There has been a good deal of talk about catching up. Mr. Stephens, in his presentation, is going to cover that in detail, so I will not cover it, but I will say this: I talked to Mr. Putnam about this doubling-up of the cost and Mr. Putnam said, "Why, you are not going to have that because I am Price Comptroller, I am Economic Stabilizer, and I am going to prevent that." It was not 5 days later before we were notified that the freight costs are going up on the 2d of May. Now, Mr. Putnam did not prevent that, and still Governor Arnall comes before the committee and he says, "This price increase of steel that they are asking for would cost every family $300 a year," which, of course, is utterly ridiculous. How did he get it? He compounded it in exactly the same way Mr. Putnam said he was going to prevent. Senator MOODY. And just the way you compounded it? Mr. MOREELL. No, sir, we compounded what our experience showed. Now, even if Mr. Arnall compounded it the way we did, Senator, the actual cost per family, assuming that all of the steel is distributed to families and not to any of the bachelors and other individuals who have no families, it would cost $24 a year per family. So if they doubled up it would mean $48 a year per family. Senator MOODY. Admiral, this is one of the reasons I suggested to the committee that it would be a constructive thing to do to have you or whoever was speaking for the steel industry here at the same time Mr. Arnall was here. Some of the members of the committee felt it would turn into a cat-and-dog fight. I do not believe so. I think we are all gentlemen in this picture. I would like to hear what some of those answers might be. You see, we are going to have to piece them together at a distance here. Mr. MOREELL. May I add one thing, Senator? You were talking about $13 a ton inside the excess-profits bracket. I would like to say this and I am baring my soul, as my president told me yesterdaythe president of our company said, "Let's bare our soul to this committee." We are just barely inside the excess-profits bracket for the first quarter of this calendar year. Senator MOODY. I realize your company is not in as good position as some of the other ones in the industry. Senator FULBRIGHT. Senator Schoeppel. Senator SCHOEPPEL. What you want, of course, is labor peace, for the industry to work out this thing and get under way and produce? Mr. MOREELL. That is right, sir. Senator SCHOEPPEL. Under the competitive system this country was generally built on. Do you prefer a 1-year contract with the unions since you have to have these contracts, or a longer-term contract than 1 year? Mr. MOREELL. I would prefer a longer contract, Senator. If you have that, there ought to be some means of considering the wage question. That is reopening it for wages only and not all the multitudinous clauses which go into the contract and which affect the operation of the business. Senator SCHOEPPEL. That is one of the things I was very glad to hear you talk about. It has been advocated here and it was advocated by the Board-I think Mr. Feinsinger brought it out--that they got more per hour in wages by way of an increase because they got a longer-term contract. Is it generally good business to pay higher wages per hour for a longer-term contract despite the fact that the price index upon which these are all supposed to be based now might go off, prices go down? Mr. MOREELL. No, sir. I do not believe that an industry such as ours should go in for a long-term contract, particularly a long-term contract with automatic increases for productivity, whether or not that productivity is achieved. Senator SCHOEPPEL. Do you believe in incentive payments, additional pay for incentive, or increased benefits that you might get back by greater productivity? Mr. MOREELL. Yes, sir. Senator SCHOEPPEL. Generally speaking, does that work out pretty satisfactorily? Mr. MOREELL. Well, we have had some trouble with it and we probably will continue to have trouble, but as a basic principle I believe in incentives. Senator SCHOEPPEL. I want to ask you one more question. What is your judgment if the 26-cent increase that has been recommended by the Stabilization Board is allowed and becomes general for all industry? Will that start a spiral of additional wage demands all the way down the line; will it break this wage pattern? Some of the experts who have been before us said it would not. Frankly, I do not believe it. Mr. MOREELL. Senator, I am convinced that if this 26-cent package, which will cost us 30 cents, is put into effect, there will be a competition among labor-union leaders to achieve the same increase and we are on the road. We are on the spiral of increased wages. Senator FULBRIGHT. Senator Dirksen. Senator DIRKSEN. Admiral Moreell, if there had been no