[Enclosure: Resolution] AMENDMENTS TO THE WALSH-HEALEY PUBLIC CONTRACTS LAW Be it resolved, That the Manufacturers' Association of New Jersey urges rejection of the pending proposals (S. 1032 and H. R. 3331) to broaden the scope of the Walsh-Healey public-contracts law so as to permit governmental fixation of wagehour standards of contractors and to include subcontractors, selling more than $2,000 worth of goods to the Government; also to include nonprofessional services; to levy double and treble wage penalties for violations of such standards; to retain the 3-year blacklist of violators, etc. We believe these proposals, if enacted, would debar many hundreds of small industrial and business concerns from bidding on, or sharing in, Government supply contracts; greatly increase the costs of goods and services under private as well as Government contracts; vest dangerously broad powers in the hands of departmental officials and seriously handicap the pending expansion of national defense. (Unanimously adopted at the 24th annual convention of the Manufacturers' Association of New Jersey, Atlantic City, N. J., on May 6, 1939.) Hon. DAVID I. WALSH, ST. LOUIS CHAMBER OF COMMERCE, Member, Committee on Education and Labor, Senate Office Building, Washington, D. C. DEAR SENATOR: Your committee is holding hearings on Senate 1032 providing for amendments to the Walsh-Healey Act. Our board of directors has carefully considered this bill and recommends that it be disapproved. The bill would further extend the encroachment of the Government in private business by reducing the minimum contracts under the act from $10,000 to $2,000 and by bringing subcontractors under the act; furthermore, the inclusion of labor clauses as a part of the contract is needless because present labor laws pretty thoroughly cover this subject, especially the wage-and-hour law. We urge your committee to disapprove this bill. Sincerely yours, THOMAS N. DYSART, President. NESTLE'S MILK PRODUCTS, INC., Senator DAVID I. WALSH, Washington, D. C. DEAR SENATOR WALSH: We understand that Senator Alexander Wiley of Wisconsin has offered an amendment to bill No. 1032 which would exempt dairy products fron the provisions of the original Walsh-Healey Act and the proposed Walsh amendment. We wish to urge you to give favorable action upon the Wiley amendment. This amendment, obviously, is of great interest to us because in the handling and processing of evaporated milk an extremely perishable product is used. We feel that the evaporated milk industry differs in no respect from the fluid milk, ice cream, cheese, or butter industries, the products of which are recognized by the Secretary of Labor as exempt under the Walsh-Healey Act. Especially in this warm climate we have found that milk needs careful and unusual attention for the processing of evaporated milk. Milk must be handled under very careful and sanitary means to prevent loss and deterioration of the milk on the farm, during deliveries by the farmer, and on to the sterilization of the product in a hermetically sealed container. Because of the perishability of milk, it is necessary that it be handled in a sanitary, skillful, and continuous manner until the full day's supply is processed, and it cannot be neglected until the day's run has been taken care of. If the Wiley amendment is not included in bill No. 1032, the manufacturer of evaporated milk may be so hampered as to affect the farmers' market for his product. We anxiously urge that you and the Senate Committee on Education and Labor report the Walsh bill (S. 1032) to the Senate with the Wiley amendment incorporated therein. Yours sincerely, A. ISAACSON, Superintendent, Nestle's Milk Products, Inc. INDUSTRIAL UNION OF MARINE AND SHIPBUILDIng Workers of AMERICA, Camden, N. J., May 22, 1939. (Re: S. 1032.) Senator DAVID I. WALSH, Senate Committee on Education and Labor, Senate Office Building, Washington, D. C. DEAR SENATOR WALSH: We understand you are the sponsor of and the chairman of the subcommittee considering the above-numbered bill relating to amendments to the Walsh-Healey Act. Our union has a very considerable interest in this legislation because of its possible effect on the workers in the shipbuilding and repair industry, and we therefore request that your subcommittee consider our enclosed statement and make it a part of the record in connection with this bill. pvg/h Very sincerely yours, PHILIP H. VAN GELDER, STATEMENT OF INDUSTRIAL UNION OF MARINE AND SHIPBUILDING WORKERS OF AMERICA IN SUPPORT OF S. 1032 Three of the largest and most important shipyards in the country, yards that subsist almost entirely upon Government contracts, have been found guilty of unfair labor practices by the National Labor Relations Board. These yards are the Electric Boat Co., Groton, Conn., the Newport News Shipbuilding & Dry Dock Co., Newport News, Va., and the Fore River Plant of the Bethlehem Steel Corportation (shipbuilding division), Quincy, Mass. The Electric Boat Co. accepted the decision of the Board, and took the remedial measures ordered in the decision, while the other two companies appealed the Board's decisions and orders to the