To claim that plunging this four-pronged pitchfork into the vitals of the WalshHealey Act would merely restore its original intent is to accuse all those in Congress who voted for the act in 1936 of intent to perpetrate a monstrous fraud on their constituents. Outright repeal would be better because the issue would be plain. Nothing worth saving would be left of the wage provisions of the act. They would be worse than useless as a device to protect fair labor standards. It would be better to repeal them outright rather than to leave them on the statute book in emasculated form as a degraded monument to a victory by the sweatshop lobby won in the midst of a grave national emergency by legislative sleight of hand. These amendments would do the wage provisions of the Walsh-Healey Public Contracts Act to death by a stab in the back. Those who seek repeal of the act should say so publicly so that all concerned may see and know the real issue and judge it on its merits. Senator FULBRIGHT. Mr. Pettis, you are next. ANDREW PETTIS, VICE PRESIDENT, INDUSTRIAL UNION OF MARINE AND SHIPBUILDING WORKERS OF AMERICA, CIO Mr. PETTIS. I am willing to just present my statement. Andrew Pettis, vice president of the Industrial Union of Marine and Shipbuilding Workers of America, CIO, 534 Cooper Street, Camden, N. J. This statement is in opposition to the amendments. (The statement of Mr. Pettis follows:) STATEMENT OF ANDREW A. PETTIS, VICE PRESIDENT, OF THE INDUSTRIAL UNION OF MARINE AND SHIPBUILDING WORKERS OF AMERICA, CIO The Industrial Union of Marine and Shipbuilding Workers of America, CIO, is today appearing in opposition to a proposed amendment to the Walsh-Healey Act offered by Senator Fulbright, to make industry-wide rate determinations under the provisions of the Act impossible. First it must be clearly understood that the Walsh-Healey Act does not apply to the construction of any vessels other than naval vessels, and is not applicable to the repair of vessels. On October 1, 1945, the Secretary of Labor and the Administrator of the Public Contracts Division released section 7 of Rulings and Interpretations No. 3, dealing with the application of the Walsh-Healey Act to the shipbuilding and ship repair industry. This states the following: "(a) Contracts to manufacture or furnish small vessels such as canoes, rowboats, and launches are contracts for the manufacture or furnishing of equipment and are subject to the Act. The construction of ships, except as provided in subsections (b), (c), and (d) below, is not subject to the Act. "(b) Section 12 of the Act of May 17, 1938 (52 Stat. 403, 34 U. S. C. 498K), and section 8 of the Act of June 14, 1940 (54 Stat. 395, 34 U. S. C. 498L), enlarged the application of the Public Contracts Act by providing that the construction, alteration, furnishing or equipping of any naval vessels shall be in accordance with the provisions of the Public Contracts Act, unless such course, in the judgment of the President of the United States, should not be in the public interest. "(c) These statutes do not extend the jurisdiction of the Public Contracts Act to the construction, alteration, furnishing, or equipping of all ships, but only to such activities when they are performed on naval vessels. Accordingly, these acts would not subject to the Public Contracts Act the construction of a merchant ship under a contract let by the United States Maritime Commission. "(d) Under these statutes all work of the kinds described must be performed in accordance with the provisions of the Public Contracts Act whether the work is performed by a primary contractor or by a secondary contractor. A secondary contractor who is not himself engaged in the construction, alteration, furnishing, or equipping of a naval vessel is not by reason of these Acts brought within the purview of the Public Contracts Act merely because he manufactures materials used in shipbuilding or furnishes them to shipbuilding firms having contracts to construct such vessels." [Emphasis supplied.] Therefore, the Walsh-Healey Act does not apply to the construction or repair of merchant vessels and does not apply to the repair of naval vessels. In both of these cases the Davis-Bacon Act applies. We would like respectfully to point out to the Banking and Currency Committee of the United States Senate that it would be impossible in an emergency situation in the shipbuilding industry to apply the Walsh-Healey Act on an area basis or on any basis less than that of a zonal basis. During two previous national emergencies when naval shipbuilding was carried on in private yards, wages in the shipbuilding industry had to be stabilized nationally to prevent labor scamping or piracy. The shortage of skilled labor in shipyards during any emergency period makes Nation-wide rate setting the only method of preventing a disastrous spiral in wages because yards are outbidding each other for workers. The only time at which the Walsh-Healey Act would apply to this industry would be a time of emergency when private contractors are building naval vessels. Naval construction is usually carried on in Government naval shipyards and it is not let out to any great extent during times of peace. It is, however, let out during time of national emergency. At this point during the time of emergencyany attempt to limit minimum wage determinations under the Walsh-Healey Act to an area-even to a labor market area as that term is technically knownwould mean that labor piracy would be encouraged by the very action of the law, something we have attempted to avoid at all costs in this industry. Senator FULBRIGHT. Mr. Paley? Mr. PALEY. Here is a statement of the United Paperworkers of America. STATEMENT OF HENRY PALEY, RESEARCH DIRECTOR, UNITED PAPERWORKERS OF AMERICA, CIO Mr. PALEY. I am speaking on behalf of our opposition to the Fulbright amendment. This amendment is