Mr. GILBERT. Yes. But that is against us. That recent decision is very much worse than the original one. This recent decision is on a mile-haul basis. Down South we have 550 or 560 people, let us say, to the square mile, but up in this eastern section of the country you will have a few thousand people to the square mile. In other words, when we ship the products of the eastern factories, we have just a very short haul; when we ship the products from the South, even to our own people, we have to take them further. And then when we ship from the South back East, where most of our products go, this last decision makes it far worse than we were situated under the prevailing conditions previously. Mr. RAMSPECK. Is it not true that mile for mile on cotton textile products, the rates from the South to the North are higher than from the North to the South for the same distance? Mr. GILBERT. Yes; very much so. Mr. RAMSPECK. That is the only legitimate argument I think you have for a differential in wage scales. Mr. GILBERT. That is sufficient for a better differential than we had under N. R. A. Mr. WELCH. How do you reconcile the statement that the 14 Southern States were vitally affected by N. R. A. by reason of the increased wages and that you went backwards during the period that N. R. A. was in force and effect, but since it was declared unconstitutional by the Supreme Court a few months ago you have gone forward 18 percent, and in the same breath you tell us you pay the same wages that you did when N. R. A. was in operation? Mr. GILBERT. Let me explain that. Mr. WELCH. If the high wage was the result of N. R. A. that set you back during the period of its operation, how is it that since it has been invalidated by the Supreme Court you have gone forward but still maintain the same wage scale set up by N. R. A.? Mr. GILBERT. May I answer that question? Mr. WELCH. I wish you would. Mr. GILBERT. Under N. R. A. there was fear in the hearts of industrialists in the South; there was the fear on the part of industrialists in the South and we did not know whether to buy raw materials, whether to manufacture the materials, whether to put it into our warehouses or what to do with it. When the annulment of N. R. A. came about that mantle of fear fell from us and we started out with new hope and new determination. Today we are not making any more money, and possibly not as much as we did under N. R. A.; but we believe the field is clear for us and our factories are running. They are not selling all of their goods, but they are accumulating them in the warehouses with the hope that some of this governmental restriction and regulation is removed. They believe the field is clear and open, and they are going forward with the determination, if they can, in their own way, to get out from under this depression. But so long as N. R. A. was held as a fear over them they were discouraged; they closed their factories. More than 200 closed down in Tennessee, feeling that there was no encouragement for them to go forward, and they took a vacation. Those factories are opening up, and with some hope that some relief will be given. That is the reason we are going forward-not that we are profiting any more. Mr. WOOD. You are not selling any more goods now? 56725-36 Mr. GILBERT. We are selling a little more, but not in proportion to what we are making. We are manufacturing much faster than we are selling. We are taking the chance. That is exactly what we are doing. And we are very hopeful that we will come out all right. Mr. SCHNEIDER. I would like to ask the witness a question. What has been the effect of T. V. A. in Tennessee in the district in which you live? Mr. GILBERT. It has been very discouraging. I will say it openly, that the worst thing that has happened to the State of Tennessee and to the South since the Civil War was the advent of T. V. A. Mr. SCHNEIDER. Isn't it reducing the electric-power rates in that section of the country? Mr. GILBERT. Yes and no. It is not reducing the power rates, but it is having the effect of extending power lines. The object of T. V. A. was to give us farmers-and I am a farmer-electric lights. The electric power companies are taking advantage of that and they are extending these rural lines. But so far as rates go, we cannot reduce our rates, or the companies cannot reduce the rates without our State commissions granting permission. And up to the present time the State commissions feel that the power rates are low enough in our section, and we are not getting the reductions. Mr. LUNDEEN. In many sections of the South the record shows by statistics that the rates have been reduced. Congressman Rankin has time and again produced given statistics in Congressional Records showing that this yardstick did in many places reduce the rates. I do not say all through the South, but in many places it did reduce the rates. Mr. GILBERT. Perhaps it has escaped me. Mr. KELLER. I wish you would read them. I think they are wrong. Mr. GILBERT. The