5. That the bill seeks to have restored to the company the amount paid by the Trion Co. in compromise of a penalty asserted by the Office of Price Administration on account of alleged violations of regulations issued by the Office of Price Administration under authority of the Emergency Price Control Act of 1942.

6. That the facts giving rise to the claim and the reasons for enacting the bill are as follows:

The Trion Co. was a manufacturer of work gloves.

During March 1942 all the leading manufacturers of work gloves withdrew their old price lists and prepared new price lists.

In April 1942, the Office of Price Administration issued its general maximum price regulation, effective May 11, 1942. This regulation provided that the maximum prices charged for commodities sold could not exceed the highest March 1942 prices.

A question at once arose as to the application of the regulation to work-glove manufacturers. Representatives of the industry appealed to OPA for a ruling on the matter. The Trion Co. filed its formal appeal on May 21, 1942. It was the industry's contention that as to styles not actually delivered in March at the March list price, the March list established proper ceilings. A representative of the OPA informed glove manufacturers, and in the case of one manufacturer, in writing, that the March 1942 list prices were the properly established ceiling prices for work gloves. This was a perfectly reasonable interpretation. This was general understanding by the members of the industry of the effect of the regulation and the OPA position, and they acted in good faith in accordance with these understandings and sold at March list prices.

More than a year later, in 1943, OPA changed its opinion, and determined that March 1942 delivered prices controlled and not March 1942 list prices. It then proceeded to assess threefold damages against work-glove manufacturers on account of their past sales at March 1942 list prices on the styles of gloves not actually delivered at those prices in March 1942.

The question of the validity and fairness of these assessments was brought to the attention of Congress in the second session of the Seventy-ninth Congress when the extension of the Emergency Price Control Act of 1942 was considered in 1946. At hearings on H. R. 5270 and S. 2028 before the Banking and Currency Committees, the matter was discussed. As a result, Congress concluded that the assessment of threefold damages was erroneous and enacted the last paragraph of section 205 (e) of the Emergency Price Control Act.

This provision forbade the institution or maintenance of any enforcement action against the manufacturers involved.

The result of this enactment was to relieve those manufacturers who had resisted the penalty either by court action or refusal to pay. It did not relieve the Trion Co. which voluntarily settled the controversy and paid the amount on February 1, 1944.

The merits and equities of the Trion Co.'s case are the same as that of other glove manufacturers. The only difference of substance between them is that the Trion Co. settled voluntarily.

N. BARNARd Murphy.

Subscribed and sworn to before me this 28th day of February, 1949. [SEAL]

My commission expires March 18, 1950.

WILLIE B. PARHAM, Notary Public, Georgia State at Large.

SECTION 205 (E) OF THE EMERGENCY PRICE CONTROL ACT OF 1942 as Added by THE JOINT RESOLUTION EXTENDING PRICE CONTROL APPROVED JULY 25, 1946. (PUBLIC LAW 548, 79TH CONG., SEC. 12 (B))

The Administrator shall not institute or maintain any enforcement action under this subsection against any manufacturer of apparel items where the Administrator shall determine (1) that the transactions on which such proceeding is based consisted of the manufacturer's selling such an item at his published March 1942 price list prices instead of his March 1942 delivered prices, and (2) that the seller's customary pricing patterns for related apparel items would be distorted by & requirement that his ceilings be the March 1942 delivered prices. The Adminis trator's determinations under this paragraph shall be subject to review by the Emergency Court of Appeals in accordance with sections 203 and 204.

STATE OF NEW YORK

County of New York,ss:

Donald K. Evans, being duly sworn, deposes and says:

1. That he is treasurer of Riegel Textile Corp. and a director of the corporation. 2. That he was assistant treasurer of the Trion Co. and assistant treasurer of its sole selling agent from 1942 until 1946.

3. That he attended many of the conferences held during 1942, 1943 and 1944 by representatives of the Trion Co. and OPA, and is personally familiar with the matters discussed herein.

