Mr. Walling is here representing Governor Greene. All told we have about 45 witnesses who would like to be heard. They come from the North, the South, the East, and the West, and they will substantiate very briefly the testimony presented by the leaders of the organization.

I might say, Mr. Chairman, that Mr. Gilbert, representing the Southern States Industrial Council, stated that the employers wanted more power. We have pointed out in our statement that they have the power and we are trying to curb it.

We charge the Southern employers with exploiting labor. We charge also that this same organization is headed by Mr. John Edgerton, an exponent of Christianity, who threatened to secede from the Union unless the Government stopped its regulation of industry.

Mr. SCHNEIDER. I did not quite get that last statement.

Mr. GORMAN. That Mr. John Edgerton, a member of this organization that Mr. Gilbert represents, threatened to secede unless the Government stopped this practice of industrial regulation.

We believe our statements will dispute the statements made by Mr. Gilbert.

Mr. LUNDEEN. Was that a recent statement?

Mr. GORMAN. It was quite recent. It was within the last 6 months. Mr. Gilbert also said 97 percent of the employers are maintaining the code.

Mr. LUNDEEN. I think he said 92 percent.

Mr. GORMAN. Very well, then. We will produce evidence at this hearing to show that no more than 50 percent of the employers are maintaining code standards.

If it is agreeable to you I would like to introduce Mr. E. Metcalf Walling, representing Governor Greene, of Rhode Island.

Mr. KELLER. We are quite willing to do that. But the hour for the committee to adjourn temporarily has come, so we shall have to go over to the Hall.

I shall ask for permission to hold the hearings during the session of Congress. And I think it will be granted. We have no right to hold hearings here during the session of Congress without permission of that body. If it is granted, we will come back here at 1:30 and start the sessions at that time and continue until all of you have had your

say.

We shall adjourn from the present moment until 1:30.

(Thereupon, at 12 noon, a recess was taken in the hearing until 1:30 p. m. of the same day.)

AFTER RECESS

Met, pursuant to the taking of the recess, at 1:30 p. m.
Mr. KELLER. The hearing will please come to order.

The next witness, according to the agreement, as I understand it, will be Mr. Thomas McMahon, of the United Textile Workers of America.

Mr. McMahon, will you please come up here near the head of the table so that you will be facing the audience. And I will ask that you talk so that everyone in the room can hear you.

STATEMENT OF THOMAS MCMAHON, PRESIDENT, UNITED TEXTILE WORKERS OF AMERICA

Mr. MCMAHON. Mr. Chairman, gentlemen, and Members of Congress, my name is Thomas McMahon. I am president of the United Textile Workers of America.

I appear before you today speaking on behalf of the workers in the textile mills. It was my privilege some 3 years ago to come with the employers and during the spring and summer of 1933 aid them and cooperate with them in an effort to bring about stabilization in the industry. None was more appealing than were the textile manufacturers from the South, the North, and the East in their effort to secure redress through the N. R. A.

During all of those weeks that Congress debated the N. R. A. bill, the employers, with myself, were sitting here in Washington in the various hotels getting ready the now celebrated Cotton Textile Code, which was code no. 1. I am rather surprised that those of us speaking for industry today and appearing in behalf of humanity, we who were so willing to give of our best to industry to help build up the material side, now see that practically all of those associations have decided that the press is correct and are antagonistic to our efforts to bring a little bit of sunshine into the homes of the workers in the textile mills in the country.

We are here representing the United Textile Workers of America, affiliated with the American Federation of Labor, and representing every division of the textile industry, operating in 35 States, with approximately 700 local unions. H. R. 9072 known in the short title, as the National Textile Act, gives us what we believe is the necessary legislation for the rehabilitation and stability in the textile industry of the United States.

This act is primarily a labor bill, designed to create a fair, competitive condition through the establishment of uniform labor standards. You will note according to the bill, the textile industry includes the following:

You will find that list in the bill, so I will not stop to include it here.

Approximately 1,250,000 persons are directly affected, but not all of these are employed at the present time.

About 50 percent are females.

