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NATIONAL DEFENSE MIGRATION
HEARINGS
BEFORE THE
SELECT COMMITTEE INVESTIGATING
NATIONAL DEFENSE MIGRATION
HOUSE OF BEPEESENTATIVES
SEVENTY-SEVENTH CONGEESS
FIRST SESSION
PURSUANT TO
H. Res. 113
A RESOLUTION TO INQUIRE FURTHER INTO THE INTERSTATE
MIGRATION OF CITIZENS, EMPHASIZING THE PRESENT
AND POTENTIAL CONSEQUENCES OF THE MIGRA-
TION CAUSED BY THE NATIONAL
DEFENSE PROGRAM
PART 20
WASHINGTON HEARINGS
OCTOBER 28, 29, 1941
Printed for the use of the Select Coamiittee luvestigating
National Defense Migration
NATIONAL DEFENSE MIGRATION
HEARINGS
BEFORE THE
SELECT COMMITTEE INYESTIGATING
NATIONAL DEFENSE MIGRATION
HOUSE OF EEPEESENTATIVES
SEVENTY-SEVENTH CONGRESS
FIRST SESSION
PURSUANT TO
H. Res. 113
A RESOLUTION TO INQUIRE FURTHER INTO THE INTERSTATE
MIGRATION OF CITIZENS, EMPHASIZING THE PRESENT
AND POTENTIAL CONSEQUENCES OF THE MIGRA-
TION CAUSED BY THE NATIONAL
DEFENSE PROGRAM
PART 20
WASHINGTON HEARINGS
OCTOBER 28, 29, 1941
Printed for the use of the Select Committee Investigating
National Defense Migration
UNITED STATES
GOVERNMENT PRINTING OFFICE
fi'«96 WASHINGTON : 1941
SELECT COMMITTEE INVESTIGATING NATIONAL DEFENSE
MIGRATION :Ui, 1^ i^f'^'L^
JOHN H. TOLAN, California, Chairman
LAURENCE F. ARNOLD, Illinois CARL T. CURTIS, Nebraska
JOHN J. SPARKMAN, Alabama FRANK C. OSMERS, Jr., New Jersey
Robert K. Lamb, Staff Director
II
CONTENTS
Page
List of witnesses ^
List of authors J^}1
Tuesday, October 28, 1941 «ol5
Testimony of Donald M. Nelson 8015-8UJU
Statement by Donald M. Nelson 8016
Testimony of panel of industrial engineers 8033
Testimony of Morris L. Cooke 8033-80G8
Statement by Harlow S. Person 8034
Testimony of Harlow S. Person 8039
Statement by Morris L. Cooke 8042
Statement by S. T. Henry 8074
Testimony of S. T. Henry 8075
Statement by Alex Taub 8080
Testimony of Alex Taub 8081
Exhibits by panel of engineers 809a
Program for speeding defense effort and reducing unemployment and
migration, by Morris L. Cooke, S. T. Henry, Harlow S. Person, and
Alex Taub - 8093
Employment in metalworking industries and utilization of plant
facilities, by A. P. Hinrichs, Acting Commissioner, Bureau of Labor
Statistics, United States Department of Labor 8095
Wednesday, October 2% 1941 8109
Statement by Artliur E. Burns 8109
Testimony of Arthur E. Burns 8123
Testimony of J. Douglas Brown _ 8133
Statement by J. Douglas Brown 8151
Testimony of Eric H. Biddle 8153-8169
Statement by Eric H. Biddle 8154
Introduction of exhibits 8176
Exhibit 1. Retraining and transference in the post-war economy, by
Dr. Oscar Weigert, American University, Washington, D. C 817T
Exhibit 2. Use of radio by United States Employment Service, by W.
L. Mitchell, acting director. Social Securitly Board, Federal Works
Agency, Washington, D. C 8182
Exhibit 3. Press release, August 9, 1941, by Labor Division, Office of
Production Management 8184
Exhibit 4. Placement, types of jobs, and States of origin in clearances
through National Youth Administration regional centers, by Aubrey
Williams, administrator. National Youth Administration, Federal
Security Agency, Washington, D. C 8185
Exhibit 5. Labor policies of major auto and supply companies as they
affect migration, by Victor G. Reuther, assistant coordinator, United
Automobile Workers, Congress of Industrial Organizations, defense
employment division 8191
San Diego Exhibit 29. Survey of Housing and Migration by Consoli-
dated Aircraft Corporation, San Diego, Calif 8199
Index I— ^ 8211-
m
LIST OF WITNESSES
Washington Hearings, Octobek 28, 29, 1941
rage
Biddle, Eric H., consultant, American Public Welfare Association, Wash-
inKton, D. C 8153,8169
I>ro\vn, J. Douglas, chief, priorities branch, Labor Division, Oflice of
Pntduction Management, Washington, D. C 8133
Burns. Arthur E., economic adviser, Work Projects Administration, Fed-
eral Works Agency, Washington, D. C 8123
Cooke, Morris L., chairman. Shipbuilding Stabilization Committee, and
technical consultant. Labor Division, Office of Production Management,
Washington, D. C 8033, 80«»
Henry, S. T., assistant to the president, McGraw-Hill Co., New York, N. Y__ 8076
Nelson, Donald M., executive director. Supply Priorities and Allocation
Board, Office of Production Management, Washing'^on, D. C 8015-8020
Person, Dr. Harlow S., consulting economist, Rural Electrification Admin-
istration, Department of Agriculture, Washington, D. C 8039
Taub, Alex, technical consultant, Office of Producticm Management, re-
cently appointed Chief of Conversion Section, Contract Distribution
Division, Office of Production Management, Washington, D. C 8081
V
LIST OF AUTHORS
Of Pkepared Statements and Exhibits
Page
Biddle, Eric H., consultant, American Public Welfare Association, Wash-
ington, D. C 8154
Block, Dr. Herbert, research worker, New School for Social Research, 66
West Twelfth Street, New York, N. Y 8056
Brown, J. Douglas, chief, priorities branch, Labor Division, OflBce of
Production Management, Washington, D. C 8150, 8151
Burns, Arthur E., economic adviser, Work Projects Administration, Federal
Works Agency, Washington, D. C 8109
Consolidated Aircraft Corporation, San Diego, Calif 8199
Cooke, Morris L., chairman. Shipbuilding Stabilization Committee, and
technical consultant. Labor Division, Office of Production Management,
Washington, D. C 8042, 8093
Employment and Occupational Branch, Bureau of Labor Statistics, De-
partment of Labor, Washington, D. C 8102
Henry, S. T., assistant to the president, McGraw-Hill Co., New York,
N. Y 8074, 8093
Hinrichs, A. F., acting commissioner, Bureau of Labor Statistics, Depart-
ment of Labor, Washington, D. C 8095
Labor Division, Office of Production Management, Washington, D. C__ 8184-8201
London and Southeastern Regional Board, London, England 8052
Mitchell, W. L., aetinij executive director, Social Security Board, Federal
Security Agency, Washington, D. C 8182
Nelson, Donald M., executive director. Supply Priorities and Allocation
Board, Office of Production Management, Washington, D. C 8016
Person, Dr. Harlow S., consulting ecoonmist. Rural Electrification Admin-
istration, Department of Agriculture, Washington, D. C 8034, 8093
Reuther, Victor G., assistant coordinator, United Automobile Workers
Congress of Industrial Organizations, defense employment division, De-
troit, Mich 8191
Taub, Alex, technical consultant, Office of Production Management, re-
cently appointed Chief of Conversion Section, Contract Distribution
Division, Office of Production Management. Washington, D. C S080, 8093
United Automobile Workers of America, Congress of Industrial Organi-
zations, Detroit, Mich 8191
Weigert, Dr. Oscar, associate professor of comparative social legislation,
American University, Washington, D. C 8177
Williams, Aubrey, administrator, National Youth Administration, Federal
Security Agency, Washington, D. C 8185
vn
NATIONAL DEFENSE MIGEATION
TUESDAY, OCTOBER 28, 1941
House of Representatives,
Select Committee Investigating
National Defense Migration,
Washington, D. C.
The committee met at 10 a. m., in room 346, House Office Building,
Washington, D. C, pursuant to notice, Hon. Jolin H, Tolan (chair-
man) presiding.
Present were: Representatives John H. Tolan (chairman), of Cali-
fornia; John J. Sparkman, of Alabama; Carl T. Curtis, of Nebraska;
and Richard J, Welch, of California (guest).
Also present : Dr. Robert K. Lamb, staff director, and Mary Dublin,
coordinator of hearings.
The Chairman. The committee will please come to order. The
first witness will be Mr. Nelson, of the Supply, Priorities, and Alloca-
tions Board.
TESTIMONY OF DONALD M. NELSON, EXECUTIVE DIRECTOR, SUP-
PLY, PRIORITIES, AND ALLOCATIONS BOARD, OEEICE OF PRO-
DUCTION MANAGEMENT, WASHINGTON, D. C.
The Chairman. Mr. Nelson, we appreciate very much your coming
here this morning, as well as your last appearance before this com-
mittee.^ I wish to repeat to you that we are simply a fact-finding
body. We do not cross-examine witnesses.
The committee was appointed a year ago last April for the purpose
of investigating the interstate migration of destitute citizens. We
have made our report to Congress on that subject, but in response to
a persistent demand from many sources throughout the Nation, the
Congress voted to continue our committee for the purpose of investi-
gating national defense migration. Our first field hearing since that
time was held in San Diego, which is one of the "hot spots" of defense
migration in the United States. The city has had an increase of
100,000 in population on account of the defense effort.
Then we came back east to hold hearings in Hartford, Trenton,
and Baltimore, and recently we conducted an investigation in
Detroit.
Having read your statement, IVIr. Nelson, 1 can appreciate the
tremendous responsibility that has been placed upon you in your
position as executive director of S. P. A. B. Our committee got the
iMr. Nelson testified before the committee on July 17, 1941, in his then official capacity
&s director of the Division of Purchases, Office of Production Management. (See pt. 16,
Washington hearings, July 15, 16, and 17, pp. 6575-6620.)
8015
3016 WASHINGTON HEARINGS
imi^ressioii in Detroit that industrial dislocation, and the nnemploy-
nient and mioration which result from it, could best be alleviated by
speeding up the defense proorani, so as to utilize all manpower and
resources, and, of course, in accomplishing this, we shall be achieving
Gin- primary objective of insuring the safety of our country.
We are pleased to have you here again, Mr. Nelson. Our witnesses
today include, in addition to yourself, a panel of very capable indus-
trial engineers, who will endeavor to indicate from the technical and
managerial vieAvpoint how defense production can be accelerated and
dislocations minimized. This panel will include Mr. ISIorris L. Cooke,
Dr. Henry S. Person, Mr. S. T. Henry, and Mr. Alex Taub. No
doubt you are acquainted with some of them.
Mr. Nelson. Yes. sir.
The Chairman. I should like to add here that the interest of this
committee in these over-all problems arises from the fact that there is
today increasing dislocation in American industry, which in turn is
spreading unemployment and at the same time threatening distress
migration out of nondefense communities to centers where defense
production is still expanding. These hearings, in addition to provid-
ing information for the use of numerous other individuals and
agencies, enable us to have an informed opinion on which to base
proposals of new legislation to Congress. We were pleased to learn
of the agreement between General Motors and the U. A. W.-C. I. O.,^
and also of the recent revision of estimates on the convertibility of
auto production facilities. I also want to say at this time that I
think the most compelling observation you make in your paper — and
1 think it is one that will catch the ear of the public — is [reading] :
One of the basic prdblems therefore is not how to distribute the gains but how
to distribute the sacrifices and at the same time get the maximum of defense
and other essential production.
I think that is a very fine statement.
Mr. Nelson. That is the root of the matter, Mr. Chairman.
The Chairman. Mr. Sparkman will now ask you some questions.
Mr. Sparkman. Mr. Nelson, your prepared statement will go into
the record as it was presented to us. We have all read it over with
much interest.
(The statement referred to above is as follows:)
STATEMENT BY DONALD M. NELSON, EXECUTIVE SECRETARY, SUPPLY,
PRIORITIES, AND ALLOCATIONS BOARD, OFFICE OF PRODUCTION
MANAGEMENT, WASHINGTON, D. C.
I shoiild like to state that I am personally in entire accord with the twofold
objectives of your committee : first, to offer recommendations for alleviating
consequent problems, where migration is a necessary corollary to defense activ-
ity ; and second, to avert all unnecessary migration through minimizing defense
dislocations.
In previous testimony before you, I have explained in detail my reasons for
believing that we should do everything practicable, consistent with our defense
needs, to prevent the immediate and the long-run undesirable results of large,
unmanageable labor migrations. Among the practicable steps at our disposal
is the allotment of defense orders to firms located where there are adequate
supplies of labor. Labor supply is one of the important factors in allotment,
both of supplies contracts and of construction contracts. But there are other
factors, such as strategic requirements, supplies of materials, and technological
conditions, which in many cases outweigh labor considerations and force a
compromise decision. Then certain limited labor migrations may be necessary.
1 See Exhibit 5, p. 8192.
NATIONAL DEFENSE MIGRATION 8017
So far as apportioning of defense contracts is concerned, responsibility has
been given, as you linow, to Mr. Floyd Odium's Contract Distribution Division,
which works closely with defense contract officials in the military establish-
ments.
Supply, Priorities, and Allocations Board, however, recognizes that labor mi-
gration may be caused not only by the geographic distribution of defense con-
tracts, but also by the manner in which businessmen producing noiidefense
goods make their decisions concerning rate of operations. If output is cur-
tailed, whether in large plants or small ones, unemployment must follow, ami
workers will have to look elsewhere for jobs. The ideal situation would be
that these workers could find new employment close by, either because of a
growing volume of defense business coming into the locality, or because non-
defense industries were able to expand output to meet civilian demand.
All possible efforts should be made to approach this ideal situation. Bat there
are limiting factors imposed by the nature of the defense program. In the first
place, there are shortages of a number of materials, with the result that many
plants face unavoidable curtailment. In the second place, technical matters such
as the nature of machinery and equipment, the experience of labor and manage-
ment, the special requirements of defense items for small tolerances, rigid in-
spection, and so on, make conversion of the curtailed plant difficult.
Now it is obvious that management itself plays an important role in the
migration picture. Management can exercise much ingenuity in devising ways
and means, through adaptation of plant, through simplification of design and
substitution of materials, to avoid curtailment of operation. But in many cases
this way out may prove too difficult and labor will be forced to move.
I do not believe that this Nation can afford to look upon its defense program
as a boom or a gold mine. By its very nature, a defense program on so large
a scale as ours means sacrifice, readjustment, economic loss. Arms and muni-
tions do not enter into ordinary trade and consumption. The energies given to
their production cannot also be given to ordinary peacetime pursuits.
DISTRIBTjnON PROBLEMS
One of the basic problems, therefore, is not how to distribute the gains but
how to distribute the sacrifices and at the same time get the maximum of
defense and other essential production. At this time, there is a considerable
amount of confusion among businessmen concerning their role, as makers of
managerial decisions, in this program. Such confusion at the present time seems-
inevitable, and its removal is a problem common to government and business.
As a matter of fact, the Government is acutely aware of the fact that confusion
and uncertainties exist in business. Mistakes have, of course, been made, both
by defense agencies and by business agencies. These mistakes are part of the
cost of building up so vast an effort in so short a time. A succes.sful business
enterprise is often the result of many years of trials and errors. We are now
going through the growing pains of rapid expansion. Probably business never
before expanded at such a rate. From July 1940 to September 1941, actual
expenditures for defense increased every month except two, over the preceding
month, by amounts up to 50 percent per month. Confusion and growing pains
cannot be avoided under such conditions, but aggressive efforts can be made to
minimize such pains.
One step recently taken to aid in reducing and finally eliminating the confu-
sion was the Executive order creating the Supply, Priorities, and Allocations
Board. This Board, designed and functioning as a policy-making agency, has
already, as you know, embarked on the task of establishing major, over-all
policies as guides to the adjustment of industry to the needs of the national
emergency.
One of this Board's first declarations, on September 2, was, in part: "The
Board realizes the magnitude of its task. It recognizes as well that success
requires a vigorous, uiiited effort on its part together with unstinted cooperation
from the pub'.ie in accepting certain responsibilities necessary in the defense
of our democratic institutions.
POUCT OBJECTIVES OF BOARD
"Our general policy is simple. Production shall be stimulated and organized to
the limit of the Nation's resources. Every available man and machine must be
employed either on direct defense requirements or at work essential to the civilian
I
3018 WASHINGTON HEARINGS
economy. Along this road lies protection of our freedom and of the basic economy
to maintenance of that freedom."
More specifically, the Board faced squarely the issue of eliminating the eco-
nomic fat. It said : "We must forego the less essential, that we may have an
abundance of the more essential. * * * Wherever possible to convert the less
essential to military or essential civilian production, this will be done. Every
means will be employed to expedite this process with a minimum loss of time for
men and machines. But the less essential must go. This means working off the
fat and hardening the muscles.''
In this connection, I think we should not overlook the fact that Great Britain
and her allies are said to be giving about 50 percent of their total productivity to
making munitions and the other needs of war, while we here are not yet giving
over 20 percent of our productivity to that effort. Nor should we for a moment
forget that modern war is economic war, that it means battles of production behind
the actual fighting lines, and that the production battles are decided not alone by
materials but by labor and management.
To outline further the policy objectives of Supply, Priorities, and Allocations
Board, I should like to add certain other declarations :
^) «* * * * While recognizing that the civilian economy must be stripped
of nonessentials, it must be kept in good running order and in more than stand-by
condition.
(2) "Those materials, which may be hoarded * * * will be routed out and
put to use where most needed in military and essential civilian production.
(3) ''Scare buying against imaginary requirements of the future will be dis-
couraged effectively.
(4) "The goal our country must reach to perpetuate our freedom and to assure
victory for all who share our democratic philosophy means sacrifice. But we must
make certain that sacrifices are not imposed because we are wasteful ; because we
fail to look ahead, or because proper use is not made of all available materials,
men, and machines.
(5) "The Board believes that if the public knows why it must forego certain
comforts * * * why, in substance, the fat must go and the muscles be strength-
ened, the cooperation vital to success will be had in full measure."
Following these and similar policy declarations. Supply, Priorities, and Alloca-
tions Board has met a variety of issues by —
(1) Denying of application for construction of a certain nondefense plant re-
quiring large amounts of scarce and critical materials.
(2) Ordering compilation of full schedules of military and civilian requirements
as far ahead as possible, to be broken down into schedules of raw materials, labor,
and machinery needed for production.
(3) Planning for expansion of supplies of critical metals, and of certain dairy
products.
(4) Permitting manufacture of commercial transport planes designed accord-
ing to certain military needs.
(5) Refusing to issue priorities for the construction of nonessential public or
private construction projects which use critical materials such as steel, copper,
bi'ass, bronze, aluminum, and so on.
(6) Putting in motion programs for collecting data on inventories of essential
materials, in whatever hands they may be found.
(7) Providing for getting information from the appropriate divisions of Office
of Production Management relating to the status of labor supply, labor training,
machine tools and equipment, and plant and mine expansion projects.
The.se policies either have the effect of defining objectives, or of limiting
specific actions by industry. These policies do not undertake to tell any indi-
vidual what to do or how to do it, within the areas of action left open to
him. And that is where the opportunities for individual initiative and indi-
vidual planning are found. That also is where the responsibility for etficient
action is placed so laigely on the individual.
In responding to these opportunities, the individual business executive has
ordinarily these choices :
CHOICES GIVEN THE BUSINESSMAN
First : To continue in his ordinary activity. This choice may not be easy.
Risks of materials shortages, of competition for labor, of shifting demand,
must be calculated in the light of the facts arising from a cliange-over in the
total economy. To anticipate correctly the effects of cutting off the fat is-
NATIONAL DEFENSE MIGRATION 8019
no simple problem. It may, in a given case, call for great ingenuity in re-
designing of products through simplification, standardization, or substitution.
Planning of au unusually high order, therefore, is called for.
Second : The businessman may choose to seek direct defense orders or be a
subcontractor. Typically, these orders call for special production techniques,
for plant conversion or expansion, for retraining of labor and supervisors.
Furthermore, they call for different, and often more stringent, inspection
methods.
Planning for direct defense orders also raises problems of pricing, financing,
negotiating ; of subcontracting, with its corollary problems, and of foreseeing
post-emergency conditions.
Third : A businessman may choose — and this choice may in many instances
require the greatest risks and therefore the greatest courage — to separate him-
self from a job he regards as nonessential in order to seek out an opportunity
for rendering service to the Nation.
All these choices may involve special economic risks and sacrifice, perhaps
long-lasting dislocation. Yet there is no reason to doubt that, in the interest
of national unity and of speed in getting the job done and done well, the individual
businessmen of this country will make these choices willingly. And if the
initiative of the individual is applied energetically to the job of planning how to
carry out his choice, there can be no doubt about the final outcome.
To speed up and direct the application of all industrial energy to the needs of
the emergency, it seems to me that we must solve two basic problems. I should
like to describe them briefiy, and also to report that the process of finding solu-
tions for these problems is already well under way. At this moment, I cannot
give final answers to the problems, nor can I forecast in specific detail what
administrative machinery will be set up to translate the solutions into action.
WHAT IS "moke" and WHAT IS "LESS" ESSENTIAL?
The first of these problems is to work out acceptable definitions, or guides to
definitions, of what is "more essential," and what is "less essential." Our economy
is complex, and we are going through the process of shifting a substantial and
increasing portion of our productivity to direct military needs. Thus our con-
sumption of metals in the production of arms, munitions, planes, ships, and so on
has risen so greatly as to curtail and in some instances prevent the production
of nonmilltary items. But we must not blindly divert too much, nor divert it either
too soon or too late. The reason is simply that military demand is not the only
essential demand. Our total economy, though it may be lean, must continue to
function effectively. Otherwise, the military progra.n itself would be jeopardized
and might even fail of its goal. Health, safety, and good morale are economic
essentials, and the supply of goods and services necessary to maintain those
essentials cannot be permitted to fall below minimum levels. To determine what
those levels are, and how to assure adequate economic supplies to support them,
are parts of the problem of defining "more essential" and "less essential."
The other problem which I wish to present is that of coordinating the demands
for essential goods and services with the supply. This is chiefly a problem
in making a time schedule of the more essential demands — military and non-
military— and then projecting allotments of materials and plans for production
adequate to meet these scheduled demands. I need not emphasize the com-
plexities of this task, but I should like to make clear the crucial importance of
the time scheduling of total essential requirements.
Our experience to date indicates that mechanisms either exist or can be
developed for coordinating demand and supply in such a way that industry will
know fairly definitely what is ahead. Among the mechanisms are output cur-
tailment programs, some of which already have been announced. For instance,
the automobile indu.stry will be curtailed on a percentage of finished output, or
end-product basis. Copper, in contrast, will be controlled from both sides of the
production structure: i. e., by curtailment of end products, and also by the
mechanism of specific allocation of copper supplies to uses classified as essential.
In the application of these and other coordinating mechanisms, every attempt
is being made, and will continue to be made, to avoid arbitrary or unfair dis-
crimination among industries and individual plants. For this purpose, it is
my hope to see the establishment of basic policies stating the principles to
be followed in curtailments, allocations, and other coordinating mechanisms.
These principles should cover such questions as maintenance of essential economic
functions, and minimizing of actual economic hardships.
8020 WASHINGTON HEARINGS
Now, there raust be no question about the absolute necessity for restrictive
and, in some cases, prohibitory economic policies. Shortages exist now and more
shortages will develop, no matter how persistently we seek to expand the
mining, processing, and finishing of essential materials.
But likewise, there must be no doubt about the emergency nature of our
interference with the normal workings of a free economic system. One of our
objectives is to maintain present freedom of business action as fully as is con-
sistent with the emergency program we are building. Another objective is to
preserve the framework of our economic system so that the post-emergency
economy may return as quickly as possible to its normal ways of operating as
a free economic society.
TESTIMONY OF DONALD M. NELSON— Resumed
Mr. Sparkman. I am not going to ask you at this point to describe
the authority of S. P. A. B. or its administrative functions in greater
detail than you have outlined them in your paper, because I believe
that information will develop as we go along. Instead I would like
to direct your attention to a more comprehensive question, which is
well summarized in the prepared statement of Dr. H. S. Person,
well-known economist and a member of the panel of industrial engi-
neers who will follow you on the stand.
Dr. Person has this to say in his prepared statement:^
The radical, the effective, the urgent step is still to be taken. There is still
to be set up an agency, with the authority of common consent as well as of
law, and with the competence of technical knowledge, whose task will be to
organize all the plants of the Nation into one great coordinated national plant
along the same lines in which the best-managed medium-sized plants are now
organized..
We are very much interested in this quotation because at the time
when your Board was established, we understood it was to do this
very thing. Now, if Dr. Person is correct, we would like to have
you tell the committee what your Board lacks to make it adequate
to this task.
KNOWLEDGE OF TOTAL NATIONAL REQUIREMENTS ESSENTIAL
Mr. Nelson. Well, sir, in my opinion the one thing that has been
lacking around here for some 14 months — and I believe it is no one
person's fault — is a full knowledge of what the requirements are
going to be. I can't hold the Army or the Navy to blame for that.
If we look back at our situation 14 months ago and compare it with
what we can see today, I think every one of us will realize that we are
a good deal further along in the realization of the job.
To me the job is perfectly clear, although perhaps the magnitude
isn't clear yet to the Nation. The President said last night: "Our
job is to see that Hitler is licked." Now, just how much of a pro-
gram that involves, how large the commitment for this Nation to
undertake, has never yet been put on paper. However, I think
progress is being made in that direction.
I think the whole question of what our industrial plans ought to
be starts with the knowledge of what our requirements are. The
first action that S. P. A. B. took was to request this information of
the Army and Navy through its executive director. I submitted
1 Dr. Person's statement appears on pp. 8034 ff.
NATIONAL DEFENSE MIGRATION 8021
that request, and we are now getting complete cooperation from the
Army and Navy in our efforts to determine what all-out requirements
may be for the defense of this country. Given that, given the knowl-
edge of how many airplanes we need, how many tanks and anti-
aircraft guns, how many implements of war of all kinds, and then
given a schedule for delivery, we can proceed to do the very thing
that Dr. Person talks about, and which I think is very essential. I
have thought for a great many months that we need to know what
our over-all requirements are, we need to know our time schedule;
and having that information, it is comparatively easy for the Presi-
dent to organize the production set-up and the machinery for con-
trol. The S. P. A. B., or Supply, Priorities, and Allocations Board,
sets major policy. It is appointed by the President with the author-
ity to make decisions — decisions which can be overruled only by the
President himself.
Now, you have that agency to make major decisions of all kinds.
You have O. P. M., set up as a production organization to see that
the materials are obtained, to see that purchases are well coordinated,
to see that production is well planned. And I believe that if we
start with some knowledge of what our problem is, what our require-
ments and time schedule are to be, then we can go about the job of
properly planning the production of those materials which are
needed, not alone for our own defense program, but to aid our
friends and those who can put such weapons to good use in seeing
that Mr. Hitler is licked.
That would be my first answer. I think anyone will say that the
first thing you must do, if you have an industrial planning job on your
hands, is to inform yourself on these questions: What are your aims?
What are your requirements? How much time do you have?
AGENCIES HAA'E NECESSARY AUTHORITY
Mr. Sparkman. If and when the requirements are known, then, it is
your opinion that the present agencies do have the authority or the
power to execute that program ?
Mr. Nelson. Yes, sir. In cooperation with the Army and Navy,
those agencies can see to it that we go ahead efficiently. If they
don't do it, it can only be because of a lack of ability.
Mr. Sparkman. We all are attempting to realize the immensity of
this program.
Mr. Nelson. That is what I want to make plain now.
Mr. Sparkman. And only a few days ago the President said it was
to be greatly stepped up, probably doubled.
Mr. Nelson. Yes, sir.
Mr. Sp-^rkman. In your statement you say this on the policy of
your Board: 'S. P. A. B. does not undertake to tell any individual
what to do or how to do it within the areas left open to him."
Does this mean that if a firm does not choose to put its resources
into the defense effort it will be free to stay out regardless of the con-
tributions it might make ?
Mr. Nelson. No, sir. That is not what was meant. A firm is not
free so to choose. We have all the power and prestige that is needed
to have that firm come in. We have the commandeering section of the
Selective Defense Act, and that act. implemented with a requisition
clause, has been passed by Congress and signed by the President.
gQ22 WASHINGTON HEARINGS
There is ample authority today vested in the proper agencies to
bring anyone into this defense program whose services are absolutely
essential.
S. P. A. B., in its decisions, has not been trying to tell people what
to do. Kather, it has been trying as far as possible to eliminate un-
certainty in people's minds. I think one of the most serious causes of
confusion is uncertainty. In the businessman's mind, if there is un-
certainty as to how many automobiles he is going to be able to make,
for example, he is unable to plan his production and sales programs.
His employees feel uncertain. His dealers feel uncertain. The public
feels uncertain. Now, if you have a mechanism whereby that question
can be settled — namely, the number of automobiles for which we can
spare material, which is the determining factor in these limitation pro-
grams— this will eliminate the uncertainty in the picture.
LIMITATION PROGRAMS
These limitation programs, which have been prepared by the Divi-
sion of Civilian Supply, will be made public so that each manufacturer
will know about how big his own job will be. It should be perfectly
apparent to the country at large that we cannot undertake this job and
at the same time continue with "business as usual." It can't be done.
We haven't the materials or the resources to do it, for the simple
reason that as we spend more and more money, our civilian economy
keeps on rising, until we are stymied. People make more money and
they want to spend the money "they have. They are perfectly willing
to buy anything that they feel they want. It is obvious that we cannot
carry through the defense effort and at the same time take care of the
wants of the civilian economy on such a rapidly expanding national-
income basis. It simply can't be done. It physically cannot be done.
Therefore, the defense program must go forward, and the civilian
economy must accommodate itself to the requirements of national
defense.
This is all part of the same thing I discussed in answer to the first
question. When we know the situation that is ahead of us, and we
know our total resources, we are then able to determine how much
material and services can be allowed to go into civilian production and
liow much must be reserved for the military. That is the job that I
believe confronts us today. And under the Executive order of the
President, S. P. A. B. can make major decisions applving to this whole
field.
Mr. Sparkman. When the information you mention is provided the
Government agencies, then it will be their intention to give the busi-
nessman an opportunity to pla.ce his plants and resources at the dis-
posal of the defense effort ; but, failing in that, it is your opinion that
there is ample authoritv already lodged in the proper Government
officials to force him to do so. Is that correct?
Mr. Nelson. Yes, sir; definitely,
Mv. Sparkman. Suppose he was running two shifts, and it was felt
lie ought to be putting in three shifts. Could he be made to do that ?
Mr. Nelson. Well, I am not a lawyer and, therefore, I shall not
attempt to answer categorically. As a matter of fact, that question
hasn't come up. The question of whether you run one, two, or three
NATIONAL DEFENSE MIGRATION 8023
shifts depends largely on the circumstances of the individual plant. In
some instances a three-shift operation is not as productive as a two-
shift operation.
Mr. Sparkman. I was speaking of shifts only by way of illustration.
What happens if the determination is reached that the firm is not pro-
ducing to its utmost?
BOARD HAS AMPLE AUTHORITY
Mr. Nelson. I believe, sir, that there is ample authority to force
such a firm to do so. It is my experience, however, in every case so
far, that when that problem was put up to an industry, the industry has
responded. I don't know of a single case in which an industry, having
been shown a necessity for defense, has not made provision to take
care of it.
Mr. Sparkman. That question was prompted by another part of
your prepared statement, in which you say —
production shall be stimulated to the limit of the Nation's resources. Every
available man and machine must be employed, whether on direct defense require-
ment or at work essential to the civilian economy.
Mr. Nelson. When we see the size of the program that is ahead of us,
we are going to realize that it cannot be accomplished unless those
conditions are fulfilled.
Mr. Sparkman. And you believe that ample authority exists to see
that they are?
Mr. Nelson. Yes, sir; I do.
Mr. Sparkman. In the Detroit hearing, in reply to charges made by
the United Auto Workers Union that the motor companies, in order to
extend a profitable season, had refused to convert their facilities, auto-
mobile manufacturers replied that not one manufacturer has ever
refused a request for production. Do you know how many manufac-
turers have been requested to make a specific item on the basis of an
appraisal of their facilities? Is it a considerable number?
^Ir. Nelson. I don't know how many. It is a very considerable num-
ber, and I don't know of any refusals.
Mr. Sparkman. You have always met with a good response and
cooperation ?
Mr. Nelson. In the situation affecting the automobile industry
there was a difference of opinion at the start as to whether or not
the machinery of the industry was adaptable to defense production
without a great many changes. I heard the statement made by per-
fectly reputable people that only 20 percent of the machinery was
adaptable. I think that has changed. I think that since then we
have found ways and means of adapting that machinery, and will
find ways and means of adapting it still further. I think our con-
ception of the kind and type of machinery that can be adapted has
changed, and is going to change a good deal more before we are
through.
conversion progress not satisfactory
Mr. Sparkman. Is it your feeling that there has been satisfactory
progress in the program of converting industry to the production
of war materials?
Mr. Nelson. No, sir ; I do not.
60306—41 — pt. 20 2
gQ24 WASHINGTON HEARINGS
Mr. Sparkman. You do not think that conversion h;is come about
as last as might have been expected?
Mr. Nelson. I don't think so. I think there has been too ready an
acceptance of the theory that in order to produce effectively we must
buy new tools rather than adapt old tools to this production. I think
the English and German experience show^s c^uite clearly that you don't
always need specially designed single-purpose machinery to be able
to accomplish the objective.^ True, it may cost more money, and it
may not be quite as efficient. But I am of the opinion that a great
deal of the present machinery of industry can be converted to the
making of materials for defense. That comes about through a change
in tolerances, due to ability of management to do the job, ability of
the industry to adapt itself; and as I have said in this statement
which I have given to you, I think management has to be more
flexible. I think it is a two-way proposition. Management has to
be more flexible and adapt itself "more readily to what is needed, just
as we in Washington must be more flexible in seeing this adaptation
through.
Mr. Sparkman. Mr. Morris Cooke, who appears on the industrial
engineers' panel which follows you, has submitted to this committee
a statement which is sharply critical of the Army's present pro-
cedures and their training and ability for mobilizing defense pro-
duction. I am quoting from the summary of his statement.
The Army, Navy, and Maritime Commission place all purchase orders. But
these agencies are reluctant to assume any part of the responsibility for what
happens under the contract, and seem to practice about the minimum of
follow-up. The attitude is too legalistic for war. Procurement, which is the
type of buying practiced by the military, is fairly easygoing and is not at all
tile equivalent of the term "production" as used in private industry where
volume and tempo are what really count. Too much dependence is placed on
the contractor, and as a rule too little pressure kept on him to do better than
what he claims to be his best.*
What are your views on this statement?
Mr. Nelson. I should say, first, that the Army has the basic re-
sponsibility for getting the implements of war that it needs. It
places the specifications. I also think the degree of adaptability
required depends a great deal upon the size of the program which is
contemplated. When we were thinking of this whole defense pro-
gram in terms of a $7,000,000,000 or a $15,000,000,000 effort, if I had
been a procurement officer for the Army or Navy, I would have
wanted to place the contracts for that amount wherever the work
could be done for the least amount of money. But I have always
said that tlie way to force better buying, better distribution of orders,
was to increase the size and tempo of the jjrogram. Then necessity
would require that a great many things be done which were not
forced under a narrower concept of the program, the program needed
to attain tlie objective which I saw^ in the offing — namely, to see that
Mr. Hitler was licked.
Mr. Sparkman. Now^, I want to quote from the statement of Dr.
Person, who will also appear on the engineers' panel. We may
seem to be checking up on those fellows through you, but it is all
related.
IMr. Nelson. I believe it is, sir.
1 See pp. 8052-8056, and 8058-8068.
2 Complete statement appears on pp. 8042-8052.
NATIONAL DEFENSE MIGRATION 8025
Mr. Sparkman. Dr. Person has come to the parallel conclusion that
I got from Mr. Cooke. He says :
The military establishments appear to have no basis in experience for competent
inventorying of national facilities and for organizing and following up production
processes on a national scale.
He suggests further that a civilian group "skilled in engineering and
the direction of production" be assigned the task of scheduling produc-
tion, either as part of the military or as part of a separate over-all
planning board. Do j^ou think that the adoption of either of these sug-
gestions would accelerate the defense program?
CIVILIAN DIRECTION OF PRODUCTION SCHEDULING SUGGESTED
Mr. Nelson. Oa that subject I would refer you to the chronological
account of the development of the present organization. As I under-
stand it, the obligation of O. P. M. in this connection is just that. They
have civilian experts who work with the Army and Navy to assist
them as the program develops. There can be more of a dependence
upon those experts and better men will be brought in to take over. I
do not mean to say that we necessarily have to have the present type
of organization. But with O. P. M. set up, I have felt that it could be
a means of bringing in the best civilian brains in the United States to
help the Army and Navy. That is what I have always conceived the
job of O. P. M. to be.
Mr. Sparkman. I want to refer to another member of the forth-
coming panel, Mr. Henry. He has suggested that every contract that
has a completion date beyond June 1942 be reexamined to determine
(1) where more machine-hours per day and man-shifts per week could
possibly be put to work on the contracts within the plants of the
prime contractor (that is, go from a one or one-and-a-half shift
basis as is prevalent in many defense plants to a three- or four-shift
basis), and (2) how much of the contract could be farmed out to other
factories which are not now completely occupied with defense work.^
Do you agree with that?
Mr. Nelson. It is a very sensible suggestion. I am certain it is. I
would go along 100 percent with it.
REEXAMINATION OF CONTRACT COMPLETION DATE
Mr. Sparkman. Would you also suggest that all outstanding large
contracts, regardless of their completion date, be reexamined in the
same way?
Mr. Nelson. Yes, sir. 1 have been on record several times before
congressional, committees in favor of such a procedure. That is one
of the ways to speed up the work. Some of the terms of these contracts
should also be reexamined. You must remember that some of these
contracts are on a fixed-price basis and therefore if another shift is
added it may involve even more expense, because usually the second
shift is not as productive as the first, and the third is not as productive
as the second, by a large margin. Therefore, speeding up the program
involves another look at the contracts, another look at the total
' Complete statement appears on pp. 8074-8076.
8026
WASHINGTON HEABINGS
amount, and at the time schedule. It should be remembered that the-
size of the job before any one company will affect its attitude toward
doin^ the job. It will affect the attitude of the workers toward the
job. That is just human nature. When they see the contract running-
out on a date, there is a natural tendency on the part of the worker to
slow up, and there isn't the impetus on the part of the manufacturer
or the managerial orfranization to force it through faster. Therefore
I think the additional volume given to any concern should be a con-
sideration in any reexamination of the contract.
In other words, there must be a time objective in this program, a
definite date by which we feel a certain quantity of materials must be
ready. There must be a definite plan and schedule of requirements.
Then, as these contracts are reopened, and the size and tempo of the
job are both increased, it may be necessary also to make adjustments
in price. In some cases the additional quantity may actually lower
the price. To me that seems basic in this whole effort.
Mr. Sparkman. It seems to me that these are very practical pro-
posals, which not only would accelerate defense production, but also
would bear upon the problem with which this committee is primarily
concerned.
Mr. Nelson. You are referring, I assume, to the spread of em-
ployment throughout the United States, instead of building concen-
trations of defense industry in places which are already overpopu-
lated. As I said the first time I appeared before you, we add
tremendously to our civic burdens by overcrowding present centers of
production. You have been in San Diego and you saw what had to
be done in the way of providing new schools, sewers, and liouses.
Those needs are all extraneous to the contract, but they are there just
the same. The Government has to pay the cost. Therefore, why not
pay a minimum cost? I would suggest that you review the Executive
order conferring authority on Mr. Floyd Odium's Contract Distribu-
tion Service, which recognizes that the cost is as much as 15 percent
additional on a given item when it must be produced in an area
requiring all those additional facilities. Avoidance of excess pro-
duction in already overburdened communities is money saved to the
United States Government.
Mr. Sp.^rkman. Can your board do anything about this problem
through the allocation of materials?
BROAD POWERS GIVEN TO S. P. A. B.
Mr. Nelson. I feel that S. P. A. B. can do almost anything in almost
any direction, because it is given the authority by the President of
the United States and is heacled up by the Vice President as chairman.
I feel that it can go into this thing in almost any direction that may
be needed. But I also think that any group undertaking this job must
see what the total, over-all requirements are, and what the time
schedule is.
Mr. Sparkman. Does S. P. A. B. review the delivery dates set by the
Army and Navy?
INIr. Nelson. We have not up to the present, sir. We are attempt-
ing to get the total over-all requirements and time schedule.
Mr. Sparkman. Are those delivery dates set in consultation with
O. P. M.?
NATIONAL DEFENSE MIGRATION 8027
Mr. Nelson. Yes, sir.
Mr. Sparkman. I should like now to sum up your view of the situa-
tion briefly. It is this, as I understand it : First, we do not yet know
what the requirements are.
Mr. Nelson. Yes.
Mr. Sparkman. The manufacturers and the people themselves are
not informed.
Mr. Nelson. Right.
Mr. Sparkman. Would you agree that the manufacturers and pub-
lic have not yet come to a realization of how greatly they are going
to have to curtail their normal production and normal wants?
Mr. Nelson. Yes.
Mr. Sparkman. You believe that when they have realized this, there
will be a spirit of cooperation which will enable the program to move
along ?
Mr. Nelson. Yes ; definitely.
Mr. Sparkman. But if there is a failure anywhere to cooperate
properly, you think the necessary power is properly vested in some
agency or some official to see that the program does move along ?
Mr. Nelson. Yes, sir.
Mr. Sparkman. That is all.
Mr. Curtis. Mr. Nelson, has S. P. A. B. or any other agency all the
necessary information in regard to total national inventories of
various materials?
Mr. Nelson. Yes, sir; the information in regard to total national
inventory of materials is available, and also in regard to total national
productive facilities. The individual inventories we are getting at
through questionnaires. For instance, we have surveyed all the ware-
houses of the country through trust companies, railroad terminals,
and the like.
Mr. Curtis. Is that true of machines and tools ?
Mr. Nelson. That is not true of machines and tools. I think we
have pretty accurate information on materials, and we have the ma-
chinery set u]) for gett'ng at the information we need on machines
and tools. I think many surveys have been made.
efficiency of government surveys explained
Mr. Curtis. In the tratherinc: of this information, is it quicker and
more effective to proceed as you have been doing through trade and
business channels or to have the Federal Government authorize vari-
ous censuses and inventories, which would require new organization
and personnel?
Mr. Nel«on. I have felt right along that the job could be done most
efficiently by Government people working through the industry. You
<*an assemble the information much faster by getting it from industry
itself, and I believe that as we get to know more of our requirements,
industries can better adapt themselves.
For instance, the washing-machine industry quite recently — and
I think this is rather epoch-making in this defense program — seeing
that it was to be curtailed, started its own survey, w^orking with the
Government to determine what type of things it could make. That
industry has made a survey, working with the procurement officers
of the Army and Navy, and has now taken contracts running into mil-
gQ2g WASHINGTON HEARINGS
lions of dollars to make fijiin mounts. It is adapting its machinery to
that particular item, after having worked out the contractual relations.
It serves as a good example of an industry coming in and helping the
Government by adapting its machinery to defense needs. Yes; I be-
lieve that the very best method of gathering the information is through
industry itself.
Mr. CuETis. That would be superior to utilizing a branch of the
Government, such as the Bureau of Census, and assigning enumerators
not trained in mechanics or anything else.
Mr. Nelson. Yes, sir. There have been too many surveys made by
all kinds of organizations — State governments, chambers of commerce^
the National Manufacturers' Association, and others — on what ma-
chinery is available. But I think we need a method that more directly
animates the whole program. That is the ability of management to
make the machines do the job. Just a plain enumeration of ma-
chines, in my opinion, has never been enough.
Mr. Curtis. And the enumerator has to have knowledge of what is
needed.
Mr. Nelson. Yes, s'r. He must know how to adapt Avhat we have
to the need. It is that greater adaptability that I think that we will
require. When we see the size of the program, bang-up before us, the
w^hole question will be what we can do with what we have, rather
than how we are to get new machinery for each job.
Mr. Curtis. It has been my observation and conviction that the
majority of the people, perhaps 100 percent of them, are decidedly
loyal, and want to do their part, but sometimes they do not know
how to do it effectively. No doubt small industry, small manufac-
turers or shops, especially in the interior of the country where they
are not close to the big plants, are doing many things that seem
confusing to official Washington. Would you care to make any com-
ment on what small business is doing to secure defense orders?
NONDEFENSE CLINICS FOR LITTLE BUSINESS
Mr. Nelson. I don't know that I am competent to say what small
industry is doing, or failing to do, for national defense. In general,
I think we must try to devise some method of bringing these small
fellows into the picture. A better knowledge on the part of Army
and Navy procurement officers of the necessity for brinijing these
people into the program and a realization on the part of the larger con-
tractors that these small fellows have ability to do many jobs, are help-
ing to bring about a constructive change, I believe. We see that change
coming. Just how many of those industries can be adapted we are not
able to say. I don't think that anywhere near 100 percent, probably
not more than 25 or 35 percent, can be fitted into the picture. But I
should say that the thing that small business needs more than any-
thing else is guidance on wdiat to do and how to do it. That means
guidance in each comm unity. I have suggested to several communi-
ties the holding of nondefense clinics, which would help to show what
substitutions can be made, how men who are doing a job now requir-
ing critical materials may, through borrowing engineers from other
organizations that have met the problem, be better able to adapt
themselves. Oftentimes the small man does not have the engineering
ability to make the necessary adaptations in method and I think that
NATIONAL DEFENSE MIGRATION 8029
just as defense-industry clinics, showing business how to adapt
itself, we must hold nondefense clinics to show the nondefense in-
dustry how it can do a better job of carrying on.
Mr. Curtis. It has been reported in the press that over 20,000 small
firms have gone out of business in England since the war began,
and that at least that many may be expected to do so in this country
during the defense period. But I think you have outlined the policy
of S. P. A. B. with regard to utilizing these resources and keeping
these small firms in active civilian production.
Mr. Nelson. I have tried to answer that. We need to work first on
showing them how to adapt themselves to defense, and on helping
them to do other things in civilian production when they cannot con-
tinue as in the past.
EXPANSION OF PRODUCTION OF BASIC COMMODITIES
Mr. Curtis. What has been done to expand facilities for the pro-
duction of basic commodities, such as our 10,000 000 tons of steel ?
Mr. Nelson. That is one of the problems that S. P. A. B. has
tackled very energetically. It seemed that the first job we should do
was to review^ every possible avenue of available supply, because no
matter what we are making now, we are going to need a great deal
more of the same thing. S. P. A. B. has reviewed with each of the
agencies of the Government what might be done to expedite the pro-
curement of more supplies. In the case of a material like copper,
an increased supply might involve paying more money for metal
from the marginal mine. This has been done. It means acceleration
of the expansion of facilities, to produce more copper. S. P. A. B.
is surveying every critical material to find out ways and means of
expanding production. We have surveyed steel, copper, aluminum,
magnesium, nickle, cobalt. In that field S. P. A. B. has done, in my
opinion, an excellent job, and it will continue until we know more about
the total over-all requirements.
Mr. Curtis. The paying of more money for copper from the mar-
ginal mines may in the long run result in an economy, may it not?
Mr. Nelson. It is definitely an economy.
Mr. Curtis. Because it saves reserves ?
Mr. Nelson. Right, sir. I am positive that it is an economy, and
it is recognized as such. Mr. Henderson, who has been entrusted with
the job of price administration, has been keen to do that wherever
we could increase production.
ALLOCATIONS PROCEDURE
Mr. Curtis. Given a shortage in a critical material, and a need for
curtailment of a less essential industry, what is S. P. A. B.'s proce-
dure of allocation among various companies? More specifically,
what is your viewpoint on permitting all small companies employing,
say, 10 people or fewer, to utilize all the raw materials needed to
meet 100-percent quotas until the large companies with their superior
technical facilities and resources get into defense production?
Mr. Nelson. One of the things that S. P. A. B. undertook at its
very first meeting was to instruct the executive director for supplies
and priorities to see what could be worked out. We have a method
3030 WASHINGTON HEARINGS
now which we think will be a simple allocation. We can't give them
100 percent of what they want, but I think that what is needed is to
distribute a definite amount of materials, even though they may be
scarce materials, to help a fellow over until he can readjust his busi-
ness. I think within a week now we will have an announcement on
something in this direction, that will go a good part of the way
toward solving the very problem you have been talking about,^ It
has been one of my objectives to find a simple system whereby we
could do two things : First, by giving a small amount of material,
enable a man to manufacture a large volume of end product, there-
fore giving employment to people; and secondly to enable the small
man to get small amounts of material that will help tide him over
during the process of reconverting his business.
Mr. Curtis. Will that system be such that a company will know
for a period of months or maybe a year that there will be available
raw materials up to, say, 60 percent or 70 percent of its past con-
sumption ?
Mr. Nelson. We can't do that until we know the total over-all re-
quirements. We must know how much of that material we are going
to need for military purposes before we can determine how much is
to be allocated. We are getting that information in very good shape
now, and I should say within 30 or 40 days we will have a pretty
definite idea of just how large the military requirements are going
to be. Then we shall start with a change in the method of allocation
of that material to the military services and to industry. We are
starting now to make experiments in allocations leading in that di-
rection. I have said several times that I felt that the present system
of priorities wouldn't work over a long period of time, particularly
where there were shortages resulting from the demands of the mili-
tary program. The present method of assigning a priority rating
to an industry does not assure balanced quantities of the material.
Until we know what the total over-all requirements are, however, we
can't answer the question which you have asked me.
Mr. Curtis. But that will be your ultimate objective?
Mr. Nelson. It has to come.
Mr. Curtis. But the policy to be announced in a week or so will
take care of the interim?
Mr. Nelson. Yes; particularly for small business.
Mr. Curtis. I feel if the managers of small industry once find out
what they can do, they will accept the situation and be glad to make
the necessary sacrifice. They will make substitutions of their own, I
helieve, and they won't have so many problems to submit to Wash-
ington. Do you agree?
misunderstanding or priorities system
Mr. Nelson. That is right, sir. I would like to say, however, that I
think there has been some misunderstanding about the whole priorities
system with respect to the small manufacturer. I have read in the
press, and have seen statements made by the smaller manufacturers, to
the effect that the priorities system tends to force them out. The sys-
1 On November 7 the S. P. A. B. announced a change in policy, from a system of priorities
to a system of aUocations.
NATIONAL DEFENSE MIGRATION 8031
tern was not intended, certainly, to force the small manufacturer out,
and we don't want to see any system used in that direction. What has
happened, I think, to a very large extent — and I don't know that there
is any way we can get at the problem — is that the smaller manufac-
turer has been cut off by many of the larger manufacturers, because
when they have more business, the larger manufacturers of raw ma-
terials or of finished products have a greater demand than they can
supply. The larger manufacturer or supplier of raw materials will
cut off from his books the fellow with the least desirable credit ratings
and in many instances priorities have been blamed when no priority
has figured in the situation. I have had instance after instance of this
pointed out to me, in which materials that were not even on priorities
lists, such as paper, lumber, brick, glass, have been withheld from the
smaller manufacturer. Often he says priorities have prevented him
from getting his material, whereas his failure to get it really was due
to the fact that he was being cut off' in favor of someone else. A re-
vamping of the priorities system will not stop that practice.
Mr. Curtis. Are you able to say whether or not you will ever have
to establish a priority with respect to newspaper print ?
Mr. Nelson. 1 don't think so. But there has to be more conservation
of paper. 1 think there is too much waste of paper in this country.
Mr. Curtis. Congressional speeches, for example ?
Mr. Nelson. I wouldn't limit it to congressional speeches.
The Chairman. Mr. Nelson, one of the fundamental needs to which
you have called attention is a survey of our requirements, which you
are making now.
Mr. Nelson. Yes, sir. We are working with the Army and the Navy
to get those requirements.
The Chairman. Are you working out any plans for a comprehensive
survey on a Nation-wide scale?
Mr. Nelson. That is being done, too, sir.
The Chairman. What about manpower?
Mr. Nelson. Yes, that also is being done, through Mr. Hillman's
Division at O. P. M. He has a very good idea of the manpower in the
United States.
USE OF' EMPLOYMENT SERVICE ROLLS
The Chairman. The committee was startled a short time ago at one
of our Washington hearings when it was stated that a survey had
been made of the State and Federal employment agencies, and that
at that time there were 5,000,000 persons registered and out of work.^
Of course a good many more are not registered. I have always had
the impression that the State and Federal employment agencies
have not been given enough attention. I receive many letters from
workers and I always tell them to file with the employment agencies.
They come back months afterward, usually to tell me that no action
has been taken on their application. I oftentimes wonder whether
we couldn't make those lists a little more active than they are.
Mr. Nelson. I think you will find, sir, that Mr. Sidney Hillman
has been working on that with his whole division, and is arriving
at methods of making better use of the lists, and of making the
Employment Service more adaptable to the needs of industry, in
^ See testimony of Arthur J. Altmeyer, Washington hearings, pt. 17, p. 6782.
gQ32 WASHINGTON HEARINGS
the hope that they will be used more by industry when industry needs
people. He would be able to give you a much better picture of
that than I can.
The Chairman. I think you are absolutely correct in pointing
to the uncertainty in regard to what the small man can get and do,
as an unfortunate situation. You will find, I think, that these
people are willing to take a beating, but they don't want to take
an unnecessary or unfair beating. One of the purposes in holding
these hearings is to inform the public of what you are doing.
Mr. Nelson. In that connection, I have repeatedly said that the
American public and the American businessman may submit to
almost any kind of sacrifice if, first, they think it is necessary,
and second, they feel that all are being treated alike. Those, to
me, are the fundamentals that will guide the American people in
making any sacrifice that may be necessary to reach any objective
in which the}' believe.
The Chairman. The time element is pressing us, and is aggravat-
ing the problem. From your experience, you know probably more
about it than anyone in this country. It took Hitler 7 years to
prepare for war. Do you think we are doing about as well for the
first 2 years as he did ?
UNITED STATES OUTSTRIPS HITLER IN INDUSTRIAL PROGRAM '
Mr. Nelson. I think we have done better. I don't think there is
any doubt about that, and I would refer you to the record. We
are building an airplane industry in a year that is bigger than the
automobile industry, which took years to build up; we are build-
ing a new tank industry which, before it gets through, ^yill be
about as big as the automobile industry; and we are building an
entirely new industry for the making of all kinds of guns and
other implements of" war. I think a great deal of progress has
been made. However, we can't be satisfied with it, because a great
deal more is necessary. It is going to take a great deal more if
we are going to accomplish our objective.
The Chairman. Mr. Cooke estimates that only 40 percent of
our tool capacity is being utilized at the present.' What plans
has S. P. A. B. developed to use the remaining 60 percent?
Mr. Nelson. We haven't evolved a plan yet. The whole machine-
tool situation is being surveyed by O. P. M., from two angles:
First, with the object of increasing the production of machine tools,
and second, to bring about a greater utilization of the machnie
tools that we have. I can't say at the moment that the O. P. M.
study has reached a stage that "would give us the information that
you have asked for.
The Chairman. Mr. Cooke also states that it would be possible to
increase our industrial efficiency by pooling the techniques of various
individual firms.^ Has anything been done along this line?
Mr. Nelson. Yes, sir; but not as much as should have been done.
Techniques are being pooled to a considerable extent, although not on
an orderly and well-planned basis. This is done through meetmgs of
^ See p. 8050.
' See pp. S048, 8040.
NATIONAL DEFENSE MIGRATION 8033
the industry, for passing on such techniques. I believe Mr. Cooke is
right when he says we haven't done all we can in that direction.
The Chairman. In his statement he says that from an English view-
point, large plants are easier to convert than small plants.^ Can you
give the committee some idea of how many small plants have been
converted to defense production?
Mr. Nelson. No. sir : I have no figures on that. We could eet them
lor you."
The Chairman. I would appreciate that information. Thank you
very much, Mr. Nelson. You have made a splendid presentation, and
I know it will be valuable for the record of this committee.
Mr. Nelson. It is always a pleasure to appear before you.
The Chairman. We shall now hear the panel of industrial engineers.
TESTIMONY OF PANEL OF INDUSTRIAL ENGINEERS
The Chairman. Will the following gentlemen please come up and
take chairs here? Messrs. Cooke, Henry, Person, and Taub.
Gentlemen, the committee is very glad to have.3'ou here today, as
experts qualified to discuss the production problems of the defense
program, and especially the problems of converting industry' for all-
out production of defense goods.
During a hearing we held in Detroit a month ago, unemployment
and threatened out-migration due to the curtailment of the output of
automobiles were discussed. We were told there that the converti-
bility of manufncturing plant was closely connected with questions
of migration. We propose to ask each of you, in turn — Dr. Person,
Mr. Cooke, Mr. Henry, and Mr. Taub — a few questions individually
and then we will make the questions general, and give you an oppor-
tunity to amplify each other's answers.
TESTIMONY OF MORRIS L. COOKE, CHAIRMAN, SHIPBUILDING
STABILIZATION COMMITTEE, AND TECHNICAL CONSULTANT, LA-
BOR DIVISION, OFFICE OF PRODUCTION MANAGEMENT, WASH-
INGTON, D. C.
The Chairman. Mr. Cooke, I wonder if you would be kind enough
to introduce the panel, stating names and positions.
Mr. CooKE. To my left is Mr. S. T. Henry, assistant to the president
of the McGraw-Hill Co. Next to him is Mr. Alex Taub, one of my
colleagues in the Labor Division of O. P. M. Then there is Dr.
Harlow S. Person, an economist, of Ncav York, and now consulting
economist to the Rural Electrification Administration.
The Chairman. And your own position, Mr. Cooke ?
Mr. Cooke. I am chairman of the Shipbuilding Stabilization Com-
mittee and technical consultant to Mr. Hillman, head of the Labor
Division of O. P. M.
1 See p. 8044.
2 The committee, sutispquent to the hearins. was informed by the office of the Supply
Priorities, and Allocations Board that this information was being gathered, but that the
report would not be completed in time for publication in the present volume. When
received it will be published as an exhibit in a later volume of these hearings.
g034 WASHINGTON HEARINGS
The Chairman. I should like to say to you gentlemen that you have
filed with the committee some very valuable statements, and we will
have them set forth in full in our record.
Dr. Person, I shall begin with your paper.
(The paper referred to above is as follows :)
STATEMENT BY DR. HARLOW S. PERSON, CONSULTING ECONOMIST,
RURAL ELECTRIFICATION ADMINISTRATION, UNIl-ED STATES DE-
PARTMENT OF AGRICULTURE, WASHINGTON, D. C.
Summing up the problem before your committee, I take it that defense mi-
gration is a result, iirst, of giving defense contracts to large coueerns in in-
dustrial centers rather than distributing them in accordance with existing
labor supplies and productive capacities ; second, of the inability of local plants
in the absence of defense orders to secure supplies of critical materials to
continue normal operations ; and third, of the desire of workers in lesser
centers to take advantage of the new defense jobs created in the larger
industrial ceqters.
The problem of defense migration is not an isolated problem suscep'^ible
of direct solution. Looked at in large perspective it is a consequence of in-
ability to organize and implement a war economy within the frame of "business
as usual." It is a phase of the over-all problem of effective organization for the
production of defense and war materiel. The solution lies along the following
lines : First, speedy arrangements for all-out or max'mum production for de-
fense; second, maximum eflSciency in implementing these arrangements; third,
a planned optimum balancing of production for defense and production for
civilian needs ; in short, by bringing to bear on the organization of a national
plant for production of war materiel that abundant production and engineering
skill so manifest in private enterprise in the United States.
In expressing more detailed views it must be recognized that I have had no
responsibility related to the problem that puts me in a position to answer
questions calling for statistical replies; such as questions concerning the extent
of the facilities for defense production in the United States and their geo-
graphical distribution.^ There are defense agencies that have been in exist-
ence long enough to have made such an inventory, and they should be con-
sulted. If an adequate inventory has not yet been made, it can still be made
with rapidity if certain existing agencies with facilities for making such
inventories are called on, and their facilities are effectively organized for the
purpose. I have in mind, of course, not only Government agencies, but also
national organizations of industrialists and of organized labor, the railroads,
and other private agencies in a position to assemble data rapidly on a
national scale.
During the past decade the Nazis have displayed amazing effactiveness in
organizing for military aggression and for provision of the necpssary materiel.
They are showing aiuazing effectiveness in integrating the facilities of occupied
countries into their own system of prov'sion of materiel. In respect of their
dominating purpose, eflSciency of the pertinent organization and procedures is
somethirg to which the world has never before seen anything comparable.
This makes the problem of the resisting democracies correspondingly difficult.
Great Britain also, within the 2 years since she perceived that her very
existence is at stake, has developed a notable efficiency in organizing for war
and for the procurement of war materiel. And — of outstanding significance —
^ In id'^ntical letters .sent to the four memliers of the panel prior to the hearing, the
committee addre.ssed the followii^g set of questions as a means of suggesting some of the
subjects on A\hiph its members wished to obtain views of the witnesses :
1. Has sufficient emplinsis in tlie national-defense program thus far been put on the con-
version for defense production of existing plant facilities?
2. How can we, consistent with defense needs, more fully utilize existing production
facilities?
3. Where does excess capacity exist which should be utilized?
4. From a technical viewpoint what nondefense industries can be most readily converted?
5. What are the technical difficulties of converting different kinds of industries and different
sizes of plants?
6. Are there significant differences as bet^""een large and small plants, large and small enter-
prises, mass prodtiction. and less specialized plants?
7. How can we more fully utilize labor displaced as a result of material shortages and the
allocation program, and the already existing labor reserve?
NATIONAL DEFENSE MIGRiVTION 8035
Great Britain is succeeding in doing this without impairment of the funda-
mental qualities of democracy. I shall have more observations to make along
this line before I conclude this statement.
OBGANIZATION OF THE NATIONAL PLANT
The most significant thing to me is that the United States possesses capacities
for planning and organization in larger measure than does either of the nations
to which I have referred ; and the most appalling thing is that these capacities
have been drawn on to so limited an extent. The most effective technique of
organizing and planning for achievement of any predetermined purpose had its
origin in the United States, was adopted by private industry in tlie United
St tes hmg before it was adopted in other countries, has been integrated into
our ways of doing things more extensively and more deeply than in any other
country, and has in consequence developed more technicians skilled in manage-
ment than in any other country. The United States is not only the country of
origin of mass production — of large scale, specialized production on single-
purpo.'-e machines — but it is the country of origin and of development of the
most effective techniqtie of production in middle-size and small plants — pro-
ducers of items of variety on multiple-purpose machines. The urgent prob'em
cf rapid production of materiel for defense and for war confronting the United
States is one of bringing these two superiorities into harmonious, effective
relatiinship ; of securing maximinn advantage of the flexibility, adaptability,
and spetd of adjustment of the thousands of small plants of multiple-purpose
machines to start the flow of production of lu'gently needed items immediately,
>vhile we are waiting for the huge mass production plants of sing e-purpose
machines, less flexible and less speedily adaptable, to bring their great capaci-
ties to bear on the problem. The thousands of plants of the 75- and 155 milli-
meter class can win a lot of production victories while tracks are being laid
to bring the ponderous 16-inch plants into action.
The superior capacity of the United States for technical organization and
management of production is distributed among 100,000 production executives
and engineers in middle-size and small plants, and we have not yet succeeded
in making effective arrangements for assembling and focusing this capacity
on tl e urgent production problem. The United States has been a land of such
magnificent opportunity that promoticm and corporate organization and finance
have dominated the scene, and the geniu.ses along these lines have become the
headliners of business. Consequently in time of emergency calling for experi-
ence in industrial functions we instinctively turn to these business headliners to
take on the problem of production on a heretofore unheard-of national scale,
but in so doing we are not drawing on the reservoir of genuine technical
capacity for organization and production.
The radical, the effective, the urgent step is still to be taken. There is still
to be set up an agency, with the authority of common consent as well as of law,
and with the competence of technical knowledge, whose task will be to organize
all the plants of the Nation into one great coordinated national plant along the
same lines in which the best-managed medium-sized plants are now organized.-
.\Vhile the national plant will be vast in its reach, and the component elements
more varied and complicated, the principles and the technique to be applied are
identical with those involved in efficient individual plants. Whole plants and
their facilities become the primary factors of coordination, instead of machines;
yet within the frame of coordination of each component plant, coordination
of machines and processes in detail is effected even more efficiently.
We have in the United States learned to do things in this way up to the
scale of the private multiple-plant corporation. Now we must do them on
the scale of a national plant. The multiple-plant corporation has learned how
to get results effi 'iently and dependably by a harmonizing of centralization
and decentralization. The people acting through the Government must do
the larger job of effective national defense by a similar harmonizing of cen-
tralization au'l decentralization on a national scale. It can be done if suitable
technical abilities are wisely drafted to effect the organization and formulate
the procednres.
This harmonizing of centralization and decentralization is of major im-
portance. The impulse that assures the directing of all efforts in a coordinated
manner toward a common end flows from the center out ; the impulses that
assure the common end through the effectiveness of a million and one detailed
acts have their origin in and are applied at the points of detailed action.
gQ36 WASHINGTON HEARINGS
THE MULTIPLE-PL\NT CORPORATION
Let US look for a moment at the multiple-plant corporation. At the central
general othce are determined the major objective, the component objectives,
general policies of operations, allocations of fixed and working capital, of
materials, and so on. For each component plant is developed a detined ob-
jective— qualitative and quantitative — and a specific schedule. A frame of
purposes, policies, facilities, and schedules is passed along to each component
pjanr, but as long as each plant meets its schedules the general office does
not attempt to regulate the operations of a plant within this frame.
The managing oflSce of a plant receives this frame of directives and within
it develoi's a consistent schedule of detailed operations for the plant as a
whole, and a component consistent schedule of operations for each department
of the plant. Each of these is a frame of component purposes, policies, facili-
ties, and schedules for a department. As long as each department meets its
schedules the general office of the plant does not attempt to manage the opera-
tions of a department within the frame.
A department may consist of shops or sections. The staff of a depart-
ment manager studies the frame of directives received from the general office
of the plant, and in turn within that frame develops a consistent schedule of
detailed operations ror eacn suop or section. Then within this frame of
directives the shop or section proceeds to manage itself.
This system of frame within frame of directives is what effects harmoni-
zation of centralization and decentralization ; it makes possible the two great
componeuTs of effective results: First, efficiency of individual acts because
their character is decided at the points of the acts ; second, assurance that the
detailed acts are directea towaru a common purpose because the what, when,
where, and how much involved in an act have been designed at a common
center. From a center comes the maps, as it were, that guide the great caval-
cade of detailed acts toward a common goal; but each operation in detail in
the great cavalcade is performed in accordance with the judgment and skill
of the local operative.
This arrangement for harmonizing centralization and decentralization is the
only dependable one that human ingenuity has devised for successful conduct
of operations on a large scale. It is the essence of effective military strategy,
tactics, and operations, just as it is the essence of effective industrial organi-
zation and management. As I have suggested, our urgent national problem
now is to effect an organization for production of defense and war materiel on
the grand scale of a national plant of integrated individual plants.
It will require frame within frame of directives from a national center
and through regional centers of planning and framing directives; but it will
require also arrangements for the maximum of coordinated local autonomy
at every work center in the system.
ALL-OUT PROGRAM REQUIRED
Let US be more concrete. I see our urgent problem as follows: The most
rapid maximum production of defense and war materiel, with the least possible
disturbance of peacetime livelihood activities. This does not mean the main-
tenance of business as usual with a residual production of as much war ma-
teriel as possible under that condition. It means just the opposite; it means
the conversion to defense and war production of every suitable and necessary
production facility, large and small, in lesser cities and villages and in rural
areas as well as in great industrial centers. It makes production for civilian
purposes the residual estate. But there must be no gypping in determining
this residual estate; defense and war claims should go just as far as precisely
calculated requirements indicate, and no farther; and production for civilian
needs should be as effectively organized and conducttMl within its area as is
defense and war pi-oduction within its area. I should like to make a para-
doxical observation here : There is likely to be more disturbance of the civilian
economy if effort is made to preserve it by curtailing the defense and war econ-
omy, than there will be if the defense and war economy is given all the facilities
it requires and conversion of plants to its needs is made completely and expe-
ditiously to the extent required. Defense migration i-esulting from defense
unemployment will be the greater if halfway measures are pursued; and will
more likely be at a minimum if production for defense and war is all-out and"
NATIONAL DEFENSE MIGRATION 8037
vigorous, and the activities widely decentralized as in a strong normal economy.
Having in mind our statement of the urgent problem, I see in imagination
although with hazy outlines something like the following :
A supreme board of diplomatic-military strategy that plans a line of com-
bined diplomatic and military activity for a year or two ahead. From this
over-all plan there passes to the military establishments a frame of directives
for military preparedness and action.
Within this frame each military establishment calculates iti-i minimum
essential requirements in detail and on a time schedule. This schedule of
requirements then becomes a directive for organizing the Nation's production
facilities so as to meet the military needs, and also so as to determine the
residual capacity available for civilian needs and to organize this as effec-
tively as the military procurement sector is organized.
PROCUREMENT OF MILITARY MATERIEL
The formal procurement of military materiel should be lodged in the military
establishments. But at this point serious problems arise. Military establish-
ments are apparently by nature not adequate for a large-scale emergency
procurement task. Skilled in technical military matters they are not skilled
in business matters. Especially in view of the fact that in time of emergency
the problem is not one merely of procurement, i. e., placing orders in an
open market, but one of inventorying the production facilities of a nation,
organizing the.se for rapid achievement of maximum production, and then
following up the national production activities for achievement of maximum
production, just as an individual private enterprise pursues such follow-up
activities. The military establishments appear to have no basis in experience
for competent inventorying of national facilities and for organizing and follow-
ing up production proces.'^es on a national scale ; yet it appears desirable that
these establishments actually execute the orders in order to maintain a func-
tion that has continuity through peace into war and back into peace condi-
tions. To meet. this condition there appear to be two alternatives:
1. Enlargement of the military establishments by incorporating in them an
adequate organization of civilian personnel exijerienced and skilled in the
engineering and the direction of production. The technical military activities
of the military establishments for which there is a shortage of trained officers,
and the design of materiel, the preparation of specifications and the sched-
uling of requirements on a quantity and time basis, would be reserved to the
regular military personnel. The inventorying of national production facilities,
organization of these into an effective national plant for defense production,
negotiation and execution of contracts, follow-up of contracts and production
processes, would be a re.sponsibility of that part of the military organization
made up of the civilian personnel selected for the purpose. This civilian part
should be independent of the military part in its procurement activities
except as to the tie-in at the top. In tliis manner procurement and its follow-up
would be conducted by a personnel more experienced and competent in that
function than the military personnel, yet the contracts would nominally be
let by and in the name of the military establishment.
2. The other alternative would be to set up the procurement and accompany-
ing production follow-up in an organization independent of the military estab-
lishments but as a procuring agency in accordance with their requirement
schedules, assign to it the responsibility of inventorying and organizing the
Nation's production facilities, negotiating contracts up to the point of letting
them, and of following up the production processes and maintenance of a
national flow of military materiel that meets the military schedules. The
formal execution of the contracts as developed to the point of execution could
be reserved to the military establishments.
TTie purpose of thus providing a special organization of competent produc-
tion engineers and managers within or adjusted to the military establishments,
is to make available to our defense efforts, as is not now adequately done, that
fund of production management and engineering ability possessed by the
United States in greater abundance than by any other nation. Given a clean-
cut assignment and authority commensurate with the responsibility, the pro-
duction engineering skill of the Nation could organize the national plant and
establish a national flow of specified materiel comparable, although on a
larger scale, with the regularity of the flow of work in the best managed
private enterprises. The technique would be identical in essential features.
gQ38 WASHINGTON HEARINGS
but with a larger number of frames of coordinating directives passing out from
center to center to where the details of effective execution are organized and
supervised.
CHALLENGE TO DEMOCRATIC OPERATIONS
Given a clean-cut assignment and authority commensurate with the responsi-
bility—that is the condition precedent. That is the condition precedent to
organization by a democracy of its production facilities adequate to meet on
superior terms and stop once and for all the onslaughts of militarily efficient
international higliwaymen. The Nazis liave made themselves amazingly efla-
cient along certain pertinent lines at the sacrifice of every vestige of democracy.
