r
TIONAL POLICY COMMITTEE
NATIONAL PRESS BUILDING
WASHINGTON 4, D. C.
HD
6471
N3
A3
Preliminary Draft
Not for Publication
WORKING PRINCIPLES
FOR LABOR-MANAGEMENT RELATIONS
Third Series
Reports of Four Meetings
Monopoly and Mobility
Chicago, February 12, 1947
Action at the Plant and Community Level
Cleveland, February 17, 1947
Labor's Rights and Duties
Memphis, February 20, 1947
Proposals for Labor Legislation
Birmingham, March 1, 1947
April 8, 1947

Last November, the NPC invited consideration, by cross section groups
in the major areas of the country, of working principles for labor-management
relations in an economy where the basic industries are fully organized.
Previous summaries in this series covered meetings in New York City,
Philadelphia, Cleveland, Minneapolis, Denver. This draft reports conver-
sations in Chicago, Cleveland, Memphis, Birmingham. Subsequent issues
will report on further meetings in some of these centers, and Boston, Little
Rock, the West Coast.
UNIVERSITY OF MICHIGAN
GENERAL LIBRARY
MONOPOLY AND MOBILITY
Attendance at a discussion in Chicago
February 12, 1947
Chairman: Theodore Schultz
Lyle Cooper, economist, United Packing House Workers of America
Oscar Day, economist, Wilson and Company
Corwin Edwards, economist, Northwestern University
Stanley P. Farwell, president, Business Research Corporation
Frederick Harbison, executive officer, industrial relations center,
University of Chicago
Charles O. Hardy, economist, Chicago Association of Commerce
David D. Irwin, executive, The Pure Oil Company
Helen Hill Miller, executive director, National Policy Committee
Lauren Soth, editorial writer, Des Moines Register & Tribune
Burgess Snyder, editor, Gary Post Tribune
Leon Werch, staff member, U.S. Employment Service
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024d-20
Monopoly and Mobility
(On February 12, 1946, the NPC held a meeting in Chicago as
part of its cross-country series of discussions of labor-management
relations. In recognition of Chicago's position at the center of a
major agricultural area, it was planned to give some attention to the
impact on the agricultural segment of the economy of whatever basis
for labor-management agreements is currently reached.
The majority of those attending were economists from the neighboring
universities, including specialists in agricultural economics, labor-
management relations, and corporate structure; from a business men's
association; from a meat packing firm; from a meat packing workers'
union; in addition there were members from industry, the press, govern-
ment administration.)
12
Opening the meeting, the chairman urged that the discussion address itself to long-term
considerations, not to momentary circumstances, or what the Supreme Court may do on a given
Monday. What are the important elements in high policy for labor relations in the United States?
What are the lasting principles which should be kept in mind through day-to-day economic action?
Pattern-Setting Contracts
Economist #1: Whatever is passed as labor-legislation at this session of Congress will affect
labor problems only in a superficial way. An analysis of collective bargaining and labor rela-
tions shows why this is so.
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For many years this country has not had a fully free and competitive economy; over a con-
siderable period the economy was dominated by large business organizations; more recently
concentrations of power have occurred in large unions.
Between these two, certain pattern-setting relations have developed: U.S. Steel and the
Steel Workers Union; General Motors and the U.A.W.; the mine operators and John L. Lewis. A
large part of the country's environment of labor relations is made in these power centers. The
decisions reached there create the general economic weather, to which lesser businesses and
unions adjust themselves.
For this reason, it is somewhat futile to attempt to eliminate industry-wide bargaining by
law. It exists in the steel industry because a pattern is set by the U.S. Steel--Steel Workers
Union contract.
C
Neither is backtracking to an atomistic economy practical.
But the result is that from here on out, the economy must depend on the wisdom and respon-
sibility of a relatively small number of business and labor leaders--the same is true in the field
of agriculture.
The important question then becomes, how can pressure groups work effectively in the
public interest? How can they get an intelligent understanding of how to use the power they have?
Economist #2: But is it properly the function of a head of a business or a union to represent the
public interest? I grant that it is better if he has that interest in mind, but he is first of all
responsible to a given group. To rely on his exercising self-denial in the interest of a broader
group is to put him under a very great--probably too great--strain.
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The strain would be less if the country were not operating under two conflicting policies--
one for corporations and one for unions.
Policy for Labor versus Policy for Industry
Labor-management relations are now subject to a major unresolved conflict.
Most of us can remember the courses in labor problems taught in the days of our youth,
about unions that led a precarious life, always possessing lesser bargaining power than the
bosses, always contending with unconscionably bad conditions. Under such conditions, it was
easy to acquiesce in almost any tactics of redress, with no fear of there being too much power
on the union side.
So a dual rule developed, which now embarrasses the country. Labor was encouraged to
organize and bargain on an industry-wide basis. Conditions that bear on labor's well-being
were similarly treated in an across-the-board fashion. This policy encouraged the unions in
industry-wide thinking and action.
The country has refused to make a matching policy for management. But under pressure
from labor, management has been taking more and more nearly an industry-wide approach to
the wage bargain.
At the same time the anti-trust laws forbid the companies in an industry to act on an in-
dustry-wide basis in relation to either prices or investment.
Thus it looks very much as though U.S. labor policy, as currently expressed, is turning
the flank of U.S. industrial policy.
Monopoly can be achieved through a wage bargain as well as through a price bargain--
take an agreement under which, in order to spread employment, half of an industry works about
half the year, and the other half works the rest of the time.
What is needed is analysis of the point at which collective action in the labor field should
stop, the point at which it becomes necessary for the government to protect the consuming public.
Rights and Obligations
Industrialist #1: There are really five parties at interest in this matter--investors, management,
employees, consumers, government. In recent labor-management abuses, the public has been
kicked around, the stockholders forgotten. There are good and bad executives, of big and little
companies; there are statesmanlike and gangster unions. But labor and management do not
stand alone--the other participants in the national life must be considered.
All the elements in the situation have certain obligations--the government alone has powers
without also having rights. The major government obligations are to maintain a sound tax
structure, reduce the budget and the debt, create an atmosphere favorable to private initiative
without favoring any one class; act in emergencies to maintain employment, preserve free enter-
prise.
Political or Economic Redress?
Economist #3: Today's U.S. economic institutions appear no longer to suffice to handle the
problems under discussion. Then the choice is either to invent new ones of a political nature,
or to reexamine existing economic institutions, improving and buttressing them.
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Economist #1: But part of the present economic situation is the result of political action. By
withdrawing the old legal barriers to union organization, the developing pattern has been hastened.
In the development of the wage bargain, however, no attention has been given to the price bargain.
There are implications of the assumption of a solid front by management in the wage bargain,
forced by a solid front of labor, which have not been analyzed.
Economist #4: Political action has gone far beyond the removal of barriers. There has been
positive action as well: the National Labor Relations Act practically makes organization com-
pulsory.
Coercion of the Customers
Economist #1: Let's examine the results of permitting unlimited organization and collective
bargaining in the wage field and forbidding it in the price field. When unions are small, or when
bargaining is on a plant to plant basis, the collective bargain concerns the dividing up of indus-
try's take from its customers, and is checked by competition.
But present day wage bargains, in a number of cases, are a means of coercing the cus-
tomers. They affect not the division of the take, but the size of the take. Bargains like that in
coal assume that what labor gets in the way of an increase is to be taken by management from
the public.
Economist #4: It's the same under the Transportation Act: the guarantee of 4% to stockholders
would mean that wage increases would come out as rate increases, if the I.C.C. enforced it.
Moreover, the public interest is involved even before the point at which wage increases are
passed on to consumers: it becomes involved as soon as the struggle between claimants pre-
vents capital formation in the industry.
Economist #5: Whatever the legal position may have been under the anti-trust laws, there was
a high degree of concentration in industry before NLRA, and before the unions reached their
present stage. The unions took the practical situation as it existed.
Pilot Agreements
How much difference does industry-wide bargaining make? Meat packing technically
does not have it. But actually, a few companies produce most of the output, and inevitably the
terms reached by one of them are adopted by others--the "master agreements" are on a nation-
al basis.
The result would hardly be different if all four major companies negotiated in the same
place--only the anti-trust laws keep them from it.
If one reviews the past history of meat packing and steel, it looks as though this method
minimizes friction and makes strikes less likely, with a result corresponding to the public
interest--the working people are a large part of the public. The alternative to such an arrange-
ment, over many years, was an absence of collective bargaining, but not an absence of strikes.
Some of that experience was pretty rough.
Economist #2: In the meat packing case, wouldn't you say, present bargaining concerns the
division of the industry's take; it doesn't result in forcing up meat prices. But in other fields,
especially where the union's strength has outrun the employers'--in the building industry, for
instance--then what the industry takes from the community at large becomes a matter of public
policy and raises the question of limits.
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Competition, New Style
Economist #1: Aren't there natural limits which these groups place on each other? Unions
with collective bargains used to be isolated islands in an open shop sea. But today's economy
is dominated by union-management relations, chiefly between large companies and large unions.
And in that connection there are several significant developments.
The Auto Workers' slogan of a wage increase without an increase in the price of cars
was one. The motive of the union leaders was not purely economic. They were out for commun-
ity support; that is, for political support. That group realizes that labor is a small minority,
which must have political alliances to survive.
In the old days, steel prices were a company product. Today, monopoly price policies
are subject to union challenge before the public.
Similarly, for all of its shady statistics and misrepresentation of certain facts, the Nathan
Report is serving a useful purpose--its net effect is to place on industry the burden of keeping
prices down--if no wage increases are given, there will be pressures on prices.
The challenge to each other of these new aggregations of power is effecting a new type
of competition. For example, General Motors has its own little PAC now, making friends and
influencing people. The NAM has been greatly reformed by current challenges. The result of
such pressures is to make these organizations deliver to the public.
Economist #2: Doesn't the pattern differ according to whether leadership lies on the manage-
ment or on the labor side? And doesn't it differ also as to whether the industry and labor groups
concerned are in a single industry, or spread across several industries? In the latter case the
pressure on price policies is surely much less.
Industry-Wide Bargaining
Economist #1: I doubt the wisdom of a legal prohibition of industry-wide bargaining. There
are instances where it serves as a useful protective device for employers. The book and job-
printing industry, for instance, tried to bargain on an industry-wide basis but the union refused,
with a view to picking the various firms off separately. The union of air transport pilots asso-
ciation prefers bargaining on a company basis. The air lines want it to be industry-wide. The
monopoly problem transcends industry-wide bargaining.
Industrialist #1: Yes, industry-wide bargaining may be very useful to equalize the power of
unions in industries where the various companies are isolated, uncoordinated and without gen-
eral staff work as over against a powerful union. But it can work damage where its result is
to impose the wage scales of the large units of the industry on the small units. When that hap-
pens, the smaller plants are forced to fall into the hands of the bigger ones.
Then, too, the unions try to use the device to get rid of cost of living differentials, and
it doesn't cost a worker who works in a small town in Indiana as much to live as one who works
in Chicago.
Economist #1: However, wage equalization is not necessarily a result of industry-wide bar-
gaining. There are differentials in the coal industry contracts, and the paper industry contracts
contain specific cost of living differentials.
Economist #6: What was previously said about the meat packing companies having followed the
first agreement to be negotiated was true. But it isn't necessarily so that a single agreement
made by all of them jointly would have come out at the same point.
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Economist #4: If industry-wide power exists on one side of the table, it should be on the other
side too, though the whole idea is not necessarily a good one. We've been talking about bellwether
companies. But it's the union that imposes the pattern in coal and railroads, and in the building
industry organization is much broader in its scope on the labor side. There is now more coercive
monopoly on the union side than there ever was on the side of capital.
Economist #2: Labor organization was encouraged to overcome union weakness; if employers
organization is now encouraged to overcome the power of the unions, the show goes round and
round.
Monopoly and the Blocking of Entry
Economist #3: One nice day, corporate organization and union organization will get together
and squeeze the rest of us. Two forces, both monopolies, will become a common monopoly, and
then restrict entry to the resources they control. The economy will be in jeopardy; the stage is
being set for a more perfect monopoly.
Today, millions of Americans are underemployed. We talk about a tight labor situation.
Yet there are 5 to 7--maybe as many as 10--million able bodied people working for $500-$750
a year.
Over the last forty years the differentials in real incomes have been growing ever wider--
half the population is left behind while an income elite is formed by the other. If the half left
behind could make an entry into the advancing part of the economy, they would have a great effect
on prices.
Can the present trend be reversed? Can present economic institutions be remodelled
enough to permit balancing up the two halves? The courts are not capable of effecting this
balance.
Economist #2: The anti-trust laws can't do the job, but they can slow up the freeze and afford
time in which to do the job.
Economist #4: The fallacy of the protective tariff as a restrictive device used to be the only one
it was necessary to combat; now there are lots of them.
Economist #3: This country has an advantage of some 25-40 percent over Western Europe in
productivity per head in its resources, but this advantage is not spread across our population,
it is mainly concentrated in the more industrialized third. Even during the war, when mobility
from one part of the country to another and from one industry to another was at a maximum, the
lower group lost relatively to the others in income earned. Relatively, the south is worse off
today than it was in 1937-39.
Economist #4: In a pattern of inequality, if progress takes place the bottom always gets worse
off compared to the top or to the average.
Economist #3: The parts of the economy whose relative advantage is such that they should be
sucking in capital and labor are not doing so: access to them is being checked by monopoly.
Stultification by Jurisdiction
Economist #2: Not only by increasing monopoly, by increasing jurisdictionalism as well. The
finer the definition of an industry, the more restriction results. During NRA days, the definition
of industries made necessary by the codes caused entry into a given industry, or transfer from
one to another to become progressively more difficult. Recognition of jurisdictions between
}
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trade and trade facilitated the staking out of claims, resistance to newly developed techniques,
and retention of old practices, with stultifying results. Now there is a union parallel, and, less
clearly recognized, a business parallel.
Economist #1: What is going to happen to the people who are now low producers and who won't
be absorbed into the high production areas of the economy if the current tightening up continues?
Economist #4: The victims of the cotton picker.
Economist #3: They'll clog in the backwoods.
Economist #2: They won't get into the carpenter's union.
Economist #3: They won't even get into as relatively unproductive line as textiles. Once he's
put out of agriculture, what is there that the Negro can find to do?
The areas of greatest productivity should be expanded until they are on a level with the
rest. Are the cards stacked against such a result? Are the Swedish and Danish models inappli-
cable here? Doesn't this situation put a premium on the development of new political institutions
as contrasted with action through the courts to loosen up the economic structure?
Political or Judicial Action
Economist #2: I'm not sure that an antithesis between action in the courts and political action
is sound. An affirmative public policy is clearly required, but it is desirable to balance the
merits of placing the responsibility on political agencies, which must then go out and apply a
given program, or setting up schemes of incentive and discouragement, which will affect the
course of private enterprise while leaving the main initiative in its hands. I believe that the
latter should be tried to the limit.
Economist #3: On the ground that in labor policy, as in foreign policy, the uncertainties are so
great that much must be left to current experience and decisions?
Economist #2: Yes: it's all right to set up a positive program when one can be quite clear about
what to do. But empirical incentives have a lot of advantage during the fumbling stage. During
that period, there's much to be said for indirect as contrasted with direct use of government
technique.
Bipartisan Labor Policy
Economist #3: Shouldn't there be a bipartisan piece of legislative machinery for questions of high
policy in the labor field, such as there is now for foreign policy (at least political foreign policy--
economic foreign policy may be another matter)?
W
Labor problems require treatment by a standing committee if the country is to get beyond
making its decisions crisis by crisis--coal and railroads--and move on to long-term matters
such as inadequate utilization of the country's resources.
Economist #2: Actually, the basis of the present bipartisan foreign policy was laid by a group
of interdepartmental technical committees that really went into matters. There is need for a
comparable administrative staff on labor issues.
Industrialist #1: When I have suggested a board of leading economists with some official status
I have been told it would do no good because the economists wouldn't agree.
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Farm Purchasing Power
But there is very great need for the production of goods in greater quantities for sale
at lower prices. If farmers could buy industrial products at lower prices, no such support pro-
grams as are now operating for agricultural products would be necessary. But labor unions,
and management with them, seem to be without a story on greater productivity and lower prices.
Journalist #1: Isn't there some reason to hope for such a story now that the big industry-wide
unions are moving more into the political area--to try to work on the full production problem and
to lower prices? It's not necessary to assume that the construction industry's pattern of re-
striction will prevail in other industries.
****
Economist #6: The purchasing power of many people besides farmers could similarly be ex-
panded: take the southern people in the textile industries.
Economist #3: The south has a problem both of the position of its resources, and the combi-
nations in which they are used. In the northwestern part of South Dakota, for example, by com-
bining some rather bad resources with sheep, a high degree of well-being has been achieved.
Similar combinations must be worked out for the south.
Economist #6: There was considerable migration from south to north during the war.
Economist #3: But the movement from states like Arkansas, Alabama and Tennessee took
place only after there had been considerable emigration from far better land in the midwest--
and now more people are going back to these low income areas.
Journalist #2: How much overpopulation is there in the south?
Economist #3: In the Piedmont areas, one-half to three-fourths of the people, and not only those
in farming but those in textiles.
Industrialist #1: Wouldn't their dispersal involve national planning?
Economist #1: Aren't the service industries the real field for new employment?
Exploitation of New Technology
If there is to be a chance to open up the productive segments of the economy, there must
be a chance to push productive techniques further and further.
How Monopolistic is Labor?
Economist #5: How accurate is the description a number of us have offered of the labor move-
ment as having reached the stage of monopoly? One constantly hears employers say: How can
unions be representative when only 14 of our 51 million workers are organized? Is this evi-
dence of monopoly?
C
Labor's next job is actually to get more members--and then to go to work on the cost of
living. I received a letter today from a farmer in northern Wisconsin--from a cut-over rural
slum. He said up there they'd paid off many of their debts during this inflation, and they hadn't
had to worry too much about prices since in any case they buy so little. But in the next period
he thought the unions would fight for them.
Economist #4: Yet in spite of all that's just been said about poverty in rural areas like the south,
one hears of increasing southern markets for equipment like washing machines to replace former
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household help. Where is that help now--isn't it making more money elsewhere?
Economist #3: Yes, with labor up from 50¢ to $1.25 a day, even 25¢ cotton doesn't pay in many
areas. There has been a gain, but relatively it was less than the gain of the rest of the country,
and it seems likely to be less durable also.
Government Administrator: How long will the wartime impetus to the economy last? During the
war, there was an arbitrary placing of resources in the south. Is there to be an extension of
that in the postwar era?
The comparison of the present state of labor relations with the present bipartisan foreign
policy is a tenuous one--a general goal can be seen in regard to the latter, but in regard to the
former much less agreement exists, though perhaps the original concept of the NLRA can be said
to have been such a general goal, for which details are being filled in by subsequent legislation.
Economist #2: Even if a goal can't be defined, isn't it possible to establish a direction?
Industrialist #1: The corrections of the past few years are doing that.
Government Administrator: If political institutions are to be used to correct economic trends,
doesn't that mean an acceptance of a measure of national planning? A lot of sidestepping is
being done on that point.
Political Action on Welfare Issues
Economist #3: What should be included in high policy on labor issues? Are certain issues being
injected into collective bargaining that should be handled politically? Does this apply particularly
to welfare issues?
Does the difference in labor's chances of acceptance by various branches of government
explain why so much is being packed into the collective contract?
The dynamics of the American economy tend to apportion legislative power against Amer-
ican labor. Congress, by contrast to the courts, is decidedly pro agriculture. The executive and
the courts are much less so. If labor took some of its desires to Congress now, it would take a
licking--perhaps the agricultural predilections of Congress are why labor has not wanted to go
into politics in this country. But maybe, as a result of this situation, material is being injected
into specific wage bargains that should be handled in the general political sphere.
British experience affords an interesting parallel. The British general strike of 1926 was
probably the last; thereafter, British labor went into politics to establish its position. (There is
a warning in that experience too; British labor has cured instability with a vengeance--the ven-
geance is new inefficiency.)
Economist #2: In connection with maintaining the efficiency of the U.S. economy, the jurisdictional
problem, mentioned earlier, should be given due consideration in any proposal to handle issues
politically. The best that can be done in politics is to get a workable compromise between existing
pressure groups. At a time when shifts in the direction of new technology are desirable, such
compromises are likely only to make the situation tighter.
Industrialist #1: Yes, these things should be kept out of politics.
Economist #2: Of course there is the possibility of freezing present degrees of concentration of
power and then outgrowing them. The country howled about the mergers of 1900, but what happened?
The scale of markets and of technology, developed thereafter, was so great as to make them hardly
seem like power groups at all.
聂
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Some dissolving can doubtless be done now; if it is accompanied by technological mobil-
ity and new entries into the profitable sectors of the economy, gloomy calculations may yet be
upset.
Economist #3: I still believe that if issues like health and welfare were taken into politics,
better programs would be attained and tensions in the economic sphere would be eased.
Economist #2: These issues are a way to win the allegiance of the bystander.
Economist #1: If security and health gains could be made on the political front, I should be opti-
mistic. As things are now, John L. Lewis puts a feather in his cap called the welfare fund.
Promptly, every other union leader has to go in for feathers. It's insidious. Each time such
a plan is adopted, compartmentalization in the economy is increased and jurisdictions tightened.
The annual wage does the same thing. But this tendency could be headed off by a political pro-
gram, which would lessen the area of competition among labor leaders.
It is fundamentally important to spread the idea that security should not be attached to a
single plant or a single industry, but to the economy as a whole; mobility must be maintained.
Industrialist #2: But the political approach is the forerunner of a planned economy. Russia may
provide workers with a measure of security, but at the cost of freedom. There are not enough
superbrains for overall plans. Local adjustments are necessary.
Maybe Keokuk needs labor. Under a planned economy, people here in Chicago would be
told to go to Keokuk. But those people might want to stay here, and we in this country don't like
to be told where to go.
Journalist #2: A long process of education is clearly necessary. I think there is much to be
said for Peter Drucker's proposal for establishing a National Commission to go into these mat-
ters and report in four or five years. Meanwhile, there will doubtless be piecemeal legislation,
and immediate proposals such as those contained in the recent Brookings report. The country
requires much more long-term thinking, by people whose findings will have a strong public
impact.
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ACTION AT THE PLANT AND COMMUNITY LEVEL
Attendance at a discussion in Cleveland
February 17, 1947
Chairman: Paul L. Feiss
Herbert Buckman, labor consultant
Emanuel Davidove, attorney
Warren C. Fargo, physician
Isadore Grossman, attorney
Homer H. Johnson, attorney
Monroe A Loeser, attorney
Jacob C. Meyer, educator
Louis S. Peirce, attorney
E. L. Rosenfeld, industrialist
M. S. Ryder, National Labor Relations Board
Sam Sponseller, representative, Steel Workers Union
H. Wlater Stewart, attorney
John Wilbur, Cleveland Cliffs Iron Company
Whiting Williams, author, business consultant
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Action at the Plant and Community Level
(The National Policy Committee, Cleveland, Branch, met on
February 17, 1947 to take up a number of items on the suggested
agenda issued by the NPC in November.)
What are the Limitations and Possibilities of Improving In-Plant Relations,
and What is Now Going on in That Field?
(a) The quality of supervisory personnel and of union leaders, shop stewards, business agents
It was said that both management and labor recognize the importance of raising the standard
of their contact men. The unions are educating their men in the statistical aspects of corporate
finance so as to be able to deal with company statements when negotiations are in progress. The
employer should also do a great deal with relation to his supervisory employees so that they have
a better understanding of their function. It was thought that management generally recognizes
that much more qualified persons must have charge of personnel. The enormous increase in
personnel departments in this country during the war is pertinent.
