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UNITED STATES D E PARTM ENT OF LABOR
Frances Perkins, Secretary
B U R E A U OF L A B O R S T A T IS T IC S
Isador Lubin, Commissioner (on leave)
A . F. Hinrichs, A cting Commissioner
Labor Laws
and T heir Adm inistration
19 4 0
+
Proceedings o f the T w e n ty -six th Convention o f the
International Association o f Governmental
Labor Officials, N e w Y o rk C ity
September 1940
B ulletin TSfo. 690
U N IT E D S T A T E S
G O V E R N M E N T P R IN T IN G OFFICE
W A S H IN G T O N : 1941
For sale by the Superintendent o f Documents, Washington, D . C.
Price 25 cents
U N IT E D S T A T E S D E P A R T M E N T O F L A B O R
F rances P erk ins , S e c r e ta r y
+
BUREAU OF LABOR STATISTICS
I sador L tjbin,
C o m m is s io n e r
A. F. IIinrichs,
Donald Davenport, Chief,
ment and Occupational
Branch
Employ
Outlook
A c tin g C o m m is sio n e r
Aryness Joy, Chief, Prices and Cost of
Living Branch
N.
Henry J. Fitzgerald, Chief, Business
Management Branch
Hugh S. Hanna, Chief, Editorial and
Research
(on leave)
Arnold Tolies, Chief, Working
Conditions and Industrial Relations
Branch
Sidney W. Wilcox, Chief Statistician
CHIEFS OF DIVISIONS
Herman B. Byer, Construction and
Public Employment
Charles F. Sharkey, Labor Law Infor
mation
J. M. Cutts, Wholesale Prices
Boris Stern, Labor Information Bul
letin
W. Duane Evans, Productivity and
Technological Developments
Swen Kjaer, Industrial Accidents
Stella Stewart, Retail Prices
John J. Mahaney, Machine Tabulation
Lewis E. Talbert, Employment Sta
tistics
Robert J. Myers, Wage and Hour
Statistics
Emmett H. Welch, Occupational Out
look
Florence Peterson, Industrial Relations
Faith M. Williams, Cost of Living
n
CONTENTS
Page
International Association of Governmental Labor Officials:
Review of labor legislation in 1940— President’s address, by Adam
Bell_________________________________________________________________
Labor and the defense program:
The place of labor in the national defense program, by Isador Lubin,
Assistant to the Commissioner in Charge of Labor, Advisory Com
mission to the Council on National Defense________________________
Meeting the defense needs for labor, by Floyd W. Reeves, Executive
Assistant for Labor Supply, Advisory Commission to the Council
on National Defense________________________
Discussion.
Defense activities of New York State agencies, by Hon. Charles Poletti,
Lieutenant Governor of the State of New York____________________
Wage and hour legislation:
Operation of the wage and hour law, by Col. Philip B. Fleming, Admin
istrator of the Wage and Hour Division______________________________
Discussion.
Minimum-wage legislation in the United States, September 1, 1939, to
September 1, 1940— Report of the committee on minimum wages,
by Frieda S. Miller, chairman_____________________________
Minimum-wage legislation in Canada, 1939-40— Report of committee
on minimum wage_____________________________________________________
Discussion.
Social security:
Social security legislation and administration, by Arthur Altmeyer,
Chairman Social Security Board____________________________________
Discussion.
Social security— Report of committee on social security, by W. A. Pat
Murphy, chairman____________________________________________________
Adjustment of industrial disputes:
Potentialities of the Labor Relations Board, by William Leiserson,
National Labor Relations Board______________________________________
Discussion.
Factory inspection and safety:
Factory inspection— Report of committee on factory inspection, by
John M. Falasz, chairman____________________________________________
Factory inspection— Panel discussion___________________________________
Machinery safety requirements— Report of committee on machinery
safety requirements, by Roland P. Blake, chairman________________
Women in industry:
Women in industry, September 1939 to September 1940— Report of
committee on women in industry, by Mary Anderson, chairman__
Discussion.
h i
3
11
19
45
49
74
81
86
104
111
139
138
157
164
IV
CONTENTS
Page
Apprenticeship :
Apprentice training— Report of committee on apprenticeship, by
Voyta Wrabetz, chairman_____________________________________________
Discussion.
Child labor:
Child labor in 1940— Report of committee on child labor, by Beatrice
McConnell, chairman__________________________________________________
Discussion.
Wage-claim collection:
Wage-claim collection— Report of committee on wage-claim collec
tion, by E. I. M cKinley, chairman____________________________________
Discussion.
Industrial home work:
Industrial home work— Report of the committee on industrial home
work, by Morgan R. Mooney,chairman_______________________________
Discussion.
Civil service:
Civil service— Report of the committee on civil service, by Eugene B.
Patton, chairman_______________________________________________________
Discussion.
Small loans:
Enforcement of laws against loan sharks— Report of special committee
on the enforcement of laws against loan sharks, by Eugene B.
Patton, chairman_______________________________________________________
Business meetings— Reports and resolutions:
Report of the secretary-treasurer________________________________________
Report and recommendations of the executive board__________________
Resolutions adopted by the convention_________________________________
Discussion.
Report of the auditing committee_______________________________________
Report of the nominating committee____________________________________
Appendixes:
Appendix A .— Organization of the International Association of Gov
ernmental Labor Officials:
Officers of the I. A. G. L. O., 19 40 -4 1______________________________
Honorary life members______________________________________________
Constitution__________________________________________________________
Development of the I. A. G. L. O __________________________________
Appendix B .— Persons attending the twenty-sixth convention of the
I. A. G. L. O __________________________________________________________
171
181
191
197
202
207
239
242
243
243
249
250
250
250
254
255
L e tte r o f T r a n s m itta l
U
n it e d
S tates D
B
e pa r t m e n t of
u reau of
L
abor
L
abor,
S
t a t is t ic s ,
Washington, D. C., A pril 18, 191^1.
The S e c r e t a r y o f L a b o r :
I have the honor to transmit herewith a report on Labor Laws and
Their Administration, 1940, embodying the proceedings o f the
Twenty-sixth Convention of the International Association of Govern
mental Labor Officials, which convened in New York City September
9, 1940.
A. F. H
Hon.
F
ran ces
P
in r ic h s ,
A cting Commissioner.
e r k in s,
Secretary o f Labor.
v
B ulletin 7S[o. 690 o f the
U nited States Bureau o f Labor Statistics
Labor Law s and T heir Adm inistration, 1940
The International Association of Governmental Labor Officials held
its twenty-sixth annual convention at New Y o t k City, convening
on Monday, September 9, 1940, and closing on Thursday, September
12, 1940. Representatives of 25 States, the District of Columbia,
Puerto Rico, and 3 Provinces o f Canada attended the convention.
At the opening session, addresses of welcome were made by the
Hon. Charles Poletti, Lieutenant Governor of the State of New York,
and Newbold Norris, acting mayor of the city of New York.
The president o f the Association, Adam Bell (Department of Labor
of British Columbia, Canada), in his opening address reviewed the
legislative record of 1940 as regards labor. Only eight States had
legislative sessions in 1940, but the Congress of the United States
was in almost continuous session during the year. The Federal legis
lation was devoted in great measure to the defense program, and in
consequence the extension and development of Federal labor legisla
tion were overshadowed. The president reviewed the effect of the
defense program on existing labor legislation and expressed satisfac
tion that in the carrying out of the defense program the leaders of
the United States and Canada upheld the necessity of maintaining
labor standards.
The operation of the Wage and Hour Act was considered at one
session of the convention. Col. Philip Fleming, Administrator of
the Wage and Hour Division o f the United States Department of
Labor, delivered an address on the Federal administration o f the
law. Various State aspects of the operation of this law were brought
out in the discussion.
The subject of the national defense program and the relation of
labor thereto was discussed at another session, addresses being made
by Isador Lubin, Assistant to the Commissioner in Charge of Labor,
Advisory Commission to the Council of National Defense, and Floyd
W. Reeves, Executive Assistant for Labor Supply, Advisory Com
mission to the Council on National Defense. The general discus
sion centered around the part to be played by the various State
agencies.
1
2
LABOR LAWS AND THEIR ADMINISTRATION,
1940
The progress achieved during the year preceding the convention in
legislation and administration in the various fields of labor and social
welfare was reported by the chairmen of the standing committees
concerned with these subjects. The problem o f industrial safety was
emphasized in committee reports, and part of the last session was
devoted to the subject o f factory inspection.
The business of the Association was given consideration at the open
ing and closing sessions o f the convention. The president presided at
the opening session of the convention on September 9, and at both
business sessions. The chairmen of the other sessions were as follow s:
O. H. Gram, Oregon Bureau of Labor, afternoon session, September 9.
Morgan R. Mooney, Connecticut Department of Labor and Factory Inspec
tion, morning session, September 10.
Frieda S. Miller, New York State Department of Labor, afternoon session,
September 10.
Voyta Wrabetz, Wisconsin Industrial Commission, morning session,
September 11.
Martin P. Durkin, Illinois Department of Labor, morning session,
September 12.
The twenty-seventh annual convention of the Association will be
held at St. Louis, Mo., in September 1941.
International Association of Governmental
Labor Officials
R e v ie w
o f L a b o r L e g is la tio n in 1 9 4 0
Presid en t’s A ddress, b y
A
d a m
B
e ll
In the United States the legislatures of only eight States meet in
regular session during the even-numbered years. Hence, in review
ing the legislative achievements since the last meeting of this Associa
tion in Tulsa 1 year ago, we are naturally limited in the scope of our
coverage. During this period, however, the Congress of the United
States has been in almost continuous session, with the possible excep
tion of brief recess periods incident to the holding of the conventions
of the two major political parties. A great deal of the time of the
national legislative body has been devoted to the consideration of
laws seeking to strengthen the American defenses. Supplementary
to this legislation, serious thought and attention was given to matters
of taxation, relief, housing, and military conscription. This program
has, for the most part, overshadowed the extension and development
of Federal labor legislation.
Special mention, however, should be made o f concerted attempts
to revise existing Federal legislation designed to benefit the worker.
Extended hearings were held by congressional committees investi
gating the National Labor Relations Board, and strong pressure was
exerted to change vitally many of the provisions of the Fair Labor
Standards Act of 1938. The House of Representatives considered
a series o f bills to revise this act. By vote they were defeated. The
House of Representatives adopted several drastic changes in the
National Labor Relations Act. The amendatory legislation provided
for a new board of three members and vested certain functions of the
present board in an administrator. The powers of the board in the
matter of review were curtailed and greater authority was placed in
the courts. However, the Senate of the United States has not con
sidered the amendments to the law, and there is probably little likeli
hood that any action will be taken at this session of the Congress.
In reference to what has been said concerning the attempts to amend
the Federal wage and hour law, particular mention should be made,
however, of the legislative enactment providing for a special proce-
3
4
LABOR LAW S AND THEIR ADMINISTRATION,
19 4 0
dure for wage determination in Puerto Rico and the Virgin Islands.
The Administrator of the law hereafter is empowered to appoint a
special industry committee to recommend the minimum rates of wages
in these jurisdictions. Special provisions were made also for the
application of wage rates to home workers.
In connection with the national defense program, considerable inter
est has been created in the United States as to the effect of legislation
regulating the hours of labor of employees. Congress in 1938 passed
the Fair Labor Standards Act, which provides for a minimum wTage
and a maximum workweek for employees engaged in interstate com
merce or in the production o f goods for interstate commerce. By the
provisions of the act, the maximum weekly hours of work are flexible.
The present limitation is fixed at 42 hours and on next October 24th
a 40-hour week will become effective. These limitations, however, do
not prohibit the wnrker from working over the prescribed hours, pro
vided payment is made at time and a half for all overtime work. There
is no limitation o f any kind on the working hours of the plant or
establishment. In a recent address to representatives of the Interna
tional Association of Garment Manufacturers in Cincinnati, Ohio,
Colonel Fleming, Wage and Hour Administrator, made the f ollowing
statement relative to the overtime provisions o f the act: “ It does not
prevent the employer from working his employees 100 hours a week—
if he can find that many hours—provided only that he pays for the
excess hours over 42 at the rate of time and a half of the regular hourly
rate of pay.”
In the administration of the public contracts law, known as the
Walsh-Healey Act, the Congress recently authorized the President to
suspend the substantive provisions of the law when the public interest
so required. However, to date there has been no suspension of these
provisions. Again, the National Defense Act (Public, No. 671, 76th
Cong.) has provided for the suspension of the law prohibiting more
than 8 hours’ labor in any 1 day for persons engaged on work covered
by Army, Navy, or Coast Guard contracts. By a public act (No. 703)
the present Congress has ordered the payment of overtime at time and
one-half the regular rate of pay for hours worked in excess of the
basic 40-hour week, for persons employed directly by the War Depart
ment in the production o f war materials.
It is a source of satisfaction to know that in the prosecution of
the national defense program the leaders of the United States and of
the Dominion of Canada have taken cognizance of the necessity of
maintaining labor standards. President Roosevelt has already pub
licly declared that it is not the intention of the Government to allow
any break-down of labor standards in the prosecution of the defense
program. The Dominion Government also has declared that the labor
REVIEW OF LABOR LEGISLATION IN
1940
5
policy during the emergency shall be to maintain fair and reasonable
standards o f wages, hours, and other working conditions.
In an effort to expedite the building o f low-cost housing needed in
connection with the defense program, Congress provided that the
W ar and Navy Departments and the United States Housing Authority
may cooperate in order to make necessary housing available fo r per
sons engaged in defense work. The W ar and Navy Departments were
authorized to initiate projects to provide dwellings at or near military
or naval reservations, posts, or bases, fo r rental to enlisted men with
families, and to employees o f these departments assigned to duty
at these points.
O f particular interest and far-reaching importance was the enact
ment by Congress of the Alien Registration Act for 1940. This act
requires the registration and fingerprinting of all aliens, and further
strengthens the present law relating to their admission and deporta
tion. In addition, the act makes it unlawful to interfere with the
discipline o f the Army, Navy, and Coast Guard. At the time President
Roosevelt signed the law he observed that the legislation should be
interpreted and administered as a “program designed not only for the
protection o f the country, but also for the protection of the loyal aliens
who are its guests.” He also remarked that “the registration and
identification of approximately S y2 million aliens who are now within
our borders does not carry with it any stigma or implication of
hostility toward those who, while they may not be citizens, are loyal
to this country and its institutions.”
As a result of further legislation enacted during 1940, the employ
ment of aliens has been considerably restricted. In the recently
enacted defense program, for example, no alien may be employed by
a contractor in the performance of secret, confidential, or restricted
Government contracts, have access to the plans or specifications of the
work under construction, or participate in the contract trials without
the written consent of the Secretary of the Department concerned.
In effect this law prohibits the employment of aliens by such con
tractors. Other restrictions on alien employment are found in a
number o f the appropriation acts passed by the Congress this year.
In reviewing other Federal legislation affecting labor, mention
might be made o f amendments to the Railroad Unemployment In
surance Act, and the extension o f the so-called Davis-Bacon A ct to
the Territories o£ Alaska and Hawaii.
In the field o f State legislation, Kentucky extended further the
functions o f the department o f industrial relations. In this State
an industrial safety board was authorized to be established and
empowered to issue safety rules fo r places o f employment, except
mining operations. In addition, the department has been authorized
6
LABOR LAWS AND THEIR ADMINISTRATION, 1 9 4 0
to inspect places o f employment. The department may also enter
into cooperative agreements with appropriate Federal agencies for
the enforcement o f Federal and State laws. The public policy o f
the State has recognized the right o f employees to organize and
bargain collectively, free from restraint and coercion, but failed
to provide any method o f enforcing the law. In this State the
mediatory powers o f the commissioner o f industrial relations were
considerably strengthened.
In New York, several changes were made in the labor relations
act. The board may now obtain voluntary adjustments and com pli
ance with the law. The legislation, however1, does not authorize the
board to handle cases which properly belong to the State board
o f mediation, but merely permits the board to dispose o f many o f
its cases without the necessity o f going through formal hearings
in every case. The board is also required to investigate petitions,
whether filed by employers or employees. Form erly the act pro
vided that investigations were mandatory only in case o f petitions
filed by employees. Changes were made in the matter o f procedure
in employee elections, by permitting elections on the employer’s
property i f required by the board. The bureau o f mediation and
arbitration was abolished and its functions and duties transferred
to the State board o f mediation.
In New York, labor organizations must not deny membership to
any person nor deny to any o f its members equal treatment on
account o f race, color, or creed. In Rhode Island, the legislature
has decreed that persons advertising fo r employees during a strike
or lock-out must explicitly mention the existence o f a labor dispute.
In connection with the general subject o f labor relations, the
United States Supreme Court was called upon to decide several
cases involving the National Labor Relations A ct, as well as cases
concerning picketing and the distribution o f pamphlets. A s apper
taining to the Federal Labor Relations A ct, the Supreme Court early
in the year declared that the courts may not review rulings o f the
National Labor Relations Board affecting employee elections and
certifications o f unions, and further held that review by the courts
is limited to questions o f law. Again the Court decreed that only
the Board is authorized to institute proceedings to enfore its orders.
In several other decisions, the Supreme Court upheld rulings o f
the Board relating to its jurisdiction and power to invalidate indi
vidual employment contracts and to require the disestablishment
o f employer-dominated unions. Late in 1939 the Supreme Court
held unconstitutional the municipal ordinances o f Los Angeles, M il
waukee, and Worcester, Mass., which prohibited the distribution
REVIEW OF LABOR LEGISLATION IN 1 9 4 0
7
o f handbills, on the ground that they violated the rights o f freedom
o f speech and o f the press as guaranteed by the Constitution. Sim
ilarly, the Court held invalid an ordinance o f Irvington, N. J., which
required a person to obtain a permit before canvassing or dis
tributing circulars. Again, in later decisions, the Supreme Court
held unconstitutional an Alabama antipicketing statute and a similar
ordinance o f Shasta County, Calif., on the ground that the prohi
bition o f peaceful picketing violated the fourteenth amendment to
the Constitution guaranteeing free speech and a free press.
During 1940 no additional State ratified the Federal child-labor
amendment. T he count still stands at 28 States that have so far
ratified this amendment. However, some progress was made in
child-labor legislation in one State. A n entirely new child-labor act
was adopted in New Jersey. B y virtue o f this legislation the basic
minimum age for employment was raised from 14 to 16, and an
8-hour day, 40-hour week, 6-day week, was established for minors
under 18. W hile no changes were made this year in the Kentucky
child-labor law, a program o f voluntary apprenticeship was author
ized to be established. In two States (New Jersey and New Y ork )
the industrial home-work laws were strengthened.
Rhode Island enacted legislation which permits the State depart
ment o f labor to cooperate in the enforcement o f the Federal Fair
Labor Standards Act. In this regard it is o f interest to note that
three States (North Carolina, Connecticut, and Minnesota) have
already entered into agreements with the Federal W age and H our
Division and the Children’s Bureau o f the Department o f Labor,
which provide fo r investigations and inspections and enforcement o f
the Fair Labor Standards A ct in their respective jurisdictions.
Other legislation especially noted includes the follow ing: In Ken
tucky provision was made fo r the payment o f the prevailing rates
o f wages by contractors engaged on public works. Employment
has been limited to 8 hours a day and 40 hours a week, and time and
a half must be paid fo r overtime. In this State a l-day-rest-in-7 law
was adopted, and employees who work 7 days a week must hereafter
be paid time and a h a lf for all work performed on the seventh day.
Another Kentucky act makes it unlawful, in the case o f a collective
wage agreement, to withhold any part o f the wages with intent to
defraud. In V irginia the law requiring the payment o f wages at
specified times was strengthened. In this State and in Mississippi
the law regulating the assignment o f wages also was amended.
It is a source o f gratification to learn that during the past 12
months numerous conferences o f experts in the field o f labor and
social-insurance legislation have been held in various parts o f the
8
LABOR LAWS AND THEIR ADMINISTRATION,
194 0
Western Hemisphere. The first o f such meetings took place in W ash
ington, D. C., in November 1939, at the call o f the Secretary o f Labor.
This was the sixth conference called to consider various problems o f
labor-law administration. In outlining the purposes o f these meet
ings the Secretary o f Labor once said:
W e aim to develop free, voluntary cooperation by means of the conference,
in order to arrive at certain standards which we believe it would be desirable
to see practiced in all of the States. W e aim to stimulate those of us who
live and have responsibilities in the particular States to return to those States
and get the citizens who are interested in these subjects to bring to the attention
of the legislatures and to the Governors of those States what are sound and
desirable and practical principles of labor legislation.
Almost simultaneously, the Second Inter-American Labor Confer
ence of the International Labor Organization assembled in Havana,
Cuba. According to reliable reports this meeting produced a common
understanding o f mutual problems, resulting in the establishment
o f closer relationships, and also laid a basis for a fuller cooperation
between the American governments.
Early this year the so-called White House Conference on Children
in a Democracy took place in Washington. O f special interest to
this association was the endorsement of child-labor standards long
recommended and endorsed by this group.
Other meetings called fo r the purpose o f furthering the interest
o f better labor-law administration and techniques and worthy o f
mention include the Four-State Conference on Migratory Labor held
in Baltimore, Md., in early 1940, and the several meetings o f groups
interested in the subject matter o f a congressional resolution (H .
"Res. No. 63) authorizing the investigation o f the interstate migration
o f destitute citizens.
Twelve months ago, as we assembled for our convention at Tulsa,
the dark clouds that had so long threatened the skies o f Europe
broke in all their fury, engulfing many nations of the world in a
cataclysm of war. Canada became, and continues to be, a nation
o f war.
It would ill become me at this time and from this chair, a visitor
from a country at war to a country not at war, to dwell upon aspects
o f the war situation that might readily become contentious and
embarrassing.
It is inevitable, however, that the conflict in which Canada is
engaged should have a pronounced effect upon the laws of the land,
including labor legislation.
A n y reference to the war that I may make will be confined to its
effect upon labor legislation in the Dominion. A t the session o f P ar
liament preceding the war the right o f freedom o f association and
collective bargaining was more firmly established.
REVIEW OF LABOR LEGISLATION IN
19 4 0
9
A section was added to the Criminal Code o f Canada declaring it
a criminal offense, punishable on indictment or on summary con
viction, fo r any employer to dismiss any person fo r the sole reason
that he is a member o f a lawful trade-union or association o f work
men formed fo r the purpose o f advancing their interests in a lawful
manner, and organized fo r their protection in the regulation o f wages
and conditions o f work, or to seek by intimidation or threat to
compel an employee to abstain from belonging to a union or asso
ciation, or to conspire or agree with any other employer to do any
o f these things.
The Dominion Youth Training A ct was passed setting up a system
o f youth training that may be entered into jointly between the
Dominion and the Provinces, the costs being shared between the
two authorities.
A t the outbreak o f war the Government was prompt to clarify its
position regarding labor, stating that while no measure would be
allowed to stand in the way o f a vigorous war program, achievements
in the field o f labor legislation would not be thrown into the discard.
It is significant that not only the declaration but also the appli
cation o f this policy found immediate support from organized labor
and labor leaders throughout the country.
Far-reaching powers, commensurate with the need o f the hour, have
been given to the Government by Parliament. Under the W ar Meas
ures A ct the provisions o f the Industrial Disputes Investigation A ct
were made applicable to disputes between employers and employed in
war industries, including munitions supplies and defense projects,
thereby making conciliation and arbitration compulsory in these
matters.
Measures were immediately adopted to check undue price increases
and hoarding o f foods, fuel, and other necessaries o f life. A board
known as the W artime Prices and Trade Board has been created,
and regulations clothing that board with wide powers o f control have
been enacted. A nation-wide registration o f all persons over 16 years
o f age has been effected, and under the National Resources M obil
ization A ct compulsory military service fo r defense is now in effect
and operation, but this does not include the right to require persons
to serve in military, naval, or air forces outside o f Canada and its
territorial waters.
These are a few o f the measures enacted by your good neighbor
to the north to fulfill the words spoken by the Prime Minister o f
Canada when, on the fateful day o f September 3,1939, he said:
The people of Canada will, I know, face the days of stress and strain which
lie ahead with calm and resolute courage. There is no home in Canada, no
family, and no individual whose fortunes and freedom are not bound up in
the present struggle. I appeal to my fellow Canadians to unite in a national
10
LABOR LAWS AND THEIR ADMINISTRATION, 1 9 4 0
effort to save from destruction all that makes life itself worth living and to
preserve for future generations those liberties and institutions which others
have bequeathed to us.
National unemployment insurance became a fact in Canada this
year by act o f Parliament, this long-looked-for legislation being at
last made possible by active cooperation between the Dominion and
the Provinces in surmounting the constitutional difficulties that
hitherto have stood in its way.
B efore concluding I should like to take this opportunity to ex
press my profound appreciation o f the honor this Association did
me in electing me its president. I hope I may continue in future
years to benefit from its helpful functions and to cement more firmly
the many personal friendships I have formed.
Labor and the Defense Program
The Place o f Labor in the National Defense Program
By
I
sad o r
L
t j b in
,
A s s i s ta n t to t h e C o m m is s io n e r in C h a r g e o f L a b o r ,
A d v i s o r y C o m m is s io n to th e C o u n cil o n N a tio n a l D e f e n s e
It is not necessary to talk to this group about the requirements
o f a modern war. W e have seen what a modern war can be like.
W e have seen the French Arm y— large, efficient, and among the best
trained in the world— forced to yield to another army which had
certain technical equipment such as tanks, antiaircraft guns, and
the organizational ability to have things where they were needed
when they were wanted.
We, in the United States, acting upon the experience o f other
countries, have apparently decided that we ought to take stock of
what our A rm y and Navy are like and to make such provision for
that A rm y and that Navy as will guarantee us protection against
any aggressor. In taking stock o f our resources certain decisions
had to be made as to how big an army we ought to have to protect
ourselves and what equipment such an army should have. A ll this
means that an inventory o f our needs had to be taken— an inventory
in terms o f airplanes, tanks, antiaircraft guns, ships, and other
equipment essential to our protection.
T o do the job that is required, namely, to defend the United
States and this hemisphere against attack, will cost at the present
estimates about $16,000,000,000; or, to be a little more specific, $125
for every man, woman, and child in the United States.
Under the present program, o f this 16 billion dollars approximately
14 billion dollars goes fo r equipment. About 1 billion dollars goes
for personnel; namely, civilian personnel for the Arm y and Navy.
It is estimated that another billion will be required for training o f
people who will be inducted into the Arm y under the Selective
Service Act.
O f the 14 billion dollars to be spent on equipment, a large part
has already been appropriated, although a fairly significant amount
has only been authorized.
The spending o f this amount o f money w ill require something
like 4 years, due to the fact that some o f the equipment, particularly
313421°— 41----- 2
11
12
LABOR LAWS AND THEIR ADMINISTRATION,
19 40
fo r the Navy, cannot be built in less time than that, the time required
in building a battleship running in excess o f 2 years and frequently
3. However, the bulk will be spent within the coming 2 years.
The primary requirement o f a program such as ours is speed—
not because we want to use this equipment but because it is generally
believed, I think, that i f we have the equipment we will not have
to use it. In other words, those who are responsible fo r the program
are definitely o f the conviction that i f we can get the equipment
quickly enough and others know we have it, we will not have to use
it. Speed is o f the essence.
T o get speedy construction o f this equipment will involve the
maximum efficient use o f our existing resources. B y this we mean
not only plants, factories, and mines but also that other most essential
factor— labor.
Secondly, it will mean the large expansion o f the facilities that
at present are not sufficiently large to meet our needs. Those facili
ties have already been mapped out. W e know we do not have suffi
cient capacity in our airplane factories and we are building them
as fast as we can. W e know there is not sufficient capacity in our
airplane-engine factories and we are expanding in that direction.
W e know that every way on every shipyard in the United States
wThich can be used to build a naval vessel is filled right now and
that you cannot build another vessel until you build new ways.
W e are expanding our shipyards to that end.
In an airplane or tank or engine plant, or a shipyard, machine tools
are required and our present capacity in that industry is not sufficiently
large to meet our needs. There again expansion o f facilities is
required.
A s you all know, the President has reestablished the National D e
fense Council, consisting o f Cabinet members. A fter reestablishing
the Council, the President appointed an A dvisory Commission. Their
names are familiar to you.
Mr. Knudsen is responsible fo r production. It is his job to see that
contracts move as fast as they can, that difficulties are ironed out, that
specifications are simplified, and that everything is done to aid in
getting production up to the fastest possible tempo.
Mr. Stettinius is in charge o f raw materials. It is his job to be
sure sufficient raw materials are available.
The third man is in charge o f transportation. He is to see to it
that things can move from where they are to where they are needed.
That man is Mr. Budd.
The fourth man, Mr. Hillman, is in charge o f labor. This
division o f the defense program is vitally concerned with labor and
its relation to the program. It is concerned not only with labor
LABOR AND THE DEFENSE PROGRAM
13
standards, but also with a sufficient supply o f skilled, unskilled, and
semiskilled labor as it may be needed, where it may be needed, at the
time it may be needed.
The fifth Commissioner, Mr. Davis, represents the agricultural in
terests. A s you know there are certain agricultural products basic
to the program.
The sixth Commissioner, Mr. Henderson, is in charge o f prices.
W e all know it is necessary to have someone to watch the price level
so as to be sure the Government is getting its commodities at fair
prices and the consumer is being protected so that prices will not
rise and take away from him the real worth o f his earnings.
Finally, we come to the seventh Commissioner, Miss Elliott, who
represents the consumer and whose function it is to watch all the
aspects o f the consumption o f the civilian population. She will see
to it that the quality o f the things that you and I buy is maintained
and all o f our needs looked after and not forgotten in this push for
the maximum production o f Arm y and Navy requirements.
A s I see it, the problem facing us is how to maintain the standards
o f the American people as long as it is humanly possible and at the
same time meet the needs o f the Arm y and Navy in the most efficient
and expeditious way. That is the problem facing the American people
today.
Our industrial system is today operating at about 80 percent o f its
capacity. Personally, speaking not as an employee o f the Defense
Commission but rather as the Commissioner o f Labor Statistics, I feel
that the American people should be able to meet the needs o f national
defense and at the same time maintain their living standards.
There are idle resources in our economy which can be used without
penalizing the civilian population. I am convinced that can be done.
T o do it will require proper organization o f industry; the elimination
o f a lot o f waste which we know now exists; efficient production and
a lot o f thinking ahead trying to find out what we are going to need
3 and 6 and 12 months from now, so that our machines will not be
stalled because o f lack o f materials and men. I believe, i f we make up
our mind to do it, we can add enough to our national economy so
that we can produce all the things the Arm y and Navy needs and
at the same time enough to give all o f us efficient standards o f living—
without pulling in our belts.
Now, what have we done in the Division o f Labor in the Advisory
Commission to see that these ends are attained? Our first job is to
see to it that the defense program moves efficiently and with speed
and that sufficient labor is available to meet the production needs o f
the A rm y and the Navy. Our second job, and in a sense it is part
o f the first job, is to see to it that standards o f employment conform
14
LABOR LAWS AND THEIR ADMINISTRATION,
19 4 0
with the requirements o f efficiency. The more you see to it that good
standards o f employment are lived up to the surer you are to get what
you want, quickly and efficiently.
Consequently, we have taken upon ourselves the task o f seeing to it,
insofar as it can be done through the Defense Commission, that the
standards o f hours be such as will be conducive to maximum efficiency;
that wage rates, safe conditions o f employment, and equitable labor
relations be maintained on a level conducive to maximum efficiency
and consequently conducive to speeding up production o f the require
ments o f the A rm y and Navy.
In an interesting discussion o f the British experience and the
German experience,1 you were told how they found that they had
extended their hours too far and had to cut them down and by so
doing actually got more production per man-hour. Similarly, we
cannot expect workers to be efficient unless they are well fed, have
decent housing facilities, and are healthy— all o f which are related
to wage rates. A nd so it is with safety. Accidents not only stop
the work o f the injured worker but also o f entire departments. They
interfere with the efficiency o f production. They cause spoilage o f
goods. These factors o f lost time affect that ultimate end o f ex
peditions and efficient production.
Similarly, the worker who feels that his rights are being considered,
that he is being justly treated, in all probability will be more efficient
than the worker who feels otherwise— that he is not being given a
square deal.
A s far as the Labor Division o f the Defense Council is involved,
all o f these factors are its main concern, namely, that sufficient labor
be available in the quickest possible time.
In order to see to it that there is sufficient labor where it is needed,
when it is needed, and o f the quality needed, it has been necessary
to make estimates o f what the defense program is going to require.
In making these estimates we have gone to the Arm y and we have
asked them to tell us how many people they will need in arsenals.
W e have asked the Navy and Maritime Commission how many people
w ill be required in the production o f their ships. W e have also gone
to private industry as contracts are let, and made studies o f how
many people they will require in order to furnish requirements o f
national defense.
I want to give you some idea o f the nature o f the problem facing
us. The arsenals o f the United States— seven in the country— within
the next 12 months are going to need 3,000 machinists in addition to
their present labor force. They are on an 8-hour-shift basis, time
and a half for overtime, three shifts. They need 436 lens grinders,
1 See pp. 54 and 55.
LABOR AND THE DEFENSE PROGRAM
15
and I need not tell you there is not one in the United States today
who is unemployed.
The navy yards want 9,000 additional machinists, which, added to
the demand o f the A rm y, makes approximately 12,000 machinists. The
records o f the unions show that there are not that many machinists
unemployed in the United States today. The navy yards, all in all,
want 36,000 skilled workers.
In the airplane factories o f this country, to meet present schedules
o f the defense program will mean the employment o f approximately
350,000 people. The industry today employs around 80,000. The re
quirements fo r the defense program in this particular industry call
fo r about 100,000 skilled workers.
These are a few examples o f the types o f demand that are going
to be made upon the labor market o f this country. I think all o f
those demands can be met. I do not think we shall have any serious
problem i f we make up our minds we are going to solve it and start
working on it now.
Our first job then, as I said, is to determine what the requirements
will be. The second job is to time those requirements to find out when
these people will be needed, and to analyze them by occupation, so
that we may be sure the necessary skilled labor, by occupational groups,
w ill be available where they are needed, when they are needed.
W e have already completed our break-down in several industries
such as airplanes, construction, and ships. H aving found out when
these people will probably be needed and where they will probably be
needed, is to find out what our labor resources are. W hat is the
available supply o f labor ?
There are two reservoirs o f labor in the United States today. First,
there are the unemployed. Secondly, there are the skilled people who
are today employed at unskilled jobs. The first group has been
checked by an inventory made by the United States Employment
Service.
The second we are attempting to check through the cooperation o f
the trade-unions. W e have asked them to make an inventory not only
o f the unemployed but also o f the employed, to see i f the latter are
available fo r higher-skilled jobs than those at which they are actually
employed. W e find many skilled workers in the automobile industry
working at unskilled jobs. W e do not know how widespread this is.
W e do know that back in 1932 and 1933 there were numbers o f
skilled mechanics out o f work who took jobs wherever they could find
them, and that when business picked up in 1934 many o f them had
a chance to go back to their skilled jobs. However, they did not go
back to the old jobs. They had earned seniority rights. They knew
they would be among the last to be fired and among the first to be re
hired as employment fluctuated.
16
LABOR LAWS AND THEIR ADMINISTRATION,
19 4 0
W e all know many people in that position throughout the country.
W e know that thousands o f them are running gas stations, working as
clerks here and there, and doing a lot o f things which have no relation
ship to their ability and the skill fo r which they were trained in the
past. W e expect to identify these people through a labor survey. The
machinists, electrical workers, and automobile workers unions are now
in the midst o f a very careful survey o f all o f their employed and
unemployed members to see who among them have had experience
doing skilled work. W e expect to find a large supply o f people who
can be moved, we hope, as the defense program may require; and we
believe they will be glad to move voluntarily i f and when they are
convinced— and the rest o f the country is convinced— that they are
necessary for the defense program.
Complicated questions o f seniority rights will be raised, but I
do not believe that either the employers or the workers will fall
down on the job when their cooperation is requested.
A s far as the immediate future is concerned, I think that we can
find sufficient people to meet our peak needs in various skills. H ow
ever, we must look forw ard to the time when the unemployed have
been absorbed and to the time when the people in unskilled jobs have
moved to skilled jobs for which they are fitted. Looking forward
into the future requires estimating requirements and training people
now so that they will be available when we need them. (That is
the job Mr. Reeves will talk about in his paper.) It means, first,
apprentice training, which you heard discussed this morning.2
I think one thing will be made clear by Mr. Reeves’ paper— that
the Labor Division o f the Defense Commission is not an administra
tive agency. It does not run anything. Its job is to see to it that
somebody else gets things done. Even though its responsibility is
an adequate labor supply, it is not the intention o f the Commission,
or Mr. Hillman, or anybody in his organization, to go out and train
people or do the actual job o f making the people available. That
is the job o f the United States Employment Service, o f the United
States Department o f Labor Apprenticeship Division, o f the United
States Bureau o f Education, o f the W . P. A ., o f the C. C. C., and o f
the N. Y . A. These agencies have been doing the job for years. They
know the problem. The idea is to coordinate their activities to
see that they funnel toward the needs o f defense.
The job is a large one, as you can easily see. Y et i f it is going
to be successfully done the Defense Commission can not do it by
just deciding what is to be done and asking existing agencies to do it.
I f it is going to be done, it must be done with the cooperation o f
2 See p. 171.
LABOR AND THE DEFENSE PROGRAM
17
the people who are going to be affected by it; namely, the workers
and the employers. W ith that in view, one o f the first acts o f the
Labor Division was to create an advisory board made up o f tradeunion international presidents to discuss with them the problems o f
labor as seen by the man who does the job and to recommend policies.
That board consists o f six international presidents from the A . F.
o f L., six from the C. I. O., and four from the railroad brotherhoods.
They meet every other Friday to recommend what they feel should
be done toward securing the greatest efficiency in production and to
report back the effects o f such policies as have been adopted.
As a result o f that committee’s recommendations the National
Defense A dvisory Commission a week ago Sunday, September 1, issued
a statement o f labor policy. Some o f you may have seen it. It is
short and I am going to take the liberty to read it now. This is
the official policy o f the Defense Advisory Commission.
Primary among the objectives of the Advisory Commission to the Council of
National Defense is the increase in production of materials required by our
armed forces and the assurance of adequate future supply of such materials
with the least possible disturbance to production of supplies for the civilian
population. The scope of our present program entails bringing into production
many of our unused resources of agriculture, manufacturing, and man power.
This program can be used in the public interest as a vehicle to reduce unem
ployment and otherwise strengthen the human fiber of our Nation. In the
selection of plant locations for new production, in the interest of national
defense, great weight must be given to this factor.
In order that surplus and unemployed labor may be absorbed in the defense
program, all reasonable efforts should be made to avoid hours in excess of 40
per week. However, in emergencies or where the needs of the national defense
cannot otherwise be met, exceptions to this standard should be permitted. When
the requirements of the defense program make it necessary to work in excess of
these hours, or where work is required on Saturdays, Sundays, or holidays,
overtime should be paid in accordance with the local recognized practices.
All work carried on as part of the defense program should comply with
Federal statutory provisions affecting labor wherever such provisions are
applicable. This applies to the Walsh-Healey Act, Fair Labor Standards Act,
the National Labor Relations Act, etc. There should also be compliance with
State and local statutes affecting labor relations, hours of work, wages, work
men’s compensation, safety, sanitation, etc.
Adequate provisions should be made for the health and safety of employees.
As far as possible, the local employment or other agencies designated by the
United States Employment Service should be utilized.
Workers should not be discriminated against because of age, sex, race, or
color.
Adequate housing facilities should be made available for employees.
The Commission reaffirms the principles enunciated by the Chief of Ordnance
of the United States Army, during the World W ar, in his order of November 15,
1917, relative to the relation of labor standards to efficient production.
I shall not quote that, since Colonel Fleming mentions it in his
address. I will just read the last sentence o f that quotation:
18
LABOR LAW S AND THEIR ADMINISTRATION,
1940
But the pressing argument for maintaining industrial safeguards in the present
emergency is that they actually contribute to efficiency.
One should also mention other aspects o f the problems which affect
labor in the defense program. There is the question o f negotiated
bids versus competitive bids. A s you all know, until very recently
the law provided that virtually all purchases by the Federal Govern
ment, as is the case in most States, could be made only on a competitivebid basis. The lowest bidder got the order.
A s far as legal requirements were concerned, the United States G ov
ernment was interested in letting contracts to the lowest bidder who
was financially responsible. The sole criterion o f financial responsi
bility was ability to post a bond. It made no difference i f the con
tractor failed in the middle o f the contract. Nobody seemed to care i f
the goods were delivered or not.
The Congress, as well as the A rm y and Navy, now realize that i f we
are going to get goods quickly and efficiently we shall have to use
other criteria than merely the lowest bidder. Authority has, there
fore, been put into the defense appropriations to negotiate contracts;
that is, to take other criteria into consideration— for example, is the
employer in a community where there is a lot o f unemployment; where
there are sufficient plant facilities; and where there will be sufficient
housing? Or will he have to build a new plant and bring in people
from out o f town and thereby create housing congestion? In other
words, we feel certain criteria should be considered in placing G ov
ernment orders so that there will be the greatest absorption o f the
unemployed possible in the most efficient manner and without unrea
sonably high costs.
There is also the question o f industrial relations. The Labor D ivi
sion o f the Defense Council is definitely interested in labor relations.
A s I have said, labor relations are intimately tied up with productive
capacity and efficiency on the part o f labor, and the Labor Division is
working toward the end that favorable and amicable labor conditions
prevail in defense plants.
This is another instance where we use only the existing services o f
the Government. In the matter o f threatened labor disputes the
United States Bureau o f Conciliation does the work. It is its job.
Only when the Conciliation Bureau says, “ W e don’t seem to be able
to get these people together. Can you help ?” does the Defense Com
mission come into the picture. Again, may I say that with the co
operation o f the industrial groups on the Commission we have not
failed in a single instance to get both parties together to settle their
disputes around the table. In one instance we had to recommend arbi
tration. W hen we recommended that, both sides changed their minds
and decided to come to an agreement.
LABOR AND THE DEFENSE PROGRAM
19
I f one were to sum up the picture, I think it would run something
like this. The job we have to do is to meet the needs o f the Arm y and
Navy and at the same time meet the needs o f the civilian population
insofar as it can be done without interfering with the defense program.
In concrete physical terms this means tanks, airplanes, ships, tractors,
and a thousand and one other things. Those I am convinced we can
produce and will produce. But what good are tanks? W hat good
are ships ? W hat good are airplanes without a proper morale in our
population, a morale that leads us to defend something we think is
worth while defending?
In producing our ships and tanks, let us never forget that the morale
o f our population is paramount. Let us never lose sight o f the im
portance o f a loyal people with a stake in democracy, and who think
enough o f their stake in freedom to be willing to make the sacrifices
necessary to maintain that thing we call democracy.
I think we, as a democratic people, can and will succeed in our
defense program i f we remember at all times that the rank and file
o f our people must want to protect our institutions. They must
at all times know what is being done and have a hand in doing what
is being done.
I think a democratic people, in a democratic manner, can do what
totalitarian countries have been able to do only by lowering the
standards o f living o f their peoples, and suppressing their rights and
their freedom. I think we can do the job without lowering our stand
ards o f living. I think we can prove to the world that ours is the
best way o f doing the job to be done, while at the same time we can
maintain those rights and privileges that democracies are fighting
to preserve.
Meeting the Defense Needs for Labor
By
F loyd
W . R e e v e s , E xecu tive Assistant for Labor Supply, Advisory
Commission to the Council on National D efense
[Read by A. J. Sarre]
T o all o f us who are interested both in the defense o f our country
and in the welfare o f labor, the defense program appears in two
aspects. First, as a matter o f military preparedness, where can we
get the workers needed fo r the manufacture o f tanks, airplanes, and
ships? Second, from the point o f view o f labor, how soon can em
ployment be provided for the millions who have long been suffering
from the depression ?
Workers for defense production and total national preparedness
will be needed in the beginning stages by thousands, then, as the pro
gram develops, by hundreds o f thousands, and later by millions. So
20
LABOR LAWS AND THEIR ADMINISTRATION, 1940
long as the present chaotic world situation continues, we are faced
with the need for a vast training program. Military training is but
one part of this total program, for every man in our military forces
must be backed by many others in the field of supply, in transporta
tion, in manufacture, in the production of machine tools, and in pro
ducing raw materials. Along with the military effort is the funda
mental job of protecting the health and welfare of this Nation, and
of maintaining and extending all of the civilian services, the resources,
and the morals of the whole population.
In tackling this task of training for employment in a rapidly ex
panding national defense program, the Advisory Commission to the
Council of National Defense has as one of its duties the coordination
of public and private agencies for locating and training workers.
No single line of action will do the job; we have to advance along
many lines at the same time. It is important that use be made of all
existing reservoirs of labor, as well as that new reservoirs be created
through training.
One reservoir of labor will consist of men and women who will be
trained in industry itself. Obviously this is the most efficient and
expeditious method of supplying skilled workers. As shortages de
velop in any area, the training facilities in that area should be brought
into play so that they will be ready to supply the deficiency. In
working out the plant training program, a committee was formed
under the chairmanship of Mr. Owen D. Young, with equal repre
sentation of labor and employers, to promote an extension of appren
ticeship and plant training programs. The Federal Committee on
Apprentice Training of the Department of Labor was authorized by
Congress on August 16, 1937. This committee promotes the estab
lishment of a systematic apprenticeship program based on a written
agreement between the apprentice and the individual plant or em
ployer. The apprenticeship program is being expanded to meet
future demands for highly skilled workers. An encouraging indica
tion of the spirit in which the labor supply and training program is
being approached is the fact that the committee of employer and
labor representatives, including in the latter leaders of both the
A. F. of L. and the C. I. O. unions, was unanimous in its support of the
development of a training program in industry.
A second labor reservoir will consist of those now enrolled in voca
tional schools. It is made up of both unemployed men taking re
fresher courses and employed men supplementing their plant training.
O f major importance is the finding and bringing in of the skilled
workers who are unemployed, who are in jobs unrelated to their past
training, or who have been obliged to accept employment at work
below their level of skill. For this tremendous responsibility of
LABOR AND THE DEFENSE PROGRAM
21
finding these unemployed and employed workers, wTe are fortunate in
having the United States Employment Service already established
with some 1,500 offices throughout the country. This service has made
an inventory of the more than 5 million unemployed workers regis
tered in the local offices, showing their skill and occupational expe
riences and where they are located. The labor unions are also
submitting lists of unemployed members, as a means of locating those
who may have failed to register with the Employment Service.
Through the unions and by a campaign of publicity, we are getting
lists of skilled workers now employed on unrelated and lesser-skilled
work, so that as quickly as possible these men may be given employ
ment in their skilled trade or at their proper level of skill and pay.
By these methods we are locating enough men to supply the present
demand for labor in almost all lines of skilled work; during these
first weeks of the expanding defense effort, we are sure that not many
skilled workers will fail to learn of the opportunities that are now
being opened up.
Many unemployed workers have had experience in occupations that
do not fit into the defense program, but their skills are such that a
short period of special training will prepare them for work essential
to national defense. Others may have lost some of their skill through
long unemployment or by employment in other lines of work. For
these men the United States Office of Education, through the State
and local public trade-school facilities, is offering special concentrated
job-training courses and refresher courses. Enrollment in these courses
is for workers on W . P. A. as well as other unemployed workers regis
tered with the employment service offices, who are chosen for their
ability to profit by intensive training. They are referred to the local
vocational school officials by the local W . P. A. and employment serv
ice office for assignment to the refresher and intensive job-training
courses which are being given in the locality. The vocational school
authorities are finally responsible for the selection of the workers to
be assigned to the classes. The W . P. A. workers are paid their regular
W . P. A. wage while in training. The vocational schools are also pro
viding supplementary courses to improve the skill and knowledge of
workers in industry, thus preparing them for promotion. These em
ployed workers are enrolled in the supplementary classes upon the en
dorsement of employers and representatives of their local unions.
There are several hundred local advisory committees made up of rep
resentatives of employers and labor unions which assist the school
officials in planning the defense training program.
When last reported there were 95,000 enrolled in training courses in
403 cities. Of this number 60,000 were in preemployment refresher
courses and 30,000 were in supplementary courses. After only 7 weeks
22
LABOR LAWS AND THEIR ADMINISTRATION, 1940
of instruction, 6,000 placements of trainees had been made into em
ployment in defense industries.
So far as possible, the Employment Service supplies requests from
local plants for workers by referring to the employers men who are
qualified for the particular job opening. When the supply of available
labor in a locality is exhausted, the local employment service office
sends out a call for the needed workers first in the State and then in
neighboring States. Only as a last resort are demands sent to Wash
ington to make a national search for men with certain special skills.
Although the first emphasis is placed on the training and retraining
of older workers who can be prepared for immediate employment
through short concentrated training courses, the younger ones are also
receiving consideration in the plans for training. With the growing
demand for labor, more and more young workers will be needed.
A third reservoir will consist of young men who are being initially
trained in specific tasks. There are now in operation 1,053 public
trade schools whose courses have been approved for Federal financial
aid under existing vocational education acts. This regular program
of day trade-preparatory classes and of evening trade-extension classes
accommodates in all the branches of vocational education an enrollment
of over 2,000,000. Last year in the regular trade and industrial educa
tion courses, there was an enrollment of over 715,000. Most of these
trade and industrial students are between 16 and 20 years of age. This
group of young people who are taking preemployment trade-training
courses constitute a great source of labor supply for the future needs
of defense preparation.
Other reservoirs consist of the National Youth Administration and
the Civilian Conservation Corps. For these young people who are
not in school or otherwise gainfully occupied, there should be oppor
tunities for securing sound work experience with adequate related
instruction. For young people, a useful occupation is especially
necessary, as it is the major way whereby they become and feel them
selves to be a vital, contributing part of society or of national
preparedness.
The fundamental value of work experience and training for young
people makes the C. C. C. and the N. Y. A. significant, since these
two youth-serving agencies have as their principal objective pro
viding useful work to boys and girls who have no jobs and who are
out of school. To be sure, the expansion of the military service and
of defense industries will take up a large number of young people,
especially those graduating this year from trade schools, technical
colleges, and apprenticeship courses. There are, however, some 4
million young people unemployed, and possibly as many more who
are partially employed on farms, in small towns, and in our cities,
LABOR AND THE DEFENSE PROGRAM
23
or, in other words, who are marking time. The potential skills of
these young people should be made available to the Nation. Accordingly, there is a work of great responsibility to be performed by the
youth-serving agencies.
The C. C. C. provides excellent experience for boys who will be
employed in outdoor work. The C. C. C. can continue, with the gen
eral work experience and job training obtained through conservation
work, as a means of affording young people the rudiments of occupa
tional experience and at the same time raising the morale of the young
people by offering them opportunities for participation in the national
program. The camps of 200 enrollees each offer many forms of work
experience of great value for either civilian or military service, such
as truck and tractor operation, camp sanitation, cooking and baking,
road and bridge building, and servicing and repair of automotive
machinery. Some of the value of C. C. C. experience in the past has
been lost because of the difficulty of finding jobs during the depres
sion, a difficulty that is expected to be reduced by the preparedness
program and with the increasing opportunities for employment. The
actual productive work done by the C. C. C. can be counted as a clear
gain to the Nation, and in many cases those who have been enrolled
in the C. C. C. have found work at higher wages than they had been
able to get before enrollment.
The N. Y . A. has two* chief functions, one to keep students from
having to leave school because of lack of money by giving them
remuneration for work performed under the supervision of school
officials; the other to give part-time employment to young people
who are out of school and unemployed. As the President has stated,
the national defense will not be promoted, at this state, if young people
break off their education either to enlist in the armed forces or for
any other reason, since the greatest demand will be for well-trained
people to handle the complicated problems of our modem world. The
N. Y . A. student work program is valuable in equalizing educational
opportunity for some 375,000 needy school and college students who
otherwise probably would be unable to continue their education.
For young people not in school, the N. Y. A. offers a program of
part-time work on projects of value to the community. There are
230,000 young people working on local community projects, and an
other 30,000 in resident centers. These resident projects are primarily
for young people in rural areas, where transportation becomes a pro
hibiting factor in setting up a local work project. By assembling a
large group in one place, the young N. Y . A. workers are provided
an opportunity for supervised work experience. The chief function
of the N. Y . A. work is not to train skilled workers, but to provide
elementary occupational experience, and to inculcate sound habits
24
LABOR LAWS AND THEIR ADMINISTRATION,
1940
of work, while at the same time providing useful community services
and improvements. N. Y. A. workers are rotated from one job to an
other, enabling them to discover the type of work they are best fitted
for. The high value of this work experience is indicated by the fact
that more than 7 percent of the N. Y . A. enrollees— 55,000 in the last
3 months— are leaving each month to accept jobs in private industry,
even now in the early stages of the defense program.
An agreement between the N. Y. A. and the Office of Education
makes provision for classes in vocational schools for N. Y. A. workers,
so that they can receive special training while they are working on
N. Y. A. projects. Through a similar arrangement, some of the
C. C. C. enrollees will have regular courses in the nearest vocational
school, substituting the school training for a part of their regular
work schedule. The N. Y. A. is the one youth agency which employs
girls as well as boys. Woman workers may ultimately be needed in
large numbers for defense industries, in manufacturing plants, clerical
and other subprofessional positions. The N. Y. A. is giving girls work
experience in all those fields as well as in the fields of public health
service, institutional work, domestic and home service.
In all the Government programs for national defense, it is planned
to make special provision for adequate health care, since it is obvious
that efficiency depends equally on health as well as on skill. The
beneficial effects of C. C. C. experience on the health and stamina of
the boys are well known. It is expected that funds will be available
for extending health services to the participants in other Government
programs.
The most serious bottleneck in labor supply during the next few
months appears to be in the highly skilled trades— toolmakers, lens
grinders, instrument makers, etc., and in certain engineering lines.
Large numbers of aeronautical engineers, and draftsmen, airport engi
neers, meteorologists, naval architects, motor designers, and other
technicians of profeasional and subprofessional grade will be needed
before operations can be fully expanded. Arrangements are being
made with technical colleges, that have suitable facilities, to give
intensive courses of a few weeks or months, to engineering graduates
and other qualified persons, in the special lines of work needed for
defense.
A number of special features of the training program are worthy
of mention. An effort is being made to provide access to vocational
schools for rural young people, many thousands of whom are marking
time on the farm, out of easy reach of the opportunities now opening
up in industry. Special provision is also being made to insure that
the training and employment of Negroes shall not be neglected, and
that the defense program shall not discriminatelagainst nor exclude any
LABOR AND THE DEFENSE PROGRAM
25
American citizen because of race. It is of prime importance, from
every standpoint, to support the morale of all sections of the popula
tion by including every American as an active participant in the effort
to protect our institutions against aggression.
It is worth noting that the problems of mobilization in this crisis
are far different from those that the Government had to face in
1917. W e do not have to improvise a national employment service
but can start with the one we have. We already have passed through
many of the difficulties of establishing the principle of collective
bargaining, so that the problems of labor relations are more easily
solved than in the past. W e already have a well-developed voca
tional-school system, the C. C. C., the N. Y. A., needing only to be
coordinated, enlarged, and adapted to the new conditions of the de
fense crisis. Our public health service is far advanced as compared
with that of 1917. In the interior of the country, much has been
done to improve sanitary conditions, to develop water power, to pro
vide paved highways and airports, all of which will set us ahead on
our defense program. Our problems, therefore, are not so much the
invention of new defense agencies as the expansion and coordination
of agencies already well established.
The Advisory Commission to the Council of National Defense is,
of course, immediately concerned in the total organization of the
defense of the country. Mr. Hillman is the commissioner dealing
with labor. This entails the coordination of all Government agencies
concerned with labor which have a relationship to the national
defense program. The agencies with which we are working are
the Social Security Board, the National Youth Administration, the
Civilian Conservation Corps, the United States Office of Education,
the Work Projects Administration, the Committee on Apprentice
ship, the Bureau of Labor Statistics, the Conciliation Division of
the Department of Labor, the Veterans’ Administration, the Civil
Service Commission, the Civil Aeronautics Authority, and the War
and Navy Departments. Each one of these agencies has given whole
hearted assistance and cooperation in working out the immediate
and future problems in connection with the necessary labor for an
expanding defense program.
As you are well aware, the whole defense program necessarily
takes time to develop to full activity. I f the emergency continues
for another year, there may still be some scarcity of workers in
certain lines of skill, even though there may still remain some work
ers who are still unemployed. The most efficient and rapid methods
of training cannot be fully utilized for lack of sufficient personnel
qualified in their use, for the most modern methods in industry are
confined to a comparatively few progressive corporations. Just as
26
LABOR LAWS AND THEIR ADMINISTRATION,
1940
full production has to await the production and installation of ma
chine tools, full training also depends on training and placing a
large number of instructors, as well as on the procurement of ma
chinery and equipment. Nevertheless, we believe that the organi
zation as now set up will prove effective in increasing the utilization
of the equipment and personnel available, and that an impressive
number of workers will be recruited and qualified for defense work
during the coming months.
The fact must be kept in mind, as a background for all the pro
curement and training program, that full employment of the popu
lation is in itself an essential element in the national defense. Ma
terial production is only one side of national security. Two other
factors— morale and general well-being— are equally vital. Both
morale and general well-being can be assured only by giving every
able-bodied worker a regular and self-respecting job to do, if not on
military preparedness, then on internal improvements or on training
for gainful occupations.
Discussion
[Mr. Sarre, in the course of reading Mr. Reeves’ paper, made the
following remarks:]
Mr. S arre (Washington, D. C.). As regards the subject of re
fresher and supplementary courses, I have just read the statement
that the final selection of trainees to be assigned to those courses was
made by the school officials, and the workers were referred to them
by the employment service offices and by the W . P. A. offices. The
thing I am interested in is, how many commissioners in the 38 States
represented here today are personally acquainted with the director of
vocational education in their States. How many commissioners here
are personally acquainted with the managers of the civil-service
districts in which their States are located? I might put the same
question to those of you who represent organized labor groups. How
many of you know the representative of your civil-service commis
sion? How many of you know personally— I imagine most of you
do— the director of vocational education and the State administrator
of W . P. A. in your State? Most of you, of course, know the
State employment office director.
Actually, we may meet in Washington, we may discuss, confer, and
do all those things that go with coordination, but finally and in the
last analysis the job must be done in the State, and it must be done
by individuals who have a mind to work together and who will work
together because they know each other.
I cannot stress too much that the first emphasis should be placed
on the training and retraining of older workers, because the first
LABOR AND THE DEFENSE PROGRAM
27
emphasis on this whole program as it went from the President to
Congress was that the older workers, the men and women on the em
ployment service register and the men and women on W . P. A ., are
those who must be given first consideration. It would be most un
fortunate, it seems to me, if, after this defense program has gone so
far, or after we have invested the billions of dollars that have been
made available through the Congress, we were to find ourselves with
large unemployment registers and relief rolls. Therefore, it is essen
tial somehow or other that we keep our sight properly leveled on the
problem of the older worker.
Chairman M iller. I am not sure whether Mr. Watt comes here as
a member of the International Association of Governmental Labor
Officials because of his long and valuable work as the United States
representative in the International Labor Office or whether he comes
only under his title as legislative representative of the American
Federation of Labor. In any case, we welcome him and ask him to
open the discussion.
Mr. W a t t (Washington, D. C.). To begin with, I agree with Dr.
Lubin that when we talk about statistics not. only have we a hard
job in pronouncing the word but we have a harder job understanding
what the economists usually mean. W e have difficulty in finding two
of them who agree on the past, present, or future; and I have come
to the conclusion that it is impossible to get two economists to agree
on a post mortem case. On the other hand, I wholeheartedly agree
with Dr. Lubin that there should be no retreat from our present
standards and that we should aim to improve them as rapidly as
possible but only as rapidly as our national economy permits.
Labor’s viewpoint on the defense program might occupy a speaker
a full minute or a full day. Realizing that the latter would exhaust
both this audience and this speaker, let me try to condense into a
brief summary what I believe to be the viewpoint of American labor
on the defense program for America and the Americas.
The officers and members of the American Federation of Labor
want full defense against attack upon American people, American
possessions, and American institutions. We want that defense against
possible assault from without by land, sea, or air, and we want that
defense against subversion or sabotage from within, whether the
agency wears the swastika of the Nazis, the black shirt of the Fascist,
or the hammer and sickle of the Communists. We want that defense
built so strong and so soon that it will defend us by its strength so
obviously that no one will dare try to test its strength.
To make that defense strong and enduring it must be a democratic
structure operated for the people by the people’s representatives in
313421°— 11---- 3
28
LABOR LAWS AND THEIR ADMINISTRATION,
1940
the economic, social, and political fields. Our defense must consist
not only of airplanes, tanks, and warships, but of institutions and
procedures which will bring forth the utmost devotion and loyalty of
the whole people.
It must live with fidelity to the principles for which it is dedicated
and never forsake the social, economic, and political procedures
which are essential to the maintenance of these principles.
Democratic organization requires authority and responsibility of
the group through representatives of their own choosing. Consul
tation in the planning of policy is as essential as agreement in the
final program.
The more labor unions can participate in the making of policy,
the more they can help in the accomplishment of the purpose of the
policy. Full agreement of the labor representatives should be an
essential before the adoption of any policy of vital concern to workers
and before the policy is undertaken.
Labor representation should extend from Washington right down
to the plant unit, or rather should stem up from the plant unit to
Washington.
In Great Britain today the amazing unity and determination and
accomplishment of the British people since the invasion of the low
countries has been due in large part to the confidence created by the
full partnership of labor representation in the undertaking. This
partnership is not a formal, negotiating, artificial relationship, but
a relationship which has become a driving force because labor was
given its full share of participation in authority as well as respon
sibility.
I submit that the British people showed their mastery of dynamic
democracy in evolving a self-discipline through representative leader
ship. When Ernest Bevin acts as leader of the Labor Department
alongside Morrisson, Attlee, and others, he supplies a driving force
of a democracy determined to spare no ounce of effort needed for
successful defense.
He is not a subordinate of military bureaucrats. He is not a “yes,
sir,” partner under a big business executive. He is the man who
protects the interests of labor by assuring them of defense from
without through energetic and constructive cooperation in the making
of that defense. But the reason he succeeds is not merely his energy
nor his strength. It lies in the foundation of democratic processes
from the bottom up.
A perfect illustration is to be found in the picture of defense pre
cautions of the great industrial plants where maximum production
must be accomplished despite air raids. In the sense of duty and
fairness which the best of British traditions involves, the workers
LABOR AND THE DEFENSE PROGRAM
29
in those plants elect an air-raid sentry who shares with management’s
representative the authority and responsibility of deciding when the
safety of the workers requires them to leave their benches and duck
into air-raid shelters.
In other words, the essence of collective bargaining exists even dur
ing air raids. There is a job to be done and there are lives to be
protected. Labor and management decide together quickly and effi
ciently when the bombs are getting so close that the job must be
suspended, so that the workers may protect their lives and be able to
resume their jobs when the menace moves away.
Here in our country the opportunities for a similar unity exist.
The fact that the United States is a representative democracy would
in itself remove one of the major obstacles to labor confidence. But
I am afraid there is real danger of our failing to take the trouble of
creating the network of labor representation from the bottom up to
the top.
In contrast with Britain, where the trade-union movement had
a complete network up to but not including the cabinet, here in the
United States our trade-unions have no adequate representation,
authority, or responsibility outside of Washington, with the exception
of industries where the closed shop or very strong labor organization
affords a basis for acceptance or veto on policies after they have been
formulated.
There would be a greater measure of industrial democracy if we
had local, State, and national industry councils, in which the elected
representatives of the workers involved could sit with the employer
representatives in developing with the Government representatives
the blueprints of our defense program and the program itself.
I f we as a Nation believe in democracy as a way of life, democratic
institutions are necessary to that way of life, whatever responsibility
or crisis may confront the Nation. After all, the external forms of
government mean nothing. Democracy does not live in the dusty
paragraphs of legal volumes or in the ghostlike taboos of traditional
fiction. Democratic procedure has power" because it mobilizes the
minds and wills of free citizens, making them responsible equally
with their governments.
The American Federation of Labor has rallied loyally to the defense
of our Nation, but it insists upon the full representation and partici
pation in the development and operation of the defense program.
This is particularly true in view of developments in apprenticeship
training, the semiskilled production training, the dilution of skilled
trades, and the speed-up or stretch-out which may be involved soon
in the defense program.
30
LABOR LAWS AND THEIR ADMINISTRATION, 1940
I have found absolute confusion in the minds of workers through
out the country in what the National Advisory Defense Commission is
trying to do about training workers for defense work. This confusion
grows out of a failure to understand and follow the fundamentals un
derlying a work-training program.
Labor unions are committed to the fundamental principle that
work training should be done on the job, with the tools to be used
under actual work conditions, and the training given by a real worker
with practical experience.
Control over work training in a specific plant should be in the hands
of a joint committee representing equally management and workers.
This committee should be responsible for the supervision of training
of apprentices, machine operators, and other production workers.
The related and supplementary vocational education which helps
trainees better to understand the job and to become good citizens should
be the responsibility of the educators and the schools. The schools
and educators particularly need advisory representative committees
of management and labor actually participating in their planning
and administrative work.
Responsibility for training workers as employed persons can best be
assumed and administered by representative groups in conjunction
with State departments of labor. The United States Department of
Labor should be the clearing agency where general principles covering
wages, hours of work, length of training period, proportion of appren
tices to needs of industry, shortage or oversupply of skilled workers,
dilution or use of substitute labor, and other questions should be
determined.
Let me say that unless the United States Department of Labor,
the State departments of labor, and the American labor movement
wake up and stop being so smug and contented, the educators are
going to walk away with this whole program of training for de
fense. As one worker I have no hesitation in saying that my respect
for our system of education and for educators on the basis of the
job they have done is not so high that I am willing to turn over our
defense program to them. I will take my chances with the De
partment of Labor.
I say quite frankly I agree with what my friend Dr. Lubin said
about going to the Army and Navy. O f course, that is where we
ought to go. They are the people who understand our military and
naval needs. But why should we go to the educators to discuss the
training needs of workers when we have a democracy, a democracy
of workers and employers, in this Nation who should be used and
who should be given a stake and equity and responsibility in the
defense of this Nation?
LABOR AND THE DEFENSE PROGRAM
31
Wherever personal welfare is involved, individuals have a right
to representatives of their own choosing, possible only through or
ganizations controlled by their members. Representation exists only
when the group concerned designates its spokesman for the specific
task to be done.
The possibility of damaging the labor movement by manipulation
of the defense program is not so imaginary as some well-meaning
patriots may believe. President Green and Secretary Meany of the
American Federation of Labor saw the dangers, and their forth
right appeal to the millions of American workers to count the preser
vation of labor’s gains as one of the bulwarks of national defense
was one of the most courageous statements yet made.
I have been in many parts of the Nation recently, and there is
no hesitation on the part of the outstanding men in industry when
discussing the changes necessary as they see it in the Federal wage
and hour law, and other labor legislation. I can sit rather patiently
and hear them argue, the points in favor of changing some of the
other legislation, but to be quite frank about it, whether it is an
employer, a worker, an economist, or an educator, I think he has
a lot of crust to argue for wages less than $12 a week.
In war as well as in peace, labor makes and uses the tools of
industry, and carries on all the processes that make industries going
concerns. Labor has accumulated experience that enables it to dis
tinguish between the practical and the impractical, the efficient and
the wasteful. Labor’s experience and counsel are a safeguard against
inefficient and wasteful management, as well as against attempts to
prevent balanced distribution of the gains from joint production.
Full and constant participation by freely chosen representatives
in the economic and social life of our country is as fundamental a func
tion in a representative democracy as our constitutional procedure of
representative government.
While in each case they are necessary means to an end, they are
likewise an objective in themselves. To defend democracy, we must
have democracy in action, and to defend democracy we must make
sure that the democracy is fulfilling the purposes and functions which
make it the ideal we seek to promote. It must live as a motivating
force and a functioning reality which makes the lives of all of us
happier and more secure.
Workers will fight to protect in every way the magnificent heritage
which is ours. They will fight to keep it free from unfair privilege or
unjust discrimination. Working together under a rugged democratic
system of representation, we can protect our freedom as workers and
our liberties as citizens from a challenge from foreign lands which
faces every American businessman as much as the poorest worker.
32
LABOR LAWS AND THEIR ADMINISTRATION,
1940
Working together we can protect the American standards and insti
tutions from any sabotage or assault, and I know in my heart that
we will.
Let me say if I have appeared critical, and I presume that was why
I was asked to come here, there is a method in my madness. I have
seen during the past 5 years the consequences and the tragedy of the
failure of the peoples of other lands. I have said often, and I say
it here again today, that we have a rich inheritance. It is the richest
inheritance ever enjoyed by any people. Let us not squander that
inheritance.
Mr. D in w id d ie (New York). We have had able statements by Dr.
Lubin and by Colonel Fleming, and now by Mr. Watt, on the need
for preservation of labor standards and their importance to defense.
I should like to ask just one question along that line. I have heard
that there is an organized movement to break down the standards for
apprenticeship training, which have been so carefully built up over
recent years, on the ground that breaking down such standards is a
contribution to national defense.
Some of us who have fought that fight against specious pleas to
permit exploitation, pure and simple, under the guise of increasing
efficiency, are very eager to see that we preserve sound safeguards,
to encourage real apprenticeship, and to prohibit abuses. W e do not
want fake systems whereby employers can discharge employees of
20 years’ standing and experience, telling them they can come back
at lower wages if they will be apprentices, or whereby workers can
be held down to a low wage scale when they are getting no bona fide
training at all. I wish Mr. Sarre would tell us just what is being
done to preserve apprenticeship standards.
Mr. S aree. A s regards the National Defense Advisory Commission,
the Labor Supply Division has been concerned in its efforts to help
meet these needs that have been pointed out by Dr. Lubin. There
has never been a case where we have lost sight of the importance of
standards. There is no question, as I see it, why in the development
of a plant-training course we should sacrifice what has been so ably
done by the apprenticeship committee. There probably will be, as
I have encountered it already, some misunderstanding due to a rather
loose use of terminology.
I placed unusual emphasis on the word “refresher” because when
Congress wrote the enabling legislation it included the word “re
fresher,” and it further said that that work should be done for
individuals who are on the public employment registers. The Presi
dent and Congress, I feel, realized the essential importance of bring
ing back, through refresher courses, those people who were already
skilled. By no stretch of the imagination, as I see it, can you develop
LABOR AND THE DEFENSE PROGRAM
33
the use of refresher courses for anybody except those individuals
who are skilled and who, for some reason or other, may have found
their way into other occupations.
In discussions with Mr. Dooley, who has taken over the work
which was set up by Mr. Young and his committee, I find that he has
recognized the essential importance of the apprenticeship program
and, as a matter of fact, I think he has been working on this with
Mrs. Beyer and Mr. Patterson in an attempt to further that program
as an integral part of any plant-training program that might be
evolved.
I come back to the comment just made by the previous speaker,
that it was essential that this spirit come from the States to Wash
ington rather than from Washington to the States. I attempted to
point that out before by asking a question of those who were here
concerning their contacts in the respective States— but I did not ask
for the answer— and I also mentioned these committees that are made
up of a certain number of employer and employee representatives.
Somehow or other, as I see it, there is a job that the folks in the
State or States have to do, and that is to see that these committees
function. I f they are just window dressing and are not performing,
why not put in some new members. I think that is one way to
meet the problem of maintaining community contacts.
Again let me say that in the Commission our Labor Supply Divi
sion has never given consideration to a plan that fails to provide for
the maintenance of standards and that does not include all the im
portant things you have just talked about.
Miss S c h n e id e r m a n (New York). What Mr. Sarre and Mr. Dinwiddie have said is true, but I believe they failed to tell the audience
that in New York State, for instance, there is a movement on foot,
emanating from the department of education, to cut the work stand
ards of young people. The demand is that they be exempt from
unemployment insurance; that they be exempt from minimum wages,
from the Federal wage and hour law, and from the compensation
law. O f course, if that happens, I do not know what the outcome
will be. That movement is emanating from the department of edu
cation, and it is quite likely that in the next legislative session in
New York State amendments to the existing laws will be introduced
to put this program into effect.
It seems to me that the reason the Federal program for apprentice
ship training is so important is because of our experience during the
last war. We had rationalization— simplification of industry. Men
and women were taken in to perform semiskilled operations. While
that expedited production we know that in the end these hundreds
of thousands of men and women knew nothing about their jobs and
34
LABOR LAWS AND THEIR ADMINISTRATION, 1940
that they were just as unskilled and helpless as when they started.
H ad work been offered them in any o f the skilled industries, they
would not have known how to go about the job. Therefore, while
the training period may be longer under the Federal apprenticeship
training program, we will know that the boys and girls who undertake
learning on the job will be better equipped.
W e all know that few vocational schools are equipped with the
latest machinery that is being used in industry. Someone in the
vocational training service told me that in one school watchmaking
was being taught by a machinist, and the tools used were machine
tools. W e all know that watchmaking is a delicate process for
which you have to have special tools, and that watchmaking could not
possibly be handled in the manner in which the training was given.
In this particular school the boys and girls were wasting their time.
I do hope the United States Office o f Education will take a stand on
this movement that is starting in New Y ork because we all know i f it
succeeds in New Y ork it will spread throughout the country. It is
a very vicious attitude that the gentleman in this particular State is
taking, and I think he ought to be told by the United States Office o f
Education— because after all the funds do come partially from the
United States Office o f Education— that it will not stand for any such
maneuvering.
