only as they are felt. They make themselves felt largely in leisure hours. The man who worked 15 and 16 hours a day desired only a corner to lie in and a hunk of food. He had no time to cultivate new needs. No industry could ever be built up by filling his needs because he had none but the most primitive.

It is perfectly proper for the Government to step into an industrial situation with laws-provided those laws only establish what experience has already demonstrated to be the best practice. Eight-hour-day laws are now all right because the 8-hour day has been established. But a 5-day week law would be unwise at this moment and so also would laws restricting the use of machinery. Any law passed in the belief that it will make work or spread work over more than the usual number of men is an invitation to poverty. And poverty always accepts the invitation. A deal of the poverty abroad may be traced to political make-work laws.

The right use of leisure must be learned by experience. And there was no proper leisure in the old times. There was only idleness. Merely to make a bare living-that is, to provide the things to be currently consumed, such as food and clothing-requires very little time. The mere living is earned very early in the working day. That part of the business is over and done before the morning has well begun. We go far wrong when we say that it requires all the work that we do to earn our living. In these days we require so many more things than a living that a living has become the smallest part of what we earn. But there are a thousand other things that enter into the matter now-all the material necessities, conveniences, advantages, and opportunities of civilization. Our industries are turning these out in quantity, and the individual worker is providing his own share.

We have no leisure class in this country. All the business of the wealthy would not support a single industry. Our buying class is our working class, and our working class must also become our "leisure class" if our immense production is to be balanced by consumption. Besides, it is only just and human and progressive and educational that the people should use what they produce. That then, is the new basis for leisure. Instead of hurting business it helps it. We seem to forget that business is one-half use. If we always produced and never used, there could be no business. But when we apportion the time between production and use we are acting in accordance with economic law.

The burden of adjusting these functions so that they support each other falls upon management. There is no charity involved. Leisure, like everything else, must be earned. No one has control of enough of anything in this world to give a constant supply of it to anyone; we must all produce it together. And this means a type of workman who knows the value of both leisure and labor. A man who knows how to employ his free hours well will also know how to employ his working hours to best advantage. The two cannot very well be mixed, but the type of individual who can work with a will is the type that can also play with a will, and in his play he will be using the accumulated production of his labor.

The people with a 5-day week will consume more goods than the people with a 6-day week. People who have more leisure must have more clothes. They must have a greater variety of food. They must have more transportation facilities. They naturally must have more service of various kinds.

This increased consumption will require greater production than we now have. Instead of business being slowed up because the people are "off work," it will be speeded up because the people will have more leisure to buy and will consume more in their leisure than in their working time. This will lead to more work. And this to more profits. And this to more wages. The result of more leisure will be the exact opposite of what most people might suppose it to be.

Management must keep pace with this new demand-and it will. It is the introduction of power and machinery in the hands of management that has made the shorter day and the shorter week possible. That is a fact which it is not well to forget.

Naturally, all services cannot go on the 5-day basis. Some must be continnous and other are not yet so organized that they can arrange for 5 days a week. But, if the task is set of getting more done in 5 days than we now do in 6, then management will find the way.

The 5-day week is not the ultimate, and neither is the 8-hour day. It is enough to manage what we are equipped to manage and to let the future take care of itself. It will, anyway. That is its habit. But probably the next move will be in the direction of shortening the day rather than the week.

Mr. OLIVER. In this book, Mr. Ford, referring to what he had said in 1926, said:

The country is ready for the 5-day week. It is bound to come through all industry. In adopting it ourselves, we are putting it into effect in about 50 industries, for we are coal miners, iron miners, lumbermen, and so on. The short week is bound to come because without it the country will not be able to absorb its production and stay prosperous.

A little later in the same quotation he said:

Of course, the full case for the 5-day week cannot be proved unless it carries with it a 6-day pay. The purpose of the 5-day week is not to compel the people to live on five-sixths of their present income, but to enable them to earn their present income, or more, in five-sixths of the time. In order to earn, men must be enabled to earn, and this enablement is the responsibility of management.

The CHAIRMAN. That policy had the approval of all the leading economists of the country at the time.

Mr. OLIVER. My impression is that after the depression hit, they felt

it was

The CHAIRMAN. I remember quoting Mr. Nourse, who became the Chairman of the Economic Council, away back in 1936 when I was here in the Senate in discussions of this problem. He had taken that position. He said the royal road to improvement in this country is to increase wages without increasing prices and to maintain purchasing power in the hands of the people-something to that effect. I cannot remember his exact language at this time.

Mr. OLIVER. I believe the idea had very general support among the country's economists after the depression hit. There was a little element of hindsight in it rather than foresight.

