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panies, and the others clear on down the line. That was not reported for the very simple reason that I have stated to you. But that Mr. Wood is entirely correct in his statement I think there is no possible doubt.
I think nothing was ever said about it until it had passed over. At that time we were at the bottom of the emergency that was in existence and, therefore, we immediately voted the R. F. C., which was simply a revival of the War Finance Corporation, and began by setting aside $2,000,000,000 for the use of the industry of the country as a starter. And since then we have voted several billions more.
I think Mr. Wood is entirely justified in making that statement.
Mr. Wood. And they had before this meeting representatives of the automobile industry, the electrical industry, coal, steel, oil, lumber, and everything you can think of. We had a representative of the Manufacturers' Association and the National Chamber of Commerce, and groups from everywhere. There were a hundred or more industrialists who testified, and they covered the whole field.
Mr. KELLER. That part is printed?
Mr. WEST. As to this question of price, since that time I have been rather intimately associated with practically all branches of the cotton-textile industry and the merchants and the manufacturers, and I have not been aware of any who considered price fixing as a method of helping the industry. If one of them has urged it, I would like to get his testimony, because I might learn something.
Mr. Wood. You are getting away from my question. Aside from this so-called price fixing how are you going to keep up prices, whether it be price fixing or whether it be control of production, or whatever method you have? What method have you? Surely the textile manufacturers want to keep up the present basic prices.
Mr. WEST. We want better prices.
Mr. Wood. Or to 1933. I asked you what the cotton textile manufacturers had in mind as a method of keeping the present basic standard prices from going down. You want the prices to go up, of course.
Mr. West. The adjustment of our current production to the current demand for goods-production control.
Mr. Wood. Of course, that is a general statement.
Mr. Woon. But that does not answer my question. What method do you think should be employed? If nothing is done through legislation, what do you suggest be done?
Mr. West. The intelligent operation of the plants. The overproduction of the industry, Mr. Wood
Mr. Wood. You just want to go along and operate your own industry without any governmental interference?
Mr. WEST. I will not say that. No, sir; I will not say that, not at all.
Mr. Wood. How far do you want the Government to go? This bill contemplates going a certain distance, and we would like to have the opinion of the cotton textile manufacturers as to how far they want to go on Government control or Government supervision.
Mr. West. I do not think Government supervision-
Mr. West. I do not believe we need the supervision of the Government as contemplated in a bill of this kind.
Mr. Wood. Do you think you need any?
Mr. Wood. I am not talking about this bill but about the extent of the regulation, if any, that you need now. Can you mention something?
Mr. West. No, sir. At the moment I do not believe that it is essential for Government regulation of the textile industry.
Mr. Wood. You think nothing should be done, but we should let it remain in status quo?
Mr. WEST. Except the protection of our markets and giving us a fair chance in the markets, this situation having been brought about by conditions that have arisen because of Government activities. We pass a bill and we set up a regime in the industry which enormously raises the cost and immediately puts many of the products on the shelf. We have lost our export markets and are under a constant threat in the home markets. We cannot produce goods as cheaply as Japan; but we ought to have our markets. We permit jute to come into this country to be made into bags. But thousands and thousands and thousands of bales of cotton could be consumed and thousands of yards of cloth used.
Mr. Wood. Then you favor Government regulation by tariff to protect your prices against foreign importations? And, of course,
am in favor of that, and every good citizen is. But how far do you expect the Government to go to protect the employees in their wage standards? If the Government is going to protect you against the importation of cheap goods that will destroy your prices then don't you think the Government ought to go far enough to protect the wage earners in their standards against unscrupulous employers?
Mr. West. Yes, sir. Of course, that immediately brings up, the question of the Federal Government and the way in which it is done. It seems to me that the difficulty with that phase in Government regulation is the rigidity of it; for instance, a maximum 35-hour bill when that is the maximum and there is no latitude and no leeway in it.
Mr. Wood. Suppose that is necessary to take up the slack in the employment?
Mr. West. It does not take up the slack of unemployment in the textile industry. By going to 35 hours the textile industry can contribute nothing to the unemployment situation except by going on three shifts.
Mr. Wood. That is what all of the opponents of this legislation have contended. But some of the members of the committee have a different opinion about it.
Mr. KELLER. Mr. West has now been on the stand for a little more than an hour and a half, and we have about five more witnesses to hear this evening.
Mr. Wood. I would like to ask one or two more questions.
Mr. Wood. The consumption of textiles, that is, the consumption of cotton textiles in this country, is no greater than it was 5 or 6 years ago. You said that the consumption of textile goods in this country had been increased.
Mr. WEST. That is stated in this report here (indicating).
Mr. Wood. Don't you attribute some of that to the fact that rayon goods have taken some of that market from you?
Mr. West. Oh, yes.
Mr. Wood. Rayon goods have increased by leaps and bounds in the last few years?
Mr. WEST. Yes, sir.
other Government regulation, but the lack of consumption of your cotton goods can be attributed more to the increase in the use of rayon and other substitute materials?
Mr. WEST. I am sure I did not give the impressions that we attributed this decrease to any Government intervention. Rayon has affected it. There have been very many factors that have affected it.
Mr. KELLER. We will now call Mr. Steele.
STATEMENT OF FRED W. STEELE, REPRESENTING THE NATIONAL
ASSOCIATION OF COTTON MANUFACTURERS
Mr. KELLER. Will you please state your name and address?
Mr. STEELE. My name is Fred W. Steele. I am general manager of the Grinnell Manufacturing Corporation, New Bedford, Mass.
Mr. Chairman, I wish to present this statement on behalf of the National Association of Cotton Manufacturers.
The National Association of Cotton Manufacturers is a voluntary trade association in continuous operation since 1854, representing through its membership practically the entire northern and eastern spinning and weaving sections of the cotton-textile industry.
