joane to one individual were Imited to $25 ore. The kans in Porto Rico were made by the Secretary of the Treasury, Secretary of War, and the Secretary of Agriculture. The committee beceres that these loans can best be administered by the Secretary of Agriculture.

For the reasons stated the committee believes that this measure should be passed speedily in order that the greatest becent might be given. The resolution is exactly in the with the Porto Rican legislation and is amply supported by legislative precedents.

O

APRIL 4 (calendar day, APRIL 6), 1932.-Ordered to be printed

Mr. COPELAND (for Senator METCALF), from the Committee on Education and Labor, submitted the following

REPORT

[To accompany S. 3847]

The Committee on Education and Labor has duly considered the bill, S. 3847, and with committee amendments it is reported as follows:

This bill has five main purposes:

1. To guarantee to laborers and mechanics on Federal construction the payment of the prevailing rate of wages as made mandatory in the Davis-Bacon Act.

2. To provide for a predetermination of the prevailing wage on contracts so that the contractor may know definitely in advance of submitting his bid what his approximate labor cost will be.

3. To provide an adjustment of the contract price to meet fluctuations in prevailing wage scales during the life of the contract and to provide a penalty upon the contractor for failure to pay not less than the prevailing rate of wages.

4. To place a penalty upon the contractor who shall require laborers or mechanics to refund or rebate any wages paid less than the prevailing rate of wages.

5. To require the Government to pay at least the prevailing rate of wages on construction work performed by the Government with hired labor.

The early enactment of this legislation is absolutely necessary in fairness to labor and the contractors. It gives labor new and increased protection not provided by the Davis-Bacon Act, without abrogating any of the rights given labor by that act. This bill will correct the injustice and hardship worked upon the construction industry as a result of its inability to figure the cost of labor in submitting bids for public contracts. This act will be a tremendous

benefit to labor in that it will remove the incentive of the contractor to seek cheap labor and encourage wage cuts.

Ample evidence has been submitted to the committee that there is a vital need for this legislation. Numerous cases have been cited where contractors have been brought to the point of ruin by the fluctuation of wage scales, the payment of which is mandatory under the Davis-Bacon law. This bill will in no way interfere with the natural increase or decrease of prevailing wage scales but does provide that the contractor or the Government, respectively, will be reimbursed as a result of the increase or decrease in labor costs.

This bill has had the support of responsible contracting organizations throughout the United States, has been approved by banks, guaranty companies and bonding companies, and by the manufacturers of materials used on public construction. The only opposition presented to the bill was in the form of a doubt as to its constitutionality. This was largely based upon a decision of the Illinois Supreme Court, printed in the hearings, declaring the Illinois prevailing wage scale law to be void. The committee has considered this decision and finds this law was declared void because its terms were uncertain and indefinite. In the words of the court decision:

The act is void because "accepted rules of construction applied to certain sections will not avail to disclose the legislative intent and courts are powerless to supply the omissions of the act. No person, by reading the act, will know with a reasonable degree of certainty what rights it confers and what duties or obligations it imposes." In our view it will be necessary to consider only the contentions that the act is void because it is incomplete and uncertain and that it delegates arbitrary power in violation of the fundamental law.

The committee therefore concludes that the Illinois decision has no bearing whatever upon the constitutionality of this act. The American Federation of Labor expressed no opposition to the bill other than to doubt its constitutionality. It was further stated that the bill would set wages by law. This is contrary to the facts, as the bill merely sets up a primary scale of wages which the contractors shall consider a prevailing scale of wages on a certain contract. This prevailing scale may increase or decrease at any time during the life of the contract, and is in complete conformity with the purpose of the Davis-Bacon Act.

This bill is practical in operation. The Secretary of Labor stated before a committee of the House:

In response to a question as to how long we thought it would take to adjust any dispute that may arise we set a maximum of 10 days, and I think that is correct, because we have our conciliators in different parts of the country and we can get on any job very quickly. I have no hesitancy in trying to determine that question.

