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STATEMENT OF ADMIRAL BOWLES, CHIEF CONSTRUCTOR OF THE NAVY.

DEPARTMENT OF THE NAVY,
BUREAU OF CONSTRUCTION AND REPAIR,
Washington, D. C., February 14,1903.

MY DEAR SENATOR: Complying with the request contained in yours of the 12th instant I have examined H. R. No. 3076, as reported in the Senate by Mr. McComas, with amendments, and known as the "eight-hour bill."

It does not appear from the printed reports of hearings in the Senate that any testimony has been taken on the part of the Government to indicate the effect of this bill upon the interests of the Government. I have therefore considered the bill with particular reference to the effect of its provisions upon the construction and repair of naval vessels, matters which are under my official charge, and also with regard to the effect upon the shipbuilding industry of the United States, with whose success the efficiency of the Navy is inseparably connected. The remarks which follow are confined to these considerations.

My objections to the bill are contained in the following points:

First. The exceptions to its operation, as contained in lines 18 to 23, are too vague. They will admit of a great variety of interpretations by executive officers of the Government, the manufacturers concerned, and the labor organizations. These will involve the Government in delay, expense, and form a standing invitation to strikes and labor troubles.

Second. So far as the Navy is concerned, there are certain articles, or objects, which are clearly within the operation of the law. For instance, the hulls of vessels, propelling machinery, boilers, pumps, blowers, and other special appurtenances of the machinery, windlasses, steering engines, boat cranes, ammunition hoists, ventilating blowers, dynamos, motors, means of communication, armor, guns, ammunition, all special structural material or materials for armament which can not usually be purchased in the open market and which will include structural steel, nickel steel, forgings for crank shafts, propeller shafts, rudders, turret mechanism, and a long list of other details of a similar character. The cost to the Government of all these articles will be largely increased, probably from 15 to 30 per cent of the present cost, and the time required for delivery in the same proportion.

Third. The competition for Government work by private parties will be largely diminished by the practical impossibility of simultaneous manufacture of Government and commercial work. This reduction of general competition would inevitably result in a great loss of efficiency in naval vessels, which is now promoted by commercial rivalry and the wide range of inventive talent now at its disposal.

Fourth. The inevitable tendency would be to force the Government to build its own ships, to manufacture its armor, guns, steel, forgings, dynamos, engines, and blowers in Government establishments.

Fifth. The number of inspectors and clerical employees of the Government would be necessarily increased in order to execute this act.

Sixth. The indirect additional expense ultimately caused to the Government by this act it is impossible to estimate.

Seventh. The private shipyards in the United States capable of building ocean vessels would be crippled if not destroyed by this act. These shipyards and their technical staffs have been actually built up and educated by the building of the new Navy in the last twenty years. Under the operation of this law they would be obliged either to adopt the eight-hour day, with the impracticable and drastic provisions of this act, or to give up naval work. Either of these alternatives means the practical destruction of their business under the present circumstances.

It would be easy to proceed and explain in detail under each one of these points the detailed considerations upon which these conclusions are based, and I will be prepared to do so if desired. These conclusions represent the opinions which I should have expressed in the interest of the Government if called upon to testify as to the merits of this bill, and you are at liberty to make any use of them which you may think proper. Very respectfully, yours,

F. T. BOWLES, Chief of Construction, U. S. Navy.

STATEMENT OF F. W. WOOD, PRESIDENT OF THE MARYLAND STEEL COMPANY.

Mr. WooD. Mr. Chairman and gentlemen of the committee, I come here to present very briefly certain objections to the adoption of this bill from our standpoint as shipbuilders. While we are engaged primarily in the manufacture of steel rails and billets, one of our most important departments is engaged in the building of ships for the Government and for general commercial purposes. The restrictions in

the matter of hours of labor would absolutely prohibit us from taking Government work, because we can not see our way to work men eight hours and ten hours side by side, and the commercial work will form the larger portion of our business in the future. Again, we do not see our way, and do not consider it practicable, to assume responsibility for the numerous subcontractors with whom we have to deal in obtaining various parts of a ship which we do not manufacture—the electrical apparatus, the special types of pumps, the distilling apparatus for fresh water, articles which we can not possibly manufacture ourselves and which we believe it is our opinion-we could not, without assuming undue risk, contract for elsewhere under the provisions of this bill. From the standpoint of the workman, and I wish to say that I have been very closely in touch with workmen engaged in various lines of iron and steel manufacture for the past twenty years, I can not believe that there is a universal demand for a restriction of the hours of labor. There certainly is a very large element which will not wish to have its profits restricted in any way; and by profits I mean the difference between earnings and expenses.

