Mr. HAYDEN. That is, the men would not work eight hours for eight hours' pay?

Mr. MCGREGOR. No, sir.

Mr. HAYDEN. But I asked you this question: Could you afford to pay those men their present wages, which cover nine hours' work, for only eight hours' work?

Mr. McGREGOR. No, sir.

Mr. HOLDER. Could I interject a question there?

Mr. HAYDEN. Yes.

Mr. HOLDER. Is it not a fact that your concern, in connection with all of your competitors at San Francisco, made an arrangement last May with all of the iron trades that you would decrease the hours of labor from nine to eight on a fifteen-minute basis each year until the year 1910, when you would reach the eight-hour basis, without any decrease in pay?

Mr. MCGREGOR. Not without any decrease in pay.

Mr. HOLDER. We understand that that same rate of pay is to be maintained.

Mr. McGREGOR. No, no. The first of last May the men struck for eight hours. It was not a question of pay; that question was not raised at all. Finally, after our place had been closed for about seven weeks, we reached this agreement in connection with the other metal industries out there and proposed-or it was agreed to—that the eight-hour day should be reached in time by reductions of the day fifteen minutes at a time, ultimately reaching an eight-hour day. But the question of the men being paid the same wages for the lesser time was not in issue at all.

Mr. HOLDER. It has been reported that there would be no change in the daily rates.

Mr. McGREGOR. That, of course, is not correct. We simply can not pay nine-hour wages for an eight-hour day.

Mr. NICHOLLS. You make agreements with the men through their organizations, then, do you?

Mr. McGREGOR. Yes, sir; we did in this case.

Mr. TRACY. Then in 1910 you will be in condition to take all the Government work they can give you?

Mr. McGREGOR. I do not know that.

Mr. TRACY. Or that you are capable of doing?

Mr. MCGREGOR. Understand this: That there is no restriction of the hours that a man may work. What the men are after, and they are frank enough to say it, is this: They do not want an eight-hour day. They do not want their opportunities to work limited to eight hours a day. They want to work nine hours for nine and a half hours' pay.

Mr. HAYDEN. That is, they want overtime?

Mr. McGREGOR. They want overtime, undoubtedly.

Mr. DAVENPORT. Was any proposition ever made to you to cut off overtime pay by anybody?

Mr. MCGREGOR. Absolutely no, sir. For instance, a man would work on Saturday, and he would work all Saturday night and all Sunday up to Sunday night without a break. I have known such instances, and I complained about that and said that should not be, because I did not believe we got a proper amount of work out of that man. We were doing that man bodily harm, for one thing,

and we were not getting, as I considered it, adequate results from the man who would work continuously that long. However, there are some exceptional cases where it has been necessary for a man to work forty-eight, fifty, or sixty hours at a stretch without a let up. Mr. DAVENPORT. Those are extraordinary conditions?

Mr. McGREGOR. Those are extraordinary conditions. I only mention this to show you that we never have heard of an instance of a man wanting voluntarily to cut off overtime pay. They are willing to work overtime if they are paid time and a half for it, and double time on Sundays and holidays.

Mr. DAVENPORT. Did the labor organizations of San Francisco ever make demand on you to have overtime cut out?

Mr. MCGREGOR. No, sir; never.

Mr. HAYDEN. In the building of a battle ship for the United States, or a large vessel of any description, you do not produce all of the material you use?

Mr. MCGREGOR. Oh, no.

Mr. HAYDEN. That is, the hull plates, the shapes?

Mr. MCGREGOR. All of the raw material, you might say. We do not produce any raw material. That is, we do not produce billets. or pig iron, nor do we mold the plates.

Mr. HAYDEN. That is, the hull plates?

Mr. MCGREGOR. Yes; the hull plates. Of course we get billets from them, and make our own castings sometimes-bronze, iron, steel, and so on.

Mr. HAYDEN. Do you know of any concern in the country that makes its own hull plates?

Mr. MCGREGOR. Not in any single shop. There may be an aggregation. For instance, the United States Shipbuilding Company was able practically to do everything from the production of raw material up, because of its connection with the Bethlehem Company.

Mr. HAYDEN. Yes; the Bethlehem Company made the structural material used.

Mr. HAYDEN. Does any English yard produce all of the material used by it?

Mr. MCGREGOR. No; I think not.

Mr. HOLDER. And the Armstrong people also?

Mr. McGREGOR. Yes, sir; the Armstrong people; they are the nearest to it.

