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the clause of the Constitution which relates to the mails, it is to be distinguished from all other clauses, because not only does the Constitution give the Congress the power to regulate the mails, but the Government of the United States owns the mails. It was a proprietary interest. Now, as the owner of that business, the Government has the power to regulate it. And there has never been a case before any of the courts in which that power has been interfered with, because it is not only a power to regulate the business of mails, but the mails are owned by the Government. It owns the instrumentality and it owns the physical aspect of the business.
For instance, there is an Act on the statute books which has never been questioned which is a part of the antitrust laws and which provides: “No goods shall be transported and no ships shall go through the Panama Canal that belongs to a company which violates the antitrust laws."
That statute is valid because the Panama Canal is owned by the Government of the United States. And, being the owner of the Canal, the Government has the absolute power to say which ships may enter that Canal and which ships may not.
That is important, because we say that the Government has the absolute power to say which goods shall enter the mails and which shall stay out. And there is not any decision anywhere to the contrary, except a recent decision by a judge in Baltimore in a utility case, a lower court case, which is up in the Supreme Court now.
We say that the Government can say, “Mr. Manufacturer, you can regulate your business as you please, but if you do not live up to certain standards we will not aid you in disposing of merchandise which has been manufactured under conditions which destroy the purchasing power of the people of the United States, which imposes a heavy expense on the Government of the United States in the nature of relief, which decreases our revenue from taxation, and so on. In other words we will not put at your disposal the facilities of the Postal Service for the purpose of disposing of merchandise which the Congress says you have manufactured under unfair conditions." As to some sections of the bill the clause that we rely upon is the clause to regulate the mails. I feel we stand on very safe and sound ground on that.
Another thing we depend upon is Government purchases. I do not believe any lawyer can come before you who will attack the constitutionality of those sections of the bill which provide that any goods which are manufactured under standarads which are inferior to the standards laid down in the bill shall not be bought by any Government agency.
Surely, we have the power to say that a Government department shall not buy any goods that are manufactured under standards inferior to the standards laid down in the bill. Those sections of the bill which deal with that must be admitted by everybody as being absolutely constitutional.
And the bill goes further than that. The bill says that no public agency which receives any money from the United States, take, for instance, the States that receive relief funds, and so on--no public agency that receives any money from the Federal Government shall buy textile goods that have been manufactured under conditions inferior to the conditions laid down in the bill.
That, I take it, will be admitted by everyone who will appear before you to be a safe and sound and constitutional ground. There is no doubt about those provisions in the bill.
The same applies to the other sections. The Government now has large investments in banks; it has made loans to railroads and to private concerns. And the bill says that no bank in which the Government owns a controlling interest, and no private concern to which the Government is making loans, or which is seeking the extension of Government loans, shall buy textile goods which are manufactured under conditions inferior to those fixed in the bill.
So, in conclusion, I say to you about the constitutional points that certain sections of the bill, in my opinion, are constitutional beyond peradventure of a doubt; that other sections of the bill, in the opinion of competent lawyers who have examined it, are constitutional by the fair preponderance of the weight of the evidence.
I think that is all that can be said to you in favor of any bill that attempts to do anything at the present time. Until we have the decision of the Supreme Court in cases like the coal bill, nobody can make any other assertions than those that have been made; nobody can say to you that those provisions in this bill which depend upon the interstate commerce clause are unconstitutional or constitutional. Nobody can say that until the decision of the Supreme Court on the coal act and the Wagner Act is handed down. But they can say to you that the preponderance of opinion is in favor of their constitutionality and that other sections of the bill which do not depend upon the interstate commerce clause are absolutely constitutional.
If I might go on for just a few minutes I would like to point out the sections.
Section 3 contains the definitions. I think we can pass that by.
On page 8, section 4 establishes the National Textile Commission, to consist of seven members, to be appointed by the President with the advice and consent of the Senate, and lays down its powers, and so on.
Section 5 lays down the powers of the Commission and directs the Commission to establish divisions for certain branches of the textile industry, such as cotton, wool, silk, hosiery, and for such other branches of the textile industry as it may deem necessary or appropriate. But these four divisions, cotton, silk, wool, and hosiery, must be established by the Commission because they are major branches of the textile industry. And the Commission may add other divisions as it appears to be advisable.
Section 6 deals with the location of the Commission, the principal office to be in Washington, with power to have offices somewhere else.
