those firms which contract for Government service. The great mass of these firms serve the general public and will continue to pay lower wages, and stiil be influenced by the desire of private buyers to purchase goods at the lowest competitive prices. Public sentiment will dictate State legislation where sweatshop conditions will be gradually removed. Progress is being made in this in many sectons of the country, and the abolition of home work will take care of the most important feature of this problem. The passage of the Healey bill will not correct this evil in this particular industry, and there is little evidence of its existence in the others.

QUASI-JUDICIAL AND LEGISLATIVE FUNCTIONS SHOULD NOT BE DELEGATED TO AN

EXECUTIVE DEPARTMENT

The Southern Pine Association is opposed to having any officer or board clothed with the authority to specify wages and hours for industries generally that may be undertaking to participate in Government business. If, however, any such law is passed, the power to thus legislate and the power to perform the various quasi-judicial functions set forth in the bill should not be conferred upon a Cabinet officer or any executive officer. Such functions should be performed by an independent agency that will not merely represent the viewpoint of labor nor the viewpoint of employers. The Department of Labor naturally and properly represents the viewpoint of labor. The creation of a board or unit in that Department would merely mean that certain subordinates of the Department will administer the act, and naturally they will represent primarily the viewpoint of labor. A vast power is conferred upon the administrative unit under the provisions of the bill, and such function should certainly be performed by an independent, nonpolitical agency wh.ch has no special interest in the controversies which may arise between employer and employee. Of course, any statistical information available either in the Department of Labor or elsewhere can be made use of and is made use of by all agencies of the Government, but the actual administration of such a measure should be as independent as the administration of the Interstate Commerce Act. The power to hold hearings and make findings which will be conclusive in the courts if supported by any evidence, the power to impose penalties upon persons who may violate any provision of the law, and the power to conduct judicial proceedings are not proper functions for any officer of the executive branch of the Government, and as a permanent piece of legislation it may be expected that sooner or later politics will creep into administration of this character.

CONCLUSION

In conclusion, the Southern Pine Association believes that the bill as a whole is unworkable and will be unfair to those lumber manufacturers who are seriously undertaking to pay prevailing wages and better the conditions of labor. In the nature of things, innumerable unforesen difficulties will arise and the act recognizes that this may happen, by making a provision that exceptions may be made whenever such action is recommended by an agency of the United States and when justice or public interest will be served thereby. The minute an exception is made for a particular concern or industry, cry of political preference will be made, and the administration of the act will be thrown into further disrepute. Unless the act is thoroughly policed, it will fail of its major purpose and the practical difficulties of policing cannot be overcome. The association respectfully requests that the committee report that the bill should not pass.

Mr. HEALEY. Mr. Compton, you just want to extend your remarks? Mr. COMPTON. If you please.

Mr. HEALEY. What is your name?

STATEMENT OF WILSON COMPTON, REPRESENTING NATIONAL LUMBER MANUFACTURERS ASSOCIATION

Mr. COMPTON. Mr. Chairman, my name is Wilson Compton, and I am here representing the National Lumber Manufacturers Association as a group of related industries. If the chairman will permit,

I will simply file this statement, which I hope will have just as much consideration.

The National Lumber Manufacturers Association, in response to your invitation, appears in opposition to H. R. 11554, the Healey bill, relating to Government contracts. This association represents and speaks for the lumber manufacturing industry in every region of the United States. On August 19, 1935, it submitted to you a statement in opposition to the Senate bill 3055, known as the Walsh bill, then before you for consideration. This statement appears on pages 61 to 68 of the printed hearings. The bill now before you, notwithstanding its more limited scope, is, we think, subject to substantially the same objections and for substantially similar reasons.

The lumber industry's principal criticisms of this bill are:

1. Its major provisions, if enacted, cannot be equitably administered or uniformly enforced; hence it will merely penalize those competitors whom in theory it seeks to encourage and reward, namely, those who undertake to maintain fair wage and hour standards.

2. The proposed obligation on the principal contractor will directly encourage the setting up of devices for concealment, evasion, and immunity, such as became one of the curses of the former Lumber Code.

3. The proposed indirect or implied extension of obligation to subordinate contractors either is so vague, uncertain, and roundabout as to mean little, or if it does, in fact, impose obligations on subcontractors, it means too much, for it cannot be enforced, at least in an industry such as lumber, with 15,000 or more manufacturing sources of supply, mostly small, and tens of thousands of wholesale and retail distributors.

