$10,000 of value is purchased), at which wages, hours, and conditions of labor as set up by the Department of Labor apply. Such a reduction would add another uneconomic control to industry already burdened; there is bound to be a tremendous increase in the cost to the Government for inspection and enforcement; and it would be confusing, expensive, and contributory to misunderstanding and contention between employees and employers in the glassware industry.

As an example of this anticipated confusion we would explain that we now have the following minimum-wage rates prevailing in the industry, established by law, governmental department, and collective bargaining:

(a) A minimum of 421⁄2 cents per hour established by the Department of Labor, Division of Public Contracts.

(b) A minimum of 25 cents per hour by authority of the Fair Labor Standards Act of 1938. This will be 30 cents beginning October 24, 1939.

(c) A minimum of 35 cents per hour for the first 60 days and 38 cents per hour thereafter for females; 40 cents per hour for the first 60 days and 45 cents per hour thereafter for men; which rates were established by collective bargaining.

This assortment of minimum rates has caused only a limited amount of trouble up to the present time for the reason that few Government contracts for glassware are in excess of $10,000. So we trust that the minimum amount involved will continue in the law at over that figure.

There are other features of the Walsh-Healey Act as it now prevails which we believe can be amended for the definite benefit of all parties concerned. The following changes will, in our opinion, improve the workability of the law for both employer and employee:

Since the Walsh-Healey Act applies only to Government contracts and was enacted prior to the Fair Labor Standards Act of 1938, which now includes all industry engaged in interstate commerce, it would simplify matters to have the Fair Labor Standards Act govern details of wages and hours exclusively. Two laws setting different standards for two classes of business makes for confusion and inefficiency. Furthermore, in a national crisis it would be much more simple to have one authority govern such important subjects as wages and hours.

However, if the Congress is unable to appreciate the wisdom of substituting the Fair Labor Standards Act for the Walsh-Healey Act, then we suggest that in the case of an industry which, through collective bargaining with an established and recognized labor union to which more than 50 percent of the industry's workers belong, has agreed on a minimum wage for the employees in that industry, then the minimum wage so established is to be the legal, minimum-wage rate; and the Secretary of Labor authorized and directed to accept it as the minimum wage of the industry.

SUGGESTED CHANGES FOR SECTION 1, SUBSECTION (B) OF THE PREVAILING WALSHHEALEY ACT

This section should be amended to permit the deduction from wages which are legitimate and for items arranged by the employee to be paid for by deduction from earnings. This would require the elimination or qualification of the words of the act reading

* * without subsequent deduction or rebate on any account." This is suggested for the reason that in the Rulings and Interpretations Under the Walsh-Healey Public Contracts Act, issued by the United States Department of Labor, dated July 6, 1937 (p. 10, sec. 5), these words are interpreted to forbid any practice reducing the net wage below the established minimum and "This includes, among others, deductions for

"(a) Community-chest contributions.

"(b) Group-insurance premiums.

"(c) Kick-backs.

"(d) Medical expenses.

"(e) Rent."

Some of these may very well be legitimate obligations of the employee, regularly and legally deductible in the ordinary routine of employment on contracts other than those entered into with Government agencies; even though the net amount, remaining after deductions are made, received by the employee is less than the minimum wage for the period the earnings cover.

To clarify further this subject of deductions, we suggest for section 1, subsection (b), the protection of the employer in the matter of garnishment proceedings, especially in the light of the ruling of the Department of Labor as set forth in paragraph 3, top of page 11, Rulings and Interpretations, as follows:

11* * * in the case of garnishment proceedings the correct procedure is probably for the garnishee to hold aside the funds, file an answer, and at the

same time file a special plea, setting out the circumstances in detail and the condition in which he is placed by the Public Contracts Act. It will then be for the local court to determine the employer's responsibility."

Such situations can be complicated and troublesome; greatly so in a large industrial plant and expensively so in a small enterprise. Since the manufacturing operations are subject to the laws of the State in which they are carried on, there seems, to laymen at least, no reason why the State laws should not apply to garnishment irrespective of whose contracts are in process of manufacturing.

The second amendment we suggest for section 1, subsection (b), is the addition of such language as would confine any special minimum rate of wage, established by the Secretary of Labor, to the actual time the employee is engaged on production applying to Government contracts.

This is prompted by that ruling of the Labor Department on page 9, Rulings and Regulations (under sec. 4, subsec. 2), which declares an employee "is entitled to the minimum wage for the week in which any Government work was performed by him, even though he may have been assigned to commercial work during part of that period."

This is obviously unfair and a possible cause for serious loss to the employer on commercial contracts when the rate, if higher, must be paid on commercial or current contracts.

The changes we have suggested herein are submitted for your consideration and are prompted by the sincere desire on our part to set up the provisions of the statute in forms that will render them more smoothly adaptable to industrial working conditions.

