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Mr. Surface. Yes, sir.

Mr. Rankin. What about the labor cost? Has it increased or decreased?

Mr. Surface. You mean the wage scale? I do not think there has been much change in the wage scale.

Mr. Rankin. I mean cost of turning out. You say you have increased the output $2,500,000,000. That is right, is it not?

Mr. Surface. Yes, sir.

Mr. Rankin. And at the same time you have decreased the number of employees by about 400,000?

Mr. Surface. About 400,000. That is right.

Mr. Rankin. I want to know whether the cost of turning out this great bulk of material has increased or decreased; in other words, I want to know whether that $2,000,000,000 is added to the profits that have been made?

Mr. Surface. I think we are getting a very significant effect of that in our lowered wholesale prices at the present time.

Mr. Rankin. I understand, but has it cost more or less?

Mr. Surface. I should say it has cost less.

Mr. Rankin. Then the increased profits to the manufacturers has been more than two and a half billion in the last two years.

Mr. Surface. No, sir. I would not put it that way.

Mr. Rankin. Why not?

Mr. Surface. We have not any evidence of that.

The Chairman. You did not say profits.

Mr. Rankin. You said a while ago that the increased amount of the output in the last two years has been two and a half billions of dollars.

Mr. Surface. Yes.

Mr. Rankin. That the number of employees have been reduced by 400,000. Now you say the cost of turning out this material, you think, is less than it was?

Mr. Surface. Per unit. *

Mr. Rankin. You mean per unit?

Mr. Surface. Of course this increase of two and a half billion dollars means they produce that much more goods. That is the volume of goods.

Mrs. Kahn. That does not determine profit.

Mr. Rankin. While you are turning out this material you are employing fewer men each year than you employed two years ago.

Mr. Surface. Yes, sir.

Mr. Rankin. All right. If that is the case, unless your increased cost goes in the material

Mr. Surface. We turn out more goods. We can not state our production in quantitative units. You can not get a picture of all manufacturing in quantitative units. So many automobiles are produced ancf so many barrels of flour. You can not add them together in these terms and get the total.

Mr. Rankin. If the number of laborers had decreased and material has not advanced, why that would indicate a considerable increase in profits that have been made.

Mr. Surface. I do not see that it would.

Mr. Rankin. Why not.

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Mr. Surface. It would increase the volume of output. If we made 3,000,000 automobiles in one year and made three and a half million in another year, that would increase the volume of output.

Mr. Rankin. But if you are paying the same price for the raw material you paid two years ago and employing fewer laborers, which would mean a smaller expense, and at the same time turning out two and a half billion dollars more worth of manufactured materials, would not that indicate an increase in the profits?

Mr. Surface. It does not necessarily. The saving may be passed to the consumer. We have no information on that.

Mrs. Kahn. Suppose it does? The profits do not make anj' difference.

Mr. Rankin. I think it does.

Mr. De Rouen. The replacement of that manual labor must also take into consideration the machinery. That to a certain degree is an expense to be added against the labor that goes into that manufactured article, as to the net profit and quality of those things. There may be a likeness between increase of man power, and machinery replacing man power. You want to determine whether or not it is effective?

Mr. Rankin. The profits of manufactures seem to have been increased in the last two years, and the profits to the agriculturalist decreased.

Mr. De Rouen. Is it profitable to eliminate labor as much as we can by machine, and then what is the result? Where are we drifting? That is the point that occurs.

Mr. Rankin. What figures have you on the increased amount of machinery that has been used in this production?

Mr. Surface. I have not the figures in my head, but we have the amount of horsepower used. It has increased very materially. Perhaps somebody from the Census Bureau knows.

The Chairman. May I ask a question?

Mr. Surface. Yes, sir.

The Chairman. If this census of distribution is taken, could not Brother Rankin ascertain from that census exactly what he is inquiring about?

