reference will be made to the findings of report of the Committee on Education and Labor pursuant to Senate Resolution No. 266 (74th Cong.), part 4, report 46, which lists those companies which have used labor spies in recent years. Listed among the other purveyors of hate and fear are two of those firms also found on table No. 2. That these firms have spent substantial sums to beat down labor organization is shown by table No. 3. which lists information taken from these reports of this honorable committee. It is no coincidence in the labor policy of the International Shoe Co. that exhibit No. 3799 in the record of this committee should also list this company as paying $10,394 for Industrial Detective Agency Service during the same period it has been paying $18,200 in contributions to that leader of antilabor activity in this country, the National Association of Manufacturers. A clear picture of the collective bargaining history of some of these firms listed in table No. 2 may be gleamed from the decisions of the National Labor Relations Board. Cases cited: Brown Shoe Co., 1 N. L. R. B. 803; Brown Shoe Co., 5 N. L. R. B. 212; International Shoe Co., 12 N. L. R. B. 81. In the matter of Brown Shoe Company, case No. C-20, decided May 29, 1936, the National Labor Relations Board found that the company's relations to the union included "evidence of open cooperation with the citizen's committee in Sullivan (Mo.) unmistakable hostility to organized labor in general and the local union in its various small town plants in particular, as evidenced especially by its open employment of the notorious strikebreaker Ahner to be its industrial relations counselor * * * and finally, the fact well known to the respondent, of the dominant economic position of the Salem plant in the lives of the inhabitants of the town which made them extremely sensitive to the slightest hint concerning its continued operation." The decision concluded: "To them (the company's statements and threats) chiefly, is attributable the antiunion turmoil in Salem, and the respondent's responsibility therefor." Shortly after this decision was rendered this same company became involved in still another proceeding before the Labor Board. Almost simultaneous with the opening of this second proceeding, the firm was the recipient of a contract award from the War Department for shoes for the Civilian Conservation Corps to the total of $251,000. This new proceeding turned into a bitter legal battle in an attempt to hamstring the functioning of the act by asking the courts to prevent the National Labor Relations Board from holding hearings to determine the facts in the case. When the courts released the Labor Board from the legal restraints imposed upon it, and it was possible to get to the facts in the case at open hearing, the company accepted its obligations in the matter. It reinstated seven workers and paid $4,767 in back wages for time lost by workers illegally discriminated against for union activity. The pattern of company domination of the economic basis of a shoe manufacturing town; the use of that position to develop fear, hatred, and violence between members of the community is repeated again and again in cases relating to the International Shoe Co. The most recent decision relating to the labor policy of this firm was handed down by the Labor Board as late as May 8, 1939. It cannot be the intention of Congress to allow Government subsidy for these unfair, illegal labor practices through granting of large contracts to those firms which use them most extensively. Yet, it cannot be denied after study of tables Nos. 2 and 3 and reference to the National Labor Relations Board decisions cited above, that such a course has been the apparent policy of those agencies making the awards. Over 96.9 percent of the total value of awards were granted to only five firms. Three of these firms listed in table No. 3, or cited in National Labor Relations Board decisions received awards for $7,818,218 or 68.9 percent of the total. Nor can it be said that these five are the only firms capable of producing the shoes required. A recent study of the men's welt shoe industry indicated that there are at least 111 establishments engaged in the manufacture of men's welt shoes, which constitute almost the full bulk of shoes purchased by Government agencies. S. 1032 now provides for the protection of those rights in regard to collective bargaining with firms receiving Government contracts which labor hopes to achieve in the general industrial community when the National Labor Relations Act receives that respect and obedience due a Federal statute. This organization heartily endorses S. 1032 and urges your committee to report it favorably for passage. We desire that this statement be made part of the record of the hearing on this bill. Sincerely yours, TABLE 1.-Government contract awards to the shoe firms under Walsh-Healey Public J. M. Herman Shoe Co. 10319 Jan. 31, 1939 J. Herman Shoe Co... Chippewa Shoe Manufacturing Co. Eagle Ottawa Leather Co.. do. International Shoe Co.. War, Quartermaster Corps. Navy, Supplies and Accounts. Navy, Supplies and Accounts. $281,000 32, 700 242, 780 296, 223 280, 554 38,870 Civilian Conservation Corps, War. 300,000 40, 144 212, 865 259, 184 Civilian Conservation Corps, War. 525, 684 .do. 520, 705 Navy, War. 65, 692 do.. (Include in 7014) Jan. 5, 1937 704 Nov. 9, 1936 Bone Dry Shoe Manufacturing Co. Civilian Conservation Corps, War. Endicott-Johnson Corporation.... 