Again, in the execution of a contract, we are bound at one end by the contract in the matter of time. In the execution we have to deal with variables. Those variables are chances which we have to face in the manufacture of the various parts. For instance, attempts to make castings are frequently failures, and they have to be made sometimes two or three times, resulting in delay and making it impossible to construct the different parts of the ship on schedule. Our only way, so far as our present knowledge goes, to overcome these difficulties is to at times get our men to work overtime. It is done entirely with their consent, and they are paid at a higher rate of wages for it. This bill, as I understand it, would entirely prohibit anything of that kind.

In short, so many difficulties that seem to us to be insurmountable would result from the passage of the bill that I can only say now that it would prevent our bidding on Government work.

The CHAIRMAN. What rate of wages do you pay for overtime work?

Mr. Wood. Our rates are substantially the same as those paid up and down the Atlantic coast. Our men are largely men who work for a time in one yard and then go to another, and move about.

A MEMBER. He wants to know the extra

The CHAIRMAN. I ask the question in this light: It is evident from what the gentleman has said that these inevitable delays would result in an increase of cost to the original contractors.

Mr. WooD. Yes; certainly they do. We are obliged to take chances

The CHAIRMAN. What I mean is, assuming that the regular wages are 37 cents an hour, what rate do you pay for overtime?

Mr. Wood. For overtime, during week days, time and half time.

The CHAIRMAN. Time and half?

Mr. Wood. Yes, sir; and on Sundays, double time.

The CHAIRMAN. You build ships in your yard?

Mr. WOOD. Yes, sir.

The CHAIRMAN. As near as you could give the information readily, how many other contracts does the original contract for building a ship involve-that is, how many subcontracts? First, how many do you make, and then, so far as you know, how many do your subcontractors make?

Mr. WOOD. It would be impossible for me to trace beyond the contracts we make with subcontractors. I should assume--I should say that in the case of the Government vessels at least thirty subcontracts were made in which the articles contracted for that is, subcontracted for-are specified in the original contract.

The CHAIRMAN. You, in the first instance, make probably thirty?

Mr. Wood. I think so; probably more; at least thirty.

The CHAIRMAN. And your subcontractors make some?

Mr. WOOD. Doubtless they do.

The CHAIRMAN. You do not know how many, but have you any idea about it? Mr. WOOD. Well, shipbuilding embraces about 37 different trades, and taking the products of 37 different trades it is very difficult to trace the ramifications. I wish to stop with the subcontractors. I.do not wish to carry the argument to the point where it can be construed as ad absurdum.

The CHAIRMAN. I do not want to be inquisitive, but if there is no objection to stating it, about what proportion of the cost of building these ships is that which is expended in your yard; or, to state it differently, assuming the cost of the ship to be $1,000,000, what proportion of that million do you pay away to subcontractors?

Mr. WOOD. Dependent on the type of the ship, which determines the relative proportion of labor and material, I should say 30 per cent is expended- from 30 to 40 per cent-on account of the subcontracts.

The CHAIRMAN. And that reaches at least thirty different trades?
Mr. WOOD. Yes, sir.

The CHAIRMAN. Located in different parts of the country?
Mr. WOOD. Yes, sir.

Mr. FURUSETH. You are building ships?

Mr. Wood. Yes, sir.

Mr. FURUSETH. How many hours do you work in your yard?
Mr. WOOD. Ten hours.

Mr. FURUSETH. On the outside or on the inside, or both?

Mr. WOOD. Both.

Mr. FURUSETH. Both?

Mr. WOOD. Yes, sir.

Mr. FURUSETH. Do you know of any other shipbuilders, or do you know of any shipbuilders who work less than that?

Mr. Wood. Not any who are engaged in a similar class of work, competing for the same class of work. I wish to say that our yard is engaged largely in the construction of cargo ships, the type of ship which corresponds to the English tramp, and the ship which we have got to depend on for the revival of our merchant trade, and in order to build which we have got to work in competition with the yards of England and Germany, and work and cut the corners as close as possible in every respect. We have at this time, I wish to say also, nearly completed the first two experimental cargo ships of large capacity, intended for general trade the world over, just as the English tramp is intended. These two ships are now under construction.

Mr. FURUSETH. You say you build tramps?

Mr. WOOD. Yes, sir.

Mr. FURUSETH. And you have to compete with England?

Mr. WOOD. And Germany.

Mr. FURUSETH. And Germany?

Mr. Wood. Yes, sir—that is, in order to induce our people to invest in ships of that kind, we have got to make the cost of our ships near the cost of foreign-built vessels to justify their investment.