Wage Stabilization Board, what in your judgment would have happened in this conflict? Mr. MOREELL. It is my judgment if there had been no Wage Stabilization Board, if there had been no price-control board, we would have reached agreement and we would have reached agreement some time ago. I tried to estimate what kind of agreement we would have reached, and it is only a guess, but we talked about it a good deal in our shop and we thought that it would be somewhere around 1212 cents an hour. Senator DIRKSEN. If we have to have a Wage Stabilization Board, do you think there would be any virtue in having the number of public members exceed the aggregate of industry and labor members and have them confirmed by the Senate? Mr. MOREELL. I believe they should all be public members and that they should be confirmed by the Senate. Senator DIRKSEN. All public members? Mr. MOREELL. Yes. Senator DIRKSEN. Do you think the Taft-Hartley Act could still solve this controversy in its present status? Mr. MOREELL. Yes, sir, 96315-52-pt. 4- -18 Senator DIRKSEN. That is on the basis that you get a price increase, of course. Mr. MOREELL, A commensurate price increase; a compensating price increase; yes, sir. Now, I would like to qualify that answer, Senator. I would say that with the prospect that the problem will ultimately be put into the hands of Congress there would be a great incentive for both the companies and the union to settle this controversy under the mechanism of the Taft-Hartley Act. Senator DIRKSEN. If they had agreed finally and put into effect a union shop as the Wage Stabilization Board recommends, is it your estimation that that gives the wage forces a recommendation not too acceptable in some lines of industry? Mr. MOREELL. I do. I think the imposition of the union shop or the closed shop on industry by force of government is an iniquitous thing. Senator DIRKSEN. Do you think the public members of the Board were biased. Mr. MOREELL. I would have to refer to my conversations with Mr. Bane who was an industry member of the steel panel and who made a statement to me that in his opinion the public members of the Wage Stabilization Board were biased. That statement was later published in the papers. Senator DIRKSEN. A statement that was inserted in the hearings when Mr. Wilson was before us, by Senator Capehart, coming from Hill & Knowlton in Washington, D. C., and attributing that to a conversation with Mr. Bane said: No industry member of the Board or the panel had ever heard of this proposal * Meaning the wage increase. In spite of that, the wage recommendation, like all the others in the case, was approved at once, without discussion, by the votes of the public and labor members of the Board. The statement said that the industry members and 1 hour's notice of wage recommendations. Insofar as you know, is that a statement of fact? Mr. MOREELL. That is a statement Mr. Bane made to me; yes, sir. Senator DIRKSEN. There has been various testimony on the cost of this package to the industry. What is your answer to it? Mr. MOREELL. The ultimate cost, Senator, after the increase of January 1, 1953, and the 14 times for Sunday would be 30 cents an hour. Senator DIRKSEN. Is there any reason why the research group, with the union, could not have figured the cost of this increase per hour? Mr. MOREELL. There is no reason why it could not have been figured. Senator DIRKSEN. We did not get any definite answer to it and I wondered if there was any particular reason why they, with their competence and background, could not figure it. There was no conclusive figure on the subject. Mr. MOREELL. It could have been figured. Senator DIRKSEN. Was there anywhere along the line in this discussion and controversy where the companies actually demanded $12 a ton? Mr. MOREELL. No, sir; we never demanded $12 a ton. I am sure of that. Senator DIRKSEN. What would be the losses of the industry if this continued, or what are its losses up to the present time in a general way? What are the losses, ascertained losses and damage? Mr. MOREELL. As I stated before, Senator, we lost approximatelyby "we" I mean the industry-approximately 900,000 tons of steel just in cooling off and heating up again or getting back into production. Senator DIRKSEN. So it does constitute a loss to the industry? Senator DIRKSEN. How do you expect to recapture that loss unless you are privileged to go into the Court of Claims? Mr. MOREELL. Of course, that loss was started before we were seized. We began to cool off about 3 days before the seizure so that whether or not the loss can be attributed to the seizure is a matter that would have to be decided by the lawyers. Senator DIRKSEN. Is there any reason why the industry and the union cannot sit down in good faith and bargain collectively and settle