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In the second place, there seemed to be a little confusion this morning about the situation regarding the movement of cotton mills from the East on the one hand to the South on the other. The impression that I got was this, that somebody felt there had been a great movement of mills, which had gone to the South and had built mills with northern capital. That is not strictly the case. There has been a great movement of northern capital to southern mills, but by and large in the greatest number of cases it has been the purchase of mills, mills which were already existing there, and in some cases the enlargement of those mills, and there has been a comparatively small amount of actual development of new property. There has been some, but compared with the purchase of properties that already existed and were operating it was small.

The great bulk of cotton mills in the South today remains owned by local capital. It was stated this morning that in the case of the largest mills that did not obtain, but that statement is not correct. The largest of the textile mills in the South are still owned and operated by local capital.

Of course, the detailed information on that is available to the committee, and I shall be very glad to support it in any way the committee might like to have it supported. But the fact of the situation is that these mills that Dr. Murchison described this morning are still owned largely by local capital.

Mr. KELLER. You say you have information available on that subject?

Mr. WEST. Yes; it can be readily obtained.

Mr. KELLER. I think the committee would be glad to have it. Just put it in as short form as you can put it.

Mr. WEST. Yes.

Mr. KELLER. I would like very much to make it a part of your testimony.

Mr. WEST. All right, sir.

Just by way of illustration, I will say that the mill of which I am the head is owned by 2,200 stockholders, the majority of whom reside within 200 miles of the city of Danville. The ownership is very widespread.

Mr. Wood. Of whom are these 2,200 stockholders composed? Are those employees, or who?

Mr. WEST. Comparatively few of the employees own stock. of them do. They are the local people, the tobacco people--of course, southern Virginia is a great tobacco country-merchants, farmers, and professional men. Over a long period of years they have invested their savings in the securities of the Riverside and Dan River cotton mills. That is quite typical of a great many of the mills in the South. In regard to the bill-in the first place, I should like to suggest a moderation in the language used in parts of the bill, particularly in section 2 (a), paragraph 1. That is the section, you will recall, which refers to the conditions that prevail in the cotton-textile industry as constituting, to use the words of the bill, "a menace to the health, safety, morals, welfare, and comfort of the citizens of the United States."

It should be borne in mind that in the event this bill becomes a law, the commission which is set up under the bill will, of necessity, have to obtain the sincere cooperation of all interests in the industry, and

if the commission in its approach to the problem that is handed to it by this bill is dominated by the idea that it deals with a menace to American life, the work of the commission will be unspeakably complicated.

Mr. WOOD. That subsection 1 of section 2 is only a declaration of principle. I cannot see that you should have any objection to this language [reading]:

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

You do not deny that such conditions do constitute a menace to the health, morals, and safety of the people, do you?

Mr. WEST. That is precisely what I deny.

Mr. WOOD. You deny that those conditions would be a menace to the safety and morals of the people?

Mr. WEST. According to the wording of this, as prevails in the textile industry.

Mr. WOOD. A certain amount of that prevails in every industry. There are good and bad employers in every industry, and wherever it prevails it constitutes a menace. That is my understanding of what the subsection means.

Mr. WEST. It is quite likely that we do not read it the same.

Mr. WOOD. Well, then, let us amend it by saying, "Wherever prevailing in the industry."

Mr. WEST. I am talking to the bill, Mr. Wood.

Mr. WOOD. That is what I am reading now. "Wherever prevailing in the industry."

Mr. WEST. It does not state that, sir. It states that these conditions prevail in the industry.

Mr. WOOD. Can we not meet your objection by an amendment stating

and excess production, wherever they prevail in the textile industry, cause widespread unemployment

and so forth?

Mr. WEST. I think it is quite likely that the wording might be amended. That is what I am pleading for in this.

Mr. Wood. It is not a matter of wording. I do not think there would be any objection to having it read that wherever it did prevail in the industry it would constitute a menace to health, and so forth. In fact, it does it in that or any other industry. I do not think there would be any objection to that provision at all, do you, Mr. Chairman? Mr. RAMSPECK (presiding). I think that is an immaterial detail. I suggest we let Mr. West proceed.

Mr. WOOD. Yes; I do, too.

Mr. RAMSPECK. I suggest we let Mr. West go ah ment. What we would like to know is, what prevailing?

Mr. WOOD. I think it would be best to let the his statement.

Mr. RAMSPECK. Yes.

Mr. WEST. I shall be glad to handle it in any way that suits the convenience of the committee.

Mr. WOOD. Whatever is convenient to you.

Mr. WEST. If it is to the convenience of the committee to question me as I go along, that will be perfectly satisfactory, sir.

Mr. Wood. All right.

Mr. WEST. What I am suggesting is a moderation of this language, because an industry that employs some million of people, which provides the livelihood of this million people and their dependents, and which supports by its taxes whole townships, counties, and in some cases States, can hardly be looked upon as a menace to American life. If you were to write to the city council of the city of Danville and ask them if the Riverside and Dan River Cotton Mill was a menace to that community, I am quite sure of the answer you would get, from them, from the authorities in Pittsylvania County, or from the authorities in the State of Virginia and many other textile communities in the South.

The use of that kind of language in a bill which is proposed to be passed by Congress is an extravagantly inaccurate use of the English language.

During the last few years the textile industry has been subject to numerous surveys: The Cotton Textile Labor Relations Board, the Winant Board, the Textile Labor Relations Board, the Textile Industry Work Assignments Board, the Bureau of Statistics, and the Cabinet Committee.

A careful study of the reports of these authorities fails to reveal an opinion even remotely approaching the calling of the industry a menace. It is going to be sufficiently hard to deal with the problems of the textile industry without further complicating it by irresponsible charges and countercharges.

