compiled data from the parties concerned and various other sources. It will, without objection, be inserted in the appendix to the record. (The information referred to will be found in the appendix, p. 2297.) I want to make this statement before we proceed. I have seen some publicity in the paper as to what this committee was going to do and what it was not going to do and what I was doing and what Senator Robertson was doing behind the scenes.

You are in charge of price control, Governor Arnall. Have I ever asked you to raise any prices?

Mr. ARNALL. Mr. Chairman, you have never made a request to me to raise prices. Your statement to me has always been that it is my job to do my duty to try to stabilize prices and you would always support me when you believed I was doing my duty.

You have never asked preferential treatment for anyone and I do not believe you ever would.

The CHAIRMAN. I thank you for that. I have no other statement except to say that I believe it is my duty on this committee to pass proper legislation to help the American people and stop inflation.

Mr. ARNALL. Let me say the reply I make to your question would be the same reply I would make to Senator Robertson if he asked me that.

Neither of you has tried to bring about price increases so far as I know and I do not believe you would.

Mr. PUTNAM. May I add to that and say that neither you nor Senator Robertson have ever approached me on any such subject. The CHAIRMAN. I have had three or four meetings with you in the last month or so.

Mr. PUTNAM. And you have never mentioned any special price favors for anyone.

The CHAIRMAN. Senator Capehart, you may go ahead.

Senator CAPEHART. Before I start, you can say equally the same thing about myself.

Mr. ARNALL. Correct.

Mr. PUTNAM. Absolutely.

Mr. ARNALL. And every member of this committee.

Mr. PUTNAM. I was only mentioning the names of the ones I had seen in the press.

Senator CAPEHART. My first question is this:

I would like to know whether or not there is proper coordination between you, Mr. Putnam and Mr. Arnall and Mr. Feinsinger, and Mr. Wilson, or that office of his. My first question is, Did you advise Mr. Feinsinger, or the Board-this question is directed to Mr. Putnam and Mr. Arnall-that in your opinion the wage increase that they were about ready to recommend was too high or that they recommended that you would have to permit some sort of price increase in steel?

STATEMENTS OF ROGER PUTNAM, ADMINISTRATOR, ECONOMIC STABILIZATION AGENCY, ELLIS G. ARNALL, DIRECTOR, OFFICE OF PRICE STABILIZATION, AND NATHAN FEINSINGER, CHAIRMAN, WAGE STABILIZATION BOARD

Mr. PUTNAM. You are directing that to me primarily, I gather? Senator CAPEHART. Yes.

Mr. PUTNAM. Let me say this: The first part of your question was whether there was the proper coordination and cooperation. I think my two associates on either hand may have things to say on that subject as the hearings go on, but I want to say I think we are a very closely knit team-considering that we are all Presidential appointees, all confirmed by the Senate-and we work very well together.

I think that there are certain things inherent in a tripartite Wage Stabilization Board, in which I firmly believe, that make for some independence of thought, but I think there is good coordination and complete understanding between us. I will ask my colleagues to confirm that, or you may ask them as time goes on.

Now, as to your second question, there was continuing consultation between Mr. Feinsinger and me all during the time of the deliberation of the Board on the award for steel. That is not under me, you understand. In its dispute-settling function the Board is directly under the President and they do not have to come through me, but I think the fact that we were in constant touch shows the cooperation that we had.

Senator CAPEHART. You say they do not have to consult with you? Mr. PUTNAM. Not on the dispute-settling functions. They are working directly for the President on that.

Senator CAPEHART. They do not have to take into consideration whether in your opinion a price increase would be necessary?

Mr. PUTNAM. The dispute settling is completely a separate function of the Board. Their general regulations must be approved by me but the dispute settling activity is a completely separate function given to the Board by the President.

Senator CAPEHART. Did you at any time ever advise the Board or the chairman that in your opinion the wage increase that they were about ready to recommend was too high and that it would necessitate an increase in the price of steel and other things?

