General JOHNSON. Since I was 16, and I am not going to tell you how long that is. Senator ELLENDER. I am talking about the cotton mills, those two cotton mills you spoke of. General JOHNSON. I went to work in the mill originally in New Brunswick, I suppose, 35 years ago. Then we moved to New Hampshire and then to Georgia, and so forth. Senator ELLENDER. Am I to understand that the cotton mills have been put up by you 35 years ago? General JOHNSON. My father put them up-not this one you are talking about in Georgia, but others. Senator ELLENDER. But the ones you put up, about 75 percent of their production goes to Johnson & Johnson-when were they put up? General JoHNSON. By stages, over the years. Senator ELLENDER. What is the minimum wage you pay now in those mills? General JoHNSON. Mr. Dixon is here and has those figures. Our tradition is 10 percent above average. What is the minimum wage? Mr. DIXON. 65 cents in the North and 55 cents in the South. Senator ELLENDER. Why do you not pay more than 55 cents? General JOHNSON. Because our competitors do not, and we can only go so far. In other words, we can pay a 10 percent premium over other people, but not 50 percent. Senator ELLENDER. Why can you not do it; is it because of the rulings of the War Labor Board? General JOHNSON. I don't know about that, but we cannot because our competitors do not; is that clear? Senator ELLENDER. No; it is not. You said a moment ago that by paying high wages you were able to get so much more production out of your workers-that was in your statement off the record. I am wondering why you do not follow that policy. General JOHNSON. We do. Those firms have always paid 10 percent above the average no matter where they were, North, South, or Middle West. We can go that far but we cannot go beyond it unless you help us. There is only one reason for low wages, and that holds good whether in the North or the South, and that is what the fellow down the street pays. Senator ELLENDER. Would you mind giving us the increase in the number of employees that you have employed in the last 10 years? General JoHNSON. Well, that would be a guess, but it amounts to this. Let us take the depression period. When I went to work we had 30,000 spindles, and now we have 180,000. There has been a steady increase in the number of spindles and in the people employed. Senator ELLENDER. As I understood the other day, and if I am wrong correct me, the increase in the number of employees was from 25 to 30 percent. Senator TUNNELL. In what? Senator ELLENDER. The number of people employed over a period of 10 years. General JOHNSON. I think that is probably right. Senator ELLENDER. How much has your production increase been with that increase in labor? General JOHNSON. More than that. Senator ELLENDER. I understood it was about 200 percent. General JOHNSON. No; you cannot do that. In some business you can and in some you cannot. Take a cotton mill. By dint of the finest management you can eke out an improvement in the operation of a well-managed cotton mill. That is as far as you can go. In another business you can invent a machine or something- Senator ELLENDER. That is the next question I was coming to, General Johnson. You talked about Ford a while ago and you talked about your own business; is it not due to the fact that so many laborsaving devices have been used by you and are now being used by Ford and others that has made it possible for the cost of production to decrease so rapidly in the past few years? General JOHNSON. That is the answer. Senator ELLENDER. That is the answer to it. General JOHNSON. That is the answer. Senator ELLENDER. Well, now, do you know to what extent we would have unemployment if everybody followed the same course as you and Ford and others have followed? General JOHNSON. I have got a pretty good crystal ball, but it is not quite that good. Before you came in, I said I did not think a 40-hour week will do the job, and while I recognize you are discussing minimum wages, I recommended you have the 36- and the 30-hour week. Senator TUNNELL. You are employing more people all of the time? General JoHNSON. Yes. Senator ELLENDER. But not in proportion to production. General JoHNSON. You are right, Senator Ellender, and that is why the 40-hour week will not solve the problem. Senator TUNNELL. What has the proportion got to do with it? The actual number of employees is greater; is that correct? General JOHNSON. Let us look at the question of production per manhour in relation to the Senator TUNNELL. Here is what I am trying to find out : Senator Ellender asked if everybody used machinery would that increase un- . employment. My suggestion was, and I took it from your testimony, that notwithstanding the fact that you have increased your machinery you have also increased your number of employees. General