DISCUSSION OF ORDER RELATING TO MANUFACTURE OF LOW-PRICED CLOTHING

Mr. CASE. Which division, if any, was responsible for a recent order that had to do with changing the quality of grade of certain textile products, which produced quite a furor over here about 2 months ago?

Dr. ELLIOTT. Are you speaking, sir, of the M-388 order?
Mr. CASE. I do not know it by that number.

Dr. ELLIOTT. That did not change the quality of the grade, but it did put a priority on to prevent a further up-grading in prices.

Mr. CASE. It was advertised to produce some children's underwear and also work clothing, but it produced quite a protest on the part of the cotton people and the woolen people.

Dr. ELLIOTT. It certainly did.

Mr. CASE. And they said it was changing the operations of the factories and in practice was not going to succeed.

Dr. ELLIOTT. Of course we do not issue those orders.

Mr. TABER. For instance, it provided that a clothing manufacturer could get cloth to manufacture whole suits, but he could not get cloth to manufacture extra pants. Is that about it?

Dr. ELLIOTT. No; that is not quite right. There were provisions for some extra pants, but not for extra pants in all price ranges. Mr. TABER. The cheaper ones you could not get, because the cheaper-pants makers were going to be out of cloth entirely?

Dr. ELLIOTT. The cheaper ones were the ones that were protected by priorities.

Mr. TABER. That is not what I found.

Mr. CASE. Was that the entire Textile and Leather Division, or was that the Wholesale and Retail Trade Division?

Dr. ELLIOTT. That was the Textile Bureau of the War Production Board, which is the Industry Division. However, in the working out of the order we will accept our share of the responsibility, because we had to determine in that order what types of garments were most essential for the civilian population that would keep them decently clothed. We also put in special programs on children's clothing. Mr. CASE. How long has that order been in effect?

Dr. ELLIOTT. It has just gone into effect. The cotton part of it had been in effect, but was set aside since last summer under M-385. It had not had as large a percentage of set-asides, but it was that to which the industry objected..

Mr. CASE. It has not been in operation long enough to know what is going to happen.

Do you expect that that is one of the orders that will be lifted on VE-day?

Dr. ELLIOT. No. I am afraid not, because the picture for textiles gets gloomier and gloomier as the Army's requests go up. They will go up until the fourth quarter and remain high in woolens. Rayon is not a very serious factor, and perhaps that part of the order can be dealt with sooner. I hope so.

Mr. CASE. Do you contemplate keeping that order under constant study with the possibility of revision?

Dr. ELLIOTT. If at any time we can get production back up to what it was in 1942, and if we could get the military requirements even moderately reduced, and the export requirements stabilized

instead of having to increase, I think we could repeal the order, and would be very happy to do so.

Mr. CASE. Would that materially reduce the personnel that you require in any of your divisions?

Dr. ELLIOTT. I think it would considerably reduce the Textile Bureau personnel. But I say, as far as I can see it now, from the requirements with which we are confronted and the production figures, unless there is a changed attitude on the part of industry toward prices, and so forth.

Mr. WIGGLESWORTH. I suppose we have all had dozens of letters. I received one this morning which says that the confusion and impracticability of this order is creating a chaotic condition and upsetting all systems in the entire industry.

Mr. TABER. I know a man up home that makes pants. I do not believe he ever made any that sold for more than $3 or $3.50. He told me that he could not get any more cloth. Maybe you would call them high-priced pants?

Dr. ELLIOTT. NO; I would not. We are trying to keep him in the amount of cloth that he has been able to get before. The difficulty before was that the high-priced fellows were getting cloth, and it was gradually going out of the hands of the medium-priced and low-priced fellows. However, it is bound to cause grief in the industry.

Mr. CASE. How about those that were producing medium grade or above medium grade?

Dr. ELLIOTT. It protects them. It covers about 80 percent of the production; that is, the priorities did. It leaves the people with only that percentage that they traditionally had left in the market, without giving a big disproportionate share with an increase in the price of cloth and an increase in toe higo-priced clothing that people in the lower income groups could not buy.

Mr. CASE. Did you take into consideration at all that one pair of $7 pants might outwear two pairs of $3.50 pants?

