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Women in Pennsylvania textile mills, who earned an average of $18.20 per week in 1928, were reduced to a wage of $11.94 per week in 1932 and were obliged to work longer hours despite the lower wage. The men's wages in silk textiles dropped 37 percent between 1928 and 1932 while women's wages dropped 34 percent. In silk, hosiery, and knit goods the number of women earning less than $10 per week of 54 hours increased from 7 percent in 1928 to 24 percent in 1932. The number of men in Pennsylvania textile mills earning less than $10 a week in those industries increased elevenfold between 1928 and 1932. This wholesale collapse of wage standards was as dungerous to the economy of Pennsylvania as it was to the economy of the United States.

The rapid and quite general improvement which took place in the textile industries of Pennsylvania after the N. R. A. was enacted should be all the proof that is needed to establish the soundness of legislation setting up nationally uniform minimum standards for a basic industry such as textiles. In the hosiery industry for instance, although wage payments increased, the employment also increased and sales volume also expanded. The N. R. A. did pull the textile industry as a whole out of a disastrous economic tail spin and placed it back on the road to universal recovery.

After the N. R. A. was declared unconstitutional an effort was made to have the employers voluntarily adhere to the minimum wage and maximum hours provisions of the codes. It was soon apparent that the small minority of employers who would not conform nullified the efforts of those who did.

During the code period industry had "settled down” for a time. The migration of textile mills had been halted, as a result of the fact that a substantial equalization in competitive conditions had been temporarily achieved.

Today Pennsylvania textile manufacturers are again threatening to move out of the State to the South or other sections where local chambers of commerce offer a variety of inducements, which are in effect, opportunities for "chiseling” in one form or another. I am informed that in Philadelphia, between 1929 and 1933, 32 full-fashioned hosiery mills employing about 4,000 people left Pennsylvania for Southern States.

Can the Commonwealth of Pennsylvania or the city of Philadelphia offer inducements that will be sufficient to have factories remain within the State? Most certainly we will not offer to cooperate with manufacturers to cut wages nor will we connive with private detective agencies, with local authorities or the courts, to enable employers in labor to avoid their obligation to bargain collectively with their employees. The day has gone by when the Government of Pennsylvania will act as the willing instrument of feudal employing interests.

Pennsylvania seeks to increase the employment opportunities of its citizens but not at the expense of our civic integrity or by depreciating the living standards of our wage earners.

Under my administration the Commonwealth of Pennsylvania will join with other progressive States in an effort to promote effective and equitable Federal legislation which will afford protection to each State without injuring the interests of any. It is our purpose to promote the welfare of the textile or any other depressed industry by seeking to eliminate unfair competition from any source whether it be from within or outside the borders of the State. No single State or group of States can cope with the problem of cutthroat competition in any industry whose product is even partially in the stream of interstate commerce. Only the Federal Government can provide an effective remedy for the economic maladjustment of Nation-wide industries. It is particularly appropriate that Congress should turn its attention at this session to the problems of the textile industry, which employs a large section of the wage earners of this country. I do not propose to discuss the precise terms of the National Textile Act but will merely state we endorse its general purpose and its method. Pennsylvania is willing to subscribe to a legislative enactment which says to a textile manufacturer "You are perfectly free to do just as you wish in your own establishment but if you insist upon paying wages below the modest minimum scale provided in the law and if you insist upon working your employees longer hours than those set forth in the law, you may not ship your goods in interstate commerce; nor may you enjoy the facilities or services or obtain loans or any other assistance from Government agencies or Government-supported institutions if you insist upon violating the Federal regulations set up for the protection of legitimate employers with whom you are competing.”

Pennsylvania would join with the Federal Government in saying to the textile industry that it must accept Federal regulations in the interest of the States and the Nation as a whole or else it will inevitably degenerate to the point where it will virtually become a social parasite unable to pay its way and requiring subsidies of all kinds in order to exist.

Textile products are a basic need of mankind. Society is willing to pay what it costs to manufacture textiles on a basis that will give to labor a fair wage, to the employers reasonable profits, and that will permit the textile industry to contribute its fair share to the common fund which society must set aside to purchase a measure of security to all its citizens. I urge that this bill be enacted into law as expeditiously as may be possible.

