Mr. RAMSEY. Wouldn't it be desirable to affect the whole 100 percent?

Captain VAN PATTEN. If this could be worked out satisfactorily and administered without occasioning delay in the procurement of supplies; if industry will accept it, and we can avoid the difficulties that we had under the N. R. A., I say that will be satisfactory.

But, I see in the application of this bill and its administration, litigation, losses, and delays. I see serious inconvenience to the Navy. I lived through the N. R. A. I came personally in contact with the N. R. A., and I saw the attitude of a section of industry toward the N. R. A. I am fearful that we are going to have the same section bucking anything, no matter how desirable the legislation is. Mr. RAMSEY. Ought we to pay any attention to that small section? Captain VAN PATTEN. I am afraid that there are a lot of questions involved. They will cause endless confusion. It is only in the application of the measures bill that I have reference to.

Mr. RAMSEY. Have you any suggestions toward improvements or amendments?

Captain VAN PATTEN. I have suggested that it be left discretionary with the executive departments to apply it to those trades or those industries where there has been violent abuse of labor, so as to cover, first, the sweatshops-that is, home work and hand-made garments. I think, so far as I have heard-I have not had any experience in it-that that is where most of the abuse has occurred.

Mr. RAMSEY. You think that instead of empowering the Labor Board, each department should be empowered to use its own discretion? Is that it?

Captain VAN PATTEN. Yes; if conditions warrant.

Judging from the conversation that I have heard here today and the comments that I have heard, I think that the clothing industry is where the principal abuse occurs. I have heard of no abuse in the major industries, such as copper or steel or electrical materials or any of the major industries; not even lumber.

As I say, it is just the ramifications of the thing that I am fearful are going to so complicate this bill and get it so involved with the Department of Labor and the Department of Justice, and with litigation that we just will not get our supplies.

We are trying to get this Navy built now. We are trying to get it manned and ready. It would be unfortunate to see anything crop up now to stop the flow of supplies.

Mr. CITRON. Have there been any labor troubles in the plants of shipyards that have been supplying the Government with ships? Captain VAN PATTEN. Not recently, except the Camden strike. Everything has progressed very satisfactorily.

Mr. RAMSEY. I don't recollect whether you were here last year when we were holding hearings.

Captain VAN PATTEN. Yes.

Mr. RAMSEY. Some of these lumbermen testified last year they were paying as low as 5 cents an hour in lumber mills.

Mr. HEALEY. Can you answer that question?

Captain VAN PATTEN. No, sir.

Mr. HEALEY. Are there any further questions to be asked of the commander? If not, thank you very much, Commander. We will hear next from Miss Mason.

STATEMENT OF MISS LUCY R. MASON, GENERAL, SECRETARY,. NATIONAL CONSUMERS LEAGUE

Miss MASON. I want to speak as representative of the consumers with a conscience.

The name of the organization which I represent may need some explanation. It is called the National Consumers League. It is an organization that is attempting to raise labor standards at first through normal cooperation, and later through labor legislation.

I am speaking now as a consumer with the responsibility of consumers, and also from the experience of my own organization over many, many years. I think that the only way that we can raise the standards of labor effectively is to make those legal standards.

The Government has had good will on this matter for a long time. They have had it in the last two administrations, Republican and Democratic. There have been efforts on the part of the administration to persuade the employers to voluntarily maintain standards. The present administration has gone still further in their efforts, but they have failed, and they have been forced back again for the moment to voluntary effort.

As a result the Government is in a curious position, in which it consistently urges employers to recognize the fact that economically it is necessary-and everyone knows that it is necessary-to maintain decent working conditions.

And yet, if the Government has a policy which does not permit of living up to a decent standard, the Government is put in a very awkward position. It urges employers to pay decent wages and maintain reasonable hours, and then it lets these bids to the lowest bidder, regardless of what is involved to labor in that situation.

