most of the local communities of this Nation, as conditions exist. now and have existed for a long time, for us to throw these people back onto the local communities and expect them to give them adequate support.

I have thought a good deal about what are the objectives of private business. I am reasonably sure in my own mind that there are two main objectives. One is to supply goods and service to the people, and the other is to supply jobs to the people. If private business fails in either one, either through its own fault or by reason of circumstances beyond its control, it has failed in one of the two chief objectives of private business. It has failed to give employment to people who need it, and we are today still facing a situation with millions of people out of employment who must be fed or supported in some way or manner. We are confronted with a situation that we have never met before. We have met it in an unscientific manner, but perhaps the best manner possible under the immediate circumstances. But I prefer to try to evolve a plan which will give jobs to the people who need them, in private business.

It may be true, that private business, on account of technological advances, will have to have its purchasing power supplemented continuously and permanently by public works; but, if so, those public works should be reduced, in my judgment, to the lowest point possible. Therefore, I favor shortening the working hours in private industry in order that these people may be given jobs at private work. It is inevitably true that business must support these people in one way or another. It can continue to support them through taxes, constantly increasing the amount of taxes, supporting them either through charity without work or jobs through public enterprises; or it can arrange its business affairs in such way that private business can absorb them in its own work.

I do not believe that it is possible for private business to absorb these people with the present hours of labor. I have read with a good deal of interest the supposed scientific study issued by the Brookings Institute. Except as to statistics that have been taken from authenticated Government figures. I find that their conclusions are not very compelling or persuasive to one who gives them careful study. I rather believe, as I believed before, that the opinion of those who have seen that the rapidly increasing productive capacity of our wage earners makes it necessary to reduce hours, is still correct. Certainly since 1929 there has been nothing that has occurred which tends to show that private industry could or would absorb the unemployed workers on the present hours of labor, or on the reduced hours of labor brought about by the National Recovery Administration. It has not done so, and there seems to be nothing at present to indicate that it will absorb them. The figures I have been able to find indicate that such a thing is impossible.

I am not going into any figures before this committee on that subject. I do desire to read a statement made several years ago by Mr. Ralph E. Flanders, who was then vice president of the American Society of Mechanical Engineers. This appeared in the publication of the American Academy of Politics and Science for July 1932, in which he said:

So profuse is the output of our natural resources and of our factories, so complete are our commercial organizations and our transportation systems, so effi

cient, on the whole, is the use of human labor in these activities and so lavish is the application of power, that the practical limit of the production and distribution of goods is beyond our conception. So far as possibilities are concerned, those limits are set only by the desirable rate of use of natural resources, and by whatever balance our population shall determine on as between the enjoyment of leisure and of goods. Practically, the limits are set by faulty and economic organization; and herein, of course, lies the problem.

A short time ago, and shortly after these two gentlemen connected with the Brookings Institute issued their book, a committee under the administration of the United States Government entered into a national survey of potential productive capacity. After a long investigation with a number of engineers and employees they reached the conclusion that in 1929 goods with service value of a little more than $90,000,000,000 had been produced, and that goods with a service value of over 135 billion could have been produced had the existing plants been operated at approximate capacity.

In other words, they found that that would have been a sufficient amount of production, if divided, to give $4,400 to each family in the Nation, instead of $2,800 to each family in the Nation, averaged, under the actual production in 1929. That was an increase of 45 percent that that investigation showed could have been produced in 1929 if our production plant had been run to capacity. That, by the way, was more than twice the surplus that the Brookings Institute investigators reached the conclusion could have been produced. I want to give just two or three examples of what has been happening, and these are taken from Government statistics. These are with reference to the output per wage earner, and not per capita. In the Brookings Institute book they say "output per capita", which is necessarily and completely misleading. What we are interested in is not the output per capita, including those who work and those who do not work. We are interested in the output of those who actually work or are capable of working.

Cotton-mill operation dropped from 472,000 in 1923 to 425,000 in 1929, although there was no drop in output in the textile business or cotton manufacturing. The output per man in soft coal increased 60 percent since 1900, copper mining doubled, and iron ore practically trebled. This appears in the Brookings Institute investigation taken from Government statistics. The output per man-hour in pressrooms has increased from 100 to 200 percent in 20 years. That is found in a statement made by Elizabeth Faulkner Baker, on the subject of "Displacement of Men by Machines", in 1915.

