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of hours and adding to the machine load were not correct. Then in the same breath you give us this exhibit A, which indicates that in 1933, prior to the enactment of N. R. A., the average wage, as revealed by your own figures, was 35 cents, 35 cents, 34 cents, 34 cents, and as low as 32 cents. The highest in the first 7 months of 1933, was 36 cents an hour, and the lowest was 32 cents.

Then from the advent of the N. R. A., your exhibit shows that hourly wages immediately jumped to 40 cents, 48.2 cents, 50.8 cents, 47.6 cents, 48.7 cents, and so on, as high as 51.1 cents, and 50.6 cents. Then since the voiding of the N. R. A., it dropped from 49 cents to 47 and 46 cents an hour, 46.9 cents. It was 49.5 cents in the latter part of May, then it dropped to 48 immediately in June, then to 48.3, 46.9, 48.3, 47.9, and 47.7 in November. That indicates to me that your hourly-wage rate dropped after the N. R. A. was declared void.

Mr. BESSE. The facts do not bear that out, Mr. Wood. The index of the Bureau of Labor Statistics shows a variation of up to 1.5 cents without any wage increase or decrease due to the difference in sample, the difference in the type of activity, as to where it takes place, and the difference in the total of employment.

In our own industry, as borne out by these figures, there was always a slight and ascertainable increase in the average hourly wages when employment goes down. The reason for that is obviously the fact that you keep your higher grade and more highly skilled employees. When business is not sufficiently active to provide employment for the big number of individuals you naturally let go your poorer workmen first, so that your average hourly wages will go up at any such time, and conversely, whenever you take on new employees and increase your employment your average hourly wage goes down for the same reason.

Mr. WOOD. You gave these to us as accurate figures.
Mr. BESSE. Exactly.

Mr. Wood. In the next breath you admit it is not a clear picture, that there are some deviations when you talk about the rise and the lowering of the hourly wage.

Mr. BESSE. I am giving you the figures, which are accurate figures. I cannot give you anything else, Mr. Wood. I am trying to explain to you why there are variations and why you should not jump to a conclusion and take from the figures conclusions which you are not justified in taking.

Mr. WOOD. In any instance, then, variations would be possible anywhere along the line here from 1929 to 1935. How do we know about the variations you are talking about? You give us this exhibit here as actually what is happening in the industry. Then you say that is not exactly clear, and you explain that probably this dropping off here of the wage after N. R. A. was voided, was brought about, by the taking on of new employees and discharge of old ones.

Mr. BESSE. I am giving you the figures, Mr. Wood. Most of them are from the Bureau of Labor Statistics. I am doing my best to interpret them to you. If you don't think my interpretation is valid or should receive weight, it is your privilege to disregard it.

Mr. WOOD. A very fine lady testified this morning who represented the Child Labor Division of the Department of Labor, and she gave us some statistics which revealed that in the 7 months following the voiding of the National Industrial Recovery Act that there were

11,000 certificates issued to employers, representing 11,000 children between the ages of 14 and 16. They had received 11,000 certificates for children; that is, for the employment of those children. In the whole year 1934—that is, in the full 12 months-there were only 7,000 certificates issued. It reveals that since N. R. A. the employment of children between the ages of 14 and 16 has increased nearly 300 percent. A little while ago you told the committee the childlabor phase of it was erroneous.

Mr. BESSE. I am sure sorry Mrs. Best is not here, because she told me that to the best of her knowledge there were no minors employed in the woolen branch of the textile industry.

Mr. WOOD. Don't you think this report of the Department of Labor is correct?

Mr. BESSE. The report, to my knowledge, shows nothing about the woolen textile industry. I am speaking about the branch of the industry with which I am familiar. I have yet to see an instance, since I have been there, of employees under 16 years of age.

Mr. SCHNEIDER. To what extent does your industry meet the competition of products made foreign and that are imported? Mr. BESSE. You ask about foreign products?

Mr. SCHNEIDER. Yes; I do.

Mr. BESSE. Of course, there are two ways in which we might have the competition. One is the importation of yarns or piece goods and the other is the importation of garments made of woolen products. There is a certain amount of competition in peice goods, England being the country with which we are mainly concerned. Within recent months there have been a number of fabrics shown from Japan. The amount of imports to date has been small. We are disturbed at the possibilities of Japanese competition in view of the extremely low prices that are put on those goods. There is another field of competition in the importation of made-up garments for men's wear, principally from England. That varies somewhat. There are indications that it may be larger next year than it has been heretofore. It has not been an item of great importance, and the industry has adjusted itself to it pretty well.

Mr. SCHNEIDER. About what percentage of the products that you produce are imported?

Mr. BESSE. That is, the percentage of the total goods sold in this country which are of foreign origin, you mean?

Mr. SCHNEIDER. Yes; that is what I mean.

Mr. BESSE. In the woolen textiles, you mean?
Mr. SCHNEIDER. Yes.

Mr. BESSE. It is less than 10 percent.

Mr. SCHNEIDER. What differential exists as between northern employees in your woolen mills and those in the South?

Mr. BESSE. As respecting the minimum, it is $1 per week. That is the minimum now. If we took the average wages there would be a larger differential in favor of the southern mills. But only about 5 percent of our industry is located in the South as the South is defined or as it was defined under the code.

Mr. SCHNEIDER. Is the industry growing in the South?

Mr. BESSE. Not to any extent.

Mr. SCHNEIDER. Is there any objection on the part of the northern employers to that kind of competition with the $1 per week differential?

Mr. BESSE. Not particularly. It is an item, of course. But in our industry it has not seemed of sufficient importance to get very much excited about, with such a very small percentage of the industry located in the South.

Mr. SCHNEIDER. What is the labor cost, or what is the percentage of labor cost in the product that you put on the market?

Mr. BESSE. About 25 percent. That is a rough figure. It varies in different branches of the industry.

Mr. SCHNEIDER. That includes what?

Mr. BESSE. That is the percentage that the labor cost bears to the selling price of the goods.

Mr. SCHNEIDER. I mean in making up that 25 percent labor cost, Mr. Besse, would that mean the labor cost in weaving that finished article and preparing the yarn, and all of that?

Mr. BESSE. It would be the labor cost from the time we started to process the raw wool. It would have to be figured in what we call an integrated plant, which takes the raw wool, scours it, spins it into yarn and weaves it into cloth, and so on. It would be the proportion

of the labor cost over the entire industry.

Mr. SCHNEIDER. When you say over-all you mean the wages and wool, or do you mean just wages? Is the salary computed in the overhead of your industry?

Mr. BESSE. I am afraid I do not understand you.

Mr. SCHNEIDER. How is the salary of those other than the wage earners figured in the overhead cost of your industry?

Mr. BESSE. I cannot answer that. We have no figures on it. It would vary substantially from one mill to another.

Mr. SCHNEIDER. You are sure that it is not figured in with that 25 percent labor cost?

Mr. BESSE. Yes, sir.

Mr. SCHNEIDER. But you don't know where it is?

Mr. BESSE. I know it is a part of the total, insofar as they have any salaries. If it were a small mill and the man paid himself a salary he might have to take that out of something else than profit.

Mr. SCHNEIDER. He would take it out of the cost of production of that article? Can you furnish this committee with a break-down of the cost of production of the finished product, divided into the parts as you usually divide it, with reference to the percentage of labor cost and executive salaries, fuel, rent, and so on and so forth?

Mr. BESSE. No, sir. You could do it with respect to a single fabric in a single mill. It would mean nothing as an over-all proposition in the industry.

Mr. SCHNEIDER. Could you furnish the committee with figures from one or two mills just to give us an idea of how this cost is made up in the production of this product?

Mr. BESSE. You want the cost, and with no relation to the selling price; the total elements of cost in the production of some particular fabric?

Mr. SCHNEIDER. Yes; broken down as you usually break it down. Mr. BESSE. I can't if you desire figures broken down to heat and light and some of those items.

Mr. SCHNEIDER. Well, however you break it down in making up those figures:

Mr. BESSE. Yes, sir.

Mr. WOOD. Mr. Chairman, may I ask what is the policy of these textile firms which Mr. Besse represents with respect to the organization of bona fide unions among its employees?

Mr. BESSE. We haven't any objection to unions as such.

Mr. WOOD. None of them? Do they all hold to a policy that the organized worker has a right to organize, for instance, the United Textile Workers? And do they bargain collectively with them?

Mr. BESSE. I would not say that we accepted the Wagner labor bill unreservedly. However we have not opposed the organization of employees in our plants.

Mr. WOOD. Even the textile workers organization?
Mr. BESSE. Any organization.

