SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS

CARTER GLASS, Virginia, Chairman

KENNEDY F. REA, Clerk

INDEPENDENT OFFICES APPROPRIATION BILL, 1935

WEDNESDAY, JANUARY 17, 1934

UNITED STATES SENATE,

SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS,

Washington, D.C.

The subcommittee met at 10 a.m. in the committee room, Capitol, Hon. Carter Glass (chairman) presiding.

Present: Senators Glass (chairman), Byrnes, Russell, Coolidge, Adams, McCarran, Hale, Steiwer, and Townsend.

The subcommittee thereupon proceeded to the consideration of the bill (H.R. 6663) making appropriations for the Executive Office and sundry independent Executive bureaus, boards, commissions, and offices, for the fiscal year ending June 30, 1935, and for other purposes. STATEMENT OF WILLIAM GREEN, PRESIDENT OF THE AMERICAN FEDERATION OF LABOR

GENERAL STATEMENT

The CHAIRMAN. Mr. Green, this is an executive session of the subcommittee on appropriations having charge of the independent offices bill. We want to avoid any repetition of the hearings had before the House Committee, because we have those in printed form. I wonder why you gentlemen did not appear before the House com

mittee.

Mr. GREEN. I cannot answer that myself, Senator; but it seems that we were under the impression that hearings were not going to be held by the House committee. That was the information that was brought to me by our representative.

Senator HALE. You mean on title II of the bill?

Mr. GREEN, Yes; on title II of the bill.

The CHAIRMAN. The committee will be glad to hear you, sir.

ORGANIZATIONS REPRESENTED

Mr. GREEN. Thank you very much, Senator. I am very glad to have the opportunity of coming here.

I

I wish to speak for the organizations affiliated with the American Federation of Labor. It is not necessary to read their names. will just submit them, if you wish their inclusion in the record.

The CHAIRMAN. Yes.

(The list above referred to is as follows:).

Gilbert E. Hyatt, National Federation of Post Office Clerks,
A. F. Stout, Brotherhood of Maintenance of Way,
W. M. Collins, Railway Mail Association,

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M. T. Finnan, National Association of Letter Carriers,

Charles Wahl, Canal Zone Employees,

E. C. Babcock, American Federation of Government Employees,

N. P. Alifas, Metal Trades Council,

Frank Coleman, Plate Printers and the District of Columbia Federation of Labor,

C. L. Mills, Typographical Union,

A. J. Lovell, Brotherhood of Locomotive Firemen & Enginemen,

John Corbett, Brotherhood of Locomotive Engineers,

W. C. Johnson, Order of Railway Conductors,

W. D. Jackson, Brotherhood of Railroad Trainmen,

C. L. Rosemond, Engineers, Architects & Draftsmen.

Mr. GREEN. There is quite a group of them here. May I ask, Senator, for the privilege of allowing the men representing these organizations to file briefs with your clerk?

The CHAIRMAN. We should be glad to have them do that.

Mr. GREEN. And their briefs will be incorporated in the record? The CHAIRMAN. Yes; they will be printed in the record.

Mr. GREEN. They do not ask to appear, but simply ask for the privilege of filing briefs setting forth the position of each of them. The CHAIRMAN. I think there would be no objection to that. Senator HALE. Is there any one else that you want to have appear? Mr. GREEN. Yes; I should like to ask that Mr. Whitney, the president of the Brotherhood of Railway Trainmen, be given the opportunity to speak briefly. I should like to divide my time with him. The CHAIRMAN. There is no objection.

Mr. GREEN. I appreciate that very much. He has information on some phases of the matter that we should like to have him present. He will come in now, following me, if you will grant him that privilege. The CHAIRMAN. You are not going to present that phase of it yourself?

Mr. GREEN. He will present some phases of it as it affects the railroad workers.

RESTORATION OF 15-PERCENT PAY CUT

The importance of restoring the Federal employees' 15-percent wage loss cannot be too strongly emphasized at this time.

In discussing this question I will sum up my reasons under several different heads, for there are several vital factors in our economic development in the new few years which hang on the decision of Congress regarding this 15-percent wage loss.

Employers in industry will model their action upon the decision of Congress regarding salaries of Federal employees. We have found that to be true, gentlemen, in actual experience; and employers in private industry have used the argument effectively that the Government has found it necessary to reduce wages and to continue wage cuts, and asked why they should pursue a different policy than the policy set up by the Government.

Congressmen first began discussing a pay cut for Federal employees in the fall of 1931. On September 22 Congressman-elect McGugin. of Kansas, stated publicly that he intended to introduce a bill providing a 25 percent wage cut. During the session of Congress which convened on December 8, 1931, the pay cut was continually discussed. Industry took this as a signal for widespread wage reductions. In the first three quarters of 1931, wage cuts were averaging less than

800 per quarter, according to records of the Labor Department. In the fourth quarter of 1931, wage-cutting jumped to 1,349; and in the first two quarters of 1932 there were more than 2,300 wage cuts per quarter in industrial firms. To me, that is very significant.

