figure of those who have not agreed to it; and if I have misquoted Mr. Fisher, I am sure he will correct me later when he speaks to your committee. Those figures sound very impressive. In fact, they sound unbelievable after the experience of the years that preceded the N. R. A. But I think the best answer to the question that all of us may give is this. We may ask, admitting those figures to be facts, how long is this going to continue? And it was testified here yesterday by a gentleman representing a certain organization of manufacturers in 14 States of the southern part of the country-I do not remember his name or the name of the organization, but it was a man who was boasting of the fact that $7 a week, or some similar figure, was a justifiable wage to pay prior to the N. R. A.; and that although they have maintained the wage standard set by the N. R. A., he still has not changed his mind that the wage earners of his section of the country were not in a bad condition when they received these meager wages that I have mentioned. Just as soon as the possibility of Government regulation of this industry fades away, just as soon as that happens, you are going to find employers going back to those old standards. And I think this man's testimony of yesterday was the best evidence of it. Speaking of wage differentials and figures that were compiled a year ago, at least given to me a year ago when we were talking about the difference between the North and the South, the wages in July 1933 showed a differential as between the North and the South of $2.84 before the N. R. A. and not much more than $2.56 under the N. R. A. But the average wage in the North then was $10.60 and the average wage in the South was $7.76. I do not know how these compare with the figures Mr. McMahon submitted, but I assume they are taken from the same statistical information. Well, take either one, the North or the South; $10.60 in the North and $7.76 in the South. Is there anyone who can conceive this country going back again to those standards? Certainly, no one wants to do it. Certainly, our country today is in a different frame of mind in reference to progressive labor legislation and in reference to what has generally been referred to as social legislation. Our country today is old-age pension minded. It is unemployment-insurance minded. It is enjoying a new frame of mind with reference to the future of the men and women of our country who are engaged in industry especially. The only way we are going to keep this industry abreast of the times and keep the employees in this industry enjoying the possibility of this new day in America and not submit them to the distressing conditions of not the past generation but of the past decade, is by some Federal control of this industry. I don't know anything about the details of this bill other than what I have acquired through reading the bill once. There may be many details in the bill that are not practical and feasible; there may be some things that are contrary to law. I don't know that. I assume that you gentlemen on this committee will satisfy yourselves as to both features I have mentioned before you conclude your deliberations. But I wish to emphatically register the sentiment of Governor Curley and myself that we are emphatically in favor of the principle of Federal regulation of the industry, because without it we are not going to have any more success in getting the cooperation of 35 States, the number someone mentioned here yesterday as being engaged in the textile industry, by compacts and other means than we had in all the years we have been fighting for a 48-hour law. I will be very glad to answer any questions. Mr. RAMSPECK. You said that when responsibility of Government regulation fades away the manufacturers are going back to the old scales and old conditions. You might put that in this form, that when this administration fades away and when they go back to the old type of administration we had under Harding, Coolidge, and Hoover, they will go back. Lieutenant Governor HURLEY. Well, being a good Democrat, I can subscribe to those sentiments. Mr. RAMSPECK. The point I was getting at was this: It is a fact that there is a possibility of further legislation in line with the principles involved in N. R. A. which you think is holding them in line, or holding 90 percent of them in line? Lieutenant Governor HURLEY. That is what I think; yes. Mr. RAMSPECK. I agree with you. Now, I would like to ask you this question. Do you know anything about the question of the type of machinery in use in Massachusetts as compared with some of the other States, or in the East as compared with the South? In this whole problem is it true, as has been charged by some of our friends in the South, that machinery in the textile mills is obsolete and, therefore, is not in the economic position to compete? Lieutenant Governor HURLEY. I do not think that is so to any material degree. I have heard that argument advanced. And it is true that the greater part of the machinery in the older textile mills is machinery that has been acquired over a period of 25 to 40 years; but it has been subjected to replacement constantly during that period. I think a good answer to that contention is found in this fact: In Fall River we have a textile organization known as the Morgan