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Mr. Smith. Yes; it is a part of their responsibility.

The CHAIRMAN. Suppose you lose control of them so that you cannot direct them. Would that have anything to do with the performance of your contracts, or retard your business in any way?

Mr. Smith. Certainly. Production would go down and your costs would go up and your contracts might be very unprofitable.

The CHAIRMAN. In other words, you believe that if they are permitted to organize into a union and affiliate with the workers' union that will retard your work and interfere with production?

Mr. Smith. I am sure of it.

The CHAIRMAN. I believe you stated to the extent of about 25 percent.

Mr. Smith. I stated that was a guess, but I could easily see it could go as high as 25 percent; maybe more.

The CHAIRMAN. As one of the committee here, I am amazed at the situation of which you have told us with respect to the turn-over of manpower in these plants; likewise, I am amazed at the possibility of your being able to produce the amount of shipping you produced last year under those circumstances. I believe you gave it as 8,000,000 tons plus.

Mr. Smith. Eight million tons plus.

The CHAIRMAN. Thank you very much, sir. Your testimony will be very helpful to us. We appreciate your coming.

The committee will stand adjourned until 12:15.

(Whereupon, at 11:30 the committee adjourned, to reconvene again at 12:15.)

AFTERNOON SESSION

(The committee met, pursuant to adjournment, at 12:15 p. m.)

The CHAIRMAN. The committee will now come to order. We will now hear from Mr. Richard T. Frankensteen, vice president of the United Auto Workers, C. I. O.

STATEMENT OF RICHARD T. FRANKENSTEEN, UNITED - AUTO

WORKERS, CONGRESS OF INDUSTRIAL ORGANIZATIONS

Mr. FRANKENSTEEN. Perhaps I should qualify myself by saying that I am not speaking for the War Labor Board.

I would like to say, first of all, that I am speaking on behalf of 979,267 dues-paying members of the United Automobile, Aircraft, and Agricultural Implement Workers of America, C. I. O.

Thank you for giving me the opportunity to appear before you, gentlemen.

I am appearing on behalf of close to a million members of the United Automobile, Aircraft, and Agricultural Implement Workers of America, C. I. O., engaged in producing arms and munitions for the armed forces in factories throughout the United States.

I appear also on behalf of more than 150,000 members of the U. A. W., C. I. O., now serving in the armed forces. I appeal not solely nor primarily as a leader of a group with special interests or with interests that are apart from the interests of the Nation as a whole. I want to take this occasion, before giving my views on H. R. 2239, to voice an emphatic protest against the attempts being made in Congress and elsewhere to drive a wedge between organized

labor and the rest of the Nation, particularly between organized labor and the armed forces. We in organized labor always voice the interests of the people as a whole, and especially during the present period of the Nation's history. This is clear to anyone who cares to make an honest appraisal of our consistent efforts and programs for the winning of the war in the quickest possible time. It is that aim, namely, the winning of the war with the least possible delay which determines our viewpoint on all legislation including the so-called Smith bill, H. R. 2239.

We are in full accord with the expressed aims of the bill to amend the selective service law for "the successful prosecution of the war by prohibiting acts interfering with the full utilization of the Nation's manpower during the present war.' But that is not what the bill would accomplish. Although the bill purports to aid the war effort, it actually contains a many-sided attack on labor, including Congressman Smith's favorite targets, the National Labor Relations Act and the Fair Labor Standards Act, better known as the Wagner Act and the wage-and-hour law, respectively.

It could nullify the minimum wage provision of the wage-andhour law through section 3, part 2, which prohibits any union contract which "proscribes," or has the effect of proscribing the period or manner of training or apprenticeship as a condition of eligibility of employment.”

Through this provision of the bill it could be used to deprive workers in all branches of industry of the maximum wage rates under the wage-and-hour law by having employers make wide use of the "learner" provision of the law. These efforts have already been made by many sweatshop employers who regard the 25-cent and 30-cent minimum wages as too high. This provision is a danger also to the workers earning more than the minima under the wage and hour law. It would permit employers in the relatively high-wage automotive industry, for example, to fix rates below union contract rates for any worker whom they choose to designate as an apprentice or trainee. Under this bill the union would have no choice but to accept the most arbitrary interpretation of the employer.