Mr. HAYDEN. But even they have to procure materials from outside sources?

Mr. McGREGOR. Yes, sir; it is economy to do it. The Union Iron Works, on account of its location and the disposition of the former owners there, wanted to make everything it could. But that is not now considered practicable or desirable in any industry. For instance, the old-fashioned piano makers would make the legs of the pianos, and make the keys and put the ivories on, and the strings; but that is not commercially possible in these days, and with the Union Iron Works we have been eliminating the production of plate and other materials as far as possible. There are so many specialists in the different branches of the work involved in a battle ship who are able to beat us that we have given up making many things that were formerly made there, and now we buy them.

Mr. HAYDEN. Under the contracts of the company, what materials do they obtain by subcontract? Can you give us that information? Mr. McGREGOR. By purchase, do you mean?

Mr. HAYDEN. By purchase or by subcontract

Mr. MCGREGOR. For instance, a good deal of the electrical apparatus, dynamos, dynamo engines, and the electric fixtures, and so forth. The CHAIRMAN. Do you buy those on the Pacific coast or in the East?

Mr. McGREGOR. Generally in the East, from the Westinghouse Company or the General Electric Company, or some concern that. manufactures electrical supplies.

The CHAIRMAN. Does your armament come from the East?

Mr. McGREGOR. It is furnished by the Government. It is not part of the shipbuilder's contract.

The CHAIRMAN. It comes from the East?

Mr. MCGREGOR. Yes, sir; entirely; either made by the Bethlehem Company or the Watervliet Arsenal.

Mr. HAYDEN. How about the Midvale Company?

Mr. McGREGOR. I do not know about the Midvale.

Mr. HAYDEN. You mean the armament?

Mr. McGREGOR. Yes, sir.

Mr. HAYDEN. Your plates and frames you get from Bethlehem? Mr. MCGREGOR. The plates and angles, angle frames, as we call them, have to come from eastern mills.

Mr. VREELAND. The Government supplies you with armor?
Mr. MCGREGOR. Yes, sir.

Mr. VREELAND. Is there anything else that is supplied by the Government?

Mr. MCGREGOR. Yes; the guns-armament.

Mr. VREELAND. I mean anything outside of the armor?

Mr. McGREGOR. The furniture and equipment, probably some of the lifeboats, the launches, and so on. Those are always furnished by the Government. I know that Mare Island has furnished them to the Union Iron Works. That was a thing that we stopped manufacturing. I do not think any of the yards manufacture them.

Mr. HAYDEN. And you procure a considerable percentage of materials from other parties?

Mr. MCGREGOR. Oh, my, yes; many of the heaviest of the forgings, that we perhaps can not or do not want to make, we buy; and many specialties all through the ship, such as anchors and chains, we do not make.

Mr. HAYDEN. Are any of the things that you buy procurable in the open market? That is, can you find them ready in stock, or are they things that are commonly made for the general trade?

Mr. McGREGOR. No, sir. Almost everything we buy for a Government ship is specially ordered and takes time to produce.

Mr. HAYDEN. Specially ordered for the purposes of that ship? Mr. MCGREGOR. Yes, sir; specially ordered. The order is usually accompanied by special drawings and special instructions, and deliveries are naturally slow, for the reason that the Government requires a very high standard of efficiency.

Mr. HAYDEN. And the Government inspects the material in the works of those who are producing the material for you?

Mr. McGREGOR. Yes, sir; the Government inspectors are resident at their works.

Mr. HAYDEN. Now, how could you, in San Francisco, control contractors who were furnishing materials to you for Government work, if there was an eight-hour restriction on the day's work?

Mr. McGREGOR. We could not do it. Sometimes a contractor might for an extra consideration agree to give us a guarantee of indemnity against any action for infringement that might be taken against him; but I am satisfied that in a great many cases they would refuse.

Mr. HAYDEN. But you understand that if this bill should be enacted you, and not your subcontractor, would be responsible for the penalty?

Mr. MCGREGOR. Yes; I quite understand that.

Mr. HAYDEN. For your violations of the eight-hour rule, and those of your subcontractors-I ask you if it would be possible for you to control that?

Mr. MCGREGOR. No, sir; I do not believe it could be controlled. Mr. HAYDEN. Do you think your subcontractors would agree to indemnify you for penalties imposed on you for their failure to observe the eight-hour rule?

