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him. I have been looking through this excerpt that was in the United States News, looking for the statement where he elaborated on that. I do not know whether you read the whole transcript or not but he explained it in this way: He said that if this whole thing goes into effect, that naturally others are coming in and will ask for increased wages, and others will ask for higher prices. He estimated that when we went the whole spiral, that cost would be $300. Of course, he was not attributing the cost wholly to steel and iron. It seems to me that in your statement you do, and I believe that in all fairness we ought to have something stated on that, that it was an estimate.

Mr. MOREELL. He said it would be compounded by virtue of the fact that the price increases will run through the whole economy.

Senator SPARKMAN. That is right. Not just through steel and iron. Mr. MOREELL. I say it will be compounded by virtue of the fact that the wage increases will run through the whole economy. That is where the costs arise, Senator. They do not arise from the 80,000,000 tons of finished steel which we sold last year, or 79,000,000. They arise from the fact that once this wage pattern is established, as Mr. Stephens will show you in his presentation, it is bound to go through all of industry. It always has.

Senator SPARKMAN. I realize that steel has usually led the way, but according to most of the evidence that has been presented to us so far, Mr. Brubaker and those with him steel is not leading the way.

Mr. MOREELL. Mr. Stephens is going to demonstrate that it is leading the way, Senator, or it will be, if, as and when this increase is granted. Senator SPARKMAN. That is all, Mr. Chairman.

Senator FULBRIGHT. Are there further questions?

Senator BRICKER. I will reserve any further questions in order to get Mr. Stephens' testimony in.

Senator FULBRIGHT. Senator Frear-

Senator FREAR. You are aware of the fact that the unions know

of the salaries paid by your company. Are your officers responsible to the Wage Stabilization Board for increases in salaries?

Mr. MOREELL. The Wage Stabilization Board, yes, sir. We have to clear with them.

Senator FREAR. Do the steel companies know the salary of Mr. Philip Murray?

Mr. MOREELL. No, sir; I do not know it, and I am not interested because I think it has nothing to do with this controversy.

Senator FREAR. Would you assume that they would have to go before the Wage Stabilization Board for increases in their salaries? Mr. MOREELL. The Salary Stabilization Board, yes, Senator. I am sure that they do.

Well, I do not know. I am just guessing, because I have never had any interest in Mr. Murray's salary. I assume that he is probably underpaid.

Senator FREAR. I think some of them take an interest in the salaries of the management of steel.

Mr. MOREELL. I am sure they do because they have mentioned it very frequently.

Senator FULBRIGHT. Are there any further questions?

Senator SCHOEPPEL. Senator Fulbright, I want to say this: I have no further questions but I am caught in a dilemma here. I happen to be a member of the calendar committee and we call the calendar start

ing in just a few minutes on the Senate floor. I do not know what the pleasure of the Chairman is with reference to Mr. Stephens.

Senator FULBRIGHT. We are very anxious to get his testimony in this record if we can.

Senator SCHOEPPEL. Do you mean beginning right now?

I am going to have to ask then that I be excused because I am compelled to be present for that calendar call. I would like to have permission to leave some questions for one of my colleagues to ask.

Senator CAPEHART. Mr. Chairman, could we have an understanding that we will go to 12:30 and come back at 2:30?

Senator FULBRIGHT. Why can't we go until 1 o'clock and come back at 2:30?

Senator MOODY. I would like to ask Admiral Moreell to furnish for the record how much per ton of steel is spent for raw materials and the price increases which you assumed occur in each of the major components in order to make the cost increase that you have calculated. Mr. MOREELL. I will submit that for the record.

(The information requested follows:)

In answer to the Senator's question, I would like to quote from my statement to the Steel Panel of the Wage Stabilization Board (Jones & Laughlin exhibit No. 1) in New York on February 9, 1952.

We know that a wage increase in the steel industry is soon followed by an increase in the cost of materials, supplies, and services we buy which at least equals the direct cost of the wage increase. Union spokesmen have challenged the validity of this statement. To prove to you that this actually happens we have made a special study of labor and material costs at our three steel plants for the period following the wage increases of April 1947 and December 1950. This is what we found. In comparing March 1947 with April 1948, when no price controls were in effect, salaries and wages increases $0.8 million while the cost of purchased materials consumed increased $1.9 million. In comparing November 1950 with November 1951, when price controls were in effect, salaries and wages increased $1.1 million and the cost of purchased materials consumed increased $1.2 million. (See table 2 attached.)

TABLE 2.-Jones & Laughlin Steel Corp.-cost increases-purchased material versus wages and salaries-3 steel plants

COMPARISON OF MARCH 1947 WITH APRIL 1948

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Senator SPARKMAN. Mr. Chairman, I must ask to be excused. I will take a copy of Mr. Stephens' statement with me and read it. Senator FULBRIGHT. Mr. Stephens will you go ahead?

