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Mr. BERMAN. No, sir; we are not. Our industry is barred from that because we are not in a position to compete, because we are trying to maintain a reasonable or a fair standard, and that is why we are barred.
Mr. McLAUGHLIN. You are bidding on them, but you cannot get them?
Mr. BERMAN. Yes, sir; we are bidding on them and we cannot get them.
Now, why should manufacturers be blacklisted in effect because they are trying to put through the policy of the Government in increasing purchasing power and maintaining decent standards?
Mr. Chairman, I could say a great deal more, but I do not care to infringe on your time.
Mr. GREGORY. The Members are very anxious to attend a roll call. You may submit the rest of your statement for the record if you desire. Mr. BERMAN. I would like to do that because it is in better shape.
A specific example will perhaps better serve to illustrate how the present method of Government purchasing has affected those garment manufacturers who have always maintained decent wage standards and working conditions, and has shut them out of securing their fair and proportionate share of this business.
When the Government decides that it needs to purchase a quantity of garments such as overalls (denim jumpers and trousers), the properly designated agency issues invitations to bid on the requirements. All of the materials such as cloth (denim), thread, buttons, buckles, labels, et cetera, are designated with ironclad specifications. The prices at which each bidder or garment manufacturer can secure these items is identically the same. They are staple materials and market prices are solidly established by their producers. It therefore can be seen that no bidder has any advantage over the others because of a possibility of making favorable purchases of raw materials. Construction details are likewise carefully specified and this permits no advantage to anyone for there is no possibility of deviation. The only place for a variation is in the labor cost and the bidder, who can chisel his labor to the point where he gets his garments made at the lowest labor cost, gets the order.
This regrettable and unfair situation has forced wages on Government garments to a low level, and the boldest wage cutters get these Government orders. Under the present system the Government is unknowingly forcing down wages in the garment industry. Wage cuts on Government orders reflect on wage scales for commercial garments. When a manufacturer achieves a low-wage level for Government garments, he applies the same measure of compensation to labor on other garments he produces. The effect of these wage cuts is then felt in competition on garments sold on the open market. The result of all this is that the standard of wages is continually lowered.
This rather briefly explains what has happened to the work-garment industry as a result of the Government policy of favoring the lowest bidder without regard for a wage policy.
The Walsh bill will correct this evil. It will give the garment manufacturer who pays decent wages an opportunity to secure some
of the Government contracts and will help maintain a fair standard of wages in the work-garment industry.
(The statement submitted by the linoleum and felt-base manufacturing industry appears in full, as follows:)
STATEMENT ON BEHALF OF MEMBERS OF THE LINOLEUM AND FELT-BASE MANU
FACTURING INDUSTRY IN OPPOSITION TO S. 3055
NEW YORK, N. Y., August 19, 1993). This statement in opposition to the above bill is submitted on behalf of all of the members of the linoleum and felt-base manufacturing industry, a list of said members being annexed hereto.
This bill has been carefully considered, and the members of this industry are unanimously cpposed to its passage for the reasons herein stated.
Attempts were made, under the National Industrial Recovery Act, to establish standards relating to conditions of employment, including hours and wages, on the ground that such standards were necessary to insure fair methods of competition. Such provisions were referred to as establishing fair methods of competition by requiring all competitors to conform to such uniform standards of employment. This bill, in effect, would produce the opposite results and bring about unfair methods of competition as regards conditions of employment.
In nearly every industry some, but not all, of the manufacturers engaged in the particular industry produce some materials and supplies and either sell them direct to the Government or to contractors or subcontractors for use in connection with Government contracts. In practically no instance (loes a single manufacturer sell the entire output of his plant for such Gover'liment contracts. If he sold, which is the usual case, a portion of his output for Government contracts, he would be required, under this bill, to agree to work his employees the hours and pay them the wages required under this bill. Competitive conditions in the particular industry might make it impossible anil impracticable, if not impossible, for him to differentiate between the employees working on materials and supplies for Government contracts and the rest of the goods produced in the same plant. Furthermore, any such supplier of Government materials would, in nearly every instance, be in competition with other manufacturers who may not be producing any goods for Government centracts, and the latter would not be required to observe the labor conditions set forth in this bill. The result would be utter lack of uniformity and create situations where unfair rather than fair methods of competition as applied to labor would develop. Certain changes in the code hour and wage provisions may be made in some instances which, under all circumstances, would be equitable and fair to all parties. Under these changed conditions a manufacturer may produce and put in stock a large amount of goods and later offer to sell the same to a contractor for use on a Government contract. Under this bill the manufacturer could not certify that the goods offered for sale were made by labor under the standards of employment set forth in the nullified, applicable approved code for that industry.