The British are achieving a reasonable efficiency within the frame of democ-
racy and without sacrificing the essential of democracy, but at immense pres-
ent sacrifice of individual privileges and great present restriction of indi-
vidual opportunities. The Nazis have challenged the efficiency of democracies
and in so doing have challenged their very existence. They have been prepar-
ing for their depredations for a decade. They have selected, tested, discarded,
reselected, and retested personnel until they have a highly efficient operating
organization for the particular purpose. We have hardly begun the building
of an efficient machine by such measures. They have inventoried and brought
under control not only the resources of Germany but also those of occupied
territories. We have hardly begun inventorying our resources. They gave
up "business as usual" on an individualistic basis long since, and have replaced
it with blocked business in support of the particular aggressive purpose.
Among us the sentiment of business as usual is still strong. They have
eliminated personal interests that conflict with the national purpose ; they
have eliminated personal ambitions that are inconsistent with the national
purpose; but these things still hamper us.
Organization for cfl5?iency in overcoming onslaughts of international high-
waymen, without sacrificing democracy, means that we must learn to distinguish
between the fundamentals of democracy and the appurtenances of democracy.
For a time we shall have to sacrifice the latter. It is quite possible, however,
that if we preserve the fundamentals even at the sacrifice for a time of the
appurtenances, of which some are obsolete, the new appurtenances that will
inevitably develop after the emergency task is done will represent a stronger
and more desirable democracy.
There was never a more democratic grouping of people than on the historic
frontier of the United States. When Indian uprisings led to attacks on set-
tlers and frontier communities these ancestors of ours organized their de-
mocracies for effective action. They knew the simple technical requirements and
they organized them. They chose leadei's especially, i. e., technically, com-
petent to direct the particular job ; formulated rough rules, regulations, and
procedures; each man was assigned his part; and individually they obeyed the
requirements of the situation and the directions of their leaders. It was
similar in the days of vigilance committees, and posses to destroy cattle rustling.
And when all these jobs were completed democracy had not been sacrificed ;
it was stronger than ever.
The problem confronting us today is identical in essence but vaster in scope
and more complicated in detail. But the necessary procedure is in essence the
same: draft technical leaders; organize for effective action; establish suitable
procedures; obey orders; each for all and no especial privilege for any indi-
vidual. The head of a small unsung enterprise (because he knows how to plan
and produce) may become a leader, and the president of the largest corpora-
tion (whose ability is in the field of promotion) may become a simple private.
Such circumstances arise out of the nature of the particular urgent task.
After the emergency is over they can return to their accustomed activities.
But during the organizing for and activities of the emergency it must be
otherwise.
DEMOCRACY STRENGTHENED BY EFFECTI\'E ORGANIZATION
There is one reassuring aspect of the technical lines of action suggested in
this statement. Organization of the national plant for effective action in meet-
ing the emergency, if along the lines of the best technique of production en-
gineers and managers in individual plants, will be a positive move in the
direction of a strengthened democracy. The best in technical management of
NATIONAL DEFENSE MIGRATION 8039
private enterprise has been developed on the basis of harmonious employer-
employee relations — on more and more democracy in the shop. It has involved
workers' consent, workers' participation in determination of standard pro-
cedures and schedules, in many instances consultation with workers on problems
in the field of major policies.
Defense migration is coming to be more and more the result of a failure to
distribute defense orders widely among the many thousands of plants of the
country. The problem is to be met by so distributing orders as to bring every
possible plant — small and middle-size as well as large— into a great national
plant engaged in the production of defense and war materiel. This can be
achieved only, on the one hand, by an all-out program of production for defense
and, on the other hand, by bringing to bear on the organization of the national
plant that abundant engineering and production skill that has been so manifest
in private enterprise.
Viewed from a still larger perspective, solution of the defense migration
problem through solution of the defense and war production problem along
the lines here suggested, will constitute a considerable step in solution of the
post-defense problem. Ghost towns will have been revivified ; new ghost towns
will not have been created ; the post-defense economy will rest on the basis of
a highly productive but widely decentralized national industrial plant.
TESTIMONY OF DR. HARLOW S. PERSON, CONSULTING ECONOMIST,
RURAL ELECTRIFICATION ADMINISTRATION, DEPARTMENT OF
AGRICULTURE, WASHINGTON, D. C.
The Chairman. Dr. Person, you say in your paper that —
the Nazis have challenged the efficiency of the democracies and in so doing have
challenged their very existence.
In another place you say that —
our failure to utilize our productive capacity is appalling.
To what do you attribute that faihire?
Dr. Person. Fundamentally, I should attribute it to the difficulty
and slowness of a democracy organizing itself for such action.
The Chairman. You also state in your paper:
The radical, the effective, the urgent step is still to be taken. There is still to
be set up an agency with the support of common consent as well as at law and
with the competence of tactical knowledge whose task will be to organize all
the plants of the Nation into one great coordinated national plant along the
same lines by which the best managed medium-sized plants are now organized.
Will you explain that a little more fully?
Dr. Per-ox. If I may be permitted to"refer to the first statement
made by Mr. Nelson, I agree with him completely that all planning
for action must start with a knowledge of what "has to be done and
what is wanted, and that the absence of that knowledge is always a
limitation. But it seems to me equally important that some agency be
concerned with organizing the facilities in advance for meeting the
need as soon as its existence is known.
Now, so far as I can gather as an outsider looking in on prepared-
ness, it seems to me that we have been dilatory in inventorying the
production facilities of the country, plant by plant and machine by
machine, and having this knowledge ready for immediate and effec-
tive use as soon as details of what is wanted are known. And my
observation of organization and management in general would require
that there be a very definite functionalized and specialized agency
for this purpose, made up primarily of people concerned with organi-
60396 — 41— pt. 20 3
3Q40 WASHINGTON HEARINGS
zation — that is, experienced in organization, but also experienced in
classifying and appraising plants and tools and machines. To sura
up, we must have a functionalized and specialized agency made up
of personnel with a very particular combination of information and
experience.
IMPORTANCE OF MATERIALS INVENTORY
The Chairman. In other words, you feel that in the allocation of
materials, whether for defense or nondefense, we will never know how
to proceed if we do not first have an inventory.
Dr. Person. I agree with you.
The Chairman. That was also brought out in the Detroit hearing.
Dr. Person. We must know our materials, our manufacturing fa-
cilities, and our requirements. Knowledge of those three things is the
very basis of good management, of effective, economical management,
and management with a tempo to it.
The Chairman. To what extent do you think S. P. A. B. fails to
meet that problem ?
Dr. Person. I am not in a position to answer any such question in
detail, Mr. Chairman. It is a quantitative question, and I cannot
answer it quantitatively. My general conclusion or judgment is based
on the information one gets from the press, and I have a positive
feeling that we haven't gone as far or as rapidly as is technically
possible.
I am not saying, Mr. Chairman, that there may not have been —
what shall we call them? — psychological circumstances that make im-
possible at the present moment an achievement which is technically
or theoretically possible. In my preliminary statement, Mr. Chair-
man, I had in mind rather the expression of an all-out view of the
technical waj^s in which I think procurement for defense should be
effected, without any particular implications as to the extent to which
we had progressed in this all-out method. My idea was that perhaps
I might offer to the committee some means of judging for itself how
far we had gone, on the basis of testimony from other witnesses who
are actually concerned with defense activities, and know what has
been done.
The Chairman. Of course, you realize, like the rest of us, that this
vast national-defense program has come upon us all at once.
Now, at another point in your paper you say :
Military establishments are apparently by nature not adequate for a large-scale
emergency procurement task. Skilled in technical military matters, they are not
skilled in business matters.
You continue :
The military establishment appears to have no basis in experience for com-
petent inventorying of national facilities and for organizing and following up
production processes on a national scale.
Would you like to enlarge on that in any way? I think that is
very interesting.
Dr. Person. I think it is quite comprehensive as it stands. My
judgment in that respect is based considerably on experience during
the First World War, when I served as an officer in the Ordnance
NATIONAL DEFENSE MIGRATION 8041
Department, and later in a special unit attached to the office of the
Under Secretary of War, concerned primarily with inspecting the
organization and procurement procedures of the various supply divi-
sions of the Army, Later, the work of this special unit apparently
satisfied the Under Secretary of War to a degree that led him to
make it at that time a part of the Inspector General's Department.
My judgment is based on that experience even more than on any
present observation of a casual nature, or on contacts of a casual
nature.
ATTITUDE OF MILITARY ORGANIZATIONS TOWARD PROCUREMENT
I think the military organizations of the United States are ex-
traordinarily efficient and expert in technical military matters. But
I think they look upon procurement as simply a matter of placing
the order — which is largely what their procurement procedure con-
sists of in time of peace. It isn't necessary in time of peace to go
beyond the placing of an order, particularly when speed is not of
consequence and reliance can be placed on the manufacturer or other
sources of suppl3^ In time of war, or of intense activity for defense
in facing the possibility of war, procurement must be looked on as a
task that reaches far beyond the mere making of a contract with a
supplier. It must involve inspecting the progress the supplier makes
in manufacture, aiding him in methods of organization so far as is
possible, and providing him with the necessary schedules and
directives.
This extension of the responsibility of procurement beyond mere
contracting would in my judgment constitute three- or four- fifths
of the area of responsibility and activity in connection with pro-
curement and would be responsible for, let us say, 90 percent of the
development of tempo in procurement.
Now, I think there is a difference between military establish-
ments in time of peace and military establishments in time of war
or in periods of war emergency. But looking at them all together,
in the large, their general idea of procurement seems to end with the
making of a contract with a supplier, and in trusting to the natural
processes of business to take care of delivery. However, in an emer-
gency where speed is a factor, between this contract and delivery is
an area of opportunity for an immense amount of aid to the supplier
that will increase the tempo and also the precision of delivery.
The Chairman. Have you any suggestions as to how to make that
improvement in the present situation?
Dr. Person. According to Mr. Nelson's testimony, there is adequate-
authority in existing agencies, and consequently I don't know that I
want to make any suggestions. I have made my statement, describing,
what I consider to be the ideal set-up for the purpose.
The Chairman. I am very much interested in your statement that
there is likely to be —
more disturbance of the civilian economy if effort is made to preserve it by cur-
tailing the defense and war economy.
Dr. Person. My point of view is very positively for an all-out, com-
plete organization for defense, and an all-out, complete demand on
the facilities necessary for effective defense, leaving production for
civilian demands, as I put it, as a residual estate in the whole situation.
3042 WASHINGTON HEARINGS
But I believe that after the defense demands are known in detail and
the capacities of the country, including the materials, are inventoried
in detail, and after these capacities and materials are organized and
arranged for meeting the defense requirements, the precise knowledge
of facilities and materials left over will permit them then to be
highly organized, with a new and advanced tempo of production that
will go a very long way toward meeting basic civilian needs. Pro-
duction for civilian needs can then be organized with a simplification
and tempo that will take care of those needs in very large measure.
Production for civilian defense should, under such circumstances, be
organized and speeded up just as is that for defense or war — ^be not
left to chance. Further, I believe that the exactness of this knowledge
of the residual estate will avert that confusion and uncertainty that
exist in the absence of such knowledge.
In other words, an all-out defense program, with all its claims
strictly defined and recognized, will leave a positive knowledge of
what can be done in respect to civilian needs and the whole problem
of adjustment of civilian industry to the needs of defense will be less
upsetting and disconcerting. When individual concerns have to set
about insuring themselves against making mistakes in the face of lack
of information, they often go further than it is necessary to go.
The Chairman. In other words, if we had definite knowledge as to
the amount of steel produced in this country, say 100,000,000 tons, we
could find out what the Army and Navy need ; then if we knew we had
50,000,000 tons left, it should not be very difficult to apportion or allo-
cate that 50,000,000 tons impartially and equitably for nondef ense.
Dr, Person. And with that impartiality recognized by the people.
The Chairman. The people would know. They won't kick if they
are getting an even break. That is substantially what we were able
to observe in Detroit, where, if the big auto companies had been
converted to defense, they would have had an assurance of materials
and been able to avoid sudden large-scale lay-offs. Do you think
that is correct?
Dr. Person. I don't know the facts of the industry sufficiently in
detail to say that it is correct. There is a strong presumption in my
mind that it is correct.
The Chair:man. Thank you very much, Dr. Person. Congress-
man Sparkman will now interrogate Mr. Cooke.
Mr. Sparkman. Mr. Cooke, I have read your statement with
much interest and I think it is a very fine statement, one that pre-
sents a clear picture with much logic.
(The statement referred to above is as follows:)
STATEI^IENT BY MORRIS L. COOKE, CHAIRRIAN, SHIPBUILDING STA-
BILIZATION COMMITTEE, AND TECHNICAL CONSULTANT, LABOR
DIVISION, OFFICE OF PRODUCTION MANAGEMENT, WASHINGTON,
D. C.
Before beginning my testimony may I express to this committee my apprecia-
tion of the altogether helpful way in which it has assembled so much data of
special interest to those of us doing our bit to put the national-defense effort
on an effective basis. Common sense and the experience abroad both suggest
that the minimum of migration is consistent with the maximum of defense
effort.
Also before taking up the subject of the more effective utilization of existing
production facilities, which is the special topic for today's hearing, may I say
NATIONAL DEFENSE MIGRATION 8043
that as Chairman of the Shipbuilding Stabilization Committee I have come to
feel that the stabilization idea as first suggested by Mr. Sidney Hillman and
later worked out by our committee, so that it today measurably controls the
actions of over 300,000 workers in American shipyards, is the route by which
much migration will be avoided. The zone standards set up for the four na-
tional water fronts have already inspired similar stabilization movements both
in building construction and aircraft building. These standards were mutually
arrived at by the three factors who were parties to them ; i. e., the Government,
the workers, and the proprietors of a himdred or more shipyards who are now
working almost exclusively on Government orders. The less we do by Govern-
ment fiat and the more our moves are the willing and joint action of the
parties affected, the better it will be for our democratic ideals. I transmit
herewith copies of the four zone standards as drafted for the west coast, east
coast, Great Lakes, and Gulf water fronts. I will be glad to furnish this com-
mittee within a few days copies of a forthcoming brochure. Ships for Freedom,
in which our methods and conclusions are quite fully described.
Although I have been in Washington since last October, first with the
National Defense Commission and then with the Office of Production Manage-
ment, not since early in this year have I had any public assignment which
would enable me to speak in any factual or statistical sense of the progress
made or of the details of problems being encountered in the drive to bring
a larger percentage of the smaller manufacturing plants into the defense
program — a movement which has in this country developed under the name
of "farming out," in England under the name of "bits and pieces" or "odds and
sorts." I was one of those who a year and more ago felt, as I still feel, that
the defense effort of the United States would have to be intensified to a
point where all of our available tools, all of our managerial skill, all of our
labor was utilized — and that the quicker this was done the better.
FARMING OUT
Mr. Hillman, then a member of the National Defense Commission, was con-
cerned about finding work for those in distressed areas. I therefore undertook,
within the Labor Division, to make reconnaissance studies of so-called ghost
towns and ghost areas and of the ways in which both abroad and in this
country those who were pioneering had found it possible to utilize idle labor
and idle machines on defense work. Last winter and spring the Labor
Division of the Ofiice of Production Management issued a number of "farming-
out bulletins" and in every way in its power sought to further the education
both of persons in industry and of those in Government on what had been
and could be done in the way of spreading defense work. In the course of
time an administrative service was set up in the Office of Production Manage-
ment for the express purpose of furthering this emergency type of subcon-
tracting. Now this has been reorganized as the Division of' Contract Dis-
tribution under Mr. Floyd B. Odium.
The early work of the Labor Division in furtherance of farming out has
been described in testimony of Mr. Hillman before tliis committee, and the
main results of our reconnaissance studies are available in the bulletins to
which reference has been made. Not having had any direct responsibility in
recent months for the efforts actually to distribute defense work more widely,
I do not feel myself in a position to make comments on the organization of
this work as it has been prosecuted by the several agencies of Government
having charge. I shall devote my testimony today, therefore, not to speaking
again of matters which have before been brought to tlie attention of the
committee, but to a discussion of certain points affecting general method
which I feel to be essential to the effective conduct of the defense program.
First, a word on the questions which the committee has specifically asked
the panel.^ Some of these can be readily answered. There can be no question but
that thus far insufficient attention has been paid to the conversion for defense
production of existing plant facilities. In reply to the query as to where there
is excess capacity which should be utilized the answer is "almost everywhere."
For even in those plants which are turning out all the defense goods of a given
type that they can produce, there are usually individual machines which are
idle a large part of the time. And there are very few plants, indeed, which
operate 24 hours a day, 6 or 7 days a week, with anything like as much of
1 See footnot?, p. 8034.
§044 WASHINGTON HEARINGS
their capacity utilized in the second and third shifts — especially the night
shift — as competent observers believe possible. A report on the hours vs^orked
in various defense industries in June 1941 contained in the most recent pub-
lication of the Bureau of Labor Statistics in the series Utilization of Plant
Facilities in Selected Manufacturing Industries Under the National Defense
Program showed 70 percent of the employees in 299 selected plants on the first
shift.'
CONVERSION OF NONDEFENSE PLANTS
The inquiry as to what nondefense plants can from a technical viewpoint be
most readily converted is easily answered in part. Since the great need is for
precision work, and especially for machines and tools with which to manufacture
the defense products themselves, the tool-room facilities in almost every type of
industry can be used instantly. There are shortages reported in classes of work
such as drop forgings and in certain types of processing such as heat treating
where the required facilities might be carefully requisitioned not by plants but
on a Nation-wide basis. Plants that do jobbing work, which are not specialized
but could repair or make almost anything — especially where machining is
required — could be used in any number. This group includes large numbers of
small plants as well as those of intermediate and large size. The greatest need
is for plants accustomed to precision work, but other plants can be upgraded.
In general, I think we may say that in the kind of all-out production which cir-
cumstances now require it should be possible to use practically every machine tool
in the country — reconditioned, or as they stand — excepting perhaps only those
relatively few which were designed for a highly specialized purpose.
Questions as to the technical problems involved in converting plants in different
industries and of different sizes are such that I personally could not answer them
at all adequately even if time permitted. Among the industries which are now ad-
versely affected" by diversion of material to defense use there must be a consider-
able number of plants whose operations are so different from those which are now
most needed that it is hopeless to consider their conversion. Among those which
can be converted the problem will be greatest in the case of those plants whose
equipment is not in good condition and whose workmen and managers are not
accustomed to close work— although the difficulties here are usually exaggerated.
Measured in terms of ratio of results obtained to etfort expended, it will, gen-
erally speaking, be more of a problem to convert small than large plants, partly
because in a given case the results obtained will be smaller, and partly because
the small plant is likely not to be so well equipped with management personnel
capable of helping in making the change. This means that in many cases, though
by no means all, the cost per unit will be larger. But this applies also, in only
slightly less degree, to the conversion of large plants, and is a situation which
must be definitely recognized in any all-out defense program. When it comes to
converting old equipment to defense production, the ability to do good tooling is
more important than the character of the machines themselves. And it may be
said of small plants that, though the men who run them may not know much
about planning, they are, generally speaking, intelligent and resourceful at
tooling.
While I am in thorough sympathy with the effort to give employment to those
who are being forced into idleness, and to save as many threatened businesses as
possible, I think that this whole problem will in a way take care of itself if we
turn our first attention, not to making work for those who do not have it but to
getting done by every possible means the huge volume of defense production
which we need. In the balance of my remarks I shall speak, therefore, rather
in terms of how industry may be eifectively mobilized for aid to the Government,
than of how the Government may aid industry.
In any analysis of why we do not produce munitions more rapidly and with
fuller use of all our capacity, first consideration should be given to the state of
mind and habits of work of many of those in direct charge of procurement —
(Officials, thnt is, of the War Department, Navy and Maritime Commission. Before
discussing this I should note that because it has not seemed feasible to declare
"M" day and thus throw into gear the Army's mobilization plans, certain diffi-
culties have been encountered which otherwise would have been avoided. I
1 Tlipse werp plnnts for which comparable data wore available for .Tune 1941 and
rtonppihpr 1040. For a larspr saniplp of plnnts incliidinsr many for which data were iin-
avniliiblp thp pprcpntatro on tho first shift was fi4. Spp statistics snbmittpd by thp Actin?
OoTTiniissionpr of T.nhnr Statistics, p. SI 00. Xpithor croup of plants incliidos thp aif^rnft or
n'rcrnft cncino infinstri^s which have gone farther than otlier industries in developing
the second and third shifts.
NATIONAL DEFENSE MIGRATION 8045
have not made any special study of this plan, which was nearly 20 years in the
making. But I suppose we can admit that the responsibility for not taking full
advantage of it is pretty well distributed.
"procurement" versus "production"
Certainly an important part of our difficulty in speedily building up our
defense production is psychological and may be most clearly grasped if we
consider the difference between what lies behind the term "procurement,"
as used by those purchasing goods for the Government, and the term "pro-
duction" as used in industry. The term "procurement," as its meaning has
been developed over many years of peacetime purchasing, describes a certain
type of assignment given to military men to acquaint them with the various
types of things which are needed by the services and, in a general way, with
the means used for obtaining them. The term "production" as used by Amer-
ican manufacturers, by way of contrast, implies volume and tempo.
One of the difBcuUies in maintaining a virile and effective military estab-
lishment in a democracy is to find a type of work for the officers to do in
times of peace which will affoi'd some training for their war-time tasks. Thus,
the Army engineers are assigned the planning for, and execution of, a large
part of the rivers and harbors work. In a similar atmosphere of doing some-
thing not merely for itself btit as a kind of experience, the supply services
have worked out their procedures for procurement (known among laymen as
buying or purchasing), which include design, drafting, and specifications,
advertising for bids, awarding of contracts, inspection and paying for the
goods. There is no special reason in peacetime for hurry in the delivery of a
preponderant part of the material so purchased.
In fact, for much of it — such as for complicated pieces like tanks, anti-
aircraft guns, and airplanes — a protracted period of purchase is desirable. In
peacetime such items are normally ordered a few at a time. Prior co 18
months ago three airplanes was probably the maximum number of fiightiug
types ordered at one time. These small orders and this drawn-out purchasing
procedure enabled those in charge to play advantageously with the design,
even after the item had reached the manufacturing stage. It enabled our
military men to take advantage of advances in the state of the art and Lo
incorporate in our designs improvements Which might be reported in the
practice of foreign countries. These techniques tend to keep peacetime ob-
solescence at a minimum. But being under the necessity of keeping so many
highly educated men occupied it was useless to estimate the over-all expense
and a premium was all but put on drift in the acquisition of supplies.
In industry — where production, in contrast to "procurement," is the objec-
tive— there is constant pressure to increase both the volume of flow and the
speed with which the product comes along. Every improvement in either
volume or tempo reduces cost. It will naturally take some time for those
accustomed to the nonchalance of procurement to acquire the attitudes and
the type of activity required by our present far-flung objectives.
NO FOLLOW-UP IN MILITARY PROCUREMENT
Another basic psychological handicap under which our munitions production
operates lies in the attitude of procurement authorities once orders have been
placed. Under a military system orders as such have a different meaning
and implication from what they have in nonmilitary life. When a military
order is issued, the assumption is properly that it will be obeyed implicitly.
Normally court-martial or some other drastic action follows when military
orders are disobeyed. Follow-up on a military order is usually considered
superfluous and only instituted when those in command consider that the
difficulties of execution are such as may possibly require a quick change in
plan. In fact in this attitude toward orders once issued lies one of the funda-
mental differences between any military regime and modern scientific man-
agement.
In industry the assumption is quite to the contrary. The competent manu-
facturer knows that the vicissitudes normally surrounding the execution of even
the simplest production program are such that if no safeguards are erected
some section of the program may not go through or may not go through on time,
thus jeopardizing perhaps the larger plan on which it may be a key part. And
so in manufacturing we have many varieties of what is known as follow-up —
8046 WASHINGTON HEARINGS
some of them intricate and involved— but all tending to let us know the
status of the plans being executed and to reveal at the earliest possible moment
any likelihood of failure, so that the situation may be rectified.
The attitudes which I have just described are largely responsible, first, for
the fact that defense orders were awarded en bloc to the comparatively few
companies which had had experience in munitions production during times of
peace, and with which the procurement agencies had been accustomed to work ;
and, second, for the appalling fact that once having placed the stupendous
orders which Congress had authorized in many instances no adequate measures
were taken to see that the work was actually done — and within the time limits
required by the national emergency.
In my contacts with procurement officers I find that too often there is no
real understanding of what farming out should mean. There is no clear
recognition of the difference between normal peacetime subcontracting, that is,
the purchase of materials or services which under normal manufacturing
procedures would be obtained in much the same manner, and the emergency
variety of subcontracting known as farming out in this country and as bits and
pieces in England.
SUBCONTRACTING PRACTICES
In ordinary times there are many parts which every manufacturer finds it
expedient and perhaps essential to buy from others : Bolts, nuts, springs,
electric motors, and also parts designed for a particular product but most
satisfactorily produced by siwcialists in a given line. The manufacturer of
freight cars buys his brake shoes ; the manufacturer of refrigerators his gadgets.
The ball bearings for all General Motors cars are made by the New Departure
Division of this same corporation at Bristol, Conn.
Since such purchasing of parts from supplying companies is good practice
in normal times, it should, of course, be carried on also in connection with
munitions production. But farming out called for by emergency conditions
must go much further than this. What is needed now is that each manu-
facturer capable of doing the basic work on a product increase his output by
having done for him outside of his plant as much as possible of the work
which he would like to do himself, but which he is not prepared to handle in
the volume and within the time limits required by the emergency. An increase
in home plant size or capacity, besides calling for heavy capital expenditures,
means delay. Farming out can bring much quicker results.
The late James Reed, Jr., president of Cramp's Shipyard, announced before
his death a policy of not making anything in the shipyard which could be
fabricated outside, on the theory that the larger the amount of work done out-
side, the greater would be the tonnage of ships completed in the yard.
Another illustration of how farming out may be used to multiply basic
munitions capacity is afforded by aircraft manufacture. In normal times a
typical maker of aviation engines would buy his crankshafts already forged
by some firm, as Wyman Gordon Co. of Worcester, Mass., which specializes in
the production of such forgings, but he would do the machining, grinding, and
finishing of the crankshafts in his own plant. Because it has been the usual
practice right along, the purchase outside of crankshaft forgings, even in the
greatly augmented volume called for by the defense program, should not be
regarded as constituting any real extension of farming out. It was, however,
a true application of farming out when United Aircraft Corporation subcon-
tracted the finishing of crankshafts to Leland-Gifford Co. of Worcester. As
a further example, machine tool output could be vastly increased if more
companies would follow the example set by some of having other companies
machine or otherwise fabricate many of the parts which they normally make
themselves.
If farming out is to be practiced widely enough to affect the defense program
in any vital way it must be supported wholeheartedly in all the procurement
activities of the Army, Navy, Maritime Commission, and the Machine Tool
Section of the Office of Production Management. Where farming out has already
been used, it has been due largely to the energy and/or acumen of individual
prime contractors. It has not resulted from any appreciable influence or
pressure on the part of agencies of government. And yet the gap between
our defense plan (sixty-six billions) and our defense performance (as measured
in terms of cash paid out) is widening all the whUe. This is not so much
because of our failure to produce as because our ideas of what should be done
are constantly and rapidly expanding.
NATIONAL DEFENSE MIGRATION 8047
In building volume in the flow of munitions, shipping, and even goods for
citizen use, we must recognize two distinct liiuds of activity :
(a) Procurement proper, with unremitting pressure for increased output and
advanced delivery dates ; and
(6) The concurrent improvement and amplification of manufacturing facilities.
SHOULD CHANGE ATTITUDE TOWARD PEIME CONTEACTOE
At the moment seemingly the most telling step as to production is that we
should change our attitude toward the prime contractor. In getting defense
worli done we are too prime contractor conscious. When Mr. Hitler wants
something done he insists on getting help from whoever can give it, whether
prime contractor, subcontractor, or subsubcontractor. In fact, he issues instruc-
tions directly to foremen and subordinates.
With us, deference to prime contractors is an obsession, generated partly
no doubt by legal considerations respecting responsibility, and partly by fear
on the part of supply agencies that "interference" might detract from the
performance of the product, with reluctance to assume the responsibilities
inherent in the situation. In our desire not to relieve the prime contractor of
any responsibility under his contract we fall into the error (1) of assuming
that there is a limit to what we have the right to know as to the progress on
tlie worli entrusted to him; and (2) of failing to observe our obligation to
keep continued pressure on a great many contractors to do better than what
they claim to be their best. Further, we must follow the details of manu-
facturing progress so as to be reasonably certain of assemblies and sub-
assemblies on their respective "must" dates. Where the prime contractor does
not maintain tlie appropriate controls and records to provide this information
within the plant they should be installed.
We must know, we must learn to know, the progress being made currently
by the prime contractor and by each of his subcontractors and by eacli of his
sub-subcontractors to the end of the story. It is knowledge as to the progress
being made on ultimate components — small tliough some of them may be — that
will be of the greatest assistance in putting farming out into practice. Where,
as in the case of most items of materiel, the ultimate product is complicated
and consists of a large number of pieces, an adequate follow-up means keeping
track not only of each element which enters into the product but of each of
its constituent parts. A single part missing may mean the uselessness of all
the rest. "In 1918, 2,000,000 shells were ready to ship, but were not shipped
because they lacked adapters and boosters."
We are not there yet, but we will rapidly get to the point where our
attitude will be that expressed in an order of the Emergency Fleet Corporation
in April 1918, "It is becoming increasingly apparent that Emergency Fleet
Corporation cannot continue to be observers of the operations within the yards.
We must do more than audit and inspect. We must encourage and help and,
where conditions warrant, assume a necessary control — not only assume a
measure of control but act on it."
IMPORTANCE OF "FOLLOW-UP" PROCEDUKES
Now having recognized our right to know the day-to-day status of work on
every part of the defense program, we must record currently, with the details
coming up from the field, the progress being made on every part of the program,
graphically and/or statistically and by one common method planned from the
top. This follow-up work should be carried on through the various branch
procurement agencies. Unless the form of this progress reporting is outlined
by those pretty near the top in the scale of authority, it will never have the
uniformity which will make possible reports intelligible and useful to top
executives. In any plans adopted, of course, the many excellent devices now
In use in certain of the district offices will naturally be incorporated.
In applying pressures aimed at increasing output, advancing delivery dates,
and — above all — getting out those jobs which would otherwise hold up other
parts of the program, it is essential that the procurement authorities be repre-
sented by men of experience and judgment who will know on which contractors
and on what aspects of the work pressure should be put. Only men with spe-
cialized experience and training can get the best response from industry.
Ifc would be fatal for the Office of Production Management to attempt to
relieve the Army and Navy of their proper managerial responsibility for follow-
up. In fact, one of the most important services the Office of Production Man-
804:8 WASHINGTON HEARINGS
agement can render is in encouraging the Army and Navy to execute for
the benefit of all, this function which is inherently theirs to perform.
Now a word as to tlie improvement and increase of facilities aspect of our
national production problem. On the assumption that there is and will con-
tinue to be more work thau can be done, we need to utilize not only the facilities
of plants that are organized to assume full responsibility in manufacturing for
the Government, but we should pool other facilities in such a manner that a
parent plant not only can keep itself busy but can keep busy a number of
satellite plants which without coordination and pooling would be unable to
function. Further, we are finding out, for instance, in York, Pa., that the effec-
tiveness of pools can be constantly improved by community organization. A York
community committee canvassed the department stores and other commercial
establishments to find out which of their employees had formerly worked at a
trade or had specialized competence that could be used in the manufacturing
community as two and three shifts become increasingly necessary.
Pools do not follow any set pattern. In Connecticut a State-wide and in-
dustry-wide pool of clock makers have for a year or more been working on
the development of a large-scale plan for manufacturing for time fuzes, first
on their own and later in cooperation with the War Department. In Canada
the paper and pulp industry is utilizing its maintenance shops on war work.
These shops in normal times are operated to maintain machines and equipment
at the mills. However, this only requires about 48 hours a week — leaving
machine tools free for other work for some 96 hours in a 6-day week. A special
committee of the Canadian Pulp & Paper Association known as the Wartime
Machine Shop Board was formed to coordinate the different mills' shops and
allocate orders where possible. Working through the board, several primary
producers have been able to let subcontracts, on certain portions of their orders,
to the pulp and paper machine shops, thereby speeding completion of the job
and easing the strain on their own plants.
Again in Australia a group of some 50 automobile repair shops, both large
and small, have banded together, under the general control of the Victorian
Automobile Chamber of Commerce and the special direction of that one garage
among their number which was best qualified, and undertaken to manufacture
parts for Bren guns and other tools and munitions. Within 7 weeks after the
first Government contract had been awarded, thousands of finished parts had
been turned out, with rejections averaging less than 1 percent. Not only
metropolitan garages, but those in widely scattered towns are included in the
group. According to a visiting Australian industrialist, that country, having
had its imports of machine tools largely cut off, is pressing all its available
machine tools into 24-hour day service, using them where they are through
farming-out procedures where possible, otherwise commandeering them. So
many things which seem impossible until pressure comes can be carried out 100
percent in the light of new necessity.
Exhibit A describes the workings of one of the 12 regional boards which
have been organized to make effective the "bits and pieces" movement in Eng-
land— as well as aid Britain's defense efforts in other ways. Exhibit B
is a chart of the organization of the board. Exhibit C shows a form used
in clearing centers to obtain data on spare machine tool capacity. It will be
observed that under the 1 regional board 10 clearing centers have been set up.
Although at the time this description was written these centers had been
functioning only 8 months, they had already been able, on the one hand, to
help many firms find work suited to their facilities — especially smaller firms
who would not otherwise have been able to deal with a whole job — and on the
other to be useful in meeting the requirements of contractors having work to
be done, but not the facilities to do it. In fact, recent reports show that these
centers have now brought the record of requirements met up to 85 percent
of requests, having started with not much more than 15 percent.
GKRMAN FAEMING-OUT METHODS
The research staff of the New School for Social Research, Dr. Alvin John-
son, director, has with the aid of German scholars recently completed a study
of the Farming Out of Defense Work ; German Methods and Experiences.^ This
I'eport states that Germany very early subcontr.-icted government work to co-
operative groups of craftsmen. Subcontracting within industry proper, that
is by prime contractors to smaller firms, was looked upon with disfavor in
Germany until 1938. This was partly because the Nazi philosophy could not
1 See p. S0.5G.
NATIONAL DEFENSE MIGRATION 8049
countenance middlemen making a profit on work done by others ; and partly
because the original German plan of economic mobilization contemplated
shutting down a large proportion of the small firms, and concentrating arma-
ment production in the most eflicient plants. Beginning in 1088, however, this
policy was reversed, and since then the Government has encouraged and pro-
moted subcontracting. While the bulk of the huge output of tanks, guns,
planes, etc., has been supplied by large-scale industry, to some extent with the
aid of labor and equipment taken from small industry, all the indications are
that there has been a considerable increase in subcontracting during the last
2 years. Subcontracting is arranged both privately and through government
agencies, which latter include order exchanges, called bourses.
Local, State, and regional production organizations are coming into being all
over this country in answer to needs gradually being recognized. These follow
in a measure patterns which have been functioning in Great Britain for some
time. These agencies must be regularized and articulated so as to give to pro-
curement and production the maximum of assistance. In every seat or potential
seat of defense industry there should be developed clearing centers such as have
been set up in England and in certain places in the United States, as in Providence,
R. I., through which firms having incompletely utilized machine tools or other
key equipment can currently make this fact known, and other companies having
work to be done can easily learn where and when capacity is available.
"faeming-otjt" of antiairceaft gun pabts
An excellent illustration of how much even of the most complicated defense
mechanism can be farmed out is afforded by the manufacture of the Oerlikon
antiaircraft gun as cai'ried on by an organization operating from Providence.
The Swiss citizen who had had experience in making this gun and desired to .''et
up its manufacture in this country at first sought to find a suitable factory which
could be equipped to do the entire fabrication of the gun. He was told, however,
that owing to the great shortage of machine tools and skilled labor it might be
months before he would be in a position even to start tooling. At the
suggestion, therefore, of the Rhode Island Industrial Commission, photostats
and blueprints were made of the various parts and subassemblies and submitted
to manufacturers who were thus enabled to make intelligent bids. Without
going into all the detailed steps taken the final result was that instead of con-
structing or acquiring a factory, only an engineering and procurement office was
set up and the actual manufacturing operations were entrusted to some eight
major subcontractors.
One of these, a manufacturer of textile-finishing machinery, works exclusively
on the gunmount. Although itself a subcontractor, this company in turn has
some 10 to 15 sub-subcontractors, firms which do anything from large casting work
to the production of small bushings and bearings. Of the sub-subcontractors, one
operates an iron and brass works, others normally make gears, and others manu-
facture printing presses and other machinery. Another major subcontractor,
whose normal business is the making of clothes-pressing machines, works on
sights, a type of production completely foreign to anything this firm had ever
done. Yet the Swiss engineer overseeing the operations stated that the production
of this company, which was extremely rapid, equaled in quality anytliing turned
out by the original factory in Switzerland. The tool and gage work for this
subcontractor was sub-subcontracted to a small company which had been organ-
ized for the purpose of developing and making machinery for the production of
electrical connectors. Other sub-subcontractors include a great rubber company
which produces the eye piece, and a watch company, a cotton-gin company and a
tool company which supply screw-machine parts.
Another major subcontractor, which has, however, no sub-subcontractors, manu-
factures subassemblies, which include the hammer plate, the breech block, the
breech bolt, the ejector, the stop plates, and the stop double loading. Similarly
another company fabricates miscellaneous parts going into the breach mechanism,
including the buffer, the side bars, and the trigger mechanism: while another
manufactures the breech case and the hand grips, and, aided by numerous
sub-subcontractors, does a large amount of tooling and gage work.
While many of the firms which have united their efforts to produce this gun
are located in Rhode Island, much of the work is also done in other States,
including firms in Connecticut, Massachusetts, New York, New Jersey,
Pennsylvania, and Maine.
3050 WASHINGTON HEARINGS
SUBCONTEACTENG A TWO-WAY PROCESS
In all projects for spreading defense work it is highly important to realize,
however, that subcontracting is a two-way process. There is no use in or-
ganizing companies and communities to receive orders unless there is a parallel
progress in making orders available. A serious failure of either end to keep
pace with the other spells disillusionment.
As to the betterment of facilities at present in use and beneficial changes
which could be made in plants about to be pooled, a book could be written.
There should be set up in the Office of the Under Secretary of War, somewhere
in the Navy Department, and in the Machine Tool Section of the Office of
Production Management, management-engineering sections whose business it
would be to look out over the field and help to raise in a thousand ways the
efficiency not only of plant organizations but of individual machines as welL
The recent tendency of the War Department to install management engineers
in its district offices should be encouraged.
It is the universal testimony of management engineers that many machines
now considered as nonusable on defense work can be made to function at an
expense which is a fractional part of acquiring new ones. There are munitions
plants that are now satisfactorily turning out work largely on reconditioned
machines. Normally a machine tool fails because of wear and tear on a few
parts. It is much quicker as well as cheaper to recondition those parts than
to build and install a new machine. Those responsible for priority ratings on
requests for new machine tools must canvass this opi)ortunity for reconditioning
old tools just as the possibility of increasing capacity through pooling and
subcontracting should be explored before new plants are authorized. One of
the most promising functions of these suggested management engineering sec-
tions would be to assess plant capacities in key industries. Too frequently the
output of plants is gauged by a too casual estimate of their possibilities. Some-
times these estimates are such as will least disturb normal business. In this
way some plants are rated high simply because they deliver what their pro-
prietors have promised but without realizing their full potentialities.
When it comes to practical measures for spreading defense work to all indus-
try, one of the most important keys to production is to be found in "exploding"
a given product. This is an English term by which is meant so breaking up
an item of materiel — a tank for instance — into its constituent assemblies and
parts as to make clear to everyone properly at interest the character of the
manufacturing involved. We are apt to consider a tank as just a tank and
an airplane as just an airplane and let it go at that. As long as we think no
further, this means that only sizable concerns can bid and it is hard to see
liow and where small concerns can have any part. "Exploding" visualizes the
'details of the work to be done, and prepares the way both for the separate
construction of sizable sections of a product, and for the farming out of each
separable operation where this makes possible the employment of capacity
which could not otherwise be utilized. Tanks are now being manufactured,
for example, consisting of some 30,000 parts, over 5,000 being different. A large
proportion of these parts can, of course, be farmed out.
If the policy of farming out is to mean much in an emergency as challenging
as that which now confronts the Nation a considerable reservoir of idle, or
partially utilized, industrial capacity is presupposed. There are no statistics
by which one can determine with any exactitude just what percentage of out
total capacity is now being utilized, but after consulting a good many different
people in a position to have an opinion I have adopted 40 percent as my best
guess. Raise or lower this percentage as you like and you still have a stupen-
dous volume of capacity yet to be put to work. And this capacity is immediately
available without waiting for either new buildings or new machine tools.
But putting idle machines to work will not in itself guarantee useful imple-
ments of war. There must be intelligent planning on the part of the procure-
ment agencies. Each item of materiel and each of its constituent components
must be placed on a production schedule showing when its manufacture is to be-
gin and when it is to be finished. To make such schedules mean anything the
follow-up must be such as to discover actual or threatened failures at the first
possible moment.
RESPONSIBILITY FOR PRODUCTION
To comjilete my testimony I wish to make just two further points. First, it
is important that we recognize the fact that, under our present set-up, the pro-
curement agencies of the Army, Navy, and Maritime Commission have the primary
NATIONAL DEFENSE MIGRATION 8051
responsibility for production. Office of Production Management agencies are
equipped to assist in various ways. Sometimes under Executive orders such
as tliat providing for tiie recently set up Division of Contract Distribution in
Office of Production Management, coordinate autliority is provided for. But
even in these cases, the initiating moves are fully within the province of the
procurement agencies.
It is the procurement agencies then which in the first instance establish and are
responsible for the relationship between the Government and its suppliers. It is
well to recognize that these relationships are subject to constant change as the
gravity of our situation gradually becomes recognized. When purchasing on a
large scale began, our procurement agencies, after signing the contract for a
given item, were loathe to interfere in any way with the methods of manufac-
ture— not even to the extent of making suggestions — for fear of relieving the
supplier of his responsibility under the contract. Generally speaking, the same
attitude is pretty general today.
One notes that in England and even in Canada this attitude has been largely
abandoned. Whenever it appears that production can be increased by a given
supplier adopting a given course of action there is no hesitation upon the part of
the procurement agency to outline in considerable detail not only what is to be
done but even how it is to be done. When the Nation is in peril the niceties of
ordinary purchasing can be ignored. The public interest must prevail over the
rules which customarily control relations between buyer and seller.
I want to emphasize the fact that in a serious situation such as now con--
fronts the American people just what constitutes cricket is largely determined by
one's idea as to how grave the situation is. It has been the common experience-
both in this country and in England that at the start two or more concerns manu-
facturing the same item of material frequently refuse to exchange Information
and even to sit in the same room to discuss common problems. The attitudes
born of our competitive system seem to carry over 100 percent. Gradually under
proper leadership such concerns can be led to exchange experiences and jointly
work for the solution of common difficulties.
As one conjures up the stress under which we may be operating a few months
hence the pressure for this type of cooperation between suppliers will be in-
creased. As a matter of fact in the manufacture of M3 tanks one can detect al-
ready several successive advances in cooperation. It is my judgment that we will
not be doing our utmost on this important tank program until the half-dozen
principal suppliers set up some intercompany organization to unify practices and
act for the group in many matters such as purchasing and subcontracting where
common policies will facilitate output. In connection with the $12,000,000 con-
tract recently awarded the washing machine industry — under which three con-
cerns are to subcontract to 32 widely separated plants— it will certainly be nec-
essary to have some central directing organization. There are doubtless other
lines where organizational cooperation along comparable lines would facilitate
maximum output.
Finally, may I suggest that one weakness in our defense organization which has
been apparent for some months is the failure adequately to utilize the services of
industrial and production engineers. I know of no agency of the Government-
military or civil — where men of this type are in demand.
WAB BEING FOUGHT IN WOEKSHOPS OF WORLD
War today is fought in the workshops of the world — especially in metal-working
plants — quite as much as on the fighting fronts. Recognizing'this situation, the
Roster of Scientific and Specialized Personnel, an agency organized by the Na-
tional Resources Board and the Civil Service Commission and attached to the
Office of the President, has built up a list of nearly 200 industrial and production
engineers — about 70 of whom are distinctly grade A and the balance all highly
recommended. This list was completed early in March. In the following 3
months just one inquiry as to the names on this list was received by the roster,
with no record of any appointments. I have not inquired recently, but I think I
would know it if there had been any material change in the situation.
The engineers on this list were located and their records secured with the
assistance of the American Society of Mechanical Engineers, the Association of
Consulting Management Engineers, the Society for the Advancement of Manage-
ment, and other highly esteemed agencies.
In World War No. 1, especially in the Ordnance Department under Generals
Crozier, Wheeler, and Williams — successive Chiefs of Ordnance — the country
was scoured for technical skills of this kind.
8052 WASHINGTON HEARINGS
The layman is so conversant with differences in training, experience, and tech-
nical competence as between individuals within the same profession — as for
instance among doctors — that it should not be necessary to point out that two
engineers are more apt to have different aptitudes and experience than the same.
There are literally hundreds of specialties practiced by the group known generally
as engineers. If we are going to spread defense work geographically and to the
smaller plants, or even if the larger plants are to be made more effective, it wiU
be because the several branches of tlie Government directing defense work bring
into the picture those types of engineers who are intimately acquainted with the
mechanisms of production control, with machine shops, machine tools, and the
processes under which materials are fabricated, and who because of their
specialized knowledge can give unity of spirit and direction to the whole defense
effort. Every time we order a new machine tool that is not absolutely needed we
complicate our problem. Every time we learn how to use an idle tool, whether
through its reconditioning or through organization of pools, it is a clear pick-up.
Farming out has its problems, and yet in the light of the current situation it is
after all a relatively simple task. Only standard engineering practices are
involved. Nothing that is entirely new has to be thought out. Doubtless there
are some legal restrictions wliich could profitably be modified. But they can
hardly be advanced as a general bar to the program. Nor are there any doubts
as to the desirability of farming out. When it comes to theories governing price
control and priorities there is plenty of opportunity for differences in opinion.
It is by no means all clear sailing. But when it comes to utilizing idle manu-
facturing capacity, counteracting priorities and unemployment, and salvaging
:sniall-businGss enterprises through a policy of farming out the social advantages
are obvious.
Our direct goal in all this planning, of course, is to unify and put to use the
tool power of the Nation. But in achieving this objective by the methods sug-
gested, we would put our whole back-of-the-line effort on a democratic basis.
We should so plan the structure of contracting and subcontracting that in the
smallest shop and in the smallest village — and if the need comes in our homes —
every lover of liberty can find his station and feel himself or herself a part of a
noble enterprise — one essential unit of an unconquerable people.
Exhibit A. — Memorandum on thk Work of the London and Soidtheastebn
Regional Board
eepoet by london and southeastern regional board, london, england,
JULY 24, 1041
The London and South Eastern Regional Board is one of twelve in the country.
The Board consists of eight official members and seven nonofficial members. The
former are the Area Officers of the three Supply Departments — the Admiralty,
the Ministry of Aircraft Production, and the Ministry of Supply — and repre-
sentatives of the Board of Trade, Ministry of Labour and National Service and
Ministry of Transport; the Emergency Repairs Department of the Ministry of
Works and Buildings, and the Raw Materials Department. The nonofficial mem-
bers consist of three representatives of employers and three of workpeople, from
whom the Chairman and Deputy Chairman of the Board are chosen ; if the
Chairman is a representative of employers, the Deputy Chairman is a represent-
ative of workpeople, and vice versa. The seventh nonofficial member is the
Chairman of the Regional Machine Tool Control Committee.
This combination of oflBcial and nonofl3cial members was designed to provide a
link between the organs of government and managements and labour who have
to carry on the actual work of production in the factories. It has been pointed
out that effective policy must in considerable measure be regional in character.
Government policy is bound to affect deeply the normal lives of individuals and
the cherished traditions and rights of managements and Trade Unions. Whilst
the central authority can lay down the general principles and assist through its
central machinery in carrying out policy, conditions vary so much in different
parts of the country that it is essential to make full use of local knowledge and
adjust policy to local circumstances.
In practice, the combination of official and nonofficial members has made for
stimulation of ideas, and there has been a constant flow upwards of constructive
proposals. On many occasions valuable information as to local conditions has
NATIONAL DEFENSE MIGRATION 8053
been gathered and forwarded to the appropriate authorities. There has resulted
a greater awareness on the part of Government Departments of the real state of
affairs obtaining in industry and of criticisms and discontents which exist.
The Regional Board has been very useful in another respect. The representa-
tives of the Government Departments concerned wlio have acted as members of
tlie Board have developed a very real esprit de corps and unity of outlook. They
have regularly sat round the same table and as a result of these friendly con-
tacts, effective cooperation betvreen their Departments has increased. Efficient
coordination of the work of Government Departments is possible only when there
is close contact at various levels of the administration, and not merely at the
top. The Area Officers have functioned on a number of informal subcommittees
which, but for their membership of the same Board, would probably never have
come into existence. As a result, the Supply Departments have frequently helped
one another by agreeing to the transfer of labour or manufacturing capacity
when this was urgently necessary. The need for close cooperation between the
Supply Departments is all the greater when it is remembered that a large pro-
portion of the firms in the country are working for more than one Department.
The Area Officers, who are the local representatives of their Departments, are in
a position to arrange joint action in the case of individual contractors when this
is desirable.
The primary function of the Board is to assist in harnessing industrial ca-
pacity to the war effort to the maximum possible extent. On the other hand,
firms already largely engaged in war production periodically have some of their
machine tools idle, due for example to changes of design, temporary shortages
of materials, or bottlenecks in the production process. On the other hand,
many firms have to be switched over from peace to war production. The
attempt by the Board to utilise spare machine-tool capacity from its Head-
quarters was not successful. Quite apart from the large number of general
engineering firms in the Board's Area, there were thousands of nonengineering
firms whose capacity could in some measure be used for the war effort and who
in many cases had useful machine tools available, e. g. for maintenance work.
It was not possible to maintain the contact with these firms which was essential
if ui=e was to be made of their capacity.
The Board therefore decided upon a measure of decentralization and "broke
down" the problems by setting up ten Clearing Centres (as they are called) in
its Area. Each Centi-e is in charge of an officer with engineering experience,
under the administrative control of the Board Secretariat. Attached to each
Centre there is a District Advisory Committee consisting of representatives of
employers and workpeople. The Conmiittee's function is to mobilise the goodwill
of local industry, to make its knowledge of local conditions available to the
Board, and to forward constructive suggestions in relation to the prodtiction
problem.
At the Centres there has been collected detailed information about the firms in
the district, e. g., machine tool census returns, labour returns, labour inspec-
tors' reports, information abotit Government Contracts, etc. Intimate contact
between local firms and the Centre is encouraged as much as possible. The
activities of the Centres may be conveniently summarized under the following
heads :
(1) CLEARING CENTRES AS CAPACITY EXCHANGES
The aim is to "marry" machine tool spare capacity and overloads. The
Machine Tool Census, whilst containing a wealth of valuable information, con-
stitutes a static record of machine tool capacity, whereas spare capacity is
a constantly changing factor. Firms are therefore encouraged to contact their
Clearing Centre whenever they have spare capacity or are experiencing over-
loads. The Centre works on analogous lines to an Employment Exchange,
which links up workmen seeking employment and employers requiring labour.
A considerable volume of contracts has been placed through the Centres, thus
utilising spare capacity which probably would have remained idle otherwise.
Two points of interest may be noted. The monetary value of a contract placed
through a Centre is not an accurate index of its usefulness, as a serious
bottleneck in production may be relieved by finding a few spare hours on an
urgently needed machine. It has also been found by experience that large
and powerful firms whose order books are full to overflowing frequently have
substantial short-term machine tool capacity available, for reasons mentioned
above, which can be utilised through the Centres.
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§Q55 WASHINGTON HEARINGS
(2) ASSISTANCE TO NONENGINEEEING FIRMS
To achieve a "total-war" effort it is essential to mobilise the maximum number
of firms for war production. Very many fii'ms whose peacetime production is
disappearing are anxious to be so mobilised. In an effort to get war work
they "badger" innumerable Government Departments, involving a considerable
expenditure of administrative time, often with little result. The firms need
guidance on how to switch over to war production and how to adapt their
plant. This guidance cannot be given effectively by an overworked central
administrative machine. Personal contact with a firm and an intimate knowl
edge of its personnel and equipment are necessary if quick and effective advice
is to be given. It should be stressed that many nonengineering firms have
useful machine tools, and that many firms with no such machines can make
their contribution to the war effort.
The Centres set up by the Board have only been functioning for some eight
months, i. e., they came on the scene at a fairly late stage in the rearmament
programme, but they have been able to help many firms, especially the smaller
firms who are not fully equipped to deal with the whole job by finding them
capacity to suit their requirements.
(3) cle:aring centres as information bureaux
One of the important functions of the Clearing Centres has been to serve
as Information Bureaux. Government Departments receive inniunerable en-
quiries which should properly be addressed elsewhere. Firms in difficulties,
whether it be in connection with obtaining contracts, labour, or materials,
seek to solve their problems by making application through an extraordinary
diversity of channels. Quite recently, for example, there was forwarded to
the Board from the Prime Minister's office, from the Ministry of Labour and
the Ministry of Supply, correspondence with one firm relating to the same
matter. Firms do not know which section of Government Machinery deals
with their particular problem. The Clearing Centres liave directed very many
firms to the right Directorate or Control, with great saving of time and con-
venience to all concerned.
(4) COOPERATION BETWEEN CLEARING CENTRES AND G0\'ERNMENT DEPARTMENTS
Government Departments are beginning to appreciate the value of the
Clearing Centre organization in increasing measure. The Ministry of Labour
and National Service has already attached an Officer to each Clearing Centre,
who is able to make use of the intimate knowledge of local conditions pos-
sessed by the District Advisory Committees and the Officers in charge of
the Centres. This is a most interesting development. The Board itself is a
regional organisation and it has further decentralised by setting up the Cen-
tres. Similarly the Ministry of Labour is "breaking up" its problems more
and more, and at the end of the chain of decentralisation we find the Officers
of the Board and the Ministry of Labour working intimately together at the
Centres, so mucli so, that they use the same set of files.
The information collected at the Centres is of great value. Numerous
Production Directorates of the Supply Departments each have their officers
in tlie field searching for capacity. Some overlapping must result, and in-
dividual firms may be visited by a series of officers each seeking capacity
suitable for his particular Directorate, but not very interested in other capacity
which the firm may have. To an increasing extent the various Production
and Progress Officers of the Supply Departments are contacting the Centres
where detailed and up-to-date information about firms' spare capacity, backed
by personal knowledge of the firm, is readily available.
In short, the Centres constitute valuable decentralised administrative ma-
chinery, serving as a link between Government and industry, commanding
through the District Advisory Committees attached to them, the good will of
employers and workpeople alike.
The Regional Board has been active in other fields. It has helped to intro-
duce the "spotter system" in the London area, whereby neighbouring firms
group themselves under local controls, so that the "alarm within the alert"
signal can be given when there is imminent danger of enemy air attack.
NATIONAL DEFENSE MIGRATION 8057
TE AN SPORT
The Board deals with any problem which it considers may affect production.
For example, the transport of the workers. Transport is an essential adjunct
to iiidustry and they must be brought into step with each other if due con-
sideration is to be given to the welfare of the workpeople. With the move-
ment of many hundreds of thousands of workers to the districts where factories
are located, new problems of transportation arose, and had to be considered
more closely. It was felt that the unnecessary delays which the workers were
experiencing in getting from their homes to the factories and vice versa were
tiring them and resulting in a loss of energy with its consequent effect upon
production. The Board invited the London Transport authorities to discuss
this problem with them, with the result that all the necessary steps were taken
to meet this very serious transport problem. The difRculties experienced in
meeting emergency conditions have been overcome, with the good will and
determination of all interested parties, with the view of making the National
effort as effective as possible.
To meet changing conditions, the Board has organised the principal London
firms in 32 Local Transport Groups, which will serve as a link between industry
and the transport undertakings. The Groups will give advance information on
changes of shift hours so that adequate transport services can be planned, and
will endeavour to arrange the staggering of shift hours so as to minimise traffic
loads at peak periods.
The broad result of the above analysis appears to be this. At a time when
the national life and industrial activity are increasingly coming under Gov-
ernment control or direction, a very large expansion of administrative ma-
chinery is inevitable. For rapid and effective action a high degree of
decentralization is essential. Further, when industry is engaged in the ex-
tremely complex and difficult process of switching over from peace to war pro-
duction, when masses of regulations and new controls, limitations, and
restrictions of normal industrial activity are constantly being imposed, firms
need information and guidance. It is desirable that they should be able to
apply for this to a local office, where a "living" personal contact can be made
with oflScers, with intimate knowledge of local conditions, rather than they
should adopt the inevitably slower process of written communication with the
headquarters of some remote Government department. This living contact
is of very great importance ; it makes for mutual understanding between Gov-
ernment and industry and enables knowledge of administrative policy to be
spread quickly and smoothly. It can often overcome the attitude of hostility
toward bureaucracy which some industrialists ai'e inclined to adopt.
The Clearing Centres set up by the Board are doing a very useful job of
work, and their extension to the whole of the United Kingdom has now been
approved by the Production Executive of the War Cabinet.
Exhibit C— Form Used by English Clearing Centers To Obtain Data on Spake
Machine Tool Capacity
LONDON and SOUTHEIASTEEN AREA BOARD
To Clearing Centesi:
,_ C. C. Serial No.
' Date received in C. C.
Firm's Serial No. (if any)
Spare Machine Tool Capacity
Name of Firm Phone No.
Address ^ Firm's Executive
Machine description
and work dimensions
^ Give the name of the executive able to handle this matter.
8058 WASHINGTON HEARINGS
Spare Machine Tool Capacity — Continued
Subsidiary equipment
available for above Machine Code No.
Grade of work possible
with above:
" 1. Max. machined dimension plus or minus .0015",
'2. Max. machined dimension plus or minus .005".
'3. Max. machined dimension plus or minus Vca"-
*4. Wider limits — give details
Material workable :
■ 1. Nonferrous.
' 2. Light Alloy.
' 3. High Tensile Steels.
We could provide
tooling :
*1. Cams and Jigs.
' 2. Press Tools.
*3. Gauges.
•4. Cutters.
*5. Other Items:
Spare machine hours available per week
No. of weeks available
Remarks :
(Signed)
(Date) -
'Delete items which do not apply.
(The following letter and article were received subsequent to the
hearing and, in accordance with instructions from the chairman, were
included in the record.)
NOVEMBEE 5, 1941.
Hon. John H. Tolan,
Chairman, House Committee Investigating Defense Migration,
Washington, D. C.
Mt Dear Mr. Tolan : Herewith I send you a report on farming out of war con-
tracts in Germany and some other relative information, all as drafted by the
research staff of the New School for Social Research, 06 West Twelfth Street, New
York, N. Y., Alvin Johnson, director. Dr. Johnson advises us that the inquiry was
conducted under Dr. Herbert Block, the school's chief research worker in this field.
I have found this report very enlisihtening, and I am sure you will be interested
in it. There is no harm in its being listed in any publication designed to enlighten
our defense workers.
Yours very sincerely,
MoRKis L. Cooke.
Exhibit D. — "Farming Oui" of Defense Work : Gkrman Methods and
Experiences
prepaeicd by dr. herbert block for the new school, eor social research,
dr. alvin johnson, director
i. general sukvey
The first eonomic group to get subcontracts in National Socialist Germany were
the craftsmen. Tlie public authorities, who were fully occupied with the huge
rearmament program, were unable to negotiate individually with the many thou-
NATIONAL DEFENSE MIGRATION 8059
sands of workshop owners. It was therefore necessary to form organizations
which could accept the governmental order, distribute it among the craftsmen,
and control its execution.
Such organizations, called cooperative associations (Lieferungsgenossen-
schaften), had sprung up like mushrooms in the first World War, but with the
restoration of peace all but a few were dissolved. When, however, at the end of
1932 — prior to the creation of the Third Reich — a new tide of governmental con-
tracts was approaching, cooperative associations of tailors and shoemakers at
once emerged. Thus the Nazis had merely to be guided by precedence. They
founded some 200 associations of mechanics, joiners, saddlers, and other trades
in order to utilize their productive capacity for rearmament. A strict regulation
of the association prevented such waste of effort as prevailed in the war of 1914-18.
The available material, cautiously evaluated, leads to the conclusion that these
associations stood the test. The craftsmen, still under the influences of the great
depression, were eager to participate in public contracts, and did not mind
neglecting their private customers.
It was about 2 years after the Nazis came into power, that another type of
organization came into existence, the cooperative group (Arbeitsgemeinschaft).
The associations of the craftsmen formed groups of masons, carpenters, plumbers,
etc., and put them to work in the huge building operations of the Third Reich.
The owners with their employees and machines have been often transferred to
remote places, while the members of the cooperative associations are working in
the workshops. Although the latter are permanent organizations, the cooperative
groups are founded only for the duration of a specific construction contract.
In addition, single workshops or groups of them have been placed with labor
and machinery into large factories. Fewer persons may have been involved in
this interesting type of organization than in the others, but the transformation
of artisans into industrial workers is significant for the fate of craftsmanship
in Nazi Germany. Hundreds of thousands of workshops have been closed
down in recent years, and the craftsmen and their employees have beeen absorbed
into the factories.
In the industrial field there is, as a rule, no need for new organizations to act
as special centers for subcontracting, for each comparatively large enterprise is
able to fulfill this task. Above all, subcontracting itself proved unnecessary so
long as industrial capacity was not fully utilized or unemployed labor not fully
absorbed. Therefore, up to 19.38 the Government itself decided by the issue of
its contracts who should benefit from its orders, and did not allow a concern to
pass part of its governmental contract to other firms beyond the customary
division of labor.
At the beginning of 1938 the situation took a different turn. Industry was
fully employed and the businessmen no longer endeavored to obtain orders. The
governmental departments had increasing difficulties in placing their orders and
in getting the material in time. Since then they have encouraged and promoted
subcontracting.
It is not easy to assess the results of the German exi)erience in subcontracting.
Certain general difficulties are obvious. The subcontracting firms are, as a rule,
small and less efficient in technique and organization. Defects of the product and
delays in delivery are bound to cause friction. Subcontracting raises the level
of prime costs, and can be justified economically only because it saves the
supplementary costs which would be involved in any expansion of industrial
capacity. No statistical data have been published which would allow us to
estimate the actual range of subcontracting. That it must have increased
considerably during the last 2 years, especially in the metal industries, is indi-
cated by the Government's having found it necessary to regulate by a special
decree price fixing in subcontracting. The fact that small firms in the war-
supplies industries seem to be fully employed also points in this direction.
It is interesting to note that the method of subcontracting is not in accord with
the original German plan of economic mobilization, which intended to shut down
a large part of the small firms and to concentrate armament production in the
most efficient plants. The peculiar course of the present war — short of blitzkrieg
followed by long months of relative military inactivity and the growing dangers
of air attacks — favored the spreading out of orders. But, at the same time, the
importance of this decentralization of production must not be overestimated.
The huge output of tanks, guns, planes, etc., has been supplied by large-scale
industry, which is constantly being expanded by the transfer of men and equip-
ment from small firms. The tendency toward industrial concentration seems to
be growing, especially in the consumer-goods industries.
gQQQ WASHINGTON HEARINGS
The success of subcontracting is largely due to far-reaching standardization
of the products and to an extensive training activity. The number of varied
types of military equipment, as well as machinery and consumer goods has been
drastically reduced. Thousands of instructors are at vpork all over the country
training whole armies of workers, craftsmen, and even farmers in the production
of war materials and in the use of substitutes.
The sources on which this report is based are referred to in appendix I.
Nowhere has the whole problem been treated systematically. The political and
economic press confines itself to discussing the question of formal organiza-
tion. Information concerning the actual working of the subcontracting busi-
ness had to be gathered from scattered references, primarily from technical
periodicals. The material covers the period up to the spring of 1941.
II. SPECIAL PROBLEMS OF SUBCONTRACTING IN INDUSTRY
A. How to find suitable suhcontractors. — Although defense orders were fai'med
out to craftsmen before large-scale industry took to subcontracting, the part
which industry plays today in the war efforts is much more significant. As
there is no compulsory subcontracting, a number of manufacturers have been
reluctant to practice it, mainly because of their responsibility for the deliveries
and because of the difficulties resulting from subcontracting. The press there-
fore has constantly stressed the importance of farming out and has exhorted
the entrepreneurs to adopt this method.
Concerns which are willing to deal with smaller factories have two ways
of accomplishing their purpose, a private way and an official one. The private
way is :
1. Private contracts through inquiries of firms which are known or recom-
mended, or which have answered or placed an advertisement. It goes with-
out saying that middlemen play a big part in making contacts between prime
contractors and potential subcontractors. These middlemen have obviously
charged exorbitant commissions. Friedrich Landfried, Secretary of State in
the Reich Ministry of Economic Affairs, spoke at the end of 1939 of "a para-
sitic crowd of middlemen putting commissions in their pockets without having
done any respon.sible work." On September 11, 1940, a decree was issued
which — repeating former ordinances — aimed at the elimination of all middle-
men whose activities were not justified from the point of view of the whole
economy, and which prohibited commissions unwarranted from the same point
of view. The press admitted "numerous unpleasant occurrences" but admitted
that the criterion "not justified from the point of view of the whole economy"
was rather vague.
2. Official agencies : Official intermediaries between prime contractors and
subcontractors are the disti'ict bureaus for the equal distribution of govern-
mental contract (Bezirksausgleichsstellen fiir offentliche Auftriige). They are
the regional organizations of the Reich board for the equal distribution of
governmental contracts which is a division of the Reich Ministry of Economic
Affairs. The army, the navy, the air force and the party never place a single
order without consulting or without at least informing the district bureaus
which keep a complete card register of all firms fit for governmental contracts.
These cards contain judgments of the party and the labor front on the political
reliability, the financial standing, and the taxes of the entrepreneur ; and
data on the personnel, the productive capacity, the exports, and the fluctuations
of output of the entrepreneur's plant.
Equipiied with such vast information, the district bureaus intervened in
behalf of the farming-out business, but their efforts seem not to be very suc-
cessful ; the biilk of subcontracting evidently is arranged privately. As the
liureaus have a survey only of their district and as they wanted to facilitate
the interregional distribution of orders, they created, conjointly with other
authorities — so-called order exchanges (Auftragsborsen) in western, south-
ern, and eastern Germany. The order exchange for eastern Germany (Ost-
deutsche Auftragsburse), Berlin, may serve as an example of how these insti-
tutions are working.
3. Berlin order exchange : The order exchange which was opened in September
1940, in the building of the Berlin stock exchange, had the task of finding out
subcontractors for the metal industries in the Berlin area. All the factories of
the capital and its surroundings have been fully occupied ; the district bureau
(Bozirksausgleichsstelle) therefore was unable to overcome the bottlenecks.
While the prime contractors admitted to the exchange have been Berlin manu-
NATIONAL DEFENSE MIGRATION §061
facturers of arms and similar war supplies, tbe subcontractors have been firms
of the metal-products industry in the east of the Reich.
The exchange covers a far-flung territory. German experiences taught that
the distance between the prime and the subcontractor should not exceed 250
kilometers, or 155 miles. A greater distance causes a waste of time and money
for the frequent visits which the prime contractor inevitably has to pay his
subcontractors ; it causes expensive freight charges ; and from the point of view
of the Government, it puts an unnecessary strain on the railroads, which are
already overburdened. The order exchange for eastern Germany includes con-
cerns located in Silesia, the Sudeten area, the so-called protectorate, the Provinces
of Poznan (Poland), of Danzig-West Prussia, and of East Prussia. The distance
from Berlin to Prague, to Breslau, or to Poznan is about 155 miles, but other
parts of eastern Germany, e. g., Dtuizig or East Prussia, are outside the 155-mile
radius.
The eastern firms admitted to the exchange were carefully selected. The
competent district bureaus examined their political reliability, their commercial
standards, and their technical efliciency with the utmost attention. The bureaus
were informed about the needs of the Berlin prime contractors and chose only
concerns which apparently were able to satisfy these wants. For instance, of
170 Silesian firms interested in getting subcontracts only 60 were admitted.
Nevertheless, there was, at least at the beginning of the exchange business, a
discrepancy between the needs of the prime contractors and the facilities of
the smaller firms. The Berlin manufacturers wanted to farm out what is called
in German "Arbeiten der spanabhebenden Verformung," e. g., the work of trans-
forming with machine cutting, such as turning, milling, drilling, planing, grind-
ing, and cutting threads — operations which, moreover, must be executed with
the utmost exactitude. Most of the factories in eastern Germany were not
equipped for such operations; they were looking for sheet-metal work.
B. The contract and its execution. — If the small manufacturer apparently is
able to satisfy the needs of the prime contractor, who usually first inspects "the
plant of the subcontractor, both manufacturers sign an agreement containing
the following items :
1. Technical content: At the end of the last section we pointed out the kind
of work which is farmed out by the Berlin arms manufacturers. In addition,
appendix II contains a drawing of work pieces of the types usually farmed out.
The contract has to fix the exact dimensions of the work pieces and the
tolerances. Parts which are not properly finished have to be overhauled. I'su-
ally they are returned, but sometimes it is preferable to give them the last
finish in the prime contractor's plant in order to same time (the freight is
charged to the subcontractor). A clause must be added to the contract concern-
ing the procedure in such cases and the distribution of any additional expenses.
When half-finished pieces are processed, part of them inevitably are impaired;
the contract therefore must also deal with this problem.
It is often advantageous for the prime contractor to render the subcontractor
some technical assistance. The small factory often lacks the appliances necessary
for the production of the subcontracted parts, in which case the prime contractor
usually furnishes such implements, or at least drawings of them, through his own
machine-tools department. Moreover, he delegates instructors and foremen to
acquaint the staff of the subcontractor with its task. If the small factory
delivers defective pieces, work is facilitated when the prime contractor sends
specialists to investigate the causes. Frequently obstacles are easily overcome
by overhauling or by precise adjustments of the machines, by improved cooling
or by supplying more eflScient tools. It is expedient, however, to stipulate ac-
curately the conditions of such assistance. Otherwise misunderstandings as to
who shall bear the expenses will probably arise, assistance will be taken for
granted, and the result will be a lawsuit.
The German experts of scientific management maintain that both parties have
to establish some organization to handle the subcontracting business. The small
factory needs an organization, however small, which rationalizes the working
plans, the fixing of the piece wages, and the inspection of the finished goods
prior to their delivery. It is profitable for the prime contractor to deal with the
subcontractors as though they were units of his own corporation.
For further details of technique and organization, refer to appendix III.
2. Delivery : The timing of the deliveries is somewhat troublesome. The pri-
mary contractors are constantly pressed for a speedy delivery. The govern-
mental departments are disposed to fix the terms too short ; they designate as
"urgent in the interest of the state" (staatspolitisch wichtig) orders which are
8062 WASHINGTON HEARINGS
not pressing, and they constantly request delivery, for tbey know that he who
does not insist will never get his material in time. Goering, in charge of the
four years' plan, was compelled actually to prohibit attempts of the authorities
to intimidate the manufacturers for the purpose of rapid delivery. It is most
important for the prime contractor that the subcontractor deliver in time. That
is a frequent obstacle, for the small manufacturer often has to overcome diflBcul-
ties, at least in the beginning, which cause delay, or he may just be a man who
has not learned punctuality.
3. Price : The cost price of subcontracted pieces offers the same problems in
Germany as in other countries. There occur cases in which the plant of the
prime contractor is less elEcient than the plant of the subcontractor. If this is
so, the prime contractor does not hesitate a moment to buy the necessary parts
from the subcontractor. But we should not speak of subcontracting in a case
of normal business relations between a prime contractor and a specialized
supplier. Subcontracting in the technical sense is done only when the prime
contractor cannot wait until he himself has built an additional plant or when it
would be a waste of capital to enlarge the productive capacity for the short
duration of a war boom. Thus we may say that — leaving aside the problem of
depreciation — the original expenses of the subcontractor generally are higher
than those of the prime contractor. Subcontracted parts are more expensive
than the articles of the prime contractor's own factory.