STATEMENT OF JOHN A. STEPHENS, VICE PRESIDENT, INDUSTRIAL RELATIONS, UNITED STATES STEEL CO.

Mr. STEPHENS. I assume I am supposed to supply a lot of information. I hope you are not disappointed.

May I say first in response to your question to the Admiral, there were introduced before the Special Panel appointed by the Wage Stabilization Board which heard both parties, a number of exhibits. I shall be happy to provide a clean copy of what is identified as company's exhibit 2, which gives the statement of the cost of the demands susceptible to determination for the industry as represented before the panel. We can produce that, sir, and I am sure it shows the method of calculation. I do not recall it in detail now. I have not looked at it since last February.

Senator FULBRIGHT. We would want that included.

Does that give the basic data from which you make the conclusions as to the cost?

Mr. STEPHENS. Yes, sir, it does. This is not a clean copy. That is a marked-up copy that I have been carrying around. We can provide copies.

Senator CAPEHART. I think it ought to be in the record.

Senator FULBRIGHT. I think it might be included as one of the exhibits.

Senator CAPEHART. Mr. Chairman, it is really what you have been asking for and I think it ought to go in the record.

Senator FULBRIGHT. Is that for the industry or for your company?

Mr. STEPHENS. That is for the industry as the industry was before the panel, Mr. Chairman.

Senator FULBRIGHT. I think it might be helpful if we had an example of your individual company for comparison. I am telling you this because they have challenged the basis of calculation.

Mr. STEPHENS. We will be glad to do that.

Senator FULBRIGHT. I do not know how we can resolve that difference of opinion about it, unless we have your figures, and they will have to show how they are not correct. That is the only way I know to get at it.

Senator CAPEHART. Mr. Chairman, I think this ought to go into the record because this is really what has been asked for two or three times this morning.

For example, here is how they arrive at the cost of double time on Sunday.

Senator FULBRIGHT. The only thought I had was a practical one. If they will give us a number of copies we will have them. It might be more manageable that way.

Senator CAPEHART. Maybe the chairman does not know it, but this record we are making here, while it is an executive session, when the record is printed that is being handed out to all the press-and I understand there are hundreds and hundreds of copies being asked for-I would like to make a motion that this whole document be put into the record.

Senator FULBRIGHT. I have no objection to it.

Senator CAPEHART. It covers just what we are looking for.

Senator FULBRIGHT. It is 16 pages. Very well, we will put it in the record.

(The information referred to will be found in the appendix, p. 2463.). Mr. STEPHENS. On the first sheet of my statement I merely point out my name and why I am here, and then I go on to say that I chairmaned the first collective-bargaining conference between United States Steel and the union, and thereafter was intimately associated with the dispute at all phases, serving as chairman of the bargaining conference for six companies in New York and meeting subsequently with Messrs. Feinsinger and Bullen in New York and in Washington with them plus Dr. Steelman.

At the top of the second sheet I say what I hope to be able to present to you, namely, that my thesis is divided into three parts-collective bargaining; second, the Wage Stabilization Board, its composition, rules, and functions; and finally, whether the Board's recommendations can in fact be regarded as asserted by Mr. Feinsinger and the President of the United States, as merely permitting workers to "catch up"-steelworkers to catch up-with workers in other industries.

In the next paragraph I offer, of course, to answer questions.

I might respectfully suggest that there are many questions which may be in your minds which will perhaps be covered in my statement and the time might be better conserved for the questions to come at the end, but that is entirely up to you gentlemen, of course.

Under the caption "Collective bargaining," I state that Mr. Murray and others stated there was no collective bargaining with respect to a renewal agreement and that such was because of a premeditated effort of steel-company managements to prevent such bargaining.

In United States Steel's first conference with the union on November 27, 1951, and many times thereafter in many forums Mr. Murray charged that United States Steel intended from the beginning not to bargain but to see to it that a dispute be developed and be referred to the Wage Stabilization Board.

In intended substantiation of this charge he quoted frequently from a November 15, 1951, public address by Mr. B. F. Fairless, president of United States Steel. The portion quoted was:

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.

What are the facts? In my opinion, they can be derived from the following: In the first place, Mr. Murray did not, I believe, in using the above quotation from Mr. Fairless' address, at any time quote the very next sentence which followed. That sentence was:

It is a question which involves the basic anti-inflation program of our Government and one which will clearly affect our entire economy.

In further recognition of the fact and in an effort to avoid the consequences implicit to our economy in substantial concessions to the steel union, Mr. Fairless, on December 21, 1951, proposed that the union abandon any attempt to get the increase in steel prices to which it might be entitled. This proposal was at various times characterized by the union as "phoney," I believe was the term.

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