not do anything of that kind, because the field is not big enough. It is comparatively small; it is always small when it comes to the machine work, and usually special. Mr. BARTHOLDT. Do your men work by the day, or do they do piecework? Mr. CowLES. They work by the hour. Mr. BARTHOLDT. By the hour? Mr. CowLES. By the hour. Mr. BARTHOLDT. And you say that the cost to the Government would be increased? Mr. CowLES. Undoubtedly. Mr. BARTHOLDT. By this bill? Mr. COWLES. Yes, sir. Mr. BARTHOLDT. Would you not, for instance, reduce wages in proportion to the time they worked? Mr. COWLES. I would pay by the hour. If they worked eight hours a day they would get eight hours' pay, and if they worked ten hours a day they would get ten hours' pay. You can not get something for nothing. Mr. BARTHOLDT. How would the cost be increased to the Government under this bill? Mr. COWLES. The cost of the labor would be increased by the reduction of the hours to a large extent on everything that was a fixed charge. Mr. BARTHOLDT. If you pay only for eight hours, you only charge for eight hours. Mr. CowLES. But that is only a very small part of the increased cost of that establishment of mine, even if I pay the eight-hour day and not the ten-hour day for the eight hours on Government work. See the position that it puts me in. Say that I have $100,000 of Government contracts and $100,000 worth of private contracts. I am forced to choose-because, as I have said to some people, I will not consider this impossible proposition of trying to do eight hours' and ten hours' work in the same place I will have to choose between the eight-hour and ten-hour work. Mr. HUNT. Are you working ten hours now? Mr. CowLES. Ten hours for five days in the week the year around, and a Saturday half-holiday for the people, winter and summer. Mr. HUNT. Working the ten hours does not involve any additional expense, does it? Mr. CowLES. If you are a manufacturer, you know that it does involve an enormous expense, even if you do not pay for but eight hours a day for eight hours' work. Of course in every manufacturing establishment there are many men by the year, and all your fixed charges, all your overhead charges, go on, and your earning capacity is cut down by 20 per cent, and if you are a Government contractor you have got to cut out Government work, or if you are doing private work you have got to cut out the private work and do Government work purely. I do not care to discuss it. It is not a thing that is reasonable to discuss from a business man's standpoint, this question of whether or not you can do eight and ten hours' work in the same establishment, which any man must know, as a buisness man and a practical man, that you can not do. Mr. HUNT. Have you not admitted that there are some men paid by the day and some paid by the hour? 1 Mr. CowLES. There are in every establishment. Mr. HUNT. You are able to do that, are you not? Mr. COWLES. Certainly. You pay a lot of them, engineers and the helping force, by the day or by the month. Mr. HUNT. Pardon me, but my reason for saying it is that there was a time when I had men working for me, and some of them through lack of an organization did not work eight hours, and some more of them did. It was found to be practicable to get the additional hour or two from those men who were not in a position to exact the shorter hours. Mr. COWLES. Do I understand you to say that if this bill passed, and I had the work in my own place, that I could work some of the men eight hours on this bill and then switch them for the balance of the time onto other work? Mr. HUNT. It is not within my power or within the province of my thought to know what you are capable of doing. I simply tell you something that has been done. Men have worked ten hours in shops where a major part of them worked only eight hours for a time. Mr. COWLES. I say that it is not a systematical thing to do, and we must run our business on systematic lines or fail. Mr. HUNT. That, of course, is according to our own notions of what is systematic. Mr. CowLES. There is only one notion about systematic procedure. Mr. HUNT. You are a practical manufacturer? Mr. COWLES. I am. Mr. RAINEY. And understand about machinery? Mr. CowLES. Yes. Mr. RAINEY. Is it not true that machinery deteriorates more rapidly when it is not being run than when it is being run? Mr. COWLES. Yes. Mr. RAINEY. Does it not rust out more rapidly when it is standing idle? Mr. COWLES. Yes. Mr. RAINEY. Yes. Now, in view of the immense amount of money invested in our American plants, how does it happen that you gentlemen who are manufacturers, and who are so industriously opposing this eight-hour proposition, do not take into consideration the advisability of running your plants the whole twenty-four hours, in three shifts, as the Germans are now doing? Mr. CowLES. My dear sir, that has been carefully considered by myself and by men who are very much more able than myself, and they have turned down the proposition because almost always the work on a machine involves and necessitates the continuous mind on the individual machine. You can not break off at 8 o'clock or at noon with Tom Jones and put Dick Robinson onto that same thing and make your plant run properly on most kinds of machinery. If you are manufacturing cement you could do it, or if you are making bricks you can do it, but not with