The German Government is well aware of this fact. If the difference of
the cost price alone would haA'e increased the price of articles containing pub-
ccmtracted parts no special regulation of the prices in the subcontracting
business would have been published. The general rules would have been {suffi-
cient. However, subcontracting became a field of war profiteering. Interestingly
enough, not so much for the subcontractors as for the prime contractors. It
may be that some subcontractors made excessive profits, but our Impression is
that the prime contractors have been the sinners. Official investigations dis-
closed that the prime contractors "frequently charged intolerably high com-
missions" which increased the price of the finished goods and which sometimes
may have reduced the profit of the subcontractor. There are indications that,
on the whole, subcontracts yield lower rates than prime contracts. The small
businessmen therefore are eager to get prime contracts rather than subcontracts.
The Government did not intervene before the subcontracting business had
grown to a considerable extent. On September 11, 1940, the Reich, in order
to lower excessive profits, published the decree, mentioned in section A, regulat-
ing commissions and the activity of middlemen. Another decree issued half a
year later, in March 1941, covered a wider field ; it regulated not only the com-
missions but the prices in the subcontracting business by prescribing in which
cases the so-called LSO have to be applied.
LSO is an abbreviation of "Leitsatze fur die Preisermittlung auf Grund der
Selbstkosten bei Leistungen fur offentliche Auftraggeber," e. g., directions for
the determination of prices on the basis of cost prices for suppliers to the
Government. They were drawn up by the German price administrator in fall
1938 when it became evident that the price ceiling and other general price
regulations were unable to prevent war profiteering on a large scale. The
Government wanted to get the war materials as cheaply as possible for financial
as well as for monetary and for social reasons. As the public authorities had
to buy in a seller's market — their demands exceeded by far the supply — they
resolved to replace the laws of the market by a rather sophisticated system of
cost accounting. The prices had to be based on the production cost (including
a suitable profit), not on the costs of individual plants in which system no
businessman would have an interest in lowering the cost, but on "normal" cost
leaving differential profits to the efficient concerns.
The decree of March 11, 1941. applied the LSO to subcontracts in a very
discreet manner. The German Government, which never had any particular
regard for private interests, was most careful — as a commentator put it — "not
to disturb the purely private business relations between prime contractors
and subcontractors" (Der deutsche Volkswirt, April 4, 1941, p. 1006). The
LSO are applicable neither to subcontracts of little importance nor to market-
able goods unless the market price is obviously exceeded. If the object of the
subcontract is not a marketable good (e. g., if the subcontractor processes a
semifinished article) and if the cost is considerable, the public authorities inform
the prime contractor as to the prices of which "bits and pieces" — to use the
English figure of speech — shall be computed according to the LSO. The prime
NATIONAL DEFENSE MIGRATION 8063
contractor passes these instructions on to the subcontractor, who thereafter
has to expect an examination of his books by an official auditor, and a heavy
fine in case he has not adhered to the directions of the price administrator.
However, if the contract is ratlier complex or if it has to be passed out
in a hurry, the authorities may not be able to determine which pieces are
subject to the LSO. In such a case they may invest the prime contractor
with a so-called LSO authority (LSO Vollmacht) and now it is up to him to
bind the subcontractors to the LSO. The authorization burdens the prime
contractor with a great responsibility and therefore it is given only to very
reliable firms. In any case the prime as well as the subcontractors have to
act according to the "maxims of an economy in war" (nach den Grundsiitzen
der Kriegsverpflichteten Wiretchaft) which interdict highly profitable prices.
ni. SPECIAL PROBLEMS OF FARMING-OUT TO SMALL BUSINESS
A. Craftsmen. — The decline of handicraft : Under the regime of Hitler who
promised "a complete reconstruction" and "a new heyday of German handi-
craft," the number of workshops has been reduced considerably. As we men-
tioned before, hundreds of thousands of craftsmen have been induced or even
compelled to become workmen. The press of the handicraft organizations has
had to demonstrate to its readers "how more happily the workman lives than
the so-called independent businessman." The number of establishments dwindled
in 1936-37 (the year beginning April 1 and ending March 31) bv 47,000; in
1937-38 by 57,000; in 1938-39 by 78,000. In the short period of 3 years 11 to
12 percent of all workshops vanished.
The war has accelerated this development because numerous craftsmen and
journeymen have been drafted, and a multitude of workshops have had to
close down for want of labor. In Thuringia, for instance, so many shoe-
makers were selected for military service that a great number of communities
were left without a single cobbler. The Department of Commerce of Thuringia
therefore induced a big shoe factory in Erfurt to establish a repairing service
for 55,000 to 60,000 customers (for the present time of emergency, says the
Ministry). The shoes are collected and returned by truck.
On the other hand, however, a large amount of defense work has been farmed
out to craftsmen, for Germany wanted to utilize all her reserves of labor and
machinery ; the workshops, scattered over the whole country, are less en-
dangered by air raids than the factories and, finally, the craftsmen "are less
susceptible to enemy propaganda" than workmen.
2. The organization of farming out : A restricted number of relatively large
workshops are efficient enough to participate individually in public tender and
to accept large orders. For instance, there are craftsmen who are building
finished speedboats in their boat yards. But the number of these large work-
shops amounted only to 3.4 percent of all workshops, according to a statement
made in 1938. Consequently organizations had to be established as inter-
mediaries between the authorities and the craftsmen.
These organizations have to fulfill numerous tasks : They have to choose those
w^orkshops which 'are prepared to cooperate in public contracts ; they have to
negotiate with them, to assist, to train, and to control them; they have to
procure raw materials for them. i. e., they have to get the necessary permits,
a business which the craftsmen individually never would bring to a conclusion.
Last but not least, they have to take care of the financing. Several types of
organization have been develoi)ed for these purposes.
3. Permanent cooperative associations (Landeslieferungsgenossenschaften) :
The present system of contract cooperatives has much in common with the set-
up of those cooperatives established during the war of 1914-18. In both cases
the cooperative societies were founded under the auspices of the handicraft as-
sociations and had their head office in a Reich center for handicraft contracts.
But in the First World War the number of cooperatives was allowed to rise
from 1,100 to 1,200, while today only one "Landeslieferungsgenossenschaft" (ab-
breviated Lageno) is admitted in each economic district and for each line of
craftsmanship. At the end of 1940 there existed some 200 such associations.
A dozen or more are established by the tailors, the shoemakers, the joiners, the
saddlers and upholsterers, the cartwrights, the blacksmiths, the mechanics, the
basket makers, the brush makers, the cap makers and furriers, the weavers,
g064 WASHINGTON HEARINGS
and the knitters. There is a dozen cooperatives of ropers, net and sail makers
working for the navy. The cooperatives of dyers and cleaners, for instance,
dyed Czech and Polish uniforms which were confiscated in the occupied areas.
Cooperative societies of goldsmiths have orders for the manufacture of Iron
Crosses. According to a German author (U. IMiiller, pp. 62-64, see appendix I)
it was the aim of the Nazi government from its beginning to develop the con-
tract cooperatives as instruments of war supply production. "As the contract
cooperatives are working almost exclusively for the army," details on their
activities are not available "on principle."
Members of the Lageno are the compulsory associations of the workshops,
local cooperative societies, and individual craftsmen. As it may happen that
large and urgent orders are pouring in at a time when the member workshops
are already fully occupied, the Lugeuo signs agreements with outsiders who
pledge assistance in such an emergency ; these outsiders are called reserve troops
( Berei tschaf tstrupp ) .
The Lageno is entitled to negotiate on war contracts with the regional authori-
ties; at the same time it has to execute the orders which are handed over by
the Reich center. The allotment of the orders among the members is frequently
done by confidential men of the guilds who at the same time distribute the raw
materials and collect the finished goods. Each member gets a share in the
order according to his productive capacity, his degree of employment, or his
reliability ; sometimes contracts are rotated among the members.
The members are usually usable to finance the business. The shares of the
cooperative associations have a face value varying between RM (Reichsmark)
20 and 500. The guilds, which are not wealthy, are entitled by the German
Department of Commerce to invest half of their estate in Lageno shares, but they
are not allowed to acquire more than a seventieth of the capital of a single
cooperative. Thus the capital is small and the same is true of the reserves.
But the Central Bank of the German Cooperative Societies (Deutsche Zentral-
genossenschaftskasse) and its banking system are ready to make advances
against assignment of the claims. The public authorities allow such assignments
as a .special concession of the cooperatives of the craftsmen.
After overcoming many difficulties, the Lageno evidently fulfill the expectations
of the Government. They have been useful in the execution of big orders which
can be split up into many equal parts and which are easily supervised in produc-
tion. It goes without saying that the craftsmen who participate in such orders
have to be disciplined and for this purpose the Reich center has organized training
courses.
The leaders of German handicraft have expressed their willingness to carry
on these cooperatives beyond the present emergency and hope to oust the middle-
men from certain markets, e. g., from the clothing bvisiness. These expectations
are the more questionable as the craftsmen have been spoiled by the relatively
easy public contracts. Throughout Germany complaints are heard about the
negligence with which the craftsmen are treating their private customers. Many
of them prefer going completely without private orders ; others accept orders but
do not carry them out or charge exorbitant prices (it is very difficult to apply the
price ceiling to the individual work of craftsmen).
4. Cooperative groups for specific purposes (Arbeitsgemeinschaften) : In the
course of Germany's rearmament huge building operations became necessary :
Military roads — the famous Autobahnen — big plants in regions which are less
exposed to invasion and air raids, mostly in agricultural regions ; houses for those
workmen transferred to new industrial centers ; caserns ; and fortifications, espe-
cially the Siegfried Line at the French frontier. Artisans are predominant in the
construction business and when those large plans were projected with the inten-
tion of carrying them out swift as lightning, it was impossible to rely upon only
the industrial firms or the big craftsmen. It was necessary to utilize the produc-
tive capacity of the little fellows too.
These small craft.smen became organized, through the intermediation of the
guilds, into a rather loose form called Arbeitsgenieinschaft. Such a cooperative
group is an organization of craftsmen of different trades (for instance, masons,
carpenters, painters, plumbers, etc.) for the purpose of carrying out a single
proj;'ct of large extent. The construction of the Siegfried Line offers a good
example. Almost 300 Arbeitsgemeinschaften, with 1,300 persons and plenty of
machines (e. g., 1,600 cement mixers) and tools were employed in the main lines
NATIONAL DEFENSE MIGRATION 8065
of the construction business (Bauhauptliandwerk), leaving aside 300 middle-sized
businesses with prime contracts. We learn from these data that the average
Arbeitsgemeinschaft was rather small (at least in this case). Hundreds of
Arbeits^emeinschaf ten were busy in the accesory lines of the construction industry
(Baunebenhandwerk). Moreover, there were groups of bakers, butchers, and
other craftsmen whose task it was to supply the workers with bread and meat.
The maintenance and repairing of the building machines was done by an organi-
zation of automobile mechanics (Kraftfahrzeughandwerk) which is said to have
worked excellently.
5. Cooperative building societies (Bautriiger-Gesellschaften) are owned by the
organized handicraft, and do construction business for their own account. There
are 17 companies of this type. The "Bautriiger A. G., gemeinniitzige Wohnungs-
baugesellschaft des Handwerks der Ostmark in Vienna," forms a good example.
The shareholders of this joint-stock company are the Deutsche Handwerks und
Gewerbetag in Berlin (a head organization of the Chambers of Handicraft), the
Chamber of Handicraft in Vienna, and the Zentralkasse slidostdeutscher Genos-
senschaften also in Vienna (the central bank of the cooperative societies in
southeastern Germany). The share capital amounted to RM1,500,000, according
to the last available data. In 1939 the corporation completed 108 "Volkswoh-
nungen" (apartments for working people) ; 313 were in the course of construction,
half of it by order of the air force. Its assets consisted mainly of uncompleted
houses (RM1,640,000 at the end of 1939), the biggest item among the liabilities
being credits of governmental banks which do the greater part of the financing
of the Bautriiger-Gesellschaften.
Similar enterprises are the housing societies ( Hausbau-Gesellschaf ten ) . But,
in contrast to the "Bautrager-Gesellschaften," they are working for someone else's
account. They act either as a trustee of the builder or as the administrative
center of the numerous craftsmen who participate in a large building project.
There are six of these companies located respectively in Berlin, Vienna, Munich,
Brunswick, Weimar, and Trier. For instance, the Hausbau A. G. des Handwerks
der Ostmark, Arbeitseinsatzgesellschaft des Reichsstandes des Deutschen Hand-
werks in Vienna, is owned by the same shareholders as the above-mentioned enter-
prise. In 1939 this company constructed in different parts of Austria 695 apart-
ments for the army and 108 apartments for other builders' accounts, besides its
participation in the construction of an electric substation in Carinthia. Rather
important is the company in Brunswick ( Hausbau-Gesellschaf t des Niedersach-
sischen Handwerks) which organized the housing activities in the Salzgitter area
where the Herman Goering-Werke are located _ It is considered as one of its
merits that it succeeded in transferring craftsmen with all their personnel and
tools from regions lacking governmental contracts to the Salzgitter area where
they worked in lax'ge groups (Arbeitsgemeinschaften). A corporation for the
special purpose of building barracks is the Unterkunftslager-Gesellschaft des
Handwerks m. b. H.
In some cases entire workshops or groups of workshops have been inserted into
large factories. That means that the bosses of the workshops (e. g., mechanics
or blacksmiths) with their journeymen, their apprentices, and their tools are
absorbed by big concerns in which they are working not as artisans but as simple
workmen. However, the crew of each workshop is paid as a unit and will be
dismissed as a unit at some future day.
B. Farmers. — In conclusion, a few words on the participation of the peasant
population in the defense work. With the help of small motors and machine tools
they are manufacturing in the dull season simple and standardized parts of
military equipment. Machine tools for this purpose were sent to the farmers as
early as 1937 and several months later instructors came to train the farm people.
It is worth while mentioning that in .Tune 1939 a decree compelled the power
stations to raise annually RM3.5,000.000 for a period of 5 years; this fund is
destined to reduce the price of electric motors and machines bought by the
farmers. The electrification of the countryside has the double purpose of intensi-
fying agricultural production and of facilitating the farming out of defense work.
gQgg WASHINGTON HEARINGS
Appendix I. Litebatuke on the Spreading of Governmental Obders in Germany
Miiller, Ulrich. Die Enttvicklung des Handwerks in den Letzten Jahren unter
hesonderer Beriicksichtigung dcr national-sozialistischen Handwekspolitik und
Hand irerksgesetzgcbuvg. (Berlin, 1938.)
Nicklisch, H., edited by, Handle or terhnch der Betriehswirtschaft, 2nd edit. (Stutt-
gart 1937-39), see articles: "Handwerk," "Kammern," "Lieferungsgemein-
schaften," "Verdingung."
Hess, Otto and Zeidler, F., edited by and commented on, Die Preisbildung bel
offeutlichen Auftriigen. Kommentar der RPO und LSO und weiterer Erlasse
Loose-leaf edition, 2nd edit. (Hamburg, 1940).
Maschinenbau. Dcr Betrieb, Berlin.
Gregor, Hans, Auf tragsvergebung an Klein- und Mittelbetriebe ; Zusammenarbeit
zwischen Gross- und Kleinbetrieb. (Excerpts from a paper read at the general
meeting of the Verein Deutscher Ingenieure, 1939) August 1939, p. 373.
Der Vierjahresplan, Berlin.
Schramm, Ferdinant, "Neue Austrichtung des Handwerks," Vol. Ill, No. 6,
p. 461, March 23, 1939.
Kuttler, Nic. Das deutsche Handwerk im vollen Leistungsaufstieg, Vol III,
No. 17, p. 1028, September 5, 1939.
Zhdt., Handwerksforderung in der Kriegswirtschaft, Vol. Ill, No. 21, P. 1251,
November 5, 1939.
Landfried, Friedrich, Steuerung des Auftragswesens, Vol. Ill, No. 15, p. 914,
August 5, 1939.
Landfried, Friedrich, Zusammenarbeit von Staat und Organisation der gcwerb-
lichen Wirtschaft in der Kriegswirtschaft, Vol. Ill, No. 23, p. 1320, December
1939.
Der deutscJie Volksivirt, Berlin.
Das Handwerk in der Kriegswirtschaft, February 16, 1940.
Baumgarten, Hans, Bewahrte Auftragsstreuung, March 1, 1940.
Hoppe, Kurt, Erste Erfahrungen der Ostdeutschen Auftragsborse, September 20,
1940.
Vermittlungsprovision bei offeutlichen Auftriigen, Sept. 27, 1940.
Schliler, F., Handwerk-Briicke zur SelbstJindigkeit, January 3, 1941.
Streuung, nicht Zersplitterung, April 4, 1941.
Schwantag, K., LSO-Preisbildung bei UnterUeferern, April 4, 1941.
Scattered references in :
Fravkfnrter Zeitimg, Frankfurt a. M.
Der Aufban, Alleiniges amtliches Organ der NSDAP und der DAF fiir Handel
und Handwerk, Berlin.
The annual reports of various Handwerkskammem.
NATIONAL DEFENSE MIGRATION
8067
Appendix II. Examples of Wokk Pieces Stjitable for Subcontractors
[From Hans Gregor, Auftragsvergebunsr an Klein- und Mittelbetriebe. Zusammenarbeit
zwischen Gross- und Kleinbetrieb, published in "Maschinenbau. Der Betrieb," August
1939, p. 373]
20
11
120f
A
2S4
161
TTTl
22
300
INDIVIDUAL ORDERS
of special pieces to be completely
finished if possible, since their
manufacture would not fit into
tlie primary contractor's organ-
ization.
DlNii96 -c
I I DIN?
ORDERS FOR SMALL PARTS
Series of small items which at
present would unfavorably bur-
den the manufacturing schedule
of the primary contractor.
SEMIFINISHING ORDERS
Special processing of series of
pieces which could not be finished
on time by the primary plant be-
cause of overburdening of its cor-
responding equipment.
ORDERS FOR SPECIAL MASS
PRODUCTION
Series of pieces for which spe-
cial equipment is not available,
such as galvanizing plants, sheet
metal departments, automatic
machines.
[Dimensions in millimeters]
3068 WASHINGTON HEARINGS
Appendix III. Organization Methods foe Subcontr^vots as Usrd by German
Industry
[Same source as appendix II]
Orders to subcontractors are passed on by the time study department to a
special department particularly entrusted with placing these contracts on the
outside. This special placement department receives the proper forms developed
for internal use, such as index cards or working plans giving a detailed step-by-
step description of the treatment of the workpiece. This department keeps a
card index indicating subcontracting firms and showing blueprint numbers of
formerly placed orders. When the new order is placed, either the card is supple-
mented accordingly or a new one is filled, indicating the ordei*, number of pieces,
price, working data, material, date of delivery, and internal order number for
the purchasing department. Simultaneously, all available means are compiled
to facilitate matters for the subcontractor.
German experience shows that difficulties are often met in the use of the final
shop drawing containing all designations, and of the detailed working order.
Many plants are not yet used to this sort of description, and, furthermore, the
condition of the piece before it is actually worked is not immediately evident.
Particularly significant are (1) instructions on the drawings concerning standards
to be used, e. g., for fitting, designations of treatments, description of tapers, etc.,
which require up-to-date knowledge of the present state of standardization, and
(2) indications of plant standards for commercial tolerances, lay-outs, and radii,
and also hints regarding heat treatment.
Of great help is a drawing showing the processed stage of the workpiece ready
for delivery to the primary contractor. Wherever necessary, all dimensions are
specified with tolerances according to the rules of German standardization. The
plant standards for commercial tolerances, adapted to those required by the army,
are incorporated in the drawing, as well as the finishing details. The drawings
are always accompanied by the working plan prescribing the practical working
process and its various steps. Often this plan has to be supplemented by special
explanations. As mentioned before, the primary contractor renders further assist-
ance by providing jigs and tools or their drawings, or even skilled labor.
German experience and regulations require that all defects be pointed out after
delivery of the first samples. Personal discussion is always recommended. In
case of excessive complaints, experts have to be sent to the subcontractor's plant
in order to influence management and i^ersonnel. For each delivery received, the
primary contractor makes out an inspection report, comparing the given specifi-
cations with the results of the inspection, itemizing waste and parts needing ad-
justment and the costs accrued. The question of where to do the repair work
has already been discussed (see B). The subcontractor receives a carbon copy
of the report, together with a printed form letter informing him what he is going
to be charged or credited with at the end of the month. Thus he is enabled
to file his appeal before his account has been debited. It must plainly be pointed
out that this report should be regarded entirely as constructive criticism.
According to German trade magazines, the following are the defects most often
experienced with subcontractors : Eccentricity, resulting either in inaccurate sub-
sequent work or, if the prescribed tooling allowance is not observed, in lack of
material on the finished piece ; incorrect distances or dimensions ; inadequate
centrations ; insufiiciently bevelled edges or poorly burred surfaces ; lathe grooves.
Many complaints relate to incorrect heat treatment due to lack of technical
knowledge or an insufficient equipment at the subcontractor's plant.
TESTIMONY OF MORKIS L. COOKE— Resumed
Mr. Sparkman. In the resume of your statement I find this
quotation :
It is highly important to realize that subcontracting is a two-way pi'ocess.
There is no use in organizing pools and other production agencies to receive orders
unless there is a parallel progress in making orders available.
NATIONAL DEFENSE MIGRATION 8069
Which brings up the question of procurement, and with reference to
procurement you have this to say :
The supply agencies do not utilize to an appreciable extent the services of
production and industrial engineers.
Will you please enlarge on that point ?
Mr, CooKE. I have enlarged on it there in my statement. To a
group such as you have on your panel, it is strange that there are any
industrial engineers left in the country who are not engaged on
defense, because anyone of us tackling the problem of improving
the effectiveness, efficiency, and output of an individual plant would
immediately recruit an adequate staff for that purpose. To put
our defense program on a basis comparable with the accepted stand-
ards of production engineering means a large and widely distributed
staff.
The Civil Service Commission, operating the roster of technical and
scientific specialists, recruited a list of 200 industrial engineers,
and had it completed back in March, Three months later I tele-
phoned the Commission to find out what the flow had been, and
they told me that there had been one inquiry and no record of any
appointment.
UTILIZATION OF ENGINEERING SKILLS
As I say, that sort of situation is unthinkable from the viewpoint
of the group you have here this morning. Those engineers ought to
have been gobbled up at once. I don't think there is an appreciation
on the part of the procurement agencies of the necessity for utiliz-
ing production, management, industrial, and processing engineers,
if they are going to speak effectively to their contractors.
In our early correspondence from England we w^ere advised to
avoid the buyer-seller type, not because there is anything to be said
against buyers and sellers in their place. But in building a proper
production organization, we were cautioned to avoid the buyer-seller
lype_ and try to utilize the engineers, especially the production engi-
neering type, and the figures show that that has not been done,
Mr, Sparkman. It is your conviction that these men who are trained
to be experts in production and full utilization of productive capaci-
ties ought to be used by the Government at this time, when we are
trying to speed up the production program ?
Mr, Cooke. The supplv of such men is limited, and it should have
been exhausted for defense, I remarked only yesterday to Mr.
Flemming, of the Civil Service Commission, that we see the demand
beginning to come in now, as the various agencies discover that they
are not getting the output they want, and which thev are now realizing
they should have. There is beginning to be an inquiry for men of that
type.
Now, I dislike to express it in figures, but my judgment is that in
the course of 3 or 4 months an extensive demand will have developed ;
so I suggested to Mr, Flemming that the Civil Service Commission
should appomt somebody qualified in this field to see that these men
are placed where they can be used most advantageously, because I am
sure that it won't be many months before the supply will have been
exhausted.
gQ^Q WASHINGTON HEARINGS
Mr. Sparkman, I was impressed by one statement in your paper,
that "our attention should be turned first not to making work for
those who do not have it but to getting done by every possible means
the huge volume of defense production which we need." It is your
belief, is it not, that if you get that production volume coming, work
will be provided for those who need it ?
Mr. Cooke. Absolutely. It is just another aspect of what Dr. Person
discussed.
Mr. Sparkman. You argue for the use of industrial or production
engineers in order to hasten that production volume?
Mr. CooKE. Yes; and I argue for coordinating the effort on a na-
tional basis. My view is that every machine and every individual
must automatically be made a part of a vast production engine that
will give us the outputs we are dreaming about — make us in fact
the "Arsenal of Democracy."
It would have been much better — I can see the psychological
mipossibility of it, but I still say it would have been much better —
if, when it was first proposed a year ago last July, we had under-
taken an engineering study of what was needed. Let us say, it was
to be $120,000,000,000 worth of defense materiel. If that had been
determined w^e would immediately have scaled the thing out so as
to produce that materiel as and when wanted.
When you plan a water-power site, you don't plan to build a struc-
ture that will use a part of the available power now and a part of it
at some other time. That just doesn't work. You plan the whole
thing, and you install the machinery necessary to produce what you
need at any given time. If it had been definitely stated that the
defense program would require appropriations of approximately
$120,000,000,000 — and I believe we will be there presently — and if
an engineering study had been the basis of that estimate, we could
have acted very much more intelligently. Our present procedure has
been, from the start, one of nibbling at the problem. We engineers
believe in seeing what the problem is, and then going to it.
Mr. Sparkman. You indicate in your statement that the failure
sufficiently to utilize engineering ability is an essential feature of
what you call the "legalistic attitude" of the Army, the Navy, and
the Maritime Commission toward procurement. Would you explain
that a little further? Is that the same thing that you referred to
as "nibbling"?
Mr. Cooke. It is a phase of nibbling. I think the public is respon-
sible for a very large part of the nibbling. The public hasn't waked
up to the size of the problem, any more than some of the people
in the Government have, and they react on each other.
I have tried to point out the difference between procurement and
production. Procurement is obviously a peacetime approach to the
acquisition of materiel, in which neither volume nor tempo is ter-
ribly important. In fact, in trying to find work for Army officers,
the man who can intelligently string it out is probably the better
peacetime employee. But coming into war, there is a physchological
difficult}^ of getting verve into their work.
There are other reasons, too, why the approach of military pro-
curement officers to this problem is inadequate in time of emergency.
They feel that if they "fuss," as it might be expressed, with the work
of the contractor, they might not get as good a product as they would
NATIONAL DEFENSE MIGRATION 8071
if they left it entirely to the man who knows how to turn out the
work.
Then there is the legalistic attitude. It dominates the thinking of
these officers. They feel that any interference on their part may
affect in some way the legal validity of the contract.
But the chief difficulty is that these men are thinking in terms of
procurement figures rather than production figures. If, alongside of
the procurement hierarchy, there should be laid a hierarchy of pro-
duction specialists — always under the Army, under military con-
trol— then I think we would begin to see things happen,
EXPLODING MATERIEL
Mr. Sparkman. In your statement you make reference to the prac-
tice of English engineers of "exploding" ^ materiel, such as a tank,
into its constituent parts so that the manufacturers might see what
those parts are. Would you elaborate on that ?
Mr. Cooke. That is quite a common practice in England. Though
I have no proof, I imagine that it is carried even further in Ger-
many. Mr. Henry has just handed me a picture of the M3 tank
that you might want to look at.^ Obviously, only a big concern can
bid on this kind of item or even consider making it. I don't know
whether it is that particular tank, but there is one of them that has
30,000 parts, and 5,000 of them are different. In "exploding" such
a product, you tear it apart, figuratively speaking, and spread the
pieces out on the floor, and make pictures of them, so that a man
can come along and say, "I can make a lot of those on my machinery.'"
Mr. Curtis. Isn't that what they are doing in the defense trains?
Mr. Cooke. I know there are such trains, but I really don't know
Avhat tlie exliibits are going to be. I don't think that will turn out
to be quite \^hat I have in mind. They are going to have exhibits
of things that the A rmy uses.
The Germans, as any of you who have been abroad know, have in
practically all the smaller towns sidewalk markets where you can
buy things — shoes, jewelry, and the like. And in Germany they also
have exactly the same thing for military goods. They have bourses,
sidewalk places, where one can go and look about anci see what Ger-
maii}'^ wants. There a man can bid, either for himself or by getting
together with others in a group. ]Mr. Henr}^ suggests that is the
Leipzig Fair.
At any rate, until we do break these items of materiel apart,
there is no chance for the little fellow to get in.
In the last few days I have got the details of the Oerlikon gun.
I have discussed that in my extended statement. Mr. Antoine Gazda,
the inventor of that gun, manufactured it in Switzerland until he was
surrounded, and then presumably he stuffed his pockets full of blue-
prints and came to this country and started in to inquire for a plant
where he could build the guns the way he had built them in Switzer-
land. The Rhode Island Industrial Commission told him they had
no such plant, and to build one would take a long time, "so why not
let us help you build it through subcontracts?" This was done, and
1 "Exploding," as used here, is an English term meaning breaking down of an item of
materiel into its component assemblies and parts.
1 See p. 8074A.
60396— 41— pt. 20 5
§Q72 WASHINGTON HEARINGS
now there must be 50 or 75 different concerns that have made parts
of that gun. It is now being made in 8 or 10 States, if my memory
serves me right. It is* a good example of a thoroughly successful
scheme of manufacture. The gun is a complex mechanism, made by
subcontracting, sub-subcontracting, and sub-sub-subcontracting.
Mr. Curtis. Your point is that when we look at a complex mecha-
nism like a tank, we see it as a whole, whereas
Mr. CooKE. AVhereas a tank is a tank, and it isn't. That is to say,
it is an assembly of thousands of constituent parts.
Mr. Curtis. And only a big concern could hope to manufacture
that assembly, whereas if it were broken into its 30,000 parts, there
is no telling how many manufacturers might contribute to the
production of that tank.
Mr. Cooke. That is right. It is no criticism of the Baldwin
Locomotive Works or the American Locomotive Co., or any of the
others that got those contracts, that when they first started on them
they knew as little about it as anyone else. They had to start in and
"explode" the tanks for their own information.
Mr. Sparkman. You refer to "clearing centers" in the program
of production. Will you tell us what you mean by that and how
they can be utilized?
CLEARING CENTERS FOR EXCESS PRODUCTION FACILITIES
Mr. CoOKE. Clearing centers for excess production facilities are
operating in England, and in at least one place in this country. The
one I am most familiar with is operated in Providence, R. I., under
the auspices of the Rhode Island Industrial Commission. There are
700 metal-working plants in the Providence area. As I recall it, 200
of them are completely loaded, so that the clearing center operates
among only about 500. It has in its office a complete inventory of
every machine tool in those plants. A check-up is made every Thurs-
day. The operating method is so worked out with syilibols that one
girl on the end of a telephone on Thursday is able to call up these
plants and find out what they have that is idle in the way of ma-
chinery. This information is assembled and published in a ncAvs-
paper — in the Providence Journal, I think it is — once a week. It
includes the number of machine-hours on all types of machinery
that are available. During the week anybody who wants extra work
done contacts the clearing center. Let us say I am a contractor,
making some parts for the Oerlikon Gun, and I have some tooling
that I want done. I call up the clearing center and within a short
time they can tell me where that can be done. On the other hand,
suppose somebody unexpectedly finds a machine liberated in his plant.
He calls up the center and says, "This machine is open. Do you
know anybody who can use it?" The operation of one of these
clearing centers in London recently was described by a labor leader
who came over here, and who serves on one of the tank boards. He
said, "We completed about 15 percent of the requests when we
started in, and we are now completing about 85 percent of them."
And Providence says that they take care of 80 percent of them. It
is a marvelous thing, and there is no reason why greater use should
not be made of that system. In the Middlesex area they have 4,000
NATIONAL DEFENSE MIGRATION 8073
metal-working concerns and 10 clearing centers. I think we should
have 200 of these centers in this country. The technique is all worked
out, and they could get started almost overnight.
Mr. Sparkman. Did you say the one in Providence is the only one
you know of in this country ?
Mr. CooKE. The only one I am familiar with as to details of oper-
ation.
Mr. Sparkman. What is the difference between a clearing center
and a pool?
Mr. Cooke. You might have a number of pools operating within
the area controlled by a clearing center. A pool, as we have been
using the term, is formed when two or more manufacturers come
together and decide : "Now, we haven't got the machinery with which
to carry out any orders we know about. We associate ourselves, and
possibly other people, and in that way we may build up the necessary
facilities." The pools would use the clearing center. One of the
most interesting instances of the pooling of machine facilities, which
I have cited in my extended report, was described last week by Sir
Herbert Gepp, from Australia. You may recall that the President
said to Mr. Knudsen and Mr. Hillman that he wanted the machine
tools of the country used — even those "in the garage in Hyde Park."
That idea rather fascinated me. Then Sir Herbert told us that they
had formed a pool of 50 garages in Australia, and he had a news-
paper account, showing pictures of the things they were making.
They had turned out, in the first 7 weeks, a quarter of a million
dollars' worth of work, and with only 1 percent rejections. I think
that unless we grasp the idea that we are going to use everybody,
we are going to fail. Relatively, we shall merely enter into another
phase of our nibbling.
Mr. Sparkman. In getting those clearing centers and pools into
operation, is there any difficulty growing out of the reluctance of the
persons concerned to share their experiences and problems?
cooperation between manufacturers
Mr. Cooke. I don't think there is any trouble getting them started,
but to get the full measure of cooperation takes time. One of the
most remarkable things about the Providence center is that big con-
cerns like Brown & Sharpe allow their machines to be used by outside
concerns. That has never been heard of. There are certain types
of machines, like boring mills, which they have to have, but which
they don't use much ; and I think up to a couple of years ago it would
have been unheard of for a manufacturer to invite anybody to use
his boring mill.
Mr. Sparkman. Mr. Cooke, a short time ago you said the failure
of the production program to get going was partly the fault of the
public, because people did not understand the magnitude of the
program and of the demands to be made on them. Of course you
didn't intend to attach any blame to the public for not understanding.
Mr. CooKE. I share it.
Mr. Sparkman. None of us knows the real magnitude of our pros-
pective defense need. But it is your feeling that when the public
is made aware of the demands that are going to be made on it, it
will cooperate fully in this program.
3074 WASHINGTON HEARINGS
Mr. Cooke. The only way to get going is to get its cooperation.
The Chairman. Tliank you, Mr. Cooke. Our next witness is Mr.
Henry. Mr. Henry, Congressman Curtis will ask you a few
questions.
Mr. Curtis. I have gone over your paper and it will be placed in
the record in its entirety.
(The paper referred to above is as follows:)
STATEMENT BY S. T. HENRY, ASSISTANT TO THE PRESIDENT, McGRAW-
HILL CO., NEW YORK CITY, N. Y.
Labor dislocations on an extensive scale are now unavoidable in the shift that
is being made from a peacetime economy to one that must become devoted far
more than it is now to the production of war materiel. From 25 to 30 percent
of our productive capacity will be on defense work in a few weeks ; it must b€
double that. Lack of planning during the last year now makes it impossible to
prevent the temporary loss of jobs of hundreds of thousands of men and women
when such a shift becomes effective. But it is not too late to reduce enormously
the number of workers so affected, if quick action is taken along lines that have
been largely ignored to date in placing defense orders.
Buying procedure thus far "for most lines of defense products has followed
entirely too much the normal Government methods of doing business. Too many
of those who have the authority to place orders have been unwilling to adopt
policies that they may consider revolutionary. This unwillingness to accept re-
sponsibility for the limited number of inevitable mistakes that will be made in
adopting such new policies is so evident that it needs no elaboration.
Meantime, curtailment of production of hundreds of types of civilian goods is
beginning to spread rapidly. It is certain to become very extensive soon. Unless
some of these revolutionary steps in the placing of defense orders are taken imme-
diately, the number of people who will be out of a job in the next few months
will be far in excess of the estimates of a few weeks ago.
The time for optimistic statements and expectations has passed. The country
is confronted with a crisis in unemployment that still may be eased greatly, pro-
vided courageous leadership capable of doing a highly specialized management
job is at once given the green light.
Generalizations such as these are easy to make. The question is how to get
results. In other words, how to speed up defense production, and at the same
time create jobs for those being thrown out of work in civilian-goods industries.
There are so many lines along which action might be taken that a few specific
illustrations will serve best to prove the possibilities. Take the metal-working
capacity of the country ; that is, the machines which cut up, shape, and otherwise
prepare steel, copper, brass, aluminum, and other materials into the parts that
make guns, trucks, planes, and all of the mechanical equipment required by the
Army and the Navy. In a word, the big and little machine shops.
METAL-WOEKING CAPACITY OF COUNTRY
This metal-working capacity of the country — capacity vital to defense — is now
working far less than it should. No recent reliable estimates are available, but
the entire metal-working capacity of the country is said to be in use around 50
hours a week on the average. Full capacity, on a basis of three 8-hour shifts
6 days a week, would mean 144 hours ; on a basis of two 10-hour shifts 6 days a
week tlie total would be 120 hours. But anyone who knows plant operation realizes
that in some lines of machine-shop operations it is diflicult to keep production
balanced. Allowing for these limitations, practical operating capacity is cer-
tainly not far from 100 hours a week under the forced-draft conditions that must
be maintained to meet the defense production goals that have been set. The
Timken Roller Bearing Co., at Canton, Ohio, is working 10,000 men on a 40-hour-
per-man-per-week basis, running its machines constantly. This means 168 hours
a week, so the 100-hour basis is quite reasonable when management is able and
willing.
This sums up to the fact that our metal-working capacity, one of the most
vital lines of production in the country, is at about half its easily sustained
output. When this situation is presented to those in authority, all sorts of
reasons are given for the poor showing. Lack of labor and scarcity of materials
■-.►-. re rt- -:
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NATIONAL DEFENSE MIGRATION 8075
are those most common. But in instances that have been run down officially,
very few cases have been found whore either lack of labor or inability to get
supplies has prevented the machines in a shop being worked more hours per
week than they are now. The percentage of output so affected is negligible.
The basic causes of our failure to use the machines we have at least 50 percent
more than they are now being worked are twofold. First, there is a lack of
willingness on the part of too many Army and Navy officers to change the
policies they have always followed in placing orders. Second, too many indus-
trialists of the country have thus far failed to realize the intention of the
country to meet the commitments the Congress has made for the production of
arms and war supplies. Until both these handicaps are overcome, not much
progress may be expected in increasing the use of the existing metal-working
capacity of the country to at least 75 percent of the time per week it could
unquestionably be operated. An average basis of 100 hours a week should really
be the minimum goal. Keep in mind the present rate is estimated to be about
50 hours.
There is no need to go into detailed estimates of the number of jobs that
would be created by stepping up the use of our metal-working capacity from 50
hours a week to around 75 hours. The totals would certainly be in the hundreds
of thousands.
When such suggestions are made the first question many in management raise
is, "Where are the men with the necessary skills?" That is a most difficult prob-
lem. But so is winning the war. Moreover, this problem is being solved con-
stantly by the more aggressive manufacturers of the country.
GENEEAI, ELECTRIC COMPANY
One outstanding example is the General Electric Co., which is adding around
1,000 employees a week to its pay rolls. General Electric is producing some of
the most complicated and intricate armament machinery and apparatus on the
schedules of the Army and the Navy. But it finds the necessary people constantly
to expand its forces at a remarkable rate.
Talks with the responsible heads of the General Electric Co. quickly disclose
their desire to try anything that will get quicker deliveries. Hundreds of other
industrialists have the same attitude. They find the men and the materials.
More industrialists need that point of view. Labor also even more seriously in
some localities needs to realize the critical situation that call for all-out effort.
Until both management and labor more generally get a better viewpoint, progress
in stepping up our defense output will be slower and priorities unemployment will
be greater than either should be.
One reaction of many in Washington who place defense orders to the idea of
utilizing immediately more fully the existing metal-working capacity of the coun-
try, is that outstanding orders are being delivered remarkably well on schedule.
But how about speeding up the schedules? Certainly far more than we are get-
ting is needed at the earliest possible date. Increasing the use of the metal-
working capacity we already have by half will secure that speed-up quickly.
M3 TANK
Much of this speed-up could be had before plants yet to be built may be more
than half ready to run. At the same time, hundreds of thousands of workers who
are facing idleness may, by this greater u.se of existing capacity, be given a job
within a reasonable distance of where they now live. If advantage is not taken
of this opportunity, then these workers will have to move to new locations.
More specific instances of how existing capacity might be employed to get
quicker deliveries than are possible from factories yet to be built could be cited.
Take, for example, the Army's M3 tank.*
The policy of the Army in securing tanks of this type has been to utilize
great existing manufacturing plants or to build huge new plants. That was
unquestionably sound, so long as there was unoccupied capacity in the existing
plants, or so long as there was time to erect and equip entirely new factories.
But both these conditions have passed. There are no more great idle plants
and there is no time to build and equip great new complete plants. But there
is an alternative which the Army has stated that it recognizes. That alterna-
^ See photograph on oppof?ite page.
3076 WASHINGTON HEARINGS
tive is to utilize existing capacitj' that is not as fully employed as it might
be. Army's recognition of this fact has thus far not produced any important
results in the way of actual contracts awarded by the Army for tanks on
the basis that the prime contractor must sublet the macliining of parts. Pur-
chase of components of the tank, yes; but not true subcontracting, although
there now is authority for such procedure.
Now, to get right down to details in the carrying out of such a policy :
Take the turret of this tank. It revolves 360° on tracks in the main frame,
much the same as do the thousands of power shovels and cranes on everyday
construction jobs. But the machining of these tracks has been held to require
great fixed tools known as boring mills. Deliveries on new orders for boring
mills are far in the future, so far that waiting for them might easily mean
a Hitler victory.
But there is no need to wait in the case of these tank-turret machining
jobs. To follow other procedure does mean adopting radically different policies
than have obtained in placing orders on most of our defense program. But it
Is time to do some radical things. Hitler has.
One entirely practical policy of doing this machining job would be to pool
together in an area of reasonable radius a group of manufacturers having
all or most of the necessary machines to produce the parts for these tanks.
These areas may be selected, for instance, so as to include or be adjacent to
the plants that build the full-circle-swing shovels with big boring mills designed
to do exactly the sort of work necessary to machine and finish the tracks
for the turrets. In most cases these boring mills are working an average of
not more than 40 hours a week, although the plants in which they are located
are almost entirely on defense work and are operating the rest of their
machines more hours than usual.
Objection might be raised to the impracticability of shipping the huge tank
castings to the existing shovel and crane plants having the boring mills. But
for years some of these shovel manufacturers shipped their heavy base
steel castings to other factories for exactly the same operation. They found
it practical in a competitive situation, certainly it ought not to be impractical
under the urge of war needs.
There likewise is the possibility of specially designed single-purpose tools
being developed as satisfactory substitutes for the highly complicated standard
machines built to do a variety of work. Such an opportunity occurs in the
development of a tool to do the single job of inachining tlfe races of the
tank turret in place of the multipurpose boring mill.
These kinds of special tools might not be justified economically in a com-
petitive peacetime industrial picture. As a method of obtaining quick deliver-
ies and of meeting critical shortages they offer important possibilities. With
them, it is possible in many cases to piece out existing installed metal-working
capacity now operating only part time, or about to be made idle by curtail-
ment of civilian-goods production. By combination of such existing equipment
there are large opportunities td employ workers who will be made idle by
the pending reduction in peacetime products.
These are merely a few of many opportunities for utilizing metal-working
capacity already installed to do two things: First, to get more defense pro-
duction quickly ; second, to provide employment for great numbers of workers
where they are, workers who will otherwise have to shift to new locations
for a job. The chief difficulties in taking advantage of these opportunities
lie in the inertia of those who can make the decisions on radically new buying
procedures. The Congress has given them the authority. Until that inertia
is overcome, few results may be expected and unemployment is certain to be
far greater than it should.
TESTIMONY OF S. T. HENRY, ASSISTANT TO THE PRESIDENT,
McGRAW-HILL CO., NEW YORK CITY, N. Y.
Mr. Curtis. As I gather, you have made two principal points, and
they have been tied to one another. One is your criticism of military
procurement and the other is your criticism of the idea that we must
have newly designed machines to make what we need, instead of
NATIONAL DEFENSE MIGRATION 8077
trying to utilize existing machines. For the benefit of the committee,
would you enlarge upon those two points ?
Mr. Henry. The military procurement officers, both Navy and
Army, are military-minded rather than merchant-minded. Mer-
chants like Mr. Nelson would approach the task from a merchant's
point of view rather than from the point of view of a military
technician.
Probably the best illustration of what I mean would be what hap-
pened in the last war. Along in the middle of July 1918 I was asked
to step into the Hog Island situation, which was pretty well bogged
down. That was probably the largest subcontracting job the country
has ever seen carried into effect. It was totally a job of assembling
ships. There had been the lack of follow-up similar to the situa-
tion that Mr. Person has remarked about. There hadn't been the
pressure on delivery. For about 4 months I lived in a bag and
made one-night stands in Pullmans on getting deliveries from about
150 subcontractors. Until we get under way in the present situation,
until we make the same sort of demand for more speed-up that was
put behind Hog Island, I don't see how we are going to achieve
more complete emploj^ment of our production facilities.
Mr. Curtis. To be specific, who should put on the pressure for
speed ?
Mr. Henry. My opinion is that the people who place the orders
are the only ones who have the authority to pat on the pressure.
Mr. Curtis. Instead of assuming that the job is being done as
quickly as possible after the contract is let, there should be a follow-
up by technical production experts. Is that your point ?
Mr. Henry. I think you had better go back of that a little bit. If
I go to buy a machine and the manufacturer submits a proposition
that he can complete the job within a year, that's when I'd begin to
put on the pressure — before I gave him the contract. I would say:
"That delivery isn't prompt enough. If you can't do better than
that, we have got to get somebody who can."
machine hours, not man hours
Long before the contract is let, there ought to be a certainty that
the equipment of the concern taking the contract is going to be
worked to reasonable capacity; and I mean by that, not working all
machinery one shift, but, as I brought out in my statement, it is
perfectly feasible to think of the metal-working capacity not as so
many hours per man, but as so many hours per machine, up to 100
hours a machine per week.
Mr. Curtis. That is how much more than the average now?
Mr. Henry. In my statement I mention an estimate of 50 hours a
week as the average use of the entire metal-working capacity of the
country at the present time. That can be verified through the
Bureau of Labor Statistics.
Of four leading producers in one of the most critical lines we have,
none has more than 17 percent of its capacity on the third shift, one
has none on the third shift, another has 8 percent on the third shift,
and the fourth has 3 percent on the third shift. And, I repeat, those
companies are producing one of our most urgent needs.
gQ78 WASHIINGTON HEARINGS
From the Bureau of Labor Statistics you can get a great deal of
information on just how some of these critical-line industries are op-
erating, and how far short of capacity their operations are. We are
by no manner of means up to capacity production.
Mr. Curtis. Is labor ready for full production ?
Mr. Henry. My answer to that question is set forth in my prepared
statement. Timken is working 10,000 men on a 40-hour per-man per-
week basis. This means 168 hours a week with machines running
constantly. The company has sustained that rate of operation for
some months. That, of course, is a management job, and a whale of a
job. But they are doing it. General Electric is adding 1,000 men a
week to their pay roll.
Now, when you ask about labor, those are two outstanding examples,
and a good many others are doing the same sort of job.
Those are two outstanding examples; a good many others are
doing the same sort of job.
When we come to the question whether there is work enough to go
around, we must consider the magnitude of the defense program. I
haven't the figures up to the moment, but I believe $25,000,000,000 in
contracts already has been let. Assuming the total is as high as
$30,000,000,000— which I doubt— that means we have $30,000,000,000
left to let on a $60,000,000,000 appropriation. Now, if we are ulti-
mately going to appropriate $120,000,000,000 we have let 25 percent of
our total awards to be reached within the near future. My con-
tention is, therefore, that although labor could be found and there
would be jobs enough to go around, we can't do it working 50 hours a
week. We can't do it in critical defense industries.
Mr. Curtis. You mean by working the machines 50 hours a week?
MULTIPLE SHUTS
Mr. Henry. Yes. I am referring to the estimate I mentioned a
moment ago, of 50 hours a week as the use we are making of our
metal-working capacity. We can't fill defense needs with operations
that low in critical lines. These examples I gave you were given to me
in confidence, but I can give you this information. One of the criti-
cal industries is working 70 percent on the first shift, 25 percent on
the second, and 5 percent on the third. It is impractical to run on a
second ancl third shift as much as on a first, but England has found
it better to run two 10-hour shifts rather than three 8-hour shifts, so
the British are working about 120 hours. We are working 50 hours
in some of our critical industries against a necessary 100, to be con-
servative. So we have a lot of possibilities for improvement in the
existing facilities of critical industries.
Mr. Curtis. How would you suggest that we go about utilizing
existing machines more than we have, machines that do not reach the
degree of perfection which new ones would ?
Mr. Henry. Mr. Cooke has been hammering on the use of existing
equipment. Any concern that is in business is going to get all the
business it can get with what it has. There is no doubt about that.
It is Jjoing to extend deliveries just as late as it can get a backlog.
That IS all right in private industry, but where is the defense pro-
gram to get off?
NATIONAL DEFENSE MIGRATION 8079
I was glad to hear Mr. Nelson agree with the suggestion that I had
made, that we ought to examine all delivery dates. I think that is
the first way to get a lot of work available quickly. Those are jobs
on which designs have been approved, quantities determined ; all the
factors that permit you to go ahead quickly have been fixed. Let's
take any type of machine. Any deliveries beyond the middle of
1942 are later than they ought to be if all the factors have been fixed —
if designs, quantities, and requirements are known.
Now, I feel that it is entirely possible first to get the existing con-
tractor to speed up a lot if he knows he is going to lose the tag end
of the contract. He can put more men on the second and third shifts.
He can subcontract more and thus will make quicker delivery. If the
contractor really is loaded up, as some of the defense manufacturers
are, then there is an opportunity to say : "Take some of those deliveries
and advance them as is practical."
Here is an illustration of what I mean. The Pratt & Whitney
engine for airplanes is about as intricately designed as any unit we
have, except some of the precision instruments. Pratt & Whitney got
up to all the production they could handle. They then gave t^^'o or
three other airplane engine manufacturers the right to make that en-
gine for a dollar a unit royalty, which was practically nothing.
That sort of policy, extended to many lines, would give us much
quicker deliveries. If we recognize the fact that we are headed not
for a $60,000,000,000 program, but for twice that, and further that we
have let something under $30,000,000,000 to date — in other words,
that we have three times as much to let as we have already under con-
tract— it is evident that we have to use everything we have in the way
of metal-working equipment.
Mr. Curtis. I wish you would touch a little bit more on the utiliza-
tion of older machines, as compared with those newly designed.
Mr. Henry. Well, do you shave with a safety razor?
jVIr. Curtis. No.
Mr. Henry. I use one. I expect it is 10 years old. I put a new
blade in, and it works as well as a new one. When it comes to
machine tools, it is largely a matter of tooling up. Now, I don't
mean by that that the latest types of machines are not more econom-
ical than the early types. They certainly are. But the difference
has been in the degree of competition. If you are in a company run-
ning with older equipment, and I have more modern equipment, I
can produce a little cheaper than you, and I can beat you in competi-
tion. Now that we are into a war emergency, the difference of a few
percent in cost becomes less important. It is the output we are after
then. If we take some of the older machines and do an intelligent job
of tooling, we can use many of them just as effectively in getting
production as we can the most modern types.
Mr. Curtis. Referring to this picture ^ of this huge tank with the
turret [indicating], what you are getting at is that somebody who
makes turrets for cranes ought to be put to the job of making those
tank turrets. Is that correct?
Mr. Henry. That turret can swing full-circle, or nearly so. I
haven't seen the details of that particular design, but I believe the
turret revolves on a pair of tracks with a ball bearing race between
1 See p. S074A.
gQ§Q WASHINGTON HEARINGS
the tracks to keep it from swaying. In principle that operation is
exactly the same that you see on shovels and cranes on construction
jobs. Every one of the' manufacturers of those shovels and cranes has
a boring mill, a certain type of machine tool that has a wide range
of applications, but most of those boring mills in the shovel plants
are used for cutting the raceways. They aren't used full-time. One
plant that I have been connected with has one of those boring mills.
Because of the limited need for this big unit, I doubt if that company
today is working it more than an average of 2 hours per shift.
There is no reason why that particular job of machining on the
tanks couldn't be done by those boring mills.
Mr. Curtis. Is it being done ?
]Mr. Henry. Not by those shovel companies' boring mills. The
boring mills in large plants like the Chrysler plant, or American Car cS:
Foundry are building tanks in an assembly line. Their operations
are quite different.
Mr. C/DRTis. Is anybody working on that particular problem, or to
obtain that objective at the present time? Or do we need to revert
back to Mr. Cooke's suggestion that along with the procurement ex-
pert there must be placed a production expert?
Mr. Henry. I expect you ought to ask Mr. Odium that.^ I don't
know.
The Chairman. Thank you very much, Mr. Henry. Our next wit-
ness is Mr. Taub, whose paper will be entered into the record at this
point.
(The paper referred to above is as follows:)
STATEMENT BY ALEX TAUB, TECHNICAL CONSULTANT, OFFICE OP
PRODUCTION MANAGEMENT, WASHINGTON, D. C."
I have been asked to give brief answers to certain questions ^ which will be
asked of a panel incorporating Dr. Harlow S. Person, Mr. Morris L. Cooke,
Mr. S. T. Henry, and the writer.
One of the questions is, How can we, consistent with defense needs, more
fully utilize existing production facilities? Some doubt is thrown on this ques-
tion because it states "consistent with defense needs." At the moment the
greatest drawback to the utilization of existing production facilities is the
consistent advice that we get from the procurement agencies that the needs have
all been covered and hence only the production facilities now under use can be
used. It is entirely useless to organize the tremendous production facilities
of this country unless work can be furnished for these facilities. Billions of
dollars are released for this purpose but apparently it dries up very quickly.
The next question is : Where does the excess capacity exist which should be
utilized? Bearing in mind the answer to No. 1, assuming we had worked for
distribution, our larger facilities can be found in two national groups : The
large mass producers of durable goods industry such as motorcars and house-
hold equipment and the small manufacturer normally running a business of
his own, employing from two hundred to a thousand employees, sometimes used
as a parts maker to the larger companies. Ten months ago, when I first
returned to America, the state of mind of industries such as the motorcar
industry was still against any interference of their normal business. Defense
work was only acceptable to those who foresaw a jwssible cut In their output
and these were very few. At that time the announced percentage of facilities
available for defense work was in the neighborhood of 15 percent. Today,
with curtailment on the premises, it is freely admitted that 50 percent of the
facilities can be used for defense with a possibility in certain areas of extending
this to 70 percent. We have one instance of actual practice where nearer to
1 Floyd B. Odium, Director, Division of Contract Distribution, OflBce of Production
ManascMiient.
2 Subsequent to the hearing it was announced that Mr. Taub had been appointed Chief
of the Conversion Section, Contract Distribution Division of the Office of Troduction
Management.
3 See footnote, p. 8034.
NATIONAL DEFENSE MIGRATION 8081
90 percent is used. With proper planning, considerable employment can be
absorbed without any facilities except empty buildings and a few cranes. The
smaller manufacturer who, numerically by factory units and number of em-
ployees, far exceeds the large manufacturer can be brought into the picture only
if his facilities can be used to their maximum even though this maximum
doesn't complete a project. By pooling his facilities with the facilities of
other properly geographically placed small factories a project can be completed.
AMERICA'S MECHANICAL INGENUITY OVEELOOKED
The present practice of examining a list of machine tools and determining
by remote control what those facilities can make excludes the greatest facility
that America has and that is mechanical ingenuity. By allowing a pool of these
smaller factories to examine a defense item they can determine for themselves
whether they can make it and who else to bring to their pool to complete the
item. This is a principle we have been working on and in Toledo have actually
formed that community into usable pools. The same is being done for smaller
manufacturers in Detroit and again in Newark, N. J., and an attempt will
be made to broaden this activity. We are sure that this will bring forward
production facilities far in excess of anything that anyone has dreamed of and
unfortunately very far in excess of available work.
The next question as to what industries can be most readily converted is best
answered by saying the most difficult industry to convert is one such as the stove
industry where most of the work is punch press and sheet metal. Defense items
require this type of work in a very limited manner. However, that does not
mean that if skilled pi-ess shop engineers were allowed to examine all defense
items for the conversion of defense items from castings to stampings, that we
might not be able to save machine tools and create work for that part of the
durable goods industry that is being hardest hit.
The next question is: What are the technical difficulties of converting differ-
ent kinds of industries and different sizes of plants? The technical difficulties
are legion but they solve themselves when facilities are pooled. A Detroit manu-
facturer who was attending a distress meeting in Detroit told us that he had
lost a $500,000 order because he did not have more than 5 of a certain type of
machine and needed 25, yet around the table of discussion sat all the machines
he could want. Small tools and jigs can be had for the breaking of bottlenecks
because we know there are many small tool manufacturers whose facilities are
unused. A pool of such organizations is being formed now around Detroit, which
will eventually offer a tool capacity for the making of tools and jigs needed
for the production of any item. It is even conceivable that a combination of small
tool shops with some of the better stove makers with their foundries could make
machine tools, some of which are true bottlenecks today.
The other questions, we believe, are more or less fully answered in the above
but I do want to underline the main drawback to the utilization of American
facilities is the lack of defense contracts.
TESTIMONY OF ALEX TAUB, TECHNICAL CONSULTANT, OFFICE OF
PRODUCTION MANAGEMENT, WASHINGTON, D. C.
Mr. Curtis. Mr. Taub, you have spent quite a little time in England,
recently, haven't you?
Mr. Taub. That is right.
Mr. Curtis. What was your profession before going to England ?
Mr. Taub. I have been an engine designer for 30 years.
Mr. Curtis. And with whom were you associated or employed in
this country?
Mr. Taub. Ford, Packard, and General Motors, from 1917 to 1936.
Mr. Curtis. And where did you go in 1936 ?
Mr. Taub. I went to Vauxhall in England, to design a line of
engines for that company,
Mr. CuKTis. Is that the General Motors Co. in England?
8082 WASHINGTON HEARINGS
Mr. Taub. Yes, sir.
Mr. CuETis. In what capacity did you serve the English Govern-
ment when the war came on ?
Mr. Taub. In 1939 and 1940 I served on the British Mechanization
Board, in charge of consultation on automotive equipment, such as
truck and tank engines.
]\Ir. Curtis. How long did you serve the English Government ?
Mr. Taub. From the beginning of the war until 2 months ago.
Mr. Curtis. I wish you would elaborate upon the observations in
your jDrepared statement, and I should like to hear any comment that
you might like to make on the discussion we have had here this morning.
Mr. Taub. You understand that I am a rank amateur in meetings
of this kind. I had much rather design a tank than talk about one.
It is easier. You can prove what you are doing very quickly. But
I would like to revert to the questions that were in your memorandum,
if you don't mind, because in the last 2 months, having a roving com-
mission, I have spent most of my time on plant conversion.
CONVERSION IN ENGLAND
In England there naturally was a lot of conversion because "busi-
ness as usual" pretty well died overnight. Within the first 3 months
of war, we weren't making any automobiles except for export. Within
6 months we were making no motorcars whatever. So it didn't take
long to realize that we were going to convert. It was just a question
of determining the suitability of a given plant to a particular defense
item.
We found by experience that we could make 3-ton trucks on an as-
sembly line that normally handled little 10-horsepower cars. It was
largely a question of urgency, and of how many bombs were dropping
outside. That makes a difference. Bombs have a way of speeding
you along.
There was some mention made here of hours of work. It must be
borne in mind that the night shifts in England were quite useless for
a while, in that we had four or five interruptions during an evening.
And we got very little good out of it. The total number of hours
actually worked bore no comparison with the total number of hours
on the books per month, because the men spent half of their time in
the trenches.
Mr. Curtis. What was the experience in England on what has been
termed here as "exploding?"^
Mr. Taub. It isn't done quite that way, sir. The best thing I can
do is to explain how a small motor-car company went about fulfill-
ing a contract for making the 42-ton tank. The company was about
half the size of the Studebaker Co. but had not as much equipment
and certainly was nowhere near as up-to-date. However, there was
some advantage in having non-up-to-date equipment. It allowed
for a certain degree of freedom, whereas, had the company had fully
up-to-date equipment, it would have had more single -purpose ma-
chines in the house, and fewer that they could put immediately into
use for the new purpose.
iSee footnote 1, p. 8071.
NATIONAL DEFENSE MIGRATION 8083
This organization had to coordinate the tank program, which
meant to cover design, cover purchases and subcontracting. Among
the subcontractors were 12 concerns, any one of which was several
rimes larger than the parent company.
The Government was betting on the management, and that com-
pany spread the design. That is how the job was exploded. You
can't design in a lump. You have to design in detail. So, as the
job was developed, units were passed out to probable manufacturers,
and by the time the job was ready, the experimental or pilot model
was built, and the manufacturers had already made their produc-
tion studies. But at no time was a tank built completely by some
independent group, then burst into pieces, with someone saying,
"Here are the pieces. Who can make them?" Always somebody in
the industry was asked to master-mind the job as a whole.
That is the Government's way in England of bringing to its sup-
port the maximum of management and technical skill. They don't
have a whole army of production engineers in the ministry of sup-
ply. They have fairly good men as consultants, who also act as
carriers between one group and another, but the hard-hitting gentry
are stationed where the work is going on — which is important, and
which is where I believe they ought to be.
We must bear in mind that England is much smaller and more com-
pact than America, and they can follow these methods perhaps more
readily. But it did bring out this: That the business of building
a tank arsenal capable of building everything in the tank was
probably not the best way to do it ; because without explaining to you
how many tanks are being made per day, I can say that a small
company is able to engineer and manage the production of tanks.
Some of the buildings in which these tanks may be assembled
might be empty units of automobile-body makers. Floor space was
available but no bodies are being built; and by installation of the
proper types of hoists and cranes, tanks can be assembled there, using
a tremendous amount of line labor — the unskilled type. That is a
good practice on tanks. Does that cover the question you asked?
Mr. Curtis. Yes. In our hearing in Detroit, the automobile manu-
facturers maintained that the industry's productive equipment was by
and large not capable of adaptation to defense work. I was glaci
to learn that under the pressure of necessity they have in at least one
instance increased from 15-percent convertibility to 90-percent con-
vertibility. Do you know how much is being converted now?
Mr. Taub. It is moving to the 50 percent mark. It depends en-
tirely on how much work is being placed with the companies, rather
than on the facilities that could be used.
Mr. CuETis. Mr. Taub, can you describe what contribution such
civilian industries as stove manufacturers and refrigerator manu-
facturers, and the like could make to the manufacture of defense
products? To what extent are they now being utilized?
POOLING or FAClLniES
Mr. Taub. I can answer that question best by explaining to you
that at present I am working on a pooling arrangement, and that
I have spent time in three different places. In Toledo we were
able to gather, under the auspices of the chamber of commerce,
8084 WASHINGTON HEARINGS
representatives of some 400 metal ]na.niifactiirers. A committee was
formed to organize that group into pools. These pools have been
formed on the basis of some knowledge as to the tj^De of defense
work they can do, the reason being that while any one of the mem-
bers of the pool is usually tujrned down on defense contracts for
lack of equipment, in combination they are able to bid without re-
questing new equipment. That procedure has been developed in
Toledo to a point where pooled manufacturers have hired a produc-
tion engineer as general manager, and a permanent committee has
been set up to represent both labor and management. And they are
now knocking at our door, saying, "We are ready with our pools.
Where is the work?"
We have got to heed them. We are talking about large-scale pro-
duction, and the need for capacity. We have taken an entire city
area to find a j^attern, and we have one now in usable form. These
manufacturel's have now come in, and are trying to make contracts
for work. But evidently we are not setting up a procurement agency
to handle this type of contract.
But we have to go on with the project, of the building of these
pools, because that is the only way these stove and refrigerator
people such as j^ou mention can be used. We were able to point
out to one stove manufacturer in Detroit that the automotive in-
dustry is short of cast-iron parts — mainly pistons. The motorcar
manufacturers have had to substitute cast iron for aluminum because
cast iron was practically all that could be had. The stove manu-
facturer rushed back and tried to get his foot in the door.
We have been able to pick out a few such items for a few in-
dividuals, but to handle these jobs for groups as they are now grow-
ing in size, we have to reduce the problems involved.
Mr. Curtis. In the metal-working field, some plants have had to
close down because of priority allocations, and perhaps some of
these cannot be converted. We have had cited as an extreme ex-
ample a zij^per factory. Are there very many factories for which
there is no hopes of conversion or of participation in defense work?
FEW FACTORIES NONCON^'ERTIBLE
Mr. Taub. I don't think it is entirely hopeless for any large num-
ber. I am not going to say — and nobody else can — that we can
utilize all the 180,000 factories in this coimtry. But we are speak-
ing about the group far enough up the line that should be used
and that we can use.
Zipper-factory workers, after priorities have got through with
them, have only hands and fingers left; but they are still good
assemblers, and in all this defense work we need assembly. It is
not hard to imagine a zipper factory converted to assemble small
arms, if it were hooked in some way with a large organization
making the necessary parts. Aiid the same thing applies to larger
factories with facilities that cannot longer be used, and which are
to all intents and purposes just empty buildings. They, too, could
be put to work on asseml^lies. There are few defense items in which
assembly is not a very important item. We must bear that in mind
in the grouping of the pools. The chances of conversion are not
hopeless at all.
NATIONAL DEFENSE MIGRATION 8085
Mr. CuKTis. Isn't it true that, assuming it has adequate machinery,
there is no plant too small to make a distinct contribution ?
Mr. Taub. I would draw the line, particularly as you say a "distinct
contribution." A plant that employs 15 to 30 men might be used if
it is near an operating defense plant, but you could hardly expect it to
make a distinct contribution.
Mr. Curtis. Let's change the phrasing. Could it make some contri-
bution ?
Mr. Taub. That depends upon the nature of the plant. For the
majority of the extremely small plants — if we are now talking about
those in the 20-employee bracket — substitutes or allocations of material
would have to be arranged. A percentage of those materials would
have to be assigned to some of them, although it would be necessary
to carefully scrutinize it to be sure that substitutions could not be
made. A lot of them would be in such localities and so grouped that
you might not be able to use them.
Mr. Curtis. Take, for example, a concern that makes garage tools.
It is small, but it turns out several gross of a given tool a day.
Couldn't it likewise make simple braces that go on airplanes ?
Mr. Taub. Yes. A company capable of making several gross of
garage tools could very easily make machine-gun mounts, and I
wouldn't consider that a hopeless defense prospect. There are others,
however, making imitation jewelry, and that kind of thing, that just
haven't got the equipment. They can make "bits and pieces" for serv-
icing defense items.
But there are trades that don't fit in, that will be equally hurt. Those
will be the difficult people, and for them we must find substitutions.
The Chairman. Dr. Person, at the suggestion of Congressman
AVelch, of California, who is sitting to the right of Congressman
SjDarkman here, and who, though not a member of this committee, is
a highly respected Member of the House of Representatives, I would
like to ask you a question. Mr. Welch was very much interested in
your testimony and in finding out if you care to express yourself on a
situation that may affect the Rural Electrification Administration,
which you serve as a consulting economist. Under the national-
defense program there is going to be a drastic cut in the use of copper
by nondefense industries. What effect will that have, if any, on the
further electrification of farms and homes in this country ?
Dr. Person. All right, if this is off the record.
(Answer to question on effect, if any, of cut in use of copper on rural
electrification given off the record.)
The Chairman. Dr. Lamb ?
Dr. Lamb. I have a few^ questions that I would like to ask to round
out the record.
First, a general question, which I shall address to the panel without
specifying anj^ individual for an answer :
absorption or workers
How many additional workers do you believe could be absorbed by
the metal-working industries if these facilities were utilized on a
100-hour week as contrasted with the present 50-hour week?
Mr. Henry. Assuming they still work the same number of hours per
week, the answer is just twice as many. I think if you go to the Bureau
gQgg WASHINGTON HEARINGS
of Labor Statistics, you can get a pretty accurate estimate of the actual
number of metal workers employed in the industry, and a fairly accu-
rate estimate of the number of working hours. If you multiply the
total present employment by the ratio of machine hours per week that
should be worked — 100 — to the average hours that are actually
worked — 50 — that will give you the figure for the number of metal-
workers who could be employed.
Mr. Tahb. I would like to interject a thought there. If you pro-
pose by any means at all to multiply the number of men engaged in
the metal businesses that are going now as a whole, and if by good
fortune we are able to bring into the band of usefulness all these others
the question then arises, as it has in England's defense work at the
present time : Where are you going to get the men ?
Dr. Lamb. That was my next question. Are our present approaches
to training adequate to build a labor supply capable of manning our
industries efficiently, granted that we can utilize our existing facilities
on an average of 75 to 100 hours a week ? Would you like to answer
that, Mr. Taub ? That question has two parts, one with reference par-
ticularly to the metalworking industry.
Mr. Taub. I don't think that training is going along at a very satis-
factory rate. It is training which lifts one type of workman to an-
other level, but when you are thinking of an all-out defense effort, you
are thinking of drawing men from other walks of life, so that you will
have enough to man the defense effort. No ; there isn't a possibility of
training enough of such men to meet the need that would be created by
pressing plants to a hundred hours a week, plus all of those metal-
working plants that should be used.
Dr. Lamb. In other words, the proposals which have been made here
by the panel this morning, on the basis of machine capacity and its
full utilization, will be limited by the shortage of adequately trained
labor, particularly in the metalworking industries?
Mr. Taub. Yes, sir.
Dr. Lamb. How is that problem to be overcome, assuming that all
other factors as described here are capable of such an expansion ?
Mr. Taub. The end, problem is to produce X number of defense
units, and you discover that you can do that by working a hundred
hours a week in every plant in the country. But you are assuming that
for your defense needs the X number of defense units will be so
large that this country cannot handle them. I don't think that is
even barely possible.
Dr. Lamb. You would say, then, that in spite of the probable increase
of the defense orders from a present $30,000,000,000 to, let us say,
$120,000,000,000, the existing and easily trainable labor force, plus the
existing metal-working capacity, can turn out the job?
Mr. Taub. Yes, sir.
Dr. Lamb. That is a very encouraging prospect.
TIME ELEMENT
Mr. Taub. You must bear in mind that a large percentage of this
money goes for fairly large units, and you have not introduced the
time element. If somebody suddenly telescoped the program, and
said that everything must be finished by 1942, then you would have a
problem indeed.
NATIONAL DEFENSE MIGRATION 8087
Dr. Lamb. Isn't that assumed? The committee has gone around
the country, and we have been informed that the number of contracts
which are standing in line, so to speak, at a given plant, add up in
some instances to 2 or 3 years' backlog. Clearly a program of
$30,000,000,000, in those time-terms, is for all military and imme-
diately practical purposes meaningless. The possibility of utilizing
those materials for any early defense objectives is nil. I don't mean
all materials, but the bulk of them.
Mr. Taub. I understand what you are driving at, sir, and I appre-
ciate that thought very, very keenly; but at the same time, you
couldn't build the warships you have on schedule through the year
1942. That is the thing I have been talking about.
Dr. Lamb. Granted the impossibility of expecting an expansion on
any such scale as would bring newly contracted battleships into
effective use in 12 months' time, still we have been talking in terms
of metalworking capacity for guides in discovering what an indi-
vidual worker can be expected to roll off the line in 30, 60, or 90 days.
Mr. Taub. That can be handled. We have not begun to scratch the
capacity of normal working, without a 100-hour week.
Dr. Lamb. Even though those contracts are also standing in line,
as I understand they are at the present time?
Mr. Taub. Shipbuilding may be standing in line — some of the
larger ships. Some of the smaller ships can be handled as Mr. Ford
did the eagle ships in the last war. That can be planned. But,
gentlemen, we haven't begun to use even the eight or nine major
motorcar companies, whom we criticize so severely. And behind
them are hundreds and hundreds of other plants.
Dr. Lamb. Would you attribute that failure to utilize the auto-
motive capacity to a failure to give those companies contracts?
Mr. Taub. That is right, sir.
Dr. Lamb. Which. I take it, gets back to the contention of Dr.
Person that the failure to utilize capacity, and incidentally to let
contracts, traces to the lack of an over-all plan into which such
contract-letting fits.
legal handicaps for army and navy
Mr. Taub. Yes; I think that is true. But I would like to underline
here that while everybody is taking a whack at the Army — and I
also have had some sour experiences with the Army — nevertheless.