Mr. L u b i n . I can say, without any hesitation at all, as far as the
coordinating activities o f the Defense Commission are concerned ( and
I think that Mr. Sarre will agree with m e), we would rather that
there be no training at all i f the price o f training is to be to exempt
people who are being trained from the workmen’s compensation law
or any other laws set up to protect labor. H ow absurd to say that a
person who wants to get an education must forego the right o f being
protected against an accident.
In its relationship with the educational authorities both in the
States and in Washington, as far as the Labor Division o f the
National Defense Commission is concerned, I am quite sure that
you can expect every possible aid in fighting any attempt to make
the price o f training the sacrifice o f the things that for a generation
everybody has held essential to decent industrial conditions.
Chairman M il l er . Even in full recognition o f the concern and the
understanding which we know exists in the Labor Division, and
in the Commission also, in Washington, I think we need to face
the other aspect o f this matter which Mr. W att brought u p; that is,
that the understanding needs to extend far beyond Washington. It
needs to extend to all places where the question o f training, and o f
the possibilities o f spending the money which has been provided
fo r this training program, is an active and vital one. It needs
LABOR AND THE DEFENSE PROGRAM
35
to tie up local responsibilities with Federal ones— for reasons sup
plied by Miss Schneiderman, who has explained to you what is
happening in New York. T o tie in with the purpose, the standards,
and the intent o f those who are responsible at a Federal level is a
job that we, as State officials, not only are particularly cognizant o f
but also have particular responsibilities for.
Mr. D u r k i n (Illin ois). I believe this is a very /serious matter—
serious insofar as the ultimate success o f the program for defense
is concerned.
I wonder, when we consider the shortage, or claimed shortage,
o f skilled men, whether any thought has been given to the manner in
which goods and machinery and equipment are to be produced.
Is this production going to be carried on in the manner which
industry has been using for the last 20 years, mass production, or is
it going to be somewhat altered because our aviation plants are not
ready at this time for mass production and some of our other plants
are in the same situation? I f we are going to train people, that is
one o f the things that it is absolutely necessary to know— what
system we are to use in producing the things needed for defense.
I know everyone is anxious to do his part. When the people
representing the State department o f education went to Washington,
they were willing and ready to throw open all the schools fo r train
ing, without having any knowledge o f what they were to give
training in. W e had governors jum ping the gun and appointing
defense committees. W e find in the State o f California that two
defense committees were appointed, one by the governor and one by
the legislature, and neither o f them were able to point out to these
State defense committees what their duties were or what tasks they
were to perform.
A s I have just stated, everyone wants to do his part. However,
as things stand now, nobody know/s where to go to get the inform a
tion, and as a result there is no coordination whatever at the State
levels. It is high time that something was done.
First, we should find out what the shortages are, or what they are
claimed to be, and then we should find out i f we are going to need
those highly trained people some claim we need. W e find that the
Civil Service Commissioner o f the Federal Government is requisition
ing specifications that were probably pulled down from the archives
and which had been there since the last war. They require 4 years o f
apprenticeship training. Now, you can ask the officials o f any ma
chinist organization in this country how many o f their members have
had 4 years o f apprenticeship training. They will tell you that in the
last 20 years or more, machinists have not been trained in that fashion.
I heard o f one machinist who was lacking 2 months o f 4 years* appren-
36
LABOR LAWS AND THEIR ADMINISTRATION, 1940
ticeship training and the Commission turned him down, would not
accept him.
I was talking with a machinist who made breechblocks during the
last war. H e and 11 other machinists were engaged in that work, and
there were a number o f other machinists in the shop. He told me it
was necessary fo r him to wait until another machinist got through
with the lathe because he wanted to make a bushing for the breech
block, which the other machinist was also making.
W e should take an inventory as to the methods by which we are
going to produce and then find out what our shortages are going to be.
In that way, we can train in an intelligent way. I believe that every
thing said about the educational people here in New Y ork and what
they are going to> do is true. However, I do not think they are trying
to do anything that is detrimental. They are trying to do a good job,
but they do not know anything about labor, labor shortages, or the
supplies o f labor in this country. That is why I think it is necessary
that the labor department be the coordinating department within the
State and that that coordination should be at the Federal level.
I have seen people trained in Illinois and I know something o f what
is going on. A s I said before and will say again, we are all trying to
do a good job, but in our eagerness we have all jumped the gun.
Schools were opened. W e had machines there, and the children were
away from school— it was during the vacation period. The idea
seemed to be to load up the schools without much thought fo r anything
except how many they could get in the buildings. Some o f the people
were being given refresher courses when they really should have been
receiving a real training course. F or instance, some were being shown
how to run a shaper who had never run one before— that was the
manner o f selection.
In these training courses, 50 percent o f those selected should come
from the W . P. A ., according to the program set up. I really think 50
percent should come from the W . P. A ., but I do not believe that the
W . P. A . should select them, because I do not think it knows how.
In the Employment Service o f this country we have paid millions
o f dollars to train people how to interview applicants and to find out
what their skills are. I do not believe people who are engaged in the
selection o f persons fo r W . P. A . projects are o f the type qualified to
make this sort o f selection.
T o give you an idea, in Illinois— and I do not know how the figure
was arrived at— 237 found employment after leaving these schools.
Out o f this number who found jobs in industry, 227 had been referred
by the Employment Service and 10 had been sent by W . P. A. There
might have been good reasons for that. Ten were on the pay roll o f
the W . P. A . and the others had to get a job in order to exist. A t the
LABOR AND THE DEFENSE PROGRAM
37
same time, I want to call attention to the fact that the industrialists
o f Illinois made their selections without anyone telling them that
those people were from the W . P. A .
There is a tendency, I think, on the part o f educators to train
people in refresher courses without any regard for placement. I f
that is the case, you will find that millions o f dollars will be wasted
in this training program, because you w ill have to inaugurate another
refresher course whenever there is any chance o f placing these people
in employment.
There are other things besides just finding people for jobs that
should be done at a State level. In the safety departments o f the
labor divisions in many States there are facilities for assisting both
the A rm y and Navy to do a good job fo r defense. It will be neces
sary fo r inspections to be made—not the type o f inspections that has
been falling to our lot in the labor department— in order to see that
contracts are complied with insofar as materials and the like are
concerned. In the last war, materials were tested in public utility
laboratories or wherever they possibly could be tested.
Another thing the labor departments can do is through their indus
trial hygiene divisions. It is true that some o f these divisions are
in the health departments. I hope that many here who are from the
labor departments will visit tomorrow the Industrial Hygiene D ivi
sion o f the New Y ork Department o f Labor. I cannot see how any
labor department can administer factory inspections properly without
such a division, and let me say here, that division belongs properly
in the department o f labor.
I do not know how any inspector can find out whether the dusts
or other conditions surrounding the workers in industry are detri
mental or not without an industrial hygiene division. In order to
make an employer put his plant in order you have to be able to prove
to him that certain unhealthful conditions do exist in his plant. H ow
are you going to do this unless you can properly test conditions, such
as air to find lead dust and silica ?
W e can assist the A rm y and the Navy as well as any other depart
ment involved in defense production by putting at their disposal our
facilities and some o f our personnel. One instance I have just men
tioned— our industrial hygiene divisions.
T oo much emphasis cannot be placed upon coordination at State
levels, and i f we do not have this coordination through the department
o f labor there w ill be a lot that will not be done as labor would like
to have it done in industry. W e have the N. Y . A . in this training
program, but i f you should ever let it have its way you will have
some apprenticeship training. The same can be said for the publicschool training.
38
LABOR LAWS AND THEIR ADMINISTRATION, 1940
Y ou know, o f course, it is getting near election time in my State.
Some people thought we ought to have a defense committee in Illinois,
and they wanted to know who would be a good man to represent
labor. Last week they called me on the telephone to get my opinion.
A s I did not think it wise to answer on the telephone, I attended the
meeting. A fter they had appointed the committee, I asked them
what they were going to do. They did not know, but they said that
26 other States had already appointed defense committees or ap
pointed somebody to represent the State. They did not realize,
however, that the committees o f the 26 other States were fo r the most
part set up on the same basis and did not know what they were going
to do either.
It is a very serious matter, apd I think it is high time that someone
be given authority at State levels to see that this job is done properly.
W e are going to do our part in Illinois, and I think labor has enough
influence in our State to see that the job is done properly. W e are
not going to let the educational department walk away with the p ro
gram. In my home city, Chicago, labor has two representatives as
members o f the board o f education, and I am sure that these gentle
men will always see that labor is given the proper consideration.
It is time that on the Federal level authority be given to the United
States Department o f Labor to set up coordinating agencies at State
levels, because the departments o f education do not know anything
about the industrial needs.
Curricula fo r training apprentices in refresher programs cannot
be used. The type o f training that has been given up to date will
not work. The educators have been filling up available shops in the
public-school system without consideration being given to what par
ticular training is necessary fo r defense industries. I f they find
they can place 250 in a machine shop, they put them in. Then i f they
find they have plenty o f classroom space, they will fill this up and
give training in drafting because for this they do not need any
machines.
M r . W a t t . That is exactly what I had in mind when I talked about
the worker being confused. Just as Commissioner Durkin has said,
there is no head nor tail to the program. W ithin the past 3 weeks I
have been at a meeting and after I got through discussing the question
o f training with W . P. A . representatives, the N. Y . A ., the C. C. C., the
Office o f Education, the Federal Apprenticeship Training Committee,
and several others I think most o f us left there talking to ourselves.
None o f us had the faintest idea o f what this thing was all about. I
know that what Commissioner Durkin has told you is true, because I
went into several cities and I found that just as soon as that $15,000,000
was handed out it was a bonanza fo r unemployed teachers and teachers
LABOR AND THE DEFENSE PROGRAM
39
on their vacations. It had no relation that I could find, either in the
East or the West, with the needs o f the defense program.
The classes were organized on the basis o f what our schools had
equipment for. I do not know what they are going to do when the
regular school session opens. A lot o f people have asked me that
question.
The question o f coordination, as I see it, is the heart o f the problem.
I cannot emphasize too much that you have to have control in the
State department o f labor and industry, with standards set for 48
States by the Federal Department o f Labor. They should be stand
ards which no State will go below, but which every State will support
with the proper administration and coordination o f State depart
ments o f labor, employers, and workers at the State level. The edu
cators will play their part only when related training is necessary.
I see no other function in a defense training program that they should
fulfill, and I hope that this group will see the importance o f the argu
ment presented by Commissioner Durkin, because in the last analysis
it is extremely important to labor.
Miss S t it t (Washington, D. C .). I have been tremendously inter
ested in this discussion. This morning someone asked Mr. Patterson
how many opportunities there were in industry to place these ap
prentices, and he said the number was very limited. Though I am
in sympathy with your plan o f training young people on the job in
industry, I am wondering how much opportunity there actually will
be for training large numbers o f young people in this way.
Mr. W a t t . I f I omitted to say it, I will state now that all training
programs should certainly be determined on the basis o f our needs.
Until a determination o f our needs is made and established, no intelli
gent defense training program can be developed.
Mr. S arre . The points raised by Commissioner Durkin are sound.
Certainly, there is need for understanding and the need for coordi
nation. This is realized in the Defense Commission, but as I at
tempted to bring out when presenting Dr. Reeves’ paper, it is a big
job and it takes time to do these things. It has taken time to get all
o f them moving on all the fronts where it was necessary to have them
move at one time.
The Commission has been aware o f the need for that type o f co
ordination, and is now attempting to work out a plan which will
provide the necessary machinery, not complicated, but as simple as
it can be made in a regional coordinating program. Then we hope
to get this State coordinating program you have discussed here today.
May I also remind you o f another fact? The vocational educa
tional program, as provided under the Defense Commission, is
40
LABOR LAWS AND THEIR ADMINISTRATION, 1940
fundamentally a State program and not a Federal program. In its e f
forts to attempt to train such workers as have been needed, the Federal
Government, while paying the bill, is using State property. In mak
ing our plans we have not neglected to remember that this is a
democracy and a government o f States— each State jealous o f its
own prerogatives.
A s to the question o f need, I think Mr. Lubin pointed out how we
have been trying to determine carefully, over the period o f time avail
able, the number o f workers who are needed in these various insti
tutions. W e are being pressed, on one side, by a realization on the
part o f the people throughout the country o f the need for action in
providing defense protection and, on the other side, by the realization
that we are trying to analyze and break down the real need, and not
the supposed needs based on hunches.
The money available fo r the defense program had to be provided
by Congress, as all o f you know i f you keep track o f the movements
o f Congress from day to day. There is still a deficiency bill in Con
gress to be acted on, and as I remember there is some money for the
apprenticeship program in that bill.
A ll o f these things have been going on for months. When it was
determined that it would be desirable to open these schools and to
make use o f them while available during the summer, in order to
meet what appeared, as far as we could determine through the Arm y
and Navy and information from the Employment Service, to be the
required needs, we endeavored to indicate generally those industries
which might be considered, or were considered at that time, solely
defense industries. W e have tried to make it clear that because a
school had woodworking equipment there was no reason on earth to
open it and put on a course in furniture making. W e have worked
along the line o f finding out if, for instance, welders were needed
instead o f machinists, and i f this was the case, we trained welders.
Here again we are going down as far as we can onto a State level,
and encouraging this group and that group to do those things which
ought to be done to meet specific needs in that particular locality.
This brings us back to the local committees in the various States, and
in Commissioner Durkin’s State, because apparently he got into that
State picture. I think he is doing a good job and getting results.
It comes back again to that question o f State level.
W e are endeavoring— and I want to make it clear that the plan has
not been fully developed— to set up a program which will make it
possible for the parties interested in the various States to go to some
one individual and find out from him the right course to follow in
order to get something done that needs to be done.
LABOR AND THE DEFENSE PROGRAM
41
The Employment Service and the Arm y and Navy have developed a
list o f some 570 occupations, this being on the basis o f a study made
o f work now being done, contracts to be let, and demands as they
appear on the books o f the Employment Service, the approximate
number o f occupations which it is felt will require some type o f work
training to be provided.
A s soon as that list is checked we want to issue it to the Office o f
Education to be used as a basis for training. In this way we can
eliminate sign painting and fine furniture making.
W ith regard to the Civil Service Commission, let me say that it is
endeavoring to streamline its set-up as far as possible with reference
to its specifications and requirements. There again, remember, there
is pressure being brought on all sides. On one side you have people
needed fo r navy yards and arsenals and on the other side there is the
question o f standards o f workmanship. Y ou can find men and
women who have certain abilities, but they lack this or that which
may be required under the particular specifications. Some will say
we must maintain standards, but this rule, i f followed, will not permit
the employment o f these people in a job where they undoubtedly
can do the work.
I think what Commissioner Durkin wants is an intelligent con
sideration o f the individual as an individual and his ability to meet
the needs o f the job. I f there is a situation in your community such
as that pointed out by Commissioner Durkin, I think that i f you
will call it to the attention o f Commissioner Mitchell or Colonel
Flem ing in W ashington something will be done to remedy that situa
tion. The Civil Service Commission has gone a long way with us
on the question o f the older worker and changing the age limit. The
sky is practically the limit. I f the Commission could get a lens
grinder, I believe it would take him today even i f he was on a stretcher.
Mr. D u r k i n . That bears out what I said. I do not know Colonel
Fleming, but I think the people in the United States Department o f
Labor do. I think that in many States the department o f labor is
not in the picture because the department o f education o f that State
probably took over that training.
One thing that has a place in the defense program and that has
not been touched upon is the conciliation service for the prevention
o f labor disputes. Now I am sure that the department o f education
is not going to fare very well in that regard.
W e have in our State, and other States also have, apprenticeship
training committees. A ll that is necessary in order to have a good
committee is to have it enlarged. W e have the secretary o f the
machinists’ district council, and o f the metal trades, the head o f the
42
LABOR LAWS AND THEIR ADMINISTRATION, 1940
building trades, and o f the allied printing trades on this committee,
and it is only necessary to put on a few others representing the
C. I. O. and A. F. o f L. to make the picture practically complete as
far as labor is concerned. I f this committee were to be kept informed
as to what is going on in the defense program, and was to be given a
hand, I am sure it could do some constructive work in training
apprentices for defense work.
I happen to know that one o f our large public utilities in Illinois
has employed 300 first-class machinists. The requirements it imposes
upon those who want a job are very rigid— not over 44 years o f age,
good medical examination, etc.— but it has been pirating the trainedmachinist market in our city (C hicago). It has never trained one
apprentice, but it has demanded the best that others have trained.
I believe that when things like that are called to the attention o f a
good, sound, intelligent committee which you have at your command
(and I believe you can get it in this day and a g e), things o f that kind
may be corrected.
I have talked to the leaders o f the machinists o f Chicago, and I
know that they are w illing and ready to do anything they can in
order to extend the apprentice-training program in industry. I think
we have a good chance now to bring about a good, sound apprentice
program in every State in the Union, and especially so at this time
when so many are interested in defense.
Dr. P a t t o n (New Y o rk ). Irrespective o f whether or not we agree
with Mr. Durkin, the only way this convention can act on his sug
gestions is fo r him to draft them in the form o f a resolution and turn
it over to the resolutions committee. I f you want to get this con
vention to do anything, whatever action it may be, submit it to the
resolutions committee, who in turn will submit it to this body where
it will be voted up or down.
M r. B ell (British Columbia). I have listened with keen interest to
the discussions that have taken place on this very important and farreaching subject. In the calamity o f war which has descended upon
m y country— a calamity which I most firmly and strongly state will
eventually be even more calamitous to some other people before we
get through with them— it is inevitable that our industrial life should
undergo great changes.
One must be very careful in speaking at a time like this. W e hear
so much about fifth columnists. Now, I am not suggesting fo r one
moment that there are any fifth columnists at this convention o f the
International Association o f Governmental Labor Officials, but if
by the merest chance there should be I hope they will go away feeling
more enlightened than comforted by what I have to say.
LABOR AND THE DEFENSE PROGRAM
43
The industrial life o f the Dominion o f Canada has undergone a
complete transformation during the last year. It is no easy job to
transform the life o f any country from a peacetime to a wartime
basis; but that is what has actually happened in Canada during the
last year.
Yesterday I made some reference, first o f all, to the enunciation o f
the policy o f the Government that nothing would be allowed to stand
in the way o f our war efforts. That is the main job in Canada today.
However, at the same time it was clearly stated from the most influ
ential Government source that there would be no unwarranted or
unnecessary breaking down o f labor conditions that had been already
built up.
Apart from that as a declaration o f policy, we have gathered enough
from what has already been said today to realize that there is another
important factor which works toward that very end. Mr. Lubin
stressed it so ably this afternoon that I hardly need mention it.
So many o f the labor laws were first instituted by way o f reform,
by way o f doing something to improve conditions and to remove evils
that should not be allowed to exist. F or example, there was the 8-hour
day. It was not long after reforms like the 8-hour day had been insti
tuted that they found support from another and unexpected quarter—
the employer and the industry itself, who realized from the standpoint
o f production that they were an economic advantage. I t has been
shown that up to a certain point the worker’s effort is productive but
that i f you overstep that point his production falls down. That in itself
will tend to keep things within reasonable limits, because it is eco
nomically advisable that they should be so kept.
The trend o f the discussion this afternoon seems to have swung
around apprenticeship, and I am not going to dwell on any other
aspects o f the program in Canada except to mention one incident
about apprenticeship that happened in my own Province and might
be o f some interest, i f not o f some help, in connection with the matter
that has received so much discussion this afternoon.
In British Columbia we have had an apprenticeship program work
ing in full swing for a period o f 5 years. Perhaps in that respect
we are more fortunately placed than some other places. From what
I have heard I surmise that some o f the cause o f the difficulty
is that the foundations o f apprenticeship have not been so firmly laid
and established as they have in some other places, so that you
could proceed from that point. Now, however, you are confronted
with this difficulty. Funds have been appropriated and set aside fo r
the purpose, and this $15,000,000 I have heard mentioned is apparently
very attractive to the educators. I do not even dare to harbor the
thought, let alone express it, that the same $15,000,000 might be
equally attractive to other people as well as the educators.
3 1 3 4 2 1 ° — 4 1 --------4
44
LABOR LAWS AND THEIR ADMINISTRATION,
1940
The sooner you get your program going, the better. W e have a
well-grounded apprenticeship program in British Columbia. A ll the
building trades and practically all the other important trades are
under that act and have been for some time. The act makes it an
offense fo r any employer to employ a youth, a boy under 21 years
o f age, at a designated trade except as an apprentice, fully indentured
under the act. The employee cannot use the tools o f the trade unless
he is duly apprenticed in the trade.
Recently we ran into a somewhat difficult situation, arising directly
out o f war-supply production, in connection with the machinist trade.
It was pointed out to our apprenticeship committee that there was a
certain kind o f work, which was termed “ repetition” work or special
ized work, and which a boy could do well and quickly i f he could be
kept on it, doing nothing else. In order to do that work, however,
he had to use the tools o f the trade. Now the boy may work on that
job 20 years and never be a tradesman, but in the need o f the hour
with which we are confronted we had to give the idea consideration.
W e discussed this problem with representatives o f organized labor,
and they agreed some special provision should be made to take care
o f that particular situation. Fortunately, we had a provision in the
act which allows the apprenticeship committee in control o f the act
to permit a youth to be employed fo r 3 months by way o f preliminary
training before he enters the apprenticeship contract. W e decided,
therefore, we would handle it in that way, but we still have control
o f the situation. It is not thrown right open. The employer has to
get a permit and assent from the controlling authority.
A s much as we would like to see all those boys employed as appren
tices and gradually brought along to the standing o f journeymen,
we are in a tough spot right at the present time. W e want to make
these shells. W e want to get them out, and it is not o f such great
importance whether or not they are made by apprentices. The im
portant thing is how quickly you can get that shell out to fire at a
certain person whose name and residence I will not mention at this
time. That is the important thing we have to work on.
W e are still adhering to the policy o f fair wages in Dominion G ov
ernment contracts. W e may have to relax on some o f the regulations
that we have established and enforced up to this time. I am not so
optimistic as Mr. Lubin that we are going to get through this job
without tightening our belts. In fact, we have tightened them a little
bit already. I know we are going to tighten them some more, but
I can assure you that i f and when we have to tighten them some more,
we will do so even i f our spine cracks, because we are going to finish
this job.
LABOR AND THE DEFENSE PROGRAM
45
Chairman M iller . I should like to ask M r . Lubin a question. I
recognize quite keenly the necessity for local knowledge and local
action about what needs to be done and the planning to do it. But
when it comes to a determination o f how many people are needed o f
a certain skill, or a determination as to training, I cannot see that a
local decision by itself is effective. A fter all, if New Y ork City
were to choose to train 5,000 lens grinders, there probably would be
no reason why anybody else in the United States should train them.
I f all you do is to urge New Y ork City, Chicago, New Orleans, or
any other place in the United States to make up its mind as to what
it needs in the way o f trained labor or in training, it seems to me the
result is chaos. There w ill have to be an over-all picture and an
over-all relationship that make the localities aware o f what they are
called upon to do and what other people are going to do. W here
is that coming from and where is it going to work in ?
Mr. L u b i n . One place I think we can stop this lack o f planning in
the States is by having the labor people in the States and local com
munities take an active part in the defense program by presentation
o f resolutions, organization o f committees, and any other device which
would aid in locating skilled, unskilled, or semiskilled laboP, as well
as plants and sites fo r defense projects. There are many ways the
local committees can help the National Defense Committee.
Miss W o jciesza k (New Y o rk ). W e know how skilled workers dur
ing the depression went into unskilled work and they do not want to
let go o f their jobs for fear they cannot get skilled jobs. Can they
go to the local employment office and register their skill ?
Chairman M iller . The employment service offices are reinterview
ing applicants very largely in order to get a fuller history than they
had on file, and in this way we hope to have detailed information as
to skills and the relation o f the present job to individual training.
Mr. Lubin has indicated that the unions are also actively participating
in this work, and are getting in touch with their members who are not
at present active in their own trades.
Defense Activities o f N e w Y o rk State Agencies
From address by
H
o n
. C
h a r l e s
P
o l e t t i , Lieutenant Governor of the State of
New York
I note that in your program considerable emphasis is placed upon
the role o f labor in the defense program. A s New Y ork State Defense
Coordinator, I have had the opportunity o f gaining an intimate
knowledge o f many o f the ramifications o f our defense activities,
and, more particularly, o f the important part that State agencies that
46
LABOR LAWS AND THEIR ADMINISTRATION, 1940
are well organized for normal times can play and must play in emer
gencies like the present.
In the immediate future, there will rest upon industry— labor and
employers alike— a responsibility that will be heavier than ever in
our history. The manufacture o f equipment and supplies for our
defense forces is a task that w ill call for unfailing ingenuity, untiring
energy, and unflinching loyalty.
Our experience in the W orld W ar showed what chaos results from
the lack o f smooth functioning in normal times. F or example, when
we went into defense production then, we had no employment service
to match men and jobs efficiently and quickly. W e had to organize
the United States Employment Service in the midst o f the W orld W ar
to keep our defense plants moving. But now, thanks to the advances
that have been made since the W orld W ar, we are in an unusually
favorable position to cooperate in the national defense program. As
one o f the great industrial States o f the Union, we have developed a
machinery to meet peace-time requirements which is now invaluable
in the present emergency, because it has functioned smoothly in nor
mal times. In our State we have found the detailed knowledge o f
all industry normally possessed by the department o f labor under
Commissioner Frieda Miller, to be o f invaluable assistance in our
defense activities.
Let me refer briefly to some o f the data bearing on the State’s
industrial resources that have been turned to good use in the defense
program.
Through the Industrial Directory, which the State department o f
labor has prepared fo r a number o f years, the names, addresses,
nature o f business, and number o f employees for manufacturing
concerns have been collected. This year, in cooperation with the
Ives Legislative Committee and the State Planning Council, the
directory— which is nearing completion— has been broadened to in
clude certain other types o f business, such as construction, trans
portation and communications, mining, and certain service trades.
This directory will give us a picture o f New Y ork industry as a
whole— its character and diversity, its growth, and the rise and
fall o f concerns. It will furnish the distribution o f establishments
by type, size o f firm, and geography.
Then also the department o f labor’s inspection force is constantly
collecting inform ation on the number and location o f idle plants
in the State, their size and general condition, what they were previ
ously used for and when, and the types o f manufacture fo r which
they are adapted. This is now proving very useful.
Through the State department o f labor’s placement and unemploy
ment insurance and other records, we are surveying trends among
LABOR AND THE DEFENSE PROGRAM
47
the “ gainfully occupied,” breaking those figures down to exclude
self-employed and agricultural workers who are outside the area o f
departmental authority. W e can thus know the structure o f the
State’s total labor supply— employed and unemployed— and trends,
in that field. Through our employment figures we know a good
deal about the labor demand— its total volume by m ajor groups.
W e can examine labor surplus and labor shortages in each locality.
Placement and unemployment insurance records give us the volume
and distribution o f unemployment and something about how elastic
this is. W e know the characteristics o f the unemployed, by age,
sex, occupation, geography, and industry. Executives and employers
in search o f trained workers fo r jobs requiring special skills can
obtain invaluable assistance from this inventory o f persons registered
fo r jobs with the New Y ork State Employment Service. There
are more than 670,000 persons listed by this service. Am ong these
are large numbers o f skilled workers with experience in industries
which have a part in the defense program.
There is, I believe, too much loose talk about scarcity o f skilled
labor. It is definitely established by the records at our command
that New Y ork State has no scarcity o f labor, skilled and unskilled.
O f course, we cannot expect to find a reservoir o f unemployed men
all ready at a moment’s notice to jum p into some o f the most
specialized skilled operations. But there is no doubt that all kinds
o f skilled workers can be supplied by proper training.
In New Y ork State we have made great progress in training
employed workers to perform more skilled tasks. This stepping
up o f skills is proceeding rapidly. W e are doing this through night
and day courses in the vocational schools o f the State. In the period
o f 2 months, the State in its localities has trained 28,000 men for
industries connected with defense. They include machinists, weld
ers, sheet-metal workers, electricians, mechanics, and draftsmen.
Plans are now in operation to make possible the training o f a hundred
thousand men in these vocational schools. In addition, many private
businesses in our State have established their own training programs
fo r skilled workers.
There has developed an unfortunate tendency on the part o f a
few employers to seek workers from other parts o f the Nation. W hy?
Some believe it is because o f the desire o f the employer to obtain
cheaper labor or, perhaps, nonunion labor. Yet the fact remains:
Today we have considerable available skilled and unskilled labor in
New Y ork State.
Before tapping the labor resources o f another State, I believe that
the employers o f every State should make complete use o f the labor
supply existing within its own State. As State defense coordinator,
48
LABOR LAWS AND THEIR ADMINISTRATION, 1 9 4 0
I would urge all employers in New Y ork State to exhaust our labor
supply, and I believe the same policy should be followed by other
States. The Nation as a whole does not gain by causing unnecessary
translocations and dislocations in the various States. Nor will it
be in the interests o f the taxpayers o f a State to saddle themselves
with the burden o f furnishing relief to workers from other States
when an economic slow-up occurs in the defense industries.
In New Y ork State, the State employment service stands ready to
give to any employer all assistance to obtain available labor from
within the State. The same, I am sure, is true in other States. I
would urge the employers o f New Y ork to make full use o f the State
employment services. Y ou representatives from other States, I know,
will undertake to have employers o f your own States capitalize the
splendid facilities o f your governmental employment services.
W e must preserve our existing labor standards. The good labor
standards that have been built up in New Y ork and other States
have created and safeguarded the things that make democracy worth
preserving. Labor, industry, and government have worked together
to reduce accidents and disease— thus assuring to workers better
health and steadier income, and to industry an uninterrupted flow
o f production. Labor, industry, and government have worked together
fo r shorter hours and better wages, knowing full well, out o f our experence in the last war, how vital these are to a high level o f efficient
production.
It is most important that we preserve the social gains that we
have already made. This Nation has carried on a vigorous offensive
against social and economic inequalities. That is why you and I
who have found America the land o f opportunity— who have been
able to enjoy the blessings o f democracy— are all the more eager
to stand shoulder to shoulder to preserve and defend the American
way o f life.
U nity and teamwork are necessary in the task o f preparing our
country fo r defense. W e must all pull together i f we are to play the
part required o f us fo r the preservation o f our democratic institu
tions. Governmental agencies must work together; government and
industry must work together; workers and employers must work to
gether—with a common mind, a common impulse, and a common pur
pose—i f we are to keep pace with the tramp, tramp, tramp o f presentday world events.
Wage and Hour Legislation
Operation o f the Wage and H our Law
By
C
o l
. P
h i l i p B.
F
l e m i n g , Admimistrator of the W age and Hour Division,
United States D epartm ent o f Labor
I was delighted when my good friend, Dr. Lubin, asked me to come
here today and told me that I could talk a little shop. Not that
I face you with the confidence o f an oracle. I could talk pontifically
by the hour about building pontoon bridges and dams, because that is
what I have been doing ever since I got out o f W est Point. But I
am a newcomer in this field o f labor law. I am just learning to
toddle about and am in no position to talk down to my elders.
Nevertheless, I welcome this opportunity to talk to you. I have
been eating, drinking, and sleeping “ wage-hour” for almost a year
now, and it is good to find several hundred other persons who have
been on a somewhat similar diet. W e have a lot o f aches, pains, and
little victories in common, and there is no audience I can think o f
before whom I could feel more comfortable talking freely and
frankly about these things.
Before I am through, I should also like to say a few words about
the role o f labor legislation, both in total defense and in the new
world into which we have been so rudely crowded by recent events
in Europe. This, too, has been very much on my mind o f recent
weeks. But first, I should like to give you a progress report on the
activities o f the W age and H our Division since my assistant, Merle
D. Vincent, talked with you last year.
Probably the most important development during the past 12
months, from the point o f view o f this group, has been the conclusion
o f cooperative agreements with three States and the District o f
Columbia to make inspections under the Fair Labor Standards Act.
Since the first o f these agreements was signed only last November,
it is still too early to give you more than the most general indication
that we believe they will prove successful.
Drawing up these State-Federal agreements is a slow process.
They are a new thing and we want to proceed cautiously. I t is
important not to set any precedents which we may not later be able
to follow. A t the present moment we have four agreements in effect.
The first one, with the State o f North Carolina was signed last
49
50
LABOR LAWS AND THEIR ADMINISTRATION,
1 9 40
November. The other three, with Connecticut, Minnesota, and the
District o f Columbia, were not put into effect until this summer.
So, you see, we are moving ahead very slowly, and we shall continue
to move slowly until such a time as we are convinced, and the States
are convinced, that we have worked out a system o f cooperation
which is mutually satisfactory. Only time will tell this. However,
I should like to state quite frankly that, when and i f the time comes
that we are sure o f our ground, we will conclude agreements with any
State as soon as it is legally empowered to take this step and as soon
as it can show us that its standards o f administration are equal to
those required fo r fair, efficient, and complete enforcement o f the
act.
The reasons behind these agreements are fairly obvious. In the
first place, though there is only one State which has a wage and hour
law fo r men, many States fo r years have been enforcing wage and
hour standards fo r women. In addition, most States have been en
forcing other labor laws which, though they are not in the same field
as wages and hours, still have served to make those responsible for
their administration thoroughly fam iliar with local industrial condi
tions. This is a fam iliarity which our people could not hope to equal
until they had been on the job fo r some considerable period o f time.
W e want to take advantage o f that experience because it would un
doubtedly make for more efficient enforcement.
The second reason falls in the realm o f public relations. The aver
age businessman is no different from anyone else. H e hates to be
bothered. A ny lack o f coordination on the part o f the Federal and
State inspectors is bound to be blamed on both o f them. T o the
employer, an inspector, whether State or Federal, is a Government
man. It is a little difficult fo r him to understand the overlapping o f
our functions, o f which there is plenty, and his tendency is to blame
this on poor administration. This is particularly true when inspec
tors from both agencies invade his plant, either simultaneously or
within a short time o f each other. I know how I should feel i f two
insurance salesmen from the same company appeared at my office
within a few hours o f each other.
There are other ways o f coordinating our work in addition to StateFederal cooperative agreements or State wage and hour laws. W e
took up that problem at a very helpful conference in W ashington in
A pril. A t this conference, held under the auspices o f the Division of
Labor Standards in the Department o f Labor, our officials sat down
at a table with State labor administration representatives and we
thrashed out our mutual problems. T o us in the Wage and H our D ivi
sion this was an extremely helpful conference. Out o f it came some
concrete recommendations fo r cooperation in the future. I am glad
WAGE AND HOUR LEGISLATION
51
to say that these recommendations have since been put into effect in
many o f the States and the results have been more than satisfactory.
Briefly, these plans called for frequent conferences between State
and Federal staffs, and fo r exchange o f information on each other’s
laws, violations, complaints, prosecutions, and regulations. In other
words, the committee, composed jointly o f Federal and State officials
who drew up these plans, felt that a great deal could be accomplished
by voluntary cooperation between the two agencies and recommended
several common-sense ways o f obtaining this cooperation. I com
mend these plans to your attention. W e could both profit enormously
from follow ing them. To this I should like to add a personal invita
tion. Whenever you have a complaint about the way we are doing
things, please get in touch immediately with our nearest field man.
W e are all in the same boat. Let us not be complacent about sinking
just because we can blame the other fellow fo r pulling the plug.
There are two goals towards which we should always be striving.
One is the most complete possible Federal-State coordination, both
o f our activities and o f our regulations and standards. The other
is uniform laws. The latter are highly desirable, but realism forces
me to conclude that it will be some time before we have adequate
wage and hour laws in all States o f the Union. W e must not be
discouraged by that fact. A fter all, it has taken several generations
o f good hard work to get as far as we already have.
W hile we are on this subject, let me say parenthetically that I
believe that whatever success the wage and hour law has enjoyed
to date or whatever success it will enjoy in the future has a direct
bearing on the future o f State labor legislation. The public has
been finding out in the past 2 years that we can set a floor under
wages and a ceiling over hours without any real dislocation in our
economy. A nd this, I believe, will help break down opposition to
similar legislation in the States.
Now I should like to summarize briefly the progress we in the
W age and H our Division have been making during the past year.
First, I think we can safely say that now, after less than 2 years
o f this law, we have permanently built the principle o f a floor under
wages into the structure o f America. I do not believe that there are
more than a handful o f persons, speaking relatively, who would today
want to repeal that section o f the law. The minimum-wage pro
vision was under fire in Congress this spring, and the spontaneous
manner in which the press o f America rose to defend it was largely
responsible fo r its survival intact. B y means o f this provision we
have raised the wages o f nearly 700,000 workers up to the minimum
o f 30 cents an hour required by the law. Many o f those who sprang
to our defense this spring had told us 2 years ago that this could
52
LABOR LAWS AND THEIR ADMINISTRATION, 1 9 4 0
not be done without wrecking the Nation’s economy. But we have
tried it and it works.
I have come to realize that the public is much farther ahead in
its social thinking than many o f us have understood. Most New
Deal legislation, as you well know, had to go through a terrific
barrage o f fire from the courts before it could be safely considered
enforceable. Y ou all remember the trial period o f the National
Labor Relations A ct, when for 2 years between its enactment in
1935 and its blessing by the Supreme Court in the summer o f 1937,
it was practically unenforceable. Every time the Board tried to
move against an employer, it would be faced with a counter-injunc
tion suit tying its hands. W ell, we in the W age and H our Division
naturally expected a similar, though less bitter, struggle. But the
courts, with almost no exception, have treated cases we have brought
before them as i f they had been waiting for years to have a law
they could enforce against the sweatshop employer who chiseled his
profits from the pockets o f his workers and competitors. Judges
have even gone farther, in some instances, than we ourselves felt
we should ask them to go.
The second noteworthy milestone during the past year has been
the success o f the 10 wage orders we have issued, setting minimum
rates between 30 and 40 cents an hour, industry by industry. W e
have invited representatives o f labor, employers, and the public around
a conference table, provided them with the facts, and let them tell
us the most practical minimum wage fo r their industry. In this
democratic way we have raised the wages o f over half a million
workers in low-wage industries—notably in the textile and apparel
fields. W e have tried that and it works.
Finally, I should like to tell you about enforcement. Our inspec
tion staff is now more than twice as big as it was when I took over
last October. A nd since last winter, we have decentralized our opera
tions, giving the men in the field about as much authority to make
their own decisions as could be wisely done, instead o f trying to
settle everything from Washington. A s a result, violations are being
cleared up nearly 700 percent faster than they were a year ago. In
addition, we have inaugurated a series o f industry-wide drives. The
drive in the lumber industry is nearing completion in some parts o f
the country, and we are now in the midst o f drives in five additional
industries— leather goods and luggage, boots and shoes, hosiery, fu r
niture, and woolen goods. W e are planning to go from industry to
industry, publicizing the results o f the drives as we bring employers
into line with the law, either through voluntary restitution o f back
wages or through court action. As you all know, the best way to en
force a law is to enforce it. The morning after a good case gets into
WAGE AND HOUR LEGISLATION
53
the papers, employers invariably line up in front o f our field offices,
check books in hand.
In addition to these plans fo r industry-wide drives, we are planning
to get our inspections on more and more o f a routine basis, under
which inspections are made without reference to complaints. Em
ployers know we mean business and they are obeying this law. W e
used to be told that it was a good law but it could not possibly be
enforced. W ell, we have tried that too, and it works.
Now we come to the question of national defense and its relation
to labor laws generally and to the Fair Labor Standards Act in
particular. It used to be fashionable in cynical circles to say that, of
course, when we would get bang up against the problem of girding
the Nation for defense, social legislation would all go up the chimney.
The wage and hour law would become, according to these people, a
ceiling over wages and a floor under hours, instead of the reverse.
W ell, that talk is just nonsense. It is based on the false premise
that our social and labor laws are mere candy sticks to keep the
Nation’s workers from whimpering.
These same persons make a plausible-sounding argument which has
been springing up here and there in newspaper editorials throughout
the country, beginning with the defeat o f France. France was licked,
they say, by the 40-hour week. The W alsh-Healey A ct sets a 40hour week on Government contract work and the wage and hour law
will have a 40-hour week this coming October 24. Beware, they
glibly conclude, lest we fall into the same trau which engulfed
France.
Let us look at the facts. In the first place, the argument that the
40-hour week defeated France is grossly misleading. The French
40-hour week was in effect only for about 2 years— during the Blum
Popular Front Government, which lasted only until the spring o f
1938. A fter that time, in the face o f a growing international threat,
the French workweek was gradually lengthened. B y the end o f
that year French defense industries were allowed to work as long
hours as the German. The Nazis did not abandon the 48-hour week
themselves until January 1, 1939, 9 months before the invasion o f
Poland.
In the second place, there is a great deal of difference between the
French law and ours. The French law placed rather rigid re
strictions on the working of overtime. Neither the Walsh-Healey
Act nor the wage and hour law limit the workweek. Overtime is
permitted, provided that time and a half is paid.
The nub of the argument in these editorials is that the more you
work, the more you produce. The National Industrial Conference
54
LABOR LAWS AND THEIR ADMINISTRATION,
1940
Board, a highly reputable research organization, even went so far as
to issue a report which stated, and I quote:
It requires no complicated mathematical computation to realize that if this
restriction on working hours (meaning the wage and hour law and the WalshHealey Act) were relaxed for the duration of the emergency to allow a 50-hour
week, the productive effectiveness of the existing supply of skilled labor would
immediately be increased by 25 percent; a 60-hour week (would mean) an increase
in effectiveness of 50 percent.
In other words, every increase in the working hours w ill boost
production in direct proportion. I d o not need to tell this audience
that this is foolish talk. I f we follow ed the logic o f this Conference
Board report to its conclusion, we would find that our workers could
produce three times as much in 120 hours as they could in 40.
A ll our industrial history proves just the reverse. Let me quote
from a general order issued by the Chief o f Ordnance and the Quarter
master General o f the United States Arm y in November 1917,7 months
after we had entered the last war and at a time when we were in as
great need fo r increased armament production as we are today. They
said:
Industrial history proves that reasonable hours, fair working conditions, and
a proper wage scale are essential to high production. The pressing argument
for maintaining industrial safeguards in the present emergency is that they
actually contribute to efficiency. To waive them would be a short-sighted policy
leading gradually but inevitably toward lowered production. It might be ex
pected that an individual working 10 hours a day, instead of 8, would turn out
more goods. He can, for the first few days. But experience shows us that in
a few weeks, or a few months, the output will be the same, or even less, than
it was during the shorter day.
In issuing its labor policy last week, the National Defense Advisory
Commission unanimously endorsed this 1917 statement. The Defense
Commission’s policy, a very important and progressive social docu
ment, stated:
In order that surplus and other unemployed labor may be absorbed in the de
fense program, all reasonable efforts should be made to avoid hours in excess
of 40 per week. However, in emergencies or where the needs of the national
defense cannot otherwise be met, exceptions to this standard should be permitted.
When the requirements of the defense program make it necessary to work in
excess of these hours, or where work is required on Saturdays, Sundays, or
holidays, overtime should be paid in accordance with the local recognized
practices.
The British have found out during the present war that long hours
o f work are inefficient. A fte r the invasion o f Norway early this
spring, the Ministers o f Supply and Labor called upon British work
ers to stretch out the hours o f work in order to catch up with German
production. On July 17, Mr. Bevin, British Minister o f Labor, an
nounced that hours o f work would have to be shortened. “ A ll the
WAGE AND HOUR LEGISLATION
55
evidence,” said Mr. Bevin, “ goes to show that we have carried on
with these long hours too long, and production is on the decline rather
than increasing.”
That is the acid test— when, in the face o f a Nazi blitzkrieg, the
British reduced their hours o f work in order to increase production.
In an editorial follow ing the day o f Mr. Bevin’s announcement, one
o f the leading English papers, the Manchester Guardian, had this to
say:
There comes a time when the spirit of patriotic resolve can drive the tired
body no farther. That time is here. This does not mean that armament pro
duction must fall still lower. Reduced hours, on the last war experience, should
soon send it up again, besides preserving stores of energy and enthusiasm for
future urgencies.
W hat the editorial writer was referring to when he mentioned the
last war experience was a series o f experiments with shortening the
workweek tried in British munitions factories. It was found that
by reducing the workweek from 66 to 45% hours, production did not
g o down but increased about 9 percent.
This experience with long working hours during wartime was not
confined to Great Britain and the United States. Even Germany
found during the present war that it would have to cut the workweek,
because long hours were causing such a lot o f sickness and industrial
stoppages as to be a serious threat to production. The fact is that no
modern industrial nation, whether democratic, Fascist, Nazi, or Com
munist, can get along either in peace or in war without social and
labor regulation.
The argument that a serious labor shortage in some o f the skilled
trades necessitates longer hours o f work is likewise, to m y way o f
thinking, misguided. There are today 8 or 10 million Americans
unemployed and looking fo r work. Many o f these do not have the
proper skills to fill the jobs which have to be done. True, but what
we must do is to train these people, not work those who are already
trained longer hours and continue to support our unemployed in
idleness.
T o combat the threat o f fascism, which is a threat o f production as
well as a threat o f military force, we must call upon all the human
resources o f the Nation. W e will need the brains and labor o f all our
people. Let us place our energies into training them so that we can
use them when the time comes and not find ourselves in the position o f
England, which, faced with the greatest crisis in her history, had men
standing idle while machines cried out fo r reinforcements o f fresh,
skilled workers to tend them. The penalty o f time and a half for
overtime contained in the wage and hour law is a worthwhile prod to
employers to get them to train skilled workers now.
56
LABOR LAWS AND THEIR ADMINISTRATION, 1940
W hat about the future? W hat about the brave, new world into
which the events o f Europe are hurtling us? The picture is indeed
black, but not completely so. T o compete with the totalitarian na
tions we must make this economic machine work. Only by doing
this can we hope to preserve our democracy. Freedom cannot be
bought by arms alone. Its price is also measured in terms o f human
welfare.
The wage and hour law is one o f our weapons in that fight. B y
it we are gradually raising the consuming power o f those at the bot
tom o f the economic ladder. It is among this group o f our fellow
citizens that there lies the greatest unexploited market fo r American
goods. W e need not g o to Europe, China, or India to find outlets
for our products. A third o f the Nation’s families have to live on
less than $780 a year. A ny nickels, dimes, or quarters added to the
pay envelopes o f the breadwinners in these families go right across
a store counter fo r food, shelter, and clothing. Decent pay at rea
sonable hours— that is how to put America back to work. But, ex
cluding agriculture and a few occupations specifically exempted by the
law, our law covers only one out o f three o f these workers. The
other two are engaged in pursuits which do not fall within the prov
ince o f the Federal Government. They are your responsibility.
W e must become a hard-hitting, economic machine, not o f slaves,
but o f free men. W e have known this for a long time, but we are
a little slow in doing something about it. The present situation
reminds me o f a story told me recently by a member o f the staff
o f the International Labor Office, who, at the time o f the Nazi
invasion o f the L ow Countries, was in Bournemouth, England, where
the Labor Party was holding a convention. Early on the morning
o f the 10th o f M ay my friend was rudely awakened by one o f
the leading members o f the party who led him down the hall to
his own room where h alf a dozen newspapers were spread out on
the bed. The headlines told the story o f H itler’s invasion o f B el
gium, Holland, and Luxembourg. The Englishman wasted no breath
cursing the Nazis. H e pointed to the headlines and said: “ I t ’s
come. Now, at last, we in this country will get down to work.”
America, too, is waking up. The threat from outside is doing
it. A s she girds herself fo r victory, she is taking stock o f her assets
and liabilities. Second only to her lack o f armaments among the
latter loom the unemployment, want, and hopelessness o f a large
body o f her people, striking at the very heart o f their faith in
free government.
A n d so I say, now, at last, we will get down to work. The work
we must do, besides the pressing job o f turning out guns, airplanes,
tanks, and battleships, is the work o f making democracy mean some-
WAGE AND HOUR LEGISLATION
57
thing to the millions o f Americans who will be called upon to
give their utmost to defend it. I t is a rude awakening. But it is
releasing the tremendous energy o f our Nation, which, i f guided
right, will make us a united, strong, and happy people.
Discussion
Chairman M o o n e y . Mr. Forrest Shuford, o f North Carolina,
who is engaged in administering the law there, and Mr. Harvey
Saul o f the Department o f Labor in Rhode Island, w ill lead the
discussion on this subject.
Mr. S huford (North Carolina). I feel that all o f us while listen
ing to Colonel Flem ing must have been inspired. In the first place,
I believe we all feel quite fortunate to have as Administrator o f
such a great piece o f social labor legislation, at this time o f crisis
in our country, a man who has spent most o f his life in defense
work and who is a recognized authority on it. He will be listened
to by those who are engaged in work necessary fo r the defense o f
this country. It is significant that as Administrator o f this great
piece o f legislation he feels that our plan o f work can be carried
on within the social gains that have been made, and that those gains
are an asset and not a liability. I think that is particularly
important.
W ith respect to cooperation between States and the Federal G ov
ernment in the enforcement o f this legislation, there is o f course
much that can be said. Last year when this conference met in Tulsa,
we in North Carolina had under consideration the matter o f whether
we wanted to be a guinea pig in this particular plan o f work.
Frankly, I was not sure whether I wanted my State to be one, because
sometimes guinea pigs do not get along so well. Nevertheless, I
thought it was very important to have State-Federal cooperation in
the administration o f this law if it could be worked out satisfac
torily— as Colonel Flem ing has expressed it, mutually satisfactory.
There was considerable doubt in my mind at that time as to whether
this could be done, for I knew there were a great many obstacles
which would confront us in trying to work out such a program.
However, as Colonel Flem ing has pointed out, in November we did
enter into an agreement with the Federal Government.
Although the agreement was actually signed in November it did
not go into effect until the first part o f 1940 so we have not had
quite so long a time as would be indicated by the date o f the signing
o f the agreement. I t took some time to get the plan into operation.
When we began operation in 1940 we had to train personnel and to
learn the policies and procedures o f the W age and H our Division
58
LABOR LAWS AND THEIR ADMINISTRATION,
19 4 0
before we could actually get down to work. I think now, after about
8 months’ experimentation, we have a feasible and practical plan
o f enforcement o f the wage and hour law. I think it can be done
to the mutual satisfaction and benefit o f the State departments o f
labor and o f the Federal Department o f Labor.
Colonel Fleming has pointed out some o f the obvious reasons why
we should work cooperatively. H e has not said a great deal about
the difficulties. W e have encountered them. His organization has
encountered them during the past 6 or 8 months, but they are gradu
ally being overcome. Sometimes it seems like a mighty slow process
to me, and I believe to Colonel Fleming, but still I think the diffi
culties are gradually being overcome.
One thing which Colonel Fleming has done— and which he did not
mention— is that he has appointed an assistant to aid in handling the
problems which arise between the State departments and his Division.
Frequently these problems are a bit different from the problems o f the
regional offices or branch offices. This assistant is to assist us with
the problems which we have. Unfortunately, since this plan was
inaugurated the assistant has had to be away from his office so much
that we have not had access to him, or I might be able to comment a
little more intelligently upon the progress which could be made with
this particular plan. However, having this assistant administrator
to consult on unusual types o f problems and difficulties which arise
should be o f much value to us.
I think also that the conferences which Colonel Fleming mentioned
are essential and o f much importance. Such conferences are im
portant to those States which have a cooperative agreement or those
which may enter into a cooperative agreement, and they are highly
important to those States which do not have a cooperative agreement.
Colonel Fleming mentioned one such conference, which was held a few
months ago, from which he said a great deal o f good was derived by
the W age and H our Division. I am sure that applies fo r the States
also.
I should like to say just one other thing, a little bit foreign maybe
to the subject which I am discussing. Probably some o f us feel that
the W age and H our Division has moved rather slowly with respect
to getting our own agreement working smoothly, but being as closely
associated with the administration o f the law as I have in the past few
months, and knowing something o f the volume o f work which has
piled up and which had to be cleared away, I am o f the opinion— and
perhaps the colonel could enlighten us on this—that the greatest
efforts o f the W age and H our Division have been toward getting this
backlog o f work out o f the way. That was the thing o f most im
portance—the thing we were having complaints about all the time.
WAGE AND HOUR LEGISLATION
59
W hy does not the W age and H our Division do this and that % I think
perhaps that has been its objective although I have not been told so.
I f so, I am o f the opinion that we aTe in a position, or will be during
this year, to move more rapidly in our own State with this work, and
perhaps the W age and H our Division will gain further information
from its experience in dealing with us, which will enable it to work
out better agreements with other States in the future, as outlined by
Colonel Fleming in his address.
Mr. S a u l (R hode Island). From my observation there is no F ed
eral legislation or regulation that involves the State departments o f
labor as much as the Federal W age and H our Act. I have been fo l
lowing what has been said, o f course, with a great deal o f interest.
I fully concur in what Colonel Fleming has said in respect to the
policy o f m oving slowly in setting up Federal and State cooperation
in a formal manner. I would much rather see it done slowly and well
than see it done rapidly and poorly.
It happens that in the State o f Rhode Island, at my instigation,
legislation was passed at the last session which will permit us to
enter into an agreement with the Federal W age and Hour Division
fo r State and Federal cooperation. W e are now awaiting investiga
tion from your Department, Colonel Fleming, to determine whether
or not our standards are such that we can enter into cooperation with
you.
There are two or three thoughts on my mind which are in the form
o f suggestions. I feel they are constructive, and I hope that they are.
In the meantime, while this formal State-Federal cooperation is
being set up, it does impress me that there are certain things that could
be done to help the States, inasmuch as we are so much involved in
this— especially those States where we now have minimum wage
laws.
I believe it is important enough to suggest to the W age and Hour D i
vision that it set up a special section to be devoted to State and Federal
cooperation on the enforcement o f this act, so that we will be prepared
to give better interpretations than we are now able to give. W e get
releases, o f course, from the W age and H our Division (the mimeo
graphed releases), but I think one should be gotten out fo r the par
ticular purpose o f serving the State departments o f labor. It should
explain certain things that are not explained in the mimeographed
copies; and, Colonel Fleming, I should like to offer that as one sug
gestion. I believe that it would be very helpful to us and to you in
administering the act.
There is one thing that we have observed in New E n g la n d -J do not
know whether it applies throughout the country— and this may be
3 1 3 4 2 1 ° — 4 1 -------5
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LABOR LAWS AND THEIR ADMINISTRATION, 1 9 4 0
taken somewhat as a criticism. It is my impression from what I have
observed that the desire fo r State and Federal cooperation in the en
forcement o f this act is not so enthusiastic on the part o f the regional
officers as it is at the headquarters in Washington.
I was very much interested in what you had to say regarding the
economic advantages regarding the enforcement o f this act. I should
like to offer as a suggestion that these advantages be emphasized more
throughout the country from your Division. In other words, it is
not merely policing an act that has been passed, but there are certain
virtues in the act that I think should be understood and emphasized.
I fully agree with you that the extension o f hours does not extend
production. I have had some experience o f my own along that line,
and I believe that i f more educational work could be done to show
the economic as well as social benefits o f the act it would be much
easier to enforce.
Mr. H in e s (Pennsylvania). Briefly, I want to say, as one who has
been identified with organized labor, that I am intensely interested
in the practical administration o f all labor laws. W hen I first became
secretary o f labor and industry in the Commonwealth o f Pennsylvania,
about a year and a half ago, the first thing I did was to visit W ashing
ton and confer with Mr. Andrews, seeking an opportunity to cooperate
with the Federal administration in the enforcement o f the minimum
wage and hour law. A t that time I was told that the machinery had
not been set up, but that possibly in the near future something would be
developed that would bring us into the picture.
Later on we again visited Washington and again offered our services
on any basis that the Federal Government might set forth which
would be mutually agreeable and desirable to both the State o f Penn
sylvania and the Federal Government. W e were told that some repre
sentatives o f the Department o f Labor would visit Pennsylvania and
make a survey, and they did. I do not know, Colonel, whether or not
you ever saw that report, but I think you should see it.
In my opinion, a very sincere effort was put forth to cement rela
tionship between Pennsylvania and the Federal Government. I do
not think we have any reason to take second place to any State in the
Nation so far as facilities and labor laws are concerned in this country.
Yet the report was filled with nothing but trifling criticisms o f the
manner in which we conducted our affairs in Pennsylvania.
W e were not seeking an appraisal from the Department o f Labor o f
the Federal Government on how we do things. W hat we were seeking
was an opportunity to cooperate. Not a word was said in that report,
nor a suggestion put forth since, as to how arrangements can be
worked out so that we in Pennsylvania can cooperate with the Federal
Government.
WAGE AND HOUR LEGISLATION
61
I have a suggestion to make. I know, from reputation and from
what I have seen o f you today, that you are a practical person. I
should like to have you designate someone to come into Pennsylvania
to confer with me or some other responsible person, and I am sure,
after we are through, we can find some basis to work out a cooperative
arrangement.
Chairman M ooney. Colonel Fleming, is there anything you wish to
say?
Colonel F leming. I shall be very glad to send someone to Pennsyl
vania.
Mr. L u b in . May I ask what might appear to be a similar question to
that raised by Mr. Shuford— difficulties experienced in cooperative
agreements ? Could Mr. Shuford tell us o f some o f these difficulties ?
I think those who represent the various States, as the time arrives, will
make cooperative agreements and will want to avoid those difficulties.
I f they know what to expect ahead o f time they can perhaps save a
lot o f time and mistakes. In any event, I think we would all profit by
finding out what it is, Mr. Shuford, you had to fight about and other
difficulties you had to solve.
Mr. S huford. Mr. Lubin, I think it would be a little bit difficult to
enumerate the difficulties, because a lot o f them are small. A lot o f
them are petty things which in due time can be ironed out. In d if
ferent States you have different laws and different procedures. There
is the matter o f publicity, which created some difficulties in our State—
not because it affected the work o f our department but because o f the
way it affects relationships between the public and the department.
There are various things o f that kind— some o f them trivial in them
selves—but when you take a number o f them together they become
important, particularly in public relationships and public reaction.
A s I see it, the thing that Colonel Fleming’s office should try to do
(and I believe they are trying) is to realize these difficulties and
eliminate them when they can, so that these same difficulties will not
confront them in the future. That is one o f the results o f carrying
out an experimental plan rather than trying to enter into cooperative
agreements with many States at the same time.
I think that one o f the ways in which many o f the difficulties can be
straightened out is through the procedure Colonel Fleming told me he
is adopting; that is, having some particular person on his staff to han
dle these things. I believe as this particular individual can devote
more o f his time to this work most o f these minor things will be taken
care of. To enumerate them would take a great deal o f time.
Colonel F l e m i n g . I can tell you one. Our Division, during some
litigation, was particularly anxious to get some information about a
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LABOR LAWS AND THEIR ADMINISTRATION, 1940
concern in North Carolina and sent a man post haste to get this in for
mation. One o f Mr. Shuford’s men had been there the day before.
H e was not told we were sending a man down there. W e corrected
that and we would never do that again. W e could have gotten the
inform ation from him, but it was just a result o f moving too fast.
Chairman M ooney. Connecticut has been in the same category as
North Carolina, and, in fact, just a short while back such an agree
ment was concluded between the United States Department o f Labor
and Connecticut.
I think it might be well to say that the difficulties are mutual—
not only on the side o f the State in its encounters with the Federal
Government, but also vice versa. One o f those that we found in
Connecticut is that a great number o f people in the State government
must be consulted and advised o f what is going on. The approval o f
the legal division, o f the governor, and o f the fiscal officers must
be obtained in the State. Likewise, on the side o f the United States
Department o f Labor, the W age and H our Division, the W om en’s
Bureau, and the Children’s Bureau, and apparently a host o f other
people in the Federal Government must peruse the agreement, criticize
it, m odify it, and then send it back fo r changes.
I have found that Colonel Flem ing and his staff have been very
long-suffering, tolerant, and patient in our attempts to work out an
agreement. Perhaps our agreement is typical o f New England, as
New England has always been reluctant to enter into agreements
with the Federal Government.
W e feel the difficulties are being worked out, and in my own opinion
none o f them is insuperable. The experiment is a vital one, not
only to the future o f the Fair Labor Standards Act, but also to the
progress o f State legislation and the attempts that all State labor
departments are making to raise legal standards and labor standards
throughout the country. I suspect the raising o f those labor stand
ards w ill in large measure depend upon the success o f this cooperative
effort.
Mr. D urkin (Illin ois). During the past year there have been
great changes fo r the better in the administration o f wage and hour
law in Illinois. O f course, I cannot speak for the other States. I
know that a great deal o f the complaints that we had to offer before
was because o f centralization o f administration in Washington.
The decentralization brought about a condition whereby, I believe,
the administration has speeded up, as has been reported by Colonel
Fleming. Now, I feel that in the administration o f a law o f this
land where you have complaints, whether they be from individuals,
industry, or officials o f labor organizations, i f the administration is
WAGE AND HOUR LEGISLATION
63
centralized in W ashington little information can be given to the
people whose cases you are handling under such conditions.
W e find in the administration o f unemployment compensation,
where complaints are made in local offices and the administration o f
the law in a central office within the State, that when people do not
receive their checks they feel somewhat offended when the clerk in
the local office cannot tell them the reason why. Y ou can readily
see the condition that would be imposed upon your State representa
tives unless they had something to do with the processing of
complaints within their States.
I believe further steps in decentralization should be taken, and
when that is done you will find that you will speed along much
faster and that the States will be more ready to cooperate, because
we in the States feel that we cannot have a lot o f complaints regis
tered against us as administrators when we do not know what answer
to give.
Mr. G ames (Washington, D. C .). During the past few years I have
been close to the European labor situation through membership in
the United States permanent delegation to the International Labor
Office. I wish to express admiration fo r the great accuracy with which
Colonel Flem ing has described the situation abroad and particularly
to emphasize the truth o f what Colonel Fleming has said about the
situation in France. Early in 1938— and even before, I believe—
French labor offered, through its leaders, to work longer hours in the
defense industries if that became necessary or feasible. A ll during
the last winter o f quiescent warfare France worked excessive hours;
England did not. W e see today that resistance is not directly related
to hours spent in labor.
Total warfare, far from creating general shortages o f labor and
therefore to demand generalized increases in hours, seems, indeed, to
create unemployment— or, at least, occasional “ pockets” o f unemploy
ment. Women are not being used overmuch in Great Britain today.
The need fo r increased skilled workers has not yet become acute
enough to induce employers to cooperate in a broad apprenticeship
program. Recently Mr. Bevin, Minister o f Labor, complained before
the House that future productivity was being jeopardized as the result
o f current practice. W e conclude that even today labor shortages do
not seem very real to the British.
Colonel Fleming spoke o f the relationship between social legisla
tion and defense. Am ong all the belligerents and many o f the fo r
mer neutrals, the outbreak o f war brought forth increased rather than
diminished protection through social legislation. In England— to
mention what comes first to mind—milk is being sold on the basis o f
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LABOR LAWS AND THEIR ADMINISTRATION, 1940
need; unemployment insurance has recently extended its coverage
rather fa r up into the white-collar class; what 6 months ago was tradeunion collaboration has recently become Labor Party participation
in Government. Exciting things are being said in the House o f Com
mons nowadays. T o those who must admit that, in the nature o f
things, a period o f warfare may not be an opportune time fo r the exten
sion o f political democracy, but who believe that such a period may
be most opportune fo r the extension o f industrial democracy— such
persons will find that a reading o f the current British Parliamentary
Debates is o f breathless interest.
Chairman M ooney. In connection with the problem o f training, I
wonder if Mr. Patterson, who is chief o f apprenticeship o f the D ivi
sion o f Labor Standards would like to make any comments or give ua
any o f his observations on that problem as it exists today.
Mr. P atterson (Washington, D. C .). Mr. Mooney, I was par
ticularly interested in Colonel Flem ing’s statement that the retention
o f a limit on hours at the present time serves as a prod to employers
to do more training. That is substantially correct. I t has focused
attention on training. I was particularly interested in what Mr.
Gambs said about the employers o f Great Britain being reluctant to
spend the time and energy necessary to train workers during a period
o f intensive production.
In this country we are proceeding on the basis o f defense training
without dictatorial methods, without compelling the employer to sub
scribe to it. In our program and activities we have discovered one
point worth mentioning here. A s a result o f surveys o f national
manufacturers, it has been indicated that certain employers feel that
operation o f the wage and hour law has deterred training. W e know
that this is not true. It is unfortunate that misinformation o f this
type is being circulated. I know Colonel Fleming has tried to correct
this impression through press releases. This has done no end o f good.
I f these associations are really eager and anxious to see training
increased throughout industry they could distribute information to
their members that the wage and hour law allows exemptions o f
apprentices working under regular apprenticeship programs. The
Walsh-Healey A ct does the same thing. W e can state emphatically
that the operation o f those two laws in no way tends to hold back
training on the part o f the employer. It is truer than we want
to believe that employers have not taken hold o f the training pro
gram or training problems as they should. They have not accepted
their proper share o f the burden. Some large employers have done
excellently along this line, but a large number have not. Much
less than half have systematic training programs o f any type. It
is still hit-or-miss. One thing that could be given further attention
WAGE AND HOUR LEGISLATION
65
is a systematic training program under standards that put efficiency
first, especially at a time when we need to get quick production.
W ith on-the-job programs there should be a careful mapping out
o f operations in advance and a rotation o f work so that a person
comes out a skilled craftsman, an all-round better worker than is
developed by hit-or-miss methods.
On defense training we hear a great deal right now about the
contribution to be made by the apprentice. W e also hear that an
apprentice has no place in defense training because it is not until
the end o f 4 years that he can be o f any value. That is not a fact.
Testimony o f employers indicates the contrary. W ithin a matter
o f a few months, i f the training o f the apprentice is regularly, syste
matically, and properly rotated, and the employer starts the actual
training at the beginning o f the apprentice period, it is shown that
the statement that apprenticeship training does not contribute ma
terially to current needs is a fallacy. W e should all feel, and I
wish the country at large could feel this, that the wage and hour
law, rather than serving as a block or obstacle, really serves as an
encouragement.
W e have had all kinds o f committees—national committees, official
committees, joint labor and management committees— for the past
18 months working on the problem. H ow can we provide a means
whereby the apprenticeship institution o f this country can be greatly
increased? W e have canvassed interested persons, and the consensus
o f opinion is: “ W e don’t need that sort o f thing. W hat we need
is to provide the employer with some type o f technical advisorv
service to help train men.” That seems to be the answer.
There are many mild incentives working for the adoption o f
apprenticeship. One is the regulation o f the wage and hour law
whereby bona fide apprentices can be exempt from minimum-wage
requirements. There was a great deal o f misunderstanding on this
last year. Some felt that after-work hours o f schooling o f appren
tices should be paid fo r at overtime rate. That mistaken notion
has been properly scotched by the W age and H our Division. I be
lieve that the more inform ation we can disseminate among employers
along these lines, the more we can get their help in this situation.
Mr. D inwiddie (New Y ork). I agree very heartily with Mr. Pat
terson. I was interested in what he said about there being difficulty
about numbers. Do you mean that there are plenty of applicants
and plenty o f opportunities for apprenticeship training?
Mr. P atterson. There is no problem in getting apprentices. We
have dozens o f requests daily from youngsters asking us to find
apprentice jobs for them, and from those working in plants under
hit-or-miss training programs who are anxious to become apprentices.
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LABOR LAWS AND THEIR ADMINISTRATION, 1940
Mr. D inwiddie. But you did not mean there are plenty o f oppor
tunities for training?
Mr. P atterson. No, I did not mean that. W e do need an increase
in the number o f companies carrying on training o f apprentices.
That is the core o f the problem we are facing.
Mr. D avie (New H am pshire). The State I represent has cooperated
right down the line, even to enacting laws. I want to say that the
district office (Boston) has cooperated with the State. I am more
interested in what Mr. Patterson had to say. W e seem to be running
wild on this apprenticeship problem. Being an old trade-unionist,
I have a few ideas on the problem.
W e tried to give to the employers o f this country the proper quota
o f apprentices to take the place o f men who through age, etc., had
to quit the business. Just now there seems to be an overemphasis
on apprentices. I think perhaps the logical way to get at it is for
our employment services throughout the country to pick out all the
men who are already skilled and trained in different crafts, to be
at least a nucleus fo r our defense program, and after we find how
many are available (and I speak in particular o f the man about 40)
we will have a very good foundation on which to start this program.
Then find out how many younger people we need and train them.
I think we should pause and find out how many men in the industrial
scrap heap can do this job.
W e have gone down the line with the wage and hour law. W e
adopted a resolution to go along. W e went into Tulsa with that
frame o f mind. W e drew a model bill, and I think nearly all o f
the States introduced that bill for cooperation. I am still hoping
that these little angles can be ironed out, and that when we go to
another convention a great many more States will be cooperating with
the Federal W age and H our Act.
Chairman M ooney. Mr. Davie speaks out o f accumulated wisdom
as he has for 25 or 30 years been commissioner o f labor in New
Hampshire. Mr. Davie, my understanding is that Mr. Patterson and
members o f the Defense Commission are now working along the
lines you mention.
Mr. D avie. They are not going along fast enough.
Mrs. B eyer (W ashington, D. C .). Following up what Mr. Davie
said, I think that we must face realistically this training o f labor for
the defense program.
W e should use the unemployed and the people who have gone into
lines where their skills are not used first, putting the latter group
back into jobs that are important to defense. The refresher and
supplemental training courses are essential to getting the utmost
WAGE AND HOUR LEGISLATION
67
possible out o f our labor supply* A t the same time, we must realize
that for 10 years or more we have not been training young people
for the skilled trades. There was no sense in training people for
jobs in which the market was already overcrowded. It would have
been foolish to train bricklayers, masons, and carpenters fo r non
existing jobs. Now, with an expanding market, we find that our
workers in skilled trades are mostly in the older age brackets and
the unions themselves are coming to us, saying, “W e want the ap
prenticeship program to expand and we will cooperate with you in
every way possible to make it function.”
One of the cardinal principles of apprenticeship is that the supply
riTust meet the needs; that there must be a constant balance between
these two elements. At the same time, we know that the defense
program is going to require a great many more skilled mechanics
than any situation that we, as a Nation, have ever faced.
Mechanized warfare requires armies o f mechanics. W e should
be training those mechanics, and the only way to do that is within
the framework o f industry. There has been far too much talk about
turning out skilled workers in 6 weeks. Y ou cannot make a mechanic
in 6 weeks. That is certain. There will be need for short-time
training courses for certain types o f skill, but you cannot turn out
a skilled mechanic except after a long period o f training on the job.
There is need fo r a clear understanding o f the different phases o f
training and for a recognition that fo r skilled trades training must
be done on the job over a period o f time according to a definite work
schedule.
Yesterday, I was fortunate enough to visit the director o f appren
tice training o f the American Airlines. W e are very proud o f that
apprenticeship system, since it was the Federal Committee on A p
prenticeship that was instrumental in getting the program set up.
Those apprentices are put through a very rigorous course o f training.
They are moved up within the plant step by step so that at the
end o f a 4-year course they really know their stuff. In fact, they
really know it better than the old-time mechanics, because they have
the advantage o f a well-developed program with related instruction.
I asked the director o f apprenticeship whether he had difficulty in
getting the mechanics on the job to cooperate in training apprentices.
He stated that he had no trouble at all; that, on the contrary, the
men want these boys to progress and become real mechanics.
An apprenticeship program should be worked out by the manage
ment and the unions together. The unions should never let it get en
tirely out o f their hands. Because, if a lot of half-baked mechanics
are produced, the unions of the future are going to suffer. They
are the ones who have to take the “ rap” for poor workmanship. In
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LABOR LAWS AND THEIR ADMINISTRATION, 1940
view o f this fact, I think we can safely count on having trade-union
support in our efforts to promote apprenticeship.
Mr. G oldy (Illin ois). I do not want to digress from the topic
under discussion, but I think it might be well to consider the way in
which other legislation and policies impinge in effect on the ones we
are discussing at the moment, i. e., wage and hour laws and vocational
training.
A month or two ago the American Management Association issued
a release which many o f you may have seen. The release referred
to the conflicting incentives which employers have as a result o f
wage and hour laws and the merit-rating provisions o f unemploy
ment compensation laws. A n employer covered by the Fair Labor
Standards A ct, the provisions o f which Colonel Fleming has clearly
described, must pay his workers time and a half i f he wishes to work
them overtime. Consequently, the Fair Labor Standards A ct pro
vides an incentive to employers to hire additional workers when p ro
duction must be increased, rather than to work them overtime. On
the other hand, the m ajority o f States have merit-rating provisions
in their unemployment compensation laws which give employers a
direct incentive to work men overtime rather than to hire new work
ers fo r peak periods o f production. Many employers seem to prefer
overtime work to hiring additional workers when the period o f
employment fo r which they are considering adding the additional
workers is o f indefinite length or is known to be impermanent. The
employer utilizes this method to prevent a charge to his merit-rating
account which occurs when workers are laid off and receive benefits.
The American Management Association release described these
conflicting incentives and indicated that employers all over the coun
try are discussing the problem. I t appears that most employers
have concluded thus far that it is to their advantage to work their
employees overtime, and to pay the required time and a half, rather
than to suffer the penalty o f an increased contribution rate under the
unemployment compensation laws.
