I want to point that out. The public would pay $12 and the companies would keep $3.50 and pay $8.50 in excess-profits taxes.

Now, gentlemen, if you are going to ask me the next question which always comes, "Well, what about the Government's taxes" then I tell you that we in OPS can never properly set ourselves up as an agency to look after taxes because if that is our purpose, Senator Fulbright, we ought to let everybody in America double their prices if what we are trying to do is get taxes into the Government.

The CHAIRMAN. Since you brought that up, that was the one thing this committee did not expect of you and that is one thing that this committee did not want to do, to legislate on tax matters.

Mr. ARNALL. You ought not to, of course.

The CHAIRMAN. But we ought to know what it is going to cost the Government.

Senator BENTON. Do you explain that the steel companies can get half of their $6 back out of the increased price due them under the Capehart amendment? Actually the other half they are writing off on their certificates of necessity, so they do not seem as badly off as some pretend.

Mr. ARNALL. Senator Benton, I do not know how rapidly they will amortize their plants under the tax-exemption certificates. However, that is being done. But that is not my job in price control. My job is to apply the standards, and if they are entitled to a price increase, to give it to them. If they are not, to deny it. If the standards are wrong, Chairman Maybank, tell me that we should have our standards changed, if they are wrong.

Senator ROBERTSON. Is it a part of your present price plan to nullify the benefits that Congress intended for the steel companies and others who took a chance in tremendous plant expansion, coupled with the amortization provision? Are you going to nullify that? Mr. ARNALL. No, sir; we are not going to do that.

Senator CAPEHART. You said if we think your policy is wrong we ought to change it. Well, I think your policy is wrong because your policy is based 100 percent on controlling profits. I think that is a dangerous thing in America.

Mr. ARNALL. If you can devise any system that controls prices and wages without indirectly controlling profits, I would like to know about it. I just do not believe you can do it.

Senator DIRKSEN. Yes; you can do it.

Mr. ARNALL. Let's have it.

Senator DIRKSEN. Well, "no system." Just take out your controls. Mr. ARNALL. If the Congress wants controls kicked out, I will be delighted to be relieved from duty. I again tell you, Senator Maybank, with all candor and appreciation to this fine committee which confirmed my appointment, I cannot help but think, Senator Dirksen, I am doing someone a real service at my own personal expense and inconvenience. And do not think for a minute it is any fun sitting over there all day saying "No" to people. It gets awfully tiresome. Senator BENTON. Do you not think the steel companies have indicated they would raise steel prices $12 a ton if there were no controls? Mr. PUTNAM. Senator Benton, I could not tell you that for sure. They have told us that if the wage package cost $6 a ton in extra cost to them, that in addition to that they would have to have another

$6 and for this reason: They say that all of their costs of supplies and materials will go up another $6.

Senator ROBERTSON. But, Governor, the Richmond paper quoted you as saying in your recent speech down there that the steel companies never asked you for $12 a ton.

Mr. PUTNAM. Well, if that was me, they quoted me wrong. The steel companies have not asked me for an increase in prices at all. They have asked me to change formulas. They have said in their statements that the wage increases would cost them $12 a ton.

Mr. ARNALL. Senator Robertson, they have never asked me for $12 a ton, but here is what they do say: They say it costs them $12 a ton. Now, one other thing I want to make plain to the committee: I had some very delightful conferences with Mr. Fairless, president of the United States Steel Co., and I admire him greatly. He is a fine gentleman, a fine executive, and an honorable man. When we started our conferences about price increase, I asked him two questions and the first question was this:

"Do you believe that it is necessarily true, historically and traditionally, in American business, that every time you have a price increase you have to have a wage increase?"

He said, "No."

Then I asked, "Do you believe, in American business, traditionally, every time you have a wage increase, you have to have a price increase?" He said, "No."

Of course, he and I both recognize that if you get such a tremendous wage or cost increase the other would have to increase.

For instance, I have a small insurance company. We recently gave all our employees salary increases, but we did not raise our premium cost to our policyholders because we assumed that through greater operating efficiency, securing more business, working harder, expanding, developing our business, we could still give that salary increase without adversely affecting the returns to our stockholders. Senator MOODY. Is that not the history of American industry? Mr. ARNALL. If that is not true, Senator Moody, how do you explain the high standard of living we have in this country if there has not always been the capacity on the part of American business, by its own ingenuity and operating efficiency and increased productivity, to increase its profits even after it does wonderfully well for its workers.