The threat to the Wagner Act is contained in section 4, which states: “No executive, administrative, professional, or supervisory employee" shall be eligible for membership in any labor organization engaging in collective bargaining. These categories of workers might exclude a substantial number of people now members of the U. A. W. C. I. O. By administrative, for example, we normally mean such workers as clerks, stenographers, and other white-collar workers as well as plant protection men, thousands of whom are already in our ranks, and need the protection our union offers.

I should like to say that I do not want to address myself too lengthily on the question of foremen. I do not think that is the meat of this bill. I do not think that is the heart of this bill. I think that merely serves as the medium through which many other points more dangerous than that point are woven in.

First of all, my organization has refrained from accepting foremen into our organization. We at no time have attempted to bargain for the foremen, although we do believe that they are entitled to an association of their own choosing. But we, as I say, have refrained from accepting them in general membership in our union. In no

instance among the pretty nearly 1,000,000 members have we taken foremen in as part of our union.

It seems to me than an analogy which might be made would be this: If the employers themselves have an association it would be just as incongruous to prohibit them from having that association, which is in effect a union, as it would be to prohibit the foremen from having an association of their own. Even the manufacturers, although it is an extreme, might, if they so desired, affiliate with either the American Federation of Labor, c. I. O., or an independent. It is absurd, but it still fits the analogy of the foremen's union. They have the right to associate to protect their mutual interests just as the manufacturers do.

The term supervisory worker is not defined in the law and is commonly believed to be directed against the inclusion of foremen in unions. However, since there is no definition of the word "supervisory," it could be interpreted to include working foremen, subforemen, and straw bosses, and any worker who by any stretch of the employer's imagination may be said to have supervisory duties. This might, for instance, include a set-up man in an automotive plant; it might be used to eliminate from a contract one of two men on a cross-cut saw, in the logging industry, just as some employers now in unorganized areas now use the term "independent contractor" as a device to deprive workers of the benefits of labor legislation.

Since I understand representatives of the foremen's union are here to testify, I will not take more of the committee's time on this point, except to urge Congress to refrain from this back-door attack on labor. We oppose any abridgment of the Wagner Act, which guarantees all employees the right to join an organization of their own choosing.

Section 3 makes it illegal for union contracts to contain certain provisions on (1) number of employees on a given job, (2) payment to apprentices, (3) increases in piece-rate eanings, (4) tools or equipment used on a job. Finally the bill prescribes any provision which "In any other manner interfers with the full utilization of the Nation's manpower in the present war."

Yesterday I was asked to speak before a subcommittee of the War Production Board whose purpose it was to work out a plan and proposals that might include incentives to production. I think this committee is fully aware of the manpower situation throughout the country, and I know that they are fully aware of the urgnt need for more airplanes and more ships. The manpower problem has become very acute and labor is most interested in doing everything within its power to increase productivity. This meeting yesterday consisted of the representatives of the manufacturers' associations of the country, the chambers of commerce, the American Federation of Labor, and the C. I. O. There were four representatives, one from each organization. We met with Mr. C. E. Wilson, War Production Board, who outlined to us his hopes on the increased productivity in these fields, and with that he hoped that we might be able to arrive at some conclusions, that we could present in the way of an incentive plan, and an incentive plan that would enable workers to increase their output, and in increasing that output, solve the two very important problems: First, the basic problem of manpower; secondly, increased earnings for the workers throughout the country through greater output.

This was discussed with Mr. Davis, Chairman of the War Labor Board, and he found nothing inflationary about it, because if the productivity is increased for a lesser number of man-hours, that does not create the spiral that we are all afraid of. Mr. Wilson made the comment that he had so discussed that with Mr. Davis of the War Labor Board, and Mr. Davis had assured him that nothing in this would be considered inflationary.

Mr. Byrnes similarly has made that statement in my presence, that on the farm problem he was hopeful that the farmers would increase their productivity and in that way make a greater return; and yet, in so doing, not create inflation by having a higher price put on the agricultural products they produce, but through greater production and get more money.

Mr. HARNESS. That is the argument that they have been putting up for 7 or 8 months. Mr. FRANKENSTEEN. I do not think it is.

Mr. HARNESS. You are repeating what they tell you. I say that that is contrary to what they have been telling us now for 6 or 8 months.

Mr. FRANKENSTEEN. On increased productivity.

