Chairman BARDEN. You know that is so, and America knows it is so. If you do not believe it just go over to the House restaurant and buy one of those eighths of a watermelon for 40 cents. Then you will know what has happened.

Mr. ELLIOTT. It is 50 cents.

Chairman BARDEN. In my boyhood days it was not even a sin to steal watermelons. They did not have enough value. If you go down in my district 2 or 3 weeks from now you can load a freight train full of them for 25 cents or 30 cents each. Here you will still pay $1 and $1.50 for them. Is that not true?

Mr. TODD. That is about true.

Chairman BARDEN. As those charges are added to the great agricultural producing people, they cut off from his check. Yet all America is absolutely dependent upon them for their food and most of their fiber.

Mr. TODD. Yes, sir.

Chairman BARDEN. As Mr. Elliott said so wisely a while ago, somehow or someway we must find the answer. I do not know how to do it. But I agree with the gentleman, another swat on the head is not going to help.

Mr. TODD. That is particularly true of cotton at this time, because of the extremely stiff competition of synthetic fibers and also of foreign grown cottons. It seems every time we cut back our cotton acreage, the foreign countries simply expand theirs to take up the slack. We teach them how to do it, incidentally.

Chairman BARDEN. Not only teach them how to do it, but we finance them.

Mr. TODD. That is right.

Chairman BARDEN. We are going to pour into countries all over the world and I am not going to vote for it-all of the billions that are in the hopper right now to further depress this. I had just as soon keep producing. I was trying to get the figures on the amount of cotton goods coming in here from Japan. That is just one of them. But we have representatives from this Government all over the world teaching them how to grow cotton now. Some of them can grow a type of staple that is pretty much in demand, too.

Mr. TODD. A great many of them.

Chairman BARDEN. Thank you, Mr. Todd.

Mr. TODD. I wanted to say on that point, on those law suits, with one exception the employer has prevailed. That is the Secretary of Labor or the suing employees have lost. But that is a Pyrrhic victory because it left us in a confused situation. The courts, under the direction of the United States Supreme Court, when the hold for the employer and they hold this definition to be invalid and void, retain jurisdiction over this case pending the issuance by the Administrator of a new and valid definition. The Supreme Court said that it took him 212 years to come out with a new definition, and look what he came out with. These gentlemen who preceded me have told you what it is.

Now, the warehousemen who are successful in defending a suit for injunction or back pay or whatever it is, they are in the position of having to guess what the Administrator is going to put out which will receive the sanction of the courts in the future.

Chairman BARDEN. The farmers' lawyers are in about the same situation as the farmers. They cannot win.

Mr. TODD. His crystal ball is not any better than the farmer. It does not look like he can win.

Mr. ELLIOTT. Now, Mr. Todd, let me say this right at this point: The facts you have given us about this area of production have been very important facts. They carry a lot of meaning, and I am very much interested in what you say. But under the rule that we are operating under here, as I understand, our resolution restricts us so that we do not have the power here now to amend that and straighten up the "area of production" difficulties that you have been mentioning. I do not think that we can do it in the bill now before us.

Mr. TODD. I have been told that, but I was hoping that some change might be made in that condition.

Mr. Elliott, certainly if it is not done, and the impact of an increased minimum, whether 85 cents or 90 cents or $1, it is going to be tremendously harder. It will be more severe.

Mr. ELLIOTT. I do think before very long we will have a committee or a subcommittee set up to look into coverages generally, at which time I am sure that your folks will want to be represented in a general rewriting of the coverage provisions of the law. At least I hope that we will have something along that line before too long.

Mr. TODD. Of course, that would not help us much if you raise the minimum wage on us in the meantime. For the interim period it would not help.

Mr. METCALF. It would depend upon when the minimum wage went into effect, would it not?

Mr. TODD. That is correct.

Mr. METCALF. If the Senate bill is in effect the first of next year, and if there were some action immediately after, or if there were hearings during the forthcoming recess and action immediately after the second session came into being, it would have very little impact on you in a month or 6 weeks that you would be under the other minimum; is that right? That is especially in the winter period.