Section 7 gives the Commission power to lay down rules and regulations not inconsistent with the act.
Section 8 defines certain powers of the Commission.
Section 9 comes to the meat of the bill. That is on page 12. That section says that
No textile product shall be eligible for purchase, sale, shipment, transportation, or delivery in interstate commerce which has been manufactured, processed, or produced by any person pot licensed for such purposes by the Commission and which does not bear a label or stamp; and it is hereby declared urlawful for any person to buy, sell, ship, transport, deliver, receive, or process any such product in the course of interstate commerce, or otherwise to engage in or carry on interstate commerce in such products.
(b) For the purpose of this Act, a person shall be deemed to be engaged in interstate commerce, if such person holds control through stock ownership, a voting trust or trusts, a holding company or companies, or any other direct or indirect means, of or over another person engaged in interstate commerce.
We have chosen the license provision as the one most likely to provide an easy administration of the act. The Congress has the power to provide for the licensing of interstate commerce. The only purpose of the license is to provide a practical way of regulation. You can regulate it without a license. For instance, the coal bill does not provide for a license. But we thought the best administrative way of regulating interstate commerce in certain cases was by the issuance of a license. And we provide that the Commission shall issue a label and that everyone who conforms to the act and obtains a license by agreeing to conform to it, shall receive that label. And that label shall be pasted or stamped on the goods. So when you enter a store and buy textile products you can tell whether or not those textile products have been manufactured under fair conditions. Then the buyer can follow his own opinion as to whether he desires to purchase such textile goods or whether he is willing to purchase textile goods which are manufactured in the State but under conditions which are inferior to those provided in the bill. In other words, the label or stamp is for the same purpose as the "Blue Eagle” and stamp, showing that the goods have been manufactured under conditions fair to the employers and fair to the employees.
Section 10 says that where the production in interstate and intrastate commerce is so intermingled that it cannot be separated, both may be regulated.
Section 12 deals with the power to keep anything out of the mails that does not live up to the standards fixed in the bill as I have outlined to the committee.
Section 13 is that no Government agency shall buy such products and no loans shall be made or extended to concerns who do not live up to the standards fixed in the bill. Section 15 deals with the license.
Section 16 lays down the labor standards. Those standards are very simple, and we feel are very modest. This is on page 19. It provides for minimum wages for unskilled labor of $15 per week for a 35-hour week.
We feel that the maximum hours permitted should be 35 hours per week and the minimum for unskilled labor should be $15 a week. And we believe that minimum should be paid in the North as well as in the South, because it is so low that nobody could be said to live at a decent standard of living unless he makes as much as $15 a week.
Then it fixes certain conditions as to learners, exemptions, and so on, company stores, and deductions from the wages, and so on. And company stores, and deductions from the wages, and so on, are all covered in section 16.
Section 17 and section 18 deal with other conditions of labor, and section 19 deals with the hours of labor.
We have been careful to provide safeguards so that the minimum wage shall not also become the maximum wage.
Section 21 prohibits child labor.
Section 22 is practically an insertion of the provisions of the Wagner labor bill into this bill.
Section 24 has other general labor conditions, including the very modest dismissal wage or separation wage, as it is called in the bill.
Section 25 is very important. It deals with what is known as the stretch-out, or technically known as work assignment.
Section 26 permits the Commission to regulate the volume of production in the textile industry. I say frankly to the committee that I personally am doubtful about section 26. I am inclined to oppose it. But the employers in the industry, practically all of them, when the bill was drafted seemed to be unanimous in their opinion that the Commission should have power to regulate production. The Commission is not given power, and in my opinion, should not have power to regulate the prices of textile goods.
On page 34 section 28 is a code of fair-trade practices, as you might call it, for the protection of the employers.
The other provisions of the bill are all administrative.
On page 47 you will find the beginning of the penalty provisions, and
you will see as you go through these sections that the fine as there stated shall not be more than $100,000 or imprisonment for more than 1 year. That $100,000 is a mistake; it should have been $10,000.
Mr. KELLER. Did you say section 47?
Mr. ELLENBOGEN. I mean page 47. That is a misprint. It is supposed to be $10,000.
I would like to have the permission from the committee to submit for the record a brief statement which I made in connection with the matter and which explains the bill.