The CHAIRMAN. This problem of the distribution of the products of industry is a problem that is bothering the whole world; isn't it? Mr. OLIVER. Yes, and it is becoming serious.

The CHAIRMAN. It is the great economic problem of the European countries and of all countries.

Mr. OLIVER. It is becoming much more serious in the United States right now than it has been over the past 10 or 15 years. It is becoming acute again, as it was toward the end of the cycle that ended in 1929.

Mr. Ford was the outstanding pioneer in the introduction of the 5-day week, but there had been a fairly significant segment of American industry in which the 5-day week had been introduced before the depression. Perhaps 4 or 5 percent of the total work force of the country had been put on a 5-day week, the bulk of that in the construction industry, but also a substantial percentage in automobiles. I have already quoted the NRA policy to the committee. Mr. Loomis quoted part of a section of the report on the NRA. Two paragraphs below that section quoted by Mr. Loomis appears this state

ment:

Thus the PRA period represents an unusual experience. The course of industrial trends was completely changed. Actual weekly hours were shortened; hourly earnings were raised considerably; actual weekly earnings for employed workers were slightly increased; and the total labor income was strikingly expanded during a short period. New buying power was in the hands of the workers.

I should perhaps point out in connection with the reference to the PRA a period that the President's Reemployment Agreement was promulgated in July 1933 in order to accelerate the change that was

being made. It was in advance of most of the codes, I think of practically all of them. As a matter of fact, there were only about 100 codes in effect by November of 1933, and a second hundred in effect by the following February 1934, out of a total of more than 500. So, the codes came only after the President's Reemployment Agreement had fixed the pattern for the change. It is to that agreement that you have to look for the basic policy. The codes came afterward in a situation where the fundamental principles had already been carried out and put into effect.

The pertinent provisions of the President's Reemployment Agreement have already been quoted. Although this agreement had accomplished a primary labor purpose of the NRA, in reducing the workweek with maintenance of take-home pay, many of the codes also included specific provision for that change. Mr. Loomis has stated that the increase in earnings during this period reflects increases in minimum wages, but does not represent wage increases granted to maintain take-home pay. This contention does not agree with the basic facts. For example, the provision from the Cotton Textile Code, a low-wage industry-where, if anywhere, Mr. Loomis' statement on the minimum wage would be true-reads:"

XIII. The amount of differences existing prior to July 17, 1933, between the wage rates paid various classes of employees (receiving more than the established minimum wage) shall not be decreased-in no event, however, shall any employer pay any employee a wage rate which will yield a less wage for a workweek of 40 hours than such employee was receiving for the same class of work for the longer workweek of 48 hours or more prevailing prior to July 17, 1933. The Furniture Code applied to another low-wage industry. Among the provisions of that code, effective December 17, 1933, was this clause:

Article IV. 3. No employee shall be paid a wage rate which will yield a less wage for a week of 40 hours than employees were receiving for the same class of work for the normal working week of 48 hours or over immediately preceding June 16, 1933.

The actual changes in wage rates of all American industries, from July or June 1933 to the same month in 1934, show clearly what happened as a result of the President's Reemployment Agreement and the NRA codes.

The official report on the NRA shows those wage increases by types of code provisions governing wages above the minimum rates. These provisions were divided into four classifications, which showed the following percentage increases in average hourly earnings:

1. Industries with definite wage schedule and basing-point system, 44.4 percent.

2. Industries maintaining differentials among occupations, 25.8 percent.

3. Industries providing full or partial maintenance of weekly earnings, 37.1 percent.

4. Miscellaneous provisions, 25.2 percent.

It requires only 20 percent to compensate for a reduction in the workweek from the basic 48 to 40 hours.

You will see that in each one of these different classes the wage increases were far greater than those necessary to compensate for a reduction in hours from 48 to 40.

The general effect is shown by the change in earnings for the entire group of factory workers. Two over-all figures are available for this period. The United States Department of Labor, Bureau of Labor Statistics, reported that average hourly earnings in all manufacturing industries rose from 33.6 percent between July 1933 and July 1934. The National Industrial Conference Board reported that average hourly earnings rose 28.9 percent. Of 32 groups of manufacturing industries reported by the Bureau of Labor Statistics, 25 had increases of over 20 percent in average hourly earnings, and three others were just under 20 percent. The National Industrial Conference Board reported only 5 of its 25 groups of industries had wage increases of less than 20 percent, and four of those were above 15 percent.

Those figures and the individual industries they relate to appear in the exhibit already introduced as exhibit No. 11, Mr. Chairman, mostly in the section on pages 15, 16, and 17 of that exhibit.

The CHAIRMAN. That has already been received in evidence?

