Purchase of Supplies and the Making of Contracts by the United States. Hearing Before a Subcommittee..on S. 1032...May 13, 18, 19, 1939.(76-1).

Public contracts of $9,000 to $10,000 awarded to hat and cap manufacturers-Contd.

Now, another phase of the subject that we want to emphasize is in connection with a provision of the bill dealing with wages and in the computation of those wages. In the matter of making determinations under the act in respect to wages, there is included in the present bill the following "board, lodging, or other facilities if such board, lodging, or other facilities are customarily furnished by such employer to his employees." Personally, I am not too familiar with the subject on this particular point, but President Green and Mr. Hushing and others are familiar with the subject and have studied it, and I think, wrote to you, Senator Walsh, about it.

Senator WALSH. I think I have already incorporated that letter in the record. I will do so if I have not, but I think that I already have. Mr. PADWAY. Those who are here know of the objections launched against them, which the American Federation of Labor makes against them, may emphasize that point. I will read a paragraph or two of this letter giving our views:

In a previous bill, the section dealing with this subject read that all persons employed in the performance of a contract or a subcontract will be paid without subsequent deduction except by collective-bargaining agreements or will be paid on no account not less than the minimum wages as shall have been determined by the Secretary of Labor, and all other wages including wages in excess of the established minimum which may become legally due to the employee.

We find in the present bill that section changed to the following: that all persons employed by the contractor or subcontractor in the manufacture or furnishing of supplies required under the contract will be paid not less than the minimum wages as determined by the Secretary of Labor to be the prevailing minimum wages for persons employed on similar work or in the particular or similar industries or groups of industries currently operating in the locality in which the supplies to be manufactured or furnished under such contract including the reasonable cost as determined in accordance with the administrative regulation to the employer for furnishing such employee with board, lodging, or other facilities if such board, lodging, or other facilities are customarily furnished by such employer to his employees.

That is, the last provision is the one which we want deleted and the first one which I read relating to the collective bargaining agreement be substituted; in other words, to revert to the provision enacted in the bill which was introduced in the previous session of Congress.

148441-39-6

Senator WALSH. The bill that passed the Senate last session?
Mr. PADWAY. Yes.

Senator WALSH. It passed the Senate, but it failed to pass in the House.

Mr. PADWAY. Yes. We would rather have the language of the last bill, and the reasons are set forth in the letter, and the letter you have already indicated will be in the record.

The next provision in which we are interested is the list that will be made up or contained in the Department of Labor of those who have transgressed the law and who by virtue of those transgressions will not be entitled to bid on contracts or receive contracts for a period of time.

Senator WALSH. You want such an amendment introduced in this bill?

Mr. PADWAY. Yes.

Senator WALSH. When this bill was introduced that amendment was left out in the expectation and hope that we would not run up against the situation that we did in the House last session. If we can get these other changes enacted, which everybody seems to agree to, I am sure that I personally and the members of the committee have no objection to making the effort again, but that is the sole reason and the only reason that it was not put in, so that we could get something through this session.

Mr. PADWAY. The provision last year did have some objectionable features in respect to this subject. It was rather arbitrary, it was harsh, and automatic, and just as soon as some board or bureau had found a violation on the part of an employer, the employer was through; he was not even accorded an opportunity to go to court and question the order, without losing, of course, the benefit and his advantages of his contract or the right to contract. We agree that there was some reason for complaint about that provision, so we have endeavored to simplify that subject and to be fair to everyone, even to contractors who may be found to have transgressed the labor laws and to accord them the right to remain in good standing with the Government until a court of competent jurisdiction has approved of that order. It is just about 8 or 10 lines, and it reads as follows:

On page 5, after line 5, insert the following:

"Section 3 is amended by striking out the period, inserting a colon in lieu thereof, and by the addition of the following:

"Provided further, That such list shall contain the names of persons who shall have been (who shall hereafter be) found by a court of competent jurisdiction in a final adjudication to have violated a State or Federal law protecting employees in the exercise of the right of collective bargaining or self-organization. Such name shall remain on such list for a period not to exceed three years unless previously removed therefrom by order of the Secretary of Labor whenever in his judgment and upon a proper showing by the person listed, he finds that such removal is in the public interest.'"'

Senator HILL. That is your proposed amendment?

Mr. PADWAY. Yes, sir. And may I direct your attention to the fact that we have limited it to one subject, to one class of laws which is violated. If I remember correctly, last year the bill provided for any

dictate as to contractual matters of States, I would like to leave the thought with you that we can certainly put in a prohibitional restriction on any Federal funds that the States use for that purpose, and therefore it is not a question of the impairment of contracts, it is not a question of Federal dictation to the States, but they must come, under the purview of this act, they must come within the spirit of the Federal law that we enjoy under the WalshHealey Act.

Senator HILL. Let me ask you one question-have you had any expression one way or another from any of the States highway commissions about this amendment?

Mr. CANNON. I would like to say, Senator, that we had a very embarrassing thing happen in West Palm Beach recently in the construction of a Federal overpass in that city. That city happens to be in my district, and it was on that occasion that labor came en masse, there were quite a few representatives of labor from that district came to my office, as a result of which I had communications with our Governor and with other officials in the State of Florida, and it was a proposition something like this-they simply said more or less arbitrarily that the Federal Government was responsible for it and they were not going to interfere, but I do know that it was all I could do to stop the picketing there on the part of labor, and it was on the promise that I would do just what I have done now that we did stop that proposition that might have meant physical violence. As a matter of fact, and labor was right, and I took their position, and I take it now, and I say that since it has been brought to my direct attention down in my district it is that proposition that I am attempting now to cure. Senator HILL. They were picketing because they were not paying the prevailing wage?