A labor representative advanced the suggestion that good labor-management relations
stimulate development of union leadership and improvement of the management of the personnel
department. Better development is found where things are running smoothly--where there is
understanding in handling grievances than where there is a war going on; the two situations develop
two different kinds of people. Proper development in either group cannot possibly be accomplished
if there is continued warfare.
A member asked if men who were college trained in economics and social sciences would
make it easier to create understanding between management and labor. The labor representative
thought so, but warned that some appreciation and understanding of human nature is as important
as education. Some of the labor people are being schooled now, and sociology is a "must" for
any of the training.
How Much Can be Done Toward Stabilization of Employment
at the Plant Level?
(a) Annual wage plans and guaranteed employment
(b) Spread of employment in seasonal industries
(c) Responsibility of buyers with respect to stabilization of production and employment
An annual wage involves planning for year around activity. It follows that if an employer
has to pay for year round activity, he is more than likely to find something to do. Spam was cited
as an example of such a product--it was developed to use up excess refrigerated port in slack
season.
In the building industry, it may not be too difficult to work the year around with some way
of planning. Shells of buildings could be put up in good weather and finished off in bad weather.
The same workmen are not always used, but something could be accomplished toward year around
employment for a given group.
An outstanding example, where the working out of year round production included changes
in the habits of the buyers, is the automobile industry. Automobile workers formerly had three
months off a year when the assembly line was down while engineering was being completed on a
new model. Now the engineering on the new line is finished by the time the old run is completed,
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and the workers have their annual vacations just about the time the engineering and maintenance
men are getting the new line ready to run, so the vacation period is all the production time they
lose. To make year around employment of automobile workers possible, the public had to be
educated to buy all the year around, whereas buying had formerly been done only in the spring.
Any year around production plan must take into effect a change in the buying habits of the public.
As an example of planning, an industrialist quoted his experience of 25 years ago, in an
industry generally rated as seasonal, when they had semi-annual periods of little or no employ-
ment. He began advertising their best selling product at special price in slack seasons, through
mail order houses and small retailers, and in eight or ten years ran the annual production from
20,000 units to 250,000 units. Plant shutdowns were over.
Many companies are now diversifying their products to insure around the year production.
The most difficult industry in this connection is the one-season industry, like sugar refin-
ing. Such plants are built for one exclusive product and operate a relatively short time during
the year. The solution to their problem seems to be to employ casual labor for that period, that
is, some of the agricultural workers who travel from one harvest to another. However, the member
making these comments said, the number of sugar refineries is small, and perhaps that slack
could be taken up by public works.
In connection with the annual wage, a member asked whether in one of the building trades
where a man works about six months a year, labor would accept a lower hourly scale in order
to insure the longer employment. It was felt that many of the building unions would not accept
this, as they would feel they were lowering the normal wage level. Even if the annual wage were
a little higher than present income, but lower per hour, a member thought very few unions would
accept it.
In discussing the annual wage, a labor representative commented that the Steel Workers
had never made any rules for employers--they had merely said that they were entitled to some
measure of security and would appreciate a chance to discuss the whole problem of what is in-
volved. He added that he recognized that not all of the workers presently employed could be
guaranteed 40 hours per week under any and all circumstances. A part of the force will have to
be flexible, and subject to being laid off, but a large part could be covered by a guaranteed annual
wage.
There are two elements in the question: one, the natural desire of the workers to have
some assurance of continuity of employment at least for enough of the year to have security,
and the other, the problem for management of making that possible without so increasing their
costs that the product becomes too high for normal consumption. If management is ingenious
enough to provide a continuous market for the product, the guarantee of employment for at least
80 or 90% of the year may be possible.
No one would contend that it is undesirable to have steady employment. Management should
do everything possible to diversify its product and steer its demand to make for continuity of
employment to the fullest extent possible. But the real question is whether or not any annual
guarantee could be operative in the industries where demand is not steady but fluctuating, and
whether a backlog of funds could be accumulated sufficient to constitute a reserve against those
days of low demand. In some industries, there is risk involved.
It was suggested that the consumer who bought in slack season should be given an advantage.
Some contractors do that now. This might be the solution of the problem.
An industrialist recollected that one other device was used before the war which might not
now be possible. That is what was called "dumping in foreign countries." Many industries ex-
ported at a lower price than prevailed at home to aid production.
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Another very important consideration is that with industry generally geared to mass pro-
duction, it is awfully costly to operate at a low production rate, or to shut down. In assessing
the cost of an annual wage, the cost of not having steady employment and steady high level pro-
duction must also be considered. Much could be done on prices if high level production prevailed.
Industry could afford to expend a little more effort to secure yearly high level production. Nothing
threatens industry more than to go into a seemingly endless slump.
A lawyer member asked how this could be accomplished in a highly competitive system.
A labor representative replied that there is nothing new about business failures. Competition
is ever with us, and the failure of some firms might not mean that a given industry was worse
off. The group was reminded that it has been said that a series of failures might result in a
depression, with resulting new nationalization, and perhaps a revolution. The labor leader main-
tained that he would rather have social change come about as a result of desiring to maintain con-
tinuous production and employment than to have the kinds of change that come about as a result
of stagnation.
First, there is the question of whether the public is willing to pay the price of annual em-
ployment. It must be a matter of working toward an objective rather than compulsion either by
management or unions. The full year's work is a goal to be worked for in every possible way,
not a matter to be made a subject of compulsion either by Congress or unions. The proponents
of the system say it is the best possible--it has created the highest level, and it is believed it
can do even better. If people are employed steadily and have a year around guarantee of some
sort, they will come nearer paying the price than if there is tremendous uncertainty and they
are out of work.
The plan involves some departure from old things and the beginning of some new things.
Labor does not claim to have all the answers. They admit they cannot force industry to adopt
this and make it work, but if industry will work with them to this end, they will find the answer
to enough of the problem to make it work. That is entirely different from getting legislation
passed.
Any fair minded and intelligent employer will agree that year around employment is de-
sirable from the point of profits, because productivity alone produces profits, and it is related
to two things:
1. Man hour productivity
2. Time employed in the plant by the year.
A tremendously important aspect in all management is that continuous employment reduces
labor turnover, one of the most costly things in any plant.
Customers' buying rules the distribution of wages to workers, and intelligent planning may
be the key to the guaranteed wage.
The competitive system depends upon the initiative and energy of the manufacturer to pro-
duce a better product constantly at lower prices. If management could be assured of a steady
market in some way, its problem would be greatly decreased. But in this country, versatile in
its tastes, its purchasers shifting whenever new gadgets come out, first to aluminum, then mag-
nesium, then plastics, etc., one cannot bank on anything. It is the agility to move that has enabled
business to live. In the final analysis, all of the competition is for the benefit of the customer.
One member mentioned that the farmers are the luckiest people, but a lawyer-farmer
countered that while they now get better prices for their products than ever before, they are still
sub-standard. A labor representative suggested that perhaps some day the individual farm will
be out of date. It may be that its costs are way out of line and for the need of the masses there
S
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should be thousand acre farms instead of fifty acre farms. Another member commented that
the stability of the farm is evidenced by the number that the banks own.
In defense of the annual wage, a labor representative said that everybody knows that con-
tracts are generally negotiated on the basis of a year. If it was found that an annual wage worked
undue hardships during a trial of one year, certainly there would be a change and an attempt to
correct it and put it in line during the next year. Labor is not asking for a policy covering an
annual wage irrespective of whether there are sales or not.
A member asked if a contract had ever been negotiated covering a wage increase which
was found to be too high, and then later, at the end of the contract, negotiated into a wage de-
crease? The answer was that this had been done, on occasion--the miners had done it, but not
as a general rule.
The fact is, the previous member continued, that when once an inroad is made, instead of
being abandoned, it is likely to be enlarged. That is the way the closed shop came into being.
A labor representative said he could give examples of where that expansion had been for the good
of industry. The introduction of time studies and labor saving machinery was opposed at the be-
ginning because nobody realized the possibilities of such developments. The famous strike of
the shoe manufacturers in Connecticut and Massachusetts was cited as a classic example of that.
A labor representative concluded that the annual wage idea is a new thing and there is lots
of opposition. More will be known about it after it has been given a fair trial in industry to see
how it works out. The annual wage does not mean employment 365 days a year--it means eight
or possibly 10 months, in most cases: a guarantee for a substantial part of the year. Continuous
employment is a responsibility of management as well as of representatives of labor.
What are the pros and cons of multiple unit contracts? What does experience
indicate with regard to contracts made plant by plant; company by company; on
a city-wide basis; on an industry-wide basis? What is the local effect on indus-
trial relations of these various types of contract?
Modern collective bargaining, it was said, has been somewhat of a natural evolution. Cer-
tain arrangements for bargaining have been evolved which could be better. They are mixed up
with legislation and do not contribute to the welfare of either industry or the nation.
A member said that there is some advantage in having industry-wide bargaining in that it
offers an opportunity to have local positions stated and cited before the heads of the industry.
The usual result of industry-wide bargaining has been that the scale is set on the basis of the
particular plant or area that happens to predominate in the industry and that pattern becomes
binding upon all the rest of the industry although there may be justifiable reasons for variation
in some localities. Also, there may develop, as in the coal industry, power in the hands of one
or two people to call out an entire industry and paralyze a whole segment of the economy. This
may happen if there is high concentration of power.
A member asked how industry-wide organization could be stopped by legislation, and a
lawyer replied that it could be accomplished in the same way as the Standard Oil Company was
broken up into many parts--just as price fixing in industry was broken up.
It may not be completely true, a participant thought, that industry itself by and large likes
to bargain on an industry-wide basis, but there is a trend toward it.
The feasibility of control of this trend by legislation was discussed, and it was suggested
that the law might specify that contracts shall run at staggered periods during the year so that
the industry would not be at the mercy of a complete shut-down. One member felt that no legis-
lation will accomplish anything. A labor representative stated that in barring industry-wide
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bargaining, not only labor would be hamstrung, but industry also.
The rubber companies are going through the motions of not having industry-wide bargain-
ing now, while all the four big rubber companies are sitting down at one time with the union.
It was asked how the contracts could be made to terminate in quarter-annual periods with-
out industry-wide bargaining, and the solution was suggested of providing a law that in a certain
area there should be an expiration of the contract by a certain date and it would be a breach of
that contract if the group quit before the contract was ended. If there was liability for breach of
contract, that would not happen. If at three month intervals, negotiations were carried out and
the agreement extended, ultimately the annual wage contracts would be reached.
There is nothing in industry-wide bargaining that should prevent proper adjustments to
the variables of local conditions, a member said; this must be done. A master agreement cover-
ing every contingency cannot be negotiated for a whole company with a great number of plants
because the machinery in the plants and their products are not necessarily the same. All vari-
ables have to be taken into account. No national agreement can rigidly fix all items. Wages are
negotiated on the averages at one plant.
A member said that the discussion was losing sight of the danger to the economy in giving
to one man, say like Lewis, the power that the government would never dream of giving to industry
or any man in industry. This gets right to the subject of national organizing. Certain men from
U.S. Steel and General Motors have a great deal more power than any labor leader, and somehow
they get around to one man talking to Phillip Murray. The answer to the Lewis question is some-
what different. There is now being very generally discussed the question of whether industries
upon which the welfare, life and health of a community depend should not be handled in another
category than producers of less important goods.
It was suggested that national negotiations, unless there is flexibility and variation, might
have a tendency to freeze technique. Industry has for a large part come to have standard products.
One electric iron is much like another. Labor has not caused this. Certain process are proved to
be better, and when one manufacturer adopts them, the others are very shortly going to get that
good or better, even though advertising tries to make one believe there is a lot of difference between
the products.
What Responsibility Should Communities Assume to Improve Labor-Management
Relations and What is Going on in That Field?
(a) City and state machinery such as that in Toledo, and in New Hampshire and
Vermont
(b) Usefulness of community labor-management advisory committees
(1) In the administration of statutes--definition of "suitable employment"
under unemployment compensation laws
(2) In fostering fair employment practices
(3) In stimulating greater use of arbitration--securing better arbitrators
and working out criteria for them to apply
(4) In sponsoring public discussion to educate the working population and
the general public on economic issues (labor extension service)
(5) In holding public hearings on critical situations
- 16 -
One of the members assumed that if workers accept local effort on the part of representa-
tives of the public, a community approach could be very effective, as it has been in Toledo. Tole-
do claims to have had fewer strikes and fewer disturbances in the last five years under that plan
than any other city in the country. Such an arrangement can do nothing about national strikes,
but many local disturbances have been effectively handled. The plan came into being because
there was a very crying need, which the whole community felt; consequently those who work on
the plan have had prestige. It must be remembered that Toledo is made of local home-owned
industry and is therefore not so apt to be caught in the tremendous national problems that develop
as some other cities.
Where Should the Line be Drawn Between Management and Labor; to What Extent Should
Management be Prepared to Discuss with Labor Decisions on
-
(a) Pricing
There was a discussion as to whether management, after discussion, would pay any atten-
tion to what labor said about pricing, but the concensus was that "discussion" implied application,
at least where there was a contract. Management is increasingly aware of the importance of
keeping employees informed of the problems of management, and this is most desirable.
An industrialist recalled his experience during the depression of being faced with a plant
shutdown or accepting a large order at a very low price. When he placed the problem before the
workers, they unhesitatingly voted to work for a short time at much less money, rather than to
shut down. There was no union at the time, and the same problem could probably be handled much
more simply today. This represented a crisis, and a wise decision. It was probably the turning
point of the business at the time.
A member asked if a "discussion of pricing" presupposes that management is ready to open
its books; recent experience indicates that management definitely refuses to show its business
features to labor. A labor representative replied that the general attitude is that labor should not
have anything to do with policy at all, and consultation means nothing unless it goes to the center
of industry. When the request was made for the 30% increase in wages, the C.I.O. was trying to
say that on the basis of 1936-39 profits, they felt management could do enough better, with some
technological advancement, to pay a 30% increase without any increase in price, and still make
the average profits made in 1936-39. The union chiefs also said their people needed that money
to meet present day prices which had gone up more than wages during the war, and finally that
this is the only way to assure high level purchasing power, which will make a high level demand,
which will make for high level employment. Experience has proved the position was not so very
wrong, if the tremendous losses incurred during the strike are considered.
This member continued that labor is not particularly interested in what is charged for
products, particularly by the plant--they don't feel it is their job to set prices. They are inter-
ested in wages, and of course in prices in relationship with what their wages will buy. When they
see large and excessive profits, they draw their own conclusions. Staple prices are too high and
labor feels it is a function of management to get them down.
Approaching this problem from another angle, another member pointed out that the same
condition exists between stockholders and management. The stockholder never knows when prices
are right or when dividends are right. Hired management looks out for what it thinks is the major-
ity position, but sits on the hot seat between labor on the one side, with the power to quit, and the
stockholders on the other side, with the power to fire.
(b) Adoption of technological improvements
A labor representative stated that the workers are not against technological advance--they
do, however, question it if it involves down-grading. Labor is not interested primarily in
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technological improvements. They are interested in what happens to them with technological
advancement. When management determines to make certain technological improvements, it
might do well to bring its plans before the union by way of informing the employees what is go-
ing on.
A lawyer member asked if management would abandon a technological improvement if
labor objected to it. A labor representative replied that he didn't think the workers would feel
they were privileged to forbid its adoption. They would be satisfied if management told them
what they were going to do, pointed out the advantages, and invited them to sit down and talk
about what they thought would be a fair consideration to the people involved. There might not
always be an agreement but many times an understanding would result. Other times there might
be difficulties, but in many cases these could be surmounted. The introduction of improved shoe
machinery was cited as a technological improvement which not only reduced cost of producing
shoes but increased the number of people employed. Generally speaking, union labor has not
been opposed to technological improvement in recent years. But plans should be discussed with
the workers.
(c) Change of location and abandonment of plants
It was felt that certainly this should be discussed with the workers, as it has everything
to do with their livelihood.
(d) Inauguration and administration of incentive plans
There can be no sound and effective incentive plan without the workers being informed--
they have something to say about how it shall be established and how it shall operate.
The question came up of why, under the incentive plan, many of the workmen are able to
produce much more without extraordinary effort than they do normally. A labor representative
volunteered that it is the abuse of the incentive plan that has made labor fear it. In the old days,
management got workers to put out to the Nth degree. Workers discovered that in increasing
their efficiency they were immediately under suspicion of having been lazy before, and that
somehow or other every time they broke a record, they got less and less per piece.
Many people have a misconception of what an incentive plan is. An incentive plan must be
based upon the normal pace at which the man can work without rushing and without causing many
mistakes in his work. The introduction of planning by engineering technique in any plant is usu-
ally the result of careful technological studies, and if more production by the same individual is
made possible it is because the planning has made it easier for him to produce more.
Any intelligent incentive plan is based upon certain simple elements:
1. A reasonable amount of production in any given operation that an operator can
deliver without undue physical strain, based upon the best conditions.
2. A formula which allows for the average worker against the best worker, and
allows for fatigue, for necessary interruptions, for change of posture, etc. This
conclusion is called "par.
""
3. Then allowances are made for error and for any possible overstrain, and the
requirement is reduced to another percentage, which is called "standard" and
adopted. It is not applied by rule of thumb--allowances are made for variables
of different people.
An incentive plan is different from the average piecework plan: the two must not be confused.
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18 -
The incentive plan is based on what the average man is capable of doing. Anything above that
provides a premium, but the worker is not penalized for below standard production.
In conclusion, it was agreed that labor ought to be more fully advised of management's
plans for the purpose of gaining its cooperation, but not for the purpose of having it participate
in management.
Re productivity, it was brought out that the U.S. Department of Labor has recently completed
a short term survey, which could not be done previously due to strikes and material shortages,
and this survey shows practically the same thing that it did after World War I, and that is an in-
crease in productivity per man hour. There is no question about technological improvement, and
this combined with increased productivity should give a production which is much higher. The
increase in productivity after World War I was 4% for the first three years, and 2% over the
10 year period. However, statistics are not too reliable now--but the year ahead should give a
better index of what is possible. Generally speaking, youth is the best producer, and many men
who would ordinarily be in industry are now being paid to go to school.
4. What Constructive Action Can be Taken With Regard to Union Practices in
(a) Jurisdictional disputes
One member stated that he understood that unions are anxious to eliminate jurisdictional
disputes, and thought unions will join with management for that kind of legislation, particularly
for sound legislation for that problem alone, but all agreed that it would be better if labor could
accomplish settlements without any legislation, even though it might throw a few lawyers out of
jobs.
(b) Featherbedding
This problem particularly affects the amusement industry, musicians, stagehands, etc. A
member said that the amusement industries are the most plagued, but they can best stand it--
the local theatre has had a greater increase in income compared with labor cost than any other
business, and perhaps that is why featherbedding still exists. It was agreed that very little
featherbedding exists in well managed plants where set labor-management relations have been
established for a few years.
The current bricklaying practice of a limitation of 800 bricks per day against a possible
production of about 2,000 was also cited in this connection; it was pointed out that there is a
definite distinction between featherbedding, which is the hiring of more people than are needed
for a job, and the limitation of production, which applys in the brick laying industry and the
rubber tire building industry.
One member asked if trade unionists have any justification for featherbedding, and a labor
representative replied that trade unionists come closest to understanding why there is feather-
bedding, if there is, without saying they believe in it.
(c) Discrimination
It was admitted that some unions exclude colored people from membership. That kind of
policy does not exist in C.I.O. The unions are going to have to be American too. When the nation
adopts a policy of "no discrimination," it was said, the unions must measure up, or go out of
business.
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LABOR'S RIGHTS AND DUTIES
Attendance at a discussion in Memphis
February 20, 1947
Chairman: Lucius E. Burch, Jr.
B. R. Allen, president, Memphis CIO Council and Rubber Workers, Firestone
local
Victor Boldreyhini, vice-president, Rubber Workers, Firestone local
Peter Cooper, professor of economics, Lemoyne College
W. A. Copeland, state director, CIO
Earl A. Crowder, international representative, Steel Workers, CIO
Charles G. Eubank, manager, Memphis plant, Kimberly-Clark Corporation
N. N. Fowler, attorney
J. R. Haas, president, Sealy's, Inc.
Louis Haas, president, U.S. Bedding Company
J. D. Haas, secretary, U.S. Bedding Company
Robert Johnson, newspaperman, The Memphis Press-Scimitar
Alfred Loaring-Clark, Episcopal minister
Lev Loring, president, Memphis Trades & Labor Council, AFL
Edward J. Meeman, editor, The Memphis Press-Scimitar
Caffey Robertson, cotton exporter
Robert Tillman, president, Memphis Typographical Union, AFL
W. M. Whorton, conciliator, U.S. Department of Labor
C. Rudolph Johnson, attorney
Edmund Orgill, president, Orgill Brothers
W. W. Simmons, president, Broadway Coal Mining Company and Broadway Coal &
Ice Company
- 20 -
•
Labor's Rights and Duties
(On February 20, 1947, the Memphis Policy Committee
met to discuss current labor-management issues. Represen-
tatives of management, labor and the public attended. Present
were five manufacturers, four CIO officials, two AFL officials,
two corporation lawyers, one lawyer who has handled a number
of cases for labor, a former president of the Chamber of Com-
merce, a cotton exporter, a coal merchant, a minister, an eco-
nomics teacher, a U.S. labor conciliator and an editor. As
background, it is worth mentioning that the meeting occurred
on the evening of the day the Tennessee Legislature passed a
law outlawing the closed shop.)
G
Definitions and Attitudes
The chairman set as the purpose of the meeting the definition of areas of agreement and
disagreement on labor questions, and the attempt to learn the attitude of three segments of so-
ciety about these questions--employers, labor people and the public.
He offered as a guide for the discussion the following questions:
Does anyone challenge the basic right of labor to bargain collectively?
Do present labor laws provide for mutual responsibility?
Should the closed shop and maintenance of membership be preserved and extended?
What should be the limitations on the right to strike? (jurisdictional strikes, government
strikes, etc.)
What should be the consequences of unlawful labor strikes by unions? What about feather-
bedding and other practices?
What merit is there in labor's position that the employee has a vested interest in his job
and is entitled to share in profits?
What can be done to minimize industrial conflict and bring about harmony?
To what extent should the rights of labor be protected, preserved, perhaps extended?
The Right to Organize
Manufacturer #1 prefaced discussion of this question by asking whether in truth labor has
gained from collective bargaining. He said he sometimes felt that organization had the effect of
regimentation in that men of outstanding ability were held in the same class with laggards. He
said this situation killed initiative. He said he thought there were some individuals incapable of
self-protection who need unions--a large uneducated group which needs someone to sell their
services for the most money. He said he thought people intellectually capable of individual bar-
gaining were better off out of unions.
The chairman asked if any man present believed the right to organize should be denied to
labor. When no one responded, he interposed an opinion that there is not in this country any
large body of people who desire to take that right away.
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Public Representative #1: People might profess to feel that way, but the trend is drifting in the
other direction. Many times, I have been told by management that it believes in organized labor,
that unions are necessary for balance. But, when a particular controversy arises, the point of
view changes. Either the man doesn't understand what bargaining means, or he wasn't frank in
the beginning.
CIO Official #1: While employers in interstate commerce may profess to believe in labor's
basic right to organize, the resistance is strong among employers not covered by the Wagner
Act. I challenge the manufacturer's statement that unionism is detrimental to individual initi-
ative. Standard contracts provide only for minimums, they do not set up maximum salaries.
It is the employer's privilege to reward initiative if he wishes.
AFL Leader #1: Many people who make pro-labor statements do not really feel that way,
judging from their actual practice and mechanics. When a union first enters a plant, employers
customarily feel hurt; they take the attitude that their employees are not loyal. They think they've
given jobs and opportunity and that the employee should be grateful. Yes, an employer will tell
you he believes it's all right for Bill Jones' plant to be unionized, but he doesn't want a union in
his own place. Then he becomes accustomed to the union.
