down the directorates and found they held 3,741 directorates in public utilities, insurance, transportation, manufacturing, and other corporations. Therefore I am not putting the whole responsibility for the breakdown of collective bargaining on the industries themselves. The CHAIRMAN. I think that is very important. I know that you have had the same experience and every member of the committee has had the same experience. I maintain that almost all the cuts in wages in manufacturing may be accurately traced directly to the door of the bankers. Moreover, these bankers have forced reductions in the wages of city employees as well. When the cities go to the banks to borrow money they have been told to cut the wages of their employees. The city of Peabody in my own State wanted to borrow some money and the bankers to which it applied told Mayor Sullivan to go back home and cut the wages 10 per cent. The mayor put economy measures into effect, not including a reduction in the salaries of city employees. When the mayor returned to the bankers to borrow the money he reported that the city had effected economies of 10 per cent but they had not been required to reduce wages. The bankers said, "We told you to to go back and cut the wages of your employees, and you will have to do it before you can get this money." That is one example. A banker friend of mine who has some friendship for labor told me that on numerous occasions in Boston when the manufacturers would go to the bankers for a loan the manufacturers would be told by the bankers to cut wages, not dividends, or they would not get the money. That, I believe, is the trouble with the United States to-day. Mr. FREY. I have information that will definitely prove your statement. Mr. RAMSPECK. Referring to the directorships, do your studies of that matter include the size and extent of those corporations? You have stated that those bankers held 3,741 directorships. Are those the larger companies like the chain-store groups? Mr. FREY. They include the largest insurance companies in the country, the largest railway lines in the country, the largest steamship transportation lines. Mr. LOVETTE. How about power companies? Mr. FREY. I would like to have the members of the committee see my material, because I have broken it down in two ways. Mr. LOVETTE. I am very much interested in it. Mr. FREY. I should be delighted to have you come to my office to see my data. An article dealing with this subject will be off the press shortly. I have taken the interlocking directorates and broken them down the other way and taken the corporations on which the banks' directors sit. Then they are listed by directors and corporations. You can find that the directors of seven private banks in New York City sit on the Chase National Bank board. You can understand, of course, how these securities are passed down the line. The CHAIRMAN. Here [indicating] is an advertisement from the Boston Herald that I received a few days ago. It is an advertisement against the Economy League. I should like to insert a part of it in the record. It says, in part, "Just a pleasant reminder to the home owner and the business men who are making no profit and are struggling to keep their organizations together. Here are some of the depression dividends paid in 1931 in Massachusetts: Northampton Electric, 50 per cent; Attleboro Electric, 40 per cent; Malden Electric, 27 per cent; Gloucester Electric, 22 per cent; Quincy Electric, 48 per cent; Worcester Electric, 32 per cent; Lynn Gas & Electric, 23 per cent; and Boston Edison, 13.6 per cent. Mr. ELLZEY. The gentleman from Massachusetts should indorse the program of Mr. Roosevelt in the development of Muscle Shoals. The CHAIRMAN. I have always been for that. Mr. FREY. American industry can not get back to where it was in 1929, just as we can not get back to pre-war conditions. If technological production continues, and it will, the possibility for employment is going to be continually reduced unless some arrangement is made to prevent it. Probably the soundest statistician of this country in labor matters is Mr. Ethelbert Stewart, former commissioner of the Bureau of Labor Statistics. While he was yet Commissioner of the Bureau of Labor Statistics of the Department of Labor I went to him when I wanted to know something about the future so far as production facts were concerned and he gave me some estimates based upon the data gathered by the Department of Labor. One statement was to the effect that if all of our manufacturing establishments had been working at their full capacity on a 4-hour day in 1929 we would have produced considerably more than we actually did. On a 4-hour day we would have produced more, which means that the industrial equipment was not functioning as it could be made to function. Then he gave me a little vision of what was possible. He stated that if all of our blast furnaces were as efficient as the most efficient, the present production of pig iron could be secured by the employment of 3,000 men instead of 28,000 now employed; if our sawmills were operated as efficiently as the best, 45,000 men would do all the work now being performed by 292,000; if our coal mines were operated on the basis of our most efficient, 420,000 men could do the work now requiring 750,000; if our boot and shoe factories were all operated as efficiently as the best equipped, 28,084 boot and shoe workers would produce the same amount as are now turned out by 196,585 workers; a brickmaking machine in Chicago now produced 49,000 bricks per hour with one worker, and if all brickyards were operated as efficiently, 80 per cent of the brickmakers now employed would be thrown out of work; if agriculture was carried on as efficiently in all of the States as in Illinois, 3,513.081 farmers and farm laborers would produce what now requires the labor of 8,132,453 men and women, yet the production of farm products per capita employed in Illinois is not so great as in Iowa. Efforts which labor has made to work out the problem with management and financiers have failed. Personally, I have a belief that legislation is not the better way of dealing with many industrial problems. It seems to me that there should be a sufficient interest in the welfare of the country to cause those who control management to sit down with labor and work out these problems instead of excluding labor from every consideration of the problen of production that has been carried on both by the bankers and the big industrialists. They have simply but unmistakably pushed labor out. down the directorates and found they held 3,741 directorates in public utilities, insurance, transportation, manufacturing, and other corporations. Therefore I am not putting the whole responsibility for the breakdown of collective bargaining on the industries themselves. The CHAIRMAN. I think that is very important. I know that you have had the same experience and every member of the committee has had the same experience. I maintain that almost all the cuts in wages in manufacturing may be accurately traced directly to the door of the bankers. Moreover, these bankers have forced reductions in the wages of city employees as well. When the cities go to the banks to borrow money they have been told to cut the wages of their employees. The city of Peabody in