reason we object so much to T. V. A. is that down in the section from which I come we do not like to see the Government-and we respect our Government-come down and compete with private individuals in business. That is what they are doing under T. V. A. They are coming down there doing that. And I will say this, Mr. Chairman, that if the T. V. A. was confined absolutely and strictly to the making and the distributing of power we would not feel so badly about it. We think even if you put the power companies out of existence there are that many stockholders who have lost their holdings. And what we fear most is that other lines of business are going to be entered by the Government. We have received many letters lately from T. V. A. or from some branch of it, asking what about establishing a mill in here; why not establish that mill in order to utilize the power and in order to buy the raw materials from that section and manufacture the stuff? When you start manufacturing power there is nothing to keep you from manufacturing overalls and work shirts, woolen blankets, and hosiery, and everything else. Our fear is that this is an entering wedge of the Government going into private business. Mr. SCHNEIDER. Is it not true in Georgia, Alabama, and Tennessee that the commissions have reduced the rates? Mr. GILBERT. I do not think we have gotten any reductions in Tennessee recently. Mr. SCHNEIDER. Do you use electric power on your farm? Mr. GILBERT. Yes, I do. Mr. SCHNEIDER. And do you buy direct from the power company? Mr. GILBERT. Yes, sir. Mr. SCHNEIDER. Do they buy from T. V. A.? Mr. GILBERT. No, sir. We have a dam right near my place up at Rock Island. The Tennessee Electric Power Co. has a power plant there. They do buy some from Muscle Shoals. But that was before T. V. A. Mr. SCHNEIDER. As I understand it, all of those State Commissions that are regulating the power rates have reduced rates wherever the companies are buying the power from T. V. A. Mr. GILBERT. The companies operating in my section have not bought any from T. V. A. They had a contract with Muscle Shoals and were getting the power there prior to T. V. A. Mr. SCHNEIDER. The fact is the companies will keep the rates up as high as they can until they are forced to pull them down. Isn't that true? Mr. GILBERT. I do not think so. If they do, they will lose business. Mr. SCHNEIDER. T. V. A. is threatening them and, consequently they will have to reduce the rates. Mr. GILBERT. We would rather deal with our own power companies down there. Mr. LUNDEEN. As I understood it, you stated that the T. V. A. had been a damage to the South. How can it damage the South to have millions of dollars in the Norris Dam, the great structure now being completed, and the Wheeler Dam, and Muscle Shoals and I voted for it during the war-and the Pickwick Dam and all of these other huge projects that private industry failed to build; and they failed to utilize these great resources. These are now being constructed and great power is going to electrify the whole country and stimulate everything down South. I cannot see how that can damage you. Mr. GILBERT. We have never opposed the building of the dams. For the most part they were built for flood control and navigation, and not for power. Power for the most part is a byproduct. The Norris Dam was built not primarily for power but as a storage for Muscle Shoals. Muscle Shoals has 7 months primary power and the rest of the year it it is secondary power. In order to make a steady flow they built Norris Dam. We do not object to the building of the dam down there. But we want the Government to sell the power at the dam to a distributing company that already has its own lines. Mr. LUNDEEN. Would object to that power being distributed by a cooperative? Mr. GILBERT. Yes; I think we would, because that is just a subsidiary, perhaps, of the Government. Let us keep business in the hands of the individual or private capital and let the Government perform the functions of government and let business perform the functions of business. Mr. LUNDEEN. And let business exploit everybody? Mr. GILBERT. I would not say exploit. I think business is the savior of the country. If it were not for business distributing their monthly or their weekly pay rolls we would be in a hopeless condition. Mr. WOOD. Do you mean from 1930 to 1933? Mr. GILBERT. We were having a hard time 1930 to 1933, but we would have gotten out from under it. Mr. WOOD. The fact of the matter is that business asked this Congress to save them in 1933. Mr. GILBERT. Well, I have forgotten just what we asked for. Mr. LUNDEEN. In that connection, during the war the railroads broke down. Mr. GILBERT. The Government broke them down; yes, sir. Mr. LUNDEEN. Just a minute, please. That is not correct. The railroads were unable to function during the war and came in and asked the Government to take them over. We took them over and ran them during the war and put them on their feet. And as soon as we