Present legislation is taking labor's tools away from it.
Business Man #1: Doesn't such legislation spring from resentment on the part of the public
because people have been coerced into joining unions, and because labor has abused its privi-
leges?
AFL Leader #1: Undoubtedly labor has abused its rights at times. Labor is a cross-section
of society, with all the virtues and vices of other people. Labor has been guilty of abuses just
as others have.
Attorney #1: Returning to the question of contracts and initiative, in my experience giving one
man a raise and not giving the same raise to another is bad for plant harmony.
AFL Leader #2: I disagree; instead of making the man who didn't get the raise mad, it makes
him work harder. A good producer working under a minimum contract expects to make more
than the man doing less work under the same minimum.
AFL Leader #1: In skilled trades the scale of wages doesn't mean anything now. Where there
are surpluses of labor, the minimum automatically becomes the maximum. But there are men
in the building trades who for 30 years have never worked for scale.
Seniority
The chairman suggested a discussion of seniority in this connection, submitting the opin-
ion that in some industries, notably the railroads, it is of controversial value. A good brakeman
can't be given the best run, he said, unless he has seniority, even though the man above him is
inferior in ability.
CIO Leader #1: Industrial contracts generally do not have the rigid seniority clauses of the
railroads. It is only fair that where two men with equal seniority are up for one job, the best
man should win the job. As far as wage increases are concerned, I do not recall a case of griev-
ance caused by a wage increase, though management sometimes says it can't give increases be-
cause “here's what the contract provides." Seniority should have first consideration in jobs,
merit next.
Attorney #2: I do not believe in promotion primarily on seniority; seniority should control at
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points of equal merit.
Newspaper Editor: Inertia is on the side of the employee as far as seniority goes; merit should
be the sole consideration. Human nature alone will give seniority all the weight it needs. Unions
tend to give it an artificial value.
CIO Leader #1: The seniority clause is misunderstood. It is for the worker's protection. Dur-
ing the war, for example, faithful employees were sometimes treated unfairly. In order to get
and keep new men, management had to promise them special inducements. If all employers
gave consideration to seniority, there wouldn't be any trouble.
Public Representative #1: The reason seniority has become an issue is that many times labor
is suspicious of the motives behind preference by management for one man over another for a
certain job. Maybe the balance is on the side of management as far as the man's ability is con-
cerned, but the worker believes that promotion might be used as a type of bribe to keep a man
out of the union in open shop cases.
Attorney #2: The older a union is, the more it tends to demand strict seniority interpretation
clauses in its contracts. Such unions, 40 to 50 years old, are usually on a national scale. Small-
er, more localized unions don't seem to care so much.
AFL Leader #2: I disagree. In the oldest union, the printers, they only demand the guarantee
of a job in a particular classification. The union itself has nothing to do with promotions. Man-
agement is free to pick any man for head of the department.
Attorney #1: Importance of seniority depends on a) the industry and b) its size. In small indus-
tries, seniority is an academic question. In big industries, seniority perhaps can work out
better. The railroads somehow overcame the principle and got their railroad presidents. The
rank and file have to depend on seniority. Small plants couldn't set up a sound basis for senior-
ity.
CIO Leader #2: Promotions of non-union people are a constant problem for grievance commit-
tees. Seniority is not academic in small plants. Many have been established for a long time and
the employees have been faithful. If seniority is not considered, it is discouraging to them.
Unions have always been in favor of merit increases and provisions are made in contracts for
them, but seniority is still a factor. Everything being equal, the older man deserves the break.
Attorney #3: Isn't it true of human nature that the older employee would feel entitled to the
break?
CIO Leader #1: It isn't basically true, or it wouldn't have to be written into contracts.
Mutuality
Chairman: A principal complaint of employers is that there is no mutuality under the Wagner
Act. The employer is bound by law. There is little financial risk on the part of the employee.
How can mutuality be made workable?
Public Representative #2: I have sat on arbitration boards, and in general the present situation
places the employer at a disadvantage. When labor was young and fighting for life, it was possi-
bly wise to give it all possible protection, but labor is no longer a baby and should be responsi-
ble for its own acts. The situation today is one-sided and unfair.
CIO Leader #2: This line of reasoning is typical among people not close to the problem. Labor
can be sued for breach of contract. All the Wagner Act does at the moment is guarantee the
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right to organize without interference. The clamor to repeal the Wagner Act has been going on
for years, ever since the old Liberty League took up the fight. The press generally got in on it,
too. Giving the employer the right to talk to the workers freely about unions sounds good, but
the boss is a powerful person over his people and he shouldn't be allowed to tell employees not
to join the union.
Attorney #2: It is unfair to have a situation where the union can organize, force a contract and
sue the company for a breach, but if the union breaks the contract there is no enforceable action.
Agreements are as binding on unions as on employers. Where violations occur,
AFL Leader #1:
if the union has tangible properties they could be attached, but not the individuals' property. In
some cases, a union will have contracts with many firms in one city. If a violation occurs at
one firm, should all union members be punished? Where the violation occurs, collective bargain-
ing should be taken away from that group. One reason employers sometimes don't like to deal
with unions is because in some instances the unions are not stable. The business representative
does not have power over the workers as the president of a corporation does--just the opposite.
AFL Leader #2: Since the Danbury Hatters case many years ago I know of no case where a com-
pany has sued a union, or where the unions--with the exception of a few nuisance suits--(he grinned
at the CIO men) have sued the companies.
Attorney #2: It wouldn't do any good to sue a union unless it has financial standing. Would it be
unfair to fequire unions to provide adequate financial standing before being allowed to negotiate?
AFL Leader #1: Take the case of a little broom factory here in town, working on the wages
provided by the Fair Labor Standards Act. The workers seek to organize. They don't have any-
thing to start with, which is the reason why they want to organize. How are they going to provide
adequate financial standing?
Attorney #1: What are you going to sue 'em for--seniority? Does the union breach that clause?
Vacations? Grievances? Shop rules? Go right on down the line. There's no place where the
union could breach any standard contract except perhaps a no strike clause.
Manufacturer #1: Those present do not seem opposed to mutuality.
CIO Leader #1: We hope that mutuality extends a lot further.
Industrialist: The question at issue is whether laws can be written which will enforce mutuality.
I believe it's more a matter for educational processes. Penalties won't work.
Manufacturer #2: What if a bond were set up, with members of the bargaining union forced to
subscribe?
AFL Leader #2: The trouble is the way the labor act has been administered, rather than the
act itself. Go before the NLRB with a case. The agency's personnel changes and they reverse
themselves. The administration of the act has been atrocious. One way to improve the labor
structure would be, when once the bargaining unit is established, to give the employer injunction
rights against jurisdictional strikes--or to prevent members of one union from changing to another,
during the life of the contract.
The employer should be protected. Competing unions hold elections, and then someone
throws a picket line into the employer.
Attorney #1: It will take more than laws. The AFL has been having jurisdictional strikes ever
since it was organized. It is not a phenomenon which came into the picture with the CIO.
- 24 -
The chairman called for a show of hands. All were opposed to jurisdictional strikes.
There was an irreconcilable cleavage on whether there is mutuality at present. All were in
favor of mutuality.
The Closed Shop
Chairman: To what extent should the closed shop and maintenance of membership be readjusted?
CIO Leader #1: It is a question of union security. With the open shop the union has no way to
maintain order or discipline in the plant. Union security is beneficial to the employer, because
a) the unions have educational programs to make employees more responsible to the union and
the employer. Without union security, it is difficult to get people to meetings.
And b) without security, in order to increase union strength, the union has to set its
sights much higher. When the union shop is obtained, the employer has traded it for something,
perhaps lower wages.
And c) plants depend on productivity for profits. Union security means teamwork and
harmony. Where there are factions, teamwork is lost.
And d) there is the human element. An employee not willing to share the responsibilities
of a union is going to be handicapped. I don't recall a single strike where union security was
the cause.
Manufacturer #2: Management's opposition is often based on fear that a situation may develop
such as in some of the Eastern-controlled unions, such as Petrillo's. They are afraid of foster-
ing a situation under which they will definitely lose control of their businesses. If all union re-
lationships were conducted reasonably, for mutual furtherance of both sides, and there were no
demands for featherbedding, the chances are there would not be too much opposition to unionism.
The attitude of the union seems always to be, where do we do from here? There is apparently
not any point of saturation. The union's existence is dependent upon progressive demands.
Attorney #3: _A review of the first question of the evening is in order. Does the country really
believe in collective bargaining, or does it give mere lip service to the principle? The open
shop is a first attempt to kick the door shut on collective bargaining. To judge by current legis-
lative trends, the people are apparently in favor of the open shop. They can't be for collective
bargaining and the open shop at the same time.
AFL Leader #1: Unions and employers are both afraid of one another. There is a group of em-
ployers who wish to destroy unions, and that is their avenue of approach.
Manufacturer #1: I am not opposed to the check-off or to maintenance of membership. I see the
necessity for unions to maintain themselves, and workers become complacent after concessions
are gained and don't pay dues. But I am strenuously opposed to the closed shop, as it abrogates
the right of individuals to work as they please and the right of the employer to hire whom he
pleases.
CIO Leader #2: We're not in favor of closed shop unions, where the union hires the employee
and the initiation fees are sometimes rather large. When the worker is out of a job, he doesn't
have the money for a big initiation fee. During the war, the closed shop was exploited in some
sections. We believe in the union shop, which was beneficial to management during the war.
Responsible representatives of labor are able to work co-operatively with management and the
workers are given the benefit of collective bargaining. The union shop is the answer to indus-
trial harmony.
- 25 -
Manufacturer #1:
Exploitation of the closed shop is responsible for the repercussions in the
mind of the public--not management--which have led to current legislation against the closed
shop. Unions such as Lewis' coal miners are largely responsible for a general public demand
for a change. A recent Gallup poll showed 77 per cent against the closed shop.
AFL Leader #1: The plumbers have a high initiation fee--$150. It hasn't been raised in 20
years. Under a $2 an hour scale, a man can make that in two weeks. With overtime he can
make it in one week. The building trades unions are descended from the guilds, and members
are taken in to stay, as a life vocation, and an initation fee is designed by the craft organizations
to encourage the joining of men who will remain with the organization permanently. As for union
hiring, it is a benefit for the contractors in the building trades who can call the union for workers
and get them quickly. In the building trades, the union acts as recruiting agent for floating em-
ployment.
CIO Leader: $150 is too high.
AFL Leader #2: We need more democracy in the trade union movement. Even if it's necessary
to legislate it, more democracy would bring harmony. All officials should be elected by refer-
endum vote and dues should be set by referendum. Strikes should be by referendum, and salaries
of officers set by referendum. It would make those at the top more conscious of their duty to the
rank and file, and there would be changes from time to time in officialdom. Electing officers by
convention has brought tyrants. The labor movement is ready for more democracy, but we need
legislation to bring it about.
Business Man #2: I am in sympathy with the right of labor to organize--the AFL man stole my
speech. As for the closed shop, couldn't the union become so important as an instrument of bene-
fit for the individual worker and so attractive to the worker he would join voluntarily?
Public Representative #2: The time has come for labor to declare itself as setting and enforcing
the high standards which it now theoretically holds but does not practice. Among the old guilds,
standards of craftsmanship were very high and there were certain moral obligations. In some
cases, it was even necessary for the member to be a communicant of the church. It is time for
unions to assert high moral standards and higher standards of workmanship. Labor has fought
for its rights. Now let it cry its obligation to the public and to employers, a factor as vital as
wages and hours. It is becoming increasingly difficult to support unions.
Public Representative #1: This Utopian outlook is admirable, but unfortunately one must deal
with facts. How do the workers feel about the different kinds of shop?
CIO Leader #3: They are overwhelmingly for maintenance of membership. Every laboring man
is if he understands it. No law will be written to solve these things. The trend now will make the
situation even worse.
Editor:
This meeting has accomplished little in one sense. It is difficult to see any large area
of agreement. But we have seen the value of meeting when conflict seems inevitable, because no
one wants conflict. The people meeting here have seen that the search for truth is fascinating
and have very nearly lost self-interest and have spoken out of their experiences rather than out
of their prejudices. We can see that some here are worried about the unions eating up the coun-
try, and others are worried about whether unionism can survive.
-
Business Man #1: American business has accomplished some wonderful things. Isn't the so-
lution perhaps in production basis pay, or profit sharing? It may be that American business will
lead the way and get co-operation from labor leaders.
AFL Leader #1: There are more small businesses than large, and it's our experience that you
- 26 -
don't have as much trouble with small business as with big business. Who, for instance, would
pay the annual wage to construction workers? We can't have set rules for all types of business.
Manufacturer #1:
tively a part of law.
Laws CAN be drawn. Collective bargaining took a long time to become effec-
Laws can be drawn to rectify some of the bad conditions which have resulted.
Industrialist: Good industrial relationships are a byproduct of good engineering. Talk about
rights and obligations is pleasant, but some people don't know what the words mean. Good indus-
trial relations are up to management. I know of no case of labor trouble where the stupidity of
management wasn't to blame. Every plant should have a chief worrier. Each plant should appoint
someone to study these things. The buck is up to management. It's not an impossible problem.
All we need is to be intelligent.
-
Chairman: Time will work this problem out. Labor was exploited for years. During the de-
pression labor became politically dominant, and the Wagner Act went too far. Abuses have gone
too far. Now the pendulum has swung. I don't think there is the slightest justification for a law
to outlaw the closed or union shop. We can solve our troubles. The question is in its infancy.
We've made tremendous progress in the last 10 years. It is important that management not take
advantage of a temporary political situation. With maturity, we can find solutions. The matter
has been worked out in Norway and Sweden. We can do it, too.
- 27 -
PROPOSALS FOR LABOR LEGISLATION
Attendance at a discussion in Birmingham
March 1, 1947
Bess Adams, State Department of Public Welfare
Irving Beiman, Birmingham News
C. E. Beane, United Mineworkers
Harrison W. Blair, industrial engineer, T.C.I.
I. J. Browder, director, University of Alabama Center
Charles E. Cayley, State Teachers College
Robert W. Christofferson, publicity and public relations, C.I.O.
Thomas N. Crawford, United Mine Workers
James B. Davis, Associated Industries of Alabama
Charles G. Dobbins, editor, The Montgomery Advertiser
R. C. Dobson, state representative, National Foundation for Infantile Paralysis
H. G. Dowling, president, Alabama Institute for Deaf and Blind
Richard T. Eastwood, director, Commerce Extension Service, University of Alabama
Charles W. Edwards, Alabama Polytechnic Institute
Hallie B. Farmer, Alabama College
Charles N. Feidelson, Birmingham News
Roland M. Frye
Carey E. Haigler, president, Alabama C.I.O. Council
John J. Hanratty, United Mine Workers
L. T. Hawley, associate professor of management, University of Alabama
Dave Houston, Birmingham Post
W. H. Langston, field representative, C.I.O.
Christian Larsen, University of South Carolina
John F. Le Bus, regional director, National Labor Relations Board
William A. Major, State Department of Industrial Relations
Roscoe C. Martin, director, Bureau of Public Administration, University of Alabama
Hannah Miller, University Center
Helen Hill Miller, executive director, National Policy Committee
William Mitch, president, United Mine Workers
Burton R. Morley, School of Commerce, University of Alabama
J. R. Morton, University of Alabama
M. L. Orr, Alabama College
Frank Parker, Retail, Wholesale and Department Store Union, C.I.O.
Cy. W. Record, Birmingham Discussion Group Committee
Mrs. Frances Schulter, Retail, Wholesale and Department Store Employees, C.I.O.
John J. Schulter, regional director, C.I.O.
C. B. Smith, president, State Teachers College
J. Allen Tower, Birmingham Southern College
Charles F. Zukoski, Jr., First National Bank
- 28 -
Proposals for Labor Legislation
(The 38 members who attended the Alabama Policy Committee's
meeting in Birmingham on March 1, 1947, were drawn from education,
press, government, labor, management, and citizens' organizations.)
Recent Federal Labor Legislation and Proposed Bills
A brief resume of Federal laws relating to labor relations and the main points in bills
currently before Congress, was offered as a background to the discussion by a member with
government experience.
(The Handbook of Federal Labor Legislation, Bulletin No. 39 Part II of the U.S. Depart-
ment of Labor gives concise summaries of laws passed prior to 1941:
Laws relating to industrial relations
Labor provisions of Bituminous Coal Act
National Labor Relations Act
U.S. Conciliation Service
National Defense Mediation Board
Railway Labor Act
Maritime Labor Relations Board
Provisions of antitrust laws affecting labor
Anti-injunction Law
Prohibition of interstate transportation of strike-breakers
Labor provisions in Federal Bankruptcy Act
Laws relating to wages, hours, child labor, and working conditions
Fair Labor Standards Act
Hours of service of motor carriers
Hours of railroad employees
tution:
Adamson Act
Safety regulations on railroads
Labor standards under Civil Aeronautics Act
Laws relating to social security and workmen's compensation
Social Security Act
Longshoremens" and Harbor Workers' Compensation Act and
Workmen's Compensation Act for District of Columbia
Railroad Unemployment Insurance Act
Railroad Retirement Act
Federal Employers' Liability Act
Separate summaries of more recent acts and pending bills are available from the same source.
The Department's Legislative Report gives brief accounts of current and pending legislation in
the states.)
Reference was also made to the recently published results of a study by Brookings Insti-
I. Free collective bargaining is a more desirable method of settling labor disputes than
any form of compulsory settlement by government agency. The reasons for this are:
- 29
-
1. There are no generally accepted standards for settling
industrial disputes.
2. Government settlement of disputes is commonly colored by ♦
political expediency.
3. Consultatory settlement leads ultimately to government
control of industry.
4. A prohibition of strikes is not readily enforceable.
Free collective bargaining means strikes and lockouts but such stoppages would not be as
detrimental as compulsory settlement. The adoption of the suggestions discussed subsequently
will tend to lessen the undesirable results of such stoppages.
II. Collective bargaining should be carried on between a given employer and his own em-
ployees. Industry-wide bargaining has been tending to spread and is undesirable for the follow-
ing reasons:
1. It places the public at the mercy of a labor monopoly.
2. It tends to result in the political determination of the
conditions of employment.
3. Wages cannot be set in relationship to the efficiency
of the producer.
Two steps should be taken to minimize the possibility of industry-wide bargaining.
1. No bargaining unit should be designated that would include
the employees of more than one employer.
2. Concurrent concerted action by a labor organization against
two or more employers in the same industry for the same
objective should be made a violation of the anti-trust laws.
III. Steps should be taken to make collective bargaining an effective method of settling
disputes.
1. Labor organizations should be obligated to bargain collectively
as well as employers.
2. Collective agreements should be enforced against employees
as well as employers.
IV. Hence there should be prohibition of 1) sympathetic strikes; 2) jurisdictional strikes;
3) most forms of the boycott; 4) organizational strikes; 5) strikes in violation of contracts.
To prohibit such activities the following means are available:
1. The bargaining rights of the union involved could be suspended.
2. Employers could be permitted to discharge workers who take
part in such stoppage.
3. Damages could be awarded to employers against the union that
authorized such concerted action.
-
-
V. The National Labor Relations Act should be amended so as to give adequate protection
to union and non-union employees as well as employers.
1. Any overt act of an employer or a union that interfers with the
workers' right to organize or not to organize should be forbidden.
2. Any form of the closed shop should be forbidden.
3. There should be no interference with the employer's
freedom of speech.
VI. The National Labor Relations Board should be modified.
1. A new board with a large membership should be created.
2. Decisions should be based upon a preponderance of evidence.
3. The task of prosecuting and the task of deciding cases should
be separated.
Opening the discussion, a member asked whether organized labor has backed any parts of
any of the bills currently before Congress, or offered any proposals of its own? The government
administrator said that no bills had been submitted: he referred to the testimony of Philip Murray
of the C.I.O. before the Senate Labor Committee on February 19, in which all the pending bills
were opposed, and to the testimony of William Green of the A. F. of L. on February 26, in which
the only proposals found acceptable were the registration of unions, the requirement of financial
statements, and the amendment of the NLRA to give the right of "free speech" to employers.
A labor member said that there is no need for the radical anti-labor legislation currently
proposed. He thought that the press has carried a great deal of propaganda against labor, and
that labor has done a poor job of presenting its case. He did not believe that labor will be docile
in the face of this legislation, in the face of acts calculated to break up unions into smaller units
and to make them liable to suit. He remembered the days when deputy sheriffs paid by the corpor-
ations kept organizers off company property; and said that today many unlawful acts credited to
labor are the result of planted stooges. The laws now being designed, he averred, will not do the
job of bringing industrial peace--only management and labor can do that. Labor is always the
underdog, and if necessary will fight.
A journalist professed himself concerned over this approach. Why has labor not advanced
legislation that might help the country out of the present deadlock? Why isn't labor interested in
working out some kind of arrangement concerning the integrity of contracts?
No labor contract, the previous speaker replied, is ever made on an equal basis. Employers
reserve the right to hire and fire whom they want; the union must take in the employees they select
and try to get them to live up to the contract. There are more violations on management's part than
on labor's. It is certainly not up to labor to offer bills: in this state, during the war, labor met
with the Governor and agreed not to present demands if he would not let anti-labor legislation be
enacted, but the agreement was not kept.
President Green, he said, has concurred as to the desirability of unions' filing financial
reports every six months; there is nothing to the general propostion that labor misuses its funds.
Several members pressed this speaker on his statement that no binding labor contract can
be made because the parties are not bargaining from equal strength.
-
- 31-
A management representative carried the point further. He thought there is need for labor
as well as management to look critically at the present situation. During recent years a consid-
erable body of legislation has been enacted to give unions a recognized place in the economy.
Under it, abuses have occurred which need correction.
Many of the bills now being offered, he continued, are no doubt ridiculous. Some are striving,
perhaps awkwardly, to meet the situations that exist, particularly difficulties arising from industry-
wide strikes in essential industries like coal and steel. How can disputes in such industries be
handled without complete interruption of economic life?
N
In such industries, he went on, unions now have monopolies comparable to the large corpor-
ate monopolies with which the country earlier became familiar, and for which two techniques of
treatment were developed: the anti-trust laws, intended to break corporations down into small
units; and regulation, of the sort applied to utilities whose monopoly position was unavoidable.
In the case of labor monopolies, he suggested, the only way of exercising control would
seem to be some form of compulsory arbitration, some machinery for getting decisions short
of interruption of work. He thought that interruptions in these industries cannot be permitted.
As matters for discussion, he proposed: 1) Measures to enforce the integrity of contracts
by making the union responsible in damages for violations. (He believed labor would take a lot of
wind out of its opponents' sails if it said yes to that one). 2) Prohibition of mass picketing, on the
ground that with the courts and the NLRB available for protection, such picketing injects violence
into a situation where it is no longer necessary. 3) Machinery to promote common interests,
such as councils within industry, profit-sharing, etc. At present, positive hostility exists in many
quarters; the question is looked at too much from the point of view of opponents in two hostile camps.
The public's interest in the situation was emphasized by an educator with past political exper-
ience, who said that very often when labor and capital get into a fight the rest of the people are lost
sight of. Yet neither labor nor capital--nor the government men--are very numerous when compared
with the country as a whole. There's a big body that doesn't properly belong to either side.
This member said he was sorry it appeared to be so hard to make a just contract. The cor-
porations do have some advantages, but so does labor, and somewhere in there the public ought to
be represented. The Alabama Power Company is a public utility, and it's regulated. Labor is a
public utility, too, nowadays, and when labor attempts to enroll the general public as part of its own
group it's taking in something that doesn't belong. There should be a public body to take up these
matters.
Discipline Within the Union Structure
Isn't it possible to accomplish something within the present union structure, an economist
questioned? During the war, what with the check-off and the closed shop, the unions took in millions
of new members. They haven't yet had a chance to examine them and educate them.
