impair, or invalidate the remainder of this Act and the application of such prevision to other persons or circumstances, but shall be confined in its operation to the clause, sentence, paragraph, or part thereof directly involved in the controversy in which such judgment shall have been rendered and to the person or circumstances involved.

EFFECTIVE DATE

SEC. 41. This Act shall become effective thirty days from the date of approval thereof by the President of the United States.

RIGHT TO ALTER, AMEND, OR REPEAL

SEC. 42. The right to alter, amend, or repeal any provision of this Act is hereby reserved to the Congress.

SHORT TITLE

SEC. 43. This Act may be cited as the "National Textile Act."

Mr. KELLER. Ladies and gentlemen, we were put into this room at a very late date. We expected to use the smaller room, that is, the Labor Committee room, but there were a couple of other investigations taking place so we gave up that room and came over here. You will appreciate why we are trying to get things adjusted here

now.

We want to have this hearing be to the advantage of everyone who is directly financially interested in the bill in one way or another. I know that every one of you will appreciate what we are trying to do and will help us by keeping the very best of order. We will ask that everyone speak so that others may hear without any difficulty.

I am going to introduce first the author of the bill that is under consideration at the present time and ask him to make a general

statement.

STATEMENT OF HON. HENRY ELLENBOGEN, A MEMBER OF CONGRESS FROM THE STATE OF PENNSYLVANIA

Mr. ELLENBOGEN. Mr. Chairman and members of the committee, may I say that I would like just briefly to go over the bill, section by section, and give a short explanation of each section, and then introduce witnesses. Then I should like to ask permission from the committee at the end of the hearing to present an argument for the bill and endeavor to show to the committee that the bill should be favorably reported.

The purpose of the bill is to provide regulation of labor conditions and fair-trade practices in the textile industry. Even in 1929, at the height of prosperity, the textile industry was well on its way down. Extravagantly expanded during the war-time period, it took a nosedive in the middle twenties from which it has never recovered.

In this bill we attempt to preserve those features of the N. R. A. that have proven successful and include only those sections that we feel are of value to the industry.

The bill contemplates the regulation of fair trade practices for the purpose of protecting the honest employer against chiseling fellow employers and establishes minimum standards of labor, so that one of the chief evils in the textile industry, the competition between employers at the expense of labor, will be eliminated.

Section 1: In section 1 you will find certain findings of fact. Those findings of fact will present a picture of facts in the industry

and are necessary to establish the jurisdiction of the Congress to legislate on the textile industry.

I will very briefly mention a few of them. For instance, on page 2, at the top of the page, I would invite the committee to follow me briefly through the bill for just a few minutes so that when sections are referred to later they will have the benefit of it. On the top of page 2 you will find, for instance, that the production of textile products in the United States and their distribution throughout the United States and foreign countries is affected with a national public interest.

The bill does not attempt to regulate production. It only attempts to regulate the distribution of textile products, and only the distribution of such products as may be in interstate commerce. We feel that the Congress has the privilege to say that certain products, which are manufactured in a way so as to adversely affect the flow of interstate commerce, can be eliminated from such interstate commerce and its entry into interstate commerce can be prohibited.

Subsection 2 of section 1 finds as a fact by the Congress that the flow of raw cotton, wool, silk, and other raw materials and supplies from certain States and from foreign countries to textile mills, form a continuous stream in interstate commerce.

Section 3 goes on to recite the history. In recent years this flow of interstate and foreign commerce in textile products has substantially declined in value and amount, has been subject to severe price instability, has been diverted in large quantities from certain States to other States and from certain mills to other mills by reason of unfair competition in wage rates and other conditions of employment, and in that way has adversely affected interstate and foreign commerce in textile products.

Subsection 4 says that such effects upon interstate and foreign commerce in textile products have been caused directly and primarily by the instability of wage rates and other labor costs in the production of said products.

I will not go into the other subsections, but they are all findings of fact necessary to establish the jurisdiction of the Congress over the interstate flow of textile products.

Section 2 continues the findings of fact and contains a legislative determination.

I would like to call the attention of the committee to page 5, subsection (b), which lays down the policy which has guided us in drafting this act. I will read it, if I may. This is line 8, page 5, subsection (b).

