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MARCH 13 (calendar day, March 23), 1935.—Ordered to be printed

Mr. NEELY, from the Committee on the Judiciary, submitted the

following

REPORT

[To accompany S. 87]

The Committee on the Judiciary, to whom was referred Senate bill 87, the purpose of which is to prevent the shipment in interstate commerce of certain articles and commodities in connection with which persons are employed more than 5 days a week or 6 hours a day, and prescribing certain conditions with respect to purchases and loans by the United States, and codes, agreements, and licenses under the National Industrial Recovery Act, after mature consideration, very respectfully reports it to the Senate with the recommendation that it be passed.

This measure requires the adoption of a 30-hour week and a 6-hour day in various industries in the United States. If passed, it would

affect the employees in the following enterprises:

1. Industries borrowing money from governmental agencies.

2. Industries and their subcontractors making contracts for services

to be performed with the United States Government.

3. Industries actively engaged in interstate commerce.

4. Industries operating under codes approved by a governmental

agency.

In addition to providing a shorter workweek and workday, this bill would prohibit any reduction in the hourly, daily, weekly, or monthly wages of employees affected by it, pending a reasonable opportunity for discussion and agreement between employers and the duly selected representatives of a majority of their employees.

8-28-35

The bill contemplates the employment of America's jobless men and women in private industry by giving work to all who desire it at shorter hours, instead of giving work to a part of the people at longer hours. The measure proposes that private business supply this work at shorter hours without reducing existing wages, thus increasing the aggregate purchasing power of the Nation.

The greatest menace to our economic and political system is widespread unemployment, with its consequent waste and misery and discontent. In spite of all the efforts that have been made to employ the idle, the Government is today necessarily feeding more than 20,000,000 people at public expense. Probably more than 10,000,000 who are able and eager to work cannot find employment.

The traditional American method of employing our people is through private industry. We are now appropriating about $5,000,000,000 to give jobs to 3%1⁄2 million on public works rather than in private business. How many other millions will still be jobless after this $5,000,000,000 appropriation has been exhausted, no one can accurately foretell.

We have millions of idle men and women who are producing nothing and thousands of factories, farms, and mines which are either idle or producing much less than their capacity. Idle men and idle business units deprive alike the employed and the unemployed of those necessaries, conveniences, and comforts which could have been produced, processed, manufactured, distributed, and consumed if these idle men and plants had been at work. Conservative estimates are to the effect that since 1929 this country has lost $300,000,000,000 worth of production as a result of this idleness of men and business.

The bill seeks to put idle millions to work in our idle mines, factories, and business agencies. The people of the United States are entitled to the necessaries, conveniences, and comforts which can be produced by their labor.

The success of our economic and business system is largely dependent upon purchasers and their buying capacity. Nationalistic policies in this and other countries have practically robbed us of our foreign customers. Consequently more than 95 percent of all the goods which we produce must be sold to American consumers, if sold at all. Wage earners and others with small incomes constitute more than 90 percent of these customers. Until our consumers can buy and pay for what they purchase, no one should optimistically hope that goods will be produced.

We have tried various methods of solving our economic problems. Our greatest success in this matter has been achieved by shortening working hours, increasing wages, raising the price of farm products, and providing an enormous Government pay roll, thus increasing employment and purchasing power.

But we should no longer temporize with the cancerous condition of unemployment, which is attacking the very vitals of our civilization. We must choose between fostering a vast regular army of mendicants and readjusting our working conditions so as to provide jobs for the idle instead of doles.

A shorter workweek and workday will restore happiness and hope to millions who will be given employment. The bill, if passed, will increase production throughout the Nation. It will put idle men

and idle machines to work. It will support our idle toilers with wages instead of taxes.

The most enlightened and statesmanlike opinion in America today favors reemployment instead of the dole. Every idle American should be afforded an opportunity to work. The morale and the hopes of millions of people are at stake. The natural resources and manufacturing establishments of this great industrial Nation are, if intelligently utilized, sufficient to supply plenty for all. But the enjoyment of our resources and the consumption of our production, in the last analysis, depend upon the employment of the idle and the purchasing power which their wages will create.

According to official statistics, our national income declined, in round numbers, from $82,000,000,000 in 1929 to $46,000,000,000 in 1933. Unofficial estimates indicate that our 1934 income exceeded that of 1933 by only $7,000,000,000. But the aggregate loss to the American people has been infinitely greater than these deplorable income returns certify or suggest. It has been estimated that the enforced idleness of millions of toilers since 1929 has, directly or indirectly, resulted in a loss to the nation of approximately $300,000,000,000.

Innumerable idle American machines, mines, factories, farms, women, and men present to the world a record which for suffering, inefficiency, and waste surpasses every other similar record in the history of the world. The enforced idleness of our plants and more than 10,000,000 toilers still completely paralyzes a large part of our productive system and deprives the people of the comforts which they are entitled to enjoy.

The National Recovery Administration, through shortening hours and establishing minimum wages, originally caused the employment in private industry of several million idle workers, and, according to unofficial estimates, added between 4 and 5 billion dollars to our annual pay rolls and the purchasing power of the people.

In March 1934, President Roosevelt convened all the code authorities and urged them to adopt a general policy by virtue of which the unemployed would be put to work and business recovery would be promoted. The President declared, in effect, that the time had come for business to place a maximum amount of emphasis upon increases in wages and reductions in hours of employment, and a minimum amount of emphasis upon profits. Manifestly, the purpose of the President's admonition was to accelerate reemployment and increase mass purchasing.