But many national and local unions have the power to expel. Why can't the problem of recal-
citrant members who engage in wildcat strikes be cleaned up from within?
The labor member who had previously spoken said that he was not unmindful that a national
strike call affects the whole economy. He thought there should be no strike until everything else
has failed. But if arbitration is to be required, there should be definite machinery with as nearly
as possible a disinterested body to handle cases on their merits. (Otherwise management just
passes the buck to government--it should not be forgotten that an arbitration case can't exist until
an employer refuses to do something.)
-
- 32 -
Labor, he went on, could live under that kind of legislation, but not under a law that would
make the union responsible for the acts of its members--though individual responsibility might
perhaps be all right.
As an instance of the weakness of some arbitral procedure, he cited a dispute in which
failure of the men to work on Labor Day caused an employer to attempt to invoke the dollar-a-
day penalty for wildcatting contained in the contract. Since the union held this to be a legal hol-
iday, the matter went for arbitration to a judge. This arbitrator made no decision for a month
and a half and then suggested to the union head to compromise on a 50¢ basis. The union head
declined and proceeded to bargain the case out directly with the employer in connection with
another matter that had arisen meanwhile.
Reverting to the question of internal union discipline, the government administrator pointed
to a number of recent contracts, such as the Ford Motor Company's, which cover discipline of
union members by the union. He also noted growing improvement in partnership arrangements
on subjects proper for the functioning of both groups. Recognition of the problem of basic secur-
ity is, he held, causing increasing interest in the idea of an annual wage.
Labor unions have a difficult problem in applying discipline, the previous speaker from
management remarked. Many of their members have not previously been accustomed to member-
ship in groups. Moreover, union officers have to produce results in order to maintain their posi-
tions. But the union strength lies in the men acting as one in making of contracts, and their rights
under present law involve an obligation to live up to the contracts they make. If they were held
liable for violations, he said, it would help in the matter of discipline and work toward the long-
term interest of the movement.
Another union leader remarked that however much the alleged friends of labor use the terms
labor monopoly, etc., he didn't feel much like a monopolist. He doubted if there is any easy solu-
tion to present problems--the human relations being dealt with are in very volatile form.
He cited two cases with which he had recently been concerned. In one company, the con-
tract permitted the reopening of wage issues on January 25. In this company, whose workers are
all white, the top wage was 78¢ an hour. The union representative asked for an increase. When
the demand was refused, he offered arbitration. The employer saw no need for a third party to
tell him what to do. The contract does not provide for compulsory arbitration. What is there to
do besides strike?
In another plant, during the union's initial efforts to organize last year, 20 people were
indirectly fired. The NLRB ordered reinstatement, with back pay. The pay amounts to a con-
siderable figure. How to obtain compliance?
When one has lived through case after case where employers fire men when organization
is going on, this member said, delusions of persecution are apt to form, which keep the union
organizer from coming to the bargaining table in a wholly unemotional mood.
C
As to the proposed changes in labor law, this member thought too much revision in the
NLRA would cause the two sides to line up and have it out. The rank and file of American workers,
he declared, are not Communists and believe in the American system--railway brotherhood mem-
bers, for instance, are substantial citizens. But they will be forced to the left in proportion as
they lose faith in the government and their employers.
Jurisdictional strikes, such as those in Hollywood and in the construction industry, the
maker of these comments thought, are inexcusable.
He approved the accounting of funds, but held that financial statements should be kept confi-
dential within the unions, lest a low treasury situation become a handicap at the bargaining table.
- 33 -
*
Many unions, he said, are agreeable to the idea of compulsory arbitration; but those that
oppose it are not alone in their opposition.
It would be a calamity to limit industry-wide bargaining. The baking industry in this area
has practised it, with just one four-hour wildcat strike in six years. It is a stabilizing factor
permitting the firms offering good conditions to compete on an equal basis.
This member had just returned from an official overseas mission. Let's keep both feet on
the ground, he said. The country may be suffering from a poor wage policy, and from some poor
political direction in Washington. But in Europe and Asia, every strike is political, and they strike
at the drop of a hat.
An educator asked what the group thought of the Brookings Institution's proposal to separate
the judicial and the investigatory functions of the NLRB. Attention was called by one of the govern-
ment men to the special skills acquired by administrative personnel as a result of dealing constantly
with the same subject--a court to which all sorts of cases are assigned cannot possibly acquire
them. Moreover, as a management member pointed out, the separate assignment of personnel
required under the Administrative Procedures Act of 1946 makes confusion of the investigatory
and the judicial functions less likely.
Improvement of In-Plant Relations
Opening the subject set out for the first part of the afternoon discussion, an economist, who
had had wartime experience in a manpower job, said that improvement of in-plant relations rests
on collective bargaining associated with sufficient wisdom on the part of the management and the
union to move on from horse-trading to cooperation. The union needs to have sufficient knowledge
of the business not to make impossible demands; the company needs to provide itself with a means
of being aware of the needs and desires of its workers by hiring specialists in the labor field just
as it has specialists for purchasing or cost accounting.
Provision should be made in the plant structure, he continued, for day-to-day continuity of
labor-management relations; normally there is not enough contact between the two sides. (One
and two-year contracts are much too short term--it is far better to have a contract established
with a view to permanence, with changes by amendment rather than by expiration and starting
over.)
On the company side, this member saw an obligation to install safety devices without having
to be pressed into doing so, and to set up grievance procedures that are spelled out enough to
avoid argument.
Comparably, the union has an obligation to see that safety measures are observed, and to
educate and develop its people to deal ably with management as shop stewards, etc.
Wage structures in a plant, an educator thought, should not be job evaluation schemes im-
posed by management; they should be joint ventures, undertaken with an eye to fairness among
workers on the same job. And thereby, the economist agreed, avoiding the traditional union
antagonism to time study and piece rates.
What about labor-management committees, asked a journalist who had not previously spoken?
The economist thought the fanfare with which those that had started in wartime were initiated,
plus the fact that many of them had degenerated rapidly into nothing more than grievance committees
had detracted from the reputation of a useful device for developing community of interest.
A labor member cited the difference in technique between two companies in the area, both
employing considerable Negro help. In the former, a mixed committee goes once a month to the
1
- 34 -
head office, with any grievances or suggestions which it may have. (One of the latter recently
saved the company $15,000.) The resulting atmosphere is such that there have been no stoppages
in the four years since a contract was signed. In the other company, the management is unwilling
to have meetings in the office; in-plant meetings are conducted in a remote room and contract
negotiations are done at the union hall. The resulting good will is considerably less.
This is a sectional problem, the union representative went on, but there are different ways
of handling it.
Training Middle Management
A management member who had not previously spoken said that particularly in large com-
panies, channels of communication must be further developed. There may be good ideas in the
board room, shared by officers and directors, but they don't necessarily work down through the
supervisory structure. Foremen especially need training--not just an initial course but contin-
uous development.
In one of the larger companies in the area, he continued, there has recently been review of
the firm's incentive plans to eliminate inequities, with union participation in the process.
G
An economist strongly agreed about the need for establishing accurate, two-way lines of
communication; a colleague thought there is plenty of room for training on up a few levels from
the foremen. He mentioned that in one of the major war production centers of the State there
hadn't been a trained personnel man in town during the whole period--just some ex-football
coaches.
Training Arbitrators
A good many members of the group, willingly or unwillingly, appeared to anticipate some
form of compulsory arbitration of labor-management issues in key industries, as a last resort
when voluntary negotiations fail. One of the labor men said he was naturally opposed to it, but
how else could the situation be handled if the employer says no and they can't strike?
That, as one of the economists put it, is the crux of the matter, but if the country requires
the two sides to arbitrate, it must furnish arbitrators whose qualifications bear more relation to
the subject than that of being a respected minister or a community-spirited lawyer. Moreover,
if decisions on wages are to be made under arbitral procedure, much more public policy must
be laid down than has so far been evolved. Otherwise, the arbitrators have little to guide them.
An arbitrator is like a baseball umpire, he went on; to be good, he must know the game and
apply the rule book. And there has to be a rule book. (And a little spring training does no harm,
a commentator commented.)
The efforts of the American Arbitration Society were cited, and much of the personnel of
the War Labor Board's panels was thought to offer material for arbitrators. Just the same, a
labor man remarked, the number of men who haven't at some time or another identified themselves
with one side is strictly limited.
And the number three man in a three-man panel, an economist familiar with the position
added, is certainly the man behind the eight ball.
Two members brought up the alternative to occasional arbitration by outside arbitrators--
that has been tried by various branches of the garment industry--an impartial chairman who is
thoroughly and continually familiar with the business.
- 35 -
Reference was also made to the Federal Conciliation Service; an economist thought its
men who have have had experience and training are good, though he intimated the staff contains
a certain number of political appointees who are labor men shoved in as castoffs from their own
unions. The two qualities he held essential in a conciliator were familiarity with an industry's
techniques, and basic honesty.
Various incentives to production and good relations which could be applied on a plant scale
were reviewed. A management participant noted a drop in man-hour productivity in the course.
of the postwar months; he thought a cooperative employer-employee attitude is basic to produc-
tion, and, through production, to an increased take on the part of the working man.
Many companies, he believed, would go into profit sharing as a means of developing commun-
ity of interest; what about a plan of increased compensation based on a prearranged scale and de-
pending on the productivity of the plant as a whole?
One of the union men present announced himself in favor of incentive plans to encourage
production--mass production is a condition of consumers being able to buy things cheaply. Workers
sometimes hesitate to accept such plans lest the increased production they induce become the basic
production at the time of the next contract. The Tennessee Coal & Iron Company's incentive plan
was initially opposed by the union, but later accepted.
C
A second labor member remained skeptical; what companies give under such plans they can
take away; many men have been in industry forty years--that's their life--and incentives are too
often incentives for the young man to beat the old man out of a job.
A third labor leader agreed that, particularly where an incentive plan goes up to a certain
point and then falls off, men may feel they are working themselves out of a job, but he himself
had no quarrel with a fair incentive system. He also thought there were possibilities in the annual
wage proposal; he believed one or two of the country's largest companies are holding back only
because they didn't want to be out in front in installing such a system.
A journalist suggested that there is also more possibility in profit-sharing than has so far
been explored; a number of such plans are currently in operation in Alabama--he knew of one in
a dairy and one in a textile mill. (A union man injected the comment that the profits shared by
the mill have risen sharply since the beginning of serious organization efforts.)
Restrictive Practices of Unions
A panel discussion--chaired by a commentator, with participation from two labor men and
two public representatives and with a management member as kibitzer, spent part of the after-
noon discussing union practices restricting either output or activity by other workers.
The commentator referred to Peter Drucker's recent articles in Harper's Magazine, par-
ticularly his contention that labor peace is not mainly a matter of economics. Wages, Mr. Drucker
insists, are not the major bone of contention. Human considerations are--failure to recognize
that the worker is a human being and a citizen of his plant. The failure of union leadership to
recognize the individual's desire to make himself felt as a member of the community, Drucker
holds, is a measure of its failure with the rank and file. If this is true, would a day of atonement--
of self-examination and improvement--be a good idea?
Technological Advance. The union attitude toward technological advance that takes the form
of featherbedding and jurisdictional disputes, one of the public mem-
bers, said, can lead only to lower production and higher costs, and not to the job security which it
is intended to foster. What can be done about it? Little, legislatively, he thought, but would there
be possibilities in a disputes board, to which disputes not settled within a limited period by the
unions themselves should be referred for findings?
- 36 -
Such a proposal, he urged, would leave the problem to the unions initially, and thereby
provide a test of their sincerity in wanting a quick answer. Then, reference of successive dis-
putes not handled by unions to the same board would permit a series of decisions to be built up
as a guide to subsequent decisions.
The union members seemed to agree on the need for labor action. An A.F. of L. man be-
lieved that jurisdictional disputes create more public antagonism than any other single thing that
labor does. He thought the American labor movement should set up a tribunal within its own ranks
to act on these problems. A C.I.O. man said that inter-union disputes are proving a malign cancer
in the A.F. of L. They are based on a certain type of psychology which assumes a property inter-
est extending over a certain type of work. The sort of featherbedding represented by painters
using three-inch rather than six-inch brushes, or brushes rather than spray guns (defenders of
such practices, he noted, are never present at meetings like these) do not really provide work.
He himself was for new machinery and increased production, but its introduction should bring
benefits to the workers as well as the general public.
The other public representative on the panel thought there would be less antagonism to new
devices if opportunities were more available to learn a new trade or to be retrained within the
trade after adoption of a technological change. Otherwise, workers are confronted with unem-
ployment after the installation of new machinery. His colleague added a recommendation of dis-
missal wages for workers displaced by technological change.
An A.F. of L. member stressed what the C.I.O. man had said about workers getting a fair
share of the gains resulting from mechanization. But he emphasized the need for industrial pro-
gress in a nation that is setting the pace for the world and forced to solve problems no other nation
has. Britain, he commented, has opposed mechanization of production, and the result is a one-to-
six ratio of output per man hour in coal as compared to this country.
Labor unions are not the only economic group following restrictive practices, a public mem-
ber commented: agriculture has quite a record in that field, using the mechanism of politics and
government programs, the professions know how, and management does it through patents. (Also
through the maintenance of fifth vice presidents in charge of public relations, a C.I.O. man inter-
jected.)
S
Closed Shop and Union Shop. Discussion of this topic was preceded by definitions in which
the distinction was drawn between a closed shop agreement,
under which an employer gets his employees through a union of which they are already members,
and a union shop agreement, under which employees must join the union if they continue to work
in a factory with which the union has a contract.
A C.I.O. member charged that the current contention against the closed shop is actually a
campaign to draw support from anti-union elements for an attack on unions in general. The cam-
paigners pick on something that seems like a violation of human rights, and this opposition re-
bounds on the union shop, which provides that a worker, after a probationary period, must become
a member of the union. Yet only under such an arrangement, he urged, can the employer deal with
one organization and one group of officials, under one contract covering the whole plant and all the
workers--who feel a corresponding responsibility.
The management kibitzer underscored a difference. A union shop, which gives the employer
the right to select his men, provides a period of probation and then union membership, is good, he
said. But the situation is different where an employer cannot hire anyone who is not already a
union member, and where craft unions operate as closed corporations keeping people out and keep-
ing down the numbers of available craftsmen of given skills.
Why does one hear so much talk about forcing men to join unions, an economist questioned?
- 37 -

NATIONAL POLICY COMMITTEE
NATIONAL PRESS BUILDING
WASHINGTON 4, D. C.
HI
42
Preliminary Draft
Not for Publication
WORKING PRINCIPLES
FOR LABOR MANAGEMENT RELATIONS
-
Fourth Series
Reports of Six Meetings
Division of the Proceeds of Production
Negotiations in the Lumber Industry
Portland, Oregon, January 9 & March 20, 1947
Deadlocks During Collective Bargaining
Pending Labor Legislation
Philadelphia, Pa., February 5 & 19, 1947
The Placing of Responsibility
Boston, Mass., February 18, 1947
Getting Along Locally
April 11, 1947
Little Rock, Ark., March 2, 1947
Last November, the NPC invited consideration, by cross section groups in
the major areas of the country, of working principles for labor-management
relations in an economy where the basic industries are fully organized.
Summaries have previously been issued on meetings in New York City,
Minneapolis, Denver, Philadelphia, Cleveland, Chicago, Memphis and
Birmingham.
INIVERSITY OF MICHIGAN
GENERAL LIBRARY
Ford
53754
Division of the Proceeds of Production
(The Portland Policy Committee held a meeting on
January 9, 1947. The background of those attending
included law, medicine, education, insurance, bank-
ing, lumbering, government service, labor, industry.)
The question of how agreement could be reached on a formula for the division of the
proceeds of production was raised in some initial remarks by an economist. He outlined the
problems involved and the factors that must be taken into consideration in a division of the so-
called 'pie' of national production.
In the first place he knew of no workable formula nor any clear cut method of achieving
a formula. Although one of the main purposes of production is to produce for the consumer,
there is a tendency to ignore him in the division of the proceeds of production and to concen-
trate on a division of such proceeds between labor and management. More emphasis should be
given to treating the consumer as a separate entity and giving him the representation that was
at least one of the aims of the NRA codes of fair competition.
Although there is no workable formula there is an 'ideal' formula that the distribution
of the proceeds of production is best achieved in the private enterprise system if there is per-
fect competition. Such an ideal formula could be realized only if employers, laborers and con-
sumers were omniscient. In that event an employer would know the value of the employee and
pay him what he was worth.
This unachievable ideal at least points up some of the problems involved:
1. Monopoly thwarts proper distribution by restriction.
2. Lack of information is an important impediment to equitable allocation.
Supporters of the free enterprise system seem to think secrecy is nothing
to worry about. But an employee knows very little and therefore has not
the opportunity to make choices.
3. Emphasis on division of spoils between management and labor is errone-
ous. Benefits of technological improvements should be distributed as if
there were a perfectly competitive system. Best example can be found
in the developments in agriculture where technological improvements
have been made mostly by government, e.g. hybrid corn. Certain farmers
who are more alert, are used as guinea pigs by government agencies. They
get a jump on their neighbors and get the initial profits. But as this gets
known others adopt the improvement and price of corn goes down. Thus
the technological advance is passed on to the consumer ultimately. That
is an ideal way of handling technological advances in other fields. There
should be no long-term monopoly among the few in the know.
For example, in the automobile industry, it is not desirable that the rewards of techno-
logical improvements go exclusively to management or labor. They should result in lower
prices of cars to consumers. One government agency which can effect the result is the Anti-
Trust division of the Department of Justice.
During the late 20's there was greatly increased productivity, but there was a relatively
small decline in prices in the face of a great increase in profits. This built up a situation which
resulted in the crash. There should have been a decline in prices or second best, an increase
in wages in these particular industries where technological improvements brought lower costs.
- 3 -
Major factors in the problem are:
(1) Rise of giant corporations resulting in
(a) monopoly in sale of product
(b) monopoly in hiring of labor, e.g. an expert in an automatic
telephone exchange can find only one employer
There would be no role for labor unions to play if competitive system were ideal.
need for labor unions is paramount in view of lack of free competition. Unions are therefore
important contributors to the national welfare. Only twice during and after 1st and 2nd World
Wars have we produced all that we were capable. Some better way of conducting our organized
activity must be found or there will be unemployment. World War II particularly was an out-
growth of failure of the economic machine to provide work in Europe and elsewhere, leading to
depressions and explosions.
But
How to maintain full employment is the big problem. Lack of effective demand for goods
springs from lack of funds in the hands of labor and other consumers. One argument for labor
unions: The greater equality of distribution of wealth, the more effective the demand. But the
process of raising wages is not an adequate solution. There is a large percentage of population
not in the labor movement and unorganized. Start in at bottom with those incomes which are
lowest and raise them.
-
Lawyer: One theory of the cause of employment is that there is an imbalance created
by uninvested savings which do not go back to create capital goods. Keynes said: stimulate
investment.
Educator: Thinks Keynes' theory not so important as increase in ability to consume.
Banker: Consideration should be given to what government instruments effect size
and division of the 'pie' of national income.
Labor Economist: Tendency is to emphasize government too much. If we want free
economy we ought to think about what we as individuals can do. Economy is out of joint. Em-
ployer has his organizations; labor has its unions; but the consumers are the ones who lose.
Proposes consumer collective bargaining.
Labor Member: Industrial relations should work to increase size of 'pie'. Fear of
working itself out of a job is main deterrent to labor's increasing the size of 'pie'. Need is
some assurance of full employment.
Several then asked how fear was to be eliminated, by full employment acts, an advisory coun-
cil, etc.?
Industry Representative: How about establishing a guaranteed minimum wage plus
division of profits over a certain amount?
Labor Representative: Not a good idea. Impossible to find a formula. Management
and employees must bargain it out in good faith. Increase productivity--the Southern lumber
worker is low level. He hasn't purchasing power. Suggest floor under wages to lift buying
power and a lid on corporation profits as incentive to lower prices.
Educator: Doubts whether Southern mills' profits are greater. If you raise minimum
wage there you put men out of work. South is just not economically capable of supporting higher
- 4 -
wages. Need for migration out of South. Low productivity is due in part to lack of education.
A national overall program for employment is required. Union activity won't help much
in the South. Lots of resources in South are not manufactured there. It is cheaper to ship re-
sources to New England and manufacture the products there.
Industrialist:
113 Southern sawmills were shut down because of ceiling price.
Labor Representative: Whole industrial South is still in horse and buggy stage. The
government can help by introducing modern methods. Social security and health problems
should be worked out. CIO organization has forced employers to introduce western methods.
Price Expert: Management and labor both interested in take home pay. Cheaper unit
cost to consumers would increase demand. Also lower income tax in lower brackets.
Industrialist: If employer turns out cheaper product then he should get bigger profits.
Economist: It is too bad that the government can't do with general industry what the
District of Columbia does with a public utility company--permits larger percentage of earnings
on rate base, the lower the rate charged.
Industrialist: There was too much government control after the depression of the 30's.
Had there been a minimum of government control would not there have been a better employment
situation?
Labor Member: Doubts that there would have.
Industry Representative: Hard to get employers to agree on anything. Too much talk
of Capital and Labor instead of Paid Management and Labor.
Labor Member: Capital still controls cut of 'pie' of production.
Another Labor Member: There isn't a great differentiation between labor and consum-
ers; they are substantially the same.
Economist: Suppose that wage negotiations are underway. The employer says we could
raise wages if we could raise prices. Under those circumstances would you say raise wages?
The labor member thereupon admitted that labor is wrong in some instances.
Thinks wage increase should have been allowed but not at consumer's expense.
Lawyer: Hasn't bought a 1947 auto. New car costs 60% more now. Yet workers are
demanding more wages, which will again increase price. Consumers being priced out market.
Problem solved in 1913 by Ford stepping out with low price car and as a result wages were in-
creased by Ford. No similar situation now.
Industrialist:
How about the plastics and construction industry. Unions should think of
Doctor:
consumers.
Insurance Man: What progress is being made by management and labor toward common
objective? Perhaps labor is afraid of working itself out of a job. Why not work together to
make production larger?
Industry Representative: During war labor and management did a swell job of getting
together. All kinds of problems solved.
- 5 -
Lawyer: Fear of working out of job not present during the war. Moreover, govern-
ment was the purchaser. Taxpayer footed the bill.
Labor Member: In spring of 1946 labor proposed to management that committees of
both management and labor study cost of living. Suggested that management request price
levels be rolled back but management refused. Profits and prices are higher.
Industrialist: Profits in certain industries are higher but in many industries the
profits are so small that management is worried about future operations. Also, if men had
produced and worked honestly prices would not have gone up. Licked by lack of production.
Also interruptions by artificial strikes.
Records in lumber industry show better productivity per man hour
Labor Member:
during last year.
Industrialist: In Danville, Illinois, 80% of men living at home, or wives are working.
Lower standard of living now than before war because of lack of production due to artificial
causes.
In one large industrial plant only one man in four was working.
Banker: Is it true that in lumber industry more board feet per man hour is being pro-
duced now than before the war?
Lumberman:
Man hour production is about level. No technological developments of
significance.
Labor Representative:
produced.
Productivity doubled in logging. In 1946 lots of small stuff
Productivity about level if you consider different standards.
Forestry Representative:
Wages tripled. Productivity doubled.
Price Expert: How can you talk about national income without taking into considera-
tion world problem. Are you going to raise the world level or lower the U.S. level?
S
Economist: Although we cannot entirely separate the national problem from the world
problem, we don't have to raise the world level in order to raise ours, if the U.S. retains its
world markets. Increase world trade by reducing trade barriers. The U.S. doesn't have to
compete with labor as long as it stays in China or Europe.
Insurance Man: What about increase in productivity where incentive plans are adopted?
Industrial Representative: Labor doesn't want speed up or incentive pay.