In the spring of 1935 at the instance of certain Members of Congress, the President of the United States appointed a committee to report on the conditions and problems in the cotton textile industry. This committee was composed of four Cabinet members and an exhaustive. study was made, the results of which were embodied in a report transmitted by the President to the Congress under date of August 21, 1935.

The report has been published as Senate Document No. 126. I respectfully commend this report to the attention of this committee. It deals at great length with the problems sought to be answered. by the Ellenbogen bill. It is a dispassionate, calculated, objective study of a great industry. Its findings and recommendations come as the result of studies, the prosecution of which engaged such services as are rarely at the command of an industrial investigation.

In summary, this report of the Cabinet Committee lists four basic problems of the cotton textile industry. It might be helpful to the committee to review this bill in the light of the extent to which the bill might help to solve the problems outlined by the Cabinet Committee Report.

Mr. WOOD. That investigation was made before the N. R. A. was declared unconstitutional, was it not?

Mr. WEST. No, sir. That is not quite correct. It was authorized before, but it was prosecuted and was not published until long after. The report was published in August 1935.

Mr. KELLER. You refer to the report on the conditions and problems of the cotton textile industry made by the Cabinet Committee?

Mr. WEST. Yes, sir.

Mr. KELLER. The committee appointed by President Roosevelt? Mr. WEST. That is right. Senate Document No. 126.

Mr. KELLER. That is right; thank you.

Mr. WEST. The four problems that this committee, as a result of its investigations, outlined as facing the industry are as follows: In the first place [reading]:

Excess capacity and obsolescence are serious problems.

I shall deal with that in just a few minutes in the light of the provision of the bill in this regard.

The second problem [reading]:

The domestic market has been disturbed by recent imports of cotton textiles from Japan.

It can be presumed that a congressional bill of this importance would seek to deal with the basic problems that have been outlined as the problems of the industry, yet we find on this point that on one of the basic problems that is outlined by this Cabinet Committee Report as having to do with the success of operation of the industry, the bill is silent. It has nothing to say. It has nothing to offer. The third problem that is listed by the Cabinet Committee's Report is this [reading]:

The utilization of cotton products has not in recent years been increasing. That is to say that with the growth of population in this country and with the conditions that have been prevailing, the consumption of cotton textile fabrics has not been on the increase as one would suppose.

Mr. WOOD. That is in recent years?

Mr. WEST. Yes, sir.

Mr. WOOD. There ought to be a pretty good reason for that; lack of purchasing power caused that.

Mr. WEST. Yes.

Mr. KELLER. Let us get through with his statement first, Mr. Wood, if you will, please.

Mr. WEST. There are a good many ways that that condition might be helped that have not been dealt with. The bill has nothing to say about it.

Just to mention one item, the Cabinet Committee recommends legislation which will authorize net weight trading in cotton, the baling of which now is in goods which are made of jute imported into this country. It is estimated that some 350,000 bales of cotton would be used for cotton bagging to cover cotton, that should be woven by the mills in this country. Yet the bill, which is dealing with the basic problems of the industry, overlooks items of that kind.

The fourth problem that is presented by this committee's report is this [reading]:

Much of the present system for merchandising and marketing of cotton textiles is wasteful and involves undue hazards.

Section 28 of the bill lists certain trade practices which would be forbidden as a condition to getting a license.

Now, let me return to the first one, this question of excess capacity. The reference to this problem in the bill is in section 26, which provides for the commission to study continuously the relation of the effective productive capacity and the rate of operation of the various distinguishable branches of the textile industry to actual and potential demand for the products thereof.

Of course, the purpose of that is to provide a means of production control for the industry in a large measure as a matter of actual practice. The bill contradicts itself somewhat as to the possibility of putting it into practice, for it says [reading]:

Such limitation of production shall not be used to create or further monopolistic practices or to facilitate increases in the price of goods to the consumer

In my opinion it would be very difficult for any commission to issue restrictions of production without ultimately affecting the price of goods. The whole theory of restriction of production has to do with maintaining or raising prices of goods. When the bill provides that it shall not be used for that purpose, it largley contradicts itself. Therefore, you will see that the provisions of the bill contribute comparatively little to the solution of the basic problems of the operation of the cotton textile industry as outlined by the Cabinet Committee. After all, the bill is primarily concerned in prescribing the specifications of working conditions within the industry rather than coping with the basic conditions that confront the industry.

These working conditions are outlined in section 22, and I should like to comment briefly on them.

In the first place, there is the provision for collective bargaining. The provision for collective bargaining in the bill is but a repetition of the National Labor Relations Act, which is today the law of the land. It has been passed by Congress, and there is nothing in this bill that I can see which will strengthen the National Labor Relations Act. Therefore, putting it in this bill does not contribute a great deal to the problem that faces us.

It secondly mentions the elimination of child labor or the prohibition of child labor. That point was very adequately covered this morning by the fact that child labor by and large did not exist in the cotton textile industry today. The 90 applications that were made in North Carolina in 1935 might have been made for a variety of reasons, but as an industry we are not interested in employing child labor. The inclusion of this in the bill is more academic than it is of practical importance.

Section 25 has to do with the question of work assignments as part of the duties of this Commission. I should like to state that the provisions that this bill makes for the supervision of work assignments in a cotton mill are wholly unadministrable. I am fully aware of the problem that surrounds the question of work assignments, the so-called stretch-out in the cotton mill, and I am not unaware of its importance. But a provision of this kind is not helpful and it is not administrable.

For instance, it states:

** 15 days' written or printed notice of every intended change in work assignment involving a rearrangement of process or reorganization or specialization of operation by advice to the employees affected and their representatives for

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