Mrs. GRIFFITHS. Would you think it would be fair that if such a bill were enacted, that at least the Government would demand that the people in the new location, those who were doing the work, were paid the same wage as those in the old location?

Mr. MUELLER. Well, one of the reasons, of course, in our free enterprise system, that industries seek to locate in different areas is because they have a more favorable labor climate.

Mrs. GRIFFITHS. That is right.

Mr. MUELLER. Now that is not always necessarily due to a differential in wages. I think if we made that a requirement, that you would probably have so much difficulty trying to administer that, that it would make the bill almost inoperative.

Mrs. GRIFFITHS. Would you think it would be fair that the Government require that employees in the new location have the same unemployment rights as those in the old location, that is if the going concerns paid 26 weeks of unemployment, then that the new ones would have to pay 26 weeks, too, if Government money were used?

Mr. MUELLER. Of course our unemployment compensation acts are all State acts and I do not see how we could possibly interfere with that.

Mrs. GRIFFITHS. Well, you could just say we won't lend the money unless the State amends its laws to go along with this.

Mr. MUELLER. I would hesitate to see, Mrs. Griffiths, us putting roadblocks in the way of our main objective, which is to relieve unemployment.

Mrs. GRIFFITHS. Under the very premises on which you are working, you are possibly going to relieve unemployment in one area and going to increase it in another, isn't that right?

Mr. MUELLER. You are assuming a static situation. You are assuming that this country is not going to grow. We do not have a static gross national product. Mr. Wolcott just read the statistics, to the effect that the last quarter of 1955 our gross national product was $397 billion, and it has been maintained in the first quarter of this year on that level and possibly even a little higher. This country is dynamic. It is growing. We are not robbing Peter to pay Paul.

Mrs. GRIFFITHS. I am not assuming anything. The thing that I am quite interested in is this: where private enterprise supplies all the money, I think they have a perfect right to move anyplace they want to, but the moment you ask the taxpayers to supply 25 percent of their money, then I think the Government has to bend over backwards to make sure that it is not subsidizing industry in one area at the expense of others.

Now, let me ask you another question: For instance, on the textile workers, if they are going to move into an area where they are going to get labor for 25 cents an hour in place of $2, and they are going to pay 10 weeks unemployment instead of 26 weeks unemployment, has the Government considered that it should demand that this saving be passed on to the consumer, so that it is not just a reduction in price that would put the high-priced manufacturer out of business, but it is actually a reduction that represents the kind of saving that the Government has subsidized? Could that be put into the bill?

Mr. MUELLER. I would say that it should be a consideration of the Administrator in administering the bill.

Now I can cite you example after example, because that is exactly what has happened to the furniture business.

Mrs. GRIFFITHS. Incidentally, what is the average hourly wage of a skilled employee of the furniture business in Grand Rapids? Mr. MUELLER. About $1.53.

Mrs. GRIFFITHS. What is the average hourly wage, if you know, of a skilled furniture maker in High Point?

Mr. MUELLER. $1.20.

Mrs. GRIFFITHS. We pay 26 weeks unemployment, isn't that right? Mr. MUELLER. That is right.

Mrs. GRIFFITHS. What do they pay in North Carolina?

Mr. MUELLER. I do not know. But carrying that out, of course that is one of the reasons that industry has moved to the South, because there was a surplus of labor all over the South, originally and naturally industry did move.

Answering your question now specifically, I can cite an example of a plant of a good friend of mine in Grand Rapids who established a plant in North Carolina last year. I would say this, that he has taken business that he would have produced in Grand Rapids, and produced it down there. He is still maintaining his plant in Grand Rapids, but on possibly a more limited basis that he would have.

I do not think that the Federal Government should look with favor on doing that if they subsidize it. In other words, I agree with you absolutely.

Mrs. GRIFFITHS. It would be completely unfair.

Mr. MUELLER. It is a completely unfair situation.

Now when you get into the question of unemployment compensation, that of course is a percentage that we pay on our payroll, and if you have had a favorable rate of employment in the State of Michigan-we pay, for instance, in the plant that I was associated with, one-tenth of 1 percent, because in our particular plant we do not have any unemployment, and that is the lowest rate you can pay. So one-tenth of 1 percent would not affect a selling price.