According to the United States Census of 1933, the latest issue, this section of the industry employed 102,284 wage earners, operated 10,509,404 spindles and paid $71,844,000 in wages.
The nature of the cotton-textile industry is so complicated, and the variety of its products so great, that it has been impossible in the time allowed to prepare for this hearing more than a cursory picture of the situation.
The products of these mills are extremely diversified. Many of these products have no relation to each other in the uses to which they are put, in the cost of their manufacture, or in part of the machinery that is used in their manufacture; but with few exceptions these mills could be classified as fine goods or specialty mills.
The mills manufacturing these finer goods are in general equipped with modern machinery, and the intense competition in the industry naturally results in high efficiency of operation.
The National Association of Cotton Manufacturers, in concurrence with the American Cotton Manufacturers Association and the Cotton Textile Institute, is keenly interested in any proposal that will benefit the employee, the employer, and the community in which the industry is located.
The attitude of over 90 percent of the cotton manufacturing industry, by continuing voluntary observance of the provisions of the invalidated National Industrial Recovery Act is ample evidence of their earnest desire.
We respectfully suggest that your committee take judicial notice of the recent reports of the studies and surveys conducted by various Federal bureaus and departments, as follows:
The report of Dr. Sachs of the Research and Planning Division of the National Recovery Administration.
The report of the Textile Labor Relations Board's Textile Work Assignment Board.
The report of the Federal Trade Commission on the cotton textile industry.
The textile report of the Bureau of Labor Statistics, United States Department of Labor.
The report on conditions and problems of the cotton textile industry by the Cabinet Committee appointed by the President.
The findings in these cited reports and surveys, and our own experience with governmental regulation of industry, convince us of the futility of the proposed or similar legislation.
The bill under consideration by your committee, H. R. 9072, the Ellenbogen bill, so-called, is so pregnant with fallacious provisions that instead of stabilizing conditions in the industry (the intent of the proposed legislation) it would disrupt conditions to an extent that we have not yet experienced. Hence, the National Association of Cotton Manufacturers must be recorded as definitely opposed to the proposed legislation.
Further, in view of the recent United States Supreme Court decisions in the cases of the United States v. The Schechter Poultry Corporation and the United States v. William Butler et al., receivers for the Hoosac Mills Corporation, and the many other decisions of this court relating to interstate commerce, we contend that cotton manufacturing does not enter directly into interstate commerce; consequently, we doubt the constitutionality of this proposal if enacted into law.
Mr. Chairman, as an individual manufacturer I come before you not only to enter my protest on this bill but, if permitted to do so, to point out my objections.
All of my life I have been connected with the textile industry, either as an ordinary workman, department head, or managing official.
By virtue of conditions over which I had no control I was forced to go to work at an early age, and by virtue of living in a textile community I found myself in the textile industry, where I have been ever since.
I have worked through practically every department of the plant, I have been foreman of various departments, and for the last 20 years I have been at the head of various textile corporations responsible for the manufacturing, financing, and merchandising, of their products. In my capacity as a workman I was a union member, and in my capacity as the head of a corporation, I am a member of the Manufacturers' Association.
Therefore, gentlemen, I am somewhat familiar with the problems of the employee as well as those of the employer and, gentlemen, those are plenty at the moment.
I have given this bill much study, and frankly, cannot endorse it, for various reasons, namely: While this bill goes to great extent in regulations of trade, it also is constructed to give much protection and
benefit to the employee; this in itself commendable. But it neglects to make any provision for the welfare or protection of the employer and, gentlemen, in considering this bill, keep ever before you that the welfare of both the employee and the employer are more closely related today than ever, and the success of those in the textile industry today depends as much upon one as the other, and only the realization of this point by all concerned, along with calm thinking, and earnest efforts for the good of all concerned, can bring this about.
Our whole structure can well be described by the three-legged stool. Our structure, like the stool, is constructed with three legs, one leg is capital (the money invested in the plant), one is labor, and the other is business (the consuming market) and like the proverbial threelegged stool, it will not stand with one of these legs missing.
Therefore our problems are mutual, and when a bill is proposed that does not provide for the welfare of all of those concerned, it becomes not only a detriment, but a danger, and cannot bring about that feeling of trust and satisfaction that we all hope for and that is so essential
This bill says that a commission will be appointed, and they, in turn, will have the power to establish agencies, divisions, bureaus, and appoint without regard to the provisions of the civil-service rules, a secretary, attorneys, special experts, consultants, examiners, clerks, and other employees as it may deem necessary, and in no instance does it provide for the necessary qualifications so necessary to work of this kind.
This bill also sets forth that it is hereby declared to be the policy of the United States, and among the purposes of this act, 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 assignment, and other working conditions, by guaranteeing the right of employees to organize, and bargain collectively, by the control of excess production, and so forth, but this bill does not set forth any explanation whatever as to how they expect to foster, protect, advance, and regulate the stream of commerce coming from foreign countries, neither does it set forth any method to take care of even the great discrepancy today between the extreme low wages of foreign countries and those paid our employees here in our own country, and, gentlemen, this differential today is so great, that we now pay as much for 1 hour as some of them pay for a full day, and even today the production of goods made under the low wages in foreign countries is coming into this country at an ever-increasing rate, and today is taking from our own people that employment which should be theirs, while they are forced onto the welfare list in the community where they live.
I might say, Mr. Chairman, that the production coming in from Japan of the kinds of goods made here in this country, and many of them I hope to make in the plant of which I am the head. In 1931 there were 771,000 yards which came into this country.
Mr. KELLER. Will you please repeat that?
Mr. STEELE. In 1931 there were 770,208 yards that came into this country.
Mr. ELLENBOGEN. What is that? That is yards of what?