Mr. WEST. No, sir; there was not. There was one subsequently. Mr. WOOD. Now, with respect to control of production, how do you expect stabilization to be accomplished if not by price fixing? How have you stabilized it in the past 3 years?

Mr. WEST. By limiting the hours of machine operation to two shifts of 40 hours each. There has been no price fixing in this industry, Mr. Wood.

Mr. WOOD. But there has been limited production?

Mr. WEST. Theoretically, yes; as a practical matter, no. The number of available productive machines or equipment in the cottontextile industry permitted to run 80 hours a week has been ample to take care of the off-take by the consumer, particularly in view of our loss of export markets and the continued threat of Japanese products in our market.

Mr. WOOD. In the absence of any legislation restricting the output or any legislation of this kind, how do you suggest you are going to keep your industry stabilized and maintain your operations?

Mr. WEST. Is it essential that I discuss maintenance of operations as a result of every question, because, sir, I have stated that four times? Mr. Wood. Of course, we all agree in the years 1930, 1931, and 1932, the prices were at rock bottom; and everyone agreed then that the tremendously low prices for the commodity were not good for the industry, and representatives of the various industries that came here in 1933, told us very frankly that something had to be done to maintain prices.

Mr. WEST. Was there a representative of the textile industry who made that statement?

Mr. WOOD. There were representatives of all the basic industries. Mr. WEST. I am asking you for information.

Mr. WOOD. Yes, indeed; there was.

Mr. WEST. I was not aware there was.

Mr. Wood. Steel, textile, oil, railroads, furniture, lumber, and others.

Mr. KELLER. Banks and insurance companies also.
Mr. WOOD. Yes. They were all here.

Mr. WEST. I am asking you if textiles were here.
Mr. WOOD. Yes, indeed; they were here.
Mr. WEST. I am asking for information.
the record is of a cotton-textile interest?

Could you tell me where

Mr. KELLER. You could not, perhaps, on this account, Mr. West. I think I may butt in now and talk to you about it. When the men came here they felt it was not wise to make a record of the meetings. Just to illustrate the point, Mr. Mills, the Assistant Secretary of the Treasury, came before the meeting in one of the committee rooms but before he would talk he made this statement [reading]:

I want to feel entirely free to lay before you the conditions which exist in this country at this time. I will not feel myself justified in doing it unless and until I have the agreement of the members before me here that it will be kept entirely in confidence.

And we all agreed. Then Mr. Mills said these things, that unless the industries of the country-and he went on to name them very specifically-could receive immediately a tremendous amount of help from the Federal Government, that every one of them would go to pot. He named the railroads, the banks, the insurance com

panies, and the others clear on down the line. That was not reported for the very simple reason that I have stated to you. But that Mr. Wood is entirely correct in his statement I think there is no possible doubt.

I think nothing was ever said about it until it had passed over. At that time we were at the bottom of the emergency that was in existence and, therefore, we immediately voted the R. F. C., which was simply a revival of the War Finance Corporation, and began by setting aside $2,000,000,000 for the use of the industry of the country as a starter. And since then we have voted several billions more. I think Mr. Wood is entirely justified in making that statement. Mr. Wood. And they had before this meeting representatives of the automobile industry, the electrical industry, coal, steel, oil, lumber, and everything you can think of. We had a representative of the Manufacturers' Association and the National Chamber of Commerce, and groups from everywhere. There were a hundred or more industrialists who testified, and they covered the whole field. Mr. KELLER. That part is printed?

Mr. WOOD. Yes; it is. It is right in these hearings.

Mr. WEST. As to this question of price, since that time I have been rather intimately associated with practically all branches of the cotton-textile industry and the merchants and the manufacturers, and I have not been aware of any who considered price fixing as a method of helping the industry. If one of them has urged it, I would like to get his testimony, because I might learn something.

Mr. Wood. You are getting away from my question. Aside from this so-called price fixing how are you going to keep up prices, whether it be price fixing or whether it be control of production, or whatever method you have? What method have you? Surely the textile manufacturers want to keep up the present basic prices.

Mr. WEST. We want better prices.

