1

approved considerably more on each and every one of those adjustments.

Now, as to rates of pay.

Senator FULBRIGHT. What about the union shop, before you get to that?

Mr. FEINSINGER. I would like to complete the picture on the economic issues because that is what you asked for. I will be glad to digress, if you prefer.

Senator FULBRIGHT. Proceed.

Mr. FEINSINGER. On rates of pay, we recommend 12.5 cents effective January 1, 1952; an additional 2.5 cents effective July 1, 1952. Had we stopped there, we would have been consistent in terms of the length of the contract, with the practice in the steel industry which has been 1-year wage contracts, you see.

We recommended an 18 months' contract because we thought it was good for the industry, good for the union, and good for the American public. Both sides indicated that they would like a longer term contract, with no wage reopener, although most industries today provide for quarterly cost-of-living adjustments and others would open at the end of each 6 months.

We recommended an 18 months' contract, no strike permissible during the entire period, and for the extra 6 months, we paid 21⁄2 cents, effective January 1, 1953, plus the Sunday pay that I mentioned previously.

Now what does that add up to and under what regulations did we recommend it? What were the equities in the case?

First, our cost-of-living regulations; second, comparison with other American industries. What they have gotten since any base date you want to mention, and particularly since December 1, 1950, which is the last time the steel-workers got a wage increase, or January 15, 1950, or January 15, 1951.

Now, the president of the United States Steel Corp., although arguing against any wage increase and any price increase, stated on Ďecember 21, 1951, before the case was certified to the Board:

Undoubtedly, the union is entitled under existing the Wage Stabilization Board formula to ask for some increase in wages to cover increases in the cost of living since the present wage scale became effective.

Now, if he meant what he said, you take the wage rate they negotiated on December 1, 1950, and you take the last Consumer's Price Index which was available on that date, and that was October 15, 1950, do you know how much they would have been entitled to by the time that the Board issued its recommendation?

They would have been entitled to an immediate wage increase of 16 cents per hour.

The increase which we actually recommended for 1952 averaged over the whole year, and including consideration of all of the equities of the steelworkers and all of the arguments of the companies, was just 2 cents less than they would have received had they had an escalator clause when they negotiated their last contract.

In addition to that, you cannot name a single major American industry, or specifically, the electrical industry, the automobile industry, the meat-packing industry, the rubber industry, the nonferrous metals industry-name all you like, there is not a single industry.

which has not in the same period voluntarily granted a higher increase to their men than we recommended for the steelworkers.

We have the records, if you want to go into them, and I can support my thesis.

The industry has admitted increased productivity in the past 2 years. We took that into account, but we did not allocate any specific amount to it. Why not? We did not want to establish a productivity policy in this case.

The very least we could have recommended on cost of living is 9 cents, forgetting about the increase in the Consumer's Price Index from October 15, 1950, to January 1951. Making the steelworkers take that loss, the very least we should have recommended is 9 cents; 4 cents for productivity, if we had wanted to recognize it as such, and something to maintain the prior differentials between job classes although there is an argument on that.

In the past, you see, the companies and the union have used part of their money to spread across the board, Senator, and part of it to maintain the spread between classes.

We could have gone the other route and said 9 cents cost of living, 4 cents productivity, three-quarters of a cent less than the average we recommended.

If you take the auto workers' contract and apply that to the steelworkers, gentlemen, I would like to tell you how much the steelworkers would have been entitled to, had they and the companies come in and asked for approval. About 34 cents an hour. That is including the May 1952 productivity increase, to say nothing of the May 1953 productivity increase.

Do not forget we have buttoned up this steel contract, if our recommendations are accepted, until July 1, 1953. And no matter who else gets what, whether cost-of-living increases, productivity increases, interplant inequities, fringe adjustments or what not, the steelworkers will not be entitled to come in and ask for adjustment, and I think that is a magnificent job in terms of industrial peace and stability.

Senator MOODY. Mr. Feinsinger, do you mean the General Motors contract?

Mr. FEINSINGER. I mean the General Motors contract. If the steelworkers had that contract.

The CHAIRMAN. Senator Bricker.