JOHNSON. That is right, but it does not apply to the textile business at large. What happened there, Senator, is more like this:: Through increased efficiency in selling and production we took business from other people in the textile industry. Senator ELLENDER. That is right. General JOHNSON. Now, we went through 10 years of depression, wtih a couple or 3 years that were not so bad, and long before that, even in 1929, we had a considerable unemployment situation in the U. S. A. As you study the history of working hours, going back to the origi nal industrial period in England, you will find a constant reduction. Along about 1933 we began to experiment with the 6-hour day, which we have found, for certain industries, the most efficient day so far devised. As I see the value of a machine, it cuts four ways. If you have a machine that is producing 100 a minute and you design a new one to produce 200 a minute, the saving from that machine should be given, part to the customer, part to the employee, part to management, and part to the owners. Now, as you go on with this machine, which is meant to be a conservation of manpower, you ought to be able to produce your daily needs at a constantly decreasing use, and I believe we have demonstrated pretty clearly in the past 15 to 20 years in the United States that we can out-produce our own needs on a 40-hour week. Now, I realize that here we are getting over into something that you really are not on now, because it would be untimely to talk about shorter hours when there is a manpower shortage, but maybe a year from now there will not be. I think we are in a position from here on out where we should consider shorter hours. Senator TUNNELL. But do you think we should consider doing away with the machinery? General JoHNSON. No. Senator TUNNELL. That seems to be the drift of the argument on the other side. General JOHNSON. No; that would be tragic. What do you suppose it is that makes it possible for an American farmer or workman to live at a decent rate while the Hindu farmer is at a starvation level? The Hindu farmer has a bullock and a piece of stick, and he raises about a bushel a year. It is our productive capacity that enables us to pay higher wages and work shorter hours. Senator TUNNELL. There is no tendency in industry to take away machinery and thereby increase the numbers to be employed? General JOHNSON. No; just the reverse. Senator SMITH. And you agreed there should not be? Senator SMITH. I agree. Senator ELLENDER. I do not suppose anyone would want to do away with machinery, but if we use machinery the hours per week must be reduced from 40 to 36 or to 30 so as to give employment to all. If men and women continue to work 40 hours a week you might reach a point where you will have too much production by those machines and unemployment would follow. General JOHNSON. I do not think there is any question about that. Senator ELLENDER. That is why you advocate reducing the hours, so as to be able to take care of the same number of employees? General JOHNSON. That is right. Now, let us look at unemployment in one of its different aspects. We produce this machine and we give man a degree of leisure. Let us call unemployment badly divided leisure, and let us talk about dividing the leisure as well as the work. As we go along and have better tools it allows us to give our people a greater degree of leisure for the things needed to make a better life. I do not think it is altruism; it never worked that way with me. I have nothing against the academic mind at all, but at least I do run my business and at least I am not a failure, and it has always disturbed me that in the textile business more people did not come to look at the way it was being operated instead of being critical of it. Senator TUNNELL. I am not going to get into any argument with you, but I think when we now have 2 billions of people, whereas 200 years ago we had only 800,000.000, that there is still room for work for both the people and the machine. General JOHNSON. Check. Senator SMITH. World-wide, you mean? Senator ELLENDER. Of course. Senator TUNNELL. Yes. Senator ELLENDER. It should not be anything else. Senator TUNNELL. I do not think you are forcing people out of employment by the use of machinery. General JOHNSON. No; you are not. Your best employment records in terms of increase, following your point, is in your highly mechanized industries. Take the total employment record of something as Victorian as the textile industry, and take its employment record over 50 years and put opposite the motorcar business, you will get some idea of the difference. The motorcar business has gone up like that [indicating perpendicular], and the textile has been just like that [indicating horizontal]. In fact, 25 years ago we had 40,000,000 plus spindles in the United States, while