Printing Co., composed of two divisions, the printing division and the cotton manufacturing division, which locally we refer to as the iron works because it was established on the site of an old iron foundry several generations ago. That is the plant of the M. C. D. Borden Co. M. C. D. Borden was known as the cotton king in his day. I thought I had some memoranda here that indicate the date; but it is not important. Several years ago at least one, if not two, units of that corporation lifted out of Fall River and reestablished as the Borden Mills in McKeesport, Tenn., I believe it was. Is that the name of the place, Mr. McMahon? Mr. McMAHON. Yes; it is. Lieutenant Governor HURLEY. They took the same machinery, that is, they took their machinery from Fall River and set it up down South. They did not make any changes of any material parts. So far as I know, that plant is still running down there, and it is still a profitable organization. It is known as the Borden Mills down there. The entire plant, cotton manufacturing and printing, ceased doing business in Fall River a year or more ago and it is now being liquidated. So the machinery that they say is obsolete in one section of the country has been sufficient to stand up when moved to another section whereas that which was left behind has gone by the boards. Mr. RAMSPECK. Do you know anything about the difference in freight rates on textile products going from Massachusetts, let us say, to the markets in New York and Chicago as compared with the products moving from the South into those markets? Lieutenant Governor HURLEY. Not sufficiently to discuss it, Mr. Congressman. Mr. RAMSPECK. That is one of the points they make in justifying a differential in wages. That is the reason I raise it. There is one other question I want to ask you, if you can answer it, and that is why the textile mills paid the processing tax for a year and a half before raising any question about it. Have you ever heard any explanation of that? Lieutenant Governor HURLEY. Well, I will not say what I had in mind. I assume that they did not receive the proper legal advice in the early days. Mr. RAMSPECK. Don't you suppose the fact that they had on hand a supply of cotton which was bought at 5 or 6 cents a pound had something to do with that? Lieutenant Governor HURLEY. No; I really do not think so. Lieutenant Governor HURLEY. Of course, I have no knowledge of their reasoning in respect to anything they did as individualˇmill directors. Mr. RAMSPECK. I gather from your statement, which I think is a very fair and fine statement, that the conclusion you have reached as an official of the State of Massachusetts and as one who has been familiar with this problem for a great many years, is that with the differential both in wages and hours, that the manufacturers of cotton textiles in Massachusetts cannot complete. Is that correct? Lieutenant Governor HURLEY. That is correct. Mr. RAMSPECK. And that you have no hope of that being remedied by the manufacturers themselves or by State action? Lieutenant Governor HURLEY. That is true. I do not suggest that, Mr. Congressman, in any sectional way at all. I do not ask you members representing 48 States of the Union to do something that is going to save Massachusetts alone. I think that your vision is broad enough to assume with me that in an industrial State such as Massachusetts, and in the cotton manufacturing industry in the State, the textile manufacturing industry is the greatest industry. If that is rendered in a state of collapse so that most of the States are in the shape I have already referred to, and if its citizens are not able to gain employment because no other employment has come to take the place of these tremendous institutions that have gone out, and if the taxpayers are unable to pay their taxes, the rest of the country is going to suffer just as much—well, perhaps, not just as much, but in some degree-because of the removal of the purchasing power of the people of an entire State. Mr. RAMSPECK. Isn't this the ultimate effect of that situation, that the people of Massachusetts, because they have been socially minded and have been willing to bring about better conditions for the working people, are now being penalized by competition based upon lower wages and longer hours? Lieutenant Governor HURLEY. That is true. Mr. RAMSPECK. And that the only way to remedy that condition is by putting wages and hours, or at least minimum wages and maximum hours, out of the field of competition by having a universal regulation throughout the country? it. Lieutenant Governor HURLEY. That is exactly the way I feel about Mr. RAMSPECK. That is all I have to ask. Mr. WOOD. Governor, you mentioned something about the agreement that had been reached by 90 percent of the textile manufacturers. I did not quite get that. What was the agreement? Lieutenant Governor HURLEY. I understand they have agreed to maintain. Mr. WOOD. They have agreed to maintain the standards of N. R. A.? Lieutenant Governor HURLEY. Yes, sir. Well, I do not understand that it is all of the standards. I assume it is the hours of production and hours of labor and the wage differentials. Mr. Wood. And there were 10 percent who would not agree? Lieutenant Governor HURLEY. Those were the figures that were given to me. Mr. WOOD. Do you think it