I remember last fall I was at a national labor conference at Asheville, N. C., where the commissioner of labor of New Hampshire got up and cited a case in which the C. C. C. camps in New Hampshire were letting contracts to Vermont firms, because New Hampshire had a minimum wage policy for the laundry industry. Laundrymen from Vermont were driving over the border as far as 50 miles, collecting the New Hampshire laundry, taking it back and having it done in Vermont, at less prices, because of lower wages, than it could be done in New Hampshire.

I took that up with the C. C. C. administrator, and had an extremely nice letter in reply, saying that he deeply regretted the truth of the assertion; but that he could do nothing about it; that they were compelled to let the contract to the lowest bidder.

There were other similar instances cited where they were forced to accept only the lowest bidder.

I believe very firmly that if the Government will set its own. standards higher, it will have not only a moral influence, but a direct economic influence, on the rest of the country, where under the present system the wages are now necessarily very low.

In considering how we can get this standard, I think we should consider what Miss Miller said this morning as to the minimum. wage board in New York, which recognized the prevailing standards. Labor legislation and labor agreements never are pulled down from the blue sky. They come out of practical experience.

If the board that is set up under this bill-and I very much agree with the Secretary of Labor that it should be done by a board and

not by the Secretary of Labor-if that board really is set up, and that board considers hours and wages, they will be prevailing hours and wages of the better type. They won't be anything arbitrary, something the figment of the board. The board should be people familiar with the industry, familiar with what is feasible in the industry. They should set those standards in order to maintain. decent employment and bring the substandards back to where they should be.

I think that is one thing that we can take for granted-that even if we did not specify it in so many words, it would nevertheless happen in that way.

I think another thing that the Government should consider is how much they may be forcing the standards down by letting contracts for garments and other goods to one man who is simply a broker, who lets the work out to be done by the lowest bidder.

I travel all over the country in my job. I have to travel through the Southern States trying to work out legislation there. Constantly I come across evidences of the pushing out of industry from the old industrial center to new locations, seeking cheap labor, and being given all sorts of inducements in the way of actually having factories built without cost to them sometimes, and taxes free, no taxes for 5 years. But the chief inducement at the same time is an abundant cheap supply of labor.

If the Government goes into a contract with a broker in New York, who in turn is letting the goods out, not to any firm in the old industrial section, and not to any firm in the new industrial sections which are maintaining high standards, because many of them area lot of the firms have quite decent standards-but into some other area that we are talking about and letting them out to concerns where they can escape labor unions and labor restrictions, where they can exploit labor, it seems to me that it is a moral responsibility of the Government to avoid having that sort of thing; that the Government should avoid being particeps criminis to that sort of procedure.

Of course, in considering this question of the effect of the Government contracts to be let to the lowest bidder, upon the wages being paid to the employee, we must remember that there are two ways in which a firm may reduce the cost of manufacturing. A firm might do that by having an enormous quantity of business with a very small profit. The volume of business will determine how cheaply they can get by. That firm may have a high labor standard and at the same time produce goods cheaply.

On the other hand, you have firms which already have a very low cost of operation, where their overhead may be that of a normal factory, and where they cannot reduce the cost of manufacturing in that way, their investments in machinery, and so forth, being as low as possible, and it is out of labor that that reduction must come.

I know of a single instance in a shoe manufacturing town that I could name, not so very far from here, who do a lot of work for the Government under contract, who kept putting their bid per pair of shoes lower and lower by 2 or 3 cents until they got it down to the point where no man or woman in the factory was making anywhere near a living wage; and the man himself finally placed himself in the position where he was chronically operating in the red. The

Government might very well by contracting with that type of firm help to force our standards of labor lower and lower.

There are several things about the bill that I would like to see changed, in particular, that question of putting it in the hands of a board instead of the Secretary of Labor.

Also as to the homework phases on page 2, to which Miss Miller referred, as to the 16-year old-age limit and the minimum rates and the maximum hours. I think there should be inserted in the bill a requirement that all work should be done in the factory.

Mr. DUFFEY of Ohio. What lines on what page?

Miss MASON. There are a number of lines, from line 9, which speaks of minimum rates, line 10, speaking of maximum hours, and line 12, speaking of the age limit of 16 years, and line 13, no convict labor.

