and they even load the cars automatically, so that hands never touch them. But the cigar industry, I think, is facing a more intense development than almost any other industry, but they are all rapidly developing. Mr. RAMSPECK. The same is true with the cigarette industry. They have automatic machine operation in that. The CHAIRMAN. Mr. Smith, I have always felt along the lines that Mr. Wood has just stated, that this committee is particularly facing these problems. I think a shortening of the hours, say, the 30-hour week, 5-day week of 30 hours with the same wages that were paid before for a 40-hour week or a 50-hour week is all right. The Wagner bill, which would give labor its wage raise under collective bargaining, may not cover two other propositions. One of them is your machine doing away with labor-2 girls working where 7 men worked before, and the other is the age of a man, after 40, not being given any employment in any job at all. A Now, what applies to the cigar industry applies to shoes and textiles. They are gradually putting in machines that are in turn putting the men out of work. They will put 1 man on 6 looms in a woolen mill where previously they had 1 man on a loom. man goes on the six looms and he is on the job all day long. He is on the jump. That is one of the problems that has come up, but it is not a problem of this committee. If it were, we would take charge of it, but it is a problem in taxation which goes to the Ways and Means Committee. I agree with Mr. Wood that we have this problem and that we must shorten the hours of labor and increase the wages of labor, and the Wagner-Connery bill proposes to give labor its full rights. Then in your unemployment insurance you will derive other benefits so that when a man is thrown out of employment he will be paid, and there is no doubt that they will not be anxious to throw a man out and then have to pay him when laid off through unemployment insurance. And then in regard to the man above 40 years of age-it used to be 45 years, and now when they get to 40 they drop them out. We want you to know that this committee can legislate on these various problems except that of taxing the machines, and this committee has been doing it for 3 or 4 years. We have been trying to get legislation that will take care of it. Mr. SMITH. Yes; and our purpose up there in Pennsylvania appears to be to get a cooperative program to save the industry-that is, the hand-making cigar industry. You understand from my statements in the small brief which I just read that the survey last year showed that many of the men, the manufacturers, were losing money, and some only operating on a small profit, so that our petition or our problem is a cooperative one among the cigar makers and the manufacturers of hand-made cigars and the people profiting directly or indirectly by the industry. The CHAIRMAN. Of course, you always have the selfish interest of the man who is putting the machine in. He will not cooperate with the makers of hand-made cigars, even if the people starve. That is not his business and he is running his business and he is going to make a profit. Mr. LESINSKI. What do these two girls get for the two-8-hour day machine running? Mr. HAINES. I think I can answer that. Mr. WOOD. What is it? Mr. HAINES. Twenty-nine cents an hour on the machine, minimum. Mr. WOOD. In some instances it is lower than that? Mr. HAINES. On the hand makers it is 27 cents. They make the two-for-5-cent cigars. They are compelled to stick to the manufacture of these two-for-5-cent cigars because they cannot go out in the highly competitive market and get the 5 cents. The CHAIRMAN. I want to call the attention of the committee to the fact that it is 7 minutes to 12. Mr. HAINES. You might do what they have done in Germany. They do not allow them to use the automatic cigar machines. Mr. RAMSPECK. I want to get this in the record, that for manufacturing cigars by machinery the hourly cost is 58 cents as compared with the hand cost of $1.89 an hour for the same production. Mr. HAINES. I have just been told that the wages that are now being paid to the operators of the machines are as follows: The first 2 weeks they get $6 a week, the second period of 2 weeks they get $8 a week, and the third period of 2 weeks they get $10 a week, and after that they are paid the minimum. The CHAIRMAN. And another thing, if the President succeeds in getting these power companies to lower their rates it will be even less than 58 cents, because the electricity on the machines will cost them 5 cents less, so that will reduce the cost that much more to the manufacturers. Mr. WOOD. I would like to ask one question: In what way has the code, that is, the code established for the cigar industry, benefited that industry? The intention of the National Industrial Recovery Act, of course, was