is possible for those 90 percent of the textile manufacturers to hold to that agreement and hold to the hours and wage standards when the 10 percent refuse to do so? Lieutenant Governor HURLEY. I certainly do not. I recall in respect to that argument which you suggest that a year ago when we came down here and protested against the importations of cotton cloth from Japan that it was pointed out, especially by members of the Cabinet committee, that the amount of cotton cloth that came in from Japan, although the figures I have mentioned sound terribly large, was infinitesimal in comparison with the amount of cotton produced in this country. But the manufacturers said-and we agreed with the argument, and I think it is a sound argument-that the fact that the Japanese manufacturers can produce cotton at such a ridiculously low price and come over to the United States and undersell us in the New York market, for instance, is sufficient to drive down the price for which we can sell our cotton cloth. The same argument holds true on the 90 percent and 10 percent. It may be suggested that 90 percent have agreed to this; but those 10 percent who are not agreeing to the code provisions and to the maintenance of them are going to be able to undersell the 90 percent and drive down their prices and eventually drive them from their agreement and cause them to revert back to the standards previous to N. R. A. Mr. WOOD. I will bring that down to Washington. Let us say the city of Washington burns a million tons of coal a month. I suppose they burn much more than that; I don't know just what the amount is. It would be just possible for some coal dealer to transport to this city 10,000 tons of coal, which is a very infinitesimal part of a million tons, and establish three or four retail establishments here in strategic points in the city. And if coal in Washington were selling at retail for $8 a ton, if this dealer would bring in 10,000 tons of coal and establish three or four retail markets and sell that coal for $6 a ton or $5 a ton it would instantly affect the coal dealers of the whole city, because the minute the competitor that is nearest to that point of sale would see the sign go up of $5 or $6 a ton he would instantly reduce his price, and his neighbor would do likewise. So within 24 hours that man with 10,000 tons of coal could very appreciably decrease the price of coal, and he could just about destroy the coal market in Washington within 2 or 3 days. And I think that holds with industry as a whole. And it has been testified to here before our committee upon the 6-hour day in the Seventy-third Congress, first session. That was testified to by a number of leading industrialists; that is, that even 5 percent, or 2 percent, or 1 percent of the manufacturing institutions-some of them put it as low as 1 percent-of one given industry, by cutthroat competition, could destroy the remainder. To my mind that is much more reason for general legislation for regulation of these industries. I asked you a question and then I made a speech. Lieutenant Governor HURLEY. I agree with you in everything you have said. Mr. WOOD. This United Merchants, of Fall River, moved their machinery from Fall River to Bath, S. C.; that is, they moved their plant down to Bath, S. C. And I understand that as a result of bad working conditions, long hours, and so on, they have had three strikes in that time since they moved there. Do you think that this manufacturing institution would operate at a profit and withstand three strikes since they moved without having ridiculously low wages? How could they stand three strikes in a year and still make a profit without paying starvation wages? There was a tremendous loss of time. Lieutenant Governor HURLEY. The reasoning and mathematics of the question seem to bring me to that same conclusion, that they must have paid low wages, although I have no knowledge of it. Mr. KELLY. Can we get the facts? Mr. WOOD. Yes. The plant is still running. Mr. KELLY. Can't we get the facts in relation to the wages? Mr. WOOD. Yes; we can do that. That will be brought out later on. Mr. KELLER. Have you finished, Mr. Wood? Mr. WOOD. Yes; I have finished. Mr. KELLER. Governor, I would like to ask just a few questions. Of course, I appreciate very much the thoroughness with wnich you have gone into this matter today. I have learned a very great deal from your testimony before this committee; and I want to thank you for it especially because it has fitted into what I have tried to think. And I heartily agree with the ideas in this bill and the necessities for it, the necessity of nationalizing industry and accepting it as a national matter. However, there is another question that runs in my mind, and that is this: Assuming we probably have 10,000,000 idle men, outside of those under W. P. A., will we not be compelled to go much deeper into this whole subject than we are talking about before this committee before we can assure every man of an opportunity for a job? Lieutenant Governor HURLEY. I assume you will have to do that. Mr. KELLER. I may be totally wrong; I may be thinking along the wrong lines, but it has occurred to me over very many years that industry is entirely national, that we must accept it as a national matter and treat it from a national viewpoint if we are ever going to |