Army procurement officers are only the front ; and my experience with
them is that they are limited by the law of the land and also by the
rules of their departments.
The Navy has one set of rules, that do not agree with the Army's
rules, the Army's being broader. We do whack at procurement
agencies, but I think if we look behind them, we would find that ap-
propriations and the legal side of the picture are the two major
drawbacks.
It is all right to talk about planning ahead. Say that we planned
a year ago to spend $120,000,000,000. If we had the same ideas we
had at that time, we would be in an awful state, because we would
hav& built a lot of new buildings, the same as we did in the original
j[)Janning, and we would be worse off.
60396— 41— pt. 20 6
gQ§§ WASHINGTON HEARINGS
Dr. Lamb. I don't think the interest of the committee is in retro-
spective considerations, of what might have been, but rather in the
discovery of what can be done from this point out to remove impedi-
ments in the way of defense production, such as have been pointed
out by the members of this paneL
Mr. Taub. May I give a specific example of what might be done ? At
the moment the Army needs trucks. It is not ordering trucks on the
broadest scale possible. It is getting along with the fewest it can
safely order. That is the truck program today. There will be a con-
tinuation of the truck program into next year. By next year a
large part of the potential truck-making facilities will have been taken
up with i^rograms now in preparation, and the procurement of more
trucks is going to be difficult. We are now running into a lull. Why
can't we take next year's truck business and throw it into this year,
fill in the lull, and not have the headache of trying to get them when
they will not be available ?
i)r. Lamb. Why can't we?
Mr. Taub. Wliy can't we?
NEED FOR OVER-ALL PLANNING
Dr. Lamb. If I understand Dr. Person correctly, it is his contention
that without an over-all plan, you are bound to have lulls. Lulls can-
not be tolerated in an adequately operating over-all plan. Is that
correct, Dr. Person?
Dr. Person. Correct.
Mr. Taub. Whether we can form one over-all plan and make that
suffice is uncertain. We know that in England there is much planning,
and we have heard England's methods praised; but working from
the inside, we found much that deserved no praise. They have had
a new minister of supply every 5 or 6 months. They have had more
shake-ups in England than even we have had here. So, what looks
good from here is not quite so good at close range.
Whether or not one plan, no matter how good or how comprehensive,
would be satisfactory, I don't know. I do know this, that it would help
if we had at least one financial plan, if we Imew that there would be
enough money available to cover a large plan. It seems to me we
already know that the war is going to cost at least so much, and that
much should be provided. When the Army comes in and says, "We
want this list of stuff," it should not have to scale down whenever
the nonmilitary people say: "You can get along without this and
that." I do not think encouragement to spending should be the
order of the day, but discouragement to spending for this purpose
shouldn't be the order of the day either.
However, I think that laying down an over-all plan burdened with
details as to what materials we are going to use is dangerous. We are
then freezing our designs. We know by bitter experience that these
fellows who are setting the pace keep changing the rules, and we'd
like to have the ability to change our products. An over-all plan
in detail might interfere with that.
Dr. Lamb. I would like to amend the phrase, "an over-all plan,"
because I am not sure that it is an adequate term for what Dr.
Person had in mind. I would say that his statement, as I read it,
comes closer to being a description of two things: One, a series of
NATIONAL DEFENSE MIGRATION 8089
control policies which are closely integrated in their operations, so
that there is a large degree of understanding governing them, not
only as to the division of functions, but also as to the degree of co-
operation required; and, second, as I understand Dr. Person, some-
thing approaching a flow-sheet of operations, and of the supply of
materials backward, in the opposite direction from the orders and
directives in process of development.
Those two related items are necessary, and I would like to have
him correct me if I am misstating him as to his plan.
Dr. Person, That is right. We have got one job to do in the
United States, on a national scale, and that is the formulation of
one over-all plan which fans out maybe into a hundred different
levels of planning. Now, the main point is that every one of these
hundred constituent plansi must head up into the one, and not be left
to the judgment, the vision, or the interests of a hundred different
agencies.
SUBCONTRACTING AND DECENTRALIZATION
Dr. Lamb. In summarizing the committee's interest in the matters
which have been discussed here today I would like to point out that
the committee has been particularly interested in the possibilities
of subcontracting, and incidentally — although the two are not iden-
tical— in decentralization. The interest in these possibilities is based
on the opportunity which they afford for a more adequate employ-
ment, not only of our materials and facilities, but particularly — and
this is a primary concern of the committee — employment of man-
power.
Excessive shifting about of population will, probably in the end
have to be repeated in the opposite direction at some future date. In
other words, migration toward already overcrowded defense centers
must be followed by a round-trip migration of those people back to
the places where they came from, with no assurance that when they
return to these points of origin they will be able to find jobs or
assistance.
An improvement in the use of materials and manpower now would
in large measure obviate the necessity for such excessive movement
of workers in the filling of defense needs. Therefore, one of the
questions which emerges from this discussion and which I should
like to raise with the panel before closing it, is that of subcon-
tracting.
I want to make a distinction at the outset, however, between what
might be called in-bred subcontracting — that is, the practice of a
large corporation or group of corporations of letting subcontracts
to its subsidiaries or affiliates — and subcontracting among dissociated
companies and individual plants. The intracorporate type of sub-
contracting serves useful purposes, but it is not in line with the
discussion we have had this morning of decentralization or contract-
ing out to uncoordinated firms and facilities.
Now, the committee has heard that the outward-directed type of
subcontract is being avoided because, so it has been informed, of
the headaches and extra cost involved. For instance, the work of
the subcontractor must be redone on occasion.
What the committee is concerned with is how far this attitude
exists among manufacturers, and to wliat extent it acts as a barrier
g()90 WASHINGTON HEARINGS
to exactly those procedures which this panel has advocated this
morning. We would like to hear any one of you who cares to address
himself to that problem.
Mr. CooKE. I would like to say that we have had, from a great
many people from the President on down, statements favoring what
I call "farming out," which is an emergency type of subcontracting.
But, personally, I haven't been able to find a single instance in
the Government service where the man who could really do it has
done it. Now, doubtless there have been occasions, but the preju
dice n.oainst it is so strong that I think even this committee would
have difficulty in finding instances of its actually having taken place.
SUBCONTRACTING ENCOURAGED
Mr. Taub. I would have to disagree with that. I haven't had
any experience other than full cooperation on subcontracting, and
I have heard the Army men encourage stipulation of subcontracts
wherever possible. In one instance, a firm holding a contract for
one of the automatic guns — a 20-millimeter — is making 3 percent of
the parts and farming out 97 percent. That was cited to me as an
illustration of how well it could be done.
Perhaps, before my time here, there may have been the situation
Mr. Cooke describes. Mr. Cooke has been here longer than I have.
He has perhaps had a different experience; but from my own in
the contract-distribution group in O. P. M. and the Army, I must
say that they all seem to be highly cooperative. To give you con-
crete examples of what they have done is difficult because the situa-
tion still seems to be in a state of flux.
Dr. Lamb. From this committee's experience, in going around the
country, I think it would be correct to say that there are many
professions of sympathy with the subcontracting procedure, and a
good many instances of subcontracting of the kind that I described
earlier, subcontracting among already affiliated companies. They
may not be tied by actually overlapping stock ownership or inter-
locking directorates, but through operating and trade practices of
long standing. There is no particular difficulty about those sub-
contracts, and in fact many large-scale manufacturers have advo-
cated to the committee the piling on of orders so there would be
more of them. I take it that the opinion of the panel this morn-
ing would be that that is not enough, granted that it is necessary
to accomplish what has been advocated here, of bringing everybody
into the job; and if that is the case, the problem that the com-
mittee still would need to raise is, how are you going to get it? Is
it through contract clearing centers? Is it through pools? How are
you going to get this mass distribution of contracts and subcontracts
on a scale which will enlist all the available capacity and man-
power ?
IMPORTANCE OF ORGANIZED CONTRACT DISTRIBUTION
Mr. Taub. It seems to me that if Mr. Odium's department is
going to live up to what has been said about it in the neAvspapers,
you certainly ought to have an organization big enough to offer the
United States an adequate mechanism for distribution of contracts.
NATIONAL DEFENSE MIGRATION 8091
Assume now that they, or we — if they don't do it, we will — prepare
the field to accept those contracts. If you have a large number of
concerns in the field which, because they are shy a machine or so,
are not able to accept the contract, then you just can't bring the two
together; but if the contract distribution agency intelligently organ-
izes individual companies into usable groups, then as defense con-
tracts go into the field, thej'^ will find groups there waiting for work.
That is exactly what will occur, from the standpoint of organizing
the groups; but what will happen to the business of organizing the
distribution of contracts is something else.
Dr. Lamb. I would like to ask Dr. Person in this connection
whether, in his opinion, what is lacking is an active rather than
a passive approach to the situation which you are describing.
Granted that there is a passive situation such as, for example, the
getting up and authorizing of Mr. Odium's division, and the starting
of trains around the country with certain bits and pieces laid out for
the manufacturers, is something more in the way of activity required,
Dr. Person, in order to make effective the set-up Mr. Taub has
mentioned ?
Dr. Person. You have the same perception of the answer that I have.
Dr. Lamb — as revealed by the form of your question. It strikes me
that it is a problem of aggressive, organized arrangement of the mat-
ter, as against casualism.
Now, in my main statement I made the suggestion that there should
be a comprehensive organization of an engineering nature to plan and
carry through the prime contracting. That is all that was implied in
the statement; but between the lines, it should have carried with it the
suggestion to carry clear through to subcontracting.
As I understand it, prime contractors don't hesitate to let subcon-
tracts to other well-known and highly respected concerns of the same
type. But the hesitancy is in reaching out and subcontracting to the
numerous small, less well-known, and probably less efficiently man-
aged concerns. Those are the ones that they have in mind when they
say the trouble is that you have to do the work over. It strikes me
that, just as there should be from the center in Washington an aggres-
sive, dynamic reaching out of engineering ability and organization im-
mediately to the prime contractor, this should carry on through by
aiding the prime contractor to organize, on a lesser but adequate scale,
a reaching down through to their subcontractors of the class that I am
just now talking about. In other words, the planning rule of the prime
contractor should be to plan for the subcontractors, and it should be in
intimate contact with the planning going on in the subcontracting
establishment; and, of course, good planning of the prime contractor
carries with it precise and adequate specifications, and all the technical
information necessary to do the job right, and there isn't left a large
area of instructions. It could be covered by the word "need." If this
primary consideration of adequate specification and instructions to the
last detail by the prime contractor to the subcontractor has been taken
care of, then planning by the prime contractor should emlbrace the
planning going on in the subcontractor's concern. That is the way
thousands of small enterprises can be brought into the orbit of effective
defense preparedness.
Mr. Henry. To carry out specifically what Dr. Person said: Of
three concerns in one type of machine tooling — without mentioning
gQ92 WASHINGTON HEARINGS
any names — two have national reputations and have done the job of
subcontracting just exactly as you have said. They have taken many
small concerns and educated them to make pretty close tolerance.
The third concern, making the same type, has done no subcontracting.
It has bought motors, but not done any subcontracting. They are
all three competitive. But one has the wrong attitude. Commer-
cially, it may be the right attitude, but he has done no subcontracting,
and the other two have done a complete job of subcontracting. It
is very important to understand not only the attitude in Washington,
but also what the views are in the field. Do they want to subcon-
tract?
CENTRAL SUBCONTRACTING SYSTEM ADVOCATED
Mr. Cooke. Let us assume that there are already eight concerns han-
dling the M3 tank contracts. There isn't any doubt in my mind that
those eight concerns ought to set up some sort of organization by
which each has an assignment, and one of the essential parts of such
a work would be to handle all the subcontracting. Otherwise these
eight concerns go out on their own with various degrees of fancy sub-
contracting, and the small man who wants to get in has to contact
each concern. A central subcontracting system for all eight would
work much better. That would be one way in which, on that very
extensive tank program, you would be able to expedite your subcon-
tracting.
Mr. Taub. That has been done. They are getting together so
there will be less duplication of effort, and whoever happens to have
facilities will be making parts for everyone interested. The scope
of this will grow.
Dr. Lamb. In other words, if you were accepting bids on a given
part, you would open that bidding to all the companies capable of
making that part, which may be, at some time in the evolution of
this plan, deliverable alternatively to any of these manufacturers.
Mr. Taub. That is right.
Mr. CooKE. According to the instructions.
Dr. Person. I would like to make another observation, if I may.
I notice that Congressman Curtis, in some of his questions, showed
a very great interest in the little plants, and their possible disad-
vantage in the matter of equipment, in comparison with larger plants.
The following circumstance will throw some light on that : During
the first World War, some of the largest brass concerns in New
England were equipped with very up-to-date machinery, and in in-
stalling it they sold their more or less obsolete equipment where they
could in an open salvage market. This older equipment was bought
up by a lot of concerns which began making little bits of things.
Tney were plants employing 5 to 15 workers, and were set up around
the New England States. After the war was over and the market
of the brass manufacturers had disappeared, there was a period of
8 or 9 years during which all those big concerns got along in the
black in the production of big stuff like pipes and valves, but they
were in the red all that time in their manufacture of spun brass and
shell brass. The big firms couldn't compete with the little fellows
to whom they had sold their old equipment.
This simply shows that equipment isn't all that enters into the cal-
culations. One hundred percent good management and 90 percent
NATIONAL DEFENSE MIGRATION 8093
efficiency may go further than 100 percent efficient equipment and
90 percent good management.
There are other factors that matter, and I think we could rely on any
comprehensive scheme which provided for the development of a very
considerable amount of capacity and efficiency among these finger-
tips of concerns that exist all over the country.
(At this point, at the panel's request, testimony in answer
to a question by Congressman Welch was given off the
record. Subsequent to the hearing, permission was obtained
from CongTessman Welch and the members of the panel to
include a summary of relevant details of the testimony;
and, members of the committee concurring, the following
summary is made a part of the record :
(Congressman Welch asked what the opinion of the panel
was on Mr. Odium's recent statement that more than 20,000
small firms would probably be forced out of business as a
result of the defense program.
(Mr. Taub indicated that it would probably prove to be
true, considering the effect of the civilian production alloca-
tion programs on many small businesses and the slowness
and difficulties connected with giving them contracts,
(Dr. Person pointed out that many small firms had very
capable managements, and that, furthermore, there were very
few small companies that coulcl not make some positive con-
tribution to the defense effort.
(Mr. Taub agreed with Dr. Person's statement, but em-
phasized the importance of incorporating the largest indus-
trial facilities into the program first, if defense production
was to be maximized. Keferring specifically to the facilities
of the eight automobile companies, he pointed out that these
were not being fully utilized and that there are some 5,000
other large establishments, most of which are in a similar
situation. Behind these there are 40,000 medium-sized estab-
lishments, he added, that should be put to work before the
program could reach the 135,000 small establishments.— Ed.)
The Chairman. This discussion has been highly interesting to the
committee, and you have given us a very valuable contribution,
gentlemen. The committee stands adjourned until tomorrow morn-
ing.
Engineers' Panel Exhibit A — Summary of Program for Speeding
Defense Effort and Reducing Unemployment and Migration
(Subsequent to the hearing the following letter was received by
the chairman :)
Office of Production Management,
Washington, D. C, November 5, 19A1.
Hon. J. H. ToLAN,
Chairman, House Committee Investigating Defense Migration,
Washington, D. C.
My Deab Mr. Chairman: In answer to your request we band you herewith
a memorandum covering points to be observed in any program for the speeding
up and improvement of defense efforts and as a means of reducing unemploy-
3094 WASHINGTON HEARINGS
ment and migration. It is a brief joint summary of the main points in the
testimony given by our panel at your hearing on October 28. You understand
that we speak only as individual technicians and without any right or authoriza-
tion to represent anybody but ourselves.
Trusting that it may be of some assistance to you in the prosecution of your
important task and with best regards, we are
Yours very sincerely,
(Signed) Morris L. Cooke.
S. T. Henry.
H. S. Person.
Alex Taub.
(The following letter of acknowledgment was sent to each of the
signers of the above letter:)
November 18, 1941.
Dear Mr. : This is to acknowledge receipt of the joint statement
prepared by yourself and your colleagues following your testimony before this
committee on October 28.
It is indeed gratifying to us that you and your colleagues were able to agree
on these points as a result of your testimony and mutual exchange of views
before our committee.
With all good wishes, I am,
Sincerely yours,
John H. Tolan, Chairman.
(The memorandum referred to in the joint letter above is made a
part of the record in accordance with instructions from the chairman.
It is as follows :)
Points To Be Obsejrved in Any Comprehensive De^iensb Production Program
drafted for select (committee investigating national defense migration by
morris L. COOKE, S. T. HENRY, H. S. PERSON, AND ALEX TAtTB
1. The developing defense situation calls for a vastly increased production
that will be a heavy load on industry for several years. This will call for all
the genius and capacity which the United States possesses.
2. The situation is a challenge to Government and to industry effectively to
organize total capacity and provide essential materials.
3. In thus meeting the major problem defense unemployment and defense
migration will largely disappear.
4. The first step toward increase of production is for prime and subcontractors
to increase their output and make earlier deliveries by working their machines
more hours per week. They are tooled up and their operations are organized.
This would immediately increase employment.
5. A second step that offers the largest unrealized possibilities for a quick
increase in production is the farming out of defense work to plants not fully
occupied. It is best to bring the maximum of work to existing facilities before
moving machines or creating new plant.
6. It is a responsibility of Government to make those necessary arrangements
beyond the capacity of individual plants to make for themselves.
7. Farming out, or emergency subcontracting, is always a two-way process.
Manufacturers, no matter how small, must make their capacities known and
go after orders. Procurement agencies and prime contractors must make their
requii'ements known through offering of definite orders.
8. Procurement should include the maintenance of comprehensive schedules
of things to be bought, i. e., a shopping list. Especially the larger items of
materiel — tanks, airplanes, antiaircraft guns — can be broken up into their sub-
assemblies and parts, thus making parts manufacture possible for even the
smallest plants.
9. By pooling the complementary metal working facilities of small manu-
facturers located within manageable geographical range it is possible to execute
many contracts that are not feasible for small individual plants.
NATIONAL DEFENSE MIGRATION 8095
10. To balance the requirements of metal working plants having on hand
work to be done with others asking for work to do, exchanges, or capacity
centers, should be set up in all manufacturing areas following patterns in
successful operation at home and abroad.
11. At all levels of procurement, military personnel conversant with details
of design and use of defense materials should be supplemented by civilian
production engineers conversant with production organization and follow-up
procedures. Together they should increase both volume and tempo of production
by routinizing follow-up procedures so as to ensure and even advance delivery
dates. The Government must assume the responsibility for initiative not only
in placing orders but also in scheduling and expediting operations.
12. It is urgent there should be established within the civilian defense
organization a section manned by production engineers of major experience and
competence whose functions shall be to develop procedures for —
(a) Maintaining a classified inventory of facilities,
(6) Maintaining a classified inventory of requirements,
(c) Keeping records of balances in detail of requirements and facilities,
(d) Establishment of standard practices in procurement, production organi-
zation, and production follow-up, and
(e) Promotion of that adjustment of national facilities to requirements
necessary for speedy increase in the volume and tempo of defense production.
13. Any production program is necessarily contingent on the materials supply.
We should plan immediately to increase the production or importation of any
materials of which the supply is inadequate. Price ceilings should be raised
where this is necessary to get results.
14. A labor supply adequate for a vastly increased defense-production pro-
gram can be made available through extensions in current training programs.
The supply may further be extended through the employment of women. The
hours worked by individuals can in many cases be lengthened.
15. From the owner-management of the 135,000 small plants of the country may
be recruited much of the supervisory staff necessary to handle the expanded labor
forces of the larger defense organization.
16. As one illustration of the theme of all these suggestions and because of its
urgency, special efforts should be made to have as many shipbuilding requirements
as possible fabricated outside of the yards. Through subcontracting such work
should be scattered as widely as possible.
17. In the meantime:
(a) All contracts which call for deliveries after July 1, 1942, should be reviewed
with a view to advancing delivery dates and thereby affording additional imme-
diate employment. Some of these contracts may advantageously be renegotiated.
(b) Any orders for new machinery and equipment must be very closely scru-
tinized. None should be placed where machines that are idle or that might be
rebuilt could be used instead.
(c) Surveys of our total requirements for defense now in progress should be
hurried to their earliest possible completion.
Engineers' Panel Exhibit B — Employment in Metalworking In-
dustries AND Utilization of Plant Facilities
material submitted by a. e. hinrichs, acting commissioner. bureau of labor
statistics, united states department of labor, washington, d. o.
October 30, 1941.
Mr. A. F. HiNRiCHS.
Acting Commissioner, Bureau of Labor Statistics,
Washington, D. C.
Dear Mr. Hinrichs: At a hearing before this committee in Washington oft
October 28, Mr. Morris L. Cooke referred to a series of reports of the Bureau
of Labor Statistics on Utilization of Plant Facilities in Selected Manufacturing
Industries Under the National Defense Program, which he indicated showed that
70 percent of the employees were on the first shift.
Another witness before our committee, Mr. S. T. Henry, indicated a basis for
estimating increased employment which could be furnished by the metal working
3096 WASHINGTON HEARINGS
industries if the Bureau of Labor Statistics would be able to furnish us estimates
of employment at present and recently provided for by the metal working
industries. The particular metal working industries Mr. Henry referred to
included manufacturers of machinery as well as manufacturers of various finished
and semifinished fabricated metal products (including for example, refrigerators,
transportation equipment, ferrous and nonferrous castings, stampings, etc.).
In order to complete our record of Mr. Cooke's and Mr. Henry's testimonies,
could you please furnish the committee with the complete series referred to by
Mr. Cooke as well as the estimates of employment by the metal working
industries indicated by Mr. S. T. Henry.
In connection with our record of this Washington hearing we are also interested
in obtaining estimates of the absolute number employed in each of the major
industrial groups, broken down wherever possible into defense and nondefense
employment. Could you also submit to us data showing recent employment trends
on an absolute basis in each of the principal durable consumers' goods industries
and other industries such as rubber and silk manufacturers which have been
or are expected to be curtailed because of the defense program. We are inter-
ested in annual averages for the years 1937-40 and monthly figures for the years
1940 and 1941. Would it be possible for you to furnish us with this material by
November 7?
May I again express our appreciation of the excellent work and cooperation of
your Bureau.
With all good wishes, I am
Sincerely,
John H. Tolan, Chairmcm.
Depaetment of Labor,
BuitEAU of Labor Statistics,
Washington, Novemher 18, lOJfl.
Hon. John H. Tolan,
House Committee Investigating Natio7ial Defense Migration,
Washington, D. G.
My Dear Mr. Tolan : I am enclosing the basic data which you requested in
your letter of October 30. The attached table presents annual employment
averages for 1937^0 and monthly averages for 1940 to date in the metal-work-
ing industries and selected consumer goods industries as well as the major
components of nonagricultural employment.
In connection with your request for an employment break-down between
defense and nondefense for the major industrial groups, I regret that it has
not proved feasible on the basis of present data to prepare such estimates.
On an over-all basis the Bureau of Labor Statistics has estimated that defense
employment averaged 2,700,000 nonagricultural employees in the second quarter
of 1941, and 3,400,000 in the third quarter of this year. The estimates include
employment at all stages of production, exclusive of agriculture, and represent
employment required to produce defense output over and above the current
volume of nondefense output in the second and third quarters of 1941.
I am also forwarding the reports on utilization of plant facilities that you
requested. If the Bureau can be of further assistance to you, please do not
hesitate to call upon us.
Cordially yours,
A. F. Hinrichs,
Acting Commissioner of Labor Statistics.
(The material referred to above is as follows:)
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CD Tji '^ Tj* CO CS CO Tt< CO C^l -^ '^
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t-tO'^'i^-n^OtOr-i^l^.OOCOCOl^
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as
:&5
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rr ;j r^ O ^^
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bt 03 G - - .,,
8102
WASHINGTON HEARINGS
Estimated num'ber of wage earners in 18 defense industries by months, June
1940 to September 1941, inclusive
Industry
Blast furnaces, steel works, and rolling
millsi
Foundry and machine-shop products '
Electrico.l machinery, apparatus, and
supplies '
Smelting and refining— copper, lead,
and zinc i _._
Brass, bronze, and copper products '..
Aluminum manufactures 2
Machine tools '
Abrasives 2
Machine-tool accessories '
Screw-machine products 2
Aircraft ?._
Shipbuilding •
Optical goods 2
Instruments 2___ .,
4 additional industries ^ ^ _
Total, 18 selected defense indus-
tries
1940
June
464, 500
385, 2n0
220, 700
29. 600
82. 700
27, 900
64, 800
8,900
33, 900
19, .500
81, 600
88, 600
13, 700
20, 100
44, 900
1, 595, 600
.Tuly
August
483, 600
389, 600
230, 900
30, 200
84, 400
28, 500
66, 400
8,600
35, 200
19, 600
88, 100
92, 600
13,000
20, 500
48, 800
1, 640, 000
436, 200
399, 500
237, 100
31. 000
90,000
29, 900
67, 200
9,200
34, 900
20, 800
97, 400
98, 500
13, 600
21, 100
52, 600
1, 699, 000
Septem-
ber
500. 700
411,000
2^17, 300
31, 300
95. 400
30, 700
70, 200
9,800
34, 700
21, 900
105, 400
102, 300
13, 900
21, 900
56, 200
Octo
ber
508, 800
424, 100
258,200
32, 100
100, 800
32, 100
73, 000
10, 100
35, 700
23, 000
115,200
107, 400
14, 400
23, 400
59, 500
1, 817, 800
Novem-
ber
517. 300
437, 600
268, 200
32, 100
105, 'OC
33, 300
75, 200
10, 700
37. 400
24, 100
123, 300
111,000
15, 100
24, 800
62, 500
1, 878, 300
Decem-
ber
526, 300
453,500
279,800
32,800
109, 400
33, 400
78, 100
11, 100
39,900
2.5, 300
131, 200
120,200
15, 700
26,100
65,700
1, 948, 500
Industry
Blast furnaces, stee! works,
and rolling mills '
Foundry and machine shop
products' -.- -
Electrical machinery, ap-
paratus and supplies '
Smelting and refining — cop-
per, lead, and zinc '_-
Brass, bronze, and copper
products '
Aluminum manufactures '--
Machiae tools '
Abrasives 2
Machme-tool accessories 2. _ _
Screw-machine products 2...
Aircraft 2
Shipbuilding! .
Optical goods 2
Instruments 2
4 additional industries 2 3
Total, 18 selected de-
fense industries
Janu-
ary
533, 600
466, 700
28/, 800
33. 290
111,600
34, 500
80, 900
11, 600
42. 300
26. 500
141, 100
130. 700
16, 000
26, 200
71. 000
Febru-
ary
2,013,700
541, 700
477, 000
303, 400
33, 800
114,500
34, 500
84. 100
12, 000
45, fiOO
28, 300
149, 600
139, 600
16. 700
27, 000
77, 000
2,084,800
March
548, 600
491, .300
314, 700
34, 100
117,500
34, 300
86. 900
12, 600
48, 200
29, 300
155,800
148. 200
17,400
28. 500
81, 200
2,148,600
April
558, 400
516, 800
329, 600
31, 000
118,800
35, 300
89, GOO
13, 200
50. 700
30. 200
166. 000
160. 700
18, 100
29, 900
86, COO
2,235,300
May
571, 400
536, 200
342, 500
34, 500
120,000
8J, 700
92, 700
13, 600
53.200
31, 200
176, 500,
168, 700'
18, 600
21, 100
93, 100
2,319,000
June
585, 200
5f 2, 900
34, .'^O
123, 200
35, 100
95, 800
13,900
55,900
32, 300
ISS. 500
183, 800
19,200
32, 800
101, 600
2,407,900
July
598,200
566, 800
364, 300
34, 800
123, 500
36, 000
97. 900
14, 100
57, 700
33. 400
203, 800
204, 200
19, 500
34. 000
110,900
August
605,900
578, 800
372, 300
35, 100
125, 000
36 900
99, 500
14, 400
59, 800
33, SOO
222, 900
211.200
20, 100
35. 400
118,500
2 409,100 2,570,200
Septem-
ber
605,100
584, 300
375, 200
34,900
126, 900
37, 600
100. 900
14,700
61, 000
34, 300
240, 000
23:-, 100
20,200
35, .500
126, 900
2,636,600
1 Adjusted to 1937 Census of Manufactures levels.
2 Adjusted to 1939 Census of Manufactures levels.
' Aero engmes, firearms, ammunition, and explosives.
Prepared by: Bureau of Labor Statistics, Division of Employment Statistics.
Utilization of Plant Facilitiks in Selected Manufactueixg. Industries Under
THE National Defense Pbogram '
KEPORT BY EMPLOYMEJS^T AND OCCUPATIONAL RRANCH, EUEE^VU OF LABOR STATISTICS,
united states department of labor, washington, d. 0.
June 1941.
The tempo of defen.se production has been sharply accelerated during recent
months through the extension of multiple-shift operations and increased use of
Excerpted.
NATIONAL DEFENSE MIGRATION 8103
overtime. Many concerns which under normal peacetime conditions operated
their plants only one shift per day, 5 or 5Mj days per weeli, according to an
investigation recently made by the Bureau of Labor Statistics, have extended
their operations to tvpo and three shifts per day, 6 or 7 days per week. Except
in continuous process industries, however, there are only a few establishments
that operate the plant continuously with four 44-hour shifts. * * *
Multiple-shift operating schedules were predominant in all of the industries
covered during June 1941. Thei-e were only 76 of the 935 reporting establish-
ments which were operating exclusively on one shift per day. These were prin-
cipally smaller establishments and together account for only 1 percent of all
the workers covered. In the blast furnaces, steel works, and rolling mills ; chem-
icals; and smelting and refining industries, continuous manufacturing processes
are used and virtually all of the plants operate three shifts per day, 7 days per
week. JMost of these plants have four shifts of workers which are rotated in
order to keep the plant in operation continuously three shifts per day, without
lengthening the hours of the individual worker. Average hours worked per
wage earner in these industries, therefore, are around the 40-per-week level.
In machine tools and machine-tool accessories, inability to secure sufficient num-
bers of skilled workers resulted in many plants operating two long shifts in
preference to three shifts per day. In this industry, many two-shift plants
are operating in excess of 20 hours per day, thereby necessitating an average
of from 14 to 15 hours of overtime per week for each worker.
Considerable variation appears among industries in the extent to which extra
shifts were staffed. The largest percentage of employees on other than the
day shift occurs in blast furnaces, steel works, and rolling mills, where 47 percent
of the wage earners were' emp'oyed on evening or night shifts. By contrast,
in the industries manufacturing railway cars, locomotives, electrical machinery
and equipment, in private shipyards and in chemical plants, less than 30 percent
of all the workers were on extra-shift work.
Some qualifications must be kept in mind with respect to the use of employ-
ment by shifts ."^-S an indication of the degree to which plant capacity is actually
used. Except in unusual instances we should not expect to find an equal divi-
sion of workers employed on all shifts. For example, in steel mills operating
continuously at full capacity, three shifts per day, half of the total plant force
is usually occupied on the day shift. This large proportion of workers on the
fiirst shift is explained by reason of work supplementary to basic production, such
as repairs, maintenance, and unloading materials. A'so it may be the case that
the operations of finishing departments are governed by the production of ingots
and therefore may not be required to operate three full shifts to handle the entire
ingot output. In steel, the fact that second and third shifts do not have as many
workers as are on the first shift, is not to be interpreted as meaning that output
could be increased significantly unless ingot production could he expanded to the
point where finishing departments could operate three full shifts.
In machine-tool plants, assembly departments are geared to the output of
machine departments, and, in many instances, need not operate more than one
shift per day until machine departments are expanded. Mnny plants in this
industry have expanded their over-all capacity by subcontracting parts of their
machine work.
In private shipyards, over three-fourths of all the workers are employed on the
day shift. According to comments from many reporting firms in this industry,
the extensioji of night work beyond that done under cover is questionable as
the lack of satisfactory lighting lowers efficiency and increases the danger of
accidents. In some shipyards, however, substantial numbers of workers were
employed on evening and night shifts.
Despite difficulties such as those mentioned above, there undoubtedly exist wide-
spread opportunities to increase defense production through fuller utilization of
present plant facilities on senond and third shifts. Two urograms which will help
toward this goal are: (1) Widespread training to develop an adenuate supply of
skilled workers, and (2) more subcontracting, particularly of items creating
bottlenecks in plants with unbalanced production.
60396 — 41 — pt. 20 7
8104
WASHINGTON HEARINGS
Table 1. — Distribution of employment by shift in selected plants by industry,
June 1941 1
Industry
Number
of plants
Total en
ployment
Percentage distribution
of employment by shift
Number
Percent
of total
First
shift
Second
shift
Third
shift
Total --- - -
935
1,312,498
100.0
64.2
22.7
13.1
Plants operating 1 shift
76
217
642
14,390
149.814
1,148,294
1.1
11.4
87.5
1.1
9.2
53 9
Plants operating 2 shifts
2.2
20.5
Plants operating 3 shifts . ...
13 1
22
15,474
100.0
64.9
22.2
12 9
Plants operating 1 shift
3
3
16
282
659
14, 533
1.8
4.3
93.9
1.8
3.6
59.5
Plants operating 2 shifts..
.7
21.5
Plants operating 3 shifts. .
12 9
Ammunition, explosives, firearms, and ordnance
118
113,500
100.0
63.4
23.8
12 8
Plants operating 1 shift
12
35
71
1,435
26,041
86,084
1.2
22.9
75.9
1.2
19 2
43. 0
Plants operating 2 shifts
3.7
20.1
12 8
Blast furnaces, steel works, and rolling mills
196
471,503
100.0
53.1
26.0
20.9
Plants operating 1 shift
2
9
185
662
4,805
466, 136
.1
1.0
98.9
.1
.7
52.3
Plants operating 2 shifts
.3
25.7
Plants operating 3 shifts . .
20 9
58
83, 962
100.0
62.2
25.3
12.5
Plants operating 1 shift..
1
7
50
136
5,094
78, 732
.2
6.1
93.7
.2
5.2
56.8
Plants operating 2 shifts
.9
24.4
12.5
Cars, electric and steam railroad
47
23, 962
100.0
83.8
11.6
4.6
Plants operating 1 shift
20
11
16
3,004
4,756
16,202
12.5
19.9
67.6
12.5
18.1
53.2
Plants operating 2 shifts
1.8
9.8
Plants operating 3 shits .
4.6
90
60, 897
100.0
70.3
16.4
13.3
Plants operating 1 shift ..
Plants operating 2 shifts .
90
60,897
100.0
7.03
16.4
13.3
Electrical machinery, apparatus, and supplies. .
117
227, 224
100.0
72.0
20.6
7.4
Plants operating 1 shift
10
25
82
3,850
21, 538
201,836
1.7
9.5
88.8
1.7
7.6
62.7
1.9
18.7
7.4
Engines, other than aero . .
17
26, 383
100.0
66.9
23.6
9.5
Plants operating 2 shifts
2
15
1,633
24, 750
6.2
93.8
5.1
61.8
1.1
22.5
Plants operating 3 shifts . .
9.5
Locomotives
10
14.214
100.0
75.9
19.7
4.4
Plants operating 1 shift .
5
5
],59-l
12, 620
11.2
88.8
10.1
65.8
1.1
18.6
4.4
Macbinc tools. .
102
84,997
100.0
69.6
24.5
5.9
Plant' operating 1 shift .
5
64
33
1,179
40,112
43, 706
1.4
47.2
51.4
1.4
36.4
31.8
Plants operating 2 shifts .. .
10.8
13.7
Plants operating 3 shifts
5.9
> Numbered table 2 in original.
NATIONAL DEFENSE MIGRATION
8105
Table 1. — Distribution of employment by shift in selected plants by industry,
June 1941 — Continued
Industry
Number
of plants
Total employment
Percentage distribution]
of employment by shift
Number
Percent
of total
First
shift
Second
shift
Third
shift
Machine-too] accessories
39
12, 35fi
100.0
69.8
23.0
7 2
Plants operating 1 shift
3
24
12
93
7,533
4,730
.8
60.9
38.3
.8
48.8
20.2
Plants operating 2 shifts
12.1
10.9
Plants operating 3 shifts
7 2
Shipbuilding _..
77
146,814
100.0
77.5
17.8
4 7
Plants operating 1 shift
20
32
25
3,849
36, 049
106, 916
2.7
24.5
72.8
2.7
19.9
54.9
Plants operating 2 shifts
4.6
13.2
Plants operating 3 shifts
4 7
Smelting and refining
42
31,152
100.0
70.0
16.6
13 4
Plants operating ! shift
Plants operating 2 shifts
Plants operating 3 shifts _-
42
31, 152
100.0
70.0
16.6
13 4
* * * Overtime continued to be an important factor in increasing defense
production. It was most widespread in the machine tools and accessories indus-
tries wliere virtually all the workers worked overtime, averaging 13 hours
weekly at the time of the June survey. In private shipyards, more than 80 per-
cent of the workers average 11 hours of overtime during the week and in plants
manufacturing firearms, ammunition, explosives, and ordnance materials, an
average of 9'/j hours of overtime was worked by 74 percent of the wage earners
during the week. In continuous-process industries, the use of staggered shifts
eliminates, to a large extent, the need for overtime. Consequently, in blast
furnaces, steel works, and rolling mills, smelting and refining, and chemicals, only
20 to 30 percent of the wage earners worked overtime.
The average workweek for the individual worker in a multiple-shift plant is
dependent, to a large extent, on whether the plant or department in which he is
employed operates two or three shifts per day. * * * Thus, the average
worker in two-shift plants worked nearly 20 percent more hours per week than
the average in three-shift plants. The longer workweek for workers in two-
shift plants results from the lengthening of shifts with daily overtime as con-
trasted with 8-hour shift schedules in three-shift plants. Overtime, therefore,
was most extensive in two-shift plants where 82.G percent of all the workers
worked an average of 13.2 hours of overtime during the week. In three-shift
plants, 40.6 percent of the workers averaged 8.6 hours of overtime during the
week, a considerable portion of this overtime being worked in departments which
operated two long shifts.
While some two-shift plants reported operations extending as long as 140
hours during the week, actual production time usually occupied from 110 to 120
hours in plants operating long sliifts, as shown by the average hours worked
per week in these plants. In three-shift plants operating in excess of 150 hours
during the week, average hours per worker declined, indicating the use of four
shifts of workers to achieve continuous operation.
8108 WASHINGTON HEARINGS
Table 2. — Employment and hours worked in selected plants, June 1941 *
Shift schedule and plant hours per week
Number'
of plants
Total num-
ber of wsge
earners
Average
hours
worked
per week
per wage
earner
Percentage
of workers
working
overtime
Average
weekly
hours of
overtime
per over-
time
worker
Total, all plants
935
1,312,498
43.6
50.8
9 4
1-shift plants, total
70
14,390
43.6
47.6
8 7
40 to 49.9 hours
59
14
3
10, P62
2, 519
909
41.6
49.5
52.1
39.8
72.9
71.1
5 7
50 to 59.9 hours,..
14 6
eo hours and over..
12 5
2-shift plants, total
217
149,814
50.8
82.6
13 2
70 to 79.9 hours
7
42
35
32
48-
22
19
12
3.135
17,712
26. 632
14,104
49.789
13, 350
10.311
14,781
38.6
49.2
45.5
51.3
52.0
51.1
56.7
55.5
22.2
49.9
7'..0
93.5
88.4
92.1
97.5
97.2
6 S
80to89 9hours
5 4
90 to£9 9 hours
9.2
100 to 1099 hours
12.6
110 to H9.9 hours
14 2
120 to 129.9 hours
14.2
130 to 139.9 hours
17 9
140 hours and over.
17.4
3-shift plants, total
CA2
1, 148, 294
42.7
46.6
S 6
110 to 119.9 hours
3
£0
46
90
39
414
3,180
32, 178
54. 626
95, 222
44, 245
918. 843
40.4
40.3
43.1
46.2
44.8
42.3
40.3
40.0
64.4
76.3
68.5
41.7
6.3
120 to 129 9 hours
7.0
130 to 139 9 hours
7.0
140 to 149 9 hours
9.0
l.'^O to 159 9 hours
9.4
ICO hours and over.
8.6
• Numbered table 4 in original.
ConsideraMons which prevented expansion of second and third shifts were
reported by 670 of the C35 surveyed plants. The most common deterrent vras
a reported shortage of skilled workers. However, while o43 plants reported
difficulties in securing- adequate numbers of skilled Vv'orkers, only 76 indicated
it as the exclusive consideration. Other factors operated to prevent expan-
sion in ihe remaining cases. Thus, 75 reported shortage of skilled workers
in combination with shortages of material and equipment, and 66 reported
a combination of shorta.ge of skilled workers, of supervisory personnel, and
of materials and equipment. Shortage of materials or equipment was re-
ported I)y 3n,5 plants, IBS of these indicating it as the sole factor preventing
expansion of extra shift work. Lack of orders, legal restrictions, or the
fact that pre.sent schedules are adequate under existing contracts may be
considered as primary causes preventing expansion, and were reported by a
total of 212 plants.
In machine-tool plants, the skilled worker shortage was particularly acute,
as shown by the fact that 28 plants reported it as the only deterrent to ex-
pansion and 48 plants reported it together with other factors. The prin-
cipal factor preventing expansion in brass, bronze, and copper plants was
shorta.ge of materials or equipment. In this industry, 22 plants stated that
the above shorra,ges were the only factors and 22 others indicated that ma-
terials and equipment shortages in combination with other reasons prevented
expansion of evening and night shifts. In the electrical industry many plants
employ large numbers of female workers; and legal restrictions such as
maximum hours and night work laws for women prevented the expansion
of second and third shifts in 21 of the reporting establishments. Other plants
in this industry were affected by shortages of skilled workers and of materials
and equipment.
It may be seen from the foregoing summary that wide variations exist in
operating schedules among the defense industries and among Ihe individual
plants in each of the industries. Further expansion in defense production
can be accomplished through a more efficient utilization of present plant
facilities on evening and night shifts. The principal deterrents at the present
time are: (1) Shortages of skilled workers, (2) shortages of supplies, parts,
NATIO^'AL DEFENSE MIGRATION 8107
and materials, and (3) lack of balance among production departments. These
problems are being met through training programs, upgrading of workers,
exercise of priorities, and allocation of materials, increased subcontracting and
exparsion of bottleneck departments.
Opebatinq Schedules in Machine-Tool Plants September 1941
keport by bureau of labor statistics, united states department of labob,
washington, d. c.
Machine-tool plants continued to expand their second and third shifts between
June and September 1941, according to preliminary reports received by the Bureau
of Labor Statistics from firms employing more than two-thirds of the workers
in this industry. Wage earners in 79 reporting plants increased from 63,900 in
June to 69,000 in September — a gain of approximately 8 percent. The number
of workers on second and third shifts increased by 12 and 22 percent, respectively,
during the 3-mouth interval, though even in September less than a quarter of the
workers were on the second shift and only 7.5 percent were on the third. While
Sunday operations were still not extensive In September, a number of plants have
increased their week end operation since June. The number of workers at work
on Sunday during June represented 5.7 percent of the total in the 79 plants. In
September, on the other hand, the number at work on Sunday had increased to
9.8 percent of the total plant forces. Aggregate man-hours worked in the 79 plants
during the surveyed week in September amounted to 3,650,000 — an increase of
240,0110 hours over the midweek of June.
Practically all of the workers in the reporting plants continued to work over-
time in September. Overtime averaged 14 hours per week for 96 percent of the
workers and showed little change since June.
As indicated by previous surveys, the largest number of wage earners were
employed on the main shift, inasmuch as maintenance, supply, and assembly opera-
tions are performed principally on one shift. In September the distribution of
all wage earners, by shift, shows 67.6 percent on the first shift, 24.9 percent on
thesecond, and 7.5 chi: the third shift.
NATIONAL DEFENSE MIGEATION
WEDNESDAY, OCTOBER 29, 1941
House of Representatives,
Select Committee Investigating
National Defense Migration,
Washington, D. G.
The committee met in room 346, House Office Building, Wash-
ington, D. C, at 10 a. m., pursuant to notice, Hon. John H. Tolan
(chairman) presiding.
Present were: Representatives John H. Tolan (chairman), of Cali-
fornia; John J. Sparkman, of Alabama; Carl T. Curtis, of Nebraska;
and Richard J. Welch, of California (guest).
Also present were: Dr. Robert K. Lamb, staff director, and Mary
Dublin, coordinator of hearings.
The Chairman. The meeting will please come to order. Mr. Burns
will be the first witness. Mr. Burns, we appreciate very much your
coming here this morning. Mr. Sparkman will ask you some questions
based on your statement.
(The statement referred to above is as follows :)
STATEMENT BY ARTHUR E. BURNS, ECONOMIC ADVISER, WORK
PROJECTS ADMINISTRATION, FEDERAL WORKS AGENCY, WASH-
INGTON, D. C.
Laboe Displacembustt in Nondefense Industky
Material shortages are creating job losses in hundreds of communities through-
out this country. The metals essential for armament purposes are too scarce t6
meet both armament and nonarmament needs. Consequently civilian industry is
asked to give way ; increasingly it vpill find itself unable to get the materials and
equipment necessary for sustained operations.
Reductions in employment and production face many enterprises, especially
small business. Many vpill be forced to shut down. Loss of work resulting from
shortages of materials and equipment in nondefense industry can be expected to
increase rapidly in the months ahead.
The public awareness of this problem of priorities unemployment is indicated
by the various estimates made of its probable size. The National Association of
Manufacturers stated that 3,000,000 factory workers might be affected. Price
Administrator Henderson gave 2,000,000 as the probable displacement. Mr. Floyd
Odium, director of the Office of Production Management, Contract Distribution
Division, also estimated a displacement of over 2,000,000. The Bureau of Em-
ployment Security estimates 1.5 million as the number displaced. The Associated
Industries of New York State predicted, on the basis of a survey, that some
788,000 industrial workers would be affected in that State alone.
The Work Pro.iects Administration has made no over-all estimate of the dis-
plament of workers likely to be caused by material and equipment shortages.
The estimates given above are cited to show that the problem is expected to be
serious. Reports from the State Work Projects Administration offices show that
dislocations and job losses are growing. The monthly Work Projects Administra-
tion sample study of employment and unemployment showed a drop of 700,000 in
8109
8110 WASHINGTON HEARINGS
employment from August to September. Part of this drop undoubtedly was
caused by material shortages.
The first real impact of material shortages will be felt during this winter.
There seems to be no reason to expect a lessening of the difficulty in the spring and
early summer of next year. The acceleration of ai'mament production will require
increasing amounts of materials. Vastly increased arms production can be
achieved only at the expense of civilian production. Consequently material short-
ages will grow worse, and Government restrictions will become tighter during the
course of the next year. There seems to be no basis for the optimistic view that
restrictions will be lightened and the dislocations in nondefense employment will
be reduced after the tirst of the year.
The best face that can be put on the situation is that material and equipment
shortages will slow up appreciably the expansion of total employment in the next
year. Some hundreds of thousands of displaced workers will experience a period
of unemployment before they find new jobs in this expansion.
From the standpoint of job displacement, the most serious single factor in the
situation is the Supply Priorities and Allocations Board ruling on construction
materials. The Office of Production Management estimates that construction
employment — defense and nondefense — will average 600,000 less in 1942 than in
1041. To this loss in direct employment, we must add the workers who will be
affected in the material-supply industries and trades. This combined figure
will exceed 1,000,003 workers.
The loss of work in the construction field and in civilian industry generally
will be spread widely over the entire country. On the other hand, the increases
in employment because of defense contracts is relatively concentrated in the big
industrial centers. Twenty industrial centers have received about 60 percent
of the contracts ; 71 percent of the awards have gone to 12 States. The incidence
of displacement will be widespread; the incidence of absorption will be concen-
trated. Unemployment will increase in many areas where defense stimulation
is negligible.
This process of widespread displacement and concentrated absorption threatens
to become the setting for considerab'e migration, some of which will be aimless
and fruitless. Skilled workers will migrate to places where their particular
skills are not in demand. Unskilled and semiskilled workers will flock to defense
centers where there is already a surplus of such workers and where relief agencies,
housing, and public facilities are already strained. With the exception of certain
highly technical skills, the present labor supply in most defense centers will be
sufficient for some time to come without further migration.
In this connection, it should be stated that the relatively low level of Work
Projects Administration employment throughout the country (40 percent below
the same period in 1940) may encourage migration to some extent. Workers who
lose employment in civilian industries are not likely to get Work Projects
Administration jobs in large numbers because (1) (Work Projects Administra-
tion quotas are low and (2) the number now eligible but not employed by Work
Projects Administration is greater than the number now at work on Work
Projects Administration projects. Consequently, some of those displaced work-
ers that cannot obtain Work Projects Administration employment are likely to
migrate in search of defense jobs.
In some instances (Detroit for example) local displacements will supply the
laboi- needs of defense industries for some time to come. Migration, therefore,
would be pointless and would add to the local relief problem in such areas.
As already pointed out, the displacement of labor resulting from material and
equipment shortages will occur in all parts of the country. The largest single
industry that will be affected is the widely scattered construction industry.
Direct and indirect employment in this industry is likely to be reduced by at least
1,000,000 workers in liM2, compared with this year.
Priority unemployment has begun to strike hai'd already in manufacturing in-
dustries producing durable consumers' goods. The largest of these and the big-
gest consumer of metals is the automobile industry, already scheduled for a 50-
percent reduction. As testimony already presented to this committee has indi-
cated, the defense contracts held by automobile manufacturers will only partially
offset the effect of scheduled curtailment in passenger-car production.
According to the Michigan Unemployment Compensation Commission, 175,000
automobile workers in Michigan alone will lose their jobs by next January.^ At
^ This figure assumes that hours will be reduced so that a 50-percent cut in production
will mean only a 40-percent cut in employment.
NATIONAL DEFENSE MIGRATION 8111
least 30,000 additional workers in related trade and service fields will be displaced,
so that total displacements will amount to 205,000 by the end of January. To off-
set this decline, the Michigan Employment Service estimates that defense em-
ployment will increase about 8O,CO0 by January, leaving a net increase in un-
employment of 115,000. There is little prospect that these workers will be ab-
sorbed in defense plants before the summer of 1942. If civilian production
quotas are lowered still further, the period of reabsorption will extend to the end
of 1942.
Throughout the country the curtailment of automobile production will affect
supply firms, assembly plants, dealers, and service agencies adversely. Other
industries that depend in large part on automobile production will be forced to
curtail or, if possible, to shift to defense production. As this committee has dis-
closed, shifts of this sort are often attended by loss of work and other disruptions.
An Office of Production Management order effective September 30, reducing the
output of mechanical refrigerators to 43 percent of average monthly sales during
fiscal 1941, will reduce employment in the industry by about 17,001 Additional
displacements will occur in factories supplying parts and in sales forces. Scarcity
of materials is likely to compel the industry to curtail prodirction more drastically
than the Office of Production Management requirement. This industry is largely
concentrated in areas having relatively little defense work.
The curtailment plan for washing machines is about the same as for refriger-
ators. Radio-set manufacturers have already begun to curtail production to
some extent. Prodircers of most electrical appliances are expected to face per-
centage cuts similar to those for refrigerators and washing machines. Aluminum,
copper, nickel, chromium, and their alloys are the materials that will be rationed
to the electrical-appliance companies.
The laundry-equipment industry, manufacturing domestic washers and ironers,
faces a 30-percent curtailment order. When supply firms and salesmen are in-
cluded, this will mean that approximately 13 500 workers will be laid off.
A wave of shortages in many vital chemicals will hit soon. The affected
civilian-product indirstries include users of dyes, plastic manufactures, the paper
industry, paints and varnishes, and perhaps the glass and soap industries.
The recent Supply Priorities and Allocation Board order limiting the use of
copper and brass will strike at a wide range of industries. These are among the
most widely used metals and curtailment of their use in nondefense industry will
limit employment in this field.
WORK PROJECTS ADMINISTRATION FIELD REPORTS
Work Projects Administration State and local administrators are supplying us
with current information regarding the effect of material shortages on the em-
ployment situation. The Indiana State administrator, for instance, has informed
us that reports from 40 plants indicate that 3,690 employees had been laid off by
September 15, and that an additional 5,595 are scheduled to lose their jobs. Cur-
tailments in automobiles and automobile parts were chiefly responsible, but stoves,
furnaces, refrigerators, wire and cable, and structural steel for bridges were
also involved.
The employment outlook in Evansville, Ind., is illustrative of the type of situa-
tion that calls for forthright remedial measures. Five hundred workei-s in the
automobile industry have lost their jobs. Two companies producing refriger-
ators are preparing to dismiss 2,000 or more employees. Since there are few
prospective job openings in the community, need for Work Projects Adminis-
tration employment is expected to develop on a large scale.
The Work Projects Administration State administrator for Iowa has reported
that 10 firms have laid off 767 workers and lay-cffs are threatened for an addi-
tional 3,220. A hosiery company with 600 employees in Des Moines and Boone
has completely closed down for lack of silk and nylon. Shortages of copper wire
and zinc threaten to bring about dismissal of the entire force of 1,200 employees
at a company producing dry batteries at Dubuque, a city where there is little
likelihood of marked employment expansion in other lines.
This Iowa report is the first to emphasize the potential effects of building-
material shortages. Since at least 40,000 workers are employed in the construc-
tion industry in Iowa, the prospective curtailment of operations in this field is
likely to have a more serious effect on employment than the shortage of metals
for manufacturing industries.
In Ohio 179 manufacturing plants have laid off 28,000 workers. It is estimated
that the lay-offs will amount to 100,000 during the next 6 to 9 months. Displace-
8112 WASHINGTON HEARINGS
ments in Cleveland affected 2,000 workers in September and are expected to reach
a total of 25,000.
Information supplied to Work Projects Administration by the Ohio State
Employment Service indicates that aggregate lay-offs in Toledo numbered 2.500
by eariy September and that this figure would be substantially increased. A pro-
peller company will begin operating a new plant with about 4,000 employees, but
not until next March. Displacements have been especially large in Mansfield
and D;iyton as a result of the curtailment of refrigerator production. At Hamil-
ton the Work Projects Administration State administrator reports that a stove
manufacturer expects to begin lay-offs that will probably total 1,000. Only a
small proportion of these workers can be placed in local industries. Substantial
lay-offs in other areas, particularly in the smaller communities, threaten to create
a serious unempoyment problem.
Communities that depend largely upon a single plant or industry suffer most
from material shortages. Belleville, Ind., for example, is faced with a serious
problem because of the threatened curtailment of stove manufacturing, the town's
chief industry, with 1,500 employees. Two-fifths of the total employment in Mani-
towoc County, Wis., has been provided by the aluminum-ware industry which has
virtually closed down. Defense contracts specially placed in this "distress area"
have not made up the loss in nondefense employment.
SUMMARY OF EVIDENCE
The evidence from AVork Projects Administration field reports, from the State
employment service reports, from the Office of Production Management, surveys
of business organizations and labor unions all point to the conclusion that (1)
priorities unemployment is now an existing, although relatively small, problem
and (2) that a substantial increase in displacement, probably affecting as mnny
as 2,000 OOO workers in nondefense construction, manufacturing, and related fields
is virtually certain to occur in the near future.
The situation in the nondefense industries will grow worse in the course of the
next year, not better. Although defense employment is increasing and will con-
tinue to increase, it is by no means certain that this inci'ease will off-et displace-
ments over the next 6 months. It should also be stressed that defense employ-
ment is still a relatively small part of total employment. It is clear that increases
In defense employment cannot take up all those displaced in civilian industry.
Many civilian industries cannot shift to defense work. Part of the displaced labor
will not be in areas where defense employment is increasing. Some will be above
the age limits fi'equently found in defen.se industries; others will not have the
appropriate skills and training. For the latter, much can be done by expanding
present training programs.
The coming months will see substantial decreases in some industries and con-
siderable increases in defense industry. These movements will be attended by
frictions and maladjustments and a great many workers will suffer losses in
employment and income.
These dislocations will become important at a time when many industries are
undergoing seasonal declines. Agriculture, construction, trade, and some manu-
facturing industries normally reduce employment during the winter. The normnl
seasonal decline in the nondefense field will be intensified this year by material
shortages. At the same time, these seasonal declines in employment will increase
the difficulty of absorbing the priorities unemployed during the winter.
The combined effects of the factors mentioned above will probably bring about
a drop in employment of considerably more than 2,000,000 workers by the middle
of winter.
GOVERNMENTAL MEASURES
The situation created by actual and threatened material shortages calls for
remedial and ameliorative measures by Government. Tliis problem is essentially
a national problem, growing out of national policies, and the measures taken
should be primarily Federah
To place the liurden on the locality is, in effect, leaving it largely with the
unemployed. Unemployment insurance is a first line of defense, and undoubtedly
large numbers of workers will find other jobs before exhaustion of benefit rights.
But many will not, and some cannot qualify for benefits in the first place.
Along another front, efforts are being made to retrain displaced workers. The
Work Projects Administration training program is part of this effort. Most of
those trained thus far, however, come from the unemployed group as a whole,
NATIONAL DEFENSE MIGRATION 8113
not those recently displaced. To do much for the displaced workers would re-
quire a substantial expansion of the Work Projects Administration training
program. A substantial increa.se in the training program for these workers with
the limited funds now available to the Work Projects Administration could be
brought about only at the expense of those now on the program.
Attempts are being made by the Ofiice of Production Management to place
defense orders in civilian-goods plants affected by material shortages. Subcon-
tracting and otlier means of widespread distribution of defense work are being
pushed. Although this policy may be successfull in the course of time, in the
period under consideration there will be a substantial problem of displacement.
The wide distribution of contracts, however successful, does not get at the root
of the problem. This problem is one of material and equipment shortages. When
scarce materials are being utilized to the limit, further subcontracting means
little more than that defense jobs are provided in one plant rather than in
another. Contract distribution spreads work, but as long as shortages exist it
can do little to increase jobs.
The basic remedy is to increase supplies of scarce materials, plant, and equip-
ment. The time consumed in this expansion needs no elaboration. It is suffi-
cient to say that the increases cannot occur fast enough to prevent widespread
curtailment in civilian production and employment.
WORK PROJECTS ADMINISTRATION AND PBIOKITIES UNEMPLOYMENT PROBLEM
With the funds available to it at the present time, the Work Projects Adminis-
tration can do relatively little to ease the hardship arising out of priorities unem-
ployment. ■;•■.:;;
The appropriation for the present fiscal year is $875,000,000, enough to provide
employment to approximately 1,000,000 workers a month. Tliere are 1,040,000
workers on the program at the present time.
In addition, there are approximately 1.2 million workers eligible for Work Proj-
ects Administration emplbyment who are not at work because funds are inade-
quate.
Each month well over 100,000 workers leave Work Projects Administration jobs,
most of them to take private jobs. Their places on projects are taken by the eligi-
ble workers waiting assignment.
Because of this group of eligible workers, no large numbers of workers displaced
because of material shortages are likely to get Work Projects Administration
employment. It should be emphasized that each winter unemployment normally
increases for seasonal reasons. The Work Projects Administration has always
increased its employment to meet this seasonal problem. Priorities unemploy-
ment will get serious just about the time that seasonal unemployment will in-
crease the pressure for Work Projects Administration jobs. There is not enough
money to meet all of the increased need for employment on Work Projects Admin-
istration projects this winter. As it stands now, the priorities unemployed who
go on local relief and become eligible for Work Projects Administration jobs
will simply swell the large number of persons that are now waiting assignment.
If it is the view of Congress that Work Projects Administration employment
should be provided to displaced workers pending their absorption in industry, addi-
tional funds will be necessary. The amount needed will, of course, depend upon
the number to be employed. If Congress is to provide that these workers be given
project employment, we believe such employment should be. provided on the basis
of referral by a public employment office of those workers jobless because of
shortages arising out of the defense program.
An expansion of the program under a policy as outlined would occasion no diffi-
culties. The program is geared to rapid changes. Projects are ready for immedi-
ate prosecution. These projects would encounter no serious difficulties under the
Supply Priorities and Allocations Board materials ruling. The Work Projects
Administration has shifted its construction work to projects that need few metals.
Airport grading, runway construction, roads, and similar projects require little or
no materials that would be affected by the Supply Priorities and Allocations Board
ruling. At the same time, these projects are essential to defense ; by using other-
wise idle labor to construct them there is a clear gain in defense effort. At the
same time, the personal and family tragedy of destitution is averted.
An increase in Work Projects Administration training — both vocational school
and in-plant training — would also be possible if additional funds were provided.
Such training would equip displaced workers to take jobs in defense industries.
In addition, these activities could take the direction of training workers to take
3114 WASHINGTON HEARINGS
jobs left open in the "upjrrading" shift of woi-kers from nondefense to defense
work.
The general situation may be summarized as follows:
1. Material sliortages, especially in nondefense industries, are now adding to
the jobless problem.
2. These shortages will grow more serious in the months ahead. Construction
and the durable-consumers-guods manufacturing. industries will be hit hardest
3. Job displacement in nondefense work is likely to exceed job increases in
defense work over the next 6 months.
4. Subcontracting and other means of spreading the work are not likely to
prevent widespread displacement for a considerable time.
5. Unemployment insurance will be the first line of defense for most of the
displaced workers, but its short duration and somewhat limited coverage will
leave large numbers in need.
6. The present appropriation gives the Work Projects Administration little
chance to give jobs or training to any substantial number of these workers. If
they are to get either, additional funds lor the Work Projects Administration
will be needed.
7. Should such a policy of providing public employment be adopted, these
workers should be referred to project employment by a public-employment oflBce.
8. Expansion of Work Projects Administration employment would not absorb
materials listed as strategic defense items.
Exhibit A. — Duplicate Registrations at Employment Offices
EEPOBT BY ABTHUE E. BURNS, ECONOMIC ADVISES, WORK PROJECTS ADMINISTRATION,
FEDERAL WORKS AGENCY, WASHINGTON, D. C.
It is possible for a worker to register at several employment offices. However,
the Bureau of Employment Security states that this is a negligible factor, as
indicated by local analyses of the records. Migratory workers sometimes register
at several offices, but unless they return to these offices periodically their names
are removed from the active files. This amounts to an automatic reduction of
this neglig.ble duplication.
The Bureau of Employment Security states that this duplication is offset
by group placements made in many agricultural areas. Group placements of
workers are made without the individual registration of these workers. In these
areas, therefore, the applications and placements are imderstated by the reports.
The over-all figures on registration at the public-employment offices, conse-
quently, are not alTected materially by the small amount of duplicate registra-
tion. In September 1941 there, wera 4^300,0 30. fMaopie.-re^i^tered at the public-
employment offices.
In the defense areas the local ^officeajclearthe,iiles.jeach.. month in order to keep
the records current. This, of course, reduces the amount of duplication in the
records.
Exhibit B. — Extent of Priorities Unemployment, by States
report by work projects administration, fedekal works agency, washington,
D, &
October 16, 1941.
In the attached table the 48 States are classified on the basis of the extent
to which they now appear to be affected by priorities unemployment. As of
the middle of October eight States were hard hit or seriously threatened.
These are listed below with an indication of a few of the localities most severely
affected, either because of a large absolute volume of lay-offs or because they
are small towns having few alternative employment opportunities:
Illinois: Quincy, Belleville, Elgin, Rockford, and Bloomington.
Indiana: Evansville, Anderson, Connersville, Muncie, Fort Wayne, and
Kokomo.
Michigan : Detroit, Flint, Muskegon, Pontiac, Lansing, Grand Rapids, Green-
ville, Tecumseh, and Adrian.
New Jersey : Paterson, Passaic, Burlington, Bloomfield, and Trenton.
North Carolinn : Asheville, Burlington, Charlotte, Durham, High Point, Mor-
ganton, and Roxboro.
NATIONAL DEFENSE MIGRATION
8115
Ohio: Mansfield, Cleveland, Hamilton, Toledo, Dayton, and Cincinnati.
Pennsylvania : Meadville, Indiana, Scranton, Wilkes-Barre, Erie, and Phila-
delphia.
Wisconsin : Manitowoc-Two Rivers, Kenosha-Racine, Ripon, Eau Claire, West
Bend, and Milwankee.
Tlie classification presented in the attached table does not take into account
the possible effects of the recent Supply Priorities and Allocations Board
order forecasting a severe curtailment of construction activity. The effects of
this policy, on top of shortages of building materials already in evidence, will
be widespread. Many of the States listed as "moderately involved" or "little
involved" will be "seriously threatened" if nondefense construction is substan-
tially shut down. The extent of the effects of such curtailment will vary directly
with the relative importance of construction in the State's economy and in-
versely with the amount of the State's defense activity.
As other materials shortages develop and as additional limitation orders are
issued more States will shift into the "seriously threatened" column. The
present tabulation merely smnroarizes the situation as of mid-October.
The classification is based on data available from a wide variety of sources,
including reports by the Work Projects Administration State administrators
in response to the assistant commissioner's lettergram of August 20.
Extent of 'priorities unemployment, by States
States hard hit or seriously
threatened
States moderately involved
States little involved
Illinois.
Alabama.
Arizona.
Indiana.
California.
Arkansas.
Michigan.
Connecticut.
Colorado.
New Jersey.
Delaware.
Idaho.
North Carolina.
Florida.
Kentucky.
Ohio.
Georgia.
Louisiana.
Pennsylvania.
Iowa.
Maine.
Wisconsin.
Kansas.
Mississippi.
Maryland.
Montana.
Massachusetts.
Nevada. '
Minnesota.
New Hampshire.
Missouri.
New Mexico.
Nebraska.
North Dakota.
New York.
Oregon.
Oklahoma.
South Carolina.
Rhode Island.
^outh Dakota.
Tennessee.
Utah.
Texas.
Vermont.
Virginia.
Washington.
West Virginia.
Wyoming.
Exhibit C- — Priop.ities Unemployment in Indiana
EEPORT BY work PROJECTS ADMINISTRATION, FEDERAL WORKS AGENCY,
washington, d. c.
September 30, 1941.
The Indiana State administrator reports that as of S3ptember 15, 3,690
workers are known to have been laid off by 19 Indiana plants on account of
priorities or product curtailment. The report, which provides information on a
total of 40 industr al concerns, states further that an additional 5,595 are sched-
uled to lose their jobs. Curtailments in the automobile and automobile parts
industries were chiefly responsible ; 1,945 employees had been dismissed by
September 15, and 2,335 more were expected to be laid off.
In the other industries involved, actual or anticipated lay-offs were primarily
due to shortages of metals (steel, aluminum, copper, zinc, nickel) in nondefense
manufacturing. In addition to automobiles, industries most widely represented
were stoves and furnaces, refrigerators, wire and cable, and structural steel
for br dges.
In relation to size of community, Connersville (population 13,000) appears to
have been hardest hit to date. The Ilex Manufacturing Co. producing refrig-
erator cabinets and commercial trailers dismissed 800 workers in Connersville;
and the Stant Manufacturing Co. (auto parts) laid off 115. Of the former Rex
Co. workers, 350 obtained work in Richmond while 450 are receiving unemploy-
ment-compensation benefits.
3115 WASHINGTON' HEARIJ^GS '•
The situation in Evansville is potentially even more serious because there aru
few prospective job openings in the community. Five hundred workers in the
automobile industry (Chrysler and Briggs) have lost their jobs, and at the
Sunbeam Electric Manufacturing Co. (refrigerators) it is expected that 1.500
to 1,800 employees will be dismissed. In Evansville and nearby, the outlook
is unfavorable for reemployment and the need for Work Projects Administra-
tion employment is expected to develop on a large scale. Other Indiana local-
ities where it appears that priorities unemployment may strike with special
force are Auburn, Columbia City, Fort Wayne, Kokomo, and Muncie.
Exhibit D. — Pkiortties Unemployment in Wisconsin
eepoet by work projects administration, fedeeaii works agency, washington,
D. C.
The Work Projects Administration State administrator of Wisconsin reports
that as of September 15, 25 manufacturing establishments for which informa-
tion was obtainable had laid off 1,286 workers because of materials shortages
and that additional lay-offs numbering 4,005 were anticipated.* The Wisconsin
State Council of Defense, on the basis of information from nearly 400 companies,
estimates that lay-offs will exceed 14,500. Displacement is likely to be greatest
in aluminum ware, automobiles, and silk hosiery.
A number of communities are seriously threatened because of priorities unem-
ployment. In the ManitoWoc-Two Rivers area, where several thousand aluminum
workers are normally employed, manufacturers have already laid off nearly a
third of the workers. Although shipbuilding is providing expanding employment
in Manitowoc, most of the displaced aluminum workers are not acceptable for
this kind of employment. Present defense contracts 4t the aluminum plants are
not sufficient to meet the existing prospective displacement.^
In Eau Claire a firm manufacturing aluminum pressure cookers has laid o£C
half of its 800 employees. Some of the displaced workers are already on Work
Projects Administration, the State administrator reports, and others will even-
tually apply. The largest employer in Eau Claire is a rubber-tire plant with
more than 2,500 employees. Lay-offs to mid-September numbered only about 30,
but anticipated reduction in output was expected to cause further displacement.
Reports from Eau Claire agree that substantial reductions in employment are
certain to result in the need for extensive public assistance.
The small town of Ripon may be even harder hit. A washing-machine plant
with 445 employees provides three-fourths of the male employment in the town.
Lay-offs at this plant numbered between 100 and 120 by September 15, and further
dismissals are reported in prospect.
In the Kenosha-Racine area metals-using plants fabricating consumer goods
(Nash-Kelvinator and Simmons are the largest) and a silk-hosiery mill provide
a large proportion of all jobs. Displacement as of September 15 numbered 600,
with at least that many more in danger of lay-off in the near future. With
nearly 5,000 industrial workers already unemployed in this area, further dis-
placement presents a serious problem.
Other localities where priorities unemployment is likely to be especially severe
Include Milwaukee, which has large hosiery mills, automotive and other metals-
using plants; Sheboygan (toys, kitchen utensils, light fixtures, furniture);
Kewaunee (aluminum utensils) ; La Crosse (automotive and heating and venti-
lating equipment) ; West Bend (aluminum utensils, washing machines).
1 Reports of Work Projects Administration administrator for Wisconsin, dated -Beptember
24 and October 7, sent in resf)ons8 to Mr. Gill's letters^ram of August 20.
• Article on priorities unemployment in Wisconsin, Wall Street Journal, October 4, 1941.
NATIONAL DEFENSE MIGRATION 8117
Exhibit E. — Peiorities Unemployment in the Sceanton-Wilkes-Bakre Akea of
Pennsylvania
KEPOET by work PKOJEOTS administration, federal works agency, WASHINGTON,
D. C.
October 1, 1941.
On August 2 the OflBce of Production Management prohibited the throwing,
spinning, or other processing of raw-silk stocks, including those already in posses-
sion of the mills. This and a subsequent order require that silk be used only for
the production of defense items including parachutes, powder bags, and igniter
cloths.
The effect of the order on employment in the Scranton-Wilkes-Barre area was
immediate. A field survey shows that by September 19 more than 4,200 silk
workers had been laid off in the area, of whom 2,659 were in Scranton.^ Throwing
was most seriously affected with a displacement of more than 3,800, or about 56
percent of those engaged in that branch of the industry. In addition, more than
400 weavers lost their jobs. In all, about 38 percent of the silk workers in the
area had been laid off by September 19.
The displacement of the silk workers seriously aggravates an unemployment
problem that has existed in the area for some time. It is locally estimated that
even before the silk order there were more than 50,000 unemployed workers in
Lackawanna and Luzerne Counties. Most of these are former miners. Though
the mines are now operating at a higher capacity than for several years, this has
meant in most instances a longer workweek for those who are employed rather
than an increased working force. Lackawanna County has a larger percentage
of its population receiving relief (15.3 in August) than any other county in Penn-
sylvania and Luzerne County has nearly as high a proportion (12.2 percent).
The Office of Production Management arranged a meeting on September 17 and
18 in Scranton and Wilkes-Barre in an attempt to institute the "Buifalo plan"
for the reemployment of the displaced silk workers. An examination of the local
situation, however, indicates that the chances of rapid reabsorption are slight.
