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He said you would increase the supply of stamps and there would be so many stamps that the supply of meat would be dissipated quickly.

Senator MAYBANK. Decrease the supply of stamps, and the meat would back up.

The CHAIRMAN. That was it. He would cut down the number.

Senator MAYBANK. Cut down the number, and that would back. the meat up in these small packing houses.

The CHAIRMAN. What do you say to that? Mr. GREEN. I hardly am prepared to express an opinion on that, because I am not familiar with that detail of it. That is a little detail that I had never thought of.

The CHAIRMAN. He spoke of it.
Senator MAYBANK. He said that he would-

Senator SPARKMAN. He was comparing the position of the small independent packers with the big packers. .

Senator MAYBANK. He said to get the prices down, that the only way he could get prices down would be not to issue as many stamps as there was meat available, and therefore he would issue less stamps, and that would in turn cause the meat to be blocked up in the packing houses, and go to the black market. He said that could be done, but would not be done.

Senator SPARKMAN. They have the stamp but not the meat. He also said that under existing conditions, he thought that a serious black market would promptly eventuate, and get 60 percent of the meat if we had rationing.

Senator MAYBANK. Another thing he said that would be of interest to you, he said the great trouble with the small packers was the competition from the chain stores who could absorb those costs through the sale of other things, the big chains. They would be the benefactors, and the small packers would be out. That is his testimony. They would be out of business.

Mr. GREEN. They did not have that experience before under rationing. .

Senator MAYBANK. He read a statement from Mr. Gilbert, at that time head of the OPA, decrying that.

Mr. GREEN. Experience is a great teacher. Why can't we find a remedy for that now if we learned that, then?

Senator SPARKMAN. Do you not think that these are things that develop from a long range program, rather than one of temporary nature, such as you recommend ? Mr. GREEN. I think so.

Senator SPARKMAN. Your program would simply bridge over this period of time which we hope will be very short, during which the meat supply will be very short.

Mr. GREEN. That is right.

Senator SPARKMAN. And Mr. La Roe himself said that if we should come to the point where the meat supply is greatly reduced below what we are accustomed to using, then rationing might be necessary.

Mr. GREEN. Yes.

Senator SPARKMAN. And we do know that the contention of the Secretary of Agriculture is that in the late spring and summer months, the meat supply will be down to 125 pounds per person, which is about

31 pounds below what we consumed during 1947, but that that will probably be just a period of some 5 or 6 months.

The CHAIRMAN. Did you say 146?
Senator SPARKMAN. Spread over the year as a whole.

Mr. GREEN. Eight. Price controls. The thought of Government intervention in the private market is distasteful to the average American. Reliance on the maximum of freedom in our economic life is an ideal to which the American Federation of Labor is strongly devoted.

We supported price control in wartime and made a large voluntary contribution through our affiliates in helping to make it work. This support was continued until price control was terminated in the fall of 1946. At that time we felt strongly that price control machinery, already established and functioning, should have been continued for at least another year. We are convinced today that if price control had not been repealed by Congress great progress would have been made in returning to a free market under stable prices.

We are equally convinced that the liquidation of general price controls in the fall of 1946 makes it impossible now to reinstitute general price control in all phases of our economy. Without adequate administrative machinery and a large staff extending over the entire country, any attempt at price regulation is bound to fail. Nor do we believe that imposition of a general price control at this time, even if workable, would be desirable. Changing conditions since the end of the OPA would require a vast amount of study and preparation in order to make such control anywhere near equitable. Without such preparation, the danger is too great to place upon American industry and trade controls that are arbitrary and that would impose a disproportionate burden upon production of goods and services so greatly needed.

We do believe that in the case of a few specific commodities which are in critically short supply and which most significantly affect the cost of living, study and consideration should be given to the feasibility of applying selective price controls on such commodities when all other means fail. We therefore recommend that limited authority be granted by Congress to the President on a temporary basis to place price ceilings upon specified commodities only when they are found to be in extremely short supply and only when a full justification is provided, after notice and hearing, for the imposition of price ceilings on such commodities as a last resort.