Mr. MCGREGOR. No, sir; that resolves itself into one thing, that all Government work must be done in Government yards.

Mr. HAYDEN. How could the Government in Government yards build a ship? Would it not have to obtain its material from the persons from whom you obtain it?

Mr. MCGREGOR. Yes; but the Government is not in the same position we would be in.

Mr. HAYDEN. How is that?

Mr. MCGREGOR. Well, they would not sue themselves.

Mr. HAYDEN. You mean they would not violate their own law? Mr. MCGREGOR. They do it right along. The inspectors on the work done in the navy-yard at Mare Island do that, and the same thing occurs in every navy-yard.

Mr. HOLDER. Have you any specific instances of that?

Mr. McGREGOR. Yes; I have. Take the trial trip of the Connecticut. That ship did not have her trial trip the same as they would have the trial of a ship that we built.

Mr. HOLDER. I mean, can you give us any specific instance of where they violate the eight-hour clause?

Mr. MCGREGOR. No; I am not thinking of the eight-hour clause. I do not think they do, as a general rule. I often go out to Mare Island, and I do not hear of them doing any overtime work.

Mr. HAYDEN. They do not work overtime at the Mare Island NavyYard?

Mr. MCGREGOR No, sir.

Mr. HAYDEN. How about the docking of vessels?

Mr. MCGREGOR. That comes under that law, too. They have one small dock there, that is all.

Mr. HAYDEN. When they dock a vessel there, do they work more than eight hours?

Mr. MCGREGOR. No, sir. It would probably be arranged sometime so that it would come within the eight-hour day, I imagine. Mr. VREELAND. Is the Union Iron Works a stock company?

Mr. McGREGOR. Yes, sir.

Mr VREELAND. The amount of capital stock actually paid in?
Mr. McGREGOR. You wish the amount of it?

Mr. VREELAND. Was the amount of the capital stock actually paid

in? Does it represent money?

Mr. McGREGOR. Oh, yes; every dollar of it.
Mr. VREELAND. No water in it?

Mr. MCGREGOR. No; none whatever.

In fact, our statement shows

that the property is worth in excess of the capital stock.

Mr. HAYDEN. You heard read by Mr. Rainey, of the committee, a newspaper clipping with regard to the construction of a naval vessel in a Japanese yard. I believe that, among other things, it was said that all of the materials, forgings, and one thing or another which entered into her construction, were produced in that yard. Do you know whether or not that was true?

Mr. VREELAND. Are you speaking of the Japanese vessel?
Mr. HAYDEN. Yes, sir.

Mr. DAVENPORT. I think you overlooked the fact that it stated that part of it was produced by other people, subsidized by the Government.

Mr. HAYDEN. That the material used in this vessel was produced by a private firm subsidized by the Government?

Mr. DAVENPORT. Yes; in part.

Mr. HAYDEN. I understood the article to state that the forgings, and in fact all materials used, were produced in the yard where this vessel was built. Do you know whether or not that is true, Mr. McGregor?

Mr. McGREGOR. I do not think that could possibly be true.

Mr. DAVENPORT. I think it stated that it was either done in that way, or by a private concern that was subsidized by the Government. Mr. HAYDEN. We can see that when it is printed, Mr. Davenport. The CHAIRMAN. Just what was the relevancy of that? We were considering an eight-hour bill, and the question of the possibility of building a ship in the United States entirely under an eight-hour law. In response to an assertion that a navy-yard could not do that without going outside, we had newspaper clippings read to show that the navy-yards of Japan, together with a private concern subsidized by the Government, have built a ship within a limited time with two shifts of men, covering the twenty-four hours. What is the relation of that to an eight-hour proposition?

Mr. HAYDEN. I took this to be his idea, to show that if the private firms in this country withdrew from building vessels, the Government could nevertheless procure them by building them in its own yards. Mr. VREELAND. I am frank to say that I have gone into that subject more for the reason that gentlemen who had the information were here, and it has been a matter of considerable discussion in Congress, and we do not often have the president of the Union Iron Works with us, and we had better get it while we could. While it does not perhaps strictly apply on this, we are being paid by the day for working for the Government, and get information any way we can. The CHAIRMAN. I am not objecting to the information we are getting, except as the judge referred to the statement of Mr. Rainey, and I confess I had not conceived just the relation that the newspaper clippings offered by Mr. Rainey had to the matter under consideration. Mr. HAYDEN. Will you plaese, in your own way, discuss any of the features of this bill that occur to you?