particularly important in our industry today. Following careful study of the amendment proposed by Senator Fulbright, it is the conclusion of the United Paperworkers of America that the adoption of these amendments will result in extensive damage to the present wages and working standards in the paper industry. As the sixth most important manufacturing industry in the United States, employing a half million Americans, it is our sincere belief that any conditions adversely affecting paper industry standards should be a matter of great concern to the Senate of the United States, as well as all other Americans. There is no question but that the proposed amendments would result in substantial weakening of the Walsh-Healey Act and may, in effect, have the same result as repealing such limited effective administration of the Walsh-Healey Act as now exists. Passage of the Fulbright amendment would be equivalent to Government subsidy of marginal producers existing solely on their ability to pay substandard wages. No one will dispute the fact that the manufacturer contracting with the Government has the advantage of a favored and secure market. Funds for these purchases by the largest buyer in the world comes. from all the taxpayers of the United States whose elected representatives have made it abundantly clear, in such legislation as the WalshHealey Act, that it is contrary to public policy for the Government to encourage competition in bidding for Government contracts on the basis of cutting wage and working standards. To the contrary, it is clearly in the interest of the entire economy to encourage greater production of enterprises meeting prevailing wage standards. The Walsh-Healey Act, it should be emphasized, does not provide premium pay for employees of Government contractors; it merely stipulates meeting "prevailing" scales which are usually below union standards for industry. It would be more fitting, in this time of national emergency, for theSenate Banking and Currency Committee to be considering legisla-tion to strengthen the Walsh-Healey Act rather than weaken it. We should like to call attention to the so-called locality amendment submitted by Senator Fulbright. Revision of this provision can do substantial damage both to employees and manufacturers in the paper industry engaged in fulfilling Government contracts. A fact generally known is that much of the American paper industry is located in smaller communities, in many cases mills and factories are located in different communities only a few miles apart. Under the amendment one company paying substandard wages and having substandard working conditions, and possibly by circumventing other wage and hour laws, could steal from a neighboring community Government contracts to the detriment of the more prosperous community and to the damage of the current Government contractor and his employees. The American paper industry is spread out over thousands of small communities throughout the country. Adoption of the Fulbright amendment would make necessary thousands of separate determinations for Government contracts and would be next to an administrative impossibility. Moreover, it has already been proven that cost-of-living and other factors such as freight rates, material and production costs, do not vary to an extent making it necessary to go to such radical extremes as is contemplated by the Fulbright amendment. At the present time it must be admitted that the provisions of the Walsh-Healey Act have made no great contribution to improvement. of wages and conditions in the paper industry; however, the existence of this law has, to some extent, been a source of encouragement to those employers who have endeavored to provide reasonable and decent working standards. On the other hand, the adoption of this amend-ment would reverse the beneficial influence of the Walsh-Healey Act and, in effect, be a source of encouragement for substandard competition. At a time when the paper industry is confronted with what amounts to a recession, passage of the proposed amendment would encourage operation of marginal manufacturers. Paperboard, one of the three largest segments of the industry, is now being produced at about 85 percent of capacity. In 1950 and 1951 this branch of the industry was operating at better than 100 percent of capacity. The container field, another of the large industry divisions, has suffered even more drastically. It is only in the fine-paper division where the industry has been able to maintain relatively high levels of productive capacity. A major part of Government purchases is in this division. The proposed amendment would undoubtedly have a depressive effect upon those branches of the industry already depressed by various economic conditions and moreover would serve to weaken the fine paper branch. Bringing marginal producers into the industry picture at this time would serve to sharpen industry slumps which have plagued this section of the American economy since the end of World. War II. The "open market exemption amendment" in effect eliminates the paper industry from coverage of the Public Contracts Act. The vast majority of all paper products, regardless of Government specifications, are either identical to or greatly similar to paper products available to the public on the open market. In effect, this amendment removes the paper industry from whatever limited beneficial protection it presently may enjoy under other statutes. It should be evident that this provision will cause substantial damage to conditions in the industry both as they apply to employers and employees alike. An inspection of the list of Government contractors will find that paper-industry concerns mentioned are, with few exceptions, paying wages in excess of whatever standards the Walsh-Healey Act would apply. These concerns have been able to bid competitively and