Mr. EMERY. If it applies to a launch, does it not apply to a battle ship?

The CHAIRMAN. The word "article" is not mine, and I have never investigated it. I do not know whether it appears in the law dictionaries or not; I suspect it does not.

(Thereupon, at 12.35 o'clock p. m., the committee took a recess until 2 o'clock p. m.)

SUBCOMMITTEE ON LABOR, No. 1,
HOUSE OF REPRESENTATIVES,
Friday, March 6, 1908.

The committee reassembled, pursuant to recess, at 2 o'clock p. m., Hon. John J. Gardner in the chair.

STATEMENT OF MR. DANIEL DAVENPORT, COUNSEL FOR THE AMERICAN ANTIBOYCOTT ASSOCIATION Concluded.

Mr. DAVENPORT. Mr. Chairman, while the committee is assembling I want to fulfill my undertaking and get this into the record that we were talking about this morning. We were talking about the ability of the subcontractor by some sort of stipulation to exclude himself from the right to fight this thing out in a State court in his controversy with the contractor in the event of any dispute between them as to the facts.

Of course it must have occurred to anyone that perhaps he would stipulate to abide by the finding of the inspector, and so settle the matter for the protection of the contractor, and he might stipulate that he would leave the matter to the adjudication of the Court of Claims, or in some such way as that.

Now, there are some things that a man can not stipulate not to do if any court before which the stipulation comes pays any attention to it, and the matter is well summed up by Chief Justice Shaw in the case of Nute v. The Hamilton Mutual Insurance Company (6) Gray, Mass., 181), where an insurance policy contained a stipulation that the matter should be adjudicated in a particular court of the State of Massachusetts, and where the court did not take that view of the stipulation, that he agreed that it should not be submitted to any other court. But the supreme court of Massachusetts, speaking by Chief Justice Shaw, said that if there was any such agreement as that it was void, and in his opinion Chief Justice Shaw supposes a number of instances. He says [reads]:

Suppose it were stipulated in an ordinary contract that in case of breach no action shall be brought, or that the party in default shall be liable in equity only and not at law, or the reverse; that in any suit commenced no property shall be attached on mesne process or seized on execution for the satisfaction of a judgment, or that the party shall never be liable to arrest; that, in any suit to be brought on such contract, the party sued will confess judgment, or will waive a trial by a jury, or consent that the report of an auditor appointed under the statute shall be final, and judgment be rendered upon it, or that the parties may be witnesses, or, as the law now stands, that the plaintiff will not offer himself as a witness; that, when sued on the contract, the defendant will not plead the statute of limitations, or a discharge in insolvency; and many others might be enumerated; is it not obvious, that, although in a certain sense these are rights or privileges which the party. in the proper time and place, may give or waive, yet a compliance with them can not be annexed to the contract, can not be taken notice of and enforced by the court or tribunal before which the remedy is sought, and can not therefore be relied on by way of defense to the suit brought on the breach of such contract?

That is a quotation from Chief Justice Shaw's opinion in Nute v. The Hamilton Insurance Company (6 Gray, 181).

Then, on the general proposition:

An agreement in articles of copartnership and in contracts for work, etc., to refer all matters in dispute to arbitrators can not oust the courts of their jurisdiction:

That is in the case of Pearl v. Harris (121 Massachusetts, 390); Wood . Humphrey (124 Massachusetts, 185); Gray v. Culom (4 Watts (Pa.), 39); Tobey v. County of Bristol (3 Story, 800); Hobbs v. Manhattan Insurance Company (56 Maine, 419); Nute v. Hamilton Insurance Company (6 Gray, 174-179); and Reichard v. Manhattan Insurance Company, (31 Missouri, 518). But in investigating the matter I ran across decisions by the Supreme Court which have a broader application to this very case, which I thought I would bring to the attention of the committee. That is in the twentieth Wallace upon a question of whether this was a contract, to do by contract, to accomplish the ends which could not be accomplished by direct means; and upon the question of the power of a party to oust a court of jurisdiction by agreement I find this case

The CHAIRMAN. Judge, pardon me. Could you put those in just as well without quoting them, the stenographer leaving a place for them later? This was the time appointed to hear the representatives of the New York Ship Building Companies, and they probably want to go home to-night.

Mr. DAVENPORT. I will only take five minutes.

The CHAIRMAN. Very well.

Mr. DAVENPORT. In the case of the Insurance Company v. Morse, the statute of Wisconsin, passed in 1870, enacted that

It shall not be lawful for any fire insurance company, association, or partnership, incorporated by or organized under the laws of any other State of the United States, or any foreign government, for any of the purposes specified in this act, directly or indirectly, to take risks or transact any business of insurance in this State unless possessed of the amount of actual capital required of similar companies formed under the provisions of this act; and any such companies desiring to transact any such business as aforesaid by any agent or agents, in this State, shall first appoint an attorney in this State on whom process of law can be served, containing an agreement that such company will not remove the suit for trial into the United States circuit court or Federal courts, and file in the office of the secretary of state a written instrument, duly signed and sealed, certifying such appointment, which shall continue until another attorney be substituted.

