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Mr. GREEN. I will be very much pleased to do so.
Mr. Chairman and members of the committee, I am glad to have the privilege to testify before your committee on the bill introduced by Senator O'Mahoney and now under your consideration. In the eyes of organized labor in the United States this proposal is one of the most fundamental in purpose and far-reaching in importance ever considered by Congress.
It is important because it is based upon a correct diagnosis of our economic ailment; because it prescribes a treatment which is sound, which does not threaten our economic growth, our democratic insti. tutions, and which does not contravene or contradict a single requirement of our Constitution.
Today this proposal takes on added significance because of its timeliness. Our country has barely begun its emergence from the tragic collapse of recent years when it already finds itself faced with the self-same forces of destruction, which brought about the depression. These are the forces of economic unbalance and inequality, of unbridled and irresponsible economic power of giant corporate aggregates wielded by few who are accountable to none. They are the forces of speculation of momentary profiteering in which the masses of our people are periodically deprived of their earning power or defrauded of their hard-earned savings.
We must find a way, and find it promptly, to deal with these destructive forces and to wipe them out from the industrial and financial scene. I believe the O'Mahoney bill offers such a way.
It is important that the public thoroughly understands that this bill does not propose to vest the government with power to stipulate the manner in which all business is to be conducted. The bill does not propose to interfere with industrial self-government. It merely establishes a set of principles, of equitable national rules, to which business must adhere before engaging in commerce. These rules are neither arbitrary nor restrictive to the conduct of any corporate business which is conducted fairly, honestly, and responsibly. They do clearly establish, however, lines which corporations must not overstep, minimum standards below which they must not go. These lines are drawn because adherence to them is essential to protect public interest and to promote and safeguard the welfare of investors, consumers, and of labor.
The administration of this law does not require the establishment of new governmental agencies. The law_will operate with utmost economy. It will be administered by the Federal Trade Commission with certain changes and adjustments which would seem to be desirable under the circumstances.
The requirements of the bill with regard to labor provide fundamental standards, the desirability of which cannot be questioned. They will abolish for all time the question of discrimination against women in the matter of rates of pay. They will do away with the employment of children under 16 years of age and establish the minimum age of 18 for hazardous occupations. Minimum wages for the lowest paid classes of unskilled labor may be recommended by the Commission, but only when it finds that abuses in the form of wage scales, contrary to the public interest exist, and that such abuses have not been eliminated through collective bargaining.
The bill further provides that, as a condition of securing a Federal charter or license, corporations will agree to respect the right of workers to organize and bargain collectively through representatives of their own choosing. The bill requires the compliance with all the provisions of the National Labor Relations Act and in determining such compliance binds the Commission by the findings of fact and conclusions of law of the National Labor Relations Board.
It is hardly necessary for me at this time to plead before this committee the workers' need for protection of their rights of selforganization and the designation of their representatives for collective bargaining. These rights have become the declared policy of the United States embodied in the National Labor Relations Act and in other statutes. Every thinking person agrees that these rights must be exercised by the workers and must be respected by the employers if we are to avoid industrial strife and thus preserve the free flow of interstate commerce. Today the worker cannot bargain alone. He can either accept the terms offered or join the ranks of the unemployed. But through collective effort workers can effectively protect their interests and secure an equitable share in productive returns.
These simple and unassailable truths are amply sustained by the experience of the National Labor Relations Board. The Board has been in operation for a year and a half. What is the record of achievement of the Board in this field? Up to December 1, 1936, the Board had acted in 1,639 cases of industrial disputes, involving 627,145 workers. Among these were 269 strike cases, involving 53,618 workers and of these, 187 were settled and 28,000 workers were reinstated after the strikes or lockouts. In addition, 86 threatened strikes, involving 24,543 workers were averted through the Board's action. Through the intervention of the Board, 1,501 workers were reinstated to their jobs after discriminatory charges for union activity. In 64 elections held by the Board to determine the proper representation of workers in collective bargaining, 10,758 votes were cast.