I f employers persist in this policy, it may have some effect on the
problem o f training skilled workers. A t the present time thousands
o f workers, recruited by the State employment services and by
W. P. A ., are enrolled in “ refresher” courses which are being given
under the auspices o f the Office o f Education. The most recent figures
indicate that 169,000 individuals are enrolled in these courses for the
purpose o f brushing up on skills which have been partially lost through
lack o f use.
I f employers preferred to take on additional workers whenever their
production load increased, rather than to work their current person
nel overtime, it would provide frequent opportunities by way o f
WAGE AND HOUR LEGISLATION
69
part-time and stop-gap jobs for skilled workers who were unemployed
so that their skills would not deteriorate through nonuse. On the
other hand, i f the merit-rating incentive operates to stabilize employ
ment so that certain workers are frozen out o f jobs, while others are
required to work not only full-time but overtime, we will, in every
period o f less than full employment, be confronted with a considerable
loss o f skill from nonuse. This practice will also make it difficult to
effect a smooth transition from a condition o f total unemployment
to one o f full employment for those individuals who have taken
refresher training courses.
In determining the adequacy o f the present penalty o f time and a
half fo r overtime in wage-hour laws, it is my opinion that the con
flicting incentives just described should be taken into account. It
may be that an incentive o f double time fo r overtime is needed.
Chairman M ooney. Mr. Goldy, I think, has brought out a very
interesting and a very important apparent conflict in these laws
which are under discussion this morning. I suspect Mr. Goldy has
a solution by the gleam in his eye. Mr. Lubin suggests the solution
should be double time for overtime. In order to avoid what might
be a controversy on something which is slightly afield from the topic
under discussion I will not ask him what his solution is at the
moment unless there is sentiment for it in the audience.
Miss Stitt (Washington, D. C .). I am wondering to what extent
it is necessary to reduce the basic minimum wage o f 30 cents an hour
for beginners in the skilled trades for which apprentices are being
trained. H ow many o f them would begin at less than 30 cents, the
basic minimum wage ?
Colonel F l e m i n g . I think I can answer that to some extent. D ur
ing the total time the wage and hour law has been in effect we have
granted exemption to only a little over TOO apprentices.
Mr. P a t t e r s o n . The exemption provision has been a fortunate one
in that it has resulted in attracting a great deal o f interest. A plant
sends in a request for apprenticeship exemptions, and an apprentice
ship representative visits the plant to investigate. A s a result, the
plant’s whole training program is benefited. It has been an excel
lent incentive. The actual number o f such cases is not significant.
Attempts to follow up each request with a personal interview are
made in order to look over the real situation. The feeling on the
part o f the employer is that he has received a valuable service and
that there is nothing unreasonable about the attitude o f the Govern
ment. A t that only 1 percent o f the apprentices are getting under
30 cents, and these are usually in isolated communities where wagescale laws rarely find them.
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LABOR LAWS AND THEIR ADMINISTRATION, 1940
Mr. B rown (C olorado). I think that whenever possible we should
utilize labor exemption under section 14 o f the act. In Colorado
we are granting exemptions to factories which are doing work for
national defense. In the textile industry we have had many learner
exemptions applied for.
Dr. P atton (New Y o rk ). There was one remark Mr. Patterson
made that is o f interest to me. A ccording to his statement, the
Walsh-Healey A ct and other Federal acts need not serve as a deter
rent to apprenticeship training. H e pointed out that there was some
rather widespread feeling that these laws did act as a deterrent.
I want to do a bit o f reporting. I should like to call his attention
to the fact that the current issue o f Monitor, the organ o f the Asso
ciated Industries o f New York, makes a flat statement on the deter
rent features o f the W alsh-Healey A ct which have caused the
employers o f this State not to apply fo r exemptions. A ccording to
this article, there is so much red tape involved, so much involved
application and correspondence simply because o f those laws, and
despite the fact that there are provisions for exemptions, that em
ployers are not applying fo r them. I do not know i f that is true,
but I know that has been widely published, and such statements have
the backing o f one o f our State departments here in New York, which
is actively sponsoring the passage o f a bill in the New Y ork State
legislature to do something about it.
Chairman M ooney. I assume the department is the department
o f education, Dr. Patton.
Dr. P atton. I can put anyone in touch with the source.
Mr. M artinez (Puerto R ico ). I understand that organized labor
is being somewhat disturbed with the activities o f organized labor
in Puerto R ico with reference to the amendment to the Fair Labor
Standards A ct signed by the President o f the United States on June
26 o f this year, and as a labor representative I think I ought to
bring to you some explanation, because, besides being the Commis
sioner o f Labor o f Puerto Rico, I happen to be the president o f
the State federation o f labor. Our organization has been affiliated
with the A. F. o f L. fo r 41 years and I have been serving in the
position o f first vice president o f this body fo r the last 32 years.
This amendment to the Fair Labor Standards A ct in Puerto Rico,
in my opinion, went a little farther than organized labor asked o f
the administration; and when so speaking I refer to this provision
o f the piece-rate system. In 1937 the employers in Puerto R ico also
claimed that it was impossible to enforce the insular minimum wage
law for industrial home workers.
WAGE AND HOUR LEGISLATION
71
W e have had a minimum wage law in Puerto Eico since 1919. It
fixes a minimum wage o f $6 a week fo r women over 18 years o f age
and $4 for women under 18 years. When that law was declared
unconstitutional in 1923, there was nothing we could do to enforce
it. But as soon as the Supreme Court o f the United States revoked
itself in 1937 in a similar case, I revived the insular law and notified
all employers that the law was in full force and operation.
There were several actions instituted before the court against me
as commissioner o f labor. The employers got an injunction to pre
vent the enforcement o f the law, based on the allegations that the
law was unconstitutional and so declared in 1923 and that, no further
action having been taken since by any court that might legalize my
action or justify or warrant me in declaring the law in operation,
I could not enforce it. They also contended that the law was not
applicable to agriculture nor to agricultural industry; that tobacco
stripping was incidental to agriculture, and that i f it was any indus
try at all, it was an industry o f agricultural character. Other em
ployers claimed that the law was not applicable to home work.
There was a hearing and a trial. A ll the evidence was submitted.
A decision was rendered by the District Court o f San Juan to
the effect that the law was constitutional and that it was in full
force. However, the decision stated that it was not applicable to
home work because there was no possibility o f checking the hours
that the women were supposed to work and no possibility o f keeping
records. The court also decided that the law was applicable to
tobacco stripping as an industry.
The employers took an appeal to the Supreme Court against a part
o f the decision and I took an appeal myself against another part o f
the decision. In A pril o f this year the Supreme Court o f Puerto Eico
upheld our contention and decided that the Government o f Puerto
E ico was right in making the law applicable to home work and to
tobacco stripping, and that the law was constitutional.
The plan I submitted at that time, in order to make the law applica
ble to home work, was more or less th is: that we should take, let us
say, 50 woman workers in the shop and time them and find out how
much time was needed to make a certain number o f pieces. I f any
woman came in the morning and asked fo r work to be done in her
home, and she was given a bundle o f pieces (nightgowns, handker
chiefs, or whatever it w as), it must be marked 8 hours i f 8 hours were
required to make that work in the sh op ; and if they give the time in
the home to cooking or pressing or any other domestic work, it was
still 8 hours’ work whether it was finished in 2 days or a week. I
thought it was a simple, practical, and enforceable plan. Therefore.
72
LABOR LAWS AND THEIR ADMINISTRATION, 1940
we never asked Congress fo r this provision as to the piece-rate sys
tem, because we had found out that it was not a problem to enforce the
law on industrial home work based on the payment by the hour.
Now, if we did favor this change and demanded this amendment
of June 26th, it was because we were under the impression that while
there was the possibility o f paying less than the fixed rate o f the Fair
Labor Standards Act for certain industries that were unable to pay,
and were not in competition with mainland labor or industry, there
was still the possibility of several industries getting the minimum fixed
by law and more than the minimum fixed by the Fair Labor Standards
Act.
A couple o f months before the F air Labor Standards A ct became
operative in Puerto Eico, we made a brief study o f the law and found
that out o f nearly 600,000 employable workers in Puerto E ico a
little over 100,000 workers were affected by the F air Labor Standards
Act. W e claimed and are still claiming that the big problem in Puerto
Eico is not taking care o f this 100,000 workers but taking care, with
decent wages and good working conditions, o f over a h alf million
workers who get practically nothing in different industries, and that
legislative action on the part o f the insular legislature was needed to
take care o f this problem. W e have been submitting, with the aid
o f the Division o f Labor Standards o f the Department o f Labor o f
the United States, different bills each year, but have always failed to
get legislation providing minimum wages for the local industries— for
those in intrastate commerce.
Those 100,000 or more workers affected by the Fair Labor Stand
ards A ct were, in round numbers, as fo llo w s: 14,000 tobacco strippers;
19,000 workshop needle w orkers; 50,000 home needle workers; 16,000
sugarmill workers; 5,000 transportation workers; 127 makers o f hair
nets; 600 makers o f mother-of-pearl buttons; 650 workers in distilleries
and rum manufacturing; 400 workers in the men’s hat industry; 150
jewelry workers, diamond polishers, etc.
A s to tobacco stripping we worked out an amendment to the
definition o f what constituted an area o f production, and we suc
ceeded in getting that new definition, which practically comprised all
the farmers and even the tobacco dealers i f they managed to create
a first point o f concentration. So tobacco stripping is not a problem
n o w ; it is only partially so as to the manufacturers. Manufacturers
were not comprised in this new definition because they strip tobacco
fo r manufacturing purposes.
A s to the sugar mills, the sugar industry in Puerto E ico employs
during the crop o f the season from 120,000 to 130,000 people, including
those in the sugar mills as well as those in the fields. M ost o f the
latter are agricultural workers— cane cutters, etc. There are only
WAGE AND HOUR LEGISLATION
73
some 16,000 employed in the sugar mills, and since one-half o f them
were, when the law became operative in the first year, already getting
the 25-cent minimum or more, then there were only some 8,000 people
to be covered by the law. W e claim that sugar is a very rich indus
try that must and can pay, and should get no exemptions or no special
consideration out o f the F air Labor Standards Act.
In transportation we have people employed as dock workers, long
shoremen, and those in express companies who are affected by the law,
but they were getting more than the minimum fixed by law. There is
still some discussion as to the railroads in the sugar mills, but the
cases o f these people are pending before the District Court o f the
United States fo r Puerto Rico fo r decision.
As to the other groups, the makers o f hair nets and buttons had
to pay the minimum wage set up. W e also insisted that the dis
tilleries and rum manufacturers should pay the minimum. Then in
the jewelry and men’s hat businesses we insisted that they pay the
minimum wage.
The only big group we had was the needle workers, mostly women.
There were 19,000 in the shops and 50,000 scattered up in the moun
tains and towns, working an unlimited number o f hours and, o f course,
they need some protection. This industry has been operated fo r many
years in Puerto Rico on the basis o f contracts made with manufac
turers on the mainland, in different lines that do not compete at all
with continental industry, excepting children’s dresses, ladies’ dresses,
and two or three other lines. The rest, in our opinion, do not com
pete with mainland labor or industry, and they should get some special
consideration i f this industry is to survive in Puerto Rico. That was
our purpose in standing for this amendment.
Colonel Fleming did me the honor and gave me the privilege o f
serving as a member o f the special industry committee for Puerto
Rico, which is composed o f Monsignor Francis J. Haas, chairman;
Dr. Jose M. Gallardo, Commissioner o f Education o f Puerto R ico;
Martin Travieso, Judge o f the Supreme Court o f the Island—the
three representing the public; Mr. Dalrymple, Mr. Dubinsky, and
myself, representing labor; Miss Maris Luisa Arcelay, Mr. Frank
Mayfield, and Mr. P. J. Rosaly, representing the employers.
I want you to be sure that you have nothing to fear from unfair
competition. This committee can do nothing but recommend to Colonel
Fleming what its members think is fair. Colonel Fleming has the
authority to decide, and as long as the fate o f the workers o f Puerto
Rico and the industry o f Puerto R ico are in the hands o f Colonel
Fleming, you have nothing to fear as to the application o f this amend
ment to Puerto Rico. Besides, there is a provision in this amendment
to prevent disadvantageous competition against continental industry.
74
LABOR LAWS AND THEIR ADMINISTRATION, 1940
I want to make it clear to you that the only objection or opposition
to this amendment came from two concerns— the so-called radicals
and the so-called Puerto P ico Needle W orkers’ Cooperative in Sabana
Grande. This so-called cooperative, in which the workers are supposed
to be the owners, is some sort o f an organization to evade the law.
W hile it says the law should not be amended it proves its insincerity
by paying the women iy 2 cents an hour and the real owner, called the
manager, gets $10,000 a year. It distributes dividends o f $1 a year to
women getting iy 2 cents an hour. I have always claimed that this
cooperative is bringing its products to the same market as the regular
employers who are required to pay the minimum, and this cooperative
has no right to evade the law.
M inimum-Wage Legislation in the United States, September 1,1939,
to September 1, 1940
R e p o r t o f th e C o m m itte e o n M in im u m W a g e s ,
b y
F
r ie d a
S. M
il l e r
(N ew Y ork
D e p a r tm e n t o f L a b o r ) , C h a irm a n
[R e a d b y L ou ise S tit t]
Preservation o f Existing Labor Standards
Twenty-two years ago a speaker addressing the fifth annual con
vention o f the Association o f Governmental Labor Officials said,
“ The mistakes made in England and France during the first 2 years
o f the war * * * should be a lesson to the members o f this Asso
ciation to insist that the safeguards that have been placed around the
workers o f this country are rigidly lived up to during this great
stress in our industrial life.” Probably few o f the delegates who
listened to the words o f that speaker would have believed that by
the time the twenty-sixth meeting o f this Association rolled around
the greater part o f the world would again be at war and the United
States would be engaged in a defense program that once more would
challenge the unrelenting vigilance o f the members o f this group to
preserve existing labor standards in the face o f the urgent demand
fo r rapid increase in production. Unhappily, the situation that
seemed impossible 22 years ago is a reality today. The President o f
the United States and the Secretary o f Labor, like the speaker o f
tw o decades ago, have urged that, in spite o f the emergency, all exist
ing labor safeguards be rigidly maintained. Fortunately, since that
earlier war a body o f labor legislation has been enacted that i f en
forced w ill do much to assure the preservation o f fair working con
ditions fo r the millions o f workers who may be engaged in production
fo r defense.
WAGE AND HOUR LEGISLATION
75
Progress in Minimum-Wage Legislation Since the W ar o f 1914-18
The progress made in the field o f minimum-wage legislation is
illustrative o f the great development that has taken place in all social
legislation in the past 20 years. In 1918 only 12 States1 and the
District o f Columbia had passed minimum-wage laws for women.
There was no Federal legislation whatever controlling wages in p ri
vate industry. Today 26 States, the District o f Columbia, Alaska,
and Puerto Eico have minimum-wage laws for women. One o f these,
that o f Connecticut, covers men as well. The potential coverage o f
these laws is four times as great as that o f the laws o f 1918. A ctivity
under the State laws fo r women has greatly increased since the United
States Supreme Court in 1937 removed all doubt as to the constitu
tionality o f such legislation. One hundred and thirty-one (131)
wage orders have been issued by the States, as compared with 38 that
were in effect in 1918. Approximately a million and a quarter women
are covered today by wage orders and flat-rate laws. In 1918 roughly
a third o f that number had similar protection.
There is no question about the increased protection o f women today
by State and Federal minimum-wage legislation, but coverage even
o f women still is far from complete. Hundreds o f thousands o f
women, who comprise a large proportion o f the workers in the serv
ice industries and who are not covered by Federal legislation, work
in States that have no minimum-wage laws or are employed as house
hold workers, a group usually exempt from such laws.
In 1918 probably only the most visionary members o f this Associa
tion dreamed o f the day when all workers, both men and women,
would be covered by a Federal minimum-wage law. In October 1938
approximately 11,000,000 workers employed in production for inter
state commerce were brought under the protection o f the F air Labor
Standards Act. Quite appropriately the Congress, which required
private employers to pay minimum wages, has provided also that
goods sold to the United States Government shall be made under fair
labor conditions. Under the Public Contracts Act, 31 wage deter
minations have been issued thus fa r by the Secretary o f Labor, setting
the rates that must be paid to workers on Government contracts. In
the industries affected an estimated million and a half workers are
employed.
One o f the most important functions o f this Association during
the coming year will be to prevent attempts to undermine the effec
tiveness o f this legislation by means o f weakening amendments or
1A rkansas, A rizon a , C a liforn ia , C olora d o, K ansas, M assa ch u setts, M in n esota , N ebraska,
O regon, U tah, W ash in g ton , and W iscon sin .
3 1 3 4 2 1 ° — 4 1 ------- 6
76
LABOR LAWS AND THEIR ADMINISTRATION, 1940
actual repeal. Already countless cries have been raised against the
so-called restrictive labor regulations which, we are told, will hope
lessly delay our defense program i f not rescinded. W e all remember
that during the earlier war four States passed laws giving their
governors power to suspend labor regulations. A fifth State placed
similar power in the hands o f a board representing employers and
workers with the State labor commissioner as chairman.
A n effective means o f counteracting propaganda in favor o f weak
ening amendments o f the F air Labor Standards A ct and the Public
Contracts A ct is to emphasize on every occasion that these laws are
in fact minimum-wage and not hour laws. Though scientific studies
and experience have proved that very long hours are less productive
than shorter hours, nothing in either o f the Federal minimum-wage
laws prohibits the employment o f workers for any period found to
be essential, and no absolute limit is placed by either act on the num
ber o f hours fo r which workers may be employed. Establishments
producing defense materials or manufacturing for Government con
tracts may employ workers fo r as many hours as the necessity o f the
situation requires, provided only that the provisions are met that
require at least time and one-half rates fo r all hours worked beyond
the basic number stipulated in the respective acts.
The Public Contracts A ct specifies 8 hours a day and 40 a week
as the standard, but the Secretary o f Labor is given power to permit
longer hours on condition that overtime rates are paid, a power she
exercised in September 1986, soon after the law was passed. Article
103 o f Regulation 504 states that “ Employees engaged in [producing
goods fo r Government contracts] may be employed in excess o f 8
hours in any 1 day or in excess o f 40 hours in any 1 week, provided
such persons shall be paid fo r any hours in excess o f such limits the
overtime rate o f pay which has been set therefor by the Secretary
o f Labor.” Obviously, amendment o f these laws in order to facilitate
increased production is not necessary.
Legislative Activities During 1940
Comparatively few State legislatures have been in session in 1940,
and no legislation has been passed that changes the 1939 status o f State
minimum-wage laws. Bills to extend the coverage o f existing laws
were introduced in several States and efforts were made in Kentucky
to weaken or repeal the present law. W age and hour bills modeled
after the F air Labor Standards A ct were introduced in the legislatures
o f Louisiana, New Jersey, New York, and South Carolina, but such o f
the bills as came to a vote were killed.
Scores o f amendments to the Fair Labor Standards A ct were offered
during the recent session o f Congress but only one was passed. This
WAGE AND HOUR LEGISLATION
77
pertains to setting minimum-wage rates for Puerto Rico and the
Virgin Islands, and calls fo r special industry committees on which
residents o f the Islands are represented to recommend rates fo r work
ers in these Islands. I f economic factors warrant, minimum-wage
rates may be less than the 30-cent statutory minimum, provided such
rates will not give industry in Puerto Rico or the V irgin Islands a
competitive advantage over industry on the mainland. This amend
ment to the F air Labor Standards A ct is the second to be adopted.
The first was approved August 9, 1939, and exempts from the wage
and hour provisions o f the act any switchboard operator employed
in a public telephone exchange that has less than 500 stations.
Minimum-Wage Standards Raised in 1940
Though no new States were added in the year to the list o f those
with minimum-wage laws, 9 orders have been issued since August
1939 that extend the benefits o f existing State laws to more than
75,000 women. W age boards in Massachusetts, New York, Ohio,
and Utah have submitted recommendations which, i f adopted, will
become the bases for wage orders covering additional thousands o f
women.
W age standards have been raised strikingly under the Fair Labor
Standards A ct since this Association met last September. On Octo
ber 24, 1939, the 30-cent statutory minimum wage, with overtime
rates fo r hours over 42, became effective. The Wage, and H our
Division estimated that more than 650,000 workers in Continental
United States probably received wage increases when the new rate
went into effect. Since September 1, 1939, 9 wage orders estab
lishing rates higher than 30 cents on recommendation of industry
committees have gone into effect, and a tenth order will become effec
tive on September 16. The W age and H our Division estimates that
more than 2 million workers are covered by these 10 wage orders,
approximately a quarter o f whom were entitled to direct wage in
creases as a result o f the rates established. The highest minimum
rate that can be set under the Fair Labor Standards A ct is 40 cents
an hour. This maximum standard has been established for approxi
mately 462,000 workers. When orders have been issued for the
additional six industries for which the Administrator has appointed
committees, probably another million and a half workers will be
entitled to minimum wages above 30 cents an hour.
Minimum-Wage Legislation and the Courts
Court cases, which all too successfully tied up minimum-wage activ
ity in several States during 1938 and 1939, have not characterized
the year 1940. This happy situation may be due to greater accept-
78
LABOR LAWS AND THEIR ADMINISTRATION, 1940
ance o f minimum-wage regulation on the part of employers, or
to the exercise o f greater care in the administration o f State laws,
thus affording less opportunity fo r successful attacks through the
courts. A t any rate, no m ajor court cases involving State minimumwage laws have been filed since our last meeting.
States are endeavoring more and more to control through wageorder provisions not only the actual wage rates but other conditions
o f employment that tend to reduce earnings below a living level.
A n example o f this is the guaranteed-weekly-wage provision, which
is an attempt to regularize wages by giving employers an incentive
to stabilize their businesses. The trend toward the establishment
o f a guaranteed wage by State orders was given an encouraging
impetus when in March 1940 the New Y ork Supreme Court, in
an Erie County case, held that the State minimum-wage order for
laundry occupations, which requires that a wage o f $14 be paid for
a week’s work o f 40 hours or less, is both valid and reasonable. The
Board o f Standards and Appeals o f New Y ork has taken a similar
position in respect to a guaranteed-wage provision o f the minimumwage order fo r the confectionery industry.
D uring the 4 years in which the Public Contracts A ct has been in
operation, practically no litigation involving that law has developed.
The one case that reached the United States Supreme Court was
settled in favor o f the Secretary o f Labor in A pril o f this year.
Labor in the steel industry was deprived o f the benefits o f this act
for more than a year as a result o f this case, which was brought by
seven steel companies. The contestants complained that the Depart
ment o f Labor had been arbitrary in prescribing so large an area as
13 States, part o f a fourteenth, and the District o f Columbia as a
“ locality” for which a single minimum rate was established. The
Supreme Court held that the companies had no standing to maintain
a suit, and the United States Court o f Appeals for the District o f
Columbia, acting on the mandate o f the Supreme Court, dissolved
the injunction which it previously had issued.
T o say that almost every important provision o f the Fair Labor
Standards A ct and interpretation issued by the W age and Hour
Division concerning it has been involved in court action is scarcely
an exaggeration. The successful record o f the W age and H our D i
vision in these cases is extremely encouraging. In a recent report
on litigation in which the act has been involved, Colonel Fleming
said, “ In almost every case the language o f the act, as construed for
enforcement by the W age and H our Division, has been sustained by
the courts.” Every Federal District Court, except one, before which
the constitutionality o f the act has been challenged has sustained it as
WAGE AND HOUR LEGISLATION
79
a valid regulation o f interstate commerce. The one court held that
the act did not apply to the circumstances o f the case; but the court
intimated that if it did apply the act was unconstitutional in such
application. A n appeal o f this case has been filed with the United
States Supreme Court. The action o f the courts during the past
year has had the effect o f strengthening rather than weakening the
position o f minimum-wage legislation in this country. In view o f
the long legal struggle through which State minimum-wage laws have
passed, the record o f the year may be viewed with satisfaction.
Enforcement o f Minimum-Wage Legislation
Minimum-wage legislation, like all other law, is effective only to
the extent to which it is enforced. During the recent years o f re
vived activity in minimum wage, many o f the States have intensified
their enforcement techniques. Increased appropriations have enabled
some States in the past year to achieve regular periodic inspections
o f all firms covered by minimum-wage orders, but a great number,
because o f insufficient funds and staff, still are working toward that
goal. This goal must be attained i f workers are to enjoy the full
benefits o f the law and if law-abiding employers are to be protected
against the competition o f those who do not comply.
A s an aid toward more uniform and adequate enforcement tech
niques a regional conference o f State minimum-wage inspectors—
the first o f its kind to be held— was called by the W omen’s Bureau
in February o f this year. More than 40 inspectors, representing the
minimum-wage divisions o f 6 States and the District o f Columbia,
met for 2 days in New Y ork City and discussed together their en
forcement problems and methods. Similar conferences w ill be held
in other parts o f the country as opportunity permits. The States
on the West coast already have requested that such a conference be
arranged fo r the minimum-wage inspectors in that area.
The W age and H our Division has greatly increased its facilities
fo r enforcement over those o f last year. Today 472 field investi
gators, as contrasted with 107 a year ago,, are on the staff o f the
Division. During the year authority fo r handling complaints has
been decentralized, and the speed with which cases are settled has
been correspondingly increased. Cooperative agreements under
which State labor departments make inspections and investigations
fo r the W age and H our Division and the Children’s Bureau have
been entered into during the year by three States, North Carolina,
Connecticut, and Minnesota, and the District o f Columbia. Though
regular routine inspection o f all firms covered by the act has not
yet been achieved, the D ivision is gradually approaching that goal.
80
LABOR LAWS AND THEIR ADMINISTRATION, 1940
Efforts are being made to inspect an entire industry, not merely
firms against which complaints have been filed, and to eliminate
in this way competition based on underpayment o f wages.
Since September 1, 1939, 465 civil suits have been instituted by the
Division, and 88 criminal cases have been prosecuted. In all, this
is 488 more cases brought to court this year than during the first
year o f the law.
The benefits that minimum-wage laws bring to workers are graphi
cally illustrated by the amounts o f underpayment collected by State
and Federal authorities and restored to the workers who have earned
them. Complete data are not available for the States, but during
1939 more than a half million dollars o f underpayments was collected
fo r woman workers covered by minimum-wage orders in nine States
and the District o f Columbia fo r which such information is available.
The Public Contracts Division, since it began to function, has been
responsible fo r the restoration o f more than $300,000 to workers em
ployed on Government contracts. Since the Fair Labor Standards
A ct went into effect, well over $5,000,000 has been found due, o f
which nearly $2,700,000 was actually disbursed to employees. The
remainder is being paid in installments. O f the $2,700,000 which has
been paid, over $2,600,000 was paid between September 1, 1939, and
August 1, 1940. Thus the benefits o f greater earnings have been
obtained fo r workers not only through wage increases voluntarily
paid but also through wage restitutions compelled by the Department.
Conclusion
The year’s record in the field o f minimum wages has been good.
During the coming year most State legislatures as well as Congress
will be in session. Efforts may be made in the name o f patriotism
to slacken some o f the standards already established and to resist
the extension o f similar protection to additional workers. W ith
production and employment on the increase, no plausible argument
against minimum-wage legislation can be given, except employers’
reluctance to submit to governmental regulation. I f living costs
should rise, the need for setting a bottom to all wages would become
increasingly urgent. It is to be hoped, therefore, that more State
laws will be passed and that agencies responsible for the administra
tion o f such laws w ill extend as rapidly as possible the protection to
which workers are entitled by the issuance o f additional and more
effective wage orders. W e in the United States have an opportunity
to prove that a democracy can both meet the production demands that
adequate defense o f the country requires and preserve the well-being
o f its working citizens. The coming year w ill demonstrate the
degree to which we succeed.
WAGE AND HOUR LEGISLATION
81
Minimum-Wage Legislation in Canada, 1939-40
R e p o r t o f C o m m it t e e o n M in im u m W a g e
[R ea d by A dam B e ll]
A ll the Provinces o f Canada, with the exception of Prince Edward
Island, have minimum wage acts, and they apply to men as well as
women except in Nova Scotia. In New Brunswick, the Minimum
W age Act, 1930, fo r women has not been put in effect, and under the
section o f the Labor and Industrial Relations Act, 1938, permitting
the fixing o f minimum rates fo r both male and female workers, the
only orders apply to certain establishments or to a group o f estab
lishments in one district. In Ontario, the only order directly affect
ing men is one in the textile industry; Alberta and British Columbia
have separate statutes for men and women. In Alberta a general min
imum applicable to most industries has been fixed, while in British
Columbia minimum rates for men have been established only for a
limited number o f industries or occupations. In Manitoba, Quebec,
and Saskatchewan the orders apply to men as well as women.
Except fo r a new minimum wage act in Quebec which, when pro
claimed, will replace the Fair W age Act, 1935, the principal changes
in minimum-wage conditions in the past 12 months have been brought
about by regulation rather than legislation.
The new Quebec statute makes more definite provision for mini
mum wage-fixing machinery than the old act and indicates a tend
ency to place the responsibility fo r the fixing o f rates on represen
tative bodies. The act stipulates that unless exceptional circumstances
justify a speedier procedure, the minimum wage commission is to call a
conference o f an equal number o f representatives o f employers, em
ployees, and the public, or, in the case o f a particular industry, the
Commission may appoint a board representing the employers and
employed to hear interested parties and to make recommendations
to the commission as to minimum rates and working conditions. The
commission, however, is not bound by the recommendations o f a con
ference or board but may amend or reject them.
Last year at this time there were two general orders under the
Quebec Fair W age Act, one applying outside cities and towns to
female employees and males in the same occupations, with some excep
tions, in factories and shops, and the other to all men and women em
ployed in industrial and commercial establishments in cities and
towns. Several special orders related to specified industries or occu
pations. The order fo r rural districts has been repealed and the
general order covering cities has been applied throughout the P rov
ince. Under this order minimum rates vary in the four zones into
which the Province is divided, and in the case o f factory workers
82
LABOR LAWS AND THEIR ADMINISTRATION,
1940
and some others they apply to a 48-hour week, with time and a half
for overtime. Several rules o f interpretation have been issued designed
to make the order more workable and effective. New special orders
made during the year apply to the follow ing industries, in some cases
only within a certain district, in others throughout the P rovince: Can
neries, laundries, dyeworks, manufacture o f wooden boxes and shocks,
mattresses and upholstered furniture, foundries, retail food stores,
and tailoring and dressmaking.
The Saskatchewan Minimum W age A ct was revised this year to
extend its industrial application somewhat and to apply it to male as
well as female workers without the necessity o f so applying it by
order in council. The new orders, like those in force since January,
1938, cover all workers in cities and in the two largest towns who are
employed in retail, wholesale, and mail-order establishments; facto
ries, fuel, lumber, and building supply yards; places where warehous
ing, cartage, and delivery are carried o n ; hotels and boarding houses
and restaurants catering to more than five persons; beauty parlors
and barber shops, theaters, and dance halls. Rates for overtime after
48 hours have been increased for all classes except in hotels and restau
rants, and there is no longer any distinction between the rates for minors
and adults when inexperienced. Better protection is given, too,
through a change in the definition o f part-time work in all workplaces
except hotels and restaurants. Formerly, the ordinary minimum ap
plied to a workweek o f from 43 to 48 hours and part-time rates applied
to any period less than 43 hours. Now the ordinary minimum is pay
able for a maximum o f 48 hours, or the normal workweek o f the estab
lishment if less than 48, and also fo r any workweek which is not
reduced by 6 hours or more from the normal workweek.
In Alberta the learning period fo r women in restaurants has been
reduced from 6 to 3 months, and the 30-cent hourly minimum for
part-time workers is now payable to any woman working less than
8 hours a day, or 48 hours a week, instead o f only to those working
less than 40 hours.
In British Columbia, the 75-cent minimum for carpenters which
was already in effect in Vancouver and district, and some other
sections o f the southern part o f the Province, now applies in certain
cities in Vancouver Island. The same minimum is fixed fo r painters,
decorators, and paperhangers in the Vancouver district. The mini
mum rate for bus drivers on Vancouver Island was raised during
the year, and a new order fixes an hourly minimum o f 35 cents for
guards not covered by other orders who watch or control the premises
o f more than one employer. F or women employed in places o f
amusement the weekly minimum o f $14.25 is now applied, regardless
o f the age o f the worker, to a week o f 40 hours or more, instead
WAGE AND HOUR LEGISLATION
83
o f to one o f more than 36 hours for those 18 years o f age and over,
with a lower rate for younger girls. The part-time rate is raised
from 30 to 35 cents an hour.
In addition to the above changes in the legislation and regulations,
there may be changes in actual conditions in some Provinces due to
the demands o f war industries that render the regulation o f minimum
wages not so effective in protecting the worker as under normal
conditions. Where special concessions have been granted to permit
increased production and the control o f overtime is not exercised
through direct limitation o f hours or by the imposition o f high
punitive rates fo r overtime, there may be inadequate return to the
worker in wages in proportion to the hours and effort spent as well
as in proportion to his productivity.
I t is impossible, however, to make a general statement at this time
as to the effect o f war demands. The Dominion Government in an
order in council o f June 19, 1940, made a formal declaration o f what
it considered labor policy should be during the war. It was declared
“ that every effort should be made to maintain fair and reasonable
standards o f wages and o f other working conditions and that hours
o f work should not be unduly extended but that where increased
output is desired, it should be secured by the adoption o f a system
o f two or three shifts. Experience during the last war showed that
an undue lengthening o f working hours results in too great fatigue
and in a diminution o f output * * * that increases in the cost
o f living as ascertained by returns made to the Dominion Govern
ment should be offset by adjustments in remuneration at reasonable
intervals.”
Discussion
Mr. L u b i n . I should like to raise the question as to whether or
not the various States are experiencing any tendency on the part
o f organized or unorganized labor to secure advance protection against
rises in the cost o f living through adjustments o f the minimum-wage
acts. In other words, in collective bargaining there has been a very
definite evidence o f organized labor insisting that their standard
o f living be protected if the cost o f living should rise during the
emergency. There is no doubt that it will. Rents have already
started to go up in certain localities.
Is there any device available in these States for automatic changes,
i f and when it should become necessary?
M r . M cK i n l e y (Arkansas). In Arkansas it would be difficult, o f
course, to do it. In our State under the law the industrial welfare
commission makes investigations in each industry. Therefore, under
our general rule that would have to be done in each industry in each
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LABOR LAWS AND THEIR ADMINISTRATION,
1940
locality. The expense o f it is prohibitive with the appropriation
given. W e are asking the next legislature to so amend that law that
we can make a State-wide adjustment according to population, but
I do not know what is going to be the result o f it. W ithin the last
year or more there has been a revival o f that idea that the minimumwage law fo r women is discriminatory as to sex, and that is particu
larly true o f women’s professional clubs. I do not know i f it will
have any result in changing our present law, but unless we can get
a change in the law we will be rather handicapped.
Hearings that were held in Little Rock and Fort Smith cost us
about $500 and we have only $4,000 for maintenance. So if we had
an amendment to that law we might have hearings such as the W age
and H our Division has now, and include all industry and take into
consideration the cost o f living in smaller and less populated com
munities. W e will ask the legislature to do that.
Mr. F l y n n (New Jersey). New Jersey has not had any request
fo r such adjustment. Possibly we will have, and we think we have
automatically taken care o f the problem that the gentleman from
Arkansas has raised. A couple o f years ago, without an appropria
tion, the good women o f New Jersey, sponsored by the Consumers’
League, made a very comprehensive study. The department o f agri
culture keeps a constant check on the index o f the cost o f living. W e
have taken those two together and have arrived at the present costof-livin g figure for woman workers in New Jersey.
A ll o f our wage orders have now passed their first-year stage. W e
have the model law. The wage board can be reconvened at any time,
and although there has been no demand we have that in mind. W e
realize the possible necessity o f an adjustment in the present cost-ofliving figure, and we think, as far as statistics are concerned or any
thing else but the consideration o f public hearings, we could handle
it almost immediately.
Mr. L u b i n . Miss Stitt, do you know where we may find ourselves in
situations where these minimum-wage laws would be dead letters
under any radical change ?
Miss S t it t . I think it is possible some States would be affected in
such a way. However, most o f the State laws do provide for costof-livin g studies, and there seems to be an increased interest in such
studies and more help in making them. The States are getting busy
right now. In New York, for instance, the division o f women in
industry and minimum wage revises the cost-of-living study for single
women every year, so it can keep abreast o f changes in cost o f living.
It is true that most o f the States provide fo r calling o f w^age boards
to recommend readjustment o f rates. W e made an analysis last year
WAGE AND HOUR LEGISLATION
85
as to what happened during the last W orld W ar, and we found ad
justments were not made very quickly and boards were not set up
as quickly as changes in the cost o f living would seem to require.
A t the Ninth Minimum W age Conference we talked about the desira
bility o f getting wage boards into action quickly i f there was a
marked change in the cost o f living. Some o f the present wage rates
will be too low if there is a marked change in the cost o f living, and
quick adjustment will be a problem confronting the minimum-wage
administrators.
Social Security
Social Security Legislation, and A dm inistration
By
A
r t h u r
A
lt m e y e r
,
C h a irm a n S o cia l S e c u r it y B o a r d
A s I have said on previous occasions, I recognize fully that the social
insurance features o f the Social Security Act are a species o f labor
legislation. They partake o f some o f the characteristics o f welfare
legislation as well, and that o f course makes it difficult to slice the
administrative pie, so to speak. The question arises whether social
insurance laws should be administered by the Federal Department o f
Labor or the Federal Security Agency, which includes welfare legis
lation. However', as in all things, not only in labor legislation but in
all human activities, we have a seamless web and wherever you slice
it you do some violence to the fabric. Going back to the analogy o f
slicing the administrative pie, I may say it is like slicing a custard
pie where the edges all run together.
W e do recognize the close affinity between the administration o f
these social insurance laws and the administration o f labor laws, and
we are doing everything in our power to maintain friendly construc
tive relations with the Federal Department o f Labor; and I believe
that the State unemployment agencies, when they are separate from
the State departments o f labor, are undertaking to do the same thing.
I should like to discuss the developments o f the last 2 years since I
spoke to this group in South Carolina. A s you probably know in a
general way, and some o f you in a much more specific way, there has
been a great development in the old-age insurance system and it has
been converted into the old-age and survivors’ insurance through
amendments at the 1939 session o f Congress. That represents a tre
mendous change in the character o f that law which I do not believe
is yet generally recognized. It is still thought o f as old-age retirement,
when as a matter o f fact the survivors’ benefits are fully as important.
1 mean the widows’ and orphans’ benefits o f those insured workers
who die before or after reaching retirement age.
W e have today approximately 51 million social security accounts
set up in our central office. When I spoke to you in South Carolina
2 years ago we had 41 million. That is an increase o f 10 million due
to new persons coming into the labor market and the unemployed
obtaining employment. However, that does not mean that at any one
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SOCIAL SECURITY
87
time there are 51 million workers in insured employment. There are
about 32 million at any one time, but in the course o f the years since
this law has been in effect many more persons have been in and out
o f insured employment and have acquired some benefit rights.
I should like to sketch briefly the changes made by the 1939 Con
gress in this law. First, there was extension o f coverage, not occu
pational so much, although banks and building and loan associations
were included, but, most important o f all, persons who already had
reached the age o f 65 when the law went into effect were brought
into coverage. Under the law as originally written a person over
65 years o f age could not possibly have developed any benefit rights,
but now any person in an insured employment regardless o f his
age can develop the right to a retirement benefit and survivors’
benefits.
So far as occiipations are concerned, unfortunately there was
retrogression rather than progress. There were excluded various
types o f semiagricultural undertakings— the sort it has been at
tempted to exclude from coverage under the Wages and Hours A ct
and from the jurisdiction o f the National Labor Relations Board.
The Board, o f course, recommends expansion rather than limitation
in the coverage o f agricultural pursuits, at least to the extent that
it includes large-scale industrial types o f operation which someone
has said partake o f factory operations without a roof-—factories in
the field.
The benefits payable under the amended old age and survivors’
program are larger in amount during the earlier years and somewhat
smaller in later years fo r younger persons. A distinction is made
between single and married persons. In the later years the benefits
fo r married persons are as large as they would have been under the
earlier law, but the benefits in the earlier years are much more liberal.
Then there have been added these benefits fo r widows and orphans,
and in some cases fo r dependent parents if they are eligible.
These benefits fo r survivors have been added and take the place o f
lump-sum payments under the original law. The original law pro
vided fo r refund o f contributions, and as the years progressed those
refunds would grow larger and larger, but now these survivors’
benefits have been substituted for those refunds, which in a great
many cases would g o to the estates o f the deceased persons and have
no social value so far as affording protection is concerned. The
result o f the amendment briefly then is this: Y ou have a much
greater insurance element and a much lesser savings-bank element
in the Federal old age and survivors’ insurance system; you have a
much more liberal benefit allowance in the earlier years and less fo r
the single person in later years; but over the whole period o f de-
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LABOR LAWS AND THEIR ADMINISTRATION, 1940
veloping maturity the total cost remains the same and the average
cost remains the same, in fact somewhat less. A s a result o f these
changes you do have a more socially protective law than you had
before.
One great advantage aside from the great social advantages I have
just mentioned (and I might say that these changes were made upon
the recommendation o f a representative advisory council consisting
o f employers, organized labor, and informed persons from the socalled public group) is that it has taken the Federal old age and
survivors’ insurance out o f politics, at least up to today. Perhaps
we should keep our fingers crossed, because in 1935 it was plunged
into politics. Y ou may recall the pay-envelope campaign which did
a great deal to educate the people as to the advantages o f old-age
insurance. W e have reason to .believe that these changes have taken
Federal old age and survivors’ insurance pretty largely out o f the
realm o f party politics, and I feel confident that the adherents o f
all parties are only too glad that is the case.
There is one great problem confronting us, it seems to me, in this
field o f old-age retirement, and that is the overlapping protection
that results from the fact that you have various systems o f Federal
and State retirement plans and you also have other species o f social
insurance, so to speak, such as veterans’ benefits and workmen’s
compensation. The result is that in some instances the same person
will really be protected under two policies. Take for example the
mine disaster which occurred in West Virginia and Ohio. A great
many o f those persons who were killed were insured not only under
Federal but also under State workmen’s compensation laws and in
some cases the amount o f benefits exceeded rather sizably the wage
loss.
Fundamentally, o f course, the principle o f social insurance is that
it is insurance against an economic loss. I t is not a lottery where
you can take out as many tickets as you want and if you win on two
you are that much to the good. It is a system o f social protection
intended to furnish protection in proportion to the loss sustained.
The same result is possible in the case of a veteran. A veteran
who dies may leave dependents who qualify under the veterans’ laws
and also under the Federal old age and survivors’ laws. Likewise there
is the case o f those who come under both the Federal and State retire
ment systems.
Y ou also have the reverse picture o f persons qualifying for no
system. A person may quit his job before he has acquired any vested
rights under the system and go into private employment covered by
the Federal old age and survivors’ insurance but not be there long
SOCIAL SECURITY
89
enough to acquire any rights. In that case the individual falls
between two stools.
There is, therefore, great need fo r coordination and integration
o f systems providing old age and survivors’ insurance. I t seems to
me that what we should aim fo r is to have a basic insurance system.
The Federal old age and survivors’ insurance should operate as a
basic protection for all workers, and superimposed on that system
there should be these special retirement systems providing extra
protection for the extra money paid by the insured or by his em
ployer, or by unit o f government i f the person happened to be work
ing fo r a local, State, or Federal unit o f the government. In that
way we would get the maximum amount o f social protection at the
minimum over-all cost.
I should like to speak briefly, too, about the developments in the
field o f unemployment compensation. There have been paid out by
the 51 unemployment compensation agencies— 18 States, the District
o f Columbia, Hawaii, and Alaska— $1,061,000,000. There is being
paid out currently about $12,000,000 a week to approximately
1,200,000 unemployed persons. This year the total benefit payments
probably will approximate $750,000,000. Therefore, this system o f
unemployment compensation that has been developed in this country
has been paying sizable amounts and furnishing sizable protection
against unemployment. I should like to come back to unemploy
ment compensation a little later because I want to make some com
ments on the future o f social security, but before doing so I want to
say a word about the Employment Service.
A s you know, payment o f unemployment compensation benefits
is made through the public employment office system, and necessarily
so. In no country in the world has it ever been attempted, so far as
I can recall, to pay benefits except through a public employment
office system.
When the Social Security A ct was passed, as you know, we had a
United States Employment Service already in existence and which
had been in existence more or less since 1917 but had gone into a
period o f not so innocuous desuetude from the last W orld W ar up
to 1983. But beginning, in 1933, with the passage o f the W agnerPeyser A ct and the development o f the public works program there
was a very great and significant development in the establishment o f
a Nation-wide employment service. When the Social Security A ct
was passed and the State laws were enacted under the stimulus o f
the Social Security Act, the very first question o f policy that con
fronted the Board was whether or not it would permit the payment
o f benefits through facilities other than public employment offices,
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LABOR LAWS AND THEIR ADMINISTRATION,
1940
and it ruled that it would not. The second question raised was
whether it would permit payment through a public employment
office not affiliated with the United States Employment Service; and
the Board again ruled that it would not. Through the advent o f the
Unemployment Compensation A ct there was new life infused into
the United States Employment Service, under which is now included
all o f the affiliated State employment service offices, so that today
there are 1,500 full-time public employment offices throughout this
country and 3,000 points visited regularly by itinerant officials. So
that we do have today, I think, a pretty effective Nation-wide public
employment office system.
The United States Employment Service, as you know, was trans
ferred from the Department o f Labor to the Social Security Board
a year ago last July. There was great fear at that time that the
transfer might mean that the placement function would suffer be
cause o f the immediate and pressing demands for the payment o f
unemployment compensation benefits fully and promptly. I am
happy to report to you that, far from that being the case, there
has been an increased development in placement activity since the
transfer has occurred. Not because o f the transfer, I hasten to say,
because we are not taking any credit for that. That would have
come anyway, I think we will all agree. State and Federal officials
recognized the necessity fo r placing emphasis on placement o f the
unemployed persons and finding jobs fo r them rather than paying
compensation fo r unemployment. So in the last year there were
3!/2 million placements made through these public placement offices,
and the volume has been greater month by month than ever before.
This in some measure is due to the improved employment situation.
However, the quality o f placements has improved too.
Now 70 percent o f the placements are made in private employment
as contrasted with public employment. Furthermore, there is a
greater proportion o f placements o f skilled workers. A third o f a
million skilled workers were placed during the last fiscal year. And,
interestingly enough, in recent months, particularly with the develop
ment o f the defense program, a greater proportion o f older workers
are being placed, because it has been found that there is a greater
proportion o f older workers (45 years and over) among the skilled
workers registered at the public employment service offices. So
these older workers who are all-round skilled workers are coming
into their own at last, which fact I am sure is a great source o f
satisfaction to all o f us.
I should like in that connection to say a word about the role o f
the Employment Service in the national defense program. Down
to date, o f course, the labor requirements involved in the defense
SOCIAL SECURITY
91
program are by no means fully operative. W e still have the real
test to meet as to whether we can properly organize and maintain
an orderly labor market. I have confidence that we can.
In these initial stages the developments, so far as the E m ploy
ment Service is concerned, have been somewhat as follow s: The
United States Civil Service Commission felt the first impact be
cause o f the fact that the civil-service law covered the operations
at the navy yards, arsenals, and other Government institutions in
volved in the defense program. Their registers proved to be inade
quate in most instances, and therefore it was necessary to ask the
Employment Service to assist in the recruitment o f workers. A
very satisfactory working arrangement was developed, with the re
sult that that first impact was met measurably well, although there
are still shortages in highly specialized lines and unique fields, such
as naval and army construction, but generally speaking no general
labor shortage has developed in this country.
It is hoped that through the Employment Service the maximum
utilization o f the labor force o f this country can be obtained with
as little disruption to industry, to workers, and to their families as
possible.
Last A pril an inventory was made o f all o f the active registrants,
numbering over 5 millions. It was found necessary to reinterview
a great many o f those applicants because o f the fact that incomplete
interviews were had at the time o f first application. The reason
was that at that time there was such a glut in the labor market there
was no advantage in taking a complete record o f a person, particu
larly when it was a matter o f what the Employment Service calls
technically a mass lay-off, with the expectation o f being taken back
by the same employer.
I t was necessary, then, to start a campaign o f reinterviewing in
order to make records more complete and available for accurate
placement purposes. That is still in process although very largely
completed.
Another development in the field o f the Employment Service in
its relationship to the defense program was that a study was made
o f the essential occupations, numbering about 268, that might be
come bottlenecks in the defense program. Special attention was
given to the study by State agencies. They made a special effort
to comb through their active files and to make contacts with local
labor organizations, to the end o f getting as complete a registration
as possible o f persons who were skilled in these so-called bottleneck
occupations.
Furthermore, the job analyses that had been carried on previously
by the Employment Service, and which resulted in an Occupational
3 1 3 4 2 1 ° — 4 1 -------7
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LABOR LAWS AND THEIR ADMINISTRATION, 1940
Dictionary, have been utilized for an analysis o f these bottleneck
occupations, so that employers can be served more effectively when
a person not meeting all the requirements o f a particular occupation,
but only some o f the requirements, is available. Putting it another
way, through information obtained from the Occupational D iction
ary the employer can adjust his occupations so as to make more
effective utilization o f the available fully skilled workers, using lesser
skilled workers fo r attendant and subsidiary operations. That has
been found very effective fo r meeting bottlenecks, rather than the
importation o f workers from other localities. A development oc
curred during the W orld W ar which was called dilution o f skilled
labor, and I think many times there was some misunderstanding.
Today, however, any adjustments in the use o f skilled workers and
semiskilled workers have been worked out, so far, to the mutual
satisfaction o f employers and organized labor.
There has also been the necessity, o f course, for developing a Nation
wide clearance system, and that is not fully developed by any means.
In the East there are four centers, and as the need develops Nation
wide clearance will be extended. O f course, during a period o f a
great surplus o f labor the need was not so great for this system, but as
the labor market tightens up the necessity for clearance will increase.
Before I close, I should like to say a word, as I intimated a few
minutes ago, about the future o f social security. I do not presume
to give you a blueprint on this subject, but rather a brief resume o f
some o f the things essential to a successful operation o f the Social
Security Act.
Naturally, I feel that under social insurance there should be pro
tection fo r workers against economic losses sustained from all im
portant causes, and we must include in that insurance workmen’s
compensation, unemployment compensation, old age and survivors’
benefits, and health insurance.
Under workmen’s compensation there has been progressive liberal
ization, and this will continue. However, I do not believe that we can
really claim complete success or be completely complacent about the
progress in the last 30 years since workmen’s compensation was first
set in operation.
There are only 10 State laws that have complete coverage o f occu
pational diseases. I f there is one thing that should be compensated,
it is a disease arising inevitably out o f the occupation o f the person.
In the case o f an accident you might argue negligence on the part o f
the worker himself or some cause not connected with the industry,
but you cannot argue that in the case o f silicosis, fo r example. In
fact, there are 24 laws that do not cover any occupational diseases
whatsoever. Some States cover certain types, but they do not have
all-inclusive coverage. They will list all sorts o f strange occupa-
SOCIAL SECURITY
93
tional diseases and carefully avoid silicosis because that is the great
occupational disease. So, I think there is room for increased
liberalization.
In the case o f death benefits in workmen’s compensation, New Y ork
and perhaps one or two other States have what you might call rea
sonably adequate death benefits, but for the most part the States
do not have adequate death benefits. In cases o f permanent total dis
ability and the more serious disabilities, most States do not provide
adequate compensation. So, there again there is room for improve
ment in workmen’s compensation.
W ith respect to old age and survivors’ insurance, I think a great
development will be an extension of coverage and an inclusion o f
permanent total disability not due to occupational causes.
In the case o f unemployment compensation, I think there is room
fo r great improvement. Today benefits in all States, without excep
tion, are wholly inadequate to meet a significant portion o f the social
costs o f unemployment. There is not a single State that can claim
anywhere near adequacy so far as unemployment compensation is con
cerned. I mean by this, concretely, that the majority o f the States
have a 2 or 3 weeks’ waiting period. There might have been at the
beginning administrative reasons for having a 2 or 3 weeks’ waiting
period, but there is no excuse now to have as long a waiting period as
that. It ought to be reduced to 1 week.
The minimum benefit provisions are so low in some States that
a great proportion o f the workers receive very insignificant benefits,
not enough to maintain them during the period o f unemployment.
In one State, 66% percent o f the benefits were under $6 a week.
A s regards duration o f benefits, in some States it is geared to the
amount o f employment that the person had in the so-called base year
and the maximum usually runs from 13 to 16 weeks. In one State
in the Middle West, 75 percent o f the workers exhaust their benefit
rights before they find another job.
A s regards the weekly rate o f compensation I have mentioned that
the minimum is inadequate, but I think the maximum is too. The
maximum payment in most States is $15 a week. Under workmen’s
compensation it is considerably higher, and as you know, the percent
age o f wage loss is usually 66% percent o f the coverage, whereas in
unemployment compensation it is 50 percent. Fortunately, we can
well have more adequate benefits without any increased cost to the
employer, because the current benefit payments average about 50
percent o f the current contributions and because there has been built
up already a reserve o f $1,750,000,000 which will be $2,000,000,000 by
January 1st o f next year. Now, that money is being sterilized to
some extent. Certainly it is not being used fo r the purpose levied,
which is to provide adequate protection to unemployed workers.
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LABOR LAWS AND THEIR ADMINISTRATION, 194 0
It seems to me there is a golden opportunity now to provide more
adequate benefits to the workers at no greater cost to the employers.
In fact, it may very well be that more adequate benefits can be pro
vided with some temporary reductions in cost to the employer be
cause o f the large reserve built up and the favorable employment
experience that we may expect in the next 2 or 3 years.
However, I should like to emphasize that 2.7 percent is the net
amount available for payment o f benefits. The other 0.3 percent goes
for administrative expenses o f the Federal and State governments. I
should like to say again that 2.7 percent is necessary for the payment
o f adequate benefits by and large. Now, there may be some States
with exceptionally favorable employment experience where the cost
would not be so great, but for the country as a whole I am convinced
that we should not expect to provide adequate benefits at less than 2.7
percent over a long period o f time.
In my opinion the primary purpose o f unemployment compensa
tion can be defeated i f we do not provide adequate unemployment
compensation to these persons fo r whom jobs cannot be found. I do
not wish to be misunderstood, as has happened in the past, as saying
that I am opposed to providing steady jobs fo r workers. I do not
think anybody believes that. O f course, a job is better than unem
ployment, but I say fo r those persons for whom jobs cannot be found
adequate unemployment compensation must be provided. That is
the primary purpose o f the unemployment compensation law, just
as the primary purpose o f the workmen’s compensation law is to pro
vide adequate compensation to those workers when all efforts at
accident prevention have failed.
The one big gap that is left in the social insurance field is health.
I am convinced that we will have some system o f spreading the cost
o f ill health in this country. That cost breaks down into two parts—
the wage loss and the cost o f proper medical care. Sometimes those
two features are confused. They can be distinguished and in our
thinking should be distinguished.
When it comes to medical care, you know there is great fear that
any system o f spreading costs may interfere with the free choice o f
a physician and the personal relationship between the physician
and the patient. In my opinion, the providing o f a systematic plan
for spreading the cost o f medical care should be possible without
interfering in any way, and in fact in such a way as to promote better
medical care and closer personal relationship between the physician
and the patient.
In all this discussion as to the future o f social security, I should
like to make it clear that what we are talking about, after all, is a
minimum basic economic security fo r our people. W e are not talking
SOCIAL SECURITY
95
o f an ideal where no one any longer has to depend upon his individual
efforts to provide security for himself and family. It is a very m ini
mum basic security that we are talking about, upon which a person
has a better opportunity to build a more ideal life through his own
efforts. Therefore, rather than being a deterrent to individual ini
tiative and thrift, it is a great incentive.
Furthermore, so far as the relationship o f social security and na
tional security is concerned, I think we all would agree that national
security depends upon our people being well housed, well clothed,
and well fed. W e cannot have national security or prepare properly
fo r national defense when our people are ill-housed, ill-clothed, and
511-fed. So to the extent that social security does provide these
minimum essentials o f human existence, to that extent it is a great
promoter o f national security.
Discussion
Chairman W rabetz . Thank you, Mr. Altmeyer, for your very clear
exposition o f the present situation and what may occur in the future.
T o me it is very encouraging, because we in Wisconsin agree very
heartily with most o f your views, particularly in the liberalization
o f benefits. Laws must provide more adequate benefits, both per
week and fo r a greater number o f weeks, especially in the field o f
unemployment compensation.
This subject is to be discussed by some members o f this organiza
tion. First o f all, Mr. Thomas Morton, o f Virginia, will discuss this
paper.
M r . M orton . In Virginia, the commissioner o f labor is a member
o f the unemployment compensation commission by virtue o f his office.
I do not know whether that is true in other States or not. On the
basis o f my experience from serving in this capacity, I wish to make
a few observations on certain questions o f Federal-State relationships
in the administration o f the unemployment compensation program.
Also, I wish to make some observations on the coordination o f unem
ployment compensation with the employment service.
Those instrumental in fram ing and securing the passage o f the
Federal Social Security A ct recognized: First, that unemployment
is a Nation-wide problem, and that Federal action was necessary to
overcome competitive conditions as between States and to set up a
Nation-wide program in a short period o f time; second, that because
o f the wide variety o f industrial conditions and economic problems
in the various States, the most suitable type o f system would be one
that was Nation-wide but organized on a State basis; and third, that
a certain amount o f Federal supervision and control is desirable.
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1940
The three purposes outlined above were attained by a Federal
tax on pay rolls o f employers; a provision that employers could de
duct from this tax, not to exceed 90 percent o f its total, the taxes
paid under State unemployment compensation acts that had been
approved by the Federal Social Security B oa rd ; and a proviso that
out o f the 10 percent o f the pay-roll tax retained in the Federal
Treasury the Board would make grants to the States fo r the admin
istration o f their systems.
From the above it seems to me that it is clearly the intention o f the
Federal Social Security A c t: First, that no benefits are to be paid
by the Federal Government; second, that its administration shall be
on a decentralized State basis; third, that there shall be a certain
amount o f Federal supervision and control for two basic reasons:
(1) to secure some reasonable degree o f uniformity in the provisions
o f the State laws and in their administration and standards o f
service; (2) to secure proper and efficient administration o f State laws,
to the end that eligible claimants shall receive full payment o f
compensation benefits when due.
The future o f social security depends, I believe, very largely on the
degree o f perfection that can be attained by the Federal and State
Governments in working out this problem. As a member o f the
unemployment compensation commission, I want to pay tribute to
the personnel from the national office who contact us. I f they were
to act in an arbitrary manner we would be very much displeased.
They are excellent in their manner. I call attention to this because
it is essential, in my opinion, to the success o f social security.
The question is just how much Federal control and supervision are
necessary to attain these ends. I recognize that there is the problem
o f the expenditure o f Federal funds by State officials, and that there
has been a tendency to increase Federal control and supervision over
the State administrative agencies. Federal control should be kept
to a minimum, and the details o f administration should be left to
the State agencies. But the question still remains o f how to deter
mine at what point Federal control and supervision should stop. O f
course, there are certain specific provisions o f the law that must be
carried out, but in the administration o f these I think the fundamental
purposes o f the whole law must be kept in mind. I f the point is
reached where State action becomes so circumscribed by Federal
regulations and control that the State officials are merely acting as
agents o f the Federal Social Security Board, then this would result
essentially in the States acting fo r the Federal Government in the
payment o f benefits and this would be contrary to the fundamental
premise o f the Federal act that no benefits are to be paid by the Federal
Government. It would also mean that, instead o f having a national
SOCIAL SECURITY
97
system o f unemployment compensation organized and administered
on a decentralized State basis in accordance with the fundamental
purpose o f the law, we would have a national system administered
by State officials acting as agents o f the Federal Government.
The effective administration o f any law or agency requires an
efficient staff. Here again there are certain provisions o f the law
which must be met, but I submit that a civil service or merit system
has its defects just as any other system, and that the States should
be given a very wide latitude with respect to the type o f merit sys
tem established. A fter all, from a Federal standpoint, the chief test
to be applied here, and this is implicit in the very purpose o f the
whole system, is, Does the State so administer its act that eligible
claimants receive full payment o f benefits when due and at a mini
mum administrative cost? In other words, State agencies should
be adequately staffed with efficient personnel as measured by actual
results and administrative costs.
I do not think enough leeway has been left fo r the States to act.
F or instance, I refer to the merit plan in Virginia and in other States.
I think decisions on those who should be required to take examinations
and those who may be exempted should be left more largely to the
States. I realize there are lots o f different conditions which require
special action, such as the case may be in any one o f the States. W hat
would apply in California may not apply in Virginia. I believe the
States ought to have more to say, and in that particular respect I
believe the Board has been too tight on them.
I take it that Mr. Altmeyer (or anybody else) in these discussions
wants our opinions and does not want us to agree with him. I say
that, even as big as the Social Security Board is, it can make mistakes.
D o not let us ever get it in our heads that civil service is a “cureall” fo r everything. It has its defects, I say, just as any other sys
tem. I know we have to have certain national standards, and I think
that is essential. However, within those standards I think we ought
to have a little more leeway.
The question o f the integration o f unemployment compensation
with the placement functions o f the public employment service is
very important. This integration on the Federal level was a very
important development and furnished the initiative and the oppor
tunity for the States to follow suit. Unemployment compensation
is not a substitute fo r employment and never can be. The employ
ment service not only must serve as the agency through which bene
fits are paid, but also must act as a placement agency to direct workers
to jobs for which they are best fitted.
The future o f unemployment compensation, I believe, to a very
large extent depends upon its being administered fairly so that the
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1940
beneficiary gets everything that is coming to him, but the time has
come when every honest man and woman should be very active to see
that this law is not abused.
W e have come in touch with cases where the law has been abused.
W e want the worker to get every cent coming to him, but we do not
want workers who are not entitled to benefits to get them. There
was one case where the sheriff deliberately let a man out o f jail to
report, then locked him up again. Let us enforce this law in the
proper way. I think the future o f it depends very largely on just
that.
The placement functions o f the public employment service must
be further developed. I mean by that that there has been a tendency to
use private employment agencies when the public agencies, that are
costing the public a lot o f money, are available without any cost to
employee or employer.
In view o f the European crisis and the increase o f employment,
the placement functions o f the service will greatly increase in im
portance and the State and Federal Governments must cooperate to
meet this opportunity. Every effort must be made to acquaint em
ployers with the facilities existing in the various communities that
can assist them in solving their problem o f finding competent workers.
I was careful in making that observation, because we have not sold
the employment service everywhere. Some o f the people whom we
are trying to serve do not seem to understand just what it is all about.
W e have had the hardest job in selling the employment service to our
agricultural group, especially. They say, “ F or 30 years we have been
dealing with these road bosses.” W e are agreed that this should be
changed, but it hasi to be done gradually.
W ith the statistics available through unemployment compensation
administration and the file o f the employment service, State agencies
have a complete bill o f goods to sell employers.
The employment service o f the future must become more and more
a place where workers may go to receive counsel and intelligent advice
that will help them to solve their problems in finding and keeping
jobs. The system o f intelligent counseling for youths who have grad
uated from high schools and colleges without any objective viewpoint
as to future employment should be further developed and expanded.
There are tremendous opportunities in this field. These functions
should be coordinated with vocational education, apprentice training,
and the activities o f the National Youth Administration.
The future o f this great movement that we are discussing this morn
ing, I believe, Mr. Altmeyer, will depend very largely upon the success
that we attain in the coordination o f and the cooperation with all o f
these agencies, Federal and State.
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99
Chairman W r a b e t z . I am sorry Mr. Morton has not had successful
experience with civil service. W e in Wisconsin have been particularly
fortunate in that respect. W e have a very high type o f employment
system which eliminates political manipulation. W e will conclude
this phase o f the program with further discussion by Mr. Adams
o f the Utah Industrial Commission.
Mr. A d a m s . I wish to discuss some o f the salient factors that, in
my opinion, are important at this time and should bear consideration
in view o f what is going on in the national defense program, and
the possible repercussions that will inevitably follow after the party
is over.
I should like to discuss with you the question (now under con
siderable discussion) o f a reduction o f tax rates for employers, o f
employer experience rating, as well as minimum benefit standards,
protection o f benefit rights o f workers in the national defense pro
gram, and the employment service and its relationship to the over-a 11
administration.
W e have heard a great deal about the question o f tax reduction
for employers. That question was up before the Congress o f the
United States a little over a year ago, I believe, when I had the
privilege o f appearing before the Senate Finance Committee on that
question.
General reduction o f the tax, in my opinion, is a dangerous step
at this time.
I do not believe we have had sufficient benefit experi
ence to move into such a general tax reduction and at the same time
protect the benefit rights o f workers. This so-called reduction may
in many instances work a severe hardship on the larger groups o f
employers. It has a direct tie-in and relationship with employer
experience rating.
However, in regard to the pay-roll tax on employers, I believe
tremendous strides can be made if a system could be devised for the
levying o f one tax, and the collection o f that tax by one agency,
for both old-age insurance and unemployment compensation. It
would eliminate a tremendous amount o f duplication, in that there
would not be a Federal agency and a State agency collecting similar
taxes from the same employers.
One agency could collect combined State and Federal unemploy
ment taxes and old-age insurance taxes for the same cost now re
quired by one agency to collect its tax. It would also give employers
considerable relief in that it would eliminate the necessity for their
compiling two separate tax returns— one to the Bureau o f Internal
Revenue and the other to the State agency. As a matter o f fact,
it would eliminate three steps because the employer also pays the
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1940
Federal Government three-tenths o f 1 percent. In that regard, in
my opinion, we do have excessive duplication and annoyance to
employers that surely could be eliminated.
Em ployer experience rating is now becoming a very much talked
o f subject. I believe experience rating is unfair to employers them
selves. Personally, I am opposed to it in any form because I do not
believe that large numbers o f employers should be penalized for
unemployment over which they have no control. There are, it is
true, a large number o f employers who possibly would be benefited
through a reduction in their tax rate, but there must be a com
pensating influence if adequate benefits and standards are to be
maintained. W here there is a reduction o f tax on one employer,
i f it is a very great reduction there must be compensating influences
at the other end.
A s Mr. Altm eyer pointed out a minute ago, in order to maintain
an adequate flow to guarantee benefits there must be a tax rate o f 2.7
percent. This, he stated, would be the tax rate that would guarantee
solvency o f the funds. Now, i f some employer’s tax is reduced to
1 percent, then other employers are going to have to take up the
slack. T o me it does not quite add up, in view o f the fact that there
are industries in which employment cannot be stabilized and it is
beyond the control o f the employers to stabilize it regardless o f what
incentives may be given to them in the way o f tax reductions for
stabilized employment. The basic principle, as I see it, in unemploy
ment insurance is to retain purchasing power by paying workers,
who are eligible, benefits fo r unemployment, and to pay a few
employers benefits at the expense o f other employers.
The question o f adequacy o f benefits is also another very important
point, and to me it definitely ties in with the so-called minimum bene
fit standard in the Federal act. There are sharp differences o f
opinion on that issue as to whether or not the Federal act should
contain minimum standards fo r benefit payments, and possibly there
are some dangers involved in that, for the reason that in many States
their maximum benefits might be the Federal minimum. However,
now that the program is in progress I do not believe that is a serious
problem. I think it is more an illusion. W ithout minimum stand
ards in the Federal act the tendency, I think, is going to be downward,
particularly during this period when employment is on the upgrade
as a result primarily o f the national defense program. In my opin
ion, there is going to be a movement either to suspend benefits or
to lower the standards. It is unfortunate, I think, that some States
provide such a paltry sum for unemployment compensation as $2
or $2.50 per week. It is no wonder that many employers, as well
SOCIAL SECURITY
101
as the public, look upon benefits under such a set-up as an outright
g ift or dole and not as benefits based upon earnings in covered
employment.
Minimum benefit standards— that is, a minimum amount below
which benefits must not go— would also serve as an advantage to
employers under the so-called experience-rating provision o f many
State laws. F or example, in one section o f the country we have laws
providing for, we will say, $5 or $6 as a minimum benefit. In
another section o f the country there is no minimum benefit— benefits
may go down as low as $1 a week. That, I believe, in itself is
unfair competition among employers, because the employers in the
area where the benefit may be as low as $1 a week have an advantage
over employers where minimum benefits are $6 a week. This directly
affects employer experience rating because there is a greater drain
on the fund under the latter situation. Furthermore, this $2 or $3
benefit is, in my opinion, actually not an unemployment insurance
benefit. It possibly costs that amount in administration— to process
the claim, take the registration and the continued claim, write and
make payment o f the check. This process undoubtedly costs in many
instances that amount to administer the benefits paid. Furthermore,
it does not contribute in any degree to the economic stability o f
the community insofar as purchasing power for the family is con
cerned. I think that consideration should be given to a $5 or $6
minimum benefit amount and that the requirements should be in the
Federal act.
I do not believe the duration o f benefits in any State are o f suffi
cient length at this time. It is 15 or 16 weeks in many States and
in some States it goes down to 12. That is entirely inadequate.
Duration should be at least fo r 20 weeks i f we are thinking o f un
employment insurance as an added purchasing power during periods
o f unemployment. I further believe that the maximum weekly bene
fit amount should be increased, to provide more adequate benefits.
Most laws provide for the payment o f benefits on the basis o f 50
percent o f the average weekly wage. In the case o f a $20-a-week
worker his benefits would be $10 a week. I f he has a family, obvi
ously those benefits are inadequate, and they should be increased.
Moreover, it is my candid opinion that they will be increased.
Then there is the question o f the waiting period. Before benefits
are payable, most States, I believe, now provide for a 2-weeks wait
ing period— some 3 weeks. Under a 2-weeks waiting period it is
actually 3 weeks before the first compensable week is paid. T o me,
that is too long for a worker to wait if he is otherwise eligible for
benefits, and I believe that efforts should be made now, in view of
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the experience had by all States in benefit payments, to reduce the
waiting period to not to exceed 1 week. This would not present an
administrative problem at this time i f accomplished by State or
Federal legislation, and, o f course, i f it came through minimum stand
ards in the Federal act it would be obligatory upon the States to
meet that requirement.
I t is interesting to me to note that in many States, particularly in
some o f the western States, there is a desire to exempt certain groups
o f workers— write them out o f coverage in the State law. I know in
my own State (and I do not like to talk about my own State) there
is a desire to make certain exemptions. H ow widespread that may
become, o f course, we do not know, but it is not the intent o f unem
ployment insurance to exempt groups. It is actually the reverse— to
cover as many groups and individual workers form ally attached to
the labor market as is possible. That, in my opinion, should be our
objective— not to take out from coverage this group and that group,
but to bring into coverage, where feasible and administratively pos
sible, those groups not now covered by unemployment insurance.
The protection o f the benefit rights o f workers in the national de
fense program is a very important problem. In other words, these
workers5 rights in this program should be protected and the benefit
credits built up under State unemployment compensation laws should
be safeguarded, fo r when there is a tapering off o f this hectic rush
in the defense program there will be a day o f reckoning when those
benefits will be needed. I t happened after the W orld W ar in Great
Britain, as most o f you know, when a tremendous drain was placed
on the unemployment insurance fund by the thousands returned to
the labor market upon demobilization. That is one danger possible
in this defense program we should be cognizant of, and workers
drawn from industrial posts into the armed forces certainly should
have their benefit rights safeguarded and protected. It is hoped
by all, I am sure, that after this heated preparation for this defense
program the same thing will not happen to the Employment Service
that happened after the W orld W ar. That is, Congress, through its
desire to economize and balance the budget, eliminated the appro
priations fo r the United States Employment Service and thereby
practically eliminated a very important set-up in our social and
economic structure.
The Employment Service has been reestablished and has operated
over a number o f years now. I t has progressed tremendously in my
opinion, and is on a fairly stable operating basis. I do not believe
the surface has been scratched insofar as public employment activities
are concerned. It is still in its infancy, but tremendous progress has
been made and it would be regrettable, after we go into reverse action,
SOCIAL SECURITY
103
so to speak, if we sacrifice all the gains that have been made in the
field o f public employment service administration. When the de
fense program levels off, it will be most important for an agency to
be in existence that can assist in finding unemployed workers jobs.
W hen we reach the peak o f employment under the defense program,
an employment service o f this nature perhaps could be gotten along
without very well insofar as getting people on jobs is concerned. It
would be after this turmoil is over and we hit that so-called tailspin
that we will need public employment service. O f course, its im
portance at this time cannot be overstated. The statistical compila
tions, particularly with the additional information available through
unemployment compensation are important now and will be more
important in the future.
I should like to give an example o f what happened recently in a
State. There was a great desire on the part o f the vocational educa
tion department o f the State to ascertain in what particular skills
training should be given. (W e heard some very constructive dis
cussions on that yesterday by Commissioner Durkin o f Illinois.) It
so happened that in this State a movement was immediately instituted
to enroll large numbers o f young people in classes, just classes set up
fo r training them. A fter they were on the job, they began to take
stock as to whether or not they might be employed in industry within
the State.
The youth problem is a serious one, possibly because it is one that
has not been given the attention it should have received some years
back. There is a challenge to the employment service in the seeking
out o f employment for youth, and the employment service must ac
cept that challenge. W e heard yesterday there were approximately
4 million young people unemployed, which makes a good portion
o f the estimated number o f unemployed in the United States. In a
sense, it is a reflection upon our educational institutions.