Respectfully submitted,

Senator TAFT. Just tell me briefly why you want to be exempted? Mr. DOUGHERTY. We are proposing what we consider the proper amendments to this act. I might say that we are opposed to the reduction of the $10,000 figure, and we are in favor of applying the Fair Labor Standards Act which was enacted subsequent to the passage of the Walsh-Healey Act, as the one that should look after the hours and wages in the industry. We think that is sensible. As a matter of fact, in our industry now we have three minimum wages established; one by the law under the Fair Labor Standards Act; one by the Labor Department under the Walsh-Healey Act, and one by collective bargaining; and neither of them correspond and they are out of harmony, and it results in confusion, but we have set that forth in our brief and I do not believe that I will take up the time of the hearing any further.

Senator TAFT. You say you are opposed to the $10,000. What other specific suggestion are you making as an amendment or against these amendments?

Mr. DOUGHERTY. We say in our brief:

Since the Walsh-Healey Act applies only to Government contracts and was enacted prior to the Fair Labor Standards Act of 1938, which now includes all industry engaged in interstate commerce, it would simplify matters to have the Fair Labor Standards Act govern details of wages and hours exclusively.

Senator TAFT. You suggest then that the Walsh-Healey Act not apply where the Wage and Hour Act applies?

Mr. DOUGHERTY. Where it conflicts or confuses the Wage and Hour Act; yes, sir.

Senator TAFT. That is your main interest?

Mr. DOUGHERTY. Yes, sir. There are objections we see to the law in some of the rulings of the Labor Department that make manufacturing very difficult, but they are all set forth in our brief. Senator TAFT. Very well.

STATEMENT OF HERMAN L. DILLINGHAM, BUSINESS MANAGER OF THE AMERICAN GLASSWARE ASSOCIATION

Senator TAFT. Mr. Dillingham, have you a written statement? Mr. DILLINGHAM. I have some remarks.

Senator TAFT. Will you just let me glance at them and see if I have any questions to ask you?

Mr. DILLINGHAM. Yes, sir. I am really seconding Mr. Dougherty's position in the matter, because our membership is somewhat duplicated, with the exception of 10 companies, which is explained. (The statement of Mr. Dillingham is as follows:)

As business manager of the American Glassware Association, I am speaking for its members, who are 38 manufacturers of tableware, illuminating, scientific, and industrial glassware, not including producers of flat glass, commonly known as window and plate glass, or manufacturers of glass containers, which include milk bottles, food and household canning jars, and all types of bottles. This association represents about 80 percent of the dollar sales volume and about 40 percent of the total number of manufacturers that are engaged in the production of this glassware. Many of our members are also members of the National Association of Manufacturers of Pressed & Blown Glassware, whose thoughts in the matter of amending the Walsh-Healey Act have been ably presented to you by Mr. Dougherty. I therefore, add to his remarks the support of approximately 10 other glass plants that are members of this association and not of that association. In 1936, when the Congress passed the Walsh-Healey Act, it was evidently its belief that wages, hours, and working conditions of employees should be improved, and the Members of the Congress were so firmly convinced of this that they passed the Walsh-Healey Act requiring Government contracts for more than $10,000 to be placed with companies which would comply with stipulated conditions outlined in the act. The Congress evidently felt that the Government should assume leadership in this matter by making its purchases only from companies which complied with certain requirements regarding the welfare of their employees.

Since that time, and in further pursuing this course, the Congress in 1938 passed the Fair Labor Standards Act which applies to all industry whose products enter into interstate commerce. The provisions of both acts parallel each other in their objectives, to secure fair wages, hours, and working conditions for the workers of this country. Both bills provide for committees to determine minimum wages and hours and have special sections devoted to declaring what suitable working conditions shall be. Unless the wage, hour, and working conditions provided for in these two acts are made to coincide, double standards will be created which will be disturbing to both employees and employers. Now is the time for less confusion in business instead of adding to it by maintaining double standards to which business must adhere. Both bills provide for inspection service to enforce the declared standards provided for in these acts. To maintain two inspection services, which have approximately the same objectives, incurs unnecessary expense and particularly at a time when Congress is endeavoring to reduce governmental operating expenses.

If the Walsh-Healey Act is continued, its only purpose can be to act as an elevator to wages, hours, and working conditions which are now already prescribed for industry in general by the Fair Labor Standards Act. Unless the Walsh-Healey Act sets higher standards than the Fair Labor Standards Act, there is no reason for its continuance and, if continued, it can only be justified for that purpose. An inconsistency is thus created when conditions regarding labor established by fair labor standards boards are not sufficiently fair for the Government to purchase ware made under the wages and hours declared by them. This would only lead to labor unrest and ultimately help to create unsettled business conditions.

Finally, it will place the various governmental purchasing departments in a position of having to pay for their requirements more than would be paid by private industry under the same conditions.

This association therefore recommends for your serious consideration a suitable amendment of the Walsh-Healey Act that will bring it in harmony with the Fair

Labor Standards Act of 1938 and also that it shall be administered by the same wage and hour determination and enforcement agencies that are created by that act.

By enacting these amendments, dual standards that have been created in the glass industry by the Walsh-Healey Board determination of a minimum of 421⁄2 cents per hour and the minimum of 38 cents per hour, established by existing union agreements as being fair and which would very likely have considerable weight with a wage determination board under the Fair Labor Standards Act, will be avoided in the future.