Let me make clear the American Federation of Labor's views toward the proposal to impose ceilings on wages. As I have already stated, labor would prefer to see a reduction in the level of prices than to press for an equivalent increase in wages. In seeking upward wage adjustments to date labor has had no alternative. Pressed with continuing and accelerating increases in living costs, workers have insisted on preserving their standard of living. This they were doing, aware of the absence of any effective anti-inflation program which would hold out to them a promise of price stability.

Because of the lack of proper anti-inflation measures current wage levels have fallen far behind the living costs. Unless this condition is corrected and the upward march of prices is halted, workers will again be compelled to seek additional wage increases.

The proposals for wage control pending the consideration of your committee are made a part of the proposed price-control system. Such

proposals lose sight of the fact that once price ceilings are imposed on a particular commodity, any substantial advance in wages will be effectively prevented by the very presence of such a price ceiling. Wage determination is the result of voluntary agreement of labor and employers. Employers subject to price ceilings may be willing to make some wage adjustments which would not increase prices and which are in their direct effect not inflationary. But where a wage increase would necessitate an increase in the price, such wage increases would, of course, be denied by the employer. He will say no.

If Congress chooses to enact a comprehensive anti-inflation program which accords with the recommendations I have made, I would like to advance a proposal which I believe can be most effective if carried out as a part of the Nation's anti-inflation drive. And this deals with the real remedy for inflation, and that is production-production built up to the point where that balances with market requirements.

I recommend that labor and employers be called upon to enter into voluntary agreements, made pursuant to collective bargaining, to extend the hours of work by 1 hour per day with the prevailing standard of overtime compensation for the additional hour worked.

I cannot help but believe that that increased pay of overtime can be absorbed by the industries of the Nation without adding a single mill or penny to the increase in prices.

Senator ROBERTSON. I was surprised to read the other day that our total manufacturing production was less in 1946 and 1947 than it was in 1945. Is that correct?

Mr. SHISHKIN. That is right.
Mr. GREEN. That is correct, I think.

Senator ROBERTSON. Yet, we have about 9,000,000 more industrial workers now than we had then.

Mr. GREEN. Yes; total employment is that much greater, but in manufacturing it also dropped off sharply.

Such agreements would make possible a substantial increase in the rate of production of goods and services, without a proportionate increase in the unit cost. Addition of 1 hour per day with overtime pay would not be inflationary, because by making an uninterrupted use of overhead and equipment the per-unit cost of the goods produced in the extra hour would more than absorb the overtime compensation.

Nearly 16,000,000 workers are currently employed in manufacturing alone. Even if such agreements extended to only half of such workers, we would add 8,000,000 man-hours of production per day, 40,000,000 man-hours of production per week. This in itself would make a strong contribution to the increased production and would help alleviate scarcities of industrial products.

It is true that in some industries where continuous operations prevail, or other special conditions intervene, such an arrangement may not be feasible, but in all other situations a proposal to substitute an additional hour of work a day at overtime compensation for increase in the rates of pay would make an important contribution toward the concerted national effort to achieve stability. This proposal can only be workable if an effective program is adopted to halt the rise in the prices paid by workers for the necessities of living. I offer this suggestion as a practical recommendation of the ways in which employers and workers could jointly make a contribution to the antiinflation fight.

That would increase the take-home pay and it would make it possible to utilize the skill and the training and the productive ability of these millions of workers for 1 hour more per day

Senator MAYBANK. That is being done anywhere now, to speak of the 48-hour week?

Mr. GREEN. Very little, now. There is no reason why it should not be done, but it seems that the employers hesitate to do it because of this overtime pay for 1 hour.

I am sure though that the progressive employer can absorb that cost without passing it on to the public. There is not any reason under the sun why they cannot.

Senator MAYBANK. There is not any law against it.

Mr. GREEN. Pardon me. We are on a 40-hour workweek, but our workers will work an extra hour per day on the terms of the contract which provides for overtime.

Senator MAYBANK. There would not be anything in the law or anything now that we have to change. Mr. GREEN. No law at all. That is a recommendation.