Mr. TODD. We would certainly be delighted to see the relief whenever it comes, and the quicker the better.

Mr. Chairman, I would like to express my appreciation of your courtesy and the privilege of being here.

Chairman BARDEN. Thank you, sir. I am sorry our hearings are so extended. I started out in the beginning thinking the only way to handle this matter was with full and fair hearings. I think the committee has provided that. Most of the time we have had pretty good attendance on the part of the committee, but occasionally circumstances prevented their attending.

However, the committee will do its best to ferret out the answer. Mr. ELLIOTT. Where are you from, Mr. Todd?

Mr. TODD. I live in Memphis.

Mr. ELLIOTT. The very able secretary of agriculture and industry of Alabama is named Todd, A. W. Todd.

Mr. TODD. He is no relation that I know of.

Chairman BARDEN. The next witness is Dr. King.

Do you prefer to read your statement or discuss it? You may handle that in any way you like, Doctor.

STATEMENT OF DR. WILLFORD I. KING, ECONOMIST OF THE COMMITTEE FOR CONSTITUTIONAL GOVERNMENT, INC., NEW YORK, N. Y.

Dr. KING. Thank you, Mr. Chairman. I think it would be better to read my statement.

My name is Willford I. King, and I am economist for the Committee for Constitutional Government, with headquarters in New York City.

At present, the average wage of United States factory workers, as someone else has remarked, is $1.86 per hour. But at the same time, cases are not lacking in which employees in other lines of work are paid only 50 cents per hour, or even less.

Is not this clearly a case calling for governmental intervention to protect helpless workers from exploitation by grasping, ruthless employers? President Eisenhower takes the position that remedial action is necessary, and hence asks Congress to make 90 cents per hour the legal wage minimum. Walter Reuther says that such a figure is absurd; the minimum should be at least $1.25.

Those appearing in opposition to this proposal will presumably mostly consist of employers now paying to a considerable number of employees hourly rates falling below

Those appearing in opposition to this proposal will presumably mostly consist of employers now paying to a considerable number of employees hourly rates falling below 90 cents. To the members of this committee it may, therefore, well appear that this legislation deals primarily with a conflict between the interests of employers and the interest of employees, the latter being benefited and the former being injured if the wage minimum is raised.

Please be assured that neither I nor the Committee for Constitutional Government of which I am economist have any pecuniary interest in this legislation.

I am not representing either directly or indirectly any employers who do have such an interest. The reason why I have presumed to take up the valuable time of your committee is that I feel that those members of the working class who are for one reason or another not able to break into the high wage market are, as good American citizens, entitled to have their case presented to you. Undoubtedly every member of this committee has at heart the interest of these subaverage workers.

It is an indisputable fact, that in the United States, large numbers of persons receive rates of pay too low to enable them to live in the style that seems to most of us to be appropriate for Americans. Some of these workers actually are unable to earn enough to maintain the health of themselves and their dependents. All that advocates of minimum-wage legislation ask is that Congress require employers to pay these unfortunates a decent living wage. Can anyone take issue with such an obviously reasonable demand? Clearly these poor people need additional income. Congress is admittedly the most powerful legislative body on earth. Is there any logical reason for its not acting at once to remedy this untoward situation?

Any defensible answer to this question must take into consideration the fact that scientific principles govern the behavior of both nature

and human beings. But, from time immemorial, the assumption has been made by those in control that these fundamentals can be overridden by decrees or legislation. Thus, legend says that King Canute, impressed by his power, ordered the incoming tide to recede, but it still came on. He could not repeal the law of gravitation!

The truth is, of course, that governments can, in no way, repeal scientific laws. True, legislators frequently assume that they have such power. Thus the story goes that the legislature of one of our States, seriously considered a bill requiring that, thereafter, in that State, the ratio of the circumference of a circle to its diameter should not be 3.14598 plus, but should be exactly 31. But the laws of mathematics were not disturbed by this proposal.

