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Mr. ARNALL. I just do not want to do Mr. Wilson an injustice, nor do I wish not to acquaint the committee fully with the circumstances that led up to Mr. Wilson's resignation.

I think this is another story, but I think in all justice to the committee, and to Mr. Wilson, and to me, and to Mr. Putnam and others, we ought to know this from one who was there.

As I tell the story, let me say that I have the highest respect for Charles E. Wilson. He is a great patriotic American.

The CHAIRMAN. Do you want to put this on the record, now?
Mr. ARNALL. Yes, sir; put it on the record if you want to.
The CHAIRMAN. Necessarily, we will have Mr. Wilson brought in.

Senator FREAR. The question is, What recommendation did Charles Wilson make?

Mr. ARNALL. When this Wage Board recommendation came out, everyone was anxious to acquaint the President with the facts, as soon as they could find out what they were going to be, so Mr. Wilson wanted to go to Key West and talk to the President about it, which he did.

Mr. PUTNAM. I wanted to go along, but there was some misunderstanding

Mr. ARNALL. So, when he came back, he called Mr. Putnam and me over there—I do not think Mr. Feinsinger was present--and he said that he was going to settle the steel controversy and that he had determined the way to do it was to give the steel companies a price increase commensurate with the wage increase.

I listened. He said he told the steel companies that was what was going to happen. And I listened again, because I was naive enough to believe that the man who was supposed to be in charge of the price end of the deal would at least be consulted. I rather thought that no criticism. It was just my thinking. I was a little hurt about it. But, it was so fast, that I was slow in getting on my feet.

He said:

Now, I want to have a press conference in the morning and have Mr. Putnam and Mr. Feinsinger and you over here and we are going to announce to the press, that everything is all right, that we are going to settle the steel controversy by granting a wage and price increase.

Well, when I got home, the more I thought about it, the more upset I got about it, that I was not consulted in it, and the steel companies had been told that they were going to get a commensurate price increase, with no regard to the standards that we employ at all.

So, I called Charley that night and told him that I just could not go to any press conference where he was going to announce what was going to be done, not having discussed it with me, or even having brought it to my attention until it was a fait accompli; that I was not going to sit there and be gagged by whatever happened.

I do not believe in the Senate anybody casts your vote for you. That is your job, and I thought that was my job.

I called him and said, “I am not coming to the press conference.”

I then went out to Mr. Putnam's home that evening, because I was very upset about it. I did not see how I could keep a job over there stabilizing prices if there were no standards employed, or rules.

So, I talked with Mr. Putnam about it, and I found that Mr. Putnam had independently reached the same view I had, that that was not the thing to do.

Mr. PUTNAM. He found some of my staff gathered with me, discussing the same thing.

Mr. ARNALL. So, Mr. Putnam did not go to the conference the next day, nor did Mr. Feinsinger, so the press conference was called off.

I then went over to see Mr. Wilson, and I said, "Charley, I cannot go along with any such proposal as that, because in my judgment, it is not right. We have got to maintain the standards."

And Charley said, “Well, the President has told me to do this, and I am going to do it.”

And he said, “When the President gets back here, I want you to talk to him and I want Putnam to talk to him, and you will find that is what he wants. He does not want any strike or any trouble. He wants peace, and tranquillity. He says he has enough troubles and he does not want this trouble.'

So, the next day, the President got back and Mr. Putnam called for an appointment. I was not going to call him.

Mr. Putnam. I called before that, in fact.

Mr. ARNALL. And Mr. Putnam invited me to go. We got over there early and I told Mr. Putnam, as I recall it, “Roger, we ought to have Mr. Wilson here, so that there won't be any misunderstanding and everybody will understand each other."

So I think Mr. Putnam suggested that the President call Mr. Wilson to come over.

So Mr. Wilson came over. Mr. PUTNAM. That arrangement was made before we saw the President. We did not have any private words with the President before Mr. Wilson was called.