Mrs. GRIFFITHS. But the Administrator of this bill, if it were to be put into effect, is certainly going to have to be able to look through the corporate entity. He just cannot say simply because you do not move this plant bodily from Grand Rapids to High Point, it does mean that if the management comes down here and sets up a new plant, that they are actually competing and putting out of business their old plant.

Mr. HOLLAND. Will you yield, Mrs. Griffiths?

Mrs. GRIFFITHS. Yes.

Mr. HOLLAND. I am a little disturbed over this bill by the way you bring out these points. You are speaking about relocation of industry. I thought this bill was to create new industries, and not to relocate industries.

Mr. MUELLER. Mrs. Griffiths raised the question

Mr. HOLLAND. If you are going to relocate industry we might as well forget the bill because what you are going to do is create an unemployment problem somewhere else.

Mr. MUELLER. I think that in our presentation, and I am sorry that we got off the track, because specific questions were asked as to what you would do under certain conditions, the objective of the bill is to

create new industries, to create new opportunities, and as I say, we are a dynamic, growing economy. This country expects to have 15 million more people by 1965. Just the wants of those new people, who will have been born by that time, and the others growing up, will create new opportunities.

Mr. HOLLAND. In this bill, Mr. Secretary, you have the story of the retraining of labor which is displaced.

Mr. MUELLER. That is right.

Mr. HOLLAND. I think that is one of the big problems in the United States today-how to train the displaced worker, whose job is being changed by automation.

I think that is one particular problem in itself. It does not concern the creating of new industries, with the exception of the Labor Department having places to train these people in the new industries, as the displaced person is displaced.

The next thing is, if you are going to help the relocation of industry that now exists, you are going to create a worse condition than you have today.

Let's say 10 States want to get new industries. And you are called into the problem. And I might add I am from a district which has a redevelopment program in process, and it is successful-Pittsburgh, Pa., where we have done a great job. All you are going to be called upon to do is to lend money. The local organization has to carry this through entirely. All you are going to do is to ask the Federal Government to lend the money, and they will all be on the same basis; isn't that right?

Mr. MUELLER. That is right.

Mr. HOLLAND. In other words, you cannot do anything outside of that at all. Because if you did, you would be taking sides.

Mr. MUELLER. I think I made the statement here, sir, that I would be absolutely against any action by the Government of the United States to favor one geographic area over another, and to give opportunities in one area that were not equally given in another.

Mr. HOLLAND. The condition we have in Pennsylvania is the plight of the miners.

Mr. MUELLER. That is right.

Mr. HOLLAND. I think that is one of the things the Department should be doing, finding new means and methods of using coal. I do not think we have done enough experimentation, as far as the Government is concerned, in the way of finding new uses for coal.

The next thing is the relocation of industry, in order to get a cost advantage over competitors. I think that is the thing that is hurting us more than anything else-the relocation of the textile industry in the South. Because they are getting cheaper labor there and, as you mentioned in your talk about the unemployment compensation, workmen's compensation, to be frank with you, should be a Federal proposition. We in Pennsylvania have now 30 weeks of unemployment compensation, and we have workmen's compensation for the totally disabled, for life.

Naturally, according to this, we should be penalized for being a humane State, by having our textile industries move to some other State, which treats its employees the same as it treats machinery. When they are disabled they are dumped on the scrap heap. I do not

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think the Federal Government should have any part in creating indus, tries in those States. I think that should be a part of it.

I think this bill should declare, all things being equal, that the going wage that has been paid in the community where the plant was originally, should be paid in the community where these industries are settled.

Mr. MUELLER. Do you think that would be practical?

Mr. HOLLAND. It may not be practicable, but it is possible.

Mr. MUELLER. Let me give you an example. General Electric have just built a very fine new plant in Holland, Mich., where they make fractional horsepower motors. They are not paying any lower wages there than they pay in any other plants, but they located there because it was a favorable location. There was good solid Dutch labor there, and they wanted to build that plant there. That is the type of environment. In other words, these communities

Mr. HOLLAND. What are you saying there? Is that why they settled there?

Mr. MUELLER. No.

