Senator GORE. What was it?

Miss VAN KLEECK. What was the actual amount?

Senator GORE. Yes. You say it was decreased 19 per cent.

Miss VAN KLEECK. I have not the figures here; but they are obtainable in a table in the bulletin, taken from the United States Census figures. It is the relative percentage that was the vital point here, rather than the absolute figure. (Continuing reading:)

By 1929, or 30 years later, the average yearly earnings had increased over 1849, 431.5 per cent, the value of products per wage earner had increased 651.7 per cent, the value added by manufacture per wage earner had increased 649.9 per cent. The per cent that wages were of the value of the product had decreased 29.2 per cent, and the per cent that wages were of value added had decreased by the same amount, while prices had increased 60.6 per cent.

Here in brief compass is a statistical picture of the failure of purchasing power to keep pace with production. It is not surprising, then, to read to-day the final results of this lack of balance between production and consumption in the figures of declining employment and decreasing income. In its most recent report on "Trend of employment" for December, 1932, the United States Bureau of Labor Statistics shows for manufacturing (including 89 industries) a decline of 12.6 per cent in number of employees compared with December, 1931; and a decline of 27.8 per cent in total pay rolls. The general index for ths 12-month average of 1932 (with 1926 as 100) was 60.1 for number of employees and 41.6 for pay rolls. Senator GORE. State that again, please.

Miss VAN KLEECK. The general index for the 12-month average of 1932 (with 1926 as 100) was 60.1 for number of employees and 41.6 for pay rolls.

Senator GORE. You mean the number of employees had declined 60 per cent?

Miss VAN KLEECK. The index of number of employees had declined from 100 to 60.

Senator WALSH of Massachusetts. Forty per cent.

Miss VAN KLEECK. Pay rolls had declined 59 per cent. This pay roll figure refers not to wage rates, but to the actual total earnings paid to wage earners in these industries.

A further analysis of these earnings showed that the highest per capita weekly wages received in December, 1932, were $33.88 in the newspaper branch of the printing trade, while the following industries had per capita weekly earnings of less than $15: Confectionery, $14.12; cotton goods, $10.39; hosiery and knit goods, $13.15; silk goods, $12.76; men's clothing, $11.41; shirts and collars, $10.67; millinery, $14.72; corsets and allied garments, $14.73; cotton, small wears, $14.58; men's furnishings, $11.05; iron and steel, $12.50; cast-iron pipe, $12.63; hardware, $13.46; plumbers supplies, $13; saw mills, $10.86; millwork, $13.98; furniture, $13.22; turpentine, rosin, $13.59; boots and shoes, $12.76; fertilizers, $13.27; cotton-seed oil, and so forth, $10.44; brick, tile and terra cotta, $12.25; stamped and enameled ware, $14.92; clocks, and so forth, $13.96; chewing tobacco, $13.42; cigars and cigarettes, $12.81; agricultural implements, $14.72.

The index of employment on Class I steam railroads as computed by the Bureau of Labor Statistics from figures obtained by the Interstate Commerce Commission, was 58.1 as an average for 11 months of 1932, the low point for the whole series having been 55 in August,

and 55.9 in November. It is noteworthy that this index reached 100 only in two years in the last 10-104.1 in 1923 and 100 in 1926. Comparison with car loadings, which before 1929 sustained themselves better than the number of employees, would show that part of this decline of employment on the railroads was due to technological unemployment; but in these last few years it may be regarded as a general reflection of decrease in interstate commerce. This, of course, is also an indication of decreases both in production and in the distribution of articles in interstate trade.

As to the declining income of the farmer, no statistical evidence is needed here, but as we have quoted the figures for December, 1932, in comparison with 1931 for manufacturing, it may also be of interest to note in the report on wholesale prices issued by the Bureau of Labor Statistics for December, 1932, that the index of the price of farm products at wholesale reached in that month the record low point of 44.1 compared with 55.7 in December, 1931. In a report of the same date on retail prices and cost of living, the index number of the principal articles of food at retail for December, 1932, was 98.7 (with 1913 as 100) in comparison with 114.3 for December, 1931.