Senator TAFT. I suppose the Wage and Hour Act rate is considerably lower than the Walsh-Healey Act rate, isn't it?

Mr. DILLINGHAM. Of course; the present rate is at 25 cents, going to 30 cents in wages, and 44, going to 42, and 40, in hours. However, when a committee is appointed, and I presume Administrator Andrews will get to these committees as fast as he can, we believe that one standard should be established for the glass industry and adhered to by it. It is very confusing to have two standards and a union standard. It just seems to be sound common sense that what is good for the general industry is good for Government contracts.

Senator TAFT. That is really your whole interest?

Mr. DILLINGHAM. Yes; and I might add that we feel that any further amendment of the Walsh-Healey Act simply confuses the whole situation. It is just making more and more trouble.

Senator TAFT. You mean any extension by reducing the amount? Mr. DILLINGHAM. Yes; it just adds to the confusion.

Senator TAFT. Or extending it to subcontractors; does that interest you at all?

Mr. DILLINGHAM. Yes, sir; but under the Fair Labor Standards Act, they are all covered-all industry is covered, and the Government should buy on the same prices established on the standards as set by the Fair Labor Standards Act, as well as an individual concern or a private consumer. It only seems reasonable, and I believe the Walsh-Healey Act at the time it was started had a purpose, possibly a laudable one, but now since the Congress has seen fit to pass the Fair Labor Standards Act, it has rather been superseded by the act for general industry.

Senator TAFT. What would be the effect of the repeal of the WalshHealey Act on your industry today? Your agreement with the unions fixes the rates of pay, and so forth, does it not?

Mr. DILLINGHAM. Our agreement with the unions fixes a minimum of 38 cents.

Senator TAFT. And is the Walsh-Healey Act the same?

Mr. DILLINGHAM. The Walsh-Healey Act is 421⁄2 cents, and, of course, that causes conflict in the industry. Here on the one hand, you have Government contracts going through at 421⁄2 cents, and a union agreement existing in the industry at 38 cents.

Senator TAFT. What is the Walsh-Healey provision? The prevailing rate?

Mr. DILLINGHAM. The prevailing minimum wage.

Senator TAFT. I suppose that that would be the same as the union wages in most cases?

Mr. DILLINGHAM. We had hoped that it would, but after the determination by the Board on facts submitted, they made it 421⁄2

cents.

Senator TAFT. I see. That is really the difficulty you are up against now?

Mr. DILLINGHAM. You can see it is awfully confusing in running a factory to have Government orders at 421⁄2 cents and a union rate of 38 cents. It is extremely confusing.

Senator TAFT. How can the Government reach that prevailing rate in the industry when the union has a different rate? I do not quite understand how such a conclusion could be reached.

Mr. DILLINGHAM. It was reached through a survey that was sent to them by our association, and they took the average wages instead of the minimums in the industry. I believe I am straight in that, Mr. Walling, am I not? You were one who was on that committee. Mr. WALLING. Would the chairman like me to speak to that? Senator TAFT. Yes; I would like for you to explain it.

Mr. WALLING. This resulted largely because of the lack of appearance of the representatives of the employers in this industry, which they themselves rather regret and which arose because of various factors which we do not need to go into now, and as a result of the information which was filed with us by the Employers' Association, it developed as far as we could tell from the figures that very few of the employees in the industry were actually being employed at the minimum rate provided for in the collective agreement; in other words, it was a theoretical rate rather than an actual minimum and so notice was served on the industry that this other rate was intended to be established unless objection was made. Objection was not made at the hearing, and so the rate was established. Since the establishment of the rate, the industry has conferred with us as to the possibility of revising that rate, and we have indicated that at such time as they are ready to come in with their evidence, we will be glad to consider the matter.

Senator TAFT. The natural result would be that in time the two rates would be the same, the union rate and the minimum rate?

Mr. WALLING. Normally, where there is a widespread collective bargaining agreement, the union rate is the prevailing minimum rate under the Walsh-Healey Act.

Mr. DILLINGHAM. Our hitch there, of course, is that the union officials are put definitely on the spot. Here we have a rate of 421⁄2 cents declared by the Government Board, and when we ask union officials to appear to change to 38 cents, their established minimum, they naturally hesitate, and you cannot blame them much, because there they are then going to their group and saying "We want to change it downward."

Senator TAFT. Have you anything else?
Mr. DILLINGHAM. No; I have not.

STATEMENT OF LEE PRESSMAN REPRESENTING THE CONGRESS OF INDUSTRIAL ORGANIZATIONS

Mr. PRESSMAN. I would like to simply place my statement in the record, Mr. Chairman.

Senator TAFT. That may be done.

(The statement of Mr. Pressman is as follows:)

The Congress of Industrial Organizations urges the passage of S. 1032 with the amendment thereto as proposed by Senators Walsh and Hill. This bill does not make any fundamental change in the present policy and laws of the United States with respect to the protection of the rights of organized labor. Its chief purpose

is to strengthen the provisions of the Walsh-Healey Act which establishes the