of wage under the Walsh-Healey Act was to adopt the provisions of the Bacon-Davis Act which already applied to all construction contracts and which said that the rates should be determined on the basis of the rates paid in the city, town, village, or the civil division—a very

narrow area.

Senator HILL. In the particular locality, using that word "locality" in its common acceptance?

Mr. WALLING. Except, Senator, that the word "locality" was not used.

Senator HILL. What word did they use?

Mr. WALLING. They used "city, town, village, municipality, or other civil subdivision." The word "locality" was not used, which meant of course that in the town of X, if a base was to be established, the rate was determined on the basis of the wages prevailing in X. No consideration was given to the wages paid in Y. In the Walsh-Healey Act, Congress was confronted with that possibility or the possibility at the other extreme of having a uniform rate for the country in all cases, which would clearly have been undesirable and which has been so recognized by administrative practice, where differentials have been determined, so some middle ground was adopted and the word "locality" was used, admittedly a vague, general, and indefinite word that has to be interpreted in each case. The Department has taken the view that had Congress intended to limit the determination of the wage to the city or the town where the work was being performed it would have said so, but having used the larger word, it intended that some larger geographical area should be taken into account.

So we have attempted to apply that in each industry on the basis of the facts and the needs of that industry.

Senator HILL. This is off the record.

(Off the record.)

Senator HILL. You list six regions in the steel industry?

Mr. WALLING. Yes.

Senator HILL. Is the State of Pennsylvania all in one region?

Mr. WALLING. Yes.

Senator HILL. What other territory is in that region?

Mr. WALLING. Well, in general it is the northeastern States which

are generally described as the Pittsburgh district.

Mr. ROBERT B. THOMAS (of New York City). Senator, may I interpose?

Senator HILL. Whom do you represent?

Mr. THOMAS. Here at this moment I represent no one. I represented as one of the counsel, six steel concerns who are at present before the Court of Appeals of the District of Columbia in the case known as the Lukens Steel Co. against Perkins.

That wage determination puts in one district substantially all of the States east of the Mississippi and north of the Potomac and Ohio at 622 cents.

Senator HILL. It is what we call in railroad rate-making language, "official territory," is that right?

Mr. THOMAS. That is right.

Senator HILL. I would suggest

Mr. WALLING (interposing). I have the various rates for the various localities right here.

Senator HILL. Suppose you put them in the record.

Mr. WALLING. 45 cents applies to the following States: Louisiana, Arkansas, Mississippi, North and South Carolina, Florida, Oklahoma, Texas, Alabama, Tennessee, Georgia, Virginia, and West Virginia, except the counties of Hancock, Brooke, Ohio, Harrison, Monongalia, and Marshall.

Then the next region is 60 cents, consisting of Washington, Oregon, and California, the Pacific coastal States.

The next locality at 60 cents is, Montana, Idaho, Nevada, Wyoming, New Mexico, Utah, Colorado, and Arizona, which roughly would be the Rocky Mountain States.

In the following States 581⁄2 cents: North and South Dakota, Nebraska, Kansas, Minnesota, Iowa, Missouri, and the area in and about East St. Louis, Ill., just across the river from St. Louis. I might point out that not in every one of those States is there a steel mill.

Senator HILL. I understand.

Mr. WALLING. 62%1⁄2 cents in Wisconsin, Illinois, with the exception of the East St. Louis area, Michigan, and Indiana.

Another locality also at 62%1⁄2 cents consisting of Ohio, Pennsylvania, Delaware, Maryland, Kentucky, New Jersey, New York, Connecticut, Rhode Island, Massachusetts, Vermont, New Hampshire, Maine, and that portion of West Virginia comprised within the counties of Hancock, Brooke, Ohio, Marshall, Harrison, Monongalia, and also the District of Columbia.

Senator HILL. Are you in accord with that, Mr. Thomas?

Mr. THOMAS. Yes. Mr. Walling said the Pittsburgh district, and that is why I rose and asked to be allowed to make a statement.

Mr. WALLING. I want to point out also that no manufacturer is subject to the provisions of the Walsh-Healey Act unless he wants. to be. He is not forced by the Government to make a contract if he does not want to, so that by the terms of this contract he has expressed his willingness to comply with its provisions.

The Government is not required to deal merely with the lowest wage paying employer, who is maintaining the poorest labor standards, and consequently the Government does not, so that the obligation which may obtain in some industries, particularly those paying over 40 cents an hour, which have a higher minimum wage than a 25-cent rate, the basic rate applicable under the Wage and Hour Act, is a reasonable one which they are privileged to accept or not.

I do not mention such matters as the yet undetermined constitutionality of the Wage and Hour Act, the competitive factor on Government contracts, which is a very decided matter and which means that the labor provisions which are applicable, or the absence of any labor provision may well decide who gets the contract with the Government, whereas in private industry many individual orders are being obtained by different people after competition. In the case of a Government order, everybody is competing for the same order. In addition to the fact that the Fair Labor Standards Act does not have any jurisdiction to fix wages over 40 cents an hour, it applies also only to interstate industries. Nobody knows exactly what constitutes an interstate industry. That remains for the courts to determine case by case as they arise under the Fair Labor Standards Act. The Walsh-Healey Act has no reference to the interstate or intrastate character of a bidder with the Government, but the obligation arises contractually through the voluntary agreement of the contractor to

deal with the Government on the terms which the Government suggests, and which he is free to reject if he does not want to contract, and regardless of whether he is subject to the interstate coverage of the Wage and Hour Act or not.

