competitor, as is prescribed in that rule, has the effect of possibly subjecting one to a penalty of $100,000 a day, or imprisonment for 1 year, which could grow out of a claim that a salesman spoke derogatorily of a competitor's merchandise.

Paragraph (e) of that same section prohibits the making of secret rebates and, of course, is subject to the same possible severe penalties. What constitutes a secret rebate? There is no law compelling one to publish his prices made. In order to convict one of a criminal offense for giving a secret rebate to a customer, it ought to be defined somewhere in law what constitutes secrecy, or, stated conversely, to whom is one obligated to make known his actual prices?

Investigations: The sections of the bill relating to investigations are most unusual and very drastic. These provisions invest the commission with the authority to call for data which cannot be reasonably construed to affect or relate to interstate commerce within the powers of Congress. The investigatorial powers of the commission, as given by this bill, can very successfully be resisted as being in direct conflict with the rights guaranteed to every citizen against unreasonable searches and seizures, as provided in the fourth amendment to the Federal Constitution.

Invalid laws: The fear of legislation hostile to industrial interests halts and actually stifles the buying and selling of commodities. The enactment of invalid laws does, and causes, incalculable and irreparable harm, loss and damage. Innumerable contracts are entered into pursuant to such laws. Money is paid to individuals and to the Government. When the laws upon which such transactions are based are declared unconstitutional, the rights and liabilities of the parties. involved are not easily determined. When money is paid to the Government through taxes or fees and the money is spent by the Government for administering the bill, or paid to individuals, it is not to be contemplated that the Government could or we recover any of the money so spent. Because a sovereignty cannot be sued without its consent, and many prescribe conditions which make it impossible for one to recover tax money paid under an illegal law, or Congress could even repudiate the obligation and refuse to appropriate the money to cover claims for refunds, uncertainties are injected into the entire business structure.

That is the situation today, growing directly out of the decision nullifying the Agricultural Adjustment Act. Customers all over the country are refusing to buy textile goods because of unsettled controversies growing out of claims by customers all down the line upon their sellers and suppliers. First processors who paid the taxes directly to the Government are in no position to make definite commitments about refunding to their customers, because there is no way of determining what action may be taken by Congress about making any refunds, except as indicated by the amendments to the Agricul tural Adjustment Act, which require the claimant to assume a burden of proof about whether the tax is passed on, or not, which showing is impossible to make in a great majority of the cases.

As regards this bill, the determination of one's rights would require a year or more before it could be passed upon by the court of last resort. Meanwhile, a plant owner would be prohibited from using the mails or shipping any goods in interstate commerce, which would amount to confiscation of property and the closing down of the plants.

Mr. KELLER. We asked and received permission of the House to continue the hearings during the sessions of the House. We will have to make that same request again Monday at noon. I presume there will be no difficulty in receiving that permission. But you will all understand that if the permission is granted we will start here Monday morning and keep going until we hear every man who wants to be heard to the fullest extent possible.

Mr. MATTHEWS. Mr. Chairman, there is one brief point here. I want to call your attention for the purpose of the record to the fact that the brief I am filing is on behalf of the National Association of Finishers of Cotton Textile Fabrics. But I also represent some other industries that are specifically enumerated under this bill and under the definitions.

Under (c) is enumerated rugs, carpets, or other floor coverings. That phrase would mean linoleum and felt base. And I would like to make a specific request that that clause be deleted.

Mr. ELLENBOGEN. We will take it out if you want us to. I mean I am willing to suggest to the committee that that be done.

Mr. MATTHEWS. That is my request.

Mr. KELLER. Then we will meet here Monday morning at 10 o'clock.

(At 5:30 p. m., Jan. 31, 1936, an adjournment was taken until Monday, Feb. 3, 1936, at 10 a. m.)

TO REHABILITATE AND STABILIZE LABOR CONDITIONS IN THE TEXTILE INDUSTRY OF THE UNITED STATES

MONDAY, FEBRUARY 3, 1936.

HOUSE OF REPRESENTATIVES,
SUBCOMMITTEE ON LABOR,
Washington, D. C.