put them on their feet private industry came back and said, "Now, we will run the railroads." Mr. GILBERT. Will you let me correct you there? Mr. LUNDEEN. Well, go ahead. Mr. GILBERT. The railroads did not ask the Government to take them over during the war; the Government took over the railroads and operated them. Mr. LUNDEEN. Because they broke down. Mr. GILBERT. No. They operated the railroads and turned the railroads back to the owners absolutely broken down with a billion dollars indebtedness on the railroads that the railroads have had to bear and pay since. Mr. Wood. I just want to dispute the gentleman's word. In the fall of 1917 General Counsel Thom, of the railroads, came to this Congress and told this Congress that the railroads had broken down. The Allied countries were sending some very curt messages over here to this Government calling their attention to the fact that they had promised to transport certain materials, munitions, wheat, and other commodities, to enable the Allies to carry on the war. And we agreed to do that. And the Allied countries told this Nation that we had failed to live up to the contract. The result was that when Mr. Thom, general counsel for the railway executives, was called before the Senate committee, he told the Senate committee the railroads had broken down. That is in the record. The result has been that the railroads were taken over for operation only. And Mr. McAdoo was appointed Director General of Railroads, and one of the first things he did was to issue an executive order early in January that all trains from the eastern seaboard to the West would become what they called "red ball trains", that is, a train that had the right-of-way. He issued orders to gather up all of the empties from the eastern seaboard for the western grain fields. And when he got a train of empty cars of 75 or 100, that train became a special or "red ball train", and all passenger and freight trains except the mail took the siding for that train of empty cars going to the western grain fields. And when they came back they were also "red ball trains", filled with grain going to the eastern seaboard, and they filled hundreds of ships lying there for months waiting for grain and commodities to ship to the Allies. That is why the railroads were taken over. Mr. GILBERT. I said the Government took the railroads over because the Government could do that. Mr. WOOD. The railroads said they could not do it; they were broken down. Mr. GILBERT. An individual railroad could not make a "red-ball" train, but Mr. McAdoo could. Mr. WOOD. They could not because it cost too much money; it interfered with their profits. Mr. KELLER. I think we have a very instructive witness here, and I think we are all enjoying it; but we are getting far afield from the matter in hand. Mr. GILBERT. I will apologize to you for the time I have taken. Mr. KELLER. You have answered a great many questions and you have answered them honestly. And I am glad we have given you the time. What I did want to ask, which has nothing to do with this, is this question: When you got to knocking the T. V. A., of course, I wanted you to tell what you were paying for your current. But that is another matter which is entirely outside of this subject, even though it does involve the question of how far the Government can go and how far business can go without the Government. It involves the question of whether there would be any business without Government. There would not be. And we ought to hold that constantly in mind. Mr. GILBERT. They have to go together. Mr. KELLER. Yes; they must go together. One cannot do the whole thing. Mr. GILBERT. We are loyal to the Government, and we are supporting it. Let me apologize again for staying here so long. But I appreciate your letting me answer these questions. Mr. KELLER. Mr. Francis J. Gorman, of the United Textile Workers of America. STATEMENT OF FRANCIS J. GORMAN, VICE PRESIDENT, UNITED TEXTILE WORKERS OF AMERICA Mr. KELLER. Will you please give your name and residence? Mr. GORMAN. My name is Francis J. Gorman. I am vice president of the United Textile Workers of America. With your permission, Mr. Chairman, at this time I would like to defer my testimony and make a brief statement to the committee of just what form we are presenting our witnesses. Mr. KELLER. All right. Mr. GORMAN. Last night we had a meeting of approximately 35 representatives from all parts of the country and all divisions of the industry, and we tried to organize the witnesses in order to avoid repetition. Mr. McMahon, the president of our organization, will present the statement for the organization and take up about an hour. He will be the next witness. In the meantime, we have had a request from Mr. Walling, who is here representing Governor Greene, of Rhode Island, that he be permitted to proceed. I might say that we invited the governors of all the textile States, but Governor Talmadge, who was the only exception, to appear here and testify. |