Federal courts, where litigation is still in progress. A. ELECTRIC BOAT The Electric Boat Co. is the only private shipyard in the country that constructs submarines. It controls all the basic patents for this type of construction, and no other private yard is able to compete with it in this work, though a limited number of submarines are constructed in the Government navy yards. At the present time it has contracts for the construction of seven submarines for the United States Navy, at a total price of $21,563,000. It will unquestionably be awarded contracts for at least four more submarines this year as its share of the annual Navy construction program, just as it has won contracts each previous year since the naval expansion program was inaugurated in 1933. A strike occurred at the Electric Boat yard in February 1937, called by the Industrial Union of Marine and Shipbuilding Workers on the issues of recognition for collective bargaining, discriminatory discharge, and maintenance of a company union. Subsequently, June 2, 1938, the National Labor Relations Board found the company guilty of the unfair labor practices that caused the strike and ordered the reinstatement of the strikers, disestablishment of the company union, and back pay for the man discriminatorily discharged. The company complied with the decision and order. However, while the strike was still in progress, in the spring of 1937, the United States Navy Department awarded the Electric Boat Co. contracts for the construction of two more submarines, thus inferentially approving of the company's antilabor tactics and becoming an accomplice with this corporate malefactor in violating the National Labor Relations Act. B. NEWPORT NEWS The Newport News Shipyard in Virginia is one of the three largest in the country, and employes an average of 6,000 men. On August 9, 1938, as result of charges brought by the Industrial Union of Marine and Shipbuilding Workers of America, the Newport News Shipbuilding & Dry Dock Co. was found guilty of unfair labor practices and ordered by the National Labor Relations Board to disestablish its company union. The company refused to accept the decision or comply with the order, and appealed to the United States Circuit Court. On February 28, 1939, the Circuit Court of Fourth District sustained the Board's finding of unfair labor practices, but modified the order to disestablish the company union. The Board has therefore appealed to the United States Supreme Court. Newport News has total contracts at the present time from the Navy Department and Maritime Commission aggregating more than $150,000,000. Of this total volume, $98,680,000 worth of contracts have been awarded to the company since the Board's decision of August 1938 wherein it was found guilty of unfair labor practices under the National Labor Relations Act. The Maritime Commission has granted the company contracts for the construction of six passengercargo vessels, and the Navy has awarded it contracts for a battleship and an aircraft carrier. Thus do two agencies of the Federal Government subsidize a breaker of Federal law. C. BETHLEHEM FORE RIVER The Fore River Shipbuilding Plant of Bethlehem Steel Corporation is another one of the "Big Three" shipyards. After almost 3 years of litigation, during which the corporation carried the Labor Board to the United States Supreme Court in an effort to prevent it from conducting hearings, the Board found, on February 10, 1939, that the corporation was guilty of unfair labor practices in fostering a company union in its Fore River Plant. The corporation refused to accept the decision or comply with the order of disestablishment and appealed to the United States Circuit Court for the First District, where the case is now pending. The Fore River shipyard at present has Navy and Maritime Commission contracts for $130,000,000 worth of ship construction. Of these contracts, those for two cruisers, at about $13,000,000 each, have been awarded by the Navy Department since the Board's decision of February 10, 1939, and since Bethlehem's subsequent decision to refuse compliance with the Board's orders. Here again, violation of the law has been no bar to an employer's participation in Government largesse. D. TODD SHIPYARDS In addition to the above, the Todd Shipyards Corporation, which is the largest single ship repair firm in the country, was found guilty of violation of the National Labor Relations Act in a decision by the Board on February 1, 1938, and ordered to reinstate a large number of strikers with back pay and to disestablish its company union. While the Todd Corporation does not hold any contracts directly from the Federal Government it does a large volume of business in repairing and reconditioning ships whose operation is subsidized by the United States Maritime Commission. Needless to say, the Board's decision and orders against the Todd Corporation, with which the corporation has not yet complied, have not resulted in the cancelation or diminution of any of its business with Government subsidized shipping companies. E. EFFECT ON SHIPBILDING AND REPAIR INDUSTRY GENERALLY Because of the size and influence of