to increase wage conditions and shorten the hours of labor and generally help employees of that industry. Now, has the establishment of the cigar code in any manner benefited the hand worker? Mr. SMITH. No. Mr. HAINES. Oh, yes; Mr. Smith, it has. Mr. SMITH. I mean in reference to the employment. Mr. HAINES. They have had a 50 percent increase in wages. Mr. SMITH. Yes, in wages, I would say, but I mean employment. It really gave the machine interests the benefit and resulted in unemployment; that is, in regard to people working in the hand industry. The CHAIRMAN. Wouldn't it have this effect: It costs the small manufacturers vastly more to produce 100 cigars in wages comparatively than it does now the large manufacturer. Mr. SMITH. It does in regard to the machine interests; yes. The CHAIRMAN. So that the only difference between the large and the small manufacturers is that the large manufacturers are given a greater advantage over the small manufacturers in the marketing of the cigars due to the lower cost of the machine-made product? Mr. SMITH. Yes, sir; that is the position exactly. Mr. RAMSPECK. I would like to put this further calculation in the record. Under the wages paid to the machine operators as compared to hand operators there is a saving of $1.31 an hour in wages, of which amount 4 cents is based on those two employees left and not eliminated by the machines and $1.27 goes into the pockets of the owners of the machine. The CHAIRMAN. If there are no further questions, we thank you, Mr. Smith, for your testimony and you can be sure that this committee will do everything it can in the matter. (Mr. Smith submitted a copy of the petition and a cost sheet, which are as follows:) COST OF MANUFACTURE Two 58 soft work unit, price $2,500. Basis: Number of operators, 2; speed per minute, 10; actual production, 4,000 (in 8 hours); actual production, 20,000 (week, 5 days); actual production, 900,000 (45 weeks); actual production, 1,000,000 (50 weeks). We, the undersigned citizens of York and Adams Counties, and vicinity, in the State of Pennsylvania, concerned and employed in the manufacture and distribution of hand-made cigars whereby this cigar might be produced and marketed at a fair profit and afford to labor an adequate living wage, cooperatively represent: Chaotic 1. That the danger of mechanization of our industry is imminent. conditions would follow such a movement, seriously affecting the lives of all who are dependent upon the hand cigar-making industry as a means of livelihood. 2. That immediate action for the protection of our industry, our homes, and our people is vitally necessary. 3. That humanity must not be sacrificed in the effort to exploit automatic machinery to the highest degree of efficiency. 4. That only girls are employed on automatic cigar-making machines, leaving the heads of families unemployed. Approximately only 30 percent of the girls attempting to operate these machines acquire sufficient speed to be retained as qualified employees. 5. That the manufacturers of hand-made cigars are compelled to compete with machine manufacturers who have a decided advantage over hand manufacturers in production costs. 6. That labor, with depleted pay envelopes and unemployment, will be forced upon the mercies of relief or the dole. 7. That automatic machines replace man power at the alarming rate of 30 percent to 300 percent per machine. Newer and faster machines are being introduced periodically in our industry, imposing hardships upon manufacturers and their employees in the hand-made cigar industry, depriving us of human rights which are inherently ours. 8. That but a small percentage of the hand cigar-making industry will survive if mechanization is permitted. 9. Therefore we, who are directly or indirectly concerned and affected where labor-displacement machinery is being operated, do endorse and support this petition to regulate automatic machine operation to eight (8) hours per day, forty (40) hours per week, and in no case to exceed the number of hours per day man is permitted to work. On these premises, we contend, the hand cigarmaking industry might be saved to operate at a fair profit and afford to labor an adequate living wage. The CHAIRMAN. We will meet tomorrow morning at 10 o'clock, when we will hear President Green of the American Federation of Labor. (Thereupon, at 12 noon, the committee adjourned to meet tomorrow, Wednesday, Mar. 20, 1935, at 10 a. m.) LABOR DISPUTES ACT WEDNESDAY, MARCH 20, 1935 HOUSE OF REPRESENTATIVES, The committee met at 10 a. m., Hon. William P. Connery, Jr. (chairman), presiding. The CHAIRMAN. The committee will be in order. Gentlemen, it is not necessary to introduce the witness we have before us this morning. We have the honor of having with us William Green, the president of the American Federation of Labor. Mr. Green, we