between Mr. Putnam and Mr. Feinsinger, and you, Governor Arnall, with all respect to each of you.

The thing that worries me is the inflationary tendency and there hasn't been a unified effort to stop it. I know you can go to the President, of course, but that doesn't solve anything.

Senator IVES. How are they going to write a new formula if their right hand doesn't know what their left hand is doing? That is one of your main troubles; right there.

The CHAIRMAN. That is my great worry. My great worry has been that the President of the United States has more to do than to look after an argument between this person and the other person, or between steel industry and labor.

We are in an international crisis. If we had something there where we wouldn't have to go to the President, I imagine the President would appreciate it.

Mr. ARNALL. I think he would like that very much.

Senator BENTON. Are you familiar with the pamphlet, These Are the Facts in the Steel Controversy? (See p. 2428.)

Mr. FEINSINGER. I am, Senator.

Senator BENTON. Who published that?

Mr. FEINSINGER. The steel companies in the wage case.

Senator BENTON. Are you willing to express your views on that pamphlet?

Mr. FEINSINGER. I will be glad to do it; this is a short document, and it won't take me more than a couple of minutes to say what Í have to say about it.

The first page is descriptive. The second page is headed "You can't raise wages with money you have spent for taxes." You have gone into that.

The next page is headed "Steel profits are moderate and are declining." The governor has gone into that.

The next page is interesting. It is headed "Catching up formula for inflation," and the next page is headed "Since when have loaded dice been fair and reasonable?"

The next is called "1952 series of the yellow dog contract," and the last one "Steel workers have been fairly treated."

The next is descriptive, and so is the last.

I am not going to comment on the page headed "Since when have loaded dice been fair and reasonable," because that charges dictation by Phil Murray and relies on the "official dissent" of the WSB. It winds up by saying "Is that sort of procedure fair and reasonable?" That is a series of epithets, and I don't intend to argue with epithets. As to the page headed "Catching up formula for inflation," that is a very interesting page. Everything on it, I have no doubt, is absolutely correct. The only difficulty with it is that it is irrelevant. This is the page referred to by my good friend Senator Capehart in this morning's discussion. The only trouble with it is it talks in terms of average hourly earnings. Now, the rules of the game of this Government, and this Board, require the use of wage rate in determining wage movements and not hourly earnings, which takes into account a great many things besides the wage rate, such as premium payments for overtime hours worked, shifts in the composition of the worker force-for example, concentration at high-wage jobs instead

of low-wage jobs-a little fellow making potato mashers out in Indiana. has a defense contract, and has to use skilled people and pays more

money.

Also increased output in industries such as steel where incentive systems are operating.

The Government never has done it, and shouldn't use anything but the wage rate. This committee itself, in reporting out the original law in 1950, said:

Your committee also recognized that regulations issued pursuant to the act would deal primarily with wage rates and rates of payment rather than the total amounts of compensation paid to individuals. Thus, for example, it is intended that hourly rates be stabilized, but that the regulations permit fluctuations in weekly wages as hours of work change.

The average hourly earnings are used in the pamphlet as the indicator for wage movements.

Now, the facts are these: If you take wage rates-and there this goes back to a question asked by Senator Moody-these are the movements. Since either January 1950 or Korea, take any base date you want, the last wage increase in steel was December 1950. It was 16 cents. No wage increase up to the date of the Board's recommendations.

Now, General Motors, since March 1950, including a 2-cent decline because of a decline in the cost of living back in March 1950-General Motors since March 1950 has had a net increase of 27 cents per hour and in

Senator CAPEHART. How much has steel had during that same period since March? The 16 cents?

Mr. FEINSINGER. That is right. I say steel has had nothing since December.

Senator CAPEHART. How about General Motors?

Mr. FEINSINGER. General Motors since March 1950 has had a net increase of 27 cents. It has 4 cents coming in May this year under the improvement factor and it has 4 cents coming in May of 1953 while the steel contract will still be buttoned up-27 and 4 are 31 and a second 4 are 35.

Ford Motor Co. has had 28 cents, and they have the improvement factor.

Swift & Co. in meat packing has had 28.3.