Mr. PUTNAM. We were constantly in communication with one another as to the possible effect on prices, and as to the possible effect on wages. I will say this, because I want to be completely frank with this committee: At the time the decision was made-and Mr. Feinsinger will bear me out I felt that it was high. I have studied a lot more facts since then and I can bring some to you that have changed my mind. I did not have all the facts at that time.

Senator CAPEHART. Then at one time you did advise the Board that you thought their recommendation was too much?

Mr. PUTNAM. I discussed that with them just beforehand and I felt the figures they were discussing were high.

Senator CAPEHART. You have since changed your mind?

Mr. PUTNAM. I have since had more information and I can show you that at any time the committee wants to see it.

Senator CAPEHART. Is that your position, Mr. Arnall?

Mr. ARNALL. Well, number one, so far as I recall I never was consulted about what WSB was going to do. I am not the coordinating man. That is Mr. Putnam. I am kind of a dog's tail-after everything else has happened it gets over into my shop. I do not ever recall having discussed it except informally from time to time when there were meetings, and we told Mr. Putnam, Mr. Wilson, and Mr. Feinsinger-my people did-our policies and what we could and could not do. But I never did interfere with Mr. Feinsinger's job nor with Mr. Putnam's.

Senator CAPEHART. Did you at any time say to them that in your opinion the recommendations that they were about ready to make or had made were, in your opinion, too much?

Mr. ARNALL. I did not know anything about the recommendations until after they were made.

Senator CAPEHART. Then, as the price stabilizer, you were not consulted by the Board?

Mr. ARNALL. By WSB?
Senator CAPEHART. Yes.
Mr. ARNALL. No.

Senator CAPEHART. And you were not consulted with regard to what effect this increase might have on the economy?

Mr. ARNALL. They had been told what we could and could not do under our price policies. Informally I told Dr. Feinsinger that.

Mr. PUTNAM. May I just add to that that I was the coordinator there. My economist and your economist, Mr. Arnall, had gone over very carefully what the steel figures showed, and I am sure Dr. Feinsinger has seen those figures as well.

The CHAIRMAN. You told me that you could not coordinate because you did not have the final say.

Mr. PUTNAM. I said I could not order what this Board should recommend, and I do not think anybody should. I think a tripartite board is the best way to settle labor disputes.

I could not order them, but on the other hand, I think there was complete coordination and an understanding of what the effects would be.

Senator CAPEHART. Then the fact is that we really have two separate and distinct boards with one having absolutely no authority over the other; one having the authority to recommend any kind and type and amount of wage increase that they might care to under formulas that have been previously established, subject, of course, to change. We have two independent organizations, one dealing with prices and another dealing with wages?

Mr. PUTNAM. No, they are not independent because they both coordinate through me.

The dispute settling recommendations of this Board must be within its own rules and the rules have had to be approved by my office.

There is an interchange of information, sometimes direct, but also through me constantly, and I will say we have had a habit of dining together relatively often to make sure that we do coordinate our activities.

Senator FULBRIGHT. Mr. Putnam, is there anything to this limitation or not? If you are going to follow a procedure, I think it should

be followed. I think the Senator's questions are appropriate, of

course.

You seem to have the feeling that the dispute settling is a function apart and unrelated to stabilization of wages and prices.

Mr. PUTNAM. Oh, no, sir. I did not mean to say that if I did. Senator FULBRIGHT. I believe you said you had no jurisdiction over dispute settling. Is that correct?

Mr. PUTNAM. I have no jurisdiction over it, but on the other hand, the Executive order under which they operate as a disputes board says that the recommendations they make must be consistent with stabilization policy. They formulate the stabilization policies and I must approve them as far as wages are concerned.

Senator FULBRIGHT. I understand you did not agree with them in the beginning. You have since become a convert, but in the beginning you did not agree?

Mr. PUTNAM. In the beginning I said that I felt it was high, but that was before I had completely seen all the facts of the thing. I prepared some myself-not facts they have given me, but things I have dug up myself since then.

Senator FULBRIGHT. You know the Congress and this committee went to great trouble to try to keep wages and prices tied together. When one went up, the other should also. That was the philosophy, of the original bill.

