SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS ΚΕΝΝΕΤH MCKELLAR, Tennessee, Chairman HENRY CABOT LODGE, JR., Massachuset RICHARD B. RUSSELL, Georgia PAT MCCARRAN, Nevada JOHN H. BANKHEAD, Alabama JOSEPH C. O'MAHONEY, Wyoming HARRY S. TRUMAN, Missouri EDWARD R. BURKE, Nebraska JAMES F. BYRNES, South Carolina EVERARD H. SMITH, Clerk II LABOR DEPARTMENT APPROPRIATION BILL, 1940 : THURSDAY, MAY 18, 1939 UNITED STATES SENATE, SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS, Washington, D. C. The subcommittee met, pursuant to call, at 11 a. m. in the committee room, Capitol, Hon. Kenneth McKellar (chairman) presiding. Present: Senators McKellar (chairman), Truman, Burke, and Taft. The subcommittee thereupon proceeded to the consideration of the bill (H. R. 5427) making appropriations for the Labor Department for the fiscal year ending June 30, 1940, and for other purposes. LETTER FROM SECRETARY OF LABOR OUTLINING CHANGES DESIRED Senator MCKELLAR. I submit for the record the following letter from the Secretary of Labor outlining the changes desired in the Labor Department appropriation bill for the fiscal year 1940. H. KENNETH MCKELLAR, DEPARTMENT OF LABOR, Chairman, Subcommittee in Charge of Labor Department Appropriation Bill, United States Senate, Washington, D. C. DEAR SENATOR MCKELLAR: Thank you for your letter of March 29, inviting me to indicate the changes which I deem necessary in the Department of Labor appropriation bill for the fiscal year 1939, H. R. 5427. This Department does not deem it necessary to recommend any major changes in this bill as it was passed by the House. However, some minor changes are deemed necessary by reason of the fact that some items were inadvertantly placed in the wrong category. These items have been called to the attention of the clerk of the House Appropriations Committee, and he agrees that the following changes should be made in the bill. In setting up the contingent expenses appropriation for the Department of Labor, the House committee transferred from the United States Employment Service and the Wage and Hour Division certain amounts for the purchase of supplies, equipment, etc. However, the item for "Street-car fares, not exceeding $500," in line 22, page 2, was not amended. In view of the fact that each of the Services mentioned requires more street-car fares than the rest of the Department combined, it is necessary that the limitation for this purpose be materially increased. It is, therefore, recommended that the language controlling such experditures be eliminated, or if this is not agreeable to your committee that a limit of $1,800 be substituted in place of the amount ($500) now stated, so as to provide the necessary funds to meet the expense of street-car fares. The insertion of the words "teletype service and tolls (not to exceed $900)," in Line 6 of page 3, if unchanged, will result in a reduction of the amount allowed for the purchase and exchange of law books, etc. It is therefore recommended that this phrase be eliminated from line 6 and inserted after the semicolon following the words "stenographic services," in line 11 of page 3. In transferring funds for the purchase of printed forms and letterheads from the appropriation for the United States Employment Service to the departmental appropriations, the House committee placed the sum of $16,500 in the appropriation for contingent expenses, whereas it should have been placed in the appropriation, for printing and binding. In order to make these funds available for the purpose stated, it is recommended that the following changes be made: The sum of $250,120 in line 15 of page 3 should be decreased to read "$233,620"; the sum of $438,300 in line 2, page 4, should be increased a like amount to read "$454,800." None of the changes referred to will in any way affect the total amount of the bill as passed by the House of Representatives. Should your committee contemplate making any changes in this bill other than those heretofore enumerated, it is our desire to be advised so that we may be permitted to be heard with regard to such changes. Sincerely yours, WAGE AND HOUR DIVISION INCREASE REQUESTED FRANCES PERKINS. Senator MCKELLAR. Before you begin your statement Mr. Andrews. I wish to submit for the record a letter received from you requesting a hearing in behalf of the restoration of $176,370, which is the amount by which the Budget estimates for the Wage and Hour Division were reduced by the bill which is now before us. I also wish to file for the record a letter from Mr. Richardson Saunders, assistant to the Secretary of Labor, bearing on the same subject. (The letters referred to follow:) Hon. CARTER GLASS, UNITED STATES DEPARTMENT OF LABOR, WAGE AND HOUR DIVISION, Chairman, Senate Committee on Appropriations, United States Senate, Washington, D. С. MY DEAR SENATOR GLASS: The appropriation bill for the Department of Labor as passed by the House of Representatives reduces by $176,370 the amount recommended by the Bureau of the Budget for the operation of the Wage and Hour Division. It is my sincere belief that the Wage and Hour Division cannot operate effectively on the reduced amount. I would, therefore, appreciate the opportunity portunity of presenting to the Senate Committee on Appropriations additional information to support the full amount recommended by the Director of the Budget. Sincerely, Approved. ELMER F. ANDREWS, Administrator. Hon. KENNETH MCKELLAR, FRANCES PERKINS, The Secretary of Labor. DEPARTMENT OF LABOR, OFFICE OF THE SECRETARY, Chairman, Subcommittee in Charge of Labor Department Appropriation Bill, United States Senate, Washington, D. C. DEAR SENATOR MCKELLAR: In the absence of the Secretary, I am submitting herewith a copy of a letter, dated April 20, 1939, addressed to the Honorable Carter Glass, chairman, Senate Committee on Appropriations, by the Administrator of the Wage and Hour Division, asking for the restoration of $176,370 eliminated from the departmental request for the fiscal year 1940 by the House of Representatives. Under