International Harvester, farm equipment, has had a total of 30. General Electric, Charley Wilson's own company, has had 25.5 cents, and they are negotiating for another 2 or 3 under the wage formula. United States Rubber has had 24.5 cents.

Senator MOODY. Were any price increases involved in any of those, Mr. Feinsinger?

Mr. FEINSINGER. I wouldn't know.

Mr. ARNALL. No price increases except what they were entitled to under our standards, and under the Capehart amendment. Senator CAPEHART. He is talking about March 1950.

The CHAIRMAN. The price of farm machinery has been increased. Senator CAPEHART. He is talking about March 1950, and there have been a lot of price increases since March 1950.

The CHAIRMAN. Prices to the farm industry have been raised.

Mr. ARNALL. I am sure you are right about that, but if so, Senator, it has been done under the Capehart amendment or under some of our standards we apply to everyone. We haven't made an exception. Senator CAPEHART. I want to keep the record straight. We are talking about March 1950.

Now, there have been a lot of price increases since March 1950 that the Capehart amendment and you and I and others had nothing to do with. Isn't that right?

Mr. ARNALL. I am sure you are right, because I couldn't go back that far.

Senator CAPEHART. You are 21 years of age, you ought to be able to go back.

up.

Mr. ARNALL. I think that prices have gone up.

Senator CAPEHART. You know they have gone up; don't you?
Mr. ARNALL. Yes.

Senator CAPEHART. You are trying to evade the question.
Mr. ARNALL. No; I am not.

Senator CAPEHART. You know since March 1950 prices have gone

Mr. ARNALL. I am answering to this question, only; as far as this agency is concerned we have increased prices only under our standards. Senator CAPEHART. Do you mean since January 26, 1951; is that right?

Mr. ARNALL. Yes, sir.

Senator CAPEHART. But prior to that time, you had no control or did not control prices and they did go up, materially; isn't that right? Mr. ARNALL. Yes, sir.

Mr. FEINSINGER. We can take January 1951 as the base date, if you want. You don't get very different figures.

Chrysler Corporation automobiles, 17 cents, with an annual improvement factor. You could take meat packing, Ford automobile, copper, you can take most of the basic industries and you will find that since January 1951-and that puts behind the December 1950 steel increase that these industries have still received as much as, or more than, our recommendations provide for steel.

Senator CAPEHART. Let me say this: I think steelworkers are entitled to a wage increase and I have repeatedly said so, but I have not had sufficient facts-we are beginning to get them now-as to how much this should have been.

I am sure they are entitled to some increase.

The CHAIRMAN. I feel the same way about it, and I don't want to be misunderstood, but there was a period in there between June and January 1951 that you speak of, where a lot of people took advantage. of the situation and raised prices.

Mr. FEINSINGER. That is right, sir.

The CHAIRMAN. There were considerable raises in farm machinery prices, and all the way down the line.

Mr. FEINSINGER. Now, the last page of the statement

The CHAIRMAN. I say this with due respect for my friend from Michigan, but when you had radios and television sets and things like that, they don't affect the average person as much as steel does when the price goes up.

Senator MOODY. That is right.

The CHAIRMAN. That affects farm machinery, highways, bridges and things of that kind. It is far more effective than anything that we might do for any other industry.

Mr. FEINSINGER. If I may merely complete this analysis

The CHAIRMAN. That is the reason why they want raises and that is the reason, perhaps, they have been raised. I have never questioned that the steelworkers were not entitled to some increase.

Mr. ARNALL. You just want the facts.

The CHAIRMAN. I just want the facts.

Mr. FEINSINGER. I don't think there is a member of this committee who, if he sat through the weeks and weeks of our hearings and discussions, would have differed one mill from what the public members thought was right.

Now, the last page of this

The CHAIRMAN. Now, the only thing that you have done wrong, on the public side, is to discuss the union shop, in my opinion.

Mr. FEINSINGER. It is interesting to note on the chart entitled "Steel Workers Have Been Fairly Treated," the companies revert to cents per hour increases, which is right, instead of increases in earnings, because there they are talking about adjustments since 1945, where perhaps the shoe may be on the other foot.

