In many industrial lines the hours of work per day have been reduced as a result of modifications of conditions and in obedience to what will appear to be natural laws. Each individual case has adjutsed itself in obedience to its environment and peculiarities. Take, for instance, railroad employees. Their hours vary with the class of work. The hours of a yard switching crew are twelve hours per day; the hours of the average freight crew are twelve to fifteen hours per day, while the hours of the passenger crew are about five hours per day. The freight-yard crew does more manual labor and less brain work; the freight-train crew does slightly more brain work and less manual labor, while the passenger crew does more brain work and less manual labor, and, notwithstanding the shorter hours of the men engaged in the latter work, they wear out faster than either the freight or yard crews. In rolling and steel mills for the engineers, firemen, and common laborers and such other employees whose employment requires very little brain or manual effort the day is twelve hours. The rollers, on the other hand, owing to the improved methods which have made the heating of metal practically continuous, work only from six to eight hours per day. In days gone by, when heating was intermittent, their day was almost twelve hours.

We venture to suggest, therefore, that an investigation will prove that conditions surrounding work and the character of effort required in each individual plant will more satisfactorily bring about an equitable and natural adjustment of the number of hours of work per day than can be accomplished by any legislation. Furthermore, if men were suffering in any particular plant on account of the excessive number of hours of labor in any particular class of work, they would naturally shun that plant and that character of work and secure employment in other directions.

Yours, truly,

THE STIRLING COMPANY,
EDW. R. STETTINIUS,
Vice-President and Treasurer.

(Thereupon, at 4 o'clock p. m., the committee adjourned until to-morrow, Tuesday, February 25, 1908, at 2 o'clock p. m.)

SUBCOMMITTEE ON LABOR, No. 1,
HOUSE OF REPRESENTATIVES,
Tuesday, February 25, 1908.

The committee met at 2 o'clock p. m., Hon. John J. Gardner (chairman) in the chair.

STATEMENT OF MR. JAMES H. MULL, SUPERINTENDENT OF THE WILLIAM CRAMP & SONS SHIP AND ENGINE BUILDING COMPANY, PHILADELPHIA, PA.

Mr. HAYDEN. Mr. Chairman, Mr. James Henry Mull, superintendent of the William Cramp & Sons Company, would like to address the committee in opposition to the bill, devoting especial attention to the relations between the company and its employees, workmen and mechanics, and the terms of their employment.

Mr. MULL. In the first place, I wish to speak particularly on the impracticability of doing Government work and merchant work in the same shipyard at the same time under a restriction or under a bill that restricts the working hour on Government work to eight hours. In the first place, we have a limited river front in our particular yard. Real estate there is very costly, and we can not go farther south, because if we go to the south we go into a rolling mill, and to the north we get into, the property of the Reading Railroad Company. I do not believe it would be possible to build a ship with labor working eight hours and labor working ten hours side by side. Furthermore, there would have to be a difference in the wages of workmen working

practically on the same work in the same yard, and I do not think it would be possible for us to employ labor that would work under those conditions. As our yard is somewhat different from all other shipyards in the United States, having been the pioneer shipyard, we have not got the labor-saving facilities, the overhead cranes, the inclosures, and many other devices that the more recent shipyards are now employing in the construction of Government ships, so it has been necessary for us to make our workmen, as is known to us, subcontractors. Those men work in the summer time and the season of the year where daylight will serve twelve to fourteen hours a day. Mr. DREW. You mean by that piecework?

Mr. MULL. No, I do not mean piecework; I mean practical subcontract work. The men are on our roll as employees, but when we take the contract for a ship, for instance, the plating of a ship will begin first; there will be two workmen, two mechanics, bid on the plating of that ship in its entirety. When the weather conditions serve we do not restrict them to any hours of labor so long as they conform to the rules of the yard. They are compelled, however, to come in at 7 o'clock, stop when the whistle blows at noon, resume work when the noon hour is over and continue at least until the whistle blows for quitting at night But they may work, however, as long as they please, that is, as long as daylight will serve, for in ship construction, it is quite impossible to work in the dark or by use of electric light. These men bid on this work and they make very big wages, and by doing that they increase our product, increase it very much, and we probably are employing as workmen in the subcontract lines, 65 per cent of the entire employees.

The CHAIRMAN. Let us get that clear, for it is an entirely new feature. You take a contract for the building of a Government ship. Mr. MULL. Yes, sir.