We might go on and on with statistics for the different industries, but the point is probably sufficiently made, that, despite many inadequacies in the statistics of wages and farmers' income, the fact can not be doubted that in all our basic industries purchasing power is out of line with productive capacity to a degree which amply justifies the description of our present economic situation as "starving in the midst of plenty." No wonder that a mounting burden of debt has depressed the status of farmer, wage earner, and the gainfully employed in many other occupations, to a level which still further disturbs the necessary balance between the consumer's purchasing power and capital investments in production.

It should be pointed out here that not since the war have we had any study of standards of living. The figures published regularly by the Bureau of Labor Statistics on cost of living are quite different. The earlier studies of standards of living are used as a means of weighting the articles entering into typical family budgets, and the costs are determined on this basis. They show what buyers pay when they have income with which to buy; they do not show the actual standards or levels of living as they exist at the present level of wages and under the present conditions of part time and unemployment. An actual picture of the present level of living of workers, including part-time employees, and those who are unemlpoyed, does not exist; but it would be alarming in what it would indicate about the undermining of standards and of purchasing power.

This, then, is the basic fact in the present industrial depression—a decrease in the national income due to decrease in production which in turn has arisen from the lack of distributed and sustained purchasing power.

If this be a true analysis no remedy will be adequate which is not directed toward the raising of standards of living by the full utilization of productive capacity. Only so can the national income be increased or even sustained. Unless it is sustained it is idle to talk about balancing the Budget of the Government, or solving the problems of taxation.

159450-33-PT 7-5

If we have a declining national income, where can rising taxes come from, and how can you balance the Budget of the Government which, on the other hand, in our complicated civilization, has to give additional services to people or else we go down still further in our standard of living?

Moreover, financial arrangements and banking policies can not be sound unless they are controlled as instruments for the planned distribution of wealth, that is, the planned distribution of purchasing power. We have begun to discover that total wealth is meaningless, unless that wealth is distributed and used. That is merely economics, and not a social theory.

Nor can agreements to restrict production in order to maintain or raise prices for one group of producers be permanent or successful, even in accomplishing their own short-sighted purpose, if the purchasing power steadily goes down.

In short, the central problem to-day is to restore earning power to all the gainfully employed, and to establish security of income for those who work. In contrast, policies of deflation and of restricted production for price maintenance have the opposite effect, as have many of our international arrangements tending to depresss our total production because of the lack of a market for the exportable surplus.

If as a nation we seriously undertook to plan economic organization so as to raise standards of living in proportion to productive capacity, we would have to make considerable changes in economic organization, and particularly to study the functioning of corporate ownership, in the present development of the industrial and financial structure of the United States. Pending this fundamental action which our technological development demands, it is possible, however, to face in the direction of social economic planning which can have no other foundation than the raising of standards for labor.

In our present economic organization, efforts to maintain standards for labor have taken two forms: (1) Legislative action; (2) collective agreements between organizations of workers and the management in the industries in which they are employed. The second method, collective agreements, represents the field of action of the trade-unions. Legislation bears upon it in so far as it restricts or frees the tradeunions to function in winning sufficient power to make and maintain labor agreements. Into this question it is impossible to enter here further than to call attention to the constructive program put forward by the American Federation of Labor in its annual convention last November. The organized-labor movement can and must function to maintain and to raise standards of living by the twofold means of safeguarding wage-earners' security of income through wages and of decreasing the length of the working day. To make it possible for the trade-unions to function a radical change of policy must occur in the large corporate industries of the country, which have generally opposed what is called "recognition of unions," substituting for them the so-called "company union" and the "yellowdog contract."

As to the method of legislation to maintain labor standards, it is of course complicated for the United States by the limitations upon the Federal Government's power to enact labor laws. In general this is a function of State governments. The disadvantages of different legislation in different States are quite as keenly felt to-day by the

management of our industries as by labor, in those trades and occupations which are found in many States.

Talk to some of the cotton manufacturers, who wish that there were a uniform standard that their competitors would have to maintain. Talk to any of the producers who are worried over the toboggan slide in prices, bearing little or no relation to their costs of production, but with no apparent stopping place. In general, this need for interestate cooperation is recognized.

Perhaps we shall soon begin to see the necessity for a constitutional amendment which will give power to the Federal Government in cooperation with the States to establish basic standards. Pending such a change perhaps some form of agreement between States with the Federal Government acting as a standardizing agency, might be developed to prevent the present lags through the failure of some States to keep pace with those in which the same industries are competing.