Senator BRICKER. You mentioned that you followed the direction of Congress in this law. Will you cite to us the provision in the law which authorized you to go into the fringe benefits?

Mr. FEINSINGER. In vacations?

Senator BRICKER. Yes.

Mr. FEINSINGER. Yes, Senator. Production Act.

Titles IV and VII of the Defense

Here, I would like to compliment Congress in the hope that eventually, when the dust has settled, the compliment will be returned. Congress did a good job in laying down the framework of wage and price stabilization.

Title IV grants authority to stabilize wages, salaries and other compensation and section 702, definitions, subsection (e), reads as follows:

The words, "Wages, salaries, and other compensation"

and that is what you told us to stabilize

shall include all forms of remuneration to employees by their employers for personal services, including, but not limited to, vacation and holiday payments, night shift and other bonuses, incentive payments, year-end bonuses, employer contributions to or payments of insurance or welfare benefits, employer contri butions to a pension fund or annuity, payments in kind, and premium overtime payments.

I assume that that meant that we were to adopt regulations to cover those subjects and we have done so, and you told us what kind of regulations to adopt.

The CHAIRMAN. It is on page 30, section 702 (e), on page 30.

Senator BENTON. It would be very helpful if this table could be moved back a foot, because we cannot see.

The CHAIRMAN. I would suggest Mr. Feinsinger might talk into that microphone.

Senator BRICKER. That is title VII.

Mr. FEINSINGER. It is title VII. That is what the Congress told us to stabilize, so we obviously must have regulations dealing with all of those matters.

Senator BRICKER. Now, I have one other question at this point, and I do not want to delay matters too long. Where is the provision in this law that authorized you to go into the question of the union shop?

Mr. FEINSINGER. The union shop?

Senator BRICKER. Yes.

Mr. FEINSINGER. So that there will be no misunderstanding, nobody contends that this Board, in the exercise of its disputes function, is a statutory board. That has been made perfectly plain on the record, time and time again in hearings before this committee, and in the hearings before the House Labor Committee, and it was thoroughly thrashed out in the hearings on the so-called Lucas amendment, both here and in the House. But, I would like to call your attention to title V, page 25, of the document. If you have the same document as I, entitled "Settlement of Labor Disputes" section 501.

This shows the philosophy of Congress.

This is on page 23 of the print that you have.

Section 501:

It is the intent of Congress, in order to provide for effective price and wage stabilization pursuant to title IV of this act and to maintain uninterrupted production, that there be effective procedures for the settlement of labor disputes affecting national defense.

Section 502:

The national policy shall be to place primary reliance upon the parties to any labor dispute to make every effort through negotiation and collective bargaining and the full use of mediation and conciliation facilities to effect a settlement in the national interest.

Let me say parenthetically, that the President, in issuing Executive Order 10233, amending Executive Order 10161, which is the source of our authority-all we do is advise the President and the parties-we followed every one of these safeguards.

He said:

I will not refer a case to you until after the Conciliation Service has certified that collective bargaining has been exhausted and that conciliation and mediation have failed.

So, the safeguards which I have just quoted, are in the Executive order.

The statute goes on to say, gentlemen:

To this end, the President is authorized (1) to initiate voluntary conferences between management, labor, and such persons as the President may designate to represent Government and the public, and (2) subject to the provisions of section 503, to take such action as may be agreed upon in any such conference and appropriate to carry out the provisions of this title.

The President may designate such persons or agencies as he may deem appropriate to carry out the provisions of this title.

Senator BRICKER. You do not feel that section 503 in any way limits your jurisdiction in that matter?

Mr. FEINSINGER. On the contrary, it confirms the jurisdiction that the President conferred upon us. With the exception of holding a labor-management public conference, which has not been held, and with the exception of getting an over-all no-strike, no-lock-out pledge, which would presumably have resulted from such a conference, and with the exception of setting up a Board which has jurisdiction over disputes and could make decisions or issue directive orders, as was the case in World War II, the President has said, first

I will refer to this Board only a limited group of cases; those affecting the defense effort; and secondly, I will simply ask that Board to advise the parties and me, as to the basis for a fair and equitable settlement of the dispute.

