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happen over and over again. It has been my experience that it takes about a 15 percent to break down the price structure.

Mr. Wood. It is much less than that. One or two percent will break it down in some instances.

Mr. MUNROE. Yes; in some instances it will. But I mean as a general rule.

Mr. Wood. You can bring 5,000 tons of coal into Washington and destroy the retail coal price in Washington.

Mr. MUNROE. Of course, you can, temporarily.

Mr. WOOD. Yes, temporarily; but if this dealer keeps on bringing in 5,000 tons of coal a month and he persists in selling that coal at a certain low figure, then his next competitor, and all of them, will have to compete with him. And it spreads just like fire. His next competitor will see the price and he will endeavor to set his price according to that of the first man and will meet that price; and then the next competitor to him will meet the price. It is a vicious circle. .

Mr. MUNROE. I know that.

Mr. Wood. You say you object to these 95 percent of the good manufacturers being put into the strait jacket with the 5 percent. But what method have you in mind by which the textile manufacturers can in some way regulate these 5 percent that are bound to destroy the price structure? How are you going to regulate them? You certainly have some method to suggest, I suppose.

Mr. Munroe. Mr. Wood, is there any more reason to feel that this industry should be regulated than any other industry? That is our view. Why pick out our industry to regulate?

Mr. Wood. For the general welfare I think all of them ought to be regulated, where life is in danger.

Mr. MUNROE. This is a situation that applies to all industry. Our industry is no more at fault than any other. As a matter of fact, I don't think it is the industry mostly at fault.

Mr. Wood. The coal industry wanted to be regulated to save the industry. But it seems that the textile manufacturers have not yet reached the point where they realize something will have to be done to save the industry. The coal industry was sick; and they are tickled to death to have the Guffey bill.

Mr. MUNROE. Then wouldn't it be better to wait until the owners of the property believe they need regulation before taking over the authority over the properties, that is, taking the properties out of their own hands?

Mr. Wood. When you have problems like trying to find employment for ten or eleven million people who are permanently unemploved and are in want and are destitute, you cannot wait. In the light of past experience is there any good reason that you can advance as to why we should wait?

Mr. MUNROE. Mr. Wood, there is less reason to take our industry on unemployment than almost any other industry in the country. We are within 4 percent of our 1929 employment; and others are about 25 percent below.

I can show you here Bureau of Labor Statistics; and this came out in October 1935. It is entitled "Employment and Pay Rolls." It takes an index number. The 3-year average, 1923 to 1925 is 100 on employment. The index figure for all manufacturing industries is 85 percent; for iron and steel it is 76 percent; for machinery it is 93 percent; for transportation equipment it is 92 percent; for railroad repair shops it is 51 percent; for nonferrous metals and their products it is 92 percent; for lumber and allied products it is 57 percent; for stone, clay, and glass products it is 57 percent; for textiles and their products it is 98 percent.

Now, why should we be picked out to restore employment? We are nearer 100 percent than any other industry listed there. Why pick us out to restore employment.

Mr. Wood. You admit that your industry is slipping back since the National Industrial Recovery Act was voided.

Mr. MUNROE. No; I have not said a word about employment. I am coming to that subject of employment in my direct testimony.

Your committee and the Congress are asked by the proponents of this bill to subscribe to the view that, as a finding of fact, child labor prevails in the cotton textile industry—not that it exists, mind you, but that it prevails. At the time of the great “gold fish bowl” hearing on N. R. A. Code No. 1, the Cotton Textile Code, the latest figures available regarding the employment in this industry of minors under 16 years of age were those of the United States census of 1930, which indicated that only 24 percent of cotton textile workers were under 16 years of age in 1930. It was believed that by 1933 the pressure of unemployment had practically eliminated these young workers.

While the number was realized to be unimportant, nevertheless, the mill executives then negotiating the code saw an opportunity to end, once and for all, by voluntary means the last vestige of a practice which years ago had been a reflection upon the industry. So, by a spontaneous proposal from management--not at the behest of labor or the Government—the prohibition of child labor under 16 years of age in American cotton mills was, in the very eyes of the public, written into the Cotton Textile Code. Is it reasonable to believe, in the face of the enthusiasm and commendation which greeted that announcement, that the industry has about-faced on that subject?