Industrialist:
In the midwest there are many incentive plans. They are a complete
answer if worked fairly. Admit it is capable of tremendous abuse.
Labor Member: Other ways besides profit sharing and piece work. Workers are in-
terested in technological improvements.
The professor of economics ended the evening's discussion by again emphasizing the im-
portance of the consumer. Although the employer must have a reasonable profit and the employee
must have reasonable wages, some thought must be given to the consumer who is not represented
by unions. Technological improvements must be passed on in part to benefit the consumer.
SID
- 6 -
Negotiations in the Lumber Industry
A second meeting of the Portland group on the labor-management topic, held March 20,
was chiefly concerned with the specifics of relations in the lumber industry.
A clergyman active in labor-management negotiations emphasized the importance of
solving specific problems of American production as the major means of maintaining the Ameri-
can way of life.
Fighting Russia is not the way to stop the spread of Communism, he said; an effective
alternative, accompanied by an almost religious fervor to accomplish it, and worked out case
by case, is far more telling.
Laissez-faire policy, under capitalism, he went on, has not provided a decent standard
of living and has produced recurrent crises. He thought Stalin is counting on another national
crisis, and doubted whether the American system could survive it.
Stressing the importance of living up to principles rather than merely preaching them,
this member outlined in detail some labor-management meetings held in the lumber industry
on that industry's problems. He listed what labor had wanted, and what it offered in return, as
expressed at these meetings. Labor had urged:
1. Assurance of continued employment at a fair wage.
2. Consultation with management on joint problems.
3. Participation in ownership and profit.
Compensatory concessions that had been suggested were:
1. Agreement not to strike or engage in jurisdictional disputes.
2. Provision of able and competent leaders for negotiation.
3. Increase in production.
Out of the various plans developed, however, no action came. The meetings were attended
by top caliber representatives of both management and labor, and seemed promising of results.
But nothing happened.
The maker of these comments felt that such consultations should go forward, first on a
local and then on a national basis, but that something should then be done.
The ensuing discussion dealt in part with the Communist issue, to which the group is
planning to devote an entire subsequent session, and in part with the specific negotiations just
described.
A lawyer asked if labor and management haven't missed the boat by not trying to get an
agreement on general objectives. As it is now, their negotiations are based on conflicting sets
of specific demands.
An AFL labor leader referred to the difficulties that may arise through having issues
brought before union membership at inopportune times. He thought that as troubles develop
they are likely to come out in meeting anyhow. He expressed disappointment at the tendency of
management not to take cognizance of recommendations coming from the union side; he doubted
if the management leaders referred many of them to their constituencies.
On the management side, a lumberman criticized unions, particularly the building trades
unions, on the ground that they restrict the number of journeymen and thus block the creation of
adequate supplies of skilled labor. Another restriction results from their refusal to use material
- 7 -
manufactured in other areas.
Industry-wide contract negotiations were also opposed by this member, who said they
take away from local unions the power to make decisions in the light of local conditions.
This last point was discussed around the table: the opinion was expressed that negotia-
tions that concern costs and prices can well be on an industry-wide basis, but that conditions of
employment are better dealt with locally.
A lawyer asked if at the labor-management meetings referred to earlier, any thought
had been given to the consuming public. The clergyman replied that not much consideration had
been given to that angle, and he regarded that fact as a weakness.
The theory of third-party decision in labor disputes was opposed by the labor representa-
tive, who held that management and labor were in accord on this point. He also expressed mis-
givings about the guaranteed annual wage. Labor wants an American Standard of Living--enough
to pay for health, decent family life, education for the children. But would a guaranteed wage
destroy initiative?
The representative of the lumber industry was in accord on the undesirability of guaran-
teeing an annual wage. They said the way to get it was not through a guarantee but through con-
tinuous production.
S
- 8 -
DEADLOCKS UNDER COLLECTIVE BARGAINING
Attendance at a discussion in Philadelphia, Penna.
February 5, 1947
Presiding: Dr. George W. Taylor
Abe Belsky
Merlin Bishop
Joseph Burke
E. J. Coil
Donald Craig
Edward Davis
Robert Dechert
Gerald F. Flood
Alexander H. Frey
Elizabeth L. Hallstrom
Helen D. Harbison
Kazimier Miller
Richard T. Nalle
Walter M. Phillips
I. S. Ravdin
James H. Robins
Bennet F. Schauffler
Lewis M. Stevens
Nochem S. Winnet
Waist & Dressmakers Union
United Automobile Workers
Building & Construction Trades Council
National Planning Association
Newspaper Guild
Attorney
Attorney
Common Pleas Court
University of Pennsylvania
Phila. Group, National Policy Committee
Family Society
United Steel Workers of America
Midvale Company
Bureau of Municipal Research
Surgeon
American Pulley Company
National Labor Relations Board
Attorney
Municipal Court
- 9 -
The agenda for the meeting was as follows:
a.
b.
C.
Deadlocks Under Collective Bargaining
d.
Should there be any legislative limitations upon
the right to strike?
Should there be any resort to compulsory arbitra-
tion, or to any court or administrative body, for
final and binding determination of any terms of
the contract?
How can the public interest be best protected when
such deadlocks arise?
Should governmental employees and employees of
public utilities be accorded the same rights as
other employees with respect to (1) collective
bargaining and (2) deadlocks arising over terms
and conditions of employment?
Chairman:
What can be done for the cause of industrial peace--must strikes be used
as the only alternative? Personally, I believe that there can be no collective bargaining without the
right to strike and lock-out. Actually they are the motive power for agreements. This of course
would not be the case if the golden rule prevailed.
The emphasis on the right to strike has overshadowed its function if its
primary purpose is to get people to agree. When the right to strike puts primary pressure on
the public and not on the opponent in the situation the Government must interfere, i.e., in public
utility strikes, in widespread coal and steel strikes, etc.
Several problems are posed in a discussion of deadlocks: What should be
done in the breakdown of negotiations where the public is not directly affected? What should be
done when the breakdown primarily affects the public welfare? What about strikes that are
undertaken to compel the employer to break the law, as when a union having lost an election
tries to force the company to recognize it, regardless? What's to be done when collective bar-
gaining breaks down--is a strike inevitable?
Industrialist #1: I've recently returned from the Allis-Chalmers plant and I'm
impressed by the relation of the situation there to the subject we are to discuss this evening.
There's a plant with an investment of 50 to 100 million dollars. It has to operate where it is or
not at all. What happens when the employees go on strike? In order to keep the operation going
the company sublets work to small machine shops in the vicinity and the striker has almost
nothing to lose by a long, drawn-out strike. It must be made possible to impose a greater penalty
on the worker who strikes. If both sides can't agree on a new contract after 30 days the law
should provide that employees cease to be employees. I'm sure manufacturers would think many
times before they would let trained employees leave their payrolls.
Chairman: You would modify the Wagner Act to say that it is not an unfair labor prac-
tice to discharge strikers?
Industrialist #1:
A time factor should be allowed.
Labor Leader #1:
It takes two parties to make a disagreement. Management should
be fired too, if employees are to be fired because of a prolonged strike.
- 10 -
Chairman: That suggestion has been made. If a management is bankrupt as respects
its ability to carry out industrial relations it has been suggested that a receiver be appointed
with a nominal compensation given to the company and that similarly union management should
be relieved of its responsibility.
Industrialist #2:
What becomes of the owner?
Labor Leader #2: Do trustees operate the business?
Chairman: As I understand the suggestions, which I do not believe are proper or
feasible, the government would operate the business until such time as the union and management
reconciled their differences. It does not necessarily follow, however, that each party would be
equally desirous of getting the government out of the business.
Judge #1: Are you saying that there is a fundamental right to strike? There is an
article in the current Atlantic Monthly which suggests that there aren't any fundamental rights
if they don't serve the community. I go along with Industrialist #1. Don't we have to say there
must be some limitation in a situation such as he describes?
Chairman: An individual can't be compelled to work for another man's profit, and the
right to strike is intended to give substance to the individual choice. However, that hasn't always
been the case. There was a time not much over a century ago when it was considered a criminal
conspiracy for a group of workers to join in an effort to obtain a wage increase. Later that ruling
was modified and it became merely a case of civil conspiracy. We went along until finally Cong-
ress said in effect--the only way to give substance to the right of an individual is to permit and
encourage him to act in unison with other workers.
There should be a differentiation in my opinion between the right to strike
and the function of a strike. People go out on strike to compel an employer to recognize their
point of view...but what kind of a right is it when the employer can hold out longer than the com-
munity can? When that is the case it compels a change in concept. I think we'd make more
headway talking about the function of a strike rather than the right to strike.
Judge #1: We talk about the right to strike but we should realize that we might as well
admit that it doesn't exist when the community is hurt, which brings me back to my thesis of last
dinner that there should be some kind of compulsory court established to handle the situation when
voluntary settlement attempts fail.
Chairman:
Would you agree that no national crisis in involved in most strikes?
Attorney #1: If that point of view prevails wouldn't it logically follow that there should
be no right to interfere in a murder when no lives other than those directly involved are
affected?
Chairman: The whole community becomes involved in only a few strikes, for example
those in the public utilities, wide-spread coal or steel strikes.
Judge #1:
Those are merely hard cases. We can't allow fighting--we should try to
prevent people from getting hurt.
Civic Leader:
The court doesn't interfere in every quarrel, does it? What we're
discussing is the matter of degree.
Judge #1: I agree that the court shouldn't come in too soon, but some time there must
be an authoritative decision somewhere along the line. I think I'd go along with Attorney #1.
We're all affected by a demoralization of law and by the interruption of economic progress caused
by strikes.
-
- 11 -
Industrialist #1: What kind of a set up can facilitate a natural solution, assuming a time
of full employment? In a deadlock an employer must meet the demands of a union or hire a new
force. A provision enabling an employer to do this wouldn't result in his having an unfair advan-
tage because the law of the market will prevail. If he is realistic he will face the issue of a fair
decision and think twice before he lets an experienced group of employees leave because they are
having trouble reaching an agreement. He will recognize that the current rates must be paid to
new employees and that there will be no advantage in not seeking an amicable agreement. How-
ever, it should be possible for him to hire new employees if no agreement can be reached.
Chairman: Men are not realistic.
Attorney #1: Assuming levelheaded, reasonable men, can't most strikes be avoided?
Chairman: We cannot assume 1946 to have been a year of such awful failure. Profit,
production and wage figures all indicate a splendid job of reconstruction. It's my impression
that some labor leader has greatness in his grasp if he can get more money for his men without
resorting to a strike.
Attorney #1: Every strike is a failure, isn't it?
Chairman: Many strikes are breakdowns traceable to two main causes: (1) Not having
the facts straight so that there is incomplete understanding about points under discussion.
(2) There is no other face-saving device. If mechanisms were available to help the parties
involved keep face it would be much more likely to result in the use of voluntary arbitration, and
peaceful instead of forceful means would be used more often.
Labor Leader #3: There haven't been such serious strikes lately. We shouldn't be
alarmed about them. The Allis situation is abnormal; there, political forces in the union are
fighting it out on the picket line. But the average person is alarmed by such a situation and
immediately seeks compulsory arbitration. Most of us want to accept democratic processes
and democratic action and we should apply these to labor-management relations. We couldn't
settle the miners' strike by compulsory arbitration although public opinion might have. I don't
believe we need courts in which to seek a solution to the problem. In well established industries
that have been unionized a long time (even in some with the worst histories of every kind, includ-
ing murder) we have found the way to get along by growing up together.
Judge #1: I disagree. All laws are designed to take care of the exceptional cases.
Hospitals are provided for that minority of the population that is ill. We must provide for the
unusual case. The Allis-Chalmers situation shouldn't be tolerated.
Chairman: What could the law do to decide an issue like this? Labor says purchasing
power must be maintained and we must have more money to guarantee that. Industry says it's
impossible--if the cost of production rises, prices must rise. The question of whether it is
fair and equitable to raise wages 25% arises--can the law decide that?
Judge #2: I'd like to ask Judge #1 a question. Don't you believe that there must be
sanctions before a law is good and will work? I disagree with the implication made this evening
that the injunction didn't send the miners back to work. There was $13,000,000 to get at and the
same effect can be achieved if it is possible to send irresponsible leaders to jail. There should
be such sources of power before you put things before the court. You have to have a situation in
which a final sanction will work.
Chairman: It has been said that during some of the critical situations in labor relations
dealing with people like Petrillo, Avery, and Lewis, one of the first sound precepts of good,
democratic government was overlooked...namely, that government in a democracy must never
reveal its impotence. I won't go for this myself, but I don't believe you can take steps 1, 2, and 3
before you realize where steps 8, 9, and 10 will lead you.
- 12 -
Judge #2: We haven't yet found the sanctions in this situation.
Chairman: Criteria and sanctions are our two blind spots.
Judge #1:
I believe that we are a law abiding citizenry. If we could all agree that
something should be done it would be accepted. If you adopt a thing by law there is a moral
sanction from the law itself. Of course there would be difficulties but the effect of the decision
would be compliance.
Chairman:
Would this apply to the portal to portal decision?
Attorney #1: There should be sanctions on both sides.
Chairman: Is it possible for the court to establish criteria--for instance, what is a
work week?
Judge #2:
Sanctions are not difficult when the parties have money.
Professor: Judge #1's opinions start from his interest in the public's stake in these
disputes when production is interrupted, but the courts would be opening up a tremendous door
if they began to decide these issues. There are lots of interruptions to production not caused
by strikes. What about the lay-off of a thousand men. Will the courts decide an issue like that?
If the court is to act will it not eventually be required to enforce sanctions on both sides and
won't this mean the abandonment of our system of free enterprise?
Judge #1:
I prefer that to anarchy.
Labor Leader #4: The courts would be swamped. There would be a tendency to throw
everything in the court's lap, and the court would probably not be too competent to make a fair
judgment. I think Labor Leader #3 is right that the situation is somewhat overexaggerated and
I question with Judge #2 the possibility of forcing unreasonable people to agree.
Attorney #1: It would be difficult to apply sanctions, certainly if you're dealing with the
Avery type...and it would take the national guard to try to apply sanctions to the labor side.
There must be some way, however, to protect the public.
Industrialist #2: Suppose Avery was the owner--should the court put him out?
Attorney #1: Yes, I think so.
Labor Leader #4:
Do labor and management have a responsibility to the public?
Attorney #1: Yes. As an example I believe the fall of France was a direct outcome of the
labor difficulties that were so prevalent.
Chairman and Labor Leader #4: I disagree.
Government Official: Industrialist #1 has suggested that strikers lose their jobs. Would
you advocate this generally?
Industrialist #1: Yes, in cases of contract negotiations when it is impossible to agree on
a new contract.
Government Official: If a man strikes on an economic basis he cannot now demand
reinstatement when he is ready to return.
-
- 13-
Chairman: Does a former employee who has been on strike get preferred treatment
when he seeks to return?
Government Official: No.
Chairman: I'm talking about the way it works.
Government Official: Realistically I suppose he gets preferred treatment.
Professor: Would you advocate a similar penalty if the employer is pigheaded and
refuses to make a settlement?
Industrialist #1: When it's a straight case of trying to make a deal. But it's been a
long time since an employer has been anything but on the defensive.
Chairman: A great power comes from having 60,000,000 people employed--they don't
even have to be organized. How much of the pressure on employers you allude to is due to full
employment and how much to current labor legislation? Why even college instructors are
better paid now because the demand is great.
Industrialist #1: The point is well taken.
Attorney #2: Under a free enterprise system how can we endeavor to enforce the right
to strike? How can you force either an employee or an employer to come to an agreement?
It's one thing to compel them to make a contract but quite another to enforce any particular
interpretation of that contract.
Judge #1:
But there should be a place to go--a statute is needed.
Attorney #2: There are plenty of places to go now. I can go to a conciliation service. I
think places are available but the question is whether the democratic process is sacrificed by
an enforced solution. These things should be matters of progressive evolution where pressure
from the public will help determine the issue.
Civic Leader: Judge #1's is a theory of a planned economy.
Industrialist #2: In cases of public utilities where terms are under a public commission
there should be a judicial review. I think railroad negotiations should be subject to compulsory
arbitration.
Attorney #1: Isn't this true only in monopolies?
Professor: Wouldn't you need to put workers under the equivalent of civil service
under your plan?
Attorney #1: Don't you have that now?
Professor: No.
Attorney #1: Well, you do in a case like the Bell Telephone.
Government Official: Realistically, if not actually, that is the case, of Bell particularly.
Chairman: I'm arbitrating a public utility case now. They've signed an agreement to
accept the award. That method is much preferable. Let's not forget that no matter what laws are
- 14 -
passed we'll have strikes and crisis government. In Australia, where they have a compulsory
arbitration, they still publish strike figures and as a matter of fact they're about the same as
ours. In New Zealand, where they also have compulsory arbitration, they're even higher than
ours.
Attorney #2: There are still crises in criminal law.
Labor Leader #3: Over a period of time in management and labor relations an arbitra-
tor's decision can be enforced by the court.
Chairman: The trouble today is the public utilities don't want voluntary arbitration.
Labor Leader #3: They don't want to be organized.
Chairman: Strikes can be classified in three ways:
1. Those which cause no public emergency.
Those which create a public emergency.
2.
3. Those that seek to compel the employer to break the law.
Professor: You can add the organizational strike to that list. Suppose no machinery
exists to permit an election for instance, where the Wagner Act is not applicable and there is
no state Labor Relations Act.
Chairman: I think it was a great error that the Government stepped into the G. M.
strike. Many of our largest industries, including some of the biggest steel companies, could be
on strike indefinitely without affecting the public too much. This wouldn't be true, of course, if
the whole steel industry were involved.
Labor Leader #3: The best example of the kind of strike that affects the whole economy
was the recent truck strike in England. Obviously, that's the kind of strike the Government can-
not permit to continue very long.
Chairman: Some strikes are called with the deliberate intent of placing pressure on the
Government to intervene. When the Government must intervene should it be on the ad hoc basis
of crisis government or in accordance with a fixed, prearranged plan? There's a lot to be said
for the ad hoc method if it doesn't need to be applied too often.
•
Judge #1: What about the person who can't stand out against the union? In the Philadel-
phia Record situation I understand there was terrific dissatisfaction on the part of the strikers.
Should the Government step into such a situation?
settlement.
Chairman: Suppose the employer says "To hell with the whole thing--go to the Govern-
ment." Then what do you do?
Judge #1: I'm just against anarchy.
Chairman: The question is who was the anarchist?
Labor Leader #1: The owner deliberately refused to use the means at hand to seek a
Chairman: Is there any reason why he shouldn't be allowed to sell the paper, if that's
his solution?
•
- 15 -
Attorney #1: If there had been a method of getting both sides compulsorily to present
their case to an impartial party they might have gotten together.
Chairman:
The Committee on Economic Development is considering the idea that when
there is collective bargaining in order to facilitate its functioning the Government should set up
a Board of Accountability. They feel that the public has a right to have cause shown when arbi-
tration fails or isn't used--that where there is the right to bargain there is the duty to come to
an agreement.
Civic Leader: Is this Board similar to the President's fact-finding committee in concept?
Chairman: No. This Board would not be interested in the dispute itself. It would merely
tell the public why no peaceful procedure had been used and show cause why the means of concil-
iation and arbitration had failed. That's as far as it would go. The mere fact that people could
be called to account for such a situation would exert tremendous influence.
Industrialist: How far down would such a plan go?
Chairman: It would be applied when the public welfare was involved.
Civic Leader: What industries would fall into this category? Would the automobile in-
dustry, for instance, be included?
Chairman: No.
Labor Leader #1: Could such a review be requested on petition of either party involved?
Chairman: Yes, or when the public calls for it.
Labor Leader #1: Would the committee issues its findings?
Chairman: Not on a substantive basis. It would be confined to procedural matters.
Civic Leader: It would certainly provide a pressure for arbitration.
Judge #2: Why would only procedural matters be considered?
Chairman: Because not enough law exists to serve as background for other decisions.
It is suggested that this be a tripartite board which will make judgment on the basis of fairness
and equity--more like a jury trial rather than an application of law.
Government Official: Will the Committee on Economic Development ask for a tripartite
board?
Chairman: I'm in favor of one but there are difficulties about compulsory representation
of industry and labor.
Professor: It would be meaningless unless the public was represented.
Judge #2: Are you proposing pitiless publicity?
Chairman: More than that. Fundamentally workers and industrialists want to get settle-
ments without strikes. The lack is machinery to get an agreement. The Wagner Act assumes its
existence but it doesn't provide it for the new union which needs it.
- 16 -
Attorney #1: One important factor resulting might be the development of leadership
for labor unions. Trouble exists when irresponsible people are involved.
Labor Leader #1: In a recent local dispute the steelworkers would have welcomed such
a board.
Attorney #3: There is the right to strike but the government sometimes steps in to reg-
ularize what happens. There is a danger in opening the door to compulsory arbitration.
Chairman: There's nothing illegal about strikes, but it should be seen to that they're
not called unjustifiably. No strike should be called over a dispute that results from a two cents
an hour differential in a wage discussion. That's no cause for a strike.
Attorney #3: Would this Board have the right of subpoena?
Chairman: Yes.
Labor Leader #4: The Central Labor Union of Philadelphia, the overall A.F. of L. group
here, has officially approved a local voluntary mediation tribunal free of any governmental par-
ticipation. If I am correctly informed, so too has the C.I.O.'s local council in its own field.
The plan is simple and informal but can be quite effective. In the past a somewhat simi-
lar setup proved of much value in the avoidance and early solution of strikes. Under the general
direction of the Chamber of Commerce and the Central Labor Union a Board has been established
composed of six representatives of the A.F. of L. and six representatives of important Philadel-
phia industries with Dr. Taylor as impartial chairman which will determine policy and direction.
This Board will endeavor to establish and maintain industrial peace in the Philadelphia
area by informal mediation. Only management and labor representatives together with inde-
pendent citizens having experience as mediators will participate.
When a grievance or dispute arises the parties involved, or others learning of it, will
notify the Chamber in the case of the employer and the Central Labor Union in the case of the
union. These, in accordance with established policy, will select one having power and influence,
in the particular industry if possible, from each side and also a mediator selected from a list
previously having mutual approval. These will sit with both parties directly involved and en-
deavor to bring about a peaceful settlement.
The development of some form of discipline by both major groups and provisions for
sanctions within the groups may eventually be necessary. This latter, however, is not a part
of the present plan.
Chairman: It would be a good thing if a plan like this could be in operation throughout
the country.
K
Labor Leader #1: Would you have a law passed creating this board?
Chairman: We must have a law and it should be a good one.
Judge #2: Would there be sanctions for it?
Chairman: If you feel that people have a passion to get together then you should give
them the means to do it. This could be a face-saver for both unions and management. If some-
one would take the onus of decision off both sides you'd get a lot more decisions.
Industrialist: It sounds like a good idea.
- 17 -
National Civic Leader:
The release of the negotiations at General Motors caused a
great deal of public surprise. I don't think the average person is aware of the animosity of these
labor-management negotiations.
Chairman: This Board would deter the General Motors kind of negotiations.
Industrialist #1: In reference to item d on the agenda, I believe striking should be elim-
inated in public utilities. Aside from some preliminary discussions and hearings, I believe col-
lective bargaining should also be eliminated. In its place there should be a tripartite setup of
say an industrial engineer to represent management and two others to represent labor and
government who could serve as a board and establish wage rates for the company. Their find-
ings could be published and the public service commission would pass on them.
Labor Leader #3: It's amazing for a free enterpriser to speak of a controlled economy.
Civic Leader: The Board of Accountability you mentioned seems like an ingenious de-
vice. Who will produce the bill?