In our consideration o f our national security we must not overlook
the fact that it is dependent upon the security o f the workers within
our own borders. W e have glaring examples o f that both in Italy
and Germany, and in Russia too. Mussolini came to power as a
result o f the internal economic conditions in Italy after the W orld
W ar and H itler came into power about 1933 due to the very same
internal economic conditions. It is something for us to think about
at this time, and we must think o f our social and economic defense
program as not vulnerable to atack or destruction and that it must
be maintained and strengthened through this hectic period o f national
defense.
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LABOR LAWS AND THEIR ADMINISTRATION, 1 9 4 0
Social Security
R e p o r t o f th e C o m m it t e e o n S o c ia l S e c u r it y , b y
W. A. P at Murphy
( O k la h o m a
D e p a r t m e n t o f L a b o r ) , C h a irm a n
[Submitted but not read]
D e v e lo p m e n ts in th e O lch A g e and S u r v iv o r s In su ra n ce P rogram
Undoubtedly the most important single influence during the past
year on the social security insurance program was the passage o f
comprehensive amendments to the Social Security Act. The revisions
expanded the original program from a Federal retirement system to
one embracing both benefits to aged wage earners and their depend
ents, and benefits to survivors.
The amendments were approved August 10, 1939, to become effec
tive in all important respects on January 1, 1940. The most im
portant changes were: (1) Advancement o f the payment o f monthly
benefits to aged wage earners from January 1, 1942, as prescribed
under the original act, to January 1, 1940; (2) provision for the
payment o f monthly benefits to the aged wife, children, widow with
children, aged widow, or parents o f the wage earner; (3) liberaliza
tion o f the employment requirements to permit those who attained
age o f 65 prior to the enactment o f the amendments to qualify for
monthly benefits in 1940 or shortly thereafter; (4) immediate dis
continuance o f lump-sum payments awarded upon attainment o f
age 65 under the provisions o f the original act; (5) discontinuance,
by January 1, 1940, o f lump-sum payments awarded upon the death
o f wage earners to their estates under the provisions o f the original
act; (6) provision fo r lump-sum payment upon death o f an insured
individual after December 31, 1939, where there is. no surviving
wfidow, child, or parent who would be immediately entitled to a
monthly insurance benefit.
Altogether, six different types o f monthly benefits were made
available under the amended law. Prim ary insurance benefits are
payable to the insured worker who has attained the age o f 65. Such
benefits are equal to 40 percent o f the first $50 o f the worker’s average
monthly wage, plus 10 percent o f the next $200, plus 1 percent o f
the basic amount fo r each year in which the individual was paid
at least $200 o f wages. F or example, the monthly insurance benefit
fo r a worker who has averaged $100 a month ranges from $25 to
$35 a month depending on how long he has been in the system.
I f the worker has an aged wife, the payment will be half again as
much or between $38 and $52. W here there are dependent children,
the total fam ily payment w ill be proportionately increased to twice
as much as the primary payment or $85 a month, whichever is least.
W ife ’s insurance benefits, equal to one-half the primary insurance
SOCIAL SECURITY
105
benefit, are payable to wives aged 65 o f insured individuals with
whom they are living. Child’s insurance benefits, equal to one-half
the primary insurance benefit, are payable to unmarried dependent
children under age o f 18, o f wage earners entitled to primary insur
ance benefits and to such children o f deceased insured wage earners.
W idow ’s insurance benefits, equal to three-fourths o f the primary
insurance benefits, are payable to widows aged 65 o f insured indi
viduals with whom they were living at the time o f the deceased’s
death. W idow ’s current insurance benefits, equal to three-fourths
the primary insurance benefit, are payable to widows who have one
or more children o f the deceased in their care and who have not
remarried. Parent’s insurance benefits, equal to one-half the pri
mary insurance benefit, are payable to the aged parents o f deceased
workers who leave no surviving widow or child. As a special re
striction, the parent is entitled to benefits at age o f 65 only i f he
was wholly dependent upon and supported by the worker at the time
o f his death.
The new benefit formula results in higher benefits for low-paid
workers and for steadily employed workers. Eligibility requirements
for the aged worker were eased, especially in the early years.
Not only did the amendments add benefits, but certain types o f work
previously excluded were brought under the act. The most important
services included are those for national banks, State banks which are
members o f the Federal Kesei^ve System, building and loan associations,
and services in fishing and maritime work. Those over the age o f 65
excluded under the original act were brought under Federal social in
surance. Altogether, the number protected was increased by over1 a
million persons in new industry and age groups. Changes limiting
coverage under the original act, it is estimated, affected from 500,000
to 750,000 individuals.
The financing o f the social-insurance program was also modified
by the amendments. The tax o f 1 percent each on employer and
employee was continued fo r the years 1940-42, instead o f being in
creased in 1940 as scheduled under the original law. The old-age
reserve account was replaced by a trust fund out o f which adminis
trative expenses as well as benefit costs may be paid, and to this fund
there is to be appropriated regularly the equivalent of taxes collected.
In summary, it may be said that the amendments shifted emphasis
from the protection o f the individual to the protection o f the family.
They stress the adequacy o f benefits to shield society from the evils
o f dependency, and provide greater adequacy through more emphasis
on pooling o f risks and less emphasis on each individual getting a
full return on his contributions. They extended the scope o f insurance
to provide against death and fam ily dependency as well as old age.
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LABOR LAW S AND THEIR ADMINISTRATION,
1940
The amendments preserve the contributory principle which charac
terizes social insurance while maintaining a relationship between
earnings and benefits.
The administration o f the new old-age and survivors’ insurance
program was formulated to assume speedily and efficiently the new
duties o f paying o f regular benefits. U p to 1940, the Social Security
Board had awarded only lump-sum payments and had not developed
a system o f issuing benefits on a regular basis. Nor had it established
controls as to the existence o f beneficiaries, their continuing eligibility
and changes in their status and location.
Because o f the added functions directly and indirectly resulting
from the amendments during the past year, the Board’s responsibility
was greatly expanded during the past year. In the Bureau o f OldA ge and Survivors Insurance, responsible fo r administering monthly
benefit payments, about a thousand additional individuals were em
ployed during the fiscal year 1939-40. The greatest increase in per
sonnel occurred in field and claims services. Over 900 field positions
alone were added and 140 additional offices to service the public were
opened, making a total o f 4G7 field offices. Regularly scheduled itiner
ant service was established and maintained at some 1,400 points
throughout the United States.
In order to start payment o f monthly benefits on time and in order
to acquaint prospective beneficiaries with their rights under the new
program, the Social Security Board undertook a thorough search o f
existing wage accounts, including the accounts o f those who had
already been recipients o f lump-sum payments under the original act,
to determine how many had sufficient employment to qualify fo r
monthly insurance benefits immediately or within a short time after
January 1,1940. Those who had received payments prior to January
1, 1940, were notified through the field offices nearest them o f their
possible eligibility for monthly benefits and were advised o f the em
ployment requirements. A s a result o f this program, approximately
5.000 claims were filed with the field offices even prior to January 1,
1940. The program advanced swiftly. B y June 1940, there were
over 108,000 awards o f monthly benefit payments. Over half o f these
were for primary insurance benefits. Under the original act, only
lump-sum payments were made. Altogether, as o f June 1940, over
470.000 claims fo r lump sums were paid, totaling over $28,000,000.
Under the lump-sum payment program, adjudication o f claims was,
fo r the most part, a clerical task, involving the evaluation o f proofs,
analysis o f applications, and supporting the documents. The amend
ments, chiefly in connection with benefits to dependents and to certain
relatives, require investigation into personal status such as dependency,
marital relationship, child care, feasibility o f school attendance, and
SOCIAL SECURITY
10 7
return to employment. W ith respect to highly personal and individ
ual considerations, the Bureau had to establish the adequacy o f cer
tain proofs and had to adopt techniques utilized by social-service and
welfare workers. Emphasis was placed on public relations technique
and particular stress was laid on the education o f the public. In
working out regulations and procedures, the Social Security Board
carefully investigated the practices o f Federal agencies and State
workmen’s compensation agencies, and o f foreign social insurance
systems.
One o f the additional responsibilities not strictly connected with
the payment o f monthly insurance, imposed by the new law, required
the creation o f facilities for the hearing and review o f claims deter
minations. The new law authorized an appeals procedure with final
recourse to the United States District Courts. A n independent ap
peals council was established with headquarters in Washington and
with 12 traveling referees operating in each o f the 12 administra
tive areas through which the Social Security Board operates. Be
fore the establishment o f the council, the Social Security Board adopted
14 basic provisions representing the culmination o f considerable re
search into the social-insurance policy, specific problems arising out
o f claims payment and record keeping, and the requirements o f admin
istrative law fo r fair hearing.
B y the close o f the fiscal year the Bureau had experienced at least
the initial stages o f all processes and operations required for the pay
ment o f monthly benefits. Policies were determined and procedures
were developed for practically all m ajor problems which could be
expected. A lon g with the payment o f benefits analyses o f the effects
o f the program were carried on. In addition, planning fo r new types
o f benefits and for the inclusion o f additional groups for social insur
ance protection was undertaken. Attention was given during the
past year to the extension o f coverage to agricultural workers and to
the self-employed. Both administrative and legal difficulties were
carefully studied and separate plans were devised fo r tax collection in
the case o f workers to whom the pay-roll tax system could not be ap
plied. Coverage o f State and municipal employees was also consid
ered and recommendations fo r their coverage were submitted.
Such planning and appraisal o f the program remains a continuing
function. Its importance was accentuated during the past year on
account o f the amendments and it was directed mainly toward under
standing the new program. In the future, evaluation o f the effec
tiveness and adequacy o f benefits will be given greater weight in order
that recommendations fo r im proving and extending social insurance
can be proposed to Congress.
313421°— 41------8
108
LABOR LAW S AND THEIR ADMINISTRATION,
1940
M a jo r D e v e lo p m e n ts in U n e m p lo y m e n t C om p en sa tion , J u ly 1939-July 1940
During the year great progress has been made in the unification o f
the administration o f the complementary benefit-payment and jo b
finding tasks o f the employment security program. The job o f re
ferring applicants to employers where employment opportunities exist
and assistance in filing claims for unemployment compensation bene
fits when suitable employment is not available has been done more
thoroughly and more economically. The technical task o f ascertaining
workers’ experience and referring them to those jobs fo r which they
are qualified has been facilitated by the distribution o f a dictionary o f
occupational titles which defines 17,452 occupations, known by 29,744
job titles.
Under Reorganization Plan No. 1, authorized by the reorganiza
tion act o f 1939, the functions o f the United States Employment Service
were transferred to the Bureau o f Employment Security o f the Social
Security Board. Since the latter body exercises general control over
the administration o f unemployment compensation in the States,
integration o f the employment service and unemployment compen
sation functions at the Federal level has facilitated the similar inte
gration o f functions among the States.
The benefit-payment program became fully operative when Illinois
and Montana began payments in July 1939. Over the period June 30,
1939-July 1, 1940, $482,000,000 was disbursed in benefits. In spite
o f the full operation o f the benefit payment program, however, the
amounts in the unemployment trust fund continued to rise. Whereas
$1,139,000,000 was available fo r benefit payments on June 30, 1939,
$1,707,000,000 was available on July 1, 1940. The net increase in re
serves thus amounted to $568,000,000, but the accumulation o f reserves
did not proceed at a uniform rate among the States. In a few States
with few covered workers and in a few States where covered workers
are concentrated in a few industries, reserves increased by very small
amounts. The accumulation o f reserves in most States at a rate
more rapid than seemed warranted by economic conditions directed
attention towards the advisability o f fundamental changes in the finan
cial structure o f unemployment compensation.
In certain quarters attention was centered on the possibility o f de
creasing the Federal and State unemployment taxes in order to obtain
a closer correspondence between current income and current expendi
ture. A n amendment to the Social Security A ct designed to accom
plish this purpose was proposed early in 1939. Am ong the States, the
reduction o f employers’ taxes through the individual employer experi
ence-rating clauses continues to be strongly advocated; experience
rating is now in effect in 4 States and will be applied in 13 others
during 1941.
SOCIAL SECURITY
109
During the later months o f 1939 and 1940, however, the effect upon
reserve accumulation o f the volume o f benefit payments was more
closely examined. A s reports o f the weekly amounts granted to
claimants, the number o f weekly payments made, and the experience
o f claimants after exhaustion o f their rights became available there
was increasing realization that the scale o f benefits established in the
States was not adequate to carry workers over spells o f short-time
unemployment. In view o f the failure o f most State laws to fulfill
this fundamental objective o f unemployment compensation, increas
ing attention was paid, both in the States and in Congress, to the pay
ment o f more adequate benefits as a means o f correcting the malad
justment between contribution collections and benefit payments.
Early in 1940, bills establishing Federal benefit standards were intro
duced in both houses o f Congress. These bills also took cognizance
o f the fact that the payment o f adequate benefits may not be possible
in every State on the basis o f contributions collected within the StateThey proposed the establishment o f a central fund from which
payments to such States would be made.
W hile the fundamental structure o f the system was closely exam
ined, no significant changes in the Federal-State system were made.
Amendments to the Social Security A ct passed in 1939 altered the
unemployment compensation titles only in minor respects. Through
a revised definition o f agricultural workers the number o f workers
whose wages were subject to the Federal Unemployment Tax A ct
was somewhat reduced; by shifting the tax base from “ wages pay
able” to “ wages paid” a degree o f administrative simplification was
attained; the conditions under which individual employers could
obtain reductions in unemployment taxes payable to States were
somewhat revised.
Few State legislatures met during the past 12 months and in these
general evaluation o f the operation and objectives o f the program was
not accompanied by extensive revision o f State laws. There was no
general movement toward reducing the size o f firms subject to State
laws and thus bringing new workers into the system or increasing the
rights o f those workers who transfer between large and small firms.
Nor has there been any tendency to bring excluded occupations under
the laws. Indeed, a number o f relatively minor occupations, such as
certain agricultural workers, caddies, and insurance salesmen, were
newly excluded.
The conditions to be fulfilled by covered workers as a prerequisite
to receipt o f benefits were not markedly altered among the States.
Reduction in the length o f the waiting period has continued to the
extent that most States now require a 2-week waiting period in the
course o f a year. On the other hand, there has been a widespread
110
LABOR LAW S AND THEIR ADMINISTRATION,
1940
increase in the volume o f earnings prior to unemployment which is
required to establish a worker’s attachment to the labor market and
hence his rights to benefits. Under most laws, it is now difficult or
impossible for workers to obtain any benefits unless they have had
at least one quarter o f employment in the preceding year. A desire
to require a greater volume o f earnings, and hence to provide a cor
respondingly larger volume o f benefit rights to the smaller eligible
group, was primarily responsible fo r this change. Experience
showed that the group which barely qualified under previously exist
ing lenient provisions was entitled to very small amounts per week
fo r very few weeks. Some States extended the list o f actions and
conditions which disqualify workers from receipt o f benefits, and in
a few States denial o f some or all benefits rather than postponement
o f benefits now follows a disqualifying act or condition.
F ifty percent o f the full-time weekly wage, or a rough equivalent,
remains the usual weekly benefit amount. Some States have in
creased the weekly amount above this level by various devices, and
a few States have reduced the weekly payments below this level by
relating weekly benefits to annual earnings. W ith respect to the
minimum weekly benefit amount, there developed a tendency for
States to adjust the lowest weekly payment to wage levels. In the
South, fo r example, the minimum was generally lowered, while this
amount was increased in the Mountain States. W ith respect to the
duration o f benefits, the most significant change among the States
was the adoption o f flat duration in place o f duration limited by
past wages in a number o f States. In those States which retained
variable duration, workers continued to be entitled to a total amount
o f benefits equal to a fraction o f past earnings with an over-all limit
o f about 16 weeks.
M ore
s ig n ific a n t
th a n
changes
in
b e n e fit
rig h ts
w as
m o v e m e n t t o w a r d s s im p li fi c a t io n o f t h e b e n e fit f o r m u l a .
th e
general
T h e p e r io d
o f t i m e o v e r w h ic h w a g e s m i g h t b e a c c u m u la te d t o fix b e n e fit r ig h t s
w a s g e n e r a lly r e d u c e d , a lte r n a tiv e p r o v is io n s w h ic h in tr o d u c e d a d m in
is tr a tiv e
c o m p le x it ie s
w ere
dropped, and
tr o u b le -m a k in g
d e fin itio n s
w e r e c la r ifie d .
W hile the defense program occupies the center o f the stage in mid1940, attention is being directed toward means o f meeting the future
problems that will inevitably arise both in the placement and benefitpayment areas o f the employment security program as a result o f the
maladjustments produced by the readjustment o f the national
economy to a defense status.
Adjustment of Industrial Disputes
P o te n tia litie s o f th e L a b o r R e la tio n s B o a rd
By W
il l ia m
L e is e r s o n , N a tio n a l L a b o r R e la tio n s B oard,
I am asked to speak on the potentialities o f the Labor Relations
Board. The potentialities o f this Board are for the Board to have
less and less work to do, so that i f it does a good job, it has to work
itself out o f a job.
The discussion o f social security which you have heard this morning
indicates that the potentialities o f the Social Security Board lie in
extending and deepening its work. It must undertake health insur
ance in time. It must include more people. It must increase benefits
and all that. The potentialities o f the Labor Relations Board, how
ever, are in the opposite direction. In order to make that plain, we
must know what the Labor Relations A ct deals in.
The Labor Relations Board has just two duties. One is to enforce
the right, freedom, and liberty o f employees to organize so that they
will be free from interference and may bargain collectively. There
is another. In the exercise o f the right to organize, disputes arise
among the employees themselves as to whom they want to have as
their representatives or what organizations they want. That is the
second part o f the duties o f the Board. It has to conduct elections
and certify the representatives o f the employees. That is all there
is to the act. It is very simple.
The potentialities o f this Board lie in the direction o f having less
and less work to do with respect to complaints as to interference writh
the rights o f the employee. I f the Board has more and more com
plaints and more cases, that means that the act is not working. It
means that the act is not being enforced.
On the other hand, for a time at least, there should be an increase
in the number o f representation cases. As soon as the Board gets
the employers to feel this is the law and it has to be obeyed, then more
and more workmen will come to them and ask to bargain collectively.
A ll the employers have to say is, “ Go to the National Labor Relations
Board and get certification that you are the authorized representa
tive; then we will bargain with you.” That means more cases o f
representation or election will come to the Board.
Ill
112
LABOR LAW S AND THEIR ADMINISTRATION,
1940
A fter we have had a good number o f elections and certifications o f
representatives the real potentialities w ill lie, not in the Board, but
in the collective bargaining that results between the authorized repre
sentatives and the em ployers; and the real benefits o f the act are to
come not from what the Board does but from the results o f this col
lective bargaining.
However, i f every year we have to have more elections and repre
sentation changes there w ill be no industrial stability and no develop
ment o f orderly labor relations. The potentialities must lie in the
direction o f more stability. Once we certify representatives and they
start bargaining and make collective-bargaining contracts, the con
tracts develop a body o f industrial law to regulate relations between
employee and employer. This will not develop i f workers keep chang
ing representatives every year or even every few years.
The real potentialities lie in the development o f the contracts;
they do not lie in what the Board does. I have emphasized that be
cause there is a tremendous amount o f misconception o f the work o f
the Board, not only on the part o f the public generally but to a
certain extent among ourselves on the Board as well.
People have a notion that the Board is making labor law. W e
do little o f that, and to the extent that we are making labor law,
much o f it is not good. The real labor law— the real government
o f the relations o f the employer and employee— has to be made by
the employees and the employers through their representatives in
their contracts. I t is these collective-bargaining contracts that de
velop a body o f industrial law which regulates rights, privileges,
immunities, and duties. This Board needs to proceed on the idea
that i f we are going to have an efficient administration we will have
less and less to do. Our duty is to get the act enforced, and then
leave it to the unions and employers to settle their problems by
bargaining.
Now let us understand a little more in detail what the Board has
to do. The enactment o f this law, the Labor Relations Act, can best
be compared, I think, to the Emancipation Proclamation o f A bra
ham Lincoln. This will perhaps indicate to you that I have been
reading Carl Sandburg’s “ Lincoln” recently, and if you have not read
it, you should by all means.
W hen Lincoln announced the proclamation, he was bitterly at
tacked. It was unconstitutional. There was no question about that
because slavery was protected as a property right under the Con
stitution, and the President could not just abolish it. Lincoln under
stood that, but what did he do? H e exercised his right as Com
mander in Chief o f the A rm y and as such Commander in Chief he
authorized generals where the war was going on to free the slaves
ADJUSTMENT OF INDUSTRIAL DISPUTES
113
in their territory as part o f the war campaign. However, he was
careful not to apply the Emancipation Proclamation to those States
which had not seceded, and there was slavery there. H e did not free
all slaves in the first proclamation. The border States had a lot
o f slaves.
W hat happened? He was attacked by the people who did not
want emancipation, and he was attacked by the radical Republicans
for not freeing all the slaves. He was attacked coming and going,
and that is what is happening to the Labor Relations Board, too.
I t is attacked by the employers who have their property rights
taken away by this act. There is no question about that, and the
employers are like you and me— they do not want rights taken away.
The Board is being attacked on the other hand by unions that think
we are not doing enough for them. A ccording to them, we ought
to do more and punish employers.
W hat do I mean by saying that the law takes away property rights
from the employer? Until the Labor Relations A ct was passed, it
was part o f the right o f employers, o f the property rights protected
by the Constitution and by the Supreme Court o f the United States,
to hire and to fire employees fo r any or no reason. Nobody could
question it. It was an integral part o f the right to do business, o f
the freedom to engage in business enterprise. So, if I were an em
ployer and a man came to me and said he belonged to a union, I
could say: “ I won’t have anybody who belongs to a union.” I f a
union came along to talk to me, I could sa y : “ Nothing doing, I don’t
believe in m y employees organizing, and i f I find any o f my em
ployees joining the union I will fire them.” A nd I had a right to
try to destroy the union.
The Federal Congress and many o f the States passed laws against
blacklisting and against employers interfering with the rights o f
employees to organize, and those laws were taken to the Supreme
Court o f the United States. The Supreme Court said that the employ
ers had the right to hire and fire people for any or no reason, and i f
the State or the Federal Government tries to interfere with that
right it is taking property without due process o f law, which is un
constitutional. The Federal action was held unconstitutional under
the F ifth Amendment to the Constitution and the State acts under
the Fourteenth Amendment. That was the law and the Constitution,
and that defined the property rights o f the employer. In other
words, the employer was free because he had the economic opportunity
in his hand to interfere with the freedom o f the people who worked
fo r him.
The Labor Relations A ct took away that property right from the
employer and handed it over to the employee. I f you understand
114
LABOR LAW S AND THEIR ADMINISTRATION,
1940
that, then you know why we are having all this turmoil about the
Labor Relations Board. It is not a simple thing, it is somewhat
revolutionary, like the Emancipation Proclamation was. A n im
portant change like that is not accomplished simply by adopting a
law. Y ou have to change people’s minds, habits, and ways o f doing
business; and that means that it takes years o f transition to get
the new property rights o f employees recognized— the extension o f
their rights and the restriction o f the rights o f the employer.
It means also, when you come to the administration o f an act o f
this kind, that you have to be very careful in administering it. W e
need to have the spirit o f Lincoln. F or instance, in 1864 some fellow
in the North returned a slave who had escaped from one o f the
southern States. I t was after the Emancipation Proclamation and
the Arm y caught the fellow who returned the slave. The fellow was
court-martialed by the A rm y and sentenced to be shot, or I think
perhaps imprisoned.
The case was appealed to Lincoln, and he said, “ There is no
question but this man is guilty, but the change in duty was but
recently made and the mind o f the public hadn’t entirely accepted
it yet.” Lincoln, realizing that, thought we should be careful in its
enforcement. W e must enforce it, but we must understand that the
people do not feel like criminals yet for doing things that were per
fectly legal up to a short time ago. He therefore commuted the
sentence.
It is that spirit that is needed in the administration o f the Labor
Relations Act. The act itself requires it and states i t ; and that leads
me to a description o f it.
The act set up five so-called unfair labor practices. The first one
is that employers must not interfere, coerce, or restrain employees
in the exercise o f their rights to organize and to bargain collectively.
Second, they must not establish company-dominated unions or assist
them. Third, the employer must not discriminate in hiring or in
discharging employees. I f he does, the Board may reinstate those
employees and order the employer to give them back pay fo r time
lost. The fourth is that there must be no discrimination in hiring
and firing against employees for testifying against the employer.
The fifth is that the employer must not refuse to bargain collectively.
Those are the five unfair labor practices. Remember that all those
five unfair labor practices are in the Railroad Labor Act, which was
adopted a year before the National Labor Relations Act. However,
in the Railroad Labor A ct those unfair practices are made misde
meanors, crimes, and they are punishable by fine or imprisonment,
or both.
ADJUSTMENT OF INDUSTRIAL DISPUTES
115
W hy did not Congress make these same unfair labor practices in
the Labor Relations A ct punishable by fine, imprisonment, or both?
It was for the same reason that Lincoln commuted the sentence o f
the fellow who returned the slave.
In the railroad industry the employers had been convinced for
many years that they had no right to interfere with the rights o f
employees. They were convinced originally not by law, because when
a similar law was passed in 1898 by Congress that law was declared
unconstitutional. The decision o f the courts told the employees that
they could not get their rights by law but they would have to resort
to industrial war. Then we had a series o f big strikes, compared
to which the sit-down strikes in 1937 were Sunday-school parties.
They were really bitter strikes. The Arm y had to be called out,
but the unions won. They were forced to resort to that method o f
industrial warfare because o f the decision o f the courts. As a result,
they convinced the railroads that they would have to deal with unions
and keep their hands off the rights the employees asserted.
There being merely a small, negligible number o f employers in
the railroad industry who still wanted to interfere, the mass senti
ment was established. Railroad management generally knew it was
wrong to interfere. Under those circumstances Congress could enact
a law which would treat the few as criminals, because the principle
was accepted by most employers and managements in the railroad
industry as well as by the employees.
That principle, however, was not accepted throughout industry
outside o f the railroads. The employers asserted their own right
to organize in associations, such as the Chamber o f Commerce, em
ployers’ associations, manufacturers’ associations, and a lot o f others;
but at the same time they asserted the right to destroy the organiza
tions o f the employees by firing people and hiring spies and all that
sort o f thing. The country supported them in that. W e were all
equally guilty. That was our view just the same as it was down to
the Civil W ar that slavery was to be protected by the Constitution.
Congress learned her lesson from the prohibition amendment, that
i f the people o f the country who are to be affected by a law do not
feel that the prohibited conduct is wrong you cannot enforce that kind
o f a law. Therefore, Congress adopted an educational device in this
Labor Relations A ct instead o f a criminal penalty.
Congress authorized the Board to investigate when a charge comes
in from an employee or union that workers’ rights have been inter
fered with. The Board is authorized to investigate, to get all the
facts, write them down in a record, give all parties a chance to be
heard and then to make a finding that there has been interference.
116
LABOR LAWS AND THEIR ADMINISTRATION,
1940
W e do not put the employer in jail, we do not even punish him, but
just say to him, “ Now hereafter quit that.” That is all. In legal
language that means we issue a cease and desist order. W hen the
Board finds that an employer has violated the rights o f employees, it
issues a cease-and-desist order; that is, we say to the employer, “ D on’t
do this any more, and notify employees by posting notice that you
won’t.”
I f th e is s u e in v o lv e s d is c h a r g e o f p e o p le i l le g a l ly , th e B o a r d
n o t p u n ish
m ake
h im
th e e m p lo y e r , b u t m a y
pay
back
w ages
fo r
r e in s ta te th e w o r k e r s , a n d
tim e
lo s t
a n y lo s s t h e e m p lo y e e su ffe r s t h r o u g h
or
h o ld
th e
th e v io la tio n .
p lo y e e s u ffe r e d a lo s s in w a g e s , w e c a n p u t h i m
e m p lo y e r
So, if
does
it c a n
th e
fo r
em
back and order back
p a y , b u t n o t i f th e r e is n o lo s s in p a y s u s ta in e d b y th e w o r k e r b e c a u s e
o f th e f a c t t h a t h e g o t w o r k e ls e w h e r e .
Suppose as an employee I lost a thousand dollars by being illegally
discharged. Then I went out and got another job earning a thousand
dollars. W hen I go back, the employer does not have to pay me, be
cause I have not lost anything. However, if I got a job where I
earned $500, then the employer must pay me the $500 that I lost.
There is no punishment fo r the employer. He merely gives back to
the discharged employee the amount o f wages lost by unemployment.
I f t h e is s u e w a s r e f u s a l t o b a r g a i n c o ll e c t i v e ly , a l l w e t e l l t h e e m
p lo y e r is “ G o a n d s in n o m o r e .
G o a n d b a r g a i n c o ll e c t i v e ly .”
I think that is a wise law, because during this transition period we
cannot impose penalties. That will not work. The reason is that
people do not feel they are doing anything wrong when they con
tinue to do what they have been doing for generations. However,
after a period o f issuing these orders and showing the employer what
the law requires, we can swing into the position o f imposing penalties,
as in the railroad industry. I f we had criminal penalties at the time
the act was imposed, juries would refuse to convict, as they did with
prohibition violators. The cease-and-desist orders are more effective
in getting enforcement during the transition period.
Y ou see then the Labor Relations A ct is a very kindly act. In
effect it says to employers, “ Now up to this year, up to 1935, the
policy o f the United^ States was to give you a property right in
interfering with the rights o f employees. Congress has now changed
that policy. Y ou see all these facts we have here as a result o f our
investigation show that you are still pursuing the old policy. Y ou
can’t do that any more. Now here is the policy that you are supposed
to follow .” So we tell the employer to quit what he has been doing
and do what has been set down in the act.
A fter that goes on fo r a few years the employers o f the country
w ill be convinced that it is the right way. I think all o f you know
ADJUSTMENT OF INDUSTRIAL DISPUTES
117
that as a result o f this 5 years o f turmoil and attack on the Board we
have reached the stage where vast numbers o f employers— nobody
can say whether it is the m ajority or not, but I think it is— are con
vinced that they have to do business this new way. It does not
make any difference whether the Republicans or the Democrats come
into power. This right is going to stay. More than that, the fact
is that no employer nowadays dares to stand up and say, “ I don’t
believe in collective bargaining or the rights o f my employees to
organize.” Every employer now says, “ I believe in the right o f
collective bargaining and I don’t believe we have a right to interfere
with the employees.”
A ll this means that public sentiment created by what the Board
has done with the act in the last 5 years has reached the point where
those who in their hearts really do not believe in the act and think
the old way was better no longer feel they can stand up against
public sentiment. That, I think, is a great accomplishment in the
short period o f 5 years.
The potentialities o f this development are that in another 5 years
we may not need the Board to handle these problems any more. The
number o f deliberate violations should become so small that Congress
can amend the act and make a violation a crime or misdemeanor as
in the Railway Labor Act. Then the Board will not be having
unfair labor practice cases any more. On the other hand, the election
business would be increasing because that shows willingness to abide
by the law.
There is room fo r improvement in our administration o f the act,
but, in my personal opinion, I think we have been forced, by the
attitude o f the lawyers who have fought us, to administer this act
in too much o f a legalistic way. W e have had lawyers working fo r
us who get $2,600, $3,000, and $3,500 a year. The lawyers who have
represented the employers have earned that amount o f money on
each case. Those lawyers have forced our lawyers to be overlegally
technical in the handling o f these cases, until every time any prob
lem comes up that needs to be handled in a sensible way, and I take
it up with the lawyers, they say, “ Y ou can’t handle it sensibly. Y ou
have got to settle this question o f law.” That is not the fault o f our
lawyers. It is the fault o f the expensive lawyers wdio have forced us
to this course.
F or illustration I want to tell you about a predicament I got into
on the National Mediation Board. I believe in letting everybody talk
and putting down what each one says, and particularly I believe in
letting myself talk as much as I want. W e had a conference the
way I had been used to in dealing with labor relations. That was
118
LABOR LAWS AND THEIR ADMINISTRATION, 1940
with everybody talking and talking themselves out. Then we knewT
where we were and as a result we issued a decision.
The lawyer for one o f the parties in that dispute took the case
to court and the lower court upheld our decision. Then the case
was appealed to the circuit court o f appeals, and the Department
o f Justice, which was handling our case, said, “ You had better start
over again. W ithdraw your decision and hold a new hearing.” I
asked, “ W hat is the matter?” and was told, “ Ah, but they won’t
consider this a legal hearing that you held.” W ell, I said I thought
it was the sensible thing that I had done and I would let the decision
go before the circuit court o f appeals, and if it was not right let
the court tell us. “ W e believe in having our decisions reviewed,” I
said.
W ell, the court heard and looked at the record. It did not have
a lot o f motions in it and was not filled with legal verbiage, and
there were no immaterials, incompetents, and irrelevants. (Most
lawyers, you know, have the notion that there is only one way o f
arriving at the truth when making investigations. There must be
two lawyers, each one trying to keep as much out of the record as
possible; then whatever gets by them into the record— that is the
truth.)
We did not try to defend our procedures or our decision. W e just
told the court, at least told the Department o f Justice to tell the
court what had been done. The circuit court was very sympathetic.
It said the decision can be the same, but the record did not indicate
a hearing that gave everybody his rights under due process o f law
and therefore we would have to give them a different kind o f a
hearing.
W e did not consider that a loss. W e did not worry about this
business o f winning or losing in the courts, as i f that has anything
to do with the true or proper method.
W e did what the court said. W e called hearings and we let them
have plenty o f hearings. The parties had expensive lawyers and
arguments went on for days and months, until finally the labor
people came to us and said, “ These blood-sucking lawyers are eating
us up.” W e told them the court said this would have to be done,
and it was done. Then we wrote findings o f fact on those hearings
and we made the same decision exactly as the previous decision.
However, it cost the employer and the labor organization involved
thousands and thousands o f dollars.
I f it really involved constitutional rights— somebody did not get
j u s t i c e — then it would be worth the money.
I f somebody’s rights
were really disregarded, I do not think it was too much to pay. But
I do not think anybody’s rights were disregarded. I think all that
ADJUSTMENT OF INDUSTRIAL DISPUTES
119
unnecessary procedure was a result o f this narrow, legalistic inter
pretation o f what an investigation o f fact is. I am glad to say
that as a result o f that experience neither the employer nor the
unions asked for any more o f those legalistic hearings. The Railway
Board, until I left it last year, was running its hearings in the old
way. Everybody was satisfied.
That, I believe, will illustrate to you some o f the problems we
have in administration o f the Labor Relations Act. The Board is
required to hold hearings in all types o f cases. Lawyers represent
ing unions and employers before the Board are trained in court
procedures, and they expect the Board to follow court-like p ro
cedures; the lawyers on the Board’s staff have fallen in line to
such an extent that we now have become overly legalistic in our
way o f doing business.
I want to say in closing that I do not think there is any thing the
matter with the law. I do not think it needs a single amendment
to accomplish its two purposes. I do not mean by that to state
that it is a perfect law, but I do not think it needs any important
change at the present time in its provisions.
The law does require improvement in its administration. The
administration has become legalistic because o f the experience in
those first years when every time the Board wanted to make a move
it was stopped before it began. I f we went to the employer to
investigate, he said, ‘‘No, my lawyer has advised me to give you no
facts.” Then we would issue a subpoena and the employer would
refuse to honor our subpoena. A fter all that, then there would be
a lawsuit, not on the case but on the subpoena.
When we wanted to hold a hearing somebody would go and get
an injunction. W e had a hundred cases like that, and we had to
fight out that question first, until the courts finally told the company
lawyers, “ You can’t enjoin them before they have completed their
investigation.”
Under that system o f procedure, do you think we could have a
decent, sensible administration o f the law? It made a lot o f jobs
fo r unemployed lawyers but it did not do much in the way o f sensi
ble administration. It was not the fault o f the Board that it did
not have sensible administration, but the situation was forced on it.
W hen we tried to improve the administration we had the lawyers
on the outside objecting to changes as well as our own lawyers,
who were getting to like the way they were doing things, especially
because it meant employing more lawyers.
I say that what we need in order to work ourselves out o f a job,
so we w ill have fewer and fewer cases and more and more com
pliance with the law, is improved administration with less legalism.
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LABOR LAWS AND THEIR ADMINISTRATION, 1940
On the other side, the potentiality is that i f we accomplish this there
will be more and more collective bargaining between union and
employer, and we will have less to do in that respect.
The unions and the employers may disagree, but as long as they
are bargaining it is none o f our business and should not be any
o f our business. There will be vast possibilities o f disputes when
the parties are equal in bargaining power and cannot agree on wages,
hours, and other terms o f employment; but that is not the job o f
the Labor Relations Board. That is the job o f the mediation agency
o f the Government. The Conciliation Service o f the Department o f
Labor" handles that now. State labor departments also have mediation
and conciliation services.
Personally, I think we ought to establish a national mediation
board to expand vastly the work o f the Conciliation Service o f the
United States Department o f Labor to deal with those problems
that will arise— those problems o f differences between employers and
employees when they are honestly bargaining and cannot agree— and
to assist them in arriving at their agreements.
That is not the job o f the National Labor Relations Board. That
is the job o f a mediation agency which should and must be separate
and distinct from the Labor Relations Board. However, neither
mediation nor collective bargaining can be effective unless this law
is on the statute books and the rights o f employees are not interfered
with. Collective bargaining must be a right o f the employees pro
tected by law and acknowledged by the employer before there can
be any effective bargaining, mediation, or conciliation.
The Labor Relations Board must have less work to do because
this is accepted as basic. Then the mediation service will expand—
that is the potentiality i f this act is successful. I f our law is en
forced, complied with, we will have very little to do.
Discussion
Mr. H a n e y (Minnesota). Mr. Leiserson has told you how easy
it is to administer a law such as the National Labor Relations Act.
A t the present time I am the administrator o f the Minnesota Labor
Relations Act, and I ought to feel quite proud in telling you that
our legislature evidently felt that the process o f education, which
Mr. Leiserson referred to as one which might eventually change the
national act and take the enforcement out o f the Board itself, has
happened in our State. Our legislature has seen fit to delegate
enforcement to the courts. It has, however, added to the Minne
sota Labor Relations A ct a conciliation service in the State.
Minnesota is the only State in the Union that has a 10-day waiting
period before strikes, covering all industries. It is a new venture, as
ADJUSTMENT OF INDUSTRIAL DISPUTES
121
new probably as the matter Dr. Leiserson talked about, namely, hold
ing informal meetings. However, a year and a quarter o f administra
tion o f this law has convinced me that it is a coming thing in America
to get employer and employees to meet with representatives o f the
State government and discuss their problems in a friendly and intel
ligent manner.
I do not believe that I differ with Dr. Leiserson in his theory at all.
I have had experience with the same kind o f hearings that you have
had, Dr. Leiserson. I have had people tell me they were not formal
enough. W e try to be informal and attempt to give everybody a
chance to present his side o f the case. O f course, in our conciliation
meetings, which are arranged during the 10-day waiting period and
often after this period, we encourage plenty o f talking. A s a matter
o f fact, anyone who has ever been connected with the administration
o f labor disputes knows the only way you get results is to let the peo
ple involved talk to their hearts’ content. A fter they have accom
plished that purpose, and you have heard all sides, then the settlement,
as a general rule, becomes comparatively easy.
W hen the legislature enacted the 10-day waiting period as a statute
law, labor threw up its hands; and said, “W e can’t exist under a law
like that. It is all for the employer. The employer will benefit by it.
W e are all done.” Well, the employers shouted that the bill did not
go far enough in regulating labor.
The fact was we had had a very violent labor situation fo r the last
few years previous to the enactment o f this law. However, the past
year has shown to both the employers and labor that they can, i f they
want, get along very nicely under the 10-day waiting period. Y ou
will find that the number o f employees on strike during the past year
averages around 8,000, as compared to an average o f about 15,500
fo r the 3 preceding years.
Labor organizations have cooperated, and unions in the State are
stronger today than ever before. They have increased the benefits
under their contracts. There has not been a backward step taken.
Employers are more willing to talk today than ever before. They are
more willing to discuss the problems that arise, because we have elimi
nated the “ quickie” fellow who used to rush in and say, “ Sign here,”
and if the employer did not sign, because he wanted a day or so to
consider the proposed contract, the “quickie” fellow would say, “ That
is too long. Put up the banners. The strike is on.” I tell you that
this sort o f labor organizing is just as detrimental to labor as some o f
the racketeering we have been reading about. A fter all in labor or
ganization work the basic principle must not be lost sight of, and that
is, W hat do the employees in this particular place o f business want ?
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LABOR LAWS AND THEIR ADMINISTRATION,
1940
Our representation section is somewhat similar to that o f the Na
tional Labor Relations A ct, but I believe it solves one o f the things
that Dr. Leiserson has been fighting fo r for some time. That is the
matter o f declaring units. The employer unit is as far as the Minne
sota Labor Relations A ct lets the administrator go. W e also have a
section in our act that makes craft recognition within the particular
plant compulsory. I think those o f you who have been acquainted
with labor administration know that representation problems are a
headache even when they are very simple cases.
Chairman W rabetz . Paul M. H erzog has been a member o f the
labor relations board in New Y ork fo r quite a while. W e will call on
him now.
Mr*. H erzog (New Y o r k ). I agree, and I think my two colleagues on
the New Y ork board, also agree, with everything Dr. Leiserson has
said about the proper functions o f a labor relations board. H e said
the first principle is the possibility o f working ourselves out o f a job.
That, I think, is true. A t prior meetings I have said just that, and
I am still saying it. O f course, the job is still there.
I think the members o f the New Y ork State Labor Relations Board
also agree completely as to the importance o f not expecting this sort
o f thing to move too fast. W e have been functioning a little over 3
years in New York. The Federal act has really been functioning not
much longer, for during the first 2 years its constitutionality was still
in issue. Anyone who knows that the statute has changed the law
in the country and in the States as much as it has would be very foolish
to expect it to be universally accepted at once. The people who ad
minister the law, and likewise those who criticize the administration
o f it, would be unfair if they expected anyone to work out a perfect
scheme o f administration overnight.
A third thing Dr. Leiserson said I also want to comment on. I
think I have also mentioned it at a prior meeting o f the Association.
That is the fact that in New Y ork State we have a coexistent State
board o f mediation. This mediation board supplements the concilia
tion service which has long existed in the State. It is composed o f
four men and one woman. They are all people who devote most o f
their time to other things, but who, when a strike is called or threatened,
stand by to offer their services to assist the parties in working out a
reasonable adjustment.
I believe the problems o f the New Y ork State Labor Relations
Board have been much eased by the existence o f this mediation board.
It has meant that we have gotten only the cases that are really within
our jurisdiction. Cases involving disputes over hours and wages, for
instance, have been sent directly to the mediation board, in whose
ADJUSTMENT OF INDUSTRIAL DISPUTES
123
jurisdiction they belong. In the absence o f a mediation board a great
many disputes and strikes would come to the labor relations board be
cause the parties had nowhere else to go. Consequently, the labor
relations board would often be asked by labor to decide that what is
really a dispute over the substantive terms o f the collective bargain
constitutes as a matter o f law a refusal to bargain collectively.
Last year the Association heard Dr. Lubin read an address o f mine
at Tulsa. In 1939, I told you there had been no amendments to the
New Y ork State law. There have been a few since that time. They
were passed by the legislature follow ing certain recommendations by
the Ives Committee in this State. I t would involve no breach o f con
fidence i f I were to say that these recommendations were not disap
proved by our Board in any way. Those changes in the New Y ork
State law which have been enacted in the past 8 months have been
welcomed by us, and have assisted us in the administration o f the
statute.
Chairman W r a r e t z . Mr. Adams, o f Utah, made some rather posi
tive statements as to what an unemployment compensation law ought
to be. W e do not know whether we have the proper unemployment
compensation law in W isconsin or not. W e think our experience is
too short to determine that question. A s you know, we have a com
plete 100-percent rating plan, an employer reserve system, whereby
when an employer reaches a certain reserve and has no benefits to pay,
his contributions automatically cease. W e think there are some in
teresting and encouraging signs that indicate one socially desirable
thing that may develop out o f our plan, because it does encourage
the stabilization o f employment in plants.
I t appeals to us very much as it did in workmen’s compensation
years ago. I f we say nothing can be done, we will not do anything.
A defeatist attitude never brought anything anytime at any place.
The problem o f stabilization o f employment is not going to be an
easy one, but I think i f energy, determination, investigation, and
study are given to it, much can be accomplished.
In Wisconsin, fo r instance, we know this. In comparing two years,
1938 and 1939 (and not including any period involved in the present
increase o f employment), we know that whereas now about 900 o f
our employers are operating on a zero percentage o f contributions,
the year before there were only 400. Over 4,000 are operating on
1 percent and before there were 2,400. The number o f employers who
paid more than the normal 2.8 percent was reduced from 656 to just a
couple over 600.
W e know a good many companies are furnishing their employees,
on an average, 49 weeks o f full-time employment, and that because
313421°—41-----9
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LABOR LAWS AND THEIR ADMINISTRATION, 1940
o f what they have done not only have they stabilized employment for
regular employees but they have actually been able to put on more
men.
It seems to me that with these encouraging signs we ought to be a
little bit slow in condemning a plan when no other plan has been
given enough time to demonstrate its worth. The experiment ought
to continue, especially i f the benefits under the law are reasonably
adequate fo r a reasonable length o f time. Just as the laws develop,
I think the benefits ought to be made more liberal, and especially i f
the reserve is sufficient, so that no employee will go without his
benefits.
Mr. L ubin . In view o f Mr. Altmeyer’s remarks and particularly o f
what Mr. Adams had to say, I wonder i f consideration should not be
given to the question o f additional compensation for workers in de
fense industries who may find themselves without employment due to
a sudden slackening o f work.
Hundreds o f thousands, yes, millions, o f people will be absorbed
into industry within the next 2 years. Many people will have to
go through training courses to adapt themselves to the new demands
o f industry; and apparently, enough thought is not being given as
to what is going to happen to these people the day when the program
starts tapering off, i f and when it does.
W e have taken it for granted that it is fair and just that those
who put capital into industry to produce things for the A rm y and
Navy shall be given special consideration, so that capital can be
protected in the event the program comes to a sudden ending. W e
have changed our tax laws with a provision made to write off a plant
in 5 years, but i f an order should cease before that period is over,
arrangements aTe made whereby negotiations can be started with
the Government, under certain circumstances, fo r the Government to
purchase the unused equity.
H ow about the millions o f workers who may no longer be needed
at the end o f 2, 3, or 4 years, and who will have to have special train
ing to .readapt themselves to jobs in civilian life? It has occurred to
me that perhaps the question might be raised by this association, or
by us as individuals representing given constituencies, as to whether
we should not amend the Unemployment Compensation A ct, at least
to the extent o f having severance wages— dismissal wages— for those
people added to industries in defense areas, so that after a given
date their contribution is to be treated as a separate fund. In fact,
some o f us have been talking about, let us say, an additional con
tribution o f 2, 3, 4, or 5 percent on the part o f the employer. I t has
been suggested by some people who have looked into the problem,
and know more about it than I do, that it operate on a 5-percent
ADJUSTMENT OF INDUSTRIAL DISPUTES
125
contribution basis by both the employer and the worker, with a
provision that if a person voluntarily leaves his job he can get his
contributions back, but if he is dismissed because o f no need for his
services he can get the 5 percent he contributed and the 5 percent con
tributed by the employer.
I f you work it out on a 10-percent basis, each side contributing
5 percent to build up a savings fund, a man who had been employed
2 years would have accumulated 20 percent o f his annual earnings.
This would be 10 weeks’ additional compensation upon his dismissal.
I throw the question out fo r discussion.
Few people seem to be sufficiently interested in acting on it, but
to me it is vitally important that we maintain some sort o f economic
and social balance and stability. I f our program ever comes to an
end, it is equally as significant that we provide for the worker who
w ill be without employment as it is now that we provide guns for
the Arm y, for instance, and that we expand plants for immediate
needs.
Mr. G o l d y (Illin ois). I f Dr. Lubin’s statements were directed
at Dr. Altmeyer, I should like to add a question along this line.
There is, in addition to the problem o f what would be done with
workers who have been called into the defense program, if and when
the defense program tapers off, another problem which concerns the
unemployment compensation program. I f the present limited emer
gency proclaimed by the President is replaced by a full-grown na
tional emergency, it will undoubtedly lead to the imposition o f labormarket controls. W hat role will unemployment compensation play
in such labor-market controls ? I f workers are shifted from industry
to industry, locality to locality, or from one area o f the country to
another, what provision will be made to finance this transference?
W ill unemployment compensation have any part to play in this
financing? I f the workers’ families cannot be moved at the same
time that the workers are transferred, because o f a lack o f adequate
housing facilities around the plants in which they will be working,
will additional income be provided to the workers to help them sup
port their families and themselves in two localities at the same time ?
I f so, will these funds come from unemployment compensation?
These examples are only illustrative o f a great variety o f situa
tions which will occur, should the defense crisis deepen, in which an
additional subsidy will have to be given to workers. The question
is, what plans have been formulated to m odify unemployment com
pensation so that it will tie in with our defense needs ?
Miss S c h n e i d e r m a n (New Y o rk ). I had hoped that Mr. Altmeyer
was going to say something about the groups o f workers who are not
yet under the act. He did mention the agricultural workers, but
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LABOR LAWS AND THEIR ADMINISTRATION, 1940
how about the domestic workers who do not profit either by the
Social Security A ct, the workmen’s compensation law, or the unem
ployment insurance law? They are a tremendous group and cer
tainly ought to be protected just like anybody else.
There is need o f giving consideration to seasonal employment.
Wisconsin may be blessed by having industries that operate the
greater part o f the year, but we in New Y ork State have many in
dustries that operate only 20 to 25 weeks a year. Surely the question
o f seasonal employment ought to be given consideration and solution
made prior to the establishment o f merit rating.
Mr. A l t m e y e r . On Dr. Lubin’s suggestion, let me say, there has
been some thought given to that, and at the moment I believe the
thinking is along the lines o f having that a requirement in the defense
contracts that are issued. That would be a more flexible arrange
ment, since you could gear the fund and the benefits to actual defense
workers. Even then you will have difficulty in a case, for instance,
where an employer may devote only 10 percent o f his work force
to a defense contract. Then again you will have considerable labor
turn-over and the question arises as to what will happen to this fund
that is being built up for a particular worker when he quits one
contract job and perhaps when he is transferred to a nondefense
operation in the same plant or takes a job with another employer.
However, I think the idea is good and I think we ought to push
forward on it.
Mr. G oldy’s question was “ W hat about the payment o f dependents’
allowances in cases where persons are transported from their home
community to another community?” It seems to me that this gets
you into the whole question o f control o f the labor market. That
has to be considered very carefully. It has a great many implica
tions. It means you have to lay down priority defense industry
occupations. I t means you have to require employers, perhaps, to
get all o f their labor supply through public employment offices and
require workers to get their jobs through public employment offices
in order to control a situation where the Government would be actually
paying fo r dependents’ allowances. Therefore, you cannot consider
a question like that just as an isolated proposition. R ight now, I
think we ought to go very slowly in interfering with the normal
ways in which men get jobs and employers get workers. I t ought
to be an educational proposition to induce employers and workers
to use the public employment service as much as possible so that
we can retain a high degree o f orderliness in the labor market.
On Miss Schneiderman’s suggestion about coverage o f domestic
employees and seasonal workers under the Unemployment Com
pensation A ct and the old-age insurance and survivors’ benefits law,
ADJUSTMENT OF INDUSTRIAL DISPUTES
127
let me say that we are fully cognizant o f the need for some sort
o f a provision for these workers, and we are, o f course, in hearty
accord with Miss Schneiderman’s feelings. W e think that both the
Unemployment Compensation A ct and the old-age insurance and
survivors’ benefits law should be amended, and that there is no
reason, from an administrative standpoint, why that could not be
done, considering the 5 year's o f experience we have had back o f us.
Incidentally, domestic servants are not covered under the workmen’s
compensation laws. As a matter o f fact, only 50 percent o f the
workers are covered under these laws 30 years after their enactment.
Dr. P atto n (New Y o rk ). Mr. Altmeyer made another remark
which seems to me to be o f great importance. H e spoke about the
overlapping o f social insurance agencies. I wonder i f the problem
which has been presented to me has not occurred in a number o f
other States.
In the early part o f this year there was a man in my office who
was getting $22.50 a week disability compensation fo r an injury
he received back in March 1939. He was to get that $22.50 a week
all through 1939 and on into 1940. In December o f 1939 this man
became 65 years o f age and he wanted to know if there was any
reason to prevent him from applying fo r old-age benefits. W ell, I
was not so sure about that and I said, “ You just go down there and
ask them.” I told him he would have to make out an application.
I said to him, “ Y ou will have to sign a statement that you have
retired from business activities.”
Then he wanted to know i f the old-age insurance were paid him
would he keep on getting his $22.50 a week disability. Y ou know
that with the $22.50 a week plus his old-age pension the combined
income would be larger than that which he received before he was
injured. I told him I would not attempt to answer that question
fo r him. I could visualize some lawyer examining the case and
saying, “ This man was receiving $22.50 a week as a partial reim
bursement for loss o f wages, yet he also certified that he was not
receiving wages when he applied for the old-age pension.” So I
said, “ Far be it from me to advise you on that.” I wonder if any
o f you in other States have met with this problem.
Mr. A n d r ew s . I should like to ask Mr. Altmeyer a question. In
the Wagner-Peyser A ct, provision was specifically made fo r the
States to participate in the administration o f the Employment Serv
ice, partly through representative advisory councils. In New Y ork
State from the beginning we have had such a council. It has become
increasingly useful in this State. It is active, it is effective, and it
is exceedingly helpful, I am sure, to the State o f New York, and I
believe it will be to the Federal Government.
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LABOR LAWS AND THEIR ADMINISTRATION,
19 4 0
M y question is, what is the attitude, the policy, o f the Board at
present in reference to these State advisory councils which are re
quired by the W agner-Peyser A ct under the Employment Service?
Mr. A l t m e y e r . W e recently completed a study o f the activities o f
these advisory councils and have within, I suppose, the last 10 days
or 2 weeks sent out a letter to the State agencies calling to their
attention the requirement in the W agner-Peyser law (and the laws
o f most o f the States as far as that is concerned) that there be
an advisory council and the desirability o f there being one.
There are many State councils that have been completely inactive
over the last year or so, and that is because the State agencies do
not see the need for them— as a matter o f fact, see the disadvantage
o f having an advisory council. I am not saying I see it. They
see it and you can, o f course, as you know, drive a horse to water
but you cannot make him drink; and that is the way it is with
advisory councils. O f course, if they are going to serve a function
in a particular situation, that means an understanding o f what
their function is by both the State agency and the advisory council.
In some States, the reverse has been true in that the advisory
council has been too active, assumed administrative responsibility;
and that is just as bad, i f not worse, than an inactive advisory coun
cil. You then get confusion and duplication, which is bound to lead
to misunderstandings, disorganization, and disruption o f administra
tive processes.
Mr. A ndrews. A t the present time in the set-up o f the Federal
Board in Washington, is there a person whose duty it is to see that
this part is carried out?
Mr. A ltmeyer . Mr. Fred C. Croxton has been assigned that par
ticular task, but unfortunately his w ife has been very ill and the
matter has been handled pretty largely, so far as he is concerned, on
a correspondence basis, although he has undertaken to stimulate our
regional representatives in their contacts with the State agencies to
discuss this matter and encourage the use o f advisory councils. In
some States, this has been very helpful.
W e recommend a joint, not separate, advisory council at the State
level. The special problems o f placement and insurance can be
handled through subcommittees o f a general council.
Factory Inspection and Safety
F a c to r y In sp e c tio n
R ep o rt o f the C om m ittee on F a c to ry In sp ection , b y J o h n M. F a l a s z
(Illinois
D epartm en t o f L a b o r ), Chairmam
[Submitted but not read]
A review o f activity o f State legislatures shows that some progress
has been reported in the field o f factory inspection by the various
States during the year 1939 and first half o f 1940. Seven States have
reported enactment o f legislation affecting the administrative set-up
o f factory inspection divisions in their respective States. Im por
tant changes denoting progress were made in Alabama wherein was
wTas created a department o f industrial relations with broad inspec
tion and rule-making powers. In Rhode Island, likewise, a depart
ment o f labor, with a division for factory inspection service, was
created. •Eleven States reported additions to the safety code and
expansion o f rule-making powers. Nine States reported an increase
in civil-service personnel. Thirteen States participated in the train
ing courses for factory inspectors under the direction and sponsorship
o f the Bureau o f Labor Standards o f the United States Department
o f Labor. In connection with this phase o f factory inspection, it
must be noted that a study o f the system o f training inspectors shows
a lack on the part o f the States o f continuous training throughout
the year. Only nine States reported systematic methods o f instruc
tions o f factory inspectors. It is a known and accepted fact that
industrial development from a viewpoint o f safety requires constant
study in order to cope with the ever-increasing hazards which are
incident to its development. It is necessary, therefore, that factory
inspectors meet regularly once each week, i f circumstances permit,
and not less than once a month under any conditions, in order to be
apprised o f the latest developments in industry, the hazards con
nected therewith, ways and means o f coping with the hazard, and the
reduction o f accidents and disabilities from occupational diseases.
Unless such a program is followed throughout the States, the efforts
o f the United States Bureau o f Labor Standards in the promotion o f
safety schools will not have been o f much value.
Since the last convention held at Tulsa, Okla., in 1939, the phase o f
industrial life in this country has undergone a rapid change due to
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LABOR LAWS AND THEIR ADMINISTRATION, 1940
the war on continental Europe and its effect on our country. The
national defense program is one o f the consequences o f this change.
W e who are engaged in the administration o f laws affecting the lives,
health, and safety o f the employees in industry, are confronted with
new and greater obligations and duties than ever before. It can be
said without hesitation that the success o f this program is dependent
upon safety. It is the duty o f every labor-law administrator to
preserve to the utmost the health and safety o f those employees
engaged in the production o f goods to be used for defense purposes.
The factor o f speed in the production o f defense goods, though vital
and necessary, does not sim plify nor make easy the task o f adminis
tration o f health and safety laws. The fact is that we are confronted
with a definite task to perform , and that is not to permit defense
machinery already set up and functioning to bog down because o f a
lack o f efficient safety laws, rules, or codes in the States.
Safety Codes and Rule-M aking Powers
Experience in those States which have adopted health and safety
laws providing fo r rule-making powers indicates that this method o f
enacting safety regulations is workable and provides the element o f
safety when new regulations are necessary to meet new conditions.
This committee recommends the adoption o f health and safety laws
which provide fo r such rule-making powers. Keeping in mind the
emergency which is present in the defense program, it may not be
possible in all instances to change State statutes or adopt new laws
in order to provide better or more efficient health and safety laws.
It may be, therefore, necessary to utilize such Federal laws which are
now in force or such advantages which are offered to the States
by the United States Department o f Labor to bring about safer
working conditions in industry.
W alsh-Healey A ct
Most Government contracts which are granted at the present time
in contemplation o f the national defense program are awarded under
the terms o f the W alsh-Healey Public Contracts Act. Subsection
E o f the first section o f that act provides:
That no part of such contract will be performed nor will any of the materials,
supplies, articles, or equipment to be manufactured or furnished under said
contract be manufactured or fabricated in any plants, factories, buildings, or
surroundings or under working conditions which are insanitary or hazardous
or dangerous to the health and safety of employees engaged in the perform
ance of said contract. Compliance with the safety, sanitary, and factory in
spection laws of the State in which the work or part thereof is to be per
formed shall be prima facie evidence of compliance with this subsection.
FACTORY INSPECTION AND SAFETY
131
This provision places an obligation, not only upon the manufac
turer who accepts the contract to produce the goods, but also upon
the State wherein is located the plant in which these goods are to be
manufactured. Responsibility o f the State is clear under this law
insofar as health and safety are concerned. I f the State is equipped
with the proper legislation to effectuate the purposes o f this section,
and, further, i f such legislation is efficiently enforced, its part in the
national defense program, insofar as Government contracts under
this law are concerned, will have been discharged. In such States,
however, in which there are no safety codes or statutes governing
the health and safety o f workers in industry, this committee desires
to call the attention o f the administrators to section 4 o f that act
in which it is provided that the Secretary o f Labor shall have au
thority, from time to time, to make, amend, and rescind such rules
and regulations as may be necessary to carry out the provisions o f
that act. This has been interpreted to mean that in the event a
State does not possess sufficient or proper regulatory powers for in
dustrial safety, then the Secretary o f Labor may enact such rules
and regulations as may be necessary to bring about safe working
conditions in any plant engaged in the manufacture o f goods under
a contract awarded under this act. Although to the knowledge o f
this committee this power has not been exercised, it is not at all
improbable that it will not be in the immediate future when, and
if, conditions arise that may demand enactment and enforcement
o f such rules. In the same section, the Secretary o f Labor is also
empowered to call upon State officers to aid in the enforcement o f
such rules. This committee recognizes the fact that it is a broad
power and should be exercised only when extremely necessary but
should not be overlooked nor fail to be used wherever and when
ever the lives and health o f men and women may be endangered, or
the success o f the national defense program may be in jeopardy.
In view o f the provisions o f the Walsh-Healey A ct, the adminis
trators o f safety laws in every State should, for the coming year, out
line a definite and comprehensive program for the enactment o f
health and safety laws designed to cover every possible hazard,
whether mechanical or occupational, and by that program obviate
the necessity o f being compelled to enforce Federal health and
safety regulations. This committee, however, in order to insure
protection to employees in those States where full coverage o f
health and safety laws is not afforded them, recommends that the
Secretary o f Labor draft rules and regulations under the WalshHealey A ct which can be enforced by the Federal Government when
ever it may be necessary to do so, or by the State officers empowered
to do so under the act.
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1940
N a tio n a l C o m m itte e f o r C o n s e r v a ti o n o f M a n p o w e r i n D e fe n s e I n d u s tr ie s
In the past few weeks a further step was taken to safeguard the
productive manpower o f the Nation in the emergency defense pro
gram by the establishment o f the National Committee for Conserva
tion o f Manpower in Defense Industries. The Secretary o f Labor,
knowing that every local and State agency would do all within its
power to insure protection to all those engaged in the production o f
defense goods, felt that the employer and manufacturer, likewise,
should lend a helping hand in this phase o f the program. As a con
sequence, after a series o f conferences with well-known industrial
safety engineers, a 24-man committee was appointed to formulate
plans for the education in safety o f all employers and employees
engaged in the production o f goods upon Government contracts.
Such a plan is commendable and vitally necessary in order to bring
to all persons concerned a full understanding o f the accident problem
and its consequences. Members o f this committee have been ap
pointed as regional representatives to educate and train both em
ployers and employees in sound safety practices, promote and
organize safety organizations, and, in general, carry on accident pre
vention in order to preserve the manpower engaged in the defense
program. It is the earnest recommendation o f the committee on
factory inspection o f the International Association o f Governmental
Labor Officials that all o f its members, particularly administrators
o f health and safety laws throughout the States, cooperate in every
respect with the members o f the National Committee for Conserva
tion o f Manpower in Defense Industries, to insure full success to the
purpose o f that program. Full cooperation should be accorded to
each regional representative through the service o f factory inspectors,
industrial hygiene engineers, chemists, and through other facilities
available in the State labor departments.
I n d u s t r ia l H y g ie n e
Throughout the years a greater portion of efforts of accident pre
vention work have been devoted to the prevention of accidents caused
by mechanical hazards. To a great extent this is true today. A l
though no comparative statistics are available covering the Nation
as a whole, which would show the loss in manpower caused each year
by mechanical hazards as against the loss caused by occupational dis
eases, yet if such figures were available they would indicate in all
probability that one hazard is as serious as the other. Nevertheless,
a study of the progress in the various States of the Union shows
little advancement in the establishment of agencies for the prevention
of occupational diseases in comparison with that in the prevention
of mechanical hazards.
FACTORY INSPECTION AND SAFETY
133
I t must not be misunderstood that it is the intent o f this committee
to minimize the importance o f accident prevention work insofar as it
concerns elimination o f accidents due to mechanical hazards, but,
rather, its purpose is to stimulate progress in the field o f industrial
hygiene. U p to the present time only 3 State labor departments o f
the 48 States in the Union have created and established industrial
hygiene units fo r the study and prevention o f occupational disease
in their respective States, yet it cannot be denied that the problem
o f occupational disease as a disabling factor in industry is present
in every State in the Union and presents as great a problem as
accident prevention.
A s a comparison, with the exception o f a small minority, practi
cally every State in the Union has enacted laws in some form or
other fo r the prevention o f accidents due to mechanical hazards.
It thus becomes very evident that this phase o f industrial safety has
been practically entirely overlooked by the States.
Industry in any form today in the production o f its goods takes
advantage o f the most modern methods o f production. Science by
means o f the latest developments in engineering, physics, and chem
istry, has greatly aided industry in the production o f its goods. It
has introduced into industrial life many forms o f chemicals, com
pounds, and substances heretofore unknown and not utilized by in
dustry. It is an undisputed fact that the uncontrolled use o f these
substances in industry have been responsible for many types o f occu
pational diseases which have not only been disabling but, in many
instances, fatal as well. Even though the physical effects o f silicosis
and lead poisoning are well known because o f the great amount o f
research work completed in this field and large amounts o f data
published on these two substances, yet little has been done to apply
the knowledge which we possess to eliminate the effects which they
produce upon industrial workers. Added to these two recognized
causes o f occupational diseases are the almost innumerable com
pounds, substances, and chemicals which are used in industry today
about which little or nothing is known by the ordinary factory
inspector. The need, then, for industrial hygiene units within State
labor departments becomes very evident.
A study o f the requirements and qualifications o f a factory in
spector as followed in most o f the States in the Union shows that he
is not required to possess a knowledge o f chemistry or chemical
engineering to such a degree as to enable him to detect occupational
disease hazards which he may encounter in the course o f his inspec
tion work. Such qualifications were not contemplated by any State
labor department in the selection o f its factory inspectors. There
fore, in order to cope with an occupational-disease problem intelli-
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LABOR LAWS AND THEIR ADMINISTRATION, 1940
gently, it is necessary for the factory inspector to secure the aid o f
technically trained men who are able to recognize occupational-disease
hazards and to advise him as to how such hazards should be con
trolled or eliminated. In a properly organized factory inspection
division the factory inspector acts as a liaison officer in the detection
and reporting o f occupational diseases in his respective district.
W ithout the industrial hygiene unit he would be practically power
less to correct, control, or eliminate the many difficult types o f hazards
which are encountered in industry today. This phase o f industrial
safety, although it may have been inadvertently overlooked in the
desire to produce industrial safety through the passage and enforce
ment o f laws designed to eliminate mechanical hazards, must not be
permitted to remain obscure any longer but must be developed to a
point where workers subjected to occupational-disease hazards will
be protected on an equal basis with those exposed to mechanical
hazards. This committee points out that an industrial hygiene unit
is indispensable i f efficient and thorough factory inspection service is
to be carried on in a State labor department.
It is, therefore, the recommendation o f this committee that every
State in the Union within the next year take steps to create and
establish industrial hygiene divisions within the State labor depart
ments fo r the prevention and control o f occupational diseases.
T h e N eed f o r U n i f o r m S ta n d a rd s i n I n d u s t r ia l H y g ie n e
Until recently the developments in the field o f industrial hygiene
have been the results o f individual effort unrelated and without any
semblance o f uniformity. A physician, chemist, or engineer, would
interest himself in some particular phase o f industrial hygiene, con
duct some experiment or research, give some study to the problem,
and then publish his results. A s a consequence, the informative
literature on these subjects is composed o f individual studies, results
o f which are not always comparable with those of other persons
engaged in research in this field. Industrial hygienists today must
devise their own methods o f collecting samples and determining the
amount o f the contaminants. The field o f industrial hygiene being
comparatively new to other fields o f scientific research, it is under
standable that methods o f taking samples, analysis, and determina
tion o f the contents o f the contaminants are not well defined. There
are at least three accepted methods o f collecting dust samples. There
are no less than six different methods o f lead determination, and no
less than five different methods for determination o f benzol in air
samples. Although individual effort o f research is commendable, it
is an accepted fact that much more can be accomplished in technical
fields through cooperative research. W ith the expansion o f industrial
hygiene activities throughout the States, a great deal o f confusion
FACTORY INSPECTION AND SAFETY
135
can be avoided through the establishment of a central unit, the sole
purpose of which will be the standardization of all the various func
tions which are carried on in industrial hygiene work. There is a
great need for research on the effects of new industrial substances,
or poisons, harmful concentrations, methods of sampling, and methods
of analysis. It can be safely said that the groundwork in this field
is done. The real need is for a coordinating agency which can direct
and guide the work done by the individual units of the various States.
The benefits o f such central unit would be many. Such unit would
be in a most advantageous position to set up standards for the col
lection o f dust samples, the determination o f contaminants, and an
alysis o f such samples. Duplication o f effort could be avoided in
States where a large number o f industries use a common substance
which is harmful to those persons exposed to it. A detailed study
could be made o f these substances in those States and the results o f
those studies could be forwarded to this central unit for distribution
to other industrial hygiene units in other States. In this manner
the necessity fo r similar work, in States where this common sub
stance is used infrequently, would be unnecessary. Likewise, this
central unit would be in a better position to do research work and
conduct studies for the information and use o f all the State indus
trial hygiene units. This method o f exchange o f information would
bring about the desired result in the field o f industrial hygiene and
that is, standardization o f the various functions o f an industrial
hygiene division. This central unit would also assist the various
States in conducting surveys o f newly discovered harmful processes
in industry, and the results and effects o f such compounds and proc
esses on those persons who are exposed to them.
One o f the most important functions o f such a unit would be to
set up what are known as threshold limits for various toxic sub
stances used in industry. In order fo r an industrial hygiene division
to function efficiently and to be able to issue orders which would be
enforced through the division o f factory inspection, there must be a
known limit o f concentration o f a dust or industrial poison within
which it is safe for a person to work, or, if exceeded, would cause
injury to the persons exposed to such dust, fumes, or toxic substances.
These are frequently referred to as threshold limits or permissible
limits. A s an example, it has been generally accepted by those per
sons engaged in industrial hygiene, that 0.15 mm. o f lead per cubic
meter o f air is the permissible limit o f concentration to which a
person working with lead can be safely exposed under certain con
ditions. There have also been accepted limits fo r most o f the known
harmful substances used in industry today, such as metals, chlorinated
compounds, and other like substances. These findings, however, have
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LABOR L A W S AND THEIR ADMINISTRATION,
1940
been based upon the individual work of various scientists, physicians,
and industrial hygienists who have interested themselves and
conducted experiments in this field.
Industry, as well as industrial hygienists, in many instances have
been slow in accepting these limits, yet in order to effectively enforce
orders issued by the factory inspectors and industrial hygienists for
the control and elimination of occupational disease, there must be
an accepted standard of what constitutes a hazard whether it be in
Maine, in Georgia, or in California. In other words, a substance
that is harmful will produce the same disabling effect upon a worker
exposed to it whether such exposure takes place in New York, in
Illinois, or in any other State in the Union. It is, therefore, vitally
necessary that standardization be effected in this particular phase of
industrial hygiene work. This central unit, through cooperation,
through coordination of effort, and through surveying and collection
of information can bring about standardization of permissible limits,
and thereby remove one of the great obstacles for the prevention,
control, and elimination of occupational disease in industry.
M u rray Bill
Since only 3 State labor departments o f the 48 States in the Union
have established industrial hygiene divisions, the immediate problem
is to effect creation o f such similar units within the other 45 States
in the very near future. The question that w ill frequently be asked
is, where and how to commence. The Division o f Labor Standards,
in June o f 1939, published a pamphlet entitled: “ The W ork o f an
Industrial Hygiene Division in a State Department o f Labor.” This
is a brief study o f the functions o f an industrial hygiene division and
the manner in which it coordinates its work with factory inspections
toward achieving the highest efficiency in eliminating and controlling
occupational-disease hazards. It contains, also, some inform ation as
to equipment, personnel, and other details pertaining to the estab
lishment o f an industrial hygiene division. Inform ation concerning
type o f personnel, laboratory equipment, and other like details re
quired for the creation o f such a unit, can be easily secured from the
Bureau o f Labor Standards, or from any o f the 3 State labor
departments wherein such divisions are now functioning.
In view o f the possible financial difficulties which may confront any
o f the State labor departments in the establishment o f such units, this
committee desires to call the attention o f all the administrators o f
health and safety laws in the various States to Senate bill No. 3461
now pending in the Senate o f the United States, which has been
commonly referred to as the Murray bill. Under provisions o f this
proposed law sums o f money will be appropriated by Congress to be
FACTORY INSPECTION AND SAFETY
137
allocated through the United States Department o f Labor for indus
trial hygiene work to be conducted through State labor departments
in their respective States. The requirements under which such funds
will be allotted are comparatively simple. I t will only be necessary
to submit a plan o f organization to the Secretary o f Labor and to
obtain the approval o f such plans by the Secretary o f Labor. The
passage o f this bill would greatly ease the financial burden which
would be placed upon many States wherein industrial hygiene di
visions are necessary for the protection o f workers from occupational
diseases. Under present conditions, this bill stands out in importance
because by its scope it will enable each State to inaugurate an indus
trial hygiene program for the prevention o f occupational disease in
industry, and will in that manner contribute partially to the success
o f the national defense program. This committee stands in support
o f this bill and requests all members o f this Association to take active
steps to make the passage o f this bill possible.
