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The CHAIRMAN. Do you have in mind that these requirements would so limit you in an effort to get material and would so increase the hazards of your business as to make it uncertain and difficult and dangerous?

Mr. BARDO. There is no doubt about that in my mind at all because in any industry that I have ever been connected with one of the greatest difficulties you have is to get material of the right kind when you want it, when you had all the freedom and all the latitude in the world to go and get it.

The CHAIRMAN. Let me ask just one more question. If you had a provision in the bill, however, which would make the law operative only in the production of the material to be supplied, would that help the situation any?

Mr. BARDO. You say the production rather than the processing. Do you mean processing?

The CHAIRMAN. No; I mean everything.

Mr. BARDO. You mean the entire line?

The CHAIRMAN. Yes. Would that help you any?

Mr. BARDO. No; I don't think that it would.

The CHAIRMAN. Why wouldn't it help you?

Mr. BARDO. Well, it takes so much time to get people all over this country to understand what you are talking about.

The CHAIRMAN. If we had to stop with that we would quit trying to educate anybody, would we not?

Mr. BARDO. You just take the N. I. R. A.: It had the most elaborate machinery for setting up the situation that could be devised, and everything was directed toward an effort to have it understood, and they were really trying to understand it, but they could not get the industries of this country educated to what they were talking about in a year and a half. This is just a problem that cannot be done that way, Mr. Chairman. I do not mean to questionMr. ROBSION. I wanted to ask a question there.

The CHAIRMAN. Yes; go ahead.

Mr. ROBSION. There is quite a good deal of statement abroad that there is a surplus of various supplies of this country that would enter into these works. What effect would this bill have on the supplies that have already been prepared, processed, and so on?

Mr. BARDO. I don't see that this bill could honestly be applied as against materials that have already been manufactured. It would seem to me that if we are going to be fair about it

Mr. ROBSION. I know, but

Mr. BARDO. But I think the language of the bill contemplates that that stuff that has been prepared is exempt. I think that it very plainly contemplated that under the bill as it stands.

The CHAIRMAN. It seems to me that is probably the most serious thing about the bill-I do not know whether it would be so or notbut the possibility of it excluding you from the chance of drawing on accumulated reservoirs of material. Would you have to start in and make some new stuff?

Mr. BARDO. Yes; we would have to unless under this law the President, under section 6, as I recall it, or, rather that sectionThe CHAIRMAN. How did the codes work in regard to that?

Mr. BARDO. The codes were not effective. All we were required to do was to have a certificate that the man was complying with his code for his industry. That is all we were required to do.

Mr. MICHENER. At the time of the contract?

Mr. BARDO. At the time of the contract, that is all.

Mr. HEALEY. You are not required to do much more than that now, are you?

Mr. BARDO. Yes.

Mr. HEALEY. You have a written agreement that the man must comply with the code.

Mr. BARDO. Not only this, but it goes all the way down the line. The CHAIRMAN. This operates on the material already manufactured.

Mr. MICHENER. If the contractor acted in perfectly good faith, had everybody sign up as they should sign it, and it developed that the fellow away down the line had violated the code, was not living up to the code, the penalties of the bond would take effect on that contract.

Mr. HEALEY. Where is that in this bill?

The CHAIRMAN. It is in there.

Mr. WALTER. Mr. Chairman, this could not possibly apply to materials already manufactured, "since the effective date of this

act."

The CHAIRMAN. It would not exclude that material?

Mr. WALTER. No, sir.

The CHAIRMAN. Senator Walsh, would it exclude any material already manufactured by a person who is now complying with the code?

Senator WALSH. Yes, sir. The bill, first of all, gives notice that these conditions will begin 30 days after its passage. That is the first thing. Not materials manufactured in the past, but 30 days after this act goes into effect the Government is going to look at these things. Now, when you come to things already processed, the Government may require that from 30 days after this bill the processing of these things would have to comply with these conditions, as well as it requires it on future contracts. Otherwise anybody could violate all these labor laws prior to the time the Government went out to make its purchase and only make them enforceable in the future.