Right here may I state that the original bill did not include publishers, but this bill does. It might be surprising to learn that the publishing business ranks right at the top of all the vast business enterprises in this country with reference to manufactured products. They rank above automobiles and steel. It covers a large number of people in this Nation. It is organized and conducted as a business for profit. It is not a philanthropic enterprise. I see no reason why it should be exempted from a law which would apply to other industries employing a large number of people. Consequently it is included and, in my judgment, it should remain included in any measure which regulates the hours of work. Certainly, it seems to me we should not exclude or exempt an industry which ranks right at the top in this Nation, and which is displacing men by inventive genius as rapidly as, if not more rapidly than, any other kind of industry in the entire Nation.

Senator AUSTIN. In which paragraph of the bill does that appear? Senator BLACK. In the original bill they were excluded by name. That has been eliminated from this measure.

Senator AUSTIN. I see. Thank you.

Senator BLACK. In the report on "Recent Economic Changes", made by President Hoover's committee, some very interesting studies are shown to have been made by that group of investigators. They made an investigation, for instance, of 35 factories engaged in various kinds of work which had continues records from 1919 to 1927. Their study showed an increased production per man-hour of 75 percent over that period from 1919 to 1927. And from 1924 to 1927, during these 3 crowded years, that study showed an increase in production per man-hour of 39 percent. That is an illustration of the rapidly growing business of this country, and the increased production per man-hour which must necessarily affect the number of men and women engaged in productive enterprises in America.

It has never been my own idea that this Government should adopt any plan which will retard such growth. Instead of being against it, I favor it. I see no reason why we should not in every way encourage the invention of machinery which will displace human labor; but when we do that we will continue to throw our economic machinery wholly and completely out of balance if we increase profits of the employer and decrease aggregate earnings of those who work. Therefore, we find ourselves at a place where we must make a choice.

Let us take the automobile industry, for instance. Their production increased 888 percent from 1914 to 1925, a marvelous growth and increased productivity of labor. With other industries in the Nation following along the same course with inventive genius unbalanced, permitted to go as far as it can, we will find ourselves, in my judgment, at a place where we must make a choice. That will necessarily continue to release men from employment. Studies of other industries show exactly the same thing, that they have continued to produce as much or more with fewer human beings engaged in labor. Now, of course, we can simply employ fewer people and raise the wages of those who are employed. That is a theory, but it has not worked out in practical application. If that were done we would still have the problem of supporting those who had been thrown out of work. The only recourse left would perhaps be to follow the recommendation of the gentlemen at White Sulphur Springs, and simply discard them permanently and give them charity, to which I am opposed. Or we could send them back to local communities and let them starve to death. In local communities the people are just eking out a bare existence.

Another course we could follow would be to simply divide the work among those who are left with shorter hours and no increase in wages. If we do that we decrease purchasing power, and finally we have reached the point, I think, where most of the people recognize that the only thing in the world that will put machines and men to work is purchasing power. The spring that starts the wheels to running is the idea of a profit. The only way they can ever hope to have a profit is to have solvent customers. Most of their customers are the men who depend for their living upon what they raise on the farm or what they get for their daily work. I believe that careful and conservative estimates will show that over 90 percent of the entire pur

chasing power of this Nation comes from those who depend in the main upon the prices for their farm products and the prices of their wages or salaries. Sometimes they will be commingled with dividends, but there are very few dividends that go to those in the lower income brackets.