The committee recommends to the members of this conference for
consideration, the follow ing points in order to insure education in
safety, reduction o f accidents, control and elimination o f occupa
tional diseases, and, in general, to create a mutual interest between
employer and employee toward the creation o f a safer place in which
to work.
1. The establishment of regular training courses for factory inspectors within
the State or through cooperation with the United States Department of Labor.
2. Establishment of weekly or other similar periodical meetings or confer
ences for the purpose of training and educating factory inspectors as to the
latest developments in industry and the resulting hazards created thereby.
3. Adoption of health and safety regulations or safety codes which will
stand as a guide to manufacturers of industrial machines and equipment and
as a practical set of rules for efficient enforcement by the factory inspector.
4. Promulgation and adoption of rules by the Secretary of Labor under the
Walsh-Healey Act enforceable in all States wherein Government contracts are
awarded, and in which no State codes or rules have been enacted.
5. Cooperation between State agencies or State labor departments, partic
ularly the divisions of factory inspection and the National Committee for
Conservation of Manpower in Defense Industries.
6. Creation and establishment of industrial hygiene units within State labor
departments for the control and elimination of occupational diseases.
7. Creation and establishment within the Bureau of Labor Standards of the
United States Department of Labor of a unit empowered to set up uniform pro
cedures in the control and elimination of occupational-disease hazards. The
adoption of standard methods of sample collection and analysis in the study and
elimination of occupational disease. The drafting of uniform codes toward the
elimination of occupational disease and the disseminaton of information on
pertinent subjects relative to the cooperation of Federal and State agencies in
the field of industrial hygiene.
8. Active support by all State labor departments and its administrators of
Senate bill No. 3461 commonly known as the Murray bill.
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F actory Inspection— Panel Discussion
Mr. F a l a s z (Illin ois). W ithout going into the preliminary p a r t
o f the report on factory inspection, which has been covered in the
report made, I should like to cover those subjects point by point
which are pertinent to the work o f factory inspection divisions.
The one important and basic principle o f factory inspection is
that a well-functioning division must have good rules or good laws
to enforce. A study o f the accomplishments in the States shows that
a minority possess what are known as rule-making powers. Most o f
the States o f the Union havei their laws placed on the books through
the legislatures, and these factory inspection acts define exactly what
factory inspectors may and may not enforce. In this we are limited
to a great degree in our latitude in making inspections. In other
words, i f changes should be desired due to changing conditions or
experiences, it is necessary always to seek the aid o f the legislature in
securing such changes in the factory inspection laws. This, to a
great extent, has been remedied through acts known as those p ro
viding fo r rulermaking powers. W e believe through experience that
this form o f legislation is best fo r the factory inspection service,
inasmuch as it enables the commission that is empowered to draft
these rules to meet from time to time, and to enact such rules and
regulations for the safety o f workers as may be necessary and as
experience shows ought to be enacted. I t gives greater elasticity to
the system.
The factory inspection division itself may point out from t i m e
to time the necessity fo r new rules to meet such new conditions, and
this committee, after looking over the situation in the various States,
believes that this particular system o f rule-making powers should b e
adopted more universally than it has been in the past.
Taking up the subject o f rules and regulations and laws further,
we come to that point in factory inspection which vitally concerns
our present problems, those concerning the defense program. W e
know that within the last 6 months the Govermnent has been award
ing contracts to industry all over the United States. W e know
further from a study that many States in the Union do not possess
any enforceable rules or laws pertaining to health and safety o f
workers. In view o f this condition, we find that Government con
tracts have been awarded to many industrial concerns in localities
where no protection is afforded to the people engaged in the manu
facture o f those goods under the Government contracts. These con
tracts are awarded under what is known as the W alsh-Healey A ct,
which you have heard discussed. Under this act, the Secretary o f
Labor is empowered to draft such regulations as may be necessary
from time to time to enforce the provisions o f the act.
FACTORY INSPECTION AND SAFETY
139
One of the provisions of that act is that every person to whom a con
tract is awarded for the production of goods shall comply with the
health and safety regulations of the particular State wherein the manu
facturing is to be done. Now, if a State does not possess or have on
its statute books enforceable rules or regulations pertaining to health
and safety, you can readily see that there will not be very much pro
tection afforded those people in that particular plant. Consequently,
the only course that is open is that some other means of protection be
afforded them and that is provided under the Walsh-Healey Act.
W e believe that in order to provide proper protection to the people
engaged on W alsh-Healey defense contracts who are now working in
industries in States or other localities wherein no protection is afforded
to them under the State powers, the Secretary o f Labor should draft
proper rules and regulations which may be enforceable by either the
Federal Department o f Labor or the State department o f labor. I
might mention that the act provides also that the State shall coop
erate with the Federal Department o f Labor in the enforcement o f the
various provisions o f the act pertaining to health and safety.
Now, should the State not have any such State rules and regula
tions, then this Federal Department provides the rules, which the
State department o f labor can enforce. W e believe that such p ro
tection should be afforded those people engaged in industries working
upon contracts under the Walsh-Healey Act.
W ithin the last few months, the Secretary o f Labor, realizing
that in order fo r the defense program to function efficiently and
smoothly and for the goods that are necessary for defense to be pro
duced with regularity as demands provide, the defense program
must not be hampered through a series o f accidents or catastrophies
in the various plants where goods are produced, has called
together a committee known as the National Committee for Con
servation o f Manpower in Defense Industries. This committee has
been called together fo r the sole purpose o f organizing throughout the
48 States a safety organization. I shall not go into the details o f this
program, for one o f the other members o f the factory inspection com
mittee w ill outline in detail its provisions, except to say that regional
directors have been appointed under this plan who are at present
located, I believe, in 8 districts throughout the United States.
Each o f these men has under his jurisdiction a number o f States, and
it is up to him to call private industry together for the purpose o f
securing cooperation in order to insure safety in those plants which
are engaged in the production o f goods for defense.
W e feel that in view o f the emergency and the large amount o f
production that is going on, the State departments o f labor can lend
a hand, insofar as cooperation with this National Committee fo r Con3134210—41---- 10
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LABOR LAWS AND THEIR ADMINISTRATION, 1940
servation o f Manpower is concerned. W e feel that the State depart
ments o f labor can aid by offering the services o f the factory inspection
division, the hygiene division, and other units within the department to
such regional directors as a means o f cooperation to insure the pur
poses o f this committee.
One o f the most important functions in any labor department, o f
course, is factory inspection. W e feel that no factory inspection
unit can function efficiently without another unit designed solely
for the investigation and inspection o f plants wherein possible occu
pational-disease hazards may exist. No factory inspection division
expects factory inspectors to be chemical engineers, chemists, venti
lating engineers, or physicians. The civil-service requirements for
factory inspectors do not provide for such requirements in any State.
Consequently, the type o f personnel selected for factory inspection is
not such that these persons are able to detect technical hazards which
exist in industry today. As a result, in those particular States where
no industrial hygiene division exists these hazards are undoubtedly
passed up. No factory inspection division can function efficiently
without such a unit. Y ou can readily understand that in order to
detect a hazard due to the possible existence o f lead, silica dust, or
any o f the other compounds or substances that are used in industry
today, you must have persons who are trained technically in that
particular field to detect these hazards. Samples o f air must be
taken. These samples must be analyzed in a laboratory. The con
tents o f such samples must be known, and before an order can be
issued which can be efficiently enforced, such knowledge must be in
the hands o f the factory inspection division in order to acquaint it
self with the hazards existing in the plant.
W e know that year after year industry is constantly progressing.
This progress brings a more complex use o f various substances which
are necessary in the production o f goods. W e know industry avails
itself o f the latest developments o f science in the production o f goods.
A s a consequence, we find that industry today uses many substances
and compounds which have not been known before and which have
not been used. Those persons who are engaged in production o f
goods in which these substances are used, are exposed to hazards
which must be controlled in some manner in order to protect those
employees. Such control and protection cannot be afforded without
the aid o f a technical staff and a unit composed o f the technically
trained men which compose industrial hygiene divisions.
W e find from an examination o f the various States that only 3 out
o f the 48 State labor departments in the United States possess indus
trial hygiene divisions. I do not think that anyone can claim that
there is a single State in the Union wherein, in some form or other,
FACTORY INSPECTION AND SAFETY
141
there exists no occupational disease. This means that in 45 States
people are working under hazardous conditions without any reason
able means o f protection. Under the circumstances this committee
feels that this conference should take definite steps for the coming
year toward the establishment o f industrial hygiene units in every
State in the Union where such units are necessary.
A lon g with the expansion o f industrial hygiene activities in the
States, when and i f such activities take place (and we hope they
w ill), in the future there will come the necessity o f standardizing
processes, methods o f analysis, methods o f taking samples, and pro
cedure pertaining to industrial hygiene work. Today most o f this
work is done individually. In other words, with the exception of
the three industrial hygiene divisions in State labor departments,
most o f the industrial hygiene work that is carried on is done by
independent endeavor. It is done either through experimentation,
through surveys, or through studies in universities and medical cen
ters. The people who are engaged in this particular phase o f the
work do so as independent units. In other words, whatever activity
they are engaged in, their efforts in that particular field are depend
ent entirely upon themselves.
Consider, for example, the taking o f samples o f silica dust. There
are today at least three known methods fo r taking samples o f silica
dust. Take, fo r example, the sampling o f lead dust— there are five
known methods; then let us get down to the analysis o f these samples,
going into the chemical laboratory. The only means open to the
chemist are those contained in the text books, which have been devel
oped through years o f research by various chemists and other people
engaged in that field. Consequently, there is a diversification of
methods in use by these individuals wherever this work is carried
on. In order to bring about uniform ity as to these particular methods
o f taking samples and analysis, it is necessary now, and will be
more so in the future, that standardization take place.
I should like to call to your attention an analogy in this particular
field, and that is the system that is used in the Department o f A g ri
culture. Let us take the methods that have been developed fo r the
testing o f butterfat. It is now known that there is one accepted
method for testing butterfat, and after many years o f practice in
that particular method even the farmer can do it with proper equip
ment. That has not come about accidentally, but through many
years o f work and research, and the final result was standardized
by the Department o f Agriculture. That is only one example of
the point I am bringing out insofar as industrial hygiene work is
concerned. In order to .secure the most efficient methods, foolp roof
methods i f I may say so, we will have to standardize our methods
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LABOR LAWS AND THEIR ADMINISTRATION, 1940
of doing work so that there will be no question as to how the man
in California does it or the man in New York does it. W e will know
that if a sample of air is taken, the same procedure follows in New
York as in Illinois or in California. W e believe this is something
absolutely necessary in order to carry out efficiently the work of an
industrial hygiene unit.
W e feel that it will (and may I point this out before going into
some of the other advantages of standardization) also eliminate du
plication of effort. Let us say, for instance, that in Illinois we have
a specific problem of industrial hygiene. W e may have a concentra
tion of lead-battery plants, for example. Our industrial hygiene
division can make a study and a survey of those plants, and secure
certain definite knowledge concerning that occupation. W e may go
further and may, through many surveys, through many investiga
tions, determine definite methods of taking samples and analyzing
those samples; in order words, we may begin to standardize a method
as to lead. W hy then should another State unit located, let us say,
in the West, in California or somewhere else, go through the same
amount of work that has been done in Illinois on the same subject.
W e can save work and save effort by disseminating information col
lected in one State and applying it to conditions found to be alike
in another State. That is the elimination of duplication of effort.
In order to bring about a possible standardization of methods or
dissemination of information, we believe that it would be best if a
unit were established in the United States Department of Labor for
the purpose of standardizing such methods and disseminating such
information as is useful to industrial hygiene work. W e feel that
through the establishment of a central unit of that kind the expansion
of industrial hygiene work throughout the United States would be
much more rapid.
W e feel that much effort which has been expended in the past
through individual efforts can be eliminated. W e know that in our
industrial hygiene division in Illinois when we come to some new
problem we could perhaps save ourselves a lot of labor by going
to the central unit and determining if any such experience has been
recorded before. This would aid us and prevent us from stumbling
in the dark. W e believe such a unit should be established in the United
States Department of Labor in order to promulgate and promote in
dustrial hygiene work.
Further1, as to the establishment of industrial hygiene units through
out the States there must be mentioned the financial aid that may be
necessary in setting up such units. W e know from experience what dif
ficulties confront every State labor department in setting up a new
unit. W e know that it is not a simple task* just to say we are going
FACTORY INSPECTION AND SAFETY
143
to set up an industrial hygiene unit. W e know funds must be se
cured, money must be appropriated, etc.
A t the present time there is pending in the United States Senate
a bill known as the “ Murray bill.” I think the number is 3461. The
purpose o f the provisions o f that bill is to extend to the States through
the United States Department o f Labor aid in the promotion o f in
dustrial hygiene work— aid in the protection o f people engaged in
industries who are exposed to occupational-disease hazards. In other
words, the Murray bill recognizes the need for expanded industrial
hygiene activity. It recognizes the further fact that little or nothing
has been done throughout the United States to further these activities.
Consequently, under its provisions it allows any State labor depart
ment to apply to the Secretary o f Labor for funds, upon the sub
mission o f a plan, which i f approved will enable the Secretary o f
Labor to allocate such funds to carry on its industrial hygiene work.
That, in our opinion, is a perfect plan fo r the establishment o f in
dustrial hygiene units, particularly in those States which have ex
perienced financial difficulties in the past in securing funds for the
promotion o f this work. W e believe that this bill should receive the
backing o f every State labor department and o f every delegate to
this convention. Not only should it receive verbal approval, but it
should receive active approval, by securing the support of the various
people in your State, getting their cooperation in whatever manner
may be necessary to secure the passage o f this bill.
A s a resume, we have drafted a resolution proposing to the reso
lutions committee that the various points which I have enumerated
this morning be adopted in the form o f a resolution. I am going to
ask the chairman o f this morning’s session, Mr. Durkin, to turn this
resolution over to the resolutions committee.
1. The establishment of regular training courses for factory inspectors within
the State or through cooperation with the United States Department of Labor.
I did not cover that particular subject in my paper and, inasmuch
as it has not been discussed, I should like to mention that the United
States Department o f Labor in offering its services to train factory
inspectors is doing a very good service. W e have taken advantage o f
it in the past on several occasions and have noticed the difference in
the type o f work produced by these inspectors. W e find upon exami
nation o f the records o f the various States that only one-third o f the
States in the Union have participated in such training programs.
W e believe this type o f service offered through the United States
Department o f Labor should be availed o f in the future more than
it has been in the past.
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LABOR L A W S AND THEIR ADMINISTRATION,
1940
2. Establishment of weekly or other similar periodical meetings or conferences
for the purpose of training and educating factory inspectors as to the latest
developments in industry and the resulting hazards created thereby.
3. The adoption of health and safety regulations or safety codes which will
stand as a guide to manufacturers of industrial machines and equipment, and as
a practical set of rules for efficient enforcement by the factory inspector.
4. The promulgation and adoption of rules by the Secretary of Labor under
the Walsh-Healey Act enforceable in all States wherein Government contracts
are awarded and in which no State codes or rules have been enacted.
5. Cooperation between State agencies or State labor departments, particu
larly the divisions of factory inspection and the National Committee for Con
servation of Manpower in Defense Industries.
6. Creation and establishment of industrial hygiene units within State labor
departments for the control and elimination of occupational diseases.
7. Creation and establishment within the Division of Labor Standards of the
United States Department of Labor of a unit empowered to set up uniform
procedures in the control and elimination of occupational-disease hazards; the
adoption of standard methods of sample collection and analysis in the study
and elimination of occupational disease; the drafting of uniform codes toward
the elimination of occupational disease; and the dissemination of information
on pertinent subjects relative to the cooperation of Federal and State agencies
in the field of industrial hygiene.
8. Active support by all State labor departments and its administrators of
Senate bill No. 3461 commonly known as the “Murray bill.”
Mr. D u r k i n . The resolution as read will be referred to the resolu
tions committee.
Mr. D a n ie l s (New Y o rk ). When Mr. Lubin requested me to take
part in panel discussion this morning, he asked me to discuss two
specific questions: (1) W hat system do you find most effective in
districting your inspectors? Include discussion o f permanent as
signment o f districts versus assignment out o f a central office; (2)
W hat method do you use in insuring the most effective coverage o f
plants by inspection?
I have been very much interested in the report o f the factory inspec
tion committee o f this organization, which was just presented by Mr.
Falasz. There are numerous things in it by which every State depart
ment o f labor can benefit, and that goes for the older, as well as the
newer, departments. There are things in it which New Y ork State
needs to do very decidedly.
Inasmuch as I have been requested to discuss very briefly the two
questions I read, the few remarks I have to make will necessarily
be limited to our own department in the State o f New York.
In order to tell you how our district inspectors function, it might
be well to give you a very brief outline o f our factory inspection
bureau o f the division o f inspection. In New Y ork State we inspect
each year approximately 70,000 factories; last year it was about
70,500. W e have for that work a field inspectors5 force o f 105 at
the present time, with a supervisory force o f 12. The State is di-
FACTORY INSPECTION AND SAFETY
145
vided into tw o main districts. The metropolitan area and five out
side counties constitute one, and the balance o f the State, everything
above Westchester, constitutes the second. Each o f these is in charge
o f a chief inspector. The metropolitan district is divided into five
supervisory districts and the up-State district into four, so that our
unit fo r assignment o f inspectors becomes the supervising district.
The supervising inspector in each district is, o f course, an experienced
factory inspector. W e have, as all o f you probably know, a civilservice system in New Y ork State. No one can enter the service except
through the door o f a civil-service examination and certification by
the department o f civil service, and promotions are also made through
the same channels. Our supervising inspectors, therefore, are ex
perienced men who have passed a competitive examination and hav
ing been through such examination have become eligible for pro
motion to the position o f supervising inspector and supervisory
work. They are primarily responsible fo r assignments o f the local
or field inspector to the district or subdistrict which he is to cover.
A s vacancies occur they are filled, as I have indicated, from civilservice lists. A new man may be assigned by the supervisor to the
district covered by the man who has retired or resigned or left the
service, or the supervisor may, i f he wishes, shift other inspectors
about and change his district assignments. Our assignments are
also reviewed each year, so that at the beginning o f any year the
supervisor may, and frequently does, shift to some extent or even
all the inspectors in his district i f he sees fit.
The yardstick used in making assignments o f inspectors consists
o f three or four different measures. First, o f course, the supervisor
must so subdivide his district that the work in it can be covered in
the year fo r which he is making assignments; therefore, it is neces
sary that the districts be approximately equal in the amount o f work
they represent.
The convenience o f access to the factories in the district must be
given consideration; and while we do frequently request or require
our inspectors to move their homes from one city or village to
another, we do not do that unless there is very good reason for it.
It is, however, done occasionally.
The principal thought in mind in assigning, however, is the capa
bility o f the inspector. W e would not, for instance, assign a new
man, one just appointed to the work, to inspect a large industrial
center. W e would break him in for the first few years in less im
portant work, i f possible, unless in his early service he develops
quickly and shows that he has unusual ability.
Now, I said the first few years— that presupposes a permanent
civil-service force. In the division o f inspection quite a number
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LABOR LAWS AND THEIR ADMINISTRATION,
19 4 0
o f years in service are represented for the 170 men who compose
our factory inspection unit. I should not like to tell you just how
long I have been in the department o f labor; my bald head speaks
fo r itself, perhaps. There are others in the division who have been
there longer than I have. Personally, I cannot conceive how an
inspection service can be built up on anything but a permanent civilservice basis. Some o f the gentlemen with whom I have talked
in these conventions about systems with no civil-service basis have
told me that, whatever the period is, they expect a complete turn
over o f their force. That may be all right and it gets new blood in
the work, o f course, but I cannot quite conceive how it can be done.
Our inspectors cover in each district assigned to them all types o f
factories. In one day a man may inspect 12 or 15 little tailor shops,
dry-cleaning plants, hand laundries, etc., along one street, and the
next day a large industrial plant where thousands o f people are
employed and every problem imaginable to a factory inspector is
presented.
W e have considered from time to time the matter o f specializing;
that is, assigning particularly capable inspectors along some line to
that particular specialty. However, that has never been carried out.
Mr. Falasz in his report spoke o f the rule-making authority.
Probably there is no one here who does not know that New Y ork
has had that provision in its laws since 1913. When factory inspec
tion was begun in New Y ork State in 1886, the entire factory in
spection law could be printed on one sheet the sizte o f an ordinary
letterhead. Now, we have a volume o f statutory law comparing fav
orably with the fam ily Bible in size, with 33 separate codes o f rules.
W e still, however, require each o f our factory inspectors to familiarize
himself with all o f that body o f legislation and rules1 so as to be
competent in the whole thing. Whether or not that is a good policy
I am not debating this morning.
W e do not rotate inspectors ordinarily. A n inspector assigned
to a local district remains in that district as long as h'e conducts
himself properly and performs his work in accordance with our re
quirements, and in a satisfactory manner. I am well aware o f the
fact that there are good arguments for the other policy; that is,
changing every year or 2 years or whatever period you wish and
taking your inspectors from district to district. There are, I think,
equally good reasons for leaving an inspector permanently or at
least fo r a long period o f years in the same district. I f our work
consisted entirely o f policing for the enforcement o f law and code
requirements, the argument for rotation would be a little Stronger
than I think it is.
It is conceivable that the inspector in the same field year after
year may overlook the same violations each time he goes to a plant.
FACTORY INSPECTION AND SAFETY
14 7
That, however, does not happen under our system if the supervising
inspector is on his job. W e feel, however, that the most important
work o f a factory inspector is not law enforcement. Now, do not
understand me to mean that I do not want our inspectors to enforce
the law. W e do and I think they do enforce it, but beyond that
the important work, the most important work they have to do, is
selling safety and educating the man in the shop, both the proprietor
and the employee, in what factory inspection is all about; and the
man who stays in the district for a considerable period o f time is
much better able to do that.
A short time ago I received a copy o f a paper read before a cer
tain safety congress by the man in charge o f safety in one o f the
largest industrial concerns o f the country. In that, I noted a para
graph in which he referred to inspector B, who had inspected their
plant at a certain location for something over 20 years. Now, it just
happens that that particular plant is in the State o f New Y ork and
that I had been talking with inspector B about that plant. This
gentleman went on to say that because o f the close contacts between
the organization and inspector B they were able to do much better
safety work. In other words, they discuss their plans with inspector
B. I f inspector B sees in another plant a good method o f accident
prevention, he takes it to this plant.
The other question relates to our method o f covering all the fac
tories. In the State o f New Y ork we do not worry so much about
the coverage from the point o f view from which I think this question
was worded, because we inspect each factory in the State each year.
W e do not feel that anything less than that is doing our work in
a way which results in either proper enforcement or the extension
o f the type o f service which I have tried to describe. W e make one
thorough inspection o f each plant each year. Under our system a
written order goes out to the plant covering each violation which
necessitates a physical change, such as a machine guard, etc. A copy
o f that order, o f course, goes to the inspectors as well as the super
visor’s office. The inspector goes back to the plant as many times
as is necessary to secure compliance with those orders. I f some other
type o f violation is found, such as child labor, hours o f labor, etc.,
those things for which prosecution is required, other visits, o f course,
are made from time to time because o f those violations. So the
way it works out is that the plant that is in compliance with the
law and code (in other words, the plant that is cooperating) is in
spected once a year. The other plant which does not comply, which
is not prompt in compliance with orders, in which violations are found
requiring prosecution or other action, may be visited from 6 to perhaps
15 or 20 times a year. Many o f them are.
14 8
LABOR LAWS AND THEIR ADMINISTRATION, 1 9 4 0
T o answer the question specifically, we use an index card system
with tw o duplicate cards, one o f which is in the possession o f the
inspector and sent in with his inspection card, and the other in
the supervisor’s office, to which the record o f each inspection is
transferred, so that the supervisor has at all times in the file in
his possession a card fo r each factory which has been inspected
during the current year and in an adjoining file cards fo r those
not inspected. He knows just what is going on.
The question also referred to the use o f compensation records with
respect to accident and health hazards. A s I have indicated, we do
not use compensation records along the line o f coverage. W e do
use the accident reports which come through the division o f work
men’s compensation as a guide to the inspector, and those which
represent machine accidents or accidents o f such a character as to
indicate a physical condition which can be changed or an industrial
health hazard which can be corrected, are immediately sent to the
inspector fo r his inform ation and investigation. W e have recently
started sending to all inspectors periodically a brief summary o f
those accident investigations which have been made over the period
covered. That is so inspector A may know what has happened
in inspector B ’s plant and learn from it the thing fo r which he may
have failed to watch in his own plant.
Mr. Falasz spoke o f a division o f industrial hygiene. W e have
had such a division for 25 years in New York. I do not know
how we would inspect factories without it. It is o f inestimable
value to us in our work and it certainly is o f very much greater
value to industry as a whole.
Mr. I m m e l (Pennsylvania). I find it very interesting to follow
Mr. Daniels on this program. The State which he represents applies
civil service to appointment o f factory inspectors. The State which
I represent does not.
About 10 or 11 years ago, before this same group out in Louis
ville, K y., I explained an educational program o f our bureau
whereby we contemplated and carried out a year-long industrial
safety campaign, in the course o f which every employee who could
be reached signed a pledge card to do what he could to prevent
accidents during that year. W e had theaters, newspapers, and every
possible agency cooperating in that campaign. I was scolded by
Mr. Daniels’ predecessor, who said that our job was enforcement
and that we had no business monkeying with education. So per
haps we have been backward in one respect, but not so backward
in another.
However, I do want to say quite definitely, from an experience o f a
good many years in direction o f State factory inspection, that there
FACTORY INSPECTION AND SAFETY
14 9
certainly should be a merit system established fo r the technical per
sonnel and fo r the rank and file o f inspection personnel. There is ab
solutely nothing to be said in defense o f a patronage system in this
service, and I say this to industrialists and others who criticize changes
o f inspectors and introduction o f new people into their plants, who,
they sometimes complain, are not fully trained and perhaps do not
know the individual plant problems as well as men o f experience. I
tell them the matter is in their hands i f they want a merit system in
Pennsylvania; and I hope before this administration is through we
will have it. Our present secretary o f labor is definitely in favor
o f it.
Concerning training o f factory inspectors, it should be interesting to
consider how we cope with the problem o f the turn-over we have under
a patronage system. F or a good many years in Pennsylvania we had
Republican administrations follow each other with not much change
o f personnel. A s a result, even without a merit system we had many
men who, through years o f experience and training, were as compe
tent as anybody you could produce under any civil-service system.
Those men, when a Democratic administration came into Pennsyl
vania 6 years ago, were thrown out and an almost entirely new force
put in. When the Republicans came back about 2 years ago, most
o f the Democratic appointees were thrown out and again an almost
completely new force o f inspectors was put in. My problem o f train
ing that new force was, o f course, a difficult one, but we had a certain
nucleus o f inspectors who were continued in the service and we were
able to bring back quite a few o f those men who had previously been
with us and who had up to 15 or more years o f experience. W e were
very careful in selecting new personnel to see that they had the proper
background. W e made a few mistakes, but our administration went
right along with us in seeing that those men were not retained. W e
have had some dismissals because o f men not being competent. Today
I think we have a force in the making that will be quite creditable to
Pennsylvania.
W hen we bring new men in we try to teach them, first o f all, our laws
and regulations. Pennsylvania also has laws that provide that an
industrial board shall develop regulations to carry out details o f
what is covered in a broad way by the law. Our new men in Pennsyl
vania are put in with trained inspectors and stay with them until we
feel they are competent to go out by themselves in the field. W e have
meetings at least once a month o f the inspectors in our seven supervi
sory districts throughout the State. Meetings are usually in charge
o f the supervisor o f inspectors o f that district. Experts from the
central office in Harrisburg assist in conducting these meetings. P ro
grams are prepared. These meetings take up specific questions. W e
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LABOR LAWS AND THEIR ADMINISTRATION, 1 9 4 0
often have written examinations in connection with these meetings.
One or twice a year we have, at Harrisburg, a meeting o f all o f our
inspectors, at which time we try to have speakers who can promote
their education.
I am in entire sympathy with this Federal effort to promote the train
ing o f factory inspectors. I hope eventually to get it adapted to our
force. I feel that the first step is to teach our men the rudiments o f
the work and have them thoroughly learn our procedure, and then
polishing off is fine. I am all fo r that.
I should like to say something about our method o f reporting by
inspectors. W e have a daily report form that every inspector must
fill out, indicating time, expenses, places visited, etc. W e have sep
arate types o f inspection reports fo r the separate types o f inspections
performed. The information obtained from each inspection is trans
mitted, in the case o f building inspections, fo r example, to a building
inspection report. W e have a separate report fo r theater inspec
tions because o f the extreme importance o f having all the details
o f safety given attention where the public assembles for amusement
or entertainment. W e have factory inspection reports. Those re
ports are made out daily, but they are transmitted weekly to our
central office records, an effort being made to have inspectors spend
Saturday morning making up reports. A t the end o f the month
(with a 4-day lim it) all reports must be in so that we may be able
to make a report for the month to the secretary. Our use o f reports
is greatly facilitated by a visible index system. In each district office,
by a glance at that index file, the inspector or supervisor is able to
ascertain just when the last inspection was made and observe the
complete history o f that plant as maintained in the file.
W e use the reports o f accidents made to our bureau o f workmen’s
compensation, but we have developed in Pennsylvania this year what
I think is a distinct advance in undertaking to determine the trend
o f accidents, and to help intelligently the employer to do something
about them. W ith the cooperation o f the Federal Department o f
Labor we are soliciting accident reports from 30,000 employers in
Pennsylvania, beginning this year, and to be continued annually.
W e got in return this year more than 12,000 reports giving us the
accident records o f each concern fo r 1938 and 1939 on a man-hour
basis and in such a manner that we can get the comparable picture.
W e can determine accurately, with that big cross-section o f our
industries, whether we are gaining or losing ground in accident con
trol. I Imow o f no other method by which you can tell this. The
inform ation is transferred to a card which goes out to the super
vising office, and every inspector, when he goes to a plant which has
submitted a report, can sit down and discuss the situation intel-
FACTORY INSPECTION AND SAFETY
151
ligently. P rior to this time we had similar reports, but they were
made out from compensation accident reports and did not provide
exposure data.
I feel that the old block system o f inspection must be discarded.
A s far as we are concerned, it has been discarded. It is not possible
to make an inspection in every plant in the district periodically.
W e do not have a large enough force, nor has any department. I
find the most effective plan is to concentrate attention on concerns
whose accident records indicate they most need help.
Mr. M iler (W isconsin). M y contribution to this discussion will be
an explanation o f our methods. I have learned much from the dis
cussion o f the experience o f others here, but shall attempt to answer
the questions asked by Mr. Lubin. The question asked was, W hat
program has been worked out with respect to cooperation between your
agency and other State and Federal agencies ?
Our commission has; the power to make rules. Mr. Falasz men
tioned that subject in his report. Our safety and sanitation division,
which is our factory inspection division, has no particular working
agreement with the Federal agency. However, our departments gladly
cooperate whenever requested to do so and relationships are very satis
factory. Mr. Falasz spoke o f the safety committee appointed by the
Secretary o f Labor. W e have cooperated with that committee.
Our factory inspection division has an understanding with that
division o f the industrial commission which administers the law gov
erning women and children’s hours o f labor and wages. The woman
deputies o f the child labor department, in making their inspections,
examine into the sanitary conditions o f the factories which they are
visiting. They check on the number o f toilets, washing facilities,
first aid, and rest rooms, as well as on the number o f employees. Copies
o f their reports go to the factory inspection division. That division
finds those reports useful, in that the efforts o f the inspectors can be
more intelligently directed.
In the Wisconsin Industrial Commission, the child labor and indus
trial home work regulations are administered by the same division and
by the same deputies that enforce the law as to women and children’s
hours o f labor and wages.
In reporting violations, our factory inspectors use a form which,
in effect, is an order. Such an order is issued in triplicate; one goes to
the employer, one goes to the department, and the third is filed in
the records o f the division. A full explanation o f faulty conditions,
as well as the remedy, are contained in this order. There is always
a follow -up on every order to see i f there is compliance.
In Wisconsin, we have a statute requiring cooperation between State
departments. Under this statute, an agreement exists between the in-
15 2
LABOR LAWS AND THEIR ADMINISTRATION,
1940
dustrial commission and the State board o f health covering the in
spection o f hotels and restaurants. Under that agreement, com
pliance with the building code and safety and sanitation orders can
be more easily checked. The inspection is made by the board o f health,
and a copy o f the inspector’s report is sent to the industrial commis
sion’s factory inspection division. This avoids duplication o f effort
and at the same time makes fo r more efficient factory inspections.
Incidentally, our factory inspection records are always available to the
board o f health.
Close connection and cooperation are maintained between the fa c
tory inspection department and the industrial hygiene unit o f the
State board o f health. Whenever a factory inspector finds what he
considers a hazardous condition, such as may be brought about by dust
or harmful gases and fumes, he makes a note o f this on the report
which he sends to his superior. The industrial hygiene unit is then
requested to make an analysis o f the conditions reported. This sys
tem has a tw ofold advantage: First, these reports are admitted as evi
dence in workmen’s compensation cases in connection with the statute
requiring employers to provide a safe place o f employment; second,
the reports have a tendency to restrain factory inspectors from issuing
orders merely because they are suspicious that a hazard exists. The
system avoids guesswork.
There is a good reason why the industrial hygiene unit operates
under the industrial commission rather than under the State board
o f health. The reason is that the department under the board o f
health has no enforcing powers. Its representatives can only make
reports and recommendations. The industrial commission, on the
other hand, can use these reports effectually and enforce the regulations.
Under the statute designed to encourage cooperation between State
departments, the industrial commission has an agreement with the
department o f public instruction. The inspectors o f that department
inspect schoolhouses fo r the purpose o f fire prevention, safety-code
regulations, and sanitary health standards. The reports o f these in
spectors are available to our factory inspection department. Our
safety department makes inspections o f schoolhouses only on request,
and then copies o f the inspectors’ reports are filed with both our de
partment and that o f public instruction. I t might be added that our
inspectors check manual training departments in the schools fo r the
purpose o f seeing that machines are properly guarded.
Our factory inspection department has made inspections fo r Fed
eral authorities under the Walsh-Healey Act. It is true that not
many have been made lately, inasmuch as factory conditions are
such that in most cases a special inspection is not needed. A s to our
connection with the Public Contracts Division, our employment service
FACTORY INSPECTION AND SAFETY
153
uses the reports on contracts awarded in contacting employers for
placement o f needed labor. The reports o f the Public Contracts
Division are useful also to the head o f our factory inspection division
in that he may compare such records with the records in his file.
I have been asked to say something concerning the follow ing ques
tions : W hat methods do we use fo r insuring the most effective inspec
tion coverage o f plants ? Is our goal an annual inspection o f every
plant ? Is any leeway allowed in the case o f plants with a good safety
record in order that inspectors might concentrate on those with bad
records? In the case o f safety and health inspections, what use is
made o f compensation records?
W e use a form which is quite similar to the one described in the
United States Department o f Labor’s inspection manual which, by the
way, our chief engineer, Mr. Keown, helped to promulgate. This
form calls to the attention o f the inspector all phases o f what con
stitutes a complete inspection, and at the same time it requires the
inspector to file a more detailed report. It also enables the head o f
the department to check on such matters as the number o f employees,
dressing-room facilities, accident frequency, and other matters in
which he is interested.
A n annual inspection o f every factory is the goal o f our inspection
division. However, this aim is not always possible, considering the
limited number o f inspectors available to us. I t is o f interest to note
that those o f our employers who have the best safety records are the
ones who demand an annual inspection. They rely on our inspections
to keep their accident frequency* down. Such employers welcome
visits by our inspectors, and depend on our men to act in the capacity
o f advisers on all matters pertaining to safety.
W e constantly use our compensation records in connection with
safety inspection. A ll accident reports are promptly sent from the
compensation department to the safety division, and carefully exam
ined by the head o f that department. I f an accident looks as though
it might have been prevented, an inspector is immediately dispatched
to make an investigation. Naturally, all fatal accidents are investi
gated. The itinerary o f our inspectors is governed largely by the
reports received from our compensation department. Investigations
are always advisable in order to enforce the penalty clause in our
workmen’s compensation act and our safety orders.
Our factory inspection department uses a form similar to the one
in the inspection manual when investigating new machines which
are sold without the proper guards. This procedure has brought
about extremely satisfactory results. Many manufacturers o f ma
chines confer with our safety division in the matter o f properly
15 4
LABOR LAWS AND THEIR ADMINISTRATION,
19 4 0
guarding new machines ; thus their machines are delivered com
pletely equipped with approved guards.
Our inspectors are provided with compensation division accident
reports and photostatic copies o f the accident record o f employers
covering a 2-year period. Arm ed with that information, the inspec
tor is in a position intelligently to discuss with the management the
best means o f applying remedies and in preventing accidents. These
records give the number o f the case, the date o f the accident, the name
o f the employee, the department, the particular operation, the cause o f
the injury, the nature o f the injury, the cost o f medical aid, and the
compensation paid. G ood results are bound to occur when the in
spector analyzes these reports in conference with the management.
I recall one particular case in which the inspector, upon explaining
and analyzing the report, demonstrated that this particular em
ployer’s 2-year accident record involved largely eye injuries. In the
past, this employer had made some attempts to correct eye hazards,
but when he saw the inspector’s report he thereafter fu lly complied
with all our recommendations. This company has now the most
complete eye protection o f any industry in the State, and its injury
record has decreased proportionally.
Mr. C a m e r o n (W ashington, D. C .). I was very much interested
in Mr. Falasz’s request that you as labor commissioners and rep
resentatives o f the States support and cooperate with the Secretary
o f Labor’s National Committee fo r the Conservation o f Manpower in
Defense Industries.
Late in June, when the national defense program was getting
under way, it was pointed out in W ashington by the new National
Defense A dvisory Commission that our process o f production must
be an orderly one, that we cannot have hysteria and confusion which
w ill result in delayed production, interrupted work schedules, and
a retardation o f the whole defense program. One small phase o f
that orderly production is safe production.
Even in normal times We kill in American industries about 16,000
workers annually, many o f them skilled and trained workers. Millions
o f dollars are being spent fo r the training o f workers. It is felt that
we must also create an activity to protect the training and skill o f
workers already on the job.
The Secretary o f Labor has had fo r a number o f years an advisory
committee on safety and health, made up o f representatives o f labor,
o f the organized safety movement, o f the organized industrial health
movement, and o f the States. That group was expanded to a com
mittee o f 24 which met on June 21 to consider plans fo r increasing
safety activities in the United States to safeguard the production in
the emergency— in our national defense.
FACTORY INSPECTION AND SAFETY
15 5
Based upon the duties and obligations o f the Secretary under the
W alsh-Healey A ct, it was felt that close cooperation should be
effected in bringing to industries under the Public Contracts D iv i
sion a specialized, technical safety service. Now it is realized that
the States are the first line o f defense in safety.
In a recent analysis o f 1,000 typical accidents and injuries causing
disability or death, it was found that 20 percent o f the accidents
were due wholly to faulty environmental conditions; another 20 per
cent were due w holly to careless acts, failure o f the worker to obey
rules, failure o f supervision properly to train and instruct man in
hazards o f job— not to mechanical hazards but to personal faults;
and 60 percent were a combination o f both causes. This brings us to
the point that 80 percent o f the accidents in this country can be
prevented by the elimination o f mechanical hazards and unsafe en
vironmental working conditions.
That is the States5 job through basic safety legislation, through the
rule-making power, through the adoption o f codes, rules, and reg
ulations. It is the States5 job to see that working conditions are
safe. However, to handle the known 20 percent that were due
purely to lack o f instruction and lack o f education o f workers and
the one-half o f the remaining 60 percent o f accidents which might
have been prevented had either the place been made safe or the
worker instructed, the concept o f this present activity which is still
in formative stages is to bring to industries acting on Government
contracts safety promotional and organizational services which are
beyond the scope o f most State labor departments.
Setting up this national committee, the Secretary has appointed
eight regional representatives. A ll are prominent safety technicians,
several from private industry. The growth o f the safety movement
in this country, as you know, started as a voluntary movement.
Under pressure o f workmen’s compensation, industry undertook to
clean house and to prevent accidents. The enlightened segments o f
industry have done a good job. They have carried on safety educa
tional campaigns within their industries, and it is from the progres
sive manufacturers, the best men in this country, that the Secretary is
drawing safety promoters, advisers, and safety engineers to carry
on a safety consultant service to industries, particularly the smaller
units, working on national defense products.
In carrying out their work, these special agents of the Department
o f Labor, serving wholly on a voluntary basis, will clear with State
labor departments and industrial commissions before actually getting
into plants. In each State where there is an industrial center, such
as Connecticut, there will be set up a State advisory committee, con
sisting o f the industry representative on the national committee, the
313421°—41----- 11
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LABOR LAWS AND THEIR ADMINISTRATION, 1 9 4 0
labor commissioner or his representative, and representative or repre
sentatives o f organized labor. There may be some special cases where
health officials will be brought in and in some cases engineers from
insurance companies will be brought in, to that advisory committee.
Before a single plant is contacted all matters will be cleared with
and through these State advisory committees.
I have with me a limited supply o f circulars covering the organiza
tion and operation o f the National Committee for Conservation o f
Manpower in Defense Industries, and a limited supply o f the com
mittee’s first bulletin entitled Safeguarding Manpower for Greater
Production. Both o f those will be interesting to you. There are more
copies available in Washington and I shall be very glad to supply
any or all o f you with extra copies.
Y ou m ight be interested to know the personnel o f the national
committee. I think it is indicative o f the kind o f job that is going
to be done when you realize the caliber o f the men who are serving.
Cyril Ainsworth, assistant secretary, American Standards Association, New
York, N. Y.
W . H. Cameron, managing director, National Safety Council, Chicago, 111.
John P. Coyne, president, Building and Construction Trades Department, Ameri
can Federation of Labor, Washington, D. C.
It. E. Donovan, chief safety engineer, Standard Oil Company of California, San
Francisco, Calif.
John P. Frey, president, Metal Trades Department, American Federation of
Labor, Washington, D. C.
Clinton S. Golden, director, northeastern region, Steel Workers Organizing Com
mittee, Pittsburgh, Pa.
Harry Guilbert, director, Bureau of Safety and Compensation, The Pullman Co.,
Chicago, 111.
Ralph Hetzel, research director, Cbngress of Industrial Organizations, W ash
ington, D. C.
Thomas P. Kearns, superintendent, Division of Safety and Hygiene, Industrial
Commission, Columbus, Ohio.
Lewis E. MacBrayne, general manager, Massachusetts Safety Council, Boston,
Mass.
Charles A. Miller, assistant to manager, The Texas Co., Houston, Tex.
Herbert W . Payne, Textile Workers Union of America, New York, N. Y.
Eric Peterson, general vice president, International Association of Machinists,
New York, N. Y.
John D. Petree, director, Alabama Department of Industrial Relations, Mont
gomery, Ala.
E. G. Quesnel, director of safety, The Bordon Co., New York, N. Y.
R. R. Sayers, M. D., director, Bureau of Mines, United States Department of the
Interior, Washington, D. C.
Carl L. Smith, managing director, Cleveland Safety Council, Cleveland, Ohio.
L. Metcalfe Walling, director, Public Contracts Division, United States Depart
ment of Labor, Washington, D. C.
W . B. Weaver, manufacturing division, Marshall Field & Co., Spray, N. C.
Albert W . Whitney, consulting director, The National Conservation Bureau,
New York, N. Y.
FACTORY INSPECTION AND SAFETY
15 7
W . H. Winans, director, industrial relations department, Union Carbide Co.,
New York, N. Y.
Y. A . Zimmer, director, Division of Labor Standards, United States Department
of Labor, Washington, D. C.
A news release has just come from Canada which I think is a fore
cast o f what we may expect in this country under our national defense
program i f the States, organized labor, organized safety as it is rep
resented through industry in the safety movement, do not get together
and effect some means o f carrying out accident prevention. It is en
titled “ Speeding up o f Industry” :
The number of accidents reported to the Workmen’s Compensation Board of
Ontario for July was 7,902, compared with 5,242 during July 1989. This marked
increase is attributed to the following causes resulting from the speeding up of
industry: (1) New employees; (2) lack of proper instruction concerning work
to which men were unaccustomed either on new or existing machines; (3) in
creased pressure of work on those already employed; (4) lack of adequate
supervision.
It is up to us in this country to avoid a similar skyrocketing o f
industrial casualties.
M ach inery Safety R equirem ents
R e p o r t o f C o m m it t e e o n M a c h in e r y S a f e t y R e q u ir e m e n ts , b y R o l a n d P . B l a k e
(U . S . D iv is io n o f L a b o r S t a n d a r d s ) ,
C h a irm a n
I. The committee has, since its formation, been chiefly engaged in
studying conditions, developing a plan o f action, and making arrange
ments necessarily preliminary to the regional activities contemplated
under the plan.
II. A s envisaged to date, the purpose o f the committee is to (a)
analyze various State codes and their approval and inspection stand
ards to discover conflicts and secure their elimination; (6) develop
uniform requirements in sufficient detail to serve as a guide in the
development o f detailed specifications for use in the design, manu
facture, and approval o f safeguards; (<?) develop uniform and ade
quate inspection standards.
II I. It is intended to accomplish this through subcommittees rep
resenting States geographically grouped to facilitate committee meet
ings. Members o f the main committee act as chairmen o f the
subcommittees in order to secure coordination and the necessary in
terchange o f information. The organization o f the subcommittees
is well under way and active detailed work should go forward without
further delay.
D u ring the past several months assurances o f willingness to coop
erate in this program have been forthcom ing so generously from the
various State agencies concerned that it is not anticipated that any
difficulties will arise in this respect. The chief problem faced is the
158
LABOR LAWS AND THEIR ADMINISTRATION,
19 40
fact that all the officials concerned are already heavily loaded with
work. However, encouraging progress has already been made, and
steady, continued effort should be possible. The Pacific Coast States
had (independently o f this committee) already made quite an ex
tensive study o f their safety codes and regulations, and this material
is available. Your committee will cooperate with this group in
whatever way is mutually agreeable.
IV .
Mr. Cyril Ainsworth, associate secretary o f the American
Standards Association, recently made an extensive trip through
the western half o f the country as a representative o f the Division
o f Labor Standards and the American Standards Association, jointly.
A major purpose o f the trip was to promote the adoption o f A . S. A .
safety codes by the respective States, in the interest o f uniformity, as
being a vital part o f the program o f this committee.
Y . Y ou r committee is working closely with the committee o f the
American Society o f Safety Engineers on Building Safe Machinery.
The appended informational report, entitled “ Built-in Machine Safe
guarding,” was prepared to present a brief picture o f the situation
insofar as the work o f the two committees to date enables its
presentation.
B u ilt-in . M a c h in e r y Safegu ardin g
{ A n in fo rm a tio n a l r e p o r t o f e x is tin g c o n d itio n s )
I. The American Society o f Safety Engineers, operating as the
Engineering Section o f National Safety Council, maintains a com
mittee charged with the duty o f promoting the complete safeguard
ing o f machinery in the process o f its manufacture. W hile this
committee finds that much progress has been made, it also finds that
much more remains to be done. This is particularly true o f the
common wookworking and metal-working machinery. In the main
these machines are guarded only by the user; largely afterthought
guarding— after someone has been hurt or after a State or insurance
inspector finds them unsafe. The seriousness o f this condition be
comes clear when it is realized that compensation statistics from
leading industrial States reveal a very heavy toll o f permanent dis
abilities continuously flowing from the operation o f these point-ofoperation machines. Particularly significant is the fact that the
typical cause fo r such accidents is either “ unsatisfactory guard,”
or “ lack o f guard.” The committee reached the conclusion that not
much improvement in this condition is to be expected unless—
(a) The present general practice with point-of-operation machines
can be changed from afterthought guarding to the complete guarding
o f each and every machine as a part o f its design and manufacture.
This applies particularly to certain machines, an outstanding ex-
FACTORY INSPECTION AND SAFETY
159
ample o f which is the common circular table saw which cannot be
satisfactorily guarded unless the guarding is provided fo r in the
design;
(b)
A nd unless the safeguarding o f these machines is taken much
more seriously by their manufacturers, by the employers who pur
chase and put them into use, and by the inspection agencies charged
with the duty o f preventing worker injury.
II. The difficulties in the way o f correction are seen to be chiefly—
{a) Lack o f consumer demand fo r fu lly safeguarded machines.
Many purchasers do not specify safety in their orders, but the pro
portion o f those who do so is not as yet great enough to stimulate
machine manufacturers generally to pay adequate attention to user
safety. The machine manufacturer who safeguards hi^ products
should have a sales advantage thereby, instead of having to compete
with models lower priced because unguarded.
(6 )
Conflicting State requirements. W hile many States follow
American Standards Association codes fairly closely, many do not,
and some serious conflicts exist.
(<?) Indefiniteness o f State requirements. Few are definite enough
to be o f much value. F or instance, the Massachusetts code on safe
guarding circular rip saws says simply that each “ should be guarded
by (a) a spreader located at the rear o f the saw, (b) a guard over the
saw, (<?) a guard under the table.”
( d ) Variation in acceptance standards and practices. This is an
exceedingly serious situation. I t includes both the work o f the
agencies which issue lists o f approved devices (only a few States
have these) and the standards the inspection services o f the various
States use as a guide in their orders and recommendations. A very
few States issue fairly definite written instruction manuals to their
inspectors; most do not, so that a machine or guard accepted in one
State may require changing in a neighboring State. In some cases
this is reported to have occurred in different districts o f the same State.
( e ) The lack o f specifications to guide the manufacturers o f the
various machines in producing satisfactorily guarded models. It
should be obvious that i f a manufacturer is to offer for sale a fully
safeguarded machine, he must have quite detailed specifications to
guide him, and he must have assurance that i f these are faithfully
complied with, his product will meet with practically universal
acceptance.
II I . The chairman o f the A. S. S. E. committee presented the situa
tion to the International Association o f Governmental Labor Officials
at its conference at Tulsa, Okla., September 7-9, 1939. This confer
ence appointed a committee entitled “ The Committee on Machinery
Safety Requirements.” Its duty is to develop and prosecute a pro-
160
LABOR LAWS AND THEIR ADMINISTRATION, 1940
gram looking to the correction of the above conditions insofar as the
State labor administrative agencies can do so. Its program as devel
oped to date envisages (a) analysis of the various State codes and of
their approval and inspection standards, to discover conflicts and se
cure their elimination; (&) the development of uniform requirements
in sufficient detail to serve as a guide in the development of detailed
specifications for use in the design, manufacture, and approval of safe
guards; (o) the development of uniform and adequate inspection
standards.
IV . The analysis, comparison, and development of State codes and
inspection standards is being initiated and is to be carried on through
subcommittees representing the New England States, the Middle
Atlantic, the Middle Western, the South, the Kocky Mountain, and
the Far West.
V. The development of specifications will obviously require close
cooperation between State governmental authorities and manufac
turers of machinery and safety equipment and will require the serv
ices of competent technicians. Since all the interests concerned
have representation in the A. S. A. and membership on its sectional
committees, and since a major purpose and activity of the A. S. A. is
the drafting of national codes on safety (these have gained a wide
measure of acceptance by the States, the Federal Government, and
industrial employers generally) it became clear that if possible the
needed specifications should be developed through A. S. A. There
fore, the A. S. S. E. committee formally requested A. S. A. to under
take the work. In response to this request the Safety Code Corre
lating Committee of A. S. A. passed the following resolutions:
R e s o l v e d , That it is the opinion of the Safety Code Correlating Committee
that safety codes, in addition to containing requirements for the installation
and use of guards and safety equipment, should also include detailed specifi
cations for such guards and equipment, to be used by ( a ) manufacturers in
designing such devices; (&) governmental agencies, laboratories, etc., in grant
ing approvals; and (c) industry in purchasing devices.
R e s o l v e d , That all safety code sectional committees be instructed to include
specifications for guards and safety equipment whenever codes under develop
ment or under revision are to contain requirements for the installation and use
of such guards or safety devices.
V I. The resolutions were approved by the Standards Council of
A. S. A. and instructions to this end have been issued to the various
sectional committees charged with the drafting or revision of safety
codes.
V II. In addition to the development and general acceptance of
adequate safety codes and guarding specifications an agency of ap
proval will be necessary. Underwriters Laboratories is the nation
ally accepted agency maintained by the National Board of Fire
FACTORY INSPECTION AND SAFETY
161
Underwriters to test and measure the effectiveness o f devices and
products in the field of fire prevention and protection. They main
tain a label service for approved products. They are considering
offering a similar service in the safety field. Meetings o f an explor
atory nature have been held by Underwriters Laboratories with
manufacturers of safety devices and with compensation insurance
interests. No definite decisions have been announced, but the follow
ing conclusions appear to be warranted:
{a) The Underwriters Laboratories should by virtue of experience
and attainments be well qualified to function as the approval agency
in the safety field also.
(b) The response from the representatives of safety equipment
indicated a promising attitude of willingness to submit their products
to Underwriters Laboratories for examination and test.
( c) Insurance representatives attending were strongly favorable
to the labeling of safety equipment and will undoubtedly promote
the general acceptance of labeled products.
V III. In conclusion, it appears reasonable to predict that good
progress can be made, if—
(a) All the interests involved will cooperate with a reasonable
degree of vigor in prosecuting the program; and particularly if
(b) Those primarily concerned with the reduction of the nationally
serious toll of industrial accidents will actively and consistently pro
mote the principles of adequate safeguarding of all machinery and
equipment as a matter of forethought instead of afterthought.
IX . The agencies whose effective prosecution of this work is most
vital to success are seen to be—
(a) State labor administrative agencies. Since the conflicts and
inadequacies of safety requirements constitute a major obstacle, im
provement of this condition can be had only through their active
prosecution of a corrective program.
(b) State factory inspection agencies. Charged with the duty of
enforcing requirements in the interest of worker safety, they are in
the best possible position to promote the idea and practice of fore
thought safeguarding. A few State inspection departments are ac
tively doing this, and report good progress, but unless its prosecution
is made a major purpose throughout the Nation generally, satisfac
tory progress is not to be expected.
( c ) Safety councils, through their manifold promotional activities.
(d ) Insurance underwriters, primarily through the promotional
effort their inspection forces carry on.
(<e ) Employer associations, through their conventions, their trade
journals, and through committee work.
( /) American Standards Association.
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LABOR LAWS AND THEIR ADMINISTRATION, 1940
X.
Appended hereto is a tentative set of requirements for the
safeguarding of a manual feed circular rip saw, which was compiled
by the chairman of the A. S. S. E. committee from the suggestions
of the various members of that committee. These requirements have
not been formally acted upon by that comittee, but are presented
here for consideration. Suggestions for their improvement are so
licited. Comments should be addressed to the chairman.
S a f e t y S p e c if ic a t io n s — C ir c u l a r R i p S a w s
T h e s a w m a c h in e
1. Table.— Height not less than 34 nor more than 36 inches.
2. Frame.— Substantially constructed to be free from sensible vibration when
largest saw for which it is designed is run idle at full speed.
3. Arbor or mandrel.— Fit and design such as to have firm and secure bearing
and be free from end play.
4. Arbor lock.— Must have means of locking arbor securely in fixed position
when changing saw.
5. Mandrel collar.— Must have positive means of centering saws (and holding
saw securely) in which the hole in the saw is too large to fit mandrel.
6. Limit of saw size.— Must have positive fixed means (as by lugs cast on the
frame) of limiting size of saw than can be mounted so as to avoid overspeed
due to mounting saw larger than intended.
7. Gage position on tilting tables, tilting arbors.— Gage (for ripping) must
remain parallel with the saw regardless of angle of saw with saw table.
8. Gage construction.— Must be such that it can be positively secured to the
table without changing its alinement with the saw.
9. Hinged table.— Must be so constructed that it can be positively secured in
any position and in true alinement with the saw.
10. Gage should slide in grooves accurately machined to insure exact aline
ment with the saw for all positions of the guide.
11. Transmission guards.— Full enclosure of moving parts (if any) on machine
frame and enclosure or provision for enclosure of drive belt.
The
sa w
H ood
12. Enclosure.— Complete enclosure of saw above table when saw not in use
and above material being cut when saw in use.
13. Self-adjusting.— Must automatically adjust self to thickness of and remain
in contact with material being cut. All hoods shall have a kick-back dog
attached to rear of hood that will have equal and adequate holding power for all
thicknesses of material being cut.
14. Ease of operation.— Must not offer any considerable resistance to insertion
of material to saw or of passage of material being sawed.
15. Attachment.— Such as to insure its functioning to be positive and reliable
and adequate in strength to resist any reasonable side thrust or other forces
tending to throw it out of position.
16. Strength.—Adequate to resist blows and strains incidental to reasonable
operation, adjusting, and handling.
17. Size relationship to saw.— To be definitely indicated and provided for.
18. Ease of attachment.— Such that correct position is as easy to secure as
possible, and incorrect position difficult or not possible.
F A C T O R Y I N S PECTION A N D
SAFETY
163
19. Material.— Soft enough to be unlikely to cause tooth breakage. Should
not shatter.
20. Intereference with vision.— Must allow line of cut to be seen by operator
in proper position to feed saw.
S p r ea d er
21. Thickness.— Less than saw kerf, greater than saw stock.
22. Stiffness and rigidity.—Adequate to resist any reasonable side thrust or
blows tending to bend or throw out of position. (Should give definite value
for minimum stiffness.)
23. Position.— Less than 1/ 2 " from end of saw teeth, in line with saw.
24. Means of securing.— Such as to foster correct location.
25. Adjustable to size of saw.— Removable and readily replaceable correctly.
26. Shape.— Curved approximately to contour of saw.
27. On tables arranged for angle sawing spreader should be so mounted so
that it will always maintain same relation with saw.
P a r t o f sa w u n d e r ta ble
Must give complete protection against accidental contact with saw. Suggested
a stiff sheet disk or its equivalent on each side of saw, spaced 1 " from saw and
extending 1 " beyond largest saw that can be used on saw mounting, or a hood
designed to facilitate exhaust attachment.
Women in Industry
Women in Industry, September 1939 to September 1940
R e p o r t o f C o m m it t e e on W o m e n in I n d u s t r y , b y M a r y A nd erso n ( U n ited S ta te s
D e p a r tm e n t o f L a b o r ) , C h a irm a n
The most important development in the past year was the launch
ing of the preparedness program, in which women must play such
an important part. Designed to assure and to speed up production
in certain fields, this program as it relates to women involves the
training and the adequate protection of woman operatives called
to work in defense industries. Though the undertaking is only a
few months old, much has been done along these lines. High spots
include:
1. The setting up of an advisory committee to the Women’s Bureau
of representatives of international unions that have active women
members who are in the key defense industries, to recommend how
women can best function in the emergency.
2. Two meetings of this committee with members of the Women’s
Bureau in Washington.
3. Making available material on the experiences during the World
War of 1914-18 in securing increased output without sacrificing
the efficiency and health of woman workers.
4. A report on the general types of work in the program of ex
panded production for which women are best fitted, on the need for
special training, and on employment standards conducive to their
welfare and most efficient production.
It is estimated conservatively that not far from 2 million women
are immediately available to fit into defense work. Probably at least
half a million more are now in part-time employment, and an addi
tional large but undetermined number can fill jobs more skilled than
those in which they are now engaged.
F o rc e s a n d E v e n ts th a t a re B e tt e r in g C o n d itio n s o f W o m e n ’ s W o r k
In addition to the emphasis on national defense, conditions under
which women are at work have been improved. Some of the most
outstanding gains made are these:
I n the -field o f Federal control or aid.
1. An estimated 4,000,000 women are covered by the Fair Labor
Standards Act, which prescribes with certain exceptions 30 cents
164
WOMEN IN INDUSTRY
165
an hour for a 42-hour workweek, with time and a half for overtime.
Women’s Bureau information on wage trends in the more important
woman-employing industries shows definite gains in women’s hourly
earnings. Many women have had their wages raised further by the
higher minimums set for the hosiery, textile, millinery, shoe, knitted
underwear and commercial knitting, woolen, hat, knitted outerwear,
apparel, and pulp and primary paper industries.
2. From July 1939, to June 30, 1940, approximately 31,000 man
and woman workers were reinstated by the National Labor Relations
Board after strikes and lock-outs and some 4,000 after discriminatory
discharges. About 2,500 workers received back pay amounting to
around $400,000.
3. Minimum-wage rates have been set for workers employed on
Government contracts of $10,000 or over in paper and pulp, smallarms ammunition, explosives and related products, fertilizer, and
cement industries. These rates undoubtedly have raised the wages
of many woman workers in all but the last two mentioned industries,
in which no women are employed.
4. Intensive studies have been made in certain fields which may
point the way to the betterment of employment conditions for women.
Some of the more important surveys made by the Women’s Bureau
include the following: (a) A survey of fruit and vegetable canning
(to determine the effects of State minimum-wage regulations, and
unemployment compensation, Public Contracts Act and the Federal
Fair Labor Standards Act, not in effect when the 1938 survey was
made); (b) Fish canning; (c) Women’s employment and personal
and family responsibility, in Cleveland and Salt Lake City; (d) Office
workers’ study; (e) Booth renting in colored beauty shops in the
District of Columbia; (f) Maine service industries; (g) Studies of
injuries to women, both accidents and occupational diseases, have
been continued.
5. From September 1, 1939, to June 30, 1940, almost half a billion
dollars was paid to man and woman workers as unemployment com
pensation under the provisions of the State unemployment insurance
laws, established in accordance with the Social Security Act.
6. Over. 14,000,000 women have had social security accounts estab
lished for them in which will be recorded their earnings that entitle
them and members of their families to benefits under the old-age
and survivors’ insurance system of this act.
B y the. action o f State authorities:
1. New minimum-wage orders in a number of industries and States
have raised the wages of many women.
2. Some advances have been made in Stat& legislation.
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LABOR LAWS AND THEIR ADMINISTRATION, 1940
Little legislative activity is noted this year. This is explained in
part by the fact that few of the legislatures were in regular session.
A d v a n c e s in W o m e n ’ s W ages
In March 1940 women’s hourly earnings in the major womanemploying manufacturing industries had increased 3 percent from
March 1939 figures for the same firms, according to data reported
twice a year by the Women’s Bureau. Hourly earnings had increased
in the great majority of the industries reported. These averages
were above 35 cents in all the reported industries.
During the year the 30-cent minimum required under the Fair Labor
Standards Act went into effect, and the resulting increases at the
bottom of the wage scale had an important influence in pushing up
the hourly averages. Most notable of the advances were the follow
ing : 10 percent, cotton dresses; 6 percent, cotton goods; hosiery; con
fectionery ; women’s undergarments; rubber boots and shoes; 5 percent,
silk and rayon; woolen and worsted.
Average weekly earnings in these firms were not greatly different
from those of a year ago, due to some extent to a decline of nearly 3
percent in hours worked. There were, however, decided changes in
earnings in a number of industries. In March 1940 week’s earnings
of women in these manufacturing industries averaged $15.92, with an
average of 34 hours worked in the week. Here again the wage pic
ture varies widely with the industries, some having high, others quite
low, averages.
S ta te L a b o r L e g is la t io n a n d L e g a l D e c is io n s
Appended to this report is a supplement giving certain details con
cerning State labor legislation and legal decisions. With only three
legislatures in regular session in the second half of 1939 and nine
in 1940, there was little opportunity for significant legislation. More
activity is noted on the part of the various State wage boards, with
four orders made mandatory and nine new orders issued.
Bills to limit hours of work and to extend the minimum-wage law
to household workers were introduced, but not passed, in the State
of New York. Four States considered, but failed to enact,. wage and
hour bills covering man and woman workers alike.
The effort to curtail the employment of married women in public
service has abated somewhat. Mississippi considered but failed to
pass such a measure. Louisiana passed but later repealed a law of
this type. On the other hand, though a bill to safeguard the rights
of married women was introduced in the New Jersey legislature it
failed of enactment. It is hoped that the New Jersey example of at
tempting to enact a statutory defense against this insidious type of
WOMEN IN INDUSTRY
16 7
class legislation will be followed by other State legislatures and with
more success.
W o m a n W o r k e r s ’ N e e d s C o n s id e r e d a t I n t e r n a t io n a l C o n fe r e n c e
The Second Conference of the American States Members of the In
ternational Labor Organization, held in Habana, Cuba, November 21
to December 2,1939, adopted resolutions stressing, among other things,
the need to evaluate women’s skill on the same basis as men’s and to de
velop means, such as vocational training, to improve women’s output
where it falls below men’s in quantity or quality. The Conference
recommended the abolition of industrial home work, and outlined
strict regulations to control it as long as it exists and requiring the
same minimum-wage rates as for similar work in factories.
Other resolutions called for a progressive program comprising ap
plication of social legislation to domestic and agricultural workers,
legislation to prohibit the dismissal of married woman workers be
cause of their marital status, the granting to women of all the rights
necessary to enable them to function fully as responsible citizens,
including the right to organize for collective bargaining, to have full
representation in all bodies responsible for preparing and administer
ing social and labor legislation, as well as the right to vote and hold
office.
S u m m a ry and F u tu re N eeds
In looking ahead two problems loom large:
First, the months that lie ahead will increasingly throw into relief
the role of the woman worker in defense industries. Every effort
must be made to train her for her work, place her in occupations
for which she is well qualified by reason of her natural endowments,
and safeguard her health and well-being. Those of us who have
had years of intimate contact with these problems must be prepared
to take an active part in formulating standards and policies.
Second, and of equal importance, there must be no slackening in
our struggle to secure for woman workers everywhere the benefits
of reasonable labor regulation. There are still large groups of work
ers who are without the benefits of State laws or not covered by
Federal law. Two groups in particular are agricultural workers and
household employees.
It must be kept in mind that our inner defenses— defenses against
exploitation, poverty, disease— are as important to our national exist
ence as the military preparations we are making. No stronger
weapon against aggression can be forged than the day-by-day demon
stration that the American way of living is the best designed to meet
the needs of mankind.
168
L A B O R L A W S A N D T H E I R ADMINISTRATION,
1940
S u p p le m e n t t o R e p o r t o f W o m e n in I n d u s t r y C o m m itte e
S u m m a r y of L a w s a n d M a j o r E v e n t s I m p r o v in g W o r k in g W o m e n ’ s S t a t u s ,
S e p t e m b e r 1939 to S e p t e m b e r 1940
court a c t io n
(Limited to statutes applying particularly to woman workers)
C o n n e c tic u t.— Connecticut statute prohibiting night work held constitutionally
applicable to woman entertainers in restaurants, notwithstanding their pro
fessional status. ( D o n c o u r t v. D a n a h er , Conn. Sup. Ct., June 13, 1940.)
M a s s a c h u s e tts . — Woman in charge of store of cleaning and dyeing corporation
held to be employee of corporation, notwithstanding execution of lease of store
and designation of woman as lessee. ( C o m m o n w e a lth v. W e m fi e ld ’s ( I n c .) ,
Mass. Sup. Ct., January 30, 1940.)
N e w J e r s e y . — Interpretation of R. S. 34: 2-24, so-called women’s 10-hour law.
( T o o h e y V. A b r o m o i o i t z D e p t . S t o r e ( I n c .) , New Jersey Sup. Ct., February 23,
1940.)
W a s h in g to n . — Order fixing minimum wages of operators in beauty parlors or
similar establishments held inapplicable to instructors in school for beauty
operators. (M c D o n a ld v. G o dd a rd , Wash. Sup. Ct., February 6, 1940.)
attorney
g en erals’
o p in io n s
(Limited to opinions concerning matters of particular application to woman
workers)
C ow n ecticu t. — A manicurist employed in a barber shop will not generally
be considered as within the provisions of minimum wage directory order No. 5
for beauty shops. (Attorney General’s Opinion, September 13, 1939.)
D e la w a r e . — Beauty shops come under the law fixing hour limitations for
females in any “mercantile, mechanical, or manufacturing establishments.”
(Letter of Attorney General, May 14, 1940.)
K e n t u c k y . — Apprentices who work in beauty parlors are entitled to 18 cents
an hour for 2,000 hours under apprentice certificates, at the end of which
period the certificates are canceled, such persons then being entitled to 2 2 ^
cents an hour. (Letter of Assistant Attorney General, April 9, 1940.)
l e g is l a t io n
in
the
states
W orkw eek .
Kentucky.— An act relating to employer-employee relationships and including
a provision for a 6-day week for all employees (with certain exemptions,
including all persons working not over 40 hours a week) unless time and
a half is paid on the seventh day.
C overa g e.
New York.— A law exempting from the 10 p. m.-7 a. m. night-work law
women employed by florists at Easter and Christmas.
R e g u la t io n o f h o m e w o r k .
New York.— A law requiring an employer to attach to materials for home
manufacture a label with his name and address legibly written or printed
in English.
WOMEN IN INDUSTRY
169
W a g e and h o u r bills.
Introduced into the following States, but none passed: Louisiana, New Jersey,
New York, and South Carolina.
H o u s e h o ld -w o r k e r bills .
New York.— Introduced, but not passed, bills to extend the minimum-wage
law to household employees and to limit their workweek to 60 hours.
m i n i m u m -w a g e orders
M a d e m a n d a to r y tv ith in th e y e a r .
Massachusetts.— Beauty culture, June 1, 1940.
New Jersey.— Light manufacturing, July 15, 1940.
Wearing apparel and allied occupations, July 15, 1940.
Cleaning and dyeing, May 6, 1940.
N e w o rd er s.
Colorado.— Beauty service, December 4, 1939.
Public housekeeping, June 16, 1940.
Connecticut.— Laundry, June 3, 1940.
Maine.— Packing fish and fish products in oil, mustard, and tomato sauce,
April 11, 1940.
New Hampshire.— Dry cleaning, May 20, 1940.
New York.— Restaurant, June 3, 1940.
Pennsylvania.— Laundry, June 1, 1940.
Utah.— Retail, June 3, 1940.
Restaurant, August 5, 1940.
D iscussion
Mr. L u b i n . I am wondering if there is any evidence in any of the
areas as to the effect of increasing employment and actual extension
of hours of employment upon safety experiences, accident rates, and
similar matters. In other words, as in the case of minimum wages,
is there a tendency to a higher accident rate with the pressure to in
crease the hours of employment in those areas, and is any provision
being made in the law to meet this tendency ?
Mr. M or let (Ontario). Insofar as it relates to our experience in
Ontario, frequency is definitely up. We believe that it is up partly
because of the new workers that are now employed, men who perhaps
never worked before or men who have been out of employment and
who have lost a certain amount of skill or who were perhaps under
nourished because of being on relief.
Further, we think it is up because of the pressure that naturally
is put on the men or women to get out production for war purposes,
and we think it is up also because certain work is being done on
Sunday. We have had sufficient experience already in Ontario to
know that the old Mosaic law still holds. We have found large
plants that had worked a certain number of hours on Sunday but
170
LABOR LAWS AND THEIR ADMINISTRATION,
1940
when Sunday work was dropped they had better results and greater
production from the workers, as well as increased contentment.
I was in a plant in eastern Ontario lately, and in a discussion of
the effect of fatigue on workers I said to the superintendent of the
plant that I believed what was commonly or often called fatigue
was more often hunger. He said that they had demonstrated that
in their plant. At one time, he said, they had objected to men and
women eating between times, but they had experimented with the
idea and the success had been so great that they were extending
facilities for the taking of nourishment both in the morning and in
the afternoon. I mention that because I think it is bound to have an
effect when you lengthen your hours of work. I believe, and this is
based in part on my own experience and reading, that you will have
to give the workers opportunity for taking extra nourishment. I
also believe that as people settle down into these newer conditions
there will be more control of the accident frequency rate. The com
mittee that has lately been set up by the Department of Labor at
Washington will, I believe, do a big job in this direction.
I have no definite figures; I cannot say the rate was such and such
9 months ago, and so and so 2 months ago, but our opinion is that
frequency is up and severity is also up.
Apprenticeship
Apprentice Training
R eport
of
C o m m itte e
on A p p r e n tic e s h ip , l)y
I n d u s tr ia l
V oyta
W rabetz
( W is c o n s in
C o m m is s i o n ), C h a irm a n
[Read by Thomas B. M orton]
This is the third consecutive year I have had the privilege of
giving the report of your committee on apprenticeship and it has
afforded me an excellent opportunity to keep in touch with the
developments in this field throughout the country. In reading over
the first two reports I find that we covered reasonably well the ap
prenticeship trends and developments. This year I had hoped that
we would be able to report in detail on many of the administrative
problems encountered by the officers responsible for carrying on the
apprenticeship programs of their respective States ; but the problems
of the Nation have vastly changed since the last report and your
committee has decided that this report, to be useful, must be
directed to those things most essential at this time.
It is not necessary to dwell on the gravity of the present national
emergency, but it is essential to discuss the significance of apprentice
ship and other work-training programs and the steps being taken
to make them effective in connection with our vast defense program.
A release issued in June of this year by the Federal Committee on
Apprenticeship, which as you know is made up of representatives of
employers and labor and interested Government agencies, expresses
so clearly the relationship of apprenticeship to the defense program
that we quote the significant parts of it :
Apprenticeship which calls for a relatively long period of training is a vital
factor in the situation but must be considered in relation to the more im
mediate demand for large numbers of semiskilled workers. The two major
needs in connection with the labor supply for national defense are: (a)
Semiskilled “specialists,” and (b) A comparatively smaller number of highly
skilled men.
The mass of workers in modern production plants are semiskilled.