The CHAIRMAN. As an illustration, you subcontract the putting on of the plates?

Mr. MULL. We subcontract in the construction of the hull; the ship in its entirety, as far as the work of construction. We will say the first thing will be the laying of the keel, then the bending of the frames, the erecting of the frames, the building of the bulkheads, the longitudinal sections of the ship, the shell plate, the decks, placing the armor on, fitting the superstructure, the building of masts, and, in fact, all the parts of a ship that come under the hull construction end of it.

Mr. HAYDEN. Please tell us, Mr. Mull, how you let these subcon

tracts.

Mr. MULL. After the drawings have been approved by Washington and returned to us to work upon, we have a form; this form is posted in conspicuous places where the workmen may view it, calling their attention to the fact that we are about to give out the shell plating or the keel.

Mr. HAYDEN. Contract?

Mr. MULL. Contract.

Mr. PAYSON. For that one item?

Mr. MULL. For that one item, the entire specific item. We have been working this system, I might say, about ten years, now; these men come and get the drawing of this particular item; they look it over and they give us a bid.

Mr. HAYDEN: For a certain sum?

Mr. MULL. For a certain sum of money. After six or eight men, probably, have turned in their bids, we decide upon who is the most responsible bidder. We do not necessarily take the lowest men, because they may be bidding at random. The most responsible takes that job of work.

The CHAIRMAN. Is that bidding confined to the men in your yard, or is it general?

Mr. MULL. That is confined to our employees. If a man from another yard or anywhere else should choose to come in and bid upon that work, he is entitled to do it; any competent shipbuilder may do that, but he must first be an employee of the company, being employed with the understanding that he has that privilege of bidding on any of this work.

Mr. HAYDEN. Then you make a contract with him for that work? Mr. MULL. We make a contract with him for the work; yes.

The CHAIRMAN. Just wait; let us get the record right. You say he must be an employee of your company; you have just said he may be an employee of any other yard.

Mr. MULL. I mean to say he may enter our employ for the specific purpose of taking any contract.

Mr. DREW. That is the way he qualifies?

Mr. MULL. And for no other purpose whatever.

Mr. HAYDEN. Now, Mr. Mull, after letting the contract, describe in general what its terms are, the general terms of your subcontracts.

Mr. MULL. In the first place the average rate of wages for the ordinary mechanic in the ship construction will probably average from $2.25 to $3 a day. Probably a subcontractor may have a partner. We have started those men at 45 cents an hour, and all the men that he employs to work on that work he must submit to the company the rate of pay he is going to give them; or, in other words, we will not permit him to pay a mechanic less than the day's work rate.

Mr. HAYDEN. Öf your yard?

Mr. MULL. Of our yard, and he invariably raises those men 10 or 15 or even 25 per cent in excess of their day's work rate.

Mr. HAYDEN. He can pay them as much more than that rate as he pleases?

Mr. MULL. He can pay them as much more as he pleases. After an apprentice has served two or three years he becomes quite an efficient boy, and he is permitted to take that boy and pay that boy as high as $1 or $1.50 a day.

Mr. HAYDEN. That is, he can take on as his employees any other employees of your yard?

Mr. MULL. That is right. He carries on this work and after it is completed the amount left over from that which he bids to us he receives in full, in addition to his increased pay and the increased pay that he has offered the other workmen. That means just this, that subcontractor has done that work very much quicker, has given his personal attention, and, therefore, increased our output. That is about the only redress we have against the other yards that have all the modern appliances.

Mr. HAYDEN. Let me understand just how these contracts work. After having let the contracts to one of your employees, he is at liberty to employ any of your employees he chooses to do the work

for him?

Mr. MULL. That is correct, providing he pays at least the maximum rate that the man will receive working for us at the day rate.

Mr. HAYDEN. Correct. Who pays the men under him and who pays him?

Mr. MULL. We do.

Mr. HAYDEN. At your maximum rates, or at the rates fixed by him? Mr. MULL. At the rates fixed by him.

Mr. HAYDEN. If, on the completion of the work, there is a balance in his favor over and above what you paid him and his men, a balance of the amount named in the agreement, he is paid that sum and his profit.

Mr. MULL. He is paid that sum and his profit, divided between the subcontractor and his partner, and very often they give the men employed by them something extra; we do not concern ourselves in

that.

Mr. HAYDEN. How many men does your company employ?