Mr. HARNESS. By incentive payments, it seems to me there will be more money in the pockets of the individuals, whether it is the laborers, farmers, or anyone else, and that is one thing they say they do not want to see.

Mr. ARENDS. That is exactly the situation, because they go out and put an artificial ceiling on the price of corn so that the farmer cannot get a parity price, and now they turn around and say, “We will give you so many hundreds of dollars.

Mr. HARNESS. And he has so much money in his pocket that creates a buying power for him, the farm laborer, or anyone else.

Mr. FRANKENSTEEN. I do not care to argue from the point of view of Mr. Byrnes, or Mr. Davis. I am on record as quoting both of them as so stating, and Mr. Wilson stated it to me yesterday.

Mr. HARNESS. I was not directing my remark to you. I am telling you what we have been hearing all along.

Mr. FRANKENSTEEN. I think that this commitee, or any committee interested in war production, ought to weigh the necessity of ir.creasing production and the necessity of conserving manpower, and there is an old adage that you can lead a horse to water but you cannot make him drink. I think it is a good adage applied in this case. I think workers, if they are going to increase production, if they are going to turn out through their extra efforts beyond the normal production, they are going to seek and expect, and logically so, a fair return for that increased value, and I should like to point out, although I do not want to argue the question with you, that money has value even if it must be saved, and labor has as much right to a saving in this period as any other group in the country, and it is not necessarily inflationary for workers to have money to save to take care of their post-war plans, any more than it is for industry to make a return and save it for their post-war plans.

Mr. JOHNSON. That same argument applies to farmers, getting more money for their products.

Mr. FRANKENSTEEN. Absolutely it applies to products.

Mr. Durham. They did not argue that on the Ruml plan. They did not have the money to pay their taxes.

Mr. FRANKENSTEEN. I am not a Member of Congress.
The CHAIRMAN. Let us not get started on the Ruml plan now.

Mr. FRANKENSTEEN. I should like to point out that this bill, in one section particularly, would invalidate all the contentions I made here.

The Chairman. Did you say "validate" or "invalidate"?
Mr. FRANKENSTEEN. Invalidate.

First of all, in section 3 on page 3 of H. R. 2239, lines 12, 13, 14, 15, and 16, it prescribes, or has the effect of prescribing, in cases where there is a reduction in the amount of, or in the time required to perform, any particular work, that compensation be paid as if the reduction had not taken place. That means that piece rates, and piece work, would simply not be pushed up. It means that production would be slowed, and the very acute problem which we heard this morning on manpower, I would like to say this in connection with that, that is only a partial picture that you heard as to the manpower problem. I happen to be the national director of aviation. I heard the gentleman, Mr. Smith, make the statement that there was an 80 percent turn-over in the shipyards. I would like to point out to you that on the west coast in the North American plant there was a 120 percent turn-over for 1 month and over a 100 percent turn-over for the year. I believe that that 100 percent figure would be a very low mean for the entire west coast airplane industry as against the 80 percent given for the shipyards.

The CHAIRMAN. Since you are not speaking from your prepared statement--I do not want to interrupt you-but do you think that there is any provision in either the Smith bill or in the Wadsworth bill that will remedy that situation and prevent that turn-over in manpower?

Mr. FRANKENSTEEN. No. I think it is a question of the PepperKilgore-Tolan bill. I think if that bill were passed which carries with it all the tie-in with the various agencies, that would solve the problem and do the trick needed.

Mr. Smith this morning mentioned that there were 36,000, I believe, taken into the Army, the armed services. I intended, during the course of my discussion here, to point out some of the reasons for the turn-over that Mr. Smith, I do not think, gave this morning. Mr. Durham. Do you believe that incentive payments will

prevent this turn-over?

Mr. FRANKENSTEEN. I think that to a great extent it may. I am going to get out of my field again. I am going to talk about the wage structure in the airplane industry where it does not tie in, for instance, with the shipyards, where it is much lower and where the War Labor Board's decisions did nothing to correct that inequity, and where men have naturally tended to leave an area, which is a danger area, to leave an area where the wages are inferior to those that they could get in some other area.

I think that any plan, though I am not advocating at this time an incentive plan, I think any plan that will provide a more adequate return to these people in comparison with what they can get in other industries—I think an over-all planning agency could do that job. But I believe any plan that puts more money in their pockets will

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