Chairman: The proposal, I believe, is now being discussed with Congressmen who may
decide to introduce a bill incorporating the idea. There is a story told in Washington relating
to Section 8-5 of the Wagner Act (this is the section which states that it is the duty of an employer
to bargain collectively with the representatives of a majority of the employees.) It seems that
when John L. Lewis was in the midst of his negotiations with the coal operators he one afternoon
walked out of a meeting with this parting shot: "Well, the law says you have to bargain with me,
but there's nothing to make me bargain with you." This dramatizes the question of whether
there should be an amendment to the act to require unions to bargain. Personally, I'd rather
see section 8-5 dropped. It has served its purpose anyway.
Government Official: Is there any case on record in which the NLRB has found an em-
ployer guilty of refusing to bargain in a situation where the union had been remiss in carrying
out its reciprocal obligation to bargain?
Labor Leader #4: I'm not sure there is an effective weapon in not supporting a strike
we don't approve.
Chairman: Even under the Board of Accountability the Government would step in if
necessary.
Attorney #3: Granted the right to strike and granted the establishment of criteria, you
can't legislate these criteria.
Attorney #2: We must remember that there are different kinds of public utilities and
it's impossible to generalize--the taxicabs here, for example, are regulated by a Public Utility
Commission, but no one could claim that a strike on the part of the cab drivers would seriously
impair the public welfare.
GRA
Judge #2: Even in government there's a great difference between employees. A strike
of recreational workers would be a lot different from a strike of policemen.
Professor: Doesn't this raise the question of what the proper bargaining unit should
be? Shouldn't there be bargaining units that are functional units? There is an interrelation
between groups in labor--a strike of elevator operators in a building, for instance, can paralyze
nearly every activity in that building.
Labor Leader #4: We do that in the labor movement here in the Central Labor Union.
We have a master contract in the building trades unions. A union must come to the Central Labor
- 18 -
Union for permission to strike and a mediation tribunal has a hearing on the case. It's a volun-
tary Board of Accountability, if you will.
Professor: What if another union is involved?
Labor Leader #4: We have been known to cross a picket line if we felt a strike was un-
justified.
Chairman: A program such as yours is better carried out locally than nationally. We
can't designate utilities as groups not allowed to strike but if the parties don't work out their
own methods some method will have to be planned. Perhaps the President will be granted power
to say when national interest is involved--we are searching to avoid a repetition of the railroad
strike.
Civic Leader: What powers would you give an enforcement agency--power to withdraw
seniority privileges perhaps?
That's the trouble. It's very difficult to say.
Chairman:
Judge #2: The only sanction is publicity.
Labor Leader #4: That doesn't affect some people.
Attorney #1: Herman Talmadge, for example.
Judge #2:
Chairman:
Government can always find sanctions if they're badly enough needed.
That's a debatable question.
Labor Leader #4:
was that of the closed shop.
What would the Board of Accountability do if the question being argued
Attorney #3: The value of the plan of the Committee on Economic Development is that
there is no ultimate limitation under it. The right to strike must be preserved.
Civic Leader:
Does this include the public utilities, in your opinion?
Attorney #3:
Ultimately there should be the right to strike even in public utilities.
Judge #2:
Qualified by ad hoc government.
Professor: If strikes are to be prohibited to certain types of public utilities and govern-
ment employees arrangements should first be made to insure for them the kind of protection which
a strike normally affords.
Chairman: If I have to take a choice of government ownership or occasional trouble
resulting from the operation of a free economy, I'll take the trouble any time.
Industrialist #1: Outside of the public utility field anything equivalent to industry-wide
bargaining must be destroyed. In the South African gold mining industry, industry-wide bargain-
ing paralyzed the whole country. It was a case of an irresistible force meeting an immovable
object and revolution developed. In England, industry-wide bargaining, coupled with the lack of
an anti-trust law and the competitive spirit, has resulted in a flabby industrial system.
Attorney #2: Employers don't want industry-wide bargaining.
- 19 -
It's amazing but some strong unions are against it.
Labor Leader #3:
A long time ago there used to be a different story--employers used
to complain about being singled out for demands. Now that there is a tendency to equalize demands
through industry-wide bargaining they want to go back to the "good old days.'
Chairman:
Chairman: Don't forget America will have its greatest test in the next depression when
it comes. One of the ways to prepare against its ravages is to have some standard of wages es-
tablished. I'm not pessimistic but I believe that we haven't yet learned to stabilize a boom and
that we're going to have another depression. If we do, wage standards will go to hell. It would
be prudent management to prepare now against such a contingency.
The only measure other than supply and demand would be a minimum
Industrialist:
hourly wage.
Chairman:
We don't want that.
Labor Leader #2: The danger of that proposal is that the minimum has a tendency to
become the maximum.
Chairman:
Do you believe that preparation must be made, Industrialist #2?
I agree.
Chairman: When we passed the Wagner Act we were at the cross roads. We could
have put a wage scale on the wall and said that's what it will be and we'll shoot anybody who
doesn't comply, or as we decided instead we could have collective bargaining to establish stabil-
ity. I think we chose the preferable road. Collective bargaining was established as a defensive
and not an offensive weapon. The only reason it became an offensive weapon was because of the
shortage of manpower.
""
Industrialist#2:
Professor: The important thing to remember is that government control won't stop
at wage determination.
་
- 20 -
PENDING LABOR LEGISLATION AND CURRENT
DEVELOPMENTS IN LABOR RELATIONS
Attendance at a discussion in Philadelphia, Penna.
February 19, 1947
Presiding: Dr. George W. Taylor
C. Canby Balderston
John Bacchus
Merlin Bishop
Harry Block
Joseph Burke
Richard L. Davies
Edward Davis
Harry Ferleger
William B. Flickstein
Alexander H. Frey
Lewis N. Gill
Elizabeth Hallstrom
Helen D. Harbison
Michael Harris
Roger C. Heimer
William Leader
John F. Lewis
Robert N. Ney
Walter M. Phillips
Bennet Schauffler
Lewis M. Stevens
Nochem S. Winnet
University of Pennsylvania
Driver Salesmen's Union
United Automobile Workers
United Electrical, Radio and
Machine Workers
Building & Construction Trades
Council
Pennsylvania Salt Mfg. Company
Attorney
Central Labor Union
Philadelphia Clothing Association
University of Pennsylvania
Labor Standards Association
Phila. Group, National Policy
Committee
Family Society
Industrial Union Council
American Federation of Hosiery
Workers
Attorney
Baldwin Locomotive Works
Bureau of Municipal Research
National Labor Relations Board
Attorney
Municipal Court
- 21 -
Pending Labor Legislation and Current Developments
in Labor Relations
Chairman: In a discussion of pending labor legislation we should recognize that the
American people are always torn between two attitudes when a problem is disturbing them. One
reflects the feeling 'there ought to be a law'; the other 'he governs best who governs least'.
In Washington nowadays everyone one meets seems to feel he has the final solution to
the labor problem. It has not been our function to devise a plan through these deliberations--
rather we have sought an honest exchange of opinion. The value of this method is reflected in
the desire that has been expressed to me by several people that these discussions be continued;
if not under the auspices of the National Policy Committee, which will probably want to proceed
to other fields now, then perhaps under the auspices of some of the specialists in the field who
have been attending these dinners.
There are three possible kinds of legislation being widely discussed now. They fall into
the following categories:
1. Legislation to reduce the power of unions and equate the bargaining
power of employers and unions.
(Under this kind of legislation are, for example, provisions to
outlaw industry-wide bargaining.)
2. Legislation to make unions more democratic.
(Provisions to outlaw the closed shop fall into this category.)
3. Legislation better to effectuate the collective bargaining process.
(Provisions to establish mediation boards separate from
conciliation service.)
In Washington the consensus of opinion seems to be that some labor bill will pass.
Civic Leader #1: Is there any legislation to prevent jurisdictional disputes that would
be acceptable to labor as represented here?
Your question is based on the assumption that some such legislation will
Chairman:
be passed?
Civic Leader #1: It's certainly an area where labor is most vulnerable to criticism.
Chairman: There are two kinds of jurisdictional disputes; those involving questions of
representation and those concerning who does what work.
Professor #1: There are also disputes that arise over what the appropriate bargaining
unit should be. I'd like to hear a discussion of this subject.
Chairman: I think this is combined under the representational strike. The kind of
strike most difficult to support in the eyes of the public is the strike where one union has been
certified by the NLRB as the bargaining agency and another union in the company conducts a
strike to compel the company to recognize them in defiance of the law.
Government Official: The NLRB can and does resolve the first kind of jurisdictional
dispute you mentioned but it has no authority to deal with a strike resulting from an argument
concerning who should do what work. The NLRB has recently completed a nation-wide survey
- 22
-
which indicated that there were not more than a baker's dozen jurisdictional strikes in the whole
country now.
Chairman: I agree that they are not a very important consideration.
Government Official: It definitely is not an important problem--it's just a vexing one.
Chairman: It is argued in some quarters that the only way a union should receive
recognition is by winning an election under the NLRB. Some persons would act to outlaw the
organizational strike.
Labor Leader #1: It is not used widely now.
Chairman: Isn't it conceivable that it might be used in the South?
Labor Leader #1: In 70 to 80 per cent of plants organized in the South there's been no
problem of a strike in order to get recognition. That kind of strike went out the window five
years ago.
Chairman: Then you would say that winning an election was the way to seek recogni-
tion? Would you be willing to put that into a law?
Labor Leader #1: No. There are still some situations where an organizational strike
is necessary. Where most of an industry is organized, it may be essential to the stability of the
industry to organize the few unorganized plants, by a strike if necessary. There are cases like
that where the organized employers have condoned an organizational strike of their competitors.
Government Official: Not only condoned--encouraged.
Industrialist #1: Labor Leader #1 is proposing that rather complete organization can
work for the stability of an industry. I'd like to ask anyone here who has the facts how that is
working on Dock Street.
Labor Attorney: That is a case where they are anticipating Congress. The union is
insisting on single employer units, and the employers are insisting on industry-wide bargaining.
Industrialist #2: What is meant by 'stabilization'--monopoly? I assume that what our
labor friends mean is to remove labor costs from competition in an industry. I'm not sure that
'stabilization' of the kind we have in the coal industry, for example, is in the public interest.
Chairman: I think we should return to the question of jurisdictional disputes since Con-
gress seems determined to act on this question.
What are the proposed alternatives in Congress?
Chairman:
They are very hazy on this point. They're discussing vague sanctions. One
suggestion is that the benefits of the Wagner Act be withdrawn from a union that doesn't use an
election to decide a representation question.
Labor Leader #1: The strike to compel a violation of the Wagner Act should be out-
lawed.
Professor:
Professor: How about the case that was mentioned earlier when union 'A' beats union
'B' in an election held by NLRB and then union 'B' strikes?
-
- 23 -
Labor Leader #1: I'm talking about the strike to force recognition.
Chairman: All right, let's discuss that.
Labor Leader #1: There are really too few of these to make a discussion profitable.
Well, Congress is probably going to pass a law about them.
That's only for something to do.
Labor Leader #2:
There's no law to compel a man to stay in business. I'm not trying
to justify the jurisdictional strike but it's contrary to the Constitution to restrict the freedom of
one group of people who don't want to work.
Chairman:
Labor Leader #1:
Professor #1: There's a difference between compelling people to work and providing
penalties for those who incite people to stop work.
Chairman:
Should a minority group going on strike have the protection of the law in
striking?
Labor Leaders #1 & #2:___ It doesn't have it now. An employer can fire the men.
Industrialist #1: There's protection built up by the words 'strike' and 'picket line'. I
don't want any legislation to make a man work when he doesn't want to work. I'm sure there is
unanimous agreement on this point. However, I'd like to see some legislation to make it im-
possible to prohibit a man from working when he wants to. I'm equally sure that there isn't
unanimous agreement on this point. It should be made illegal to use force to prevent another
person from working.
Professor #1: It's already law.
Industrialist #1: Is it a Federal offense?
Professor #1: It's part of the common law.
Labor Leader #1: Don't forget the courts have the power to grant injunctions if the
situation justifies it.
Industrialist #1: I'd like to make a proposal to shoot at:
Labor Leader #3:
1.
That no strike shall be called unless there has been
an election at which more than 50% have voted to
strike.
2. In no strike shall one individual use force to prevent
another from working.
-
What do you mean by the use of force?
Industrialist #1: It's clear that in many strikes some workers want to work who aren't
permitted to. Congress hasn't definitely said this should be prohibited. Everybody knows the
methods employed to effect these ends--bricks through windows, etc.
Labor Attorney: The question is whether labor will go for any law restricting the right
to strike. Labor is against prohibiting the jurisdictional strike through fear that such a pro-
- 24 -
hibition would be the opening wedge to further, more restrictive measures. The right to cease
working must be maintained.
Industrialist #1: That doesn't include the right to keep somebody else from working.
Chairman: We don't condone that.
Professor #1: There should be no condoning of preventing people from working by
force. Mass picketing is considered force in the accepted sense and the common law forbids
that now. The proposal to require 50% of the entire unit to vote for a strike I don't approve. I
would agree that there should be a majority vote of the union members, but the union shouldn't
be held responsible for the votes of those in the unit who are not its members.
Industrialist #1:
Then a minority can decide to strike.
Professor #1: Yes, but the decision is open to all.
Professor #2:
fit from union negotiations.
That raises the question of keeping non-union workers in line who bene-
Labor Leader #3: Sometimes that's not the answer. Assuming an industry with twelve
firms in a city, ten of which are unionized, two of which are not or are organized in another
union, with lower rates of pay; if the organizational right is taken away the bargaining conditions
in that whole industry are upset.
Professor #1: That's a different problem.
Labor Leader #3: Well, where this condition exists the jurisdictional strike can't be
given up until there is a substitute.
Professor #1: I don't understand. Are you claiming that there could be a situation
where eight plants were unionized by one union with a high wage rate and two other plants in the
same industry organized by another union with a lower wage rate could expect to remain or-
ganized with that union?
Labor Leader #1: No union can hold a group of workers if another union can get them
higher wages.
Labor Leader #3: If that's true why are there any non-union workers at all?
Labor Leader #4:
This raises the whole question of a worker's obligation to join a
union. When a union has won an election I think everyone should become a member. I didn't
vote for a city wage tax but I pay it and I think the same principle should apply to union member-
ship. The labor problem can't be solved by saying you can't strike when you're trying to or-
ganize. Two shops that are unorganized during a depression can ruin an industry. It has
happened.
Chairman: What you are suggesting is that the answer to the first kind of jurisdictional
strike is the closed shop.
Labor Attorney: That's one law labor would go for.
Labor Leader #1: I can't see the difference between the situation where the union repre-
senting eight firms tries to organize the other two, and the steel companies ganging up to keep
steel from Kaiser.
1
- 25 -
Industrialist #2: Two wrongs don't make a right.
Labor Leader #3:
There's nothing in the law to prevent employers from duplicating
the attempt that was made in 1921 to ruin the Building Trades unions. At that time no lumber
yard that sold to a contractor using union labor could get any credit from the banks. It was a
deliberate attempt to force men out of business who in any way were connected with the trade
union movement.
Chairman:
That would come in the lock-out category.
Industrialist #2: I wouldn't insist that employers be forced to sell to all customers. A
man can sell to whom he pleases--it's his own business.
•
Industrialist #3: May I throw out a thought on the representational strike? The major
cause for the Wagner Act was the organizational strike. Its purpose was to remove the question
of representation from the area of conflict. I think it's inconsistent not to go forward and out-
law strikes arising from these issues where there is either a State Labor Board or an NLRB
office to which the problem can be referred. However, in my estimation it would not be proper
to forbid a strike in a local enterprise where there was no State Labor Board to decide the issue.
Chairman: It is hard to justify the representational strike. But that's not at the core
of the labor problem. Personally, I'd rather take the risks resulting from the few such strikes
that occur than outlaw them. As a matter of fact, sometimes a strike is the only way union mem-
bers can protect themselves against arbitrary leadership in the union.
Industrialist #1: Can't a union member stop paying dues?
Chairman: Yes, if there isn't a closed shop with a check-off system. In case of arbi-
trary leadership in a union where there is a closed shop the right to strike against that leader-
ship is a precious right and the only practical redress the union member has--for that reason
some jurisdictional strikes are necessary.
Labor Leader #5: I think it's a question of a theoretical right. Actually there's not
much excuse for the jurisdictional strike. I would say outlaw it.
Labor Leader #6: Even where company unions are involved?
Labor Leader #5:
If I can obtain an honest election--if there is a provision to guarantee
that, I'll take my chances on an election any day.
Labor Leader #6: I'd never want to give up the right to strike where company or inde-
pendent unions are concerned.
Does a union have the right to stabilize conditions regardless of what the
Chairman:
workers want?
Labor Leader #3: If it's the opinion of the majority of the workers.
Chairman: Then bargaining has to be for an industry?
Professor #1: Isn't it assumed that industry-wide bargaining should be practised in
order to take wages out of competition?
Industrialist #1: That's the same kind of stabilization that the Standard Oil Company
represented before the monopoly was broken up.
- 26 -
Labor Leader #3:
the same price?
Isn't that still going on--more or less? Isnt all gas still pretty much
Labor Leader #6:
Prices in the dairy industry are regulated. There's a standard rate
paid to farmers and consumers. All employees in the same industry should be paid the same
wage rates. To guarantee this in the dairy industry we had to organize.
Industrialist #1: How do we stand on this proposal? You have several firms paying a
certain wage level and a few paying a less favorable rate. How do you feel about permitting a
strike to force the wages up in those plants paying lower wages?
Labor Leader #2: We weren't suggesting a strike necessarily--perhaps a boycott might
be just as effective.
Labor Leader #3: Lots of methods can be used--picketing, refusal on the part of other
unions to handle products made in those factories paying sub-union wages. They amount to
pretty much the same thing.
Industrialist #1: Does everybody agree that it's a good thing to do?
Labor Leader #4: If rates aren't equal, employers can bid one worker against another
to get the cheapest rates.
Labor Leader #7: It's really a question of the unit--what is the democratic majority?
Chairman: This is involved in the proposal to outlaw industry-wide bargaining.
Labor Leader #5: Only the minimum common labor rate is the same in most cases
anyway.
Chairman: Isn't there a drive on to standardize the whole wage scale in one industry?
Labor Leader #5: Yes, there is, but there are differences between plants.
Professor #2: The wage structure in any industry is more like an inclined plane than
a floor. If labor costs are to be removed from competition the whole wage scale rather than
just the minimums has to be considered.
Chairman: No one should be shocked that labor tries to engage in industry-wide bar-
gaining to take labor rates out of competition. The real question is to define the industry--what
is the unit?
Civic Leader #2: I can see the value of taking wages out of competition, but the ques-
tion is where that will lead. How far can the miners go to bring the price of coal up in order to
obtain wage increases. Should they go on indefinitely?
Professor #2:
Theoretically consumers are against monopoly in all forms, yet we know
if a lack of stability occurs such as in 1932 a disintegration of industry takes place that leads to
hardship. The question is posed as to whether consumers are better off with an absence of
stabilization or whether it leads to chaos.
Labor Leader #3: It leads to chaos.
Professor #2: It's probably better to have some stability so that those who remain
working can have a decent living. Coal operators, however, could conceivably lose to the oil
- 27.
industry which is one dilemma to be examined. It would be tragic if the coal industry folds, but
on the other hand complete freedom of competition can't be endured. Consumers must specu-
late as to just how much stabilization can be permitted.
Civic Leader #2: You are implying that it is better to have large, industry-wide com-
petition as between coal and oil, for instance, than competition in the same industry?
Chairman: Maybe there's a different answer. This is a very unusual period. We speak
of the power of organized labor but in a time when there's very little unemployment that power
would exist whether labor was organized or not. The concentration of power may shift and we
may wonder where it has disappeared to.
Industrialist #1: There's no question but that the organized labor movement in this
country has done a great job to raise the level of wages and salaries. Nothing should be done to
destroy the powerful force for good it has become in American life, but many people would be
happy to settle for a federal statute against the use of force to prevent men from working.
Putting a statute on the books isn't going to make it any more illegal
Professor #1:
than it is now.
Industrialist #1: But isn't there a possibility that a specific law may result in achieving
what doesn't exist under the present common law.
Labor Leader #6: Laying a hand on another person constitutes assault and battery. I
don't think this is an important factor one way or the other. The use of physical force never
meant anything. It's the exercise of legal force--the boycott and economic force that is impor-
tant.
Industrialist #1: Would you have any objection to the kind of law I propose?
Labor Leader #6: No, but I think it's unnecessary--it's there already.
Industrialist #1: It seems to me that there's been no major strike in the last year when
the use of force hasn't been a factor.
Labor Leader #5: Yes, there has. How about the steel and coal strikes?
Attorney: What we're discussing is the efficacy of our law enforcement rather than an
existing lack of statutes. The theory is that the law is dealt with locally; where 'A' assaults 'B'
that's where the situation is controlled.
Industrialist #1:
If the Wagner Act is a federal matter why wouldn't it be proper for
federal government likewise to be concerned with the use of physical force and threat of physical
force in labor disputes?
Attorney: You wouldn't advocate a federal constabulary, would you?
Industrialist #1: Not other than any which may already be in effect in connection with
the Wagner Act.
Labor Leader #6: If a labor dispute fell within the realm of interstate commerce it
would become a federal matter and the FBI would have to get on the job.
Civic Leader: We're all agreed the situation is bad enough. Industrialist #1 is suggest-
ing that assault and battery in industrial disputes become a federal offense.
- 28 -
Industrialist #1: I don't mean assault and battery. I'm referring to things like mass
picketing which prevent men from working whether they want to or not. Mass picketing results
either in violence or a shut plant.
Labor Leader #4: What happens now when a man can't get through a picket line--he
calls for his attorney and asks an injunction.
Judge: What would be the harm in putting Industrialist #1's suggestion in the law?
Civic Leader #2: What purpose would it serve?
Attorney: Legislation against strikes is very difficult because of this problem of
sanctions. Ways should be found to make collective bargaining more effective.
Chairman: This is one area to which not much attention has been devoted. Little has
been done to effectuate collective bargaining--and this is the very heart of the labor-manage-
ment problem; all the other things are peripheral. Some means must be found to help employers
organize for collective bargaining because it can't be effective unless there are more employer
and manufacturer groups. I can't get excited about all the proposed legislation because even if
it's passed it will just be on the books and not much will be done about it. It's absurd to think
that more laws will solve the problem. We're in for some tough times and I hope we come out
with collective bargaining.
Civic Leader #2: Do you have any specific proposals to recommend?
Chairman: I'd like to see mediation boards aside from conciliation boards--they have
different functions. A conciliator's chief function is to keep the parties together, whereas a
mediator suggests alternative proposals. Of course a good conciliator will do mediating. I'm
all for tri-partite boards myself. I believe there's a real place for experimenting with media-
tion as a process.
Labor Leader #3: Unions and industry can do the job better alone. They can settle
conditions and wage rates in a local area and unions can establish standards to protect them-
selves from competition resulting from different wage rates that may prevail in another part
of the country. When the 30th Street Post Office was built here a lot of work was lost to Provi-
dence, Rhode Island, where the prevailing wage rate was $.90 an hour contrasted to $1.25 here.
That won't happen again for today there is a provision that makes it necessary for work done
for Philadelphia in any other part of the country to be done at the same rate similar work would
be done right here in Philadelphia.
Professor #1: What would happen if work were let in violation of this agreement?
Labor Leader #3:
The work just wouldn't go in.
Industrialist #3: We've touched on a very important question when we referred to taking
wages out of competition. Sidney Hillman did that in the clothing industry and it was a good thing.
Chairman: It would be tough to do in autos and steel.
Industrialist #3: In the clothing industry material is bought in an open market. If labor
costs were competitive somebody would be hurt. Products are and should be sold on merit, on
the reputation of the manufacturer--not on the advantage one man may gain over another by pay-
ing his workers less money.
Chairman:
You're proposing that collective bargaining can intensify competition?