The principal divisions employing the largest number are:

(1) Cotton, 400,000; (2) wool, 127,000; (3) hosiery, 125,000; (4) silk, 100,000; (5) rayon and synthetic yarn, 50,000; (6) throwing, 50,000; (7) carpet and rugs, 30,000; (8) rayon and silk dyeing, 25,000; (9) upholstery and drapery, 10,000.

These are approximate figure, and do not reflect the situation at this time. We are merely submitting them to the committee, to give a general idea as to the makeup of the industry. It should also be noted that we had about 37 codes in the so-called textile industry. The above named, however, are the largest groups.

We are asking the Congress of the United States, as a matter of legislative determination, to find the following facts:

All of these have been taken care of by Mr. Ellenbogen and will be contained in the brief which I will file.

We are also asking the Congress of the United States to declare it to be the policy to foster, protect, advance, and regulate the stream of commerce among the States and with foreign countries by the establishment of minimum wages and maximum hours, by the regulation of child labor, work assignments, and other working conditions, by guaranteeing the right of employees to organize and bargain collectively, by the control of excess production, and by other means set forth in this act.

Under present unregulated conditions, wages below a decent standard of health and comfort, excessive hours, child labor, overburdensome work assignments, other unheatlhy and demoralizing conditions of work, and denial of the right of self-organization and collective bargaining, and excess production prevail in the textile industry, cause widespread unemployment and heavy financial expenses to the Government of the United States, and constitute menace to the health, safety, morals, welfare, and comfort of the citizens of the United States.

Competitive conditions in commerce among States in textile products prevent effective correction of such evils through local or State regulation and make necessary for their correction the exercise of the powers vested in the Congress of the United States.

And to finally declare that the existence of the evils in the textile industry as set forth in sections 1 and 2 of this act is contrary to the public interest, and to the policy of Congress. And that it shall be the policy of the Congress to remove these evils by (1) to deny the use of the channels of interstate commerce for the perpetuation and accentuation of such evils; and (2) to deny the use of the mails, the benefits of Government purchases, contracts, loans, and grants, and the privilege of registration of securities to any person producing textile products under said conditions or contrary to the standards set forth in this act.

We also declare in the bill that any employer who agrees to live up to these standards shall be given a license by the National Textile Commission established by the act and furnished with a label or stamp to identify his products.

Child labor is prohibited and provision also made for a dismissal

wage.

We do not propose to discuss the legal aspects of the bill. This will be done by our legal advisor. It is my purpose to submit supporting evidence which we believe will convince your committee that this bill should be passed, as a measure of Government protection given to the millions of people affected, and I might say the most exploited group in any of our basic industires.

To get a clear picture, we must delve into the past and summarize, briefly, the development of the industry over a period of 15 years. We are submitting wage data and expect that the Bureau of Labor Statistics will have some one here to discuss the question of wages and hours in detail.

In 1920 American industry was emerging from the war period with war-time profits. The employers were engaged in the impossible struggle to maintain war-time profits in a period of peace. Mills resorted to the device of watering stock. The capitalization of the mill would be increased from $1,000,000 to $2,000,000, based not on any increase in assets, but solely on the estimated future earnings,

and in the light of the exorbitant earnings gathered in during the war. But when the war boom broke, there were two resources, at the hand of the unscrupulous management of industry(a) to cut wages and increase hours; and

(b) To increase the machine load per worker, thus increasing the productive powers of the worker, at a lower wage, with drastic displacement program. This new technique became known as the "stretch out". According to N. R. A. data, stretch out has been a steady phenomenon over the last 10 years. The load per worker has been increased each year. The number of spindle hours operated per man-hour have increased regularly at about 3 percent per year. The total increase between 1926 and 1934 was 28.1 percent. However, these figures underestimate the extent of the speed-up, since they include all cotton textile workers, many of whom do not directly operate machinery and whose load cannot be stretched. You will hear more about this evil as this hearing progresses.

The employers knew that this attack on labor standards was an invitation to strike, but they had their dividends to pay on the "watered" stock, which had been issued in the enthusiasm of the boom days, so in 1922, we struck in New England. The strike involved approximately 100,000 mill workers. We managed to retain our standards in the organized sections of the industry. The strike lasted almost a year, and we settled down once more in the endeavor to work out a peaceable solution of these new problems.