If business had heeded the President's request, the progress of our recovery program would have been accelerated; employment would have been spread; mines and farms and factories would have increased their output and their contribution to the comfort and happiness of the people. But in this matter business has not pursued, and apparently never will voluntarily pursue the course which the President has outlined. Profit is still the supreme business incentive. As a whole, business always has and probably always will consider profits more important than human welfare. Presumably, it will continue to oppose higher wages and shorter hours of service. Shorter hours, better wages, and better working conditions have never been achieved without the vigorous opposition of business. The committee believe that the opposition of the captains of industry to the 30-hour week bill

is not justified and that the only way to obtain jobs for our employed is to provide shorter working hours for all industrial workers.

Hope for economic recovery lies in the 30-hour week. Jobs on emergency public works are merely temporary palliatives. They afford neither permanent nor sufficient security for our vast army of unemployed.

Shorter hours and adequate wages, which are cornerstones of the economic recovery and reform which President Roosevelt recommended and business and the N. R. A. code authorities rejected in March 1934, should now be provided by the enactment of the 30hour-week bill.

The most vigorous opposition to the bill has been voiced by the interests which, last March, through the code authorities, rejected the President's recommendations for shorter hours and higher wages. The dominant banking groups of the country and many of our industrial leaders are still thinking in terms of the dazzling but disastrous 1920's. The compulsory adoption of shorter hours for industrial workers without reduction of wages is considered by some of our powerful industrial and financial leaders as an unwarranted infringement upon the profits of the present and a menace to the profits of the future. Fundamentally the opposition to the pending bill is that of the privileged groups who object to the enjoyment of a fair share of our wealth by those who produce it. But these leaders will be wise in their day and generation if they accept, in an economic sense, the principle enunciated in Palestine almost 2,000 years ago, that "he who would save his life must lose it," and that excessive profits and indefensible million-dollar-a-year bonuses for the few must yield to shorter hours and higher wages for the general benefit of all the people. They should remember that often "greed devours itself."

The attitude of the opponents of the reduction of the hours of serv. ice has remained practically unchanged ever since the industrial revolution in England, a century and a half ago. The testimony of those who have, during the hearings, opposed the pending bill have shown no deviation from traditional form. They have contended that the 30-hour week would restrict production. Lower living standards and raise costs and prices; and that it is technically impractical and even threatens the solvency of industry. The attacks upon the bill are similar to those which have been uniformly made against improved labor conditions ever since the fifteenth century, including such improvements as the prevention of factory work by children of 6 years of age; the reduction in hours of service provided by the Adamson 8-hour law for railroad employees; the reduction in the steel industry from 84 and 72 to 48 hours a week; the shorter workweek for industry under N. R. A. But the fact remains that all previous reductions in hours of service have been applied practically without additional costs; without checking a steadily mounting national production; and with great advantage to industry and its employees. During 7 months of the years 1933-34, a study of America's capacity to produce goods and services was made by 60 trained engineers and technicians. This study was an official undertaking of the United States Government. The conclusion was reached that our national output of goods and services could be increased 45 percent

over the 1929 production, or in terms of value from $93,000,000,000 to $135,000,000,000 a year.

The report of this study, among other things, significantly says: It should be noted that the above estimate of what the physical equipment and personnel could produce, if production were limited by physical factors only, could be enjoyed only if the additional consumer satisfactions were made available to that part of the population which was not able to enjoy them in 1929, or since. We have not studied the possibility of expanding the production of scarce goods (handicraft, art, etc.) nor of similar services, the consumption of which could be indefinitely increased. * * * The total money equivalent of the goods and services available were production limited only by physical factors and knowledge, namely, 135 billion, does not indicate the possible living standard of the population.

Consequently the income of $4,370 per family per year should be thought of only as the basic sum, the equivalent merely of the necessary nonscarce physical goods and the elementary services required for a decent living standard. Beyond these essentials lies most of life.

Furthermore, the recent Commission on Economic Reconstruction created by Columbia University, endeavored to secure the judgment of engineers and of business executives relative to what America actually produces and is capable of producing. This commission's report, which was made in 1934, contains the following questions and

answers:

Q. What percent of increase could be effected by the industries reported if equipment and management were brought up to the level of the best current standard?-A. The mean estimate of the engineers is 90.1 percent and of the executives 84.4 percent. Thus, "we have a very serious challenge to existing conditions which the economist cannot ignore."

Q. How much could the output of all industries be increased with equipment and management brought to the level of best current practice?-A. 77.6 percent

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The challenge to the economist is obvious, for engineers and executives alike find that economic factors directly and indirectly play a large part in limiting technical efficiency.

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It is seen * in the answers to questions 4a and 4b, where lack of effective consumer demand or lack of purchasing power easily heads the list among the economic factors which have, according to the judgment of the respondents, limited the volume of output in recent years of active trade (192329), both for particular industries and for industry at large. * * Here then we have a consensus of professional opinion to the effect that the economic mechanism is not so geared to the productive mechanism as to make fully available for the satisfaction of human wants the powers which industrial and technological development have placed at our command. On this point the conclusions of our subcommittee are very suggestive. They point out:

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"If we accept the judgment of these 59 engineers and executives that from the viewpoint of engineering technology the productivity of industry could be greatly increased with existing facilities, were it not for limits to effective demand, interest is turned at once to this matter of effective demand. Experience promptly rejects the hypothesis that demand is restricted because all, or anywhere near all, consumer wants are satisfied. Presumably, therefore, the restriction of demand is caused by ineffectiveness, due to the existence of interfering institutions or the absence of essential institutions, in the functioning of the processes whereby total income flows out to the community and is transformed into purchasing power."

These studies clearly illustrate the fact that there is practically an unlimited field for the increase of our industrial output and national income. But this great potential capacity has not been achieved because of the absence of purchasing power occasioned by unemployment, low wages, and low farm prices.

S. Repts., 74-1, vol. 1-81

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