the shipbuilding and repair concerns above cited the whole picture of industrial relations in this industry has been blighted by their continued defiance of the principles of the National Labor Relations Act which has extended over the past 3 years. Many smaller shipbuilding and repair concerns which would gladly have recognized and dealt with organized labor under favorable circumstances have been constrained to follow the lead of the big corporations above named, with the result that half the shipbuilding and repair industry of the country, which is almost entirely financed directly or indirectly by the United States Government does not have genuine collective bargaining. F. CONCLUSION Under S. 1032 it is proposed to amend the Walsh-Healey Act so as to make it possible to put on a blacklist for 3 years those contractors who have been found in a final adjudication by the appropriate court to have violated the basic principles now incorporated in the National Labor Relations Act. We strongly feel that this guarantee should be given to the workers in our industry. As things stand at present, even if the United States Supreme Court sustains a decision of the Board and finds a shipbuilding corporation guilty of unfair labor practices, there is no penalty assessed against the corporation except to correct its conduct in the future and make restitution to any individual workers discriminated against in the past, which may only be a trifling sum in dollars and cents. The source of income, that is, Government contracts, has not been interrupted in the past and will not be in the future. However, under the proposed amendment to the Walsh-Healey Act, as we understand it, a shipbuilding corporation would be in danger of being blacklisted by the Government for 3 years in the matter of awarding contracts, and would thereby have a powerful motive for complying with the spirit of the National Labor Relations Act. And we may assume that a great measure of the opposition to organization and genuine collective bargaining would disappear from the industry. We therefore urge the adoption of S. 1032 with the above-mentioned clause by Congress. STATEMENT OF CENTRAL IRON & STEEL Co., HARRISBURG, PA., PROTESTING AGAINST PENDING BILL S. 1032 TO AMEND THE PUBLIC CONTRACTS ACT Hon. DAVID I. WALSH, MAY 22, 1939. Chairman, Subcommittee of the Senate Education and Labor Committee, Central Iron & Steel Co. desires to protest against the passage of the pending bill S. 1032 to amend the Public Contracts Act. Our company is located in Harrisburg, Pa., and is one of the small producers of steel products in that we operate but a single plant, manufacture only one product, steel plates and sheets, and are a nonintegrated and wholly independent company, owning no raw materials and being compelled to purchase all of these materials in the open market at comparatively high freight rates. There are two small nonintegrated steel plants in the city of Harrisburg, our own and the Harrisburg Steel Corporation. The minimum wage rate in these plants is 54 cents per hour. This minimum wage is at least 20 percent higher than the minimum wages in most other industries and activities in this locality, which activities include railroads, utilities, State and local Government operations and all other manufacturing industries. For example, the Pennsylvania Railroad and the Reading Railroad, which adjoin and serve our plant, pay a minimum or common labor rate of 45 cents an hour. Our minimum wage rates are substantially the same as the minimum wage rates of all steel plants east of the so-called PittsburghChicago area. In the passage of the original Walsh-Healey Act it was the intent of Congress to eliminate from participation on Government contracts industries paying sweat-shop or subnormal wages, but it was never intended that the Department of Labor should arbitrarily set a wage rate for the steel industry of 62% cents an hour in a locality where the prevailing minimum steel wages were considerably lower than this, but in most cases higher than wages paid in other industries. Therefore, the minimum wages of the small nonintegrated steel plants in this eastern district can by no means be construed as sweat-shop or subnormal wages. The recent arbitrary fixing of minimum wages in the eastern district by the Secretary of Labor at 621⁄2 cents per hour to bring them up to a level with the minimum wages in the Pittsburgh and Chicago districts makes it impossible for the small nonintegrated companies in this district to pay these wages and bid on Government contracts as principal contractors. To raise our minimum labor rate to 621⁄2 cents per hour means that all employees above this common labor group must have their wages increased accordingly. For over 50 years there has existed and been maintained a recognized differential in steel ndustry wages as between the Pittsburgh-Chicago area and the eastern district, in which latter district the city of Harrisburg and our plant are located. The inevitable result of the passage of these proposed amendments, in conjunction with the erroneous and arbitrary wage fixing by the Secretary of Labor, might be to put