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What about that word "admitted" there? Who do you think admitted the effort ?
Mr. STEPHENS. I am sorry, Senator Dirksen; I cannot answer that.
Senator DIRKSEN. There is one other statement in the industry members' opinion which goes as follows:
As a result of these recommendations "under union pressure" the Board's regulations which were initially formulated as ceilings on wage increases, permissible without Board approval, have now become the floors for even higher increases in dispute cases.
I see they use the term there "union pressure."
Mr. STEPHENS. It cannot be spelled out by me but it has been spelled out by Mr. John C. Bane, who was an industry member of the panel, and his views are contained in the transcript of the Senate Labor and Public Welfare Committee hearing on the 23d of this month, I believe.
Senator DIRKSEN. Now in the labor opinion there appears this statement:
By the Presidential certification to the Board, the Board was mandated to make recommendations on all issues in dispute. This the Board has failed to do by a vote of the public and industry members of the Board.
Do you think they were under a mandate to pass on every issue in dispute which involved some 100 separate claims, as I understand ?
Mr. STEPHENS. I could not say that the Board was mandated for two reasons. First, because they did not pass on all issues in the dispute. They returned some of the issues to the parties. Some of the issues which were of extreme importance to the companies having to do with the efficient management of the business, they made no recommendations, despite the trouble and travail which we have had under those provisions for years. They returned them to the parties.
Now as to the other phase of the mandate, I do not know enough about—it is my personal opinion that title V of the Defense Production Act had not been satisfied in the establishment of the Board by the Executive order, and I do not know how that ties in with the question of mandates, so I better not talk further on it.
Senator BRICKER. Have we a copy of the President's order to the Board here?
Senator DIRKSEN. I doubt very much whether it is contained in here. There is a general history of how the thing came about, but the text of the Executive order is not carried in this recommendation.
I think it might be well to have it inserted in the hearings, very likely. I think perhaps both Executive orders, the Board as first created when it was a Board of 9 and the subsequent order by which it was made a Board of 18.
Senator BRICKER. I think the staff can get them.
Senator FREAR. The staff can supply the reporter with those Executive orders.
Senator DIRKSEN. I think very properly to provide a complete text here that those ought to be included in the record.
Senator BRICKER. Then also if there are any special instructions from the President in regard to this individual case, which I do not know about.
Senator DIRKSEN. That is all, Mr. Chairman. (The information requested will be found in the appendix, p. 2441.)
Senator FREAR. At this point I would like to offer on behalf of Senator Sparkman, at the point where he had the colloquy regarding the union shop, the percentage of union members in the steel industry, he was unable to locate it at that time and I would like to insert this. I would be glad to have Mr. Stephens inspect it before it goes
Senator BRICKER. Are the figures from the Labor Department!
Senator FREAR. As a matter of fact, it is already a part of the record but it is to go in to supplement his colloquy. (See p. 2113.)
Mr. STEPHENS. I do not believe I need to read the whole thing. I see it deals with a number of contracts, which is completely different from dealing with employees.
Senator Frear. Yes; that is right.
Senator BRICKER. Is there any comment you wish to make upon the exhibits I submitted to you? If there is no comment at this time I ask that you might be permitted to produce a written statement in regard to them which might become a part of the record.
Mr. STEPHENS. I would very much appreciate it if I might have opportunity to review them before commenting.
Senator BRICKER. Thank you very much.
It has been called to my attention by Mr. Stringfield of the United States Steel Co. that Mr. Arnall in calculating the earnings per ton of steel, has included in his figures subsidiary operations. Yesterday in making my statement I said our profits include not only the profits from making and rolling and finishing our tonnage of steel in our three steel plants, they also include the return from our investments in our raw materials operations, our warehouses, our fabricating business, our oil well supply stores, our transportation facilites and other smaller operations, none of which is directly a part of our basic steelmaking, rolling and finishing operations. They are important parts of our total business, but to add their profits to those of our three steel plants and express the answer in terms of tons of steel shipped is closely misleading.
Now I find in the tabulation from the American Iron and Steel Institute, that 27 percent of the man-hours included in the total earnings for the year of the steel companies are accounted for by operations which are not steel making.
Senator FREAR. Is it your opinion that the statement made by Governor Arnall that was referred to by Senator Bricker, that the steel profits are so high that the industry could absorb more than twice the cost of proposed wage increase without reducing earnings low enough to take them out of the excess profits tax bracket, that in your operations of Jones & Laughlin, that your excess profits tax is based on your steel industry only, or do you file a combined report?