The possibility that a substantial proportion of the displaced workers will return
to the silk industry within a short period of time is considered to be almost
negligible. In general, the silk plants are awaiting further developments and so
far have made little attempt to secure defense contracts. The industry is agreed
that such defense contracts as may be obtained can at best provide employment
for relatively few of the displaced workers.
Conversion of the silk plants to the use of substitute raw materials likewise
appears to offer little hope for reabsorption. The concerns are reluctant to con-
vert to rayon or nylon if there is a possibility that silk will again become available.
A few of the larger plants are making an attempt to switch over to rayon or
nylon but the smaller plants, which account for a mnjority of the workers, are
typically unable to finance the necessary capital investment. Moreover, there is
little possibility that the supply of rayon cnn be immediately increased, while the
plastics needed for nylon are already subject to priority control.
Absorption in alternative emnlovment offers similarly small hope. The bulk
(at least 85 percent) of the 4.200 displaced workers are women, practically
none of whom have had any training other than that received in the silk
mills. The only local industries which indicate a willingness to reemploy
women workers are the garment and cigar-making industries. In both of
these industries, however, manufacturers indicated that only trained workers
could be employed. With regard to cigar making it is doubted whether the
contemplated training program can readily be undertaken since it requires
a large capital investment to simulate actual working conditions. Relatively
few of the garment plants have received defense orders, and those which have
other contracts have bpcn unable to get machine parts and materials, particu-
larly findings such as buttons, snaps, zippers, silk thread, etc. A recent order
giving a high priority rating to machine equipment and parts for the textile
industry will alleviate this situation in some measure but the local feeling is
that continuing disruption of supply shipments will hinder capacity production
for months to come.
Furthermore, even if the garment industry were in a position to absorb a
large part of the silk workers the problem of training remains. The training
' Thp Tiiimbpr of displaced silk workers was dlstrihntPd as follows: Scranton, 2,659;
Wilkes-Barre, l,.^t4 : Hazleton, 184 ; Nanticoke, 58 : and Pittston, 16. Tliese figures under-
state total lay-offs by an unknown amount, since not all firms are reported.
gll8 WASHINGTON HEARINGS
program recently proposed calls for the installation of 100 power-sewing ma-
chines. The machines, however, have not yet heen secured. With this equip-
ment, only 100 workers can be trained every 2 months, operating one shift;
even if classes are put on a 2- or 3-shift basis, the problem of retraining by
this means wou d be one of several year.s' duration. There is also consider-
able doubt as to whether many of the displaced workers will be able to qualify
for the fast tempo required of power-machine operators. More than 65 percent
of the disj laced women are over 27 years of age, and the garment manufac-
turers in the past have been reluctant to hire workers over 27.
As yet there has been little distress resulting from the displacement since
most workers are eligible for unemployment compensation. While a few of
the unattached girls are already moving out of the ai-ea in search of jobs
elsewhere, it is almost inevitable that many of the displaced workers will be
forced to apply for public assistance. A sample check of the unemployment
compensation records shows that about one-half of the number are married ;
of these, some 12 percent have husbands who are not working at present. Of
tte unmaiTied women almost three-fourths have dependents. It is apparent
that though many of those displaced are "secondary workers," their earnings
have constituted an important part of the family income. Local relief officials
in Scrantou feel that the first effects of the lay-offs will be felt within a month
when increased grants will be necessary for cases already receiving relief.
From then on it will be a case of increasing the rolls, with most of the
workers attempting to secure Work Projects Administration employment.
It is clear that reemployment opportunities for the 4.200 workers already
displaced are far from bright. Moreover, it is expected that 650 additional
workers in the throwing branch of the industry will be displaced within the
next 30 to 60 days. By that time the materials which are now in process will
have teen largely exhausted. The weaving branch of the industry, now em-
ploying nearly 4,000 workers but so far not seriously affected, will begin to
feel the effects of the decrease in the amount of yarn available and will also
be forced to lay off large numbers of workers.
Exhibit F. — Estimates of Additional Workers Needed by April, 1942 in
Defense Industries
report by work projects ADMINISITIATION, FFJ)ERAL works agency, WASHINGTON,
D. C.
SEPTEM3EB 11, 1941.
The Bureau of Labor Statistics has recently estimated that a total of 1,408,581
additional workers will be required for on-site employment in defense industries
between April ]04] and April 1942.* This is 2.7 percent of the total labor force.
The estimate does not cover labor requirements for all brandies of industry ; many
of the additional workers needed will undoubtedly come from nondefeuse indus-
tries. Such transfers will be sharply stimulated by priorities, materials short-
ages, and product curtailments.
In tlie 4 months since the estimate was made the increase in employment in two
of the defense industries covered has been considerably below the rate necessary
to reach the estimated gains. Employment statistics for the other industries
covered are not available. In aircraft manufacturing the increase thus far has
been a rate of about 300,000 workers per year rather than the estimated 408,441,
while the actual increase for shijjbuilding has boon at a rate of about 240,000
workers per year in contrast to an estimated ,S2'>,900.- Unless the rate of inci-easo
is g: eater during the latter part of the period than thus far, the net addition for
the year covei-od by the estimates will be closer to 1.000,000 workers than the
estimated 1,^08,581. Moreover, as already stated, many of these workers will
transfer from other industries.
' V. S. Department of Labor, mimeographed release, "Defense Labor Requirements by
Occupation" (by States) — Prepared May 20. 1941.
^'Ti'e Biireau of labor Statistics estimates tl^at shipbuilding employment rose bv some
00.000 in the 3 months Apr. 15 to July 15, and that aircraft employment increased 100,000
between Apr. and Aug. 1.
NATIONAL DEFENSE MIGRATION
8119
HIGH PBOPORTION OF SKILLED AND SEMISKILLED WORKEES REQUIRED
Taking the four industrial groupings together it appears that 46 percent of the
needed workers are classified as skilled or professional and another 38 percent
as semiskilled (table I). Only 227,483, or 16 percent, of the total needed will be
unskilled workers. Among the individual industries there is little significant
variation in the proportion of unskilled workers required; it amounts to 20
percent in shipbuilding and to only 15 percent in the other three groups.
Table I. — Additional workers required in defense industries by April 19^/2, by
industry and by skill group ^
Defense industry
Total
Professional
and sub-
professional
Skilled
Semiskilled
Unskilled
Num-
ber
Per-
cent
Num-
ber
Per-
cent
Num-
ber
Per-
cent
Num-
ber
Per-
cent
Num-
ber
Per-
cent
Total
1,408,581
100.0
91, 184
6.5
550, 8J;9
39.1
539. 055
38.3
227, 483
16.1
Shipbuilding
323, COO
408, 441
291,611
384, 629
100.0
100.0
100.0
100.0
32. 3G0
32, 675
14,5?0
11,539
10.0
8.0
5.0
3.0
155.472
147, 039
113,728
134,620
48.0
36.0
39.0
35.0
71, 2."i8
167, 460
119,561
ISO, 776
22.0
41.0
41.0
47.0
64, 780
61, 267
43, 742
57,694
20 0
Aircraft .. . .
15 0
Machine tools and ord-
nance - . . .
15 0
Other
15.0
1 Bureau of Labor Statistics, "Preliminary estimate of the number of additional workers required by
April 1942 in the manufacture of aircraft, vessels, machine toolB, ordnance, and other defense items," May
20, 1941.
Work Projects Administration can expect to supply very few of the professional
and subprofessional workers and very few of those classified as skilled, since few
workers of the types needed remain on the rolls. Moreover, unless the semiskilled
workers remaining on Work Projects Administration rolls are retrained or unless
employers' hiring standards are substantially modified, AVork Projects Adminis-
tration will probably contribute a relatively small proportion of the semiskilled
group. It is the unskilled position which Work Projects Administration will most
commonly fill, and of these there are fewer than 230,000. This is less than one-
fourth of present Work Projects Administration employment. Moreover, approxi-
mately 25 percent of these positions have now already been filled.
GEOGBAPHIOAL CONCENTRATION OF REQUIRED WORKEES
The 21 States for which the Bureau of Lnbor Statistics supplies separate esti-
mates are responsible for 93 percent of total labor requirements, and 10 Spates
alone will have 68.2 percent of job openings in these defense industries (table II).
These requirements contrast with the distribution among the States of the total
labor force and with active registrations at offices of the United Spates Employment
Service, and even more sharply with Work Projects Administration employment.
The same 21 States which will require 98 percent of the labor have only 66.4 percent
of the Work Projects Administration employees (as of August 6, 1941) ; 72.5 per-
cent of the active registrants (as of May 31, 1941) ; and 71.7 percent of the total
labor force according to the 1940 census (table II).
60396— 41— pt. 2(
8120
WASHINGTON HEARINGS
Table II. — Additional workers required in defense industries by April 19^2, total
labor force {ID'fO), active rcpistrations at U. S. Employment Service, and Work
Projects Administration employment, continental United States, and 21 States
State
Continental United
States
California
Pennsylvania
New Jersey
Ohio -.-.
New York
Michigan —
Maryland
Indiana. -..
Missouri
Connecticut - - .
Illinois
Washington
Massachusetts
Texas
Virginia -
Kansas
Alabama
Tennessee
Maine
Nebraska
Oklahoma
Total for 21
States --.
Rest of country
Additional work-
ers reauired by
April 1942 '
1, 408, 581
1, 309, 698
98,883
100.0
10.1
10.0
8.6
7.5
7.1
6.5
5.1
4.7
.6
4
4
3
3.2
3.2
3.0
2.4
2.2
2.0
1.7
1.3
1.2
1.1
93.0
7.0
100. 0 52, 840,
10.1
20.1
28.7
36.2
43.3
49.8
54.9
59.6
64.2
68.2
71.7
74.9
78.1
81.1
83.5
8.5.7
87.7
89.4
90.7
91.9
93.0
Total labor force '
.-.-37,869,452 71.7
7.0 14,971,310 28.3
100.0
5.6
7.5
3.5
5.2
11.3
4.0
1.5
2.5
2.9
1.5
6.4
1.4
3.5
4.7
2.0
1.3
1.9
2.0
1.5
100.0
5.6
13.1
16.6
21.8
33.1
37.1
38.6
41.1
44.0
45.5
51.9
53. 3
56.8
61.5
63.5
64.8
66.7
68.7
69.3
70.2
71.7
U. S. Employ-
ment Service ae-
ti ve registra-
tions '
5, 148, 490
374.510
328, 861
187, 175
286, 808
564, 835
133, 743
37,371
211,466
204, 380
38, 873
285, 142
38, 177
174,937
332, 171
69, 849
63, 462
119, 592
135, 514
31,024
49. 552
65, 444
3, 732, 886
23.3,1,415,604
100.0 100.0
7.3
6.4
3.6
5.6
7.3
13.7
17.3
22.9
11. 0| 3.3.9
2.6 36.5
.7
4.1
4.0
.8
5.5
.7
3.4
6.4
1.4
1.2
2.3
2.6
.6
1.0
1.3
72.5
27.5
37.2
41.3
45.3
46.1
51.6
52.3
55.7
62.1
63.5
64.7
67.9
69.6
70.2
71.2
72.5
27.5
Work Projects Ad-
ministration em-
ployment*
1,012,274
42. 907
70, 015
28,777
52, 136
80,686
33, 635
5,219
23. 535
34, 987
4,022
67, 726
11,678
38, 197
57, 340
12,157
15, 659
24, 160
24, 324
3,737
14,466
27, 129
672, 492
339, 782
4.2
6.9
2.8
6
8.0
3.3
.5
2.3
3.5
.4
6.7
1.2
3.8
5.7
1.2
1.5
2.4
2.4
.4
1.4
2.7
66.4
33.6
100. 0
4.3
11.1
13.9
19.0
27.0
30. a
30.8
33.1
36.6
37.0
43.7
44.9
48.7
54.4
.55.6
57.1
59.6
61.9
62.3
63.7
66.4
33.6
' Bureau of Labor Statistics, "Preliminary estimate of the number of additional workers required by April
1942 in the manufacture of aircraft, vessels, machine tools, ordnance, and other defense items," May 20,
1941.
2 Census of Population, "Employment status of the population 14 years old and over," 1940.
* Bureau of Employment Security, Research and Statistics Division, "Preliminary reports of employ-
ment security operations," June 21, 1941. Data are for May 31, 1941.
* Aug. 6, 1941 (subject to revision).
NKED FOE ADDITIONAL WORKERS SMALLEST IN ABEAS WHEEE WORK PROJECTS
ADMINISTRATION EMPLOYMENT IS GRIiATEST
In almost all cases the demand for additional workers is smallest in areas
where Work Projects Administration employment is greatest. In the 27 States
(and the District of Columbia), where employment gains for defense industries
are expecteu to be smallest, only 99,000 workers are estimated to be needed,
whereas these same States employ 340,000 Work Projects Administration workers.
The relationship between the geographical distribution of needed defense work-
ers and that of Work Projects Administration workers is best shown by relating
both the estimates of additional workers and Work Projects Administration em-
ployment to the size of the labor force. It appears from table III that the
intensity of Work Projects Administration employment is lowest where the in-
tensity of demand for workers is highest. In Maryland, for example, where
needed workers constitute 9.3 percent of the labor force, Work Projects Adminis-
tration workers make up only 0.7 percent of the labor force. A similar relation-
ship prevails in other active defense States, such as Maine, Connecticut, Penn-
sylvania, New Jersey, Ohio, Michigan, Indiana, Virginia, and Washington.
Conversely, the intensity of Work Projects Administration employment is rela-
tively high in Illinois, Massachusetts, Texas, Tennessee, and Oklahoma — States
where defense labor needs are estimated to be small relative to their labor force.
In a few States — Missouri, Kansas, Alabama, and Nebraska — the intensity of
Work Projects Administration employment is above average, while defense labor
needs are also greater than average. In these States defense activity is highly
concentrated in a few localities, whereas Work Projects Administration employ-
ment remains relatively high in those parts of the States which are little affected.
NATIONAL DEFENSE MIGRATION
8121
Table III. — Additional workers required iy April 19^2 in defense industries, and
Work Projects Administration employment as percentages of total labor force,
continental United States, and by States
Percentage of labor
force
State
Percentaee of labor
force
Stat©
Total ad-
ditional
workers
required
bv April
19421
Work
Projects
Adminis-
tration
employ-
ment 2
Total ad-
ditional
workers
required
by April
19421
Work
rroiects
Adminis-
tratitn
emplf y-
racnt >
Continental United States..
2.7
1.9
6.4
2.4
1.7
3.3
4.5
2.8
2.3
5.6
3.3
1.9
1.8
2 1
4.8
3.5
6.5
3.8
1.7
4.3
9.3
5.0
4.3
7.2
1.5
1.5
1.8
1,5
1.9
1.3
1.6
.7
1.8
2.3
.5
2.0
Texas
2.3
Virsinia
1.2
Kansas
Alabama
2.3
Ohio
2.4
Tennessee
2.3
Maine
1.1
Nebraska
2.9
Oklahoma
3.4
Total for 21 States-...
Rest of country
Connecticut
3.5
.7
1.8
2.3
1 Bureau of Labor Statistics, "Preliminary Estimate of the Number of Additional Workers Required by
April 1942 in the Manufacture of Aircraft, Vessels, Machine Tools, Ordnance, and Other Defense Items,"
May 20. 1941.
* Aug. 6, 1941 (subject to revision).
CONCENTRATION OF LABOR EEQUIBEMENTS STKHvINGLY SIMILAR TO CONCENTRATION OF
PRIME DEFENSE CONTRACTS
The 21 States which the Bureau of Labor Statistics estimates will need 93
percent of the added defense workers had received 90.2 percent of the prime
defense contracts awarded through June 30, 1941 (table IV). The concentration
of labor demand is slightly greater than the concentration of defense contracts.
Table IV. — Additional workers required in defense industries by April 19.'f2
and prime defense contracts awarded through June 30, 19.'fl, continental
United States, and by States
state
Additional workers re-
quired by April 1942 •
Total defense contracts >
Number
Percent
Amount
Percent
Continental United States . .
1, 408, 581
100.0
$12, 180, 450, 000
100.0
California . .
142, 300
140, 300
121, 562
105, 434
99, 796
91, 840
71, 539
65,970
64,650
56, 162
49,298
45, 600
45,100
42, 150
34,007
30,500
28, 824
24, 466
18,300
16,500
15,400
10.1
10.0
8.6
7.5
7.1
6.5
5.1
4.7
4.6
4.0
3.5
3.2
3.2
3.0
2.4
2.2
2.0
1.7
L3
1.2
1.1
1, 335, 186, 000
744, 081, 000
1, 424, 915, 000
536, 949, 000
1, 159, 670, 000
791, 090, 000
366, 018, 000
389, 894, 000
372, 570, 000
595, 896, 000
363, 746, 000
433, 376, 000
715, 636, 000
433, 577, 000
552,119,000
95, 203, 000
215,110,000
81, 135. 000
187,876,000
14, 409, 000
176, 169, 000
11.0
Pennsylvania
6.1
New Jersey
n. 7
Ohio
4.4
New York
9.5
Michiean
6.5
Maryland
3.0
Indiana
3.3
Missouri . . .
3.1
Connecticut
4.9
Illinois .. -
3.0
Washincton
Massachusetts ... .. . . .
3.5
5.9
Texas
3 6
Virginia-.. .... ....
4.6
Kansas
.8
Alabama ...
1.8
Tennessee ..
.7
Maine . ....
L5
Nebraska ....
.1
Oklahoma . _ ..
1.4
Total for 21 States
1, 309, 698
98, 883
93.0
7.0
10, 984, 625, 000
1, 195, 825, 000
90.2
Rest of country
9.8
1 Bureau of Labor Statistics, "Preliminary estimate of the number of additional workers required by
April 1942 in the manufacture of aircraft, vessels, machine tools, ordnance, and other defense items," May
20, 1941.
' Office of Production Management, Bureau of Research and Statistics, "State distribution of defense
•ontract awards, June 1, 1940, to June 30, 1941," July 11, 1941.
8122
WASHINGTON HEARINGS
On a State-by-State basis there is a great deal of similarity between the pro-
portion of contracts allocated to particular States and the proportion of labor
required in defense industries, suggesting that the contract data present a reason-
ably accurate indicator of anticipated defense labor needs. California, which will
require 10.1 percent of all new workers, has 11 percent of all defense contracts
e warded. Pennsylvania and New Jersey, which together have 17.8 percent of the
defense contracts, have 18.6 percent of the job openings. Conversely, in the States
where few workers are required, few contracts have been, awarded. For ex-
ample, in Maine, where 1.3 percent of the total number of job openings were
located, 1.5 percent of the defense contracts had been awarded.
Table V. — Prime defense contracts and facilities, 1940 population, defense cwi-
tracts and facilities per capita, and Work Projects Administration employment
bij Work Projects Administration regions and States
Work Projects Administration
region and State
Prime defense con-
tracts and facili-
ties cumulated
from June 1,1940,
through July 31,
1941 1
Populetion 1940 ' '
Prime de-
fense con-
tracts and
facilities
per capita
Employment on
projects financed
with Work Proj-
ects Administra-
tion funds '
Amount (000
omitted)
Per-
cent
Number of
persons
Per-
cent
Number of
persons
Per-
cent
Continental United States
$17,073,391
100.0
131,669,275
100.0
$129.67
1,016,839
100.0
Region I.
1,850,263
10.8
8,437,290
6.4
219. 30
54,432
5.3
Connecticut
731,276
192, 518
811, 265
24, 523
84, 839
5,842
4.3
1.1
4.8
.1
.5
(*)
1, 709, 242
847, 226
4,316,721
491, 524
713,346
359, 231
1.3
.6
3.3
.4
.5
.3
427. 84
227.23
187, 94
49.89
118. 93
16.26
4,159
3. ,587
36, 860
3,669
3,956
2,201
.4
Maine . .- --
.3
Massachusetts
3.6
New Hampshire
.4
.4
Vermont
.2
Region II .-
4, 632, 312
27.1
30, 290, 327
23.0
152. 93
193, 800
19.1
Delaware -
25. 657
21,919
593, 473
1, 555. 305
1,454,127
981, 831
.1
.1
3.5
9.1
8.5
5.8
266, 505
663, 091
1,821,244
4, 160, 165
13,479,142
9, 900, 180
.2
.5
1.4
3.2
10.2
7.5
96.27
33.06
325. 86
373.86
107. 88
99.17
1,352
4,990
5,271
27,447
83,014
71,726
.1
District of Columbia.
.5
.5
New Jersey
2.7
New York -
8.2
7.1
Region III
1, 426, 925
8.4
18, 931, 805
14.4
75.37
150, 422
14.8
Florida
177, 596
147, 154
60, 668
114,600
87, 048
183, 327
656, 532
1.0
.9
.4
.7
.5
1.1
3.8
1,897,414
3, 123, 723
2, 845, 627
3, 571, 623
1. 899, 804
2,915,841
2, 677, 773
1.4
2.4
2.2
2.7
1.5
2.2
2.0
93.60
47.11
21.32
32.09
45. 82
62.87
245. 18
20, 363
23, 199
25, 349
23, 524
20, 666
25, 081
12. 240
2.0
Georgia
2.3
Kentucky _. .. -
2.5
2.3
South Carolina _
2.0
Tennessee
2.5
Virginia . . . .
1.2
Region IV . . .-.
3, 893, 441
22.8
29, 175, 393
22.2
133. 45
236, 233
23.2
Illinois -
553, 189
531,381
1, 252, 844
622, 376
924, 739
108,912
3.3
3.1
7.3
3.1
5.4
.6
7, 897, 241
3, 427, 796
5, 256. 106
3, 784, 6G4
6, 907, 612
1,901,974
6.0
2.6
4.0
2.9
5.3
1.4
70.05
155. 02
238. 36
138. 02
133. 87
57.26
67, 143
23, 099
33, 687
37, 330
52. 493
22, 481
6.6
Indiana .. ..
2.3
3.3
Missouri
3.7
Ohio - .
5.1
West Virginia
2.2
Region V
835, 781
4.9
12, 869, 913
9.8
64.94
104. 716
10.3
Iowa . .
1 16, 704
279, 838
88, 661
184, 431
.7
1.6
.5
1.1
2, 538, 268
1,801,028
2, 792, 300
1, 315, 834
641,935
642. 961
3. 137, 587
1.9
1.4
2.1
1.0
.5
.5
2.4
45.98
155. 38
31.75
140. 16
15, 405
15, 386
27, 373
15, 167
3,049
5,170
23, 166
1.5
1.5
Minnesota
2.7
1.5
.3
South Dakota..
395
165. 752
1.0
.61
52.83
.5
Wisconsin .
2.3
Region VI ._ _
1, 455, 752
8.5
18, 081, 282
13.7
80.51
173, 840
17.1
Alabama .
290, 774
43. 884
127,610
108, 200
215, 798
669, 426
1.7
.3
.7
.6
1.3
3.9
% 832, 961
1,949,387
2, 363, 880
2, 183, 790
2, 336, 434
6, 414, 824
2.1
1.5
1.8
1.6
1.8
4.9
102. 64
22. 51
53.98
49.57
92.36
104. 36
24. 775
22, 199
20, 834
20, 380
28,076
57, 576
2.4
Arkansas
2.2
Louisiana . . .
2.0
Mississippi
2.0
Oklahoma
2.8
Texas
6.7
See footnotes at end of table.
NATIONAL DEFENSE MIGRATION
8123
TABr.E V. — Prime defense contracts and facilities, lOJ/O population, defense con-
tracts and facilities per capita, and Work Projects Administration employment
hy Work Projects Administration regions and States — Continued
Work Projects Administration
region and State
Prime defense con-
tracts and facili-
ties cumulated
from June 1,1940.
through July 31,
1941
Population
1940
Prime de-
fense con-
tracts and
facilities
per capita
Employment on
projects financed
with Work Proj-
ects Administra-
tion funds
Amount (000
omitted)
Per-
cent
Number of
persons
Per-
cent
Number of
persons
Per-
cent
Region VII
$2,978,917
17.5
13, 883, 265
10.5
$214. 57
103, 396
10.3
17, 206
2, 080, 208
145, 425
2,657
1,740
6,724
11,221
58, 677
29,048
618, 400
7,611
.1
12.2
.9
(.')
(.*}
.1
.4
.2
3.6
(0
499, 261
6, 907, 387
1, 123, 296
524, 873
559, 456
110,247
531,818
1,089,684
550, 310
1, 736, 191
250, 742
.4
5.2
.9
.4
.4
.1
.4
.8
.4
1.3
.2
34.46
301. 16
129. 46
5.06
3.11
60.99
21.10
53.85
52.78
356. 18
30.35
4,109
43, 034
11,313
4,884
5,691
1,003
7,555
6,308
6,821
11, 170
1,508
.4
4.3
1.1
Idaho .
.5
Montana
.6
Nevada . .
.1
.7
Oregon
.6
Utah
.7
Washington
l.I
Wyoming
.1
1 OfRce of Production Management, Bureau of Research and Statistics: "State distribution of defense
contract awards, June 1940 through July 1941"; release of Aug. 22, 1941. Includes prime defense contracts
and facilities awarded by the War and Navy Departments of $50, COO and over. This tabulation should not
be compared with previous tabulations which do not include Defense Plant Corporation commitment!!,
defense aid contracts, and a revision of the construction figures in order to reflect the present estimate of the
final cost of each construction project for which a contract has been awarded or a letter of intent or project
order issued. The latter (referred to as "facilities") are all included in the above tabulation. As in previous
tables, the above tabulation excludes manufacturing project orders to Army and Navy Establishments
(totaling $2, 684, 000, 000), and defense housing and other awards not made by the War and Navy Depart-
ments. The latter total $1,546, 000, 000.
* Department of Commerce, Bureau of the Census.
» Work Projects Administration, Division of Statistics; release of Sept. 2, 1941; showing the number of
persons employed on Work Projects Administration projects, by State, on Aug. 27, 1941 (subject to
revision).
* Less than 0.05 percent.
TESTIMONY OF ARTHUR E. BURNS, ECONOMIC ADVISER, WORK
PROJECTS ADMINISTRATION, FEDERAL WORKS AGENCY, WASH-
INGTON, D. 0.
Mr. Sparkman. Your statement in full, Mr. Bums, has been incor-
porated in our record. We appreciate the great care you have shown
in its preparation and we feel certain it will be a decided contribution
to our hearings. I want to ask you some questions based upon that
statement.
First, what is the W. P. A.'s estimate of the number of workers who
are likely to lose their jobs within the next year as a result of the
defense program?
Mr, Burns. The W. P. A. has made no detailed estimate of that,
although I believe between 2,000,000 and 3,000,000 is a rather reason-
able figure.
Mr. Sparkman. Between 2,000,000 and 3,000,000 thrown out by
defense dislocation?
Mr. Burns. That is right.
Mr. Sparkman. Will that be the result of closing down small plants
through inability to get materials?
Mr. Burns. The general shortage of materials and the elimination
of certain types of activities, such as construction.
8124 WASHINGTON HEARINGS
Mr, Sparkman. Your estimate will include workers who would be
affected by S. P. A. B.'s new construction order?
Mr, Burns. That is rif^ht.
Mr. Sparkman. Does it include service workers?
Mr. Burns. Yes ; I should think that figure would include all dis-
placements.
AREAS or GREATEST LABOR DISLOCATION
Mr. Sparkman. Have you any information as to the areas that
are likely to be affected by unemployment due to defense dislocation?
Mr. Burns. The evidence so far indicates that the States most likely
to be affected are Wisconsin, Ohio, Indiana, Michigan, and Pennsyl-
vania. Those are, I believe, tlie ones most affected right now. At
least, our reports indicate that those areas have suffered some displace-
ments already, with considerably more in prospect. However, dis-
placements will be much more widespread than that.
Mr. Sparkman. Why are those particular areas the ones most
affected ?
Mr. Burns. Immediately because there is a fairly large number of
durable consumers goods produced in those areas. Those industries
feel the shortages of materials very quickly.
Mr. Sparkman. Of course, the effect will be felt to some extent
everywhere.
Mr. Burns. Yes; it will.
Mr. Sparkman. Or at least in widely scattered areas.
Mr. Burns. And S. P. A. B.'s ruling on building construction will
probably make the effects very widely felt because home building is
the most widely scattered industry in the country, and indications
are already present that the industry is curtailing somewhat outside
the defense areas.
Mr. Sparkman. Now, the areas that are taking on additional
workers are restricted geographically. Is it your view then that we
may expect this wave of unemployment to bring about a rather large-
scale migration ?
Mr. Burns. I think there is a good chance of that, because as the
workers are displaced in other areas through the shortages in ma-
terials, they are more likely to move into these areas where they
hear about good jobs. So I think the closing down or restriction
of nondefense industries is certainly likely to set the stage for a
considerable migration of workers.
Mr. Sparkman. Is it your impression that much of this migration
will be a blind migration — that is, that the people will simply start
out for places where they hear that there is work or where they
have a hunch that there may be ?
Mr. Burns. That is the way most migration starts. I don't think
there has been any considerable amount of directed migration. Usu-
ally the migrant has heard about a job. I believe your committee
has shown that people get telegrams or hear from their relatives or
friends, and they move on the strength of that and nothing more.
Mr. Sparkman. Very often they find themselves no better off in
their new locations and often much worse.
Mr. Burns. I think that in some of the big production centers the
nondefense industries will supply workers for the defense plants so
they w^ould not need any migrants coming in, at least for some
months to come, or perhaps a year.
NATIONAL DEFENSE MIGRATION 8125
Mr. Sparkman. In your statement you refer to an estimate made
to this committee recently in our Detroit hearings by the Michigan
Unemployment Compensation Commission, that displacement result-
ing from curtailed automobile production would be 250,000 by the
end of January, next year. This decline, it is estimated, will be
olfset by an increase in defense employment of only 90,000 in Janu-
ary, leaving a net unemployment there of 160,000. Of course, in
addition to these there will be a large number of service workers
thrown out of their jobs. All these workers and their dependents
will probably number well over a quarter of a million persons.
And that is only one State we are dealing with. In your paper
you point to many other areas which will be similarly affected. Now,
I want to ask you this question: Can any considerable number of
those displaced workers be absorbed on the W. P. A. rolls?
W. p. A. ABSORPTION OF DISPLACED LABOR
Mr. Burns. Not at the present time, and under the present ap-
propriation to the W. P. A. The W. P. A. rolls are just a little
in excess of 1,000,000 at the present time, and there are a little
more than another million who are eligible to get jobs but who can't
be put on the program ; so that any further additions to this eligible
group are not likely to get jobs as long as the appropriation is
limited to the amount at present.
Mr. Sparkman. You mean that there are something like 2,000,000
persons certified or eligible for W. P. A., and your appropriation
will provide for the employment of only about 1,000,000?
Mr. Burns. That is right.
Mr. Sparkman, Therefore, newly displaced workers would simply
be an addition to that number which is already beyond what you
can take care of.
Mr. Burns. That is right. Some of them might be given jobs.
As a matter of fact, a few of them have been given jobs in Wis-
consin. But that happened to be in a special locality where there
wasn't much of a waiting list. In most areas there is a substantial
waiting list, and if any new workers become displaced and eligible,
they have to take their turn,
Mr. Sparkman, Where jobs might be available for these displaced
workers, can they obtain any assistance from the W. P. A. for trans-
portation ?
Mr. Burns. That is possible only under these circumstances : If
they apply and go on the W. P, A., and then are placed on a train-
ing project, they can be sent to an area to get that training, and
the transportation will be paid for them. That is being done under
the present training programs, to a limited extent,
Mr, Sparkman. That is only for the purpose of getting training?
Mr. Burns, That is right.
Mr. Sparkman. And if they are already skilled workers in that
same line they would not be eligible for the training program?
Mr. Burns," No, And there would be no basis for paying their
transportation.
Mr. Spark?,ian. So we can't see much hope for any help from the
W. P. A. for transporting these workers who are displaced ; because
almost all of those men are skilled workers already ?
gj26 WASHINGTON HEARINGS
Mr. Burns. Not necessarily. You speak of the substantial number
of service workers and construction workers. Now, they might be able
to get jobs in mechanical trades which would require some training.
If they happen to live in an area where there are no defense jobs, they
could be certified at that point on a training project and sent to the
area where there were defense jobs and vocational-school facilities and
be given training at that point, and their transportation would be
paid.
Mr. Sparkman. According to your figures, we face a very large
amount of unemployment due to defense dislocation. I certainly
agree with the statement that you make in your paper that the Fed-
eral Government has a responsibility for the disemployment of these
people. Even where they can be reemployed on other defense jobs,
there will necessarily be a period of unemployment. If they have sav-
ings, they will be ineligible for your program. Do you know whether
any part of the defense establishment is discussing ways and means of
providing employment for these people, or some other type of assist-
ance without requiring certification by local relief authorities?
Mr. Burns. I don't know of any such plan in the defense agencies.
We believe, however, that it would be desirable to prevent this particu-
lar group of workers from applying for relief before getting employ-
ment. As it stands under the present appropriation act, we must
take only people who are certified. That is w4iy, in my paper, I sug-
gested that if these people are given work, it would be preferable for
them to be referred directly by a public employment office to the proj-
ects where they are rather than through the relief process.
Mr. Sparkman. The committee is interested in the possible reem-
ployment of these workers on defense jobs. You mentioned the fact
that there is a possibility of a training program and that the numb-^.r
of these people thrown out of work by the defense dislocation — serv-
ice workers, related workers, and the like — might profit from that
training program. To what extent is the W. P. A. able with its
present funds to assist these workers during the training period?
training projects
Mr. Burns. The W. P. A. at the present time has about 35,000 people
on training projects. With the present money, it could increase that
possibly up to 100,000 or a little better. Any substantial increase over
and above that probably would require additional money.
Mr. Sparkman. Do you pay these people who are taking the train-
ing program the same wages you pay regular W. P. A. workers?
Mr. Burns. Yes; the workers who are selected for the training
program are already on W. P. A. jobs, and they are transferred to the
training project at the rate they were getting before the transfer.
If they are new workers coming into the program, they are assigned
the unskilled rate for the training period.
Mr. Sparkman. What changes in the present administrative pro-
cedures would be needed to refer to project employment workers who
are displaced bv defense dislocations?
Mr. Burns. There would be no administrative problems so far as
W. P. A. is concerned. They would merely be asked to accept referrals
of those workers by the public employment office instead of through
the local relief office. It would be a very simple matter there; the
NATIONAL DEFENSE MIGRATION 8127
only major change necessary is a legislative one which would permit
the referral of workers to our program by a public employment office.
Mr. Sparkman. Is there a shortage of materials used by W. P. A.
projects, or are they likely to encounter serious difficulties under
S. P. A. B.'s materials ruling?
Mr. Burns. There hasn't been much difficulty at the present time,
partly because most of the W. P. A. construction projects use materials
that aren't affected by the S. P. A. B. ruling. There has been a shift
in the type of project, away from buildings that use these scarce mate-
rials, so there is no likelihood that these projects will be affected by the
S. P. A. B. ruling in the future. As I pointed out in my paper, it will
be possible to increase the number of projects without running into
that difficulty because the basic construction materials are not scarce.
It is only the metals that are scarce, and our projects don't use a great
quantity of metals.
Mr. Sparkman. Would you tell us something about the various types
of training program now under operation in the W. P. A. ?
Mr. Burns. There are two basic types. One is very small. That is
the in-plant training. There are just a few hundred workers, I be-
lieve, receiving that kind of training at the present time. The bulk of
the workers receive training in the vocational-school facilities. Those
people are certified by our organization to the schools and are given
training there. The types of workers correspond to the general speci-
fications of employers. They are given training in the kinds of skills
that employers are demanding in the locality.
Mr. Sparkman. Can both of these types be adapted to help do the
job of shifting workers from nondefense to defense jobs?
Mr. Burns. They can. They have already. A fairly substantial
number of workers have been shifted into defense work. As a matter
of fact the training program is limited to training workers for defense
jobs at the present time. Those workers displaced in nondefense in-
dustries will have to go on relief and then be referred to our program
before they can get that training, and the point that I made in my
paper was that if they could be referred directly to a training pro-
gram without going through the relief process it would be much better
for the people themselves.
Mr. Sparkman. What steps do you believe could be taken to assist
those displaced workers above the age limits in defense industries and
below the age limits for pension benefits?
Mr. Burns. I don't think a great deal can be done as long as indus-
try maintains its present hiring standards. They can be given project
employment ; they can be given some training which would fit them for
work if employers wanted them ; but the real difficulty is that industry
has held to those hiring standards, and anything of importance to be
done for these older workers must be done by breaking down the bar-
riers which industry places against them.
Mr. Sparkman. Isn't it true that, since the inception of the defense
program, the average age of the W. P. A. workers has gone upwards
considerably ?
AGE OF WORKERS
Mr. Burns. It has gone up. Early in 1939 the average age of
W. P. A. workers was approximately 39 years. And at the present
time it is almost 43 years. If we look at the figures in detail we notice
8128 WASHINGTON HEARINGS
that tlie percentage of workers in the 20 to 25 or 20 to 30 age group
is much less, and the percentage in the 40 to 50 age group is consider-
ably higher now than 2 years ago.
The Chairman. Mr. Burns, in your statement you say there are
1,040,000 on the W. P. A. rolls in the country today.
Mr. Burns. Approximately that ; yes.
The Chairman. And there are about 2,000,000 eligible to go on ?
Mr. Bukns. Altogether there are about 2,200,000— almost 1,200,000
above our employment at present.
The Chairman. At hearings recently held by this committee some
witnesses testified there are about 5,000,000 unemployed employables
registered in the State and Federal employment agencies in this
country.' Is it possible that any of those WPA workers you have
mentioned are registered with those agencies ?
Mr. Burns. Yes ; they are supposed to be registered with the public
employment offices. I believe about five million people altogether are
registered now. Of that number there ought to be 1,000,000 W. P. A.
workers.
Mr. Sparkman. Is it possible that a good number of those may have
obtained employment without notifying the office?
Mr. Burns. It is possible. I believe however, the employment
office gets a record from the employers, stating that these people
have been given jobs.
Mr. Sparkman. If they are referred by the employment office that
is true, but if they are employed without having been referred by
that office, they don't necessarily get it by name.
Mr. Burns. Not necessarily. Sometimes they do, but if they don't
their practice is, I believe, to drop the name after three months.
Mr. Sparkman. They require reregistration every three months?
Mr. Burns. Something like that ; and if they don't reregister, they
are automatically dropped out of the files.
Mr. Sparkman. Does a person ever register who is actually
working?
Mr. Burns. Yes.
Mr. Sparkman. Then a great many may be holding jobs?
Mr. Burns. Not a very large number. I think the Employment
Service estimates that about 5 percent are employed and looking
for better jobs. The great bulk are not employed and are looking
for work.
Mr. Sparkman. You think, then, that by their frequent registration
and close check on them, that figure of 5,000,000 should be fairly
accurate, or fairly up to date?
Mr. Burns. It should be fairly up to date. How accurate it is, I
don't know. A few years ago the number of people registered at
the public employment offices was much less than the total number
of unemployed. I should guess that there would be a larger per
centage of the unemployed registered now than 5 or 6 years ago,
because the program is older and people are more familiar with
the public employment offices, and the offices have a better coverage.
So it might be now that the public employment office figure is a
fairly good measure of unemployment, or at least a better measure
than it was a number of years back.
"^ See teBtimony of Arthur J. Altmeyer, Washington hearings, part 17, p. 6782.
NATIONAL DEFENSE MIGRATION 8129
Mr. Sparkman. I have heard of persons registering at more than
one employment office. Do the employment offices always clear with
one another on such registrations?
Mr. Burns. I don't know.
Mr. Sparkman. I wonder how many of these might be duplicate
registrations?
Mr. Burns. Probably not a great many among the bulk ot the
people, because they would be likely to register at the offices nearest
their places of residence.
The Chairman. Where can we get the answer to that question ?
Mr. Burns. The Bureau of Employment Security.^
duplicate registrations
Mr. Sparkman. In my section when a defense project draws help
from half a dozen counties around it, a person resident in one of the
other counties might register in his own employment office, but
comes to the county where the project is physically located and regis-
ters also, feeling that those people will get a prior call. I have known
them to go down to counties 50 or 75 miles away and do the same
thing there. I don't know to what extent those duplicate registra-
tions have been carried on. But it would be interesting to know. _
Mr. Burns. I could get a detailed statement on that for insertion
in the record.
The Chairman. I would be glad to have you do so, Mr. Burns.^
Now, with winter coming on, and with over 1,000,000 eligible
W. P. A. workers, what is going to become of those people? Have
you any suggestion how to help them ?
Mr. JBuRNs. Some of them, of course, will get other jobs. The dis-
placement of 1,000,000 workers doesn't mean an increase in unemploy-
ment by that amount. Some of them will get jobs in defense indus-
tries. Some w^ill get temporary jobs in retail trade during the Christ-
mas season. Some of them will have unemployment-insurance bene-
fits. A large number will undoubtedly apply for relief, and add to
the eligible but not employed group on W. P. A.
The Chairman. Those figures on displacement approximate figures
that the committee has received on defense migration. There are
2,000,000 to 3,000,000 people who have left their home States and gone
to defense centers in other States. The residence requirements of
these States of destination range all the way from 1 to 5 years. If
this war emergency ends, the migrants will have lost their residence in
their home States and will not have gained that status in the State
of destination. What can be done for those people? They can't
go on relief.
Mr. Burns. A numl^er of possibilities are open. One is that the
W. P. A. may certify those workers directly without taking the cer-
tification of the local relief agency. That has been done in the past,
and it would then make it possible for those nonresident people to get
public employment. Tliat is one way out of the difficulty.
The Chairiian. To get public employment if public employment
exists.
1 See Exhibit A, p. 8114.
gl30 WASHINGTON HEARINGS
Mr. Btjrns. If it doesn't exist, those people will simply be out of
luck. They can't get local relief. They can't get project employ-
ment. They will simply live off their relatives and neighbors, or in
any other way they can.
The Chairman. The thing that has impressed me all through these
hearings — we have been holding them for a year and a half now — is
the aimlessness, the blind travels, of these people. They don't know
where to go. They hear a rumor or someone sends them a letter or
telegram. Do you know anything that the Federal Government is
doing today to give active information to the people of the various
States of the Union, as to where there is work and where there is not
work?
ORGANIZATION OF LABOR MARKET
Mr. Burns. The public employment offices are attempting to make
the labor market a better organized market. They are attempting to
dissuade workers from moving into areas where there is a surplus of
labor. They are trying to direct workers to areas where there is a
shortage of labor. They have done a considerable amount of that
work during the defense period. However, a large number of the
workers moving about the country probably are moving on the
strength of just such information as you describe. The public em-
ployment offices have not educated the workers as a whole to accept
their advice, and only their advice, as to where jobs happen to be
available.
The Chairman. Have you ever seen an article in a newspaper advis-
ing the people before they moved out of the State to go and get infor-
mation at the employment office?
Mr. Burns. I haven't heard that they did that, and I believe most
of them don't.
Mr. Curtis. May I interpose right here : Two of the daily papers at
Lincoln, Nebr., featured full-page advertisements suggesting to people
that they not just pull up and leave — get in a car and try to find high
defense wages — and impressed upon them the importance of the ac-
curacy of their information, and urged them not to desert what they
had in quest of that pot of gold. About 2 weeks ago in some news-
paper convention in Chicago these papers were awarded the first place
for having the finest community advertisement in America.
The Chairman. That is in your own State ?
Mr. Curtis. Yes.
The Chairman. Who paid for the advertisement ?
Mr. Curtis. The chamber of commerce, I think.
The Chairman. Don't you think the Federal Government should
get into that?
w. p. A. training in relief category
Mr. Curtis. I don't know. There are a lot of these people traveling
around who can't even read. [To Mr. Burns:] You are economic
adviser to the W. P. A. I want you to give me some advice this morn-
ing. I have a letter on my desk from a father of three children, and
he has done farm work for the last 5 or 6 years. He was a farm hand
and made $35 a month and supported a family of five. He stayed off
relief and off W. P. A. He has an opportunity now to enroll in a sheet-
metal school and take that course and equip himself for some better
NATIONAL DEFENSE MIGRATION 8131
type of work. Two other individuals who have never accepted farm
work, and who have been on relief, can support th-eir families while they
go to school from funds of the W. P. A. educational program, and here
is an individual who would make a fine employee in the defense pro-
gram. He has rendered a service to the Federal and State Governments
m the past year by staying off relief, and they say to him : "We can't
help you go to this school unless you go down to the W. P. A. office and
get certified." Has that problem been up before you ?
Mr. Burns. In more or less those terms ; yes ; it has. But there isn't
really anything, or not very much, that the W. P. A. can do about it,
because the law requires that people who get on the W. P. A. must be
certified as in need. The only way to get around that particular kind
of difficulty is to permit on the training program anybody who needs
training aiid who has fair prospects of a job and to pay wages for the
month or 2 months required for the training. That would give us the
utmost mobility in our training work.
Mr. Curtis. Canada and England have that, haven't they ?
Mr. Burns. I believe so. But as long as we limit the training to
people who are on relief, and exclude those people who have managed
to stay off and who might have a job, such as the man you mention, that
program would be closed unless they took the other way out and ap-
plied for relief in order to get the training.
Mr. Curtis. I personally handled this case, and I took it up with
several officials here because it strikes me that an individual who was
willing to sacrifice and support a family of five on $35 a month and do
a type of work that many people scorn because of its long hours and
poor pay should not be penalized by the lack of opportunity to get
some of this training.
Mr. Burns. I agree with you completely, a. id I think it would be
most desirable to take the training part of this program out of the
relief category so that the opportunities to get training would be open
to more people.
Mr. Curtis. I didn't recommend to this individual that he seek cer-
tification on W. P. A., because I think it would hurt him and his chil-
dren the rest of his life in his chances of getting jobs and going on and
being self-sustaining. But that is the only avenue open to him.
Mr. Burns. As things stand now, that is true.
Mr. Curtis. Chairman Tolan made reference to a public-works pro-
gram. They can't build anything, can they? Hasn't S. P. A. B.
stopped all public construction ?
Mr. Burns. No. Only that kind of construction which uses stra-
tegic materials and which is not of a defense character or necessary for
public safety and health.
Mr. Curtis. Can you mention any construction that doesn't use stra-
tegic materials ?
construction not requiring strategic materials
Mr. Burns. Yes. The building of roads doesn't require brass, cop-
per, aluminum, steel, and other scarce materials. The basic building
materials such as lumber, gravel, sand, cement, brick, stone — those ma-
terials are quite plentiful except in a few isolated cases — and road
work, recreational facilities, streets, and curbs, use those kinds of ma-
terials and not the strategic metals. That is why I pointed out in my
g232 WASHINGTON HEARINGS
Statement that the character of the construction program of the
W. P. A. at the present time is such that it does not compete with de-
fense work and its expansion would be possible without getting banged
up by the S. P. A. B. ruling.
Mr. Curtis. Is there a shortage of skilled laborers to carry on those
projects?
Mr. Burns. There is in some cases, although at the present time there
are about 150,000 on the program who are in the skilled category. The
kind of work that I have in mind — road work especially — doesn't re-
quire the high degree of skill that building construction requires, so
that the question of shortages in skilled labor doesn't really arise in this
connection.
Mr. Curtis. There definitely would be a shortage of the heavy equip-
ment needed, wouldn't there ?
Mr. Burns. There is likely to be a shortage of heavy equipment.
Mr. Curtis. There is going to be heavy pressure for the construction
of roads urgently needed for defense.
Mr. Burns. That is right, and our program is building a large num-
ber of those so-called access roads at the present time. That is prob-
ably the largest single type of road job that the W. P. A. is doing, and
much of it doesn't require heavy equipment. A good road can be put
in with a lot of men doing most of the work and a minimum amount of
equipment, so that the shortage of equipment that is likely to develop in
the future probably would not be a serious factor either.
Mr. Curtis. But any public works that deals with water control,
flood control, storage dams, and the like is hurt by the S. P. A. B.
ruling, is it not ?
Mr. Burns. Heavy construction work, if it isn't for defense pur-
poses, will be affected seriously by the S. P. A. B. ruling.
Mr. Curtis. But the type that will not is that which requires mostly
hand labor.
Mr. Burns. That is right. And also a minimun of metal.
EECERTIFICATION
The Chairman. What about workers on relief projects who go into
nondefense industry and then are unemployed when the jplants shut
down ? Can they be recertified ?
Mr. Burns. The law stipulates that if they leave the project to take
private employment and then lose that employment through no fault
of their own, they are to be given their jobs back again. That right
now might be the source of considerable difficulty for the W. P. A.,
because it is employing now the highest average number that is pos-
sible throughout the year. If there is any substantial number of
people coming back, leaving private employment, we are legally
obliged to give them work, and I think that requirement might cause
some difficulty for the W. P. A.
The Chairman. Would you have to let out the ones you had hired ?
Mr. Burns. Yes; and some workers who have been employed for
some time in nondefense industries for that reason will not have much
chance of getting W. P. A. employment as things stand now, because
people who left to get farm labor a few months ago have the right to
get the first jobs that open up under the law.
NATIONAL DEFENSE MIGRATION 8133
The Chairman, Thank you very much for appearing before us, Mr.
Burns.
The committee will take a 5-minute recess.
TESTIMONY OF J. DOUGLAS BROWN, CHIEF, PRIOEITIES BRANCH,
LABOR DIVISION, OFFICE OF PRODUCTION MANAGEMENT, WASH-
INGTON, D. C.
The Chairman. The committee will please come to order. Mr.
Brown is our next witness.
Mr. Brown. Here, sir.
The Chairman. Will you take a seat there, Mr. Brown ? Mr. Brown,
this is the second day of our Washington hearings on the dislocations
of industry and the labor market arising from defense activities aa
they are related to the problem of migration. Last month we held
hearings in Detroit and learned that approximately 200,000 automobile
workers would be faced with unemployment, at least temporarily, and
that the situation that existed at that time warranted an estimate that
there would still be as many as 100,000 workers not reemployed by
next summer.
Since coming back to Washington we have heard of similar situa-
tions throughout the country, situations in which a great deal of unem-
ployment is expected to result because of metal shortages and the
allocation program.
Yesterday Mr. Donald M. Nelson, of S. P. A. B., and a panel of in-
dustrial engineers testified for us on the possibility and problems of
putting all the Nation's manpower to work on defense orders, and the
consequent curtailment of civilian projects and services.
We have asked you here today to supply us with information on the
industries and communities which are being affected by curtailment of
normal civilian production, and particularly to tell us what is being
done for these people. As I understand it, you are chairman of that
branch of Mr. Hillman's Labor Division of O. P. M. which is con-
cerned with this problem of unemployment and labor displacement
resulting from defense dislocation.
We have submitted to you an outline of material which we need in
our consideration of this problem. The committee received from you
yesterday a letter in which you state that in the press of work you had
no time to prepare a statement. You add that you intend later to
provide additional material if we care to have you submit it. We'll
grant you that privilege. Our record wdll stand open until November
10 to receive this material.^ Instead of asking you to make an extempo-
raneous statement, I will ask Congressman Curtis to put to you certain
questions he would like to ask. We have had a good deal of conflicting
testimony on priorities and allocations, and would like further infor-
mation on that.
Mr. Curtis. Mr. Brown, would you please tell us what are the more
important industries which have already been or may be threatened
with curtailment in the very near future, approximately how many
people these industries now employ, and approximately how many of
those people will be unemployed in the near future ?
1 Mr. Brown's prepared material, received subsequent to the hearing, appears on pp. 8150
to 8153.
§134 WASHINGTON HEARINGS
MEASUREMENT OP PRIORITIES UNEMPLOYMENT
Mr. Brown. I might explain, first, that we can give figures as to the
men employed normally in the industry, but in the measurement of
priorities unemployment there are several statistical difficulties. We
ourselves would be as much interested in an exact measurement as
anyone.
Let us take first the question as to whether one takes a gross displace-
ment figure or a net figure of unemployment. The information that
really helps in the formation of policies is the net figure. In the city
of Los Angeles, for example, if there are certain people displaced, and
at the very same time tremendous increases in the aircraft industry,
from the point of view of social impact that is very different from a
condition such as that of the one-industry town in the Midwest where
there is no defense pick-up. In our own studies, therefore, we have
found it necessary to particularize, to take community by community
and measure the impact in that single labor market, and then to decide
in our certification proceedings — which I'd like to explain if you care
to have me do so — whether a community is adversely affected to the
extent that it ought to come under the certification program.
To offer examples: Men laid off in the jewelry industry in the Con-
necticut Valley would quickly be reemployed, whereas in the washing
machine industry in Newton, Iowa, there might be a different condi-
tion, because the plants there are not getting defense contracts, and
it might be that unemployment would last several months, or might
continue indefinitely or until the worker moves to some other locality.
In answer to your question I have here the figures on the normal
number of employees in such industries as jewelry, stoves, aluminum
manufacturers, agricultural implements, refrigerators, domestic wash-
ing machines, furniture, radios, business machines, rubber tires, rubber
goods, and sewing machines — all selected as likely to be affected.^
But, as you can see, there is a vast degree of difference of impact right
in those industries, as between, say, stoves on the one hand, and radio
equipment on the other. So, as I say, it is very difficult to make an
exact measurement of priorities unemployment.
INDUSTRIES AFFECTED
Mr. Curtis. About how many industries would be affected ?
Mr. Brown. I would say, since the shortages are now reaching not
merely the highly specialized types of material, like magnesium, but
are reaching such fundamental materials as steel, cast iron, and copper,
that practically every industry using metal will be affected to some
degree. And it is a question of what the net effect will be, with defense
employment picking up where nondefense leaves off.
Mr. Curtis. What will be the gross unemployment due to enforce-
ment of priorities in all industries, say, for 1941? Beyond that we
don't know where we go in priorities.
Mr. Brown. I have seen these estimates, and in our own work we
would be as much responsible for the development of them as anyone.
But frankly, after putting in a great deal of thought, we have not felt
it either possible or, for that matter, desirable in a development of
public policy, to venture a definite figure. I think it would lead to
confusion rather than to assistance in the development of public policy.
'The figures referred to appear in Mr. Brown's prepared statement. See p. 8151.
NATIONAL DEFENSE MIGRATION 8135
May I mention two or three difficulties? One is the question of
totalizing community lay-offs— that is. as among communities. A
doctor does not average up the degrees of fever among the patients in
a given ward. The impact of unemployment of a hundred men in a
small community is very different from' the impact of unemployment
of 5,000 men in a large' community. Furthermore, situations change
very rapidly. In a given community such as one of the Midwest cities
getting defense contracts at this time, the impact may be weighted by
2 or 3 months, so that unemployment insurance may help to carry those
people, and there is a very definite prospect of reemployment.
Mr. Curtis. Who said 2,000,000 men would be displaced?
Mr. Brown. I think Mr. Leon Henderson made that statement in a
newspaper interview.
Mr, Curtis. How did he arrive at that figure ?
Mr. Brown. I assume that was a matter of personal judgment,
Mr. Curtis. How does that compare with your estimate ?
Mr. Brow^n. It seems a very large overestimate.
Mr. Curtis. What did that estimate include? Merely the people
engaged in making things?
Mr. Brown. That may have been what Mr. Henderson had in mind.
If so, he was thinking of total displacement — that is, of the total num-
ber of persons who might leave their jobs, without taking into account
the fact that many of them found other jobs.
Mr. Curtis. He was speaking of factory workers, was he not?
Mr. Brown. Yes; those employed in industries using metals and
similar materials for fabrication.
displacement among distributors
Mr. Curtis. Is there any estimate of the displacement of people in
the distribution of things?
Mr. Brown. I don't know, because the distribution trades have not
been nearly as hard hit. The group that has been hit in the distribu-
tion field are the salesman for manufacturing companies or the job-
bers. In the retail trades there is a diversity of products sold, as in
the large retail stores; and as some products become scarcer others
will fill in. But the specialized salesmen are certainly apt to be af-
fected, because now those companies are selling to the Government
and don't need their sales forces,
Mr. Curtis. The average garage sells cars, refrigerators, radios, and
washing machines ; and there are as many people engaged in distribut-
ing cars as making them.
^Ir. Brown. I would say the salesmen of automobiles will be affected.
Mr. Curtis. Your answer is that nobody knows how many of these
people will be displaced ?
Mr. Brown. I would say more than that. There is a vastly increas-
ing knowledge. It is our job — the job of the Bureau of Employment
Security and the Bureau of Labor Statistics and various other
agencies — ^to make available knowledge on conditions in specific plants
and in specific areas. Priority unemployment hits different plants in
the same town and different towns at widely different times. It isn't
like depression unemployment. I have been a student over the years of
employment security. In studies in the Social Security Committee
of the Social Science Research Council, we were dealing with depres-
60396 — il— pt. 20 9
3236 WASHINGTON HEARINGS
sion unemployment where all of industry was affected at the same
time by the same vast economic change. Priority unemployment,
however, has various technical aspects. The aluminum-goods manu-
facturing industry was hit ^.ast summer; then came copper, with a
slower timing and less severity; then steel, in which the relative short-
age is not nearly as acute even yet as that in copper. According to
the uses a company makes of these different materials, so is it affected
FACTORS INVOLVED
Another factor is the tremendous increase in demand for arma-
ments. That demand affects a company and its community according
to the initiative or adaptability of that i^articular firm to defense
production. It is a hit-or-miss phenomenon. That is why it is so
important to get full knowledge of the individual community, and
that is what we are driving at as hard as possible. We are economic
doctors, of a sort, dealing with specific cases ; and the totals therefore
are not nearly as significant as if the condition were one that could
be reduced to a universal average.
Mr. Curtis. In other words, loss of jobs by a great number of people,
by reason of priorities, in an area that had quite a little defense activity
would create a lesser problem than in an area that had nothing?
Mr. Brown. Exactly, sir. Let us consider Los Angeles or Baltimore,
or the New Jersey, New York, and Philadelphia metropolitan areas.
Priority unemployment, in which neither specialized skill, nor age,
nor other isolating factors plays a part, has been absorbed very quickly,
and a factor in that absorption has been earnings. Men saw the possi-
bility of good earnings — overtime wages, overtime pay — in the defense
work. They shifted very rapidly.
There was a different situation in Manitowoc, Wis, which is 90 miles
north of Milwaukee, and where it takes a very big decision for a man
to move his family down to Milwaukee. That is where priority unem-
ployment really hits.
Mr. Curtis. Could you tell us approximately how many towns and
cities would be affected by the curtailment of these industries, in addi-
tion to Michigan communities about which we learned first-hand ?
Mv. Brown. I can show how we are getting our information, and I
can discuss certain communities because we have surveyed them. The
survey procedure got going early in September.
COM3IUXITT SURVEYS
We are using the Bureau of Employment Security machinery and
the United States Employment Service, which are Federal agencies,,
and 48 State employment services. We have in process 104 community
surveys and we are adding daily. At the present time we have
75 back, and we have had 35 communities acted upon by our certifica-
tion connnittee.
Eleven community surveys have indicated definitely the need for
certification for remedial programs recommended by the contract certi-
fied by us, recommended by Mr. Odium's Division,^ then the Army and
^ Division of Contract Distribution, Office of Production Management.
NATIONAL DEFENSE MIGRATION 8137
Navy. In all those cases the Army and Navy have acted. We are sure
of the exact conditions in 75 communities.
In addition, we are watching closely about 500 additional communi-
ties. The way we build up our list concerning those communities is
to make note of all the companies producing any product which is
subject to a curtailment order, like automobiles, refrigerators, or wash-
ing machines, and any company using quantities of aluminum, copper,
etc., and then to keep watching each community or industry in which
we have a representative in our priorities branch. In those 500 com-
munities we know that there is likelihood of priority unemployment.
Many times we know it even before the employer does because we send
our men out, or the employment service does. The employer naturally
assumes things will go on. But our job is not to rely on the reactions
of the individual employer alone, but to keep watching ahead as to the
effect on that plant and that community. So that there is a shadowy
zone there embracing those 500 communities which we are now watch-
ing. It could be expanded, and probably will, as priorities cut deeper,
maybe to a thousand. But it is a shadowy boundary line. It is very
hard to give a distinct number. That is the figure that we are oper-
ating on.
Mr. Curtis. Do you come in contact with problems like this : Assume
a certain railroad community has not been very active for some time —
not nearly as active as it was in the days before trucks and automobiles.
But some 200 miles away from there, there is booming defense activity.
Under those circumstances, the railroad workers may be routed out
of that center. Isn't that true ?
Mr. Brown, Yes.
BUFFALO PLAN
Mr. Curtis. At our Detroit hearings representatives of the Labor
Division of O. P. M. described in some detail the operation of the
so-called Buffalo plan. From O. P. M. releases and other numerous
sources we have heard that the Buffalo plan offers a concrete construc-
tive means of transferring men from nondefense to defense jobs with
a minimum loss of time, thus averting unnecessary migration and
unemployment. We have consequently been interested in examining
the plan in detail. Following the Detroit hearings, members of our
field investigating staff were sent to Buffalo, and we have studied what
materials have been made available to us through your own and other
O. P. M. offices.
On the basis of this material there are certain questions we wish to
put to you. In a report on approximately 3,200 workers laid off by
General Motors at the end of July, the Labor Division stated in
our Detroit record that they had, on September 17, specific evidence
of the reemployment of 1,275 men. Do you have evidence of further
reemployment ?
Mr. Brown. That is outside of my immediate jurisdiction, but I
can obtain the figures for you. That work was carried out under the
Labor Supply Branch of the Labor Division. The priorities branch
concerned itself with the policies of curtailment orders, priority or-
ders, and the certification of communities adversely affected. In the
matter of operation, of actual transfer of men, the Labor Supply
Branch, working with the employment service, carries on. I can
obtain from Commissioner Flemmmg those figures.
gl38 WASHINGTON HEARINGS
Mr. Curtis. If you will provide them for us, we shall have them
placed in the record.
Mr. Brown. Yes, sir. ■
Mr. Curtis. Do you not think that any plan which attempts to put
men back to work should have certain controls, so that the responsible
organizations would know specifically what the progress of its
work is?
Mr. Brown. May I explain to you just what we are doing? I
think that will indicate to you the reasons for my earlier statement.
I might say first of all that when I came down here in early May,
I had the feeling that curtailments would have to be carried further,
in order to assure sufficient materials for the defense program, and
that that would involve very considerable lay-offs of people.
In the beginning, Commissioner Lubin was in charge, and I later
took his place. We started in having a representative of the Labor
Division with every priority committee. I sat as a labor consultant
on the Priorities Board under Mr, Stettinius. Then a change was
made to industry branches — the present arrangement. A representa-
tive of the Priorities Branch of the Labor Division sits with every
industry chief in a consideration of allocations, priorities or other
orders affecting in any way the displacement of labor.
POLICY or LABOR DIVISION
It is our policy in our consultations with those industry chiefs,
first to watch those cases where, by the provision of a limited amount
of material, a business can be kept in operation if it is moving over
to defense
That is No. 1: That the going-concern values in that company be
preserved, that the men be there— the management, the foremen,
and so forth — working and on the ground, so that in a move from non-
defense to defense, that company's status as a going concern is pre-
served. We urge that materials be provided to the fullest extent
possible to do that.
Secondly, we are watching all hardship cases — that is, where the
cutting off of the material creates a condition of serious hardship
among the employees of the company or in a community. That is
another reason why we need to know the condition in communities
throughout the country.
As time went on we found that cushioning effects — that is, putting
the brake or cushion on the shock — were not nearly effective enough,
and beginning in June we began planning on various means of help-
ing to put contracts into communities where priorities displacement
iiad been serious. Mr. Levis ^ and Mr. Mehoi'nay,^ under the direction
of Mr. Knudsen and Mr. Hillman, with Army and Navy representa-
tives, started with the secretaries and with others to work out arrange-
ments whereby communities adversely affected could be given special
consideration. These efforts were to draw upon the experience of Mr.
Mehornay, Mr. Nehemkis,^ and others. There were certain proposals
1 William E. Levis, member of the Planning Board, Production Division of Production
Management.
^ Robert L. Mehornay, chief of defense contracts, Contract Unit, Production Division,
Office of Production Manasemonl.
3 Peter R. Nehemkis, special assistant. Contract Unit, Production Division, Office of Pro-
duction Management.
NATIONAL DEFENSE MIGRATION §139
for adjustment of procurement procedure to permit more small con-
tractors previously in other lines of industry to come into defense
work.
DEVELOPMENT OF THE DIRECTIVE
That negotiation went on for some time. We had very fine co-
operation frorn the armed services, and early in September the direc-
tive, based on an agreement between 0PM and the Army and Navy,
was developed. Under that directive, after certification of the find-
ings on the part of the Priorities Branch, Labor Division, going to
the Contract Division, there is established first the fact that priority
unemployment is serious, and second, the type of contract and deter-
mination of the particular firm in the community that can do the job.
Then the Army and Navy, through their divisions of contract distri-
bution— each having such a division — proceed to put contracts into
those places.
Mr. CuETis. That is interesting, Mr. Brown ; but this Buffalo plan
has been held out ae a model, and I want to know more about it. The
O. P. M. Labor Division at the Buffalo office has to make weekly reports
to the New York State employment service, does it not?
Mr. Brown. I suppose that is their j^rocedure, sir.
Mr. Curtis. Will you see to it that we get copies of those weekly re-
ports ?
Mr. Brown. I will be glad to take it up with them, sir.^
Dr. Lamb. There are a few questions I'd like to ask to see if we can
understand the work of the Labor Supply Division and indicate the
manner in which you cooperate. As I understand it, from what you
have just stated, the Priorities Division is responsible for determining
the communities which are going to be affected by curtailments,
through the presence of representatives of the Labor Division at the
meetings of the industry branches of O. P. M.
Mr. Brown. That is right.
Dr. Lamb. So you are in a position to initiate investigations of these
communities, but you do not, yourselves, conduct these investigations ?
Mr. Brown. I might put it this way : Our people sit almost continu-
ously with the industry branches, as they are called, from day
to day so that when it comes to our attention through the various
representatives we have in these committees or branches that a certain
type of industry, or, for that matter, a particular company, is adversely
affected, then we decide whether to ask the Unitecl States Employ-
ment Service, under the Bureau of Employment Security, to make a
special survey of that community.
reports on lay-offs
Meanwhile they have automatic machinery which is operating all the
time. Instructions have gone out to the staff of the Bureau of Em-
ployment Security and to all the State and local employment offices
that where there is a lay-off involving 50 or more men, or where there
is short timing involving 200 or more men, a special report must come
back to the regional labor supply officer; and as it is found that those
1 The reports to which reference is made appear in this volume as Exhibit 6, p. 8197.
3140 WASHINGTON HEARINGS
conditions are accumulating in a community, the regional labor supply
officer himself can initiate a survey. All that material is coming up to
the Bureau of Employment Security, and to us, so that just as we are
developing information from O. P. M. action at this end, we likewise
have developed an automatic channel, plus special reports from the
field, because we don't want to rely merely on information initiated
at our end.
Dr. Lamb. You emphasized the difficulty of securing satisfactory
figures on the over-all problem which is developing, and indicated
some skepticism on the part of your Division as to its magnitude.
The position which you take, I think, is an understandable one —
namely, that this situation changes fairly rapidly, that there are fac-
tors which are local or limited to a single industry, that contracts are
being let by the Army and Navy which affect these communities, and
so on. And therefore I take it, from w^hat you have said, that your
general policy is to operate a large-scale and well-worked-out over-all
plan and machinery for continuous reporting and keeping up with
developments, rather than to attempt to give out at any one moment
over-all figures which might be alarming and, in your estimation, mis-
leading.
Mr. Brown, That is right.
Dr. Lamb. You described yourself as one of a number of "economic
doctors" dealing with specific cases, and explained that in these surveys
you are making you are using the Bureau of Employment Security
machinery to assist you. To keep the analogy, the relationship between
these physicians would, I assume, be quite close. It would be necessary
for you to know that your prescription for an individual community
had been carried out by the Labor Division.
REABSORPTION PROGRAM UNDER O. P. M,
Mr. Brow^n. Yes, indeed. I serve as a member of the Labor Supply
Committee, and in that capacity am concerned with the operations
of reabsorption, so to speak, of men displaced due to priority action.
However, there are various other channels which we use to secure
reabsorption. The Labor Division is represented on the Plant Site
Board of O. P. M. It is part of our job to be sure that they know of
these communities where lay-offs have occurred, so that in the choice
of location of a plant, where other things are equal, certainly, and
even if they are not equal, there will be an effort made to place the
plant in a community where there have been lay-offs. That is sound
policy in the advancement of the defense ])rogram, because an adequate
labor supply exists there to produce for defense.
Dr. Lamb. However, with res])ect to such placement of plants, the
number of those to be placed will never be in proportion, I assume, to
the placing of contracts which Avould enlist the services of already
existing facilities and men in communities spread throughout the
country.
Mr. Brown. Of course, the contracts are far greater in volume, and
I would say it is better public policy to bring the job to the man in his
existing employment relationship.
Dr. Lamb. I wanted to establish the difference in magnitude and
the possibilities of those two operations. Contract distribution is much
more directly a means of solving this priority unemployment in most
NATIONAL DEFENSE MIGRATION 8141
communities. Now, as I understand it, your division operates at two
extremities of the process — first discovering prospective lay-offs, either
from presence on the priorities committees or through the machinery
you describe, coming up from tlie field regional offices ; and second, at
the other end, assisting in the location of contracts for plant sites at
exactly the right point to take care of the problem.
CLEARANCE COMMITTEE
Mr. Brown. We do what may be described as both the public health
job and a case-practice job. In our public health job, we are watching
curtailment of manufacture of automobiles, refrigerators, washing ma-
chines, and such, and curtailment in the use of aluminum, copper, and
other materials, to see that the impact of each is cushioned to permit
adjustment, giving the overwhelming importance to the defense pro-
gram. We never question for a second anything that is necessary for
the greatest efficiency of the defense program. But if it would add
to the efficiency of the defense program to make an adjustment in this
or that direction, it is our job to watch that and in consultation to
bring it up to Mr. Nelson. I sit on the clearance committee through
which all these orders go before they go to Mr. Nelson. It is merely
an advisory committee. That gives us an opportunity to discuss the
labor-displacement aspects of the matter at the other extreme, after
the curtailment has affected the community, and taking the more
extreme cases, we pick it up at that end.
Dr. Lamb. So it is essential that you keep close tabs between the two
ends of the operation. Consequently, the success of what has come to
be called the Buffalo plan or its equivalent, from community to com-
munity, is directly related to the success of your operations, is it not?
Mr. Brown. Yes, indeed.
Dr. Lamb. That is to say, the Buffalo plan can't work unless con-
tracts have been let in the community which will take up the slack,
whatever the machinery for transferring the workers from one job to
the other.
BUFFALO PLAN
Mr. Brown. The Buffalo plan is in essence, a method of transfer or
a facilitation of transfer. On the curtailment side, the fact that the
auto industry went down under curtailment orders was a condition
with which we were concerned. The fact that contracts went into
Buffalo for aviation and certain other things was a condition with
which we were concerned from the manpower side. As an operational
matter, Labor Supply, with the Employment Service, had a very im-
portant job to perform in bridging the gap Hetween the lay-off here
and the pick-up there.
Dr. Lamb. In the case of Buffalo, the contracts were already let.
Mr. Brown. That is right.
Dr. Lamb. Prior to the announcement of the Buffalo plan.
Mr. Brown. Yes.
Dr. Lamb. And in fact our information from our field investigators
is to the effect that the employment which was made possible at the
time the Buffalo plan was announced was largely due to the avail-
ability of these jobs at the moment. The aircraft and other defense
jobs were open. In fact, we have also — and I'd like to check this with
3142 WASHINGTON HEARINGS
you — the impression that most of the workers involved were employed
by these companies prior to the announcement of the Buffalo plan.
FUNCTION OF O. P. M. LABOR DIVISION
Mr. Brown. There is, of course, a very normal process of transfer.
The worker has initiative to seek another job, and through the employ-
ment service system, he is assisted and directed to it. That is the normal
process. The function of O. P. M. Labor Division is, you might say,
to help oil the machinery, and we all know that every employer, in his
employment procedure, follows certain patterns. He likes people of
certain ages or men of certain training. The job from the O. P. M.
standpoint is to help build up a community attitude, and a willing-
ness on the part of employers, because this is defense, and it is an
emergency, to broaden the scope of their hiring, to take men dis-
placed from other plants in their own community.
For example, an employer may say, "These men are laid off by
this other employer, and in 6 months they will be reemployed by him."