(b) It is hereby declared that the existence of the evils in the textile industry as set forth in sections 1 and 2 of this Act is contrary to the public interest and to the policy of Congress, that it is the policy of Congress to remove these evils by this Act, and that it is among the purposes of this Act

Those next two subsections are of great importance.

(1) to deny the use of the channels of interstate commerce for the perpetuation and accentuation of such evils; and

(2) to deny the use of the mails, the benefits of Government purchases, contracts, loans, and grants, and the privilege of registration of securities to any person producing textile products under said conditions or contrary to the standards set forth in this Act.

Those are the clauses in the Constitution under which we believe we have jurisdiction. And I would just like to go into that for a moment or two.

No. 1: We feel that the interstate commerce clause gives the Congress power to regulate the flow of products in interstate and foreign commerce. The committee is going to hear a great deal about the constitutionality or alleged unconstitutionality of this bill. It is going to be said, as it has been said in letters to me, that the decision on the N. R. A. which was handed down by the Supreme Court last year and the decision on the A. A. A., handed down just a few weeks ago, shows that the act is unconstitutional. Aside from the question of the constitutionality-and we feel that the act is -constitutional-I would like to call the attention of the Committee to the nature of these two decisions.

The decision on the N. R. A. certainly does not contain anything that would in any way affect the constitutionality of this bill. The N. R. A. decision is based upon two points. The first point is that the Congress illegally delegated its powers to make laws by failing to set the standards and determine the rules by which the Executive discretion must be guided in laying down rules and regulations for the industry; that is, the delegation of powers was at fault in the N. R. A. But that cannot be said to be the case here. Some of the details are, perhaps, rather too minutely worked out. But surely there cannot be any question of an illegal delegation of power in this

bill.

The second principle laid down in the N. R. A. case is that the killing of chickens in the market of New York is not in the flow of interstate commerce but is purely a local affair. After the end of the journey, after the poultry has been in interstate commerce and lands in New York and leaves the hands of the man who shipped it, and it is sold to a man who does the killing and the selling in the local market, the interstate journey is ended and, therefore, the jurisdiction of Congress is ended.

We do not attempt to regulate the selling in retail of textile products. That would be purely a local matter. We regulate only the interstate flow of textile products.

Whatever may be said-and I will say to the committee fairly and frankly that it may be said by some lawyers that the bill is not constitutional. But they cannot point to the N. R. A. decision. They will find no support in the N. R. A. decision for such a statement.

Most of the letters I have received refer to the A. A. A. decision. That shows the existing confusion, because the A. A. A. decision most certainly does not touch this bill; the majority opinion of the Supreme Court says expressly that the commerce clause is not involved in the A. A. A. decision.

None of these bills, whether they be the Wagner-Connery Labor Relations Act, or any other bills dealing with labor conditions, is in any way affected by the A. A. A. decision. The A. A. A. decision is out so far as this bill is concerned.

We feel that the bill before you is constitutional and we are going to file a brief with the committee which will establish in our sincere opinion the constitutionality of the bill. We do not say that any lawyer who disagrees is dishonest. There may be disagreement. But we feel that the preponderance of opinion is in favor of the constitutionality of this bill.

I want to go now to the other parts of the Constitution upon which we depend. One is to deny the use of the mails. When it comes to

the clause of the Constitution which relates to the mails, it is to be distinguished from all other clauses, because not only does the Constitution give the Congress the power to regulate the mails, but the Government of the United States owns the mails. It was a proprie→ tary interest. Now, as the owner of that business, the Government has the power to regulate it. And there has never been a case before any of the courts in which that power has been interfered with, because it is not only a power to regulate the business of mails, but the mails are owned by the Government. It owns the instrumentality and it owns the physical aspect of the business.

For instance, there is an Act on the statute books which has never been questioned which is a part of the antitrust laws and which provides: "No goods shall be transported and no ships shall go through the Panama Canal that belongs to a company which violates the antitrust laws."

That statute is valid because the Panama Canal is owned by the Government of the United States. And, being the owner of the Canal, the Government has the absolute power to say which ships may enter that Canal and which ships may not.