Mr. MOREELL. We file a consolidated report.
Senator BRICKER. Is there any element of profit in your inventory value there?
Mr. MOREELL. No, sir.
Senator FREAR. Mr. Stephens, have you any statement you would like to make at this time?
Mr. STEPHENS. Nothing other than to thank the committee for its courtesy, sir.
Senator FREAR. On behalf of the committee and other members of the committee, Mr. Stephens, I think that we have certainly been delighted to have you and members of the steel industry down here to give us the opportunity to question you. I think it certainly has enlightened our knowledge of the subject and we are very grateful to you for the time that you have spent and the members of the steel industry who have come with you.
Mr. STEPHENS. Thank you, sir.
Senator FREAR. Are there any other representatives of the steel industry who have any statements or who wish to be heard at this time?
Mr. STEPHENS. No, sir.
Senator FREAR. The admiral and yourself were the spokesmen for the industry.
Mr. STEPHENS. Yes, sir.
Senator FREAR. Do any members of the committee have anything else?
Senator BRICKER. Only that Mr. Stephens insert his comments in the record with regard to the two exhibits I referred to and send me a copy of it. (See p. 2277.)
Mr. STEPHENS. Yes.
In order to do as requested by Senator Bricker, may we take this chart to study?
Senator BRICKER. Do that and return it to the committee. It is the only copy I think which the committee has. Mr. STEPHENS. Thank
sir. Senator FREAR. The committee will recess at this time and reconvene at the call of the chairman.
(Whereupon, at 4:25 p. m., the committee recessed to reconvene at the call of the chairman.)
(Reference to the following will be found on p. 1962.)
STAFF SUMMARY OF STEEL WAGE DISPUTE This data and pertinent information with respect to the positions taken by the union, the steel companies, the Wage Stabilization Board, and the Office of Price Stabilization in the steel negotiations was compiled by the staff of the committee from the parties concerned and various other sources.
The contract between the steel producers and the steelworkers of America expired December 31, 1951. The union demands presented as 22 issues really involved over 100 different issues. When the case reached WSB not a single one of the union or employee demands had been settled.
There were certain courses of action open to the President. These were:
1. Seek an injunction under the national emergency" provisions of title II of the Labor-Management Relations (Taft-Hartley Act of 1947). This procedure insures continued production for 8ò days with a board of inquiry investigation without authority to make recommendations for settlement.
2. Appoint a special board to make recommendations as in the 1949 dispute. This report would have to be approved by WSB. This would mean delay and uncertainty.
3. Refer the dispute to WSB under Executive Order 10233 to "investigate and inquire into the issues in dispute and promptly report to the President thereon with its recommendations to the parties as to a fair and equitable term of settlement.” This was the course chosen by the President.
THE WAGE ISSUES
1. The steelworkers received their last wage increase totaling 16 cents (of which 342 cents were for job increments) on December 1, 1950.
2. The steelworkers requested & wage rate increase totaling 1872 cents (which includes 3/4 cents for job increments) to (a) catch up to the increase in the cost of living; (6) catch up to what other major industries had received under the Board's policies or rulings; (c) compensate for the admitted increase in productivity in the steel industry. The demands covered a 12-month period but indications were that a longer contract would be considered.
3. If there had been an escalator clause in the December 1950 contract, the costof-living increase based on the October 15, 1950 (latest available at 1950 negotiations), would have entitled the union to 16 cents per hour increase; the November 15, 1950, index would have produced 15 cents; an interpolated index of December 1, 1950, would have produced 1372 cents increase.
4. The steel companies made no counteroffer, however, the companies claimed that under the WSB regulations, GWR 6 (the 10 percent "catch-up” formula) and GWR 8 (the cost-of-living formula) the increase would be 9 cents, using the consumer price index (old series) January 15, 1951, to January 15, 1952.
5. WSB recommended an average wage rate increase of 1334 cents (exclusive of fringes) for the year 1952, 1242 cents effective January 1, 1952, and an additional 2effective July 1, 1952.
For the first 6 months of 1953, WSB recommended a total increase of 1744 cents wage increase or an average for the 18 months period totaling 15 cents increase (exclusive of fringes).
6. Since the date of the last steel contract, the following adjustments have been made in other leading industries.
Cents per hour Automobile..
17 Meat packing
17. 3 Rubber..
13 Farm machinery (International Harvester).
17 Electrical equipment.
15. 5 Shipbuilding -
17 to 22 Nonferrous metal..
15 to 16