4. That this affidavit is submitted in support of H. R. 1054. Eighty-first Congress, first session.

5. That the facts giving rise to the claim are as follows:

Riegel Textile Corp. is successor to the Trion Co. of Trion, Ga. and to Ware Shoals Manufacturing Co. of Ware Shoals, S. C., which had been affiliated for many years prior to the organization of the new corporation in 1946.

Riegel Textile Corp., and before it the Trion Co., operated at Trion a cotton spinning and weaving mill, a finishing plant, and a glove fabricating plant employing approximately 4,000 people. The glove plant normally employs from 600 to 800 people and produces from one-sixth to one-fifth of the total revenue of the Trion plant.

The glove plant produces approximately 70 styles of work gloves made of canton flannel, knitted jersey, and combinations of flannel and leather. Trion gloves are sold principally to the larger distributors, such as mail-order houses, chain stores, and large jobbers, with the result that gloves are customarily sold for delivery in the distant future. During the month of March 1942 the Trion Co., in common with the other principal glove manufacturers, raised its price list to reflect the increased cost of raw materials and labor. Because of existing contract requirements, very few styles of work gloves were actually shipped during March 1942 at the higher list prices.

In April 1942 OPA issued the general maximum price regulation which became effective in May 1942 and was intended to freeze prices at the March 1942 level until such time as the administrator could determine and establish specific ceiling prices for each product or commodity.

The general maximum price regulation provided that ceiling prices should be the prices at which goods were delivered or offered for delivery during the month of March.

The price structure in the work glove industry has always been based on a series of differentials between various styles of work gloves, a 10-ounce canton flannel glove selling at a recognized premium over an 8-ounce canton flannel glove, etc. If the regulation meant that the ceiling price for each individual style of work glove was the highest price at which such style was delivered during the month of March, certain styles would have been priced at the levels prevailing in March 1942; other styles at the price prevailing in December 1941; and others at the prices prevailing as early as September 1941.

Representatives of all the major units in the industry requested a ruling from OPA whether the delivery of certain styles in March 1942 at the new price list constituted establishment of the entire list. The Trion Company filed a formal appeal with OPA on May 21, 1942 which was never answered. In June 1942 Mr. E. Glenn Elliott, Acting Chief of The Work Clothing Unit Division of OPA, stated to representatives of the work glove industry that their established ceiling prices were the prices in their March 1942 price lists. Mr. Elliott subsequently furnished Wells-Lamont Corp., one of the large glove manufacturers, an affidavit, a copy of which is attached hereto.

In March 1942 the Trion Co. had a backlog of unfilled orders equivalent to approximately 37 weeks normal production. In the hope of obtaining a specific ruling in writing from OPA, no new orders were taken at any price, except for nominal orders for a few styles for spot delivery, until October 1942. These nominal orders were taken on a memorandum basis, the price to be determined at a later date. In October 1942 it became necessary to take orders to keep the plant running. Representatives of the Trion Co. were assured by Mr. Elliott that a definite ruling would be forthcoming immediately from OPA establishing the March 1942 list prices as the ceiling prices, and therefore orders were solicited and accepted on that basis. However, the specific price order was not issued until January 17, 1944.

During the late spring or summer of 1943, OPA changed its interpretation of the general maximum price regulation and entered suit against several of the large glove manufacturers for triple damages. OPA made an audit of the records of

H. Repts., 81-1, vol. 3- -91

the Trion Co. and determined alleged violations for the period from May 11, 1942, through September 30, 1943, ranging in amount from $192,672.47 to $236,332.84, depending upon the basis of computation.

No formal action was started against the Trion Co., but representatives of OPA for the Atlanta district stated to representatives of the company that a more complete examination of the records of the corporation would undoubtedly disclose additional violations, and that a triple damage suit for an amount as high as $900,000 or $1,000,000 could be instituted against the company.

