Evening star., 1952-05-24
FuIbriqht vs.. Wulsh-HeoIey

Senator Fulbright won a well-merited VIC
tory when the Senate Banking and Currency
Committee approved the so-called open market
amendment to the Defense Production Act
The effect of the amendment is to let the
Government purchase standard articles If avail
able on the open market, without applying the
requirements of the Walsh-Healey Act Under
these requirements, as now applied, manufac-
turers Of such articles. in order to sell to the
Government, must abide by the minimum wage
standards set by the Secretary of Labor under
the WalSh-Healey Public Contracts Act
Actually, the Walsh -Healey Act itself does
not impose such compulsion, and contains in
Section a specific exemption for purchasing
OF such items "as may usually be bought in
the open market" The Secretary of Labor, how
ever, by what Senator Fulbright has termed
strained interpretation" has applied this ex-
emption only to such items "as may usually be
bought in the open market by the Government"
Since the Government ordinarily purchases by
bid rather than in the open market-even in the
case Of standard articles that are readily avail
able-this exemption is automatically narrowed
by the ruling It is further restricted, too, by
the Secretarys ruling that when identical articles
are bought from one manufacturer by bid and
from another in the open market the second
seller, as well as the first, must qualify under
the Walsh -Healey Act.
Generally speaking, larger firms do and are
better able to, pay higher wage rates. Obvi-
ously then, as the Senator contends, the above
application of the Walsh-Healey Act is damaging
to small firms, either in forcing them to pay
higher wages than are economically feasible for
them or in precluding them entirely from selling
to the Government. 1t works, also, to the dis
advantage of firms in low-wage areas. If they
do not accept the industry wide wage minimums
set up by the Secretary they are not eligible to
sell to the Government; If they do accept them
they are placed in an unfavorable competitive
situation for Government business in their
normal marketing area. And there is a dislocat-
ing potential, too, in Firm accepting mini
mum wage floor while Firm B, in the same
area and employing people for comparable work
that is not under Government contract, has q
lower scale. The logical result here is that man
power gravitates to Firm A, perhaps to the seri-
Gus detriment Of Firm and any number of
other neighboring enterprises.
All of this, the Arkansas Senator argues,
is contrary to the intent of Congress when the
Walsh-Healey Act was passed and is destructive
of one Of the stated purposes of the Defense
Production Act, namely, to prevent undue strains
and dislocations upon wages and prices.
The committee adoption of the Fulbright
proposal came by divided vote. It is probable
that there will be further contest on the matter
on the Senate floor with labor and some Of the
industry interests Of the high-wage areas Joined
in opposition. The Senator has made per-
suasive case, however, for legislation which
should help bring two basic acts into conformity
with each other and, in the long run, serve to
save the taxpayers money.