building industry under grave suspicion. There was one instance, I believe in 1929, when the country wanted to build two cruisers, and no bids were obtainable from those companies. It was not until one cruiser was awarded to each of those "big three" that they were able to get any cruiser building done by private companies.

Now, bills have been introduced in the Senate, following the investigation that was held by the Nye committee, intended to cure some or all of those things, but so far as I have been able to ascertain, nothing whatever has been done looking to the labor practices of those companies, and the relationship between employers and employees. There has been throughout the country some question as to the relationship that does exist, and one of the reasons for bringing in this resolution is to ascertain just what is going on between the shipbuilding companies and their employees in the light of past practices in other directions of those shipbuilding companies, and in view of the fact that there are, in certain sections, at least, complaints as to the treatment of the employees.

The Nye committee legislation which has been proposed does not enter into this phase of the situation, and, for that reason, I think it is well for this committee to inquire into that, or, at least, to consider this resolution so as to have the Secretary of Labor appoint a board of inquiry to look into the labor practices of those companies. Another reason for bringing in this resolution is the outbreak of open hostilities between one employer, or one of the "big three " companies, and its employees.

Mr. GRISWOLD. Which companies do you call the "big three "? Mr. KENNEY. The Newport News Shipbuilding Co., the Bethlehem Co., and the New York Shipbuilding Co., at Camden, N. J.

On May 13, last, I believe it was, at the yard of the New York Shipbuilding Co. at Camden, N. J., the hostility between the employers and employees resulted in a strike or lock out. That strike has still persisted. It continues, and there are claims on both sides. It seems that the men had worked under an agreement which expired about that date, and the question of a new agreement arose. The men undertook to treat with their employers, and they made certain demands. They asked, as I am informed, for some increase in wages. The cost of living, it was claimed, had increased in that vicinity, and they felt that they should be entitled to an increase of wages in the building of the ships there in that yard at Camden.

Another matter which the men brought up was that of arbitration, and still another was the matter of preferential or closed shop, there being a union, and you will hear from some of the members of that union who are present here this morning.

Then, there was also the question of the incentive plan, or piecework, to which the men objected, claiming that under the plan, as proposed, the men were overworked, and that it resulted in what they claimed to be starvation wages.

Now, without going into the merits of the case, the men are here, and can present their side of the situation. The claim is made that these men are badly treated, notwithstanding the fact that the shipbuilding company has a contract, which, I understand, is, if not a liberal contract, one which is capable of bringing to the company substantial profits. On the other hand, it seems that the company has taken the stand that it is not for it to arbitrate, as it is an industry

responsible for the development of highly specialized pieces of machinery to sail the seas, and to be a part of the national defense, and which should, therefore, be kept wholly within their control. Now, this strike involves something like 3,600 persons, out of a possible total employment of 4,600. I believe there is a draftsman and clerical force which has remained at work. That means, of course, a great deal, not only to the workers, but to that community.

Mr. GRISWOLD. How many people are employed in that shipbuilding plant?

Mr. KENNEY. Forty-six hundred, I understand; and at least 3,600 or 3,700 went out on strike.

Now, before the strike broke, negotiations for a new contract were started, some 30 days before the expiration of the old contract, when the men submitted some 15 changes. I have mentioned the four important ones. It appears that the company refused to accede to their demands, but it submitted counter proposals.

Mr. GRISWOLD. I would like to get this situation in my mind, if you do not object to interruptions. If you do, we will let you conclude your statement first.

Mr. KENNEY. I do not object to interruptions.

Mr. GRISWOLD. Are these men organized in a union at the present time?

Mr. KENNEY. Just partially. I believe they would be classified into three groups. A small proportion of them belong to the American Federation of Labor, I believe. A majority of them belong to a union which is called the "Industrial Union of Marine and Shipbuilding Workers of America, Local No. 1, Camden." Then, I believe, there are workers there who have no union affiliations.

Mr. GRISWOLD. Did those that have no union affiliation go out on strike?

Mr. KENNEY. I understand that the entire plant is out on strike, with the exception of the drafting and clerical force.

Mr. GRISWOLD. Prior to the time the strike was called, the old contract with the company had expired, or was about to expire. Mr. KENNEY. Yes.