The foregoing effects obviously would be produced by this bill. Clearly, it is an indirect attempt to try to compel all industries, in the production of all goods, to observe outlawed code wage and hour provisions. The natural, direct, and inevitable effect of the operation of this bill is to extend its scope beyonil the actual labor employed in producing materials used for Government contracts. Even conceding that Congress may pass a law regulating hours and wages of all employees engaged in producing materials used only for Government contracts (although, possibly, Congress has not that power), when that power is used clearly for the purpose of regulating labor conditions unquestionably beyond the power of ('ongress, the law will direct its attention to that phase. The undoubted pui pose and necessary and inevitable effect of this bill is tu require observance of code labor provisions beyond those instances directly relating to Government contracts. That purpose and effect of the bill vitiates and invalidates the whole bill.
It is not only invalid, but unsound, and will result, as in the case of every invalid law, in greater and greater confusion and uncertainty in business dealings.
In opposing this bill, there is no thought of indicating in any way any change whatsoever in the basic policies as applied to labor, but merely to emphasize the fact that this bill is positively unfair and conflicts with even the code principles of unfair competition as applied to labor, for the obvious reason that it cannot be uniformly applied to all suppliers of materials for Government centracts.
Undoubtedly the same employees will be working on materials for both Government and private contracts. As explained, the bill has an extralegal effect of bringing pressure to bear upon any single manufacturer who might be interested in a Government contract so as to tend to force him to observe the labor provisions required by the bill as applied to all his employees, in order to get the Government contract. This he cannot do if his competitors who are not interested in the Government contracts are not observing those same standards. The bill has no direct force and effect whatsoever upon the competing manufacturers who are not interested in Government contracts. This will bring about a situation, as stated, which may properly be designated as unfair competition in these labor matters; and since this Federal law cannot be fairly, equitably, and uniformly applied to all purchasers of the commodities in ques.ion, it may properly be termed as unjust. It will result in the curious, impractical, and anomalous situation of establishing competitive inequality by the Government's attempt to discharge a moral obligation through a Federal law and extralegal pressure. These objections to the bill are not saved by the provisions authorizing the President to make exceptions in accordance with the general and indefinite standards set forth in the bill.
In addition to the reasons furnished above, this industry is opposed to the bill because the constitutionality of the bill may be challenged and, as in every other such case, confusion and uncertainty in business dealings is created until the law is either sustained or invalidated. Respectfully submitted.
LINOLEUM AND FELT BASE MANUFACTURERS ASSOCIATION, By JESSE R. SMITH.
R. E. FERRY, General Manager.
MEMBERS OF THE LINOLEUM AND FELT BASE MANUFACTURING INDUSTRY
Armstrong Cork Products Co., Lancaster, Pa.
The Paraffine Cos., Inc., San Francisco, Calif., and the Cott-A-Lap Co., Inc., Somerville, N. J.
Sandura Co., Inc., Philadelphia, Pa.
(Whereupon, at 5:45 p. m., the committee recessed until 10 a. m. the following morning, Tuesday, Aug. 20, 1935.)
CONDITION OF GOVERNMENT CONTRACTS
TUESDAY, AUGUST 20, 1935
HOUSE OF REPRESENTATIVES,
Washington, D. C. The committee reconvened in the hearing room at 10:20 a. m., Hon. Hatton W. Sumners (chairman) presiding.
The CHAIRMAN. We would like to know what witnesses there are here today who have not heretofore testified before the committee. We would like to have a list of the opponents. Mr. Myles, will you be good enough to get the list of the gentlemen here who are in favor of the bill and hand up the list with the length of time they feel they will have to have?
Mr. Zimmerman, I think we can hear you now while that is being done.
STATEMENT OF HON. ORVILLE ZIMMERMAN, A REPRESENTATIVE
IN CONGRESS FROM THE STATE OF MISSOURI
The CHAIRMAN. Mr. Zimmerman, you are appearing in opposition to the bill, as I understand it? Mr. ZIMMERMAN. Yes, sir.
The CHAIRMAN. Give your name to the reporter and proceed, Mr. Zimmerman.
Mr. ZIMMERMAN. Orville Zimmerman, Representative Tenth District of Missouri, which comprises the southeast corner of the State of Missouri. My district is about 100 miles north of Memphis and about 150 miles south of the city of St. Louis.
Now, gentlemen of the committee, in view of the far-reaching scope of this bill it would seem to me that this matter should not be rushed through this committee or through Congress, but that this subject and the matters proposed in this bill should be given close and extensive study in order that the right thing might be done about the matters that are contained in this bill.
I want to say this, as a representative of rural Missouri and as a representative of a great many shoe and garment factories in my district, I should like to have the privilege and the opportunity of bringing witnesses here before this committee and give you men the real facts about that situation and a vivid picture of conditions which obtain in my district and in other districts in Missouri and adjoining States, in order that intelligent legislation may be enacted which will not be detrimental to certain sections of our country, particularly in the West and in the South.