The smooth flow of work depends on an adequate working force of
skilled craftsmen who are the “lead men”—who are the “set-up men,”
and who know all of the operations in a particular trade.
313421°—41—
12
171
172
LABOR LAWS AND THEIR ADMINISTRATION,
1940
The training of the semiskilled men can be carried on in a relatively
short time within industry and in conjunction with the existing voca
tional educational facilities and with other available agencies capable
of providing assistance. This training for such jobs can be im
measurably speeded up.
On the other hand, the time required for training of apprentices
to become skilled mechanics cannot be shortened appreciably. This
was proved by experience in the World War. Nevertheless, an in
tegral part of the national defense program must be the immediate
expansion of apprenticeship, particularly in the national defense
industries.
Industry and labor are working with us on an agreed plan for
the training of future skilled workers, not by any short-cut methods
or by Government subsidies, but through carefully worked out stand
ards of training. The active cooperation of employers and labor in
a unified Nation-wide program of apprenticeship will make a sig
nificant contribution to the fulfillment of the preparedness program
and will materially assist in meeting future “bottle necks” in
production.
An expansion of the activities of the Federal Committee on
Apprenticeship will—
1. Provide industry with an adequate supply of skilled mechanics and give to
our youths an opportunity to become competent craftsmen.
2. Enable those already partially trained through employment in occupations
requiring a narrow range of skills to secure an opportunity to complete an ap
prenticeship in the shortest possible time and become skilled workers.
3. Facilitate the orderly absorption of apprentices into industry.
It is recommended that there be expansion of the apprenticeship field staff
to meet the emergency by the assignment of qualified apprenticeship technicians
to the 33 major industrial areas of the country with emphasis on the training
of skilled mechanics for the manufacturing industries. This cooperative pro
cedure should be furthered through greater activity on the part of trade asso
ciations and unions working in cooperation with State and local apprenticeship
committees and through action on the part of individual employers and local
labor organizations.
The recommendation with respect to expansion of the apprentice
ship field staff has already occurred. Five regional offices have been
set up as follows:
R e g io n 1 . — Northeast: Headquarters, Boston, Mass.; Maine, New Hampshire,
Vermont, Massachusetts, Rhode Island, Connecticut, New York.
R e g i o n 2 . — Central: Headquarters, Harrisburg, P a .; Maryland, New Jersey,
Pennsylvania, Delaware, Ohio, West Virginia.
R e g i o n S. — Midwestern: Headquarters, Madison, W is.; Michigan, Indiana, Wis
consin, Illinois, Minnesota, Iowa, Missouri.
R e g i o n 4 .— Southern: Headquarters, Austin, T ex.; North Carolina, South Caro
lina, Georgia, Florida, Tennessee, Alabama, Mississippi, Arkansas, Louisiana,
Oklahoma, Texas.
APPRENTICESHIP
173
R e g io n 5. — Western: Headquarters, Denver, Colo.; Montana, Wyoming, Colo
rado, New Mexico, Idaho, Utah, Arizona, Washington, Oregon, Nevada, California.
A total of 37 men are now available to provide assistance on train
ing problems in those areas.
The Federal Committee reviewed its own procedures and standards
in the light of experience and the urgency of the current situation. It
decided to eliminate features which caused most resistance from em
ployers and labor, and at the same time to maintain adequate stand
ards to protect the interests of apprentices. It is recommended that
other Federal agencies which have rules or regulations applicable to
the employment of apprentices review them with the view of elimi
nating all detail and procedures not absolutely necessary.
Let us turn our attention now to another aspect of the training
problem which is receiving attention. It was shown in the release
of the Federal Committee that the majority of workers needed for the
defense industries are semiskilled and can be trained in a relatively
short period of time. In the course of time several different Federal
agencies have been set up to deal with some specific problem relating
to education and employment, and work training. Many of these
overlap in some particulars and some are dependent on each other
for support. For example: The United States Office of Education
and State boards for vocational education carry on training programs
for employed persons—which include apprentices— and for persons
preparing for employment. The Apprenticeship Service of the
United States Department of Labor and State apprenticeship coun
cils assist employers and labor organizations with their job-training
programs. The C. C. C. conducts work-training programs for its
trainees and the N. Y. A. also carries on work-training projects. It
is apparent that the work of these various agencies must be coordi
nated to be fully effective in a training effort as great as that now
being undertaken. This is being done under the general direction of
Mr. Sidney Hillman, member of the Defense Advisory Commission,
and the more immediate direction of Mr. Owen D. Young and Dr.
Floyd Reeves.
Upon the request of Mr. Young, a Committee on Industrial Train
ing met in Washington July 24 to consider various aspects of the
training problem and to work out a program which will assure the
Nation of amply trained workers to produce the machines, goods,
and equipment to be ordered. According to a release issued by Mr.
Young following this Committee’s meeting, preliminary plans were
agreed to for obtaining information on the number of workers needed
in the defense industries, and a program was formulated for aiding
industry in training apprentices, retraining workers, refreshing their
174
LABOR LAWS AND THEIR ADMINISTRATION, 1940
skills where necessary, and generally stimulating the upgrading o f
those presently at work on key defense production processes.
Y ou r committee is confident that everything will be done that can
be done, considering the seriousness o f the situation before us, to
safeguard the interests o f apprentices, the older workers, and those
to be trained for semiskilled work. W e are in no position at this
time to make specific recommendations relative to the administration
o f State apprenticeship legislation, except that the procedures should
be examined to see i f unnecessary details can be eliminated; that pro
vision be made fo r the establishment o f local committees to handle
local trade apprenticeship problems; and that apprenticeship direc
tors be prepared to cooperate fully with the program to be announced
by the National Defense A dvisory Commission.
In our report last year we said that Virginia would probably
appropriate money fo r a State director o f apprenticeship and other
necessary administrative expenses. This was done. A State direc
tor has been appointed. W hile the Virginia law does not expressly
state how the director is to be appointed, this problem was solved
by the commissioner o f labor and the State apprenticeship council
jointly interviewing the applicants and selecting the candidate best
fitted fo r the job on his qualifications fo r it. One more State, K en
tucky, has joined the ranks o f States having enacted apprenticeship
legislation. No details are available at this time with reference to
the administration o f this law ; and two additional States, Vermont,
and Alabama, have appointed apprenticeship councils.
The apprenticeship council o f California has adopted a procedure
in connection with its meetings which may be worth while considering
by other councils. It considers its work to be largely promotional,
and therefore the more leaders o f management and labor who become
fam iliar with it the better. I t invites leaders from, these groups
and interested public agencies to sit in on many o f its meetings, and
i f special reports are made the guests are given the opportunity to
ask questions and participate in discussions.
The apprenticeship council o f North Carolina has taken action in
support o f the national defense program which is worth considering
in any State where organizations o f employers and employees are
limited to scattered areas. The council wished to place as much
emphasis as possible on apprenticeship in the metal trades, but found
little understanding o f apprenticeship procedures and standards
among the employers and employees. Under authority o f the ap
prenticeship act, and after consultation with interested employers
and labor representatives, it prepared and issued State-wide minimum
apprenticeship standards for the metal trades. Insufficient time has
APPRENTICE SHIP
175
elapsed since the standards were promulgated for the State council
to report on their effect.
Other State apprenticeship agencies are reviewing their procedures
in the light o f their own particular situations and that o f the national
emergency; but particulars with respect to changes were not available
at the time this report was written.
In conclusion your committee recommends:
1. That State apprenticeship agencies make every reasonable effort
to reinforce the efforts o f the Federal Committee on Apprenticeship
to carry out its responsibility in connection with the national defense
program ; and that they be prepared to cooperate with employers and
employees on job-training programs fo r other classes o f workers.
2. That encouragement be given to organizations o f employers and
employees interested in the establishment o f State apprenticeship
legislation.
3. That State labor commissioners who have not yet appointed
State apprenticeship councils do so after consultation with the lead
ing organizations o f employers and o f employees.
4. That unusual care be taken in appointing members to State
apprenticeship councils so that the interests o f employers and em
ployees, geographically, as well as by industries, will receive consid
eration.
5. That careful records o f apprentices employed and released be
maintained.
6. That close relationships be maintained with all apprenticeship
programs and with the Federal Committee on Apprenticeship.
Discussion
Mr. M orton (V irgin ia). I noticed in reading over the names o f
the States under the regional offices that— and I am sure it was unin
tentional— Virginia was one o f the few States left out. That might
be complimentary because we have such a good apprenticeship coun
cil and have got off to a good start.
The law in Virginia went into effect under an act o f the legislature
o f 1938. It provided that the Governor appoint six persons to serve
on this apprenticeship council, three from the employer group and
three from the employee group, with the director o f vocational train
ing o f V irginia and the commissioner o f labor serving ex officio,
making a commission o f eight.
W e functioned fo r 2 years without any appropriation, except what
little money I could get out o f my own budget as commissioner o f
labor for correspondence. The members o f the council attended meet
ings at their own expense.
176
LABOR LAWS AND THEIR ADMINISTRATION, 1940
This session o f the legislature, 1940, included in the budget enough
money fo r us to put a full-time director and secretary on the job and
to pay traveling expenses o f members o f the board in attending
meetings and the director fo r making his visits. H e has been on
the job just about 2 months. It was not plain as to who was going
to appoint the man— the Governor, the commissioner o f labor, or
the council— but we did not have any trouble about that. W e con
sulted among ourselves and interviewed candidates for the position
and selected one who happens to be a practicing attorney but who
has had a great deal o f experience in the labor field. He is giving
a good account o f himself, and I am sure V irginia will be able to make
a good record for itself in the future months.
There is one problem that has come up. That is over the question
o f authority in handling the apprentices in the shop after they have
been properly indentured— as to where the authority o f the voca
tional training department and o f the apprenticeship council is to
begin and end, respectively. I think we will be able to solve that
because our director o f vocational training is a member o f this council
and an active one. H e takes a real interest in the work. In addition
to that, the apprenticeship council has accepted the responsibility o f
serving in an advisory capacity to the vocational training department.
W e have already met in that capacity, and I think we will be able
to work out a satisfactory arrangement along that line.
I might say that I have here a copy o f the Virginia rules and
standards which anyone can see who wishes to, and if anyone is inter
ested I shall be glad to see that a copy is sent to you. Also, I have
some copies o f the law under which apprenticeship training is func
tioning in Virginia. I f you are interested, I shall see that you get
copies.
Dr. P a t t o n (New Y o rk ). There is an effort on foot in New Y ork
State to amend the law so that wider provision may be made for
apprentices and that the apprentices so brought in as a result o f that
proposed amendment will be exempt from the Federal wage-hour law
and the double compensation feature o f the New Y ork workmen’s
compensation law.
That movement is being fostered by one o f the State departments
in this State, but not the labor department. I have been told by
those chiefly responsible fo r fostering this amendment that they hope
to get the bill adopted and before the Governor for signature. They
are not confident about the Governor’s signature but are confident o f
its passage in the legislature.
Briefly, the proposition is to have a board set up in each locality
o f the State, on which are members representing labor, employers,
and the general public who will decide fo r that locality how many
APPRENTICESHIP
177
apprentices are needed and in what industries; then they will permit
so many children to enter as apprentices and the employers are to
be relieved from double compensation, Federal wage-hour law, and
minimum wage. I may say that is a very big bite, but I am quite
confident there is a great deal o f steam and pressure going to be put
behind it.
Miss M c C o n n e l l . It behooves all o f us to keep our eyes open for
similar movements which are likely to grow up in other States as
w ell; certainly the protection o f the young worker in industry is
the last place where there could be any possible argument for the
breaking down o f standards o f protection for these workers.
Chairman G r a m . I understand we have with us two gentlemen rep
resenting the Federal Apprenticeship Training Committee.
Mr. J e n k in s (Washington, D. C .) . W e believe in the apprentice
ship movement in order that there may not be another lost generation.
During the other war we had concentration with intensity on short
training, with very little emphasis on apprenticeship. In speaking
o f that short intensive training, i f I may be pardoned for drawing a
personal illustration, some few years ago I wTas asked to set up a
training program fo r an agency in Washington. My immediate
superior, who was a very active gentleman, had the policy and philos
ophy, i f you please, that we should branch out and become very
active before we found out what our problems were or what the
solution o f those problems would be. I had never worked that way.
I like to find out what the problem is. H e did not think so much o f
my slow methods.
A t a public meeting, before several hundred people, he said, “ Train
ing is very much like the fire department. Y ou can’t train the
firemen when there is a fire. Y ou just send them.” H e gave me
several knowing nods. W hen I got my chance I said the discussion
about the firemen reminded me o f a situation in New Bedford, Mass.,
where a salesman came into the mayor’s office, and said, “ Mr. Mayor,
what kind o f a fire department do you have?” The mayor said, “W e
have the best fire department in the Commonwealth o f Massachusetts.
A s a matter o f fact, I heard them going by the office a few minutes
ago, driving to beat h— .” The salesman said, “ W ell, Mr. Mayor,
it may interest you to know that your fire department was going
in the wrong direction when they went by your office. It may further
interest you to know when they did get to the fire there wasn’t a
man who knew how to screw the hose on the hydrant; it blew off
and now the threads are stripped and nobody can screw it on. F ur
thermore, it may interest you to know it is your own house that is
on fire.” I offer this to illustrate the importance o f short, intensive
178
LABOR LAWS AND THEIR ADMINISTRATION, 1940
training. I offer it so that you may give apprenticeship training
proper consideration.
Mr. Gallagher, who is the representative for New Y ork City and
its immediate suroundings, is with me and if you care to ask him
or me any questions we will be glad to try to answer them.
Mr. G a l l a g h e r (New Y ork ). M y position in the metropolitan
area at present is confined exclusively to essential industries, and
the greater part o f my work is concentrated on most o f these essential
industries in greater New York.
The building trades industry has set up a committee on apprentice
ship training consisting o f the Building and Construction Tradesi
Council and the Building Trades Employers Association. It is getting
along nicely.
W e have set up at least 9 or 10 committees with standards on
apprenticeship in these essential industries, which are small plants
consisting probably o f 10 to 60 men. W e are getting along nicely
in setting up individual indentures.
Dr. Patton has stated that one o f the State departments is becoming
very active in trying to eliminate all the laws on fair labor standards
that this convention has been instrumental in setting up. Those
responsible seem to think that this certain department should assume
full and complete charge o f apprenticship. In order to do so they
want to eliminate double compensation laws and every other restric
tion in order to satisfy a few employers o f New Y ork State.
A fter all, this body has been responsible for apprenticeship pro
grams fo r a good many years, and if one department is going to try
to upset this whole program (and we have 22 States that have
adopted the program ) apprenticeship will be in a sorry plight. I f
this department is successful in forcing through its proposition, we
will have a lot o f trouble on our hands.
Mr. M iler (W isconsin). Mr. Wrabetz asked me to contribute a
little to the discussion on this subject. He cautioned me not to
extol the Wisconsin apprenticeship program, but rather to show
that over a period o f years the plan has actually produced results.
There are in Wisconsin at the present time slightly over 3,000 inden
tures in force. W e average about 275 completions quarterly. The
average term o f training is 4 years. W e are not entirely certain
whether graduations offset the number o f skilled workers who retire
or drop out o f the trades for various reasons. The number o f new
indentures is slightly lower than normal because industrial condi
tions are not yet so set as they usually are. However, the ratio o f
apprentices to skilled workers remains fairly constant, so that the
greater the number o f skilled workers employed, the larger will be
the number o f apprentices.
APPRENTICESHIP
179
Under the industrial commission in Wisconsin, there is a director
o f apprenticeship who has two assistants. It is this department’s
responsibility to see that the terms o f indentures are fulfilled, and that
the interests of both apprentices and employers are fully protected.
W e feel that the program has been o f benefit both to industry and
to youth. Incidentally, most graduating apprentices remain with
their employers.
A new undertaking this fall is that o f indenturing, in certain
factories which are picking up, apprentices in accounting, bookkeep
ing, and even office procedures, o f the company. These indentures
are written on the same basis as those for the mechanical skills and
the indenture is fo r a year. W e feel that our laws are fully justified.
Mr. M orton . I should like to acknowledge here the very great
assistance o f Mr. W . J. Moore o f the Federal Apprenticeship Com
mittee, which meant a lot to us in Virginia. I do not think we could
have gotten off to such a good start without him. He was really a
great help to us.
Miss A nderson (Washington, D. C .). I want to say something in
connection with apprenticeship training— not in regard to the report,
however, but along with the report. W e find that women are being
employed to a greater extent in the defense industries and this will
continue to be more true as the program develops. W e find also that
the training that is being given provides little for women. There
are practically no women in the vocational classes now being set up,
and while we know that the real training for the job will have to
be done on the job, there are certain preliminaries that the vocational
training schools and National Youth Administration give to the
boys that should also be given to the girls.
W e are not pushing the women’s employment, although we know
they have to work the same as everybody else has to work. A t
the same time, they are not being afforded the same training oppor
tunities that the boys and men are getting and I feel that it is a
very great error on the part o f all o f us throughout the Nation not
to see that women get this training, because the women will be
employed. They will go in as the very rawest recruits, and they
will have to take what they can get because they are not trained.
The low standards under which women work lower the standards of
all workers. I hope that those o f you who are in on the training
program will insist that women get at least the preliminary training—
the same as the men are getting.
Mr. F l y n n (New Jersey). I should like to say something in sup
port o f the men on training. I should like to speak, not as a repre
sentative o f labor, but as an ex-employer who went through the last
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LABOR LAWS AND THEIR ADMINISTRATION, 1940
war as a manufacturer in a vital industry and who also had a lot o f
experience after the war with the condition that resulted from this
intensive semiskilled training. It left us after the war with thou
sands and thousands o f men who were skilled in doing some job that
lasted only while the war was going on, and as soon as the war ended
they were neither flesh nor fow l and your relief rolls are filled with
them today. I hope strong support will be given to the recommenda
tions o f the gentleman from the Federal Apprenticeship Committee.
Child Labor
Child Labor in 1940
R eport o f C om m ittee on Child L a bor , by
B
e a t r ic e
M cC
o n n e l l
( United States
Children's B u rea u ), Chairman
I t is heartening today, in the midst o f so many new and difficult
problems confronting labor-law administrators, to realize that pro
gress in the child-labor field has continued during the past year.
The 12 months since the last meeting o f this organization have w it
nessed real progress toward higher child-labor standards and the
development o f an increasing awareness o f the need for, and im
provement in, administrative techniques fo r the prevention o f child
labor. During the year the W hite House Conference on Children
in a Democracy reconsidered aspects o f child welfare in all their inter
relationships, including child labor and education. This con
ference, the fourth in a series o f conferences called by Presidents o f
the United States during the last 30 years, focused the Nation’s atten
tion on the needs o f its children. The standards for child-labor
legislation which it endorsed are, in general, in line with those which
have been heretofore recommended by the International Association
o f Governmental Labor Officials. The W hite House Conference
recommendations have served, therefore, to reenforce the concern
which this Association has long had for adequate child-labor
protection.
During the past year another conference was held that is o f great
significance from the point o f view both of labor and o f American
relationships. The Second Inter-American Labor Conference o f the
International Labor Organization met in Habana, Cuba, in Novem
ber 1939. The purpose o f this conference was to consider com
mon social and economic problems o f the American States which
are members o f the International Labor Organization, and to review
the action taken by these republics to make effective the recommenda
tions o f the first o f these regional conferences o f American States
held in Santiago de Chile in 1936. Representatives from 19 Am eri
can countries were present, including, as in the Geneva International
Labor Organization conferences, representatives o f government and
o f employers and workers. The subjects presented for discussion in
cluded the work o f women and juveniles. The resolutions adopted
181
182
LABOR LAWS AND THEIR ADMINISTRATION, 1940
by the conference represent a great advance, particularly for the
Latin republics. This conference, by affording a discussion o f com
mon problems, resulted not only in the establishment o f closer rela
tionships, but laid a basis fo r an expanding program o f cooperation
and understanding between the American governments.
In the United States during 1940 only eight State legislatures met
in regular session, so that opportunity fo r legislative changes have
been limited. The new child-labor and compulsory-school-attend
ance laws passed by New Jersey, effective September 1, 1940, stand
out as the major legislative development affecting child workers
passed this year. Basic child-labor standards are raised, and these
in general meet the standards recommended by this organization.
The compulsory-school-attendance provisions are also amended and
adjusted to dovetail with the new child-labor regulations, so that a
child may not leave school under 16, unless he is physically or men
tally incapacitated. These acts bring New Jersey well into the fore
front in progressive child-labor standards. To summarize briefly:
There is a basic minimum age o f 16 years fo r employment. E m ploy
ment certificates are required for minors up to 18 years. A ge certi
ficates will be issued on request for young persons 18 to 21. Hours
o f labor and night-work standards are improved, applying to minors
up to 18 years o f age. New Jersey becomes the second State with
a maximum 40-hour week fo r minors under 18. Hazardous-occupa
tions provisions are strengthened and street trades are regulated.
This new law also sets up special provisions regarding agriculture,
excepting the work o f children outside school hours on their parents’
farms. F or other agricultural work, the New Jersey law sets a mini
mum age o f 16 during school hours and age of 12 outside school
hours and during vacation. Special permits are required for the
employment o f children between 12 and 16. Daily hours are limited
to 10, except on school days, when combined hours o f work and school
may not exceed 8. Protection o f the migratory agricultural worker
is sought through a provision prohibiting the employment o f a non
resident child under 1-6 in New Jersey whenever the law o f his State
or residence requires his attendance at school, or during hours when
the schools are in session in New Jersey in the district where he wishes
to work. W hile this provision is not limited to employment in agri
culture, the largest group affected will be the children from other
States, particularly Pennsylvania, who come to New Jersey fo r work
on truck farms, in cranberry bogs, and in other kinds o f commercialized
agriculture. Through the inclusion o f regulations particularly
adapted to employment in agriculture, New Jersey is pioneering in a
difficult field. In attempting to meet the problems o f the migrant
child worker, it has taken a signal step in recognizing the responsibility
o f one State for the children o f another.
CHILD LABOR
183
This provision fo r the protection o f migrant children represents
the achievement o f a program begun in New Jersey and Pennsylvania
as long ago as 1927, when standards for legislation to meet the prob
lems arising in connection with the influx into the State o f migratory
children were recommended and promoted by the first o f a series o f
interstate conferences on the migrant child. Standards fo r such legis
lation were recommended and promoted by the Four-State Confer
ences on the Migrant Child. These conferences were made up o f
education, health, and labor officials, and representatives o f organiza
tions concerned with problems o f the working child from the States
o f Pennsylvania, New Jersey, Maryland, and Delaware. Bills to
prevent the employment o f nonresident children during the time they
would have been required to attend school in their own States, and to
require them to attend school in the State where they were temporarily
residing, were introduced in both the New Jersey and Pennsylvania
legislatures for several successive years. The first significant step
was taken in 1931, when Pennsylvania succeeded in passing legislation
embodying the suggestions o f the conference.
There has been practically no change in the field o f Federal legis
lation. During the past year the child-labor provisions o f the Fair
Labor Standards A ct have remained the same, although an amend
ment to the F air Labor Standards A ct was passed permitting the
application o f a lower minimum wage to certain or all interstate indus
tries in Puerto Rico and the Virgin Islands.
Under the terms o f the child-labor provisions o f the Fair Labor
Standards A ct prohibiting employment o f young workers 16 and 17
years o f age in occupations determined particularly hazardous by the
Chief o f the Children’s Bureau, two orders have been issued since
last September. These in effect set an 18-year minimum age fo r the
employment o f children as drivers or helpers on motor vehicles and
fo r employment in or about coal mines except in certain specified sur
face work. The first o f these orders became effective January 1, 1940.
the second, September 1, 1940. Altogether three orders have been
issued relating to hazardous occupations. The first order, issued
in 1939, declared all occupations in establishments manufacturing ex
plosives to be hazardous fo r minors 16 and 17 years o f age. The pro
vision in the F air Labor Standards A ct placing on the Children’s
Bureau the responsibility fo r determining what occupations are haz
ardous fo r young workers was modeled on State law, and on experi
ence which has demonstrated that this procedure is the most workable
method o f keeping protection o f young workers from hazardous em
ployment in line with changing industrial conditions. I am sure you
will be interested to know that California, in issuing an order re
lating to hazardous occupations, has made use o f the Federal experi-
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LABOR LAWS AND THEIR ADMINISTRATION, 1940
ence. This State, under its power to prohibit occupations hazardous
fo r children under 16, has issued an order prohibiting children under
16 from employment in plants manufacturing explosives, thereby ap
plying to children under 16 the same prohibition as is applied to chil
dren under 18 by the Children’s Bureau order relating to explosives.
The California Department o f Industrial Relations in its March B ul
letin expresses regret at its inability to extend the California order
up to 18, and thus to make uniform the regulation o f employed minors
in establishments engaging in intrastate and in interstate commerce.
In Canada no important legislative changes affecting child workers
were made during 1940. In Manitoba, however, regulations govern
ing the operation o f mines were approved which supersede those o f
1928. According to the Labor Gazette o f June 1940, a significant
change lies in the prohibition o f employment o f boys o f less than 16
above ground or o f those o f less than 18 below ground. Girls and
women are prohibited from work in or about any mine or metallurgi
cal works except in a technical or clerical or domestic capacity.
F or the operation o f elevators and cranes a minimum age o f 18 is
fixed; fo r the operation o f hoisting machines, a minimum age o f 21.
During the past year administration o f both State and Federal
child-labor legislation has been strengthened so as to give greater
reality to the legal standards. A s you know, the child-labor pro
visions o f the Fair Labor Standards A ct afford a basis for State
and Federal cooperation by making it possible to tie the administra
tion o f that act into the State child-labor-law procedures. The act
followed State experience in recognizing that effective administration
was dependent on an employment-certificate system. I t provides
that certificates o f age issued pursuant to regulations o f the Chief
o f the Children’s Bureau shall be accepted as conclusive evidence
that the minor is o f the age stated. The regulations issued by the
Children’s Bureau setting standards and procedures fo r the issuance
o f Federal certificates o f age provide also fo r acceptance o f State
employment and age certificates in proving age in States in which
certificates are issued substantially in accordance with the Federal
regulations and which are designated by the Children’s Bureau. A t
the present time, Federal certificates are issued only in 4 States,
South Carolina, Mississippi, Texas, Idaho. In 42 o f the remaining
44 States and in the District o f Columbia and Hawaii, cooperative
relationships have been established between the agency supervising
certificate issuance in the State and the Children’s Bureau, so that
State certificates are accepted as p roof o f age under the Fair Labor
Standards A ct in 44 jurisdictions. In Louisiana, Nevada, Alaska,
and Puerto Rico the Bureau is accepting birth or baptismal certifi
cates as p roof o f age under a special regulation pending the develop-
CHILD LABOR
185
ment o f cooperative relationships or the issuance o f Federal certifi
cates. Bureau representatives are now in Alaska and Puerto R ico
working on plans for certificate issuance. (I am happy to say that
Puerto Rico has entered that group o f 42 States. I have just re
turned today from Puerto R ico.) I t is hoped that cooperative p ro
grams may be established shortly in these remaining jurisdictions.
During the past year the Federal and State certificate-issuance p ro
grams have been further integrated through exchange o f counsel
and assistance. Over half the States have revised and improved
certificate forms and issued new instructions relating to issuance o f
employment and age certificates fo r the guidance o f issuing officers
and to promote efficiency and uniform ity in issuance. There has
also been an interchange o f information as to any violations found
by either Federal or State inspectors.
D uring 1940, under an arrangement with the Department o f A g ri
culture, which is charged with the administration o f the Sugar A ct
o f 1937, the cooperation o f a number o f States and the Children’s!
Bureau was enlisted in making certificates o f age available for chil
dren working in the production o f sugar cane and sugar beets. Under
the Sugar A ct a producer, to receive benefits, must comply with
certain conditions. One o f these conditions is not to use a child
under 14 nor permit a child between 14 and 16 years o f age to
work fo r more than 8 hours a day. In six States, Iowa, Michigan,
Montana, Nebraska, Ohio, and W yom ing, local school officials, under
the supervision o f the State department o f labor or State department
o f education, have agreed to issue proof-of-age cards this year. In
one other State, Louisiana, such certificates o f age are being issued
by the Children’s Bureau through its representatives who issue F ed
eral certificates o f age in Mississippi.
View ing the child-labor situation as a whole, we can take courage
from the advance made, but we must continue to work fo r improved
child-labor-law administration, both State and Federal, fo r the im
provement o f basic child-labor standards, and for better adjustment
o f compulsory-school-attendance provisions to State child-labor
requirements. Perhaps the most important and pressing problems
at the present tinte, however, are those relating to the employment
o f children in street trades and in industrialized agriculture.
In these two fields your committee points out particularly the need
for the establishment o f adequate standards and for the development
o f special techniques o f administration. A n exchange o f experience
with respect to conditions affecting young workers in these fields
and the particular difficulties you have encountered in the administra
tion o f existing legislation are prerequisite to accomplishing these
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LABOR LAWS AND THEIR ADMINISTRATION, 1940
ends.
It is my hope that we may have today some helpful discussion
o f these two problems.
A s you know, there are real obstacles to adequate legal control
o f employment conditions o f children engaged in street trades.
These children generally work under contracts which are designedly
drawn to put them in the position o f independent contractors. In
cases where the child works under such a written contract it has
been difficult to apply laws directed at “ employment.” Also while
the usual theory o f child-labor legislation has; been to direct the
regulation at the employer, street-trades regulation has usually been
directed at the child himself. W ith an increase in regulatory legisla
tion defining the responsibility o f employers, the tendency o f pub
lishers and distributors has been to place the child in the status
o f an independent contractor, with the result that responsibilities
normally assumed by an employer have been shifted to the child.
Wisconsin in 1937 met this situation by declaring that such chil
dren were employees o f the publisher or distributor from whom they
sold or distributed papers. This placed the responsibility upon the
business benefiting from the child’s work. This State also extended
its workmen’s compensation act to cover street traders but exempted
them from unemployment compensation. North Carolina in 1937
provided that the child’s parent should be considered his employer
in cases where he was not actually employed. This law, like the
traditional method o f street-trades regulation, relieves the person
profiting from the child’s employment o f responsibility.
In 1939, by amendment to the Federal Social Security A ct, minors
under 18 engaged in the delivery or distribution o f newspapers or
shopping news were excluded from old-age insurance benefits. In
this year also the Federal Social Security A ct was amended to exempt
wages paid for the services o f such minors from tax fo r unemploy
ment compensation. Since the amendment relieving work o f street
traders from tax under the unemployment-compensation title o f the
Social Security Act, 13 States and the District o f Columbia have
followed the Federal precedent by legislation which exempts such
minors. Investigation o f conditions o f work o f street traders, even
those operating under contracts designed to place them in the posi
tion o f independent contractors, is persuasive that they are really
employees. Their duties and activities are usually as clearly subject
to the employers’ control both as to method and manner o f work and
in accomplishing the desired result as are those o f employed children
in industrial and commercial establishments. Should not these chil
dren be given the same protection as is given to a child who is not
forced to work under a contract through which his employer avoids
CHILD LABOR
187
responsibility under State labor laws ? W hat should be our goal with
respect to this problem? W hat steps should we take to reach it?
A n equally difficult problem is involved in the use o f children in
industrialized agriculture. In this connection the growing public
concern over migratory-labor problems is o f special interest to this
organization. Evidences o f this interest include the Four-State
Conference on Migratory Labor held in Baltimore in February with
representatives from Maryland, Delaware, Virginia, and New Jersey;
hearings held in May before the United States Senate Committee on
Education and Labor to obtain information on labor conditions
among migratory agricultural workers; and the hearings now being
held in various localities by the United States House Committee on
Interstate M igration o f Destitute Citizens.
Aside from New Jersey, only 5 other States have any adequate
legislation expressly regulating agricultural Work. In fact, the
child-labor laws in almost half the States (22) specifically exempt
agriculture from minimum-age coverage. Nineteen States apply the
minimum-age provisions to any occupations or to any business or
service during school hours, and most o f these 19 also require cer
tificates for work in any gainful occupation during school hours.
However, apparently these provisions have not been extensively
applied to agriculture. These laws were obviously intended to im
plement compulsory-attendance laws. They were designed to p ro
hibit employment during school hours so children may go to school.
Since the laws are general in coverage and do not exempt agricul
ture, it would seem possible to interpret and apply them to agricul
tural work. T o what extent have they or can they be applied to
agriculture?
Compulsory-school-attendance laws aid in keeping children from
work during school hours in agriculture and in street trades as well
as in other work. These laws, however, contain numerous exemp
tions. Some o f them specifically permit children to be excused from
school fo r agricultural work. In some agricultural areas children
are excused for farm work as a matter o f course under some general
authority. A s you know, the Fair Labor Standards A ct applies to
children in agriculture only while they are legally required to attend
school. It can be o f help, however, in implementing State efforts to
keep the rural child in school. Exemptions from school attendance
now permitted in compulsory-school-attendance laws should be
restricted. In addition your committee believes that it is funda
mental that compulsory-school-attendance laws be dovetailed into
child-labor laws, so that no child may leave school until he reaches
the minimum age set for employment during school hours.
318421°—41----- 13
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L A B O R L A W S A N D T H E I R ADMINISTRATION,
1940
These two fields o f child employment constitute the last large areas
o f child labor that are the least regulated. This organization was
among the earliest to recognize the needs in fields where we now
have established and accepted standards. It should now press fo r
ward to the formulation and acceptance o f equally definite goals
in these two fields.
In a period o f world stress such as we are facing now, matters
o f national defense are o f great moment. There is no national de
fense more important than the safeguarding o f our children. W e
must realize that coming events may bring increasing pressures fo r
the relaxing o f labor standards. The President has declared that
it is not the intention o f the Government to permit labor standards
to be broken down as a result o f the national defense program. A s
labor-law administrators we each have a personal responsibility to
promote understanding o f the need fo r protecting existing childlabor standards in times o f urgency. I t was never more true than
now that the future o f this Nation depends upon its youth and upon
their morale and their devotion to the American way. W e need
now, as never before, not only to dedicate our efforts to holding the
ground gained in the past but to give to the children and youth
o f this country every possible opportunity for their education and
training and fo r their intellectual, moral, and physical development
that they be equipped with the necessary ability and zeal to meet
the great responsibilities o f the coming years.
D isc u ssio n
Miss S w e t t (W iscon sin ). I promised Miss McConnell that I would
say a word about our experience. Y ou have to get the cooperation
o f the publishers— their willingness to accept the responsibility as
the employer. Back in 1937 a majority o f the daily newspapers in
Wisconsin said they were ready to take that responsibility. I f they
take this responsibility, you must give those employers the help the
right kind o f a street-trades law well enforced will give them. It
seemed to us that the definition in the law must clearly state what
you mean by a street trade, and then it must be made clear that
either the publisher or the agent, in the case o f newspapers and maga
zines, or the one giving out the articles to be sold by children, is the
employer.
Y ou may run up against something like we did on bootblacks.
Under the old law, the child was granted a permit to shine shoes
and he went anywhere he pleased.' Even under the present law,
it is a little difficult to control him, because he goes to the 10-cent
store and buys shoe blacking and a brush, makes himself a little
box, starts out to shine shoes, and really has no employer. W e have
CHILD LABOR
189
insisted, however, that a boy cannot have a permit issued to himself
as an employer and that the permit must be issued to somebody. So
we said it would have to be issued to the parent, who would have
to take the responsibility that the child attended school, was not
out after 7 p. m., never went into taverns, etc. One youngster said,
“My goodness, I couldn’t ask my folks to take all this responsibility.”
Y ou must have, fo r effective administration, a centralized system.
Issuing permits by isolated groups without centralization w ill not
produce results. There must be a central authority, with power to
designate the offices to issue permits who will be governed by a uni
form policy, and provision must be made to remove them if they are
not in sympathy with the policy which experience has shown will
bring about the protection the law was designed to effect.
A paper boy no longer can pick some other boy to take his place.
Now the publisher provides a certain number o f substitutes. One
o f the newspapers in Milwaukee, where they have a certain number
o f substitutes fo r every so many boys who can be called in, has done
much to avoid having boys who have no permits selling papers.
W e have the help in our State o f truant officers and police officers,
who assist in street inspection by questioning these minors on the
street and reporting to the department any found in violation o f
the requirements. I know the law has accomplished this and we
do not any more see youngsters, 9 and 10 years old, peddling maga
zines in downtown sections at 9 o’clock or later. Y ou may occasion
ally find them running from house to house selling them. But with
the help o f the police officers, who are very much interested in help
ing, we are doing much to keep the minors off the streets. W e find
the old badge that gives the youngster’s number is not nearly so
effective as the identification card we give the child. On that iden
tification card there is his name, date o f birth, his signature, and
the signature o f the person issuing the permit and the name o f the
employer for whom he is working.
It seems to me that we have passed the danger point o f the pub
lishers not wanting to take the responsibility o f employers. Last
year we had difficulty over insurance coverage, but that has been
straightened out to the satisfaction o f the publishers so that they
have no objections to it now, and most o f them tell us they would
not go back to the old helter-skelter hit-or-miss system fo r anything.
Mr. M o r t o n (Virginia). The problem as presented in Virginia
divides the boys into two groups—those who sell newspapers and
those who shine shoes. The shoeshine problem has been awfully
hard to handle. When our inspectors take boys into court for vio
lation of the law, they are generally too young to put in jail and
their parents or guardians are often not responsible people. We
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L A B O R L A W S A N D T H E I R ADMINISTRATION,
1940
have met this by organizing clubs under the supervision o f represen
tatives from the recreation associations, probational officers, and ju
venile court officers. They present the boy with a badge which
makes him a member o f a social club. W e can go into court with
any o f these boys who are violating the law, but we cannot take
that State badge away from the boy so long as he meets the require
ments. The social club, however, takes his club button away and
the other boys ostracize him. He would rather lose the State badge
than his social club button.
W ith reference to the newspaper boys, there is a different problem.
The trouble in V irginia is that the larger boy who gets the permit
employs three or four little fellows and he lets the small boy sell
the papers, and so the newspaper officials have complained to our
department. W e have not satisfactorily solved the problem. The
inspectors in checking up on the boys find they have used fictitious
names and addresses, all o f which adds to the confusion. When
you finally follow through, the parent is sometimes cooperating and
encouraging the boy. Then when you take the child into court, the
judge will ask, “ W hat are you going to do with that little fellow ?”
The newspaper boy on the street is a real problem.
Miss S w e t t . I think the trouble there is with the type o f law
you have. Until you make the person actually benefiting by the
child’s work responsible— make the employer conscious o f responsi
bility— you will never get anywhere with the old type o f law.
W hen you give the permit to the youngster, he does these things,
goes where he wants when he wants to ; but when an employer is
faced with the knowledge that i f this boy takes another along he, as
employer, is going to be held fo r double and triple compensation in
case o f injury, you will have a better situation. You have to center
the responsibility on the people who profit by the work i f you want
results.
I should like to ask i f any o f you have found the newsboys are
being let out at 18 now because o f the social security provision re
lating to those under 18. Perhaps you would not be conscious o f it
if you were not enforcing the State law. Y ou will find that some
o f the papers are letting the boys go when they get to be 18 and this
is tough on the 18-year old.
Wage-Claim Collection
Wage-Claim C ollection
R eport of C om m ittee on W age-C laim Collection, "by E . I . M cK i n l e y
(Arkansas D epartm ent of L a b o r ), Chairman
Since the selection o f the wage-claim committee at a meeting o f the
International Association o f Governmental Labor Officials in 1935,
there has been, through the cooperation o f Secretary Lubin, much
interest manifested in this legislation in the various States.
Since 1937, wage-collection laws have been introduced in the legis
latures o f Connecticut, Missouri, New Hampshire, North Carolina,
Kansas, Ohio, West Virginia, W yom ing, Rhode Island, Maryland,
Indiana, Louisiana, Iowa, and Michigan, indicating that the atten
tion o f labor officials in these States has been directed toward this
legislation.
Replies from 24 States show that a wage-collection law along the
lines o f the model wage-claim law is much desired.
In many o f the States, the commissioner o f labor accepts wage
claims fo r collection, without specific authority. In Colorado fo r
the year ending June 30,1940,1,293 claims were filed; o f this number,
450 were collected in full, and several are now in the process o f
collection. The total amount collected was $17,242.77. Chairman
Brannaman o f the industrial commission makes the follow ing com
ment: “ The legislation to enforce the payment o f wages is very
necessary, not only from the viewpoint o f the wage earner, but also
from that o f the grocer to whom he owes money, the competitor o f
his employer who pays wages promptly, and to innumerable other
people.”
In addition to the report o f collections in the State o f Colorado,
Commissioner Charles W . Harness, o f the Iowa Department o f
Labor, states that through the State department o f labor, acting
without specific authority, there has been collected, for the year
ending July 1, 1940, $1,878 in claims, mostly from the vicinity o f
Des Moines. A bill was presented in the Iowa legislature at the
last session, but failed o f passage; however, Commissioner Harness
is much encouraged that the bill will become law at the next legis
lature. H e writes, “ This is one piece o f legislation necessary, I
think, for every State to have.”
191
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L A B O R L A W S A N D T H E I R ADMINISTRATION,
1940
Commissioner A . P. Harvey, o f Louisiana, writes, “ W e have been
unsuccessful in the regular session o f the legislature to amend this
act to provide legal appointment o f legal services to claim
ants * * * I would suggest that the present (Louisiana) act
be amended to have the court accept small wage claims fo r collection,
without cost. * * * M y opinion is that this legislation is impor
tant to wage earners.” The Louisiana lower house passed the desired
amendments, but the bill was defeated in the senate.
Commissioner H. R. Martinson, o f North Dakota, writes, “ I believe
that legislation o f this kind is very necessary, and we have tried
fo r the past several sessions to enact legislation o f this kind.”
Mr. W ilbur Cummins, o f the Nebraska Department o f Labor,
writes, “ W e sincerely hope that this committee o f the International
Association o f Governmental Labor Officials can be o f material help
in this State and others in obtaining such legislation.”
Commissioner Forrest H. Shuford, o f the North Carolina Depart
ment o f Labor, writes, “ Legislation is highly desirable in this
State. * * * I f there were legislative provision for the State
department o f labor to act, it would give service to all workers, and
in many instances would amount to actual dollars and cents.”
Commissioner Thomas B. Morton, o f Virginia, writes, “ Soon after
assuming this office, I realized the necessity for such legislation,
and at the first session o f the legislature, which was in January o f
this year, I prepared and had introduced a bill. Although we made
a special effort, the bill was defeated.”
Many such letters as the above have been received, indicating the
interest being manifested in the passage o f wage-claim legislation.
Reports from several States where the law is now in effect show
that, where the commissioner o f labor is given authority to take
assignment o f wage claims fo r collection, thousands o f dollars have
been collected and paid to the wage earner without cost.
From letters received in answer to the question as to the objections
raised where the wage-collection bill has failed o f passage in a num
ber o f legislatures, the members o f the legal fraternity appear to be
the main objectors. This objection is probably because o f the belief
that such law would be an encroachment upon the business o f attor
neys. In the State o f Arkansas, this objection was raised when
the law under which we now operate was before the legislature. It
has been found by many attorneys in Arkansas that instead o f taking
business from the lawyers the operation o f the law really gives them
business they would never otherwise receive. In many cases where
suits are brought, the defendant finds it is important to employ an
attorney, although the amount involved may be small.
W A G E - C L A I M COLLECTION
193
One case involving $1,400 in wages owed coal miners in Arkansas
was fought through the supreme court and won by the department
o f labor. In this case attorneys appeared on both sides. However,
the wages due the individual miner were not sufficient to warrant
the employment o f an attorney, i f the State had not provided one.
(A n attachment o f the property had been made before a judgment
was obtained, as provided fo r in the model wage-claim law, and as
incorporated in the lien laws o f Arkansas.)
I f proponents o f the wage-claim legislation can be successful in
convincing the legal fraternity that the existence and enforcement
o f the model wage-claim law w ill prove a benefit instead o f an injury
to them, it is probable that we may receive their support instead o f
their opposition.
In conclusion, we would recommend that an active effort be made
after the adjournment o f this convention to get in touch with State
labor organizations and State labor commissioners, in an effort to
interest them and obtain their active support in the presentation
o f this legislation to their legislatures, and thus make an effort to
place on the statutes o f more States the model wage-collection law.
D isc u ssio n
M r . M c K i n l e y . It is evident from the letters that we have re
ceived since the writing of the report that it is practically the unani
mous opinion of State officials throughout the United States that
such a law is necessary.
In Arkansas we found from experience merely getting into court
without paying costs was not all o f it fo r the average worker. He
was just about as helpless then as before if he did not have an
attorney, so through our appropriation bill we tried to provide fo r
an attorney. They would not give us an attorney, so we call him a
statistician and use him as an attorney. Out o f 126 cases we lost
only 4 in the last year; those were cases that really involved more
o f an employer claim and it developed the claimants were contractors
rather than workers.
F or years I have seen the operation and benefit o f this law in cases
where I know that laborers would have been deprived o f wages they
had actually earned i f it had not been fo r the existence o f this law.
The amounts were so small that they were not enough to interest
an attorney.
Mr. M o r t o n (V irg in ia ). It is true that in V irginia we did make
a desperate effort to get this law on the books, but the opposition did
not come from the attorneys, because we fixed a maximum amount we
194
L A B O R L A W S A N D T H E I R ADMINISTRATION,
1940
could go into court on and made that very small. The members o f
the legislature were friendly to the cause o f labor in this, but said
that i f we undertook to collect wages not only would we be a collecting
agency but it would take all o f our time to settle individual disputes.
W e have had a lot o f complaints from people who had small
amounts involved, and without any authority we have sent our in
spectors around to employers. Nine out o f ten times we are able to
adjust the situation; when a representative o f the State government
comes around to see him the employer can generally be persuaded to
pay. Our opposition was that it would take too much time.
Miss S c h n e i d e r m a n (New Y o r k ). The New Y ork law does not leave
it to the factory inspector to do the collecting o f unpaid wages. The
New Y ork Department o f Labor has a special division, called the
division o f labor welfare. This division acts on complaints o f the
wage earners. A fte r investigating each case, the division tries to
collect as much o f the wages due to the workers by the employer as
is possible. Sometimes wages are paid in full. W here the employer
has gone out o f business or has gone into bankruptcy, a compromise
may have to be made as to the amount. There is a 5-percent service
fee which is deducted from the money sent to the employee.
Mr. M c K i n l e y . In explanation to Mr. M orton from Virginia, I
wish to say that in our State inspectors do not call. W e take the
matter up through correspondence. Then under the law there is a
hearing i f there is dispute as to the claim. It is just like it is in
court; there is nothing binding. Then the amount o f the wage due
is determined. I f it is not paid by the employer we bring suit.
There are no personal calls. Regardless o f the amount, I feel it is
just to get it fo r the worker i f it is due him. No matter how small
it is, it means just as much to the employee as it could mean to the
employer to retain it.
In one instance we had a great deal o f trouble in collecting 40 cents;
it cost the employer $5 fo r costs. But i f the employee was entitled
to it he ought to have it, and that is the view we take. W e had more
trouble over that 40 cents than we have had on larger bills. There
was not such a great amount o f work involved, only correspondence.
Mr. M o r t o n . I should like to say again that our limit is on the
maximum amount, not on the minimum.
Mr. M
cK i n l e y .
W e have $200 as our maximum.
Mr. F l y n n (New Jersey). A fter listening to this discussion o f
wage-claim collections, I want to say a word as to what New Jersey
is doing and what can be done by the coordination of activities o f
the various divisions o f the department o f labor.
WAGE-CLAIM COLLECTION
195
I feel that the collection o f wages is perhaps as successfully car
ried on in New Jersey as in any State. W e have a wage-collection
law which is administered by the wage-collection division o f the de
partment o f labor. This division has the power to accept wage claims
and to take such action as will result in judgments fo r wages owing
to workers. W e have a minimum-wage division and we have our
factory inspectors. Commissioner Toohey so directs the activities o f
all o f the divisions under his supervision that they cooperate in secur
ing law enforcement.
I f our minimum-wage investigators, in the regular course o f their
duties, find employees who have not been paid and who wish to file
wage claims, they assist the employees in filling out their claims. W e
have had a number o f cases o f employees subject to the provisions o f
directory wage orders being paid less than the rate established by
such wage orders. In many instances the employers in such cases
have, in informal hearings, made written statements to the effect that
their failure to comply with the provisions o f a directory order has
been the result o f error and not intent, and that they consider the
provisions o f a directory order as part o f their agreement o f employ
ment. W e take such statements in affidavit form as evidence o f a
verbal contract concerning wages and refer the case to the wagecollection division. I am glad to have the opportunity o f calling
attention to the results that Commissioner Toohey has been able to
obtain by coordinating the functions o f the bureaus having the ad
ministration o f the various labor laws o f New Jersey.
Miss S c h n e i d e r m a n . This collection of wages due under the min
imum-wage law is done by the division o f women in industry and
minimum wage and is a different set-up entirely from the division
o f labor welfare.
Mr. F l y n n . I was speaking on the same thing. W hen the com
missioner gets communications from employees saying so and so
owes me some money, he sends those memos to us to investigate, and
we help the employees to fill out claims right away without the neces
sity o f special investigators or lawyers.
Chairman G r a m . Y o u will probably be interested in learning some
thing of our experience in Oregon. Our wage-collection law was
passed in 1933. We have developed it to a point where we have one
man who devotes all of his time to investigating and adjusting wage
claims. We have an attorney in the department who brings all legal
actions on behalf of the workers for the collection of wages.
W e have found a good many weaknesses in our law, and I think
possibly our law is along the same line as those adopted in other
States.
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L A B O R L A W S A N D T H E I R ADMINISTRATION,
1940
Our records show that during 1939 there were 2,031 wage claims
filed with the department, which amounted to approximately $110,000.
Suit was brought on 319 o f these 2,031 claims. The amount involved
and sued fo r was $34,800. A fter they were reduced to judgment,
we found in a good many cases that the employer was insolvent and
nothing could be recovered. Once in a while we find an employer
who asks us to give him more time, as he wants to pay his bills. W e
have three such cases where employers are in arrears with their pay
rolls and are trying to get back on their feet. They do not want to
take advantage o f the bankruptcy law, but pay small amounts from
time to time on the wage claims and will eventually get paid up. On
the other hand, most o f the employers who are insolvent will take
bankruptcy.
Under our law we are permitted to charge 5 percent o f the amounts
collected fo r the workers. W e have made it a rule that on claims o f
$25 or less there is no deduction made. Claims over $25 are subject
to the 5-percent deduction.
W e find that most o f the defaulting employers are lessees o f mining
operations or what we call “ gyp po” contractors engaged in logging,
log hauling, etc.
W e have prepared two amendments to the wage-collection law to
be introduced at the next session o f the legislature, which provide that
before a mining lessee can start operating he must file with the county
clerk in the county in which he intends to operate, security in a suf
ficient amount to cover at least 2 months’ pay rolls. The same applies
to “ gyppo” loggers and log haulers. Our first idea was to compel
this type o f operator to put up a surety bond guaranteeing payment
o f wages, but upon investigation we found that no bonding company
w ill write that type o f bond, so we turned to the other method to try
to get relief. These bills are now in the hands o f our attorney gen
eral to be put into constitutional form. Whether or not we will
succeed in passing them remains to be seen.
Industrial Home Work
In d u s tr ia l H o m e W o r k
R eport o f the C om m ittee on Indu strial H o m e W o r k , ~by M o r g a n
R.
M ooney
( Connecticut D epa rtm en t o f L a b o r ), Chairman
[Read by Kate Papert]
Administrative Progress and Court Decisions
S ta te .
During the past year, definite progress has been made in the
control o f industrial home work.
The experience o f New Y ork in connection with the control o f
home work in the artificial-flower and feather industry is o f particu
lar interest. One year’s experience o f home-work regulation in this
industry led the Industrial Commissioner o f New Y ork to continue
indefinitely the order prohibiting industrial home work. Most em
ployers and workers had benefited by the order. A n increase o f a
thousand women in the artificial-flower factories in New Y ork City
in the spring season was due to the restriction o f home work. More
than 80 percent o f the employers found they could take care o f these
extra workers without enlarging space. Many employers were sat
isfied with the order because it did away with the old, inefficient, slip
shod method o f production. They found it easier to supervise work
done under one roof than in hundreds o f homes. Workers benefited
because o f shorter hours, better wages, and better working conditions.
Child labor, which was frequently found under the old system, was
eliminated. Special home-work permits may still be granted to em
ployers and home workers if the industrial commissioner finds that
home workers are unable to adjust to factory work because o f age or
physical or mental disability, or if they must stay at home to care for
an invalid. Such home workers must be paid the factory piece rates.
The New Y ork Bureau o f Industrial Home W ork, Division o f
Women in Industry and Minimum W age, cooperated with the New
Y ork regional director o f the W age and Hour Division in making
the investigation which led to the decree o f a Federal court uphold
ing the wage and hour law in its application to home workers in the
knit-goods industry.
Restitution to the home-work employees o f 11 o f the country’s
largest knitted-garment manufacturers was estimated to be more
than $250,000, to be distributed to more than 10,000 workers in a
197
198
L A B O R L A W S A N D T H E I R ADMINISTRATION,
1940
wide range o f States. W ages as low as i y 2 cents an hour instead o f
the F air Labor Standards A ct minimum o f 30 cents were found, as!
well as violations o f child-labor laws and o f sanitation. Various
schemes o f evading the law were unearthed by the investigation,
including attempts to classify the workers as independent agents.
Illinois reports that the F air Labor Standards A ct aided in elimi
nating much home work in the State. Since the Federal A ct has
been in effect, the State has licensed 79 employers o f home workers
under the State law, which is not o f the prohibitory type. O f these
firms, 18 have discontinued home work because o f the requirements
o f the Federal A ct, or have been prosecuted, or have had to make
wage restitutions.
Pennsylvania plans to make its home workers’ handbooks coin
cide with those used by the W age and H our Division. The bureau
o f women and children and the bureau o f inspection and enforcement
o f the department o f labor and industry have joined in a strict en
forcement o f the State safety laws where machines are used in in
dustrial home work, hoping thereby to eliminate the practice o f
home work.
The constitutionality o f the section o f the California law which
prohibits home work on articles o f wearing apparel fo r use o f chil
dren 10 years o f age or under was challenged. The court upheld the
constitutionality o f this specific section.
The right o f the State Industrial Commissioner o f New Y ork to
restrict the granting o f permits and licenses fo r industrial home work
after proper study and consideration was upheld as constitutional by
the New Y ork State Supreme Court in a decision supporting one p re
viously given by the New Y ork Board o f Standards and Appeals.
O f further interest is a decision o f a New Y ork court in a case
o f subterfuge. The court held that a manufacturer who indirectly
supplied wool to a woman fo r the making o f hats in her home was
guilty o f violating the home-work law, which prohibits an employer
from supplying materials for industrial home work to an unlicensed
home worker. The court overruled the employer’s contention that the
woman was not a home worker, and that she sold the finished hats to
him.
B y another New Y ork court decision, industrial home workers were
held employees within the meaning o f the unemployment insurance
law.
Development o f Control Under the Fair Labor Standards Act
The W age and H our Division has consistently held that home
workers, as well as factory workers, are subject to the Fair Labor
Standards Act. In March 1939, the Administrator issued a special
regulation requiring employers o f industrial home workers to keep
IN D U S T R I A L H O M E
WORK
199
detailed employment records. In addition to these records, the em
ployer must obtain from the W age and H our Division, and supply to
each home worker, a separate handbook in which to record information
about work done. These handbooks kept by the workers remain the
property o f the W age and H our Division. The Inspection Manual
contains a special section on industrial home-work investigation. This
includes the procedure used to determine the employer-employee rela
tionship, the special examination o f plant and other records in the
case o f home workers, home interviews, time studies to establish rates
o f pay, and the computation o f back wages due under the act.
In States which exercise some control over industrial home work,
a wide possibility o f cooperation is opened between the Federal and
State enforcing agencies.
Representatives o f both these agencies
pointed out in a recent meeting that the variations between the Federal
and State regulations call for a particularly close relationship between
the two agencies. A special committee appointed from this group made
the follow ing report :
The fact that the Federal law permits home work while a number of State
laws prohibit it entirely in certain occupations is in itself cause for confusion.
Where a Federal agency discovers a case of home work prohibited by State law,
it should be immediately reported to the State office, regardless of any action
the Federal agency may take to secure wage restitution, if one should be due.
Occurrence of home work should be reported even though no State violation is
evident.
There should be clearance between State and Federal agencies upon new
devices used by employers to evade existing laws, particularly in the field of
home work.
Where the State, as well as the Federal agency, requires the employer to keep
a record of hours worked, work performed, and wages paid to an employee,
every effort should be made to have the records identical, and careful considera
tion should be given to the possibility of having one record serve the use of
both agencies.
Exchange of information on firms which give out home work should be planned.
In States in which there is State home-work regulation, such an exchange will
build up the State as well as the Federal records for inspection purposes; where
there is no such State regulation, information contributed by Federal inspectors
may become the basis of an effort to obtain supplementary State legislation.
The W age and H our Division’s experience in the enforcement o f
the law with respect to home workers is significant, since it gives a
Nation-wide cross section o f the problem which no single State can
supply. It has begun and plans to continue a vigorous enforcement
program. In addition to the knit-goods case already cited, it has col
lected large amounts o f money for home workers— as much as $37,000,
for example, fo r approximately 2,000 workers in 1 group o f 25 closed
cases. It has had outstanding success in the courts, which, without
exception, have supported the application o f wage-and-hour standards
to home workers.
20 0
L A B O R L A W S A N D T H E I R ADMINISTRATION,
1940
The W age and H our Division has made real progress under the
authority o f the Federal act. Its very activities, however, only em
phasize the great task that is left to the States to do. The testimony
o f Federal investigators points up the facts with which every State
administrator will agree. The home-work system is devised by manu
facturers to cut labor costs through the payment o f low wages and the
elimination o f factory overhead. I t represents dangerous competi
tion to employers who operate in their own plants. Hom e workers,
intimidated by the employer, frequently falsify time records and refuse
to give inform ation to inspectors. Falsified or inadequate records can
not form a basis fo r complete wage restitution, and so, in spite o f the
law, the employer may still have a competitive advantage.
Legislative Activities
State.
During 1940, only eight legislatures were in regular session. Spe
cial sessions were held which did not deal with labor bills. No m ajor
industrial home-work legislation was introduced; however, progress
was made in the passage o f three bills which dealt with matters o f
administration. New Y ork clarified the intention o f its home-work
law not to require separate licenses fo r owners o f homes in which
home work was carried on. The New Y ork home-work employer must
now attach to all materials delivered for home-work manufacture a
label in English, bearing his name and address or place o f business.
New Jersey required all home workers and their employers in the
hand-knitting industry to maintain fo r a 2-year period a daily record
o f work done by such home workers, and required employers to pay
fo r completed work immediately upon delivery.
Federal.
Tw o amendments to the Fair Labor Standards A ct which would
have authorized the Administrator o f the W age and H our Division
to determine piece rates fo r all industrial home work and to permit
the employment o f rural home worker^ at less than the regular
minimum wage provided by law, were pending and came up for
consideration by Congress during the early part o f 1940. They
were the measures officially opposed by the home work committee o f
the International Association o f Governmental Labor Officials when
they were presented to Congress in 1939 and at that time were
defeated. The bill^ were defeated again this year and referred
back to the committee.
However, one amendment to the Fair Labor Standards A ct relating
to industrial home work which did become law embodied the prin
ciple o f the defeated measures. Section 6 (a) which sets the minimum
rates o f pay was amended to provide special procedure for wage de
termination in Puerto E ico and the V irgin Islands. In those juris-
INDUSTRIAL HOME WORK
201
dictions* the Administrator is empowered to appoint special industry
committees to recommend minimum rates o f pay. U pon their rec
ommendations, he may set piece rate^ for any operation or occupa
tion in industrial home work or may require that any piece rate set
by the employer shall yield the minimum hourly rate prescribed
by any applicable regulation.
In view o f this action, your committee is more than ever convinced
that continued efforts will be made to amend the law generally as
has been done with respect to Puerto R ico and the V irgin Islands.
W e urge the Association to be alert to this danger and to be prepared
to protest any further effort to grant exceptions to existing regula
tions or to authorize the Administrator to set home-work piece rates
or to provide fo r other administrative practices which in actual
practice have been shown to be unsound.
Summary
Believing that the pooling o f information and experience by prac
tical administrators is the best basis for the consideration o f legis
lative principles and administrative methods, your committee urges
the Division o f Labor Standards o f the United States Department o f
Labor to continue the meetings called by it from time to time for
this purpose. W e strongly recommend that such meetings should
include both State and Federal representation, since closer integra
tion o f Federal and State enforcement is mutually strengthening.
Since the authority o f the Federal act is regulatory only, we urge
that States, including those which do not at present have the home
work problem, move fo r legislation o f the prohibitory type.
In the opinion o f your committee, experience gained under the
Federal act should be utilized by States which do not have a home
work law with prohibitory powers to move for such legislation,
and by States which have such power, to exercise it as rapidly as
the interest o f good administration will permit. Continued experi
ence under all types o f regulation still leaves close and responsible
observers o f the problem convinced that, with the exception o f a
limited number o f handicapped workers for whom special provision
can be made, industrial home work as a system must be abolished.
D isc u ssio n
Miss P apert (New Y o rk ). Y ou will be interested to know we have
another court test case. One manufacturer claims that our home
work law is defective in its wording, and the law and the orders
issued thereunder apply to women and minors only and not to men.
The decision is pending. Our artificial-flower manufacturers use
litigation extensively.
C iv il S erv ice
C iv il Service
R e p o r t o f t h e C o m m it t e e o n C iv il S e r v ic e , b y E u g e n e
B. P a t t o n
(N ew Y ork
D e p a r tm e n t o f L a b o r ) , C h a irm a n
W ith the number o f Federal employees reaching the million mark,
far exceeding the W orld W ar peak, and with the State and local em
ployees raising the total o f our public employees to a probable
3,750,000, with an aggregate pay roll o f over $5,000,000,000, it is grati
fyin g to consider that since our last meeting several developments
show that efforts are being made to put public personnel administration
on a sounder basis.
The two Hatch laws have been enacted, one restricting political
activity o f Federal employees and the other that o f State employees
paid wholly or partially from Federal funds. These laws apply to all
Federal workers (except a very few high policy-determining officials)
and to between 200,000 and 250,000 State employees the same civilservice rules limiting political activity to which classified Federal
employees have been subject for many years.
The President by Executive order has placed about 25,000 Federal
positions, hitherto unclassified, under the civil service; and by revising
the schedules o f unclassified and noncompetitive positions has greatly
decreased both classifications. The Ramspeck bill, which would give
the President authority to extend the civil-service rules to the re
maining non-policy-determining unclassified Federal positions—those
put in the unclassified service by act o f Congress—has been passed
by the House o f Representatives and is now on the Senate calendar.
Pursuant to an Executive order issued in 1938, personnel officers
have been named fo r almost all the Federal departments and inde
pendent agencies. This action, it will be recalled, was recommended
at our 1937 meeting.
O f great constructive importance is the establishment o f the Presi
dent’s Committee on Civil Service Improvement, to study methods o f
im proving the caliber o f recruits to the Government service and ex
tension o f the competitive system to higher administrative positions.
A lso significant is the appointment o f the Council o f Personnel A d
ministration to coordinate the personnel policies and activities o f
Federal establishments.
202
CIVIL SERVICE
203
Civilian activities incidental to the national defense program have
placed a heavy burden on the Civil Service Commission, to which has
been given responsibility fo r recruiting the vast supply o f skilled
labor as well as clerical workers in various categories necessary to
carry out defense preparations. The Commission is working in close
cooperation with the State employment services and with representa
tives o f the various trades and professions to secure the requisite num
ber o f qualified personnel with the greatest possible speed. I t is re
assuring that Congress has exempted only a few o f the positions au
thorized under the defense legislation from civil-service requirements.
In 1939 three States—Alabama, Rhode Island, and Minnesota—
and the Territory o f Hawaii, adopted excellent civil-service laws. In
July 1940 Louisiana followed suit, raising the number o f “civil-serv
ice” States to 17. New Mexico adopted a, civil-service law covering
employees o f State institutions and 2 departments. A t the same time,
however, Arkansas took a backward step by repeal o f the law which
had been enacted in 1937, and the Michigan law was greatly weakened
by ill-advised amendments and its scope restricted to only half the
15,000 positions in the State service.
A lm ost 900 cities now have at least a portion o f their employees
under the merit system, an increase o f 200 in the last 3 years. The
two largest Canadian cities, Montreal and Toronto, are considering
the adoption o f municipal civil-service ordinances.
In addition to the States which have State-wide civil-service laws,
all the States have now set up merit-system councils for selection and
management o f personnel who are to administer unemployment com
pensation, old-age pensions, relief, and other social security laws, in
accordance with the provisions o f the 1939 amendments to the Social
Security Act. This required the States to establish personnel stand
ards fo r social security personnel, and precluded the Social Security
B oard after July 1,1941, from approving a grant o f Federal funds to
any State i f the State law does not include “ methods relating to the
establishment and maintenance o f personnel standards on a merit
basis.”
Some 15 State organizations o f public-spirited citizens dedicated
to extension and improvement o f the merit system in those States
have been formed, most o f them affiliated with the National Civil
Service R eform League. I t is to be regretted that plans fo r the
establishment o f a Canadian civil service reform league had to be
postponed because o f the war. The league has secured endorsements
o f the merit system and pledges o f assistance in extending its appli
cation in their particular fields from more than 30 other organizations
o f varying objectives— among them American Engineering Council,
American Federation o f Labor, Congress o f Industrial Organizations,
3 1 3 4 2 1 ° — 4 1 ------- 14
204
LABOR LAWS AND THEIR ADMINISTRATION, 1940
National Consumers’ League, Chamber o f Commerce o f the United
States, Junior Chamber o f Commerce, American Bar Association,
American Prison Association, and American Association o f Social
Workers.
T w o States (M ichigan and Louisiana) will vote this year on the
amendment o f their constitutions by inclusion o f a merit-system
clause. In Kansas and Texas constitutional amendments will be
considered which eliminate the present limitation o f term o f office
o f public employees.
Both m ajor political parties have pledged themselves in their
recently adopted platform s to observance and extension o f the merit
system. Many o f the State platforms contain similar planks. It is
sincerely hoped that this may be one campaign pledge which w ill be
redeemed by whichever party is victorious in the 1940 election.
There can be no plank which is less partisan, and which would be
more popular with the voters (88 percent o f whom expressed them
selves as in favor o f the merit system in a Gallup poll 4 years a g o),
or which would be more in the public interest. Reduced cost o f
government through efficient administration and lessened labor turn
over; nonpartisan as well as competent interpretation and adminis
tration o f laws; opening o f the opportunity fo r public employment
to every qualified applicant, regardless o f political backing; and a
gradual purification o f our political life, are some o f the benefits
which we may be optimistic enough to expect as the result o f a
thoroughgoing, well-administered civil-service system.
This committee is about to undertake a survey o f the existing
personnel practices in labor departments in the 48 States and in
the Canadian Provinces, and has been able to obtain the cooperation
in this project o f H. Eliot Kaplan, executive secretary o f the National
C ivil Service Reform League, who will conduct the study. I t is
hoped that the committee will be able to make a report on this
survey at the next annual meeting.
D isc u ssio n
Dr. P a t t o n . A t the meeting last year in Tulsa after the report
on civil service had been made, the secretary expressed a wish that
instead o f the committee merely carrying out, as it was authorized
to do by the resolution which appointed it, the function o f making
an annual report on the extent to which civil service had gained
new States and new cities, together with any backward steps, that
we might also make a study o f civil service in several o f the best
States and Provinces where it was in operation, with the idea o f
finding out how civil service was administered. In this way it was
CIVIL SERVICE
205
believed there might be discovered some weaknesses in the civil-service
law in States which considered themselves good.
I had a talk with Mr. Kaplan, referred to here, who did a similar
study fo r the American Bar Association recently, and because o f
his intense interest in the progress and development o f civil service
along proper lines he has very generously, as I see it, agreed that by
the time this association meets next year he w ill make a study o f
the personnel practices and administrations o f civil service which have
been set up and in operation on this continent. H e will not confine
the study as our committee was originally authorized to do, merely
to the extent o f the growth o f civil service, but w ill make an in
tensive study o f how well it is doing in the States where we now
have it. So I feel quite confident that the report next year w ill
give all o f us much more o f an inside view o f and acquaintance with
the actual operation o f civil service than we now have.
Mr. H a n e y (Minnesota). I have a particularly interesting ques
tion—to myself at least— and that is, W hy is an attempt being made
to weaken civil-service laws? The question sounds innocent on the
face of it. In labor departments we generally have the employer to
contend with, but you do not have that peculiarity in civil service.
"What is the reason for the weakening of these laws. Dr. Patton, can
you tell us anything in addition to your report ?
Dr. P a t t o n . W ell, the year we met in Topeka a reference was
made in our report to the fact that Kansas had had a State civilservice law since 1915, but that in no single year had any appropria
tion whatsoever been made* to carry it out. Something like that
has occurred frequently at different times and places. T o me the
answer is perfectly apparent; I do not see that it needs answering.
The slogan possibly attributable to W illiam L. Marcy in 1829 seems
to fit here, “ T o the victors belong the spoils.”
The Commissioner o f Labor o f Tennessee pointed out that he came
in brand new on the job and had to fire all existing factory inspectors.
In 2 years these new inspectors w ill have learned something but
they w ill have to go. The Governor o f Oklahoma had to discover
and make use o f a rear entrance to his office in order to escape the
horde o f jo b seekers that came in after each election. I do not
know why you asked that question. I f anybody else thinks o f a
different answer, let us have it.
Mr. H a n e y . N o ; that does not answer it. I am aware o f that
fact. Senators and representatives do like to get a few people on the
pay roll from their particular districts. I have been wondering fo r
some time whether civil-service departments, instead o f just a little
practical application at the time, do not adhere too much and too
206
LABOR LAWS AND THEIR ADMINISTRATION, 1940
often to a policy o f absolute rule— this is the rule and it cannot be
waived.
I say that for this reason. When a State enacts a civil-service
law one must realize that it is changing the entire procedure under
which the senators and representatives have been operating fo r a
period o f years. Many o f them are veterans in the service and a
few new ones come in each time. I f a man has been in the senate
fo r 20 years and all o f a sudden a new law comes along which says
he has nothing to do or say about who shall be hired in the State
government, he immediately sits back and tries to devise a scheme
whereby he does have something to say about it. I am wondering if
the trouble is the fact that the politicians want to have something to
say or because we have not educated the politicians over a number o f
years.
Dr. P a t t o n . I have never been a member o f the legislature, but
I would say that any man who has been in the senate 20 years, and
uses that office as a device to bring pressure in such a way as you
say, has been there 20 years too long.
I agree with you that the average member o f the legislature— a
senator, o f course, is never the average member— is never in on any
real legislation. That is drawn up and put forward by the powerful
committees o f either house; so the assemblyman feels about the big
gest thing he can do to make himself solid is to raise Mary’s salary
or get John a job. I think the public needs to be educated not to
elect that kind o f a member to the legislature, and I think in a very
large measure it is being so educated.
In practically all the States that have civil service the civil service
commission is very seriously understaffed. It is not equipped to
handle properly and expeditiously the volume of work which comes
before it. A t one time the great armory at Fourteenth Street was set
aside fo r an entire week for physical examinations fo r one examina
tion. It takes a large civil-service staff to handle that kind o f a group
properly and expeditiously.
Small Loans
Enforcem ent o f Laws Against Loan Sharks
R eport
of
th e
S p ecia l C o m m itte e
S h a rk s , b y E u g e n e
on
B. P a t t o n (N e w
th e E n fo r c e m e n t
o f L a w s A g a in s t L o a n
Y o r k D e p a r t m e n t o f L a b o r ) , C h a irm a n
[Submitted but not read]
A t the annual convention o f the International Association o f G ov
ernmental Labor Officials held at Charleston, S. C., in September
1938, the follow ing resolution was adopted:
Whereas, it is generally recognized that wage earners over the United States
are being made victims of exorbitant money interest rates charged by associa
tions and individuals commonly known as loan sharks; and
Whereas, the workers of the United States generally are looking to the
several departments of labor for active assistance relating to their welfare:
Therefore, be it R e s o lv e d , That this convention instruct the incoming Executive
Board to appoint a committee for the investigation of this practice and to make
its report to this body at its next annual convenion.
Pursuant to this resolution, a committee was appointed by the
executive board to investigate the loan-shark problem and to present
a report. The committee, through its chairman, made a preliminary
verbal report to the 1939 convention. The report was accepted, and
the committee was continued for the purpose o f completing its work
and rendering a written report, which is transmitted herewith.
P A R T I.— T H E L O A N -S H A R K PR O BL EM A N D ITS R E L A T IO N T O T H E W O R K OF
G O V E R N M E N T L A B O R OFFICIALS
Characteristics of the Loan. Shark 1
The term “ loan shark” has been applied to money lenders who make
higher charges than the law allows for loans to necessitous, ignorant,
or gullible borrowers. The term has been associated in recent years
almost exclusively with small loans to wage earners.
