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9B. Same, with Wage Stabilization Board's proposed raise.. 2256
DEFENSE PRODUCTION ACT AMENDMENTS OF 1952
TUESDAY, APRIL 22, 1952
UNITED STATES SENATE,
Washington, D. C. The committee met, pursuant to notice, at 10 a. m., in room 301, Senate Office Building, Senator Burnet R. Maybank (chairman) presiding.
Present: Senators Maybank (chairman), Fulbright, Robertson, Sparkman, Frear, Douglas, Benton, Moody, Capehart, Bricker, Schoeppel, and Dirksen.
The CHAIRMAN. I will ask that the meeting come to order,
I might say it was the wish of this committee to have you three gentlemen and Mr. Steelman here at one time. Mr. Steelman telephoned me this morning and asked to be excused. He said Mr. Putnam would represent him.
The reason for having you gentlemen here at this time is to give this committee your opinions of what is wrong, if anything, with the present law.
As I understand, the committee did not expect any prepared statements. It would be interesting to hear Mr. Arnall's statement after the other meeting is over, but it is our desire to ask you questions about the administration of the law.
We have a full committee here. It has been suggested that questions by the Senators be limited to 2 minutes so that everybody will have a chance to get in and ask such questions about the law as they desire. We will proceed, in order, from right to left around the table.
If that is agreeable, after we finish with all members, which should take an hour, it will then be open as long as the committee desires it. After we get through this meeting the committee will consider what to do about public hearings and what to do about the control bill in view of the changed situation and in view of what may be done in connection with the steel dispute.
Is that agreeable?
Senator ROBERTSON. I suggest to the Chairman that each member be permitted to ask one question and then go on around.
The CHAIRMAN. Very well. Each one will ask a question.
The issues involved in the current steel wage dispute are highly controversial. All parties concerned stress different aspects of the dispute.
For the benefit of the committee members, I thought it would be beneficial to have in one place the data and pertinent information with respect to the positions taken by the union, the steel companies, the Wage Stabilization Board, and the Office of Price Statilization in the steel negotiations. Accordingly the staff of the committee has compiled data from the parties concerned and various other sources. It will, without objection, be inserted in the appendix to the record.
(The information referred to will be found in the appendix, p. 2297.)
I want to make this statement before we proceed. I have seen some publicity in the paper as to what this committee was going to do and what it was not going to do and what I was doing and what Senator Robertson was doing behind the scenes.
You are in charge of price control, Governor Arnall. Have I ever asked you to raise any prices?
Mr. ARNALL. Mr. Chairman, you have never made a request to me to raise prices. Your statement to me has always been that it is my job to do my duty to try to stabilize prices and you would always support me when you believed I was doing my duty.
You have never asked preferential treatment for anyone and I do not believe you ever would.
The CHAIRMAN. I thank you for that. I have no other statement except to say that I believe it is my duty on this committee to pass proper legislation to help the American people and stop inflation.
Mr. ARNALL. Let me say the reply I make to your question would be the same reply I would make to Senator Robertson if he asked me that.
Neither of you has tried to bring about price increases so far as I know and I do not believe you would.
Mr. Putnam, May I add to that and say that neither you nor Senator Robertson have ever approached me on any such subject.
The CHAIRMAN. I have had three or four meetings with you in the last month or so.
Mr. Putnam. And you have never mentioned any special price favors for anyone.
The CHAIRMAN. Senator Capehart, you may go ahead.
Senator CAPEHART. Before I start, you can say equally the same thing about myself.
Mr. ARNALL. Correct.
Mr. PUTNAM. I was only mentioning the names of the ones I had seen in the press.
Senator CAPEHART. My first question is this:
I would like to know whether or not there is proper coordination between you, Mr. Putnam and Mr. Arnall and Mr. Feinsinger, and Mr. Wilson, or that office of his. My first question is, Did you advise Mr. Feinsinger, or the Board-this question is directed to Mr. Putnam and Mr. Arnall—that in your opinion the wage increase that they were about ready to recommend was too high or that they recommended that you would have to permit some sort of price increase in steel?
STATEMENTS OF ROGER PUTNAM, ADMINISTRATOR, ECONOMIC
STABILIZATION AGENCY, ELLIS G. ARNALL, DIRECTOR, OFFICE
Mr. Putnam. Let me say this: The first part of your question was whether there was the proper coordination and cooperation. I think my two associates on either hand may have things to say on that subject as the hearings go on, but I want to say I think we are a very closely knit team-considering that we are all Presidential appointees, all confirmed by the Senate—and we work very well together.