The committee therefore concludes that

1. This bill is necessary to the intelligent, economical, and efficient negotiation of contracts for public buildings.

2. It will be of tremendous beneft to labor.

3. It will remove labor troubles on public contracts.

4. It will enable contractors to bid intelligently and reduce the cost of public construction.

5. It is constitutional.

The committee therefore concludes that the bill should be reported to the Senate with the recommendation that it do pass with the following amendments:

Page 2, line 17, after the word "at", insert the words "not less than".

Page 3, line 8, after the word "pay", insert the words "not less than"

Page 3, line 11, after the word "wages", insert the words "contained in the specifications".

Page 3, line 24, after the word "contractor", strike out the words "and his subcontractors" and insert in lieu thereof the words "or subcontractor".

Page 3, line 25, strike out the word "fail" and insert in lieu thereof the word "fails".

Page 3, line 25, after the word "pay", insert the words "not less than".

Page 4, line 1, after the word "or", insert the words "not less than".

Page 5, line 13, after the word "pay", insert the words "not less than".

Page 6, line 3, after the word "pay", insert the words "not less than".

Page 6, after line 5, add the following section:

SEC. 4. If the provisions of section 1 of this act, or the application thereof to any person or circumstances, shall be held invalid, the act of March 3, 1931, or the application thereof to any such person or circumstances, as the case may be, shall not be affected by the enactment of this act.

The purpose of these amendments is to protect the validity of the Davis-Bacon Act in the event this act or any part of it should be held invalid.

benefit to labor in that it will remove the incentive of the contractor to seek cheap labor and encourage wage cuts.

Ample evidence has been submitted to the committee that there is a vital need for this legislation. Numerous cases have been cited where contractors have been brought to the point of ruin by the fluctuation of wage scales, the payment of which is mandatory under the Davis-Bacon law. This bill will in no way interfere with the natural increase or decrease of prevailing wage scales but does provide that the contractor or the Government, respectively, will be reimbursed as a result of the increase or decrease in labor costs.

This bill has had the support of responsible contracting organizations throughout the United States, has been approved by banks, guaranty companies and bonding companies, and by the manufacturers of materials used on public construction. The only opposition presented to the bill was in the form of a doubt as to its constitutionality. This was largely based upon a decision of the Illinois Supreme Court, printed in the hearings, declaring the Illinois prevailing wage scale law to be void. The committee has considered this decision and finds this law was declared void because its terms were uncertain and indefinite. In the words of the court decision:

The act is void because "accepted rules of construction applied to certain sections will not avail to disclose the legislative intent and courts are powerless to supply the omissions of the act. No person, by reading the act, will know with a reasonable degree of certainty what rights it confers and what duties or obligations it imposes." In our view it will be necessary to consider only the contentions that the act is void because it is incomplete and uncertain and that it delegates arbitrary power in violation of the fundamental law.

The committee therefore concludes that the Illinois decision has no bearing whatever upon the constitutionality of this act. The American Federation of Labor expressed no opposition to the bill other than to doubt its constitutionality. It was further stated that the bill would set wages by law. This is contrary to the facts, as the bill merely sets up a primary scale of wages which the contractors shall consider a prevailing scale of wages on a certain contract. This prevailing scale may increase or decrease at any time during the life of the contract, and is in complete conformity with the purpose of the Davis-Bacon Act.

This bill is practical in operation. The Secretary of Labor stated before a committee of the House:

In response to a question as to how long we thought it would take to adjust any dispute that may arise we set a maximum of 10 days, and I think that is correct, because we have our conciliators in different parts of the country and we can get on any job very quickly. I have no hesitancy in trying to determine that question.

The committee therefore concludes that

1. This bill is necessary to the intelligent, economical, and efficient negotiation of contracts for public buildings.

2. It will be of tremendous beneft to labor.

3. It will remove labor troubles on public contracts.

4. It will enable contractors to bid intelligently and reduce the cost of public construction.

5. It is constitutional.

The committee therefore concludes that the bill should be reported to the Senate with the recommendation that it do pass with the following amendments: