The NAM is officially on record as being in favor of genuine collective bargaining.

It is officially on record as recognizing the right of unions to strike when agreements may not be had on the basic things of wages, hours, and working conditions.

The NAM is officially on record as favoring stabilized employment to the highest possible degree within the control of industrial management.

It is officially on record in support of a program of higher wages based on higher productivity and superior performance, or output; on working conditions that safeguard the health and dignity and selfrespect of the employee.

It favors a spirit of cooperation between employee and management. It is officially on record as favoring a balanced Federal budget, Federal debt reduction, lower taxes for individuals, and tax policies to encourage investment in tools.

That, gentlemen, is the background of those things which I think must be taken into consideration in any analysis of recommendations made by this organization to your honorable committee.

The industrial record of the United States is something of tremendous interest to everybody. I would like to refer to that in just one second.

It took the average worker in 1860, 69 hours of work per week to produce an output valued at $22.77, on the basis of 1944 selling prices.

In 1944, the grandsons and great-grandsons of those workers of the 1860's worked 41 hours per week, a reduction from 69 hours per week by their ancestors and produced an output valued at $59.04 as compared to $22.77 in 1860.

The hours of work were reduced by 40 percent. The individual output per worker was increased by 230 percent and certain fundamental things made that possible.

In 1860, of the total energy used in all activities, mechanical energy, principally direct water wheels, and a few isolated steam plants, furnished 7 percent of the total energy used in production.

Human energy supplied 14 percent.

Animal energy supplied 79 percent.

By 1944, mechanical energy had jumped from 7 percent, in 1860 to 90 percent.

In 1944 human energy had dropped from 14 percent, in 1860, to 4 percent; animal energy had dropped from 79 percent in 1860 to 6 percent in 1944.

Gentlemen, I submit that this record of industrial achievement in this country is a perfect example of the incentive to invent, the incentive to invest, and the teamwork brought about between management and labor in their learning how to use these things, tools and appliances of production, and I think it is important to all of us that there became a tremendously widespread understanding of these basic economic factors between the public, the Government, labor, and management, and, if I may, I would like to start in with a discussion of some of the things which have been problems in this country in recent years and have been the subject of controversy between various groups.

I have over here chart No. 1 which shows the civilian labor force in this country from 1939 through May of 1947.

You will observe here that there were approximately 9,000,000 unemployed at the end of 1939, and that we are now up to where we have as of June, according to the figures just released by the Government, 60,000,000 gainfully employed in this country.

On chart No. 2 we show by parallels for 1939 and 1946 the compensation of employees, dividends paid out by corporations, business savings remaining in the business, net income of farmers and unincorporated small business, and the amount paid in interest, in rent and royalties.

It is interesting to observe that the compensation of employees was 67.9 percent of the total national income in 1939, according to the United States Department of Commerce figures, and it was 66.5 percent of the national income in 1946.

The biggest bulge in this whole picture was the income of farmers and operators of unincorporated small businesses. They got 15.8 percent of the national income in 1939, and 18.2 in 1946.

Dividends paid in 1939 accounted for 5.4 percent of the national income. Dividends last year were 3.1 percent of the national income. Business savings in 1939 amounted to 0.6 percent, and the 1946 business savings amounted to 4.2 percent, a subject which I will get into in just a few moments.

This, gentlemen, is the answer to that craziest of philosophies, which originated shortly after the depression in 1929-the theory of economic maturity.

Chart No. 3 shows how wages, the cost of living, wholesale prices of manufactured products, and wholesale prices as a whole havę changed in the period from January 1, 1940, to date.

The red strip indicates the period between the end of the war with Japan and the end of OPA controls last November 9.

It was during that period that we made a major part of the necessary postwar price adjustments which every businessman and every economist in this country knew we would ultimately be required to go through. That is when these big changes came. I have something to say about it a little further along here.

In chart No. 4 we show the relationship between profit and wages in manufacturing.

BILLIONS
OF
DOLLARS

35

PROFITS AND WAGES
IN MANUFACTURING

-5

'29 '30 31 '32 33 '34 '35 36 37 38 $39 40 41 42 43 44 45 46 Chart 4

This is the total wages in dollars paid by manufacturing plants in the United States for the years from 1929 going down through the depression and coming back up through the slow recovery period, then the war impact and up through 1946.

Total dollars of wages in manufacturing rose during this period from somewhere around $8,000,000,000-the exact figure is in this mimeographed brief of ours-to something over $30,000,000,000 at the war peak in manufacturing, and in 1946 amounted to about $25,000,000,000.

In that same period of time we had this corporate earnings record— an almost straight line there since 1941.

Incidentally, 1941, as is shown on another chart, in a moment, was a bigger year of earnings than 1946.

On chart No. 5 this same information in terms of profit margins. and hourly earnings in manufacturing period from 1929 through 1946. Here is the average hourly wages of workers in manufacturing plants through that whole period from 1929 through 1946, and here is the profit margin in percentage on sales.