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Harbor, was that the 5 percent of the coal miners who did not belong to the union must join.
Well, that is the fact. That is how we got the union shop, and I suppose that was an arbitration.
Senator Moody. To that extent, then, that was a violation of the principle you stated a few minutes ago, was it not?
Mr. STEPJIENS. Violation of what?
Senator Moody. The principle you stated? You said you thought the establishment of a union shop was a violation of a principle of a man having a right to join a union or not join a union.
Mr. STEPIIENS. Of course it was a violation of the principle, but we were asked by the Persident, I believe, to arbitrate the question. Having agreed to arbitrate the question, we certainly were not going to welsh and say, “Well, we will not take the award of the board.
Senator Moody. I see, so that arbitration board's award, in effect, forced you to violate a principle; is that correct?
Mr. STEPHENS. That arbitration board's award forced us to do something which we thought was not proper, but we had agreed to go before the arbitration board; we did; we lived by the order.
Senator Moody. More recently, however, did you not negotiate a union shop with your subsidiary railroads?
Mr. STEPHENS. Yes, sir. I said that a little too quickly. You said subsidiary railroads. I know at the moment of one. I explained a little earlier that the Interstate Commerce Commission, I am told by our lawyers, has for years endeavored to get the railroads, which are subsidiaries of some of the steel companies, classified other than as common carriers and I am told that that is not the right thing to do. Therefore, I have been given instructions, strict instructions, starting back to 10 years ago when I got this job, to have nothing to do with the railroads. That is No. 1.
No. 2 is this, that despite our principles, if we were part of an industry in which substantially the prevailing pattern was the union shop, I should think that that factor would warrant our careful consideration as to whether we alone should, I believe, as I said, hold our finger in the dike.
Now, the Union Railroad—that is the name of the railroad, and a very appropriate name for a union shop too-the Union Railroad negotiated the union shop last year because the two major railroads with which it connected and does business, so far as getting into our plants are concerned, the New York Central and the Baltimore & Ohio negotiated the union shop shortly after the Railway Labor Act was modified early last year to permit the union shop.
Senator Moody. So then, principle or no principle, under certain circumstances you would and have accepted the union shop. Is that correct?
Mr. STEPHENS. Under certain circumstances we have had to modify and bow and avoid our principle.
Senator Moody. I am very glad that Senator Bricker read from this document which the OPS put out because I have been studying or trying to study the economics of this matter since it started, trying to get what the facts of it really are. The thing that has impressed me more than anything else is complete divergence of statements on the part of not only the company and the union, which is perhaps natural in a dispute of this sort, but also on the part of the Government which
at least should be a fair and impartial umpire. I assume in this case you contend that it has not been, and I am not conceding that, but I am merely saying that it should be a fair and impartial umpire and I think we might agree on that point.
Perhaps I should reread the phrase to which we were referring to make the record clear at this point. This part of this document called The People's Stake, which is put out by the Office of Price Administration, attributing these figures to the Iron and Steel Institute says that:
Without falling below the excess-profits-tax bracket they That is, the major steel companies
could absorb a cost increase of over $13 a ton, more than twice the amount of the proposed wage-cost increase for the 18 months of the contract. You will remember, I am sure, Mr. Stephens, the same general approach was taken by the President of the United States in his presentation over the radio, which was later refuted for the industry by Mr. Randall.
I have felt that that is the core of the case. I do not think the facts have been laid before this committee, or before any tribunal in the United States, publicly at least, in the way that the public can untangle those two contradictory statements. It seems to me that if Mr. Arnall, Governor Arnall, is right about it, we have one picture, and if Governor Arnall is wrong about it, we have a completely different picture.
I take exception to the statement of the Senator from Illinois who says it is a deliberate falsehood because he voted yesterday against a proposal I made to bring Admiral Moreell and Mr. Arnall together to see who was right about this thing.