And O. P. M., through its representatives can say, "Despite that fact,
it is important in your community, and in helping in the defense
program, to take those men even for 6 months, because they are trained
men, whose services we don't want to lose in the defense effort."
Dr. Lamb. In this particular instance, the employment which these
men secured in the aircraft and other companies was for the most
part not secured through the assistance of the employment service.
Is that correct?
Mr. Brown. I would say that is normal. The figures, as I remember
them, in England, where the employment service has been developed
to a high degree of effectiveness, show about one out of five place-
ments were made through the employment service. A large amount
of the initiative in securing a job must come from the individual.
EFFECTIVENESS OF BUFFALO PLAN
Dr. Lamb. A^^iat I am concerned with here is how your Division — by
that I mean the whole Labor Division — is in a position to assert that,
for example, the Buffalo plan is a success, if it does not have a complete
record of all the persons laid off and all the reemployment records
on those persons.
]Mr. Brown. I wasn't in Buffalo. I know of the development
through being on the committee at the Washington end. I think that
what was felt by those in charge was that this method — counting on
community cooperation to bridge this job-to-job step — was highly
desirable, and that the response in the Buffalo community was favor-
able. As to the number of people who were actually placed, I don't
know the figures. I am sure they were not as favorable as anyone of
us would like, because there are various resistances, either from the
individual worker or from the employer. It often happens that the
man does not get the job in another plant in the community, but moves
out to some other place, goes back to the farm or to some other town,
and someone else comes in and gets the job. Now, the best thing we
can do is to be sure he gets a job and the defense plant gets full
employment.
NATIONAL DEFENSE MIGRATION 8143
Dr. Lamb. How do you know that he ^ets the job? This commit-
tee wants to know what success the Buffalo method or other methods
are havinoj. In the second place, we are interested in the Buffalo
plan itself, because it has been offered as a model, and if the model
was not successful, it calls in question the general methods, particu-
larly when you had such favorable circumstances as you had in
Buffalo, where the airplane plants were expanding rapidly when the
Buffalo plan was announced, and took workers even before the
machinery of transfer was set up.
Consequently^, the real question is as to the method, and I am asking
about the way in which the employment service can keep track of these
people to enable you to have an accurate count. For example, your
own figures, given us at Detroit, indicate that 44 percent of those who
had found jobs, to your knowledge, found them on their own, and 40
percent found them with the assistance of the employment service;
and of those 40 percent who found them with the assistance of the
employment service, a good many cannot be checked with the em-
ployers, according to our information from the State employment
service, because the jobs which they secured are described in lump,
and the employers have never given a list of employees hired who
came from the original plants.
Mr. Brown. I would say that is normal. The proportion using the
employment service — that is, 40 percent — is fairly high, and indicates
that in an emergency a larger .proportion use it than otherwise. When
a man loses his job, he hears of other openings; he has worked previ-
ously in the Detroit areas, and so forth ; he is known there. His tend-
ency is, rather than use the machinery, to go direct. I think anyone
of us would. We first try out our best chances, then we fall back on
the employment system. So we register to get unemployment insur-
ance, and meanwhile they go to work for us, using the machinery.
The first 44 percent of the cases had contacts. The next 40 percent
were the ones who used the employment service, and even some of
those went out and got jobs individually.
Dr. Lamb. My point is that figures show 40 percent who we know
have found jobs through tjie employment service, and 44 percent who
found jobs themselves, and these figures are far short of the total
of 3,500. By comparison with the 3.500 they account for only 1,250.
On top of that, the number who actually registered with the employ-
ment service and who didn't find jobs but who went into training is
quite large, and of those who went through training and found jobs,
the wages received are far below those of the ones who went direct
and found jobs for themselves.
Mr. Brown. My only answer is that in the handling of human
beings, when you are trying to assist them in a readjustment in their
work, you never get perfect results. Wliat you try to do is the best
you can. As a student of the problem and as a member of the ad-
visory committee of the Social Security Board, apart from my OiRce
of Production INIanagement relationship, I would say that as far as I
can see, the Buffalo plan is the best we can develop to help in this
situation.
Mr. Curtis. I am trying to figure out what this method, or Buffalo
plan, is. I have some of these figures before me. Up there in
Buffalo 3,200 men were laid off by General Motors, and by September
17, we learned that 1,275 had been reemployed, and then there were
gl44 WASHINGTON HEARINGS
about 781 of whom there was no record, and 1,003 didn't have any
job.
Now, in spite of that 1.003 who didn't have any jobs, there were
3,000 who had been reemployed or were hired by defense employers in
the area at that time. Three thousand people were employed, and
we have a record of the use made of the emplojanent service.
I realize that none of these plans works very well. What was the
Buffalo plan? Did you have an agreement or procedure by which,
at a given date when these men went out of work, there was an agree-
ment entered into that they go to work over there ? Was it written ?
Mr. Brown. That was under the labor supply branch, Labor Di-
vision. Commissioner Flemming is chief of that. But I will tell
you to the best of my ability. My understanding was that the labor
supply branch went to four of the principal employers of Buffalo and
said, "See here, as an advantage to the community, as sound public
policy, we would like your cooperation in the reemployment of these
fellows who were laid off."
Mr. Curtis. What else did they do ?
VOLUNTARY COOPERATION
Mr. Brown. It was a case of voluntary cooperation. There was
no pressure or power on the part of O. P. M. to compel. The prin-
ciple of free enterprise dominated the action. What was asked was
their cooperation. Now, the idea was that the employment service,
the employers and labor groups, all having a common interest in help-
ing to lick this problem in Buffalo, would cooperate to get those men
reemployed.
]\Ir. Curtis. They made a call on these four people standing with
defense contracts, and explained the situation and asked them to take
these men on, but no formal procedure or contract or agreement was
entered into for the transfer of these people. Is that correct?
Mr. Brown. It was through the New York State Employment
Service.
Mr. Curtis. Did they have a written or formal agreement of any
kind?
Mr. Brown. The agreement would be only a policy agreement
anyway. The only specific thing would be that employer X would
hire employee Y. X would say, "It's on the level that I am willing
to cooperate. I will employ to the best of my abilit}^ as many of
these fellows as I can, because of matters of skill, training, and age,
which affect the employment of an individual."
Now, O. P. M.'s interest was that those employers be as liberal as
possible to broaden the scope of their employment procedure, to take
as many as they possibly could.
The Buffalo plan was merely an effort on the part of the O. P. M.
to impress upon those who were hiring men to take fellows who had
lost their jobs and facilitate through the employment service the
actual registration and placement machinery. That was a normal job
of the New York State Employment Service, but O. P. M. was inter-
ested in encouraging and helping them in any way in the develop-
ment of adequate machinery, such as arranging for more interviews
and so that men could come in the evenings, getting cooperation, as
I surmise — I am not sure of this — through the State employment
NATIONAL DEFENSE MIGRATION 8145
service, or regional labor supply committee, enabling these men to
come to the employment offices evenings, and have interviews, making
it easier for the men laid off to register, and encouraging in individual
companies the hiring of these men.
NO TRANSFERS EN BLOC
Mr. Curtis. Then the answer would be that no plan was worked
out to transfer those men en bloc from one plant to the other?
Mr. Brown. It couldn't be.
Mr. Curtis. There was no plan to transfer them individually and
check back?
Mr. Beoavn. As a student of industrial relations, I don't see how an
employer could guarantee ahead of time to take a certain individual
employee.
Mr." Curtis. Then the result in Buffalo wasn't any different from
what it might have been if the mayor of the town had made a procla-
mation and said, "I would like you to hire these men."
Mr. Brown. No; I think there was a very real difference, because
the agency that had to do with production for defense in Washington
felt it was sufficiently important to have its people go to Buffalo and
help build up public attention, and the cooperation of companies to do
this job.
Mr. Curtis. Those defense expanding plants wanted skilled workers.
Mr. Brown. Yes.
Mr. Curtis. And those workers wanted jobs, and they would have
thought of that if O. P. M. hadn't.
Mr. Brown. No. When an employer goes out to hire people he has
certain specifications. Some employers like farm boys, others like
older people, or younger people. Some would rather take new men
and train them themselves, and others take men already trained. But
when a certain bloc of men is laid off across the street, it isn't necessary
at all that the employer on this side of the street go over and employ
those men, lock, stock, and barrel. He has his own individual pattern
of employment procedure.
Mr. Curtis. Which is what the Buffalo plan didn't do?
Mr. Brown. I think it did, but I would assume there is no way of
testing it. Probably the figures that you mentioned, of 1,275 reem-
ployed, might have' been 800 or 600 if there hadn't been this added
impetus. The question whether anything could have been done to raise
that figure by another thousand is anybody's guess. It was a first
attempt, and done with entire good will, and probably the Labor
Supply Branch learned a lot and will be able to get a better response
in the future.
Mr. Curtis. There were a lot more jobs available in expanding de-
fense plants than you placed.
Mr. Brown. That is true, but let's put ourselves in the position of the
employer in those expanding defense plants. We feel we are free citi-
zens. We are free enterprisers. We have to lick the defense job, but
we have certain opinions as to what type of employees we want to hire.
The men laid off by the automobile company will be used again by the
automobile company. One employer says, "I will take new men from
the country because they will be with me indefinitely. If I take these
automobile workers they will be back in their old jobs in 6 months
and I will have to hire somebody else."
§]^46 WASfllNGTON HEARINGS
Mr. CuRTTS. That is what I am getting at. This whole thing de-
pends on many and varied factors and reasons. The Buffalo plan
wasn't a plan to abridge those.
Mr. Brown. No magic. Yon just did the best job you could and
developed as much response as you could.
The Chairman. It was simply a volunteer plan.
Mr. Brown. That is right.
The Chairman. Creating the psychology of taking care of fellows
who wouldn't otherwise be taken care of.
Mr. Brown. That is right.
The Chairman. It was volunteer, but you were attending to some-
thing that was not attended to at all before.
Mr. Brown. That was the mechanism of the employment service,
but the O. P. M., with its national status, came in and said, "It is im-
portant in the defense program that this be done." And immediately
it affected judgments and attitudes of people who might otherwise not
have been influenced.
I3IP0RTANCE OF UNITED STATES EMPLOYMENT SERVICE
The most important agency in all these placement operations is, of
course, the United States Employment Service. It has 32,000 em-
ployees. There have been millions and millions of dollars spent by
the Federal Government to build it up. It has 1,500 full-time offices,
and, like the post office, it is a tremendous national machine. But at
a time like this it has to be helped along and built up, and where a
serious displacement occurs, as in Detroit, it is natural that the
O. P. M. or any other defense agency should come in and help that
machinery along and obtain public support and good will.
Mr. Curtis. Mr. Brown, I have before me here a release bearing the
date of August 9, 1941, from O. P. M. This is the first paragraph :
Machinery set up through Government, management, and labor cooperation for
remployment and training of 3,600 displaced automobile workers in the Buffalo
industrial area should serve as a national model in overcoming the unemployment
created by shut-dovpn of nondefense plants. Acting Director General Sidney
Hillman, of Office of Production Management, said today.^
INTANGIBLE DIFFERENCES IN BUFFALO PLAN
Now, I have tried to follow your testimony, but as nearly as I can
figure out, that plan constituted an appeal to the employers to hire
ihese men, and assistance to the employment service of some few inter-
viewers and a few hours of their time.
Mr. Brown. I think you have taken some of the flesh off the bones,
which gives life to a thing of this sort. It is difficult to take up point
by point what a procedure is that makes it worth while. I might say
I am entirely convinced that the type of job done in Buffalo is worth
while. It is difficult toi spell out the difference between that and the
utterly automatic method of having men go down to the employment
office, wait for jobs, and have the employer decide whether or not he
goes to the employment office to seek men. What was done involves
a good many intangible differences, but the most important one is not
the change in machinery, but the change in attention given to that situ-
1 See Exhibit 3, p. 8184.
NATIONAL DEFENSE MIGRATION 8147
ation by the agencies of Government and the cooperation obtained by
both the men and the management in nsing whatever machinery was
available.
Mr. Curtis. Bnt yon will admit that there was no tangible and for-
mal agreement entered into, written or oral, for the transfer of any
men?
Mr. Brow^n. I wonld not want to answer that, because I am not sure,
but I can find out for you.
Mr. Curtis. There was no system to check individual cases, as to
which came to the employment service and which did not?
Mr. Brown. I think there was, because that is the normal employ-
ment service procedure — keeping record of interviews. This is a free
country. A man quits on Saturday afternoon and goes back to the
farm. I don't think we as individuals would want him tagged, so to
speak. If he does not want to come to the employment service to regis-
ter for his benefits, I don't think we want at this stage to force him
to report.
Dr. Lamb. But what about the men who did not register with the
employment service but were placed with the employers ? As I under-
stand it, there is no record of the number of men who have been on the
employers' rolls, but only over-all figures from these four companies as
to how many former Chevrolet workers have been employed.
COST OF LABOR-MARKET SURVEY
Mr. Brown. May I use this illustration? I am chairman of the
Social Security Committee of Social Science Research Council. We
have been very much interested in labor-market surveys, to know just
where individuals go, from here and there. In order to do that we had
to spend $60,000 additional funds to make a study in Fitchburg, Mass.,
and two other communities. It took a tremendous lot of tnne.
Dr. Lamb. But you did not have the support of the O. P. M., and
this particular instance — the Buffalo plan — has been celebrated as per-
haps the outstanding success of the O. P. M. Labor Division. You
have, in this particular instance, no record of what became of these men
who were employed by the very employers to whom you appealed.
Mr. Brown. The study in Fitchburg took over a year. They had
to go through the employment records — that is, individual names, pay
rolls, and so forth. I can assure you that if time were given for field
surveys, for the study of pay rolls, you could find exactly what hap-
pened to most of these emploj^ees.
Dr. Laimb. These things happened side by side in Buffalo: 3,200
workers were laid off and several defense contracts were signed. The
rolls of the Bell Aircraft Corporation could be checked, especially if
they were in alphabetical order.
Mr. Brown. But those are the easy ones. Where it is hard is where
the man left Buffalo and got an even better job out of town.
Mr. Curtis. Was this leaving Buffalo part of the Buffalo plan?
Mr. Brown. No ; but it's part of human nature.
Mr. Curtis. I agree with you that you can't change human nature.
That is the reason I am not so excited' about Buffalo.
gl48 WASHINGTON HEARINGS
BUFFALO PLAN A STEP IN RIGHT DIRECTION
Mr. Brown. It was a step in the right direction. It was a first step
taken in using more effectively the greater public response to machinery
for transferring men from one job to another. We have a lot more
to do. It is a huge job, and O. P. M. as much as any agency of
Government is the first to ask the advice and help of all public offi-
cials in doing its job, because it has a pioneer job to do.
Dr. Lamb. In closing this particular part of the discussion, I think
it ought to be emphasized that there were laid off by General Motors
3,244 men, and 6 weeks later, as of September 17, 1941 — these figures
are from the galley proof of the material submitted at our Detroit
hearing by the O. P. M. Labor Division ^ — as of September 17, 1941,
there were reemploj^ecl and working 803 from those registered with
the employment service, or approximately 25 percent of the total, and
that figure of 803, as I understand it, was statistically arrived at by
lumping the employers and not checking individual cases.
In addition to this, about 472 not registered with the employment
service had found employment themselves, and there again there is
an absence of check.
One other question about Buffalo. Do you happen to know for
what period of time the representative of O. P. M., Labor Division,
was in Buffalo?
Mr. Brown. I don't know, sir. Of course, the regional labor supply
committee is operating continuously. It is district 2 for New York
State. It would be a question of how frequently they reconsidered
the Buffalo situation.
Dr. Lamb. My information is that all the work of follow-up after
the meetings were held fell upon the State employment service, and
that they are expected to do the entire job.
RELATIONSHIP OF AGENCIES
Mr. Brown. May I explain the relationship there? The State-
Federal Employment Service is tied into the labor-supply committee.
It is a part of the Labor Supply Branch of O. P. M. You see, the in-
tention was that O. P. M. should use, wherever possible, other agencies
of Government, rather than duplicating, and it has had very good co-
operation from the employment service. It would be quite wasteful
for them to duplicate. I can assure you that O. P. M. appreciates
tremendously the fact that New York State did carry on, and the
fact that O. P. M. didn't have to have men there all the time.
Dr. Lamb. My impression from the report of the investigator is that
the State employment service does not appreciate the burden which is
placed upon it and the lack of continuous assistance for particular
emergency situations of this kind and would appreciate some machin-
ery whereby the O. P. M. could keep, for the duration of at least the
peak emergency period, representatives in the area to assist them.
Mr. Brown. Which would be reflected in a request on our part for
a very considerable additional budget. To lick the job of labor supply
in this country will require a very substantial additional budget and
additional funds to the employment service. But I am no expert on
that.
^ See statement by Eric A. Nicol, Detroit hearings, part 18, p. 7491.
NATIONAL DEFENSE MIGRATION 8149
Dr. Lamb. There is another question I would like to ask with respect
to the automobile lay-offs. Is there any way in which a more com-
prehensive scheme than the Buffalo plan, or than the one worked out,
for example, between General Motors and 13, A. W., could be put in
force, whereby curtailments would be foreseen sufficiently in advance
so that placement of individual workers, either in a job or in training
for a job, could be part of a comprehensive and forward-looking
arrangement? I ask for this reason: It seems to me that if it can
be foreseen that as of the 1st of January, for example, a certain number
of workers will be laid off' by a given company, and the management
can tell you what plants will be involved, you could institute a pro-
gram 3 months in advance for training and placement. Is that
being done?
PROGRAM FOR EMPLOYEE REABSORI'TION
Mr. Brown. Yes, indeed. You haven't asked me concerning other
procedures that we are following. In the case of the automobile
industry, in the very first curtailment programs, w^e had both man-
agement and men in Washington discussing the various remedial
steps involved in cushioning the slack and getting those men into
defense production.
The plan involves adjustment of hours, both on the civilian auto-
mobile employment and on the defense production, including the
question, should the automobile industry go into four-crew opera-
tions— that is, four 40-hour-week shifts — which would take four times
as many men. If, on the other hand, the automobile industry drops
to 32 hours — and it has in some cases — that makes a ratio of men to
facilities of 5 on the defense side to 1 on the nondefense. In other
words, it pulls men into defense production that much faster, and
tends to hold them in civilian production that, much longer by
spreading the work in the civilian.
There were also discussions on the status of the men to be trans-
ferred, in point of seniority and training. I might say that the
three major companies certainly have very adequate training facili-
ties, compared to many other corporations.
In addition, there were the questions of additional contracts going
in there, the type of contract, the tank program, the questions of
which communities should receive subcontracts. We have a working
arrangement with 3 large motor companies now, whereby there is
a two-way channel of communication as to which are the cities where
they could place subcontracts and supply orders within their own
corporation ; and from our end as to which are the communities where
it would help most to do it. If there are 20 different communities
that are able to produce a part for a tank or anything else, within
the General Motors organization, they are taking our advice as to
which of those 20 should be selected. The fact that other firms in
some of these areas are adversely affected makes it desirable to dis-
criminate in this manner. We are seeking the cooperation of all
prime contractors for that sort of thing because they involve, through
their orders, billions of dollars. It isn't a question of location of
contracts from Government alone, but likewise the subcontracting
jobs done by the big contractors.
The Chairman. Thank you very much. We are a little bit behind
•our schedule. We appreciate your coming here.
8150 WASHINGTON HEARINGS
(The following letter and statement were received subsequent to
the hearing, and, in accordance with instructions from the chairman,
were made a part of the record :)
November 14, 1941.
Hon. John H. Tolan,
House Committee Investigating
National Defense Migration,
Congress of the United States, Washington, D. C.
My Dear Congressman Tolan : Attached is a statement that I have written
in answer to the request submitted in your letter of November 1.
. In my statement I have tried to be as brief and concise as possible, realizing
that a large volume of statistics could be compiled on the various subjects
discussed in my statement.
I am enclosing some lists of firms in industries that have been or are likely
to be affected by priorities on materials or by production curtailment programs.
Also, I am enclosing a sample copy of a community survey indicating the kind
of material that we have on a large number of communities. These lists and
other material are confidential. I request that tliey not be made a matter of
public record.'
Since Mr. Flemming has already submitted material to you regarding the
Buffalo plan, for the publication of which arrangements have already been
made, I am following your suggestion by not submitting further material re-
garding the Buffalo plan.
The enclosed statement, I hope, is the sort of material that your committee
wished to have.
Sincerely yours,
J. Douglas Brown,
Chief, Prioritiss Branch, Labor Division.
550 House Office Building,
November 25, 1941.
Mr. J. Douglas Brown,
Chief, Priorities Brancli, Labor Division,
Office of Production Management,
Social S.ecurity Building, Washington, D. C.
Dear Mr. Brown : This is to acknowledge receipt of your letter of November
14, with the accompanying statement, wliich we are including in our record,
together with your testimony before this committee.
In order to be able to evaluate more fully the priority unemployment problem
and to check on the effectiveness of existing programs, our committee would like
you to submit for the record brief summaries of the conditions in each of the com-
munities which your agency has surveyed. We would, furthermore, like you to
indicate which of these communities have already been certified and what favor-
able results have been accomplished in each case as a result of tlie present
certification procedure.
If these summaries are already available, we would appreciate it if you could
forward them to us immediately, so we could include them in our record of the
Washington liearings. If they are not immediately available, could you forward
them to us at as early a date as possible, so that we may include them in the
record of our next hearing?
I wish to thank you again for the material which you have already presented
to the committee.
With all good wishes, I am,
Sincerely yours,
John H. Tolan, Chairman.
* Material referred to as confidential is held in committee files.
NATIONAL DEFENSE MIGRATION 8151
STATEMENT BY J. DOUGLAS BROWN, CHIEF, PRIORITIES BRANCH,
LABOR DIVISION, OFFICE OF PRODUCTION MANAGEMENT, WASH-
INGTON, D. C.
November 13, 1941.
There are certain difficulties in attempting to supply your committee with the
detailed information that was requested. I shall, however, attempt to answer as
hest I can the items which the committee has listed in outline form.
The industries whose production will be curtailed or limited by material short-
ages and allocution programs would include most industries in this country — all
those that use the metals under priority, certain chemicals and various imported
products. A list of the materials already subject to priorities and curtailment
orders would indicate how widespread the effects of such priorities and curtail-
ment orders will be. The following are some of the industries that have already
been affected or are likely to be affected in the near future: Automobiles, silk
manufacturers, refrigerators, vacuum cleaners, furniture manufacturers, office
appliances, cooking utensils, sewing machines, radios, metal fasteners, iron and
steel foundries, brass foundries, cleaning establishments, producers of various
textile products using silk, rayon, nylon, and various scarce chemicals, building
construction, rubber tires, other rubber goods, washing machines, coin machines,
jewelry and ornaments, electrical household appliances, stoves, tableware, in-
candescent lighting, manufacturers using cork, electroplating establishments, die-
casting establishments, and agricultural implements.
COPPER CONSERVATION ORDER
Conservation Order No. M-9-C curtailing the use of copper prohibits over 100
different uses of copper after December 31 and curtails all other uses, except for
defense and the conduction of electricity, to 70 percent of the firm's copper con-
sumption in 1940. This order alone will affect over 100 different industries. The
shutting off of virgin aluminum for practically all nondefense purposes and similar
curtailment of scrap aluminum for nondefense has also affected a large number
of industries.
The Bureau of Labor Statistics has made estimates of factory wage earners in
a large number of the industries mentioned above. For example, the Bureau esti-
mates that there are 29,900 wage earners in the jewelry industry ; 54,600 in
the stove industry ; 36,600 in the aluminum-manufacturing industry, including cast-
ings, shapes, and aluminum ware ; 75.900 in the agricultural-implement industry,
including tractor manufacturing ; 50,600 in the refrigerator industry ; 9,300 in the
domestic washing-machine industry; 186,6no in the wood- and metal-furniture
industry; 62,500 in the radio industry, including the manufacture of phonographs;
46,200 in the business-machines industry; 65,700 in the rubber-tire industry;
64,600 in rubber goods other than tires ; and 10,100 in the sewing-machine industry.
It is impossible to predict the trend of employment in the various industries
already mentioned. The trend of employment in each industry depends upon the
scarcity of the materials for nondefense purposes, which in turn depends upon
the availability of ships for importing and the rapidity with which defense pro-
duction consumes scarce materials. It also depends upon the extent to which
these industries are able to obtain defense work and to engage in defense produc-
tion. For example, it would have been impossible to predict in August that em-
]-.loyment in selected IMichigan automobile plants during the week ending October
25 would amount to a total of 347,189 compared with a total of 355„371 represent-
ing the peak employment total for these same plants as reported in May or July
before the change-over.
We have lists containing the names and locations of firms in a large number
of industries that have been or may be affected by material shortages or pro-
duction cui-tailment programs. Let me emphasize that the lists for the various
industries are not complete.
Reductions in working time or lay-offs from a few hours to a number of weeks
have occurred in thousands of plants in this country because of material short-
ages or allocation programs. In our files we have records of hundreds of firms
which have either experienced lay-offs or reduced working time or anticipate
that they will experience reduced emplo.vment because of priorities. Although a
list of such plants might be compiled, the degree to which the firm has been
affected or threatens to be affected and the period of time that the firm will be
affected is not always certain, so that the compiling of such list presents numer-
ous difficulties.
A large number of communities have been affected by material shortages and
curtailment programs.
60396 — 41— pt. 20 — —10
3][52 WASHINGTON HEARINGS
COMMUNITY SURVEYS
We have surveys of over 100 communities in vphich one or more plants have
been affected by priorities or threaten to be affected by priorities. The Labor
Division, in collaboration with the Division of Contract Distribution, has already
certified to the armed forces for special consideration more than a dozen com-
munities that are threatened with serious priority unemployment. The com-
munity surveys range from 3 to 20 pages in length, and generally include a statis-
tical summary. In addition, we have material on hundreds of other communities
Indicating that one or more plants in the community have experienced or are
threatened with curtailed employment because of priorities. The staff of the
committee is thoroughly familiar with all this material. Representative ex*
amples of community surveys are being submitted.
There are various ways to alleviate dislocations resulting from priorities and
production curtailment programs. One obvious way is to assist the firm to
convert to defense work. In this way effective working forces can be maintained
intact so that the working unit is not disrupted. The problem of assisting firms
to convert to defense work falls primarily under the jurisdiction of the Division
of Contract Distribution. However, the Labor Division has talvcn an active part
in programs for the spread of defense work. For example, I participated in the
negotiations that led up to tlie program adopted by the Office of Production Man-
agement Council on August 19 and embodied in the Army directive of Sep-
tember 5, by which communities threatened with serious priority unemployment
may be certified to the armed forces for certain special considerations in the
letting of defense contracts.
COMMUNITY CERTIFICATION
So far over a dozen communities have been certified to the armed forces by
the Office of Production Management, beginning with Manitowoc, Wis., which
was acted upon by the Labor Division on September 11, and which received its
first contract under the certification procedure on September 24. In addition to
the certification of communities for special consideration in the letting of defense
work, there are other means of avoiding or alleviating dislocations and labor
displacement as a result of priorities. The concern may be able to utilize
substitute materials that are not under priority or that are less scarce. This has
occurred on a widespread scale — indeed, so widespread that it renders any col-
cuuriHons of displacement based on previous consumption of the materials invalid.
In addition to the utilization of substitutes or conservation on the use of
the material, dislocations and labor displacement may be modified through
allocations of the material in certain ways. The Priorities Branch of the Labor
Division has staff members assigned to each of the commodity or industry
branches of the Office of Production Management, who are there for the pur-
pose of anticipating labor displacement and working out programs for alleviating
or remedying such displacement. Many allocations have been made bearing in
mind the effect of such allocations upon employment In the community or in
the industry. Where small amounts of material will keep a large number of
workers employed, such factors have been borne in mind in making allocations
of the material.
Where the firm, for various reasons, does not convert to defense, where the
community is not certified, where substitution or conservation have not been
pursued, and where allocations of small amounts of material will not solve the
prfiblem, it may be necessary to transfer and train the workers for some type
of work in another firm. The transfer and training of employees is part of
the work of the I-abor Supply Branch of the Labor Division. The success of
the certification procedure and of obtaining small amounts of "critical" materials
in order to avoid large lay-offs, both of which fall within my branch of the Labor
Division, depends upon one's definition of success. We have, in numerous
instances, been able to avoid sizable lay-offs by obtaining material for certain
firms which either had not been receiving their equitable share of the material
or which were in the process of conversion to defense work, and whose staffs
would be disrupted if they had not received this material prior to the completion
of their program for conversion.
It is a little early to attempt an evaluation of the success of the certification
procedure. Following certifif-ation, contracts are placed in the certified com-
munity. However, it takes some time before contracts placed can be transformed
into increased employment in the community. Nevertheless, we are now planning
NATIONAL DEFENSE MIGRATION 8153
to withdraw certification from certain communities wliere it appears tliat suffi-
cient defense worli lias been placed, so that over a period of time there will not
be a serious problem of priority unemployment unless certain unforeseen changes
occur.
EFFECT OF CERTIFICATION
Mansfield, Ohio, for example, has received prime contracts from the Army for
$6,350,000 since certification, and in addition $380,000 of subcontracts on ord-
nance material alone. Furthermore, one company there is apparently in line for
work on an item in connection with cliemical warfare. Since the labor costs
will perhaps average 35 percent, the contracts already placed in Mansfield since
certification will amount to a pay roll of over $2,000,000, which presumably will
be spread over a 10-month period. In addition, Westinghouse has indicated that
they will transfer to their Mansfield plant as rapidly as it can be arranged
some of the defense work that they have been carrying in their eastern plants.
The certification procedure has not been so successful to date in Meadville,
Pa., because the equipment of Talon, Inc., is specially designed for producing
zippers, and zipper-making machines cannot be used for military items. Con-
sequently, in this case it would be necessary for the concern to put new equip-
ment into its present plants in order to engage in defense work in buildings other
than its present toolroom. Through allocations and a program of conservation
and substitution, this company has been able to carry on operations at 75 per-
cent of normal so that it has not felt impelled to change its plants over to new
types of defense business.
The success of the certification procedure depends upon the willingness of
concerns to bid for defense business. This most companies under present
circumstances are very ready to do. Consequently, we do not anticipate future
difficulties of any magnitude on this particular score.
We plan to cope with dislocations due to priorities according to the pattern
that has already been established, which includes certification of distressed
communities, allocations of materials to firms where a small amount of mate-
rials will prevent a large volume of unemployment or where failure to receive
materials would impair a program of conversion from nondefense to defense
work, the use of substitute materials and measures for conservation, the train-
ing of workers for defense work, and the placement of displaced workers in
defense employment.
The Chairman. Our next witness is Mr. Biddle.
TESTIMONY OP EEIC H. BIDDLE, CONSULTANT, AMERICAN PUBLIC
WELFARE ASSOCIATION, WASHINGTON, D. C.
The Chairman. Mr. Biddle, we are pleased to have you here with
us this morning. Would you please outline for the committee the
main features of the program developed by England for transferring
labor from areas of declining industrial activity to more active areas,
indicating to what extent migration is voluntary or compulsory and
what allowances are made for lodging, transportation, the moving of
families, and for meeting any continued liabilities in the area left ?
Mr. Biddle. May I ask the indulgence of the committee? I have
been back a fairly short time and have been rushed about the coun-
try on a number of activities in connection with my mission. I am
testifying on very short notice, and with very inadequate preparation.
The Chairman. We will give you all possible latitude, Mr. Biddle.
Your prepared statement will be entered as a part of the record.
8154 WASHINGTON HEARINGS
(The statement referred to above is as follows:)
STATEMENT BY ERIC H. BIDDI.E. CONSUI>TANT, AMERICAN PUBLIC
WELFARE ASSOCIATION, AVASHINGTON, D. C."
BiiiTiSH Manpower and the Wak
(HOW IT IS JI0GILIZI';D HOW DISTRIBUTED — HOW CONSERVED)
The following statement is presented in three parts :
Part I. Mobilization and distribution of manpower.
Part II. Brief outline of recent changes in British social security measures.
Part III. Labor policy and administrative methods.
I. Mobilization and Distribution of Manpower
From the viewpoint of the American observer, the administrative machinery
for the mobilization of Britain's manpower for the armed forces and war
industries possesses one outstanding characterstic. And that is the centralized
responsibility of the Ministry of Labor and National Service for all matters
relating to manpower. Thus, since the beginning of the war, the Minister of
Labor and National Service has been made responsible for the registration
of men called up for national service (this applies to the call-up for tlie
military service and essential war industries) ; the application of the Schedule
of Reserved Occupations ; the combing out of skilled men from the armed
forces as they have become more urgently needed in growing defense indus-
tries; regulating the distribution of labor between occupations according to
war-time priorities; transferring workers needed in defense industries located
at some distance from their homes ; the organization of a comprehensive sys-
tem of industrial training ; provision of war-time health and welfare facilities
for workers.
Meanwhile, through the local Labor Exchanges, the Ministry has carried on
its day-to-day work of administering Unemployment Insurance and the public
employment service. Furthermore, the Ministry carries on its established ma-
chinery for dealing with industrial disputes ; namely, the conciliation service, the
National Arbitration Tribunal, etc. Also, since the beginning of the war, the
Factory Inspection Services have been transferred from the Home Office to the
Ministry of Labour and National Service.
Thus, it will be seen that Parliament has vested in the Ministry of Labour
and National Service substantially all ofthe functions which, in the United
States are carried out by the Department of Labor, the Labor Supply of the
Office of Production Management, the Employment Security Division of the
Social Security Board, and insofar as they are comparable, the services
cor re.spon ding to those which are administered in the United States by the
National Labor Relations Board and the Selective Service system. Moreover,
account might also be taken of the still further diffusion of responsibility
in the United States resulting fi-om the fact that some of these responsibilities
are vested in tlie governments of the several States.
During the last war. the above-mentioned functions- relating to labor supply
were in Britain disiiersed among an even greater number of agencies than
we now have in the United States for that purpose. In other words, from the '
experience of the last war, Britain learned to concentrate administrative responsi-
bility for all manpower questions under the Ministry of Labor and National
Service.
The ob.jective of the Britisli manpower policy has been to mobilize and
augment its labor forces and to arrange for its distribution between alternative
uses. The manner in which this is accomplished might be conveniently divided
into these three stages :
{a) To withdraw from the total available manpower the several million men
and women needed for the armed forces and the civil defense services.
1 In addition to tlie official documents mentioned in the statement, material made avail-
able bv I'olitical and Economic I'lanning, London, contributed greatly to the preparation
of this statement. The author is also Indebted to Dr. Carter Goodrich, of Columbia Uni-
versity, who has recently returned from a mission to Britain, for the material which he
made available and for his valued suggestions.
NATIONAL DEFENSE MIGRATION 8155
(ft) To provide the necessary manpower to maintain the output of goods and
sei-vices for the armed forces and for essential civilian needs. This stage involves
not only the employment of those who were at the time unemployed or unoccupied
but also the provision of adequate resources for industrial training and retraining
and the transfer, on a large scale, of men and women from less to more essential
work.
(c) To bring about the maximum of efficiency of all woi'kers. In this connec-
tion, the British have found it necessary and desirable to increase the scope of
existing social services and to add a number of new social services which will
later be referred to under this heading.
A. MANPOWEE FOB THE AEMIU) FORCES AND CIVIL DEFENSE
Men registered for the armed forces are "reserved" from military service at
specified ages in cases where they are in one of a great variety of skilled occupa-
tions. Thus, certain skilled workers are "reserved" in civil occupations if above
the age of 25. In other occupations, reservation takes place at age 30 or 35. The
purpose of the schedule is to enable the demand for men for the service to be met
with the least possible dislocation of military and necessary civil production. In
the most recent "Schedule of Reserved Occupations," promulgated April 10. 1941. a
new principle was adopted by the Ministry of Labor and National Service known
as Protected Work. From that date not only the occupation but the work upon
which the men are engaged is taken into account. Under the latter schedule, a
lower age of reservation is now fixed for a man in such an occupation engaged on
work which is protected. All places of employment in which work is protected will
be included in a Register of Protected Establishments. Firms are being admitted
to the latter register if they are (a) in certain essential industries such as chem-
ical manufacture; (&) if they are producing as a rule not less than 80 percent of
current output for the government or for export ; (c) road, rail, and air transpor-
tation ; ((/) the building industry ; (e) if they qualify as a nucleus firm under the
plans for industrial concentration (under this plan several industries may group
about one nucleus firm to carry on for the duration of the war, especially where
total output for the industry is reduced because of wartime restrictions.)
The deferment procedure is complementary to the arrangement for protected
industries. Men below the age of reservation for their occupation or in an unre-
served occupation doing essential work, can have their military service deferred.
The Schedule of Reserved Occupations is a product of the experience of the last
war where a large number of skilled men were allowed to volunteer for service
and later to be recalled for their civilian occupations. In the present war, not
only was there the question of the highest possible rate of protection of muni-
tions and equipment, but the necessity for recruiting and equipping large num-
bers of men and women for the civil-defense services.
The first Schedule of Reserved Occupations was published in January 1939.
Until the outbreak of the war, the schedule imposed no restriction upon persons
joining any branch of service in their trade or professional capacity. Restric-
tions applied only to service outside of volunteers in a trade or professional ca-
pacity which would involve whole-time duty in time of war. A war-time schedule
came into operation at the outbreak of the war when compulsory military service
was adopted, affording a greater measure of reservation than the original sched-
ule. The schedule is constantly under review and is amended from time to time
in the light of the varying manpower needs of national defense. Amendments
are made under the authority of the Ministry of Labor and National Service,
generally as the result of recommendations by a Committee on which the Service
and Supply Departments are represented and the meetings of which are also
attended by representatives of other Government departments concerned. As a
result of the changes made during the past year, many thousands of men who
professionally had been reserved, have been released from the military service
and vice versa. For example, there were a large number of clerical "workers,
teachers, and professional men whose age of reservation was reduced from 80
to 25. On the other hand, a considerable number of occupations which were
professionally reserved only up to the age of 30 were reserved until 35 owing to
the importance of the work involved. In certain cases, men have been provi-
sionally released from the service to retiu'n to industries in which their .skills
were needed. Thus, as a result of this kind of combing-out process, 30.000 men
working in the mechanical trades were released from the Army in the spring and
summer of 1940.
g]^56 WASHINGTON HEARINGS
B. EMPrX)YING THE UNEMPLOYED AND TRANSFERRING MANPOWER FROM NONDEFENSE TO
DEFENSE INDUSTRIES
Unemployment.
By the summer of 1941, unemployment had virtually ceased to exist. In Brit-
ain as of July, 1941, there were only 219,577 wholly unemployed and registered
at the Employment Exchanges compared with 840,027 on April 15, 1940. 219.577
wholly unemployed may seem to indicate considerable unemployment but in point
of fact, most of these people were in transit from one job to another. I personally
analyzed the live registers of several employment exchanges during the past
summer and found that the majority of the persons whose names appeared there
had been unemployed but a short time (three weeks or less), and were clearly in
transit from one job to another. Those who had been unemployed for a longei
time were generally found to be persons in the upper age group actually unem-
ployable either because of ill health or other causes.
The special effort which is now in process is directed to those who are not
ordinarily employed but who may be unoccupied at the present time. This par-
ticularly applies to women. The principal device for finding out what nnmbers are
available from this category is the Registration for Employment Order, 1941.
This Order allows the Minister of Labor to specify any class or description of
persons and call upon them to register. After registration, persons can be called
upon for a selection interview and can then be required to take up a new employ-
ment even if this involves changing the person's existing employment. It is
stated that every attempt will be made to reach agreement as to the type of work
into which the person can best be fitted. The only age groups that had been
registered up until August of this year were men of the ages 41 and 42 and women
between the ages of 20 and 25. Registration of women of the 25-30 year age
groups was planned to take place before the year end.
Unemployment trends.
In June 1939 there was in Britain an estimated totally occupied population
of 22,000.000 persons. In June 1939, there were 13,774,000 insured workers in
employment of whom 4,401,000 were women and girls (Ministry of Labor
Gazette, 1940). There were at this time some 1,350,000 unemployed registered
at the Employment Exchanges. Since that time, a very large number of men
have been ab.sorbed in the armed forces, but despite the demands of the armed
forces and war industries, it is interesting to note that unemployment increased
steadily during the first winter of the war. It was not until March 1940 that
any real improvement was recorded. By the middle of April 1940, the total
had fallen to approximately 972,(X)0, the lowest total of unemployed for twenty
years. The figure maintained fairly constant through October and then decreased
steadily to the low figure already mentioned (219,577) in July 1941.
The so-called priority unemployment problem, it will be seen, continued to
be a major factor as late as the second winter of the war.
Transfer of worTcers from nondefense industries.
The second main way of finding workers for defense industries is by trans-
ferring them from nondefense industries. This can be done in two ways —
financial and direct — for effecting the transfer of workers and other resources
from nondefense to defense industries. Britain's demand for nonessential
(from a defense point of view) commodities has been reduced by increasing
income and excise taxes through compulsory savings and by encouraging vol-
untary savings.
But these financial measures have not been sufficient, and direct measures
are being used increasingly. Rationing of raw materials such as wool, cotton,
and leather and the Limitation of Supplies Order were the first steps and
these were succeeded by "point" rationing of clothes and footwear. There are
indications that rationing of other scarce goods will logically follow. It has
often been pointed out that only if rationing is extended will it be possible,
in a country where there is still considerable income inequality, to reduce
nondefense supplies further. Where buying power is unequal, total supplies
have to be very high (in relation to the size of the population) to insure that
the low-income groups will be able to procure necessities.
The aim of the Limitation of Supplies Order was to conserve raw materials
and also to set free storage space and displace labor increasingly in the manu-
facture of these materials which were subject to limitation. This second
object was, however, defeated in many cases because factories simply worked
short time when production quotas were cut. Habit, domestic and other
ties kept many workers from accepting essential jobs at even higher wages.
NATIONAL DEFENSE MIGRATION 8157
After much public criticism, the Board of Trade was therefore forced to take
action in order to concentrate production in a reduced number of factories
working full time. An explanatory memorandum of the Board of Trade stated
that it was for each firm which wished to qualify as a "nucleus" concern to make
arrangements with other firms to make it possible to operate to capacity. Firms
would also be required to insure that production was concentrated in areas where
competing demands for labor for defense industries were less severe and that the
labor at least was adaptable and of the type likely to be absorbed in new employ-
ment. During the early months, very few satisfactory voluntary arrange-
ments were completed. Last summer the Board of Trade was forced to lix
dates after which Government arrangements would be enforced.
Concentration of industry:
The concentration of industry is being accomplished in two ways : First,
by closing down factories, thus allowing personnel to find work in defense
industries, and, second, where the factory is maintained intact as a productive
vinit with a new defense industry output. The second method is resorted to
less frequently. Competent authorities point to the advantage of the second
method as a means of keeping efficient management intact. This point of
course involves the whole problem of subcontracting as a factor relating to
the utilization of the full labor supply. There appears to have been developed
no plan of universal application to all industries in respect to this problem,
but there has been a good deal of improvisation on the "cut-and-try" basis within
various branches of industry. So great has been the friction in a number of in-
dustries (as for example, the building industry) as to bring up the question of
a basic reorganization of that industry to meet developments of the war as
well as to deal with the post-war reconstruction problem.
Industrial training.
The development of the defense Industries created a steadily increasing demand
for certain types of skilled workers, machinists, etc. To meet this demand, the
Ministry of Labor and National Service asked employers to undertake the training
of workers who showed promise and at the same time converted the Government
Training Centers, used before the war for training the unemployed, into schools
for producing workers for the defense industries. Following the change of gov-
ernment in May of 1940, aggressive steps were taken to develop the Government
Training Centers and renewed vigor was added to the campaign for employers to
cooperate by training men in their own workshops.
At the Centers such trades as draftsmanship, fitting, instrument making,
machine operating, sheet-metal working, electric and oxy-welding are taught.
The field of requirements is being constantly widened and many older men hitherto
unemployed are being given a chance to acquire a trade. The training which is
now being given will involve instruction of persons who have no special skill and
in other instances provides for up-grading courses for workers who already have
a certain degree of skill. Usually the employer provides the equipment and
instructors and the Ministry pays for them on the basis of so much per student-
hour. Some of the newer establishments provide for the training of women as
well as men. An agreement between the Engineering Employers' Federation and
the Amalgamated Engineers Union to allow men and women to be trained "on the
bench" provided that the allowances given be not greater than those given at
the Training Centers and provided that the men when trained should not remain
in the factory where the training was received.
Some time after the outbreak of the war the Centers were thrown open to men
already in employment and since that time a man has been able to give up his
job, provided it is not essential to the war effort, in order to train himself for a
defense industry. The invitation to men employed in nondefense jobs to change
over to defense industries met with very large response and in the latter months
of 1940 and the early months of 1941 approximately half of the men in the Centers
were men who came to training from other employment. The Centers consist
of big training workshops, run on factory lines. Training is chiefly practical.
In August 1941 there were 35 Government Training Centers. For a long time the
flow of recruits to the Centers was restricted because of the low rates of pay ;
also partly because the Centers had once been only for the unemployed. Last
summer (1941) tse wages of trainees were considerably increased. The present
rates of payment to trainees may be said to equal approximately the minimum
rate for ordinary unskilled labor.
3]^ 58 WASHINGTON HEARINGS
At the present time it is estimated tliat between 150,000 and 200,000 worliers
a year are passing tlirougli the Government Training Centers. By far the greatest
number of worliers are still being trained in private industry or in Government
factories "on the bench." Here the rates of pay of trainees are fixed by means
of the bargaining process between Employers and Trade Union Councils within
the industry. Compensation is also now provided for factory owners for time lost
owing to the liabilities incurred when trainees are taken on.
It is the opinion of some critics that adequate recognition still is not being given
to the need to alter production methods, not only in order to economize on skilled
labor — as, for example, by avoiding short runs of production — but also in order
to simplify the training. Many critics also believe that there is still insutficient
recognition of the fact that the range of jobs for women workers is constantly
widening and that there are few jobs for which women cannot be trained. I
observed women taking part in a wide variety of industrial operations. The
manager of one important defense industry plant informed me that a little
over fifty percent of the personnel there were women. INIany of these women were
engaged in high precision work requiring considerable skill. The manager stated
that for many of the operations he preferred women and added that he hoped to
increase considerably the proportion of wom.en employed as the plant was being
expanded. In a number of instances I saw women employed on various processes
such as welding, grinding, and boring machines and riveting operations wliei'e
their performance was sa'd by the foremen to be excellent.
Briefly summarizing the provisions for compensating the workers while in
training, the position is this : (a) The worker receives a wage as a trainee which
will be supplemented by an additional subsistence allowance if he has a wife
and/or dependent children; (b) if ti-aining takes place away from the worker's
home town, he will receive his fare to the Training Center, a subsistence allow-
ance while undergoing training, and payment for the lo,<5s of time while traveling
to the Center. If training takes place in a Government Training Center, all of
these costs will be met by the Government. If training takes place in industry,
the costs will be met by the employer if such has been the pre-war practice in the
particular industry. Otherwise the GoA^ernment will subsidize the private em-
ployer for his training costs.
Transference of lahor.
Employers in defense industries are required to notify the Labor Exchange of
all vacancies. Where such vacancies cannot be filled locally, the local Exchange
will notify the Region and so on to the Central Clearing House until the vacancies
are filled. To illustrate what happens in the case of transferred workers, I am
using the following hypothetical cases :
Take the case of Henry Thomas who, we will assume, has been working in
Yorkshire in an industry whose output has been decreased because of the war
restrictions. He has lost his job and so goes to the Labor Exchange in Leeds.
He has the skill and work record that indicate he can fill a job in an essential war
industry in Birmingham. He agrees to take the job. The Leeds Labor Exchange
will then pay his train fare to Birmingham and will pay him five shillings for
the time which he will lose in transit (10 shillings if the time in transit exceeds
four hours). On his arrival in Birmingham, Thomas will be directed to a hostel
where he can obtain temporary living accommodations until he can be billeted.
This is the responsibility of the Industrial Welfare Workers now attached to the
Labor Exchange. Thomas will then report to the Birmingham Labor Exchange
and be directed to his new place of employment. If he has left his wife and chil-
dren in Leeds and continues to maintain a home for them there, he will receive,
in such case, a maintenance allowance of three shillings a day from the locai
Labor Exchange in addition to his wages. If he desires it, the Industrial Welfare
Worker of the Labor Exchange has a duty to put him in touch with some com-
munity organization in Birmingham which will assist him in adjusting to his
new living conditions. It may be such an organization as the Y. M. C. A. or a
worker's club or some other existing orcanizition iu the community.
It happens that his new place of work in Birmingham employs more than 250
workers. The plant is, therefore, required by the Ministry of Labor to operate
a canteen which serves hot meals. This is because of the tendency towards
restriction of diet under war ration conditions. The factory inspector of the
Ministry of Labor is also empowered to require that full or part-time medical
services are available at the factory. The Ministry of Labor has also required
that the factory shall have on its staff a welfare worker familiar with the
personnel work.
NATIONAL DEFENSE MIGRATION 8159
Now let us take the imagined case of George MacFarlane who, we will as-
sume works in a little town in Worcestershire. George has lost his job because
of war conditions and he does not have the type of skill that is in demand in a
war industry. He discusses the matter with an interviewer at his local Labor Ex-
change It 'is arranged that he shall take a coarse at the Government Training
Center in Birmingham which is one of thirty-five such centers operated by the
Ministry of Labor throughout the county. He goes to Birmingham, his fare
paid by the local Labor Exchange. He reports to the Birmingham Labor Ex-
change, is referred to the training center for his course of training. While in
training, he will receive a nominal weekly wage, plus his board and lodging. Since
he is maintaining a wife and children at his home in Worcestershire, he will re-
ceive a maintenance grant for their support that will continue during his train-
ing course. While he is still in Worcestershire and unemployed, waiting for
posting to the Birmingham Training Center, he will receive his unemployment
insurance grant at his local Labor Exchange.
Economy of manpower in defense industries.
In this section I have in general considered the transfer of workers from non-
defense to defense industries. Another important factor is the distribution of
various classes of labor within defense industries. It is not only a question of
whether the job is necessary for the war effort, but also whether the man is
necessary for the job. Since skilled workers were scarce as compared with
unskilled, heavy labor as compared with ordinary labor, men as compared with
women, young and unattached workers as compared with others, it became clear
that no job could be allowed to retain a woi ker in one of the scarce categories if it
could possibly be carried bv a substitute. Tlius, bottlenecks are caused by the
shortage of workers of the particular kind of skilled experience. The Ministry
of Labor and National Service called for a special registration of machinists
under the Industrial Registration Order, 1940, also of ex-shipyard workers under
Industrial Registration Order, 1941, of Marine Engineers, merchant seamen and
coal miners under the Registration for Employment Order. Last summer when
coal stocks had fallen below a safe margin, the Government, seeking to increase
stocks bv 20,000,000 tons by the end of October, estimated the need for 50,000
additional miners. Because of the fact that the total output was materially de-
creased following the loss of continental markets, many miners had transferred to
other essential industries such as aircraft production. It will probably be very
difficult for the Ministry of Labor to withdraw ex-marine engineers or coal miners
from aircraft firms whose objections are supported by the Ministry of Aircraft
Production. It was this type of problem that strongly supported demand for the
establishment of a Minister of Production with overriding powers during the
production debates held in Parliament in July, 1941.
The transfer of workers from one type of work to another has sometimes been
held up because of difficulties of wages and other conditions. Men, for instance,
were needed for various kinds of heavy work such as iron ore mining, land drain-
age. Tliese could be obtained from aircraft factories where semiskilled work is
now being undertaken by women, but wages in the aircraft factories have been
considerably increased, thereby making the men very reluctant to transfer to jobs
at ordinary unskilled labor rates.
Because of the financial policy of the Government, directed to the objective of
maintaining stable prices (increased taxes, stimulation of savings, price and rent
controls, etc.) these inequalities in the wage structure do not appear to have
increased in Britain at as fast a rate as they appear to be rising at the present
time in the United States.
On the other hand, there is in the United States still a large pool of unemployed
available for training in defense industries. Moreover, there remains still the
priority unemployed to be absorbed in defense industries. Hence, transferring of
semiskilled workers among defense industries has not yet developed in the United
States to the same degree.
Great pressure has developed in England to economize in the use of youth and
women who are free to leave their homes, since many women have had to leave
home to join the services or to move to districts where there were heavy demands
for labor in defense industries. There is an increasing pressure to release such
women from jobs in offices, factories, and shops which can be done by older women,
even in cases where younger women previously had been engaged to replace men
who had entered the service.
There has been much criticism of the location of some of the new factories to the
effect that they are not built in areas of ample labor supply, and this problem has
glQQ WASHINGTON HEARINGS
been increased by the necessity for the evaciiation of women and children from
target areas, in which case they often take the living accommodations required for
war workers.
C. EFFICIENT UTILIZATION OF LABOR
Many critics of the Government assert that no comprehensive wage policy has
been developed in relation to a coherent national financial policy. They contend
that because of this deficiency certain of the newer defense industries ofter higher
wages than obtain for corresponding jobs in tlie older industries and thereby tend
to churn the labor supply unnecessarily and to increase mobility of labor to an
undesirable extent.
Early in 1941 the Ministry of Labor issued the Essential Work (General Provi-
sions) Order, 1941, and has subsequently issued a number of specific essentia]
work orders. Under the provisions of the Essential Work Order the Minister
may schedule any undertaking as an essential undertaking if he is satisfied that —
(a) the terms and conditions of employment are not less favorable than the
recognized terms and conditions as provided for by the Conditions of Employment
and National Arbitration Order, 1940 (i. e., wage standards and working conditions
are up to that standard) ;
(&) that satisfactory provision for the welfare of persons employed in the
undertaking exists ; and
(c) that where, in his opinion, provision should be made in the undertaking for
the training of workers, adequate provision exists for such training.
The Essential Work Order also provides that once an undertaking is scheduled
an employer may not dismiss a woker (except for sei'ious misconduct) nor a
worker leave the employ of the establishment without the permission in writing of
a National Service Officer; that (except in cases of serious misconduct) em-
ployment shall not be terminated without a week's notice to the employee, and
further provides that any person employed in such an undertaking shall at all
times receive a "normal wage" for the prescribed working hours in that industry
if that person is during normal working hours —
"(1) capable of and available for work; and
"(2) willing to perform any services outside his usual occupation which, in the
circumstances, he can reasonably be asked to perform during any period when
work is not available for him in his usual occupation in the undertaking."
The Essential Work Order defines the way in which the "normal wage" is cal-
culated for the purpose of this "guaranteed wage" provision. The Order also
provides for the establishment of appeal machinery through which both employers
and employees may appeal from the decision of the National Service Officer where
it is so desired.
If a person employed in a scheduled undertaking absents himself from work
without leave or reasonable excuse or if he is persistently late at work, the
Order provides that the employer may report such absence or lateness to a
National Service Officer (at the local Labor Exchange) who has power to
require punctuality and regular attendance.
Essential Work Orders applying to particular industries had been issued in
respect of four ma.i'or groups of labor, up to August 1041 ; i. e., shipbuilding and
ship repairing; the merchant navy: coal mining; building and civil engineering,
A separate plan has also been developed in respect of dock workers.
The Select Committee on National Expenditure (a Standing Committeeof
the House of Commons) in its recent reports has had much to say concerning
the unemployment of labor resulting from excessive waiting time and because of
ahsenteeisin" (i. e., unexcused absence from work where no sufficient reason is
subsequently given by the absentee). The first of these problems is partly a
question of" management since it relates to the utilization of lim.ited supplies.
Partly, it is a problem of distribution of limited supples.
In the recent reports of the Select Committee, attention was called to the
direct association between absenteeism of woi'kers and overlong hours of work.
In the most recent report of that Committee, there was shown to be correlation
l[)etween declining productivity and exce'^sive hours in certain war industries.
Especially was this true in the period following Dunkirk when the critical situa-
tion stimulated a program of long hours of employment.
Industrial welfare.
The Ministry of Labor and National Service has divided its welfare program,
administratively, into two sections, devoted respectively to welfare inside the
factory and welfare outside the factory. War conditions have demonstrated
that tiie ramifications of each type exists over a far wider field than had been
generally realized before the war.
NATIONAL DEFENSE MIGRATION 8161
In Britain (ai=! in the United States), personnel and welfare management has
been increasingly recognized in recent years as a distinct function of manage-
ment which is delegated to a special department. The foreman who once selected
his own labor at the factory gates generally has been superseded in this function
by the Personnel Management. The personnel manager is also often responsible
for training new labor, for introdiicing employees to their work in the first vital
weeks when labor turn-over is at its highest. Frequently, canteens, safety
measures, and health of the workers are further responsibilities of the personnel
and welfare department. The development of this managerial function is
not by any means a new feature beginning with the war. However, under
war conditions, growth of this practice in industry has enormously increased.
Throughout the country there is a growing awareness of the need for adequate
personnel management in all defense industries.
The main new personnel problems concern women. Many women who are
being brought into employment today have never worked in factories. Others are
being transferred to strange jobs. Day nurseries are often the answer to the
problem of mothers' helpers. Arrangements for part-time employment exist.
War industrial companies frequently have adjusted the time schedule of their
shifts to permit women to do their shopping. These are but a few of the
questions that have stimulated the development of factory personnel and welfare
departments in Britain since the war began.
Welfare requirements on the Ministry of Labor (inside the factory).
The Minister of Labor last year established the Factory Welfare Advisory
Board to advise him on all questions of welfare inside and outside the factory.
The Factory (canteens) Order, 1940, gave factory inspectors the power to direct
that a canteen serving hot meals, be established wherever necessary in every
factory employing more than 230 persons ; while still another order gave in-
spectors the power to insist that whole or part-time medical care should be
provided for factory workers. The Essential Work Orders have finally given
the Minister a very definite stake in management since they state that before
scheduling a factory under these orders, the Minister must be satisfied that
there is adequate provision for welfare inside and outside the factory. Many
factories without satisfactory provisions of this kind have been registered
provisionally, but the pressure on employers to take action will now be very
much stronger.
Welfare outside the factory.
Another section of the Ministry of Labor is concerned with conditions of the
workers outside the factories. Special welfare officers have been appointed in
every division of the Ministry to discharge this second function. They are
intended to insure that :
(a) Transferred workers have a proper place in which to live;
(ft) They have adequate means of obtaining food, particularly those workers
who cannot obtain meals at home or at lodgings or in the factory ;
(e) There are facilities for recreation and adult education;
(d) Provision is made for the young children of mothers who are working in
the factory ;
(e) Adequate transport facilities are available;
(f) The health of the workers is safeguarded.
How this formidable list of duties has been carried out could be learned
only by intensive study. Undoubtedly performance varies from place to place.
There are certainly not a sufficient number of trained welfare officers to insure
that these provisions are fully complied with. The fact remains, however,
that they are recognized as problems and they are stipulations of the Ministry
which is responsible for the entire manpower supply. There is no doubt in
my opinion that these functions are among the most important having to do
with the operation of the production machinery in Britain under war condi-
tions, bombing, black-out, evacuation of children, etc.
Housing.
In many of the new defense industry areas, there is a housing shortage. It
is difficult to spare labor and materials for house construction today but in
some cases it has been absolutely necessary to build houses in these districts.
In other instances, householders have been prevented by the government from
letting rooms without the permission of the local billeting officers. In some
instances, hostels have been built for migrant workers. A "National Service
8162
WASHINGTON HEARINGS
Hostels Corporation, Limited" was established in the spring of 1940 to take
control of such hostels. The biggest hostels have been set up near the new
government munitions factories. Housing problems are severest near these
factories for the reason that they have been located for strategic reasons, in
the most out-of-the-way places.
Agricultural lahor.
The Agricultural Wage Board recommended to the counties the adoption of an
agricultural minimum wage which has been accepted by all of the counties, I
believe, with the exception of Cornwall, where it was decided that no change was
warranted. The minimum wage so established is 48 shillings a week. The prob-
lem in England has been not only to hold the present acreage in cultivation but
to increase the acreage, thus resulting in an increase in the number of agricul-
tural laborers required. The latter supply has largely been met by such devices
as the Woman's Land Army, organized under the auspices of the Ministry of
Agriculture, by means of which women from the towns and cities are enlisted for
service on the land. It will be noted that under present British conditions, there
is less tendency for normal agricultural labor to migrate to the cities than might
normally be the case. Because of the fact that industrial cities are the chief
targets of enemy air attack, because of housing shortage, conditions under the
black-out, etc., the higher wages of the city offer less attraction than in ordinary
times. -J
The number one defense requirement — the health and welfare of the people.
Among the vivid impressions which this witness received in Britain during
the past year none is more indelibly fixed than this ; namely, that the strengthen-
ing of health and welfare measures ranks with the building of guns, tanks, and
planes as a defense priority. Under the circumstances, the health of the British
people is being maintained beyond all expectations. The supplies of animal
proteins, fats, and sugar have greatly deei^ened the concern of the government
with problems of nutrition and the maintenance of nutritious food for all groups
of the population. Yet there is as yet no evidence that any serious effects have
been visited on any substantial number of the people by virtue of food shortages.
However, if these ill effects have been avoided, this has been brought about only
by prodigious effort on the part of all concerned and in the face of a food-distribu-
tion system geared to the pre-war conditions of surplus supplies which could
tolerate a greater degree of waste and inefficiency.
The principal exceptions to the major (favorable) trend are to be found in
the fairly significant insrease in the incidence of tuberculosis and, during last
winter, of nose, throat, and chest diseases, and certain of the communicable
children's diseases. The Ministry of Health ascribes the increase of tuberculosis
to overlong hours of work and to the increased amount of factory work done by
women. Conditions of overcrowding, resulting from the destruction of housing,
transfer of war workers, etc., contribute to this undesirable trend. While the
increase in incidence of the above types of illness was in some instances quite
large, relatively, still the absolute increase was in no case large, considering all the
circumstances.
The witness can merely sunnnarize here the following measures which have
been taken to strengthen and expand the health and welfare measures particularly
during the last year. Few, if any, voices of England are raised today to complain
that these are nondefense expenditures. Sometimes one wonders whether, in
this as in other matters, it is necessary for the bombs to fall in order that a nation
may learn.
II. A Brief Outline of the Changes in Social Security Provisions
PUBLIC ASSISTANCE
Under the provisions of the Prevention and Relief of Distress Act, a war
n)easure, the Assistance Board, which formerly administered Unemployment
Assistance, is now enabled to give financial assistance to any person or family
which suffers a loss of income due to war causes, provided that the actual present
income of the person falls below certain levels. The means test which is thus
required is somewhat less rigid and the scale of grants somewhat higher than
the Unemployment Assistance scale of assistance payments. Thus, if an indi-
vidual loses his income due to war reasons, e. g., the closing of a small shop,
professional office or other such case, aid can be received under the provisions
NATIONAL DEFENSE MIGRATION 8163
of the Prevention and Relief of Distress provisions. Prevention and Relief of
Distress grants are financed 100 percent from the national excheqner.
Old-ar/e Supplementary Insurance Act passed in 1940.
Under this Act the Assistance Board may, subject to a means test, supplement
the Old-Age contributory pensioner's income, if such pension (which the pen-
sioner receives of right) is not adequate. Thus the pensioner is relieved of the
necessity of apiilying to the local Public Assistance Committee for poor relief.
CivUian injury assistance.
If a civilian is injured by enemy action, the Assistance Board will grant the
injured person assistance under a stipulated scale which is somewhat higher
than the ordinary assistance rates. This form of assistance is given without any
means test whatsoever. If the disability from such injury continues beyond
three months, the person is entitled to a pension, temporary or permanent,
depending upon the nature of the medical findings.
War-damage insurance.
All real property in the United Kingdom is covered by compulsory war-damage
insurance with respect to which premiums are paid on the progressive income-tax
principle. Under the War Damage Act. chattels also may be insured against war
damage at the option of the owner within certain maximum limits. While com-
pensation under this Act is contemplated to be adjusted at the end of the war,
the Assistance Board is empowered to make immediate grants for household goods,
chattels, workers' tools, etc., necessary to reestablish the family in satisfactory
conditions for the duration of the war.
Increased benefits.
Under the National Unemployment and Health Insurance Acts, benefits have
been increased to meet the increased cost of living. Similarly Public Assistance
scales in all categories have been increased. At the same time, payments of the
worker and the employer to the Unemployment Insurance Fund have been slightly
increased. The latter increase is not because of actuarial requirements, but,
rather, as a part of the program of increased taxation and savings as an anti-
inflationary measure. Actually the debt of the Unemployment Insurance Fund,
which stood at £95,000,000 at the beginning of the war, has been extinguished
and the reserve of the fiuid is now increasing at the rate of approximately
£50,000,000 a year. The purpose is to meet the probably increased demand upon
the fund at the end of the war.
INCREASED SCOPE OF SOCIAT. IWSUBANCE
The coverage of Unemployment and Health Insurance has been extended to
cover nonmanual workers receiving salaries of £420 per year and less. Since agri-
cultural labor is covered under special plans, this means that the overwhelming
majority of all workers in the United Kingdom are now covered by the National
Unemployment and Health Insurance plans.
Old-age contributory and supplementary old-age insurance.
Under both of these categories the age at which women are eligible for benefits
was in the early part of 1941 lowered by Act of Parliament from age 65 to age 60.
British restaurants and factory canteens.
Because of the transfer of war workers, the separation of workers from their
families and food rationing, etc., the Ministry of Food is encouraging all local
authorities to open British Restaurants ; that is to say, public restaurants which
usually sei've a hot midday meal. In some instances the restaurants serve also
a morning and evening meal. Here anyone may buy a meal at prices which range
from about 8 pence to a shilling. For those who cannot afford to pay, the local
authorities will provide free tickets. These are operated directly by the Local
Authorities under the supervision of the Ministry of Food. As of August, ap-
proximately 1,200 of these restaurants were in operation, something over 20O in
London alone. The requirements of tlie Ministry of Labour concerning factory
canteens have been previously described.
Day nurseries and nursery schools.
The Ministry of Health is encouraging local authorities to extend the facilities
of day nurseries and nursery schools to meet the problems of children and work-
ing mothers. In addition to the voluntary agencies of this kind which had
already been in operation, some 300 have been established by local authorities
under the general supervision of the Ministry of Health.
8164
WASHINGTON HEARINGS
Medical care.
The Emergency Medical Service, which was originally planned to act as a
casualty service for civilians injured by enemy action, is a National scheme based
regionally upon the public and voluntary hospitals and utilizing some 5,000 physi-
cians and a large nursing reserve. The physicians serve either i)art or lull time,
arrangements varying with the local situation. Gradually, the coverage of the
Emergency Medical Scheme has been extended to cover such categories as un-
accompanied (evacuated) children, who are treated free of charge. The extended
coverage of the Emergency INIedical Scheme now covers some ten categories of
persons, such as evacuated mothers and children, transferred war workers, etc.
Generally, persons in the latter-mentioned categories are expected to make some
payment,' according to means. It is, however, the basic purpose of the Ministry
of Health to provide, through this scheme, medical service as required, irrespec-
tive of means.
III. Labor Policy and Administeative MBrHoo
Because of the various restrictive measures such as the Essential Work Order
and the National Arbitration Order, many persons in the United States tend to
think of British labor as being virtually conscripted under war conditions, because
of the restrictions that tend to prevent workers from moving from place to place
and from job to job.
In Great Britain today the general tendency is to complain that not enough
compulsion is applied. Critics include not only the Conservatives but also many
Labor Pai-ty adherents M'ho visualize the more complete rationalization of man-
power for all-out defense purposes.
Actually the Government has not taken advantage of these most extensive
powers of compulsion, but has rather relied upon persuasion and the extensive
machinery of consultation which exists in Great Britain as between Trade Unions
and employers' associations rather than upon compulsion.
The basic power over labor is contained in No. 58-a of the Defense Regulations
under which the "Ministry af Labour and National Service * * * may direct
any person in the United Kingdom to perform such services in the United King-
(joj^ * « * fjg jjjf^y ijg specified by the direction * * *."
This power is implemented by the National Arbitration Order, the purpose of
wliich is to eliminate strikes and lock-outs. The Essential Work (General Pro-
visions) Order, and the specific orders which have been issued under this, together
constitute the central support of the system. It is to be noted that compulsion
under these orders operates both as to employers and employees and enforces
upon the employer standards of "guaranteed wages," working conditions, welfare
conditions, bargaining rights, etc.
A« of July 2f). 1!)41, the provision of the Essential Works Order had been applied
to 11,086 establishments employing 3,696,000 workers, and the process is being
activelv extended. In this, as in other aspects of the Government's labor policy,
it is tiie clear intent of the government to provide protection and guarantee
advantages to the workers to whom compulsion is applied.
COMBING OUT OF SKILLED LABOR
It is the job of the local Labor Supply Inspector attached to the local Labor
Excliange to be combing out continually the supply of skilled labor from certain
factories in order to spread the supply more evenly according to the needs.
In one notable ca.se the Ministry of Labour's representative negotiated arrange-
ments under which a large firm in an industry, relatively unessential in the defense
program, agreed to release nearly 1,600 young women in order to permit their em-
ployment in nearby defense industries. The terms, wliich were successfully con-
trived to make the transfer as easy as possible, are indicated in the dotnmient
below, which was substantially that posted in the factory. It should be added that
representatives of the Trade Union, as well as of the Ministry and the employer,
joined in explaining the arrangement to the workers at a meeting in the workers'
canteen.
CONTRACTION OF PRODUCTION
"As a war measure production in these works is being reduced. The chief
reason for this is to release workers, especially young women, for urgent and
vital work at Government Factories, etc.
"In response to an urgent request from the Ministry of Labour, it has been
decided to release from these works all female employees aged 20 to 24 years,
inclusive.
NATIONAL DEFENSE MIGRATION 8165
"Please accept this letter as formal notice to terminate your employment on
Friday the 1st of August, 1941.
"The Ministry of Labour have suitable vacancies at the following Royal Ord-
nance factories on work of the highest national importance.
(Here a number of specific Royal Ordnance Factories were listed.)
"Representatives of the Ministry of Labour and the Factories and Medical
Officers will shortly attend this factory for the purpose of interviews and ar-
ranging medical examinations.
"Full particulars regarding hours, wages and conditions of labour will be
furnished at those interviews.
"Those employees who cannot be absorbed immediately should remain at their
present occupation until notified.
"It is with some reluctance that this notice is being issued, particularly as
many of the employees concerned have been here since leaving school, dut the
National need is urgent and imperative, and it is the duty of those who are
able to provide those in the front Lne with the necessary munitions of war.
When the National emergency ceases the Management hopes to be in a position
to welcome back to their present position all those loyal and patriotic employees
who have responded to their country's call in the hour of need.
"The Management desires to express appreciation for loyal services rendered
and to wish you well in your new sphere of activity."
In these transfers and in the recruiting of labor, the official policy of the
Ministry has been based on the dictum that, in industry at least, a volunteer
is worth more than a conscript. "Directions" under the Defense Regulations
have been issued only in a relatively small number of cases and there have
been so far only 32 prosecutions (29 of them successful) for refusals to obey
these instructions.
COMPULSION AND CONCILIATION IN INDUSTRIAL DISPUTES
The real implements in the field of industrial disputes are conciliation and per-
suasion, compulsion being used only as a last resort. The National Arbitration
Order of July 18, 1940, definitely prohibited strikes and lock-outs, provided only
that the Ministry of Labour and National Service does not refer the disputes to
the prescribed agencies for settlement.
Two important points should be underlined with respect to the ta-king of these
powers. In the first place, before promulgating this order, the Minister of Labour
referred the proposed terms of the order to the Joint Consultative Committee of
the Ministry of Labour, representing the Trades Union Congress and the British
Employers Confederation. The Order was issued only with the consent of this
Committee and the organizations which it represented. In effect, therefore, it
represented an agreed declaration against industrial disputes on the part of
organized workers and organized industry.
In the second place, as in every Government measure which has been adopted
and which has placd compulsion on -labor, the Order itself contains provisions
definitely favorable to labor.
Thus in industries in which there are collective agreements arrived at by
"organizations of employers, trade-unions, representatives respectively of sub-
stantial proportions of the employers and workers engaged," other employers in
such industries must observe terms and conditions of employment not less favor-
able than those embodied in these agreements.
The same Order also includes the regulations requiring an employer to record
departures from existing trade practices with respect to the employment of the
particular types of labor.
