Mr. ELLZEY. Are all of your workers on a piece basis?

Mr. O'CONNELL. Yes; except minor laborers and jobs that are performed by old people. I would say that 65 per cent of our plant is paid on a piece basis.

Mr. ELLZEY. Naturally these workers could protect their own wages when they are on piecework?

Mr. O'CONNELL. Yes.

Mr. ELLZEY. And if they were not on piecework, then the respon sibility for paying the same wages would be placed upon the manufacturer?

Mr. O'CONNELL. Yes.

The CHAIRMAN. If there are no further questions, let us hear the next gentleman.

STATEMENT OF JOHN W. EDELMAN, RESEARCH DIRECTOR OF THE AMERICAN FEDERATION OF FULL FASHIONED HOSIERY WORKERS, PHILADELPHIA, PA.

The CHAIRMAN. Who is your next witness, Mr. McMahon? Mr. MCMAHON. Mr. John W. Edelman, research director of the American Federation of Full Fashioned Hosiery Workers.

The CHAIRMAN. Please proceed, Mr. Edelman.

Mr. EDELMAN. Mr. Chairman and gentlemen of the committee, on this occasion I represent the Pennsylvania Federation of Labor, which has a membership of more than 500,000, which wishes to be recorded most emphatically as in favor of the measure proposed in the House of Representatives by this committee, of which Mr. Connery is chairman. I wish to stress the fact that the basic industries of a State such as Pennsylvania will require the enactment of this type of legislation in addition to Federal legislation if they are to survive under present conditions.

We wish to point out in answer to the point raised by the Congressman that we do feel that eventually minimum-wage legislation will be necessary to supplement any drastic hours legislation. However, at this particular time, the matter of constitutionality would dictate the very obvious matter that you raised, the one question in this bill; and later, when you have established that principle, you tackle the fundamental problems presented by minimum-wage legislation. We are endeavoring to enact State legislation on that question. I think that is the general position of those members of organized labor with whom I have discussed the question.

Mr. Chairman, let me say in a general way that the organizedlabor movement feels that questions such as were brought up here by Mr. Thom and dealing with the constitutionality of this bill are rather empty and distinctly beside the point. Our feeling is that those decisions were based on a conception of society that no longer exists, and that it is manifestly the duty of the Congress and all other legislative bodies to endeavor to bring about a recognition by regular agencies of the Government that the industrial revolution has actually arrived and the unemployment situation is as it exists now, and as Mr. O'Connell has indicated a mere willingness to accept the facts generated by the position of Congress would provide the Supreme Court, even without constitutional amendment, which probably is

ultimately required, ample reason for enacting a measure of this type in an effort to actually save society itself.

The CHAIRMAN. If this bill is enacted into law and the Supreme Court should review it favorably, then we would not need a constitutional amendment.

Mr. EDELMAN. We would not. It might be well to bring the Constitution up to date. However, the general question that we wish to stress is that it would seem the Government probably has a right to prevent society's committing suicide in the manner in which it is doing at the present time by permitting this chaotic condition to exist, and we stress the fact from our knowledge of industries in Pennsylvania, such as textiles, bituminous coal, and metals, and similar basic industries, that if the Government does not promptly enact legislation bringing some elementary measure of Federal regulation to bear upon those situations, the Government will be very definitely in the position of having to operate those industries itself, because they will be unable to operate as solvent institutions under the present system. That is the general point of view we wish to stress. We wish to point out, for instance, that ample experience, particularly in the textile and bituminous coal industries, drives home the fact that all efforts at voluntary regulation are completely futile, are absolutely beside the point, and that our employers have constantly told us at hearings in Harrisburg and in every other State where we have attempted to enact measures of State regulation, that they are in favor of Federal regulation. Our point is this: Call their bluff; give them an opportunity to show whether or not they really mean business.

Unless industry, which is on the verge of insolvency, is regulated in some measure, the governmental agencies will be faced within a very short time with a problem much greater than the mere question of the constitutionality of legislation of this character.