There had been criticism, governor, that in the last war they tried to hold prices down and keep wages up, particularly near the end, of the war. You recall that, do you not? Do you not recall the effort made to take them together? They had difficulty, I agree, but I think that was the spirit of the law, that we should not attempt, to hold prices down and let wages go up because it would not work. Would you not consider that the spirit of the law?

Mr. ARNALL. Assuming wages and prices are in proper relationship when you start, what you say is true. But, you see, the fallacy in what you say is that it is based on the assumption that they are in a proper, stabilized relationship, whereas actually either prices may be too low, in which event we raise them under our standards with no reference to wages; or, suppose wages are too low, they raise them under their standards with no reference to prices. It is not axiomatic that every time you have a price increase you have a wage increase, nor is it axiomatic that every time you have a wage increase you have a price increase.

Senator FULBRIGHT. There is no rule of thumb, I agree with that, There is no automatic way for this to go into effect, but I mean the two should be considered.

Mr. ARNALL. There should be some proper relationship, of course, Senator FULBRIGHT. To give one group authority to recommend wages without regard to prices would violate that clause.

Mr. PUTNAM. I do not think so, sir. That is where I come into the middle of it, to coordinate the two because they are separate. The recommendations for settling disputes must be within wage stabilization policies and the wage stabilization policies are set up by this tripartite board subject to my approval. Prices are governed by Governor Arnall and my job is to coordinate the two and see that they are kept reasonably in balance. And I think we have done pretty well on that. I think the record will show it.

Senator FULBRIGHT. I have one other question. I would like Mr. Feinsinger to tell us what was the main consideration for recommending the amount of the wage increase?

What I have in mind is, was it because they were paid too little under general conditions, or because of their relation to some other group of wage earners? What was the controlling factor in the recommendation you did make?

Mr. FEINSINGER. We made two types of money adjustments. You are not interested in the nonmoney adjustments, I take it, but just the money adjustments?

Senator FULBRIGHT. Do you mean fringe benefits?

Mr. FEINSINGER. The money adjustments are two in kind; adjustments in rate of pay and adjustments in what we call fringe benefits, such as vacation, holidays, and the like.

Senator FULBRIGHT. Those two, as distinguished from the union shop; is that what you mean?

Mr. FEINSINGER. Seniority, and things of that sort, Senator.

Now, Congress told us to stabilize all forms of compensation and that includes fringes as well as rates of pay. That was quite right, because either can add to business costs and add to purchasing power.

Therefore, we have regulations which have been duly approved by the Administrator which apply to increases in rates of pay, and so-called fringe adjustments.

Let me take the fringe adjustments first, because they are easier. Incidentally, the companies themselves have made no objection to the Board's recommendations on the fringe adjustments except one of them, time and a quarter for Sunday pay as such.

We have a regulation dealing with fringe adjustments which has been duly approved by the Administrator which provides that if an employer wants to make adjustments in his vacations, holidays, and so forth, or agrees with the Union to do it, that will bring his practice up to the prevailing practice in the industry or area, he may do so upon petition. Where you are dealing with a national industry like steel, everybody on our Board, including our industry members, agree that the proper comparison is with other major American industries. Had we considered fringes on an area basis, as also provided under our regulation, there are very few American communities, particularly those in which steel mills are located, which do not already have such fringe benefits.

There is not a single adjustment that we have recommended which puts the steelworkers ahead of workers in other industries. In most respects, it leaves them still behind. I will illustrate.

On vacations, they have 1 week after 1 year of service; 2 after 5, and 3 after 25. The steel workers asked for many important changes in the vacation period. We recommended only one change.

We reduced the requirement for 3 weeks vacation from 25 years to 15 years, which is certainly well within the practice in American industry, gentlemen.

I can be specific if you like, but I do not think that statement needs corroboration.

Secondly, with respect to holidays, the industry had six holidays named in their contract, but they did not pay anything when the men did not work on a holiday. When they did work on the holidays, they paid time and one-half.