130, 813 64,381 Source: Bulletins issued by the Division of Public Contracts, Department of Labor. TABLE 2.-Shoe contract awards by companies, showing percentage of total percentage awarded firms listed NOTE. Total number of awards, 43; total amount awarded, $11,343,149. TABLE 3.-Excerpts from report of the Committee on Education and Labor, Report No. 46, pt. 3 (1. From table of expenditures on industrial espionage, munitioning, and strikebreaking, 1933–27, p. 82) Endicott-Johnson Corporation, Endicott, N. Y.: Espionage-- (2. From Clients of Detective Agencies, p. 114) $12, 823. 31 Endicott-Johnson Corporation, Endicott, N. Y. Pinkerton's National Detective International Shoe Co., St. Louis, Mo... Hon. DAVID I. WALSH, Agency, Inc. [Wm. J. Burns International De- Pinkerton's National Detective CONGRESS OF INDUSTRIAL ORGANIZATIONS, United States Senate, Washington, D. C. DEAR SENATOR WALSH: I am submitting herewith a supplementary statement on behalf of the Congress of Industrial Organizations in support of S. 1032, covering a few points which were made by proponents to the legislation who testified after we did. I do hope that this statement can be incorporated in the record along with our original statement. Sincerely yours, [Enclosure] LEE PRESSMAN, General Counsel. SUPPLEMENTARY STATEMENT ON BEHALF OF CONGRESS OF INDUSTRIAL ORGANIZATIONS IN SUPPORT OF S. 1032 The purpose of this supplementary statement is to answer briefly certain arguments that have been made in opposition to S. 1032 which were not covered in the previous testimony by the Congress of Industrial Organizations in support of this bill. The first argument is that the 8-hour day law of 1912 (37 Stat. 137, U. S. C. 324) provides for an 8-hour day on public contracts, whereas the Walsh-Healey Act provides for an 8-hour day, 40-hour week, with overtime thereafter. The answer to this contention is that the Administrator has stated that the WalshHealey Act as a subsequent piece of legislation takes precedence over the act of 1912, and if necessary, S. 1032 can include a proviso to that effect. The second argument is that the Bacon-Davis Act provides for the fixing of minimum wages on public construction contracts and is in conflict with the WalshHealey Act. The answer is that the Bacon-Davis Act covers construction contracts which do not come within the scope of the Walsh-Healey Act. Section 8 of the Walsh-Healey Act specifically provides that the Bacon-Davis Act is controlling in the case of such construction contracts. 148441-39-18 The third argument made is that the Fair Labor Standards Act of 1938 establishes wage-hour standards applicable to all interstate industries, and hence the Walsh-Healey Act is unnecessary. This argument misconstrues the purposes of the two legislative measures. The Fair Labor Standards Act is intended to establish the minimum standards applicable to private industry subject to Federal jurisdiction. Because of its extensive nature, the standards contained in the Fair Labor Standards Act represent the basic minimum which public policy favors. The Walsh-Healey Act, on the other hand, is intended to apply only to the field of Government contracts and in that field to create not simply the basic minimum standards but the highest possible labor standards. In the case of the Fair Labor Standards Act the Federal Congress sought to regulate private industry, but under the Public Contracts Act Congress is only fixing the terms upon which the Government will do business with private firms. Moreover, there are a number of firms which are not engaged in interstate commerce and which are not subject to the Fair Labor Standards Act that do secure Government business and are thereby subject to the Walsh-Healey Act. It will thus be seen that there is no foundation to these arguments in opposition to S. 1032 purporting to show that S. 1032 and the Walsh-Healey Act itself are unnecessary because of other legislation. This act deals with Government contracts, a field where special regulations may be enacted in order that the Government may become a model employer and in order that firms receiving public funds in the form of profitable contracts shall not violate the policy of the Federal Government with respect to standard labor conditions. Respectfully submitted. LEE PRESSMAN, General Counsel, Congress of Industrial Organizations. NATIONAL COUNCIL OF AMERICAN SHIPBUILDERS, New York, May 25, 1939. Senator ELBERT D. THOMAS, Chairman, Education and Labor Committee, United States Senate, Washington, D. C. DEAR SENATOR THOMAS: We respectfully request that the attached statement may be filed in connection with hearings on S. 1032, a proposed bill to amend the Walsh-Healey Act, Public, 846, Seventy-fourth Congress. You very kindly granted this office an opportunity to appear on Thursday, May 18, which was impossible because of the annual meeting of the National Council of American Shipbuilders on that day. It is hoped, however, that you may be willing to accept this statement as part of the record in the hearings on this bill, as requested in our telegram to you of May 19. Very respectfully yours, H. GERRISH SMITH, President. STATEMENT OF H. GERRISH SMITH, PRESIDENT, NATIONAL COUNCIL OF AMERICAN SHIPBUILDERS, IN OPPOSITION TO S. 1032, A BILL to AMEND THE WALSHHEALEY ACT (PUBLIC, No. 846, 74TH CONG.) This statement is submitted in opposition to S. 1032 and is presented in behalf of the shipbuilding and ship-repairing industry of the United States through the National Council of American Shipbuilders, which represents approximately 80 percent of