4. The wide discretion proposed to be given to the Secretary of Labor to determine minimum wages and maximum hours contains no adequate protections against arbitrary exactions and requirements; or, for that matter, arbitrary exemptions. Nation-wide experience under the code has demonstrated that wage and hours standards not supported in fact by local public sentiment will not be voluntarily observed and will not be enforced.

5. The bill contains no provision which, in the case of any industry in which it fails to work or in which it results in unfairness, abuses or evasions, would require exemption from the provisions relating to wages and hours.

6. In an industry largely dependent upon Government business honest competitors should not be forced to choose between subjecting themselves to the obvious competitive consequences of an unenforceable law and denying themselves any share or opportunity to share in Government business.

These criticisms go not to the purposes and objectives of the bill but to the clear limitations upon its effective, impartial, and uniform administration.

No one will deny the soundness of fair labor and employment standards. But there are many who will deny that the way to accomplish that objective is to put into the statutes unenforceable legislation which will bind only those who will not or who cannot hide behind evasions, concealments, or subterfuges. We are having a hard enough time already with the various efforts to fortify fair competition within our own industry. Notwithstanding its construc

tive objectives, the code gave a set-back to the industry's progress toward fair competition. Ingenious, usually furtive, and often unscrupulous evasions did that to a code which, to start with, had almost universal industry support and also had available presumably the entire enforcement machinery and powers of the Government. Even with all that, it failed. This bill now before you has no support within the industry. It will fail. But in failing it will in this industry at least injure the very employers whom in principle it wants to encourage and reward.

These criticisms are supported by the unhappy experience of this industry with enforcement under a code containing substantially similar employment provisions. This industry itself spent directly $6,000,000 trying to administer the Lumber Code. If the code failed, it was not because the industry did not try. Recognizing the economic objectionableness of any fixed minimum-cost factors, whether in wages, hours, or any other factor, there would be nevertheless strong support within the lumber industry for an equitable system of minimum wages fairly related to regional and competitive factors and capable of prompt, uniform, and impartial application. There will be virtually no support for the present bill from those who, if it is enacted, will in good faith seek to comply with it. But there will be resentment of the disagreeable alternatives with which members of the industry will then be confronted.

We hope that in your further consideration of this bill these facts may have such consideration as you find to be appropriate.

I may say, Mr. Chairman, that there is no specific criticism to the idea of this legislation, and may I say this: If the opportunity to answer the question the gentleman asked the others-if the legis lation is so limited, as you have suggested, there not only will be no obligation on our part but we will be very glad to see such legislation enacted.

Mr. CITRON. After excluding the prevailing rate of wage that the gentleman before you mentioned?

Mr. COMPTON. No.

Mr. HEALEY. Then do I understand, so we may have it in the record, that you would be in favor of legislation to do what?

Mr. COMPTON. To restrict the use of, or prevent the use of, child labor, and prevent home work.

Mr. CITRON. And convict labor?

Mr. COMPTON. Yes.

Mr. CITRON. And would you go as far as the previous gentleman, to say that it would be possible-or would you favor it, if it could possibly be worked out, the standard set being the prevailing rate of wages?

Mr. COMPTON. Yes, of course, but in the South, the southern manufacturers are those for whom I assume they spoke, but my representation is on behalf of the entire lumber manufacturers and related industries.

Our principal objection to this legislation, as it is now proposed, is that because of our experience with the code and with similar enterprises, taken under the code--we do not believe it is capable of uniform and equitable application and enforcement.

Mr. HEALEY. Mr. Wentworth, we will hear you, briefly.

STATEMENT OF W. A. WENTWORTH, REPRESENTING THE DAIRY INDUSTRY COMMITTEE

Mr. WENTWORTH. Mr. Chairman, my name is W. A. Wentworth, and I am here representing the dairy industry committee, which is composed of six national associations of dairy processers and manufacturers.

Mr. HEALEY. Do you mind if I interrupt you? Mr. Wentworth will be the last witness tonight, and the committee will resume the hearings on Friday morning at 10:30.

Mr. CITRON. What are these assoications?