Senator MOODY. If they were to be tied together, absolutely inflexibly, would not that mean a static condition in America?

Mr. ARNALL. That would mean a static condition.

The CHAIRMAN. We only have 20 minutes more and I want Senator Dirksen and Senator Frear to have a chance to question. Senator ROBERTSON. But he said it would cost the consumers $300 apiece. How?

Mr. ARNALL. The cost of living.

Senator ROBERTSON. If what happens?

Mr. ARNALL. If we gave to the steel companies $12 a ton price increase, including Capehart.

Senator ROBERTSON. What would it cost the consumers if we just abolished this law and let everybody fight it out on their own grounds?

96315-52-pt. 4- --3

Mr. ARNALL. All I can tell you is that it cost the consumers $400 for every family group in 8 months when we did not have price control.

Senator CAPEHART. Let me say this. I want to challenge this $300. If you increase the price of steel $12, that would be $900 million. That is correct, is it not?

Mr. ARNALL. I assume that is correct.

Senator CAPEHART. Now, those who buy the steel on an average would multiply, arriving at a selling price, about 3% to 4 times. So let us take the extreme of four times; four times $900 million would be $3,600 million.

Mr. ARNALL. Are you stopping there?

Senator CAPEHART. And there are 50,000,000 families in America. Now that figures out at the rate of about two-fifths of the total expenditures in America.

Mr. ARNALL. Senator Capehart, you are stopping too soon.
Senator CAPEHART. No; I am not.

Mr. ARNALL. If you break the line for steel, do you think I am going to sit over there and say, "We have made an exception for steel but we are going to hold everyone else in line"? I will tell you what I am going to do. I am going to call them all in and say, "Boys, the box is open now. You cannot be discriminated against. You are going to raise food prices, clothing prices, and everything in America.” Do not stop figuring there, Senator.

Senator CAPEHART. You just picked that figure out of the air, did you not?

Mr. ARNALL. No; it is my best judgment.

Senator CAPEHART. It is your best judgment, picked out of the air?

Mr. ARNALL. And I will stand on that figure. I give to the distinguished Senator the right to his mathematics and I insist on the right to mine.

Senator CAPEHART. In other words, it sounds just like it did here when the Capehart amendment came up; it was going to cost $15 billion a year.

Mr. ARNALL. I did not say that.

Senator CAPEHART. The best figure we have in the record at the moment is eight hundred and some million a year. You just took it out of the air.

Mr. ARNALL. No; I do not say that, Senator, with all due respect to the distinguished Senator. It is based on my best judgment and belief.

Senator SPARKMAN. Senator Dirksen?

Senator DIRKSEN. I would like to ask Dr. Feinsinger a question or two.

In the statement which prefaces the recommendations which came out in your report, you spoke about the three alternatives and the first one was the use of the Taft-Hartley Act. This is speculative, of course, but suppose the Taft-Hartley Act had been used in the first instance. What, in your judgment, would have been the result in this controversy?

Mr. FEINSINGER. I will give you my best judgment. The contract in this case had not been overhauled since 1947. They had reopenings only on a limited basis. The union had 22 demands in

there and the company had 7. Those 22 demands broken down constituted 102 demands.

It is my belief that if an injunction had been issued prior to January 1, 1952, the dispute would not have been settled at the end of the 80-day period provided by the Taft-Hartley Act and there would have been no means established under the act to provide a basis for settlement.

You see, Senator, what happens is this: Under the Taft-Hartley Act the President appoints a Board of Inquiry to investigate the facts, but not to make recommendations. It is a sort of a dead end. On the basis of that report-and there is no doubt in this case that the courts would have granted the Taft-Hartley injunction— the Attorney General is instructed to go to the Federal district court and get an injunction. He would have gotten it and that is all that would have happened until near the end of the 80 days, at which time the employers' last offer would have been put to the employees to vote. Now, conceivably they might have settled in that period, but I remind you respectfully that the representative of the steel industry in November 1951, before the negotiations even opened, made a public statement in which he said that he doubted that the dispute could be settled by collective bargaining, that eventually the wage dispute and the price question would have to be settled by the Government.