And, regardless of public opinion to the contrary, governments find it no easier to repeal the laws of economics than to abrogate the laws of mathematics. However, during the last 5,000 years, numerous rulers and legislators have suffered from the delusion that they were endowed with the ability to annul or override the laws of supply and demand especially the one stating that, in general, raising the price of an article lessens the amount of its sales, and increases the quantity of it which will be produced; while lowering the price has the opposite result.

Even in our own enlightened Nation today, we have observed our Government arbitrarily boosting the prices of some farm products. Everyone remembers how such action resulted in the production of such a flood of potatoes that their destruction by Government agents became a widely publicized scandal. And, at present the Government has on hand vast stores of farm products.

During World War II, our Government held down the prices of many articles, and, as a result, the Nation was plagued with shortages, and shortages, and more shortages. The only way you can get the right price of any article is by free competition. There is no other way of getting the right price. If you are to employ all of the statisticians in the United States and try to fix the right prices of any of the articles, they would not be able to do it because the subject is too complex. You would have to know all of the feelings and attitudes of different people and assuming they got the right ones, it would go wrong again.

You take our Public Utility Commissions, who for a long time have been trying to fix the right prices of public-utility services. What have they done? What have they had to rely on? All that they tried to do is that they go to competitive prices and say they will make the public utilities sell their services at the same prices that would prevail if there were free competition. Competitive prices are the only right prices that make supply equal to demand.

The private monopolists have always found the laws of supply and demand to be among their chief bugbears. Time and again, they have tried to increase their profits by raising the prices of their products. and, they have found that higher prices have made their sales volume shrink. Bucking the law of supply and demand is just as successful as defying the law of gravitation! And the laws of supply and demand apply just as rigorously to the price of labor as to the price of anything else. Raising wage rates always reduces the volume of labor which can be sold.

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It is not unlikely that your personal observations will help to demonstrate why such reduction occurs. If a man has been paying a boy 60 cents per hour to mow his lawn and now must pay him half as much again, he may decide to mow the lawn himself. And the same principle will apply in the case of the girl baby-sitter hired to stay with the children when the man and wife are invited out.

How a minimum wage law works out in practice is well illustrated by what happened in a Kentucky clothing factory when NRA fixed a minimum wage of 40 cents per hour. Many of the workers in this clothing factory were elderly women who were not capable of speedy action. They had been paid by the piece, and, in many cases, their earnings were less than 40 cents per hour.

Competition in the clothing industry was so keen that the factory owner could not raise piece rates and still stay in business. He therefore was compelled to discharge many of these women. Some of them had worked for him for years. They begged him with tears in their eyes to keep them, as they were in dire need of the income. They told him that they had no complaints about the pay or the working conditions which they had enjoyed.

He was obliged to respond that he could not stay in business if he paid them the 40 cents per hour required by law, and that, if he paid them less, he would be sent to jail. The women, not being able to find other employment, went on the relief rolls, suffered great mortification by so doing, and were transformed from self-supporting, self-respecting citizens into paupers depending for their livings upon largess furnished by the taxpayers.

In this instance, the NRA minimum wage provision inconvenienced the employer, burdened the taxpayers, increased the prices which customers must pay for clothing, and brought unemployment, hardship, and humiliation to the very class of people that the law was designed to help.

What happened in this Kentucky clothing factory was duplicated in thousands of other instances. Before the advent of the NRA, the index of employment pertaining to factories producing nondurable goods had jumped from 71.5 in July 1932, to 100.7 in September 1923. During the NRA regime, it never again attained a level as high as this September figure. Only after the NRA was overthrown by the Supreme Court did the just-mentioned employment index again resume its upward climb.

I contend that it is distinctly antisocial to prevent the less efficient members of the working class from earning an honest living; or from at least earning as much of their living as they are able to pay for. Those who can pay their way ought not to be pauperized. From those who are too inefficient to make both ends meet, it is legitimate to make up the deficit out of relief funds, but there is no good excuse for not requiring every adult to go as far as he can in the direction of providing for himself.

Proponents of increasing minimum wage rates will, of course, contend that, when the minimum is raised to 90 cents or $1.25 per hour. all competing employers will be similarly affected, piece rates will rise. and the employers will lose nothing, while the condition of the workers will be greatly improved.