I think those differences between the two statutes ought to be kept in mind, because it was apparent from the testimony this morning that there was considerable confusion in the minds of the witnesses as to the coverage of the respective statutes.

I do not know that there is anything else that I want to point out to the committee at the present time, except to suggest that if the amendments which we have suggested to the original bill and which we think are by way of improvement and clarification, can be improved we will be very glad indeed to accept such suggestions, and if the suggested language on subcontractors is not completely clear, any reasonable language which is suggested, which carries out the general objective, will meet with the approval of the Department of Labor. Senator HILL. Senator Taft, are there any questions? Senator TAFT. No.

(At this point Senator Walsh entered the hearing.)

Senator HILL. I want to see us maintain good wages, but I certainly would not want to see the Government do anything which would encourage breaking down the wage scales, and on the other hand, I have been impressed by this testimony from these little fellows, and I do not want to see us do anything that would encourage or strengthen the monoply or the concentration of this production all in the hands of a few great big fellows.

Senator Walsh. Mr. Walling has just about concluded his statement. Have you any questions?

Senator WALSH. I have not any questions. Have you heard all of the witnesses?

Senator HILL. We have, unless some witnesses have come in. I will ask, does anybody else want to testify?

(No response.)

Senator WALSH. I suggest then that we adjourn subject to the call of the chairman, and that we get this report as soon as possible so that we can study it for decision upon these various amendments.

Any statements received by the committee after today's adjournment will be filed with the committee or made a part of the record. (Whereupon, at 2:55 p. m., the hearing was adjourned subject to the call of the chair.)

(Statements received, as above referred to, were made a part of the record, as follows:)

STATEMENT OF O. J. CONDON, TAKOMA PARK, MD.

I am representing the National Association of Ornamental Metal Manufacturers, the Southern Association of Ornamental Metal Manufacturers, the Ohio Association of Ornamental Metal Manufacturers, and the Pennsylvania Association of Ornamental Metal Manufacturers.

To identify myself, I may say that I am the executive secretary of the abovementioned organizations, and it is in this capacity that I am making this statement. I have had correspondence with various other organizations in this industry, and without exception of any kind the statements which I will make will reflect the opinions and feelings of the members of these organizations as well as those of the organizations which I specifically am authorized to represent at these hearings.

The four organizations which I represent, mentioned above, have requested that I appear before your honorable body to give very briefly and respectfully the substance of the opinions and information brought out at recent meetings of these

organizations, particularly the effect which the members of these organizations anticipate the proposed amendments to the Walsh-Healey Act would have upon our industry.

The Census Bureau, in its Census of Manufactures for 1937, includes members of our industry under a number of different classifications. Some of them are included under "Forgings, iron and steel"; some under "Gray iron castings and malleable iron castings"; some of them under "Gray iron and malleable iron foundries"; some of them under "Metal door, shutter, window, sash, and frames, etc."; some of them under "Stamped and pressed metal products"; some of them under "Aluminum products"; some of them under "Steel roof and rolling mill products"; some of them under "Sheet metal work, not specifically classified"; some of them under "Nonferrous metals"; some of them under "Wrought pipe"; some of them under "Wire and wire products"; and so forth.

But the census classification which includes the majority of our members and possibly the majority of their products is industry No. 1122, revised "Structural and ornamental metal work," and under this classification it is shown that in the industry there were 1,132 shops in 1937, which employed a total of only 30,814 wage earners (average for the year, with a total pay roll of only $53,898,058. So you see that our industry is essentially "small business"; that is, it is made up of small shops locally owned and our plaint, therefore, will be the plaint of the "small-business men.'

If there is one complaint which is heard at our meetings more than any other, it is the tremendous amount of clerical and routine labor required by the various governmental bureaus, forms by the hundred to be filled out which require the searching of records, etc., tax reports, questionnaires of the Bureau of the Census, questionnaires of the Department of Commerce, etc.

We already have in addition to the Walsh-Healey Act, the Bacon-Davis Act, the Fair Labor Standards Act of 1936, and the eight-hour law of 1912, which fix minimum wage and hour standards for Government work. The WalshHealey Act, even as at present constituted, is largely duplicating and confusing, and if extended in the manner contemplated by the proposed amendments, would be just that much more irksome or irritating to the small-business man without any comparable return to society in the way of protection to the underpaid worker or without any proportionate compensation to the Government in respect to Government work.

Our membership consists roughly of two rather distinct classes of manufacturers in respect to the Walsh-Healey Act:

(1) There is that group of bronze manufacturers which for the most part will do business direct with the Government as principal contractors, and when this is the case, their contracts will usually amount to more than $2,000; in fact, in the majority of instances, will amount to more than $10,000, though, on occasion, particularly on the smaller jobs, they will be subcontractors.