I do not know what the facts are. I have my ideas on what they may be, but I would like to ask you, sir, whether you do not think, in view of the great importance of this thing to the country, the fact that you feel that principles are being violated, and there is a terrible situation where the President felt called upon to seize the plants, where we may have a steel strike in the face of requirements of our national defense picture, whether you do not think it might not be constructive to have individuals making such conflicting statements as that confronted at the same time before the committee so that we can have a cross-questioning of the two gentlemen?
There may not be a falsehood. There may be just a mistake here. What would you think about that, Mr. Stephens? Mr. STEPHENS. About having a meeting? Senator Moody. Having a panel of gentlemen, you or Admiral Moreell or both of you representing the industry, whoever the union wanted to have come in, and Governor Arnall or whoever would represent the Government, to find out and iron out the differences here which are categoric statements of fact or alleged fact which are completely different.
I am not an expert on steel costs. I do not know what the situation is and neither does any member of this committee in my judgment.
I would like to near Admiral Moreell's comment and then hear what Governor Arnall has to say in connection with that.
Mr. STEPHENS. I would like to first say that I know nothing about Governor Arnall. I have had nothing to do with the profit end of this. I have had all I can do with negotiations, and more, apparently, I am way behind on my reading, even the annual report of the United States Steel Corp.
I think you should determine the facts, but I think if you tried to determine the facts by the method which I understand you suggested, you would have a Donny Brook Fair. I think the way to determiné the facts is to decide what facts you want, get them on paper so they are isolated and take time to read them relatively, one in relation to the other, and get the facts in that way.
I do not think you will ever get facts by having a meeting such as you have suggested.
Why do I draw that conclusion? Well, you may be able to run such a meeting in a way that would be temperate, but
Senator Moody. I have great confidence in the Senator from Arkansas myself.
Mr. STEPHENS. We have tried for 10 years, during which it has been my job, to try to get agreement with the union on what the facts are.
You just cannot do it. You just cannot do it. You cannot agree on anything.
I would hate to be a part of an approach of that kind which has as its objective, a perfectly salutary objective, to get the facts.
Senator Moody. As I said this morning when the admiral was on the stand, I feel that all here are gentlemen. I do not think anyone would be here who was not. While there might be some heated exchange, of course, this whole series of hearings which has been conducted behind closed doors with the testimony given out the next day, has merely resulted in a series of ex parte statements which are in utter conflict.
I do not think that we have yet gotten to the core of this thing and I do not see how we can unless we have an opportunity for the spokesmen for the various sides to refute the arguments.
Mr. STEPHENS. I think one way of getting facts is to request evi. dence which you feel will lead you to that conclusion and then draw your own conclusion from the evidence presented, sir.
Senator Moody. That is right.
Senator FULBRIGHT. Senator Moody, would you mind my interrupting, I have an appointment downtown and I have to leave. I will have to turn the meeting over to Senator Frear and you may continue. I think your time is about up.
Senator Moody. I will conclude my questioning at this point.
Senator FULBRIGHT. Before I leave, there is one matter that came up
that I would be curious to know about. Mr. Stephens, you mentioned the two offers you made, I think, on April 3d, and the following Monday. You described them generally. Would you, if you can, reduce those to the same tangible values that the Wage Stabilization Board recommendations have been reduced to?
In other words, you mentioned some cents plus fringe benefits but you did not estimate what that would cost the steel companies. Mr. STEPHENS. I think I can give you that from my memory. The first proposal, which was the 9 cents per hour, plus the fringes? Senator FULBRIGHT. What did they amount to?
Mr. STEPHENS. They cost the companies 16.04 cents an hour. The second proposal which increased the wage from 9 to 1212, would cost the companies I believe 20.1 cents an hour.
Senator FULBRIGHT. That last offer was approximately 5 cents under what the Wage Stabilization Board recommended.
Mr. STEPHENS. It is 6 cents under the 26.4 cents which I believe was the figure used, but the cost of the 26.4 to the companies would be 29.8 or roughly 30 cents.