Senator GUFFEY. Mr. Chairman, it gives me great pleasure to present that statement in beahlf of the Governor of Pennsylvania.

Mr. KELLER. I want to say for this committee that that is a great paper.

We appreciate both the Governor's writing it and your reading it.

Mr. Wood. It is a valuable contribution.

Mr. KELLER. I shall certainly use a number of quotations from that paper in the report wbich I will submit to the full committee.

I wish to announce that as soon as the witnesses who are now preparing to make statements have finished them that Mr. Vincent, the coordinator of what remains of the N. R. A. is to come here and give testimony. It will be interesting matter to all of you because it will be from the viewpoint of the Government in view of the whole work of the N. R. A. Mr. Vincent has been with the N. R. A. from the very beginning. I am sure that all of you who are interested in this subject at all will get a great deal out of his statement.

Mr. SCHNEIDER. We will now call Herbert Gutterson.



Mr. GUTTERSON. Mr. Chairman and members of the committee, I am appearing as the president of the Institute of Carpet Manufacturers. I am not going to take the time of the committee by discussing constitutional questions that may be involved in this legislation. Our industry is entirely willing to leave it to the judicial branch of the Government. Neither am I going to discuss the clause in the bill providing for the setting up of a commission. I think it is important from our standpoint to deal with the indictment of conditions as a menace to the citizens of the United States, which appears in the bill as a legislative determination of fact.

Under the definition of “Textile industry," there is specifically included in this bill before us "rugs, carpets, and other fioor coverings.

As a condition precedent to, or a reason for, the establishment of a National Textile Commission, togther with specific laws and regulations to be applied to the textile industry, there are set forth certain "findings and policies" under two sections. The second section states that the Congress of the United States, as a matter of legislative determination, finds certain facts which are set forth. These facts, in chief, are that at present wages below decent standards, excessive hours, child labor, unhealthy and demoralizing conditions of work, et cetera, prevail 'in the textile industry, constituting a menace to the welfare of the citizens of the United States. The bill then states that because of the existence of these evils it is the policy of Congress to remove them by this act.

Therefore, it is to be presumed that if the setting up of a commission, and the establishment of certain laws, are for the purpose of eliminating the evils mentioned, your committee is to base a justification of this bill, in respect to the industry I represent, on the premise that you found the conditions outlined existing as facts in the manufacturing operations and activities of the wool carpet and rug mills of the country.

It is our prime purpose, therefore, in appearing before your committee to deal with the question whether there are in this industry such conditions menacing the welfare of the citizens of the United States, and to suggest to you that in the absence of such conditions, the wool carpet and rug industry should not be included in a bill of this nature.

Accordingly, I do not want to take the time of your committee in registering objections we have to the legal provisions of the bill, or the managerial capacities within an industry which Federal agencies would undertake under the establishment of a commission. We believe we can confidently rest our case upon the question as to whether such conditions as are recited in the bill really prevail. If they do not prevail, I respectfully suggest that your committee has no legislative duty other than to strike this industry out of this bill,

As this is a labor bill, chiefly, we would like to refer you to outstanding conditions which exist in that respect, and which, we believe, in themselves must be largely taken into consideration in coming to any factual conclusion as to whether the conditions surrounding the operations of this industry are a menace to the welfare of the citizens of the United States.

The substantive provisions of the licenses are specified in sections 16 through 28 of the bill. Summarized, the provisions are as follows:

Section 16 prescribes certain minimum wage rates which, according to section 17, may be increased by the Commission; section 19 specifies maximum hours; section 21 prohibits employment of individuals under 16 years of age; section 22 restates the basis provisions of the National Labor Relations Act and provides that the unfair labor practices shall be conditions in every license; section 24 specifies certain general labor provisions; section 25 deals with work assignment and requires compulsory arbitration of changes in work assignment; section 26 authorizes the Commission to control and limit productive operations; section 27 requires employers operating on three-shift basis to pay a bonus of 5 percent to their employees; and section 28 specifies that every license shall contain certain fair-trade practices prohibiting misleading advertising, defamation of competitors, secret rebates, and inducing breach of contract. The issuance of general licenses by the Commission is provided for in section 29 of the bill and the procedure for the revocation of licenses by the Commission is outlined in section 31. A license may be revoked by the Commission after notice and hearing, with a right given to the licensee to obtain review of the action of the Commission in the Circuit Court of Appeals of the United States. The findings of the Commission as to the facts, if supported by any evidence, shall be conclusive.