Mr. FURUSETH. Your plant is a very modern plant, isn't it?

Mr. Wood. It has been built about-the shipbuilding department has been built about eight years, or nine years, I think.

Mr. FURUSETH. Got all modern appliances?

Mr. WOOD. Probably not all; a fair proportion of them.

Mr. FURUSETH. Do you compare favorably as to modern appliances with the shipbuilding yards on the Tyne, say, or at Glasgow?

Mr. Wood. I should consider so, from the last and best information I have.

Mr. FURUSETH. Do you think you employ more men in the building of one vessel than would be employed on the Tyne?

Mr. WOOD. I think so.

Mr. FURUSETH. More men?

Mr. Wood. Yes, sir; I think so.

Mr. FURUSETH. In the building of one vessel?

Mr. WOOD. I think so.

Mr. FURUSETH. In other words, the men you employ can not do as much work, then, as the English workmen?

Mr. WOOD. I think not.

Mr. FURUSETH. That would be the reason, then, that you necessarily would have to have longer hours of labor than the English shipbuilder?

Mr. WOOD. That is one reason.

Mr. FURUSETH. Do you know how many shipbuilding plants there are in this country that work eight hours on the outside?

Mr. WOOD. Not on this class of work. I do not know of any that work eight hours at all. Some work nine hours, I believe, but not on this class of work.

Mr. FURUSETH. You do repair work, don't you?

Mr. WOOD. Very little.

Mr. FURUSETH. Very little up to the present?

Mr. Wood. Yes, sir; very little. It is almost entirely new construction which we are competing for in that class of work.

In reply to your question regarding the efficiency of the men: The difference comes chiefly from the fact that on the other side the work is largely classified, and the piecework system is universal. Certain men work on certain types of work almost constantly. The great volume of the shipbuilding there is the primary reason for this increased efficiency. In the yards in this country up to this time it has been necessary to move our men about, working one day on a passenger ship, shortly afterwards on

a freight carrier constructed entirely of iron, and next on a torpedo boat, and they do not acquire the same proficiency in the handling of the different parts, and can not turn out the same amount of work for the same cost as they do on the other side.

Mr. MCCLEARY. That is largely due to the fact that we do not build as many ships? Mr. WOOD. That is the prime reason, and when we have a great volume of work for our shipyards that difference will gradually melt away.

Mr. MCCLEARY. In fact, if you were to express an opinion, you think the American mechanic will be able to do more work rather than less when he has the same opportunity?

Mr. WOOD. I think so, but he can not when he is changing about from one type of work to another three or four times a year.

Mr. MCCLEARY. He can not become an expert in any one?

Mr. WOOD. No, sir.

The CHAIRMAN. And that is a condition that does not seem to relate personally to the people on the two sides of the water?

Mr. Woop. The same would be true of two American shipyards doing the same class of work that is, the same difference would exist between the men of the two yards; that is, the difference is between the two sides of the water rather than

The CHAIRMAN. It is a matter of classification of the work?

Mr. Wood. Yes, sir.

The CHAIRMAN. And the same differences would exist here?

Mr. WOOD. Yes, sir.

The CHAIRMAN. It is a difference of volume?

Mr. Wood. Yes, sir.

Mr. FURUSETH. Do you know the Brooklyn Dry Dock Company?

Mr. WOOD. The people who control the Erie Company?

Mr. FURUSETH. Do you know what hours they work?

Mr. WOOD. I do not. I think nine hours, however. I am not sure, but I think so. The matter of ship repairs, however, is entirely different from constructing of new work in competition with other concerns on this side and on the other side of the water. For repair work, unusual, extraordinary prices are charged, and there is not the competition, because a ship coming into port and requiring repairs must have those repairs made then and there, no matter what the cost is.

Mr. FURUSETH. The hours of labor in some of the shipyards on the eastern coastthat is, in the New York district-have been reduced in the last year, have they not? Mr. Wood. I do not know whether any change has been made or not. I think some of them are working nine hours, but whether that is a recent change I do not know. Mr. FURUSETH. Have you had any call made upon you or any request from your workmen at all to reduce hours of labor?

Mr. WOOD. Certain elements in our yards did; yes. We explained the situation to them, showed them the competition that we were engaged in, and the result was that practically all the men returned to their work.

Mr. RIORDAN. If the hours of labor were reduced, then their salary per day would be reduced at the same time, would it not?

Mr. WOOD. That is right.

Mr. RIORDAN. Did they come to you and ask for a reduction of the hours of labor under this consideration, that there would be a proportionate reduction of wages? Mr. Wood. No; they would expect the wages to remain the same. It is equivalent to asking for an advance.