Senator ROBERTSON. May I ask a question?

Senator DIRKSEN. May I suggest to the chairman that I have not concluded?

The CHAIRMAN. Senator Dirksen has the floor.

Senator DIRKSEN. The bargaining would have been available in that period?

Mr. FEINSINGER. That is correct, and the mediation.

Senator DIRKSEN. This dispute was heard by a panel of 18 members.

Mr. FEINSINGER. It was heard by an ad hoc panel of six distinguished members. The panel was appointed by the Board to hear the case. The panel reported to the Board and then the Board deliberated.

Senator DIRKSEN. No member of the panel is a member of the Board.

Mr. FEINSINGER. That is correct, sir.

Senator DIRKSEN. Could you insert in the record the names of the members of the panel and also their background identity, with cases of a similar company in days gone by.

Mr. FEINSINGER. I will be glad to do so, sir.

(The information referred to will be found in the appendix, p. 2347.) Senator DIRKSEN. Did you keep a record of the panel voting? Mr. FEINSINGER. The panel did not keep any records, sir. We asked the panel-and this was the unanimous judgment of the Board-simply to hold the hearings and report their findings. Senator DIRKSEN. So the panel reported to the Board.

Mr. FEINSINGER. Yes.

Senator DIRKSEN. And there are 18 members on the Board.
Mr. FEINSINGER. Eighteen regular and six alternate.
Senator DIRKSEN. You had 24 in attendance.

Mr. FEINSINGER. We did not have the full Board in attendance at all times. We had a quorum at all times.

Senator DIRKSEN. Do you keep a record of attendance of the Board meetings?

Mr. FEINSINGER. Yes, we do, sir.

Senator DIRKSEN. Will you insert in the record, some kind of report of the attendance of the Board members at the time this controversy was in process?

Mr. FEINSINGER. Yes, sir.

(The information referred to will be found in the appendix, p. 2347.) Senator DIRKSEN. Will you also insert in the record a list of all the members of the Board, industry, and labor and public members, and some biographic data, somewhat similar, I think, to what was submitted to the House when that matter was being discussed?

Mr. FEINSINGER. I will be glad to, Senator.

(The information requested will be found in the appendix, p. 2348.) Senator DIRKSEN. Has there ever been any comment by Chairman Herzog of the NLRB on the question of jurisdiction where the union shop was involved?

Mr. FEINSINGER. Not that I am aware of, sir.

Senator DIRKSEN. You are familiar with his testimony before the House committee in June 1951?

Mr. FEINSINGER. I do not recall it.

Senator DIRKSEN. I will read a portion of it, I think without hurting it by lifting it from context. His testimony which appears on page 192 of the hearings before the House runs as follows:

Until told otherwise, we will go on assuming that the National Labor Relations Board and only the National Labor Relations Board can and should consider unfair labor practice, representation, and union shop issues arising under the Taft-Hartley Act, and we will conduct our operations accordingly. Certainly the recent Executive order does not tell us otherwise. If it did, we should be the first to recognize it and we should and would be the first to voice concern. can discover no reason to do so at this time.

We

Would you interpret that language by Mr. Herzog to mean that they still feel that they have jurisdiction where the union shop issue is involved?

Mr. FEINSINGER. No, sir. I am sure that I know what he was talking about. The only jurisdiction that the NLRB has over the union shop issue, now that the Congress no longer requires an election, is where an employee has been fired under a union shop agreement or has been discriminated against and he, or a union, files an unfair labor practice charge, that is all. They have no jurisdiction to determine which employer should or should not grant it.

Senator DIRKSEN. Did the President ask you directly or indirectly for a recommendation with respect to seizure and did you make any response to him?

Mr. FEINSINGER. No, sir; I have never expressed an opinion on whether he should or should not have seized. I have expressed an opinion on the alternatives that he had available at the time.

Senator DIRKSEN. Mr. Putnam, were you asked directly or indirectly by the President of the United States whether or not under these circumstances, the plants should be seized as the plants were seized?