Mr. CANNON. That is quite true. And since this is the only Federal program that does not enjoy a substantiation and a backing up by the Walsh-Healey Act, we sincerely hope that you will see fit to make this amendment in the act.

STATEMENT OF DAVID KAPLAN, RESEARCH DIRECTOR, INTERNATIONAL ASSOCIATION OF MACHINISTS, AMERICAN FEDERATION OF LABOR

Mr. KAPLAN. My name is David Kaplan; I am director of research for the International Association of Machinists, affiliated with the American Federation of Labor.

In behalf of the International Association of Machinists, I want to endorse the statement made by Judge Padway in support of the bill and the amendments that he recommended.

I would like to make just one brief statement regarding the inclusion of shipbuilding in this bill. I think, Senator Walsh, you will agree with me that the Congress intended to include shipbuilding in the original bill but through some accident and an unfortunate interpretation, shipbuilding was construed to be left out, therefore through a definition of "supplies," shipbuilding is being read into the bill as was originally intended. We urge that shipbuilding be included in this bill.

first and second sections of the Walsh-Healey Act. Since the bill is short, with your indulgence I shall read it to you:

H. R. 6395, in the House of Representatives, May 18, 1939.

Mr. Cannon of Florida introduced the following bill, which was referred to the Committee on the Judiciary:

A BILL To extend the provisions of the Act entitled "An Act to provide conditions for the purchase of supplies and the making of contracts by the United States, and for other purposes," approved June 30, 1936, to certain contracts carried out with the aid of Federal funds.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That, except as otherwise provided in this Act, the provisions of the Act entitled "An Act to provide conditions for the purchase of supplies and the making of contracts by the United States, and for other purposes," approved June 30, 1936 (U. S. C., 1934 edition, supp. IV, title 41, secs. 35 to 45), are hereby made applicable to contracts for the construction, alteration, or repair of Federal-aid highways where such construction, alteration, or repair is paid for either in whole or in part, whether directly, by way of reimbursement,or otherwise, with Federal funds. No such funds shall be furnished in connection with any such contract (a) unless it contains the representations and stipulations prescribed in section 1 of such act of June 30, 1936, so far as such representations and stipulations are applicable, and in addition contains provisions to the effect that a violation of any such representation or stipulation shall render the contractor liable for the damages prescribed in section 2 of such Act of June 30, 1936, for such violation; and (b) unless the State concerned agrees to pay the amount, if any, withheld or recovered from the contractor on account of unpaid minimum wages to the employees involved.

Sec. 2. This Act shall take effect

after the date of its enactment.

Now, gentlemen, I have a letter which with your indulgence I should like to read, from Mr. Green, president of the American Federation of Labor, relative to this proposition. I believe the Senator has had one previously. This particular letter is directed to the Honorable Arthur D. Healey, and is as follows:

DEAR REPRESENTATIVE HEALEY: At the meeting of the American Federation of Labor convention in Houston, Tex., in October 1938, many complaints were made from all parts of the country that contractors doing highway work are not paying the prevailing rates of wages.

As you know, the money is furnished the States by the Federal Government and the highway departments fix the compensation to be paid the workers. Therefore, it is believed that an amendment can be made to the Walsh-Healey Act that will protect the interests of the workers on highways.

Representative Pat Cannon of Florida desires to introduce a bill at the request of the building trades of that State, who are being paid from 25 to 50 percent less than the prevailing rates, while the Works Progress Administration is paying all workers the prevailing rates of wages in the locality where such work is being done. Enclosed is a copy of Representative Cannon's proposed amendment. The American Federation of Labor heartily approves of the amendment and hopes you will give it your support because of its importance to labor.

Very truly yours,

This Federal-aid highway is the only program of its kind and class that today is not protected under sections 1 and 2 of the WalshHealey Act, or under similar provisions, such as the Bacon-Davis Act, for which reason we sincerely ask that this be made a part of your deliberations, and untimately an amendment to the WalshHealey Act now under discussion.

I do not know of anything further that I could say except that if it be argued that the States, the various and sundry States are the contracting parties, and we, as the Government, possibly could not

Senator HILL. Let me ask you one question-have you had any expression one way or another from any of the States highway commissions about this amendment?

Mr. CANNON. I would like to say, Senator, that we had a very embarrassing thing happen in West Palm Beach recently in the construction of a Federal overpass in that city. That city happens to be in my district, and it was on that occasion that labor came en masse, there were quite a few representatives of labor from that district came to my office, as a result of which I had communications with our Governor and with other officials in the State of Florida, and it was a proposition something like this-they simply said more or less arbitrarily that the Federal Government was responsible for it and they were not going to interfere, but I do know that it was all I could do to stop the picketing there on the part of labor, and it was on the promise that I would do just what I have done now that we did stop that proposition that might have meant physical violence. As a matter of fact, and labor was right, and I took their position, and I take it now, and I say that since it has been brought to my direct attention down my district it is that proposition that I am attempting now to cure. Senator HILL. They were picketing because they were not paying the prevailing wage?

STATEMENT OF DAVID KAPLAN, RESEARCH DIRECTOR, INTERNATIONAL ASSOCIATION OF MACHINISTS, AMERICAN FEDERATION OF LABOR

Mr. KAPLAN. My name is David Kaplan; I am director of research for the International Association of Machinists, affiliated with the American Federation of Labor.

In behalf of the International Association of Machinists, I want to endorse the statement made by Judge Padway in support of the bill and the amendments that he recommended.

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