shall do so and so, but that he should be required to extract from the subcontractor an agreement that the subcontractor shall do so and so. That is as far as the law goes, is it not?

Senator WALSH. It is true. It is also hoped that a Government inspector who is looking to see what kind of cement goes into the job will look and see what these labor conditions are and make a complaint to his department head, and he will, in turn, to the contractor. Mr. MCLAUGHLIN. But the contractor himself has had, perhaps, no opportunity to know the working conditions obtaining in the industry of the subcontractor in many instances.

Senator WALSH. That may be so, where it may be, for instance, the production of the soles of the shoe. It may be difficult to do that. Mr. MCLAUGHLIN. Is there any leeway given?

Senator WALSH. Yes; there is the widest latitude to the President. He does not need to apply this law at all if he does not want to.

Mr. MICHENER. And right there I want to stress what you said— that he does not have to pay any attention to this law at all if he does not want to. Under section 6 the President can absolutely nullify the conventional policy by exempting anybody from the terms of the bill before or after the contract was let, without any findings of fact. He can make any exceptions, exemptions, variations, or alterations he sees fit. This, of course, means the power will be exercised entirely by the subordinates and the agencies, and the authority for that is section 6 of the bill, plus what you have just said.

Senator WALSH. All of that is true before the written contract is entered into. He may find a condition on the purchase of certain kinds of supplies where he cannot have a rigid rule; and therefore, he is given the power of elasticity under this bill to order it. But once the written contract is made, he cannot cancel it; and the contractor has the right of a hearing, and the President has only through his agents the right to make a recommendation.

Mr. MICHENER. Yes; but he may sit down around the table with the agents of particular contractors, and they may work out this think, regardless of the law which Congress lays down here.

Senator WALSH. Of course, you have to have elasticity. You cannot lay down the law what kind of cement is going to be in every Government contract.

Mr. MICHENER. Yes; but don't you think it is vastly different to provide for quality of material in a contract and to provide for the manner of the manufacturing or the mining or the quarrying of that material?

Senator WALSH. I personally think it is vastly more important to require the human element to be protected than the material element in a contract. Now, I realize it is most difficult. It cannot be the same in two contracts. It is practically impossible. You cannot have a 40-hour maximum week in every industry. One has got to be 36 and one 48 and one has to be 60, perhaps.

Mr. MICHENER. I am just opposed to a general policy of giving any agency the power to make these laws and changes.

Senator WALSH. I can appreciate the objection.

Mr. MICHENER. Because we cannot camouflage a statute here for the purpose of giving it constitutionality. That is the whole thing. Senator WALSH. I appreciate that, but you are not going to have that law unless you have the elasticity. You cannot write the same

minimum wage for Wyoming that you can for Massachusetts or Texas or Ohio. There cannot be the same hours in every industry. You have got to have the same elasticity that you do with other elements.

You take the example of the Navy Department in building battleships, and all we ask in this bill, that maximum hours on that battleship shall be so many and the minimum wages shall be so much and no child labor. That is all we are doing.

The CHAIRMAN. Senator Walsh, you said that when the contract is made it cannot be changed.

Senator WALSH. Except by the agreement of the contractorThe CHAIRMAN. You mean when the contract is made or when the bids are advertised for-the specifications for bids?

Senator WALSH. When the contract is made there can be the changes that are made by mutual agreement between the contractor and the Department there. But when the Government attempts to charge the contractor with violations that he says he has not committed, he is given a right to a hearing. That is the point.

The CHAIRMAN. Let me ask you this question, Why couldn't it be that the specifications in the bids would not be altered? And this is the reason why I ask the question: If, after a bid has been made, you permit the successful bidder, in effect, to make a new contract with a Government agency, wouldn't you unnecessarily expose the whole scheme to things we would like to avoid in government? Senator WALSH. No doubt about that.

The CHAIRMAN. Could you work it so that the specifications would be in the advertisement and that the bid be granted to the lowest bidder of those who would meet the specifications?

Senator WALSH. It has to be. Nobody else will.

The CHAIRMAN. You do not quite follow me. Grant the contract to the lowest bidder who meets the specifications, and then avoid, if possible, a modification of the contract between the governmental agency and the successful bidder. I am expressing it very poorly.

Senator WALSH. When I was speaking about modifications and changes in the power given the President I was not referring to what takes place after the lowest bidder gets the contract. I was speaking of prevention of arbitrary power by the President because the contractor can say, "I want a hearing. I have not violated these terms. I am sure that I haven't." There has got to be hearings. That is the point I was trying to make. But there is nothing in this bill that changes the present law about the compulsion to give the contract to the lowest bidder applying with these conditions. The CHAIRMAN. Yes.

Senator WALSH. I am sorry, Mr. Chairman. I am afraid I have taken too much time.

Mr. CHANDLER. May I ask a question there, Mr. Chairman?
The CHAIRMAN. Yes.

Mr. CHANDLER. I just want to understand section 1 (a), which relates to contract provisions. Apparently that section really provides for a covenant by the principal contrator that every subcontractor or supplier of articles, materials, et cetera, shall comply with these conditions. That pretty nearly carries that one contract down to every industry that is affected by that contract, does it not?

Senator WALSH. That is true; yes. The bill reaches very far into the field of requiring these minimum labor conditions with those who directly or indirectly contract with the Government.

Mr. ROBSION. I want to put a question, Senator. I notice here there is quite a good deal said about insuring minimum wages. On the matter of this works bill-and I guess this is directed most especially to these four billions that we spent for works-some of us in the House tried to get a minimum wage amendment adopted, and it was adopted in the Senate. Administration power, however, was exercised and defeated the minimum wage. Now, what is the purpose of this, if the administration did not want any wage and this is going to insure a minimum wage? Not only a minimum wage in the contract, but it reaches down to the coal mine that furnished the coal and the lumber mill that furnished the lumber, and all the way down.

Senator WALSH. As I understand the administration's position here, it is that it has two funds, one for carrying on regular contract business of the country. In the spending of that fund it complies absolutely and to the letter of the law. The other fund is a relief fund, specified and labeled "Fund for Relief ", and instead of giving $5 or $10 to somebody for relief it gives them some kind of employment and pays them relief employment wages, what they think to be the wages.

Mr. ROBSION. Yes; but it prevents the other people from getting work.

Senator WALSH. Personally, I think it would have been better if we never went into that field of giving relief without employment and paying proper wages. But I can well understand the Government's position, that this is merely relief money and we give you this wage because it is only relief, and we are not doing this work in the regular order and from the regular funds.

Mr. ROBSION. I get so many complaints from the labor organizations.

Senator WALSH. I do, too.

Mr. ROBSION. Also pointing out that the result of this is that the fellow that went on relief can get work but the man perhaps that was independent and would not go on relief could not get work.

Senator WALSH. Is it not due to the fact that the public has not distinguished between these funds? Relief money is money spent for relief, for food and clothing. That is one kind of relief. The other is the regular funds of the Government for contractual purposes.

Mr. ROBSION. I think the Government ought to confine itself to real public works and pay a real wage and fix hours like it requires from the citizens.

The CHAIRMAN. This hearing has really been called to give an opportunity to people to be heard who are opposed to the bill. I mean that was primarily why it was called. But it has seemed best to have the statements made that we have had made. I think now we shall have to proceed, at least for the moment, to getting the views which will express the opposition to the bill. I hope those who are opposed to the bill have been good enough to follow the suggestion of the chairman and have somebody here who more or less represents the opposition to present the opponents to the bill.

Before we begin, we have less than an hour on an important bill, and some of the members of the committee feel that they must be on the floor today.

Mr. MICHENER. The Guffey bill comes up. Some of us want to

vote.

The CHAIRMAN. How about after you vote on the Guffey bill? Mr. ROBSION. Mr. Chairman, I think this is of so much importance and far-reaching that there ought to be as many heard as can be heard reasonably.

The CHAIRMAN. I know, but let us get at this other thing first. Mr. ROBSION. I am expressing myself as willing to come back after the vote over there and give others opportunity to be heard. Mr. MICHENER. What is the program, do you know, Mr. Chairman? If we have some important things coming up we ought to be there.

The CHAIRMAN. How many members of the committee can be back here at 3 o'clock?

Mr. MICHENER. I will come back unless there is some important legislation over there.

Mr. CHANDLER. I will.

The CHAIRMAN. That is settled, then, and we will meet back here at 3 o'clock.

(Discussion off the record.)

The CHAIRMAN. Who is the spokesman for the opposition? We will run until 10 minutes after 12.

Mr. FLETCHER. Mr. Chairman, I only wanted 5 or 10 minutes, not in opposition to the bill, but to suggest an amendment. I thought while the other gentlemen are organizing I might be heard, possibly. The CHAIRMAN. Yes. All right; we have agreed to hear you, and you may proceed.

STATEMENT OF R. V. FLETCHER, REPRESENTING ASSOCIATION OF AMERICAN RAILROADS, WASHINGTON, D. C.

Mr. FLETCHER. Mr. Chairman, my name is R. V. Fletcher. I represent the Association of American Railroads. My only purpose in appearing before this committee is to call attention to the very wide, broad language of this bill which might be by some people construed to include railroads subject to the Interstate Commerce Act so far as their rates are concerned, and subject to the Railroad Labor Act so far as their wages are concerned.

You will note that in the first section of the bill there is the use of the word "services." Now, would it be said, Mr. Chairman, that when the Government proposes to ship any Government freight by railroad or to tender for movement by railroad of troops or other persons for whom the Government is responsible, transportation for which the Government is responsible, that this bill now would be applied to the railroads by reason of the use of the word "services" as it appears here in the first section of the bill?

Now, I call attention to the fact that the railroads were not subject to the codes, not subject to the National Recovery Act, not subject to the President's Reemployment Agreement, as expressly ruled by the Federal Coordinator of Transportation in a memoran

dum which he gave to the public and which was sanctioned and ap proved by the President of the United States.

Now, we hope that we will not be put in the position

The CHAIRMAN. You mean now that the matter has been considered and you have been excluded by the consent of Government agencies from practically everything?

Mr. FLETCHER. From the National Recovery Act; yes.

The CHAIRMAN. You never had a code?

Mr. FLETCHER. We never had a code. We were not required to execute the President's Reemployment Agreement, for this very good reason, that the rates which were charged by the railroads are fixed, as we all know, by the Interstate Commerce Commission, and they could not increase their rates so as to pass on the expense to the public if they were required to undergo expense under the act.

Furthermore, so far as the hours of labor are concerned, they are fixed by law, the 16-hour law and the 9-hour law as applied to telegraphers and so on, are fixed by an elaborate body of congressional legislation.

Mr. ROBSION. Does not section 6 there give you protection?

Mr. FLETCHER. You mean the President would have the power to exempt us?

Mr. ROBSION. Yes; make exceptions.

Mr. MICHENER. He can do anything.

Mr. HESS. Recommended by an agency of the Government? Mr. FLETCHER. Recommended by an agency of the Government. Now, why force the railroads, who were not under the codes, to go to the doubtful method of trying to get some agency of the Government to recommend a thing to the President and then an order would exempt them from the provisions of the law?

So far as the wages are concerned, they are all fixed in contracts which have been made between the railroads and the organized railroad labor under the general supervision of the Government agencies, as provided in the Railroad Labor Act.

Senator WALSH. What contract or kind of contract does the Government make with any railroad?

Mr. FLETCHER. Why, it makes a contract to transport its material. Mr. HANCOCK. Carry the mails.

Senator WALSH. Carry mail, that is true.

The CHAIRMAN. That would come under the operation of the bill? Mr. FLETCHER. I am afraid so.

Senator WALSH. Anything that is in the nature of a written contract comes under the operation of the bill.

Mr. FLETCHER. A bill of lading is a written contract, Senator.
Senator WALSH. I suppose so.

Mr. FLETCHER. I apologize for taking your time. I would like to suggest to the committee that section 12 (a), if it is found on page 20, be so amended as to provide—

Nothing in this act shall be construed to apply to common carriers subject to the Interstate Commerce Act and to the Railroad Labor Act.

I do not think the exception should be made except that apply to both of these agencies, whereby the railroads are, and other carriers are put into a separate class by themselves entirely. They have their own code, Mr. Chairman.