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Mr. WEST. That is stated in this report here [indicating].

Mr. WOOD. Don't you attribute some of that to the fact that rayon goods have taken some of that market from you?

Mr. WEST. Oh, yes.

Mr. WOOD. Rayon goods have increased by leaps and bounds in the last few years?

Mr. WEST. Yes, sir.

Mr. Wood. And the consumption of them has increased?

Mr. WEST. Yes, sir.

Mr. WOOD. So it cannot be attirbuted to the N. R. A. or any other Government regulation, but the lack of consumption of your cotton goods can be attributed more to the increase in the use of rayon and other substitute materials?

Mr. WEST. I am sure I did not give the impressions that we attributed this decrease to any Government intervention. Rayon has affected it. There have been very many factors that have affected it. Mr. KELLER. We will now call Mr. Steele.

STATEMENT OF FRED W. STEELE, REPRESENTING THE NATIONAL ASSOCIATION OF COTTON MANUFACTURERS

Mr. KELLER. Will you please state your name and address? Mr. STEELE. My name is Fred W. Steele. I am general manager of the Grinnell Manufacturing Corporation, New Bedford, Mass. Mr. Chairman, I wish to present this statement on behalf of the National Association of Cotton Manufacturers.

The National Association of Cotton Manufacturers is a voluntary trade association in continuous operation since 1854, representing through its membership practically the entire northern and eastern spinning and weaving sections of the cotton-textile industry.

According to the United States Census of 1933, the latest issue, this section of the industry employed 102,284 wage earners, operated 10,509,404 spindles and paid $71,844,000 in wages.

The nature of the cotton-textile industry is so complicated, and the variety of its products so great, that it has been impossible in the time allowed to prepare for this hearing more than a cursory picture of the situation.

The products of these mills are extremely diversified. Many of these products have no relation to each other in the uses to which they are put, in the cost of their manufacture, or in part of the machinery that is used in their manufacture; but with few exceptions these mills could be classified as fine goods or specialty mills.

The mills manufacturing these finer goods are in general equipped with modern machinery, and the intense competition in the industry naturally results in high efficiency of operation.

The National Association of Cotton Manufacturers, in concurrence with the American Cotton Manufacturers Association and the Cotton Textile Institute, is keenly interested in any proposal that will benefit the employee, the employer, and the community in which the industry is located.

The attitude of over 90 percent of the cotton manufacturing industry, by continuing voluntary observance of the provisions of the invalidated National Industrial Recovery Act is ample evidence of their earnest desire.

We respectfully suggest that your committee take judicial notice of the recent reports of the studies and surveys conducted by various Federal bureaus and departments, as follows:

The report of Dr. Sachs of the Research and Planning Division of the National Recovery Administration.

The report of the Textile Labor Relations Board's Textile Work Assignment Board.

The report of the Federal Trade Commission on the cotton textile industry.

The textile report of the Bureau of Labor Statistics, United States Department of Labor.

The report on conditions and problems of the cotton textile industry by the Cabinet Committee appointed by the President.

The findings in these cited reports and surveys, and our own experience with governmental regulation of industry, convince us of the futility of the proposed or similar legislation.

The bill under consideration by your committee, H. R. 9072, the Ellenbogen bill, so-called, is so pregnant with fallacious provisions that instead of stabilizing conditions in the industry (the intent of the proposed legislation) it would disrupt conditions to an extent that we have not yet experienced. Hence, the National Association of Cotton Manufacturers must be recorded as definitely opposed to the proposed legislation.

Further, in view of the recent United States Supreme Court decisions in the cases of the United States v. The Schechter Poultry Corporation and the United States v. William Butler et al., receivers for the Hoosac Mills Corporation, and the many other decisions of this court relating to interstate commerce, we contend that cotton manufacturing does not enter directly into interstate commerce; consequently, we doubt the constitutionality of this proposal if enacted into law.

Mr. Chairman, as an individual manufacturer I come before you not only to enter my protest on this bill but, if permitted to do so, to point out my objections.

All of my life I have been connected with the textile industry, either as an ordinary workman, department head, or managing official.

By virtue of conditions over which I had no control I was forced to go to work at an early age, and by virtue of living in a textile community I found myself in the textile industry, where I have been ever since.