Mr. HOLLAND. In other words, you are saying that it is to their advantage because there is no union in that community.

Mr. MUELLER. They have a union. They have a national union. There is a union.

Mr. HOLLAND. Not of the

Mr. MUELLER. It was not on account of the union.

Mr. MUMMA. G. E. has a contract covering all its plants.

Mr. HOLLAND. What advantage would they have then?

Mr. MUELLER. More favorable working conditions.

Mr. HOLLAND. I think human beings are the same all over the world as far as working is concerned.

Mr. O'HARA. Mr. Chairman.

The CHAIRMAN. Mr. O'Hara.

Mr. O'HARA. I will only take a minute, Mr. Chairman. I want to ask the Secretary to delete the word "self-respecting." That implies that an honest person who is out of a job and receives unemployment insurance is not self-respecting and I do not think the Secretary meant that.

Mr. MUELLER. We did not mean it in that respect.

Mr. O'HARA. Will the Secretary on his own motion withdraw that? Mr. PATMAN. It is already in the record. He has read it into the record.

Mr. O'HARA. May I ask unanimous consent of the committee that the word "self-respecting" be deleted? I don't think the Secretary intended to cast an aspersion by implication on these good people who through no fault of their own, are unemployed and who receive unemployment payments.

Mr. MUELLER. You are absolutely correct, sir; and Mr. Chairman, I ask that.

Mr. PATMAN. There is no question that it should be deleted. The witness admits that it should. He asked unanimous consent to do it, Mr. Chairman.

Mr. WOLCOTT. As I understand it he has permission to revise his remarks anyway.

Mr. PATMAN. I know, but he has read it into the record.

The CHAIRMAN. Without objection, that may be deleted.

Mr. PATMAN. A parliamentary inquiry, Mr. Chairman. I want to interrogate the witness sometime, and I probably won't finish for 20 minutes so obviously it cannot be done this morning, The House is meeting and I have to be over there. I wonder when the committee will meet again and we will have an opportunity to interrogate the witness.

The CHAIRMAN. The committee will meet again tomorrow morning. Mr. PATMAN. Will the same witness be back tomorrow morning? The CHAIRMAN. Yes, I presume so. Can you return tomorrow

morning?

Mr. MUELLER. Yes, sir.

Mr. MULTER. Mr. Chairman.

The CHAIRMAN. Mr. Multer.

Mr. MULTER. Have any of the banks or insurance companies been consulted as to whether or not they would go into this kind of a lending program?

Mr. MUELLER. Not specifically with respect to this bill, that I know of.

Mr. MULTER. Is it intended to make any limitation on the amount of any one loan under this bill?

Mr. MUELLER. There should be, of course, a limitation. You mean in actual dollars?

Mr. MULTER. Yes.

Mr. MUELLER. No.

Mr. MULTER. To the extent that small business will be asked to cooperate in this program, why shouldn't this lending facility be vested in the Small Business Administration, rather than in a new lending agency created in the Commerce Department? Your Department has no lending authority today.

Mr. MUELLER. No. As we indicated, Mr. Multer, we propose to cooperate with the Treasury Department, just as the Small Business Administration cooperates now with the Treasury Department.

Mr. MULTER. But as I understand the bill you propose, or you are supporting, it provides that the Commerce Department shall be the lending agency of the Federal Government.

Mr. MUELLER. That is right.

Mr. MULTER. Why should we create a new lending agency when everybody has been saying we ought to consolidate these lending agencies? Why shouldn't we give it to an existing lending agency? Mr. WOLCOTT. Will you yield, Mr. Multer?

Mr. MULTER. Yes, sir.

Mr. WOLCOTT. Wouldn't it be necessary to amend the Small Business Act to increase the possible amount of the loan?

Mr. MULTER. Whatever agency would be given the authority would have to have an express provision of the law giving them the authority. It is not a question of what law needs to be amended, my question is directed to the principles of who should be given the authority.

Mr. WOLCOTT. You would have to change the identity of the Small Business Act almost completely if you did that.

Mr. MULTER. I am not concerned with what we would have to do in any other agency. Certainly if we are going to take this bill and create a new lending authority in the Commerce Department we are