Mr. WOOD. You certainly do not want to go back to 1932?
Mr. WEST. No, sir. We want better prices.

Mr. WOOD. Or to 1933. I asked you what the cotton textile manufacturers had in mind as a method of keeping the present basic standard prices from going down. You want the prices to go up, of course.

Mr. WEST. The adjustment of our current production to the current demand for goods-production control.

Mr. Wood. Of course, that is a general statement.

Mr. WEST. Yes; it is a general statement.

Mr. Wood. But that does not answer my question. What method do you think should be employed? If nothing is done through legislation, what do you suggest be done?

Mr. WEST. The intelligent operation of the plants. The overproduction of the industry, Mr. Wood

Mr. WOOD. You just want to go along and operate your own industry without any governmental interference?

Mr. WEST. I will not say that. No, sir; I will not say that, not at all.

Mr. Wood. How far do you want the Government to go? This bill contemplates going a certain distance, and we would like to have the opinion of the cotton textile manufacturers as to how far they want to go on Government control or Government supervision.

Mr. WEST. I do not think Government supervision

Mr. WOOD. Do you need any?

Mr. WEST. I do not believe we need the supervision of the Government as contemplated in a bill of this kind.

Mr. WOOD. Do you think you need any?

Mr. WEST. The time may come when we will.

Mr. Wood. I am not talking about this bill but about the extent of the regulation, if any, that you need now. Can you mention something?

Mr. WEST. No, sir. At the moment I do not believe that it is essential for Government regulation of the textile industry.

Mr. Wood. You think nothing should be done, but we should let it remain in status quo?

Mr. WEST. Except the protection of our markets and giving us a fair chance in the markets, this situation having been brought about by conditions that have arisen because of Government activities. We pass a bill and we set up a regime in the industry which enormously raises the cost and immediately puts many of the products on the shelf. We have lost our export markets and are under a constant threat in the home markets. We cannot produce goods as cheaply as Japan; but we ought to have our markets. We permit jute to come into this country to be made into bags. But thousands and thousands and thousands of bales of cotton could be consumed and thousands of yards of cloth used.

Mr. WOOD. Then you favor Government regulation by tariff to protect your prices against foreign importations? And, of course, I am in favor of that, and every good citizen is. But how far do you expect the Government to go to protect the employees in their wage standards? If the Government is going to protect you against the importation of cheap goods that will destroy your prices then don't you think the Government ought to go far enough to protect the wage earners in their standards against unscrupulous employers?

Mr. WEST. Yes, sir. Of course, that immediately brings up the question of the Federal Government and the way in which it is done. It seems to me that the difficulty with that phase in Government regulation is the rigidity of it; for instance, a maximum 35-hour bill when that is the maximum and there is no latitude and no leeway in it. Mr. WOOD. Suppose that is necessary to take up the slack in the employment?

Mr. WEST. It does not take up the slack of unemployment in the textile industry. By going to 35 hours the textile industry can contribute nothing to the unemployment situation except by going on three shifts.

Mr. WOOD. That is what all of the opponents of this legislation have contended. But some of the members of the committee have a different opinion about it.

Mr. KELLER. Mr. West has now been on the stand for a little more than an hour and a half, and we have about five more witnesses to hear this evening.

Mr. WOOD. I would like to ask one or two more questions.

Mr. KELLER. All right, then.

Mr. WOOD. The consumption of textiles, that is, the consumption of cotton textiles in this country, is no greater than it was 5 or 6 years ago. You said that the consumption of textile goods in this country had been increased.

Mr. WEST. That is stated in this report here [indicating].

Mr. Wood. Don't you attribute some of that to the fact that rayon goods have taken some of that market from you?

Mr. WEST. Oh, yes.

Mr. WOOD. Rayon goods have increased by leaps and bounds in the last few years?

Mr. WEST. Yes, sir.

Mr. WOOD. And the consumption of them has increased?

Mr. WEST. Yes, sir.

Mr. Wood. So it cannot be attirbuted to the N. R. A. or any other Government regulation, but the lack of consumption of your cotton goods can be attributed more to the increase in the use of rayon and other substitute materials?