Mr. Surface. He can come much closer to it, because we would have something on the value of the products distributed. That is the thing we are lacking. Now we only know where it is produced, the value when it is produced, and then we lose sight of it entirely. We do not know how it goes to reach the consumer, where stocks are piled up. We do not know the outlet through which it goes, or any of those features. There are some very interesting things that have come out of this census, and I have two gentlemen who happen to be in the city representing outside interests, whom I would like to have tell you something about that.

Mr. Rankin. I would like to ask you some questions, first: You want to take a census of distribution. How far do you want to go? Do you want to trace this distribution to its ultimate destination in foreign countries?

Mr. Surface. No, sir. This refers only to a domestic distribution. We know something about distribution of foreign trade. That is the only part of our production that we do have figures on. We know absolutely where the products go that are exported from this country. We do not know about the products in this country, or how they reach the consumer. The point is to determine the amount of business, the amount of business done by retailers, by wholesalers, the number of them, distributors, and jobbers.

Mr. Rankin. What articles do you propose to include in this? I did not get here to hear your opening statement.

Mr. Surface. It is a long list of articles. There are some 70.

Mr. Rankin. I am interested particularly in agricultural products. I want to know what agricultural products you have.

Mr. Surface. Here is the list on the questionnaire that was used. Many of these are manufactured products. This is the way in which the products reach the consumer. Here is tobacco production, all of those things which come from agriculture are specified as groceries, hay and grain feed, etc.

Mr. Rankin. I glanced over that list and you left out America's greatest commodity, and that is cotton. Why was that done?

Mr. Surface. Cotton does not go to the consumer as cotton. It goes as cotton goods. You have that here.

Mr. Rankin. Your proposition is to take the manufacturer and give his distribution, but you do not give the distribution as to the producer of raw material.

Mr. Surface. We have that information fairly well. We know the consumption of cotton by the cotton mills. The Bureau of the Census already compiles that information. That is where your cotton goes. Nobody buys cotton to use as cotton.

Mr. Rankin. Take cottonseed production. That is about the third or fourth largest crop in America. What do you propose to do with that?

Mr. Surface. I doubt if there is anything in here which will show that, because most of that does not go directly to the consumer. I think the Bureau of the Census compiles information on cotton-seed products, fats and oil.

Mr. Rankin. As to fats and oils everybody knows the quantity is not arrived at until it is extracted from the seed and becomes a commodity of the oil mills and manufacturers.

Mr. De Rouen. I believe you are driving at the right thing. The distribution of products in your State is very important. You are beginning to go into a diversification, from the chicken to the vegetable and everything that the Department of Agriculture is advocating and fostering so much, and the distribution for instance, of vegetables. I do not know if it is in your district, but Mississippi cream and milk and all those things. To my idea there is lacking something in the entire distribution problems of our country. Where it is I do not know. I am too busy, and even if I was not busy I would not be able to find out. There is something lacking in that entire distribution. There is something wrong. We produce in one part of the United States so much that it rots. You can not do anything with it. How to arrive at the solution to prevent that I do not know, but if we could arrive at a soltition it certainly would be helpful. I believe very much in the problem of distribution.

Mr. Rankin. I am not antagonistic to this legislation, but I have got to the point that I am going to demand that agriculturists be given exactly the same benefits of this legislation that the manufacturers get. They are not getting it to-day, and the distribution of products, agricultural products, is just in chaos and you can not tell about it. You can read the records of this department or any other department, and you will not be able to tell.

Now, a most unfortunate situation grew out of the Department of Agriculture attempting to give the carry over of cotton, you understand. They took the distribution figures of the United States given out by your department and got hold of some European figures and bolstered up the carry over of cotton considerably more than it amounted to, and drove the price of cotton down. It cost our farmers hundreds of thousands of dollars overnight.

If we are going to pass this law, I want this census of distribution of farm products and dairy products just as thorough as that of manufactured materials.

The Chairman. Is not that in this list?

Mr. Surface. Dairy products are included. When you go to the retailer you must deal with the products he handles.

Mr. Rankin. Why did you not do this?