out of business most of the small nonintegrated steel companies in the eastern district, employing some 25,000 men, and turning over the business of these companies to a few large integrated plants, which would materially reduce competition and tend to create a virtual monopoly. We cannot conceive that this result is the desire of our Congress. While the inability to bid on and receive Government contracts under the present minimum wage rates established by the Secretary of Labor entails a great loss to this company and its employees it may still be possible to refrain from direct contracts with the Government and continue to operate. The proposed amendments, however, would make subcontractors as well as principal contractors liable to the wage determination, and on contracts amounting to only $2,000 or more, and, as subcontractors, supplying steel plates to fabricators acting as principal contractors on Government contracts, we would be subject to the provisions of these proposed amendments, and, because we are unable to pay the wages arbitrarily and erroneously imposed by the Secretary of Labor for our locality we would not be in a position to supply steel plates to principal contractors. We estimate that over one-half of our present business would be lost by us to the large integrated companies. In our case Government contracts for supplying of steel plates to the United States Army and Navy have mounted to as much as 15 percent of our business. During the entire year of 1938 our company operated at only 40 percent of normal capacity. If we are forced to forego a considerable proportion of Government business it is readily seen that our operations would be curtailed to a ruinous extent. For the past 19 years the stockholders of this company have received only one dividend amounting to 5 percent. During these years such profits as the company was able to earn have been plowed back into the plant to make improvements to reduce costs in order to maintain a competitive position in the industry. This company would never be in a position to make large capital expenditures comparable to those made by the large integrated corporations in the PittsburghChicago area, and could not compete with such plants at equal wage rates. This sacrifice by the stockholders of our company of leaving earnings in the business has enabled our company to employ at good wages from 1,200 to 1,700 men continuously. The passage of these proposed amendments would jeopardize the operations of our plant to such an extent that this employment might cease altogether, and the effect of throwing these men out of work in a small community such as ours would be very serious. The Fair Labor Standards Act of 1938 has now set up minimum wages and maximum hours of labor for all industries in the country engaged in interstate commerce. As this act adequately fulfills the purpose of the Congress to eliminate subnormal wages and excessive hours of labor, the Walsh-Healey Act, under the arbitrary and capricious administration by the Secretary of Labor creates an inconsistency. There is no reason why the minimum-labor and maximum-hour standards which contractors shall be required to observe in the performance of Government contracts should be different from those required by law for private contracts under the Fair Labor Standards Act of 1938. It would seem, therefore, that there is no necesstiy for continuing the present Public Contracts Act and certainly no necessity to pass the proposed amendments thereto. In conclusion, may we say that it is our earnest hope that Senate bill No. 1032 fails of passage, and that most serious consideration be given to the repeal of the Public Contracts Act, known as the Walsh-Healey Act. Respectfully submitted. Senator DAVID I. WALSH, CENTRAL IRON & STEEL Co., Executive Vice President. UNITED SHOE WORKERS OF AMERICA, Chairman, Subcommittee of the Committee on Education and Labor, Senate Office Building, Washington, D. C. DEAR SIR: A recent study of purchases of shoes by agencies of the Federal Government since the Walsh-Healy Public Contracts Act went into effect indicates an urgent need for amendment of that act to provide for denial of contract awards to those firms found guilty of using illegal and unAmerican methods to oppose efforts of their employees from enjoying rights guaranteed to them by the laws of the land. The attached table No. 1 contains a list of contracts for shoes made by various Government agencies since this law has been in force. It contains 43 items to the total value of $11,343,149, a very sizable amount for the shoe industry. An analysis of these awards, shown in table No. 2, awards amounting to $10,002,241, or 96.9 percent of the to five of the many firms engaged in this industry. table No. 2. discloses that 36 of these grand total, were granted These firms are listed in Included in that group are those firms which have taken that role in the shoe industry that marks them the symbol of all that is unfair, unjust, and under the Wagner Labor Act, illegal in employer-employee relations. Before citing the findings in any of the proceedings before the National Labor Relations Board, |