Another method that could be adopted to take care of the people who are dismissed would be to take care of them on public works. Of course, if we take care of them on public works that competes with the private activities of industry. We have to that extent deprived those employees who work in industrial activities of a portion of their income. So the question arises of finding the necessary public works, such as roads, highways, parks, waterways development, and so forth. It is my own opinion that we must continue to employ a large number of people on public works, even if we shorten hours, because I do not believe that even the 40-hour week, from the study I have made of it, can possibly absorb all the people in private employment, but until they can absorb at least a maximum number, the last alternative will be to adopt a shorter workweek and workday with increased wages. Our system has built up such conditions that profits are destroyed, unless we pay good wages and good farm prices, because the system absolutely depends upon good wages and good prices. The distribution of income is between those who draw interest, those who draw wages, and those who draw rents or profits. If you fail to do that, you reduce the purchasing power of one group. It has been shown by numerous studies that we have a situation where income is growing in large amounts with a very small group of people, and incomes are lessening to a large group of people. That is shown by statements made by many people, and also included in the Brookings Institute report, where they analyze census figures and income, and show that 28 percent of the income is drawn by 2 percent of the people, and 28 percent is drawn by 65 percent of the people. It also shows that 82 percent of the people must depend upon incomes under $2,000.

The plan contemplated by this measure, therefore, is to apply a uniform rate to all industry. It seems to me to be wholly unfair to apply, for instance, a 36- or 40-hour week to one industry, and apply a 40- or 48-hour week to another industry that may compete, directly or indirectly, with the first one. It always has seemed to me and seems to me now that the fairest way to all industries, to all groups of industrial activity, is to apply a uniform workday and workweek to these various industries, instead of attempting to fix a certain workday or week for one industry, and another for another, while millions of people still continue to be supported by public charity.

It is manifest that we have more than enough people today, and have had since 1929, even if we could shorten the workweek to 30 hours, to produce far more than we have produced since 1929. The idea that the 30-hour week will reduce the production, in my judgment, is wholly erroneous and a misconception of the true situation. It is my belief that it will increase production, even if we were to go back to one of the peak months, as the Brookings Institute has done, in 1929. And if we study those figures carefully, not the conclusions, but the figures on which they base their conclusions, we will find that with the 30-hour week even at that time we could have fully taken care of every demand.

They, for instance, accept one shift where the plant was working one shift. What reason was there why they could not have worked two shifts, if it was necessary to produce? They adopt a service requirement, and they have adopted every kind of plan that might be found in the inefficient production system in order to reach the conclusion they finally reached that we were only producing within 80 percent of our capacity. Even if we were, it would have been only for a short time. Certainly the history of every decade has shown, in the last few decades, that the 30-hour week would have produced far more than we did produce through those years, and would have given the people far more than they had, if the incomes had been distributed in such way that they would balance.

This bill is intended to bring about a more equitable distribution of incomes. Purchasing power in this country is the only method for the distribution of income. It cannot come any other way. Income may come from profits, or may come from dividends, or may come from interest, or may come from wages. I include in the word "wages" the farmer's income, because I consider that in the broad economic sense that is wages. During the time we thought we were doing so well, along in the twenties, we found the farmer's income went down to the point where his dollar would buy only 50 cents worth of what he produced.

During your consideration of this bill you will notice one very significant fact. When an effort is made to raise the standard of living of the average man, immediately an attempt is made to bring a line of hostility between the farmer and the wage earner. There is no natural line of hostility between the farmer and the wage earner. There is no such line between those who occupy the lower-income brackets. There is no reason why increased wages should injure the farmer, or increased farm prices should injure the wage earner. The farmer depends in the main for his customers upon other farmers and other wage earners. He cannot depend upon that 2 percent that draws such a large proportion of the national income. He must depend upon the large percentage that draws a small percentage of the national income. So that the farmer and the wage earner are naturally drawn together, and, in my judgment, cannot be separated.

It will be the objective before this committee and before the country to try to make the farmers of the nation hostile to this measure, because they say it will raise the price of the things they have to buy. In the first place, according to a study which appeared yesterday in the Washington Post, labor's share of the cost of production was 16.8 percent. If you were to concede that increasing the wages would increase the prices, it could only increase prices one-sixth if every dime of it should be included in the increased price, because it is only onesixth of the cost. What has always happened when there was an increase in wages was that that has always been pyramided far more than the increased cost. If they would take every dime of it, it would be only one-sixth.

In the next place, there is no hostility between the farmer and the wage earner because they are each others' customers. The solvent wage earner can pay more for butter and milk and other products of the farm than the insolvent. The same is true of the farmer. The farmer who is solvent can pay a good deal more for the products of the farm and factory than one who is insolvent. What I am seeking to do and what those who favor this measure are seeking to do is to raise