Why, in a communication from Maj. A. L. Fletcher, Commissioner of Labor of the great textile State of North Carolina, where 100,000 cotton mill workers are employed, Major Fletcher stated as recently as December 5, 1935, that only 48 children under 16 years of age were then known to be employed in cotton mills in North Carolina and that those were employed for necessary social reasons. Under the N. R. A. Code regime not one single case of deliberate employment of a minor under 16 years of age came to our attention. That was 48 out of 100,000.

With your permission, Mr. Chairman, I will read into the record Major Fletcher's letter. It is dated December 5, 1935, and is addressed to Mr. William V. Lawson, executive assistant, the Cotton Textile Institute, Inc., no. 320 Broadway, New York, N. Y., and it reads as follows:

I have your letter of December 2, in regard to statement made by Mr. Courtney Dinwiddie as to child-labor conditions in the State of North Carolina. Mr. Dinwiddie probably based his assertion on the September Bulletin of the Department of Labor, which contained a brief study as to the number of employ. ment certificates issued in the 3 months following the Supreme Court's decision in regard to the codes, as compared with the same period in 1934. I am enclosing a page from this issue of the Bulletin, which is self-explanatory.

You will note that a total of 62 employment certificates were issued for all of the manufacturing establishments in the State, and that 77 percent of this number were actually for the cotton textile industry. In my opinion, the childlabor situation in North Carolina offers nothing to be alarmed about. I regret that the records show there were 48 outstanding certificates on September 1, for


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the textile industry, but this number is negligible compared to what we have had in the past.

I am sure if I were able to examine the case history of each child involved in the 48 referred to, I would find very real and pressing necessity for the employment of each child. As you know, every case is investigated by the county welfare officer, who actually issues the employment certificate. With best wishes, I am, Yours very truly,

A. L. FLETCHER, Commissioner. Now, I believe I stated in qualifying that I was compliance director for the Cotton Textile Code Authority under the NR. A. regime. During the N. R. A. Code regime not one single case of deliberate employment of a minor under 16 years of age came to our attention. And 4,000 complaints of one sort or another crossed my desk.

Now, after a recital of all the evils imputed to this industry, the bill proposes that you shall find that they cause widespread unemployment and heavy financial expense to the Government.” This at a time when some 10 million people walk the streets in search of work, not to mention the additional millions doing unnecessary work at the taxpayers' expense and the thousands of agricultural workers who own no land and are as idle as the land on which they used to work, and at a time when the Nation's cotton mills are employing 407,000 workers or only 18,000, or 4 percent, less than were employed in 1929 in spite of the decline of our domestic business and the near destruction of our export markets! If employment in all of the Nation's activities now stood within 4 percent of 1929 employment, as is the case in the cotton textile industry, the Nation would be in far better shape than is the case and there would be far less excuse for lavish expenditure by the Government of the funds which the people provide. Between March 1933 and August 1933, the cotton textile industry, largely through the adoption of its code, increased its employment 44 percent, restoring work for 137,000 workers and support for their dependents. It is hard indeed to understand why such an industry should be singled out for the reproach of "widespread unemployment” or of being a financial burden to that Government. It may be pertinent to conjecture how much of a financial burden it may become if this bill should pass and require the Government to employ a far-flung army of inspectors, investigators, and inquisitors to attempt enforcement of such a procedure of control without the consent of those controlledalso to conjecture how much in the form of taxes the industry may be able to contribute when in the face of continuing losses it may be threatened with this 50-percent rise in labor costs.

Who will then support the hundreds of small communities, mostly in the South, which are wholly or primarily dependent for their very existence upon the local cotton mills when mill after mill closes its doors in the face of the ruinous losses such excessive costs would entail?

Those who have followed the cotton textile industry's history in recent years know that it has established an honorable record for progressive social effort and achievement in the face of adversity. Early in 1930 it undertook a voluntary effort to establish a maximum limit upon hours of employment, which came to be observed voluntarily and individually by about 83 percent of the industry until about the time when N. R. A. was proposed.

Later in the same year a proposal that mills avoid the employment of women and of minors under 18 in the night hours between 7 p. m. and 6 a. m. was greeted with enthusiastic cooperative response and



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by March 1931, 80 percent of the industry had voluntarily and individually put this policy into practice. Its observance reached 88 percent of the mills in 1932.

