TABLE VB.-Annual hours of work and accumulative distributions of employees by hours per year

2 Number of employees working less than the designated number of hours per year (or hours per week). Hours per week. Of the employees 25 percent average less than 43, 1929; 22, 1932; 13, 1933; 23, 1934. 50 percent averaged less than 48, 1929; 33, 1932; 19, 1933; 34, 1934. 75 percent averaged less than 54, 1929; 43, 1932; 26, 1933; 41, 1934.

TABLE IVA.—Annual earnings and distributions of employees by dollars per year

TABLE IV B.-Annual earnings and accumulative distributions of employees by dollars per year

Number of employees earning less than designated number of dollars per year (or dollars per week). Dollars per week.-Of the employees 25 percent averaged less than 50, 1929; 16, 1932; 12, 1933; 22, 1934. 50 percent averaged less than 59, 1929; 30, 1932; 18, 1933; 31, 1934. 75 percent averaged less than 71, 1929; 45, 1932; 25, 1933; 42, 1934.

Mr. WELCH. They have leveled up the lower-paid earners by leveling down the higher-paid workers?

Mr. DENNISON. That is right; that has been done; and the total purchasing power created has been nothing as far as we can see. Of course, the purpose of the National Recovery Act, the avowed purpose of it in the preamble of the act, was to increase purchasing power.

Mr. WOOD. Yes; that method is against the purposes and intent of the act.

Mr. DENNISON. I can see it is against the intention of the act. Mr. Wood. And against the intent of Congress when it passed the law.

Mr. DENNISON. I believe that to be true.

Mr. WOOD. When Congress passed this law the general understanding was, and even the intention of Congress was, not to reduce any wage, but to raise the wage of the lower-paid workers and to have a general elevation of wages.

Mr. DENNISON. We feel that it has been a misadministration of the law rather than the law that has caused that condition.

Mr. WOOD. Yes; the Members of Congress realized that you cannot create increased purchasing power by merely leveling up and down the wage and when the company does not pay out more wages in the gross payment.

Mr. DENNISON. I would like to make this statement: The production in the Detroit district of all the industrial designing engineers is now about 50 percent of normal as compared to 1928 and 1929.

Mr. WOOD. The production as compared to 1928 and 1929 is more than 50 percent of the greatest production, isn't it?

Mr. LESINSKI. Mr. Denison, talking about production, I find in a statement made last week in the press which I have here that automotive production has gone up to about 75 or 80 percent already within the last week.

Mr. DENNISON. I have reference to the employment of designing engineers in those industries, as I said in my statement. My statement was with regard to the employment of designing engineers. I presume those figures are correct, Mr. Lesinski, that there is about 75 percent of the normal employment as compared with 1928 or 1929, but as I have pointed out in my testimony, there has been a centralization of work. They have combined several drawing rooms together into one.

Mr. LESINSKI. Into mass production?

Mr. DENNISON. And speeded up the men, too. The total output of these industries may be more than it was in 1933, or 75 percent of what it was in 1928 or 1929, yet less men may be employed.

Mr. WOOD. That is through the consolidation of designing rooms? Mr. DENNISON. Yes; and it is also due to the utilization of smaller units.

Mr. LESINSKI. Last week's record of production shows that the automotive industry produced more cars than it ever did, except in the year 1929, in 1 month. Otherwise it has produced more cars than it ever did.

Mr. DENNISON. In our studies of technological progress our engineering society has come to this conclusion-of course, that is a part of our daily work, I might mention in passing-we have come to this conclusion, that if we were producing the same amount of wealth that we were producing in the United States in 1928 there would be as many as 5,000,000 less men employed.

Mr. LESINSKI. The only correction for that is this: All of the manufacturers claim they are putting more men to work, but we all know they are not. The only way to keep people employed is, first, to give them all seniority rights, give the older employees seniority rights, first, and then commence with a flexible 30-hour week; in other words, bring it up or bring it down, whenever it is necessary, the number of hours that are necessary for employment. You want not only a living wage but a saving wage. When you get to that point, then the next step is to curtail production in such a way that they would have to slack all the lines in every plant, and they would have to take the high-speed pulleys off of every machine and put the slow-speed pulleys on that they used to have, and if they would do that Detroit would not know what unemployment is. And if industry did want to cooperate with the Government, they could come out of the depression within 60 days, but industry does not want to cooperate. They want to grab all these small plants; they want to eliminate everything and grab everything into their own hands. That is the tendency today. And to help that thing along, the N. R. A. has helped it by being distorted by the manufacturers. Isn't that the way the thing looks in Detroit today?

Mr. DENNISON. It does seem as though the instinct to grab power on the part of the large units in industry was, as you say, shaping certain policies in order to drive out the competition of the smaller fellows. That is shown in the percentage which is given there. In 1928 and 1929, where the big three manufactured 77 percent, last year they manufactured 88 percent.

Mr. LESINSKI. Let us take any assembly line. At one time an assembly line went at the speed of about one-half a mile per hour,

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didn't it? I understand it is today about 2 miles per hour. In other words, it is speeded up three times. Isn't that the reason for unemployment?