successfully on the basis of technological developments and other management policies representing substantial capital outlays. Tearing down the barrier of the Walsh-Healey Act would only serve to introduce the fly-by-night operator into the paper industry whose activity would not only jeopardize the wages and working standards of paper workers but would seriously damage the competitive position of enterprises representing substantial segments of our economy. Passage of the Fulbright amendment would be penalizing efficient management. More than $140 million in Government contracts were let in the paper industry during 1951. Paper and paper products represent a major governmental expenditure. Considering all of these foregoing factors, which can be substantiated by even a limited study of paper-industry publications, the United Paperworkers of America, on behalf of its thousands of members and their families, sincerely urges that the Cominittee vote against consideration of Senator Fulbright's proposed amendments to S. 2594. Now, I would like to make one further statement on this. Our industry has been in the process of receiving a Walsh-Healey determination for some time. In the summer of 1951 the final hearings were heard and briefs submitted. It was based upon a tabulation, a statistical tabulation made by the BLS in May of 1950. At the time of the hearing, the figures were already outmoded. We are still awaiting a determination and have not received one at this time. I believe it would certainly be more fitting at this time, when our industry is undergoing a serious recession, for the Government, instead of considering legislation to weaken the Walsh-Healey Act, to do something to accelerate determinations, to eliminate whatever regional allowances are made in the present Walsh-Healey Act, rather than weakening it as this proposed amendment would do. Mr. EDELMAN. Could I take 30 seconds to make a statement for the record, please? Senator FULBRIGHT. Yes. Mr. EDELMAN. I am John W. Edelman, representing the CIO legislative committee. 96315-52-pt. 5—18 STATEMENT OF JOHN W. EDELMAN, REPRESENTING Mr. EDELMAN. In Mr. Carey's letter of 3 days ago to the committee, he mentioned a list of CIO unions affected by the WalshHealey Act, most of whom could not appear here today. We have been in touch with them by telephone. For various reasons they could not prepare testimony. All of these units, approximately 10, who could not appear here, if they had an opportunity to appear here, would have recited data similar to the paper and other such testimony as has been offered here showing that the Fulbright amendments would have a harmful effect on their particular industries. I thank you, Mr. Chairman. (The following letters were submitted for the record:) HOUSE OF REPRESENTATIVES, Hon. BURNET R. MAYBANK, United States Senate, Washington 25, D. C. DEAR SENATOR MAYBANK: Please permit me to express my strong opposition to the Fulbright amendments to the Defense Production Act, on which your committee is holding hearings Monday, May 19, and on which, I understand, you intend to vote immediately after Monday's hearings have been concluded. I speak as a Member of Congress from Massachusetts, whose industry and workers would be severely penalized by passage of the Fulbright amendments. I represent much of the same district as did Arthur Healey, coauthor of the Walsh-Healey Act, and the other author, of course, was a Senator from Massachusetts. But Massachusetts is far from unique in this matter. The Fulbright amendments would also penalize industry and workers in vast sections of the Nation. While ostensibly the Fulbright proposals are amendments to the Defense Production Act, actually they are amendments to the Walsh-Healey Act. In fact, if approved by Congress, they would emasculate a law that for 15 years has admirably performed the purposes for which it was enacted. It would be kinder and more direct to repeal the Walsh-Healey Act in its entirety because the enactment of the Fulbright proposals would leave it nothing but an empty shell and a mockery of Congress' original intention. The That intention was twofold: (1) to protect prevailing labor standards from being depressed by contractual Government expenditures; (2) to protect legitimate and fair-paying manufacturers and dealers in bidding on Government contracts. act was aimed at sweatshops, use of child and convict labor, and at unsafe and unsanitary working conditions. These objectives have been achieved, not only to the satisfaction of workers and employers, but of the public as a whole. I know of no serious controversy over the fairness of the Walsh-Healey Act in the long years of its operation. The first Fulbright amendment would require that prevailing minimum wage rates shall be determined for every single "city, town, village or other civii subdivision in which the materials (pursuant to Government contract) are to be produced." This means that Government contracts would flow to employers who maintain the cheapest labor standards, and therefore bring back the very condition the Walsh-Healey Act was designed to eliminate. It means the Government would merely be ratifying the lowest wage levels. Under the Walsh-Healey Act, as it has long been administered, factual determinations of prevailing wages are made by the Department of Labor after full hearings and minimums are set for Government contracts, on a Nation-wide basis, when appropriate. This Fulbright amendment would produce a vast variety of minimums that would tend to depress wages. It would permit a sharp-shooting employer not in position to establish local prevailing wages to shop around to find places where contracts could be performed with substandard labor. The amendment would penalize small business by discouraging small business pools from bidding on Government contracts, because each member of the pool |