Experience of the Board abounds with instances of actual and threatened interference in interstate and foreign commerce as the result of labor disputes, which came before the Board for decision. Here are a few instances,
In the Mackay Radio & Telegraph Co. case, the San Francisco office of this company, which engages in the receipt and transmission of national and international communications by telegraph, radio, and cable, handled 5,848 messages on October 4, 1935, the day before a strike occurred. On October 6, the second day of the strike, only 227 messages were handled. That is interference.
In the case of the National New York Packing & Shipping Co., Inc., a corporation 90 percent of whose shipments are to out-of-State or foreign points, no shipments at all were made during 2 weeks of the strike in August 1935.
Senator King. Where was that strike, Mr. Green?
Senator King. Did it involve a strike of dock men or those who load and unload vessels, or was it a strike exclusively of what might be denominated land forces ?
Mr. GREEN. I think it was involved in the shipping strike. I am not sure of the details. I will be glad to get them for you. I am merely endeavoring to show the effect of the strike.
Senator KING. There have been a number of strikes, and one is now pending on the Pacific coast.
Mr. GREEN. Yes.
Senator King. Which is an interruption of intrastate as well as interstate and foreign trade and commerce.
Mr. GREEN. Yes.
Senator King. If you care to comment, after you have concluded, on the reasons for that strike and what you consider the remedy, I should be glad to hear you.
Mr. GREEN. What I am trying to do, Senator, is not to go into the merits or demerits of the strike, or the cause of it, but to show how strikes affect the free flow of goods in interstate commerce.
In the case of Columbian Stamping & Enameling Co. of Terre Haute, Ind., where a strike caused a shutdown for 4 months in 1935, the company's business was paralyzed during this time. This company receives its raw materials from 20 other States and 85 percent of its products are shipped to 47 States, the District of Columbia, and Canada.
Among the numerous other instances of strikes and threatened strikes, it is important to mention the action of the Board in the Duplex Printing Press Co. case in Battle Creek, Mich. An adjustment was reached in the case before the Board whereby the company accepted the union as the exclusive representative of its employees in the appropriate unit for the purpose of collective bargaining. This case is of especial interest because it illustrates so well the congressional findings of the extent to which industrial disputes burden interstate commerce and the effectiveness of the Board in mitigating or eliminating these disputes. The name of this case is directly linked to an earlier occurrence familiar to all students of labor law. Back in 1913 a labor dispute arose between the Duplex Co. and its employees affiliated with the International Association of Machinists growing out of the company's resistance to self-organization of the workers in its Battle Creek plant. Eventually the dispute spread to other workers engaged in the transportation of the company's products and their installation in other States. That case in 1913 culminated in a suit by the company on the express ground that interstate commerce was being directly burdened and interfered with (Duplex Printing Press Co. v. Deering, 254 U. S. 443). The case before the Board was initiated on a charge by the workers in the same plant in Michigan and affiliated with the same parent organization, the International Association of Machinists. Twenty-two years after the original dispute, the workers were able to establish their rights and through the Board's intervention establish sound and amicable relations with their employers in place of the "more primitive methods of trial by combat” utilized in the earlier difficulties.
In a separate statement, I am submitting more detailed material furnished by the National Labor Relations Board on the effect of labor disputes on interstate and foreign commerce. I will not impose upon the time and patience of the committee to read this in detail, but I will be glad to submit it for the record.
Senator O’MAHONEY. It may be incorporated in the record at the close of your statement.
Mr. GREEN. I have just indicated the extent to which strikes or threatened strikes in the cases cited directly interfered with or affected interstate commerce. In the vast majority of cases such situations arise in corporate business or industrial enterprises, a large portion of whose business is national or interstate. Yet in every case the corporation in question derives its powers and, in fact, its very entity, from a grant made by an individual State, often quite remote from the principal place of the corporation's business.
But the part played by labor disputes in their effect on interstate commerce is only a portion of a vastly more comprehensive and fundamental situation with which we are faced. For, after all, it is the wage earner who produces and performs services for these interstate corporations upon whom falls the real responsibility for the very flow of such commerce. His wages, his working conditions, the hours of work in which he is employed; all of these constitute an integral part of a single process of production and distribution of goods and services which make up commerce itself.
