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Mr. MOREELL. In the tabulation below is shown the effect of the WSB wage package on our net income. We are also showing the increase in the reduced net income which would result from various price increases.

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1 Full effect of WSB package not felt until July 1, 1953 (price increases are assumed to be effective May 1).

Mr. MOREELL. Those are the facts, gentlemen. I will agree that our earnings have been good in recent years when compared with some of the years in the past. We can all be thankful that they were because they laid the foundation for the present important expansion program. However, those earnings were and are now inadequate when compared to earnings of other industries with which we must compete for the investor's dollar.

I have shown that we need adequate earnings to complete the emergency, expansion program, to repay the huge financial commitments we incurred in meeting the Nation's call for more steel, and to maintain our facilities in modern, competitive condition.

The steel industry is big and many people believe its size alone gives it strength. Nothing can be farther from the truth. Failure to earn enough to maintain financial strength would result in such weakness that the industry could no longer do the constructive and expanding job which is expected of it and which is essential for the economy of this country. A strong, dynamic steel industry developing under individual initiative is and should continue to be a bulwark of strength to our industrial life and our national defense.

Our company's earnings are not excessive or evil, but are the foundation of the prosperity and health necessary for the good of all.

We believe that the management of Jones & Laughlin has an obligation to our shareholders, our employees, our customers, and the Nation to keep this company strong and healthy. We believe in fair wages and salaries to our employees, fair prices to our customers, and fair dividends to our shareholders. In the long run, we will all go up or come down together. No group can profit at the expense of any other group for any length of time. 'If the stability of this company is to be maintained, all groups must have fair treatment. We will exert every effort to see that they get it.

If I were called upon to summarize the foregoing, I would say that the steel industry, as exemplified by Jones & Laughlin, faces a very serious problem. It must work out its destiny in the light of extremely heavy financial burdens which it has assumed at the request of the United States Government. In order to do this, it is essential that it have freedom of action. If its wages, prices, and the distribution of its products are controlled by Federal agencies, there will result, at best, a very difficult period and, at worst, a serious threat to the survival of the industry under private enterprise.

The CHAIRMAN. We appreciate your coming down here. We are sorry we had to delay hearing you. We will look for you tomorrow morning at 10:30.

Mr. MOREELL. Thank you, sir. I will be very glad to be here. The CHAIRMAN. The committee will stand in recess until 10:30.

(Whereupon, at 5:30 p. m., the committee recessed to reconvene at 10:30 a. m., Thursday, May 1, 1952.)

DEFENSE PRODUCTION ACT AMENDMENTS OF 1952

THURSDAY, MAY 1, 1952

b.c.

UNITED STATES SEXATE,
BANKING AND CURRENCY COMMITTEE,

Washington, D.C. The committee met, pursuant to adjournment, at 10:30 a. m. in room 301, Senate Office Building, Washington, D. C., Senator Burnet R. Maybank (chairman) presiding.

Present: Senators Maybank, Fulbright, Sparkman, Frear, Moody, Capehart, Dirksen, Bricker, Ives, and Schoeppel. The CHAIRMAN. The meeting will come to order.

I have called the meeting to order promptly because, as I stated yesterday, I made arrangements with Admiral Cochran last week to be with him this morning in the Appropriations Committee and he has canceled all his engagements to come down here to discuss the budget for the Maritime Commission.

Senator Fulbright was good enough to say that he would preside. I would like to ask you one or two questions for the record before I go over there.

I do not have much time and I do not believe anybody will object if I go ahead.

I want to ask you if you believe in collective bargaining?
Mr. MOREELL. I did not understand?
The CHAIRMAN. Do you believe in collective bargaining?
Mr. MOREELL. I do believe in collective bargaining; yes, sir.

The CHAIRMAN. Do you believe that the Defense Production Act interferes with collective bargaining?

Mr. MOREELL. Insofar as the Defense Production Act provides for the control of wages and prices, I do believe that it interferes with collective bargaining; yes.

The CHAIRMAN. Other witnesses who have appeared here have described it as a restraint.

Mr. MOREELL. That is right, sir. That is exactly my view.

It is quite obvious that if a union feels that by carrying its case to the Government it can obtain something more, it obtains all that it can from the industry, and then uses that as a platform from which to move upward.

The CHAIRMAN. This is a rather difficult question, but what do you think would have happened if there had been no control law and the dispute had been satisfactorily settled by collective bargaining, which you state you believe in, insofar as the price of steel is concerned?

Mr. MOREELL. If we had no control law, I believe we would have long since arrived at a settlement of this dispute, Mr. Chairman.

The CHAIRMAN. Do you think it would have materially increased the price of steel?