machines. Mr. HUNT. If Tom went on strike you would soon get Dick to take his place? Mr. CowLES. I would do everything in my power to get the other man to take his place. Mr. GOMPERS. You would probably have a union 'shop? Mr. CowLES. No, sir. Mr. GOMPERS. You would have a union shop instead of an open shop? Mr. CowLES. Never, as long as you live and I am an American citizen. Mr. RAINEY. Is it not true that the German factories within the last six months, conducting their business on the eight-hour basis, are now capturing the English markets as against our own American companies? Mr. CowLES. My dear sir, there is no more comparison between Germany and America on the hour basis Mr. RAINEY. Well. Mr. CowLES (continuing). Because you have materials, and you have the price of labor, and you have got the tariff, and how can you compare on the hour basis? Also you have got living expenses different. The two things are almost as different as night and day, and they are very different between Germany and England, and any man who tried to make these comparisons on one basis alone is going to lead himself astray, it does not make any difference how smart and how honest he is. If he will not look at all of it, but only at one thing, he is going to come to a wrong conclusion. Mr. BARTHOLDT. What are your men making? Mr. CowLES. From 24 to 30 cents an hour. Mr. BARTHOLDT. From 24 to 30 cents an hour? Mr. CowLES. Yes, sir. Some of them make above that. The average run in there. Mr. BARTHOLDT. Do you know what the wage in Germany is in the same line? Mr. CowLES. I did know, and I have got the comparative tables, but I can not recall now. I would not venture to guess from memory. Mr. BARTHOLDT. Is it as high as ours? Mr. COWLES. Nowhere near as high for the same mechanics. The wages are less than half. Mr. BARTHOLDT. Less than half? Mr. CowLES. Yes, sir. I know that from my own connections in business over there. Mr. RAINEY. Do you know what the living expenses over there are as compared with those here? Mr. CowLES. They run very much in accordance with the difference in wages. The living expenses are very low there as compared to our living expenses. Mr. RAINEY. Then merely the wages, taking that into consideration, are about as high? Mr. COWLES. The amount of product or output which you can buy in Germany for a mark is not very far different from what you can buy here for 50 or 60 cents, a mark being 24 cents. No; a mark is 25 cents. Mr. BARTHOLDT. You were right in the first place; it is 231 cents. Mr. CowLES. Yes, that is right; it is 24 cents. It is the 96-cent dollar, the 4 marks. Those comparisons have always been, to my observation, misleading, usually because they are made to bring out a certain result. The CHAIRMAN. What do you mean by the different grade of living? Do you mean that you can buy as much of the same thing that a man can live as well? Mr. CowLES. No, sir; I mean that they live according to their traditions and the surrounding conditions that they have always been used to. I do not think that the German machinist, for instance, lives as well and has as many luxuries as the machinist in America has. That is a part of the gain. He gets more for his living. Mr. RAINEY. You do not mean to say that the Germans for the last several hundred years have not developed the best type of citizens, do you; the best type of men? Mr. COWLES. That is going a good deal into statecraft, which I would not attempt to answer. I do not think that Germany has remained steadfast and backward by any means. I think that she is one of the best and most progressive countries on the earth to-day. But she does not do it by running eight-hour shifts. Mr. RAINEY. She has just commenced that in the last six months. Mr. COWLES. Then it is too early to draw any conclusions. You can not judge of it in six months. Mr. RAINEY. She has captured the English contracts now. Mr. CowLES. But she did not do it in that way. Five years ago a certain German gentleman in Hamburg was selling forgings and making money. To-day he is selling those same forgings and making them in Germany, in Glasgow. Up to five years ago they were manufactured in England and sold in Germany, and now they are manufactured in Germany and sold to England. But that is not because of the hours of work per day. There are reasons far more important than the hours of work per day which hold good and made that change. Gentlemen, I only want to say that the manufacturer's end of this thing, his view of it, is that this eight-hour bill is absolutely rotten, and will not work. Mr. GOEBEL. To what extent are you a Government contractor-just in round figures? Mr. CowLES. In 1904 I did, for instance, over $600,000 worth of work for the Government. That is a small subcontracting proposition, both direct and indirect, through the shipbuilders, and Mr. HUNT. What was that amount? Mr. CowLES. No, sir; that was in 1904. Not nearly so much in the last year. Shipbuilding has not been so much in 1905. I have switched off onto other work, and am preparing to switch off more, so that if this bill should pass I can give up Government work entirely. Mr. HUNT. If the question is not impertinent, what proportion of your total output in that year would this $600,000 form? Mr. CowLES. That year it was most of the total. But before that and since that the Government work has been the minority of the total, and I hope