I have worked through practically every department of the plant, I have been foreman of various departments, and for the last 20 years I have been at the head of various textile corporations responsible for the manufacturing, financing, and merchandising, of their products. In my capacity as a workman I was a union member, and in my capacity as the head of a corporation, I am a member of the Manufacturers' Association.

Therefore, gentlemen, I am somewhat familiar with the problems of the employee as well as those of the employer and, gentlemen, those are plenty at the moment.

I have given this bill much study, and frankly, cannot endorse it, for various reasons, namely: While this bill goes to great extent in regulations of trade, it also is constructed to give much protection and

benefit to the employee; this in itself commendable. But it neglects to make any provision for the welfare or protection of the employer and, gentlemen, in considering this bill, keep ever before you that the welfare of both the employee and the employer are more closely related today than ever, and the success of those in the textile industry today depends as much upon one as the other, and only the realization of this point by all concerned, along with calm thinking, and earnest efforts for the good of all concerned, can bring this about.

Our whole structure can well be described by the three-legged stool. Our structure, like the stool, is constructed with three legs, one leg is capital (the money invested in the plant), one is labor, and the other is business (the consuming market) and like the proverbial threelegged stool, it will not stand with one of these legs missing.

Therefore our problems are mutual, and when a bill is proposed that does not provide for the welfare of all of those concerned, it becomes not only a detriment, but a danger, and cannot bring about that feeling of trust and satisfaction that we all hope for and that is so essential.

This bill says that a commission will be appointed, and they, in turn, will have the power to establish agencies, divisions, bureaus, and appoint without regard to the provisions of the civil-service rules, a secretary, attorneys, special experts, consultants, examiners, clerks, and other employees as it may deem necessary, and in no instance does it provide for the necessary qualifications so necessary to work of this kind.

This bill also sets forth that it is hereby declared to be the policy of the United States, and among the purposes of this act, to foster, protect, advance, and regulate the stream of commerce among the States, and with foreign countries, by the establishment of minimum wages, and maximum hours, by the regulation of child labor, work assignment, and other working conditions, by guaranteeing the right of employees to organize, and bargain collectively, by the control of excess production, and so forth, but this bill does not set forth any explanation whatever as to how they expect to foster, protect, advance, and regulate the stream of commerce coming from foreign countries, neither does it set forth any method to take care of even the great discrepancy today between the extreme low wages of foreign countries and those paid our employees here in our own country, and, gentlemen, this differential today is so great, that we now pay as much for 1 hour as some of them pay for a full day, and even today the production of goods made under the low wages in foreign countries is coming into this country at an ever-increasing rate, and today is taking from our own people that employment which should be theirs, while they are forced onto the welfare list in the community where they live.

I might say, Mr. Chairman, that the production coming in from Japan of the kinds of goods made here in this country, and many of them I hope to make in the plant of which I am the head. In 1931 there were 771,000 yards which came into this country.

Mr. KELLER. Will you please repeat that?

Mr. STEELE. In 1931 there were 770,208 yards that came into this country.

Mr. ELLENBOGEN. What is that? That is yards of what?
Mr. STEELE. That is cloth.

Mr. KELLER. It is cotton cloth?

Mr. STEELE. Yes, sir; it is cotton cloth which I myself try to sell again. In 1935 the figures given by the Government are 36,475,000. And bear in mind, gentlemen, that this bill makes no provision for taking care of that discrepancy.

Mr. KELLER. Is there not a law on that subject, Mr. Steele, to take care of just that condition?

Mr. STEELE. I don't know what law you are referring to.

Mr. KELLER. There is a law, as I remember it, giving the United States Tariff Commission the duty of setting out the facts, and it gives the President of the United States the power also, as I recall it, to raise the tariff to whatever extent may be necessary. Of course, am just speaking from recollection now.

I

Mr. STEELE. No doubt you are familiar with the fact that we have begged and pleaded in Washington for help along that line. .Mr. KELLER. I think that is being done at the present time.

Mr. STEELE. If you were selling goods under the conditions that I have to face when I go into the market you would think the gate had been let down like nobody's business.

Mr. KELLER. Look up the subject, I suggest. I would look up the subject before I made that statement.