If we go back to 1945, why not go back to 1900 or 1800 for that matter? The base period for stabilization purposes is either January 15, 1950, or as in the Capehart amendment, June 1950, or January 15, 1951, or the date of the last contract.

Those are the only things that make sense.

The CHAIRMAN. Suppose we extend the Capehart amendment to Ferhaps June 1952?

Mr. FEINSINGER. I wouldn't care to take my position on that, Senator. I don't know enough about it.

The CHAIRMAN. Perhaps Mr. Arnall could speak to that.

Senator BENTON. Do you feel your proceedings have in any way held back collective bargaining in the steel industry, sir?

Mr. FEINSINGER. On the contrary. On the contrary. I want to call your attention, Senator, to a statement of Ben Fairless, who is a valuable and very decent fellow, published in the New York Times on November 15, 1951. This is just before the opening of the negotiations in steel. He says:

Whether our workers are to get a raise and how much it will be if they do is a matter which probably cannot be determined by collective bargaining, and will apparently have to be decided finally in Washington. It is a question which involves the basic anti-inflation program of our Government and one which will clearly affect our entire economy.

Now, there is a man saying, before the negotiations commenced, "I don't believe this thing can be settled by collective bargaining. The Government is going to have to settle it."

Now, the Government did settle it, or tried to. We are the agency of the Government which at the moment is the only agency set up to make recommendations in this kind of a situation, and we did it and they don't like it. So how did we interfere with bargaining?

Senator BENTON. Did Charles Wilson know what recommendation your Board was going to make?

Mr. FEINSINGER. I can say definitely, yes. Hours before the Board went into final sessions, I met with Mr. Wilson and Mr. Put

nam.

Not because I was legally bound to do it, because I wasn't; but because all of the stabilization officials of this Government work together, or try to work together. I discussed with Mr. Wilson and Mr. Putnam what the public members were going to try to get a majority vote on.

He said: "Do the best you can.' I don't say he agreed with them, but he knew what they were. We went over there and succeeded in getting a majority agreement on a less expensive contract than the one I told him about.

Senator BENTON. Now, that brings me to another point that was discussed this morning about the union shop. That subject tends to be torn right out of context in some of the current discussions. In all your long background in this field, isn't it fair to say that a question such as that, such as the union shop, is part of a package that is negotiated out and is not an isolated item by itself?

In other words, by the inclusion of the union-shop suggestion, don't you affect some other basic recommendations in the final proposal? Mr. FEINSINGER. It is certainly so in collective bargaining.

Senator BENTON. It is so in collective bargaining; is it likewise so in the consideration of your Board?

Mr. FEINSINGER. Yes; it is.

Senator BENTON. In other words, if we didn't have the union-shop recommendation here, you might have still more money involved? Mr. FEINSINGER. I think probably not, but there are a great many other issues in the case, and don't lose sight of that.

Senator BENTON. Or perhaps the union would be willing to accept the recommendation without the union shop, on the basis of the percentage of wage increases you had recommended?

Mr. FEINSINGER. I am just wondering what would happen, public relationswise, if the majority had been public and industry-and it nearly was-and labor had been in dissent and the union was refusing to accept the recommendations, whether we would have had all this heat.

Let me tell you what we turned down in this case.

Senator BENTON. You are asking just a rhetorical question, are you not?

Mr. FEINSINGER. Well, more than rhetorical. Let me tell you what we turned down in this case.

You gentlemen know, some of you, that the issue dearest to the heart of the steelworkers over the last few years has been the guaranteed annual wage. Do you know we rejected that fat, with a little window trimming which doesn't amount to anything? Severance pay, a very important issue to them. We turned that down. And the rest of these things we might as well have turned down. We sent them back to the parties, and said "We wash our hands of them; you go ahead and try to settle them:

"Demotion allowance, reporting allowance; absenteeism; application of shift differentials; application of vacation; premium and overtime pay."

Lots of others.

Senator BENTON. And the union shop comes in in place of a lot of these things, in theory, that otherwise might have been more difficult to turn down.

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