this matter, in your judgment? Mr. MOREELL. I think if Government got out of it it would be fine and there would be no reason. Senator DIRKSEN. What is the present supply of steel in the hands of fabricators, warehouses, and producers and is the supply so short that there is substance to this rather general allegation made that the defense program is being critically impaired and endangered? Mr. MOREELL. Well, there has been a good deal of talk about that, Senator. We find that the supply of steel is not easy, but at the same time there has been no difliculty on the part of anyone who is doing defense work in getting all the steel that they need. Senator DIRKSEN. That is all, Mr. Chairman. Senator FULBRIGHT. Mr. Elliott, I wanted to make it clear about the request a moment ago regarding the basis for estimating these costs, this material to be put in. We would particularly like to know how you estimated the cost of paid holidays and the Sunday and Saturday requests, and we would like it for a representative period. The reason I am saying this is that Mr. Brubaker the other day said that they had no figures by which they could figure what this would cost. That was only within the knowledge of the companies. It is a point in controversy and we want the basis by which you figure it. Mr. ELLIOTT. We can definitely give it to you for our companies. Senator FULBRIGHT. We would like it for a representative period for purposes of comparison. If you could say 1947 and 1948 and maybe 1950. What we are trying to get at are some basic facts here on these points upon which differences of opinion have arisen. For example, they questioned the estimate of the cost of their original total demands. They said they were grossly overstated by the companies, so we would like to bring to issue, if we can, those differences. We would also like your estimates on the cost and the allocation of the cost of this recommendation of the Wage Stabilization Board. for your company. We expect, of course, to ask the same of Mr. Stephens, but we would like in the record that information for purposes of study and comparison so if possible we can get at what the real difference of opinion was. Not only for the industry but at least for some representative companies. Mr. MOREELL. Very well, sir. Senator FULBRIGHT. We would like your own company. Mr. STEPHENS. I understand, Mr. Chairman, you want us to file this for our company. Senator FULBRIGHT. That is right. If you have it, we would like some other companies-not all of them, but some representative companies, if you have them, or perhaps Mr. Stephens, if this is in his particular line, he can file it. Mr. ELLIOTT. We do not have them. Senator FULBRIGHT. I will ask Mr. Stephens about that. Senator FULBRIGHT. You never made an offer to the union at any particular time. Mr. ELLIOTT. We made two offers. In New York we made an offer of 9 cents an hour plus certain fringes. Senator FULBRIGHT. When was that? Mr. ELLIOTT. That was April 3 when six companies were bargaining together. Senator FULBRIGHT. Nine cents an hour? Mr. ELLIOTT. I believe Mr. Stephens will probably bring that out in detail, that we made two offers. Senator FULBRIGHT. What was the other offer? Mr. ELLIOTT. It was the same offer with a wage rate increase from 9 cents an hour to 122 cents an hour. Senator FULBRIGHT. What was the date of that? Mr. ELLIOTT. As I recall it, it was April 7. Senator FULBRIGHT. Why did you not make any offer prior to that first offer? What was the reason why you could not get even to the point of making an offer? Mr. ELLIOTT. We did not get any response to our demands or our requests to get some of the points we considered very important considered by the union. Senator FULBRIGHT. Such as what? Mr. ELLIOTT. Management rights and so forth, and Mr. Stephens will go into that in detail. Senator FULBRIGHT. Senator Capehart. Senator CAPEHART. I am not trying to tell you how to get this information but it is very simple. All you need do is take the amount you paid on Saturdays in 1950 and on Sundays. The Saturday payroll would be half as much as it was, Sunday would be double. For example, if you paid out in Sunday wages in 1950, $100 million, under this agreement you will be paying out $200 million and only getting the same amount of production. Mr. MOREELL. We will get that information, Senator. We will have no difficulty with that. (See p. 2212.) Senator FULBRIGHT. Senator Sparkman, do you have anything further? Senator SPARKMAN. Admiral, going back to this statement Mr. Arnall made about $300 increase in the cost of living per family, and your statement that it would be 24 dollars a year, as a matter of fact, I do not care about arguing it, but when Mr. Arnall made that statement that it would be $300, somebody on the committee challenged |