So, I say not only was he consistent with the philosophy expressed in this title, not only did he follow every safeguard, but the authority that he conferred upon this Board was extremely limited, much more limited than the authority which you conferred upon him.

Senator BRICKER. Do you concur in all that, Mr. Putnam?
Mr. PUTNAM. Yes; I concur in that.

I might say, that Senator Capehart asked me earlier if I changed my mind. One of the reasons I changed my mind about the size of this recommendation was that I checked with my own company and I found we had given, already, since January 1950, raises which total within 1 cent of the amount the steelworkers will have received if the proposals are adopted. A slight increase in the cost-of-living index would wipe out that difference entirely. When I found that out, I, therefore, could not say it was not a perfectly normal and respectable amount for steel. I have some more evidence of that.

If you want to look at that chart there for a moment, you can see a number of other companies or industries which have taken the wage lead, such as General Motors, International Harvester, Swift, Goodyear, coal, west coast shipbuilding, and so on, and we have plotted them. The black lines are the straight money increases given since January 1950, and the extensions of those lines are the fringes. The black columns are the recommendations in this steel-industry dispute, showing the comparative amounts as the various steps would go into

effect.

96315-52-pt. 4-2

(The chart referred will be found facing this page.)

Mr. PUTNAM. I think you can see that all the way, steel has been following behind other people and not leading.

Senator BRICKER. You made your change of mind then, on the basis of your own company?

Mr. PUTNAM. And then going on to check further with other companies. I had this chart prepared.

Senator BRICKER. Did you discuss with Mr. Feinsinger the union shop provision before the recommendation was made?

Mr. PUTNAM. We discussed it; but it is not an economic issue, and that I felt, was none of my business.

Senator BRICKER. Therefore, it is just a recommendation to the President, not coming through you?

Mr. PUTNAM. I did not understand that.

Senator BRICKER. It is a recommendation to the President instead of coming through you?

Mr. PUTNAM. None of their recommendations come through me. We are friends, we work together, we discuss things.

We discuss almost anything in a case like this, but the recommendation goes directly to the President. The union shop issue is not an economic issue, and I could have no interest in it except as an individual, anyway.

Senator BRICKER. I have one other thing, Mr. Chairman. I would like to have the names of all those who are here present, whom they represent.

The CHAIRMAN. Without objection, a list of those present here will be inserted in the record.

(The list referred to follows:)

With Mr. Putnam were: James McI. Henderson, General Counsel; Ben Caplan, economic adviser; and J. Fred McClerkin, counsel.

With Mr. Arnall were: Edward Phelps, Director of Price Operations; Joseph Freehill, Deputy Director; Gardner Ackley, economic adviser; Saul Nelson, deputy economic adviser; Franz Wolf, Director, Research and Statistics; Herbert T. Maletz, chief counsel; William C. Burt, deputy chief counsel; and William MacLanahan, Deputy Director, Public Information.

With Mr. Feinsinger were: Frederick H. Bullen, Vice Chairman; Isaac N. Groner, chief counsel; L. Reed Tripp, Director, Office of Economic Analysis; and George J. Kuehnl, assistant to the Chairman.

From the Office of Defense Mobilization were: Rodolfo A. Correa, General Counsel; Matthew Hale, Deputy General Counsel; and Vaughn C. Ball, Assistant General Counsel.

The CHAIRMAN. Will you also supply for the record the Executive order you referred to?

(The Executive order referred to follows:)

APRIL 21, 1951.

EXECUTIVE ORDER 10233-AMENDING EXECUTIVE ORDER No. 10161 WITH RESPECT TO WAGE STABILIZATION AND SETTLEMENT OF LABOR DISPUTES Whereas the maintenance of wage stabilization under the Defense Production Act of 1950 is essential at this time in the interest of the national defense; and Whereas the maintenance of effective wage stabilization imposes limitations on the processes of free collective bargaining, making necessary the development of machinery to facilitate the settlement of labor disputes in conjunction with the administration of wage stabilization; and

Whereas on April 17, 1951, the National Advisory Board on Mobilization Policy made the following recommendation to the President:

"1. The Wage Stabilization Board shall be reconstituted as an 18 man tripartite Board with six representing the public, six representing management, and six representing labor.