The message of the Governor of New York State to the legislature published to-day, on the minimum wage for women and minors calls attention to cooperation between several industrial States which is already under way, and in which the Federal Government may have an opportunity for leadership in achieving uniformity in our basic. standards.

The Department of Labor is the agency through which the Federal Government has the opportunity to deal with labor standards. The following immediate steps are suggested as feasible if as a nation we are in earnest in our intention to adopt a new policy directed toward economic security for wage earners:

1. Give to the incoming Secretary of Labor the responsibility and the appropriation necessary for a rounded program within the scope of the department's purpose and powers. The act creating the department declared that its purpose "shall be to foster, promote, and develop the welfare of the wage earners of the United States, to improve their working conditions, and to advance their opportunities for profitable employment." In general its relation to State departments of labor is to give leadership and coordination in fact finding for current statistical purposes; in investigations upon which the States may base legislation; and in the setting up of standards for industrial policy and practice.

Of its budget of $12,900,000 (round numbers) for 1932-33 $9,450,000 was for salaries and expenses of the Bureau of Immigration, with an additional $30,000 for immigration stations and $975,000 for the Bureau of Naturalization. Thus the amount available for the direct service in maintaining labor standards as distinct from the enforcement of immigration and naturalization laws is somewhat under $2,500,000 (72d Cong., hearing before subcommittee of House Committee on Appropriations, bill for 1934, p. 1.) In the report of the Committee on Appropriations for 1934, the Immigration Service alone was recommended for increase; all other divisions suffering a decrease. Moreover, even in the past year limitations on the printing budget result in withholding from the public certain valuable studies which are pertinent to the present situation.

In contrast to this action, recommending decreased appropriation, there is needed a more vigorous program of fact finding and publication to give stimulus to the labor legislation programs of the States.

2. New Federal legislation is needed for a comprehensive and effective Federal State employment service, such as has been proposed in the bill introduced into successive sessions of Congress by Senator Wagner. Such an employment service would be a means of organizing the labor market and preventing the waste involved in fruitless search for employment where none exists, or in the inability of industries seeking workers to find those available without delay. Moreover such a service, through its recording of opportunities for employment and applications for work, would serve as a barometer.

3. The Bureau of Labor Statistics needs a larger appropriation than has been recommended for this year if it is to fulfill its obligations under the law, particularly in gathering current statistics of the trends of employment and earnings. A very vital need is to measure in this way the effect of a public works program upon employment and earnings. In addition special studies bearing upon such vital problems as technological unemployment are needed, besides investigations of standards of living and the amplification and extension of current data on wholesale and retail prices and cost of living.

4. Because of the special problems of women in industry, their generally lower wages as compared with men, and the necessity for safeguards for an economically disadvantaged group, the Women's Bureau was created to carry out the department's purposes for women. It has cooperated closely with the States, but its investigations have had a broader scope than is possible for any one State. The industrial depression has tended toward abnormally low wages and long hours for women, with consequences for the labor standards for men. At this time the program of the Women's Bureau is especially needed, and an emphatic protest should be made against the opinion of the Committee on Appropriations which stated that it

feels that a large part of this work should now be done by the States; the justification for the national Government entering this field being to stimulate the States to make these studies. (72d Cong., 2d sess., House of Representatives, Rept. No. 1890, p. 34.)

5. The Children's Bureau is also suffering a reduction despite the urgent importance at this time of Nation-wide comparable studies for the protection of children in so far as it is possible to protect them against the devastating effects of unemployment.

6. In the office of commissioner of conciliation, the Department of Labor has a mediating service for industrial disputes which is susceptible of much greater development in the just settlement of grievances arising in the relationship between labor and management. If wages, hours, and other conditions of labor were made the subject of collective agreement between organized workers and management on a much more extensive scale than at present, it would be sound public policy for the Department of Labor to extend its conciliation service as an aid in the administration of these collective contracts. Without these collective agreements the need is all the greater for disinterested mediation for the protection of labor standards.

Such a program, going as far as the Federal Government can in leadership in investigations, and in the formulation of standards on which the States can base their legislation, with perhaps some very much more definite concurrence between the States and the Federal Government as to the standards to be embodied in labor legislation,