To restore Federal employees' wages now, and so give the signal for wage increases in industry, is most important. First, monthly earnings of industrial workers have declined since October for the first time since the N.R.A. program went into effect.

Senator TOWNSEND. Has that been a gradual decline?
Mr. GREEN. Since October.

Senator TOWNSEND. It has been a gradual decline since October? Mr. GREEN. Yes; I will give you the facts. I mean monthly earnings. I do not want to make it appear that the wage cuts have taken place since October, but monthly earnings of industrial workers have declined since then. That is due to various causes.

Wage earnings in 16 industrial groups were $90.10 in October compared to $88.28 in November, according to the calculations based on Labor Department figures. This first drop is a danger signal. In our opinion, the time is at hand when this downward trend should stop, and wages should start back again. I think all of us are deeply concerned, and perhaps a bit apprehensive, over the final outcome of the application of the National Recovery program. I feel that we have made wonderful progress thus far; and for that reason the American Federation of Labor is giving enthusiastic support to the President and to the National Recovery Administration because we see in the National Recovery program the one hope for labor and for a final, complete restoration of normal economic conditions.

The imposition of the 15-percent wage cut upon Federal employees is having a bad psychological effect. The workers employed by the Government are smarting under a keen sense of injustice. They see the Government itself devoting all its energy through the National Recovery Act to restore buying power, to lift wages to a higher level, to overcome unemployment in private industry; because, as you gentlemen know, the primary purpose of this act is to restore buying power and to overcome unemployment. We believe that is necessary because of the serious social implications involved in a continuation of the maintenance of a large standing army of unemployed.

The Government workers cannot understand why the Government should devote all its energies and the force and power of the administration and the Government to restore wages and to build up wage levels in private industry, and at the same time continue a reduction in wages for Government employees. There is no kind of reasoning, no sort of logic, that will convince these people that that is just to them.

Secondly, workers' buying power has fallen far behind their producing power during the depression. In the 3 years since 1929, producing power per worker in our manufacturing industries has actually increased 12 percent, while the workers' buying power has been declining steadily until the N.R.A. program went into effect. To build up buying power in the great mass of American consumersthe wage and small-salaried workers-is an essential part of the recovery program, as the President has often stated.

The Federal Government is a larger employer of labor than any industry in the United States. What kind of example is it setting if

the 15-percent wage cut is continued while it urges other industries to raise wages? I emphasized that point just a moment ago.

Sixty percent of the Federal employees are now receiving less than the minimum wage for health and decency. In 1932, 417,089 Federal employees, or 60 percent, were receiving $2,000 a year or less. Since then their budget has been cut by 15 percent, to $1,700 or less. The average minimum budget for health and decency in 10 large American cities in December 1933 was $1,871 a year-$171 above what the best paid of these Federal employees was receiving. These figures for the minimum budget were based on 10 cities where the cost of living has declined much more rapidly during depression than it has in Washington, so that actually these Federal employees are at present much farther below the minimum health and decency budget than appears from these figures.

There were, in 1932, 270,000 Federal employees earning $1,700 a year or less. With the wage cut they were reduced to $1,445 a year, an income far below the minimum for health and decency. The average size of the Government employee's family is almost exactly five persons, the number for which this budget was prepared. Is the Government going to set the standard of paying to the majority of its employees wages even below the minimum of health and decency? Now I desire to come for just a moment to the cost-of-living phase of the matter.

The cost of living has been rising more rapidly in the city of Washington than in the United States as a whole. From June to December of 1933, according to Labor Department figures, the cost of living in Washington rose 6.5 percent, while in the United States as a whole it rose 5.2 percent. We know that we have ahead of us a period of rapidly rising prices.

Retail prices of food in Washington are already 15.5 percent above the depression low point of April 1933. I am not sure whether I would be justified in emphasizing the word "rapidly." Perhaps that is putting it a little strong, Senator; but I think we can with fairness to the entire situation, and in accordance with the facts, arrive at the conclusion that we are approaching a period when commodity prices are going to rise. If that is not the case, then our whole monetary policy will be a failure. If we are to have devaluated money, if our dollars are to be cheaper, certainly our workers ought to earn more. There is the whole trouble, as labor views it, regarding devaluation policies or a change in our monetary standards: That while commodity prices react quickly to changes which may take place in our monetary standards, the wages of labor remain stationary. They move up too slowly, being perhaps the last to react to these changes in the monetary values.

During that interim labor suffers, because its dollars buy less; and it appears to me that if we are to embark now upon this change in our monetary values, that in itself is a convincing argument in favor of a restoration of the wages taken from the Federal workers through the imposition of the wage cut. It seems inconceivable that a fair government would devaluate the dollar and at the same time maintain a continuous reduction in wages. Fairness would say to put back the wages along with the decrease in value of the dollar.

Senator STEIWER. Do you know to what extent wages lag behind in times of appreciated prices and increase in values? Has it been