In 1933 the proposal subscribed to by the industry that a maximum work week of 40 hours for cotton-mill workers be established was made known to President Roosevelt shortly after his memorable address of May 7 before the National Recovery Act had been introduced. The first draft of the Cotton Textile Code was submitted to the President a few hours after the National Recovery Act was passed and on July 17, 1933, it became effective as Code No. 1 under the act. On that day the industry voluntarily effected a greater improvement in its social and working conditions than had ever been undertaken in a corresponding space of time by any industry in all industrial history.

On June 1, 1934, General Johnson, Administrator for National Recovery, said: I know of no Code

that is administered more conscientiously and more effectively than this Code has been and is being administered by its Code Authority.

The improvement of labor conditions under this Code surpasses that in any other industry

Strictures on the good faith of that industry are unwarranted and unjust.

Mr. SCHNEIDER. That statement you make there now is due to the fact that the National Industrial Recovery Act was enacted and codes carrying certain conditions were required to be adopted; it is not a generous application on the part of the cotton textile manufacturers to give these conditions. They knew it was coming under the code and they put it into effect. Your testimony indicates that they are doing this in advance of any codes being adopted, although they had submitted the code.

Mr. MUNROE. Let me say, sir, the 40-hour work week was submitted to our industry by recommendation of the board of directors of the Cotton Textile Institute, voted on by the industry and approved by an overwhelming percentage. I think it was around 77 percent. That was before the President made his May 7 address announcing the N. R. A. and before we knew there was going to be an N. R. A. I want to say that this applies to some extent, sir, to the question you asked, Mr. Schneider. On July 16, 1933, President Roosevelt, when he approved the Cotton Textile Code he said in part:

In the eyes of the whole country there was a great conference among the leaders of our industry, labor, and social service, presided over by Government, which considered the most controverted questions in the whole economic problem, wages and hours of labor, and it brought that question to a definite conclusion. It dealt with facts, and facts only. There was not one word of accusation. And the most remarkable of all, it arrived at a solution which has the unanimous approval of these conferring leaders on all three sides of the question at issue. I know of nothing further that could have been done. I can think of no greater achievement of cooperation, mutual understanding and good will. It would be unfair to omit a word of commendation of this great industry. It has proved itself the leader of a new thing in economics and government. That took faith and courage and patriotism of the highest order. They have their reward in the results they have achieved and the example they have given.

Mr. Wood. We thank you for your testimony, Mr. Munroe. We are sorry we have to close now, but I think you will agree we have given you as much time as we have given to anyone else.

The hearing will now adjourn until 10 o'clock tomorrow morning.

(Thereupon, at 4:10 p. m., an adjournment was taken until Tuesday Feb. 4, 1936, at 10 a.m.).




Washington, D. C. The subcommittee met, at 10 a. m., Hon. George J. Schneider presiding.

Mr. SCHNEIDER. We will now hear from Senator Guffey, of Pennsylvania.



Senator GUFFEY. Mr. Chairman, I am appearing here to read a statement prepared by Gov. George H. Earle, of Pennsylvania, as he was unable to be here to do so. For that reason he has asked me to present his prepared statement.



Mr. Chairman and members of the committee: On behalf of the Commonwealth of Pennsylvania, I wish to endorse and support the purpose and scope of the legislation to stabilize and rehabilitate the textile industry which is now being considered by your committee.

The fact is frequently overlooked that Pennsylvania is an important textile-producing State. It is widely known that Pennsylvania is the greatest anthracite coal producing center in the Union, but it is not generally recognized that Pennsylvania today probably produces more silk textiles than any other State in the Union. Pennsylvania manufactures considerably more than half of the full-fashioned hosiery made in the United States.

Philadelphia was for many years the most important textileproducing center in the country. Despite the fact that many of the old time textile plants have left Philadelphia, have gone out of business, or are producing on a much smaller scale, there are today more persons engaged in the textile and hosiery mills in Philadelphia than in any other type of manufacture in that city.

According to the 1930 census there were some 150,000 persons gainfully employed in the textile industry of the State. It may be assumed, on the basis of unofficial estimates, that approximately the same number of persons are engaged in this industry today, although there has been a considerable migration of textile mills away from the State. Despite the fact that woolen weaving has diminished in

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