The year 1924 witnessed a slight increase in wages, but in 1928 standards were again shamefully lowered, with the southern mills taking the lead in wage cutting and increasing machine load.

The year 1929 saw a collapse of prices and with it came a period of wage-cutting and strikes. Right here we would attempt to drive home an economic fallacy and charge the employers with deliberately sabotaging their own business. We call it the vicious price- and wage-slashing cycle. The term "chiseler" was not used in those days, but it later became identified with the employer who not only cuts the throats of the workers but also his fellow employers. Let me point out that this practice is prevalent in all divisions of the industry. In the thirst for increased profit the chiseler cuts his prices. He then passes the loss on to the workers. The chiseler in the next town, then claims he must do the same thing against this unfair competitive situation. And so the thing is started, and it forms a cycle, which never ends.

For these unsound business practices we indict the entire industry. They had a chance to exercise some self-regulation, but the opportunity found them unwilling and unprepared to apply the methods necessary for a permanent and stable condition. Standardized labor conditions would break up this vicious cycle.

And so we get on to 1932. With unemployment and poverty stalking through the Nation, chaos and turmoil in the textile industry, as in all other industries, the election came along and a new President took the helm. Congress passed the National Industrial Recovery Act, and to the cotton industry went the credit or discredit of being the first to be codified. Code no. 1 was in the making. The employers had appealed with tears in their eyes to the administration for some form of Government regulation and sanction. They got it; they wrote the code. They agreed to incorporate therein certain

labor standards, i. e., the 40-hour week, as against the average of 49 hours before the code, a minimum wage of $12 for the south, and $13 for the North, as against the average of $10.05 before the code, and, more important than anything else, what was called the magna carta of labor, the famous section 7 (a), which later turned out to be infamous for the textile workers, and the child-labor clause, which prohibited the employment of children under 16.

For these "concessions" to labor, the employers got their fair-trade practices, and the industry started to boom, lifting itself out of the maze of depression and mismanagement into an era of profit-making and dividends. You will note I am using as an example the cotton textile industry. Later we will show that the same principles and grievances applied to all divisions of the textile industry.

Employment jumped about 100,000, and we started out with what was called a period of prosperity. However, we reckoned without our host. Almost immediately the employers started their chiseling practices. The desire for organization came spontaneously from all parts of the textile industry. We endeavored with our limited resources to meet this new demand. It must be remembered that the employers in the textile industry, with some exceptions, have always fought the union with all of their resources, and in some parts of the country, particularly in the South, the most brazen and cruel methods have been used against those who sought to take advantage of their alleged right to organize.

Our membership increased to approximately 300,000, and with this increased membership quite naturally came the desire on the part of the workers for protection against the constant attack by unfair employers. We found a number of employers, through various methods, substandard and otherwise, taking advantage of the minimum-wage clause. Others were gradually forcing the wages of the semiskilled and skilled workers downward and in many cases to minimum levels. A word of explanation at this point is necessary. We endeavored during the period of code making to have the minimum wage designated as unskilled or common labor. We contended for definitions and classifications in order that the standards of the skilled and semiskilled would be insured. At one time during the deliberations this was agreed to, but at the last minute the word "unskilled" was taken out, and the code was made without any specification of the minimum. We knew at the time what this would lead to. Our fears materialized in later developments.

The employers said the code brought an hourly increase of labor costs of approximately 70 percent (which increase, if any, was passed on to the consumer, through higher prices). Actually, however, the employers evened up their labor costs by wage chiseling, more "stretch out" and consequent displacement of workers. In the majority of cases the union men and women were displaced, and at this juncture we started again on a slow but sure path back to pauperism, unemployment, and a degradation of working conditions. These methods of persecution aroused the textile workers in all parts of the land. In the early days of 1934 we were beseiged by our local unions for strike action against these unfair and merciless tactics. This culminated the latter part of May 1934 with the request from the industry to the administration for permission to reduce production 25 percent. In other words, this meant a 25 percent wage reduction for labor.