Dr. ELLIOTT. We did. We put the figure at $6.50. We have had very careful advice and controls. You cannot please everybody. We have tried to do the best we could. We had the advice of Kenneth Marriner, a very sound man who does not believe in regimenting industry unless he has to. He felt that he had to protect children and working men and others.

(Informal discussion off the record.)

I would like to emphasize, in closing, that I have been down here 5 years and I am just as eager to close this shop up as anybody else, and perhaps a little bit too much so. The only thing we have to think about is to try to keep people from industry who know enough about these things to handle them decently. That is exceedingly difficult, as you know. We have pared the Budget down to a point where, if we can keep that type of persons it will carry us, but if we have to carry a lot of other people it will be difficult.

MANPOWER REQUIREMENTS

Mr. CANNON. I see that you propose to hold your present organization without any material change through 1946?

Mr. ZISKIND. Yes, sir.

Mr. CANNON. In view of the general reduction in all other items, or most other items, why would it not be possible for you to make similar reductions in your activity?

Mr. ZISKIND. The manpower situation, instead of becoming more simple, is going to be, at least for some period of time, more complex. We serve as a staff agency within W. P. B. We analyze manpower trends and attempt to interpret manpower shortages and surpluses in such a way that W. P. B. controls can be utilized to the greatest advantage. From this period on, when we are going through a transition from a one-front war to reconversion to unregulated industry, we are working under two conflicting pressures: one, to protect reremaining war industries above everything else, and, second, to try to encourage civilian industry in its redevelopment. In that period there will be many considerations added to the former considerations we have had with respect to war production. It will take all of our staff if not more.

COLLABORATION WITH WAR MANPOWER COMMISSION

Mr. CANNON. To what extent do you collaborate with or conflict with the War Manpower Commission?

Mr. ZISKIND. We are a liaison agency between W. P. B. and the War Manpower Commission. The War Manpower Commission is an operating agency in the field, administering labor markets, and it also is a research agency, gathering data concerning labor markets. We get their information and adapt it to the uses of W. P. B. We help to explain their regulations and their procedures to the operating people in W. P. B. We sit on the W. P. B. policy-making committees and, I will say, guide the decisions in W. P. B. to take advantage of the work which W. M. C. is doing out in the field.

Mr. CANNON. When and under what conditions can your work be dispensed with?

Mr. ZISKIND. I would say, just as soon as the War Manpower Commission and the War Production Board cease their controls.

Mr. CANNON. Your work would be required as long as either activity is in operation?

Mr. ZISKIND. That is right, sir.

Mr. CANNON. Are there any questions, gentlemen?

Mr. TABER. Why do we have to have your set-up in addition to the War Manpower Commission?

Mr. ZISKIND. The War Manpower Commission is authorized to take care of manpower and the War Production Board handles production. In the allotment of materials or the control or regulation of production, it is necessary to take account of the war manpower situation. Somebody in the production agency must consider the availability of manpower or the scarcity of manpower in deciding where production shall go on and at what pace or at what level it shall go on.

Mr. TABER. Do you fix where contracts shall be let?

Mr. ZISKIND. We do not fix where contracts shall be let. We are not a direct procurement agency in the sense that the Army, Navy, or Maritime Commission is. We do have questions of procurement policy.

The War Production Board, through its over-all responsibility, has issued what is known as Directive No. 2 which sets general policy rules for the guidance of the procurement agencies, directing them to

stay out of tight labor areas and to work in looser labor areas, so far as that is consistent with satisfactory delivery dates, prices, and other procurement factors. The development of that policy and the application of it come under the general supervision of W. P. B.; and we in our office helped W. P. B. to make that policy in the light of changes in the manpower situation.

Mr. TABER. Why do you need so much help? I do not know how many you have now, but you have had 64 on February 28, and you are contemplating an increase for next year.

Mr. ZISKIND. We have 65 on the pay roll today. The Budget for next year I understand contemplates 64 man-years with a possibility of 66 positions. So that we are in effect asking for a retention of our present operating staff at its present level.

The reason we need that many is that our country and our industry are complex.

Mr. TABER. Are they busy?