Mr. RIORDAN. An advance of wages?

Mr. Wood. An advance of wages and also reducing the output of the yard.

STATEMENT OF MR. W. B. COWLES, OF CLEVELAND, OHIO.

Mr. CowLES. I am vice-president of the Long Arm System Company, of Cleveland, Ohio.

Mr. NORRIS. If you gentlemen will permit an interruption

The CHAIRMAN. Mr. Norris.

Mr. NORRIS. I spoke to the chairman and said that I would have to leave a little before 12 o'clock, as I have to be in the Supreme Court of the United States, and it will be necessary for me to go. I think, now, as it is nearly 12 o'clock.

(Mr. Norris here left the room.)

Mr. COWLES. I also represent the National Association of Manufacturers and the National Metal Trades Association. I have only a few words to say, and not in any

analytical discussion of this bill.

Mr. GOEBEL. What is the Long Arm Company?

Mr. COWLES. The original cause and reason for the existence of the Long Arm System Company was to manufacture electric power doors and hatches for the preservation of ships. It now has a lot of other business besides, and it is a contractor with the Government and a subcontractor for Government work on battle ships and cruisers and for ship fittings, as well as the power doors.

I can speak for my associates, the two national associations mentioned, and say without any hesitation that those of them who are Government contractors and subcontractors will not attempt, any further than they have done already, to analyze or discuss or protest against this bill. They have protested against it strongly already. They simply will not-those of them who can possibly get out of it-continue doing Government work under any such impossible proposition. Any man who is a business man of affairs and who knows the manufacturing business would not attempt to run his work under any such impossible conditions.

He would simply cut it out and say, "Life is too short." You heard, I think you must have heard, all of you, the reasons from the manufacturers why. You have heard a lot of reasons on the other side from gentlemen who know one side of it and who undoubtedly are honest in their own opinion. But they can not see both sides of it. Now, you are doing something by this bill that will immensely increase the cost of Government work, and the people have got to pay for it. But that is only one part of it. Maybe the people will pay for it without a kick; but the manufacturer is going to withdraw largely. The result will be unquestionably that Government work by contract will be done by a very much less number of people.

The Government will not get the competition that it gets now, and the natural result will be that in every line you will have fewer manufacturers, less competition, and finally no competition, and the Government will be in the hands of a few who can charge it what they please, instead of having wide-open competition, as there is now. Government work-and I say it as a Government contractor-is not so attractive now, even, as to lead one to take on more burdens in connection with Government work. One more straw on the back of the Government contractor, and I speak feelingly, will make him cut it out.

Mr. RAINEY. Is it not true in your business, the manufacture of electrical supplies

Mr. CowLES. Electric-power doors especially, but ship fittings also.

Mr. RAINEY. Yes. Is it not true that in that business the great factories in Germany have in the last few months adopted an eight-hour day?

Mr. COWLES. I am not sure about that, but it has not come to my mind to any large extent; very small, I think.

Mr. RAINEY. Are they not working their men on shifts eight hours?

Mr. CowLES. Let me answer right there. I think-pardon me. You go ahead and finish, and then I will answer.

Mr. RAINEY. Do you know whether the Westinghouse Company manufacture în England now?

Mr. COWLES. In a general way I do; at Trafford Park, I suppose you mean.

Mr. RAINEY. I want to ask for my own information.

Mr. COWLES. They manufacture machinery and largely trolley work and electrical work and power plants.

Mr. RAINEY. Is not it the same stuff that you manufacture?

Mr. COWLES. No, sir; it is largely different.

Mr. RAINEY. Is it not true that in the last few weeks the English branch of the Westinghouse Company has lost a contract of a million dollars in the attempt to compete with a German company manufacturing the same supplies and working on an eighthour day?

Mr. CowLES. I do not think it has anything to do with an eight-hour day. The Germans do not win by an eight-hour day. They win by cutting the prices of the material and the labor. The material is away down, and labor is away down. It is not on account of the eight-hour day at all. They are beating the earth, but it is by cutting the prices of material and of labor.

Mr. RAINEY. I have a statement of the manager who went over to reorganize the Westinghouse Company a week ago to that effect.

Mr. COWLES. On that point, in comparing the eight-hour product in a manufactory where they build thousands of things of the same kind, and applying it to Government work and Government contracting, there is a big difference, and it does not apply at all.

This reduction of costs in manufacturing applies in fields such as trolley work, or such as railway motor cars, where there are thousands, yes, millions, of them to be made, and where they can apply such machinery. But in Government contracting work you can

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