Dr. BILLIKOPF. Mr. Campbell, I happen to know what incentive is, the plan you have now. Does that or does it not measure the efficiency? Isn't that one

Mr. CAMPBELL. We think that is one of our yardsticks.

Dr. BILLIKOPF. Let us say, for instance, if the incentive plan were to prevail, does it or does it not take care of what Mr. Goldstein says?

Mr. CAMPBELL. Yes; that is one of our yardsticks.

Dr. BILLIKOPF. What else is there in Mr. Goldstein's statement?

Mr. CAMPBELL. As I said, that is immeasurable, except through incentive work. Dr. BILLIKOPF. And if that is not in existence everything else is imponderable. Mr. CAMPBELL. Not on a close check. Only over long periods of time and comparisons of finished costs compared with the original estimates.

Dr. BILLIKOPF. Mr. Kaltwasser has just handed me a statement, $6,000,000, what does that mean?

Mr. KALTWASSER. You will notice on the statement, of that $6,000,000, there is only $5,962,000; in other words, the earned surplus to date is only $1,000,000. That has been reduced since that was made up, probably another $350,000.

Dr. BILLIKOPF. That surplus covers the period from 1927 up to the time Mr. Bardo submitted the letter in 1934.

Mr. KALTWASSER. It is a surplus as of this date.

Dr. BILLIKOPF. Now, then, your contention is that the increase should be made on three points: One, increase in the cost of living, that differential has to be taken care of, if not the company will some day find itself high and dry; second point is that there will be increased efficiency; and the third point, in anticipation of contracts, the company might be able to absorb that.

Mr. GOLDSTEIN. The fourth point is that there is some surplus from which it can be met.

Dr. BILLIKOPF. Namely, that million dollars.

Mr. GOLDSTEIN. And, fifth, we might also consider the actual needs of the situation, that these fellows have had their cost of living piped up in the last year. It has got to be made up sometime. Otherwise you are not going to have increased efficiency in the plant.

Dr. BILLIKOPF. Of course, under the incentive system there is a criterion which will enable the management to determine whether the men are fulfilling what the management thinks are obligations.

Mr. GOLDSTEIN. Both under that system and the system that existed before. Mr. Parker definitely stated before the Senate Munitions Committee that they had found increased efficiency, and they had, if I am correct, the incentive system installed in the company in only a few departments.

Dr. BILLIKOPF. And you feel there is a further latitude for increased efficiency.

Mr. GOLDSTEIN. We feel that all of this testimony showing that the rates at which the contracts were let, as Admiral Land himself admitted, down in the Navy Department, the bids on 1933 and 1934 programs were exceptionally high, but they had to give contracts on those bids because the Navy Department had to build ships in this country.

Dr. BILLIKOPF. As a student of labor economics, I realize that it is not altogether fair to draw a comparable picture between one community and another. I am just adjusting a dispute in the orchestra situation, and I realize that San Francisco and Minneapolis may differ. Nevertheless, have you any data indicating whether the men here, from a wage point of view, are treated as well as other men.

Mr. GOLDSTEIN. You mean shipyard plant?

Dr. BILLIKOPF. What are the plants?

Mr. GOLDSTEIN. Newport News and Bethlehem. I presume you are referring now to the competitive position. [After conferring with Mr. Green.] Mr. Green says there is no way of getting comparable figures.

Mr. CAMPBELL. Mr. Land made the statement in the paper recently that we were paying somewhat higher wages than some of our competitors.

Mr. GREEN. How could Mr. Lamb make a statement? Mr. Campbell says that the admiral's statement to the newspaper said that. When Mr. Lamb was asked by the Navy Department to supply figures, he was in no position to do it. Dr. BILLIKOPF. Where did that statement appear, Mr. Campbell?

Mr. CAMPBELL. It appeared in the local press.

Dr. BILLIKOPF. Was it the admiral's statement?

Mr. CAMPBELL. Yes.

Mr. KALTWASSER. The average earnings for the hourly worker in this yard are $29.60. There are no salaries included in arriving at that average.

Dr. BILLIKOPF. It is all the wage. Have you any idea how that compares with other places?

Mr. KALTWASSER. I can't tell you as to the same industries, but I can tell you within this Philadelphia district. The metal-working industry-I can give you a comparison with that.

Dr. BILLIKOPF. Are they comparable figures? All under the category of metal workers, Mr. Kaltwasser?

Mr. GREEN. Mr. Kaltwasser, you said the average wage in the yard?

Mr. KALTWASSER. We took the total amount of money paid to the hourly wage earners and divided that by the total man-hours that were worked.

Mr. GREEN. And when you were striking that average you took into consideration all bonus, and so forth?

Dr. BILLIKOPF. Is there such a thing as the incentive feature among the 10,435? [Referring to the figures which Mr. Kaltwasser had handed to Dr. Billicopf.] Mr. CAMPBELL. It may or may not.

Dr. BILLIKOPF. Mr. Campbell, could you estimate what percentage of your people come within the incentive group?

Mr. CAMPBELL. We average 43 percent of the average group.

Dr. BILLICOPF. And the incentive is one of the essential criteria for judging work.

Mr. CAMPBELL. And the fact that from a competitive point of view the other competitive industries do work incentive much along the same basis.

Dr. BILLICOPF. The 10,000 you don't know?

Mr. CAMPBELL. That we don't know.

Dr. BILLICOPF. Do you know what they are operating in Bethlehem and Newport News?

Mr. CAMPBELL, Bethlehem is operating the same basis and Newport News about 60 percent.

Mr. GALLAGHER. Mr. Campbell, I would like to ask how you take care of the inen on incentive work?

Mr. CAMPBELL. We guarantee the man, even if he doesn't make out, he is guaranteed his rate of pay.

Mr. GREEN. Listen, Doctor, I think you ought to get to understand just how this incentive system works in the yard, and perhaps you will arrive at the conclusion where they have found the average. We know that from a statement of Mr. Campbell, the average of $29 was based by just prior to the strike. Most of these men work contract work. They draw nothing but hourly rate, and get that lump sum when the job is finished, just prior to the strike.

Mr. KALTWASSER. Let me answer that. The average hourly earnings, including incentive work for weeks and weeks has gradually been building up a quarter of a cent at a time, and has been from 80 to 81, 82 cents for weeks, for months prior; you get $29.88, not just the week before the strike but all the weeks.

Mr. GOLDSTEIN. By the way, Mr. Campbell, when you speak of incentive work, is that the same as piecework?

Mr. CAMPBELL. That is the broad term. It is sometimes concerned when you think of piecework as being a particular type of incentive.

(Dr. Billicopf adjourned to another room to confer with Mr. Green and the members of the negotiating committee.)

Mr. Gilfillan asked Mr. Goldstein whether this statement was not made by him when the one stenographer was out and the other not taking it down, "Mr. Gilfillan, we do not say that the company has or means to be unfair toward the wage rate of its employees, that are below the other private yards." Mr. Gilfillan stated that that must be taken out of its context, which went before in that way, meaning that Mr. Goldstein would have no means of getting comparable figures with other yards, and further must be taken as having been said purely with a purpose of conciliation so as to overcome the antagonistic attitude to Mr Goldstein shown by Mr. Kaltwasser.

At this point Mr. Kaltwasser made a statement as follows: personal dislike for a man by the name of Goldstein."

I haven't any

Mr. GOLDSTEIN. You think I am trying to hold up the works. Mr. KALTWASSER. But I have this feeling, that unfortunately you have a way of presenting things that is just befuddling the issue and it is that method that I am antagonistic to and not with Mr. Goldstein.

(Dr. Billikopf conferred with the representatives of the management, after which the meeting adjourned, at 1:30 p. m.)

Mr. GRISWOLD. The committee will now go into executive session. (Thereupon, the subcommittee went into executive session.)

RELATING TO LABOR PRACTICES OF EMPLOYERS OF LABOR IN THE SHIPBUILDING INDUSTRY

FRIDAY, JULY 26, 1935

HOUSE OF REPRESENTATIVES,
COMMITTEE ON LABOR,

Washington, D. C.

The subcommittee this day met at 10:30 a. m., Hon. Glenn Griswold presiding, for further consideration of House Joint Resolution 331. STATEMENT OF CAPT. W. G. DuBOSE, CONSTRUCTION CORPS, UNITED STATES NAVY, ASSISTANT CHIEF OF THE BUREAU OF CONSTRUCTION AND REPAIR, NAVY DEPARTMENT

Mr. GRISWOLD. Let us now proceed with the hearings in connection with House Joint Resolution 331, by Mr. Kenney. I think we have with us this morning, to testify, a representative of the Navy Department. Are you the gentleman?

Captain DuBOSE. Yes.

Mr. GRISWOLD. The committee has for several days had under consideration a resolution introduced by Mr. Kenney of New Jersey concerning the shipbuilding strike at Camden (N. J.) shipyard, and the committee would like to have you give it such information as you have concerning that situation.

Captain DUBOSE. That is rather a difficult question to answer concisely, because the strike has been under way since May 13, and it is still on. So far as the Navy Department is aware, there seems to be no particular prospect of settling the strike. There have been numerous conferences with various persons in the Navy Department from the Secretary down on the part of members representing the union negotiating committee, the strikers, the management of the New York Shipbuilding Company; and, of course, there have been conferences between representatives of the Navy Department and the Department of Labor, all with a view to bringing about some settlement of the controversy.

The Navy Department is, of course, vitally concerned in the settlement of this strike because of the contracts that have been placed with the New York Shipbuilding Co., but the view of the Navy Department, frequently expressed, is that, legally, there is no action that can be taken now by the Navy Department in accordance with the provisions of the contract, which exempt strikes as a cause for delay for which the contractor can be held responsible, among other things.

Mr. GRISWOLD. Can you tell us how much delay has been suffered in the construction of these ships?

Captain DUBOSE. That is a question that cannot be answered definitely. The strike has been on for more than 2 months, and

whether or not the ultimate delay in completion of the vessels will be 2 or more months depends largely upon the progress that may be made after work is resumed; but, unquestionably, there has been or will be a delay in the final completion of these vessels of approximately the time that has been occasioned by the strike.

Mr. GRISWOLD. Progress had been slowed up on these ships considerably before the strike, had it not?

Captain DUBOSE. There was a strike in the New York Shipbuilding plant about a year ago. It lasted, as I recall, 2 months or, maybe, 6 weeks, and the progress of the vessels was slowed up by that much at that time. Following that strike and during the past year, from May 1934 to May 1935, progress on the vessels building in the York Shipbuilding plant was not so rapid as was construction on similar vessels elsewhere.

Mr. GRISWOLD. Was progress, say, from September of last year to the time of the present strike as much as normal progress, in that shipyard?

Captain DUBOSE. No; the progress of construction in the plant of the New York Shipbuilding Co. has not been normally what is expected or desired by the Navy Department under terms of the contract.

Mr. GRISWOLD. As I understand, under the terms of the contract in question the contractor agrees to proceed as rapidly as possible and at an abnormal rate.

Captain DUBOSE. That was a condition incorporated in the contract. According to the contract, the utmost endeavor was to be made to do as much work in the first and second years as possible. Mr. GRISWOLD. Has the contractor done that?

Captain DuBOSE. He has not.

Mr. SCHNEIDER. What would be the position of the Navy Department in case this strike continues indefinitely?

Captain DUBOSE. I cannot answer that question. I do not know just what the Department would do. We have not given serious consideration to that.

Mr. MARCANTONIO. Just what, if anything, has the Department done in this situation?

Captain DUBOSE. There has not been any definite, positive action by the Department. Under the legal terms of the contract we cannot take action now.

Mr. MARCANTONIO. You are familiar with the terms of the contract, are you not?

Catpain DuBose. Entirely so.

Mr. MARCANTONIO. May I direct your attention to the contract covering the construction of light cruiser no. 46? On page 1, under article 1, of the contract is a clause requiring a maximum amount of work within the first and second years. This contract covers the construction of the light cruiser Phoenix, I believe?

Captain DuBOSE. Yes.

Mr. MARCANTONIO. On page 1, under article 1, of the contract there is a clause requiring the maximum amount of work within the first and second years, reading as follows:

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 purpose of the National Industrial Recovery Act, approved June