that it will become more and more in the minority. Mr. HUNT. Is it the severity, or the Mr. COWLES. It is not the severity. My training is such that I admire the martinet; but I want him to be fair. Mr. HUNT. Which is pretty hard to find in the average inspector. Mr. CowLES. I have known some of the inspectors who were just as fine men as ever came down the pike, and I have known others who were honest but did not know their business. Mr. HUNT. That is true, too. Mr. CowLES. Now, the man who does not know his business is a pestilence everywhere. Mr. HUNT. That is true, whether he is taking Government contracts or private contracts. Mr. CowLES. Yes. Mr. Chairman and gentlemen, I am very much obliged to you, and if you have no further questions, I have finished. Mr. CONNER. I desire to offer a communication which I have here from Mr. O. M. Brockett, of Des Moines, Iowa, who represents the State Manufacturers' Association of the State of Iowa and the Business Men's Association of the city of Des Moines, who says that he wants to be heard. He does not say whether he is interested in Government contracts or not. Mr. GOEBEL. I think you also got one of those communications, Mr. Chairman. The CHAIRMAN. We have a load of applications here. I have not laid them before the committee. They ask for hearings. They do not state the nature of their interests. STATEMENT OF MR. JOHN S. HYDE, REPRESENTING THE BATH IRON WORKS AND THE HYDE WINDLASS COMPANY, OF BATH, ME. Mr. HYDE. Mr. Chairman and gentlemen, I represent the Bath Iron Works and the Hyde Windlass Company, of Bath, Me., and I am an officer of both companies. The Bath Iron Works are shipbuilders, and are therefore Government contractors. The Hyde Windlass Company makes auxiliary machinery for war ships, and a large part of their output is indirectly for the Government, and therefore they are subcontractors under this bill. I wished to explain my reason for representing both of them. We think that this bill will be a grave injury to both companies; that it will increase the cost of the product, and it will make the product cost the Government a great deal more. I agree with Mr. Davenport's testimony on that question. In shipbuilding of course we use a very much greater diversity of material than the gentlemen who have preceded me. A ship is said to represent, when finished, about 95 per cent labor, in some form or other. There is one point I have not heard brought out. It seems to me that this bill as it reads forces any contractor or subcontractor for Government work to adopt the eight-hour basis or give up Government work. As I read the bill, it seems to say that all the employees of that contractor or subcontractor, whether engaged on Government work or otherwise, provided any part of his output is for the Government, must go on the eight-hour basis. That brings the subcontractor for the shipbuilder to the point where you tell him he must either do Government work or go out of it altogether. As everyone knows, the shipbuilder of this country does a great deal of Govenrment work. It is a large part of their output, and by reason of doing this Government work they have been able to build up their plants, and are hoping in a reasonable time to be at the point where they are able to compete in foreign markets. They have not arrived at that point yet, and they feel that this legislation at this time will set them back a great many years in arriving at that point. In doing Government work the contract calls for penalties for not completing the contract at a given time. It calls for penalties if the speed is not reached, and the intention of this bill is to add another penalty in case this bill is violated, with no corresponding advantage to the United States Government in any way. But, on the other hand, it can not help but add to the cost of the product. It seems to me that the Government might just as well put a bill through Congress that the Government shall pay 20 per cent more for all it purchases than the market rate for that particular product. There is another point in connection with it, and that is this: That the time taken in doing the Government work, in shipbuilding more especially, will have to be very considerably increased-20 per cent at least, perhaps more for this reason: In the progress of the building of the ship there is a delay, perhaps, in the receiving of a certain piece, a sternpost, for instance, which is a steel casting. Perhaps that is being machined in the machine shop before it goes out in the yard. The nonreceipt of that sternpost delays the work very much, and when it comes the men are therefore worked extra time to forward the progress of that work. We have found always that the men are very anxious to get that extra work. It increases their weekly wages. We have been accustomed to work fourteen hours on that sort of work and pay for fifteen hours, and the men have been very anxious to get it. I do not mean that is continuous; I mean that is so in an isolated instance, where it is necessary to force forward one particular part of the work in order to forward the completion of the whole thing. So I think the time of completion would be delayed at least 20 per cent on all contracts. If the shipbuilders were brought to the point where they had to choose between doing Government work entirely or doing no Government work, the Government perhaps