today we have only 23,000,000. Senator TUNNELL. All right, General; we have taken you over an hour. Senator TUNNELL. All right, General; we have kept you over an hour. Thank you. Senator SMITH. I want to thank the general for what I think a very fine exposition. General JOHNSON. Thank you, Senator. Senator TUNNELL. I do, too. Senator TUNNELL. Is Mr. Lyon here? Mr. LYON. Yes, sir. TESTIMONY OF A. E. LYON, EXECUTIVE SECRETARY, RAILWAY LABOR EXECUTIVES' ASSOCIATION Mr. LYON. My name is A. E. Lyon. My address is 10 Independence Avenue SW., Washington, D. C. I am executive secretary of the railway Labor Executives' Association, and I appear in behalf of that association in support of the pending bill. The Railway Labor Executives' Association is composed of the chief executive officers of 19 national and international railroad labor organizations, as follows: Brotherhood of Locomotive Firemen and Enginemen Order of Railway Conductors of America Switchmen's Union of North America Order of Railroad Telegraphers American Train Dispatchers' Association International Association of Machinists International Brotherhood of Boilermakers, Iron Ship Builders and Helpers of America International Brotherhood of Blacksmiths, Drop Forgers and Helpers Sheet Metal Workers International Association International Brotherhood of Electical Workers Brotherhood of Railway Carmen of America International Brotherhood of Firemen and Oilers Brotherhood of Railway and Steamship Clerks, Freight Handlers, Express and Station Employees Brotherhood of Maintenance of Way Employees Brotherhood of Railroad Signalmen of America National Organization Masters, Mates, and Pilots of America International Longshoremen's Association Hotel and Restaurant Workers International Alliance These labor organizations represent about 1,250,000 railway workers or more than 80 percent of such employees in the United States. It is my purpose to make a very brief statement as I understand that Mr. L. E. Keller, an officer of the Brotherhood of Maintenance of Way Employees, is to appear immediately following the conclusion of my testimony and he will be prepared to deal in some detail with the need for this legislation and will present important facts and figures on the railway industry and its wage policies and practices. I am familiar with the statement he has prepared and I desire to associate myself with it and endorse it. Our association has carefully considered the pending bill, S. 1349, and we urge that it be enacted, with certain amendments which I will later discuss. We believe that revision of the minimum wage provisions of the Fair Labor Standards Act is one of the important steps that should immediately be taken by Congress as an aid to essential improvement and maintenance of the living standards of a large group of American wage earners. We believe that substandards of living must be eliminated as rapidly as possible if American industry and commerce is to continue at the high level of activity which is necessary if we are to avoid a tragic period of depression and unemployment. We do not believe that a minimum wage of 65 cents per hour, or of 70 cents, or 75 cents per hour, is high enough to produce or permit an adequate standard of living for American wage earners. But enactment of the bill providing for these minimum wage rates will be a forward step and we think that this step should be taken promptly. Such action will not only benefit a group of workers who need and should have a substantial improvement in their abilities to buy and consume the products of our farms, factories, and transportation systems, but it will also be beneficial to the owners and managers of industry and to the public interest. Low-wage workers are poor producers and poor consumers. If their wage incomes are increased to permit them to buy and consume the food, clothing, shelter, and other necessities which they want and which they deserve, a large increase in the market for such items will be created, more will be produced, sold, and transported and a higher level of business activity and employment will be established and maintained. I wish to correct any impression which may have been left by the testimony of the witness who appeared for the railway companies that section men, or the employees who work on the track, are the only railway workers who suffer from the evil of extremely low wages. Numerous other classes of railway employees are still being paid wage rates which do not permit adequate living standards. About 20 different occupational classifications would be generally affected by enactment of the pending bill. Senator SMITH. Do you think that would necessitate rate increases by the Interstate Commerce Commission? Mr. LYON. Most certainly not. Mr. Keller, the next witness, will give you very interesting information on that. |