Mr. WOOD. You deal with whomever they choose?

Mr. BESSE. I would not go so far as to say that.

Mr. WOOD. Well, what is the reason that they would not want to deal with representatives of the employees' own choosing?

Mr. BESSE. Oftentimes there is a considerable difference of opinion as to whether or not the people have been chosen to so represent them.

Mr. WOOD. Well, if they have been. I am not talking about differences of opinion as to whether or not they have been chosen.

Mr. BESSE. I will answer that by saying that I know of no instance where they have refused to confer with them if they have been chosen as representatives.

Mr. WOOD. There is so much talk about the outside unions. A good many of the textile manufacturers you represent object to dealing with what they term an outside union represented by people not connected with the firm at all. What proportion of the manufacturers that you represent hold that policy?

Mr. BESSE. I call that a refusal to deal with an outside individual, not an outside union.

Mr. Wood. What do you mean by an outside individual?

Mr. BESSE. An individual who is not connected with the plant. Mr. WOOD. Suppose the employees selected them to represent them?

Mr. BESSE. I have already answered that and said I know of no such instance in the woolen textile industry.

Mr. WOOD. Then none of your group objects to dealing with the employees in collective bargaining if the representatives they choose are not connected with the enterprise? Is that true?

Mr. BESSE. No. You ask me if it is true that none of them object to it. I certainly cannot answer that in the affirmative. There may be countless reasons why they object.

Mr. Wood. It has always been very peculiar to me that while they object to dealing with representatives chosen by the employees' organization to deal with them in collective bargaining, although the representatives chosen by the employees do not work for the plant and are in no way connected with it, invariably the employers' organization, when they choose someone else to represent them, like yourself, choose an outside man who was never in the business and never had any knowledge of the business until he was employed. They reserve the right to chose whomever they please, and the employees can deal with them or not deal with them. The employees are compelled to deal with a lawyer or with someone else entirely

and ethical principle. And other statements in your brief are just as fallacious and just as false.

Now then, you say that it violates an ethical principle. On that you are competent to speak as an individual? Is it unethical to correct a mistake in a complaint or is it common sense to do so?

Mr. BESSE. I think it is unethical if the person complained of does not have the opportunity to be heard on the amended complaint. Mr. ELLENBOGEN. All he can ask is an adjournment and be given a few days to assemble the facts on the amended complaint. Mr. BESSE. Under this provision you are not obligated to give any such notice.

Mr. ELLENBOGEN. The Commission most assuredly would give

that.

Mr. BESSE. The Commission is not so obligated.

Mr. ELLENBOGEN. What you called for in your brief is a dismissal of the complaint and the beginning of a new complaint, which may take weeks and months. Do you call that ethics? Do you call it justice? Do you call it common sense?

Mr. BESSE. I call it justice and I call it ethical if the person complained of is advised of the original complaint and has prepared his defense on that basis.

Mr. ELLENBOGEN. If the amendment is immaterial you would not want to have any more time, would you?

Mr. BESSE. No, sir.

Mr. ELLENBOGEN. If the amendment is immaterial you would be satisfied with additional time, would you not?

Mr. BESSE. And proper notification, yes.

Mr. ELLENBOGEN. The notification would be given you at the time of the amendment, because you would be there. And certainly you are given that privilege under the bill.

Mr. BESSE. I understand that is not always done. I understand that has not always been done under the Wagner Labor Disputes Act. Perhaps it should have been done. Possibly I am basing my objections to this upon grounds that have not been encountered in actual experience.

Mr. WOOD. In what particular case has it not been done?

Mr. BESSE. I would be very glad to get that information for you. Mr. WOOD. I would like to have you furnish it.

Mr. ELLENBOGEN. Yes; and I wish you would do it.

Mr. BESSE. I have been so advised. I may have been misadvised. Mr. ELLENBOGEN. I know the Chairman of the Labor Relations Board. He happens to be a constituent of mine. And there is no more fair-minded man in the United States, and I do not believe he will refuse an adjournment of a hearing in case of a material change in a complaint.

If you would come before this committee and in your brief say that a provision should be inserted providing for additional time in case of a substantial change, you would come with some substance. But in this way you are coming with a general statement such as we have just seen.

Mr. BESSE. If I am wrong from a legal standpoint, I stand corrected. Mr. ELLENBOGEN. You are certainly wrong from an ethical stand

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