The loan-shark business, as it is known today, appears to have
begun in cities o f the M iddle W est somewhere around 1870. B y
virtue o f its high profits and chain-office organization, it soon spread
to all industrial cities throughout the United States. Even before
1 The Association gratefully acknowledges the assistance of Rolf Nugent, director of the
Department of Consumer Credit Studies of the Russell Sage Foundation, whose invaluable
cooperation makes possible the presentation of this report.
207
20 8
LABOR LAWS AND THEIR ADMINISTRATION, 1940
the turn o f the twentieth century, investigations o f this business had
been made in several communities. But it was not until 1909 and
1910, when the Russell Sage Foundation published The Salary Loan
Business in New Y ork City, by Clarence W . Wassam, and The Chattel
Loan Business, by Arthur H. Ham, that there was general awareness
o f the prevalence and antisocial characteristics o f loan-shark
operations.
The Ham and Wassam reports revealed that rates o f charge ranged
generally from 60 to 480 percent a year. Salary loans in sums o f
$5 and $10 bore the highest rates, and the lowest rates usually applied
to loans o f $100 or more secured by chattel mortgages on household
furniture. Since loans were usually made fo r short periods, these
high rates o f charge would not have been so disastrous fo r borrowers
i f loans had been repaid in full on maturity. However, lenders at
tempted to keep borrowers in debt either by encouraging renewals or
by arranging terms o f repayment so that it was difficult for borrowers
to repay the principal. Also, a large proportion o f borrowers became
indebted to a number o f lenders and under these circumstances
charges became so heavy that many borrowers were hopelessly
enmeshed.
Such loans were illegal under the usury statutes that were then,
as now, in force in most jurisdictions. But the penalties were gen
erally civil— ranging in severity from loss only o f the amount o f
usurious interest to loss o f the entire principal and interest. In
order to invoke these penalties it was necessary for the borrower to
prove the usurious character o f the loan and few borrowers were
able to do so. On one hand, the loan shark made p roof o f usury
difficult by advancing cash without witnesses, by incorporating all
charges in the note signed by the borrower, by requiring borrowers
to sign notes in blank, and by refusing to give receipts. On the other
hand, the borrower was usually either unaware o f his legal rights or
unable to exercise them because o f his inability to obtain legal repre
sentation or to allow his wages to be held up pending adjudication.
These disclosures, and the many local investigations that followed,
induced efforts by public officials, the press, social agencies, business
men’s associations, and labor organizations to eliminate the loan shark.
Penalties fo r usury were strengthened and certain forms o f security
were outlawed in some jurisdictions; legitimate lending agencies were
created to supply the needs upon which the loan shark thrived; and
in some States stringent regulatory statutes were enacted to govern
the lending o f small sums.
Remedial efforts have been continued during the intervening years
and substantial progress has been made toward the prevention o f
abusive practices and exorbitant charges in the small-loan field. Yet
209
SMALL LOANS
the loan shark continues to operate on a very large scale in many
areas.
Recent Loan-Shark Studies
The persistence o f the loan shark is demonstrated by a number o f
recent reports concerning high-rate lending operations.
Salary B uying in Kansas City, Missouri, by Gisler and Birkhead
(Conference on Personal Finance Law, New York* 1938) tells the
story o f a campaign conducted by the Kansas City Better Business
Bureau and by the Bar and Lawyers’ Associations o f Kansas City
to eliminate loan sharks who evaded the Missouri small-loan law by
pretending to buy future wages. Over 1,500 victims were inter
viewed. Three hundred borrowers whose loans were tabulated had
paid $16,128 fo r the use o f $5,848 for an average period o f about 14
months. Rates o f charge on individual transactions ranged from 120
to 540 percent a year. The authors reported that the success o f
salary-buyers in collecting payments was attributable to borrowers’
ignorance o f their legal rights; fear o f discharge i f employers should
be notified o f the transaction; harassment by letters, collect telegrams,
telephone calls, and personal visits to homes and places o f em ploy
ment; desire to pay their debts and to maintain credit standing;
and in some cases, fear o f personal violence.
In the same year, Finley Weaver, director o f the University o f
Oklahoma’s Bureau o f Business Research, published the results o f
his study o f money lending in Oklahoma (Oklahoma’s Small Loan
Problem, Oklahoma City, Bond Printing Co., 1938). Analyzing 520
loans made by a large number o f lenders throughout the State, he
reported rates o f charges for various size-classes o f loans as fo llo w s:
Amount of loan
Average yearly
rate of charge
( percent)
$10 or less______________________________________
$11 to $20______________________________________
$21 to $30______________________________________
$31 to $40______________________________________
$41 to $50______________________________________
$51 to $75______________________________________
$76 to $100_____________________________________
$101 to $150_____________________________________
Over $150_______________________________________
325
324
242
193
157
108
86
58
56
A ccording to Dr. Weaver, there were approximately 300 unregu
lated loan offices in Oklahoma that advertised and openly offered their
services to the public, in addition to which there were many lenders
without established places o f business. He concluded that “ wage
earners and salaried workers in Oklahoma are intolerably exploited
by a system o f unregulated loan companies.”
Similar conditions were revealed by studies o f money lending in
21 0
LABOR LAWS AND THEIR ADMINISTRATION, 1940
South Carolina and in the city o f Minneapolis. In a pamphlet en
titled “ The Small Loan Problem in South Carolina” (bulletin o f the
University o f South Carolina, March 1940), W illiam Hays Simpson
o f Duke University reported average rates o f charge fo r a sample
o f 1,042 loans made in South Carolina as follow s:
A m o u n t o f lo a n
A v era g e y e a r ly
r a te o f ch a rg e
N u m b e r o f lo a n s
(p e r c e n t )
$10 or less____________________________________ 672
$10.01 to $25.00______________________________ 283
$25.01 to $50.00_______________________________ 74
Above $50.00_________________________________
13
463
289
197
97
Three white and fifteen colored borrowers had paid rates in excess
o f 1,000 percent a year.
The results o f the Minneapolis study were published in the Report
o f an Investigation o f H igh-Rate Loan Companies in Minneapolis,
by Charles W . R oot (Better Business Bureau o f Minneapolis, 1940).
Mr. Root interviewed 414 borrowers from 84 high-rate loan companies.
Interest rates ranged from 33 to 1,350 percent a year, averaging 218
percent, without considering the accelerating effect o f renewals. More
than half o f these borrowers had been indebted to the same lender
fo r at least 3 years, and 1 out o f 20 had been indebted fo r 10 years
or longer.
Extent of Loan-Shark Operations
Accurate inform ation concerning the extent o f loan-shark opera
tions cannot be had. There are, o f course, no official figures, and be
cause illegal lenders naturally surround their business with as much
secrecy as possible, estimates are exceedingly difficult. The most reli
able pertinent figures are the estimates o f loan balances o f “ unregulated
lenders” developed by the Russell Sage Foundation on the basis o f in
tensive investigations in certain areas and an enumeration o f highrate loan offices throughout the United States.
The Foundation used the term “ unregulated lenders” to designate
not only illegal lenders but also lenders operating with full legal sanc
tion under enabling acts that permit what it considers to be excessive
charges for small loans. The Foundation’s estimates were, however,
broken down by States; and i f we exclude figures fo r States in which
lending at very high rates was authorized by statute, the remaining
figures represent loan balances o f loan sharks as defined in this report.
The follow ing figures represent the Foundation’s estimates o f loan
balances o f loan sharks in the United States at the close o f the years
indicated.2
2 Figures for 1923, 1929, 1933, and 1937 were adapted from figures given in Consumer
Credit and Economic Stability, pp. 398, 401. Figures for 1939 were provided by the
Department of Consumer Credit Studies of the Russell Sage Foundation.
211
SMALL LOANS
Y ear
L o a n b a la n ce
1923_____________________________________ $21,300,000
1929 ____________________________________ 49, 500, 000
1933____________________________________ 37, 300, 000
1937 ____________________________________ 69, 000, 000
1939_____________________________________ 71,700,000
These figures indicate clearly that loan-shark operations have grown
rapidly between the close o f 1923 and the close o f 1939. During this
period loan sharks have been driven out o f a number o f States by the
enactment and aggressive enforcement o f stringent regulatory laws.
But the very rapid growth o f illegal lending in other areas has more
than offset this loss o f operating territory.
The total loan balance o f loan sharks is small as compared with the
total loan balance o f legitimate agencies which lend to consumers.
Personal loan departments o f banks, credit unions, industrial banking
companies, and regulated small-loan companies have supplanted loan
sharks in many areas and have satisfied a m ajor part o f the demand
for loans by wage-earners in other areas. However, the total charges
assessed by loan sharks are still substantial as compared with the total
charges o f legitimate institutions. The figures given in table 1, sup
plied to your committee by R o lf Nugent o f the Russell Sage Foundation,
undertake to compare the loan balances and charges o f the principal
agencies which lend to wage earners.
T a b l e
1.—
L o a n ba la n ces and c h a rg e s o f c e r ta in c o n s u m e r loa n a g e n cie s in 1 9 3 7
Estimated outstanding
loans at close of 1937
Estimated charges col
lected during 1937
Type of agency
Amount
Percentage
of total
Amount
Percentage
of total
Personal loan departments of banks.__________ $216,000,000
94,000,000
Credit unions_______________________ ____ _
Industrial banking companies------------------------ 221,000, 000
351,000, 000
Regulated small-loan companies_____________
69, 000,000
Loan sharks________________________________
22.7
9.9
23.2
36.9
7.3
$22,000,000
9,000, 000
34,000,000
108, 000, 000
90, 000, 000
8.4
3.4
12.9
41.1
34.2
951,000, 000
100.0
263,000, 000
100.0
Total________________________________
It will be noted that while loan sharks accounted for only slightly
more than 7 percent o f the total loan balance o f the agencies covered,
their charges constituted more than a third o f the total charges o f the
same agencies. Since loan sharks deal almost exclusively with wage
earners while legitimate consumer loan agencies lend not only to
wage earners but to many other occupational classes, it is probably
safe to conclude that the illegal charges collected from wage earners
by loan sharks are about as great as the total charges collected from
wage earners by the legitimate agencies covered by this table.
212
LABOR LAWS AND THEIR ADMINISTRATION, 1940
Geographic Distribution o f the Loan-Shark Business
A s already indicated, the extent o f loan-shark operations differs
materially in various jurisdictions. In some States, illegal lending
has been eliminated or minimized by stringent regulatory legislation
and vigilant administration. In other States, loan sharks continue
their business with comparatively little restraint in spite o f the
illegality o f their contracts. These differences make it desirable to
supplement the national totals given heretofore with figures fo r
individual States or groups o f States.
Because important changes have occurred since 1937, the latest year
fo r which loan-balance figures were published by the Russell Sage
Foundation, we have obtained from the Foundation’s Department o f
Consumer Credit Studies its previously unpublished State estimates
fo r the close o f the year 1939, which are given in the succeeding pages.
The bulk o f the loan-shark business is carried on in 12 States which
lack special regulatory laws governing the small-loan business. In
these States restrictions upon interest charges are imposed only by
the usury laws, which usually provide inadequate penalties and rely
upon individual borrowers rather than public prosecutors to defend
against the collection o f usurious interest charges. Since borrowers
are generally unaware o f their legal rights, unable to secure adequate
legal representation, or unable to have payment o f their wages held
up pending litigation, the effectiveness o f the usury laws as a deter
rent to extortionate charges is limited. Consequently in these States
most loan sharks conduct their business openly and on a large scale,
maintaining offices in prominent business locations and soliciting
borrowers through the medium o f the radio, billboards, handbills,
and advertising in newspapers and telephone directories.
Estimates o f the loan balance o f loan sharks in these States are
given in table 2.
T able 2 .— E s t i m a t e d loa n b a la n ces o f loa n s h a r k s in S t a t e s w h ic h la ck s p ec ia l
r e g u l a t o r y s m a ll-lo a n la w s, a t c lo s e o f 1 9 3 9
State
Loan bal
ance
Per capita
loan bal
ance-1930
urban pop
ulation
Idaho _______________
TCn.nsftR_______________
Montana_____ ________
Nevada_______________
North Carolina____ ___
North Dakota_________
Oklahoma____________
$700,000
3,000,000
1,200,000
300.000
3.400.000
600.000
7.200.000
$5.41
4.11
6.63
8.71
4.20
4.41
8.76
State
Per capita
loan bal
Loan bal ance-1930
ance
urban pop
ulation
South Carolina_________ $1,800,000
South Dakota__________
700.000
Texas.......... .................. . 23,000,000
Washington..... ....... ....... 4,200,000
Wyoming....... ............. .
600.000
Total____________
46, 500,000
$4.85
5.35
9.63
4.75
7.13
6.98
A considerable part o f the remainder o f the loan-shark business
is situated in nine jurisdictions that have regulatory small-loan
laws which fo r various reasons are not fu lly effective. In these
213
SMALL LOANS
areas illegal lenders operate by means o f evasive devices, by virtue
o f legal loopholes, or in sheer defiance o f the regulatory law and
prosecuting authorities.3 Estimated loan balances o f loan sharks
in these jurisdictions are given in table 3.
T a b l e 3 . — E s t im a t e d loa n ba la n ces o f loa n s h a r k s in S t a t e s w h ic h h a v e p a r tia lly
e f f e c t iv e r e g u l a t o r y s m a ll-lo a n l a w s , a t c lo s e o f 19S9
State
Loan
balance
Alabama______________ $3,000,000
Arkansas______________
500.000
300.000
Delaware-- __________
District of Columbia____ 1, 200,000
Florida................. .......... 2,000,000
Georgia............................ 4,000,000
Per capita
loan bal
ance—1930
urban
population
$4.03
1.31
2.44
2.47
2.63
4.47
Per capita
loan bal
ance—1930
urban
population
State
Loan
balance
Kentucky
Mississippi _
Nebraska. . . .
Tennessee................... ....
$800,000
500.000
400.000
2,500,000
$1.00
1.48
.82
2.79
T o ta l................... 15,200,000
2.57
In the remaining States, the small-loan business is subjected to
effective regulatory legislation. Nevertheless, these areas are not
completely free from loan-shark operations. In some jurisdictions,
carelessness or lack o f interest on the part o f law-enforcement au
thorities has permitted illegal lenders to gain a foothold. A n d in
ethers, legislative interpretations o f evasive devices by the courts
have prevented eradication o f certain types o f high-rate lenders by
prosecuting officials. In large industrial cities, the job o f protecting
small borrowers from abusive loan contracts is a trying one even
under the most favorable circumstances. Delays in obtaining in for
mation concerning illegal lending activities, difficulties o f obtaining
adequate evidence or testimony to support prosecutions, devices that
give the color o f legality to usurious contracts, and defense counsel
skilled in obstructive tactics frequently handicap the most vigorous
and persistent prosecutors. Consequently a fringe o f illegal lending,
which can be minimized but not completely eradicated, persists in
most industrial metropolises.
A very large part o f the total urban population o f the United
States falls in the jurisdictions which have effective regulatory stat
utes. Consequently, although the total amount o f illegal lending
is substantial, the per capita loan balance is very low. The Russell
Sage Foundation estimates the outstanding loans o f loan sharks in
these jurisdictions roughly at 10 million dollars or 19 cents per
capita o f urban population.
Comparisons o f the summary figures fo r these three classes o f
jurisdictions indicate the importance o f carefully drawn regulatory
3
In some instances, such operations are carried on in connivance with prosecuting
officials. See, for instance, the recent exposures in Tennessee where a prosecutor was
retained as counsel for loan sharks.
214
LABOR L A W S AND THEIR ADMINISTRATION,
1940
small-loan laws to the solution o f the loan-shark problem.
summary figures are given in table 4.
T able
4 .— E s t im a t e d
These
loa n ba la n ces o f loa n s h a r k s b y c la s s e s o f ju r is d i c t io n , at
c lo s e o f 19S9
Per capita
loan
balance1930 urban
population
Class of jurisdiction
Loan balance
States which have no regulatory small-loan laws. _______ ____ __________
States which have partially effective small-loan la w s_________ _______ .
States which have effective small-loan laws__________ __________ ___ ____
$46,500,000
15,200,000
10,000,000
$6.71
2.64
.19
Total___________________ __________________________ ______ ______ _
71, 700,000
1.04
Legal Authorisation To Charge Excessive Interest Rates
This report is concerned prim arily with the operations o f loan
sharks, defined as lenders who charge more than the law allows. But
this legal distinction is to some extent artificial. In several juris
dictions, as has been previously noted, money lenders may legally
charge rates approaching those charged by lenders who operate, else
where beyond the pale o f the law.
The most notable instances o f excessive charges made with full
statutory authority occur in Colorado and New Mexico. Under the
Colorado Money Lenders A ct o f 1935 a fee o f $10 may be charged for
a loan o f $50 payable in 10 weekly installments, which represents an
interest rate o f 189 percent a year; and similar rates o f charge are
permissible on many other classes o f loans. Under the Colorado
Industrial Bank A ct there is no restriction upon charges for secured
loans, and contracts on which rates o f charge exceed 200 percent a
year have been common among some institutions operating under
that act. A small-loan law enacted in New Mexico in 1939 permits
charges approximating those o f the Colorado Money Lenders Act.
Somewhat similar conditions exist in other States. In Oregon,
the small-loan law permits licensed lenders to make a minimum
charge o f $1 fo r loans, and this provision has led several lenders to
specialize in loans o f $5 and $10 at rates o f charge ranging from
120 to 240 percent a year. The M otor Vehicle Finance A ct o f Oregon
and the Loan and Investment A ct o f Missouri permit lenders to
charge fees fo r insurance on automobiles without issuing a policy
to the borrower. When applied to small loans fo r short periods,
these fees result in very high rates o f charge. In California and
Washington a few lenders operating under the Industrial Loan Com
pany A c t s 4 o f these States have been able to manipulate fees per4
These are not to be confused with statutes based upon the Uniform Small Loan Law.
Washington has no regulatory small-loan law, but California has an excellent law.
SM ALL LOANS
215
mitted by these statutes to yield interest rates in excess o f 75 percent
a year fo r certain classes o f loans.
Loan Sharks and the Work of Governmental Labor Officials
The purpose o f the United States Department o f Labor, as ex
pressed in the act which created that Department in 1913, was three
fo ld : (1) T o promote the welfare o f wage'earners; (2) to improve
their working conditions; and (3) to advance their opportunities for
employment. The same general aims, if not the same phraseology,
have been incorporated in the legislation creating labor departments
in other jurisdictions, and the work o f governmental labor officials
may therefore be said to be directed generally toward the three ob
jectives specified in the Federal act.
The first o f these objectives— promotion o f the welfare o f wage
earners— can be approached from two directions. The classical fig
ure, which depicts the prices o f farm products and prices o f goods
purchased by farmers as blades o f a scissors, is as applicable to labor
as to agriculture. Real incomes o f wage earners, like real incomes
o f farmers, may be increased as effectively by a decrease in costs of
living as by an increase in cash incomes. Nevertheless, both by statu
tory direction and administrative inclination, the work o f govern
mental labor officials has in the past been devoted primarily toward
protection and improvement o f wage earners’ money incomes.
This was a perfectly natural tendency. It was not that the prob
lems o f the worker as a consumer were overlooked. The cost-ofliving studies o f the United States Bureau o f Labor Statistics are
evidence o f the general recognition o f the importance o f the price
level o f consumers’ goods to the welfare o f wage earners. Rather, the
striking fact o f the worker’s unequal bargaining position in the labor
market focused attention upon the problems which he faced in his
capacity as a producer. Moreover, labor was defined in terms o f
its contribution to production. Thus, the problems o f wage earners
as producers were unique, while the problems o f wage earners as
consumers were in varying degrees common to other occupational
classes.
The growth o f the consumer movement during recent years has
brought increased interest in labor’s consumer problems, both within
organized labor and among governmental labor officials. But most
o f the primary lines o f attack upon these problems— such as elimina
tion o f monopolistic business practices, requirement o f standard label
ing, assurance o f honest and informative advertising, and prom o
tion o f consumers’ cooperatives— lead necessarily into fields that are
not only highly controversial but also far beyond the immediate
area o f responsibility o f public labor officials.
216
LABOR LAWS AND THEIR ADMINISTRATION, 1940
The loan-shark problem is equally a consumer problem. But it
impinges more directly than any other consumer problem upon the
area in which governmental labor officials have a specific interest
and a special competence. First, the loan shark preys primarily
upon wage earners; consequently, of all consumer groups, labor has
the most vital interest in the loan-shark problem. Second, the loan
shark relies heavily upon assignments and garnishments of wages
to enforce collections. Thus, interest charges which have no legal
validity are being collected from wage earners by means of pay-roll
deductions—a process which governmental labor officials have zeal
ously guarded against abuse. Finally, there is the obvious parallel
between the unequal bargaining position of the worker in the labor
market and in the market for small loans.
The wage earner seeking employment and the wage earner seek
ing loans are frequently driven by their necessity to accept whatever
bargain is offered. For this reason laws have been enacted to pro
tect the wage earner both in the labor market and in the small-loan
market. But in each case protective legislation is not enough. The
existence o f public labor departments recognizes the need for admin
istrative officials to enforce labor laws. Without such assistance the
wage earner may be unable to assert his legal rights in the labor
market. In the small-loan market, however, he is even more at a
disadvantage. The wage-earner borrower is frequently unaware o f
his legal rights; and even if aware o f them, he is generally prevented
from asserting them by his inability to obtain adequate legal repre
sentation, by his fear of loss of employment if his wages are attached,
by his fear o f the lender’s persistent collection efforts, or by his in
ability to have his wages held up pending litigation.
Here, then, is a field in which governmental labor officials could
render a much-needed service toward the promotion of the welfare
o f wage earners.
Suggested Program for Protecting Wage-Earner Borrowers
It has been noted that the loan-shark problem differs in various
jurisdictions. Loan-shark operations are extensive in States which
lack general regulatory statutes governing the small-loan business,
while such operations have been minimized or eliminated where ade
quate small-loan laws are in force. These observations point clearly
to the need for the enactment of regulatory legislation in many
jurisdictions and for the strengthening of existing small-loan statutes
in others. Similarly, the present possibility of charging extremely
high interest rates with full legal sanction calls for legislative reme
dies in some jurisdictions.
It would appear to be the clear duty of public officials charged with
the promotion of the welfare of wage earners to support any move-
SMALL LOANS
217
ment for the enactment of regulatory small-loan legislation which,
on the basis o f experience in other States, promised to be economically
feasible and socially useful. Your committee believes, however, that
members o f this Association might for the present leave to others
the work o f initiating remedial legislation. The formulation of an
adequate regulatory small-loan law involves controversial issues and
technical questions upon which this Association will be poorly
equipped to pass judgment until further experience has been
accumulated.
Without denying the importance of legislative action, your com
mittee believes that an even greater field of immediate usefulness
for governmental labor officials lies in the defense of wage-earner
borrowers against illegal claims—in other words, in the enforcement
o f existing statutes designed to protect the small borrower. This
is an activity for which public labor departments are particularly
well qualified. No one could question the propriety of such a program
or its pertinence to the purposes for which public labor departments
were established.
In States which lack general regulatory small-loan statutes, no
public officer is specifically charged with the duty of defending small
borrowers against illegal claims. It is true that in certain com
munities within these States legal aid societies, better business bu
reaus, bar associations, and other private agencies have rendered in
estimable service in protecting small borrowers. But these services
are rarely State-wide, and they are generally unable to maintain a
sufficiently continuous or sufficiently broad service to have much effect
upon the loan-shark business. As a result many wage-earners in
these areas are mercilessly exploited by money lenders. Under such
circumstances, the responsibility for the defense of wage-earner bor
rowers against illegal loan contracts would seem to fall directly upon
public labor departments.
In States which have enacted general regulatory statutes, State
banking-department official^ are generally charged with their admin
istration and enforcement. Nevertheless, these administrative offi
cials, as well as the attorneys general and county prosecutors who
enforce criminal statutes generally, must depend upon complaints
from borrowers and evidence supplied by borrowers to put the lawenforcement machinery in action. Borrowers’ ignorance of the law,
their hesitation to testify in criminal actions, and their difficulty of
supplying satisfactory evidence frequently delay prosecutions. Those
delays permit illegal lenders to gain a strong foothold and to obtain
a substantial income which can be diverted to legal defense or
political protection.
218
LABOR LAWS AND THEIR ADMINISTRATION,
1940
Under these circumstances governmental labor officials could per
form the important functions of calling illegal lending activities
to the attention o f the appropriate officials, o f assisting in the accu
mulation of evidence, and of encouraging and supporting the ener
getic use by law-enforcement agencies of such remedies as are
available against loan sharks. Your committee has been assured
by representatives of the National Conference of State Small Loan
Supervisors, an organization of State banking-department officials
charged with the administration of small-loan laws, that the coopera
tion of public labor departments would not only be welcomed but
would also be exceedingly useful. There is ever}r reason to believe
that attorneys general, local prosecutors, and the courts themselves
would also welcome the cooperation o f public labor departments in
the enforcement of small-loan statutes.
Part II of this report, which is in the nature of a technical ap
pendix, will deal with the legal weapons that are available in various
States for defending wage-earner borrowers against claims for
usurious loans.
P A R T II.— L E G A L W E A P O N S F O R P R O T E C T IN G T H E W A G E -E A R N E R B O R R O W E R
In the absence of statutory limitations a money lender may enforce
any loan contract, no matter how oppressive, if it is properly executed
and delivered. Almost universally, however, statutes have been en
acted which are designed to protect borrowers in general or specific
classes of borrowers from excessive interest charges or from other
forms o f overreaching by the lender. The protections to borrowers
provided by these laws fall into two general classes: (1) Remedies
available to the borrower himself; (2) remedies available to the State.
Remedies Available to the Borrow er
The principal types of laws which provide individual borrowers
with legal remedies against oppressive loan contracts are: (1) The
usury laws; (2) wage-assignment laws; (3) chattel-mortgage laws;
(4) property and wage-exemption laws; and (5) regulatory smallloan laws. Within the United States, many jurisdictions lack one or
another of these types of statutes, but every jurisdiction has enacted
some of them, and in a large number of jurisdictions statutes of all
five types are in force. Each o f these types o f laws will be described
in turn, and citations will be given to existing statutes in each
jurisdiction.
T H E USURY LAW S
The usury laws, in general, fix a maximum lawful rate of interest
for the loan or forbearance of money and prohibit the taking of
219
SMALL LOANS
any interest in excels of this rate. Interest in excess of the lawful
rate is known as usury. The usury statutes o f various jurisdictions
differ widely, however, with respect to remedies given to borrowers
and the penalties for violation.
Some usury laws merely provide the borrower with a defense
against a {suit by the lender for the recovery of so much of the interest
as is unlawful. Such statutes merely permit the borrower, when
sued, to prevent the collection of interest beyond the lawful rate,
but do not interfere with the lender’s right to collect his principal
with legal interest. Some usury laws provide a defense for the bor
rower against the recovery of any interest upon a usurious contract.
And still others provide a defence against enforcement of either
principal or interest, by declaring usurious contracts void.
The usury laws not only provide the borrower with defenses
against suits initiated by the lender, but usually give him in addition
certain rights where usurious interest has already been paid. Some
statutes permit borrowers to apply the amount of usurious interest or
the total amount of interest already paid, or multiples o f these
amounts, toward reduction of the principal sum due the lender. Some
statutes permit borrowers to recover from the lender the amount
of usurious interest or the total amount o f usurious interest already
paid, or multiples of these amounts. Still others permit the borrower
to recover all previous payments whether for principal or interest.
Table 5 cites the usury laws of various jurisdictions in the United
States and summarizes their provisions with respect to defenses
against suits by lenders and recoveries of payments previously made
by borrowers.
T a b l e 5 . — U su ry law s o f various jurisdictions in the United S ta tes
Jurisdiction
Alabama________
Arizona_________
Arkansas________
California_______
Colorado________
Connecticut.........
Delaware_______
Citation
Ann. Code 1928, (1936 All interest is uncollect
Cum. Supp.), ch. 308,
ible.
sec. 8567.
Rev. Code (Courtright’s ___ do_______________
Supp. 1936), ch. 37, secs.
1884, 1886.
Pope’s Digest of Stats.,
1937, vol. 2, ch. 112, secs.
9401, 9402. See also
Const., art. 19, sec. 13.
Gen. L. 1937, vol. 1, act
3757, secs. 2, 3. See also
Codes, Laws, and Const.
Amends., 1935, Supp.
(Const. Amends.), art.
20, sec. 22, p. 2146.
No usury law___________
__ Gen. Stats., 1930 Rev., vol.
2, tit. 46, ch. 241, sec.
4736.
__ Rev. Code 1935, ch. 77,
art. 1, sec. 3101 (1).
3 1 3 4 2 1 ° — 41 -------- 15
Defenses against suits
by lender
Principal and interest
are uncollectible.
All interest is uncollecti
ble.
Remedies where usurious
interest has been paid
All interest paid may be
credited as payment
on principal.
All interest paid may be
credited as payment
on principal or re
covered by borrower to
extent such payment
exceeds principal.
Borrower may recover
treble excess interest
paid.
Principal and interest
are uncollectible.
Excess interest is uncol
lectible.
Borrower may recover
excess interest paid.
220
LABOR LAWS AND THEIR ADMINISTRATION, 1940
■Fa b l e
5 .— U su ry law s o f various jurisdictions in the United S ta tes — Continued
Defenses against suits
by lender
Remedies where usurious
interest has been paid
District of Columbia___ Code 1929, tit. 17, ch. 1,
secs. 3, 4, 5.
All interest is uncollect
ible.
Comp. Gen. L. Ann. 1937,
vol. 3, div. 4, tit. 5, ch.
V, secs. 6939, 6942, 7903.
All interest is uncollecti
ble; if interest rate ex
ceeds 25 percent per
annum, principal is
also forfeited.
All interest is uncollecti
ble.
All interest paid may be
credited as payment
on principal or bor
rower may recover ex
cess interest paid.
Borrower may recover
double the interest
taken or contracted for.
Jurisdiction
Florida_______________
Citation
Georgia----------------------- Ann. Code 1935, bk. 17,
tit. 57, ch. 57-1, secs.
57-112, 57-113.
Hawaii...........................
Rev. L. 1935, tit. 25, ch.
232, sec. 7053.
Idaho________________
Ann. Code 1932, vol. 2,
tit. 26, ch. 19, sec. 261907.
Smith-Hurd Ann. Stats.
1935, ch. 74, sec. 6.
Indiana_______________ Burns, Ann. Stats. 1933,
vol. 5, tit. 19, ch. 20, sec.
19-2004.
Iowa............................... Code 1935, tit. 23, ch. 418,
sec. 9407.
Illinois_______________
do.
All interest is uncollecti
ble and lender forfeits
twice the excess in
terest contracted for.
All interest is uncollecti
ble.
Excess interest is un
collectible.
All interest is uncollecti
ble and 8 percent of
any unpaid principal,
balance is forfeited,
but borrower must
pay such forfeited
amount to county
school fund.
Excess interest is uncol
lectible and lender for
feits a sum, to be de
ducted from principal
and lawful interest,
equal to excess interest
contracted for.
Kansas
Ann. Gen. Stats. 1935, ch.
41,secs. 41-102, 41-103.
Kentucky.
Carroll’s Ky. Ann. Stats. Excess interest is uncol
Baldwin’s 1936 Rev.,
lectible.
ch. 72, sec. 2219.
Dart’s Ann. Civ. Code ____do________________
1932, bk. 3, tit. 12, ch. 3,
art. 2924.
No usury law___________
Bagby’s Ann. Code 1924,
do.
vol. 1, art. 49, sec. 4.
Ann. Laws 1933, vol. 3,
do.
ch. 107, sec. 3, and vol. 4,
ch. 140, sec. 90. See also
same section in pocket
supp. 1939.
Ann. Stats. 1937, vol. 14, All interest is uncollecti
tit. 19, ch. 176, sec. 19.12.
ble.
Mason’s Stats. 1927, vol. 2, Principal and interest
ch. 51, secs. 7037, 7038.
are uncollectible.
Louisiana.
Maine_______
Maryland____
Massachusetts.
Michigan..
Minnesota.
Mississippi.
Ann. Code 1930, vol. 1,
ch. 37, secs. 1946,1947.
All interest is uncollect
ible; if interest rate ex
ceeds 20 percent a year
principal is also uncol
lectible.
Missouri.
Ann. Stats. 1932, vol. 7,
ch. 14, secs. 2842, 2843,
pp. 4630, 4632. (Cum.
Ann. pocket part, 1939).
Excess interest is uncol
lectible.
Montana.
Ann. Rev. Code 1935,
vol. 3, ch. 124, sec. 7727.
All interest is uncol
lectible and lender for
feits double the inter
est contracted for.
All interest paid may be
credited as payment
on principal, or bor
rower may recover all
interest paid.
All interest paid may be
credited as payment
on principal.
Borrower may recover
three times the in
terest paid.
All excess interest paid
may be credited as
payment on principal.
All excess interest paid
may be deducted from
principal and legal
interest recoverable,
and borrower may in
some cases recover
double the excess in
terest contracted for.
Borrower may recover
excess interest paid.
Do.
Do.
Excess interest paid
may be credited as
payment on principal
in certain types of
loans.
Borrower may recover all
interest paid, but half
amount recovered must
be paid to county for
use of common schools.
Borrower may recover
all interest paid; if in
terest rate exceeds 20
percent a year he may
also recover all princi
pal paid.
Excess interest paid may
be credited against
principal and legal
interest recoverable, or
may be recovered by
borrower.
Borrower may recover
double the interest
paid.
SMALL LOANS
T
able
5 .—
221
U su ry laws of various jurisdictions in the United S ta tes — Continued
Citation
Defenses against suits
by lender
Nebraska.
Comp. Stats. 1929, ch. 45,
art. 1, sec. 45-105.
All interest is uncol
lectible.
Nevada________
Ann. Comp. Laws 1929,
vol. 2, sec. 4323.
No usury law .
Rev. Stats. 1937, vol. 2,
tit. 31, ch. 1, sec. 31-1-3.
Excess interest is un
collectible.
Jurisdiction
New Hampshire.
New Jersey-------
All interest is uncollect
ible.
New Mexico___
Courtright’s Ann. Stats.
(Supp. 1938), ch. 89, sec.
89-110.
All interest is uncollect
ible and lender forfeits
amount equal to ac
crued interest at rate
contracted for.
New York____
McKinney’s Ann. Consol.
Laws, bk. 19, art. 25,
secs. 372, 373.
Ann. Code, 1939, ch. 44,
sec. 2306.
Principal and interest
are uncollectible.
North Carolina.
North Dakota..
Ohio_________
Comp. L. 1913 (1913-1925
Supp.), ch. 60, art. 3, sec.
6076.
Page’s Ann Gen. Code,
bk. 5, sec. 8306.
Oklahoma____
Ann. Stats. 1937, tit. 15,
ch. 6, sec. 267. See also
Const., art. 14, sec. 3.
Oregon_______
Ann. Code 1930, vol. 3,
tit. 57, ch. X II, sec. 571203.
Pennsylvania. _
Purdon’s Ann. Stats., tit.
41, sec. 4.
Gen. L. 1938, ch. 485, sec.
4.
Rhode Island,,
South Carolina.
Code 1932, vol. 3, ch. 142,
art. 1, sec. 6740.
South Dakota,
Code 1939, vol. 3, sec.
38.0111.
Tennessee____
Williams’ Ann. Code 1934,
vol. 5, tit. 2, ch. 2, secs.
7310, 7315. See also
Const., art. 11, sec. 7.
Vernon’s Stats. 1936, tit.
79, arts. 5071, 5073. See
also Const., art. 16, sec.
11.
Ann. Rev. Stats. 1933, tit.
44, secs. 44-0-6, 44-0-7.
Texas________
Utah______
Vermont__
Virginia___
Washington.
Pub. L. 1933, tit. 32, ch.
282, sec. 7133.
Ann. Code 1936, tit. 54,
ch. 230, secs. 5554, 5555.
Remington’s Ann. Rev.
Stats., vol. 8, tit. 46, sec.
7304.
All excess interest paid
may be credited as pay
ment on principal.
Twice interest paid plus
accrued and unpaid
interest may be cred
ited as payment on
principal, or borrower
may recover three times
interest paid.
Borrower may recover
excess interest paid.
Double the interest paid
may be recovered by
borrower or credited
as payment on prin
cipal.
Borrower may recover
do.
double the interest
paid.
Excess interest is uncol Excess interest paid may
be credited as payment
lectible.
on principal.
All interest is uncollect Double the interest paid
ible and lender forfeits
may be recovered by
twice interest con
borrower or credited
tracted for.
as payment on prin
cipal.
Principal and interest Borrower may deduct
are uncollectible but
sums paid lender from
borrower must pay un
amount payable to
school fund.
paid principal to coun
ty school fund.
Excess interest is uncol Borrower .may recover
excess interest paid.
lectible.
Principal and interest Borrower may recover
are uncollectible.
principal and interest
paid.
All interest is uncollect Double the interest paid
ible.
may be recovered by
borrower
or
offset
against principal.
do.
All interest paid may be
recovered by borrower
or offset against princi
pal.
Excess interest is uncol Borrower may recover
excess interest paid.
lectible.
All interest is uncollect
ible.
Borrower may recover
double the interest
paid.
Principal and interest
are uncollectible.
Borrower may recover
any payment for prin
cipal or interest.
Borrower may recover
excess interest paid.
Do.
Excess interest is uncol
lectible.
All interest is uncollect
ible.
All interest is uncollect
ible and lender forfeits
in addition interest
accrued at rate con
tracted for.
Excess interest is uncol
lectible.
All interest is uncollect
ible.
Code 1937, ch. 47, art. 6,
sec. 4628 (6), 4631 (9).
Stats. 1937, tit. 14, ch. 115,
secs. 115.06,115.07.
Wyoming___
Ann. Rev. Stats. 1931, ch. ___ do________________
58, sec. 58-105.
All interest paid may be
credited as payment on
principal.
All interest is uncollect
ible.
Wisconsin, _ .,
West Virginia.
Remedies where usurious
interest has been paid
Twice the interest paid
plus accrued and un
paid interest may be
credited as payment
on principal.
Borrower may recover
excess interest paid.
Borrower may recover
treble the excess in
terest paid.
All interest paid may be
credited as payment on
principal.
222
LABOR LAWS AND THEIR ADMINISTRATION, 1940
In addition to the foregoing remedies the usury laws sometimes
authorize equitable relief at the instance of the borrower. The usury
statutes of Kentucky, Minnesota, New York, Utah, Virginia, and
West Virginia expressly give borrowers the right to have collections
of usurious loans enjoined; and the usury statutes of Arkansas, Ken
tucky, Minnesota, New York, and Utah give borrowers the right to
compel surrender and cancelation of usurious contracts. Equitable
relief is probably available without express statutory authority where
the borrower is able to show that the loan contract is unconscionable
and that it should be revised.5 It is probable also that under declara
tory judgment statutes individual borrowers in practically all in
stances may secure affirmative relief from usury in the courts.6 In
deed relief comparable to a declaratory judgment may be obtained
under some usury laws,7
W A G E -A S S IG N M E N T L A W S
To enable a lender to advance credit without being subject to the
limitations imposed by interest laws! or as a means of evading such
laws, credit transactions are frequently cast in the form of a purchase
of wages at a discount.8 Also wage assignments are frequently taken
to secure the repayment of usurious loans.9 Abuses growing out of
these practices have resulted in the enactment in most States of
statutes which regulate wage assignments and render void all assign
ments that do not comply with the statute. Citations o f the wageassignment statutes in various jurisdictions are given in the following
statement :
S ta t u t e s r e g u la tin g th e u s e o f w a g e a s s ig n m e n ts in v a rio u s ju r is d ic tio n s in th e
U n ited S t a t e s
A l a b a m a : Ann. Code 1928, ch. 322, secs. 9232, 9233 (semble).
A r k a n s a s : Pope’s Digest of Stats., vol. 2, ch. 108, secs. 9119, 9120.
C a lifo r n ia : Deering’s Labor Code 1937, secs. 300-303.
C o lo r a d o : Ann. Stats. 1935, vol. 3, ch. 97, secs. 220-232 (semble).
G e o r g i a : Ann. Code 1935, sec. 2 5 :201 -2 20 .
I l l i n o i s : Smith-Hurd Ann. Stats,
(pocket supp.), ch. 48, sec. 3 9 : 1 -A .
I n d i a n a : Burns’ Ann. Stats. 1933, vol. 8, secs. 4 0 :201 -2 12 .
I o w a : Code 1935, sec. 9454.
K e n t u c k y : Carroll’s Stats. (Baldwin’s 1936 R ev.), sec. 4758a: 1-6.
L o u i s i a n a : Dart’s Gen. Stats. 1932, vol. 2, secs. 4368, 4373-4379.
M a i n e : Rev. Stats. 1930, ch. 123, sec. 9, p. 1494.
566 Corpus Juris 265 et seq. For a specific example, see Horner v. Nitsch (court of
appeals, 1 9 0 6 ), 103 Md. 498, 63 A tl. 1052.
6See Borchard, Declaratory Judgments, especially p. 334 et seq.
7See the usury statutes of Michigan, Minnesota, New York, and Utah.
8See Hubachek, F. B., Annotations on Small Loan Laws, Russell Sage Foundation, 1938,
p. 157.
9See Gallert, Hilbor, and May, Small Loan Legislation, Russell Sage Foundation, 1932,
pp. 16, 39, et seq.
223
SMALL LOANS
M a r y l a n d : Bagby’s Ann. Code 1924, vol. I, art. 8, secs. 11-16 (semble).
M a s s a c h u s e t t s : Ann. Laws, vol. 5, cb. 154, secs. 2 -6 (semble).
M in n e s o t a : Mason’s Stats. 1927, supp. 1968, vol. I, secs. 4135-4138.
M i s s o u r i : Ann. Stats., vol. 3, sec. 2969, p. 1858.
M o n t a n a : Ann. Rev. Code 1935, vol. 2, secs. 4173-4182.
N e b r a s k a : Laws 1939, ch. 39, p. 195.
N e w H a m p s h i r e : Code 1926, vol. II, ch. 327, sec. 3 (semble).
N e w J e r s e y : Rev. Stats. 1937, sec. 3 4 :1 1 -2 5 .
N e w M e x i c o : Ann. Stats. 1929, sec. 8-101.
N e w Y o r k : McKinney’s Consol. Laws Ann., bk. 30, sec. 197; bk. 40, sec. 46.
N o r th C a r o l m a : Ann. Code 1939, sec. 6558a.
P e n n s y l v a n ia : Purdon’s Ann. Stats., tit. 43, secs. 271-274
(semble).
R h o d e I s l a n d : Gen. Laws 1938, ch. 292, secs. 1-6.
T e n n e s s e e : W illiam s’ Ann. Code, 1934, vol. 5, sec. 8562.
T e x a s : Vernon’s Ann. Civ. Stats., tit. 107, art. 6165a.
W a s h i n g t o n : Remington’s Ann. Rev. Stats., vol. 8, secs. 7597, 7598.
W e s t V i r g in ia : Code 1937, sec. 2352 (3 ).
W i s c o n s i n : Stats, 1937, sec. 241.09.
W y o m i n g : Ann. Rev. Stats., 1931, secs. 8 :1 0 1 -1 0 2 .
These statutes generally contain in substance one or more of the
following provisions:
1. A prohibition against the assignment of unearned wages or wages to be
earned under a future contract of employment. (See the wage-assignment
statutes of Alabama, Arkansas, California, Colorado, Georgia, Illinois, Indiana,
Kentucky, Louisiana, Maryland, Massachusetts, Minnesota, Missouri, Montana,
New York, Pennsylvania, and Wisconsin.)
2. A limitation of the amount recoverable out of any one wage payment.
(See the wage-assignment statutes of Colorado, Illinois, Kentucky, Massa
chusetts, New York, and W est Virginia.)
3. A requirement that the consent of wife, spouse, or employer must be
obtained to the assignment.
( See the wage-assignment statutes- of Arkansas, California, Colorado, Indiana,
Iowa, Kentucky, Louisiana, Maryland, Massachusetts, Minnesota, Montana, New
Hampshire, North Carolina, Pennsylvania, Tennessee, Texas, Washington, W est
Virginia, Wisconsin, and Wyoming.)
4. A requirement that the assignment be recorded.
(See the wage-assignment statutes of Arkansas, Colorado, Maine, Maryland,
Massachusetts, Minnesota, New Hampshire, New Mexico, Rhode Island, W ash
ington, and Wyoming.)
5. A limitation as to the time within which the employer may be notified
or served with the assignment if it is to be enforceable.
(See the wage-assignment statutes of Colorado, Illinois, Indiana, Maryland,
Minnesota, and Montana.)
6. A requirement that the assignment be signed in person by the wageearner and delivered at the time the consideration passes or the loan is made.
(See the wage-assignment statutes of Illinois, Kentucky, Maryland, Massa
chusetts, and Rhode Island.)
7. A limitation as to interest on loans secured by wage-assignments.
(See the wage-assignment statutes of Colorado, Georgia, Indiana, Louisiana,
Maryland, Montana, New Jersey, and Texas.)
8. A requirement for the regulation and licensing of the business of making
loans and wage assignments.
224
LABOR LAWS AND THEIR ADMINISTRATION,
1940
(See the wage-assignment statutes of Colorado, Georgia, Louisiana, Montana,
and Texas.)
9.
Requirements as to the form, the contents, and the delivery of contracts
to assignor.
(See wage-assignment statutes of Colorado, Georgia, Illinois, Iowa, Kentucky,
Maryland, Massachusetts, Minnesota, Missouri, Nebraska, New York, Rhode
Island, Texas, and W est Virginia.)
The principal means of enforcing these statutes is a provision that
wage assignments which violate the provisions of the statute shall
be void. Such a provision is included in the wage-assignment statutes
o f all States except Georgia, Maine, and Texas. In Colorado, In
diana, Louisiana, and Montana, a loan contract secured by an invalid
assignment is made void and unenforceable. These provisions place
a substantial responsibility upon employers to determine the validity
of wage assignments before paying over the wages of employees to
assignees.
The wage-assignment statutes referred to heretofore usually apply
to the use of wage assignments in general. Similar regulations of
wage assignments are also to be found as integral parts of regulatory
small-loan laws which will be discussed in a later section.
In many States which lack wage-assignment statutes, the use o f
wage assignments has been restricted by the courts. Common-law
decisions have generally invalidated assignments of unearned wages
where no contract of employment was in existence on the ground that
such assignments were contrary to public policy and that no
assignable right could exist.10
PROPERTY A N D W A G E -E X E M P T IO N L A W S
The wage earner also receives some protection under laws exempt
ing from garnishment and attachment certain minimum amounts of
wages per week and exempting from execution certain kinds and
amounts of personal property. These statutes, which are cited below,
differ greatly between various jurisdictions. They are generally en
forceable only by the borrower, who must claim exemption in the
manner provided by law.
P r o p e r t y and w a g e e x e m p tio n s ta t u t e s in v a r io u s ju r is d ic tio n s in th e
U n ite d
S ta tes
A la b a m a : Code 1928, secs. 7807, 7882-7966; Cum. Supp. 1936, sec. 7883.
A r iz o n a : Struckmeyer’s Rev. Code 1928, secs. 1731-1739, 4274.
A r k a n s a s : Pope’s Digest o f Stats., secs. 7162-7197; Const., art. 9, sec. 4.
C a lifo r n ia : Deering’s Code Civ. Proc. 1937, secs. 690-690.24.
C o l o r a d o : Ann. Stats. 1935, vol. 3, ch. 93, art. 2, p. 1045.
C o n n e c tic u t: Gen. Stats., Rev. of 1930, secs. 1038, 5042, 5043, 5791-5794; Supp.
1935, sec. 1672c; Supp. 1939, sec. 1414e (g ).
10
See Corpus Juris Secundum, p. 1062 et seq.
SMALL LOANS
225
D e l a w a r e : Rev. Code 1935, sees. 4793-4804 ; 41 Del. L., p. 656.
D i s t r ic t o f C o lu m b ia : Code 1929, tit. 24, secs. 311-313.
F lo r i d a : Comp. Gen. L. 1927, secs. 5782-5788, 5792, 5793, 7062, 7065; Const.,
art. 10, secs. 1, 2.
G e o r g i a : Ann. Code 1935, sec. 46-208, tit. 51, sec. 66-103.
H a w a i i : Rev. L. 1935, secs. 4160-4162; Laws 1937, art. 44, p. 150.
I d a h o : Ann. Code 1932, voi. 1, secs. 8-203, 8-204, 54-1004: Laws 1933, ch. 97,
p. 154; Laws 1937, ch. 104, p. 154.
I ll in o i s : Smith-Hurd Ann. Stats., ch. 52, 62, sec. 14.
I n d ia n a : Burns’ Ann. Stats. 1933, vol. 2, tit. 2, ch. 35, p. 556 et seq.., sec; 3-505.
I o w a : Code 1935, secs. 11755-11771; Laws 1935, ch. 109, p. 154; Laws 1937, ch.
82, p. 99.
K a n s a s : Gen. Stats. 1935, secs. 60-3501— 60-3309, 00-3495, 73-142; Supp. 1937,
sec. 60-3504.
K e n t u c k y : Carroll’s Stats. (Baldwin’s 1936 R ev.), secs 1697-1708; 1939 Supp.,
sec. 2896b-14.
L o u i s i a n a : D art’s Gen. Stats. 1932, vol. 2, secs. 3805-3809; Code Prac., art. 644;
Const., art. 11.
M a i n e : Rev. Stats. 1930, ch. 60, sec. 173, p. 1009; ch. 95, secs. 67-71, p. 1319; ch.
100, sec. 55, p. 1380.
M a r y l a n d : Bagby’s Code 1924, art. 83, secs. 8 -1 4 ; art. 9, secs. 33, 34 (and see
sec. 33 in Flack’s 1935 Supp.).
M a s s a c h u s e t t s : Ann. Laws, vol. 8, ch. 235, sec. 34 ; ch. 236, sec. 5 4 ; ch. 246, sec.
28 (pocket supp.). See also pocket supp., vol. 5, ch. 175, sec. 110A.
M ic h ig a n : Ann. Stats, vol. 22, secs. 27.1543 et seq. (and see secs. 27.1543 and
27.1544 in August 1939 supp. pamphlet), vol. 24, sec. 27.3399.
M i n n e s o t a : Mason’s Stats. 1927, secs. 8336-8344, 9447, 9453; Supp. 1938, secs.
9447-1, 94 47-2; Laws 1939, ch. 72, pp. 109, 263, 371.
M is s i s s i p p i : Code 1930, vol. I, ch. 30, p. 86 0; Supp. 1938, ch. 30, p. 234.
M is s o u r i: Ann. Stats, vol. 6, secs. 608-611, p. 4221 et seq.; vol. 2, secs. 1159-1167,
p. 1422 et seq. • sec. 1398, p. 1613; secs. 1424, 1425, pp. 1631,1632.
M o n t a n a : Rev. Code 1935, vol. 3, secs. 6945, 6948, 6949, 6965; vol. 4, secs.
9427-9430.2. (See also pocket supps., secs. 325.35, 1132.49, 1747.5, 3033.51.)
N e b r a s k a : Comp. Stats. 1929, secs. 13-506, 20-1553— 20-1564, 20-1574, 40-101—
40 -1 18 ; 1937 Cum. Supp., secs. 44-1130, 44-1252.
N e v a d a : Comp. L. 1929 (H illyer), vol. 2, sec. 3315; vol. 4, secs. 8844, 9426-9428.
N e w H a m p s h i r e : Pub. Laws 1926, ch. 214, sec. 3 ; ch. 332, sec. 2 ; ch. 356, sec.
2 0 ; Laws 1927, ch. 30, p. 4 1 ; Laws 1935, eh, 99, sec. 51, p. 171; ch. 127, sec. 18,
p. 289; ch. 137, sec. 16-g, p. 306.
N e w J e r s e y : Rev. Stats. 1937, secs. 2 :2 6 - 9 9 — 2 :2 6 -1 2 1 , 2 :2 6 -1 8 2 — 2 :2 6 -1 8 4 ,
2 : 42-6, 2 : 42-7, 1 7 :1 8 -1 2 , 3 4 :1 5 -2 9 ; Supp. 1938,, secs. 2 : 26-187.1, 2 :2 6-187 .2.
N e w M e x i c o : Ann. Stats. 1929, ch. 48, sec. 59-126, p. 821; 1938 Supp. (Courtright), ch. 48, p. 289.
N e w Y o r k : Cahill’s Civ. Prac. Act, art. 43, p. 389 et seq.
N o r t h C a r o lin a : Code 1939, secs. 721, 728-751; Const., art. 10.
N o r t h D a k o t a : Comp. Stats. 1913, secs. 5605, 7729-7743; Supp. 1925, secs.
5605, 5607, 7731, 7739, 7741; Laws 1929, chs. 1 2 7,18 8; Laws 1935, chs. 238, 239.
O h i o : Page’s Ann. Gen. Code, vol. 7, sec. 10271 et seq; vol. 9, sec. 11721 et seq.
O k la h o m a : Ann. Stats. 1937, tit. 12, secs. 850, 851; tit. 3 1 ; Const., art. 12, sec. 3.
O r e g o n : Ann. Code 1930, vol. 1, secs. 3-201— 3 -2 0 8 ; Supp. 1935, sec. 3 -2 0 7 ;
Laws 1935 ( Sp. Sess,), ch. 55, sec. 8 ; ch. 60, sec. 12 ; ch. 70, sec. 1 2 ; Laws 1939,
ch. 546.
P e n n s y l v a n ia : Purdon’s Ann. Stats., tit. 12, secs. 2161-2177, 2798; pocket supp.,
tit. 12, secs. 2178, 2179.
226
LABOR LAWS AND THEIR ADMINISTRATION, 1940
R h od e Isla n d : Gen. Laws 1938, ch. 557, p. 1050.
South Carolina: Code 1932, vol. 3, secs. 9085-9096; Supp. 1936, idem.
South D a k o ta : Code 1939, vol. 3, secs. 51.17, 51.18.
T en n essee: William s’ Ann. Code, vol. 5, secs. 7701-7735.
T e x a s : Vernon’s Ann. Civ. Stats., tit. 57 (vol. 12).
U ta h : Rev. Stats. 1933, secs. 10 4 -3 7 -(1 3 -1 6 ) ; tit. 38.
V e rm o n t: Pub. L. 1933, secs. 1748, 1754-1759, 1808, 2250, 2272, 2559-2567, 3854,
6557, 6724, 6892; Laws 1935, p. 9 7 ; Laws 1937, p. 514 (act spec. sess. 1936).
V irg in ia : Michie’s Code 1936, secs. 6531-6566; Const., secs. 190, 191; Supp. 1938,
secs, 6555, 6564.
W a sh in g to n : Remington’s Rev. Stats. Ann., vol. 2, tit. 4, ch. 3, sec. 703; Const.,
art. 19, sec. 1, amend. 3.
W e s t V irg in ia : Michie’s Ann. Code, secs. 626 (103a), 2543, 3431, 3897-3910 (1) ;
Const., art. 6, sec. 4 8 ; Supp. 1939, secs. 3834 ( 7 ), 3834 ( 25).
W isc o n sin : Stats. 1937, secs. 272.18, 272.20; Laws 1939, ch. 331, sec. 2, p. 110.
W y o m in g : Rev. Stats. 1931, secs. 89-2984— 80^-2908, 89-3125; Laws 1985, ch.
100, sec. 6 ; Laws 1937, ch. 115.
C H A T T E L MORTGAGE L A W S
Laws relating to chattel mortgages are chiefly for protection of
creditors of the mortgagor. However, in the case o f mortgages of
household goods the laws of some States have special regulations
designed to protect the mortgagor. The following statutes require
that the wife or spouse must join in a mortgage on household goods:
C olorado: Ann. Stats. 1935, vol. 2, ch. 32, sec. 7.
Illin o is: Smith-Hurd Ann. Stats., ch. 95, sec. 25.
N eb ra sk a : Comp. Stats. 1929, sec. 36-301.
N e w H a m p sh ire: Pub. L. 1926, vol. 2, ch. 288, sec. 8.
N ew J e r s e y : Rev. Stats. 1937, sec. 4 6 : 28-6.
N orth Carolina: Code 1939, sec. 2577.
N orth D a k o ta : Laws 1933, ch. 204.
O h io : Page’s Ann. Gen. Code, vol. 6, sec. 8565-1.
The following statutes permit foreclosure of mortgages on house
hold goods only by court action:
Illin ois: Smith-Hurd Ann. Stats,, ch. 95, sec. 24.
In dia n a : Burns’ Ann. Stats. 1933, vol. 10, sec. 51-201.
O h io: Page’s Ann. Gen. Code, vol. 6, sec. 8566.
REGULATORY S M A L L -L O A N
LAW S
Several classes of statutes authorize certain types of lending or
types o f lending corporations; for instance, the banking laws, building
and loan association laws, credit-union laws, and industrial banking
company laws. These statutes, however, contain few if any additional
express remedies which the borrower may invoke. I f a particular loan
does not conform to the requirements of the special law under which
the lender purports to act, the loan merely fails to be protected from
the operation o f the general usury statute and the borrower is left to
the remedies afforded by the usury statute.
SMALL LOANS
227
Thirty-nine jurisdictions, however, have small-loan laws which regu
late the business of lending money in small sums, generally of $300
or less at rates higher than those allowed by the usury laws. These
statutes follow:
R e g u l a t o r y S m a ll-L o a n L a w s o f V a r io u s J u r isd ic tio n s in t h e U n ite d S ta te s
A l a b a m a : Gen. Acts 1932 (ex. sess.), No. 339, p. 331.
A r i z o n a : Rev. Code 1928 (Struckmeyer), ch. 45, secs. 7989-2013, p. 481; Supp.
(Courtright) 1936, ch. 45, sec. 2013, p. 270; Laws 1939, ch. 40, p. 114.
A r k a n s a s : Pope’s Digest of Stats. 1937, vol. 1, ch. 14, secs. 826-855, p. 477.
C a lifo r n ia : Stats, and Amends, to Codes 1939, ch. 1045, p. 2886. An identical
act was also passed, containing in addition certain appropriation provisions.
(See ch. 953, p. 2679.)
C o lo r a d o : Ann. Stats. 1935, vol. 3, ch. 88, art. 2, secs. 6 -2 1 ; Laws 1939, ch. 121,
p. 440.
C o n n e c tic u t: Gen. Stats. (Rev. of 1930), vol. II, tit. 37, ch. 213, secs. 40664082, p. 1314; amend. Cum. Supp. 1931-33-35, tit. 37, ch. 213, secs. 1551c-1556c,
p. 675, and Cum. Supp. 1937-39, tit. 37, ch. 213, secs. 1258e-1262e, p, 641.
D e l a w a r e : Rev. Code. 1935, ch. 100, art. 32, secs. 4045-4052, p. 857.
D i s t r ic t o f C o lu m b ia : Code 1929, tit. 17, ch. 2, secs. 21-31, p. 155.
F l o r i d a : Ann. Comp. Gen. Laws 1927, vol. 1, div. 1, tit. X I, ch. 71, secs.
3999-4017, p. 1431, vol. 4, div. 5, tit. II, ch. 10, sec. 7880, p. 3693; Laws 1939,
ch. 19349 (Senate Bill No. 1145), p. 718, ch. 19517 (House Bill No. 1573), p. 1214.
G e o r g i a : Ann. Code 1935, book 9, tit. 25, ch. 25-3, secs. 25-301— 25-319, p. 35 2;
ch. 25-99, sec. 25-9902, p. 361.
H a w a i i : Laws 1937, series D -151, act 232, ch. 232A, p. 241.
I l l i n o i s : Smith-Hurd Ann. Stats. 1934, pocket supp., ch. 74, secs. 19-46.
I n d ia n a : Burns’ Ann. Stats, 1933, vol. 5, tit. 18, ch. 30, secs. 18 (3001-3005),
p. 375.
I o w a : Code 1935, tit. 23, ch. 41 9fl, secs. 9438fl— 9438f25, p. 1393.
K e n t u c k y : Carroll’s Ann. Stats. (Baldwin^ 1936 R ev.), ch. 32, art. 16, secs.
883il-883i32, p. 474.
L o u i s i a n a : Dart’s Gen. Stats. 1932, vol. 1, tit. 8, ch. 13, secs. 768-787, p. 273.
M a i n e : Rev. Stats. 1930, ch. 57, secs. 143-161, p. 93 8; amend. Pub. L. 1939,
ch. 286.
M a r y l a n d : Bagby’s Ann. Code 1924, vol. 2, art. 58a, p. 2084; Bagby’s 1929
Supp., art. 58A, p. 36 7 ; Flack’s Supp. 1935, art. 58A, p. 81 0; Laws 1937, ch. 358,
p. 71 3; Laws 1939, ch. 741.
M a s s a c h u s e t t s : Ann. Laws 1933, vol. 4, tit. 20, ch. 140, secs. 96-114, p. 1729;
1939 Supp., tit. 20, ch. 140, sec. 96, p. 224.
M ic h ig a n : Ann. Stats., vol. 17, tit. 23, ch. 240, secs. 23.667 (1 -2 7) (1939 pocket
supp.,p. 24 et. sec.).
M in n e s o t a : Laws 1939, ch. 12, p. 21.
M i s s i s s i p p i : Ann. Code 1930, vol. 1, ch. 37, art. 2, secs. 1952-1972, p. 961; 1938
Supp., ch. 37, art. 2, sec. 1952, p. 267.
M i s s o u r i : Ann. Stats. 1932, vol. 11, ch. 34, art. 7, secs. 5544-5564, pp. 7704
et seq.; 1939 pocket supp., secs. 5556, 5559a, pp. 7708, 7709.
N e b r a s k a : Comp. Stats. 1929, art. 1, ch. 45, secs. 45-112— 45-123, p, 1103;
1937 Supp., ch. 45, secs. 45-124— 45-127, p. 342.
N e w H a m p s h i r e : Pub. L. (Code 1926, vol. 2, ch. 269, secs. 1-29, p. 1063; Laws
1931, ch. 163, p. 18 8; Laws 1933, ch. 129, p. 185.
228
LABOR LAWS AND THEIR ADMINISTRATION, 1940
N e w J e r s e y : Rev. Stats. 1937, vol. 1, tit. 17, subtit. 2, pt. 2, ch. 10, secs.
1 7 :1 0 - 1 — 1 7 :1 0 -2 6 , p. 71.
N ew M e x ic o : Laws 1939, ch. 231, p. 551.
N e w Y o r k : McKinney’s Consol. Laws Ann., bk. 4, art. 9, secs. 340-365, p. 9 3 ;
1939 Supp., sec. 365, p. 126.
O h io : Page’s Ann. Code 1926, vol. 4, pt. 2, tit. II, ch. 25a, secs. 6346 (l ) -6 3 4 6
(1 2 ), p. 802 (pocket supp., sec. 6346 ( 1 3 ) ).
O reg on : Code 1930 (Supp. 1935), tit. 22, ch. 27, secs. 22-2701— 22-2728, p. 487.
P en n sylva n ia : Purdon’s Ann. Stats., tit. 7, ch. 27, secs. 751-761, p. 55.
R h od e Isla n d : Gen. Laws 1938, tit. 17, ch. 149, p. 345.
T en n essee: William s’ Ann. Code 1934, vol. 4, tit. 14, ch. 33, secs. 6721-6743,
p. 60 0; 1937 Supp., ch. 33, sec. 6733, p. 130.
T e x a s: Vernon’s Stats. 1936, tit. 107, pt. 2, art. 6165a, secs. 2 -9 , p. 1132.
U ta h : Ann. Rev. Stats. 1933, tit. 7, ch. 8, secs, 7 -8 -1 — 7 -8 -9 , p. 199; Laws 1939,
ch. 19.
V e rm o n t: Acts 1937, No. 184, p. 206; Acts 1939, No. 198, p. 236.
Virginia: Ann. Code 1936, tit. 37, ch. 166c, secs. 4168 (38)-4168 (5 7 ), p. 1262.
W e s t V irg m ia : Ann. Code 1937, ch. 47, art. 7A, secs. 4 6 5 3 (1 )-4 6 5 3 (2 6 ), p. 1633.
W isc o n sin : Stats. 1937, ch. 214, secs. 214.01-214.28, p. 2176.
Under these statutes the borrower of small sums generally has two
classes o f remedies for illegal charges—those under the small-loan
law and those under the usury law. Except for the small-loan laws
o f Delaware, District of Columbia, Mississippi, New Mexico, and
Texas these statutes declare void and unenforceable any loan contract,
subject to the law, in which any o f the provisions restricting charges
or affecting the making or collecting o f loans are violated. Most of
these statutes, either by express provisions or by judicial construc
tion,11 apply to any loan contract whether made by nonlicensees or by
those licensed under the law if the principal amount of the loan does
not exceed $300. Therefore, even though the usury statute does not
render loan contracts void where excessive interest has been charged,
the borrower may under the small-loan law have a usurious contract
declared void as to principal as well as to interest.
O TH ER
M ISC E L L A N E O U S
REMEDIES
A V A IL A B L E
TO
THE
BORROWER
Sometimes a loan shark may be subject to an action for fraud.12
In such cases the borrower has a right to recover damages as in other
cases o f fraud. In many cases where suit has been wrongfully
brought upon an account not legally due and garnishment of the
borrower’s wages has resulted in the loss of his job or similar injury,
a suit for malicious prosecution or misuse of legal process may be
maintained.13
11See Hubachek, F. B., Annotations on Small Loan Laws, pp. 1 1 3 -1 14 .
12See Webb, J. A ., Law of Usury, 1899, sec. 342.
18There have been several cases of this kind decided by appellate
courts : Hardy v.
(Mo. 1 9 2 7 ), 297 S. W . 1 6 9 ; Adair v. James M. Peterson Bank,
61 Utah, 159, 211 Pac. 6 8 3 ; Liversage v. Gibson, 222 Ala. 672, 133 So. 715.
Lewis Automobile Co.
SMALL LOANS
229
Bankruptcy is also available to the borrower and many wageearner borrowers are driven to this resort by the loan sharks.14
H o w State Labor Departments M ay A id in Making Borrowers* Remedies
More Effective
It has already been pointed out that borrowers are generally
unable to take advantage of the defenses given them by law. Exer
cise of these remedies is limited by borrowers’ ignorance of the exist
ence o f statutory defenses; by the harassment to which they are
invariably subjected by the lender when legal defenses are raised; by
the cost of legal process and adequate legal representation; by fear
that their employment may be jeopardized through garnishment of
wages or service o f a wage assignment; by the impossibility of fore
going wages during the period of litigation; by inability to leave
work to attend court; and by the difficulties of proving usury under
the conditions imposed by the lender.
To these circumstances which handicap the exercise of borrowers’
legal remedies may be added still others in certain jurisdictions.
Money-lender suits are frequently brought in justice of the peace
courts. In most cases the compensation of justices of the peace con
sists of the fees paid by plaintiffs. Since these courts are in compe
tition with each other for business, judgment is frequently rendered
for those initiating many suits regardless o f the merits of the case
in law or fact.
The Court of Appeals of Kentucky, in sustaining a law abolishing
the fee system in justice courts, gave a good picture of the loan shark
and the part played in that connection by justice courts in Jefferson
County, in which Louisville, Ky., is situated. It recited that in that
county, with a population of some 365,000 and between 50,000 and
60,000 wage earners, there were some 70 or 80 loan-shark offices mak
ing small loans exceeding a million dollars annually in the aggregate
at interest rates ranging up to 200 percent per annum, and that in
1931 there were 73,000 actions commenced, tried, and judgments
rendered in the courts of justices of the peace, and in 1932 approxi
mately 2,000 garnishments in .l month. {S h a w v. F o x (Ky. 1932),
55 S. W. (2d) 11, 15.) Justice for the wage-earner borrower in such
courts is generally impossible.
A favorite trick o f the loan shark is to bring actions in courts far
removed from the residence of the borrower. Where the borrower’s
employer is a corporation doing business in several States the loan
shark may and frequently does bring suit and garnishee the bor
rower’s wages in another State.
14See Robinson and Nugent, Regulation of the Small Loan Business, Russell
Foundation, 1935, p. 197.
Sage
230
LABOR LAWS AND THEIR ADMINISTRATION, 1 9 4 0
. It is easy, therefore, to understand why the wage-earner borrower
is usually unable to defend himself against an oppressive loan con
tract. I f left to his own resources, he is generally beaten from the
start in any legal contest with a money lender. W ith sympathetic
assistance and support, however, his position as a litigant could be
substantially strengthened and the legal remedies available to him
could be made far more important and effective.
One o f the ways in which important assistance could be rendered
would be to group borrowers together in making their defense. P roof
o f usury on the basis o f unsupported oral testimony and fragmentary
evidence is naturally difficult when attempted by an individual bor
rower. But when the court is confronted with similar testimony
o f many other borrowers and with many bits o f evidence, the infer
ence o f the existence o f usury may be overwhelming. Not only would
the likelihood o f a favorable outcome be enormously increased by
such a “ wholesale” defense, but the cost o f obtaining legal representa
tion could be substantially reduced. Private attorneys, who would
be unwilling to represent an individual litigant for a fee commen
surate with the benefit to the borrower could afford to handle a num
ber o f cases fo r smaller individual fees. Moreover, in most commu
nities bar associations could easily be induced to defend a group o f
borrowers as a public service.
Another valuable service would be to encourage cooperation o f
employers in preventing enforcement o f usurious claims against
their employees. Many employers are unaware o f the remedies avail
able to wage earners against usurious loans, or o f the statutes regu
lating wage assignments, or o f the legal limitations upon garnish
ments o f wages. Some employers even threaten to discharge
employees whose wages are attached and this gives the loan shark
an extremely effective club fo r enforcing collections. State labor
departments could be extremely useful in inform ing employers o f
borrowers’ legal remedies, in calling employers’ attention to illegal
lending activities among their employees, in interceding with em
ployers on behalf o f loan-shark victims and in notifying employers
o f the names and addresses o f public officials charged with the
responsibility o f uniform laws fo r the protection o f borrowers and
o f private agencies equipped to assist loan-shark victims.
State labor departments could render still another service by
calling public attention to any failure in the administration o f
justice affecting wage-earner borrowers or in the enforcement o f
penal statutes fo r the protection o f wage-earner borrowers. Condi
tions oppressive to wage-earner borrowers can frequently be speedily
remedied by effective publicity, and the press will be found almost
universally to be a pow erful and effective ally.
SMALL LOANS
231
R e m e d ie s A v a ila b le t o t h e S ta te
Remedies available to the State fo r the protection o f wage-earner
borrowers are o f three kinds— criminal, administrative, and civil.
Each o f these kinds o f remedies will be discussed in turn.
c r im in a l rem ed ies
Some usury laws expressly make the taking o f usury a misde«meanor. Such a provision is contained in the usury statutes o f the
follow ing 16 States:
Deering’s Gen. Laws 1937, vol. 1, act 3757, sec. 3.
Gen. Stats. (Rev. of 1930), sec. 4735.
F l o r i d a : Comp. Gen. L. 1927, secs. 6942, 7903.
G e o r g i a : Ann. Code 1935, sec. 57-9901.
H a w a i i : Laws 1937, series I>-150, act 222, sec. 7055, p. 240.
I o w a : Code 1935, sec. 9408.
M i s s o u r i : Ann. Stats., 1932, vol. 4, sec. 4421, p. 3042.
N e w M e x i c o : Ann. Stats. 1929, sec. 89-106.
N o r t h C a r o lin a : Code 1939, sec. 4509.
N o r t h D a k o t a : Comp. Laws 1913, sec. 6076.
R h o d e I s l a n d : Gen. Laws 1938, ch. 485, sec. 3.
S o u th C a r o lin a : Laws 1930, No. 830, p. 1836.
S o u t h D a k o t a : Code 1939, vol. 1, sec. 13, 1830.
TJtah: Rev. Stats. 1933, sec. 44-0-5.
W i s c o n s i n : Stats. 1937, sec. 115.07 (2).
W y o m i n g : Rev. Stats. 1931, ch. 58, sec. 58-113.
C a l i fo r n i a :
C o n n e c t ic u t :
The general misdemeanor statute o f some jurisdictions by making
all violations o f prohibitory laws misdemeanors where no penalty
is otherwise provided, may be broad enough to supply a criminal
penalty fo r violation o f the usury law. See, fo r example, the fo l
low ing general misdemeanor statutes:
Struckmeyer’s Rev. Code 1928, sec. 4485.
Pope’s Digest of Stats., vol. 1, secs. 4089, 4090.
I d a h o : Ann. Code 1932, vol. 1, sec. 17-1026.
I l l i n o i s : Smith-Hurd Ann. Stats., ch. 38, sec. 586.
M ic h i g a n : Ann. Stats. 1937, vol. 24, sec. 28.199.
M i n n e s o t a : Mason’s Stats. 1927, sec. 10047.
M o n t a n a : Rev. Code 1935, vol. 5, sec. 10051.
N e v a d a : Hillyer’s Comp. Laws 1929, vol. 5, sec. 9972.
N e w Y o r k : McKinney’s Ann. Consol. Laws, bk. 39, sec. 29.
O k la h o m a : Ann. Stats., tit. 21, sec. 21.
T e n n e s s e e : Williams’ Ann. Code, vol. 7, sec. 10755.
W a s h i n g t o n : Remington’s Ann. Rev. Stats., vol. 4, sec. 2269.
A r iz o n a :
A rk a n sa s:
The wage-assignment laws o f the follow ing jurisdictions also ex
pressly declare all violations thereof to be misdemeanors:
Ann. Stats. 1935, vol. 3, ch. 97, art. 6, sec. 229.