shall be very glad to hear you. STATEMENT OF WILLIAM GREEN, PRESIDENT AMERICAN FEDERATION OF LABOR Mr. GREEN. Mr. Chairman and members of the committee, I am happy to come this morning and meet with you and present to you the urgent appeal-not only the recommendation, but the urgent appeal of the American Federation of Labor that H. R. 6288, the bill under consideration this morning, be enacted into law. The American Federation of Labor regards this bill as of major importance. The workers back in the towns and villages and cities throughout the Nation entertain the same point of view. We have here this morning a committee from McDonald, Ohio, representing the steel workers. They have brought to Washington a petition signed by 20,000 steel workers appealing to Congress to enact the Connery-Wagner Disputes Act into law. These petitions were signed voluntarily. I did not even know that they were being presented here until the committee advised me they were here with the petitions. It was spontaneous, voluntary. One cannot fail to understand, when a committee of that kind comes to Washington with petitions signed by 20,000 names, that there is a deep-seated sentiment existing among the workers in support of this measure. I should like the representative of this committee to be given the opportunity of saying a word to you about it, following the submission of my statement. The CHAIRMAN. We shall be glad to hear him. Mr. GREEN. I have a brief statement to make, Mr. Connery, and I shall probably supplement it by interpolations as we go along. The CHAIRMAN. Please proceed. 197 Mr. GREEN. For the past 10 days representatives of labor have presented before your committee and before the Senate Committee on Education and Labor the experience of workers under section 7 (a) of the National Industrial Recovery Act and under Public Resolution No. 44. I shall not today attempt to place before you in detail the methods which have been used by unscrupulous and ruthless employers to defraud workers of their rights under section 7 (a). Every member of this committee is, I am certain, familiar with the sorry story of subterfuge and evasion by which employers have avoided their duties and responsibilities under section 7 (a). They have resorted to every kind of trickery, and the boards set up to enforce the law have been denied the power which is essential if they are to make the law function. Evasions of their duties by employers have been consummated through discrimination of every sort through discharge, through the creation of company unions and the subsequent evolving of the doctrine of the minority representation to protect those company unions; by the use of the great financial resources which many employers control to prevent or destroy organization, and by the use of the courts to delay or prevent the holding of elections. Company unions, dominated and controlled by employers, have been established far and wide in order that the bargaining agency of the employees might be directly under the thumb of management. Tremendous expenditures have been made by employers in fostering company unions and in many cases these unions have been made a primary condition of employment. Many companies have used elaborate and costly spy systems to assist them in breaking down the self-organization of their employees and in building up their company unions. The effect of all these practices has been direct and tragic upon thousands of workers. It is to correct these conditions that the Connery bill has been proposed. Employers must keep hands off, completely, so far as labor organizations are concerned. Any other course of action cannot be reconciled with the belief which we all profess that employees are free citizens of the United States, and are not a menial or servant class, subservient to and controlled by the employing class. I hold that the employers of labor have no right, either morally or legally, to interfere in any way with the exercise of the right of the workers to join a union of their own choosing. And yet we find large corporations, like rubber, steel, and automobiles, engaged actually in organizing competing unions, or company unions. Following the decision of the National Labor Relations Board ordering elections in the Firestone, Goodrich, and Goodyear Tire & Rubber companies, in order to determine the bargaining agency which the workers wished to select by a majority vote, through which they could deal with their employers, these corporations employed hundreds of men in their plants for the purpose of organizing, fostering, and maintaining company unions, established by the companies inside the plants. That is coercion; that is intimidation of the worst kind. The tragic feature of it is that they used the funds of these workers; the company held the earnings of the workers for the pur |