We will proceed

The committee met at 10 a. m., Hon. Kent E. Keller presiding. Mr. KELLER. The committee will come to order. with the testimony of Mr. Dorr.

STATEMENT OF G. H. DORR, APPEARING FOR COTTON TEXTILE INSTITUTE

Mr. KELLER. Will you please state your name and address?

Mr. DORR. My name is G. H. Dorr. I am a member of the firm of Hines, Rearick, Dorr & Hammond. My late partner, Mr. Walker D. Hines, was formerly Director General of Railroads in the Wilson administration. He was the first president of the Cotton Textile Institute. Since that time my firm has been acting as counsel for the institute.

Mr. KELLER. Do you mean for the Cotton Textile Institute?

Mr. DORR. Yes, sir; for the Cotton Textile Institute. I was closely associated with Mr. Hines in his work. In January 1935, when the then president of the institute, Mr. George Sloan, resigned, I was asked to take the presidency until a new president could be selected. I consented to do so for 2 months. I was asked to continue from time to time, and I did so continue until October 1935, when I said I could not continue longer in that position. Dr. Murchison was selected and took the position in November. In October when I retired from the presidency I was elected chairman of the board.

Mr. Chairman, I had the privilege of assisting in the formulation of the Cotton Textile Code, and I had the privilege of assisting in its administration, except for a period of 6 months when I was absent from the country. All of those men who were actively engaged in the formulation of this code and who were actively engaged in its administration look back upon the efforts they made at that time with the feeling that they were engaged in a work which was not only of very great interest and of very great importance, but they look back upon it with a feeling of satisfaction, having had the privilege to engage in that effort which we felt was for the benefit of the industry and for the benefit of the country.

You will recall that even before the National Industrial Recovery Act was passed, and while it was pending in Congress, the President invited industry to come forward to participate in what he described

as a partnership effort to improve conditions. He invited and the act invited industry to come forward with proposals as to the conduct of their business which would be useful in the emergency.

Responding to that invitation the cotton textile industry formulated proposals informally through discussion with officers of the Government, and those officers of the Government called in representatives of labor; so when the act was finally signed, and on the very day the act was signed, it was possible for the industry to respond to the invitation of the President by laying on his desk a proposal for the first code.

After hearings and some modifications which were presented by the industry and after consultation with the Government, that code was approved and it went into effect. I believe it was one of those codes that was satisfactory from the standpoint of the Government in being thoroughly and carefully observed by the industry itself, as was indicated by the report of the Bureau of Labor statistics and by statements made by the Administrator of the N. R. A.

That high degree of observance rested upon the fact that the industry was unitedly behind that effort. With the decision of the Supreme Court in the Schecter case we found that that code was without binding force and effect, and we were in the position where we had been before the National Industrial Recovery Act of seeing what we could do to maintain and improve conditions in the industry by voluntary effort. Much had been done in the past, for example, with regard to child labor. The fact that in 1918 the Supreme Court had decided that Federal acts forbidding child labor or forbidding the transportation of goods made by child labor did not stop efforts within the industry to deal with that problem.

And I think it would be of interest to you to know that that problem had so been dealt with in the States by the manufacturers themselves and when it came to the formulation of a code, or conferences for its formulation, there was no suggstion either from the Government or from the representatives of labor who participated in those conferences that it should deal with child labor. That suggestion came from the mill men during the course of the hearing as a final mark of the extinction of any such practice in the industry. And that had been accomplished.

There have been efforts to shorten the workweek, to reduce the hours from those in force at that time to a day shift of 55 hours and a night shift of 50 hours. They had met with a very wide measure of success in the industry.

Mr. KELLER. Reduced to what?

Mr. DORR. Reduced to 55 and 50 hours. This was prior to the code.

Mr. KELLER. That is, the industry had done that itself?

Mr. DORR. Yes, sir; it had.

Mr. KELLER. It had already come down to that before the code was formed?

Mr. DORR. Yes; very generally, although I will not say universally. But that had become the general practice in the industry. Further, there had been an effort to eliminate night work for women and minors, in which the industry had unanimously and preponderantly joined. Those efforts had been made prior to the code. They had met with a very large measure of success. They were faced imme