The Chairman. There is included groceries and delicatessen.

Mr. Rankin. Take this cottonseed proposition. You can take these figures and read them until doom's day, and you can not arrive at anything like a definite conclusion as to the amount of cottonseed that is produced. The thing we want is a census of distribution of this material up to the time it goes into the hands of the manufacturers, and then if you want to carry it from there on that will be all right.

Mr. Surface. That is a very important phase that should be covered, to my mind. I think the distribution of industrial products would be the way to get at it, that is, the products which industry buys, where they buy them and how much.

Mr. Rankin. Why could you not take it in this way: Get the distribution of all farm products as far as they go as raw materials, until they go in the hands of the manufacturers.

Mr. Surface. That will be possible.

The Chairman. Is not that already in the bill?

Mr. Rankin. I do not think so.

The Chairman. That goes to the primary product.

Mrs. Kahn. I think that is covered.

The Chairman. When this product gets to be Quaker Oats it becomes a grocery, and then it goes to the retailer.

Mr. Surface. You can go to the Quaker Oats Co. and find out how much oats they bought.

Mr. Rankin. The Government departments are neglecting it, and it is an unjust discrimination against the men who produce this material. I will take this cottonseed proposition. About 500,000,000 bushels of cottonseed were produced in the United States last year. It is the easiest crop in the world to arrive at. There are 33J^ bushels to each bale. It is just as easy as any figures you can make. You do not give that in the numbers of bushels that are sold or that are-produced. You do not show how many are kept on the farm; how many are used for planting purposes. You do not show the number of million bushels that are used for feed, but Mr. Brown. So far as I know it was. I have no criticism.

Mr. Rankin I noticed in the post-office examinations a man may make 80 per cent for his experience and only 20 per cent for his education and efficiency.

In other words, a man who can barely write his name, if he is considered by the examiner to have had sufficient experience of the right kind that was most favorable at that particular period, might make 75 or 80 without any education at all. Is that true?

Mr. Brown. He has got to be able to do more than write his name, because he has got to fill out an application blank.

Mr. Rankin. Do you take into consideration, when you rate his experience, his small abilities.

Mr. Brown. We most assuredly do.

Mr. Rankin. And misconduct.

Mr. Brown. Yes, many a man is thrown out of the examination because of that.

Mr. Rankin. Would you count the paying of money to one supposed to have political authority, moral turpitude? Would you call that a moral turpitude suffixient to bar him?

Mr. Brown. If it were brought to our attention, yes. Those things rarely come to us.

Mr. Rankin. Brought to your attention. Would you not have sufficient foresight to make a thorough investigation?

Mr. Brown. We do if it is brought to our attention.

Mr. Rankin. When you suspect these things, do you not make it your business to investigate the matter?

Mr. Brown. Not on mere suspicion. We have no money to spend on mere suspicion.

Mr. Rankin. Just to what dignity does that suspicion have to rise to make activities on the part of the Civil Service Commission?

Mr. Brown. If while the papers from an examination are being rated it comes to the commission's attention that one of the candidates has paid money to secure his appointment, the rating is suspended and an investigation to determine the facts is made.

Mr. Rankin. You heard that in reference to my State. I will not name the post office, but I want to know if the Civil Service Commission has made a very thorough investigation of the buying and selling of post offices in the State of Mississippi.

Mr. Brown. Not so far as I know.

Mr. Rankin. You have not, have you?

Mr. Brown. No, sir.

Mr. Rankin. There is a case pending now. I will not put it in the record, but if you will call I will give you facts where a man, a postmaster down there, was out of a job, and another man went to him and I understood by some connection was to pay him $1,500 for the place. He paid him $300 down and was to pay $100 a month for 12 months. With that suggestion before you would that rise to sufficient dignity of moral turpitude for you to make a thorough . investigation of it?

Mr. Brown. Yes.

Mr. Rankin. You represent the commission here.

Mr. Brown. That would be a case which ought to be very carefully considered and investigated personally afterwards.

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