- 29 -
Industrialist #3: Definitely. Then competition springs from the kind of garment pro-
duced and the advantages it may carry over your competitors and the way you advertise and
merchandise your product. There's not more than a 10% differential in wage for the same job
in our whole industry.
Labor Leader #2:
a set-up.
Efficiency of operation certainly becomes a very big factor in such
Civic Leader #1: It's significant but not very cheerful that this group seems to have no
specific thoughts on the subject of pending labor legislation even though hearings are being held
in Congress now and it seems almost certain that some legislation will be passed.
Industrialist #1: At least one direct proposal has been made.
Professor #1:
Another came from our Chairman. A good deal could be done through
the avenue of legislation to facilitate collective bargaining.
Chairman: As it happens the legislative proposals that have been made in Washington
are mainly beside the point. It's certainly debatable whether the government should encourage
the right of foremen to organize now. I'd personally like to see Section 8 (5) of the Wagner Act
thrown out. Congress passed the Wagner Act to encourage collective bargaining. It could do a
great thing now by directing its attention to helping to further better mediation and conciliation.
•
Labor Leader #5:
I'd like to propose that as soon as a union election is rightfully won
all employees should become members of the union. I'd like to rule out the use of physical
force also.
Labor Leader #3: Some people don't understand any other language. You certainly
couldn't reason with Hitler and Mussolini.
Professor #1: The New Deal passed the Wagner Act not to stabilize wages but to stim-
ulate organization as a part of the framework of the free enterprise system. Wage rates are
still a matter of competition. If there is a sincere desire to bring about general bargaining I
think that once a union is accredited an employer ought to be precluded from bargaining with
individual workers in a strike.
Labor Leader #2: Great strides have been made in the last decade. I think we should
emphasize the good relations that exist more than we do.
Civic Leader #1: It should be admitted that there is a great force of public opinion
bearing on Congress to 'do something' because of the coal, steel, and railroad strikes last year.
Chairman: "There ought to be a law' is certainly an impelling force. You know I be-
lieve that the year of 1946 will go down in history as a magnificent reconversion effort.
Labor Leader #7: If we would relate the statistics of the amount of time lost because
of the common cold to that lost because of strikes, we'd give the picture much better balance.
Much less was lost from strikes than from colds.
Industrialist #1: No matter what labor laws we have, the American economy is going
to sail ahead so long as both our labor and industrial leaders are men of high character.
C
- 30 -
THE PLACING OF RESPONSIBILITY
Attendance at a discussion in Boston
February 18, 1947
Chairman: Sherman Adams
F. W. Denio, vice-president, First National Bank of Boston
Jack Garvey, plant manager, Dennison Manufacturing Company
Dudley Harmon, executive vice-president, The New England
Council
Kenneth J. Kelley, legislative agent and secretary-treasurer,
Massachusetts State Federation of Labor
J.. A. Knowlton, assistant manager, Colonial Beacon Oil
Company
Marion Lyndon, public relations counsel
Helen Hill Miller, executive director, National Policy Committee
Paul Pigors, associate professor of industrial relations, M.I.T.
Hattie Smith, assistant commissioner of labor, Massachusetts
Q. A. Schlaikjer, vice-president and general counsel, Federal
Reserve Bank of Boston
Charles E. Wyzanski, Jr., U.S. District Court Judge
- 31 -
The Placing of Responsibility
(On February 18, 1947, in Boston, the NPC held a discussion on
labor-management relations. Participants included three repre-
sentatives of management, two bankers, one judge, one labor
leader, one state labor official, one organization executive, one
educator, one journalist and one public relations counselor.)
The chairman opened the meeting by saying that this dinner was "a feather in the wind"
and might be the first of a series on topics of commanding interest.
He remarked that when he was a member of the Labor Committee of the United States
House of Representatives he realized that Congress was a group of men who often did not know
what to do on questions of labor-management relations, and that though the National Labor Re-
lations Act was designed to iron out difficulties, it seemed to have set up rules of organized
warfare. He invited discussion on three questions:
1. Is Congress being given a job that does not belong to it?
2. Are the answers to labor-management problems to be found nearer home, in the
state and in the locality?
3. Isn't there room for community action?
Courts and Congress
The judge responded by saying that at the time the National Labor Relations Act was
passed it was hoped such a law would help prevent disputes concerning representation and the
discharge of people for union activities. The law of contracts as applied to labor relations was
considered insufficient. Yet there has been a failure to accomplish what was intended by the
legislation enacted to meet the situation.
Recently, there has been a tendency to look to the courts for decisions that are policy
making in their character. This is a dubious procedure. The creation of legal patterns does
not move ahead of public opinion. Judges must act in the light of durable public opinion. To
transfer to judges interpretation of public opinion will defeat the objectives of our judicial system.
When the chairman asked if the responsibility lay with Congress, a banker replied that
the voters seem to think it is there; he went on to say that he liked to progress rather slowly and
would prefer to gain one half of one percent each year than go ahead ten percent one year and
drop back twenty percent the next year. He expressed approval of the Wagner Act with some
changes in the terms of the act. He agreed that all must assume some of the responsibility for
making it work better. In his opinion, the National Labor Relations Board grew like Topsy and
its decisions should be required to be based on the weight of evidence and not just on a scintilla
of evidence. There is work to be done in perfecting amendments of the Wagner Act, though not
necessarily to the extent of changing the basic purpose.
In reply to the chairman's query as to whether there might be errors in interpretation of
public opinion by Congress, and whether Congress can get labor-management relations strengthened
by statute, the labor leader answered saying that present public feeling about the Wagner Act is
the result of people being taken in by the non-sequitur; that because there were so many strikes
in 1946 the Wagner Act has failed. The Act was designed to eliminate recognitional and organi-
zational strikes. But in 1946, less than twenty per cent of the strikes were for those purposes.
Merely amending the Act will not lessen strikes. If some of the proposals now before Congress
were to be enacted, the result would be emasculation of the Act and in such a case, it might as
-
- 32 -
well be repealed. Some supporters of Amendments to the Act say their aim is to restore free-
dom of speech and the rights of management to speak to workers. Today, this member went on,
the only limits prescribed in the Act have to do with coercion, and it is a myth to say that free-
dom of speech of employers has been abridged. On the whole, the National Labor Relations
Board has evolved a pattern in this respect that augurs well for the future. Imposing restric-
tions on labor will not provide a solution of the problems. Unless problems can be worked out
around a table someone bigger than either side will step in and settle things for both of them.
And the effect will do irreparable damage to both labor and management.
Community Responsibility
In answer to the question as to responsibility on the part of the community, in New Eng-
land towns and plants, a representative of management spoke of his interest in the banker's
preference for one half percent of progress each year. He thought that many managements in
industry ten to twenty years ago stood still. From 1920 to 1928, this country failed to establish
procedures already well-known in so-called backward countries. It is a time-taking procedure
to get down to the man at the bench or the machine. Some years ago a group of personnel men
got together on their own and were making progress learning how to adjust differences when the
Wagner Act came along.
There was progress toward moderation in drinking until prohibition became the law of
the land. Similarly, after passage of the Wagner Act, industry had to deal with the feeling that
a firm had to fight or it was suspect. This was all very bad. Management and labor alike took
a certain satisfaction in getting in and fighting.
This member pointed to the problem which has confronted labor during the war years,
with a growth in numbers from 3 million to 15 million men. Faced with a comparable addition,
it is probable that management would have suffered severe growing pains.
For the future, however, is labor going to make a successful effort in establishing capa-
ble leadership? Is labor willing to pay such leadership what it is worth?
S
In 1947 there is a better management attitude, though a lot of innocent bystanders received
a shellacing in 1946. Voters have now said "Cut out the monkey business. Get down to work."
If management should put up enough rumpus to attempt to put labor down, there would be hell on
wheels. Progress is needed, not retrogression.
Settlement by Arbitration
In view of the references made to compulsion, the chairman asked whether more is to be
gained by requiring arbitration or by relying on the policy of leaving it up to labor and manage-
ment to work out solutions.
An economist who has served as arbitrator in many cases stated that the attitude of both
sides could be summed up in three questions:
1. Who is paying you?
2. Who are you?
3. What is your racket?
To illustrate, he referred to a recent case in which he had been asked to arbitrate six
issues, Both sides served notice that judgment on his qualifications would be reserved until his
decision was seen. He concluded that there are limits to the usefulness of arbitration.
- 33 -
Direct Settlements
The judge stated that it is important to consider the extent to which some labor problems
can be handled locally rather than nationally. No one thinks that Ohio can settle steel disputes
or that Pennsylvania can handle the coal mining problem all alone. The point to be decided is
"What questions are suitable for local decision?" When the National War Labor Board was set
up, it was hoped it would provide a complete solution. The fact that this is not so is due in part
to the new use of the secondary boycott. Formerly, the boycott was used against employers who
discriminate; now it is an instrument inter-necine warfare, with secondary boycotts used against
another union.
Is it necessary to rely on public mechanisms, he continued? Cannot labor and manage-
ment work out their problems together? Wage-fixing by federal statute, he thought, cannot be
of any help. Except for minimum wages, no solution can be provided by the national government.
The problem, he cautioned, may not be one to be dealt with by legislation to the extent that some
people think.
The handling of wages on a national basis, even if by industry-wide bargaining rather than
by statute, was questioned by the chairman as one cause of work stoppages called from the national
office in communities where no crisis exists locally.
A compromise proposal was offered by the labor member: certain contracts are now ne-
gotiated nationally with the specific provision that various sub-sections shall be negotiated in
the various localities where there are plants covered by the contract.
Decentralization of collective bargaining was also cited as a possible answer to the present
clamor against nation-wide bargaining.
Labor Initiative
The state labor official asked, in view of the present mood of the legislature, if it would
not be helpful if labor would come forth and itself offer perfecting amendments of the law.
The labor leader in reply said he personally was of that opinion, but that his national or-
ganization held a different view. With respect to the current controversy over new labor law in
Massachusetts, he had been advised that if labor cooperated in amending the law, its case might
be prejudiced in the event of court action. Referring to jurisdictional disputes, he said that new
techniques and technological changes in methods of construction have created overlapping juris-
dictions. The demarcation between crafts is constantly changing and bringing new problems.
--
The state labor official seconded his remarks by saying that there should be real labor
statesmanship on that point as well as on other legislative matters.
Secondary Boycotts
In answer to the chairman's question on whether the economy would be better off with-
out labor unions, a representative of management said that for thirty years there had been no
strikes in his company, but that recently they had had to deal with a situation where their people
were forced out of work by a secondary boycott. He felt that something must be done about these
situations. Their employees had wanted to deliver products vital to public welfare, but their
trucks were stopped on the highways by pickets of another union engaged in a dispute with a
competitor. They could supply their customers with heating oil for their homes only with the
consent of the C.I.O. He said that in the case cited there was no quarrel with his company and
he strongly felt that a union should be prevented from trying to stop a whole industry to benefit
one particular group. He did not know just what action Congress could take to bring about the
needed result.
- 34 -
It was then suggested by a lawyer that Congress could authorize the use of the injunction
in such cases, but the representative of management felt that it would not be a satisfactory reme-
dy--if it were necessary to go to court there was the time element to be considered in the supply
of such a necessity of life as heating oil.
The chairman seconded the management representative's feeling. He held that it is im-
possible to authorize the use of the injunction process without opening the way to its abuse.
Disputes Affecting Public Health, Safety and Welfare
The opinion of the group was then asked as to what should be done in case of a general
tie-up of utilities? Is there a public policy that can be followed to avoid compulsory arbitration
of such disputes?
In reply to a question whether there should be Government interference in labor disputes
which seriously interfere with the public supply of the necessaries of life and essential services,
the banker stated as follows: He had confidence in informed public opinion freely expressed, and
therefore believed with the Judge that any necessary restraints imposed in the public interest
upon abuses of power by either management or labor should be as prescribed by Congress and
not by the courts in legislative areas. The Wagner Act was an expression through Congress of
public opinion that management's abuses should be restrained. There have been two principal
troubles with the Wagner Act, one a fault of substance and the other a fault of administration.
Both have combined to perpetuate a spirit of conflict which, as the economist has said, amounts
to organized warfare. Two people with conflicting interests cannot be thus thrown into an arena
and told 'Now you love each other' with desirable results. Since the Wagner Act was a product
of Congress, it is the responsibility of that body now to correct its faults in substance, and it is
the responsibility of the Executive to correct the faults of administration, so that proper re-
straints may be placed also upon abuse by labor of economic advantage. He believed with the
economist that time had been too short for the development of enlightened labor leadership. He
doubted that ultimately all the desired results in labor-management relations could be attained
through legislation. He suggested that the only real progress can ultimately be attained through
educational processes designed to make all parties less selfish. Until fair processes for nego-
tiation can become better developed and labor-management disputes can be more generally
settled thereby rather than through work interruptions, Government interference seems a re-
grettable but necessary expedient in disputes which seriously affect the public interest. The
management representative remarked that having the government take over a whole industry is
only a temporary expedient.
The judge agreed. The Smith-Connally Act, he pointed out, proved inapplicable in the
coal crisis and it is equally unlikely that measures now being considered by Congress will be
applied when a crisis comes. It is imperative to deal directly with labor leaders.
When the banker said that the threat of fines should be sufficient, the judge referred to
what the government had done in the coal crisis. Then the lawyer asked, just how far is labor
willing to go legally or illegally? He added that he would rather get to a destination intentionally,
rather than just drift there.
Along that line, the chairman called attention to the problem currently faced by our
British friends of the present government. Public opinion here is clearly against the tie-up of
the production of basic resources,
The organization executive said his group, largely composed of business firms, is trying
to maintain a position based upon consideration of what is best for the public interest. The organ-
ization is especially interested in the proposal of Professor Sumner Slichter of Harvard that
Congress enact a law establishing a mechanism for use in the event of labor disputes affecting
the public health, safety, and welfare.
- 35 -
Professor Slichter says: "In cases of this sort, what instruments should the government
have to defend the rights of the community? The government's policy should be based upon a
declaration of rights of the community--a public bill of rights. This declaration should assert
the right of the community to an adequate supply of essential services and commodities. It
should place upon the President (or in the case of state legislation, the governor) the duty to
declare that a public emergency exists when a threatened or an actual interruption to production
so seriously limits or threatens to limit the output of essential goods and services as to imperil
the public health, the public safety, or the general welfare. The declaration should provide that,
after the executive has found that a public emergency has been created by a strike or threat of
strike or by a lockout, work shall continue under the terms of the previous contract until new
conditions of employment have been determined. The union shall be required to rescind any
strike orders which it has issued and to order back to work any of its members who fail to live
up to their obligations under the extended contract. Union members who fail to obey the return
to work order or union officials who refuse to rescind strike orders or to order men to resume
work shall be disciplined by the union in accordance with its laws--in the same way that the
union ordinarily disciplines members who violate its rules. A union which fails to order its
members back to work or which fails to discipline the members who violate its orders may be
required by the National Labor Relations Board to show cause why it should not be deprived of
its bargaining rights in the affected plants until such time as it shows that it has become a
responsible organization. Similar obligations shall apply to employers in case the interruption
to essential production is caused by lockout.
"The finding that a strike or shutdown would imperil the public health, safety, or general
welfare shall make any strike or lockout illegal. All picketing in support of strikes which imperil
the public interest shall be forbidden and likewise all payment of strike benefits, the holding of
strike meetings, and other activities designed to promote the continuation of the illegal shutdown.
These prohibitions shall be supported with suitable penalties.
"The parties shall be given three options for settling the dispute. In the first place, they
may agree between themselves to continue negotiations in their own way. In the second place,
they may agree to submit the unresolved issues to arbitrators selected by themselves. If they
are unwilling or unable to use either of these two procedures, provision should be made to sub-
mit the dispute to other arbitrators. The method of selecting the arbitrators is important. The
United States Conciliation Service should maintain a permanent panel of arbitrators who are
regarded as fair and competent. No person should be a member of this standing panel of arbi-
trators unless his selection has been approved by a labor-management committee advisory to
the Conciliation Service. From this panel of arbitrators the union or unions involved shall be
permitted to select one arbitrator and the employers another arbitrator. These two arbitrators
shall select the third member of the board. If either party refuses to select its member of the
arbitration board, the head of the Conciliation Service shall make a selection from the standing
panel of arbitrators. It is important that each party be given an opportunity to select one mem-
ber of the board and it is important also to keep the selection of the third member out of the
hands of politicians.
"The findings of the board shall be retroactive to the expiration date of the previous con-
tract between the parties and shall also be binding upon both parties for a period not less or more
than six months. This period is long enough to enable the two parties to negotiate a lasting settle-
ment which may be more to their liking than the findings of the board."
Congressman Herter and four other members of the House have joined in sponsoring a
bill based upon Professor Slichter's proposals. Mr. Slichter points out that the success of such
a measure depends on the moral force of public opinion. If the public does not fight for its rights,
those rights will not be respected.
Following the November elections, the member making these comments said, many
businessmen felt all they had to do was to sit back and let Congress write a law that would set
- 36 -
all to rights. Of late, a somewhat more realistic attitude is in evidence; also, on the part of
many, a fear that, after all, Congress is not going to enact as drastic a law as they wanted.
Community Councils
The organization executive continued that his group believes strongly that there is much
that can and ought to be done on a community basis, and has called the attention of its member
firms to the techniques of the Vermont Industrial Relations Council and the Industrial Relations
Council of Metropolitan Boston. The Vermont Council, little more than a year old, has already
succeeded in adjusting several disputes referred to panels of its members. These panels are
composed of union leaders and manufacturers. Groups in two cities in southern New England
are seriously considering the organization of industrial relations councils among similar lines.
They believe that a great many purely local work stoppages can be prevented if labor and man-
agement will join in setting up city or district organizations to help the parties of a dispute to
reach a settlement without resort to strikes or lockouts. They do not believe, however, that
industry-wide disputes can be dealt with on a local or community basis.
The chairman then asked the state labor official if there ought not to be a nationwide
association of state commissioners of labor and industry, through which these officials and
their deputies could get together for joint consideration of the problems of labor-management
relations? He pointed out that such officials are close to the grass roots, are acquainted with
the rank and file, and understand the desirability of getting the conciliation process to the peo-
ple.
Reliance on community councils to assume responsibility for settlement of disputes,
however, was felt by some to have a possible negative effect in encouraging management to take
an opportunity to go back to sleep again. Several present felt that action along these lines would
be helpful if backed by labor leaders such as were present, but thought some labor leaders felt
the cause of labor might be prejudiced if its case were put in the hands of any community group.
It was admitted that this feeling had come up in state meetings in Massachusetts.
Again emphasis was given to the importance of labor's taking initiative in proposing legis-
lation. Unfortunately, there are those who apparently do not dare take such a step.
The judge referred to the Barnes Bill, to require unions to file financial returns with the
state. This proposal had been a major issue in the recent campaign, in which its author ran
successfully for attorney general. The large vote on the referendum by which it became law, he
said, indicated that the general public was convinced it would be advantageous.
The rank and file of labor, the lawyer said, feels as the rank and file of management does
on the subject of secondary boycotts and jurisdictional disputes. As an example of the extent to
which these are carried, he cited the case of a self-employed tile layer who he believed was
picketed by the union even though he was employing only himself.
The chairman ended the meeting by asking that all continue to ask themselves the ques-
tion: What do people on both sides desire to do in regard to the problem of labor-management
relations? What they will eventually decide will determine what Congress will do.
-
37 -
GETTING ALONG LOCALLY
Attendance at a discussion in Little Rock, Arkansas
March 2, 1947
Frank Cantrell, Manager, Business Organization, Arkansas State Chamber of Commerce
S. P. Dixon, Deputy Commissioner, State Department of Labor
Edwin Dunaway, prosecuting attorney, 6th judicial district, Arkansas
James B. Feeney, Staff Representative, United Steel Workers
Brooks Hays, Member of Congress, Arkansas
Walter H. Harris, State Director, C.I.O.
James H. Penick, President, Worthen Bank & Trust Co.
Thomas S. Staples, Dean, Hendrix College
K. D. Vance, Business Manager, International Brotherhood of Electrical Workers Local B-295
H. L. Winburn, President, Niloak Company
Wesley Wood, on furlough, U. S. Conciliation Service
- 38 -
Getting Along Locally
(On March 2, 1947, the Arkansas Policy Committee held a meeting in
Little Rock, attended by members from industry, labor, banking, ed-
ucation, law, government.)
At the opening of the meeting, reference was made to the bills on labor matters cur-
rently before Congress and in various stages of enactment by state legislatures. These are
calculated to deal with breakdowns in labor-management relations such as occurred last year.
The handling of extreme cases may be necessary, but how can cases be kept from getting
extreme?
Closer and more continuous relations between labor and management were urged by a
union leader with long experience in the area. Periodic assembly around a table, for discus-
sion, at fixed intervals, can catch a great deal of incipient trouble before it gets too far.
Monthly meetings of equal numbers of representatives of unions and contractors are now
serving this purpose in Little Rock. Conditions over the state as a whole, and particularly
those in the electrical industry, have improved a hundred percent, this member thought.
In other words, a government man suggested, if the two sides do not wait for the bar-
gaining hour to strike, and get together before there is an incident, disagreements and stop-
pages are much less likely.
-
Storms ahead can be foreseen just like the weather, the previous speaker replied
trouble can usually be seen at least a month off. The thing to do is to talk when nobody's mad.
An educator asked this member what the main causes of friction are. One of them, it
was said, is when workers from up East come into Arkansas and try to get Pennsylvania condi-
tions in Arkansas all of a sudden.
Is the union the best vehicle to educate men to management's problems, and the problem
of industry generally, a government man asked? He mentioned the appropriation made by
Congress last year for a labor extension service in the Department of Labor.
Unions might well put in courses in salesmanship to sell their problems to management,
an employer representative held. Now, employees frequently approach difficulties in a trucu-
lent attitude. Too often matters reach a point where workers, wanting a change in conditions,
abruptly reach the breaking point, and a crisis exists which could have been avoided.
A member remarked that the previous union speaker came from an industry where con-
ditions have been static for quite a period. Where have the recent difficulties been?
Little Unrest in Arkansas
-
Another union member remarked that taking the picture overall, Arkansas has probably
had less unrest in the last three years than any other state in the Union. At the moment, there
were less than half a dozen strikes in progress.
Since last August, there has been a taxi drivers' strike in Little Rock. The main trouble
about that situation is that relations looking toward a settlement have not continued. A picket
line was put up; after that happens it's always harder to find a settlement.
The local antagonism against labor, he thought, is mostly due to what has happened in
places like Hollywood, Pittsburgh, Detroit; the recent action of the Arkansas Legislature probably
had events elsewhere primarily in mind.
✩
- 39 -
Three current strikes were analyzed by this member. One at a cotton seed oil plant was
called ill-timed and ill-advised. In fact--he thought unions have to be big enough to accept their
responsibilities--there was no necessity for that strike at all. Notwithstanding the fact that the
law specifically exempts this industry, the union made an effort to get the company to pay time
and a half for time worked over eight hours in a day or forty hours in a week. Everything with
the exception of this demand had been realized through the negotiators. The strike reflected
the inexperience of the union leaders.
When a law exempts the manufacturer in a given industry, this member went on, the only
kind of a job that can be done is by salesmanship, not by compulsion. Many manufacturers have
agreed to better terms than those on which they could halt under the law.
A second strike, this member said, also ill-timed and ill-advised, concerned a War
Labor Board decision handed down before that agency was dissolved. Some employers agreed
to comply; others, including this one, bulled their necks and decided not to do so. The proper
procedure would have been to take this employer to court to see if a decision made while an
agency was in effect would not be sustained. In all probability, it would have been. In any case,
there was no need for a strike, and this one is a lost cause, and being called off. The employer
has started to hire new people under the State's anti-violence law, and is now paying 10 cents
an hour more as a hiring-in rate than he was required to pay by the WLB decision over which
the trouble started.