(The statement referred to is as follows:)
REGULATION IS NECESSARY TO SAVE THE TEXTILE INDUSTRY FROM BANKRUPTCY
In 1929, at the height of prosperity for most industries, the textile industry was already well on the downward trend. Extravagantly expanded during the war-time period, the textile industry took a nose dive during the middle twenties from which it has never recovered. Indeed, as early as 1927 it was being referred to as the "sick giant.
According to the manufacturers, the textile industry was on its deathbed in 1933—when the N. R. A. machinery was set up. Under the N. R. A. the textile industry profited measurably, overproduction decreased, and the wages of textile workers increased.
PROVISIONS OF H. R. 9072—THE NATIONAL TEXTILE ACT
The National Textile Act contains fair-trade practices, strictly defined and limited provisions for production control, and minimum standards of labor. It contains no price-fixing provisions. These standards of trade and labor practices are vital and essential, if order is to be brought out of the chaos of the textile industry.
Any employer who agrees to live up to these standards is given a license by the National Textile Commission, established by the act, and is furnished with a label or stamp to identify his products.
Textile goods which are not licensed, and therefore not labeled or stamped, are not permitted to enter the flow of interstate commerce, and are subject to other discriminations which I shall set forth later on.
MINIMUM STANDARDS OF LABOR CONDITIONS
The tremendous excess capacity of the textile industry has brought about constantly recurring periods of overproduction. These in turn have caused periodic break-downs of the price structure, frequent and extensive suspensions of operation, periodic wage cuts, strikes, and frequent and long periods of unemployment.
The textile industry employs over a million people. They have been among the most exploited of any industrial group. Driven by falling prices, due to overproduction, the textile operator has tried to meet competition by obtaining lower costs of operation at the expense of labor. In many cases unscrupulous employers have lowered wages of men and women to such levels that they had to be supplemented by Federal and State relief payments. They have exploited children at miserable wages and extended the hours of work by the well-known "stretch out” system. Over a million textile workers are receiving wages so low that they cannot approach anything near a decent, an American standard of living. These million textile workers have not been able to do their part in our system of economic production. They have been unable to be the customers which our industries need to maintain mass production and continued employment in all industries.
The textile industry must be placed on a sound and economic basis for its own good and for the good of our whole economic system of mass productionwhich can only be balanced and maintained if each industry is on a sound basis and pays wages which permit its employees to play their proper part as consumers and customers. If minimum wage and labor standards are established, below which no manufacturer can go, one of the major unfair competitive practices will have been removed from the textile industry, and it would be well on its way toward stabilization.
The following minimum wage and labor standards are set up in the National Textile Act:
CHILD LABOR IS PROHIBITED
The act prohibits the employment of chieldren under 16 years and the employment of children between 16 and 18 years of age in hazardous occupations and between 7 a. m. and 7 p. m. Aside from humane considerations, the employment of child labor while there are millions of unemployed adult workers is an economic blunder and tragedy of the first magnitude.
The bill establishes minimum wages for all unskilled workers, men or women, at the rate of $15 for a 35-hour week. With the cost of living continuously rising. $15 is a modest minimum wage. Too, let us not forget that a textile worker does not get anything near complete employment. He is unemployed for as long as 3, 4, and 5 months at a time, so that his annual earnings are pitifully small. The bill also permits the National Textile Commission to fix wage differentials between the rarious classifications of skilled employees (occupational minimum wages) where proper differentials have broken down.
MAXIMUM HOURS The bill fixes a maximum working week of 35 hours, with but one exceptionfor emergency and maintenance crews. The 40-hour work week fixed by the N. R. A. failed to bring about the reemployment of substantial numbers of jobless textile workers, because the workers seldom averaged even 40 hours a week and because shorter hours were offset by an extension of the "stretch-out."
It has become clear that the basic working week should not exceed 35 hours. Where a conflict arises between an employer and his employees as to work assignments-stretch out-the Commission shall, at the request of either party, arbitrate the dispute; but the decision of the Commission is not made binding.
The act contains the provisions of the National Labor Relations Act—the Wagner-Connery Act-on collective bargaining and the right of employees to organize. There are other provisions in the bill relating to wages and labor standards, but those enumerated are the more important.
Section 28 of the National Textile Act contains such fair-trade practices as proved their value under the N. R. A.
PRODUCTION CONTROL Excess capacity and obsolete equipment are among the major causes for the depressed condition of the textile industry. Employers, practically unanimously, are insisting that production control is vital to the existence of the industry-at least until the obsolete machinery can be retired.