would be put to the point where they would be obliged to build the vessels themselves. It has been repeatedly proved that that not only costs the Government from 50 to 75 per cent more money than doing it by contract, but also that it takes from 50 to 100 per cent longer time to get the work out than when they do it by contract. I do not presume to speak for our employees. I have talked with a few of the leading men. We have no labor organizations with us whatever. Our relations with our men have always been most pleasant in every way. Mr. RIORDAN. May I ask a question right there? Mr. HYDE. Certainly. Mr. RIORDAN. There was a delegation of the employees of the Brooklyn NavyYard waited on the New York delegation not long ago, and they claim they can show by the facts, from some ships built in the Brooklyn Navy-Yard, that the price was con siderably less and the speed with which they could build them was considerably greater. Was their statement true or untrue? Mr. HYDE. It was untrue; I have no hesitation in saying so. Mr. RIORDAN. And they were working absolutely on the eight-hour basis; they were employees of the Government? Mr. HYDE. Yes. The only ships built at the Brooklyn Navy-Yard within recent years and under present conditions have been the Cincinnati and the Maine. Mr. RIORDAN. How long ago were they built? Mr. HYDE. The Cincinnati was built-it went into commission about three years ago, if I remember right. The time taken to build her was very much in excess of the time set at the time bids were called for. Mr. RIORDAN. The men in the Brooklyn yard called my attention to that. Did they have all the conveniences that other places did? Mr. HYDE. I don't know, but I know they have them now. Mr. RIORDAN. They claimed they did not, and with the improved and modern machinery that they can turn out the ships just as rapidly as in any other shipbuilding concern in the United States. Now, is their statement true or not? Mr. HYDE. I should say not. We would ask nothing better than to compete with the navy-yards in building ships. Mr. RIORDAN. I ask, then, that the employees of the Brooklyn Navy-Yard be notified to attend here with their facts on this particular point for the consideration of the committee. Mr. BARTHOLDT (in the chair). All right, sir. Mr. HYDE. I would say to the committee that I suppose the time taken for building ships in the Brooklyn Navy-Yard or any other navy-yard is a matter of record. Mr. RIORDAN. Yes; but they have not the modern machinery Mr. HYDE. On the other hand, there are no salaries, no interest on the plant, nothing of that kind that enters into the cost of a ship for the Government; but the contractor has to meet those expenses. Mr. RIORDAN. The shipbuilding industries pay quite large salaries to their managers and superintendents, larger in proportion than the Government pays? Mr. HYDE. Yes; but those salaries are charged to the administrative part of the plant and to these contracts, but that does not obtain in the navy-yard. Mr. RIORDAN. Those salaries in the navy-yard will go on anyhow, whether they are building the ships or not. Mr. HYDE. Exactly; so they will in the shipyards. Mr. RIORDAN. And the navy-yard has not built any ships except two. Still, those salaries have been going on; while the shipbuilding establishments have built many ships. Mr. HYDE. During the last eight years our company has built or contracted to build 20 vessels, of which 8 were for the Government. Neither the Government work nor the merchandise work alone is enough to fill the plant to its capacity. Now, it doesn't seem to me possible to divide it and work the men on merchant work ten hours a day and on the Government work eight hours per day. The men who work eight hours a day it does not seem to me would be satisfied with a less wage per day than they are getting now. Let us say that they are getting 25 cents an hour or $2.50 a day now for ten hours' work. It does not seem to me that such a man will be content with $2 a day under eight hours. The tendency of the bill, it seems to me, will be that the men will get the same amount of wages per day. That is what it will lead to. That means that the men engaged on merchant work who have to work ten hours, we will say, will not be content to work ten hours for the same wage per day that their shipmates working on Government work get for only eight hours' work. So it seems to me that the tendency of the bill would be to raise the whole scale of wages by just that amount-25 per cent. I think I have covered what little I have to say. Mr. HERBERT. Mr. Hyde, you said that in your judgment this bill would raise the cost of labor, and consequently the price of the finished article you turned out, about 25 per cent. I want to ask you if in that estimate you have considered anything more than simply the cost of labor you put on the material at your works? Mr. HYDE. That is all, sir. Of course I have not considered the interest on the plant, the reduced output. Mr. HERBERT. Have you considered this material which you get, say, from the Midvale works, would have 25 per cent added to that? That would be 25 per cent on the material before it could be used. Mr. HYDE. Yes, sir. Mr. HERBERT. Then if the subcontractors of the Midvale Steel Company also added 25 per cent on the material they furnished, there would be another 25 per cent? Mr. HYDE. Yes, sir. 32796-088 |