Mr. ARNALL. And we had a conference.

Now, it developed from that conference that there had been a misunderstanding. As a result of that misunderstanding

Senator ROBERTSON. Was it a friendly conference or a mean, nasty conference?

Mr. ARNALL. Oh, it was a pleasant conference, Senator.
Senator CAPEHART. What was the misunderstanding?

Mr. ARNALL. Well, that the steel people were not going to get a commensurate price increase unless they could show they were entitled to it.

Senator ROBERTSON. Who told Drew Pearson what happened?
Mr. PUTNAM. Whoever told him didn't tell the truth.

Senator ROBERTSON. He said it was a mean, nasty conference and that you cussed Charles Wilson out.

Mr. PUTNAM. Pearson wasn't there. That is all I can say.

Mr. ARNALL. Now Senator, I don't verify that report. I do verify it was a very congenial, pleasant conference. It developed there had been a misunderstanding and when we left there it was very obvious to me that Mr. Wilson was going to resign because he felt that there had been a misunderstanding.

Senator CAPEHART. Misunderstanding with whom?

Mr. ARNALL. Well, with everybody. Well, certainly the misunderstanding was as to whether or not he was going to grant a price increase to the steel people commensurate with the wage increase, without regard to whether they were entitled to it under the standards.

Senator CAPEHART. I thought you said Mr. Wilson visited the President at Key West and came back and said the President wanted him to settle the matter on the basis of wage increase and price increase; Mr. ARNALL. No; he said that he was going to settle it and that the President didn't want any controversy. He was having enough trouble and he didn't want any commotion about the steel mills.

Of course, I realized he was having trouble and I didn't want to cause any commotion about it if I could avoid it. On the other hand, I could not agree and do not now agree to giving the steel people a price increase unless they are entitled to it under the law and under our standards.

In any event, Mr. Wilson then resigned. Mr. Putnam asked him not to, I asked him not to, Mr. Feinsinger asked him not to, but he resigned.

Now, I had to get that in about the price business because it was

part of it.

Mr. FEINSINGER. I think the record should be corrected, Senator. You made a reference to a statement by Charlie Wilson about having the rug pulled out from under him. You used that in relation to wages.

Charlie never made any such claim on wages. He was never surprised, at any time.

Senator FREAR. You say Charles Wilson was never surprised at the recommendation of the Wage Stabilization Board, on increased wages?

Mr. FEINSINGER. That is right.

Senator FREAR. One more question, and this should be easy to answer, at least: Did both the industry and labor unions submit, or agree to the submission of the question of the union shop to the Wage Stabilization Board?

Mr. FEINSINGER. Yes, they submitted their evidence on it, just like every other issue. Nobody has ever challenged the jurisdiction of the Board. The industry never challenged the jurisdiction of the Board to recommend the union shop. Our industry members of the Board have never challenged the jurisdiction. They just disagree with the wisdom of doing it.

Senator FREAR. Referring to your pamphlet here, at the bottom of that page, the industry members "are unanimous that whatever may be the merits of the union shop, with regard to labor-management relations, they could be realized only after the parties to the contract enter into them of their own free choice without the pressure of Government intervention.

I would say the Wage Stabilization Board was a part of Government intervention.

Mr. FEINSINGER. That is correct, Senator, but we left it to the parties to agree or disagree on it.

Senator FREAR. Now, the union, if I remember, felt exactly opposite--that you should go ahead and talk about it.

Mr. FEINSINGER. They wanted us to recommend a full union shop right then and there. Senator FREAR. Will you permit me one more question?

Mr. Arnall, do you know what happened at Key West between the President and Mr. Wilson?

Mr. ARNALL. No, sir.
The CHAIRMAN. Senator Douglas.

Senator Douglas. I would like to straighten out these cost increases prior to July 26, 1951, which you said under the Capehart formula would give the industry an increase of something less than $3. Would that include the wage increases in the December 1950 agreement?

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