I think that there are certain things inherent in a tripartite Wage Stabilization Board, in which I firmly believe, that make for some independence of thought, but I think there is good coordination and complete understanding between us. I will ask my colleagues to confirm that, or you may ask them as time goes on.
Now, as to your second question, there was continuing consultation between Mr. Feinsinger and me all during the time of the deliberation of the Board on the award for steel. That is not under me, you understand. In its dispute-settling function the Board is directly under the President and they do not have to come through me, but Î think the fact that we were in constant touch shows the cooperation that we had.
Senator CAPEHART. You say they do not have to consult with you?
Mr. Putnam. Not on the dispute-settling functions. They are working directly for the President on that.
Senator CAPEHART. They do not have to take into consideration whether in your opinion a price increase would be necessary?
Mr. Putnam. The dispute settling is completely a separate function of the Board. Their general regulations must be approved by me but the dispute settling activity is a completely separate function given to the Board by the President.
Senator CAPEHART. Did you at any time ever advise the Board or the chairman that in your opinion the wage increase that they were about ready to recommend was too high and that it would necessitate an increase in the price of steel and other things?
Mr. Putnam. We were constantly in communication with one another as to the possible effect on prices, and as to the possible effect on wages. I will say this, because I want to be completely frank with this committee: At the time the decision was made—and Mr. Feinsinger will bear me out-I felt that it was high. I have studied a lot more facts since then and I can bring some to you that have changed my mind. I did not have all the facts at that time.
Senator CAPEHART. Then at one time you did advise the Board that you thought their recommendation was too much?
Mr. PUTNAM. I discussed that with them just beforehand and I felt the figures they were discussing were high.
Senator CAPEHART. You have since changed your mind?
Mr. Putnam. I have since had more information and I can show you that at any time the committee wants to see it.
Senator CAPEHART. Is that your position, Mr. Arnall?
Mr. ARNALL. Well, number one, so far as I recall I never was consulted about what WSB was going to do. I am not the coordinating man. That is Mr. Putnam. I am kind of a dog's tail-after everything else has happened it gets over into my shop. I do not ever recall having discussed it except informally from time to time when there were meetings, and we told Mr. Putnam, Mr. Wilson, and Mr. Feinsinger--my people did our policies and what we could and could not do. But I never did interfere with Mr. Feinsinger's job nor with Mr. Putnam's.
Senator CAPEHART. Did you at any time say to them that in your opinion the recommendations that they were about ready to make or had made were, in your opinion, too much?
Mr. ARNALL. I did not know anything about the recommendations until after they were made.
Senator CAPEHART. Then, as the price stabilizer, you were not consulted by the Board?
Mr. ARNALL. By WSB? Senator CAPEHART. Yes. Mr. ARNALL. No. Senator CAPEHART. And you were not consulted with regard to what effect this increase might have on the economy?
Mr. ARNALL. They had been told what we could and could not do under our price policies. Informally I told Dr. Feinsinger that.
Mr. Putnam. May I just add to that that I was the coordinator there. My economist and your economist, Mr. Arnall, had gone over very carefully what the steel figures showed, and I am sure Dr. Feinsinger has seen those figures as well.
The CHAIRMAN. You told me that you could not coordinate because you did not have the final say.
Mr. PUTNAM. I said I could not order what this Board should recommend, and I do not think anybody should. I think a tripartite board is the best way to settle labor disputes.
I could not order them, but on the other hand, I think there was complete coordination and an understanding of what the effects would be.
Senator CAPEHART. Then the fact is that we really have two separate and distinct boards with one having absolutely no authority over the other; one having the authority to recommend any kind and type and amount of wage increase that they might care to under formulas that have been previously established, subject, of course, to change. We have two independent organizations, one dealing with prices and another dealing with wages?
Mr. PUTNAM. No, they are not independent because they both coordinate through me.
The dispute settling recommendations of this Board must be within its own rules and the rules have had to be approved by my office.
There is an interchange of information, sometimes direct, but also through me constantly, and I will say we have had a habit of dining together relatively often to make sure that we do coordinate our activities.
Senator FULBRIGHT, Mr. Putnam, is there anything to this limitation or not? If you are going to follow a procedure, I think it should