That is important, because we say that the Government has the absolute power to say which goods shall enter the mails and which shall stay out. And there is not any decision anywhere to the contrary, except a recent decision by a judge in Baltimore in a utility case, a lower court case, which is up in the Supreme Court now.

We say that the Government can say, "Mr. Manufacturer, you can regulate your business as you please, but if you do not live up to certain standards we will not aid you in disposing of merchandise which has been manufactured under conditions which destroy the purchasing power of the people of the United States, which imposes a heavy expense on the Government of the United States in the nature of relief, which decreases our revenue from taxation, and so on. In other words we will not put at your disposal the facilities of the Postal Service for the purpose of disposing of merchandise which the Congress says you have manufactured under unfair conditions." As to some sections of the bill the clause that we rely upon is the clause to regulate the mails. I feel we stand on very safe and sound ground on that.

Another thing we depend upon is Government purchases. I do not believe any lawyer can come before you who will attack the constitutionality of those sections of the bill which provide that any goods which are manufactured under standarads which are inferior to the standards laid down in the bill shall not be bought by any Government agency.

Surely, we have the power to say that a Government department shall not buy any goods that are manufactured under standards inferior to the standards laid down in the bill. Those sections of the bill which deal with that must be admitted by everybody as being absolutely constitutional.

And the bill goes further than that. The bill says that no public agency which receives any money from the United States-take, for instance, the States that receive relief funds, and so on-no public agency that receives any money from the Federal Government shall buy textile goods that have been manufactured under conditions inferior to the conditions laid down in the bill.

That, I take it, will be admitted by everyone who will appear before you to be a safe and sound and constitutional ground. There is no doubt about those provisions in the bill.

The Government now has

The same applies to the other sections. large investments in banks; it has made loans to railroads and to private concerns. And the bill says that no bank in which the Government owns a controlling interest, and no private concern to which the Government is making loans, or which is seeking the extension of Government loans, shall buy textile goods which are manufactured under conditions inferior to those fixed in the bill.

So, in conclusion, I say to you about the constitutional points that certain sections of the bill, in my opinion, are constitutional beyond peradventure of a doubt; that other sections of the bill, in the opinion of competent lawyers who have examined it, are constitutional by the fair preponderance of the weight of the evidence.

I think that is all that can be said to you in favor of any bill that attempts to do anything at the present time. Until we have the decision of the Supreme Court in cases like the coal bill, nobody can make any other assertions than those that have been made; nobody can say to you that those provisions in this bill which depend upon the interstate commerce clause are unconstitutional or constitutional. Nobody can say that until the decision of the Supreme Court on the coal act and the Wagner Act is handed down. But they can say to you that the preponderance of opinion is in favor of their constitutionality and that other sections of the bill which do not depend upon the interstate commerce clause are absolutely constitutional.

If I might go on for just a few minutes I would like to point out the sections.

Section 3 contains the definitions. I think we can pass that by. On page 8, section 4 establishes the National Textile Commission, to consist of seven members, to be appointed by the President with the advice and consent of the Senate, and lays down its powers, and

so on.

Section 5 lays down the powers of the Commission and directs the Commission to establish divisions for certain branches of the textile industry, such as cotton, wool, silk, hosiery, and for such other branches of the textile industry as it may deem necessary or appropriate. But these four divisions, cotton, silk, wool, and hosiery, must be established by the Commission because they are major branches of the textile industry. And the Commission may add other divisions as it appears to be advisable.

Section 6 deals with the location of the Commission, the principal office to be in Washington, with power to have offices somewhere else. Section 7 gives the Commission power to lay down rules and regulations not inconsistent with the act.

Section 8 defines certain powers of the Commission.

Section 9 comes to the meat of the bill. That is on page 12. That section says that

No textile product shall be eligible for purchase, sale, shipment, transportation, or delivery in interstate commerce which has been manufactured, processed, or produced by any person not licensed for such purposes by the Commission and which does not bear a label or stamp; and it is hereby declared urlawful for any person to buy, sell, ship, transport, deliver, receive, or process any such product in the course of interstate commerce, or otherwise to engage in or carry on interstate commerce in such products.