Now, you know the Supreme Court of the United States held that while an individual has a right to go into another State and do business, a foreign corporation has not any such right, and that the States can prohibit them from doing it, and they can make a condition in granting a license to that company that if they do remove into a United States court the license can be revoked.

That is the opinion in a case that came up in Kentucky, found in 202 United States. They attempted here in this case to maintain that a certain agreement which the party signed should prevent him from going into a Federal court. The insurance company carried on business for a time and put such stipulations as that into their contract; parties were insured under it, and later, when sued, the company tried to remove the case into the United States court. The court said in the first place, on the first proposition, that such an agreement was void at common law; that is was void [reads]:

In these aspects any citizen may no doubt waive the rights to which he may be entitled. He can not, however, bind himself in advance by an agreement, which may be

specifically enforced, thus to forfeit his rights at all times and on all occasions, whenever the case may be presented.

That the agreement of the insurance company is invalid upon the principles mentioned, numerous cases may be cited to prove. They show that agreements in advance to oust the courts of the jurisdiction conferred by law are illegal and void.

In Scott v. Avery (one of the cases), the Lord Chancellor says: "There is no doubt of the general principle that parties can not by contract oust the ordinary courts of their jurisdiction. That has been decided in many cases.”

And so on. They lay that down as a fundamental proposition, that such an agreement is void. That is in 20 Wallace, 451. Then again [reads]:

Does the agreement in question gain validity from the statute of Wisconsin, which has been quoted? Is the statute of the State of Wisconsin, which enacts that a corporation organized in another State shall not transact business within its limits, unless it stipulates in advance that it will not remove into the Federal courts any suit that may be commenced against it by a citizen of Wisconsin, a valid statute in respect to such requisition under the Constitution of the United States?

And then they hold that every man has a constitutional right to remove his cases into the United States court, and that any law, any State law, which prohibited that was void, and that any stipulation that was inserted in the contract by virtue of such a law was of no validity; that it is one of the constitutional rights of a party, and that the law could not, by requiring such a stipulation, get it into the contract, and if it was in the contract, it was of no more consequence when put in there by virtue of the law.

Now the discussion is very interesting, and it comes to this: That a man can not by contract, that any courts will enforce, bargain away his rights; and by analogy or parallel, as it will appear by examining the authorities, when the individuals who are making a contract between themselves desire to make a contract the Federal Government can not step in and say, as between those people, "You shall not make that contract, or if you make a contract it shall contain a certain stipulation."

Those are the principal authorities. Then another citation is of the case of the Security Mutual Insurance Company . Prewitt, 202 United States, page 252. I think that is all. This citation is taken from pages 252 and 253 in that case:

In these two cases this court decided that any agreement made by a foreign insurance company not to remove a cause to the Federal court was void, whether made pursuant to a statute of the State providing for such agreement or in the absence of such statute; but that the State, having power to exclude altogether a foreign insurance company from doing business within the State, had power to enact a statute which, in addition to providing for the agreement mentioned, also provided that if the company did remove a case from the State to a Federal court, its right to do business within the State should cease, and its permit should be revoked. It was held there was a distinction between the two propositions, and one might be held void and the other not.

The case of Barron v. Burnside (121 U.S., 186) has been cited as overruling the Doyle case, and as holding that a statute of the nature of the one in question here is void as a violation of the Federal Constitution. In that case a statute of Iowa was under consideration. It is set out in the report. The first section provides for an application by the foreign company to the secretary of state, requesting that a permit may be issued to the corporation to transact business in the State. It also provides that the application shall contain a stipulation that the permit shall be subject to each of the provisions of the act. The third section provides that if any cases commenced in a State court were removed by the corporation into a Federal court the corporation should thereupon forfeit any permit issued or authority granted to it to transact business in the State. The fourth section provides for punishing the agents, officers, or servants of the corporation for doing business as such in the State, if the corporation had not complied with the statute and taken out and retained a valid permit to do busi

ness within the State. The corporation had not, in fact, taken out a permit. Barron, the plaintiff in error, was a servant of the corporation, and was engaged as engineer in running a train of the corporation which started from Chicago and was running in the State of Iowa. He was arrested in Iowa for acting as the agent of the company in that State while the company had no permit. Having been arrested, he applied to the supreme court of the State for a writ of habeas corpus, which was issued and a return made, and the case heard upon an agreed statement containing the above facts. The State court upheld the validity of the statute, and the case was brought to this court by writ of error, where the judgment was reversed and the statute held invalid.