Section 31 (g) provides that the commencement of proceedings shall not, unless specifically ordered by the court, operate as a stay of the Commission's order, and section 32 provides that upon refusal to issue a license or upon revocation of any license, the Commission shall notify all agencies of the Government which are thereupon required to accept such notiffication as binding until the order has been set aside by a court. Persons found guilty of an unfair labor practice within the meaning of the National Labor Relations Act may be deprived of their license.

The following are the penalties provided by the act:

Section 12 prohibits the use of the mails for transmission of matter relating to textile products manufactured, processed, or produced not under a license issued by the Commission.

Section 13 prohibits Government purchasers from making contracts with, or loans to, producers, manufacturers, or processors of textile products not licensed by the Commission, and requires all individuals receiving loans or grants from the Government to agree that the grantee will not in the use of such funds contract with a person in the textile industry not licensed by the Commission.

Section 14 prohibits the interstate commerce in all registration of securities of unlicensed textile corporations.

Section 34 provides that any product purchased or shipped in interstate commerce in violation of the act shall be subject to seizure by any public officer or by any officer of the Commission authorized by the Commission, and shall be forfeited to the United States.

Section 36 (a) provides that any violation of the act shall be deemed a misdemeanor and upon conviction an offender shall be fined not more than $100,000 for each offense or imprisoned for not more than 1 year, or both; the district courts of the United States are vested with jurisdiction to restrain violations of the act by injunction; any person wilfully resisting or interfering with any member of the Commission or any of its agencies in the performance of duties make this statement because there are very few in our industry who do not earn more than the figures suggested.

As to workers' hours, our code contained the 40-hour week limitation, with several provisions for a limited number above that figure for certain periods, to cover the elasticity necessary in the related and complicated manufacturing operations peculiar to this industry. Since code days, the industry throughout the country has maintained these limitations, and we know of no charges from any source of excessive hour capacity.

When I make that statement I refer to the records of the United States Department of Labor as to the maintenance of hours.

As to the condition of widespread unemployment asserted as a finding of fact, taking in our industry 1932 as the lowest ebb in the number of workers employed, since October of that year, when the upturn started out of the emergency depression, there has been an improvement in the number of workers employed in the amount of 80 percent.

As to overburdensome work assignments, we have as yet not noted in the hearings of this committee any evidence to that effect in our industry. We sincerely desire no such conditions and are quite certain that they do not exist.

As to excessive production prevailing in the industry, this does not exist, and the evidence for same is to compare the absorption of our goods with other products, in the ratio in which they share the available income and our portion of the consumer dollar. Moreover, any over-production problems in our industry are invariably controlled by competition; also, the results are so extremely fatal to profitable management in our industry on any extreme over-production situation in a mail, that this economic influence exercises a better safeguard on this question than any possible artificial regulation, with the inevitable handicaps that follow upon a well managed mill that is selling all of the fabrics it produces, and employing sufficient workers to produce the consumer demand upon any such mill. May I point out that in our code under the N. Ř. A., which organization, as you know, paid particular attention to this question, there was inserted no limitation on machine capacity.

On the question of self organization and collective bargaining, the record of the industry is that we have had unusually satisfactory and peaceful conditions over a period of years with our workers, even during the times of extreme depression, and that there is general acceptance of the right of workers to organize. Moreover, there is now a Federal law in connection with this matter, to which we are all subject.

As to child labor, may I say that child labor does not exist as a problem in our industry, either from an economic or social standpoint, as all our mills are located in States which have had and now bave legal requirements as to this type of work.

May I add, generally, again, as to a determination by Congress, and accordingly your committee, that, as a matter of fact, there are these stated conditions, set forth in the bill, in the wool floor covering industry as a menace to the welfare of the citizens of the United States, that we know of no incident in the long history of this industry, or since we had a code under the N. R. A., where there has been Federal or State investigation of the industry, involving possible conditions

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