and within the lifetime of all of us. We have viewed the migration of the cotton textile industry from a center which lay in the Northeast to a center which now lies below the Mason and Dixon line. But at some stage in its history, all of the industries of America have gone through this migration period. The shoe and leather industry, in moving from New England to Missouri, went through that same experience. So did the iron and steel industry. And as the cotton textile industry has moved south and southwest, it is following a natural economic procedure in the sense that it has been seeking always an environment which provides a lower cost basis.

of course, that fact has to be accepted, and I think in consideration of this proposed legislation, the particular point which I now have reference to becomes very important, because one of the allegations most consistently and vigorously made as regards the textile industry is this, that the low wage scales in the South represent an unfair situation as compared with New England.

It would seem to indicate—that is, the inference would seem to be there, that we had during this period of migration, a certain welldefined group of men who looked the situation over and decided that they could get lower wages in the South, and so they began moving their plants from Massachusetts and Rhode Island, shifting them down to the Carolinas, to Georgia, and to Alabama. Of course, that is not true.

Those of you who would like to have the most authentic history of the development of the American cotton textile industry would go to a book written by Mr. Broadus Mitchell, economist at Johns Hopkins University, recently Socialist candidate for Governor in the State of Maryland. Labor has no more ardent sympathizer in America than Mitchell. I think most of you probably know Mitchell; he is a very close personal friend of mine. In that book he points out that the great majority of the cotton mills in the South sprang up as a result of community endeavor. The local business man, the local preacher, the local school teacher, along with the other members of the community who had civic responsibility, said:

This community needs a pay roll; this community needs an industry which can provide men steady employment, more steady employment to the people who heretofore have had to depend upon agriculture, upon whatever haphazard employments came along.

And there you have got the story or the explanation of the origin of most of the southern cotton mills.

There you have the application of the fact that in a State like North Carolina, for example, approximately 80 percent of the mills are locally owned.

To be sure, in States like Alabama and South Carolina, the percentage of mills belonging to outside ownership, belonging to interests which were previously in the textile business, is somewhat larger. But in every case the ownership is preponderantly local; the management is more than 50 percent locally owned.

The reason why I have mentioned that is this: That the mills have grown up in a given wage situation and have accepted that situation,

The South is a low-wage area, relatively speaking. It has been since the Civil War. It has been generally accepted by students of national income that the Southern States generally have incomes, average individual incomes, which are about one-third less than the national average.

A great majority of the southern workers were agricultural workers and they regarded themselves lucky if they got as much as a dollar a day; and I am speaking of conditions, not in the remote past, but as they now are and have been.

And when a cotton mill comes into a particular community or is built up in a particular community and offers a wage that is substantially above what the people in that community have received, they welcome it. The justification for that wage does not lie in its relationship to what is being paid in any other part of the world. It lies in its relationship to what exists in that community, and it cannot be outherwise. Certainly it removes the taint that it is an unfair wage, because in some other portion of the world the wage is higher.

That is the point that I wish to emphasize here. In making that point I do not in any sense mean to imply that those wage levels are satisfactory. I am merely indicating that those wage levels are his

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