A third strike analyzed by this member is at a furniture company where an NLRB elec-
tion in a plant of just over 200 workers showed 182 votes for and 1 vote against the union. The
company's lawyer had plans for a vacation; the union agreed not to start contract negotiations
until he got back.
Meanwhile, a proposed contract was drawn up to submit to the company. About 80% of
the people were getting 40¢ an hour after 8-12 years of service. After comparing the scale of
this employer with other firms that had signed contracts in this State, the union asked for a
55¢ hiring-in rate, to be raised to 60¢ after 60 days, and a 10¢ per hour increase for previous
employees.
The company countered with a 50¢ hiring-in rate and a 7-1/2¢ increase. Negotiations
dragged along from August to November, when a strike notice was filed. The U. S. Conciliation
Service was called in. Shortly before Christmas the union negotiator made an effort to get the
company to agree to other demands if the union accepted the current wage scale for the moment
and submitting the wage issue to arbitration. This was refused. A strike has been in progress
since December 28th. The union has proposed various responsible citizens as arbitrators,
including a furniture manufacturer. The member making this analysis professed himself a
firm believer in arbitration. But in a case like this, what is there to do?
Is that refusal typical of employers when dealing with the C.I.O., a government member
asked?
An industry member said here was one side of the story; doubtless there is another.
He wished the employer in question was present to put his case.
Management's Problems in Newly Industrialized Areas
The main concern of employers who are disturbed over organization efforts in their
plants, this member continued, has to do with the possibility that the moves are not spontaneous
but come from sources outside the state. This is probably quite a factor in current resistance.
-
- 40 -
Another form which this resistance takes is opposition to industry-wide bargaining.
Employers frequently feel that bargaining should be restricted to conditions in the State, that
union activity should be on a State rather than a national scale.
The garment industry was cited by a government member as a case in point. The gar-
ment union, he held, has become an arm of the New York industry, primarily serving the inter-
ests of another region. Its tendency is to stifle industry in this State in favor of that of another
region.
Sales from this State, an industry member carried the point further, are made on a price
basis. Few firms have the capital to go into the national market through nation-wide advertising
etc., and since products are sold on the basis of price, Arkansas costs have to be kept down to
compete with manufacturers who are nearer to mass markets. The furniture industry is like
that too.
Inter-Regional Competition
Unions are willing, a labor member said, to take account of existing differentials in
transportation costs, giving consideration to the location of a given factory in relation to the
centers of mass purchasing.
But it should not be forgotten that large sectors of Arkansas industry are controlled by
Eastern capital. Where that is so, the competitive advantage comes out of the workers' backs.
Employers, he went on, say the situation of Southern workers is different--it is cheaper
to live here. But women's clothes are higher here than in Chicago or Detroit. It takes the same
amount of food to feed a family, and almost as much clothing (perhaps not quite so many winter
things). Yet the wage differential between North and South for the same classifications of work
in the furniture industry runs as high as 45-50¢ per hour.
An industry man expressed doubts as to whether the Bureau of Labor statistics cost of
living index would indicate as little variation among regions in living costs as the previous
member suggested. Moreover, he said, Arkansas is an agricultural state. Theoretically, the
worker should be paid as much here as in the North. But this area lacks both capital and indus-
trial environment. It's necessary to take a realistic view. If industrial employment isn't avail-
able in this State, a worker has to fall back on agricultural employment or none at all. It's
better to have employment at 40¢ an hour than work for nothing in agriculture.
Furthermore, the point about foreign ownership applies only to primary products--oil,
lumber, etc. The consumers goods industries of the State, garments, furniture, etc., are
mostly carried on by local manufacturers trying to build up industry and stay in business.
T
C
The union man who had previously spoken said there was a further point. Whether or
not the capital for Arkansas industry is local or from outside, are manufacturers concerned
with Arkansas alone or with the maintenance of fair competition in the nation? When the capital
is outside capital, the money made in Arkansas is taken outside in any case. But 40¢ is not a
living wage, and employers paying it are demoralizing the conditions of employers paying a
fair wage.
How Cheap is Low-Paid Labor?
Then there's another angle on it, he continued. A worker getting 40¢ an hour is probably
putting in about 40¢ worth of work. Cheap labor can cost an awful lot--a good many employers
have acknowledged that low wages won't attract proper help, or if they do, the help won't put out
for that rate. Clearly, everything can't be done in one leap, but there should be a gradual move
up.
- 41 -
The labor member who had spoken at the opening of the meeting corroborated the effect
that low wages in Arkansas and higher wages elsewhere are having on the manpower situation
in the State. Men--the best mechanics--are leaving the State daily, according to the records
of his union. All over the world there are Arkansas men.
Technological and Financial Limitations on Industry
The problem of the small Arkansas manufacturer's struggle to survive and grow and
get into the national market was outlined by an industrialist who said that the main difficulties
lie outside the labor field, in technology, in finance, and in the barriers existing in the channels
of free enterprise. In the small plants of the State the employer usually knows his people, where
they live, where their children go to school, who is sick.
In companies so large that this kind of familiarity is impossible, he went on, the problem
is different. Local manufacturers, he thought, are inclined to look on the present struggle as
between outside powers--outside capital and a determined and poorly advised labor interest.
These problems must be thrashed out so that they won't upset the whole economy--they're part
of the general problem of how to make democracy work in this age and time.
The Closed Shop Ban
A lawyer said that he thought the answer would be given largely in terms of how employees
and employers get along locally. He inquired what will be the effect on their relations of the
enabling act just passed by the Arkansas Legislature providing stiff penalties for having a
closed shop contract. (This clause was attached to the constitutional amendment banning a closed
shop that was passed in 1943.)
Commenting that people will never be legislated out of their unions, a labor member said
that a labor organization, after winning an NLRB vote, is designated to represent every worker
in the given bargaining unit. Unions have tried to get four types of security; maintenance of
membership; a preferential shop; a union shop; a closed shop. The C.I.Q.. does not have the closed
shop; the A.F.of L. does, in its craft organizations covering diversified industries.
With this law, it looks as though all contracts since 1943 with any of these provisions are
in violation. Unions must now support their members individually, not using the method of
handling grievances through shop stewards.
One section of the enabling act, he continued, forbids any organization to sign a contract
containing a closed agreement. The desirable next move--whether a likely one or not is some-
thing else again--this member concluded, would be for some industry to join labor in a test case
in interstate commerce, which would go to the Supreme Court and test of constitutionality of the
act under the 14th amendment.
-
Some possible difficulties likely to be caused by new and proposed legislation were sug-
gested by a government man who referred to a comment he had recently heard discussed in
Congressional circles. It was said that anti-closed shop legislation interfered with an employer's
freedom to have a closed shop. The FEPC, if it had been passed, would have cut the freedom of
an employer to hire whom he chose. Yet some of those who argued against the FEPC are now
arguing for the anti-closed shop bill. In so doing, they are reversing themselves.
Suppose sixteen men are discharged on the eve of a plant election, a labor member said.
The recourse under this act would be sixteen separate suits for reinstatement. And under this
act there is no protection for mechanics who have put in skilled apprenticeships, another union
man added.
- 42 -
Regulation of Picketing
The discussion moved on to regulation of picketing. Abuse of picketing has produced
some of the present difficulties, a government member said. Isn't some regulation necessary
to achieve justice?
An industry member illustrated with an instance from a bakery: the union, in trying to
organize the driver-salesmen, put in a picket line. Then the bakers wouldn't cross it. That
tied up the bakery. Was that right?
A labor member said his organization didn't believe much in picketing--there are other
ways of doing it. Another union member, however, said that circumstances differ between in-
dustrial unions and craft unions--the latter can use the other crafts to cut off the flow of goods.
He himself believed in picketing, but peaceful picketing. The tradition of not crossing picket
lines is maintained by the A.F. of L. and C.I.O. with regard to one another's lines.
The anti-violence law, he held, takes care of everything on the line. Perhaps some day
both sides will grow up and have a Board of Conciliation for an industry made up of union and
employer representatives, with an umpire at the top.
Acute situations, he admitted, have been created on the picket line. But the employer is
sometime partly or wholly responsible for acts committed there, with a view to using them as
a basis for an injunction in intra-state industries not covered by the Norris-LaGuardia Act.
There's the tough one, a government man and a labor member said simultaneously; the
government man recalled the findings of the LaFollette Committee.
But on the other side, an industry member countered, violence in the picket line has also
been inspired by Communists.
Yes, but we've cleaned house there, a labor man answered, and the more legislation and
restriction there is, the more the law makers will play into Communist hands. It was the defin-
ite policy of the Communist Party at the close of the war to cause strikes and strikes. But the
rank and file are learning. Yet if legislation is now passed, the Communist Party will have
something to point to and work on as a grievance.
Remarking that management has borne the brunt of the legislation of the past fifteen
years, a management member referred to the C.I.O. electrical workers' film "Deadline for
Action" which he understood had been made by a man now under indictment for serving in
O.S.S. without saying that he was a Communist Party member. The film, this member said, was
clever, but full of distortion, and indicative of an element in the C.I.O. that is not concerned with
the welfare either of the United States or of the bulk of C.I.O. members.
C
Another member recalled the Lockheed strike during the war, where the majority who
wanted to work had to have protection. He pointed out that it was possible to provide protection
only because of war powers which the government does not now possess. He called such a situa-
tion collective intimidation rather than collective bargaining.
But it was Frankensteen, not the government who settled that, a union member countered;
he kicked out the local officials and went in with the government.
A government man who thought that peaceful picketing should be unrestricted was coun-
tered by a management representative who said, But how to keep it peaceful? What if agents
start turning over cars and so on?
- 43 -
Have cars been turned over in Arkansas, a union member queried? He suggested the
management member had been reading outside pamphlets.
Conciliation Procedure
If a way can be found to promote peaceful relations, a member with experience in
mediating industrial disputes turned the conversation, there is no picketing problem. Conci-
liation is an antidote for strikes.
Most of the Arkansas cases for which the U. S. Conciliation Service is called in, he said,
are new cases, from firms where labor and management have refused to meet. After that,
things go better. He instanced a firm which had defied organization for over half a century.
Recently, it was organized. Conciliation followed an initial period of refusal to meet with the
union; now the plant has a labor-management committee, an incentive system, and a better
operating record than ever before.
M
The incentives in another firm making a primary product--vacations with pay and hos-
pitalization--this member continued, are paying off in terms of both dividends and good feeling.
Some method must be pushed for educating the men who actually do the dealing on the
two sides, he said--and each must handle its own; they won't take it from each other.
A union obligation to educate its officers and shop stewards was recognized by a labor
member.
The immediate supervisor of a job, the previous speaker continued, is the biggest
general manager a company has.
Arkansas, he went on, is a low field in the pay for common labor--there is one other
comparable city with a lower labor rate than Little Rock. As a result, people are leaving. The
coal, bauxite, lumber and other industries are working thousands of people, and not paying them
enough to hold up their end of community buying power. That's bad news for everybody from the
banker to the grocer.
The more legislation that is passed, this member thought, the more people will leave.
Take the bone of contention mentioned earlier, the exemption of cotton seed oil factories and
canning factories from the 40 hour law. Next door to a plant where overtime begins after 40
hours there'll be a plant which can work 56 hours without overtime. The class of labor that
will work at that plant is the kind that can't get a job elsewhere and can't get out of town. To
find and hold efficient labor, this member held, contracts of such firms will at least have to
contain compensatory items like vacations.
Ironically enough, the maker of these remarks concluded, much of the legislation that
has been passed has turned out otherwise than intended. The NLRB, which labor wanted, has
produced a bad competitive situation. Two companies may be located side by side, but one will
be subject to the NLRB because engaged in interstate commerce while the other cannot be
reached because its operations are intrastate.
On the other hand, the Smith Connally Act, which labor didn't want, has worked to the
detriment of management.
Rather than look for new laws, a labor member said, how about implementing those
that are already on the books? Appropriations for the U. S. Conciliation Service would do a lot
more good than new statutes.
- 44 -
An industrial member said that he had been overseas when the anti-violence bill was passed,
but thought it only denied the picket line. He wondered where people are working for the 40-50¢
rate that had been mentioned--he didn't know where help could be got for that.
Inter-Regional Competition Again
Arkansas doesn't want peonage labor, he continued, nor for incoming industries to under-
pay. He thought that the new plants being attracted through the efforts of the New Industries
Committee of the Chamber of Commerce are not operating that way.
;
On the other hand, he warned, Arkansas can't start from scratch in competition with man-
agement that already has know-how and workers who already have skills.
He saw little difference between whether an industry is based on local capital, as the textile
industry is in this state, or on outside capital, as the shoe industry is. Local people have to meet
the same standards as outsiders--the rain falls on the just and the unjust.
Many of the firms in the woodworking industry, this member went on, are, according to
Dun and Bradstreet, unprofitable concerns. That doesn't mean that they should therefore be
allowed to work their men at a disadvantage. But they may be just poor managers, trying to run
a business they don't know about on a shoestring. Certainly the worst plant is the one with the
worst machinery, just as the worst employee is the most inefficient one.
One of the labor men said that the woodworking plant to which he referred has other estab-
lishments elsewhere in the country, and that the overall operation has been a very profitable one;
nevertheless, another union executive said, the Arkansas plant is a model of inefficiency--the
machinery in use there now is the same machinery he himself installed thirty years ago. In a
ramshackle set-up, there is little incentive for the workers--what if the machinery doesn't turn
over, they feel, what if the belt does bust.
A number of industries beside woodworking have plants that are not financially strong
enough to meet union demands, a government man said. He thought that for them the help of
the Conciliation Service's technicians might spell the difference between profitable and unprofi-
table operation.
But a manufacturer thought the usefulness of such outside experts was marginal: most
manufacturers, he believed, know more about their business than anyone who can be sent in.
The difference in the capacity to pay between the more and the less efficient locally owned
firms was estimated by a labor man as at least 10¢ per hour; a management representative com-
mented that the foreign-owned coporations were starting at a higher wage than the local compan-
ies.
Education for Labor-Management Relations
Education as a long-range approach to problems of labor-management relations was urged
by participant who said that most Arkansas people think of education as going to school for a while
and then having done with it. If Arkansas people in general were as open minded as the group
around the table--and they probably are though the rank and file aren't as far along--local solu-
tions of difficulties would be enormously facilitated. A solution cannot be reached through the
press by either side, and while some of the solving may have to be done by law, this member
said he was not prescribing the law--this country has been trying to bring monopoly under con-
trol from the Civil War till day after tomorrow; it may take that long to settle management and
labor problems too.
While the agricultural education that has been done is probably not more than 20% efficient,
the speaker thought it worth the money at that. Parallel efforts should be made in respect to
- 45-
N
industrial processes. Moreover, there should be a public school program under which a fourth
of the child's time through high school should be given to the study of American democracy--
and not just political democracy. Precedent to such a program is the provision of prepared
teachers--putting it into the school by statute without someone who can teach it would be actually
harmful. And that raises the teachers' pay question. But such a program, this member believed,
is the alternative to totalitarian education. Democracy will solve these problems or they'll be
solved by other means.
A union member said that his organization is putting $3,000 into the education of its peo-
ple in Little Rock; the previous speaker said less education would have to be undertaken on a
factory scale if more were done as a part of general education. Labor unions will get mature
after a while, he said, and industry is maturing.
In-Plant Relations
Again the talk turned to local in-plant relations. A labor-management committee on ma-
chinery, set up to get suggestions, could help people get together, it was said. And not only get
together but stay together, a manufacturer added. Everyone, he urged, should be concerned to
approach these problems as a means of making democracy work. The process, of course, is
much simpler in a smaller plant--in larger industries, often, a super starts to drive, and gets
what's coming to him.
C
That's why it's important to save small industries in Arkansas, a labor man said, and to
teach children what makes democracy tick--if so, there won't be room for Communism.
A labor man who had not previously spoken cited some instances of the results of local
labor-management committees in the steel industry. One firm, normally making roofs for box-
cars, took a wartime contract for landing mats for airplanes. It fell behind on its orders to the
extent of being told its contract would be cut off. The press that made the mats was run by a
treadle requiring the operator to lift his foot a considerable distance. By locating the slow point,
and working out a simple device of putting a plank on the treadle so the operator had merely to
rock his weight forward to set it in motion, the output was stepped up to a satisfactory rate.
In another steel foundry oily rags used on the machinery, instead of being hauled to a dis-
tance and destroyed after one using, were cleaned by the steam from the furnace and put back
into circulation.
Suggestion boxes, with awards for the best ideas, decided on by a labor-management com-
mittee, were also cited. In one mill 14 open hearth furnaces, of 50 ton capacity, were stepped up
to 70 ton capacity during the war. That meant faster work to wheel the stuff in--production went
up 140%. One of the men broke two axles on his truck, in rapid enough succession to be given a
5 day layoff. While he was laid off, he was awarded a $10 check for the week's best suggestion--
to fix the holes in the wood block floor so that truck wheels wouldn't drop in and break axles.
At a paper company, where there had been nine strikes in nine years, a labor-management
committee was set up four years ago. There have been no strikes since. Contract negotiations
have been undertaken well in advance of expiration dates. A technical committee has raised pro-
duction 35%. The union and the company are now exploring an annual wage.
And what about compulsory arbitration when local arrangements fail, a government member
queried?
Question marks were clear on the faces of both management and labor members. If it
could be arranged under impeccable conditions that would justify confidence in both sides, O.K.,
maybe, a management representative said. Not compulsory arbitration, a union member urged--
there'd be no need for it if both sides get educated.
- 46 -
WHO'S WHO ON THE NATIONAL POLICY COMMITTEE
1
Chairman, David J. Winton, Minneapolis, Minn.: chairman, board of directors, Winton
Lumber Company.
Vice-Chairman, J. Douglas Brown, Princeton, N. J.: dean of the faculty, Princeton Uni-
versity.
Vice-Chairman, Brooks Hays, Little Rock, Ark.: member of Congress.
Vice-Chairman, W. W. Waymack, Des Moines, Iowa: member, Atomic Energy Commission.
Treasurer, Marion H. Hedges, Washington, D. C.: research director, International
Brotherhood of Electrical Workers.
Executive Director, Helen Hill Miller, Washington, D. C.
Sherman Adams, Lincoln, N. H.
Mildred Adams, New York, N. Y.
Herbert Agar, Sasabe, Arizona
William H. Baldwin, New York, N. Y.
William L. Batt, Philadelphia, Pa.
Harry A. Bullis, Minneapolis, Minn.
Henry Miller Busch, Cleveland, Ohio
James B. Carey, Washington, D. C.
Richard F. Cleveland, Baltimore, Md.
James B. Conant, Cambridge, Mass.
Franz E. Daniel, Spartanburg, S. C.
Charles G. Dobbins, Montgomery, Ala.
Goldthwaite H. Dorr, New York, N. Y.
Roscoe Drummond, Washington, D. C.
Allen W. Dulles, New York, N. Y.
John W. Edelman, Washington, D. C.
Harry A. Ehle, Philadelphia, Pa.
Marion B. Folsom, New York, N. Y.
E. Howard Hill, Minburn, Iowa
Watts Hill, Rougemont, N. C.
Edwin P. Hubble, Pasadena, Calif.
Joseph D. Keenan, Chicago, Ill.
Allan B. Kline, Des Moines, Iowa
Edward J. Meeman, Memphis, Tenn.
Francis P. Miller, Fairfax, Va.
Bradshaw Mintener, Minneapolis, Minn.
G. Barnard Noble, Portland, Ore.
J. Robert Oppenheimer, Berkeley, Calif.
H. W. Parisius, Washington, D. C.
James G. Patton, Denver, Colo.
Walter M. Phillips, Philadelphia, Pa.
Sidney Sherwood, Washington, D. C.
Raymond Swing, Washington, D. C.
Charles P. Taft, Cincinnati, Ohio
Henry P. Van Dusen, New York, N. Y.
Robert J. Watt, Washington, D. C.
Josephine Wilkins, Atlanta, Ga.
Harold E. Wood, St. Paul, Minn.
Clifford E. Zollinger, Portland, Ore.
The strategy of labor's making positive proposals was again recommended by a public
member, and underlined by a management member who said things are not entirely right as
they are and these problems must be solved, and a commentator who said organized labor's
attitude has been wholly negative. The speech during the morning session by the educator who
stressed the preponderance of the public over either or both of the industrial contestants was
recalled.
The labor men agreed that public sentiment is a great factor and that organized labor had
probably done a poor job of reaching it. But press and radio are generally hostile. At the same
time, one member in particular warned that the type of legislation now being passed at the state
level and considered nationally might prove a powerful instrument in driving labor to the left,
especially if it made it impossible for established American unions to operate.
These considerations, a journalist concluded, amply illustrate the American problem.
Democracy cannot be maintained unless the contestants are willing to face the fact that there
is a sentiment in the country for reconciliation.
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*
:
If the unions are dynamic and their benefits are demonstrable, why the problem about getting men
to join?
In answer, the inequity of some of the men in a plant paying for the organization that bene-
fits all of them was pointed out. The commentator asked what happens in a shop where mainte-
nance of membership is not included in the contract? A C.I.O. man said that if a union wins an
election and is designated as bargaining agent for a plant, the wage scale becomes generally avail-
able, but the union offers its other protections to the men who pay dues--for instance, if a non-
union worker gets fired he doesn't go to the union. The possibility of strikes caused by rival
unions for designation as bargaining agent was recognized; the labor men seemed agreed that a
certified bargaining unit should continue to be recognized for the life of its current contract.
-
Intraunion Democracy. The possibility of arbitrary treatment of individual union members
by officials of their unions was pressed by an economist who said
that they had small means of redress against business agents who hold their jobs by appointment
under perennial union officers. He thought there is a large opportunity for a dose of democracy
within union organization.
Rebuttal was promptly offered by a labor official who said that members do have democracy:
they elect their committees and officers at regular elections; there is grievance machinery wher-
ever there is a contract, and appeal procedures make it possible for a member to take his case
all the way to the national convention.
Union Responsibility. An economist returned to a point on contractual relations that had
been discussed during the morning. In a union shop, aren't rela-
tions sufficiently equal to warrant the union assuming responsibility? The employer agrees to
deal with one group, and all workers must join it. Doesn't that give the union enough control to
assume liability for the discipline of its members?
An A.F. of L. man was worried about troublemaking stooges. A C.I.O. man referred to
incipient confusion arising from hasty and unfriendly legislation--he said that in Alabama unions
are now liable to suit both for disciplining members and for not disciplining them.
-

The economist remarked that responsibility for contracts meant that officials should assume
only responsibility for commitments they officially undertake; a union man countered that current
bills are aimed at heads of unions and their treasuries rather than at irresponsible individuals.
A government man noted that in Louisiana, where there is a little Case Bill, unions are taking no-
strike clauses out of new contracts so as not to be held liable.
Violent labor measures, a newspaperman agreed, are not likely to be useful. But why doesn't
labor offer some proposal for avoiding crises like last year's? Do they feel everything is all right
as it is? This country doesn't want either Fascism or Communism; it must find the right way to
avoid impossible situations like the mine and rail strikes last year. (When a labor man said that
the coal stoppage lasted only 17 days and more coal was mined last year than ever before, the
editor said he begged the question.)

The possibility of legislation outlawing strikes affecting the American people, in coal, steel,
railroads, for instance, was foreseen by a labor man who said that if that were done, compulsion
of some kind must accompany it. Both employers and employees are against compulsion, but the
voluntary experience of the past is not enough. Compulsory arbitration is the only answer--other-
wise when employers say no, and labor can't strike, there is no redress.
Another labor member suggested wider application of the principle of the railroad mediation
act. Matter submitted by both sides would go to adjudication, and both sides would accept the re-
sults.
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