Mr. WEST. I am sure I did not give the impressions that we attributed this decrease to any Government intervention. Rayon has affected it. There have been very many factors that have affected it. Mr. KELLER. We will now call Mr. Steele.

STATEMENT OF FRED W. STEELE, REPRESENTING THE NATIONAL ASSOCIATION OF COTTON MANUFACTURERS

Mr. KELLER. Will you please state your name and address? Mr. STEELE. My name is Fred W. Steele. I am general manager of the Grinnell Manufacturing Corporation, New Bedford, Mass. Mr. Chairman, I wish to present this statement on behalf of the National Association of Cotton Manufacturers.

The National Association of Cotton Manufacturers is a voluntary trade association in continuous operation since 1854, representing through its membership practically the entire northern and eastern spinning and weaving sections of the cotton-textile industry.

According to the United States Census of 1933, the latest issue, this section of the industry employed 102,284 wage earners, operated 10,509,404 spindles and paid $71,844,000 in wages.

The nature of the cotton-textile industry is so complicated, and the variety of its products so great, that it has been impossible in the time allowed to prepare for this hearing more than a cursory picture of the situation.

The products of these mills are extremely diversified. Many of these products have no relation to each other in the uses to which they are put, in the cost of their manufacture, or in part of the machinery that is used in their manufacture; but with few exceptions these mills could be classified as fine goods or specialty mills.

The mills manufacturing these finer goods are in general equipped with modern machinery, and the intense competition in the industry naturally results in high efficiency of operation.

The National Association of Cotton Manufacturers, in concurrence with the American Cotton Manufacturers Association and the Cotton Textile Institute, is keenly interested in any proposal that will benefit the employee, the employer, and the community in which the industry is located.

The attitude of over 90 percent of the cotton manufacturing industry, by continuing voluntary observance of the provisions of the invalidated National Industrial Recovery Act is ample evidence of their earnest desire.

We respectfully suggest that your committee take judicial notice of the recent reports of the studies and surveys conducted by various Federal bureaus and departments, as follows:

The report of Dr. Sachs of the Research and Planning Division of the National Recovery Administration.

The report of the Textile Labor Relations Board's Textile Work Assignment Board.

The report of the Federal Trade Commission on the cotton textile industry.

The textile report of the Bureau of Labor Statistics, United States Department of Labor.

The report on conditions and problems of the cotton textile industry by the Cabinet Committee appointed by the President.

The findings in these cited reports and surveys, and our own experience with governmental regulation of industry, convince us of the futility of the proposed or similar legislation.

The bill under consideration by your committee, H. R. 9072, the Ellenbogen bill, so-called, is so pregnant with fallacious provisions that instead of stabilizing conditions in the industry (the intent of the proposed legislation) it would disrupt conditions to an extent that we have not yet experienced. Hence, the National Association of Cotton Manufacturers must be recorded as definitely opposed to the proposed legislation.

Further, in view of the recent United States Supreme Court decisions in the cases of the United States v. The Schechter Poultry Corporation and the United States v. William Butler et al., receivers for the Hoosac Mills Corporation, and the many other decisions of this court relating to interstate commerce, we contend that cotton manufacturing does not enter directly into interstate commerce; consequently, we doubt the constitutionality of this proposal if enacted into law.

Mr. Chairman, as an individual manufacturer I come before you not only to enter my protest on this bill but, if permitted to do so, to point out my objections.

All of my life I have been connected with the textile industry, either as an ordinary workman, department head, or managing

official.

By virtue of conditions over which I had no control I was forced to go to work at an early age, and by virtue of living in a textile community I found myself in the textile industry, where I have been ever since.

I have worked through practically every department of the plant, I have been foreman of various departments, and for the last 20 years I have been at the head of various textile corporations responsible for the manufacturing, financing, and merchandising, of their products. In my capacity as a workman I was a union member, and in my capacity as the head of a corporation, I am a member of the Manufacturers' Association.

Therefore, gentlemen, I am somewhat familiar with the problems of the employee as well as those of the employer and, gentlemen, those are plenty at the moment.

I have given this bill much study, and frankly, cannot endorse it, for various reasons, namely: While this bill goes to great extent in regulations of trade, it also is constructed to give much protection and