the shipbuilding and ship-repairing capacity of the United States and a large number of industries allied thereto, supplying material and equipment in the building and repair of ships. The shipbuilding industry is one of the large durable-goods industries of the United States. Shipyards engaged in the construction and repair of vessels, both for Government and private account, are located on the Atlantic and Pacific coasts, the Gulf and Great Lakes regions and on the principal rivers. Craftsmen of upwards of 30 trades are employed in ship construction and repair and practically every State in the Union contributes, in the way of materials, toward the building of vessels. Every shipyard has a list of several hundred subcontractors who supply equipment or materials used in shipbuilding and ship repairing. At times the larger shipyards employ several thousand employees in the building of vessels. The maintenance of that force is contingent upon the ability to plan the work and proceed with it in a systematic order. The Solicitor of the Department of Labor in an opinion dated November 17, 1936 ruled that the Walsh-Healey Act did not apply to naval shipbuilding contracts as follows: ""* * * the act is inapplicable to the contracts for the construction of naval vessels since under well-established judicial decisions it is recognized that such contracts are for public works and not for materials, supplies, articles, and equipment." Several years ago the United States Supreme Court in the case of Title Guaranty and Trust Company v. Crane (219 U. S. 24) held shipbuilding to be a "public work." Contracts for the construction of buildings or public works are subject to the Bacon-Davis Act (Public, No. 403, 74th Cong.). In an opinion of the Acting Attorney General of March 6, 1936, contracts for the repair and remodeling of Government vessels were held to be public works and were subject to the Bacon-Davis Act aforesaid. It would seem that the framers of the Walsh-Healey Act had no intention of making shipbuilding subject to both acts as section 8 of the Walsh-Healey Act specifically provides that the act shall not be construed to modify or amend the Bacon-Davis Act. It surely was not the intent of Congress that an industry doing just one kind of work should be subject to both of these acts. While it is true that the provisions of the Walsh-Healey Act were extended to naval shipbuilding under the Naval Expansion Act, Public, No. 528 75th Congress, yet it should be understood that there is a big difference between an extension of the present act to shipbuilding and its extension to shipbuilding in the drastic form as proposed under S. 1032, wherein it would apply to all contracts of $2,000 instead of $10,000 and would further apply to all the subcontractors of the main contractor "whose contracts exceed a total of $2,000." In the legislative history of the Walsh-Healey Act it will be noted that the original bill was introduced shortly after the collapse of the National Industrial Recovery Act. Its evident purpose was to reach the substandard industry-the employer of "sweated labor"-and not intended to affect Government contractors who were already subject to the 8-hour law (U. S. Code, title 40, secs. 321, 324, 325, and 326) and to the Bacon-Davis Act. The shipbuilding and ship-repairing industry is not a substandard industry, and its average hourly rate of wages has been much of the time the highest and always near the highest wages paid in any durable-goods industry, averaging at the present time about 84 cents an hour. The industry does not employ minors nor convict labor. Why the pending bill should now aim to bring the industry under the broader provisions of S. 1032 to all vessels is not clear. The present law applies to contracts of $10,000 or more. S. 1032, if enacted would apply to fully 10 times as many contracts under the $2,000 provision as under a $10,000 provision. It should be understood that in the building of naval vessels some of them are contracted for by private shipyards and others are built by Government navy yards, so that a subcontractor to a private builder becomes the main contractor to the Government for vessels building in a Government navy yard. Because of this fact, the present act (Public, No. 846, 74th Cong.), mild as it is in comparison to the proposed legislation, has already reduced the market to the principal contractor for the purchase of equipment and supplies and has resulted in delay in the building of Government vessels. This is confirmed in the annual report of the Secretary of the Navy for the fiscal year 1937 wherein he states (p. 24 of the report) that in the procurement of materials and supplies for navy contracts the Walsh-Healey Act, because of the contractual representations and stipulations required in the act, "has slowed up procurement in many lines of material." The proposed legislation, if enacted, will inevitably narrow still further the market for equipment and supplies, as conceivably many main contractors and certainly many subcontractors will refuse to bid under the restrictive provisions of this bill. Under subsection (f) in section 1, the contractor is required to stipulate i his contract "that the contractor and subcontractor will comply with all the terms and conditions of this act, including any and all rules and regulations in force and effect." The section would hold the main contractor responsible for any violation of the act by a subcontractor-a responsibility that a main contractor could not and should not assume. |