Mr. GRISWOLD. What organization was that you mentioned?

Mr. KENNEY. The Industrial Union of Marine and Shipbuilding Workers of America.

Mr. GRISWOLD. They are not affiliated with the American Federation of Labor?

Mr. KENNEY. I understand they are not.

Mr. GRISWOLD. That is all.

Mr. KENNEY. Now, it seems that the proposals offered afforded much less recognition than they previously had, and it contained some other provisions; but here is something I want to bring home to you: Before the strike took place, the Department of Labor, through its conciliator, tried to bring about an amicable understanding, but the company refused to meet the conciliator, upon the ground that the matter was in the hands of the industrial relations committee of the Shipbuilding Code Authority. The conciliator had arranged a meeting, I believe, with a number of workers, at which the attorney of the company and the executive vice president were present, but those gentlemen refused to submit the matter to the

National Labor Relations Board or any other board which may have been set up by the Secretary of Labor or anyone else. They took the position, as I am informed, that the matters at issue were such that they could not be arbitrated, and that the company could not recognize the demands of the men.

Now, this is a very serious proposition, I believe. One other reason, the third line, is the fact that so many people are out of work up there in New Jersey, in this particular section, notwithstanding the will of Congress and the appropriations of money which were intended to put people in this country back to work.

Now, this shipbuilding company up there is now building, I believe

Mr. GRISWOLD (interposing). Will you pardon another interruption: Are those contracts on which they are working now some of the P. W. A. contracts, or do you know?

Mr. KENNEY. While they might not be considered P. W. A. contracts, P. W. A. money is involved. Here is what happened: The Congress appropriated under the act of 1933, I believe it was, $3,300,000,000. That fund, as we know, was intended to go into useful projects throughout this country, with a view to giving employment to our people. Now, the President made an Executive order transferring these P. W. A. funds over to the Navy, amounting to millions of dollars.

Mr. GRISWOLD. That is the money I am talking about.

Mr. KENNEY. Yes. That is the money from which the Navy gave contracts to these shipbuilding companies to build ships. I understand that there are 3 cruisers and 4 destroyers being built up there at this yard out of this money; or most of them, possibly with one exception, are being built from original P. W. A. money. Now, it seems as if the company got a very good price for those cruisers. The Savannah, so called, was let at a fixed price of $11,677,000; the Nashville was let at a fixed price of $11,677,000; and the Phoenix was let at the contract price, on an adjustment basis, of $11,975,000. In addition to that, there are four 1,850-ton destroyers. The Porter was let at a fixed price of $3,775,000, and the Selfridge, McDougal, and Winslow were let at a like price.

Now, in view of the circumstances, and of the fact that Congress appropriated this money to be put in the hands of the employers of labor, I believe it is the duty of the Members of this Congress to look into that situation very thoroughly, with a view, if necessary, to canceling those contracts up there. I think that perhaps there might be some justification for that, and I will read right here from the contract under which the award was let to this company. First of all, it was the intent, as expressed by the contract itself, that this company which secured this contract would keep the men at work. I will read from page 1 of the contract:

Owing to the national emergency existing, making it imperative that the maximum number of men be returned to gainful employment without delay, and to effectuate the purposes of the National Industrial Recovery Act, approved June 16, 1933, the contractor hereby expressly agrees that from the beginning he will prosecute the work with the utmost vigor and dispatch, and will make every possible effort, without reference to the otherwise normal rate of progress, to accomplish the maximum amount of work within the first and second year thereof.

There is another provision of this contract, article 13, subdivision (a), as follows:

In case of failure or of omission of the contractor at any stage of the work prior to its completion, from any cause or causes other than those provided for in article 11 hereof, to go forward with the work and make satisfactory progress toward its completion within the time prescribed, the Secretary of the Navy may, upon written notice to the contractor, terminate its right to proceed with the work.

If the employer is to blame, then drastic action should be taken, I believe, by this Congress.