The framers of the Constitution gave the Federal Government the power to regulate commerce among the States. Chief Justice Marshall himself defined this authority by stating explicitly that only the completely internal commerce of a State which is completely within a particular State and which does not affect other States is excluded from the purview of the Federal Government (Gibbons v. Ogden).
We must remember, however, that America of John Marshall's day was still a simple world with simple domestic economy. More than 90 percent of its people were plain country folk, farmers and villagers managing their local affairs in their traditional way. This was even more true in the day in which the commerce clause of the Constitution was written into that instrument. In 1790—3 years after the signing of the Constitution—the total population of the United States numbered 3,929,000. This is equal to less than onehalf of the population of New York City today. Since that time America has experienced gigantic growth and expansion into the foremost industrial nation of the world with 130 million citizens. During its years of growth it has undergone several radical changes in its structure. From a basically agricultural economy dominated by growing trade and small manufacture, the Nation witnessed the rise of an industrial society in the four decades between the 1840's and the 80's. This was the period in which individual initiative and competition as the organizing principles of economic activity came to fulfillment. In the period between the 80's and the decade preceding the World War, there was a rapid movement for industrial consolidation and the growth of monopoly. The cleavage between the “independent” competitive business and the noncompetitive enterprises cut deeply into the principles and practices of free competition.
The subsequent years have also witnessed one of the most fundamental shifts in our economic organization. It was a shift from industrial expansion to financial control which placed the giant corporation in the place of dominant institution overshadowing every phase of our existence as a nation. There came complete separation between ownership and control, the latter being concentrated in the hands of management. Diffusion of corporate wealth among the masses of shareholders completely divorced from control in the management, enhanced the power of those responsible for the actual operation of the great business corporation of today.
Let us examine the latest available facts on the distribution of corporate wealth furnished in the preliminary report of the Twentieth Century Fund.
Senator O’MAHONEY. When was that preliminary report issued ? Mr. GREEN. About a year ago, I think.
Senator O'MAHONEY. You are not referring to the more recent release from the Twentieth Century Fund, last week or the week before?
Mr. GREEN. No. This is taken from the preliminary report, and it is so convincing that it appeared to me a good purpose could be served by having it incorporated in the record.
Senator O’MAHONEY. It is not the final report, but an earlier issue?
Mr. GREEN. Out of the total of some 400,000 corporations, 211,000, or 54.5 percent of the total number with assets of less than $50,000 each, own only one-fourth of 1 percent of the total corporate assets. On the other hand, 375 corporations own 56.2 percent of the total corporate wealth of the Nation. We see that the majority control of America't corporate wealth is in the hands of these 375 corporations which constitute less than 1 percent of the total number of corporate enterprises. When we consider that almost 90 percent of our national commerce is carried on by corporations, it becames impossible to deny that corporate revolution is truly upon us.
The Eastman-Kodak Co. may be cited as one example. This is a New Jersey corporation whose largest plant, known as Kodak Park, is located at Rochester, N. Y. The total assets of this company are $168,347,027. Since 1902, through 1935, the total net profits of this corporation amounted to $448,000,000. This corporation owns, controls, and operates some eighty subsidiaries distributed among many States and a number of foreign countries. The scope of its Nationwide organization will be gleaned from the accompanying supplementary statement which contains a summary of the company's operations and lists its subsidiaries.
Senator KING. Are not many of those subsidiaries the result of patents which the owners have acquired, or if they were the inventor's patents, were taken out by the companies, and it was felt that in the interest of economy and the protection of the patents they should have subsidiaries to handle those exclusive patents!
Mr. GREEN. That is probably true. I am not finding fault with that. I am merely pointing out the ramifications of great corporations like the Eastman Kodak Co.
Senator O’MAHONEY. It might be appropriate to make note here of the fact that, so far as the United States is concerned, patents are issued by the Federal Government. In other words, the framers of the Constitution, in their desire to build up a uniform rule for commerce and industry, conveyed to the United States Government and the Congress the power to pass an exclusive patent law.