I said "materially."

Mr. MOREELL. Materially? No, sir. Not materially, percentagewise.

The CHAIRMAN. Would you care to estimate how much?

Mr. MOREELL. I would say, as a guess I am trying to remember now what we estimated would be the settling terms if we were left free to bargain.

I would say it would be about 3 to 312 percent increase in the price of steel.

The CHAIRMAN. How much a ton, would that be?

Mr. MOREELL. It would vary with the product. I would say about $4 to $4.50 a ton.

The CHAIRMAN. Do you think there is any legislation this committee could pass insofar as the Defense Production Act is concerned, which would be helpful-under the labor disputes section in this particular act?

Mr. MOREELL. My view has been consistent right along that settling of labor disputes should be taken out of the hands of Government.

The CHAIRMAN. When you were here yesterday, the circuit court had not acted. Now the circuit court has acted. By Friday, we may have another change.

Do you believe that under the Taft-Hartley Act, if invoked at this late date, there would be a better possibility of settling this dispute, or do you think it is too late, now?

Mr. MOREELL. No, sir; I do not think it is too late, Mr. Chairman, because there is a very important element of the Taft-Hartley Act which has been entirely overlooked, I believe, or overlooked by most people, and that is the opportunity for the men themselves to register in the secret ballot their views on the last offer of the companies.

That has not been provided for in the steelworkers union's postponement of the strike.

The CHAIRMAN. Then you believe it might be possible to get this settled if the President would use the Taft-Hartley Act properly!

Mr. MORREELL. Yes, sir; I do.

The CHAIRMAN. Of course, it is needless for me to ask you about the seizure because I am sure I know your answer.

I was very much disappointed when it took place and very much disappointed that the Taft-Hartley law was not used and collective bargaining given a chance.

Do you believe that the Wage Stabilization Board used powers under the Production Act they did not have, that rightly belonged with the National Labor Relations Board ?

Mr. MOREELL. I did not understand that question.

The CHAIRMAN. Do you believe that the Wage Stabilization Board had authority under the Defense Production Act to do what they did?

Mr. MOREELL. No, sir.

The CHAIRMAN. Say, for instance, a union shop, which in my judgment is the business of the NLRB?

Mr. MOREELL. No, sir. The imposition of the union shop on the industry, as recommended by the Wage Stabilization Board, had nothing to do with stabilization.

The CHAIRMAN. I am speaking purely of the Defense Production Act. I am not speaking about legislation now being considered.

Mr. MOREELL. That is right.
The CHAIRMAN. Thank you.
I will turn the meeting over to Senator Fulbright.
If I can get back, I certainly will do so.
Mr. MOREELL. Thank you, Mr. Chairman.

Senator, may I make a few remarks at this point? I would like to call particular attention of the committee to some of the data which are contained in that part of my statement which I did no have a chance to read yesterday, but which I think are the meat of the coconut, as far as my statement is concerned.

If the Senators will turn to page 2202

Senator FREAR. Mr. Chairman, if the Admiral decides to complete his statement from that, I move that he be permitted to do it.

Senator FULBRIGHT (presiding). I would like to discuss a question about procedure.

It seems to me we took a long time yesterday. I know the junior members get a little impatient. I have observed how other committees operate when they have a good many witnesses.

I like to see a limitation of time on the initial round of questions so that every member has an opportunity to at least ask a few questions and then on the second round, we will have much more time. At least that gives the junior members an opportunity to ask questions.

I would like to know what the committee thinks about that?

Senator DIRKSEN. I do not get impatient, Mr. Chairman, I just get plain mad, because some members of this committee seem to try to get only one point of view presented with considerable vigor.

I do not apologize for what I said to Senator Moody yesterday.

Senator FULBRIGHT. I would suggest that the initial round of questions be limited to 5 minutes. Then, we could return to open questions.

Senator CAPEHART. It would be perfectly agreeable to me to give those gentlemen over there all the time they wish in this morning's session.

I suggest somebody telephone them and tell them we are holding hearings and have them come in and then when they get finished, I do not think it will take me more than 5 or 10 minutes.

I suggest somebody telephone them.

Senator FULBRIGHT. What do you think about that procedure? Do you not think it would save a great deal of time? It would at least give every member one opportunity.

I suggest when we start questioning the admiral, each one limit his questions to 5 minutes.

Senator CAPEHART. I do not see how we can use your system unless they are here.

In other words, if we proceed here now, and then they dash in here, it might be difficult.

Senator FULBRIGHT. The admiral is going to proceed with a further statement.

What do you think about that? Senator FREAR. Personally, Mr. Chairman, I think every member of the committee should be permitted to answer questions and when

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