Simmering it down to the issue here, as I believe it to be, these men say that they are not being properly treated, and that under the agreement proposed by the company, in the light of conditions during the last few years, to go back to work under the contract offered them would mean going back at starvation wages. On the other hand, the company says that these men are made up in some part, at least, of Communists, and that for that reason, or, as they express it, that is one reason why they do not wish to treat with these men; but, in any case, if the company is right, certainly we should have this investigation to ascertain whether or not these men are Communists; because if they are, we certainly do not want them building ships for our country to defend us in time of need. I do not know why that is brought into it, because, apparently, the employer is willing to take these men back under the old agreement that they had. If they will take them back under the old agreement at Camden, it strikes me as peculiar that they should raise that point on the question of working and labor conditions raised by the men employed there. However, in either event, I think it is a matter that should be sifted by this Congress, and that a board ought to be appointed to investigate into it.

Another reason I think it ought to be done is that no board has been set up yet under the Wagner labor-disputes bill. It may be a little while yet before that can be done-probably a few weeks, or, perhaps, longer. But even so there is some question as to whether that board would have jurisdiction of a labor dispute which occurred prior to the passage of that act. This dispute has now existed since May 13 at least. Of course, it happened prior to the enactment of the Wagner Act, and that being so, the Wagner Labor Disputes Act Board, I feel, would have nothing whatever to do with the settlement of this controversy. Besides, that Board, of course, would not look into conditions elsewhere throughout the country, in other shipbuilding yards.

Mr. Chairman, I believe some of the workers are here, or they are represented here, and I will ask permission that they be heard by the committee.

Mr. GRISWOLD. We will be glad to hear them.

Mr. MARCANTONIO. How many men are involved in this?

Mr. KENNEY. There are at least 3,600 men involved out of a total employment of 4,600.

Mr. MARCANTONIO. When did this strike begin?

Mr. KENNEY. On May 13, according to the date I have here. Although I think it has been stated that it occurred a few days earlier.

Mr. MARCANTONIO. Do you know whether or not it has been the policy of the Navy Department, in letting out contracts for ship

building, to insist upon a collective bargaining clause in the contracts they have given out?

Mr. KENNEY. They have not done so.

Mr. MARCANTONIO. Do you know whether that has been the policy in the past?

Mr. KENNEY. I understand it has never been the policy.

Mr. MARCANTONIO. Coming back to the Wagner Labor Disputes Board, you realize that under the definition of "direct and indirect" as handed down in the Schechter case, there is a strong possibility that this particular industry might not be considered interstate; and if so, this would not come within the jurisdiction of the Wagner Labor Disputes Board.

Mr. KENNEY. I am inclined to agree with that. Along that line, I offered an amendment on the floor of the House to take care of a situation like this, but it was not incorporated in the act as it is.

Mr. EVANS. Mr. Kenney, have you any data there to show approximately what the percentage of profit would be that would accrue to the employers on the basis of the salaries or wages which they proposed to pay the men?

Mr. KENNEY. I do not have that data; but, according to statements made to me by the men, it will run up into a very generous amount, or up into a number of millions of dollars.

Mr. EVANS. Such as would justify paying the men the increase in wages that they are asking?

Mr. KENNEY. According to their claim; yes. It might be well to say in that connection that the Nye committee investigation showed that on cruisers built in 1927 the profits were 35, 25.4, and 36.9 percent for the big three. That was on ships of this character built at that time. In the instance I mentioned, where no bids were received, two cruisers were to be built, and finally three cruisers were let, and in that instance this company made a profit of 22 percent. You will probably recall that according to the Treasury audits these shipbuilding companies during the war made profits as high as 90 percent. Of course, those were cost-plus contracts, many of which carried items which were considered as questionable, and in some cases they found concealed profits.

Certain shipyards of this country are not above suspicion, and I believe we ought to see to it, especially where we appropriate P. W. A. money for Public Works useful projects, such as building for the Navy, to put men to work that the purpose is not thwarted by strikes. We should find out when that is the case whether the workers of the country are responsible or whether the shipbuilders of the country are responsible. In my opinion, it was the greed of the corporations of the country that brought the country into these difficulties. During this depression, perhaps we would not expect to see a man pledge his entire fortune on the future of the United States. I believe myself that men in high positions have been slackers and have not done what they should have done in order to help these conditions. That is another reason why I say we should look carefully into this situation, because if we are going to appropriate money for the purpose of putting men to work, and our purposes are thwarted, we ought to ascertain whether it is the employers or the employees who have made a situation like this.