(2) The other group of our members comprises the majority of our members. They are the manufacturers producing architectural, structural, ornamental, and miscellaneous iron and steel and are usually subcontractors.

So I would like to divide my discussion and treat first with our members who are usually principal contractors, and then with the larger group of our members who are usually subcontractors, and in this discussion I will presume to speak for the industry as a whole.

In respect to the first group, then, our members who manufacture ornamental bronze, aluminum, and other nonferrous metals, all of such members (and we have as members practically all of the important nonferrous architectural and ornamental manufacturers in the country who supply such work to the various governmental departments) have labor contracts, most of them with an affiliate of the American Federation of Labor, but a substantial percentage with an affiliate of the Congress of Industrial Organizations. At any rate, all of these labor contracts specify a minimum wage (among many other things, including hours, conditions of employment, etc.).

Then, of course, this entire group comes under the Bacon-Davis Act, under the eight-hour law of 1912, under the Fair Labor Standards Act of 1938, and in respect to contracts over $10,000, under the Walsh-Healey Act as now in force. In other words, we have a multiplicity of wage and hour complications already, and the proposal to reduce the figure above, over which the WalshHealey Act takes jurisdiction, to $2,000 would add to this multiplicity. In fact it is said that the Government would save money on its purchases if it were to simplify matters for this group of our industry, instead of increasing complications. At the present time practically all bids received by the Government on nonferrous architectural and/or ornamental products vary anywhere from 10 to 30 percent, and this variation is due largely to these various labor complications,

though, to be sure, there are many other factors involved, such as freight rates, and so forth. Further, in regard to this first group of the industry who, as I have stated, are normally principal contractors on this Government work, the proposed amendments would hold them responsible for any violation of the act by their material suppliers, subcontractors, and would thus saddle them with the additional responsibility of policing all of their suppliers where subcontracts amounted to more than $2,000, and there is a question as to whether this provision would include certain individual subcontracts in excess of $2,000 or whether, if the subcontractor had several contracts which altogether totaled $2,000, he would come under the provisions of the act and therefore become a contingent responsibility of one of our members. This policing responsibility would add materially to the production costs and multiply the clerical burden which the Government already imposes and which already is so onerous as to force a large group of the members of our industry to refuse to bid on any Government work.

On behalf of this group of our members, particularly which, as I have stated, includes all the important shops in this category in the industry, therefore, we urgently request that the committee give consideration to the outright repeal of the Waish-Healey Act on the grounds (1) that its valid objectives have been accomplished in other laws in force and that (2) the unnecessary burden imposed by the act as now in force, which would be greatly increased by the proposed amendments, is out of all proportion to any benefits to be derived either by the unorganized worker or otherwise.

In respect to the second group of our members, the ornamental and miscellaneous iron shops of the country, this group is composed practically entirely of subcontractors in respect to the present Walsh-Healey Act, and would continuə to be subcontractors under the act as would be revised by the proposed amendments. This entire group now comes under the provisions of the Bacon-Davis Act, of the eight-hour law of 1912, the Fair Labor Standards Act of 1938, which have different provisions in respect to minimum wages, hours of employment, and so forth, and much that has been said above with respect to the larger shops applies equally to this larger group of smaller shops. There is a tremendous number of these shops employing eight or less men where the proprietor attempts to do most of the clerical work with the assistance of members of his family, so that one can readily appreciate how burdensome are these various questionnaires and bureau red tape and how confusing are all these various legal provisions respecting their labor on Government projects.

To reach down into this group and include every subcontractor whose contract amounts to more than $2,000 would just add to the complexities of life for these small-business men and would do little if any good in view of the fact that the real intent of the law is already accomplished by the Bacon-Davis Act, the eight-hour law of 1912, and the Fair Labor Standards Act of 1938.

man.

There is much discussion these days of simplifying matters for the small-business Our members, particularly our smaller members, continually complain of the multiplicity of clerical work required by the various governmental departments already and especially on all Government work. This is a case where continual irritation is causing a great deal of unrest in the country and we very earnestly suggest that the committee weigh very carefully just what it is intended to accomplish and examine existing statutes to see if those objectives are not already amply provided for before they take any action to make matters worse.

MANUFACTURERS' ASSOCIATION OF NEW JERSEY,

Hon. ELBERT D. THOMAS,

Trenton, N. J., May 11, 1939.

Chairman, United States Senate Committee on Education and Labor,
Senate Office Building, Washington, D. C.

DEAR SIR: May we invite your thoughtful consideration of the enclosed resolution, unanimously adopted at the twenty-fourth annual convention of our association, on May 6, with respect to certain proposed amendments to the WalshHealey public-contracts law.

We understand that a subcommittee of your committee, under the chairmanship of the Hon. David I. Walsh of Massachusetts is about to conduct hearings on these proposed amendments and would appreciate your courtesy in causing the enclosed resolution to be entered on the record as expressing the opinion and opposition of our association to these proposals.

Yours very truly,

W. C. BILLMAN, Secretary and Treasurer.