date of April 20 the Secretary wrote you with regard to our appearance before your subcommittee in connection with another item in the amount of $100,000 which has been eliminated in the first deficiency bill for maintaining the Wage and Hour Division for the remainder of the fiscal year 1939. I shall appreciate it if you will notify me when it will be convenient for your committee to hear us on the matters touched upon in this communication. Very truly yours, RICHARDSON SAUNDERS, Assistant to the Secretary and Budget Officer. STATEMENTS OF ELMER F. ANDREWS, ADMINISTRATOR; M. K. WOOD, BUDGET OFFICER, WAGE AND HOUR DIVISION; AND RICHARDSON SAUNDERS, ASSISTANT TO THE SECRETARY ADMINISTRATION OF WAGE AND HOUR LAW Senator MCKELLAR. Mr. Andrews, will you state what items you wish to discuss? CUT MADE BY HOUSE Mr. ANDREWs. Mr. Chairman, before the House Appropriations Committee I made a rather formal presentation. I do not know whether or not it was the cause of our receiving a reduction, but we are appearing before you to plead for at least the restoration of that amount. Senator MCKELLAR. We have that formal presentation; so I imagine the best way for you to do is to go ahead and tell us what items you wish to bring to our attention. Mr. ANDREWS. I should like to describe briefly our present situation, and the situations that experience to date tells us we will face after July 1, 1939. Parenthetically, it may be pointed out that in preparing the original Budget estimates early last fall for the fiscal year of 1939-40, neither the Wage and Hour Division, the Department of Labor, nor the Bureau of the Budget had experience on which to base such estimates. Necessarily, these estimates were extremely conservative. In the absence of experience, the Bureau of the Budget was sympathetic in supporting requests for deficiency appropriations necessary to carry out the intent of the act. Now, however, we have 6 months of actual administration of the various sections of the WageHour Act. It is now possible to estimate our needs with greater accuracy. SUPPORT OF ACT Here is the present picture: The public generally supports the act; labor supports it; I believe a majority of the employers of the country recognize its value in their own dealings and in the economy of the country as a whole. But and this, I submit, is a very grave and disquieting fact-many well-established, highly responsible employers who have been and are now complying with the act are suffering from competition furnished by employers who are not complying with the act. Our field staff of inspectors, our central office staff both in the cooperation and enforcement branch and in the legal branch where preparations for litigation are made, are undermanned and overworked. Today we are able to take care of not more than one-fifth of the load of valid complaints. While we have had an maazing record of successful litigation to date, we have not been able to make enough inspections, prepare enough cases for trial, and actually file complaints in enough instances, to cut down and keep down noncompliance. Several weeks ago we faced a critical situation in a major industry. Responsible leaders of the industry said that the bulk of the employers were complying, but that the competition furnished by a minority of violators was intolerable. They pointed out that the responsible employers could not continue to comply and stay in business unless we checked the production and sale in interstate commerce of goods produced in violation of the act. We thereupon swung practically the entire inspection staff in the region over to inspection of plants in the industry. We brought action against one concern, and obtained a consent decree which instantly tied up a major part of his stock, preventing its movement in interstate commerce. CASES INVOLVING LEGAL ACTION This victory had a wholesome effect, but it must be followed by other court actions. We have other cases moving toward legal action. The preparation of many of these cases is complicated, expensive, and time consuming. It is necessary to run back the trail of the products to the tributary plants over scattered and wide areas, and to make pav-roll inspections as to hours and wages in each of these plants. While we are giving almost exclusive attention to one industry, it is inevitable that the situation in other industries will tend to become unbuttoned. ENFORCEMENT The enforcement picture for the country as a whole can be presented breifly. As of May 2, we had received a total of 14,370 complaints which alleged violations of the act. A total of 9,915 complaints had been analyzed as of this date, leaving approximately 5,400 complaints which have not yet been completely analyzed. It appears that 4,839 out of the 9,915 complaints analyzed constitute violations of the act if the facts stated in the complaint are found by investigation to be accurate. If the same proportion holds true for those complaints not yet analyzed, we estimate that approximately 6,675 complaints will require investigation in order to determine to what extent violations exist. There are 123 inspectors in the field at the present time, in addition to 6 regional directors and 4 attorneys. Up to January 25, there were only 56 inspectors in the field. On January 25, 43 additional inspectors were sent out; and on February 23, 24 more inspectors were sent to the field. We have not had funds to send out any more inspectors since February 23. This staff of 123 inspectors had been able to make only 1,030 inspections to date. This is about 20 percent of the total number of inspections which should be made immediately. Every effort is being made to improve the efficiency of operations. We are reorganizing our work so that the detail of checking pay rolls, making computations of unpaid wages, and preparing inspection reports can be done by clerical help, thereby leaving the inspectors free for the more difficult work of examining pay rolls for discrepancies or falsification and obtaining testimony from workers. |