Mr. ZISKIND. They are extremely busy, particularly at this time when the War Production Board is making its quarterly allotments for the third quarter. Most of the members of our staff have been working for the last 3 weeks, 7 days a week, 12 to 14 hours a day. That is not our usual schedule; but we think we are overworked.

Mr. CASE. Are you not trying to do too much by duplicating what the War Manpower Commission does?

Mr. ZISKIND. No, sir. I do not think we do duplicate their efforts in any respect. The War Manpower Commission will gather information about the tightness or the looseness of a particular labor market, but then somebody in the War Production Board must take that into account and decide whether or not

Mr. CASE. Whether or not it is correct?

Mr. ZISKIND. No, no. We accept their figures; we assume that they are correct. But we decide whether or not, in the light of the information, our controls limiting production or expanding production, parceling out materials here and materials there, fit into the manpower scheme as well as possible.

Mr. CASE. Do you find that their estimates are correct?
Mr. ZISKIND. Yes. I think, generally speaking, they are.
Mr. CASE. How do you explain the tire situation?

Mr. ZISKIND. By "the tire situation" do you mean the fact that we have a shortage of rubber tires?

Mr. CASE. Yes; and that the responsibility for it is not the lack of materials, but the lack of manpower; that the ratio of materials to available manpower has not been kept in proper balance.

Mr. ZISKIND. Sir, I doubt the accuracy of that statement. The recent set-back in tire production was clearly caused, I think, by a shortage of carbon black.

Mr. CASE. Which was based upon the manpower situation?

Mr. ZISKIND. Which was based to a certain extent upon the manpower situation, but also based upon the shortage of facilities and the failure to anticipate the needs of the carbon black industry. When tires were slack and the demand was far in excess of output, the Labor Office succeeded in developing a cooperative relationship with management so that production was stepped up very decidedly. The entire industry was working on a 7-day basis at the time carbon black became scarce. So, it was not a shortage of labor, but definitely

a shortage of carbon black at the time that caused this cut-back in tire production.

Those are merely some of the complexities of the situation, and they indicate some of the difficulties with which we have to deal.

Mr. CASE. When you say that you help to explain the War Manpower Commission's policies to the War Production Board, what do you mean?

Mr. ZISKIND. The War Manpower Commission has a series of programs. To name a few, it has an employment stabilization program with a system of certificates of availability; it has an employment ceiling program, a controlled referral program, and recently it had a forced release program. Its programs all affect employment and production. The production people in W. P. B. need to understand those things in order to regulate their own affairs. So part of the function of our office is to help explain those things in terms of W. P. B. functions.

COLLECTING AND ANALYZING DATA TO DEFINE CHANGING LABOR SITUATION

Mr. CASE. You stated that you accepted the War Manpower Commission's figures and statistics. Yet the statement here lists as the first of your activities collecting and analyzing data so as to define the changing labor situation more accurately. In other words, the figures that are submitted to you are not entirely accurate?

Mr. ZISKIND. The labor data come not only from the War Manpower Commission but also from the Bureau of Labor Statistics, Department of Agriculture, and the Bureau of the Census.

When we say "collect data," we mean gather the primary materials prepared by those agencies. We do not do the primary research out in the field ourselves, but in order to appraise accurately the manpower situation throughout the country we must gather together statistics from all these agencies.

Mr. CASE. You mean that there are so many agencies collecting figures on the manpower situation that you put them all together and determine what the fair average is or which one is right?

Mr. ZISKIND. No; it is not quite that. Let me be specific. In order to determine what the unemployment situation is in this country, we must go to several sources. We do not have any detailed surveys of actual unemployment in the cities or States of this country. It is necessary to look at the unemployment compensation claims and to analyze their trend. It is also necessary to look at the registrations or applications with the employment service office. It is necessary also to look at the employment reports compiled by employers for the War Manpower Commission. It is only by looking at all of those different sets of data that you can get a proper understanding of what is happening with unemployment in this country. Unfortunately, there is no one survey of unemployment in this country I understand that the Bureau of the Census, which wanted to make one had its appropriation reduced by this committee.

Mr. CASE. That is what I was getting at. There is an estimate before this Congress at the present time for an industrial survey. If that should be provided, would that take the place of the work which you are doing?

Mr. ZISKIND. It would simplify our work considerably.