Mr. SAMUEL M. KNOX, secretary and treasurer of the New York Shipbuilding Company, Camden, N. J.: Mr. Chairman, before introducing Captain Randle, who will address you in behalf of the New York Shipbuilding Company, I wish to thank the committee for extending the right you gave us yesterday. We found it was not convenient for us then to be here, and you then extended our time to-day, and we appreciate it.

Now, Captain Randle was for a great many years, for more than twenty-five years, a trans-Atlantic sea captain, and during that time commanded many of the largest trans-Atlantic steamers. He also superintended the construction of a great many of these steamers, both in this country and abroad. He is, therefore, not only a practical shipmaster, but also a practical shipbuilder. At the time of the organization of the New York Shipbuilding Company he came into the company as our marine superintendent, a very important official position in our company, and one in which he comes directly in contact with the labor in the yards. His views, therefore, are entitled to consideration, and we will be glad to have you hear him. The CHAIRMAN. Very well.

STATEMENT OF CAPT. W. G. RANDLE, OF THE NEW YORK SHIPBUILDING COMPANY, CAMDEN, N. J.

Captain RANDLE. Mr. Chairman and members of the committee: Replying, as Mr. Knox did, to your kind courtesy, we have by your courtesy been allowed to appear before you and briefly state the objections we have to the bill, the object of which is to restrict the hours of labor in which a man shall work when engaged on Government contracts.

It is necessary, Mr. Chairman, in order that business may be conducted at all, that every manufacturer shall be allowed a free hand in the conduct of his business, establishing the hours of labor according to his requirements and the general conditions existing in each locality by satisfactory negotiations with his men.

I am connected with the New York Shipbuilding Company, of Camden, N. J., as a director and its marine superintendent. We employ about 4,000 men, part of whom are engaged on Government work and part on work for private firms. All work ten hours per day, or sixty hours per week, in winter, and fifty-seven and one half hours in summer. We can not dissever the one set of men from the other without demoralizing our whole plant and its workings, and without its proving disastrous to our whole business financially, as well as making our men dissatisfied amongst themselves, and without depriving their wives and children of 20 per cent of the husbands' and fathers' earnings, and therefore curtailing their necessities and enjoyments, and enacting an arbitrary law whereby a good industrious

mechanic will not be allowed to work when he wants to, thereby depriving him of his rights and privileges as a good citizen.

I wish to state most emphatically that it is neither practical nor possible to work part of the men eight hours and the other part ten hours in the same works; and in connection with what I have stated, 'allow me to say that there is no article in this wide world manufactured by the hand of man that so largely calls on the general industries of a nation to render their quota of production as a steamship. You can hardly name a commodity that does not in some way or in part enter into the construction and completion of the battle ship and the modern steamship. Therefore in curtailing the hours of labor two hours per day, or twelve hours per week, and six hundred and twenty-four hours per year of each individual worker and producer, there would also necessarily be engendered habits of laziness, dissatisfaction, and other bad effects on the mechanics, and destruction and loss to the company or proprietor, and you would affect almost every industry in this broad land, whenever they may be called on to furnish any part or parts for Government contracts. I might go on from now until this time to-morrow and still not exhaust this subject and its far-reaching effects on the industries of the nations.

During the time I was superintending the construction of the St. Louis and St. Paul at Cramps' yard in 1894 and 1895, I particularly made a memorandum of all the commodities that entered into the construction of those two great ships, and there was hardly a State in this Union, Mr. Chairman, but what was called on, from New York to California, or from Maine to Georgia, hardly a State but which had to render its quota of some production that entered into the construction of those ships. Therefore, we are not called. on alone to uphold the establishment of the ten-hour system in our shipyards, but every industry on this continent is affected by the reduction of two hours of labor of each individual mechanic. It can not help but cause distress to those people and their families, as well as dissatisfaction; and in making our contracts with the Government we are placed under severe penalties for the construction of those ships within the specified time. There are times when, by reason of delay in the delivery of goods, we can not complete those ships in time, and therefore we are called on to work overtime. Our mechanics readily respond to our wishes in that respect, because, of course, they increase thereby their labor and their wages and at the same time help us out of the difficulty. If the eight-hour bill were to become a law, we could not then work those mechanics more than eight hours, and therefore we could not deliver the ships to the Government in the specified time, and we would consequently be subject to heavy penalties and consequently would be heavy losers.

Just to show as an exemplification of the words that I have just uttered, the State of Maine was called on to render to those two ships, the St. Louis and the St. Paul, and all other ships that we have since constructed, white pine for patterns; machinery, including winches, windlasses, steering gear, and so forth, from Bath; castings, iron, brass, and manganese bronze from Bath; ships' rigging and blocks, and cotton goods. From the State of Vermont came lumber, white pine for patterns; slate for electrical switchboards, table tops, and so forth; marble for sanitary fittings, and cotton goods. New Hampshire supplied us with lumber, white pine