my own State wanted to borrow some money and the bankers to which it applied told Mayor Sullivan to go back home and cut the wages 10 per cent. The mayor put economy measures into effect, not including a reduction in the salaries of city employees. When the mayor returned to the bankers to borrow the money he reported that the city had effected economies of 10 per cent but they had not been required to reduce wages. The bankers said, "We told you to go back and cut the wages of your employees, and you will have to do it before you can get this money." That is one example. A banker friend of mine who has some friendship for labor told me that on numerous occasions in Boston when the manufacturers would go to the bankers for a loan the manufacturers would be told by the bankers to cut wages, not dividends, or they would not get the money. That, I believe, is the trouble with the United States to-day. Mr. FREY. I have information that will definitely prove your statement. Mr. RAMSPECK. Referring to the directorships, do your studies of that matter include the size and extent of those corporations? You have stated that those bankers held 3,741 directorships. Are those the larger companies like the chain-store groups? Mr. FREY. They include the largest insurance companies in the country, the largest railway lines in the country, the largest steamship transportation lines. Mr. LovETTE. How about power companies? Mr. FREY, I would like to have the members of the committee see my material, because I have broken it down in two ways. Mr. LoverTs. I am very much interested in it. Mr. FREY, I should be delighted to have you come to my office to see my data. An article dealing with this subject will be off the press shortly. I have taken the interlocking directorates and broken them down the other way and taken the corporations on which the banks' directors sit. Then they are listed by directors and corporations. You can find that the directors of 2 private banks in New York City sit on the Chase Natio understand, of course, how these sec The CHAIRMAN. Here indicatio Boston Herald that I recei ment against the Beon of it in the record, the home owner an 07 pors y met taina accur Se bar m ב told whic he w et, not When orted t not be you to are struggling to keep their organizations together. Here are some of the depression dividends paid in 1931 in Massachusetts: Nort ampton Electric, 50 per cent: Attleboro Electric, 40 per cent; Mar 22 Electric, 27 per cent: Gloucester Electric, 22 per cent; Quincy Le tric. 48 per cem: Wirrester Electric, 32 per cent; Lynn fræi & Electric, 23 per cent: and Boston Edison, 13.6 per cent. Mr. ELLZET. The gentleman from Massachusetts should income the program of Mr. Roosevelt in the development of Mu986The CHAIRMAN. I have always been for that. Mr. FREY. American industry can not get back to where it in 1929, just as we can not get back to pre-war conditions. 11 wou nological production continues, and it will, the possibility for enployment is going to be continually reduced unless some arrange ment is made to prevent it. Probably the soundest statistician of country in labor matters is Mr. Ethelbert Stewart, former comm sioner of the Bureau of Labor Statistics. While he was yet Commissioner of the Bureau of Labor of the Department of Labor I went to him when I want to something about the future so far as production fact. cerned and he gave me some estimates based upon the cats g by the Department of Labor. One statement wa 1 ts * if all of our manufacturing establishments had toss their full capacity on a 4-hour day in 1929 we Yong fact considerably more than we actually did. On $50. have produced more, which means that the ind not functioning as it could be made to function little vision of what was possible. abor i be He stated that if all of our blast furnace was be labor of 8,132,453 men and women, yet for pay Efforts which labor has made to work ga not the better way of a sy It seems to me that 646 WIR it down with laten was wo *to* from wys y sudopády, There is no method of distributing labor except through legislation at the present time, but as I have said, it is not, in my opinion the better method. However, I do want to say this, that if something really effective is not done very soon we are going to face a most serious condition, the most serious that this country has ever encountered. It seems to me that it is a truism that when large numbers of men are unemployed it is positive evidence that those employed are working too many hours, and they are therefore not giving the other fellows, the idle workers, an opportunity; and if industry and finance have shown themselves incompetent over a long period of years to deal with the most serious industrial problem this or any other civilization has ever faced, and they have, then I think it is the duty of the Congress to do something effective to put an end to these conditions. Mr. LOVETTE. Let me ask you my stock question, Mr. Frey. Have you any suggestion to offer, assuming that this bill is unconstitutional and will be so declared by the Supreme Court? I mean this bill, which would limit the hours of labor through the interstate clause of the Constitution. Let us assume that this bill is unconstitutional and we can not get by the Supreme Court with it. What suggestion have you, if any, about controlling the hours of labor in crder to properly distribute labor? Mr. FREY. When men are driven to a certain point they begin to do things that are not provided for in law. Farmers out West are trying to meet a situation whereby they will have saved their own farms, when they are preventing the loss of their farms because there has been a change in the purchasing and the debt-paying value of a dollar. In my own experience as an iron molder I found that when we could not get conditions in the shop which we felt were proper we would not work and we were able to lead such a large number of molders to feel the same way that little by little the system of collective bargaining was developed and maintained, because it was better than any other method. We can not continue this way, with millions of men unemployed; those men are not going to stand by idly. Again, millions who are employed, some of them part time, are not going to constantly face the prospect of being discharged and remaining idle. What they will do, I do not know. Mr. LOVETTE. And now you could not very well effect collective bargaining with those at work, because it is not reasonable to expect them to strike in order to let their fellow men get bread. Mr. FREY. Do not think that I am intimating that the strike is the way. There is something more powerful than the law; there is something more powerful than any other force in our civilization, and that is public opinion, and we are educating, or trying to educate, that enlightened public opinion. We are giving the facts which these statistics show, and we may depend upon it that public opinion will do what the law-enforcement officers can not do. Drinks for a good many years were hard to get in certain communities because of the overwhelming sentiment against drinking, while in other communities it was difficult to keep away from drinks because they were being offered to one all the time. That was the exercise of public opinion upon the problem of drinking. |