The CHAIRMAN. Nothing to hinder that being done pronto right now, if it is agreed upon; no legislation is necessary for that.

Mr. GREEN. No legislation necessary. I said that merely it was a recommendation on the part of Congress and would have a tremendous effect.

Senator MAYBANK. It would have some weight with the employers, a recommendation from us as you suggest would have some weight with the corporations also. Mr. ĜREEN. That is right.

I would like to enter a strong objection to the provisions embodied in the Barkley bill (S. 1888) which would place wage controls in the hands of the particular Government department vested with the responsibility for setting prices. Under this bill, wage ceilings would be mandatory whenever the executive department enforcing a price ceiling decided thatan increase in wages to the employees producing such commodity would result in substantial increases in the cost of production thereof, and would require an increase in the established maximum wholesale price for such commodity.

There is no discretion in this directive; there are no standards set up to guide the various departments who would be enforcing a price control program; there is no arrangement for any consultation with labor or industry groups. The only manner in which any type of labor consultation is provided is through membership on the temporary wage stabilization board which is established, not for the purpose of determining whether wage ceilings should be set but rather of determining what the wage ceiling should be.

I submit that the proposed system of wage controls is unrealistic and is bound to prove thoroughly unworkable. It is my considered judgment that an attempt to regulate by Government fiat a vast multitude of wage adjustments throughout our economy would be doomed to failure and even under the most favorable conditions would not accomplish the purpose intended.

Senator ROBERTSON. I assume, then, that you are definitely opposed to any law that imposes wage ceilings no matter how they would be administered. You just do not favor it.

Mr. GREEN. Yes, I am opposed; we would be opposed to that. That
is where the Government is getting into a field where it should not
enter.

Senator SPARKMAN. You did support the Wage Stabilization Board
during the war, did you not?

Mr. GREEN. During the war, yes. Oh, yes.

Senator SPARKMAN. You do not think a plan like that would work
now?

Mr. GREEN. And we made a no-strike pledge during the war and
kept it. That was war; that was for the winning of the war.

The CHAIRMAN. You have not won the peace yet.

Mr. GREEN. Well, we are not fighting on the battle fronts, though.
We are not killing men now.

I agree with you, and we are disappointed, tremendously disap-
pointed.

The CHAIRMAN. Disillusioned.
Mr. GREEN. Yes.

Senator ROBERTSON. Samuel Gompers made the same kind of a
pledge in World War I that you made, and he kept it.

Mr. GREEN. Yes, he made it and kept it, and we kept it. We carried
out that religiously.

An important part of the anti-inflation program is the tax legisla-
tion pending before this Congress. The American Federation of
Labor after study of all proposals advanced to date wishes to indi-
cate its preference for the tax program presented by the President.
It is clear that millions of wage earners in lower brackets who have
been squeezed the hardest by the increased living costs are now bearing
a disproportionate burden of taxation as compared with others. While
tax relief for them is necessary as a matter of equity, it is important
to realize that at this time a general tax reduction of the character
proposed in the Knutson bill is not only undesirable, but dangerous.

We believe that excess-profits tax on corporations should be reim-
posed. It has been proposed that such excess-profits tax be accom-
panied by tax credits to corporations showing a substantial reduc-
tion in the prices of their products. Such a proposal is worth study
and consideration.

Recent increases in profits as shown by the figures I have already
cited and by the recorded increase in dividend payments, reflecting
increased earnings, present an alarming picture. As stated in the
President's Economic Report to this session of Congress (p. 41):

Although a portion of the large profits earned during 1947 merely compen-
sated for changes in prices profits on the whole were above the levels necessary
to furnish incentives and funds for the expansion of business and to promote
the sustained health of the economy.

As the President's Economic Report also points out at page 40:

This stability of profits throughout the year indicates that business generally
reacted to increases in costs by increasing prices rather than by absorbing them
in whole or in part by reducing profits.

This behavior of profits indicates that many of the price levels are
set higher than is reasonable and that there is room for price reduc-
tions in many areas of our economy.

What we have at stake in this effort to stem the tide of inflation is
not only the future stability of our domestic economy, but also the

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