Mr. DENNISON. It has been speeded up tremendously, and it is a reason for unemployment.

Mr. LESINSKI. Let us take another thing. An inspector today has to inspect 385 doors in 1 hour in a large plant, which is an impossibility, to have good inspection; 385 units in 1 hour. In years gone by he probably inspected 50 or 60. How many men did that throw out of employment?

Mr. DENNISON. It threw out plenty of them. Mr. Lesinski, they are even going better than that. Through the use of the photoelectric cell now certain inspection operations are doing away with men entirely.

Take certain pins, for instance. They have an inspection device now invented so that as these pins pass a point put into a moving track, this photoelectric cell gages them to within about two tenthousandths part of an inch; in other words, two-tenths of onethousandth of an inch. It gages them that close and rejects the inferior ones and allows the others to pass the photoelectric cell, and there is no one at all necessary to operate that.

Technological progress, as I said before, has made it so less and less men are employed to do any task. However, if we were to go into a real discussion of the social effects of technological progress, there was a previous witness here who testified something about the improvements on machines. But when he talked about the improvements on machines, I want to say in passing, that the social effect of technological progress, if it were passed on to the consumer rightly, would be a blessing. If it is all grabbed by the manufacturer or the banker or whoever is in a position to benefit by it, if there is too much profit piled up between the producer and the consumer, it can be a

curse.

If we were to destroy all of our machinery tomorrow and go back to the methods of making stuff by hand, and if we had a capital investment of $250,000,000 demanding an interest rate, a profit rate, of 6 percent upon it, and if we had to produce at the measured hourly rate and had to increase the man-hours going into the production of these commodities, it would raise the price of these commodities. The machine should cheapen the price of commodities; it should be a blessing to humanity. There is no reason for us to work 6 hours to do a task that we can do in 3.

The CHAIRMAN. What would you do? Suppose that a manufacturer could put in a machine that would only employ 5 men, where now they have 500, and you could buy your shoes for 40 cents a pair, the same shoes that you are now paying $6 or $7 for. How would that take care of the employment of the people? Even though they only had to pay 40 cents a pair for shoes, where would they get the 40 cents to pay, all those people who were thrown out of work?

Mr. DENNISON. I will answer that in this way: Obviously, two things can be done, both to increase pay and shorten hours. In other words, if we could manufacture commodities that rapidly, hours could be shortened and more people put to making shoes, and the fact that the shoes were cheap would allow them to buy more shoes.

The CHAIRMAN. Take the cigar industry, for instance. It was testified here a couple of years ago that one machine now can turn out more cigars than I don't know how many workers. Do you remember how many workers were formerly employed?

Mr. Wood. Twenty-five or thirty.

The CHAIRMAN. Suppose that you could buy a 10-cent cigar for a cent. What are you going to do with those people that are thrown out of work? In other words, no matter how cheap your prices will go-if you could buy butter for 5 cents a pound, you have got to get the money somewhere to buy it, haven't you?

Mr. DENNISON. That is very true.

The CHAIRMAN. Won't you come back to unemployment insurance, and come back to the profits of the manufacturer that can sell you those shoes and still make a big profit on those shoes or cigars, and won't you have to devise some means of getting that money to the people?

Mr. DENNISON. Mr. Chairman, the problem of unemployment insurance is something that we heartily endorse. I do not want to be misunderstood on this. But unemployment insurance is only a means of mopping up a mess after it has been made.

The CHAIRMAN. What is the solution of the machine proposition? Mr. DENNISON. Very well; I will go into that.

Let us notice what has been done by the machine. The machine has made is possible to reduce hours of labor and has made it possible to reduce hours much more than we have reduced them. The machine is a tremendous dynamic force, enforcing certain social changes upon us, but unfortunately we do not adopt these social changes as fast as they are necessary.

The CHAIRMAN. I understand what you mean.

For instance, take these lamps up here over our heads. I used to work in the Edison lamp factory in East Boston, and they had all these machines where 2 girls would be on 1 machine. Then they had another operation where two more girls would be on that. Then they had the packers and all these different things. Then just before I left that concern they put in a machine which would do the work, I think, of eight girls; in other words, combine those operations. Now, I think they had 600 or 700 working there when I first went there, and then I think they went down to somewhere less than 100. What will you do with those 500 girls, when other concerns that are making lamps or making shoes are doing the same things with machines? The department stores are putting in things which do away with cash girls, and all that sort of thing. What are you going to do with those people?

Mr. DENNISON. I will tell you what we can do with them, but you will have to follow me for just a minute.

As the machine makes it possible for us to create more wealth with less hours, the thing that has been done is to keep on working a certain amount of labor the same amount of hours, and lay off the surplus labor, whereas what should be done is to divide up the work among the employees they have and shorten the hours.

Mr. WOOD. And retain their purchasing power?

Mr. DENNISON. In other words, the machine makes it possible to produce and consume more goods; but today we are not using our