Mr. OLIVER. Yes; it has. I wanted to refer to it here to make it clear.

The summary which I have submitted, on the introduction of the 40-hour week in American industry, gives, on pages 11 to 14, the figures on 15 industries in terms of full-time weekly earnings. The basic workweek in the iron and steel industry was reduced from 51.5 hours in early 1933 to 40 hours in 1934; hourly earnings rose, and fulltime weekly earnings were almost exactly maintained, although the hours reduction was 11.5 per week, rather than just 8. For foundries, machine shops, and automobile industries, full-time weekly hours dropped by just over eight, and full-time weekly earnings were maintained or increased. But the hourly increase for these higher-paid industries was only from 25 percent to 30 percent. For the low-paid industries, the increases were much greater; lumber earnings rose 47.7 percent; furniture, 46.8 percent; cotton goods, 62.8 percent; hosiery, 53 percent.

The general conclusions of the McDonough Board Report, from which I have quoted, found that the evidence did not show high-paid workers to have had their weekly wages maintained when hours were reduced, under the NRA. Mr. Loomis had introduced an exhibit in the hearings before that board in which he made the categorical statement that workers receiving wages higher than the minimum did not have their pay maintained when their schedule workweek was reduced during the NRA period. That was on page 10 of Carriers' Exhibit 10 in that proceeding.

In that statement, Mr. Loomis was clearly wrong; he had been very badly misinformed, and he consequently gave an erroneous impression to the McDonough Board. The Board apparently adopted his error as their own.

Figures are available showing the difference between unskilled workers and others, for the period when the workweek was being reduced. Those figures have been compiled by the National Industrial Conference Board, an organization financed by industry, which collects and reports data on employment and related subjects. No other separation between unskilled and other workers is available for the period in question. The National Industrial Conference Board reported, in a publication titled "Wages, Hours, and Employment in the

United States, 1914 to 1936," that for July 1933 the average hourly earnings of male unskilled workers in American manufacturing industries were 37.4 cents; by February 1934, when the NRA and about half the codes had become effective, the average earnings of the unskilled had risen to 46 cents per hour. The increase was 8.6 cents, or 23 percent. The average hourly earnings of semiskilled and skilled male workers were, in July of 1933, 51.5 cents per hour-well above the standard minimum wage.

There were very few minima above the 40 cents per hour, most of them below that. So, this figure of 51.5 cents per hour in July 1933 must overwhelmingly have been of the higher-paid workers.

In February of 1934 the average had risen to 61.6 cents per hour; the increase was 10.1 cents, almost exactly 20 percent, the amount required to maintain take-home pay, with the reduction in hours from 48 to 40. In July 1934 at the end of the first year of the NRA, the average wage of these higher paid workers had risen to 65 cents per hour, and were 13.5 cents, 26 percent, above the previous July.

Mr. MURDOCK. Mr. Oliver, are all the statements in that paragraph based upon the figures of the National Industrial Conference Board? Mr. OLIVER. Every one of them appears in that report. I believe I have it here. I have the book here, if you would like to refer to it for any one or all of the figures.

Mr. MURDOCK. Is that book hard to obtain?

Mr. OLIVER. I believe this might be difficult to get now.

The CHAIRMAN. I suppose it would be in the Congressional Library. Mr. OLIVER. It would almost certainly be available in the Congressional Library; yes.

Any statement to the effect that the wages of higher-paid groups were not maintained when the workweek was reduced during that year is obviously not in accord with the facts.

In that connection it is necessary to keep in mind that some of these higher-paid groups had already had some degree of shortening of the work-week, the Ford plant being an outstanding example. Nevertheless during that year these higher-paid workers as a whole were 26 percent above what they had been in July of 1933.

One of the highest-paid industries, automobiles, paid its skilled and semiskilled workers an average of 60 cents per hour in July 1933. That excludes the unskilled low-paid group. In July 1934 the average had risen to 74.6, 14.6 percent, almost exactly 25 percent. That figure, let me emphasize, is from one of the very highest paid industries in that period, and excludes the low-paid unskilled group entirely.

In rubber manufacturing, another high-paid industry, the average hourly earnings of skilled and semiskilled workers increased from 67.3 cents an hour in July 1933 to 84.2 cents in February 1934, an increase of 25.1 percent.

Perhaps I should interpolate here, if you want to check these figures with the record, Mr. Murdock, that those relating to all American manufacturing, skilled and semiskilled workers, the National Industrial Conference Board, appear on page 55 of the book in question. Those relating to the automobile industry appear on page 63, those relating to the rubber industry on page 151, and those relating to chemical manufacturing on page 71.