The CHAIRMAN. Let us get that clear, if you don't mind, Senator. Senator WALSH. Yes. Let us take, for example, shoes. I have a million pairs of shoes on hand now. All right. You must in your written contract show me that in the making of those shoes you have complied with these terms. We haven't on hand. We have to have a million in the future. You must show that in the doing of that in the future you have complied with these conditions.

The CHAIRMAN. Coming now to shoes-I don't know how long it takes to process leather. I don't know how long it takes to make leather.

Senator WALSH. Neither do I.

The CHAIRMAN. Assuming that the Government was under a necessity to have some shoes for its troops-I am just illustrating. Senator WALSH. Yes.

The CHAIRMAN. The tanners might be willing to begin now to comply with requirements, but we will say it takes a year to make leather. I don't know a thing about it. What would happen to a contract like that, if the leather had theretofore, in the period of processing, never been dealt with by people who were complying with these labor provisions?

Senator WALSH. Of course, that is the very reason for a provision in the bill giving the President elastic power. Innumerable cases of that kind will happen.

I want to say this, that it seems to me the argument after all is and admission that everybody has abandoned the labor standards set up in the codes. Otherwise, there is no difficulty in complying with them. Apparently since May 26 they have all run out. Mr. MICHENER. Is this a joint debate?

The CHAIRMAN. The Senator was invited to make some observations about it.

Mr. ROBSION. I did not get it clear yet, Senator Walsh. You say now, if there was a million pairs of shoes already made, and let us assume they were made in sweat shops violating the child-labor laws and hours and wages: Would not this bill, if it is passed in its present form, affect that million pairs of shoes?

Senator WALSH. If there was a million pairs of shoes bought now they would all come from sweatshops?

Mr. ROBSION. Yes.

Senator WALSH. But 30 days after this bill is passed and 6 months after that 30 days, if the Government wants to buy a million pairs of shoes, if they can get them in the market where these conditions have been complied with since 30 days it must take effect.

Mr. ROBSION. It would affect this million pairs of shoes, would it not?

The CHAIRMAN. Yes; the Senator says so.

Mr. ROBSION. It could do it?

Senator WALSH. It would exclude them 30 days after the passage of this bill, yes; although, if the Government really wanted the shoes

Mr. ROBSION. By the same token, it would exclude shoes made prior to the passage of the act?

Senator WALSH. Thirty days after the passage of this bill, if the Government sees fit to do so, it can require shoes made under these conditions in the past and in the future to be excluded.

Mr. BARDO. Mr. Chairman, with your permission I will proceed. Without questioning the right of the Government to prescribe such contract provisions as are necessary to insure responsibility of the contractor, is it necessary to invoke the drastic provisions of this act when every invitation to bid under present conditions contains the right to reject any or all bids? There are many industries that are qualified under present conditions who could not afford to take the risks involved under this bill if enacted. There are wide differences in the degree of skill required in the same crafts employed in industries.

The CHAIRMAN. Would it interrupt you if I asked you a question there?

Mr. BARDO. No, sir.

The CHAIRMAN. We are trying to get information. I would like to know why his risk would be any greater where the conditions with regard to wages are involved and conditions with regard to quality and material are involved. You said a while ago that if the subcontractor is found to violate the terms of his contract, why, of course, that contract would go out. But suppose he furnished you faulty material, would you not be in the same situation as you would be if you were dealing with a man who did not comply with the labor conditions?

Mr. BARDO. The difference there, Mr. Chairman, is this: If a faulty material were supplied, you are in control of that situation. You do not accept it, and that is all, and he has not furnished you anything. Now, that is something that you absolutely control yourself.

But now you are going on back here three or four industries back into the highways and the byways to fellows who furnish to you in the various processes the material to come up here to be fabricated. He has no control.