Senator FULBRIGHT. Didn't this last cost you mentioned of 20 cents include everything, pensions, social security, and everything?
Mr. STEPHENS. Yes, sir. You see if we increase wage rates, the cost to the companies on social-security taxes is higher, up to the $3,600 level.
Senator FULBRIGHT. It would be approximately 20 as against 30 cents as far as the costs go. What is the same figure comparable to the 26 cents, leaving out the social security and the pensions ? I am trying to get relative values there.
Mr. STEPHENS. I think the factor we used, sir, in the case to increase the cost was a ratio of 114, but I would have to get that for you.
Senator FULBRIGHT. I wanted to determine what yours was in comparision to what the Wage Stabilization Board recommended, and on the same basis.
Mr. STEPHENS. I think we understand that and rather than tell you something now which might not be strictly accurate, I would prefer to have it calculated.
Senator FULBRIGHT. Kindly reduce it to a common denominator there.
(The information requested follows:) In answer to Senator Fulbright's questions regarding the relationship between the companies' offer and the Board's recommendations, there is presented below a comparison of the companies' offer of 1212 cents per hour wage increase and certain other concessions with a similar evaluation of the Wage Stabilization Board's recommendations. It should be noted that the final figure in each column reflects the full increases in employment costs that would result from the companies' offer and the Board's recommendations, including the compounding effects of overtime and holiday premium, vacation pay, payroll taxes, and pensions.
1 The difference between the amounts in the 2 columns is due to the influence of different wage increases on the hourly rates at which holidays would be paid.
Senator FULBRIGHT. I will turn the meeting over to Senator Frear.
Senator FREAR (presiding). Senator Moody, did you receive an answer from Mr. Stephens to your last question?
Senator Moody. Does Mr. Stephens feel he answered the question to his own satisfaction?
Mr. STEPHENS. Yes; I feel I have given you my view.
Senator DIRKSEN. I noticed in Mr. Feinsinger's statement, which is a part of the record, he had there to say—you are familiar with this, of course? There is an industry comment and a labor comment and the chairman's comment in connection with this pamphlet of findings.
He said, "The situation clearly called for unusually extensive bargaining. Instead, there was no bargaining."
Did industry endeavor to bargain!
Mr. STEPHENS I tried at the end of my prepared statement this morning to so indicate.
Senator DIRKSEN. How about the labor organizations, did they bargain?
Mr. STEPHENS. Labor would have bargained on their own terms. I suppose that could have applied to both if you want to be completely objective. Labor would not give any indication that they would reduce their demands. There was nothing to grab hold of.
Senator DIRKSEN. He says also in his statement, “The Board's recommendations therefore do not set a new pattern or start another round of increases or fringe adjustments for anyone generally.”
Your exhibits this morning clearly refuted that statement, I assume Mr. STEPHENS. That is correct, sir. Senator DIRKSEN. He says also: The Board has recommended that the parties incorporate a union-shop provision in their new contract. The public members joined in this recommendation after they found themselves unable to secure a majority in favor of their own proposal to return the matter to the parties for collective bargaining, with the Board to consider the issue further, should the parties fail to agree.
Mr. STEPHENS. Based upon what I have been informed from the industry members of the Board it was not quite as simple as that, Senator Dirksen. I have been told by the industry members of the Board that on the night of Thursday, March 29, the public members proposed that the matter of the union shop be referred to the parties for bargaining, but with two provisos. First, that the Board retain jurisdiction and second that with the return to the parties, there be an accompanying opinion which I have been told was essentially the same as the opinion which Mr. Feinsinger released when the recommendations were finally released, which opinion cannot be regarded as other than a fairly fulsome endorsement of the union shop.
That was, I have been told, why the opinion of the Board—those were the reasons why the industry members of the Board would not have voted to refer the matter to the parties for bargaining.
Senator DIRKSEN. Now in the dissenting statement of the industry members there appears this paragraph:
The recommendations as a whole reflect a conscious and admitted effort to recommend terms of settlement which the union would accept.