Smith-Hurdi Ann. Stats., ch. 48, sec. 39.6.
I n d i a n a : Burns’ Ann. Stats. 1933, vol. 8, sec. 40-211.
C o lo r a d o :
Illin o is :
232
LABOR LAWS AND THEIR ADMINISTRATION,
1940
Kentucky: Carroll’s Stats. (Baldwin’s 1936 Rev.), sec. 4758a-3.
Louisiana: Dart’s Gen. Stats. 1932, vol. 2, sec. 4377.
Minnesota: Mason’s Stats. 1927, sec. 4136.
Montana: Rev. Code 1935, sec. 4181.
Nebraska: Comp. Stats. 1929, sec. 20-1561; Laws 1939, ch. 39, p. 195.
New Jersey: Rev. Stats. 1937, sec. 34:11-26.
New York: McKinney’s Ann. Consol. Laws, bk. 40, sec. 42.
North Carolina: Code 1935, sec. 4509.
Wisconsin: Stats. 1937, ch. 115, sec. 115.07 (3).
The regulatory small-loan laws cited on page 227 generally impose
criminal penalties fo r engaging in the business of making small
loans without a license at rates above those prescribed by the usury
statutes, and they also impose criminal penalties on licensees who
charge more than is permitted by the small-loan law under which
they are licensed or who violate that law in any o f numerous other
ways. A ll but seven o f these statutes— those o f Alabama, Arizona,
Massachusetts, Mississippi, Nebraska, Ohio, and Texas— impose crim
inal penalties for violation in connection with a single small-loan
transaction without requiring p roof that the lender is engaged in
the business o f making small loans.
In many States there w ill be found other criminal statutes relating
to one phase or another o f the loan shark’s business. F or example,
loan sharks and other collection agencies frequently in their collection
efforts send to the debtor so-called “ bluff legal documents,” headed
“ Notice o f Garnishment” or “ Notice o f Summons” or some similar
imitation o f court process. The statutes o f some States make this
a misdemeanor. (See, fo r example, Smith-Hurd Ann. 111. Stats.,
ch. 38, sec. 323.) In at least one case, sending somewhat similar
documents and collection letters through the mails, fo r the purpose
o f collecting money which was not legally owing, was held to consti
tute using the mails to defraud. (Lesselyoung v. United, States, 18
Fed. (2d) 472; certiorari denied, 275 U. S. 535.)
Sometimes also the loan shark will violate State securities laws,
as where merchandise coupons are “ purchased” by the borrower as
a part o f the loan shark’s scheme to evade the usuary laws. (See,
fo r example, action No. A -48, 786, in Court o f Common Pleas, H am
ilton County, Ohio.) In other cases the loan shark may violate the
State insurance laws, as where, in attempting to evade the usury laws,
the lender purports to enter into a contract with the borrower whereby
the obligation to repay is canceled in the event o f the death o f the
borrower, or in the event o f loss o f the borrower’s household goods
by fire, etc. The possibility was recognized, although the question
was not decided, in M. K . c& T. Trust Go. v. McLachlan (1894), 59
Minn. 468, 61 N. W . 560. (See also E quity Service Oorp. v. AguLl
(Mun. Ct. 1935), 156 N. Y . Misc. R. 552, 281 N. Y . S. 292; reversed
SMALL LOANS
233
(Sup. Ct. 1936), 158 N. Y . Misc. E. 780, 286 N. Y . S. 379, which was
reversed (1937), 250 A pp. Div. 96, 293 N. Y . S. 872.
In A ttorn ey General ex rel. Monk v. O. E . Osgood Go. (1924), 249
Mass. 473, 144 N. E. 371, it was held that an undertaking by a seller
o f furniture on the installment plan to cancel the obligation to pay
the purchase price in the event o f the death o f the purchaser prior
to the full payment thereof constituted insurance within the meaning
o f the statute providing fo r the regulation o f the insurance business,
and the seller was enjoined from continuing to make such contracts.
A nd in special cases, misrepresentations in connection with the
solicitation, making, or collection o f loans by loan sharks may indi
cate a violation o f the Federal mail-fraud statutes, as in the Lesselyoung case, referred to above.
In two cases the New Jersey court has held that under a usury
statute carrying civil but no criminal penalties the loan shark who
engages in the business o f taking exorbitant usury from needy bor
rowers is liable to criminal prosecution under statutes prohibiting
the maintenance o f disorderly houses. (State v. Dairrwnt (1905),
73 N. J. L. 131, 62 Atl. 286; State v. Martin, 77 N. J. L. 652, 73 Atl.
548, 24 L. E. A . (N. S.) 507, 134 Am. St. Eep. 814, 18 Ann. Cas. 986,
affirming (N. J. Sup. Ct. 1908), 76 N. J. L. 292, 69 Atl. 1091.)
O f perhaps even greater significance is the possibility that under the
laws o f some States the loan shark may be guilty o f the common-law
offense o f criminal conspiracy. Under a usury statute which did not
provide any criminal penalty but did provide civil penalties, the
Court o f Appeals o f Kentucky, in Commonwealth v. Donoghue
(1933), 250 K y. 343, 63 S. W . (2d) 3, 89 A. L. E. 819, sustained an
indictment charging the defendant with the common-law offense o f
conspiracy in that the defendants were conspiring to engage in the
business o f lending money in small amounts to poor, necessitous wage
earners at excessive, exorbitant, and usurious rates o f interest in
violation o f the usury act. The availability o f this remedy in a
particular State depends, o f course, upon the somewhat technical
legal question o f whether this particular common-law offense is rec
ognized by law in the particular State. The answer to this question
may be affected to a large extent by the statutes with respect to
criminal conspiracy. Indeed, the criminal conspiracy statute itself
may be broad enough to support a prosecution o f a loan shark. See
the follow ing statutes:
Code 1928, sec. 8574.
Struckmeyer’s Rev. Code 1928, secs. 4581, 4582.
A r k a n s a s : Pope’s Digest of Stats., vol. 1, sec. 3573.
C a lifo r n ia : Deering’s Pen. Code 1937, sec. 182.
C o lo r a d o : Ann. Stats. 1935, vol. 2, ch. 48, sec. 177.
A la b a m a :
A r iz o n a :
234
LABOR LAWS AND THEIR ADMINISTRATION,
1 9 40
Gen. Stats. 1930, Cum. Supp. 1937-39, sec. 1447e.
Comp. Gen. L. 1927, sec. 7541.
H a w a i i : Rev. L. 1935, sec. 5720.
I d a h o : Ann. Code 1982, vol. 1, sec. 17-1027.
I o w a : Code 1935, sec. 13162.
M a i n e : Pub. Acts 1937, ch. 12.
M in n e s o t a : Mason’s Stats. 1927, sec. 10055.
M is s i s s i p p i : Code 1930, vol. 1, ch. 20, sec. 830.
M is s o u r i: Ann. Stats., vol. 4, sec. 4243, p. 2963.
M o n t a n a : Rev. Code 1935, vol. 5, sec. 10898.
N e v a d a : Hillyer’s Comp. Laws 1929, vol. 5, sec. 10061.
N e w J e r s e y : Rev. Stats. 1937, sec. 2:119-1.
N e w Y o r k : Penal Law, McKinney’s Ann. Consol. Laws, bk. 39, sec. 580.
N o r th D a k o t a : Comp. Stats. 1913, sec. 9441.
O k la h o m a : Ann. Stats, tit. 21, sec. 421.
P e n n s y l v a n ia : Purdon’s Ann. Stats, tit. 18, sec. 2451.
S o u th D a k o t a : Code 1939, vol. 1, sec. 13.0301.
T e n n e s s e e : Williams’ Ann. Code, vol. 7, sec. 11064.
W a s h i n g t o n : Remington’s Ann. Rev. Stats., sec. 2382.
W is c o n s in ; Stats. 1937, sec. 348.40.
C o n n e c tic u t:
F lo r i d a :
A D M IN IS T R A T IV E
ENFORCEM ENT
It has already been noted that certain wage-assignment laws re
quire those engaged in the business o f lending money upon wage as
signments to obtain a license. A ll o f the small-loan laws cited on
page 227 provide for a license for those engaged in the business o f
lending small sums at a greater rate o f interest than that allowed
by the usury laws. Thus, under these statutes the licensing official
is given some degree o f administrative authority. But the effective
ness o f administrative enforcement o f these licensing acts depends
to a very considerable degree upon the licensing official’s power to
revoke licenses fo r violation o f the law, and to conduct investigations,
hold hearings, and make findings o f fact upon the basis o f which
the power to revoke may be exercised.
Some o f the small-loan laws, especially the older ones, empower
the licensing official to revoke licenses for violation o f the law but
accompany this with no specific power to hold hearings, take evi
dence, and make findings o f fact to support an order fo r revocation.
Under such laws it is sometimes contended that the licensing official
has no power to revoke a license except where the licensee has been
convicted o f a violation under the criminal provisions o f the act
and under these circumstances the licensing official’s disciplinary
power is circumscribed. Even under such laws, however, the licens
ing official has power to investigate the books and records o f licensees.
Consequently, he may at least ascertain the facts and turn the evi
dence over to the local prosecuting attorney. Moreover, such stat
utes usually require that the borrower be given a statement o f the
SMALL LOANS
235
terms o f the loan transaction showing the actual amount o f the loan
and the agreed rate or charge, which facilitates prosecution for ex
cessive charges.
Under most o f the small-loan laws which have been enacted since
1932, wide discretionary powers have been granted to the official
charged with administering the law not only with respect to the
granting and revocation o f licenses but also with respect to the
promulgation o f regulations to facilitate enforcement o f the act.
Under these statutes the administering official is usually given au
thority to examine all books and records o f licensees, to investigate
violations o f the act by others than licensees, to require answer
under oath to specific questions, to require annual or special reports
from licensees, to make general rules and regulations for the conduct
o f the business under the law, and to suspend licenses upon a finding
after hearing that the law has been violated.
H o w L a b o r D e p a r tm e n ts M a y A id t h e S ta te
CIVIL REMEDIES OF T H E STATE
The civil remedies available to the State which are not based on
statute are confined chiefly to injunctions against the carrying on of
the offending businesses. Such injunction actions frequently may be
supplemented by the appointment of a receiver of the business
enjoined.
The Supreme Court o f Kansas pioneered in this field in the case o f
State v. McMahon (1929), 128 Kan. 772, 280 Pac. 906, 66 A. L. K.
1072. There the court held that the State, in order to protect the
public welfare and to abate a public nuisance, had a right to enjoin
a loan shark from continuing his unlawful practices. In the sub
sequent case o f State ex. rel. Beck v. Basham (1937), 146 Kan. 181.
70 Pac. (2 d ), 24, the same court reaffirmed the right o f the State to
an injunction against a loan shark and also directed the lower
court to appoint a receiver for the loan shark’s business. The purpose
o f the appointment o f the receiver in such cases is to make the en
forcement o f the injunction certain and to provide a sure means o f
protecting all o f the current borrowers from any further unlawful
exactions. It enables the court to supervise in one proceeding a
lawful adjustment o f each borrower’s account with the loan shark.
The Court o f Appeals o f Kentucky, in 1938, in the case o f Common
wealth v. Continental Co., In c., 121 S. W . (2d) 49, has also affirmed
the right o f the State to enjoin a loan shark; and in the most recent
case o f State v. O'Neil (Minn., M ay 1939), the Supreme Court o f
Minnesota sustained an order o f the District Court o f Hennepin
County (M inneapolis), temporarily enjoining the defendant loan
3 1 3 4 2 1 ° — 4 1 --------1 6
236
LABOR LAWS AND THEIR ADMINISTRATION,
19 4 0
shark and appointing a temporary receiver, pendente lite, fo r his
business.
The two Kansas cases and the Minnesota case were decided under
a usury statute which carried no criminal penalty and there was
no small-loan law involved. The Kentucky case involved violation
not only o f the usury statute but also o f the small-loan law. The p ro
cedure is available under any type o f law which makes the taking
o f usury unlawful.
The Supreme Court o f Nebraska in State v. Central Purchasing
Co. (1929), 118 Neb. 383, 225 N. W . 46, in enjoining and ousting a
foreign corporation from doing any business in the State because
its business was that o f a loan shark, in effect supports the decisions
o f the Kansas and Kentucky and Minnesota courts. The same is
true o f the case o f State v. Fam ily Loan Co. (1934), 167 Tenn. 654,
73 S. W . (2d) 167, where the Supreme Court o f Tennessee, in quo
warranto proceedings, ousted a foreign corporation from doing busi
ness in the State because o f its loan-shark operations.
In 1930 the Circuit Court o f Hendrick County, Indiana, in a case
entitled, State ex rel. Ogden and Stark v. Haynes et al., No. 13060,
also issued an injunction enjoining the defendants from loaning
small sums at usurious rates o f interest. The defendants did not
appeal. There have probably been other cases in the lower courts.
Since the power o f the district, county, or State’s attorney to file
such a bill on behalf o f the State may be questioned, the cooperation
o f the attorney general o f the State is generally essential in this
type o f case when carried on by the State. The practice sometimes
follow ed is fo r the local prosecuting attorney and the attorney gen
eral o f the State to join in initiating the proceeding.
COM PARISON
OF REMEDIES
A V AIL AB L E
TO
THE
STATE
A n y comparison o f remedies available to the State other than that
o f revocation or suspension o f licenses in connection with admin
istrative enforcement o f small-loan laws and wage assignment laws,
necessarily must take into account variations between States in the
form o f their local statutes, local court decisions, and the conditions
in the local courts as to juries and other matters. Under some condi
tions criminal prosecution fo r violation o f the usury statutes, or o f
the wage assignment law, or o f the small-loan law, or o f any other
criminal statute which appears to have been violated, is effective.
No one, particularly the loan shark, relishes criminal prosecution
with its penalties o f fine, and possible imprisonment.
The possibility o f prosecution o f the loan shark fo r criminal con
spiracy either under the statute or the common law is a matter
which the local prosecutor can, we believe, give his most serious
SMALL LOANS
237
attention. The wide range o f evidence available in such a prosecu
tion is a matter o f common knowledge among prosecuting officers
and, since the offense is frequently a felony and not a mere mis
demeanor, a few successful prosecutions should act as an efficient
deterrent to others.
But after all, criminal prosecution does not reach directly into
the office o f the loan shark and place the staying hand o f the law
upon the existing and outstanding loans. It is from these that the
borrowers need immediate and permanent relief.
Criminal prosecutions have their place and should never be neg
lected, but the laws sought to be enforced against loan sharks are
not merely or primarily criminal laws. Usury, wage assignment,
small loan, and other laws affecting the loan shark are essentially
regulatory laws regulating the conduct o f business in the interests
o f the public welfare. A remedy is also needed under which the
State may act to prevent injuries to the public in the same way the
State would abate a public nuisance or other public wrong o f a
continuing nature. Injunction and a receivership o f the instru
mentalities o f the public wrong unquestionably fit the needs as to
loan sharks, and where this remedy has been sustained by the courts,
it has proven to be most effective.
h o w state labo r d e pa r t m e n t s m a y a id
State labor departments are in touch with the three State agencies
fo r enforcement o f the laws protecting the wage-earner borrower—
the attorney general o f the State, the local prosecuting officers, and
the State authority administering the regulatory and licensing laws,
such as small-loan laws.
They are also in touch with sources from which evidence from the
wage-earner borrowers may be secured. Many employers can put
the department o f labor in touch with borrowers they know to be
enmeshed in trouble with loan sharks. Labor unions also should
assist in securing evidence from borrowers. The various other social
agencies, such as legal aid societies and better business bureaus,
usually will cooperate with any State department manifesting an
interest in the enforcement o f laws against loan sharks. Newspapers
generally evidence a keen desire to cooperate in any campaign against
illegal lending to wage earners.
The attorney general o f the State and the local prosecuting officials
as well as the State licensing authority will be glad to receive support
from the labor department. In States where there is no State-wide
regulatory law the enforcement o f which is committed to the State
authorities, the attorney general without doubt will be especially
grateful fo r the aid and support which the department o f labor can
238
LABOR LAWS AND THEIR ADMINISTRATION, 1 9 4 0
render him. Particularly is this so where loan-shark conditions in
the State require resort to the proceeding o f injunction and receiver
ship which should be carried on by the attorney general. The pro
cedure by injunction and receivership is drastic. I t is possible fo r
the attorney general to secure a temporary injunction and the ap
pointment o f a receiver even without notice to the loan shark i f a
proper showing be made to the court. A nd a temporary injunction
and temporary receivership are almost essential if the court wants to be
certain that the books and records and other evidences o f unlawful
contracts o f the loan shark are to be kept within its jurisdiction fo r
ultimate disposition by the court and the complete protection o f the
borrowers.
Not only the attorney general but the court itself needs all o f the
support which the law-enforcing agencies o f the State can supply
The active support which commissioners o f labor can render to the
attorney general in requesting him to pursue energetically all avail
able remedies against loan sharks and in cooperating with him in the
securing o f necessary evidence will greatly strengthen these officers
and render substantial aid to wage earners who are entitled to the
special aid o f the labor department o f the State.
Business Meetings—Reports and Resolutions
R eport o f the Secretary^Treasurer
Since the Tulsa convention six new members have joined the Association, viz,
the California Department of Industrial Relations, the Florida Industrial
Commission, the Montana Department of Agriculture, Labor and Industry, the
Philippine Islands Department of Labor, the Washington Department of Labor
and Industries, and the Nova Scotia Department of Labor. The membership
is now as follows:
ACTIVE M EM BERS
United States Bureau of Labor Statistics.
United States Bureau of Mines.
United States Children’s Bureau.
United States Employment Service.
United States Women’s Bureau.
United States Division of Labor Standards.
United States Social Security Board.
National Labor Relations Board.
Alabama Department of Labor.
Arkansas Department of Labor.
California Department of Industrial Relations.
Connecticut Department of Labor and Factory Inspection.
Florida Industrial Commission.
Illinois Department of Labor.
Indiana Division of Labor.
Iowa Bureau of Labor.
Kansas Department of Labor.
Massachusetts Department of Labor and Industries.
Missouri Department of Labor and Industrial Inspection.
Montana Department of Agriculture, Labor and Industry.
New Jersey Department of Labor.
New York Department of Labor.
North Carolina Department of Labor.
Oklahoma Department of Labor.
Pennsylvania Department of Labor and Industry.
Philippine Islands Department of Labor.
Puerto Rico Department of Labor.
Rhode Island Department of Labor.
South Carolina Department of Labor.
Utah Industrial Commission.
Virginia Department of Labor and Industry.
Washington Department of Labor and Industries.
West Virginia Department of Labor.
Wisconsin Industrial Commission.
Department of Labor of Canada.
British Columbia Department of Labor.
Nova Scotia Department of Labor.
ASSOCIATE M EM BERS
Delaware Labor Commission.
Maryland Commission of Labor and Statistics.
New Hampshire Bureau of Labor.
North Dakota Department of Agriculture and Labor.
Oregon Bureau of Labor.
Alberta Department of Trade and Industry.
239
240
LABOR LAWS AND THEIR ADMINISTRATION, 19 4 0
The proceedings of the Tulsa, Okla., convention have been printed as Bulletin
No. 678 of the Bureau of Labor Statistics of the United States Department
of Labor.
The committees which were continued from last year and which have pre
pared reports for presentation to this convention, are as follows:
C o m m itte e o n a p p r en tic es h ip . — Voyta Wrabetz, Industrial Commission of
Wisconsin, chairman; Lewis G. Hines, Department of Labor and Industry of
Pennsylvania; George G. Kidwell, Department of Industrial Relations of Cali
fornia; Thomas B. Morton, Department of Labor of Virginia; William F. Pat
terson, United States Department of Labor.
C o m m it t e e o n ch ild labor. — Beatrice McConnell, United States Children’s
Bureau, chairman; Margaret F. Ackroyd, Department of Labor of Rhode
Island; C. H. Gram, Bureau of Labor of Oregon; W. Rhett Harley, Depart
ment of Labor of South Carolina; Maud Swett, Industrial Commission of
Wisconsin.
C o m m it t e e o n c iv il s e r v ic e . — Eugene B. Patton, Department of Labor of
New York, chairman; Adam Bell, Department of Labor of British Columbia;
John M. Pohlhaus, Commissioner of Labor and Statistics of Maryland; Harvey
Saul, Department of Labor of Rhode Island; John J. Toohey, Jr., Department
of Labor of New Jersey.
C o m m it t e e o n f a c t o r y in sp e c tio n . — John M. Falasz, Department of Labor of
Illinois, chairman; William T. Cameron, United States Department of Labor;
James T. Moriarty, Department of Labor and Industries of Massachusetts;
John D. Petree, Department of Labor of Alabama; Forrest H. Shuford, Depart
ment of Labor of North Carolina; Frank W. Snyder, Department of Labor of
West Virginia.
C o m m it t e e on in d u stria l h o m e w o r k . — Morgan R. Mooney, Department of
Labor and Factory Inspection of Connecticut, chairman; P. Rivera Martinez,
Department of Labor of Puerto Rico; Marian L. Mel, United States Depart
ment of Labor; Kate Papert, Department of Labor of New York; Earl H.
Shackelford, Department of Labor and Industrial Inspection of Missouri; Har
old C. Wall, Industrial Commission of Florida.
C o m m it t e e o n m a c h in e r y r e q u ir e m e n ts. — Roland P. Blake, United States De
partment of Labor, chairman; Joseph T. Faust, Department of Labor of Illi
nois ; C. H. Gram, Bureau of Labor of Oregon; Forrest H. Shuford, Department
of Labor of North Carolina.
C o m m it t e e o n m in im u m w a g e . — Frieda S. Miller, Department of Labor of
New York, chairman; Mrs. Rex Eaton, Department of Labor of British Colum
bia; Morgan R. Mooney, Department of Labor and Factory Inspection of Con
necticut ; Lottie Shupe, Industrial Commission of Utah; Louise Stitt, United
States Women’s Bureau.
C o m m it t e e o n so c ia l s e c u r ity . — W. A. Pat Murphy, Department of Labor of
Oklahoma, chairman; L. D. Currie, Department of Labor of Nova Scotia;
Math Dahl, Department of Agriculture and Labor of North Dakota; Charles
W . Harness^' Bureau of Labor of Iowa; J. M. Reese, Labor Commission of
Delaware; Jeff A. Robertson, Department of Labor of Kansas.
C o m m it t e e on w a g e -c la im c o llec tio n . — E. I. McKinley, Department of Labor
of Arkansas, chairman; John S. B. Davie, Bureau of Labor of New Hampshire;
J. W. Hoover, Department of Labor and Industries of Washington; Thomas R.
Hutson, Department of Commerce and Industry of Indiana; William M. Knerr,
Industrial Commission of Utah; E. C. Manning, Department of Trade and In
dustry of Alberta.
C o m m it t e e o n w o m e n in i n d u s tr y . — Mary Anderson, United States Depart
ment of Labor, chairman; Nellie Kennedy, Department of Labor of Kansas;
Margaret Mackintosh, Department of Labor of Canada; Frieda S. Miller, De
partment of Labor of New York; Mary Rice Morrow, Department of Labor and
Industry of Pennsylvania.
241
BUSINESS MEETINGS
FINANCIAL STATEMENT COVERING PERIOD SINCE TULSA
CONVENTION
R e c e ip t s
1939
Sept. 5 Balance in bank____________________________________________ $2, 218. 95
13 Alabama Department of Labor, 1940 dues_________ $25. 00
13 Oregon Department of Labor, 1940 dues___________
10. 00
13 Kansas Department of Labor, 1940 dues___________ 25. 00
19 Nova Scotia Department of Labor, 1940 dues______ 25. 00
19 Utah Industrial Commission, 1940 dues_____________ 25. 00
19 Puerto Rico Department of Labor, 1940 dues______ 25. 00
23 Delaware Labor Commission, 1940 dues__________ 10.00
25 North Dakota Commission of Agriculture and Labor,
1940 dues__________________________________
10.00
27 New York Department of Labor, 1940 dues----------- 25. 00
27 Indiana Division of Labor, 1940 dues----------------------- 25.00
Oct.
19 Rhode Island Department of Labor, 1940 dues____
25.00
25 New Jersey Department of Labor, 1940 dues--------- 25. 00
26 Connecticut Department of Labor and Factory In
spection, 1940 dues--------------------------------------- 25.00
1940
Feb.
8 California Department of Industrial Relations, 1940
dues_________________________________________ 25. 00
21 Pennsylvania Department of Labor and Industry,
1940 dues___________________________________
25.00
May 16 Virginia Department of Labor and Industry, 1941
dues________________________________________________
25.00
20 Nova Scotia Department of Labor, 1941 dues______ 25. 00
23 New Hampshire Department of Labor, 1941 dues___ 10. 00
24 Illinois Department of Labor, 1941 dues____________ 25.00
28 Connecticut Department of Labor and Factory
Inspection, 1941 dues______________________________
25.00
28 Rhode Island Department of Labor, 1941 dues______ 25. 00
28 Arkansas Bureau of Labor, 1941 dues_______________ 25.00
28 North Carolina Department of Labor, 1941 dues____ 25. 00
June 4 British Columbia Department of Labor, 1941 dues__25. 00
10 California Department of Industrial Relations,
1941 dues_______________________________ ____ _____ 25. 00
10 Kansas Department of Labor, 1941 dues_____ !______ 25. 00
11 West Virginia Department of Labor, 1941 dues____ 25. 00
13 Massachusetts Department of Labor, 1941 dues___ 25. 00
13 Alberta Department of Trade and Industry, 1941
dues________________________________________________
10.00
15 Missouri Department of Labor, 1941 dues__________ 25.00
18 Delaware Labor Commission, 1941 dues______________ 10.00
19 Indiana Division of Labor, 1941 dues________________ 25.00
26 Maryland Commission of Labor and Statistics, 1941
dues________________________________________________
10.00
July
7 Utah Industrial Commission, 1941 dues_____________ 25.00
8 Oregon Bureau of Labor, 1941 dues__________________
10.00
8 South Carolina Bureau of Labor, 1941 dues_________
25.00
15 North Dakota Commission of Agriculture and
Labor, 1941 dues___________________________________ 10.00
23 Florida Industrial Commission, 1941 dues____________ 25.00
24 Alabama Department of Industrial Relations, 1941
dues-------------------------------------------------------------------------- 25.00
Aug.
4 Iowa Department of Labor, 1941 dues_____________ 25.00
5 Wisconsin Industrial Commission, 1941 dues______ 25. 00
5 New York Industrial Commission, 1941 dues_________ 25.00
12 Oklahoma Department of Labor, 1941 dues_________
25.00
15 Philippine Islands Department of Labor, 1941 dues— 25. 00
---------965.00
Total receipts__________________________________
3,183. 95
242
LABOR LAWS AND THEIR ADMINISTRATION, 1940
D is b u r s e m e n t s
1939
Sept. 12
14
18
18
18
18
18
19
19
19
26
26
Nov. 22
29
Dec. 21
27
Bank charge-------------------------------------------------------------- $0.10
Cash, telegram, and porters, Tulsa convention______
2. 69
Mrs. Linton Cofer, services at Tulsa convention__10. 00
Delle Davis, services at Tulsa convention__________ 10. 00
Billie Hall, services at Tulsa convention____________ 10. 00
Mrs. Elizabeth Langley, services at Tulsa conven
tion_______________________________________________
5.00
Lucille G. McNeill, reporting Tulsa convention_____ 100. 00
Caslon Press, 250 printed programs, Tulsa conven
tion ------------------------------------------------------------------------- 29.75
Postal Telegraph-Cable Co., telegrams_____________
5. 86
Western Union, telegrams__________________________
8.51
John B. Clark, secretary’s bond_____________________
5. 00
Camera Shoppe, Tulsa, rental o f sound projector___ 10. 20
Postal Telegraph-Cable Co.,telegrams_______________
2.52
Cash, postage fo r secretary’s office_________________
5. 00
Western Union, telegrams___________________________
4.89
Oil Capital Sales Corp., installation charge for
broadcast o f Dim ock address, Tulsa-------------------9.50
1940
Jan. 25 Cash, postage for secretary’s office________________
5. 00
Apr. 29 Caslon Press, 500 letterheads, 250 billheads_______
14. 00
May 10 Cash, postage fo r secretary’s office________________
5. 00
June 14 Cash, postage for secretary’s office________________
5. 00
July
18 Bank charge_________________________________________
. 15
Aug.
6 Cash, postage for secretary’s office_________________
5. 00
6 Bank charge_________________________________________
. 10
22 Cash, postage for secretary’s office__________________
5. 00
Sept.
4 Caslon Press, 100 badge holders, 250 badge cards__11. 50
Sept.
5
Total disbursements__________________________________
$269. 77
Net balance_________________________________________________
2,914.18
I sado r L u b in ,
S e c r e t a r y -T r e a s u r e r .
R eport and Recomm endations o f the E xecutive Board
Your executive board recommends to the Association that the consolidation
of the United States Employment Service and the Unemployment Compensation
Division of our Social Security Board makes more necessary than ever the
continuation of our efforts to federate our Association with the Association
of Unemployment Compensation Commissioners and the Association of Em
ployment Office Executives. Although little progress has been made in this
direction thus far, your board is of the opinion that since we may rightfully
look forward to the ultimate consolidation of agencies dealing with unemploy
ment compensation and the employment service, we may look forward to the
success of our efforts in amalgamating those national associations concerned
with the welfare of labor.
1.
Your board further recommends that an appropriation of $500 may be
available to your president and other officials designated by the executive board
for travel expenses to attend meetings of State legislatures, upon the invitation
of State labor commissioners, to present the official attitude of the Association
toward proposed labor legislation, and to increase membership of the Association
to include not only the agencies dealing with unemployment compensation and
employment security, but all States, Territories, and Provinces of Canada not
now affiliated with this Association.
B U S IN E S S M E E T IN G S
243
2. Your board further recommends that an appropriation of $300 be made
for travel expenses of members of the executive board for attendance at board
meetings.
3. Your board further recommends that you authorize the payment of $100
to Miss Mary Carr for stenographic and transcription services for the minutes
of this convention.
4. Your board further recommends the authorization of expenditure not to
exceed $50 for gifts to such persons as helped our Association in a clerical and
in other ways at this meeting.
[These recommendations of the executive board were adopted by the
convention.]
Resolutions Adopted by the Convention
I n t e r n a t io n a l L a b o r O r g a n iz a tio n
1. Whereas one of the purposes of the International Association of Govern
mental Labor Officials is “to maintain and promote the best possible standards
of law enforcement and administrative method,” and this purpose is in harmony
with one of the principal functions of the International Labor Organization;
and
Whereas, the International Labor Office is now, through the generous coop
eration of the Canadian Government, transferring a large part of its personnel
from Geneva to Montreal; and
Whereas the achievement of a democratic peace will involve the problem
of reabsorbing into civilian activities the millions of workers throughout the
world now under arms or engaged in the production of armaments; and
Whereas the maintenance of world peace must rest upon an economic basis
which makes adequate provision for the welfare of all workers;
Therefore the International Association of Governmental Labor Officials:
(1) Welcomes to this continent the members of the staff of the International
Labor Organization and records its pleasure that their coming will facilitate and
encourage cooperation and the exchange of information between the Interna
tional Labor Organization and the members of the International Association of
Governmental Labor Officials.
(2) Affirms its conviction of the vital importance, at a time when democratic
institutions are threatened throughout the world, of upholding the International
Labor Organization as a link between the democratic forces of its member
countries and as an agency for the maintenance and improvement of labor
standards on the basis of free cooperation between employers, workers, and
government.
(3) Recommends that the International Labor Organization put its best
activity into working out a program for the maintenance of world peace based
upon recognition of the underlying necessity for adequate provision for workers’
welfare everywhere and offers its cooperation in working out such a program
and securing its adoption here.
F a c t o r y I n s p e c tio n
2. B e i t r e s o l v e d , That the recommendations of the committee on factory in
spection as hereinafter set forth be and they are hereby adopted as the
recommendations of the twenty-sixth annual convention of the International
Association of Governmental Labor Officials.
244
LABOR L A W S AND THEIR ADMINISTRATION, 1 9 4 0
(1) The establishment of regular training courses for factory inspectors
within the State or through cooperation with the United States Department of
Labor.
(2) Establishment of weekly or other similar periodical meetings or con
ferences for the purpose of training and educating factory inspectors as to
the latest developments in industry and the resulting hazards created thereby.
(3) Adoption of health and safety regulations or safety codes which will
stand as a guide to manufacturers of industrial machines and equipment and
as a practical set of rules for efficient enforcement by the factory inspector.
(4) Promulgation and adoption of rules by the Secretary of Labor under
the Walsh-Healey Act enforceable in all States wherein Government contracts
are awarded, and in which no State codes or rules have been enacted and where
inadequate coverage exists.
(5) Cooperation between State agencies or State labor departments, particu
larly the divisions of factory inspection and the National Committee for
Conservation of Manpower in Defense Industries.
(6) Creation and establishment of industrial hygiene units within State
labor departments for the control and elimination of occupational diseases.
(7) Creation and establishment within the Bureau of Labor Standards of
the United States Department of Labor of a unit empowered to set up uniform
procedures in the control and elimination of occupational disease hazards.
The adoption of standard methods of sample collection and analysis in the
study and elimination of occupational disease. The drafting of uniform codes
toward the elimination of occupational disease and the dissemination of informa
tion on pertinent subjects relative to the cooperation of Federal and State
agencies in the field of industrial hygiene.
(8) Active support by all State labor departments and its administrators
of Senate bill No. 3461, commonly known as the Murray bill.
M in im u m W a g e
3.
Whereas efforts are already being made in the name of patriotism to
relax legal regulations that have been built up over a long period of years
for the protection of labor; and
Whereas many millions of workers yet uncovered by either State or Federal
minimum wage laws will be in dire need of such legal protection if living
costs should rise as a result of the national defense program; and
Whereas the extension of the benefits of existing State minimum wage laws
to additional workers, either through amendment of such laws or through the
issuance of new wage orders under them, involves large financial outlays far
beyond the present budgets of departments administering such laws; now
therefore be it
R e s o l v e d , That the International Association of Governmental Labor Officials
go on record as opposing any efforts to limit the protection of minimum wage
laws, State or Federal, by weakening amendments during the coming legislative
sessions; and be it further
R e s o l v e d , That the protection of minimum-wage legislation be extended as
rapidly as is practical to all workers as yet uncovered by such laws; and be
it further
R e s o l v e d , That the members of this Association from States now operating
under State minimum-wage laws use every effort to secure such appropriations
for the minimum-wage divisions of their States as will make possible the
extension of minimum-wage benefits to additional workers through the issu
ance of new wage orders and through the proper enforcement of the same.
BUSINESS MEETINGS
245
Y o u t h L a b o r S ta n d a rd s
4. In a program of national defense it is of paramount importance to safe
guard and promote the health, safety, and morale of its workers, in particular
of its youthful workers, while they are being introduced to industry and
seasoned in its processes.
This conference, therefore, emphatically urges, that at no point shall there
be relaxation of the legal standards which have been built up for the pro
tection of young workers, from too early or too hazardous employment or
that otherwise safeguard them, on the job or in training.
Attention is called to the fact that experience has shown that such safeguards
are not only for the good of the individual but tend to increase production.
We deplore the efforts of a bureau of the New York State Department of
Education to break down legal safeguards for young workers. Such a move,
we believe, to be based upon an unfortunate lack of information as to the
facts and the more important issues involved.
C e n t r a l a n d S o u t h A m e r ic a n R e p r e s e n t a t io n '
5. R e s o l v e d by this twenty-sixth annual convention of the International
Association of Governmental Labor Officials:
That all the governmental labor agencies of the republics and politicial
divisions and subdivisions of the territory comprised within the limits of the
Bering Straits and Cape Horn, known as the “Americas,” islands and posses
sions included, be invited, and they are hereby invited, to form a part of
and affiliate with our Association to protect the mutual interests of all these
states, and to make effective the cooperation which is so badly needed by all
these governments not only for the advancement, liberalization, and extension
of social and labor laws and its administration, wherever it exists, but at
the same time to make more effective the cooperation and support that all
these governments and the working people of all our countries need for the
protection and defense of all our nations in the Western Hemisphere against
political and social evils ruining Europe at the present.
That all these nations duly affiliated to our Association be invited by our
Association to have representatives present at our next coming convention,
and those not affiliated at the time we meet in convention next year, be invited
to have fraternal delegates present to benefit by the discussion and resolutions
adopted by our convention.
That in extending our cordial invitation to all these nations to join us in
this task, copy of this resolution, in both English and Spanish, be furnished
to them.
G e n e ra l
6. R e s o l v e d , That this convention extend its most sincere thanks to the
Honorable Charles Poletti, Lieutenant Governor of the State of New York, the
Honorable Newbold Morris, president of the City Council of the City of New
York, Commissioner Frieda S. Miller, Dr. Eugene B. Patton, Howard E. Silberstein, and other members of the staff of the New York State Department of Labor,
for the excellent hospitality accorded the delegates during our stay in New York
City; and be it further
R e s o l v e d , That this convention extend its deep appreciation to Miss Lucille
J. Buchanan for the splendid manner in which she has successfully organized
the twenty-sixth annual meeting of this Association and her unbounded efforts
to make all delegates and guests feel at home in the “big” citv; and be it
further
246
LABOR LAWS AND THEIR ADMINISTRATION, 1940
R e s o l v e d , That we extend our thanks to Mr. Garrison and other members
of the staff of the Commodore Hotel who have contributed to our pleasure while
guests in the city; and be it further
R e s o l v e d , That we extend our deepest appreciation to the International
Ladies’ Garment Workers’ Union for making available to our membership
copies of their fortieth anniversary souvenir books.
Discussion
[The follow ing discussion on the resolution on factory inspection
preceded its adoption:]
Mr. I m m e l . I f I am all by myself I shall vote against that portion
o f the resolution which recommends the support o f the Murray bill.
I have not talked to Secretary Hines on this, but I regard it as a
further effort to centralize power in Washington. Pennsylvania is
one o f the heavy Federal taxpayers. Money has to come from some
where, and in our experience when the Federal Government helps
to pay for a function we are perform ing it always dictates to a
certain extent how that function shall be performed. I think that
as far as Pennsylvania is concerned we would want to set up our
own industrial hygiene unit. Certainly, there is right now a splen
did field fo r Federal activity and help in systematizing and bringing
to us expert inform ation along these various lines, but that particular
feature o f the resolution I oppose.
Mr. D avie. I am going to stand with my brother. I agree with
him heartily that the labor departments o f the States are the people
who should do that job, so I am against this particular resolution
in that form.
Mr. D urkin . I believe there must be some misunderstanding or
lack o f knowledge o f the Murray bill. W e have been discussing the
failure o f the aid to the departments o f labor that was supposed to
be extended by health departments o f our States, because national
legislation has given to the Public Health Service o f the United
States grants and it in turn gives grants to State departments o f
health to make surveys or studies supposed to be fo r the assistance
o f State labor departments. Now, the Murray bill does this. It
grants money to the United States Department o f Labor, which in
turn will give grants to State departments o f labor for the estab
lishment within those departments o f an industrial hygiene division.
It was stated here, and we all know, that in only three labor depart
ments in this country do we have an industrial hygiene division;
and I believe those three departments will tell you that they can
not go much further than they have because they lack sufficient
moneys to do the job they would like to do.
Now, are we going to stand here as officials o f labor departments
and state we do not need money to carry on industrial hygiene in
BUSINESS MEETINGS
247
our own States? A re we going to say factory inspectors, by their
sense o f smell or sight, will be able to distinguish occupational
diseases or the hazards o f such diseases without any fund or any
technicians or any equipment in order to find out whether or not
they exist? Are we as labor officials going to say we do not need
this or are not interested in the occupational hazards in our own
States, and we do not care whether they continue now or forever
more? Are we going to say we are not interested in the protection
o f the health o f workers ?
I do not know. W e have been unsuccessful in getting appropria
tions in our own States, and are we going to say now, when this
opportunity is extended to us by a bill introduced in Congress, that
Congress need not appropriate this kind o f money, that we do not
need it, , and that we are not interested in protecting the health o f
the workers o f our States. I, as a representative o f labor in Illinois
and head o f the labor department, am heartily in favor o f that
section o f the resolution above all others.
Miss M iller . A s we are one o f the State departments which has
been able to get some money for the furtherance o f industrial hygiene
work in our own State, I am heartily glad that Pennsylvania is
interested in spending its money fo r a similar purpose. W ith a
limited and inadequate amount o f money to spend we have found
serious reasons for carrying on this kind o f work and are convinced
that insofar as we have carried it on, it has been o f great use and
benefit directly to the worker and also directly to the economy o f
the State o f New York.
H ad you time, we should have liked nothing better than to take
you out here north o f New Y ork City and have shown you the con
ditions under which there is being built one o f the greatest under
ground structures in the world to bring water some 90 miles
underground to New Y ork City. Now the risks and physical dangers
in the tunneling o f that great channel were something we were well
aware of, but could have done very little about without our small
division o f industrial hygiene and an inspection department ready
and equipped to carry on with the knowledge that we could channel
through industrial hygiene. The possibility o f preventing that type
o f accident and disease requires a constructive knowledge o f what
needs to be done to the employers who carry on this kind o f job,
and requires the direct supervision o f the enforcement agencies over
the body o f knowledge in this field o f industrial hygiene. W here
we as States are able and desire to carry that on completely, I see
no reason why we as States should not; but let me add my bit to
what has already been said; that as we get into that job it looks
like too expensive a thing fo r each o f us to carry alone and
independently.
248
LABOR LAWS AND THEIR ADMINISTRATION, 1940
There are Nation-wide standards to be set up. There is work that
we can do cooperatively, and let those of usi who can see a way to do
it cooperatively put their shoulders to the wheel and make it possible
for that cooperative enterprise to get under way.
Mr. I m m e l . The answer to all that is that the money comes from
somewhere, and it comes from the States. I f we find these units!
are good things, and they certainly are, we ought to be able to con
vince the State to provide the money and do it without surrender
o f State rights and usurpation o f authority by the Federal agencies.
I f the State is to be only an agency to carry out Federal regulations,
certainly I do not think we are carrying out the intent o f the Consti
tution itself.
Dr. G reenburg (New Y o rk ). A t the present time money is being
distributed to some 30 States fo r industrial hygiene work. This
money at the present time is going to State departments o f health
in every case with one exception— Massachusetts. A t the present
time the State o f Pennsylvania, to the best o f my knowledge—the
State department o f health— is getting some sixty or seventy thousand
dollars every year for industrial hygiene work. Now, the question
arises, “ D o you want to do industrial hygiene work in the health or
labor department?” That is the crux o f the whole situation. My
own experience is that it should be done in £he labor department.
Commissioner Durkin feels the same way, I believe. Commissioner
Bowditch feels the same way, and I think there is a grow ing body
o f men who feel that the more logical place to do industrial hygiene
work is in the State department o f labor. Just why that is so is
a long story, too long to relate at this time.
A t the present time it is practically impossible to get financial
support fo r such work in departments o f labor. The Murray bill
will make that possible, and it is up to you to decide whether it
should be in the labor departments. Nothing you do is going to
remove the fact that the Federal Government at the present time
is giving out approximately three or four or five million dollars for
industrial hygiene work in some thirty-odd departments o f health
in the United States— health departments which are remote from
the actual problem as seen and contacted by the labor departments.
R e p o r t o f A u d it in g C o m m itte e
Your auditing committee has examined the books of the Association and
found them to be in balance as reported by the secretary-treasurer.
The cash balance carried over was $2,218.95. Receipts for the year totaled
$965; disbursements totaled $269.77, leaving a net gain of $695.23 for the
year and a total cash balance of $2,914.18.
BUSINESS MEETINGS
249
R e p o r t o f N o m in a tin g C o m m itte e
The committee on nominations is prepared to make the following report as to
officers for the ensuing year:
P r e s id e n t .— Frieda S. Miller, of New York.
F i r s t v ic e p r e s id e n t. — Yoyta Wrabetz, of Wisconsin.
S e co n d v i c e p r e s id e n t. — E. I. McKinley, of Arkansas.
T h ird v i c e p r e s id e n t. — C. H. Gram, of Oregon.
F o u r t h v i c e p r e s id e n t. — Morgan R. Mooney, of Connecticut.
F i f t h v i c e p r e s id e n t. — L. D. Currie, of Nova Scotia.
S e c r e t a r y tr e a su r e r . — Isador Lubin, of Washington, D. C.
The committee is unanimous in recommending to the convention the adoption
of this list of candidates to serve as your officers the ensuing year.
[A motion, duly seconded, was carried that the retiring president,
Adam Bell, and P. Rivera Martinez, o f Puerto Rico, be added to the
list o f honorary members.]
[ A motion, duly seconded, was carried that anyone wishing to do
so be authorized to submit a resolution pertaining to apprenticeship
to the incoming executive board and that the incoming executive board
be accordingly empowered to deal with it.]
Appendixes
A p p e n d ix
A . — O r g a n is a tio n
of
In te r n a tio n a l
A s s o c ia tio n
of
G o v e r n m e n t a l L a b o r O ffic ia ls
O ffic e rs , 1 9 4 0 - 4 1
President.— Frieda S. Miller, New Y ork City.
First vice president.— Voyta Wrabetz, Madison, Wis.
Second vice president.— E. I. M cKinley, Little Rock, Ark.
Third vice president.— C. H. Gram, Salem, Oreg.
Fourth vice president.— Morgan R. Mooney, Hartford, Conn.
F ifth vice president.— L. D. Currie, H alifax, Nova Scotia.
Secretary-treasurer,— Isador Lubin, Washington, D. C.
H o n o r a r y L ife M e m b e rs
George P. Hambrecht, Wisconsin.
Frank E. W ood, Louisiana.
Linna Bresette, Illinois.
Dr. C. B. Connelley, Pennsylvania.
John H. H all, Jr., Virginia.
Herman W itter, Ohio.
John S. B. Davie, New Hampshire.
R. H. Lansburgh, Pennsylvania.
A lice McFarland, K ansas
H. M. Stanley, Georgia.
A . L. Ulrick, Iowa.
Dr. Andrew F. McBride, Minnesota.
Louise E. Schutz, Minnesota.
Maj. A . L. Fletcher, North Carolina.
Adam Bell, British Columbia.
P, Rivera Martinez, Puerto Rico.
C o n s t it u t io n
Adopted at Chicago, 1 1 1 ., May 20, 19 2 4 ; amended August 15, 1925 ; June 3, 19 2 7 ; May 24,
1928; May 23, 1930; September 15, 1933; September 29, 1934 ; September 13, 1937
A r t ic l e I
S ection 1. N a m e . — This organization shall be known as the International
Association of Governmental Labor Officials.
250
APPENDIX A
251
A r t ic l e II
S e c t io n 1. O b je c t s .— To encourage the cooperation of all branches of Federal,
State, and Provincial Governments who are charged with the administration of
laws and regulations for the protection of women and children, and the safety
and welfare of all workers in industry; to maintain and promote the best pos
sible standards of law enforcement and administrative method; to act as a
medium for the interchange of information for and by the members of the
association in all matters pertaining to the general welfare of men, women,
and young workers in industry; to aid in securing the best possible education for
minors which will enable them to adequately meet the constantly changing
industrial and social changes; to promote the enactment of legislation that
conforms to and deals with the ever-recurring changes that take place in
industry, and in rendering more harmonious relations in industry between
employers and employees, to assist in providing greater and better safeguards
to life and limb of industrial workers, and to cooperate with other agencies
in making the best and safest use of property devoted to industrial purposes;
to secure by means of educational methods a greater degree of interstate and
interprovincial uniformity in the enforcement of labor laws and regulations;
to assist in the establishment of standards of industrial safety that will give
adequate protection to workers; to encourage Federal, State, and Provincial
labor departments to cooperate in compiling and disseminating statistics dealing
with employment, unemployment, earnings, hours of labor, and other matters
of interest to industrial workers and of importance to the welfare of women
and children; to collaborate and cooperate with associations of employers and
associations of employees in order that all of these matters may be given
the most adequate consideration; and to promote national prosperity and inter
national good will by correlating as far as possible the activities of the
members of this association.
A r t ic l e III
S e c t io n 1. M e m b e r s h ip .— The active membership of this association shall
consist of—
( a ) The United States Department of Labor and subdivisions thereof, United
States Bureau of Mines, and the Department of Labor of the Dominion of
Canada.
( b ) State and Provincial departments of labor and other State and Provincial
organizations administering laws pertaining to labor.
(c) Federal, State, or Provincial employment services.
S ec . 2. H o n o r a r y m e m b e r s .— Any person who has rendered service while
connected with any Federal, State, and Provincial department of labor, and the
American representative of the International Labor Office, may be elected to
honorary membership by a unanimous vote of the executive board.
Sec. 3. A s s o c ia t e m e m b e r s h ip s .— Any individual, organization, or corporation
interested in and working along the lines of the object of this association may
become an associate member of this association by the unanimous vote of the
executive board.
A b t ic l e IV
S e c t io n 1. O fficers .— The officers of this association shall be a president, a
first, second, third, fourth, and fifth vice president, and a secretary-treasurer.
The executive board shall consist of these officers, together with the outgoing
president, who shall serve as an ex-officio member of the board for 1 year.
313421°—41----- 17
252
LABOR LAWS AND THEIR ADMINISTRATION, 1940
S ec . 2. E l e c t i o n o f officers .— Such officers shall be elected from the members
at the regular annual business meeting of the association by a majority ballot
and shall hold office for 1 year, or until their successors are elected and
qualified.
Sec. 3. The officers shall be elected from representatives of the active mem
bership of the association.
A r t ic l e V
S e c t io n 1. D u t i e s o f t h e officers .— The president shall preside at all meetings
of the association and the executive board, preserve order during its delibera
tions, appoint all committees, and sign all records, vouchers, or other documents
in connection with the work of the association. He shall fill all vacancies
caused by death, resignation, or otherwise.
Sec. 2. The vice presidents, in order named, shall perform the duties of the
president in his absence.
Sec. 3. The secretary-treasurer shall have charge of all books, papers, rec
ords and other documents of the association; shall receive and have charge of all
dues and other moneys; shall keep a full and complete record of all receipts and
disbursements; shall keep the minutes of all meetings of the association and
the executive board; shall conduct all correspondence pertaining to the office;
shall compile statistics and other data as may be required for the use of the
members of the association; and shall perform such other duties as may be
directed by the convention or the executive board. The secretary-treasurer shall
present a detailed written report of receipts and expenditures to the convention.
The secretary-treasurer shall be bonded for the sum of $500, the fee for such
bond to be paid by the association. The secretary-treasurer shall publish the
proceedings of the convention as promptly as possible, the issue to consist of
such numbers of copied as the executive board may direct. The secretarytreasurer shall receive such salary as the executive board may decide, but not
less than $300 per year.
S e c . 4. The business of the association between conventions shall be conducted
by the executive board, and all questions coming before the board shall be de
cided by a majority vote, except that of the election of honorary members, which
shall be by unanimous vote.
A r t ic l e VI
S e c t io n 1. F in a n c e s .— With the exception of those organizations included
under (a) of section 1 of article III each active member shall pay for the year
ending June 30, 1936, and thereafter annual dues of $25, except that where the
organization has no funds for the purpose, and an individual officer or member
of the staff wishes to pay dues for the organization, the fee shall be $10 per
annum for active membership of the organization in such cases.
The executive board may order an assessment levied upon affiliated depart
ments not to exceed 1 year’s dues.
Sec. 2. The annual dues of associate members shall be $10.
A r t ic l e VII
S e c t io n 1. W h o e n title d to v o t e .— All active members shall be entitled to vote
on all questions coming before the meeting of the association as hereinafter
provided.
S ec . 2. In electing officers of the association, State departments of labor
represented by several delegates shall only be entitled to one vote. The dele
gates from such departments must select one person from their representatives
to cast the vote of the group.
APPENDIX A
253
The various bureaus of the United States Department of Labor and the
Department of Labor of Canada may each be entitled to one vote.
The rule for electing officers shall apply to the vote for selecting the conven
tion city.
A r t ic l e VIII
S e c t io n 1. M e e tin g s . — The association shall meet at least once annually at
such time and place as the executive board may decide unless otherwise ordered
by the convention.
A r t ic l e IX
S e c t io n 1. P r o g r a m . —The program committee shall consist of the president,
the secretary-treasurer, and the head of the department of the State or Province
within which the convention is to be held, and they shall prepare and publish the
convention programs of the association as far in advance of the meeting as
possible.
S e O. 2. The committee on program shall set aside at least one session of the
convention as a business session, at which session the regular order of business,
and election of officers, shall be taken up, and no other business shall be con
sidered at that session until the “regular order” has been completed.
A r t ic l e X
S e c t io n 1. R u le s o f o r d e r . — The deliberations of the convention shall be gov
erned by “Cushing’s Manual.”
A r t ic l e X I
S ectio n 1. A m e n d m e n ts . — Amendments to the constitution must be filed with
the secretary-treasurer in triplicate and referred to the committee on constitu
tion and bylaws. A two-thirds vote of all delegates shall be required to adopt
any amendment.
A r t ic l e X II
S e c t io n 1. O rd er o f b u sin ess. —
1. Koll call of members by States and Provinces.
2. Appointment of committees:
(а ) Committee of five on officers’ reports.
(б) Committee of five on resolutions.
(c) Committee of three on constitution and bylaws.
( d ) Special committees.
3. Reports of officers.
4. Reports of States and Provinces.
5. Reports of committees.
6. Unfinished business.
7. New business.
8. Election of officers.
9. Adjournment.
254
LABOR LAWS AND THEIR ADMINISTRATION, 1940
D e v e lo p m e n t o f
tlie I n t e r n a t io n a l A s s o c ia tio n
o f
G o v ern m en ta l
L a b o r O ffic ia ls 1
A s so c ia tio n , o f C h ie fs a n d O ffic ia ls o f B u r e a u s o f L a b o r
No.
Date
Convention held at—
President
1
2
3
4
5
6
7
September 1883______
June 1884_______ ____
June 1885_ ...................
June 1886_ ...................
June 1887____________
May 1888____ ____ ___
June 1889____________
1890 2....................... .
May 1891___________
May 1892______ _____
1893 2 _______________
May 1894___________
September 1895______
June 1896____________
May 1897_ _________
June 1898____________
July 1899____________
July 1900__________
May 1901___________
April 1902___________
April 1903___________
July 1904____________
September 1905______
July 1906___________
July 1907____________
August 1908_________
June 1909____________
Columbus, Ohio_______
St. Louis, M o_________
Boston, Mass_____ ____
Trenton, N. J_________
Madison, Wis_________
Indianapolis, Ind _____
Hartford, Conn________
Des Moines, Iowa_____
Philadelphia, P a ______
Denver, Colo___ ____
Albany, N. Y _________
Washington, D . C _____
Minneapolis, M inn____
Albany, N. Y _________
Nashville, Tenn_______
Detroit, M ich________
Augusta, Maine_______
Milwaukee, Wis_______
St. Louis, M o_________
New Orleans, La_____
Washington, D. C ___
Concord, N. H_ _______
San Francisco, Calif___
Boston, Mass.................
Norfolk, Va___________
Detroit, M ich_________
Rochester, N. Y__.........
H. A. Newman________
__ __do_
_ _ _ ___
Carroll D. W rig h t____
____do________________
__ __do_ _______ _
.
____do_ __________ ..
____do ______ _____ _
____do___________ ____ _
___ do_ _____ __________
Charles F. Peck___
.d o
___
Carroll D. Wright- __
_do __ _ _____ _
____do_ ______________
____ do_________ ____
____ do________________
___ d o ____ ___________
____do _______________
____do..................... ........
____do________________
_do _
_____ _
____do __ ____ _ _ ____
____do .
______ _
Charles P. NeilL— _ __
____ do________________
____do________________
____do_ ................. ........
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Secretary-treasurer
Henry Luskey.
Do.
John S. Lord.
E. R. Hutchins.
Do.
Do.
Do.
Do.
Frank H. Betton.
Do.
Do.
L. G. Powers.
Do.
Samuel B. Home.
Do.
Do.
Do.
James M . Clark.
Do.
Do.
Do.
Do.
W. L. A. Johnson.
Do.
Do.
Do.
Do.
1 Known as Association of Governmental Labor Officials, 1914-27; Association of Government Officials
in Industry, 1928-33.
2 No meeting.
I n t e r n a t i o n a l A s s o c ia tio n o f F a c t o r y I n s p e c to rs
No.
Date
Convention held at—
President
1
2
3
4
5
6
7
8
9
10
June 1887
August 1888_______ _
August 1889 ________
August 1890
__ _
August 1891 . ______
September 1892 __ _.
September 1893 ____
September 1894_ ____
September 1895_ ____
September 1896 ____
August and Septem
ber 1897.
September 1898
August 1899 ________
October 1900 _
September 1901- _
December 1902. _ __ __
August 1903_ _______
September 1904 __ _
August 1905
__ __
June 1906 _ _____ _
June 1907 ____ _____
June 1908 __________
June 1909_ ______ ______
Philadelphia, Pa__
__
Boston, Mass_________
Trenton, N. J_________
New York, N. Y ______
Cleveland, Ohio_______
Hartford, Conn__ __ __
Chicago, 111___________
Philadelphia, P a . _____
Providence, R. I _______
Toronto, Canada______
Detroit, Mich..... ......... -
Rufus Wade__ ______
____ do________ _____ —
____do________________
____do. ______________
____ do_ ______ ________
William Z. McDonald __
John Franey__________
___do _______________
___ do ______________
C. H. Morse__________
Rufus R. Wade_______
Henry Dorn.
Do.
Do.
L. R. Campbell.
Isaac S. Mullen.
Do.
Mary O’Reilly.
Do.
Evan H. Davis.
Do.
Alzina P. Stevens.
Boston, Mass_______—
Quebec, Canada. ___
Indianapolis, Ind ____
Niagara Falls, N. Y ____
Charleston, S. C _______
Montreal, Canada_____
■St. Louis, M o.
_ _
Detroit, Mich_________
Columbus, Ohio______
Hartford, Conn________
Toronto, Canada______
Rochester, N. Y _______
___do. ______ ____
__ _.do_ ______________
James Campbell_______
. — do. __
______
John Williams_________
James Mitchell________
Daniftl H. Mr. Ahr.r.
Edgar T. Davies. _ ___
Malcolm J. McLead___
John H. M o rg a n .___
George L. McLean_____
James T. B u r k e .._____
Joseph L. Cox.
Do.
Do.
R. M. Hull.
Do.
Davis F. Spees.
Do.
C. V. Hartsell.
Thomas Keity.
Do.
Do.
Do.
11
12
13
14
15
16
17
18
19
20
21
22
23
Secretary-treasurer
J o i n t M e e tin g o f t h e A s s o c ia tio n o f C h ie fs a n d O ffic ia ls o f B u r e a u s o f L a b o r
a n d I n t e r n a t i o n a l A s s o c ia tio n o f F a c t o r y I n s p e c to r s
No.
24
25
26
27
Date
Convention held at—
August 1910............... . Hendersonville, N. C.,
and Columbia, S. C.
September 1911 ____ Lincoln, Nebr-------------September 1912. ____ Washington, D. C _____
May 1913___________ Chicago, 111.... ................
President
J. Ellerly Hudson..........
Secretary-treasurer
E. J. Watson.
Louis Guyon.................. W. W. Williams.
Do.
Edgar T. Davies...........
A. L. Garrett__________ W . L. Mitchell.
255
APPENDIX A
International Association of Governmental Labor Officials1
[Resulting from amalgamation of the Association of Chiefs and Officials of Bureaus of Labor and the Inter
national Association of Factory Inspectors]
Convention held at—
President
Secretary-treasurer
11
12
13
14
15
June 1914_____
June-July 1915.
July 1916______
September 1917.
June 1918_____
June 1919.........
July 1920_____
May 1921..........
May 1922.........
May 1923..........
May 1924..........
August 1925___
June 1926_____
May-June 1927.
May 1928.
Nashville, Tenn_______
Detroit, Mich_________
Buffalo, N. Y _________
Asheville, N. C ________
Des Moines, Iowa_____
Madison, Wis_________
Seattle, Wash_________
New Orleans, L a........
Harrisburg, P a .............
Richmond, Va________
Chicago, 111..................
Salt Lake City, U tah...
Columbus, Ohio_______
Paterson, N. J..............
New Orleans, La______
W. L. Mitchell.
John T . Fitzpatrick.
Do.
Do.
Linna E. Bresette.
Do.
Do.
Do.
Do.
Louise E. Schutz.
Do.
Do.
Do.
Do.
Do.
16
17
18
June 1929May 1930.
May 1931.
Toronto, Canada______
Louisville, K y ________
Boston, M ass................
19
20
21
22
23
24
25
September 1933 *.
September 1934.
October 1935. __
September 1936.
September 1937.
September 1938.
September 1939.
Chicago, 111.............. ......
Boston, Mass_________
Asheville, N. C ________
Topeka, Kans_________
Toronto, Canada______
Charleston, S. C _______
Tulsa, Okla__________ _
Barney Cohen_________
___ do---- --------- ----------James V. Cunningham..
Oscar Nelson__________
Edwin Mulready______
C. H. Younger------------Geo. P. Hambrecht____
Frank E. Hoffman_____
Frank E. W ood_______
C. B. Connelley_______
John Hopkins Hall, Jr...
George B. Arnold______
H. R. Witter__________
John S. B. Davie........
H. M . Stanley3_______
Andrew F. McBride___
(Andrew F. M cBride3...
(.Maud Swett__________
Maud Swett__________
rJohnH. H. Ballantyne4.
[W. A. Rooksbery______
HE. Leroy Sweetser®____
|E. R. Patton..............
T. E. Whitaker_______
Joseph M . Tone_______
A. W . Crawford_______
A. L. Fletcher_________
W. A. Pat Murphy____
Martin P. Durkin_____
No.
1
2
3
4
5
6
7
8
9
10
Date
Do.
Do.
|
DO.
jM aud Swett.
Isador Lubin.
Do.
Do.
Do.
1 Known as Association of Governmental Labor Officials, 1914-27; Association of Government Officials
in Industry, 1928-33.
a Mr. Stanley resigned in March 1928.
3 Dr. McBride resigned in March 1929.
4 Mr. Ballantyne resigned in January 1931.
6 No convention was held in 1932, but a meeting of the executive committee and other members was held
in Buffalo in June 1932 to discuss matters of interest to the Association.
6 Mr. Sweetser served as president from May 1931 to the end of December 1932.
Appendix B.—Persons Attending the Twenty-sixth Convention
of the International Association of Governmental Labor Officials
UNITED STATES
A rk a n sa s
E. I. McKinley, commissioner of labor, Little Rock.
Mrs. Bess Proctor, department of labor, Little Rock.
C o n n e c tic u t
Morgan Mooney, deputy commissioner of labor, Hartford.
D e la w a r e
J. M. Reese, commissioner of labor, Wilmington.
D i s t r ic t o f C o lu m b ia
Arthur J. Altmeyer, Chairman, Social Security Board.
Miss Mary Anderson, Director, Women’s Bureau, United States Department
of Labor.
Mrs. Clara M. Beyer, Chairman, Federal Committee on Apprenticeship Training,
United States Department of Labor.
256
LABOR LAWS AND THEIR ADMINISTRATION, 1940
R. P. Blake, Division of Labor Standards, United States Department of Labor.
Robert W. Bruere, Maritime Labor Board.
W. T. Cameron, Division of Labor Standards, United States Department of
Labor.
Col. Philip B. Fleming, Administrator, Wage and Hour Division, United States
Department of Labor.
John S. Gambs, United States Department of Labor.
Carl E. L. Gill, Conciliation Service, United States Department of Labor.
E. K. Jenkins, United States Department of Labor.
Ethel M. Johnson, Acting Director United States Office, International Labor Office.
William Leiserson, National Labor Relations Board.
Max D. Kossoris, Bureau of Labor Statistics, United States Department of
Labor.
O. J. Libert, Wage and Hour Division, United States Department of Labor.
Isador Lubin, Commissioner of Labor Statistics, United States Department of
Labor.
Beatrice McConnell, Children’s Bureau, United States Department of Labor.
William F. Patterson, Federal Committee on Apprenticeship Training, United
States Department of Labor.
Frances Perkins, Secretary of Labor, United States Department of Labor.
A. J. Sarre, Labor Division, Advisory Commission to the Council of National
Defense.
Charles F. Sharkey, Bureau of Labor Statistics, United States Department of
Labor.
Louise Stitt, Women’s Bureau, United States Department of Labor.
Arthur G. Stevens, Bureau of Labor Statistics, United States Department of
Labor.
Robert J. Watt, American Federation of Labor.
Sidney W. Wilcox, Bureau of Labor Statistics, United States Department of
Labor.
Miss Helen Wood, Wage and Hour Division, United States Department of
Labor.
F lo r id a
Harold C. Wall, chairman, industrial commission, Tallahassee.
Illin o is
Martin P. Durkin, director, department of labor, Chicago.
John M. Falasz, department of labor, Chicago.
Joseph T. Faust, department of labor, Chicago.
In d ia n a
Thomas, R. Hutson, commissioner of labor, Indianapolis.
Io w a
A. Holberg, Des Moines.
K a n sa s
Loraine Edmunds, department of labor, Topeka.
Nellie Kennedy, department of labor, Topeka.
APPENDIX B
257
M a r y la n d
John M. Pohlhaus, commissioner of labor and statistics, Baltimore.
M ic h ig a n
John H. Thorpe, department of labor and industry, Lansing.
M in n e s o ta
Lloyd J. Haney, department of labor and industry, St. Paul.
M is s o u r i
Morris B. Landau, St. Louis.
Earl H. Shackelford, commissioner, department of labor and industrial inspec
tion, Jefferson City.
N e w H a m p s h ir e
John S. B. Davie, commissioner of labor, Concord.
Mrs. John S. B. Davie, Concord.
N ew J ersey
Ed. J. Flynn, Jr., Trenton.
Mrs. Dorothy S. Isserman, Maplewood.
D. H. O’Connell, Westfield.
John J. Toohey, Jr., commissioner, department of labor, Trenton.
W. A. Weir, Newark.
New York
Mrs. Rose B. Abramson, New York Joint Child Labor Committee, New York.
Alice Adanolian, Welfare Council, New York.
Beulah Amidon, The Survey, New York.
Mrs. F. K. Anderson, Y. W. C. A., New York.
John B. Andrews, American Association for Labor Legislation, New York.
Sybil Applebaum, Wage and Hour Division, New York.
Mary N. Arrowsmith, Y. W. C. A., New York.
S. Auphauser, New York.
C. Bellaven, New York.
Julius Bisour, department of labor, New York.
George E. Bley, department of labor, New York.
Bess Bloodworth, Brooklyn.
Father John P. Boland, State labor relations board, New York.
John G. Bollinger, department of labor, New York.
Robert L. Bond, New York.
Mrs. Alvin Bossak, Scarsdlale.
E. P. Bordeaux, department of labor, New York.
Louie D. Brown, department of labor, New York.
Robert Brown, New York.
R. S. Bonsib, Scarsdale.
John J. Brennan, New York.
Richard B. Brown, Wage and Hour Division, New York.
Lucille J. Buchanan, department of labor, New York. .
Mary G. Burch, Brooklyn.
Mr. B. J. Buttenwieser, New York.
258
LABOR LAWS AND THEIR ADMINISTRATION, 1940
J. Robert Campbell, Social Security Board, New York.
Harry Chartovitz, Social Security Board, New York.
John Coggeshall, department of labor, New York.
S. J. Cohen, department of labor, New York.
A. J. Cohen, department of labor, New York.
Fanriia M. Cohn, New York.
Cara Cook, New York.
Mrs. James A. Corcoran, New York.
W illiam Crost, New York.
Thomas J. Curtis, New York.
George C. Daniels, department of labor, New York.
Lincoln Davis, department of labor, New York.
Gladys Deckinger, New York.
George A. Derauf, New York.
Courtenay Dinwiddie, New York.
Evelyn Doran, New York.
Mary Dublin, New York.
Bessie Engleman, New York.
John E. Gallagher, department of labor, New York.
Paul Geprays, New York.
W illiam Gibelman, department of labor, New York.
G. W . Gillen, department of labor, New York.
Rashelle Goldberg, department of labor, New York.
David L. Gordon, New York.
Mrs. Robert S. Gordon, Scarsdale.
Dr. Leonard Greenburg, department of labor, New York.
G. D. Hallo, Kew Gardens.
Ruth N. Hand, National Youth Administration, New York.
Elizabeth Hasmovitz, New York.
Peter Henle, New York.
N. H. Hertzberge, department of labor, New York.
Paul M. Herzog, State labor relations board, New York.
Elinore Herrick, New York.
Laurence Hosie, New York.
John Hoffman, department of labor, New York.
W illiam N. Hudson, New York.
Mrs. Hortense Hudson, New York.
Frances Hudeson, New York.
Aaron Horvitz, United States Department of Labor, New York.
Sadie Horowitz, New York.
Robert D. Jackson, Social Security Board, New York.
H. Eliot Kaplan, New York.
Fritz Kaufmann, department of labor, New York.
John Kaufmann, New York.
David D. Kelly, department of labor, New York.
Edith S. King, New York.
F. O. Koelteritz, W age and Hour Division, New York.
Marie Longchamp, New Rochelle.
Fiorina Lasker, New York.
Martha Levine, New York.
Milton O. Loysen, department of labor, New York.
M. McMahon, department of labor, New York.
G. W . McMein, department of labor, New York.
Dorothea Maier, department of labor, New York.
APPENDIX B
E. Mackenzie, New York.
T. J. Mahoney, New York.
Mary Mardany, department of labor, New York.
Sarah Marshall, New York.
H. W . Marsh, New York.
May It. Mayers, department of labor, New York.
Iiobin Mazel, department of labor, New York.
Julie Meyer, New York.
Millard L. Midonick, New York.
V. Midonick, New York.
Frieda S. Miller, industrial commissioner, New York.
John D . Moore, State labor relations board, New York.
Nanette Morrell, Y. W . C. A., New York.
Pauline Newman, New York.
Joseph B. O’Connor, Social Security Board, New York.
James C. Quinn, New York.
Kate Papert, department of labor, New York.
Chester H. Patton, department of labor, Bronxville.
Orlie Pell, New York.
Lillian L. Poses, Social Security Board, New York.
Roberta Randolph, New York.
H . W . Reed, department of labor, New York.
Anita Roberts, New York.
Mrs. Charles Roe, New York.
Julian Rosner, New York.
Mrs. Anna M. Rosenberg, Social Security Board, New York.
Alice Rosenblatt, New York.
Sadie Rusch, New York.
Norris Sacharoff, W age and Hour Division, New York.
Laura Santiago, New York.
Esther G. Scheff, Social Security Board, New York.
Godfrey P. Schmidt, department of labor, New York.
Florence Schneider, New York.
Rose Schneiderman, department of labor, New York.
H. A. Schulson, New York.
Benjamin Schwartz, New York.
Anna Lord Shauss, New York.
E. Frank Shapiro, New York.
Eleanor Sherman, department of labor, New York.
James J3. Sidel, New York.
Louis Siess, department of labor, New York.
Jonas Silver, New York.
Robert Silverman, N. Y. A., New York.
Mark Starr, New York.
G. M. Sullivan, New York.
Helen R. Sun ter, New York.
Charlotte R. Turk, Social Security Board, New York.
D. Y. Varley, New York.
David J. Williams, New York.
Arthur J. White, W age and Hour Division, New York.
Edward A. Wieck, New York.
K. Wanda Wojcieszak, New York.
Frieda Wunderlich, New York.
Gertrude F. Zimand, New York.
259
260
LABOR LAWS AND THEIR ADMINISTRATION, 1940
N o r t h C a r o lm a
Forrest H. Shuford, commissioner of labor, Raleigh.
Mrs. Forrest H. Shuford, Raleigh.
N o r t h D a k o ta
Math Dahl, commissioner of labor and agriculture, Bismarck.
H. R. Martinson, department of labor and agriculture, Bismarck.
O r eg o n
C. H. Gram, commissioner of labor, Salem.
Mrs. C. H. Gram, Salem.
P e n n s y lv a n ia
Lewis G. Hines, secretary, department of labor and industry, Harrisburg.
Harry D. Immel, department of labor and industry, Harrisburg.
Mary R. Morrow, department of labor and industry, Harrisburg.
P u e r to R ic o
P.
Rivera Martinez, commissioner of labor, San Juan.
R h o d e Is la n d
Harvey Saul, director, department of labor, Providence.
S o u t h C a rolin a
Earle R. Britton, Columbia.
W . Rhett Harley, commissioner of labor, Columbia.
U ta h
Ray R. Adams, industrial commission, Salt Lake City.
V irg in ia
Thomas B. Morton, commissioner of labor and industry, Richmond.
W e s t V irg in ia
Frank W . Snyder, commissioner of labor, Charleston.
W is c o n s in
C. L. Miler, industrial commission, Madison.
Maud Swett, industrial commission, Milwaukee.
Voyta Wrabetz, chairman, industrial commission, Madison.
CANADA
B r i t is h C olu m b ia
Adam Bell, Deputy Minister of Labor, Victoria.
Mrs. Adam Bell, Victoria.
N o v a S c o tia
L.
D. Currie, department of labor, Halifax.
O n ta rio
R. B. Morley, Industrial Accident Prevention Associations, Toronto.
Carter Goodrich, United States Labor Commissioner (International Labor Or
ganization, Montreal, Canada), New York, N. Y.
o
@FedFRASER