I cannot find anything in there about no home work. You could accomplish it by saying that all work must be done at the factory or workplace of the employer.

Mr. DUFFEY of Ohio. In other words, you have in mind an amendment to that particular section to prevent home work?

Miss MASON. Yes; to prevent home work; absolutely to prevent it. I also agree with Miss Miller on the discussion that has occurred here to the effect that there is some confusion as to whether or not a contractor in purchasing materials and supplies must hold the people from whom he buys them 100 percent responsible. I think that is obscure.

I am not attempting to elucidate it. Personally, I don't see how a contractor could be expected, if he was contracting for shoes, say the Government was contracting with a man for shoes, how they could require that man to go back into the place where that leather was tanned. I don't see how that could be done.

Mr. HEALEY. The committee feels that way about it also.
Miss MASON. I agree with you.

On the other hand, if the contractor in submitting his bid should be held jointly and separately liable with the subcontractor, it would be better. Otherwise the liability for the whole thing is going to be on the subcontractor.

Mr. DUFFY of New York. What do you mean by holding the contractor liable for the subcontractor?

Miss MASON. About this bid broker that we are speaking of. Suppose that he has only an office and he lets out all of the bids. Say that he has a contract for shirts, and he lets all of them out, and that he lets them out to the cheaper type of firm, which constantly exploits labor.

The shirt-making firms happen to be one class of firm which do constantly expleit labor. We cannot hold that broker responsible. We can only hold the contractor responsible for making the rates.

Mr. DUFFY of New York. Do you think that the broker should be responsible if the subcontractor does not live up to the working conditions that are required by law?

Miss MASON. I believe that he should be subject to the fines and penalties if it can be shown that he has let the contract regardless of the conditions under which the work is going to be performed.

Mr. HESS. Would you put shipbuilding contracts in that same category, where there are millions of items that go into a ship? Would

you have the contractors responsible for what all the subcontractors did in a case like that?

Miss MASON. I think you have me there. I don't think that would be possible. It does not seem to me that it would.

But it seems to me that in many of these cases where the thing is distinct, where the place where the man lets the thing out has been definitely known, or where the man does most of the work in his own factory, or he lets out parts of it, like parts of garments, and so forth-I think he could very easily be held to the direct responsibility.

As to the shipbuilding industry, I would rather not comment on that myself. I really don't know about that.

Mr. HEALEY. Did you read the clause in section 3 of the bill? Miss MASON. I read all of the bill several times. I can run over it again.

Mr. HEALEY. It says that the principal contractor shall, if directed by the contracting officer upon the recommendation of the Secretary of Labor, cancel any subcontract for a breach by the subcontractor of his representation or agreement, and failure on the part of the principal contractor shall cancel or subject his contract to cancelation.

Miss MASON. I think it should be stronger than that because of the delays in fact finding and canceling the agreement sometime after the contract has been completed. I would like to see that very much stronger. That is my personal feeling.

Mr. DUFFY of New York. This would be written in the specifications themselves.

Miss MASON. Yes. But it should be stronger than that.

Mr. HEALEY. We had that in mind, and we thought we had that covered.

Miss MASON. I took that up the other day with some members of my executive committee, who are very much experienced in that line, and they immediately brought that out as one of the weaknesses of the bill.

There is another thing that I would like to mention, and that is that question of inspections.

It seems to me that it should be possible to get inspections done without too vast an amount of trouble.

The State department of labor inspects all labor conditions under the laws of the State. They don't keep a man always in a plant. He goes there periodically. He may go once in 2 weeks. He may go once in 6 months or 9 months. The point is that they don't know when he is coming. If they don't live up to the regulations, they don't know when the inspector is going to come and catch them there. He can come and inspect the pay rolls and the hours as shown on the records. It does not seem to me that any harm would result from inspections being done by a good State department of labor.

Furthermore, I think the Government could cooperate with the State departments of labor, as it did in the home-work program under the N. R. A. and other provisions, using a good department of labor, as it did in New York. The Government inspectors gave a great deal of aid to the New York State Department of Labor inpectors. And the State department inspectors, when they go into