Mr. MULL. At the present time, I think we have probably 4,000 men and boys, all the employees together, but now we are very dull, doing very little work.

Mr. HAYDEN. What is your normal nmber?

Mr. MULL. We run up to 7,500 or 8,000 when we are working comfortably full.

Mr. HAYDEN. What percentage of those men are subcontractors of the class you have described?

Mr. MULL. Fifty per cent.

Mr. HAYDEN. They contract on their own account?

Mr. MULL. Oh, yes.

Mr. HAYDEN. How do those subcontracts operate upon their earnings, because I can not call them wages?

Mr. MULL. I should say that it increases their income at least 50 per cent over and above what they would make if they were doing this work by day's work.

Mr. NICHOLLS. Suppose a contractor fails to earn sufficient on the contract to pay the wages of the men he is employing, what does the company do in that case?

Mr. MULL. It is very seldom the case, because we will never award a contract to a man unless we know he is competent to carry it through for the amount of money he has bid upon it. It does happen at times that he will fall below. In that case we then will endeavor to find out why he did it, for our judgment is at error as well as his if he has taken the job too low. Then we will create an extra to make

good the deficiency.

Mr. HAYDEN. That is, the company will carry the loss? Mr. MULL. The company will carry the loss; we have got to do that. Mr. HAYDEN. In other words, you finance your subcontractors? Mr. MULL. Oh, I will state further that every week, when the contractor draws wages for himself and men, we have a regular form. He puts the wages paid or to be paid on a sheet of paper. That serves as a voucher for his pay and for the men in his department. That goes through our subcontract department and notice taken of it and then signed and sent over to the office, and that serves as a voucher for drawing the money. We do not permit him to pay the men. Those men are paid by the envelope and receive the money the same way as men receive their day wage, because he might take the money if he is unscrupulous and get out of town, and we would

have to pay just the same. By doing that we get an absolute and accurate cost of every branch of work we give out.

Mr. HAYDEN. That is, you see to it that your men are all paid? Mr. MULL. Yes, sir.

Mr. NICHOLLS. It practically amounts to this, then, that they get a certain wage per day, and if the amount of the contract is greater than the total sum they get that as a premium, but they get wages whether their contract pays it or not?

Mr. MULL. Certainly they do. Those men will make, in nearly every instance, from 10 to 15 or 25 per cent. As this contract system goes through my office there, I have full knowledge of it, and I am prepared to state that the per cent of men falling below 10 per cent is very small.

Mr. HAYDEN. Now, Mr. Mull, will you please tell us how and why the company can afford to give out these subcontracts for work on which your own employees make so large profits; that is, what conditions peculiar to your yard justify that system?

Mr. MULL. Simply this: As I say, before the other yards started out we were practically the pioneers and did not have competition. After they started we had to resort to some means of making good, and this was the only means we had. It increases our product at least 50 per cent. When I say 50 per cent I am prepared to substantiate that.

Mr. HAYDEN. Can you give any illustrations of the effect of this system in the building of any particular vessel?

Mr. MULL. I will in the case of building identical ships. We constructed one at a loss of $25,000; the ship's value was about $350,000. The second we started on this subcontract system and we made $15,000 on the job.

Mr. HAYDEN. How about the time?

Mr. MULL. We were paid one month premium for early delivery on the latter. The same class of men worked on this as worked on the other, but they took it up on the subcontract principle; it makes the subcontractor personally responsible for what his wages are, what his income is. It does another thing; instead of having foremen placing the men, seeing that they are kept at work, the subcontractor does that part of it. The foreman becomes a dignified inspector, and we certainly are increasing our output. Another thing I might mention; when a subcontractor is making money we always make money on the ship.

The CHAIRMAN. Suppose you put 100 men, for an illustration, on a ship, no matter what size, and they work for you under your foreman and you lose money. The same 100 men on a like ship on the subcontract system builds her, and on the same bid you make money. There is a reason for that somewhere that has not been exactly brought out yet.

Mr. MULL. I think I will make that clear. When a subcontractor takes a job he takes it with a view that he is going to make some money upon it. He will select his men, and as a ship is composed of many compartments, rooms, etc., we will take, for instance, a Government ship. We have as many as 1,600 compartments upon it. A man lays out his work and allots it in such a fashion that he is keeping tab on his workmen. We could not have foremen enough to go through a ship and see that the men were doing their work; but