The CHAIRMAN. In one you examine the material and the other you have got to check up how he is working?

Mr. BARDO. Yes. He has no control over what those gentlemen do. He says to him, "Yes, we are complying with those provisions." He cannot send an officer out there to investigate. After 6 months he comes along and says he has not complied with these provisions. All of this material is in process. What are you going to do about it? You just cannot conceive of the confusion and the delay and the thing that you would do to basic industry generally by that sort of a thing.

Now, if we must have something of that kind, may I suggest that we do it as practical men?

The CHAIRMAN. What is the practical way to do it?

Mr. BARDO. Let us find out how this thing would work in a test ease, without putting somebody under pressure by this law. Let us take a concrete case, or half a dozen of them. We have got 6 months before you come back here and let us go into this thing like practical

men.

The CHAIRMAN. What do you mean by that? How would you go about it? Have the President offer bids? He would have to let it to the lowest bidder now, would he not?

Mr. BARDO. I have analyzed this not necessarily as a practical case. You would probably go back and review the purchase orders and the inquiries of a number of representative industries, and get a very definite idea as to just what those ramifications all are.

The CHAIRMAN. What are you going to do with the information after you get it?

Mr. BARDO. Why, I would tabulate it and see just what the effect would be.

The CHAIRMAN. You are already telling us what the effect would be.

Mr. BARDO. I am satisfied with what the effect is, but I think everybody else should be satisfied.

Mr. WALTER. The effect as it is now is that under sweat-shop conditions they would unload all their materials on Congress and the Government.

Mr. BARDO. Suppose they did? What would it amount to?
Mr. WALTER. It amounts to a great deal.

Mr. BARDO. Well, how much?

Mr. WALTER. If it does not amount to a great deal why are you objecting to it.

Mr. BARDO. Why, because 95 percent of the industries in this country are on the level.

Mr. WALTER. If they are on the level then why do they object to writing into their contracts permanent labor conditions that are reasonable?

Mr. BARDO. They do not object to writing into their contracts anything over which they have control.

Mr. WALTER. Then they certainly have control when they can handle the specifications right on down to every material man they are doing business with.

Mr. BARDO. My dear fellow, if you have got to find out what all the men back in your constituency are going to do, that is something that just cannot be done that way. Don't kid yourself about it, either.

These conditions are known, understood, and recognized by men and management alike. They would all be subject to change. Unrest would be created. Recognized differentials would be disturbed or destroyed. An almost never ending cycle of changes would follow and in the end would be finally settled by some one in far off Washington.

Competitive industry is in a constant state of flux. To submit its commercial activities to the overlapping strait-jacket proposed in this bill will not only retard recovery but ultimately destroy many small industries which will be forced out of the competitive field.

The grant or loan provision of the bill extends its scope into many activities beyond the contract phase. Loans to railroads and industries, and grants for highways and public works, and so forth, would entail the employment of an army of investigators and administrative officers if the act is to be enforced.

Under the National Recovery Act was created the greatest bureaucracy this country had ever known. When the Supreme Court held it clearly unconstitutional some of our well-known theorists shouted from the housetops that there would be chaos in industry and that wage levels would collapse. They ignored the fact, however, that American industry and the millions of workers employed therein had moved steadily ahead under their own power for 150 years, and since that momentous court decision there not only has been an absence of the predicted chaos, but today the industrial picture is brighter than it has been in years.

The CHAIRMAN. May I ask you a question right at that point; please, sir? Assuming, and I do assume, that 90 percent, you would say, of producers are on the level. It seems to me as a layman that if you have got 10 percent of the people chiseling under you all the time, with low wages and sweatshop conditions, it makes it pretty hard for the humane producer who wants to be decent to his people and everyone else. It seems to me you people would know of some sort of way to get some protection against that type of chiseling.

Mr. BARDO. Of course, there are a number of ways in which we can get protection. But after all, I look at it this way, and I think most industrialists do: He cannot have all the business anyway. Suppose

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