The company determined, as a result of conferences with OPA representatives, that a settlement in the amount of $130,000 could be made. In view of the substantial risk involved in litigation, and in view of the unfortunate psychological effect of such litigation on the employees of a corporation engaged primarily in war production, it was decided to make the settlement.

To the best of our knowledge, one other glove manufacturer made a similar settlement, the amount being relatively small. All other major glove manufacturers fought the action.

The matter was brought to the attention of Congress in the spring of 1946 with the result that section 205 (e) of the Emergency Price Control Act was amended, designed specifically to stop pending and forbid new enforcement actions against glove manufacturers for alleged violations arising out of this situation. As the result of the passage of this amendment, all pending cases against glove manufacturers were dropped and no payments were made by such manufacturers. H. R. 1054 provides for the payment of $130,000 to Riegel Textile Corp., on the grounds that it is inequitable to relieve certain glove manufacturers of payment and penalize one manufacturer for alleged violations of the same nature occurring at the same time.

DONALD K. EVANS

Subscribed and sworn to before me this 21st day of April 1949.
[SEAL]
ROSE MARIE HNIDA,

Notary Public

AFFIDAVIT OF E. GLENN ELLIOTT SUBMITTED TO THE COMMITTEE ON BANKING AND CURRENCY, HOUSE OF REPRESENTATIVES, IN HEARINGS ON H. R. 5270 (79TH CONG., 2D SESS.) (VOL. 1, P. 904)

AFFIDAVIT OF E. GLENN ELLIOTT

E. Glenn Elliott, being first duly sworn, on oath deposes and says that: On June 3, 1942, affiant was employed by the Office of Price Administration in Washington, D. C., and on that date was assistant to Martin J. Cardon, then Acting Chief of the Work Clothing Unit Division of the Office of Price Administration; that subsequently, on June 15, 1942, affiant succeeded Cardon as Acting Chief and in December 1942 became Chief of the Work Clothing Unit Division of OPA, from which position affiant resigned on March 1, 1943.

On June 3, 1942, W. O. Wells, president of Wells-Lamont Corp. called at the Office of Price Administration in Washington to discuss the application of the provisions of the general maximum-price regulations to gloves manufactured and sold by that company. Wells was referred to Cardon and affiant.

Cardon and affiant examined samples of gloves from several classifications presented by Wells, the company's 1941 catalog (No. 33) and the December 1, 1941, and March 17, 1942, price lists, and reviewed the pricing principles employed by the company in establishing its price ceilings on all of its gloves.

Wells stated to Cardon and affiant that the separately numbered styles and the prices shown for them on the March 17, 1942, price lists represented only: The highest prices at which the styles were shipped in March 1942; The highest prices at which the styles not shipped in March 1942, were quoted to customers by means of the company's March 17, 1942, price list; or

The prices determined for the styles, shipped during March 1942, at the lower December 1941, prices, by the application of traditional or customary price differentials with respect to the prices at which another style or other styles within the same class of gloves were shipped in March 1942.

At the conclusion of the discussion, Cardon and affiant stated to Wells that the provisions of the general maximum price regulation applied to all gloves manufactured and sold by the company; and that its ceiling prices on all of its gloves had been established, under the provisions of the general maximum price regulation, at the prices quoted in its March 17, 1942, price list. Cardon and affiant further

stated to Wells that ceiling prices for its styles introduced for sale after March 1942 were properly established, under the provisions of the general maximum price regulation, where such prices were determined by the application of traditional or customary price differentials with respect to the prices at which another style or other styles within the same class of gloves were shipped in March 1942. Up to March 1, 1943, the date of affiant's resignation from the Office of Price Administration, affiant did not, nor did anyone else on behalf of OPA, make any change or communication with Wells-Lamont Co. regarding any change in Cardon's and affiant's interpretation of the provisions of the general maximum price regulation with respect to the gloves manufactured and sold by WellsLamont Corp.