Mr. WENTWORTH. The International Association of Milk Dealers, located in Chicago; the International Association of Ice Cream Manufacturers, located in Washington; the American Association of Creamery Butter Manufacturers, which has its office in Chicago; the Evaporated Milk Association, with offices in Chicago; the Dry Milk Institute, with offices in Chicago; and the National Cheese Institute, with offices in Plymouth, Wis. Those are the six associations.

I wish to present what I think is a different phase of this question as it relates primarily to dairy products, and in a general way to the food products, as this bill affects this industry. I am making it very specific in that respect.

The dairy industry is selling, perhaps, to as wide a field of governmental departments as any of the food industries. It sells to the Navy for the ships, for the Reserve stations, and so forth; to the Army, for its established posts; to the C. C. C. camps; to the hospitals; and many other establishments operated by the Federal Government. These sales, in addition to being made to a large number of Federal institutions, are generally made by about an equal number of different operators in the industry. The principal reason for this is that such products as those of the dairy industry, and particularly fluid milk and ice cream, are required to meet certain inspection requirements established by the given agency, and the perishability as well as bulk of the products make it impractical to ship any distance.

Consequently, we find that a very small percentage-perhaps less than 3 percent would be a representative figure of the business done by those establishments in the dairy industry-represent their sales to Federal agencies.

All of these sales are made on bids, sometimes on a 30-day basis, generally on a quarterly basis. In a few instances, such as butter for the Navy, the invitation to bid and the contract award may cover a year's supply, but this condition is decidedly the exception rather than the rule.

The relatively short period is on account of the fact that agricultural prices, raw-products cost, are subject to seasonal price fluctuation. Butter can be purchased at a differential over or below, as the case may be, the price quoted on day of delivery on an established produce exchange, New York, Chicago, or San Francisco.

Consequently, when an invitation to bid is offered, the volume representing such a small percentage, there is no way in which the handling by the manufacturer or distributor of this product can be made a special job. Milk and ice cream particularly are processed and

delivered daily in quantities provided in the invitation to bid. It may be less than 100 cans of fluid milk a day within an establishment which may be handling hundreds or thousands of cans of milk daily. In ice cream it may be a few gallons daily in a total output of several hundred gallons.

The Government could, in many instances, effect the exclusion of the provisions of this bill by reducing the period of time proposed in the contract; that is, if reduced from 90 days to 60 days, it might get below the $2,000 limit. They might likewise make it inclusive by extending the time covered in the contract; that is, if they extended it from 90 days to 6 months, they would throw it all into the $2,000 class, whichever way they might see fit to operate.

Mr. WALTER. Would your objection to this bill apply if the bill were limited only to processed materials and would not apply to raw materials, unprocessed materials?

Mr. WENTWORTH. No; the processed materials give us difficulty. Mr. Congressman. I am making the point here that when you have this limitation in an industry like our own, the mere reduction-just using an illustration-from perhaps 18 to 17 cents a gallon on processed (pasteurized) milk might place the total of that contract below $2,000, and the amount could be taken away from labor. I do not know that you could place any limit. If it were $500, or if it were $5,000, you would have the same situation arising in an industry such as this.

So that is one point that presents difficulty to the proposed bidder for Army posts and C. C. C. camps or hospitals, in the same community, where you might find one department of the Government extending the period of time in order to make the provisions of this bill apply, and the other shortening it to escape the provisions. What could the supplier do to meet the above circumstances? Nothing in this bill would prohibit that condition; that is, there is nothing in this bill which says that the department of the Government making these purchases, these purchases of food products, must arrange itself so as to bring about the circumstances which will require, in all instances, compliance with the purposes of the bill.

The bill provides that in the fulfillment of the contract, hours of labor and wages therefore may be prescribed. It does not and could not provide that all labor in any such plant shall comply with the provisions set forth. One who might bid to supply milk to a Federal institution could not comply with any labor provisions other than those which are prevalent in the market in which he operates without jeopardizing his position in competition with those who may not attempt to provide the requirements for the Federal institution. Mr. HEALEY. Let me see if I can get your point there. You mean if a dairy concern had a contract to furnish a Government hospital and had to maintain, with respect to those persons who are directly employed on that contract, certain wages and hour standards, that would jeopardize its opportunity to compete with other concerns in the same business?

Mr. WENTWORTH. I say, Mr. Chairman, that perhaps you did not get the point which I tried to make, really, that in this business it is a portion of each day's business each day; that is, it is a part of our