Mr. LOVETTE. You would not advocate the enactment into law of something admittedly unconstitutional would you?

Mr. EDELMAN. I certainly would.

Mr. LOVETTE. You would amend the Constitution by congressional enactment?

Mr. EDELMAN. No; it is obvious that

Mr. LOVETTE. You would bring the Constitution up to date?

Mr. EDELMAN. I think it is very obvious that, despite the attitude of many persons regarding the Adamson law, the crisis dictates a totally different view of the Constitution on the part of the justices of the Supreme Court, and I think a little educational work by Congress in that particular code over the views of constitutionality of the justices of the Supreme Court as well as of a great many other individuals would be helpful. I think that is rather obvious. Mr. GRISWOLD. You are taking the attitude that Chief Justice White, in writing his opinion of the Adamson law, had in mind the existing emergency of that time?

Mr. EDELMAN. Yes.

Mr. GRISWOLD. Do you not think a real emergency exists at this time?

Mr. EDELMAN. I think a very much greater emergency exists now than existed at that time. That has been pointed out by Mr. Justice

Brandeis with clarity, exactness, and moderation, and it can not be denied by any informed person. That would seem a mere statement of the economic situation that would penetrate those august personages and bring about, perhaps, a judgment that legislation of this character is well adapted to the needs of the present day.

Mr. ELLZEY. Is there any other solution that you would like to suggest or introduce?

Mr. EDELMAN. We need a reorganization of the credit machinery of the country. We have many insolvent institutions on our hands, and much of that is caused by the inadequacy of our credit system. Mr. ELLZEY. Do you think that our credit system has broken down?

Mr. EDELMAN. It is futile; it has completely gummed up the works.

We feel that minimum-wage legislation will eventually be required, and that a well-designed, thoroughly comprehensive system of social insurance, beginning with workmen's compensation, insurance against occupational diseases, old-age pensions, and unemployment insurance, will be necessary.

Those are our programs for a measure of stabilization in industry under the existing economic system. We feel that if those are not adopted within a reasonable period of time it will be impossible to prevent a very definite breakdown, a complete breakdown, of our social system.

Mr. ELLZEY. Do you think that a logical and safe expansion of our money system would help us?

Mr. EDELMAN. No; the position of labor would be on that point that no artificial tampering

Mr. ELLZEY (interposing). I said safe expansion.

Mr. EDELMAN. No mechanical manipulation of the system of exchange can alter the fundamental economic difficulties which industry faces. In a general way either inflation or deflation would produce an unfavorable reaction. It matters little which type of inflation or deflation policy is adopted, our feeling is that both would produce an unfavorable reaction after the immediate effects of the artificial stimulant.

Mr. ELLZEY. You think we shall have to readjust our entire credit system, which has been in use all these years?

Mr. EDELMAN. In a general way there has to be a readjustment. Mr. ELLZEY. You say that the credit system has completely broken down?

Mr. EDELMAN. Yes; we shall have to take it out of the hands of private banks. I think there will have to be some national reorganization of the whole banking system before a great many defects we confront may be eliminated.

Mr. LOVETTE. Our credit is too much restricted now, whereas it was too much expanded a few years ago.

Mr. EDELMAN. What happened was there was a tremendous sum available for investment in new plants and there was a very great disparity between those amounts and the amounts available for the consumption of those new plants. Unless the principle which is expressed in the Constitution when it speaks of various checks and balances in a social system can be applied to the modern eco

nomic situation, we will continue to create a condition of constant and permanent dislocation.

Mr. GRISWOLD. I understood you to say that the federation was opposed to inflation in our monetary system?

Mr. EDELMAN. I said that we feel that such is not the most practicable thing to do, and that any effect that might be created by a revision or modification of our present financial methods would be exceedingly temporary in effect and would be difficult to calculate and control.

Mr. GRISWOLD. Are you speaking officially for the American Federation of Labor?

Mr. EDELMAN. I do not think any position has been taken on that point, but those labor groups are associated with a labor group that is studying the monetary question. Our view is that it is dangerous and unsafe. The effects are so little susceptible to any accurate prediction that it would be highly unwise to engage in that practice unless we had in this country a better type of social control, instead of an economic system that may run wild and create such havoc as now exists.

The CHAIRMAN. If there are no further questions and the gentleman has nothing further to add, let us thank him for his statement and hear Mr. McMahon briefly.

STATEMENT OF THOMAS F. MCMAHON, INTERNATIONAL PRESIDENT OF THE UNITED TEXTILE WORKERS OF AMERICA

Mr. MCMAHON. I want to answer the gentleman who asked yesterday whether the reduction in wages was conveyed to the consumer. I find after some effort in the 1932 survey that there has been an average deflation in so far as the manufacturer is concerned toward the consuming public of about 30 per cent. The cost of the yard is governed entirely by the pound. They buy the pound of cotton and figure up the losses and sell it by the pound, so that they will know when inventories are taken just where they stand; and the public, if abused, is abused, not directly from the manufacturer of the cloth but by the distributor from the wholesaler or commission house to the retail merchant.

I want to say in justice to the employer that due to the chaotic condition in our industry that I agree with my predecessors that the condition of our industry is so chaotic that Congress shall have to do something to save the situation.

The CHAIRMAN. The hour of 12 having arrived, the committee stands adjourned to meet at 10 o'clock next Monday morning.

(Thereupon, at 12.05 o'clock p. m., Friday, January 20, 1933, the committee adjourned to meet next Monday at 10 o'clock a. m.)

Brandeis with clarity, exactness, and moderation, and it can be denied by any informed person. That would seem a mere st ment of the economic situation that would penetrate those au personages and bring about, perhaps, a judgment that legislati this character is well adapted to the needs of the present day. Mr. ELLZEY. Is there any other solution that you would E suggest or introduce?

Mr. EDELMAN. We need a reorganization of the credit mac of the country. We have many insolvent institutions on our and much of that is caused by the inadequacy of our credit Mr. ELLZEY. Do you think that our credit system has down?

Mr. EDELMAN. It is futile; it has completely gummed works.

We feel that minimum-wage legislation will eventuall quired, and that a well-designed, thoroughly comprehensiv of social insurance, beginning with workmen's compensatic ance against occupational diseases, old-age pensions, and u ment insurance, will be necessary.

under the existing economic system. We feel that if tho

Te

tion ZUN. I

SIX

Those are our programs for a measure of stabilization Yem adopted within a reasonable period of time it will be im. A Mall

prevent a very definite breakdown, a complete breakdov social system.

THOMAS

Mr. ELLZEY. Do you think that a logical and safe ex HEINTAH Mr. EDELMAN. No: the position of labor would be onx vant

our money system would help us?

that no artificial tampering

Mr. ELLZEY (interposing). I said safe expansion.

Mr. EDELMAN. No mechanical manipulation of the far

exchange can alter the fundamental economic difficu

produce an unfavorable reaction. It matters little

wh

sses and L

industry faces. In a general way either inflation or defe 200 inflation or deflation policy is adopted, our feeling is re ker would produce an unfavorable reaction after the imme. 10t rect

of the artificial stimulant.

Mr. ELZEY. You think we shall have to readjutant.

credit system, which has been in use all these years!

ustice to

save the si

Mr. EDELMAN. In a general way there has to be a r nistry th Mr. ELZEY. You say that the credit system has compar juriustry Mr. EDELMAN. Yes; we shall have to take it out of tax. The hour private banks. I think there will have to be some ned to meet at 10 ganization of the whole banking system before a great it 19.05 o'clock

down!

we confront may be eliminated.

Mr. LOVETTE. Our credit is too much restricted nov

was too much expanded a few years ago.

Mr. EDELMAN. What happened was th

available for investment in new

disparity between those amo

the consumption of those

is expressed in the Con

and balances in a so

Jurned to meet i