Generally speaking, it has been the practice not to use the compulsory powers
under this and other orders vesting powers of compulsion in the Government. Of
course, they remain as a threat lying in the background.
In conversations which this observer held with employers, trade-union officials,
and the Conciliation Officers in the Ministry of Labour, it was repeatedly empha-
sized that there is a strong ui'ge on the part of all concerned to use the' pre-war
machinery of consultation and conciliation and to refrain from recourse to com-
pulsory powers excepting as a last resort. Tlie relatively small number of
cases coming before the National Arbitration Tribunal is the best evidence that
this is true.
glQQ WASHINGTON HEARINGS
THE PRACTICE OF CONSULTATION
One of the most notable features of Britisli industrial policy during the
war is the direct representation in many branches of the war effort of repre-
sentatives of the Trade Unions and of the Employers. There is little abstract
discussion of such general terms as "functional representation" and the actual
Instances of consultation have often grown up in as ad hoc and British a
manner as the evolution within certain establishments, from air-raid spotters
representing the men, to parties for repairing immediate damage and finally
to local production committees. Nevertheless, the encouragement of repre-
• sentation is a recognized Government policy and is sometimes attacked as
such by critics of the Government.
The joint bodies of greatest significance for the war effort are the following:
1. The Joint Consultative Committee to the Minister of Labor, consisting
of seven representatives of the Trades Union Congress and seven representa-
tives of the British Employers Confederation ;
2. The Central Joint Advisory Committee to the Production Executive, con-
sisting of twelve representatives of the Trades Union Congress and twelve
representatives of Employers, of whom six are chosen by the British EmiDloyers
Confederation and six by the Federation of British Industries.
3. The Regional Boards of the Production Executive, each of which consists
of three Trade Union representatives and three Employers representatives, in
addition to the representatives of various Government Departments. The
Chairman and Vice-Chairman of these Boards are named from the Employers
and Workers Panels.
In addition, there are representatives appointed by the General Council of
the Trades Union Congress on the following bodies :
(a) All the Industrial Controls of the Ministry of Supply;
(h) The Industrial and Export Council of the Board of Trade (concerned
with the concentration of industry and other questions) ;
(f) The Committee on Retail Trade of the Board of Trade;
(d) The Central and Area Prices Regulation Committees;
(e) The Trades Union Council Advisory Committee to the Ministry of
Food.
The Trades Union Congress has also accredited representatives to each
of the 12 Regional Commissioners for Civil Defense. Trades Councils in the
various localities are also asked to nominate a "consumer representative" on
each of the Retail Coal Prices Advisory Committees and they are also repre-
sented on local Food Control Committees. A more complete list of representa-
tive agencies will be included in a report on "Methods of Collaboration" which
has been prepared by the International Labor Office for that organization's
1941 Conference.
In these various bodies the effectiveness, type and purpose of activity vary
widely. I have not attempted to consider the cases in which the Trade
Union members are expected to represent the general or working-class con-
sumer. On the bodies directly concerned with industrial questions, the major
function of such representation has been to secure in advance the under-
standing and acquiescence of the representatives of the interests that were
to be affected by Government action and, therefore, to secure their help in
extending and defending these measures before their constituents. Thus, the
texts of the important regulations affecting labor, including the Essential
Work Order, and the National Arbitration Order, were worked out in agree-
ment with the Joint Consultative Committee, were amended where necessary
to meet the interests of the parties, and were not promulgated until such
agreement was secured.
Since this practice of considtation has evolved gradually over a period of years
only to be increased at greater breadth and implemented by official action during
the war, it is often thought that all parties concerned have come to regard it as
the essence of cooperative action between employers' and employees' organizations.
From many quarters have come criticisms of this practice of consultation, some
of the critics arguing that it confuses administration with policy making; that it
causes untlue delay ; that it decreases the vigor of the war effort by providing
openings for logrolling and delaying activities. The practice has probably mili-
tated against the development of any national policy on wages and hours, .which
has been referred to earlier above, with consequent effect upon the mobility of
labor as between essential war industries.
NATIONAL DEFENSE MIGRATION 8167
SOME RESULTS OF THE LABOR POLICY
Impartial observers in Britain during tliis period seem to be generally agreed
that by and large the Bi'itisli Government's labor policy has been reasonably
successful. In July of 1941 the records of the Ministry of Labour indicate the
smallest number of man-days lost for any month on the record. Conversely, the
month of July was probably the largest month of production in terms of man-
days worked. One day during early August 1941 diiring a discussion of this
matter with the Chief Conciliation Officer of the Ministry of Labour, he advised
me that as of nine o'clock of that particular morning not a single industrial
dispute in the United Kingdom was known to the Ministry of Labour. I spent
a considerable amount of time in a particular district which has always been
one of the traditional centers of unrest in Great Britain. While there I learned
of a number of hotly disputed matters as between employers and labor. Yet,
withal, there was a decidedly favorable contrast when present attitudes were
compared with the attitude of both employers and employees which I observed in
this same region during the past war.
Disputed questions included such points as dilution and upgrading of labor
and the introduction of large numbers of women into industry, payments of wages,
weekly wages to dock workers, piece rates, and overtime absenteeism. All of these
questions are continually debated pro and con throughout the country. Despite
this fact, the absence of unrest is marked. In general, observers appear to agree
that the extent to which the Government has encouraged consultation and persua-
sion and refrained from the use of its powers of compulsion are factors of the
utmost importance. To what extent the presence of labor leaders, such as Bevin,
in the Government since May of 1940 has been a factor cannot be appraised in any
exact way. Probably underlying it all is the fact that British labor by and large
considers this war as much its own battle as do the employers.
IV. The Labor Exchange
In connection with any discussion of the mobilization of manpower in Britain
there is one device which deserves special mention, and that is the Labor Exchange.
Several hundred Labor Exchanges and their branches are scattered about the
country in strategic and convenient locations. Practically speaking, the Labor
Exchange is the equivalent of our public employment office.
MACHINERY FOR WORKERS' APPEALS
In past years when unemployment was a big factor the worker had established
the habit of going to the Exchange concerning his Unemployment benefits and to
seek reemployment. When he wished to make a complaint against a ruling of
the officials of the Exchange concerning his Unemployment Insurance Benefits,
he could and did frequently appeal to the local Appeals Committee. This Appeals
Committee consisted of one person representing the workers and one person repre-
senting the employers, together with an impartial chairman. The employer's
and worker's representatives were each selected from a panel and they served
voluntarily on appeal committees in rotation. The Chairman, usually a lawyer,
a political scientist, or some other professional person, was employed by the
Ministry of Labor and National Service and paid a fee for his service.
The machinery for appeals thus established in 1912 when the national Un-
employment Insurance Act was first pas.sed, has remained substantially un-
changed in fonn and method. In the course of time, the members of these
committees have acquired skill and experience in dealing with the wide variety
of human problems that come before them.
Under war conditions these same appeal committees called by different
names have formed the basis for practically every type of appeal by individual
workers arising from the various national service regulations.
For example, take John Jones who has been called up for the military
service and wi.shes to appeal for deferment of his .service on the basis of
unusual hardship. The Hardship Committee, on its own responsibility, may ap-
prove the deferment, providing the Committee is satisfied that the applicant has a
good ca.se.
Or perhaps Mary Jones has been requested by the local authority to comply
with the compulsory fire watching order, which will obligate her to take
her turn watching for fire bombs in her neighborhood of a target city. Mary
Jones claims that compliance with this order would cause undue hardship.
The Committee will decide Mary Jones' case. If she claims physical disability,
60396 — il— pt. 20 11
glQg WASHINGTON HEARINGS
the Committee may order a medical examination and be guided by the Doctor's
findinji's.
Henry Smith claims that an order issued under the Essential Work Order
which restricts him from leaving an essential war industry will work a
hardship on him. Again the Committee will decide the case on its merits.
The same procedure can be followed in other types of appeal by Individuals
from the orders which sometimes severely restrict their movements from one
place of employment to another. The decision on each appeal is within the
discretion of the Appeal Committees, subject, of course, to the general regula-
tions of the Ministry of Labor.
The best evidence of the general success of this plan, which so vitally affects
the British working people, is the fact that one hears so little discussion about
the appeal machinery. Most striking fact of all is that the appeal machinery
is so taken for granted that it hardly ever makes the news.
All of these and many other types of contract have given the workers in
Bri.ain a new and vital association with their local Labor Exchanges.
Closely related to the Labor Exchanges are the conciliation services of the
Ministry of Labor and the factory inspectors. While the latter services are
not actually located in the Exchange, they are all coordinated by an offlcer who
is one of the 12 Regional Controllers of the Ministry of Labor.
At the center in London, the Minister of Labor is, significantly, Chairman
of the Production Executive of the Cabinet which consists of the Ministers
of the Supply Departments of the Army, Navy, and Air Force.
Thus, at the national level, questions of major policy affecting the com-
peting labor requirements of the Ministries responsible for war production
machinery and the military services have created constantly changing labor
priority problems. From each of these spring an infinite number of problems
which affect the well-being of individual workers.
Learning the lesson of the last war, the British concentrated in the Ministry
of Labor practically all problems dealing with the recruitment, training, and
distribution of workers among essential war industries, together with the
new industrial welfare services. The need for many of these industrial wel-
fare services has always existed but now that need has been sharply em-
phasized l)y war conditions. The Labor Exchange has become the tangible link
between the individual worker and the machinery for organizing the war effort.
EMPLOYERS ALSO COME TO EXCHANGE
Employers, too, come to the Exchange. Employers in most of the essential
war industries are reqiiirecl hy Imo to notify the Exchange of their labor
requirements. Inspectors from the local Labor Supply Committee, which is
closely related to the Exchange, determine whether specific plants and factories
are using skilled labor efficiently. The inspector, an engineer, will advise on
production adjustments to effect economies in the use of skilled labor.
Among his other statutory powers, the Minister of Labor is empowered to
remove skilled labor from a plant where it is being inefficiently utilized.
The employer possibly also serves on one of the Committee panels. Thus, the
Labor Exchange has become a meeting ground locally for the representatives of
employers, workers, and the Government. There are, of course, many elements
of all of this that are not functioning smoothly. But these arise mainly from
the human shortcomings inevitable in the face of new and vast administrative
problems. Obstacles arise also from the terrific friction that is created by the
increasing dislocation of the leisurely peacetime organization for the production
and distribution of goods.
The fact that the British Unemployment Insurance and Public Employment
Offices — that is to .say, the Labor Exchanges— are a part of a national system
within the Ministry "^of Labor and National Service seems to be one of the
greatest elements of strength in the British .situation.
Thus, the operation of the Labor Exchange can be geared to the necessarily
rapid changes in manpower policy of the Government, subject, as they are, to
the swift change of events. For, in the final analysis, the Minister of Labor and
National Service is responsible for the supply of man and woman power.
To sum up a few of the more important functions of the British Labour
Exchange then it is responsible for the —
(a) registration of the Nation's man and woman power.
(6) distribution of workers to the armed forces and to defense industries.
(c) administration of hardship and other appeals.
id) recruitment of workers for industrial training schemes.
NATIONAL DEFENSE MIGRATION 8169
(e) administration of the Labor Supply Scheme.
(f) payment of travelling, lodging, and other allowances for transferred war
workers.
The supervision of industrial welfare work inside and outside the factory.
Ail of these and other responsibilities have been concentrated around the
Labor Exchange by the Ministry of Labor and National Service. Thus does the
Ministry bring its* message to every corner of the country, the better to carry
out its enormous responsibility for the mobilization of Britain's man and woman
power.
TESTIMONY OF ERIC H. BIDDLE— Resumed
Mr. BiDDLE. If any questions are raised here that I am not able to
answer for the record at the present time, I will make note of them
and supply the committee with the information, which I am sure I
have available.
I have been in England the good part of the last year, particularly
the last 6 months, returning in September. I should say that the Brit-
ish problem of labor supply might be divided into three divisions —
and I think this will bear on the question and probably on all the
other questions that might be asked :
First, of mobilizing several million men for the armed forces and for
civilian production and military production.
Second, the recruitment from among the unemployed of a large body
of workers to carry on civilian and military production for the armed
forces' needs.
Third, the question of raising to the maximum of efficiency all the
workers on their jobs.
The significance of this threefold division is that there is one agency
of government which is responsible for all three of these phases. That
is the Ministry of Labor and National Service, which has vested in it
approximately the same functions as those which are vested in the
Office of Production Management, Labor Supply Division, the Labor
Department, Selective Service Board to a large extent, and the Na-
tional Labor Relations Board, as well as the Employment Security
Division of the Social Security Board ; so that the Ministry of Labor
envisages the entire problem of labor supply, and it is interesting to
note the way in which it has developed along with that the concept
of its responsibility for welfare provisions inside and outside the fac-
tory. A good many of these relate to this question of transfer of labor.
As you know, sir, British labor is a good deal more immobile than
American labor. It doesn't move about the country in the same way.
The Chairman. It hasn't the room either.
Mr. BiDDLE. That is right. So that a somewhat different problem is
involved in the transferring of labor in Britain, because of both geog-
raphy and habits.
The Chairman. When England started to do what we are doing
now — shift from nondefense to defense — unemployment increased,
didn't it ?
Mr. BiDDLE. The number of unemployed registered in the national
labor exchanges in June 1939 was about 1,300,000. You will remember
that England had started the phase of activity that would correspond
to our defense preparations after Munich. The period up to that point
would hardly be significant, therefore, from the standpoint of trans-
fers from nondefense to defense employment.
8170
WASHINGTON HEARINGS
It is interesting to note, however, that the unemployment figure in
England remained up in that range even after Munich, for a number
of months, and as late as April of 1940 there were still some 840,000 on
the live registers of the employment exchanges. Those were people in-
sured under the Unemployment Insurance Act. That is the only way
they have of measuring it in any positive terms. During the early
part of that period exactly the same things were happening as are
happening here now : Nonessential industries were closing down.
From that time to last spring the situation changed very rapidly,
and in July of this year were some 219,000 unemployed registered on
the live registers. That is probably an irreducible minitnum.
The Chairman. We have about three times the population of Eng-
land. So if you had a million unemployed there in England, that
would correspond on a population basis to about 3,000.000 here,
wouldn't it?
Mr. BroDUE. Well, 1,300,000 on the live registers wouldn't mean quite
that, sir, because the Ministry of Labor figiu'es are only good as to
those in insured occupations ; so that 1,300,000 would possibly give you
something under 5,000,000 correspondingly in the United States. In
addition to that, probably some 30 to 40 percent of the workers are not
covered by unemployment insurance, so those figures would not corre-
spond to our gross estimated figures.
The Chairman. It was testified this morning, Mr. Biddle, that ap-
proximately 5,000,000 people are now registered with public -employ-
ment agencies in the United States.^
Mr. Biddle. In those terms the figure wouldn't be very different
from the pre-war British figure. The significant thing about the way
in which this unified responsibility for the labor supply, for manpower
supply, is expressed in the Ministry of Labor is its focus on the local
employment exchange, which is the rough equivalent of our public
employment offices.
Practically every contact which the worker has with war industry
is at the labor exchange. Before the w^ar he went there, just as he does
in our exchanges, for unemployment compensation benefits ; and if he
were employed, he was covered by unemployment insurance. He went
there twice a week perhaps to see whether there was a job available.
So that he had that basis of operation at the outset ; but shortly after
the beginning of the war, when the Labor Ministry was made the
Ministry of Labor and National Service and expanded its functions
very rapidly overnight, that agency became responsible for registering
men for the armed forces at the labor exchanges. Thus it became
responsible for the registration of all men and women for any kind of
industrial employment in connection with the war. At that juncture
the labor exchange became the focus of the entire labor supply locally.
The Chairman. We have heard about the employment agencies all
over the country, about getting these lists and keeping them active,
but I think it should be remembered that we are dealing with 48 States ;
and England's problem is one thing and our problem is entirely dif-
ferent. They have a central agency there to take care of employment
problems. Here we have 48 State agencies and some Federal agencies.
I always think of England in terms of a State smaller geographically
than Oregon, and I think we have to keep that in mind.
See p. 8128.
NATIONAL DEFENSE MIGRATION 8171
Mr. BiDDLE. It is not impossible though, sir, that there would be a
national system here. It was contemplated, at the time the Unemploy-
ment Act was passed, that there might be a national system of unem-
ployment offices, and one has seen it mentioned a number of times since
then, more recently within the last few weeks. I would certainly
emphasize that I am not urging any program here. I am simply point-
ing out, as far as I have been able to observe them from the British
experience, things that might be useful to us.
The Chairman. What about migration from one pai't of the country
to another ? Has it been great or small ?
Mr. BiDDLE. It has been tremendous. There has been a tremendous
movement from place to place for a number of reasons. New war
industries have been located in the valleys of Wales, in accordance
with the dispersal policy of getting factories in less vulnerable areas.
The bombing of industrial cities and the evacuation of children have
also had effects on the industrial workers as well. So that there has
been large movement of the population, and the dislocation resulting
from that has been enormous. Particularly it has been true in the
matter of transfer of the industrial workers, dock workers, and miners,
and workers transferred from less essential to more essential war
industries. All of that has led to movement.
HOW TRANSPORTATION IS PAID
The Chairman. What about transportation ? Was it paid for ?
Mr. BiDDLE. Yes. fThe procedure is something like this: At the
center in London there is a clearinghouse for vacancies — labor require-
ments, in other words — and notification of these is sent to the various
regions and subsequently to the district offices of the labor exchanges.
Let's take a case in point. The exchange in Leeds is notified of in-
dustrial workers needed in Birmingham. We will assume that a cer-
tain worker has lost his job because of a shut-down of an industry due
to war conditions. At the labor exchange he will be interviewed. It
looks as though he has the qualifications for the job in Birmingham.
He agrees to accept the job. He is paid his fare to Birmingham. He
is paid a wage of 5 shillings if the trip is less than 4 hours ; and if it is
more than that, 10 shillings.
The Chairman. Who pays that?
Mr. BiDDLE. The Government. It is paid at the labor exchange.
When the worker goes to Birmingham, he is met at the station by a
representative of the exchange, who directs him to a billet which the
welfare officers of the factory, outside of the labor exchanges, are re-
sponsible for securing. Possibly it is a hostel, where he will stay over-
night until he gets a permanent lodging. He reports to the exchange
the following morning and is referred to his job.
Now, if he has left his family behind him in Leeds, and wishes to
maintain them there, he will be paid while he is in Birmingham 3
shillings a night for maintenance allowance. That will be paid at the
exchange — that is, in addition to his wage. On the other hand, he may
wish to bring his family with him. He may have a house in Leeds,
which he wants to retain. In that case he may receive a continuing lia-
bility allowance, perhaps indefinitely, for an amount not exceeding 25
night until he gets a permanent lodging. He reports to the exchange
shillings a week. That is his alternative. He may get the mainte-
nance allowance or the continuing-liability allowance, but not both.
3172 WASHINGTON HEARINGS
The Chairman. Mr. Biddle, it might interest you to know that we
have in the United States 28 States making it a crime to transport a
poor person across State lines.^ So we could probably learn something
from England.
Over there, if a home or an apartment is bombed, and the family
loses its shelter and furniture, what is done for those people ?
Mr. BmDLE. In the first place, those people will go to the Assistance
Board, which was the national agency responsible before the war for
providing unemployment assistance. The Assistance Board will, af tei
an investigation of the case, make a decision of need, and will provide
funds for establishing them, and also it will provide money to buy
furniture and necessary househbld equipment at a new location. The
local authority will secure a billet, or a number of billets, or it will
provide a new house — that is, an unoccupied house — for the family.
If they have an income from wages or otherwise, they go ahead and
pay their rent. If they don't have, the money for that is made avail-
able b}' the Assistance Board. All of that takes place probably within
48 hours after the bombing incident occurs.
The Chairman. Would you please, Mr. Biddle, outline briefly for
the committee the main changes which have been made during the war
period in such social-security legislation as unemployment compensa-
tion, old-age benefits, and health insurance?
Mr. Biddle. First, the unemployment and health insurance acts have
both been amended to increase benefits and premium payments. The
additional benefits amount to 3 shillings a week in both cases, and they
represent increases to meet the cost of living.
Both of these forms of insurance have also been increased in scope —
that is to say, they cover a greater number of workers and groups that
had not been covered before.
In the field of old-age insurance, which is very similar to our
old-age security benefits in its general terms, first of all a supple-
mentary old-age insurance act was passed in 1940 which had the
effect of almost doubling the benefits, which had been very inadequate.
And in addition to that, it was also made a law early in the year
that the age at which women would be entitled to receive benefits
was reduced from 65 to 6'0.
In the field of assistance the most significant changes have been
made. Practically all forms of assistance have increased their rate
scales to meet increased living costs.
The former Unemployment Assistance Board (now called the As-
sistance Board) is administering the supplementary old-age pensions
on a means test and, in addition to that, is administering several new
forms of assistance which have been adopted to meet war needs.
The most significant change, from the standpoint of this country,
would be the so-called Prevention and Relief of Distress Act. That
is a provision whereby assistance can be made available by the As-
sistance Board to anyone losing his income from practically any cause
related to the war, on a less rigid means test than was used in unem-
ployment assistance and at somewhat higher rates.
Now, if a man were displaced from his employment because of
war conditions he might not be covered by unemployment insurance.
iQn Nov. 24, 1941. the United States Supreme Court handed down its decision in the
case of Edwards v. The State of California, No. 17, October term, 1941, declaring that
such laws are unconstitutionai barriers to interstate commerce.
NATIONAL DEFENSE MIGRATION 8173
If he were not, he would be available for assistance under the pre-
vention and relief of distress. The coverage is very wide, and it isi
very widely interpreted by the board in administering it.
The Assistance Board also investigates applications for civilian in-
jury pensions and assistance for people injured by enemy action, and
also for civilians who have lost their property. Such compensable
claims are covered under the War Damages Act, which will operate to
compensate claimants after the war, but pending that time they can
have their immediate needs met by the Assistance Board, and such
payments will serve as a credit to the war damages insurance, which
is compulsory. The act covers all real property.
IMPROVEMENTS IN HEALTH SERVICE
The Chairman. Wliat about health?
Mr. BiDDLE. In the field of health significant improvements have
been made in the British organized services. For example, the Emer-
gency Medical Service was started in 1939, just before the war. It
originally provided for civilian casualties, persons injured in air
raids; and an elaborate hospital service has been set up in the country
to deal with that problem. After the war struck it was apparent that
there were needs that had not been taken into account — transferred
war workers, the mothers and children who were evacuated from tar-
get cities, transferred civil servants, and various others. Practically
all categories affected by the war situation are now eligible for treat-
ment through the Emergency Medical Service, and if necessary for
hospitalization, and they pay according to their means.
Attention has been given to the nutrition of all classes and groups
in the population, exceeding anything that had happened in Eng-
land before the war. Public health measures generally have been
strengthened, necessarily because of damages to cities, but also be-
cause of all these i^roblems of war areas.
The Chairman. Your latest figure on unemployment is something
like 200,000?
Mr. BiDDLE. The figure dropped to some 219,000 in July.
The Chairman. Does the relief program take care of the unem-
ployed?
Mr. BiDDLE. That 219,000 are probably for the most part receiving
Unemployment Insurance. Because they are on the live registers and
because of the fact that unemployment doesn't last very long at this
time, most of those workers are passing from one employment to an-
other. Meanwhile they are probably receiving unemployment insur-
ance. But as for the people not covered by unemployment insurance,
they would receive aid from the Assistance Board, which is financed
entirely fi'om national funds with the exception of the so-called
imemployables, who would be receiving aid from the local unemploy-
ment committee and from the local council. That last group tends to
be static, and is about the same in war or peace. All groups not covered
by insurance would receive aid from the Assistance Board, and it
would be financed from the national funds.
Mr. Sparkman. Mr. Biddle, I gather that most of these things
you have been telling us about — these new benefits or additional
benefits are limited to the period of war, rather than adopted as a
permanent program. That is right, is it not ?
gl74 WASHINGTON HEARINGS
Mr. BiDDLE. They have been enacted to meet conditions that have
come out of the war.
Mr. Sparkman. Is it your understanding that they will be con-
tinued after the war, at least long enough to absorb the shock?
Mr. BroouE. I should think so. In England they are thinking of
most of these measures as continuing for the period of the emergency.
Dr. Lamb. You treated earlier the question of the worker who,
having a skill and having lost his job, was engaged to go to another
city through the machinery set up for transportation. Suppose th3
worker displaced does not have a skill in demand in war industry.
What are the arrangements that are being made to retrain him? I
suppose there is a considerable shortage of labor in England at the
present time in many lines. What provisions in terms of wage com-
pensation or assistance are made for him while he is in training?
Mr. BrooLE. The Ministry of Labor and National Service is re-
sponsible for the industrial training program. The worker will also
probably be interviewed at the Labor Exchange and after a consider-
ation of his skills and aptitudes generally, suggestions will be made
to him, probably for a training course to be given either in one of
the Government training centers or in industry under one of the
Government training schemes.
Dr. Lamb. Do they have multiplicity of training arrangements
such as exist in this country at the present time, or is the training
limited to those types which you have just named?
Mr. BmDLE. The governmental training schemes will of course
mean variations according to practice in the industry under consider-
ation, but in any case, even in the varied nongovernmental training
schemes, the training rates will apply one rate of compensation.
If the trainee is in a government school he will receive a nominal
wage plus a maintenance allowance for his wife and children, which
is somewhat along the line of insurance compensation, although
higher than the insurance compensation and lower than normal
wages. If he is being trained in another city, he will receive board
and lodging under this training scheme. Then if he goes to the non-
governmental training schools, he will receive a wage paid by the
employer in the case of industry, but at rates that have been agreed
upon in the public schedule for the industry.
Dr. Lamb. AVithout any contribution from the Government?
Mr. BiDDLE. There is a contribution from the Government in the
form of subsidies to employers for loss of time in the training process,
and that sort of thing. Not in the form of direct wages. After the
training process is completed, incidentally, the employee may not con-
tinue in the same industry or same factory if he is trained in the
Government school. He must go to another factory.
Dr. Lamb. AVliat is the advantage to the employer for paying for
training if he must go to another factory ?
Mr. BroDLE. The advantage to the employer is that he gets the pro-
tected-industry status. To become a protected industry is to enjoy
the privilege of not having men called out. The employer must agree
to this training program as a condition for becoming a member of the
protected-industry group.
Dr. Lamb. What is the object for which this special reservation was
designed — that is, that the worker may not work in the factory where
he has been trained ?
NATIONAL DEFENSE MIGRATi -.x 8175
Mr. BiDDLE. That is an agreement between the Cirir.'oyer and the
trade-union. I can only assume it is to avoid the exploitation that
sometimes comes up, and also the apprenticeship problem.
Incidentally, that worker whom you mention would receive unem-
ployment compensation during his period of unemployment and after
that receive aid from the Assistance Board until entering the training.
Before being accepted for training, he might have to stand by for
two or three weeks.
Dr. Lamb. Suppose he hadn't been placed?
Mr. BiDDLE. He would be placed immediately or be covered by one
of those agencies.
Dr. Lamb. Would you say that there were any other significant dif-
ferences in the British approach to the problem of training workers
for defense industry?
Mr. BiDDLE. No. I think the significant difference is the combining
of these functions so that the Ministry of Labor envisages the entire
problem of manpower by including industrial workers ancl men in the
military forces.
Dr. Lamb. Is it your opinion that this centralized arrangement, put-
ting employment and unemployment and all of the related problems
in the hands of the one Ministry of Labor and National Service, has
worked out well?
Mr. BiDDLE. I should say it is the prime strength of the British situ-
ation at the present time. There are undoubtedly a good many
weaknesses and points of friction still in the system, but they are
largely a matter for adjustment.
Dr. Lamb. A large part of this system has been developed within
the past year, although superimposed upon a more extensive system
of public assistance and social legislation that existed in that country.
Is that correct?
Mr. BiDDLE. Before the war the unemployment compensation ex-
isted, of course. So did the employment office.
labor PRIORITIES AS BETWEEN INDUSTRIES
Dr. Lamb. What about the problem of labor priorities as between
industries, the problem of skills within those industries, and the needs
for special types of workers ? How is that handled ?
Mr. BiDDLE. I should say that that is probably one of the most diffi-
cult spots in their entire problem. It is one of the causes, probably, for
the demand from many quarters for a Ministry of Production. You
may have seen something of the debates this summer in Parliament on
that point. In the final analysis, the decision among those claims for
priorities would probably rest in the Ministry of Labor. The asser-
tion is often made publicly that the chairman of the production com-
mittee doesn't exercise his authority in respect of priorities rigorously
enough. I don't know what the merits of that allegation are.
Dr. Lamb. The underlying problem has been discussed here this
morning to some extent, of getting orders together with men, and the
fact that two different agencies have these problems in hand. With
the problem of labor supply before the Ministry of Labor, and with
the problem of orders under another agency, are not complications
likely to arise with respect to labor priorities ?
gJ7l> WASHINGTON HEAKINGS
Mr. BiDDJLE. I should say the problem will have complications in any
event, but as between the two viewpoints, it would seem to me that the
problem embraces the entire labor supply question — that is, defense and
nondefense — with all of its implications of factory welfare, and so
forth; and I think it is best solved by lodging all of the manpowei-
responsibilities in a single agency wherever it lies. I am inclined to
think this is so, even if it should involve a departmental separation of
labor supply from production, although that is certainly a moot
question.
Dr. Lamb. Is there any special program for recruiting the resources
of labor supply which are not ordinarily considered to be part of the
Federal market — groups of women who are not usually employed and
persons over a certain age who have skills which would require refresh-
ing? What is the machinery for recruiting such groups for employ-
ment ?
Mr. BiDDLE. There has been a registration of women up to the agw
of 25, and I think they are in the process of registering age classes up
to 30. They are all being registered at the Labor Exchanges, inter-
viewed there and referred to training. There is a good deal of this.
It is done on a voluntary basis, but there is a good deal of public edu-
cation going on, focused again through the labor exchanges and the
public relations department of the Labor Ministry, to encourage women
to go into industry. Again it revolves about the Labor Exchanges as
far as actual recruitment is concerned.
The Chairman. Thank you very much, Mr. Biddle. We appre-
ciate your coming here.
Miss Dublin. Mr. Chairman, I should like at this time to offer for
the record a group of exhibits from sources not represented by wit-
nesses.
The Chairman. The exhibits will be made a part of the record. If
there is nothing further, the committee will stand adjourned.
(Whereupon, at 12 : 30 p. m., the committee adjourned, subject to the
call of the chairman.)
EXHIBITS
Exhibit 1. — Retraining and Transference in the Post- War
Economy
MEMOEANDUM BY DB. OSCAR WEIGERT, ASSOCIATE PROFESSOR OF COMPARATIVE SOCIAL
LEGISLATION, AMERICAN UNIVERSITY, WASHINGTON, D. C.
I. INTRODUCTION
The following memorandum is based upon two general assumptions:
(1) That public responsibility for transference and training will exist in the
post-war economy. It will exceed substantially the level of such responsibility
before the emergency.
(2) That in relation to the "unemployed in the labor market," training and
transference will, in the post-war economy, be recognized as definite and integrated
forms of social service.
These assumptions do not mean that in the post-war period, no responsibility
for return and transference will be left to industry, to unions and to the
individual wage earner. The coordination of their activities and of public
service in these fields would be an important aspect of the future problem.
Public guidance of transference of workers — geographical translocation as
well as industrial or occupational shifting — has, even during the present emer-
gency, been less extended and active, than public guidance of training.
Should the public attitude in the post-war period swing back to traditional
individualism particularly strong resistance might develop against public inter-
ference with the free choice of locality, occupation, and employer, even though
such interference bore no formal compulsion. This resistance might be over-
come by the urgent need for intervention. Public responsibility for training is
backed by preemergency tradition — vocational schools, fostering of apprentice-
ship— and should meet less opposition if it is coordinated with the training
policies of industry and labor.
We may conclude that the integration of training and transference into the
social services for the unemployed will continue.
n. GENERAL CHARACTER OF TASK
Amount and character of the problems of transference, retraining in the
post-war period will be defined by the following :
1. The time when the war ends.
2. The amount of dislocation — geographical, occupational, industrial — of the
labor force.
3. The general structure of the labor force at the time when the war ends^
age, sex, race, industry, occupation.
4. The degree to which up-grading of workers and the dilution of jobs have
been realized.
5. The extent to which the transferred and the trained workers have taken
root in their new localities and in their new jobs.
6. The general character of the post-war economy (a) during first transitional
periods (b) in its more definite structure.
7. The level of employment and unemployment in the post-war time.
8. The future policies of management and labor in relation to job classification,
promotion of workers, apprenticeship, other forms of training, their polic'ts
in regard to hiring and firing.
9. The degree to which "rights on jobs" will have been established by \a\f
or collective agreements.
8177
gl'Jg WASHINGTON HEARINGS
10. The development that social services, social-security programs, and institu-
tions of vocational education have undergone during the present emergency.
These are the most important specific considerations. But they may, for
longer or shorter time, be overshadowed by general political developments —
national as well as international.
III. SOME (COMMENTS ON H
1. Time when the war ends is of fundamental importance for most of the
other elements, particularly for those mentioned in Nos. 2, 3, 4, 5, 6, and 10. It
is particularly important for —
2. The amount of dislocation. The diversity of magnitudes for differently timed
endings of war is expressed by the National Resources Planning Board estimates
of a total labor force of 55.4 millions in 1942, and of 60.4 millions in 1944. In
1942, 2.5 millions will be in military service, 11.7 millions in defense industries,
and 41.2 millions in nondefense jobs, compared with 3.5 millions, 23.5 millions,
and 33.0 millions for the same three groups in 1944. These figures should be com-
pared with 0.4 millions in military service, 2 millions in defense industries, and
45.2 million employed in other jobs in 1939.
Of course, not all the defense workers of today, and of tomorrow, are, or will
have been, dislocated. Many will work for defense in the same shops and even
in the same jobs. But millions have, and will have, to migrate. And an even
greater portion of the labor force has to shift to new employers, new industries
and new occupations. A still greater portion endures some change in jobs or job
requirements.
3. The general structure of the labor force at the end of the war will reflect
these various changes. Its age, race, and sex structure will be of great importance
for transference and retraining. Some information about this structure is becom-
ing available, particularly statistical through the employment services. But
much broader information is, and will be, urgently needed.
4. And 9, of paragraph II should be considered together. We may expect that
up-grading of workers, and breaking down of jobs will reach much higher levels
before this emergency ends. Whether these processes will be reversed in post-
war time will be one of the primary problems of management and unions.
Up-grading, as well as breaking down, jobs may in some cases increase the
versatility of workers, and in this way be helpful for later transference and
training. On the other hand, many of these workers will have very limited
operative experience, particularly if they have gone through the typical "pre-
employment refresher" courses or through other quick forms of emergency
training. Quick, intensive, specialized training may become a handicap if the
organization of operations is reversed in post war time. This reversal seems
more probable than the continuation of the present job policies.
5. Social and industrial stability of workers, and the establishment of rights
on the job will have serious implications for transference and retraining. From
the former may arise psychological resistance against renewed transference
and retraining. Rights on the job on the other hand, particularly the right to
return to preemergency jobs, would facilitate these processes. How far such
rights will be realized depends very much upon —
6. The general character of the post-war economy, especially its level of
employment and unemployment.
Under the assumption of an allied victory, the post-war economy should
return to a better balance between its different branches. Some over-developed
industries may survive in restricted form, others may be able to convert for
peace-time production. Thus, some of the geographical, industrial, or occupa-
tional dislocation, suffered by workers during the present emergency may not
need correction by transference or training. But a very substantial portion of
the 23.5 millions defense workers, estimated by the planning board for 1944,
would definitely lose their war work opportunities and have to look for new
ones. Transference and retraining after the war will depend upon the nature
of the post-war economy.
The planning board rightly in.sists that time will be needed to shift produc-
tion and to shift workers. Only if the defense industries are liquidated sys-
tematically and gradually will there be suflBcient time for planned transference
of great numbers of workers.
How much time will be necessary for the post-war economy to reach a phase
of relative stability? What transitionary phases will be necessary? These
questions are important for transference and retraining. Nothhig could be less
NATIONAL DEFENSE MIGRATION 8179
desirable than transfer or training for temporary jobs or temporary places. It
would be better to bridge the gap in time between the end of war and the
growth of definite work opportunities by more extended ambitious training
methods, than to give short, intensive training similar to that used in the
present emergency. Apprenticeship in these trades where it is still economically
justified should become much more predominant than it is today. Necessary
as a program of public works will be in the transition period, these works
should be organized and localized so that they do not demand new transference
or training. Temporary maintenance of the worker, and his family will be
better policy than hasty' transfei-ence or training for only temporary positions.
Particularly helpful in transference and retraining will be — •
7. The further development of social security programs, and social services.
No greater step can be taken toward the realization of a definite program of
transference and training in post-war time than the nationalization of unem-
ployment compensation systems and the employment services. The coexistence
of 51 separate compensation sys'tems that do not mutually recognize credits
earned in other States will prove to be a great obstacle to the transference of
workers across State borders. Interstate clearance by the employment ser-
vices— a difficult technical problem in any case — has much greater prospects of
success in a national employment service.
Equally important is the liberalization and extension of unemployment com-
pensation, as suggested by our committee, to give the worker the necessary
breathing spell for substantial training and for well-considered translocation.
Not less desirable is the intgration of public works and unemployment relief,
with training programs, and with transference.
IV. CATIXiORIES OF WORKERS INVOLVED
The labor supply at the end of the war will consist of two main groups. Th©
majority will be "regular" workers of. at least, average employability who de-
pend upon work for their own and their families' living. There will, however,
be a substantial minority of "additional" workers who have been drawn into the
labor force by the shortage of regular labor but who might not be considered
employable in periods of labor surplus, or who do not depend upon jobs for their
existence, e. g., the numerous old people who are potential beneficiaries of age
benefits or assistance, small farmers and shop owners, married women, etc.
To this existing labor force will then be added the current afflux of new
comers who again consist of two categories : the regular recruits of the labor
market, particularly youth who do not go into higher education, and new groups
of "additional" workers, who may be pushed into the labor market by unemploy-
ment of the family breadwinner or other losses in family income.
There will exist also in the labor force of post-war days the short-term move-
ments that have been described by Howard Myers and others.
The policy of transference, retraining and training will have to reconsider these
different categories. It should concentrate upon the "regular" workers and the
"regular" labor market recruit. It would be wrong to hold "additional" workers
in the labor force, or to bring them into the market if these "additional" workers
have no sound prospects of adequate employment, or do not need employment.
This policy will be unusually delicate in Its application to the "additional"
workers who have been in the labor force of the emergency period, have built up
credits for unemployment benefits and may try to use these benefits as a bridge
to training courses or transference actions.
The first phase of the post-war period will see the return of the demobilized
soldiers many of whom will have belonged to the "regular" labor force. It might
seem easier to time and direct their return into work-life than any other group.
Such planning and timing might, however, be seriously hampered by the popular
pressure for fast demobilization. Many soldiers will need some retraining even
if they return to their old jobs. It might be expected that this task will, in most
cases," be dealt with by the employer. The demobilized soldiers should in any case
be equipped with claims for unemployment benefits to give them the necessary
maintenance during periods of transference and of out-industry training.
In the care of the demobilized soldier, military and civilian services will have
to cooperate. Particularly important will be cooperation between public employ-
ment services and military authorities.
gJ^gQ WASHINGTON HEARINGS
V. SPECIAI, PROBLEMS OF TRANSFEKEiNOE
The problems of transference are twofold : To oppose translocations that give
no prospects of satisfactory earnings, and to organize and direct transferences
that are economically and socially sound.
These problems are inseparable. The stronger the means are by which trans-
ference can be supported, the more might it be possible to hinder undesirable
movements by refusing to use these means.
An indispei'isable tool for such a policy would be a public fund from which loans
or grants for costs of transport could be made. Such loans or grants should cover
also the transport of family members and the temporary maintenance of the
worker and his family under clearly defined statutory conditions. This fund
should be an integral part of unemployment compensation.
It might be possible to influence the process of translocation indirectly by some
additional provisions in unemployment compensation, by authorization, for in-
stance, to establish residence requirements for eligibility, or to define work in dis-
tant localities or outside of the worker's experience as "suitable work," perhaps
only in the transitory period and only in relation to extended benefits.
Another important tool is the broadest possible information about the labor
market, information usable by the labor-market expert, but also material that
the individual worker can use in his decisions, like the farmer's use of the
current reports of the Weather Bureau.
A large portion of translocations will, in any case, go on through individual
initiative and on the individual's risk, and the task of the employment services,
and of other authority, will in these cases be limited to information, encourage
ment. and warning.
The employment service sliould, in its current information about prospects
and trends of the labor market in post-war time, clo.^ely cooperate with the
labor unions, particularly on the local level, and request their assistance in
the policy of translocation.
It is very fortunate for the public employment service that close contact
with many emplovers has been established in the present emergency. But things
will look very different in the post-war period. Many of these well-established
contacts will vanish with the liquidation of defense industries. The position of
the employment service will then, as before the emergency, depend upon its
quality. Legal monopoly in placements, or legal compulsion to use the service,
have only nuisance value if the service lacks in efficiency.
The process of liquidation and transference might well go on for several years.
Even after this process has been ended, and when the post-war economy takes
s more definite shape, financial support of necessary translocations should exist
as definite function of a system of unemployment compensation.
VI. SPECIAL PROBLEMS OF RETRAINING
Insofar as post-war retraining and training does not depend upon private
initiative, it should be coordinated with vocational education and apprenticeship
programs, on the one hand, and with the employment services on the other.
The exploration of the labor market in its local and superlocal layers, the
counseling of the applicant for training, the referral to the training institutions,
or to industry as far as training is being carried out by industry itself, and the
placement of the trained workers should remain in the domain of the employ-
ment services. Their knowledge of the labor market should also be used in
the definition of objectives and methods of training. An excellent pattei-n for
such a cooperation has been established during the last months, and should not
be lost again. Equally important as a pattern for future developments is the
creation of advisory committees of management and labor with vocational educa-
tion. It seems desirable to establish close contact between these committees and
the advisory committees of the employment services.
These suggestions have a much greater chance for realization in a national
system than in 51 separate State employment services. The training program
seems to be complicated by training work of the National Youth Administration.
The same is true for training activities of other agencies such as C. C. C. and
W. P. A.
Insofar as training is handled by private industry there should be close coop-
eration with public authorities in order to avoid duplication of efforts. But also
labor has to be the third partner in this cooperation, because of its interest in
amount and qualities of learners, trainees, and apprentices, and because of the
influence it exercises by collective agreements.
NATIONAL DEFENSE MIGRATION 8181
Three aspects of the post-war economy fundamentally different from the
emergency period, should affect general training policies :
(1) Its broad industrial diversification and broad geographical dispersion.
(2) Its mere definite character.
(3) The sharper distinction between skilled,) semiskilled, and nonskilled
workers and jobs.
Post-war objectives and methods of retraining and training should be funda-
mentally different from present objectives and present methods. Training of the
"preemployment refresher," one of the strongest elements in the present public-
training program, will be very useful during the transitional period for demo-
bilized soldiers and defense workers who return to their old jobs. Tlie same
might be true for the "supplementary" courses. They might, however, lose in
importance as far as "up-grading and breaking down of jobs" stops.
There will always be the need for "vestibule" training, and this need will not
be satisfied entirely by industry itself. The public responsibility for unemploy-
ment compensation will push the authorities to use this method of training.
Compared with the present program, much more emphasis should be given to
extended vocational training and to apprenticeship.
Today training necessarily is concentrated upon a limited number of industries
and occupations, but its objectives will in the post-war period cover the whole
gamut of economic activities, with special emphasis upon those that had to be
neglected during the emergency, e. g., services of all sorts and agriculture.
Post-war training should be formally recognized as a social service. It should
be integrated into unemployment compensation, in the same way as in Britain
and other countries. That means that, on the one hand, training would, under
certain statutory rules, become a condition of eligibility, and, on the other liand,
unemployment compensation could be used for the maintenance of the trainee and
of his family. It might be advisable to provide additional funds in the compen-
sation scheme for additional remuneration of the trainee, and for certain general
expenses as far as these expenses cannot be taken over by vocational schools.
VII. SUMMARY
(1) Transference and training, retraining as well as the training of the labor
market recruits, should be included in post-war planning. Compared with public-
work programs, transfei'ence and training require much sm.aller investments
and they return the worker to a normal economic status. Of course, large
post-war programs of public works will be indispensable but they must be
coordinated with training and transference.
(2) The program of retraining and transference cannot be definitely established
before the definite amount and character of dislocation, resulting from the
present war economy, is known.
In addition a clearer picture of the post-war economy is needed. It is of
uttermost importance to collect now and currently all available material on —
(a) Amount and character of translocation of workers — geographical, indus-
trial, occupational.
(&) The structure of the labor supply, with special attention to the "addi-
tional" elements in it.
(c) The experience, that is now growing up, concerning methods and results
of training courses.
id) The changes in job requirements.
(e) The establishment of rights on jobs.
The excellent work of the Tolan committee on defense migration, in exploring
the social situation of the translocated workers, will be of greatest help for
the post-war plans. This work should be continued on the broadest possible
scale.
A very important tool for retraining after the war would be created by the
establishment of individual records that report the training experience of the
emergency trainees. Such cards would have to be filled by the leader of
the course, and then be kept in the files of the employment service, together with
the trainee's application card.
(3) Nationalization of employment services and unemployment compensation
systems would be one of the most important steps toward efficient trans-
ference and retraining in post-war time. Employment services need permanent
support and attention to enter the post-war period on a higher level of
efficiency.
The progress in labor market reporting should be intensified and extended.
The question of current popular labor market reports asks for special study.
8182
WASHINGTON HEARINGS
(4) Transference and training sliould be integrated with unemployment
compensation as definite forms of social service. There should be provided,
in integration with the compensation scheme:
(a) Grants and loans for costs of translocation.
(6) Maintenance of the trainee and his family during the trammg.
(c) Funds for additional expenses of trainees, and in special cases, for the
costs of training courses.
id) Authorization to establish certain residence requirements and trainmg
requirements as conditions of eligibility.
(5) Cooperation should be established —
(a) Between military and civilian authorities for preparing and operating
the transference and, if necessary, retraining of the demobilized solders.
(6) Between the Department of Justice and the Labor Market Administration
to coordinate immigration in post-war time with internal migraton.
(6) Condition for successful transference and training would be current,
close cooperation not only between the various interested agencies, but alsO'
between these agencies on the one hand, and management and labor on the
other hand, both on the local as well as on the superlocal level.
Exhibit 2. — Use of Kadio by United States Employment Service
BEPORT BY W. L. MITCHEXL, ACTING EXECUTIVE DIRECTOB, SOCIAL SBOUKITT BOARD,.
FEDERAL SECURITY AGENCY, WASHINGTON, D. C.
With the transfer of the United States Employment Service to the Social
Security Board in 1939 and the establishment of the present Bureau of Em-
ployment Security, both the Board and the State employment security agencies
have made an extensive effort to disseminate information on employment se-
curity to the public by radio With the coming of the national defense pro-
gram, this informational effort has progressively increased in view of the
heavy responsibilities which the United States Employment Service has been
given.
Emphasis in this radio program has been geared to the changing situation
and to the administrative necessities of the employment security program,
with particular stress upon the employment service. The chief categories in
which information has been issued have been, (1) urging workers to register
with local employment offices and, in particular, workers having skills needed
in defense industries, (2) warnings to workers against undirected travel in
search of defense jobs, (3) information regarding job openings, and (4)
general information on developments in the defense program.
Over a period of 2 years, almost every form of radio activity emphasizing
the above points has been carried on, in more or less degree. This includes
speeches by Washington, State and local employment security and defense
officials ; interviews with these officials ; dramatic sketches, transcribed and
"live" ; and spot announcements. National radio chains and local radio stations
have cooperated.
The migration of defense workers, in which your committee is undoubtedly
chiefly interested, has been given attention by the Board and State agencies
during the past year. A continuous attempt has been made to influence
migration by outright warnings to workers not to travel without prior check-
ing with the local employment office, by pointing out that the local offices are
the central clearing points for jobs, and by explaining the Government labor
clearance system by which a worker in one locality, through his local employ-
ment office, can be put in touch with jobs in his line in other parts of the
country.
The Board has been instrumental in securing several Nation-wide broad-
casts in which these points were emphasized. For example, Administrator
Paul V. McNutt was interviewed by Eric Sevareid over a Columbia Broad-
casting System network on March 22, 1941; and Mr. Ewan Clague, Director,
Bureau of Employment Security, was interviewed over a Mutual Broadcasting
station on March 14, 1941. Mr. William Green, president of the American Fed-
oration of Labor, strongly emphasized this point in a speech over a National
Broadcasting Co. network on April 3, 1941.
In addition to national broadcasts, the Board has prepared a large amount
of finished and draft radio texts which have been very widely used by State
employment security agencies.
NATIONAL DEFENSE MIGRATION 8183
In a series of transcribed radio messages, of which 700 transcriptions were
made available to State agencies for local radio bookings, the danger of labor
migration was stressed by Mr. Sidney Hillman of the Office of Production Man-
agement, and by Mr. Arthur Altmeyer, Mr. Ewan Clague, and Mr. Oscar
Powell of the Social Security Board. Although we have no statistical data, we
know that these transcriptions were widely used throughout the country, often
supplemented by closing announcements from local employment offices, reiterat-
ing this message.
Draft radio materials prepared by us, carrying similar emphasis have been :
A series of 13 radio interviews, "National Defense and You" ; 30 spot announce-
ments ; a talk entitled "Meeting Labor Needs for National Defense" ; an inter-
view entitled "Jobs for Youth" ; a speech for State employment security di-
rectors ; and several sketches in a series of five dramatized radio programs,
"Jobs for Defense," the latter about to be issued.
It should be pointed out that these draft materials are often used by 1 to
48 States and by many of the 1,500 local employment offices in the States.
Consequently, the broadcast of this material is much more extensive than would
be inferred by the single listing above.
Within the last year, all or part of a series of eight transcribed dramatic
radio programs entitled "Jobs for America," which explained the placement
functions of the United States Employment Service and urged workers to
register for jobs, was broadcast over more than 400 radio stations in 47 States.
In addition to the Board's program, most of the State employment security
agencies carry on active radio programs. A very consideralDle amount of
broadcasting on labor migration has been done, particularly in those States
where the influx of migrant labor has been a serious economic and social
problem.
It is not possible to provide statistical data as to the extent of such radio
broadcasting but from our examination of State agency informational materials,
we can assure you that the activity has been continuous, extensive, and has
utilized speeches, interviews, and spot announcements, chiefly the latter.
(Enclosed herewith is a sampling of the text of some of the State agency
broadcasts. Much of this material is of a draft nature prepared by State
agencies for local office use. Consequently any one script may be used over from
one to 25 radio stations in a State and, in the case of short announcements, may
be broadcast by a station several times a day or week.
In addition to emphasis by radio both the Board and the State agencies
have been utilizing other informational media to influence labor migration. For
instance, last year we provided State agencies with a poster warning workers
not to travel without first checking with local employment offices, for posting
in local post offices throughout the country. Several pamphlets emphasized this
point, as well as a number of speeches, news releases, etc. Likewise, many
State agencies have been utilizing various media for issuing similar messages. '
It is a major part of our present informational program to continue our
efforts to reduce or direct labor migration by working with the informational
staffs of our regional offices and the State agencies in those areas which are
particularly affected. This will include those areas into which workers are
migrating and those from which the majority of workers come.
[Enclosure]
Excerpts Feom State Employment Secubity Radio Texts on Laboe Migration
Illinois.
"The place to apply for work * * * either here in East St. Louis or
anywhere else * * * jg j-ight here in East St. Louis at the Illinois State
Employment Service at 437 Missouri Avenue. * * * An inquiry at 437
Missouri Avenue— before starting a job hunt to another city— will usually save
the worker the disappointment that he ordinarily faces when he reaches his
destination — the information that there are no openings or that only local labor
is being hired."
"Unemployed workers * * * don't leave your home cities and travel
around the country following rumors of jobs. The best way to get a job now
IS to register with the nearest office of the Illinois State Employment Service
and then remain in your home town where you can be reached quickly when
you are needed for a defense job. You've probably read in vour daily paper
about the letting of contracts for defense plants. * * * j 'want to ask any
60396 — 41 — pt. 20 12
g]^g4 WASHINGTON HEARINGS
unemployed worker who may have read about these plants * * * ^^^j ^^jjq
may have any idea of going to the towns where the plants are being built to
look for a job * * * ^ot to do it. I'm going to repeat that again for
emphasis * * * don't * * * don't * * * don't go to towns
where Government plants are being built to look for work. You will not get
a job that way * * * you will cause a lot of unnecessary confusion
* * * and you'll probably miss out on a job at home as well. * * *
Practically all the jobs in connection with such plants * * * ^pill be filled
through the offices of the State employment services in the towns where the
plants are located. * * * '^Iqu who rush to these towns * * * ^i\] be
wasting time and money. * * * The best way to get a job in the defense
industries * * * is to register with your local office of the State employ-
ment service and then stay right in your home town wliere you can be reached
when the employment service needs somebody in your line of work."
Georgia.
"If you are looking for work, consult the office of the Georgia State
Employment Service. * * * Don't travel about until you have checked the
job possibilities with the Employment Service. Tlie local office is located at
"If you are looking for work, you should register with the Public Em-
ployment Office. * * * This office can get information about jobs available
throughout the State as well as the country in connection with the national-de-
fense pro'-ram. * * * Dq not travel looking for work in other cities until you
have applied for work at the office, located at "
Florida.
"Don't depend on rumor about jobs opening up in defense industries. Make
certain by asking at the office of the Florida State Employment Service,
located at * * * Save time and money by knowing where the job
is before you start out."
Pemisiilvania.
"You can save time and money by inquiring at your local Pennsylvania State
Employment Office before traveling in search of defense jobs."
"I would recommend that you shouldn't leave your home town in search of work
elsewhere * * * unless the local employment office tells you there is a defi-
nite opening somewhere else."
Exhibit 3. — Press Release of Labor Division, Office of Production
Management
"Washington, D. C.
August 9, 1941
Machinery set up through Government, management, and labor cooperation for
reemployment and training of 3,600 displaced automobile workers in the Buffalo
industrial area should serve as a national model in overcoming the unemployment
created by shut-down of nondefense plants. Acting Director-General Sidney Hill-
man, of Office of Production Management, said today.
Hillman received reports from Arthur S. Flemming, chief of the Labor Supply
Branch of Office of Production Management, and Eli L. Oliver, Chief of Office of
Production Management's Labor Relations Division, that four big defense plants
in the Buffalo area a'vreed in a conference yesterday to employ at once 500 of the
workers who lost their jobs when the North Tonawanda Chevrolet plant closed
down for retooling. The plant will reopen in several months as an airplane-
engine factory.
Eight hundred others have already been rehired, and 225 others are being
retrained.
Hillman pointed out that the Buffalo-area problem was typical in many respects
of the labor dislocations expected to result in tlie next few months from conver-
sion of nondefense plants and from the operation of defense priorities which will
deprive factories of their essential materials. Hence the pattern worked out for
the Buffalo workers may be considered as a "pilot" which should be helpful in
meeting similar situations elsewhere, Hillman said. In one-industry cities, addi-
NATIONAL DEFENSE MIGRATION 8185
tional steps will be necessary, such as the awarding of defense contracts to
consumer-goods plants, especially among the small and medium-sized enterprises,
he noted.
Flemming predicted at least half of the 3,600 would be employed within a month.
"Defense training facilities in the public vocational schools of the Buffalo area
will be readjusted and streamlined to provide opportunity for training in the
shortest possible time to those of the Chevrolet employees who are not now com-
pletely qualified, and who desire to equip themselves for future employment,"
Flemming reported. He estimated about three-fourths of the 3,600 will need soma
retraining to qualify for defense jobs.
Flemming also pointed out tliat tlie retraining period averages from 3 to 5 weeks,
that the Buffalo plants have signified their willingness to hire all workers qualified
by retraining and that each trainee will receive $15 a week as unemployment com-
pensation during the period of training.
Oliver reported that Walter Reuther, director of the General Motors division of
the United Automobile Workers, Congress of Industrial Organizations, had taken
special steps to cooperate and speed up the registration of the auto workers with
the public employment offices. Under this procedure, Reuther is assigning union
representatives of the employment oflices to assist in registration and classifying
of workers.
Expansion of fields of employment for the furloughed Chevrolet workers wag
promised through a statement by Nathan Cowan, subregional director of the
Steel Workers Organizing Committee, who said his organization would help to aid
the men get jobs in Buffalo area steel plants.
The four defense plants whose executives met with Office of Production Man-
figement rein-esentatives in working out the procediire were : Bell Aircraft Cor-
poration, Worthington Pump & Machinery Corporation, Buffalo Arms Corpora-
tion, and the Curtiss-Wright Corporation.
Exhibit 4. — Placement, Types of Jobs, and States of Origin in
Clearances Through National Youth Administration Regional
Centers
report by aubrey williams, administrator, national youth administration,
federal security agency, washington, d. c.
August 2, 1941.
Mr. Aubrey Williams,
Administrator, National Youth Administration,
Federal Security Agency, Washington, D. C.
Dear Mb. Williams : Thank you for your letter of July 30. A copy of the
hearing of July 21 will be sent you when it is printed.
As the committee understands it, the National Youth Administration residence
centers in the various States are acting as clearing houses for out-of-State youth.
Can you tell us whether a study is being made on out-of-State young people in the
National Youth Administration residence centers as to their age, birthplace, last
previous address, type of training undertaken, and industry entered upon comple-
tion of training?
We feel that the National Youth Administration is in an excellent position to
guide the migration of young people into defense jobs, and we equally feel that
complete studies made of such migration by the National Youth Administration
would be of great value both to the National Youth Administration and to the
committee in its work.
With all good wishes, I am.
Sincerely,
John H. Tolan, Chairman.
October 28, 1941.
Mr. John H. Tolan,
Chairman, House Committee Investigating National Defense Migration,
Wasliington, D. C.
Dear Mr. Tolan : Attached are tables showing information on placements made
at several of the National Youth Administration regional resident centers. These
tables have been compiled in accordance with your resquest of August 2, 1941.
8186
WASHINGTON HEARINGS
Detailed placement information was available for only a portion of the youth
employed at these centers who obtained jobs in industry.
Accordingly the information presented in the attached tables represents only an
incomplete picture of the placement situation. However, it may serve to give
some indication of the types of jobs being obtained and their locations.
It should be noted that the length of time covered by the data varies in the dif-
ferent centers. Where available, the States of origin of the youth as well as the^
States of placement have been shown.
Sincerely yours,
Aubrey Williams, Administrator.
(The tables referred to above are as follows:)
Table A. — Federal Secui'ity Agency, 'National Youth Administration — Out-of-
State youth placed in private industry, National Youth Administration
regional resident center, Nepaug, Conn., June 3 to Aug. 20, 19Iil
State of origin
state of placement and firm
Total
Ala-
bama
Arkan-
sas
Missis-
sippi
New
Yoxk
Penn-
sylva-
nia
West
Virgin-
ia
Grand total .. - -.-
233
6
14
34
30
61
88
231
6
14
32
30
61
88-
Billings Spencer Co., Hartford
6
4
1
8
10
12
1
3
2
1
2
16
7e
1
1
1
7
1
2
20
2
29
22
3
6
Bullard Co., Bridgeport
4
Fruehof Trucking Co., Hartford
1
General Electric Co., Bridgeport
8
Hamilton Propeller Co., Hartford
4
' i"
1
4
5
Hand Lathe Co., Torrington
8
Hanson & Whitney Co., Hartford
Hartford Machine and Screw Co.,
Hartford . -.-
3
2
Hartford Specialty Machine Co., Hart-
ford
Industrial Welding Co., Hartford
1
1
M. & B. Co., HartioiQ .
3
1
M. & B. Co., New ±iavbu_
6
25
9
New Departure Co., Bristol
8
7
4
1
1
29
New England Blower Co., Hartford
Nickerson Tool Co., New Britain.
Scoville Mfg. Co., Waterbury
1
Seth Thomas Clock Co., Thomaston
3
4
Sterling Blower Co., Hartford
2
7
Underwood-Elliott-Eisher Co., Hartford.
13
2
3
2
2
Union Hardware Co., Torrington
United States Aluminum Co., Bridge-
port ...
1
1
5
4
4
21
Vought-Sikorsky Aircraft Corporation,
Bridgeport
Warren-McArthur Co., Bantam
1
New Jersey: Electric.Boat Co., Bayonne
2
2
NATIONAL DEFENSE MIGRATION
8187
Table B. — Federal Security Agency, National Youth Administration — Youth
placed in private industry. National Youth Administration regional resident
center, Quoddy Village, Maine, June 1, 19//0, to Aug. 1, lOJfl
state of placement and firm
Grand total _
Connecticut, total-
Hamilton Standard Propeller Co., Hartford
Pratt and Whitney Aircraft, Hartford
Vought-Sikorsky Aircraft Corporation, Bridgeport.
Subtotal aviation
Allen Manufacturing Co., Manchester
American Brass Co., Ansonia
American Steel & Wire Co., New Haven...
Aluminum Co. of America, Bridgeport
Blake & Johnson Co., Waterville
Corbin Screw Corporation, New Britain
Electric Boat Co., Groton
Farrell Foundry & Machine Co., Derby
General Electric Co., Bridgeport
Geometric Tool Co., New Haven.
Hamilton Standard PropeDor Co., Hartford
Hanson-Whitney Machine Co., Hartford
Hartford Machine Screw Co., Hartford
Jacobs Manufacturing Co., Hartford..
Laminated Shim Co
Leeds Electrical & Manufacturing Co., Hartford.
Lewis-Engineering Co., Naugatuck
Lucas Machine Co., Bridgeport
Manning, Maxwell & Moore, Bridgeport
Maxim Silencer, Hartford
O. F. Mossberg & Sons, New Haven
New Britain Machine Co., New Britain
New Departure Co., Meriden
Pratt & Whitney Aircraft, Hartford
Remington Arms Co., Bridgeport
Standard Machine Co., Mystic
Stanley Works, New Britain
Yale & Towne Manufacturing Co., Stanford
Winchester Repeating Arms Co., New Haven...
Subtotal machine shop
General Electric Co., Bridgeport.
Air Systems Manufacturing Co., Bridgeport
American Steel & Wire Co., New Haven...
Trumbull Electric Co., New Britain...
Vought-Sikorsky Aircraft Corporation, Bridgeport,
Subtotal, sheet metal
Maine, total.
John H. Jameson, Bangor
Lucas Tree Expert Co., Portland.
Subtotal, agriculture
Hotel Eastport, Eastport
Warren K. Wentwortli, Kennebunk.
Subtotal, cafeteria
Bates Manufacturing Co., Lewiston
International Harvester Co., Portland
Madison Woolen Co., Madison
Pepperell Manufacturing Co., Biddeford
Saco-Lowell Shops, Biddeford ...
Terry Roller Bushing Co., Bath
Worumbs Manufacturing Co., Lisbon Falls.
Subtotal, machine shop
Thomas Laughlin Co., Portland.
Maryland, total
Glenn L. Martin Co., Baltimore.
Do
Type of work
Aviation.
do...
do...
Machine shop.
do
do
do
do
do
do
do
do
do
do
do
do
do
do
do
do
do
do
do
do
do
do
do
do
do
do
do
do
Radio.
Sheet metal.
do
do
do
Agriculture.
do
Cafeteria.
....do...
Machine shop.
do
do.
do
do
do
do
Sheet metal -
do...
Aviation.
Number
of youth
8188
WASHINGTON HEARINGS
Table B. — Federal Security Agency, National Youth Administration — Youth
placed in private industry, National Youth Administration regional resident
center, Quoddy Village, Maine, June 1, 1940, to Aug. 1, 1941 — Continued
State of placement and firm
Type of work
Number
of youth
Massachusetts, total-
Atlantic Bakery, Fall River..
Megowen-Educator Ford Co.
Oceanside Hotel, Magnolia...
Blade's Barbecue, Boston
Subtotal, cafeteria.
Acushnet Process Co., New Bedford
American Bosch Corporation, Springfield
Atlas Tack Corporation, Fairhaven
Atwood & Morrill Co., Salem
Bethlehem Steel Co., East Boston
Bidwell & Thomas, Greenfield
Bird & Son Co., North Walpole
Brown & Sharpe Co., Hadley
Cogswell Manufacturing Co., West Springfield
Continental Screw Co., New Bedford
Fore River Plant, Quincy
General Electric Co.:
Lynn
Pittsfield
Greenfield Tap & Die Corporation, Greenfield
J. W. Greer Co., Cambridge
F. A. Harris, Springfield
Johnson & Johnson Manufacturing Co., Hadley Falls.
Lewis-Shepard Co., Watertown
Morse Turist Drill & Machine Co., New Bedford
F. W. Perlyshire Co., Walthan
Reed & Prince Co., Worcester
Simond's Saw & Steel Co., Fitchburg
Walworth Manufacturing Co., Boston
Warren Telechron, Ashland
Watertown Arsenal, Watertown
Winter Bros. Co., Wrentham
Worthington Pump & Machinery Corp., Holyoke
Subtotal, machine shop.
Harvey Radio Laboratories, Cambridge.
National Co., Radio Engineers, Maiden.
Subtotal, radio.
American Sheet Metal Works, Watertown.
New Hampshire, total.
Kingsbury Machine & Tool Co., Keene.
Mackera Machine Co., Keene
Mayberry Shoe Co., Rochester
Nashua Brass Co., Nashua
Subtotal, machine shop
New Jersey, total
Brewster Aeronautical Corporation, Newark .\irport..
Calco Chemical Co., Bound Brook
Machine Repair, Sale Affiliates, Inc., Hoboken, N. J.
Watson-Flagg Machine Co., Paterson
Subtotal, machine shop
Electric Boat Co., Bayonne.
Steel & Equipment Co
Subtotal, sheet metal-
New York, total
Bell Aircraft Co., Buffalo
Curtiss-Wright Corporation, Buffalo
Link -Aviation Services, Binghamton
Pan-American Airways, New York City
Republic Aviation Corporation, Farmingdale.
Subtotal, aviation.
Cafeteria,
.--do...
do.--
do...
Machine shop.
do
.do.
-do.
.do.
-do.
.do-
.do.
-do.
.do.
.do.
.do.
.do.
.do-
-do.
.do-
do.
.do.
-do.
-do-
-do.
.do.
-do.
-do.
-do.
-do.
.do.
Radio-
-..-do.
Sheet metal.
Machine shop.
do
do
do
Aviation.
Machine shop.
do
do
Sheet metal .
do
Aviation.
do...
do...
do...
.do.
NATIONAL DEFENSE MIGRATION
8189
Table B. — Federal Security Agency, National Youth Administration — Youth
placed in private industry, National Youth Administration regional resident
center, Quoddy Village, Maine, June 1, 19J,0, to Aug. 1, 1941 — Continued
state of placement and firm
New York
American Machine & Foundry Co., Brooklyn
Buffalo Forge Co., Buffalo
Dcehler Dye Coating Co., Batavia
R. E. Dietz Co., Syracuse
International Paper Co., Niagara Falls
Intertype Corporation, Brooklyn...
Manufacturers' Machine & Tool Co., New York City.
Merrill Bros., Masfeth
Morse Chain Works, Ithaca.
Rollway Bearing Co., Syracuse
Young & Young, New York City
Subtotal, machine shop
Pilot Radio Corporation, Long Island City-
Bell Aircraft Co., Buffalo
Fastern Wire Goods, New York City.
Gleason's Works, Rochester
Subtotal, sheet metal.
Pennsylvania: Line Utility Co., Jenkinstown.
Ehode Island, total
American Standard Watch Face Co., Providence-
Brown & Sharpe Co., Providence..
Franklin Machine Co., Providence
Screw Machine Products Co., Providence
Taco Heaters, Providence
Subtotal, machine shop.
Vermont, total...
Henry E. Gtrard, Burlington
Bryant Chucking Co., North Springfield-
W. K. Buckley Co., Burlington
Fairbank, Morse, St. Johnbury
Howe Scale Co., Ruthland
Jones & Lamson, Springfield
Subtotal, machine shop,
G. S. Blodgett Co., Burlington-
Type of work
Machine shop-
do
-...do
do
do
do
do .-.
do
do
do
do
Radio-
Sheet metal.
do
do
-do.
Electrical.
Machine shop.
do
do
do
do
Cafeteria
Machine shop.
do
.do.
-do.
.do.
Sheet metal.
Number
of youth
14
17
Table C. — Federal Security Agency, National Youth Administration — Out-of-
school youth placed in private industry, National Youth Administration regimml
resident center, South Charleston, W. Va.
State of origin
State of placement and firm or city
Total
Illinois
Ken-
tucky
Mary-
land
North
Caro-
lina
Penn-
sylva-
nia
Vir-
ginia
Wiscon-
sin
Grand total
87
1
6
1
12
51
14
r2
Maryland, total
40
3
1
3
26
7
Glenn L. Martin, Baltimore
Maryland Drydock Co
38
1
1
3
3
26
6
1
City of employment: Baltimore.
1
North Carolina, total
1
1
Butler <fe Lee Drug Co., Dunn..
1
1
Pennsylvania, total
5
5
General Electric
3
1
1
3
1
1
City of employment: Darby..
8190
WASHINGTON HEARINGS
Table C. — Federal Security Agenoy, National Youth Administration — Oiit-of-
school youth placed in private industry, National Youth Administration regional
resident center, South Charleston, W. Va. — Continued
State of origin
State of placement and firm or city
Total
Illinois
Ken-
tucky
Mary-
land
North
Caro-
lina
Penn-
sylva-
nia
Vir-
ginia
Wiscon
sin
West Virginia, total
41
1
3
8
20
7
2
Barium Reduction Corporation,
South Charleston
5
1
27
1
1
2
2
2
1
1
1
1
17
2
Carbon Carbide Co., South
Charleston.
Carnegie-Illinois Steel Corpora-
tion, South Charleston
Dupont, Belle _..
1
2
3
1
4
General Machine, South Charles-
ton
1
Owens-Illinois Glass, Kanawha
City
2
Trojan Steel Corporation,
Charleston
2
1
Western Electric Co., Charles-
ton
1
Table D. — Federal Security Agency, National Youth Administration — Out-of-
school youth placed in private industry, National Youth Administration regional
residence center, Weiser, Idaho, Jan. 1 to Aug, Jf, 1941
State of origin
State of placement and firm or city
Total
Cali-
fornia
Nevada
North
Dakota
Oregon
Wash-
ington
West
Virginia
Wyo-
ming
Grand total . t
38
4
1
1
23
6
1
2
California, total
3
1
2
Lockheed Airport . - -
2
1
2
City of employment: Antioch. .
1
Idaho, total .
12
2
1
8
1
Boise Airport, Boise. ... .
2
1
1
2
1
1
1
2
1
1
1
1
1
2
1
Boise Welding & Machine Shops,
Boise... . . _._
Chamberlain Chevrolet Co.,
Weiser
Dewey Place, Nampa
Hotel Boise, Boise .. _. .
Montgomery Ward, Weiser
1
W. W. Gartin, Boise
1
1
City of employment:
Boise
1
Payette _
1
Oregon, total
16
1
12
1
1
1
Cortley Allen, Burns
1
1
1
1
1
1
1
1
1
1
2
2
1
1
1
1
1
1
Ericksons Grocery .-
Fred Fish, Ironside
Ironside Lumber Co., Ironside
J. A. Tcrtling & Son, Hermistcr
1
M. A. Bowman. Huntington
1
1
1
1
1
1
2
Van Pattern Lumber Co., On-
tario
City of employment:
Pendleton
1
Portland
1
Yuba City
1
NATIONAL DEFENSE MIGRATION
8191
Table D. — Federal Security Agenoy, National Youth Administration— Out-of-
school youth placed in private industry. National Youth Administration regional
residetice center, Weiser, Idaho, Jan. 1 to Aug. 4, 1941 — Continued
State of origin
State of placement and firm or city
Total
Cali-
fornia
Nevada
North
Dakota
Oregon
Wash-
ington
West
Virginia
Wyo-
ming
7
1
1
5
Carnation Dairy, Carnation
Spokane Review, Spokane
City of employment:
1
1
1
1
1
1
1
1
1
1
1
1
1
Walla Walla
1
(The following correspondence was received after the publication
of Part 18 (Detroit Hearings — Industrial Section) and is added to the
record by authority of the chairman :)
Exhibit 5. — Labor Policies of Major Auto and Supply Companies
AS They Affect Migration
Letter and Statement by United Axjtomobile Workers, Congress of Industrial
Organizations
International Union,
United Automobile Workers of America,
Detroit, Mich., October 23, 1941.