Mr. STEELE. The statement has been made, in Washington that it is only a small percentage of our product.

Mr. KELLER. That is true. But I understand the effect of that. Mr. STEELE. If you will pardon me, I would like to state the effect of it as coming from one who knows and one who has suffered from it, and one who has seen his employees with whom he has grown up and laid off and coming to him begging for something to do. We came to Washington begging for some help from this administration but we go back emptyhanded time and time again.

I go into New York with my product, and I have my trade set up and I go to the customer who buys my goods. He asks what my price is, and I tell him. But he says, "Well, here is a cloth that I can buy for so many cents a yard less than yours. I would like to buy your goods but because Mr. So and So on the same street is buying these other goods and because I have to compete with him, I have to buy them also." Gentlemen, they can buy the finished product from Japan, made from our cotton which is shipped from this country away across the ocean. This cotton is taken from our country to the foreign land to Japan and is put through the factories, is brought back here and is offered on our finished goods market at a lower price than I can take it off of my looms today at our present wage level.

Mr. KELLER. I think what Mr. Ellenbogen has said applies for the entire committee. We not only have no objection to you pointing that out but we are in hearty agreement with you.

Mr. STEELE. The point I wish to bring out in connection with this matter, gentlemen, is that notwithstanding all of this condition caused by the foreign goods coming into our market, the bill makes no provision for taking care of it. That is one objection to the bill. Mr. KELLER. Let me suggest to you that under a bill of this kind that situation cannot be adjusted; that has to be adjusted through another means.

Mr. STEELE. If I may be pardoned for saying so, the bill says to regulate the stream of commerce coming from foreign countries.

Mr. KELLER. Yes, of course. But the specific means of doing that I think would be through another bill. Wouldn't that be your opinion?

Mr. ELLENBOGEN. It would, because this committee would have no jurisdiction over it at all.

Mr. STEELE. Mr. Ellenbogen, I was pointing out my objection to parts of this bill.

Mr. ELLENBOGEN. That would be a separate bill. It would have to be a separate bill because it goes to a different committee.

Mr. Wood. That would deal with embargoes and tariffs?

Mr. KELLER. Yes; that has to go through the Tariff Commission. But, as I said a little while ago, this committee is not only not against you but heartily approves what you say. So we will not dispute with you about that.

Mr. STEELE. I am not expecting a dispute, because I believe every fair-minded man in this administration wants to take care of the people who are working for their livelihood.

Mr. KELLER. Certainly, they do.

Mr. STEELE. But the point I wanted to make is that while the bill refers to the stream of commerce from foreign countries it makes no specific mention of what should be done to take care of this part.

Mr. ELLENBOGEN. It only makes reference to the stream of commerce to foreign countries and not from foreign countries.

Mr. STEELE. I may be wrong, Mr. Ellenbogen.

Mr. ELLENBOGEN. There is no dispute about it. It would have to go to a different committee, Mr. Steele.

Mr. STEELE. It says, "stream of foreign commerce with foreign countries."

Well, I will pass that, Mr. Chairman.

Gentlemen, this is a most important factor, and this bill makes no provision whatever for the correction or control of this situation. In the matter of wages, I have no quarrel with the man or woman seeking to improve their position, if their efforts are in keeping with conditions which confront the industry, and while this bill sets forth a minimum wage of $15 the question again arises what protection will this bill provide against that extremely low wage of foreign countries, if no provision is made. You will readily appreciate our difficulty in competing with foreign goods in our market, and our inability to do so would only work a hardship by lack of employment on those whom this bill seems to protect and help.

This bill says that before we employ one whom has grown too old to do a so-called full job, the employer must obtain a permit to do so. This in itself will take from him or her their means of self-support, because it would become necessary for this older person to obtain himself the permit spoken of, and many would not even know where to find the proper officer authorized to issue such permits.

Mr. KELLER. In that connection, Mr. Ellenbogen, what was your idea in that? I had overlooked that.

Mr. STEELE. The bill reads that before we employ a man who cannot do a full job, and possibly at a lower wage, we would have to obtain a permit.

Mr. ELLENBOGEN. Because it has been abused. You see, they have employed able-bodied people and have called them partially disabled, and in that way they avoided the minimum provisions of the bill.

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