The Honorable John H. Tolan,
Chairman, House Committee Investigating
National Defense Migration,
Washington, D. C.
Dear INIr. Tolan : Your letter of October 17, addressed to Mr. R. J. Thomas,
president of our international union, has been referred to this department for
reply. We deeply appreciate the interest shown by your committee in the
problems confronting the membership of our international union as they relate
to the national-defense program.
Enclosed are several copies of the agreement recently reached with the General
Motors Corporation governing our labor policies as they affect the matter of
migration. It will interest you to know that this agreement has already been
adopted by all of the major automobile and automobile parts firms in the
Nation, including among them Chrysler Corporation, Ford Motor Co., Packard
Motor Co., Murray Corporation, Hudson Motor, Automotive Parts Association,
Tool & Die Manufacturers Association, and many others. O. P. M. has ap-
proved this agreement and considers it applicable to the entire automobile and
automotive-parts industry. Our union considers the signing of this agreement
as an important and significant step toward the establishment of an orderly
transfer of workers from civilian to defense work. Through the efforts of our
parent organization, Congress of Industrial Organization, and the Ofiice of Pro-
duction Management we are seeking to extend this agreement or one similar to
it to the otlier basic industries of our Nation, particularly steel, rubber, radio-
electrical, etc. This is essential in order that in each community managements
from all these various industries will be governed by a uniform agreement re-
garding full use of local skilled labor and their orderly transfer to defense
work. On page 2 of our enclosed folder, Provision No. 3 under the "Industry-
Wide Interpretation," you will note that this section provides that the local labor
supply must first be exhausted before workers from without the community are
given consideration. This should be of real importance to your committee inso-
far as this section accomplishes the very purpose wliich your committee is
seeking to accomplish — the minimizing of migration during this period.
Provision No. 4 of this same "Industry-Wide Interpretation" mal<es it manda-
tory that local industry release skilled workers who are currently engaged in
^192 WASHINGTON HEARINGS
civilian work, or who are only partially employed, to local defense employers
who need them for defense work. This provision will greatly speed up the build-
ing of defense tools (which at present is the bottleneck). This will minimize
the period between curtailment of civilian work and tlie beginning of defense
work on a production basis. Obviously any conservation of much needed skilled
labor in any community makes less possible the necessity of bringing workers in
from other communities.
The international executive board of our union recently adopted the policy of
swing shifts for the automobile industry and simultaneously proposed that the
machine tool and production facilities of the automobile industry be pooled,
regardless of consideration to corporation lines. These two proposals will not
only increase tthe present defense force by one-third, but will also minimize
the lay-off period resulting from auto curtailment. In making these proposals
the automobile workers througli their union believe that they are submitting
practical suggestions to speed the defense of our Nation and simultaneously
minimize social problems resulting from our defense effort.
Trusting that this information will be of further help to you in the important
work of your committee, I remain.
Very truly yours,
Victor G. Rexitheb,
Assistant Coordinator, U. A. W.-C. I. 0. Defense Employment Division.
Defense Unemployment — What the U. A. W.-C. I. O. Is Doing About It
Sidney Hillman, director of the Labor Division of O. P. M. on September 17, '
1941, issued the following six statements of policy which labor and management
will be expected to follow in handling labor problems arising out of the cur-
tailment of production in the automobile industry.
The statements of policy were prepared at a series of conferences in Detroit,
Mich., participated in by representatives of the leading automobile manufac-
turers, the U. A. W.-C. I. O., and the Labor Division of the O. P. M. The text
of the six statements follows :
statement no. 1
Where a man working on nondefense production is laid off and obtains defense
employment with another company, and that fact is certified to his former
company, he will not have to report back for civilian production work in order
to protect his seniority so long as he retains the defense employment to which
he was certified. If he shifts from one defense employment to another, there
must be a recertification as to his new defense employment. Employers con-
cerned with the application of this policy will work out arrangements which
will result in the maximum possible acceleration of the defense program.
statement no. 2
Transfer of employees to defense work shall be by seniority in the following
order :
First. Those fully qualified for skilled or semiskilled jobs on the basis of past
experience and training.
Second. Those who can qualify within the period normally given to new
employees.
When management and representatives of the workers are agreed that no
employees or an insufiicient number of employees with seniority are available
in the first group, new, fully qualified employees will be hired.
statement no. 3
When hiring new employees for defense work, qualified applicants working
on nondefense work with seniority in local industry will be hired before workers
coming from other localities. When so hiring, the qualified applicant with the
longest seniority record will receive preference.
The senior employees among those working in plants where employment is
decreasing who can be spared ; who elect to accept such defense employment ;
and who are found acceptable will be the first released with full protection of
their seniority rights.
NATIONAL DEFENSE MIGRATION 8193
STATEMENT NO. 4
Skilled tradesmen laid off, partially employed, or employed at occupations
other than their trade or its equivalent in defense usefulness, will be released
upon their request, with protection of their seniority rights, for full-time
defense work (40 hours per week) at their trade. The need for these workers
in defense employment will be certified to the worker's employer.
STATEMENT NO. 5
The above policies are to be construed as a pattern for industry and labor
to follow and are not retroactive. It is understood that their application is a
local community problem and must be worked out on the basis of cooperation
between plants in a community and the workers involved.
The operating machinery to effect this point will be set up at an early date.
STATEMENT NO. 6 — GENERAL PROVISIONS
1. Recall of employees : An employee loaned or laid off, whether unemployed
or currently employed on defense or nondefense work, must report back for
defense employment to the company with which he holds his original seniority,
if and when called, on notice of at least 1 week. Recall of employees to defense
work presupposes, and management will endeavor to provide, full-time employ-
ment, contingent upon the availability of the essential tools, material, and facili-
ties. Skilled tradesmen will be subject to recall only for full-time defense
employment at their trades or equivalent.
2. Defense training : For the purpose of these policies, defense training is to
be considered defense employment, provided there is an understanding between
the employer and the employee that the employee is being trained for a specific
pay-roll job.
Industry-wide Interpretation of O. P. M. Cxirtailment Labor Poucies
The following is an agreed upon interpretation of the policies enunciated by
the OflSce of Production Management, September 17, 1941, as they affect all
plants of the automobile and automotive parts industry :
provision no. 1
Where a man working on nondefense production is laid off and obtains
defense employment with another company, and that fact is certified to his
former employer, he will not have to report back for nondefense production
work in order to protect his seniority so long as he retains the defense employ-
ment to which he was certified. If he shifts from one defense employment to
another, there must be a recertification as to his new defense employment.
Employers concerned with the application of this policy will work out arrange-
ments which will result in the maximum possible acceleration of the defense
program.
provision no. 2
Transfer of employees from nondefense to defense work in each local bargain-
ing unit shall be in line with agreements regarding the transfer of employees.
Employees fully qualified for skilled and semiskilled jobs on the basis of past
experience and training shall be transferred in line with their seniority.
If no such employees or an insufBcient number of such employees who have
made application are available, management will notify the shop committee
and new, fully qualified applicants may be hired.
If no such fully qualified applicants are available or it is necessary or desir-
able to train men for the work, employees with the greatest seniority working
in the plant who have applied and who can qualify within the period normally
given to new employees shall be given the opport'unitv to qualify before new
employees are hired to be trained for the job.
PROVISION NO. 3
When hiring new employees for defense work, qualified applicants out of work
on account of authorized government curtailment of nondefense production, or
gl94 WASHINGTON HEARINGS
employees working on nondefense production in local industry where they can be
spared or loaned, and where curtailment in their industry is authorized for the
near future, will be given preference in such employment based upon length of
experience in the industry or occupation.
Such employees who are working or who have worked in local industries will
be given preference over employees from other localities who have also been laid
off because of curtailment.
Employees working in plants on nondefense work where employment is decreas-
ing who can be spared or loaned ; who elect to accept such defense employment ;
and who are found acceptable and so certified by the prospective employer will
be released with full protection of their seniority rights.
PROVISION NO. 4
Skilled tradesmen, partially employed, or employed at occupations other than
their trade or its equivalent in defense usefulness, will be released upon their
request, with protection of their seniority rights, for full-time defense work
(40 hours per week) at their trade. In instances in which a collective agree-
ment provides for a reduction of hours below the 40-hour basis, and employees
collectively elect such reduction, the schedule of hours so reduced shall be
regarded as full-time employment for the purpose of this provision. The
prospective employer must certify to the present employer that he has offered
the employee full-time defense work (40 hours i)er week) at his trade, before
the request is granted.
PBOVISION NO. 5
The above provision shall become operative October 2, IMl and shall not
be retroactive, except that those provisions dealing with the protection of the
employee's previously established seniority status shall be retroactive to Sep-
tember 17, 1941.
PROVISION NO. 6— <3ENERAL
(a) Recall of employees. — Any employee loaned or laid off, whether unem-
ployed or currently employed on defense or nondefense work, must report back
for defense employment to the company with which he holds his original
seniority for work in the same community, if and when called, on notice of
at least one calendar week. Recall of employees to defense work presupposes,
the management will endeavor to provide, full-time employment, contingent
upon the availability of the essential tools material, and facilities. Skilled
tradesmen will be subject to recall only for full-time defense employment at
their trades or the equivalent.
(b) Defense training. — For the purpose of these policies, defense training^
is to be considered defense employment, provided there is an understanding
between the employer and the employee that the employee is being trained
for a specific pay-roll job.
PROVISION NO. 7 SUPPLEMEINT ON APPEALS
(This section is reserved for a provision outlining an appropriate appeal
procedure for the handling of all grievances arising out of the above agree-
ment which cannot be settled with local management. Such procedure should
be negotiated immediately with your local management if your plant is not
included among the corporations listed below.)
The following is a suggested section which has already been agreed to by the
General Motors Corporation :
Any claim of discrimination iy an individual employee arising out of these
provisions may be reviewed hy the shop committee tcith the local plant man-
agement but shall not be subject to further appeal. The slwp committee is
given the right to appeal any ojiarge of general discrimination to the corpora-
tion through the defense employment division of the international union,
U. A. W.-C. I. 0. Such charges must be supported by written evidowe at the
time the appeal is made.
The above agreement affecting all plants of the automobile and automotive
parts industry was approved October 6, 1941, by : U. A. W.-C. I. O.— O. P. M.,
and the following corporations: General Motors Corporation, Chrysler Corpora-
NATIONAL DEFENSE MIGRATION
8195
tion. Ford Motor Co., Automotive Parts Association, Tool & Die Manufacturers
Association, Murray Corporation, Packard Motor Co., Hudson Motor, Wilcox
Rich, Barnes-Gibson-Raymond Spring Co.
If your plant is not covered by any of the above corporations, you are still
protected by the agreement, but you should arrange immediately to have your
management accept the above agreement, either by signing same or by exchange
of letters. Copies of the agreement may be secured through the office of
coordinator.
City Dei'ense Employment Committees
(a) functions
1. To cooperate with cooi'dinator's office in the orderly tr'ansfer of civilian
workers affected by auto curtailment to defense jobs.
2 To compile data regarding plants in their city which will assist the coordi-
nator's office autl the Washington committee in securing additional defense work.
3. To cooperate with local officers of State employment service to see that
hiring and transfers affected through the Employment Service are in conformity
with O. P. M. policy.
4. To help publicize and put into effect the defense employment program of the
U. A. W.-C. I. O.
(B) WHEEE COMMITTEES ARE TO BE ESTABLISHED
1. In every major city which will be affected by auto curtailment or which,
because of considerable defense work, may be able to absorb additional workers.
STRUCTURE
of
DEFENSE EMPLOYMENT DIVISION UAW-CIO
EXECUTIVE BOARD POLICY COMMITTEE
OFFICE
OF
COORDINATOR
MICH.
COM-
MITTEE
WASHINGTON
COMMITTEE
OTHER
REGIONS
STATE OR REGION
DEFENSE EMPLOYMENT COMMITTEES
DtWoit
CITY
DEFENSE EMPLOYMENT COMMITTEES
glQQ WASHINGTON HEARINGS
(C) SIZE OF COMMITTEE AND MANNEE OF SELECTION
1. It is suggested that each city committee consist of not less than three or
four members.
2. The regional director may appoint members to these committees or may
permit the local unions participating to select the members.
3. Each committee shall elect its own chairman.
(D) FINANCING OF CITY COMMITTEE ACTIVITIES
1. It is suggested that the chairman or some member of each city committee
devote full time to these activities.
2. The regional director should endeavor to have the locals being serviced by
these committees, shai'e in the expenses entailed by the committees.
Region or State Employment Committees
(a) The chairman of each city committee within a given fegion or State
shall constitute the region committee.
(&) The function of the region committee will be to assist the coordinator's
office in the rapid dissemination of data and policy information to all city
committees within each region.
U. A. W.-G. I. O. Defense Employment Division, 281 West Grand Boulevard,
Detroit ; Geo. F. Addes, coordinator ; Victor G. Reuther, assistant coordinator
Certification of Hire for Defense Work
When an employer hires a worker for defense work who was formerly em-
ployed by another firm with which he acquired seniority, that fact shall be
promptly certified to that employer with which original seniority was acquired.
Certifications shall be made on form SES 326 (sample below) provided for this
purpose and shall be prepared in quadruplicate. The distribution of this form
shall be as below :
1. One copy to the worker involved (who will turn it over to his local union
or retain for his own record).
2. A copy for the certifying employer's file.
3. A copy to the former employer where seniority was acquired.
4. A copy to the local office of the State employment service.
Note. — The responsiliility for requesting certification rests icith the individual
member affected.
{Sample)
SES 326
Re:
Certification of Hire for Defense Work
Code classification
Seniority date
To This is to certify that as of
(Name of company or corporation) (Date)
we have employed on defense work
(Name of person)
formerly employed
as a by your firm as a
(Name of skill or classification)
By :
(Name of company) Title of person in cliarge of personnel
or employment
notice to the worker who accepts a defense job
To protect your Seniority rights, it is necessary and to your
advantage to see to it that this card is made out by your defense
employer and a copy sent to the employer with which original
seniority was acquired. You should also see to it that your new
employer furnishes you with a copy which you should turn over
to your union or keep for your own record.
NATIONAL DEFENSE MIGRATION 8197
Exhibit 6. — The Buffalo Plan
interoffice memoranda of new york state employment office to labor division,
office of production management, from august ig to november 10, 1941 ^
August 16, 1941.
This report briefly narrates tlie first week's activity relative to General Motors
Co.'s displaced workers in this area.
The report is snhmitted in two sections. In part I, we outline what has been
done towards the registration for employment, and the referral to national-
defense training courses. In part II, Buffalo employer reaction to the hiring
of this group is briefly discussed.
Pabt I
Following the meeting in the Lafayette Hotel on Thursday, August 7, we sent
employees from this office to the three Buffalo companies affected by the Pratt &
Whitney change-over, and listed all laid-off emplo.yees on individual 4x6 cards.
These cards will be retained as a master control file and all activity such as
training, referrals, placement, etc., in connection with any of these persons will
be noted thereon.
On Saturday afternoon the staff of this office addressed envelopes to each of
these workers and in.serted a mimeographed letter which had been prepared by
the union (a copy of this form is inclosed). Together with the mimeographed
letter, we enclosed our Form 334 (copy enclosed).
General Motors employees were scheduled to report at the approximate rate
of 700 per evening beginning with August 11. At that rate all of them will have
been scheduled to report between the hours of 6 and 9 p. m. some evening this
week. The response to the call-in to date has been rather disappointing. The
first night approximately 200 reported. Each night since Monday evening less
than 200 have responded. On Wednesday we selected approximately 200 who had
failed to report on Monday and Tuesday evenings and directed telegrams to
them (copy attached). The response to the telegrams also was unsatisfactory,
bringing in but 70 workers.
Several reasons have been called to our attention for failure to respond to
call-in, among them the following :
1. These workers are accustomed to a 5- to 6-week lay-off in the summer and
this year, as in other years, are vacationing at this time.
2. Unquestionsibly, many of these people have found employment.
3. Many of these workers have returned to their homes in other sections of
the country and are not now available for local employment.
4. Many of these workers, realizing that their opportunity for reemployment
with General Motors will be greatly enhanced if they have acquired training
along machine-shop lines, are attending full-time school (all day or all night)
and therefore are not interested in immediate employment.
On Monday next, we will canvass all those who failed to respond to call-in,
by means of a mimeographed letter in which we request that the applicant
either report immediately or if unavailable, fill in a questionnaire and return
it In a self-addressed envelope enclosed witli the letter. We will be in a
much better position to determine the number still available for local employ-
ment after we have completed this survey. We should have the results by
August 22 and will immediately thereafter again report to you.
As claimants appear in our office during evening hours of this week, we
immediately register those who are not registered and if possible, refer them
to employment. Likewise, those who have previously registered are referred
if there are available openings for which they qualify.
Immediately following the interview, those who cannot be referred to em-
ployment, as well as others who are interested, are escorted to representatives
of the Board of Education (16 in number), located in a section of our office.
There these workers are advised regarding the courses of instruction offered
in the Buffalo national-defense schools and the referral to the school is made
at this point. Almost all former General Motors workers are signing up for
1 Submitted at reouest of the committee by Labor Division, Office of Production Manaee-
ment, Washington, D. C. See testimony of Douglas Brown, p. 8139.
gl98 WASHINGTON HEARINGS
national-defense training of some sort, with machine-sho'p practice and aviation
subjects predominating. As a matter of fact, tlie capacity of tlie local defense
classes is becoming somewhat taxed.
Part II
The Bell Aircraft Corporation has been quite cooi^erative in accepting laid-
of£ General Motors employees. This office has access to all orders for workers
which the employment manager of that company has, and they are pleased to
have us refer qualified General Motors workers to these openings. This com-
pany has also employed many of these workers at its employment office. The
number employed will be supplied in the next report.
I contacted Mr. Matoon, personnel director of the Curtiss Co., on August 11
and he advised that it was extremely difficult for him to commit himself at
this time. He states that because his company went on a 6-day week on
August 4, they now have a surplus of man power. He is of the opinion that
they can absorb no additional workers within the next 3 weeks.
Mr. Matoon suggested, however, that I bring the registered cards of General
Motors employees to his plant on Monday, August IS and discuss these appli-
cations with his employment managers, Mr. Lucas and Mr. Bolton. After my
meeting with these men, I am to see Mr. Matoon. A report of this meeting
will be mailed promptly.
On August 11, Mr. Gray, personnel manager of Buffalo Arms Corporation
and Houde Engineering Co. was also called. Frankly, he did not seem too
cooperative. He pointed out that the Buffalo Arms plant had already employed
28 of these workers and the Houde plant had hired 32. When I advised him
that we desired a requisition for workers so that we might refer qualified
persons to him, during the mass-interview program being carried on each
evening of this week, he suggested that I call him again on Wednesday, August
13. Mr. Gray stopped in at our office on August 12 and advised that he would
call me the following morning. He failed to do so and upon calling his com-
pany, I was advised that Mr. Gray was out of town and had left no instruc-
tions with the employment manager of the Buffalo Arms Co. relative to the
hiring of General Motors employees.
I asked the employment manager to have Mr. Gray call me on Thursday
morning, but he did not do so. It is obvious that an effort is being made to
evade the issue.
Because of Mr. Schanheuser's absence, I discussed the placement of General
Motors workers with Mr. Yarrington, employment manager of the Wortbington
Pump Co. Mr. Yarrington assures me that his company is extremely anxious
to cooperate.
I am to meet with Mr. Yarrington on Tuesday, August 18, at his office. I
will have with me at that time the registration cards of these workers. The
results of this meeting will also be reported to you.
Union officials seem to be quite well pleased with the arrangements for
handling their workers. Representatives of the two locals (424 and 774) have
been in attendance each evening and have offered full cooperation and
assistance.
We will be able to give you definite figures regarding the number who re-
ported, the number placed, etc., in our next week's report. You may rest as-
sured that this service will make every effort to place these workers. I do
not believe the cooperation of the Buffalo Arms Go. will be forthcoming until
some pressure is exerted. We would be sincerely appreciative of assistance
in handling this company. We believe a phone call from the Office of Produc-
tion Management reminding Mr. Gray that his company is expected to cooperate
would serve the purpose.
August 22. 1941.
The General Motors displaced workers who did not appear during the first
week's evening registration hours have been sent the additional call in letter,
with questionnaire attached (sample enclosed).
The personal response was again considerably below expectations, only about
10 percent appearing. An analysis of the completed questionnaires returned
indicates that approximately 40 percent of this group are now employed, an
additional 40 percent have failed to acknowledge this canvas either in person
or by return of the questionnaire, the other 20 percent are still imemployed.
It would seem that the following conclusions can now be drawn : It is, we think,
NATIONAL DEFENSE MIGRATION gl99
safe to assume that 80 percent of all those who did not appear during the
original mass registration are employed or are not interested in employment,
the other 20 percent are unemployed. When we have completed the processing
of questionnaires we believe that we will have an active file of approximately
8G0 unemployed displaced General Motors workers.
The writer toiumues lo comact tne enipioymeut representatives of the four
companies committed to cooperating in the employment of these workers.
On Monday, August 18, the employment manager of the Worthington Pump
Corporation examined the cards in my presence and selected 8 General Motoi's
displaced workers as prospective employees with this company. These persons
have been referred, the results are not yet obtainable. He points out that his
company is in a position to do but little hiring and that prior to our visit he had
employed 17 of these men out of a total of 40 workers added to his company's
pay roll. He assures us that he will attempt to use General Motors workers in
all future openings. We believe that the placement of a large number with this
company is impossible, in the near future.
On Tuesday evening, August 19, the writer met with Messrs. Boulton and Lucas,
employment managers of the 2 local Curtiss plants. After an examination of
the cards in fine, we received an order from the Curtiss Co. for 15 workers. This
order has been filled. At the same time an order was given for 10 machine
operators. The results of these referrals are not yet available. The following
day an order was received from the Curtiss Cheektowaga plant for 15 sheet
metal workers with tools. We believe that it will be possible to fill 10 of these
openings from among the General Motors workers.
Both employment managers express themselves as anxious to cooperate in
the placement of these men. They both point out, however, that the orders
from their production department for men have slowed down considerably and
the addition of a large number at this time is not possible. Neither Curtiss
plant is adding workers in numbers. Since the Buffalo meeting on August 0
between the Office of Production Management and employers, the Curtiss Co.
advises that they have added 119 of these workers to their pay roll.
We have had no orders for workers from the Buffalo Arms Corijoration which
might permit the referral of General Motors employees. Mr. Harmon visited
tlie employment manager of this company at my suggestion, on Tuesday, August
19, for the purpose of attempting to encourage wholehearted cooperation on
the part of this company. This visit has as yet netted no tangible results.
The employment manager of this company reports today that since the August 6
meeting they have added 10 former General IMotors workers to their pay roll
and they are considering several others for employment. We will continue to
put forth the necessary effort in the case of this company.
The Bell Aircraft Corporation continues to cooperate. The employment
manager of that company has expressed a desire to have us I'efer General
Motors employees to all openings in which we believe they might possibly fit.
He is handicapped, as are the Curtiss employment managers, by lack of orders
from his production departments for men. This company has added 123 former
General Motors employees to its pay roll since the Aitgust 6 meeting. We have
arranged to meet with Mr. Gunderson, employment manager, over the week end
at which time he will study the record of each General IMotors employee regis-
tered with us and will indicate those he is willing to consider for future
openings.
All employers point out that these workers will be much more readily adaptable
to their work when they have completed the training courses in which sevei'al
hundreds are now engaged. It is true that many of these workers have no
experience which qualifies them for other than General Motors assembly em-
ployment. Further, the type of assembly work in which they were engaged
in the General Motors plants was of such a nature that it did not qualify
these men for aviation assembly, for example. Many of these men had been
engaged, for instance, solely in the attachment of one automotive part, such
as muffler, headlights, fenders, etc. Certain Buffalo companies still refuse to
consider these workers for their openings. We are, however, gradually break-
ing down this resistance. The reason most frequently given by employers for
their attitude is their firm belief that upon the reopening of the General" Motor.s
plant these workers will return.
We w5ll contiiuie to put forth effort toward the placing of these workers
and will forward our next report to you on Saturday, August 30. We should
be in a better position at that time to furnish exact figures. Union repre-
60396— 41— pt. 20 13
g200 WASHINGTON HEARINGS
sentatives continue to visit our office daily and seem well pleased with the
progress made.
August 29, 1941.
Former General Motors employees have not been absorbed in any great num-
ber during the past week, either by the four employers committed to cooperate
or by other local industrial organizations. There has been a very apparent
slackening in the employment acceleration recently which w^ould naturally
be reflected in the problem of placing the General Motors group. More spe-
cifically, the "four companies" are not hiring these men in anticipated numbers.
Several reasons may logically be advanced — apart from the fact that none
of "the four" is in the market for men in large numbers. Obviously, after the
first one-third or one-half of the displaced workers are picked up there remains
a balance which is not as readily absorbed because of lack of skill or perhaps
because there is not represented in this remaining group the same high caliber
of men. In other words, a sorting ]r.-ocess has taken place — skilled and semi-
skilled are employed and the unskilled remain unemployed. Further, the em-
ployment representatives of none of "the four" appear to be in a position to
use this unskilled group even in the openings which exist from day to day in
their establishments.
No great difficulty is being experienced in selling the applicant who can, for
example, operate a lathe or milling or similar machine, even though he cannot
read prints or set up his own work. On the other hand, the placement of an
ex-General Motors assembler presents a real problem and will continue to do
so until one or more of the local employers hire men in quantity. There is
predominately represented in the remaining unplaced group a good, better than
average, unskilled factory type. They have everything to offer an employer
who is willing to spend some little time breaking them in on any ordinary
operation. However, when the employer states that he will hire nothing but
men already skilled in one of his operations, the remaining group has little
to offer. If either local aviation company were hiring at this time, there would
be no problem.
Today the writer asked both aviation companies what might be looked for in
the immediate future. Neither reply was encouraging. At the Bell plant the
second shift on wing assembly is still discontinued and the work manager
advises that very few additional workers will be added in the next month.
Curtiss employment officials paint a similar picture, explaining that moving to
the new plant has disrupted production and, until efficient production can be
reestablished, they will add no additional help. There seems to be no hope
at present that Curtiss will hire numbers of men during September. On the
other hand, both Bell and Curtiss are using former General Motors workers in
every opening possible. We are with some success, referring these workers daily.
The Worthington Pump Co. was able to use only two of the men we referred,
after their preliminary selection from our records. They state, however, that
there is a definite possibility that they can and will accept quite a number (prob-
ably 50) in about 1 month, to replace men who will complete on the job training
at that time.
There seems to be no question as to the desire and willingness of the em-
ployment representatives of Curtiss, Bell, and Worthington to cooperate— they
simply have not received orders for workers from the plants.
On Wednesday we received our first order, from the Buffalo Arms Corporation,
on which it was possible to refer General Motors workers. The order called for 15
experienced milling machine operators. Ability to set up or read micrometers
was not necessary. Several of the first group referred were rejected for various
logical reasons and we immediately replaced those rejected with new referrals.
We have as of today referred all those whom we feel qualified, or a total of
24. Upon checking with Mr. Rindge, personnel manager of the Buffalo Arms
Corporation, this morning I was advised that 1 man had been placed in em-
ployment, 9 had been accepted and were being held for job openings as they
arise in the very near future. Several others had apparently not yet filed formal
application in spite of our referral and 4 others had passed the entrance tests
but the result of the physical examination was not yet known.
Fraiddy, the results attained were more favorable than we had anticipated.
We confiilently expected that most of these men would be rejected. We will
give you final' results as to the number of placements in our next report.
On Thursday Mr. Rindge addressed a letter to me stating he had need for
44 workers of various highly skilled types such as turret lathe hands, internal
NATIONAL DEFENSE MIGRATION 8201
grinder hands, planer hands, etc. For all these openings, he demanded fully
qualified hands, able to set up from prints, etc. I immediately advised Mr.
Rindge bv phone and by confirming letter that while we would be glad to work
on tlte order, we would, I believed, be unable to refer either General Motors
workers or others against these openings. There are no unemployed workers of
this type available locally or elsewhere. „ . ■, ^^ • ^- + ^-v^o*
■ Additional returns resulting from our most recent call-m letters indicate that
there are now 1,087 unemployed of which 935 are registered with us. There
are IOCS employed. A total of 1,< 33 have failed to respond to any and all
our call-in efforts and we feel justified in stating that this group is also largely
employed or not now available. , ,, , , 4. i„„„i
We have to date referred 1,082 former General Motors employees to local
training schools but only 674 appeared for assignment^ to classes, school officials
^^As of Thursday, when only 1,028 General Motors workers had been reported
placed in employment, the break-down of employees of that number was as
follows :
Bell ^00
Curtiss -^^^
Buffalo Arms ;^
Worthington J-^
Other companies '^^^
Total 1'^^
Let us have your suggestions and criticisms. We believe that everything
possible is being done at the local level. Any assistance you may be able to give
will be most welcome.
Septemeeb 5, 1941.
Inventorving the results of the first month's effort to place displaced General
Motors workers, leads us to the unchallengeable decision that the only organiza-
tion in our city exerting real effort to attain the goal is the New York State
Emplovnient Service.
It is still true that certain of the companies are cooperating and are hiring
some General Motors workers. We question, however, whether in any instance
a man has been hired because he is a General Motors man. We do not believe
that the bai-s have been lowered even slightly to permit one of these workers to
qualify for any opening any of the four companies might have.
There have been so far but few tangible favorable results from the viewpoint
of the General Motors workers. First and most important was obtaining the
agreement of the four companies to discontinue hiring practices prejudicial to
General Motors workers. Secondly, there was the mass registration and the
attendant referral to defense vocational schools. Thirdly, we have religiously
hounded the four companies and others for openings into which the men might
be fitted and we have given every possible preference ,to General Motors workers
in resultant refi^rral. All of this has, of course, reacted favorably. The men
appreciate our efforts and believe that we have given them preferential handling
throughout. They know that we cannot manufacture openings but they uni-
formly agree that without exception, those who have landed jobs have done so
because they were fully qualified.
Something more must be done— these men are not being employed rapidly
enough.
At least three of the four employers could absorb more of these men, if
pressure could be brought to bear on them. An analysis of the hiring done
bv these companies would, we know, reveal the fact that only a small per-
centage of all employees added are General Motors workers. We do not
claim that these men can measure up to the employers' requirements for all
of the job openings they have, but we can, from our knowledge of the com-
panies' employment needs, state that if they .were inclined to lean backward
only a little, many more General Motors workers would have been absorbed,
and additional numbers would go to work in the near future.
In further reference to the Buffalo Arms order for 15 milling-machine opera-
tors, which order was received and against which 24 men were referred last
week, we can now report that only 3 General Motors men were hired. This is,
of course, not satisfactory. We have had no report of additional openings
§202 WASHINGTON HEARINGS
from this concern to which we might refer former General Motors employees.
Likewise, we have had no orders from the Bell Aircraft Corporation, al-
though that company reports that additional General Motors workers have
been hired during the week at their gate. JMr. Gunderson, employment man-
ager of the Bell Aircraft Corporation, examined the General Motors registra-
tion files on Wednesday and assures us that when he obtains an order from his
shop which will permit the employment of the type in that file, he will call u-s.
The Worthington Pump Co. has no need for more employees now and antici-
pates none for about 1 month. As previously stated, we believe that company
can help but very little because of the nature of its employment needs.
The Curtiss Co., during one of my routine calls at about B p. m. on Wednesday
of this weelc, advised that they had 70 openings for men who had 5 to 10
years' mechanical experience of almost any kind, such as machine operation,
automotive experience. Of the use of hand tools. We promptly advised tliem
that the order could be filled with General Motors men and immediately r-ent
90 former General Rlotors workers police call messages. When we advised the
Curtiss Co. at 11 on the following day that 45 men were already enroute to their
plant, we were told to send no more since much of the order had been filled
through selection from among the unemployed who had visited the company's
employment office, and from applications on file.
Obviously, some benefit accrued to General Motors men through our efforts
in this case; but we insist that if this company had desired, the entire seventy
jobs might weU have been filled by General Motors men. This is only one of the
many examples which lead us to the conclusion that something more must be
done' and we must have some additional help. The companies must be reminded
by someone besides the writer, that they are expected to live un to their com-
mitments. An examination of job openings filled by other than General Motors
workers in any of the plants would be interesting and would quickly and con-
vincingly substantiate our opinions.
It must be remembered that the writer as manager of the New York State
Employment Service industrial ollice, is in a difficult position in this assignment.
It is not, we believe, advisable for us to antagonize any of the companies— hence,
we can only continue to use every means at our command, short of- threats, to
encourage employers to consider dislocated General Motors workers for every
possible opening.
September 12, 1941.
There have been no new developments during the past week in the General
Motors displaced-worker situation. Our records indicate that 1,213 employees
are now reemployed. Eleven himdred and ninety-nine are not yet working and
the status of 821 displaced workers is unknown.
We do not believe that there is any discrimination at this time against these
workers. On the other hand, there has been no apparent Inclination on the
part of any employer to give them preference in employment of any kind. We
are continuing to refer these men to every employment op3ning in which there
is a possibility of placement. As pointed out previously, the majority of the
men who remain in our files as unemployed do not have skills, hence, their
placement presents quite a problem. Further, by and large, these men are not
willing to accept the average beginning factory employment position which
further complicates their placement.
During the past week we referred all of the remaining unemployed whose
records show mechanical background of several years, to the Curtiss Aircraft
Corporation, where they were considered for employment in the panel depart-
ment. The results of these referrals are not yet available. We believe, how-
ever, that the placement of perhaps 50 former General Motors workers will
result.
Within the next week or 10 days most of the workers who signed up for
national-defense training classes will have completed their 5 or 6 weeks of
training. Unless local companies can be encouraged to employ these men in
preference to any others, it will be impossible to promptly place all those who
complete their training.
We have had no further orders from either the Bell Aircraft Corporation,
Buffalo Arms Corporation, or Worthington Pump Co. covering positions to which
these workers were referrable, with the exception that Bell has utilized about
15 of these men within the p'ast week.
A i-epresentative of the General Motors Congress of Industrial Organizations
local is in constant attendance in our office and we believe that the local is con-
vinced that every possible effort is being put forth by this office in the placement
NATIONAL DEFENSE MIGRATION 8203
of their workers. They are, however, quite concerned over what they term the
"failure of the four companies to employ General Motors workers as promised."
Tliey concur in our opinion that employers are not discriminating against their
members, however.
The prospect for the future does not appear too bright. Our orders from the
aviation companies are invariably for men who have had a background of auto-
motive repair or other mechanical experience. We have, we believe, practically
exhausted the supply of this type of worker in the group. We do not believe
that it will be possible for local industry to absorb the machine-shox) graduates
which should be available within the next 2 weeks. Considering the small num-
ber of aviation trainees who have been absorbed by aviation companies recently,
we are of the opinion that General Motors woikers who have entered aviation
training classes can also not hope to be emiployed immediately upon graduation.
Any constructive criticism or suggestions will be heartily appreciated.
September 19, 1941.
There are now, according to our records, still 1,188 unemployed General
Motors workers. Twelve hundred and seventy-five are employed and the
status of 881 is unknown. There has been no increased acceleration in the
rate of absorption of these workers. Unless special arrangements can be
made with local employers (particularly Curtiss, Buffalo Arms, and Bell) to
give the unplaced workers preferential consideration, we can foresee no great
increase in the rate at which these people will return to work.
This situation is, we believe, coming into a very critical stage. The local
defense schools will, within the next few days, release for placement several
hundred General Motors men who will have had 5 to 6 weeks of defense
training. Tliese men confidently anticipate prompt placement — and there will
by no means be a sufficient number of openings to which to refer them unless
local employers grant preferential hiring. On the other hand, if these men
are given first consideration for all openings, pai-ticularly by the "cooperating
four," the problem will be solved.
We have to date received information from the national-defense school
authorities that approximately 35 former General Motors men have completed
their training. None of the four companies when advised by the writer of
the availability of these graduates were, they advised, in a position to use
these men. All of them agreed that the additional training would undoubtedly
be an invaluable asset to the men in rounding out their experience and each
of them promised to consider these men for all possible future openings.
In an effort to promptly place these men we immediately contacted every
local employer of any size who might be in a position to absorb some of them
regardless of the nvimber. This drive has met with some success. We have
placed six machine-shop graduates with one employer and are working on
several orders for lesser numbers. While the problem of placing 35 trainees
can well be handled, we cannot help but be perturbed over the problem which
faces us when suddenly in the next few days several hundred defense gradu-
ates are handed us for placement. We do not believe, in any event, that
all of the machine-shop ti'ainees, for example, will be placed as machine
operators even though the fullest cooperation were had from the ff)ur em-
ployers. However, we feel that the majority of them, with the full cooperation
of the companies, will be placed in jobs of higher classification than would
be possible if they had not had the defense training.
In substantiation of this viewpoint, the Curtiss Co. has stated that they
believe these graduates would undoubtedly fit into their panel department
wherein the previous specifications called for several years of such work as
"auto mechanical, machine shop or work entailing the use of small tools." If
the Curtiss Co. can now be convinced that preference must be given to the
graduates in all openings of this kind, it will result in the placement of at least
200 of these workers in the very near futin-e. We believe that a close check
of the openings filled by the cooperating employers would conclusively indicate
that many of the openings could reasonably be filled by these men.
We understand that Mr. Eric Nicol, Executive Assistant to Mr. Hillman, and
Mr. S. Park Harmon, of the Social Security Board, will be in this office on
Monday morning and will endeavor to assist us in selling employers on the
proposition of full cooperation. If their visit has the anticipated results, the
placement of several hundred General Motors workers should follow promptly.
»
September 26, 1941.
For the benefit of those to whom this report is directed who may not be ad-
vised, Mr. Erie Nicol spent Monday of this week in Buffalo and visited the Cur-
3204 WASHINGTON HEARINGS
tiss-Wright Corporation, the Bell Aircraft Corporation, and the Buffalo Arms
Corporation. No visit was made to the Worthingtou Pump Co. since that com-
pany is not going to be in a position to hire General Motors workers or others
in any number, and is fully cooperative.
The Curtiss Co. advised that it will employ 200 General Motors workers be-
tween the date of Mr. Nicol's visit and November 1. The Buffalo Arms Cor-
poration promised to take 83 of these men during the same period. The Bell
Aircraft Corporation promised full cooperation but due to the fact that they
are now almost fully manned, could make no definite commitment as to the
number they would be able to employ. We have had no call from any of the
cooperating companies during this week.
Our records as of this date show that 1,177 are still unemployed. As pre-
viously pointed out, however, we believe, from the fact that call-in of these
workers brings us only about two-thirds of the number called, many of those
who are in our active file are already employed. We are, therefore sending
questionnaires to all those in our active file and before next week's report is
transmitted, we should have a completely accurate record of the employment
status of General Motors workers and our active file should decrease by per-
haps 2.5 percent.
We are continuing the referral of graduate trainees to other than "the four"
with some success. If General Motors workers were willing to accept beginning
factory employment, their placement in local industry would present no problem.
Generally speaking, these men are not willing to accept this type of work. We
have discussed this matter with union representatives who are in constant
attendance in our office, and while they feel that their co-members should accept
employment offered, while at the same time continuing national-defense training,
the efforts of these union representatives to recruit workers for the unskilled
jobs have been fruitless.
The school department has not yet turned over to this office records covering
lai-ge numbers of graduates. We have requested the school department to send
us an up-to-the-minute report of the status of General Motors trainees and
next week's report will advise you of the exact number accepting training in
each course of study.
0CT0BB31 3, 1&41.
Only one of the four local employers committed to cooperate in the return
to employment of displaced General Motors workers, has placed an order with
us for these men since Mr. Nicol's visit of September 2-1 — the Bell Aircraft
Corporation. Because of an unanticipated pick-up in their machine shop we
have been able to refer to this company all General Motors employees who
have had sufficient machine shop praciice instruction in defense schools.
This order will result in the referral of approximately 70 General Motors
men. The Bell Aircraft Corporation is accepting for employment trainees who
have had 200 hours of instruction or those who have the approval for place-
ment of their instructors, even though the hours of training are considerably
less. Not all of these unemployed men are willing to accept the conditions of
employment offered by Bell. To date 17 refused the employment on the basis
of insufficient salary. A few others have refused because the employment
offered in their case was night work. The starting rate is 50 cents per hour
increased to 65 cents per hour at the end of the first month and to 70 cents per
hour at Ihe end of the fourth month. Forty-eight hours of employment are had
each week in the departments to which these men are assigned.
We are particulai'ly pleased as are the local Congress of Industrial Organiza-
tions officials that we are in a position to offer employment to the entire group
of machine-shop trainees. It is an added indication of the willingness of the
Bell Co. to cooperate in the problem.
The Curtiss Co. reports that approximately 10 General Slotors workers have
been hired since September 24. The employment office advises us, however,
that they expect an order for 200 workers from the plant during the coming
week and they hope to fill many of these openings from the General INIotors
group.
The Buffalo Arms Corporation reports that no General Motors workers have
been added to their pay roll since Mr. Nicol's visit.
We sent questionnaires to all displaced General ISIotors workers in oiir
active file late last week advising that unless the questionnaire were returned,
we would assume the workers interested were employed or unavailable for em-
ployment. On this basis we have cleared the active file to the point where we
now have but 527 active General Motors cases. One hundred and sixty-two
NATIONAL DEFENSE MIGRATION 8205
persons reported that they were working. Three hundred and fifty-one ques-
tionnaires have not been returned. We believe that the number of unemployed
General IMotors workers can now be estimated at approximately 600, since
questionnaires are continuing to dribble in. Included in this group of 527 are
approximately 50 already referred to the Bell Aircraft Corporation and an
additional 25 who will be referred on the present order.
We now have an up-to-date report of the status of General Motors trainees.
The school department reports that there are now in attendance 214 totally
unemployed former General Motors workers. This figure does not include
those accepting supplementary training while employed. The training received
by the people includes other than machine-shop practice — aviation engine, weld-
ing, airplane fabrication, riveting, assembly, etc.
During the week William L. Genske, of Detroit, an United Automotive
Workers official and a member of the National Defense Employment Commit-
tee, visited Buffalo and held a meeting with Buffalo area officers of the Con-
gress of Industrial Organizations-United Autotmotive Workers. The purpose
of the meeting as stated by Mr. Genske, was to "lay the ground work for the
application of a plan evolved jointly by representatives of Office of Production
Management and labor," in Buffalo. Also, the meeting resulted in the selec-
tion of a committee comprised of local union members. We question whether
much will be done locally to effectuate the Michigan plan in this city. At no
time during the meeting was dissatisfaction expressed with the handling of the
local situation on -the part of the State employment service. However, con-
siderable displeasure is shown by union officials toward the Curtiss Co. and the
Buffalo Arms Corporation. In their opinion, these companies are not cooperat-
ing. The writer does not entirely agree so far as the Curtiss Co. is concerned.
October 10, 1941.
There has been very little activity in the General Motors displaced worker
picture during the past week. Our records now indicate that a total of 3,343
have been laid off. There remains in our active file 598 workers totally unem-
ployed and registered for work.
During the past week the Curtiss Co. added 14 for a total of 24 since Mr.
Nicol's last meeting with the officials of that company on September 24.
The Buffalo Arms Corporation reports that 5 of these men have been hired —
these are the first to go to work for that company since Mr. Nicol's visit.
We have completed the referral of all General Motors machine-shop trainees,
recommended as ready for placement by the school authorities. Sixty-eight
men were referred to the Bell Aircraft Corporation and to date we have had
verification of 33 placements. A few placements are pending and the balance
represents, for the most part, those who have refused the employment on the
basis of the 50-cent-per-hour rate.
The Buffalo Arms Corporation called early this week to advise that they
intended raising the beginning wage of General Motors men from the previous
45-cent-per-hour rate to 62% cents per hour. We have sviggested to them that
we be permitted to refer the workers who refused the Bell employment at 50
cents per hour. We have not yet had permission to make this referral. The
five accepted by the Buffalo Arms were also selected by that comiiany from
applications on file in their employment office. Apparently, they make quite a
thorough investigation of each individual before considering him and therefore
hesitate to permit us to refer these workers to them.
If the commitments made by the Curtiss and Buffalo Arms Cos. during Mr.
Nicol's last visit are to be lived up to, exceptional General Motors hiring
activity will have to be shown by these companies in the almost immediate
future. We seriously question that the commitments will be carried out.
We still are of the opinion that a study of the employment records of at
least two of the four would reveal the fact that if the full cooperation of these
companies were given, the problem of placement of displaced General Motors
employees would evaporate.
October 17, 1941.
So far as we can definitely determine not a great number of ex-General Motors
workers have found employment during the period covered by this report.
We have, however, been able to refer national defen.se machine-shop course
graduates to the Buffalo Arms Corporation for the first time. The order for these
workers was an aftermath of a call made to Mr. Nicol by Mr. Peo of the Buffalo
Arms Corporation in which Mr. Peo stated that there were, he understood, "only
3206 WASHINGTON HEARINGS
40 displaced General Motors workers remaining unemployed in Buffalo out of
vrliich they bad been able to bire but 4."
Mr. Nicol promptly called Buffalo to check ou the statement and we called
Mr. Gray, personnel manager of Buffalo Arms, to remind bim tbat there were
some tOJ ex-General Motors workers still to be placed and tbat we still were
awaiting permission to refer those who had completed the machine-shop prac-
tice course. (Reference to Buffalo Arms' unwillingness to permit us to refer
these workers was made in last week's report.) Mr. Gray stated tbat ap-
parently Mr. Peo had misunderstood the figures and then agreed that we
might refer all available machine-shop pi'actice graduates which we have done.
As of today we have referred a total of 20. A few more will undoubtedly be
sent in from the vocational schools and will be referred promptly. The Buffalo
Arms Co. is not yet in a position to advise the results of the referral which
began only yesterday morning.
The Cartiss Co. reports that "approximately 16" displaced General Motors
workers were added to their pay roll during the period, making a total of 40
added since Mr. Nicol's visit to Buffalo.
The Bell Aircraft Corporation is now adding few workers and therefore,
only a scattered few General Motors people. We repeat our last week's state-
ment that the commitments made by the companies upon the occasion of
Mr. Nicol's last visit to Buffalo cannot possibly, it seems, be lived up to.
Since there still remain 590 unemployed General Motors workers still to
be placed and since the "cream" has already been placed, the problem of
placing the balance is an extremely difficult one. This is particularly true
since the remaining unskilled persons are not willing to. accept average factory
employment. We believe these workers should in some manner be encouraged
to accept beginning factory employment available in this city. Their experience
qualifies them for no other employment at this time. Several representatives
of the union feel as we do. It seems, however, that the impression is prevalent
among the workers that they will receive employment on a parity in wages
with that which they enjoyed at the General Motors plants.
As previously stated on several occasions, merely because of tlie attitude
of these workers, their referral to average factory beginning employment has
been anything but satisfactory. We believe this matter is worthy of the
attention of all interested parties since otherwise the placement of the balance
of these people is practically impossible, at least until the General Motors
plants reopen in Buffalo.
OCTOBEE 24, 1941.
There has been no activity to speak of in the placement of displaced General
Motors workers during the past week. We can foresee no activity of importance
in the inuuediate future. Our active file of unemployed now totals 566.
The Buffalo Arms Corporation reports that 21 of these men have been hired
by them since October 16. This is the largest number taken by the company in
any comparable period. However, we do not expect that they will be able to
continue employing at this rate, particularly because the people still remaining
unemployed are not the type in which Buffalo Arms is interested. They have
interviewed every unemployed General Motors worker who has completed a de-
fense training course in machine-shop practice and have apparently no desire to
interview those who have not had this training.
The Curtiss Co. in their telephonic report of this morning advises that they
have added a total of 30 since Mr. Nicol's last visit. This number, by the way, is
one less than that reported last week. The employment manager points out that
their hiring has been restricted to the employment of skilled mechanics and the
like.
It does not appear that we can expect much fi-om the Bell Aircraft Corporation.
The employment manager of that company advises that they face a lay-off of
300 workers due to the shortage of motors and propellers.
Employment activity in this city as a whole is down considerably from pre-
vious weeks. This is, we believe, to be expected in view of the lay-offs encoun-
tered in several of our larger industrial organizations. These lay-o'ft's will, of
course, have an unfavorable effect on the future placement of the displaced
General IMotors workers since those remaining to be placed have no particular
skills to offer and the caliber of workers laid off by other companies now releas-
ing workers, is at least as high as that possessed by General Motors unemployed.
October 31, 1941.
There has been little opportunity to refer General Motors displaced workers
during the past week. There are several reasons for this : First, none of the
NATIONAL DEFENSE MIGRATION 8207
cooperating employers are hiring in any quantity and, secondly, as previously
pointed out, the General Motors workers still in our active file do not have
the skill or training required by local employers who may be in the market
tor men, and, finally, there have been quite extensive lay-offs locally.
The active file of displaced General Motors workers is 588 as of today.
Although the remaining workers represent those workers with the least skill,
this office has made a total of 354 referrals covering the group. This is an
indication that an effort has been made to place these people. It must also
be remembered that very few of the General Motors displaced workers have
been willing to accept referral to beginning factory employment. If this were
not true, the total number of referrals would be considerably higher. Also,
had these people been willing to accept beginning factory employment, we
would not today have anywhere near the present number of unemployed to
contend with.
Mr. Addis believes that these workers should accept the beginning factory
jobs offered by this office. Mr. Sayen, Buffalo C. I. O. representative who is
in close touch with the local situation, concurs. We have pointed out to
Mr. Sayen that even though these people now decide that they are willing to
accept this type of work, their placement will prove quite difficult in view of
the slackened hiring.
In view of the above referred to lay-offs affecting upward of 1,500 workers,
which lay-offs have been occasioned by the shortage of materials, we question
whether it is advisable to continue to handle the displaced Chevrolet workers
as a preferential group. We wonder whether it might tend to place all con-
cerned in an embarrassing position.
The Buffalo plan, which originated to give preferential consideration to work-
ers displaced by the conversion of the local General Motors plants to aircraft-
engine production, has been in effect since August 7, 1941. On November G,
Mr. S. Park Harman, Chairman of the Regional Labor Supply Committee of
the Office of Production Management, called a meeting in Buffalo to consider
the status of the plan. It was the consensus of the meeting that the Employ-
ment Service submit to all interested parties a final report summarizing the
results of the plan. This summary is contained in the three paragraphs fol-
lowing :
Of the 3,345 workers laid off, but 571 are unemployed and seeking work
through the New York State Employment Service. 1,707 of the remainder
are known to be working. 440 who dropped out of the plan and 463 who
never entered the plan are assumed to be working. The assumption is
based on the fact that those workers entitled to unemployment insurance
benefits did not claim benefits or draw to exhaustion. The additional 164,
in response to letters, stated that they were vmemployed but did not enter
the plan nor did they draw unemployment insurance benefits.
Thus 2,610 (78 percent) are known or reasonably assumed to be working.
571 (17 percent) are known to be unemployed, and the present status of
164 (5 percent) cannot be definitely determined.
Work opportunities were offered to more than 300 of the 571 unemployed
persons, but either the worker was not entirely acceptable to the employer
or the opportunity was not acceptable to the worker. Only 121 of this
group are presently enrolled in national defense training courses. The
courses in which most of them are enrolled will prepare them for employ-
ment in the converted motor plants rather than for work opportunity else-
where.
It was also agreed at this meeting that additional lay-offs, now numbering
approximately 2,200, by other local industrial plants facing problems of material
shortages or of conversion to defense production, make necessary the consider-
ation of a more comprehensive plan to afford to all displaced workers employ-
ment opportunities in local industries.
The current labor market situation was reviewed especially with respect to
immigration of workers from other communities and other States. It was the
sense of the meeting that local displaced workers should have preference over
migrants coming into the community and that steps should be taken to formulate
and implement a plan to effectuate this ob.1ective. Officials of the Regional
Labor Supply Committee of the Office of Production Management are now
studying these problems.
8208
WASHINGTON HEARINGS
San Diego Exhibit 29. — Survey of Housing and Migration
(On the following pages appears the second report of a survey made
by the Consolidated Aircraft Corporation, of San Diego, Calif. The
first report, covering 475 applicants for work who were questioned at
random in the company's employment office during the week ended
August 1, 1941, was received too late for inclusion in part 12, San Diego
hearings, and was therefore published as "San Diego Exhibit 28" in
part 17, Washington hearings.^ The material that follows was based
on a continuation of this survey, covering 500 applicants, during the
week ended September 20, 1941.)
San Diego Exhibit 29. — Survey on Housing and Migration Conducted at
Consolidated Aircraft Employment Office Among Applicants Applying
FOR Work, Week Ending Sept. 20, 1941
report by consolidated aircraft corporation, SAN DIEGO, CALIF.
Table 1. — Age, marital status, dependents, period of residence, and housing
situation of applicants for icork at Consolidated Aircraft Corporation, week
ending Sept. 1, 19Ifl
Description
Number in sample
Age of applicant
18 through 20 years.
21 through 27 years.
28 through 35 years.
36 through 49 years.
50 years and over. . .
Marital status:
Married
Single
Number of dependents.
None
One
Two
Three
Four or more
Time in California:
One week or less...
Num-
ber
158
237
63
33
9
165
335
57
29
24
205
Per-
cent-
age of
sample
2 31
3 47
M3
7
«2
33
67
"58"
20
11
6
5
41
Average
24.9 years.i
Description
Time in California —
Continued.
One week to 1 year.
One year or over...
Time in San Diego:
One day
Two days to 1 week.
Week to 1 year
One year or more ..
Applicants seeking
housing accommoda-
tions:
Koom and board. . .
Houses or apart-
ments
Applicants not seeking
housing accommoda-
tions
Per-
Num-
cent-
ber
age of
sample
185
37
110
22
127
25
191
38
145
29
37
8
227
45
119
24
108
21
273
55
Average
• This figure shows applicants 1 year and 4 months younger than those shown in report of the survey^for
the week ended Aug. 1, 1941 (see pt. 17, Washington bearings, p. 6969.)
' Too young for draft. * Deferred under new law.
' Age groups from which draftees are selected. ' Above draft age.
Table 2. — Last previous States of residence of applicants seeking employment with
Consolidated Aircraft Corporation, week ending Sept. 1, 19^1
border states
Kentucky 3
Missouri 26
Oklahoma 60
Tennessee 2
West Virginia 2
Total, 18 percent 93
FARM STATES
Iowa 22
Kansas 22
Minne.'^ota 18
Nebraska 14
North Dakota 9
FARM STATES — contmucd
South Dakota 10
Wisconsin 6
Total, 20 percent 101
LAKE STATES
Illinois 20
Indiana 5
Michigan 5
Ohio 3
Total, 7 percent 33
^ So(5 te.stimony of Maj. Edpar N. Gott. vice president. Consolidated Aircraft Corporation,
and Hormm R. Wiseman, personnel administrator. Consolidated Aircraft Corporation, San
Diego liearinss, pp. 4848-4859; and San Diego Exhibit 28, pt. 17. Washington hearings,
pp. 69G7-6970.
NATIONAL DEFENSE MIGRATION
8209
Table 2. — Last previous States of residence of applicants seeking employment with
Consolidated Aircraft Corporation, week ending Sept. 1, li)Jfl — Continued
SOLID
Alabama
Arkansas
Louisiana
Texas
Virginia
Mississippi
Georgia
Florida
SOUTH STATES
13
8
66
1
1
1
2
Total, 20 percent 100
MOUNTAIN STATES
Arizona 11
Colorado 12
Idaho 6
Montana 4
Nevada
New Mexico
Utah
2
5
3
Wyoming 7
NEW ENGLAND STATES
Massachusetts 1
PACIFIC STATES
California 1
Oregon 110
Washington 2
Total, 23 percent 113
SEABOARD STATES
New Jersey . 1
New York 4
Pennsylvania 3
Maryland 1
Total, 2 percent 9
Grand total 500
Total, 10 percent-
50
Table 3. — Percentage of employees of Consolidated Aircraft Corporation bom
in each State, November 17, 19Ifl
State of birth ; Percent
California 11. 4
Texas 11. 1
Missouri 7. 3
Oklahoma 6. 7
Kansas 5. 7
Illinois 5. 4
Iowa 4. G
Nebraska 4. 3
Minnesota - 4. 2
Arkansas 3. 1
Colorado 2.8
New York 2. 8
Foreign countries 2. 5
Arizona 2. 0
Ohio 2. 0
Pennsylvania 2. 0
Wisconsin 1. 8
Massachusetts 1. 5
Utah 1. 5
Washington 1. 3
Indiana 1. 3
Michigan 1. 3
South Dakota 1.2
New Mexico 1. 1
North Dakota 1. 1
State of birth— Continued. Percent
Idaho 1. 0
Oregon 1. 0
Louisiana . 8
Montana . 8
Tennessee . 8
Wyoming . 8
Kentucky . 6
Mississippi . 6
Connecticut . 5
Alabama . 4
Maine . 4
Maryland . 4
New Jersey . 4
North Carolina . 4
Georgia . 3
Rhode Island . 3
West Virginia . 3
Florida . 2
Nevada . 2
Virginia .2
South Carolina . 1
Vermont . 1
District of Columbia . 07
New Hampshire . 07
Hawaiian Is'.ands , 04
Table 4. — Percentage of employees of Consolidated Aircraft Corporation by States
in which they were last employed, Nov. 17, 19^1
State last worked: Percent
California 45. 5
Texas 8. 3
Missouri 4. 5
Illinois 3. 6
Kansas 3. 5
State last worked— Continued. Percent
Oklahoma 3. 3
Arizona 2. 3
Iowa 2. 3
Minnesota 2. 3
New York 2. 2
8210
WASHINGTON HEARINGS
Table 4. — Percentage of employees of Consolidated Aircraft Corporation by
States in tcJiich they were last employed, Nov. 11, 19Jfl — Continued
State last worked— Continued. Percent
Nebraska 2.
Colorado
Wisconsin
Michigan
Ohio
Indiana
New Mexico--.
Pennsylvania-
Wyoming
Arkansas
Tennessee
Utah
Washington —
Idaho
Oregon
Louisiana
Montana
South Dakota.
Alabama
State last worked— Continued. Percent
Maryland 0. 4
Massachusetts
New Jersey
North Dakota
Rhode Island
U. S. Army
U. S. Navy
Connecticut
Florida
Georgia
Nevada
North Carolina
Kentucky
Mississippi
West Virginia
Virginia
Dist. of Columbia-
Hawaiian Islands-
Canal Zone
.4
,4
4
.4
.4
.3
,2
,2
,2
,2
,2
,1
,1
.1
,1
,04
,04
.04
Table 5 — Length of time in California of employees of Consolidated Aircraft
Corporation,^ November 17, 19^1
Percen t
Up to 6 months 34. 9
7 to ] 2 months 9. 9
1 to 2 years 14. 0
Percent
2 to 3 years 3. 5
3 to 5 years 5. 4
Over 5 years 32. 3
"The average length of time in California of employees of Consolidated Aircraft Cor-
poration is 6 years and 4 months.
INDEX
Allocations (see also Defense production; Supply Priorities
and Allocations Board) : Page
Copper curtailment order, effect of 8151
Factors considered in making- 81^2
Industries affected by 8151
Surveys of communities affected by 8152
Policy, Supply Priorities and Allocations Board 8029-8031
Army and Navy :
Cooperation with Office of Production Management 8090,
8138-8139
Determination of defense requirements 8021
"Farming out" of contracts {see also Defense contracts —
subcontracting : 8046-8047
Legal limitations on procurement 8087
"Legalistic attitude" toward procurement 8070-8071
Placement of purchase orders by 8024
Procurement methods 8045-8046
Procurement policies, suggested changes 8076-8077
Responsibility for defense production 8050-8051
Retention of managerial responsibility on defense con-
tracts, advocated 8047-8048
Automobile industry; labor policy agreements 8192-8195
Buffalo plan :
Discussed 8141-8146
Intangible accomplishments of 8146-8147
Official report on 8197-8207
Press release on 8184-8185
Results obtained 8148
Bureau of Employment Security :
Registration at offices of 8114
Reports of lay-offs 8139
Business men (see also Small business) :
Nondefense clinics for, suggested 8028-8029
Responsibility and opportunities under defense pro-
gram 8018-8019
Certification of communities &'152-8]53
Civil Service Commission: Roster of industrial engineers 8069
Clearing centers :
Distinguished from "pools" 8073
For excess production facilities 8072-8073
Community surveys 8152
8211
8212 INDEX
Page
Congress of Industrial Organizations. {See United Automobile
Workers — Congress of Industrial Organizations.)
Conservation Order No. M-9-c 8151
Consolidated Aircraft Corporation : Survey on housing and
migration of applicants to 8208-8210
Contracts. {See Defense contracts.)
Conversion. {See Defense conversion.)
Defense contracts {see also Defense production; Office of Pro-
duction Management) :
Analysis of allocations, by regions and States 8122-8123
Apportioned by Contract Distribution Diviison 8017
Central subcontracting system for, advocated 8091-8092
Channelization of distribution 8140-8141
Costs of improper distribution of 8026
Development of the directive for 8138
Distribution methods 8149
"Exploding" for subcontracting 8050, 8071
Importance of follow-up procedures 8047-8048
Management engineering units advocated 8050
Pooling of facilities for 8048, 8081
Prime contractor control in 8047
Ratio of amounts let to appropriation 8078
Eeexamination of completion dates, to speed produc-
tion 8025-8026
Speed-up methods 8079
Subcontracting :
German methods and experience 8056-8068
Gun parts to nonmilitary manufacturers 8049
Importance of, in production _. 8047
Support of Government agencies required 8047
Defense conversion {see also Great Britain) :
Coordination of demand and supply essential 8019
English experience 8082
Extent of utilization 8084-8085
Extent of plant availability 8043-8044
Governmental assistance in 8152
Machine adaptability ■ — 8023
Unsatisfactory progress charged 8023-8024
Utilization of existing capacity 8075
Utilization possibilities^ 8084-8085
Defense migration. {See Migration.)
Defense production {see also Great Britain) :
All-out program required for 8036-8037
Capacities for, not used 8035-8087
Civilian direction suggested 8025
Democratic efficiency challenged in 8038
Extent of excess capacity 8043-8044
Integration of control policies 8088-80S9
Hampered by procurement methods 8045
Knowledge of tptal requirements necessary 8020-8021
Metalworking industry 8074-8075
Pooling of facilities for 8073, 8083, 8084
Principal deterrents to 8106-8107
i^DEx 8213
Defense production — Continued. ^^se
Kelationship between Government and its suppliers 8051
Summary of suggested program for 8093-8095
System used in England 80.")1, 8052
Two requirements for building volume 8047-8048
Unused capacities for, estimated 8050
Utilization of engineering skills required 8051-8052, 8069
Utilization of excess capacity 8080,8081
Dislocations. (See under Employment.)
Employment {see also Great Britain ; Multiple shifts, National
Youth Administration; Post-emergency planning; Work
Projects Administration).
Additional defense workers requirements, by industry
and skill - 8119
Additional defense worker requirements in relation to
defense contracts .- 8121
Age limits 8127-8128
Areas of greatest defense dislocation 8124
Concentration of labor demands analyzed 8120
Cost of labor market survey 8147
Defense labor requirements, anticipated ; 8118-8119
Dislocations :
Automobile industry 8110-8111
Construction workers 8109,8110
Distribution trades 8135
Durable consumers' goods industries 8110-8111
Extent of, by States 8114-8118
General Motors workers at Buffalo 8197-8207
Government responsibility in 8111-8112
Labor policy agreement 8192-8195
Measurement of 8134
JSIondefense industries 8109-8111
Practical difficulties in estimating 8134
Present and anticipated 8111-8112
Silk workers 8117-8118
Spread of, based on material shortages 8111-8112
Survey of problems of 8114
Uneven distribution of 8135-8136
Distribution by shifts, selected plants 8104-8105
Duplicate registration for 8114
Estimates, by major components, selected industries, 1937-
41 __: _ 8097-8102
Geographical concentration of required workers 8119
Increased by complete use of facilities 8085-8086
Increases :
General Electric Co 8075
Machine-tool plants 8106-8107
Metalworking industry 8078
Industries likely to be affected by curtailments 8151
Intensity of Work Projects Administration employment
compared to total labor force 8121
Labor force estimates 8178
Metalworking industry 8074-8075
Multiple shifts {see also Multiple Shifts) 8103, 8106-8107
8214 INDEX
Emploj'inent — Continued. Page
Overtime 8103, 8105, 8106
Percent of employees on extra-shift work 8103, 8105
Reabsorption program under Office of Production Manage-
ment 8031-8032, 8140
Reemployment factors 8145
Reemployment program, automobile industry' 8149
Shift schedule and hours per week, selected plants 8106
Similarity betAveen contract allocations and labor require-
ments ' 8122-8123
Skilled and semiskilled defense worker requirements 8119
Survey, applicants to Consolidated Aircraft Corpora-
tion 8208-82ia
Tabulation of additional worker requirements, by States,
and labor force 8120
Uneven distribution of workers between shifts— 8103, 8104-8105
Wage earners in 18 defense industries 8102
Employment Service :
Buffalo plan, report by New York office 8197-8207
Organization of Federal agency 8146
Proportion of workers hired through 8143
Registration in States requiring additional defense
workers 8120
Registrations of unemployed employables with 8128-8129
Rslationship of Office of JProduction Management 8148
Use of radio by 8182-8183
England. {See Great Britain.)
"Farming-out" {see also Army and Navy; Defense contracts —
subcontracting; Maritime Commission) :
Bulletins on, issued bv Office of Production Management- _ 8043
German methods and experience 8048-8049,8056-8068
Oerlikon antiaircraft gun 8049, 8071-8072
Federal Security Agency {See Employment Service; National
Youth Administration).
General Electric Co.: Employment increases 8075
Germany {see under "Farming out") : Bibliography on spread-
ing of orders 8066
Great Britain:
Agricultural minimum wages '. 8162
Employment and transference 8156-8160,8171-8176
Health and welfare of workers 8160-8162, 8172-8173
Industrial training 8157-8168,8160,8174-8175
Labor policy and administrative method 8164-8167
Migration 8171
Mobilization and distribution of manpower 8154^8162
Over-all planning 8088
Problems of labor supply 8169-8170
"Reservation" of skilled workmen 8155
Social measures, changes in 8162-8164, 8172-8173
Unemployment estimates 8169, 8170
Women workers 8158,8161,8164-8165,8176
Health. (^S'ee im<ier Great Britain.)
Housing {see also under Great Britain) : Of applicants at Con-
solidated Aircraft Corporation 8201
INDEX 8215
Page
Indiana: Extent of labor dislocations in 8115-8116
Industries affected by curtailments 8151
Labor. {See Employment).
Labor unions. {See L^nited Automobile Workers, Congress of
Industrial Organizations. )
Little business {See Small business).
London and Southeastern Regional Board : Composition and
functions of 8052-8056, 8060
Machine-tool plants: Operating schedules 8107
Machine tools : Form used bv English clearing centers to obtain
data on 1 8055, 8056
Maritime Commission :
"Farming out" of contracts 8046
"•Legalistic attitude" toward procurement 8070-8071
Placement of purchase orders by 8024
Procurement methods 8045-8046
Responsibility for defense production 8050-8051
Material shortages: Extent of 8134
Metalworking cajiacitv of country 8074-8075
Migration {see also Great Britain: National Youth Adminis-
tration) :
Analysis of problem of 80^34
Effect of low AVork Projects Administration employment
on 811,0
Increased by labor displacements 8124
Minimized through skilled plant management 8017
Of applicants to Consolidated Aircraft Corporation- _ 8208-8210
Radio program to discourage 8182-8184
Related to defense contract distribution 8039,8110
Scheduling of plant operations, as cause of 8016-8017
Multiple-plant corporation: Operation of 8036
Multiple shifts {see also Employment; Wages and hours) :
Distribution of employment, selected plants 8104-8105
Incomplete use of 8077-8078
Increased use in defense industries 8108
Machine-tool plants 8106-8107
Operating schedules 8106, 8107
Percent of employees on extra-shift work 8044-8103
National Youth Administration : Youth placement, show-
ing State of origin of trainee and location of plant 8185-8191
Navy. {See Army and Navy.)
Oerlikon antiaircraft gun: Example of successful "farming
r^T'^'-r^ -— 8049, 8071-8072
Omce of Production Management :
Conimunity certification procedures 8152-8153
Division of Civilian Sui)})ly : Limitation programs pre-
pared by ^ 8022
Division of Contract Distribution :
Apportionment of defense contracts by 8017
Coordinate authority for production 8050-8051
Labor Division :
Collaboration with Division of Contract Distribution, 8152
Community surveys 8152
60306— 41— pt. 20 14
8216 ^^^^'^
Office of Production Management — Continued.
Labor Division — Continued. rage
Cooperation with Employment Service 8148
Industry's interpretation of policy statement 8193-8195
Policy and program 8138,8139,8140,8142
Press release of 8184-8185
Report to, on Buffalo plan__ 8197-8207
Sources of labor information 8134—8135
Statement of policy issued by 8192-8193
Training program 8152
Machine-tool survey 803^8033
Pennsylvania silk Avorkers: Defense dislocation of 8117-8118
Per capita distribution of defense contracts and facilities- _ 8122-8123
Post-emergency planning: Retraining and transference of
labor 8177-8182
Priorities. (See Allocations.)
Priority unemployment. {See Employment, dislocations.)
Procurement. (See v/nder Army and Navy.)
Procurement of military materiel :
Scope of an efficient program for 8039-8042
Suggested organization for 8037-8038
Radio, use of by Employment Service 8182-8183
Rhode Island Industrial Commission : Clearing center for in-
dustrial facilities 8072^
Roster of Scientific and Specialized Personnel: Creation and
functions of ; 8051
San Diego, Calif. : Survey of housing and migration in 8208-8210
Scranton-Wilkes-Barre area. Pa. : Extent of labor dislocations
in 8117-8118
Shipbuilding Stabilization Committee: Four-zone standards
set up 8043
Silk workers. {See Pennsylvania workers.)
Small business (see also Businessmen) :
Allocations to 8029-8031
Effect of defense program on 8091-8092
German methods of "farming out" to 8063-8068
Pooling organizations by 8084-8085
Summary of program to speed defense effort 8093-8095
Supplies. {See Allocations.)
Supply Priorities and Allocations Board :
Allocations to small business 8029-8031
Authority of 8023, 8026
Efficiency of surveys directed by 8027-8028
Expediting procurement of basic commodities 8029
Functions and policy objectives of 8017-8018, 8022, 8026
Labor displacements attributed to construction ruling 8110
National inventories of materials available to 8027
Survey of national requirements 8020-8021, 8031
United Automobile Workers, Congress of Industrial Organiza-
tions :
City defense employment committees :
Functions and structure of 8195-8196
Labor policy agreement 8191-8195
INDEX 8217
Vital statistics : Applicants to Consolidated Aircraft Corpora- Page
tion - 8208
Wages and hours (see also Employment; Multiple shifts) :
Overtime 8103, 8105
Shift schedule and hours per week, selected plants 8106
Wilkes-Barre, Pa. (See Scranton-Wilkes-Barre, Pa.)
Wisconsin : Extent of labor dislocations in 8116
Women workers {see also under Great Britain) : Displaced in
silk plants 8117-8118
Work Projects Administration :
Age of workers 8127-8128
Certification for training courses 8130-8131
Direct certification by 8129
Employment, by regions and States, in relation to defense
contracts and population 8122-8123
Employment break-down in States requiring additional
defense workers 8120
Employment percentages in States requiring additional
defense workers 8121
Enrollments 8128
Estimates of defense dislocations 8123
Field reports on employment dislocations 8111-8112
Inability to absorb displaced workers 8110,8113
Inadequacy of aj)propriation 8125
Recertification of defense workers 8132
Report on extent of priorities unemployment, by
States 8114^8118
Road building projects^ 8131-8132
Shift in type of projects 8113
Summarization of labor situation by 8112-8114
Training programs 8126-8127
Transportation of workers to training areas 8125
Type of construction allowed during emergency 8131-8132
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